Untitled Deck Flashcards
Personal jurisdiction can be
general (obtained by consent, presence, or domicile) or specific.
If the MEE fact pattern discusses a case that takes place in a federal court, start your essay as follows:
“Federal district courts may exercise personal jurisdiction to the same extent as the courts of general
jurisdiction of the state in which the district court sits.”
If the issue is specific personal jurisdiction, state:
“State courts of general jurisdiction may exercise
personal jurisdiction over nonresident defendants to the extent authorized by both the state’s long-arm
statute and the Due Process Clause of the Fourteenth Amendment of the U.S. Constitution.” “The Due Process Clause of the Fourteenth Amendment permits states to assert personal jurisdiction
over nonresident defendants who have established minimum contacts with the state such that the
exercise of personal jurisdiction would not offend traditional notions of fair play and substantial justice.”
Look for “purposeful availment” of the benefits and protections of the state. Then, examine the quality of
the contacts with the state.
First category of federal jurisdiction—federal-question jurisdiction:
The federal question must appear on
the face of the plaintiff’s well-pleaded complaint. It cannot appear in the answer. Further, the plaintiff
cannot merely anticipate a federal defense in its complaint. (On the MEE, this has virtually always been
tested with personal jurisdiction. And, the issue has always been the well-pleaded complaint rule!)
Second category of federal jurisdiction—diversity jurisdiction:
Cases may be brought under diversity
jurisdiction only if two requirements are met: (1) there must be complete diversity of citizenship between
the plaintiffs and defendants, and (2) the amount in controversy must be over $75,000.00. Note that
“complete diversity” is not required for class actions; rather, minimal diversity suffices
Note: look to see where the party is domiciled at the time the lawsuit is filed.
MEE note: Many essays focus on where a person is domiciled. Remember, a person is domiciled
“where it is her permanent home, a place where the person intends to remain indefinitely, and
the place to which the person intends to return when temporarily absent.”
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A corporation is
domiciled both where it is
incorporated and where its principal place of business is located.
Third category of federal jurisdiction—supplemental jurisdiction:
This is an issue when there is a
jurisdictional basis for one claim but not the other (e.g., a plaintiff brings a federal question claim and
tacks on a related state claim). Remember that a plaintiff cannot use supplemental jurisdiction to add a
claim against a nondiverse party if the sole basis for SMJ is diversity.
Venue is proper in a district where
(1) any defendant resides if all defendants reside in the same state, (2) in
a district where a substantial part of the events or omissions giving rise to the claim occurred, or (3) a
substantial part of property that is subject to the action is situated. (There are also narrow fallback rules
which, so far, have not been emphasized on the MEE.)
Issue preclusion:
issues that were actually litigated and decided and essential to the judgment in a
previous case cannot be litigated again.
Claim preclusion:
a claim that has been litigated to a final judgment on the merits cannot be relitigated
by the parties (or their privies).
Full faith and credit:
a state must recognize final judgments of other states so long as the judgment
is on the merits and the other state had jurisdiction.
Recognition of marriage:
A marriage which is valid under the law of the state where it was
contracted will be valid elsewhere unless it violates a strong public policy of the state that has the
most significant relationship to the spouses and the marriage. Some examples of what may violate
public policy include incest or polygamy. Examples of what do not violate public policy include blood
test requirements, marriage license requirements, and recognition of common law marriage. Common
law marriage is virtually always tested when this principle is tested. So, know that if the marriage is
recognized by the state where the couple entered into the marriage, it will be recognized by all
other states.
Jurisdiction over divorce vs. jurisdiction over spousal support and property division:
Personal
jurisdiction over both spouses is not necessary to render a divorce decree. The state rendering the
decree only needs jurisdiction over the plaintiff spouse. However, personal jurisdiction over both
spouses is necessary to issue a binding property division order or support order. (This embodies the
concept of a “divisible” divorce decree.)
Recognition of divorce:
a divorce decree must be granted full faith and credit by other states if the
court rendering the divorce decree had jurisdiction to enter it.
Which state’s law governs premarital agreements?
Some states will apply the law of the state
where the contract was executed. Other states (probably more numerous) apply the law of the state
with the most significant relationship to the parties and transaction.
Klaxon doctrine:
a federal district court sitting in diversity must apply the choice of law approach
prevailing in the state in which it sits.
Change of venue:
A court may transfer a case to any district court in which it could have been
brought if convenience and the “interest of justice” favor a transfer. When a case is transferred to a
more appropriate forum under this rule, then the new (transferee) court must apply the laws that
the original transferor court would have applied (including their state choice of law rules). Note that
the result is different if the case was initially filed in an improper forum and was transferred to a
proper forum: in that case, the transferee court would apply its own law, rather than the law of the
transferor court, since the transferor court would not have the power to hear the case in the first
place.
Conflict of laws + Corporations:
The law of the state of incorporation governs existence, structure, and internal
matters such as capacity, shareholder’s rights, etc. Rights and liabilities (external matters) are
determined by the state with the most significant relationship.
Conflict of laws + Validity of a will:
At common law, the validity of a will was determined under the law of the state
where the testator was domiciled at the time of his death. Under the Uniform Probate Code (UPC),
a will is valid if it complies either with the law of the state in which it was executed or with the law
of the place where the testator was domiciled when he signed his will or when he died. Many non-
UPC states have similar statutes.
Congress cannot, however, “commandeer” states and force states to enforce federal laws. Congress will
either have to regulate directly (if within its commerce power) or regulate indirectly by threatening to
take away funding if the state does not adopt a law (under Congress’s spending power).
States lack the power to discriminate against interstate commerce or unreasonably burden it. (This is
known as
the Dormant Commerce Clause or negative Commerce Clause.)
If a law discriminates against interstate commerce, it is invalid unless the state can show that
the law was necessary to serve a compelling state interest and there is no reasonable
nondiscriminatory alternative (strict scrutiny). ***A state law that discriminates against interstate
commerce is usually unconstitutional.
