Deck 5: Negligence, Professional Liability, and Insurance

Question 1

Two real estate agents, pressed for time, stopped at the bakery for some muffins that would suffice as lunch. John bought the muffins and gave one to Mary. They both began to eat the muffins as they hurried to the car. When Mary looked at the muffin she had just bitten, she saw that the raisins had little worms in them. John's muffins were the same-with little worms. Based on these facts, which of the following possibilities is true? (Read each independently from the others.)

A) Since Mary did not buy the muffins, she could not sue in contract, but if she were injured, she could sue in tort.
B) Even if Mary was not injured by eating the worms, she could sue the baker of the muffins for nuisance.
C) If Mary sued the baker of the muffins or the packer of the raisins, she would have to prove only one thing to win her case-that there were worms in the muffin.
D) Mary has a cause of action against the baker of the muffins only if she can prove that the baker used bad raisins on purpose.
E) Mary can do nothing since she did not purchase the muffins.

Answer 1

A

Question 2

The provincial government thought that the only way to make businesses competitive with those from other countries was to make more information available to them about market conditions, currencies, etc., around the world. It began a program of incentives that included a government office that would give people not only the business information but also advice on how the businesses could link up to the government's database that held the updated information. Mr. Su relied on some information given to him by Alex Chec, an employee of the government. The information was wrong due to a mistake made by an operator entering data. It was Mr. Chec's job to cross-check that information before it was released to the public. He forgot to do it. Mr. Su suffered a $100,000 loss because of the error. Which of the following is true?

A) If Mr. Su sues the government on the principle of vicarious liability, he cannot also sue the employee, or employees, at fault.
B) Mr. Su could not take any action because he suffered no physical injury. The case only deals with information.
C) The court must find only one party liable and that party must pay for all of the damages.
D) Mr. Su could not take any action because he had not entered into a contract with the government for this information.
E) The operator may be found liable for negligence if Su, the plaintiff, can prove, among other things, that he owed him a duty of care.

Answer 2

E

Question 3

In which of the following cases is a legal duty not owed?

A) A person undertakes to rescue someone in danger
B) It would be apparent to a prudent person that the conduct was likely to cause injury
C) A person making a misstatement knew that it would be relied on by a member of a group
D) A visitor comes on your property
E) A person sees another in desperate need of assistance

Answer 3

E

Question 4

The director of the children's zoo, Mr. Watson, was appalled to see an employee, Jake, throwing a pitchfork like a javelin in an area where there were both animals and children. Luckily, no one was hurt. He yelled to Jake to get busy and feed the birds so that the birds would come closer to the children. Jake opened a new sealed bag of feed and threw some to the birds. It happened that the manufacturer of the feed, ordered by Watson, had accidentally mixed some caustic substance with the feed, so that later in the day Jake's hand began to blister badly. Jake sued Watson for negligence because of the burns he suffered; Watson sued Jake for negligence because of the way Jake used the pitchfork. On these facts, which of the following is true?

A) Jake will be found liable for negligence because he was careless with the pitchfork; a reasonable person would not have done what he did.
B) The test the court will apply to determine whether or not Jake owed a duty of care is this: would a reasonable person foresee that his acts could affect the animals and children?
C) Watson owed Jake a duty of care and Watson will, therefore, be liable for negligence.
D) Children attending a zoo are voluntarily assuming any risk.
E) Jake could not sue the manufacturer because he did not buy the feed.

Question 5

Which of the following statements with regard to the tort of negligence is False?

A) If a person is injured by a defective product that he himself did not purchase, he can sue the manufacturer for negligence.
B) If the court finds contributory negligence, the defendant has no liability at all.
C) If physical injury can be foreseen as the result of a person's negligence, the wrongdoer will be liable for all the injury suffered although the person injured was unusually weak and infirm.
D) A possible defence to the plaintiff's claim of negligence is that the plaintiff volunteered to take the risk.
E) The test used to determine whether a duty of care is owed is this: would a reasonable person foresee that the plaintiff could be affected by the acts of the defendant?

Question 6

You and your friend recently bought a duplex. You rent out the downstairs and live in the upstairs suite. As the owner and occupier, you have acquired certain rights and responsibilities. Which of the following statements about the law relating to land is true?

A) You could sue for the tort of negligence if someone used his property in such a way that it interfered with your use and enjoyment of your property.
B) The use of your property is partly governed by the Personal Property Securities Act.
C) If you bring something onto your property that is inherently dangerous and it escapes causing damage to others, you will be liable even if you were very careful and did not intend to harm anyone.
D) If there were an accident out front and a car was knocked onto your yard, you could sue the driver in that car for trespass.
E) Your tenants have no duty to take reasonable steps to make sure that any person is reasonably safe when in their suite.

Question 7

Creative Farming Ltd. manufactures fertilizer from organic matter, a by-product of which is explosive methane gas. During the processing, some of this gas escaped and drifted onto the adjacent property, where it caused an explosion and extensively damaged a building owned by XYZ Co. Creative Farming Ltd. would be liable for the loss under which one of the following principles?

A) Strict liability
B) Vicarious liability
C) Product liability
D) Occupiers' Liability Act
E) Contributory negligence

Question 8

Raheel wants to sue a manufacturer who he believes was careless during the manufacturing process. What do the courts do to make this easier on people like Raheel?

A) The courts are willing to imply a rebuttable presumption of breach of duty from the circumstantial evidence of the injury or loss.
B) The courts are willing to award legal costs to plaintiffs who bring forward these claims, regardless of their success at trial.
C) The courts are willing to waive the usual rules of evidence in the favour of the plaintiff.
D) The courts are willing to construe the evidence in favour of the plaintiff using the contra proferentum rule.
E) The courts are willing to disregard the requirement of a duty of care.

