MEE High Priority Statements Flashcards

Question

Diversity of Citizenship SMJ

Answer 1

— A federal court can only hear cases where it has subject matter jurisdiction, because it is a court of limited jurisdiction. A federal court has subject matter jurisdiction to hear a claim if: (a) there is a federal question; (b) there is diversity of citizenship among the parties; OR (c) supplemental jurisdiction is present. Subject matter jurisdiction is not waived if a party fails to raise it at trial. It may be raised at any time, even on appeal. — Diversity of Citizenship Jurisdiction exists when: (1) there is complete diversity of citizenship between all plaintiffs and defendants (no plaintiff can be from the same state as any defendant); AND (2) the amount in controversy exceeds $75,000. Diversity jurisdiction is determined at the time the action is commenced; a post-filing change of citizenship is irrelevant absent bad faith. o Citizenship: A party’s citizenship is determined by their domicile.  For a natural person, domicile is determined by the party’s: (1) residence (physical presence in the state); AND (2) subjective intent to make the state their permanent home. The above test also applies to permanent resident aliens. If a person resides in more than one state for an extended period of time, then the court will review factors, such as the person’s residence, voter registration/records, vehicle registration, location of bank accounts, and place of employment. Domicile continues until changed. Both residence and intent must be established concurrently for a change in domicile; the mere change of one without the other is not sufficient.  A corporation has dual citizenship, and is deemed to be a domiciliary of: (1) the state of its principal place of business (the corporation’s “nerve center” – where officers direct, control, and coordinate the corporation’s activities); AND (2) any state where it is incorporated. Usually, a corporation’s principal place of business is its designated headquarters.  An executor or personal representative is deemed to have the citizenship of the decedent or person being represented.  A partnership, sole-proprietorship, limited liability company (LLC), or unincorporated association is deemed to be a domiciliary of the state of every partner/member/owner. o Amount in Controversy: The amount in controversy is based on the damages alleged in good faith in the Complaint (not the actual award), unless it is legally certain that the plaintiff cannot recover the specified amount. A plaintiff may aggregate his claims against one defendant, or against multiple defendants if all are joint tortfeasors (where the defendants are jointly and severally liable). A claim for injunctive relief is valued by either the benefit to the plaintiff OR the cost of compliance for the defendant (the value of the injunction). — Alienage Diversity Jurisdiction: Diversity jurisdiction may also exist in an action by or against an alien (a citizen or subject of a foreign state). Alienage jurisdiction applies in two instances: o In an action between (1) aliens (on one side), AND (2) citizens of a State (on the other side), PLUS (3) the amount in controversy exceeds $75,000.  However, jurisdiction DOES NOT EXIST IF (1) an alien is a U.S. permanent resident, and (2) the alien is domiciled in the same State as a party on the other side of the action. o In an action between (1) citizens of different States (U.S. citizens are present on both sides of the action), (2) in which aliens are additional parties; AND (3) the amount in controversy exceeds $75,000. Here, jurisdiction DOES NOT exist for cases among aliens (when both the plaintiff and defendant are aliens), unless U.S. citizens are present on both sides of the action. — Foreign State Diversity Jurisdiction: Diversity jurisdiction also exists between (1) a Foreign State as plaintiff, AND (2) citizens of a State or of different States, PLUS (3) the amount in controversy exceeds $75,000. A “Foreign State” includes a political subdivision of a foreign state or an agency/instrumentality of a foreign state.

Answer 2

— A federal court can only hear cases where it has subject matter jurisdiction, because it is a court of limited jurisdiction. A federal court has subject matter jurisdiction to hear a claim if: (a) there is a federal question; (b) there is diversity of citizenship among the parties; OR (c) supplemental jurisdiction is present. — Supplemental Jurisdiction: If a federal court has original jurisdiction (subject matter jurisdiction) over some of the claims in the action, then it may exercise supplemental jurisdiction over additional state court claims when they arise from the same “case or controversy”. Generally, such claims must arise from a common nucleus of operative fact (the same transaction or occurrence). However, several limitations exist. — Supplemental jurisdiction CANNOT be used to overcome a lack of diversity. In a case where jurisdiction is based solely on diversity, a federal court DOES NOT have supplemental jurisdiction to hear claims by or against additional parties if their presence in the case would destroy complete diversity. o For example, a plaintiff in a diversity case CANNOT assert supplemental jurisdiction if it would violate complete diversity. Additionally, supplemental jurisdiction DOES NOT apply to claims by the original plaintiff against a third-party defendant. It also CANNOT be used for claims by parties proposed to be joined or intervene as plaintiffs under Required Joinder (Rule 19) or Intervention (Rule 24) if adding such party would destroy complete diversity. — A federal court may decline to exercise supplemental jurisdiction over State claims when: (a) the claim raises a novel or complex issue of State law; (b) the claim substantially predominates over the claim(s) of which the district court had original jurisdiction; (c) the federal district court has dismissed all claims over which it had original jurisdiction; OR (d) in exceptional circumstances where there are other compelling reasons for declining jurisdiction. State claims do not substantially predominate over federal claims when the facts needed to prove each claim are identical or similar.

Answer 3

— A defendant may remove a case to a federal court sitting in the State where the claim was filed if: (1) the federal court has subject matter jurisdiction (original jurisdiction); (2) all defendants agree; (3) no defendant is a resident of the forum state (only if removal is sought under a Diversity Jurisdiction basis); AND (4) removal is sought within 30 days of either service of the Summons or receiving the initial pleading (whichever period is shorter). A plaintiff CANNOT remove a case to federal court. In addition, a case CANNOT be removed more than one year after commencement in a diversity action. — Procedurally, to remove an action to federal court the defendant must file a Notice of Removal in the federal court district within the state where the action is pending. The notice MUST: (1) state the basis for federal court jurisdiction; AND (2) include copies of the documents filed in the State court action. The defendant must serve the Notice of Removal upon all parties, and file a copy with the state court. Removal is automatic, and the state court may take no further action in the case once it receives the Notice of Removal.

Answer 4

— A federal court MUST have personal jurisdiction over a defendant for its judgment to be binding. A federal court can exercise personal jurisdiction to the same extent as the State courts where the federal district court is located. Jurisdiction over a defendant normally falls into two categories: (1) the traditional bases of jurisdiction; and (2) a State’s long-arm statute. — Traditional Bases of Jurisdiction: The traditional bases for asserting personal jurisdiction include: (a) domicile; (b) transient jurisdiction (presence in the State when served); (c) consent; or (d) waiver (appearing in the action without objecting to jurisdiction). The above grounds comport with the Constitutional requirements of due process. — Long-Arm Jurisdiction: To exert personal jurisdiction over a defendant who is not a resident of the forum state: (1) the forum state must have a long arm statute; AND (2) the Constitutional requirements of due process must be met. Where a state’s long-arm statute allows personal jurisdiction to the same extent as the Constitution, then the long-arm analysis is the same as the constitutional analysis, which requires: (1) that the defendant have sufficient minimum contacts with the forum state, (2) so as not to offend traditional notions of fair play and substantial justice. Both prongs must be satisfied. — Prong 1 – Minimum Contacts (Contacts & Relatedness): Sufficient minimum contacts exist when either general jurisdiction OR specific jurisdiction is present. — General jurisdiction exists when the defendant’s contacts with the forum state are so substantial and of such nature that the defendant is essentially at home in the state. Defendant must purposefully avail itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws. The claim DOES NOT need to relate to or arise from the defendant’s contacts in the forum state. An individual must be domiciled in the state for general jurisdiction to apply. For a corporation, general jurisdiction applies where the corporation is fairly regarded as “at home” (usually where the corporation is incorporated or headquartered). — Specific jurisdiction exists when the suit arises out of or relates to the defendant’s contacts with the forum state. A court’s exercise of specific jurisdiction is Constitutional when a defendant: (1) purposefully avails itself of the privilege of conducting activities within the forum state; AND (2) the defendant’s contacts with the forum give rise to (or are related to) the plaintiff’s claims. There MUST be a connection between the forum state and the underlying controversy (principally, an activity or an occurrence that takes place in the forum state). When there is no such connection, specific jurisdiction is lacking regardless of the extent of a defendant’s unconnected activities in the state. — Regularly occurring sales of a product in a state DOES NOT justify the exercise of jurisdiction over a claim unrelated to those sales. — With respect to conduct via the internet, a court will consider how interactive the website is. Generally, the more interactive a website is, the more likely a court will find personal jurisdiction. A passive website (one that contains only information) has been held to be insufficient to subject the owner to jurisdiction. Courts have held jurisdiction to be proper where defendants could reasonably anticipate that defamatory comments posted online would target readers in plaintiff’s home state. — When a cause of action arises from personal/domestic relations, a temporary visit or brief stopover to a State DOES NOT satisfy the minimum contacts requirement (even if the spouses were married during the visit). — Courts have held that specific personal jurisdiction can be exercised over an automobile insurer if an accident in a State was within the insurance policy’s territorial scope of coverage. — Prong 2 – Fair Play and Substantial Justice (Fairness): — Even if the minimum contacts test is met, it MUST be fair and reasonable for the defendant to be sued in the forum state (so that traditional notions of fair play and substantial justice are not offended). — However, the burden is on the defendant to show that it would be so unreasonable to defend himself in the forum state that it would constitute a violation of Due Process. The court will consider: the burden on the defendant of litigating in the forum state, the state’s interest in providing a forum; the plaintiff’s interest in a convenient forum for obtaining relief; and the interests of the judicial system to efficiently resolve disputes. — 100-Mile of Courthouse Rule: Personal jurisdiction over a party is established if: (1) that party is joined to the action under Rule 14 (Third-Party Practice) or Rule 19 (Required Joinder of Parties); (2) is served within the United States; AND (3) is served within 100 miles of the courthouse where the Summons was issued. Courts have deemed the exercise of personal jurisdiction under this “100-mile bulge” rule to be Constitutional.

Answer 5

2. In federal court, the Summons and Complaint must be served upon the defendant within 90 days of filing the Complaint. Otherwise, the court MUST either: (a) dismiss the action without prejudice against that defendant; OR (b)order that service be made within a specified time. However, if the plaintiff shows good cause for failing to serve within 90 days, the court MUST extend the time for service for an appropriate period. 3. Service may be made by any person who: (1) is at least 18 years old; AND (2) not a party to the action. 4. The method of service must be consistent with the Due Process Clause, which requires that notice be reasonably calculated to make the parties aware of the action and give them an opportunity to object. — Service upon an Individual: An individual may be served by delivering the Summons and Complaint: (a) to the individual personally; (b) to someone of suitable age and discretion who resides at the individual’s current dwelling or usual place of abode; (c) to an agent authorized by appointment or by law to receive service of process; OR (d) in accordance with the state law of the forum state or where service is made. — Service upon a Corporation, Partnership, or Association: A corporation, partnership, or unincorporated association may be served: (a) in accordance with state law of the forum state or where service is made; OR (b) by delivering the Summons and Complaint to an officer (i.e. CEO), managing agent, general agent, or authorized agent (by appointment or by law) of the corporation. — Service upon a Foreign Defendant: Generally, a foreign defendant may be served by any manner not prohibited by international agreement. However, a foreign corporation, partnership, or association CANNOT be served by personal service. A court CAN authorize service via e-mail if: (1) no international agreement prohibits it; AND (2) it satisfies due process (reasonably calculated to notify the defendant of the action and give him an opportunity to object).

Answer 6

Venue (Proper Venue & Transfer of Venue) —Proper Venue: For civil actions brought in federal court, venue is proper in any district where: (a) any defendant resides (if all defendants are residents of the forum state); (b) where a substantial portion of the claim occurred; (c) where a substantial part of property is located (where property is the subject of the action); OR (d) if none of the above apply, then venue is proper in any judicial district in which any defendant is subject to the court’s personal jurisdiction. Proper venue is determined at the time the suit is filed; a subsequent move by a party DOES NOT generally warrant a change of venue. o Residence Rules: Residence of an individual is determined by their domicile (residence and intent to make the place their permanent home). A business entity’s residence includes ALL districts where it is subject to personal jurisdiction. A non-resident of the U.S. (alien or U.S. citizen living outside the U.S.) may be sued in any judicial district. o For tort actions, venue is proper where the alleged tortious acts occurred, but venue is NOT proper where the only connection is that medical treatment for injuries was received in the judicial district. —Transfer of Venue: Transfer of venue and the applicable law depends on whether venue was proper when the suit was first filed. o If venue was proper when the case was filed, the court MAY transfer venue if: (1) needed for the convenience of parties and witnesses or interests of justice; AND (2) the action could have initially been brought in the receiving court (proper venue, subject matter jurisdiction, and personal jurisdiction). The court has discretion whether or not to transfer the case. Following a transfer, the new court MUST apply the same substantive law as the original transferor court. o If venue was improper when the case was filed, the court MUST either: (a) dismiss the case; OR (b) transfer the case to a proper court if the interests of justice require it. Following a transfer, the law applied is that of the new transferee court. o Forum-Selection Clause: Generally, a court will enforce a contractual forum-selection clause to transfer venue, UNLESS special factors are present (i.e. significant/unusual hardships or inequality of bargaining power). Additionally, the Supreme Court has held that a forum-selection clause is an important factor favoring a change of venue, even if the forum- selection clause is unenforceable under the applicable state law.

Answer 7

• The Erie doctrine applies when a federal case is brought under diversity of citizenship jurisdiction. Under the Erie doctrine, a federal court will apply its own federal procedural laws, but must apply state substantive law. Similarly, for claims heard under Supplemental Jurisdiction, a federal court will apply its own procedural law/rules and the state substantive law. o Procedural laws include: civil procedure rules, burden of proof, and rebuttable presumptions. o Substantive laws include: elements of a claim or defense, choice of law rules, statute of frauds, irrebuttable presumptions, damages, statute of limitations and tolling rules, statute of limitations where a borrowing statute was enacted (a statute providing the shorter of the two time-periods applies), and preclusion law (e.g. claim preclusion, issue preclusion). • Since choice of law rules are considered substantive law, a federal court sitting in diversity MUST apply the forum state’s choice of law rules to determine the applicable state substantive law in the action. Once the applicable state law is determined, the federal court must apply that law as the state court would; it CANNOT make its own independent judgment on the construction of a law or statute. When no controlling state case law is available to the federal court for guidance, the court must predict how the state’s highest court would rule on the issue. • However, federal law will apply for matters governed by the U.S. Constitution, laws passed by Congress, or valid federal law that preempts state law under the Supremacy Clause.

Answer 8

• Multiple Plaintiffs: Under the Federal Rules of Civil Procedure, multiple plaintiffs MAY join in one action if: (1) joint and several relief is asserted by them or the claim arises out of the same transaction or occurrence; (2) a common question of law or fact to all plaintiffs exists; AND (3) subject matter jurisdiction exists for each claim. • Multiple Defendants: Multiple defendants MAY be joined in one action if: (1) joint and several relief is asserted against them or the claim arises out of the same transaction or occurrence; (2) a common question of law or fact to all defendants exists; AND (3) subject matter jurisdiction exists for each claim. • Under the logical relationship test, all logically related events entitling a person to institute a legal action against another are generally within the meaning of “transaction and occurrence” for permissive joinder. • Misjoinder of parties is NOT a ground for dismissing an action. Instead, the court may add or drop a party on just terms. The court may also sever any claim against a party.

Answer 9

• Motion to Dismiss: Under Rule 12(b), a Motion to Dismiss may be made prior to filing an Answer. A Motion to Dismiss requires the court to: (1) consider the facts in the light most favorable to the non-moving party; AND (2) determine whether there is any basis upon which relief can be granted for the non-moving party. If there is any basis for relief, the court MUST deny the motion. The Court DOES NOT evaluate the merits of the case. • Motion for Judgment on the Pleadings: A motion for any non-waivable defense may be made at any time early enough NOT to delay trial. However, it is referred to as a Motion for Judgment on the Pleadings if it is made after the defendant has answered. • Grounds for Motion and Waiver: A party may bring a motion in order to dismiss one or more claims on certain specified grounds. Such grounds include: (1) lack of subject matter jurisdiction; (2) lack of personal jurisdiction; (3) improper venue; (4) insufficient process; (5) insufficient service of process; (6) failure to state a claim upon which relief can be granted; and (7) failure to join a necessary party. The grounds listed in (2)-(5) above are deemed waived if NOT raised in the first responsive pleading or Motion to Dismiss. A motion for lack of subject-matter jurisdiction cannot be waived, and may be made at any time, even on appeal.

Answer 10

• A court will grant a Motion for Summary Judgment when: (1) there is no genuine issue of material fact; AND (2) the movant is entitled to judgment as a matter of law. When reviewing the motion, the court MUST view the evidence in the light most favorable to the non-moving party. o An issue of material fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. o As to materiality, only disputes over facts that might affect the outcome of the suit will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will NOT be counted. • Where the moving party presents evidence of facts that would defeat the non-moving party’s claim, the non-moving party MUST offer evidence of specific facts showing that there is a genuine issue for trial by affidavits or other evidence. • A party may move for summary judgment on the entire case OR on certain issues (partial summary judgment), and may file the motion at any time until 30 days after the close of all discovery (unless a different time is set by local rule or court order). • If a Motion to Dismiss (or Motion for Judgment on the Pleadings) presents matters outside the pleadings, the court may treat the motion as a Motion for Summary Judgment. When this occurs, all parties must be given a reasonable opportunity to present evidence that is pertinent to the motion.

Answer 11

• Issue Preclusion (collateral estoppel) precludes a party from attempting to retry an issue if there has been a final judgment on the merits by a court of competent jurisdiction. Issue preclusion may be invoked if: (1) a valid and final judgment was rendered in the first action; (2) the issue is identical to the issue decided in the prior action; (3) the issue was actually litigated, determined, and essential in the prior action; AND (4) the party against whom enforcement is sought against had a full and fair opportunity to litigate the issue in the first action. • Issue preclusion may be used both to defend a claim/action and on offense to support a claim/action. Additionally, issue preclusion may be used even if the second action contains a new claim. A judgment entered pursuant to settlement CANNOT be used for issue preclusion purposes because no determination by the court was made. • Generally, a non-party to the first action CAN assert issue preclusion against a party to that action if the four-part test above is satisfied (even if used offensively by the nonparty). This approach has been adopted in Most States and by the Supreme Court for Federal Claims. However, the Supreme Court has suggested that issue preclusion is NOT appropriate when it would be unfair, such as when: (a) a plaintiff in the new action (who was a non- party in the first action) could have easily joined the first action; (b) the party’s stake was deceptively small in the original proceeding; (c) the non-party has significantly more advantageous procedural opportunities in the subsequent proceeding; OR (d) there were inconsistent prior judgments from the same incident. Some States still apply the mutuality doctrine, in which a non-party CANNOT assert issue preclusion to their advantage in a subsequent action.

Answer 12

• Final Judgment Rule: In federal court, a party may only appeal from a final judgment or decision (known as the “final judgment rule”). A final judgment/decision is one which ends the litigation on the merits (all claims are resolved), and leaves nothing for the court to do but execute the judgment. Appeal is thereby precluded from any decision that adjudicates some but not all claims in the action, as well as from any decision which is tentative, informal, or incomplete. • Appeals must be filed within 30 days after entry of the judgment appealed from. • Several exceptions to the final judgment rule exist: o Rule 54(b) Exception: Under the Federal Rules of Civil Procedure, an appeal is allowed when: (1) the action has multiple parties or multiple claims; (2) the court directs entry of a final judgment for some of the claims or parties; AND (3) the court expressly determines that there is no just reason for delay. If all the above elements are NOT met, then any appeal must wait until after a final judgment for the entire case. o Statutory Exceptions: Under federal law, a party may immediately appeal certain court orders as of right relating to: (i) injunctions; (ii) receiverships; (iii) orders affecting the possession of property; (iv) liability in an admiralty action; and (v) patent infringement orders which would be final except for an accounting. o Certified Appeal Exception: Under federal law, an immediate appeal is allowed when: (1) a federal district court judge certifies certain grounds for immediate appeal; AND (2) the Court of Appeals agrees to permit the appeal. The application for an appeal under this rule must be made within ten days after the entry of the order.  A judge will typically certify an appeal when the order involves: (i) a controlling question of law, (ii) which there is substantial ground for difference of opinion, and (iii) an immediate appeal may materially advance the ultimate termination of the litigation. o Collateral Order Doctrine: The collateral order doctrine allows an immediate appeal when the interlocutory order: (1) conclusively determines the disputed question; (2) resolves an important issue completely separate from the merits of the action; AND (3) is effectively unreviewable on appeal from a final judgment. This doctrine will only apply to a small class of decisions. The Supreme Court has held that the collateral order doctrine DOES NOT allow an interlocutory order concerning the enforcement of a forum selection clause because the order is not effectively unreviewable on appeal from final judgment. o Writs of Mandamus and Prohibition: When there is an abuse of judicial authority by a trial court, a party may seek a writ of mandamus or prohibition to have a federal appellate court review the trial court’s ruling. However, the writ of mandamus (an application for the court to act) or writ of prohibition (an application for the court to end litigation) are issued only in exceptional circumstances. A party CANNOT use the writ of mandamus or prohibition to correct an ordinary error by the district court. The party seeking mandamus/prohibition has the burden of showing that its right to issuance of the writ is clear and indisputable.  The writs have been invoked when a court acts outside its jurisdiction or when the court fails to follow court rules. Such instances have included: (i) unwarranted judicial action threatened to embarrass the Executive Branch in conducting foreign relations; (ii) it was the only means of forestalling intrusion by the federal courts on a delicate area of federal-state relations; (iii) it was necessary to confine a lower court to the appellate court’s mandate; and (iv) where a district judge displayed a persistent disregard of the Rules of Civil Procedure. o Pendent Appellate Jurisdiction: Under the doctrine of pendent appellate jurisdiction, a party may seek to have a non-final order reviewed along with another appealable order currently pending before the appellate court. However, the doctrine is only appropriate when: (a) a non-appealable decision is inextricably intertwined with an appealable decision; OR (b) when review of the non-appealable decision is necessary to ensure a meaningful review of the appealable decision. o Certification of Class Action: Under the Federal Rules of Civil Procedure, an order granting or denying class-action certification may be appealed when: (1) a petition for permission to appeal is filed within 14 days after the order is entered; AND (2) the Court of Appeals agrees to hear the appeal (the court has discretion). An appeal does not stay proceedings in the district court unless the district court judge or the Court of Appeals so orders it.

Answer 13

• Under the Restatement (Second) of Conflict of Laws, the laws of the state having the most significant relationship to the transaction and the parties will govern the action. Under this approach, courts consider various factors dependent on the type of action (i.e. torts) to determine the state that has the most significant relationship to the action.

Answer 14

• Under the governmental interest analysis approach, the court weighs the interests of the states involved. Specifically, the court (i) examines the connections that each state has to the parties and the events of the litigation, (ii) analyzes the difference between the state laws, (iii) pinpoints the underlying policies behind those state laws, and (iv) then applies the facts to the law to determine which state has a greater interest in having its law applied. • To determine which state has the greater interest, a threestep process is used: o Step 1: If the court finds that one state has an interest in the application of its policy based on the circumstances and the other state has none, it should apply the law of only the interested state. o Step 2: If the court finds an apparent conflict between the interests of the two states, it should reconsider to see if a more moderate and restrained interpretation of the policy or interest of one state may avoid the conflict. o Step 3: If, upon reconsideration, the court finds that a conflict between the legitimate interests of the two states is unavoidable (a true conflict), it should apply the law of the forum state. • This approach DOES NOT change depending on the type of action involved (i.e. contract, tort, property).

