Missed MBE Questions Flashcards
Missed questions from the Qbank and Strategies & Tactics
State the rule triggered by the question
A plane crashed in State C, killing all 120 passengers on board. The deceased passengers were domiciled in States A, B, and C. The plane was owned by an airline incorporated in State A, headquartered in State B, and licensed to do business in State C. The plane’s manufacturer is incorporated, headquartered, and licensed to do business in State C.
The estates of the deceased passengers brought an action against the airline and the manufacturer in a State B federal court. The estates assert wrongful death claims on behalf of the deceased passengers to recover $120 million in damages. The airline and the manufacturer have moved to dismiss for lack of subject-matter jurisdiction.
Should the court grant the defendants’ motion?
A federal court has original subject-matter jurisdiction over an action in which minimal diversity of citizenship exists when the requirements of the Multiparty, Multiforum Trial Jurisdiction Act (MMTJA) are satisfied.
Contracts must be supported by consideration—ie, a bargained-for exchange of promises or performance—which requires each party to (1) perform or promise to perform an act that is not legally required or (2) refrain or promise to refrain from performing some legally permissible act.
State the rule triggered by the question
A private high school was in the market for new desks and chairs for its classrooms. It had inquired into the cost of acquiring 1,000 new desks and chairs from a particular vendor. On June 15, the vendor sent a signed letter to the private high school offering to sell 1,000 desks and chairs for $30,000. The letter stated that the private high school’s acceptance would be effective only if the vendor actually received it by June 25. On June 23, the private high school mailed its signed, written acceptance of the vendor’s offer. On June 24, the vendor, after concluding that the price it originally requested was too low, directly notified the private high school that it was revoking its offer. The vendor received the private high school’s acceptance on June 26.
Was an enforceable contract between the private high school and the vendor formed?
The mailbox rule does not apply if it is inconsistent with the offer’s terms, such as when the offer states that acceptance is effective only upon receipt.
State the legal rule or principle triggered by the question
A plaintiff brought a diversity action against a defendant in a federal court in State A to quiet title to a farm. The plaintiff attempted to serve the defendant with process through certified mail, but the letter was returned to the plaintiff marked “unclaimed.” The plaintiff attempted service through certified mail a second time, but the letter was returned to the plaintiff in the same fashion. The plaintiff did not attempt to contact the defendant again. At trial, the defendant did not appear and defend. As a result, the court entered a default judgment in the plaintiff’s favor.
Two months later, the defendant discovered the plaintiff on the farm and learned about the default judgment. The defendant immediately moved for relief from the default judgment in the federal court in State A on the ground that the plaintiff failed to provide him with adequate notice of the suit.
State A’s rules of procedure permit service of process by certified or ordinary mail.
Will the federal court likely grant the defendant’s motion for relief?
Notice, as required by due process, means that a defendant must be reasonably apprised of the pending suit and afforded an opportunity to present objections. So if the plaintiff knows the defendant did not receive notice through service of process, then the plaintiff must take additional reasonable steps to provide notice.
Notice the plaintiff did not take additional reasonable steps to provide notice
A retiree was known to walk her beloved dog around the neighborhood daily. One evening, she forgot to shut her gate, and her dog escaped. The retiree placed posters around the neighborhood stating, “Lost dog! $500 reward. No questions asked.”
The dog had wandered to a nearby store, and the store owner kept the dog and fed it for a few days. A customer saw the dog and told the store owner that it looked like the retiree’s dog. The store owner took the dog to the retiree’s home, and the dog was happily reunited with its owner. The store owner had not seen the posters and did not ask for the reward.
On the way back to the store, the store owner saw one of the posters and called the retiree to inquire about the reward. The retiree refused to pay the reward.
What type of offer did retiree create?
Who could accept the offer?
What legal rule is triggered?
The reward is a unilateral offer to contract, acceptance is valid only through full performance.
Since store owner didn’t know about the offer he couldn’t accept it. Therefore, there was no mutual assent, no contract, and no breach.
Rule: Offers to form unilateral or bilateral contracts must be reasonably communicated to the offeree, and the offeree must be aware of the offer to accept it. Otherwise, there can be no mutual assent and therefore no contract.
A woman was driving home from a crowded shopping mall when a passenger van ran through a stoplight at great speed and hit the woman’s car. A physician who witnessed the incident pulled over to the woman’s car and saw that her shoulder was seriously injured. The physician told the woman he was a licensed surgeon before helping her out of the car. The woman was delirious and too shaken to speak as the physician removed several glass fragments from her shoulder and applied temporary sutures to close the wound. When the physician finished, he took the woman’s contact information and promised to check on her condition later.
If the physician subsequently sends the woman a bill for his services, will she be obligated to pay it?
Yes!
- Courts will construct an implied-in-law **(“quasi”) contract **where the plaintiff has conferred a measurable benefit on the defendant without gratuitous intent and it would be unfair to let the defendant retain the benefit without compensating the plaintiff.
- Unfair retention of a benefit arises when (1) the defendant had an opportunity to decline the benefit but knowingly accepted it or (2) the plaintiff had a reasonable excuse for not giving the defendant such opportunity—often because of an emergency. This allows the plaintiff in a quasi-contract action to recover restitutionary damages equal to the reasonable value of the benefit conferred.
Can a promise to surrender a claim of defense constitute adequate consideration?
If so what are the requirements?
Yes!
A promise to surrender a claim or defense constitutes consideration for a settlement agreement so long as (1) the claim or defense is valid or subject to a good-faith dispute or (2) the surrendering party believes that the claim or defense may be valid.
What legal principle is triggered by the question?
