b'Corporations\n\n\n\nCorporate Formation\n\nPre-Incorporation Contracts\n\nPromoters: person acting on behalf of a corporation not yet formed.\n\nCorporate Liability: the corporation becomes liable on a promoter\xe2\x80\x99s pre-incorporation contract when the corporation adopts the contract by (1) express board resolution or (2) implied adoption through knowledge of the contract and acceptance of its benefits.\n\nPromoter Liability: retains liability until novation\xe2\x80\x94an agreement between promoter, corporation and third-party replacing promoter.\n\nFiduciary Duty: promoters are fiduciaries of each other and of corporation, and cannot make secret profit in dealing with them.  If promoter acquires property before becoming promoter, she can sell to corporation and profit so long as price if FMV.  If promoter acquires property after becoming promoter, cannot profit at all from resale to corporation, even if FMV.\n\nSubscribers: persons or entities who make written offers to buy stock from a corporation not yet formed.  A pre-incorporation offer to buy stock is irrevocable for 6 months.\n\nDe Jure Corporate Status\n\nIncorporator: person merely signs and files articles of incorporation.\n\nArticles of Incorporation: must contain all 5:\n\nAuthorized Shares: maximum number of shares the corporation is authorized to issue.\n\nPurpose: a general purpose and perpetual duration are valid and presumed in the absence of a specific purpose or limited duration.  A specific purpose or limited duration is valid, but anything beyond would be ultra vires, in which case (1) state can enjoin the ultra vires act and (2) corporation may sue its own directors and officers for losses cause by act.  If not enjoined, act can be valid, but damages still available for losses.\n\nAgent: name and address of registered office.\n\nIncorporators: names and addresses.\n\nName: must contain indicia of corporate status.\n\nBy-Laws: Articles need not contain by-laws.\n\nDe Facto Corporation: if you fail to achieve de jure status but made good faith, colorable attempt to comply with formalities and had no knowledge of lack of corporate status, treated as a corporation.\n\nLegal Significance of Corporate Form: generally, corporation is a separate legal person.  Generally, shareholders are not personally liable for debts of corporation.\n\nPiercing the Corporate Veil: courts will pierce to avoid fraud and unfairness, and to render a shareholder liable for corporate liability, if either (1) alter ego or (2) undercapitalization.  Courts likely to pierce for tort victims against controllers.\n\nAlter Ego: controlling owner fails to observe sufficient corporate formalities.\n\nUndercapitalization: fails to maintain sufficient funds to cover foreseeable liabilities at time of formation.\n\nForeign Corporations: to engage in regular intrastate business, must file Cert. of Authority with Sec. of State which includes same information required in Articles.\n\nIssuance of Stock by Corporation\n\nConsideration: what must corporation receive for issuing own stock?\n\nPar Value Stock: at least par value\xe2\x80\x94minimum issuance price.  Can be cash, or other consideration if Board values to be at least par value.  If shares issued for less than par, corporation can recover from directors, who are liable for authorizing below-par issuance.  *Can also recover from buyer.\n\nNo Par Stock: valid, and for this stock need only get consideration deemed adequate by Board.\n\nTreasury Stock: stock previously issued but reacquired by corporation.  Upon resale, deemed no par stock, even if called \xe2\x80\x9cpar\xe2\x80\x9d.\n\nShareholder\xe2\x80\x99s Preemptive Right: right of an existing shareholder to maintain her percentage of ownership by buying up to that percentage whenever corporation issues new shares for cash.  *No right unless expressly granted in Articles.\n\n*Directors & Officers\n\nDirectors: Statutory Requirements\n\nMust have board with at least 1 member.\n\nShareholders elect directors, and can remove with or without cause.\n\nValid Board Meeting: unless all directors consent in writing, a meeting is required.  \n\nNotice must be given, but can be in bylaws.  \n\nProxies are not allowed, nor voting agreements.  \n\nQuorum for Meeting: majority of all directors must be present.\n\nVoting: to pass resolution, need only majority of those present.\n\nEach director presumed to concur in board action unless dissent/abstention is recorded in writing (e.g., minutes).\n\nOfficers: as agents, they may bind corporation by their authorized activities.  Directors have virtually unlimited power to select and remove officers.\n\n*Liability of Directors & Officers to Corporation & Shareholders\n\nDuty to Manage: may delegate to committee of one or more directors that recommend actions.\n\nDuty to Disclose: material corporate information to other directors.\n\nDuty of Care: must act with care a prudent person would use in managing his own business in like circumstances, unless Articles have limited liability for lack of care, which is valid.\n\nBJR: presumption that directors manage the corporation in good faith and in best interests of corporation and shareholders.  Under BJR, directors not liable for innocent mistakes of business judgment, even if colossal.\n\nDuty of Loyalty: may not receive an unfair benefit to the detriment of the corporation or its shareholders.  Conflicted/Interested transactions breach the duty of loyalty unless (1) there has been disclosure of all material terms and independent ratification, or (2) the transaction was fair to the corporation.\n\nSelf-Dealing: receipt of unfair benefit in transaction with corporation.  Remedies: transaction can be enjoined or set aside, and damages may be sought equal to profit.\n\nUsurping Corporate Opportunity: director may not divert a corporate business opportunity to himself without first giving corporation an opportunity to act.  Corporation must have interest or expectancy in opportunity, but lack of financial ability is not a defense.  Remedy: recovery of profits or compel transfer of opportunity to corporation under constructive trust theory.\n\nIndependent Ratification: if approved by (1) majority of independent directors; (2) majority of committee of at least 2 independent directors; or (3) majority of shares held by independent shareholders.\n\nIndemnification: corporation\xe2\x80\x99s duty to indemnify\n\nNever: for directors/officers who lose lawsuit with corporation.\n\nAlways: for directors/officers who win lawsuit against anyone .\n\nMay: for director/officer loss to other or settlement with corporation: if director/officer shows she acted in good faith and in corporations best interest, permissive indemnity may be granted by decision of: (1) majority vote of independent directors; (2) majority vote of committee of at least 2 independent directors; (3) majority vote of shares held by independent shareholders; or (4) special lawyer\xe2\x80\x99s opinion recommending.\n\nRights of Shareholders\n\nShareholder Derivative Suits: shareholder is suing to enforce the corporation\xe2\x80\x99s cause of action.  Ask: could corporation have brought suit itself.  Requires: contemporaneous stock ownership, adequacy, and demand.\n\nContemporaneous stock ownership: at time claim arose and, in most jurisdictions, throughout litigation.\n\nAdequacy: shareholder must fairly and adequately represent the corporation\xe2\x80\x99s interest. \n\nDemand: must be made and rejected by the board or at least 90 days must have passed since demand was made.\n\nVoting\n\nWho Has Right: only \xe2\x80\x9crecord date\xe2\x80\x9d owner votes\xe2\x80\x94voter eligibility cutoff date set by board on any day within 70-day period before meeting.  Right to vote even if no longer own the shares!\n\nProxy Voting: must be (1) writing (fax/email valid); (2) signed by record shareholder; (3) sent to secretary of corporation; (4) authorizing another to vote shares.  Valid for 11 months only.\n\nRevocation: proxies are revocable unless (1) labeled irrevocable and (2) coupled with an interest (e.g., sale of shares to proxy after record date).\n\nWhere to Vote?\n\nAnnual Meeting: every corporation must have annual meeting at which at least 1 director slot is open for election.  Notice must include time & place.\n\nSpecial Meeting: meeting to vote on proposals or fundamental corporate changes.  Notice must include meeting\xe2\x80\x99s special purpose, and nothing else can take place at meeting.\n\nQuorum for Meeting: a majority of all shares (not shareholders) must be represented in person or proxy when meeting starts.\n\nVote: if quorum present, action approved if votes cast in favor exceed votes cast against.\n\nPooled or Block Voting: agreements to vote alike\n\nVoting Trusts: formal written delegation of voting power to a voting trustee for up to 10 years.\n\nShareholder Voting Agreements: written agreement to vote shares as required by the agreement which is binding on all signers.\n\nCumulative Voting for Directors: may multiply number of shares by number of open slots and use in one election in which top vote-getters will win.  