Which of the following is representative of the policy rationale with regard to the remoteness test?
A) to compensate the appropriate party for decreased risk
B) to encourage the purchase of liability insurance coverage
C) to avoid unlimited liability for consequences of breach
D) to prevent one party from turning down the prospective job

Question

Quizplus · Accepted Answer

The policy rationale behind the remoteness test is to avoid unlimited liability for the consequences of breach. The test determines whether the loss suffered by the plaintiff is too remote to be recoverable from the defendant. The purpose of the test is to limit a defendant's liability to losses that are reasonably foreseeable and thus avoid liability for any consequence, no matter how remote.

Option A is not correct because the remoteness test is not designed to compensate a party for decreased risk.

Option B is not correct because the remote test is not related to encouraging or discouraging the purchase of liability insurance coverage.

Option D is not correct because the remote test is meant to determine liability and doesn't have anything to do with a job offer.

Which of the Following Is Representative of the Policy Rationale