Final review Flashcards
Note
2-party negotiable instrument - maker & payee Maker promises to pay sum of $ to payee
Draft
3 party negotiable instrument Drawer order second party (drawee or payor) to pay sum of $ to 3P payee
Reqs for negotiability (7)
- Writing
- Signed by maker/drawer (or authorized agent)
- Unconditional promise or order (BUT can refer to other doc re: collateral, prepayment, down payment, acceleration)
- Fixed amount of $
- Payable to order or bearer (order - IDs person to be paid or his order; bearer - person in posession, no payee ID’ed)
- Payable on demand or at definite time
- No additional undretaking or instructions
Holder
Issuance - delivery by M/D to either holder or nonholder for purpose of giving rights therein
negotiation - delivery by person other than M/D to another who consequenty becomes holder
- Bearer instr - only requires transfer of possession
- order insr. - requires transfer of posession and indorsement by holder
- Special, blank, qualified, restrictive, anomalous
Holder in due course
- holder
- for value (give, do or forgive something of value)
- in good faith - honesty in fact, reasonable commerical standard of FD
- without notice of infirmatives (Ex: claim, defense, apparent forgery, alternation, overdue, dishonored)
Exclusions: Successor interest to estate, bankruptcy/creditor’s sale, bulk transctiosn
Transfer
Delivery by person othern than M/D for purpose of giving recepient right to enforce
*Shelter rule - transferee can acquire HDC’s rights by transfer even if not HDC
Transfer warranties
Transferor warrants:
- Entitled to enforce
- signtures are authentic and authorized
- No alterations
- No defenses/claims against transferor
- M/D/D not subject to insovlency (knowledge qualifer)
Must be consideration for above to apply
Instrument indorsed - covers all subsequent transferees
Instrument not indorsed - covers just the first one
Can disclaim unless it’s a check
Enforcement of instument
PF case - P is entitled to enforce and signatures are valid
D response - prove defense or claim in recopument
P resposne - reestablish right by proving HDC –> not subject to defenses
Lost, detsroyed, stolen instruments
- Must prorve terms and right to enforce instrument when it was L/S/D
- wasn’t a result of transfer or lawful seizure
Real defenses (9)
- incapacity
- infancy
- duress
- illegality
- fraud (factum only)
- discharge in insovlency
- alteration/forgery
- SOL (3 years)
- accomdation party
Personal defenses (5)
- issuance
- contract defenses
- claim in rcoupment (offset against amoutn owed)
- defenses/claims in recoupment of other persons
- claims to instrument
Unauthorized sigantures
generally ineffective against person whose named was signed
imposters: misrepresent as agents of payee - may be effective as indorsement of actual payee
fictitious/unintended payee: M/D doesn’t intend person ID’ed as payee to have interest in instrument, or just fictitious payee –>
- person in possessoin is its holder
- indosement by anyone in anem of payee may be effective
Presentment
demand for payment made to maker (note) or drawee (draft) by person entitled to enforce
Presentment warranties
Payee warrants to drawee (person cashing check warrants to bank):
- warrantor is (or was at time of transfer) entitled to enforce draft (for himself or on behalf of someone else)
- No alterations
- no knowledge of unathorized signature (of drawer)
Can’t be disclaimed if it’s a check
Dishonor
failure by drawer or maker to pay w/i required time after presentment (either day after due date or day of presentment)
Liability
issuer - primary liability
drawer - secondary liability
drawee - no liabiltiy unless accepts draft
acceptor - primary liablity upon acceptance
indorser - secondary liability (requires both dishonor and notice thereof) BUT can disclaim (“without recourse”) with signature
joint signers - J&S liability
Accomodation parties
Surety, guarantor - can’t receive direct benefit
Collection guaranteed v. payment guaranteed
Can enforce contribution against accomodated party, latter cannot enforce against former
Signatures by agents - Agent liability
Authorized - principle liable regardless of how agent signed
unauthorized - P not liable unless ratification or estoppel
Signatures by agents - Agent’s liability
