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McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
True/False Questions
1) Although the same set of events may support both a law suit in tort and a criminal
prosecution, a civil action will not succeed if a wrongdoer has already been convicted of a
criminal offence.
a. True
b. False
2) You may be held liable in tort even though you were unaware of the fact that you owed
an obligation to the plaintiff.
a. True
b. False
3) Miles was sued in tort. He previously purchased a liability insurance policy from
Western Mutual Insurance Co. Even if the lawsuit against him ultimately fails, that
insurance policy may be beneficial to Miles because it will require the insurance company
to pay for the costs associated with the trial including Miles actual expenses to have a
lawyer defend him.
a. True
b. False
4) The deterrent function of tort law is based on the belief that the high costs associated
with litigation will discourage plaintiffs from starting law suits that have little chance of
success.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
a. True
b. False
5) Felipe bought a liability insurance policy. That policy included a clause that excluded
coverage for injuries inflicted through “intentional or criminal acts.” Felipe deliberately
broke a bottle over a store clerk’s head during a robbery. Because of the compensatory
function of tort law, a court will require the insurance company to pay damages to the
victim of the wrong, but it will also give the insurance company the right to sue Felipe for
that same amount.
a. True
b. False
6) Sidhu was injured when Melissa, a construction worker, carelessly dropped a hammer
out of a window. Sidhu has successfully sued both Melissa, on the basis of her personal
liability, and Melissa’s employer, on the basis of the employer’s vicarious liability. Sidhu
must now choose between recovering all of his damages from Melissa or all of his damages
from her employer.
a. True
b. False
7) Damages in tort look backward, whereas damages in contract look forward, primarily
because the courts realize that the victim of a tort is relatively more likely to suffer a
serious physical injury.
a. True
b. False
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
8) Suneel committed the tort of battery against Jodi. The injuries that she suffered were
unexpectedly severe. Suneel can be held fully liable for Jodi’s losses even if the extent of
the losses were not reasonably foreseeable.
a. True
b. False
9) A tort is considered to be actionable per se (which means “actionable in itself”) only if
the same facts also support a criminal prosecution.
a. True
b. False
10) Most alternative compensation schemes apply only if an injury is the result of a
wrongful act.
a. True
b. False
11) Robert successfully sued Marjorie in tort. Majorie has liability insurance. In this
situation, Marjorie is considered the tortfeasor.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
a. True
b. False
12) According to one old English case, Ethelred was entitled under the doctrine of blood
feud to kill Halebert. If the same facts arose today, the Canadian legal system would deal
with the situation through a combination of tort law and contract law.
a. True
b. False
13) Suneeta successfully sued Olaf in tort. In this situation, it is accurate to say that while
Olaf’s primary obligation was imposed by law, his secondary obligation was voluntarily
created.
a. True
b. False
14) Lupine Inc. successfully sued Wolf Finance Ltd. in both tort and contract. In this
situation, it is accurate to say that Wolf Finance owed obligations to Lupine, one that arose
by operation of law and the other that arose through voluntary agreement.
a. True
b. False
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
15) Nelson successfully sued Horatio in tort. The court awarded an injunction, nominal
damages, and punitive damages. It therefore must be true that Horatio deliberately breached
an obligation that he owed to Nelson in connection with a strict liability tort.
a. True
b. False
Multiple Choice Questions
1) Darius, a security professional, agreed to guard Myrna’s house. That contract contained a
number of terms. One clause required Darius to “take every precaution possible to ensure
that no personal belongings are improperly removed from the house.” In fact, Darius
himself stole several objects of art from Myrna’s house. Darius has committed
a. a crime, a tort, and a breach of contract.
b. a crime and a breach of contract but not a tort.
c. a crime and a tort but not a breach of contract.
d. a tort and a breach of contract but not a crime.
e. a breach of contract, but neither a tort nor a crime.
2) During an argument, Sylvia flew into a rage and hit her friend Ian in the head with a
baseball bat. Which of the following statements is TRUE?
a. In the normal course of events, Ian could prosecute Sylvia for her crime.
b. Sylvia breached a civil obligation that she owed to society as a whole.
c. Sylvia breached a public obligation that she owed to Ian personally.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
d. If a court decides that Sylvia has violated a public obligation, it will probably award
damages against her.
e. Sylvia probably has committed both a tort and a crime.
