Contents

Contracts & Sales 17

Corporations 19

Criminal Law 23

Criminal Procedure 27

Secured Transactions 41

Torts 45

Trusts 49

Wills & Decedent’s Estates 52

Agency

Creating Agency Relationship

Creating an agency relationship requires (1) Assent – principal and the agent manifest assent to work with one another (2) Benefit – the agent agrees to work for the principal’s benefit and (3) control – the agent agrees to work subject to the control of the principal. No consideration is required to create an agency relationship. However, an agency relationship can be terminated in many ways including the principal manifesting a desire to discontinue the relationship. If one of the parties disclaims that an agency relationship existed, the Crts will look to manifestations of assent.

Who is the principal?

Any person or entity that has legal capacity can be a principal. Exceptions minors and anyone incapacitated by illness or intoxication cannot be a principal. Unincorporated associations cannot be principals because they lack legal capacity.

Generally, employers exert a great amount of control over their employees conduct and have control over their day to day activities such as giving them tools to work at the workplace, paying them on a structured pay period and directing the ways in which the employees should finish and perform the tasks.

Who is the Agent?

A person or an entity who has minimal capacity and a minor may serve as an agent so long as they can (1) assent to the agency relationship, perform the tasks on behalf of the principal and are subject to the principal’s control.

An independent contractor is one who, by virtue of his contract, possesses independence in the manner and method of performing the work he has contracted to perform for the other party to the contract. Independent contractors are usually paid by the job instead of receiving ongoing salaries; the individual who hires an independent contractor typically does not supervise the contractor’s activities or retain a right to control his activities.

Contract Liability

A principal is liable for the contracts that an agent enters on behalf of the principal when the principal has authorized the agent to enter into the contract and the agent acted with legal authority. An agent acts with legal authority when there is (1) actual express authority (2) actual implied authority (3) Apparent authority (4) Ratification.

Actual Authority

Actual Express authority : A principal is liable for contracts entered into by the agent when the agent acted with actual or apparent authority to bind the principal. Actual express authority is created by using written or spoken words, clear direct and definite language, or specific detailed terms and instructions. For actual express authority to exist, the agent must have the subjective intent believing that what he is doing is what the principal wants him to do. In other words, the principal makes a manifestation that causes the agent to reasonably believe that the agent is authorized to act on the principal’s behalf.
Actual Implied Authority : a principal gives the agent actual implied authority when the principal communicates to the agent by using word, written or spoken or other conduct to convey authority to the agent to take whatever steps are necessary to achieve the principal’s objectives. The agent has actual implied authority (unless instructions to the contrary) to act within the accepted business custom or general usage.

Apparent Authority

Apparent authority : The principal creates apparent authority through words, written or spoken that cause a 3rd party to reasonably believe that the agent can act on behalf of the principal because the principal has consented to have acts done on the principals behalf. Apparent authority exists until the principal notifies the 3rd party of the revoked authority.
Apparent Authority in Torts : A principal is liable for a tort committed by an agent with apparent authority when the agent’s appearance of authority enables him to commit a tort or conceal its commission. For apparent authority to exist, a third person must believe that the agent acted with actual authority, and such belief must be reasonable and be traceable to a manifestation by the principal.
Derives from reasonable reliance of a 3rd party on the agent’s authority based on the principal’s behavior over a period of time.
An agent purporting to be acting for a principal gives an implied warranty of authority to the third party. If the agent lacks the power to bind the principal, then a breach of the implied warranty has occurred, and the agent is liable to the third party.

Ratification

If the principal ratifies an agent’s action, the principal is bound the action as if the principal had authorized the agent, even if the agent acted without authority. Ratification occurs when a principal affirms a prior act that was done on the principal’s behalf. The principal must (i) ratify the entire contract, (ii) have legal capacity to ratify the transaction, (iii) ratify in a timely manner, and (iv) have knowledge of the material facts involved in the original act.
Regardless of whether the principal is liable, the agent can be liable for violating a contract or committing a tort regardless of his status as an agent. If the agent binds the principal to the contract, or if the principal ratifies the contract, then both the principal and agent are parties to the contract with the third party

Principal Disclosure

Disclosed Principal : When the agent acts on behalf of the principal and the principal’s identity is disclosed the 3rd party and the principal are parties to the contract.
Partially Disclosed : A principal is partially disclosed if the third party has notice of the principal’s existence but not the principal’s identity. Unless the agent and the third party agree otherwise, an agent who enters into a contract on behalf of a partially disclosed principal becomes a party to the contract.
Undisclosed Principal : An undisclosed principal is when the third party does not know of the agent’s status as an agent and is unaware of the principal’s existence or identity. When the agent enters into a contract on behalf of an undisclosed principal, the agent and the third party are parties to the contract. Thus, the agent becomes liable to the third party on the contract unless the agent informs the third party of the identity or the existence of the principal. Whether the undisclosed principal becomes a party to the contract depends on if the agent had authority to bind the principal to the contract. If the agent had the authority to bind the principal to the contract, then both the principal and agent are parties to the contract with the 3rd person.
Once the third party discovers the existence of the principal, the election of remedies doctrine requires the third party to choose to hold liable either the principal or the agent.

Vicarious Liability

Employee/Employer : Under the doctrine of vicarious liability or respondent superior a principal may be liable for the tortious acts of his agent when (1) the employer has the right to control the means and methods by which the other person performs his tasks or achieves a result. (2) the person is an employee and not an independent contractor where there is no right to control (3) the tort committed by the agent was committed while the agent was acting within the scope of employment.
Conduct within the scope of employment : includes acts that the employee is employed to perform or that were intended to profit or benefit the employer. Careful instructions given by the employee do not protect the employer from liability even when the employee acts counter to those instructions as long as the employee is acting within the scope of employment.
To determine whether a person acted within the scope of employment : courts distinguish between a frolic and a detour. A frolic is when the employee’s actions majorly deviate from the assigned work duties or path and fall outside the scope of employment. A detour is a minor deviation from the agents work duties and fall within the scope of employment.
If an employee travels during the workday for a personal errand it may be considered to fall withing the scope of employment if the errand is merely a detour
Intentional Torts : intentional torts generally falls outside the scope of employment, and the employer would not be liable unless the conduct occurred within the general space and time limits of the employment. The agent was motivated in some part to benefits the principal and the act is the kind of act that the agent was hired to do.

Estoppel

A person who has not represented that an individual is authorized to act as an agent may be estopped from denying the existence of an agency relationship or an agent’s authority with respect to a transaction entered into by the agent. Estoppel applies when a third party is justifiably induced to make a detrimental change in position because that third party believed the transaction was entered into for the principal and either the principal:

i) Intentionally or carelessly caused the belief; or
ii) Having notice of such belief and the possibility that the belief might induce others to change their positions in reliance on it, failed to take reasonable steps to notify them of the facts.

In short, a principal, or purported principal, is liable for the appearance of authority arising solely from the principal’s failure to take reasonable steps and use ordinary care.

Civil Procedure

Personal Jurisdiction

You must always ask 2 questions: Has the basis for exercising PJ over an out-of-state defendant been authorized by statute or by rule of the court? And Is the particular basis for exercising personal jurisdiction permitted by the due process clause of the US Constitution?

Remember: due process requires minimum contacts between defendant and forum state such that it’s consistent with traditional notions of fair play and substantial justice to sue the defendant here.

Lack of personal jurisdiction CAN be waived, but only if raised at the first opportunity or it is waived. If defendant chooses to file a pre-enter motion to dismiss, must make the objection then or waive it, or if the defendant does not file a pre-answer motion, must be raised in the answer.
In Personam Jurisdiction: can be General (Plaintiff can assert any claim whatsoever, even if unrelated to defendant’s contacts with the forum state.) or Specific (Plaintiff’s claims against the defendant must arise out of—or directly relate to—the defendant’s contacts with the forum.)

Bases include Physical presence in the state (exception: if a person was in the state only to answer a summons and persons brought to the state by force or fraud.), Domicile, Consent, Corporations (generally the forum state)
Federal Interpleader Act: allows nationwide service of process
Bulge Provision: Allows service anywhere within 100 miles of the federal courthouse even if in another state, and two situations: For impleading third-party defendants under rule 14 (3rd party claimants); and For joining necessary parties under rule 19 (Joinder of required parties)

In Rem Jurisdiction: suit against any kind of property, real or personal (the res) so long as the property is located in the state where you are suing, and it can settle everyone in the world’s claim against that property (i.e., the state has physical power over the property).
Quasi in Rem: suit to adjudicate the claim to property of a particular defendant or defendant; the subject matter of the suit may or may not be related to the property. Subject to the same minimum contacts as in personal jurisdiction.

Diversity Jurisdiction

Under federal law, a U.S. District Court has diversity jurisdiction over a matter if no plaintiff shares the state of citizenship of any defendant and the amount in controversy in the case exceeds $75,000.
SMJ not Waivable: The court lacked jurisdiction because there was not complete diversity among the parties. Under federal law, a U.S. District Court has diversity jurisdiction over a matter if no plaintiff shares the state of citizenship of any defendant and the amount in controversy in the case exceeds $75,000. Further, the defense of lack of subject matter subject matter jurisdiction may be raised at any time throughout litigation, as it is not waivable.
Diversity jurisdiction exists for controversies between a citizen (or citizens) of a state & a citizen (or citizens) of a foreign country.

A citizen of a foreign country who has been admitted to the United States as a permanent resident is treated as a citizen of the state in which domiciled.

FF&C under DJX : Under the U.S. Constitution, state courts are required to give full faith and credit to the judgments of other states. State courts are likewise required to treat federal judgments as those judgments would be treated by the federal courts. A party against whom enforcement of a judgment is sought may collaterally challenge the original state judgment based on lack subject matter jurisdiction, only if the jurisdictional issues were not litigated or waived in the original action.

Subject Matter Jurisdiction

There is no waiver for lack of SMJ and lack of SMJ cannot be waived by failing to object or by affirmative consent. Lack of SMJ can be raised by any party at any time, including the court
Remember: Removal moves case from state court to federal court; Transfer moves case from one Federal Court to another federal court; There is no procedure for removal of case from federal court to state court. Removal is proper only if the case should have been brought originally in federal court and only a defendant may remove, but ALL defendants must consent to removal within 30 days.

For Federal question, look to the well pleaded complaint rule federal question jurisdiction based on whether the federal question appears on the face of the well-pleaded complaint without making conclusory statements
Removal based on diversity is proper only if the AIC & complete diversity requirements are met and the action is brought in a state in which no defendant is a citizen.

Supplemental Jurisdiction: allows a federal court with subject matter jurisdiction over a case to hear additional claims over which the court would not independently have jurisdiction if all of the claims constitute the same case or controversy (i.e., if they arise out of the same common nucleus of operative fact)

A counterclaim does not have to meet the $75,000 requirement if the counterclaim is compulsory (i.e. arises out of the same transaction or occurrence
Cross Claims need an independent basis and must be related to a claim over which the court has subject matter jurisdiction (i.e., “anchoring” claim)

Removal Jurisdiction

Generally, the defendant in any civil action filed in state court has the right to remove a case to the district court for the district in which the state court action was filed as long as the civil action is within the original jurisdiction of a U.S. district court. Federal courts may exercise original diversity jurisdiction over actions when (1) the parties to an action are citizens of different states and (2) the amount in controversy in the action exceeds $75,000.

Venue & Forum Selection

Change of Venue: For the convenience of the parties and in the interests of justice, a district court may transfer any civil action to any other district or division where it might have been brought. Venue is proper in a judicial district where any defendant resides, Where a “substantial part of the events or omissions” on which the claim is based occurred or where a “substantial part of the property” that is the subject of the action is located.
Transfer with Forum Selection clause: Venue on Forum When transfer is based on a forum selection clause in a contract, the clause is accorded respect. If the clause specifies a federal forum, most circuit courts treat the clause as prima facie valid, to be set aside only upon a strong showing that transfer would be unreasonable and unjust or that the clause was invalid for reasons such as fraud or overreaching. Furthermore, the Supreme Court held that a forum selection clause should be given “controlling weight in all but the most exceptional cases,” even if the clause is unenforceable under applicable state law.
Transfer to where venue is proper: Generally, if the venue of an action is transferred where the original venue is proper, the court where the action is transferred must apply state law of the transferor court, this includes the state’s rules regarding conflict of law. However, when venue is transferred based on a valid forum selection clause, transferee court must apply the law, including the choice-of-law rules, of the state in which it is located. The transferee court should not apply the law of the transferor court because the parties have contractually waived their right to the application of that law by agreeing to be subject to the laws of the transferee venue

Service of Process

FRCP allow service by delivering summons and complaint to the individual personally or by “leaving a copy of each at individual’s dwelling or usual place of abode with someone of suitable age and discretion who resides there,” delivery to an authorized agent is also acceptable. For persons in foreign countries, service can be made by registered mail, return receipt requested.
For in rem and quasi in rem actions you must make a diligent effort to locate all claimants to the property (res) and serve them personally. If the claimants cannot be located, then notice by publication is permitted.
You cannot rely on notice by publication if you actually know or can readily find out the names and addresses of the other claimants; they must be served personally
Insufficient Process Federal Law vs. State law: Pursuant to the Federal Rules of Civil Procedure (FRCP), service on a U.S. corporation may be effected either by delivering the summons and complaint to an officer, managing agent, general agent, or agent appointed or authorized by law to receive process, or by following state law in the state where the district court is located or where service is made. If a procedural issue in a diversity action is addressed by a valid federal law, then the federal law will be applied, even if a state rule or statute is in conflict.

Choice of Law & Erie:

Diversity Jx : A federal court sitting in diversity must apply the substantive law of the state in which it sits, including that state’s choice-of-law rules.
If there is no Federal Statute or law on point, the court must determine whether to follow state law (i.e., the matter is deemed “substantive”) or to follow federal law (i.e., the matter is deemed “procedural”).
The general rule is to follow state law for substantive issues that govern conduct (i.e. burdens of proof, statutes of limitations, permissible defenses, etc.) and to follow federal procedural law (i.e., timing requirements)

Injunctions

Temporary Restraining Order : A temporary restraining order (TRO) preserves the status quo of the parties until there is an opportunity to hold a full hearing on whether to grant a preliminary injunction. A TRO has immediate effect and lasts no longer than 14 days unless good cause exists. A TRO can be issued without notice to the adverse party if the moving party can show (1) that immediate and irreparable injury will result prior to hearing the adverse party’s arguments and (2) the efforts made at giving notice and the reason why notice should not be required. Additionally, the party seeking a TRO must post a bond to cover the costs in the event the TRO is issued wrongfully.
Preliminary Injunction: A preliminary injunction can be issued if the opponent is given notice and the court holds a hearing on the issue. A party seeking a preliminary injunction must establish that: (1) the party is likely to succeed on the merits; (2) the party is likely to suffer irreparable harm in the absence of relief; (3) the balance of equities is in his favor; and (4) the injunction is in the best interest of the public. Additionally, the party seeking the preliminary injunction must provide a bond to cover the costs in the event the preliminary injunction is issued wrongfully.

Pleadings

The complaint must include: short and plain statement of the courts subject matter jurisdiction; a short and plain statement showing the claimant is entitled to relief; and a claim for the remedy sought by the pleader
Recovery is not limited by the claim for relief as stated in the complaint except for default judgment. You get what you prove, not what you ask for
The federal rules typically only require notice pleading, in which case all that is required is short and plain statement of the claim showing that the pleader is entitled to relief.

Under the two-step inquiry, identify allegations that are “conclusory” “or “near legal conclusions” Then look at remaining, factual, allegations, and ask whether they add up to a “plausible” case for recovery. “Plausible” falls somewhere between “probable” and merely “conceivable” or “possible.”

A pleading may be amended once as of right within 21 days of service of the pleading or within 21 days of the defendant’s response, if there is one. After that, leave to amend must be sought from the ct.

Answers & Pre-Answer Motions

Amendment after close of discovery: Generally, the Defendant’s answer must state any avoidance or affirmative defense that the defendant has, or that is deemed waived. However, the Rules also provide those pleadings can and should be amended by leave of the court when justice requires it. Courts will generally permit the Amd. unless it would result in undue prejudice to the opposing party.
Amend. MTD as long as amend. b4 court rules on motion: Under Rule 12(h)(1), if a party makes a pre-answer motion, the motion must raise the defense of insufficient service of process in the pre-answer motion, or the defense is waived. However, courts have generally allowed a party to amend a motion to dismiss to raise an omitted ground if the party acts promptly and before the court rules on the original motion and there would be no undue prejudice to the opposing party.
MTD Failure to state a claim -insufficient process of service : A defendant may file a motion under Federal Rule of Civil Procedure 12(b) to raise several different defenses, including failure to state a claim on which relief can be granted and insufficient service of process. These defenses must be raised in the first pre-answer motion (or if none, in the answer), or else they are generally waived. Under the “omnibus motion” rule, when a party makes a pre-answer motion raising one of these defenses but omitting the others, the party may not make another pre-answer motion raising one of the omitted defenses that was available to the party when the earlier motion was filed. The party is deemed to have waived the excluded defenses. Rule 12(g)(2), (h)(1)(A). Although not specifically provided for in the Rules, courts have allowed generally a party to amend a motion to dismiss to raise an omitted ground if the party acts promptly and before the court rules on the original motion.
Motion for a judgment on the pleadings is applied when the pleadings agree entirely on facts and only the law is in dispute. If there’s any element of factual dispute, you have a case for summary judgment.
Motion for a more definite statement asks that the pleading be made more specific, but this is disfavored by judges.
The failure to respond constitutes an admission, so the usual practice is a boilerplate, general denial of everything not specifically admitted.
An answer must be served within 21 days of the service of the pleading to which it responds

Intervention & Joinder

Intervention as of Right : Under Rule 24, a nonparty has the right to intervene in an action when, upon timely motion, (1) the nonparty has an interest in the subject matter of the action; (2) the disposition of the action may impair the nonparty’s interests; and (3) the nonparty’s interest is not adequately represented by existing parties. The burden is on the party seeking to intervene.
Cross Claim: The Rules provide that an answer may state as a cross-claim any claim against a co-defendant, as long as the cross-claim arises out of the same event that is the subject of the original claim.
Cross-claim: Allowing someone to join a cross-claim is appropriate because the cross-claim arises out of the same transaction or occurrence as the original claim, it involves the same factual and legal issues, and it will likely be relevant to present the same eyewitness evidence in support of proof of both claims.
FQ : Fed. district cts. have original jurisdiction over all civil actions “arising under Constitution, laws, or treaties of the US.”
Supplemental Jx : When a federal district court has jurisdiction over a claim, the court can assert supplemental jurisdiction over additional claims over which the court would not independently have subject matter jurisdiction if they arise out of a “common nucleus of operative fact.”

Joinder, Intervention, & Interpleader

All claims between the same plaintiff and the same defendant may be joined
Permissive Joinder

Any number of plaintiffs may join if they assert claims arising out of the same transaction or occurrences or series of transactions or occurrences; and there was a common question of law or fact
Any number of defendants may be joined in the same action if the claims against them arise out of the same transaction or occurrences (or series); and there is a common question of law or fact. (subject to SMJ)

Compulsory Joinder applies to necessary and indispensable parties. A necessary party is a person whose participation in the lawsuit is necessary for adjust adjudication because absent that party, complete relief cannot be accorded to the existing parties; and the necessary party has an interest in the litigation which will be impeded if the litigation goes forward without that party (risk of prejudice to the absentee); or there is a substantial risk of double or inconsistent liability.
Necessary parties must be joined if feasible. Feasible if it will not deprive the court of SMJ (e.g. will not destroy complete diversity) and The court can assert personal jurisdiction over the necessary party.

If a necessary party cannot be joined, the court decides whether to: Continue without the necessary party (typically the case) or Dismiss the suit (rare) (i.e., the party is described as being indispensable)

Intervention as of right may be had when the outsider claims an interest in the subject matter of the lawsuit that, as a practical matter, may be compromised by the disposition of the pending action.
Permissive Intervention may be allowed whenever there is a common question of law or fact between the intervenors claim and the main claim (very relaxed standard). Must ask the courts permission—matter of the courts sound discretion.
Intervention must be timely and the standard is “reasonable promptness” and There is no supplemental jurisdiction for either kind of intervention when jurisdiction is based on diversity.
Interpleader is generally used to resolve the problem of competing claims to the same property. It is designed to avoid inconsistent obligations are multiple claims.
Rule Interpleader there must be an independent basis of federal jurisdiction such as diversity or a federal question jurisdiction. If the action is based upon diversity jurisdiction, the amount or the value of the assets in question must exceed $75,00
Statutory Interpleader: The statute allows federal courts to hear cases with (i) minimal diversity among the competing claimants; (ii) where the property in dispute is worth at least $500 (there are other provisions which we won’t discuss in this post). Minimal diversity means that at least two competing claimants are citizens of different states. The stakeholder’s citizenship does not matter.
Impleader is a device by which the defendant brings into the suit someone who is or may be liable to the defendant for all or part of the plaintiff’s claims against him. It comes with the court’s supplemental jurisdiction, but plaintiff cannot make a claim against the 3rd party unless diversity is met

Class Actions

Prerequisites for a class action are numerousness (i.e., too many parties to be joined conventionally); common question of law or fact; typicality of claims by the class representatives; and adequacy of representation.

Burden is on proponent of class certification to establish that these prerequisites are met

If class action is brought under diversity jurisdiction named representatives must be completely diverse from defendants and at least one plaintiff has a claim worth over $75,000.
The Class Action Fairness Act (CAFA) Allows very large class actions, involving at least 100 members with more than 5 million at stake. Only minimal diversity required (i.e. any plaintiff diverse from any defendant)

Discovery

Scope of Discovery : Discovery is generally permitted with regard to any non-privileged matter relevant to any party’s claim or defense in the action. Information within the scope of discovery need not be admissible in evidence to be discoverable. The test is whether the information sought is relevant to any party’s claim or defense. In general, a party may not discover documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative. Such materials will be subject to discovery, however, if the party shows that it has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means.
Failure to Preserve ESI : A party may request the other party to produce and permit the inspection of any discoverable documents or electronically stored information. Emails are discoverable if they relate to the foundation and may be relevant to the litigation. A party may be subject to sanctions for failing to take reasonable steps to preserve electronically stored information that should have been preserved in the anticipation or conduct of litigation.
Sanctions : If a party failed to preserve electronically stored information that should have been preserved and it cannot be restored or replaced, the court may order sanctions against the wrongful party. The court may: (i) upon finding prejudice to another party, order measures no greater than necessary to cure the prejudice, or (ii) upon finding that the party acted with the intent to deprive another party of the information, may presume the lost information was unfavorable to the party, instruct the jury that it may or must presume the information was unfavorable, or dismiss the action or enter a default judgment.
The general rule with discovery is relevance, so You can discover anything that might be admissible at trial or that might lead to something that might be admissible at trial, so long as it is proportional to the needs of the case.

