Bar Review Outline

I. Contracts . . . 1
II. Family Law . . . 10
III. Property . . . 19
IV. Torts . . . 31
V. Secured Transactions . . . 43
VI. Partnerships . . . 50
VII. Agency . . . 53
VIII. Corporations . . . 54
IX. Wills . . . 58
X. Trusts . . . 62
XI. Conflicts . . . 64

I. Contracts
a. Introduction
i. Contract: legally enforceable agreement (agreement + bargained-for
consideration)
1. Common law for real estate and services
2. Article 2 of UCC for goods
3. Mixed contracts—predominant purpose test except for divisible
contracts
b. Formation of a contract
i. Agreement
1. Offer: offeror’s manifestation of willingness to enter into
agreement; creates offeree’s power of acceptance
a. Objective test: objectively serious intent to be bound
b. Generally must be directed to specific offeree
c. Essential terms
i. Common law: offer must contain all essential terms
1. Parties, subject, price, quantity
ii. UCC: only essential term is quantity, all other gaps
filled by UCC
d. Requirement and output contracts:
i. Requirements contract: promise to buy all required
ii. Output contract: promise to sell all produced
e. Power of acceptance: “I accept” = deal concluded
i. Exceptions: invitations to deal and advertisements
f. Terminating an offer:
i. Revocation before acceptance
ii. Constructive revocation: when offeree learns that
offeror has acted inconsistent with ability to contract
iii. Offeree declines offer
iv. Counteroffer
v. Offeror dies before acceptance
vi. Reasonable amount of time passes
g. Irrevocable offers
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 i. Option: consideration in exchange for promise not to
revoke offer for specific period
ii. Firm offer:
1. Who: Merchants
2. How: written, signed by offeror, promise not to
revoke
3. When: as long as stated in the offer or
reasonable time (neither to exceed 90 days)
iii. Unilateral contract: when offeree has started
performance
iv. Reasonable, foreseeable, and detrimental reliance
2. Acceptance: manifestation of willingness to enter agreement
a. Objective test
i. Acceptance according to terms of offer
b. Unilateral and bilateral agreements
i. Unilateral offer: acceptance by performance
ii. Bilateral offer: acceptance by return promise or
performance
iii. Ambiguous: acceptance by return promise or
performance
c. Acceptance plus breach: arises when unilateral offer
acceptance is by wrong performance
d. For open-to-all offers, person must know of offer to accept
it
e. Both offer and acceptance must by communicated to be
effective
f. Mailbox rule:
i. Acceptance sent by mail is effective when sent
1. Except when:
a. Offeree rejects or counteroffers before
sending
2. Does not apply to revocations or rejections
a. ^ effective when received
ii. Acceptance sent, then call to reject before
acceptance received = acceptance
iii. Rejection sent, then acceptance sent = whichever
recipient receives first or opens first if received
simultaneously.
g. Acceptance by silence allowed:
i. Unilateral reward offers or contests
ii. Unilateral offer when offeror can observe
performance due to geographical proximity
iii. History of silence as acceptance
iv. Offeror requires acceptance by silence and offeree
intends to accept by silence
v. Implied-in-fact contract: communicating acceptance
by gestures or actions
3. Counteroffers
a. Common law mirror image rule
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 b. UCC § 2-207
i. Allows acceptances that do not match terms of offer
unless acceptance is made conditional on assent to
additional terms.
1. Same for memo confirming details of (usually
verbal) contract and adding additional terms.
ii. New term controls if: (§ 2-207(2))
1. Both parties are merchants
2. New term is not a material alteration
3. Offer was not expressly conditional on
acceptance of offer terms
4. Offeror does not object to new terms within a
reasonable time
iii. Knock-out rule for different terms:
1. Minority: if § 2-207(2) does not allow term,
initial offer controls the terms
2. Majority: knock out both terms and use gap-
filling provisions of UCC
iv. Acceptance by conduct
1. No contract, but act as if there is an agreement
2. Terms agreed on become part of contract and
all other terms supplied by UCC
ii. Consideration
1. Generally, an exchange of promises involving a legal detriment
or benefit
a. Detriment generally to promisee
b. Benefit generally to promisor
c. Gifts do not count
2. Adequacy of consideration
a. Pretense of consideration is insufficient
i. but difference in economic value is not grounds for
finding consideration inadequate—as long as there is
enough value
b. Illusory promise not valid
i. Must be clear commitment
ii. Satisfaction, output, and requirements contracts OK
c. Past consideration is not consideration
i. Consideration must be bargained-for in this contract
d. Promising not to sue can be sufficient if:
i. Good faith belief in validity of claim
ii. Reason to doubt validity of claim due to uncertain
law
3. Contract modification
a. Preexisting duty rule: promise to do something you are
already legally obligated to do is not consideration, unless:
i. Change in performance
ii. Third party promising to pay
iii. Unforeseen difficulties that would excuse
performance
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 b. Partial payment for debts:
i. When due and undisputed, not binding.
ii. When disputed or not currently due, modification can
be binding.
c. UCC modification
i. Good faith modification is binding without new
consideration
4. Consideration substitutes
a. Promissory estoppel (reliance) exists when:
i. Promise made that would be reasonably expected to
induce reliance;
ii. Promisee takes detrimental action in reliance on
performance; AND
iii. Injustice can only be avoided by enforcement of the
promise.
b. Quasi-contract (contract implied in law)
i. Plaintiff confers benefit on defendant;
ii. Plaintiff reasonably expected to get paid; AND
iii. Unfair to let defendant keep benefit without paying.
iv. *Damages generally limited to value of performance
c. Moral obligation plus subsequent promise
i. Small minority of jurisdiction allow this to be binding,
but generally considered past consideration that is
not binding
iii. Defenses to contract formation
1. Misunderstanding
a. Ambiguous material term;
b. Each side attaches different reasonable meaning to the
term;
c. Neither party knows or should know of the confusion
2. Incapacity
a. Who lacks capacity?
i. Minors
ii. Mentally ill
1. Cannot understand nature and consequence of
actions; or
2. Cannot act in a reasonable manner in relation
to transaction (if the other person knows/has
reason to know)
iii. Very intoxicated persons (if the other person
knows/has reason to know)
b. What happens?
i. Generally, contract is voidable
ii. Contract for necessities: fair value—not contract
price
iii. Keeping the benefits after capacity obtained: valid K
3. Mistake
a. Belief not in accord with a present fact

