CAIB 3 CHECKPOINTS
CHECKPOINTS - CHAPTER 1 - SECTION 1
The Law - An Introduction
1. As society evolved, two separate systems of law emerged. Discuss the primary role of:
(a) Criminal Law: The primary focus of criminal law is on punishing the person(s) responsible
for the crime.
(b) Civil Law: Civil law is concerned with civil or private rights and remedies, as contrasted with
criminal law which deals with wrongs against society.
2. Civil Law deals with wrongs originating in tort law or contract law.
(a) Identify the kinds of wrongs falling within tort law for which compensation may be
provided by the courts.
The kind of torts for which compensation may be provided by the courts include intentional torts
and unintentional torts.
(b) A breach of contract may result in a civil action against an insured. Provide an
example of a “breach of contract”.
Example: when a building contractor elects to quit a project before completing work agreed to in
a legal contract, legal action may be initiated by the owner for breach of contract.
3. Identify the two main bodies of law relating to both criminal and civil matters.
Two main bodies of law relating to both criminal and civil matter:
1) common law
2) statute law
4. Outline the underlying principles which govern the administration of the following
bodies of law:
(a) Common Law: In Common Law, the basic concept is that current court decisions must
follow those made in cases having similar circumstances. This custom of standing by previous
decisions is known as the Rule of Precedent.
(b) Statute Law: Statute Law is written law enacted by federal or provincial legislation. It
amends or supersedes the common law.
The Matter of Damages
,5. (a) Of the different kinds of tort damages awarded by the courts, which are most
important in ensuring that victims are able to withstand the financial consequences of
their losses?
Compensatory Damages are the most important in ensuring victims are able to withstand the
financial consequences of the loss.
(b) What purpose is served in the awarding of such damages?
Purpose: are intended to compensate the injured party for the bodily injury or property damage
sustained.
Note: The answer to 5(b) really forms a part of question 5(a) and, for this reason, this question
(b) is redundant.
6. When there is a breach of contract and payment of damages is seen as inadequate for
the circumstances, what other options are available to the courts in dealing with such
breaches?
When there is a breach or failure to fulfill contractual obligations, the courts may rule in the
following manner:
- provide for payment of damages to the injured party
- enforce specific performance of the terms of the contract
- grant an injunction prohibiting a party to the contract from performing certain acts, or
ensuring a party to the contract performs certain acts
- permit rescission of the contract so as to return the parties substantially to their pre-contract
positions.
CHECKPOINTS - CHAPTER 1 - SECTION 2
Commercial or Business Liability Exposures
1. Negligence is one of the important torts affecting a business’s potential for a liability
suit against it. Negligence must be proven. Identify the three conditions which must be
present before the court will be satisfied that the tort of negligence has been committed.
1) the defendant owned the plaintiff a legal duty of care
2) the duty was breached as a result of the defendant's negligence
3) the plaintiff suffered damages as a proximate result of the defendant's negligence
2. The Doctrine of Strict Liability changes the way in which one’s responsibility for a
wrong is viewed by the court. Discuss.
,The Doctrine of Strict Liability is 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 legally liable.
3. Although brokers are often involved in the interpretation of insurance contracts, what
advice should be given to the client who asks specific questions concerning matters of
law?
Clients should be referred to a qualified legal practitioner.
4. Occupiers may be held financially responsible for bodily injury or property damages to
third parties. What factor is critical when determining if one is an occupier?
The status of "occupier" is not dependent on ownership of the premises, but rather is based on
who has control over the premises.
5. The common duty required of Occupiers’ Liability Acts focuses on the duty of care to
be provided by occupiers to those who actually enter onto their premises. Discuss the
extent of the duty owed.
The common duty owed is a duty to take such care as in all the circumstances of the case is
reasonable to see that the visitor will be reasonably safe in using the premises for which he is
invited or permitted by the occupier to be there or is permitted by law to be there.
6. The liability of occupiers is limited in certain instances. Discuss the law respecting:
(a) The liability of a tenant or building owner (principal) when injury or damage to others
is caused by an independent contractor performing work on the premises;
A tenant or owner will not be liable for the negligence of an independent contractor if it can be
shown:
-that reasonable care was exercised in the selection of the independent contractor;
-it was reasonable that the work the independent contractor was engaged to do should have
been undertaken.