Question 9

A seven-year-old boy followed his dog into Mr. Howe's backyard. He fell into a large hole dug by Mr. Howe in preparation for a tree that had been ordered. The boy broke his arm in the fall. At the hospital, the boy was treated by a doctor who had been employed there for four years. The doctor did not set the boy's arm because he made a mistake in reading the x-ray. Because the arm was not treated correctly, it healed improperly. When the boy kept complaining, his mother took him to their family doctor, who discovered the error. The boy had to have his arm rebroken so that it could be set properly. Based on these facts, which of the following is true?

A) The owner of the land owed no duty of care to the boy because the boy was a trespasser.
B) The case law that developed over hundreds of years on the duty of care owed by occupiers of land has priority over any subsequent legislation on the point.
C) The doctor owed a duty of care to the boy, but he only had to meet the standard of care expected of the average man.
D) The hospital, not the doctor, would be solely liable for any harm suffered due to the negligence.
E) In an action against the land owner, if the boy were found to be partially at fault for his injury, the court would apportion the award of damages as it apportioned the fault.

Question 10

Which of the following is true with respect to the law of tort?

A) With assault and battery, a person can successfully sue only if they can prove damages.
B) A negligent person causing physical injury to another is responsible to the full extent of the injury suffered even though the injured person suffered more than would reasonably be expected because of a special weakness.
C) A person will always succeed with the defence of self-defence even if he used excessive force.
D) A customer battered by an employee on the job can sue only the employee, not the employer, because it was the employee who did the wrong.
E) For fair comment to be an effective legal defence to a claim of defamation, the person making the comment must have been made in Parliament or court.

Question 11

Which of the following situations could not result in a successful action for negligence?

A) When Todd was setting up a tent for a backyard wedding, he fell into a hole and broke his leg. The owner forgot to tell the wedding planner that he had been digging a hole to put in a fish pond.
B) An employee of the bank mistakenly wrote to Maria saying that the bank had approved her loan. Relying on that letter, Maria made contracts she could not honour when the bank refused to forward the money. Maria lost $10,000 because of the bank's carelessness.
C) A driver, trying to see what a movie crew was doing, accidentally plowed his car into the side of a catering truck.
D) Nikki almost upset a glass table and broke an expensive vase when she yanked on a large cable without checking what was blocking its path.
E) A real estate agent, fed up with his client, punches him in the nose when he changes his mind about selling his condo.

Question 12

Sam and John drank beer and watched the Olympics for hours. When John left, he did not feel impaired, but the alcohol in his system affected his driving. He lost control of his car, which crashed through Mr. Mitsu's fence and into Mr. Mitsu's garage. Mitsu's neighbour, Mr. Watson, called the police. John was charged with driving while impaired and was found guilty in the criminal proceedings. Given these facts, which of the following is true?

A) Mr. Watson, the neighbour, could sue John for negligence.
B) Mr. Mitsu could sue John for negligence.
C) If Mr. Mitsu sued John, he would be entitled only to punitive damages.
D) Because John was charged with an offence, Mr. Mitsu cannot sue him in a civil action for compensation. One court action is all that is allowed.
E) Since no one was physically injured, there could be no civil action.

Question 13

In which of the following would the plaintiff not succeed in an action for negligence?

A) A zoning officer carelessly told Mr. Lee that the lot was zoned "commercial," but it was really zoned "duplex." Lee lost $85,000 by relying on this information.
B) An accounting firm made a mistake in the audited financial statements, which caused an investor to lose $20,000. The firm knew the investor was going to rely on the statements to invest.
C) May was made sick by drinking a contaminated cola, bottled by Black, bought for her by her friend Fred from Green.
D) Dr. Zotsky used the skill of a reasonable doctor in his field, but his patient did not respond to the treatment and lost sight in one eye.
E) Nick was a willing passenger when Alex was driving at 140 km/h. He was hurt when the car slid on wet pavement and crashed. The court found Nick took the physical risk, but never took the legal risk.

Question 14

Which of the following statements best describes the standard used by the courts to measure socially acceptable behaviour?

A) An average person acting normally
B) A careful person acting to the best of his ability
C) A reasonably prudent person acting in a careful manner
D) The best possible response to the circumstance
E) When you cause injury, you are always liable.

Question 15

As a result of careless driving, Mr. Boz accidentally knocked Mr. Alder, a seventy-year-old man, off his bike. Mr. Alder broke his arm and collar bone. Because of a rare disease, there was little likelihood that the breaks would heal properly, if at all. In effect, unlike most who would suffer those breaks, he lost the use of his right arm. Mr. Alder sued Boz for negligence. The court held Boz liable. With regard to the question of the amount of damages to be paid by the defendant, which of the following is correct?

A) It should be an amount to cover the full extent of the injury suffered.
B) It should be an amount to cover the extent of injury that would have been suffered by a reasonable man.
C) It should be an amount to cover the extent of injury that would have been suffered by the average man.
D) In should be an amount to cover the extent of injury that would have been suffered by the average seventy-year-old man, because a reasonable man would not have foreseen the extent of injury actually suffered.
E) It should be no compensation at all because of Mr. Alder's rare condition.

Question 16

Al bought a case of beer because his friends were coming over to watch the Grey Cup game. During the game, Al opened a beer, poured about a third of it into Bob's glass, and handed the can to Chuck. Bob noticed the strange orange colour of the beer and called everyone's attention to it; unfortunately, Chuck had drunk most of the beer from the can before he heard Bob. There had been a small battery in the can that contaminated the beer. Chuck was seriously injured. On these facts, which of the following is true?