3) Which of the following statements is TRUE with respect to the comparison between a
tort and a contract?
a. Both a tort and a contract always involve the breach of a civil obligation that gives rise to
an award of damages.
b. Although the same set of facts may support both a claim for tort and a claim for breach
of contract, the plaintiff cannot sue for both at the same time.
c. From a risk management perspective, tort obligations are often more dangerous than
contractual obligations because tort obligations generally are not voluntarily created.
d. Damages look backward in contract, but forward in tort.
e. If the same events involve both a tort and a breach of contract, the plaintiff generally is
entitled to collect damages for both equal to double damages.
4) Steven committed a trespass to Rundeep’s land by building a fence on her property. He
did so in the belief that the property actually belonged to him. Steven has a liability
insurance policy that he purchased from Burlington Life & Accident Ltd (BLA). Which of
the following statements is TRUE?
a. If Rundeep is awarded an injunction, rather than damages, Steven’s insurance policy will
be of no benefit to him because the court’s order will not require him to pay any money to
Rundeep.
b. BLA’s duty to defend is an obligation that it owes to Rundeep.
c. If BLA pays damages on Steven’s behalf, the law of torts compensatory and deterrence
functions will be equally served.
d. BLA probably has a duty to defend that requires it to pay Steven’s legal expenses.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
e. BLA must compensate Steven if he suffered any property damage as a result of his own
trespass.
5) Which of the following statements is TRUE?
a. Studies prove that tort law has a very effective deterrent function.
b. The word “tort” is derived from the Greek word for “obligation” or “duty.”
c. Nominal damages are generally restricted to torts that are actionable per se and where no
actual damages have been proven or where there has been a breach of contract and there are
no actual damages.
d. Punitive damages cannot be awarded at the same time as compensatory damages.
e. Security guards and police officers have the same authority to detain people suspected of
committing crimes.
6) Brian takes great pride in being obnoxious. One of his favourite ploys is to talk loudly on
his cellphone during movies. Unfortunately for him, few people see the humour in his
behaviour, and some become positively hostile. Brian learned that lesson several months
ago during a late night show at the Bijou Theatre. After he rudely refused to quiet down,
Brian was asked by Myriam, the theatre’s night manager, to leave the premises. Brian
loudly refused that request as well. Myriam then announced that she was going to the lobby
to call the police to escort Brian off the premises. The moment she left the room, however,
another customer named Ivan jumped Brian from behind, knocked him senseless with a
single, vicious blow to the back of his head, and dragged his limp body out the exit and into
the alley behind the theatre. Which of the following statements is most likely TRUE?
a. Because Ivan, by removing Brian from the premises, was performing the type of act that
is normally performed by an employee, the theatre may be vicariously liable for any torts
that Ivan may have committed.
b. If Ivan’s actions constitute a crime, then he will be held liable to Brian for compensatory
damages only if there is proof beyond a reasonable doubt that Ivan also committed a tort.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
c. Given the violent nature of Ivan’s attack on Brian, a court almost certainly would apply a
strict liability tort.
d. As long as Ivan and Brian both contribute to a workers’ compensation scheme, Brian will
be entitled to compensation from that scheme.
e. Ivan may be liable to Brian for punitive damages even if he is not convicted of any
crime.
7) The Kingston Maroons Corp (usually known simply as the Maroons) owns and operates
both a hockey team by that name and the Kingston Arena. The Maroons employ Gilbert
Douglas, who is the team’s star player. During a recent game, Douglas was sent to the
penalty box by the referee. Unhappy with the referee’s decision, Douglas slammed the
penalty box door shut. That caused the protective glass attached to the penalty box and it
shattered. Cherie, a fan who was sitting nearby, was cut by the broken glass. The evidence
proves that the accident was caused partly by Douglas’s carelessness in slamming the
penalty box door shut, and partly by the fact that the Maroons organization had carelessly
installed the protective glass. Both Douglas and the Maroons therefore committed the tort
of negligence. Which of the following statements is probably TRUE?
a. The Kingston Maroons Corp. is personally liable to Cherie only if Douglas is classified
as an independent contractor.
b. Douglas is not personally liable to Cherie in tort because her case falls within the
workers’ compensation scheme.
c. The Kingston Maroons Corp. and Gilbert Douglas are both liable to pay compensatory
damages to Cherie.
d. Douglas is relieved of personal liability if the Kingston Maroons Corp. is held
vicariously liable.
e. If Douglas is an employee of the Kingston Maroons, then he must be an independent
contractor as well.
