Test Bank for Business Law and the Legal Environment, 6th Edition: Beatty

Test Bank for Business Law and the Legal

Environment, 6th Edition: Beatty

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CHAPTER 7 - NEGLIGENCE AND STRICT LIABILITY

TRUE/FALSE

1. Palsgraf v. Long Island Railroad Co. addressed the issue of furnishing alcohol to minors.

ANS: F PTS: 1 MSC: AACSB Analytic

2. A landowner's highest duty is owed to licensees.

ANS: F PTS: 1 MSC: AACSB Analytic

3. Courts have ruled that negligently retaining a violent employee is a tort.

ANS: T PTS: 1 MSC: AACSB Analytic

4. A defendant who engages in setting off fireworks at a fully licensed Fourth of July show is liable for
harm that results from the activity only if the plaintiff proves the harm was foreseeable

ANS: F PTS: 1 MSC: AACSB Reflective Thinking

5. Res ipsa loquitur shifts the burden of proof from the plaintiff to the defendant.

ANS: T PTS: 1 MSC: AACSB Analytic

6. The doctrine of contributory negligence is followed in most states.

ANS: F PTS: 1 MSC: AACSB Analytic

7. While hunting, Roger enters Adele’s property without permission and is injured by falling into a ditch
that was obscured by the underbrush. Under the common law, Adele is liable for Roger’s injuries.

ANS: F PTS: 1 MSC: AACSB Analytic

8. Most state legislatures have passed legislation to reimburse crime victims directly through the state
government.

ANS: F PTS: 1 MSC: AACSB Analytic

9. Tort law is not concerned with how to respond to injury caused by criminals, as this would be
addressed by criminal law.

ANS: F PTS: 1 MSC: AACSB Analytic

10. Most states recognize some form of comparative negligence.

ANS: T PTS: 1 MSC: AACSB Analytic

11. Kenneth was exposed to radiation on his job in an environmental cleanup. In a lawsuit against his
employer, the court must decide the full extent of both present and future damages rather than allowing
Kenneth to return to court years later if medical problems develop at that time.
 ANS: T PTS: 1 MSC: AACSB Analytic

12. A sports fan, injured by a hockey puck that flew into the stands during an NHL game, would be
subject to the defense of assumption of the risk in a suit to recover for her injuries.

ANS: T PTS: 1 MSC: AACSB Analytic

13. If the law denies all liability for harm done by tortious or criminal activity, no one will have to pay for
the harm.

ANS: F PTS: 1 MSC: AACSB Analytic

14. Due to dram shop laws, commercial establishments that serve alcohol bear some liability for injuries
caused by their intoxicated patrons.

ANS: T PTS: 1 MSC: AACSB Analytic

15. In a strict liability case, the courts still consider if the defendant acted in a reasonable and prudent
manner.

ANS: F PTS: 1 MSC: AACSB Analytic

16. Silas asks his friend Shelby to come to his property to go fishing at his pond. If he fails to warn her
that the dock has a rotten spot and she falls through and is injured, Silas would be held liable in most
states.

ANS: T PTS: 1 MSC: AACSB Reflective Thinking

17. An economic study has concluded that dram shop laws are effective in reducing underage drinking,
over-intoxicated drinkers and bar employee drunkeness.

ANS: T PTS: 1 MSC: AACSB Analytic

MULTIPLE CHOICE

1. In a negligence case, the plaintiff must establish:

a. duty, strict liability, causation, and injury.
b. mens rea, breach, foreseeable harm, and injury.
c. duty, actus reus, foreseeable harm, and causation.
d. duty of due care, breach, causation, foreseeable harm, and injury.
ANS: D PTS: 1 MSC: AACSB Analytic

2. In most states dram acts apply to:

a. liquor stores, bars, and restaurants but not to social hosts.
b. liquor stores, bars, restaurants and to social hosts.
c. social hosts, liquor stores, and bars.
d. None of the above.
ANS: A PTS: 1 MSC: AACSB Analytic
3. Annette drove through an intersection without looking and hit Vincent's car that he had driven into the
intersection without obeying a stop sign. Annette sued Vincent. The jury found that Annette’s fault
contributed 20 percent to the collision and determined that her total loss was $100,000. Under
comparative negligence, the jury should award Annette:
a. $20,000.
b. $80,000.
c. $100,000.
d. nothing.
ANS: B PTS: 1 MSC: AACSB Reflective Thinking | AACSB Diversity