If a state law is nondiscriminatory on its face (i.e., it imposes the same burden on those in-state
and out-of-state) but it still burdens interstate commerce,
it is valid only if it serves an important
state interest and does not impose an unreasonable burden on interstate commerce. ***A state
law that merely burdens interstate commerce is more likely to be constitutional
A tested exception to the Dormant Commerce Clause is the market-participant doctrine
(i.e., the state is
acting as a market participant or business rather than regulator). If the state is acting as a market
participant, it is allowed to favor its own residents.
Congress’s powers are limited to those given to it by the Constitution. It has the power to
enforce constitutional rights under its enforcement power found in
the Thirteenth, Fourteenth, and Fifteenth
Amendments, but it does not have the power to expand rights.
state action is required in order to sue under the
First, Fourteenth, or Fifteenth Amendment.
General rule: If a plaintiff is suing under the First, Fourteenth, or Fifteenth Amendment (for free speech,
due process, Equal Protection Clause issues, or voting rights) the plaintiff needs to find
a government
actor or action “fairly attributable to the government.” (One cannot sue a business or a private individual
for, say, violating one’s free speech rights under the First Amendment.)
State action: state action is present when
a state passes a law, when a state permits its officials to take
action, when a private actor is performing a traditional and exclusive government function (e.g.,
conducting elections, or running a company town—this is pretty narrow), or when private action is
closely controlled by the state
the Equal Protection Clause has three standards to be aware of.
- Strict scrutiny
- Intermediate scrutiny
- Rational basis
Strict scrutiny:
The government must prove that the law is narrowly tailored (necessary) to achieve a
compelling interest. (The government usually loses under a strict scrutiny analysis.) Strict scrutiny applies
to fundamental rights, racial or ethnic discrimination, and alienage when the classification is made by the
state (though there are exceptions for alienage where strict scrutiny does not apply—e.g., if the public function
doctrine applies or if the law regulates illegal aliens).
Intermediate scrutiny:
The government must prove the classification is substantially related to an
important government interest. This applies to classifications regarding gender and illegitimacy.
Rational basis:
The plaintiff must prove that the law is not rationally related to a legitimate government
interest. (The plaintiff usually loses.) This applies to every other classification—poverty, wealth, age,
education, etc.
Time-place-or-manner restriction:
A restriction in a public forum—i.e., one historically
associated with free speech rights (e.g., streets, sidewalks, parks), or a designated public forum
(e.g., a school that opens its doors to after-school activities) must be content neutral, narrowly
tailored to serve an important governmental interest, and leave open alternative channels of
communication. A restriction in a nonpublic forum (e.g., airports, government workplaces, etc.)
must be viewpoint neutral and reasonably related to a legitimate governmental interest.
There is a presumption against a prior restraint (stopping speech before it
happens). If a law is overbroad (prohibits substantially more expression than necessary) or vague (a
reasonable person could not tell what is prohibited by the law), it is unconstitutional.
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Eminent domain.
Neither the federal government nor the state may take private property for
public use without just compensation. This arises from the Fifth Amendment and is applied to the states through
the Fourteenth Amendment. A “public use” is defined broadly and may include giving land to a private party for
commercial development.
Eminent Domain: A taking can be
physical or regulatory (e.g., an exaction). A physical taking occurs when there is a
permanent physical occupation regardless of what public interests it may serve.
When a regulation deprives an owner of all economically beneficial use of her property or destroys all
reasonable investment-backed expectations, it is a taking.
The Eleventh Amendment precludes
a federal court from exercising jurisdiction over a suit by a
private party seeking to recover damages from the state. There are exceptions to this (e.g., if a federal statute
properly abrogates immunity).
State this if Article 2 is tested:
“Article 2 of the Uniform Commercial Code (UCC) applies to transactions in goods. Goods are ‘things moveable’ at the time of identification to the contract. A contract under Article 2 may be made in ‘any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.’ ”
Offer:
A person makes an offer when the person communicates to another a statement of
“willingness to enter into a bargain” so that the other understands that “his assent to the bargain is
invited and will conclude it.” The terms of an offer need to be reasonably certain (e.g., as to parties,
subject matter, price, etc.)
Counteroffer:
at common law, a statement is a counteroffer, rather than an acceptance, when the terms of the initial offer are changed (mirror-image rule).
Promise to hold offer open:
Generally, an offer may be revoked before acceptance. A
promise to hold an offer open requires consideration in order to be binding (unless the
UCC firm offer exception applies).
Consideration:
Consideration is a legal detriment or bargained-for exchange. A promise to make a gift
does not constitute consideration.
Preexisting-duty rule:
Under common law, promising to perform a legal duty already owed
to a promisor is not valid consideration. Exceptions include if the duty is changed (even
slightly), unforeseen circumstances, etc.
Material benefit: some states recognize an exception to past consideration
limitations in which a promise is made after receipt of a significant benefit (usually
promise arises after a benefit received in an emergency).
UCC: under the UCC, only ______ is needed to modify a contract.
good faith
Gap fillers:
A contract for the sale of goods doesn’t fail because one or more terms are missing if
the parties intended to make a contract and there is an appropriate remedy for breach. Gap fillers
include course of performance, course of dealing, and trade usage.
Performance obligations:
Under common law, a party must “substantially perform” its contractual
obligations in order to demand performance (usually payment) from the other party. Courts will
look at several factors to determine whether performance was substantial.
Exception—divisible contracts: A contract is divisible so long as (1) it is apportionable and (2)
the parties would have contracted for each part separately. A party that performs one or more
parts of the contract may collect payment for those parts even if he does not substantially
complete performance of his duties.
Rejection of goods:
Revocation of acceptance of goods:
Rejection of goods: A buyer can generally reject goods for any reason under the perfect-tender
rule. (There are exceptions to this—e.g., installment contracts.)
- Revocation of acceptance of goods: If a buyer accepts the goods, he can no longer reject them.
But, a buyer can revoke his acceptance of the goods when: (1) the nonconformity substantially
impairs the value to him; (2) he accepted the goods because he had a reasonable belief the nonconformity would be cured (and it wasn’t), or he didn’t discover the nonconformity because the
nonconformity was difficult to discover, or because of seller’s assurances; (3) he revokes within a
reasonable time after he discovers or should’ve discovered the nonconformity; and (4) he revokes
before any substantial change in condition of the goods which is not caused by their own defect. A buyer who revokes his acceptance may recover the purchase price paid.