8) Which of the following statements is TRUE with respect to the doctrine of vicarious
liability?
a. While vicarious liability provides employers with more incentive to act carefully when
selecting, training, and supervising employees, it may also tend to provide employees with
less incentive to act carefully as they perform their jobs.
b. Vicarious liability serves tort law’s compensatory function by increasing the possibility
that the tortfeasor will receive damages from someone.
c. A person who is injured by a tort that was committed by an employer personally can use
the doctrine of vicarious liability to sue any of the employer’s employees.
d. As a general rule, an employee who has paid damages for a tort that they personally
committed, whether or not it is in the course of employment, is entitled to use the doctrine
of vicarious liability to recover that same amount of money from their employer.
e. Because personal liability and vicarious liability are separate concepts, a successful
plaintiff usually is entitled to collect full damages from both the employee and the
employer.
9) Elise owns and operates a convenience store. Because that store is located near a high
school, it loses a great deal of profit to shoplifting. Last week, Elise caught Hakan in the act
of stealing a magazine. She physically detained him and called the police. The police
arrived and placed Hakan in handcuffs. At that point, Elise calmly and intentionally
punched Hakan in the face and said, “I’ve been waiting a long time for the chance to do
that.” Elise has a liability insurance policy that she purchased from the Pacific All Risk
Insurance Co. Which of the following statements is TRUE?
a. Elise almost certainly committed the tort of false imprisonment.
b. PARI will probably be required to pay damages on Elise’s behalf with respect to Hakan’s
claim for false imprisonment.
c. If Elise is found liable for the tort of battery, she will probably have to pay the damages
herself.
d. If Elise is found liable for the tort of battery, the police department will also be held
vicariously liable for the same tort.
e. Because Elise was acting on behalf of her store, a court could impose liability upon the
store but not upon Elise.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
10) During an argument in a nightclub, Marie deliberately slapped Caesar’s face. She had
done so many times before, with few consequences. On this occasion, however, the slap
caused Caesar to suffer a blood clot that led to a serious injury. The medical evidence
indicates that Caesar had always suffered from a rare condition that made him unusually
vulnerable to such complications. Neither Caesar nor Marie had any way of knowing about
that pre-existing condition. Which of the following statements is TRUE?
a. An injury is never considered to be too remote if it was a direct consequence of a tort.
b. The doctrine of remoteness is based on the court’s desire to award compensatory
damages in every case.
c. Because she committed an intentional tort, Marie cannot avoid liability on the basis of
the general doctrine of remoteness.
d. Caesar will probably receive an injunction.
e. The rules of remoteness are important only if the court awards punitive damages.
11) Gawain and Julie are neighbours. Gawain committed the tort of trespass to land by
smashing a window in Julie’s attic with a baseball bat. Julie could have quickly and easily
fixed that damage by paying a home repair company $1000. Instead, she did nothing for
eight months. At the end of that period, a thunderstorm caused rain to pour into Julie’s attic
through the broken window. Julie then paid a home repair company $4000 to fix both the
broken window and the damage caused to the attic by the rain. Which of the following
statements is TRUE?
a. A court would probably impose an injunction to require Gawain to fix the damage to
Julie’s house himself.
b. The doctrine of mitigation would not apply because Gawain committed an intentional
tort.
c. A court would probably award Julie compensatory damages of $4000.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
d. A court would probably award Julie compensatory damages of $1000 as the other
damages were caused by Julie’s unreasonable failure to mitigate.
e. The doctrine of mitigation is used to deter the commission of torts.
12) Which of the following statements is TRUE?
a. Punitive damages cannot be awarded in addition to compensatory damages.
b. Punitive damages are only available for intentional torts.
c. Punitive damages are only available for unintentional torts.
d. Punitive damages serve the same basic purpose as nominal damages.
e. Punitive damages may be awarded even if the defendant is not guilty of a crime.
