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51 Cards in this Set
- Front
- Back
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Writing Duty of Negligence
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The first issue is whether D owed a duty of care to P. Under the Cardozo view, a duty is owed o persons in the foreseeable zone of danger. [Analysis]
In the Andrews minority view, a duty is owned to all. [Analysis] == Conclusion |
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Writing Standard of Care for Regular Negligence
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D's conduct will be measured against the reasonable, ordinary, prudent person under the same or similar circumstances. [Discuss circumstances and how that would affect a ROPP's actions]
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Prior Restraint Analysis w regard to gag order relating to a trial
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A gag order constitutes a PR.
PRs are generally disfavored by the courts and must be narrowly tailored to achieve some compelling, or at least, significant gov't interest. Preserving a fair trial for an accused is suff't basis for a PR ONLY if i is the only means to ensure a fair trial. Court could always chose to change venue, cont case until publicity has subsided... Analysis Narrowly drawn? compelling interest? |
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Freedom of Press - obtaining information and press liabiliy?
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A newspaper/broadcast cannot be sued for publishing or airing a true fact once it is lawfully obtain from public record or released to the public, the gov't may limit its dissemination to protect privacy rights.
Analysis Lawfully obtained? Privacy reason for limiting dissemination? |
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11th A analysis
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the 11th A is a jursidictional bar which prohibits a fed court from hearing a claim by a party against a state gov't. While the 11th A does apply to actions against states for injunctive relief, it does not apply to local gov'ts.
if statute violates the 14th A, then the state is subject to suit as long as there is state action. |
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14th A Gender Discrimination analysis
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Equal protection gives equal protection of the laws.
A court will apply one of three standards (...) in examining a gov't classification which discriminates against a certain class of ppl. P will argue that the statute constitutes gender-based discrimination. Proving Gender Classification There are two ways a P can prove gender classification. Gender Classification can exist on the face of the law. Or if the law is facially neutral, P must show discriminatory impact/effect AND discriminatory intent. Intentional discrim is very hard to prove; discrim effect is NOT enough on its own. Discriminatory intent can be shown by evidence of a history of discrimination or the effect can be so great that it rises to the level that no other reason can explain the discrepancy. If Gender discrimination = intermediate scrutiny If not = rational basis The law must be substantially-related means to achieve important govt. purpose. Govt. bears burden of showing exceedingly persuasive justification for discrimination. Narrowly tailored but not the least restrictive means req'd. |
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Output Contract Analysis
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An output K exists where the seller commits to sell all the goods it produces to the buyer. Such Ks are valid even though no specific quantity is mentioned or accepted by the offeree.
UCC req's that the quantity be set in good faith, not be unreasonably disproportionate to any stated estimate or any normal prior output or requirements. |
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Offer Rule
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An offer req's 1) an expression of a promise, undertaking or commitment to enter into a k, 2) certainy and definiteness of terms, and 3) communication to an identified offeree.
CL req's "who" and "what" to be specified - the subject matter, price, time of performance, identity of the ptys. UCC only req's quantity unless its an output K (analyzed in diff't card) |
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Limitations on OR's Power to Revoke Offer:
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(1) Option K supported by consideration—offeree paid for irrevocable
(2) UCC Firm Offer Rule An offer cannot be revoked for up to 3 mths if: - 1. offer to buy/sell goods - 2. signed, written promise to keep the offer open, - 3. pty is a merchant (Merchant is generally a person of buz) - 4. if no time is mentioned – time fixed by a court that is reasonable up to 3 months ~ Consideration for keeping offer open NOT necessary (3) Reliance: Offeree has detrimentally relied on offer AND offeror could reasonably have expected such reliance (4) In case of unilateral K, once offeree has begun performance ~ NOT mere preparation (i.e. buying paint to perform paint job) |
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Acceptance Rule
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An acceptance is a manifestation of asset to the terms of the offer in a manner prescribed by the offer.
