LAW 122 Business Law case examples for exams 2025 Toronto
Metropolitan University
Case EXAMPLES
Insurance risk question:
●A student sues four of his high school teachers for a total of $15
million. The claim was that each of the four teachers, independent
of one another, sexually abused him while he was a student. Also,
each of these four teachers should have known about the assaults
of the other three teachers and failed to report them to the
authorities.
●The teacher’s insurance policy covers all damages by a teacher
for bodily injury, except that it does not cover any bodily injury
that was intentionally caused by that teacher.
●If the student proves his case in court, must the insurance
company cover damages?
Yes, insurance company liable in negligence
●There will be no insurance for a teacher who intentionally abused the
student. However, if a teacher knew that there was abuse by another
teacher, then that claim would be in negligence for failing to report abuse
that has already happened, and that portion of the claim would be covered
IRAC - use this method on all law tests
1. Issue: Identify the issue the court has been asked to decide
2. Rule(s): State what legal rule(s) in statutes and precedents decided
in similar cases (“stare decisis”) apply to the dispute
3. Application/Analysis: Apply the relevant rule(s) to the facts. Be logical.
,4. Conclusion: Statement of how the issue should be decided
based on the above - give logical reasons - not personal opinions!
Rylands v Fletcher
●The defendants built a reservoir (a pond) on their land.
●When digging, they noticed abandoned mining shafts in the ground
●They exercised reasonable care - hired a competent engineer and contractor.
●They filled their pond with water. Unfortunately, water leaked
through the old mine shafts flooding the plaintiff’s mines which
were downstream.
●Similar to fracking industry - where the gas company fractures
its property with pressurized liquid - even if exercise all
reasonable care, could cause leaking onto neighbour - strict
liability?
Strict Liability in Rylands v. Fletcher - IRAC
Issue: Is the company liable for the leaking even if there is no intention
and they took all reasonable steps to prevent leaking?
Rules: If permit a special danger, then liable even if acted carefully -
Strict Liability.
Analysis: Building a reservoir/pond is a non-natural use of the land.
Conclusion: The company is liable for the leaking regardless of intent
or negligence
, Issue: Is the owner strictly liable for the actions of a domestic pet?
Rules: If permit a special danger to occur, then liable even if acted
carefully. Analysis: Owning a dog, and giving it all available training, is
not a special danger. Many people have dogs without any injury
happening.
Conclusion: The owner is not strictly liable in Tort. Only liable if negligent.
“One Free Bite” - next time, knowing that your dog has bitten a child, you
would be negligent for failing to put a muzzle on your dog.
Vicarious liability case
●A charity operated residential care facilities for emotionally
troubled children. Its employees were to do everything that a
parent would do, including intimate duties like bathing and
tucking the child in at bedtime.
●The Charity did reasonable background checks of all its employees.
●The Charity did not know that one of its employees was a
pedophile, because he didn’t have a criminal record or any
charges against him. After investigating a complaint, the
Charity immediately fired him. However, the employee had
already abused a child.
●Is the Charity liable?
IRAC
Issue: Is the Charity liable despite exercise reasonable care in hiring
employees? Rules: If a tort is committed by the employee within the
scope of the employment relationship, then the employer is liable
regardless of employer’s fault.
Analysis: Duties like bathing and tucking the child in at bedtime were
part of the employment relationship.
Conclusion: Yes, the Charity is liable for the abuse committed by the employee
Vicarious liability - another example
●Boys’ and Girls’ Club, a non-profit organization, employed X as a
Program Director.
●The Club required X to supervise volunteer staff and organize
recreational activities for the children and the occasional outing.
●X was encouraged to form friendships and a positive rapport with the children.
●Outside work hours, X committed two sexual assaults against
children he had been introduced to.
●Is the Boys’ and Girls’ Club liable for the torts of X?
IRAC
Issue: Is the Boys’ and Girls’ Club liable despite exercising reasonable
care in hiring employees?
Rule: If a tort is committed by the employee within the scope of the
employment relationship, then the employer is liable regardless of
fault.