13) Which of the following statements is TRUE?
a. Nominal damages are always awarded in addition to compensatory damages.
b. Nominal damages are generally only available for torts that are actionable per se and for
breaches of contract that do not result in actual damage.
c. Nominal damages are generally only available for the tort of negligence.
d. Nominal damages are intended to punish the tortfeasor.
e. The phrase “nominal damages” refers to any type of damages that have a name.
14) Which of the following statements is TRUE with respect to alternative compensation
schemes?
a. Most workers’ compensation schemes are funded by voluntary donations from
employees.
b. No-fault automobile accident schemes only apply to accidents that were not the fault of
either party.
c. All no-fault automobile accident schemes existing at this time, necessarily prevent the
victim of a traffic accident from suing in tort.
d. Most alternative compensation schemes are funded by a tax that is imposed on damages
that are awarded in tort cases.
e. Workers’ compensation schemes usually prevent the victim of a workplace accident from
suing in tort.
15) Which of the following statements is TRUE?
a. Liability in tort law always requires proof of deliberate or careless wrongdoing.
b. The victim of a tort is called a tortfeasor.
c. A person may be subject to an obligation to another in tort law even if they did not agree
to that situation.
d. In exceptional circumstances, a person may be imprisoned for committing a tort.
e. The concept of privity is part of every tort.
16) Christine entered into a contract with Vernon. She was required to pay $5000 and he
was to provide advice regarding a business venture that she was pursuing. If Vernon had
performed properly, Christine would have earned a profit of $20 000. As a result of
Vernon’s negligent performance, however, Christine suffered a loss of $10 000 (in addition
to the $5000 that she had paid to Vernon). Christine wants to sue Vernon in both contract
and tort. Which of the following statements is TRUE?
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
a. Christine will receive damages of $20 000 if her claim in tort is successful.
b. Christine will receive damages of $5000 if her claim in tort is successful.
c. Christine must choose between tort and contract, and cannot sue for both at the same
time.
d. As the terms were explained in the text, Vernon owed a primary obligation in contract
and a secondary obligation in tort, at the moment before her acted carelessly.
e. As the terms were explained in the text, Vernon owed a primary obligation to Christine
in both tort and contract.
17) Terry committed a tort against Julia by using her computer, without her permission,
while she was away on vacation. Which of the following statements is TRUE?
a. Because he breached the secondary obligation that he owed to Julia, Terry is now subject
to a primary obligation to provide her with compensatory damages
b. Terry may be held liable in tort even if he has already been convicted of a crime as a
result of his use of Julia’s computer.
c. Terry cannot be held liable in tort if he already has been convicted of a crime as a result
of his use of Julia’s computer.
d. Julia is entitled to either sue Terry for damages in tort or prosecute him for a crime.
e. Julia is entitled to an injunction that would force Terry to pay for the monetary value of
his use of her computer.
18) Which of the following statements is true regarding alternative compensation schemes?
a. Alternative compensation schemes are always funded by the general body of taxpayers.
b. Alternative compensation schemes are administered by private charities.
c. Alternative compensation schemes are always better than the tort system of recovery of
damages from the perspective of the victim.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
d. Alternative compensation schemes are generally premised on the basis of compensation
regardless of fault.
e. Alternative compensation schemes never have any sort of limit on the amount of
recovery an injured party may obtain and the schemes are administered by trials in court.
19) Makayla successfully sued Deacon for the tort of defamation. In that situation, the term
“tortfeasor” refers to
a. Makayla as the person who suffered, or was injured by, the tort.
b. Deacon as the person who committed the tort.
c. The traditional idea, or theory, of tort law.
d. The court as a representative of society’s concern, or fear, or anti-social behaviour.
e. The fact that Makayla’s tort caused Deacon to fear that he would suffer an injury.
20) Which of the following statements is TRUE with respect to the relationship between
tort and contract?
a. A plaintiff who is entitled, on the basis of the same set of facts, to sue in both tort and
contract should always sue in contract because contractual damages are always worth at
least as much as tort damages.
b. A plaintiff who is entitled, on the basis of the same set of facts, to sue in both tort and
contract should always sue in tort because tort damages are always worth at least as much
as contractual damages.
c. The concept of privity is fundamental in contract but does not exist in tort law.
d. Damages look backwards in contract but forwards in tort.