Modern Rule AND UCC allow acceptance by any reasonable means UNLESS offeror unambiguously limits acceptance to particular means - Acceptance judged by whether reasonable person would think there’s acceptance * Ex: Bilateral K may be formed without communication of acceptance if this occurred in prior dealings without dispute from either party * Offeree’s subjective state of mind is irrelevant - Full performance is ALWAYS acceptance (despite no verbal response to offer) * BUT, offeree may have to give notice if offeror likely won’t learn of acceptance Mirror Image (CL)? Acceptance must MIRROR offeror’s terms NO adding/omitting terms - If NOT mirroring terms, then acceptance treated like a rejection and counteroffer - BUT: If no mirroring, but parties act as if there’s K, conduct treated as acceptance ii. UCC – REJECTS Mirror Image Rule and Follows BATTLE OF THE FORMS: In sale of goods Ks, acceptance does NOT have to mirror offer’s terms A fact pattern in which there is (i) offer to buy or sell goods and (ii) a response w add’l terms raises two separate questions: 1) is there a K? Under the UCC, a response to an offer that adds new terms, but does not make the new terms a condition of acceptance, is generally treated as an acceptance – is generally a “seasonable expression of acceptance.” - Whether offer terms OR acceptance terms govern depends on status of parties * If ONE of parties is NOT a merchant, then terms of offer control and new or diff. terms are considered mere proposals to accept or reject * If BOTH parties are merchants (ie. businesspersons), Additional terms proposed in acceptance become part of the contract UNLESS: ~ (1) Offer expressly limits acceptance to terms of offer OR ~ (2) Offeror objects w/in a reasonable time to additional terms OR ~ (3) These additional terms materially alter the agreement $ Ex: One party adds clause that limits its liability under the K $ Materially-altering addtl. terms do NOT prevent contract formation, but become part of K ONLY IF offeror expressly assents to inclusion |
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Consideration or Substitute
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KSN req's a bargained-for exchange btwn the ptys involving legal value.
Detrimental reliance is a substitute for KSN. |
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Prexisting Legal Duty - CL and UCC
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Prexisting Legal Duty Under (Common Law only)
- Performing or promising to perform existing legal duty owed to the OTHER contractual party is NOT KSN (doing something you’ve already promised to do) * = No new legal detriment * Exceptions (where there IS consideration): ~ Add’n to or change in performance ~ NEW or different consideration is promised ~ Promise is to ratify a voidable obligation $ Ex: Promise to ratify minor’s K after reaching age 18 ~ Preexisting duty owed to third person rather than to promisor ~ There is honest dispute as to the duty ~ There are unforeseen circumstances sufficient to discharge duty * Pymt. of smaller sum on due AND undisputed current debt generally is NOT valid consideration for promise by creditor to forgive debt ~ BUT: Courts can avoid this result by applying above exceptions ~ Agreeing to pay smaller sum of debt before due date =new KSN v. Preexisting Legal Duty under UCC - There is NO such rule as under common law - NEW consideration is NOT required to modify sale of goods contract - Only req’s Good faith for modifying existing sale of goods contract |
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Mutual and Illusory Promises—Requirement of Mutuality
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Consideration MUST exist on BOTH sides of a K (i.e. mutually obligatory)
i. BUT: benefit of the consideration generally need NOT flow to ALL parties ii. Each of the promises given as consideration need NOT be valid consideration b. If only ONE party is bound to perform, promise is ILLUSORY and unenforceable c. Courts often supply implied promises to infer mutuality (i.e. a party must use best efforts) ii. Conditional promises, unless condition is entirely w/in promisor’s control iii. Ks where party has right to cancel, IF this right has some restriction - Exs: Reasonable Notice requirement; Good Faith reasons for cancellation iv. Voidable promises (e.g. one made by an infant) v. Unilateral and option Ks e. Promise to choose one of several alternative means of performance is illusory UNLESS: i. EVERY alternative involves legal detriment to promisor ii. Such a promise will NOT be found illusory IF: - At least ONE alternative involves legal detriment and power to choose rests w/ promisee or third party OR - A valuable alternative is actually selected (i.e. one involving legal detriment) |
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Detrimental Reliance
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Promissory Estoppel (aka Detrimental Reliance)
i. Promissory Estoppel/Detrimental Reliance is sufficient substitute IF: - 1. Promise - 2. Relilance that is reasonable, detrimental, and foreseeable - Promisor should reasonably expect his promise to induce action or forbearance - Induced action or forbearance is of definite and substantial character AND - Such action or forbearance is actually induced - Enforcement necessary to avoid injustice |
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CURE to nonperformance/breaching performance under UCC
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CURE
a. Sometimes, Seller who fails to make Perfect Tender will be given second change to “Cure” i. 1. Test: Whether Seller has reas. grounds for believing that improper tender would be acceptable, perhaps with a money allowance - Look for prior dealings btwn. seller and buyer to see if $ allowance was OK - Not every Seller has opportunity to “Cure” and Buyer can’t compel Seller to “Cure” i. 2. Time of Performance has not yet expired 1. Specific delivery date 2. Seller delivers nonconforming goods 3. Prior to the delivery date 4. B notifies seller he will reject the goods 5. = S can still make performance conforming before the specific delivery date |
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Breach of K?