Analysis / Conclusion: Either would be acceptable in a test, if reasons given -
Metropolitan University
Case EXAMPLES
Insurance risk question:
●A student sues four of his high school teachers for a total of $15
million. The claim was that each of the four teachers, independent
of one another, sexually abused him while he was a student. Also,
each of these four teachers should have known about the assaults
of the other three teachers and failed to report them to the
authorities.
●The teacher’s insurance policy covers all damages by a teacher
for bodily injury, except that it does not cover any bodily injury
that was intentionally caused by that teacher.
●If the student proves his case in court, must the insurance
company cover damages?
Yes, insurance company liable in negligence
●There will be no insurance for a teacher who intentionally abused the
student. However, if a teacher knew that there was abuse by another
teacher, then that claim would be in negligence for failing to report abuse
that has already happened, and that portion of the claim would be covered
IRAC - use this method on all law tests
1. Issue: Identify the issue the court has been asked to decide
2. Rule(s): State what legal rule(s) in statutes and precedents decided
in similar cases (“stare decisis”) apply to the dispute
3. Application/Analysis: Apply the relevant rule(s) to the facts. Be logical.
,4. Conclusion: Statement of how the issue should be decided
based on the above - give logical reasons - not personal opinions!
Rylands v Fletcher
●The defendants built a reservoir (a pond) on their land.
●When digging, they noticed abandoned mining shafts in the ground
●They exercised reasonable care - hired a competent engineer and contractor.
●They filled their pond with water. Unfortunately, water leaked
through the old mine shafts flooding the plaintiff’s mines which
were downstream.
●Similar to fracking industry - where the gas company fractures
its property with pressurized liquid - even if exercise all
reasonable care, could cause leaking onto neighbour - strict
liability?
Strict Liability in Rylands v. Fletcher - IRAC
Issue: Is the company liable for the leaking even if there is no intention
and they took all reasonable steps to prevent leaking?
Rules: If permit a special danger, then liable even if acted carefully -
Strict Liability.
Analysis: Building a reservoir/pond is a non-natural use of the land.
Conclusion: The company is liable for the leaking regardless of intent
or negligence
, Issue: Is the owner strictly liable for the actions of a domestic pet?
Rules: If permit a special danger to occur, then liable even if acted
carefully. Analysis: Owning a dog, and giving it all available training, is
not a special danger. Many people have dogs without any injury
happening.
Conclusion: The owner is not strictly liable in Tort. Only liable if negligent.
“One Free Bite” - next time, knowing that your dog has bitten a child, you
would be negligent for failing to put a muzzle on your dog.
Vicarious liability case
●A charity operated residential care facilities for emotionally
troubled children. Its employees were to do everything that a
parent would do, including intimate duties like bathing and
tucking the child in at bedtime.
●The Charity did reasonable background checks of all its employees.
●The Charity did not know that one of its employees was a
pedophile, because he didn’t have a criminal record or any
charges against him. After investigating a complaint, the
Charity immediately fired him. However, the employee had
already abused a child.
●Is the Charity liable?
IRAC
Issue: Is the Charity liable despite exercise reasonable care in hiring
employees? Rules: If a tort is committed by the employee within the
scope of the employment relationship, then the employer is liable
regardless of employer’s fault.
Analysis: Duties like bathing and tucking the child in at bedtime were
part of the employment relationship.
Conclusion: Yes, the Charity is liable for the abuse committed by the employee
Vicarious liability - another example
●Boys’ and Girls’ Club, a non-profit organization, employed X as a
Program Director.
●The Club required X to supervise volunteer staff and organize
recreational activities for the children and the occasional outing.
●X was encouraged to form friendships and a positive rapport with the children.
●Outside work hours, X committed two sexual assaults against
children he had been introduced to.
●Is the Boys’ and Girls’ Club liable for the torts of X?
IRAC
Issue: Is the Boys’ and Girls’ Club liable despite exercising reasonable
care in hiring employees?
Rule: If a tort is committed by the employee within the scope of the
employment relationship, then the employer is liable regardless of
fault.
Analysis / Conclusion: Either would be acceptable in a test, if reasons given -
