Deck 12: The Liability Risk Management

Question 1

If you reasonably expect that the premises have been made safe for you, you are an invitee.

Answer 1

True

Question 2

An e-commerce liability policy excludes bodily injury and property damage.

Answer 2

True

Question 3

The advantage of a contingency fee system is that low-income plaintiffs are not barred from litigation because of inability to pay legal fees.

Answer 3

True

Question 4

Denial of service liability is caused when a third party cannot access a promised Web site.

Question 5

All civil wrongs, except breach of contract, are torts.

Question 6

Section III of an e-commerce liability policy usually includes the exclusions.

Question 7

The invitee is entitled to a higher degree of care than a licensee.

Question 8

The statement on a container of first-aid spray, "This product is safe when used as directed…," is an implied warranty.If you do not use a product as directed and suffer injury as a result, breach of warranty has occurred and the manufacturer is held liable for damages.

Question 9

A firm may be held liable for damage caused by a product even though neither negligence nor breach of warranty is established.This is called strict liability.

Question 10

Assume that, in the automobile example, both motorists experienced damages of $100,000, and that one motorist was 1 percent at fault, the other 99 percent at fault.Under the partial comparative negligence rule, damages are shared by both parties in relation to their levels of responsibility for fault.The motorist who was 1 percent at fault still receives $99,000, but must pay the other motorist $1, resulting in a net compensation of $98,000.

Question 11

Liability exposures do not change across societies over time.

Question 12

Joint and several liability has the potential to hold a slightly-at-fault party primarily responsible for a given loss.

Question 13

Civil law is concerned with acts that are contrary to public policy.

Question 14

The privity doctrine prevents including information about a plaintiff's financial status and/or compensation of losses from other sources in the litigation.

Question 15

The party being sued in litigation is the plaintiff.

Question 16

If you lend your car to a friend, Sid Smith, so he can go buy a case of liquor for a party you are having, he will be your agent during the trip and you may be held responsible if he is involved in an accident.Your liability in this case is strict.

Question 17

An invitee is a person who enters premises with permission but not for the benefit of the person in possession, or without a reasonable expectation that the premises have been made safe.

Question 18

In common law, the courts are guided by the doctrine of stare decisis.

Question 19

The commercial general liability policy covers all of the liabilities that result from loss of electronic information.

Question 20

Legal liability is the responsibility to right some wrong done to another person or organization.

Question 21

According to this doctrine, the court compares the relative negligence of the parties and apportions recovery on that basis.Identify this doctrine.

A)Last clear chance
B)Assumption of risk
C)Comparative negligence
D)Stare decisis
E)Contributory negligence

Question 22

E-commerce liability policies are standardized.

Question 23

These damages are considered awards intended to punish an offender for exceptionally undesirable behavior.They are intended not to compensate for actual harm incurred but rather to punish.Identify these monetary liability awards.

A)Punitive damages
B)Special damages
C)Noneconomic damages
D)General damages
E)Economic damages

Question 24

Liability differs from other exposures because:

A)liability exposures are static across societies over time.
B)it is determined by individuals' perception of a situation, which differs with every individual.
C)it is not determined by the courts and the laws.
D)all liability exposures can be measured in quantitative terms.
E)it is purely a creation of societal rules, which reflect social norms.

Question 25

Under this doctrine, a plaintiff who assumed the risk or contributed to an accident through negligence is not barred from recovery if the defendant had the opportunity to avoid the accident but failed to do so.Identify this doctrine.

A)Contributory negligence
B)Assumption of risk
C)Comparative negligence
D)Last clear chance
E)Stare decisis

Question 26

Assume that, in the automobile example, both motorists experienced damages of $75,000, and that one motorist was 5 percent at fault, the other 95 percent at fault.Under the complete comparative negligence rule, the net compensation is:

A)$67,500
B)$71,250
C)$3,750
D)$75,000
E)$65,000

Question 27

Which of the following can be defined as a failure to act reasonably, and that failure to act causes harm to others?

A)Negligence
B)Torts
C)Tortfeasor
D)Punitive
E)Vicarious

Question 28

This is a situation in which the liability of one person may be based on the tort of another.An employer, for example, may be liable for damages caused by the negligence of an employee who is on duty.Identify this type of liability.

A)Strict liability
B)Vicarious liability
C)Several liability
D)Joint liability
E)Assumption liability

Question 29

These damages compensate for harms that are easily quantifiable like medical expenses, lost income, and repair costs of damaged property.Identify these damages.