A shop owner faxed the following signed message to his long-time widget supplier: “Urgently need blue widgets. Ship immediately three gross at your current list price of $600.” Upon receipt of the fax, the supplier shipped three gross of red widgets to the shop owner and faxed to him the following message: “Temporarily out of blue. In case red will help, am shipping three gross at the same price. Hope you can use them.”
Upon the shop owner’s timely receipt of both the shipment and the supplier’s fax, which of the following best describes the rights and duties of the shop owner and the supplier?
Under the UCC, a seller can accept an offer to buy goods for prompt or immediate shipment by promising to ship or actually shipping conforming goods. However, shipping nonconforming goods serves as both a rejection and counteroffer if the seller notifies the buyer that the shipment was merely an accommodation.
The shop owner may accept the shipment, in which case he must pay the supplier the list price, or he may reject the shipment and he has no further rights against the supplier.
Termination of offer before acceptance
Once an offer has been made, a binding contract will be formed if the offer is accepted before it terminates. Offers can be terminated by revocation, rejection, lapse, or operation of law (see table above). An offer terminates by operation of law when, for example, the subject matter of the offer is destroyed.
Termination of offer before acceptance
Offeror’s revocation
Offeror communicates revocation directly to offeree
Offeree learns information from reliable source that reasonably indicates offer was revoked (eg, house sold to another buyer)
Offeree’s rejection
Offeree communicates rejection directly to offeror
Offeree’s counteroffer serves as rejection & new offer*
Lapse
Time period specified in offer expires
After reasonable time if no time period specified in offer
By law
Either party dies or is adjudicated insane
Subject matter of offer is destroyed or becomes illegal
What is the function of a merger clause under the UCC?
The UCC, which applies to contracts for the sale of goods (e.g., comic books), presumes that a contract is partially integrated. However, that presumption goes away when the writing contains a merger clause—i.e., a clause that declares the written contract to be the complete and final agreement between the parties. The written contract will instead be deemed completely integrated.
A written contract is completely integrated if it contains a merger clause—i.e., a clause that declares the written contract to be the complete and final agreement between the parties. As a result, the parol evidence rule bars the admission of prior or contemporaneous agreements that modify or contradict the terms of the writing.
A written contract is completely integrated if it contains a merger clause—i.e., a clause that declares the written contract to be the complete and final agreement between the parties. As a result, the parol evidence rule bars the admission of prior or contemporaneous agreements that modify or contradict the terms of the writing.
under the UCC When is performance due on an installment contract?
Under the UCC, an installment contract is defined as a contract in which the goods are to be delivered in multiple shipments, and each shipment is to be separately accepted by the buyer. Payment by the buyer is due upon each delivery unless the price cannot be apportioned.
What happens when a party’s performance of a condition precedent is prevented?
A condition precedent is an explicit contract term requiring a future event to occur before a party becomes obligated to perform. However, under the doctrine of prevention, a condition’s nonoccurrence is excused when the party whose duty to perform is subject to the condition wrongfully prevents or interferes with the occurrence of that condition.
How can an offer be revived?
An offer cannot be accepted after it terminates (e.g., is rejected by the offeree). But the offer can be revived if the offeror conveys that it is still open, which creates a renewed opportunity for the offeree to accept.
What is an exception to the parol evidence rule when it comes to raising defenses against the formation of a contract? Name one specific defense and describe it.
the parol evidence rule does not apply to evidence offered to raise a defense to contract formation. Misrepresentation is one such defense, which arises when a contracting party made an untrue assertion of fact.
To form a contract, an offer must be accepted before it terminates. An offer will terminate if, for example, the offeree rejects it by clearly conveying that he/she does not intend to accept the offer OR by making a counteroffer. Once the offer has terminated, it cannot be accepted. But the offer can be revived if the offeror conveys that it is still open. This creates a renewed opportunity for acceptance by the offeree. If the offeree accepts the revived offer, then a binding contract is formed.
What are the exceptions to the parol evidence rule?
Evidence of prior or contemporaneous oral or written agreement is admissible to establish:
- whether writing is integrated and, if so, completely or partially
- meaning of ambiguous term
- defense to formation or enforcement (eg, fraud, duress, mistake)
- ground for granting or denying remedy (eg, rescission, reformation)
- subsequent contract modifications
- condition precedent to effectiveness
Remember: The parol evidence rule does not apply to evidence offered to raise a defense to contract formation.
Discuss contract formation under the common law vs. the UCC
Contract formation under the common law requires an offer with definite terms and an acceptance with knowledge of that offer. But these requirements are relaxed by the UCC, which governs contracts for the sale of goods (e.g., a ring). Under the UCC, a contract is formed if the parties intended to contract and there is a reasonably certain basis for giving a remedy. The contract may be made in any manner sufficient to show agreement—even if the moment of its making is undetermined.
What are a buyer’s duty of good faith & fair dealing under requirements contract?
Article 2 of the Uniform Commercial Code (UCC) governs contracts for the sale of goods. Under the UCC, a requirements contract is a contract for the sale of as many goods as the buyer requires during a specified period. This creates an exclusive agreement between the buyer and the seller. As a result, the duty of good faith and fair dealing implied in every contract requires the buyer to purchase goods from the seller only. A failure to do so violates that duty and is a breach of contract.
Auctions
During a reserve auction, the auctioneer may withdraw goods from auction prior to completion of the sale (e.g., before the auctioneer’s hammer falls). At a no-reserve auction, goods generally cannot be withdrawn after the auctioneer calls for bids.
accord and satisfaction
If a debt is disputed in good faith, then the debtor can offer to satisfy the debt by giving the creditor a check with a conspicuous “payment in full” notation. But if the debt is certain and undisputed, then it cannot be satisfied by a check for a lesser amount—even if the creditor cashes the check.