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 b. Mutual mistake allows adversely affected party to rescind
if:
i. Mistake of fact exists at time deal is made;
ii. Mistake related to basic assumption of K and has
material impact on deal;
iii. Impacted party did not assume risk of mistake
c. Unilateral mistake same as mutual mistake AND:
i. Mistake makes contract unconscionable; or
ii. Other side knew, had reason to know of, or caused
the mistake
1. Interpret K as mistaken party understood it
4. Fraud/misrepresentation/nondisclosure
a. Misrepresentation: untrue factual statement at time of
contracting (intentional or accidental)
i. Misrepresentation of present fact;
ii. Material or fraudulent and intentional;
iii. Made under circumstances in which it is justifiable to
rely on misrepresentation
b. Fraud in the execution: force another into signing
something they do not know is a contract
c. Nondisclosure: Generally, you do not need to tell other
side about material facts unless there is special
relationship or active concealment
5. Duress
a. Improper threat: to induce another to K or modify K
b. Undue influence: when intense sales pressure on a weak-
minded or susceptible other
6. Illegality*
a. Legal contracts in furtherance of an illegal act still
enforceable
b. Unenforceable unless enforcing party:
i. was justifiably ignorant of facts making K
unenforceable;
ii. was less culpable; or
iii. withdrew before illegal purpose was achieved and did
not engage in serious conduct
c. Modern trend toward allowing less-guilty parties to recover
restitution
7. Contracts against public policy*
a. Not formally illegal but present some other policy concern
8. Unconscionability*
a. Shocks the conscience
b. Procedural unconscionability: a defect in the bargaining
process, usually a hidden term or absence of meaningful
choice
c. Substantive unconscionability: rip-off in some term of the
contract
d. Some JDX require both procedural and substantive, some
allow one or the other
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 9. *Illegality, unconscionability, and contracts against public policy
are enforcement defenses when formation is valid but
enforcement impacted by applicable defenses
iv. Statute of frauds
1. Applies to Mr. SOUR
a. Marriage
b. Suretyship
i. Unless suretyship is for surety’s economic advantage
c. One year
i. Only if no possible way for K to be performed in
one year
ii. Satisfied by full performance or writing
d. UCC goods over $500
i. Writing need only contain quantity
1. Only enforceable for quantity written
e. Real property
i. Transferring an interest in the property
ii. Satisfied if any two of three elements are met:
1. Possession;
2. Payment;
3. Improvements to the land by purchaser.
2. Satisfaction of SoF
a. Signed writing
i. Signed by party against whom contract is asserted
ii. Covers fundamental facts:
1. That K was formed;
2. Parties to K; and
3. Essential elements of deal.
b. Partial performance
i. Satisfies SoF, but only to portion of K performed and
accepted
c. Full performance
d. Custom-made or specially manufactured goods
i. Exempt as soon as maker makes substantial
beginning or commitments for procurement toward
goods manufacturing
e. Judicial admission
i. Statement in a pleading, during testimony
f. Confirming memo if both parties are merchants and the
party does not object within ten days
3. Miscellaneous:
a. Agents: need signed authorization of agency to create SoF
contracts
b. Modification: if modifications within SoF, must meet SoF
c. Performance of a contract (Pizza With Crawling Escargot)
i. Parol evidence rule
1. Generally
a. Excludes prior statements when contract is reduced to
comprehensive (“integrated”) writing
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 b. Does not apply to later written or verbal statements
c. Does not apply to separate deals
2. Complete integration: merger clause
3. UCC: presumes that a writing is only a partial integration
unless parties would certainly include disputed term
4. Evidence hierarchy:
a. Express terms
b. Course of performance
c. Course of dealing
d. Trade usage
ii. Warranties
1. Shifts risk to party making promise/warranty
2. Can disclaim all warranties
3. Express warranty
4. Implied warranty of merchantability
a. Merchant dealing in the goods at issue
b. Warrants that goods are fit for their ordinary commercial
purpose
c. Can be disclaimed if very conspicuous and, if oral, must
use term “merchantability”
5. Implied warranty of fitness for a particular purpose
a. Buyer relies on seller’s expertise that goods will satisfy
special purpose.
b. Nonmerchant can extend warranty as long as buyer relies
on seller’s expertise
c. Warranty can be disclaimed—conspicuous and in writing
iii. Conditions: contractual obligation conditioned on future event
1. Express or implied
a. Failure to satisfy express condition generally cannot get
paid in quasi-K
2. Satisfaction condition:
a. Generally objective standard
b. Subjective for aesthetic taste
3. Waiver by words, conduct, or wrongful interference with
occurrence of condition
4. Implied conditions
a. Constructive condition of exchange: one party’s
performance conditioned on other party’s performance
i. Common law: CCE satisfied if there is not a material
breach
ii. Substantial performance satisfies CCE if failure is not
willful
1. But nonbreaching party can recover damages
for deficiency
iii. Failure to satisfy CCE: failing party may be able to
get paid through restitution or quasi-K, but not K
iv. Divisible contract: can be broken into mini-Ks for
determining substantial performance on each mini-K
5. UCC:
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 a. Perfect tender
i. Perfect goods; and
ii. Perfect delivery
b. Revocation of acceptance OK when goods seem fine upon
delivery, but defect discovered within reasonable time
c. Seller has right to cure when time is left on the contract or
seller had reasonable grounds to believe buyer would
accept a replacement
d. Delivery: generally one delivery, but installment K allowed
e. Method of tender/delivery:
i. Tender at seller’s place of business
ii. Shipment from seller’s place of business
1. Get goods to common carrier
2. Make arrangements for delivery
3. Notify buyer
4. Risk of loss*: If not addressed in the K and no
breach, buyer bears risk of loss
iii. Destination contract (to buyer’s place of business)
1. Must deliver to buyer’s business
2. Risk of loss*: If not addressed in the K and no
breach, seller bears risk of loss
6. Accommodation: if party sends offer and offeree sends
something else as an accommodation, it is a counteroffer and
party is free to accept or reject—no breach
iv. Excuse of performance obligations (impracticability, frustration of
purpose)
1. Impossibility and impracticability: unforeseen event in which
nonoccurrence was a basic assumption of K and party seeking
discharge not at fault
a. Performance becomes illegal
b. Subject matter of K destroyed
c. Special person performing party dies or is incapacitated
2. Not an excuse
a. Changes in cost of performance
b. Death after K formed* unless special person
3. Frustration of purpose
a. Extreme event undermines entire reason for creation of K
4. Cancellation of contract:
a. If some performance left from each side, can agree to
cancel
5. Accord and satisfaction
a. Accord: new performance
b. Excusal of previous obligation: satisfaction
c. Can sue on either original obligation or new promise
6. Novation
a. Both parties agree to allow substitute person to take over
obligations under a contract
b. Original promisor excused from performance
d. Anticipatory repudiation
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 i. Remedies for breach
1. Constructive condition of exchange (CCE)
a. Common law: failure to substantially perform excuses other
party’s performance obligation
b. UCC: perfect tender requires strict performance
2. Anticipatory repudiation (before performance due) remedies:
a. Treat repudiation as breach and sue immediately for
damages
b. Ignore repudiation and demand performance
3. Repudiating party can retract repudiation as long as other side
has not (1) sued; or (2) acted in reliance on repudiation.
ii. If party has reasonable grounds for insecurity, can demand adequate
assurance of performance. Failure to respond can be treated as
repudiation
e. Damages
i. Expectation damages
1. Default damages for contracts
2. Put party in the same position it would have been had it been
performed
a. Value of performance without breach compared with value
of performance with breach
3. Limits on consequential damages: reasonable certainty,
foreseeable
a. Must be proven with reasonable certainty
b. General damages: foreseeable, almost anyone would incur
as result of breach.
c. Consequential damages (unforeseeable & unique or special
to plaintiff) not recoverable unless breaching party had
some reason to know about possibility of special damages.
Hadley.
4. Mitigation: nonbreaching party must take reasonable steps to
reduce damages from breach.
a. Law calculates as if party did mitigate
b. Defendant must prove failure to mitigate
ii. Lost volume profits: selling party needs to mitigate by reselling goods
or services to another person.
1. Seller can still recover profits (price for buyer – cost for seller)
when seller has multiple products and few buyers.
a. Seller buys boat from manufacturer for $1000, plans to sell
to buyer for $1500. Seller may be able to recover $500 for
lost volume profits.
iii. Incomplete performance:
1. Ex: paying party breaches and stops paying—party providing
service should not continue running up the damages by
continued performance.
a. Expectation damages = contract price – amount already
paid – amount that would be needed to finish the job.
b. $10,000 K – $5,000 paid – $2,000 cost to finish = $3,000
expected profits
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 iv. Economic waste and diminution in market value
1. Damages are generally based on cost to complete job
a. But when that overcompensates, calculate damages based
on diminution of value
v. Reliance damages: put party in same economic position that it would
be in had contract never been created.
vi. Restitution: amount equal to benefit plaintiff conferred on defendant.
1. UCC buyer entitled to: payments made – damages provable +
20% of value of total performance or $500, whatever smaller.
vii. Liquidated damages: negotiated in contract, court will award if they are
reasonable and actual damages would be uncertain/difficult to prove.
viii. Punitive damages: generally not allowed except for torts
ix. Specific performance/injunction:
a. only when money damages inadequate;
b. presumption of specific performance for real estate
transactions;
c. generally not available for personal services contracts.
2. UCC: only for unique goods or custom items
3. Right of reclamation: reclaiming goods paid on credit when:
a. Buyer is insolvent at time of receipt of goods;
b. Seller demands return of good within 10 days of receipt;
c. Buyer still has goods
f. Third-party beneficiaries
i. Third party can sue for breach if they are an intended beneficiary;
cannot sue if they are an incidental beneficiary
ii. Types of third parties:
1. Creditor beneficiary: promisee strikes a deal with promisor to
repay debt to third party
2. Donee beneficiary: no preexisting obligation, but promisee
intends to confer gift of contract/enforcement on third party
iii. Revoking third-party rights
1. Cannot modify when:
a. Third party knows about promise, changes position in
reasonable reliance on promise.
b. Beneficiary manifests assent to K
c. Beneficiary filed lawsuit to enforce contract
2. Contract defenses available against third party
g. Assignment and delegation
i. Assignment: transferring rights under K
1. Can generally assign contract benefits in whole or in part unless
contract explicitly prohibits or invalidates assignments.
a. If K prohibits assignments, assignment = breach, but third
party can still recover
b. If K invalidates assignments, third party cannot recover
2. Multiple assignments:
a. If consideration, first assignment irrevocable unless second
assignee has no notice and obtains payment or judgment.
b. If no consideration, last assignment controls.
ii. Delegation: transferring duties under K
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 1. Outsourcing of duties generally acceptable unless K prohibits or
special interest in specific individual’s performance
2. Delegatee generally not liable for breach unless she receives
consideration from assigning party
h. Auctions:
i. Seller can give notice reserving seller’s right to bid
ii. Winning bidder can avoid payment if auctioneer knowingly accepts
seller’s bid on seller’s behalf or procured seller’s bid to drive up the
price.

~~~

II. Family Law

a. Marriage
i. A civil contract between two people. Requires:
1. Consent;
2. Consideration (exchange of promises; rights and obligations of
marriage)
3. State intervention to terminate or modify
ii. Ceremonial marriage:
1. Most JDX: requires both parties to be 18+, or minor with parental
consent
2. Many states require waiting period between license and marriage
ceremony. Licenses expire sometime between 10 to 30 days later
3. Some states require premarital medical testing; results cannot be
a condition for issuance of marriage license
4. Licenses will not be issued when:
a. A party is married to someone else
b. Close familial relationship
c. Sham/fraud
d. Incapable of understanding act of marriage (intoxication,
fraud, duress)
5. Same-sex marriage recognized in all JDX under Full Faith and
Credit Clause
6. Solemnization: two witnesses, officiant, filing marriage license.
a. Some states allow for a party to have a proxy marriage
with a stand-in for a spouse who is unavailable
(deployment, incarceration, etc.)
iii. Common-law marriage: custom, capacity, consent, conduct, and
cohabitation.
1. Recognition under full-faith and credit unless it is in violation of
the state’s strong public policy to recognize
b. Ending a marriage
i. Annulment: judicial decree invalidating/voiding a void/voidable
marriage
1. Void: no decree required to end marriage; any party can seek
annulment.
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 a. Bigamy: prior existing marriage invalidates subsequent
b. Incest: close blood or marital relation—varies by state
c. Mental incapacity
2. Voidable: judicial decree when one party seeks annulment
a. Age: party under 18 without parents’ consent
i. Parents of minor child can seek annulment
ii. Age of majority + cohabitation = not voidable
b. Impotence: when one party is naturally and incurably
impotent, unless the other party knew before marriage
c. Intoxication: party incapable due to drugs or alcohol,
unless parties continue to cohabitate
d. Fraud, misrepresentation, duress, coercion, force
i. Fraud going to essence of marriage, in existence at
time of marriage, not about future facts
1. As soon as fraud discovered, parties must
cease cohabitation
2. Insufficient fraud: lies about wealth, poor
morals, bad habits, bad tempter
a. Some JDX: fake pregnancy
e. Lack of intent: shams, jokes, unless marriage
consummated
i. Includes green card/immigration marriages
3. Effect of annulment
a. Spousal support and equitable division of marital property
still available; child support for marital children
4. Defenses to annulment: denying impediment; dissolution still
available
5. Putative marriage: divorce provisions available to parties who
believe their marriage is valid, even if it is not
ii. Divorce and separation:
a. Most states require residency of state issuing divorce;
marriage in state or grounds for divorce in state often
considered in residency determination.
2. No-fault divorce (irretrievably broken; irreconcilable
differences)
a. Half of states require separation period; spouse cannot
prevent dissolution
3. Fault-based divorce (most states recognize, but substantial
minority does not)
a. Adultery: voluntary sexual intercourse with person other
than spouse
i. Requires opportunity and inclination, circumstantial
evidence
b. Cruelty or inhumane treatment: pattern of conduct, most
states require physical abuse, some allow emotional or
cruelty, makes cohabitation unsafe
c. Desertion (abandonment) without consent or cause, with
intent to remain away permanently

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 i. Some JDX recognize spouses forced out with fear of
harm when they return
d. Habitual drunkenness (some states)
e. Bigamy: party knowingly enters into prior legal marriage
before current
f. Imprisonment for specified period of time
g. Indignity: negative behavior to other that renders life
intolerable or burdensome (habitual laziness, manifest
disdain, sexually deviant)
h. Institutionalization: insanity or mental condition results in:
i. confinement to institution for specified time;
ii. before divorce commences;
iii. no reasonable prospect of discharge or rehabilitation
4. Defenses to fault-based divorces:
a. Recrimination: both spouses commit similar wrongful
conduct
b. Unclean hands: plaintiff’s own behavior is in question
c. Connivance: consent for other spouse to commit marital
wrong
d. Condonation: knowing forgiveness for wrongful act, resume
e. Collusion: parties fabricate grounds for divorce
f. Provocation: misconduct due to other spouse’s conduct
g. Insanity: spouse lacks ability to understand wrongful nature
of act
h. Consent: to desertion or adultery
i. Justification: spouse leaves home because of other’s
misconduct
j. NOT religion: challenges on religious grounds always fail
5. Limited divorce: legal separation with support and property
division
6. Separate maintenance: support while parties live together
7. Divorces finalized after certain period
iii. Division of property
1. Community property (nine states): presumably equal distribution
2. Equitable distribution: most states follow, requires fair and just
distribution
3. Marital property, generally:
a. Property acquired during marriage, but not:
i. Property acquired before marriage;
ii. Gifts and inheritance;
iii. Property acquired after separation
b. Increases in value of separate property and during
marriage, especially when improvement is due to marital
property funds
c. Gifts between spouses
d. Burden of proof on person claiming property is not marital
property
4. Exceptions to marital property:
a. Property acquired before marriage
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 b. Property excluded pursuant to valid agreement
c. Property acquired by gift or inheritance, unless between
spouses
d. Property sold, granted, or conveyed for value in good faith
before final separation
e. Property mortgaged or encumbered in good faith before
final separation
f. Award or settlement for causes before the marriage
5. Distribution of marital property factors:
a. Length of marriage
b. Economic circumstances of each spouse (age, health,
retirement, earnings and earning potential, needs of
spouse, economic at divorce)
c. Contributions to education or career advancement of other
spouse
d. Needs for future acquisitions
e. Value of separate property
f. Depreciation in value of marital property by one spouse
g. Custodianship of minor children
6. Specific types of marital property
a. Professional licenses/degrees: majority: not distributable,
may affect support or distribution of marital assets
b. Pensions or retirement benefits: marital property subject to
equitable distribution
c. Personal injury claim proceeds:
i. Marital property approach: injury during marriage is
marital property, even if proceeds received after
divorce
ii. Separate and marital allocation:
1. pain and suffering, disability to injured spouse
2. lost wages, income, medical expenses: marital
property
iii. Consortium claims are separate property of
noninjured spouse
d. Goodwill of business: marital property if developed during
marriage
7. Tax consequences: equitable distribution payments not taxed as
income
8. **Property division is NOT modifiable**
iv. Financial support of spouses (alimony): when one spouse cannot
support themselves with their own employment or assets. Generally:
a. Can occur during or any time after marriage
b. Can last any amount of time
c. Cannot be discharged in bankruptcy
d. Cannot be waived for consideration
2. Factors:
a. Financial resources of parties, ability of payor to pay
b. Standard of living during marriage
c. Time to find a job or complete education
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 d. Duration of marriage:
i. Short term: up to seven years
ii. Moderate term: seven to 15 or 16 years
iii. Long term: 16 or 17+ years
e. Contributions to marriage, especially if spouse has
enhanced earning capacity of the other spouse
f. Age and health of the parties
g. Marital misconduct, including adultery (but many JDX
preclude as a factor)
h. Children and future responsibilities for children
3. Modification: can be modified unless no original maintenance
awarded
a. Party must show significant change in circumstances in
either needs of recipient or in financial abilities of payor
4. Death: usually terminates estate unless court otherwise specifies
5. Remarriage:
a. If payor remarries, court may modify payor’s support
b. If recipient remarries, court may terminate support
6. Cohabitation: does not automatically end maintenance, but court
may consider factors of cohabitating relationship, including
financial relations
7. Retirement: some JDX will modify
v. Jurisdiction of the court:
1. Subject matter JDX and personal JDX
a. Residency generally required: six weeks to two years
2. Powers of matrimonial courts:
a. property division, divorce/annulment, custody orders,
support and alimony orders, attorney’s fees, enforcing
separation agreement, sanctions; more.
3. Divisible and ex parte divorce: court can grant ex parte divorce
determining only marital status when it only has PJ over one
party—cannot issue orders on support, property division, or child
custody
a. Defendant can challenge ex parte divorce when plaintiff
not domiciled in state issuing divorce
4. Indigent parties: no right to counsel, but fees and costs not
required to seek divorce
c. Child support
i. Parties have equal responsibility unless circumstances dictate
otherwise
ii. Based on child’s needs, not parents’ ability to pay
iii. Support until age 18, or more if child still in high school, physical or
mental condition requires additional support, or extended through
college degree
iv. Nonmarital children are entitled to support, government benefits,
death benefits, and inheritance rights.
1. Paternity must be established before father’s death
a. Parents marry after birth of child
b. Father puts name on child’s birth certificate
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 c. Father holds himself out to be father
d. Judicial decree
v. Paternity
1. Paternity actions not available to public.
2. Paternity gives rise to right to custody and visitation, and duty to
support.
3. Blood test, statements by deceased family members, medical
testimony, defendant’s knowledge of paternity, physical
resemblance
4. No time limit (Equal Protection Clause)
5. Child born to married woman presumed to be husband’s child,
even if artificial insemination (when husband consents)
6. Some states prevent woman from denying husband’s paternity
7. Some states allow husband to prove non-paternity and escape
support
vi. Husband may be estopped from denying duty of child support if
husband promised, wife relied, economic detriment would result from
reliance
vii. Personal jurisdiction over out-of-state parent
1. UIFSA (Uniform Interstate Family Support Act) in all states allows
personal JDX by
a. Personal service, PJ by appearance, past residency with
child in state, past residency in state while providing child
support, directing child to reside in state, act of conception
in the state, defendant asserted parentage via putative
father registry in the state, any other basis consistent with
federal or state PJ
viii. Amount of support
1. Factors, unless state has guidelines for determining
a. Wages, dividends, interest, capital gains, rental income,
retirement benefits, social security income
2. Calculating support
a. Income shares (majority): add both incomes, determine
amount of child support based on total income, allocate
responsibility respective to each party’s income
b. Percentage of income: Percent of non-custodial parent’s
income, determined by number of children who are being
supported
c. Deviating from child support guidelines
i. Court must specify why it is deviating
d. Payor cannot monitor how money is spent
3. Other considerations: age of child, unusual needs (medical,
education, etc.), support obligations of parties, assets of parties,
medical expenses outside of insurance, relative standard of
living, duration of marriage, best interest of the child
4. Medical insurance: majority JDXs include medical expenses in
child support, premiums for insurance deducted from net income
of parent who pays insurance
ix. Modifying support (most states allow)
16
 1. Substantial change in circumstances required (10% or more in
amount owed)
2. Burden is on party seeking modification
3. Change retroactive to date of service of motion for modification
4. Cannot seek modification based on voluntary reduction of
income, unless change in come made in good faith and no
hardship to child results.
x. Terminating child support:
1. Automatically at age 18
a. unless still in high school, disabled, or in college (some
JDX)
2. Child marries
3. Emancipation
4. Termination of parental rights
5. Death of child
6. Parent dies (but life insurance can be required)
7. Jurisdiction
a. JDX required for modification
b. Moving JDX allowed by agreement or neither party nor
child living in court of continuing JDX
8. Tax consequences:
a. Cannot deduct child support from income or include it as
income
b. Medical expenses can be deducted
xi. Enforcement of child support by contempt, garnishment, or withholding
tax refunds
1. Civil contempt: fines, incarceration until amount paid (JDX split
indigent counsel)
2. Criminal contempt: jail term, generally for willful failure to pay
beyond reasonable doubt
3. Other sanctions: Intercepting tax refunds, suspending driver’s
license, suspending professional licenses, reporting to credit
bureau, seizing property or assets, insurance or bond, attorneys
fees, ordering a job search, seizing passport if more than $5,000
xii. Enforcement by other states
1. If registered in second state, enforceable from first state
2. Only original state can modify order
d. Child custody
i. Legal custody: right to make major decisions for child (religion,
education, medical expenses)
ii. Physical custody: everyday decisions for daily care and control of child,
including residency
iii. Joint custody: majority of cases, requires cooperation by parents,
shared decision-making, residence generally with both parents, 50-50
not required
iv. Standard: best interest and welfare of the child
1. Parent determined to be in the best position to care for child
unless deemed unfit
2. Primary factor: who was the primary caretaker before divorce?
17
 3. Race cannot be a factor; religion typically not a factor
4. Past sexual conduct of parent not considered unless it has a
negative impact on child
5. Parents
a. Presumption for legal parent to have parental responsibility
unless deemed unfit, detrimental to child, or parent
terminates parental rights
b. Fit parent>grandparent or stepparent
c. Exception for parent by estoppel—when child was living
with a third party for extended period
d. Best interest standard is used in all custody cases, even if
between parent and third party
6. Child’s preference: may be considered in determining custody,
but only if child is of sufficient maturity
a. Child never brought into court unless ordered by the court
and only then on good cause
v. UCCJEA (Uniform Child Custody Jurisdiction and Enforcement Act
1. Home state JDX:
a. Where child has lived with a parent for 6+ months, or since
birth if younger
i. Still the home state if child has moved within past 6
months and a parent or guardian still lives there
2. Significant-connection JDX
a. No other state has home-state JDX
b. Child and 1+ parent have significant connections to new
state
c. Substantial evidence in the state concerning the child
3. Default JDX
a. No court has home state JDX;
b. No court has significant-connections JDX; and
c. Court in a state that has appropriate connections to the
child
4. Temporary emergency JDX
a. Child is in danger and requires immediate protection
5. Court that made initial rulings has exclusive continuing JDX until:
a. parties no longer reside there,
b. child does not have significant connection, and
c. no substantial evidence of child’s condition is available in
the state
6. Courts can decline JDX when forum is no longer convenient, per
these factors:
a. When domestic violence occurred
b. Length of time child has resided outside JDX
c. Distance between competing JDX
d. Parties’ relative financial circumstances
e. Agreement of the parties
f. Nature and location of relevant evidence
g. Each court’s ability to decide issues expeditiously and
procedures necessary
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 h. Familiarity of each state court with facts and issues
7. Enforcement of another state’s orders
a. Registration of order: certified copy + registration = court
can grant relief
b. Expedited enforcement of a child custody determination
requires appearance day after service or else immediate
physical possession*
c. Warrant for child custody can be issued when child is likely
to suffer serious physical injury or be wrongfully removed
from the state
d. Law enforcement can obtain return of the child or enforce
an order when:
i. Court requests, or
ii. Official believes person holding child violated
criminal statute
vi. UDPCVA (Uniform Deployed Parents Custody and Visitation Act)
1. Cannot use potential deployment against military personnel if
not imminent
2. Temporary custody and out-of-court agreements
3. Prohibits permanent orders before or during deployment (unless
consent)
vii. PKPA (Parental Kidnapping Prevention Act)
viii. Visitation: constitutional right to see child, but must be in best interest
of child
1. Parents create agreement as to time, place, and circumstances
of visitation
2. Denying non-custodial visitation is very unusual, unless it would
seriously endanger the child
3. Supervised visitation or other time restrictions (e.g. no
overnights) is OK
4. Third-party visitation:
a. Stepparents, grandparents, nonbiological coparents in
cases of in loco parentis before divorce
b. Generally, no protected rights for third party visitation after
divorce
c. Grandparents: by state statute, but no guarantees. Court
will look at:
i. Fit parent’s decision, conditions of visitation in
applicable statute, and best interests of the child
d. Unwed biological father: right to substantive due process
i. But to enforce visitation rights, father must
demonstrate commitment to parenting
responsibilities
ii. State may preclude father’s paternity petition
5. Sexual relationship or cohabitation: courts unlikely to restrict
visitation based on sexual relationship or cohabitation by parent
unless it adversely affects or impacts the child
6. HIV/AIDS:

19
 a. Courts cannot deny a parent’s rights of visitation due to
HIV or AIDS
7. Interference or refusal to comply with visitation order can be
remedied by:
a. Change in custody; contempt; or make-up time
ix. Enforcement: potential remedies
1. Compensatory visitation; attorney’s fees and court costs; impose
a fine or order jail time; tort damages for lost time with child
2. Court cannot deny visitation for failure to pay child support
3. Habeas corpus proceedings
a. Not for custody or visitation disputes;
b. Available for parents with legal custody but no physical
custody
4. Enforcement of foreign decrees available only if original order
was registered in the second state.
a. Court cannot modify unless prior court denied JDX, and out-
of-state party has sufficient notice
x. Modification: “change in circumstances” standard—substantial and
unforeseen at time of judgment entry
1. Must be in best interests of child
2. Original state retains SMJ
3. Failure to pay child support not a basis for modification
4. Relocation:
a. Best interest of child (some states)
b. Relocating parent has presumptive right to relocate as long
as child’s welfare not prejudiced (some states)
c. Legitimate and reasonable purpose burden for relocating
parent (some)
d. Burden on objecting parent to show not in best interest
(some)
5. Generally, trend for allowing parent to relocate for legitimate
reason
6. Factors
a. Potential involvement of nonrelocating parent with child
b. Age and needs of child, special needs
c. Ability to preserve the relationship with the nonmoving
parent
d. Child’s preference
e. Movant’s history of promoting parenting time
f. Enhancing effect on the child’s life
g. Each parent’s motive
h. Other factors
7. Cohabitation can be grounds for modification, but generally not
xi. Termination: death of parent or child reaching majority
xii. Parental Consent required for:
1. medical procedures (tort liability) unless emergency, older and
mature child, or public health issues
2. religious beliefs: if they contradict best interest of child, court
can declare child in need/neglected
20
 3. upbringing: parent generally can do what they want
e. Marital agreements
1. Premarital agreements: contracts, marriage is consideration, not
enforceable re: child custody or support
2. Separation agreements: while planning for divorce, as long as
there is no divorce, usually merged into divorce decree, always
modifiable re: custody and support for best interest
3. Property settlement agreements: purpose—to settle and finalize
economic issues between parties to impending divorce
ii. Validity of marital agreements:
1. Full disclosure of assets and debts;
2. Fair and reasonable terms;
a. Wealth, age, and health of parties
b. Procedural and substantive fairness
i. Procedural: fraud, duress, force, undue influence,
mediator misconduct
c. At time of execution (majority) or at time of enforcement
(minority)
d. Trend: enforce as long as there was full disclosure, fairness
notwithstanding
e. Courts may choose not to enforce if the agreement would
leave a spouse woefully impoverished and depended on
the state
3. Voluntary;
a. Time pressure, business experience/sophistication, counsel
4. In writing; and
5. Signed
iii. Enforcing:
1. disclosure, voluntariness, and fair and reasonable terms required
in all JDX
2. Non-UPAA states: other grounds available
iv. Invalidating marital agreement: must prove by clear and convincing
evidence
f. Agreements between unmarried cohabitants:
i. Enforceable, but there must be consideration that is not sexual
relationship
ii. Courts less likely to enforce implied cohabitation agreement
iii. Property division between unmarried cohabitants: equitable
distribution if no contract
g. Adoption: terminates prior parent-child relationship and new parent-child
relationship created
h. Domestic violence: civil relief by state law, generally injunction no-contact
order
i. Child’s rights and obligations:
i. Can convey property and enter into contracts, but not wills
ii. Parental consent almost always necessary for emergency medical care,
but risk to life can override requirement. Minors can consent to
abortions, STD treatment, and birth control
iii. Criminal liability in juvenile courts
21
 iv. Torts judged by more lenient standard
v. Emancipation when child is self-supporting, makes child no longer a
minor, eliminates parental duties. Emancipation by petition to court or
by marriage.
vi. Parental authority can be limited or terminated in the best interest and
welfare of the child for abandonment, neglect, failure to support,
inflicting serious harm, etc.

