Liable

### What does it mean to be liable? - [ ] To possess something valuable. - [ ] To be given special privileges. - [x] To be legally responsible or obligated. - [ ] To receive a reward for good behavior. > **Explanation:** To be liable means to be legally responsible or obligated for something. This can include contractual obligations, statutory duties, or negligence. ### Which of the following is an example of statutory liability? - [ ] A company failing to deliver goods. - [ ] An individual injuring another in an accident. - [x] A business violating environmental regulations. - [ ] A store providing excellent customer service. > **Explanation:** Statutory liability arises when a business or individual violates laws or regulations imposed by governmental bodies, such as environmental regulations. ### How is liability typically determined in a legal case? - [ ] By a random selection process. - [ ] Through public opinion. - [x] By a court or legal authority based on presented facts and evidence. - [ ] By the liable party's consent. > **Explanation:** Liability is generally determined by a court or legal authority based on the evidence and facts presented in a legal case. ### Which term refers to clauses that excuse one party from liability or fault? - [ ] Nonrecourse - [x] Exculpatory - [ ] Indemnity - [ ] Warranty > **Explanation:** Exculpatory clauses are those that excuse one party from liability or fault, often included in contracts to limit one party's legal obligations. ### What is the main difference between liability and responsibility? - [ ] Responsibility is always enforceable by law. - [ ] Liability has no legal consequences. - [ ] Responsibility can be ignored without consequences. - [x] Liability specifically refers to a legal obligation with potential legal consequences. > **Explanation:** Liability pertains to legal obligations and carries legal consequences, while responsibility may not necessarily involve legal aspects. ### Which type of liability can arise even without intent to harm? - [ ] Contractual liability - [x] Tort liability involving negligence - [ ] Statutory liability - [ ] All liabilities > **Explanation:** Tort liability involving negligence can arise without intent to harm, as it is based on the failure to exercise reasonable care resulting in injury or damage. ### What can businesses do to limit their exposure to liability? - [x] Purchase liability insurance and include exculpatory clauses in contracts. - [ ] Ignore laws and regulations. - [ ] Avoid fulfilling contractual obligations. - [ ] Refuse to engage in legal agreements. > **Explanation:** Businesses can limit their exposure to liability by purchasing liability insurance and including exculpatory clauses in contracts to manage and mitigate potential legal risks. ### Can a person be held liable for the actions of another? - [x] Yes, if they had a duty to control the other person’s actions. - [ ] No, liability is always personal. - [ ] Yes, but only in cases of criminal actions. - [ ] No, only organizations can be held vicariously liable. > **Explanation:** A person can be held liable for the actions of another if they had a duty to control the other person's actions, such as in cases of employer-employee relationships. ### What is nonrecourse financing? - [ ] Financing where the borrower has no obligations. - [ ] A type of financing with unlimited repayment options. - [x] Financing where the lender can only claim the collateral. - [ ] A loan with no interest rates. > **Explanation:** Nonrecourse financing is where the lender can only claim the collateral and has no further claim on the borrower’s other assets if the borrower defaults. ### When can liability insurance be most beneficial? - [x] When facing potential lawsuits or claims for damages. - [ ] When investing in the stock market. - [ ] When selling personal belongings. - [ ] When moving to a new house. > **Explanation:** Liability insurance can be beneficial in situations where there is a risk of lawsuits or claims for damages, providing financial protection against potential legal actions.