Chapter 1 – Commercial Liability – A Legal Perspective

Question 1

Criminal Wrong

Answer 1

one witch is considered harmful to the state

Question 2

Civil Law

Answer 2

concerned with civil or private rights
and remedies (be civil to each other)

Question 3

Tort Law

Answer 3

a private or civil wrong or injury, other than breach of
contract, for which the court will provide a remedy in the form of
an action for damages

Question 4

Contract Law

Answer 4

failure, without legal excuse, to perform any

promise which forms the whole or part of a contract

Question 5

Rule of Precedent

Answer 5

current court decisions must follow those

made in cases having similar circumstances

Question 6

Statue Law

Answer 6

written law, created by

federal and provincial legislation and supersedes or amends common law

Question 7

Compensatory Damages

Answer 7

compensate the insured party for the bodily

injury or property damage sustained

Question 8

General Damages

Answer 8

damages, which cannot be exactly determined in monetary terms – rather they reflect the amount the court believes necessary to compensate the aggrieved party fairly eg. pain and suffering

Question 9

Special Damages

Answer 9

out of pocket expenses

Question 10

Exemplary or Punitive Damages

Answer 10

awarded to the plaintiff over and above those provided

as compensatory damages, purpose is to punish defendants

Question 11

Nominal Damages

Answer 11

establish validity of the plaintiffs claim when a question of principle is at stake

Question 12

Remedies for Breach of Contract

Answer 12

provide payment for damages to the injured party, enforce specific performance of the terms of the contract

Question 13

Doctrine of Negligence

Answer 13

duty on all persons to exercise due care in their conduct toward others from which injury
may result

Question 14

Negligence must be proven, a plaintiff must show that the following three conditions existed

Answer 14

1) The defendant owed the plaintiff a legal duty of care
2) Duty was breached as a result of the defendant’s negligence
3) The plaintiff suffered damages as a proximate result of the defendant’s negligence

Question 15

strictly liable

Answer 15

if the work is inherently dangerous, they are presumed to be liable for an offence with out the requirement on the plaintiff to prove negligence.

Question 16

an Occupier

Answer 16

person who has immediate supervision and control of the premises and the power to admit and exclude the entry of others

Question 17

Duty Owed to Those Who Come on the Premises

Answer 17

responsible for damages caused by the condition

of the premises and the operations conducted thereon

Question 18

Premises Exposure

Answer 18

occupier is responsible for the condition of the premises

Question 19

Operations Exposure

Answer 19

Operations conducted on or away from the premises also expose the
occupier to claims arising out of negligence

Question 20

Liability in Common Law

Answer 20

degree of duty of care is determined by the reason for which the person to whom that duty is owed is on the premises

Question 21

Common Duty Owed

Answer 21

Such care as in all the circumstances of the case is reasonable to see that the visitor will be reasonably safe in using the premises for the purposes for which he is invited or permitted by the occupier to be there or is permitted by law to be there.

Question 22

Exceptions to Common Duty Owed

Answer 22

not owed to visitors in respect to risks

willingly accepted

Question 23

duty owed to trespassers

Answer 23

not intentionally harmed or have traps set for them

Question 24

Liability for independent contractors - one who does the hiring – the principal – will not be liable for the
negligence of an independent contractor provided it can be shown that

Answer 24

• Reasonable care was exercised in the selection of the
  independent contractor
• It was reasonable that the work the independent contractor was engaged to do should have been undertaken

Question 25

principal will share in any liability arising out of the

negligence of an independent contractor if…

Answer 25

• When the work being contracted is inherently dangerous
• When injury or damage results from the contractor’s use of defective fixtures, machinery or equipment supplied by the principal
• When the principal controls the manner in which the work is to be done

Question 26

Landlords are not liable to tenants or their customer for injuries cased by the unsafe condition of the premises, except…

Answer 26

Landlords will be held liable is they fail to notify the tenant of any dangerous conditions they were aware of or ought to be aware of that existed at the time the lease was made. If the landlord promises to make repairs and fails to do so after receiving notice of the danger the landlord is liable.