Answer 15

• Contractual Choice of Law Provision: o Parties to a contract are free to choose a particular state’s law to be applied for matters of contract construction. o For matters of contract validity, the parties may only choose which state’s law applies if: (1) the state has some connection with the contract; (2) the contract has not been entered into under fraud, duress, or mistake; AND (3) the choice of law isn’t contrary to a substantial policy interest of another state that has more of a significant interest in the matter. • No Valid Choice of Law Provision: If a valid choice of law provision is NOT applicable to a contract action, then the choice of law must be analyzed under one of the choice of law theories. o Under the traditional vested rights approach, the law where the contract (a) was formed, OR (b) is to be performed applies. o Under the most significant relationship approach of the Restatement (Second) Conflict of Laws, laws of the state having the most significant relationship to the transaction and parties will govern the action. A court must consider the following factors: (1) the place of contracting; (2) the place of negotiation of the contract; (3) the place of performance; (4) the location of the subject matter of the contract; and (5) the domicile, residence, nationality, place of incorporation, and place of business of the parties. The factors are weighed according to their relevance to the particular issue. o Under the interest analysis approach, the court weighs the interests of the states involved, and then applies the facts to the law to determine which state has a greater interest in having its law applied.

Answer 16

• Inheritance of Real Property: Under the Restatement (Second) of Conflict of Laws, the law of the state where the real property is located (the situs) governs its disposition under intestacy or under a last will and testament. o In a will, a decedent may designate a particular state’s law to be applied for matters of construction, BUT the validity and effect of a will is always determined by the law of the situs state. • Inheritance of Personal Property: The law of the decedent’s domicile state at the time of death governs the disposition of decedent’s personal property. Domicile is determined by a person’s: (1) residence (physical presence in the state); AND (2) subjective intent to make the state their permanent home.

Answer 17

• The validity of a marriage will be determined by the law of the state that has the most significant relationship to the spouses. A marriage that is valid where formed is valid everywhere, UNLESS it (1) violates the strong public policy of another state that (2) has the most significant relationship to the spouses and the marriage. • Most states will honor a valid common law marriage established in another state (even if not recognized within the state). Once established, a common law marriage is equivalent to a ceremonial marriage. However, a court may refuse to honor a common law marriage when the spouses and the marriage have limited contacts with the state where the common law marriage was allegedly established.

Answer 18

• A divorce (whether ex parte or bilateral) validly granted in another state is entitled to full faith and credit in all other states. An ex parte divorce (a divorce action where only one of the spouses is before the court) may be maintained without personal jurisdiction over the absentee spouse when the plaintiff-spouse is a domiciliary of the rendering state. The plaintiff-spouse’s status as a domiciliary gives the court subject matter jurisdiction over the marriage itself (the marital res). • In a matrimonial action involving economic or child custody/support issues (alimony, property distribution, child support and custody) the court MUST have personal jurisdiction over the defendant-spouse for the judgment to be entitled to full faith and credit in other states. o Under the Parental Kidnapping Prevention Act (PKPA), state courts MUST give full faith and credit to child custody decrees of other state courts when: (1) the issuing court had jurisdiction under the laws of the State; AND (2) the assertion of jurisdiction by that court was consistent with the jurisdictional requirements of the PKPA. Most states have adopted either the UCCJA or UCCJEA, which has substantially similar requirements as the PKPA. o Under the Uniform Interstate Family Support Act (UIFSA), state courts MUST give full faith and credit and enforce child support awards of other state courts when the issuing tribunal had jurisdiction. The UIFSA has been adopted by every state, and provides for registration of child support orders. Once registered, other states must recognize and enforce the order and cannot modify it.

Answer 19

• The Eleventh Amendment prohibits a party from suing a state or a state agency in federal court UNLESS: (a) the state explicitly consents to waive its Eleventh Amendment protections; (b) the suit pertains to federal laws adopted under Section 5 of the Fourteenth Amendment; (c) the suit seeks only injunctive relief against a state official for conduct that violates the Constitution or federal law; OR (d) the suit seeks money damages from a state official. • The Eleventh Amendment DOES NOT apply to: (a) local governments (counties, cities, towns); (b) federal suits brought by one state against another state; and (c) a suit by the federal government against a state. • The Supreme Court has held that Congress CANNOT abrogate state sovereign immunity EXCEPT for federal laws adopted under Section 5 of the Fourteenth Amendment. To determine whether Congress validly abrogated State immunity, two issues must be resolved: (1) whether Congress unequivocally expressed its intent to abrogate the immunity; AND (2) if it did, whether Congress acted pursuant to a valid grant of constitutional authority.

Answer 20

• Under the 10th Amendment, all powers NOT granted to the Federal government are reserved to the States (unless such powers are expressly prohibited by the Constitution). • Congress CANNOT compel state governments to implement legislation, BUT Congress may induce state government action by attaching restrictions and conditions on federal funding grants pursuant to its federal taxing and spending powers (Congress has the broad power to tax and spend for the general welfare). • The Supreme Court has held that the Federal Government may regulate state activities on the same terms as private actors so long as it does not seek to control or influence (commandeering) the manner in which States regulate private parties. A federal regulation CANNOT require the States in their sovereign capacity to regulate their own citizens, require the state legislature to enact any laws or regulations, or require state officials to assist in the enforcement of federal statutes regulating private individuals. A federal mandate requiring state personnel to alter their own activities is not an unconstitutional commandeering.

Answer 21

• A state or local government may regulate intrastate commerce, as long as Congress has not enacted laws on the subject matter. If Congress has enacted laws on a particular matter, any state or local laws would be pre- empted by federal law. • Notwithstanding the above, state and local governments generally CANNOT pass laws that: (a) discriminate against out-of-state commerce; OR (b) place an undue burden on interstate commerce. o Discriminatory Regulations: A law is deemed discriminatory when it is either (a) facially discriminatory, OR (b) the law has a discriminatory impact because it favors in-state commerce over out-of-state commerce. State and local laws that discriminate against out-of-state commerce are UNCONSTITUTIONAL, UNLESS: (a) the burden on interstate commerce is narrowly tailored to achieve a legitimate, non-protectionist state objective (there are no less-discriminatory alternatives available); OR (b) the state or local government is a “market participant” rather than a regulator of economic activity (a state may favor its own citizens regarding state programs, state businesses, or when it is the entity buying or selling goods). The Supreme Court has held that states CANNOT use discriminatory means to accomplish even a legitimate environmental purpose (i.e. prohibiting the disposal of out-of-state waste in-state). o Unduly Burdensome Regulations: State and local laws that are not discriminatory, but still place an undue burden on interstate commerce are UNCONSTITUTIONAL when (1) the burden on interstate commerce, (2) is clearly excessive to the putative benefits to the state/local government. Courts apply this balancing test on a case-by-case basis.

Answer 22

• When alleging a constitutional violation, a plaintiff MUST show that the violation is attributable to government action (also known as “state action”), which applies to ALL levels of local, state, and federal government. Generally, the conduct of private individuals or entities DO NOT constitute state action and is NOT protected by the U.S. Constitution. The Supreme Court has held that running a private school or college is not “state action,” even when said school is funded primarily by government funds. • Courts will find “state action” for private conduct when the conduct involves either: (a) a traditional public function – powers traditionally and exclusively reserved to the government; OR (b) when significant government involvement exists to authorize, encourage, or facilitate private conduct that is unconstitutional (i.e. government enforcement of certain private contracts, entanglement or joint action between a state and private actor, and encouragement of private discrimination). Examples of a traditional “public function” include holding elections and where a corporation operates a privately owned “company town” that provides typical services of the government.

Answer 23

• The Equal Protection Clause of the 14th Amendment (applicable to the States) and the 5th Amendment (applicable to the federal government) prohibits the government from denying citizens equal protection of the laws. • To determine if a discriminatory classification against a group of people exists, one of the following must be shown: (a) the law is discriminatory on its face; (b) the law is facially neutral, but is applied in a discriminatory manner; OR (c) a discriminatory motive, when the law is facially neutral but creates a disparate impact. • When the government makes laws that classify people into groups, the constitutionality of the law will be considered using one of three different levels of scrutiny: (a) Rational Basis; (b) Intermediate Scrutiny; OR (c) Strict Scrutiny. o Strict Scrutiny: The court will apply strict scrutiny when: (a) a classification is based on a suspect class (race, national origin, or alienage in some instances); OR (b) when the law infringes on a fundamental right for a class of people (i.e. right to vote, exercise of religion, have access to the courts, and interstate travel). Alienage (legal non-citizen status) is generally a suspect class only when a State is involved (as Congress has power over aliens under the Constitution). A State may limit a non-citizen’s participation in a function of the government, which is subject to rational basis review.  Under strict scrutiny, the government must show that the classification is necessary to serve a compelling government interest. o Intermediate Scrutiny: When a classification is based on a quasi-suspect class (gender/sex, nonmarital children, and most likely sexual orientation/ gender identity), the court will apply intermediate scrutiny.  Under intermediate scrutiny, the government must show that the classification is substantially related to an important government interest (the interest MUST be the government’s actual interest in passing the law).  The Supreme Court has held that a State may treat men and women differently and provide separate facilities (bathroom facilities, separate sports teams), BUT the State must demonstrate: (1) an exceedingly persuasive justification for separate treatment; AND (2) that the facilities are substantially equivalent. In addition, a State can use a compensatory purpose to justify an otherwise discriminatory classification but only if members of the gender benefited by the classification actually suffer a disadvantage related to it.  The standard to use for a classification based upon a person’s sexual orientation or gender identity is unresolved. In past cases, the Supreme Court has used a rational basis standard. However, recently in Bostock v. Clayton County (2020), the Supreme Court ruled that the Title VII of the Civil Rights Act prohibition of employment discrimination “because of sex” protects gay, lesbian, and transgender individuals. This decision likely means that discrimination based upon sexual orientation or gender identity is subject to Intermediate Scrutiny, as the Supreme Court has used Intermediate Scrutiny in past cases for “sex” classifications. o Rational Basis: For all other classes (age, disability, wealth, undocumented aliens), the court will apply the rational basis test.  Under rational basis, the plaintiff must show that the classification is NOT rationally related to any legitimate government interest (any conceivable interest is sufficient, even if it is not the government’s actual interest in passing the law).

Answer 24

• Under the Takings Clause of the 5th Amendment, the government may take private property for public use if it provides just compensation. o A taking is deemed for public use when it is rationally related to a conceivable public purpose (public-purpose test). The right to compensation is triggered even when a third-party (not the government) is given the right to occupy the property by the government taking. The Supreme Court has held that the government MAY transfer property from one private party to another if it’s for future public use and that’s the purpose of the taking. Public purposes may include public safety, public health, morality, peace and quiet, law and order, economic interests, or aesthetic values. o Just compensation is measured by the fair market value of the property to the owner AT THE TIME OF the taking (relocation/moving costs are not included). • Two types of takings exist: • Possessory (per se) takings occur when the government physically takes or occupies the property, even if it’s just a small portion of the property. The physical invasion or appropriation must be permanent. • Regulatory takings occur when the regulation (e.g. zoning ordinance) goes “too far.” The Supreme Court has divided regulatory takings into three categories. o Depriving Owner of All Economically Viable Use (a per se taking): A regulation that completely deprives an owner of all economically beneficial use of her property is a per se taking. The government MUST pay just compensation for such “total regulatory takings,” UNLESS nuisance and property law independently restrict the owner’s intended use of the property. o Penn-Central Taking: Courts will determine whether a regulatory taking occurred by balancing private and community interests under the three Penn Central factors: (1) the economic impact of the regulation on the claimant; (2) the extent of interference with distinct investment-backed expectations (the owner’s primary expectation of use for the property); AND (3) the character of the governmental action  The Supreme Court in Penn Central recognized that the government may execute laws and programs that adversely affect recognized economic values in a wide variety of contexts. The Court has upheld land-use regulations (i.e. zoning laws) that destroyed or adversely affected recognized real property interests in instances where the government reasonably concluded that the health, safety, morals, or general welfare would be promoted by prohibiting particular contemplated uses of land. o Conditions on Approval of a Permit (a.k.a. LandUse Exaction): Conditions placed on the approval of permits DO NOT constitute an uncompensated taking under the 5th Amendment if: (1) there is an essential nexus between the state interest and the permit condition – the exaction (easement demanded) would substantially advance the same government interest that would furnish a valid ground for denial of the permit; AND (2) the government makes an individualized determination that the condition is roughly proportional (in nature and extent) to advancing that state interest.  The Supreme Court has found the required nexus between a conditioned easement (bike path) and a city’s attempt to reduce traffic congestion by providing for alternative means for transportation.

Answer 25

• The 1st Amendment protects the right to freedom of speech and expressive activities that constitute speech, and is applicable to both state/local governments (by incorporation through the 14th Amendment) and the federal government. However, conduct that has no communicative value (i.e. trespass) DOES NOT fall within the protection of the 1st Amendment, and thus can be regulated by the government. • The conduct of speech and assembly in public spaces CAN be regulated by the government in certain instances depending on the type of forum. • A public forum is one that has traditionally been available to the public for free speech (i.e. public sidewalks, parks, and streets). o Content-Based Restrictions: The government CANNOT regulate speech in public forums based on content UNLESS it satisfies strict scrutiny.  Under strict scrutiny, the government must show: (1) that the regulation is narrowly tailored to achieve a compelling government interest; AND (2) it used the least restrictive means to accomplish its purpose. o Content-Neutral Restrictions: However, the government MAY regulate the time, place, and manner of content-neutral speech in public forums if the regulation satisfies intermediate scrutiny.  Under intermediate scrutiny, the government must show the regulation: (1) is narrowly tailored to achieve a significant government interest; AND (2) leaves open alternative channels of communication. The regulation DOES NOT need to be the least restrictive means. o The Supreme Court has held that a government interest in keeping streets clean and of good appearance is insufficient when striking down an anti-leafletting ordinance that restricted speech. Thus, anti-littering laws that suppress speech are likely unconstitutional. • A designated public forum is one that has not traditionally been available to the public for free speech, but that the government chooses to make available (i.e. where a school makes classrooms available for club meetings). Designated public forums are treated the same as public forums. The government MAY remove the designation, in which the place would become a non-public forum. • Limited public forums are non-public forums that have been specifically designated by the government as open to certain groups or topics (i.e. municipal meeting rooms). Limited public forums are treated the same as non- public forums. • Non-public forums are other public places that have traditionally been limited for free speech (i.e. schools, military bases, jails, inside of courthouses, and airports). The government may regulate speech in non-public forums if the regulation is: (1) reasonable; AND (2) viewpoint neutral. • Private property: Generally, a person DOES NOT have the right to access another’s private property (i.e. a shopping center) to deliver the speech or expressive conduct. • Religious Speech & Public Forums: o If a school opens itself as a limited public forum, then it CANNOT deny access based upon the religious content of speech (i.e. a religious club). The Supreme Court has held that in a public forum, religious speech is treated equal to non-religious speech, and content-neutral access rules do not violate the Establishment Clause. • Licensing Requirements: o Licensing requirements are permitted if: (1) the government has an important reason for licensing; (2) specific, articulated standards are used to grant the licenses to remove discretion of the licensing body; AND (3) procedural safeguards are in place, including assuring a prompt final judicial decision when a license is denied.

Answer 26

• Article 2 of the Uniform Commercial Code (UCC) governs all contracts for the sale of goods. Goods are defined as all things that are movable at the time of identification to the contract (other than the money), including crops and the unborn young of animals. Under the UCC, Common Law principles continue to apply, unless the UCC specifically displaces them. • A contract for the sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.

Answer 27

• Article 2 of the Uniform Commercial Code (UCC) governs all contracts for the sale of goods (goods are all things that are movable at the time of identification to the contract, other than the money). The Common Law governs all other contracts (i.e. service or construction contracts). • For mixed contracts, the predominant purpose of the contract determines which law governs. If the predominant purpose is the sale of goods, the UCC will apply. If the predominant purpose of the contract is for services, the common law will apply. In some states, when a contract divides payment between services and goods, the UCC is applied to the goods section and the common law is applied to the services section.

Answer 28

• Mutual assent to enter into a contract requires: (1) an offer by one party; AND (2) acceptance of that offer by the other party. o An offer is (1) a manifestation of present intent to contract by one party, (2) with definite and reasonably certain terms, (3) that is communicated to an identified offeree. o Acceptance is a manifestation of assent to the terms of the offer, which indicates a commitment to be bound. Silence generally DOES NOT manifest acceptance, but performance may be adequate. For bilateral contracts, the start of performance manifests acceptance. For unilateral contracts, the start of performance only makes an offer irrevocable, and the offer is accepted only when performance is complete. • Offers can be terminated before acceptance by: (a) revocation by the offeror; (b) rejection or counter-offer by the offeree; (c) lapse of time – the time for acceptance expires after the time limit stated or a reasonable time (if no time limit was stated); (d) death or incapacity of either party; OR (e) supervening illegality – when the proposed contract becomes illegal after the offer is made. • Most offers may be revoked at any time before acceptance through unambiguous words or conduct by the offeror to the offeree indicating an unwillingness or inability to contract. A revocation of an offer is effective when received. An offer can also be terminated when communicated indirectly – when (1) the offeror takes definite action inconsistent with an intention to enter into the proposed contract; AND (2) the offeree acquires reliable information to that effect. • However, some offers are irrevocable including: (1) Option contracts (when consideration is given for a promise to keep an offer open); (2) a Merchant’s firm offer; (3) Offers that were relied on to the offeree’s detriment; AND (4) the start of performance on a unilateral contract, which makes the offer irrevocable for a reasonable time to complete performance (mere preparation is insufficient). o A Merchant’s Firm Offer is: (1) an offer to buy or sell goods; (2) by a merchant (a person who deals in goods of the kind); (3) in a signed writing; (4) which states that the offer will be held open and is not revocable during the time stated (or if no time is stated for a reasonable time), but not to exceed three months; AND (5) that the assurance to keep the offer open must be separately signed by the offeror if the form is supplied by the offeree (such as initialing the specific paragraph). A merchant’s firm offer is enforceable without consideration. • A rejection of an offer is the manifestation of intent to not accept an offer (through words or conduct), which thereby terminates the offer. A rejection is effective upon receipt by the offeror (when it comes into the possession of the person). Unless there is an agreement to the contrary or a renewal of the offer, an offer CANNOT be accepted after it is rejected. • A counteroffer (an offer with new terms) constitutes BOTH a rejection that terminates the original offer AND a new offer. A question or request for unspecified changed terms (when no substitute terms are offered) is NOT a counteroffer, and still allows for acceptance of the offer.

Answer 29

• Unless the offeror states otherwise, acceptance of an offer is deemed accepted once the acceptance is sent or communicated (i.e. placed in the mail). However, revocation of an offer is deemed effective when received by the offeree. A communication is received when it comes into the possession of that person. An offer CANNOT be accepted after it is revoked (unless there is an agreement to the contrary). However, once a valid contract has been created by acceptance of the offer, revocation is no longer possible. • Under the Mailbox Rule, if the offeror mails a letter to the offeree revoking the offer, but the offeree sends a letter to the offeror accepting the offer before receiving the revocation letter, a valid contract has been created. This is because the acceptance was effective before the revocation became effective. This rule DOES NOT apply to option deadlines (when an offer is only open until a certain date or time).

Answer 30

• Contracts are NOT enforceable without consideration by BOTH parties. Consideration is a bargained for exchange of a promise for a return promise or performance that benefits the promisor or causes detriment to the promisee. For example, the money paid for goods is consideration for the seller, and the goods sold is consideration for the buyer. Generally, past or moral consideration is NOT sufficient to support a contract. • An illusory contract is invalid, and occurs where one party has no obligation to perform (thus adequate consideration is not given by both parties). • The Restatement (Second) of Contracts recognizes three exceptions when a contract will be enforced even if it lacks consideration: o The Material Benefit Rule, which provides that a promise made in recognition of a benefit previously received by the promisor from the promisee is binding (even without consideration) to the extent necessary to prevent injustice. Examples include a promise to correct a mistake or providing emergency services or necessities. BUT, the material benefit rule DOES NOT apply when: (a) the benefit was conferred as a gift; OR (b) the value of the promise is disproportional to the benefit conferred. o Promissory Estoppel/Detrimental Reliance: Contracts that lack consideration may be enforced to avoid injustice under the doctrine of promissory estoppel. Promissory estoppel applies when: (1) a party reasonably and foreseeably relied to his detriment on the promise of the other party; (2) the promisor should have reasonably expected a change in position in reliance of the promise; AND (3) enforcement of the promise is necessary to avoid injustice. o A Promise to Pay a Non-Legally Enforceable Past Debt is binding without new consideration (most states require a signed writing, but the Restatement Second does not have a writing requirement).

Answer 31

• Under Common Law, contract modifications MUST be supported by consideration. When modifying an agreement, past performance or performance of a preexisting duty owed to a party is NOT treated as adequate consideration. However, several exceptions exist: (1) an addition or change in the performance or promise; (2) unforeseen circumstances – a fair and equitable modification due to unanticipated changed circumstances and the contract is NOT yet fully performed by either party (usually the unanticipated circumstances must be severe or far beyond what was foreseen); OR (3) a third-party promise – when the duty was owed to a third-person, not the promisor. • Under the UCC, there is NO consideration requirement for contract modifications made in good faith. However, modifications must be in writing if: (a) they fall within the Statute of Frauds; OR (b) the original contract states that modifications must be made in writing. Good faith means honesty in fact and the observance of reasonable commercial standards of fair dealing.

Answer 32

• Contracts Requiring a Signed Writing: Under the Statute of Frauds, the following contracts are not valid UNLESS they are in a writing signed by the party to be charged: (1) Marriage contracts – a promise in consideration of marriage; (2) Suretyships (where a guarantor promises to take on the debt of another if that person fails to pay) unless the main purpose exception applies (the surety’s main purpose in making the promise was to benefit himself); (3) Contracts that Cannot be fully performed in 1 year from the date the contract is entered into (there must be no possible way the contract can be performed within 1 year); (4) Contracts for the Sale of real property or creating an interest in real property (e.g. easements over 1 year, leases over 1 year, mortgages, fixtures); (5) Promises to pay an estate’s debt from the personal funds of the Executor/ Administrator; AND (6) Contracts for the Sale of goods for $500 or more. • UCC Contracts for the Sale of Goods & Exceptions: o Under Article 2 of the UCC, all contracts for the sale of goods for $500 or more MUST be in writing. The writing must state the parties, the quantity and nature of the goods, and be signed by the party to be charged. o However, four exceptions exist: (1) Merchant’s Confirmatory Memorandum – In a sale of goods contract between two merchants (two people dealing in goods of the kind), a writing that confirms an agreement is sufficient if it is signed by the party enforcing it (not the party whom it is enforced against), as long as the party against whom it is enforced did not promptly object within 10-days after receipt; (2) Goods Accepted or Paid For – A seller may enforce the contract price of any goods accepted or paid for by the buyer, but NOT the whole contract price if only a portion of the total quantity of goods to the contract are accepted; (3) Custom Made Goods – A seller may enforce the contract price for custom made goods, which are goods in which the seller has made a substantial start AND are not suitable for sale in the ordinary course of the seller’s business; (4) Admission During Judicial Proceeding – A sale of goods contract for $500 or more is enforceable without a writing when the party to be charged admits that there was a contract during a judicial proceeding (i.e. in a deposition or courtroom testimony). • Common Law Exceptions to Statute of Frauds: Under the Common Law, a contract that violates the statute of frauds may still be enforceable in the following situations: (1) Full Performance; (2) Partial Performance in Land Contracts – partial performance is allowed in land sale contracts if a party has done at least two of the following: (i) made a payment for land; (ii) took possession of land; (iii) made valuable improvements to land); (3) Judicial Acknowledgement – the party admits to the agreement in pleadings or testimony; (4) Estoppel – reasonable and foreseeable detrimental reliance on a promise (only some jurisdictions allow the doctrine of estoppel to be used in order to circumvent the statute of frauds). • Satisfying the Writing Requirement: In order to satisfy the Statute of Frauds, a writing MUST: (1) be signed by (or on behalf of) the party to be charged; (2) reasonably identify the subject matter of the contract; (3) indicate that a contract has been made by the parties; AND (4) state the essential terms with reasonable certainty. The writing may be formal or informal, including a written contract, will, notation on a check, receipt, pleading, informal letter, or an electronic communication (i.e. email). The statute of frauds DOES NOT require that an agreement be contained in one signed document; it may consist of several writings if (i) one of the writings is signed and (ii) the writings clearly indicate that they relate to the same transaction. Signed means using any symbol with the intent to adopt or accept a writing, including: a written or typed name; initials; electronic signature; or a symbol found in a billhead or letterhead (when the UCC applies). Under the UCC, a writing is not insufficient because it omits or incorrectly states a term agreed upon, BUT the contract is not enforceable beyond the quantity of goods shown in such writing.

