Answer:
C) The state is liable because of Reliable's negligent failure to take the special precautions required for conducting a highly dangerous or inherently dangerous activity.
Step-by-step explanation:
Even though the state of Indiana hired Reliable Construction Company for doing the job and the contract was very specific about Reliable's obligations, the state government should have controlled that Reliable actually carried out its obligations properly.
In this case, it was reasonable foreseeable that the failure to control Reliable's job could result in personal or property injury. So the state should have exercised control over how the work was done. The respondeat superior doctrine does not apply because Reliable was an independent company hired by the state government to perform a specific contract, it was not an agent (or employee).