Note: the sample interrogatories
do not appear in the same order as they do in the actual materials.
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How
is an agency relationship created?
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| An agency
relationship is created when both the principal and the
agent manifest assent to the creation of the relationship.
No consideration is needed to form an agency relationship!
Assent can be manifested through either the words or
the actions of the parties. |
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| Articulate
the difference between a frolic and a detour. |
| A
detour is a minor deviation from a servant's designated
duties. A frolic is a
deviation from a servant's designated duties.
I don't know why, but the overwhelming majority of people
I work with get these terms confused; make sure
that you have them straight. Whether something
is a “frolic” or a “detour”
requires a careful discussion of the facts of the question. |
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| Articulate
the definition of a general partnership. |
A general
partnership is defined as “an association of two
or more COMPETENT persons who agree to carry on
as co-owners of a business for profit.” The agreement
can be written or oral. The partners must have the intention
of making a profit; but even if they never make a nickel
they are still a partnership.
Each partner has unlimited personal liability for all
the debts of the partnership. Keep in mind: that the partners
do not have to be natural persons. For example, two corporations
can form a partnership. |
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| Is an
incoming general partner liable for any debts of the partnership
that he joins? If yes, to what extent is he liable? |
| An incoming
partner is personally liable for the debts of the partnership
that arise after his admission.
The incoming partner is also liable for debts that pre-date
his admission to the partnership, but only
up to the amount of his capital contribution. |
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| A promoter
is primarily and personally liable on the contracts he
enters into on behalf of the Corporation that is being
formed. When will the promoter cease to be liable on such
contracts? |
The promoter
will cease to be liable on these contracts only when there
is a novation in which the Corporation substitutes itself
for the promoter and the third party accepts this substitution.
It is a good idea to study contracts before studying corporations.
The flip side of this rule is that the promoter will remain
liable on all contracts he entered into on behalf of the
corporation unless and until there has been a novation.
This can seem unfair since the Corporation will receive
the benefit of the contract and the promoter will have
to pay for it. If this occurs, it is the promoter's own
fault. Remember my favorite word - Insurance! The promoter
will, in real life, have promoter's insurance. This will
cover him for any damage he suffers as a result of being
a promoter. You do not have to discuss this on the bar.
I mention it here so that you may analyze a fact pattern
and not be distracted in your analysis by any perceived
injustice. |
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| What
is the procedure for receiving appraisal rights? |
| To receive
appraisal rights, the stockholder must take several steps.
First, the stockholder must file an objection to the proposed
matter before or at the shareholders meeting where voting
on the fundamental change will take place. He then has
twenty (20) days to file a written demand
on the corporation for payment of his shares. |
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| Hypo:
if I give a promissory note to my friend Jack in return
for $50 and say that it will be payable subject to his
sister going on a date with me, is the note still negotiable?
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| Trick
question! Yes, the note is negotiable. If payment of a
note is conditioned on the happening of a certain event,
however, this makes it non-negotiable. But here I said
to Jack that I would pay him only if his sister went out
with me. This is a verbal statement! Thus, there is no
written evidence that my obligation to pay the
note is conditional. Thus, my oral statement to Jack did
not make the note non-negotiable. |
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| Articulate
what is meant by a qualified indorsement. What is the
legal effect of such an indorsement on the liability of
the indorser? |
A transferor
of a negotiable instrument gives a “qualified indorsement”
when she signs her name and then writes “without
recourse” below her signature. The effect of writing
“without recourse” is that the indorser will
not be liable to any future transferee should payment
be refused on the negotiable instrument.
Example:
if a note is signed by five indorsers, and the third indorser
signs “without recourse” she will not be liable
to indorsers 4 and 5 if the note is later dishonored i.e.
if the maker or drawee refuses to pay. Indorsers 4 and
5 would have to seek payment from indorsers 1 and 2, assuming
that they did not also sign the instrument “without
recourse.” |
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| What
is the proper venue for filing an action for divorce in
Maryland? |
The proper
venue (i.e. county) to bring an action for divorce in
Maryland is:
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where
either the plaintiff or defendant resides; |
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where
the defendant carries on a regular business; |
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where the defendant is employed; or |
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where
the defendant habitually engages in a vocation.
This last kind of venue has been tested.
The fact pattern stated that the defendant played
guitar in a bar several times a week in a particular
county. That activity was deemed to be “habitually
engaging in a vocation.” Thus, venue was good
in that county. |
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| Articulate
the “no fault” grounds on which an absolute
divorce may be granted. |
A “no
fault” absolute divorce can be granted in two instances.
First, if the parties live apart for at least 12 months
mutually agree
(orally or in writing) to live apart with no intention
of resuming the marriage.
