Deck 6: An Introduction to the Legal Relationship

Question 1

A successful negligence suit against a member of a profession must measure the ________________ of the particular practitioner with that prescribed by the profession in general, and must show in the evidence that the practitioner failed to meet that standard.

A) performance of duty
B) professional standards
C) fiduciary duty
D) duty of care
E) None of the responses are true.

Answer 1

performance of duty

Question 2

A husband and wife, Michelle and William, contacted an insurance agent for coverage for the wife's business, financed by the husband. The agent negligently arranged for insurance in William's name only. When Michelle suffered a loss she thought would be covered by the policy, she discovered that her business was not covered by the insurance. In the court action that followed:

A) The agent failed in his duty to make proper arrangements for coverage of Michelle's interest but properly performed his duty towards Michelle's business.
B) The agent would be held liable for the loss Michelle suffered.
C) The agent would not be held liable for the loss Michelle suffered.
D) The agent failed in his duty to make proper arrangements for coverage of Michelle's interest.
E) The agent would be held liable for the loss Michelle suffered as the agent failed in his duty to make proper arrangements for coverage of Michelle's interest.

Answer 2

The agent would be held liable for the loss Michelle suffered as the agent failed in his duty to make proper arrangements for coverage of Michelle's interest.

Question 3

In solicitor-client privilege, the lawyer normally has no legal obligation to reveal any confidential information to legal authorities or to anyone, unless:

A) the lawyer has severed the professional relationship.
B) the situation involves a minor.
C) a felony has been committed.
D) the client provides authorization.
E) There are no exceptions.

Answer 3

the client provides authorization.

Question 4

Rose, a financial advisor, recommended that a client, Maureen, purchase shares in Mad Money Mutual Fund. Relying on Rose's recommendation the client purchased 100 units. The entire stock market collapsed and the value of Mad Money Mutual Fund was reduced significantly. Maureen was surprised to learn that Rose earned a commission on each unit sold to her clients. Is Rose liable to Maureen?

A) No, mutual fund dealers are not liable to their clients for losses incurred.
B) No, Rose met the standards of care for a financial adviser.
C) No, Rose's advice did not cause the loss.
D) Yes, Rose breached her fiduciary duty by not disclosing that she received a commission on sale.
E) Yes, Rose failed to meet the stand of care for a financial adviser by recommending a mutual fund that failed.

Question 5

If an engineer designs a bridge without consideration for the weight of traffic that would travel over the bridge, and the bridge collapses, the engineer may be

A) negligent in the performance of his or her professional duty but not liable for the loss or injury that results.
B) negligent in the performance of his or her professional duty and liable for the loss or injury that results.
C) not negligent in the performance of his or her professional duty but liable for the loss or injury that results.
D) None of the responses are true.

Question 6

A duty to place a client's interest above the professional's own interests is known as:

A) a professional relationship.
B) duty of care.
C) solicitor-client privilege.
D) fiduciary duty.
E) a legal responsibility.

Question 7

It is suggested, but not legally required, that a lawyer recognize the limitations on his or her ability to handle a legal matter, and to take such steps as may be required to ensure that the client has appropriate advice, such as directing the client, if necessary, to another lawyer with greater expertise in the particular legal manner.

Question 8

A professional is a person who possesses special knowledge or exercises special skills not normally possessed by most individuals.

Question 9

The normal approach for the engagement of the services of an architect is through a contract. Under the terms of the contract, the architect is usually expected to:

A) Perform their duties in accordance with the professional code of conduct.
B) Complete the work in accordance with professional standards.
C) To have a duty of care to the client.
D) Perform the work in accordance with the terms of the contract.
E) All of the above.

Question 10

Leonard was an entrepreneur who owned a restaurant business called, Blue Moon Diner Ltd. The business was located in an old house owned by Leonard. Lauren, the accountant, was preparing financial statements for the purpose of selling Blue Moon Diner Ltd. She assumed that the house was an asset of Blue Moon Diner Ltd. and did not review the land title or check with Leonard. Alicia purchased the business for $500 000, believing that the house was an asset worth $450 000 and the business was worth $50 000. Can she sue Lauren?

