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McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
a. Jennifer will not be entitled to sue Brad and Angie.
b. Gold Star will have to compensate Brad and Angie if Jennifer collects damages from
those two individuals.
c. Gold Star will have to pay damages to Jennifer only if Brad and Angie cannot afford to
do so.
d. Gold Star must hold a liability insurance policy.
e. Gold Star may also be held liable to Jennifer if the court finds that the company
committed a tort against her or if the court finds that Gold Star is vicariously liable for the
actions of Brad and Angie.
33) Miriam worked as a financial advisor with Acme Investments Inc. Over the period of
several years, she stole millions of dollars from the company’s clients. She did so by means
of a complex and carefully planned series of fraudulent transfers. The company had no
reason to believe that anything was wrong until the police arrived one day and explained
the entire situation to Acme’s president. Which of the following statements is TRUE?
a. If the company’s clients sue Miriam in tort law, she may be punished by a term in prison.
b. If Miriam holds a liability insurance policy, she will be protected from liability, even
though she deliberately defrauded the company’s customers, as long as she is sued for a tort
rather than prosecuted for a crime.
c. Acme may be held vicariously liable even though it had no reason to believe that Miriam
was acting improperly.
d. While Acme may have liability insurance against personal liability, it cannot have
liability insurance against vicarious liability.
e. The doctrine of vicarious liability means that Acme has a duty to defend Miriam if she is
sued in tort.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
34) Abdul worked for Primus Finance Co. Following a series of disastrous losses, several
of the company’s customers have sued Abdul in tort. Because Abdul has relatively little
money, however, those customers also want to sue Primus Finance. Primus Finance denies
vicarious liability by arguing that Abdul was an independent contractor rather than an
employee. A court is more likely to decide that Abdul was an independent contractor if
a. Abdul decided for himself when, where, and how he would provide services to Primus
Finance.
b. in order to perform his work, Abdul used an office and computer system that belonged to
Primus Finance.
c. the customers who are suing protected themselves against losses through insurance
policies.
d. Abdul committed his torts against the company’s clients deliberately rather than
carelessly.
e. Abdul was paid a consistent amount by Primus Finance every two weeks.
35) Max worked in a warehouse owned by Fortress Storage Inc. His job consisted mainly
of moving and storing expensive and sensitive pieces of computer equipment that Fortress
had received from its customers. Unfortunately, while Max normally was among the
company’s most trusted workers, he carelessly dropped a computer that belonged to HAL
Inc. and that HAL had asked Fortress to store. Which of the following statements is TRUE?
a. Fortress may be vicariously liable only if a court decides that Max is not liable.
b. Max may be vicariously liable for Fortress’s tort even if HAL’s equipment was damaged
while Max was doing something that Fortress had told him not to do.
c. If Fortress is held vicariously liable, then HAL will be prevented from suing Max.
d. The court may apply the doctrine of vicarious liability only if Fortress has liability
insurance.
e. As a matter of risk management, Max and Fortress both should have purchased liability
insurance.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
36) Teach Inc. sold a computer consulting business to Blackbeard Corp. Blackbeard was
persuaded to enter into that sale contract by documents that Teach had produced that
suggested that Blackbeard would enjoy a profit of $1 000 000. In fact, as Teach knew, the
business was really worth far less. As a result of purchasing the business, Blackbeard has
actually suffered a total loss of $400 000. Blackbeard has successfully sued Teach in both
tort and contract. Though it may also be entitled to other relief, Blackbeard is entitled to
damages of
a. $600 000 in contract.
b. $400 000 in tort.
c. $400 000 in contract.
d. $1 000 000 in tort.
e. $600 000 in tort.
37) Bentham Inc sued Locke Ltd. in tort. The judge denied liability on the grounds of
remoteness. This means that
a. the tort that Locke committed was not an intentional tort.
b. Locke’s tort did not in fact cause Bentham’s loss.
c. the tort must have been committed by a person who worked for Locke as an independent
contractor.
d. Bentham waited too long before starting its lawsuit against Locke.
e. the tort occurred outside of Canada.
38) Paine Enterprises sued Montesquieu Corp. in tort. The court held that there had been a
failure to mitigate damages. This means that
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
a. the tort that Montesquieu committed was not an intentional tort.
b. Paine may still be entitled to damages for losses that could not have been reasonably
mitigated.
c. Paine committed a tort that wiped out the effect of Montesquieu’s tort.
d. the loss that Paine suffered was not a reasonably foreseeable loss of Montesquieu’s tort.
e. Paine started its lawsuit against Montesquieu too late.