Anticipatory repudiation:
This occurs when there is an unequivocal manifestation by one party to
the other that the party cannot or will not perform its obligations under the contract (a mere
expression of doubt is not enough) and this statement is made before the repudiating party’s
performance is due. The other party may wait for a reasonable time for performance or resort to
any remedy for breach of contract.
Retracting a repudiation:
the party who has repudiated can retract his repudiation unless the other
party cancelled the contract, materially changed his position in reliance on the repudiation, or
indicated that she considers the repudiation to be final.
be familiar with the Statute of Frauds.
* State:
“A contract within the Statute of Frauds satisfies that statute and is enforceable if it is
evidenced by a writing signed by ‘the party to be charged,’ which (1) reasonably identifies the
subject matter of the contract, (2) is sufficient to indicate that a contract has been made, and (3)
states with reasonable certainty the essential terms of the contract.” Contracts that are within the
statute include (mnemonic=MYLEGS): contracts made in consideration of marriage, contracts that
cannot be performed in a year, contracts for the sale of an interest in land, promises by an executor
to pay a debt of an estate out of his personal funds, sale of goods for $500 or more (subject to
additional UCC rules, see next), and suretyship contracts.
UCC within the SoF:
A contract for the sale of goods for a price of $500 or more is not enforceable unless there’s
a writing signed by the party against whom enforcement is sought that is sufficient to indicate that a
contract for the sale of goods has been made between the parties. The writing need not contain all
terms of the contract, but it’s not enforceable beyond the quantity of the goods shown. Exceptions
to be aware of: merchant confirmatory memo, part performance, specially manufactured goods,
and judicial admissions.
General damages for breach of contract: State:
“The normal measure of damages for breach of contract
is expectation damages, which aim to give the nonbreaching party the benefit of his bargain.”
Expectation damages must be foreseeable and proven with reasonable certainty. This is similar to the
UCC rule, which puts the aggrieved party “in as good a position as if the other party had fully
performed.” A buyer may recover the difference between the cost to “cover” by purchasing in good faith
substitute goods and the contract price.
Mitigation:
as a general rule, a party cannot recover damages for a loss that the party could have avoided
by reasonable efforts.
Incorporation:
The articles of incorporation are filed with the state, and, if in conflict with bylaws,
the articles control. A corporation is not generally liable for a contract entered into prior to
incorporation unless it expressly or impliedly adopts (ratifies) the contract. The promoter (person
entering the contract on behalf of the to-be-formed corporation) is liable.
Shareholders:
Shareholders are only owners and do not manage the corporation. Thus, they
generally just have annual meetings. Written notice of meetings is required 10−60 days prior and
must state the time, place, and purpose of the meeting. Shareholders can vote by proxy (have
someone vote their shares for them) or by voting agreement. Generally, a quorum (majority of all
outstanding shares required to vote) must be present to hold a vote.
Directors:
Directors manage the corporation and (like shareholders) act as a body by voting.
Directors may exercise all corporate powers that are not limited by the articles of incorporation or
a shareholders’ agreement, including the power to form contracts and acquire liabilities.
Shareholders hire and fire directors. Directors cannot vote by proxy or agreement. A quorum
(majority of directors) needs to be present for a vote to take place, but unlike shareholders,
directors can “break quorum” by leaving. Notice is required only for special meetings.
Duty of care—business-judgment rule:
There is a presumption that “in making a business decision,
the directors acted on an informed basis, in good faith and in the honest belief that the action taken
was in the best interest of the company.” Directors must be informed to an extent that they
reasonably believe is appropriate. They are entitled to rely upon information, opinions, reports, or
statements of corporate officers, legal counsel, public accountants, etc., in making a decision. A
party claiming that the directors breached their duty of care has the burden of proof.
Duty of loyalty:
A director must act in good faith and with a reasonable belief that what he does is
in the corporation’s best interest. The business-judgment rule presumption does not apply if there
is a duty of loyalty issue.
A duty of loyalty issue arises in three ways (mnemonic=BCC):
▪ Director is on both sides of a transaction: a director has a material financial interest in a
contract, as well as knowledge of that interest, yet still votes to approve the contract.
(J2022, F2022, J2019, J2015, F2009, F2008, J1995)
▪ Competes with corporation: a director may not compete with his corporation. (J2013)
▪ Corporate opportunity: a corporate officer may not usurp a corporate opportunity.
Defenses to liability for breach of the duty of loyalty: The Revised Model Business Corporation
Act (MBCA) includes three safe harbors that may protect a director who breaches his duty of
loyalty:
(1) approval by disinterested (qualified) directors (if all relevant information is disclosed),
(2) approval by disinterested (qualified) shareholders, or
(3) if the transaction is judged to be fair to the
corporation at the time it was entered into. A qualified director is a director without a conflicting
material interest. Qualified shares are those not held by a conflicted director or related person.
Waiver of duty in an LLC:
an LLC operating agreement may waive the duty of loyalty (e.g., allow members to open competing businesses) so long as it is not “manifestly unreasonable.”
Lawsuits by shareholders against the corporation:
A shareholder may file an action to establish
that the acts of the directors are illegal, fraudulent, or willfully unfair and oppressive to either the
corporation or the shareholder. Whether a suit is appropriately brought as a direct or derivative
action depends on the injury.
Direct suits:
A direct suit is appropriate when the wrong done amounts to a breach of duty
owed to the individual personally. (E.g., shareholder sues for denial of preemptive rights,
payment of a dividend, or oppression in a close corporation.) Recovery from a derivative
lawsuit goes to the corporation, not the shareholder.
Derivative suits:
A derivative suit is appropriate when the injury is caused to the
corporation and a shareholder is trying to enforce the corporation’s rights. (This also
applies to LLCs.)
Filing a derivative lawsuit, extra requirements:
A shareholder may not
commence or maintain a derivative suit unless three requirements are met
(mnemonic=SAD): (1) standing to bring a lawsuit, (2) adequacy (the shareholder represents the interests of the corporation), and (3) demand (generally, the
shareholder should file a written demand and wait 90 days before filing suit unless irreparable injury would result or demand would be futile). Standing requires the shareholder to be a
contemporaneous owner at the time of the alleged act or omission. A derivative suit can be dismissed with court approval if it’s not in the best interest of the corporation to continue it.