Unauthorized/exceeds authority - liable in P’s capacity to person takes for value/pays in GF
Authorized:
- P’s name only - not liable
- Agent’s name & capacity - not liable
- Agent’s name only or no capacity - liable to HDC who takes w/o notice that agent wasn’t intended to be personally liable
- Agent’s name on P’s check - not liable
Payment
instrument paid when payment made by party obliged to pay to person entiteld to enforce (holder or someone who lost/had it stolen)
Types of payment
- provisional
final (can’t be recovered from person who took in GF, for value and detrimentally relied on payment)
Payment by mistake - drawee can recover draft amount or revoke acceptance if acted on mistaken belief (other than GF/FV exception)
Discharge
elimination of personal liablity on instrument (personal defense)
- instrument itself - not discharged
- underlying obligation - suspended until paid/dishonored
- payment - discharge if made to person enetitled to enforce
- tender of payment - governed by contratt law
- cancellation or renunciation - voluntary act no to sue
- secondary obligors - person entitled to efnorce release obligation of P obligor
Collateral - impairment
If there is secondary obligor and person entitled to enforce instrument has impaired value of interest in collateral, secondary O’s interest is discharged to extent of impairment
accord and satisfaction
When claim is unlquidted or otherwise in dispute, can be discharged if
preson against whom claim is asserted in GF:
- tenders instrument WITH written statement that 1) has conspicious statement re: tender in full staisfaction of claim and 2) claimant obtains actual payment
Defeasible present fees
Potentionally last forever, termiante by occurence of event; alienable/defeasible/devisable
- FS deterimable (so long as, while, during)
- G has possibility of reverter
- FS subject to condition subsequent (upon condition that, provided that, but if)
- G has right to terminate, must specifically retain right to reeenter)
- FS subject to exec interest - limited by specific durational/conditional language
- automatically terminates upon event and title goes to 3P
- Exec interest held by 3P
Life estate
present posssessory estate trasnferable during measuring life (unless measured by grantee’s life, then not devisable/descendible)
- right to possess
- right to rent/lease/sell/mortgage
- duty to not commit waste
future interests
- reversion
- possiblity of reverter
- right of reentry
- remainder - 1) vested = no CPs, ascertainable grantee (unless class gift), 2) contingent - unascerteainable grantee, subject to express P
- executory interests - shifting = estate shifts from one grantee to another upon condition occuring; sprining = divests G’s interest or fills gap in possesion –> reverts to G
* 4 and 5 can be transferred IV and devisiable/descendible
TIC
TIC (default in FL if estate going to 2+ people)
- unity of possession
- No ROS
- each co-T hold undivided interest, rights to possess whole
- D/D
JT
- Need express language
- alienable (but not D/D)
- PITT (unities): equaly right to possess whole, w/ identical equal interests, created at same time, by same title
Landowner can create one for himself and someone else in single deed but need specific langauge
TBE
- Need PITT
- Married couple
- can’t alienate/encumber property w/o consent
- transfer by 3P creates TE; can also create when title-holdingsposue conveys deed to either other spouses or both of them
Concurrent estates - Rights/obligations of Ts
- Right possess entire proprety, no rent required
- Liable to other co-Ts for 3P rents
- collect contribution for operating expenses
- compel other co-Ts to share expenses for repairs if 1) necessary, 2) other co-T seeks accoutning/parition
- no right to reimbursemt for improvements
- duty of fair dealing wit hother co-Ts but not fiduciary duty
TIC and JT can unliaterally partition - courts like partition in kind
Tenant duties
- Pay rent (unless premises destroyed or material LL breach –> T’s enjoyment substantially impaired)
- avoid waste
- repair (see commerical leases)
LL remedies
- noncompliance for at least 7 days
- failure to pay rent
- resdiential T must pay w/i 3 days
- Nonresidential - L can file action to recover possession, but if he accepts late rent then considered waiver
LL duties
- deliver actual physical possession
