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MBE In BriefCondensed Outlines

The MBE REFERENCE Volumes consist of:

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Reference Volume I: Constitutional LawCriminal Law & ProcedureEvidence

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MBE In Brief: Condensed OutlinesBar Exam Alerts At-A-Glance

Acknowledgements:

The contents of the MicroMash MBE Review were initially developed and written bySMH. Walter McLaughlin, Jr. and his partners, Frederick M. Hart and James W. Smith,founded the SMH Bar Review in Massachusetts in 1964. The SMH Bar Reviewexpanded to 22 additional states and the District of Columbia. In 1996, MicroMashpurchased the SMH Bar Review and converted its MBE product into the currentcomputer-based Review. Walter McLaughlin continues as the primary contributingauthor of the MicroMash MBE Review.

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MicroMash MBE In Brief:Condensed OutlinesBar Exam Alerts At-A-Glance

MicroMash®

MBE IN BRIEFCONSTITUTIONAL LAW

MicroMash ® BAR REVIEW

MBE IN BRIEF

CONSTITUTIONAL LAW

Table of Contents

I. THE NATURE OF JUDICIAL REVIEW 1

A. ORGANIZATION AND RELATIONSHIP OF STATE ANDFEDERAL COURTS IN THE FEDERAL SYSTEM 1

1. Federal Court Jurisdiction 1

2. State Court Jurisdiction 2

B.

C.

CONSTITUTIONAL BASIS OF SUPREME COURT JURISDICTION2

1. Original Jurisdiction 2

2. Appellate Jurisdiction To Review Federal Court Decisions 2

CONGRESSIONAL POWER TO DEFINE AND LIMIT FEDERALCOURT JURISDICTION 2

1. The Supreme Court 2

2. Lower Federal Courts 2

3. Legislative (Article I) Courts 3

D. JUDICIAL REVIEW IN OPERATION 3

1. General Principles Of Constitutional Adjudication 3

2. The Case-or-Controversy Requirement 3

3. Standing 3

4. Timing Of Litigation 4

5. Justiciability — Political Questions 4

6. Appellate Jurisdiction To Review State Court Decisions 4

7. Burden Of Proof In Constitutional Litigation 5

II. THE SEPARATION OF POWERS 5

A. THE POWERS OF CONGRESS 5

1. Enumerated And Implied Powers 5

2. The Federal Commerce Power 5

3.

4.

5.

6.

7.

The Taxing Power

The Spending Power

Power Over Territories

The Federal Property Power

War And Defense Powers

6

6

6

6

68. Congressional Power To Enforce The Thirteenth, Fourteenth, And

Fifteenth Amendments 69. The Investigatory Power 7

B. POWERS OF THE PRESIDENT 7

1. As Chief Executive 7

2. The Powers Of The President As Commander-In-Chief 8

3. Powers Of The President Over International Affairs 8

4. The Appointment And Removal Powers 8

C. FEDERAL INTER-BRANCH RELATIONSHIPS 8

1. Congressional Limits Upon The Executive 82. The Presentment Requirement And The President's Power To Veto Or To

Withhold Action 9

3. Delegation Doctrine 9

4. Executive, Legislative, And Judicial Immunities 10

III. THE RELATION OF THE NATION AND THE STATES IN THEFEDERAL SYSTEM 11

A. INTERGOVERNMENTAL IMMUNITY 11

1. Immunity Of The Federal Government 112. Immunity Of State Government 11

B. AUTHORITY RESERVED TO THE STATES 11

1. Negative Implications Of The Commerce Power 11

2. Limitations On State Power In Taxation 123. Specific Constitutional Limitations On State Power 13

C. NATIONAL POWER TO OVERRIDE STATE AUTHORITY 13

1. Direct Conflict 132. State Act Enhances Federal Policy 133. State Act Contravenes Federal Policy 134. Preemption 145. Congressional Authorization For Otherwise Impermissible State Activity14

ii

D. RELATIONS AMONG STATES 14

I. Interstate Compacts 14

2. Full Faith And Credit 14

IV. INDIVIDUAL RIGHTS 15

A. STATE ACTION AND THE ROLE OF THE COURTS 15

1. State Agency 15

2. Public Function 15

3. State Involvement 15

B. DUE PROCESS 16

1. Substantive Due Process 16

2. Takings 17

3. Procedural Due Process 18

4. What Process Conforms To The Requirement? 18

C. EQUAL PROTECTION OF THE LAWS 19

1. Fundamental Interests 19

2. Nonfundamental Interests 20

3. Suspect Classifications 20

4. Nonsuspect Categories 21

D. PRIVILEGES AND IMMUNITIES CLAUSES 22

1. Under The Fourteenth Amendment 22

2. Under Article IV, §2 — The Comity Clause 22

E. THE OBLIGATION OF CONTRACTS, BILLS OF ATTAINDER,AND EX POST FACTO LAWS 22

1. Obligation Of Contracts 22

2. Bills Of Attainder 22

3. Ex Post Facto Laws 22

F. FIRST AMENDMENT FREEDOMS 23

1. Freedom Of Religion And Separation Of Church And State 23

2. Freedom Of Expression And Association 24

CONSTITUTIONAL LAW

I. THE NATURE OF JUDICIAL REVIEW

A. ORGANIZATION AND RELATIONSHIP OF STATE AND FEDERALCOURTS IN THE FEDERAL SYSTEM

1. Federal Court Jurisdiction

The federal court system consists of a constitutionally created Supreme Court and inferiorcourts created by Congress. Their jurisdiction is constitutionally limited to cases orcontroversies arising under the Constitution, laws of the United States, and treaties of theUnited States; cases affecting ambassadors, ministers and consuls, and admiralty andmaritime jurisdiction; cases in which the United States is a party; and cases based upondiversity of citizenship.

a. Limitation of the Eleventh Amendment

The Eleventh Amendment prohibits a citizen from suing a state in the federal court.

b. Exceptions to the application of the Eleventh Amendment

Under the ex parte Young exception, a state official can be sued in federal court toprevent his enforcement of an unconstitutional statute. The claim may not be basedon state law. A state may expressly waive its Eleventh Amendment protection.Personal damage suits against state officers are not prohibited by the EleventhAmendment. An injunction may require an official to make prospectivedisbursements of state funds, but damages as to past violations may not be assessedagainst the state. Pursuant to the Fourteenth Amendment, Congress can authorize asuit against a state to enforce rights created by that amendment.

c. Abstention

There are two types of abstention:

1) Discretionary abstention

A federal court can, as a matter of discretion, refuse to adjudicate an issueinvolving an unresolved point of state law until the state court has ruled on thematter. The federal court retains jurisdiction over the case, and completesadjudication if necessary after the state court opinion is rendered.

2) Abstention in cases to involving state criminal statutes

There is also abstention based upon considerations of federalism, which preventsthe federal district court from enjoining enforcement of a state statute or declaringit unconstitutional if there is a pending criminal prosecution under that statute.Federal review of such a statute is limited to certiorari, appeal to the Supreme

2 MicroMash MBE In Brief: Constitutional Law

Court, or habeas corpus in the district court. The federal district court can hear adeclaratory judgment action challenging the constitutionality of a state statutewhen brought by a proper plaintiff if there is no pending state court prosecution.

2. State Court Jurisdiction

State courts have concurrent jurisdiction over matters within the jurisdiction of the federalcourts, except where Congress or the Constitution vests exclusive jurisdiction in thefederal courts. State courts are required to adjudicate federal claims, unless the stateshave valid, nondiscriminatory excuses.

B. CONSTITUTIONAL BASIS OF SUPREME COURT JURISDICTION

1. Original Jurisdiction

The Supreme Court has original and exclusive jurisdiction in all cases between two ormore states. It has original and concurrent jurisdiction in suits between a state and theUnited States, suits by a state against the citizens of another state or against aliens, andsuits to which ambassadors or other public ministers of foreign states are parties. To suein the Supreme Court, a state must either place in issue its own rights, or, under theparens patriae doctrine, the rights of a large class of its citizens.

2. Appellate Jurisdiction To Review Federal Court Decisions

The United States Supreme Court can review lower federal court decisions by appealwhen there is an appeal from a three-judge district court convened because the reliefsought is a restraining order against enforcement of a state statute. All other cases in thefederal courts of appeal, including an appeal when the court of appeals holds a statestatute invalid or when the federal court has held an act of Congress unconstitutional, canbe reviewed by certiorari.

C. CONGRESSIONAL POWER TO DEFINE AND LIMIT FEDERAL COURTJURISDICTION

1. The Supreme Court

Congress can neither add to nor subtract from the constitutional grant of originaljurisdiction to the Supreme Court, but can vest concurrent jurisdiction in other courts.Congress can control the appellate jurisdiction of the Supreme Court, so long as theregulation of appellate jurisdiction does not destroy the role of the Court in theconstitutional scheme.

2. Lower Federal Courts

Congress has the power to create and abolish lower federal courts and, within the grant ofthe judicial power, to determine their jurisdiction. Once it has created those courts andauthorized the judgeships, it cannot limit the judges' terms or reduce their compensation.Congress cannot interfere with the inherent judicial functions of courts it has created.

MicroMash MBE In Brief: Constitutional Law 3

3. Legislative (Article I) Courts

As an incident to its Article I powers, Congress can create courts with nonjudicialfunctions, such as rendering advisory opinions.

D. JUDICIAL REVIEW IN OPERATION

1. General Principles Of Constitutional Adjudication

The Court will not adjudicate a suit unless the parties are genuine adversaries. It will notanticipate a constitutional issue in advance of the need to decide it, nor formulate a rule ofconstitutional law broader than that required by the facts to which it is applied. TheCourt will not reach a constitutional issue if it is possible by construction to decide thecase on nonconstitutional grounds.

2. The Case-or-Controversy Requirement

The judicial power of the United States extends only to cases or controversies — that is, toactual disputes between adversaries over concrete facts. This is a constitutionallimitation. The courts may not adjudicate abstract questions or render advisory opinions.

3. Standing

The standing requirement focuses on the relationship of the plaintiff to the claim he ismaking. Before a court will decide a case, it must be satisfied that the parties havestanding — that is, a direct and substantial interest in the outcome. There are two levels ofstanding: the constitutional requirement derived from the case-or-controversyrequirement, and the self-imposed prudential rules.

a. The constitutional standard

To satisfy the constitutional standard, the plaintiff must show that she has beeninjured by the action she is complaining about, but the injury need not be differentfrom the injury suffered by the public at large. Plaintiff must also show that the reliefshe is requesting will redress the harm that is alleged.

A person has standing to challenge an administrative decision, even if a harm to alegally protected interest has not occurred, if she has been injured in fact and is withinthe zone to be protected by the statute in question. Damage to environmental interestswill give standing so long as there is an allegation of personal injury.

b. Self-imposed requirements

Even though the constitutional standard is met, the Court is likely to deny standing ifthe plaintiff is not harmed in a manner different from the public at large, if he isasserting rights of third parties, or if Congress or the Constitution did not intend toconfer standing.

c. Specialized problems in standing

1) Taxpayer standing

A federal taxpayer does not have standing to challenge federal expenditures unlessthere is a logical nexus between the status asserted and the claim sought to be


adjudicated. The claim must seek to enjoin a spending (not a regulatory) statute,and must allege a positive limitation on the spending power. The only suchlimitation that has been recognized is the First Amendment Establishment Clause.

2) Standing as a citizen

It is unlikely that a plaintiff can use her status as a citizen to obtain standing.

3) Standing to raise rights of third parties

A party ordinarily may raise only constitutional deprivations that affect himpersonally. However, he may raise the constitutional rights of third parties ifthere is a special relationship with that third party, and if that party would nototherwise have his rights adjudicated.

4. Timing Of Litigation

a. Mootness

When the passage of time resolves the issues between the parties so that the plaintiffno longer has a stake in the outcome, the case will be dismissed as moot. Themootness doctrine will not apply: (1) when a party has a continuing, residuary interestin the outcome; (2) when the injury is capable of repetition, yet evades reviewbecause the passage of time makes each such case moot before it can be litigated; (3)when the case is a class action and other members of the class have a continuinginterest in the outcome, and (4) when an adjudication is necessary to preventrecalcitrant officials from returning to their old practices once a case has beendismissed for mootness.

b. Ripeness

A suit will be dismissed because it is not ripe when the action that is the subject of theclaim is indefinite, i.e., the plaintiff has not yet violated the statute. Ripeness can alsobar adjudication when the defendant's alleged actions affect the plaintiff in animprecise manner, i.e., it is not clear that the defendant would enforce the statuteagainst the plaintiff.

5. Justiciability — Political Questions

The Supreme Court will decline to review a case if the final determination of the issuehas been committed by the Constitution to another branch of the government, or when theCourt is inherently incapable of managing the controversy.

6. Appellate Jurisdiction To Review State Court Decisions

The United States Supreme Court has the right to review decisions of the highest statecourt by certiorari (a discretionary form of review available when four justices of theSupreme Court agree to hear the case) when the validity of a federal statute is upheld;when the validity of a state statute is successfully challenged on the ground that it isrepugnant to federal law, a treaty, or the United States Constitution; or when the statecourt upholds the validity of a state statute, or decides against the validity of a


federal statute. Review by appeal (a nondiscretionary form of review) has been all buteliminated.

Before a case is ripe for Supreme Court review, all state court appeals must be exhaustedand the judgment must be final. Appeals on interlocutory matters are not permittedunless the injury would be irreparable and the issue is separable. Supreme Court reviewis not available even if federal issues are involved if the state court decision is based uponan adequate and independent state ground. State decisions on matters of substantive statelaw are adequate except when state law purports to incorporate a federal standard under astatute creating a federal cause of action. If the basis of decision is ambiguous, the Courtwill review it as decided on federal law, unless the state court has made a "plainstatement" in the decision that federal cases are being used only for guidance. Stateprocedural grounds are adequate if the procedure is uniformly applied and furthers alegitimate state interest.

7. Burden Of Proof In Constitutional Litigation

a. The usual standard

The usual rule is that the plaintiff has the burden of showing that a challenged statuteis unconstitutional. The ordinary standard in a due process or equal protection case iswhether the statute serves a rational purpose.

b. The exceptional standard

The exceptional standard applied when the state is classifying by means of a suspectclassification or affecting a fundamental interest, or is infringing upon the freeexercise of religion or upon speech fully protected by the First Amendment, is thatthe state has the burden of justifying the statute by showing that it is necessary toserve a compelling state need.

II. THE SEPARATION OF POWERS

A. THE POWERS OF CONGRESS

1. Enumerated And Implied Powers

The Constitution vests specific legislative powers in Congress. Incidental to the power topass legislation is the power to conduct investigations and hearings. While there is nogeneral delegation of legislative power to Congress, the Necessary and Proper Clausegives Congress the implied power to pass legislation appropriate and reasonably relatedto the specific delegation of legislative powers under Article I, §8.

2. The Federal Commerce Power

Where Congress is regulating either the instrumentalities of interstate commerce or thechannels of interstate commerce, its power pursuant to the Commerce Clause is plenary,limited only by positive limitations in the Constitution such as the Establishment Clause.However, when Congress is regulating intrastate activities because of their relation oreffect on interstate commerce, the court must find a substantial effect on interstate


commerce for the act to be constitutional. The legislation can make findings concerningthe perceived effect which is likely to aid the court in finding the act constitutional.

3. The Taxing Power

The taxing power of Congress is limited by the requirements that it be exercised in auniform manner throughout the United States, that a direct tax (head taxes or ad valoremtaxes on real property) be apportioned among the states, and that no tax be levied onexports.

A tax statute, even though it regulates the subjects it taxes, will be sustained under thetaxing power if one of its purposes is to raise revenue, even though the amount raised isminimal. If legislation cannot be sustained under the taxing power, it will still be valid ifthe regulation imposed by the statute would be valid under the commerce power.Incidental to the taxing power, Congress may enact administrative provisions that have asubstantial regulatory effect, unless such regulations violate basic individualconstitutional guarantees such as the right not to incriminate oneself.

4. The Spending Power

Although Congress does not have the right to legislate for the general welfare, it doeshave the right to spend money for the general welfare, a power not subject to judicialreview unless the money is spent for a purpose that is specifically prohibited by theConstitution. Congress can accomplish ends through conditions attached to theexpenditure of funds that it could not accomplish by direct regulation.

5. Power Over Territories

In the District of Columbia and other federal enclaves, Congress has the power that isnormally possessed by a state legislature.

6. The Federal Property Power

Article IV, §3 of the Constitution gives Congress the right to dispose of federal property,and to enter into competition with private businesses. Congress may also protectproperty owned by the federal government.

7. War And Defense Powers

Pursuant to its power to declare war, raise and support armies, provide and maintain anavy, and to make rules for the government of armed forces, Congress can control theeconomy during wartime and for a reasonable period thereafter, authorize the destructionof private property, operate the draft, and accomplish other acts incidental to its delegatedpowers. It may set up military courts to try military personnel for crimes committed onmilitary posts or in service connected activities. Except for military spies or enemycombatants, military courts may not try civilians, including military dependents.

8. Congressional Power To Enforce The Thirteenth, Fourteenth, And FifteenthAmendments

While early cases construed the Civil War Amendments in a restrictive manner, the Courthas in recent years construed legislation passed under the Fourteenth Amendment to


reach not only state action, but also actions of officers acting under color of state law.Dicta indicate that Congress has the power to legislate directly against individual conductthat restricts Fourteenth Amendment freedoms. Under the Thirteenth Amendment,Congress not only can legislate against slavery and involuntary servitude, but also canpass remedial legislation designed to remove the incidents or badges of slavery. Statutespreventing discrimination against black people in housing and in contracting for privateeducation have been upheld under the Thirteenth Amendment, which is not limited by thestate action concept. The Court has upheld the power of Congress to regulate localelections under the Fifteenth Amendment. Katzenbach v. Morgan implied, but the Courthas never held, that Congress has the power to define the content of the equal protectionand due process guarantees of the Fourteenth Amendment.

9. The Investigatory Power

As an incident to its power to legislate, Congress may conduct investigations on matterson which it might take action even if there is no specific legislation pending. However,an investigating committee is limited to the scope of the legislative resolution authorizingit. Congress may penalize a reluctant witness by trying her for contempt of Congress andimprisoning her for the remainder of the congressional term, or by trying her in a judicialproceeding. In such a judicial proceeding, a defendant may raise as a defense that theinvestigation is beyond the scope of the legislative power, that she was not given a fairopportunity to determine if she was within her rights in refusing to answer, that sheproperly raised her right against self-incrimination, or that her First Amendment rightswere infringed.

B. POWERS OF THE PRESIDENT

1. As Chief Executive

a. Power and obligation to execute the laws

As chief executive, the president is under the obligation to execute the laws and tospend funds that Congress directs the president to spend.

b. Inherent power in domestic affairs

In domestic affairs, the president has an undefined quantum of inherent authority toact unless Congress has specifically forbidden the proposed action.

c. The legislative power

The legislative power of the president is limited to proposing legislation and vetoingbills that have passed Congress. The veto power empowers the president to veto abill in its entirety. The Court held the line item veto unconstitutional in Clinton v.City of New York. The president's veto can be overridden by a two-thirds vote ofeach house of Congress, except when Congress adjourns within 10 days of the time abill is delivered to the president. In that case, the legislation is not enacted unless thepresident signs it.


d. The pardon power

The president has plenary power to pardon for federal crimes, and to imposeconditions when granting a pardon.

e. Power to refuse to disclose information — executive privilege

The president has an absolute privilege to refuse to disclose confidentialcommunications dealing with military or diplomatic secrets, and a qualified privilegewith respect to all other confidential communications. The qualified privilege issuspended when there is a substantial governmental interest outweighing thepresident's interest in preventing disclosure.

2. The Powers Of The President As Commander-In-Chief

As commander-in-chief, the president has the power to deploy military forces, toestablish governments in occupied territories, and, during wartime, to seize privateproperty. The president does not have the power to declare war or to raise and supportarmed forces, both of which are given to Congress.

3. Powers Of The President Over International Affairs

In international affairs, the president's inherent authority is much more extensive. Withthe approval of two-thirds of the Senate, the president has the power to conclude treaties,which, if self-executing, have a status equal to that of laws passed by Congress. Non-self-executing treaties, such as the United Nations Charter, have no effect as law. Inaddition, the president has the power to make executive agreements with foreign nations;such agreements have a status superior to state law, but not to congressional legislation.

4. The Appointment And Removal Powers

As chief executive, the president has the power to appoint officers of the United States.As an incident to the power to make appointments, the president has the power to removeappointees without cause except those appointed to fixed terms on independent regulatorycommissions.

C. FEDERAL INTER-BRANCH RELATIONSHIPS

Although it was the intent of the framers of the Constitution to prevent the abuse of power byseparating the executive, legislative, and judicial functions of government, none of the threebranches of government has unfettered power in its own sphere because of restraints imposedby other branches.

1. Congressional Limits Upon The Executive

a. Impeachment power

The ultimate control that can be exercised by the legislature over the executive isimpeachment. Article II, §4 of the Constitution provides that the president, vicepresident, and all civil officers of the United States can be removed from office byimpeachment and conviction. The grounds for impeachment are treason, bribery, orother high crimes and misdemeanors. The Nixon impeachment process raised thequestion whether noncriminal activity that constituted a breach of trust or a violation


of the oath of office was an impeachable offense. Historically, criminal conduct hasnot been required.

The House of Representatives is given the sole power to impeach, an action akin toindictment in the criminal law. The sole power to try impeachments is in the Senate.A two-thirds vote is required for conviction. The Chief Justice of the Supreme Courtpresides over the impeachment trial of a president. A conviction after animpeachment removes the official from office, and disqualifies him from holdingoffice again.

b. Investigatory power

The power of Congress to carry on investigations is only incident to its legislativepower. In the process of investigating the executive branch for the ostensible purposeof finding the facts necessary to pass legislation, however, Congress may bring tolight inadequacies in the administration of the executive branch of government. Thepublic exposure of these inadequacies often serves to correct them.

c. Appropriation power

Through its ability to refuse appropriations for activities, Congress can control thepolicies of the executive. If Congress desires that a project go forward, it canmandate that appropriated funds be spent, and the president is required to spend them,because the president has a constitutional obligation to execute the laws.

2. The Presentment Requirement And The President's Power To Veto Or ToWithhold Action

a. Power and obligation to execute the laws

The essence of the executive power is to execute the laws. In some cases that poweris discretionary. Where Congress has not mandated that the president spend specificmoney that Congress has appropriated, the president has the discretion not to spend it.However, Congress can mandate that funds be spent or that laws be carried out.

b. Presidential veto power

Once Congress has approved legislation, the president has the power to veto it within10 days of the time it is sent to him or her.

Congress has the power to override a veto by a two-thirds vote of each house, inwhich case the proposed legislation will become law despite the president's veto. IfCongress adjourns within 10 days of the time the legislation is delivered to thepresident, however, it cannot become law without the presidential signature.Therefore, the president can "pocket veto" a bill passed at the end of a congressionalsession by not signing it, and Congress has no authority to override such a veto.

3. Delegation Doctrine

Congress frequently vests substantial discretion in the president and presidentialsubordinates regarding the manner in which laws are executed, and in many instances themembers of the executive branch make legislative policy determinations. Such


delegation of power is constitutionally permissible unless there are absolutely noLegislative veto provisions have been employed by Congress to delegate authority, whilereserving to Congress the power to block specific actions or regulations. However, theveto is legislation and therefore must follow the procedures prescribed in Article I —bicameral approval of legislation, presentment of legislation to the president, thepresident's veto, and Congress' power to override a veto.

4. Executive, Legislative, And Judicial Immunities

a. Executive immunity

The president is entitled to absolute immunity from civil liability for damagespredicated on official acts. While the separation of powers doctrine does not barevery exercise of jurisdiction over the president, a court, before exercisingjurisdiction, must balance the constitutional weight of the interest to be served againstthe dangers of intrusion on the authority and functions of the executive branch;private suits for damages based on the president's official acts do not warrant such anintrusion.

Executive officials in general are usually entitled to only qualified or good faithimmunity. This means that officials performing discretionary functions are generallyshielded from liability for civil damages insofar as their conduct does not violateclearly established statutory or constitutional rights of which a reasonable personwould have known. Executive officials serving as presidential aides may sometimesbe entitled to absolute immunity, if the presidential aide can show that theresponsibilities of her office embraced a function so sensitive as to require a totalshield from liability, and that she was discharging that function when performing theact for which liability is asserted.

b. Legislative immunity, the speech or debate clause

Members of Congress cannot be held accountable in any forum except Congress foracts that are an integral part of the deliberative and political process, such as speakingor voting on the floor of Congress or conducting legislative hearings. Aides ofmembers of Congress assisting them in performing these functions are also protected.The Speech or Debate Clause does not protect a member of Congress from criminalprosecution for taking a bribe to influence his vote.

c. Judicial immunity

Judges enjoy absolute immunity from any decisions made in their official capacity.In defamation an absolute privilege applies to statements which are part of a judicialproceeding, including statements by the judge, the attorneys, and the witnesses,provided that the statements are pertinent to the cause at issue. The test is notwhether the statement is legally relevant, but whether it has reference and relation tothe subject matter of the action.


III. THE RELATION OF THE NATION AND THE STATES IN THEFEDERAL SYSTEM

A. INTERGOVERNMENTAL IMMUNITY

1. Immunity Of The Federal Government

a. Suits against the federal government

The United States can sue a state without its consent, but a state cannot sue the UnitedStates without permission.

b. Regulation of the federal government

The states cannot regulate the federal government in a manner that prevents it fromcarrying out its responsibilities, such as requiring a state license for a contractor towork on a federal project. The state may regulate the federal government if the statedoes not interfere with federal policies.

c. Taxation of the federal government

The federal government itself is exempt from direct state taxation. Congress has thepower to exempt one of its instrumentalities from state taxation. Absent expresscongressional intention, a state tax levied directly on a nongovernmental entity, theeconomic burden of which is on the federal government, is constitutional. Federalemployees are liable for state income taxes.

2. Immunity Of State Government

a. Immunity from suit

A state may be sued by the federal government or by a sister state without its consent,but may not be sued by a private citizen.

b. Immunity from regulation

The federal government has the right to regulate the states, and the fundamentallimitation on the federal commerce power is the political process, not a judicialdistinguishing of "traditional government functions."

c. Taxation

The federal government has the power to tax a state unless the function being taxed isone that can only be performed by a sovereign.

B. AUTHORITY RESERVED TO THE STATES

1. Negative Implications Of The Commerce Power

If Congress fails to exercise the full scope of the commerce power, states may regulatecommerce, provided that the state does not discriminate against out of state commerceand does not impose an excessive burden on interstate commerce. Health and safetyregulation is a traditional police power of the states and can justify nondiscriminatory,


incidental burdens on interstate commerce so long as there is no less burdensome meansthe state could use to protect its interests.

a. Exceptions

A state can, in the absence of congressional legislation to the contrary, discriminatebetween out of state and resident buyers when it acts as a market participant. Thestate has plenary control over the consumption of alcoholic beverages in that stateunder the Twenty-First Amendment.

2. Limitations On State Power In Taxation

a. Foreign commerce

The states do not have the power to tax imports, but may impose nondiscriminatory,ad valorem taxes upon goods once they are physically within the state, even thoughthey are in their original packages. States cannot impose ad valorem property taxeson instrumentalities used in foreign commerce or otherwise use taxes to discriminateagainst foreign commerce.

b. State power to tax interstate commerce

1) General principles

There are four conditions which must be met for a state to tax interstate commerceconstitutionally: (1) there must be a substantial nexus between the taxing state andthe subject of the tax — a due process requirement; (2) the tax must be fairlyapportioned to prevent interstate commerce from paying more than its share of thetax burden; (3) the tax must not discriminate in favor of local commerce andagainst interstate commerce; and (4) the tax must be fairly related to the servicesprovided by the state.

2) Stream of commerce

Ad valorem taxes on property cannot be constitutionally levied upon goods ininterstate commerce. Once movement from one state to another has begun, goodsare in interstate commerce until they reach their destination, even though there aredelays in transit. If the goods come to rest and can easily be diverted into localcommerce, they are no longer immune from local taxation.

3) Instrumentalities of interstate commerce

Instrumentalities of interstate commerce are subject to property taxes, providedthey are in a state for a sufficient period to obtain a taxable situs and the tax isfairly apportioned. The state of domicile need not apportion property taxes unlessit can be shown that the property was habitually employed in another state.

4) Privilege and license taxes

Privilege and license taxes are constitutional even on the privilege of conductingan interstate business within the state, provided that they meet the basic testdescribed above. Flat fee license taxes for itinerant merchants (drummer taxes)


are likely to be found unconstitutional because they place a higher tax burden onthe itinerant merchant than on the local merchant.

c. Due process requirements

A state may impose a sales tax only on a transaction that is consummated in the state,but may impose a use tax on sales made outside the state if the goods are thereafterbrought into the state. If the seller has sufficient contact with the state imposing theuse tax, that state may require the seller to collect the use tax and remit the proceedsto the taxing state.

d. Equal protection or privileges and immunities

Net income taxes on out of state residents are constitutional if they are apportioned tothe income earned within the state, and are assessed on the same basis as residentincome taxes.

Since foreign corporations are not citizens for purposes of the Privileges andImmunities Clause, a state can exact a discriminatory fee for the right to do businessin the state. Once a foreign corporation is qualified to do business in the state,however, the state may not tax it in a discriminatory manner.

As expressed in the Tenth Amendment, the federal government is one of specificdelegated powers, leaving the residuum of sovereignty in the states.

3. Specific Constitutional Limitations On State Power

The states are specifically forbidden from making treaties with other countries, andimpliedly forbidden from interfering with the conduct of foreign relations by the federalgovernment. States may not establish a monetary system, pass bills of attainder, or passex post facto laws. Without congressional authority, they may not wage war, maintain apeacetime army, enter into a compact with another state or foreign country, or tax importsand exports.

States lack the power to increase the qualifications for Congress set forth in theConstitution and therefore could not impose term limits on senators and representativeselected as part of the state's congressional delegation.

C. NATIONAL POWER TO OVERRIDE STATE AUTHORITY

1. Direct Conflict

A state statute that conflicts with an act of Congress is invalid under the SupremacyClause.

2. State Act Enhances Federal Policy

If a state act furthers a congressional policy, it is unlikely that it will be invalid unlessCongress has preempted the field.

3. State Act Contravenes Federal Policy

On the other hand, a state act that contravenes federal policy will be invalid, even ifCongress did not preempt the field.


Even if there is no conflict, a state statute will not be vatic it it attempts to legislate in afield in which Congress has intended to exercise exclusive legislative power. Sincepreemption is a matter of congressional intention, it can either be explicit or implied incongressional legislation. The factors that will help a court find preemption are that thelegislation is in a field not traditionally controlled by the states, the federal legislation isvery detailed, the federal government has a substantial interest in the field regulated, andthere is a need for a uniform system of national regulation.

5. Congressional Authorization For Otherwise Impermissible State Activity

Congress can specifically permit the states to regulate interstate commerce, and cannullify a court decision that prohibits states from acting because of the negativeimplications of the commerce power.

D. RELATIONS AMONG STATES

1. Interstate Compacts

Interstate compacts are agreements between states concerning cooperative efforts atvarious governmental functions. Article 1, §10, Clause 3 provides that a state isforbidden to enter into such a compact without approval of Congress. Congressionalconsent is not necessary for every agreement between states, on those situations wherethe interstate compact "tends to increase the political power of the states that mayencroach upon the supremacy of the United States." For example, an agreement thatvested a tri state governmental body with regulatory powers that ordinarily would beexercised by the federal government would require congressional approval.

2. Full Faith And Credit

Article IV, Section 1 of the United States Constitution (the Full Faith and Credit Clause)requires that "Full Faith and Credit shall be given in each State to the public acts, recordsand judicial proceedings of every other State." "Public acts" include both statutes andcase law.

The Full Faith and Credit Clause has often been interpreted narrowly, allowing the forumstate to apply its own statutes as long as the forum has a legitimate interest in applying itslaw and has sufficient contacts with the parties or the subject of the litigation. The FullFaith and Credit Clause does not require a state to apply another state's laws in violationof its own legitimate public policy.

a. Enforcement of foreign judgments

Under the Full Faith and Credit Clause, a judgment rendered by a court in State Xmust be given the same effect in State Y that it would have in State X. At commonlaw, a second suit was necessary in State Y in order to establish the original judgmentas enforceable there. Many states, however, have adopted the Uniform Enforcementof Foreign Judgments Act, which provides in numerous instances for a registration ofthe foreign judgment in the second state and thus eliminates the necessity of a secondsuit to enforce the judgment.


A "foreign judgment" generally means any judgment, decree, or order of a court ofthe United States or of any other court which is entitled to full faith and credit in asister state. A judgment that is not on the merits will be recognized in other statesonly as to the issues actually decided.

b. Defenses to recognition or enforcement

Fundamentally, the law of another state or another country has no extraterritorialeffect. Such foreign law will generally be recognized and given effectextraterritorially, however, subject to certain limitations. A state may, under certaincircumstances, refuse to recognize or enforce foreign laws or rights and liabilitiesbased thereon on the ground that the law in question is a penal or revenue statute, thatit violates the public policy or positive law of the forum state, or that to give effect tothe foreign law would prejudice the state's own rights or the rights of its citizens.

Furthermore, a foreign judgment will not be recognized or enforced where it wasrendered without proper judicial jurisdiction or without requisite due process.

IV. INDIVIDUAL RIGHTS

A. STATE ACTION AND THE ROLE OF THE COURTS

The Fourteenth Amendment applies only to the states. Individuals do not have to complywith due process or equal protection standards. The problem for the Court is to determinewhen state participation with individuals, or the quality of the individual's activity, makes itappropriate to subject an individual to Fourteenth Amendment requirements.

1. State Agency

The Fourteenth Amendment applies to the state, its officers and agents, and all of itspolitical subdivisions.

2. Public Function

The Fourteenth Amendment is applicable to actions of private individuals who actwithout state involvement when the private activity takes over what is essentially a publicfunction, such as running a company town or conducting an election.

3. State Involvement

When the state acts in concert with individuals, the Court strikes a balance in determiningwhether there is state action, and is more likely to find state action in cases of racialdiscrimination than in violations of the First Amendment or of procedural due process.

a. Judicial involvement

Shelley v. Kraemer found state involvement in the enforcement by judicial decree of aracially restrictive covenant, but the implications of this decision have not beendeveloped. State action is not found in the mere enactment of a statute giving alienholder a right to "self help" upon default by the debtor.


b. Business involvement

A partnership-like arrangement between the state and an individual is sufficientinvolvement for state action.

c. State services vs. subsidies

The furnishing of services on a non-exclusive basis to an individual or entity is notstate action, but a state subsidy (i.e., special, exclusive aid) to a racially restrictedschool, or permitting such a school to use state facilities on an exclusive basis, is stateaction.

d. State licensing and regulation

The fact that a state licenses or regulates an industry does not make the business ofthat industry state action.

e. State encouragement

The repeal of a fair housing law by referendum and the prohibition by constitutionalamendment of a new fair housing law is state encouragement of racial discrimination,and constitutes state action.

B. DUE PROCESS

The First, Fourth, Fifth, and portions of the Sixth and Eighth Amendments to theConstitution have been incorporated into the Due Process Clause of the FourteenthAmendment by a standard which makes guarantees that are fundamental to the Americanscheme of justice applicable to the states.

Citizens, aliens, and corporations are "persons" within the meaning of the Due ProcessClause.

1. Substantive Due Process

a. Economic interests

The substantive Due Process Clause is no longer a limitation on the power of thelegislature to enact economic legislation, unless the statute is arbitrary andunreasonable and has no legitimate purpose.

b. Family and privacy interests

When legislation affects personal and family rights such as the right to marry, theright in limited instances to privacy, or the right to an abortion, the legislature mustjustify the legislation by a compelling state interest or it will violate substantive dueprocess.

c. Retroactivity

Statutes that retroactively deprive individuals of vested economic rights violate theDue Process Clause.


d. Vagueness in criminal statutes

Due process also requires that criminal statutes be specific enough so that anindividual knows what conduct is prohibited before she takes action. Court opinionsdefining vague statutes can cure vagueness for future cases, but not in the case inwhich they are announced.

2. Takings

Both the federal government and state governments and instrumentalities of both have thepower to take private property by eminent domain. However, the Fifth Amendment tothe Constitution prohibits the United States from taking private property for public usewithout just compensation. That amendment is applicable to the states through theFourteenth Amendment.

a. Requirement of a public purpose

A purported taking is invalid if it is not for a public purpose. However, the court hasconstrued a "public purpose" broadly, as coterminous with the scope of thesovereign's police power.

If the taking is held invalid because it did not serve a public purpose, the landowner isentitled to damages for the temporary taking during the period when he was unable touse his property because of the invalid taking.

b. What constitutes a taking?

Not all actions by the government that regulate the use of land and in many instancessubstantially diminish its value are takings for which the government must paycompensation. Zoning ordinances, environmental protections laws, and landmarkpreservation are usually found to be valid regulations under the police power insteadof compensable takings. There are a number of situations, however, where theregulations constitute a taking.

Any physical intrusion on private property by the government or the establishment ofa non-possessory property interest such as an easement constitutes a taking.

A land use regulation, even if enacted for valid police power purposes will constitutea taking if it deprives the owner of all economically viable use of the land. The onlybasis upon which the state could justify a regulation depriving the land of alleconomic value under the police power is to prove that the building on the land wouldconstitute a common law nuisance.

To be valid regulation instead of a taking, the regulation must also substantiallyadvance the governmental objective being pursued and there must be a tight fitbetween the regulation and the governmental interest.

While the government can condition a permit upon the landowner providing somekind of public benefit, the benefit which the landowner is to provide must be roughlyproportional to the burden which she is placing upon the public by obtaining thepermit.


3. Procedural Due Process

The state must afford some form of procedural due process when it interferes with aproperty right or the liberty of a person, in order to ensure the accuracy of thedetermination by the government official and to avoid arbitrary government action.

a. When must the government conform to due process requirements?

1) Loss of liberty

Due process must be followed when an individual is tried under the criminaljustice system, when it revokes parole or probation, or cancels the "good time"credits of a convicted criminal. In determining whether a sentence is to becommuted or parole is to be granted, due process safeguards must be maintainedwhen an expectancy, rather than possibility, of commutation or parole is created.Civil commitment proceedings and infliction of physical punishment aredeprivations of liberty interests necessitating procedural due process.

2) Fundamental constitutional rights

The government must observe procedural due process when it regulatesfundamental constitutional rights, such as the control of speech through obscenitylaws, or the right of association in the family unit.

3) Property interests

The right to drive an automobile is a protected property right, not a privilege. Thegovernment may not terminate an individual's participation in a welfare programwithout a hearing but may legislatively modify such benefits. A person holdinggovernment employment under an express or implied tenure possesses a protectedproperty interest, but there is no property right to have the government renew afixed term contract. State law will ordinarily determine if there is a protectedproperty right. A government employee whose contract is not renewed because ofalleged exercise of First Amendment rights is entitled to a hearing in which thestate must show that it would have terminated his employment even if he had notattempted to exercise those rights. The temporary deprivation of property throughprejudgment attachment is interference with a property right that requires noticeand hearing. Damage to reputation alone is not a protected property right, but ahearing is required if damage to reputation is coupled with damage to anotherinterest.

4. What Process Conforms To The Requirement?

The three factors determining the amount of process required are: (1) the private interestaffected by the official action; (2) the risk of erroneous action through the proceduresused, and (3) the governmental burden in providing process.

At a minimum, procedural due process requires that the affected person be given notice ofthe official action to be taken against her and an opportunity to be heard. The hearingmay promptly follow instead of precede the official action if there is sufficient reason forthis procedure. If the deprivation is more substantial, such as the revocation of parole,

MicroMash MBE In Brief: Constitutional Law19

there are additional procedural requirements. These requirements include written noticeof charges, the opportunity to confront the

evidence against one, the opportunity topresent evidence, and the right to a neutral factfinder who makes written findings.Arbitrary presumptions that prevent persons deprived of liberty or property rights frompresenting their claims are likewise unconstitutional.

C. EQUAL PROTECTION OF THE LAWS

The purpose of the Equal Protection Clause is to ensure that the government will treat similarpersons in a similar manner. Legislation rarely achieves this goal, however, because a statuteplaces individuals in a class who should not be there, or fails to include persons who shouldbe. The crucial test for equal protection is the degree of tolerance that the Court will afford tolegislation failing to classify persons appropriately to achieve a governmental purpose.

The Equal Protection Clause applies to the states because it is part of the FourteenthAmendment, and to the federal government through the Due Process Clause of the FifthAmendment.

Citizens, aliens, and corporations, provided that they are qualified to do business within astate, are protected by the Equal Protection Clause.

A statute many times will classify explicitly, but those who administer a statute may makeclassifications not present in the statute itself. A statute, even if neutral on its face and in itsapplication, may have a discriminatory purpose and effect.

1. Fundamental InterestsIf a fundamental interest is affected by the classification, the strict scrutiny test is applied.The state, not the plaintiff, must demonstrate that the classification is necessary to satisfya compelling state need. Fundamental interests include the right to vote, the right to fairrepresentation, the right to be a candidate, the right to travel, rights as a criminaldefendant, and the right to marry.

a. Regulation of voting and legislative representation

1) The right to the franchise

While the state has the right to limit the franchise to residents of the community, itmay not impose a durational requirement of more than fifty days. It may notimpose property or interest qualifications, nor may it condition the right to voteupon the payment of a poll tax. While the constitutionality of literacy tests hasbeen upheld, their operation has frequently been suspended by congressionalaction.

2) The right to be a candidate

The right to be a candidate and have one's name on the ballot is subject to moresubstantial governmental restrictions than the right to vote. The state may imposedurational residency requirements, filing fees, and petitions signed by substantialnumbers of voters. However, the Court will scrutinize the burdens and hold themunconstitutional if they unreasonably restrict ballot access.


3) The right to fair representation

A voter has a fundamental right to have his vote count as much as that of anyother voter in the election of a legislative or governmental body. Legislativedistricts in both the House of Representatives and in the state legislature musttherefore be uniform in size. A higher degree of mathematical precision isrequired in congressional districting, however, than for state elections. The "oneperson, one vote" principle applies to municipal elections, but not to the electionof executives, to special purpose districts, or to purely administrative bodies.Flagrant racial or political party gerrymandering will be found unconstitutional.Multi-member districts are constitutional so long as they are not designed toreduce minority representation.

States lack the power to increase the qualifications for Congress set forth in theConstitution and therefore could not impose term limits on senators andrepresentatives elected as part of the state's congressional delegation.

b. Other fundamental interests

Because the right to travel is fundamental, discrimination in the payment of welfarebenefits on the basis of length of residency is unconstitutional. In criminal cases, thestate must afford the indigent defendant counsel for at least one appeal, and a freetranscript for that appeal. It may not imprison a defendant for failure to pay a fine.The right to marry is also a fundamental interest.

2. Nonfundamental Interests

Under ordinary or lower-tier equal protection standards, the Court will not substitute itsjudgment for that of the legislature. The legislature may fail to include in a class thosewho should logically be in, and include those who should logically be left out.Mathematical certainty is not required, and some unfairness will be tolerated so long asthe classification is reasonable.

a. Economic regulation

Economic regulation is judged by the rational purpose test, and is rarely heldunconstitutional under the Equal Protection Clause.

b. Social welfare legislation

When no fundamental interest is affected, the Court has applied the rational basis testto governmental benefits.