Right does not exist unless expressly granted in Articles.\n\nExamine Books & Records: upon 5 days\xe2\x80\x99 written notice + proper purpose\n\nDividends: declared in board\xe2\x80\x99s discretion unless corporation is or would be rendered insolvent by dividend.  Board members liable for unlawful distributions, but have defense of good faith reliance on financial officer\xe2\x80\x99s representations regarding solvency.  Priority of Distribution: \n\nPreferred With Dividend Preference: paid specified dividend preference, remainder given totally to common.  Do not share in common dividend.\n\nPreferred With Dividend Preference & Participation: paid specified dividend preference and then participate as common for next round.\n\nPreferred With Dividend Preference & Cumulative: paid specified dividend for this year and each unpaid prior year, remainder given totally to common.  Do not share in common dividend.\n\nCommon: paid last and equally.\n\nShareholder Agreements to Eliminate Corporate Formalities (Closely-Held Corporation).  Requires: (1) unanimous shareholder election evidenced in the articles, bylaws, or a filed agreement, and (2) some share transfer restriction.  Consequences: (1) no piercing even for failure to observe corporate formalities and (2) possible Subchapter-S corporation status (which allows option of partnership, rather than corporate, tax treatment).  To be S-Corp, can have no more than 100 owners of stock and one class of stock.\n\nProfessional Corporations: a corporation of licensed processionals.\n\nRequirements: (1) organizers file Articles with name designated \xe2\x80\x9cProfessional Corporation\xe2\x80\x9d or \xe2\x80\x9cPC\xe2\x80\x9d; (2) shareholders must be licensed professionals; and (3) corporation may practice only one designated profession.\n\nConsequences: professional are liable personally for their own malpractice, but not liable for debts of other professionals or the corporation.\n\nShareholder Liabilities: generally, shareholders not liable for corporate obligations, absent veil-piercing.  However, a controlling shareholder cannot unfairly prejudice minority.  While it can generally accept premium unavailable to minority, it cannot (1) sell to looter, and must conduct reasonable investigation, (2) sell corporate assets, or (3) sell board positions.\n\nFundamental Corporate Changes\n\nRecognized Fundamental Changes: Merger (A becomes B); Consolidation (A & B become C); Dissolution (A dissolves); Fundamental (not ministerial) Amendment of Articles; Sale (not purchase) of Substantially All Corporate Assets.\n\nProcedural Steps\n\nResolution by Board at Valid Meeting\n\nNotice of Special Meeting\n\nApproval by Majority of All Shares Entitled to Vote, and by Majority of Each Voting Group Adversely Affected.  Exception: no approval required for short-form merger (parent owning 90% or more of sub merges with sub).\n\nDissenter\xe2\x80\x99s Appraisal Right: a shareholder who does not vote in favor of a fundamental change has the right to force corporation to buy her shares at fair value if (1) before vote, filed written notice of objection and intent to demand payment, (2) does not vote in favor, and (3) makes prompt written demand.  If no agreement as to FMV, court can appoint expert appraiser, and appraisal will be binding on parties.\n\nFile Notice With State\n\nFederal Securities Laws\n\nAnti-Fraud: Section 10(b) of SEA: requires (1) scienter\xe2\x80\x94intent to deceive, (2) deception, and (3) in connection with actual purchase or sale of securities.  For money damages, must also prove (4) reliance and (5) loss causation.\n\nDeception\n\nMisrepresentation/Omission (Despite Duty) of Material Fact\n\nInsider Trading\n\nMisappropriator: misappropriates and uses material non-public information to purchase or sell.\n\nTipper: tips for personal benefit to another who trades.\n\nTippee: receives inside information and trades with knowledge that disclosed in breach of tipper\xe2\x80\x99s fiduciary duty.\n\nReliance: investors actually relied or invested at price infected by fraud.\n\nLoss Causation: fraud caused actual economic losses.\n\nStrict Liability for Short-Swing Trading Profits: Section 16(b)\n\nApplication: applies only officers, directors, or more than 10% shareholders of a reporting corporation (listed on a national exchange or with at least 500 shareholders and $10 million in assets.\n\nRule: defendant may not profit from buying and selling corporation\xe2\x80\x99s stock within any 6-month period.  For D/O, purchase/sale before becoming D/O is excluded, but those after ceasing can be included.  For shareholders, must have already been more than 10% owner both at time of initial and subsequent transaction.  No fraud required.  Corporation may recover profit.\n\nSarbanes-Oxley Act: CEO\xe2\x80\x99s and CFO\xe2\x80\x99s of reporting companies must certify that based on their knowledge, reports filed with the SEC are true.  Willful violation punishable by up to $5 million and 20 years.\n\nIf false reports must be corrected and restated, corporation can recover from officer\xe2\x80\x99s benefits made from trading shares of the company within 12-months after the false reports filed, and may recover incentive-based compensation received during that period.\n\nCorporations may also recover any benefits made by officers from trading corporation\xe2\x80\x99s stock during \xe2\x80\x9cblack out\xe2\x80\x9d periods or when employees are prohibited from trading in their retirement plan\xe2\x80\x99s securities.'


b'Remedies Outline\n\n\n\nTort Remedies\n\nLegal: Damages\n\nCompensatory: to put in position as if no tort\n\nRequirements: (1) actual causation, (2) foreseeability, (3) certainty, and (4) unavoidability.\n\nCertainty: cannot be too speculative.  For past damages, look to any analogous historical evidence (e.g. similar prior business).  For future damages, plaintiff must show they are more likely to happen than not.\n\nEconomic Losses: basic certainty rules apply.\n\nNon-Economic Losses: for pain and suffering, or permanent disfigurement, basic certainty rules do not apply.  Jury can award whatever amount it wishes.\n\nForm of Award: \xe2\x80\x9cThe judgment must be a single, lump-sum payment, discounted to present value without taking inflation into account (but modern view is to take into account).\xe2\x80\x9d\n\nNominal: where no actual injury, to establish rights.\n\nPunitive: to punish defendant for fault greater than negligence, in amount relatively proportionate to actual damages.  Must have first been awarded compensatory, nominal, or restitutionary damages.  Sup. Ct. has limited punitive damages to a single-digit multiple of actual damages, unless conduct is extreme.\n\nRestitutionary Remedies-No Unjust Enrichment\n\nLegal\n\nRestitutionary Damages: value of benefit to defendant.  Sometimes occurs where there is no real injury to plaintiff.  However, often occurs where both compensatory and restitutionary are theoretically available, such as where BaskinRobbins steals Carvel\xe2\x80\x99s ice cream machine, but rule is that plaintiff cannot recover both compensatory and restitutionary, so discuss both, and give plaintiff the larger sum.  Punitive, however, can be paired with restitution.\n\nReplevin: recover possession of specific personal property through sheriff where (1) plaintiff has a right of possession and (2) defendant has wrongfully withheld.  Replevin can occur before trial if plaintiff posts bond, but defendant can defeat pre-trial replevin by posting a re-delivery bond.  Replevin is usually coupled with damages for lost use or benefit to defendant.\n\nEjectment: plaintiff recovers possession through sheriff of specific real property where (1) plaintiff has right to possession and (2) defendant wrongfully withholds.  No ejectment if defendant just crosses plaintiff\xe2\x80\x99s lawn, because no possession.  But if would-be-adverse-possessor or holdover tenant, ejectment available.  Ejectment often coupled with damages.\n\nEquitable: Constructive Trust or Equitable Lien: money damages inadequate because (1) property is unique or (2) defendant is insolvent.\n\nConstructive Trust: imposed on improperly acquired property to which defendant has title.  Defendant serves as \xe2\x80\x9ctrustee\xe2\x80\x9d and must return property to plaintiff.\n\nEquitable Lien: imposed on improperly acquired property to which defendant has title.  Property subject to immediate, court-directed sale, and proceeds go to plaintiff.  If proceeds less than FMV when defendant took, deficiency judgment will issue.  This is a good remedy if the property has gone down in value.\n\nTracing: is permitted.  Plaintiff can seek specific proceeds of sale.  However, when defendant\xe2\x80\x99s property cannot be traced solely to plaintiff\xe2\x80\x99s property, only an equitable lien is available.\n\nStatus: Plaintiff becomes a secured creditor with priority to the specific property or proceeds (but on equal footing for any deficiency judgment).\n\nBFPs of property prevail over plaintiff.  No equitable remedies against BFP.