e. The obligation to behave in a certain way is considered primary in contract and
secondary in tort because contract is a more important area of law.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
21) Werner owns a number of animals that live in and around his home. Because Werner’s
house is located in a secluded area, he has little interaction with people outside of his
immediate family. He consequently has never received any complaints about his animals
until recently. That complaint has come in the form of a tort action by Madonna, who
claims that she was wrongfully hurt by one of Werner’s animals. The evidence establishes
that she was bitten by the animal as she knocked on Werner’s door with the intention of
asking him to donate to a charity. Which of the following statements is TRUE?
a. Under the traditional common law rules, if the animal that bit Madonna was a wild
wolverine, Werner could be held liable only if he knew that the animal was dangerous.
b. Strict liability is a type of vicarious liability.
c. Under the traditional common law rules, the owner of an animal may be held liable for
any damage caused by the animal only if that owner intentionally or carelessly created the
situation that resulted in the damage.
d. There are no defences to a strict liability tort.
e. Madonna may have a good arguable claim against Werner in the law of tort for
compensatory damages for the injuries that she suffered.
22) Jose has sued Sharona in tort as a result of an injury that he suffered while visiting her
property. Given the facts of the case, it is possible, at least in theory, for Jose to prove a
number of different torts. Which of the following statements is TRUE?
a. Jose is entitled to sue for a number of different torts at the same time and he is not
required to sue for one particular tort that he believes will lead to the best result.
b. If Jose sues for an intentional tort, he must prove that Sharona intended to cause harm to
him.
c. If Jose sues for a negligence tort, he must prove that Sharona deliberately neglected to
protect him from harm.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
d. While the common law traditionally recognized a few strict liability torts, those torts
frequently created unfair results, and consequently they have now been abolished in
Canada.
e. Because the traditional category of torts was developed in both the courts of law and the
courts of chancery, that category is generally said to include both legal and equitable
wrongs.
23) Beverley, who is a Canadian judge, has just heard the parties’ arguments in a tort case.
Given the complexity of the situation, she feels the need to do some independent research
into the relevant law before she gives her decision. Which of the following statements is
TRUE?
a. Beverley will need to examine the rules pertaining to intentional torts if the case before
her deals with product liability.
b. Beverley will have to examine the rules pertaining to strict liability torts if the case
before her deals with a conspiracy.
c. Beverley will need to examine the law of defences if the case before her deals with an
intentional tort but not if it deals with a strict liability tort.
d. Beverley is entitled to impose liability only if she is satisfied that the defendant breached
a legal obligation, even if the case deals with a strict liability tort.
e. Every type of intentional tort requires proof that the defendant intended to cause the
plaintiff to suffer an injury.
24) You have been hired by a law reform commission to examine ways in which tort law
can be used to affect behaviour. As part of that project, you have been asked to consider the
level of mental culpability that the plaintiff is required to prove before the defendant can be
held liable by a court. Which of the following statements is TRUE with respect to tort law
as it currently exists in Canada?
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
a. Strict liability allows people to engage in unusually hazardous activities, but also requires
them to pay for any damage that occurs, even if they took every reasonable precaution.
b. An intentional tort occurs only if the defendant intended to cause the plaintiff to suffer a
loss.
c. An intentional tort occurs only if the defendant intended to breach an obligation.
d. Because of the need to discourage tortious behaviour negligence forms the smallest
category of tort.
e. The concept of strict liability always applies if a person intentionally causes another
person to suffer an injury.
25) Which of the following torts fall within the category of intentional torts?
a. battery, false imprisonment, and negligence
b. trespass to land, conspiracy, and product liability for negligently designed products
c. interference with chattels, professional negligence, and product liability
d. Rylands v. Fletcher, control of wild animals, and intimidation
e. false imprisonment, trespass to land, and interference with chattels
26) Which of the following torts fall within the category of strict liability torts?
a. nuisance, battery, and negligence
b. deceit, battery, and trespass to land
c. control of wild animals and Rylands v. Fletcher.
d. Rylands v. Fletcher, deceit, and false imprisonment
e. negligence, nuisance, and occupiers’ liability
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
27) Faye is a wildlife expert who works for a major zoo. Because her love of animals does
not end when she leaves work each night, she has a number of exotic pets in her home,
including a small capuchin monkey that she calls Kong. Unfortunately, although Kong had
no history of violent behaviour, he viciously attacked a door-to-door canvasser named Ray
who rang Faye’s doorbell one evening. Which of the following statements is TRUE?