3. Suspect Classifications

a. Race

A classification by race, even if it treats all races equally, is suspect and will not besustained in the absence of a compelling state interest. Schools classified by raceunder state law must be desegregated immediately. The Court will devise adesegregation plan using general equitable powers if the school board fails to do so.Once a racially neutral plan is in place, the plan need not be altered to meet changing


housing patterns. School districts that have segregated schools because of segregatedhousing patterns are not in violation of the Constitution unless a discriminatorypurpose can be found. If part of a school district is deliberately segregated, there is apresumption of unlawful purpose in the rest of the school district. A desegregationremedy cannot include districts beyond those engaged in unlawful segregation. Whenrace is used as a criterion for governmental action, it must meet the strict scrutinystandard and will not be upheld unless the remedy is closely tailored to remedy theeffects of past discriminations.

b. Alienage

Discrimination against aliens is permitted by the federal government under its powerto further foreign policy, and by state governments to prevent aliens from entering thegovernmental process and those non elective government jobs which formulate orexecute public policy. However, a state may not discriminate against aliens withrespect to education, public welfare, or the right to earn a livelihood or engage in the"learned professions." Discrimination against illegal aliens in these matters is subjectto an intermediate level of review.

c. Quasi-suspect categories

An intermediate standard of review is applied when the legislature uses sex orlegitimacy as a classification. Under this standard the governmental objective mustfurther important governmental purposes, there must be a close relationship betweenthe classification and its purposes, the legislature must specify the valid objectiveswhich it is trying to further, and the legislature must tailor the classification to achievethe objective.

1) Illegitimacy

Illegitimacy is not a truly suspect classification, but the state interest in promotingmorality or the unity of the traditional family is not sufficient to justifydiscrimination against illegitimate children. Statutes denying illegitimateoffspring rights to Workers' Compensation benefits, wrongful death benefits, andintestacy benefits when the parent child relationship is readily proven have beenheld unconstitutional. However, a state may distinguish among different classesof illegitimate offspring based on whether paternity was acknowledged oradjudicated to promote the orderly disposition of an estate.

2) Gender

Discrimination on the basis of sex is valid if it serves important governmentalpurposes, and is substantially related to those purposes. Classifications basedupon the notion that a female is to stay in the home and raise children are invalid,but those classifications designed to remedy past discrimination have been upheld.

4. Nonsuspect Categories

Poverty, age, and mental retardation are not suspect categories.


D. PRIVILEGES AND IMMUNITIES CLAUSES

1. Under The Fourteenth Amendment

The Fourteenth Amendment Privileges and Immunities Clause only protects matterswhich are incidents of national citizenship, such as the right to travel from state to state,to vote in national elections, and to petition Congress.

2. Under Article IV, §2 — The Comity Clause

The Comity Clause protects a citizen of one state from discrimination on that basis inanother state in fundamental matters. To justify discrimination on a fundamental issue,the state must show a substantial relationship between the discrimination against thenonresidents and the problems caused by them.

E. THE OBLIGATION OF CONTRACTS, BILLS OF ATTAINDER, AND EXPOST FACTO LAWS

1. Obligation Of Contracts

While the Constitution flatly prohibits states from impairing the obligation of contract,the Court has permitted states to construe contracts very narrowly in favor of thegovernment, and has permitted legislation to affect the remedy for breach of contract solong as there is some means of vindicating the right. States may impair the obligations ofcontracts if there is a valid police power reason. However, a more stringent standard isapplied when a state attempts to avoid the obligation of a contract to which it is a party.Such an impairment will be upheld only if less drastic means were not available, and thereason for the impairment was not foreseen at the time of the contract. A state statuteimposing substantial burdens on one contracting party that is enacted for the benefit of anarrow group will also violate the Contract Clause.

2. Bills Of Attainder

States and the federal government are forbidden to pass a bill of attainder, Article 1, §§9and 10. A bill of attainder covers legislative acts which applies either to namedindividuals or to easily ascertainable members of a group in such a way as to inflictpunishment on them without a judicial trial. Legislation prohibiting specific governmentemployees from being paid constitutes an unconstitutional bill of attainder. Legislativepunishment also includes legislation whose purpose is deterrent or preventative. Generalregulations that do not target specific individuals, however, are not within theconstitutional ban.

3. Ex Post Facto Laws

Article 1, §§9 and 10 of the Constitution prevent both the federal government and thestates from passing an ex post facto law — that is, a law which has a retroactive punitiveeffect. A law is an ex post facto law if it (1) creates a new crime or alters the definition ofan existing crime so that an act which was not criminal at the time the statute was enactedis made criminal, 2) redefines a crime so that an act which was criminal at the time theact was passed is made a more serious crime, 3) increases the punishment for an actwhich was a crime at the time the act was passed, or 4) changes the rules of evidence


which permits a conviction for an existing crime on lesser evidence than was required atthe time the act was committed.

The ex post facto prohibition applies to criminal conduct only. Any punishment in theform of imprisonment or a criminal fine would constitute punishment for criminalconduct. However, a statute that retroactively provides that a felony convictiondisqualifies an individual from a professional license or subjects her to deportation doesnot constitute an ex post facto law.

Statutes that increase the penalties for individuals who have had previous convictions andwho commit a crime after the law was enacted do not constitute ex post facto laws eventhought the crimes which serve as the basis to increase the penalty were committed beforethe law increasing the punishment was enacted.

F. FIRST AMENDMENT FREEDOMS

1. Freedom Of Religion And Separation Of Church And State

There are two different prohibitions on the power of Congress with respect to religioncontained in the First Amendment and carried over to the states through the FourteenthAmendment.

The Establishment Clause focuses upon government aid to religion and whether such aidpromotes particular religious beliefs. The Free Exercise Clause prohibits governmentalencroachment on an individual's religious freedom.

a. The Establishment Clause

The present tests to determine if governmental activity is constitutional under theEstablishment Clause, all of which must be satisfied, are:

(1) Does the activity reflect a secular legislative purpose?

(2) Does it have a primary effect that neither advances nor inhibits religion?

(3) Does it avoid excessive entanglement between church and state?

Under the above tests, the loan of textbooks to parochial school pupils, collegedormitory construction, and Sunday closing laws have been upheld, but prayers inpublic schools, payment of the teachers' salaries, and tax credits only available toparents of parochial school children have been held unconstitutional.

b. Free exercise of religion

1) Freedom of thought or belief

The state does not have the power to regulate or prescribe manifestations ofthought or belief.

2) Regulation of activity based upon belief

The state must justify regulation of activity based upon religious belief by acompelling state need. However, if religious belief engenders activity harmful tosociety, regulation of such conduct will be permitted. The time, place, and


manner of religious activity can be regulated by narrowly drawn statutes that donot discriminate on the basis of religious belief.

While the state has an interest in compulsory education for children, it cannotrequire a public school education, nor require education beyond the eighth gradeif, for example, the agrarian lifestyle of a religious community would renderadditional education detrimental in the eyes of that religious community. Door-to-door solicitation to publicize religious beliefs and the incidental sale ofreligious literature are also constitutionally protected activities. While Congressneed not exempt religious objectors from the draft, the state cannot inquire intothe reasonableness of those beliefs if they are made a ground for exemption; onlythe sincerity of the belief may be challenged.

3) Judicial resolution of church disputes

Courts may not decide ecclesiastical questions to resolve secular disputesconcerning internal church management or church property.

2. Freedom Of Expression And Association

The First Amendment provides in part that "Congress shall make no law abridging thefreedom of speech or of the press; or the right of the people peaceably to assemble and topetition the government for a redress of grievances." The guarantees of the FirstAmendment are protected from abridgment by the states by the Fourteenth Amendment.

Speech is protected by the Court because uninhibited speech is essential to the politicalprocess, because truth is more likely to emerge if all ideas may be freely expressed, andbecause free speech is an end in itself in a civilized society.

a. Regulation of the communicative aspects of expression

1) What constitutes speech?

In many cases, speech is exercised in conjunction with action. If that action isprimarily a form of communication (a substitute for words, such as wearing ablack armband), it will be considered symbolic speech. If the action is coercive,such as picketing to prevent ingress and egress, the state power to regulate thespeech coupled with action is significantly greater than it is to regulate purespeech. Even though the action is intended to be symbolic speech, it can beregulated to protect valid governmental policy divorced from the content of thesymbolic expression itself.

2) What constitutes regulation of content?

If the government classifies speech according to its content, requires individualsto promulgate speech, or places a dollar limitation on the amount to be spent toproliferate speech in a political campaign, it is regulating speech by content.


3) Content regulation of protected speech must be justified by compellingstate interest

Regulation of speech by content is generally invalid unless: (1) the state can showa compelling need closely related to the regulation, or (2) the speech can beshown to be beyond the protection of the First Amendment or entitled only tomarginal protection.

(a) Clear and present danger

Speech in the political sphere can be regulated only when the speech creates a"clear and present danger" of the evils that the state has a duty to prevent.Congress cannot regulate the content of speech when the speaker isadvocating abstract doctrine, but can regulate speech that advocates illegalaction. In its most recent formulations, the Court has held that before the statecan proscribe the content of speech, it must be directed toward incitingimminent lawless action and must be likely to incite that action. Regulation ofspeech merely because it is likely to provoke a hostile reaction from anunreceptive audience is rarely justified.

The government has an affirmative obligation to protect a speaker before ahostile audience, but can require him to stop speaking if there is a genuinelikelihood of immediate violence.

(b) The administration of justice as a compelling state need

The clear and present danger test has been applied to state laws prohibiting thecriticism of judges. An order by a judge to prevent the press from publishingstatements made by the accused is unconstitutional unless the gravity of theevil, discounted by its improbability, justifies the invasion of free speech.

Although the right of access to criminal trials is not absolute, denial of theright must be necessitated by a compelling governmental interest and must benarrowly tailored to serve that interest.

The First Amendment does not create a privilege in news reporters to refuse todisclose the source of their information in the course of a legitimate, goodfaith grand jury investigation.

The state may not prohibit a witness from divulging her own grand jurytestimony after the grand jury proceedings are concluded when there is nolonger a compelling need to preserve secrecy.

(c) The election process as a compelling state need

A limitation on the total amount a candidate can spend on his own election, oron the amount that an individual might spend on political activities or oncontributions to support a ballot measure, is unconstitutional; however, alimitation on campaign contributions, a restriction on campaigning nearpolling places, and required contribution disclosures serve the important statepurpose of preserving the integrity of the electoral process.


b. Regulation of the time, place, and manner of speech

The government has substantially greater latitude in regulating the time, place, andmanner of speech than in regulation of its content. The interests to be balanced arethe state's requirement of public peace and the orderly flow of transportation and themethod used to regulate speech, versus the means and location used by the individualto promulgate the speech.

1) The nature of the forum

(a) Public forum

If a speaker desires to communicate in a public forum, the state cannotcompletely prevent such speech on the ground that an alternative forum isavailable. Public parks and streets are areas traditionally used to expressviews, and only a narrow type of restriction on speech is permitted.

(b) Semipublic or private forum

The use of property open to the public, but which is not traditionally used forspeech related activities, such as schools, libraries, and courthouses, can beregulated to prevent the speech from interfering with their governmentalfunctions. Jails, private government offices, and military bases are closedareas where the government need not grant access or free speech rights.Private property that is not within the state action concept can be regulated bythe owners without regard for the rights of others to speak.

2) The interests of privacy and tranquillity as limitations on the time, place,and manner of speech

The government has the right to limit the use of loudspeakers in residential areasunder narrowly drawn statutes, but cannot completely ban door-to-doorsolicitation. A statute requiring a mailer to remove an addressee's name from amailing list is constitutional. However, passengers in a public bus have noconstitutional right to prevent the broadcast of unwanted commercials.

3) Licensing as a control of the time, place, and manner of speech

A licensing statute controlling speech that confers excessive discretion on a publicofficial is overbroad and invalid on its face. Licensing statutes cannotdiscriminate on the basis of the content of speech. If the statute is impermissiblyoverbroad or vague, failure to apply for a license does not prevent a challenge tothe constitutionality of the statute; however, one must apply for a license under anarrowly drawn statute before a defense that the statute is unconstitutional asapplied will be sustained. One cannot successfully challenge the constitutionalityof a statute in a prosecution for contempt for violation of an injunction broughtpursuant to that statute.

4) Regulation of the media

While the state may not require that a newspaper give individuals a right topublish in that paper, it may require the electronic media to give persons whom it


attacks a right to reply. The difference in result is because there is a finite supplyof radio and television frequencies. However, there is no constitutional right topurchase air-time to promulgate a message. Because of the ability of radiobroadcasts to intrude into the home and be heard by the young, the governmentcan prohibit material that is offensive but not obscene from being broadcastduring daytime or early evening hours.

c. Regulation of unprotected speech

Traditional First Amendment analysis classifies certain categories of speech asunprotected by the First Amendment and subject to any rational regulation. Thisconcept has eroded so that almost all content-related regulation of speech must berelated to an important governmental purpose.

1) Obscenity

If speech is found obscene, it is not entitled to First Amendment protection. To beobscene, the challenged material:

a. must appeal to the prurient interest of an average person applyingcontemporary community standards;

b. must depict or describe sexual conduct in a patently offensive way; and

c. must, taken as a whole, lack serious literary, artistic, political, or scientificvalue.

A jury will decide each of these matters as a question of fact, but will not haveunbridled discretion. Immorality, sexual expletives, and nudity by itself are notnecessarily obscene.

An individual can be convicted for advertising in a manner designed to appeal tothe prurient interest, even though the material itself is not obscene.

The right to privately possess material depicting or describing adults engaged inobscene acts is constitutionally protected, but the right to show it to consentingadults or to sell it is not. Private possession of child pornography may beprohibited. The state also has greater rights to regulate the content of sexualmaterial exhibited to minors than it does to consenting adults.

Before the state can seize allegedly obscene material, there must be authorizationfor seizure by a judicial officer that specifically identifies the material to beseized, so that the officer has little or no discretion to determine what materialshall be seized.

The Court has permitted content regulation of adult motion pictures and nudedancing which were not obscene, in a manner similar to time, place, and mannerregulations.

Child pornography is unprotected by the First Amendment. States have greaterleeway in regulating child pornography because of its harm to the children


involved and because its value is de minimis. Such pornography need not beobscene under the Miller standard to be regulated.

2) Other unprotected speech, fighting words, and offensive speech

Words which by their very utterance tend to incite an immediate breach of thepeace are not protected by the First Amendment. However, a speaker cannot bepunished for words that are offensive but do not tend to invoke an immediatebreach of the peace.

d. Regulation of commercial speech

Corporations and other business associations are entitled to the protection of the FirstAmendment when speaking on issues of political or public interest. However,"commercial speech" does not enjoy the same amount of First Amendment protectionof content as that enjoyed by other forms of speech. It is subject to reasonableregulation for the protection of consumers and other legitimate governmentalinterests, but the outright prohibition of advertising in the professions and priceadvertising on drugs has been held unconstitutional.

e. Regulation of or imposition upon public employment, licenses, or benefitsbased upon exercise of expressive or associational right

1) Public employment

The government may not condition public employment upon the waiver of FirstAmendment rights. It may deny employment based upon membership in anassociation only if an individual is an active member of a subversive association,knows the illegal ends of the organization, and has a specific intent to furtherthose ends. If an oath is a requirement for public employment, it must be clear,concise, and narrow in scope, or must merely pledge allegiance to constitutionalprocesses. A prospective employee cannot be required to take an oath concerningpast conduct in joining an organization, unless the oath specifies that it wasknowing membership with specific intent to further illegal purposes. Theemployee may not be dismissed for a claim of Fifth Amendment rights. However,if she is given immunity and still persists in claiming the privilege against self-incrimination, she may be discharged. Information given pursuant to a grant ofimmunity may be used to terminate employment.

2) Admission to the bar

The state has a right to inquire into the character of candidates for admission tothe bar, but may not deny admission for political association unless the candidateknowingly belonged to a subversive organization with a specific intent to furtherits ends. The state may ask a bar candidate questions concerning his knowingmembership in subversive organizations, even though he did not have specificintent to further the purposes of those associations.


f. Freedom of association

The First Amendment protects the right to join with others in the exercise of FirstAmendment rights. Mere membership in an organization cannot be made criminal.When disclosure of membership would destroy the right of association, the Court haslimited the right of the government to obtain membership lists.

The freedom of association includes a right not to associate with certain types ofpersons. An organization may exclude selected groups if the organization isrelatively small, the purpose of the organization is exclusive, and nonmembers cannotparticipate in critical activities of the association.

g. Regulation of defamation and invasion of privacy

1) Public officials and public figures

The First Amendment only applies to defamation in the form of libel againstmedia defendants. State law governs libel and slander actions against privateindividuals. New York Times v. Sullivan holds that for a "public figure" to prevailagainst a media defendant, he must show that the falsehood was published eitherwith knowledge that it was false or with reckless disregard for whether it wasfalse. Public figures are either public officials or persons who have achievedsubstantial fame or notoriety (public figures in all contexts), or persons who injectthemselves into a public controversy (public figure only with respect to thatcontroversy). Once a public figure satisfies the New York Times test by proving"malice," he may collect any damages allowed under state law, including punitivedamages.

2) Private figures

Libel suits by private figures on matters of public concern are governed by Gertzv. Robert Welch. The plaintiff may not recover on strict liability, and in mostcases must prove negligence. She may recover only actual damages (special orout-of-pocket losses, plus loss of reputation, humiliation, and mental suffering).She may not recover punitive damages without proof of malice. If the defamationdoes not involve matters of public concern, however, a private figure can recoverpresumed or punitive damages without proof of actual malice.

h. Procedural problems peculiar to the first amendment

1) Prior restraint

If the government restrains speech prior to the time it is published, thegovernment regulation will undergo more searching scrutiny than if the speech ispunished after it has taken place. Any system of prior restraint of expressioncomes before the Court with a heavy presumption against its constitutionalvalidity.

2) "Overbreadth"

A statute will violate the First Amendment if, in its attempt to regulate speech in apermissible manner, it also regulates protected speech. This overbreadth concept


will permit an attack upon a statute on its face rather than as it applies to theparticular litigant, because a statute restricting speech that is overbroad has achilling effect upon the attempt to exercise First Amendment freedoms. TheBurger Court restricted the scope of the overbreadth doctrine by holding that anoverbreadth attack on a statute regulating conduct as well as speech would onlyprevail when the overbreadth was substantial, and when the statute could not benarrowed by construction. The reason a defendant is able to raise the defense ofanother party to a statute is that the person whose First Amendment rights areaffected by an overly broad statute is unlikely to litigate the matter himself. Theoverbreadth doctrine does not apply to commercial speech.

3) "Vagueness"

A statute can be challenged for vagueness if it does not specify in precise termsthe activity that is forbidden. Vagueness differs from overbreadth as follows: astatute is vague when it does not precisely define an activity that is prohibited,whereas an overly broad statute prohibits activity which is protected by the FirstAmendment. An individual does not have the right to raise the argument that astatement is vague with respect to a third party but not to herself. A hard coreviolator to whom the statute is not vague cannot raise a vagueness defense. Acourt can construe a statute so that its scope is precise, and subsequent litigantswill not be successful in a challenge on the ground of vagueness.


BAR EXAM ALERTS AT-A-GLANCE

CONSTITUTIONAL LAW

I. THE NATURE OF JUDICIAL REVIEW

A. ORGANIZATION AND RELATIONSHIP OF STATE AND FEDERALCOURTS IN THE FEDERAL SYSTEM

1. FEDERAL COURT JURISDICTION

■ A federal court has discretion to abstain from deciding an issue of state law ifa decision by a state court on the state issue might obviate the need for adecision on a federal constitutional issue.

■ A federal court will abstain from a case asking for an injunction against theenforcement of a state criminal statute if a prosecution under that statute hascommenced.

2. STATE COURT JURISDICTION

■ Congress can require state courts to hear causes of action based upon federalstatutes.

■ State governments or agencies are not citizens of a state for the purpose offederal diversity jurisdiction.

■ A private citizen cannot sue a state in a federal court.

■ A private citizen can challenge the constitutionality of a state statute in afederal court by suing a state officer to enjoin the enforcement of the statuteon the ground that it is unconstitutional.

■ Political subdivisions of a state can be sued by citizens in federal courtbecause they do not enjoy the protection afforded a state under the EleventhAmendment.

B. SUPREME COURT JURISDICTION

■ A state has the right to sue another state in the United States Supreme Court onbehalf of its citizens on claims affecting a multiplicity of citizens (the parenspatriae doctrine).

2 MicroMash MBE In Brief: Constitutional Law Bar Exam Alerts

■ There is no direct right of appeal to the Supreme Court from a federal districtcourt decision holding an act of Congress unconstitutional.

C. CONGRESSIONAL POWER TO DEFINE AND LIMIT JURISDICTION

■ Congress has control of the jurisdiction of the federal courts and can establish orabolish lower federal courts.

■ Congress cannot alter the jurisdiction of the Supreme Court in such a way as tointerfere with the Court's essential function of preserving constitutional order.

■ Congress cannot interfere with inherent judicial functions in courts it has created.

■ Congress can set up courts pursuant to its powers under Article I of theConstitution. Judges of such courts are not constitutionally entitled to lifetenure.

■ Due process requires that there must ultimately be a right of appeal to an ArticleIII court from the decision of an Article I court or an administrative body.

D. JUDICIAL REVIEW

1. STANDING

■ A person has standing by virtue of being a taxpayer only to challengelegislation authorizing expenditures on the basis that those expenditurescontravene specific constitutional limitations on the spending power. Theonly specific constitutional limitation on the spending power ever found hasbeen through the Establishment Clause of the First Amendment.

■ A mere philosophical, ethical, or intellectual interest in the outcome of a caseis not sufficient to qualify for standing.

■ Standing exists in a party that has a close relationship to the party actuallyinjured if the injured party is unlikely to successfully assert its rights.

2. MOOTNESS AND RIPENESS

■ A case will not be dismissed for mootness if the issue is capable of repetitionand will consistently evade review.

■ A case will be dismissed as not ripe if events that will raise material issues inthe case have not yet occurred.

3. POLITICAL QUESTIONS AND JUSTICIABILITY

• Only the president has the right to appoint officers of the United States, andan attempted appointment by Congress or by members thereof isunconstitutional.

• The Supreme Court has the right under the Constitution to decide whichbranch of government is vested with final authority to decide a particularmatter.

MicroMash MBE In Brief: Constitutional Law Bar Exam Alerts 3

■ While the Senate has the right to advise and consent on presidentialappointments, it does not have the right to advise and consent when thepresident removes officers of the executive branch.

■ Under the political question doctrine, the United States Supreme Court willnot review an issue on the merits if it determines that the Constitution placesfinal authority to resolve the issue in another branch of government.

4. SUPREME COURT REVIEW OF STATE COURT DECISIONS

■ If a case has been decided by a state court on an independent state ground,there is no jurisdiction for Supreme Court review, even if the state courtdecides a federal issue in the case that is not essential to the decision. If, onthe other hand, the state court decides a state issue on the basis of federaldecisions on the same point, then the state ground is not independent andthere is a basis for Supreme Court review.

■ There is no right to appeal a state court advisory opinion to the United StatesSupreme Court, even if it involves federal constitutional issues, because thereis no case or controversy as required by the United States Constitution forfederal court jurisdiction.

5. CONSTITUTIONAL LITIGATION

■ If constitutional litigation involves the strict-scrutiny tier of equal protection,the denial of substantive due process rights that are highly protected, or thedeprivation of the right of free speech or of freedom of religion, the statemust show: (1) a compelling state need and (2) that no less burdensomemethod would achieve that objective.

■ If constitutional litigation involves sexual discrimination, the state must showthat the classification has an important governmental objective and issubstantially related to achieving those objectives.

■ If constitutional litigation involves matters other than those described above,the plaintiff must prove that the legislation lacked a rational basis.

■ The state never has the burden when only lack of rational basis must beshown, and the plaintiff never has the burden when highly protected rightsare involved.


II. SEPARATION OF POWERS

A. POWERS OF CONGRESS

■ The Supremacy Clause itself is not a source of congressional power.

1. COMMERCE POWER

■ Congress may exercise the commerce power to regulate purely local activitiesthat have a substantial effect on interstate commerce.

■ Congress may exercise the commerce power to regulate the conduct ofprivate individuals with respect to racial discrimination (even though suchprivate action could not be regulated by legislation under the FourteenthAmendment) so long as the individual's conduct affects interstate commerce.

■ Congress may delegate rulemaking power to an administrative agency, butcannot reserve to itself the right to change such rules by anything short oflegislation adopted by the full constitutional process.

2. TAXING AND SPENDING POWERS

■ Through Congress' power to condition expenditures on compliance with itsstandards, Congress can persuade the states and individuals to adoptmeasures that it could not directly require through legislation.

■ While Congress can tax and spend for the general welfare, the GeneralWelfare Clause is not a source of congressional regulatory power.

■ Congress can achieve a regulatory effect through a taxing statute as long asthe statute has a revenue-raising purpose.

3. POWER OVER FEDERAL PROPERTY

■ The property power, not the commerce power, is the best source ofcongressional authority to regulate or dispose of property owned by theUnited States.

■ Congress holds all of the regulatory power of territories that would bepossessed by the state legislature if the territory were a state.

■ Judges appointed to serve in the territories are not entitled to lifetime tenure.

4. POWER TO ENFORCE THE THIRTEENTH, FOURTEENTH, ANDFIFTEENTH AMENDMENTS

■ Congress has power under the Thirteenth Amendment to affect individualconduct, but only to eradicate slavery or the effects of slavery. Pursuant tothat authority, it has the power to regulate the manner in which black peopleare treated.


■ Congress has power under the Fourteenth Amendment only to reach stateaction (or action accomplished under the color of state law) that abrogatesthe rights guaranteed by that amendment.

• Congress has power under the Fifteenth Amendment to directly regulatevoting procedures in the states for the purpose of eradicating procedures thataffect the rights of minorities to vote or to have their vote counted.

5. INVESTIGATORY POWER

■ Congress has the power to investigate and subpoena witnesses for thepurpose of obtaining information with respect to potential legislation that itmight pass.

■ An individual can successfully defend against a contempt-of-Congress chargefor failing to answer a question from a congressional committee only if thewitness can show that the subject matter of the questioning was beyond thepower of Congress to pass potential legislation or beyond the scope of thepower delegated by Congress to that committee.

B. POWERS OF THE PRESIDENT

■ The president is obligated to carry out legislation mandating that the presidentact in a specific manner.

■ The pardon power only extends to federal crimes.

■ Executive privilege is absolute with respect to defense and foreign policymatters. Confidential communications between the president and advisors in allother areas are presumptively privileged; disclosure can be required only when aspecific communication is subpoenaed and a substantial governmental interestoutweighs the president's interest in nondisclosure.

III. THE RELATION OF THE NATION AND THE STATES

A. INTERGOVERNMENTAL IMMUNITIES

■ Absent congressional intention to the contrary, states can tax buildings leased bythe federal government and contractors doing business with the federalgovernment, as long as such tax is not discriminatory.

■ The federal government has the right to tax and regulate the instrumentalitiesand employees of state government.

B. AUTHORITY RESERVED TO THE STATES

■ A state has the right to regulate interstate commerce as long as it does notcontravene an express federal policy, does not discriminate against interstatecommerce, and does not unduly burden interstate commerce.


■ In determining the validity of a state action that burdens interstate commerce,the court will consider whether the state used the least restrictive means toachieve a legitimate state objective.

■ A state regulatory statute that discriminates in favor of local commerce andagainst out-of-state commerce is unconstitutional because of the negativeimplications of the Commerce Clause.

■ The negative implications of the Commerce Clause prevent a state from requiringthat a resource of the state be sold to in-state customers only.

■ The negative implications of the Commerce Clause prevent a state fromexcluding trash from a sister state if its landfills accept in-state trash.

■ A state acting in a proprietary rather than a regulatory capacity may discriminatein favor of local business and against interstate commerce.

■ The police power is a source of state power, not a source of congressionalpower.

C. NATIONAL POWER TO OVERRIDE STATE AUTHORITY

■ Congress has the right to expressly authorize a state to burden commerce ordiscriminate in favor of local commerce, even if the Supreme Court has held suchburden or discrimination unconstitutional under the negative implications of theCommerce Clause.

IV. INDIVIDUAL RIGHTS

A. STATE ACTION AND THE ROLE OF THE COURTS

■ The Supremacy Clause is the source of constitutional power for a court to holdstate statutes and decisions unconstitutional because they conflict with theConstitution, laws, or treaties of the United States or acts done in furtherance ofthem.

■ If Congress has provided a comprehensive scheme of regulation in an area,Congress may be said to have occupied the field and any state regulation (evenif complementary to the federal legislation) will be preempted, unless Congress'intent was to allow state regulation. Congress has the ability to permit states tooperate in areas where it has legislated.

■ States may not enact any legislation that affects foreign policy, because foreignpolicy is the exclusive province of the federal government.

■ State legislation or decisions that are contrary to a federal policy expressed in anexecutive agreement are invalid.


■ A state or municipal law in conflict with a federal regulation dealing withstandards applicable to federal offices is invalid because of the SupremacyClause.

■ The activity of a state in regulating or taxing an activity does not render theactivity itself "state action" subject to Fourteenth Amendment scrutiny.

■ The action of any political subdivision of a state constitutes state action.

■ The activities of an entity in which the state has a partnership interest constitutestate action.

B. SUBSTANTIVE DUE PROCESS

■ When called upon in a multiple-choice question to consider all argumentsattacking the constitutionality of a statute, the argument that it violatessubstantive due process should be considered, especially if it can be shown thatthe statute operates in an arbitrary and unreasonable manner, and that it isdifficult or impossible to find a legitimate reason for the legislature to pass such astatute.

■ An economic regulation violates the substantive strand of the Due Process Clauseif there is no rational basis for it.

■ Substantive due process prohibits states from limiting fundamental privacyinterests, absent a showing of a compelling state need. The right to usecontraceptives and the right of an extended family to live together are examplesof such interests.

■ A state activity is no more likely to withstand constitutional challenge because itis part of the state constitution or enacted by referendum.

C. PROCEDURAL DUE PROCESS

■ Procedural due process is required only if the action of the decision-makerconstitutes state action.

■ An individual has a property interest in continued employment if the individualhas an employment contract or tenure.

■ The factors in determining what process is "due" are the type of interestinfringed, the likelihood of an erroneous decision, and the burden on thegovernment in providing process.

■ The minimum necessary to satisfy due process is notice and an opportunity to beheard.

■ Criminal statutes violate due process if they are so vague that they do not informa citizen of the conduct deemed criminal. A judicial construction of the statutecan cure the vagueness with respect to future violators, but not with respect toany person charged before the decision was rendered.


D. EQUAL PROTECTION

■ The Equal Protection Clause is contained in the Fourteenth Amendment and doesnot apply to the federal government. However, the principles of equal protectionare applied to the federal government through the Due Process Clause of theFifth Amendment.

■ The "one man, one vote" rule applies to municipal legislative bodies.

■ The state may impose limited residency requirements (e.g., two months) on theright to vote to assure that voters are bona fide residents.

• The state may impose reasonable requirements regarding filing fees, residency,and petition signatures to achieve ballot access.

1. OTHER (NON-FUNDAMENTAL) RIGHTS

■ Economic regulation need only satisfy the rational-basis standard.

■ The right to be free from poverty is not a fundamental right.

2. SUSPECT CLASSIFICATIONS

■ Neither the state nor the federal government can discriminate on the basis ofrace except to further a compelling state need.

■ A regulation or decision that classifies on the basis of race in order to remedyspecific past racial discrimination is valid.

■ A classification based upon a racially neutral principle such as residence,which also indirectly discriminates by race, is not unconstitutional unlessthere is an intention to discriminate by race.

■ The federal government has broad discretion to discriminate on the basis ofalienage in the furtherance of foreign policy. A state cannot discriminate onthe basis of alienage except in elective governmental positions and non-elective governmental jobs that formulate or execute public policy.

3. QUASI-SUSPECT CLASSIFICATIONS

■ Discrimination on the basis of gender is valid only if it serves an importantgovernmental purpose and is substantially related to achieving that purpose.

■ The state cannot deny workers' compensation benefits, wrongful deathbenefits, or intestacy benefits based upon illegitimacy where the parent-childrelationship has been adjudicated or acknowledged, but can make distinctionswhere proof of the relationship is difficult.

E. PRIVILEGES AND IMMUNITIES CLAUSES

■ The Privileges and Immunities Clause of the Fourteenth Amendment applies onlyto the privileges of national citizenship and is rarely if ever a valid reason forholding a statute unconstitutional.


• The Privileges and Immunities Clause of Article IV of the Constitution is analternative analysis where the state discriminates on a matter of fundamentalinterest in favor of its own citizens and against out-of-staters.

F. FIRST AMENDMENT FREEDOMS

1. FREEDOM OF RELIGION AND SEPARATION OF CHURCH ANDSTATEa. THE ESTABLISHMENT CLAUSE

■ State aid to religions is constitutional only if the activity reflects a secularpurpose, it has a primary effect that neither advances nor inhibits religion,and there is no excessive entanglement between church and state.

■ State activity that aids all religions equally can still violate theEstablishment Clause.

■ State laws requiring that religious theory be taught in public schoolsviolate the Establishment Clause.

b. FREE EXERCISE OF RELIGION

■ A state has the right to regulate action based upon religious activity ifthere is a compelling state need.

■ When religious belief is the basis for resisting government rules (e.g.,conscientious-objector status) the courts have a right to examine thesincerity of the belief, but not the belief itself.

■ Courts cannot decide ecclesiastical questions to settle disputes concerningchurch management or property.

2. FREEDOM OF EXPRESSION AND ASSOCIATIONa. REGULATION OF CONTENT OF EXPRESSION

■ Action that is a substitute for words can be protected symbolic speech.Even if action is intended as symbolic speech, however, it can beregulated to protect a legitimate governmental interest divorced from thecontent of the symbolic speech itself (e.g., burning draft cards).

■ All speech is protected speech for purposes of content regulation exceptfighting words, defamatory speech, obscene speech, and to some degree,commercial speech.

■ Neither the state nor the federal government can regulate the content ofprotected speech unless it can show a compelling state need.

■ A compelling state need is present and the state can proscribe the contentof protected speech that is directed toward inciting immediate lawlessaction and is likely to incite that action.


■ Requiring an individual to display a message prescribed by the state is theequivalent of regulating the content of speech.

■ The state has an affirmative obligation to protect a speaker before anaudience, but the speaker can be required to stop speaking if there is agenuine likelihood of immediate violence that the state cannot prevent.

b. REGULATION OF TIME, PLACE, AND MANNER OF EXPRESSION

■ The state cannot completely prohibit the exercise of free speech rights ina public forum such as streets or parks, but can regulate such speechpursuant to narrowly drawn statutes conferring limited discretion onofficials to ban speech at particular times and places and in particularways, as long as the prohibition of speech does not turn on its content.

■ The state has the right to forbid speech near semipublic forums such asschools, libraries, and courthouses to prevent interference withgovernmental functions.

■ The state has the right to prohibit the exercise of free speech rights inplaces closed to the public such as jails, military bases, and privategovernmental offices.

■ Unless the regulation of speech on private property becomes state action(as in the operation of a company town), the owner of private propertycan regulate and prohibit the exercise of speech on that property.

c. OBSCENITY

■ Speech is obscene and subject to complete prohibition if it appeals to theprurient interest of an average person applying contemporary communitystandards, depicts or describes sexual activity in a patently offensive way,and taken as a whole, lacks serious literary, artistic, political, or scientificvalue.

■ Child pornography is totally unprotected speech.

■ Communications portraying nudity or sexual activity can be regulatedconcerning the time, place, and manner of their exhibition even if thecommunication is not pornographic and the regulation is content-based.

d. COMMERCIAL SPEECH

■ Commercial speech can be subject to reasonable governmental regulationfor the protection of consumers and other legitimate governmentalinterests, but outright prohibition of commercial speech isunconstitutional.

e. REGULATION OF PUBLIC EMPLOYEES' SPEECH

■ A public employee's freedom of speech with respect to matters of publicconcern cannot be infringed unless the employer's interest in operating


the public service outweighs the employee's interest in expressing theemployee's political views.

• A public employee who has joined a subversive organization cannot bedismissed from public employment unless the employer can prove that theemployee would have been dismissed even if the employee had notexercised the right of freedom of association by joining the organization.

3. PROCEDURAL PROBLEMS PARTICULAR TO THE FIRSTAMENDMENT

■ If a court has issued an injunction banning the exercise of free speech rights,the constitutional issues raised by the issuance of the injunction cannot belitigated in a contempt prosecution for violation of the injunction.

■ A statute that is overly broad (i.e., prohibits protected speech as well asproperly regulated speech) or vague (i.e., a person of ordinary intelligencecannot distinguish permitted from prohibited activities) is unconstitutional onits face and can be successfully challenged even by those who could beregulated if the statute were clear and narrowly drawn.

■ An individual is entitled to notice and a hearing before an injunction isgranted limiting the time, place, and manner of her expression, unless thereis a genuine emergency justifying an ex parte application.


FUNDAMENTAL CONSTITUTIONAL LAW ISSUES

Many multiple-choice questions in Constitutional Law will list various clauses of theConstitution as the best answer to resolve the question presented. An attempt is made here toreview the pertinent characteristics of such clauses to assist in choosing the best one.

The Fourteenth Amendment can include all of the amendments to the Constitution that areincorporated into it. Therefore, it can be the best answer in a case where the First Amendmentguarantees of freedom of speech or freedom of religion would be more precise.

The Privileges and Immunities Clause of the Fourteenth Amendment was made a dead letterby the Slaughter-House cases, and is almost never the right answer. On the other hand, thePrivileges and Immunities Clause of Article IV prevents states from discriminating againstnonresidents in matters of fundamental interest unless the regulation is specifically targeted at aproblem caused by such nonresidents.

The Commerce Clause is the most important source of congressional power to regulate, but isnot a source of power to cajole states or individuals into acting. The commerce power has beenthe source of congressional power to regulate civil rights.

The dormant-commerce power is also the most significant curb on state economic regulation.

The taxing power can be used for regulatory purposes as long as there is some revenue-raisingpurpose. It is likely to be the best answer if the commerce power is not one of the choicespresented.

The general-welfare power (or spending power) is only a power to spend money, not to regulateactivity. It is the best answer when a result can be achieved only if an individual or statevoluntarily cooperates with the federal government.

The Due Process Clause is the best argument that a statute is unconstitutional only if there is (a)state action and (b) a failure to grant a hearing or a violation of a personal or privacy right.Substantive due process on economic matters is a dead letter.

The Equal Protection Clause will be the best answer where state action is present, and the stateis interfering with a fundamental interest, such as the right to travel, vote, or marry, or theclassification is made by race, alienage, illegitimacy, or sex.

The Thirteenth Amendment and the powers of Congress under it is likely to be the right answerwhen the discrimination is by private individuals where activity cannot qualify as state action.

The Contract Clause has been revitalized in cases where the state is abrogating a contract towhich it is a party.

The police power is an answer that will justify only state as opposed to federal governmentalaction.

The Supremacy Clause is not the best answer unless there is a congressional statute or aconstitutional provision that is in conflict with a state activity. The Supremacy Clause is not apower of Congress.

1

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MBE IN BRIEF

CONTRACTS

Table of Contents

I. FORMATION OF CONTRACTS 1

A. MUTUAL ASSENT 1

1. Offer And Acceptance 1

2. Excuse 4

3. Problems Of Communication And Battle Of The Forms 7

4. Indefiniteness Or Absence Of Terms 9

B. CAPACITY TO CONTRACT 9

1. Infancy 9

2. Mental Illness 10

3. Intoxication 10

4. Guardianship 10

5. Corporate Incapacity 10

C. ILLEGALITY, UNCONSCIONABILITY, AND PUBLIC POLICY 10

1. Illegality 10

2. Unconscionability 11

3. Public Policy 12

D. IMPLIED -IN-FACT CONTRACTS AND QUASI CONTRACTS 12

1. Implied-In-Fact Contracts 12

2. Quasi Contracts 12

E. PRE-CONTRACT OBLIGATIONS BASED UPON DETRIMENTALRELIANCE 13

F. EXPRESS AND IMPLIED WARRANTIES IN SALE-OF-GOODSCONTRACTS 14

1. Express Warranty 14

2. Warranty Of Merchantability 14

3. Warranty Of Fitness For A Particular Purpose 14

II. CONSIDERATION AND ITS SUBSTITUTES 14

A. BASIC CONCEPT 14

B. LEGAL DETRIMENT 14

1. Adequacy Of Consideration 15

2. Pre-Existing Duty Rule 15

3. Modification Of Contract 15

4. Compromise Of Claims 15

5. Illusory Promises 16

C. BARGAIN ASPECT OF CONSIDERATION AND PROMISSORYESTOPPEL 16

1. "Gift" vs. "Bargain" vs. "Reliance" 16

2. Charitable Subscriptions 16

3. Past Or Moral Consideration 17

4. Debts Barred By The Statute Of Limitations 17

5. Quasi-Contractual Recovery 17

III. THIRD-PARTY BENEFICIARY CONTRACTS 17

A. IN GENERAL 17

B. DEFINITIONS 17

C. VESTING OF BENEFICIARY'S RIGHTS 18

D. DEFENSES 18

IV. ASSIGNMENT AND DELEGATION 18

A. IN GENERAL 18

B. ASSIGNMENT OF RIGHTS 18

1. When Allowed 18

2. Requirements 19

3. Rights Of The Assignee 19

C. DELEGATION 19

V. STATUTE OF FRAUDS 19

A. GENERALLY 19

B. MEMORANDUM 19

C. TYPES OF CONTRACTS WITHIN THE STATUTE OF FRAUDS 20

1. Land Contracts 20

2. Sale Of Goods 20

3. One-Year Provision 21

4. Suretyship Provision 21

5. Executor-Administrator Provision 21

6. Marriage Provision 21

VI. PAROL EVIDENCE 22

A. INTENT OF THE PARTIES 22

B. OPERATION OF THE RULE 22

VII. CONDITIONS 23

A. EXPRESS CONDITIONS 23

1. Creation Of Condition 23

2. Burden Of Proof On Performance 23

3. Satisfaction 23

4. Architect's Certificate 24

B. CONSTRUCTIVE 24

1. Constructive Conditions Of Exchange 24

2. Partial Performance

3. Strict Performance By Seller Under The U.C.C. 25

4. Buyer's Obligations 26

5. Divisible Or Installment Contracts 26

C. IMPLIED DUTIES OF GOOD FAITH AND FAIR DEALING 27

D. SUSPENSION OR EXCUSE OF CONDITIONS BY WAIVER,ELECTION, OR ESTOPPEL 27

1. Waiver 27

2. Election 27

3. Estoppel 28

E. PROSPECTIVE INABILITY TO PERFORM, EFFECT ON OTHERPARTY 28

1. Seller's Remedies Under The U.C.C. 28

2. Stoppage In Transit 28

iii

VIII. REMEDIES 29

A. TOTAL AND PARTIAL BREACH OF CONTRACT 29

1. Buyer's Remedies Under The U.C.C. For Breach Of Contract By TheSeller 29

2. Seller's Remedies Under The U.C.C. For Breach by Buyer 30

B. ANTICIPATORY BREACH 32

1. At Common Law 32

2. Anticipatory Repudiation Under The Uniform Commercial Code 32

C. ELECTION OF SUBSTANTIVE RIGHTS AND REMEDIES 33

1. Multiple Recoveries Not Permitted 33

2. When Does Election Occur 33

3. Election Of Remedies Under The Uniform Commercial Code 34

D. SPECIFIC PERFORMANCE, INJUNCTION AGAINST BREACH,DECLARATORY JUDGMENT 34

1. In General 34

2. Factors Considered 34

3. Real Property 34

4. Limitations On Court's Powers To Order Specific Performance 34

5. Specific Performance Under The U.C.0 35

6. Declaratory Judgment 35

E. RESCISSION AND REFORMATION 35

1. Rescission 35

2. Reformation 36

F. MEASURE OF DAMAGES IN MAJOR TYPES OF CONTRACTAND BREACH 36

1. Expectancy Damages 36

2. Nominal Damages 37

G. CONSEQUENTIAL DAMAGES, CAUSATION, CERTAINTY, ANDFORESEEABILITY 37

1. Consequential Damages 37

2. Causation 37

3. Certainty 38

4. Foreseeability And The Rule Of Hadley v. Baxendale 38

H. LIQUIDATED DAMAGES AND PENALTIES 39

iv

I.

