MEE RULES Flashcards
Duty of Loyalty in Agency Relationship
An agent it was a principal a duty of loyalty, including a duty not to compete with the principal, not to usurp opportunities, no self-dealing, and no secret profits.
When is an agent personally liable on a contract?
When the principal is partially or fully undisclosed.
Intentional torts of an agent
A principal will generally not be held liable for the intentional torts of an agent unless the tort occurred during an attempt to serve the principal’s interest.
Law governing the validity of a marriage
The validity of a marriage is generally governed by the law of the state where the ceremony took place, unless another state has the most significant relationship with the marriage (the domicile of the parties) and a marriage violates a strong public policy of the other state.
Which state law governs in a contracts case
Absent a choice of law provision, courts will generally use the most significant relationship approach: the forum that has the most meaningful relationships to the issues and the parties involved in the case.
Which state law governs in a tort action
Many states apply the law of the place where the tort was committed.
Piercing the corporate veil (definition)
Courts disregard the separate entity of the corporation and hold the shareholders liable on the corporation’s obligations
Business Judgment Rule
There is a rebuttable presumption, that shields directors from liability and insulates their decisions from review, that directors are honest, well-meaning, and acting through decisions that are informed and rationally undertaken in good faith.
Shareholder’s right to inspection
To exercise a right to inspect the corporate books, the shareholder must submit a written request to the secretary of the corporation to inspect the books, stating the purpose of the inspection.
Factors courts look to in Piercing the corporate veil
Alter ego, Inadequate Capitalization, Failure to comply with corporate formalities.
Cumulative votes vs Straight votes
Cumulative votes: each share has as many votes as there are directors to be elected.
Straight: each share has one vote for each director.
10-b5 Insider Trading
An insider who learns of material, non-public information cannot use that information to earn secret profits by trading on it prior to public disclosure.
Divorce proceedings jurisdiction
The Constitution requires domicile of one of the parties as the basis for a state court to exercise divorce jurisdiction. Subject matter jurisdiction is established over the marital status by virtue of the domicile of one of the parties within the state at the time of filing the action.
Rule for Custody (and change in custody)
Custody and visitation will be determined according to the bus interests of the child. The prevailing view is that a court may modify a custody order upon proof of a material and substantial change in the circumstances such that a change in custody will be conducive to the best interests of the child.
Premarital agreements (definition & enforceability)
Premarital agreements are contracts made by the parties in contemplation of marriage, generally attempting to alter or extinguish the property and support rights. Premarital agreement will be enforceable if the basic contract formation rules have been satisfied (voluntary), there was procedural fairness (adequate financial disclosure), in the terms of the agreement are substantively fair.
Requirements for common law marriage
Expression of intent, cohabitation, holding out, capacity
Putative Marriage
A court grants divorce like remedies to a putative spouse at the dissolution of their relationship even though the marriage is void because of a flaw in the marriage formation process.
Separate property states
In separate property states the spouse with the legal title to property is the legal owner. Neither spouse has a vested interest in property over which they do not have formal title. During the ongoing marriage there is no marital property.
Liability of General Partners
Generally, all partners are liable for the debts of the partnership incurred by any partner in the ordinary course of business
Prima Facie evidence of a partnership
Receiving a share of the profits is prima facie evidence that someone is a partner. However, if they do not participate in control of the business, they are likely an agent.
A security interest attaches when…
- value is given, 2. debtor has rights in the collateral, 3. Security agreement that adequately describes the collateral is authenticated by the debtor.
A security agreement must include…
- granting language, 2. description of the collateral, 3. authenticated by the debtor. *must be in writing
Perfection in proceeds continues for twenty days unless
- there is a filed financing statement and the proceeds are collateral which can be perfected by filing, and are not acquired by cash proceeds.
- the proceeds are identifiable cash proceeds
- the security interest is otherwise perfected when the SI attaches to the proceeds.
Buyer in the ordinary course of business
- buys in good faith
- buys without knowledge
- buys in the ordinary course of business from a person selling goods of that kind
Right to redeem must occur before
- the collateral has been collected
- the SP has disposed of the collateral, or
- the secured party has accepted the collateral as satisfaction
Spendthrift provision (trusts)
precludes a beneficiary from voluntarily transferring his interest in the trust and creditors from reaching that interest
Prudent investor rule
trustee shall invest and manage the trust assets as a prudent investor would, by considering the purposes, terms, distribution requirements, and other circumstances of the trust, while exercising reasonable care, skill, and caution
A Totten trust
a bank account held with a named beneficiary who will receive the contents on the owner’s death
The trustee of a constructive trust has only one duty…
to convey the property to the beneficiary
Intent to create a trust
the settlor must give instructions that must be followed
elements necessary to create a trust
- a settlor with express present intent to create a trust
- delivery of specified trust property
- an ascertainable beneficiary
- active duties imposed on the trustee
- a proper trust purpose
- a trustee
Testamentory Capacity
- the document being signed is a will
- know the nature and extent of the property subject to distribution
- know the natural objects of the testator’s bounty
Elective share
when a spouse is disinherited or inheriting very little, they can take an elective share instead of the amount given under the will
Capacity to make a will
must be competent, 18 years of age or older, and intend to make a will
Incorporation by reference
the UPC recognizes the common law doctrine of incorporation by reference: permits the inclusion by reference of unattested documents to the will if 1. they were in existence at the time of execution, 2. the language of the will manifests intent to include
Simultaneous death
under the UPC, a person who cannot be established by clear and convincing evidence to have survived the decedent by 120 hours is deemed to have predeceased the decedent.
Lapse in will
Under the common law, a lapse occurs when a disposition fails because the beneficiary predeceases the testator. It will pass to the residuary unless there is an anti-lapse statute
Proving undue influence in the creation of a will requires:
- the donor was susceptible to undue influence
- the alleged wrongdoer had an opportunity to exert
- the wrongdoer had a disposition to exert, and
- there was a result appearing to be the effect of undue influence