- repair
- warranty of habitability (residential - must be fit for basic human habitiation; comply with applicabile cides, maintain essential of home)
- Coveannt of quiet enjoyment
Covenant of quiet enjoyment
No interference from LL in T’s enjoyment
L’s duty to control other tenatns’ nuisance in commons areas
Breach can equal eviction
- actual eviction - lease terminated when LL excludes T from premises
- partial - T must pay reasnoable rental avalue if partial evictio nby 3P with superior claim
- constructive - substantial interfeernece caused by L’s actions/failure to; T must vacate premises if gives notice and LL fail to fix
- Retaliatory
Assignment/sublease
Assignment -complete transfer of T’s remaining lease term
- Assignee liable to LL for rent/covenants due to privity of estate
sublease - transfer for less thaen entire duration
- not liable for rent/covenants to LL becuase no privity of estate or contrct with LL (unless assumes covenants)
Original T liable for covenants due to privity of contract
Doctrine of boundary acquiescence
(re: “hostile” for adverse possession)
- uncertainty/dispute re: true boundary
- location of boundary line btween parties
- acquiescence in location for 7 years
Deeds - delivery
G must intend to make prsent transfer of propret interest to grantee
Intent can usually equal delivery
Transfer to G’s agent - not delivery; transfer to grantee’s agent - delivery
Deeds reqs (5)
- identifies parties
- G’s signature
- words of transfer
- reasonably definition description of property (can look to extrinsic evidence)
- 2 subscribing witnesses
General warranty deed
present covenants:
- seisen - G owns land as dsecribed
- right to convey - has righ tto transfer title
- against encumbrances - no undeclared Es against land
future covenants:
- quiet enjoyment - no 3P lawful claims outstanding, won’t be disturbed once in possession
- warrany - G will defend against 3p claim
- further assurances - G will take reasonably necesaary action to pass title if title defect later appears
Special warranty deed
same as general warranty but only w/r/t defects arising during time G had title
Quitclaim deed
No covenants of title
Express easements
Affirmatively created in writing satisfying SOF, by grant or reservation
Implied easements
Necessity
- person grants land w/ no accessible ROW
- no other reasonable ingress
- necessary for use and enojyment
- unity of title
Statutory way of necessity - rural land to be used by otherwise shut off by land, fencing, improvements. Owner should be compensated
Implication
- easement previously used on servient estate
- was continous, apparent and reasonably necessary to demoninant estate
- common ownership
- existed at severance
Easement by Estoppel
GF, reasonable, detrimental reliance on permission by servient esetate holder, meant to prevent unjust enrichment
no easements by oral promise - can create irrevocable license instead
Negative easement
LASS
- Light
- Air
- Support
- Stream water
Must be expressly created in writing signed by G
Termination (6 ways)
- Release (SOF)
- merger - when 2 estates merge
- Severance = attempt o convey easement app. separate from benefitted land
- abandonment - affirmative act showing clear intent to abandon (mere statement is insufficient)
- destruction/condemnation
- express easement not recorded against BFP (unenforceable, not really terminated)
License
- privilege to enter another’s land
- freely reovcable unless estoppel
- no SOF
- invalid oral easements –> irrevocable license
Real covenants (running w/ land) (5)
- writing (SOF)
- intent - explicit language or implied from TOC
- touch/concern - benefit or burden affects promisee/promisor as owners of land
- notice (burden only)
- privity
- horizonal (burden) - estate and covenant in same instruemnt
- vertical (benefit) - mutaul/successive interest in land that’s B/B’ed by covenant
Equitable servitude
- in writing
- intent for restrcition to be enforceable against successors
- touch/concern (no prvity)
- if enforced against purchaser, need notice
Termination of equitable servitudes (5)
- release
- merger
- abandoment
- estoppel
- condemnation
Common interest ownership
individually own units burdened by covenant to pay association providng services, enforcement (HOAs, cooperatives)