J.

K.

L.

RESTITUTION AND RELIANCE RECOVERIES

1. Restitutionary Damages

2. Reliance Damages

REMEDIAL RIGHTS OF DEFAULTING PARTIES

AVOIDABLE CONSEQUENCES

UNIFORM COMMERCIAL CODE ISSUES

39

39

39

39

39

40

1. Risk Of Loss 40

2. Insurable Interest 40

3. Title And Good-Faith Purchasers 41

IX. IMPOSSIBILITY OF PERFORMANCE 41

A. IMPOSSIBILITY 41

B. IMPRACTICABILITY OF PERFORMANCE 41

1. Total Impracticability 41

2. Partial Impracticability 42

C. FRUSTRATION OF PURPOSE 42

X. DISCHARGE 42

CONTRACTS

I. FORMATION OF CONTRACTS

A. MUTUAL ASSENT

1. Offer And Acceptance

a. Offer

An offer is a communication that gives to the recipient of the communication thepower to conclude a contract by accepting. A statement is an offer only if the personto whom it is communicated could reasonably interpret it as an offer. The primarytest of whether a communication is an offer is whether an individual receiving thecommunication would believe that he or she could enter into an enforceable deal bysatisfying the condition.

Another way of looking at an offer is as a "conditional promise," meaning that aperson promises something if the other person either returns a promise or does an act.If a return promise is requested, then the contract is called a "bilateral contract." If anact is requested, then the contract is a "unilateral contract."

b. What is not an offer

Offers must be distinguished from statements of opinion. For example, a statementby a physician that a person will be out of the hospital in two or three days isprobably not an offer.

Offers must be distinguished from statements of intention. For example, thestatement, "I plan to sell my house for $25,000," is probably not an offer.

Offers must be distinguished from invitations to deal or preliminary negotiations.When a person says something like, "What is your lowest price?" this is not an offerbut merely an inquiry. A response to that question such as, "We can quote you $5 pergross for immediate acceptance," generally would be an offer.

Advertisements normally are not offers unless they offer a reward.

Statements made in jest or anger are not offers. Thus, if someone is disgusted withhis or her automobile and says, "I'll sell it to you for $5," this is not an offer.

c. Termination of offers

An offer must be accepted while it is still outstanding. Offers can be terminated inthe following ways:

1) Lapse of time stated in the offer

If the offer states a date upon which it is terminated, then the offer terminates atmidnight of that day. If the offer is terminated after a certain number of days

2 MicroMash MBE In Brief: Contracts

("This offer terminates in three days"), then the time starts to run from the timethe offer is received, unless the offeree knows of the offer and that itstransmission was delayed.

2) Lapse of a reasonable period of time

What is a reasonable period of time depends upon the circumstances of the case.When the parties are dealing face to face or over the telephone, and there is noacceptance at the time they part, then the offer terminates.

3) Incapacity

By majority rule, the offer terminates upon the death or mental incapacity of theofferor, even though the offeree does not know of the death or mental incapacity.

4) Revocation

The basic rule is that an offer can be terminated by the offeror at any time.This is true even though the offeror specifically states that it will be held open fora specified period of time. There are, however, some exceptions to this rule:

• Firm or Irrevocable Offer. If consideration is paid for the promise to keepthe offer open (an option contract), then the offer cannot be revoked.

• Promissory Estoppel. In some cases, it has been held that the doctrine ofpromissory estoppel prevents revocation of the offer. This occurs when theofferee relies to his detriment upon the offeror's promise to keep the offeropen.

• Part Performance. When the offer is for a unilateral contract, once theofferee has started performance of the act requested, the offeror cannotrevoke.

• U.C.C. Firm Offer Rule. When the offer is to buy or sell goods, the offer isirrevocable if (1) the offeror is a merchant, (2) there are assurances that itwill be held open, and (3) the assurance is contained in a signed writing.

A revocation is not effective until communicated (it must be received by theofferee). Even though the offeror does not directly inform the offeree of the intentto revoke, if the offeree acquires reliable information that the offeror has takendefinite action inconsistent with the offer, then the offer is automatically revoked.A classic example of this occurs when the offer is to sell real property, and theofferee discovers that the property has been sold to someone else.

A general offer must be revoked by publishing the revocation in the same wayin which the offer was publicized. However, remember that actual notice of theintent to revoke a general offer is effective as to the person who receives thatnotice, even though equal publicity is not given to the revocation.

5) Rejection or counteroffer

Rejection of the offer by the offeree or the making of a counteroffer by the offereeoperates to terminate the offer.

MicroMash MBE In Brief: Contracts 3

6) Impossibility or illegality

If the subject matter of the offer is destroyed, or if the contract becomes illegal,the offer is terminated.

d. Acceptance

1) Generally

An acceptance is an exercise of the power to conclude a contract given to anofferee by the offeror. The acceptance forms a contract between the parties.

Only a person to whom an offer is made may accept. There can be noassignments of offers. There can, however, be assignments of options.

The offeree must know of the offer in order to accept. Thus, when offers cross inthe mail, there is no contract. However, the rule is that the offeree must knowonly at the time that she completes the act. Hence, if the act is started withoutknowledge of the offer, but completed after the offeree has learned of the offer, acontract is formed.

2) Method of acceptance

The offeror is the master of the offer, and can specify how acceptance is to occur.In determining whether there is a valid acceptance, the following points must beconsidered.

(a) Bilateral vs. unilateral offer

If the offer requests an act, then the act must be performed in order to accept.If the offer requests a return promise, then a return promise must be given.However, completion of the act will operate as an acceptance, even though apromise is requested by the offeror.

(b) Means of acceptance

The traditional view is that if the offer is sent by letter, it must be accepted byletter; if sent by telegram, it must be accepted by telegram, etc. The trend,however, is to find any reasonable method of acceptance proper. When thesame means of acceptance is adopted as is used to communicate the offer, e.g.,a letter offer is accepted by a letter, then all risks of mistake or loss are uponthe original offeror. Thus, if the acceptance letter is lost or delayed in transit,a contract is formed. However, if the letter is misaddressed, this rule does notapply and its delay or loss prevents the formation of a contract.

3) Silence as acceptance

Normally, silence does not operate as an acceptance of an offer. Thus, even whenthe offer says, "If I don't hear from you within 10 days, I will assume you haveaccepted," no contract is formed by the offeree's remaining silent. However, acontract is formed if:


• the offeror has given the offeree reason to believe that the offer can beaccepted by silence, the offeree has remained silent, and the offeree intendedto accept by silence, or

• because of previous dealings or otherwise, it is reasonable that the offereeshould notify the offeror if she does not intend to accept, e.g., if the offereehas always accepted offers from this offeror in the past.

4) Notice of acceptance

If the offer is for a bilateral contract, the offeree must give notice of acceptance,i.e., notice must be given of the return promise. However, an acceptancebecomes valid when posted. Hence, a letter sent by the offeree operates as anacceptance as soon as it is placed in the mailbox, even though the offeror has notas yet received notice. This is not true if the letter is misaddressed. If the offer isfor a unilateral contract, notice of acceptance is required only when the offeror isnot likely to become aware that the act is being performed.

e. Counteroffers

The basic rule is that the acceptance must be on the same terms as the offer. Anychanges, additions, or subtractions from the terms of the offer operate to make theattempted acceptance a "counteroffer" which, in legal terms, is a rejection of the offerand the making of a new offer by the offeree. However, suggestions or inquiries in aresponse by the offeree do not amount to a counteroffer. Also, if the acceptancesimply spells out the details of the transaction, this does not make it a counteroffer.For example, if the offer does not note the kind of title to be given in a sale of realproperty, and the offeree requires "marketable title," the acceptance is valid providedthat marketable title would be required by law.

When the contract is for the sale of goods, Article 2 of the U.C.C. applies a differentrule with regard to counteroffers. Under a literal reading of the code (§2-207), aresponse by the offeree that purports to be an acceptance operates as an acceptanceeven though it changes, adds to, or subtracts from the terms of the offer. Cases,however, have held that a material change in the terms will prevent the formation of acontract under the code provision.

2. Excuse

a. Mistake

1) In general

The law divides mistake into "unilateral mistake" and "mutual mistake." In theunilateral mistake cases generally, no relief is granted, whereas in the mutualmistake cases, a party is excused from performance.

2) Unilateral mistake

Unilateral mistake means that only one of the parties is mistaken. Here, eitherparty can enforce the contract on its terms unless the party knew or had reason


to know that the other party was making a mistake, or the party had a duty todisclose the fact as to which the other party was mistaken.

A similar situation arises when there is a mistake in a telegraph transmission. Thesender may want to sell the goods at a specific price, but the telegraph companytransmits the telegram so that it contains a lower price term. Here, if the buyeraccepts, a contact is made at the lower price and it can be enforced in spite of themistake.

3) Mutual mistake

Mutual mistake means that both parties were mistaken as to an essential elementof the contract. There must be a substantial difference between the deal ascontemplated and the actual deal, with no intent by the parties to take a risk onthis element of the transaction.

For example, in the leading case, there was a contract to sell a cow, with bothparties believing that it was a barren animal, fit only for meat. Actually, the cowwas "with calf" As a meat animal, it was worth $80, whereas it was valued at$750 as a breeding animal. Rescission of the contract was granted.

4) Reformation

When reformation of the contract is available to cure a mistake, neither party canavoid the contract. For example, assume that A agrees to sell Redacre to B, withB agreeing to pay $50,000 and to "assume a mortgage in the amount of$100,000." If the parties fail to include a provision regarding the assumption ofthe $100,000 mortgage, A can obtain reformation of the agreement to reflect B'spromise. A has no right to avoid the contract because reformation adequatelyremedies the mistake in drafting the written agreement.

b. Misunderstanding

If the prospective parties to a contract manifest think they are agreeing to the sameterms but in fact assent to different terms, and neither knows or should know thatthere is a misunderstanding that causes them to assent to different terms, there is nocontract.

c. Misrepresentation, nondisclosure, and fraud

1) Relationship to tort law

In contract law, a misrepresentation made in connection with an agreementbetween parties may prevent the formation of a contract or make a contractvoidable.

2) Elements of fraudulent misrepresentation

In general, a misrepresentation is an assertion that is not in accord with the facts.If the misrepresentation is made knowingly (with scienter), it is clearly fraudulent.Under the Restatement (Second) of Contracts § 162, it is also fraudulent if the


person either (a) does not have confidence in the truth of her assertion, or (b)knows that she does not have a basis for her assertion.

3) Nondisclosure

A person's nondisclosure of a fact known to him is equivalent to an assertion thatthe fact does not exist only if: (a) he knows that disclosure is necessary to preventsome previous assertion from being fraudulent; (b) he knows that disclosurewould correct a mistake of the other party as to a basic assumption, andnondisclosure would amount to lack of good faith and fair dealing; (c) he knowsthat disclosure would correct a mistake of the other party as to the contents oreffect of a writing evidencing or embodying their agreement; or (d) the otherperson is entitled to know the fact because of a confidential or fiduciaryrelationship between them.

4) Effect of fraudulent misrepresentation

(a) Fraud in the factum

Fraud in the factum, or as it is also called fraud in the execution, occurs whenthe fraudulent misrepresentation prevents a party from knowing the characteror essential terms of the transaction. In such cases, no contract is formed, i.e.,the apparent contract is void. Where, however, the person could havediscovered with the exercise of reasonable diligence the character or essentialterms of the transaction, he is estopped from asserting that the contract is void.

In most cases, whether the contract is void or voidable is immaterial becausethe person has a defense in both cases. The distinction is more importantwhen the rights of third parties are involved. A voidable contract can beratified after the fraud is discovered, but a void one may not be.

(b) Fraud in the inducement

When the misrepresentation is used to induce someone to enter into a contract,it is called "fraud in the inducement," and the contract is voidable. Therationale of the modern theory is that a contract is voidable whenever themisrepresentation is material, regardless of fraudulent intent.

d. Undue influence and breach of a confidential relationship

A plaintiff need not meet the same standards to avoid a contract that must be met inthe case of fraud where there is a trusting relationship between the contracting partyand a person in whom she places trust and confidence.

1) Undue influence

Undue influence occurs in a relationship between two parties where one isdominant, usually because he is sophisticated in business relationships and theother is dependent, either because of lack of education and experience in thefinancial world or because the dependent person has diminished mental capacitymany times caused by advanced age. In addition there is a relationship of trustbetween the dominant and dependent person. Where that type of relationship


exists, the person in the dominant position is held to a higher standard ofdisclosure and fairness than in the ordinary world of arms-length contracts. Thedominant person may have the burden to show that a contract was fair to thedependent person before he can withstand an action to avoid the contract. Hisaffirmative duty to disclose facts is much higher when there is a possibility ofundue influence. While most lawsuits in this area deal with situations where thereis a contractual relationship between the dominant and the dependent person, orwhere the dominant person has assisted the dependent person in making atestamentary disposition, a person who has been the subject of undue influencecan also avoid a contract with a third person, unless that person would be harmedbecause he is a bona fide purchaser.

2) Breach of a confidential relationship

There are certain relationships between individuals, usually described as fiduciaryrelationships, where the higher standards of conduct in contractual dealings(described above in dealing with undue influence) arise out of the existence of therelationship itself These are generally described as fiduciary relationships andautomatically impose of the party who has the fiduciary obligation of fair dealingand full disclosure.

The most common examples of such fiduciary relationships occur between trusteeand beneficiary, lawyer and client, doctor and patient, financial advisor and client,and in some cases parent and child. The burden of proving that the contract is fairis usually placed upon the fiduciary.

e. Duress

Like fraud, duress can result in either a void or voidable contract. Generally, anywrongful act or threat that deprives a party of meaningful choice constitutes duress.When a party's agreement is the result of physical duress, e.g., a strong person takingthe other's hand and compelling her to sign a contract, the contract is void. When theduress is in the nature of a threat, then the contract is voidable. However, not allthreats are improper. For example, a "threat" that one "will never talk to the personagain" if she refuses to enter into a contract is not duress.

3. Problems Of Communication And Battle Of The Forms

Section 2-207 of the U.C.C. significantly changes the counteroffer rule in regard tocontracts for the sale of goods. Section 2-207 (1) provides:

A definite and seasonable expression of acceptance or a writtenconfirmation which is sent within a reasonable time operates as anacceptance, even though it states terms additional to or different fromthose offered or agreed upon, unless acceptance is expressly madeconditional on assent to the additional or different terms.


a. When a contract is formed despite varying terms in the acceptance

From a reading of §2-207(1), it appears that a contract is formed whenever there is a"definite and seasonable expression of acceptance" or a "written confirmation,"unless acceptance is expressly made conditional on assent to the additional ordifferent terms. The extent to which the terms of the acceptance vary or add to theoffer does not seem to be relevant, except that the changes may bear upon whether thewriting can be construed to be a "definite" acceptance or confirmation. It is onlywhere the acceptance is expressly conditioned upon the offeror's assent to the new ordifferent terms that a contract is not formed.

However, where the "expression of acceptance" deviates substantially from the offer,courts have indicated a reluctance to find that a contract is formed.

b. When additional or different terms become part of the contract

Assuming that a contract has been formed even though the acceptance contains termsadditional to or different from the offer, the question arises whether these additionalor different terms become a part of the contract formed.

If both parties are merchants, additional or different terms do become a part of thecontract, unless they:

(1) materially alter the offer, or

(2) are objected to by the offeror in advance of the acceptance, or

(3) are objected to by the offeror within a reasonable time after the offeror obtainsnotice of them.

Note that the U.C.C., by its terms, treats different and additional terms differently.Under the plain wording of the U.C.C., different terms (those that vary or contradict aterm of the offer) never become part of the contract. However, courts have eitherignored or avoided this rule, presumably viewing it as too harsh and impractical.Thus, the rule applied on the Multistate Bar Exam is that different terms areincorporated into a contract if they meet the criteria stated above.

c. Acceptance by conduct

Subsection (3) of §2-207 provides for the formation of a contract by virtue of theconduct of the parties. If the conduct includes some written expression of the parties'agreement, then the terms of the contract include whatever terms the parties agreed toin writing. As to other terms, those implied by the code in the absence of agreementapply. For example, if the writings of the parties agreed only to the description andquantity of the goods, the code would supply the price term, the place of delivery,warranties, and so on.

Under §2-206 of the U.C.C., an offer to buy or sell goods may be accepted in anyreasonable manner; thus, the code has rejected the bilateral-unilateral distinction. Thesection specifically says that an order for goods may be accepted either by shippingthe goods, or by promising to ship them. Under the section, the shipment ofdefective, nonconforming goods is an acceptance, and a contract is formed unless the


seller notifies the buyer that they are not meant to fill the order. The buyer may rejectthem and sue for any damages resulting from the seller's failure to deliver conforminggoods, or if the buyer accepts the goods, he may have a remedy for any damagesresulting from the nonconformity.

4. Indefiniteness Or Absence Of Terms

At common law the courts were reluctant to supply terms to a contract if the parties hadnot agreed upon them and thus often held that an agreement which missed essential termswas not a contract because it was indefinite.

The U.C.C. has taken a different approach with respect to contracts within its scope.Article 2 makes contracts somewhat easier to form. Under §2-204(1), a contract for thesale of goods may be made in any manner sufficient to show agreement, includingconduct by both parties which recognizes the existence of a contract. For example, if theparties agree to the sale of a specific quantity of goods but do not agree on a price, thereis a contract for a reasonable price.

There is no need to determine the exact time when a contract is made. This provisionobviates the necessity of denominating a particular communication an "offer" and anotheran "acceptance." The general approach of Article 2 is to determine whether from thetotality of the communication it is clear that the parties intended to enter into a bindingagreement; if so, a contract exists.

Under the Code, an offer to buy or sell goods normally can be accepted either by a returnpromise or by a performance of the act requested. Note, however, that if the offerorspecifically requires a return promise or a completion of the act, this must be done toeffectuate an acceptance. Under the Code's general rule, however, unless otherwiseunambiguously indicated, an order from a buyer for current shipment of goods may beaccepted by the seller either by a return promise or by actual shipping of the goods.

B. CAPACITY TO CONTRACT

Another requirement of a contract is that the parties be competent. Incompetency arisesbecause of infancy, mental illness or defect, intoxication, guardianship, and corporateincapacity.

1. Infancy

a. Disaffirmance

When a contract is made by an infant, it is voidable. This means that the infant maydisaffirm the contract and avoid any liability under it. The disaffirmance can beeffectuated for a reasonable time after the infant reaches majority. The infant mustrestore any benefits received under the contract if possible, but if not possible, theinfant still can disaffirm. Even if the infant misrepresented her age, disaffirmance isstill allowed.


b. Liability for necessities

When necessities are furnished to the infant, the infant must pay for them, but therecovery by the person furnishing the necessities is on a quasi-contract theory. Thus,the supplier can recover only the reasonable value of the services or goods, and notthe agreed upon price. Food, shelter, and clothing are clearly necessities, and,depending upon the status of the minor, an automobile, an education, etc., may alsobe necessities.

2. Mental Illness

If a party is adjudicated mentally incompetent and is under guardianship, the contractsmade by the individual are void. On the other hand, if there has been no adjudication orguardianship, the contracts are voidable and must be disaffirmed. If a contract is madeduring a lucid period, the contract is fully enforceable, unless the person has beenadjudicated an incompetent.

3. Intoxication

Technically, intoxication resulting from alcohol or drugs renders a contract voidable ifthe person entering into the contract was unable to understand the nature of thetransaction.

4. Guardianship

A person has no capacity to incur contractual duties if his property is under guardianshipby reason of an adjudication of mental illness or defect, habitual intoxication, narcoticsaddiction, or because the person is a spendthrift, aged, or a convict. The policy ofappointing a guardian is to preserve the property from squandering or improvident use.The powers of a guardian are usually defined by statute. The guardianship proceedingsare treated as giving public notice of the incapacity of the ward. Property underguardianship may be reached to satisfy the torts or quasi-contractual obligations of theward.

5. Corporate Incapacity

When a corporation acts ultra vires (outside its powers), the contract is voidable, buttoday most states take the position that if one party has performed, there may be recoveryin quantum meruit.

C. ILLEGALITY, UNCONSCIONABILITY, AND PUBLIC POLICY

1. Illegality

If the performance that is to occur under a contract is illegal, the contract itself is illegaland is unenforceable.

a. Types of illegal contracts

Clearly, in most states, wagering contracts, usurious bargains, etc., are illegal. Bypublic policy, contracts in restraint of marriage are illegal. Contracts in restraint oftrade are illegal, but covenants not to compete contained in a sale of a business or anemployment contract will be enforced if they are reasonable in time and geographical


area. Contracts to bribe an official and bribes themselves are illegal, as are contractsto commit a tort or a crime.

b. Effect of illegality

The law will not enforce or even recognize transactions that are illegal. The contractitself cannot be enforced; if one party performs under the contract, she cannot receiveany compensation for the performance, either in an action on the contract or an actionin quasi contract. The law also will not grant restitution if someone has paid anotherunder an illegal contract.

c. Exceptions

1) Ultimate purpose illegal

If a contract has an ultimate purpose that is illegal, but its performance is legal initself, e.g., a contract to sell gambling equipment, a person can recover under thecontract, provided he does not participate in the illegal purpose of the deal. Forexample, the seller of gambling equipment would be able to recover the price,provided he did not become involved in the gambling. This is true even if theseller knows of the illegal purpose.

2) Divisible contracts

In some instances, contracts are separable in that part of the consideration is legaland the other part is illegal. For example, B painted A's house in return for A'spromise to pay $500 and to smuggle goods into the country. In such cases, thecourts may allow recovery of the legal part of the promise, i.e., the $500, and denyrecovery of any damages for A's failure to smuggle the goods into the country.

3) Rini Delia° (equally at fault)

Where the parties are not in pari delicto (equally at fault), recovery may beallowed. For example, a contract whereby an employer promises to pay anemployee for overtime work is enforceable by the employee, even though it isillegal to work overtime in the particular occupation.

4) Locus poenitentiae repudiation

If one of the parties repents of the illegal bargain prior to the time of the illegalperformance, she is normally allowed to recover whatever was given for thepromised performance.

2. Unconscionability

Article 2 of the code provides that a court may refuse to enforce a contract or part of acontract on the grounds that it is "unconscionable." Generally, unconscionability goes tounfair dealings by one of the parties. Normally, it arises where the parties have unequalbargaining power, and the more powerful party has attempted to limit severely the rightsof the other party, or has taken unfair advantage. The question whether a contract isunconscionable is for the court to decide, and the issue does not go to the jury.


3. Public Policy

Even if a contract is neither illegal nor unconscionable it may be unenforceable if itviolates a significant public policy.

Many kinds of adhesion contracts are unenforceable because they are against publicpolicy. A contract requiring an individual who needs an essential public service, such asmedical care, to waive any claim for negligence on the part of the provider is likely to befound to violate public policy and therefore be unenforceable.

D. IMPLIED-IN-FACT CONTRACTS AND QUASI CONTRACTS

1. Implied-In-Fact Contracts

The agreement or mutual assent necessary for the formation of a contract most frequentlyresults from words expressed by the parties. When this is the case, the contract is calledan "express contract." However, conduct may also indicate assent or agreement. Thus, ifone takes a pack of cigarettes from the counter of a drug store, this conduct indicates herintent to purchase the cigarettes. When the agreement is formed by virtue of conductrather than expressed words, this gives rise to what is called an "implied contract." Ofcourse, in certain cases the terms of a contract are determined both by the expressedwords of the parties and by conduct on their part. Whether the contract is express orimplied does not affect the legal relationship between the parties or the rules of law thatapply to this relationship.

A primary characteristic of a contract, whether express or implied in fact, is that the lawwill "enforce the promise." Usually this is done by granting "benefit of the bargain"damages that will attempt to put the plaintiff in the position that he or she would havebeen in had the contract been performed. In some cases the court will specificallyenforce the contract, i.e., will order the defendant to perform his or her promise.

2. Quasi Contracts

"Quasi contracts," or, "contracts implied in law," are not true contracts at all. They donot depend upon assent between the parties, nor is recovery based upon a promise. In aquasi contract, the law imposes an obligation because it appears just. Such an obligationis very close to the type of obligation imposed by the law of torts, and it has becomeassociated with contract law largely because of the forms of action which were prevalentin early English law.

Since the defendant has not made a promise in cases seeking quasi-contractual recovery,the law cannot "enforce the promise" as it does in contract actions. Rather, the lawimplies a promise (establishes a duty) that the defendant must make restitution to theplaintiff of any benefit that the plaintiff has conferred upon the defendant. This isaccomplished by awarding the plaintiff money damages in the amount of the value of thebenefit. Thus, the theory of the action is restitutionary in nature; the law will restore theplaintiff to the position he or she was in prior to the transaction or event.

Although the theoretical distinction between contracts implied in fact and quasi contractsis clear, the differences sometimes fade and even appear entirely nonexistent in certain


fact situations. For example: In a contract for services where no price term is agreedupon, the recipient of the services is obligated to pay the reasonable market value of theservices. In such a case, it is difficult to determine whether the law finds this obligationbecause it assumes that the parties implicitly agreed on the fair market value as the pricefor the services, or because it believes that it is just to impose the obligation as a matterof law.

E. PRE-CONTRACT OBLIGATIONS BASED UPON DETRIMENTALRELIANCE

The general rule except for the case of firm offers under the U.C.C. is that an offer isrevocable at any time, even though the offeror has agreed to keep the offer open for aspecified time. An offer can be made irrevocable if the offeror promises to keep the offeropen for a specific period of time and that promise is supported by consideration. An optioncontract is then formed and the offeree usually pays an agreed amount to the offeror in orderto make the offer irrevocable.

There is one set of circumstances where the promissory estoppel substitute for considerationis the basis for keeping the offer open. This occurs in the construction industry where theowner puts a contract out to bid. The construction of most modern buildings is supervised bya general contractor who bids a specific price to the owner for the entire job. In order tocomplete the job, the general contractor usually hires subcontractors to perform portions ofthe construction such as electrical and plumbing work. Prior to submitting a bid to the ownerfor the entire job, the general contractor solicits bids for portions of the work fromsubcontractors, which the subcontractors agree to leave outstanding for a reasonable timeafter the contract for the entire job is awarded by the owner.

The agreement not to revoke the sub-bid offer is enforceable because it is supported by thesubstitute for consideration known as promissory estoppel. When making the bid, thesubcontractor knows that the contractor is relying on it by using it in the calculation of hiscosts for the job in preparation for making his bid as general contractor. It would be unjust topermit the subcontractor to revoke that bid after inducing justifiable reliance. There, uponreceiving the contract, the general contractor has a right to accept the sub-bid, turning it into acontract even though the sub-bidder has attempted to withdraw the sub-bid. The contractormust accept the sub-bid within a reasonable time to turn it into a contract.

Since the sub-bid is only an outstanding offer, the general contract is not bound to accept itupon becoming the successful bidder for the general contract. He can enter into a subcontractwith someone else for a lower price. The sub-bidder has no right to require that the generalcontractor accept his bid if the general contractor is the successful bidder on the project.

If the general contractor attempts to negotiate a lower price with the sub-bidder, then he hasmade a counteroffer and can no longer accept the original bid.


F. EXPRESS AND IMPLIED WARRANTIES IN SALE-OF-GOODSCONTRACTS

There are three basic warranties of quality: (a) express, (b) merchantability, and (c) fitness fora particular purpose. The trend is to allow a warranty action to lie even though there is noprivity between the parties.

1. Express Warranty

All statements and promises made by the seller that form a part of the basis of the bargainare express warranties unless merely the seller's opinion or commendation of the value ofthe goods. Express warranties include almost any positive affirmation by word orconduct, including descriptions of goods, and disclaimer clauses are ignored when theyconflict with these representations.

2. Warranty Of Merchantability

An implied warranty of merchantability is given whenever the seller is a merchant.Goods must be fit for their ordinary purpose and pass without objection in the trade underthe contract description. The disclaimer may be oral, but must use the term"merchantability," and must be conspicuous if in writing. The warranty can bedisclaimed in some instances by use of "as is" or similar language.

3. Warranty Of Fitness For A Particular Purpose

This implied warranty is given whenever the seller has reason to know that (1) the buyerhas a particular use for the goods, and (2) the buyer is relying upon the seller's skill toselect the goods. This warranty can be disclaimed by general language, but thedisclaimer must be in writing.

II. CONSIDERATION AND ITS SUBSTITUTES

A. BASIC CONCEPT

There are two basic elements of consideration: (1) legal detriment, and (2) bargained-forexchange. You must look at the promise that the plaintiff is trying to enforce, and determinewhether or not that promise is supported by consideration. Generally, this means you mustask whether or not something has been received for the promise, and whether this has beenbargained for. Consideration can take the form of:

• a return promise to do something;

• a return promise to refrain from doing something;

• the actual doing of some act; or

• refraining from doing some act.

B. LEGAL DETRIMENT

The basic concept of legal detriment is that there must be something of substance, either anact or a promise, that is given in exchange for the promise which is to be enforced.


1. Adequacy Of Consideration

Normally, adequacy of consideration is not an issue except when specific performance isbeing requested. Even though the thing bargained for may be worthless, e.g., apromissory note which cannot be enforced, so long as the promisor wanted that thing, thegiving of it will constitute adequate consideration. Section 2-302 of the UniformCommercial Code provides that a court may refuse to enforce a contract, or a part of acontract, on the grounds of unconscionability. Cases have held that when a consumeragrees to pay far in excess of the value of goods to be sold and there is some otherindication of unfair dealing, a contract is unconscionable under this provision.

2. Pre-Existing Duty Rule

The pre-existing duty rule arises when the "legal detriment" is something that thepromisee is already obligated to do. For example, if A says to B, "I will give you $100 inthirty days if you will refrain from killing my cat," there is no consideration for A'spromise to pay $100, because B is already under an obligation not to kill the cat.

3. Modification Of Contract

The traditional rule is that a modification of an existing contract must be supported byconsideration. The courts, however, allow enforcement of agreements to modify acontract under the following three rules:

• where there has been a rescission of the existing contract by tearing it up or bysome other outward sign, and then the entering into a new contract, whereby oneof the parties must perform more than he or she was to perform under the originalcontract;

• where there are unforeseen difficulties, and one of the parties agrees tocompensate the other when the difficulties are discovered;

• where there are new obligations on both 'sides.

Article 2 modifies the doctrine of consideration in two ways:

• A promise to keep an offer open made by a merchant need not be supported byconsideration if it is in writing and signed.

• Under §2-209 of the Uniform Commercial Code, no consideration is necessary tomodify a contract for the sale of goods, but there is a requirement of good faith.

4. Compromise Of Claims

If P claims that D owes her a thousand dollars, and P agrees to accept $500 in fullsatisfaction, the payment of the $500 operates to discharge the entire $1,000 debt onlywhere there is some dispute either as to the validity of the debt or the amount of the debt.However, the debt will be discharged if the $500 payment is earlier than it had to be, or ifsomething in-addition to the $500 is given to P.

If P has an invalid claim against D, and D promises to pay money in return for P'sdismissing the action or agreeing not to bring it, D's promise to pay the money is


enforceable, provided P had a reasonable belief that she had a legitimate claim eventhough the claim turns out to be groundless.

5. Illusory Promises

Some promises, although appearing to be real, are in fact illusory. Thus, if A says, "I willsell you my car if I want to," this is an illusory promise and does not constitute legaldetriment. Where a contract has been entered into but one party or the other may cancel,the general rule is that a contract is enforceable so long as some notice must be given ofthe cancellation. Also, output and requirements contracts are enforceable.

C. BARGAIN ASPECT OF CONSIDERATION AND PROMISSORYESTOPPEL

In order for the legal detriment to constitute good consideration, it must be bargained for inexchange for the promise. Promissory estoppel is very similar to consideration, the onlydifference being that the legal detriment must have been suffered in reliance upon thepromise rather than having been bargained for.

1. "Gift" vs. "Bargain" vs. "Reliance"

If A says, "I will give you $1,000 if you attain the age of 21," this promise is notenforceable. The act of attaining the age of 21 is not bargained for; hence, it cannotoperate as consideration. Likewise, there is no reliance on the promise, so promissoryestoppel does not apply.

If A says, "I will give you $1,000 if you graduate from high school," this may or may notbe enforceable. It is possible that A wanted the promisee to graduate from high schooland was bargaining for this. If that is the case, the promise to pay the $1,000 is supportedby good consideration. It is also possible that the promisee may have relied upon thepromise in completing the act, and if this is the case, the promise is supported not byconsideration, but by the doctrine of promissory estoppel.

If A says, "I will pay you $1,000 if you give up smoking for a year," this is anenforceable promise. The law assumes that A was bargaining for the act.

The test in these cases is generally said to be whether the offeree could have reasonablybelieved that the intent of the offeror was to induce the action. If that is the case, thepromise is enforceable.

2. Charitable Subscriptions

The doctrine of promissory estoppel is used frequently to enforce promises to charitableinstitutions. For example, if A promises to give a university $1,000,000 in 1990, and theuniversity purchases land in reliance upon the promise, then the promise is enforceableunder the doctrine of promissory estoppel.

In charitable subscription cases, there is also the possibility of finding consideration fromthe exchange of promises among a number of contributors. The concept is that thepromise of each contributor operates as the consideration for the promise of each othercontributor. The donee is treated as a third-party beneficiary of the promises.


3. Past Or Moral Consideration

Past or "moral" consideration is generally not recognized in the United States. Thus, if Psaves D's life and D then promises to pay $1,000 because P has saved his life, D'spromise is unenforceable. P's act of saving D's life could not have been bargained for,nor could it have been done in reliance upon the promise. However, there is a moderntrend toward enforcing such promises when necessary to "prevent injustice."

4. Debts Barred By The Statute Of Limitations

If D owes P $5,000, but the statute of limitations has run on the claim, a new promise byD to pay the $5,000 made after the running of the statute is enforceable without any newconsideration.

5. Quasi-Contractual Recovery

Recovery may be available where the plaintiffs performance was neither bargained fornor in reliance on an offer, but it would be unjust to treat it as a gift. For example: P seesD's horse running free and knows that D is out of town. P feeds and houses the horse fortwo weeks awaiting D's return. When D returns, D thanks P and promises to pay P $50at the end of the month. This promise would not be enforceable in many courts because itis for "past consideration." There was neither any bargain for the act, nor could P haverelied upon D's promise in feeding the horse. However, P may be able to recover inquasi contract. In order to recover, P would have to show that she reasonably expected tobe compensated, and that there was a benefit rendered to D by virtue of taking care of thehorse. The recovery in this case might be $50 if this were the reasonable value of theservices and food provided, but it would not be based upon D's promise. Rather, it wouldbe based upon the theory that P rendered a benefit to D and, in justice, D ought tocompensate P for that benefit.

III. THIRD-PARTY BENEFICIARY CONTRACTS

A. IN GENERAL

A third-party beneficiary contract results when two parties enter into a contract with theunderstanding and intent that the performance to be rendered by one will go to a third person.

B. DEFINITIONS

An intended beneficiary is one to whom the promisee wishes to make a gift of the promisedperformance or to satisfy an obligation to pay money owed by the promisee to thebeneficiary. For example, A agrees to paint B's house in return for B's promise to pay $500to C. This is a third-party beneficiary contract in which C is the beneficiary. Because C is anintended beneficiary, C has the right to bring an action against B for the $500.

An "incidental beneficiary" is one who just happens to be benefited by the contract, andthere is no contractual intent to benefit that person. For example, if A and B entered into acontract to build a theater and C owned a restaurant across the street, C would be benefitedby the theater but would not gain any rights against A or B under the contract. C would be an"incidental beneficiary" because there was no intent to benefit C.


C. VESTING OF BENEFICIARY'S RIGHTS

Only an intended beneficiary has a right to sue on the contract. A beneficiary of a "giftpromise" may sue only the promisor, but a beneficiary to whom the promisee owed moneymay sue either the promisor or the promisee on the underlying obligation.

The rights of an intended beneficiary vest when he manifests assent to the contract, changesposition in reliance on the contract, or brings suit on the contract.

Once the rights of a beneficiary "vest," the original parties to the contract cannot modify it inany way, nor can the promisor be discharged by the promisee to the detriment of the third-party beneficiary. Thus, in our first hypothetical, if C's rights had vested, A could notdischarge B from B's obligation to pay $500 to C, nor could A agree to a lesser payment insatisfaction of B's obligation.

D. DEFENSES

The promisor can raise any defense against the third-party beneficiary that she had against theoriginal promisee. For example, in our first hypothetical, if A fails to paint the house, B canraise this as a defense in an action brought by C.

The promisor, however, cannot raise rights of the promisee against the third-partybeneficiary. Thus, if C were a creditor beneficiary in our hypothetical, but the debt that Aowed to C was barred by the statute of limitations, a discharge in bankruptcy, or by virtue ofthe fact that A had a defense against C, these defenses could not be raised by B in a suitbrought by C. This would be a so-called jus tertii (rights of a third party) defense.

IV. ASSIGNMENT AND DELEGATION

A. IN GENERAL

Assignment refers to the transfer of rights under a contract, and delegation involves theobtaining of someone else to perform a party's obligations under a contract. Although thetwo are clearly distinct in concept, the term "assignment" is often used to refer to bothassignment of rights and delegation of duties.

B. ASSIGNMENT OF RIGHTS

Almost all contract rights can be assigned. Partial assignments are permissible, as is theassignment of future or unearned rights.

1. When Allowed

There can be no assignment which: (a) materially increases the duty or risk of theobligor; or (b) materially reduces the obligor's chance of obtaining performance.Generally, prohibitions against assignment in the contract are strictly construed, and theassignment is permissible. Even if validly prohibited by the contract, the parties retainthe power to assign, and the only consequence is that an assignment operates as a breachof the contract.


2. Requirements

No formalities are needed for an assignment, but there must be a present intent totransfer the right immediately. Thus, a statement, "When the money comes in I will giveyou 10%," is not an assignment. There is no consideration needed.

3. Rights Of The Assignee

An assignee takes all of the rights of the assignor, but takes subject to any defenses thatcould be raised against the assignor. The rights of the assignee are subject to set-offs ifthe transaction giving rise to the set-off occurred prior to the time the obligor was givennotice of the assignment. The assignee is also subject to any modification of the contractmade prior to the time the obligor obtained notice of the assignment. Thus, payment bythe obligor to the assignor can be raised as a defense, provided the payment was madebefore the obligor had notice of the assignment.

C. DELEGATIONThe general rule is that obligations under a contract can be delegated. However, there can beno delegation when (a) the other party has a substantial interest in having the individualperform (for example, in a personal services contract involving taste or a special skill); or (b)when delegation is prohibited in the contract.

When obligations are delegated, the delegator is not released from liability, and recovery canbe had against the delegator if the delegatee does not perform. Also, the other party to thecontract becomes a third-party beneficiary to the contract of assignment and has a right to suethe delegatee immediately.

V. STATUTE OF FRAUDS

A. GENERALLY

The Statute of Frauds requires that there be a written memorandum of the contract in certaincases. The following contracts require a memorandum in most states:

• land contracts;

• sale of goods, if the price is $500 or more;

• contracts that cannot be performed within one year;

• suretyship contracts;

• promises by executors and administrators;

• contracts in consideration of marriage.

In addition, many states have writing requirements for contracts to make a will and real estatebrokers' contracts.

B. MEMORANDUMThe memorandum that is required must be in writing, signed by the party to be charged, andit must contain the essential elements of the deal. The memorandum need not be formal:


receipts, telegrams, exchange of correspondence, etc., can serve as memoranda. The essentialelements may be in more than one writing, but if so, one of the writings must containsomething referring to the others. The memorandum need not be delivered. If it is lost ordestroyed, it still operates to satisfy the Statute of Frauds, and its prior existence can beproved by oral evidence.

C. TYPES OF CONTRACTS WITHIN THE STATUTE OF FRAUDS

1. Land Contracts

a. Types

Practically all contracts and conveyances involving real property are included andmust be in writing, e.g., contracts to buy or sell, conveyances, mortgages, grants ofeasements, leases, and interests created by restrictive covenants. Excluded arelicenses, leases for less than one year in most states, and assignments of mortgages.

b. Part performance

Once a vendor conveys, the contract is enforceable, and the vendee must pay the priceeven if there is no memorandum. However, payment by the vendee alone is notsufficient to take the transaction out of the Statute of Frauds. There must be someother act, such as taking of possession, showing the existence of the contract.

2. Sale Of Goods

a. Sufficiency of the writing

When the price of goods is $500 or more, the U.C.C. requires a memorandum of thesale. Here, the memorandum need only: (1) indicate that a contract has been made;(2) identify the parties; (3) contain a quantity term, and (4) be signed by the personto be charged. Specifically, a mistake in the memorandum or the omission of otherterms does not destroy its validity. An omitted term, such as the price term, can beproved by parol evidence. There can be no enforcement, however, beyond thequantity term actually stated in the memorandum. Thus, if the memorandum calls forthe delivery of 10,000 widgets, whereas the parties actually agreed to 15,000, thecontract can be enforced only to the extent of 10,000.

b. Exceptions

There are several exceptions to the sale of goods Statute of Frauds.

• Specially Manufactured Goods. When (a) the goods are speciallymanufactured for the buyer; (b) a substantial beginning has been made on theirproduction, or a commitment has been made to purchase them elsewhere by theseller; and (c) the goods are not salable in the seller's ordinary course ofbusiness, there is no requirement of a writing.

• Part Payment. When part of the purchase price has been paid, the contract istaken out of the statute to the extent of payment. Hence, if the contract callsfor 200 widgets, and 10% of the price has been paid, the contract can beenforced as to 20 widgets.


• Receipt and Acceptance. The contract is taken out of the statute to the extentthat goods are received and accepted. Again, if only part of the goods arereceived and accepted, a contract can be enforced only as to those goods.

• Admission in Pleadings. If the party to be charged admits in the pleadings orotherwise in court the existence of the contract, no writing is required as to theamount admitted.

• Failure to Respond to Memorandum. If a memorandum sufficient againstone party is sent to the other party, who does not object within ten days, thecontract is enforceable against the other party even though he has not signed it.

3. One-Year Provision

Contracts that cannot be performed within one year of their making must be in writing.The year starts the day after the contract is made. It is the time that the contract is madethat is important, not the length of performance. For example, a contract made inOctober, with performance to begin in December and to continue through November ofthe following year, is clearly covered by the statute. If there is a possibility ofperformance within a year, no writing is required. Thus, a contract "for life" is notcovered by this provision of the Statute of Frauds because the employee might die withinthe year. However, a contract whereby a person is to work for "two years" is covered.Even though the person may die within the two years, his or her death would notconstitute full performance. Part performance of the contract does not take it out of theStatute of Frauds; the only remedy is in restitution (quasi contract). Full performance byone of the parties, however, does take it out of the statute, and recovery can be had on thecontract.

4. Suretyship Provision

When a person promises to answer for the debt of another, the person's promise must bein writing in order to be enforceable. This provision does not include "indemnitycontracts," i.e., those in which there is a promise to reimburse someone if she losesmoney on a deal. The "main purpose rule" provides that if the main purpose of thecontract is to benefit the promisor (surety), rather than the principal debtor, the contractmay be enforced even though there is no writing. Neither partial nor full performancetakes the contract out of this section of the Statute of Frauds.

5. Executor-Administrator Provision

This is simply a special application of the suretyship provision. Remember that the debtmust be a debt of the estate in order for this section of the Statute of Frauds to apply.

6. Marriage Provision

This is practically obsolete. It applies to any agreement in consideration of marriageexcept mutual promises by the two parties to marry each other.


VI. PAROL EVIDENCE

The parol evidence rule provides that when parties have adopted a writing as their agreement, noevidence can be admitted to vary, contradict, add to, or subtract from the obligations as they arestated in the writing.

