July 2019 Flashcards
Validity of will
The first issue is whether the will is valid because it was executed in State A, which does not recognize holographic wills. To be valid, a will normally must be made by someone over the age of 18, signed by the testator, evince testamentary intent, and be attested to by two witnesses. However, some states recognize holographic wills, which permit wills to be admitted to probate when the material portions of the will are in the testator’s handwriting with the testator’s signature on the document. Here, the State B statute also requires that the will be dated. Additionally, a testator’s will is valid if it is valid in the state where it was executed, in the state where the testator is domiciled at death, or where the property to be disposed of under the will is located
Limiting language
The next issue, also pertaining to validity, is whether the limiting language, “Given that I might die on the trip to City,” means that the will lapsed after Testator safely returned home after the trip, or if the testamentary intent continued after the testator’s return. Generally, one’s motive for making a will is not a factor that courts take into account. Limiting language in a will can restrict the duration of a will’s validity, but only if there is a clear intent to do so. Courts often construe such limiting language as lasting beyond the shorter duration stated in the will, particularly where the testator did not make any later testamentary instruments because the limited duration will is likely what the testator would have intended for the distribution of his or her estate even if he or she did survive the duration listed in the will.
Bequests
The will devised the other half of Testator’s estate to John’s “delightful wife of many years.” One issue that this language raises is whether the gift should pass to John’s new wife, Nancy, because of the general language in the will. A Testator can include in a will bequests that are conditioned on acts of independent significance, meaning that the acts are separate and apart from simply devising the testator’s property. But where the language in the will identifies a specific person, that will not be construed as devising property conditioned on an act of independent significance. Additionally, extrinsic evidence is permissible to resolve an ambiguity if that ambiguity is latent, meaning that it is not readily identifiable from reading the language of the will, even though the will is clear about who should take the property.
Anti lapse
Even so, Martha predeceased Testator, so the final issue is the effect of her death. Under the common law, when a beneficiary of a will predeceases the testator, the beneficiary’s gift lapses. Statutes in States A and B, called anti-lapse statutes, prevent this result by providing that a predeceasing beneficiary’s surviving issue take the predeceasing beneficiary’s share under the will. Normally, anti-lapse statutes require some degree of blood relation for the anti-lapse statute to apply, but that does not appear to be the case here. Martha has two issue, her children, and so because she predeceased the testator, her share will pass to her two children under the anti-lapse statute. Note that it makes no difference if a court construes the will as simply providing a residuary clause – residuary interests do not pass to the other residuary beneficiary unless the gift lapses altogether
Miranda rights
The court did not err by denying the defendant’s motion to suppress the woman’s March 15 statements to the detective as a result of interrogating the woman on March 15 after she invoked her Miranda right to counsel on February 4. The issue is whether the detective violated the defendant’s Miranda rights by not waiting longer before questioning her again. Miranda rights protect against police misconduct during custodial interrogations. The United States Constitution’s 5th Amendment Miranda rights are applied to the states through the 14th Amendment’s due process clause. Generally, the police must cease all questioning after the interrogation suspect has invoked his or her right to counsel. The police must scrupulously honor defendant’s request. In scrupulously honoring the request, courts will apply the 14 day rule. This rule states that the police cannot question a suspect about the same crime until 14 days after the time of the custody. The time of custody references the time that the interrogation subject was under custody for questioning about that particular crime
Sufficient miranda
The court did not err by denying the defendant’s motion to suppress the woman’s March 15 statements to the detective as a result of incorrectly conveying to the woman her Miranda right to counsel by the statements he made on March 15. The issue is whether the statements the detective made on March 15 were sufficient Miranda warnings such that the woman completely understood her rights. Generally, the police need not convey the Miranda rights (1) to remain silent (2) to an attorney using exact language (as seen in police television shows) as long as the substance of the Miranda rights are properly conveyed.
Invocation of right to counsel
Finally, the court did not err in denying the defendant’s motion to suppress the woman’s March 15 statements to the detective after she improperly invoked her right to counsel on March 15. The issue is whether the woman’s statements on March 15 properly invoked her right to counsel. An invocation of the right to counsel must be clear and unambiguous. The police have no duty to encourage the interrogation suspect to be clear and unambiguous. Further, an interrogation suspect may waive her Miranda rights if it is done knowingly and voluntarily. Here, the detective properly provided all the information about the right to counsel that the woman asked for. Further, the woman said “I might need a lawyer” to which the detective replied “that’s your call”. This statement by the woman was not a clear and unambiguous statement because it was qualified by the word “might”. The woman then knowingly and voluntarily waived her Miranda rights by checking the boxes and signing the waiver form. Thus, the woman did not properly invoke her right to counsel and knowingly and voluntarily waived her Miranda rights. The woman’s confession is therefore valid. As a result, the court did not err in denying the defendant’s motion to suppress on all three counts.