Beneficiaries to a contract
Intended beneficiaries receive a direct benefit from a contract because the contracting parties so intended, while incidental beneficiaries receive an indirect benefit from a contract even though there was no contractual intent to benefit them. Only intended (not incidental) beneficiaries can sue to enforce the contract.
Ways to discharge contractual obligations
Mnemonic: FIRM SCAN
Full performance of contractual obligations
Impossibility, impracticability, or frustration of purpose
Release (in writing only)
Mutual rescission
Substituted contract
Contract or covenant not to sue
Accord & satisfaction
Novation
Does an accord require consideration to be valid?
Remember the question where tutoring services were rendered. Mother offered a $500 bonus if the student received a B or better. The bike was offered instead of the $500 under the original contract because mother didn’t have the cash to pay.
Yes, an accord requires consideration to be valid. That consideration can be worth less than what was agreed to in the original contract only if (1) there is a good-faith dispute as to the amount owed or (2) the new consideration is of a different type than what was owed under the original contract.
The tutor agreed to accept the bike (accord) and the mother delivered the bike to the tutor (satisfaction), the original contract was discharged. Therefore, the tutor cannot recover $200.
What is an accord and how is it created?
One method of discharging contractual obligations is by an accord (new contract) and satisfaction (performance of the accord).
An accord is created when the parties to a contract agree to give and accept something different in satisfaction of their existing contractual obligations.
Since an accord is a new contract, it must be supported by consideration. Where the new consideration is worth less than what was agreed to in the original contract, it will be sufficient only if:
- there is a good-faith dispute as to the amount owed (Choice D) or
- the new consideration is of a different type than what was owed under the original contract (e.g., goods in lieu of cash).
Give an example of a promise that is enforceable without consideration.
A contract must generally be supported by consideration to be enforceable. However, there are circumstances in which a promise is enforceable without consideration.
For example, a new promise to pay a debt after the statute of limitations has run is enforceable without any new consideration.
When the new promise is an express promise, most jurisdictions require that the new promise be in **writing and signed by the debtor **to be enforceable.
Expectation damages are computed as loss in value + other loss − costs avoided − loss avoided. For late delivery in real estate contracts, loss in value is measured by the fair market rental value of the property for the time that the buyer was denied possession.
Is the closing date an essential term in real estate contracts?
A closing date is not an essential term of a real estate contract. Therefore, a seller’s performance is typically due at or within a reasonable time after the closing date—unless the real estate contract contains a “time is of the essence” clause (not seen here). Accordingly, the seller’s failure to perform by the closing date is not a material breach that excuses the buyer’s duty to perform—but it is still a breach. The buyer can therefore recover damages—even if the seller acted in good faith
A mother owned a vacation cabin, but as she no longer visited it, she decided to convey the cabin to her daughter. The mother executed a valid, written deed, and she promptly and properly recorded it. The mother did not tell her daughter that she intended to give the cabin to the daughter because the mother wanted to surprise the daughter with this gift at an upcoming family reunion.
Prior to the reunion, the daughter died suddenly. In her will, the daughter left her entire estate to her best friend. The mother, not wanting the cabin to go to someone who was not a family member, brought an action to set aside the conveyance to the best friend.
Who will be likely to prevail in this action?
Quote the legal principle implicated…
The best friend, because the mother recorded the deed conveying the cabin to her daughter.
A transfer by deed is effective when the deed is delivered by the grantor and accepted by the grantee. Delivery is presumed when the deed has been recorded, and acceptance is presumed if the transfer benefits the grantee.
Upon her death, the owner of six acres of undeveloped land devised her property to her brother and sister as “joint tenants with the right of survivorship,” with a one-third interest in the land allocated to the owner’s brother and a two-thirds interest in the land allocated to the owner’s sister. Neither the brother nor the sister transferred their interest in the land during their lifetime.
The brother, upon his death, devised his interest in the land to a friend. The sister later died intestate, and her sole heir inherited all of her property.
Who owns the undeveloped land? Quote the legal rule implicated…
Very tricky question!!! know the rules!
The sister’s sole heir owns a 2/3 interest and the brother’s friend owns a 1/3 interest in the land as tenants in common.
Due to the right of survivorship, a joint tenancy cannot be devised by will or inherited through intestate succession. However, a tenancy in common can be devised or inherited.
Here, the conveyance lacked unity of interest because the sister received a two-thirds interest and the brother received a one-third interest. This created a tenancy in common—not a joint tenancy. Therefore, the brother’s one-third interest passed to the friend (not the sister) upon his death and the sister’s two-thirds interest passed to her sole heir, as a tenancy in common.
A buyer entered into a contract to purchase a house from its owner. The contract called for the buyer to make equal monthly installment payments over 10 years. During that time, the owner was to retain title to the house and the buyer was granted the right to occupy the premises. Once the buyer made all of the required payments, the owner was to transfer ownership of the house to the buyer. The contract contained an acceleration clause under which all future installment payments were to become due in the event the buyer failed to timely make a required installment payment. Additionally, the contract included a forfeiture clause, which stated that time was of the essence and permitted the owner to terminate upon the buyer’s failure to timely make a required installment payment, regain possession of the house, and retain any payments already made by the buyer.
After making timely payments for seven years, the buyer failed to make three monthly payments. In accordance with his rights under the contract, the owner filed a summary ejectment action to evict the buyer from the house. The buyer appeared at the summary ejectment proceeding, and she tendered the missed payments.
The applicable jurisdiction treats an installment land contract as a mortgage, follows the lien theory of mortgages, and does not recognize a mortgagee’s right of strict foreclosure.
Should the court award possession of the house to the owner?