Answer 33

• Under the Parol Evidence Rule, a binding integrated agreement discharges prior agreements to the extent that it is inconsistent with them. As such, a party CANNOT introduce evidence of a prior or contemporaneous agreement (either oral or written) that contradicts a later writing. • However, there are four exceptions where a court will permit such evidence: (1) to correct a clerical error or typo; (2) to establish a defense against formation (that the contract wasn’t valid in the first instance); (3) to interpret vague or ambiguous terms, but courts will interpret words to represent their ordinary or plain meaning (the plain meaning rule); and (4) to supplement a partially integrated writing. The Parol Evidence Rule DOES NOT apply to subsequent agreements. • A partially integrated writing DOES NOT contain a complete statement of all the terms the parties agreed to. As such, proof of additional terms is allowed if the terms DO NOT contradict the writing. Under the UCC, ALL writings are presumed to be partial integrations, unless the writing is fully integrated. • A fully integrated writing is a complete and exclusive statement of the terms, and discharges prior agreements to the extent that they are within its scope. • A merger clause is evidence that the writing is complete on its face (fully integrated) and cannot be supplemented with additional consistent terms. The absence of a merger clause is evidence that the agreement was NOT meant to be a complete/full integration of the agreement (but it’s not determinative). If a merger clause is not included, an agreement will NOT be found to be completely integrated if the item or term might naturally have been omitted from the writing.

Answer 34

• Under the Common Law, a material breach will excuse the non-breaching party’s performance. A minor breach, however, will NOT excuse performance, and the nonbreaching party must still perform (though he may bring a separate action for damages resulting from the breach). A material breach occurs when a party DOES NOT render substantial performance (the party did not perform major parts of the contract). • To determine whether a breach is material, courts will consider: (1) the extent of the benefit deprived to the injured party (what was the extent of performance); (2) the adequacy of compensation for loss to the non-breaching party; (3) the extent the breaching party will suffer forfeiture (hardship); (4) the likelihood that the breaching party will cure; and (5) absence of good faith or fair dealing by the breaching party (was the breach intentional, negligent, or innocent). • Intentional Breach (a.k.a. Willful Breach): Courts are split on the effect of an intentional breach by a party. Some courts have held that substantial performance CANNOT occur if an intentional breach exists (regardless of the breach’s impact). Other courts have held that an intentional breach is just a factor to be considered and does not automatically defeat recovery. • Unless the agreement provides otherwise, the work must be substantially performed before payment can be demanded.

Answer 35

• Acceptance of goods occurs when the buyer: (a) after a reasonable opportunity to inspect the goods, signifies to the seller that the goods are conforming or that he will take/ retain them despite the non-conformity; (b) fails to reject the goods after a reasonable opportunity to inspect them; OR (c) does any act inconsistent with the seller’s ownership of the goods. Acceptance of a part of any commercial unit is acceptance of that entire unit. • The buyer is obligated to pay for the purchase once acceptance occurs (unless a revocation of acceptance is allowed), but may still sue for breach of contract if the buyer notifies the seller of the breach within a reasonable time. • After the acceptance of goods, a buyer may later revoke that acceptance only if: (1) the nonconformity substantially impairs the value of the goods; AND (2) either (a) the defect was difficult to discover (a latent defect), (b) acceptance was reasonably induced by the seller’s assurances, or (c) the buyer accepted the goods on the reasonable assumption the defect would be cured. Revocation of acceptance MUST occur within a reasonable time after the buyer discovers or should have discovered the nonconformity. The revocation is NOT effective until the buyer notifies the seller. In addition, the revocation of acceptance must occur before there is any substantial change in the goods, not caused by their own defects. If a buyer successfully revokes acceptance, he is entitled to return of the purchase price. A buyer who revokes acceptance has the same rights and duties with regard to the goods involved as if he had rejected them.

Answer 36

• Generally, a party must wait for the other party to breach before bringing an action to demand performance or for damages. However, a non-breaching party may seek damages before the time of performance is due if there is an anticipatory repudiation by the other party. An anticipatory repudiation occurs when a party unequivocally communicates that he is unable or unwilling to perform. • A party that anticipatorily breaches a contract may retract its repudiation and restore the contract UNLESS the aggrieved party has: (a) cancelled; (b) materially changed his position; OR (c) indicated that he considers the repudiation final. • In addition, a party with reasonable grounds for being insecure about the other party’s performance may demand in writing adequate assurances from the other party that it will perform in accordance with the contract. If a party DOES NOT give adequate assurances after it is asked to do so, the asking party may treat that as an anticipatory repudiation. • When an anticipatory repudiation occurs, the non-breaching party may do any of the following: (a) treat the contract as repudiated and sue for damages; (b) treat the contract as discharged; (c) wait until performance is due and sue when performance does not occur; OR (d) urge the party to perform.

Answer 37

• Under the UCC, warranty of title is implied in all sales of goods contracts, and includes the following warranties: (1) the title conveyed shall be good, and its transfer rightful; AND (2) the goods shall be delivered free from any security interest or other lien or encumbrance, unless the buyer has knowledge of the same. • A seller who does not have title to goods generally CANNOT transfer title to a buyer. HOWEVER, if the true owner entrusts the possession of goods to a merchant (one who deals in goods of that kind), then the merchant has the power to transfer all rights the owner had to a buyer in the ordinary course of business. • The implied warranty of title may be expressly disclaimed by specific language or by circumstances that puts the buyer on notice that the seller does not claim title.

Answer 38

• The general measure of damages for a breach of contract are expectation damages. Expectation damages arise directly from the breach, and are an attempt to put the non-breaching party in the same position it would have been in but for the breach. To recover, the damages must be: (1) caused by the defendant (actual cause); (2) foreseeable (proximate cause); (3) certain (damages cannot be speculative); AND (4) unavoidable (the plaintiff must take reasonable steps to mitigate his losses). An award of damages must account and deduct for any costs the injured party avoided because of the breach.

Answer 39

• Consequential damages arise indirectly from the breach, and are awarded because of the injured party’s special circumstances (e.g. lost profits). • To recover, the damages MUST be: (1) reasonably foreseeable at the time of contract formation; (2) arise from the plaintiff’s special circumstances that the defendant knew or had reason to know of; AND (3) reasonably certain (the damages cannot be speculative). An award of damages must account for and deduct for any costs the injured party avoided because of the breach. • Consequential damages MAY be limited or excluded by agreement unless the limitation/exclusion is unconscionable.

Answer 40

• Seller’s Remedies: Under Article 2 of the UCC, when a buyer breaches a contract for the sale of goods, the seller has the following remedies: (a) withhold delivery of the goods; (b) cancel; (c) recover cover damages (the difference between the resale price and the contract price of the goods), which is used if the resale was made in good faith and in a commercially reasonable manner.; (d) recover market damages (the difference between the market price at the time and place for tender); (e) recover lost profits if the seller is a lost volume seller (a seller who regularly engages in the sale of the goods at issue and has unlimited inventory); (f) stop delivery of goods in the possession of a carrier or bailee when he discovers the buyer to be insolvent; (g) stop delivery of carload, truckload, planeload, or larger shipments of goods when the buyer breaches; OR (h) replevy identified goods in certain instances when the buyer is insolvent. • Incidental Damages: A seller is also entitled to recover incidental damages, which include any commercially reasonable costs incurred resulting from the breach. • Seller’s Right to Replevy Identified Goods: Under Article 2 of the UCC, an unpaid seller generally has no right to repossess (replevy) goods that he sent to a buyer. However, a seller of goods may repossess the goods he sent to a buyer if: (1) the buyer was insolvent when it received the goods; (2) the seller makes a demand within 10 days after the buyer received the goods; AND (3) the goods were not sold to a good faith purchaser for value. HOWEVER, if a misrepresentation of solvency had been made to the seller in writing within three months prior to the delivery of the goods, the 10-day limitation to make a demand no longer applies.

Answer 41

• Under the UCC, a buyer who (a) never received the goods – the seller repudiates or fails to make delivery, (b) rightfully rejected non-conforming goods, OR (c) justifiably revoked acceptance of the goods MAY: o (1) cancel the contract; o (2) recover any amount paid (a refund) – even if buyer doesn’t cancel the contract; o (3) recover either Cover Damages or Market Damages; AND o (4) recover Incidental and Consequential damages. • If the buyer keeps the non-conforming goods, then the buyer is entitled to Loss-in-Value Damages – measured by the difference between the value as promised and the value of the non-conforming goods. • Cover Damages are the difference between the contract price and the price of substitute goods. This is used as the measure of damages if the buyer covered in good faith. • Market Damages are used if the buyer did not cover in good faith or did not cover at all, and are the difference between the market price (at the time when buyer learned of the breach) and the contract price. Market price is determined as of (a) the place for tender, or (b) the place of arrival in cases of rejection after arrival or revocation of acceptance.

Answer 42

• Where a contractor’s performance has been incomplete or defective for a construction contract, the usual measure of damages is the reasonable cost of replacement or completion (expectation damages). • However, when an award for the cost of completion is wasteful, a court may apply the waste doctrine, wherein the measure of damages becomes the difference in value of the property/land (diminution in value). The waste doctrine will apply if: (1) the contractor performs in good faith but defects nevertheless exist; AND (2) remedying the defects would entail economic waste (when the cost of completion greatly exceeds the value of the completed work). In such instance, diminution in value becomes the proper measure of damages. • If the breach is willful and only completion of the contract will enable the non-breaching party to use the land for its intended purposes, the cost of completion is considered the appropriate damage award.

Answer 43

• Restitution (also referred to as unjust enrichment or quantum meruit) is awarded to prevent unjust enrichment, and is available when one party confers a benefit onto another party (even if there is no enforceable contract). Damages will be awarded based on the value of the benefit conferred upon the defendant. A party CANNOT recover both expectation and restitution damages. • Under the Restatement (Second) of Contracts, a party is entitled to restitution for any benefit that he has conferred by way of part performance in excess of the loss that he has caused by his own breach.

Answer 44

• A plaintiff CANNOT recover damages as a result of a breach that could have been avoided. Accordingly, a party must take reasonable steps to mitigate his losses. If he fails to do so, the court will reduce the total damages by the amount that could have been avoided. • Once a party has reason to know that performance by the other party will not be forthcoming, he is ordinarily expected to stop his own performance to avoid further expenditure. • Affirmative steps to avoid loss are NOT required if they involve undue risk, burden, or humiliation. • Suitable Substitute: Whether an available alternative transaction is a suitable substitute depends on all the circumstances, including the similarity of performance.

Answer 45

— Causation requires both: (1) actual causation (also called cause-in-fact or “but for” causation); AND (2) proximate cause. Actual causation is present when the result (i.e. injury) would not have occurred “but-for” the defendant’s conduct. Proximate cause requires asking if it was foreseeable that the injury would have resulted from the defendant’s physical act (was it a natural and probable consequence). — A Superseding Intervening Cause is a third party’s act that breaks the chain of causation, which normally cuts off the defendant’s liability. However, a third party’s act will only break the chain if the intervening force was: (1) independent of the defendant’s wrongful conduct; AND (2) not foreseeable (it was so out-of-the-ordinary that it is not fair to hold the defendant criminally responsible). — Under the Simultaneous Acts Rule, a person’s act will still be the proximate cause of a resulting injury if his wrongful conduct created a condition of peril, even if later negligent events combined to cause the injury (so long as the later events are foreseeable). Similarly, a defendant’s wrongful act that accelerates death is still the legal cause of death, even if the person was going to die eventually.

Answer 46

• The Mental State (the mens rea or intent element) is explicitly stated in the statute for the specific crime the defendant is charged with. • Under the Common Law four mental state categories were used: Specific Intent (intent or desire to engage in the conduct or cause a certain result); General Intent (awareness of acting a certain way); Malice (reckless disregard of a known risk that harm may occur); and Strict Liability (no mental state is required, only that the act occurs). A mistake of fact is generally NOT a defense to strict liability crimes. • The Model Penal Code (MPC) applies the following categories of intent to crimes: o A person acts purposefully if it’s his conscious object to engage in the conduct or cause a certain result. o A person acts knowingly if he is aware that his conduct is of a particular nature or will cause a certain result to occur. o A person acts recklessly if: (1) he consciously disregards a substantial and unjustifiable risk that a certain result would occur; AND (2) the action is a gross deviation from how a reasonable law-abiding person would act. A person who creates such a risk, but is unaware of it solely because of voluntary intoxication, also acts recklessly. o A person acts with criminal negligence if: (1) he should have been aware of a substantial and unjustifiable risk; AND (2) that failure to perceive the risk is a gross deviation from what a reasonable prudent person would observe in similar circumstances. • A majority of states use the Willful Blindness Standard, wherein a person can be deemed to act knowingly when he: (a) is aware that certain facts are highly probable; OR (b) is intentionally ignorant to certain facts. A minority of jurisdictions reject the willful blindness standard, and require actual knowledge. In such a jurisdiction, knowledge may be proved by circumstantial evidence.

Answer 47

• Under the Common Law, murder is the unlawful killing of a person with malice aforethought. Malice aforethought is established upon a showing of: (a) an intent to kill; (b) an intent to inflict great bodily injury; (c) a reckless disregard of an extreme risk to human life (depraved-heart murder), such as shooting a gun in a crowded room; OR (d) an intent to commit an inherently dangerous felony under the Felony Murder Rule (e.g. murder, manslaughter, rape, robbery, arson, kidnapping, battery). Murder may be reduced to Voluntary Manslaughter if there was adequate provocation. • Under the Felony Murder Rule, jurisdictions use two main approaches to determine if the crime was an inherently dangerous felony: (a) Facts-of-the-Case Rule – Most jurisdictions examine the particular facts of the case; or (b) In- the-Abstract Rule – Some jurisdictions consider only the elements of the underlying crime in the abstract (ignoring the specific facts of the case). • Some jurisdictions divide murder into degrees. In these jurisdictions, second-degree murder is the (1) unlawful killing, (2) of a person, (3) with malice aforethought. First degree murder occurs when the killing was: (1) willful – a specific intent to kill; (2) deliberate – acting with a cool mind that is capable of reflection; AND (3) premeditated – to think about beforehand (most jurisdictions require a period of time for prior consideration, while other jurisdictions only require a brief moment of thought). • Under the Model Penal Code (MPC), murder is a killing of a person, committed: (a) purposely or knowingly; OR (b) recklessly under circumstances manifesting an extreme indifference to the value of human life. Under the Felony Murder Rule, such recklessness and indifference are presumed if the killing occurred during the commission of or attempt to commit a dangerous felony (robbery, rape, arson, burglary, kidnapping) or felony escape. • Reckless driving alone usually DOES NOT constitute a depraved-heart murder, unless it was combined with other aggravating factors (i.e. intoxication).

Answer 48

• Voluntary manslaughter is an intentional killing of a person without malice aforethought (there was an adequate provocation). An adequate provocation reduces the murder charge to manslaughter. o Adequate provocation is established if: (1) the defendant was provoked (a sudden and intense passion caused him to lose control); (2) a reasonable person would have been provoked; (3) there was not enough time to cool off before the killing; AND (4) the defendant did not cool off before the killing. o In most jurisdictions, the adequacy of provocation is based on the defendant’s reasonable beliefs. o Adequate provocation has been found in the following situations: (i) spousal adultery, (ii) mutual combat, (iii) serious assault or injury to a friend/ relative, and (iv) unlawful arrest. The Defendant must observe or be in the vicinity of the act. Words alone are typically insufficient. • Involuntary manslaughter is an unintentional killing of a person committed: (a) recklessly (conscious disregard of an unreasonable risk of death or serious bodily injury); (b) under the misdemeanor-murder rule (a killing that results during the commission of a misdemeanor); OR (c) during a non-dangerous felony (a felony not included under the felony murder rule). In some jurisdictions, involuntary manslaughter may result from criminal negligence: (1) the defendant knew or should have known that his conduct had a high or unreasonable risk of death, and (2) his actions were a gross deviation from how a reasonable person would have acted. • Under the Model Penal Code (MPC), manslaughter is a killing of a person: (a) committed recklessly (conscious disregard of a substantial and unjustifiable risk of death or great bodily injury); OR (b) which would otherwise be murder, but is committed under the influence of extreme mental or emotional disturbance for which there is reasonable explanation or excuse. The MPC does not distinguish between voluntary and involuntary manslaughter.

Answer 49

• Theft crimes include the common law crimes of larceny, false pretenses, and embezzlement. o Larceny is the (1) trespassory taking – taking with no belief of a legal right, (2) and carrying away, (3) of the personal property of another, (4) with the intent to permanently deprive the owner of the property. The intent to permanently deprive MUST exist at the time of the taking. Larceny by trick occurs when one obtains possession (not title) of the personal property of another by trick or deception. o False Pretenses occurs when one (1) obtains title, (2) to personal property of another, (3) through a known false statement of material fact, (4) with intent to defraud. An opinion or commercial puffery is generally NOT considered to be false pretenses. o Embezzlement is (1) the fraudulent or wrongful, (2) conversion, (3) of personal property of another, (4) by a person with lawful possession of the property. Intent to permanently deprive the lawful owner of the property is required. • Receiving Stolen Property is a crime when a person (1) receives possession of stolen property, (2) who knows the property is stolen at the time of receiving it, (3) with the intent to permanently deprive the owner of the property. • Criminal Possession of Stolen Property occurs when a person: (1) possesses property; (2) that they know or reasonably should know is stolen; (3) with intent to either (a) benefit that person (or a person other than an owner of the property), or (b) impede the recovery by an owner. • Under the modern view, knowledge that the property is stolen can be inferred from all surrounding circumstances. In some jurisdictions, proof of actual subjective knowledge is required.

Answer 50

• Robbery is the (1) trespassory taking and carrying away, (2) of the personal property of another person, (3) in their presence, (4) by the use of force or threat of immediate physical harm, (5) with the intent to permanently deprive the owner of the property. Armed robbery requires the elements above plus the use of a dangerous weapon (i.e. gun, knife).

Answer 51

• Burglary is (1) the breaking and entering (entry without consent, through an unlocked door/window, or even partial entry is sufficient), (2) of a dwelling, (3) of another, (4) at night, (5) for the purpose of committing a felony inside. Most jurisdictions have extended burglary to include any structure at any time.

Answer 52

• A defense of insanity for a severe mental defect or disease will be analyzed under one of four tests, all of which consider the defendant’s mental state at the time of the offense: o The M’Naghten Test: (1) A mental disease or defect that (2) resulted in the defendant being: (a) unable to know the wrongfulness of his conduct; OR (b) unable to understand the nature and quality of his acts. Some states have defined wrongful as a legal wrong (that the act was criminal), while other states define wrongful as morally wrong (an act condemned by society). o The Model Penal Code Test: As a result of a mental disease or defect, the defendant was: (a) unable to appreciate the criminality of his conduct; OR (b) unable to conform his actions to the law. o The Irresistible Impulse Test: The defendant’s mental illness made him: (a) unable to control his actions; OR (b) unable to conform his actions to the law. o The Durham Test: The defendant must show that his unlawful conduct was the product of mental illness. • A defendant will be acquitted of the crime if he meets the applicable insanity test of the jurisdiction. Most states use either the M’Naghten or the Model Penal Code test. • Most states require the defendant to prove insanity by the preponderance of the evidence (or by clear and convincing evidence in federal court). However, some states require the prosecution to prove that the defendant was not insane beyond a reasonable doubt.

Answer 53

• Self-defense is a complete defense to a crime. o The use of non-deadly force is justified when (1) the defendant reasonably believes, (2) that he is in imminent danger of being harmed, AND (3) the amount of force used is proportional to the physical harm threatened (the force used must be reasonably related to the threatened harm which defendant seeks to avoid). o The use of deadly force is justified when (1) the defendant kills another based on a reasonable belief, (2) that he was in imminent danger of being killed or suffering great bodily injury, AND (3) the use of deadly force was necessary to defend against the danger. • In a minority of jurisdictions, there is a duty to retreat before deadly force may be used. In those jurisdictions, the defendant must show that: (a) there was no opportunity to retreat; OR (b) retreat could not have been accomplished safely. There is NO duty to retreat if the defendant was attacked in her own home. • An aggressor (the person who starts the altercation) may only use force in self-defense if: (a) he withdraws from the altercation and communicates such intent; OR (b) the other person suddenly escalates the fight with deadly force and withdrawal is not possible. • The same rules for self-defense apply to the defense of others. Most jurisdictions use two rules evaluate a defense of others. o Steps-into-the-Shoes Rule – Defendant steps into the shoes of the person being attacked, and MAY use force if the person being attacked could have acted in self-defense. o Reasonable-Appearance Rule – Defendant can use force if he reasonably (but mistakenly) believed the person being attacked had the right to act in selfdefense. • Imperfect self-defense is a mitigating defense to murder that can reduce a murder charge to voluntary manslaughter. Imperfect self-defense is applicable when the defendant kills another based on a good faith belief that (1) she was in imminent danger of being killed or suffering great bodily injury; AND (2) the use of deadly force was necessary to defend against the danger; BUT (3) at least one of those beliefs was unreasonable. Only some courts allow imperfect self-defense to be applied to situations where the defendant was defending another person.

Answer 54

• Under the 4th Amendment of the U.S. Constitution, a person is granted protection from unlawful government searches and seizures. Acts by private individuals are NOT protected by the 4th Amendment. • In order to challenge a search or seizure, the challenging party MUST have standing – he or she must have personally been subject to a purported search or seizure. A person CANNOT vicariously assert the rights of another. • To have standing, the challenger must have a reasonable expectation of privacy regarding the item or place searched. Courts have held that individuals have a reasonable expectation of privacy in that of which they own or possess. The U.S. Supreme Court has extended this doctrine to permit an overnight guest to challenge a warrantless search in a home in which he was staying. A person as DOES NOT have a reasonable expectation of privacy for items in plain view where the police have a legal authority to be (e.g. valid warrant or a warrant exception). o However, courts have held that people DO NOT have a reasonable expectation of privacy in the following: (1) a paint scrapping taken from one’s car; (2) a person’s bank account records; (3) anything visible from public airspace; (4) garbage left on the curb; (5) the sound of one’s voice; (6) odors coming from one’s property; (7) one’s handwriting; and (8) anything that can be seen in or across areas outside one’s home.