39) Rawls Inc. sued Nozick Ltd. in tort. The court awarded nominal damages. This means
that
a. Nozick must have committed the tort of negligence.
b. the court calculated the amount of damages for the primary purpose of deterrence.
c. Nozick must have committed an equitable wrong rather than a legal wrong.
d. Rawls did not prove that it suffered an actual loss as a result of Nozick’s tort.
e. Nozick must have committed the tort of defamation.
40) Jojo suffered a catastrophic injury while she was at work. Although she strongly
suspects that the accident that injured her was caused by the carelessness of one of her co-
workers, she cannot prove that fact. She therefore hopes to receive compensation for her
loss from a workers’ compensation scheme. Which of the following statements is TRUE?
a. Jojo cannot receive workers’ compensation unless she can prove who caused the accident
that resulted in her injury.
b. If Jojo receives workers’ compensation, she will likely be entitled to receive less than she
would have been entitled to receive if she had been able to prove that her injury was caused
by a tort and obtain damages at a common law trial.
c. Jojo is not entitled to workers’ compensation unless she voluntarily contributed money
toward the workers’ compensation fund.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
d. If Jojo is entitled to receive workers’ compensation, she will receive compensation for
her loss directly from her employer.
e. Workers’ compensation schemes operate in less than half of Canada’s provinces.
41) Tony has been learning about tort law and he is excited because he has always wanted
to break the law, but doesn’t want to be a criminal. Which of the following is true regarding
Tony?
a. Tony should take his friend’s car, committing only the tort of conversion.
b. Tony should tell his friend’s boss that his friend is a murderer, committing only the tort
of defamation.
c. Tony should simply declare himself a tortfeasor, as this declaration converts all crimes to
torts.
d. Tony should punch someone, committing the torts of assault and battery but no crimes.
e. Tony should sneak into a stranger’s house, committing only the tort of break and enter.
42) Klaus purposefully sneaks onto Kelly’s property without permission. Kelly is also
saying that while he was on her land, he began banging her garbage cans together, causing
her and her neighbours to awake. Which of the following describes the possible torts?
a. The first is the intentional tort of trespass to land; the second is the negligence tort of
nuisance.
b. The first is the intentional tort of trespass to land; the second is the strict liability tort of
nuisance.
c. The first is the crime of trespass to land; the second is the negligence tort of nuisance.
d. The first is the intentional tort of trespass to land; the second is the intentional tort of
assault.
e. The first is the crime of break and enter; the second is the intentional tort of intimidation.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
43) Maria is creating a new business and she’s worried about her workers committing torts
while on the job. Because of this, she is debating between independent contractors and
employees. You tell her that
a. employees are less risky because you can control their wages.
b. independent contractors have no obligation to work because she won’t control their
hours.
c. vicarious liability always applies to both, so it doesn’t matter.
d. she shouldn’t get insurance because if she doesn’t she may not have to compensate the
wronged person completely.
e. the safest thing to do is to get liability insurance and contract independent workers.
44) Carlos has been sued for the tort of negligence while working at SKS Logistics. He
failed to inspect his truck and missed seeing a failure in the brake line that caused him to
get in an accident. Which of the following is true?
a. SKS is not vicariously liable if the have liability insurance.
b. The plaintiff can only sue SKS if they specifically told Carlos not to check the brakes.
c. Carlos cannot be sued because he was on the job; SKS bears all the risk.
d. The plaintiff should sue both Carlos and SKS under the doctrine of vicarious liability.
e. Carlos should be sued for the tort of deceit for lying about having working brakes.