Lawsuits against shareholders—piercing the corporate veil:
Generally, the law treats a corporation
as an entity separate from its shareholders, even where one individual owns all the corporate stock.
In some (very limited) circumstances, courts will disregard the LLC form and hold a shareholder
personally liable for corporate debt. To do so is called piercing the corporate veil. It is only allowed in
close corporations and LLCs. Generally, a plaintiff must show that shareholders of the corporation
or members of an LLC abused the privilege of incorporating and fairness requires holding them liable.
One generally needs to show undercapitalization of the business, failing to follow formalities,
commingling of assets, confusion of business affairs, or deception of creditors. Only the
shareholders or members who participated in the wrong are personally liable.
A shareholder has a right to inspect corporate books and records as long as his demand is made in
good faith and for a proper purpose.
A proper purpose is a purpose reasonably related to a person’s
interest as a shareholder (e.g., shareholder articulates a purpose to address “economic risks” to the
corporation). A shareholder must state (1) his purpose, (2) the records he desires to inspect, and (3)
that the records are directly connected to his purpose.
LLC Formation, rights, and duties:
Articles of organization must be filed to create an LLC. Since LLCs
are a relatively new form of business association, courts tend to analyze them in the context of
corporate or partnership law. Members of an LLC have fiduciary duties. Members of an LLC in a
member-managed LLC are treated as agents of the LCC (with actual and apparent authority to bind
the LLC in ordinary—but not extraordinary—affairs).
LLC Dissociation:
if a member leaves, then it leads to dissociation of that member, but it does not lead
to winding up or dissolution unless the other members unanimously agree to dissolve the LLC.
LLC Liability:
Generally, individual members are not liable for losses. They are liable if the court decides
to pierce the LLC veil (discussed above) or if proper procedures for dissolution and winding up have
not been followed. (Creditors may enforce claims against each of the LLC members. However, a
member’s total liability may not exceed the total value of assets distributed to the member in
dissolution.)
Know the basic elements of a crime—act, intent, causation and concurrence. Causation
has been tested twice on the MEE (both times combined with murder), and both times causation was
present. Causation:
Causation requires showing that the defendant’s acts were both the actual and proximate cause of
the outcome. Proximate cause is present if the outcome was foreseeable.
understand what accomplice liability is and what it requires.
- A person is guilty as an accomplice if he assists or encourages the principal with dual intents: (1) the
intent to assist the primary party, and (2) the intent that the primary party commit the offense
charged. Remember a person is not liable for accomplice liability—they are liable for the crime
committed through the theory of accomplice liability.
Introduction to murder: state:
“In order to be guilty of murder, the defendant must have the mens
rea of malice aforethought which is satisfied in most jurisdictions with intent to kill (first-degree),
with knowledge that his acts would kill (first-degree), with intent to inflict great bodily harm
(second-degree), or with reckless disregard of an extreme risk to human life (second-degree).”
First-degree murder:
this is the intent to kill with premeditation and deliberation. Some states
follow the rule that premeditation and deliberation require proof of a cool mind capable of
reflection and some period of reflection. Other states follow the view that premeditation and
deliberation can occur in an instant and can be inferred from circumstantial evidence (e.g., using a
deadly weapon).
Second-degree murder:
This is satisfied by the intent to inflict great bodily harm or by acting with
reckless disregard of an extreme risk to human life (depraved heart murder). (Note: it is also the
catchall—i.e., when an act constitutes “murder” but is not quite first-degree.)
Note that the requirement for depraved heart murder usually requires that the defendant
acted recklessly and that the defendant’s conduct shows a “high degree of indifference to
the value of human life.”
Felony murder:
This applies to any killing that occurs during the commission of a felony, an attempt
to commit a felony, or a flight from a felony. The felony must be inherently dangerous, and the purpose of the felonious conduct must be independent of the homicide.
Voluntary manslaughter:
an intentional killing of a human being without malice aforethought
committed in the heat of passion due to adequate provocation.
Involuntary manslaughter (misdemeanor manslaughter):
The defendant causes the death of
another human being by engaging in conduct that creates an unreasonable risk of death or serious
bodily injury. The majority view is that the defendant must have acted “recklessly.” Some states say
that “gross negligence” is enough.
Insanity:
The majority of states use the M’Naghten test. The defendant must prove he suffered a
disease of the mind that caused a defect of reason, and as a result he lacked the ability to know the
wrongfulness of the actions or understand the nature and quality of his actions.
General rule: The Fourth Amendment applies to searches or seizures conducted by government
agents in areas where the complaining individual has a
reasonable expectation of privacy. An agent
usually needs a warrant. However, there are many exceptions, including exigent circumstances,
search incident to arrest, consent, the automobile exception, plain view, inventory searches, special
needs, and Terry stops/frisks.
Sixth Amendment—right to counsel
The Sixth Amendment, as applied to the states through the Fourteenth Amendment,
provides that the accused has the right “to have Assistance of Counsel for his defense.”
▪ It attaches when judicial proceedings have begun—i.e., when the accused is formally
charged via indictment, arraignment, preliminary hearing, etc. It does not attach upon
arrest. It applies to all “critical stages” of the prosecution after formal charges are filed.
▪ Once it attaches, any attempts to deliberately elicit an incriminating statement about the
offense that the defendant was charged with, in the absence of counsel or a knowing,
intelligent, and voluntary waiver, violates the Sixth Amendment.
A valid Miranda waiver:
The suspect must make a “knowing, intelligent, and voluntary”
waiver. This is a low bar
A valid Miranda invocation:
for both the right to remain silent and the right to counsel, the
suspect must be explicit, unambiguous, and unequivocal in making the request (e.g., “I
think I need a lawyer” is not enough).
If a Miranda violation occurs:
The statements are excluded from the prosecutor’s case-in-chief. The
physical fruits are not excluded if the statements were made voluntarily.
If the decedent’s spouse and parents do not survive the testator, there are two available schemes to
divide property among the decedent’s children:
per capita at each generation (where all cousins will be
treated alike) or per capita with representation (modern per stirpes) (where a child will simply take his
parent’s share).