Question 27

Multiple Occupancy Buildings

Answer 27

The landlord is responsible to the tenant and those who enter on the premises only for the condition of areas common to all occupants. In all other respects liability falls to the occupier.

Question 28

Duty Owed to Those Outside the Premises

Answer 28

The occupier is responsible to maintain the premises in a manner which will protect persons from all change of harm arising form the occupiers use of them.

Question 29

Nuisance

Answer 29

everything that endangers life or health, gives offence

to the senses, violates the laws of decency, or obstructs reasonable and comfortable use of the property

Question 30

To prove Nuisance, plaintiffs must show…

Answer 30

• physical injury to, or substantial interference with, their use or enjoyment of land
• the injury or interference was unreasonable

Question 31

Trespass

Answer 31

an unlawful interference with one’s person, property

or rights

Question 32

defective product is normally one which

Answer 32

• contained something it should not have

- something that was omitted in its manufacture that should have been there

Question 33

Products Liability Exposure

Answer 33

A consumer of goods has a right to expect that they are safe for use, if use of a defective product results in injury or damage, they are entitled to damages

Question 34

products liability claim can only be made when it is shown that

Answer 34

• occurred away from the premises of the seller
• the seller had clearly relinquished possession of the
  defective product

Question 35

If injury arises out of the consumption or other use or possession of the product on the seller’s premises this is seen as a…

Answer 35

premises and operations hazard

Question 36

the seller is liable when…

Answer 36

the buyer makes known the particular purpose for which the goods are required, and relies on the sellers’ skill and judgment, there is an implied condition that the goods will be reasonably fit for such a purpose

Question 37

The Snail in the Bottle Case

Answer 37

established that the responsibility of manufacturers for their negligence was extended to the ultimate users of their products

Question 38

Burdon of Proof

Answer 38

manufacturer is only liable for defects caused by its proven negligence; the burden of proof is on the manufacturer. The Manufacturer must prove they were not negligent

Question 39

Manufacturers are liable for all product defects, they have a duty to ensure:

Answer 39

• safe design

- safe manufacture, construction, assembly and packaging

Question 40

product is not defective, there may be dangers if not

properly used

Answer 40

• give proper warning of dangers which can occur in using the product
• Provide instructions, if needed

Question 41

Duties of Sellers

Answer 41

considered at law to be
1) experts when it comes to the
ingredients and properties of the articles they sell
2) expected to tell the truth about them

Question 42

Completed Operations Liability Exposure

Answer 42

When work is defective, the person who performed such work may be sued for damages.

Question 43

completed operation claim can arise when injury or damage is shown to have

Answer 43

• occurred away from the premises of the person(s) doing the work
• that such work has been completed or abandoned

Question 44

Business that have a high exposure to Personal Injury Liability

Answer 44

• Those that employ store detectives
• Landlords
• Newspapers and broadcasters

Question 45

Real Property

Answer 45

Businesses that rent space face losses to the building and fixed equipment. The extent of their liability is stated in contract, such as the lase or rental agreement.

Question 46

bailee for hire

Answer 46

one who has temporary control of the personal

property of others for a purpose other than sale and who is compensated for such custody

Question 47

ordinary care

Answer 47

bailee for hire is expected to take the same care of the goods of others as would be taken by a diligent and prudent owner of such goods

Question 48

Employer’s Liability for Torts of Employees

Answer 48

Employers are responsible for the torts of their employees while in the course of their employment under common law. injured party must prove that the employee cased damage while
in the course of employment

Question 49

no liability upon the employer for damages when

employees are…

Answer 49

• Delegate any part of their authority, or arrange for
  someone who is not an employee to actually do their work, without the employer’s consent
• Are on a “frolic” of their own – taking time from their duties to attend to personal matters
• Use the employer’s property without authorization for their own purposes

Question 50

Contractual Liability Exposure

Answer 50

the liability of others assumed by the

insured under contract

Question 51

Pollution Liability Exposure

Answer 51

described as the contaminating or defiling of the

environment