A) Since Chuck did not buy the beer, he has no cause of action against anyone.
B) Chuck could sue Al successfully for negligence because Al handed the contaminated beer to Chuck.
C) Bob could sue Al successfully for negligence because Al poured the contaminated beer in Bob's glass.
D) Because Chuck did not buy the beer, he could not sue the seller for breach of contract, but he could sue the beer manufacturer in tort.
E) Bob could successfully sue the manufacturer for negligence because he need only prove that the manufacturer owed him a duty of care and need not prove damages.

Question 17

Which of the following statements with regard to the tort of negligence is true?

A) If a person is injured by a defective product that he himself did not purchase, he cannot sue the manufacturer for negligence.
B) If the court finds contributory negligence, the defendant has no liability at all.
C) If physical injury can be foreseen as the result of a person's actions, the wrongdoer will be not be liable for all the injury suffered.
D) A possible defence to the plaintiff's claim of negligence is that the plaintiff volunteered to take the risk.
E) The test used to determine whether a duty of care is owed is this: would a below-average person foresee that the plaintiff could be affected by the acts of the defendant?

Question 18

Because of the North American Free Trade Agreement and increasing world competition, a provincial government decided to help businesses by providing more information about market conditions, currencies, etc., around the world. It opened small offices throughout the province that provided business information retrieved from the government's database, which was frequently updated. Mr. Hill relied on some information given to him by Alex Chec, an employee of the government. The information was wrong due to Chec's mistake; it was his job to cross-check that information before it was released to the public, but he forgot to do it. Mr. Hill suffered a $15,000 loss because of the error. Which of the following is true?

A) Mr. Hill cannot take any action because he suffered no physical injury. The case only deals with information.
B) If Mr. Hill sues the government on the principle of vicarious liability, he cannot also sue the employee at fault.
C) On these facts, Mr. Hill could sue successfully on the principle of strict liability.
D) Mr. Hill could not take any action because he had not entered into a contract with the government for this information.
E) To win in an action against the government, Hill must prove that the government owed him a duty of care, fell below the standard of care owed, and thereby caused him a foreseeable loss.

Question 19

Which of the following situations could result in a successful action for negligence?

A) George deliberately broke an expensive camera when he yanked on a large cable.
B) When Eric was setting up the lighting in a backyard rented for a night shoot, he fell into a hole and broke his leg. The owner had previously notified the director that he had been digging a hole to plant an apple tree.
C) An employee of the bank mistakenly wrote to Sean saying that the bank had approved his loan. Relying on that letter, Sean made contracts he could not honour when the bank refused to forward the money. Sean lost $100,000 because of the bank's carelessness.
D) A doctor, acting in the best interest of his patient Alex (who had lost blood after a serious cut), gave him a transfusion even though Alex told him explicitly not to do so.
E) Dr. Jones used the skill of a reasonable doctor in his field, but the patient did not respond to the treatment and lost sight in one eye. The patient sued the doctor.

Question 20

In Hall v. Hebert, an individual was severely injured when he allowed his intoxicated friend to drive his car. The Supreme Court of Canada had to deal with whether volenti non fit injuria would apply. What did the Court hold?

A) The plaintiff assumed neither the physical risk nor the legal risk in the circumstances.
B) The plaintiff assumed only the legal risk, but this is all that is required for volenti non fit injuria to apply.
C) The plaintiff assumed only the physical risk, but this is all that is required for volenti non fit injuria to apply.
D) The plaintiff assumed the physical risk, but there was no indication he had assumed the legal risk as well.
E) The plaintiff assumed the legal risk, but there was no indication he had assumed the physical risk as well.

Question 21

Stella bought a cup of coffee at the drive-through window at a coffee shop. Holding the cup between her knees and attempting to take off the lid to add cream, she spilled the coffee. She suffered burns to her thighs. If this happened in Canada, which of the following would be true?

A) If Stella sues the coffee shop for negligence, she will only have to prove that the company owed her a duty of care.
B) If Stella sues the coffee shop, the company's best argument is that it didn't owe her a duty of care.
C) To succeed with the defence that she volunteered to take the risk, the coffee shop would have to prove that she deliberately spilled the coffee.
D) If the coffee shop claims there was no way to reasonably foresee that Stella would be harmed, the plaintiff's case would be dismissed even though she suffered burns.
E) If the court finds the plaintiff contributorily negligent causing 60% of her loss, she will not be compensated for the 60% by the defendant.

Question 22

Celebrating the end of the fall term, Mr. C had already drunk six beers before he arrived with his friends at the Spoke Tavern, run by the student council. After he had two more beers, he was refused more and told he would be asked to leave if he did have more. He returned to the table and continued to drink. He was ordered to leave. While being escorted out, he resisted but was ejected. He snuck back in, "spoiling for a fight," and was removed once more. He returned, and when pushed through the doorway, he stumbled. His hand went through a small window, and he had to undergo surgery to repair a tendon in his wrist. Mr. C sued the tavern, the bouncer, and the student council (as operators of the tavern) under the Occupiers' Liability Act. Read each of the following separately and indicate which is False.

A) The Occupiers' Liability Act in this province provides that an occupier of land owes a duty to take reasonable steps to make sure that any person will be reasonably safe.
B) If the court holds that Mr. C voluntarily took the risk, Mr. C will get no award of damages from the defendants.
C) To successfully use the defence of volenti no fit injuria (he volunteered to take the risk), the court must find that the plaintiff knew the risk, volunteered to take the risk, and expressly or impliedly waived his right of action.
D) If the court holds that Mr. C was contributorily negligent, Mr. C could get no compensation from the defendants.
E) Under our Occupiers' Liability Act, a tenant could be liable, not just the land owner.