~~~

III. Property
a. Ownership
i. Transfer of ownership can occur by sale, gift, devise, or intestate
succession
ii. Estates in land: present and future interests
1. Fee simple: the default estate, no future interest, lasts forever
or until alienated
2. Fee simple determinable: durational language
a. Future interest: possibility of reverter
i. Vests automatically at end of durational period
3. Fee simple subject to condition subsequent: conditional
language
a. Future interest: right of entry
i. Must be exercised or reclaimed
4. Fee simple subject to executory interest (durational or
conditional, third party)
a. Future interest: executory interest held by a third party
(“executor”)
b. Durational or conditional language
c. Executory interests: future interest that divests a prior
vested interest
i. Springing interest divests the grantor
1. O: “to A for life, then to B one year after A
dies”
a. A dies  O  B in one year
b. Divests O, the grantor
ii. Shifting interests divests prior grantee
1. O: “to A for life, then to B”
a. A dies  B
b. Divests A, a prior grantee
5. Life estate: estate limited by a lifetime
a. “For life” or other intent for estate to terminate at end of
life
b. Ends automatically when measuring life ends
c. Reversion: goes back to grantor
d. Remainder: goes to a third party (transferee)
iii. Waste: when more than one party has an interest in same property
a. Affirmative waste: voluntary conduct decreases value
b. Permissive waste: neglect decreases value
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 c. Ameliorative waste: change of property use increases
value
2. Also applies in landlord-tenant, cotenant not in possession v.
cotenant in possession, mortgagee v. mortgagor
iv. Doctrine of worthier title: reversion to grantor instead of grantor’s
heirs
1. B: “to A for life, then to my [B] heirs”  to A for life, then to B
v. Rule in Shelley’s case: presumption of fee simple absolute instead of
leaving remainder to grantor’s heirs
1. “to A and her heirs”  to A
b. The Rule Against Perpetuities
i. Interests subject to RAP
1. Vested vs. contingent remainders
i. RAP generally applies only to contingent remainders
1. But also to vested remainder subject to open
ii. RAP does not apply to a vested remainder:
1. Ascertained grantee, and
2. Not subject to condition precedent
b. RAP applies to vested remainder subject to open:
i. VR in class gift, and
ii. Full class membership is unknown
iii. At least one member has vested (if not, contingent)
iv. When all members identified, class closes
v. Rule of convenience: to avoid RAP, close the class
when any member becomes entitled to immediate
possession
2. Executory interests: future interest that divests a prior vested
interest
a. Springing interest divests the grantor
i. O: “to A for life, then to B one year after A dies”
1. A dies  O  B in one year
2. Divests O, the grantor
b. Shifting interests divests prior grantee
i. O: “to A for life, then to B”
1. A dies  B
2. Divests A, a prior grantee
ii. Will we know 21 years after someone’s death whether an interest vests
or not?
1. When:
a. Inter vivos transfers: interests are created at time of grant
b. Devise: interests created at testator’s death
2. What:
a. Contingent remainders
b. Executory interests
c. Class gifts, if not closed by rule of convenience
d. Right of first refusal
3. Who:
a. Relevant validating lives:
i. (1) persons;
23
 ii. (2) who affect vesting, including prior life tenants and
parents of children to whom conveyance is made;
iii. (3) living at the time interest was created
4. Application: interest must vest within 21 years after relevant
validating lives in being end
iii. RAP violations: strike violating interest
iv. Class gifts: bad as to one, bad as to all
1. Unless:
a. Transfers of a specific dollar amount or transfers to a
subclass that vests at a specific time
v. Exceptions to RAP
1. Gifts from one charity to another
2. Options held by a current tenant to purchase a fee interest in the
leasehold property or commercial transaction (right of first
refusal)
vi. Cy pres: allows court to reform transfer to avoid RAP
c. Concurrent estates: two or more people own or possess property
1. Concurrent owners have right to use whole of property unless
they contract out of that
ii. Tenancy in common: default current interest (presumed)
1. Separate and undivided interest
2. No right of survivorship
iii. Joint tenancy
1. Requirements: right of survivorship, plus the four unities:
a. Possession (equal right to possess)
b. Interest (equal interest)
c. Time (received at the same time)
d. Title (all interests from same instrument of title)
2. If any unity is severed, joint tenancy becomes tenancy in
common, but only for the portion of the tenancy that is severed.
3. Mortgages: in title theory (minority) states, mortgage severs title
and tenancy, creditor is converted into tenancy in common
4. Leases: JDX split on whether leases to tenants sever tenancy or
temporarily suspend
iv. Tenancy by the entirety
1. All rights of joint tenancy, plus marriage
a. “tenants by the entirety with right of survivorship”
b. If ambiguous, presume another type of tenancy
2. Tenants by the entirety cannot alienate or encumber their share
without consent of spouse
v. Ownership rights and obligations of concurrent owners
1. Ouster: co-tenant in possession denies another co-tenant access
to the property
a. Remedies: injunction or damages for value of use while
unable to access
2. Third party rents and operating expenses
a. Rent divided based on ownership interests of each co-
tenant

24
 b. Operating expenses: divided based on ownership
expenses; cotenant can collect contribution from other co-
tenants
c. Repairs: no right to reimbursement for necessary repairs,
but can get credit in partition
d. No right to reimbursement for improvements, but credit in
partition
3. Partition: right to sever tenancy
a. For tenancy in common and joint tenancy, not tenancy by
entirety
b. Court divides property into distinct portions (physical
division preferred), or will order a sale if physical partition
is impractical or not fair
i. Proceeds from partition by sale divided based on
ownership interests
c. Cotenants can agree to not partition as long as clear and
reasonable
d. Discrimination
i. Fair Housing Act
1. Prohibits discrimination in sale, rental, financing of dwellings
2. Prohibits discriminatory purpose statements in advertising
3. What is and is not covered?
a. Focus on multi-family residential housing
b. NOT: single family housing sold or rented without broker,
owner-occupied buildings with four or fewer living units,
religious organizations or clubs
4. Discrimination:
a. Race, color, religion, national origin, sex, disability, and
familial status (children, pregnancies)
i. Exception for senior living communities
5. Requirements: reasonable accommodations
6. Prohibited:
a. Refusal to rent, sell, or finance a dwelling
b. Requiring different rents
c. Denying that a unit is available
d. Different facilities services
e. Discriminatory preferences stated in advertisements
i. Exceptions for advertisements
1. Discriminatory advertisements allowed only for
religious organizations, private clubs, and
2. Single-family w/o broker and <four multi-family
home ONLY IF there are shared living areas and
restriction is sex-based
e. Choice of law: controlling law is based on where property is located
i. Actions where choice of law matters: foreclosure, land contract
disputes, equitable interests, intestate succession, interpreting
conveyances
ii. Law of the situs applies unless:
1. Instrument designates applicable jurisdiction
25
 2. Domicile may override law of situs in marital property disputes
re: separate or marital
3. Mortgage may require repayment in another state
f. Landlord-tenant
i. A lease is a contract and a property interest
ii. Types of leases
1. Tenancy for years
a. Fixed and ascertainable amount of time
b. One+ year requires signed writing per SoF
c. Terminates automatically at end of lease, no notice
required unless lease says otherwise
d. Terminates if tenant surrenders the lease or either party
materially breaches
2. Periodic tenancy
a. Repetitive tenancy for set time (e.g., month-to-month)
b. Created intentionally either by signed lease or payment of
rent
c. Renews automatically until notice of termination—usually a
month, depends on the state law
3. Tenancy at will
a. May be terminated at any time for any reason without
notice
b. Express or implied
4. Tenancy at sufferance
a. Holdover tenant before tenant leaves, landlord evicts, or
tenancy renewed
b. Tenant owes reasonable value and reasonably foreseeable
damages
c. Created by actions of tenant alone
iii. Tenant’s duties:
1. Pay rent
a. Unless premises destroyed by no fault of tenant, landlord
evicts (partially or completely), or landlord materially
breaches lease
b. Material breach:
i. Violation of implied covenant of quiet enjoyment
(constructive eviction)
1. Premises unusable for intended purpose
2. Tenant notifies landlord
3. Landlord does not fix problem
4. Tenant vacates after reasonable amount of
time passes
ii. Implied warranty of habitability: LL must maintain
property so that it is suitable for residential use
(protects tenant’s health and safety)
1. Not waivable
2. Housing code violations
3. Residential properties only

26
 4. Tenant may refuse to pay rent, remedy the
defect and offset costs against rent, or defend
against eviction
a. Must notify LL and give reasonable
opportunity to correct the problem
b. Tenant does not have to leave
2. Avoid waste
iv. Landlord’s duties:
1. Mitigate damages
a. Majority: reasonable attempt to re-rent the property
b. Minority: no mitigation necessary (more common in
commercial leases)
2. Holdover tenants: can evict or create new periodic lease
3. Deliver possession to tenant (physical (majority) or legal
(minority))
4. Quiet enjoyment: LL must control common areas and nuisance,
provide habitable premises for residential leases
a. Not responsible for third parties out of LL’s control
5. Cannot retaliate against tenants for complaints
v. Tort liability
1. Tenant owes duty of care to invitees, licensees, and foreseeable
trespassers
2. Landlord owes duty to invitees, licensees, and foreseeable
trespassers for:
a. Latent defects about which tenant has not been warned
b. Faulty repairs completed by LL or agent negligently
c. Negligence that causes injury in common areas of property
d. Modern trend toward duty of reasonable care
vi. Transfers: subleases and assignments
1. Assignment: complete transfer of remaining term
a. Both assignee and tenant liable for rent
2. Sublease: less than entire duration of lease, tenant retains
reversionary interest
a. Tenant is liable for rent
3. Permission:
a. if lease is silent, tenant may transfer freely
b. if lease requires LL’s permission, LL may deny permission
for commercially reasonable reason (majority) or at her
discretion (minority)
4. Landlord may transfer her interest to new LL, who will be bound
by terms of existing lease
a. Attornment: tenant acknowledges new LL either by writing
or paying rent to new LL
b. A lease covenant can be enforced by an assignee-landlord
if the covenant runs with the land—i.e., the original parties
intended to bind their successors, the covenant touches
and concerns the land, and there is privity of estate.
g. Land Sale Contracts
i. Contract, then deed
27
 1. Contract merged into the deed upon deed signing
ii. Statute of Frauds
1. In writing,
2. Signed by party to be charged, and
3. Includes essential terms:
a. Parties (seller, buyer)
b. Description of property
c. Price and payment info
4. Exceptions:
a. Partial performance: most states require at least 2/3:
i. Payment of all or part of purchase price
ii. Possession by purchaser
iii. Improvements by purchaser
b. Detrimental reliance: reasonable reliance and would suffer
hardship if K not enforced
iii. Marketable title: implied in every land sale contract
1. Free from unreasonable risk of litigation, like:
a. Unquieted titles
b. Mortgage, covenant, easements
c. Violation of zoning ordinances
2. Reasonable buyer standard
3. Remedy: rescission of contract
iv. Delays in transfer of deed: time is not of the essence generally, unless
the contract states otherwise—may be a breach, but is not grounds for
rescission
v. Implied warranty of fitness or suitability—defects in new construction
are grounds for damages in most JDX. Minority restricts to only original
buyer
1. Suits must be brought within reasonable (or statutory) time after
discovery of defect
vi. Duty to disclose all known, physical, and material defects
1. Latent or hidden defects that substantially affect value of home,
health and safety of occupants, or desirability of home; “as is”
not sufficient
vii. Merger of contract into deed—deed controls after closing
viii. Seller’s remedies for buyer breach
1. Damages: difference between contract and market price
2. Rescission: sell property to someone else
3. Specific performance
ix. Buyer’s remedies for seller breach
1. Damages: difference between contract and market price
a. If seller acted in good faith but breached, only out-of-
pocket expenses
2. Rescission: return payments to buyer and cancel contract
3. Specific performance
x. Equitable conversion and risk of loss between K for sale and deed
1. Majority: buyer is responsible for risk of loss, even if seller has
right to possess
2. Minority: risk of loss on seller until closing and delivery of deed
28
 h. Adverse possession
i. Trespass until title acquired through adverse possession, does not
apply to government
ii. Elements:
1. Continuous for statutory period
a. Plus tacking onto predecessor’s time if in privity
b. Clock does not run if owner has disability (infancy, insanity,
or imprisonment)
2. Open and notorious
a. Sufficient to give true owner reasonable notice
3. Hostile
a. Adverse to owner’s interest
4. Exclusive
a. Cannot share possession with true owner
iii. Includes subsurface rights
iv. See: easement by prescription
i. Deeds
i. Must be both delivered and accepted
1. Delivered
a. Controlling question: did grantor have present intent to
transfer property
b. Physical transfer of deed not required
2. Acceptance
a. Presumed if transfer is for value
ii. Brokers: can be involved with land sale contracts as long as they do
not practice law
1. Majority: drafting contract is okay, drafting deed is not
2. Legal discretion or legal advice not okay
iii. Contents of a deed:
1. Identify parties
2. Signed by grantor or agent
3. Words of transfer
4. Sufficient description of property
iv. Recording: publicly registering a deed to give notice to others
1. Deed is valid at delivery, no recording needed
v. Wild deed: recorded but not in chain of title, not recorded correctly,
does not give notice to subsequent purchasers
j. Recording acts
i. What’s covered: deeds, mortgages, leases, options, judgments
affecting title, easements, covenants, and other instruments creating
interests in land, but not adverse possession
ii. Who’s protected: subsequent purchasers
1. Who is not protected: grantees who acquire title by gift,
intestacy, or devise are not protected against prior purchasers,
BUT are protected against subsequent
iii. Why: Notice!
1. Actual notice: real, personal knowledge of prior interest
2. Constructive/record notice: prior interest is recorded

