Fact Scenario:

The EVP Operations/Supply Management of KLM Burgers Inc., was approached by one of her managers who explained a particular situation that took place about three weeks ago. She described the following:a customer (Mordor) proceeded through the drive through and ordered a KLM double cheeseburger, large fries and strawberry shake combo and a fried apple pie for dessert - yummy! Mordor then proceeded from the drive through with his order and entered into the intersection. About 4.8 km away from the KLM store, he was involved in a serious accident with a minivan, causing death to two passengers and serious injury to the three other passengers. The passengers in the minivan were a family of five, and both parents were killed. They were not insured, but Mordor was insured. It is unclear at this point who or what exactly caused the accident, but with the knowledge that your manager had, fingers were pointing at Mordor.

Just as she was finishing describing the sad situation, your colleague, the EVP/General Counsel approached the EVP Operations about a demand letter that he had just received. In the letter, a local law firm was claiming that KLM somehow played a part in Mordor's accident (described above). The lawyer representing the surviving children was alleging that KLM should have known that customers ordering food through its drive through service would very likely be 'distracted drivers'. With that knowledge, the demand letter also alleged that KLM owed a duty of care to every other driver/passenger that Mordor would have encountered and that, but for its negligence, this accident would never have happened. The letter stipulated a pre-lawsuit demand of CAD $15,000,000.00.

Assignment:

1. As the EVP Operations/Supply management and the General Counsel have asked you to draft a memo clearly stating the test that courts use to analyze the tort of negligence as to a finding of liability. As you work through the three-part test, please provide your analysis as to whether KLM Burgers will be found liable for the accident that occurred and any other extenuating factors that you considered.