Exceptions to discovery include work product (documents and things prepared in anticipation of litigation or for trial. REMEMBER: you can NEVER discover the mental impressions of an attorney, BUT this rule creates a qualified immunity from discovery that can be overcome only if the party seeking discovery shows a need for the document or things; and that the information cannot be obtained elsewhere.
Oral Depositions: Questions are asked and answered orally and under oath. Limited to 10 depositions, unless the court allows more. Each is limited to one day of seven hours, unless the court allows more. can require the deponent to
Written Deposition: Questions asked in writing are delivered to an officer who asks the questions orally and the witness answers orally under oath. Rarely used because they are so inflexible
Interrogatories: Questions asked in writing to be answered under oath in writing that may only be used against a party. Presumptively limited to 25 interrogatories, unless the court allows more. Responses required within 30 days.
Discovery & Inspection of Documents & Land: Called a request to produce and permit inspection. Applies only to document, things, and land under the control of the party. The thing to be produced and inspected must be described with particularity. Response is due within 30 days
Physical & Mental Examinations: Available only against a party and are only permitted when the parties physical or mental condition is in controversy. Only for good cause shown
Requests for Admission: Used to streamline litigation, but a failure to respond within 30 days is an admission.

Termination without Trial

Includes Judgment on the pleadings; Default judgment (defendant has not shown up); Voluntary dismissal (dismissal without prejudice); Involuntary dismissal (dismissal with prejudice); and Summary judgment
Voluntary Dismissal is ordinarily without prejudice. Plaintiff a right to voluntary dismissal once at any time prior to the defendant serving an answer or motion for summary judgment. The defendant’s motion to before filing an answer does not cut off the right to a voluntary dismissal. After a defendant has filed an answer or motion for summary judgment, or if the plaintiff has already voluntarily dismissed once, plaintiff must seek leave of court for dismissal without prejudice. Plaintiff will have to pay the costs if she ends up later filing the same action against the same defendant.
Involuntary Dismissal is typically with prejudice. Involuntary dismissal for lack of jurisdiction, improper venue, or failure to join an indispensable party is without prejudice. In all other cases, involuntary dismissal is with prejudice.
Dismissal with prejudice is an adjudication on the merits, which means that, under federal law, given full res judicata (preclusive) affect, which bars any attempt at re-litigation of same claims. May be imposed for plaintiff’s failure to prosecute or for failure to comply with FRCP or any court order. Standard for appellate review is abuse of discretion.

Pretrial Conference

Pretrial Conference must be attended attorneys who will conduct the trial. Each side must file a pretrial statement detailing claims and defenses, itemization of damages, requests for stipulations and admissions, list of all witnesses and exhibits, etc. Failure to comply usually means that the attorney pays the costs and the other side’s attorney’s fees

Summary Judgment

A motion for summary judgment should be granted if the pleadings, discovery, and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. A genuine issue of material fact exists when a reasonable jury could return a verdict in favor of the non-moving party. In ruling on a motion for summary judgment, the court is to construe all evidence in the light most favorable to non-moving party & resolve all doubts in favor of the non-moving party.

Judgment as a Matter of Law, Renewed Motion for Judgment as a Matter of Law, and Motion for a New Trial

Judgment as a Matter of Law is Essentially a motion for summary judgment after the trial has begun.

Standard: viewing the evidence in the light most favorable to the other party, the evidence cannot support a verdict for that party, and the moving party is therefore entitled to judgment as a matter of law.

A Renewed Motion for Judgment as a Matter of Law is made at the close of all of the evidence and denied by the court may be renewed after the jury returns a verdict.

The Standard is the same: the evidence cannot support the jury’s verdict and the moving party is therefore entitled to judgment as a matter of law, but a prior motion is required: it is a condition precedent to a post-verdict motion that the motion for JMOL has been made at the close of all evidence

A motion for a new trial us usually made with Renewed Motion for Judgment as a Matter of Law, but it not restricted in the same way. A new trial can be granted for legal errors, newly discovered evidence, prejudicial misconduct by a lawyer, party, or a juror, or judge concludes that the verdict is against the great weight of the evidence, either in substance of the verdict or amount of damages awarded.
If the court determines that a verdict was seriously excessive, then it may offer a remittitur to reduce the verdict and Grant a new trial on the condition that the remittitur is not accepted. Note: can decrease, but cannot incrase award

Appeals

Final Judgment Rule states that ordinarily, appeals are available only from a final judgment and Judgment becomes final when entered by clerk on the court docket (i.e., not when announced)

A notice of appeal must be filed within 30 days

Interlocutory Orders are immediately appealable as of right, including any order granting or modifying an injunction and any order that changes or affects possession of property
Collateral orders are also immediately appealable. The collateral order doctrine allows immediate appeal if the order conclusively determines the disputed question; resolves an important issue completely separate from the merits of the action; and is effectively unreviewable upon appeal
Standards of Review

Questions of Law—Appellate review is de Novo

Ask: Did the trial court make an error? Was the error prejudicial?

Findings of Fact look to determinations of the fact-finder

Jury verdict must be affirmed if sponsored by substantial evidence
Judge’s findings of fact must be affirmed unless they are clearly erroneous.

Mattes of Discretion

Standard of appellate review is abuse of discretion.

Any reasonable decision will be upheld.
Admissibility of evidence—abuse of discretion

Preclusion

Claim Preclusion: The doctrine of claim preclusion (res judicata) provides that a final judgment on the merits of an action precludes the parties from successive litigation of an identical claim in a subsequent action. For claim preclusion to apply, the claimant and the defendant must be the same (in the same roles) in both the original action and the subsequently filed action. Claim preclusion is limited to the parties (or successors in interest), similar action by a different party would not be precluded.
Issue Preclusion: The doctrine of issue preclusion (collateral estoppel) precludes the relitigation of issues of fact or law that have already been necessarily determined by a judge or jury as part of an earlier claim. Unlike claim preclusion, issue preclusion does not require strict mutuality of parties, but only that the party against whom the issue is to be precluded (or one in privity with that party) must have been a party to the original action. Other elements necessary for issue preclusion to apply are that (i) the issue sought to be precluded must be the same as that involved in the prior action; (ii) the issue must have been actually litigated in the prior action; (iii) the issue must have been determined by a valid and binding final judgment; and (iv) the determination of the issue must have been essential to the prior judgment.

Conflicts of Laws

Constitutional Limitations

Due process—under the Due Process Clause of the 14th Amd., a forum state may apply its own law to a particular case only if it has a significant contact or a significant aggregation of contacts with the state such that a choice of its law is neither arbitrary nor fundamentally unfair

Full Faith & Credit—Under the U.S. Constitution, state courts are required to give full faith and credit to the judgments of other states. State courts are likewise required to treat federal judgments as those judgments would be treated by the federal courts.
A party against whom enforcement of a judgment is sought may collaterally challenge the original state judgment based on lack subject matter jurisdiction, only if the jurisdictional issues were not litigated or waived in the original action.

Statutory Limitations

State statutes—a state may have a statute requiring certain COL rules to be applied in a particular case
Federal statutes—certain federal statutes may preempt a state from claiming jurisdiction over certain cases (e.g., patent, antitrust, bankruptcy cases)

Party Controlled Choice of Law Rules

A valid agreement with effective COL clause;
Applicable to the lawsuit under the terms of the contract;
Reasonably related to the lawsuit; and
Not in violation of the public policy of the forum state or another interested state

Substantive Law

Federal courts sitting in diversity must apply substantive laws of the state in which it sits, including that state’s choice-of-law rules.
If there is an express choice-of-law provision in the contract, then that law will generally govern unless there is no significant basis for the parties’ choice or it is contrary to public policy.

Vested Rights Approach

The law that controls is the law of the jurisdiction where the parties’ rights were vested (i.e., where the act or relationship that gave rise to the cause of action occurred or was created)
The forum court would first characterize the issues in the cause of action

Most Significant Relationship Approach

In determining the enforceability of a premarital agreement, most states apply the law of the state with the most significant relationship to the matter at hand. When determining which state has the most significant relationship, the forum court generally considers the “connecting facts” or contacts that link each jurisdiction to the case, as well as the seven policy principles that are set forth in the Restatement (Second) of Conflict of Laws.

Governmental Interest Approach

It is presumed that the forum state will apply its own law, but parties may request that another state’s law be applied because that state has a greater interest in the outcome

Wills & Estates

Questions regarding the transfer of personal property from someone who dies intestate or who has a will are governed by the law of the deceased’s domicile at the time of death. Questions regarding the transfer of real property from someone who dies intestate or who has a will are governed by the law of the situs.

Torts

The Default rule is that the place of injury controls unless another state has a more significant relationship to the parties or tort

Contracts

Default rules—generally apply unless another state is found to have a more significant relationship with regard to the issue:

Land contracts—controlled by the law of the state of the situs of the land
Personalty contracts—controlled by the law of the state where delivery occurs
Life-insurance contracts—controlled by the law of the state of the insured’s domicile
Casualty insurance contracts—controlled by the law of the state where the insured risk is located
Loans—controlled by the law of the state where repayment is required
Suretyship contracts—controlled by the law of the state governing the principal obligation
Transportation contracts (covering both persons and goods)—controlled by the law of the state of departure

Corporations

generally governed by the law of the state of incorporation

Family Law

Marriage—in general, valid where it took place and recognized in all other states

Exception—a marriage that is valid in the state where it took place, but violates a prohibitory rule of the domicile of one of the parties will be void in the state where the marriage would have been prohibited if the parties immediately return to that state and become domiciled there

Divorce—questions of law relating to the grounds for divorce are controlled by the law of the plaintiff’s domicile

Divorce decrees from other states are entitled to full faith and credit as long as the original state had jurisdiction to issue the decree and the decree is valid in the original state
Bilateral divorce-if the court has personal jurisdiction over both spouses and at least one spouse is domiciled in the state, then the divorce judgment will be valid and will be entitled to full faith and credit
Ex parte divorce-must adhere to subject-matter jurisdiction rules and personal jurisdiction must exist over one spouse; full faith and credit is not given to other marital agreements such as property rights, alimony, and child custody, but the non-domiciled spouse may agree to such judgments
Child custody-under the Uniform Child Custody Jurisdiction and Enforcement Act (UCCJEA), a court can make initial custody decisions if it is in the child's home state, all other states must give full faith and credit to such decisions

Legitimacy—governed by the law of the domicile of the parent whose relationship to the child is in question
Adoption—the forum court applies its own state law

Constitutional Law

State Officials & 11th Amd.

11th Amendment Sovereign Immunity : 11th Amd. is a jurisdictional bar that prohibits the citizens of one state from suing another state in federal court. It immunizes the state from suits in federal court for money damages or equitable relief when the state is a defendant in an action brought by a citizen of another state. There are a few notable exceptions, including when a state waives its immunity under the Eleventh Amd..
Suing State official for injunctive relief : When a state official, rather than the state itself, is named as the defendant in an action brought in federal court, the state official may be enjoined from enforcing a state law that violates federal law.

Adequate & Independent State grounds

The Supreme Court can review a state court judgment only if it turned on federal grounds. The Court has no jurisdiction if the judgment below rested on an adequate and independent state ground.

Adequate: state ground must control the decision no matter how a federal issue is decided. When does this happen? When federal claimant (i.e., the party asserting a federal rate) wins anyway under state law.
Independent: the state law does not depend/hinge on an interpretation of federal law. No AISG if the state law adopts or follows federal law.
When a state court decision is unclear as to the basis of the decision (i.e. Whether it is based on the state constitution or the federal Constitution), the Supreme Court can review the federal issue

Legislative Power (Article 1) - Congress Powers

Commandeering 10th Amend: Congress cannot force states to adopt or enforce federal regulatory programs. It cannot commandeer state and local agencies to implement federal programs. Congress cannot force states to adopt or enforce federal regulatory programs. It cannot commandeer state and local agencies to implement federal programs. But, Congress can condition federal funds to state and require states to implement certain regulation. As long as the condition is related to public purpose it is constitutional. A valid exercise of the Spending power does not violate the 10th Amend.
Commandeering : Although Congress cannot command state legislatures, it can encourage state action through the use of the taxing and spending powers. The spending power has been interpreted very broadly, but is subject to five limitations. First, Congress must spend for the “general welfare,” which amounts to any public purpose. Second, the condition must be unambiguous. Third, the condition must relate to “the federal interest in particular national projects or programs.” Fourth, the condition must not induce the states to act in an unconstitutional manner. Finally, the condition may not exceed the point at which “pressure turns to compulsion.”
Commandeer Executive Officers : Congress may exercise only those powers specifically enumerated by the Constitution. Under the Tenth Amendment, all powers not assigned by the Constitution to the federal government are reserved to the states. In theory, this gives the states expansive, exclusive power. In practice, however, the federal government has very broad power to regulate the states. As long as Congress is exercising one of its enumerated powers, Congress may regulate the states, within certain limits. However, Congress cannot “commandeer” state legislatures by commanding them to enact specific legislation or enforce a federal regulatory program. Congress is also prohibited from conscripting a state executive officer directly.
The War and Defense Powers

Congress has the power to declare war and the power to maintain the army and navy & the power to provide for military discipline of US military personnel.
Congress can provide for military trial of enemy combatants and enemy civilians, but Congress cannot provide for military trial of US citizens who are civilians

Congress has the power to tax if rationally related to raising revenue and has the power to spend for the general welfare
13th Amd.: Congress has broad power to legislate against racial discrimination, whether public or private and the key is that the 13th can regulate private discrimination; “vestiges of slavery”.
14th Amd.: Congress has the power to remedy violations of individual rights by the government, but only as those rights have been defined by the courts. To be properly remedial, legislation must have “congruence” & “proportionality.”( there has to be a reasonable fit between the remedial law enacted by Congress & the constitutional right as defined by SCOTUS)
15th Amd.: Congress has the power to ensure three is no racial discrimination in voting
Congress has the power to confirm or deny presidential appointments
Legislative Vetoes are unconstitutional. This situation arises when Congress passes a law in reserving to itself the right to disapprove future executive actions by simple resolution. If Congress wants to override executive actions, it must change the law (so that the president has an opportunity to veto the new legislation). Congress cannot evade the president’s guaranteed veto opportunity by passing a law saying that in the future it plans to govern by resolution.
United States senators and representatives (not state legislators) are protected by the speech or debate clause which states that Senators and congressmen and their aids cannot be prosecuted or punished in relation to their official acts.

The Executive Branch (President)

Pardon Power: the president can pardon or commute punishment for any and all federal offenses. (Governors have a similar power for state crimes.) Cannot be limited by Congress.
Veto Power: president has 10 days to veto legislation. President can veto for any reason/no reason but cannot veto specific provisions and except others. It is all or nothing.
Appointment & Removal powers: only the president (or his appointees) can hire or fire executive officers. Some senior officers (e.g., cabinet officers, ambassadors, federal judges) require the advice and consent of the Senate. The Senate has a power of rejection. The Senate approval power does not translate into a power of appointment.
Treaties are negotiated by the president but require approval by a 2/3 vote of the Senate. Once a treaty is ratified (approved) it has the same authority as a statute.
Executive agreements: presidential negotiations not submitted for approval by the Senate. They can be authorized, precluded, or overridden by statute, but they take precedence over conflicting state laws. They do not have the binding status of a treaty.
The President has ABSOLUTE IMMUNITY from liability for official acts (broadly construed), but no immunity for accident prior to taking office. There is an executive privilege to not reveal confidential communications with presidential advisers, but that privilege can be outweighed by a specifically demonstrated need in a criminal prosecution

Privileges & Immunities

Forbids serious discrimination against out-of-state individuals, absent substantial justification, this does not include corporations.

there can be no legal requirement of residency for private employment. States cannot require that you live or reside in the state to work in the state. However, public employment can require residency requirements.

Commerce Clause

State’s can’t regulate Interstate commerce: The Supreme Court of the United States has long held that the Constitution’s grant to Congress of the power to regulate interstate commerce also limits, by implication, the right of state or local governments to adopt laws that regulate interstate commerce. This is often referred to as the “Dormant Commerce Clause: A nondiscriminatory state law that imposes an “incidental” burden on interstate commerce will nonetheless be unconstitutional if the benefits of the state law are grossly outweighed by the burdens on interstate commerce.
The Dormant Commerce Clause is a doctrine that limits the power of states to legislate in ways that impact interstate commerce. If Congress has not enacted legislation in a particular area of interstate commerce, then the states are free to regulate, so long as the state or local action does not: (1) discriminate against out-of-state commerce, (2) unduly burden interstate commerce, or (3) regulate extraterritorial (wholly out-of-state) activity.
Discriminating against out of state – local economic interests: A state or local regulation discriminates against out-of-state commerce if it protects local economic interests at the expense of out-of-state competitors. Law here on its face doesn’t discriminate because ____.However, the mere fact that entire burden of a state's regulation falls on an out-of-state business is not sufficient to constitute discrimination against interstate commerce. The Dormant Commerce Clause protects the interstate market, not particular interstate firms, from prohibitive or burdensome regulations.
Not Discriminatory but burden on interstate commerce: A state regulation that is not discriminatory may still be unconstitutional if it imposes an undue burden on interstate commerce. The courts will balance, case by case, the objective and purpose of the state law against the burden on interstate commerce and evaluate whether there are less restrictive alternatives.
Discriminatory on its face: (discuss how on its face disc./applied disc first) If a state or local regulation, on its face or in practice, is discriminatory, then the regulation may be upheld if the state or local government can establish that: (i) an important local interest is being served, and (ii) no other nondiscriminatory means are available to achieve that purpose.
Market Participant Exception: A state may behave in a discriminatory fashion if it is acting as a market participant (buyer or seller), as opposed to a market regulator. If the state is a market participant, it may favor local commerce or discriminate against nonresident commerce as could any private business

State Action

State Action: The Constitution generally protects against wrongful conduct by the government, not private parties. A private person’s conduct must constitute state action in order for these protections to apply. State action is found when a private person carries on activities that are traditionally performed exclusively by the state, such as running primary elections or governing a “company town.”

Procedural Due Process

Concerned with deprivations of life (i.e., death penalty), Liberty (i.e., physical confinement and parole or restrictions on constitutionally protected rights, etc.), and Property.

you have a property interest in your government job or benefit whenever you have a legitimate entitlement to continued enjoyment of the job or benefit.
Sometimes, a hearing must occur before the deprivation. (terminating welfare benefits; non-emergency revocation of drivers licenses.)
Sometimes, the hearing can occur after the action, so long as hearing is prompt and fair. (terminating disability benefits; disciplinary suspension from a public secondary school)

Substantive Due Process

Due process versus equal protection: if a law denies a fundamental right to everyone, it violates due process, but if a law denies a fundamental right to only some and violates equal protection
Strict scrutiny: is the law necessary for a compelling government interest? Implicit in strict scrutiny is the requirement for the least restrictive means. When strict scrutiny applies, the government bears the burden of proof

Travel, Voting & Ballot Access, Privacy (Marriage, Contraception, Sexual Intimacy, Abortion—Undue Burden Test, Parental rights, family relations, obscene materials—not child pornography, refusal of medical treatment), Race, Ethnicity, National Origin, Alienage (not undocumented aliens)—Arbitrary and unreasonable, establishment clause violations, content-based speech regulations

Intermediate Scrutiny: Is the law substantially related to an important government interest?

Legitimacy, gender—exceedingly persuasive, sexual orientation?? (split court), campaign contributions

Rational Basis: Is the law rationally related to a legitimate interest? The challenger bears the burden of proof.

Everything else, including age, wealth, taxation, economic, weight, etc.

Takings Clause

Per Se Taking: Generally, a governmental regulation that adversely affects a person’s property interest is not a taking. However, it is possible for a regulation to rise to the level of a taking, such as when a regulation results in a permanent physical occupation of property by the government or a 3rd party or a regulation results in a permanent total loss of the property’s economic value.
Regulatory taking: Even if the ordinance does not constitute an occupation of the property by either the government or a third party, it is still subject to a three-factor balancing test to determine whether the ordinance amounts to a regulatory taking. The following factors are considered: (1) the economic impact of the regulation on the property owner, (2) the extent to which the regulation interferes with the owner’s reasonable, investment-backed expectations regarding use of the property, and (3) the character of the regulation, including the degree to which it will benefit society, how the regulation distributes the burdens and benefits among property owners, and whether the regulation violates any of the owner’s essential attributes of property ownership, such as the right to exclude others from the property.

(1) Economic impact—how much value was lost due to the regulation;
(2) Reasonable expectations—the owner’s reasonable expectation of return on investment;
(3) Character of the regulation—does the regulation impact a few owners or the entire community?

EXACTION: A local government may exact promises from a developer, for ex. when setting aside a portion of the land that is being developed for a park in exchange for issuing the necessary construction permits. These exactions do not violate the Takings Clause if there is (1) an essential nexus between legitimate state interests and the conditions imposed on the property owner (i.e., the conditions substantially advance a legitimate state interest), and (2) a rough proportionality between the burden imposed by the conditions on property owner and the impact of the proposed development on the community.

To determine whether there is rough proportionality between the burden and the impact, the government must make an individualized determination that the conditions are related both in nature and extent to the impact.

Equal Protection (14th Amd.)

Equal Protection on Age: The Equal Protection Clause of the 14th Amd. provides that “no state shall . . . deny to any person within its jurisdiction the equal protection of the laws.” This clause applies only to states and localities. Laws classified on the basis of age are reviewed under the rational basis standard.
A law passes rational basis standard of review if it is rationally related to a legitimate governmental interest, a test of minimal scrutiny. The law doesn't require that there to be an actual link between the means that are chosen and the legitimate objective, the legislature must reasonably believe there is a link. Laws under this standard are presumed valid
Forcing States to prevent them from enacting a statute: The federal government may exercise only those powers specifically enumerated by the Constitution. The 14th Amd., Section Five Enabling Clause permits Congress to pass legislation to enforce the equal protection and due process rights guaranteed by the Amd., but not to expand those rights or create new ones. In enforcing such rights, there must be a “congruence and proportionality” between the injury to be prevented or remedied and the means adopted to achieve that end. Congress may override state government action that infringes upon 14th Amd. rights if the "congruence and proportionality" test is satisfied, its enforcement power would not stretch to prohibit a law that does not violate the Constitution. In other words, because there would be no constitutional injury to prevent or remedy, the proposed law would be both incongruent and disproportionate.

Freedom of Religion

Establishment Clause—3- part Lemon Test asks 3 questions: Does the law have a secular purpose? It the law’s primary effect the advancement or inhibition religion? Does the law avoid excessive government entanglement with religion?

It is a violation of the establishment clause for the government to endorse one religion over another and also to endorsement of religion over non-religion. Examples: Officially sponsored school prayer is unconstitutional; Officially sponsored graduation prayer is unconstitutional; Bible reading is permissible, but cannot be inspirational (e.g., literature or poetry); Display of the 10 Commandments is sometimes OK. It can be displayed for secular purposes (e.g. Historical or promoting morals), but not to inspire religious belief (Can teach the 10 Commandments in school as an example of early legal code’ Cannot post the 10 Commandments in classroom & leave there every day of school year—designed to inspire religious belief; Cannot post 10 Commandments in a courthouse if the context makes plane that the purpose is to endorse religious belief); Laws prohibiting teaching evolution have been struck down; Legislative prayer is OK for historical practices; Nativity scenes are OK on public property if there is something else to dilute the religious message (e.g., Hanukkah symbols, Rudolph the red nose reindeer).

