Misc. MA distinctions - includes leases, partnerships, mortgages, and some landlord-tenant

Question 1

A tenant may withhold rent under what theory of liability?

Answer 1

Breach of warranty of habitability.

Question 2

Breach of warranty of habitability applies to

Answer 2

both residential and (now) commercial leases.

Question 3

A tenant or lawful visitor injured as a result of a landlord’s failure to correct an unsafe condition of which the landlord had notice have

Answer 3

a right of action against the landlord.

Question 4

A motion for a directed verdict must be made at what point at trial to preserve a subsequent motion for JNOV?

Answer 4

Must be made at the close of all evidence to preserve a JNOV motion. (Though, for non-JNOV purposes, a motion for a DV can be made anytime after the opening argument.)

Question 5

Discovery of an opponent’s financial condition is relevant to

Answer 5

punitive damages claims.

Question 6

A legal malpractice claim IS/IS NOT assignable.

Answer 6

IS, generally, unless some clear rule of law, professional responsibility, or public policy dictates against enforcing the assignment.

Question 7

An agent’s actual express authority is revocable or irrevocable?

Answer 7

Generally, revocable, unless a DURABLE power of attorney is given.

Question 8

Actual implied authority can be derived in three ways:

Answer 8

by necessity – all tasks necessary to accomplish the expressly authorized task

by custom – all tasks that someone with that particular title or position usually are authorized to do

by prior dealings – all tasks that the agent believes to be authorized by principal’s prior acquiescence (e.g. has been doing the same thing for past 20 years, reasonable to assume can continue doing it this time)

Question 9

Prima facie evidence of a general partnership occurs when a partner

Answer 9

contributes money or services in exchange for a SHARE OF PROFITS.

Question 10

Each general partner is liable for other partners’

Answer 10

torts, within the scope of the business, and their authorized contracts (i.e. debts of partnership).

Question 11

Incoming partners are generally liable for

Answer 11

no prior debts of the partnership, BUT the assets they contribute when they join may be used to pay off prior debts.

Question 12

Withdrawing partners are generally liable for

Answer 12

all future debts (made after they leave) until actual notice of their dissociation is given to all known creditors and publication notice to all potential creditors.

Question 13

How can a partner take action against another partner for matters relating to partnership business?

Answer 13

File an action for an accounting, which permits other partners to recover damages and can require the wrong-doing partner to disgorge profits.

Question 14

Absent an agreement on division of control in a partnership, each partner is entitled to

Answer 14

equal control

Question 15

Absent an agreement on salary in a partnership, each partner is entitled to

Answer 15

no salary

Question 16

Absent an agreement on profit sharing in a partnership, each partner is entitled to

Answer 16

equal profits

Question 17

Absent an agreement on loss sharing in a partnership, each partner is entitled to

Answer 17

losses shared like the profits are shared.

Question 18

Death or withdrawal of a partner in a GP

Answer 18

dissolves the partnership

Question 19

New business during “winding up”: is there liability for the partnership?

Answer 19

Yes, there is liability for these new transactions, until actual notice of dissolution is given to known creditors and publication notice is given to all potential creditors. (Same test as liability for a withdrawing partner.)

Question 20

To form an LLC, you must

To form an LP, you must

Answer 20

file articles of organization with secretary of state

file certificate of limited partnership with secretary of state (don’t have to have written agreement)

Question 21

The knowledge of an agent is

Answer 21

imputed to a business enterprise when the agent is acting within the scope of his duties.

Question 22

Under the UPA, whether a partnership exists is a question of fact measured by the following factors:

Answer 22

1. title to property
2. did parties view themselves as forming a partnership?
3. degree of joint activity in conducting business
4. sharing of losses/gross returns
5. sharing of profits

**Sharing of profits is prima facie evidence of existence of a partnership.

Question 23

When you have a partnership/agency question, consider these three things:

Answer 23

1. Partnership’s liability to third parties
2. Agent/partner’s direct liability to third parties
3. Agent/partner’s liability for Partnership’s debt

Question 24

In commercial paper transactions, the UCC’s warranty and conversion provisions

Answer 24

provide the SOLE remedy in the context of commercial transactions, and thus preempt any direct cause of action for negligence.

Question 25

How to tell a lease of goods from a “disguised sale”

Answer 25

1. If lessee is allowed to end lease and return the goods AT ANY TIME – it’s a true lease.
2. Even if not, if the goods have some remaining value at the end of the lease, AND lessee does NOT become owner at end of lease (or doesn’t have option to buy with no additional consideration) – it’s a true lease.

Otherwise, it’s a disguised sale on credit and Art. 9 applies.

Question 26

A SALE of goods must be in writing if it is for more than _____; a LEASE of goods must be in writing if it is for more than ___________.

Answer 26

$500; $1000.

