MEE - Flashcards (All Subjects)
What is the authority of agent to bind principal?
Can do if agent acting within actual / apparent authority or inherent agency power
What is apparent authority?
o P holds out A has having authority AND
o P’s conduct reasonably causes a third party to rely on A’s appearance in dealing.
o DOES NOT exist if third party has knowledge A doesn’t have actual authority
What is the contract liability of a partnership?
o Partnership bound by actions of every partner made in ordinary course of business to carry on partnership business
UNLESS
§ Acting partner has no authority
§ Other party has knowledge that partner lacks authority
When does the dissolution of a partnership occurs?
o Dissolution occurs:
§ Actions taken by partners
§ Operation of law
§ Court order
o Followed by the winding up phase to complete the partnership’s affairs
§ Partner’s actual authority is limited to what’s necessary to wind up
§ Partner may still have apparent authority if the other party doesn’t have notice
What is the duty of care of directors/officers of a corporation?
D/O Duty of care includes:
§ Reasonable steps to monitor management
§ Act in the best interests of the corporation
§ Disclose material information
§ Make reasonably informed decisions
What is the Best Jugement Rule?
BJR applies when D/O allegedly breached the duty of care.
Courts will not second guess D/O if decisions are made:
§ In good faith
§ With the care of an ordinarily prudent person AND
§ D/O reasonably believes the decision is in the best interests of the corporation.
What are shareholder derivative claims?
Brought by a shareholder on behalf of the corporation
o Sometimes have to make the demand 90 days in advance, but not if futile
o Damages go to the corporation unless they would benefit defendants, then to the shareholder
What is a partner’s duty of loyalty?
o Requires that partners
§ Act in good faith/fairly towards others
§ Account for property, profit, and benefit derived from partnership business/property
§ Refrain from
· Competing in scope of partnership business
· Usurping partnership opportunity
o Personally liable on breach
How is a general partnership formed?
o 2 or people
o As co-owners
o Decide to carry on business for profit
When does a director/officer have a conflict of interest with respect to transactions?
o D/O has conflicting interest when D/O or family member either:
§ Is party to transaction OR
§ Has beneficial financial interest of such significance it would reasonably be expected to exert influence on D/O in a vote
What is a safe harbor (CORPORATIONS)
§ Approval of disinterested shareholders
§ Approval of disinterested board members
§ Transaction is fair to the corporation
When does “piercing the corporate veil” occur?
o Courts allow creditors to PCV and hold shareholders personally liable if:
§ Alter ego
§ Failure to follow corporate formalities
§ Undercapitalization
§ Fraud/illegality
What is diversity jurisdiction?
o Complete diversity
o AIC exceeds $75k
What is Federal question jurisdiction?
o Complaint alleges complaint that arises under federal law
o Well pleaded complaint rule: cannot be a defense or counterclaim
How is citizenship is determined for diversity purposes?
o Individuals: domicile
o Corps: place of incorporation or PPB (Principal Place of Business)
o Unincorporated associations: anywhere the member is located
o Class actions: citizenship of named parties
Where is Venue proper?
o Venue proper where:
§ Any D resides if all Ds reside in a state
§ Substantial part of events/property giving rise to claim located
§ If neither, than anywhere D is subject to PJ
Where is the residence for venue purposes?
§ Individuals: domicile
§ Businesses: where subject to PJ
§ Foreign: anywhere
What are the traditional bases for personal jurisdiction?
o Court must have PJ to adjudicate rights/liabilities of D
o Traditional bases
§ Domicile
§ Physical presence
§ Consent
§ Waiver
When can use long-arm statutes be used?
Need minimum contacts thru:
§ General jx - d “at home” in the forum state or
§ Specific jx - D’s contact gives rise to claim AND
· Purposeful availment
· Reasonable to be “haled into court”
§ Exercise of jx does not offend traditional notions of fair play and substantial justice considering
· Convenience for D
· State’s legitimate interest
· P’s interest proper
· Efficiency
· Social policies
When can a federal court exercise supplemental jurisdiction in the context of FEDERAL QUESTION?
o FQ: can hear pendent state law claim if same trans/occurrence as fed law claim
When can a federal court exercise supplemental jurisdiction in the context of DIVERSITY JURISDICTION?