Per capita at each generation:
To decide who gets the shares of the estate, find the first
generation where there are issue living. Give one share for each such living issue and one
share for each person in that generation who predeceased the decedent but left issue
surviving. Combine the shares belonging to the deceased persons and distribute them
equally at the next generational level. (Cousins are treated alike.)
Per capita with representation (modern per stirpes):
this is the same as above except
instead of combining all shares and dividing them equally, simply pass each deceased
person’s share on to her issue(s). (Cousins are not treated alike.)
If there is no spouse and no children, there are two methods of determining heirship—
the civil law
consanguinity method and the parentelic method adopted by the UPC. Under the consanguinity method,
heirship is determined by degree of relationship: all persons of the same degree of relationship to the
decedent take equal shares (so an uncle and a niece are in the third degree of consanguinity and would
be heirs entitled to equal shares). Under the parentelic method, descendants of the decedent’s parents
take to the exclusion of descendants of the decedent’s grandparents (so a niece would be an heir but an
uncle would not).
Wills General rule:
Many state laws require that the will is in writing, signed by the testator, and witnessed by
two witnesses. They also require that the testator is 18 or older and intend that the document is his will.
Note: generally, any mark that is made with intent to adopt the will counts as a signature.
Holographic wills:
Holographic wills are unwitnessed wills. Holographic wills are valid if signed and
(according to the UPC and some states) if the material portions are in the testator’s handwriting.
Holographic wills are recognized by about half the states. Mention this doctrine if you see an
unwitnessed will on the MEE.
(Wills) Dispensing power:
the UPC adopts the dispensing power under which a court can validate a will so long
as there is clear and convincing evidence that the decedent intended the document to be her will.
Incorporation by reference:
A writing that is not valid as a will may be incorporated by reference into a
will if the will manifests an intent to incorporate the writing and the writing is identified with reasonable certainty. This writing must exist at the time the will is executed. (The UPC and some states recognize the
right of a testator to dispose of tangible personal property by a signed memorandum, whether it is
prepared before or after the execution of the will, even if it does not comply with the formalities of a
will.)
Revocation by physical act (e.g., by execution of a new will or by some other physical act, such as
cancellation or other writings on the will):
This must be done with the intent to revoke the will. The
testator or someone acting at the testator’s direction and in his “conscious presence” may revoke the
will. (
Dependent relative revocation:
Under this doctrine, a first will isn’t revoked if a later will is found invalid.
Essentially, if a testator revokes a will or bequest based on a mistaken assumption of law or fact, the
revocation of the will is ineffective if it appears that the testator wouldn’t have revoked the bequest had
the testator had accurate information.
(Wills) Divorce:
Divorce revokes gifts in favor of a spouse. Note: there actually needs to be a divorce (or
annulment)—not just a filing of divorce
When a gift fails because the beneficiary is not alive:
The general rule is that if a beneficiary does not
survive the testator, the gift will lapse or fail and fall into the residuary. However, all states have antilapse
statutes (which keep gifts in the family). Under a typical antilapse statute, if a beneficiary dies before the
testator and was both related by blood to the testator within a certain degree of relationship and had
issue who survived, the gift to the deceased beneficiary is saved and the beneficiary’s issue will take in
lieu of the beneficiary.
Slayer statute:
An individual who feloniously and intentionally kills the decedent, or who is convicted of
committing abuse, neglect, or exploitation with respect to the decedent, forfeits all benefits with respect
to the decedent’s estate (including an intestate share, an elective share, an omitted spouse’s or child’s
share, etc.). Voluntary manslaughter is a form of a felonious and intentional killing. Note that if a
beneficiary accidentally kills the decedent (even if it rises to involuntary manslaughter), the slayer rule
does not bar a gift. Nor does it apply if the slayer murdered someone other than the decedent. Note:
when this is tested on the MEE, generally this doctrine does not bar a gift to the slayer (usually because the
killing is not felonious and intentional!).
(Wills) When a gift fails because the property no longer exists—ademption:
If specifically devised property (i.e.,
property that is specifically described in the will) is not in the testator’s estate when the testator dies, the
bequest adeems—i.e., the gift fails. Under many statutes, if the testator replaced the property, or if there
were insurance proceeds unpaid at death, then the beneficiary would receive that in place of the
property.
(Wills) Disclaimers:
Disclaimed property (property that a beneficiary does not want) will pass as if the person
disclaiming had failed to survive the testator. An antilapse statute may apply; otherwise, the gift will fall
into the residuary.
Abatement:
when the assets of an estate are insufficient to satisfy all the gifts made by someone’s will,
then the gifts to the beneficiaries will be reduced (abated) in the following order: intestate property,
residuary gifts, general gifts, and specific gifts.
Mental capacity:
A testator must have capacity to execute a will. The burden of proving that the testator
lacks mental capacity rests on the contestant. A testator meets this requirement if the testator knows (1)
the nature and extent of his property, (2) the persons who are the natural objects of the testator’s bounty
(i.e., family members), (3) the nature of the instrument that the testator is signing, and (4) the disposition
that is being made in the will.
Undue influence:
This is present when the wrongdoer exerts such influence over the testator that it
overcomes the testator’s free will and causes the testator to make a gift he would otherwise not have
made. The burden of establishing undue influence generally is on the will contestant who must show the
following (mnemonic=SODA): (1) the testator was susceptible to undue influence, (2) the alleged
influencer had the opportunity to exert undue influence, (3) the alleged influencer had a disposition to
exert undue influence, and (4) the will appears to be a product of undue influence. Most courts only
invalidate portions that are infected by undue influence.
if there is a hearsay question (which is by far the most highly tested topic in Evidence essay
questions), remember to use the DIA approach in your answer to get the most points.
* D: Define hearsay.
* I:
* A:
- D: Define hearsay. Hearsay is “a statement, other than one made by the declarant while testifying at the
trial or hearing, offered in evidence to prove the truth of the matter asserted.” - I: State why it is important to determine if a statement is hearsay. Hearsay is not admissible unless it
comes within an exception. - A: Analyze exceptions.