However, the tenant or owner will share in any liability arising out of the negligence of an
independent contractor:
- when the work being contracted is inherently dangerous;
- when injury or damage results from the contractor’s use of defective fixtures, machinery
or equipment supplied by the principal;
- when the principal controls the manner in which the work is to be done.
Note: in this context, principal refers to the one who does the hiring.
(b) The liability of a landlord for injuries caused to a tenant and others on the premises.
Landlords liability re:
(i) single occupancy buildings - for injuries to tenants or their customers caused by the
unsafe conditions of the premises;
, Exceptions:
-landlord fails to notify tenants of dangerous conditions they were aware of, or ought to have
been aware of, that existed at the time the lease was made;
-if landlord covenants to make repairs and fails to do so after receiving notice of the danger.
(ii) multiple occupancy buildings - landlord is responsible to the tenant and others only for
the condition of areas common to all occupancies.
7. A products liability claim cannot originate on the premises of the premises of the
person supplying the defective product. What conditions must have present for a
products liability suit to be successful?
A products liability claim can arise only when it is shown that the injury or
damage:
-occurred away from the premises of the seller; and
-occurred after the seller had clearly relinquished possession of the defective product.
8. Identify the parties having the right to claim damages for injuries sustained through
the use of the seller’s product when the action alleges:
(a) Breach of contract: Only the person who actually purchased the defective product and who
was injured by it is entitled to sue for breach of contract.
(b) Tort of negligence: All users of defective products are entitled to sue manufacturers for
their negligence when the use of such products results in injury or damage.
9. What effect did the 1932 decision re: Donaghue v. Stevenson have on the way in which
the law viewed the responsibility of manufacturers for their products?
As a result of this decision, the responsibility of manufacturers for their negligence was
extended to the ultimate users of their products . . . i.e.) manufacturers are liable in tort for
damages caused when their products are most likely to be used without immediate examination.
10. State three duties of manufactures.
Duties to consumers include:
- manufacturers are liable for all product defects of which the present state of technology
can reasonably be expected to make them aware. The manufacturer has a duty to
ensure:
- safe design ;
- safe manufacture, construction, assembly and packaging.
- even when a product is not defective, there may be dangers if it is not properly used.
The manufacturer owes a duty to consumers to:
- give proper warning of dangers which can occur in using the product;
- provide instructions, if needed.
11. State two duties of sellers.
CHECKPOINTS - CHAPTER 1 - SECTION 1
The Law - An Introduction
1. As society evolved, two separate systems of law emerged. Discuss the primary role of:
(a) Criminal Law: The primary focus of criminal law is on punishing the person(s) responsible
for the crime.
(b) Civil Law: Civil law is concerned with civil or private rights and remedies, as contrasted with
criminal law which deals with wrongs against society.
2. Civil Law deals with wrongs originating in tort law or contract law.
(a) Identify the kinds of wrongs falling within tort law for which compensation may be
provided by the courts.
The kind of torts for which compensation may be provided by the courts include intentional torts
and unintentional torts.
(b) A breach of contract may result in a civil action against an insured. Provide an
example of a “breach of contract”.
Example: when a building contractor elects to quit a project before completing work agreed to in
a legal contract, legal action may be initiated by the owner for breach of contract.
3. Identify the two main bodies of law relating to both criminal and civil matters.
Two main bodies of law relating to both criminal and civil matter:
1) common law
2) statute law
4. Outline the underlying principles which govern the administration of the following
bodies of law:
(a) Common Law: In Common Law, the basic concept is that current court decisions must
follow those made in cases having similar circumstances. This custom of standing by previous
decisions is known as the Rule of Precedent.
(b) Statute Law: Statute Law is written law enacted by federal or provincial legislation. It
amends or supersedes the common law.
The Matter of Damages
,5. (a) Of the different kinds of tort damages awarded by the courts, which are most
important in ensuring that victims are able to withstand the financial consequences of
their losses?
Compensatory Damages are the most important in ensuring victims are able to withstand the
financial consequences of the loss.
(b) What purpose is served in the awarding of such damages?
Purpose: are intended to compensate the injured party for the bodily injury or property damage
sustained.
Note: The answer to 5(b) really forms a part of question 5(a) and, for this reason, this question
(b) is redundant.
6. When there is a breach of contract and payment of damages is seen as inadequate for
the circumstances, what other options are available to the courts in dealing with such
breaches?