\n\nInjunctive Relief: an order to do or not do something\n\nTRO: issued for 10 days pending preliminary hearing.  Test is identical to preliminary injunction, but may be ex parte provided good faith effort.\n\nPreliminary Injunction: must show (1) irreparable injury while waiting for trial, (2) balance of hardships favors plaintiff, and (3) likelihood of success.  Court should impose bond.  Notice + hearing required.\n\nPermanent Injunction: after full trial on merits: awarded if (1) inadequate legal remedy, (2) enforcement is feasible, (3) balance of hardships favors plaintiff, and (4) no applicable defenses.  This is most likely on the bar exam, and should be discussed first unless clearly stated.\n\nInadequacy of Legal Remedies: Replevin may be inadequate if sheriff cannot locate property or the defendant has filed a redelivery bond.  Ejectment may be inadequate if sheriff refuses to act.  Money damages might be inadequate because too speculative, defendant insolvent, irreparable injury, or avoiding a multiplicity of actions (e.g., prior history of litigation between parties).\n\nFeasibility of Enforcement\n\nNegative Injunction: no enforcement problem.\n\nMandatory Injunction: may be an enforcement problem, based either on the difficulty of supervision or concern with effectively ensuring compliance.  If the act involves great taste, skill, or judgment, injunction is denied.  If is involves a series of acts over a period of time, injunction denied unless plaintiff\xe2\x80\x99s case is otherwise great.  If it involves an out of state act, injunction granted if defendant is resident (jurisdiction), denied otherwise.\n\nBalance of Hardships: balance plaintiff\xe2\x80\x99s benefit against defendant\xe2\x80\x99s hardships.  Injunction will only be denied where there is a gross disparity.  However, no balancing if defendant\xe2\x80\x99s conduct was willful.  Hardship to the public is also taken into account.\n\nDefenses\n\nUnclean Hands: plaintiff committed related improper conduct.\n\nLaches: concerned with prejudicial passage of time, and will never be greater than SOL.  Clock starts to run when plaintiff learns of injury.  Delay cuts off right to relief when unreasonable and prejudicial.\n\nImpossibility\n\nFree Speech: if tort is defamation of privacy publication.\n\nIf Denied: go back and find some other remedy, if appropriate.\n\nMiscellaneous Injunctive Relief Issues\n\nCrime: equity will not enjoin a crime (but check if it is also a tort).\n\nWho Bound: parties, employees and agents of parties acting with notice, others acting in concert with notice.\n\nErroneous Injunction: must still obey until modified or resolved.\n\nContempt: both have fines and or imprisonment.  \n\nCivil: goal is to coerce.  Can get out of jail by agreeing to comply.\n\nCriminal: goal to punish.  Cannot get out of prison until set time is over.\n\nInjunctive relief is often coupled with damages for injuries incurred in the time prior to obtaining the injunction.\n\n\n\nContract Remedies\n\nLegal: Damages: like torts, requires (1) actual causation, (2) foreseeability (at time of contract, (3) certainty, and (4) mitigation.\n\nCompensatory\n\nDirect: flow inherently from the wrong.  Expectation damages.\n\nConsequential: available for related damages foreseeable at time of contract.  Lost reputation can be recoverable if it was communicated to defendant and thus foreseeable.\n\nIncidental\n\nNominal: are allowed.\n\nLiquidated: valid (1) difficult to ascertain at time of contract and (2) reasonable forecast of damages.  If amount excessive, void as penalty.  If valid, only gets liquidated, not actual, damages.  If invalid, plaintiff gets actual damages.  Clause providing either liquidated or actual is invalid, and give plaintiff actual.\n\nNo Punitive Damages, but if willful, check if there is a tort such as fraud.\n\nRestitutionary Remedies \xe2\x80\x93 No Unjust Enrichment: on bar, typically arises where contract fails after plaintiff has rendered performance, partial or complete.\n\nContract is Unenforceable: plaintiff gets value of benefit conferred, even if greater than the unenforceable contract rate.  Plaintiff can also get any property back if unique or defendant is insolvent.\n\nContract is Breached\n\nNon-Breaching Party: gets value of benefit conferred, even if greater than the breached contract rate.  Plaintiff can also get any property back if unique or defendant is insolvent.\n\nBreaching Party: traditional view is no recovery for already-rendered performance, but modern view permits recovery, but cannot be greater than contract rate and is reduced by any damages to non-breaching party.\n\nNote: all other restitutionary tort remedies available if applicable.\n\nEquitable Remedies\n\nSpecific Performance: defendant required to perform the contract.  Requires that (1) contract is valid, certain and definite, (2) plaintiff\xe2\x80\x99s duties have been satisfied; (3) inadequate legal remedy; (4) feasibility of enforcement, and (5) no applicable defenses.\n\nPlaintiff\xe2\x80\x99s Performance\n\nDeficiency Fact Patterns: where seller cannot deliver precise consideration (e.g., 999 and not 1000 acres).  If seller is plaintiff, can specifically enforce if defect is minor, but cannot enforce if major unless can cure by closing.  If buyer is plaintiff, can enforce even if defect is major, but cannot enforce if defect is very major.  If specific performance is ordered, court should abate purchase price to account for deficiency.\n\nTime of the Essence Fact Patterns: where buyer partially performs but not fully by deadline, and thus risks forfeiture of both property and performance, and buyer sues for specific performance.  \xe2\x80\x9cEquity abhors forfeitures.\xe2\x80\x9d  Court will order specific performance if favorable assessment of: loss to seller (small), tardiness (small), waiver (seller has accepted late payments in past, undue hardship (to buyer).  If SP is not granted, courts would typically give restitutionary relief.\n\nInadequate Legal Remedy: money damages might be inadequate because too speculative, defendant insolvent, irreparable injury, or avoiding a multiplicity of actions (e.g., prior history of litigation between parties).  \n\nReal Property: All real property is unique, even if identical to others.  Special Seller\xe2\x80\x99s Rule: seller of land can get specific performance even though all he is getting is money.  \n\nPersonal Property: not unique unless one-of-a-kind, very rare, of personal significance to buyer, or circumstances make chattel unique (e.g. severe gas shortage).  Uniqueness is tested at time of litigation, not at contract formation.\n\nEffect of Liquidated Damages Clause: does not make money damages adequate.  Can still order equitable remedy, unless clause provides that it is to be the only remedy.\n\nFeasibility: personal services contracts are not specifically enforceable, but covenants not to compete are enforceable if (1) services are unique and (2) scope, geographic and duration, is reasonable.\n\nDefenses: unclean hands, laches, unconscionability (at time of formation), or contract defenses of mistake, misrepresentation, or statute of frauds.  On statute of frauds, if oral contract involves land, specific performance can be ordered, but only if plaintiff has rendered valuable part performance in reliance on the contract: any 2 of payment, possession, or improvements.  Modern trend, however, that valuable services alone can constitute valuable part performance.\n\nRescission: original contract is voidable and rescinded.  Must be (1) grounds for rescission (contract formation defenses showing lack of assent) and (2) no valid defenses.\n\nMutual Mistake of Material Fact: rescission granted.  If to collateral fact, rescission is denied.\n\nUnilateral Mistake: rescission denied, unless non-mistaken party knows or should have known of mistake.\n\nMisrepresentation: rescission granted if plaintiff actually relied.\n\nDefenses: laches, unclean hands, but not plaintiff\xe2\x80\x99s negligence.\n\nElection of Remedies: if plaintiff sues for damages first, rescission is not allowed, but if sues for rescission first, damages are allowed.  Plaintiff can sue for both, but must elect one before judgment.\n\nAvailability of Restitution: if previously rendered performance but now entitled to rescission, can get restitution and rescission.\n\nReformation: changes the written agreement to conform to the parties\xe2\x80\x99 original understanding.  Requires (1) a valid contract \xe2\x80\x93 meeting of the minds, (2) grounds for reformation (mutual mistake but not unilateral mistake unless other party knows of mistake), and (3) no defenses.\n\nDefenses: unclean hands or laches, but not plaintiff\xe2\x80\x99s negligence, statute of frauds, or the parol evidence rule.\n\n\n\n\n\nEssay Tips:\n\n\n\nAlways choose a remedy\xe2\x80\x94the best one\xe2\x80\x94but discuss all.\n\nNo duplicative principal remedies.  Discuss election of remedies\n\nAlways look to compensate for damage for all time periods, e.g., loss of use of property while seeking remedies.'