4. Negligence concerns harm that:

a. is unforeseeable.
b. arises intentionally.
c. arises by accident.
d. is always substantial.
ANS: C PTS: 1 MSC: AACSB Analytic

5. In Hernandez v. Arizona Board of Regents, the court held that individuals who:
a. intentionally provide alcohol to minors can be liable for negligence to injured third parties.
b. intentionally provide alcohol to minors cannot be held liable for negligence to injured third
parties.
c. carelessly provide alcohol to minors can be held liable for damages for resulting injury to
third parties.
d. none of the above.
ANS: C PTS: 1 MSC: AACSB Analytic

6. Bob, a weak swimmer, ignored warning signs in a recreational swimming area and went into deep
water. He soon grew tired and realized that he could not make it back to shore. Seeing Kelly, he cried
out for help. Kelly, however, ignored the pleas. Bob was finally saved by Dorothy, but suffered brain
damage from being submerged during the ordeal. Bob now sues Kelly for negligence for failing to try
to save him. Bob will:
a. prevail because society places a duty on people to help each other and Kelly breached this
duty, resulting in Bob's injury.
b. lose because Kelly had no legal duty to rescue him.
c. lose even though Kelly had a legal duty to save him, since Bob will not be able to prove
that Kelly's failure to act was the proximate cause of his injuries.
d. lose because a reasonable person could not have foreseen that someone in a recreation area
could not swim well.
ANS: B PTS: 1 MSC: AACSB Reflective Thinking

7. One morning, Miles placed a thumbtack on the chair of the office manager where he worked. He had
no quarrel with the office manager, but thought this would be funny. Two days after sitting on the tack,
the office manager was hospitalized with an infection caused by the tack. Which of the following is
correct?
a. Miles actions were negligent.
b. No tort has been committed.
c. Miles committed an intentional tort.
d. Miles is strictly liable.
ANS: C PTS: 1 MSC: AACSB Reflective Thinking
 8. A plaintiff sues in negligence but has no direct proof that the defendant behaved unreasonably. Which
of the following is most likely to help the plaintiff?
a. Res judicata.
b. Stare decisis.
c. Res ipsa loquitur.
d. Mens rea.
ANS: C PTS: 1 MSC: AACSB Analytic

9. Wayne worked in an office. He had no criminal record, had never had a complaint made against him
about his work or his conduct, and had been a faithful employee for nearly 20 years. One day, Wayne
followed his supervisor to his home and fatally shot him. The estate of the supervisor sued the
company, claiming it should have been aware of Wayne's growing frustration with work. The
company's best defense will be that:
a. there was no way to foresee that the incident would happen.
b. the incident occurred away from the office.
c. the killing was the result of a personal conflict between Wayne and the supervisor.
d. even if the company had been aware of Wayne's difficulty with his supervisor, Wayne did
not have any criminal history.
ANS: A PTS: 1 MSC: AACSB Reflective Thinking

10. Which of the following acts resulting in injury would be negligence per se?
a. Janet driving 40 mph over the posted speed limit.
b. Ted keeping explosives in his private, locked garage without complying with state law
regulating the storage of such materials.
c. A retailer selling glue containing benzene to a 14-year-old boy in violation of state law.
d. All the above acts are negligence per se.
ANS: D PTS: 1 MSC: AACSB Analytic

11. Which of the following statements regarding a negligence case is correct?

a. A plaintiff must show that the defendant's act was both the factual cause of her injury as
well as a foreseeable injury.
b. A plaintiff must show that the defendant's act was the factual cause of her injury even if
the injury was not foreseeable.
c. A plaintiff must show that the defendant's act created a foreseeable danger even if it was
not the factual cause of her injury.
d. A plaintiff does not have to show that the defendant's act either created a foreseeable
danger or that the act was the factual cause of her injury.
ANS: A PTS: 1 MSC: AACSB Analytic