29
 3. Inquiry notice: reasonable investigation would disclose prior
interests
a. Dude on the land and mentioned interest most common
situations
iv. Race statutes: First to record wins
v. Notice statutes: Subsequent purchaser without notice of prior,
unrecorded conveyance wins
vi. Race-notice statutes:
1. Acquired without notice of prior unrecorded conveyance; and
2. Records first
vii. Shelter rule: Person who takes from a bona fide purchaser protected by
recording act has same rights as her grantor
1. In a Notice State:
a. OA (does not record); OB (records without notice of A);
C is aware of A’s interest, but buys from BC is protected
because B did not have notice
viii. Estoppel by deed
1. If grantor conveys land grantor does not own, grantor is
estopped from attempting to repossess if grantor subsequently
gets title
k. Deeds
i. General deed: warrants title against all known material defects
1. Six implied covenants:
a. Present covenants
i. Covenant of seisen: deed describes land in question
ii. Covenant of right to convey: grantor has right to
convey
iii. Covenant against encumbrances: no undisclosed
encumbrances that could limit value of property
b. Future covenants
i. Covenant of quiet enjoyment: grantee’s possession
won’t be disturbed by third-party claim
ii. Covenant of warranty: grantor will defend against
future claims of title by a third party
iii. Covenant of further assurances: grantor will fix
future title problems
ii. Special deed: warrants title against only defects caused by the grantor
1. Same six implied covenants, but only as they apply to acts or
omissions of grantor
2. Less protection than general warranty deed
iii. Quitclaim deed
1. Grantor makes no warranties re: health of title
2. Often used in tax sales and intra-family disputes, like divorces
iv. Breach of covenants and remedies
1. Breach of present covenants occurs at conveyance
2. Breach of future covenants occurs after conveyance when there
is interference with possession
3. Remedies: damages
l. Wills
30
 i. Transfer of real property by will based on testator’s intent
1. Exoneration-of-liens: assets in testator’s estate can be used to
pay off encumbrances on real property transferred by devise
m. Mortgages
i. Security devices used to secure payment of debt
1. Note (promise to repay) & mortgage (instrument that provides
security for note)
ii. Purchase money mortgage: loan for purpose of purchasing property
iii. Future advance mortgage (second mortgage): used for home equity,
construction, business, and commercial loans
iv. Lien states v. title states
1. Lien state (majority): mortgage is a lien that does not sever joint
tenancy
2. Title state (minority): mortgage severs joint tenancy and
converts into tenancy in common
v. Alternatives to mortgages—equitable mortgages
1. Deed of trust: trustee holds title for the benefit of the lender
2. Installment land contract: seller finances purchase, retains title
until buyer makes final payment
vi. Transfers of property:
1. Transfers by mortgagor
a. Mortgagor remains personally liable after a transfer of
property unless:
i. Lender releases mortgagor or modifies transferee’s
obligation
b. Due-on-sale clause: lender can demand immediate full
payment on transfer.
i. Not enforceable against conveyance of residential
property to debtor’s spouse or ex-spouse on divorce
c. Due-on-encumbrance clause: acceleration clause when
mortgagor obtains second mortgage or otherwise
encumbers property
d. Liability of subsequent transferee
i. Assumes the mortgage: both mortgagor and
transferee are liable upon default
ii. Takes subject to the mortgage: only mortgagor is
liable upon default
1. If deed is silent, presume subject to
2. Transfers by lenders: lender can transfer mortgage to another
party and the mortgagor must make payments to that party
n. Foreclosure
i. When lender can take possession
1. Lien theory: not until foreclosure complete
2. Title theory: anytime
3. Intermediate title theory: mortgagor retains title until default,
then lender can take possession
ii. Waste: homeowner cannot commit waste that impairs lender’s security
interest

31
 iii. Equity of redemption: if in default, mortgagor can pay debt in full
before foreclosure sale and redeem property.
1. Generally, courts are skeptical of provisions limiting the right to
redemption
iv. Foreclosure methods:
1. Judicial sale under supervision of court
2. Power of sale held by lender
v. Proceeds of sale used to pay off debt, other proceeds used to pay off
other creditors
1. Deficiency: mortgagor may be liable for deficiency judgment if
foreclosure insufficient to repay debt
vi. Priorities of interest: first in time rule*
1. Senior interests: acquired before interest that is being foreclosed
survive foreclosure
2. Junior interests: acquired after the interest being foreclosure are
extinguished
a. Must receive notice of foreclosure to be extinguished
3. First in time rule: surviving debts satisfied chronologically
vii. *Exceptions to first in time rule:
1. Purchase-money mortgage given in exchange for loan to buy real
property has priority over senior interests
2. Recording acts: junior interests that satisfy recording acts may
take priority over unrecorded senior interests
3. Agreements to subordinate mortgages: senior mortgage agrees
to subordinate its interest to a junior interest
4. Mortgage modifications: subordinated only as to the modification
5. After-acquired property: rights to property acquired in the future
—must be stated clearly in mortgage
viii. Effects of foreclosure
1. Eliminates mortgagor’s interest
2. Purchaser at foreclosure sale takes free and clear of any junior
mortgage and subject to senior mortgage, but may be subject to
right of redemption if state law allows
3. When mortgaged property is transferred to a donee, donee may
assert the same defenses as donor-mortgagor
a. A purchaser who assumes an existing mortgage obligation
as part of the purchase price may not assert mortgagor’s
defenses
o. Easements
i. Right of dominant estate to make use of servient estate
1. Affirmative easement: right to do something
2. Negative easement: right to prevent something
3. Easement appurtenant: tied to use of land
4. Easement in gross: benefits holder personally
ii. Creating an easement:
1. Express easements:
a. Subject to statute of frauds, must be in writing, scope
determined by terms of easement at creation

32
 b. Changes in use of easement are tested under a
reasonableness and reasonably foreseeable standard
c. Trespass when use exceeds scope
d. Creation:
i. Either granted (grant) by one estate to another or
reserved (reservation) by conveyance with reserved
easement right for grantor’s use and benefit
e. Subject to recording statutes
f. Negative easements must be express
2. Implied easements:
a. Informal,
b. Transferrable,
c. Not subject to SoF,
d. Not subject to recording statutes unless subsequent
purchaser had notice
e. Determined by nature/scope of prior use or necessity
f. Types:
i. Easement by necessity
1. Property useless without easement
2. Common ownership severed, resulting in one
property being useless without easement on
the other
3. Strict necessity, ends when no longer
necessary
ii. Easement by implication
1. Created by existing use on property
2. Common ownership severed, but before
severance, owner used the servient estate as if
there was an easement (quasi-easement)
3. Use must be continuous and apparent at
the time of severance
4. Use must be reasonably necessary to
dominant estate’s use and enjoyment
iii. Easement by prescription (adverse possession)
1. About use instead of ownership
2. Same elements as adverse possession except
for exclusivity
iv. Easement by estoppel
1. Starts with permissive use (license)
2. Continues when user relies on owner’s promise
3. Owner withdraws permission
4. Reliance was detrimental to user
5. Owner estopped from withdrawing permission
iii. Duty to maintain an easement lies with owner
iv. Termination of easement:
1. Releases easement in express writing
2. Merger of properties when owner of easement acquires title to
servient estate

33
 3. Abandonment by affirmative act that shows clear intent to
relinquish the right—but more than just non-use or statements;
non-use + act demonstrating intent to abandon is usually
sufficient
4. Prescription ends by failure to protect against servient estate
owner’s continuous, actual, open, and hostile interference for
statutory period
5. Sale to purchaser
6. Estoppel when servient estate owner changes position to his
detriment in reliance on statements or conduct of the easement
holder that the easement is abandoned
7. End of necessity
v. Not easements:
1. Profits: right to enter land to remove specific natural resource
a. Similar to easement, but cannot be created by necessity
2. License: revocable permission to use another’s land
a. Unlike easements, are revocable and only bind the licensor,
not successors
p. Real covenants
i. Promise about land use that runs with the land
ii. Requirements:
1. Writing
a. Subject to statute of frauds
2. Intent
a. Original parties must intend for covenant to run with the
land
3. Touch and concern
a. Benefit or burden must affect both parties
b. Negative covenant restricts what a person can do with
their land
c. Affirmative covenants (like HOA fees) traditionally did not
touch and concern, but modern trend is to say they do
4. Notice
a. Actual, constructive
b. Inquiry notice for equitable servitude acceptable too
5. Privity (horizontal and vertical)
a. Horizontal: agreement between original parties contains
covenant
b. Vertical: successor in interest takes entire interest (strict
privity) for burden or an interest that is carved out of
original estate (relaxed privity) for benefit
iii. Remedy for breach: damages
q. Equitable servitudes
i. Requires:
1. Writing
2. Intent to run with land
3. Touch and concern the land
4. Notice (actual, record, or inquiry)
5. Privity not required
34
 ii. Remedy: injunctive relief
iii. Implied reciprocal servitude: often in planned communities
1. Intent to run with land
2. Promises reciprocal (benefits and burdens each and every parcel
equally)
3. Negative (restricts owner’s use)
4. Successor must have notice (actual, record, or inquiry)
5. Common plan or scheme
iv. Termination: same as easement (merger, release, etc.)
v. Changed circumstances: no more benefit from restriction—maybe can
escape ES
vi. Equitable defenses
vii. Common interest communities
1. Real estate developments with HOAs that provide services and
enforce covenants
a. Owners’ associations
b. Condominiums
c. Cooperatives
2. Governance
a. Governing documents
b. Powers of the board
i. Assessments/fees
ii. Manage and maintain property and common areas
iii. Enforce rules
iv. Create new rules
1. Must be reasonably related to legitimate
purpose of the association (rational basis,
essentially)
c. Duties of association:
i. Deal fairly with community members
ii. Good faith
iii. Prudence
iv. Ordinary care
v. Business judgment rule (honest but mistaken
business decisions shield board)
r. Fixtures, improvements, etc.
i. Fixtures
1. Tangible personal property attached to real property in manner
treated as part of real property
ii. Improvements
1. Fee simple owners can make improvements subject to
governmental land use laws
2. Life estate holders and tenants are limited by doctrine of waste
iii. Removal
1. Buyer of real property is entitled to chattel unless seller reserves
right to chattel in K
2. Life tenants and tenants can remove unless permanent damge
would result
iv. Trespassers:
35
 1. Can remove improvements as long as they acted in good faith
s. Land use
i. Zoning for protection and safety of community
1. Segregating incompatible uses
a. Cumulative zoning: residential allowed everywhere,
commercial some places, industrial in the fewest areas
b. Mutually exclusive zoning: only one type of use per zone
ii. Existing nonconforming use: goal is to grandfather in
1. Generally expanding nonconforming use not allowed, nor is
switching to another nonconforming use
2. Transferring to a new owner generally okay
iii. Variances
1. Use variance: request to use property in manner not permitted
by zoning
2. Area variance: restrictions concerning property development
3. Standard:
a. Compliance would create unnecessary hardship
b. Hardship arises from circumstances unique to the property
c. Owner did not create the hardship
d. Variance is in keeping with overall purpose of the ordinance
e. Variance will not cause substantial harm to general welfare
t. Nuisance
i. Substantial and unreasonable interference with another individual’s
use or enjoyment of property
1. Substantial: annoying to average person in community
2. Unreasonable: injury outweighs usefulness of defendant’s actions
ii. Public nuisance: unreasonable interference with health, safety, or
property rights in the community
1. Private party must show different kind of harm than rest of the
community
iii. Remedy: damages; if damages inadequate or unavailable, injunctive
relief
u. Water rights
i. Riparian rights: landowners bordering waterway own rights to water
way
1. Owners share right to reasonable use of the water
ii. Prior appropriation: first in time, first in right
1. First person to use water has rights to it, even if their land is
located elsewhere
2. Beneficial use: any productive use of water is beneficial
v. Support rights
i. Lateral support: neighboring owner cannot excavate so as to cause
subsidence (cave-in) on an adjacent owner’s land
1. If neighbor’s buildings contributed, standard is negligence
2. If neighbor’s buildings did not contribute, strict liability
ii. Subadjacent support: mineral rights
1. Surface landowners have right not to have land subside from
activities of owners of underground rights
IV. Torts
36
 a. Intentional torts: Act, intent, and causation
i. Intent
1. Acts with purpose of causing consequence
2. Consequence substantially certain to follow
3. Children and mentally incompetent people can be held liable if
they have requisite intent
4. Transferred intent when person intends to commit one tort
and ends up committing another tort, person intends to tort one
person and torts another, or both another tort against another
person
b. Battery: harmful or offensive contact with the person of another, acting with
intent to cause that contact or apprehension thereof, contact results
i. Intent must be the contact, not the offense
ii. Transferred intent applies
iii. Damages: nominal damages and damages from physical harm flowing
from battery
1. Many states allow punitive damages for outrageous or malicious
intent
iv. Eggshell plaintiff rule: defendant is liable for all harm that flows from a
battery, even if the harm is much worse than expected
v. Consent defense—no battery if there is consent to the contact
c. Assault: act that causes reasonable apprehension of imminent harmful or
offensive bodily contact, with the intent to cause apprehension of such
contact or to cause contact itself
i. Plaintiff’s apprehension must be reasonable
ii. Plaintiff must be aware of defendant’s actions
iii. Imminent: threats of future harm do not count
iv. Mere words generally insufficient, usually must be another act
v. Damages: nominal damages and damages from physical harm flowing
from battery, sometimes punitive damages available
d. Intentional infliction of emotional distress (IIED): reckless engagement
in extreme and outrageous conduct that causes plaintiff severe emotional
distress
i. Intent: to cause emotional distress or to act with recklessness of the
risk thereof
ii. Extreme and outrageous: exceeds possible limits of human decency so
as to be entirely intolerable in civilized society
iii. Defendant’s authority and influence, and plaintiff’s heightened
sensitivity weigh in favor of court finding conduct to be extreme and
outrageous
iv. Public figures: can only recover for IIED if they can show that words
contain false statement of fact made with actual malice
1. Actual malice: made with knowledge or reckless disregard of
falsity
2. But for matters of public concern, may not be able to recover at
all. Snyder
v. Conduct toward third parties may result in transferred intent liability,
but only if:

37
 1. Immediate family member who is present perceives IIED conduct
or a different intentional tort, like battery or assault
2. Bystander present at time of conduct perceives conduct that
results in physical manifestation of distress bodily injury
vi. Causation: must be a cause in fact
vii. Damages: plaintiff must prove severe emotional distress beyond what
reasonable person should endure—can be proved by outrageousness
of defendant’s conduct
1. Plaintiff’s hypersensitivity resulting in unreasonable distress may
still be grounds for IIED if defendant knew of Plaintiff’s
hypersensitivity
e. False imprisonment: intent to confine or restrain another within fixed
boundaries, actions directly or indirectly result in confinement, plaintiff is
conscious of confinement or harmed by it
i. Physical barriers, force, threats, invalid invocation of legal authority,
duress, refusing to provide a safe means of escape, and refusing to
perform duty to help person escape are all confinement methods
1. Duration of confinement immaterial
ii. Intent: must act with purpose of confining plaintiff or knowing that
plaintiff’s confinement is substantially certain to result
iii. Transferred intent applies
iv. Shopkeeper’s privilege: shopkeeper can detain a suspected
shoplifter for reasonable time and reasonable manner
v. Damages: nominal damages and actual damages
f. Defenses to intentional torts involving personal injury
i. Consent
1. Express consent: defendant’s conduct may not exceed scope of
consent
a. Consent by mistake is valid unless defendant knew or took
advantage of mistake
b. Consent by fraud is invalid if it goes to an essential matter
2. Implied consent: valid defense in emergencies, athletic contests,
mutual consent to combat, etc.
3. Lack of capacity can undermine validity of consent
ii. Self-defense
1. Use of reasonable and proportionate force to defend against
offensive or harmful contact
2. Duty to retreat—majority of courts say no need if you use
reasonable and proportionate force
3. Initial aggressor: cannot claim self-defense unless other party
has responded to nondeadly force with deadly force
4. No liability for injuries to bystanders resulting from self-defense
as long as injury was accidental and actor is not negligent toward
bystander
iii. Defense of others: acceptable when others would be entitled to use
self defense
iv. Defense of property: reasonable force OK, deadly force is not
(especially not spring guns or other deadly mechanical devices)

38
 1. Recapture of chattels (personal property): must first request
return unless that would be futile. For property that was taken
lawfully, may only use legal process to reobtain.
v. Regaining possession of land: only legal process acceptable
vi. Parental discipline: reasonable force as necessary to discipline children
vii. Privilege of arrest: Felony
1. Private citizen may use reasonably force to make an arrest if:
a. Felony has actually been committed and arresting party
has reasonable grounds to suspect that person being
arrested has committed felony
b. Mistake as to identity is a defense, mistake as to whether
felony committed is not
2. Police can arrest if they reasonably believe felony has been
committed and that person being arrested has committed felony.
No liability for mistakes as to whether felony was committed
viii. Misdemeanor: police may only arrest if it was committed in officer’s
presence; private person may only arrest if there is a breach of the
peace
g. Harms to personal property and land
i. Trespass to chattels: intentional interference with plaintiff’s right to
possess
1. Dispossessing plaintiff, using or intermeddling with chattel, or
damaging chattel
2. Intent: intent to do act is all that is required, no need to intend to
interfere
a. Mistake about legality is not a defense
3. Damages: actual damages, damages resulting from loss of use,
nominal damages, cost of repair.
a. Intermeddling: only actual damages
ii. Conversion: intentionally committing an act that deprives plaintiff of
possession of chattel or interfering with chattel so seriously as to
deprive plaintiff entirely of use of chattel
1. Intent to act, mistake of law or fact is not a defense
2. Damages: chattel’s full value at the time of the conversion
iii. Trespass to chattels vs. conversion:
1. Duration and extent of interference
2. Defendant’s intent to assert right inconsistent with rightful
possessor
3. Defendant’s good faith
4. Expense or inconvenience to plaintiff
5. Extent of harm
iv. Trespass to land: physical invasion of someone’s land
1. Intent: to enter land or cause physical invasion—no need to
intend to trespass
2. Includes objects
3. Anyone in possession of land can bring an action for trespass
4. Damages: no proof of actual damages required
5. Necessity defense: entering into property to prevent injury or
other severe harm
39
 a. Private necessity: must pay for actual damages, not liable
for nominal damages, landowner may not use force to
exclude
b. Public necessity: no liability when property destroyed or
intruded upon to protect a large number of people from
public calamity
v. Nuisance: activity that substantially and unreasonably interferes with
another’s use and enjoyment of land
1. Interference: annoying to an ordinary, reasonable person
(subjective experience—like hypersensitivity or lack of
annoyance—is generally irrelevant)
2. Balance with utility of nuisance
3. Blocking of sunlight or obstruction of views is not a nuisance
unless it is done with the spiteful purpose of blocking a
neighbor’s view
4. Defenses: compliance with state or local regulations, coming to
the nuisance
vi. Public nuisance: unreasonable interference with common public right
1. Public official can bring action on behalf of public
2. Private person can recover if they have been harmed in special
or unique way
h. Negligence: duty, breach, causation, damages
i. Duty: foreseeability of defendant’s harm to other persons (majority—
foreseeability of plaintiff’s harm)
1. No duty to act affirmatively
a. Unless person assumes duty, places another person in
danger, has duty stemming from authority, or there is
another special relationship
i. Duty of utmost care to aid or assist persons and
prevent foreseeable injury
2. Rescuers are foreseeable victims
3. Victims of crime are foreseeable if crime is foreseeable result of
breach of duty
4. Standard of care: reasonably prudent person under the
circumstances
a. Mental and emotional ability and knowledge of defendant
presumed to be average
b. Compare defendant with reasonable person with like
physical characteristics (blind)
c. Intoxication: same standard as sober persons unless
intoxication was involuntary
d. Children: modified standard for reasonable child of similar
age, intelligence, and experience, unless engaged in high-
risk adult activities, like driving (then use adult standard of
care)
e. Common carriers and innkeepers: Majority: utmost care for
common carriers, innkeepers are ordinary negligence
standard

40
 f. Auto drivers: general duty of reasonable care; some JDX
limit driver’s liability to guests to gross negligence, willful
or wanton conduct
g. Bailors and bailees (like valets, etc.):
i. Bailor must warn gratuitous bailee of known
dangerous conditions
ii. If bailee receives a benefit, he has a higher duty of
care
h. Emergency: reasonable person under same circumstance
5. Standards of care for possessors of land
a. Traditional tripartite (1/2 JDX): different standards for
trespassers, licensees, and invitees
i. Duty to trespassers: refrain from willful, wanton,
intentional, or reckless misconduct
1. Use of a spring gun or trap = liability
2. No liability to undiscovered trespassers, must
warn or protect discovered or anticipated
trespassers from hidden dangers
3. Attractive nuisance: artificial condition in place
owner knows or has reason to know that
children are likely to trespass
a. Unreasonable risk of death or serious
bodily harm
b. Children, due to age, do not discover or
cannot appreciate danger
c. Utility of maintaining condition is slight
compared to risk of injury
d. Landowner fails to exercise reasonable
care
ii. Licensees: people who enter the land with express or
implied permission
1. Duty to make property reasonably safe or warn
licensees of concealed dangers
2. No duty to inspect for dangers
3. Reasonable care
iii. Invitees: people who come onto land for economic
purpose
1. Duty of reasonable care; to inspect property,
discover unreasonably dangerous conditions,
take reasonable steps to protect invitee from
them
a. Nondelegable duty: cannot avoid duty by
assigning to independent contractor
b. Modern (California) way (1/2 JDX): reasonable standard of
care under the relevant circumstances
i. Except flagrant trespassers: only duty owed is to not
act intentionally, willfully, or wantonly to cause
physical harm
c. Landlord-tenant
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 i. Landlord must maintain safe common areas, warn of
hidden dangers, and repair hazardous conditions
ii. Tenant still liable for injuries arising from conditions
within his control
d. Off-premises victims: landlord not liable for natural
conditions, except for trees in urban areas, unreasonable
risks from artificial conditions, and reasonable care in
activities on the land
ii. Breach: violation of the duty of reasonable care
1. Approaches:
a. Traditional approach is the reasonable person standard
under the circumstances
b. Cost-benefit analysis (burden of reasonable care vs.
probability of harm * severity of loss)
2. Specific rules
a. Custom: generally admissible to prove majority practice
within industry
i. Professionals: lawyers, doctors, accountants,
electricians
1. Custom is admissible and dispositive of breach
ii. Physicians: same or similar locality, trend toward
national standard
1. Informed consent: explain risks of procedures,
get consent
a. No need to explain risk if commonly
known, patient unconscious, patient
waives information, patient incompetent,
or patient would be harmed by disclosure
b. Negligence per se: Violation of law or statute prescribing
standard of care is a breach; unexcused violation is
negligence per se
i. Law imposes duty for the protection or benefit of
others
ii. Defendant violates the statute (majority: conclusive
presumption, minority: rebuttable that violation
constitutes NPS)
iii. Plaintiff in class of people intended to be protected
iv. Accident results in type of harm that statute was
intended to protect against
v. Harm caused by violation of statute
vi. *Compliance with statute does not necessarily
constitute reasonable care
vii. Defenses: compliance would be more dangerous,
compliance impossible, incapacity, reasonable care
in trying to comply, vagueness
c. Res ipsa loquitur
i. Circumstantial evidence of negligence is sufficient
evidence of negligence when:

42
 1. Type of accident does not ordinarily occur
without negligence
2. Caused by agent or instrumentality within
exclusive control of defendant
3. Not due to any action on the part of the
plaintiff
ii. Modern trends:
1. Medical malpractice: all medical personnel can
be held liable unless they exonerate
themselves
2. Products liability: ignore exclusivity
iii. Third restatement: ordinarily happens as a result of
negligence of a class of actors, of which the
defendant is a member of the class
iv. Procedural effect: allows jury to hear case without
plaintiff proving negligence by direct evidence
iii. Causation: cause in fact and proximate cause
1. Cause in fact: injury would not have happened but for
defendant’s negligence
a. Issues arise with multiple or indeterminate causes: multiple
tortious actors or multiple possible causes, loss of chance
b. Solutions:
i. Substantial factor test:
1. Was defendant’s tortious conduct a substantial
factor?
2. “multiple sufficient causes” doctrine
ii. Alternative causation—plaintiff’s harm was caused by
only one of a few defendants :
1. Shift burden of proof to defendants, will impose
joint several liability unless one can show he
did not cause harm
iii. Concert of action: hold all defendants working in
concert liable
iv. Loss of chance of recovery in medical misdiagnosis
1. Plaintiff can recover portion of damages that
represents their lost chance of survival
2. Proximate cause: person is liable for the risks that made her
conduct negligent.
a. Harm must be foreseeable (majority)
i. Injury is within the scope of what made conduct
negligent in the first place
b. Traditional approach: intervening causes do not break
chain of causation. Superseding causes (unforeseeable) do.
i. Third-party criminal acts may or may not break chain
of causation
c. Extent of damages: liability for full extent of damages,
even if extent is unusual or unforeseeable
i. Type of damages must be foreseeable, extent does
not have to be
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 iv. Damages
1. No nominal damages; must prove actual physical harm
2. Compensatory damages to make plaintiff whole again—usually
for physical injury, sometimes for emotional damages too
3. Mitigation as a limit to recovery
4. Personal injury—medical expenses, lost income and reduced
earning capacity, past and future pain and suffering
5. Property damage: difference in market value before and after
injury
a. Or cost of repair or replacement value
6. Collateral-source rule: benefits or payments to plaintiff from
outside sources are not credited against liability of tortfeasor
a. But most states have passed laws that modify this rule to
avoid double recovery
7. Punitive damages: if defendant acted willfully, wantonly,
recklessly, or with malice
a. Or if tort is inherently malicious
b. Must be within a single digit ratio (max 9:1) of
compensatory damages
v. Special negligence liability
1. Negligent infliction of emotional distress:
a. Plaintiff was within zone of danger of threatened physical
impact, and that threat caused emotional distress
b. Bystander recovery if:
i. Bystander closely related to person injured by
defendant
ii. Was present at the scene
iii. Personally observed the injury
c. Special relationship: negligent mishandling of a corpse,
negligent medical information (e.g., a misdiagnosis)
d. Physical manifestation of distress required in most JDX
2. Pure economic loss: no recovery in negligence without personal
injury or property damage
3. Wrongful death:
a. Spouse or representative can bring action to recover losses
suffered by that person as a result of the decedent’s death.
b. Can include economic support and loss of consortium
4. Survival action:
a. Brought on behalf of decedent for decedent’s claims at
time of death for personal injury and property damages
5. Wrongful life and wrongful birth
a. Wrongful life: child brings claim for defendant’s failure to
diagnose congenital defect or perform contraceptive
procedure
b. Wrongful birth: parents bring claim for defendant’s failure
to provide contraceptive procedure or diagnose congenital
defect