Some of the commonly tested hearsay exceptions and exclusions are as follows:
▪ Excited utterance: an excited utterance is a “statement relating to a startling event or
condition made while the declarant was under the stress or excitement that it caused.”
▪ Present sense impression: a present sense impression is “a statement describing or
explaining an event or condition made while or immediately after the declarant perceived
it.”
▪ Statement for purpose of medical treatment or diagnosis: these statements must be made
for and reasonably pertinent to medical diagnosis or treatment and describe medical
history, past or present symptoms or sensations, their inception, or their general cause.
▪ Business records: A record of “acts, events, conditions, opinions, or diagnoses” is
admissible if it is made “at or near the time” of the event recorded by a “person with
knowledge” of the event. Further, the making of the record must occur in the course of a
regularly conducted business activity, and it must be the regular practice of the business to
make such a record.
▪ Recollection recorded: a record that is on a matter that the witness once knew about, but
now cannot recall well enough to testify fully and accurately, which was made while the
matter was fresh in the witness’s memory, may be read into evidence (however, the
proponent may not offer it as an exhibit).
▪ Then-existing state of mind exception: if a statement shows a declarant’s mental,
emotional, or physical condition (including motive, intent, or plan) it is not hearsay.
▪ Prior statement of identification hearsay exclusion: a witness’s prior identification is not
considered hearsay.
▪ Opposing party’s statement: a statement made by an opposing party offered against that
party is not hearsay.
▪ Statement against interest: A statement that a reasonable person in the declarant’s
position would have made only if the person believed it to be true because, when made, it
had a tendancy to expose the declarant to civil or criminal liability. The declarant must be
unavailable.
▪ Public records may be admitted in some circumstances but not matters observed by law
enforcement personnel when proffered by the prosecutor against the defendant in a
criminal case.
Lay witnesses must have personal knowledge to testify. Expert witnesses need not.
- General rule: A witness must have knowledge of the matter she testifies about. A lay witness must have
personal knowledge. Her opinion must be rationally based on her perception; helpful; and not based on
scientific, technical, or specialized knowledge. An expert witness does not need personal knowledge but
can instead testify based on facts he has been made aware of at trial or through some other means (e.g.,
facts not on the record if other experts would rely on them).
Character Evidence in Criminal cases:
Generally, character evidence is inadmissible in the prosecutor’s case-in-chief to prove
that the defendant acted in conformity with his own character. However, the defendant in a criminal case
may introduce evidence of a pertinent (relevant) character trait to prove that he acted in conformity with
his character at the time in question. He can do this by reputation or opinion. Then, the prosecutor may
rebut by using reputation, opinion, or cross-examining the defendant’s witness by asking about specific
acts.
Generally, character evidence is not admissible to prove conformity. It is rarely admissible in
civil cases (it must be an “essential element”) and is only admissible in criminal cases when the defendant opens
the door.
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Sixth Amendment Confrontation Clause
If a statement is testimonial, the declarant is unavailable, and the defendant did not have the opportunity
to cross-examine the declarant, then admission of the statement will violate the defendant’s right to
confrontation. Note: a statement is not “testimonial” if the primary purpose of the statement is to
address an ongoing emergency
so far on the MEE, when the question requires examinees to know whether Article 9
applies, the answer has been yes—even if the parties do not call the transaction a “security interest.”
- Article 9 applies to all security interests in personal property or fixtures by contract. The words
“security agreement” do not have to be specifically stated for one to exist. Article 9 also applies to
lease agreements that are not true leases (but instead, security interests).
Be familiar with the methods of perfection, especially filing a financing statement and
automatic perfection (as these are the two most commonly tested methods).
- Perfection can occur by filing a financing statement. It can be automatic in some cases (e.g., a PMSI
in consumer goods). Or, an interest can be perfected by possession or control.
Be able to articulate when attachment occurs. Recognize that attachment is a
prerequisite to a security interest arising and that three criteria must be met.
* Requirements of attachment:
(1) value must be given by the secured party to the debtor (e.g., a
loan); (2) the debtor must have rights in the collateral; and (3) there must be a binding security
agreement which requires (mnemonic=AID): authentication, intent to create a security agreement,
and a description of the collateral.
After-acquired property:
the general rule is that a security agreement can cover after-acquired
property and does not need to specifically reference it to be effective
When two secured parties have a security interest in the same collateral, the first to file
or perfect has priority. If no party perfects,
then the first to attach has priority. Know that a perfected
security interest beats an unperfected one—even if one has an unperfected PMSI.
Know what happens when a debtor sells collateral subject to a security interest or if a
judicial lien creditor acquires an interest. Be able to identify that a buyer in the ordinary course of business
generally does not take the collateral subject to the security interest, whereas a buyer not in the ordinary
course of business generally does (unless the interest was not perfected and he does not otherwise know
about it).
A buyer in the ordinary course of business:
A buyer not in the ordinary course of business:
A buyer in the ordinary course of business: A buyer in the ordinary course of business generally
takes free of any security interest created by the buyer’s seller, even if the security interest is
perfected and the buyer knows of its existence. (Note that the buyer is not in the ordinary course
of business if he knows that the sale is in violation of a term in the security agreement.)
A buyer not in the ordinary course of business: A buyer not in the ordinary course of business
takes collateral subject to a perfected interest. Generally, he does not take subject to an
unperfected interest if he gives value and does not know about the interest.
Consumer to consumer goods (garage sale) exception:
A buyer not in the ordinary course
of business takes free of a security interest even though perfected, if he buys without
knowledge of the security interest; for value; and for his own personal, family, or
household purposes unless, prior to the purchase, the secured party has filed a financing statement covering the goods. The goods must be consumer goods both when the seller has
them and when the buyer buys them for this to apply.
When a lien creditor is involved:
The general rule is that, as between a secured party and a lien
creditor, priority belongs to the secured party, provided it perfects before the lien arises. If the
interest was unsecured or only perfected after the lien creditor served the writ, then the lien
creditor has priority.
know the steps that a secured creditor takes to foreclose on its collateral.
- Default: if a default occurs, the lender can demand payment or use self-help to reclaim the goods
so long as it does not breach the peace.