45) Pierre has just won a court case against a tortfeasor, Elizabeth, who has been found
guilty of battery. In the judgment, the judge said the tort undoubtedly caused Pierre to stop
working for 2 months and that Elizabeth acted maliciously. Which of the following
remedies would be appropriate?
a. An injunction to stop Elizabeth from committing the tort again
b. Compensatory damages for the time lost at work, assuming Pierre exercised his duty to
mitigate
c. Compensatory damages for the time lost at work and punitive damages
d. Just punitive damages because, in Canada, this is the most likely remedy
e. Nominal damages because Pierre did not suffer a monetary loss
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
46) At a recent hockey game of the University of Calgary Dinosaurs, the Dinosaurs’ star
player, Happy Gilmore, scored in overtime to win an important playoff game. After scoring
the goal, as is the new custom, Happy skated towards the protective glass and slammed into
it. Unfortunately, it broke and several fans were injured by the broken glass. You have been
retained by the fans to provide them with legal advice as to their rights. You have been
asked whether they should sue Happy, the university, or both. Which of the following is the
best advice?
a. Sue Happy as he is solely liable; it was his deliberate act that caused the glass to shatter.
b. Sue the University as they are solely liable because Happy is a student and students
cannot be held liable for normal acts in a hockey game.
c. Sue both; they are both liable because Happy’s action constitutes negligence and the fact
the glass broke constitutes negligence on the part of the university for improper installation
or maintenance.
d. Sue neither, since they aren’t liable; the manufacturer of the glass is solely liable.
e. Happy, the university, and the glass manufacturer are all possibly liable, so you should
sue all 3.
47) Petronella has been injured on the job. She thinks that the injury was a direct result of
her employer’s negligence. Which of the following best describes how Petronella will be
compensated?
a. She should sue for the tort of negligence and hope for compensatory and punitive
damages.
b. Because of no-fault insurance, it doesn’t matter what the cause of the injury was.
c. She has no recourse because a standard employment contract absolves employers of this
kind of risk.
d. Her fastest and easiest route to compensation is through workers’ compensation.
e. Because of workers’ compensation, she can only sue for nominal damages.
48) A local community group, Nuclear Families Against Nuclear Waste, is unhappy with
the local nuclear power plant. The plant has been dumping its waste in a lake in the
community, preventing them from swimming in it. The group has put money into cleaning
the lake, but now wants compensation. What is the most likely remedy?
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
a. If the nuclear plant has no-fault insurance, the insurance will pay for it.
b. The group will be awarded compensatory damages for the infraction, mitigation costs,
and there would be an injunction to stop dumping.
c. The court will only award mitigation costs if there is no other reasonable place for the
plant to dump.
d. As this is considered an outrageous offense, the group will be awarded punitive damages.
e. Under vicarious liability, the plant can blame the workers who dumped the waste and be
clear of all charges.
Essay Questions
1) Celine physically attacked Roger. She therefore committed both a tort and a crime.
Briefly identify and explain any important differences between court proceedings
concerning the tort and court proceedings concerning the crime.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
2) Briefly identify and explain the manner in which tort obligations and contractual
obligations generally arise. Briefly explain why tort obligations create a greater hazard for
the purposes of risk management.
3) Explain, from a risk management perspective, why liability insurance may be more
important with respect to liability in tort than with respect to liability for breach of contract.
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
4) The Ozark Carnival Corp (OCC) owns a traveling fairground that it operates in shopping
mall parking lots. It hired Cletus to run “The Splasher,” which is one of its amusement
rides. It provided Cletus with the most extensive training possible. Nevertheless, while
operating The Splasher, Cletus carelessly failed to fasten the safety harness on Celia, a five-
year-old passenger. Celia was thrown from the ride and suffered serious injuries. Cletus has
admitted liability in negligence. Unfortunately, he has no money with which to pay Celia’s
damages. The court also held OCC vicariously liable for Celia’s injuries. Identify and
briefly explain three possible justifications for the doctrine of vicarious liability.
5) Ramon cut the grass that surrounded a condominium complex owned by Acme Inc. He
carelessly failed to check the ground for dangerous objects before doing so. As a result, he
ran the lawnmower over a pile of rocks. One of the rocks shot out from the lawnmower and
hit Irene in the eye. Irene is sure that Ramon committed the tort of negligence, but she also
realizes that he has very little money. She therefore wants to claim damages from Acme
McInnes/Kerr/VanDuzer: Managing the Law: The Legal Aspects of Doing Business, Fourth Edition
Chapter 3: Introduction to Torts
Corp on the basis of the doctrine of vicarious liability. Is she entitled to do so? Do you
require any additional information before answering that question? Explain your answers.
6) Cheyenne committed the tort of battery against Joey. A court held that Joey is entitled to
recover damages from her. Identify and briefly explain three types of damages that the
court might have awarded.