Free Exercise of religion—Religious belief is protected absolutely (entitled to hold any beliefs or none at all), but religious conduct is protected qualifiedly

Laws regulating religious conduct because of its religious significance are unconstitutional (i.e., laws aimed at religion), however, regulation of conduct as far as neutral, generally applicable laws must be obeyed despite religious objections.

Ministerial Exception: first Amd. requires a ministerial exception to employment laws. Non-discrimination employment laws cannot be applied to ministers because the federal government cannot regulate employment relations between a religious institution and its ministers
Campus access: a state university that allows student groups to meet on campus must allow student religious groups equal access.

Freedom of Speech

Freedom not to speak: The First Amd. is applicable to the states through the 14th Amd. and protects the freedom of speech as well as the freedom not to speak. For example, the Supreme Court has held that a child in a public school has the right not to recite the Pledge of Allegiance.
Freedom of speech - Public Forum: The First Amd. protects freedom of speech. Protected speech can include written, oral, and visual communication, as well as activities such as picketing and leafleting. The government’s ability to regulate speech depends on the forum in which the speech takes place.

A traditional public forum is one that is historically associated with expression, such as sidewalks, streets, and parks. In a traditional public forum, the government may only regulate speech if the restrictions: (i) are content-neutral as to both subject matter and viewpoint, (ii) are narrowly tailored to serve a significant governmental interest, and (iii) leave open ample alternative channels for communication. Additional restrictions, such as an absolute prohibition of a particular type of expression, are upheld only if narrowly drawn to accomplish a compelling governmental interest. (A blanket ban is not narrowly tailored)

Content based regulations of speech trigger strict scrutiny and are usually struck down.
Prior Restraint (regulating speech before it happens) Especially disfavored and will be struck down even when other forms of regulation might be upheld. Injunctions against speech are almost impossible to get because it regulates speech before it happens.
Time, Place, and Manner Restrictions: A public forum is a place traditionally reserved for speech activities. These places include streets, parks, and public sidewalks around public buildings (but not airports). Only time, place, and manner may be regulated in a public forum. There are three requirements:

Content neutral: must be content neutral on its face and as applied. Also, must not allow executive discretion.
Alternative channels of communication must be left open: time, place, or manner law must be a guideline for speech, not a flat prohibition of speech.
Must narrowly serve a significant state interest: under this test most content neutral time, place, or manner regulations are upheld

Does not require a compelling interest

Non-public forum: this includes all kinds of government property that is not a public forum (e.g., government offices, jails, power plants, military bases, etc.).

Viewpoint discrimination is invalid: one clearly unreasonable kind of regulation would be to discriminate based on viewpoint (e.g. Between members of different political parties)
Disruption of the functions of government: one should go outside to the public sidewalk surrounding the building since that is a public forum.

Limited public forum: Describes a place that is not a traditional public forum, but that the government chooses to open to all comers (e.g., a municipal theater that anyone can rent).

In such areas, only time, place, or manner regulations are allowed, but this is a narrow category.

Obscenity: the 4 S’s—Sexy (must be erotic; appeal to the prurient interest); Society sick (must be patently offensive to the average person in society. The society may be the nation as a whole, or a particular state, or a major metropolitan area); Standards (must be defined by proper standards for determining what’s obscene, not vague and/or overbroad); Serious value (the material must lack serious value. If material has serious value (artistic, scientific, educational, or political), it cannot be held legally obscene. )

This determination is made by the court, not the jury, and it must be based on a national standard, not a local one.
a lesser legal standard can be applied to minors, but the government cannot ban adult speech simply because it would be inappropriate for minors.
Child pornography can be prohibited whether or not it is legally obscene, and possession can be punished even when it is in the privacy of your home.
Land-use restrictions must be narrowly drawn; can regulate zoning of adult theaters but cannot ban them entirely.

Speech is not protected if it is an incitement to immediate violence and Fighting words are words likely to provoke an immediate breach of the peace.
Most regulations of commercial speech are struck down. So long as the advertising is truthful and informational, it must be allowed, but misleading commercial speech may be prohibited.
First Amd. restrictions basically do not apply to the government as a speaker. The government does not have to accept all monuments donated by a private person simply because it accepts one, when the government is controlling the message, it is entitled to say what it wants, but specialty license plates bearing messages requested by purchasers are still government speech, so the government can refuse to issue plates that would be offensive to other citizens.
Corporations have the same speech rights as individuals, so does the media, with the exception of broadcasters who are subject to greater regulatory authority than print media or the internet
government employees generally cannot be hired or fired based on political party, political philosophy, or any act of expression, but this rule does not apply to confidential advisors or policy making employees.

Freedom of Expression

Expressive conduct (a.k.a. Symbolic speech) laws regulating expressive conduct are upheld if they further an important interest; That interest is unrelated to the suppression of expression; and burden on expression is no greater than necessary.
If the government is trying to suppress a particular message, then the law will be struck down; if the government is trying to pursue an interest unrelated to the suppression of expression, then the law will be upheld.

Campaign Finance:

Contributions to political campaigns/candidates can be regulated provided that the limits are not unreasonably low.
Direct expenditures in support of a candidate, a campaign, or a political issue cannot be regulated.

Contracts & Sales

Contract Formation

Under the UCC, a contract is formed if both parties intend to contract and there is a reasonably certain basis for giving a remedy. The only essential term is quantity, and as long as the parties intend to create a contract, the UCC “fills the gap” if other terms are missing, such as the time or place for delivery. At Common Law, all essential terms must be covered in the agreement, including the parties, subject, price, & quantity.

Note: Both Requirements & Output Contracts are considered specific enough under the UCC even though they don’t have a specific quantity term

For acceptance, generally any reasonable method will be allowed, but silence is only allowed if expressly provided in the contract.
In general, an offer can be revoked by the offeror at any time prior to acceptance. A promise to hold an offer open is governed by statute.
In creating a legal offer, there is an objective test: ask whether an offeror displays an objectively serious intent to be bound
It is possible for an offer to be irrevocable if the offeree reasonably and detrimentally relies on the offeror’s promise prior to acceptance. It must have been reasonably foreseeable that such detrimental reliance would occur in order to imply the existence of an option contract.
An offer is revoked when the offeror makes a manifestation of an intention not to enter into the proposed contract before the offeree accepts. A revocation may be made in any reasonable manner and by any reasonable means, and it is not effective until communicated. Under the UCC, a person receives notice when: (i) it comes to that person’s attention, or (ii) it is duly delivered in a reasonable form at the offeree’s place of business.
An offer is an objective manifestation of a willingness by the offeror to enter into an agreement that creates the power of acceptance in the offeree. An offer can only be accepted while it remains open. One way that an offer terminates is by the offeree’s rejection of the offer.
In general, an offer can be revoked by the offeror at any time prior to acceptance. However, an enforceable option will render the offer irrevocable. An option is an independent promise to keep an offer open for a specified period of time. Such a promise limits the offeror’s power to revoke the offer until after the period has expired, while also preserving the offeree’s power to accept. Under the common law, if the option is a promise not to revoke an offer to enter a new contract, the offeree must generally give separate consideration for the option to be enforceable.
The UCC provides an alternative to the common law option rules if three requirements are met. Under the UCC, an offer to buy or sell goods is irrevocable if: (i) the offeror is a merchant, (ii) there is an assurance that the offer is to remain open, and (iii) the assurance is contained in a signed writing from the offeror. Unlike the common law, no separate consideration is required to keep the offer open under the UCC firm offer rule. A merchant is generally described as a person who regularly deals in the type of goods involved in the transaction. Under the firm offer rule, a merchant includes not only a person who regularly deals in the type of goods involved in the transaction, but also any businessperson when the transaction is of a commercial nature.

Firm Offer Rule

Under the UCC firm offer rule, an offer to buy or sell goods is irrevocable if: (i) the offeror is a merchant, (ii) there is an assurance that the offer is to remain open, and (iii) the assurance is contained in a signed writing from the offeror. A firm offer in a form prepared by the offeree, however, must be separately authenticated by the offeror to protect against inadvertent signing.

Consideration

Gifts are not exchanged for a bargain, so there is NO consideration for gifts and they are thus hard to enforce
Pre-existing duty rule: if someone already has to do something, there’s no new consideration
Past consideration—CL says it’s a no go, the modern trend says that if someone provided a very specific, meaningful benefit to somebody and that person then promises back, that MAY be considered consideration
Promissory Estoppel: may be enforceable as a consideration substitute if the person making that promise reasonable expected the promise to induce action or forbearance, the promise actually induces action or forbearance, and injustice can only be avoided by enforcement of the promise. NOTE: typically only reliance damages are available for promissory estoppel.

Substantial Performance

The doctrine of substantial performance provides that a party who substantially performs can recover on the contract even though full performance has not been tendered. Substantial performance is negated if the incomplete performance amounted to a material breach of contract. If the failure of a constructive condition of exchange is minor, however, it will not negate substantial performance.

Installment Contracts

A divisible or installment contract is one in which the various units of performance are divisible into distinct parts. Recovery is limited to the amount promised for the segment of the contract performed.

Unjust Enrichment (Quantum Meruit)

When a plaintiff confers a benefit on a defendant and the plaintiff has a reasonable expectation of compensation, allowing the defendant to receive the benefit without compensating the plaintiff would be unjust. Although this type of action is often characterized as based on an implied-in-law contract or a quasi-contract, quantum meruit does not depend on the existence of a contract.

Anticipatory Repudiation

Parties in a contract are entitled to expect due performance of contractual obligations and are permitted to take steps to protect that expectation. Anticipatory repudiation occurs when there has been an unequivocal refusal of the buyer or seller to perform, or when a party creating reasonable grounds for insecurity fails to provide adequate assurances within 30 days of demand for such assurances.
Repudiation allows the non-repudiating party to resort to any remedy given by the contract or code. But until the repudiating party’s next performance is due, he may retract the repudiation unless the aggrieved party has since accepted the repudiation, acted in reliance on the repudiation, or brought an action for breach.

Retraction must include any assurances of performance that the other party has justifiably demanded about whether the retracting party will perform. A proper retraction reinstates the repudiating party’s contract rights.

Damages

The baseline damages in breach-of-contract suits are expectancy damages, which are intended to put the injured party in the same position as he would have been had the contract been performed.
If the nonbreaching party avoids specific costs because a breach has occurred, those are subtracted from any damage award.
Contract damages are recoverable only if they were in the contemplation of the parties at the time of contract formation or were otherwise foreseeable.
Courts may refuse to enforce an award that is economically wasteful where the cost of restoration greatly exceeds any diminution in value. If a court finds that restoration will be wasteful, then the measure of damages may be the difference in value. Courts may refuse to use the diminution in value measure of damages, however, when the breach appears to be willful, and only completion of the contract will enable the nonbreaching party to use the land for its intended purposes.
Contract damages are recoverable only if they can be proven with reasonable certainty. To that end, courts are hesitant to award damages for lost profits—especially in the case of new businesses—because profits are often speculative.
A nonbreaching party has the obligation to mitigate damages by taking steps that do not result in undue risk, expense, or burden. The amount of damages that the nonbreaching party could have mitigated, but failed to mitigate, should be offset against the total damage award.
The mailbox rule with an offer— acceptance only valid upon receipt (different than the normal mailbox rule)

Statute of Frauds

A contract is outside the UCC Statute of Frauds to the extent that goods are received and accepted, and to the extent that payment has been made and accepted.
When the price of goods is at least $500, the UCC requires a memorandum of the sale that must (i) indicate that a contract has been made, (ii) identify the parties, (iii) contain a quantity term, and (iv) be signed by the party to be charged.

A signature includes any authentication that identifies the party to be charged, such as a letterhead on the memorandum.
A mistake in the memorandum or the omission of other terms does not destroy the memorandum’s validity. An omitted term can be proved by parol evidence. However, enforcement is limited to the quantity term actually stated in the memorandum.

UCC 2-207

A merchant is a person who regularly deals in the type of goods involved in the transaction or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction. In contracts of $500 or more between merchants, if a memorandum sufficient against one party is sent to the other party, who has reason to know its contents, and the receiving party does not object in writing within 10 days, then the contract is enforceable against the receiving party even though he has not signed it.
At CL, the acceptance must be a mirror image of the offer, so no changes or new terms
If at least one of the parties is not a merchant, an acceptance with new terms will be a valid acceptance, but the new terms are not going to come back in, but If BOTH parties are merchants, additional terms do come in with the acceptance UNLESS, those additions/changes are material changes, the terms of the original agreement say that no changes can come in, or if the offeror objects before or after receiving the new terms.

Corporations

Promoter Liability:

The promoter is individually liable on contracts formed before the corporation came into existence even after the corporation is formed; they can escape by a novation (when the corporation and the 3rd party agree to let the promoter out and take over it) or adoption (if the corp. takes the benefits out of that contract, then the promoter is let out of liability

Formation of a Corporation

In order to form a corporation, articles of incorporation must be filed with the state. The articles must include certain basic information, including the number of shares the corporation is authorized to issue. Unless a delayed date is specified in the articles, the corporate existence begins when the articles are filed.
When a person conducts business as a corporation without attempting to comply with the statutory incorporation requirements, that person is liable for any obligations incurred in the name of the nonexistent corporation.
When all of the statutory requirements for incorporation have been satisfied, a de jure corporation is created. Consequently, the corporation, rather than persons associated with the corporation, is liable for activities undertaken by the corporation. However, when a corporation has not been created, the entity may be treated as a general partnership.
A partnership is an association of two or more persons to carry on a for-profit business as co-owners. In a general partnership, each partner is jointly and severally liable for all partnership obligations.
When a person makes an unsuccessful effort to comply with the incorporation requirements, that person may be able to escape personal liability under either the de facto corporation doctrine or the corporation by estoppel doctrine. Under either doctrine, the owner must make a good-faith effort to comply with the incorporation requirements and must operate the business as a corporation without knowing that the requirements have not been met. If the owner has done so, then the business entity is treated as a de facto corporation, and the owner, as a de facto shareholder, is not personally liable for obligations incurred in the purported corporation’s name.
Alternatively, under corporation by estoppel, a person who deals with an entity as if it were a corporation is estopped from denying its existence and is thereby prevented from seeking the personal liability of the business owner. This doctrine is limited to contractual agreements.
If a corporation states in its articles of incorporation that they have a very specific purpose (very uncommon—usually they say they have a broad purpose) and that corporation enters into a contract beyond that specific scope, they have committed an ultra vires act and a shareholder can come in and enjoin the action or take action against the officer for that act.

Shareholders:

Elect the Board of Directors by a vote
Shareholders have a right to inspect & copy the records during normal business hours as long as they give 5 days notice and state a proper purpose.
Shareholders have a right to vote on changes in the corporation
Proxy voting: allows a person to vote on behalf of the shareholder; irrevocable is allowed—cant take it back
Shareholders have the power to amend a corporation’s bylaws under state law. A corporation’s bylaws for the management of the corporation’s business or regulation of its affairs are enforceable, so long as the bylaws do not conflict with state law or the articles of incorporation. The nomination of directors and the procedure for nominating directors are common provisions in the bylaws and are consistent with regular corporate practice.
Shareholder agreements by which shareholders form an agreement to vote their shares together are allowed

Meeting Notice

Directors are entitled to notice of a special meeting. Unless the articles of incorporation or bylaws provide otherwise, notice must be provided at least two days prior to the meeting and should state the date, time, and place of the meeting. The notice need not describe the purpose of the special meeting.
Directors are entitled to notice of a special meeting, but a director’s attendance waives notice of that meeting unless the director promptly objects to lack of notice.

Issuance of Stock (Securities)

Issuance must be approved by the board of directors and they determine that the value paid for the stock is adequate.

Par value stock is when a corporations decides to assign a minimum value for a stock and it cannot be sold for less than that and if it is sold for less, the board can be liable, and if the shareholder who buys it knows they are getting it for less than par value, they can also be liable. Note: stock sold for less than par value is watered stock

Limited Liability Company (LLC)

An LLC can be member-managed (direct management of the LLC by its members; members can bind the LLC as its agent) or manager-managed (centralized management of the LLC by one or more managers who need not be members). Unless the operating agreement or certificate of incorporation provide otherwise, the default management arrangement is member-management.
While an operating agreement by an LLC is generally not required, many LLCs adopt an operating agreement that governs any and all aspects of the entity’s affairs. The operating agreement generally takes precedence over contrary statutory provisions. Generally, members of an LLC owe each other a duty of loyalty.
A member of an LLC is generally not liable personally for the LLC’s obligations. If a plaintiff can pierce the veil, however, the members of the LLC may be held personally liable.
Although members of a manager-managed LLC do not have authority to bind the LLC, members of a member-managed LLC have broad authority to bind the LLC, similar to that of a partner in a general partnership. Each member has equal rights with respect to the management of the LLC. However, an act outside the ordinary course of the activities of the company may be undertaken only with the consent of all members.
Tax advantages of a partnership and the limited liability of a partnership.

A member of a LLC is not individually liable, but PCV principals apply

Members of an LLC owe fiduciary duties of care & loyalty to the LLC & one another

Duty of loyalty: members of an LLC may have a duty to bring a derivative action on behalf of the LLC against themselves even as a corporation
Duty of care: act reasonably and subject to the BJR

Direct actions: one member can bring against LLC or another member for itself
An LLC may dissolve upon the occurrence of various events, including consent of all members, passage of 90 days without members, by court order, or by the happening of a dissolution-causing event per the operating agreement. Dissociation alone does not cause dissolution. A member can withdraw or dissociate at any time and without reason, even if doing so violates the operating agreement, by providing notice to the corporation. Written notice is not required under the ULLCA.
Dissolution may be mandatory (by the court) by showing that a controlling member is acting in an oppressive way and harming the other member. The abused member will ask for this.

Piercing The Corporate Veil

There must exist some circumstances that would justify piercing the veil on equitable grounds, such as undercapitalization of the business, commingling of assets, confusion of business affairs, or deception of creditors.
Courts rely on various theories to pierce the corporate veil, including the “mere instrumentality” test, wherein a member has to show that (i) the members dominated the entity in such a way that the Corporation had no will of its own, (ii) the members used that domination to commit a fraud or wrong, and (iii) the control & wrongful action proximately caused the injury.
Under the “unity of interest and ownership” test, a petitioner must demonstrate that there was such a unity of interest and ownership between the entity and the members that, in fact, the company did not have an existence independent of the members and that failure to pierce the veil through to the members would be unjust or inequitable.
If a shareholder is abusing the protections of the corporate status, a court can pierce the corporate veil

Removal

Shareholders elect the board of directors and the board of directors is actually responsible for the management of the corporation and business affairs.
Shareholders can remove members of the board for breaches of fiduciary duties and modernly, without cause.

Dissolution & Winding Up

When members agree to voluntarily dissolve an entity, the entity must wind up its affairs and liquidate its business. Only after the entity’s debts and obligations to creditors have been paid may the members receive a portion of the liquidated value of the LLC. Those responsible for winding up can be liable for improper distributions.
Dissociation does not discharge the member’s interest or liability and does not necessarily trigger dissolution and winding up. The dissociated member relinquishes his right to participate in the LLC and is entitled to distributions only if the continuing members receive payment.
Order of distributing corporate assets: 1) pay off any creditors, 2) pay off any shareholders with preferred stock, 3) pay off any remaining shareholders

Business Judgment Rule

The business judgment rule is a rebuttable presumption that a director reasonably believed that his actions were in the best interests of the corporation. However, the business judgment rule does not generally apply to a conflict-of-interest transaction.
A conflict-of-interest transaction, or “self-dealing,” is any transaction between a director and his corporation that would normally require approval of the board of directors and that is of such financial significance to the director that it would reasonably be expected to influence the director’s vote on the transaction. The interest involved can be direct or indirect, but it must be financial and material. Majority approval of a conflict-of-interest transaction by fully informed disinterested directors triggers the business judgment rule under a safe harbor provision.
Will not protect a director who violated their duty of care.

Voting & Meeting Participation

Typically, the assent of a majority of the directors present at the time the vote takes place is necessary for board approval. However, the articles of incorporation or bylaws may specify a higher level of approval.
For the board of directors’ acts at a meeting to be valid, a quorum of directors must be present at the meeting. A majority of all directors in office constitutes a quorum, unless the articles of incorporation or bylaws require a higher or lower number. A director must be present at the time that the vote is taken in order to be counted for quorum purposes, but presence includes appearances made through communications equipment that allows all persons participating in the meeting to hear and speak to one another.

Fiduciary Duties

A director owes a duty of loyalty and a duty of care to the corporation.
The duty of loyalty requires a director to act in a manner that the director reasonably believes is in the best interests of the corporation. A director who engages in a conflict-of-interest transaction with his own corporation has violated his duty of loyalty unless the transaction is protected under the safe-harbor rule.

A conflict-of-interest transaction may enjoy safe-harbor protection via (i) a majority vote of informed and disinterested directors; (ii) a majority vote of informed and disinterested shareholders; or (iii) fairness of the transaction.
The fairness test looks at the substance and procedure of the transaction. Substantively, the test asks whether the corporation received something of comparable value in exchange for what it gave to the director. Procedurally, it looks at whether the process followed by the directors in reaching their decision was appropriate. The interested directors have the burden of establishing both the substantive and procedural fairness of the transaction. A conflict-of-interest transaction in violation of the safe-harbor provisions may be enjoined or rescinded, and the corporation may seek damages from the directors.

The duty of loyalty includes the duties to refrain from dealing with the company on behalf of one with an adverse interest in the company, and to refrain from competing with the company. The operating agreement may amend this duty so long as the Amd. is not manifestly unreasonable.

No self dealing unless safe-harbor provision:

Interested Director who is self dealing discloses all material facts of the transaction to the board of directors and receives approval from a majority of the non-interested board of directors for the transaction to occur
Interested director discloses all material facts of the transaction to the shareholders and receives approval from a majority of the non-interested shareholders
Transaction is fair to the corporation in substance (terms) & procedure (process was fair)

With respect to the duty of care, directors have a duty to act with the care that a person in a like position would reasonably believe appropriate under similar circumstances. The director is presumed to have the knowledge and skills of an ordinarily prudent person and is required to use any additional knowledge or special skills that he possesses. Normally, the party alleging a violation of the duty of care must rebut the business judgment rule.

No self-dealing and no usurping of a corporate opportunity

A shareholder owes a fiduciary duty to the corporation and minority shareholders
Always talk about duty of care followed by the business rule

Officers

Officers are agents of the corporation; follow an agency analysis

Legal Actions

A shareholder may bring a direct or a derivative action against the corporation in which the shareholder owns stock.
In a direct action, the shareholder is vindicating his own rights and is not required to make a demand on the board of directors before proceeding with the litigation.
By contrast, in a derivative action, a shareholder brings suit on behalf of the corporation and is typically based on a breach of fiduciary duties by the board of directors. To bring a derivative action, the shareholder must have standing and must make a written demand upon the board of directors.

To have standing, the shareholder must have been a shareholder at the time of the wrong and at the time the action was filed and continue to be a shareholder throughout the litigation. Requirement to make a written demand upon the board of directors unless the demand would be futile. Not all jurisdictions recognize the futility exception, however. In states that do not recognize the futility exception, demand must be made upon the board in all cases.
To bring a derivative action you must bring a demand upon the board to demand action and then give 90 days for them to take that action. If the board does not take action or remedy the action in 90 days, then the suit can be brought on behalf of the corp. This requirement can be waived if irreparable injury would result from waiting the 90 days, then it can be immediate.