§ Compulsory counterclaims: arises out of same trans/occurrence - has jx
§ Permissive counterclaims: does not arise out of same trans/occurrence - jx only if AIC met independently
§ Cross claims between same side parties: arises out of same trans/occurrence - has jx
What are the procedural requirements for a Motion for Summary Judgment?
o Any time until 30 days after close of discovery
o Must be granted if when viewing in a light most favorable to nonmovant, appears that
§ No genuine dispute of material fact
§ Moving party entitled to judgment as a matter of law
o Can be partial
o Denial not appealable
What happens to change of venue when venue is PROPER?
Court:
§ Can transfer for convenience to anywhere it could have originally been filed
o Choice of law
· Diversity: transferor court law
· Fed q: transferee court’s fed court of appeals
What happens to change of venue when venue is IMPROPER?
Court:
§ Dismiss
§ Transfer anywhere it could have originally been filed
Choice of law
· Diversity: transferee court law
· Fed q: transferee court’s fed court of appeals
What is Removal?
o Allows D to move to fed court if it could have been originally filed there
o Must be sought within 30 days by D only
o Fed Q: can remove if complaint discloses fed law
o Diversity: need complete diversity, AIC, and action brought in state where no D is citizen
What is the Erie doctrine?
o Fed court sitting in diversity must apply the law of the forum state in which it sits, not its own fed law, regarding SUBSTANTIVE issues
o Can apply fed law for PROCEDURAL issues
Note: COL (Conflicts of Law) is substantive - must apply forum states COL rules
What is the Vested rights approach in COL?
Apply the law of where the event that gave rise to the suit occurred;
Apply the law of where the injury occurred, and where K was formed
Governmental interest approach in COL?
o apply law of jx that has greater interest considering
§ Policies behind respective laws in forum and other jx
§ Whether it is reasonable for jxs to assert interest in application of policies under the circumstances
Most significant relationship approach in COL?
o apply law of jx with most significant relationship to issue considering:
§ Relevant policies of forum/other jx
§ Relevant policies of law at issue
§ Uniformity of result and
§ Ease of application of law to be applied
K consideration:
§ Where K formed
§ Where negotiated
§ Place of performance
§ K subject matter location
§ Connection to forum
Torts considerations:
§ Place of injury
§ Place where conduct causing injury occurred
§ Connection of parties to forum
§ Place where relationship b/w parties is
What are the rules for Collateral estoppel (ISSUE PRECLUSION)?
Mnemonic SAFE:
o Same issue
o Actually litigated
o Final judgment
o Essential to prior judgment
What are the rules for Res judicata (CLAIM PRECLUSION)?
Mnemonic PAM:
o Parties sufficiently identical
o Action sufficiently identical
o Merits decided
What are the Conflict of Laws rules for decedent’s estates?
o Personal property: disposition governed by law of jx of decedents domicile
o Real property: disposition governed by jx of where property located
What are the Conflict of Laws rules for Contracts?
o Used for interpretation purposes
o If matter re: K validity or formation, parties may choose which law applies only if
§ Jx has some connection to K
§ COL not contrary to substantial policy interest of another jx with greater interest
What is Full faith and credit?
Courts must give FFC to judgments of of other states unless there is any of the following defenses:
§ Lack of jx
§ Fraud
§ Not on merits
§ Lacking finality (NOT FINAL JUDGMENT)
When is State action required?
o State action required to trigger individual constitutional protections
o When state action exists in cases of private parties:
§ Private party exercises activities traditionally performed exclusively by the state OR
§ There are sufficient mutual contacts between the conduct of a private party and the government
What is the State sovereign immunity (11A)?
o Jurisdictional bar that prohibits:
§ Citizens of a state/foreign country from suing another state in federal court AND
§ Suits in fed court against state officials for violating state law
o Exceptions:
§ Consent
§ Injunctive relief against state official D
§ Individual damages w/ personally liable state official D
§ Congressional authorization
What is the dormant commerce clause?
o If Congress has not acted re: area of interstate commerce, states can as long as the action does not:
(1) Discriminate against out-of-state commerce
(2) Unduly burden interstate commerce OR
(3) Regulate wholly out-of-state activity
o Exceptions:
(1) State acting as a market participant
(2) Legislation favors gov’t entities performing a traditional gov’t function OR
(3) Congress explicitly permits