44
 i. Recovery for medical expenses, pain and suffering,
and additional medical expenses and emotional
distress if child has disability
vi. Vicarious liability for negligence
1. Joint and several liability
2. Respondeat superior: employer held liable for employee’s
actions within scope of employment
a. Does not apply to intentional torts of employees unless
that is within scope of employment (i.e., a bar bouncer’s
battery intended to serve employer)
b. Frolic: major deviation from employment—employer not
liable
c. Detour: minor deviation—employer vicariously liable
3. Independent contractors: employer is generally not liable
a. Determination based on degree of control employer has
b. Exception for non-delegable duties:
i. Inherently dangerous activities
ii. Duties to the public or specific plaintiffs for certain
types of work, like construction by a roadway
iii. Shopkeepers have duty to keep premises safe for the
public
c. When IC is treated like an employee (apparent agency)
i. Manifestations of ER lead injured person to accept
IC’s services based on belief that IC was employee,
and IC causes harm
4. Business partners: can be liable for torts of other partners within
scope of business purpose
5. Automobile owner liability when:
a. Negligent entrustment to someone not in a position to take
reasonable care
b. Family members driving the car with permission
c. Anyone driving the car with permission
6. Parents: generally not liable for children’s torts, unless personally
negligent in supervision or monitoring child’s conduct
7. Dram shop liability: bar owners, social hosts, bartenders liable for
people drinking too much and injuring third parties IN ADDITION
to drunk driver
vii. Immunity
1. Federal and state governments traditionally liable, but immunity
waived by statutes
a. Federal Tort Claims Act
i. Waives immunity for certain torts
ii. Maintains immunity for certain torts, discretionary
functions, and traditional government duties
b. State governments and municipalities
i. Governmental functions: immunity applies
ii. Proprietary functions: immunity waived
c. Government officials: discretionary functions—immunity;
ministerial functions—no immunity
45
 i. Westfall Act precludes personal liability on the part of
federal employee under state tort law
2. Intra-family immunity: family member can be sued for
negligence
3. Charitable immunity: eliminated in most states
i. Defenses to negligence
i. Contributory negligence: any negligence by plaintiff negates
defendant’s negligence
1. BUT last clear chance doctrine allows plaintiff to recover if
contributorily negligent but defendant had last clear chance to
avoid injuring the plaintiff
ii. Comparative fault: plaintiff’s negligence limits ability to recover
1. Pure comparative negligence: reduce recovery by percentage of
fault
2. Modified comparative negligence: bars recovery when plaintiff is
more negligent
a. More than one defendant: compare plaintiff with combined
defendants
3. NOT a defense to intentional torts!!!
4. BUT plaintiff’s comparative fault will reduce plaintiff’s recovery
even if defendant was willful, wanton, or reckless
iii. Imputed contributory negligence
1. Contributory negligence imputed to another party—generally
disfavored
iv. Assumption of risk (like consent)
1. Express: typically in writing, clear and enforceable waiver
a. May be unenforceable if disparity of bargaining power, if
risk is due to reckless or wanton conduct, party seeking to
enforce provision offers important public services (like
medical services), subject to contract defenses, or is
against public policy
2. Implied:
a. Athletic events
b. Known, specific risk
c. May be a total bar to recovery or reduce recovery
j. Strict liability
i. Abnormally dangerous activities: liability for harm that flows from risk
that made activity abnormally dangerous
1. Foreseeable and significant risk of harm
2. Severity of harm
3. Appropriateness of location
ii. Animals: wild animals not customarily kept in the service of
humankind, or animals with dangerous propensities
1. Strict liability for licensees or invitees, no strict liability for
trespassers except in some JDX for vicious watchdogs
2. Domestic animals with dangerous propensities: strict liability
3. Foreseeable damage for animal trespassing
a. Except household pets where owner does not know animal
is trespassing in a harmful way and
46
 b. Animals on public roads (negligence standard)
4. Assumption of risk bars recovery
iii. Defective products:
1. Negligence
2. Strict liability for defective products
a. Types of strict product liability:
i. Manufacturing defects
1. Deviation from intended design
ii. Design defects
1. Design is less safe than ordinary user would
expect
2. Risk-utility test: does risk outweigh benefits? If
yes, is there a reasonable alternative design?
iii. Failure to warn
1. Of foreseeable risk that is not obvious to
ordinary user
2. Learned intermediary rule: manufactures must
warn prescribing physician unless drugs
marketed DTC
b. Elements:
i. Product defective
1. Proof of defect may be offered by
circumstantial evidence when defect causes
product to be destroyed
ii. Defect existed when it left defendant’s control
1. No privity requirement—anyone foreseeably
injured can sue
2. Defendants include anyone who sells the
product when it is defective who is in the chain
of distribution and the business of selling
iii. Defect caused injury when product used in
foreseeable way
c. Damages: personal injury or property damages
d. Defenses:
i. Comparative fault
ii. Contributory negligence
iii. Assumption of risk
iv. Product misuse, modification, or alteration
v. Substantial change in the product
vi. Compliance with governmental standards (not
conclusive)
vii. State of the art defense (some JDX)
viii. Disclaimers, limitations, and waivers generally not
bars to liability
e. Warranties:
i. Merchantability: suitable for ordinary purposes for
which it is sold

47
 ii. Fitness for a particular purpose—buyer relies on
seller’s skill or judgment when seller knows purpose
for which product is being sold
iii. Express warranties
3. Breach of warranty
k. Defamation
i. Definition
1. Defamatory statement
a. Diminishes respect, esteem, or goodwill; or deters others
from associating
b. Falsity about a fact (not an opinion)
2. Of or concerning plaintiff
a. Explain why it is of or concerning that particular plaintiff
3. Published to a third party who understood its defamatory nature
a. Communication to a third party
i. Repetition of defamatory statement sufficient too
ii. Internet service providers and platforms are not
publishers
4. Damages to plaintiff’s reputation result
ii. Types of plaintiffs:
1. Public officials and public figures
a. Actual malice: must prove that plaintiff knew statement
was false or acted with reckless disregard for the truth
2. Private individual:
a. Must prove negligence with respect to falsehood if
statement is a matter of public concern
i. Not a matter of public concern? Plaintiff may not
need to prove negligence
iii. Libel: a written, printed, or recorded statement
1. Damages: general damages without proof or measurable harm
iv. Slander: a spoken statement
1. Damages: must prove special damages (economic loss) unless it
is slander per se:
a. Commission of a serious crime
b. Unfitness for trade or profession
c. Loathsome disease
d. Severe sexual misconduct
v. Constitutional limitations on damages:
1. Private individual, matter of public concern: only actual damages
unless plaintiff can show there was actual malice
2. Private individual, not of public concern: general damages,
presumed damages without proving actual malice
vi. Defenses to defamation:
1. Truth (absolute defense)
2. Consent
3. Privileges:
a. Absolute privileges
i. In judicial proceedings
ii. In legislative proceedings
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 iii. Between spouses
iv. In required publications by radio and TV
b. Conditional privileges when statements made in good faith
pursuant to a duty or responsibility, such as:
i. Defending reputation, protecting recipient of
information, or affecting important public interest
l. Invasion of privacy:
i. Intrusion upon seclusion (objectionable to reasonable person)
ii. False light: defendant makes public facts about the plaintiff that place
the plaintiff in a false light that would be highly offensive to a
reasonable person
iii. Appropriation of right to publicity: appropriation of name or likeness for
defendant’s advantage without consent causes injury
iv. Public disclosure of private facts: publicizing matter concerning private
life of another and
1. Matter is highly offensive to reasonable person and is not of
legitimate concern to the public
v. Damages: emotional or mental distress sufficient
vi. Defenses:
1. qualified and absolute privilege—for false light and public
disclosure claims
2. consent—applicable to invasion of privacy torts
m. Misrepresentation and business torts
i. False representation
1. About a material fact
2. Deceptive or misleading statements, concealing material facts
3. No duty to disclose unless:
a. Fiduciary relationship
b. Other party likely to be misled by defendant’s prior
statements
c. Defendant aware of other party’s mistake and custom
suggests that defendant should disclose
4. Scienter: defendant knows representation is false or acted with
reckless disregard for falsehood
5. Intent to induce plaintiff to act in reliance on misrepresentation
6. Damages: actual, economic, pecuniary loss—not nominal
damages
a. Generally, difference between value received and value
that would have been received had representation been
true
ii. Negligent misrepresentation
1. Defendant negligently provided false information;
2. During course of business or profession
3. Causing justifiable reliance
4. Plaintiff is in contractual relationship with defendant or plaintiff is
third party known by defendant to be member of limited group
5. Defenses: negligence defenses
6. Damages: reliance and consequential damages

49
 iii. Intentional interference with a contract: contract, defendant knows,
intentionally interferes, causing damages to plaintiff
1. Contract must be valid, not terminable at will
2. Inducing breach, prevents party from fulfilling obligations,
substantially burdening performance
iv. Interference with a prospective economic advantage (absent a
contract)
v. Misappropriation of trade secrets: acquiring trade secret from plaintiff-
owner by improper means when plaintiff has taken rxbl precautions to
protect it
vi. Injurious falsehoods
1. Trade libel
2. Slander of title
vii. Malicious prosecution for improper purpose without probable cause
viii. Abuse of process with ulterior motive
V. Secured Transactions
a. Governed by Art. 9 of the UCC
b. Personal property serves as collateral on loan
c. Roadmap
i. Attachment
ii. Perfection
iii. Priority
iv. Enforcement
d. Relationships
i. Attachmentenforcement rights
ii. Attachment + perfection = priority
e. Priority questions
i. Is there a secured transaction?
ii. What is the property at issue?
iii. Which parties have an interest in the collateral?
1. Have the interests attached? To what collateral? When?
2. Has the secured party perfected its interest? When? How?
iv. Find appropriate priority rule
v. Apply appropriate priority rule
f. Terms:
i. Security interest: interest in property or fixtures that secure payment
or performance of obligation
ii. Security agreement: the contract that creates the interest
iii. Secured party: creditor with security interest
iv. Obligor: party that must pay or perform the obligation the collateral
secures
v. Debtor: party with a non-security interest in the collateral
g. What is covered by Article 9?
i. Consensual secured transactions involving personal property or
fixtures (not real estate)
1. Regardless of form—look at the substance of the transaction, not
labels (see leases)

50
 ii. Agricultural liens: interest in farm products that secures payment or
performance of an obligation for goods, services, or rent on real
property involved with the farming operation
iii. Sales of rights to payment (buyer treated as a secured party, generally
must perfect to have priority)
1. Chattel paper
2. Promissory notes
3. Accounts
4. Payments intangibles
h. Collateral: property subject to a security interest; look to debtor’s principal
use to classify collateral
i. Goods: anything moveable at time the interest attaches—can change
classification as use changes
1. Plus some goods that are not technically moveable:
a. Fixtures, standing timber, unborn animals, growing or
unharvested crops, manufactured homes
2. Consumer goods: acquired primarily for personal, family, or
household purposes
3. Farm products: crops, livestock, supplies (feed, fertilizer),
produce (eggs, vegetables)
4. Inventory: items held for sale or lease, goods furnished under
service contract, materials, works in progress, materials used or
consumed in business
5. Equipment: other goods that do not fit another definition—
machinery, delivery vans, office equipment, farm equipment
ii. Fixtures: goods that are somewhat permanently attached to a home
that a person will not take when they move away, generally
iii. Rights to payment: A debtor’s right to be paid by a third party that
the debtor uses as collateral on a secured transaction
1. Instrument: promissory notes, checks, and drafts governed by
Article 3.
2. Chattel paper: paper or electronic record with a monetary
obligation and a security interest or lease (i.e., a secured
transaction being used as collateral for another loan)
3. Accounts: right to payment for property sold, leased, or licensed,
or for services rendered (accounts receivable) but NOT right to
be repaid for a loan
4. Payment intangible: all other rights to payments
5. Third party (account debtor) owes money to the debtor and
debtor uses that right to payment as collateral
iv. Other collateral
1. Documents: generally giving the holder ownership rights in
goods held by a bailee
2. Investment property: securities, like stocks and bonds
3. Deposit accounts: bank accounts
4. Commercial tort claims: but not for personal injury or death
5. Letter of credit rights: right to payment or performance under
letter of credit

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 6. General intangibles: anything else (blueprints, copyrights,
trademarks, software)
i. Attachment: arrangement linking debt to collateral; upon attachment,
security interest is enforceable (focus: relationship between debtor and
creditor)
i. When does attachment occur?
1. Value given by secured party
a. Can be the same consideration as used in a contract; no
new value needed
b. Can secure future advances too
2. Debtor has property rights in the collateral
3. Security agreement meeting one of the following requirements
a. Authenticated security agreement describing collateral ; OR
i. Authenticated by debtor
ii. Must reasonably identify the collateral
1. Super generic descriptions not sufficient for
security agreement, but are sufficient in
financing statement
b. Secured party has possession or control of the collateral
pursuant to oral or unauthenticated security agreement
i. Possession for goods you can hold in your hands
ii. Possession by control of rights to payment, other
collateral that cannot be held in one’s hands
ii. Rights and duties of secured party
1. Reasonable care with respect to collateral
2. Keep collateral unidentifiable
3. Relinquish collateral once obligation satisfied
4. May charge debtor reasonable expenses for storage and
maintenance of collateral
iii. Advanced issues
1. After-acquired property: must have specific clause for after-
acquired property
a. Majority: security agreements for inventory or accounts
presumed to include after-acquired inventory or accounts
2. Accessions
a. Goods physically united with other goods so that identity of
original goods is not lost (like a stereo in a car)
b. Security interest continues in accession
3. Commingled goods
a. Identity of original goods lost in product or mass (like flour
in cookies)
b. Security interest attaches to larger product/mass
4. Proceeds
a. Results from sale, lease, licensing, exchange, or other
disposal of collateral
b. Security interest attaches automatically
5. Purchase money security interest
a. Only for goods and software

52
 b. PMSI is a loan used to buy the goods that serve as the
collateral
c. Consignments is a PMSI in inventory
d. Partial PMSIs allowed for non-consumer goods*
i. Initial PMSI + additional loan for which goods are
collateral
ii. *Courts may apply this to consumer goods, but may
also determine there is no PMSI
j. Perfection: notice to other parties of security interest; timing is key
i. Attachment first, then perfection
ii. Perfection focuses on the relationship between the creditor and others
(notice, priority)
iii. Methods of perfection
1. Filing
a. File a financing statement in the central filing office of
state where debtor is located
i. (1) Name of debtor, (2) name of secured party, (3)
description of the collateral
1. For real property, include that it covers real
property, file in local real property records,
describe property, name the record owner (if it
is not the debtor)
2. Filing office may reject financing statement
without parties’ addresses and status as
individual or organization
3. (1) debtor’s name: must be correct legal name,
not trade name. Majority—use name on state-
issued ID
4. (2) description of collateral: can be generic,
does not need to mention after-acquired
property
5. Errors do not affect perfection unless they
make the financing statement seriously
misleading (like errors in the debtor’s name if
they are not discoverable with the error)
a. Seriously misleading: not perfected
6. Filing office problems: if unjustified, financing
statement treated as having been filed/interest
perfected
a. except against subsequent parties who
gave value in reasonable reliance on
absence from records
b. Not applicable to deposit accounts, money, letters of
credit, and collateral subject to other perfection methods
(like car titles)
c. Duration: five years unless continuation statement filed
within six months of lapse
i. Upon lapse, secured party loses perfection unless
secured by other means
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 d. Termination: obligation is paid back, termination statement
voids financing statement
2. Possession
a. Security interest in tangible goods can be perfected by
possession
b. Tangible goods: money*, goods, instruments, negotiable
documents, tangible chattel paper. *only way to perfect
interest in money is possession
3. Control
a. Applies to deposit accounts*, investment property,
electronic documents, electronic chattel paper, letter of
credit rights*
b. *control is the only way to perfect interest in deposit
accounts and letter of credit rights
i. Deposit accounts: bank is the secured party and
lender; bank and debtor agree in authenticated
record that secured party controls; or secured party
becomes the bank’s customer re: the deposit
account
4. Alternate perfection systems under state law
a. Must follow rules of applicable statutes
b. Most common: certificate of title statutes for cars,
motorcycles, and other vehicles with title (but does not
apply to vehicles that are inventory)
i. Perfection can usually only be accomplished by
noting security interest on certificate of title
5. Automatic perfection (can be temporary or permanent)
a. PMSI in consumer goods automatically perfects upon
attachment
i. Unless certificate of title statute governs (for a car
bought on credit)
6. Temporary automatic perfection (providing for perfection after
post-filing changes)
a. Name changes that cause the financing statement to be
seriously misleading
i. Secured party has four months to discovery and
amend financing statement
ii. Failure to amend: after-acquired property not secured
after four month period; everything before name
change and within four months of that remains
perfected
b. Debtor moves out of state: four months to amend unless
financing statement lapses earlier.
i. Covers collateral acquired within four-month period
ii. Must refile to remain continuously perfected
c. Collateral moves out of state: no refiling is necessary if
debtor still owns it
i. One year to file if there is a new debtor