Futility exception—doesn’t have to bring the demand on the board if it would be futile
The board can bring a motion to dismiss the derivative action if acting in good faith and in the best interest of the corporation.

Any recovery is going to go to the corporation

Bylaws

The board of directors can also amend bylaws unless the articles of incorporation or a vote by shareholders limits this power.
Shareholder-approved bylaws can amend or repeal existing bylaw provisions, regardless of whether the bylaw was initially approved by the shareholders or the board of directors. However, a shareholder-approved bylaw dealing with director nominations may not limit the board’s power to amend, add, or repeal to ensure an orderly process. Thus, if shareholders approve a bylaw Amd. that limits further board changes, the board could only amend or add to the bylaw to safeguard the voting process; it could not repeal the shareholder-approved bylaw.

Criminal Law

Jurisdiction Basics:

There is no such thing as a thought crime, there must be some physical act in the world (Act can be speech), Act must be voluntary (had motor control over the act.), and the failure to act can be sufficient Actus Reus.

Mens Rea:

Specific Intent: Defendant committed actus reus and did it for very purpose of causing result that the law criminalizes (BAM ACTS)
Malice exists when the defendant acts in reckless disregard of a high degree of harm (realizes the risk and acts anyway.) (I AM)
General Intent: The intent to perform an act, and the act is unlawful. The defendant does not need to know that the act is unlawful; it is sufficient to intend to perform the act that the law condemns. Generally, acts done knowingly, recklessly, or negligently under the Model Penal Code (MPC) are general intent crimes. (ex. battery, kidnapping, rape, false imprisonment)
Strict Liability does not require a specific state of mind, the defendant must merely have committed the act.

Causation

Transferred intent does not apply to attempted crimes only to completed crimes
Merger: Defendant can be convicted of more than one crime arising out of the same act. The defendant cannot be committed of two crimes when the two crimes merge into one. Two Categories:

lesser included offenses (an offense in which each of its elements appear in another offense, but the other offense has something additional); and
the merger of an inchoate and a completed offense (Note: Conspiracy and a completed substantive offense do not merge, but attempt and solicitation will merge with the completed crime)

Accomplice Liability

Under the majority and MPC rule, generally, a person is an accomplice in the commission of an offense if he intentionally assists with the crime and acts with the purpose of promoting or facilitating the commission of the offense. Mere knowledge that another person intends to commit a crime is not enough to make a person an accomplice.
The accomplice must intend that his acts will assist or encourage the criminal aim. BUT, when the crime committed by the principal only requires the principal to act recklessly or negligently (e.g., involuntary manslaughter), a person may be an accomplice to that crime under the majority rule if the person merely acts recklessly or negligently with regard the principal’s commission of the crime, rather than purposefully or intentionally. Recklessly just requires the defendant to act with a conscious disregard of a substantial and unjustifiable risk that a material element of a crime exists or will result from his conduct.
Accessories after the fact are people who assist the defendant after the crime has been committed
In addition to accomplice liability for the substantive crime, individuals who aid or abet a defendant to commit a crime may also be guilty of the separate crime of conspiracy if there was an agreement to commit the crime and an overt act taken in furtherance of that agreement

Inchoate Crimes:

Solicitation

Occurs when an individual intentionally invites, requests, or commands another person to commit a crime. If the person agrees it is conspiracy instead. If the person commits the offense, the solicitation charge will merge into the completed offense

Conspiracy

Agreement (can be explicit or implicit) to commit an unlawful act (If what the conspirators agreed to do is not a crime, there is no conspiracy even if they think what they are doing is wrong) accompanied by an overt act in furtherance of the conspiracy
Chain Conspiracy: co-conspirators are engaged in an enterprise consisting of many steps; each participant is liable for the substantive crimes of his co-conspirators.

The conspirators need not know each other, but they have all agreed to participate in the same conspiracy and each can be held liable for the conspiracy and for the substantive offense is committed along the way

Spoke-Hub Conspiracy: involves many people dealing with a central hub; participants are not liable for this option of crimes of the co-conspirators because each spoke is treated as a separate agreement rather than one larger general agreement
Withdrawal of Conspiracy: at common law, it’s impossible to withdraw from a conspiracy, because the crime is completed the moment the agreement is made. At Federal level and MPC, a co-conspirator can withdraw prior to the commission of any overt act by communicating her intention to withdraw to all other conspirators or by informing law enforcement.

But After overt act: a conspirator can withdraw by helping to thwart the success of the conspiracy

Attempt

An attempt crime requires a specific intent to commit a criminal act coupled with a substantial step taken toward the commission of the intended crime.
At common law, once the defendant has taken a substantial step toward the commission of a crime, the crime of attempt is completed; there can be no abandonment or withdrawal.
Under the “substantial step” test (a subjective test), the act must be one that tends to effect the commission of a crime. Conduct does not constitute a substantial step if it is in mere preparation. Some states apply the “dangerous proximity” test, however, which requires that the defendant’s acts result in a dangerous proximity to completion of the crime.
Abandonment : Some jurisdictions do recognize voluntary abandonment as a defense to attempt. Abandonment is not voluntary, however, if it is motivated by a desire to avoid detection, a decision to delay commission of the crime until a more favorable time, or the selection of another similar objective or victim.
Remember: attempt merges into a completed offense

Lesser Include Offenses

A lesser included offense is one that does not require proof of an element beyond those required by the greater offense.

Murder

Homicide Unlawful killing of a human being with malice aforethought.
Explain what the Mens Rea is?
Concurrence & Causation To prove homicide, the prosecution must show that the defendant caused the victim’s death. The prosecution must prove both actual and proximate causation.

Actual Cause : If the victim would not have died but for the defendant’s act, then the defendant’s act is the actual cause of the killing. If the V would not have died but for D’s act, then D act is the actual cause (cause-in-fact) of the death. When the defendant sets in motion forces that lead to the death of the victim, the defendant is the actual cause of the victim’s death.
Proximate cause exists when the defendant is legally responsible for the crime. For the defendant to be legally responsible for the crime, the death must be foreseeable. That is, the death must be the natural and probable result of the conduct. A defendant's conduct is deemed to be foreseeable if it is not abnormal. Actions by a force of nature that are not within the defendant’s control are generally not foreseeable. However, an intervening cause will not relieve the defendant of criminal responsibility unless it was so out-of-the-ordinary that it would be unjust to hold the defendant responsible. Further, an act that accelerates death is a legal cause of the death.

First Degree Murder: SI crime, a deliberate and premeditated murder/killing that results during the commission of an inherently dangerous felony (BARRK) (felony murder is classified as first-degree murder)
Second Degree Murder : unlawful killing of another human being committed with malice aforethought. To be guilty of second-degree murder, Defendant must have acted with the requisite mens rea of malice aforethought. Malice aforethought includes the following mental states: the intent to kill, the intent to inflict serious bodily injury, reckless indifference to a known and unjustifiably high risk to human life (depraved heart), or intent to commit certain felonies (BARRK).

Intent to Kill: defendant acted with the desire that the victim end up dead; Intent need not be premeditated; it can be formed the moment before the killing.
Intent to Inflict Serious Bodily Harm: and then the defendant intended to hurt the victim badly, and the victim died.
Malignant or abandoned heart or depraved heart: the defendant acted with a cavalier disregard for human life and death resulted. Here, defendant must realize that his conduct is really risky but need not have any intent regarding the outcome of his actions.

Majority & MPC: defendant must actually realized there is a danger; Minority: a reasonable person would have recognized the danger.

Felony murder: death occurred during commission/attempted commission of a dangerous felony. (BARRK)
In most states, a killing that results from reckless indifference to an unjustifiably high risk to human life is a depraved-heart murder.

Felony Murder, the dangerous felony must be independent of killing itself. This can involve Felony murder can involve:

Someone who resists the felony; When a bystander is killed during a felony; Third person killed by the resister or police officers (minority rule; Majority: agency theory: a defendant is only responsible for crimes of the defendants “agents.” Because victim, police, or third-party or not the defendants agents, defendant is not responsible for their conduct.
If a co-felon is killed by a resistor or a police officer, then the defendant is not guilty a felony murder.

Manslaughter

Voluntary manslaughter occurs when a defendant intends to kill victim, but state of mind less blameworthy than murder. i.e., acted in the “heat of passion” or “under extreme emotional disturbance”

Voluntary manslaughter is murder committed as a result of or in response to an adequate provocation. something occurs that provokes the defendant into killing the victim. D must have been provoked, analyzed under whether or not objectively speaking what a reasonable person have been provoked by the victim's actions. (Mere words are usually not enough to provoke somebody to kill, walking in on adultery a classic example of a reasonable provocation that might provoke somebody to kill.) In addition, reasonable provocation the defendant must also subjectively be provoked, they must be upset by what the witness. In addition to both objective and subjective D must not have had time to cool off. This means whether or not there is sufficient time for reasonable person to cool off in between the provocation and the killing. If the person was provoked but a few days later commits the killing, that's reasonable time to cool off. On the other hand, if the provocation occurs immediately thereafter the provocation or within a reasonable amount of time the defendant commits the killing D did not have reasonable time to cool off. Finally, the D subjectively did not cool off as well. (be sure to analyze provocation both objective subjective and then time to cool off)
Test: situation in which most people would act without thinking & without time to cool off.

Involuntary manslaughter is an unintentional killing of another person with criminal negligence. Criminal negligence is grossly negligent action that puts another person at a significant risk of serious bodily injury or death. Criminal negligence is a substantial deviation from the standard of care that a reasonable person would have used. But criminal negligence is less than extremely reckless conduct which is required for depraved heart murder.

Under the Model Penal Code, the defendant must have acted recklessly, which is a “gross deviation from the standard of conduct that a law-abiding person would observe in the actor’s situation. This requires that the D must have actually been aware of the risk his conduct possessed. Involuntary manslaughter also requires a causal connection between the D’s criminally negligent or unlawful act and the death.
Recklessness: D acts Recklessly when he acts with a conscious disregard of a substantial and unjustifiable risk that a material element of a crime will result from his conduct.

Crimes Against a person

Battery: Unlawful Application of force

general intent crime so voluntary intoxication an unreasonable mistake of fact are not available defenses. Does not require actual physical contact between the defendant and the victim (e.g. throwing a rock that hit someone)

Assault (2 forms): attempted battery (SI) & fear of harm (GI)

Property Crimes:

Larceny is the trespassory taking and carrying away of the personal property of another with the intent to permanently deprive that person of the property.

continuing trespass rule, if the initial taking is not trespassory because there is no intent at the time to permanently deprive the person of the property then the continuing trespass rule will deem the initial trespass as continuing so that when the D later develops the requisite criminal intent.

Embezzlement: fraudulent conversion of the property of another by a person who is in lawful possession of the property. Conversion is the inappropriate use of property, held pursuant to a trust agreement, which causes a serious interference with the owner’s rights to the property. occurs where a defendant starts out having the victims consent to have the property but commits embezzlement by converting the property to his own use.
False Pretenses: occurs when defendant obtains title to someone else’s property through an act of deception. It requires obtaining title to the property of another person through the reliance of that person on a known false representation of a material past or present fact, and the representation is made with the intent to defraud.
Larceny by Trick: a defendant who commits larceny by trick obtains only possession of the personal property of another, not title of that property. Also, the defendant who commits larceny by trick obtains possession of the property by intentionally making a false statement to the victim.
Robbery : Taking of personal property of another from other’s person or presence by force or threat of imminent death or injury with intent to permanently deprive
Extortion : Obtaining property by threat of harm/exposing information.
Receipt Of Stolen Property : To be guilty of receiving stolen property, the defendant must (i) have control of stolen property, (ii) have the knowledge that the property is stolen, and (iii) have the intent to permanently deprive the owner of the property. Property that is unlawfully obtained through larceny, embezzlement, or false pretense (theft crimes) is stolen property. Knowledge that the property is stolen must coincide with the act of receiving the property.

Some jurisdictions require that the defendant have actual subjective knowledge that the property has been stolen.
Other jurisdictions permit the defendant’s knowledge to be inferred from facts that would alert a reasonable person to unlawful acquisition of the property.

CL Burglary breaking and entering the dwelling of another at nighttime with the specific intent to commit a felony therein. “Breaking” is generally accomplished by using force to create an opening into a dwelling, but slight force, such as pushing open a window that was ajar, satisfies this element. “Entering” occurs when any portion of the defendant’s body crosses into the dwelling without permission through the opening created by the breaking.
Arson: the malicious burning of the dwelling (or another structure of another person

At common law, there had to be burning (fire) as opposed to an explosion or smoke damage. It also requires damage to the structure, not just the contents inside, but under Modern statutes: arson even if there’s no damage to the structure of the building or if the fire was caused by an explosion.
At common law, had to be a dwelling, not another structure, but modernly: burning down a commercial building is arson
At common law: you could not torch your own house, but under Modern statutes: burning your own home is arson.

Other Crimes

Forgery: The making of a false writing with apparent legal significance and with the intent to defraud
Rape is unlawful Sexual intercourse with a female (modernly gender-neutral) against her will by force or threat of force (modern statutes require showing a lack of consent rather than the force requirement)
Statutory rape is a regulatory morals offense that involves consensual sexual intercourse with a person under the age of consent.

Statutory rape is a strict liability offense; So long as the defendant knows that he is having sex, he cannot claim ignorance or mistake about the victim’s age

Kidnapping is the unlawful confinement of another person against that person’s will, either by moving or hiding the victim and must hide the victim for a substantial period of time
Perjury: willful act of falsely promising to tell the truth, verbally or in writing, about material matters
Bribery is the corrupt payment of something of value for purposes of influencing an official in the discharge of his official duties

Defenses

Insanity : Majority jurisdictions, defendant has the burden of proving insanity. Insanity includes mental disease that may affect legal responsibility.

M’Naughten: defendant either did not know the nature of the act or did not know that the act was wrong because of mental disease or defect.
Irresistible Impulse: defendant has a mental disease or defect that prevents the defendant from controlling himself
Durham Rule: defendant would not have committed the crime but for his having a mental disease or defect (rarely used because so defendant-friendly)
Model Penal Code: due to a mental disease or defect, the defendant did not have substantial capacity to appreciate the wrongfulness of his actions or to conform his conduct to the law.

Voluntary Intoxication occurs when a person intentionally ingests the substance, knowing it is an intoxicant.

defense only to specific intent crimes, and only if it prevented the defendant from forming the mens rea.
Under MPC, voluntary intoxication is only a defense to crimes for which material element requires purpose or knowledge and the intoxication prevents the formulation of that mental state

Involuntary Intoxication occurs when a person Doesn’t realize that she received an intoxicating substance (e.g., “date rape” drugs); Is coerced into ingesting a substance; or Has an unexpected or unanticipated reaction to prescription medication.

Can be a valid defense to general intent, specific intent and malice crimes when it negates the mens rea necessary for the crime

Self Defense: two kinds—deadly & non-deadly Non-deadly force:

victim entitled to use non-deadly force any time he reasonably fears eminent unlawful harm.
A victim is entitled to use deadly force only if he reasonably believes that deadly force will be used against him, or under the MPC, reasonably believes that the crime will result in serious bodily injury.

Majority rule: retreat is not required even when entitled to use deadly force.
Minority rule: must retreat rather than using deadly force if safe to do so, but even in minority jurisdictions, retreat is never required when the person is employing deadly force is in his own home

Defense of Others: same right to defend other individuals against a criminal that she has to defend herself.
Defense of Property: only non-deadly

Duress is when defendant claims he committed a crime only because he was threatened by a third-party and reasonably believed that the only way to avoid death or injury to himself or others wants to commit the crime. In order to be a defense, there must be a threat of death or serious bodily harm. Mere injury, particularly injury to property, is not sufficient. Duress is a defense for all crimes other than intentional murder
Duress : A third party’s unlawful threat that causes a defendant to reasonably believe that the only way to avoid death or serious bodily injury to himself or another is to violate the law, and that causes the defendant to do so, allows the defendant to claim the duress defense.
Necessity: Available in response to natural forces; i.e., it is the lesser of two evils
Mistake of Fact

GI crimes: only reasonable mistakes of fact maybe use as a defense.
SI crime: all mistakes of fact are potential defenses, even unreasonable mistakes

Under the common law, one who is not the aggressor is justified in using reasonable force against another person to prevent immediate unlawful harm to herself. The harm to the defendant must be imminent, not a threat of future harm, and the person can only use as much force as is required to repel the attack.

Criminal Procedure

4th Amd.—Unreasonable Search & Seizure

Probable Cause: A proper arrest is one that is based on probable cause. Probable cause may be supported from a number of different sources including a police officer’s personal observations.
Automobile: The Fourth Amd. does not require police to obtain a warrant to search a vehicle if they have probable cause to believe it contains contraband or evidence of a criminal activity.
Plain view doctrine : A warrantless search is valid if it is reasonable in scope and if it is made incident to a lawful arrest. Under the plain view doctrine, if an item is in public view it may be seized without a warrant since there is no reasonable expectation of privacy for such an item.
To have standing to challenge the admission of illegally seized evidence, the defendant’s Fourth Amd. rights must have been violated. A defendant cannot successfully challenge governmental conduct as a violation of the Fourth Amd. protection against unreasonable searches and seizures unless the defendant himself has been seized or he has a reasonable expectation of privacy with regard to the place searched or the item seized. It is not enough that the introduction as evidence of an item seized may incriminate the defendant.

5th Amd.—Due Process (Grand jury, double jeopardy, self-incrimination, Miranda)

Custodial interrogation : is questioning initiated by law enforcement officers after a person has been taken into custody. A person under arrest is, by definition, in custody and any police questioning of the person under arrest would thus be custodial interrogation. Questioning of a suspect by a police officer subsequent to an arrest must be preceded by Miranda warnings and a waiver or the suspect’s Miranda rights are violated.
Exclusionary Rule when 1st Amend. is broken : The Supreme Court has indicated that violations of Miranda do not necessarily support the “fruit-of-the-poisonous-tree” doctrine, at least with respect to subsequent statements by the defendant. Isolated negligence by law enforcement personnel will not trigger the exclusionary rule.
Unambiguous Request for Counsel : The right to counsel under the Fifth Amendment is not automatic. To invoke the right to counsel under the Fifth Amendment, a suspect must make a specific, unambiguous statement asserting her desire to have counsel present. If a suspect makes an ambiguous statement regarding the right to counsel, the police are not required to end the interrogation or to clarify whether the suspect wants to invoke the right. However, once that right to counsel is invoked, all interrogation must stop until counsel is present.
Questioning a person in Prison : Imprisonment alone does not necessarily create a custodial situation within the meaning of Miranda. The questioning of a prisoner, who is removed from the general prison population, about events that took place outside the prison is not categorically “custodial” for Miranda purposes. A standard, objective “totality of circumstances” analysis applies when an inmate is interviewed, including consideration of the language that is used in summoning the prisoner to the interview and the manner in which the interrogation is conducted. In addition, police may re-open interrogation of a suspect who has asserted his Fifth Amendment right to counsel if there has been a 14-day or more break in custody, such as the release back into the general prison population of a suspect who has been incarcerated for another crime. In such circumstances, the officers must give fresh Miranda warnings and get a valid waiver before beginning questioning.
Double Jeopardy : The Fifth Amd. protection against double jeopardy applies to the states through the Due Process Clause of the 14th Amd. and protects against multiple punishments for the same offense. If a defendant’s conduct may be prosecuted as two or more crimes, then the Blockburger test is applied to determine whether the crimes constitute the same offense for double jeopardy purposes. Under this test, each crime must require the proof of an element that the other does not in order for each to be considered as a separate offense. The double jeopardy clause generally bars successive prosecutions for greater and lesser included offenses.
Incorrectly conveying right to counsel when giving Miranda : Once a custodial interrogation begins, anything the defendant says is inadmissible until the defendant is informed of their Miranda rights and the defendant waives those rights. Law-enforcement officials must inform suspects of their right to consult an attorney and to have the attorney present during an interrogation and that an attorney will be appointed to represent indigent defendants. The warnings, which must be given before interrogation begins, need not be a verbatim repetition of the language used in the Miranda decision, but simply must “reasonably convey” the rights required by Miranda.
Public Safety exception : Limited interrogation w/out Miranda warnings, when intended to protect public safety, fits Miranda public safety exception.
The exclusionary rule would only be triggered if the conduct of the police was shown to be sufficiently deliberate and a pattern of conduct that exclusion would deter.
The Fifth Amd., as applied to the states through the 14th Amd., provides the accused with the right not to be compelled to make incriminating statements during custodial interrogation (the right to remain silent). As with the Fifth Amd. right to counsel, the defendant must make a specific, unambiguous statement asserting his right to remain silent. Merely remaining silent does not invoke the privilege. If a defendant invokes his right to remain silent, the interrogator must honor that request. Once the right is invoked, a defendant may knowingly and voluntarily waive his right to remain silent. The burden is on the government to show that waiver was both knowing and voluntary based on the totality of the circumstances. A statement is involuntary only if the police act to coerce the defendant into making the statement. A suspect waives his right to remain silent by making an uncoerced statement to the police. Once the right to remain silent has been waived, the police have no obligation to inform the defendant that counsel is trying to reach him.
For Miranda purposes, custody is established if a reasonable person under similar circumstances would believe she was not free to leave, and an interrogation is either express questioning or its functional equivalent by the police.
Miranda protections apply only to testimonial or compelled communicative evidence by a suspect who is in custody and under interrogation.
If a custodial suspect initiates communication with the police after invoking his right to counsel, the suspect’s subsequent statements may be admissible. Although comments relating to routine incidents of custody are not considered as initiating communication, statements that clearly indicate a willingness to speak about matters relating to the investigation are treated as initiating communication.

6th Amd.—Due Process (Lawyers, delays, impartial jury, confrontation clause)

Due Process : The Due Process Clause requires that the prosecution prove all of the elements of the case beyond a reasonable doubt. A mandatory presumption regarding an element of an offense violates the due-process requirement. This could include either a conclusive presumption that cannot be rebutted (which would relieve the prosecution of having to prove an element of their case) or a rebuttable mandatory presumption (which shifts the burden of proof regarding the element of the offense).
Right to Jury Trial: Any fact, other than a prior conviction, that can be used to increase a sentence beyond the statutorily prescribed maximum must be charged in an indictment, submitted to a jury, and established beyond a reasonable doubt. The failure to abide by this is a violation of the defendant’s due-process rights under the Fifth Amd. and Sixth Amd. rights to notice and a jury trial, both of which are incorporated against the states through the 14th Amd..
A fact is an element of a crime, as opposed to a sentencing enhancement, when it increases the max. sentence imposed.
A court should only grant a judgment of acquittal if it finds that there is insufficient evidence for a jury reasonably to find the defendant guilty. In a criminal trial, the prosecution bears the burden of producing sufficient evidence of the alleged crime.