A. INTENT OF THE PARTIES

In order to invoke the parol evidence rule, it must be shown that the parties intended to adoptthe writing as their agreement. It is possible that there is:

• total integration: the writing is the final and complete expression of the agreementbetween the parties, and no evidence can be introduced as to any additional promisesor representations made prior to the time of the writing.

• partial integration: the writing is a final expression of the parties' agreement to thematters covered in the writing, and no extrinsic evidence can be introduced that variesor contradicts the parties' agreement on those matters.

• no integration: the writing in no way was intended to represent the agreement of theparties.

The intent of the parties determines whether there is total, partial, or no integration. This is aquestion of fact but is determined by the court. Generally, the court looks at the document todetermine how complete and how formal it is. Normally, the court will then consider theproffered evidence to see whether it is covered by the agreement. If there is a "mergerclause" ("this writing contains the entire agreement of the parties and no evidence of otheragreements is admissible"), the merger clause is evidence of the intent to integrate.

B. OPERATION OF THE RULE

If the proffered evidence contradicts the writing, it is not admissible unless the court findsthat there was no intent whatsoever to integrate the agreement of the parties into the writing.If the evidence merely supplements (adds to the agreement as written), it is normallyadmitted if it is consistent with the writing, unless the court finds that there is totalintegration or that the matter is covered by the agreement and the additional matters wouldnaturally have been reduced to writing if the parties intended it to be a part of their contract.

When the parol evidence rule is applicable, evidence may still be admitted under a number oftheories:

• the court may find that there is only partial integration, that this matter is notcovered by the writing, that the evidence is consistent with the writing, and that itsimply adds to the agreement and does not contradict it.

• even where there is full integration, the court may find that the evidence offeredrepresents a separate deal. For example, if the writing covers the sale of a house andthe oral evidence goes to show a sale of personal property in connection with the saleof the house, the court may find that the oral evidence proves a distinct and separatecontract.


• if there is an ambiguity in the contract, the evidence may be admitted for the purposeof interpreting the agreement.

• the evidence may be admitted to prove a defense such as fraud in the inducement,mistake, failure of consideration, failure of a condition, or that the contract is void orvoidable.

The parol evidence rule does not apply in any way to evidence of agreements between theparties subsequent to the time the writing was signed.

VII. CONDITIONS

A. EXPRESS CONDITIONS

1. Creation Of Condition

Performance by one or both of the parties may be made expressly conditional in thecontract. The effect of such condition is that some event must happen beforeperformance is due. For example, a vendor and purchaser of real estate may provide thatthe contract is "conditioned upon the purchaser's ability to obtain a mortgage."

Express conditions can be identified by the language used. Normally, such words as,"if," "provided that," "on the condition that," indicate an express condition. Also, suchlanguage as "when I get my Christmas bonus . . . " indicates a condition.

2. Burden Of Proof On Performance

Express conditions can be "precedent" or "subsequent." A condition precedent means theevent must occur before any obligation to perform arises. A condition subsequent, on theother hand, means the obligation exists under the contract, but it will be discharged by thehappening of an event. The only distinction between conditions precedent andsubsequent is procedural. If the condition is precedent, the plaintiff has the burden ofproving that the condition occurred in order to recover; whereas, if the condition issubsequent, the defendant must prove the happening of the condition to avoid liability.

The Second Restatement does away with this distinction in terminology, but the languageused in making the condition or event of discharge and the policies involved in allocatingthe burden of proof will be examined.

3. Satisfaction

If a contract provides that performance will be "to the full satisfaction" of the other party,this amounts to a condition. When the aesthetic taste of an individual is involved, e.g.,when a contract is for the enlargement of a photograph, the person is not liable if he orshe in good faith determines that the work is not satisfactory. If, however, the contractrequires performance not involving aesthetics but rather mechanical fitness, utility, ormarketability, the question is whether a reasonable person would be satisfied with theperformance.


4. Architect's Certificate

When a construction contract calls for an architect's certificate of performance, this istreated as an express condition, and the builder will not be able to recover unless thecertificate is procured and presented to the landowner. There is no excuse for thiscondition, and no recovery will be granted without it unless there is evidence of fraud orcollusion between the owner and the architect. Even if the architect makes a mistake orfails to exercise reasonable judgment in refusing to give the certificate, recovery will bedenied on the contract. In such cases, however, recovery can be had by the builder inquasi contract for the reasonable value of the work and the materials.

B. CONSTRUCTIVE1. Constructive Conditions Of Exchange

When parties enter into a bilateral contract, the doctrine of constructive conditions ofexchange provides that a party to the contract cannot recover unless he or she has eitherperformed or tendered performance to the other party. Thus, if a builder agrees toconstruct a house on the owner's land, the builder will not be able to recover from theowner unless he completes the building.

2. Partial Performance

a. Meaning

To alleviate the harshness of the above rule when a party has almost but not fullycompleted performance, the courts have developed the doctrine of substantialperformance. This doctrine provides that if a party substantially performs, he or shecan recover on the contract even though full performance has not been tendered.What constitutes "substantial performance" varies from case to case, but it meanssomething like "almost fully performing."

b. Applicability

When the breach is a "willful breach," no recovery is allowed under the doctrine ofsubstantial performance. A willful breach, however, requires something more thanknowledge, and implies some attempt to cheat the other party or to provide less thanwas called for by the contract.

The doctrine of substantial performance does not apply either to express conditions,or to contracts for the sale of goods.

c. Measure of damages

When a builder recovers under the doctrine of substantial performance, the primarymeasure of damages is the contract price minus the cost of replacing or repairingany defect in the builder's performance. This gives to the owner sufficient money toget what she bargained for. Where, however, constitutes "economic waste," themeasure of damages applied is the contract price minus any diminution in valueresulting from the defective performance.


d. Waiver

The owner may "waive the breach" by accepting the performance of the builderknowing that the condition was not fulfilled. Waiver is defined as "a voluntaryrelinquishment of a known right." If there is a waiver by the owner, he can stillrecover damages for any defect in the performance. Thus, the end result is similar toa situation where the substantial performance doctrine is applied.

3. Strict Performance By Seller Under The U.C.C.

The basic obligations of a seller are:

(1) to transfer ownership of the goods to the buyer; and

(2) to tender goods conforming to the warranty obligations.

a. Transfer of ownership

Unless the contract provides otherwise, the seller must convey clear title to the goods;otherwise, there is a breach of the warranty of title.

b. Tender of the goods

The seller must tender the goods in accordance with the contract if there are specificprovisions on tender; otherwise, she must tender them in accordance with the codeprovisions. There are basically four methods of tender stated by the code, the correctone in a particular transaction depending upon the place of tender:

• Seller's place of business: the seller must place the goods at the disposition ofthe buyer and give the buyer notice.

• Shipment contract: the seller has a duty to ship the goods, but no duty todeliver them to a particular place. The seller must deliver to the carrier, make aproper contract for their shipment, and give the buyer notice that the goodshave been shipped.

• Destination contract: the seller must deliver the goods to a particular place, andtender them there by holding the goods at the buyer's disposition and givingthe buyer notice.

• Where goods in hands of bailee: the seller must negotiate a negotiabledocument of title or obtain acknowledgment from the bailee of the buyer'srights in the goods.

Mercantile terms — F.O.B., etc. — can affect the seller's obligations. F.O.B. is themost common term. If it is F.O.B. seller's place of business or city, it is a shipmentcontract, and the seller is obligated only to put the goods in the possession of thecarrier. If it is F.O.B. buyer's place of business or some point other than seller's placeof business, it is a destination contract, and the seller at her own expense and riskmust transport the goods to the specified place.


4. Buyer's Obligations

When a conforming tender is made, the buyer is obligated to accept. If he accepts, thisamounts to performance of one of the buyer's obligations. If the buyer rejects, he hasbreached the contract.

5. Divisible Or Installment Contracts

a. At common law

A divisible or installment contract is one in which the various units of performanceare divisible into separate parts. In other words, part of the consideration by oneperson is set against part of the consideration promised by the other. Typical divisiblecontracts are employment contracts for a set period of time with payment to be madeperiodically. Thus, a contract for employment during a six-month period, with aprovision that the employee is to be paid at the end of each week, is a divisiblecontract and the separate units are the individual weeks. A contract for theconstruction of a building where the owner is to make progress payments whencertain parts of the building are completed, is not a divisible contract unless expresslymade so. The theory is that the payments are simply to allow the builder to continueconstruction, and that the owner wants a completed building, not parts of a building.

If a contract is divisible, the doctrine of constructive conditions of exchange is appliedto each part of the contract separately. Hence, a person can recover the amountpromised for a segment of the contract, even though she does not perform the othersegments, e.g., an employee can recover the week's salary even though she quits atthe end of the week. Damages are recoverable by the other party for breach of theother segments.

b. Installment contracts under the U.C.C.

1) Defined

An installment contract is defined as one in which the goods are to be delivered ina number of shipments, and each shipment is to be separately accepted by thebuyer. Payment by the buyer is due upon each delivery, unless the price cannotbe apportioned.

2) Effect of breach as to that installment

Where there is an installment contract and the seller makes a nonconformingtender or tenders nonconforming goods under one segment of the contract, thebuyer may reject only if the nonconformity substantially impairs the value ofthat shipment to the buyer, and if the nonconformity cannot be cured. Thus, in aninstallment contract, the strict performance rule does not apply; rather, there issomething like the substantial performance rule. Of course, even if the buyer isforced to accept because the nonconformity does not substantially impair thevalue of the shipment, the buyer may recover damages for any loss resulting fromthe nonconformity.


3) Effect of breach on rest of contract

Where there is a nonconforming tender or a tender of nonconforming goods underone segment of an installment contract, the buyer may call off the rest of thecontract, i.e., cancel the contract, only if the nonconformity substantially impairsthe value of the entire contract to the buyer.

C. IMPLIED DUTIES OF GOOD FAITH AND FAIR DEALING

A duty of good faith and fair dealing is implied into all contracts. A subspecies of this dutyis a duty not to hinder the other party's performance and a duty to cooperate, wherenecessary.

D. SUSPENSION OR EXCUSE OF CONDITIONS BY WAIVER, ELECTION,OR ESTOPPEL

Even though a party to a contract would be unable to sue successfully on the contract becausehe has not complied with an express or implied condition, he can postpone the time in whichhe must comply with the condition if it is suspended. He can possibly sue successfullydespite the existence of the condition if he can show that it was waived, that the other partyelected his rights in a way that terminated the condition, or that the other party is estoppedfrom raising the condition as a defense to suit.

If a condition is suspended, the party having the benefit of the condition has only postponedthe time in which he can interpose the noncompliance with the condition as a defense to thecontract. When the period of suspension has expired, the condition is restored to its originaleffect.

On the other hand if the condition is excused, then the party having the benefit of thecondition can never raise it as a defense.

1. Waiver

A waiver occurs when a party, having the benefit of a an express or implied conditionwhich the other party must comply with in order to perform her obligations under acontract voluntarily and knowingly relinquishes that right. The relinquishment can occurexplicitly by language or implicitly by action. If a waiver occurs, an issue can ariseconcerning its scope. If the waiver is of a condition that is effective at one time only,then the waiver is irrevocable and cannot be unilaterally reinstated even if noconsideration is given for the waiver. In some cases the waiver is not a totalrelinquishment of the condition but only a postponement of it. After the period ofpostponement has elapsed, the condition is reinstated.

If there is an installment or divisible contract, a waiver with respect to conditions on oneinstallment is not a waiver for all future installments unless the language of the waiverclearly indicates that the waiver applies to future installments.

2. Election

In some contracts, one party has the choice of alternative methods of performance fromthe other party. For example, a contract could require a seller to deliver either red


widgets or blue widgets at the buyer's election that is to be communicated at a specifictime. If the buyer makes an election for red widgets, then the seller has performed hiscontractual obligation by delivering red widgets even though the seller later changes hismind and asks for blue widgets.

3. Estoppel

A party is estopped to insist upon satisfaction of a condition as a defense to performanceby the other party, if she by her actions creates an impression that she will not insist on acondition, and the other party reasonably relies on that impression to her detriment. Shehas taken a position indicating that the condition will not be enforced and if estoppelapplies, will not be able to take a position inconsistent with her previous position.

Reasonable reliance is an essential element of estoppel. If the buyer realized that theseller was under the impression that she could deliver at a later date, and called the sellerto correct that impression before the seller reasonably relied on that impression, the sellerwould not have the defense of estoppel.

If the contract were divisible, and one party created an estoppel so that she could notenforce the condition with respect to one party of the contract, she could insist on thecondition in later portions of the contract if she insisted on the condition before the otherparty reasonably relied with respect to later portions of the contract.

E. PROSPECTIVE INABILITY TO PERFORM, EFFECT ONOTHER PARTY

Between the time a contract is made and the time for performance, each party should enjoy areasonable expectation that performance will be forthcoming when due. A party'sexpectations of performance may be diminished by the occurrence of some event after thecontract was made. A common example of this is a credit sale when the buyer becomesinsolvent prior to the time the goods are delivered. Such cases have generally been classifiedas examples of prospective inability to perform. The law is less settled in the area ofprospective inability to perform than it is in cases of anticipatory repudiation, and in general,there is a reluctance to excuse a party from performing solely on the ground that he does notexpect counter-performance to be given.

1. Seller's Remedies Under The U.C.C.

The seller can cancel credit terms or stop goods in transit if the buyer becomes insolventbefore delivery of the goods.

Either party can demand assurance of performance if she has reasonable grounds forinsecurity about the other party's ability or willingness to perform. Assurances must bein writing, and until they are provided, the other party may suspend performance.

2. Stoppage In Transit

A seller who has shipped goods to a buyer may stop the goods in transit if the buyereither becomes insolvent or breaches the contract. If the ground is insolvency, thenstoppage is available even if the goods were sent in less than carload lots; otherwise, onlyif shipped in carload lots.


The right to stop in transit terminates where:

• buyer has received the goods; or

• carrier or warehouseman has acknowledged buyer's rights; or

• goods have been reshipped by carrier; or

• a negotiable document of title has been given or negotiated to the buyer.

VIII. REMEDIES

A. TOTAL AND PARTIAL BREACH OF CONTRACT

1. Buyer's Remedies Under The U.C.C. For Breach Of Contract By The Seller

When the seller's time for performance arises, the seller may do one of three things:

nothing (breach by seller);

make a nonconforming tender (breach by seller);

make a conforming tender (performance by seller).

The seller must strictly perform all obligations under the contract. There is no doctrine ofsubstantial performance, except in installment contracts.

a. If seller makes no tender

If the seller does not tender the goods when the time for performance arises, there is abreach by the seller. The buyer has three basic remedies:

(1) Damages: (market price minus contract price);

(2) Cover: Purchase similar goods elsewhere and sue for cover price minuscontract price;

(3) Specific Performance: Unique goods; or

(4) Replevin: Identified goods where similar goods are unavailable in themarketplace.

The buyer also can obtain incidental and consequential damages where damages orthe cover remedy is sought.

The buyer can obtain the goods from the seller if partial payment has been made andthe seller becomes insolvent within ten days of payment. The buyer must tender therest of the price.

b. If seller makes nonconforming tender

If either the tender is nonconforming or the goods are nonconforming, the buyer hasthe right to reject all, accept all, or reject some and accept some.

The buyer has the right to inspect the goods before deciding whether to accept orreject. Inspection can be at or in any reasonable time, place, and manner.


1) Rejection

Rejection requires the buyer to give the seller notice that he is rejecting. If thebuyer has possession of the goods at the time of rejection, he must hold them for areasonable time to allow the seller to remove them. If the seller has no local agentat the place of rejection (usually the city in which the buyer is located), thebuyer's obligations depend upon whether the goods are perishable. In the absenceof other instructions from the seller, (1) the buyer must sell perishable goods forthe account of the seller; and (2) the buyer may store non-perishable goods at theseller's expense, reship them to the seller, or sell them for the seller's account.

If the buyer rejects, the buyer has the same basic remedies as if no tender wasmade by the seller: (1) damages, (2) cover and cover damages, and (3) specificperformance or replevin. Incidental and consequential damages can also berecovered.

2) Acceptance

Acceptance occurs when: (1) the buyer says she is accepting, (2) the buyer usesthe goods, or (3) the buyer fails to reject.

If the buyer accepts a nonconforming tender, the buyer can still recover for anydamages resulting from the defect, provided notice of the defect is given within areasonable time. If the nonconformity is in the goods (breach of warranty), thenthe measure of damages is the value the goods would have had if as warranted,minus the actual value with the defect. If the breach was in the tender obligation(e.g., delivered late), then the buyer may recover all losses resulting in theordinary course of events.

The buyer can revoke acceptance (thus putting herself in the same position as ifshe had rejected), if (1) she accepted with a reasonable expectation that the sellerwould cure and the seller did not, or (2) the defect was hidden.

3) Right to cure

The seller has a right to cure a defective tender if:

• there is still time to perform under the contract; or

• the seller had reasonable grounds to believe the buyer would acceptdespitethe nonconformity.

If the seller cures, it is just as though he had made proper a tender in the firstplace.

2. Seller's Remedies Under The U.C.C. For Breach by Buyer

a. Seller's right to price upon acceptance

If the buyer has accepted the goods, the seller has a right to the price. The seller'sremedy when the buyer refuses to pay the price is to sue for the price.


The amount is generally set by contract, but if not, the buyer must pay a reasonableprice. The parties can postpone agreement about the price when they enter thecontract.

Payment by check is permitted unless the seller demands cash. If the seller demandscash, the buyer is entitled to a reasonable time to obtain it.

The price is due after the goods are physically delivered to the buyer and the buyerhas an opportunity to inspect, unless the contract provides otherwise. The buyer hasno right to inspect before paying in the following cases:

• C.O.D. contract;

• C.I.F. or C.& F. contract;

• payment is against documents.

Of course, payment does not constitute "acceptance" if there is no right of inspectionbefore payment.

b. Seller's right to reclaim goods

If the buyer was insolvent when the goods were delivered and the price is not paid,the seller can recover the goods if demand is made in ten (10) days, provided nogood-faith subpurchaser has bought the goods from the buyer.

In a C.O.D. sale, if the buyer has given a worthless check, the seller can reclaim thegoods.

c. Seller's remedies upon wrongful rejection

If the buyer wrongfully rejects, the seller has three basic remedies: damages, resale,or recovery of the price. The seller may also recover incidental damages along withcontract damages or resale.

d. Damages for wrongful rejection

The measure of damages is generally contract price minus market price. However,if Contract Price minus Market Price does not fully compensate the seller, she can suefor lost profits as an alternate measure of damages. In either case the seller is entitledto incidental damages and the buyer must be credited with any partial payments andwith expenses saved by the seller (e.g., by the seller's resale of the goods).

e. Resale

If the seller elects to resell and sue for contract price minus resale price, the resalemust be:

• only of goods identified to the contract, and

• commercially reasonable.

f. Price

The seller can recover the price after rejection only if the goods are not salable in theseller's ordinary course of business.


The seller can retain deposits paid by the buyer up to the amount stated in aliquidated-damages clause, or, in the absence of such a provision, (2) 20% of thevalue of performance, or $500, whichever is less.

B. ANTICIPATORY BREACH

1. At Common Law

a. Repudiation of promise

The doctrine of anticipatory breach is applicable when a promisor, before the timefor performance arises, repudiates his promise.

A repudiation must be "clear and unequivocal." It may be by acts instead of words.The bankruptcy of the promisor, prior to performance, has been held a repudiation.However, a good-faith denial of an obligation under the contract is not a repudiation.

b. Promisee's options

When a promisor repudiates, the promisee has the option of ignoring the repudiationand demanding that the promisor perform at the agreed upon time, or treating therepudiation as a breach of the contract.

If treated as a breach, the promisee may cancel the contract, sue for damages or, ifappropriate, seek specific performance.

If the promisee ignores the repudiation, he cannot continue to perform under thecontract if this will increase the damages of the promisor.

The repudiation relieves the promisee of any obligations under the contract.However, he must be able to prove that he would have been "ready, willing, and able"to perform but for the repudiation.

c. Retraction of repudiation

A repudiation may be retracted until the promisee: (a) acts in reliance on therepudiation; (b) signifies her acceptance of the repudiation; or (c) commences anaction for breach of contract. Notice of the retraction sufficient to allow the promiseeto perform her contractual obligations must be given.

d. Unilateral contracts

The doctrine of anticipatory repudiation does not apply to unilateral contracts andmay not be used if the promisee has completed performance prior to the repudiation.

2. Anticipatory Repudiation Under The Uniform Commercial Code

Anticipatory repudiation occurs when there has been an unequivocal refusal of the buyeror seller to perform, or when a party creating reasonable grounds for insecurity fails toprovide adequate assurances within 30 days of demand for assurances.

The repudiation can be retracted if the other party has not canceled the contract ormaterially changed position. Repudiation allows the nonrepudiating party to resort to anyremedy given by the contract or code.


C. ELECTION OF SUBSTANTIVE RIGHTS AND REMEDIES

When the defendant induces the plaintiff to enter into a contract by fraud, or when thedefendant materially breaches the contract, the plaintiff has three types of remedies availableto him.

• In limited instances he can require that the defendant perform the contract byobtaining a decree for specific performance.

• He can seek damages for breach of contract.

• He can rescind the contract and recover what he put into performing the contract.

The issues are when he can pursue more than one of these remedies, and when the election topursue one remedy bars him from changing his mind and pursuing another, and what actionis considered an election.

1. Multiple Recoveries Not Permitted

One principle that is clear is that the plaintiff cannot pursue multiple remedies in order toobtain a double recovery. For example the plaintiff could not obtain a decree for specificperformance of a land contract and at the same time obtain expectancy damages forbreach of the contract to convey.

On the other hand, she would be able to obtain specific performance some incidentaldamages, related to her equitable remedy.

In a lawsuit for breach of contract, a plaintiff under the Federal Rules of Civil Procedureand similar state procedural rules can bring a lawsuit asking for inconsistent remediessuch as specific performance and damages, but at the successful conclusion of thelawsuit, she will only obtain a judgment for one remedy. If her preferred remedy isspecific performance, but the court in its discretion refuses to order the contractperformed, it can order the damage remedy in the alternative.

2. When Does Election Occur

The most common situation involving election involves the choice between damages,where the plaintiff affirms the existence of the contract and seeks monetary compensationfor the difference between the performance he bargained for and that which he received,and rescission where the plaintiff seeks to restore the status quo which existed before thecontract was formed.

It is clear that if one of these alternative remedies is pursued to judgment, the plaintiffcannot change his mind and pursue the other. The procedural rules of res judicata wouldbar such action.

Likewise, if the plaintiff communicates to the defendant that he is seeking one of thesealternative remedies and the defendant relies on that representation, the principals ofestoppel will prevent the plaintiff from abandoning one remedy and seeking the other.

Some courts have found an election at a much earlier stage, and prohibited the plaintifffrom changing his mind and seeking a different remedy once he has communicated hischoice of remedy to the defendant, even if the defendant has not relied upon that decision.


A plaintiff may also be denied the remedy of rescission if he has knowledge of the basisfor seeking rescission and fails to pursue that remedy for a period of time during whichthe defendant changes his position. The plaintiff in this case would still be entitled to thedamages remedy, as long as the statute of limitations has not expired.

3. Election Of Remedies Under The Uniform Commercial Code

Comment to U.C.C. Section 2-703 dealing with seller's remedies provides that the articlerejects any doctrine of election of remedy as a fundamental policy and thus the remediesare essentially cumulative in nature and include all of the available remedies for breach.Whether the pursuit of one remedy bars another depends entirely on the facts of theindividual cases. In dealing with buyer's remedies §2-711 of the code provides that thebuyer may cancel and whether or not she has done so may in addition to recover so muchof the price as has been paid, obtain damages based upon cover or otherwise.

D. SPECIFIC PERFORMANCE, INJUNCTION AGAINST BREACH,DECLARATORY JUDGMENT

1. In General

When damages are an inadequate remedy, equity will order specific performance of thecontract. If the equity decree is not observed, the breaching party is in contempt and maybe fined or imprisoned.

2. Factors Considered

In determining whether damages are adequate, the following factors should be taken intoconsideration:

• the difficulty of proving damages with reasonable certainty (e.g., the difficultymay be posed by sentimental associations and aesthetic interests, not measurablein money, which would be affected by breach);

• the difficulty of procuring a suitable substitute performance by means of moneyawarded as damages; and

• the likelihood that an award of damages could not be collected.

3. Real Property

Because every parcel of real property is considered unique, contracts involving thetransfer of an interest in real property may be enforced by an order of specificperformance.

4. Limitations On Court's Powers To Order Specific Performance

Even if the remedy of damages is inadequate, specific performance will not be grantedwhere the court cannot supervise enforcement. Thus, courts do not grant specificenforcement of contracts for personal services, although they may restrain the breachingparty from working for another. For example, if a performer agrees to sing in a particulartheater, the court will not grant a decree ordering the person to sing at that theater, but it


will grant a decree restraining the performer from appearing at competing theaters.Lumley v. Wagner, 42 Eng. Rep. 687 (1852).

Also, courts will usually refuse to grant specific performance in an action where the act orforbearance will occur outside the jurisdiction of the court. Thus, if A agrees to sell landto B, and both A and the land are located outside the jurisdiction of the court, the courtwill usually not grant a decree of specific performance upon A's refusal to deed the land.

Since a decree of specific performance is an equitable remedy, the usual rules for seekingequitable relief apply, e.g., the clean hands doctrine. Whether the court will grant therelief requested is always within the discretion of the court.

5. Specific Performance Under The U.C.C.

In sale of goods cases, §2-716 of the Uniform Commercial Code provides that specificperformance may be granted where the goods are unique or in other propercircumstances, such as for breach of a requirements contract where there is not anotherconvenient supplier.

6. Declaratory Judgment

If the rights and obligations of the parties under a contract are unclear, and an actualdispute exists between the parties concerning those rights and obligations, either partymay bring a declaratory judgment action to obtain an adjudication of those rights andduties. It is not available, however, to resolve moot issues or theoretical problems whichhave not risen to an actual dispute. For example, this form of litigation can be broughteven before a breach of contract, to adjudicate whether a specific proposed action by oneparty would constitute a breach. If the court found that a specific action constituted abreach and a party pursued that course of action, the principles of collateral estoppelwould constitute an adjudication of breach which could not be relitigated at a subsequentaction for damages. Thus a declaratory judgment action is often an effective, indirectway of enforcing a contract prior to a breach.

E. RESCISSION AND REFORMATION

1. Rescission

The non-defaulting party to a contract can choose the rescission remedy, which cancelsthe contract, and requires a return of any deposits or other benefit conferred on the otherparty. The rescission remedy is advantageous to the nonbreaching party when he hasmade a disadvantageous contract, and will be better off if he can completely undo thecontract. For example, if homeowner hires contractor to paint his house for two thousanddollars, and gives contractor a five hundred dollar contract, and contractor defaults on thecontract by not starting to paint the house in a timely way, homeowner can rescind thecontract and get his five hundred dollars back, and then make a more advantageousagreement with another painter to paint his house for fifteen hundred dollars.

Rescission can also occur by the mutual agreement of the parties.


2. Reformation

When reformation of the contract is available to cure a mistake, neither party can avoidthe contract. For example, assume that A agrees to sell Redacre to B, with B agreeing topay $50,000 and to "assume a mortgage in the amount of $100,000." If the parties fail toinclude a provision regarding the assumption of the $100,000 mortgage, A can obtainreformation of the agreement to reflect B's promise. A has no right to avoid the contractbecause reformation adequately remedies the mistake in drafting the written agreement.

F. MEASURE OF DAMAGES IN MAJOR TYPES OF CONTRACTAND BREACH

The primary objective of contract damages is to put the nonbreaching party in the sameposition that she would have been in had the contract been performed. Thus, it issometimes said that the plaintiff in a contract action is entitled to the "benefit of herbargain" or her "expectancy damages." Although "expectancy damages" are the normalmeans of determining damages in a contract case, two alternative types of damages arerecognized: "restitution damages" and "reliance damages." In both of these the plaintiff isnot to be put in the position that she would have been in had the contract been performed, butrather to be put in the position she was in at the time the contract was made.

In addition, a plaintiff may have suffered damages that go beyond loss of the benefit of herbargain. These are classified as "consequential damages."

1. Expectancy Damages

a. In general

Expectancy damages are normally measured by a formula that looks at the value ofthe performance of the breaching party and the consideration promised for thatperformance. The general formula is the market value of the promisedperformance less the consideration promised by the nonbreaching party. Forexample, assume a contract were for the painting of Homeowner's house which wasbreached by Painter. The damages would be Homeowner's cost to hire a new painterless the original contract price. Thus, if the original contract price was $2500 andHomeowner, after Painter's breach, hired Brush to paint the house for $3000,Homeowner's damages would be $500. This $500 damages from Painter putsHomeowner in the position he would have been in had the contract been performed —he has his home painted for a net cost of $2500.

Conversely, assume that that Homeowner had breached in the example above, andPainter's cost of painting the house was $2000, Painter would be able to collect $500in damages.

Even if no second contract is entered into by which to measure damages, the samebasic formula exists: In contracts for services; compare the difference between thevalue of the services to be performed under the contract with the price that waspromised for those services.


b. Partial performance

If one of the parties has partially performed at the time of the breach of the otherparty, the performing party can recover for work done at the contract rate plus"expectancy damages" for the work not yet performed. Thus, assume a contractoragreed to paint O's house for $10,000, with $9,000 representing the cost ofperformance and $1,000 representing the contractor's profit. If 0 breaches whenContractor is half finished, having thus far incurred $4,500 in costs, Contractor couldrecover the $4,500 and the $1,000 in anticipated profit, for a total of $5,500. Shecould not recover the remaining $4,500, which represents the costs not incurred bynot yet finishing the contract.

2. Nominal Damages

Damages are not an essential element in a cause of action for breach of contract. If nodamages are alleged or none are proved, the plaintiff is still entitled to a judgment for"nominal" damages: usually six cents or $1.

G. CONSEQUENTIAL DAMAGES, CAUSATION, CERTAINTY,AND FORESEEABILITY

1. Consequential Damages

A breach of contract may result in damages to the nonbreaching party that go beyond thedifference between the value of the nonbreaching party's performance and what thenonbreaching party would have received had there been no breach. For example, if acontract calls for the construction of a motel and the builder fails to perform, the basicmeasure of damages would be the difference between the contract price and the amountthat it cost the owner to have someone else construct the building. However, the failureto construct the building may cause additional damages to the owner in the way of lostprofits because of delay, or by causing him to breach contracts he may have made withthird parties for the use of the building. If such damages can be proven by the plaintiffand were foreseeable by the breaching party at the time of the contract, consequentialdamages are recoverable.

2. Causation

Contract law has a doctrine similar to the requirement of "but for" causation in tort law.If the plaintiff is seeking damages, the defendant can defend on the ground that the lossesthat the defendant seeks to recover would have occurred whether or not the defendantbreached her contract. This issue can be simply illustrated where the plaintiff seeks torecover damages from a components supplier who delivered late, because that supplierknew that the plaintiff would be penalized if she delivered the final product beyond aspecified date. If the defendant delivered the parts late, but at the time they should havebeen delivered the plaintiffs employees were on strike so that the final product could nothave been delivered on time even if the parts were delivered on time, the plaintiff couldnot recover for delay from the defendant, because the defendant's breach was not a "butfor" cause of the plaintiffs damage.


3. Certainty

In order to recover damages, a plaintiff must prove the dollar amount of the damages withreasonable certainty. To put this in the negative: the damages must not be toospeculative. The Restatement (Second) of Contracts §352 requires that the evidence ofthe amount of damage must afford "a sufficient basis for estimating their amount withreasonable certainty." This does not mean that the plaintiff can recover nothing if part ofthe damages he attempts to prove fails to meet the requirement of certainty; thosedamages that were proved with sufficient certainty can be recovered, although others maynot be allowed. The Restatement gives the following examples, among others, of theapplication of this rule:

• A and B contract to form a partnership and to continue it for aspecified period. B dissolves the partnership prior to the timespecified. A could recover damages for lost profits by proving whatthe profits were during the life of the partnership.

• A contracts to allow B to operate his established coal mine and topay B $25 per ton for coal produced. A breaches the contract byrefusing B entry to the land. If the mine has been operating for anextended period of time and the veins are well established, B canrecover damages by showing the cost of producing the coal, theamount that could have been produced during the contract period,and the market price at which it could have been sold.

Courts are hesitant to award damages for lost profits because they are, in the eyes of mostcourts, too speculative. This is particularly true in a new or relatively young enterprise.For example, if a plaintiff is suing to recover lost profits because of the defendant'sfailure to deliver a boiler necessary for plaintiff's new factory, a court may award theplaintiff the rental value of his factory during the time it was inoperative, but will notgrant an award on the presumption that the new enterprise would have made a profit.

4. Foreseeability And The Rule Of Hadley v. Baxendale

The leading case on consequential damages is Hadley v. Baxendale, 9 Exch. 341 (1854),which involved an action by the owner of a factory against a carrier. The owner hadcontracted to have a shaft needed to run machinery in the factory transported to a thirdparty, who was to use it as a model for the manufacture of a new one. The shipment wasdelayed by the defendant-carrier, and the plaintiff asked damages to compensate for theloss resulting from the stoppage of work in the factory during the delay. The court heldthat the damages recoverable in a contract action are those which "may fairly andreasonably be considered either arising naturally, i.e., according to the usual course ofthings, from such breach of contract itself, or such as may reasonably be supposed tohave been in the contemplation of both parties at the time the contract was made, as theprobable result of the breach of it."

Thus, the rule under Hadley v. Baxendale is that damages are recoverable if they were the"natural and probable consequences," or if they were "in the contemplation of the


parties at the time the contract was made." In other words, the damages must be"foreseeable."

H. LIQUIDATED DAMAGES AND PENALTIES

Parties to a contract may fix the amount of damages that will be recoverable in the event ofbreach; however, a party may not be "penalized" for her breach of contract. Therefore,penalty clauses in a contract are unenforceable. A provision for liquidated damages willbe enforced, and not construed as a penalty, if the amount of damages stipulated in thecontract is reasonable in relation to either the actual damages suffered, or the damagesthat might be anticipated at the time the contract was made.

I. RESTITUTION AND RELIANCE RECOVERIES

1. Restitutionary Damages

Restitutionary damages restore to the plaintiff whatever benefit he has conferred uponthe defendant prior to breach. Restitutionary damages may be recovered even thoughthe plaintiff would have suffered a loss had the defendant not breached. They may becombined with expectancy damages.

2. Reliance Damages

Reliance damages may be recovered where the nonbreaching party has incurredexpenses in reasonable reliance upon the defendant's performing her contractualobligations. Unlike restitutionary damages, there is no requirement that the defendanthave benefited from the plaintiffs expenditures.

J. REMEDIAL RIGHTS OF DEFAULTING PARTIES

A party who commits a material breach of his contract obligations cannot sue for contractdamages. For example, assume Painter enters into a contract with Homeowner to paintHomeowner's house for $5,000 by July 1 payment to be made upon completion of the job. IfPainter abandons the job after the home is 60% painted, he may not collect $3,000, 60% ofthe contract price. However, if Homeowner hires Brush who completes the work for $4,000,Painter has conferred a benefit upon Homeowner for the fair value of his work in painting thehouse and can sue in quantum meruit for the fair value of the benefit conferred. In this casethe court would probably find that the benefit conferred was $1,000 because Homeownerplaced a value of $5,000 in having his house painted, and only expended $4,000 to haveBrush complete the job.

K. AVOIDABLE CONSEQUENCES

A party to a contract has the obligation of avoiding or mitigating damages to the extentpossible by taking such steps as do not involve undue risk, expense, or inconvenience. Thenonbreaching party is held to a standard of reasonable conduct in preventing loss. Thus, theplaintiff in a contract action cannot recover damages which were foreseeable by her, andwhich she could have avoided by the expenditure of reasonable effort. For example: Acontracts to manage B's farm for a year. Several weeks before the planting season, A quits.If B could have found another manager by the exercise of reasonable effort, B cannot recoverfor damages resulting from the fact that no crops were planted.


L. UNIFORM COMMERCIAL CODE ISSUES

1. Risk Of Loss

a. General rules

Where the goods are lost or destroyed through no fault of the seller or the buyer, adetermination must be made as to who must initially suffer this loss. The basic rule isthat the risk of loss is on the seller until he or she completes his or her deliveryobligations under the contract. Thus, if there is a "shipment contract," the sellercompletes the delivery obligations by tendering the goods to the carrier, and making aproper contract for their shipment. At that time, there is a shifting of the risk of lossfrom the seller to the buyer, and if the goods are destroyed or lost while they are intransit, the risk of loss is on the buyer and the buyer must pay the contract price.

b. Special rules

There are three "special" rules regarding risk of loss, all of which deal with situationswhere one of the parties is in breach:

• Where the seller delivers nonconforming goods, the risk of loss remains on theseller until the buyer accepts or there is a cure.

• Where the buyer rightfully revokes his or her acceptance, the risk of loss shiftsback to the seller to the extent of any lack of insurance coverage by the buyer.

• Where the buyer repudiates or breaches after the goods have been identified to thecontract but before the risk of loss has shifted to him, the risk of loss isimmediately shifted to the buyer to the extent of any lack of insurance coverageon the part of the seller.

2. Insurable Interest

a. Seller's insurable interest

In order for a person to insure goods, he or she must have an "insurable interest" inthe goods. Under Article 2, the seller retains an insurable interest as long as he or shehas title to the goods or has a security interest in them. Absent a contrary provision inthe contract, the title passes from the seller to the buyer when the seller completes hisor her delivery obligations. Thus, at that time, the seller's insurable interest ceasesunless the seller retains a security interest in the goods. Remember that a seller doesnot automatically get a security interest, even though the buyer is to pay sometime inthe future. There must be a voluntary granting of a security interest by the buyer tothe seller in accordance with the provisions of Article 9 of the code.

b. Buyer's insurable interest

The code provides that the buyer obtains an insurable interest in the goods as soon asthe goods are "identified to the contract."


c. Overlapping insurable interests

It is possible for both the seller and the buyer to have insurable interests at the sametime under the provisions of Article 2 of the code.

3. Title And Good-Faith Purchasers

a. Entrusting provisions

The code provides that delivery of goods by the owner to one who sells goods of thatkind gives to the transferee the power to convey good title to a buyer in ordinarycourse. Thus, if I give my watch to a jeweler to have it repaired and the jeweler alsosells used watches, if the jeweler sells the watch to a buyer in ordinary course, thebuyer would get good title even against me. A buyer in ordinary course is one who ingood faith and without knowledge of a third party's ownership rights or securityinterest, buys from someone selling goods of that kind.

b. Voidable title

Where the true owner of goods sells them to another, but the sale is voidable becauseof fraud or because it was a cash sale and the buyer has not paid or has paid with adishonored check, the code takes the position that the buyer has the power to transfergood title to a good-faith purchaser. This is true even though the fraud may bepunishable as larceny under the local law.

IX. IMPOSSIBILITY OF PERFORMANCE

A. IMPOSSIBILITY

Impossibility of performance arises when the performance of one of the parties becomesimpossible. It is essential that the event giving rise to the impossibility be unforeseeable atthe time the contract was made. The typical situations are:

• where the performance becomes illegal after the contract is made;

• where there is a lease or sale of specific goods and they are destroyed;

• where there is a personal services contract, and the person who is to provide theservices dies or becomes incapacitated.

When impossibility of performance arises, a party is excused from performing the contract.However, a person cannot require that the other party accept substitute performance. If theparties desire, one or the other can assume a greater risk in their contract, e.g., become liableto pay damages even if performance becomes impossible. Also, a liquidated damages clausecan be made to apply to impossibility situations by specific agreement of the parties.

B. IMPRACTICABILITY OF PERFORMANCE

1. Total Impracticability

Impracticability of performance provides an excuse (defense) for nonperformance of thecontract similar to impossibility in contract law. This excuse exists when:

• goods identified at the time of contracting are destroyed;


• performance becomes illegal; or

• performance has been made "impracticable."

The excuse applies only when the event was not foreseeable and when nonoccurrence ofthe event was a basic assumption of the contract.

2. Partial Impracticability

When impracticability affects only part of the seller's ability to perform, the goodsactually produced must be apportioned among all the buyers with whom the seller hascontracted. The buyer, however, may refuse to accept and may cancel the contract.

When the agreed method of transportation or payment becomes impracticable:

• the performing party must use a commercially reasonable substitute if available,and

• the substitute performance must be accepted.

C. FRUSTRATION OF PURPOSE

The doctrine of frustration of purpose applies when the value of the contract is totally oralmost totally destroyed for one of the parties. Again, the event destroying the value of acontract must have been unforeseeable. If the doctrine applies, the party is excused fromperforming the contract. However, American courts very rarely find the doctrine applicable.

X. DISCHARGE

A party's duties under the contract may be discharged by full performance or without fullperformance by operation of law or by act of the parties. Discharge by operation of law occurswhen enforcement of the obligor's duty is discharged in bankruptcy or by the running of thestatute of limitations. A duty may be discharged by impossibility or frustration of purpose.Discharge may occur pursuant to the terms of the contract by nonoccurrence of a conditionprecedent to performance or by occurrence of an event of discharge. A duty may be dischargedby merger into an award in arbitration, into a judgment, or into a substituted contract or novation.The parties may also modify their duties by means of a mutual agreement of rescission, anaccord and satisfaction, or an account stated.

Unilateral forms of discharge, such as a renunciation of rights or a release, generally must besupported by consideration. The most common exception today is that a renunciation or releasecontained in a signed and delivered writing will be effective under the Uniform CommercialCode without consideration.



CONTRACTS

I. FORMATION OF CONTRACTS

A. MUTUAL ASSENT

1. OFFERS

■ A communication is an offer for a bilateral contract if it sets forth a proposedexchange of promises in such a manner that the person to whom it isdirected reasonably believes that she can enter into a binding contract byaccepting those terms.

■ The person selling goods at auction is not bound by the highest bid unlessshe advertises the auction as "without reserve," in which case placing thegoods at auction is making an offer to the highest bidder.

2. ACCEPTANCE

■ At common law, an offer can only be accepted by the offeree agreeing,before the offer is revoked, to all of its terms in the time and mannerspecified by the offeror (or in a reasonable time and in a reasonable manner,if the offeror did not specify the manner of acceptance).

■ Unless the offeror specifically states that her offer may be accepted by silenceor the course of dealings between the parties indicates that the offer will beaccepted if the offeree does nothing, silence will not operate as anacceptance.

3. REJECTION

■ If the offeree rejects an offer or makes a counteroffer, the original offer isterminated and cannot thereafter be accepted, even if the time for expirationof the offer has not yet occurred.

■ If the offeror has made an offer that she permits to be accepted in part,acceptance of part can be considered a rejection of the remainder.

■ An inquiry in response to an offer ("Would you consider a lesser price?") isnot a rejection.

2 MicroMash MBE In Brief: Contracts Bar Exam Alerts

4. REVOCATION OF OFFERS

■ At common law, an offer is generally revocable even if the offer says it willremain open for a specified time. At common law, an offer is irrevocable forthe time specified only if an option contract is formed, i.e., if the offeree hasgiven consideration to the offeror in exchange for the offeror's agreement tokeep the offer open.

■ Under the U.C.C., a "firm offer" cannot be revoked before the expiration date.Such a "firm offer" can only be made by a merchant, must state in writingthat the offer is irrevocable until a date certain, and cannot remainirrevocable for more than three months.

■ An offer for a unilateral contract is irrevocable by the offeror if the offereehas, with the knowledge of the offeror, started substantial performance.

■ An offer is revoked if the notice of revocation is communicated to the offereein any manner before the offer is accepted. The notice of revocation can beany communication that fairly indicates to the offeree that the offeror haswithdrawn the offer.

■ In a real estate brokerage transaction where the owner makes an offer for aunilateral contract that the broker accepts by producing a buyer ready,willing, and able to buy at the listing price, the offer is automatically revokedby the seller's acceptance of an offer to purchase the property from a buyernot produced by the broker.