Read this one carefully! You didn’t read carefully last pass!
No, because there has not been a foreclosure sale.
In a jurisdiction that treats an installment land contract like a mortgage, a buyer in default may redeem the property by tendering to the owner the full balance due under the contract prior to foreclosure.
Notice that the buyer didn’t pay the full balance of the loan, just the past due amount.
A widower owned a house in fee simple absolute. His daughter is his only child. The daughter also has one child, the widower’s grandson. The grandson and his wife had just had their first child when the widower executed a will in which the house was devised to his daughter for her life and the remainder to his grandson’s children. The widower left the rest of his estate to a charity.
After the widower’s death, his grandson had a second child and the widower’s daughter died shortly thereafter. A year later, the grandson had a third child. The widower’s grandson recently died, survived by all three of his children.
The jurisdiction follows the common-law Rule Against Perpetuities as well as the Rule of Convenience.
Who now owns the house? Quote the legal rules implicated…
The first child and the second child.
The Rule of Convenience prevents the Rule Against Perpetuities from being applied to class gifts by closing class membership when any member of the class is entitled to immediate possession of a share in the class gift.
A man purchased undeveloped land with a bank loan secured by a mortgage on the property. The man recorded the deed, and the bank promptly recorded the mortgage. A year later, the man decided to sell the property to a wealthy widower. The widower purchased the property, recorded his interest, and assumed the mortgage. Several years later, the widower gave the property to his daughter. The widower did not tell his daughter about the mortgage but instead continued to make the mortgage payments. The deed, which contained no mention of the mortgage, was promptly recorded by the daughter.
When the widower died, he devised all of his real property to his daughter. He left the remainder of his estate to his son. Following the widower’s death, no one made payments on the bank loan, causing it to fall into default.
May the bank foreclose on the property? Quote the legal principles implicated…
Yes, because the bank recorded its mortgage.
Recording acts protect purchasers—not donees. The Shelter Rule gives donees who acquire property from a grantor protected by a recording act the same protection as the grantor under the recording act. Otherwise, the “first in time, first in right” rule applies.
A homeowner whose house sat on an irregularly shaped lot constructed a storage shed that by mistake rested entirely on his neighbor’s property. The storage shed stood there for 16 years before the neighbor discovered the mistake upon selling her property. The homeowner apologized and dismantled the shed. The neighbor then transferred title to her property to a buyer who promptly recorded the deed.
Six months later, the homeowner died, devising all of his real property interests to his son. When the son sought to construct a storage shed in the same location as the prior shed, the buyer objected and initiated a lawsuit against the son.
In the applicable jurisdiction, the statute of limitations for adverse possession is 15 years.
Which of the following is the buyer’s best argument that the land on which the original storage shed was located belongs to the buyer?
Read this one carefully! Take note to the call of the question!
The homeowner’s possession of this land was not hostile, assuming the jurisdiction follows the minority rule on hostility.
In most jurisdictions, possession is hostile if the adverse possessor objectively demonstrates an intent to claim the land. However, a minority of jurisdictions considers the possessor’s subjective intent.
Notice that the best argument must defeat the adverse possession elements which are present here.
What are common exceptions to enforceability to a due-on-sale clause affecting residential property?
- Devise, descent, or transfer to joint tenant upon death
- Transfer to spouse or child
- Transfer to ex-spouse in divorce
- Transfer to borrower’s living trust
- Creation of subordinate lien without occupancy rights
- Granting leasehold interest of less than 3 years without option to purchase
A homeowner bought a home with the proceeds of a loan from a thrift institution. The loan was secured by a mortgage on the home. Under the terms of the loan, the full amount of the outstanding loan obligation was to become due and payable if the home was sold or otherwise transferred without the prior permission of the thrift institution. The thrift institution recorded its mortgage.
Subsequently, the homeowner established a living trust and transferred ownership of her home to the living trust. The homeowner recorded this ownership transfer. Upon learning of the transfer, the thrift institution demanded that the homeowner pay the outstanding amount due on the loan immediately. When the homeowner refused, the thrift institution brought a foreclosure action to collect the full amount of the outstanding loan obligation.
Is the thrift institution likely to succeed?
No, because ownership of the home was transferred to the homeowner’s living trust.
A due-on-sale clause permits the mortgagee to demand payment in full of the remaining mortgage debt if the mortgaged property is transferred without the mortgagee’s consent. However, the transfer of residential property to the mortgagor’s living trust is exempt from this clause.
By statute, a jurisdiction provides: “Any judgment properly filed shall, for 10 years from filing, be a lien on the real property then owned or subsequently acquired by any person against whom the judgment is rendered.” In addition, the recording act of the jurisdiction reads, in its entirety, as follows: “No conveyance or mortgage of real property shall be good against subsequent purchasers for value and without notice unless the same be recorded according to law.” This act has been interpreted as not providing any grace period for recording a conveyance or mortgage.
An owner conveyed land by a warranty deed to his adult child. The child recorded the deed a week later. Three days after the conveyance to the child and without knowledge of it, a creditor of the owner properly filed a judgment against the owner. The creditor then filed suit against the owner and his child to foreclose on the judgment lien against the land.
If the court rules against the creditor, which of the following is the most likely reason?
Read the statutes carefully! Get a clear understanding of what they actually say.
The creditor is not a purchaser for value.
Judgment creditors are not purchasers for value since the attachment of a judgment lien to a debtor’s property is merely security for a preexisting debt—not payment of value.
A fitness company entered into a 10-year lease with the landlord of a gym facility. The lease required the fitness company to maintain the gym equipment in proper, working condition and to upgrade or replace any of the equipment as required by the safety guidelines for gymnasiums issued by a national organization of gymnasiums. In addition, the lease specified that all of the fitness company’s clients must sign a valid waiver releasing the current landlord from liability for any injury arising from their improper use of the gym equipment.