54
 d. Perfection by possession: only perfected as long as secured
party has actual physical possession
i. Temporary automatic perfection for 20 days when
secured party gives collateral back to debtor so
debtor can sell it, exchange it, enforce rights in the
collateral
1. Must repossess or file a financing statement
within 20 days to remain continuously
perfected
iv. Proceeds
1. Arise from sale, lease, or license of collateral
a. Automatic attachment to proceeds
b. Security interest perfected for 20 days, priority dates from
time of perfection in original collateral if it has remained
continuously perfected
2. Perfection rules:
a. Temporary automatic perfection for 20 days, unless
financing statement amended or broad enough to
encompass proceeds
b. Perfection continues in cash proceeds indefinitely as long
as they are identifiable
c. Proceeds that may be perfected by filing in the same
office are perfected automatically if financing statement
covers original collateral and proceeds not acquired with
cash proceeds
3. Priority for proceeds
a. Generally, basic priority rules apply
b. Continuous perfection = priority based on perfection in
original collateral
i. Exceptions for PMSI in inventory (discussed below)
and proceeds of non-filing collateral (cash or same
type of collateral, perfected other than by filing—
must perfect security interest in proceeds)
k. Priority
i. Attachment, perfection, PMSI
ii. Unsecured creditors have no secured rights, but contract rights and
liens in the collateral
iii. Security interest v. security interest
1. Perfected v. perfected
a. First to file or perfect takes priority (reward early filers)
b. May file first then attach, resulting in perfection
2. Perfected > unperfected
3. Unperfected v. unperfected
a. First to attach or become effective takes priority
iv. Security interest v. lien creditor
1. Perfected security interest > lien creditor
2. Lien creditor > unperfected security interest
a. Unless filed but unattached exception
v. Security interest v. statutory lien (i.e. a mechanic’s lien)
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 1. Statutory lien > security interest, even perfected, as long as
a. Lien depends on lienholder’s possession of goods
b. Lien secures payment or performance of an obligation for
services or materials furnished in the ordinary course of
the person’s business; and
c. Statute does not provide otherwise
vi. Priority over future advances
1. Secured parties who perfect first have priority with regard to
future advances, even if they have knowledge of other interests
when making future advances
2. Advances made 45 days after lien creditor are subordinate unless
a. Made without knowledge of lien, or
b. Made pursuant to a commitment entered into without
knowledge of the lien
vii. Buyers v. secured parties
1. Generally take subject to the perfected security interest
2. Buyer in the ordinary course of business (BIOCB)
a. Buys goods from a merchant
b. In the ordinary course of the merchant’s business
c. In good faith and without knowledge that the sale violates
the rights of others in the same goods
d. Seller is engaged in the business of selling goods of this
kind and is not a pawn broker
3. Garage sale exception (consumer to consumer)
a. Buyer of consumer goods takes free of security interest,
even if perfected, if
i. Buys goods for value
ii. For personal, family, or household use,
iii. From a consumer seller, and
iv. Without knowledge of the security interest,
v. UNLESS secured party has filed a financing
statement covering the goods before the purchase
occurred
viii. Buyer v. unperfected security interest
1. Generally take subject to security interest
2. Exception if buyer:
a. Gives value
b. Receives delivery of collateral
c. Without knowledge of preexisting interest
3. Future advances after buyer takes subject to the secured interest
a. Buyer will take free of future advance if
i. secured party knew of buyer’s purchase, or
ii. future advance made 45+ days after the purchase
4. Sales of chattel paper and promissory notes are secured
transactions
a. Possession without knowledge of competing interest gives
priority over competing secured parties

56
 5. Transferees of money or funds take free of security interest
unless they act in collusion with debtor to violate rights of a
secured party
6. Security interests < buyers’ and sellers’ Article 2 security
interests with possession
ix. PMSI priority
1. PMSI in consumer goods automatically perfected as long as not
subject to certificate of title law
2. All other PMSIs must file financing statement or take possession
to perfect
3. Perfected PMSI > lien creditor
4. Unperfected PMSI < lien creditor
a. BUT PMSIs have a 20-day period from when debtor takes
possession to perfect
5. PMSI super-priority for goods other than inventory or
livestock
a. PMSI in goods > ALL other security interests if perfected
within 20 days of debtor receiving goods
i. If unperfected within 20 days, first to file or perfect
6. PMSI super-priority for inventory
a. > all other security interests in the inventory if
i. Perfected before delivery to debtor;
ii. Sends an authenticated notification of PMSI to other
secured parties
7. PMSI super-priority in proceeds
8. Seller PMSI > lender PMSI
a. Otherwise, first to file or perfect
x. Fixtures
1. Vs real property interest: First to file or record
a. Or within 20 days for fixtures
2. Fixtures < Construction mortgage
l. Leases are article 9 transactions when:
i. Remaining economic life
ii. Bound to renew for remaining economic life
iii. Option to renew for remaining economic life for nominal or no
additional consideration
iv. Lessee has option to become owner for no or nominal consideration
m. Consignments: owner gives possession to consignee to allow consignee to
sell the goods
i. Consignor is the secured party, must perfect security interest to have a
PMSI in inventory
n. Default: defined by security agreement
o. Enforcement rights triggered by default
i. Right to seek possession
ii. Abandon secured interest and obtain a judgment
iii. Other rights as agreed upon
p. Disposition sale:
i. Can be public or private

57
 ii. Secured party can buy collateral at a public sale but not a private sale
unless price is fixed (like by the New York Stock Exchange) or subject to
widely distributed standard price quotes
iii. Timing must be commercially reasonable under the circumstances
iv. Notice: has to be authenticated
1. sent to a variety of parties
a. Debtor
b. Secondary obligors
c. Other secured parties
d. Anyone else secured party has received notice of claim or
interest
2. Notice must be commercially reasonable, including for timing
(noncommercial transactions at least 10 days)
3. Must include
a. secured party and debtor’s names
b. Description of collateral
c. Manner, time, place of disposal
d. Statement that debtor is entitled to accounting for unpaid
indebtedness
e. For consumer goods:
i. Describe liability for deficiency
ii. Phone number debtor can call for information,
including about redemption
v. Proceeds distribution order
1. Reasonable expenses for collection and enforcement
2. Debt to foreclosing secured party
3. Pay subordinate security interests that make a prior demand
4. Surplus returned to debtor
vi. Senior interests survive the sale
vii. Deficiency judgments available when sale amount not enough
q. Other methods of enforcement
i. Acceptance of collateral as full or partial satisfaction
1. Full satisfaction: consent in authenticated record, or by silence
20 days after proposal is sent
a. Consumer goods: can only accept collateral as full
satisfaction of obligation
i. Must sell goods (not accept) if debtor has paid more
than 60%
1. Unless debtor waives
ii. Redemption: pay entire secured obligation before sale or acceptance of
collateral
iii. Removal of fixtures and accessions
1. Fixtures: liability for cost of repairing damage to real estate, but
not for diminution in value
r. Remedies for secured party’s failure to comply
i. Injunctive relief to halt SP’s improper enforcement
ii. Actual damages
iii. Statutory damages in consumer goods
iv. Preventing SP’s claim of deficiency
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 1. Sale was not commercially reasonable
VI. Partnerships
a. Two or more persons carrying on a for-profit business as co-owners
i. Persons: legal capacity to contract, including corporations, LLCs,
humans
b. Intent: carry on as co-owners for profit
i. Presumption of partnership when two or more people share profits,
except when:
1. Payment of a debt
2. Interest payments
3. Rent
4. Wages
5. Goodwill
ii. Sharing of control = partnership
c. Legal consequences
i. Partnership distinct from partners, can hold property and be sued, sue
ii. Partners are personally liable for partnership’s obligations
iii. No entity-level taxation
iv. No written agreement needed, but any partnership agreement will
govern
v. Cannot contract out of:
1. Liability to third parties
2. Partner access to books and records
3. Fiduciary duties
d. Fiduciary duties
i. Duty of Loyalty
1. Partners cannot
a. compete,
b. advance an interest adverse to the partnership
c. usurp a partnership opportunity
2. Limitations on loyalty:
a. Cannot eliminate duty of loyalty, can limit it as long as it is
not manifestly unreasonable
3. Disclosure of all material facts + ratification by partners = safe
harbor for potential breaches of duty of loyalty
ii. Duty of care
1. Partners cannot engage in
a. grossly negligent or reckless conduct
b. intentional misconduct
c. knowing violation of the law
2. Partnership agreement may not unreasonably reduce duty of
care
iii. Timing
1. Applies only to partners, not prospective partners or former
partners
2. If a partnership terminates and an ex-partner is winding up, they
still have duties
e. Profits and losses
i. Generally determined by the agreement
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 ii. Partners generally do not have a right to demand distribution
1. Partners can agree in advance to allow distributions per
partnership agreement
iii. Transferring partnership interests
1. Default rule: partner has a right to transfer their partnership
interest
iv. New partners: all existing partners must consent
f. Managing/governing relationships
i. Default: every partner has equal rights in management and control of
the partnership
1. Common: reflect partners’ capital contributions rather than an
even share
ii. Ordinary business matters require a vote of the majority of partners
iii. Extraordinary business requires a vote by all partners
iv. Access to records must be provided to partners and their agents
g. Dissociation
i. Voluntary: partner gives notice of desire to withdraw
ii. Involuntary:
1. Event in partnership agreement triggered
2. Partner expelled pursuant to partnership agreement
3. Continuing business with partner becomes unlawful
4. Court orders dissociation
5. Partner goes bankrupt
6. Partner dies
7. Partner becomes incapacitated
8. One of the entities of the partnership dissolves
iii. Some restrictions on withdrawal (notice, liability) OK, but partner has a
right to withdraw
iv. Consequences:
1. Partner no longer has duties
2. Continuing partnership must buy out dissociated partner’s
interest
h. Liabilities:
i. Every partner is an agent
1. Express authority: partnership agreement, statement of
authority, ad hoc meeting authorization
2. Implied authority: reasonable belief that action necessary to
carry out express authority
3. Apparent authority: partner acting in ordinary course of business
dealings, based on interactions between partnership and third
parties
ii. Tort liability for torts committed by partners acting within the scope of
their partnership
iii. Liability
1. Personal liability
2. Each partner has joint and several liability for all partnership
obligations
3. Go after partnership’s funds first, generally
4. Incoming partners not liable for prior obligations of partnership
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 5. Outgoing partner may be liable for obligations after dissociation
i. Terminating a partnership:
i. Dissolution: by partner or by operation of law
1. Partner chooses to dissociate/involuntarily dissociates
2. Partnership term expires or undertaking is complete, partnership
becomes unlawful (90 days), judicial determination
ii. Winding up
1. Who may wind up
a. Any partner not wrongfully dissociated
b. Legal representative of last surviving partner
c. Any partner, legal representative, or transferee may seek
judicial supervision of winding up
2. What it does
a. Disposing and transferring partnership property
b. Discharge partnership liabilities
c. Preserve partnership business to maximize value
3. Statement of dissolution
a. Give notice
b. File within 90 days
c. Limit authority and liability
4. Distributions
a. Creditors first, then partners
j. Limited liability partnerships (LLPs)
i. Eliminate personal liability
1. Vote authorizing transformation
2. Must end with RLLP or LLP
ii. Limited partners still liable for personal misconduct or negligence
iii. Partners or state can cancel LLP status
k. Limited Partnership
i. At least one general partner and one limited partner
1. General partners have personal liability, limited partners do not
2. File certificate
VII. Agency
a. Basics
i. Principal and agent
ii. To extent principal’s economic reach, acquire agent’s expertise, or
make money
iii. Principal can be held liable for acts of agents in contracts and torts
iv. Formation
1. A: Assent—both parties manifest assent to work with on another
2. B: Benefit—agent works for the principal’s benefit
3. C: Control—agent works subject to control of principal
a. No consideration or writing needed!
v. Principals: anyone with legal capacity
1. Corporations
2. Employers
a. EE-independent contractor distinction: control
3. Partnerships

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 4. Not minors or unincorporated associations (like book clubs, friend
groups)
vi. Agent: anyone with minimal capacity
1. Minor can be an agent
2. Agent must
a. Assent to agency relationship
b. Perform tasks on behalf of the principal
c. Be subject to principal’s control
vii. Employees v. independent contractors
1. Distinction: right to control physical conduct of work
viii. Termination: either party can unilaterally terminate
b. Liability of principals to third parties
i. When is a principal bound to contracts agent enters into?
1. When principal authorizes agent or
2. Agent acts with legal authority
ii. Authority
1. Actual express authority: principal to agent
a. Principal communicates express authority by words
b. Intent: Agent believes he is doing what principal wants,
belief must be objectively reasonable
c. Termination by death: Terminates on death of principal
when agent has actual notice of principal’s death or
immediately upon death of agent
2. Actual implied authority
a. Communications between principal and agent
b. Principal tells agent to take whatever steps necessary to
achieve principal’s objectives
c. Absent express instruction to the contrary, agent can act
within accepted business custom or trade usage
3. Apparent authority: principal to third party
a. Third party has reasonable belief that principal consents to
agents acts
4. Ratification
a. Principal has knowledge of material terms of the contract;
and
b. Accepts the contract’s benefits
iii. Principals
1. Disclosed principal
a. Principal + third party
2. Partially disclosed principal
a. Third party, principal + agent
3. Undisclosed principal
a. Third party + agent
c. Liability for torts
i. Vicarious liability: Respondeat superior
1. Control over agent’s conduct such that EE-ER
2. Within scope of employment
ii. Independent contractors

