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Liability Basics

Practice questions on liability basics for the casualty exam, each with an answer and explanation.

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Study questions and answers

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1. Which of the following must be proven for a claimant to recover damages on the basis of negligence?

  1. A written contract between the parties
  2. A legal duty, a breach of that duty, actual damages, and a causal connection between the breach and the damages
  3. Intent to cause harm
  4. A criminal conviction of the defendant
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B. A legal duty, a breach of that duty, actual damages, and a causal connection between the breach and the damages
Negligence requires a legal duty owed, a breach of that duty, damages, and proximate cause linking the breach to the damages. Intent and a conviction are not required.

2. A civil wrong, other than a breach of contract, for which a court will award damages is called a:

  1. Felony
  2. Misdemeanor
  3. Tort
  4. Warranty
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C. Tort
A tort is a civil wrong committed against a person or property, other than a breach of contract. Crimes such as felonies are wrongs against society.

3. A store owner fails to clean up a spilled liquid for several hours, and a customer slips and breaks a wrist. The owner's failure to act as a reasonably prudent person would is best described as:

  1. Negligence
  2. An intentional tort
  3. Strict liability
  4. Vicarious liability
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A. Negligence
Failing to use the care a reasonably prudent person would use under the circumstances is negligence. No intent to harm is involved.

4. Under which legal doctrine can a person be held liable for injuries caused by an inherently dangerous activity, such as blasting, even if every reasonable precaution was taken?

  1. Comparative negligence
  2. Absolute (strict) liability
  3. Assumption of risk
  4. Last clear chance
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B. Absolute (strict) liability
Absolute or strict liability applies to ultrahazardous activities and certain products, so the defendant is liable without proof of negligence.

5. An employer is held responsible for an accident caused by an employee driving a company truck on a delivery. This is an example of:

  1. Contributory negligence
  2. Res ipsa loquitur
  3. Vicarious liability
  4. Assumption of risk
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C. Vicarious liability
Vicarious liability makes one party, such as an employer, responsible for the negligent acts of another, such as an employee acting within the scope of the job.

6. A surgical sponge is found inside a patient after an operation. The patient may rely on which doctrine, meaning the thing speaks for itself, to shift the burden to the defendant?

  1. Res ipsa loquitur
  2. Respondeat superior
  3. Stare decisis
  4. Caveat emptor
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A. Res ipsa loquitur
Res ipsa loquitur applies when the injury would not normally happen without negligence and the defendant had exclusive control of what caused it.

7. In a state that follows pure contributory negligence, a claimant who is found 10 percent at fault for an accident will recover:

  1. 90 percent of the damages
  2. Nothing
  3. 50 percent of the damages
  4. All of the damages
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B. Nothing
Under pure contributory negligence, any negligence by the claimant bars recovery entirely, even a small share.

8. A claimant suffers $100,000 in damages and is found 30 percent at fault in a state using pure comparative negligence. How much can the claimant recover from the other party?

  1. $30,000
  2. $100,000
  3. $70,000
  4. Nothing
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C. $70,000
Pure comparative negligence reduces the award by the claimant's share of fault, so $100,000 less 30 percent is $70,000.

9. Under a modified comparative negligence rule that bars recovery when the claimant is 50 percent or more at fault, a claimant found 60 percent at fault will recover:

  1. 40 percent of the damages
  2. 60 percent of the damages
  3. All of the damages
  4. Nothing
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D. Nothing
Modified comparative negligence bars recovery once the claimant's fault reaches the stated threshold. At 60 percent fault, this claimant recovers nothing.

10. A spectator at a baseball game is hit by a foul ball after knowingly sitting in an unscreened area. Which defense might the ballpark use against a negligence claim?

  1. Assumption of risk
  2. Vicarious liability
  3. Absolute liability
  4. Res ipsa loquitur
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A. Assumption of risk
Assumption of risk is a defense when the claimant knew of a danger and voluntarily accepted it.

11. Damages that compensate an injured person for measurable losses such as medical bills and lost wages are called:

  1. Punitive damages
  2. Special damages
  3. General damages
  4. Nominal damages
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B. Special damages
Special damages are specific, measurable out-of-pocket losses. General damages cover things like pain and suffering that cannot be measured exactly.

12. Damages awarded to punish a defendant for gross negligence or willful misconduct, rather than to compensate the injured party, are called:

  1. Special damages
  2. Compensatory damages
  3. General damages
  4. Punitive damages
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D. Punitive damages
Punitive (exemplary) damages are meant to punish and deter. Many liability policies and some states limit or exclude coverage for them.

13. Compensation for pain and suffering, disfigurement, or loss of companionship falls under which type of damages?

  1. General damages
  2. Special damages
  3. Punitive damages
  4. Liquidated damages
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A. General damages
General damages compensate for losses that are real but hard to put an exact dollar figure on, such as pain and suffering.

14. Which doctrine allows a negligent claimant to recover if the defendant had the final opportunity to avoid the accident and failed to do so?

  1. Assumption of risk
  2. Intervening cause
  3. Last clear chance
  4. Comparative negligence
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C. Last clear chance
Under the last clear chance doctrine, the party who had the last chance to avoid the accident may be held liable even if the other party was also negligent.

15. In addition to the policy limit, a liability policy typically pays the cost to defend the insured against a covered suit. This defense cost is generally:

  1. Subtracted from the stated limit of liability
  2. Paid only if the insured wins the suit
  3. Paid in addition to the limit of liability
  4. Shared equally by the insured and insurer
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C. Paid in addition to the limit of liability
In standard personal auto and most liability forms, defense costs are paid in addition to the limit of liability, and the duty to defend ends when the limit is used up by payment of judgments or settlements.
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