b'Contracts Outline\n\n\n\nApplicable Law\n\nCommon Law: e.g., services, real property\n\nUCC Art. 2: contracts for the sale of goods\n\nMixed Contracts: apply either common law or UCC, but not both, depending on which is the more important part of the contract.  Exception: if contract divides payment, apply separately.\n\nFormation of Contracts (legally enforceable agreements)\n\nTypes of Offers\n\nUnilateral: requires complete performance as sole method of acceptance.\n\nBilateral: all others; usually, offer is silent as to method of acceptance.\n\nStage 1: Was There an Offer?\n\nRule: a manifestation of intention of one person to contract, measured objectively (subjective intent irrelevant), containing definite terms, and communicated to the other party.\n\nContents of Offer: who and what; UCC-quantity\n\nPrice\n\nCommon Law: need not contain price unless real estate contract \n\nUCC: need not contain price, which will then be reasonable price at time of delivery. \n\nVague/Ambiguous Material Terms: no offer.  Silence is better than ambiguity, as can often fill gap but not supplant term.\n\nRequirements/Outputs Contracts (either exclusive supply or exclusive demand): offer even if no quantity term.  Sudden increases in requirements does not render indefinite if in line with prior demands or not unreasonably disproportionate. \n\nAdvertisement: not an offer, unless: (1) in the nature of a reward; (2) specifies quantity and expressly indicates who can accept; or (3) price quotation sent in response to an inquiry.\n\nStage 2: Was The Offer Terminated? can be, if\n\nLapse of Time: time stated in offer or a reasonable time.\n\nDeath: of either party prior to acceptance, unless irrevocable\n\nRevocation (by offeror)\n\nGeneral Rule: may revoke at any time before acceptance, either by (1) unambiguous statement to offeree or (2) unambiguous conduct by offeror indicating unwillingness or inability to contract, which offeree is aware of.\n\nMultiple Offers: not revocation.\n\nExceptions: offers that cannot be revoked.\n\nOption Contract: a paid promise to keep offer open.\n\nUCC Firm Offer: (1) offer to buy or sell goods, (2) signed written promise to keep offer open, (3) by merchant.  Need not be paid.  Stays irrevocable for term provided in offer or reasonable time, not to exceed 3 months.  After firmness (irrevocability) expires, offer becomes revocable\xe2\x80\x94it does not disappear.\n\nReliance: detrimental, reasonably foreseeable reliance.\n\nStart of Performance in Unilateral Contract.  However, mere preparation insufficient.\n\nRejection (of offeree): direct, or any of the following indirects:\n\nCounteroffer: terminates original offer and becomes new offer.  Counteroffer does not terminate an option.\n\nBargaining: does not terminate offer (e.g., \xe2\x80\x9cwill you take lower?\xe2\x80\x9d).  Typically in form of question.\n\nConditional Acceptance: \xe2\x80\x9cI accept if\xe2\x80\xa6\xe2\x80\x9d\n\nCommon Law: terminates offer and becomes counteroffer\n\nUCC: simply terminates offer.  No counteroffer, and no possible acceptance of counteroffer. \n\nAcceptance Containing Additional Terms: here, unlike Conditional Acceptance, the response includes, but does not insist, on new terms.\n\nCommon Law: terminates offer and becomes counteroffer.\n\nUCC: does not operate as a rejection.  There is a contract for at least the original terms.  However, the additional terms don\xe2\x80\x99t automatically become part of the contract unless (1) both parties are merchants, (2) the term is not a material change; and (3) offeror does not object within reasonable time.\n\nStage 3: Was The Offer Accepted?\n\nMethod of Acceptance: if offer is silent, acceptable methods typically include promise to perform or starting performance.\n\nStart of Performance: acceptance (implied promise to finish), unless a unilateral contract, which requires complete performance.\n\nImproper Performance: is acceptance but breach, unless accompanied by words of explanation, which is rejection and counteroffer.\n\nTiming of Acceptance: unlike all other communications (e.g., revocation), which are effective only when received, an acceptance is effective when sent, even if lost, never arrives, nor even put in real mail.\n\nDefault Rule Only: doesn\xe2\x80\x99t apply if offer provides otherwise.\n\nException: Option Deadline Only Satisfied When Received\n\nChanges of Mind\n\nAcceptance Arrives First: effective.\n\nRejection Arrives First:\n\nWas Sent First: effective.\n\nWas Sent Last: effective only if offeror relied.\n\nWho Can Accept: must (1) know of offer at time of acceptance, and (2) be person to whom offer was made.  No assignment of offers, unless options.\n\nDefenses Against Formation\n\nConsideration: a bargained for legal detriment.\n\nPromise to Pay for Past Performance (X saves B, then B promises to reward X): unenforceable for lack of consideration, unless performance was requested and requestor knew payment would be expected.\n\nPre-Existing Duty & Contract Modification\n\nCommon Law: promise to pay more for already-agreed performance is unenforceable.  Exception: addition or change in performance; unforeseen difficulty; third-party promises to pay additional amounts.\n\nPartial payment of due and undisputed debt is not consideration for promise to release remaining debt.\n\nUCC: new consideration not required for good-faith modification.  Thus, promise to pay more for already-agreed is enforceable if good faith request.\n\nConsideration Substitutes/Exceptions\n\nWritten promise to enforce obligation for which there is a legal defense is enforceable without consideration.\n\nPromissory Estoppel: no consideration necessary where (1) promise, (2) reasonable and detrimental reliance, and (3) enforcement necessary to avoid injustice.\n\nCapacity: minors, mental incompetents, intoxicated (if other party has reason to know) lack capacity to contract.  Consequence: incapacitees have right to disaffirm.  However, contract can be enforced if incapacitee impliedly affirms after gaining capacity.  Finally, there is quasi-contractual liability for necessities (e.g., food) for fair value.  \n\nStatute of Frauds (grounds for dismissal)\n\nApplicability\n\nGuarantees Of Another\xe2\x80\x99s Debt: only a promise to pay if other does not triggers SOF, not a general promise to pay regardless of other.  Exception: if main purpose of guaranteed obligation was to benefit guarantor, SOF inapplicable.\n\nService Contract Not Capable of Performance In < 1 Year of K: analyzed on contractual terms, not actual time ultimately takes, and measured from date of contract.  Exception: SOF inapplicable to contract to employ \xe2\x80\x9cfor life,\xe2\x80\x9d as death could be a day later, and thus full performance within year.\n\nTransfer of Any Interest in Real Estate \n\nException: SOF inapplicable to leases \xe2\x89\xa4 1 year.\n\nSale of Goods \xe2\x89\xa5 $500\n\nHow Satisfied\n\nWriting\n\nCommon Law: all material terms (who & what) and signed by defendant.\n\nSale of Goods: quantity and signed by defendant.\n\nMerchant\xe2\x80\x99s Confirmatory Memo: plaintiff may use its own signed writing against defendant if both are merchants, the writing notes a prior oral agreement, and recipient doesn\xe2\x80\x99t object in writing within 10 days of receipt.\n\nExceptions: need not be in writing, chance of fraud minimal\n\nPart Performance in Transfer of Real Estate: must have two of: (1) improvement, (2) payment, and (3) possession.\n\nFull Performance of Service Contract.  No part performance.\n\nSale of Goods\n\nGoods Accepted/Paid For\n\nCustom-Made Goods not suitable for sale to others\n\nJudicial Admission that contract existed, made by party trying to get out of contract in a pleading, testimony, or in response to discovery.\n\nEqual Dignity Rule: authorization for an agent to enter into contract must be in writing only if underlying contract requires a writing due to the SOF.\n\nContract Modification: within statute of frauds only if the contract as modified falls within a SOF category, regardless of whether the original contract did.  Note: provisions requiring modifications be in writing are invalid at common law, but valid under UCC.\n\nMisrepresentation of Existing Fact which induces contract, even if honest or unintentional, renders contract unenforceable.\n\nMistake of Material Existing Fact At Time of Agreement \n\nMutual: voidable by adversely affected party if he did not assume the risk.\n\nUnilateral: no excuse, unless other party had reason to know of mistake.\n\nAmbiguity: contract unenforceable where (1) material term open to at least two reasonable interpretations, (2) each party attaches different meaning, and (3) neither party knows or has reason to know of ambiguity.  If one party knows, there is contract under terms understood by other party.\n\nIllegality: illegal subject matter; illegal purpose (but legal subject matter) if plaintiff had reason to know of illegal purpose.\n\nPublic Policy\n\nDuress: physical duress; economic duress: improper threat (e.g., breach) and vulnerable counterparty with no reasonable alternative.\n\nUndue Influence: special relationship and improper persuasion\n\nUnconscionability: at time of contract, both unfair surprise (procedural) and oppressive terms (substantive).\n\nNondisclosure Irrelevant: no duty to disclose information; contract enforceable.  However, if concealment, may be unenforceable if material.\n\nTerms of Contract\n\nParol Evidence Rule: evidence of a prior agreement (either oral or written) or contemporaneous oral statement that changes/contradicts a later writing is inadmissible.  Exceptions:\n\nTo correct a clerical error.\n\nTo establish a defense against formation of an agreement.\n\nTo explain facially vague or ambiguous term.\n\nTo supplement partially integrated writing (a final statement of the terms included, but not a complete statement of all terms agreed to).  This is where a party attempts to add to (but not change or contradict) a writing.  If there is a merger clause (\xe2\x80\x9cthis contract is limited to the terms herein), this is persuasive (but not conclusive) evidence that the contract is complete on its face and cannot be supplemented.