Answer 55

• Under the 4th Amendment of the U.S. Constitution, a person has the right to be free from unlawful searches and seizures by the government. Seizure under the 4th Amendment includes arrests. • For an arrest to be proper, the police officer MUST have probable cause. Probable cause arises when the police officer (1) has trustworthy facts or knowledge, (2) sufficient to warrant a reasonable person to believe, (3) that the person committed a crime. If a police officer has probable cause to believe that a person has committed even a very minor criminal offense in his presence, he may arrest that person without violating the 4th Amendment. A police officer DOES NOT need firsthand knowledge to have probable cause; it may be based on the firsthand knowledge of another (i.e. an informant). • If an arrest is conducted in a public place, probable cause is all that is required. However, a warrant is required if a police officer arrests someone in or at their home (unless exigent circumstances or another exception exists).

Answer 56

• Under the 4th Amendment of the U.S. Constitution, a person is granted protection from unlawful government searches and seizures. A seizure occurs when a reasonable person would have believed that he was not free to leave. • The police may make a request for information anytime except on “whim or caprice.” • A police officer may stop and inquire if the police officer (1) has reasonable articulable suspicion, (2) that criminal activity is afoot. A stop and inquire allows only a brief detention for questioning, after which the suspect must be released. • A police officer may only stop and frisk a person if the police officer (1) has reasonable articulable suspicion, (2) that criminal activity is afoot, AND (3) that the person has a weapon. Under the plain feel doctrine, a police officer may only seize items he or she reasonably believes is contraband or a weapon during the frisk. • Reasonable suspicion is defined as the quantum of knowledge sufficient to induce an ordinarily prudent and cautious person under the circumstances to believe that criminal activity is at hand. Courts use a sliding scale based on the particular factual circumstances to determine whether reasonable suspicion was present.

Answer 57

• The 4th Amendment of the U.S. Constitution provides that everyone should be free from unreasonable searches and seizures. Thus, a police officer will need a warrant to conduct a search and to seize items, unless a valid exception applies. • In order for a search warrant to be valid: (1) there must have been probable cause (reliable information that it is likely that evidence of illegality will be found at a particular location); (2) the warrant must state with particularity the place to be searched and the items to be seized; AND (3) it must be issued by a neutral and detached magistrate. • Evidence obtained without a valid warrant should be excluded unless it falls under the exceptions that permit a warrantless search and seizure. The warrant exceptions are: (1) plain view doctrine; (2) exigent circumstances; (3) the automobile exception; (4) a search incident to an arrest; (5) consent; (6) inventory searches; (7) stop and frisk; and (8) where the U.S Supreme Court has concluded there is a special need.

Answer 58

• Under the Plain View Doctrine, the police may seize evidence without a warrant if (1) it is observed in plain view (with any of the five senses), (2) from a place the officer is lawfully permitted to be (e.g. valid warrant or a warrant exception applies), AND (3) probable cause exists to believe that the items are evidence of a crime or contraband (it must be immediately apparent).

Answer 59

• A defendant’s confession may be excluded at trial under the 5th, 6th, or 14th Amendments of the U.S. Constitution. Under the 5th Amendment Privilege Against Self-Incrimination, a person has a right to not incriminate oneself and MUST be given Miranda warnings during a custodial interrogation. • Miranda warnings inform suspects that: (1) they have the right to remain silent; (2) anything they say can be used against them in court; (3) they have the right to talk to an attorney and have one present when they are questioned; AND (4) if they cannot afford an attorney, an attorney will be provided to them. The police need only reasonably convey these rights to a suspect. • Miranda rights attach when there is a custodial interrogation of a suspect. If a person is not subject to a custodial interrogation, no Miranda warnings need to be given. The Supreme Court has held that the release of an incarcerated person from questioning back to their “normal” prison life ends the custodial interrogation. o A person is in custody when they reasonably believe they are not free to leave. o A person is subject to interrogation when the police knew or should have known that their conduct was likely to elicit an incriminating response. • Miranda rights only protect statements or acts that are communicative or testimonial in nature. In order to be testimonial, an accused’s communication must (explicitly or implicitly) relate to a factual assertion or disclose information. Crying is NOT considered a testimonial communication. Additionally, Miranda rights DO NOT apply to any spontaneous statements made by a person. • Under the Public Safety Exception, limited interrogation without Miranda warnings IS ALLOWED when police officers ask questions reasonably prompted by a concern for public safety OR the safety of the officer (i.e. to secure a weapon). • When invoking a Miranda right, it MUST be clear and unambiguous. For example, merely stating “I think I need a lawyer” or “maybe I should talk to a lawyer” is insufficient. The police have no obligation to stop questioning a suspect if the request is not clear and unambiguous. o Once the right to remain silent is invoked, the police may later question the suspect if they first scrupulously honor his right to remain silent. Additionally, if the right is invoked, the defendant’s silence CANNOT be commented on by the prosecution or be used to incriminate him at trial. o Once the right to counsel is invoked, the police must stop questioning the suspect on ANY crime until the suspect has spoken with an attorney. However, a custodial interrogation may be reinitiated if: (1) the suspect has been re-advised of his Miranda rights; (2) has provided a knowing and voluntary waiver; AND (3) either (a) counsel is present, (b) the suspect initiates the communication, or (c) at least 14 days have passed since the suspect was released from custody. A suspect’s statement that clearly indicates a willingness to speak about matters relating to the investigation is treated as an initiation of communication, but questions or comments relating to routine incidents of being in custody do not. • A suspect may waive his Miranda rights. A valid waiver must be made: (1) voluntarily (it is the product of the defendant’s free will); AND (2) knowingly and intelligently (the defendant must understand the nature of the right being waived and the consequences for waiving it). o When determining whether a confession overcame a person’s free will, courts consider (1) the characteristics of the interrogation (i.e. length of the interrogation and police tactics used); AND (2) the characteristics of the individual (i.e. age and experience). o The police may use coercive conduct (i.e. lying) UNLESS the coercion overcomes the defendant’s free will. Police failure to provide the defendant with outside information (such as efforts by his attorney to reach him) DOES NOT invalidate a waiver UNLESS the information withheld was essential to the defendant’s ability to make a valid waiver. • A defendant/suspect’s statements made in violation of his Miranda rights are subject to the Exclusionary Rule.

Answer 60

• Under the Exclusionary Rule, evidence obtained in violation of a defendant’s 4th, 5th, or 6th Amendment rights is inadmissible in a criminal case. Additionally, all derivative evidence is inadmissible under the fruit of the poisonous tree doctrine. • However, the exclusionary rule DOES NOT apply if: (a) it is shown that the police had an independent source for the secondary evidence (where there is a source for discovery and seizure of the evidence that is distinct from the original illegal source); (b) the discovery of evidence would have been inevitable regardless of the illegality; (c) through the attenuation doctrine (which admits evidence where a defendant’s free will has been restored through the passage of time and/or intervening events); (d) the police relied in good faith on a defective search warrant; OR (e) it’s a violation of the Knock-and-Announce Rule (if the search was authorized by a valid search warrant). If an exception applies, the evidence MAY be used in a criminal prosecution against a defendant. • In addition, there are limitations on the Exclusionary Rule as applied to Miranda violations. o Limitation #1: Failure to give Miranda warnings DOES NOT require suppression of the physical evidence found because of the statements (as long as the statements are voluntary). o Limitation #2: Subsequent statements made after Miranda warnings are admissible, UNLESS a non-Mirandized previous statement was obtained through the use of inherently coercive police tactics offensive to due process. o Limitation #3: Statements obtained in violation of a suspect’s Miranda rights are inadmissible in the Prosecution’s case-in-chief. BUT, they may be used to impeach a defendant on cross examination. However, such statements CANNOT be used to impeach the testimony of third-party witnesses.

Answer 61

• The prosecution must prove every element of a crime beyond a reasonable doubt. The burden of proof CANNOT be shifted to the defendant under the Due Process Clause. However, a state may impose that affirmative defenses be proved by the defendant (i.e. insanity or selfdefense). • A jury instruction that creates a rebuttable presumption for an element of the crime (one that may be disputed or overcome by additional evidence) violates Due Process Clause if it shifts the burden of proof to the defendant. A jury instruction that creates an irrebuttable presumption for an element of the crime (one that cannot be disputed or overcome by additional evidence) is a per se violation of the Due Process Clause. • After the prosecution closes its case in chief or after the close of all the evidence, the defendant may move for a Judgment of Acquittal. If the evidence is insufficient to sustain a conviction for a crime (when a reasonable jury would not find that each element was proven beyond a reasonable doubt), the court MUST enter Judgment of Acquittal.

Answer 62

• Relevancy: To be admissible, evidence must be relevant. Evidence is relevant if: (1) it has any tendency to make a fact more or less probable than it would be without the evidence; AND (2) the fact is of consequence in determining the action. Relevant evidence is ADMISSIBLE unless another rule or exclusion provides otherwise. Irrelevant evidence is NOT admissible. • Rule 403 Exclusions (Balancing Test): Under FRE 403, the court may exclude relevant evidence if its probative value is substantially outweighed by a danger of: (a) unfair prejudice; (b) confusing the issues; (c) misleading the jury; (d) undue delay; (e) wasting time; OR (f) being needlessly cumulative. Probative value is the ability of the evidence to prove something important at trial. Evidence is unfairly prejudicial when the evidence is (1) unnecessary, AND (2) might cause the jury to improperly sympathize or dislike a party. Unfair surprise is NOT a ground for exclusion. As an alternative to excluding evidence completely under Rule 403, the court could limit the unfair prejudice to a party by: (a) limiting the scope of evidence or examination to specific topics; OR (b) giving the jury a limiting instruction (e.g. directing the jurors to only consider the evidence for a specific purpose).

Answer 63

• Subsequent remedial measures are measures taken that would have made an earlier injury or harm less likely to occur. Under the FRE, evidence of subsequent remedial measures is NOT admissible to prove: (a) negligence; (b) culpable conduct; (c) a defect in a product or design; OR (d) a need for a warning or instruction. • However, the court may admit such evidence for other purposes, such as: (i) impeachment; or (ii) to prove a disputed issue as to ownership, control, or feasibility of precautionary measures. • Types of subsequent remedial measures include changes to company rules, installation of safety devices, and postincident discipline or termination of an employee.

Answer 64

• Generally, evidence of a person’s character is NOT admissible to show propensity (that on a particular occasion the person acted in conformity with the character trait). HOWEVER, character evidence is generally ADMISSIBLE: (a) for non-propensity purposes; OR (b) when “Character in Issue” – it’s an essential element or ultimate issue of a charge, claim, or defense (e.g. defamation, negligent entrustment). • Notwithstanding the above, character evidence MAY be offered as circumstantial evidence to prove propensity in certain limited circumstances: o In Criminal Cases:  Defendant’s Character: In criminal cases, a defendant MAY always introduce evidence of their own character trait. The prosecution is NOT allowed to present evidence of the defendant’s character to prove propensity UNLESS the defendant first presents evidence of that character trait (the defendant “opens the door”).  NOTE: Prosecution MAY introduce defendant’s prior acts of Sexual-Assault or Child Molestation when defendant is accused of such conduct (see Prior Bad Acts rule).  Victim’s Character (non Sex-Offense case): Except in sex-offense cases, a defendant MAY offer evidence of the victim’s character to prove the defendant’s innocence. If the defendant presents such evidence, the prosecution MAY present evidence of the: (a) victim’s good character for the same trait; or (b) defendant’s bad character for the same trait.  Victim’s Character (Homicide case): In a criminal homicide case, a defendant MAY offer evidence of the victim’s character for violence in order to establish self-defense. The prosecution may offer evidence of the victim’s character for peacefulness ONLY IF the defendant claims the victim was the aggressor (self-defense).  Victim’s Character (Sex-Offense case): For criminal sex-offense cases involving alleged sexual misconduct, evidence offered to prove a victim’s sexual behavior or predisposition is generally NOT admissible. However, certain exceptions to this rule exist. In a criminal case, the court MAY admit specific instances evidence: (a) of victim’s sexual behavior if offered to prove that the defendant was not involved in the sex crime (not the source of semen, injury, or physical evidence); (b) of sexual relations between the defendant and victim if offered (i) by the defendant to prove consent, or (ii) by the prosecutor for any reason; OR (c) whose exclusion would violate the defendant’s constitutional rights. If admissible, only Specific Instances proof is allowed; Reputation or Opinion proof is NOT allowed. o In Civil Cases:  General Rule: Character evidence CANNOT be introduced in a civil case to prove propensity, unless the exception for sex offense cases applies (see below).  Victim’s Character (Sex-Offense case): For civil sex-offense cases, evidence offered to prove a victim’s sexual behavior or predisposition is generally NOT admissible. However, certain exceptions to this rule exist. In a civil case, the court may admit evidence offered to prove a victim’s sexual behavior or predisposition ONLY IF its probative value substantially outweighs the danger of (i) harm to any victim, and (ii) unfair prejudice to any party. If admissible, typically only Opinion and Specific Instances proof is allowed. But, the court MAY admit evidence of a victim’s Reputation if the victim has placed it in controversy. • Methods of Proving Character: Under the FRE, when character evidence is admissible, it may be proven in the following ways: (A) in ALL instances by Opinion testimony or testimony of Reputation in the community; OR (B) by Specific Acts ONLY IF (a) on cross-examination, or (b) “Character in Issue” (it’s an essential element of a charge, claim, or defense). “Community” includes groups of associates where one lives, works, or regularly socializes. NOTE: Special rules apply to evidence of a Victim’s character in Sex-Offense cases (see those rules above). •

Answer 65

• Under the FRE, evidence of prior convictions may be admitted to attack a witness’s character for truthfulness in certain instances. o Prior felony or misdemeanor convictions involving dishonesty (a dishonest act or false statement) are ALWAYS admissible to impeach a witness (the judge has no discretion to exclude it). All other misdemeanors are NOT admissible to impeach. In most jurisdictions, a theft crime (e.g. shoplifting, robbery) is NOT a crime of dishonesty, unless a specific dishonest act or false statement is proven when defendant committed the crime. o Felonies that DO NOT involve dishonesty are admissible in the following cases: (1) in a civil or criminal case where the witness is not a criminal defendant (subject to the FRE 403 exclusions); and (2) in a criminal case where the witness is a defendant, but only if the probative value outweighs its prejudicial effect. Sex crimes are generally not considered relevant to credibility (especially when the danger of unfair prejudice is high), but drug convictions have been deemed relevant. o Notwithstanding the above, if 10-years have passed since the later of the witness’s conviction or release from confinement, evidence of the conviction is admissible only if: (1) its probative value substantially outweighs its prejudicial effect; and (2) the proponent gives an adverse party reasonable written notice of the intent to use it. •Evidence of a conviction is NOT admissible if it has been pardoned or annulled based on a finding of innocence. •A felony is a crime that (in the convicting jurisdiction) was punishable by: (a) death; OR (b) imprisonment for more than one year.

Answer 66

• A witness’s credibility may be attacked on cross-examination by questioning him with specific instances of conduct (i.e. prior bad acts) ONLY IF the conduct is probative of the witness’s character for truthfulness or untruthfulness. • However, extrinsic evidence is NEVER admissible to attack or support such instances of a witness’s credibility. Even if a witness lies or denies a specific instance of conduct, he CANNOT be contradicted by extrinsic evidence, such as documentary evidence or by testimony of another witness to show that the witness is lying.

Answer 67

• Under the FRE, refreshing a witness’s recollection using a document is permitted when (1) the witness once had personal knowledge of the matter, (2) but is unable to recall the matter while testifying. When refreshing recollection, the witness will be able to read the document. However, only the opposing party may offer the document into evidence if it is otherwise inadmissible (but it may be admitted by the offering party if admissible under another ground, such as a recorded recollection). The opposing party is also entitled to have the document produced at the hearing/trial, to inspect it, and to cross-examine the witness about it.

Answer 68

• A lay witness is any person who gives testimony in a case that is NOT called as an expert. A lay witness’s testimony is admissible if he is competent to testify. Under the FRE, competency is presumed unless the FRE provides otherwise. Before testifying, the witness must take an oath to tell the truth. Additionally, a witness may only testify as to matters that he has personal knowledge. Lay witness identification, based on the witness’ prior familiarity with a voice, is allowed at trial. • A lay witness may only offer an opinion if it is: (1) rationally based on the witness’s perception; (2) helpful to clearly understand the witness’s testimony or to determine a fact in issue (legal conclusions are not helpful); AND (3) not based on scientific, technical, or other specialized knowledge.

Answer 69

• Hearsay Definition: Hearsay is (1) an out-of-court statement, (2) that is offered to prove the truth of the matter asserted. Hearsay is ONLY admissible if it falls under an exception. A “statement” means a person’s oral assertion, written assertion, or nonverbal conduct, if the person intended it as an assertion. However, if the act DOES NOT assert or communicate anything (i.e. crying), it is not deemed a statement for hearsay purposes. • Multiple Hearsay: When evidence contains hearsay within hearsay (multiple or double hearsay), each level of hearsay must fall within an exception to be admissible. • Non-Hearsay: If an out-of-court statement is offered to prove something other than the truth of the statement, it is non-hearsay and is ADMISSIBLE. Common non-hearsay statements include: (1) verbal acts of independent legal significance; (2) statements offered to show the effect on the listener; (3) a prior inconsistent statement used to impeach; and (4) circumstantial evidence of the speaker’s state of mind.

Answer 70

• Under the FRE, statements by a party opponent are deemed to be non-hearsay. A statement by a party opponent is (1) any statement offered against an opposing party, (2) that either: (a) was made by the party in an individual or representative capacity; (b) is adopted or believed to be true by the party (silence may be sufficient if a reasonable person would have denied the statement after hearing it); (c) was made by an person authorized to make a statement on the subject; (d) was made by the party’s agent or employee on a matter within the scope of that relationship; OR (e) was made by the party’s co-conspirator during and in furtherance of the conspiracy.

Answer 71

• Under the FRE, prior statements by a declarant-witness are deemed to be non-hearsay if: (1) the declarant testifies; (2) the declarant is subject to cross-examination about a prior statement; AND (3) the prior statement: (a) was inconsistent with the declarant’s testimony and was given under penalty of perjury at a court proceeding or deposition; (b) identifies a person as someone the declarant perceived earlier (statements identifying a person after hearing that person’s voice typically qualify under this rule); or (c) is consistent with the declarant’s testimony and is offered to either (i) rebut that the declarant is lying or (ii) to rehabilitate the declarant’s credibility as a witness when attacked on another ground.

Answer 72

• Present sense impression is an exception to the hearsay rule. A present sense impression is a statement describing an event made by the declarant: (a) while observing the event; OR (b) immediately thereafter. A few minutes after the event is within the period contemplated under this hearsay exception.

Answer 73

• An excited utterance is an exception to the hearsay rule. An excited utterance is a statement (1) relating to a startling event or condition, (2) made while the declarant was under the stress of excitement that the event/condition caused. There can be a slight delay between the event and the statement. Responding to a question usually has no effect on the applicability of this hearsay exception, unless police questioning was suggestive.

Answer 74

• Business records are an exception to the hearsay rule. A business record is admissible if it is: (1) a record of events, conditions, opinions, or diagnoses; (2) kept in the regular course of business; (3) made at or near the time of the matter described; (4) made by a person with knowledge of the matter; (5) is the regular practice of the business to make such a record; AND (6) the opponent party does not show that the record was made under circumstances indicating a lack of trustworthiness. The witness who lays the business records foundation DOES NOT need be the author of the record or attest to its accuracy. • Courts have held that law enforcement reports are inadmissible against a criminal defendant under the business records exception.

Answer 75

• A statement is NOT excluded by the hearsay rule when the statement: (1) is made for and reasonably pertinent to medical diagnosis or treatment; AND (2) describes medical history or symptoms (past or present). Statements not relevant to medical diagnosis or treatment (i.e. statements of fault) generally DO NOT fall within this hearsay exception.

Answer 76

• Statements of the declarant’s then-existing state of mind (i.e. motive, intent, or plan) OR emotional, sensory, or physical condition are an exception to the hearsay rule. However, statements of memory or belief offered to prove a fact remembered/believed is NOT admissible UNLESS it relates to the validity or terms of the declarant’s will.

Answer 77

• A statement against interest is an exception to the hearsay rule, and is admissible when: (1) it’s a statement against the declarant’s penal, proprietary, or pecuniary interest when made (i.e. criminal, property, civil liability interests); (2) the declarant has firsthand knowledge; (3) a reasonable person in the declarant’s position would have made the statement only if the person believed it to be true; AND (4) the declarant is unavailable. • If a statement against interest is offered in a criminal case, it MUST be supported by corroborating circumstances that clearly indicate its trustworthiness. • A declarant is deemed unavailable as a witness if he: (a) is exempted from testifying due to privilege; (b) refuses to testify despite a court order to do so; (c) testifies that he does not remember the subject matter; (d) cannot be present to testify because of death or illness; OR (e) is beyond the reach of a court’s subpoena, and his attendance cannot be procured by reasonable means.

Answer 78

• The Sixth Amendment’s Confrontation Clause (as applied to the states via the Fourteenth Amendment) gives a criminal defendant the right to confront witnesses against him. The use of an out-of-court statement (even if it falls within a hearsay exception or exemption)violates a defendant’s Sixth Amendment rights when: (1) the statement is “testimonial”; (2) the declarant is unavailable to be cross examined at trial; AND (3) the defendant did not have an opportunity to cross-examine the declarant before trial. This prohibition is subject to some exceptions, such as dying declarations and wrongdoing by the defendant. • Courts have held that the following statements are testimonial in nature: (a) statements made to grand juries (and in other similar situations); (b) an affidavit or certified report containing forensic laboratory results; and (c) statements made to the police whose primary purpose (when viewed objectively) is to collect testimony to be used at a later trial. HOWEVER, statements made to the police where the primary purpose of the questioning was to assist the police in an ongoing emergency are NOT considered testimonial. • The U.S. Supreme Court set forth the following factors to determine the existence of an ongoing emergency: (1) the nature of the dispute; (2) the scope of the potential harm to the victim; (3) the threat to additional identifiable victims; (4) the existence of a more generalized threat to the public; (5) the suspect’s type of weapon; and (6) whether the suspect remained “at large” or had been located, but not apprehended. • Forensic Laboratory Results: The Supreme Court has held that a forensic laboratory report CANNOT be introduced through a “surrogate” expert (someone other than the person who created the report), unless that person has at least some personal knowledge that the declarant’s statements are true.

Answer 79

• Most states recognize a Physician-Patient Privilege. In those States, confidential patient communications made to a physician for the purpose of medical diagnosis or treatment ARE PRIVILEGED. • Federal courts DO NOT recognize a Physician-Patient Privilege. However, under the FRE, state law governs privilege for civil cases regarding a claim or defense for which state law supplies the rule of decision (e.g. in a diversity action filed in federal court). • Waiver: The patient holds the privilege (not the physician), and only the patient can invoke or waive it. The privilege may be waived by the patient when the medical condition is placed “in issue” (e.g. a personal injury lawsuit relating to the condition). Disclosure of bare facts of medical information/ history to third parties is generally not considered an implied waiver. If deemed an implied waiver by the court, then court will limit the scope of evidence to only that waiver (i.e. disclosed) by the patient.

Answer 80

• A valid common law marriage creates marital rights and obligations identical to a ceremonial marriage. A common law marriage generally requires that the spouses: (1) live together for a specified amount of time; (2) be legally able to marry; (3) have a present agreement that the two parties are married; AND (4) hold themselves out as being married. Once formed, a common law marriage can only be dissolved through divorce or annulment. • Most states will honor a valid common law marriage established in another state (even if not recognized within the state). However, a court may refuse to honor a common law marriage when the spouses and the marriage have limited contacts to the state where the common law marriage was allegedly established.