12. Under a state law, a dog owner is absolutely liable to any person who is injured by the dog. This is an
example of:
a. negligence per se.
b. strict liability.
c. res ipsa loquitur.
d. negligence.
ANS: B PTS: 1 MSC: AACSB Analytic

13. If a court applies res ipsa loquitur:

a. the plaintiff needs to prove the case by a preponderance of the evidence.
b. the plaintiff must prove the case by clear and convincing evidence.
 c. the defendant has the burden of proving he or she is not liable.
d. the defendant is strictly liable.
ANS: C PTS: 1 MSC: AACSB Analytic

14. Kelley went ice skating on a neighbor’s pond, but she fell through a thin area into icy waters. Kelley
did not have permission to be on the property, and the neighbor did not even know that she was there.
Is the neighbor liable for Kelley’s injuries?
a. Yes. The neighbor should have posted “thin ice” notices.
b. No. Kelley was a trespasser and the neighbor could only be held liable for intentionally
injuring her or for gross misconduct.
c. It may depend on Kelley’s age.
d. Yes, the neighbor is strictly liable.
ANS: C PTS: 1 MSC: AACSB Reflective Thinking

15. Kyle was eating clam chowder soup in a restaurant when a very small piece of bone lodged in his
throat. Fortunately, he was able to remove the bone with his fingers. However, he was upset by the
incident and sued the restaurant for negligence. The most likely result would be:
a. Kyle will not collect any damages since he did not sustain any damages.
b. Kyle will collect damages as bones in chowder are common.
c. Kyle will collect damages if he proves it was possible to prevent tiny fish bones from
being present in clam chowder.
d. Kyle will collect damages, as res ipsa loquitur applies.
ANS: A PTS: 1 MSC: AACSB Reflective Thinking

16. Phillip was waiting for a bus at a bus stop. Across the street and down the block, a mechanic
negligently overinflated a tire he was intending to put onto Marsha’s pickup truck. The exploding tire
injured Marsha and frightened a neighborhood dog, which ran down the street and knocked Phillip
down, injuring his knee. Phillip sued the mechanic. In applying the Palsgraf v. Long Island Railroad
Co. decision to this case, Phillip would:
a. win because the mechanic was negligent in overinflating the tire, which led to Phillip’s
injury.
b. win based on negligence per se.
c. lose because the court would apply the doctrine of res ipsa loquitur.
d. lose because, although the mechanic’s conduct was negligent toward Marsha, it was not a
wrong in relation to Phillip, who was far away. The mechanic could not have foreseen
injury to Phillip and therefore had no duty to him.
ANS: D PTS: 1 MSC: AACSB Reflective Thinking

17. In a comparative negligence state, if the plaintiff in a negligence lawsuit is found to be 30 percent
negligent, the plaintiff would recover:
a. 70 percent of the damages.
b. all of the damages.
c. none of the damages.
d. 30 percent of the damages.
ANS: A PTS: 1 MSC: AACSB Analytic

18. The Supreme Court of California in Wiener v. Southcoast Childcare Centers, Inc.:
a. ruled that it did not matter whether the driver of the vehicle acted negligently or with
criminal intent, the risk of harm from an unsafe fence was the same and defendants had a
duty to make the fence stronger.
 b. required application of a different standard for third-party criminal acts versus acts of
ordinary negligence.
c. determined that foreseeability was not at issue in this case.
d. placed importance on the fact that the child care facility had been the target of violence in
the past.
ANS: B PTS: 1 MSC: AACSB Analytic

19. A customer in a restaurant would be considered ________ to whom the restaurant owner owes a duty
________.
a. a licensee; to warn of known dangers.
b. an invitee; of reasonable care.
c. a social guest; only to avoid intentionally injuring him.
d. none of the above.
ANS: B PTS: 1 MSC: AACSB Analytic

20. Tommie, a six-year-old child, was seriously injured when he stuck a fork into an electrical outlet. His
parents sued the restaurant where the incident occurred, claiming it should have had child protective
guards on the outlets. Whether the restaurant is liable will be dependent upon whether:
a. the incident was reasonably foreseeable.
b. the parents exercised enough supervision of their child.
c. this is negligence per se.
d. this is an ultrahazardous activity.
ANS: A PTS: 1 MSC: AACSB Reflective Thinking