Breach of peace: There are several factors to examine to determine if the lender has breached the
peace, including whether the repossession took place at the debtor’s premises and whether the
debtor objected. Some courts also look at whether trickery was used. Some courts say that any
objection (even if slight and even if only verbal) amounts to a breach of the peace.
* Resale: The secured party may sell or dispose of the collateral in a commercially reasonable way.
The security interest is discharged when this occurs, but the debtor is liable for any deficiency. The
obligation owed to the disposing secured party and any junior liens are paid off. (Senior liens
remain on the collateral.)
Be familiar with the debtor’s means of protecting itself and the remedies available if the
secured party fails to comply with the requirements. These are tested in detail on the MEE.
- Debtor’s means of protection #1: the sale must be commercially reasonable.
- Debtor’s means of protection #2: The debtor must receive written notification of the sale. The
debtor and perfected secured parties (or secured parties who have notified the secured party of
their interest) must know when the chance to redeem the collateral is going to pass. (This is not
necessary if the collateral threatens to decline rapidly.)
▪ Timeliness of notification: this is generally a question of fact, but in a nonconsumer
transaction, a notification sent 10 days or more before the disposition (sale) is considered
reasonable.
▪ Content of notification: In nonconsumer transactions, the notification of disposition should
describe the debtor and the secured party and the collateral, state the method of
disposition, and state that the debtor is liable for unpaid indebtedness as well as a charge
for accounting. In consumer transactions, the notification must additionally contain a
description of any liability for a deficiency, a telephone number that the consumer can call
to discover the amount owed, and a telephone number or mailing address from which the
consumer can get additional information about the disposition and the obligation.
Remedies if secured party fails to comply with above requirements
▪ Remedy #1: Damages (including consequential damages, but the debtor has a duty to
mitigate). If the collateral constitutes consumer goods, statutory damages are awarded.
▪ Remedy #2: Sale. A court may order a sale.
▪ Remedy #3: Rebuttable presumption:
* Nonconsumer transaction: if there is a failure to comply with these
requirements and the secured party fails to show that the sale was
commercially reasonable, then there is a rebuttable presumption that the
collateral is worth the amount of the debt and the debtor’s deficiency is
nothing.
- Consumer transaction: There are two approaches that courts follow: the
absolute bar rule (the creditor’s noncompliance bars any recovery of deficiency)
or the rebuttable presumption rule (same as previous bullet point).
Key principle #1: regarding validity of a trust, most MEE answers state:
“a trust of personal property is valid if it
has a trustee, a beneficiary, and trust property.”
Under the Uniform Trust Code (UTC), the default rule is that a trust is revocable. An
irrevocable trust can still be terminated or modified in some circumstances
Presumption of revocability:
Termination by settlor:
Termination by beneficiaries after settlor dies:
Presumption of revocability: under the UTC, an inter vivos trust is revocable unless the instrument
expressly states otherwise. (J2022, F2017, J2007)
* Termination by settlor: a settlor may terminate the trust if all beneficiaries are in existence and all agree
to the termination.
* Termination by beneficiaries after settlor dies: Generally, even an irrevocable trust can be terminated if
both the income beneficiaries and the remaindermen unanimously consent and if there is no material
purpose of the trust yet to be performed. Claflin v. Claflin
Pourover will:
A will that makes a gift to a trust is valid so long as the trust is identified in the will and the
terms are incorporated in a writing executed before or concurrently with the execution of the will. Under
the modern approach, later made amendments to the trust are valid. Under common law, amendments
made after execution of the will are not valid. You are expected to articulate the differences between
these two approaches on the MEE
Discretionary trust:
The trustee has discretion to decide when to make a distribution to a beneficiary.
The beneficiary cannot demand any part of the income or principle. Nor can a creditor, unless it shows
the trustee acted dishonestly or in a state of mind “not contemplated” by the settlor. (There is an
exception under the UTC for child support or alimony.)
Support trust:
trustee must pay what is necessary for the beneficiary’s support.
Spendthrift trust:
Right of a creditor:
a spendthrift trust restrains “both the voluntary and involuntary transfer of a
beneficiary’s interest.”
▪ Right of a creditor: generally, a creditor may not reach (i.e., by garnishment or attachment)
part of a beneficiary’s distribution prior to the beneficiary reaching it.
▪ There are some favored creditors that are exceptions to this rule: (1) a child or spousal
support creditor (for maintenance and support), (2) a judgment creditor who has provided
services for the protection of a beneficiary’s interest in the trust (e.g., a lawyer), (3) a claim
of the state or United States (usually for taxes), and (4) creditors with claims for necessaries
in some states (this fourth category is not recognized in states that follow the UTC).
Charitable trust:
A charitable trust may be created for a charitable purpose (including for the relief of
poverty, the advancement of education, the advancement of religion, the promotion of health,
governmental or municipal purposes, or other purposes that are beneficial to the community). It must
have a large number of not readily identifiable individuals (rather than a few identifiable individuals).
Note that a charitable trust is not subject to the common law rule against perpetuities. (
Modifying a charitable trust:
A charitable trust may terminate if the charitable purpose
becomes unlawful, impracticable, or impossible. However, cy pres may save the trust. Cy
pres is a common law doctrine that is also a part of the UTC. It states: if a particular
charitable purpose has become unlawful, impracticable, or impossible to achieve; no
alternative charity is named in the trust; and the court finds that the settlor had general,
rather than specific, charitable intent, then the court may apply cy pres to modify or
terminate the trust by directing that the trust property be distributed in a manner
consistent with the settlor’s general charitable intent.
Honorary trust:
This is a trust that does not have a charitable purpose or a definite beneficiary. It is often
a trust to take care of a thing (e.g. cemetery plot) for a noncharitable purpose. Under the UTC, this is
valid but may not be enforced for more than 21 years. Under common law, such a trust would not be
valid if it violates the rule against perpetuities, but a court may characterize the trust as a “power” and
allow the trustee to exercise that power in accordance with the trust terms for 21 years
Trusts - Duty of loyalty:
a trustee has a duty of loyalty to act in the best interest of the beneficiaries.
(trusts) Duty of care—prudent administration
▪ Uniform Prudent Investor Act (UPIA): Almost all states have adopted a form of the UPIA.