Question 23

When Joan visited her friend Clive, who was renting a small farm in Langley, she was injured by some dangerous cleaning solvent that Clive stores in very large quantities for Soapo Ltd. The solvent had leaked from one of several massive 1000-litre drums. When Joan had walked toward the side door of the farmhouse, she stepped through a puddle of what turned out to be solvent. The solvent not only ruined her shoes, but also burned her skin when some splashed onto her legs. The solvent also drained down into the fish pond on the adjacent property owned by the Nelsons. Read each of the following separately and indicate which is true.

A) If the Nelsons sue for any loss, they would not succeed against Clive because he is just the tenant of the farm, not the owner.
B) If the Nelsons sued on the rule in Rylands v. Fletcher, the defendant could succeed by showing that there was no intention to harm anyone and reasonable care had been taken to contain the solvent.
C) If Joan sued Clive, she would not sue on the rule of strict liability but under the Occupiers' Liability Act.
D) If the Nelsons sued on the rule in Rylands v. Fletcher, they would be barred from also pleading negligence as an alternative cause of action.
E) If Joan sues for any loss, she must sue the owner of the farm.

Question 24

In which of the following would the plaintiff not succeed in an action for negligence?

A) A real-estate agent accidentally forgot to lock the back door of the house he had just shown. Before the owner returned, someone broke in and stole the TV. The owner sued the agent.
B) A real-estate agent failed to check the zoning and assured the purchasers that they could build a duplex on the property. Relying on that statement, they purchased the property.
C) Shunan was made sick by drinking a contaminated cola bought for her by her friend Fred. She sued the manufacturer.
D) Dr. Alberts used the skill of a reasonable doctor in that field, but the patient did not respond to the treatment and lost hearing in one ear. She sued the doctor.
E) Pradeep was hurt when a driver of a Gino's pizza truck carelessly ran through a yellow traffic light on his way to deliver a pizza. Pradeep sued the driver and Gino, his employer, although Gino wasn't even in the truck.

Question 25

Ms. Lam bought a lot next to a house owned by Mr. Dodson. She asked Mr. Dodson for permission to use his electricity while building a house on her property. He refused. He feared his house was too old to handle the electricity load needed. Later, a carpenter employed by Ms. Lam accidentally broke a window of Mr. Dodson's while moving lumber. Furthermore, the carpenter removed part of Dodson's fence to make room for needed materials, used Dodson' house to support the lumber and drove some nails into Dodson's tree to hold some wires. Dodson complained to Ms. Lam. Irritated by his stand on the electricity and his complaints, Lam began a civil action against him for the tort of defamation, although she had absolutely no grounds for alleging defamation. Which of the following is not supported by the facts given above?

A) Dodson has an action against the carpenter for trespass.
B) Dodson has an action against Lam on the principle of vicarious liability.
C) Dodson has an action against Lam on the grounds of strict liability (the rule of Rylands v. Fletcher).
D) Dodson has an action against the carpenter for negligence.
E) Dodson could sue Lam for trespass even if there was no damage.

Question 26

A land appraiser prepared an appraisal of a property for a real-estate development company. The appraiser had been told that the appraisal would be used by the company to attract potential investors. Because the appraiser forgot to check the recent changes in the zoning by-laws, the appraisal was not accurate; the investor, a party unknown to the appraiser, was misled about the value of the land and, consequently, suffered a financial loss. On these facts, which of the following is true?

A) A land appraiser owes a duty of care to his client, the company, but not to any potential investors.
B) A land appraiser owes a duty of care to his client, and to potential investors only if he knows the name of the investor.
C) The investor might sue the appraiser for "negligent misstatement causing economic loss."
D) The investor must suffer his own loss, because an investor takes the risk and so must take care.
E) A person cannot be sued for words that cause loss, only for actions that cause physical injury.

Question 27

Sumanthra, an accountant, prepared financial statements for ZeeTech Ltd. A cutting edge technology company, ZeeTech was actively seeking private investment in order to finance a new electronics device. Despite the fact that Sumanthra followed 38) Sumanthra, an accountant, prepared financial statements for ZeeTech Ltd. A cutting edge technology company, ZeeTech was actively seeking private investment in order to finance a new electronics device. Despite the fact that Sumanthra followed Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS), the statements she prepared were misleading. Arif and Alena, both potential investors, relied on the statements Sumanthra had prepared. As a result of their reliance, Arif and Alena both invested in ZeeTech and lost a considerable sum of money. Independently, Arif and Alena decided to sue Sumanthra for their financial loss. Which of the following is true? and International Financial Reporting Standards (IFRAccepted Accounting Principles (GAA

A) Sumanthra will not escape liability because accountants are automatically liable for losses arising from the use of financial statements they prepare.
B) Sumanthra will not escape liability simply because she followed GAAP and IFRS.
C) Sumanthra has nothing to worry about, because an accountant who follows GAAP and IFRS could not have breached the standard of care.
D) Sumanthra has nothing to worry about, because accountants are immune from liability.
E) Sumanthra has nothing to worry about, because negligence requires proof of more than mere financial loss.

Question 28

Pete and John had been hired by the same computer consulting company. They worked a 3-hour shift and walked to a pub, where they had several beers. John said he'd drive Pete home. Pete knew John had been drinking but agreed to go with him anyway. The alcohol affected John's driving. He lost control of the car, which crashed through Mr. Britt's fence and Britt's garage. Pete was injured. John was not injured. Britt's neighbour, Mr. Watson, called the police. John was charged with the offence of driving while impaired and was found guilty in the criminal proceedings. Given these facts, which of the following is true?

A) Since Mr. Britt was not physically injured, he could not sue.
B) Mr. Watson, the neighbour, could successfully sue John for negligence.
C) Pete could sue John for negligence, but if the court held that Pete volunteered to take the physical and legal risk (volenti non fit injuria), Pete would get no award of damages.
D) The principle of vicarious liability is relevant here because John was an employee at the time of the accident. John was charged with an offence; no one could sue him in a civil action for compensation.
E) One court action is all that is allowed.