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 1. Principal does not have vicarious liability unless task is inherently
dangerous or principal was negligent in hiring or principal retains
control over tasks and tort was within scope of those tasks
iii. Frolic: significant deviation, no liability
iv. Detour: de minimis deviation, within scope of employment
d. Intentional torts: generally outside scope of employment unless
i. Within general space and time limits of employment,
ii. Intended to benefit principal,
iii. Act of kind agent was hired to perform
e. Fiduciary duties agent owe to principals
i. Reasonable care
ii. Follow reasonable instructions
iii. Loyalty
1. Cannot usurp business opportunity, compete, or take in secret
profits
VIII. Corporations
a. Distinct legal entity
i. Limits personal liability and promotes investment
b. People
i. Shareholders: investors, owners of interest in corporation, elect
directors
ii. Directors: responsible for corporate decisions, appoint officers
iii. Officers: run the corporation, appointed by directors
c. Promoters
i. Fiduciaries of the corporation who enter into contracts with investors
on behalf of corporation, even before it exists
ii. Personally liable for contracts entered into before corporation exists
1. Novation will shift liability to corporation
d. Articles of Incorporation
i. Signed and filed
ii. Name of corporation, plus corp., co., inc., ltd. At the end
iii. Agent
iv. Names and addresses of incorporators
v. Duration of the corporation (most perpetual)
vi. Purpose of the corporation (usually broad—any lawful activity)
1. Acts beyond the purpose usually unenforceable (ultra vires)
vii. Authorized shares
e. Timing: moment of incorporation is when limited liability begins
i. Secretary of State accepts fee and files the articles
f. Bylaws
i. Superseded by AOI, easier to amend
g. Piercing the veil to avoid fraud or unfairness
i. Alter ego: no corporate formalities between investor/shareholder and
corporation
ii. Undercapitalization: failure to maintain sufficient funds to cover
foreseeable liabilities
iii. Fraud: fraud-like behavior
h. Stock
i. Debt—creditors
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 ii. Stockholders—equity
iii. Preferred stock > common stock
1. Dividends
2. Liquidation
3. Creditors>preferred stockholders
iv. Types of shares
1. Authorized shares: maximum number of shares in the AOI
2. Issue shares: actually sold
3. Outstanding shares: shares in possession of shareholders
4. Treasury shares: reacquired
v. Consideration for shares: any valid consideration
vi. Watered stock sold for less
vii. Stock subscription: commitment to buy stock before corporation
formed—valid for 6 mos
viii. Preemptive rights: agreement that shareholder can maintain certain
percentage of stock
i. Getting money
i. Board declares dividend or buys back stocks
1. Cannot declare dividends if corporation is insolvent or would
become insolvent by dividends—board directors liable for
unlawful dividends
ii. Priority of distribution: preferred shares > common shares
1. Dividend preference of a certain amount: preferred share
2. Participating preferred shares get their dividend, plus common
dividend
j. Restrictions on shareholder sale of shares:
i. Closely held corporations
1. Must be conspicuously noted
2. Generally enforceable—outright, consent required, option for
company to buy, or right of first refusal
3. Challenges: restraint of alienation—is it reasonable to restrict to
maintain legal status
ii. Federal causes of action 10b-5
1. Fraudulent sales
a. Plaintiff purchased or sold security
b. Transaction involves interstate commerce
c. Defendant engaged in fraud/deceptive conduct
i. Related to material information
d. Defendant had requisite intent (reckless or intentional)
e. Plaintiff relied on defendant’s conduct
f. Plaintiff suffered harm
i. Out-of-pocket damages allowed
k. Insider trading 16B
i. Corporations traded on national securities exchange or with assets of
more than $10mil and more than 500 shareholders
1. Insiders (directors, officers, shareholders with 10%+ stock)
liability
2. Short-swing profits: buy and sale within 6 months—return profits
to corporation
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 l. Shareholder meetings
i. Most important—elect the board of directors
ii. Annual meetings—elect directors and other shareholder business
iii. Notice
1. Notice of meeting no fewer than 10 days, but no more than 60
days before the meeting
2. Include the time, date, and location
3. For special meetings, notice must include the purpose of the
meeting
4. Insufficient notice: shareholder can challenge actions taken at
the meeting
a. Waiver by attendance
iv. Record date
1. Used to determine which shareholders are eligible to vote
a. Shareholders who own shares on the record date are
entitled to vote
2. Directors must fix a record date, no more than 70 days
v. Proxy—shareholders vote by proxy—must be in writing
1. Signed by shareholder as of record date
2. Be sent to the secretary of the corporation
3. State that it authorizes another to vote the shareholder’s shares
4. Cannot be valid for more than 11 months
m. Voting—issues
i. Election of directors
ii. Mergers
iii. Share exchanges
iv. Amendments to the articles of incorporation
v. Sales of all or substantially all of its assets
n. Shareholder approval
i. Quorum required for votes to be effective (majority of outstanding
shares)
ii. Necessary vote: quorum present, majority of votes
o. Cumulative voting
i. Shareholder votes: shares X director positions
p. Shareholder litigation:
i. Direct lawsuits: shareholder’s own name if direct harm to shareholder
1. Voting rights dividends interference, torts, misinformation
ii. Derivative lawsuit: suit on behalf of corporation
1. Standing: contemporaneous stock ownership
2. Demand requirement: must demand board bring lawsuit before
bringing derivative lawsuit
3. Recovery goes to corporation
q. Shareholder duties to other shareholders
i. Sales to outsider intent on looting or destroying the company
1. Damages to other shareholders
2. Looter had done it before or had given indication of intent
r. Board meetings: quorum, majority vote of those present at meeting
i. Directors need notice of special meetings, but not regular meetings
1. Attendance waives notice
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 ii. Directors cannot vote by proxy or enter voting agreement
iii. Unanimous written consent: no meeting needed
iv. Dissent
1. Enter in meeting minutes
2. File written dissent before meeting adjourned
3. Provide written dissent by certified or registered mail to
corporation’s secretary immediately following adjournment
s. Officers
i. Selected by the board
ii. Duty of loyalty and care
1. Care:
a. Business judgment rule: absent fraud, illegality, or self-
dealing, courts will not disturb good-faith business
decisions
b. Standard of care: like person with same special skills
c. Reliance: relying on officers, other employees, outside
experts, committees OK
2. Loyalty
a. Disclosure and ratification
b. Self-dealing transactions
c. Corporate opportunity doctrine
d. Insulation from liability/ratification
e. Fairness
t. Indemnification: corporation pays for costs of director/officer’s defense in
litigation
i. Mandatory when officer/director successfully defends
ii. Cannot indemnify when o/d receives improper benefit or otherwise
loses lawsuit
iii. Permissive indemnification: good faith, no intent to harm, no
reasonable cause to believe conduct was illegal
u. Merger and consolidation
v. Dissolution
w. Disagreement—dissenters’ rights to be paid fair value for their shares
x. Recap:
i. Business judgment rule
ii. Duty of care
iii. Duty of loyalty
iv. Shareholder voting
v. Annual meetings
vi. Special meetings
vii. Record date
viii. Absence of meeting
ix. Proxies
x. Distributions
xi. Authorization for dividends
xii. Liability
IX. Wills
a. General terminology
i. Decedent
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 ii. Will
iii. Testate and intestate
iv. Codicil
v. Probate
vi. Intestate succession
b. Who?
i. Heirs—intestate succession—only determined after decedent’s death
ii. Spouse
iii. Issue/descendants
iv. Ancestors
v. Collaterals—relatives through an ancestor
c. Intestate succession
i. Spouse + shared descendants
1. Spouse takes entire estate
ii. Spouse + shared descendants + spouse’s kids
1. Spouse takes $225,000 + half of the remaining property
iii. Spouse + non-spousal kids
1. Spouse takes $150,000 and half of the remaining property
d. Issue
i. Parent-child relationship, including adoptive children
1. Stepparent adoption—does not sever relationship with other
genetic parent
2. Posthumously born children
a. Conceived before, but born after father’s death
b. Rebuttable presumption that child is husband’s if husband
dies within 280 years
e. Intestate distribution to issue
i. Per stirpes
1. Divide shares equally according to a decedent’s lineal line
ii. Per capita with representation
1. Divide property equally at first generation with a surviving
member and on to their surviving issue
iii. Per capita at each generation (UPC)
1. Divide property in equal shares at the first generation where
there is a surviving member, equal shares for each subsequent
generation
f. Formal wills
i. Signed writing
1. Generally at the end of the writing (words after signature will not
be given effect)
2. Formal signature not required
ii. Witnesses
1. At least two witnesses
2. Most JDX require testator and witnesses to sign in the presence
of each other
a. Line of sight—same room
3. Within a reasonable time after original signature (UPC)
4. Interested witnesses—court will purge any interest in excess of
witness’s intestate share (majority)
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 a. UPC does nothing about it
iii. Testamentary intent
1. Present intent to make a testamentary transfer
2. 18 years old and of sound mind
3. Common law—strict compliance with formalities required
4. Modern view (UPC/minority rule)—substantial compliance with
statutory formalities
a. Clear and convincing evidence that decedent intended for
document to be his will—court will admit
g. Holographic wills
i. Informal, handwritten, signed
1. Material provisions in handwriting—UPC
2. Traditional—any markings not in handwriting invalidate the will
ii. Need not be witnessed
h. Codicils:
i. Supplement a will
i. Avoiding probate
i. Joint tenancy with right of survivorship
ii. Revocable trust
iii. Pour-over will
iv. POD contract distributes by inter vivos transfer
v. Deed
j. Revoking a will
i. Subsequent instrument
1. Subsequent writing revoking the prior will
2. Subsequent writing inconsistent with prior will
3. Subsequent document that is properly executed will control
ii. Physical act
1. Tearing, burning, crossing stuff out
2. Physical act of destruction
3. Majority: destruction of particular language destroys only that
a. UPC destructive act destroys all
4. Lost wills: rebuttable presumption that testator revoked the will
by a physical act
a. Proponent must show existence of will by clear and
convincing evidence
iii. Operation of law
1. Divorce: revokes provisions in favor of former spouse
a. Unless contrary evidence that testator wanted will to
survive
2. Subsequent marriage will not revoke a prior will
3. Third-party revocation: in testator’s presence at testator’s
direction
iv. Revocation of will revokes any codicils attached to will
1. Revocation of a codicil does not revoke a will
v. Revival of an old will
1. Revocation of a newer will generally does not revive old will

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 a. Exception: dependent relative revocation—invalidates
revocation made on the basis of mistake and revives
earlier revoked will
vi. Incorporation by reference allowed if
1. Referenced document is in existence when will is created
2. Testator intends document to be incorporated
3. Document is described with sufficient certainty
vii. Acts of independent significance—disposition dependent on unrelated
events or acts that might occur after the will
viii. Lapse: gift goes to residuary if devisee does not survive testator
ix. Anti-lapse statutes: prevent gifts from lapsing when the devisee is:
1. Protected relationship (relative)
2. Survived by issue
x. Class gifts lapse: gift goes to class members
k. Abatement of gifts—when estate does not have sufficient funds, reduce gifts
in this order:
i. Intestate property
ii. Residuary gifts
iii. General gifts (satisfied from general assets)
iv. Specific gifts (gifts of particular property)
l. Ademption
i. By extinction—devise is no longer in testator’s estate at time of death
ii. UPC: intent theory—did testator intend ademption
iii. Ademption by satisfaction—given by inter vivos transfer
m. Ambiguities:
i. Latent—cannot see on face of the will
1. Extrinsic evidence allowed
ii. Patent—appears on face of will
1. Extrinsic evidence traditionally not allowed, but most courts
allow today
n. Mistakes—generally not up to questioning
o. Power to transfer
i. Spouses entitled to:
1. Social security and pension
2. Homestead exemption
3. Personal property set asides
4. Family allowance for reasonable expenses during probate
5. Elective share
a. Forced share: 50% of augmented estate under UPC
i. Augmented estate: all property, including non-
marital
b. Waiver: surviving spouse can waive elective share if it is in
writing, fairly disclosed, and spouse is represented by
independent legal counsel
ii. Children
1. Advancements—gift satisfied during testator’s lifetime
a. Common law presumption
b. UPC requires contemporaneous writing
2. Hotchpot
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 a. Add value of gift into intestate estate
b. Divide the result by number of children taking
c. Deduct the child’s advancement from their intestate share
3. Omitted children:
a. Intentional disinheritance
b. Unintentional disinheritance—testator dies without
amending will made before child was born
i. Child’s share is intestate share if testator had no
children; or
ii. Equal share to other children
p. Bars to succession
i. Slayer rule: murderers treated as predeceasing
ii. Disclaiming gift after decedent’s death—writing, signed, identifying
decedent, interest, and extent of disclaimer within 9 months of
decedent’s death
iii. Elder abuse
q. Challenging a will
i. Only interested party—someone who would receive under will or
intestate succession
ii. Six months
r. Testamentary capacity
i. At least 18 and of sound mind
ii. Must know:
1. Who: natural objects of testator’s bounty
2. What: nature and character of property
3. Why: testamentary distribute property at death
4. How: plan of disposition
iii. Insane delusion
1. Must show that delusion was a but-for cause of testamentary
disposition
iv. Undue influence
1. Fiduciary relationship
2. Substantial benefit
3. Confidential relationship
4. Testator had weakened intellect
5. If ^ is shown, shifts burden to proponent to show no undue
influence
v. Fraud: misrepresentation with
1. Intent to deceive testator
2. Purpose of influencing testamentary disposition
3. Types:
a. Inducement: re reason for making will
b. Execution: misrepresentation re contents of the will
4. Remedy: constructive trust
s. Probate
i. Probate property:
1. will and residuary
2. does not include deeds, trusts, joint tenancy, POD contracts
ii. three years to bring probate proceedings
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 iii. creditors have statutory window to bring claims
iv. personal representative must provide notice to creditors of estate
1. administrator: appointed by court
a. Priority
i. Surviving spouse who is a devisee
ii. Other surviving devisee
iii. Non-devisee surviving spouse
iv. Other heirs
v. Any creditor
2. executor: named in will
t. Powers of attorney
i. Requirements
1. In writing
2. Signed
3. Dated
ii. General, special POAs
1. General—all affairs
2. Special—certain affairs
iii. AHCDs
1. Living will—what individual wants if incapacitated
2. Durable POA for healthcare—agent to stand in principal’s shoes
and make health care decisions for her
X. Trusts
a. Management device, bifurcated transfer to trustee and beneficiary
i. Trustee has legal title and manages property
ii. Beneficiary benefits
b. Who’s who?
i. Settlor: person who makes the trust
ii. Trustee: person who manages the trust
1. Holds legal title
2. Power to manage
3. Can be individual, bank, or trust company
4. Trust will not fail for lack of a trustee
iii. Beneficiary
1. Holds equitable title
2. Power to enforce the trust instrument
3. Can have multiple classes of beneficiary
4. Must be ascertained by specifying person or criteria, except for
unborn children
c. Types of trusts
i. Pet trusts: pets cannot be direct beneficiary
ii. Express trusts
1. Private express trust
a. Owner expressly indicates intent to create trust
b. Oral trust valid (majority), except when:
i. SoF applies (real property, etc.)
ii. Devise (trust created by will)
2. Precatory language (“to ___, my wish being that he use for ___’s
wellbeing)
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 a. Does not create a trust
3. Pourover trust
a. The only kind of empty trust allowed
b. Must be in writing when will is executed
d. Purpose of trusts must be legal and not contrary to public policy
e. Charitable trust purposes
i. Poverty
ii. Education
iii. Religion
iv. Health
v. Government
vi. Benefitting community or segment thereof
vii. RAP does not apply
viii. Cy pres: modifying charitable trust if purpose no longer possible
1. Goal: make trust as close as possible to the original purpose
f. Resulting trusts:
i. When trust fails, return to settlor or settlor’s estate
g. Constructive trusts
i. Prevent unjust enrichment if third party takes advantage of the settlor
1. Designate a trustee to hold property for benefit of settlor’s estate
ii. Fraud, duress, undue influence, breach of duty, detrimental reliance
h. Distributions
i. Mandatory trusts: trustee has no discretion
ii. Discretionary trusts: trustee has complete discretion
iii. Support trusts: trustee makes distributions to support the beneficiary
i. Creditors
i. Cannot reach trust principal until such amounts are payable or
beneficiary can demand it
ii. Exceptions:
1. Spousal or child support
2. Basic support to beneficiary
3. Federal or state tax lienholders
j. Asset protection trusts
i. Support trusts, discretionary trusts, and spendthrift trusts: creditors
cannot reach until trustee makes a payment
k. Terminating trust
i. Term expires
ii. Material purpose satisfied
1. But if trust still fulfilling a material purpose, can block
termination
l. Modification
i. Settlor can modify if trust revocable
ii. Settlor can terminate irrevocable trust with consent of all beneficiaries
iii. Modification after settlor dies:
1. All beneficiaries agree
2. Unforeseen event frustrates purpose of trust
m. Removal of trustee
i. Breach of fiduciary duty
ii. Gross mismanagement
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 iii. Trustee incapable (jail, incapacitated, seriously ill)
iv. Conflict of interest
v. Serious conflict between trustee and beneficiary
vi. Trustee resigns with written notice if settlor alive
n. Duties of trustee
i. Focus on total return of portfolio
ii. Balance intent, nature, duration, and purpose of trust; identities and
circumstances of beneficiaries; economic conditions; tax consequences
iii. Powers
1. Sell or transfer
2. Lease trust property
3. Pay taxes
4. Sever or consolidate trust property
iv. Loyalty
1. Reasonably
2. No self-dealing (per se breach)
3. Conflicts of interest—reasonable and good faith test
v. Care
1. Reasonably prudent person would act in the care of his own
estate
2. Trustee must use special skills (heightened standard)
3. Delegation allowed in modern law
4. Prudent investments: diversify, measure portfolio as a whole
5. Balance allocation between income and principal between life
tenants and remainder-holders fairly
XI. Conflicts
a. Three approaches
i. Traditional approach (First Rst.)
1. Once a legally significant event occurs in a state, those state
laws vest to determine the legal significance of the event.
Generally the last act necessary for a cause of action
a. Torts: where tort occurred/last event necessary
i. Apply law of place of injury
ii. Governmental interest analysis
1. Law applies when its application would promote the purposes or
policies of the law
2. State is said to be interested in the case
3. If more than one state is interested, apply the law of the forum
state
4. Conduct-regulating laws vs. loss-shifting laws
a. Conduct-regulating laws: wrongful conduct occurs within
state, causes injury there, or when state domiciliary is
injured anywhere
i. Torts
b. Loss-shifting laws: apply when doing so would benefit a
state domiciliary
i. Torts
iii. Most significant relationships (Second Rst.)

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 1. Promote the relevant policies of the forum and other interested
states
2. Systemic interests: certainty, uniformity, predictability, and
simplicity
3. Protect the justified expectations of the parties (for planned
transactions—contracts, trusts, real estate)
a. “The court must determine which state has the most
significant relationship to the issue in question. In making
this determination, the court should strive to promote the
relevant policies of the forum and other interested states,
advance systemic interests such as certainty, uniformity,
predictability, and simplicity, and protect justified
expectations of the parties.”
i. Torts: where injury occurred, where conduct occurred,
domicile of parties, center of parties’ relationship—
presumption of place of injury unless more significant
relationship elsewhere
iv. Contract validity
1. Choice of law provisions generally enforceable
2. Contract validity cannot be resolved by choice of law—look to:
a. First Rst.: place of contracting governs—last act necessary
to create contractual right (generally acceptance)
i. Issued related to performance governed by place of
performance
b. Second Rst.: substantial relationship/reasonable basis or
fundamental state policy
b. Recurring issues
i. Depeçage: apply different states’ laws to different issues within the
same case
ii. Renvoi: when applying the law of another state, include all laws,
including choice-of-law
1. All three approaches generally reject the renvoi except in real
property/land cases
iii.

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