Deck 6: Special Tort Liabilities of Business Professionals

Question 1

A husband and wife, Michelle and William, contacted an insurance agent for coverage for the wife's business, financed by the husband. The agent negligently arranged for insurance in William's name only. When Michelle suffered a loss, she thought it would be covered by the policy, she discovered that her business was not covered by the insurance. In the court action that followed:

A) the agent failed in his duty to make proper arrangements for coverage of Michelle's interest but properly performed his duty towards Michelle's business.
B) the agent would be held liable for the loss Michelle suffered.
C) the agent would not be held liable for the loss Michelle suffered.
D) the agent failed in his duty to make proper arrangements for coverage of Michelle's interest.
E) the agent would be held liable for the loss Michelle suffered as the agent failed in his duty to make proper arrangements for coverage of Michelle's interest.

Answer 1

E

Question 2

The professional under a contract implies promises to perform the services required in accordance with the standard for his or her profession, and a failure to do so would constitute ______________________.

A) a lack of fiduciary duty
B) a breach of contract
C) professional negligence
D) a lack of informed consent
E) a breach of solicitor-client privilege

Answer 2

B

Question 3

Most professionals are members of professional associations that are responsible for the establishment of

A) training and education.
B) standards of performance of the members.
C) enforcement of the standards by an accredited or licensing process.
D) training and education and standards of performance of the members.
E) training and education, standards of performance of the members and enforcement of the standards by an accredited or licensing process.

Answer 3

E

Question 4

Breach of contract cases usually are a result of careless or negligent performance of the professional service.

Question 5

Leonard was an entrepreneur who owned a restaurant business called, Blue Moon Diner Ltd. The business was located in an old house owned by Leonard. Lauren, the accountant, was preparing financial statements for the purpose of selling Blue Moon Diner Ltd. She assumed that the house was an asset of Blue Moon Diner Ltd. and did not review the land title or check with Leonard. Alicia purchased the business for $500,000, believing that the house was an asset worth $450,000 and the business was worth $50,000. Can Alicia sue Lauren?

A) Yes, Lauren had a duty of care to Alicia.
B) No, Lauren did not have a duty of care to Alicia.
C) Yes, Lauren breached the standard of care for an accountant.
D) Yes, Lauren had a duty of care to Alicia and breached the standard of care for an accountant.
E) No, Lauren did not have a duty of care to Alicia and breached the standard of care for an accountant.

Question 6

In solicitor-client privilege, the lawyer normally has no legal obligation to reveal any confidential information to legal authorities or to anyone, unless:

A) the lawyer has severed the professional relationship.
B) the situation involves a minor.
C) a felony has been committed.
D) the client provides authorization.
E) There are no exceptions.

Question 7

The normal approach for the engagement of the services of an architect is through a contract. Under the terms of the contract, the architect is usually expected to:

A) perform their duties in accordance with the professional code of conduct.
B) complete the work in accordance with professional standards.
C) to have a duty of care to the client.
D) perform the work in accordance with the terms of the contract.
E) all of these.

Question 8

"Competent lawyer" means a lawyer who has and applies relevant skills, attributes, and values in a manner appropriate to each matter undertaken on behalf of a client.

Question 9

The case of Hercules Management Ltd. v. Ernst and Young (1997) makes the following contribution to the law regarding professional liability of accountants at common law:

A) accountants do not have a duty of care to the corporation.
B) accountants do not have a duty of care to the directors.
C) accountants do not have a duty of care to the shareholders.
D) accountants do not have a duty of care to the creditors
E) accountants have a duty of care to the corporation, directors, shareholders and creditors.

Question 10

A professional is a person who possesses special knowledge or exercises special skills not normally possessed by most individuals.

Question 11

Lisa, a three-year-old girl, was having her tonsils removed. Towards the end of the surgery, Dr. Talker answered her cell phone and failed to thoroughly check for sponges in Lisa's throat. Lisa choked to death. Can Lisa's family successfully sue Dr. Talker?

A) Yes, Dr. Talker failed to meet the standard of care for a surgeon.
B) Yes, Dr. Talker had a duty of care to Lisa.
C) Yes, Dr. Talker's negligence caused the injury.
D) Yes, damages resulted.
E) All of the responses are correct.

Question 12

Professional associations are not given the authority to limit the use of the professional designation to individuals who are members in good standing in the association, or to take action under the legislation to prevent anyone not a member in good standing from holding him or herself out to the public as a particular professional, or offering the professional services to the public.

Question 13

One of the obligations upon professionals acting in fields that can create tort liability is the obligation to _______________________ from the party who will be affected by the professional service.