■ An offer for a contract that would fall within the Statute of Frauds can berevoked orally.

■ If the offeror dies before the offer is accepted, it is revoked. However, if theoffer is accepted, then death does not terminate the obligations of thecontract.

5. MISTAKE, FRAUD, AND DURESS

■ A contract can be avoided on the grounds of unilateral mistake if the mistakewas so obvious that the offeree should have known of the mistake at thetime he accepted the offer.

■ A party has the right to rescind a contract if it was entered into in reliance onan untrue material fact.

■ If each of the parties innocently has a different understanding of the meaningof the words of the agreement, then there is no contract.

6. INDEFINITENESS AND ABSENCE OF TERMS

■ If the price term is missing in a U.C.C. transaction, there is a contract at areasonable price.

MicroMash MBE In Brief: Contracts Bar Exam Alerts 3

7. BATTLE OF THE FORMS

■ Under the U.C.C., a valid contract is formed if the offeree accepts the offer,even if she proposes different or additional terms. Between merchants, thedifferent or additional terms become part of the contract if they do notmaterially alter the offer and the offeror does not object.

■ Under the U.C.C., a seller can accept an offer either by a promise to sell thegoods requested by the buyer or by shipping conforming goods in accordancewith the offer.

B. CAPACITY TO CONTRACT

■ A minor can disaffirm a contract, even one that has been completed, within areasonable time of reaching the age of majority.

C. IMPLIED-IN-FACT CONTRACTS AND QUASI CONTRACTS

■ If a person accepts services from someone in the business of providing thoseservices, there is an implied-in-fact contract to pay for the reasonable value ofthose services.

■ If necessary services are rendered to a person at a time when she lacks themental capacity to request such services, (e.g., she is unconscious at the timemedical services are rendered), there is an implied-in-law contract to pay forthem.

■ A quasi contract exists when there is no enforceable contractual relationshipbetween the parties, but one party has conferred a benefit on the other notintended to be gratuitous. The party conferring the benefit is entitled to collectthe fair value of the services rendered.

■ A party does not have the right to sue in quantum meruit for a benefit conferredif there is an enforceable right to sue under a contract.

II. CONSIDERATION

A. BARGAIN AND EXCHANGE

■ The concept of bargain is the essence of consideration. If a party asks forsomething that she wants, even though it does not directly benefit her, andpromises something in return, there is valid bargained-for consideration.

■ A gift contingent on a minor condition that is not bargained for by the donor,such as "I will give you a birthday present if you come down and pick it up,"does not amount to a contract supported by consideration.


B. ADEQUACY OF CONSIDERATION

■ The value of what a party promises or requests is irrelevant for purposes ofdetermining if there is valid consideration.

■ If a party to a contract performs the promise he makes, he is entitled to enforcethe contract according to its terms, even if he is getting far more than he hasgiven.

■ An illusory promise, one that gives the party the unilateral right to do anythingthey want, is not valid consideration.

C. MORAL OBLIGATIONS AND DETRIMENTAL RELIANCE

■ One party's promise to make a gift is enforceable under the doctrine ofpromissory estoppel if (1) the donor-promisor knows that the promise will inducesubstantial reliance on the part of the promisee, and (2) failure to enforce thepromise will cause substantial hardship.

• A service that has already been gratuitously rendered is not valid considerationfor a later promise to pay for that service.

■ A promise in writing to pay a debt that is barred by the statute of limitations isenforceable according to its terms without new consideration.

D. MODIFICATION OF CONTRACTS; PRE-EXISTING DUTY RULE

■ In a non-U.C.C. contract, consideration is required to support a modification. Ina U.C.C. contract, consideration is not required to support a modification.

• If each side to an existing contract modifies its rights and obligations inexchange for modification of the rights of the party(ies) on the other side, thereis consideration.

■ If the parties agree to rescind an executory (i.e., uncompleted) contract,consideration is found in the mutual agreements to give up rights under thecontract.

■ The agreement to perform an act that a person is already legally obligated toperform is not valid consideration.

III. THIRD-PARTY BENEFICIARY CONTRACTS

A. INTENDED BENEFICIARIES

■ Intended beneficiaries are those persons who have a right to sue on a third-partybeneficiary contract because the original contracting parties either explicitly orimplicitly intended to benefit them.


• If the third-party beneficiary contract is designed to satisfy an obligation of thepromisee to the third party, the third-party beneficiary does not give up his rightsagainst the promisee until such time as the promisor renders performance to thethird-party beneficiary.

■ The third party need not provide consideration to be able to sue on a third-partybeneficiary contract.

■ The promisor of a third-party beneficiary contract has a valid defense in a suit bythe intended beneficiary if the promisee fails to perform his obligations to thepromisor.

B. INCIDENTAL BENEFICIARIES

■ An incidental beneficiary, a person that the original contracting parties did notintend to benefit, has no right to enforce a third-party beneficiary contract.

C. MODIFICATION OF THIRD -PARTY BENFICIARY'S RIGHTS

• The promisor and promisee of a third-party beneficiary contract can modify theircontract to the detriment of the intended beneficiary only until the beneficiaryeither assents to the contract at a party's request, sues on the contract, orchanges his position in reliance on it.

IV. ASSIGNMENT AND DELEGATION

A. ASSIGNMENT OF RIGHTS

■ The benefits of a U.C.C. contract are assignable even if the contract prohibitsassignment.

• The benefits of a contract can be assigned without the assignee becoming boundto perform the obligations of the contract.

■ An assignee takes rights under the contract subject to any defenses that thecontracting party has against the assignor.

■ If a party to a contract is notified of the assignment of rights under that contract,the contracting party cannot raise against the assignee rights against theassignor which accrue after notice of the assignment.

B. DELEGATION OF DUTIES

• A contract is not delegable if the party wishing to delegate possesses uniquecharacteristics such that the performance rendered by a delegatee would varymaterially from that bargained for.

• A contract is also not delegable if the contract specifically prohibits it.


■ The party delegating duties (the delegator) remains liable on the contract as asurety for the performance of the delegatee, the party now principally liable onthe contract.

V. STATUTE OF FRAUDS

A. SURETYSHIP

■ An oral promise to pay the debt of another is usually unenforceable because ofthe Statute of Frauds. However, if a person agrees to pay the debt of anotherfor the primary purpose of furthering his own goals, rather than those of thedebtor, the Statute of Frauds will not prevent enforcement of the promise.

B. LAND INTEREST

• In a contract for the sale of land, the memorandum required to satisfy theStatute of Frauds must contain the price.

■ A real estate brokerage contract is not within the Statute of Frauds.

C. CONTRACTS THAT CANNOT BE PERFORMED WITHIN ONE YEAR

■ In determining if a contract can be performed within one year, measure from thetime of the making of the contract to the time prescribed for the end ofperformance, not just the time when performance will take place.

■ A personal services contract for more than a year is within the Statute of Fraudsdespite the fact that the contract would be prematurely terminated if thepersonal service supplier died within the year.

• A contract for life is not within the Statute of Frauds because death could occurwithin a year, which would be the natural termination of the contract.

D. SALE OF GOODS

■ Contracts for the sale of goods for $500 or more must satisfy the Statute ofFrauds, unless they are specially manufactured goods and not suitable for sale toothers in the ordinary course of business.

■ The Statute of Frauds is satisfied to the extent that there is part performance.

■ The Statute of Frauds with respect to the sale of goods does not apply where thegoods have been received and accepted.

■ The Statute of Frauds with respect to the sale of goods is satisfied in a contractbetween merchants where one merchant sends a written, signed memorandumof the transaction sufficient to bind him to the contract and the receivingmerchant does not object within 10 days.


■ In a U.C.C. contract, a memorandum satisfies the Statute of Frauds if it indicatesthere is a contract, it contains a description of the goods and the quantity, and issigned. It need not contain the price.

■ A modification of a U.C.C. contract, if it involves a sale of goods for more than$500, requires compliance with the Statute of Frauds.

VI. PAROL EVIDENCE RULE

• Parol evidence is admissible to show that there is a condition precedent to acontract's coming into existence.

• Parol evidence is admissible to explain an ambiguity.

■ Parol evidence is admissible to show that the parties used words in a nontraditionalmanner or spoke in code.

• Parol evidence is admissible to prove a mistake in reducing the terms of an oralagreement to writing.

■ In a U.C.C. contract, a provision that requires subsequent modifications be in writingis valid. In a non-U.C.C. contract, a provision requiring that subsequentmodifications be in writing is invalid.

■ Except in a U.C.C. contract requiring subsequent amendments to be in writing,evidence of an oral modification subsequent to the making of a written contract isadmissible.

VII. CONDITIONS

A. EXPRESS CONDITIONS

■ A party seeking to sue on a contract must either show compliance with anexpress condition, or that the other party was in bad faith with respect to thecondition, thereby excusing its performance.

■ If a contract contains a condition that performance must be satisfactory to thepurchaser, that satisfaction will be judged by an objective standard, unless thecontract involves personal taste, in which case the performance must besubjectively satisfactory to the purchaser (limited only by the purchaser'sobligation to exercise good faith).

B. CONSTRUCTIVE CONDITIONS OF EXCHANGE

■ Unless otherwise specified, each party must perform its obligations under thecontract to be able to demand performance from the other side. Such mutualconditions precedent are constructive conditions of exchange.


1. SUBSTANTIAL PERFORMANCE AT COMMON LAW

■ Under the common law, the plaintiff can sue for breach of contract if she hassubstantially performed the contract, even if there is an immaterial(nonwillful) breach.

2. DIVISIBLE CONTRACTS

■ If a contract is divisible, then performance of one divisible portion permits theplaintiff to demand performance from the defendant for that divisible portion,even if the plaintiff is in breach with respect to another divisible portion.

• The fact that a construction contract requires periodic payments does notmake it a divisible contract.

• Under the U.C.C., except for an installment contract, the seller must tenderthe correct number of conforming goods at the time specified in the contractor the buyer can reject the goods without liability. However, the seller has alimited right to "cure" after a nonconforming tender.

■ Under the U.C.C., if a contract is determined to be an installment contract,the buyer can reject a nonconforming shipment only if it substantially impairsthe value of the installment and cannot be cured.

■ Under a U.C.C. installment contract, a breach with respect to one installmentis a breach of the total contract only if the nonconformity substantiallyimpairs the value of the entire contract.

C. IMPLIED DUTIES OF GOOD FAITH AND FAIR DEALING

• Each party to a contract has an implied duty to cooperate with the other party inachieving the objects of the contract. Failure of the plaintiff to discharge thatimplied duty is a defense in a suit on the contract.

D. PROSPECTIVE INABILITY TO PERFORM

■ Under the U.C.C., when a party has reasonable grounds for insecurity, she maydemand adequate assurances from the other party and suspend her performanceuntil she receives them.

■ If a party repudiates a contract before the time for performance, the other partymay treat the repudiation as a total breach, seek performance elsewhere, andsue for breach.

■ If the nonrepudiating party has not canceled the contract or materially changedposition, the repudiating party may retract the repudiation, providing she givesadequate assurances. The nonrepudiating party then has no right to sue forbreach.


VIII. REMEDIES

A. BUYER'S REMEDIES UNDER THE U.C.C.

• The buyer may seek specific performance and replevin the goods where they areunique (and in other special circumstances).

• The buyer may seek damages — the difference between the market price and thecontract price.

■ The buyer may cover, that is, purchase the goods elsewhere and collect thedifference between the cover price and the contract price.

B. SELLER'S REMEDIES UNDER THE U.C.C.

■ The seller may sell the goods in a commercially reasonable manner and collectthe difference between the contract price and the sales price, plus incidentaldamages.

■ If the difference between the sales price and the contract price does notreasonably reflect the seller's damage because he has an unlimited supply of thegoods, then the measure of damage is the seller's profit, the difference betweenhis production cost for the goods and the contract price.

■ The seller may sue for the contract price if the goods cannot be sold in theseller's ordinary course of business.

C. SPECIFIC PERFORMANCE

■ Both the buyer and the seller are entitled to sue for specific performance ofenforceable land contracts.

D. DAMAGES

■ Consequential damages are limited to those damages that were reasonablyforeseeable.

■ Liquidated damages are only collectible if the liquidated amount is reasonableeither in respect to the amount of damages which the parties anticipated at thetime of making the contract, or in respect to the actual damages incurred.

■ If a party is prevented from suing on the contract because the contract isunenforceable or because she has breached the contract, she is entitled tocollect restitution damages in quantum meruit, measured by the fair value of thebenefit conferred on the other party.

E. RISK OF LOSS UNDER THE U.C.C.

■ The seller shifts the risk of loss to the buyer when she completes her deliveryobligation for conforming goods. If the contract is FOB seller's place of business,the delivery obligation is completed by placing conforming goods on a common


carrier with arrangements that they be shipped to the buyer. If the contract isFOB buyer's place of business, the delivery obligation is completed when thegoods are delivered to buyer's place of business; the seller retains the risk of lossduring transit.

■ If the seller ships nonconforming goods on a shipment or a destination contract,she retains the risk of loss until the goods are accepted.

■ If the buyer rightfully revokes acceptance of the goods, the risk of loss is on theseller to the extent that the goods are not covered by buyer's insurance.

■ If the buyer breaches or repudiates the contract before the risk of loss passes toher, the risk of loss is on the buyer for a commercially reasonable time to theextent that the loss is not covered by seller's insurance.

F. IMPOSSIBILITY AND FRUSTRATION

■ At common law, the excuse of impossibility applies when the subject matter ofthe contract is destroyed or a party to a personal service contract dies.

■ Under the U.C.C. doctrine of impracticability, performance is excused when (1)goods identified to the contract are destroyed, (2) performance becomes illegal,or (3) performance is prevented by a nonforeseeable event the nonoccurrence ofwhich was a basic assumption of the contract.

MicroMash®

MBE IN BRIEFCRIMINAL LAW & PROCEDURE


MBE IN BRIEF

CRIMINAL LAW AND PROCEDURE

Table of Contents

I. HOMICIDE

A. DEFINITION

B. CRIMINAL HOMICIDE

1

1

1

1. Murder 1

2. Degrees Of Murder 1

3. Voluntary Manslaughter 1

4. Involuntary Manslaughter 2

5. A Killing While Resisting Arrest 2

C. INNOCENT HOMICIDE 2

1. Justifiable Homicide 2

2. Excusable Homicide 2

D. DEFENSES TO HOMICIDE 3

1. Self-Defense 3

2. Defense Of Others 3

3. Defense Of Property 3

4. Public Authority 3

5. Arrest 3

6. Prevention Of Felony 3

E. ANALYSIS OF HOMICIDE CRIMES 3

II. PROPERTY CRIMES 4

A. THEFT CRIMES 4

1. Introduction 4

2. Specific Intent Required 4

3. Common Law Larceny 4

4. Embezzlement 55. Obtaining Property By False Pretenses 5

B. RECEIVING STOLEN GOODS 6C. ROBBERY 6D. BURGLARY 6

1. Breaking 62. Entering 63. Dwelling House 64. Nighttime 65. Specific Intent 6

E. ASSAULT AND BATTERY 6F. RAPE 7G. KIDNAPPING 7

H. ARSON 7

III. INCHOATE CRIMES; PARTIES 7

A. INCHOATE OFFENSES 71. Attempt 72. Solicitation 83. Conspiracy 8

B. PARTIES TO CRIME 91. Principal — First Degree 92. Principal — Second Degree 93. Accessory before the Fact 94. Accessory After The Fact 95. Misprision 96. Compounding 9

IV. GENERAL PRINCIPLES 9

A. ACTUS REUS 9

B. MENS REA 10

1. General Intent 102. Specific Intent 103. Constructive Intent 104. Statutory Intent 10

ii

5. Strict Liability Crimes 11

6. Mistake Of Fact As A Defense 11

7. Mistake Of Law As A Defense 11

C. RESPONSIBILITY 11

1. Insanity 11

2. Intoxication 11

D. JUSTIFICATION 11

1. Duress 12

2. Necessity 12

3. Public Authority 12

4. Domestic Authority 12

V. CONSTITUTIONAL PROTECTION OF ACCUSED PERSONS 12

A. ARREST, SEARCH, AND SEIZURE 12

1. Arrest 12

2. Search and Seizure 12

B. CONFESSIONS 14

1. Voluntariness Standard 14

2. Miranda Standard 14

3. Fourth Amendment Standard 15

C. RIGHT TO COUNSEL 15

D. LINEUPS AND OTHER FORMS OF IDENTIFICATION 15

1. Right To Counsel 15

2. Due-Process Standard 15

E. FAIR TRIAL AND GUILTY PLEAS 15

1. Pretrial Stage 15

2. Trial Stage 16

3. Post-Trial Stage 17

F. DOUBLE JEOPARDY 17

1. What Is The "Same Offense"? 17

2. When Jeopardy Attaches 17

3. When Retrial Is Permitted 18

4. Appeals By The Prosecution 18

5. Collateral Estoppel 18

iii

CRIMINAL LAW AND PROCEDURE

I. HOMICIDE

A. DEFINITIONHomicide is the death of a human being caused by another. In the extremes, the victimmust be born alive (infanticide) or be not yet dead (euthanasia). "Cause" refers to legal orproximate cause.

B. CRIMINAL HOMICIDE1. Murder

Murder is a criminal homicide committed with malice aforethought.

"Criminal" means that the defenses of justification or excuse are not available.

"Malice aforethought" means:

• intent to kill, in the sense of desiring the homicide or taking such action that itsoccurrence is substantially certain (intent is implied from the use of a dangerousweapon);

• intent to inflict serious bodily harm;

• a wanton and willful disregard of an unreasonable human risk (depraved heart);

• a homicide occurring in the commission or attempted commission of a dangerousfelony.

2. Degrees Of Murder

First-degree murder is murder committed with deliberately premeditated maliceaforethought, with extreme atrocity and cruelty, in the commission of a dangerous felony,by poison or by lying in wait.

Second-degree murder is murder committed with malice but without deliberatepremeditation, and any murder that is not first-degree murder.

3. Voluntary Manslaughter

Voluntary manslaughter is an intentional homicide without malice aforethought.Malice aforethought is not present if the homicide is committed in the heat of passioncaused by adequate provocation.

a. Adequate provocation

A serious battery, observing a spouse in the act of adultery, and words conveyinginflammatory information (if they are such as to inflame the passions of a reasonableperson), constitute adequate provocation; abusive language does not.

2 MicroMash MBE In Brief: Criminal Law & Procedure

b. Actual provocation

The defendant must be actually provoked (a subjective test), and the homicide mustoccur before the defendant has cooled off.

c. Causation

The adequate provocation must cause the heat of passion.

d. Imperfect self-defense

Voluntary manslaughter also occurs when there is a right of self-defense or defense ofanother, but it is imperfectly exercised because the defendant unreasonably perceiveda risk of death or serious bodily harm or used excessive force.

e. Where necessity or coercion present

Voluntary manslaughter also occurs when the defendant would have the defense ofcoercion or necessity if it were a nonhomicide crime.

4. Involuntary Manslaughter

Involuntary manslaughter is an unintentional homicide committed with criminalnegligence or in the commission of a misdemeanor malum in se.

a. Criminal negligence

Criminal negligence occurs when there is a substantial departure from the standard ofreasonable care, resulting in a high degree of risk of death or serious bodily injury(reckless conduct).

b. In the course of an act malum in se

When a homicide occurs in the course of a misdemeanor that is bad in itself, a breachof public order, or contrary to public decency or good morals, then there isinvoluntary manslaughter under the theory of misdemeanor manslaughter.

5. A Killing While Resisting Arrest

This is not a separate category of homicide. It is murder if intentional while resisting alawful arrest. It can be manslaughter if the arrest is unlawful and passion is aroused bythe excessive use of force.

C. INNOCENT HOMICIDEInnocent homicide occurs when the death caused by another is either justified or excused.

1. Justifiable Homicide

Homicide is justified if it is commanded by law or is committed in self-defense, defenseof another, or in preventing a dangerous felony.

2. Excusable Homicide

Homicide is excused if the defense of mistake of fact or insanity is available, or if it wasan unintentional homicide committed without criminal negligence, and not while in thecommission of an unlawful act.

MicroMash MBE In Brief: Criminal Law & Procedure 3

D. DEFENSES TO HOMICIDE

1. Self-Defense

a. Nondeadly force

Nondeadly force, i.e., force neither intended nor likely to cause death, which in factdoes cause death, is justified even though the defendant is not threatened with deathor serious bodily injury as long as there is a threat of some harm.

b. Deadly force

Deadly force is justified where the defendant reasonably believes she is in immediatedanger of death or serious bodily harm.

c. Retreat — when required

Retreat is not required under the majority view, and the minority view does notrequire retreat unless the defendant is outside of his home and can retreat in safety.

d. Right of aggressor to use self-defense

An aggressor has the right to use deadly force if she originally used nondeadly forceand was met with deadly force, or if she withdrew from aggression, communicatedthat fact, and otherwise had the right to use self-defense.

2. Defense Of Others

A person has the right to defend others under the same circumstances where he candefend himself. Reasonable mistake does not vitiate the defense. It is not limited todefending family members.

3. Defense Of Property

Except when protecting one's home against a person intent on committing a seriousfelony, there is no right to use deadly force in defending property.

4. Public Authority

Killings commanded by public authority are justified.

5. Arrest

A police officer or a civilian acting under police direction can use deadly force ifnecessary to arrest for a felony, and nondeadly force to arrest for a misdemeanor.

6. Prevention Of Felony

Anyone can use deadly force to prevent the commission of a serious felony.

E. ANALYSIS OF HOMICIDE CRIMES

If intentional homicide, then it is murder unless it is manslaughter (when the killing is in theheat of passion caused by adequate provocation), or innocent homicide if it is justified orexcused.


If not intentional, then it is murder if there is an intention to inflict serious bodily harm,commit a willful act in serious disregard of a severe danger, or if the homicide is in thecourse of a dangerous felony. It is involuntary manslaughter if committed with criminalnegligence or in the course of a misdemeanor malum in se; otherwise, it is innocenthomicide.

II. PROPERTY CRIMES

A. THEFT CRIMES

1. Introduction

Larceny, embezzlement, and obtaining property by false pretenses are mutually exclusivecommon law crimes.

2. Specific Intent Required

a. Intent to deprive another permanently

The specific intent necessary for theft crimes is the intent to steal or to permanentlydeprive the owner of property. It is present when property is taken with intent toclaim a reward, intent to abandon, intent to sell the property back to the owner, orintent to pledge or pawn if there is not a substantial capacity to redeem.

b. No intent to steal

The specific intent is not present where the intent is only to borrow and an ability toreturn exists; where there is the intent and capacity to pay for property that is for sale;and where there is the intent to take money to repay a debt. The specific intent is notpresent if the taking is caused by a mistake of fact or mistake of law.

c. Coincidence of specific intent and prohibited conduct

The specific intent must coincide with the prohibited conduct for a particular crime tooccur.

3. Common Law Larceny

Common law larceny is the trespassory taking and carrying away of the personalproperty of another with the intent to steal.

a. Possession

The distinguishing characteristic of larceny is that it is a taking from one inpossession. Possession in its ordinary sense means the legal right to control an objectfor a reasonably long period of time.

b. Constructive possession

"Constructive possession" means legal possession where factual possession does notexist.

Employers have constructive possession of property in the hands of lower-levelemployees.


Owners have constructive possession of a package's contents when a bailee breaksbulk and steals part of a package.

Owners of mislaid property or lost property with a clue to ownership haveconstructive possession of it.

Owners have constructive possession of property when actual possession but not titleis taken from them by fraud. The crime is called "larceny by trick."

Owners have constructive possession of property delivered by mistake.

A joint owner has possession of all parts of jointly owned property.

c. Taking

The taking requirement is satisfied by severing the article from the owner'spossession, but not by destroying property while it is in the owner's possession. Aninnocent agent can accomplish the taking.

d. Trespass

The trespassory requirement means that the property must be taken without theconsent of the person in possession. If the original taking was without consent, yetwas not unlawful because there was no intent to steal at the time of the taking, a crimeis committed when the intent to steal is formed, because the original trespass isdeemed to be "continuing" until that time.

e. Carrying away

The carrying away requirement is satisfied by a very slight movement.

4. Embezzlement

Embezzlement is the fraudulent conversion of the property of another by one who isalready in lawful possession.

Conversion is a serious act interfering with the owner's rights.

The property embezzled must belong to another. Inability to fulfill a contractualobligation is not embezzlement.

The converter must be in lawful possession.

There must be the intent to defraud.

5. Obtaining Property By False Pretenses

"False pretenses" is a false representation of a material fact relied upon by the victimwhich induces the victim to pass title to property.

The representation must actually be false and be of a material past or present fact. Aprediction of a future event or a false promise is not sufficient. The victim must relyupon the false representation and pass title. The defendant must know that therepresentation is false and intend to defraud.


B. RECEIVING STOLEN GOODSThis crime requires the receiving of stolen property, the knowledge that it is stolen, and theintent to deprive the true owner of the property. The test for knowledge is subjective. Theknowledge must coincide with the act of receiving the property.

C. ROBBERYRobbery is larceny from the person by force or intimidation. All of the elements of larcenyare necessary for robbery. The term "from the person" means goods within the control of thevictim. The victim must be placed in fear by either force or intimidation.

D. BURGLARYCommon law burglary is the breaking and entering of the dwelling house of another with theintent to commit a felony.

1. Breaking

Breaking is the opening of any enclosure, even though it is unlocked. If entry is obtainedby fraud, there is a breaking. If entry is gained without a breaking, a breaking can occurif the defendant enters another part of the real estate by opening a door or window.

2. Entering

Entering occurs when any portion of the defendant's body, or an instrument used by himto accomplish the crime, crosses into the dwelling through the opening created by thebreaking.

3. Dwelling House

A dwelling house of another is a structure regularly occupied for habitation. It need notbe occupied at the time of the breaking, but must not be abandoned.

4. Nighttime

Nighttime occurs during the period of darkness between sunset and sunrise.

5. Specific Intent

At the time of the breaking and entering, the defendant must have the intention to commita felony that is causally connected to the breaking and entering.

E. ASSAULT AND BATTERYA battery is the unlawful application of force to the person of another. The force need not begreat or applied directly, but must be applied either intentionally, or with criminalnegligence, or in the commission of an act malum in se. Consent, self-defense, and the rightto apply force because of a position of authority are defenses to a battery.

An assault is either an attempt to commit a battery, or the intentional placing of the victim inapprehension of receiving an immediate battery.


F. RAPE

Rape is unlawful sexual intercourse with a female without her consent. Intercourse requirespenetration. Intercourse is without consent if procured by force, threat of harm, or when thefemale is unable to consent because of drunkenness, a drug-induced stupor, orunconsciousness. Consent is not a defense if it is produced by fraud with respect to thenature of the act itself — fraud in the factum. If the fraud relates to a collateral matter, fraudin the inducement, the consent is valid. Consent is not valid if the female is under the age ofconsent, usually 16. Reasonable mistake of fact concerning age is not a defense.

G. KIDNAPPING

Kidnapping is the unlawful forcible confinement and asportation of a person against his orher will. Some statutes define kidnapping to include secret confinement, and dispense withthe asportation requirement. Kidnapping for ransom is an aggravated form of kidnapping.

H. ARSON

Arson is the malicious burning of the dwelling of another. There must be the intent to burn.The burning must ignite the real estate. The test for the "dwelling of another" requirement isthe right to possession or occupancy, and not title.

III. INCHOATE CRIMES; PARTIES

A. INCHOATE OFFENSES

1. Attempt

An attempt is a step in the direction of committing a crime, coupled with the intention tocommit that crime. If the crime is successfully completed, the attempt is merged.

a. Close to actual commission

The activity must reach the perpetration stage. The closer to the time and place of thescheduled execution of the criminal act, the more likely that the perpetration has beenreached. If the defendant has completed the last acts she is required to perform, she isguilty of attempt.

b. Specific intent

The defendant must intend to commit the crime attempted.

c. Defense of impossibility

There is no impossibility defense if the crime attempted, because of circumstancesunknown to the actor, is factually impossible to commit. However, if the attempt isinherently impossible or the act intended is not a crime, there is no attempt. If the actattempted is not legally a crime because of facts unknown to the actor, the commonlaw crime of attempt is not committed.

d. Abandonment

If the attempt is abandoned because of a change of heart, there is no defense atcommon law, although there is a defense under some statutes.


2. Solicitation

Solicitation occurs when the defendant, with the intention that another commit a crime,entices, advises, incites, orders, or otherwise encourages the other to commit that crime.If the crime is completed, solicitation is merged into the solicitor's liability as anaccomplice. If the person solicited agrees to commit the crime, then a conspiracy hasbeen formed and the solicitation merges into the conspiracy.

3. Conspiracy

a. Does not merge

Conspiracy is a combination for an unlawful purpose. It does not merge into thetarget offense.

b. Agreement can be inferred

The agreement necessary for a combination need not be formal, and can be inferredfrom a concerted action.

c. Specific intent

The parties to a conspiracy must intend both to agree and to accomplish the objectiveof the conspiracy. A supplier who knows the criminal purpose will be a conspirator ifhe has a stake in the outcome, if the goods are highly regulated, or if the crimecontemplated is very serious.

d. Overt-act requirement

An overt act was not required at common law, but is required by many statutes. If anovert act is required, the conspiracy crime is not complete until the overt act iscompleted. The overt act can be committed by any conspirator and need only be inpreparation to commit the crime.

e. Number of persons required

A person cannot commit a conspiracy alone. If one party feigns agreement, or one ofthe persons is a member of a legislatively protected class, or the two persons arehusband and wife, or only one person is acting for two corporations, there is noconspiracy under the common law. There is also no conspiracy if only the partiesessential to the commission of the offense are participants. If all conspirators but oneare acquitted, then the other must likewise be acquitted.

f. Unlawful conduct

Unlawful conduct encompasses more than criminal conduct.

g. Impossibility

Impossibility, whether legal or factual, is not a defense to conspiracy.

h. Scope of a conspiracy

A conspiracy begins at the time of agreement, or in overt-act jurisdictions, at the timeof the overt act. It ends with the attainment of its objective or with abandonment. If


the agreement covers several crimes, there is only one conspiracy. If parties know ofnecessary acts of others to complete the criminal activity, they are all parts of oneconspiracy.

i. Withdrawal

To withdraw from a conspiracy, it is necessary to notify all conspirators of thewithdrawal.

j. Effects of existence of a conspiracy

Once a person is a conspirator, she is guilty of all crimes committed by the otherconspirators in furtherance of the conspiracy which are within the scope of theconspiracy, and all statements made by one conspirator in furtherance of theconspiracy are admissible against the others in evidence.

B. PARTIES TO CRIME

1. Principal — First Degree

The person who actually perpetrates a crime is a principal in the first degree.

2. Principal — Second Degree

The person who is present but does not actually perpetrate the felony is a principal in thesecond degree.

3. Accessory Before The Fact

The person who is not present at the scene but aids or encourages the commission of afelony is an accessory before the fact.

4. Accessory After The Fact

The person who aids or assists a felon to avoid apprehension is an accessory after the fact.The person must know of the commission of the felony. Most jurisdictions exemptassistance to close relatives.

5. Misprision

Misprision of a felony, a common law misdemeanor, is the failure to report or prosecute aknown felon.

6. Compounding

Compounding a felony is receiving consideration for failure to report or prosecute aknown felon.

IV. GENERAL PRINCIPLES

A. ACTUS REUS

Before there can be a crime, there must be a criminal act. It may consist of words or actions.The act must be voluntary and be committed while conscious. Failure to act is criminal when


a duty to act is imposed by law as a result of a contract, a previous act, or a relationship.Failure to act is not criminal, however, if the act would be futile if performed.

B. MENS REA

The required mental state must occur simultaneously with the actus reus.

1. General Intent

Except for strict liability crimes, all crimes require at least general intent, that is, theintent to accomplish the required act. Intent means either desiring the result or takingsuch steps that the result is substantially certain to occur.

2. Specific Intent

Specific intent is the intent to cause the harmful consequence of said act. The followingcrimes require a specific intent in addition to a general intent:

• murder: malice;

• theft crimes, robbery, and receiving stolen property: intent to deprive the ownerof property;

• burglary: intent to commit a felony within the dwelling;

• solicitation: intent to have the crime committed by the solicited;

• attempt and conspiracy: intent to commit the target crime.

3. Constructive Intent

Intent can be inferred from the accomplishment of an act. In some instances, eithernegligence or recklessness constitutes a constructive intent, even though an actual intentdoes not exist.

4. Statutory Intent

Specific intent is also required in statutory crimes where the act must be done willfully,knowingly, wantonly, or with malice.

a. Malice

Malice only requires the doing of a criminal act without excuse, justification, ormitigation.

b. Knowledge

Knowledge includes the situations where one perceives a fact, believes it to be true, ordeliberately avoids discovering it.

c. Willfully

"Willfully" means intentionally or purposely and in some instances with evil intent.

d. Wantonness

"Wantonness" means an act done without regard to the consequences, so as to show awicked or mischievous intent.


5. Strict Liability Crimes

Strict liability crimes do not require a general intent; the mere accomplishment of the actinvokes criminal liability.

6. Mistake Of Fact As A Defense

Mistake of fact is a defense to a crime when, in the case of general intent crimes, thedefendant reasonably believes facts, which, if true, would make his actions noncriminal.In specific intent crimes, an honestly held, though unreasonable, belief is sufficient.Reasonable mistake of fact is not a defense to strict liability crimes.

7. Mistake Of Law As A Defense

Mistake of law is a defense only where there is reliance on the decision of a court or highadministrative official, or where an honestly held mistake of law prevents or negates thespecific intent required.

C. RESPONSIBILITY

1. Insanity

There are four tests for insanity:

a. The M'Naghten Test

D is not guilty where, because of a defect of reason or disease, she did not know thenature and quality of her act, or if she did know, then she did not know it was wrong.

b. Irresistible Impulse Test

D is not guilty if mental disease prevented him from controlling his conduct.

c. Durham Rule

D is not guilty if her unlawful act was the product of a mental disease or defect.

d. Model Penal Code Test

D is not guilty if at the time of the conduct, as a result of a mental disease or defect, Dlacked substantial capacity to appreciate the criminality of the conduct, or to conformhis conduct to the requirements of the law. The Model Penal Code also requires thatthe degree of certain offenses be reduced because of diminished mental capacity.

2. Intoxication

Voluntary intoxication is not a defense to a general intent crime, but can be a defense to aspecific intent crime where the intoxication prevents the formation of the required intent.Intoxication can also prevent the formation of the premeditation required for first-degreemurder. Involuntary intoxication is a defense where the defendant does not know thenature and quality of her act, or that it was wrong.

D. JUSTIFICATION

An action is justified and, therefore, not criminal when authorized or commanded by law.


1. Duress

An act short of homicide is justified if the defendant was coerced to commit the act by theuse of, or the threat of use of, unlawful force against his person or the person of another,which a person of reasonable firmness in the situation would be unable to resist.

2. Necessity

An individual who commits a criminal act other than homicide in response to anonhuman force has the defense of necessity if she has not voluntarily put herself in thatposition, and she commits the act in order to avoid a greater harm.

3. Public Authority

A public officer pursuant to public duty may perform acts that would be criminal if notdone pursuant to that duty.

4. Domestic Authority

A parent or schoolteacher may use reasonable physical force to discipline a child.

V. CONSTITUTIONAL PROTECTION OF ACCUSED PERSONS

A. ARREST, SEARCH, AND SEIZURE

1. Arrest

An arrest occurs when an individual is deprived of freedom of movement for the purposeof commencing a criminal action. A misdemeanor amounting to a breach of the peace, ora reasonable belief that a person has committed a felony, gives grounds to arrest without awarrant. Otherwise, a warrant is required. Incriminating statements that are the productsof an illegal arrest are inadmissible for substantive purposes.

2. Search And Seizure

Evidence obtained as a result of an illegal search or seizure is generally inadmissible.

a. Search

A search occurs when the governmental activities violate the right to privacy uponwhich the defendant justifiably relies. This protection covers the area of the homeand its surroundings, as well as affording protection from electronic eavesdropping.An item in plain view is not the subject of a search except where the viewer isillegally on the premises. Statements made to informers are not the subject of asearch.

b. Warrantless searches

A search without a warrant is valid:

• if it is made incident to a valid arrest;

• if it is a limited threshold inquiry ("stop and frisk") when an officer has reason tobelieve his physical safety may be threatened;


• if the police enter a private building in hot pursuit;

• if it is on premises subject to regulatory licenses, and at a reasonable hour;

• if it is incident to protecting the borders of the country;

• if the object searched is in official custody;

• (1) if voluntary consent, not under threat or compulsion, is given by the defendant;or (2) if a third party who has joint control over the property with the defendantgives consent;

• if the search is of an automobile which is capable of being moved by its occupantsand the police have probable cause to believe that it is carrying contraband, orwhere other exigent circumstances require an immediate search;

• if necessary for national security in dealing with foreign affairs;

• if there is some other emergency which makes it reasonable.

c. Administrative searches

Administrative searches are permitted either without warrants, or with blanketwarrants which do not have to be obtained in accordance with strict procedures, andwhich may cover large geographic areas.

d. Search warrants

A valid search warrant requires that the officer applying personally contact anindependent official and submit an affidavit which sets forth reliable facts whichestablish grounds for the issuance of the warrant. The application for the warrantmust specifically state the material or person to be seized and the place to besearched. The affidavit may be based upon hearsay evidence as long as the neutralmagistrate can determine the reliability of the informant. The defendant can attackthe warrant on the ground that the affiant deliberately lied, and that the warrant wouldnot be sufficient without those lies. Search warrants can be issued to search for thefruits, instrumentalities, or evidence of a crime held by third parties.

e. Fruits of an illegal search

If there is an illegal search, all evidence and verbal statements that are obtained arefruits of that search, and are inadmissible for substantive purposes unless they arefound by means sufficiently distinguishable to be purged of the taint of the illegalsearch. Illegally seized evidence may be used to impeach credibility.

f. Standing

A defendant has standing to raise a search-and-seizure issue only when she can showboth a possessory interest in the items seized and a legitimate expectation of privacyin the premises searched.


B. CONFESSIONS

1. Voluntariness Standard

An involuntary confession, i.e., one obtained by the threat of or application of physicalforce or psychological coercion, will be excluded from evidence. The age, sex, health,and education of the defendant are relevant in determining psychological coercion. Thevoluntariness of a confession is a preliminary question of fact to be determined by thetrial judge.

2. Miranda Standard

Statements made as a result of custodial interrogation are inadmissible unless Mirandawarnings, or their equivalent, are given, and Miranda rights are waived.

a. Custody

Custody occurs when the defendant is arrested or deprived of freedom in a significantway.

b. Interrogation

"Interrogation" refers not only to express questioning, but any words or actions on thepart of the police that they know or should know are likely to elicit an incriminatingresponse from a suspect.

c. Miranda rights

The Miranda rights are: (1) the right to remain silent; (2) the right to an attorney; (3)the right to a court-appointed attorney if indigent; and (4) the right to be told thatanything said by a defendant can be used against him.

d. Waiver

The warning must be given before interrogation begins. If the right to counsel isexercised, it cannot thereafter be waived until counsel is furnished. If the right toremain silent is exercised, it can be waived later. A waiver of Miranda rights must beintelligently and knowingly made after the warnings are given. If a confession ismade soon after an earlier tainted confession, it will probably be excluded as the fruitof the tainted confession.

e. Impeachment

Statements that are excluded for substantive purposes by Miranda can be used toimpeach.

f. Adoptive admissions

Miranda excludes the operation of the adoptive admission-by-silence rule when thedefendant is in custody.

g. Private persons

Miranda does not apply to custodial interrogation by private persons.


h. Corroboration

A confession must be corroborated before a conviction can be obtained.

3. Fourth Amendment Standard

A statement is inadmissible if it is obtained as a result of detention following an illegalarrest.

C. RIGHT TO COUNSEL

An indigent criminal defendant has a right to court-appointed counsel in all felony cases, inmisdemeanor cases where the defendant is actually incarcerated, in juvenile proceedingswhere incarceration is a possibility, and in civil-commitment hearings. The right to counselattaches during custodial interrogation and at arraignment. If the state provides an appealprocedure as of right for criminal convictions, the defendant has a right to counsel, and a freetranscript for one appeal. Convictions obtained when counsel was not provided cannot beused to impeach. Incompetence of counsel is not a denial of the right to counsel, unless it is aresult of conflict of interest or is so pronounced that counsel has not given effectiveassistance, and actual prejudice is shown.

D. LINEUPS AND OTHER FORMS OF IDENTIFICATION

1. Right To Counsel

A criminal defendant has the right to have counsel present at all post-indictment lineups.Failure to comply with this obligation renders identification made at the lineup per seinadmissible, and a later in-court identification inadmissible unless the prosecution canshow by clear and convincing evidence that the identification made at trial was madefrom sources independent of the identification at the lineup.

2. Due-Process Standard

Where an identification is made before indictment, either in a lineup or showup, theresults of that identification, and a subsequent in-court identification, are inadmissibleonly where the pretrial identification was unnecessarily suggestive and conducive toirreparable mistaken identification. The totality of the circumstances surrounding theidentification is relevant in applying this due-process standard.

E. FAIR TRIAL AND GUILTY PLEAS

1. Pretrial Stage

a. Pretrial release

The purpose of bail is only to assure that the defendant will be present at trial. Bailmay be denied to those arrestees who may be dangerous if released.

b. Discovery

Pretrial discovery is not constitutionally required, but the defendant is entitled to thesame discovery rights as the prosecution.


c. Publicity

A defendant is entitled to be tried by a jury which is unaffected by media coverage ofthe events and the subject matter of the trial. However, media coverage, including in-court television coverage, is not prejudicial unless the jury is unable to adjudicatefairly or the defendant is unable to present effectively her defense due to suchcoverage.

d. Speedy trial

The factors that determine if the defendant's constitutional right to a speedy trial hasbeen violated are: (1) the length of the delay, (2) the reason for the delay, (3) thedefendant's assertion of his right, and (4) the prejudice to the defendant. The right toa speedy trial does not commence until the defendant is formally accused of thecrime. The right can be waived, but a violation of this right requires completedismissal of the charges.

2. Trial Stage

a. Competence

The defendant must be able to understand the charges against her, to assist in her owndefense, and to consult with her lawyer; otherwise, she is incompetent to stand trial.

b. Impartial judge

The trial judge must be impartial and have no interest in the outcome of the case.

c. Public trial

The defendant has a right to a public trial, but neither the press nor the public has aright to be present at a pretrial hearing, nor do they have an absolute right to bepresent at trial. A defendant does not have a right to compel a private trial.

d. Prosecutor's misconduct

The prosecutor may not use false or perjured testimony, and has the obligation tofurnish the defense with favorable evidence.

e. Jury trial

Less than unanimous and fewer than 12-person juries are constitutionally permissible,but a jury may not consist of fewer than six members. Where six-person juries areused, a unanimous verdict is required.

A defendant has the right to a jury trial in any criminal proceeding (including acontempt proceeding) where there is a possibility of a jail sentence in excess of sixmonths. The defendant is entitled to a jury in which persons of any racial or ethnicbackground or sex have not been systematically excluded, and, generally, in whichthe jurors have been examined for bias or prejudice.

The prosecution in a capital case can exclude persons whose opposition to the deathpenalty is so strong as to substantially impair the performance of their sentencingduties.


f. Guilty pleas

Before a defendant can plead guilty, he must be informed of his right to trial, theelements of the charge against him, and the maximum sentence he can receive. Theplea must be voluntarily given.

g. Confrontation

The defendant's constitutional right to confront witnesses against her is not violatedwhen she has had the opportunity to cross-examine the witness at an earlier occasionand the witness is genuinely unavailable at trial. Out-of-court statements of witnessespresent at the trial offered for their truth likewise do not violate the right ofconfrontation.

h. Severance

The defendant has a constitutional right to a severance when the out-of-courtstatement of a co-defendant implicating both defendants will be admitted at the trialbut the co-defendant will not testify, unless the statements implicating thenonconfessing defendant can be excised.

i. Burden of proof

Due process requires that the prosecution prove all of the elements of its case beyonda reasonable doubt, but not matters of affirmative defense, such as insanity.

