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If Claus Inc. can demonstrate it was not negligent, what can it conclude regarding its liability?

  1. It is liable for the damages.

  2. It is not liable for the damages.

  3. It should negotiate a settlement.

  4. It must seek arbitration.

The correct answer is: It is not liable for the damages.

When Claus Inc. demonstrates that it was not negligent, it effectively shows that it took reasonable care and acted in accordance with the standard expected under similar circumstances. In legal terms, liability for damages often hinges on the presence of negligence; if a party can prove it operated without negligence, it typically follows that the party should not be held responsible for resulting damages. This principle is foundational in tort law, where negligence entails a failure to meet the legal standard of care, leading to harm. If Claus Inc. can prove a lack of negligence, it aligns with the legal defense that there is no basis for liability, meaning the business is not responsible for the damages claimed. This conclusion supports the notion that sound practices and adherence to obligations can shield a company from being held liable under tort law, allowing Claus Inc. to move forward without the financial burdens of the claimed damages.