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CL Analysis: A material breach excuses performance A breach occurs when Promisor is under absolute duty of performance AND duty has not been discharged
Material or Minor Breach? A Breach is MATERIAL IF, as a result of breach, nonbreaching (NB) party does NOT get the substantial benefit of her bargain Note: MINOR breach ONLY allows harmed party to recover damages BUT, she still MUST perform under the K - MINOR breach coupled with anticipatory repudiation = Material Breach Failure to perform by the time stated in the K is generally NOT a material breach IF performance is rendered w/in reasonable time b. BUT: if nature of K makes timely performance essential OR K expressly says time is of the essence, then failure to perform ON TIME IS a material breach Prefect Tender for UCC – Not Material Breach |
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Section 16(b) analysis for corporate law
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Sect. 10(b) req's the surrender to the corp any profit realized by a direct, officer, or shareholder owning more than 10% of a class of the corp's stock from the purchase and/or sale of security w/in a 6 month period.
Only applies to pub held corps with more than $10MILL in assets and 500 or more shareholders in any class OR whose shares is traded on a nat'l exchange. Elements: 1) Pru chase and sale or sale and purchase w/in 6 months? 2) Equity security 3) by officer, director or more than 10% s.h. 4) Profit |
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Section 10(b)-5 analysis for corporate law
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Rule 10-5 makes it illegal for any person to use any means to commit fraud in the connection with the purchase or sale of any security.
Elements: 1) scienter - intent to defraud 2) dishonesty - false stmt, omission, insider trading 3) material falsehood - a substantial likelihood that a reasonable investor would consider it important 4) fraud in connection w actual purpose or sale of security 5) reliance on misrep 6) damages (price paid - avg price in 90 day period after info corrected) |
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Sarbanes-Oxley Act of 2002
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SOA req's CEO, CFO or similar pesron to certify ea report. that officer had reviewed report, based on officers knowledge it is true and does not contain material omissions, internal controls.
Forfeiture of Bonus or Profit- if company is req'd to restate financial reports due to misconduct, CEO and CFO must reimburse the company for any bonus or incentive based compensation recv'd by them during 12-mnth period after inaccurate report filed. Prohibition against insider trades during pension blackout periods - Directors and officers may not purchase or sell co's stock during a period when persons participating in the company's pension plan are not allowed to sell co stock. |
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Misrepresentation analysis
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1. D must make a misrepresentation.
2. scienter - D must make a rep knowing it to be false or with reckless disregard to truth 3. Intent do induce P/class of P and it was foreseeable P would rely 4. Actual Reliance 5. Justifiable/reasonable reliance 6. Damages |
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Duty of Care owed to a corporation
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Directors and officers owe a duty of good faith and to act in a manner that is in the best interest of the corporation, w the degree of care, skill and diligence an ordinary prudent person would exercise in a like position.
Decision? Duty of care uninformed/illegal/egregious? - duty of care analysis If the decision was legal, completely informed as a prudent buz person would - you cannot get around the BJR! |
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Duty of Loyalty
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maj shareholders or directors may not obtain an unfair benefit at the expense of the corporation/other shareholders.
conflict of interest is a breach of duty of loyalty. Conflict can be upheld if txn approved by maj of directors (at least 2) w/o conflicting interest and all mat facts disclosed; or maj of votes cast of disinterested s.h. where mat facts disclosed; or txn fair Where both benefit, e.g. by retaining dividends, NO self dealing bc EVERYONE is benefiting; there is no detriment to the corp. Actually BETTER to left profits "ride" and reinvest in the company for a return - IRR - internal rate of return is LOWER than external rate of return, i.e. taking loans from a bank to finance projects. If you can get around BJR by showing self dealing, taking of profits, benefiting at corp determemnt, then court will look at fairness of the decision. |
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when can s.h. bring a derivative suit?
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A s.h. may sue on behalf of the corp if 1) s.h. was a s.h. at the beginning, during, and end of the lawsuit.
2) s.h. owned shares at the time of the alleged wrong 3) s.h. first demands the BOD to enforce corp rights 4) demand refused or s.h. shows demand would be futile 5) demand is made on s.h.s to bring suit where s.h.s can ratify the wrong. Corp v. Directors |
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Duty to disclose
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a director has a duty to disclose all material corporate information to other members of the board.
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Doctrine of Waste (corp)
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Directors have a duty to not waste corp assets by overpaying for property or services.