21. Laura, a brain surgeon, committed a negligent act when she ran a red light and injured Randy, a
pedestrian crossing the street. Randy was a mentally impaired adult.
a. The “reasonable person” standard does not apply to Laura since she is an extraordinary
person.
b. Both Laura’s and Randy's conduct will be based on the "reasonable person" standard.
c. The "reasonable person" standard does not apply to Randy since he is mentally impaired.
d. The "reasonable person" standard does not apply to Laura nor Randy given their
respective degrees of extreme intelligence (one high and one low).
ANS: B PTS: 1 MSC: AACSB Reflective Thinking | AACSB Diversity

22. Punitive damages are awarded:

a. for past and future medical expenses.
b. to repay the victim for losses suffered.
c. to punish the defendant.
d. for past and future pain and suffering.
ANS: C PTS: 1 MSC: AACSB Analytic

23. The test of “foreseeability” is generally used to determine the existence of which element of a
negligence case?
a. Duty of due care.
b. Breach.
c. Factual cause.
d. Injury.
ANS: A PTS: 1 MSC: AACSB Analytic

24. Which of the following elements is not necessary to apply the doctrine of res ipsa loquitur?
 a. An ultrahazardous activity is involved.
b. The defendant had exclusive control of the thing that caused the harm.
c. The harm would normally not have occurred without negligence.
d. The plaintiff had no role in causing the harm.
ANS: A PTS: 1 MSC: AACSB Analytic

25. Don was driving his truck when a board fell out of the truck bed and onto the road. Alice, who was
driving closely behind Don's truck, tried to avoid the board, swerved and struck a telephone pole,
causing her severe injuries. Which of the following is correct?
a. Don is strictly liable to Alice for her injuries.
b. In a comparative negligence state, the actions of Don and Alice will be weighed to
determine liability.
c. Don was not negligent in allowing the board to fall out of his truck.
d. Don is engaging in ultrahazardous activity.
ANS: B PTS: 1 MSC: AACSB Reflective Thinking

ESSAY

1. Discuss the concepts of contributory negligence and comparative negligence.

ANS:
Contributory negligence is a defense that can be used by a defendant to avoid liability. Most states
have discarded this concept; however, if allowed, even if the plaintiff were one percent responsible for
the accident, she cannot recover from the defendant. Comparative negligence is used to pro rate each
party's fault in a negligence case. In many states, if the plaintiff is more than 50 percent responsible for
the accident, she cannot recover. If the plaintiff is 50 percent or less responsible, she is allowed to
collect relative to her degree of fault. Thus, if the plaintiff were 30 percent responsible for her accident
and sustained $100,000 worth of injuries, she could recover $70,000 (70 percent) from the defendant.

PTS: 1 MSC: AACSB Communication

2. List and discuss the elements necessary to establish negligence.

ANS:
For there to be a successful lawsuit for negligence, five elements must be established: duty of due care,
breach, factual cause, foreseeable harm, and injury. Duty is the responsibility to use reasonable care
not to injure others around you. If the defendant could foresee that his misconduct would injure a
certain person, he has a duty to that person. Normally, there is no duty to avoid the injury of others
through nonconduct, unless there is a special relationship. Breach is conduct that fails to meet the
standard of reasonable care imposed if there is a duty to the injured party. Factual cause requires that
the defendant's conduct, at least in part, actually caused the injury. Foreseeable harm requires that the
risk of harm was reasonably foreseeable and not so remote or bizarre that a reasonable person would
never have expected it to happen. And finally, injury: the plaintiff must have suffered injury to his or
her person or property to recover. The injury must be genuine, not speculative.