Answer 81

• Premarital agreements are contractual agreements that are executed by the spouses prior to the marriage. Generally, such agreements are enforceable UNLESS procured by fraud, duress, or coercion. • Under the Uniform Premarital Agreement Act (UPAA), a premarital agreement MUST be: (1) in writing; AND (2) signed by both parties. The agreement is enforceable even without consideration. o Under the UPAA, a premarital agreement is NOT ENFORCEABLE if the spouse against whom enforcement is sought proves that: (a) the agreement was made involuntarily; OR (b) it was unconscionable when executed and before execution the spouse was (i) not provided fair disclosure of the property and financial obligations of the other spouse; (ii) did not waive disclosure in writing; and (iii) did not have (or reasonably could have had) knowledge of such information. • To determine if a premarital agreement was made voluntarily, courts look to whether there is fraud, duress, or coercion. Factors a court will typically consider include: (1) the presence of independent legal counsel; (2) the length of time between the date of the agreement and the wedding; (3) the party’s abilities to understand the agreement; and (4) other reasons for proceeding with the marriage, such as pregnancy or financial loss and embarrassment from cancelling the wedding. A party’s insistence on signing the agreement as a condition of marriage by itself DOES NOT render the agreement involuntary.

Answer 82

• Provisions in a marital agreement regarding child support or child custody are NOT binding on a court, and any provision that adversely affects a child’s right to support is unenforceable. If the court decides a premarital agreement regarding child support is not in the best interests of the child, the court may order one or both parents to pay an amount reasonable or necessary for the child’s support.

Answer 83

• State courts have subject matter jurisdiction over marital actions (divorce, annulment, child custody and support, spousal support). • An ex parte divorce (a divorce action where only one of the spouses is before the court) may be maintained without personal jurisdiction over the absentee spouse, if the plaintiff spouse is a domiciliary of the rendering state. Many states have a durational residency requirement, which specifies a set time before a spouse can bring a divorce action. The plaintiff-spouse’s status as a domiciliary gives the court subject matter jurisdiction over the marital res (the marriage itself). A divorce (whether ex parte or bilateral) validly granted in another state is entitled to full faith and credit in other states. ο Domicile is determined by the person’s: (1) residence (physical presence in the state); AND (2) subjective intent to make the state their permanent home. • In a matrimonial action involving economic or child support issues (e.g. alimony/maintenance, property distribution, child support) the court MUST have personal jurisdiction over the defendant-spouse, in order for the judgment to be entitled to full faith and credit.

Answer 84

• A court MUST have jurisdiction under the UCCJEA in order to issue or modify a child custody order. Personal jurisdiction or physical presence of a party or child is NOT necessary or sufficient for a court to make a child- custody determination. • Under the Uniform Child Custody Jurisdiction and Enforcement Act (UCCJEA), a court has jurisdiction to decide custody only if it exercises one of the following: o Home State Jurisdiction: When it is (a) the child’s home state (the state in which a child lived with a parent or a person acting as a parent for at least six consecutive months immediately before the commencement of a child custody proceeding); OR (b) where the child lived with a parent for at least 6 months immediately before the custody action was filed, the child is absent from the state, and a parent or acting parent is still present in the state. o Significant Connection Jurisdiction: When (1) there is no home state; (2) the child and at least one parent have a significant connection with the state; AND (3) substantial evidence in the state must exist concerning the child’s care, protection, training, and personal relationships. o More Appropriate Forum Jurisdiction: When all other courts with Home State or Significant Connection Jurisdiction decline to exercise jurisdiction because this particular court is a more appropriate forum. o Temporary Emergency Jurisdiction: When the child (1) is physically present in the state; AND (2) has been abandoned or it’s necessary in an emergency to protect the child. o No Other State Jurisdiction: When no other state has home state, significant connection, continuing, or emergency jurisdiction. The Parental Kidnapping Prevention Act (PKPA) generally provides the same requirements as the UCCJEA. Under the Supremacy Clause, the PKPA preempts any conflicting state laws. Under the PKPA, child custody decrees are entitled to full faith and credit if the court had jurisdiction. • Adoption Matters: In most states, the jurisdiction for a court to enter an adoption decree is the same as required for a child custody determination under the UCCJEA. • Wrongfully Taking Child From the State & Effect on Jurisdiction: Some courts have held that a parent who wrongfully takes a child from a State CANNOT unilaterally establish a new “home state” for jurisdiction purposes. However, the failure of the other parent to file a custody proceeding, along with notice of where the child was located and ample opportunity to file, generally CANNOT defeat the new “home state”.

Answer 85

• In all states, a divorce court may divide property without regard to which spouse has title to the property. Most states follow the equitable division of marital property approach, in which marital assets are to be divided by equitable distribution among the parties to a divorce. Other states apply either a community property or common law approach. Notwithstanding the approach applied, in almost all jurisdictions, a court CANNOT divide separate property. • In a divorce, a court will divide all property owned by the two spouses into two categories: (1) the separate property of each spouse; and (2) marital property owned jointly between the spouses. • Separate property includes (a) property and assets acquired by each individual spouse before marriage, (b) gifts and bequests to each spouse as an individual during marriage, (c) property which the spouses agree will be separate property, and (d) passive appreciation of assets in any of the above categories. Passive appreciation is appreciation in value due merely to the passage of time, and not to the efforts of either spouse. Marital property includes all other property acquired during the marriage, regardless of whose name is on the title of the property. In most states, marital property also includes the active appreciation of separate property. Active appreciation includes appreciation caused by the effort of one or both spouses. Future expectancies (even contingent expectancies) created during the marriage are still deemed to be marital property, even if payment will not be received until after the marriage ends. • Each spouse’s separate property will NOT be subject to equitable division. A court will pool all marital property and distribute that property between the two spouses. In distributing marital property, the court will look at factors such as the duration of the marriage, age of the spouses, earning capacity, lifestyle, income of the spouses, and the property which was deemed separate property. In addition, the services provided by one spouse who stayed home or put a career on hold will be considered in order to reach an equitable division. Some states will distribute property equally between the primary breadwinner and primary homemaker. Generally, the fault of either party is irrelevant to the division of marital property. • In some states, property acquired is no longer marital property once the spouses are permanently separated. However, other states require a final divorce decree to end the accrual of marital property.

Answer 86

• Upon divorce, one spouse may be court ordered to provide spousal support (also referred to as maintenance or alimony) to maintain the former spouse’s standard of living and limit any unfair economic effects of a divorce. • Under the Uniform Marriage and Divorce Act (UMDA), the court may order maintenance (spousal support) for either spouse only if it finds that the spouse seeking maintenance: (1) lacks sufficient property to provide for her/ his reasonable needs; AND (2) is either unable to support herself/himself through employment or is the custodian of a child whose condition or circumstances make it so that the custodian cannot seek employment. • Determining the Amount of Support: Relevant factors a court will consider when determining the amount of spousal support include: (1) the financial resources of the party seeking support; (2) the time necessary for the spouse seeking support to obtain an appropriate job (include time for education or training); (3) the standard of living established during the marriage; (4) the duration of the marriage; (5) the age and the physical and emotional condition of the spouse seeking support; and (6) the ability of the spouse paying support to meet their needs while supporting the other spouse. In addition to these factors, some states will also consider marital misconduct or fault. • Termination: Spousal support obligations terminate upon the death of the obligor spouse.

Answer 87

• Child Support Guidelines: A biological parent is legally responsible for a child whether or not the child was intended or wanted by the parent. Federal law requires that states provide child support guidelines that: (1) take into consideration all earnings and income of the non-custodial parent; AND (2) are based on specific descriptive and numeric criteria to compute the support obligation. • College or Educational Expenses: Some states require support for continuing education. In such states, a child may lose the right to payments if the child DOES NOT follow the obligor parent’s reasonable instructions. • Termination Upon Death: In most states, an obligation to pay child support terminates upon the death of the obligor. In those states, however, the deceased’s estate remains liable for past due payments. In some states, an obligation to pay child support DOES NOT terminate, and allows access to the deceased’s estate to fulfill future payments.

Answer 88

• In most states, a child or spousal support order CAN ONLY be modified when there is a substantial and continuing change in circumstances of either the payor or payee spouse making the prior order unreasonable. • Under the Uniform Marriage and Divorce Act (UMDA), modification of child/spousal support orders is more stringent, and is allowed only upon a showing of changed circumstances so substantial and continuing as to make the terms unconscionable. • Some courts will NOT permit a modification if the change was anticipated or voluntary, while other courts will permit modification when the obligor parent acted in good faith. • Courts CANNOT retroactively modify support orders. However, a court may prospectively modify or eliminate child support payments if that parent becomes the custodial parent. • Under the Uniform Interstate Family Support Act (UIFSA), states must give full faith and credit to child/spousal support orders of other states. Courts CANNOT modify child support orders of other states UNLESS: (1) the court has jurisdiction to issue an order; AND (2) either (a) all of the parties do not reside in the issuing state (obligor, obligee, and child) or (b) each party has consented in writing to jurisdiction in another state. An issuing state has continuing, exclusive jurisdiction over a controlling order if: (a) the state is the residence of one of the parties (obligor, obligee, or child); OR (b) all parties consent in a record or in open court that the state may continue to exercise jurisdiction. • States are also required to give full faith and credit to child support orders of other states under the Full Faith & Credit for Child Support Orders Act and Section IV-D of the Social Security Act.

Answer 89

• Courts determine child custody under the Best Interests of the Child Standard. This is a broad standard that gives great discretion to the court. In evaluating the best interests of the child, a court will evaluate the following: (1) the wishes of the parents; (2) the wishes of the child (for older children); (3) the age, financial well-being, and mental/ physical health of each parent; (4) the existence of new individuals in each parent’s life and who that person is; (5) the effect custody will have on the child’s ability to foster relationships with extended family; (6) history of domestic violence by either party – some states presume that a parent guilty of serious domestic violence should not be awarded custody; (7) stability of child’s home and school environments; and (8) anything else that the court believes will be equitable to evaluate. • A court CANNOT award or deprive custody based on a parent’s lifestyle, values, or religious beliefs, but may take into account whether such behavior or conduct would endanger the child. A parent’s sexual behavior, by itself, CANNOT be used to deny custody.

Answer 90

• When determining child custody between a fit legal parent and a third-party, the parent is given preference and it is presumed that custody with the parent is in the best interests of the child. Some states permit this presumption to be rebutted by showing that custody with the parent would be detrimental to the child. • Since parental rights are constitutionally protected, courts MUST give great weight to a parent’s determination of what is best for the child. Indeed, the Supreme Court has implied that preference to a fit natural parent is constitutionally mandated. • Courts will also give substantial weight to a mature child’s wishes when resolving a child custody dispute between a parent and a third-party. However, that child’s wishes are NOT determinative, and the court may disregard such wishes and grant custody in favor of a natural parent. • Usually, a court will only grant custody to a third-party upon the showing of special circumstances (abuse, neglect, abandonment, mentally incompetent, or where the parent surrendered the child).

Answer 91

• An agreement for the division of property between unmarried cohabitants may be express or implied. An express agreement (oral or written) between unmarried cohabitants is enforceable as long as it was not based on sexual relations. An implied agreement is also enforceable, but is generally more difficult to prove. A court may find an implied-in-fact contract regarding the division of property if the parties comingled funds during the relationship.

Answer 92

• Paternity may be established by any of the following methods: (1) a birth certificate; (2) legal presumptions; (3) when unmarried parents voluntarily sign an acknowledgement of paternity; (4) an unmarried biological father’s successful challenge of a presumption; (5) a paternity suit; and (6) the party’s actions by assuming parental responsibilities, establishing a substantial relationship, and holding the child out as his own. • In most jurisdictions, there is a presumption that a child born during marriage is considered a marital child and is the child of the husband. This presumption can be rebutted by proof of the husband’s infertility or his lack of access to his wife. In determining parentage, a court will also consider the best interests of the child. Some states have established procedures for paternity disestablishment by which a husband or unmarried man who was erroneously identified as the father can eliminate child support orders. Most states require the challenge to be filed within two years. • Under the equitable Doctrine of Paternity by Estoppel if a man who is not the biological father has (1) held himself out as the father, and (2) paid support, then he will be estopped from denying paternity. • If paternity is established, that person will be responsible for child support obligations.

Answer 93

• Adoption severs the biological parent’s legal rights and responsibilities for the child. In most states, biological parents lose the right to visit their child after adoption. Some states do not terminate a child’s inheritance rights if the child was adopted by a blood relative. Generally, the consent of BOTH parents is required to place a child up for adoption. However, where the child is nonmarital, consent of the biological father is only required when he has assumed parental responsibility. o In determining if a father has assumed parental responsibility, courts will analyze such factors as the extent of his interaction with the mother during pregnancy, whether the father paid for medical expenses incurred during pregnancy, and his willingness and ability to assume custody and care for the child (as opposed to merely protesting the adoption). o Consent of a parent is NOT required when the parent: (a) has surrendered the child to an adoption agency; (b) is incompetent due to mental illness; (c) has abandoned the child (usually for at least one year) without contact; OR (d) has been found to have permanently neglected the child. • A parent’s consent to an adoption CANNOT be withdrawn after the adoption decree is entered with the court. However, prior to an adoption decree, consent may be withdrawn if it is in the best interests of the child (courts will consider the child’s needs and the parent’s characteristics, motives, and ability to support the child).

Answer 94

• A fee simple defeasible is a conveyance of property that has conditions placed on it. It is created when the grantor uses express conditional language to indicate that the conveyance will be terminated upon the occurrence (or non-occurrence) of an event or condition. A fee simple defeasible gives the grantee a present possessory interest in the property, BUT reserves a future interest in the property in favor of either the grantor or a third party. • Three types of fee simple defeasibles exist: (1) fee simple subject to a condition subsequent (reserves a future interest in the grantor); (2) fee simple determinable (reserves a future interest in the grantor); AND (3) fee simple subject to executory limitation (reserves a future interest in a thirdparty). o Fee Simple Determinable: A fee simple determinable is a conditional conveyance that allows the grantor to retain a possibility of reverter. It is created when the grantor uses words of duration (i.e. so long as, during, while, the property shall revert) in the conveyance to indicate that the interest being conveyed will automatically terminate if a specified condition occurs. o Fee Simple on Condition Subsequent: A fee simple subject to a condition subsequent is a conditional conveyance that allows the grantor to retain a right of re-entry. It is created when the conveyance expressly states that the interest being conveyed is subject to the grantor’s right of re-entry if a specified condition occurs. If the condition occurs, the grantee’s present interest in the property will be lost ONLY IF the grantor affirmatively exercises his right of re-entry and re-takes possession of the land. o Fee Simple Subject to Executory Interest: A fee simple subject to an executory interest is a conditional conveyance of real property, in which a thirdparty (not the grantor or his heirs) will be entitled to the property upon the occurrence of a specified condition. It is created when the grantor uses words such as “To person X, so long as (or “but if”) … to person Y.” • If the deed language is ambiguous as to which defeasible fee is meant, courts construe the language in accordance with the grantor’s intentions. If it’s unclear whether a fee simple determinable or a fee simple subject to condition subsequent is intended, courts typically favor a fee simple subject to condition subsequent.

Answer 95

• Reverter and the right of re-entry is connected to the occurrence of a condition for a defeasible fee conveyance. • A possibility of reverter creates a future interest of possession in the grantor if a specified condition occurs. If such condition occurs, the present possessory interest in the grantee will automatically terminate and vest in the grantor. The Restatement (Third) of Property calls the possibility of reverter a “reversion”. • A right of re-entry (also known as a power of termination) creates a future interest in the grantor, wherein the grantor has the right to re-enter and take the property if a specified condition occurs. The present interest in the property is lost ONLY IF the grantor exercises that right (the present possessory interest does not automatically terminate upon the occurrence of the specified condition). • Reverter and Right of Re-entry interests are NOT subject to the Common Law Rule Against Perpetuities because such interests are immediately vested upon their creation. Additionally, such interests are NOT subject to the Uniform Statutory Rule Against Perpetuities.

Answer 96

• A vested remainder is a future interest in land that is given to an identifiable person with no conditions. • A contingent remainder is a future interest in land that is conditioned upon the occurrence or non-occurrence of a specified event. • In most jurisdictions, a future remainder interest is devisable, and passes to that person’s heirs. When the remainder is conditioned on survivorship (i.e. “my surviving or living children”), the majority view is that the person holding the remainder interest MUST survive the life tenant to be entitled to the interest, while the minority view is that the person need only to survive the testator.

Answer 97

• Generally, when one joint tenant unilaterally transfers his ownership interest in the real property, the joint tenancy is severed and the tenants will then hold the property as tenants in common. • When a joint tenant conveys his interest in a joint tenancy to a third-party, that party takes the property as a tenant in common. If there are only two joint tenants, the joint tenancy is severed. However, if there are more than two joint tenants, the joint tenancy remains, but only among the other joint tenants. • When a joint tenant takes out a mortgage on her interest, the mortgage’s effect on the joint tenancy will depend on the jurisdiction. In a lien theory jurisdiction, the mortgage will NOT sever the joint tenancy. However, in a title theory jurisdiction, the mortgage will sever the joint tenancy, and the tenants will then hold the property as tenants in common. • When one joint tenant leases the property, the lease’s effect on the joint tenancy will depend on the jurisdiction. Most states follow the common law rule that a lease by one joint tenant severs the joint tenancy, wherein it is converted to a tenancy in common.

Answer 98

• A lease provides the tenant with a present possessory interest in the real property (subject to any terms and conditions agreed to), and gives the landlord a future interest in the property. In most states, the statute of frauds requires a lease of more than one year to be writing. • Three types of leaseholds exist: (1) tenancy for years; (2) periodic tenancy; AND (3) tenancy at will. o A Tenancy for Years lasts for a fixed period of time (there is a specified beginning and end date), as agreed by the landlord and tenant. The lease automatically terminates after the fixed period. Normally, a tenant CANNOT terminate a lease prior to the end of the term, unless constructive eviction or another exception applies. o A Periodic Tenancy lasts for an initial period and then automatically continues for additional equal periods (i.e. weekly, monthly) until it is terminated by the landlord or tenant. A periodic tenancy may be created: (a) expressly by agreement; (b) by implication if rent is paid at specific periods (i.e. every week or month); OR (c) by law when a tenant-for-years remains after termination of the period or when a lease agreement is invalid.  A periodic tenancy can only be terminated (1) at the end of a natural lease period, AND (2) requires written notice at least a full period in advance. For example, a periodic month-to-month tenancy requires a one-month notice of termination. An exception exists for a periodic year-to-year tenancy, in that only 6-months’ notice is required. o A Tenancy at Will continues until either party terminates it, and is usually created by an express agreement. In most states termination of a tenancy at will requires giving: (1) notice of termination; AND (2) a reasonable time to quit the premises. In a minority of states, termination does not require notice to the tenant.

Answer 99

• Every lease includes an implied covenant of quiet enjoyment, which prevents a landlord from interfering with the tenant’s quiet enjoyment and possession of the property. This covenant is breached if the tenant is constructively evicted. • Constructive eviction occurs when: (1) the landlord breached a duty to the tenant; (2) the landlord’s breach caused a loss of the substantial use and enjoyment of the premises; (3) the tenant gave the landlord notice of the condition; (4) the landlord failed to remedy the condition within a reasonable time after notice was given; AND (5) the tenant vacated the premises. • Upon being constructively evicted, the tenant may terminate the lease and seek damages. Additionally, a tenant can avoid rent owed during the time-frame she was constructively evicted. • In residential leases, the landlord has a duty to repair common areas. The landlord also has a duty to warn the tenant of any latent defects that create a risk of serious harm that the landlord knows of (or should know of). • In commercial leases, landlords generally DO NOT have a duty to repair (unless specified in the lease agreement), but public authorities may require the landlord to do so in certain instances.

Answer 100

• At common law, a landlord had NO duty to mitigate his damages. However, most states now impose a duty on a landlord to take reasonable steps to mitigate his losses (i.e. attempting to lease the property to another tenant). However, in those states, the mitigation does not need to be successful in order to recover damages (only reasonable steps are required). If a landlord fails to mitigate, some jurisdictions hold that the tenant is not liable for any rent or damages after the date of abandonment. • If the landlord leases the property to another tenant, the landlord would be able to sue for the difference between the original rent payments and the rent payments under the new lease (as well as any incidental damages). • At common law, a landlord could only recover rent that was past due. Some states now permit a landlord to recover future payments under the lease, wherein the damages are measured by the value of rent for the remaining lease term less the fair market value at the time the tenant wrongfully terminated.

Answer 101

• A lease may be freely assigned UNLESS a provision in the lease states otherwise. However, an assignment can never be for a longer period of time than the lessor’s remaining lease term. • An assignment occurs when a tenant (the assignor) transfers ALL of his remaining interest in a lease to a third-party (the assignee). The assignee is liable to the landlord for rent and all other covenants that run with the land because privity of estate arises between the assignee and the landlord. The assignor also remains liable to the landlord for any rent not paid by the assignee because privity of contract continues to exist with the landlord. Landlord’s maintenance obligation runs with the land (privity of estate) and is enforceable between the landlord and assignee. • If the lease agreement requires the landlord’s consent for an assignment, then such consent MUST be obtained by tenant in order to assign the lease. When a lease is silent as the standard of consent (a silent consent clause), two different approaches have been adopted by state courts. o In most states, a silent consent clause allows the landlord to withhold consent for any reason, even if unreasonable or arbitrary (except in violation of discrimination laws). o However, some states require that the landlord must have a reasonable basis for withholding consent (it cannot be unreasonably withheld). Examples of a reasonable basis included the inability to fulfill terms of the lease, financial irresponsibility or instability, suitability of the premises for intended use, or intended unlawful or undesirable use of the premises. • Additionally, a landlord may be deemed to waive his right to enforce a provision prohibiting assignments if he accepts rent from the assignee.

Answer 102

• Surrender is an agreement between the landlord and tenant to end a lease early. If the landlord accepts the surrender, the tenant’s duty to pay rent after the acceptance ends. If the landlord does not accept the surrender, the tenant is deemed to have abandoned the lease, and is liable for damages. • Unless otherwise agreed, an attempt by the tenant to end the lease early DOES NOT constitute a surrender UNLESS the landlord accepts the surrender. A landlord’s acceptance must be clear (solely holding onto keys left by a tenant is not sufficient acceptance without other evidence showing intent to accept the surrender). Conversely, other factors can evidence surrender, such as making alterations or reletting the premises for a longer term or higher rent. A substantial reconfiguration is very strong evidence of surrender.

