CAIB 3 FINAL EXAM 2026/2027 QUESTIONS
AND CORRECT ANSWERS GRADED A+
Identify two activities that impose strict liability on the person conducting the
activity.
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?
The defendant has the right to establish a defense against an action alleging strict
liability.
What determines if a product is defective?
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.
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.
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
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.
, NOT COVERED - REFERENCE: Ch. 2, pg. 10
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 received a $3,000 bill for a dental procedure from a customer who
broke a tooth when she bit on a piece of bone in the pizza she had consumed at the
pub. The customer had informed the server of the incident
COVERED - REFERENCE: Ch. 2, pg. 3, 5
The Commercial General Liability Policy does not respond to claims against the
insured for bodily injuries sustained by employees while performing the duties of
their job.
State the underlying reason for this exclusion.
Because most employees are covered under the provincial Workers' Compensation
Plan. Coverage is provided on a no fault basis.
What options are available to the insured to cover this exposure?
To purchase Employer's Liability coverage or voluntarily enrol all employees
under the provincial Workers' Compensation Plan.
AND CORRECT ANSWERS GRADED A+
Identify two activities that impose strict liability on the person conducting the
activity.
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?
The defendant has the right to establish a defense against an action alleging strict
liability.
What determines if a product is defective?
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.
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.
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
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.
, NOT COVERED - REFERENCE: Ch. 2, pg. 10
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 received a $3,000 bill for a dental procedure from a customer who
broke a tooth when she bit on a piece of bone in the pizza she had consumed at the
pub. The customer had informed the server of the incident
COVERED - REFERENCE: Ch. 2, pg. 3, 5
The Commercial General Liability Policy does not respond to claims against the
insured for bodily injuries sustained by employees while performing the duties of
their job.
State the underlying reason for this exclusion.
Because most employees are covered under the provincial Workers' Compensation
Plan. Coverage is provided on a no fault basis.
What options are available to the insured to cover this exposure?
To purchase Employer's Liability coverage or voluntarily enrol all employees
under the provincial Workers' Compensation Plan.
