Tough Concepts Flashcards

Question

Beginning/End of Attorney-Client Relationship

Answer 1

Begins when client reasonably believes that a relationship has begun ABA: Lasts forever CA: relationship terminates once the client has died and estate settled Corporate Clients: dissolution of the company

Answer 2

ABA: must represent client with sufficient **knowledge, thoroughness, and completion** CA: Attorney must not act with **reckless disregard, gross negligence, or willfully** when representing client.

Answer 3

ABA: diligence= **knowledge, thoroughness, and completion** CA: Attorney must not act with **reckless disregard** or with **gross negligence** when representing client.

Answer 4

Attorney has duty to communicate with client regarding **all critical stages of the case** and **disclose all potential or apparent conflicts**

Answer 5

Attorney must never lie to client even if doing so would jeopardize there relationship with the client.

Answer 6

Generally, shareholders are not personally liable for corporate acts. however, courts may allow a P to pierce the corporate veil and sue a shareholder individually if: 1. **Undercapitalization** at the time of formation 2. **Disregard of Corporate Formalities** 3. Use of Corporate Assets as Shareholder's **Own Assets** 3. **Self-Dealing**

Answer 7

Shareholder may bring a derivative action on behalf of the other shareholders of the corporation for a breach of fiduciary duties by the directors. Recovery will go to the corporation rather than the shareholder personally.

Answer 8

1. Standing (SH at time of wrong; maintain ownership throughout litigation; Adequately Represents the shareholders) 2. Demand: must make **written demand** to the board (90 days wait unless rejection or irreperable injury) UNLESS Demand is futile

Answer 9

Director has the duty to put the corporations interest before his own.

Answer 10

Rule: Transaction between the corp and a director (or relatives) or a business in which the director has an interest that would normally require approval of the board is a breach of duty of loyalty UNLESS: 1. **Ratification** disclosure of material facts + approval by majority of disinterested board members or shareholders. 2. **Substantively Fair**

Answer 11

A director/officer cannot usurp a corporate opportunity unless they first notify the board and wait for acceptance/rejection before seizing the opportunity. Measured by **interest or expectancy** or **line of business** test Remedy: damages, constructive trust, or corp gets opportunity at cost.

Answer 12

A director/officer that engages in a business that competes with the Corp is in breach of his duty of loyalty Remedy: Constructive Trust on profits or injunctive relief

Answer 13

Must act as a prudent person in like circumstances; must use any special skills

Answer 14

In the absence of fraud, illegality, or self dealing, the good faith actions of a director or officer will not be disturbed

Answer 15

Anyone with 50% of a corporations assets, or a controlling share when no-one has over 50%, owes a fiduciary duty to minority shareholders to not use their power in a way to disadvantage them.

Answer 16

Shareholders generally can't compel a payment of a dividend. To compel, shareholder must prove 1) funds legally available 2) bad faith on directors in refusal pay

Answer 17

No defense unless 1. Law **unavailable*** 2. D **reasonably relied** on invalid law 3. Mistake **negates mens rea**

Answer 18

Defense when mistake negates mens rea: 1. Specific intent - defense if **honest mistake** 2. General intent & Malice - defense if **honest & reasonable** mistake 3. Strict Liability - no defense

Answer 19

Government can ban commercial speech that is 1) **false or misleading** or 2) concerns **unlawful activity** Government can only regulated protected commercial speech if the government proves its regulation **directly advances a substantial government interest** *and* is not **more extensive than necessary** to serve that interest.

Answer 20

1. Discriminatory (favors in-state interests): Unconstitutional unless it furthers **legitimate state interest** *and* no **reasonable alternative** 2. Nondiscriminatory (undue burden): Unconstitutional if burden **clearly exceeds** local benefit.

Answer 21

A deed transfers an interest in real property once it has been **delivered** and **accepted** 1. Delivery: evidenced by the grantor's **intent to presently transfer an interest** to the grantee, even if the interest itself is a future interest; AND 2. Accepted - presumed if transfer benefits the grantee.

Answer 22

1. Physical delivery 2. Recording 3. Unconditional delivery to agent 4. Grantee obtains possession of deed May be rebutted by evidence that the grantor did not intend to presently transfer an interest to the grantee.

Answer 23

ABA: Allowed so long as 1) client consent; 2) fee is proportional CA: allowed so long as 1) not unconscionable 2. written consent 3) can't increase overall fee

Answer 24

Prohibits D/O/10%SH from purchasing/selling or selling/purchasing stocks in less than six months Corp entitled to recover maximum difference

Answer 25

New Claim: Arise out of the same conduct, transaction, or occurence set out in original pleading New Party: 1. Amendment asserts claim/defense that arose out of conduct/transaction/occurence in original pleading 2. notice given to new D within 90 days after original complaint 3. party to be brought in by amendment knew/should have known action would have been brought against him but for a mistake concerning the proper party's identity.

Answer 26

will be granted if all the evidence shows there is **no genuine dispute as to any material fact** and the movant is entitled to **judgment as a matter of law** Court must construe all evidence in the light most favorable to the nonmoving party and resolve all doubts in favor of the nonmoving party.

Answer 27

Reasonable Jury could return a verdict in favor of the nonmoving party.

Answer 28

1. **Valid Final Judgment on the Merits**: Valid=proper JDx (P and SM) and D had notice and opportunity to be heard. Final judgment=nothing further for the court to do but enter judgment. Merits=Summary judgment/JMOL/RJMOL/Full trial 2. Identical Cause of Action 3. Identical Parties

Answer 29

1. **Valid** proper JDx (P and SM) and D had notice and opportunity to be heard. 2. **Final judgment** nothing further for the court to do but enter judgment. 3. **Merits** Summary judgment/JMOL/RJMOL/Full trial

Answer 30

1. **Same Issue** (facts relevant to issue and applicable law must be identical) 2. **Actually litigated** 3. **Final Valid Judgment** 3. **Essential to Judgment** (issue constitutes a necessary component of the decision reached)

Answer 31

Permitted with regard to any matter relevant to any party's claim/defense in the action that is not privileged. It need not be admissible to be discoverable. Discoverable if it appears reasonably calculated to lead to the discovery of admissible evidence.

Answer 32

1. Served on all parties 2. Accompanied with certificate that movant has made good faith effort to M&C

Answer 33

Court will balance 1. Parties interest in seeking discovery 2. Privacy interests in the parties

Answer 34

Partner=agree to carry on as co-owners for profit. Receive share of profits=presumed partner (unless wages) Employee=hired by company, paid salary/wages to perform service, works at behest and direction of a business

Answer 35

Owners of an LLC

Answer 36

May arise from 1. Partnership Agreement 2. Authorization of the partners 3. Statement of authority filed with the state

Answer 37

Based on partner's reasonable belief that an action is necessary to carry out his express authority.

Answer 38

Exists if partnership holds a partner or employee out as possessing certain authority, thereby inducing others to reasonably believe that such authority exists. Look to RB of 3rd party.