Risk Management and Liability Flashcards

A statute of repose differs from a statute of limitations in that it:

Answer: Bars claims after a fixed period from project completion, regardless of when harm is discovered

A statute of repose sets an absolute deadline measured from the completion of work or a product's sale, cutting off claims even if the injury has not yet been discovered.

When a licensee acts outside the scope of their license or authority, the resulting liability exposure is best described as:

Answer: Ultra vires acts creating personal liability

Acting ultra vires — beyond the scope of one's licensed authority — can expose the individual to personal liability and potential license disciplinary action.

Which element is NOT required to establish a negligence claim?

Answer: Intent to cause harm

Negligence does not require intent to harm; the four elements are duty, breach, causation, and damages — intent is required for intentional torts, not negligence.

A property owner's liability to a trespasser is generally:

Answer: Limited to avoiding willful or wanton injury

Property owners owe trespassers only a duty to refrain from willful, wanton, or intentional injury, which is the lowest standard on the landowner liability spectrum.

A licensee's failure to maintain required continuing education could result in which risk management consequence?

Answer: License suspension exposing the licensee to unlicensed practice liability

Failing to complete required CE can lead to license suspension or revocation, and performing services without a valid license creates unlicensed practice liability.

Which contractual provision specifies the maximum monetary damages a party may recover in the event of a breach?

Answer: Limitation of liability clause

A limitation of liability clause caps the maximum amount a party can recover, often limiting damages to the contract price or a fixed dollar amount.

A licensee who knowingly assists a client in structuring a transaction to conceal illegal activity faces liability under:

Answer: Anti-money laundering statutes and potential criminal charges

Knowingly participating in or facilitating transactions designed to conceal illegal proceeds violates federal and state anti-money laundering laws and can result in criminal prosecution.