Exam 5: Negligence, Professional Liability, and Insurance Law

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

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), 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?

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?

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?

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

What is the forfeiture rule?

Sarah Iris, a middle-aged woman, was struck down as she crossed the street at 41st and Knight streets, by a car whose driver accidentally went through the red light. She was not killed, but badly injured. Unfortunately, she was suffering from osteoporosis, a condition in which her bones had lost most of their mass and were fragile and brittle. Consequently, the bones in her legs were not expected to heal at all. She lost the use of her legs. She successfully sued the driver for negligence. With regard to the amount of damages to be paid by the defendant, which of the following is correct?

Explain how the courts determine whether a duty of care exists in a negligence action.

What test is used to establish a duty of care?

Give three examples where tort standards have been modified by legislation.

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

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 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?

An insurance company's right to subrogation refers to their right to refuse to pay where the insured is responsible for his own loss. SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.

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

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?

What is the reasonable person test used for?

In Cooper v. Hobart, the issue was whether or not the Registrar of Mortgage Brokers owed a duty of care to investors. The Supreme Court of Canada held that

A surety bond provides assurance that the party to a contract will perform its part of the contract.

Discuss the role of insurance, especially compulsory insurance, and how it relates to tort law.