\n\nConduct: can be used to explain what terms mean or to fill gaps in contracts: listed from most to least important:\n\nCourse of Performance: what parties have done under this contract in past\n\nCourse of Dealing: what the parties did under their earlier contracts with one another\n\nUsage of Trade: what others in the trade do under similar contracts\n\nUCC Sale of Goods Default Terms\n\nDelivery Obligations if by Common Carrier\n\nShipment Contract: (1) get goods to common carrier, (2) make reasonable arrangements for delivery, and (3) notify buyer.\n\nDestination Contract: delivery complete only when goods arrive\n\nNote: if FOB is followed by city where seller or goods are, it is shipment contract; any other city is destination contract.\n\nRisk of Loss: where goods damaged before receipt:\n\nStep 1: Agreement: agreement of parties controls.\n\nStep 2: Breach: if any party has breached, he is liable for any uninsured loss, even if breach unrelated to problem.  If no breach:\n\nStep 3: Delivery \n\nBy Common Carrier: risk shifts to buyer when seller completes delivery obligations.\n\nAll Other Modes of Delivery\n\nSeller Is Merchant: bears risk until buyer takes possession.\n\nSeller Isn\xe2\x80\x99t Merchant: bears risk until goods are tendered (made available to buyer)\n\nWarranties of Quality of Goods\n\nExpress Warranties: as provided in agreement.  A model/sample is express warranty that product is like sample.\n\nImplied\n\nWarranty of Merchantability: goods are fit for their ordinary purpose.  Arises whenever the seller is a merchant who regularly deals in goods of the kind at issue.\n\nWarranty of Fitness for Particular Purpose: Arises when (i) buyer has a special purpose in mind, (ii) buyer is relying on the seller to select suitable goods, and (iii) seller knows both of these facts.  Seller need not be merchant.\n\nLimitations on Warranty Liability\n\nSOL: 4 years from tender of delivery.\n\nBuyer\xe2\x80\x99s Examination of Goods: if so, no implied warranties as to obvious defects.  No effect on express warranty.\n\nDisclaimer: express warranties cannot be disclaimed.  Implied warranties can be disclaimed if either (1) conspicuous language specifically mentioning warranty or (2) sold as it/with faults.\n\nLimitations: simply limits remedies available, and may be done for both express and implied, unless unconscionable, which is presumed if breach in consumer good causes personal injury.\n\nPerformance of UCC Sale of Goods Contracts\n\nPerfect Tender Rule: a seller must deliver perfect goods in the right place at the right time.  If tender is not perfect, buyer has right to reject the goods (not rejection of offer, as already a contract).  Buyer must take reasonable care of rejected goods.  However, seller can cure if deadline for performance has not expired.  If it has, seller can only still cure if there were reasonable grounds to believe goods delivered would be acceptable with price adjustments (e.g., course of dealing).\n\nException: Installment Contracts (contract for delivery of goods in separate installments): Perfect Tender Rule doesn\xe2\x80\x99t apply.  Instead, buyer may reject installment only if there is substantial impairment in the installment that cannot be cured.  A buyer can reject the entire contract only if a defect in an installment substantially impairs the value of the whole contract.\n\nAcceptance of Goods Precludes Rejection (not acceptance of the offer, which is pre-contract formation): once buyer accepts goods, cannot reject.  However, buyer who accepts non-conforming goods can still get damages.  Mere payment for goods not acceptance unless there was an opportunity to inspect (even if no inspection).\n\nRevocation of Acceptance of Goods: a buyer can revoke acceptance of goods only if (1) nonconformity substantially impairs value, (2) nonconformity difficult to discover, and (3) revocation occurs within reasonable time of discovery.  \n\nCommon Law: performance doesn\xe2\x80\x99t have to be perfect; substantial performance (not committing a material breach) is all that is required.\n\nRemedies for Unexcused Performance\n\nNon-Monetary (equitable)\n\nSpecific Performance: only where money damages inadequate, and never for services contracts.  Breach of land sale contract gets specific performance, unless land has been sold to BFP.  For sale of goods, must be unique. \n\nSeller\xe2\x80\x99s Right of Reclamation from Insolvent Buyer: right to return of item where (1) buyer insolvent when goods received, (2) seller requests return within 10 days of receipt, and (3) buyer still has goods.\n\nBuyer\xe2\x80\x99s Recovery of Sold Goods from Insolvent Seller: can recover only identified, paid-for goods from a seller who becomes insolvent within 10 days of payment.\n\nMoney Damages\n\nPolicy: to compensate, not punish.  No punitive damages.\n\nExpectation Damages: a sum that leaves party in as good a position as full performance of contract would have.  Usual measure of damage.\n\nCommon Law: common sense.  However, where way too uncertain, recovery for expenses (reliance).\n\nUCC Damages for Sale of Goods\n\nBuyer\xe2\x80\x99s Damages for Seller\xe2\x80\x99s Breach \n\nSeller Has Goods: difference between reasonable cover price or market price and contract price\xe2\x80\x94whichever is greater, even if doesn\xe2\x80\x99t cover.\n\nBuyer Keeps Goods: difference between fair market value of goods delivered and fair market value of goods promises (not K price).\n\nSeller\xe2\x80\x99s Damages for Buyer\xe2\x80\x99s Breach: \n\nSeller Has Goods: difference between contract price and resale unless cannot resell, in which contract price.  Exception: lost-volume seller\xe2\x80\x99s damages are lost profits on sale, as would have sold twice were it not for breach.\n\nBuyer Keeps Goods: contract price.\n\nIncidental Damages: always recoverable (no forseeability requirement): cost of caring for/transporting goods after breach and cost of arranging substitute transaction.  Available for both buyer and seller.\n\nConsequential Damages: recoverable damages that are (1) special to this particular plaintiff and (2) reasonably foreseeable by the breaching party at the time of the contract (not at the time of the breach).\n\nAvoidable Damages: Mitigation Rule: cannot recover damages avoidable with reasonable effort.  For jobs, must be comparable \xe2\x80\x93 same kind of job in same city.  This is a defense.\n\nLiquidated Damages: permissible if damages are difficult to estimate and provision is reasonable forecast of probable damages.  Cannot operate as a penalty.  If clause struck, aggrieved party gets actual damages.\n\nExcuse for Nonperformance of Contract: events after contract formation\n\nAnticipatory Repudiation: unambiguous statement or conduct that repudiating party will not perform: generally gives rise to immediate claim for damages for breach, but party can retract so long as other party has not relied on anticipatory breach (may request adequate assurance).\n\nAdequate Assurance for Sale of Goods: if statement or conduct creates reasonable uncertainty regarding performance, UCC permits written demand for adequate assurance and, if commercially reasonable, permits suspension of performance until assurance given.\n\nMaterial Breach\n\nSale of Goods: Perfect Tender Rule (see above): if tender is imperfect, buyer can accept all the goods, reject all the goods, or accept any commercial units and reject the rest.  Whichever option the buyer chooses, she can still get damages from the seller.\n\nCommon Law: damages are available for any breach of contract, but only a material breach excuses performance.  \n\nBeware Quasi-Contract: where performance confers benefit but not substantial performance, breaching party does not recover in contract, but may recover under quasi-contract. \n\nDivisible Contract: where payment is on a per-unit basis, substantial performance analysis conducted on per-unit basis.  E.g., X contracts to decorate 10 cabanas for $9000 per cabana, decorates 3, and then quits.  X recovers $27,000, the contract price, for the 3 she decorated.\n\nNon-Occurrence of Express Condition: failure to strictly comply excuses performance, but does not constitute a breach of contract.\n\nSatisfaction Clause: where duty to perform (pay) only arises where party is satisfied with other party\xe2\x80\x99s performance.  Apply a reasonable person standard unless contract deals with art or matters of personal taste, in which case we apply subjective standard and ask only if party is satisfied.\n\nWaiver: condition may be excused by later action/inaction of the person protected by the condition.  \n\nPrevention: failure of condition does not excuse protected party\xe2\x80\x99s performance where protected party prevented satisfaction of condition.\n\nLater Agreement: between parties may excuse non-performance\n\nRescission: agreement to cancel contract, effective only if both parties have some performance remaining (otherwise no consideration).\n\nModification: substituted agreement.  Takes effect immediately.  Aggrieved party can only sue for non-performance of new contract.\n\nAccord & Satisfaction: agreement to accept different performance in satisfaction of existing duty (accord) and performance (satisfaction).  Wipes out original obligation only if and when stated performance is satisfied.  If not performed, may recover on either original agreement or accord and satisfaction, but not both.  Unlike modification, where old agreement disappears.  For A & C, look for language like \xe2\x80\x9cif\xe2\x80\xa6then.\xe2\x80\x9d\n\nNovation: consensual agreement substituting a new party for existing party.  Releases the originally bound party from liability.  Absent consent, it is only delegation, and original party remains liable.\n\nUnanticipated Occurrence: impairing ability to perform may be excuse, but never excuse for unanticipated rise in cost.\n\nDestruction of Something Necessary for Performance\n\nCommon Law: valid excuse\n\nUCC Sale of Goods: if buyer has risk of loss and delivery made, no excuse for buyer\xe2\x80\x99s non-payment (as there has been performance).  