Chapter 1 - Commercial Liability A Legal Perspective

Question 1

What are the two types of law we are concerned with?

Answer 1

Criminal and civil law

Question 2

What is criminal law and what are some examples?

Answer 2

Criminal law is focused on punishing the person responsible for the crime Ie: murder, price fixing, voluntary manslaughter.

Question 3

What is civil law and what does it entail

Answer 3

Civil law is concerned with civil or private right and remedies. It deals with wrongs in tort law or contract law

Question 4

Tort law and the two types

Answer 4

A private or civil Wrong or injury, includes intentional and unintentional torts

Question 5

Contract law

Answer 5

Failure without legal excuse to perform any promise which forms the whole party of a contract,

Question 6

How are laws established

Answer 6

Common law and statute law

Question 7

Common law

Answer 7

The basic concept is that current court decisions must follow those made in cases having similar circumstances ( known as the rule of precedent )

Question 8

Statute law

Answer 8

Is written law enacted by federal or provincial legislation, it amends or supersedes the common law.

Question 9

Damages in tort

Answer 9

Compensatory, exemplary or punitive, nominal

Question 10

What are compensatory damages and what are they concerned with

Answer 10

They are intended to compensate the injured party for bodily injury or property damage sustained, they are most important in ensuring victims are able to withstand the financial consequences of the loss. It can be divided up into two categories; general and special,

General include humiliation and embarrassment where as special includes damages which can be measured such as doctor dentist nursing fees ambulance medication etc.

Question 11

Damages awarded to property damage is measured how?

Answer 11

The measure of loss is

• the difference in cause of tangible property before and after damage
• actual losses incurred as a result of loss of use of tangible property.

Question 12

What are the Remedies for breach of contact

Answer 12

The courts can rule in the following ways

• provide for payment of damages to injured party
• enforce specific performance of the terms of the contract
• grant and injunction prohibiting a party from performing certain acts
• permit rescission to return the parties to pre contract positions

Question 13

Liability in common law and how negligence is proven

Answer 13

Negligence is the most common tort to be liable for THE DOCTRINE OF NEGLIGENCE rests on the duty of all person law to exercise in their conduct towards others in which injury may result, negligence must be proved by

• the defendant owed the plaintiff a legal duty of care
• the duty was breached as a result of the defendants negligence
• the plaintiff suffered damages as a proximate result of the defendants negligence

Question 14

Liability in statute law

Answer 14

Is based on the assumption that certain activities are so hazardous that in the event of injury or damage arising out of them, the person conducting the activity shall be presumed to be legally liable.

Types of activists include

Setting off of explosives
Lighting of fires
Operation of aircraft
Keeping of dangerous things on premises ( gas, wild animals etc )

Question 15

The broker and the law

Answer 15

Brokers must be cautioned against providing legal advice or practicing law, should refer them to a legal practitioner

Question 16

Who is an occupier

Answer 16

Not dependant on owner of premises, based on who was control of the premises and the power to admit and exclude entry of others.

Question 17

What are the duties of an occupier?

Answer 17

Responsible for damages arising from the premises and operations conducted thereon.

Question 18

Common duty owed

Answer 18

Is a duty to take such care in all circumstances reasonable to see that the visitor will be reasonably safe in using premises for which he is permitted and invited by the occupier or by law

Question 19

Liability for occupiers limited in certain instances

• 1. liability for independent contractors

Answer 19

• 1. Reasonable care was excercised in the selection of the independent contractor and - it was reasonable that the work the independent contractor was engaged to do should have been under taken. — unless the work being contracted is inherently dangerous, when injury or damage results from use of defective fixtures machinery or equip supplies by the principal or the principal controls the manner in which work is done.

Question 20

Liability for contractors limited in certain instances

-2. Liability resulting from condition of rented premises

Answer 20

-2. Landlords are generally not held liable for their tenants or customers injuries caused by unsafe condition, an exception would be if the landlord fails to notify the tenant of dangerous conditions, if they do not complete repairs when receiving notice of danger, or to common areas when they have multiple occupancy, building entrances stairways etc

Question 21

Duty owed to those outside the premises

Answer 21

May owe a duty to those who suffer damages from operations conducted on the premises, other than negligence they could be liable for nuisance ( smoke odours noise pollution) or trespass dumping materials or having property overhang onto another’s land

Question 22

Products liability exposure

Answer 22

Can arise Only off of the premises, or when the seller has clearly relinquished possession of the defective product. when a product is defective by containing something it should not or something was omitted that should not have been there.

The action may be brought in CONTRACT or TORT

Question 23

Duties of manufacturers

Answer 23

They must ensure

• safe design
• safe manufacture construction assembly and packaging
• give proper warning of dangers which can occur in using the product

Question 24

Completed operations liability exposure

Answer 24

Arises when work completed by a business is defective and causes injury or damage, the person who completed the work may be sued, the action of recovery may be done in contract or tort.

Most arise from - improper performance of a task

• use of defective materials parts or equip
• damage to completed work arising out of work or out of the materials or equipment furnished.

Question 25

Personal injury liability

Answer 25

Deal with matters like wrongful arrest, wrongful entry, malicious prosecution, libel, slander. ( amount for damages awarded considers factors such as humiliation reputation, inconvenience.

Examples of business exposed to this are
Those that employ store detectives
Landlords
Newspaper and broadcasters

Question 26

Liability for property in the business’s care custody or control

Answer 26

• real property ( rental lease agreement )

- personal property ( legal duty as a bailee for hire like when they have bikes they are working on )

Question 27

Employers liability exposure

Answer 27

• 1 liable for torts of employees unless
• employee delegates any part of their authority or arrange for a non employee to do the work.
• are on a frolic of their own
• use the employers property without authorization.

-2 employers liability for injuries to employees
If negligence can be proved and not covered by no fault insurance benefits they can be sued, examples of business without the no fault are

• farming
• commercial fishing
• professional sports

Question 28

Contingent liability exposure

Answer 28

1. When work is done by person who are not employees ( it is unlikely the principal will be liable but they may need to cover legal costs in providing a defence )
2. When employees work in another province for longer periods than are permitted by the workers compensation plan

Question 29

Contractual liability exposure

Answer 29

The liability of others assumed by the insured under contract.
Examples include:

Construction contracts ( government departments will normally require the contractor to assume all liability )

Purchase orders and sales agreements.

Question 30

Automobile/ aircraft liability exposure

Answer 30

From the use of; Can originate out of both owned and unowned automobiles and aircraft or watercraft

Question 31

Pollution liability exposure

Answer 31

All that have waste as a by product that must be disposed have this exposure.

( chemical plants, pulp mills, gasoline service, bulk stations )

Question 32

Incidental medical malpractice exposure

Answer 32

Businesses that provide incidental medial services as a part of their operations or forms that maintain first aid stations may be subject to damages or injuries from failure to render proper medical services.