3. Post-Trial Stage

The defendant is entitled to be represented by counsel at sentencing, and may not besentenced to jail solely because he is indigent and lacks the ability to pay a fine as analternative. The Eighth Amendment prohibits imposition of punishments that arephysically barbarous, or involve the unnecessary and wanton infliction of pain.

F. DOUBLE JEOPARDY

A defendant may not be put in jeopardy for the same offense twice.

I. What Is The "Same Offense"?

Two offenses are considered the same offense for purposes of double jeopardy unlesseach offense contains an element not contained in the other. If one offense is a lesserincluded offense of the other, the trial of either offense will bar a later trial of the other,unless there is a waiver, or one of the elements of the greater offense had not occurred atthe time of the earlier trial.

If one activity is a crime under two different jurisdictions, double jeopardy will not bareither prosecution.

2. When Jeopardy Attaches

The defendant is in jeopardy in a jury trial when the jury is impaneled, and in a nonjurytrial when the introduction of the evidence begins.


3. When Retrial Is Permitted

Retrial is permitted after jeopardy attaches if the defendant successfully appeals herconviction; if there is a failure in the mechanics of trial that is not the fault of theprosecutor; or if the defendant waives the defense of double jeopardy.

4. Appeals By The Prosecution

The prosecution can constitutionally appeal a criminal case when the decision by theappellate court will not subject the defendant to a new trial.

5. Collateral Estoppel

The prosecution may not relitigate issues that were determined in the defendant's favor ina previous criminal trial. A judge after a retrial may not sentence a defendant to a greaterterm unless his reasons for doing so affirmatively appear on the record.

MicroMashv BAR REVIEW


CRIMINAL LAW & PROCEDURE

I. HOMICIDE

A. MURDER

1. INTENT TO KILL

■ A mercy killing is murder because it is an intentional killing, even if the victimasks the person to kill her.

■ A person who sets up a mechanical device that kills a person is guilty of thecrime that would have been committed if the person had personally set offthe device intentionally.

■ If a person takes steps to make substantially certain that an event will occur,she has intended the act even if she subjectively does not desire that theresult occur.

2. INTENT TO DO GREAT BODILY HARM

■ If a person commits an act that would not ordinarily inflict fatal injury, butwould likely cause great bodily harm, and the victim dies, that person is guiltyof murder, even if the victim died because of a peculiar medical condition.

■ Intent to do great bodily harm can be inferred from the use of a weapon toinflict bodily injury.

3. DEPRAVED HEART

■ Firing bullets in a confined space or through a wall, or playing Russianroulette, is abandoned-heart murder if a death results.

■ Deliberately and unjustifiably driving a car onto a crowded sidewalk wouldconstitute abandoned-heart murder if a death results.

4. FELONY MURDER

■ A defendant is not guilty of felony murder unless he is guilty of thecommission or attempted commission of the underlying felony.

■ A defendant is not guilty of felony murder if the commission of the felony hasnot yet begun or is completed at the time the death occurs.

2 MicroMash MBE In Brief: Criminal Law Bar Exam Alerts

■ A co-conspirator of the felon who actually commits the killing is not guilty offelony murder if the killing was beyond the scope of the conspiracy.

■ The felonies of manslaughter or assault and battery cannot be the underlyingfelony for felony murder.

• If a third party kills a co-felon in the course of a felony, the surviving felon isnot guilty of felony murder because the killing is justifiable homicide.

5. DEGREES OF MURDER

• A homicide accompanied by malice in the form of a deliberate intentionalkilling is first-degree murder.

■ A death in the course of the serious common law felonies of Mayhem, Rape,Sodomy, Burglary, Arson, Kidnapping, Escape, and Robbery ("Mrs. Baker"felonies) is first-degree murder ("felony murder").

■ A murder accompanied by malice in the form of intent to do great bodilyharm is usually second-degree murder.

• A murder accompanied by malice in the form of a depraved heart is second-degree murder.

B. MANSLAUGHTER

1. VOLUNTARY MANSLAUGHTER

■ To reduce a murder crime to voluntary manslaughter, there must beadequate provocation to inflame a reasonable person into the heat of passionand the defendant must have actually been in such a state. A violent battery,spousal adultery, mutual affray, and an illegal arrest are adequateprovocation. The killing must also take place in a time frame where thepassions of a reasonable person would not have cooled and the passion ofthe defendant must not in fact have cooled.

■ A murder crime can be reduced to manslaughter if the defendant had adefense (e.g., a right to defend herself or another), but used that defenseimperfectly (e.g., by employing excessive force).

• If the defendant would only have been guilty of voluntary manslaughter if shehad killed A, she is only guilty of voluntary manslaughter if she shoots at A,misses and kills V.

2. INVOLUNTARY MANSLAUGHTER

■ A death occurring in the course of willful, wanton conduct is involuntarymanslaughter.

■ A death occurring in the course of a misdemeanor ma/um in se is involuntarymanslaughter.

MicroMash MBE In Brief: Criminal Law Bar Exam Alerts 3

■ A person under a duty to aid another person because of a contractual orfamily relationship is guilty of involuntary manslaughter if a death occursbecause of unreasonable failure to give that aid. A person under no duty,however, can unreasonably refuse to give aid without any criminal liability.

C. INNOCENT HOMICIDE

1. SELF-DEFENSE

■ An aggressor does not have the right of self-defense, unless she attackedwith nondeadly force and is met with deadly force, or unless she completelyends her aggression and makes that known to the person attacked.

■ A person committing a felony does not have the right of self-defense.

■ An individual has the right to use deadly force to apprehend a feloncommitting a dangerous felony or to prevent a dangerous felony from beingcommitted. Only nondeadly force can be used if the crime is a misdemeanor.

• Force is classified as deadly or nondeadly by whether it is likely to causedeath, not whether death in fact occurred.

■ A belief that the person defended has the right of self-defense is a defense ina criminal prosecution, even if the person defended does not in fact have theright of self-defense (e.g., because she was the aggressor). (To avoidliability in tort, though, the person defended must have actually had a right toself-defense.)

■ A person does not have the right to use self-defense to avoid being arrestedby a police officer.

■ If an individual has a perfect right of self-defense but, in the exercise of thatright, kills the wrong person, the homicide is still excused.

2. DEFENSE OF PROPERTY

• Defense of property is not sufficient to justify the use of deadly force.

■ A killing commanded by the law, such as an execution or killing on thebattlefield in time of war, is not murder because it is a justifiable homicide.

3. EXCUSABLE HOMICIDE

■ Duress relates to coercion by a human force, whereas necessity relates tocoercion by nonhuman elements. Duress and necessity cannot be defensesto a homicide crime, but can be defenses to an underlying felony, whichwould then be a defense to felony murder.


II. PROPERTY CRIMES

A. THEFT CRIMES

1. LARCENY

■ The specific intent necessary for larceny is not present if the defendantintends to return the property at the time he committed the trespassorytaking.

■ If the defendant intended to return the property, the fact that it was notreturned because it was unintentionally destroyed does not transform theintent into the intent to steal. However, the intent to destroy is equivalent tothe intent to steal.

■ If possession is obtained by fraud, the crime is larceny by trick, notembezzlement.

■ The trespassory act necessary for larceny can be committed by an innocentagent of the defendant.

■ A person with title to property can be guilty of larceny if he wrongfully takesthat property from a person rightfully in possession.

■ A lower-level employee in possession of the goods of an employer, or a baileewho breaks the bulk of the goods bailed, does not have a sufficientpossessory interest to have the taking of those goods constituteembezzlement.

2. EMBEZZLEMENT

■ Embezzlement only occurs when a person rightfully gains possession ofanother's property and then converts it to his own use.

3. OBTAINING PROPERTY BY FALSE PRETENSES

■ To be guilty of obtaining property by false pretenses, the victim must give uptitle to property in reliance on a false representation of material fact by thedefendant.

■ The defendant's honest belief that the representation is true prevents thedefendant from having the specific intent necessary for the crime of obtainingproperty by false pretenses, even if the belief is unreasonable.

4. RECEIVING STOLEN GOODS

■ A belief that the goods were not stolen is a defense to the crime of receivingstolen goods.

■ If the goods are not in fact stolen goods, the defendant cannot be convictedof receiving stolen goods even if she believes that the goods are stolen.


5. ROBBERY

■ Larceny is an essential element of (and merges into the more serious crimeof) robbery when all of the elements of robbery are found.

■ The battery that constitutes the force employed in a robbery merges into themore serious crime of robbery.

■ The use of force or intimidation to retain possession of property alreadystolen is not robbery.

■ The threat to use force in the future is the threat necessary for extortion, notrobbery.

6. BURGLARY

■ In order to be guilty of burglary, the defendant must have the specific intentto commit a felony on the premises at the moment of the entering.

■ Burglary is committed if the defendant breaks and enters a part of a dwellinghouse, even if she does not break and enter when she first enters thedwelling.

■ The breaking and entering need not occur simultaneously.

■ The breaking and the entering necessary for burglary are present if entry isobtained by fraud.

■ A person cannot be guilty of burglary for breaking and entering into her ownhome.

■ A defendant is guilty of burglary even if not successful in completing theintended felony.

B. OTHER CRIMES

1. ASSAULT AND BATTERY

■ The defendant never has the obligation to retreat if she is using nondeadlyforce as a defense to an assault or battery.

2. RAPE; STATUTORY RAPE

■ Consent to intercourse is not a defense if the victim's assent to the actperformed is procured through fraud that obscures the fact that intercourse istaking place.

■ An underage female who engages in intercourse cannot be held guilty ofconspiracy to commit statutory rape or as an accessory to statutory rape.

3. KIDNAPPING

■ Demand for a ransom is not an element of simple kidnapping.


4. ARSON

- A person cannot be guilty of the common law crime of arson for burning herown house.

■ A minimal burning of part of the dwelling house is all that is required forarson, but the burning of the contents alone is not sufficient.

III. INCHOATE CRIMES

A. OFFENSES

1. ATTEMPT

■ To be guilty of the crime of attempt, the defendant must intend to committhe crime that he is attempting.

• If the act that the defendant intended to accomplish is not a crime, thedefendant is not guilty of an attempt even if he thinks he has committed acrime.

■ If the defendant is successful in his attempt and commits the substantivecrime, there is no separate crime of attempt; the attempt and the crimemerge.

2. CONSPIRACY

■ A co-conspirator is guilty of the substantive crimes committed by any otherco-conspirator during the course of the conspiracy and within the scope ofthe conspiracy.

■ If a co-conspirator withdraws from the conspiracy and informs her co-conspirators of the withdrawal, she is not guilty of the substantive crimescommitted by the conspirators after the withdrawal, but is guilty of theconspiracy crime.

■ An overt act is not necessary to complete the conspiracy crime at commonlaw, but is required today for federal conspiracy crimes and is required insome states.

■ The impossibility of accomplishing the object of the conspiracy is not adefense to conspiracy, but there is no conspiracy if the parties mistakenlybelieve that the lawful object of the conspiracy is a crime.

■ A person is not a conspirator unless she combines with another human beingto commit an unlawful act or a lawful act by unlawful means. Persons whodo not have the requisite intent to qualify as a conspirator do not count asthat other person.


■ A person is not a conspirator if she does not intend to combine to commit acrime. For example, a person is not a conspirator if she intends to combineonly to do something which she believes is legal.

■ A person is not guilty of conspiracy if she combines with another person whois essential to the commission of the substantive crime (e.g., adultery).

■ Conspiracy does not merge into the substantive offense.

3. SOLICITATION

■ If the party solicited agrees to commit the crime, there is a conspiracy andthe crime of solicitation is merged into it.

B. PARTIES TO CRIME

■ To be guilty as an accomplice, the person must know that the principal iscommitting a crime and must intend to help the principal.

■ If the act being committed by the principal is not in fact a crime, the accessory isnot guilty despite his intent to help with an illegal act.

■ Presence at the scene of the crime plus encouragement of the principal tocommit the crime is sufficient for accomplice liability.

IV. GENERAL PRINCIPLES

A. STATE OF MIND

1. GENERAL INTENT

■ To be guilty of a general intent crime, the intent to accomplish the act mustcoincide with the doing of the act.

■ If a person desires a result and that result occurs, even through anunexpected means, the person has intended the act for purposes of thecriminal law.

2. SPECIFIC INTENT

■ To be guilty of a specific intent crime, the defendant must have the requiredspecific intent at the time he is accomplishing the specific act.

3. STRICT LIABILITY

■ The doing of the actus reus is all that is required for the defendant to beguilty of a strict liability crime.

■ Specifically forbidding an agent to perform an illegal act is not a defense for aprincipal if performing that act constitutes a strict liability offense.


■ To be guilty of an attempt to commit a strict liability offense, the defendantmust have the specific intent to commit the offense.

4. MISTAKE OF LAW OR FACT

■ A reasonable mistake of fact is a defense to a general intent crime.

■ A reasonable or unreasonable mistake of fact that prevents the specific intentfrom being formed is a valid defense to a specific intent crime.

■ A mistake of law is not a defense to a general intent crime, but a mistake oflaw that prevents the specific intent from being formed is a defense to aspecific intent crime.

B. RESPONSIBILITY

1. MENTAL DISORDER

■ A mental illness that causes delusions will not create the defense of insanityunder the MNaghten test if the individual knows what she is doing andknows that it is a crime. The irresistible-impulse test is not part of theMNaghten test of insanity.

2. INTOXICATION

■ In a specific intent crime, intoxication is a defense if the intoxication preventsthe defendant from forming the required specific intent.

■ Intoxication can prevent the formation of the malice necessary to constitutefirst-degree murder and reduce the crime to second-degree murder, but notto manslaughter.

C. CAUSATION

■ If a person mortally wounds a victim, but death occurs from a totallyindependent cause, that person is not guilty of murder.

■ Improper medical treatment resulting in death is within the scope of the riskwhen an individual causes bodily harm. Therefore, lack of causation is not adefense to a homicide crime if there was the required intent or misconduct.

D. JUSTIFICATION

■ A police officer is justified in using deadly force to apprehend a person who itreasonably appears is either committing or escaping from a dangerous felony.The use of deadly force to arrest a person for a nondangerous felony or anymisdemeanor is not justified.

■ A person assisting a police officer is justified in using the same force that a policeofficer would be justified in using.


V. CONSTITUTIONAL PROTECTION OF ACCUSED PERSONS

A. ARREST; SEARCH AND SEIZURE

1. WARRANTS

■ A search warrant can only be issued by a neutral and detached magistrate onthe basis of probable cause.

■ Probable cause can be based on the totality of the circumstances and doesnot specifically require evidence on both the basis for the search and thereliability of the informant.

■ The warrant must state with particularity the place to be searched and theobjects of the search.

■ If a magistrate grants a search warrant, and the police execute it believing ingood faith that it is valid, the property seized pursuant to the search isadmissible.

2. SEARCH INCIDENT TO LAWFUL ARREST

■ If the arrest is invalid, or the search is made before there is a valid ground toarrest, then the evidence obtained by the search is inadmissible.

■ A search incident to an arrest must be essentially contemporaneous with thearrest and only of the area within the arrestee's immediate control.

3. AUTOMOBILE SEARCHES

■ The random stopping of automobiles without any probable cause constitutesan invalid search. However, stops of all vehicles at a fixed checkpoint arepermissible.

■ Once an automobile is stopped with probable cause, the entire automobile(including the trunk and containers in the automobile) may be searched. Thesearch need not take place immediately.

■ The police may stop a car and search containers within the car if they haveprobable cause as to the contents of the containers.

4. CONSENT SEARCHES

■ The consent given by an individual to search her property must be voluntary,but the suspect need not be warned that she need not give consent.

■ A third party can give valid consent to search areas over which she has jointaccess.

■ A hotel manager cannot validly consent to the search of rooms in the hotelthat are rented to guests.


5. OTHER SEARCHES

■ A search at a border (or the functional equivalent thereof) does not requireprobable cause or a warrant.

■ A regulatory search does not require probable cause.

■ A "stop and frisk" is permitted only if there is a suspicion of criminality andmay extend only to a "pat down" search. If the "pat down" uncovers anobject that may be a weapon, an intrusive search may be made for weapons.

B. CONFESSIONS

■ If a confession is coerced, even by a private individual, then it is inadmissible forany purpose. If improperly admitted, however, such admission is subject to theharmless-error rule.

1. INTERROGATIONS

■ Miranda only applies when the suspect is interrogated while he is in custody.

■ Interrogation can take the form of behavior by the police likely to induce thedefendant to make a statement.

■ If the defendant exercises his Miranda rights by demanding a lawyer, nofurther questioning can take place until a lawyer is present and the defendantagrees to interrogation after consultation with his lawyer.

■ If a defendant agrees to submit to interrogation, he can be questioned aboutmore subjects than the crime that is the primary object of the policeinterrogation.

■ If evidence is inadmissible substantively because of a Miranda violation, it isnevertheless admissible to impeach.

C. LINEUPS

■ There is a right to counsel at a lineup only after the criminal process hascommenced.

■ If the likelihood of a proper identification is so remote or the lineup is soprejudicial that it offends due process standards, then both testimony about thelineup identification and a subsequent in-court identification are inadmissible.

D. RIGHT TO COUNSEL

■ A defendant has the right to counsel in all felonies and all misdemeanors forwhich she is actually incarcerated.

■ An individual has the right to act as her own counsel and, if she does, she cannotlater complain that she was denied her right to counsel.

■ A defendant has the right to counsel for one appeal.


■ The defendant has been deprived of effective assistance of counsel if herattorney has a conflict of interest because she is also representing a co-defendant.

E. FAIR TRIAL

1. JURY TRIAL

■ The defendant is entitled to be tried by a jury if the period of incarcerationcan exceed six months.

■ The defendant is entitled to be tried by a jury chosen from a venire in whichthere is no systematic racial exclusion. Neither the defendant nor theprosecutor may systematically exclude individuals of one race from the juryby peremptory challenges.

■ The jury need consist of only six persons. If the jury consists of only sixpersons, however, the verdict must be unanimous. If the jury consists of 12persons, a nine-person verdict is constitutional.

2. SPEEDY TRIAL

■ The right to speedy trial does not commence to run until the defendant ischarged with the crime.

■ The defendant is not denied the right to a speedy trial solely by the passageof time. There must also be prejudice to the defendant.

3. PUBLIC TRIAL

■ Even if both the prosecutor and defendant want a private trial, the public hasa right to a public trial. A trial must be public unless there is either asubstantial likelihood of prejudice to the defendant or a need to limit accessto ensure an orderly proceeding.

4. FAIR CONDUCT BY PROSECUTOR

■ A prosecutor has the obligation to disclose to the defendant all exculpatorymaterial known to or in the possession of the prosecutor's office.

5. RIGHT TO CONFRONTATION

■ The confrontation clause is satisfied if the defendant had the right to cross-examine the witness at a pretrial hearing and there is a valid excuse for thewitness' absence from the trial.

■ If the statement of one defendant is admissible against the confessor, butalso implicates a co-defendant and is inadmissible against the co-defendant,the court must either excise the offending portions of the statement or granta severance.


6. AFFIRMATIVE DEFENSES

■ The prosecution must prove all elements of the offense beyond a reasonabledoubt. However, the state can place upon the defendant the obligation toplead affirmative defenses and prove them by a preponderance of theevidence.

7. SENTENCING

■ A defendant's criminal record is admissible after the verdict, for purposes ofdeciding the appropriate sentence.

8. RETRIAL

■ The appellate court may constitutionally order a new trial if the verdict isagainst the weight of the evidence.

9. COLLATERAL ESTOPPEL

• If issues are litigated in one criminal case between the prosecution and thedefendant, they cannot be relitigated in a separate criminal case between thesame parties.

F. DOUBLE JEOPARDY

■ Jeopardy attaches in a criminal jury trial when the jury is sworn, and in a jury-waived trial when the first witness begins to testify.

• Double jeopardy does not apply when the judge declares a mistrial to benefit thedefendant or the appellate court orders a new trial as the result of thedefendant's appeal.

■ The prosecution can only appeal a judgment if a victory for the prosecution willnot result in a retrial.


MBE IN BRIEF

EVIDENCE

Table of Contents

I. PRESENTATION OF EVIDENCE 1

A. INTRODUCTION OF EVIDENCE 1

1. Requirement Of Personal Knowledge 1

2. Refreshing Recollection 1

3. Objections And Offers Of Proof 1

4. Lay Opinions 2

5. Competency Of Witnesses 2

6. Judicial Notice 2

7. Roles Of Judge And Jury 3

8. Limited Admissibility 3

B. PRESUMPTIONS 4

1. Conclusive Presumptions 4

2. Presumptions Of Fact 4

3. Presumption Of Innocence 4

4. True Or Rebuttable Presumptions 4

5. Legislatively Created Presumptions 4

C. MODE AND ORDER 4

1. Control By The Court 4

2. Form Of Questions, Leading Questions, And Narrative Testimony 5

3. Exclusion Of Witnesses 5

D. IMPEACHMENT 5

1. Prior Inconsistent Statements 6

2. Bias 6

3. Conviction Of A Crime 6

4. Specific Instances Of Conduct 7

5. Character For Truthfulness 7

6. Inability To Observe, Remember, Or Relate Accurately 7

7. Contradiction 78. Impeachment Of The Hearsay Declarant 7

9. Rehabilitation 7

E. PROCEEDINGS TO WHICH EVIDENCE RULES APPLY 8

II. RELEVANCY AND REASONS FOR EXCLUDING RELEVANTEVIDENCE 8

A. CONCEPT OF PROBATIVE VALUE 8

1. Relevancy 8

2. Counterweights To Relevancy 8

B. AUTHENTICATION 8

1. Method Of Authentication 8

2. Voice Identification 9

3. Self-Authentication 9

C. CHARACTER AND RELATED CONCEPTS 9

1. Character In Issue 92. Character Not Directly In Issue 9

3. Methods Of Proving Character 104. Other Crimes 105. Habit, Custom, And Routine Practice 10

6. Similar Happenings And Transactions 10

D. EXPERT WITNESSES AND SCIENTIFIC EVIDENCE 11

1. Expert Witnesses 11

2. Experimental And Scientific Evidence 11

E. DEMONSTRATIVE EVIDENCE 11

1. Real Evidence 11

2. Demeanor And Views 12

3. Sound And Picture Recordings 12

III. PRIVILEGES AND OTHER POLICY EXCLUSIONS 12

A. INTERSPOUSAL PRIVILEGE 12

1. Right Of Spouse To Refuse To Testify In Criminal Cases 12

2. Right To Keep Confidential Communications Out Of Evidence 12

B. ATTORNEY-CLIENT AND WORK PRODUCT 13

1. Statement Of Rule 13

2. Communications That Are Protected 13

3. Communications Between Lawyer And Subordinate 13

4. Eavesdroppers 13

5. When A Communication Is Confidential 13

6. Client Is Holder Of The Privilege 13

7. Exceptions To, And Termination Of, The Privilege 13

8. Work Product 13

C. PHYSICIAN/PSYCHOTHERAPIST -PATIENT PRIVILEGE 14

1. Physician-Patient Privilege 14

2. Psychotherapist-Patient Privilege 14

D. SELF -INCRIMINATING TESTIMONY 15

1. Witness Privilege 15

2. Privilege Of Accused 15

E. OTHER PRIVILEGES 16

1. Priest-Penitent 16

2. Required Reports 16

3. Vote 16

4. Accountant-Client 16

5. Newsperson Sources 16

6. Government Secrets 16

F. INSURANCE COVERAGE 16

G. SUBSEQUENT SAFETY MEASURES 16

H. COMPROMISE, PAYMENT OF MEDICAL EXPENSES, PLEANEGOTIATIONS 16

1. Statement Of Rule 16

2. Exceptions 17

3. Medical Payments 17

4. Settlements With Third Parties 17

5. Criminal Plea Bargaining 17

I. PAST SEXUAL CONDUCT 17

IV. WRITINGS, RECORDINGS, AND PHOTOGRAPHS 18

A. REQUIREMENT OF AN ORIGINAL 18

1. Rule Applies When Contents Must Be Proven 18

2. Original Document 18

iii

3. Degrees Of Secondary Evidence 18

B. SUMMARIES 18

C. COMPLETENESS RULE 19

V. HEARSAY AND CIRCUMSTANCES OF ITS ADMISSIBILITY 19

A. DEFINITION OF HEARSAY 19

1. Statement 19

2. Out-Of-Court Statements That Are Not Hearsay 19

3. Admissions 20

4. Multiple Hearsay 21

B. EXCITED UTTERANCES AND STATEMENTS OF PRESENTSENSE IMPRESSIONS 21

C. STATEMENTS OF MENTAL, EMOTIONAL, OR PHYSICALCONDITION 21

D. STATEMENTS FOR THE PURPOSE OF DIAGNOSIS ORTREATMENT 21

E. PAST RECOLLECTION RECORDED 21

F. BUSINESS RECORDS 22

G. PUBLIC RECORDS 22

H. LEARNED TREATISES 22

I. THE PRIOR RECORDED TESTIMONY EXCEPTION,DEPOSITIONS 22

1. Unavailability As A Requirement 22

2. Former Testimony 22

3. Depositions 22

J. STATEMENTS AGAINST INTEREST EXCEPTION 23

K. OTHER EXCEPTIONS 23

1. Dying Declaration 23

2. Vital Statistics And Family History 23

3. Ancient Documents 23

4. Market Tabulations 23

5. Residual Exception 23

iv

EVIDENCE

I. PRESENTATION OF EVIDENCE

A. INTRODUCTION OF EVIDENCE

1. Requirement Of Personal Knowledge

A witness may not testify to a matter unless evidence is introduced sufficient to support afinding that she has personal knowledge of the matter. The testimony of the witnessherself may be used to prove that personal knowledge. The personal knowledgerequirement does not apply to expert testimony. Hearsay comes within this rule onlyinsofar as the witness must have personal knowledge of the statement.

2. Refreshing Recollection

When the memory of a witness on a subject is exhausted, the examiner can attempt torefresh it by calling particular attention to some fact or event. A witness may also refreshhis memory by reference to a writing. Any document so used while on the stand, or, inthe discretion of the judge, any document so used before taking the stand, may beexamined by opposing counsel for purposes of cross-examination, and relevant portionsthereof may be admitted into evidence.

3. Objections And Offers Of Proof

a. Objections

1) Timeliness

An objection must be made as soon as opposing counsel knows she has grounds toobject.

2) Specificity

The objection must delineate the specific ground for objection unless the specificground is obvious from the context.

3) Waiver

A party can waive grounds for objecting by introducing similar inadmissible evidencehimself.

4) Probative worth

Evidence admitted without objection, even though inadmissible under anexclusionary rule, is entitled to its full probative worth.

b. Offer of proof

If evidence offered by a party is excluded by a trial judge, the party must make anoffer of proof so that the appellate court can effectively review the trial judge's

2 MicroMash MBE In Brief: Evidence

actions. An offer of proof is merely an explanation read into the record, out of thehearing of the jury, of the expected content of the excluded evidence. The offer ofproof serves the additional purpose of informing the trial judge about the testimony,allowing her an additional chance to pass on its admissibility. Federal Rule ofEvidence 103(a)(2) requires such an offer of proof unless the substance of the offerwas apparent from the context of the questions asked. An offer of proof is requiredonly when the examiner can be expected to know what the answer to her question willbe. Thus, an offer of proof is required when counsel is examining her own witness ondirect examination, and when she is interrogating a friendly witness on cross-examination. It is not ordinarily required when a question asked on cross-examination is excluded. When required, the offer must be specific and give the courtsufficient facts to determine the question of admissibility.

4. Lay Opinions

A layperson may testify to inferences or give opinions if they are rationally based uponthe perception of the witness and helpful to a clear understanding of his testimony or thedetermination of the facts in issue. Lay opinions are not permissible on subjects reservedfor expert opinions and on legal conclusions.

5. Competency Of Witnesses

Every person is competent to be a witness except:

• a witness who would be incompetent under state law if state law controls, as itdoes in diversity cases;

• a witness who lacks personal knowledge, except for an expert witness;

• a witness who cannot understand that she must tell the truth;

• the trial judge;

• a juror.

6. Judicial Notice

a. Adjudicative facts

A court must upon request, or may of its own motion, take judicial notice of any factwhich is either generally known within the territorial jurisdiction or is capable ofready and accurate determination by sources whose accuracy cannot be questioned.The judge's personal knowledge of the fact is irrelevant to this determination.

b. Judicial notice of law

A court will judicially notice the law of a state in which it is sitting and federal law.The law of sister states and foreign countries will be noticed if there is statutoryauthorization.

MicroMash MBE In Brief: Evidence 3

c. Procedure

Counsel is entitled to a hearing on the propriety of taking judicial notice. Oncejudicial notice is taken, evidence is not admissible on the issue and, except in criminalcases, the jury must accept the fact judicially noticed.

7. Roles Of Judge And Jury

a. Preliminary questions of fact

The jury decides preliminary questions of fact when the relevancy of other evidence isdependent upon such a finding, as long as there is sufficient evidence to find thatpreliminary question.

The trial judge determines those preliminary questions of fact on which theapplicability of exclusionary rules depends. He is not bound by any rules of evidence(except privilege) in making preliminary findings. Hearings on preliminary mattersmust be out of the jury's hearing in all cases on the admissibility of confessions, andin other cases where justice requires. The accused may testify at a preliminaryhearing without subjecting himself to cross-examination on all issues.

b. Function of appeals court on evidentiary matters

In addition to the limitations discussed above with respect to the proper preservationof an issue for appeal, an appellate court will uphold a judgment if the trial judgeacted within his discretion, or if the evidentiary error did not affect the substantialrights of the parties and was therefore harmless.

8. Limited Admissibility

In some instances evidence will be admissible for one purpose and inadmissible foranother purpose. If the trial judge rules adversely to either a request to admit suchevidence or an objection to its admissibility, it is the obligation of the lawyer who lost theruling to specify the limited basis for its admission. The general principle behind thisrule covering the offering of evidence and the objections thereto is that the trial judge isentitled to the assistance of counsel in making her rulings. If counsel are not specific oneither the admission or exclusion of evidence, the trial judge's ruling will be upheld if itis right for any reason.

a. Admitting evidence

A party desiring to offer physical or documentary evidence does so by having itauthenticated by a witness, showing it to the trial judge and opposing counsel, andthen asking the judge to admit it. Oral evidence is offered by asking questions of awitness on the witness stand. Once the offering party has complied with theseformalities, the obligation is upon the opponent to object to the admissibility of theevidence.

b. Specifying reason for admissibility

If the trial judge sustains a general objection, and the evidence is objectionable forany reason, the trial judge will be upheld upon appeal unless counsel specifies the


limited ground for which he is offering the evidence, and the trial judge improperlyexcludes the evidence offered for that limited purpose.

B. PRESUMPTIONS

1. Conclusive Presumptions

Irrebuttable or conclusive presumptions are merely a different way of stating rules ofsubstantive law which provide that proof of the first set of facts conclusively proves thesecond proposition.

2. Presumptions Of Fact

Presumptions of fact are rules holding that inferences which can be drawn from certainfacts have enough probative value on a second issue that a verdict cannot be directed onthat second issue if those facts are proven.

3. Presumption Of Innocence

The presumption of innocence is another way of stating that in a criminal case theprosecution has the burden of proving all the facts necessary for a conviction beyond areasonable doubt.

4. True Or Rebuttable Presumptions

A true or rebuttable presumption operates to shift the burden of production when theperson having the benefit of the presumption introduces evidence of the basic factsnecessary to bring the presumption into operation. If the basic facts are proven and theperson against whom the presumption operates offers no evidence on the presumed fact,then the presumed fact has likewise been proven. If she does offer evidence on thepresumed fact, the artificial procedural effect of the presumption disappears, but anyinferences that can be drawn about the presumed fact from the existence of the basic factmay still be drawn.

5. Legislatively Created Presumptions

Legislatively created presumptions in criminal cases are unconstitutional unless thepresumed fact is more likely than not to flow from the proven fact on which it is made todepend.

C. MODE AND ORDER

1. Control By The Court

While there is a traditional order in which a case is presented (in which the plaintiffpresents his affirmative case first, followed by the defendant's case, followed by rebuttal),the order of presentation of the case and the order of the presentation of witnesses arecontrolled by the sound discretion of the trial court.

a. Direct examination

The scope of a witness' testimony on direct examination is limited to the matterswhich are relevant to the issues presented in the case, and if the witness is called for


the purpose of impeaching another witness, a witness' testimony is limited to propermatters of impeachment discussed below.

b. Cross-examination

1) Definition

Cross-examination is defined as the examination commencing after the examinationby the party calling the witness. Because cross-examination is a fundamental right,testimony given on direct examination will be stricken if that right has been denied.

2) Improper form

Even though leading questions are permissible on cross-examination, questions willbe inadmissible if they are argumentative, misleading, or contain more than onequestion.

3) Scope of cross-examination

Examination on cross-examination is limited to the subject matter of directexamination and matters affecting the credibility of the witness. In its discretion, thecourt may permit inquiry into additional matters as if on direct examination.

4) Redirect and recross-examination

On redirect examination, counsel may inquire into matters raised in cross-examination and matters rehabilitating the credibility of the witness. Recross-examination is limited to matters raised on redirect examination.

2. Form Of Questions, Leading Questions, And Narrative Testimony

Leading questions are those in which the examiner suggests in the question the answerwhich she desires. Interrogation by leading questions is permissible on cross-examination, except where the witness is the cross-examiner's own client or is closelyallied with that client. Leading questions are not allowed on direct examination except:

• where the witness is the party opponent or is hostile;

• to cover preliminary matters;

• where the witness' memory is exhausted;

• where the witness has a weak memory or is of tender age.

Narrative testimony is permitted in the discretion of the trial judge.

3. Exclusion Of Witnesses

A judge must at the request of a party, and may on his own motion, exclude allprospective witnesses from the trial, except for a party, an officer of a party, or a personshown to be essential to a party.

D. IMPEACHMENT

Any party, including the party calling her, can impeach a witness in one or more of thefollowing ways.


1. Prior Inconsistent Statements

a. No hearsay problem if used only for impeachment

Prior inconsistent statements are relevant for impeachment because the very fact thatthey were made casts doubt upon the veracity of the statement made on the stand;therefore, they are not hearsay when used only for impeachment.

b. When admissible substantively

Such statements are admissible substantively when they come within an exception tothe hearsay rule, or if they were made under oath.

c. Inconsistency required

To be admissible, such statements must be inconsistent with a statement made on thestand.

d. Foundation required for use of extrinsic evidence

No foundation is required to inquire about an inconsistent statement on cross-examination, but if extrinsic proof of the inconsistent statement is to be made, thenthe witness must be afforded an opportunity to explain or deny it.

e. Extrinsic evidence on collateral matters inadmissible

Extrinsic evidence of a prior inconsistent statement about a collateral matter is notadmissible.

2. Bias

Evidence of bias is admissible to impeach credibility because it shows reasons why awitness might lie. Hatred, love, kinship, or interests in the outcome of the litigation arecommon examples of bias. A witness must be asked about his bias before it can beproven by extrinsic evidence.

3. Conviction Of A Crime

The court must admit any conviction involving fraud (i.e., dishonesty or false statement)against any witness, as long as the conviction is less than 10 years old.

The court may admit a recent conviction of a criminal defendant for any felony notinvolving fraud only if the impeaching party first shows that the probative value of theconviction outweighs its prejudicial effect on the accused. The court must admit a recentnonfraud felony conviction of any witness other than a criminal defendant unless theobjecting party shows that the prejudicial effect of the impeachment substantiallyoutweighs the probative value of the evidence.

A conviction more than 10 years old can be admitted against any witness only if theimpeaching party first shows that the probative value of the conviction substantiallyoutweighs its prejudicial effect.

Such evidence is presented by asking the witness about the conviction, or by theintroduction of a certified copy of the conviction. If the witness was pardoned because of


a finding of innocence or because she has been rehabilitated and has not been convictedsince then, the conviction may not be used to impeach. Convictions of a crime while ajuvenile are admissible in the discretion of the court against a witness who is not adefendant.

4. Specific Instances Of Conduct

The judge in his discretion can permit inquiry on cross-examination into specific conductthat is probative of truthfulness or untruthfulness. Extrinsic evidence of such conduct isnot allowed.

5. Character For Truthfulness

A witness who demonstrates a knowledge of a witness' reputation in the community, orwho shows direct knowledge of a witness' character, may testify either to the reputationof another witness for truth and veracity or give her own opinion about that truth andveracity. Evidence that a witness is truthful, however, is admissible only after thecharacter of the witness for truthfulness has been attacked. On cross-examination, such acharacter witness may be asked about specific instances of conduct of the witness aboutwhom she is testifying.

6. Inability To Observe, Remember, Or Relate Accurately

If a lay witness did not have any opportunity to observe the relevant event, or does notremember anything about the event, then his testimony is inadmissible. A witness can bequestioned about any deficiency in testimonial faculties on cross-examination, andextrinsic evidence of a deficiency is admissible if the matter is not collateral.

7. Contradiction

Testimony by another witness that contradicts the testimony of an earlier witnessimpeaches the earlier witness. Such impeachment is always permissible when it concernsa material fact. It is not permissible when the testimony concerns a collateral matter,unless the trial judge in her discretion determines that the witness is a very important oneand the contradiction will greatly affect her credibility.

8. Impeachment Of The Hearsay Declarant

If hearsay evidence is admissible, the out-of-court declarant can be impeached in thesame way he could if he were a witness at the trial.

9. Rehabilitation

Once the credibility of a witness has been attacked, it may be rehabilitated by eitherparty.

a. Good character

If character has been attacked, good character can be shown.

b. Prior consistent statements

If impeaching evidence has been introduced which implies that the testimony on thewitness stand is a recent fabrication, or was given as a result of improper motive or


influence, prior consistent statements are admissible substantively as well as forimpeachment purposes.

c. Bias

Evidence of bias may be rebutted, but the bias may not be justified.

d. Impeaching the impeacher

In limited instances, the credibility of the impeachment witness may be impeached.

E. PROCEEDINGS TO WHICH EVIDENCE RULES APPLY

The Federal Rules of Evidence govern proceedings in courts of the United States and districtcourts in the territories, hearings before bankruptcy judges, and hearings before United Statesmagistrates. However, they do not apply to those proceedings in which the court may actsummarily and to proceedings under Title 11 of the United States Code.

Except for the rules of privilege, the rules do not apply to preliminary questions of factdetermined by the trial judge, grand jury proceedings, extradition proceedings, criminal-sentencing proceedings, proceedings to grant or revoke probation, proceedings for theissuance of arrest or seat warrants, and bail hearings.

II. RELEVANCY AND REASONS FOR EXCLUDING RELEVANTEVIDENCE

A. CONCEPT OF PROBATIVE VALUE

1. Relevancy

Evidence is relevant if it has any tendency to make the existence of any fact that is ofconsequence to the determination of the action more probable or less probable than itwould be without the evidence. The evidence standing alone need not be sufficient towarrant a finding on the issue.

Relevancy deals with the ability of evidence to help prove or disprove a fact, whereasmateriality adds the condition that the fact proven be of consequence in the lawsuit.

2. Counterweights To Relevancy

Even though evidence passes the extremely liberal test of relevancy, evidence will beinadmissible if its probative value is substantially outweighed by the danger of unfairprejudice, confusion of the issues, misleading the jury, or by considerations of unduedelay, waste of time, or needless presentation of cumulative evidence.

B. AUTHENTICATION

1. Method Of Authentication

A writing must be authenticated before it is admissible. It can be authenticated bytestimony of a witness who saw the document signed or who is familiar with thesignature on the document, or by the introduction of an admittedly genuine specimen ofthe signer's signature. It may also be authenticated circumstantially because it contains


information known only to the author, because it was over 20 years old and taken from aplace of proper custody, or because it was in reply to an earlier document.

2. Voice Identification

A voice is authenticated either (a) if the witness recognizes it, or (b) if the witness dialsan individual's number, asks for that person, and the person answering the phoneidentifies herself.

3. Self-Authentication

Various kinds of official documents are self-authenticating, provided they bear properofficial indicia. In some instances, documents such as wills must be authenticated bytestimony of the official witnesses.

C. CHARACTER AND RELATED CONCEPTS

1. Character In Issue

When character is directly in issue, it may be proven by specific instances of conduct aswell as by reputation evidence and opinion evidence.

2. Character Not Directly In Issue

If character is not directly in issue but is offered to show that an individual acted inconformity with a specific trait, the following rules apply.

a. Use in criminal cases

The criminal defendant may introduce character evidence to show that he is not thetype of person who would have committed the crime, and the prosecution may usecharacter evidence only in rebuttal of the defendant's character evidence.

b. May not be used in civil cases

Character evidence may not be introduced in civil cases unless character or reputationis directly in issue.

c. Character of the victim

The criminal defendant may introduce evidence of the victim's relevant charactertraits. In rebuttal, the prosecution can introduce evidence of the victim's character, orthe same character trait of the accused, and to show the peaceful character of ahomicide victim if self-defense is raised. Federal Rule of Evidence 412(a) prohibitsthe defendant in a rape case from using opinion or reputation evidence concerning thevictim's past sexual behavior. In a civil case such evidence is admissible only if thealleged victim's reputation has been placed in controversy by the alleged victim.

d. Character of witness

Character evidence may be introduced concerning the truth and veracity of anywitness. Evidence of truthful character is admissible only after the character of thewitness for truthfulness has been attacked by opinion or reputation evidence orotherwise.


3. Methods Of Proving Character

Character may be proven by testimony of a witness who is familiar with the individual'sreputation concerning that character trait, or by the character witness' opinion of thatindividual with respect to that character trait. It may not be proven by specific instancesof conduct not material to the issues in the lawsuit, (i.e., when character is not directly inissue, but a character witness may be asked about specific instances of conduct on cross-examination).

4. Other Crimes

Evidence that the defendant has committed other crimes is inadmissible, except whenoffered to prove some fact other than the character of the defendant, such as motive,opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake. Ifevidence of other crimes is admissible, it need not be proven by convictions of thesecrimes.

5. Habit, Custom, And Routine Practice

Habit, a regularized response to a specific type of situation, may be proven to showcircumstantially that the response at the time in issue was in accord with that habit.Routine practice in the field of business can be proven for the same purpose. Habits ofanimals are also admissible to prove their conduct on specific occasions.

6. Similar Happenings And Transactions

Evidence of similar happenings or transactions is not admissible unless it is extremelyprobative on the transaction in issue, or unless it is relevant on some other issue in thelawsuit.

a. Similar lawsuits

Evidence of similar lawsuits is not admissible unless the other lawsuit is connected insome special way with the lawsuit on trial.

b. Prices

Prices received for the sale of similar property are admissible on the issue ofvaluation. Similar fraudulent transactions are admissible to prove absence of mistakein the case on trial. Contract dealings between the parties are admissible to aid ininterpretation, but dealings between a party and a third person are not.

c. Prior accidents

Prior accidents are not admissible, unless they are offered to show notice of adefective condition or to show causation in the case on trial.


D. EXPERT WITNESSES AND SCIENTIFIC EVIDENCE

1. Expert Witnesses

a. Qualification

An expert witness must be qualified in her field of testimony before she can giveexpert testimony.

b. Fields of expert testimony

A judge may permit expert testimony if it will assist the trier of fact to understand theevidence or determine a fact in issue.

c. Ultimate issue

Opinions are permitted on the ultimate issue, except when the question asks for ageneral conclusion in terms of inadequately explained legal criteria, or when the issueis the criminal defendant's mental state at the time of committing the crime.

d. Sources of knowledge for experts

Many times an expert will have first-hand knowledge of the factual matters uponwhich his opinion is based. In addition, he may use second-hand information if it isthe type reasonably relied upon by experts in the particular field, even if such data isnot admissible in evidence. The basis for an expert opinion need not be disclosed inadvance of the opinion, but can be elicited on cross-examination.