PTS: 1 MSC: AACSB Communication

3. Mavrex, Inc. received an application from Larry and, since his written qualifications seemed to meet a
pressing current need, they hired him without checking his references or prior records. Actually, Larry
had been in prison for murder several years earlier. Tom, a long-time Mavrex employee, angered Larry
when Tom tried to tell Larry how to do his job. Larry attacked and injured Tom. If Tom sues Mavrex,
what would his cause of action be, and what elements would Tom need to prove to win his case?
 ANS:
Tom’s cause of action would be negligent hiring. Companies can be liable for hiring or retaining
violent employees. The company should check records, including criminal records, and contact
personal references before hiring employees. To win a case in negligence, Tom would need to prove
five elements: a duty of care on the part of Mavrex to Tom, a breach of this duty, factual cause,
foreseeable harm, and injury. The test for a duty of care is generally “foreseeability.” If the defendant
could have foreseen injury to a particular person, there is a duty to him. To prove the second element
of negligence, breach of duty, courts apply a reasonable person standard. The third element, factual
cause, means that Mavrex’s conduct actually caused Tom’s injury. The fourth element, foreseeable
harm, means it was foreseeable that conduct like Mavrex’s might cause the type of harm that did
result. The fifth element, injury, means that Tom actually has been hurt.

PTS: 1 MSC: AACSB Communication | AACSB Reflective Thinking

4. In negligence cases the courts often refer to the term "reasonable person." What is meant by this term?

ANS:
The reasonable person is used to establish the standard of conduct of an average person under the same
circumstances. It is, in essence, a benchmark for proper conduct of a person under a given factual
pattern. For example, if a person claims he accidentally backed his car into the path of an oncoming
car, the jury will decide if the tortfeasor/defendant acted "as a reasonable person" backing his car out
of a parking space into a traveled roadway. The jury will ask itself, "what would the reasonable person
have done or not done in such a situation?" A reasonable person would slowly back up, look carefully
to see if cars were coming, and be driving in an attentive manner. Thus, the defendant's conduct is
measured against what a reasonable person would have done if she had been in the same situation as
the defendant.

PTS: 1 MSC: AACSB Communication

5. A contractor used dynamite to loosen a rocky hillside. The blast from the dynamite caused a house
foundation to crack. The house was located over a half-mile away from the dynamite site. The
contractor was careful when using the dynamite and no allegation of negligence is made. However, the
house owner claims the contractor is liable for damage to the foundation. Is the house owner correct?
Explain.

ANS:
Yes. The contractor is liable under the concept of strict liability. Generally speaking, strict liability,
also known as liability without fault, applies if a person engages in dangerous activity that results in
damage to property or personal injury. The homeowner does not have to prove duty, breach, or
foreseeable harm. The fact that a person was very careful in carrying out the dangerous activity is not
relevant. The only issue is whether the dangerous activity was the direct cause of the property damage
or personal injury. In essence, strict liability is a trade-off, allowing for people to engage in dangerous
activity but at the same time requiring them to be totally responsible if a person sustains damages as a
result of that activity. It is incumbent on the person to obtain sufficient liability insurance if he is going
to engage in dangerous activity so he will be able to provide proper compensation to any person
damaged by the activity.

PTS: 1 MSC: AACSB Communication | AACSB Reflective Thinking

Test Bank for Business Law and the Legal Environment, 6th Edition: Beatty

6. On Monday, Travis took his four-wheeler to Reppart’s Equipment & Service for repair because the
steering was not working properly. On Friday he called Reppart’s to see if his four-wheeler was ready
because he wanted it for a weekend trip. Reppart’s said they had done the major repairs but that the
steering system still needed some work and they needed another few days to finish the repairs. Travis
told them he would pick the four-wheeler up and use it for the weekend and then bring it back to have
them finish their work. While riding with friends on the weekend, Travis ran into someone because the
steering stuck and he couldn’t swerve to avoid them. Discuss how a court would determine causation
in a negligence suit against Travis.

ANS:
Courts look at two issues to determine causation: Was the defendant’s behavior the factual cause of the
harm? Was this type of harm foreseeable?

If Travis’s breach of duty physically led to the ultimate harm, it is the factual cause. Since Travis knew
the repairs were not completed, his unreasonable behavior in using the four-wheeler was the factual
cause of the harm to the plaintiff.

For Travis to be liable, the type of harm must have been reasonably foreseeable. Travis could easily
foresee that a bad steering system could cause an accident while he was riding. He need not have
foreseen the exact results, but he could foresee the general type of harm involving defective steering.
Therefore, in this case the factual cause and foreseeable harm elements of a negligence suit against
Travis would have been met.

PTS: 1 MSC: AACSB Communication | AACSB Reflective Thinking

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