A)Punitive damages
B)Economic damages
C)General damages
D)Proximate damages
E)Noneconomic damages

Question 30

This doctrine disallows any recovery by the plaintiff if the plaintiff is shown to be negligent to any degree in not avoiding the relevant harm.According to this doctrine, the motorist who was only slightly at fault in causing an accident may recover nothing from the motorist who was primarily at fault.Identify this doctrine that acts as a defense against negligence.

A)Assumption of risk
B)Stare decisis
C)Last clear chance
D)Comparative negligence
E)Contributory negligence

Question 31

These damages or monetary liability awards are not specifically quantifiable but require compensation all the same.Examples of these damages include pain and suffering, mental anguish, and loss of consortium.Identify these monetary liability awards.

A)Special damages
B)Punitive damages
C)Economic damages
D)Proximate damages
E)Noneconomic damages

Question 32

Identify the correct statement about torts.

A)All civil wrongs, except those involving negligence, are torts.
B)It cannot be intentional.
C)Unintentional torts involve negligence.
D)Intentional torts involve the breach of contract.
E)Examples of unintentional torts include libel, slander, assault, and battery.

Question 33

Which of the following statements is true about laws regarding liability exposure?

A)Statutory law is based on custom and court decisions.
B)Common law is the body of written law created by legislatures.
C)In statutory law, the courts are guided by the doctrine of uberrimae fidei, that is, to stand by the decisions.
D)A civil wrong may also be a crime.
E)Criminal law deals with acts that are not against society as a whole, but rather cause injury or loss to an individual or organization

Question 34

Identify the doctrine that shifts the burden of proof from the plaintiff to the defendant.

A)Contributory negligence
B)Assumption of risk
C)Res ipsa loquitur
D)Last clear chance
E)Comparative negligence

Question 35

This doctrine holds that if the plaintiff knew of the dangers involved in the act that resulted in harm but chose to act in that fashion nonetheless, the defendant will not be held liable.Identify this doctrine that acts as a defense against negligence.

A)Stare decisis
B)Assumption of risk
C)Contributory negligence
D)Last clear chance
E)Res ipsa loquitur

Question 36

Under this doctrine, once a court decision is made in a case with a given set of facts, the courts tend to adhere to the principle thus established and apply it to future cases involving similar facts.This practice provides enough continuity of decision making that many disputes can be settled out of court by referring to previous decisions.Identify this doctrine.

A)Uberrimae fidei
B)Stare decisis
C)Ukteye getirmek
D)Ratio decidendi
E)Obiter dictum

Question 37

Which of the following is compensation for a person who has been harmed in some way?

A)Curative
B)Preventative
C)Tortfeaster
D)Remedy
E)Punitive

Question 38

This doctrine is used upon proof that the situation causing injury was in the defendant's exclusive control, and that the accident was one that ordinarily would not happen in the absence of negligence.Thus, the event "speaks for itself." Identify this doctrine.

A)Stare decisis
B)Assumption of risk
C)Contributory negligence
D)Last clear chance
E)Res ipsa loquitur

Question 39

Identify the damages that compensate for those harms that generally are easily quantifiable into dollar measures.

A)Noneconomic damages
B)General damages
C)Special damages
D)Punitive damages
E)Proximate damages

Question 40

The cost-benefit approach to assessing reasonableness of negligence holds behavior to be unreasonable if:

A)the discounted value of the harm is less than the cost to avoid the harm.
B)the present value of the possible loss is lesser than the expense required to avoid the loss.
C)the behavior is intentional.
D)the present value of the possible loss is greater than the expense required to avoid the loss.
E)the plaintiff knew of the dangers involved in the act that resulted in harm.

Question 41

Describe the doctrine of attractive nuisance.

Question 42

If your automobile breaks down and you ask the owners of the nearest house to use their telephone, the permission you receive to enter the house makes you:

A)a franchisee.
B)an invitee.
C)a trespasser.
D)a licensee.
E)a venturer.

Question 43

An employer is held liable for an injury caused by an employee using his or her own property when acting on the employer's behalf.Identify this liability.

A)Professional liability
B)Premises liability
C)Operations liability
D)Contingent liability
E)Nonownership liability

Question 44

_____ risk is the risk that we may hurt a third party and will be sued for bodily injury or other damages.

Question 45

If you are the party harmed, you would be the _____ in litigation.

Question 46

Explain contingent liability.