Evidence

Relevance

As a rule, evidence must be relevant to be admissible, and all relevant evidence is admissible unless excluded by a specific rule, law, or constitutional provision. Evidence is relevant if: (i) it has any tendency to make a fact more or less probable, and (ii) the fact is of consequence in determining the action. additionally, evidence will not be admitted id the probative value is substantially outweighed by the risk of prejudice, confusing the issues, or misleading the jury

Policy Exclusions

Subsequent remedial measures : When a party takes remedial measures that would have made an earlier injury or harm less likely to occur, evidence of the subsequent measures is not admissible to prove negligence or culpable conduct.
Compromise offers: made by any party are not admissible to prove the validity of a disputed claim, nor are they admissible for impeachment by prior inconsistent statement or contradiction.
Settlement offers or things said while in negotiation are not admissible

There must be a pending dispute (i.e. not at the scene of the accident before any disagreement/dispute as to fault)

Evidence of liability insurance is not allowed in to show liability.
Evidence of the payment, offer to pay, or promise to pay medical or similar expenses resulting from an injury is not admissible to prove liability for the injury. Unlike compromise offers, the validity or amount of a claim need not be in dispute.
Rape Shield Law : Generally, pursuant to the “rape shield” rule, evidence to prove the sexual behavior or predisposition of an alleged victim of sexual assault is not admissible in either civil or criminal proceedings. However, in a civil case

Evidence offered to prove an alleged victim’s sexual behavior or predisposition is admissible if its probative value substantially outweighs the danger of harm to any victim and of unfair prejudice to any party.

Character Evidence

In a civil case, character evidence is not going to be admissible unless character is an essential element of a claim.
In criminal cases: generally character evidence is not admissible.

Defendant’s own good character (relevant to the issue/type of character at issue) and prosecution can, on cross examination can ask about specific acts.
If Defendant attack’s victim’s character, the prosecution can rehabilitate victim’s character OR attack defendant’s character (as long as its related to the trait the defendant is alleging the victim had

In a criminal case, the prosecution is not permitted to introduce evidence of a defendant’s bad character to prove that the defendant has a propensity to commit crimes and therefore is likely to have committed the crime in question.

Evidence of a defendant’s crimes or other wrongful acts are admissible for a non-propensity purpose such as proving motive, opportunity, intent, preparation, plan, knowledge, identity, absence of mistake, or lack of accident (MIMIC Evidence)

If the defendant makes their character an issue in the case by offering evidence of their good character or the victim’s bad character, the defendant opens the door to allow the prosecution to rebut that evidence.
Habit: In a civil case, evidence of a person’s character trait is generally inadmissible to prove that the person acted in accordance with that trait on a particular occasion. Evidence of a person’s habit is admissible to prove that the person acted in accordance with the habit on a particular occasion. A habit is a person’s particular routine reaction to a specific set of circumstances. Because habit evidence can run afoul of the bans on character evidence and prior bad acts evidence, courts generally limit habit evidence to proof of relevant behaviors that are not just consistent but semi-automatic.
Sexual Misconduct of the victim generally cannot be admitted, but in a civil case, the court can admit evidence of the sexual behavior or predisposition of the victim if the probative value substantially outweighs the prejudicial effect.

Impeachment

Prior Conviction: Any witness can be impeached by evidence that they have been convicted of a crime that involved dishonesty or false statement, regardless of the punishment imposed or the prejudicial effect of the evidence. However, conviction for a crime not involving fraud or dishonesty is admissible to impeach only if the crime is punishable by death or imprisonment for more than one year. A crime involves dishonesty or false statement if establishing the elements of the crime requires proof or admission of an act of dishonesty or false statement.
Bias: Because a witness may be influenced by his relationship to a party, his interest in testifying, or his interest in the outcome of the case, a witness’s bias or interest is always relevant to the credibility of his testimony. Although the Federal Rules do not expressly require that a party ask the witness about an alleged bias before introducing extrinsic evidence of that bias, many courts require that such a foundation be laid before extrinsic evidence of bias can be introduced.
A witness can be impeached by another witness’s opinion about the initial witness’s credibility, trustworthiness, etc., but not generally about specific instances of conduct.
You can ask a witness who has just testified about a specific act, but you are stuck with answer, so if they say no, the inquiry ends
Felony conviction (not involving truth/honesty) may be admitted against a non-defendant witness under 403 balancing test (its probative value substantially outweighs the danger of harm to any victim and of unfair prejudice to any party.)

Used against the defendant if probative value outweighs its prejudicial effect

If more than 10 years have passed since the conviction or since the release (whichever is later) the evidence will ONLY come in if the probative value substantially outweighs the prejudicial effect AND the proponent gives notice to the other side.
Prior inconsistent statement can be brought in to impeach a witness
Sensory competence (mental or physical abilities of the witness) can be brought in to challenge the witness statement
Can impeach a hearsay declarant even if they aren’t currently in court
Rehabilitating a witness: Can clarify or bring in other witnesses to testify as to truthfulness or prior consistent statement

Witness Testimony

Relevance : All relevant evidence is admissible unless excluded by a specific rule, law, or constitutional provision. Evidence is relevant if (i) it has any tendency to make a fact more or less probable than it would be without the evidence (i.e., probative), and (ii) the fact is of consequence in determining the action (i.e., material). Witnesses must be competent; they must have personal knowledge as to what they are testifying about.
A lay witness is generally not permitted to testify as to his opinion, except with respect to common-sense impressions. To be admissible, the opinion must be (i) rationally based on the witness’s perception, and (ii) helpful to a clear understanding of the witness’s testimony or a fact in issue.
An expert witness may testify as to his opinion, provided: (i) the witness is qualified as an expert by knowledge, skill, experience, training, or education; (ii) the testimony is based on sufficient facts or data; (iii) the testimony is the product of reliable principles and methods; and (iv) the witness applied the principles and methods reliably to the facts of the case.

Hearsay

Hearsay is an out-of-court statement that is offered to prove the truth of the matter asserted. Hearsay evidence is generally inadmissible unless it falls within an exception or exclusion. *always explain why or why not it is hearsay in an essay*
Hearsay is an out-of-court statement offered to prove the truth of the matter asserted. A hearsay statement may be an oral or written assertion and can be nonverbal conduct intended as an assertion. Hearsay evidence is generally inadmissible unless it falls within an exception or exclusion.
*always look out for double hearsay!*

Hearsay Exclusions

Non-assertive conduct
Verbal Assertions/legally operative language: This statement is offered to prove that the statement was made (verbal conduct) words that by their very meaning have legal significance (i.e., “I do”)
Effect on the Listener: statements offered to prove something other than the truth of the matter asserted are not hearsay. A statement offered to show the effect on the person who heard it is not hearsay. (i.e. to show notice)
Circumstantial evidence of the State of Mind of Declarant: Evidence offered to show person’s state of mind is not hearsay (i.e.,“I am from mars” shows inanity)
Admissions by a Party Opponent: A statement made by a party to the current litigation is not hearsay if it is offered by an opposing party.

Adoptive admissions : a statement made by someone else, which is then expressly or impliedly adopted

Can sometimes adopt a statement by silence—Requirements:

the party heard the statement and understood it;
the party had the ability to respond to; and
a reasonable person similarly situated would’ve denied the statement.

Vicarious admissions: statements made by persons authorized to speak on a party’s behalf—speaking agents

statements made by agents or employees if made within the scope of employment

Co-Conspirators: Statements made by co-conspirators during and in furtherance of a conspiracy are admissible against other co-conspirators.

Prior Inconsistent statements: must have been made under oath at a trial, hearing, or deposition.

Note: any prior inconsistent statement can be used to impeach (non-hearsay purpose).

A previous out-of-court identification of a person after perceiving that person is not hearsay and may be admissible as substantive evidence. Even if the witness has no memory of the prior identification, it will be admissible because the witness is subject to cross-examination about the prior identification.
Present Recollection Refreshed: use of a writing may be admitted to refresh a witness’s recollection for purposes of testifying.

Note: the witness must be able to testify from memory after looking at the item; can come into evidence only if the adverse party so requests.

Hearsay Exceptions (w/ Unavailability)

Former Testimony: given by an unavailable witness under oath at a prior hearing or deposition is admissible in a subsequent trial if the party against whom the testimony is being offered had an opportunity and similar motive to develop the testimony by direct or cross-examination at the prior trial, deposition, or hearing
Dying Declaration: requires that the individual believes she is dying; individual believes death is eminent; and the statement relates to the cause or circumstances of death.

ONLY Admissible in a homicide case or a civil case, but The declarant does not actually have to die, just must be unavailable in some way

Statements Against Interest: At the time is was made, the statement was against the declarants pecuniary, proprietary, civil, or penal interest, such that a reasonable person would not have made the statement unless it were true.

Exonerating statements:

statements that would subject the declarant to a criminal liability or not admissible unless corroborating circumstance clearly indicate the trustworthiness of the statement.

Statement of Personal or Family History: Statements concerning the unavailable declarant’s own birth, adoption, marriage, familial relationship, etc. are admissible under this exception
Statement Offered Against Party Procuring Declarant’s Unavailability: A party engages in wrongdoing for the purpose of making the declarant unavailable to testify, and renders the declarant unavailable, then: the party cannot claim the defendant is unavailable; and he door is open to use anything the declarant said against the party

Hearsay Exceptions (Unavailability Immaterial)

Present Sense Impression: a statement describing or explaining an event or condition that is made while or immediately after the declarant perceived it is not excluded as hearsay.
Ancient Documents: at least 20 years old
Excited Utterance: A statement made about a startling event while the declarant is under the stress of excitement that it caused is not excluded as hearsay. The event must shock or excite the declarant, and the statement must relate to the event.
Recorded Recollection: allows into evidence a record on a matter the witness once knew about but now cannot recall well enough to testify fully and was made when the matter was fresh in the witness’s memory. A written document admitted as recorded recollection may be read to the jury, but it may not be received as an exhibit unless it is offered as such by the adverse party.
Past Medical Treatment or Diagnosis: Although there is no common-law privilege covering statements made by a patient to a physician, most states protect such communications by statute, so long as the communications were made for the purpose of obtaining medical treatment. However, in many states, a patient is deemed to have waived the privilege by placing her condition in issue in a personal injury lawsuit. A statement describing past or present symptoms is not hearsay if it is made for medical diagnosis or treatment. A statement of the cause or source of the condition is admissible if it is reasonably pertinent to diagnosis or treatment. The statement need not be made to a physician and nor be made by the patient.
Then Existing State of Mind: A statement of present intent, motive, or plan can be admissible as a hearsay exception to prove conduct in conformity with that state of mind.
Business Records Exception to Hearsay: Hearsay evidence is generally inadmissible unless it falls within an exception or exclusion. A business record of an event or condition is not excluded as hearsay if: (i) the record was kept in the course of a regularly conducted activity of a business, (ii) the making of the record was a regular practice of that activity, and (iii) the record was made at or near the time by someone with knowledge.
Government Records: Certain records of public agencies and administrators may be excluded if the circumstance is indicate a lack of trustworthiness. Activities; observation; and factual findings are generally admissible

Law enforcement: police reports being used against criminal defendants can only introduce the activities, not what was observed or concluded. But, may still come in under the recorded recollection exception (officer cannot remember)

Learned Treatises: May be used to impeach expert witnesses and as substantive evidence. May be used as substantive evidence once it is established as a reliable authority, and expert relied on it, or it was used to cross examine an expert.

Confrontation Clause

An out of court statement that is offered against the D in a criminal case will be excluded if it violates the 6th Amend. The out of court statement violates the 6th amendment when (1) the declarant is unavailable (2) the defendant did not have an opportunity to cross examine the declarant about the statement when they made that statement and (3) the statement is testimonial. Testimonial means the statement was made in a prior court proceeding (2) it was made in furtherance of a police investigation, meaning it helped the police obtain relevant evidence regarding another case. To determine whether something is testimonial courts use an objective test given the circumstances. Not Testimonial are statements that are made during an ongoing police emergency and will be admitted because they don’t violate the 6th amendment confrontation clause and mainly help assist the police in the ongoing emergency. Business records are also not testimonial because they are kept in the regular course of business etc.

Privileges

Spousal Testimonial Privilege: a spouse can refuse to testify against the other spouse

Only applies to the testifying spouse and while the spouses are still married

Confidential Marital Communications: survives the marriage, but there has to be some conduct that indicates it is intended to be confidential (not shared with others)

Family Law

Premarital Agreements

To prevent enforcement of a premarital agreement, the UPAA (Uniform Premarital Agreement Act) requires that the party against whom enforcement is sought prove (i) involuntariness, or (ii) that the agreement was unconscionable when it was executed, that she did not receive or waive fair and reasonable disclosure, and she “did not have, or reasonably could not have had, an adequate knowledge” of the other’s assets and obligations. The agreement must be in writing and signed by the party to be charged. Premarital agreements must provide full disclosure of financial status, including income, assets, and liabilities of all parties. Absent full disclosure, a court will generally refuse to enforce the agreement. Most courts evaluate fairness at the time of the execution of the contract. The current trend is for courts to enforce contractual agreements that may not be fair as long as there has been fair disclosure. To be voluntary, the parties must enter in the contract free of fraud, duress, or misrepresentation. A party’s insistence on the agreement as a condition to marriage is not considered duress on its own. Entering into a contract voluntarily generally means there was no fraud, duress, or misrepresentation. Courts consider factors such as time-pressure, the parties’ previous business experience, and the opportunity to be represented by independent counsel.
A court may always modify child support or custody provisions in a marital agreement, even if the agreement states that modification is not permitted. Thus, the majority of jurisdictions find that clauses relating to child custody and support are unenforceable. Instead, the court will make an independent decision based on the best interests of the child.

Marriage

A marriage that is valid under the law of the place in which 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.
Almost all states recognize common-law marriages that were entered into in a jurisdiction that does recognize such relationships if the parties were domiciled in that state and their conduct meets the requirements of the state’s law for establishing such a marriage
Common-law marriages are defined as marriage when the parties: (i) agree they are married; (ii) cohabit as husband and wife; and (iii) hold themselves out in the public as married. The court may look to cohabitation or reputation to determine if the couple holds or held themselves out as husband and wife.
If either party is still part of a valid marriage, a subsequent marriage is void. There is a presumption that the most recent marriage is valid. However, this presumption is rebuttable by cogent evidence of the existence of a prior valid marriage at the time that the latest marriage was entered into. A valid marriage, including common law marriage, can be terminated only by annulment, divorce, or death.
Most states have adopted a version of the putative spouse doctrine. Under the doctrine, a party who participated in a ceremonial marriage and believes in good faith that the marriage is valid may use a state’s divorce provisions if the marriage is later found void due to an impediment. Although this claim does not result in a divorce, it does provide equitable relief through maintenance and property distribution.

Separation Agreements

Separation agreements can be invalidated, in whole or in part, if the court makes a finding of fraud or unconscionability. A contract is unconscionable when it is so unfair to one party that no reasonable person in the position of the parties would have agreed to it. The contract or part of the contract at issue must have been offensive at the time it was made. Unconscionability may also be applied to prevent unfair surprise.

Divorce

Most jurisdictions recognize both fault and no-fault grounds for divorce. In most states, the fact that a divorce is granted on a fault ground, such as adultery, is not a factor in the distribution of property.

Mediated Settlement

When a mediator participates in the creation of a settlement agreement, misconduct by the mediator can give rise to grounds for setting aside the agreement. There are several standards a mediator must comply with in the mediation process.

A mediator must conduct the mediation process in an impartial manner and disclose all potential grounds of bias and conflicts of interest.
A mediator is also required to facilitate the participants’ understanding of what mediation is.
Additionally, a mediator is required to recognize a family situation involving domestic abuse and take appropriate steps and shape the mediation process accordingly.
Finally, a mediator is required to structure the mediation process so that the participants make decisions based on sufficient information and knowledge.

Marital vs. Separate Property

In most states, all property acquired during the marriage is marital property and subject to equitable distribution. Property acquired by one spouse between filing and granting a divorce can be treated as marital property until a divorce decree has been entered. However, some jurisdictions treat property acquired after permanently separating from the other spouse as separate property. Still other states draw the line between marital and separate property on the date that the divorce action is filed.
Whether the appreciation in nonmarital property will be subject to equitable distribution will depend on whether the appreciation can be attributable to spousal labor.
The majority of jurisdictions do not treat a professional license or degree as a distributable property interest.

A court may use its equity power to award a spouse reimbursement for his actual contribution toward the other spouse’s educational and related living expenses.
A court may, however, view an advanced degree or license as increased earning capacity, which may have an effect on the determination of alimony.

Equitable Distribution:

The objective of the equitable-distribution system is to order a fair distribution of all marital property, taking into consideration all of the circumstances between the parties. In most states, all property acquired during the marriage is marital property and subject to equitable distribution.
Courts consider a number of factors in determining the equitable distribution of marital property. Some of the relevant factors in this case include the length of the marriage, the age, health, earning potential, and needs of both spouses, the value of separate property, the spouses’ standard of living, and economic circumstances of each spouse at the time of divorce.
Equitable distribution is not necessarily an equal division of marital assets. Courts consider a number of factors, including the length of the marriage, contributions to the marital estate, and custodianship of children.

Spousal Support

Spousal support may be a lump sum, permanent, limited duration, rehabilitative, or reimbursement.
Permanent spousal support is typically awarded only when the marriage was one of long duration. Although jurisdictions differ on the definition of “long-term,” it typically refers to a marriage of 15 years or more.
Rehabilitative support is for a limited period of time, such as until the spouse receives education or employment. The purpose of this type of support is to enhance and improve the earning capacity of the economically dependent spouse. The court would consider other factors including the couple’s standard of living during the marriage, the time it will take for a spouse to complete any education or training, the length of the marriage, and the parties’ age and health.
Spousal support is generally awarded in a divorce if one spouse cannot provide for his own needs with employment. Most jurisdictions consider factors such as the financial resources and needs of each party, length of the marriage, contributions by one spouse to the marriage, and age and health. Some states consider marital misconduct as a factor.

Modification of Support & Awards

Though a support award can be modified subsequent to a divorce decree, the property division award cannot be modified. Unlike support awards, which are subject to changing circumstances, the division of the marital assets was determined based upon known facts and circumstances as they existed at the time of divorce.
Spousal support awards can be modified based upon a significant change in a party’s circumstances.
Modification of child support orders is governed by the Uniform Interstate Family Support Act (UIFSA). Under UIFSA, a state court does not have jurisdiction to modify an order of child support rendered by a court of another state if the original state has continuing, exclusive jurisdiction. This rule applies unless the parties, including the child, no longer reside in that state or the parties expressly agree to another state’s jurisdiction.
State courts have subject matter jurisdiction over domestic relations issues. A petition to modify a property settlement related to divorce is a domestic relations issue. Unlike child support, UIFSA does not apply to divorce related property disputes so those jurisdictional rules do not limit the state’s jurisdiction. The court may exercise personal jurisdiction over an individual if that person is voluntarily present in the state and served with process while there.
Although a modification to child support may be made for the period while the cause of action is pending, states cannot retroactively modify child support before the date of service of process.
Generally, a state may prospectively modify a child support order when there is a substantial change in circumstances regarding the child’s needs or the parent’s financial situation. The parent requesting the modification has the burden of showing a substantial change in circumstances such as a significant decrease in income.
When a parent voluntarily changes his employment, a reduction in income alone is not sufficient proof of substantial changes in circumstances. The courts will consider the parent’s earning capacity and other factors surrounding the change before deciding whether to modify the support order.
Spousal support is an obligation of one party to provide financial support to the other after a divorce. Courts can modify a spousal support order based on a significant change in circumstances.

Modification of the Parent-Child Relationship

Traditionally, courts have been loath to modify an established parent-child relationship, citing the child’s best interest as reason to deny admission of evidence of non-paternity or to deny a motion to disestablish paternity.
Under the Uniform Child Custody Jurisdiction and Enforcement Act (UCCJEA), which has been widely adopted, a court has subject matter jurisdiction to preside over custody hearings and either enter or modify custody or visitation orders if the state is: (i) the child’s home state and has been the home state for a period of six months; or (ii) was the child’s home state in the past six months and the child is absent from the state, but one of the parents (or guardians) continues to live in the state.
In such a situation, when there is no home-state jurisdiction, the UCCJEA permits a court to enter or modify an order if (i) the child and at least one parent have a significant connection with the state, and (ii) there is substantial evidence in the state concerning the child’s care, protection, training and personal relationships.
The standard for determining child custody is the best interests of the child. Most courts will consider the wishes of the child if the court can determine that the child has a sufficient maturity to express a preference. Although age is not the sole factor in determining whether a child should be consulted, it is considered by the court. If children are consulted, the court evaluates the reasons behind the preference.
The Supreme Court has held that a fit parent has a fundamental right to the care, custody, and control of his children and state courts must give “special weight” to a fit parent’s decisions on care, custody, and control.
A fit parent has a fundamental right to the care, custody, and control of her children. As such, state courts must give special weight to a fit parent’s decision to deny nonparent visitation, unless denying visitation would be detrimental to the child. In some situations, the courts will grant visitation to a third party, such as a stepparent. However, this is typically limited to those cases in which the third party lived with the child for an extended period of time and acted as a de facto parent prior to the divorce.

Adoption

The right of an unwed father to object to an adoption may be denied if the father does not demonstrate a commitment to the responsibilities of parenthood, but cannot be denied if such a commitment has been made.

Partnerships

General Partnership Formation

Intent: A general partnership is an association of two or more persons to carry on a for-profit business as co-owners. To form a general partnership, at least two persons must intend to carry on a business for profit as co-owners but it is not necessary that they specifically intent to form a general partnership. Individuals can inadvertently form a general partnership unless they express their intention to do something else. Their subjective intent is irrelevant.
Profits sharing test – payment of debt: When two or more persons carry on as co-owners of a business for profit, it is presumed that they are partners, whether or not the persons intend to form a partnership. However, a partnership does not exist between persons when one person receives profits in payment of a debt.
A partnership is an association of two or more persons to carry on a for-profit business as co-owners. A partner is jointly and severally liable for all partnership obligations. Because a partner is an agent of the partnership, the partnership is liable for a partner’s tortious acts, including fraud, committed in the ordinary course of the partnership’s business or with the partnership’s authority, whether actual or apparent. Unless there is also a judgment against the partner, a judgment against a partnership cannot be satisfied from a partner’s assets, only from the partnership’s assets. Even though a partner is personally liable for a partnership obligation, a partnership creditor generally must exhaust the partnership’s assets before levying on the partners’ personal assets.

Liability

can recover from partners in their individual capacities, as each general partner is personally liable for debts and obligations: A partner is jointly and severally liable for all partnership obligations. A judgment against a partnership is not a judgment against its partners. To collect from a partner personally, a party must first obtain a judgment against the partner individually and against the partnership. These judgments can be sought in the same action. Unless there is a judgment against the partner, a judgment against a partnership cannot be satisfied from a partner’s assets, only the partnership’s assets. If a claimant first obtains a judgment against the partner individually and the partnership, the claimant generally must exhaust the partnership’s assets before levying on the partner’s personal assets.
New Partner Liability for Preexisting Obligations: A person admitted as a partner into an existing partnership is not personally liable for any prior partnership obligations. However, any capital contribution made by an incoming partner to the partnership is at risk for the satisfaction of such partnership obligations.

Actual and Apparent authority

Actual authority: A partner is an agent of the partnership for the purpose of its business and can contractually bind the partnership when the partner acts with either actual or apparent authority. A partner’s act that was authorized by the partnership binds the partnership. Actual authority includes express authority and implied authority. Express authority can arise from the partnership agreement itself, the partners authorization, or a statement of authority that is filed with the state.