The UPIA states that a trustee must “administer the trust as a prudent person would . . .
using reasonable care, skill, and caution.”
▪ Entire estate portfolio examined to determine prudence: a trustee’s investment and
management decisions with respect to individual assets should be evaluated in the context
of the portfolio as a whole and as a part of an overall investment strategy rather than in
isolation.
▪ Duty to diversify: This is one of the hallmarks of prudent investing. The trustee is not liable
for declines in value due to a downturn resulting from general economic conditions—but is
liable for failure to diversify absent directions to the contrary.
Remedies for a breach of trust:
The remedies include: Suspending or removing a trustee, decreasing
compensation, compelling a trustee to perform trust duties, compelling payment of damages, etc. (There
are several other remedies, including asking the court to “order any other appropriate relief.”)
In a self-dealing case, the trust beneficiaries may rescind the transaction and ask for
the self-dealing
purchase to be set aside (the trust property is returned to the trust and the amount paid is refunded by
the trust) or recover any profits the trustee made by reason of the breach.
know the difference between general and special powers of appointment.
* Purpose:
a person writing a will or trust can give her beneficiaries a power of appointment, which
enables the beneficiary to designate who will receive specific property.
General power of appointment: the class of people that the beneficiary can exercise the power of
appointment in favor of is unlimited (she can use it for herself, her creditors, or someone else).
▪ Majority view: In most states, a general residuary clause in a will (“I give all of my estate . . .
”) does not exercise a power of appointment. However, if the general residuary clause is
coupled with a blanket exercise clause (e.g., “including all property over which I have a
power of appointment”), any power of appointment held by the donee is exercised, unless
the donor of the power specifically requires reference to it.
▪ Minority view: a general testamentary power of appointment can be exercised by general
language in the beneficiary’s will (such as the residuary clause) even if it makes no
reference to the power in the instrument (e.g., “Everything to my husband”—the husband
will get it), unless the creating instrument of the power made an express gift in default or
the instrument stated that the power needed to be specifically mentioned
Special (or limited) power of appointment:
The class of people that the beneficiary can exercise the
power in favor of is limited. A special testamentary power needs to be specifically exercised. The Uniform Probate Code (UPC) adopts a substantial compliance rule which says that if it could be shown
that the powerholder intended to exercise a power, a blanket exercise clause may be sufficient.
be familiar with the different approaches to giving gifts to a class.
- Rule of convenience:
- UPC approach:
- Common law approach:
- If you see a gift to a class in a Decedents’ Estates question:
- Rule of convenience: when a gift is made to a group, such as “my children,” the class closes when at least
one member is entitled to distribution. - UPC approach: The UPC states that when a class gift is made, each living beneficiary will take their share
and the deceased beneficiary’s share will pass to their surviving descendants. (If there are no surviving
descendants then the gift will fail.) Note: this applies even if the beneficiary is not related to the settlor
(and thus differs from most antilapse statutes). - Common law approach: Under the common law, if the gift or remainder to a deceased beneficiary has
already vested and there is no applicable statute, then it will go to whomever the instrument says it
should go to or whomever the deceased person has specified in their will or through intestacy. (This also
applies to gifts that are not made to classes.) - If you see a gift to a class in a Decedents’ Estates question: if a testator gives a gift to a group of
unrelated individuals and one predeceased him, the deceased would not take, and neither would his
descendants, unless the antilapse statute saved the gift.
Which state’s law governs premarital agreements?
Some states will apply the law of the state
where the contract was executed. Other states (probably more numerous) apply the law of the state
with the most significant relationship to the parties and transaction.
dissolution does not end a partnership—it ends once winding up is complete.
Step one—dissociation: The dissolution of a partnership is the change in the relation of the partners.
Prior creditors are entitled to personal notice of the dissolution of the partnership. Others who knew of
the partnership are entitled to newspaper notice. Note that a partner can withdraw from a partnership
by giving notice at any time. This will trigger dissolution in an at will partnership.
* Step two—winding up: This is where partnership assets are liquidated and creditors are paid. Note that
partners are still liable for any liabilities that occur during the winding up phase.
* Step three—termination: this is the true end of the partnership!
If a creditor has a claim against a partner, the creditor can obtain an interest in the partnership.
This includes profits but not management or voting rights. If a creditor has a claim against the partnership, the
creditor can try to collect from the individual partners. These principles are heavily tested!
Partners are jointly and severally liable for the obligations of the partnership. Even if a partner enters a
contract without actual authority to do so, the partnership and partners are bound (so long as the
partner had apparent authority). The creditor must obtain a judgment against the partners personally to
go after each partner’s personal assets. The creditor should try to collect from the partnership before
seeking partners’ personal assets.
Partnerships other than general partnerships must file a certificate with the state to be
properly formed. Liability is limited.
- Limited liability partnership (LLP): no partner is personally liable for the obligations of the partnership
(but partners are liable for their personal torts). - Limited partnership (LP): At least one general partner must be listed on the certificate filed with the
state. Limited partners have limited liability (limited to their capital contributions). General partners are
liable for all partnership obligations and manage control of the business. If a general partnership converts
into an LLP, then partners remain jointly and severally liable for actions that took place before the
conversion.
Vicarious liability of employer (respondeat superior): The employer is liable in tort for the acts of an
agent or employee if the agent or employee (mnemonic=SMI)
▪ was acting in the scope of employment;
▪ made a minor deviation (a detour) from employment (rather than a frolic); or
▪ committed an intentional tort only if it was (mnemonic=BAN) for the principal’s benefit,
because the principal authorized it, or one that arose naturally due to the nature of
employment. The agent is liable too under a theory of joint and several liability.
Indemnification:
the principal can recover against the agent for indemnification if the agent acts
beyond his authority.
- Direct liability of principal:
the principal is directly liable for his own negligence if he negligently
hired the agent, failed to fire the agent, or failed to properly supervise the agent.
Note that actual and apparent authority are heavily tested in Agency and
Partnership questions. Remember that partners in a general partnership generally have actual and
apparent authority to bind the partnership in contracts entered into in the ordinary course of business.
The same applies to members in an LLC.
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