If seller has risk of loss, no excuse unless damaged goods were identified to this particular contract.\n\nDeath or Incapacity: does not excuse contract performance, unless person is hired for special skills unique to him.\n\nSupervening Government Regulation or Order\n\nFrustration of Purpose (Buyer\xe2\x80\x99s Excuse): where unforeseen supervening event frustrates buyer\xe2\x80\x99s primary purpose for entering into contract, valid excuse where, at time of contract, seller knew of primary purpose.  Mere lack of profitability, though, insufficient frustration.\n\nThird-Party Problems\n\nThird-Party Beneficiary: two people contract with intent to benefit 3rd\n\nIntended vs. Incidental: a third party named in the contract is intended beneficiary with legal rights; otherwise, is incidental beneficiary with no legal rights.  Intended TBP can sue breaching promisor.  Promisor can raise same defenses it could have against promisee.\n\nCreditor/Donee: if the promisee\xe2\x80\x99s main reason for entering the contract is to discharge a debt owed to the third party, the third party is a creditor beneficiary; otherwise, he is a donee beneficiary.  Only creditor beneficiary can sue promisee (as promisee owes the original debt).\n\nModifying Contract: the promisor and promisee can rescind or modify contract until third party beneficiary\xe2\x80\x99s rights have vested\xe2\x80\x94meaning TPB learned of and relied on the contract (even if donee).  However, if the contract allows modification even after reliance, modification not actionable.\n\nAssignment of Right: a transfer of rights under a contract.  No consideration required, but if none, assignment is freely revocable.\n\nLimitations\n\nContract Language Controls; but distinguish between prohibition and invalidation.  If merely prohibits (\xe2\x80\x9crights are not assignable\xe2\x80\x9d), assignment makes assignor liable for breach of contract, but the assignment is still valid.  If invalidates (\xe2\x80\x9cassignments void\xe2\x80\x9d), assignment invalid.\n\nNo Substantial Change: assignment cannot substantially change duties of obligor.  Assigning right to payment is OK.\n\nRights\n\nAssignee can sue obligor.\n\nAssignor for consideration cannot sue obligor (because cannot revoke).\n\nPayment by obligor to assignor is effective until obligor knows of assignment.\n\nImplied Warranties: arise only in assignment for consideration: (1) right assigned exists; (2) obligor has no existing defenses; & (3) assignor will not do anything to impair value of assignment.\n\nMultiple Assignments Problem: where same right assigned to multiple parties: \n\nGratuitous Assignments: last assignee wins (each prior was revocable).\n\nConsideration Assignments: first assignee for consideration wins.  However, later assignee for consideration wins where (1) no notice of prior and (2) is first to obtain payment or judgment against obligor.\n\nDelegation of Duties: contractual obligations can be delegated without consent\n\nLimitations\n\nContract Language Controls: if it prohibits delegation, then duty may not be delegated.  If the contract prohibits \xe2\x80\x9cassignment,\xe2\x80\x9d no delegation either.\n\nDuties Involving Special Skill or Reputation cannot be delegated.\n\nLiabilities\n\nThe delegating party is always liable to the obligee.\n\nThe delegatee is also liable to the obligee if the delegatee received consideration.\n\n\n\n\n\n\n\n\nContracts Checklist\n\n\n\nFormation\n\nOffer (price, quantity)\n\nTermination Prior to Acceptance\n\nLapse\n\nDeath\n\nRevocation\n\nPaid Option Contract\n\nMerchant\xe2\x80\x99s Firm Offer\n\nReliance\n\nStart of Performance in Unilateral Contract\n\nRejection\n\nCounteroffer v. Bargain\n\nConditional Acceptance\n\nAcceptance Containing Additional Terms\n\nAcceptance\n\nMethod\n\nStarting Performance\n\nImproper Performance\n\nTiming\n\nDefenses to Enforceability\n\nConsideration\n\nRetroactive Consideration\n\nPre-Existing Duty & Contract Modification\n\nPromissory Estoppel\n\nIncapacity\n\nStatute of Frauds\n\nApplicability\n\nTransfer of Interest in Real Estate\n\nGuaranty of Another\xe2\x80\x99s Debt\n\nServices Incapable of Performance Within Year\n\nSale of Goods $500 or More\n\nSigned Writing Required\n\nMerchant\xe2\x80\x99s Confirmatory Memo\n\nPart Performance of Real Estate Transfer\n\nFull Performance of Services Contract\n\nAcceptance of Goods\n\nCustom Goods\n\nAuthorization to Contract\n\nModification\n\nMisrepresentation of Existing Fact\n\nMistake of Material Existing Fact\n\nUnilateral\n\nMutual\n\nAmbiguity\n\nNondisclosure Irrelevant\n\nTerms of the Contract\n\nParol Evidence Rule\n\nAmbiguity\n\nPartial Integration\n\nConduct Evidence\n\nUCC Default Terms\n\nDelivery Obligations if by Common Carrier\n\nRisk of Loss\n\nAgreement\n\nBreach\n\nDelivery Mode\n\nWarranties\n\nExpress\n\nImplied Warranty of Merchantability\n\nImplied Warranty of Fitness for Particular Purpose\n\nPerformance\n\nCommon Law: Substantial Performance\n\nUCC\n\nPerfect Tender Rule\n\nInstallment Contract Exception\n\nAcceptance of Goods Precludes Rejection\n\nPost-Acceptance Rejection Exception\n\nRemedies for Breach\n\nEquitable\n\nSpecific Performance\n\nSeller\xe2\x80\x99s Reclamation From Insolvent Buyer\n\nBuyer\xe2\x80\x99s Recovery From Insolvent Seller\n\nMonetary\n\nExpectation\n\nIncidental\n\nConsequential\n\nLiquidated\n\nNo Avoidable Damages\n\nExcuses for Non-Performance\n\nAnticipatory Repudiation\n\nAdequate Assurance for Sale of Goods\n\nMaterial Breach\n\nNon-Occurrence of Express Condition\n\nLater Agreement\n\nRescission\n\nModification\n\nAccord & Satisfaction\n\nNovation\n\nUnanticipated Occurrence\n\nDestruction of Something Necessary for Performance\n\nDeath/Incapacity\n\nSupervening Government Regulation\n\nFrustration of Purpose\n\nThird-Parties\n\nThird-Party Beneficiary\n\nIntended vs. Incidental\n\nCreditor vs. Donee\n\nModification\n\nAssignment of Rights\n\nDelegation of Duties'


b'Wills Outline\n\n\n\nIntent\n\nCapacity: at time of execution, testator must (1) be at least 18, (2) be able to understand the extent of her property, (3) know the natural objects of her bounty, and (4) know the nature of her act.\n\nNatural Objects of Bounty: spouse/domestic partner, issue, parents, and those whose interests affected by the will.\n\nNature of Her Act: that she is executing a will.  Need not know all legal technicalities of the will.\n\nMere appointment of conservator or diagnosis of mental illness is not sufficient to undermine capacity\xe2\x80\x94must still go through analysis.\n\nConsequences of No Capacity: entire will is invalid and property passes by intestate succession.  However, if testator had valid prior will purportedly revoked by second will, first will is probated.\n\nInsane Delusion: will can be attacked if at time of execution, testator was suffering from insane delusion.  Exists if (1) testator had false belief; (2) that was the product of a sick mind; (3) no evidence to support that belief; and (4) delusion affected the will.\n\nConsequences of Insane Delusion: only that part of the will affected by delusion is invalid.  That part goes to residuary devisee or, if none or residue itself was infected by delusion, by intestate succession.  [Residuary gift is part of estate not expressly disposed of in will.]\n\nDistinguish Capacity: delusion is narrow problem, and testator is otherwise normal.  E.g., believing spouse is unfaithful.\n\nFraud: a representation of material fact known to be false by wrongdoer, made for the purpose of and in fact inducing action or inaction.\n\nFraud In the Execution\n\nDefinition: someone forge\xe2\x80\x99s T\xe2\x80\x99s signature to a will or T is given document to sign that purportedly is non-testamentary but in fact it is testamentary.\n\nConsequence: entire will is invalid.  Property passes by intestate succession unless there is prior will validly executed.\n\nFraud In the Inducement\n\nDefinition: wrongdoer\xe2\x80\x99s misrepresentation affects the contents of T\xe2\x80\x99s will.\n\nConsequence: only that part of the will affected by fraud is invalid.  Court can (1) give property to residuary devisee, or, if none, (2) to the heirs at law by intestate succession, or (3) impose constructive trust remedy.  Constructive trust remedy is especially useful where wrongdoer would recover under other options, and will require trustee to transfer to intended beneficiary.\n\nFraud In Preventing Testator from Revoking\n\nDefinition: based on fraud, testator does not revoke will.  E.g., son lies about charity being bad, dad does not revoke will leaving to son in favor of charity, though he would otherwise have.\n\nConsequence: court will not probate the will and thus property will go to heirs.  Simultaneously, heir is decreed constructive trustee with duty to transfer to intended beneficiary. \n\nUndue Influence: testator\xe2\x80\x99s free agency is subjugated.  Established by any of Prima Facie Case, Case Law Presumption, or Statutory Presumption.  Discuss all 3.  Unlike fraud (lie), undue influence is honest, but wrong.\n\nPrima Facie Case\n\nSusceptibility: any weakness that can subjugate free will\n\nOpportunity: wrongdoer had access to T\n\nActive Participation: wrongful act\n\nUnnatural Result: provision is unnatural/unexpected.\n\nCase Law Presumption: undue influence presumed if (1) beneficiary was in a confidential relationship with T, (2) beneficiary participated in execution of will, and (3) provisions appear unnatural.  Note: no presumption from gift to spouse or domestic partner.\n\nConsequence of Prima Facie or Case Law Presumption: only that part of will affected by undue influence is invalid.  Instead, give property to residuary devisee, or, if none, to the heirs at law by intestate succession, or impose constructive trust remedy.  Court uses remedy that gets best result.