One year into the lease, the landlord transferred the remaining term of the fitness company’s lease to a large fitness conglomerate. The transfer occurred without the fitness company’s consent. The fitness company paid rent to the conglomerate, but the company stopped making its clients sign the liability waiver because the conglomerate did not require any of its gym members to sign one.
The conglomerate has brought an action against the fitness company to enforce this covenant in the lease.
Who will likely prevail?
The conglomerate, because the fitness company had required its clients to sign the waiver in the past.
A lease covenant can be enforced by an assignee-landlord if the covenant runs with the land—i.e., the original parties intended to bind their successors, the covenant touches and concerns the land, and there is privity of estate.
What is a right of first refusal? Explain.
A right of first refusal is a contractual right to purchase property before any other person if the owner later decides to sell, so it is a contingent future interest that is generally subject to the Rule Against Perpetuities (RAP).*
a right of first refusal is a contingent future interest
A grandmother had lived in her family’s mansion for her entire life, but she decided to sell the property and move into a smaller home. Desiring to keep the mansion in her family, the grandmother sold the mansion to her grandson at a below-market price. The grandmother included a right-of-first-refusal clause in the valid, written deed to her grandson, which the grandson signed. The clause stated that, in the event the grandson, his heirs, devisees, or assigns attempted to sell the property to a non-family member, the grandmother, her heirs, devisees, or assigns would have the opportunity to purchase the property before the transfer.
One year after the grandson purchased the property, he was approached by a buyer who offered him twice the price he had paid his grandmother. The grandson readily accepted and immediately sold the mansion to the buyer. The grandmother subsequently read about the sale in the local newspaper and brought an action against the buyer to enforce her right of first refusal.
The jurisdiction adheres to the common-law Rule Against Perpetuities.
Which of the following doctrines will help determine whether the grandmother will be able to enforce the right-of-first-refusal clause?
You didn’t know the rules implicated by the prompt! Get a clear understanding of the rules.
The Rule Against Perpetuities.
**Rights of first refusal **are generally subject to the Rule Against Perpetuities, so this contingent future interest is void if it there is any possibility that it could vest more than 21 years after some relevant life in being at the creation of the interest.
Discribe the effect of a mortage on a JT/ROS in a title theory state.
Is this the majority rule?
In a title theory jurisdiciton a mortgage constitutes a transfer of title, so granting a mortgage will sever a joint tenancy and the mortgagor-tenant becomes a tenant in common with the other joint tenant(s).
NO! The Lien Theory is of mortgages is the rule in majority of jurisdictions.
Discribe the effect of a mortage in a lien theory state
Lien theory (majority rule) – a mortgage is merely a lien on the property, so granting a mortgage does not sever the joint tenancy. However, severance will occur upon a foreclosure sale following a default.
The owner of a restaurant decided to pursue a different line of work, so he conveyed the restaurant to an up-and-coming chef. The owner executed a valid, written deed to the chef, who did not record the deed. The chef was talented, but he did not understand how to run a business, so his restaurant failed within a few months. A culinary school, in search of a new location to hold its cooking classes, purchased the restaurant from the chef. The chef executed a valid, written deed to the culinary school, and the culinary school promptly recorded the deed.
After the sale, but before the culinary school had a chance to occupy the restaurant space, the original owner noticed that the restaurant was vacant. The owner then sold the space to a fast-food chain, and the fast-food chain promptly recorded the deed. The owner did not tell the fast-food chain of his earlier conveyance of the restaurant to the chef, and the fast-food chain otherwise lacked actual knowledge of this conveyance.
Subsequently, the chef recorded the deed from the owner conveying the restaurant to him. When the fast-food chain attempted to take possession of the restaurant, it discovered that the culinary school had moved into the restaurant.
The fast-food chain has filed an appropriate action to quiet title against the owner, the chef, and the culinary school. The jurisdiction in which the restaurant is located applies a race-notice recording statute.
Who will likely prevail?
The fast-food chain.
A recorded deed that falls outside the chain of title is a “wild deed” that fails to give constructive notice to subsequent purchasers.
Here, the fast-food chain will prevail over the chef’s and the culinary school’s earlier interests if it is a BFP and the first to record. The fast-food chain purchased the restaurant with no actual knowledge of the prior interests and no inquiry notice because the restaurant was unoccupied. Therefore, the fast-food chain is a BFP if it also lacked constructive notice of the earlier interests.
A due-on-encumbrance clause gives the mortgagee the right to accelerate a mortgage obligation—i.e., to demand immediate payment of the full amount of the outstanding loan obligation, including interest—when the mortgagor obtains a second mortgage or otherwise encumbers the property.
A landowner died and left a piece of land to his three sons as joint tenants with the right of survivorship. The youngest son sold his interest in the property to the oldest son. The oldest son then died and left all of his real property interests to his daughter. The youngest son later died. Following the youngest son’s death, the middle son gave his interest in the property to a nephew.
The applicable jurisdiction continues to follow the common law with regard to joint tenancy.
Who owns the property?
sketch a quick diagram, this one is tricky!
The daughter and the nephew hold the property as tenants in common, with the daughter owning a one-third interest and the nephew a two-thirds interest.
A lifetime conveyance of a joint-tenancy interest destroys unity of title and severs the joint tenancy with respect to that interest. If there are more than two joint tenants, then severing one tenant’s interest does not affect the joint tenancy between the remaining tenants. And unlike a tenancy in common, a joint tenancy is not devisable.