Answer 103

• An easement is a non-possessory interest in the use of someone else’s land. Easements are either in gross or appurtenant. o An easement in gross benefits a specific owner’s enjoyment and use of the land and DOES NOT attach to the land (unless the easement is for commercial activity). It DOES NOT pass to subsequent landowners. o An easement appurtenant benefits any owner’s enjoyment and use of the land and DOES attach to the land. It DOES pass to subsequent landowners so long as the new owner has notice. Notice may be: (a) actual; (b) constructive (the easement is recorded in previous conveyances); OR (c) by inquiry (a reasonable person would have inquired about the existence of any easements or interests in land based on the facts or circumstances of the property). Any easement may be created by: (1) an express grant; (2) prescription; (3) implication; OR (4) necessity. o An Easement by Grant is an express agreement by the grantor allowing the easement, and must: (1) be in a writing signed by the grantor that satisfies the statute of frauds (if the duration is more than one year); (2) identify the land and parties involved; AND (3) indicate the grantor’s intent to convey the easement. o An Easement by Prescription is created when the possessor’s use of the land is: (1) open and notorious; (2) continuous; (3) hostile (without permission from the owner of the land); AND (4) for the statutory period. o An Easement by Implication (also known as a implied easement) is established when: (1) a single tract of land is divided by a common owner; (2) a pre-existing use by the grantor that benefits the land is established prior to the division of the land; (3) the use is continuous (intermittent use is sufficient, but mere temporary or casual use is not sufficient) and apparent (clearly visible) indicating that the use was meant to be permanent; AND (4) such use is reasonably necessary for the owner’s use and enjoyment of the land conveyed (the benefitted property) – this element is met when the owner of the dominant estate would be forced to spend substantial money or labor to provide a substitute for the easement. o An Easement by Necessity is created if: (1) the original piece of land owned by one owner is subdivided; AND (2) the access the easement provides is essential to the use of the property because there is no other ingress or egress available (i.e. no viable road to access property).

Answer 104

• Typically, an easement is perpetual. However, an easement may be terminated by: (1) estoppel (when the servient estate owner reasonably relies on, or materially changes his position, due to the easement holder’s assurance that the easement will no longer be enforced); (2) termination of the necessity that created the easement; (3) involuntary destruction of the servient estate; (4) condemnation of the servient estate; (5) written release; (6) abandonment (easement holder demonstrates, through physical actions, an intent to never use the easement again); (7) merger (holder of the easement obtains title to the servient estate); OR (8) prescription.

Answer 105

• Under the Common Law, a fixture is (1) personal property, (2) that is attached to land or a building, and (3) regarded as an irremovable part of the real property. A fixture is treated as real property, and passes with the ownership of the land (unless otherwise agreed). • Whether an item is a fixture is determined by the objective intent of the party who attached the item. An item is typically deemed a fixture, if a reasonable person would conclude that the item was intended by the installer to be a permanent attachment to the real property. • To determine whether the item is a fixture, courts consider: (1) the nature of the item; (2) the manner in which it is attached; (3) the damage that would result if the item were removed; and (4) the extent to which the item is adapted to the property (i.e. an installed custom window). The more the item is incorporated into the premises, the more likely the court will find the item to be a fixture. • Under the trade fixture exception, an item that is attached to the property for use in the tenant’s trade or business is NOT a fixture UNLESS its removal would cause substantial damage to the property. An item that is not a fixture may become one if it’s not removed before the end of the lease term.

Answer 106

• Adverse Possession Elements: Adverse possession allows someone in possession of land owned by another to acquire title to that land when the possession of the property is: (1) continuous for the statutory period (usually 10 years); (2) open and notorious (to put an owner on notice of the adverse possession upon inspection of the land); (3) exclusive; (4) actual (possess the property as the true owner would); AND (5) hostile and under a claim of right (without the true owner’s consent). o Some states also require the possessor to have a good faith belief that he owned the land. o Most states DO NOT require the possessor to pay the property taxes for the land. • Acquiring Title by Adverse Possession: The true landowner MUST sue the occupier before the statutory period runs. Otherwise, an occupier (who satisfies all adverse possession elements) acquires superior title against all persons (including the true owner who failed to timely sue). An occupier of land ceasing possession after acquiring title by adverse possession is IRRELEVANT, as they are deemed to be the true owner of the land once all of the averse possession elements are satisfied. • Aggregation/Tacking: Adverse possessors in privity may aggregate their years spent possessing the property to meet the statutory period. Aggregation of the statutory period also applies to a landowner’s time to sue (the statutory period), meaning that the time to bring an action against an occupier of land may be aggregated among landowners in privity. Privity exists when the land is voluntarily transferred to another (i.e. by deed or bequest). • Title Acquired: An adverse possessor can only acquire title to the portion of land that he has met all the adverse possession elements (unless constructive adverse possession applies). An adverse possessor acquires the same title the original owner possessed, and is therefore subject to any applicable easements (unless the easement was terminated thorough prescription or other valid means). • Constructive Adverse Possession: Under the Doctrine of Constructive Adverse Possession, if a person takes possession of only a portion of the land covered under color of title (an invalid deed or will to the land), that possession extends to the entire portion of land described in the deed/ title for adverse possession purposes. Constructive adverse possession applies if: (1) the possessor enters the land under color of title (e.g. invalid deed or bequest); (2) the area of the additional land portion is reasonable in size; (3) the additional land portion is adjacent to the portion of the land actually possessed; AND (4) the portion possessed and the portion not possessed are owned by the same person. Thus, if the portion of land possessed and portion not possessed are owned by different persons, then constructive adverse possession DOES NOT apply to the portion of land owned by the different owner. • Tolling: The time for a landowner to sue an occupier (the statutory period) MAY be tolled (paused) for various reasons, which are typically set forth by statute. Such reasons may include the landowner being a minor, disabled, mentally incompetent, or imprisoned. However, tolling ONLY APPLIES if the landowner with an applicable tolling reason had a cause of action against the occupier when the occupier first entered the property (when the cause of action accrued). For example, if a minor (with an appliable tolling statute) acquires land by a bequest after the occupier has already entered the land, then statutory period is NOT tolled because the cause of previously accrued (came into existence).

Answer 107

• The Home Builder’s Implied Warranty protects a purchaser of a newly constructed home against latent defects, and warrants that the building is safe and fit for human habitation at the time of sale. A latent defect is one that could not have been discovered by reasonable inspection. Breach of the warranty allows a buyer to recover damages for defects discovered within a reasonable amount of time due to: (a) defective construction; or (b) construction not performed in a workmanlike manner (the accepted norms of the industry). • Some courts require privity of contract between the purchaser and the builder, and will NOT extend the warranty to remote grantees and subsequent purchasers. However, other courts will apply the warranty to subsequent owners of the property because they are in the same vulnerable position as the initial purchaser.

Answer 108

o The present covenants are the covenants of: (1) seisin (the grantor is the rightful owner); (2) right to convey (the grantor has the right to make the grant); AND (3) against encumbrances (there are no encumbrances against the title). These present covenants can only be breached at the time of conveyance.  Under common law, present covenants contained in a general warranty deed (seisen, right to convey, and against encumbrances) were NOT enforceable by remote grantees. However, some states will enforce such covenants against encumbrances if the remote grantee did not have notice of the encumbrance. o The future covenants are the covenants of: (1) warranty (grantor will defend grantee against any third party claims to title); (2) quiet enjoyment (grantee will not be bothered by a third party’s lawful claim to title); AND (3) further assurances (the grantor will do whatever is reasonable to perfect title if problems arise). These future covenants can be breached at any time upon the interference with the grantee’s possession of the property.

Answer 109

• The chain of title shows all transfers of title for a piece of real property. Transfers of real property are organized in public records under two indexes. One index is organized by the names of the grantors, and the other index is organized by the names of the grantees. • If a land transfer is NOT recorded properly, it is considered “wild”. A wild deed, mortgage, or easement is effective between the parties, BUT it will not put subsequent purchasers on constructive notice because it’s outside the chain of title (it’s not discoverable in the land records). • Courts are divided on whether a State’s recording act applies to an Implied Easement, but there is a strong argument that it’s not applicable.

Answer 110

• A bona fide purchaser (BFP) is a person/entity who: (1) takes real property without notice (actual, inquiry, or constructive) of a prior conveyance; AND (2) pays valuable consideration. A person who receives land by gift (a donee) or by bequest (an heir/devisee) is NOT a bona fide purchaser because he did not pay valuable consideration for the property. However, if said person sells the property, the subsequent owner may be deemed a bona fide purchaser. o Notice may be actual, constructive, or on inquiry. A person has actual notice of information directly received (i.e. expressly told or language in the deed). A person is on constructive notice of any information that could have been obtained from an inspection of public land records (i.e. search of the grantor-grantee index). A person is on inquiry notice of information that would be revealed upon a reasonable inspection of the land. • Under the shelter rule, a person who purchases from a bona fide purchaser (BFP) receives the same status and rights as the BFP.

Answer 111

• A future advance mortgage is a loan in which the lender may provide future payments under the original loan (usually used in a construction loan context). The lender secures a mortgage on the real property for the entire amount of the loan, including future advances. • Obligatory vs. Optional: Future advance loans are either obligatory or optional. It is obligatory if the lender has a duty to advance the funds regardless of the situation – there are no discretionary conditions. It is optional if the lender has discretion whether to make the future advances (i.e. a satisfactory-progress condition). • Priority Over Other Creditors: o If the lender is obligated to make future payments, then ALL payments are deemed part of the original loan (whether or not disbursed yet) and have priority over subsequently filed liens. o If future payments are optional, then each payment must be analyzed separately. An advance will NOT take priority when: (1) the advance is made after another filed lien on the property; AND (2) the lender has notice of the lien. The majority view requires actual notice, while only constructive notice is required under the minority view.

Answer 112

• Article 9 of the Uniform Commercial Code (UCC) governs any transaction regardless of its form that creates a security interest, including security interests in personal property, consignments, a sale of accounts, chattel paper, and promissory notes.

Answer 113

• Article 9 of the Uniform Commercial Code (UCC) governs any transaction regardless of its form that creates a security interest. A “Security interest” is an interest in personal property or fixtures which secures payment or performance of an obligation. Substance over form controls, and how the parties classify the transaction is immaterial. • Title to Collateral is Immaterial: Article 9 of the UCC applies to a security interest regardless of whether title to the collateral is in the name of the secured party. A seller CANNOT retain or reserve title to goods that have been delivered or shipped. Any attempt by a seller to retain or reserve title after a shipment/delivery to the buyer, is limited in effect to a reservation of a security interest. • Lease vs. Security Interest: A transaction labeled as a “lease” may be deemed a security interest. Courts will consider the economic realities of the transaction, NOT the intent of the parties. A transaction labeled a “lease” creates a security interest if: (1) a commitment to make payments for a term exists; AND (2) either (a) the original term of the lease is equal to or greater than the remaining economic life of the goods; (b) the lessee must renew the lease for the remaining economic life of the goods (or is forced to take ownership); (c) the lessee has an option to renew the lease for the remaining economic life of the goods for no additional consideration; or (d) the lessee has an option to become the owner of the goods for no additional consideration.

Answer 114

• An “account” is a right to payment of a monetary obligation (whether or not earned by performance) for any of the following: (1) property that has been or is to be sold, leased, or otherwise disposed of; (2) services rendered; (3) a policy of insurance issued; (4) a secondary obligation incurred; (5) energy provided; (6) the use or hire of a vessel under a charter or other contract; (7) a debt arising out of the use of a credit card; OR (8) winnings in a lottery or other game of chance sponsored by a State.

Answer 115

• “Inventory” means goods that: (a) are leased by a person as lessor; (b) are held by a person for sale/lease or to be given under a contract of service; (c) are given by a person under a contract of service; OR (d) consist of raw materials, work in process, or materials used or consumed in a business. Inventory DOES NOT include farm products or goods that are only being held for repair.

Answer 116

• “Equipment” consists of goods other than inventory, farm products, or consumer goods. “Goods” means all things that are movable when a security interest attaches, including fixtures, timber, the unborn young of animals, crops, and manufactured homes. • Some states have a motor vehicle “certificate-of-title” statute, which requires that the security interest be noted on the title of vehicle for the interest to be perfected. In such states, merely filing a financing statement is insufficient to perfect the security interest.

Answer 117

• “Consumer goods” are those used or purchased primarily for personal, family, or household purposes.

Answer 118

• “Proceeds” refer to the following property: (1) anything acquired upon the sale, lease, or other disposition of collateral; (2) anything collected/distributed on account of collateral; (3) rights arising out of collateral; (4) claims arising out of the loss, nonconformity, defect, or interference with the use of collateral (but only to the extent of the value of collateral); OR (5) insurance payable by reason of the loss/nonconformity, defects, or damage to the collateral (but only to the extent of the value of collateral and to the extent payable to the debtor or the secured party). A check given in exchange for secured goods is deemed to be “cash proceeds”.

Answer 119

• Under Article 9 of the UCC, a creditor may properly obtain a security interest in collateral as a means to secure a loan given to a debtor. Enforcing a security interest depends on two factors: (1) attachment; and (2) perfection. Attachment secures the creditor’s rights in the debtor’s collateral, making the security interest valid and enforceable against the debtor and third parties. A security interest attaches to collateral when it becomes enforceable against the debtor with respect to the collateral (unless an agreement expressly postpones the time of attachment). Perfection gives notice of the creditor’s rights in the collateral to other parties who may have claims to the same, and usually determines which party has priority to the collateral. A security interest CANNOT be perfected, unless it has first attached. • Attachment/Enforceability requires: (1) that the creditor extend value to the debtor; (2) the debtor must have rights in the collateral; AND (3) one of the following: o (a) an authenticated record/security agreement memorializing the security interest;  The record/security agreement must (i) be authenticated by the debtor and (ii) reasonably identify the collateral. A supergeneric description of the collateral (i.e. “all the debtor’s assets” or “all the debtor’s personal property”) is not sufficient. A description stating “all debtor’s equipment” IS sufficient, as “equipment” is a defined type of collateral under UCC Art. 9. o (b) the collateral is in the secured party’s possession pursuant to a security agreement; o (c) the collateral is a certificated security in registered form and the security certificate has been delivered to the secured party pursuant to a security agreement; OR o (d) the secured party has control of certain types of collateral (deposit accounts, electronic chattel paper, investment property, or letter-of-credit rights) pursuant to a security agreement.  A Security Agreement is an agreement that creates or provides for a security interest. It may be an oral agreement, unless otherwise specified. • Typically, Perfection is obtained by the creditor filing a financing statement with the proper Secretary of State office that identifies the collateral and his security interest in it. Perfection may also be obtained by taking possession or control of the collateral that is providing the security interest. Consumer “purchase money security interests” are automatically perfected (filing a financing statement is not required). An effective financing statement DOES NOT cure an ineffective security agreement.

Answer 120

• An effective financing statement must: (1) provide the name of the debtor and secured party; (2) indicate the collateral covered by the financing statement; AND (3) be filed by a person authorized by the debtor in an authenticated record, security agreement, or upon acquisition of the collateral. o If the debtor is a registered organization, a financing statement must provide the official registered name of the organization. • A financing statement that substantially complies with the above requirements is effective. Minor errors or omissions will not render a statement ineffective UNLESS the errors or omissions make the statement seriously misleading. A financing statement that fails to sufficiently provide the name of the debtor is deemed seriously misleading UNLESS the statement would be discoverable in a search of the records of the filing office under the debtor’s correct name.

Answer 121

• When a creditor extends value to the debtor for the purpose of enabling the debtor to acquire rights in the collateral, a purchase money security interest (PMSI) arises. • PMSI’s in consumer goods enjoy automatic perfection under Article 9 of the UCC, and the creditor need not file a financing statement to perfect his PMSI with respect to the debtor. The UCC gives special protection to PMSI holders in an effort to encourage lending to consumers. o Consumer goods are goods purchased primarily for the buyer’s personal, family, or household purposes. • In a non-consumer goods transaction, if a person files a financing statement with respect to a PMSI before or within 20 days after the debtor receives delivery of the collateral, then the security interest takes priority over conflicting interests which arise between the time the security interest attaches and the time of filing.

Answer 122

• Generally, a security interest will continue despite any sale, lease, or other disposition of the collateral, UNLESS the secured party authorizes the disposition free of the security interest. Similarly, a security interest will NOT be deemed invalid because the debtor has the right (or ability) to use or dispose of the collateral. A security agreement is effective against purchasers of the collateral. • A perfected security interest will attach to any identifiable proceeds from the disposition of collateral. However, the interest in proceeds will become unperfected on the 21st day after attachment to the same UNLESS: (a) the proceeds are identifiable cash proceeds; (b) the security interest in the proceeds is perfected (other than by perfection of the original collateral) when the security interest attaches to the proceeds or within 20 days thereafter; OR (c) if all of the following conditions are satisfied: (i) the original collateral was perfected under the general filing rule; (ii) the proceeds are collateral that may be perfected under the general rule; and (iii) the proceeds are not acquired with cash proceeds.

Answer 123

• Buyers in the ordinary course of business take free of a security interest created by the seller. Thus, if a person entrusts goods to a merchant who deals in goods of that kind, the merchant has power to transfer title to a buyer in the ordinary course of business (even though the merchant seller did not have title to the goods). • A buyer in ordinary course of business is a person that: (1) buys goods in good faith; (2) without knowledge that the sale violates the rights of another person in the goods; AND (3) in the ordinary course from a merchant (a person in the business of selling goods of that kind).

Answer 124

• Perfected Interest vs. Unperfected Interest: A perfected security interest has priority over a conflicting unperfected security interest in the same collateral. A creditor’s prior knowledge of an unperfected interest is irrelevant to determine priority. • Unperfected Interest vs. Unperfected Interest: When there are two competing unperfected security interests, the first to attach will prevail. • Perfected Interest vs. Perfected Interest: The rule of “first in time, first in right” controls, which means that the first creditor to perfect by filing has priority. Under Article 9 of the UCC, a creditor generally achieves priority by perfecting his security interest before another party. Perfection involves: (1) giving value; AND (2) recording or putting other creditors on notice of the security interest by filing. Therefore, filing is a key element to perfecting the security interest. • PMSI vs. Perfected/Unperfected Interest: A purchase money security interest (PMSI) in consumer goods enjoys automatic perfection under Article 9 of the UCC (the creditor doesn’t need to file a financing statement to perfect the interest). As such, a PMSI in consumer goods takes priority over another perfected or unperfected interest. For PMSI’s in non-consumer goods, a financing statement must be filed in order to perfect the interest; otherwise the security interest in unperfected.

Answer 125

• Judgment lien creditors have priority over conflicting security interests if the person became a lien creditor before the conflicting security interest was perfected. As such, a creditor’s prior perfected security interest will have priority over a subsequent judicial-lien creditor. • Priority also extends to future advances secured more than 45 days after the person became a lien creditor UNLESS the advance is made without knowledge of the lien. However, this rule does not apply to a security interest held by a buyer of accounts or a consignor. • Even if a security interest was not yet perfected (because value had not yet been given or the debtor did not yet have rights in the collateral – so that attachment couldn’t occur yet), a secured party will STILL HAVE PRIORITY over a judicial lien creditor if: (1) the secured party filed a financing statement; (2) the security interest is ultimately attached and perfected; AND (3) one of the following is present (a) there is an authenticated security agreement, (b) collateral is in possession of the creditor, (c) collateral is a certificated security in registered form and the security certificate has been delivered to the secured party, or (d) the secured party has control of certain types of collateral (deposit accounts, electronic chattel paper, investment property, or letter-of-credit rights).

Answer 126

• After default, a secured party may: (1) take possession of the collateral; AND (2) without removal, render equipment unusable and dispose of collateral on a debtor’s premises. • The secured party may proceed either pursuant to: (a) judicial process; OR (b) without judicial process (if it proceeds without a breach of the peace). To determine whether repossession was peaceful courts examine: (i) where the repossession took place; (ii) who was present; and (iii) whether any protests were made. In general, breaking into locked property is a breach of the peace.

Answer 127

• After default, a secured party may sell, lease, license, or otherwise dispose of any or all of the collateral in its present condition or in any commercially reasonable manner. A debtor is liable to the extent that the proceeds from the disposition are not sufficient to satisfy the debt owed. • Notice: A secured party that disposes of collateral MUST send an authenticated notification of the disposition to the debtor and any secondary obligor. The secured party is liable for damages for failing to provide notice, even if the debtor had actual knowledge of the disposition. However, the notice requirement DOES NOT apply if the collateral: (a) is perishable; (b) threatens to decline speedily in value; or (c) is of a type customarily sold on a recognized market. • Disposition at Foreclosure Sale: The disposition of collateral at a foreclosure sale: (1) transfers all of the debtor’s rights in the collateral to a transferee for value; (2) discharges the security interest; AND (3) discharges any subordinate security interests (senior interests are not discharged). A transferee that acts in good faith takes free of the rights of the debtor, even if the secured party fails to comply with the rules governing disposition. • Commercially Reasonable Sale: Every aspect of a disposition of collateral, including the method, manner, time, place, and other terms MUST be commercially reasonable. When deciding whether a sale is commercially reasonable, courts will consider all facts and circumstances (including the amount of advertising performed, normal commercial practices in disposing of the particular collateral, the length of time between the repossession and the sale, and the price obtained). No one factor is conclusive. o A disposition of collateral is deemed commercially reasonable by law if made: (a) in the usual manner on any recognized market; (b) at the current price in any recognized market at the time of the disposition; OR (c) in conformity with reasonable commercial practices among dealers in similar property. • Secured Party’s Purchase of Collateral: Unless agreed otherwise, a secured party may purchase the collateral at: (a) a public sale; OR (b) a private sale only if the collateral is (i) of a kind that is customarily sold on a recognized market, or (ii) the subject of widely distributed standard price quotations.

Answer 128

• A secured party has the right to collect a debt directly from an account debtor (which is a person obligated on an account, chattel paper, or general intangible) if so agreed or after default. • Once the account debtor receives notification (authenticated by the assignor or assignee) of an assignment, the account debtor can no longer discharge its obligation by payments to the assignor (the original account creditor). In such an instance, the account debtor can only discharge its obligation by payments to the assignee (the secured party). • After receipt of the notification, the account debtor may request that the assignee produce proof of the assignment. If the assignee DOES NOT comply within a reasonable time after such request, the account debtor may continue to discharge its obligation by payments to the assignor (the original account creditor).

Answer 129

• A secured party is liable for the debtor’s actual damages for the amount of any loss caused by their failure to comply with applicable rules concerning secured transactions. The damages for loss is generally equal to expectation damages, and may include loss resulting from the debtor’s inability to obtain (or increased costs of) alternative financing. • In addition, irrespective of actual damages, a debtor may recover $500 in statutory damages for a secured party’s failure to comply with specific provisions of Article 9 of the UCC. • A civil penalty is applied if the collateral is consumer goods, wherein a debtor may recover (1) damages for loss, AND (2) either the amount not less than (a) the credit service charge, plus 10% of the principal amount of the obligation, or (b) the time-price differential, plus 10% of the cash price. • Lastly, a court may order or restrain collection, enforcement, or a proper sale of collateral if a secured party is not proceeding in accordance with applicable rules.

Answer 130

• Under Article 9 of the UCC, the impact of non-compliance with Article 9 on recovery of a deficiency in a consumer goods transaction is left to the court to determine. • Some states apply the absolute bar rule in which the secured party is barred from collecting any deficiency remaining after the disposition of collateral when the secured party fails to comply with applicable provisions for a disposition. • Other states apply the rebuttable presumption rule. Under this rule, if the secured party fails to comply with applicable provisions for disposition, it is presumed that the proceeds from the disposition are equal to the debt owed. However, the presumption can be rebutted if the secured party shows that the debt owed is greater than the fair market value of the collateral at the time of disposition. • For non-consumer transactions, Article 9 of the UCC provides that (1) if a debtor places a secured party’s compliance in issue, AND (2) a secured party fails to prove that the disposition was proper, then the amount recoverable in deficiency is limited to an amount by which the total debt exceeds the greater of: (a) the proceeds of the disposition; OR (b) the amount that would have been realized if the secured party complied with the applicable provisions. The amount of proceeds that would have been realized is equal to the total debt UNLESS the secured party proves that complying with the rules would have yielded a smaller amount.