Second, if the parties have lived apart for 24 months
(i.e. 2 years) or more
the marriage is hopelessly broken. No explicit agreement
to live apart is needed in this instance. |
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| When
should a party file a Motion to Strike? |
| A party
should file a motion to strike prior to filing her response
to the pleading to which a response is required. Such
a motion is proper if the pleading for which a response
is required contains any material which is improper, immaterial,
impertinent, or scandalous. The party who wishes to file
this kind of motion may do so within 15 days after she
receives service of the pleading. |
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| Articulate
the meaning of res judicata. |
Res judicata
is a concept to be feared! It is a way that one party
can bar another party from re-litigating a matter between
them. Once res judicata is established against a party,
that party may never litigate that claim again in
court, where! The
reason it exists is to promote judicial efficiency. If
a court issues a decision on the merits of a particular
dispute, it would be a waste of time for that court (or
any other court) to hear the matter again.
What is a little tricky is the issue of what constitutes
a dismissal “on the merits.” “On the
merits” does not necessarily mean that there was
a full trial of the matter. For example, a matter that
is dismissed because a party failed to state a claim on
which relief can be granted is a decision and a dismissal
“on the merits!” Any attempt to bring the
action in Maryland or another jurisdiction would be barred
on the grounds of res judicata.
Another example is where a party voluntarily dismisses
her case. A party may do this in Maryland once and this
will be considered to be a dismissal without
prejudice. If a party voluntarily dismisses their claim
twice, however, such a dismissal is deemed to be with
prejudice. A dismissal with
prejudice is considered to be
a dismissal “on the merits” despite the fact
that the matter never progressed beyond the initial pleadings,
let alone to trial. Thus, a party who voluntarily dismisses
her claim twice in Maryland may be barred from bringing
the action ever again, either in Maryland or any other
court in any other jurisdiction. Keep in mind that it
is up to the defendant to assert res judicata as a way
of barring plaintiff's claim.
Default judgments and summary judgment are also considered
to be “on the merits” and thus can be used
as the basis for asserting res judicata.
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| May a
lawyer accept a settlement on behalf of the client without
the client's approval? |
| The
answer here obviously is no. I posed this question only
to remind you that this is an affirmative obligation
of all attorneys. Most importantly, this issue has appeared
on the bar exam. Even though it seems very simplistic,
you must point it out to the bar examiners. Note also
that the lawyer must act with reasonable diligence and
promptness in representing a client. If you have presented
with facts in an essay that indicates that the lawyer
has breached his duty, you must note so in your essay
answer. |
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| When
may a lawyer accept compensation for representing a client
from someone other than the client? |
This
is a highly testable issue! The lawyer may accept compensation
for representing a client from someone other than the
client if:
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the client
consents; |
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there is no
interference with the lawyer's independence of professional
judgment or with the client-lawyer relationship;
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the lawyer keeps
information relating to the representation confidential. |
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| Hypo:
a man walks into a piano store and says he wants to buy
a baby grand piano. Without asking why he wants it, the
clerk sells it to him on credit pursuant to a validly
executed security agreement. How would the piano be classified
under Article IX? |
| The answer
here depends on what use the buyer intends to make of
the piano. If he is going to take it home and learn to
play it for his own enjoyment, then it is a consumer good.
If he is going to put it in the lounge of his bar/restaurant,
then it would be equipment. The determinative factor here
is the buyer's intent; look
at the primary purpose for which the buyer intends to
use the item - this determines how the good is classified. |
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| Who
wins: the holder of a purchase-money security interest
(“PMSI”) in consumer goods who does not file
that interest OR a person who buys the goods from the
original consumer? |
Usually
the person who buys the goods from the original consumer
wins. Why? Well, a PMSI in consumer goods perfects automatically
i.e. without filing. If the holder of the PMSI does not
file, then there is no notice to someone who buys the
goods from the original consumer. Thus, the subsequent
purchaser usually wins.
There are
ways that the subsequent purchaser will not win. First,
the subsequent purchaser must give value. If he receives
the goods as a gift, he is not protected.
Second, the subsequent purchaser will lose if he does
not buy the goods primarily for his personal, family,
or household purposes. Thus, if the subsequent purchaser
buys the goods for his business, he will lose to the party
with the unfiled PMSI.
Third, and last, if the subsequent purchaser has actual
knowledge of the PMSI, he will lose priority to the party
that has the PMSI.
Hypo: let's say I
buy a brand new speed boat on credit from Honest Bob's
Boats so that I can cruise around the Carribean. Honest
Bob's has a PMSI in the boat since they sold it to me
on credit - they fronted me the money that enabled me
to buy the boat and I promised to pay them back at regular
intervals. Five weeks later, I sell the boat to my neighbor,
Fred, because I need the money. I then gamble away all
the money and default on my payments to Honest Bob's.
Who gets the boat: Honest Bob's or Fred? Fred gets the
boat as long as he gave value for it, intends
to use it primarily for personal or family purposes AND
he did not have actual knowledge of Honest Bob's security
interest in the boat. |
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