A) explain procedures and obtain consent
B) charge fees under the guidelines and explain procedures
C) avoid harm and obtain consent
D) obtain consent to action and assess damages
E) explain procedures and obtain consent to action

Question 14

Rose, a financial advisor, recommended that a client, Maureen, purchase shares in Mad Money Mutual Fund. Relying on Rose's recommendation the client purchased 100 units. The entire stock market collapsed, and the value of Mad Money Mutual Fund was reduced significantly. Maureen was surprised to learn that Rose earned a commission on each unit sold to her clients. Is Rose liable to Maureen?

A) No, mutual fund dealers are not liable to their clients for losses incurred.
B) No, Rose met the standards of care for a financial adviser.
C) No, Rose's advice did not cause the loss.
D) Yes, Rose breached her fiduciary duty by not disclosing that she received a commission on sales.
E) Yes, Rose failed to meet the standard of care for a financial adviser by recommending a mutual fund that failed.

Question 15

Manno had injured his knee and required laparoscopic knee surgery. During his appointment with the surgeon, Dr. Cutter, Manno was advised of the risks associated with the surgery including death and limited mobility in his knee. Dr. Cutter did not discuss scarring if traditional surgery was required. Manno signed the consent form. In the operating room, Dr. Cutter concluded that laparoscopic surgery would not repair Manno's knee and he had to make three large incisions in a traditional method. Manno's knee was repaired but he had three large, unattractive scars. Manno was a male model. Can Manno successfully sue Dr. Cutter?

A) No, Dr. Cutter did not have a duty to Manno with regards to his career.
B) No, Dr. Cutter met the standard of care for a surgeon.
C) No, the purpose of the surgery was to repair the knee and it did so successfully.
D) No, damages did not result.
E) Yes, Dr. Cutter failed to obtain informed consent.

Question 16

A successful negligence suit against a member of a profession must measure the ________________ of the particular practitioner with that prescribed by the profession in general and must show in the evidence that the practitioner failed to meet that standard.

A) performance of duty
B) professional standards
C) fiduciary duty
D) duty of care
E) None of the responses are true.

Question 17

If an engineer designs a bridge without consideration for the weight of traffic that would travel over the bridge, and the bridge collapses, the engineer may be

A) negligent in the performance of his or her professional duty but not liable for the loss or injury that results.
B) negligent in the performance of his or her professional duty and liable for the loss or injury that results.
C) not negligent in the performance of his or her professional duty but liable for the loss or injury that results.
D) None of the responses are true.

Question 18

For many professions, the standard of care extends beyond the single performance of the service, and the professional may also be required to

A) consider additional fees.
B) consider subsequent services.
C) consider third parties.
D) consider duty of care.
E) consider additional consent.

Question 19

A duty to place a client's interest above the professional's own interests is known as:

A) a professional relationship.
B) duty of care.
C) solicitor-client privilege.
D) fiduciary duty.
E) a legal responsibility.

Question 20

It is suggested, but not legally required, that a lawyer recognize the limitations on his or her ability to handle a legal matter, and to take such steps as may be required to ensure that the client has appropriate advice, such as directing the client, if necessary, to another lawyer with greater expertise in the particular legal manner.

Question 21

How would the duty of care be determined for persons who are not members of a professional association, but who hold themselves out as persons in possession of special expertise? Use an insurance agent as an example.

Question 22

What is the "threefold test" and how is it applied in cases of negligent misrepresentation? In what way has the Supreme Court of Canada changed the application of this test?

Question 23

A fiduciary duty of care may also arise in a situation where a professional agrees to perform a service without a fee.

Question 24

The liability of an engineer is limited to the client that engages the services of the engineer, and not to the subsequent purchasers of the construction project.

Question 25

The full and understandable explanation of the risks associated with a course of action, and the clear understanding by the client or patient is known as the duty of care.

Question 26

The duty of a lawyer to keep confidential information provided by a client is called client-professional privilege.

Question 27

The failure of architects to maintain their level of skill may result in a breach of their duty of care, and if loss results to the client, it may result in tort liability for negligence.

Question 28

Outline the steps that an emerging profession must take in order to establish a recognized professional status.

Question 29

Insurance agents, even though they are agents of companies, may be held liable for clients' losses if, when requested to do so, they fail to provide proper coverage for the contemplated loss.

Question 30

A surgeon who negligently performs an operation on a patient may be liable in tort to the patient, and only the patient.

Question 31

Professional negligence extends beyond carelessness in carrying out duties but does not extend to statements made and information provided to clients.

Question 32

Outline the responsibility of a surgeon to a patient. Is it limited only to the actual performance of the medical procedure?

Question 33

The Civil Code of Quebec establishes a fixed time limit of ten years from the date of completion of the project for any claim of negligence against an engineer or architect in Quebec.

Question 34

Normally, a professional is only responsible in tort to the patient or client. However, in recent cases, the courts have held some professionals liable to third parties when the professional's expertise or skill was intended to be relied upon by the third party and the professional was aware of this fact.