Answer 131

• A defendant is liable for Battery when there is (1) an intentional, (2) harmful or offensive contact, (3) with the plaintiff’s person (including anything connected to the plaintiff). • A defendant acts intentionally when he acts: (a) with the desire to bring about the harm/contact; OR (b) knowing that harm/contact is substantially certain to occur. Bodily harm is the physical pain, illness, or physical impairment to another’s body. A bodily contact is offensive if it offends a reasonable sense of personal dignity (analyzed under the reasonable person standard). A claim may be supported by nominal damages; plaintiff need not suffer actual damages.

Answer 132

• Consent is a defense to intentional torts, and may be express or implied through words or conduct. Consent need not be communicated to the actor. Apparent consent is an effective defense when words or conduct are reasonably understood to be intended as consent, such as with customary practice or the person’s failure to object. Implied by law consent occurs under certain special circumstances, such as medical emergencies. However, the defendant’s actions CANNOT exceed the bounds of the consent given. The consenting party must have capacity, and consent may be withdrawn at any time. Some courts hold that a person cannot consent to a criminal act.

Answer 133

• Privilege is conduct that under ordinary circumstances would subject the actor to liability, but is excused under the circumstances. A privilege must be plead and proved by the defendant. Privilege includes the following defenses listed below. • Necessity: A defendant is NOT liable for harm to the plaintiff’s real or personal property if defendant’s acts were (1) necessary (or reasonably appeared to be necessary), (2) to prevent serious harm to a person or property. Public necessity is when the defendant acts for the public good and is a complete defense. Private necessity is an incomplete privilege (the defendant will be liable for any damages caused unless the purpose of his acts were to help the plaintiff), and occurs when defendant is protecting his own or a few other’s property interests. Necessity is applicable only to intentional torts against property. • Self-Defense/Defense of Others: A defendant is NOT liable for harm to the plaintiff if he: (1) reasonably believed that the plaintiff was going to harm him or another; AND (2) used reasonable force that was necessary to protect himself or another. • Defense of Property: A person may use reasonable force to defend property, but CANNOT use deadly force. • Recapture of Chattels: An owner of chattels wrongfully taken may take prompt action and use reasonable, non-deadly force to recover the chattels from the wrongdoer. No force is deemed reasonable until a demand for return has been made, UNLESS the demand would be dangerous or futile. This privilege is NOT applicable to recapture pertaining to a default in an installment contract for the sale of goods. • Detain for Investigation: In most jurisdictions, shopkeepers have the privilege of (1) temporarily detaining, (2) a person reasonably suspected of theft, (3) in or near their store, (4) for the purpose of an investigation. Reasonable non- deadly force may be used to detain the individual, when a request to remain has been made and refused. • Privilege to Discipline: Parents may use reasonable force in disciplining their children. • Privilege to Arrest: A privilege to arrest is generally regulated by statute, but is more likely to occur when the crime is serious (a felony) and if the defendant directly observed the crime when making the arrest.

Answer 134

• A prima facie case for negligence requires: (1) a duty owed to the plaintiff by the defendant; (2) a breach of that duty; (3) the breach was the actual and proximate cause of the plaintiff’s injuries; AND (4) damages. To make a prima facie case, a party must offer sufficient evidence so that the trier of fact could reasonably find that ALL of the above elements have been met.

Answer 135

• Generally, there is NO duty to act affirmatively. However, an affirmative duty to act will arise in certain circumstances: (1) A pre-existing relationship between the parties (i.e. parent-child, landowner-entrant); (2) The defendant put the plaintiff in peril; (3) The defendant has undertaken to rescue the plaintiff; OR (4) A duty is imposed by law. • A person who undertakes to rescue or aid another is liable for injuries caused by his failure to exercise reasonable care in doing so if: (a) the failure to exercise such care increases the risk of harm; OR (b) the harm is suffered because of the reliance on the person providing help or aid. Under this standard, a person who renders aid is liable for any bodily harm caused to the other person if: (1) aid is discontinued; AND (2) the other person is left in a worse position.

Answer 136

• Every person owes a duty to act as a reasonable prudent person would act under like circumstances. A reasonable prudent person takes appropriate measures to avoid foreseeable risks. This duty of care is owed to all foreseeable plaintiffs. Following community customs and statutory requirements may be relevant as to what conduct is reasonable, but are NOT dispositive. Statutory compliance DOES NOT establish reasonable care or freedom from fault; it is merely evidence of reasonable care. The reasonable person standard also applies to business entities. • A person with a physical disability must act as a reasonable person with the disability would act. However, a person with below average intelligence or a mental disability must act as a reasonable person without the disability would act.

Answer 137

• Children are capable of negligence, but are held to a different standard than adults. Children are held to the standard of care of a hypothetical child of similar age, experience, and intelligence acting under similar circumstances. • If a child is engaged in an adult activity, the child has a duty to act as a reasonable adult would under the circumstances with respect to that activity. Under the Restatement (Third) of Torts, the following are deemed adult activities: driving a car, tractor, motorcycle, or other motorized vehicle (such as motorbikes/scooters and snowmobiles). • Physically disabled children MUST conform their conduct to that of a reasonably careful child with the same physical disability. • Specific Rules for Very Young Children: Under the Restatement (Third) of Torts, children under 5 years old are exempt from negligence liability. Some jurisdictions hold that young children (typically under 7 years old) are presumed incapable of negligence. • Instructions Received: When a child receives instructions from a parent about taking necessary precautions, the child can be found negligent for failing to follow those instructions.

Answer 138

• A professional (doctors, nurses, lawyers, accountants, engineers, architects, psychologist/psychotherapist) owes a duty to act with the knowledge and skill as an average member of that profession practicing in a similar community. One holding himself out as a specialist should be held to the standard of care and skill of the average member of the profession practicing the specialty, taking into account the advances in the profession. Expert testimony is generally required to show that the professional complied or breached the standard of care. • A medical doctor is held to the degree of care and skill of the average qualified practitioner. Most courts analyze the doctor’s conduct under national standards rather than those in the doctor’s locality or community. A doctor has a duty to obtain informed consent from his patient before treatment, which requires the doctor to disclose risks of treatment that a reasonable patient would want to know. • A psychologist/psychotherapist has a duty to warn potential victims when their patient makes a credible threat to others. In most states, a therapist will liable for a victim’s injury if (1) the therapist believed the patient posed a real risk, (2) of serious physical violence, (3) to a readily identifiable victim, and (4) the therapist failed to take steps to warn the victim.

Answer 139

• Some states require landowners to exercise reasonable care to ALL entrants upon his land to take appropriate measures to avoid foreseeable risks. Other states still determine what duty of care is owed by a landowner by considering the type of person (trespasser, licensee, or invitee) is on the property. The same rules apply to a possessor of land (i.e. a tenant or tenant business owner). o If the entrant is an Undiscovered Trespasser (one who enters the land of another without permission), in most jurisdictions, no duty is owed by the landowner. o If the entrant is an Anticipated Trespasser (one who enters the land of another without permission, but which may be expected by the landowner), the landowner must: (1) use reasonable care in operations on the property; AND (2) warn of (or make safe) highly dangerous artificial conditions that the landowner knows of.  Under the Attractive Nuisance Doctrine, a land owner/possessor owes a duty to child trespassers to make the premises reasonably safe or warn of hidden dangers on his land. A land owner/possessor is liable for the harm to a trespassing child if: (1) he knows (or should know) of a dangerous artificial condition on his land that is likely to cause death or serious bodily injury; (2) he knows (or should know) that children are likely to frequent the area; (3) children are unlikely to discover the condition or appreciate the risks involved; (4) the risk of harm outweighs the expense of making the condition safe; AND (5) he fails to exercise reasonable care in eliminating the danger or protecting children from it. The attractive nuisance doctrine is less likely to apply if the child engages in an adult activity. o If the entrant is a Licensee (invited on the owner’s property as a social guest), the landowner must: (1) exercise reasonable care in operations on the property; AND (2) warn of (or make safe) dangerous conditions that are known to the landowner, but are not apparent to a guest. A person is a licensee if he reasonably believed, based on the owner’s conduct or words, that he was permitted to enter the owner’s land. o If the entrant is an Invitee (invited onto the property for the owner’s benefit, such as a business), the landowner owes all the duties he would to a licensee. In addition, the landowner has a duty to make reasonable inspections of the property to find and make safe non-obvious dangerous conditions. A landowner is liable for failing to warn of dangerous conditions that would have been discovered upon reasonable inspection. Generally, a landowner is allowed a reasonable time-period to discover a dangerous condition and remedy it. Courts have held that when food is sold through self-service, the business must take greater precautions and make more frequent inspections.

Answer 140

• Under the doctrine of negligence per se, a statute may be used to substitute the duty of care. If negligence per se applies, the duty and breach elements are established when the defendant breaches the statute. Then the plaintiff need only prove causation and damages. • To use negligence per se, plaintiff must show: (1) that the statute’s purpose is to prevent the type of harm that the plaintiff has suffered; AND (2) that the plaintiff is in the class of persons the statute seeks to protect. • There are two exceptions when the standard of care will NOT be substituted for the statute even when the above test is met. The first is when the defendant’s compliance with statute would have been more dangerous than the violation of it. The second is when compliance with the statute is impossible.

Answer 141

• When the breach element of negligence is very difficult to prove, the court may allow a plaintiff to use the doctrine of “res ipsa loquitur” (which means the thing speaks for itself) to prove the breach element. • Traditional Test: To be applicable, a plaintiff must show: (1) that her injury is of a sort that typically does not occur in the absence of negligence; (2) the instrumentality (thing/object) which caused her injury was in the defendant’s exclusive control; AND (3) that the plaintiff NOT cause or contribute to the injury. • Restatement (Second) Test: Res Ipsa Loquitur is applicable when: (1) the event is of a kind that ordinarily does not occur in the absence of negligence; (2) other responsible causes are sufficiently eliminated by the evidence (including the conduct of the plaintiff and third persons); AND (3) the indicated negligence is within the scope of the defendant’s duty to the plaintiff. Plaintiff need not show that reasonable care would completely eliminate the risk; only that it ordinarily does not occur in the absence of negligence. • Restatement (Third) Test: The factfinder may infer the defendant’s negligence when (1) the accident causing the plaintiff’s harm is a type that ordinarily happens as a result of the negligence of a class of actors, (2) of which the defendant is the relevant member. • When an action is against multiple defendants, res ipsa loquitur generally CANNOT be used to show liability of any particular defendant.

Answer 142

• A plaintiff must show that the defendant’s conduct was BOTH the actual and proximate cause of the injury. Actual cause is the “but for” cause – but for defendant’s negligence, plaintiff would not have been injured. Under the Substantial Factor Test, something that is a substantial factor in bringing about the injury is an actual cause (even if the injury had multiple causes). Proximate cause is the legal cause, which means that the injury must have been a foreseeable result of the breach. A defendant is NOT liable for harms that are too remote from the defendant’s conduct.

Answer 143

• Any act that occurs after the defendant’s breach that contributes to the harm is an intervening cause. Intervening causes that are dependent on (a natural reaction to) the defendant’s wrongful acts are usually foreseeable. If the intervening cause resulted in an unexpected injury to the plaintiff, it is usually deemed unforeseeable and will absolve the defendant of liability to the plaintiff. • Intervening medical malpractice is ALWAYS deemed foreseeable. Intervening criminal acts are usually not foreseeable UNLESS: (a) the defendant should have anticipated the criminal act; OR (b) if the defendant’s conduct makes the criminal act more likely to occur. Courts have held that injuries sustained from a plaintiff running from the danger are foreseeable. Similarly, an injured rescuer’s injuries have been deemed foreseeable under the “danger invites rescue” doctrine. • Liability for Increased Harm Caused by Rescue Efforts: A negligent tortfeasor who causes the initial injury is usually liable for increased/enhanced harm caused by others providing aid (including negligent and non-negligent rescue efforts). Such rescue efforts are typically NOT deemed a superseding cause of the enhanced harm if the risks and/or injury caused is part of a normal rescue attempt.

Answer 144

• The Eggshell Plaintiff Rule means that a tortfeasor takes his victim as he finds him. Thus, a defendant is liable for ALL harm a plaintiff suffers as a result of his conduct, even if the plaintiff suffered from a preexisting mental or physical condition that made the harm different or greater than what a normal person might suffer. • A plaintiff is entitled to recover any emotional distress damages stemming from a physical injury. However, a plaintiff will need to establish the tort of Negligent Infliction of Emotional Distress to recover mental distress damages not related to any physical injury.

Answer 145

• Under pure comparative negligence, the plaintiff’s negligence or assumption of risk will NOT bar recovery. However, it is a factor in determining the percentage of fault of each party, and will reduce the plaintiff’s recoverable damages by the percentage of his own fault. • In a partial comparative negligence jurisdiction, if a plaintiff contributed less than 50% to his own injury, then his damages are reduced by the percentage of fault that is attributable to him. However, if the plaintiff contributed more than 50%, then the plaintiff’s claim is barred. • In a contributory negligence jurisdiction, a plaintiff CANNOT recover damages if he contributed to his own injury. However, two exceptions to this rule exist: (a) when the defendant had the last opportunity to avoid the accident; OR (b) if the defendant was reckless. Contributory negligence is only applied in a few states.

Answer 146

• Generally, there are three scenarios where a plaintiff may recover for negligent infliction of emotional distress: (a) a near miss case; (b) a bystander claim; or (c) in certain situations where a pre-existing relationship exists. • In order to recover in a near miss case: (1) there must be negligence by the defendant, (2) which creates a foreseeable risk of physical injury, (3) the plaintiff must be in the zone of danger, AND (4) the plaintiff must manifest physical symptoms. • In order to recover in a bystander claim: (1) there must be negligence by the defendant; (2) the plaintiff must be a contemporaneous witness to a negligent bodily injury inflicted on a close family member (i.e. parent, child, spouse); AND (3) the plaintiff must manifest physical symptoms (some jurisdictions do not require this). A few jurisdictions require that the plaintiff be in the zone of danger to recover. • The last scenario where a plaintiff can recover is where: (1) there is a pre-existing relationship between the plaintiff and defendant; AND (2) the negligent act can foreseeably cause distress. Recovery is rare, and is usually only available in egregious situations.

Answer 147

• In certain situations, a principal (or employer) may still be liable even if the doctrine of respondeat superior is inapplicable. Such situations include when: (a) the principal intended the conduct or consequences; (b) the principal was negligent or reckless in selecting, training, retaining, supervising, or controlling the agent; (c) the conduct involved a principal’s non-delegable duty to an injured person that it had a special relationship with; OR (d) when (i) the agent had apparent authority, (ii) the agent’s actions taken with apparent authority constitute the tort or enable the agent to conceal its commission, and (iii) the third-party relied on that authority. Apparent authority is created when: (1) the employer holds the agent out as having authority; AND (2) the third-party reasonably believes the agent has authority to act.

Answer 148

• In a jurisdiction permitting joint and several liability, if multiple defendants are the proximate cause of a single indivisible harm, then the plaintiff may recover the entire amount of his damages from any single defendant (but may not receive a double recovery). A defendant who pays more than his fair share of the damages may bring an action for contribution against the other defendants for the difference.

Answer 149

• Three doctrines exist that allow a jury to find multiple defendants liable even if the plaintiff cannot show which defendant’s conduct caused his injury. • Doctrine of Alternative Liability: The doctrine of alternative liability allows the jury to find ALL defendants liable if (1) multiple defendants are negligent, (2) but it is unclear which one caused the plaintiff’s injuries. • Doctrine of Joint Enterprise: The doctrine of joint venture or joint enterprise allows the negligence of one defendant to be imputed to the others if: (1) multiple defendants were engaged in a common project or enterprise; AND (2) all defendants have made an explicit or implied agreement to engage in tortious conduct. • Doctrine of Market Share Liability: Market share liability is appropriate where the following factors are present: (1) all the named defendants are potential tortfeasors; (2) the allegedly harmful products are identical and share the same defective qualities (or were “fungible”); (3) the plaintiff is unable to identify which defendant caused her injury through no fault of her own; AND (4) substantially all of the manufacturers which created the defective products during the relevant time are named as defendants. If applicable, the manufacturers (of the product identical to the one which harmed the plaintiff) are liable in their proportion to their share of the market at the time plaintiff’s injury occurred, regardless of actual causation. The rationale for this theory is that each manufacturer’s liability would approximate its responsibility for the injuries caused by its own products.

Answer 150

• Under Strict Products Liability, a commercial supplier of a defective product is subject to strict liability for any harm caused by the product, regardless of any wrongdoing or negligence. A claim for strict products liability requires the plaintiff to show: (1) the product was defective (manufacturing defect, design defect, or failure to warn) when it left the hands of the manufacturer or seller; (2) the product was not altered when it reached the plaintiff; (3) the product caused an injury to plaintiff when it was being used in an intended or unintended foreseeable use; AND (4) the defendant is a commercial supplier who routinely deals in goods of this type. • The plaintiff DOES NOT have to be a purchaser of the product to assert a claim for strict products liability (no privity is required). Damages for personal injuries and property damage may be recovered. Recovery solely for economic loss is NOT allowed. • Proving that the product was defective is based upon one of three theories of strict products liability: (a) manufacturing defect, (b) failure to warn, OR (c) design defect. o Evidence of a manufacturing defect requires that (1) the product differs from the intended design (some defect in manufacturing/production); AND (2) it is more dangerous than if made properly. A harmful ingredient in a food product constitutes a defect if a reasonable consumer would not expect the food product to contain that ingredient. o Evidence of a failure to warn requires that (1) the plaintiff was not warned of the risks regarding use of the product, (2) which are not obvious to an ordinary user but known to the designer/manufacturer. A warning must be proportionate to the risk involved with normal use of the product. o A design defect exists if there was a way to build the product that: (1) is safer; (2) is more practical; AND (3) has a similar cost. When a design defect is alleged, the trier of fact (jury or court) must balance the alternative designs available (including their cost and effect on utility) against the risk to consumers. • Definition of Commercial Supplier: A strict products liability suit may only be brought against a commercial seller or distributor of goods. A commercial seller or distributor is any person or entity who is engaged in the business of selling goods of the type (routinely sells such goods). Casual sellers and service providers are NOT commercial suppliers, and a strict products liability action CANNOT be maintained against them. Any commercial seller in the distribution chain (including a retailor or wholesaler) is deemed to be a commercial supplier, and a strict products liability action may be brought against them regardless if there is privity with the plaintiff.

Answer 151

• A valid express trust requires: (1) a definitive beneficiary (the beneficiary can be reasonably ascertained now or in the future); (2) a settlor with capacity; (3) an intent to create a trust; (4) a trustee; (5) a valid trust purpose; (6) trust property (the res); AND (7) compliance with any State formalities (i.e. signed in front of notary). o The same execution formalities for a will (i.e. two witnesses) are NOT required to create or amend a trust. Under the Uniform Trust Code, no execution formalities are required. • Beneficiaries can be natural persons, corporations, or other organizations. • Intent to create a trust may be established by a promise that creates enforceable rights in a person who (immediately or later) holds these rights as trustee. An oral promise supported by consideration is sufficient to create enforceable rights, unless the State requires certain trust formalities or the statute of frauds applies. • The Trustee must have duties to perform, and the same person CANNOT be the sole trustee and sole beneficiary. Although a trust must have a named trustee, the trust will NOT fail solely because that person refuses to act as trustee, dies, is removed, or resigns. In such instance, the court will appoint a new trustee. • A trust is not created until it receives valid property. The property interest does not need to be substantial, and does not have to be transferred contemporaneously with the signing of the trust instrument. A trust instrument signed during the settlor’s lifetime is valid even if the property was transferred to the trustee at a much later date, including after the settlor’s death (i.e. through a pour-over provision in a will). • Oral Creation of a Trust: Under the Uniform Trust Code (UTC), a trust can be created orally by the settlor if its terms are established by clear and convincing evidence. In such instance, no writing is required. • Trust for the Benefit of “Friends”: A trust for benefit of “friends” has indefinite beneficiaries. If a trustee is instructed to distribute trust assets to an indefinite class, NO member of that class may enforce the trust. o Restatement (Third) of Trusts Exception: A trust for “friends” MAY BE VALID if: (a) some ascertainable group of friends was intended; OR (b) an implied term of the trust authorizes the trustee to determine who the friends are.

Answer 152

• The trust instrument may state whether the trust is irrevocable or revocable by the settlor. If no designation is set forth, then state law will govern whether the trust is revocable or irrevocable by default. • The majority view and the Uniform Trust Code (UTC) provides that a trust is revocable by default UNLESS stated otherwise. • The minority view is that trusts are irrevocable by default UNLESS expressly stated otherwise. Generally, an irrevocable trust CANNOT be modified or revoked by the settlor after its creation. • A revocable trust becomes irrevocable upon the death or incapacity of the settlor. o NOTE: To date, the UTC has been adopted by 35+ jurisdictions. As such, UTC Section 602 that provides that trusts are revocable by default is now the majority rule. Previously it was the minority rule, but that has changed over time since more jurisdictions have adopted the UTC.

Answer 153

• A pour-over provision in a will gifts property to a previously established trust. The property is distributed according to the terms of the trust. A pour-over will provision is distinguished from a testamentary trust because it does not create a trust. Instead, the pour-over will transfers property to a trust already in existence. As such, a pour-over will must be connected to an inter vivos trust (a trust made during the testator’s life). • A testamentary disposition to an inter-vivos trust is valid, even if the trust instrument is amendable or revocable. But, that disposition shall be given effect in accordance with the terms of the trust instrument (including an amendment thereto) as it appears on the date of the testator’s death. Unless otherwise provided in a will, a revocation or termination of the trust before the testator’s death causes the gift to lapse.

Answer 154

• A Discretionary Trust occurs when a trustee has absolute discretion and power to determine when and how much of the trust property is distributed to the beneficiaries of the trust. The trustee’s exercise of discretion MUST be in good faith. A court will generally not interfere with a trustee’s exercise of discretion, unless the trustee is abusing such power. • Whether the trustee has abused their discretion depends on: (1) the terms of the trust instrument; and (2) the other duties of the trustee (such as the duty to administer the trust according to its terms, duty to act impartially, and duty of care).

Answer 155

• Cy pres is an equitable doctrine that applies to charitable bequests and charitable trusts. Courts will apply cy pres to modify a charitable trust to be consistent with and “as near as possible” with the settlor’s or testator’s intent, if the purpose of the trust or bequest is frustrated (the trust becomes unlawful, impracticable, impossible, or wasteful). The cy pres doctrine only applies if the testator had a general charitable intent. • A settlor has general charitable intent when the settlor provides a particular charitable purpose, rather than naming a specific charity. The majority of courts and the Uniform Trust Code (UTC) will presume a general charitable intent. The absence of a reverter clause (that property will go to another beneficiary in the event that property cannot be used for the charitable purpose) is an indication of a general charitable intent.

Answer 156

• A spendthrift provision in a trust (one preventing the transfer of a beneficiary’s interest) is valid only if it restrains both voluntary AND involuntary transfers. • A spendthrift interest means that the interest CANNOT be sold or assigned by the income beneficiary, nor may any creditors reach it (but the creditor may attempt to collect directly from the beneficiary after a payment is made from the trust). • However, there are five exceptions to this rule when a creditor CAN reach the beneficiary’s interest. They are: (1) a judgment creditor who has provided services for the protection of a beneficiary’s interest in the trust; (2) a creditor who furnishes necessities (i.e. necessary food, shelter, clothing, and medical care) – only some jurisdictions recognize this exception; (3) an order for child support or alimony; (4) any claim by the state or federal government (i.e. federal tax liens); or (5) a self-settled trust where the settlor retains an interest (i.e. a revocable trust). • Spendthrift trusts DO NOT provide protection for mandatory distributions of trust property. • A spendthrift provision DOES NOT prevent a beneficiary from reaching trust assets if the trustee abused his discretion in failing to make payments.