Question 29

To have the schools valued for insurance purposes, a school district hired a firm of surveyors to give them a statement of value. To prepare the report, the surveyors took the relevant measurements, which were then given to a statistical tabulating company that does the calculations based on the measurements. Surveyors always use the services of such tabulating companies. An error was made in the calculations, so the surveyor's report was wrong. Therefore, the buildings were under-insured. When one of the school buildings was destroyed by fire, the school district did not get sufficient funds from the insurance company to rebuild the school. On these facts, which of the following is true? (Assume that the school district has the ability to sue and be sued in court.)

A) This action would most likely be commenced in the Small Claims Court.
B) The insurance company can successfully sue the statistical tabulating company for nuisance.
C) The school district can successfully sue the statistical tabulating company for negligent misstatement causing economic loss.
D) The school district could successfully sue the surveyors for nuisance, for subcontracting the calculating work.
E) The statistical tabulating company cannot be sued by the school district.

Question 30

Which of the following statements describes the standard expected of experts?

A) Require skills and abilities expected of an average person.
B) Must exercise skill with degree of care expected from a reasonable person in that profession.
C) Inexperience excuses incompetence.
D) Common practice always sets the appropriate standard.
E) The standard of an expert need be perfection.

Question 31

With regard to the law of negligence, which of the following is False?

A) If the court finds that the plaintiff was 40% and the defendant 60% responsible for the loss suffered by the plaintiff, the plaintiff cannot recover the 40% from the defendant.
B) Some occupiers' liability acts set the standard of care owed by the occupier, namely, to take reasonable care that any person is reasonably safe.
C) To win his action in negligence, a plaintiff must prove, among other things, that the defendant owed the plaintiff a duty of care.
D) If you hurt someone and are sued for negligence, a possible defence is that you didn't intend to hurt the person.
E) If you are negligent and cause damage to another, a possible defence is that the other voluntarily took the risk.

Question 32

Hank rented a new ground-floor condominium for four months before the owner offered to sell it to him. Hank accepted the offer. After Hank became the owner, he built a small patio off the living room. At a house-warming party, one of his friends caught the heel of her shoe between some patio bricks and fell, breaking her arm. It took an abnormally long time to heal because she suffered from an unusual bone disease. Hank has heard the following assertions about liability and asks you about them. Which of the following statements is true?

A) The standard of care owed to this visitor is governed by a federal statute and is therefore the same for all provinces.
B) Under the governing statute, he owed a duty of care because he now owned the property; he would not have had any duty of care if he had still been renting it.
C) He owed no duty of care to persons who came to his place; people must take responsibility to look after themselves.
D) The standard of care set by statute is that the occupier has a duty to take reasonable care to see that any guest on the property is reasonably safe.
E) If found liable, he would be responsible only for the damages incurred by a normal person who had suffered from such a fall and not for the greater damages actually suffered by this guest.

Question 33

Paul invited several friends over to celebrate Ann's birthday. About an hour before the guests arrived, Paul bought some sparkling wine and put it in his refrigerator. When all the guests were assembled, Paul lifted the chilled bottle of wine from its gift box. Before it was completely out of the box, the bottle exploded, sending glass in all directions. The glass cut Paul's hand and also the eye of one of his guests, Joan. No one else was hurt at all. Assuming all these facts could be proved, which of the following is true?

A) Because Joan did not buy the wine, she has no cause of action against anyone.
B) Joan could sue Paul successfully for the tort of negligence for buying and serving sparkling wine.
C) All the guests, including Joan, could successfully sue the manufacturer for negligence; they need only prove that the explosion was the fault of the manufacturing process.
D) If Joan sued the manufacturer for negligence, the court could draw, from the circumstantial evidence of the injury, a conclusion that someone must have been negligent, leaving it to the manufacturer to produce evidence to the contrary.
E) Only Joan has a right to sue in contract.

Question 34

Although there was no carelessness on the part of Mr. Tam, and although he had no intention of harming anyone, he could still be sued by someone harmed by dangerous substances that escaped from his property. This is an example of what tort or what principle of tort law?

A) Vicarious liability
B) Contributory negligence
C) False imprisonment
D) Strict liability
E) Defamation

Question 35

Ms. J was severely injured as the result of a fall sustained when a portion of a fence surrounding a private cemetery gave way as she was attempting to climb over to visit a grave site. Which of the following is true with regard to an occupier's liability?

A) The standard of care is set by a federal statute and is therefore the same for all the provinces.
B) The standard of care required of the occupier is set by provincial statute.
C) An occupier owes no duty of care to a trespasser.
D) There is no duty of care owed to persons who come onto another's property whether invited or not; people must take responsibility to look after themselves.
E) The duty imposed by the statute is on the landowner not the tenant.

Question 36

Which of the following statements with regard to the tort of negligence is False?

A) If a person is injured by a defective product that he himself did not purchase, he can sue the manufacturer for negligence.
B) To win his negligence case, the plaintiff must prove that the defendant owed him a duty of care, was below the standard of care the law requires, and thus caused him foreseeable damage.
C) In most provinces, the standard of care imposed on an occupier has been modified by statute.
D) For a person to completely escape liability for negligence on the grounds that the plaintiff volunteered to take the risk, the court would have to find that the plaintiff volunteered to accept the physical risk and the legal consequences as well.
E) In negligence cases, the special provision of res ipsa loquitor must always be applied in order to establish liability.

Question 37

An investor who wanted to build a duplex asked the city zoning officer whether Lot A of Plan 16, known as 1 Street, was zoned for a single-family house or a duplex. The zoning officer was distracted by a news report on the radio and accidentally gave the investor a printed copy of the zoning for the wrong lot that said "duplex," although 1 Street was only zoned for single-family houses. After the investor began building a duplex, the city stopped him for building contrary to the zoning by-laws. He lost $50,000. On these facts (assume all can be proven), which of the following is true?

