CAIB 3 PRACTICE EXAM 2026 QUESTIONS
AND ANSWERS
What is the name given to the collection of written decisions? - correct answer
-Case Law
Explain the concept of the Rule of Precedent. - correct 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". - correct 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. -
correct 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.
- correct answer -Based 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. - correct 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? - correct answer -The defendant has the right to
establish a defense against an action alleging strict liability.
What determines if a product is defective? - correct 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. -
correct answer -fitness 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. - correct 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 - correct 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. - correct
answer - NOT COVERED - REFERENCE: Ch. 2, pg. 10
AND ANSWERS
What is the name given to the collection of written decisions? - correct answer
-Case Law
Explain the concept of the Rule of Precedent. - correct 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". - correct 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. -
correct 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.
- correct answer -Based 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. - correct 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? - correct answer -The defendant has the right to
establish a defense against an action alleging strict liability.
What determines if a product is defective? - correct 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. -
correct answer -fitness 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. - correct 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 - correct 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. - correct
answer - NOT COVERED - REFERENCE: Ch. 2, pg. 10