\n\nStatutory Presumption: \n\nPresumption: a donative transfer is presumed product of undue influence if to (1) drafter, (2) fiduciary who transcribed instrument, (3) \xe2\x80\x9ccare custodian\xe2\x80\x9d of \xe2\x80\x9cdependent adult\xe2\x80\x9d if instrument executed during care or +/- 90 days, or (4) a spouse, DP, cohabitant, employee or relative within 3rd degree of any of foregoing.  Presumption conclusive for drafter and associates, rebuttable for others.\n\nExceptions: presumption inapplicable to (1) spouse, DP, or cohabitant of transferor (even if person was the drafter), or (2) any transfer if reviewed by independent attorney.\n\nConsequence: transferee does not take gift.  Instead, goes to residuary devisee or, if none, to heirs at law by intestate succession, or constructive trust.\n\nMistake\n\nIn Content: wrong beneficiary is named or wrong gift is made.\n\nOmission: words mistakenly omitted: no remedy.  But see below for possible relief under DRR.\n\nAddition: words mistakenly added: court may strike addition.\n\nIn Execution: T signs the wrong document\n\nT signs will, mistaking it for non-testamentary instrument: will is not probated, as T did not intend document to be a will.\n\nTwo Ts (e.g., H & W) have reciprocal wills (each leaving all to the other) and each mistakenly signs wrong one: court may reform the will and substitute correct names.\n\nIn Inducement: gift is made/not made on basis of mistaken belief: no relief.  Narrow exception where both the mistake and what T would have done but for mistake appear on the will (rare).\n\nIn Description (ambiguity): court will admit parol evidence of T\xe2\x80\x99s intent.\n\n*In Validity of Subsequent Testamentary Instrument (DRR)\n\nRule: if T revokes her valid will, or portion thereof, in mistaken belief that a substantially identical will or codicil effectuates her intent, then, by operation of law, the revocation of the first is deemed conditional, dependent, and relative to the second effectuating T\xe2\x80\x99s intent (and being valid).  If second doesn\xe2\x80\x99t, first deemed never revoked.\n\nRevocation by Physical Act: even if lost/destroyed, first will can be probated if at least one witness (e.g., attorney) testifies as to contents.  Need not have been one of the attesting witnesses.\n\nInvolving Living Children: mistaken omission of child from will\n\nRule: a child is pretermitted if born or adopted after all testamentary instruments are executed and not provided for therein.  Pretermitted child receives intestate share.\n\nCorollary: if child is born/adopted before execution of all testamentary instruments, and those later instruments omit mention of him, child takes nothing unless reason for omission was T\xe2\x80\x99s mistaken belief that child was dead or non-existent.\n\nComponents of Will\n\n*Integration: paper constitutes a will or part of a will if both:\n\nIntent: T intended the papers to be part of the will\n\nPresence: paper was actually/physically present at time of execution\n\n*Incorporation by Reference: allows a non-integrated writing to become part of the will if (1) writing was in existence when the will was executed, (2) writing was clearly identified in the will, and (3) T intended to incorporate the document into the will.  The writing does not have to be independently valid.\n\nWriting Disposing of Tangible Personal Property: decedent may dispose of items of tangible personal property (excluding cash or business property) in a writing even if it could not be incorporated by reference if the writing (1) is referenced in an unrevoked will, (2) is dated and either signed by T or in his handwriting, and (3) describes the items and recipients with reasonable certainty.  The writing may be prepared before or after execution of the will.  $5000 limiter per item, $25,000 limit total.\n\n*Facts of Independent Significance: blanks in a will can be filled by reference to facts of significance independent of the will, using trustworthy parol evidence.\n\nPour-Over Wills: where part or all of T\xe2\x80\x99s estate is devised to an inter-vivos trust, the trust instrument may be admitted into probate and the pour-over effectuated via (1) Incorporation by Reference; (2) Facts of Independent Significance; or (3) the Uniform Testamentary Additions to Trusts Act, if there is a valid trust executed before or with the will, even if the trust is later modified.\n\nFormalities of Execution for Attested Wills\n\n*Elements of an Attested Will: a valid will must be:\n\nIn writing.\n\nSigned by T or appointee (if incapacitated) or conservator.\n\nSigned in presence of 2 witnesses both present at same time (or T acknowledges his signature to both at same time and presence)\n\nWitnesses must sign will during T\xe2\x80\x99s lifetime\n\nWitnesses must understand that they are signing T\xe2\x80\x99s will\n\n              Note: will not complying with iii-iv (witnessing) can be probated if proponent \n\n              establishes by CCE that at time T signed, intended to be will.\n\n*Interested Witness Problem: witness is beneficiary: will is valid, but presumed that gift procured by wrongdoing unless there are 2 other disinterested witnesses.  If witness-beneficiary rebuts the presumption, she takes per the will, but if not, she takes amount not exceeding intestate share.\n\nConditional Wills: if terms of will itself make will conditional, only probated if condition is satisfied.\n\nFormalities of Execution for Holographs (handwritten wills)\n\n*Elements: must be (1) signed by T and (2) material provisions (gift and beneficiary) must be in T\xe2\x80\x99s own handwriting.  Interlineations are valid, even if no new signature.\n\nTestamentary Intent: statement of testamentary intent (\xe2\x80\x9cthis is my will\xe2\x80\x9d) need not be in will, and extrinsic evidence is admissible to determine intent.  Even a series of letters can, under integration, constitute a holograph.\n\nDates: not required, but absence can create problems\n\nAn undated holograph is invalid to the extent of inconsistency with another will unless the undated holograph\xe2\x80\x99s time of execution is established to be later.  If two undated holographs and cannot establish which is later, neither is probated to the extent of inconsistency.\n\nAn undated holograph is invalid if T lacked capacity at any time it might have been executed, unless established that executed during time of capacity.\n\nChoice of Law: a will can be admitted to probate in CA if it complies with the formalities of execution of either (1) CA, (2) place where executed, or (3) place of domicile at time of death.\n\nCodicils: a testamentary instrument modifying, amending, or revoking a will.  Must meet same formalities as either attested or holographic will.\n\nRepublication: a codicil \xe2\x80\x9crepublishes\xe2\x80\x9d a will, so that the will is deemed re-executed at time of codicil.  May have affect on pretermission and incorporation by reference.  But note that codicil itself is valid testamentary instrument, and by itself can negate pretermission problems.\n\nRevocation: If T executes will, then executes codicil, and subsequently revokes codicil, rebuttable presumption that T intended only to revoke codicil.  But, if T executes a will, then executes codicil, then subsequently revokes the will, rebuttable presumption that T intended to revoke both.\n\nRevocation\n\n*By Physical Act\n\nElements: (1) will must be burned, torn, cancelled, destroyed, or erased, (2) T must have simultaneous intent to revoke, (3) physical act must be done by T or someone\xe2\x80\x99s in T\xe2\x80\x99s presence at his directions.\n\nCancellations & Interlineations (either crossing out lines or writing between the lines): generally revokes the changed provision yet does not add the new material (unless all material terms are in T\xe2\x80\x99s handwriting, and thus a holographic codicil).  However, old provision may be saved by DRR only if interlineation is more than cancelled provision (T rather beneficiary get less than get nothing, but not rather that get more than nothing).\n\nWhile cancellation alone can decrease beneficiary\xe2\x80\x99s take, it cannot be used to increase another beneficiary\xe2\x80\x99s take.  Instead, cancelled material goes to residuary or, if none, intestacy.\n\nDuplicate Wills: if there are duplicate, fully executed originals of a will, and T, or someone in T\xe2\x80\x99s presence and at his direction, revokes by physical act one of the originals, the other is revoked as a matter of law.\n\nMutilated Wills: if will is found in mutilated condition at T\xe2\x80\x99s death, and when last seen was in T\xe2\x80\x99s possession, rebuttable presumption that T mutilated with intent to revoke.\n\n*By Subsequent Written Instrument\n\nManner: subsequent instrument can revoke will expressly (statement in later will) or implicitly (second will totally disposes of T\xe2\x80\x99s estate).  A later holograph can revoke an attested will.\n\nRevival: if later, revoking written instrument is itself revoked, the prior will not be revived unless T manifests intent to revive the prior will.  Extrinsic evidence of intent may be offered.\n\nBy Operation of Law\n\n*Omitted/Pretermitted Child: a will executed prior to birth/adoption of child and which omits that child is revoked as to that child, who receives intestate share + assets in inter vivos trust, and other gifts are abated or reduced to effectuate.  Exceptions: child does not take intestate share, even if pretermitted, if either (1) failure to provide for child was intentional, and intent apparent from face of instrument, (2) T evidenced plan that child\xe2\x80\x99s other parent would take care of child, or (3) T provided for child outside testamentary instrument intending transfer in lieu of testamentary provision.\n\nOmitted Spouse/DP: a surviving spouse who marries the decedent after the execution of all testamentary instruments and who is not provided therein.  Spouse receives statutory share of assets owned at death + assets in inter vivos trust.  Statutory share: D\xe2\x80\x99s \xc2\xbd CP & intestate share of SP (not to exceed \xc2\xbd SP estate).  Other gifts abated or reduced to effectuate.  