Answer 157

• If a beneficiary’s interest is not subject to a spendthrift provision, then the court may authorize a creditor to reach the beneficiary’s interest by attachment of present or future distributions to the beneficiary. If a beneficiary’s interest is subject to a spendthrift provision, a creditor is generally prohibited from attaching that interest, and may only attempt to collect directly from the beneficiary after a payment is made. If the debtor is a remainder beneficiary, the creditor will need to wait until the trust terminates to receive the trust property. • Discretionary Trusts: Whether or not a trust contains a spendthrift provision, a creditor cannot compel a distribution to a beneficiary that is subject to the trustee’s discretion, even if: (a) the discretion is expressed in the form of a standard of distribution; OR (b) the trustee has abused their discretion. • Discretionary Trusts & Spousal and Child Support: If a judgment or order exists against the beneficiary for unpaid spousal or child support, the court may order a distribution to satisfy the judgment and direct the trustee to pay the child, spouse, or former spouse an equitable amount of the judgment/order.

Answer 158

• Under the Uniform Trust Code (UTC), a trust may be terminated in the following instances: (1) it is revoked or expires pursuant to its terms (including the settlor revoking a revocable trust); (2) the material purpose of the trust has been achieved (a material purpose is a particular concern or objective of the settlor); (3) the trust has become unlawful, contrary to public policy, or impossible to achieve; (4) the settlor and all beneficiaries consent (even if termination is inconsistent with purpose of the trust); (5) all beneficiaries consent and the court decides that continuance is not necessary to achieve any purpose of the trust; (6) termination will further the purpose of the trust because of circumstances not anticipated by the settlor; (7) the court applies the cy pres doctrine to terminate the trust; or (8) the court or trustee determines that the value of the trust property is insufficient to justify the cost of administration. • Under the UTC, a settlor may amend or revoke a revocable trust by: (a) substantial compliance with a method provided in the terms of the trust (when the trust provides such a method); (b) a later will or codicil that expressly refers to the trust or specifically devises property that would otherwise have passed according to the terms of the trust; OR (c) any other method manifesting clear and convincing evidence of the settlor’s intent (unless the trust instrument provides otherwise). Upon revocation of a revocable trust, the trustee shall deliver the trust property as the settlor directs.

Answer 159

• The trustee must continue to administer the trust until the trust terminates, and must hold the trust assets until the remaindermen are determined. • Under the common law, the trustee owed beneficiaries the duty to act with care, skill, and prudence. • Under the Uniform Trust Code, a trustee MUST administer the trust: (1) in good faith; (2) in accordance with the trust purpose and terms; AND (3) in the interests of the trust beneficiaries. • The trustee MUST exercise his powers in good faith and in accordance with the terms and purposes of the trust and the interests of the beneficiaries, even if the trust grants the trustee broad range of discretion (including the use of terms such as “absolute” or “uncontrolled”).

Answer 160

• A trustee must administer the trust solely in the interest of the beneficiaries and CANNOT engage in self-dealing. A transaction involving trust property that is entered into by the trustee for the trustee’s own benefit or that is affected by a conflict between the trustee’s fiduciary and personal interests is voidable by a beneficiary affected by the transaction. Alternatively, a beneficiary can seek a damages award for the trustee’s self-dealing. • Five exceptions to this rule exist: (1) if the transaction was authorized by the terms of the trust; (2) if the transaction was approved by the court; (3) the beneficiary did not commence a judicial proceeding within the required time; (4) the beneficiary consented to the conduct, ratified the transaction, or released the trustee of liability; OR (5) the transaction occurred before the person became trustee.

Answer 161

• The Prudent Investor Rule requires that a trustee exercise the degree of care, skill, and prudence of a reasonable investor investing his own property. o This includes diversifying trust assets, avoiding risky investments, and the duty to monitor investments and sell and reinvest investments as necessary to keep the trust assets productive. • In assessing whether a trustee has breached this duty, a court must consider a number of factors, including: (1) the distribution requirements of the trust; (2) general economic conditions; (3) the role the investment plays in relationship to the trust’s overall investment portfolio; and (4) the trust’s need for liquidity, regularity of income, and preservation or appreciation of capital.

Answer 162

• Trust receipts and disbursements are allocated according to State law either to income or principal. • The following items MUST be allocated to income: (1) receipt of rental payments from real or personal property; (2) money received from an entity (i.e. cash dividends, interest on investments); and (3) ordinary expenses and repairs. • The following items MUST be allocated to principal: (1) proceeds from the sale of a principal asset; (2) all other property received (other than money received from an entity); and (3) extraordinary expenses and repairs – expenses/ repairs due to an unusual or unforeseen occurrence that is beyond the usual, customary, or regular kind.

Answer 163

• Remainder beneficiaries (also known as remaindermen) are NOT entitled to receive trust property UNTIL the termination of the trust.

Answer 164

• When a testator/settlor (the donor) gives another person the power to decide where and to whom the testator’s property will go, that person (the donee) has a power of appointment. A general power of appointment is granted when the testator DOES NOT leave any conditions or restrictions as to the appointment of the property. Thus, the donee is permitted to appoint the power to anyone, including himself. A testamentary power of appointment can only be exercised by the donee’s will and according to the donor’s conditions. • The donee’s power is effectively exercised in an instrument only if: (1) the instrument is valid under state law; (2) the terms indicate the holder’s intent to exercise the power and are consistent with the conditions (if any) imposed by the testator; AND (3) the appointment is permissible. • An appointment is permissible if it’s to a person or group authorized by the donor. In most states, a donee’s power is NOT exercised in a general residuary clause in a will UNLESS the donee’s intent to exercise the power is referenced. Intent to exercise the power is presumed in a blanket exercise clause (i.e. “All the residue and remainder of my estate, including any property over which I have a power of appointment, I devise to…”). • Under the Uniform Probate Code (UPC), absent a requirement that a power be expressly or specifically referenced, a general residuary clause expresses an intention to exercise a power of appointment held by the testator only if: (a) the testator’s will manifests an intention to include the property subject to the power; OR (b) the power is a general power and the creating instrument does not contain a gift if the power is not exercised. • In some states and under the UPC, if the donor required the power be exercised by an express or specific reference, a blanket exercise clause is not sufficient to show intent to exercise the power, and additional evidence will be needed to prove the donee’s intent.

Answer 165

• A special power of appointment is one in which the donee (the holder of the power) may only appoint property to a limited class of persons authorized by the donor. The donor MUST indicate certain individuals or definite groups. • Unless the instrument giving the power states otherwise, the donee MAY make an appointment in any form (including one in trust), and can create more limited interests (e.g. life estate). • Appointments made to those NOT authorized by the donor are ineffective. The holder of a special power of appointment CANNOT appoint such property to himself, his estate, his creditors, or his estate’s creditors.

Answer 166

• Appointments made to those NOT authorized by the donor are ineffective. If more than one appointment is made at a time, an appointment that is ineffective will not affect an appointment that is valid. If the donee of a general power of appointment makes an ineffective appointment, the property passes to the taker-in-default designated by the donor of the power. If the donor did not provide for a taker-in-default, the property passes to the donee or the donee’s estate.

Answer 167

• For an interest to be valid under the common law Rule Against Perpetuities (RAP), it must vest within a life in being at the time of the grant plus 21 years. This rule invalidates any interest that will not vest during the time period AND those that hypothetically may not vest within the time period. A class gift becomes vested under the RAP when (1) the class closes; AND (2) all conditions for every member of the class are satisfied. • Some states have modified the common law rule, and provide that a non-vested property interest is invalid ONLY IF it actually does not vest within 21 years after the death of a life in being at the time the interest was created. Rather than invalidate interests on the possibility that they will not vest, this approach waits to see if the interest will actually not vest. • In addition, certain states have statutorily modified the common law rule such that the courts will reduce any age contingencies that violate the rule to 21 years.

Answer 168

• A class gift is a gift to a group of persons described collectively (usually in terms of their familial relationship). • Under the common law, the words of a testator/settlor were given their legal meaning. However, modern courts are more likely to consider the testator/settlor’s intent. The terms “children” and “issue” are interpreted in accordance with intestate succession rules. An adopted child inherits the same as a natural child when the adopted child is not the relative of the adopting parent. This applies to inheritance rights not only of the adopting parent, but the adopting parent’s family. Therefore, if a class gift is made to the issue or children of an adopting parent, the adoptive child will share in that gift as would a natural child of that parent. • Class gifts generally close at the death of the testator/ settlor. Under the Rule of Convenience the class is closed when any member of the class is entitled to possession of the gift. • When a gift to a class is involved, whether the gift to a predeceased member of the class will go into the residuary estate or be divided amongst the other class members depends on whether a group of persons is named (i.e. “my children”) or whether individual members of the class are specifically named (i.e. “Tom, Mary, and Joe”). When the class is specifically named, the gift will lapse and fall into the residuary estate unless an anti-lapse statute applies. When the class members are named as a group, the predeceased member’s share will be divided amongst the other members, unless there is a provision in the will to the contrary or an anti-lapse statute applies. • A class gift may be based on a contingency. If so, remaindermen are entitled only to the gift if the specified conditions are satisfied.

Answer 169

• Any property not passing by a valid will or by operation of law will be governed by a state’s applicable intestacy statute. • If the decedent leaves only a surviving spouse and no issue, in most states the surviving spouse will receive the entire estate. However, some UPC states provide that a certain portion of the estate will be given to the decedent’s parents and their issue. • If the decedent leaves a surviving spouse and issue (i.e. children, grandchildren), then in most states the surviving spouse will receive a certain portion of the estate (either a certain percentage or a certain amount plus a percentage) and the issue will take a certain percentage. Under the Uniform Probate Code (UPC), the surviving spouse will receive the entire estate if all issue are issue of the surviving spouse. • If the decedent does not leave a surviving spouse, the estate passes to the decedent’s issue. • If the decedent does not leave a spouse or issue, the estate passes in the following order: (1) to the decedent’s surviving parents equally or to one parent (if only one survives); (2) to the issue of the decedent’s parents (decedent’s siblings and their issue); (3) to more remote ancestors; and (4) to the issue of more remote ancestors. • In the majority of states, the distribution of intestate assets will be performed using the Per Capita at Each Generation approach. • “Heirs” are persons whom assets are distributed to if a decedent dies intestate.

Answer 170

• A will is valid if the specific formalities provided by state law are followed. • Most states require a will to be in a writing signed by the testator and witnessed by at least two individuals. Under the Uniform Probate Code (UPC), a will must be: (1) in writing; (2) signed by the testator (or by some other individual in the testator’s conscious presence and by the testator’s direction); AND (3) either (a) signed by at least two individuals within a reasonable time after witnessing the signing of the will or (b) notarized. • A valid will requires intent by the testator to create the will. Thus, if it’s proven that the testator lacked testamentary intent, a will shall be deemed invalid. Extrinsic evidence is admissible to prove intent. • Under the majority view and the UPC, a will is signed by a witness in the testator’s presence if it’s signed within the range of the testator’s senses (the “conscious presence” test). Under the minority view, a will is signed by a witness in the testator’s presence if it’s signed within the testator’s line of sight (the “line-of-sight” test).

Answer 171

• Under the Common Law, the signing of the will must be witnessed by two disinterested witnesses (individuals who are not receiving a benefit under the will). • Today, All States have abolished the common law rule, and a will with an interested witness is VALID. In such instance, the gift or bequest to the interested witness will be deemed void (a.k.a. the gift will be purged). However, most states provide for two exceptions where the interested witness’s gift/bequest will remain valid: (a) if the interested witness is an heir — any gift to that witness will be the lesser of (i) their intestate share or any gift under a prior will, or (ii) the gift under the current probated will; OR (b) if another disinterested witness was present so that there were still a total two disinterested witnesses.

Answer 172

• A codicil is an instrument made after a will is executed that modifies, amends, or revokes a will. A codicil MUST satisfy the same formalities as a will to be valid. Execution of a codicil republishes the will, meaning courts will consider the original will to have been executed on the same date as the codicil. A validly executed codicil will cure any interested witness issues with the original will or document (as long as the codicil is witnessed by the requisite number of disinterested witnesses). Most courts hold that a codicil CANNOT republish an invalid will.

Answer 173

• A holographic will is a handwritten will (or handwritten alteration to a will) that is NOT witnessed. Not all states recognize holographic wills. In the states that do, some require that the writing also be subscribed by the testator (signed at the end of the will). • In the states that recognize holographic wills, a valid holographic codicil revokes any earlier valid will to the extent it conflicts with the codicil.

Answer 174

• A bequest through an unattested document is valid if it meets the requirements to be incorporated into a will by reference. • In most states, a document or writing may be incorporated into a will by reference if: (1) it was in existence at the time the will was executed; (2) it is sufficiently described in the will; AND (3) the testator intended to incorporate it into the will. • The Uniform Probate Code (UPC) permits a document or writing bequeathing tangible personal property (other than money) to be incorporated into the will if it: (1) was signed by the testator; AND (2) describes with reasonable certainty the items and the devisees. Under the UPC, the document is NOT required to be in existence at the time the will is executed, and may be prepared after execution.

Answer 175

• A will is revoked by physical act if: (1) the testator intended to revoke the will; AND (2) the will is burned, torn, destroyed, or cancelled by the testator (or someone at his direction and in his presence). • Under the common law, words of cancellation are valid only if they come in physical contact with words of the will (i.e. written over). Under the Uniform Probate Code, words of cancellation are valid even if they did not physically contact the words of the will. • A testator CANNOT substitute a gift by words of cancellation (e.g. crossing out the type of gift, and substituting it for another type of gift). In such instance, the revocation by cancellation may be deemed VALID, but the substitution is NOT VALID.

Answer 176

• A testator may revoke a will by executing a subsequent valid will or codicil. Execution of a new will revokes a previous will only to the extent that the previous will conflicts with the new will UNLESS the new will expressly revokes the previous will in its entirety.

Answer 177

• The Dependent Relevant Revocation Doctrine (DRR) cancels a previous revocation that was made under a mistaken belief of law or fact by the testator. The doctrine applies when the testator would not have revoked his original will or bequest but for the mistaken belief that another will he prepared would be valid. • Courts apply DRR only when there is a sufficiently close identity to the revoked bequest and the bequest in the invalid subsequent will. When determining whether to apply DRR, courts will consider the testator’s intent by comparing the distributions with and without applying DRR, and decide which is closer to the testator’s intent.

Answer 178

• At common law, gifts to heirs during a testator’s lifetime were considered advancements on the heir’s intestate share of the estate, and would be deducted from the heir’s share of the estate. • Under the modern view and Uniform Probate Code, gifts to heirs during a testator’s lifetime are NOT deemed advancements UNLESS: (a) the will provides for deduction of the gift; OR (b) it was indicated in writing that the property was in satisfaction of a devise or that its value will be deducted from the value of the devise. Some states DO NOT require a writing, and any evidence of the testator’s intent may be considered.

Answer 179

• Under the common law rule of lapse, all gifts in a will were conditioned on the beneficiary surviving the testator. Any gifts to beneficiaries who did not survive the testator failed and passed to the residuary estate or under intestacy. • However, a gift to a deceased beneficiary will NOT lapse if an anti-lapse statute applies. The anti-lapse statute provides that, where a beneficiary under a will predeceases the testator, the gift will vest in the issue of that predeceased beneficiary if: (1) the predeceased beneficiary is a specified descendant of the testator (specified by statute); AND (2) the beneficiary leaves issue who survive the testator. Under the Uniform Probate Code, the anti-lapse rule applies to gifts to issue (i.e. children, grandchildren), stepchildren, grandparents, and grandparent’s issue (i.e. siblings). • An anti-lapse statute provides only the default rule. Specific language in a decedent’s will controls if it covers lapse or non-lapse of a gift. For example, the terms of a will control if it provides a specific anti-lapse scheme or it provides for an express survivorship requirement for the person to receive the bequest (even if different from an applicable default rule contained in a statute). • Under the UPC, the phrase “if he or she survives me” in a will DOES NOT evidence a testator’s intent for an anti-lapse statute to be inapplicable. In such case, an anti-lapse statute will apply.

Answer 180

• Under the common law identity theory, a specific gift is adeemed by extinction if it cannot be identified at the time of the testator’s death or the testator does not own it at the time of death. This can occur when the testator makes a specific gift, but the property is later destroyed or sold before their death. The testator’s intent is not relevant. In most jurisdictions today, a specific gift will adeem only if the testator intended the gift to fail. • If the testator DID NOT intend for a specific gift to fail, the beneficiary is entitled to: (a) any real property or tangible personal property (owned by the testator at death) which the testator acquired as a replacement for the specific gift; OR (b) a monetary devise equal to the value of the specific gift. Additionally, if the specific gift was destroyed, the beneficiary is entitled to any unpaid insurance recovery or other recovery for injury to the property.

Answer 181

• If there are more creditor’s claims against an estate than there are assets to cover all of the gifts made under the will, the gifts under the will abate (be reduced). Abatement is not giving effect to bequests in the will so that creditors’ claims against the estate can be satisfied. Creditors of the estate always have priority to assets of the estate over beneficiaries. Absent provisions in the will, the order in which a testator’s property abates is as follows: (1) property passing by intestacy; (2) residuary gifts; (3) general gifts; (4) specific gifts. Each category must be fully abated before moving onto the next category. Abatement within each category is in proportion to the amounts of property each of the beneficiaries would have received.

Answer 182

• An individual who feloniously and intentionally kills the decedent forfeits all benefits and entitlements to the decedent’s estate. If the decedent dies intestate, the estate passes as if the killer disclaimed her intestate share. A conviction (after all appeals are exhausted) is conclusive of a felonious and intentional killing. Otherwise, it may be based on a preponderance of the evidence proved during a probate or related court proceeding. • Modern precedent holds that a state’s slayer statute DOES NOT apply to a person acting as an agent under a durable health-care directive when withholding treatment to the decedent, as withholding treatment is NOT considered to be the cause of death. However, this issue is unresolved, and there is still an argument that a slayer statute may bar recovery from a decedent’s estate in such instance.

Answer 183

• A disclaimer is when a person renounces their legal right to inheritance. An effective disclaimer must: (1) be declared in writing; (2) describe the interest or power disclaimed; (3) be signed by the person making the disclaimer; AND (4) be delivered or filed. • Under common law, a disclaimer must be made within a reasonable time. Some states require a disclaimer to be made within 9 months of (a) the death of the decedent, or (b) the vesting of a future interest. Under the Uniform Probate Code, and a disclaimer may be made at any time, so long as the disclaimer is not barred (a person is barred from disclaiming an interest if he accepts or transfers the interest). • If an interest is disclaimed, it either: (a) passes according to any applicable terms of the will/trust; OR (b) as if the person had predeceased the testator. If the interest passes as if the person predeceased the testator, the gift will lapse unless an anti-lapse statute is applicable.

Answer 184

• In all states, a final divorce decree revokes any disposition or appointment of property made to the former spouse in a prior made will. In some states, a bequest is revoked if divorce proceedings are pending. All provisions that are revoked are treated as if the former spouse had predeceased the testator. • Generally, any bequests or fiduciary appointments (i.e. power of appointment, fiduciary nomination) in favor of the former spouse’s relatives remain intact. However, under the Uniform Probate Code (UPC) approach, such provisions are deemed to be revoked upon divorce.

Answer 185

• A class gift is a gift to a group of persons described collectively (usually in terms of their familial relationship). • Under the common law, the words of a testator/settlor were given their legal meaning. However, modern courts are more likely to consider the testator/settlor’s intent. The terms “children” and “issue” are interpreted in accordance with intestate succession rules. An adopted child inherits the same as a natural child when the adopted child is not the relative of the adopting parent. This applies to inheritance rights not only of the adopting parent, but the adopting parent’s family. Therefore, if a class gift is made to the issue or children of an adopting parent, the adoptive child will share in that gift as would a natural child of that parent. • Class gifts generally close at the death of the testator/ settlor. Under the Rule of Convenience the class is closed when any member of the class is entitled to possession of the gift. • When a gift to a class is involved, whether or not the gift to a predeceased member of the class will go into the residuary estate or be divided amongst the other class members depends on whether a group of persons is named (i.e. “my children”) or whether individual members of the class are specifically named (i.e. “Tom, Mary, and Joe”). When the class is specifically named, the gift will lapse and fall into the residuary estate unless an anti- lapse statute applies. When the class members are named as a group, the predeceased member’s share will be divided amongst the other members, unless there is a provision in the will to the contrary or an anti-lapse statute applies. • A class gift may be based on a contingency. If so, remaindermen are entitled only to the gift if the specified conditions are satisfied.

Answer 186

• At common law, only biological, full blooded, children born into wedlock were entitled to inherit. • Under the modern view, gifts to children include any child that is included in the legal definition of “children”, including biological children (marital and non-marital), half-bloods, and adopted children. An adopted child inherits the same as a natural child when the adopted child is not the relative of the adopting parent. This applies to inheritance rights not only of the adopting parent, but the adopting parent’s family. o However, adoption normally severs the parent-child relationship between the child and his biological parents. Thus, adopted-out children are generally NOT included in the estate of their biological parents (unless the biological parent’s will expressly states otherwise). • Non-marital children inheriting from a father must first establish paternity. If a child is in the process of being adopted by a married couple when one of the spouses die, the child is treated as adopted if the child is subsequently adopted by the surviving spouse.

Answer 187

• A pretermitted child is one who was unintentionally left out of a will. If the child was born or adopted after the execution of a will, the child is entitled to an intestate share of the decedent’s estate UNLESS the child was intentionally omitted from the will. • In some states the child is NOT entitled to a share of the estate if the decedent provided for the child outside of the will or left all (or substantially all) of estate to the child’s other parent. • If the child was living at the time of execution, the child is NOT entitled to a share of the decedent’s estate UNLESS the child was omitted from the will because the testator did not know of the child’s existence or believed the child to be dead. • Some states presume a child was unintentionally omitted if there is no evidence otherwise.

Answer 188

• Mental Capacity: To execute a valid will, a testator MUST have mental capacity. To have the mental capacity to execute a will, a testator must be capable of knowing and understanding: (1) the nature and extent of his/her property; (2) the natural objects of his/her bounty – those persons having the highest moral interest to the property (e.g. family members, such as a spouse, issue, and siblings); (3) the disposition that he/she is making of that property; AND (4) the ability to connect the above elements together to form a coherent plan. Mental capacity is presumed. A mental illness or cognitive impairment does not automatically mean testator lacked capacity, and the burden of proof is on the will contestant to prove that the testator lacked mental capacity. • Age Requirement: Most States also have an age requirement, which is usually 18 years old.

Answer 189

• A will is invalid to the extent it was executed under undue influence, and may be invalidated in full or in part. Undue influence occurs when a person exerts influence that overcomes a testator’s free will and judgment. • A prima facie case of undue influence is established if: (1) the testator had a weakness (physical, mental, or financial) that made him susceptible to influence; (2) the wrongdoer had access to the testator and an opportunity to exert influence; (3) the wrongdoer actively participated in drafting the will; AND (4) there is an unnatural (unexpected) result. • A common law presumption of undue influence is established if: (1) a confidential relationship existed between the testator and the wrongdoer; (2) the wrongdoer actively participated in the drafting of the will; AND (3) an unnatural result occurred.

MEE High Priority Statements Flashcards

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