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Direct s.h. suit
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can be brought when s.h. has suffered a direct injury suffering immediate and direct harm.
that the directors breached a duty owned to him as a s.h. |
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Reacquisition of shares
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a corp may repurchase shares from s.h.s who voluntarily offer to sell their shares to the corp. No s.h. can force the corp to buy.
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Duties directors owe the corporation
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Duty of loyalty
duty of care, good faith Doctrine of waste Duty to Disclose Material facts |
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Corporation Purpose
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Business of corp is organized and carried on primarily for the profits of the s.h.s. Board decisions are to be employed to that end. Corp objective is to enhance profit and s.h. gain.
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Def of S Courp
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Stocks held by no more than 100 persons, s.hs must be individuals, and can only have one class of stock.
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De Jure v. De Facto
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De Jure is a properly created corporation complying w all statutory req'ts.
De Facto is one that has colorable compliance w most statutory provisions. Ptys act as if there is a corp, then will be estopped from denying corp status. |
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Ultra Vires Acts
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If a corp has a narrow buz purpose in its articles, it may not undertake activities unrelated to achieving that stated purpose.. Ultra vires acts are general enforceable and can be raised in 3 situations:
1. s.h. sue corp to enjoin proposed ultra vires act 2. corp may use officer/director for damages resulting from ultra vires act. 3. state may bring action to dissolve a corp for committing an ultra vires act. |
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PCV
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-ignoring corp formalities
-treat corp assets as your own -commingling assets - inadequate capitalization to cover prospective liabilities |
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Stock sold for less or more than par value.
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trad'lly BOD cannot sell stock for less than its par velue but now BOD may sell for any price it deems appropriate.
Selling below the par value in the art. of incorp. will be valid hwr director may be liable for breach of fiduciary duty. |
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Subscription agreements
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Stock subscription agreemens are promises from subscribers to buy stock in the corp.
Preincorp subscriptions must stay open for 6 months. |
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Promoters
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promotors procure committments for capital and other instrumentalities before corp is actually formed.
Promotors have a fid duty to fairly disclose and act in good faith. Cannot sell property to corp for a profit unless disinterested board ratifies and promotor discloses all mat facts. Promoter remains liable on the K's until novation. |
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Shareholder's Inspection Rights
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A s.h. may inspect corp's books, papers, accounting, records upon 5 days' written notice stating a proper purpose.
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Distribution of dividends
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sole discretion of the directors unless: corp unable to pay its debts as they become due in the usu course of buz; the corp's total assets would be less than the sum of its total liabilities.
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Corporate Opportunity Doctrine
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1. Corp must have interest or expectancy
2. lack of financial ability not a defense 3. BOD must decide 4. Corp can recover profits if a corp opp, the director must present the opp to the corp, disclose all mat facts, and can take adv of opp only if corp decides not to pursue it. |
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Indemnification of directors and officers
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A corp must indemnify a director or officer who prevailed in defending a suit against himself for reasonable expenses, incl atty fees.
A corp may indemnify D or O when defending a suit brough against D or O on account of his position if: 1) he acted in good faith 2) he believed his conduct was in the best interest of the co 3) not unlawful Exceptions: Corp never pays a D or O when he is unsuccessful in defending a derivative action where D is found liable to corp; or he is charged w rec'ving an improrper benefit. |
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Fundamental Change analysis / Limits
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1. Fundamental change: amendments to art. of incorp, merger, disposition of substantially all corp property.
2. written notice to s.h. w purpose 3. s.h. approve change by maj of votes 4. changes are filed w state. Protection against and limitation on fundamental change: If corp approves a fund change, s.h. who dissent from challenge may have rt to have corp purchase shares. 1. If proposed corp action will create dissenters' rights, notice to s.h. to exercise dissenting rights 2. s.h. must give notice of intent to demand pymt - written notice of her intent before vote is taken 3. Corp must give dissenters notice 4. shareholders must demand pymt 5. corp must pay FMV 6. notice of dissatisfaction of value could lead to court axn. |
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Whether Merger is a fundamental change
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not fundamental if:
1. art. of incopr of surviving corp will not differ from merger; 2. will hold same # of shares after merger, w identical preferences, limitations and rights 3. voting pwer will not compromise more than 20% or short form merger - parent company assumes subsidiary. |
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When will a judicial dissolution be granted?