Apparent authority: Under the principle of apparent authority, even if a partner’s act is not authorized by the partnership, the partner’s act can still bind the partnership. Apparent authority applies when the partner performs the unauthorized act in the ordinary course of apparently carrying on the partnership’s business or the kind of business that is carried out by the partnership. But a third party who is dealing with the partner cannot hold the partnership liable when the third party knew or had received notification that the partner lacked authority. For the partnership to escape liability, the third party generally must have actual knowledge of the partner’s lack of actual authority.

Fiduciary Duties

Duty of Loyalty/Care A partner owes the partnership and the other partners two fiduciary duties—the duty of loyalty and the duty of care. Under the duty of loyalty, a partner is prohibited from using partnership property or business to derive a personal benefit without notifying the partnership. Under the duty of care, a partner is prohibited from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of the law.
Legal Action: A partnership may pursue legal action against a partner for breach of the partnership agreement or for violating a duty owed to the partnership that caused the partnership harm. A partner may pursue a legal action against the partnership or another partner to enforce the partner’s rights under the partnership agreement or the RUPA.

Withdrawal/Dissociation

Effects of Wrongful Dissociating Partner: A partner can withdraw or dissociate from a partnership at any time, even if the dissociation is wrongful, such as when it violates an express provision of the partnership agreement. A partner who wrongfully dissociates is liable to the partnership and the other partners for damages caused by the dissociation. In addition, a dissociated partner generally does not have the right to participate in the management or conduct of the partnership business and cannot participate in winding up the business.
Effects of Wrongful Dissociation on Partnership: Dissociation may, but does not necessarily, result in dissolution of the partnership and the winding up of its business. Wrongful dissociation creates a possibility of dissolution, if, within 90 days of dissociation, a majority of the remaining partners express a will to wind up the business. If dissolution results, the dissociated partner is not entitled to any payout until the end of the original term unless the partner can prove to the court that earlier payment would not cause undue hardship to the business.
Effects of Rightful Dissociation on Partner: Dissociation that complies with the provisions of the partnership agreement may also trigger dissolution, such as when it is an at-will partnership agreement with no definite term or when the partnership agreement so provides. If the dissociating partner’s withdrawal is not wrongful, the partner is not liable for damages and would retain the right to participate in the dissolution and winding up the partnership.
Effects of Rightful Dissociation on Partnership: Once a partnership has been dissolved, but before the winding up of its business is complete, the partnership may choose to resume carrying on its business as if dissociation had never occurred. To do so, all partners (including any rightfully dissociated partners) must agree to waive the right to terminate the partnership within 90 days of dissociation. A person winding up the partnership business may preserve the business or property as a going concern for a reasonable time to maximize its value.
Dissociated Partner's Liability during Winding-Up Process: The partnership is not terminated until the partnership business is wound up. After dissolution, the partnership is bound by a partner’s act that is appropriate for winding up the partnership. Each partner is liable to the other partners for his share of partnership liability incurred by such post-dissolution acts. Further, although a dissociated partner loses any right to participate in the business, his apparent authority to bind the partnership lingers after dissociation for up to two years.

Transfer of partnership interest

A partner has a transferable partnership interest, i.e., a partner may transfer the right to share in the profits and losses of the partnership and to receive distributions. The transfer of that partnership interest creates in the transferee a right to receive distributions to which the transferor would otherwise be entitled.

Partners Rights to Books and Records (Transferee rights)

A partnership must provide its partners and their agents with access to all its records, however a transferee is not entitled to participate in the management or conduct of the partnership business or access partnership records. A transfer of a partner’s partnership interest does not make the transferee a partner unless the other partner or partners consent to making the transferee a partner.

Partnership Property

Property is partnership property if it is acquired in the name of the partnership. It is property of the partnership and not of the partners individually. A partner may use or possess partnership property only on behalf of the partnership.

Limited Liability Partnership (LLP)

Conversion of Partnership to LLP : Filing of a statement of qualification transforms a partnership into an LLP, but this does not create a new partnership. A limited liability partnership (“LLP”) is a partnership where a partner’s personal liability for obligations of the partnership is eliminated. In other respects, an LLP is governed by the same rules as a partnership.
Liability for Pre-Partnership Obligations: A partner is jointly and severally liable for all partnership obligations. Even though a limited partner in an LLP is not personally liable for the obligation of an LLP, limited liability partnership status is generally only effective the date that the statement of qualification is filed with the state and not before.
Conversion of GP to LLP : A partnership may be converted into a limited liability partnership. Unless the partnership agreement specifies otherwise, the conversion must be approved by all of the partners of the general partnership. Once the conversion is approved, the partnership must file the articles of qualification with the state. A general partner who becomes a limited partner as a consequence of a conversion remains liable for any obligation incurred by the partnership before the conversion.
New Partner Liability for Preexisting Obligations: A limited liability partnership (LLP) is a partnership where the partners are not personally liable for obligations of the partnership. To enjoy the limited liability of an LLP, the partnership must file a statement with the state. In other respects, an LLP is governed by the same rules as a partnership. A limited partner in an LLP is not personally liable for the obligation of an LLP, regardless of the type of obligation. But, a limited partner is personally liable for his or her own personal misconduct.

Limited Partnership (LP)

Requirements for LP: A limited partnership is a partnership formed by two or more persons that has at least one general partner and at least one limited partner. To form a limited partnership, a certificate of limited partnership must be filed with the state and must include the name and address of each general partner. In addition, all of the general partners must sign the certificate. The limited partnership comes into existence upon the filing of the certificate of limited partnership. If a certificate is not filed, the limited partnership is not formed. (If No LP then discuss GP, see below)
When LP fails, a GP formed: A general partnership is an association of two or more persons to carry on a for-profit business as co-owners. In order to form a general partnership, at least two persons must intend to carry on a business for profit as co-owners but it is not necessary that they have the specific intent to form a general partnership. Individuals can inadvertently form a general partnership notwithstanding their expressed intention to do something else.

Real Property

Defeasible Fees

A fee simple determinable is limited by specific durational language (e.g. “so long as” “until”). It terminates automatically upon the happening of a stated condition and full ownership of the property is returned to the grantor (or his successor in interest). The grantor retains a possibility of reverter. Must use the specific durational language for creating a fee simple determinable and include language that suggested Owner intended to retain a possibility of reverter.
A fee simple subject to condition subsequent is limited in duration by specific conditional language (“provided that” “but if”). Upon occurrence of the stated condition, the present fee simple will terminate if the grantor affirmatively demonstrates an intent to terminate. The grantor must explicitly retain the right to terminate the fee simple subject to condition subsequent in the conveyance.

Concurrent Estates

The majority view is that a survivorship contingency applies at the termination of the interests that precede distribution of the remainder. Another approach interprets a survivorship contingency to require surviving only the testator and not the life tenant
A tenancy in common is any tenancy with two or more grantees with equal rights to possess or use the property, but no right of survivorship. On the other hand, a joint tenancy exists when two or more persons own property with the right of survivorship. The joint tenancy must be created with each joint tenant having the equal right to possess or use the property, with each interest equal to the others, at the same time, and in the same instrument. In most states, there is presumption that a conveyance to two or more persons creates a tenancy in common rather than a joint tenancy. To determine if a joint tenancy was created, modern law calls for a clear expression of intent and survivorship language.
Ones execution of mortgage severs the joint tenancy : The issue is whether the ___ execution of the mortgage to the ___ severed the joint tenancy with his wife. A joint tenancy exists when at least two people own property with the right of survivorship. In addition to the right of survivorship, each joint tenant must have the four unities: the right to possess or use the property and equal interests which were created at the same time and in the same instrument. The severance of joint tenancy may occur in several ways and converts it into a tenancy in common. A joint tenant may grant a mortgage in his joint tenancy interest. In title theory states, which is the minority of states, the granting of a mortgage constitutes a transfer of title. A transfer of title severs the joint tenancy and converts it into a tenancy in common.
whether the execution of the lease severed the joint tenancy : There is a split among jurisdictions with respect to joint tenancies when one joint tenant leases his interest. Some jurisdictions hold that the lease destroys the unity of interest and thus severs the joint tenancy, while other jurisdictions believe that the lease merely temporarily suspends the joint tenancy, which resumes upon expiration of the lease.
TIC Default Tenancy when JT Fails : A tenancy in common exists when two or more co-owners have an equal right to possess property, but do not have a right of survivorship. In that case, each co-tenant holds an undivided interest with unrestricted rights to possess the whole property, regardless of the size of the co-tenant’s interest. Each tenant can unilaterally transfer, devise, mortgage, or lease his interest to a third party, without affecting the interest of the other tenants.
A joint tenant may grant a mortgage interest in the joint tenancy property to a creditor. Most states apply the lien theory, which states that the mortgage is only a lien on the property and does not sever the joint tenancy absent a default and foreclosure sale. In this case, Jessie’s mortgage on her interest in the farm did not sever the joint tenancy. A minority of states apply the title theory, which states that the mortgage severs title and the tenancy would be converted into a tenancy in common.
Joint tenants can convey all or part of their individual interests during their lifetimes to a third party, thereby severing the joint tenancy. A joint tenancy is severed when one of the joint tenants contracts to sell her interest in the property.

Easements

Easement terminated by Merger: An easement is terminated if the owner of the dominant or servient estate acquires fee title to the other estate. The easement is said to “merge” into the title. The merger of property interests results in the extinguishment of the property right.
Easement by Implication: The issue is whether the prior use over land implied an easement over land when Blank sold land to Blank If the owner of two parcels of land previously used one parcel to benefit the other, then the court may find that, upon the transfer of one parcel, the parties intended the use to continue if that use was continuous, apparent or known, and reasonably necessary to the dominant land’s use and enjoyment (as distinguished from an easement by necessity, which requires strict necessity).
Easement Termination by Abandonment The issue is whether ___ has abandoned its interest. Easements can terminate by written release, prescription, estoppel, condemnation, and abandonment. Neither a statement of intent to abandon nor non-use can extinguish an easement absent affirmative conduct. An easement can only be terminated based on a theory of abandonment if the owner of the easement acts in an affirmative way that clearly shows intent to relinquish the easement right.
Easement in Gross: An easement is in gross if it was granted to benefit a particular person (as opposed to the land). An express easement by grant arises when it is affirmatively created by the parties in a writing that is in compliance with the Statute of Frauds. If a written easement is granted but not recorded against the servient estate, then the easement is not enforceable against a bona fide purchaser. Otherwise, the burden of an easement in gross is transferred automatically with the transfer of the servient estate.

Mortgages

The issue is whether future-advances mortgage has priority over lien in distributing the proceeds from the foreclosure sale of property: When multiple interests must be paid out of the proceeds of a foreclosure sale, generally, the earliest mortgage placed on the property has priority over the other interests. Further, obligatory payments under a senior future-advances mortgage paid out after a junior lender remits its loan amount and records its lien have priority over amounts loaned by the junior lender.
The issue is whether the disbursement of the funds is obligatory or optional. : A mortgage is an interest in real property that serves as security for an obligation. A future-advances mortgage is a mortgage given by a borrower in exchange for the right to receive money from the lender in the future. This type of mortgage is also known as a “line of credit.” It is often used for home-equity, construction, business, and commercial loans, and it can provide for obligatory advances or optional advances. Future advances made pursuant to a loan that makes advances conditioned on satisfactory progress of the project for which the loan was made are optional, not obligatory. If the disbursement of the funds is based on the bank’s good-faith discretion, the bank is not obligated to disburse the funds.
The issue is whether ___ future-advances mortgage has priority over ___ lien in distributing the proceeds from the foreclosure sale of land: When multiple interests must be paid out of the proceeds of a foreclosure sale, generally, the earliest mortgage placed on the property has priority over the other interests. Further, obligatory payments under a senior future-advances mortgage paid out after a junior lender remits its loan amount and records its lien have priority over amounts loaned by the junior lender.
Priority between the mortgage and lien : The issue is whether the bank had notice of the mechanic’s lien before the bank disbursed the loan amounts. If there is more than one interest in the property, the basic “first in time, first in right” rule is applied to determine the priority of interests. However, this rule is subject to an exception for future-advances mortgages. If the advances under a future-advances mortgage are optional, then a subsequent mortgage has priority over amounts that are actually loaned after the future-advances mortgagee has notice of the subsequent mortgage. The jurisdictions are split as to whether actual notice is required or whether constructive notice is sufficient. In a majority of states, the mortgagee must have actual notice of a subsequent interest in order for later loan disbursements to lose priority.

Statute of Frauds

The Statute of Frauds requires a lease of more than one year to be in writing. A lease subject to the Statute of Frauds is voidable until the tenant takes possession, and the landlord accepts rent from the tenant.

Leasehold Estates

If the tenant takes possession and the landlord accepts rent, then a periodic tenancy or tenancy at will is created because there has been partial performance. A tenancy at will may be terminated by either party without notice. A periodic tenancy requires notice of termination before the beginning of the intended last period of the periodic tenancy. If a Tenant took possession and Landlord accepted the rent, either a periodic tenancy or a tenancy at will is created. It is a periodic tenancy if payment is made over a significant amount of time, and the arrangement creates expectations that justify notice of termination.
Periodic Tenancy: In a periodic tenancy, notice of termination must be given before the beginning of the intended last period of the periodic tenancy. Thus, a periodic month-to-month tenancy can be terminated by either party with a one-month notice of termination. Notice that is given late is generally treated as effective to terminate the tenancy as of the end of the following period.
Tenancy for Years: A tenancy for years is an estate measured by a fixed and ascertainable amount of time. Termination of a tenancy for years may occur before the expiration of the term, such as when the tenant surrenders the leasehold. A tenant surrenders a lease by transferring the lease back to the landlord with the landlord accepting the return. Many courts require the surrender to be in writing if the original lease was so required. If the landlord accepts surrender, the tenant is not obligated for future rent.

Landlord/Tenant

Constructive Eviction: When a landlord substantially interferes with the tenant’s use and enjoyment of the property by breaching a duty to the tenant, the tenant’s obligation to pay rent may be excused under the theory of constructive eviction. In order to end a lease before the end of its term by constructive eviction, the landlord must have breached a duty, which caused the loss of the substantial use and enjoyment of the premises, the tenant must give the landlord notice of the problem and reasonable opportunity to cure, and the tenant must vacate the property within a reasonable period of time. Not every interference with the use and enjoyment of the premises amounts to a constructive eviction. Temporary or de minimis acts which do not amount to a permanent expulsion generally do not amount to constructive eviction.
Landlord Duty to Repair Commercial Leases: Under the common law, there was no implied duty on the part of the landlord to repair leased premises. However, the majority of jurisdictions today enforce an implied duty upon the landlord to repair under a residential lease, even when the lease attempts to place the burden on the tenant, except for damages caused by the tenant. In contrast, courts are reluctant to imply a landlord’s duty to repair in commercial leases because the implied warranty of habitability does not apply in commercial leases. Here, it is not clear what language was in the lease regarding repairs, but absent any specific duty in the lease to fix the air conditioner, the landlord was likely not required to make any such repairs. Moreover, the covenant of quiet enjoyment is breached only when the landlord, someone claiming through the landlord, or someone with superior title disrupts the possession of the tenant. Accordingly, there is no duty to repair implicit in the covenant.
Termination of Lease: Termination of a lease occurs automatically upon the expiration of the term. Termination may also occur before the expiration of the term when the tenant surrenders the leasehold, and the landlord accepts the return of the leasehold. When a tenant abandons the leasehold without justification, the landlord may treat the abandonment as an offer of surrender and could accept that surrender by retaking the premises.
Duty to Mitigate Damages : When a tenant abandons the leasehold, the landlord may treat the abandonment as an offer of surrender and accept such surrender, or the landlord may attempt to re-rent the premises on the tenant’s behalf and hold the tenant liable for any deficiency. The majority of jurisdictions now require a landlord to mitigate damages by attempting to re-rent the premises in the event that the tenant abandons the property and breaches of the lease.
LL duty to mitigate by re-renting: The issue is whether the landlord satisfied the duty to mitigate damages following the tenant's abandonment of the premises. Many states impose on the landlord a duty to make reasonable efforts to mitigate damages when a tenant abandons a lease. What constitutes a reasonable effort depends on the circumstances; however an owner of multiple vacant apartments is typically required only to treat the premises as one of his vacant stock.
LL can’t sue for rent that’s not yet due: Furthermore, the doctrine of anticipatory breach does not apply to leases. While the landlord may sue the tenant for rent as it becomes due, a landlord may not sue for future rent under the lease.
Rent From Co-Tenants: A co-tenant must account to other co-tenants for rent received from third parties, but can deduct operating expenses, including necessary repairs, when calculating net proceeds. Third-party rents are divided based on the ownership interest of each tenant.
A warranty of fitness or suitability: is implied in a contract for the sale of a newly constructed residence. Under this type of warranty, the seller warrants that he used adequate materials and good workmanship in working on the residence. The implied warranty generally covers latent construction defects, such as a defective electrical, plumbing, or mechanical system, or a leaky roof or drainage problem that does not manifest itself until after the sale. Damages are generally based on the cost of repairs to bring the residence into compliance with the warranty.

Assignment & Sublease

Absent any language to the contrary, a lease can be freely assigned or sublet. The assignee of a month-to-month tenant takes a month-to-month tenancy. When a tenant assigns his interest in a lease, privity of estate arises between the assignee and the landlord. Assignee tenants are liable to the landlord for rent. However, privity of contract continues to exist between the landlord and the tenant. If the assignee fails to pay the rent, then the tenant is liable to the landlord.
Assignment at LL discretion: When a lease prohibits the tenant from assigning the lease, the tenant may nevertheless assign; however, the landlord generally can then terminate the lease for breach of one of its covenants and recover any damages. When a lease prevents assignment without the permission of the landlord, and the lease is silent as to a standard for exercising that permission, the modern trend imposes a requirement that the landlord may withhold permission only on a reasonable ground in relation to the property being leased and not on a whim or personal prejudice. The traditional rule is that the landlord may withhold permission at his discretion.

Deeds

General Warranty Deed: The grantor of a general warranty deed guarantees that he holds six covenants of title, three of which are present covenants. The three present covenants are the covenant of seisin, the covenant of the right to convey, and the covenant against encumbrances. The covenant against encumbrances, which applies to this situation, guarantees that the deed contains no undisclosed encumbrances. A breach of the covenant against encumbrances occurs when a property is encumbered by a mortgage, lease, easement, or covenant not specified in the deed.
Recovery of Damages for breach of covenant under deed: A breach of the covenant against encumbrances occurs when a property is encumbered by a mortgage, lease, easement, or covenant not specified in the deed. Even if the deed is silent, a breach will not be recognized if the grantee had knowledge of the encumbrance, if it was visible, or if it benefitted the land. A buyer can recover for breach of the covenant against encumbrances the lesser of the difference in value between title with and without the defect, or the cost of removing the encumbrance.

Notice

A bona fide purchaser is a person who paid value for an interest and did not have notice of the prior-in-time interest. Notice can be actual, by inquiry, or constructive. Grantees are held to have constructive notice of all prior conveyances that were properly recorded.
Constructive Notice: At issue is whether Purchaser is a protected under the state’s recording statute as a bona fide purchaser without notice of either prior interest. A notice statute tends to protect subsequent purchasers against interest holders who could have but failed to record documents describing their interests.
Wild Deed: The state here records under a grantor-grantee indexing system. Under that method, each yearly index would be alphabetized by the last names of grantors and grantees. A potential purchaser searching the title would first search for the grantor’s name as a grantee in the grantee index, then the name of the grantor’s grantor as a grantee and so on. However, a recorded deed that is not within the chain of title is a “wild deed.”
Inquiry Notice: A grantee has inquiry notice if a reasonable investigation would have disclosed the existence of prior claims. A grantee with inquiry notice cannot prevail against those prior claims. A purchaser is held to know whatever a reasonable inspection of the property would have disclosed. Taking a quitclaim deed does not in itself create inquiry notice of prior claims in most states.

Equitable conversion

Under the doctrine of equitable conversion, when one of the contracting parties dies prior to the performance date of the contract, the seller’s interest may be treated as personal property and the buyer’s interest may be treated as a real property interest for purposes of distributing in the property pursuant to either’ will. When the seller has devised his real property interests, the proceeds from the sale of the property under contract are treated as personal property that passes to the devisee of the seller’s personal property.

Zoning Ordinance

Nonconforming use : The issue is whether the expansion project is a substantial change to the nature and character of the nonconforming use. When a zoning ordinance is enacted or modified, there are often properties within a zone that do not conform to the requirements for that zone (i.e., a nonconforming use). A zoning ordinance must generally make provision for property with an existing nonconforming use. Unless the ordinance provides otherwise, the time for testing whether the nonconforming use is protected by a grandfather provision is the date that the zoning ordinance takes effect.
Grandfathered clause : Generally, a property owner whose nonconforming use has been grandfathered is not entitled to subsequently increase the nonconforming use, such as by enlarging a building that houses a nonconforming use or acquiring and developing adjacent property in accord with the nonconforming use. However, the owner may be permitted to increase the frequency of the nonconforming use to upgrade the means to accomplish the nonconforming use, so long as the nature and character of the use does not constitute a substantial change.

Secured Transactions

Scope of Article 9

Article 9 governs security interests and applies to any transaction that creates a security interest in personal property, including goods, inventory, equipment, accounts, documents and instruments. Article 9 applies broadly to transactions that create a security interest in personal property or fixtures by contract. Article 9 also applies to other transactions such as agricultural liens, consignments and sales of accounts or promissory notes. Secured transactions must be consensual. Secured transactions involve personal property or fixtures (not real estate). “Regardless of form” means that courts will look at the substance of the transaction, not the labels the parties use.

Article 9 applies to certain sale of rights to payment this only includes certain rights to payment (1) Chattel Paper (2) Promissory notes (3) Accounts (4) Payment Intangibles. The right to be repaid money by a third party that the debtor then uses as collateral for a loan. An account includes the rights to payment for property sold, leased, licensed, or for services rendered (such as a company’s accounts receivable)

Here, the ___ sold its outstanding rights to be paid by ___ to which it had sold ____. Thus the collateral is an account and the transaction is subject to Article 9.

Since UCC Art. 9 treats a sale of accounts as creating a security interest in the purchaser, the seller (debtor) is deemed to retain rights in the accounts for attachment purposes until the purchaser perfects its security interest.
Lease of Goods: The issue is whether the supplier's security interest in the ____ properly attached. A true lease of goods does not create a security interest. But, a transaction that appears to be in the form of a lease may actually be a secured transaction, creating a security interest. The transaction may be categorized as a secured transaction if the lessee must pay consideration to the lessor for the right to possess and use the goods for the term of the lease, the payment obligation cannot be terminated by the lessee, and one of four conditions is met, lessee (1) has an option to become the owner of the goods, (2) no additional consideration is paid or (3) nominal additional consideration is paid, upon completion of the lease agreement.

