Question 1

How have limited liability partnerships been introduced into Canadian society?

Accepted Answer

Limited liability partnerships were introduced into Canadian society through the enactment of amendments to the provincial Partnership Acts. Each province has its own legislation governing partnerships, and amendments were made to these acts to allow for the creation of limited liability partnerships.

Question 2

In order for a professional services contract to provide the mutually intended benefits to all parties privy to the arrangement,what needs to be present?

Accepted Answer

All essential terms need to be present in the professional services contract to ensure that all parties understand their obligations and what is expected of them. Without all essential terms outlined, there could be misunderstandings and disagreements, which could lead to legal disputes.

Answer: A and B (if applicable)
 Accountability for professional negligence is important to protect all parties involved in the contract. If a professional makes a mistake or provides inadequate services, they should be held accountable. Professional liability insurance can also provide added protection for all parties in case of mistakes or errors in the services provided. However, not all contracts may require professional liability insurance.

Question 3

With respect to professional liabilities arising in tort,in what way are losses resulting from damage to property and pure economic losses similar?

Accepted Answer

Both property damage and pure economic losses can be challenging to prove in terms of liability and quantifiable damages. Both require extensive analysis of the cause and effect relationship between the negligence of the professional and the resulting loss. Additionally, proving liability in cases of pure economic loss can be particularly difficult as it often involves complex and indirect relationships between the actions of the professional and the financial losses suffered by the claimant. Neither A, C, nor D are accurate with respect to the similarities between property damage and pure economic losses.

Question 4

What is the key to limiting the duty of care owed by an auditor to third parties as defined by the foreseeability principle?

Accepted Answer

The answer of What is the key to limiting the...

Question 5

Breanne is considered to be one of the top family law professionals in her province.She has been retained by Martha's lawyer to give an opinion with respect to the standard of care of a reasonably competent family law lawyer.Which of the following is most likely the purpose for Breanne's involvement in this litigation?

Accepted Answer

Breanne has been retained to provide expert testimony on the standard of care of a family law lawyer. This suggests that the claimant must prove that the defendant breached the standard of care, and a family law expert is required to provide an opinion on what that standard of care is.

Question 6

Which of the following would a business law professor most likely indicate as being a legitimate concern to clients or third parties relying on professionals who provide their services through a limited liability partnership?

Accepted Answer

The answer of Which of the following would a business...

Question 7

Which of the following is a distinguishing characteristic of professions?

Accepted Answer

One of the distinguishing characteristics of professions is that they have the right to govern themselves, which is established by provincial statutes. This self-regulation is an important aspect of professions and sets them apart from other occupations. Option A is incorrect because self-regulation is a key characteristic of professions. Option B is incorrect because having multiple governing bodies would not necessarily be a distinguishing characteristic of professions. Option D is incorrect because while provincial legislation may define the right to perform an audit, this is not a fundamental characteristic of professions.

Question 8

In the context of professional services,the duty of care a professional owes to a client is synonymous with which of the following?

Accepted Answer

The answer of In the context of professional services,the duty...

Question 9

With respect to litigation involving an alleged third-party claim arising from professional negligence,which of the following is a valid statement?

Accepted Answer

A third-party claim for professional negligence essentially means that someone who was not the client of the professional is claiming that they were harmed as a result of the professional's actions (or inactions). Contributory negligence is a defense that can be raised in such cases, meaning that the third-party plaintiff's own actions may have contributed to their harm and therefore they should not be able to recover as much (or at all) from the professional. The other choices are not directly relevant to this type of litigation.

Question 10

Mary was told she had breast cancer and needed immediate drastic surgery to save her life.One breast was removed and she was sent for radiation treatment.The treatment was withheld due to the absence of evidence of cancer having ever been in Mary's system.Which of the following would most likely negatively influence the outcome of Mary's medical malpractice claim for wrongful surgery?

Accepted Answer

The answer of Mary was told she had breast cancer...