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1. atty general finds art. of incop fraudulently obtained
2. request of s.h.: - Directors are deadlock -irreparable injury - D's acting illegal, oppresive, fraudulently - failed to elect a director for 2 consecutive terms - corp assets are being wasted, misapplied, diverted. |
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Everything I need to know for an LLC
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1. Limited liability company is taxed like a partnership and offers its owners LL of s.h. like a corp and can be ran either like a partnership or corp.
2. File art. of org w state 3. Management - presumed to be managed by all members but can be either; maj vote req'd for axn and owe duty and loyalty if manager 4. membes not pesonally liable 5. profits and losses allocated based on contributions |
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Excuse of Performance by reason of a later, unforeseen event
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Performance of K duties can be excused under impossibility, impracticability, or frustration of purpose if:
1) something happens after the K was formed but before completion of K performance; and 2) that event was unforeseen - cannot be a basic assumption upon which the K was made. Impossibility - cannot be done by anyone Impracticable - can be done w extreme and unreasonable difficulty and expense. Frustration of purpose - the purpose of the K cannot be fulfilled. |
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Preliminary Injunctive Relief Analysis
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Injunctive relief is ordered to prevent defendant from doing something. A permanent injxn is issed after full trail on the merits. A preliminary (TRO, or Interlocator) Injxn is when the issue is pending trial.
Preliminary Injunctive relief requires a 2 part test: irreparable harm and P establishing likelihood of success. Irreparable injury P must show that her injury will be irreparable while waiting for a full trial on the merits - that is why she needs relief now. Irreparable harm is weighed against any hardship the defendant will suffer if a temporary injunction is granted. Likelihood P must show a probability of success. Court may impose a bond req't on P to reimburse D if the ijxn injures him or her if P does not succeed. Court can also order a TRO when the issue is pending to determine whether to issue a preliminary injunction. The test is identical to a preliminary InJxn. TRO can be ex parte - notice is not required and no adversarial proceeding is required. TROs are limited to 10 days |
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Permanent Injunctive Relief (I Put Five Bucks Down)
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5-part checklist
1. Inadequate Legal Remedy (money damages, replevin, ejectment) -replevin inadequate bc sheriff may not be able to recover it or D filed a redelivery bond. -ejectment - sheriff may refuse to act -money damages - too speculative, D is insolvent, irreparable injury, multiplicity of actions (will tell u there has been a prior history of litigation) 2. Property Right or Protectable Interest Req't - use to req' property interest, now any protectable interest is suff't 3. Feasibility of enforcement - negative or mandatory? negative - stop someone from doing something; mandatory - req someone to do something. Negative - no enforcement problem Mandatory - may be prob if difficult to supervise or ensure compliance 4. Balancing of hardships - P's benefit v D's hardship if relief is granted. There must be gross disparity btwn the detriment and the benefit. No balancing if D's conduct was willful. Hardship to the public is considered. 5. Defenses? - unclean hands - P's improper conduct related to lawsuit, laches - P knew of injury and delay caused unreasonable and prejudicial harm to D.; impossiblity; free speech wrongful injunction - must obey until modified or dissolved. |
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PI Form of Judgment Payment
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The award must be a single lump sum discounted to present value, without taking inflation into account.
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Tort Remedies Approach
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1. Legal Remedies - Damages
2. Restitutionary Remedies - Legal: restitutionary damages, replevin, ejectment; Equiable Restitutionary Remedies: Constructive Trusts/Equitable Lieds 3. Equitable Remedies - different injuntive relief |
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Trust Duties Analysis
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A trustee can only exercise express or implied powers.
A trustee is in a fiduciary relationship to the trust and its beneficiaries. the trustee must exercise that degree of care, skill, and prudence that would be exercised by a reasonable prudent person in managing her own property. A trustee owes a duty of undivided loyalty to the trust and its B's. -doesn't matter if he belives he was acting in the best interest of the trust -regardless of good faith belief -when conflict of interest, may set aside the transation, recover the property back, and recover any profits made from self dealing. |
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Allocation of Principal, Income and Expenses in a trust -- increased value of an asset and stocks
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All assets received by the trustee must be allocated to the trust P or income.
Trad'lly cash dividends on corp stock are treated as income, while stock dividends are allocated to trust principal. Hwr, under the UPIA, the trustee has an adjustment power to reallocate investment portfolio return. Allocation changes may be proper if nec to carry out the trust purposes and the allocation is fair and reasonable to all B's. Trad'ly, an increase in value of an asset (capital gains) should be credited as principal. Hwr, the UPIC, the trustee has an adjustment powr to reallocate investment portfolio return if nec to do so to carry out the purposes of the trust and the allocation is fair and reasonable. |