2. Experimental And Scientific Evidence

Experiments are admissible in the trial judge's discretion if they accurately reproduce therelevant event. Scientific evidence falls into three categories. If the scientific principle isbeyond dispute, the court will take judicial notice of the principle, and expert testimony isonly necessary on its particular application. Even if the scientific procedure has notbecome generally accepted, it is possible to introduce evidence of test results, providedthat expert evidence is produced at the trial concerning the validity of the test procedureinvolved and that the trial judge finds sufficient evidence of its reliability.

Scientific evidence introduced through a qualified expert is admissible as long as it isboth relevant and reliable. If the principle is in dispute and is likely to mislead the jury,such as the principle of the polygraph test, the evidence concerning the test is admissibleonly if counsel stipulate its admissibility.

E. DEMONSTRATIVE EVIDENCE

1. Real Evidence

Real proof must be relevant and may be excluded even if relevant if it is highlyprejudicial. It must also be authenticated. If it is not distinctive or distinctively marked,it must be authenticated by showing a chain of custody from the time of the relevantevent until trial.


2. Demeanor And Views

A trier of fact can base her findings upon observation of the demeanor of witnesses andevidence deduced from observations made in the courtroom and from authorized views.

3. Sound And Picture Recordings

Sound and picture recordings of a relevant event are admissible when properlyauthenticated.

III. PRIVILEGES AND OTHER POLICY EXCLUSIONS

A. INTERSPOUSAL PRIVILEGE

1. Right Of Spouse To Refuse To Testify In Criminal Cases

The spouse of a criminal defendant has the right to refuse to testify, provided that themarriage relationship exists at the time of trial.

2. Right To Keep Confidential Communications Out Of Evidence

A spouse also has the right to prevent his or her spouse from testifying to confidentialcommunications made during the marriage. The rule does not apply in a criminal casewhere the victim is the spouse or the children.

a. Communications

Communications are words and actions designed to transmit information, but do notinclude observations about physical conditions made by a spouse.

b. Confidential

The presence of third parties, except young children, destroys the confidential natureof the communication.

c. Holder of the privilege

The holder of the privilege is the spouse transmitting the information, but if there is adialogue, each spouse is the holder.

d. Timing

The privilege only applies to communications made while the parties are married.

e. Waiver

The privilege is waived if the holder makes the subject matter of the communicationpublic.

f. Exceptions

The privilege does not apply in suits between spouses.


g. Eavesdroppers

While the earlier rule was that an eavesdropper is entitled to testify concerningconfidential marital communications, there is a growing trend toward excluding suchtestimony.

B. ATTORNEY-CLIENT AND WORK PRODUCT

1. Statement Of Rule

Confidential communications between a client and lawyer consulted in a professionalcapacity are privileged at the option of the client. The client need not hire the lawyer orpay a fee. Communications from the lawyer to the client are also privileged.

2. Communications That Are Protected

Both written and oral communications to the lawyer are privileged, but the fact ofrepresentation, observations of physical conditions made by the lawyer, and preexistingdocuments are not.

3. Communications Between Lawyer And Subordinate

The privilege also extends to communications made to the lawyer by his agent inpreparation for a lawsuit.

4. Eavesdroppers

Under the modern approach, an eavesdropper cannot testify to privileged lawyer-clientcommunications.

5. When A Communication Is Confidential

The presence of third parties necessary for the conduct of the lawyer's business does notdestroy the confidential nature of the communication. Communications made in thepresence of another client are privileged in a suit against a third person, but they are notprivileged when one such client is suing the other.

6. Client Is Holder Of The Privilege

The client is the holder of the privilege and can waive it. The attorney must claim theprivilege unless the client waives it or authorizes her to waive it.

7. Exceptions To, And Termination Of, The Privilege

The privilege does not apply when the purpose of the communication is to plan orperpetrate a crime or fraud. Death does not terminate the attorney-client privilege. Itmay be claimed by the client's executor, but may not be claimed by anyone in a willcontest. Publication of the matter communicated to the lawyer or testimony by the clientconcerning the conversation with the lawyer will waive the privilege.

8. Work Product

A qualified immunity protects from discovery materials prepared for litigation. FederalRule of Civil Procedure 26(b)(3) states: "A party may obtain discovery of documentsand tangible things otherwise discoverable...and prepared in anticipation of litigation


or for trial by or for another party or by or for that other party's representative (includinghis attorney, consultant, surety, indemnitor, insurer, or agent) only upon a showing thatthe party seeking discovery has substantial need of the materials in the preparation ofthe party's case and the party is unable without undue hardship to obtain thesubstantial equivalent of the materials by other means." (Emphasis added). Thepolicy underlying the "work product" immunity is the necessity for the lawyer toinvestigate all facets of the case and develop his theories without fear of having todisclose his strategies or information that is unfavorable to his client.

The work-product immunity now extends to persons other than the attorney who arerepresenting a party, e.g., investigators or insurers. However, the document must havebeen prepared "in anticipation of litigation"; documents prepared in the regular course ofbusiness are not within the work-product immunity. The immunity protects only thedocuments or things themselves; an adversary can use interrogatories or depositions todiscover the existence or nonexistence of the documents. Material prepared inanticipation of one suit should also have qualified immunity in a later suit.

Discovery of work-product information may be allowed if it is otherwise unobtainable,e.g., if a witness is dead or his memory is faulty. In determining whether "unduehardship" exists, the court will consider the cost of otherwise obtaining the material, thefinancial resources of the party seeking it, and the likelihood that a "substantialequivalent" cannot be obtained (e.g., a witness who is an employee of the defendant maybe hostile toward a discovering party who seeks a statement, and a "substantialequivalent" may therefore be unobtainable, and thus a transcript of his original statementto his employer's attorney might not be immune).

Absolute immunity from discovery protects "the mental impressions, conclusions,opinions or legal theories" of an attorney or other representative of a party concerning thelitigation.

C. PHYSICIAN/PSYCHOTHERAPIST-PATIENT PRIVILEGE

1. Physician-Patient Privilege

The physician-patient privilege is a statutory privilege by which the patient can preventthe disclosure of confidential communications made to a physician, and the disclosure ofobservations made by her. The confidential nature of the communications orobservations is not destroyed by the presence of third persons necessary to theperformance of the physician's duties. The privilege is waived if the patient introducesevidence on her physical condition or sues the physician.

2. Psychotherapist-Patient Privilege

The United States Supreme Court has recognized the psychotherapist-patient privilege.Conversations between a patient and the therapist and notes taken during the counselingsession are protected from compelled disclosure under Fed. R. Evid. 501. The courtreasoned that effective psychotherapy depends upon an atmosphere of confidence andtrust. The possibility of compelled disclosure would destroy that confidence and trust. Incontrast, the evidentiary benefit of compelling disclosure would be modest. The patient-


psychotherapist privilege applies not only to conversations with psychiatrists andpsychologists, but also with licensed social workers in the course of psychotherapy.Courts will not balance the relative importance of the patient's need for privacy againstthe evidentiary need for the disclosure of the information. If the conversation is betweena patient and a psychotherapist, the privilege applies. However, if there is a serious threatof harm to the patient or others that can only be averted by disclosure by thepsychotherapist, the privilege will not apply.

D. SELF-INCRIMINATING TESTIMONY

The privilege against self-incrimination is a constitutional privilege in two parts: the witnessprivilege and the privilege of a criminal defendant not to testify.

1. Witness Privilege

a. Applicability

The witness privilege is available in all types of proceedings, including legislativeinvestigations, but only by natural persons who claim that the answer wouldincriminate them. They cannot claim the privilege on the ground that the answerwould incriminate a third party. Loss of social status or humiliation is not a groundfor claiming the privilege. The privilege may not be claimed for a crime that isclearly barred by the statute of limitations. It can be claimed for activities that are acrime in another jurisdiction. A witness may refuse to answer, however, if aresponsive answer could possibly lead to evidence of a crime.

b. Immunity

The government can compel a witness to give an answer if it gives him immunity thatprevents the prosecution from using the answer or any evidence derived therefrom inany future trial. Immunity granted in one jurisdiction prevents use of the testimony orits derivatives to prosecute in a second jurisdiction.

c. Waiver

A witness who voluntarily testifies and discloses substantial information about asubject can be required to testify further about the same subject matter. A witness canalso claim the privilege and refuse to produce documents that are summoned, exceptwhen there is a legal requirement that the records be kept. Except in the Mirandacustodial-interrogation situation, a person has no right to be warned of her privilegeagainst self-incrimination.

2. Privilege Of Accused

The accused in a criminal proceeding has the right to refuse to be a witness. This rightattaches only when formal legal proceedings have been commenced against him. Theprivilege, however, is testimonial. The accused may be required to stand up, try onclothes, give fingerprints, and give handwriting and voice samples. The prosecution maynot comment on the failure of the accused to testify. If the accused voluntarily takes thestand, he waives his privilege against self-incrimination as to his credibility and matterswithin the scope of direct examination.


E. OTHER PRIVILEGES

1. Priest-Penitent

The priest-penitent privilege is law in most states. It requires a confidentialcommunication to a member of the clergy for the purpose of obtaining spiritual advice.

2. Required Reports

Reports required to be filed with government agencies, except income tax returns, areprivileged if the statute confers such privilege.

3. Vote

The political vote is privileged, and its tenor need not be disclosed.

4. Accountant-Client

A few states recognize a privilege for confidential communications between anaccountant and her client, but there is no such federal privilege.

5. Newsperson Sources

There is no constitutional privilege for a newsperson to refuse to disclose sources.

6. Government Secrets

The government has a right to refuse to disclose secret information concerning nationaldefense or international relations and official information that is protected fromdisclosure under freedom-of-information acts. The government likewise has the right torefuse to disclose the identity of an informer, provided that he is not known to those whowould harm him, and his testimony is not necessary to a fair determination of the case. Ifthe government exercises one of its privileges and is a party to the suit, it must sufferadverse judgment.

F. INSURANCE COVERAGE

Evidence that the defendant is or is not covered by liability insurance is not admissible toprove that the defendant acted negligently or otherwise wrongfully.

G. SUBSEQUENT SAFETY MEASURES

Measures taken after an event which would have made the event less likely to occur if takenpreviously are not admissible to prove negligence or culpable conduct in connection withthe event, but are admissible to show control of premises or to show the feasibility ofprecautionary measures if they are in issue.

H. COMPROMISE, PAYMENT OF MEDICAL EXPENSES, PLEANEGOTIATIONS

1. Statement Of Rule

Offers to settle or compromise a claim that is in dispute as to either validity or amount areinadmissible. Conversations that are part of the settlement process are likewise


inadmissible. Offers to buy off criminal liability by payment of civil damages areadmissible in a subsequent criminal case.

2. Exceptions

Such offers are admissible when there is no dispute, or when they are offered to showsomething other than liability.

3. Medical Payments

The fact of payment of, or an offer to pay, a party's medical expenses is inadmissible.

4. Settlements With Third Parties

Settlements with a third party are inadmissible unless offered to show something otherthan the defendant's liability. However, statements made by a potential criminaldefendant to a victim in an attempt to buy off criminal liability are not protected.

5. Criminal Plea Bargaining

In criminal cases, conversations in connection with plea bargaining and withdrawal ofguilty pleas are excluded.

I. PAST SEXUAL CONDUCTFederal Rule of Evidence 412 excludes in civil and criminal proceedings involving allegedsexual misconduct evidence offered to prove that any alleged victim engaged in other sexualbehavior, or evidence offered to prove any alleged victim's sexual predisposition, with thefollowing exceptions.

In criminal cases, evidence of specific instances of sexual behavior by the alleged victim isadmissible if offered to prove that a person other than the accused was the source of semen,injury, or other physical evidence. Evidence of specific instances of sexual behavior by thealleged victim with respect to the person accused of the sexual misconduct is admissible ifoffered by the accused to prove consent. Evidence, the exclusion of which would violate theconstitutional rights of the defendant, is also admissible.

In civil cases, the evidence of past sexual behavior must be otherwise admissible and itsprobative value must substantially outweigh the danger of harm to any victim and of unfairprejudice to any party.

Evidence of the alleged victim's reputation is admissible only if it has been placed incontroversy by the alleged victim.

Any party intending to offer evidence of an alleged victim's other sexual behavior must file awritten motion at least 14 days before trial, unless the trial judge for good cause waives thisrequirement, and the judge must hold an in camera hearing at which the alleged victim andthe other parties have a right to be heard. The record of that hearing is sealed unless thejudge orders otherwise.


IV. WRITINGS, RECORDINGS, AND PHOTOGRAPHS

A. REQUIREMENT OF AN ORIGINAL

If the content of a writing is to be proven, the original writing is required unless productionof the original is excused.

1. Rule Applies When Contents Must Be Proven

The rule only applies when the contents of a document are to be proven, not when anindividual is testifying about observations that she memorialized in a document.

2. Original Document

The original document is that writing which controls the rights of the parties undersubstantive law.

a. Duplicate

A duplicate is a photographic reproduction of the original and is admissible to thesame extent as the original, unless there is a genuine question of the authenticity ofthe original, or if it would be unfair to admit the duplicate.

b. Excuse for nonproduction of original

The production of the original is excused when it is in the hands of a party opponent,and a notice to produce has been given but not complied with; when the original is inthe hands of a third party and is not subject to summons; when the original is lost andthere has been a diligent search, or when it has been destroyed by someone other thanthe party seeking to offer it; when the document is a certified copy of an officialdocument; and when the contents of the document are collateral to the issues in thelawsuit.

3. Degrees Of Secondary Evidence

If there is excuse for nonproduction of the original, any degree of secondary evidence isadmissible. If there are duplicate originals, there must be excuse for nonproduction ofboth.

a. Admission by opponent

Secondary evidence is also admissible if the opponent admits the contents of adocument in his testimony, a deposition, or in another writing.

b. Function of judge and jury

Except when the existence of a document is an issue in a lawsuit, the admissibility ofsecondary evidence is a preliminary question for the trial judge.

B. SUMMARIES

The contents of voluminous writings, recordings, or photographs that cannot conveniently beexamined in court may be presented in the form of a chart, summary, or calculation. Theoriginals, or duplicates, shall be made available for examination or copying, or both, by other


parties at a reasonable time and place. The judge may order that they be produced in court.Fed. R. Evid. 1006.

C. COMPLETENESS RULE

Federal Rule of Evidence 106, known as the completeness rule, permits a party to introduceinto evidence at the same time that her opponent introduces a document, or part of adocument, any other part of the document or any other writing or recorded statement whichought in fairness to be considered contemporaneously with it.

This rule does not require that the parts of a document to be introduced be relevant to theissues being tried, and it does not require that such parts of a document meet a hearsay test orany other test. The entire test of its admissibility is whether it is fair to introduce it andconsider it contemporaneously with some other document being introduced by the opponent.

It can happen that the document introduced by the opponent is inadmissible under these rulesof evidence. Nevertheless, Fed. R. Evid. 106 permits the introduction of other evidencerelating to the inadmissible document as long as the fairness test is met.

V. HEARSAY AND CIRCUMSTANCES OF ITS ADMISSIBILITY

A. DEFINITION OF HEARSAY

"Hearsay" is a statement other than one made while testifying at the hearing to prove thetruth of the matter asserted. The purpose of the hearsay rule is to bring before the trier of factthe most reliable evidence possible. In most instances, testimony by a witness is morereliable than an out-of-court statement because it is under oath, the jury can observe thedemeanor of the witness, and, most important of all, the witness is subject to cross-examination.

1. Statement

A "statement" is either an oral or a written assertion, or nonverbal conduct if it isintended as an assertion. Words or conduct are assertive when the person making themwants the hearer or observer to believe something is true because he said it. Conduct thatwas not intended to be assertive when made but which is offered to show the opinion ofthe actor at the time of the conduct is not a "statement" as that term is defined in thehearsay rule.

2. Out-Of-Court Statements That Are Not Hearsay

Out-of-court statements are not hearsay when they are offered for purposes other than thetruth contained in them.

a. Statements having a legal significance

Statements that have legal significance independent of their truth, and statementswhich are contemporaneous with physical acts and which give the acts a legal effect,are not offered for their truth, and are not hearsay.


b. Statements offered circumstantially

Statements are not hearsay if offered circumstantially. If knowledge of an individualmust be proven, a statement made in her presence containing the requisite informationis not hearsay when offered to show that as a result of the statement, the individualpossessed the required knowledge. Statements from which an inference about thestate of mind of the speaker can be drawn are not hearsay when offered on the issue ofher state of mind. An out-of-court statement that is proven false is not hearsay whenoffered to prove that similar statements made on the stand are also false.

c. Out-of-court statements of witnesses

Out-of-court statements of witnesses testifying at a trial are admissible to impeachcredibility if they are inconsistent with testimony given on the stand, because they areoffered only to show that a person who says two different things about a situationshould not be believed.

Despite the fact that the witness is on the stand and can be cross-examined, suchstatements are not admissible substantively unless they were made under oath. Out-of-court statements that are consistent with in-court testimony are inadmissible,unless they are offered to rebut the inference that the statement on the stand was arecent contrivance or the product of improper influence. Evidence of prioridentification made by an eyewitness who testifies at trial is also excluded from thedefinition of hearsay.

3. Admissions

An out-of-court statement of a party is admissible, even though it was in his interest at thetime he made it, and even though he had no personal knowledge of the facts contained init.

a. Statement of party

In addition to the statement of a party, her actions that are inconsistent with theposition she is taking in a case are admissible against her.

b. Adoptive admissions

Likewise, statements made by others that a party has adopted through his actions areadmissions. This most commonly occurs when a party remains silent when astatement is made in his presence which he would deny if it were false. Suchstatements are not admissible when a defendant is entitled to his Miranda rights. Aparty may adopt a statement without knowing its precise nature if he indicates that itsauthor is a reliable person.

c. Vicarious admissions

Statements made by an authorized agent or a partner are admissible.


d. Statement of an employee

Even though an employee is not authorized to speak for her employer, her statementsmade while an employee that involve matters concerning her employment areadmissible.

e. Statements of a conspirator

Statements made by a conspirator are admissions against co-conspirators if made infurtherance of the conspiracy and during the course of the conspiracy.

4. Multiple Hearsay

A statement of an out-of-court declarant that is admissible under an exception to thehearsay rule must be one where the out-of-court declarant has personal knowledge of thefacts contained in the statement. If he does not, then the statement is totem-pole hearsayand is not admissible unless each layer of hearsay is supported by an exception to thehearsay rule.

B. EXCITED UTTERANCES AND STATEMENTS OF PRESENT SENSEIMPRESSIONS

A statement made by a person while under the stress of an exciting event concerning thatevent, made of the personal knowledge of the out-of-court declarant, is admissible, even ifthe out-of-court declarant is available. Even if there is no exciting event, a present senseimpression (a statement made by a declarant while viewing an event) is admissible.

C. STATEMENTS OF MENTAL, EMOTIONAL, OR PHYSICALCONDITION

Statements of present physical or mental or emotional condition are admissible if offered toprove that condition. Statements of present intention are admissible to show future intentionand future actions based on that intention.

D. STATEMENTS FOR THE PURPOSE OF DIAGNOSIS OR TREATMENT

Statements of past physical or mental condition are admissible when made for the purpose ofdiagnosis or treatment. The statement need not be made to a physician, but can be made toany person who might render treatment. A statement made to a doctor for the purpose ofhaving the doctor make a diagnosis and testify about it is admissible.

E. PAST RECOLLECTION RECORDED

If a witness on the stand testifies that she once had a memory of an event, that she recordedher memory at the time of the event, and that she no longer has any memory, then the recordof the past memory may be read to the jury but the writing itself is not admissible by itsproponent. An adverse party can require that the document be admitted. However, thewriting must satisfy the admissibility requirements of a writing, in that it must beauthenticated and must not violate the Best-Evidence Rule.


F. BUSINESS RECORDS

Records kept in the routine course of business are admissible despite the fact that thedeclarant is available. Personal knowledge of the person who kept the record is not required,but someone with personal knowledge must have transmitted the information in the usualcourse of his business. Records that were prepared for litigation, even though kept in theusual course of business, are not admissible. A record is self-authenticating if it is certified tomeet the requirement of the business records exception by a qualified person. Businessrecords are also admissible to show the nonoccurrence of an event if it can be shown that theevent, if it had occurred, would have appeared in the record.

G. PUBLIC RECORDS

Records of the activity of a public agency, records of observations which a public official hasa duty to make, and records of an investigation made pursuant to law are admissible. Theoriginal record need not be produced, and a certified copy is admissible. The nonoccurrenceof an event can be proven by the absence of an entry in an official record. Evidence ofjudgments of conviction are admissible to prove any fact necessary to sustain the judgment.

H. LEARNED TREATISES

Learned treatises concerning a subject upon which an expert witness has testified areadmissible if established as a reliable authority. Relevant portions may be read to the jury,but the treatise itself is not admissible as an exhibit.

I. THE PRIOR RECORDED TESTIMONY EXCEPTION, DEPOSITIONS

1. Unavailability As A Requirement

The prior-recorded-testimony exception, the declaration against interest exception, andthe statement made under belief of impending death exception require that the out-of-court declarant be unavailable. A declarant is unavailable if she has successfully claimeda privilege, refuses to testify, takes the stand and says she has no memory on the subject,is absent because of death or mental illness or infirmity, or cannot be required to attendby process or other reasonable means.

2. Former Testimony

The prior-recorded-testimony exception admits in both criminal and civil cases testimonyof a witness in an earlier proceeding who is currently unavailable, if he is testifyingagainst the same party in both cases. In civil cases, prior recorded testimony isadmissible if the party against whom it is offered in the second hearing had interestswhich were similar to the party against whom it was offered in the prior hearing.

3. Depositions

A statement in a deposition is generally inadmissible as hearsay. However, anydeposition may be used by any party for contradicting or impeaching the deponent'stestimony as a witness or for any other purpose permitted by the Federal Rules ofEvidence. Likewise, since the statement in a deposition of a deponent who is on the


witness stand is made under oath, a prior inconsistent statement in a deposition can beused as substantive evidence.

The deposition of an adverse party or of an officer, director, or other agent of an adversecorporate party is an admission and may be admitted for any purpose. The deposition ofany witness (party or nonparty) may be used for any purpose if the deponent is (a) dead,(b) more than 100 miles from the trial, (c) infirm or imprisoned and unable to testify, (d)not obtainable by subpoena, or if (e) special circumstances make it desirable in theinterests of justice to use the deposition.

J. STATEMENTS AGAINST INTEREST EXCEPTION

When the out-of-court declarant is unavailable, a statement made by her that was contrary tothe declarant's pecuniary or proprietary interest and which would likely subject her tocriminal or tort liability, or which would likely render invalid a claim which she mightpossess, is admissible as an exception to the hearsay rule, provided that it was against herinterest at the time it was made. If the statement is offered to exonerate a criminal defendantby showing that the out-of-court declarant committed the crime, the evidence must becorroborated.

K. OTHER EXCEPTIONS

1. Dying Declaration

A statement made by a person who believes his death is imminent concerning the causeof or circumstances surrounding that imminent death is admissible as an exception to thehearsay rule in civil cases where the declarant is unavailable and in criminal-homicideprosecutions.

2. Vital Statistics And Family History

Records of vital statistics, records of religious organizations, family records, andreputation concerning family history are admissible to prove family relationships. If thedeclarant is unavailable, her own statement concerning her personal history is admissible.

3. Ancient Documents

Documents more than 20 years old in proper custody come within the ancient-documentsexception to the hearsay rule.

4. Market Tabulations

Tabulations of market-price quotations are admissible.

5. Residual Exception

The federal rules contain a residual exception which admits evidence on a material fact ifit is more probative on that fact than any other evidence which can reasonably beprocured, if its admission serves the interests of justice, and if the adverse party has beengiven notice of the intention to rely on this exception.

MicroMash® MBE REVIEW


EVIDENCE

I. PRESENTATION OF EVIDENCE

A. INTRODUCTION OF EVIDENCE

1. FIRST HAND KNOWLEDGE

■ Every witness (except an expert witness and a witness testifying toadmissible hearsay) must testify from first-hand knowledge.

2. REFRESHING RECOLLECTION

■ Present memory refreshed occurs when the witness' memory is revived (e.g.,by reference to a document). The witness then testifies to what sheremembers. The rules regarding hearsay and admissibility of writings areinapplicable.

■ On the other hand, past recollection recorded occurs when a witness hasmade a written record on a matter while her memory was fresh, and hermemory of that matter is exhausted and cannot be revived. The documentitself, which comes within a hearsay exception, is read to the jury and mustsatisfy the requirements for admissibility of a writing.

■ If a witness brings written documents with her while testifying, opposingcounsel can examine them as a matter of right in the course of cross-examination.

3. OBJECTIONS AND OFFERS OF PROOF

■ An offer of proof is required only when an objection to a question issustained. The party must state for the record what the answer to thequestion would be, if known.

■ To preserve an issue for appeal, counsel must object to the admissibility ofevidence at the time it is offered.

4. LAY OPINIONS

■ A layperson can testify in the form of opinion with respect to matters onwhich laypersons are competent to form opinions, if the opinion is based

2 MicroMash MBE In Brief: Evidence Bar Exam Alerts

upon personal knowledge and is helpful to an understanding of thetestimony.

■ A lay witness cannot testify on matters on which only experts are qualified togive opinions, even if the layperson's opinion is based upon first-handknowledge.

5. COMPETENCY OF WITNESSES

■ The Federal Rules of Evidence require that a federal court apply the state'srule on matters of competency of witnesses and privilege if state law providesthe basis for decision in the federal court (as it would in diversity cases).

6. JUDICIAL NOTICE

■ A jury in a criminal case is not bound to take as true matters that have beenjudicially noticed.

7. ROLES OF JUDGE AND JURY

■ Hearsay evidence that would be inadmissible at trial is admissible before ajudge who is hearing evidence on a preliminary question of fact.

B. PRESUMPTIONS

■ If the party seeking the benefit of a presumption introduces evidence from whichthe jury can find the basic fact giving rise to the presumption, the party againstwhom the presumption operates must introduce evidence contradicting thepresumed fact or face a directed verdict against him on that fact.

C. MODE AND ORDER

1. CROSS-EXAMINATION

■ If the opposing party is deprived of his opportunity to cross-examine awitness, the remedy is to strike the direct examination.

2. REDIRECT AND RECROSS-EXAMINATION

■ Generally, testimony on redirect examination must relate to those mattersasked on cross-examination.

■ If part of a document is admitted in evidence by one party, the opposingparty has the right to introduce any other part of the same document whichought in fairness to be considered with the part already in evidence, even ifsuch evidence would otherwise be inadmissible.

3. FORM OF QUESTIONS

■ Leading questions are not permitted on direct examination except: to coverpreliminary matters, where a witness is hostile, where a witness' memory isexhausted, or where the witness because of tender age or weak memory can

MicroMash MBE In Brief: Evidence Bar Exam Alerts 3

be examined only by leading questions. On cross-examination, leadingquestions are permissible.

■ An argumentative question (e.g., one that starts "Don't you know that . . .")is inadmissible even on cross-examination.

D. IMPEACHMENT, CONTRADICTION, AND REHABILITATION

1. INCONSISTENT STATEMENTS AND CONDUCT

■ A prior inconsistent statement is admissible only to impeach unless it comeswithin an exception to the hearsay rule or it was given under oath, in whichcase it is admissible to prove the matter asserted.

■ Extrinsic evidence of a prior inconsistent statement is inadmissible to impeachcredibility unless the attention of the witness is called to the statement.

2. BIAS AND INTEREST

■ Unless the witness admits the facts relating to bias on cross-examination,extrinsic evidence can be introduced to prove bias.

■ If offered to prove bias, usually inadmissible evidence (such as insurancecoverage and other criminal convictions) is admissible.

3. PRIOR BAD ACTS

■ Evidence of bad acts that show fraudulent conduct can be inquired into oncross-examination to impeach credibility, but extrinsic evidence of suchconduct cannot be introduced.

4. CHARACTER

■ Character can be attacked either by opinion evidence or by reputationevidence.

■ The character of a witness for truthfulness cannot be introduced until thatcharacter trait has been attacked.

5. PRIOR CONVICTIONS

■ Prior convictions of a person can only be introduced to impeach credibilityafter that person has testified.

■ Evidence of convictions for misdemeanors not involving dishonesty or falsestatement are always inadmissible to impeach credibility.

■ The party proffering a witness can anticipate impeachment of the witnessthrough the use of prior convictions by introducing the convictions against thewitness on direct examination.

■ The court must admit any conviction involving dishonesty or false statementagainst any witness, as long as the conviction is recent (i.e., less than tenyears old).


■ The court may admit a recent conviction of the criminal defendant for a crimepunishable by death or at least one year imprisonment only if the impeachingparty first shows that the probative value of the conviction outweighs itsprejudicial effect. The court must admit a recent conviction of a witness(other than the accused) for a nonfraud crime punishable by death or at leastone year imprisonment unless the objecting party shows that the prejudicialeffect of the impeachment substantially outweighs the probative value of theevidence.

■ A conviction more than ten years old can be admitted against any witnessonly if the impeaching party first shows that the probative value of theconviction substantially outweighs its prejudicial effect.

6. CONTRADICTION

■ Extrinsic evidence cannot be used to contradict a witness on a collateralmatter.

7. IMPEACHING HEARSAY DECLARANTS

■ An out-of-court declarant whose statement is admissible hearsay may beimpeached in the same manner as an in-court witness.

8. REHABILITATION

■ A witness' credibility can be rehabilitated only with respect to the manner inwhich it has been attacked. For example, evidence of good character canonly be presented if the witness' character has been attacked.

II. RELEVANCY

A. AUTHENTICATION

• Objects that do not have any identifying characteristics must be authenticated byproving a chain of custody from the point at which the object became relevantuntil the time of trial.

■ A photograph is admissible upon testimony that it fairly and accurately depicts arelevant event. The photographer is not required to so testify; any witness maytestify.

■ A telephone voice of an individual is authenticated by testimony either that thewitness recognized the voice, or that the witness called the number listed to thatindividual and the call was answered by a person identifying herself as thatindividual. A telephone voice of an individual is not authenticated if the witnessdoes not recognize the voice and the person calls the witness and identifiesherself.


■ A lay witness cannot testify to the genuineness of a signature solely on the basisof comparing the signature in question to an admittedly genuine signature, but ahandwriting expert can.

■ Familiarity with a signature by a witness, even at a distant time, is all that isrequired to authenticate the signature.

B. CHARACTER

■ Evidence of regularized conduct that can be characterized as a habit isadmissible to prove conduct in accordance with that habit.

■ Evidence of other crimes is admissible only to prove identity, motive, notice,opportunity, plan, or similar relevant facts in a criminal case. Conviction of theother crime need not be proven.

■ Evidence of similar events or circumstances is not admissible to prove therelevant event unless the probative value is compelling.

■ Evidence of a character trait to show propensity to act in accordance with thattrait is always inadmissible in a civil case.

■ The defense in a criminal case can prove, by opinion or reputation evidence,character traits of the criminal defendant that are inconsistent with the allegedcriminal activity. After the defendant introduces such evidence, the prosecutioncan rebut with similar character evidence.

■ The prosecution cannot initiate proof of character in a criminal case, except toprove the peaceful nature of the victim in a homicide case where the defendanthas raised the defense of self-defense.

C. EXPERT TESTIMONY AND SCIENTIFIC EVIDENCE

■ It is unlikely that you will be given a multiple-choice question in which you mustdetermine if a particular expert is qualified, because qualification involvessubjective value judgments made in the discretion of the trial judge. However,beware of the question where a witness is asked a question calling for experttestimony and there is no indication that she has been qualified. Under thosecircumstances, the question is inadmissible because a proper foundation for thetestimony has not been laid.

■ An expert witness need not testify from personal knowledge, but instead maydraw inferences from facts presented to him and may rely on the opinions ofother experts if to do so is customary in the field of expertise.

■ An expert witness can be cross-examined about specific instances in hisbackground that bear on his qualification as an expert.

■ Except for the mental state of a criminal defendant, an expert witness can givean opinion on the ultimate issue in a case.


■ Evidence of a scientific test that fairly represents a relevant event is admissibleeven if the opposing party had no notice of the test and did not participate in it.

D. DEMONSTRATIVE EVIDENCE

■ The judge has wide discretion in deciding whether and in what form to allowdemonstrative evidence. The judge may exclude demonstrative evidence asunduly inflammatory, even if it is relevant.

III. PRIVILEGES AND OTHER EXCLUSIONS

A. SPOUSAL COMMUNICATION

■ There are two separate marital privileges, with distinct rules. Under the first, awitness-spouse can refuse to testify in a criminal prosecution of the defendant-spouse, but the defendant-spouse cannot keep the witness-spouse off the stand.With respect to this rule, the parties must be married at the time of trial.

■ The second rule applies to confidential communications between individuals whoare at the time of the communication, married to each other. The privilege withrespect to such communications survives divorce. The presence of third partiescapable of understanding the conversation destroys the confidentiality necessaryfor this spousal privilege.

B. ATTORNEY-CLIENT COMMUNICATION

■ The privilege only applies to confidential communications between a client andan attorney for the purpose of obtaining legal advice.

■ The privilege applies even if the attorney is not in fact hired by the client.

■ The privilege applies even if the individual consulted is not an attorney, if theclient reasonably believed that he was.

■ The presence of third parties reasonably necessary for either the attorney or theclient to perform their duties does not destroy the confidentiality necessary forthe privilege.

■ If two clients consult one lawyer, communications in the presence of both clientsand the lawyer are privileged in any suit with a third party, but are not privilegedin a suit between the clients.

■ The privilege is inapplicable if the purpose of the communication was to commitfuture fraud or future criminal conduct.

■ The privilege is inapplicable if the client or a disciplinary body calls the attorney'sconduct into question and the attorney must reveal the confidentialcommunication to defend himself.


■ Turning over preexisting documents to an attorney does not make themprivileged, but a letter to an attorney seeking legal advice is privileged.

C. PHYSICIAN-PATIENT COMMUNICATION

■ The physician-patient privilege is a statutory privilege by which the patient canprevent the disclosure of confidential communications made to a physician, andthe disclosure of observations made by him. The confidential nature of thecommunications or observations is not destroyed by the presence of thirdpersons necessary to the performance of the physician's duties. The privilege iswaived if the patient introduces evidence on his physical condition, or sues thephysician.

D. SELF-INCRIMINATION

■ The privilege against self-incrimination is a testimonial privilege and does notempower a defendant to refuse to turn over nontestimonial items such as bodilyfluids, handwriting, or voice samples.

■ The privilege against self-incrimination (except for cases where the Miranda ruleconcerning confessions is applicable) operates prospectively, and does not give adefendant the power to suppress a statement already made.

■ A defendant who testifies on a preliminary matter in a criminal case does notwaive his right to refuse to testify in the case itself, and cannot be cross-examined in the preliminary hearing on matters beyond the scope of thepreliminary hearing.

• Admissions of ownership for purposes of asserting standing in a hearing on amotion to suppress evidence are not admissible in the criminal trial.

■ The government, by granting use and derivative-use immunity, can compeltestimony despite the privilege against self-incrimination.

E. OTHER PRIVILEGES

■ Other privileges, recognized in some jurisdictions, include a priest-penitentprivilege, a social worker-client privilege, and privileges not to disclose one'svote, a newsperson's sources, and government secrets.

F. REMEDIAL MEASURES

■ Evidence of subsequent remedial measures is not admissible to prove negligenceor culpable conduct, but is admissible to prove ownership or control.

G. COMPROMISE, PAYMENT OF MEDICAL EXPENSES, AND PLEANEGOTIATIONS

• An offer to compromise a disputed claim and all statements made in such acontext are not admissible to prove liability.


• An offer in compromise is admissible, however, if it is accepted and the party issuing in contract to enforce it.

• An offer in compromise cannot qualify as such until the other party has made aclaim so that a dispute exists.

■ An offer to pay or the payment of medical expenses is likewise not admissible toshow liability. However, a statement made in connection with an offer to paymedical expenses is admissible.

■ An offer to plea bargain and statements made in connection therewith are notadmissible at a subsequent trial.

■ If the criminal process has not begun, a statement made in an attempt to avoidcriminal liability (for example, an offer to pay for goods that were stolen) isadmissible at a subsequent trial.

H. PAST SEXUAL CONDUCT

■ Evidence of a rape victim's sexual conduct is admissible only if: (1) it involvesother sexual conduct with the alleged perpetrator or the alleged victim's sexualconduct with a person other than the defendant at the time of the alleged rapeand (2) the judge determines that the probative value of the evidence outweighsits prejudicial effect.

IV. BEST EVIDENCE RULE

• Secondary evidence used to prove a collateral matter is admissible despite thebest evidence rule.

■ The best evidence rule does not require the production of a written record of anevent if the witness can testify about that event from first-hand knowledge.

V. HEARSAY AND ITS ADMISSIBILITY

A. DEFINITION OF HEARSAY

■ Evidence that is hearsay and does not come within any hearsay exception isinadmissible.

■ An out-of-court statement is not hearsay if you do not have to believe thestatement is true for it to be relevant in the lawsuit.

■ Nonverbal conduct is hearsay only if the person intended to make an assertivestatement by the conduct.

■ Out-of-court statements that are only used circumstantially — not to prove thetruth of the matter asserted — are not hearsay. Examples of this include


statements admitted to show: (1) the knowledge or state of mind of either thedeclarant or the recipient of the statement, when such is relevant to a case; (2)the declarant's lack of credibility; or (3) the meaning to the parties of the wordsinvolved in a statement.

B. PRIOR STATEMENTS OF WITNESSES

1. PRIOR INCONSISTENT STATEMENTS

■ If a witness testifies on the stand, a prior inconsistent statement by thewitness given under oath subject to the penalty of perjury is admissiblesubstantively to contradict the witness.

■ If the prior inconsistent statement was not made under oath subject to thepenalty of perjury, it is only admissible to impeach. If the witness is not onthe stand, a prior statement can be admissible under the former-testimonyexception to the hearsay rule, if the necessary requirements are met (thedeclarant is unavailable, etc.).

2. PRIOR CONSISTENT STATEMENTS

• An out-of-court statement consistent with testimony on the witness stand isadmissible substantively for the purpose of showing that the testimony givenon the witness stand is not a recent contrivance when the opposing party hasimpeached credibility by use of a prior inconsistent statement.

■ An out-of-court statement consistent with testimony on the witness stand isadmissible substantively to rebut an inference of bias if the consistentstatement was made prior to the time that the reason for the bias occurred.

3. PRIOR EYEWITNESS IDENTIFICATION

• A prior identification by a witness is admissible if the witness is on the standand testifying subject to cross-examination.

4. STATEMENTS BY PARTY-OPPONENT

■ An out-of-court statement of a party is admissible, even though it was in hisinterest at the time he made it, and even though he had no personalknowledge of the facts contained in it.

■ In addition to the statement of a party, his actions that are inconsistent withthe position he is taking in a case are admissible against him.

• Statements made by others that a party has adopted through his actions areadmissions. This most commonly occurs when a party remains silent when astatement is made in his presence which he would deny if it were false. Suchstatements are not admissible when a defendant is entitled to his Mirandarights. A party may adopt a statement without knowing its precise nature ifhe indicates that its author is a reliable person.


5. STATEMENTS BY AGENT

■ Statements made by an authorized agent, a partner, or a predecessor in titleare admissible.

■ The statement of an employee while still employed concerning matters withinthe scope of her employment is an admission against her employer, even ifthe employee was not specifically authorized to speak for the employer.

6. ADMISSIONS BY CO-CONSPIRATOR

■ Admissions made by one co-conspirator are only admissible against anotherco-conspirator if made during the course of the conspiracy. A conspiracyends with the arrest of the co-conspirators.

C. PRESENT SENSE IMPRESSIONS AND EXCITED UTTERANCES

■ A present sense impression must be more contemporaneous with the promptingevent than an excited utterance, but does not require an exciting event.

■ A witness may testify to a present sense impression stated by the declarantwithout having been in a position to observe the facts related by the declarant.

D. STATEMENTS OF MENTAL, EMOTIONAL, OR PHYSICALCONDITION

• The present-mental-state exception can be used to prove actions in accordancewith that mental state.

■ Statements of present physical condition are admissible if made to anyone.Statements of past physical condition are admissible only if made to a doctor orthe like for purposes of medical diagnosis or treatment.

E. PAST RECOLLECTION RECORDED

■ The declarant must be on the witness stand for either a past recollectionrecorded or a nonhearsay statement of prior identification to be admissible.

F. DOCUMENTATION

• The business record exception is not applicable to a business record made inpreparation for a lawsuit.

■ Where the learned treatise exception applies, the passage in the learned treatiseis admitted substantively. However, the treatise itself cannot be admitted as anexhibit.

■ The learned treatise exception is available only after the opposing expert testifiesand the proponent establishes the authority of the treatise. The opposing expertneed not admit to the authority of the treatise, but some expert must establishits qualifications.


G. STATEMENTS AGAINST INTEREST

■ When the out-of-court declarant is unavailable, a statement made by her whichwas contrary to the declarant's pecuniary or proprietary interest and which wouldlikely subject her to criminal or tort liability, or which would likely render invalid aclaim which she might possess, is admissible as an exception to the hearsay rule,provided that it was against her interest at the time that it was made. If thestatement is offered to exonerate a criminal defendant by showing that the out-of-court declarant committed the crime, the evidence must be corroborated.

H. OTHER HEARSAY EXCEPTIONS

■ Statements made in contemplation of impending death, declarations againstinterest, former testimony, and statements of personal and family history requireunavailability. Other hearsay exceptions do not.

■ A witness who is available but refuses to answer questions or claims the privilegeagainst self-incrimination is "unavailable" for purposes of the Fed. R. Evid. 804hearsay exceptions.

■ If prior testimony is offered in a case where the parties are not identical to thecase in which the witness testified, the prior testimony is admissible only if theopposing attorney in the first trial had an opportunity and the same motive forcross-examination as the party against whom the statement is offered in thesecond trial.

■ A statement of impending death is admissible only in civil cases and criminal-homicide prosecutions. The death of the declarant is not required (onlyunavailability).

■ Family records and reputation concerning family history are admissible to provefamily relationships. If the declarant is unavailable, his own statementconcerning his personal history is admissible.

■ Documents more than 20 years old in proper custody come within the ancient-documents exception to the hearsay rule.

MicroMashe

MBE IN BRIEFREAL PROPERTY

MicroMash® BAR REVIEW

MBE IN BRIEF

REAL PROPERTY

Table of Contents

I. OWNERSHIP 1

A. PRESENT ESTATES: THE FEE SIMPLE 1

1. The Fee Simple 1

2. Defeasible Fees Simple 1

3. Life Estates 3

4. Summary Of Basic Estates 4

B. CONTENACY 5

1. Tenancy In Common 5

2. Joint Tenancy 5

3. Tenancy By The Entirety 7

4. Rights And Liabilities Of Cotenants 7

C. FUTURE INTEREST 8

1. Reversions 9

2. Remainders Vested And Contingent 9

3. Executory Interests 10

4. Possibilities Of Reverter, Power Of Termination 10

5. Summary Of Future Interests 11

D. THE LAW OF LANDLORD AND TENANT 12

1. Fitness And Suitability Of The Premises 12

2. Types Of Holdings, Creation, Termination 13

3. Assignment And Subletting 14

4. Rent 15

5. Surrender, Mitigation Of Damages, Anticipatory Breach 17

E. OWNERSHIP INTERESTS IN TRUSTS 18

1. The Instrument 18

F.