Question 11

In the case of Haig v.Bamford,(1976)72 D.L.R.(3d)68 S.C.C.,the Supreme Court found the defendants (auditors)owed a duty of care to third-party claimants.Why did the court break away from its traditional approach of refusing all third-party claims for professional negligence in this particular instance?

Accepted Answer

In the Haig v. Bamford case, the Supreme Court determined that the auditors knew they were auditing financial statements for the purpose of third-party reliance, specifically a group of shareholders, and the auditors were aware of this limited group. As a result, the court found that the auditors owed a duty of care to these third-party claimants. This decision broke away from the traditional approach of refusing all third-party claims for professional negligence, which was based on the limited purposes of audited financial statements as set out in legislation. The decision was based on the specific circumstances of the case and the auditor's actual knowledge of the limited third-party group and their intended reliance.

Question 12

In which of the following circumstances will the lawyer's indemnification fund compensate the victims of one of its practising members?

Accepted Answer

The lawyer's indemnification fund will compensate the victims of one of its practising members in case of theft of client money from trust. This fund is specifically created to compensate clients who have suffered financial loss due to the dishonest or fraudulent conduct of a practicing lawyer. Therefore, the only option that involves financial loss is theft of client money from trust.

Question 13

With respect to the application of the law to professional relationships,the statement "in an indeterminate amount for an indeterminate time to an indeterminate class" is synonymous with which of the following?

Accepted Answer

This phrase is often used in the context of third-party negligence liability, where the potential liability is uncertain in terms of amount, duration, and the class of people who might be affected.

Question 14

How were members of the various professions able to secure the right to practise their professions through the limited liability partnership?

Accepted Answer

Members of various professions were able to secure the right to practice through limited liability partnerships by lobbying governments to enact legislation that provided them with protection from personal liability, thus allowing them to practice with reduced personal financial risk.

Question 15

Triston is one of a number of shareholders of TVG Group Inc.who lost a substantial sum by relying on the negligently prepared audit of the company's previous fiscal year's financial circumstances.Which of the following would strongly support a viable avenue of recourse for these shareholders against the negligent professional?

Accepted Answer

The answer of Triston is one of a number of...

Question 16

The traditional position of the courts to deny the claims of third parties was based on which of the following?

Accepted Answer

The traditional position of the courts to deny the claims of third parties was based on the policy to protect the economic viability of the professions. This means that courts were concerned with avoiding excessive liability that could put professionals out of business. Therefore, they tended to limit liability to direct parties and avoid allowing third parties to seek compensation for any losses they may have incurred based on the professional's actions.

Question 17

What is a condition of practice that is considered to apply to most professions.

Accepted Answer

The answer of What is a condition of practice that...

Question 18

With respect to third parties,which of the following is a common characteristic of the most difficult cases involving professional tort?

Accepted Answer

Careless advice or misrepresentations causing economic loss is a common characteristic of difficult professional tort cases involving third parties, as it involves proving negligence and the resulting financial harm.

Question 19

Which of the following would a lawyer most likely indicate as an appropriate response to a client's indication that he has purchased a handgun and is planning revenge on the financial advisor who has stolen his life savings?

Accepted Answer

A lawyer has a duty to prevent harm and may need to violate confidentiality and solicitor-client privilege if there is a credible threat of harm to others.

Question 20

Michelle,Michael,Savenna,and Hirsch have just concluded their new partnership's organizational meeting.The group of busy commercial lawyers determined that a limited liability partnership suited their needs best.Which of the following would a business law professor most likely indicate as being the reason for the choice made by this group?

Accepted Answer

A limited liability partnership offers professional risk management, meaning each partner's liability is limited to their own personal actions and it protects the group from the negligence or malpractice of another partner. This is a common choice for professional service firms such as lawyers, accountants, and consultants. The other options (A, C, D) do not apply as strongly to the choice of a limited liability partnership.

Quiz 22: Professional Relationships