CAIB 3 Practice Exam Questions with Correct Answers

CAIB 3 Practice Exam Questions with Correct Answers What is the name given to the collection of written decisions? - Answer-Case Law Explain the concept of the Rule of Precedent. - Answer-Current court decisions must follow those made in cases having similar circumstances, which allows the development of a logical body of general principles against which specific cases to be compared. Explain the meaning of the term "damages". - Answer-Compensation in money for the loss or damage suffered. Compensatory damages for bodily injury are an amalgamation of general and special damages, and based on a number of factors which the courts take into account. State four factors that influence the determination of compensatory damages. - Answer-1. extent of financial support provided by the injured party to his or her family 2. social position 3. reputation 4. financial circumstances 5. ability of the plaintiff's legal representative Explain the assumption that lies at the centre of the Doctrine of Strict Liability. - AnswerBased on the assumption that certain activities are so hazardous that, in the event of injury or damage arising out of them, the person conducting the activity shall be presumed to be legal liable Identify two activities that impose strict liability on the person conducting the activity. - Answer-The setting off of explosives , the lighting of fires, the operation of aircraft, the keeping of a dangerous thing on the premises, such as water in a dam or cistern; gas; electricity; wild animals. What is the position of the defendant in a legal action when the law deems the defendant strictly liable? - Answer-The defendant has the right to establish a defense against an action alleging strict liability. What determines if a product is defective? - Answer-A defective product is one that contained something that it should not have; or something that should have been there was omitted in its manufacture. The Sale of Goods Act sets out the contractual responsibilities of sellers for their products. This Statute Law contains a number of implied warranties that form part of every contract for the sale of goods. Identify one implied warranty which is of significance to sellers of products. - Answerfitness of a business's product(s) for a particular purpose The Sale of Goods Act also addresses a buyer's responsibility to exercise care as to the suitability and quality of the products purchased. State the exception to this general rule. - Answer-When a buyer makes known the particular purpose for which the goods are required, and relies on the seller's skill or judgment, there is an implied condition that the goods will be reasonably fit for such purpose. If they are not, the seller will be liable for damages should injury or property damage result from their use. Your client, the proprietor of pub, is insured under the Commercial General Liability Policy. Indicate whether or not the policy would respond in the following instances. State COVERED or NOT COVERED The insured entered a claim for the recovery of a $1,000 payment made as a goodwill gesture to a customer, a well-known entertainer, who injured himself during a fall from a bar stool - Answer-NOT COVERED - REFERENCE: Ch. 2, pg. 4 Your client, the proprietor of pub, is insured under the Commercial General Liability Policy. Indicate whether or not the policy would respond in the following instances. State COVERED or NOT COVERED The insured had to cancel the booking of the pub for a large private event because a ruptured pipe had caused serious water damage to the premises and the restoration would not be completed in time. The insured was sued for breach of contract by the band that was hired to perform at this event. - Answer-NOT COVERED - REFERENCE: Ch. 2, pg. 10 Your client, the proprietor of pub, is insured under the Commercial General Liability Policy. Indicate whether or not the policy would respond in the following instances. State COVERED or NOT COVERED The insured received a $3,000 bill for a dental procedure from a customer who broke a tooth when she bit on a piece of bone in the pizza she had consumed at the pub. The customer had informed the server of the incident - Answer-COVERED - REFERENCE: Ch. 2, pg. 3, 5 The Commercial General Liability Policy does not respond to claims against the insured for bodily injuries sustained by employees while performing the duties of their job. State the underlying reason for this exclusion. - Answer-Because most employees are covered under the provincial Workers' Compensation Plan. Coverage is provided on a no fault basis. What options are available to the insured to cover this exposure? - Answer-To purchase Employer's Liability coverage or voluntarily enrol all employees under the provincial Workers' Compensation Plan. The insured hired a roofing contractor to replace the old tar and gravel roof on the insured's building, which is flanked by two other buildings not owned by the insured. The insured agreed to assume the contractor's liability, which resulted in the reduction of the contract price for the insured. During the work a spark from the fire that heated the tar ignited setting the roof on fire which spread within minutes to one of the adjacent buildings causing serious damage to it. The court held the insured liable for the damage. State COVERED or NOT COVERED - Answer-COVERED