When there is a breach or failure to fulfill contractual obligations, the courts may rule in the
following manner:
- provide for payment of damages to the injured party
- enforce specific performance of the terms of the contract
- grant an injunction prohibiting a party to the contract from performing certain acts, or
ensuring a party to the contract performs certain acts
- permit rescission of the contract so as to return the parties substantially to their pre-contract
positions.
CHECKPOINTS - CHAPTER 1 - SECTION 2
Commercial or Business Liability Exposures
1. Negligence is one of the important torts affecting a business’s potential for a liability
suit against it. Negligence must be proven. Identify the three conditions which must be
present before the court will be satisfied that the tort of negligence has been committed.
1) the defendant owned the plaintiff a legal duty of care
2) the duty was breached as a result of the defendant's negligence
3) the plaintiff suffered damages as a proximate result of the defendant's negligence
2. The Doctrine of Strict Liability changes the way in which one’s responsibility for a
wrong is viewed by the court. Discuss.
,The Doctrine of Strict Liability is 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 legally liable.
3. Although brokers are often involved in the interpretation of insurance contracts, what
advice should be given to the client who asks specific questions concerning matters of
law?
Clients should be referred to a qualified legal practitioner.
4. Occupiers may be held financially responsible for bodily injury or property damages to
third parties. What factor is critical when determining if one is an occupier?
The status of "occupier" is not dependent on ownership of the premises, but rather is based on
who has control over the premises.
5. The common duty required of Occupiers’ Liability Acts focuses on the duty of care to
be provided by occupiers to those who actually enter onto their premises. Discuss the
extent of the duty owed.
The common duty owed is a duty to take such care as in all the circumstances of the case is
reasonable to see that the visitor will be reasonably safe in using the premises for which he is
invited or permitted by the occupier to be there or is permitted by law to be there.
6. The liability of occupiers is limited in certain instances. Discuss the law respecting:
(a) The liability of a tenant or building owner (principal) when injury or damage to others
is caused by an independent contractor performing work on the premises;
A tenant or owner will not be liable for the negligence of an independent contractor if it can be
shown:
-that reasonable care was exercised in the selection of the independent contractor;
-it was reasonable that the work the independent contractor was engaged to do should have
been undertaken.
However, the tenant or owner will share in any liability arising out of the negligence of an
independent contractor:
- when the work being contracted is inherently dangerous;
- when injury or damage results from the contractor’s use of defective fixtures, machinery
or equipment supplied by the principal;
- when the principal controls the manner in which the work is to be done.
Note: in this context, principal refers to the one who does the hiring.
(b) The liability of a landlord for injuries caused to a tenant and others on the premises.
Landlords liability re:
(i) single occupancy buildings - for injuries to tenants or their customers caused by the
unsafe conditions of the premises;
, Exceptions:
-landlord fails to notify tenants of dangerous conditions they were aware of, or ought to have
been aware of, that existed at the time the lease was made;
-if landlord covenants to make repairs and fails to do so after receiving notice of the danger.
(ii) multiple occupancy buildings - landlord is responsible to the tenant and others only for
the condition of areas common to all occupancies.
7. A products liability claim cannot originate on the premises of the premises of the
person supplying the defective product. What conditions must have present for a
products liability suit to be successful?
A products liability claim can arise only when it is shown that the injury or
damage:
-occurred away from the premises of the seller; and
-occurred after the seller had clearly relinquished possession of the defective product.
8. Identify the parties having the right to claim damages for injuries sustained through
the use of the seller’s product when the action alleges:
(a) Breach of contract: Only the person who actually purchased the defective product and who
was injured by it is entitled to sue for breach of contract.
(b) Tort of negligence: All users of defective products are entitled to sue manufacturers for
their negligence when the use of such products results in injury or damage.
9. What effect did the 1932 decision re: Donaghue v. Stevenson have on the way in which
the law viewed the responsibility of manufacturers for their products?
As a result of this decision, the responsibility of manufacturers for their negligence was
extended to the ultimate users of their products . . . i.e.) manufacturers are liable in tort for
damages caused when their products are most likely to be used without immediate examination.
10. State three duties of manufactures.
Duties to consumers include:
- manufacturers are liable for all product defects of which the present state of technology
can reasonably be expected to make them aware. The manufacturer has a duty to
ensure:
- safe design ;
- safe manufacture, construction, assembly and packaging.
- even when a product is not defective, there may be dangers if it is not properly used.
The manufacturer owes a duty to consumers to:
- give proper warning of dangers which can occur in using the product;
- provide instructions, if needed.
11. State two duties of sellers.