A) A person can only be sued for actions that cause physical injury.
B) The cause of action most likely to be taken by the investor in this case is "deceit."
C) The zoning officer can be sued even though the investor did not have a contract with him (i.e., he didn't pay for the information).
D) The employer of the zoning officer could not be sued since the employer did no wrong.
E) The zoning officer could not be sued successfully since he had no intention of hurting anyone; his error was just an accident.

Question 38

In Hodgkinson v. Simms, an accountant advised a client to invest in a real estate development while also acting for the developers. What did the Supreme Court of Canada find?

A) The presence of a financial risk was the identifying feature of a fiduciary relationship and, in this case, imposed the fiduciary duty.
B) The presence of a financial risk was the identifying feature of a fiduciary relationship but, in this case, did not impose a fiduciary duty.
C) The presence of loyalty, trust, and confidence were identifying features of a fiduciary relationship and, in this case, imposed the fiduciary duty.
D) A fiduciary relationship could not arise in circumstances where an investor acted of his own accord.
E) A fiduciary relationship could not arise in commercial circumstances, such as those found in this case.

Question 39

Last month, Rueben removed a tall tree in his backyard. He left the large hole because he intended to plant a new tree when the rains began. Sunday, he invited his neighbour, Joe, to come over to watch the Olympics. When Joe came, he cut through the backyard and fell into the hole and broke his arm. Which of the following is true with regard to the liability of an occupier of land?

A) The standard of care is set by a federal statute and is therefore the same for all the provinces.
B) An occupier owes a duty only to "licencees."
C) There is no duty of care owed to persons who come onto another's property whether invited or not; persons must take responsibility to look after themselves.
D) The standard of care imposed on the occupier is set by provincial statute.
E) A tenant cannot be liable; only the owner can be sued.

Question 40

For his Superbowl Sunday party, Jack bought, among other things, some Francisco mustard. Even before the game began, one of the guests, Fred, made himself a sandwich using that mustard. When Fred saw another guest, Tad, making a sandwich with the mustard, Fred warned him that the sandwich did not taste right and that he (Fred) didn't feel too well. Tad ate everything else on his plate, but left the sandwich. Fred became quite ill and had to go to the hospital. It was determined that the mustard was contaminated when it was made. Jack had bought the mustard just an hour before game time from Big Store, which had bought it from DB Distributors Ltd., which had bought it from the manufacturer New Foods Ltd. On these facts, which of the following is true?

A) Since Fred did not buy the mustard himself, he must suffer his loss; i.e., he cannot sue anyone.
B) Fred could successfully sue Jack for negligence because Jack bought the mustard.
C) Tad could successfully sue Jack for negligence.
D) Fred could successfully sue the distributor for negligence because the distributor delivered the case of mustard to Big Store.
E) Fred could successfully sue the manufacturer New Foods Ltd. for negligence but could not successfully sue Big Store for negligence.

Question 41

Which one of the following explains the effect of a co-insurance clause?

A) A co-insurance clause provides for more than one person paying the premium.
B) A co-insurance clause provides for the insurance claim to be split between two or more beneficiaries.
C) A co-insurance clause provides for the insured to assume part of the responsibility for any loss.
D) A co-insurance clause provides for several different properties being insured under the same policy.
E) A co-insurance clause provides for the insurance company arranging their own insurance on a large policy.

Question 42

Business interruption insurance is designed to cover which of the following situations?

A) A person owns a restaurant business and the restaurant is destroyed by fire. The insurance coverage pays for the repair of the building.
B) A person has a partner in his restaurant business and that partner catches a disease and dies. The insurance provides for coverage of the death of the partner.
C) A person owns a restaurant business and the restaurant is destroyed by fire. The insurance covers revenue losses caused by the business being closed down for several months.
D) A person is an employee at a restaurant business and gets ill. The insurance coverage pays him his wages while he is off work sick.
E) A person operates a restaurant business and some customers suffer injury due to food poisoning. The insurance coverage provides for payment to cover any losses incurred because of claims by the restaurant arising from damages paid out to these customers.

Question 43

In which of the following situations will the insured be able to collect the entire amount of the insurance claimed?

A) Jane had a compact disc player worth $300. It was portable and it was stolen from her car. She had a house policy and a car policy, both of which provided coverage. Jane claimed $300 from each policy.
B) Joe has his house insured for $100,000 when the actual value of the house is $200,000. When it burns down, Joe claims $200,000.
C) Joe owns a house on a lot in Regina, and although the property would sell for $100,000, the value of the house is only $50,000. Joe takes out a $50,000 policy against loss to the house, which is subsequently destroyed by fire. Joe claims $50,000.
D) Joe and his wife both own a one-half interest in their house, worth $100,000. Joe took out an insurance policy in his own name for the $100,000 and the house is destroyed by fire. Joe claims the $100,000.
E) Joe takes out insurance on his neighbour's house for $50,000 because his neighbour is notoriously careless. Sure enough, the house burns down with $50,000 loss.

Question 44

In which one of the following would Joe be able to collect the entire amount of insurance claimed?

A) Joe insured his law partner's life for $500,000 and the amount he actually lost when the partner died was only $100,000. Joe claims $500,000.
B) Joe's house suffers $20,000 damage, and he only had it insured for $100,000, when the actual value was over $250,000. Joe claims $20,000.
C) Joe owns a one-half interest in a house valued at $100,000 that is completely destroyed in a fire. The house is insured for that amount and Joe makes a claim for $100,000.
D) Joe insured the club house of a Hell's Angels motorcycle club located in the next block for $75,000; the house is valued at about that amount. The club house is subsequently destroyed in a fire. Joe claims $75,000.
E) Joe took out a life insurance policy on his wife for $500,000, and shortly thereafter, during a fight when he was in a drunken rage, he struck his wife, causing her death. Joe claims $500,000.