Due to the doctrine of equitable conversion, a judgment obtained against a seller after the execution of a land-sale contract is not enforceable against the real property—even if the claim arose before the contract was executed.
A purse maker sought to market her line of “smart” purses that were compatible with a new handheld device. As part of her plans, the purse maker sought to purchase a brick-and-mortar store from which to sell her purses. The purse maker found a suitable store and entered into a contract with the owner of the store. The contract was in writing, signed by both parties, and stated the essential terms, including a closing date in 30 days. Due to the purse maker’s plan to sell her purses in advance of the release of the new handheld device, the contract stated that the closing date could not be delayed.
One week before the closing date, the purse maker discovered that the store was in violation of a zoning ordinance that mandated an updated version of the current fire sprinkler system. The owner promised that he would promptly update the fire sprinkler system and that, although it would not be finished by the closing date, it would be done in time for the grand opening of the store. In addition, the owner promised to provide a warranty deed upon closing to shield the purse maker from any potential liability stemming from the outdated fire sprinkler system. On the day of closing, the purse maker refused to close the land-sale deal.
In an action by the owner for specific performance against the purse maker, who will likely prevail?
The purse maker, because the owner did not provide marketable title to her on the closing date as stated in the land-sale contract.
A seller must deliver marketable title on the closing date when time is of the essence—i.e., (1) the contract states that “time is of the essence,” (2) circumstances indicate that the parties intended to strictly adhere to the closing date, or (3) one party notifies the other that time is of the essence within a reasonable time prior to closing.
A farmer informed his best friend, who had fallen on hard times, that he wanted to give the friend a small farm that the farmer had recently acquired. The friend told the farmer that he would be honored to own it. The farmer had his attorney prepare a proper deed transferring the farm to the friend. The farmer signed the deed, and his signature was notarized.
On his way to deliver the deed to the friend, the farmer stopped by his home for lunch. The farmer placed the deed on a small table in the entryway, along with his car keys and wallet. The farmer had lunch and then took a nap. While napping, the farmer died. The farmer’s adult son, from whom the farmer had been estranged for several years, claims that the deed is not valid. The friend contends that the farmer’s deed was effective to convey the farm to him.
The farm is located in a race-notice jurisdiction.
Did the farmer likely transfer his farm to the friend?
Be careful with this question! Look at the objective facts carefully!
Yes, because the farmer intended to deliver the deed to the friend.
A deed transfers ownership of real property when it is delivered by the grantor and accepted by the grantee. Delivery is shown by the grantor’s intent to make a present transfer of the property—which can be implied from the grantor’s words and conduct—and acceptance is presumed when the transfer is beneficial to the grantee.
Question ID# 9946
A buyer entered into a written contract to purchase real property from its owner. The buyer asked that the owner convey the property to the buyer and her brother as tenants in common. The owner noted that the buyer’s brother would need to attend the closing to sign the necessary paperwork. Because the brother lived in another state and could not attend the closing, the buyer brought her roommate to the closing instead. The roommate pretended to be the buyer’s brother and signed all the necessary paperwork with the brother’s name. The buyer paid the full purchase price, and the deed granting the buyer and her brother half interests as cotenants was recorded on the same day.
Unbeknownst to any of the parties, the evening before the closing, the buyer’s brother had died in a car accident. The brother’s valid probated will devised all of his property to his wife. The brother’s wife has brought an action against the buyer, who has taken sole possession of the property, and the original owner to quiet legal title to an undivided one-half interest in the property.
Who should the court find has legal title to the real property, and in what proportions?
One-half in the buyer and one-half in the original owner.
A deed that names a nonexistent grantee is void as to that nonexistent grantee. So if a nonexistent grantee was conveyed an interest in a tenancy in common, then the grantor would retain the nonexistent cotenant’s interest and have a tenancy in common with the other cotenant(s) named in the deed.
You chose: (Choice D) If a contracting buyer dies before the property is transferred, anyone entitled to the decedent’s property (e.g., an heir) can compel its transfer to him/herself. But here, the brother was not the buyer because he was never actually a party to the contract and never authorized the roommate to act as his agent. Consequently, the one-half interest deeded to the buyer remains with the original owner.
The owner of a commercial building obtained a nonrecourse, five-year loan from a lender and used the proceeds to fund another business project. The lender secured the loan with a mortgage on the building. Under the terms of the loan, monthly loan payments constituted only interest on the loan. The loan required a single payment of the principal amount (i.e., a “balloon” payment) at the end of the five-year period. Three years after the loan was made, the building was damaged by an unexpected hurricane. The owner did not repair the damage done by the hurricane, and he did not take action to protect the building from further damage. The contract was silent with regard to any obligation to repair the building.
At the end of the five-year period, despite an overall rise in property values for commercial buildings in the area, the value of the building was less than the amount of the balloon payment due to the building’s state of disrepair. The owner did not make the balloon payment. The lender sued to foreclose its mortgage. After the foreclosure sale, the lender filed an action against the owner personally.
If the court finds for the lender, which of the following is the most likely reason?
You don’t know the rules!
The owner committed waste.
Waste occurs when, for example, the mortgagor fails to maintain or repair the property in a reasonable manner.
Here, the hurricane damage does not constitute waste because it was due to natural forces, but the damage caused by the owner’s failure to prevent further damage could constitute waste.
A mortgagor in possession of the mortgaged property has a duty not to commit waste that would impair the mortgagee’s security interest in that property. If the mortgagor breaches this duty, the mortgagee can recover damages for the impairment.
If a seller cannot convey marketable title, the buyer can rescind the land-sale contract. But if the buyer accepts the land with the defect and the seller refuses to perform, then the buyer can (1) rescind the contract and seek restitution, (2) seek specific performance with an abatement of the purchase price, or (3) sue for damages.