Types of Collateral

Tangible

consumer goods, goods used or bought for use primarily for personal use, such as automobiles or jewelry;

equipment, meaning goods used by a business that aren’t normally sold by the business, such as chairs, desks, computers, restaurant kitchen equipment and manufacturing machines; goods or machinery used in the business.
“Inventory” which means goods held for sale or lease, by a business, but also raw materials, works in process, or materials used or consumed in a business.

such as the hammers and drills on the shelves of a hardware store;
farm products, which are goods unique to farming operations and include crops, livestock, feed, agriculture products and fertilizer;
fixtures, which means property that is affixed to buildings so that they are sometimes considered real property, such as the built-in brick oven in a pizza shop

Intangible

accounts, which are typically unsecured obligations owed to the person for goods supplied or services rendered; include the right to payment for goods sold, property licensed, or services rendered.
chattel paper, which references obligations that facilitate smaller secured transactions. (1) monetary obligation (someone made a promise to repay the loan and security interest is in something else), and (2) A security interest or a lease
deposit accounts, such as bank savings or checking accounts; and
investment property, including stocks, bonds and similar types of property traded on a securities exchange.

Instrument – if you see a check or promissory note on exam call it an instrument Examples: promissory notes (I Owe you document, someone made a loan to someone), checks and drafts governed by Article 3 of the UCC

Attachment (Does ___ have an enforceable security against debtor)

For a secured party to have a valid interest in the collateral it must first attach. Upon attachment, the security interest becomes enforceable against the debtor’s collateral. Attachment requires (1) Value given by the secured party (2) The debtor must have rights in the collateral (some property interest in the collateral). (3) There is an authenticated security agreement that describes the collateral, OR (2) The secured party has possession or (3) control of the collateral pursuant to an oral or unauthenticated security agreement.

Security Agreement Requirements: Usually an authenticated record (e.g., piece of paper signed by the debtor) A security agreement requires (1) A record (Need not be written on paper but must be stored in a record— something that others can retrieve) (2) The record must be signed by the debtor. (Need a signature or other symbol that shows the intent of the debtor to be bound.) (3) The security agreement must describe the collateral. (4) The description must reasonably identify the collateral. (No magic words must be used unless it is consumer goods and commercial tort claims, then the collateral must be identified with more particularity. A super generic description, such as “all of the debtor’s assets” or “all of the debtor’s personal property” does not reasonably identify the collateral for attachment.
After acquired Interest : Under Article 9, for a security interest to be enforceable against a debtor, the interest must attach to the collateral. Attachment requires: (i) value to be given by the secured party; (ii) the debtor has rights in the collateral; and (iii) the debtor authenticated a security agreement that describes the collateral (or the secured party has possession or control of the collateral pursuant to a security agreement). A security interest attaches only to rights that the debtor has. A debtor may give a security interest in future rights. This interest is created by including an “after-acquired property clause” in the security agreement. security interest for after-acquired property attaches as soon as the debtor obtains an interest in the property.

Without an after-acquired property clause, the security interest only attaches to the collateral that existed at the time that the security agreement was executed. Unless the security agreement describes inventory or accounts, then there is a rebuttable presumption that the description includes after-acquired inventory or accounts. In this circumstance the court might read an after-acquired clause.

Future Advances : A future advances clause anticipates that the secured party may extend additional credit to the debtor after the first loan. If that occurs, the security interest relates back to the original transaction. This provides the benefits priority among creditors.

Accessions : Goods that are physically united with other goods so that the identity of the original goods is not lost. If collateral becomes an accession, a security interest in that collateral is not lost; the security interest continues in the accession.
Commingled goods : Goods that are physically united with other goods to the point that their identity is lost in a product or mass. A security interest does not continue in the original goods that have been commingled, but it will attach to the larger product or mass that results. The security interests will not continue in the product, but creditors will have a proportional interest in the product that resulted

If the secured party has possession or control of the collateral pursuant to a security agreement, then a security agreement in the form of a record is not required; an oral agreement suffices.

Perfection (Rights superior to other debtors)

Generally, for the secured party to have superior rights over third parties that have security interests in the same collateral the party must perfect its security interest. The secured party must have attached and perfected its security interest and complied with one of the methods for perfection. A secured party can perfect a security interest by (i) filing a financing statement; (ii) possessing the collateral; (iii) controlling the collateral; or (iv) perfecting automatically.

Filing. The filing of a “financing statement” or the security agreement with the state is the primary method of perfection. The filing MUST be filed by an authorized party (authorization is presumed by the debtor’s authentication of the security agreement). Minor errors will not invalidate the financing statement unless the error makes it seriously misleading. The filing must contain:

The debtor’s name;

if the debtor is a registered organization, the financing statement must provide the official registered name of the organization.

The secured party’s name;
An adequate description of the collateral; AND
The filing fee.

Taking Possession : A secured party may perfect a security interest in negotiable documents, goods, instruments, or money by taking mere possession of such items.
Automatic Perfection PMSI : The following security interests are perfected automatically when they attach:

A PMSI in consumer goods; AND
An assignment of accounts which does NOT by itself or in conjunction with other assignments to the same assignee transfer a significant part of the assignor’s outstanding accounts.

Generally perfection is done by filing a financing statement in the central filing office of the appropriate state. Perfection by filing a financing statement applies to perfect security interests in all collateral except it does not apply to deposit accounts, money, letters of credit, and collateral subject to other perfection methods (like state certificate of title laws). The financing statement must contain the debtor’s name, the name of the secured party, and the collateral covered by the financing statement. Typically, a security interest attaches and is then perfected. But, if the necessary steps for perfection are taken prior to attachment, then the security interest is perfected upon attachment.
Errors in the Financing Statement : General rule is that minor errors in a financing statement do not affect perfection unless they make the financing statement seriously misleading. Errors in the debtor's name are almost always seriously misleading unless the search for the correct name of the debtor would uncover the financing statement with the error, the error is not seriously misleading. If the mistake is seriously misleading then, the security interest is not perfected.

Under the same office rule, a perfected security interest in proceeds may continue indefinitely when: (i) the filed financing statement covers the original collateral, (ii) the proceeds are collateral in which a security interest may be perfected by filing in the same office as the financing statement, and (iii) the proceeds are not acquired with cash proceeds.
Financing statements last for 5 years unless filing a continuation statement within 6 months before the financing statement lapses.
Perfection by Possession : Security interests in tangible collateral may perfected if the secured party takes possession of the collateral. Money, Goods, Instruments, Negotiable documents, Tangible Chattel Paper Possession is the only way to perfect a security interest in $$$$ As soon as the secured party has possession, the interest is perfected. The interest remains perfected as long as the secured party retains possession.
Control over Deposit Accounts : Control can be obtained over a deposit account in one of three ways: (1) The secured party is the bank that has the deposit account (lender and the bank are the same party) the bank automatically has control (2) The secured party, the bank and the debtor, all three get together and agree in an authenticated record that the lender (secured party) has control over the deposit account (deposit account control agreement) (3) The secured party can become the bank’s customer with respect to the deposit account.
PMSI (Purchase Money Security Interest) in consumer goods : PMSI gives lenders a special security interest in goods that have been purchased with funds borrowed from them or purchased on credit from them. PMSI in consumer goods is automatically perfected upon attachment. A secured party does not need to file a financing statement or have possession to have a perfected PMSI in consumer goods. A PMSI is a security interest in goods has priority over other security interests in the same goods. A PMSI in other types of goods (e.g., inventory, equipment) or in automobiles is not automatically perfected.
Cash proceeds :A security interest in collateral is automatically attached to identifiable proceeds. Proceeds are whatever is acquired when collateral is sold, exchanged or other disposition of collateral. If the proceeds are identifiable cash proceeds (including checks) and the SI in the original collateral is perfected, the perfected SI in the proceeds continues indefinitely.

Here ___ had a perfected security interest in ___. The buyer got $___ from ___ for ___. Thus the check/cash is identifiable cash proceeds, and the __ has a perfected security interest in the check.

Priority

BICOB

Generally, a buyer of a collateral subject to a perfected security interest takes the collateral subject to that security interest. But, a buyer in the ordinary course of business takes collateral free of the security interest created by the buyer’s seller, even if the security interest is perfected and the buyer knower of its existence. A buyer is BICOB if he: (i) buys goods; (ii) in the ordinary course of business; (iii) from a merchant who is in the business of selling goods of that kind; (iv) in good faith; and (v) without knowledge that the sale violates the rights of another in the same goods. The buyer must give new value either by paying cash or buying on credit.

Here the buyer bought the ___ in the ordinary course of the ___ business. The buyer purchased the ____ on credit/cash in good faith and without knowledge of the retailers interest. Thus the buyer is a BICOB and take the ___ free of the ___ security interest.
If a buyer purchases goods under a BICOB exception free of the security interest in the goods created by the buyers seller, he/she can then sell the goods to a second buyer who will also get the goods free of that security interest. The second buyer doesn’t have to be a BICOB. Thus, the second buyer takes the collateral free of the finance company’s security interest.

Consumer to consumer (buddy selling to buddy)

A buyer of collateral subject to a perfected security interest generally takes the collateral subject to that interest. But a buyer of consumer goods, takes free of the perfected security interest unless the secured party filed a financing statement that covered the goods before the buyer purchased it. A consumer buyer is a person who (i) buys consumer goods for value; (ii) for his own personal, family or household use; (iii) from a consumer seller; and (iv) without knowledge of the security interest. Often referred to as the “garage sale” rule.

Here, buyer gave value in the form of ____. The buyer purchased the ___ for his/her own household use. The buyer was a consumer seller because he/she was not in the business of selling _____. The purchaser had no knowledge of the ___ (person before seller) security interest. Thus, the ___ is a consumer buyer of

Other Priority Rules

2 Perfected SI first to file or perfect When there are two or more perfected secured parties with rights in the same collateral, the first to file a financing statement or perfect its security interest has priority. If both security interests are perfected, then priority dates from the time of filing or perfection, whichever occurs first.

PMSI in Inventory :While, generally, a PMSI has priority over other security interests in the same goods, a PMSI in inventory has priority only if: (i) the PMSI is perfected by the time the debtor receives possession of the collateral; and (ii) the purchase-money secured party sends an authenticated notification of the PMSI to the holder of any conflicting security interest before the debtor receives possession of the collateral.
PSI v Judicial Lien In a contest between a perfected security interest and a judicial lien, a judicial lien creditor takes the collateral subject to an existing perfected security interest but generally has priority over an unperfected security interest.
PMSI in goods exists when the secured party sells goods to the debtor, the debtor then has an obligation to pay the secured party for all or part of the purchase price. A PMSI in consumer goods is automatically perfected upon attachment. Consumer goods are goods that are acquired primarily for personal, family, or household purposes.

Here seller has a PMSI in the ____ because the buyer purchased ___ from the seller on credit and granted a security interest in ___ to the seller. The ___ is a consumer good because the buyer purchased it for use in her home. Thus, the seller’s PMSI is automatically perfected without filing a financing statement.

PMSI in GOODS : The issue is identifying which security interest in ______or has priority: the ___ or the ___. Perfection of a security interest is necessary for the secured party to have a superior right in the collateral. A security interest is perfected when the collateral attaches and the secured party complies with one of the methods of perfection. Those methods include filing a financing statement, having possession or control of the collateral, or it can be automatically perfected. When there are two or more perfected secured parties with rights in the same collateral, the first to file or perfect its security interest has priority. If both security interests are perfected, then priority dates from the time of filing or perfection, whichever occurs first.

A PMSI in goods other than inventory or livestock prevails over all other security interests in the collateral, even if they were previously perfected, if the secured party perfects before or within 20 days after the debtor receives possession of the collateral

Judicial Lien Creditor

A judicial lien creditor is a creditor who acquires a lien on the collateral by a judicial process, rather than by operation of law. A judicial lien creditor takes the property subject to a perfected security interest but generally has priority over an unperfected security interest. A security interest is perfected upon attachment of that interest and compliance with one of the methods of perfection.

Default

Upon default, a secured party may notify an account debtor (the person obligated on an account) to make payment to the secured party. In addition, the secured party may exercise any rights of the debtor with respect to the obligation of the account debtor. In a commercially reasonable manner, the secured party may collect from the account debtor, and, if the account debtor does not pay, the secured party may enforce the obligation of the account debtor.
Upon default, one of the alternatives generally available to a secured party once in possession of collateral is to dispose of the collateral at a sale, which may be public or private, in order to satisfy the obligor’s outstanding obligation. In addition to conducting the sale in a commercially reasonable manner, the secured party is generally required to send an authenticated notification of disposition to, among others, the debtor. This notice must be given sufficiently far enough in advance of the disposition (e.g., at least 10 days) to allow the notified party to act on the notification. A secured party is not required to send a notice of disposition when the collateral is perishable, threatens to decline speedily in value, or is of a type customarily sold on a recognized market. A person entitled to notification may waive the right to notification. If a secured party fails to comply with these requirements, then the debtor or other secured party may seek damages for any loss caused by the secured party’s failure to notify. There is also a rebuttable presumption that the secured party is not entitled to collect a deficiency. The secured party can rebut this presumption in whole or in part by showing that the deficiency would have existed even had the secured party complied with Article 9.

Torts

Intentional Torts

Battery: a plaintiff must show that the defendant caused a harmful or offensive contact with the plaintiff’s person with the intent to cause such contact or the apprehension of such contact. A defendant’s contact is intentional if he acts with the desire to bring about the contact or engages in an action knowing that contact is substantially certain to occur. In most jurisdictions, the defendant need only intend to cause contact, not that the contact be harmful or offensive (often called the single-intent rule).
False imprisonment: requires that a person acts with intent to confine or restrain another person to a bounded area and those actions directly or indirectly result in such confinement. The plaintiff must be aware of the confinement or must suffer actual harm. The confinement may be physical, may be accomplished through use of threats, by failure to provide a means of escape, or by invalid use of legal authority. A plaintiff is not imprisoned if he submitted willingly to confinement. An area is not bounded if there is reasonable means of safe escape.

Negligence

Negligence: To prove negligence, the plaintiff must establish that the defendant owed a duty, that it breached that duty, that its actions were both the actual and proximate cause of injury, and that damages resulted.
Negligence: In a negligence action, a plaintiff must show that the defendant owed a duty to the plaintiff, that the defendant breached that duty, that the defendant caused the plaintiff’s injuries, and that damages exist. Generally, the standard of care imposed on a defendant is that of a reasonably prudent person under similar circumstances. A person is required to exercise the care that a reasonable person under the same circumstances would recognize as necessary to avoid or prevent an unreasonable risk of harm to another person. In determining whether a specific precaution was warranted, a jury must weigh the probability and gravity of the injury against the burden of taking such precautions.

Liability

Vicarious liability: is a form of strict liability in which one person is liable for the negligent actions of another. An employer is liable for the tortious conduct of an employee that is within the scope of employment.
Eggshell Plaintiff Rule: Under the “eggshell skull” rule, a defendant is liable for the full extent of the plaintiff’s injuries due to the plaintiff’s preexisting physical or mental condition or vulnerability, even if the extent is unusual or unforeseeable.
Liability for Non-delegable Duty: Those who engage an independent contractor (one hired to accomplish a task or result but not subject to a right of control by the employer) are generally not vicariously liable for the torts of the independent contractor. The person who hires an independent contractor remains vicariously liable for certain conduct, including inherently dangerous activities and non-delegable duties (i.e., activities that are inherently risky or that affect the public at large).
Rescuer to Aid another: Liability typically extends only to foreseeable plaintiffs and hazards. A person who comes to the aid of another is a foreseeable plaintiff. If the defendant negligently puts either the rescued party or the rescuer in danger, then he is liable for the rescuer’s injuries.
An employer is liable for an employee’s torts if the employer has the right to control the employee’s acts and the tortious conduct is committed within the scope of employment.

Standard of Care

In determining whether conduct lacks reasonable care, courts consider (i) the foreseeable likelihood that the person’s conduct will result in harm, (ii) the foreseeable severity of any harm that may result, and (iii) the burden of precautions to eliminate or reduce the risk of harm.
Minor Children Standard of care: The standard of care imposed upon a child is that of a reasonable child of similar age, intelligence, education, and experience. The standard applicable to minors is more subjective in nature because children are unable to appreciate the same risks as adults.
Children Standard of care: Generally the standard of care imposed in most cases is that of a reasonably prudent person under the circumstances, but the standard of care regarding children is that of a reasonable child of similar age, intelligence, and experience. However, a child engaged in a high-risk activity that is normally undertaken by adults is held to the same standard as an adult.
At issue is whether the physician is liable for breaching his duty to act with reasonable care. A prima facie case of negligence requires proof of a duty, breach of that duty, causation, and damages. In general, a duty of care is owed to all foreseeable persons who may foreseeably be injured by the defendant’s failure to act as a reasonable person of ordinary prudence under the circumstances. A physician is held to a national standard and is expected to exhibit the same skill, knowledge, and care as an ordinary practitioner.
Custom is evidence of standard of care but not conclusive: a person is required to exercise the care that a reasonable person under the same circumstances would recognize as necessary to avoid or prevent an unreasonable risk of harm to another person. In determining whether a specific precaution was warranted, a jury must weigh the probability and gravity of the injury against the burden of taking such precautions. Evidence of custom in an industry may be offered to establish the standard of care, but such evidence is not conclusive.
Landowner’s duty of care: In most jurisdictions, the standard of care owed to land entrants depends upon whether he is a licensee or a trespasser. A licensee enters the land of another with the permission of the land possessor (LP) and includes those whose presence is tolerated by the LP. The LP has a duty to either correct or warn licensees of concealed dangers that are either known to the LP or that should be obvious. A trespasser is someone who enters or remains upon the land of another without consent or privilege to do so. Traditionally, an LP is obligated only to refrain from willful, wanton, reckless, or intentional misconduct toward trespassers.
Attractive Nuisance : Under the “attractive nuisance” doctrine, a LP may be liable for injuries to children trespassing on the land if (i) an artificial condition exists where the LP knows or has reason to know children are likely to trespass; (ii) the LP knows or has reason to know the condition poses an unreasonable risk of death or serious bodily injury; (iii) the children, because of their youth, do not discover or cannot appreciate the danger presented by the condition; (iv) the condition’s utility to the LP and the burden of eliminating the danger are slight compared to the risk to children; and (v) the LP fails to exercise reasonable care to protect children.

Duties Owed

Duty to Aid : A person who voluntarily aids another has a duty to act with reasonable ordinary care. However, there is generally no duty to come to the aid of another.
A tenant owes a licensee the duty to warn of concealed dangers and is required to exercise reasonable care in conducting activities on her land.
When a statute or administrative regulation imposes a specific duty for the protection of others, and a defendant breaches that duty, the defendant is liable to anyone in the class of people intended to be protected by the statute for harm of the type the statute was intended to protect against. Generally, such a violation of a regulation or ordinance establishes either negligence as a matter of law or a rebuttable presumption of negligence.
In general, a duty of care is owed to all foreseeable persons who may foreseeably be injured by the defendant’s failure to act as a reasonable person of ordinary prudence under the circumstances.

Causation

A factual cause exists then proximate cause also exists, unless there are intervening acts.
An intervening cause is a factual cause of the plaintiff’s harm that contributes to his harm after the defendant’s tortious act has been completed. Original tortfeasors remain liable for an intervening cause unless the result was unforeseeable or the harm was unforeseeable. A superseding cause is any intervening cause that breaks the chain of proximate causation between the defendant’s tortious act and the plaintiff’s harm, thereby preventing the original defendant from being liable to the plaintiff. However, when both the intervening cause and the harm are unforeseeable, the intervening cause becomes a superseding cause, and the defendant’s liability is cut off by that superseding cause.

Proximate Cause

The majority rule for proximate cause requires that the plaintiff suffer a foreseeable harm that is not too remote and is within the risk created by the defendant’s conduct. An intervening cause is a factual cause of the plaintiff’s harm that contributes to her harm after the defendant’s tortious act is completed. A superseding cause is any intervening cause that breaks the chain of proximate causation between the defendant’s tortious act and the plaintiff’s harm, thereby preventing the original defendant from being liable to the plaintiff. Most courts hold that an unforeseeable intervening cause is a superseding cause that therefore breaks the chain of causation between the defendant and the plaintiff. Examples of unforeseeable intervening causes include extraordinary acts of nature, criminal acts of third parties, and intentional torts of third parties.

Damages

In order to be liable for the D’s damages resulting from __, the court must find that the ___ was proximately caused by the woman’s negligence. An actor is liable for any reasonably foreseeable harm suffered as a consequence of her negligence. Subsequent medical malpractice or other negligent acts are generally considered foreseeable intervening causes and will not break the chain of the defendant’s liability.
Res Ipsa : Under the doctrine of res ipsa loquitur, the trier of fact may infer the existence of the defendant’s negligent conduct in the absence of direct evidence of negligence. The plaintiff must prove that: (1) the accident is of a kind which ordinarily does not occur in the absence of negligence; (2) the harm was caused by an agent or instrumentality within the exclusive control of the defendant; and (3) the harm was not due to any action on the part of the plaintiff.
Joint and Several Liability : Under the doctrine of joint and several liability, each of two or more defendants who is found liable for a single and indivisible harm is subject to liability to the plaintiff for the entire harm. The plaintiff can choose to collect the entire judgment from one defendant or portions of the judgment from various defendants, as long as the entire recovery does not exceed the full amount of the judgment. Under joint and several liability, the P can collect the full amount of the judgment from either defendant or portion the damages between them.

Comparative Negligence

Contributory negligence : occurs when a plaintiff fails to exercise reasonable care for his own safety and so contributes to his own injury. In a few states, contributory negligence is a complete bar to recovery. Most states, however, have opted for comparative negligence. In jurisdictions that have adopted the doctrine of pure comparative negligence, a plaintiff’s contributory negligence is not a complete bar to recovery. The plaintiff’s full damages are calculated by the trier of fact and then reduced by the proportion that her fault bears to the total harm. In modified or “partial” comparative negligence jurisdictions, recovery is barred if the plaintiff is more at fault than the defendant. If the plaintiff is less at fault than the defendant, the recovery is reduced by the plaintiff’s percentage of fault.

Strict Liability

Abnormally dangerous activity subject to strict liability : Defendants engaged in abnormally dangerous activities may be held strictly liable for damages caused by that activity, even in the absence of negligence. Activities are considered abnormally dangerous if they create a foreseeable and highly significant risk of physical harm even in the exercise of reasonable care, and the activity is not commonly engaged in. The most commonly known abnormally dangerous activity is blasting, or the use of explosives. Fireworks displays are much like blasting in that they both involve the use of explosives, and any time a person ignites a shell or rocket with the intention that it explodes in the presence of other people, that person creates a high risk of serious personal injury. Further, no matter how much care is exercised when igniting the fireworks, there is no way to completely eliminate this risk.
Defective Product: Under strict products liability, the manufacturer, retailer, or other distributor of a defective product may be liable for any harm caused by the product. The plaintiff must prove (i) the product was defective (in manufacture, design, or failure to warn), (ii) the defect existed at the time the product left the defendant’s control, and (iii) the defect caused the plaintiff’s injuries when the product was used in an intended or reasonably foreseeable way. A manufacturing defect is a deviation from what the manufacturer intended the product to be that causes harm to the plaintiff. The test is whether the product conforms to the defendant’s own specifications.
Implied warranty of merchantability: warrants that the product being sold is generally acceptable and reasonably fit for the ordinary purposes for which it is being sold. Any product that fails to live up to this warranty constitutes a breach, regardless of any fault by the defendant.
Causation: Regardless of the theory of liability, the burden is on the plaintiff to prove that the specific defendant caused the plaintiff’s injuries. There are several theories of liability under which a plaintiff can recover when there are multiple tortfeasors or multiple possible causes for the plaintiff’s harm, but in this case the man will not be able to recover under any of them.