Powers: levy assessments, manage/acquire/improve property adpot rules, enforce rules of governing docs
Zoning
void regulations - no authority; aribitrary/irrational
types: use, devleopment, special concerns
existing non-conforming property: can be grandfathered in, can be transferred, can’t be expanded
post-ordinance non-conforming: can request special excpetio npermit or admin variance
- need to show unnecessary unique hardship, not self-induced, variance wound’t cause susbtantial harm
Other zoning
- by contract (permits - promises)
- floating (not linked to paritcular area)
- cluster (zoning reqs considered as whole, not lot by lot)
- planned unit development (focus on entirety, not plots)
Water rights
- riparian - proprety closest to watercourse, can’t be transferred without land
- prior appropriation - determined by priority of beneficial use, can be transferred separately from land
Support rights
right to have land supported in natural state
lateral - landowner who excavates on his own land -
- undeveloped - strictly liable for damage to undeveloped adjoining land
- imrpovement - strictly liable if adjoining land would have collasped in undeveloped state
- improvement contributes to collapse - only liable if negligent
subjacent - owner of mineral rights is SL for failure to supprt land and any buildings on land at time rights were conveyed
Termination of offers
- lapse of time (specified, or reasonable if none stated)
- death/mental incapacity - unless option K becuase consideraetio nwas paid to keep open
- destruction/illegality
- revocation - any time prior to acceptance (even if it states will remain open for specific amount of time)
Limitations on revocation
- option K - need consideration usually to be enforceable
- UCC firm offer - irrevocable (reasonable time but no more than 90 days) if: 1) offeror = merchant, 2) assurance (in writing) made that it will remain open. No consideration needed
- promisorry estoppel - offeree reasonably/detrimentally rlies on offer
- partial performance - for all Ks, offeree must know of offer when beings performance
- unilateral K - can’t revoke once offeree begins performance
- bilateral K - beginning preformance = promise to render complete performance
Accepteance - shipment of goods
If B requests shipment = accepteance either by S’s promise to ship or prompt shipment
Nonconforming goods shipped = acceptance and breach, unless S notifies B tht good are accomation (counteroffier). B can accept or reject
Notice of acceptance
Acceptance - Bilateral and Unilateral Ks
Bilateral - exchange of promises --> both enforceable
Unilateral - promise to do something in rerturn for act (performance) by other party.
- If party doing starts to perform, keeps offfer open for time to complete performance
Additional/differnet terms
Mirror-image rule
UCC:
no merchants or one merchant only - definite/timely express of acceptance usualyl acceptance of offer; new/different terms treted as proposed additions to be accepted separately by offeror
b_oth merchants_
additional terms automatically included in K unless:
- materially alters original
- expressly limits acceptance to new terms
- offeror objects w/i reasonable time
Different terms - knock out rule
Consideration - Preexisting duty
CL - doesn’t qualify as consideration unless
- promisor gives something new
- preexisting duty changes in some way
- party promises to 3P to perform act already obligated to perofrm under another K
Modifications
CL - need new consideration. Enforceable if:
- rescission of existing K and entry into new one
- unanticipated difficulties arise and mod is fair & equitable
- both parties’ obligations change
UCC - just need GF, no consideration
Accord & satisfaction
accord: one party agrees to accept different performance from other party to staisfy existing duty
Satisfaction - performance of accord agreement => discharges both original and accord K
Illusory promise
Nonbreaching party must have ability to sue for damages and collect on judgment to have real K
Requirements and Output Ks
Requirements - B agrres to buy all that he requires
Output - S agrees to sell all she manufactures
Consideration = promisor’s legal detriment
Material benefit rule
If party performs unrequested service, can can enforce promise of payment for material benefits to extent necessary to prevent injustice