A professional football player was one of the most popular and well-known athletes on television. He regularly appeared in commercials endorsing sports equipment, cars, and performance-enhancing vitamins. After a recent drug test was administered to all professional football players, the football player’s test results were leaked to the public by an unknown source. The results showed that he tested positive for illegal performance-enhancing drugs. A local political activist, who campaigned against professional football players because she believed all of them used illegal drugs, stated in a televised interview that the leaked results showed that the football player was an “illicit drug user who will be suspended from playing professional football.”
A few days later, the drug-testing facility announced that it had mistakenly reported the football player’s test results and that he had not actually tested positive for the use of illegal drugs. By that time, however, the football player had already lost a number of lucrative advertising contracts.
If the football player sues the activist for defamation, who will prevail?
The activist, because the professional football player is a public figure.
A plaintiff who is public figure or official can recover for defamation only if the plaintiff proves that the defendant made a false statement about the plaintiff with actual malice—i.e., with knowledge or reckless disregard of the statement’s falsity.
A tenant leased a set of 10 commercial storefronts spanning two city blocks. The lease was for a term of five years and complied with all relevant statutes. The lease was silent as to the effect of condemnation by the city.
Three years into the lease, the city properly took one of the city blocks for public use pursuant to eminent domain and compensated the landlord accordingly. The city demolished five storefronts and began developing a public park. Upon this condemnation, the tenant stopped paying rent for all 10 storefronts. In an appropriate action, the landlord sued the tenant for the unpaid rent on all 10 storefronts.
Is the landlord likely to succeed?
You didn’t know the rules implicated here! Brush up on the relevant rules
Yes, but only for half the amount, because the tenant is entitled to compensation.
Upon a partial condemnation, a tenant must continue to pay rent but is entitled to compensation for the portion of the leased property that was taken. In contrast, upon a complete condemnation, the tenant is discharged from his/her rent obligation and is entitled to compensation for the taking.
What are remedies for a seller of real estate when a buyer breaches?
What are remedies for a seller of real estate when a buyer breaches?
A homeowner purchased a residence from its original owner, who agreed to finance the sale in exchange for a mortgage on the residence. The homeowner later obtained a loan from a bank to add a family room to his residence. In addition to the homeowner’s note promising to repay the loan, the bank demanded and the homeowner granted a mortgage on the property. Subsequently, the homeowner obtained a home equity loan from a credit union to remodel the kitchen. The loan was secured by a mortgage on the residence. All mortgages were promptly and properly recorded.
The homeowner, while continuing to make timely payments with respect to the loans from the bank and the credit union, failed to make the required payments to the original owner of the residence. The original owner filed a foreclosure action with respect to her mortgage. The credit union was made a defendant to this action, but due to an oversight, the bank was not made a defendant. At the judicial foreclosure sale, the property was sold for its fair market value. Proceeds from the judicial sale equaled the homeowner’s obligation to the original owner.
The jurisdiction permits a mortgagee to obtain a deficiency judgment.
What is the bank’s right with respect to its mortgage on the residence?
The bank’s mortgage continues, because the bank was not made a party to the foreclosure action.
Lien priority is generally determined by the “first in time, first in right” rule. Therefore, lien priority here is as follows: the original owner’s, the bank’s, then the credit union’s. As the foreclosing mortgagee, the original owner therefore had to give notice to the bank and the credit union (the junior-interest holders) and make them parties to her foreclosure action. The credit union was notified and joined, but the bank was not. Therefore, the bank’s mortgage continues after the foreclosure sale.
A man and his friend decided to drive downstate to watch the homecoming football game at their alma mater. The man drove the friend to the game and refused any compensation from her. On the way home, the man failed to notice a stoplight and ran it, which caused a collision with another vehicle. The friend was severely injured as a result of the collision and sued the man for her injuries.
The jurisdiction where the friend’s suit was filed recently enacted a guest statute with regard to a driver’s duty to persons riding in the driver’s vehicle.
Will the friend be likely to recover damages for her injuries? What is a guest statute? Explain!
No, because the man was merely negligent.
In most jurisdictions, automobile drivers owe a duty of ordinary care to guests (who ride free) and passengers (who pay money for the ride). But a minority of jurisdictions have enacted “guest statutes,” under which an automobile driver’s only duty to guests is to refrain from gross or wanton and willful misconduct. Guest statutes do not absolve automobile drivers from liability for injuries to their guests. Instead, such statutes limit a driver’s liability by requiring that the driver have acted recklessly before a guest can recover damages.
Be careful with this question. Last time you didn’t know what a guest statute was. You chose: Yes, because the man owed his friend a duty to exercise ordinary care. Make sure your know this concept.
The attractive nuisance doctrine specifically protects trespassing children, so this will not cause the child’s suit to fail.
A plaintiff is a candidate for state treasurer. The defendant has a long-standing grudge against the plaintiff. In an effort to dig up dirt on the plaintiff, the defendant hacked into the plaintiff’s personal email account and discovered emails that contained lewd pictures of the plaintiff engaging in sexual conduct with a former staff member, taken while the plaintiff was married. The defendant called the plaintiff on the phone and said to the plaintiff, “I hate you. I have always hated you. I just emailed your wife and your two top advisors, telling them that you are an adulterer. And tomorrow, I am going to drive over to your house and punch you right in the nose.” The plaintiff later confirmed that the defendant had emailed his wife and two top advisors to inform them that the plaintiff had committed adultery.
Under which of the following tort doctrines will the plaintiff be likely to recover?