Question 27

A lessor must use any option to accelerate a consumer lease at will

Answer 27

in bad faith

Question 28

Successful consumers challenging a lease under Article 2A are entitled to

Answer 28

attorney’s fees.

Question 29

A “finance lease” is one in which

Answer 29

the lessor buys the goods at the lessee’s direction and then leases them to the lessee. Lessee must select the goods or approve their purchase for it to be a finance lease.

Question 30

Finance lease warranties exclude _______ and include ________.

Answer 30

the ordinary warranties of Art. 2 (merchantibility; fitness for a particular purpose); an ability for the lessee to directly pursue warranties that the lessor could pursue against the seller of the goods.

Question 31

A lessee in a finance lease must make payments to the lessor regardless of

Answer 31

how bad the goods end up being – there’s an absolute obligation.

Question 32

A lessor may repossess goods without a court proceeding if

Answer 32

as long as she does not breach the peace (same as Art. 9).

Question 33

When can a lessor sue for the entire future rent?

Answer 33

Only if the lessor never repossesses, the lessee never returns, or it’s a lost volume situation.

Question 34

Subleases of goods are allowable

Answer 34

even if the terms of the lease say otherwise.

Question 35

Assignment of the right of payment on a lease of goods is allowable

Answer 35

even if the terms of the lease say otherwise, IF the lessor has completed all the obligations he had under the lease (and so all that’s left is getting paid).

Question 36

Creditors of a lessor whose lien attaches AFTER the lease was in effect

Answer 36

cannot do anything w/r/t the leased property that would prejudice the lessee.

Question 37

A mortgage by one tenant by the entirety in MA

Answer 37

does not sever the TBE. The mortgagee takes only the mortgagor’s interest, which is defeasible at mortgagor’s death.

Question 38

For mortgages or secured transactions that include a future advance clause, any subsequent loans made pursuant to that clause

Answer 38

have the same priority as the original mortgage or security interest, even if there’s an intervening creditor who lends in the meantime.

Question 39

Discrimination in granting a mortgage

Answer 39

is prohibited, based on race, color, creed, national origin, sex, sexual orientation, ancestry, or (mostly) age.

Question 40

Mortgage deeds must contain

Answer 40

same stuff as land deeds – names of both parties, description of the property sufficient to ID it, signature of debtor, words of grant, acknowledgement.

Question 41

Equitable mortgages are those where

Answer 41

a deed to property is delivered with intent of forming a mortgage, but it doesn’t say so. Parol evidence will be admissible to prove that it wasn’t really intended to be an outright transfer, and intent of the parties will govern.

Question 42

If a mortgage in MA doesn’t refer to the power of sale

Answer 42

foreclosure must be done by entry, which takes three years to perfect. To foreclose by selling property at auction, the mortgagor must reference the power of sale in the mortgage.

Question 43

If a mortgage is transferred without the note, or the note without the mortgage,

Answer 43

usually the one follows the other.

Question 44

Mortgages providing for acceleration in the event of default are

Answer 44

enforceable.

Question 45

If a mortgagor makes payments to the original mortgagee after being notified of a transfer, she may

Answer 45

still be liable to the new mortgagee.

Question 46

If a mortgagor fails to pay taxes on the mortgaged property, the mortgagee may

Answer 46

pay them and add the amount to the mortgage debt.

Question 47

A mortgagee cannot commence foreclosure until

Answer 47

150 days’ notice has been given to the mortgagor advising him of his right to cure the default (90 days if the mortgagee made good faith efforts to avoid foreclosure).

Question 48

After default that’s not cured, mortgagor can

Answer 48

take possession of the premises, if he can do so openly and peaceably.

Question 49

Foreclosure by entry is

Answer 49

where the mortgagee makes entry and then files a memorandum or certificate of entry. After three years, equity of redemption is extinguished and mortgagee gets title in FSA.

Question 50

In MA, the statutory right to redeem mortgaged property after foreclosure allows a mortgagee to

Answer 50

pay off the full outstanding balance, plus any interest and costs, and redeem the land – as long as it’s done BEFORE the mortagee has been back in possession for 3 years and before any foreclosure sale has happened.

Question 51

A mortgagee may purchase at a foreclosure sale unless

Answer 51

the mortgage prohibits it.

Question 52

Suit on a deficiency left over after foreclosure must be done

Answer 52

within 2 years of date of foreclosure sale.

Question 53

Partner’s interest in the partnership is his ______ and is treated like _____ property, which means it is _________ and _________.

Answer 53

share of profits and losses

personal

assignable without dissolving the partnership*; attachable

*however, the assignee will not be a partner without unanimous consent of other partners – will merely have rights to partner’s share.

Question 54

All partners have the right to do what w/r/t records?

Answer 54

Right to inspect upon demand. Each partner must, on demand, give full and truthful information to others about matters affecting the partnership.