Where a Negligence Harms a Business (For Example, a Factory

question 51

Multiple Choice

Where a negligence harms a business (for example, a factory set on fire) , Common Law courts award damages to replace it, but have been reluctant to go further and award damages for economic losses (for example, lost profits from downtime) . How do Quebec courts differ in their treatment of negligence?

• A) Quebec courts willingly award punitive damages but are less willing to award costs.
• B) Quebec courts are much less willing than Common Law courts to award punitive damages.
• C) There is little distinction between damages, and full restitution is required.
• D) B and C are true.
• E) A and C are true.

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Definitions:

Mixed Cost

A cost that contains both variable and fixed cost elements, making its total expense vary with changes in the level of output.

Fixed Cost

Expenses that do not fluctuate with changes in production volume, staying constant even as production levels vary.

Liability Insurance

A type of insurance that protects an individual or business from the risk of being sued and held legally liable for something such as malpractice, injury, or negligence.

Step-Variable Cost

A cost that remains fixed for a certain level of production or activity, but jumps to a higher amount once a certain threshold is exceeded.