Intrusion upon seclusion
ntrusion upon seclusion is an invasion of privacy that occurs when a defendant intentionally intrudes on a plaintiff’s private affairs in a manner that would be highly offensive to a reasonable person—e.g., hacking into an email account. As a result, the plaintiff can likely recover damages from the defendant for intrusion upon seclusion.
You didn’t now the rules for this tort! You chose: Public disclosure of private facts. A privacy claim for the public disclosure of private facts requires that the private matter be publicized—i.e., communicated to the public at large or to so many people that it is substantially certain to become public knowledge. Here, the plaintiff’s affair was not substantially certain to become public knowledge because the defendant only emailed the plaintiff’s wife and two closest advisors about it.
Negligence rules of recovery visual
A mechanic at an auto shop accidentally spilled some gasoline in the shop’s parking lot and failed to clean it up. A customer walking across the parking lot ignited the gasoline when he accidentally dropped his cigarette lighter onto the ground while trying to light a cigarette. A nearby pedestrian suffered severe burns to her legs as a result of the fire caused by the ignited gasoline.
Can the mechanic be held liable for negligence for the harm to the pedestrian?
You got this one right but it was a lucky guess. Review the rules implicated
The chain of proximate causation can be broken by a superseding cause—i.e., an unforeseeable, intervening act or force that occurred after the defendant’s negligence and contributed to the plaintiff’s harm. But negligent intervening acts—e.g., accidentally dropping a cigarette lighter—are typically regarded as foreseeable and therefore do not break the chain of proximate causation.
Late one night, a 25-year-old woman climbed over her next-door neighbor’s fence to get a look at a new deck that the neighbor had recently built. The neighbor was on vacation and unaware that the woman was on his property. After climbing over the neighbor’s fence, the woman tripped and fell on leftover lumber that the neighbor’s builder had left in some tall grass after building the deck. The neighbor was aware that the builder had placed the lumber in the grass, but the neighbor had placed no warning sign in the area. The woman broke her ankle and filed a negligence action against the neighbor seeking damages.
In a jurisdiction that follows the traditional approach regarding the duty owed to land entrants, does the woman have a valid claim for negligence against her neighbor?
Quote the rule implicated. Distinguish it with the modern approach.
Last time you didn’t know the rules.
No, because the woman was a trespasser.
Under the traditional approach, a land possessor generally owes no duty to trespassers—i.e., persons who intentionally enter another’s land without permission—unless the land possessor knows of or has reason to anticipate their presence.* A land possessor who breaches this duty and causes the plaintiff physical harm is liable for negligence.
Last time you chose: Yes, because the neighbor owes trespassers a duty to warn of hidden dangers. This is wrong because the woman was an undiscovered and unanticipated trespasser. Thus neighbor owed her no duty.
A large oil company purchased a plot of land in a rural area and erected an oil well in compliance with local zoning codes. Many families living in the surrounding acres could hear the oil well operating loudly at all hours of the day and night. Although the noise from the oil well disturbed the entire neighborhood, only a small for-profit botanical garden nearby suffered economic loss as a result. For years, the garden had drawn most of its customers with a bird-watching hike during the migration period of a rare type of songbird. The persistent sounds of operations at the oil well drove the songbirds to avoid the garden during their migration. The noise from the oil well and the lack of songbirds caused the garden to lose most of its visitors, and it faced bankruptcy as a result.
If the garden brings a public nuisance claim against the oil company for damages for its economic loss, is the garden likely to succeed?
Yes, because the garden suffered harm that was different from the public at large.
A private plaintiff can sue for public nuisance—i.e., an unreasonable interference with a right common to the general public—only if the plaintiff sustained special damage different from that suffered by the public at large.
A plaintiff who suffers economic damages without any related personal injury or property damage cannot recover in a negligence action, but may recover in a public nuisance action.
The owner of an apartment complex employed a pest control company as an independent contractor to remove unwanted insects from one of the two buildings in the complex. The pest control company fumigated the building with a toxic gas. Even though the company exercised reasonable care, the gas escaped into the owner’s other building, which adjoined the fumigated building, where the gas caused serious illness to a tenant therein. The tenant had received a written advance notice about the fumigation that advised the tenant of the need to vacate his apartment during the hours the fumigation was conducted. The tenant had intended to leave his apartment, but he fell asleep just prior to the fumigation due to a medication he was taking for a medical condition.
The applicable jurisdiction treats fumigation as an abnormally dangerous activity and adheres to the rule of contributory negligence.
The tenant brought a strict liability action against the owner of the apartment complex to recover damages for his harm.
Who will likely prevail?
You got fooled by this question last time. You initially picked the right answer and then changed it to a wrong one.
The tenant, because the owner is vicariously liable for the harm that resulted from the fumigation.
A person who hires an independent contractor is generally not vicariously liable for torts committed by the independent contractor. However, vicarious liability will be imposed when the independent contractor’s work involved a nondelegable duty, such as when the independent contractor performed an abnormally dangerous activity.
Last time you chose: The owner, because the fumigation was conducted by an independent contractor.
Family members of a deceased individual properly filed an action for money damages in federal court against a funeral home for negligent infliction of emotional distress based on the alleged mishandling of the remains of the deceased. The funeral home timely and properly served an answer to the complaint. Thirty days later, including eight weekend days, the family members served a demand for a jury trial on the funeral home. The demand was served on a holiday. On the following day, a nonholiday weekday, the family members filed the jury trial demand with the court.
Was the family members’ demand for a jury trial timely?
You didn’t know the rules
No, because the demand was not served on the funeral home within 14 days of service of the answer.
A party may secure a jury trial on any triable issue by (1) serving the other parties with a written jury trial demand no later than 14 days after the last pleading directed to that issue is served and (2) filing the jury trial demand with the court within a reasonable time after service of the demand.