Exceptions: spouse does not take if either (1) failure to provide for spouse was intentional, and intent apparent from face of instrument, (2) T provided for spouse in other transfer with intent to be in lieu, or (3) spouse signed valid, written waiver.  Waiver requires full disclosure of finances and independent counsel, but still valid even if not satisfied so long as spouse should have known or waiver is in fact fair.\n\nFinal Dissolution of Marriage/DP: disposition of property to spouse is revoked upon annulment or final dissolution of marriage (but not on legal separation alone).  Reinstated if will unchanged and later re-marriage.  These are default rules if will does not otherwise provide.\n\nBy Change in Property Holdings (Ademption)\n\nClassification of Devises\n\nSpecific: a particular item.  E.g., real property, my Xerox stock\n\nGeneral: satisfied by generic item or its FMV.  E.g., Xerox stock.\n\nDemonstrative: Hybrid.  E.g., \xe2\x80\x9cTo J I leave $1000 in BofA acct.\xe2\x80\x9d, only $900 in acct., J gets $900 in acct. and $100 from general estate.\n\nResiduary\n\nAdemption by Extinction: specific devise, if not owned by T at death, is revoked and beneficiary takes nothing unless evidence that T intended a substitute gift.  Stock splits not ademption.  Where T no longer has property but is receiving eminent domain, insurance, or installment proceeds, beneficiary can get those paid after death, and can get those paid before if he can trace assets, which shows T\xe2\x80\x99s intent not to extinguish.\n\nAdemption by Satisfaction: a gift is satisfied pre-death to the extent T transfers property to the beneficiary and (1) a contemporaneous writing signed by either T or beneficiary states satisfaction, or (2) specific gift is given (this is both extinction and satisfaction).\n\nAdemption by Advancement: intestate share is satisfied pre-death to the extent D transfers property to heir apparent and a contemporaneous writing signed by either D or heir apparent states advancement.\n\nContracts Regarding Wills: T can contract to make, not make, revoke, or not revoke a testamentary instrument, and testamentary formalities are not required, as contract law controls. \n\nConsequence: if contract is broken, will is probated, but promisee can sue estate for breach and seek damages, specific performance, or constructive trust.  Can sue only at death, unless T engaging in conduct which would cause irreparable harm.\n\nHow Established: either (1) inclusion of terms in testamentary instrument; (2) reference in testamentary instrument + extrinsic evidence (even oral), (3) writing signed by T, or (4) clear and convincing evidence of agreement enforceable in equity (estoppel).\n\nContract Requirements: must be in writing unless basis for estoppel.\n\nJoint &/or Mutual Wills: execution does not create a presumption of a contract to not revoke or make will, but it may be evidence of such a contract in conjunction with other factors.  (Joint: will of 2 or more people on one document; Mutual: separate wills of 2 or more people which are reciprocal/similar.)\n\nRestrictions on Testamentary Dispositions\n\nDefinition: Quasi-CP: all personal property wherever situated, and all real property situated in CA, acquired by decedent while domiciled elsewhere that would have been CP if acquired while domiciled in CA.  Note: different than CP definition.\n\nSpousal/DP Protection\n\nCP: T can only dispose of \xc2\xbd CP in a testamentary instrument\n\nQuasi-CP: acquiring T can only dispose of \xc2\xbd QCP in a testamentary instrument\n\n              Note: non-acquiring spouse has no testamentary power to dispose of acquiring \n\n              spouse\xe2\x80\x99s CP/Quasi-CP while acquiring spouse still alive.\n\nWidow\xe2\x80\x99s Election: where T attempts to dispose more than \xc2\xbd share, widow must either take under the will or demand \xc2\xbd share but must relinquish all testamentary gifts in her favor.\n\nIllusory Transfers of Quasi-CP: an inter vivos transfer by acquiring decedent of Quasi-CP to a third person without consideration is allowed.  Spouse has only mere expectancy for Quasi-CP.  However, transfer is invalid where decedent retained some interest in the property, in which case surviving spouse may elect to require transferee to restore \xc2\xbd of the Quasi-CP.\n\nUnworthy Heirs or Beneficiaries: Killers: those who feloniously and intentionally kill the decedent cannot take under will or intestacy.  Killer is deemed to pre-decease T/D and anti-lapse inapplicable: neither killer, nor his issue, take.\n\nIntestate Succession\n\n*D Leaves Surviving Spouse/DP\n\nCP: gets all CP (e.g., D\xe2\x80\x99s \xc2\xbd and her own)\n\nQuasi-CP: gets all CP (e.g., D\xe2\x80\x99s \xc2\xbd and her own)\n\nSP\n\nIf D leaves no issue, parents, brother or sister, or issue of brother or sister > all to spouse.\n\nIf D survived by one child, or issue of a predeceased child > \xc2\xbd to spouse, \xc2\xbd to child or child\xe2\x80\x99s issue.\n\nIf D survived by 2 or more children, or issue of predeceased children > 1/3 to spouse, 2/3 to children or their issue.\n\nId D survived by no issue, but leaves parents or siblings > \xc2\xbd to parents or siblings, \xc2\xbd to spouse.\n\n*D Leaves No Surviving Spouse/DP: to (1) issue; (2) parents; (3) siblings; (4) grandparents; [(5) aunts/uncles; (6) step-children\xe2\x80\x94issue of predeceased spouse; (7) next of kin; (8) in-laws; (9) siblings-in-law; (10) escheats to state.]\n\n*Per Capita / Representation: whenever issue take by intestacy, or if testamentary instrument does not specify how taken, issue take as follows:\n\nIssue of Same Degree take per capita\xe2\x80\x94equally and own right.\n\nIssue of More Remote Degree take \xe2\x80\x9cper capita with representation.\xe2\x80\x9d  \n\nMake the initial division of shares of the estate\xe2\x80\x94one share for each line of issue\xe2\x80\x94at the first generational level at which there are survivors.\n\nAll persons living at that first generational level take one share each.\n\nThe shares of the deceased persons at the first generational level are combined and then divided equally among the takers at the next generational level in the same way.\n\nPer Stirpes: only if specified \xe2\x80\x9cper stirpes\xe2\x80\x9d or \xe2\x80\x9cby representation\xe2\x80\x9d, distribute at first line of descent even if no one alive.  Issue step into shoes of predecessor.  Thus, issue in same generational line could take different shares.\n\nAdopted Children: adopted child treated as a natural child of adopting parent.  Severs relationship with natural parent unless adoption is either (1) by spouse/DP of natural parent or (2) after death of either natural parent.\n\nStep & Foster Children: treated as adopted if relationship established in minority, lasts through lifetime, and parent would have adopted but for legal barrier.\n\nNon-Marital Children: inherits if there was a parent-child relationship.  Marital status irrelevant.\n\nHalf-Bloods: relatives with only one common parent: relatives of a half-blood inherit as a whole blood (e.g., half-blood sibling inherits as sibling).\n\nDistribution of the Estate\n\nWho Takes?\n\nPosthumous Children: child conceived during lifetime but born after death: deemed heir of an intestate and beneficiary of a testator\xe2\x80\x99s will.\n\n*Lapse & Anti-Lapse \n\nRule of Lapse: if beneficiary predeceases T, gift lapses (fails) unless contrary intent expressed in will.  Lapsed gift goes to residuary or, if no will, intestacy.\n\nCA Anti-Lapse: if predeceasing beneficiary was kindred (blood relative) of T (or T\xe2\x80\x99s spouse/DP) and leaves issue, issue step into shoes and take gift.  This is a default rule absent contrary intent in will.  Devisee cannot be spouse/DP.  Applies to class gifts as well.\n\nSimultaneous Death: where two people die and it cannot be determined by clear and convincing evidence who dies first, property of each treated as if each predeceased the other.  For joint tenants, sever the estate and give half to each tenant\xe2\x80\x99s estate.  For spouses/DPs, split CP and QCP and give half to each estate.\n\nIntestate & Heir Rule: for heir to take, must survive D by 120 hours.\n\nWhat is Taken?\n\nAfter-Acquired Property: will passes all property, including after-acquire property\xe2\x80\x94property acquired after will executed.\n\nIncrease During Testator\xe2\x80\x99s Lifetime: stock dividends or splits paid during T\xe2\x80\x99s lifetime and after T executed will devising stocks go to beneficiary if stock owned by T at T\xe2\x80\x99s death.  Doesn\xe2\x80\x99t matter if devise general or specific.\n\nIncrease After Testator\xe2\x80\x99s Death During Probate\n\nSpecific Devise: all increases go to beneficiary.\n\nGeneral Devise: do not receive increase, but may get interest on dollar gifts not distributed within one year after T\xe2\x80\x99s death.\n\nAbatement: process by which certain gifts are decreased\n\nOrder of Abatement for Omitted Spouse/DP/Child:  First, abate property not passing by will or revocable trust.  Second, abate from all beneficiaries of will/revocable inter vivos trust pro rata to the value of gift.  No distinction is made between specific and general gifts, but court can exempt specific gift if abatement would defeat obvious intent of T.\n\nOrder to Pay General Debts of Decedent: (1) intestate property; (2) residuary gifts; (3) general gifts to non-relatives; (4) general gifts to relatives; (5) specific gifts to non-relatives; (6) specific gifts to relatives.  To the extent can be satisfied from designated fund, demonstrative gifts are treated as specific gifts.\n\nExoneration: no automatic exoneration (paying off) of encumbered gifts.  Devisee takes gifts subject to encumbrance unless will specifically says otherwise with respect to that gift (general statement as to all gifts insufficient).\n\nWill Substitutes\n\nGift Causa Mortis: gift or personal property made in contemplation of imminent death, perfected by delivery (actual, symbolic\xe2\x80\x94something representative is given, or constructive\xe2\x80\x94donor has done everything possible to effectuate delivery).  If donor survives peril, gift revoked by operation of law.\n\nTotten Trust'