Question 47

This person enters the premises of another without either express or implied permission from a person with the right to give such permission.The only duty owed to this person is to refrain from taking steps to harm him or her.Identify this person.

A)Trespasser
B)Invitee
C)Licensee
D)Interviewee
E)Franchisee

Question 48

Legal liability usually involves monetary compensation.List and explain its forms.

Question 49

Liability stemming from activities of the firm in installing equipment or doing other jobs for hire off its own premises is called:

A)professional liability.
B)premises liability.
C)completed operations liability.
D)contingent liability.
E)nonownership liability.

Question 50

Which of the following is a contractual provision that transfers financial responsibility for liability from one party to another?

A)Assumption of risk agreement
B)Hold-harmless agreement
C)Last clear chance agreement
D)Res ipsa loquitur agreement
E)Comparative negligence agreement

Question 51

The insurance protection for professional liability risk is:

A)Nonownership liability coverage
B)Employee practices liability coverage
C)Directors and officers liability coverage
D)Errors and omissions liability coverage
E)Employee benefits liability coverage

Question 52

Which of the following is liability arising from the ownership, maintenance, and use of premises and conduct of activity?

A)Professional liability
B)Premises liability
C)Operations liability
D)Contingent liability
E)Nonownership liability

Question 53

According to this doctrine, if you leave your lawn mower running while you go in the house to answer the telephone and there are small children in the neighborhood who may be attracted to the mower, you may be held financially responsible for any harm they experience.Identify this doctrine.

A)Comparative negligence
B)Attractive nuisance
C)Stare decisis
D)Assumption of risk
E)Last clear chance

Question 54

In a legal liability suit, a person who commits a wrong is known as _____.

Question 55

This doctrine makes the owner of the family car responsible for whatever damage it does, regardless of which member of the family may be operating the car at the time of the accident.Identify this doctrine.

A)Comparative negligence
B)Attractive nuisance
C)Family purpose
D)Assumption of risk
E)Last clear chance

Question 56

In some cases, small children are attracted by dangerous objects or property.In such circumstances, the owner has a special duty toward the children, especially if they are too young to be responsible for their own safety.This is called the doctrine of:

A)comparative negligence.
B)last clear chance.
C)stare decisis.
D)assumption of risk.
E)attractive nuisance.

Question 57

Write a short note on contingency fee.Explain its advantages and disadvantages.

Question 58

If medical doctors fail to use reasonable care and diligence, and they fail to use their best judgment in exercising their skill and applying their knowledge, they are guilty of:

A)malpractice.
B)defamation.
C)vilification.
D)class-action.
E)nonownership.

Question 59

_____ law is the body of written law created by legislatures.

Question 60

In product liability, negligence actions against manufacturers surfaced once the _____ doctrine was removed.

A)assumption of risk
B)last clear chance
C)comparative negligence
D)attractive nuisance
E)privity

Question 61

_____ law deals with acts that are not against society as a whole, but rather cause injury or loss to an individual or organization.

Question 62

In _____ liability, a manufacturer may be liable for harm caused by use of its product, even if the manufacturer was reasonable in producing it.

Question 63

The _____ doctrine required a direct contractual relationship between a plaintiff and a defendant in a products suit.Thus, a consumer injured by a product had a cause of action only against the party from whom the product was purchased.

Question 64

_____ laws impose special liability on anyone engaged in any way in the liquor business.

Question 65

_____ held that governments could do no wrong and therefore could not be held liable.

Question 66

A(n) _____ is a guarantee that property or service sold is of the condition represented by the seller.

Question 67

_____ places extensive responsibilities on organizations involved in the generation, transportation, storage, and disposal of hazardous waste.Responsibility generally involves cleaning or paying to clean polluted sites that are dangerous to the public.

Question 68

_____ which determine the time frame within which a claim must be filed, have been proposed as a means to reduce the number of liability suits.

Question 69

Assume that, in the automobile example, both motorists experienced damages of $50,000, and that one motorist was 3 percent at fault, the other 97 percent at fault.Under the _____ rule, only the individual less than 50 percent at fault in causing harm receives compensation.

Question 70

_____ liability is a situation that exists when a plaintiff is permitted to sue any of several defendants individually for the full harm incurred.

Question 71

The _____ doctrine was particularly important in the nineteenth century for lawsuits involving workplace injuries, where employers would defend against liability by claiming that workers knew of job dangers.

Question 72

Lawsuits filed on behalf of many plaintiffs are known as _____.