Business Judgment rule
Parent likely did not breach any duties to HomeSolar with respect to HomeSolar’s no- dividend policy. At issue is whether the business judgment rule will apply so as to presume that Parent acted within their duty of care.
The board of directors of a corporation owe the corporation various fiduciary duties. One such duty is the duty of care. This requires the directors to discharge their duties in good faith, with the care of a reasonably prudent person acting in similar circumstances, and with the reasonable belief that they are acting in the best interests of the corporation. Along with this duty of care, courts have stated that a business judgment rule applies such that the directors are afforded a rebuttable presumption that they met their duty of care. Thus, a court will uphold the board’s decisions in accordance with the duty of care so long as the presumption is not rebutted.
Shareholders’ suit
The shareholder of HomeSolar bringing suit alleges that in its SEC filings, HomeSolar has explained that its no-dividend policy provides funds for research and development as it seeks to develop new products for the residential solar power market. Although HomeSolar has adequate earnings to pay dividends to its shareholders, it has not done so since being acquired by Parent three years ago. However, the decision to distribute dividends is solely within the board’s discretion. Because Parent controls the boards of its subsidiaries, including HomeSolar, it is within Parent’s discretion when to distribute dividends. Here, there is a valid reason given in the SEC filing for not offering distributions - namely, the company seeks to use its funds to develop new products. This decision by the board not to make distributions is a rational business reason and will be protected by the business judgment rule. There is no evidence that Parent is acting in bad faith or against the interests of HomeSolar. Consequently, the presumption that the board acted in accordance with its duty of care has not been rebutted based on these facts.
Fiduciary duties
Parent breached its duty of loyalty to HomeSolar with respect to HomeSolar’s contract with SolarMaterials. At issue is whether Parent self-dealed such that it breached its duty of loyalty to HomeSolar.
As noted above, the board of directors owe fiduciary duties to a corporation. In addition to the duty of care, the directors owe a duty of loyalty to the corporation such that they act fairly towards the corporation and do not “self-deal” and enter into any transactions in which there is a conflict of interest. If the board self-deals, the duty of loyalty will be breached unless the action is approved by a majority vote of disinterested directors after full disclosure of material facts, is approved by a majority vote of disinterested shareholders after full disclosure of material facts, or the transaction is fair to the corporation
Duty of loyalty
Parent likely has not breached any duties to HomeSolar by denying HomeSolar the opportunity to apply for the government grant. At issue is whether Parent has usurped a corporate opportunity from HomeSolar such that it has breached its duty of loyalty.
The rules relating to the duty of loyalty are listed above. In addition to self-dealing, directors may breach the duty of loyalty by usurping a corporate opportunity that was in the corporation’s line of business. The corporation must have had an expectancy in the opportunity in order for the duty to be breached. If the directors do obtain a corporate opportunity, in order to avoid breaching their duty of loyalty, they must first present it to the corporation and wait for the corporation to reject it before acting upon it.
Contracts for services
The owner of the movie theater is entitled to $50,000 damages above the amount paid to the substitute contractor.
The issue is the appropriate measure of damages. Contracts are governed either by common law or the UCC. Contracts for services are governed by common law, whereas contracts for the sale of goods are governed by the UCC. Because this is a service contract which calls for the installation of theater chairs, this is a contract governed by common law.
Under common law, parties to a contract must substantially perform their duties. Before a party has performed, there is the possibility that will not perform under the contract. If a party to a contract unequivocally informs the other party that he will not perform under the contract, this amounts to an anticipatory repudiation and is treated as a breach. The nonbreaching party has the option to sue for damages immediately, or wait until the time for performance to be due to sue under the contract.
Goal of K law
When a party breaches, the goal of contract law is to place the nonbreaching party in the position that they would be had the contract been performed, as expectation damages. However, the nonbreaching party also has a duty to mitigate damages in order to reduce the total liability.
If the contractor had performed as required, the owner would have paid $100,000 for movie seats. However, because the contractor breached, the owner had to pay $150,000 for movie seats. Thus, under the expectation damages theory, the owner is entitled to $50,000 from the contractor, because this is the amount that would put him in the position he expected to be in if the contractor had performed.
Consequential damages
The owner likely will not be able to recover for lost profits resulting from the cancellation of the film festival. The issue is whether the damages suffered as a result of this cancellation were foreseeable.
Consequential damages are an additional form of damages that are available for breach of contract. Under consequential damages, the non-breaching party is entitled to additional damages that were suffered as a result of the breach, as long as the reason for the damages was known to the breaching party and such damages were foreseeable.
Duty to mitigate
The issue is whether the owner had a duty to mitigate. Parties have a duty to mitigate damages, thereby reducing the amount for which the breaching party is liable.