A) Yes, Lauren had a duty of care to Alicia.
B) No, Lauren did not have a duty of care to Alicia.
C) Yes, Lauren breached the standard of care for an accountant.
D) Yes, Lauren had a duty of care to Alicia and breached the standard of care for an accountant.
E) No, Lauren did not have a duty of care to Alicia and breached the standard of care for an accountant.

Question 11

One of the obligations upon professionals acting in fields that can create tort liability is the obligation to __________ and _____________ from the party who will be affected by the professional service.

A) explain procedures and obtain consent
B) charge fees under the guidelines and explain procedures
C) avoid harm and obtain consent
D) obtain consent to action and assess damages
E) explain procedures and obtain consent to action

Question 12

For many professions, the standard of care extends beyond the single performance of the service, and the professional may also be required to

A) consider additional fees.
B) consider subsequent services.
C) consider third parties.
D) consider duty of care.
E) consider additional consent.

Question 13

Lisa, a three-year-old girl, was having her tonsils removed. Towards the end of the surgery, Dr. Talker answered her cell phone and failed to thoroughly check for sponges in Lisa's throat. Lisa choked to death. Can Lisa's family successfully sue Dr. Talker?

A) Yes, Dr. Talker failed to meet the standard of care for a surgeon.
B) Yes, Dr. Talker had a duty of care to Lisa.
C) Yes, Dr. Talker's negligence caused the injury.
D) Yes, damages resulted.
E) All of the responses are correct.

Question 14

The professional under a contract implies promises to perform the services required in accordance with the standard for his or her profession, and a failure to do so would constitute ______________________.

A) a lack of fiduciary duty
B) a breach of contract
C) professional negligence
D) a lack of informed consent
E) a breach of solicitor-client privilege

Question 15

Breach of contract cases usually are a result of careless or negligent performance of the professional service.

Question 16

"Competent lawyer" means a lawyer who has and applies relevant skills, attributes, and values in a manner appropriate to each matter undertaken on behalf of a client.

Question 17

The case of Hercules Management Ltd. v. Ernst and Young (1997) makes the following contribution to the law regarding professional liability of accountants at Common Law:

A) Accountants do not have a duty of care to the corporation.
B) Accountants do not have a duty of care to the directors.
C) Accountants do not have a duty of care to the shareholders.
D) Accountants do not have a duty of care to the creditors
E) Accountants have a duty of care to the corporation, directors, shareholders and creditors.

Question 18

Most professionals are members of professional associations that are responsible for the establishment of

A) training and education.
B) standards of performance of the members.
C) enforcement of the standards by an accredited or licensing process.
D) training and education and standards of performance of the members.
E) training and education, standards of performance of the members and enforcement of the standards by an accredited or licensing process.

Question 19

Manno had injured his knee and required laparoscopic knee surgery. During his appointment with the surgeon, Dr. Cutter, Manno was advised of the risks associated with the surgery including death and limited mobility in his knee. Dr. Cutter did not discuss scarring if traditional surgery was required. Manno signed the consent form. In the operating room, Dr. Cutter concluded that laparoscopic surgery would not repair Manno's knee and he had to make three large incisions in a traditional method. Manno's knee was repaired but he had three large, unattractive scars. Manno was a male model. Can Manno successfully sue Dr. Cutter?

A) No, Dr. Cutter did not have a duty to Manno with regards to his career.
B) No, Dr. Cutter met the standard of care for a surgeon.
C) No, the purpose of the surgery was to repair the knee and it did so successfully.
D) No, damages did not result.
E) Yes, Dr. Cutter failed to obtain informed consent.

Question 20

Professional associations are not given the authority to limit the use of the professional designation to individuals who are members in good standing in the association, or to take action under the legislation to prevent anyone not a member in good standing from holding him or herself out to the pubic as a particular professional, or offering the professional services to the public.