Question 45

In which one of the following would Joe be able to collect the entire amount of insurance claimed?

A) Joe insured his law partner's life for $500,000 and the amount he actually lost when the partner died was only $100,000. Joe claims $500,000.
B) Joe's house suffers $20,000 damage, and he only had it insured for $100,000, when the actual value was over $250,000. Joe claims $20,000.
C) Joe owns a one-half interest in a house valued at $100,000 that is completely destroyed in a fire. The house is insured for that amount and Joe makes a claim for $100,000.
D) Joe insured the club house of a Hell's Angels motorcycle club located in the next block for $75,000; the house is valued at about that amount. The club house is subsequently destroyed in a fire. Joe claims $75,000.
E) Joe took out a life insurance policy on his wife for $500,000, and shortly thereafter, during a fight when he was in a drunken rage, he struck his wife, causing her death. Joe claims $500,000.

Question 46

Where a person owns a half interest in a house valued at $200,000 and has insurance on that property in the amount of $400,000, if the house burns down, causing a loss of $100,000, how much will that person collect?

A) $50,000
B) $100,000
C) $200,000
D) $400,000
E) Nothing

Question 47

A recent innovation in the insurance industry is ________ where several types of liability are bundled together, allowing the insured higher limits of coverage for a more economical premium.

A) liability insurance
B) business interruption insurance
C) term insurance
D) umbrella liability
E) bundled liability insurance

Question 48

Jack works as a financial-planning consultant for Adco Ltd., a company that provides financial advice to its clients. At a three-martini lunch with Benson, one of Adco's clients, and Carson, a friend of Benson's, Jack mistakenly advised Benson to buy shares of Moose Jaw Mining because he thought that Adco had investigated the prospects of the company. In fact, Adco had investigated Goose Jaw Mining and was recommending it to its clients. As it turned out, Benson ignored Jack's advice but Carson bought a lot of Moose Jaw shares and lost all of his money when the mining operation went broke. Which one of the following statements accurately describes Carson's legal situation?

A) Because there was no contractual connection between Carson and anyone else, he has no legal right to compensation.
B) Carson will have to sue Benson and then Benson can turn around and sue Jack under the principles of vicarious liability.
C) Jack cannot be held responsible for Carson's loss because someone who is incapacitated at all by alcohol cannot be held liable in tort for actions while incapacitated.
D) Jack cannot be held liable for Carson's loss, but Adco can be because it employed Jack.
E) Jack can only be held liable if Carson can establish that Jack owed him a duty to be careful.

Question 49

To win his action in negligence against a professional person, the plaintiff must prove, among other things, that the defendant's conduct was below an acceptable standard of care. Which of the following is the legal standard of care demanded of a professional person?

A) That he act to the very best of his ability
B) That he act as may reasonably be expected of the normally skilled professional of that type
C) That he act as a reasonably prudent person
D) That he act sincerely and with goodwill
E) That he act sincerely and as may reasonably be expected of a skilled professional

Question 50

Joe entered a store and approached a display of china. He was examining an extremely valuable vase and carelessly dropped it, destroying it. Which of the following is correct with respect to his liability?

A) If the store has insurance coverage, the insurance will cover his careless conduct and he doesn't have to worry about anything.
B) If the store has insurance coverage, the insurance will pay the store for the loss but may pursue Joe for repayment by suing him for negligence.
C) Joe cannot be sued for the loss because Joe is not a party to the insurance contract.
D) If the store does not have insurance coverage, they should have and so Joe has no responsibility in these circumstances.
E) Joe is responsible only if the store has no insurance coverage.

Question 51

Property insurance should correspond to the actual value of the property for all of the following reasons except

A) if the property is insured for more, the insured will pay too high a premium.
B) no insurance means no compensation for loss.
C) if the property is insured for less, the insured will only receive partial compensation.
D) if the property is insured for less, there is a danger of being a co-insurer.
E) if the property is insured for more, there will be no compensation for loss.

Question 52

In Heitsman v. Canadian Premier Life Insurance Co., an insurance company denied coverage on the basis of an ambiguous exclusion of liability clause. What did the Court find?

A) The contra proferentum rule was applied, and the exclusion was narrowly interpreted.
B) The contra proferentum rule was applied, and the exclusion was broadly construed.
C) The contra proferentum rule was applied, so the interpretation favoured the insurance company.
D) The contra proferentum rule did not apply, because the insurance contract was in standard form.
E) The contra proferentum rule did not apply, because the insured had signed the contract voluntarily.

Question 53

In Mueller v. Wawanesa Insurance Co., insurance had been taken out on a house when it was being used as a residential dwelling. The building was occupied by three members of a motorcycle gang. The insurance company was not notified of the change. What was the result when the house was destroyed by fire?

A) The failure to notify of the change voided the policy and the insurance company did not have to pay.
B) The failure to notify of the change voided the policy, but the insurance company still had to cover the loss.
C) The failure to notify of the change was immaterial, because there was no proof that is what caused the fire.
D) The failure to notify of the change was immaterial, because there was no misrepresentation at the time the policy was taken out.
E) The failure to notify of the change resulted in the insured being charged higher premiums.

Question 54

Often, a business suffering a loss from a fire will have insurance to cover the property damage, but there will be nothing to cover the revenue losses the business suffers during the period it is closed down for repairs. What form of insurance will cover the latter issue?

A) liability insurance
B) disability insurance
C) business interruption insurance
D) property insurance
E) professional liability insurance

Question 55

________ is the type of insurance most closely associated with torts.

A) Liability insurance
B) Business interruption insurance
C) Disability insurance
D) Property insurance
E) Umbrella insurance

Question 56

Which of the following is not an appropriate matter for insurance coverage?