a. Under the traditional common law rules, Faye cannot be held liable because Kong had
not previously bitten anyone.
b. Because the common law imposes unlimited and absolute liability on anyone who has
control of a wild animal, Faye will be held liable for Ray’s injuries and there are no
defences that are available to her.
c. Faye cannot be held liable unless the court is satisfied that she either carelessly controlled
Kong or intentionally caused Kong to attack Ray.
d. Even if she would otherwise be held strictly liable for Ray’s injuries, Faye may escape
liability by proving that before ringing her doorbell, Ray had seen a sign that clearly
warned of the danger of wild animals and directed strangers not to approach the house and
the court concluded that Ray had consented to the danger to being attacked by the monkey.
e. Liability for wild animals is a type of intentional tort.
28) As a result of dumping toxic materials into the water supply, Acme Corp. has been held
liable under the tort of nuisance to several of its neighbours. While the company’s directors
are concerned about the bad publicity, they do take comfort in the fact that Acme holds a
liability insurance policy that applies in this situation. Which of the following statements is
TRUE?
a. The insurance policy would have required the insurance company to pay for the defence
costs associated with the lawsuits that were brought against the company.
b. Because of the insurance policy, the deterrent effect of the court’s judgment will be
lessened.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
c. Because of the insurance policy, Acme’s neighbours are entitled to be paid twice, once by
Acme and again by the insurance company.
d. The doctrine of the duty to defend requires Acme to defend itself against its neighbour’s
claims in order to protect the insurance company from having to pay any money.
e. A duty to defend exists under the insurance policy only if the directors are not liable for
the nuisance.
29) Case Brief 3.2 discusses the Supreme Court of Canada’s decision in Non-Marine
Underwriters, Lloyds of London v. Scalera. As a result of that decision
a. the plaintiff in the case was more likely to receive compensation.
b. liability insurance is never available if a tort is committed against a child.
c. liability insurance always defeats tort law’s deterrence function.
d. sexual abuse may involve a crime, but it never creates liability in tort.
e. an insurance company may, depending upon the wording of a liability insurance policy,
exclude coverage if the insured party intentionally committed a tort.
30) Omega Inc purchased a liability insurance policy from WorldWide Insurance Ltd.
Which of the following statements may be TRUE?
a. The insurance policy cannot protect WorldWide from liability in tort.
b. A liability insurance policy is important only if and when a person is held liable by a
court.
c. The insurance policy will protect Omega only if Omega has a contract with at least one
other party.
d. Omega probably purchased liability insurance because it was worried that it might not be
able to collect full damages if it was hurt by a tortfeasor.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
e. Despite issuing the liability insurance policy, WorldWide may not be required to pay
damages on behalf of Omega if Omega acted in a way that was not only tortious but also
deliberate and intentional and such actions were excluded from coverage by the terms of
the insurance policy.
31) Ethical Perspective 3.1 discussed the Supreme Court of Canada’s decision in Bazley v.
Curry. Which of the following statements is TRUE?
a. The court’s decision focused on the concept of liability insurance.
b. The court held that an insurance company may deny coverage if an insured party
committed a tort that also amounted to a deliberate and criminal act.
c. The court held that an employer may be held vicariously liable for the torts of an
independent contractor.
d. The court held that an employer may be held vicariously liable for an employee’s tort
even if that employee committed a tort by doing something that the employer did not want
the employee to do, but the employees actions were closely connected acts to the
employee’s duties and the employer’s operations significantly increased the risk of
wrongdoing.
e. The court held that an employer will be held vicariously liable for an employee’s tort
only if the employee committed a tort by doing something that the employer had directed
the employee to do.
32) Gold Star Investment Inc. is in the business of providing financial advice to clients.
Alan, who is the company’s managing director, hires all of the company’s staff.
Unfortunately, he tends to hire not on the basis of formal qualifications, but rather on the
basis of physical beauty. Consequently, among Gold Star’s staff are Brad and Angie, a pair
of exceptionally attractive, but dull-witted, financial advisors. When Jennifer retained Gold
Star to provide investment advice, her file was assigned to Brad and Angie. Through
incompetence and negligence, the pair managed to lose virtually all of Jennifer’s money on
bad investments within a very short time. If Gold Star is held vicariously liable,