Question 21

Outline the steps that an emerging profession must take in order to establish a recognized professional status.

Question 22

Outline the responsibility of a surgeon to a patient. Is it limited only to the actual performance of the medical procedure?

Question 23

The duty of a lawyer to keep confidential information provided by a client is called client-professional privilege.

Question 24

An engineer designed an outdoor elevated patio that was expected to accommodate luncheons of up to 100 persons. The engineer considered the load-bearing structure on the basis of the weight of 200 persons as a safety factor.
When the structure was completed, the owner decided to use the patio for a local charity concert, and sold 400 tickets. In actual fact over 400 patrons attended, and packed the patio for a "standing room only" concert. The enthusiastic crowd at one point began jumping to the music, and the additional load pressure caused the structure to collapse, injuring many of the patrons.
How would liability be determined in this case?

Question 25

A surgeon who negligently performs an operation on a patient may be liable in tort to the patient, and only the patient.

Question 26

Professional negligence extends beyond carelessness in carrying out duties, but does not extend to statements made and information provided to clients.

Question 27

The failure of architects to maintain their level of skill may result in a breach of their duty of care, and if loss results to the client, it may result in tort liability for negligence.

Question 28

The liability of an engineer is limited to the client that engages the services of the engineer, and not to the subsequent purchasers of the construction project.

Question 29

A fiduciary duty of care may also arise in a situation where a professional agrees to perform a service without a fee.

Question 30

Normally, a professional is only responsible in tort to the patient or client. However, in recent cases, the courts have held some professionals liable to third parties when the professional's expertise or skill was intended to be relied upon by the third party and the professional was aware of this fact.

Question 31

What is the "threefold test" and how is it applied in cases of negligent misrepresentation? In what way has the Supreme Court of Canada changed the application of this test?

Question 32

Terry carried on a relatively successful business as a manufacturer of a cleaning product. After a few years of slow but steady growth, his accountant suggested that he expand the business by incorporating. This would allow the sale of shares to acquire the capital needed for expansion into a new plant with new equipment. The company was eventually incorporated but instead of selling shares, Terry decided to arrange a $200 000 loan from the bank and therefore, asked his accountant to prepare financial statements for the bank.
During preparation, the accountant failed to notice that the existing land and plant building were not acquired by the corporation, but retained by Terry and leased to the company on an annual basis. The accountant had included the land and building (value: $250 000) as an asset of the corporation on the financial statements without verifying this information with Terry to determine if the property had been transferred. When the error was later discovered during negotiations with the bank, the bank insisted that Terry guarantee the loan as a principal debtor, and use the land/building as additional security for the loan.
A few weeks later, Terry decided that it would be necessary to acquire additional capital to complete the company expansion. He contacted a private investor, Kelly, intending to sell her a block of shares in the corporation. Kelly inquired as to the financial status of the corporation and Terry informed her that the corporation had borrowed $200 000 from the bank for the purpose of expanding the business. He also suggested that Kelly contact either his accountant or the bank for information on the corporation's assets and financial position. Kelly contacted the bank, requesting copies of the financial statements the accountant had prepared. A bank employee, who was unaware that the statements were erroneous, gave them to Kelly without comment.
Based on the strength of the financial statements, Kelly invested $50 000 in shares of the corporation. Some months later, she discovered that the corporation did not own the land or buildings, and that the financial statements were in error.
Advise Kelly of her legal position, and her rights (if any) against Terry, the accountant, and the bank.

Question 33

The full and understandable explanation of the risks associated with a course of action, and the clear understanding by the client or patient is known as the duty of care.

Question 34

The Civil Code of Quebec establishes a fixed time limit of ten years from the date of completion of the project for any claim of negligence against an engineer or architect in Quebec.

Question 35

Insurance agents, even though they are agents of companies, may be held liable for clients' losses if, when requested to do so, they fail to provide proper coverage for the contemplated loss.

Question 36

How would the duty of care be determined for persons who are not members of a professional association, but who hold themselves out as persons in possession of special expertise? Use an insurance agent as an example.