A) Insurance against lost profits
B) Insurance against fire in a home
C) Insurance against the wrongful conduct of the insured, e.g., theft
D) Insurance against loss of life
E) Insurance against damage to property

Question 57

________ provides only a benefit upon death, and the premiums are lower than whole life insurance, which provides coverage in the event of death as well as investment potential and retirement income.

A) Liability insurance
B) Health insurance
C) Term insurance
D) Death insurance
E) Property insurance

Question 58

Which of the following statements does not describe the standard expected of experts?

A) Require skills and abilities expected of a professional in that field.
B) Must exercise skill with degree of care expected from a reasonable person in that profession.
C) Inexperience does not excuse incompetence.
D) Common practice always sets the appropriate standard.
E) The standard of an expert need not be perfection.

Question 59

In most Canadian jurisdictions, ________ can be obtained on an individual basis with an insurance corporation, but it is more often acquired by businesses as part of an employee benefits package.

A) property insurance
B) business interruption insurance
C) liability insurance
D) disability insurance
E) professional liability insurance

Question 60

An employee prepared an appraisal of a property for his real-estate development company. The employee had been told that the appraisal would be used by the company to attract a potential investor, Mr. Jones, for the company's client, Mr. Lee. Because the appraiser carelessly forgot to check the recent changes in the zoning by-laws, the appraisal was not accurate. Mr. Jones was misled about the value of the land and suffered a financial loss of $200,000. On these facts, which of the following is true?

A) Mr. Jones could not take any action because he had no contract with the company or the appraiser.
B) A person cannot be sued for words that cause loss, only for actions that cause physical injury.
C) If Jones sues the appraiser, he cannot also sue the employer company.
D) The cause of action most likely to be taken by the investor is defamation.
E) To win in an action against the appraiser, Jones must prove that the appraiser owed him a duty of care, fell below the standard of care owed, and thereby caused him a foreseeable loss because of his reliance on the information.

Question 61

A reasonable person is one who is prudent and careful.

Question 62

Absent a statutory provision to the contrary, parents are not responsible for their children's torts unless there was obvious failure to control, instruct, or supervise.

Question 63

Which of the following statements is correct with respect to bonding?

A) Bonding is another term for insurance. The two terms, bonding and insurance, are interchangeable.
B) If a person is bonded and that person commits some wrongful act such as stealing a client's money, the bonding company is bound to compensate him for any losses he suffers from being caught.
C) Bonding provides protection to the victim injured by the wrongful conduct of the person bonded.
D) Bonding provides protection against losses incurred because of fluctuations in the financial markets.
E) Bonding is a government certification system whereby the government guarantees that a person so bonded or certified will do the job he is hired to do as set out in the bonding certificate.

Question 64

The occurrences of professional malpractice actions have decreased dramatically in recent years, due largely to the increased availability of liability insurance.

Question 65

Children are not held liable for their torts.

Question 66

The court determines the standard of care required and whether or not there was a failure to live up to that standard.

Question 67

A person has to prove only that another caused his injury to succeed in a negligence action.

Question 68

The institution of no-fault insurance programs in some jurisdictions allows people to be compensated for their injuries only if they are not at fault.

Question 69

Strict liability means that liability can be established even when there is no fault.

Question 70

If a person attempts to help, there is a duty to exercise reasonable care.

Question 71

Which of the following is correct with respect to the principle of subrogation as it relates to insurance law?

A) Subrogation refers to the insured's right to demand payment from the insurance company if the insured-against event takes place.
B) Subrogation refers to the principle that the insured cannot benefit from his own wrongdoing.
C) Subrogation refers to the principle that, if the insured does not take out enough insurance, he will be taken to be responsible for a portion of any loss incurred.
D) Subrogation refers to the principle that, if an insurance company pays out on a policy, they assume all of the rights of the insured against the person causing the loss.
E) Subrogation refers to the practice of the insurance companies taking out their own insurance where the policy involves potentially large losses or high risk.

Question 72

We owe a duty to anyone we can reasonably anticipate might be harmed by our conduct.

Question 73

At common law, a mother owes a duty of care to an unborn child.

Question 74

Which of the following is correct with respect to the meaning of an insurable interest?

A) An insurable interest means that the person causing the loss is required to show enough interest in what he is doing to be careful.
B) The insurance company must have received a premium before it can be said to have an interest in the agreement and be bound to pay when a claim is made.
C) The beneficiary or person receiving payment must have an ownership interest in the thing being insured.
D) The person taking out the insurance contract must be in a position that he will suffer a loss if the insured-against event occurs.
E) This term describes when a person has taken out insurance on something.

Question 75

Innkeepers at common law were required to protect their guests from the wrongful acts of others, even when the innkeeper or servant was not at fault.

Question 76

A principle established in Donoghue v. Stevenson is the test used to determine the standard of care that must be exercised by the defendant to escape liability.

Question 77

No-fault personal liability automobile insurance is an attempt to distribute losses among the most accident-prone drivers.

Question 78

Some jurisdictions have instituted "no fault" insurance programs. Which of the following statements is true?

A) Under common law, if a person is not at fault, damages can always be recovered in tort.
B) No fault insurance means no compensation for loss.
C) No fault insurance assumes there is a voluntary assumption of risk.
D) There is always an assumption of contributory negligence under no fault insurance programs.
E) Under no fault programs, people are treated the same and compensated for their injuries whether they are at fault or not.

Question 79

The standard of care that is required of a professional in a negligence action is that she acts to the best of her ability.

Question 80

If a person is injured while attempting to rescue someone, he or she may have a claim against the person who caused the situation that endangered the victim and the rescuer.