Under the market share liability doctrine, if the plaintiff’s injuries are caused by a fungible product and it is impossible to identify which defendant placed the harmful product into the market, the jury can apportion liability based on each defendant’s share of the market. In this case, the man will not succeed under this theory because the teas are not truly identical. The investigation established that the levels of contamination and toxicity varied substantially between the packages and some packages had no contaminants at all. Thus, the man cannot rely on this theory of liability.
Under the alternative liability doctrine, if the plaintiff’s harm was caused by (i) one of a small number of defendants, (ii) each of whose conduct was tortious, and (iii) all of whom are present before the court, then the court may shift the burden of proof to each individual defendant to prove that his conduct was not the cause in fact of the plaintiff’s harm. Here, the man cannot rely on this theory because none of the defendants were negligent in failing to discover the contamination.
Under the concert of action doctrine, if two or more tortfeasors were acting pursuant to a common plan or design and the acts of one or more of them tortiously caused the plaintiff’s harm, then all the defendants will be held jointly and severally liable. Here, there is no evidence that the companies were acting together or tortuously. Thus, the man cannot recover under this theory

To be subject to strict liability, the defendant must be in the business of selling or otherwise distributing the product.
Strict Liability: strict products liability, the seller or distributor of a defective product may be liable for any harm to persons or property caused by such product. A product is defective when, at the time of the sale or distribution, it contains a manufacturing defect, a design defect, or inadequate instructions or warnings
Manufacturing Defect: A manufacturing defect is a physical deviation from what the manufacturer intended the product to be that causes harm to the plaintiff. The test for the existence of such a defect is whether the product conforms to the defendant’s own specifications. To prevail on a strict liability claim based on a manufacturing defect, the plaintiff must show that (i) the product was defectively manufactured, (ii) the defect existed when the product left the defendant’s control, (iii) the defect caused the plaintiff’s injury, and (iv) the product was used in a reasonably foreseeable way
Manufacturing Defect: To prevail on a strict liability claim based on a manufacturing defect, the plaintiff must show that (i) the product was defectively manufactured, (ii) the defect existed when the product left the defendant’s control, (iii) the defect caused the plaintiff’s injury, and (iv) the product was used in a reasonably foreseeable way.

Negligence Per Se

Although the unexcused violation of a statutory standard of care is negligence per se, the converse is not true: an actor who has complied with all statutory standards may still be found negligent if his conduct is not reasonable under the circumstances. In the absence of any special rule to the contrary, the actions of the fireworks company would be subject to a typical negligence analysis. A prima facie case of negligence consists of four elements: duty, breach, causation, and damages.
Violation of statute : The issue is whether the woman can be found negligent despite her compliance with the posted speed limit. Negligence is conduct, without wrongful intent, that falls below the minimum degree of ordinary care imposed by law to protect others against unreasonable risk of harm. A prima facie case of negligence consists of four elements: (1) Duty – the obligation to protect another against unreasonable risk of injury; (2) Breach of Duty – the failure to meet that obligation; (3) Causation – a close causal connection between the action and the injury; and (4) Damages – the loss suffered. All four elements must be established in order to maintain a claim for negligence. In general, a duty of care is owed to all foreseeable persons who may foreseeably be injured by the defendant’s failure to act as a reasonable person of ordinary prudence under the circumstances. A breach of duty occurs when the defendant departs from the required standard of care, such as failure to act as a reasonable person, an unexcused violation of a statute, or, if there is no direct evidence, through res ipsa loquitur. However, compliance with a statutory standard does not insulate an act against liability for negligence.

Negligent Infliction of Emotional Distress

A plaintiff can recover for negligent infliction of emotional distress (NIED) from a defendant whose tortious conduct placed the plaintiff in harm's way if the plaintiff can demonstrate that she was within the zone of danger and the threat of physical impact caused emotional distress. Generally, the distress must exhibit some physical symptoms. In virtually all jurisdictions, emotional distress must result from sensory and contemporaneous observance of the accident itself, not the receipt of news relating to the accident. To recover as a bystander, the plaintiff must be closely related to a person injured by the defendant, be present at the scene of the injury, and personally observe or perceive the injury

Trusts

General Considerations

Revocable versus Irrevocable Trusts :Under the Traditional rule a trust was presumed to be irrevocable unless stated otherwise. Today majority jurisdictions follow the UTC approach, and a trust is presumed revocable by default unless the document says otherwise.
Parties to a trust : Grantor/Settlor the creator of the trust. Trustee holds the legal interest or title to trust property. Beneficiaries : receive the benefit of the trust.
Mandatory vs. Discretionary : A mandatory trust requires the trustee to distribute all trust income. In a discretionary trust, the trustee is given the power to distribute income at his discretion. The trustee does not abuse his discretion unless he acts dishonestly or in a way not contemplated by the trust creator.

Trust Basics

A trust is a fiduciary relationship wherein the trustee is called upon to manage, protect, and invest certain property and any income generated therefrom for the benefit of one or more named beneficiaries. The trustee holds the legal interest or title to the trust property. Should the trust be terminated, title would merge and would vest in the beneficiaries.

Creating a Trust

A valid trust requires (1) Property (2) Beneficiaries (3) Trustee (4) Intent (5) Creation (6) Valid Legal Purpose.

Ascertainable beneficiaries :must be able to determine who the beneficiaries are as long as they can be identified. An indefinite class is valid such as my friends or unborn children. It is possible to create a trust for the benefit of a child who is not born yet. It is also possible to have a class gift. Charitable Trust is also ok.
Intent: precatory words are not enough.
Invalid Legal Purpose : If the purpose of the trust is against public policy the court might struck the invalid provision. A trust provision that restrains or seeks to prohibit the beneficiary of a trust from getting married might actually violate public policy.
Property : Intervivos Trust with a pour over will is allowed, when a grantor created a intervivos trust and upon his death that trust will actually pour over all the assets from the will into the trust and the trust will govern is legal. Pour over provisions are legal.

A private express trust clearly states the intention of the settlor to transfer property to a trustee for the benefit of one or more ascertainable beneficiaries. Traditionally, and in a minority of jurisdictions, a trust is presumed to be irrevocable unless the settlor expressly reserves the right to modify or terminate the trust. Under the UTC and majority rule, however, a trust is presumed revocable unless it expressly states otherwise. If the trust is revocable, the settlor’s power to revoke naturally includes the power to amend or modify the trust. A settlor may amend or revoke a revocable trust by substantial compliance with a method provided in the terms of the trust.

Types of Trusts

Testamentary trust : A testamentary trust is created in writing in a will or in a document incorporated by reference into a will. The will containing the trust must meet the attested or holographic will requirements.
Charitable Trust : For a trust to be considered charitable, it must (1) have a stated charitable purpose and (2) it must exist for the benefit of the community at large or for a class of persons the membership in which varies. Purposes considered to be charitable include the relief of poverty, the advancement of education or religion, and other purposes benefiting the community at large or a particular segment of the community. It must actually be for indefinite group of beneficiaries it cannot be for specific.

If the original trust purpose cannot be satisfied or met under the cy pres doctrine a court may modify a charitable trust to seek an alternative charitable purpose if the original one becomes illegal, impracticable, or impossible to perform. The settlor’s intent controls. To determine whether it should modify the trust, a court will analyze whether the trust has a specific intent to help one charity or a general intent to help charity.

If there is specific intent, the court may not modify the trust and the trust will be terminated and become a resulting trust (an implied trust that is held for the settlor or his/her heirs). If for a specific purpose it will not be modified by the court.
If there is general intent, the court will substitute a similar charity. The court may re-write a provision and find a charitable purpose. The modern approach is to presume a general intent and apply the cy pres doctrine even if the settlor’s intent is not known.

Resulting Trust : When a trust fails in some way or when there is an incomplete disposition of trust property, a court may create a resulting trust requiring the holder of the property to return it to the settlor or to the settlor’s estate. When a testamentary trust fails, the residuary legatee succeeds to the property interest. The purpose of a resulting trust is to achieve the settlor’s likely intent in attempting to create the trust.
Support Trust : A beneficiary entitled to distribution is entitled to the right of alienation and can alienate their interest in the trust freely when the trust allows so. The creditors can only reach that right when the Trustee makes a distribution, but in a support trust where the trustee is directed to pay income or principal as necessary to support the trust beneficiary creditors cannot reach the assets of a support trust unless the creditors are providing the beneficiaries with necessaries then they can be paid directly by the trustee.
Discretionary Trust : A discretionary trust is where the trustee is given complete discretion regarding whether or not to apply payments of income or principal to the beneficiary and make a distribution. If the trustee exercises his discretion to pay, then the beneficiary’s creditors are entitled to reach the trusts assets. If the direction to pay is not exercised then the beneficiary’s interest cannot be reached by his creditors.
Mandatory Trust : The trustee must pay out income and principal to the beneficiaries according to the instructions of the trust. They have no discretion to choose whether to do so or not. When the money is paid out to the beneficiary the creditor has a right to it reach that property.
Spendthrift Trust : Expressly restricts the beneficiaries right to transfer his or her interest in the trust. It does not allow beneficiary to actually promise or alienate his or her interest in the trust assets or income. In this case creditors usually cannot reach that money because it was specifically created as a spendthrift trust with the exception that if money is owed for tax lien, child or spousal support or basic necessities the creditor might be able to reach the money for a trust.

Modification & Termination

Settlor Modification of a Trust : When a settlor has a revocable trust, the settlor has the power to modify or amend the trust. If the trust is irrevocable trust settlor cannot amend or terminate that trust. If there is an irrevocable trust in place, modification or termination of an irrevocable trust can only occur with the consent of all the beneficiaries (present and future) and if the amendment would not go against the primary purpose of the trust. If the settlor creates a living trust that is irrevocable, the settlor cannot change or terminate the trust unless all the beneficiaries agree and the settlor can show that the change, modification, or termination is keeping within the purpose of the trust.

Under the Traditional rule a trust is presumed to be irrevocable unless it expressly states otherwise. But under the UTC a trust is presumed revocable unless it expressly states that it is irrevocable. An Amendment to a trust does not have to be executed and comply with the formalities of a will. There are no witness or signature requirements.

Beneficiaries Modification of a Trust : A trust can terminate automatically when the trust purpose has been accomplished. Beneficiaries can modify or terminate a trust when the settlor is deceased and has no more interest and all present and future beneficiaries consent to modify or terminate the trust. However, Under the Claflin doctrine, a trustee can block a premature trust termination a trustee can prevent the beneficiaries from terminating the trust when a material purpose of the trust has not been completed yet, therefore it should not be terminated. If a court finds that there's still some important purpose left for the trust it's not going to actually terminate or modify that trust even if they all agree. Most courts allow the trustee to block the termination if it can be shown that termination would violate the settlor’s intent.
A court : may modify a trust under the doctrine of equitable deviation if events that were unanticipated by the settlor have occurred and the changes would further the purposes of the trust. To the extent possible, the modification must be made in accordance with the settlor’s probable intention, and the court need not seek beneficiary consent to make the modification.
Removal of Trustee : Beneficiaries can remove a trustee if the beneficiaries believe that the trustee is not fulfilling its duties or violated a duty to them. If the purpose of the trust is frustrated by continuing to have the trustee be the trustee or if they violated duty. Even if circumstances have not changed in an unanticipated manner, a court may modify the terms of a trust that relate to the management of trust property if continuing the trust on its existing terms would be impracticable, wasteful, or would impair the trust’s administration.

Allocating Income and Expenses

Life tenant/Remainder beneficiaries: Gets income from the trust (income that the trust creates) such as cash divided, interest, rent income, net business income. And they pay expenses for interest on loans, taxes, minor repairs.
Remainder Beneficiaries : entitled to the trust principal when the trust terminates. Such as dividends from stocks, stock split, proceeds from selling trust assets/property. Pay expenses for principal of loans, major repairs, improvements.
All assets received by a trustee must be allocated to either income or principal. The allocation must be balanced to treat present and future trust beneficiaries fairly, unless a different treatment is authorized by the trust instrument. The traditional approach assumed that any money generated by trust property was income and that any money generated in connection with a conveyance of trust property was principal. The traditional approach serves as the starting point for the modern approach. Under the UPAIA (modern approach), a trustee is empowered to re-characterize items and reallocate investment returns as he deems necessary to fulfill the trust purposes, as long as his allocations are reasonable and are in keeping with the trust instrument. A distribution of stock is treated as a distribution of principal under the UPAIA.

Disclaimer

When Present interest holder disclaims : Almost all states have enacted statutes that permit beneficiaries of trusts to disclaim their interest in the trust property. In order to effectively disclaim or not want the benefits of the trust it must be made in writing within nine months from the death of the creator of the trust. If the disclaimer is effective, the disclaiming party is treated as predeceasing the testator. Then, the trust principle becomes immediately distributable or payable to remainder beneficiaries, as long as no one would be harmed by making a distribution to them earlier than it would have been made had the income beneficiary not disclaimed.
When the future interest holder disclaims : The holder of a future beneficiary can disclaim their property. In order to effectively disclaim or not want the benefits of the trust it must be made in writing within nine months from the death of the creator of the trust. If the disclaimer is effective, the disclaiming party is treated as predeceasing the actual creator of the trust. If the future holder disclaims then the trust principle with either revert back to the creator of the trust or if and anti-lapse statute applies then it will go to the remainder beneficiaries issues.

Class Gifts

A gift to a group of individuals with an automatic right of survivorship is a class gift. A class remains open and may admit new members until at least one class member is entitled to obtain possession of the gift. A vested remainder accelerates into possession as soon as the preceding estate ends for any reason, such as the disclaiming of the estate by its holder.
However, under the UPC, if a class gift is limited in favor of a class of children, only those children alive at the time of distribution are entitled to possession of the property. If a child who survives the settlor but then predeceases the time of distribution has surviving issue, that issue would have a right to the parent’s share of the gift.
A class remains open and may admit new members until (i) at least one class member is entitled to obtain possession of the gift, or (ii) the preceding interest terminates (such as when the holder of the present life interest dies).

Lapse

Unless the governing instrument provides otherwise, the common law general rule is that the gift is expressly limited to the transferor’s surviving children, so that the surviving issue of a deceased child does not take.

Trustee Duties

A trustee has a duty to administer trust in good faith, in accordance with its terms and purposes, and in the interest of the beneficiaries.
Duty of loyalty: trustee has a duty to act in good faith and must act reasonably in executing their duties. A trustee has a duty to not self-deal, a trustee cannot sell assets from the trust to himself, in this case there is an irrebuttable presumption that they've breached the duty of loyalty. But, if it is authorized either by the trust itself or by all of the beneficiaries then there is no self-dealing as long as it is still reasonable. If there is self-dealing the beneficiaries can set aside the transaction, or they can take the benefit of it. If there's profit from the self-dealing beneficiaries can recover any money from it.
Conflict of Interest: when a trustee takes trust assets and invests it into a corporation that they actually own there is a conflict of interest, the trustee is taking trust assets and investing it into property that they own that's going to be viewed as a conflict of interest and there is a presumption that the trustee breached the duty of loyalty.
Prudent Investor: Under CL the trustee must act as a reasonable prudent investor who is investing his own money. Good investments were govt bonds, federal insured certificates of deposits, public stock and co-stock. Under the UPIA a trustee must act as a prudent investor in context of the entire trust portfolio, if they have specialized skilled in investing, they should utilize those skills. Trustee must invest reasonably with reasonable care caution and skill when investing in assets.
Diversify: They also have a duty to diversify a trustee must invest in more than just one specific type of stock. A trustee must make property productive and purse all opportunities from it to generate money and income, such as renting trust property.
Impartiality: A trustee also has the duty to act impartially cannot treat beneficiaries unfairly over one another and allow their personal biases to affect their duties. Trustee must be impartial to income beneficiaries and remainder beneficiaries, to treat them equally, can't favor the people getting the income of a trust if it's going to hurt the people who ultimately take the rest of the trust. As a trustee you're bound to treat all beneficiaries equal whether remainder or whether they are income beneficiaries.

Holders Abilities

A power of appointment enables the holder to direct a trustee to distribute some or all of the trust property without regard to the provisions of the trust. A special power of appointment allows the donor to specify certain individuals as the objects of the power, to the exclusion of others.
When an appointment exceeds the grant of power, the property or interest that was invalidly appointed passes to the taker in default—the party who would have received the interest had there been no appointment.

Wills

The probate estate includes all assets that pass by will or intestacy upon a decedent’s death. A trust is generally considered a will substitute because the distribution of property placed in trust during a decedent’s lifetime pass outside of probate according to the terms of the trust.

Wills & Decedent’s Estates

Intestate Succession

Intestacy is the default statutory distribution scheme. It applies when, as here, an individual dies without disposing of his property through a valid will. Intestacy statutes generally favor the decedent’s surviving spouse and issue, followed by the decedent’s other relations.

Valid Will Requirements (Attested Will)

A valid will must be in writing and signed with present testamentary intent by the testator in the joint presence of two witnesses.

Holographic Wills

A holographic will is in a testator’s handwriting, signed by the testator, and need not be witnessed. To be valid, a will must be acknowledged by the testator and signed in the presence of at least two attesting witnesses, who also sign the will within 30 days

Elective Shares

An elective share gives the surviving spouse a fraction of the decedent’s estate if the surviving spouse decides to elect that share, rather than a gift in the will.

Inter Vivos Transfers

In some jurisdictions, the surviving spouse can set aside inter vivos transfers made by the decedent during marriage, without spousal consent, if the decedent initiated the transfer within one year of her death, retained an interest in the property, or received less than adequate consideration.

Life Insurance Policies

A beneficiary of a life insurance policy takes by virtue of the insurance contract. The proceeds are not part of the decedent’s estate, unless they are payable to the estate as beneficiary. Life insurance policies typically provide that proceeds will only be paid to a beneficiary named on an appropriate form filed with the insurance company; other possible methods of changing a beneficiary are thus viewed as being excluded by the insurance contract. However, some courts have upheld a beneficiary change by will if the insurance company does not object.

Incorporation

A will may incorporate by reference another writing not executed with testamentary formalities, provided the other writing meets three requirements: (i) it existed at the time the will was executed; (ii) the testator intended the writing to be incorporated; and (iii) the writing is described in the will with sufficient certainty so as to permit its identification.

Lapse & Anti-Lapse

Under common law, if a beneficiary died before the testator or before a point in time by which he was required to survive under the will, the gift failed and went to the residue unless the will provided for an alternate disposition. Today, almost all states have anti-lapse statutes that provide for the alternate disposition of lapsed gifts. Typically, an anti-lapse statute will save the gift if: (i) the gift was made to a beneficiary related to the Testator by blood within a certain degree of relationship, and (ii) that beneficiary is survived by issue.

Abatement

Gifts by will are abated, i.e. reduced, when the assets of the estate are insufficient to pay all debts and legacies. If not otherwise specified in the will, gifts are abated in the following order: (i) intestate property; (ii) residuary bequests; (iii) general bequests; and then (iv) specific bequests. Abatement within each category is pro rata.

Rule of Construction

Because of the rule of construction that a will “speaks” at the time of death, a bequest of generically described property applies to property that meets the generic description at the testator’s death. The doctrine of ademption applies only to specific bequests.

Slayer Statute

A party cannot take property from a decedent when the party was responsible for the decedent’s death.

Children

A parent-child relationship must be established for an individual to be classified as issue of another. Under the UPC and the majority of jurisdictions, adoption establishes a parent-child relationship between the stepparent and child, including full inheritance rights in both directions.
The common-law rule was that if a child was born out of wedlock, he could not inherit from his natural father. Most jurisdictions provide that an out-of-wedlock child can inherit from his natural father if (i) the father subsequently married the natural mother, (ii) the father held the child out as his own and either received the child into his home or provided support, (iii) paternity was proven by clear and convincing evidence after the father’s death, or (iv) paternity was adjudicated during the lifetime of the father by a preponderance of the evidence. Further, the Supreme Court has held that a statute is unconstitutional if it denies inheritance rights to a nonmaterial child when paternity has been established during the father’s lifetime.

Revocation

A will may be revoked wholly or partially in three ways: by subsequent writings, by physical destruction of the will, or by operation of law. Physical destruction may take the form of burning any portion of the will or canceling, tearing, obliterating, or destroying a material portion of the will with the intent to revoke it. Both the act and a simultaneous intent to revoke must be proven to yield a valid revocation.

Pretermitted Heir Statutes

Pretermitted heir statutes permit children of a testator under certain circumstances to claim a share of the estate even though they were omitted from the testator’s will. While the birth or adoption of a child after the execution of a will does not invalidate the will, such children are typically not provided for in the will. If the testator then dies without revising the will, a presumption is created that the omission of the child was accidental. An omitted child statute does not apply if: (i) it appears that the omission of the child was intentional; (ii) the testator had other children at the time the will was executed and left substantially all of his estate to the other parent of the pretermitted child; or (iii) the testator provided for the child outside of the will and intended this to be in lieu of a provision in the will.

Codicils

A codicil is a supplement to a will that alters, amends, or modifies it. A codicil must be executed with the same formalities as a will. A validly executed codicil republishes the will as of the date of the codicil.
A validly executed codicil may validate an invalid will if the codicil refers to the will with sufficient certainty to identify and incorporate it, or if the codicil is on the same paper as the invalid will. A will may incorporate by reference another writing provided the other writing existed at the time the will was executed, is intended to be incorporated, and is described in the will with sufficient certainty so as to permit its identification.

Stock Dividends

At common law, a stock dividend is a property interest distinct from stock given by a specific bequest. A bequest of stock owned by a testator when the testator’s will is signed excludes subsequently acquired shares of the same stock. A bequest of a certain number of shares is deemed to include any additional shares of that security acquired by reason of a stock split, reinvestment, or merger initiated by the original security. However, the beneficiary is not entitled to any pre-death cash dividends or distributions.
Under common law, a bequest of stock owned by a testator when the testator’s will was signed excluded subsequently acquired shares of the same stock. Many states held that a stock dividend is a property interest distinct from stock given by the specific bequest. Under the modern UPC approach, a stock dividend is treated like a stock split instead of a cash dividend.

Replacement Gifts

Under common law, if the subject matter of a specific bequest is missing or destroyed, the beneficiary takes nothing, not even the equivalent in cash. If the specifically-bequeathed item is not a part of the estate at the testator’s death, it is adeemed. The Uniform Probate Code created a mild presumption against ademption. The UPC permits a beneficiary of a specific extinct gift to inherit the property acquired by the testator as replacement property or the outstanding balance.

Disclaimer

Under disclaimer statutes, a disclaiming party is treated as if she had predeceased the decedent. When a disclaiming party is deemed to have predeceased the testator, the bequest passes either to the disclaimant’s issue or to the residuary legatee. The typical anti-lapse statute provides for alternate disposition of lapsed bequests. Under the majority of state statutes, if the gift was made to a relation of the testator within a specific statutory degree, and the relation predeceased the testator but left issue, the issue succeeds to the gift, unless the will expressly states to the contrary.