2. The Trustee

3. Rights Of Beneficiaries

4. Termination Of A Trust

5. Charitable Trusts

6. Implied Trusts

SPECIAL PROBLEMS

18

18

19

19

20

21

1. The Rule Against Perpetuities 21

2. Alienability, Descendability, And Devisability 24

3. Rules of Construction 25

4. Gifts "To A And His Children" 26

II. RIGHTS IN LAND 26

A. COVENANTS AT LAW AND IN EQUITY 26

1. Requirements For A Covenant To Run 26

2. The Common Scheme 28

3. Denial Of Relief In Equity 28

4. Comparison Of Land-Use-Control Devices 28

5. Table Showing Requirements For Running Of Covenants 29

B. EASEMENTS, PROFITS, AND LICENSES 29

1. Easements 30

2. Profits A Prendre 33

3. Licenses 34

C. OTHER INTERESTS IN LAND 34

1. Fixtures 34

2. Scope And Extent Of Real Property 35

D. TAKINGS AND ASPECTS OF ZONING 39

1. Takings 39

2. Zoning 40

III. REAL PROPERTY CONTRACTS 42

A. RELATIONSHIPS INCLUDED 42

B. CREATION AND CONSTRUCTION: THE STATUTE OF FRAUDS43

1. Interests In Land Within The Statute Of Frauds 43

2. Contracts Associated With Land Not Within The Statute Of Frauds 43

C. THE PURCHASE -AND-SALE AGREEMENT 43

1. The Enforceability Of A Purchase-And-Sale Agreement 43

ii

2. Implied Conditions Or Terms 44

D. PERFORMANCE 45

1. Fitness And Suitability Of The Premises 45

2. Marketable Title Required 45

3. Risk Of Loss 46

4. Remedies For Breach Of Purchase-And-Sale Agreement 46

E. INTEREST BEFORE CONVEYANCE 47

1. The Effect Of An Enforceable Purchase And Sale Agreement — TheDoctrine Of Equitable Conversion 47

2. Earnest Money Deposits 47

3. The Closing 47

F. RELATIONSHIPS AFTER CONVEYANCE 48

1. Effect Of Closing On Purchase-And-Sale Agreement 48

2. Title Problems 48

IV. REAL PROPERTY MORTGAGES 48

A. TYPES OF SECURITY DEVICE 48

1. Mortgages (Including Deeds Of Trust) 48

2. Land Contracts As A Security Device 48

3. Absolute Deeds As Security, Equitable Mortgages 49

4. Sale Leaseback Arrangements 49

B. SOME SECURITY RELATIONSHIPS 49

1. The Underlying Obligation 49

2. Title And Lien Theories Of Mortgages 50

3. Rights Between Mortgagor And Mortgagee Prior To Default 50

4. Right To Redeem And Clogging The Equity Of Redemption 50

C. TRANSFERS BY THE MORTGAGOR 50

1. Conveyance Free And Clear Of The Mortgage 50

2. Conveyance Subject To The Mortgage 50

3. Conveyance Subject To The Mortgage With The Grantee Assuming TheDebt 50

4. Novation 51

5. Due-On-Sale Clauses 51

D. TRANSFERS BY MORTGAGEE 51

E. DISCHARGE AND DEFENSES 51

iii

F. FORECLOSURE 521. Types Of Foreclosure 522. Rights Of Omitted Parties 523. Deficiency And Surplus 534. Statutory Right Of Redemption 535. Deed In Lieu Of Foreclosure 54

V. TITLES 54

A. ADVERSE POSSESSION 541. Time When Statute Begins To Run 542. Requirement Of Continuous Possession 553. Title Obtained By Adverse Possession 55

B. CONVEYANCE BY DEED 561. Requirements Of A Valid Conveyance 562. Necessity Of A Grantee 563. Delivery 564. Land Description And Boundaries 575. Covenants Of Title 57

C. CONVEYANCING BY WILL 591. Ademption 592. Exoneration 593. Lapse 60

D. PRIORITIES AND RECORDING 601. Types Of Priority 602. Scope Of Coverage 613. Special Problems 63

iv

REAL PROPERTY

I. OWNERSHIP

A. PRESENT ESTATES: THE FEE SIMPLE

1. The Fee Simple

The fee simple absolute is the most complete property interest known to the law. It is anestate of infinite duration. At common law, in order to convey a fee simple inter vivos,the grantor had to deed the property to the grantee "and his heirs." Under the modern lawof most states, that phrase is no longer required; a simple conveyance "to B" will suffice.

2. Defeasible Fees Simple

a. Types of qualified estates

1) Determinable estates

Any estate that automatically terminates and reverts to the grantor on thehappening of a specified contingency is a determinable estate. (The grantor'sretained future interest is called a possibility of reverter.)

A determinable estate is often created by the use of words such as "so long as,""until," or "during."

2) Estates subject to a condition subsequent

If the grantor of an estate has the right to enter the property and take back theestate if a contingency comes to pass, the estate is subject to a conditionsubsequent. (The grantor's retained interest is called a right of entry forcondition broken or a power of termination.)

(a) Words of creation

Any grant retaining a right of entry on a certain condition creates an estatesubject to a condition subsequent. However, a court may find, even withoutsuch a clear expression of the grantor's interest, that an estate subject to acondition subsequent is created when the condition is preceded by a phrasesuch as "but if," "on condition that," or "provided that."

(b) Action necessary to enter and re-take estate

At common law, an actual physical entry on the land was required. Today,most jurisdictions hold that filing an action to recover the land is sufficient tore-vest title in the grantor.

2 MicroMash MBE In Brief: Real Property

3) Estates subject to an executory limitation

An estate is subject to an executory limitation if, on the happening of acontingency, a third party takes (or may take) the grantee's estate. Thus,estates subject to an executory limitation differ from determinable estates andestates subject to a condition subsequent only in that the future interest lies inanother grantee, not the grantor. (The future interest held by the third party iscalled an executory interest.)

Executory limitations are distinguished from rights of entry and possibilities ofreverter primarily because the Rule Against Perpetuities applies only to futureinterests in third parties, and thus does not apply to possibilities of reverter orrights of entry.

4) The fee tail

The fee tail was an estate that passed automatically from generation to generationof the grantee's heirs. At the death of the grantee, the property passedautomatically to the appropriate heir (usually the grantee's oldest child). Whenthat heir died, the property again passed automatically to the heir's heir, and soon, indefinitely. If any of the successive owners of the estate died without heirs,the property reverted to the grantor.

(a) Words of creation

At common law, a fee tail was created by a grant to the grantee "and the heirsof his body" or to "A, but if A dies without issue, then to B and his heirs."Such a grant was called a "fee tail general." A "fee tail special" was created ifthe grant restricted the subsequent takers to the heirs of the grantee by aparticular spouse. The subsequent takers could also be limited to the male orfemale heirs of the grantee by use of the "fee tail male" or "fee tail female."

(b) Modern developments

The fee tail has been eliminated in most states, usually by either convertingit into a fee simple absolute, or by allowing the current holder to convey theestate as a fee simple absolute.

b. Issues common to all qualified estates

1) Possessory rights of owners of qualified estates

The owner of a qualified fee estate is not liable to the holder of the future interestfor waste.

2) Grantee's right of alienation

Qualified estates are transferable, but the conditions imposed on the estate passwith the estate, even if not listed in the new deed.

MicroMash MBE In Brief: Real Property 3

3) Impermissible conditions

The contingency which terminates the estate cannot be within the control of thegrantor, because such power would reduce the estate to an estate at will. Thecontingency cannot be a prohibition against ownership or use of the land bymembers of a particular race. Many states also void conditions that encouragedivorce, discourage marriage, or discourage legitimate will contests. Many statesalso refuse to enforce a condition that would divest a fee owner of her estate onthe basis of her alienation of the estate.

3. Life Estates

A life estate is an estate the duration of which is measured by the lifetime of a person.

a. Words of creation and types of life estates

At common law, a life estate was created by the conveyance "to A." This is nolonger the rule today; such a conveyance conveys the grantor's entire estate.

A life estate pur autre vie (a life estate "for the life of another") can be created in agrantee (A, in this example) by a conveyance "to A for the life of B." A life estatepur autre vie is also created when the holder of a life estate deeds his estate toanother.

b. Rights and obligations of the life tenant

Unlike the holders of fees simple and fees tail, life tenants (and nonfreehold tenants)have only limited rights in the property.

1) Right of possession and related rights of enjoyment

The fundamental right of the life tenant is possession. Incident to that right is theright to all rents and profits during the time she is entitled to possession. She isalso entitled to evict the grantor, trespassers, adverse possessors, and holders offuture interests, and to sue for damages to her present possessory interest in theproperty.

2) Right of alienation

Absent a specific prohibition, a life tenant may lease, sell, or mortgage hisinterest in the property.

3) Rights in fixtures

When personal property affixed by a life tenant can be removed without lastingdamage to the real property, the personal representative of the deceased life tenanthas a reasonable time after the life tenant's death to remove such property.

4) Rights in division of proceeds

If the property is involuntarily converted by an eminent-domain taking, amortgage foreclosure, or a court order, the usual procedure is to value the lifeestate by use of actuarial tables in relation to the remainder interest, and divide theproceeds accordingly.


5) Obligation not to commit waste

The right of life (and nonfreehold) tenants to the use and enjoyment of property islimited by the doctrine of waste. The modern law of waste makes a life tenantliable to the holder of the future interest for any reduction in the value of thefuture estate for which the life tenant is responsible.

6) Obligation to pay taxes

The life tenant is obligated to pay the ordinary, annual real estate taxes assessedagainst the property, to the extent that she receives actual or imputed income fromthe property. The life tenant is also obligated to pay her share of extraordinaryreal estate taxes assessed to pay for long-term public betterments.

7) Obligation to pay interest on the mortgage

If the property was already mortgaged when the life tenant's estate becamepossessory, the life tenant is obligated to pay the interest due on the mortgageduring his estate, to the extent that the property produces or can produce income.The life tenant is not obligated to pay any principal due under the mortgage.

4. Summary Of Basic Estates

Name ofInterest

Free-Hold?

Example ofWords

Necessary toCreate Interest

SubsequentFuture

Interest inGrantor

SubsequentFuture

Interest Heldby Third

Party

Fee Simple Yes "to A and hisheirs" (commonlaw) "to A"(modem law)

None None

Fee Tail Yes "to A and theheirs of hisbody"

Reversion Remainder

Life Estate Yes "to A" (commonlaw) "to A forlife" (modernlaw)

Reversion Remainder

Term forYears

No "to A for 10years"

Reversion SpringingExecutoryInterest

PeriodicTenancy

No "to A from yearto year"


MicroMash MBE In Brief: Real Property

5

Tenancy atWill

No (Implied byconsensualpossession)


Determinable Estate

Yes "to A and hisheirs so longas . . . "

Possibility ofReverter

ShiftingExecutoryInterest

EstateSubject to aConditionSubsequent

Yes "to A and hisheirs, but if . . .then . . . "

Right of Entryfor ConditionBroken

ShiftingExecutoryInterest

B. CONTENACYConcurrent estates exist when two or more persons have possessory rights (i.e., estates) in asingle parcel of land at the same time.

The joint tenancy and tenancy by the entirety are specialized forms of concurrentownership, with special requirements for their creation. All other concurrent estates aretenancies in common.

1. Tenancy In Common

A tenancy in common exists when two or more owners have the right to possess propertyat the same time, and their tenancy does not meet the criteria for a joint tenancy ortenancy by the entirety.

There are no rights of survivorship. If one tenant dies, her interest passes to her heirs ordevisees.

When the respective shares of tenants in common are not specified, they are presumedto hold equal shares.

2. Joint Tenancy

a. The right of survivorship

The right of survivorship is an incident to a joint tenancy. A right of survivorshipsignifies that, at the death of a joint tenant, his interest passes to the survivingjoint tenants. It cannot be devised by will.

b. Requirements necessary to create a joint tenancy

1) Common law

At common law, any conveyance that included "the four unities" was presumed tocreate a joint tenancy.


(a) Unity of time

The interests of all the cotenants had to vest at the same time. Thisrequirement meant that a grantor could not create a joint tenancy betweenherself and other cotenants at common law, since her interest would alwayspredate the interests of her grantees.

(b) Unity of title

The interests of all the cotenants had to be acquired from the same instrument.

(c) Unity of interest

The cotenants had to have equal interests.

(d) Unity of possession

The cotenants had to have equal and concurrent rights to possess and enjoy theproperty.

2) Modern law

(a) Intent to create must be explicit

Generally, under modern law, it must be clear that the grantor intended tocreate a joint tenancy. Some states require that the grant specifically include aright of survivorship.

(b) Unity of interest

Most jurisdictions still require that joint tenants have equal interests.

c. Destruction

1) Conveyance

A joint tenant's conveyance of an interest in the property will destroy the jointtenancy between his interest and the interests of his fellow cotenants. Manyjurisdictions also hold that the signing of a contract to sell the joint tenant'sinterest will destroy the joint tenancy, at least for equitable purposes. Amortgage by a joint tenant will destroy the joint tenancy in a title-theory state(where title is passed to the mortgagee as security). However, a joint tenancy isnot destroyed by an attempt to devise the joint tenant's interest. Such a devise isof no effect at all.

2) Partition action

A judgment in a partition action will destroy a joint tenancy.

3) Effect of destruction

The destruction of a joint tenancy terminates the right of survivorship only ofthe share conveyed or partitioned. The joint tenancy (and right of survivorship)persists between the other joint tenants.


3. Tenancy By The Entirety

Tenancy by the entirety is a form of concurrent ownership that can be held only by amarried couple. There is a right of survivorship, but the owners cannot convey orunilaterally partition their individual interests (unlike joint tenants).

a. Creation

A married couple is presumed to take as tenants by the entirety. If a conveyanceto unmarried persons purports to create a tenancy by the entirety, many courts willfind that a joint tenancy was created, since the grantor probably intended that thecotenants should have a right of survivorship.

b. Destruction

A tenancy by the entirety can only be terminated by a divorce, an annulment, oran agreement to partition. Mere separation will not suffice. Once the couple isdivorced, the property is held as tenants in common. A tenant by the entirety cannotunilaterally have her interest partitioned, even by a court. The property can bepartitioned (and the tenancy by the entirety destroyed) only by agreement of theparties. A tenancy by the entirety cannot be terminated by a conveyance or adevise.

4. Rights And Liabilities Of Cotenants

a. Right to possession

A cotenant is entitled to possession of the entire property, subject to the same rightas his cotenants. Thus, if one of the cotenants actively excludes the others frompossession or enjoyment of the whole or any part of the property, his conductamounts to an ouster, and an action of ejectment will lie. However, permissivepossession and use of the entire property by one cotenant is not an ouster.

b. Right to convey

Both the tenant in common and the joint tenant (but not the tenant by theentirety) may convey their undivided interest in the property. The granteesucceeds to her grantor's concurrent ownership in the property as a tenant in common,even if the grantor held the property as a joint tenant.

If one cotenant purports to convey full and exclusive ownership of the property, theconveyance will be effective only to convey the grantee's concurrent interest.Moreover, the conveyance may be treated as an ouster of her cotenants. When onetenant seeks to convey her interest in the property by separating and conveying aparticular segment of the property, the conveyance will not be given effect insofaras it interferes with the other cotenant's right of partition.

c. Partition

A partition terminates concurrent ownership by assigning a physical share ofcommonly held land corresponding to the interest of a cotenant to the cotenant inexclusive ownership. Property held in tenancy by the entirety can only be voluntarily


partitioned. Property held in joint tenancy or tenancy in common can be partitionedby either of the following methods.

1) Voluntary partition

Cotenants may validly agree on a division of the land. This agreement must be inwriting to be effective.

2) Involuntary partition

Partition of property held in joint tenancy or tenancy in common may also beaccomplished by court action.

3) Restraints on right of partition

Reasonable restraints on a cotenant's right of partition are generally upheld, sincethe cotenant always has the right to sell his undivided interest in the property.

4) Obligation to account for rent

Since a cotenant has a right to occupy the entire premises, she is not generallyliable to account to her cotenants for the fair rental value of her ownpersonal use of the land.

5) Obligation to pay for improvements and repairs

In cases of necessary repairs, the majority rule is that contribution from the othertenants will be required. However, in the case of improvements, unnecessaryrepairs, or repairs which only benefited the paying cotenant, contribution willusually be denied.

6) Obligation to pay taxes and carrying charges

Where one tenant pays more than his share of carrying charges, such as interest ona mortgage, mortgage principal, or taxes, he is generally entitled to contributionfrom the other cotenants.

7) Waste

Most jurisdictions have enacted statutes permitting one tenant to sue another forwaste. A cotenant commits waste when she exceeds the reasonable use andenjoyment of the land.

C. FUTURE INTEREST

A future interest is reversionary if it is retained by the grantor at the time he conveys theprior estates. Reversions, possibilities of reverter, and rights of entry are reversionary futureinterests. A future interest is nonreversionary if it is granted to someone other than thegrantor at the time the grantor conveys the prior estates. Remainders and executory interestsare nonreversionary future interests.

In general, a future interest is vested if the holder has a present (i.e., certain) right to laterpossess the property. All reversionary future interests are also said to be vested. Afuture interest is contingent if the grantee's right to later possess the property is uncertain.


That is, a future interest is contingent until the grantee meets all necessary preconditionsto having a right of possession.

1. Reversions

Anytime a grantor conveys a qualified estate or an estate of lesser duration than she owns,without expressly naming a subsequent taker, the grantor automatically retains a futureinterest. Future interests held by the grantor are never subject to the Rule AgainstPerpetuities.

The grantor retains a reversion when she grants an absolute interest that is less than herown interest.

2. Remainders Vested And Contingent

Any interest in a third party that may become possessory immediately after a prior lifeestate, fee tail, or freehold estate is a remainder.

a. Vested remainders

An individual's remainder is vested if he has a present or certain right to takepossession of the property when the prior estates terminate. If the individual isnot yet alive or has not yet met a condition precedent to his taking an interest, then hisinterest is not yet vested, but is contingent.

1) Legal incidents of a vested remainder

The designation of a remainder as "vested" rather than "contingent" has thefollowing ramifications:

• A vested remainder does not lapse if the holder dies prior to the time ofpossession.

• Vested remainders are not subject to the Rule Against Perpetuities.

• Contingent remainders were "destructible" at common law, as discussedinfra.

2) Classification of vested remainders

• The Absolutely Vested Remainder. The interest of the person holdingan absolutely vested remainder is subject neither to dilution nor todivestment.

• The Vested Remainder Subject to Open. A vested remainder is "subjectto open" (or "subject to partial divestment") if the remainderman's interestis vested but her share of the property is not certain because other personsmay be capable of sharing in the grant. The vested remainder subject toopen most commonly occurs in class gift situations.

• The Vested Remainder Subject to Complete Divestment. A vestedremainder subject to complete divestment is not subject to a conditionprecedent, but a condition subsequent will completely divest theremainder interest.


b. Contingent remainders

An individual holds a contingent remainder whenever he may someday have a right totake a remainder interest, but has not yet met a condition precedent to taking suchan interest.

1) Words of creation

The condition precedent to vesting can be explicit or implied.

2) Destructibility of contingent remainders

At common law, a contingent remainder was destroyed if it had not vested by thetime the preceding estate terminated. The destructibility of contingentremainders has been abolished today.

3. Executory Interests

Any nonreversionary future interest following a qualified fee or any interest held by thegrantor is an executory interest. Executory interests are classified into "shifting" and"springing" interests, depending on the holder of the prior estate.

a. Shifting executory interests

A nonreversionary future interest following a qualified estate held by another granteeis a shifting executory interest. A conveyance "to A, so long as the property is usedfor church purposes, and if not so used, to B" creates a shifting executory interest inB.

b. Springing executory interests

A grantee holds a springing executory interest when his estate does not begin until afuture time and the immediately preceding estate is held by the grantor.

4. Possibilities Of Reverter, Power Of Termination

a. Possibilities of reverter

The grantor retains a possibility of reverter when she conveys a determinable estate.A possibility of reverter signifies that title and right to possession will automaticallyre-vest in the grantor on the happening of the specified condition.

b. Right of entry

The right of entry for condition broken (or power of termination) is created when thegrantor conveys an estate subject to a condition subsequent. The right of entrysignifies that the grantor has the right to take back the granted estate from the grantee,at his discretion, when and if the stated condition comes to pass.

The right of entry for condition broken is considered a personal right and thus notalienable, unlike reversions and possibilities of reverter.


5. Summary Of Future Interests

Name of Interest Example of WordsNecessary to Create

Interest

Applicability ofRule AgainstPerpetuities

Interest UsuallyPreceding It

(1) Reversion (Created by law whengrantor transfers lessthan she has)

No Life Estate, Fee Tail,Term for Years,Periodic Tenancy,Contingent Remainder,Executory Interest

(2) Possibilityof Reverter

(Created by lawafter Fee SimpleDeterminable)

No Fee SimpleDeterminable

(3) Right of Entryfor ConditionBroken

(Created by lawafter a Fee Simplesubject to a ConditionSubsequent)

No Fee Simple subject to aCondition Subsequent

(4) AbsolutelyVestedRemainder

"(to X for life)and then to A andher heirs"

No Life Estate, Fee Tail, orEstate for Years

(5) VestedRemainderSubject to Open

"(to X for life) andthen to the children ofA and her heirs"

Yes (until ClassCloses)

Life Estate, Fee Tail, orEstate for Years

(6) VestedRemainderSubject toCompleteDivestment

"(to X for life) thento A and her heirs, butif A does not surviveX, then to B andher heirs"

No Life Estate, Fee Tail, orEstate for Years

(7) ContingentRemainder

"(to X for life), andthen to A and her heirsif A survives X"

Yes Life Estate, Fee Tail, orEstate for Years

(8) ExecutoryInterest(Shifting Use)

"(to X and her heirs),but if the property isnot used for churchpurposes then to A andher heirs"

Yes Fee Simple subject to anExecutory Interest,Vested Remaindersubject to CompleteDivestment

(9) ExecutoryInterest(Springing Use)

"(to X for life), andone year after X'sdeath, to A andher heirs"

Yes Reversion orFee Simple subject to anExecutory Interest


D. THE LAW OF LANDLORD AND TENANT

These estates are typified by the grantee's finite possessory right, which is not measured by ahuman life. The grantor (landlord) also has an implied right to collect rent from thegrantee/tenant during the tenant's possession.

1. Fitness And Suitability Of The Premises

a. Landlord's obligations

1) Common law rule

In general, at common law, the landlord made no implied warranties that thepremises were or would remain in any particular state of repair.

The following situations provided the only exceptions to this general rule. Inthese cases, the landlord was (and is) liable for any negligence in maintaining thepremises. In order to qualify as negligence, the defects should be ones of whichthe landlord actually was or should have been aware.

(a) Latent defects

The landlord had a duty to disclose (not repair) defects which the tenantwould not reasonably be able to discover.

(b) Short-term lease of a furnished dwelling

The landlord would be liable for any damages resulting from defects of whichshe was or should have been aware.

(c) Short-term public-use lease

If the landlord knew the tenant was going to open the demised premises to thepublic and the lease was only of a short duration, the landlord was liable forany defects on the premises.

(d) Common areas

The landlord was always liable for defects in the common areas of multi-unitdwellings.

(e) Undertaking to repair

If the landlord undertook to repair a defect on the premises, he was liable forany negligence in the repair, even if he was under no duty to repair the defectin the first place. Thus, if the landlord supposedly repaired a defect, but thedefect still injured someone, the landlord would be liable.

2) Leases imposing duty on landlord

In the case of minor defects, the damages would be the cost of repair. In the caseof major defects, the damages would be the difference between the fair rentalvalue of the premises in good repair and in the state of repair in which they wereactually leased. However, at common law, the landlord was not liable in tort for


any injuries sustained as a result of a breach of a covenant to repair. The moderntrend is to impose such tort liability.

3) Modern rules of residential leases

(a) Implied covenant of habitability

The modern law of most states imposes an implied covenant of habitability onany residential lease. These covenants generally not only warrant that thepremises are in compliance with local building health and safety codes at thecommencement of the lease, but also covenant that the landlord will keep thepremises in compliance during the lease term. This covenant cannot bewaived by the tenant.

The landlord must repair any defects that rise to the level of a violation ofthe local building codes, unless the defects were caused by the negligent orintentional acts of the tenant.

(b) General duty of care

Many jurisdictions now impose a general duty of care on landlords in regardto residential tenants. In these states, a landlord is liable for her negligence infailing to discover or repair defects. The defects need not rise to the level ofa violation of a building code to create liability for damages or personalinjuries.

b. Tenant's common-law duty to avoid waste

The common-law rule is that the tenant is only under a duty to avoid waste. A tenantis required to repair negligent or intentional damage done to the premises, but he isnot obligated to repair the ordinary wear and tear to the property (unless such repair isnecessary to avoid more substantial waste). The tenant is also liable for any"ameliorating" waste which changes the property (even if it increases the property'svalue), unless he holds a very long-term lease.

If the tenant covenants to repair, the premises must be returned to the landlord inthe condition in which the tenant received them. This duty is absolute and arisesregardless of the cause of the damage. The tenant would also be liable to repaireveryday wear and tear to the property, unless the lease provided otherwise.

2. Types Of Holdings, Creation, Termination

a. The estate for years

Any estate with a fixed and certain period of duration is an estate for years. An estatefor years terminates at the end of the stated period. No notice is required.

Most American jurisdictions now require that any lease for more than one yearmust be in writing.


b. Tenancy at will

A tenancy at will is a tenancy which is terminable at the will of either the landlord orthe tenant, and has no specified period of duration.

c. Tenancy at sufferance

A tenancy at sufferance occurs when the tenant wrongfully remains in possessionafter her tenancy has been validly terminated. No notice is required to terminate atenancy at sufferance.

d. Periodic estates

An estate for successive periods of time with no fixed termination date is aperiodic estate.

1) Periodic tenancy by implication

A periodic tenancy can be implied anytime a tenant pays and the landlord acceptsrent for an identifiable period of time.

2) Termination of periodic tenancies

Periodic tenancies can be terminated by either party, but the terminating partyusually must give notice of termination equal to the length of the tenancyperiod.

3. Assignment And Subletting

Unless there is a lease provision to the contrary, the interests of landlords, tenants foryears, and periodic tenants are freely transferable. The transfer of a tenancy at will orat sufferance is valid between the parties, but is not enforceable against the landlord.

If the tenant sells her leasehold, the rights of the parties will depend on whether thetransfer is an assignment or a sublease. If the tenant conveys the remainder of her entire(temporal and physical) estate, there has been an assignment of her interest. If the tenantconveys less than her entire estate, there has been a sublease of her interest.

An assignee of the tenant takes the tenant's estate and thus is said to be in privity ofestate with the landlord. A subtenant is not in privity of estate with the landlord. Ineffect, the sublease creates a second tenancy, between the tenant and her subtenant.

a. Running of lease covenants, generally

Since the landlord and tenant are in horizontal privity when they make any leasecovenants, those covenants may run with the land at law and be enforceable by andagainst successors. Also, the fact that the landlord owns a reversionary estate in theleased premises will satisfy the requirement that the party seeking to enforce anequitable servitude must hold an estate that will benefit from the covenant.


b. The rent obligation, specifically

1) Obligation of the original tenant

The tenant cannot discharge his rent obligation by either a sublease orassignment. His contractual obligation to pay rent continues even if he is nolonger in possession of the property. However, if the tenant assigns his interest,he is only secondarily liable (as a surety); an assignee assumes the primaryobligation to pay rent.

2) Obligation of the tenant's lessee

(a) Obligation of an assignee

When a lessee accepts an assignment of the tenant's interest in leased land, thetenant's covenant to pay rent runs with the land and is enforceable against theassignee. Since the assignee is liable only by virtue of her possession of theestate and is not held to have assumed the contractual obligation per se,however, she is liable on the rent obligation only for the period of her estate(i.e., her possession).

(b) Obligation of a subtenant

The rent covenant is not directly enforceable against a subtenant.

(c) Assumption of rent obligation by lessee

If the lessee expressly assumes the tenant's rent obligation, the landlord cansue the lessee directly as a third-party beneficiary of the contract between thelessee and the tenant.

c. Covenants against assignment and subletting

Leases often contain a clause prohibiting assignment and/or subletting by the tenant.Since such a clause restricts the tenant's right of alienation, courts construe theseprovisions narrowly and are quick to find a waiver of the landlord's contractualright to prohibit a sublease or assignment. Under the rule in Dumpor's case, consentto one sublease or assignment extinguishes the landlord's right to object to any futureassignments or subleases (unless the right is specifically saved by agreement).

4. Rent

The tenant's obligation to pay rent is implied in the landlord-tenant relationship. If theamount is not specified in the lease or by agreement, a reasonable rent will be implied.

a. Defenses to the rent obligation

1) Eminent domain

If the entire premises have been taken by eminent domain, the lease and the rentobligation are terminated. If less than all of the property is taken, modern lawprovides for a proportional abatement in the rent for any lost value the tenantcannot recover from the taking authority.


2) Destruction of the leasehold

At common law, if the premises consisted solely of space in a building and thebuilding was destroyed, the lease and the rent obligation were terminated.However, if the premises consisted of land as well as buildings, the common lawheld that the lease and the rent obligation would be fully enforceable. Today,statutes in many jurisdictions or provisions in the lease itself often provide for atleast an abatement in rent if the buildings or part of the premises are destroyed.

3) Frustration of purpose/illegality

Common-law courts allowed the tenant to avoid the lease under the doctrine offrustration of purpose only if the only use of the premises allowed by the leasewas or later became illegal (e.g., by new zoning regulations). Some states haveextended the applicability of the doctrine beyond supervening illegality, toencompass acts of God or third parties that make the property unusable for itsintended use.

4) Surrender

A tenant cannot unilaterally abandon the property and avoid his contractual rentobligation. The rent obligation is terminated only if the landlord agrees to"surrender" the lease. The landlord's surrender can be an express agreement toterminate the lease (which must be in writing if more than one year remains on thelease), or it can be found in the landlord's actions.

If the landlord takes possession of the premises for his own use, or re-rents thepremises on his own account, such action will always be held to be a surrender. Ifthe landlord re-rents the premises on behalf of the tenant, the lease is notdischarged.

5) Eviction

An actual, physical eviction of the tenant by the landlord or anyone with superiortitle violates the covenant of quiet enjoyment and discharges the tenant's rent

obligation.

6) Constructive eviction

Constructive eviction occurs when the landlord breaches the covenant of quietenjoyment by significantly interfering with the use and enjoyment of the demisedpremises (e.g., by failing to provide heat). The tenant must vacate the premiseswithin a reasonable time after the interference has commenced, in order to takeadvantage of this defense to the lease.

7) Breach of a covenant of habitability

The modern law of most states imposes an implied covenant of habitability intoany lease of residential premises. If the premises fail to meet the standardsimposed by this covenant (usually based on local safety and health ordinances) orif the landlord fails to meet the obligations of an actual covenant to repair, thetenant has several options, often including a right to abate rent. Unlike the


defense of constructive eviction, the tenant need not quit the premises to utilizethe defense of breach of a covenant of habitability.

b. Landlord's remedies for failure to pay rent

1) Debt action

The landlord can sue the tenant for the rent due, as it becomes due.

2) Eviction

The modern law of most states gives landlords the right to evict for failure to payrent, either by the terms of the lease or by the terms of a statute. The moderntrend is to require that the landlord regain possession only through judicialprocess.

5. Surrender, Mitigation Of Damages, Anticipatory Breach

a. Surrender

A tenant cannot unilaterally abandon the property and avoid her contractual rentobligation. The rent obligation is terminated only if the landlord agrees to"surrender" the lease.

If the landlord takes possession of the premises for her own use, such action willalways be held to be a surrender. However, the landlord can enter the premises formore limited purposes (e.g., inspection) without automatically surrendering the lease.

A re-renting of the premises by the landlord may or may not qualify as a surrender,depending on the circumstances. Most courts presume that the re-renting of thepremises operates as a surrender, unless the landlord makes it very clear that she isdoing so only on behalf of the tenant.

b. Mitigation of damages

In most jurisdictions, the landlord will be required to mitigate his damages andwill only be able to collect the rent he could not obtain from another source. Thecommon-law rule was that a landlord was not required to mitigate his damages by re-letting the premises, unless he evicted the tenant.

c. Anticipatory breach

The landlord can sue the tenant for the rent due, as it becomes due. The landlordgenerally cannot sue for future rent due under the contract, because the doctrine ofanticipatory breach does not apply to leases. Even if the lease contains anacceleration clause, purportedly making the tenant immediately liable for all the rentdue for the life of the contract on any breach of the tenant's rent obligations, thelandlord probably will not immediately be able to sue for that amount. Many courtsview such clauses as a penalty rather than a reasonable attempt to establish liquidateddamages, and refuse to enforce them.


E. OWNERSHIP INTERESTS IN TRUSTS

Through the use of a trust it is possible to vest the legal title in land in one individual (thetrustee) and the equitable or beneficial interest in that land in others (the beneficiaries of thetrust).

1. The Instrument

In most jurisdictions, the Statute of Frauds applies, requiring equitable interests in land tobe created by a written instrument.

2. The Trustee

a. Power of sale

Unless the trust instrument gives the trustee the power to sell the trust property, shemust obtain court permission to sell.

b. Power of contract

The trustee has the inherent power to enter into contracts to manage the trustproperty, and is not liable on such contracts personally, as long as the third partyknew that the trustee was acting in a fiduciary capacity.

c. Right of compensation

A trustee is entitled to reimbursement for his reasonable expenses and liabilitiesincurred in the execution of the trust, and reasonable compensation for his services.

d. Duty of loyalty and good faith

The trustee is a fiduciary. As such, she owes a duty of loyalty and utmost good faithin all matters pertaining to the trust. She may not put herself in a position where herinterests would be contrary to the interests of the trust. Hence, she usually may notenter into any transactions with the trust.

If a trustee uses trust funds for her own benefit or in any other improper fashion, shemust account to the trust for any profits made or losses incurred as a result of suchimproper conduct. If the improper conduct leads to both gains and losses, she cannotoffset the gains against the losses.

e. Duty of reasonable care

The trustee is required to exercise reasonable care in managing the trust. However, heis not expected to be infallible. Therefore, he is not strictly liable if his decision in acertain matter turns out to be erroneous, provided that he exercised reasonable care.

3. Rights Of Beneficiaries

The beneficiary of a trust has only the rights given to her in the trust instrument. Ifthe trust permits the trustee to pay income on a discretionary basis, the beneficiary has noright to the income.


The beneficiaries have the right to sue the trustee (and, in some cases, cause the trusteeto be removed and another trustee appointed) if the trustee has breached her fiduciaryduties.

4. Termination Of A Trust

a. By the terms of the trust

A trust will usually establish its own date of termination or a condition that willterminate its existence. A trust can also be terminated prior to its express terminationdate by the methods described below.

b. By the settlor

A valid trust cannot be unilaterally terminated by the settlor prior to the time set outin the trust instrument, unless the power to revoke was expressly retained.

c. By the beneficiaries

Where the settlor has fixed the period for the termination of a trust, the trust cannot beterminated by agreement of all of the parties in interest. A probate court does,however, possess the power to terminate a trust.

5. Charitable Trusts

Charitable trusts are favored by the law because of their benefit to society. They areliberally construed and are exempt from some of the restrictions that apply to privateexpress trusts.

a. Creation similar to private trusts

A charitable trust may be created by any of the methods for creating a private expresstrust. The requirements of a settlor with capacity to convey, properly expressedintent, and a specific trust res are the same.

b. Differences from private trusts

1) Indefinite beneficiaries

In order to qualify as a valid charitable trust, the persons to be benefited must beuncertain — that is, members of an indefinite class. The reason for this rule is thata charitable trust is basically concerned with a public benefit. As long as the classis indefinite, it does not affect the validity of the trust that only a small number ofpersons will actually benefit from the trust or that the amount each will receive issmall.

2) Rules against perpetuities and accumulations

The Rule Against Perpetuities does not apply to charitable trusts; such trusts maybe perpetual. The Rule Against Accumulations also does not restrict charitabletrusts, unless the accumulation is found to be unreasonable.


3) Trust purpose

(a) Must be charitable

The essence of a charitable trust is that it is established to accomplish one ormore charitable purposes. The purpose must be one recognized in the law ascharitable, including the furtherance of health, religion, education,governmental establishments (such as parks or museums), and the relief ofpoverty or discrimination.

(b) Cy pres doctrine

Since a charitable trust may be perpetual, it is likely that at some point thecharitable purpose intended by the settlor will have been accomplished, can nolonger be accomplished, or some other change in circumstances renders itimpracticable to administer the trust in the precise manner provided by thesettlor. In such cases, the court under the cy pres doctrine may apply the giftas nearly as possible to the settlor's particular charitable intent, unless theinstrument creating the trust provides to the contrary.

4) Power to enforce

The duty of taking action to protect public charitable trusts and to enforce properapplication of their funds rests solely upon public officials. Neither the settlor norany member of the community who might benefit from the trust may bring suit toenforce it.

6. Implied Trusts

Implied trusts are an equitable remedy used by courts to avoid the unjust enrichment of atitleholder. Thus, they differ from express trusts in that they arise by operation of law,rather than by any expressed intent of a settlor. They also differ from express trusts inthat the trustee's only power and duty is to convey legal title to the property to the"beneficiary."

a. Resulting trusts

Resulting trusts are found in situations where the court determines that the intent of theparties was that the settlor-beneficiary should have title to the property.

1) Title to property taken in the name of a person other than the one payingthe consideration

If one party pays (or is responsible for) the full purchase price, but title is taken inthe name of another party, a court usually will decree that the titleholder holds theproperty in trust for the person paying the purchase price. However, if the personpaying the purchase price is legally obligated to support the person taking title(e.g., the titleholder is the purchaser's minor child or spouse), no resulting trustwill be found.


2) Purchase by a fiduciary

If a fiduciary uses fiduciary funds to purchase property, but takes title in his ownname, he holds title to such property in trust.

3) On termination of express trust

Where an express trust is properly created but fails for some reason, the trusteeholds any remaining trust funds on a resulting trust for the settlor, her heirs,devisees, or legatees.

b. Constructive trusts

A constructive trust may be imposed where property has been acquired as the result offraud or a violation of a fiduciary duty or confidential relationship.

F. SPECIAL PROBLEMS

1. The Rule Against Perpetuities

The Rule Against Perpetuities states that all nonreversionary future interests must becertain either to fail or vest within 21 years after some life in being at the creation of theinterest, or they will be invalid.

a. Interests to which the rule applies

The rule applies only to contingent remainders, executory interests, and options orrights of first refusal.

b. The period of the rule

1) The starting point of the rule period

The rule period begins with "the creation of the interest." Generally, aninterest is created when the property is no longer freely alienable by any party.

If the property is transferred inter vivos, the period begins at the time of thetransfer of title to the grantee. If the property is transferred by will, the perioddoes not begin until the death of the testator.

If the property is placed in an irrevocable trust, the period begins at the time ofthe creation of the trust. If the trust is revocable, the period does not begin untilthe power of revocation is terminated (e.g., at the settlor's death).

2) The lives in being

Once the starting point of the rule is determined, we must determine whether thereare any lives in being at that time that can serve to extend the period of timeallowed by the rule. The lives in being may either be ones artificially or naturallyconnected with the conveyance. If the lives are only artificially connected withthe gift, they must be expressly set forth in the grant.

Lives naturally connected with the gift can be implied from the grant.Measuring lives can only be usefully implied from a grant if every member of


that class must, by definition, be alive at the time of the creation of theinterest.

A child conceived but not born at the time of the creation of an interest is a life inbeing.

If no measuring lives are identifiable, the period allowed by the rule for vestingis only 21 years from the creation of the interest.

c. Nonreversionary future interests must vest or fail

1) When interests vest

A contingent remainder vests when it becomes either a vested remainder or apresent possessory interest. An executory interest vests only when it becomes apresent possessory interest.

2) Certainty

These interests must be certain to vest (or fail) within the prescribed period, fromthe moment of their creation. If, at the time of the creation of the interest, thereis any possibility that the interest will not vest within the rule period, the interestis void.

(a) The fertile octogenarian rule

For purposes of the Rule Against Perpetuities, every person is presumed to becapable of having children as long as they are alive, even though that may bephysically impossible.

(b) The unborn widow rule

If an instrument gives an interest to a living person's "widow," there is noguarantee that that living person will be married at his death to a person whowas alive at the time of the creation of the interest. Thus, the widow mightnot be a life in being at the creation of the interest. If a subsequent interestdoes not vest until after the widow's interest, the subsequent interest will vesttoo remotely and is void.

(c) The administrative contingency

Anytime that a nonreversionary future interest does not vest until the end ofsome procedure or event which is not necessarily limited in time to less than21 years, the interests are probably invalid.

3) Interests must vest or fail

The rule does not require that interests actually vest within the period of the rule,only that they be limited such that they either vest or fail within the period. Anynonreversionary future interest that is not explicitly or implicitly limited tovesting within a limited period of time will violate the rule and thus be void.


d. The rule's effect on interests and conveyances

If the future interest violates the rule, the interest is void and is stricken from thegranting instrument.

The striking of a future interest from an instrument may also alter the estate of theprior holder. If the condition that terminates the prior estate is part of the descriptionof the prior estate (e.g., a life estate or a fee simple determinable), the prior estate willnot be altered. If the condition which terminates the prior estate is part of thedescription of the future estate only (e.g., a fee simple subject to a conditionsubsequent), then the prior estate will be converted from a qualified estate into anabsolute estate.

e. Special applications of the rule

1) Class gifts

A class gift exists anytime a gift is to be shared equally among a group ofunnamed individuals who all bear the same relationship to the grantor (e.g., "mygrandchildren").

The Rule Against Perpetuities has a harsh effect on class gifts. If the rule couldbe violated by any potential member of the class, then the entire class gift isvoid.

If the class closes, however, at such a time that it is certain that the interests of allthe members of the class (as constituted) will vest within the rule, then the classgift is saved (for those members). As a general rule, courts employ the "rule ofconvenience" — a class closes at the time that any member of the class has aright to distribution of her share. If the gift is per capita, the class closesimmediately on the testator's death. If the gift is immediate and there aremembers of the class alive at the testator's death, then the class closesimmediately. If the class gift is an immediate lump sum and there are nomembers of the class alive at the time of distribution, then the class stays openuntil all potential members of the class are determined. If the class gift is, by itsown terms, postponed (e.g., it is to become possessory only after a prior estateends or some precondition is met), then the class does not close until a classmember has a right to receive her share.

2) The charity-to-charity exception

The Rule Against Perpetuities does not apply when property is vested in onecharity, with a gift over to a different charity on the happening of a condition.

f. Modifications of the common-law rule

1) The "wait and see" doctrine

Some courts and statutes have adopted the view that unless a limitation does infact fail to vest within a life in being plus 21 years, it should be held valid.


2) The cy pres rule

Some courts and statutes in recent years have used the cy pres doctrine to reformprivate trusts in such a manner as to effectuate the wishes of the settlor or grantor"as nearly as possible" within the confines of the rule's time limitation.

3) The Uniform Statutory Rule Against Perpetuities

The Uniform Statutory Rule Against Perpetuities, embodies a relatively liberal,modern rule. Under the statute, a nonvested property interest is valid if it iscertain to vest within the common-law rule period or actually does vest within 90years after its creation. The statute embodies a wait-and-see rule allowing thenonvested property interest a grace period of 90 years to vest. Moreover, thestatute has a reformation provision allowing a court on the petition of an"interested person" to modify a disposition which is invalid under the rule statedabove so that it follows the grantor's intent as nearly as possible, but does in factvest within 90 years.

The statutory rule (§5) also provides that the following rights or interests must beexercised within 30 years of their creation:

• an option in gross or a preemptive right of first refusal ingross regarding an interest in land or minerals;

• a lease commencing at a certain time or upon the happeningof a future event; and

• a nonvested easement in gross.

Additionally, a fee simple determinable or a fee simple subject to right of entryfor condition broken shall become an absolute fee unless the specifiedcontingency occurs within 30 years. If the contingency does occur within the 30-year period, the succeeding interest becomes possessory, or the right of entryexercisable, irrespective of whether the bequest or devise would have violated theRule Against Perpetuities. These provisions apply whether the succeedinginterest is a reversionary type of interest (possibility of reverter or right of entryfor condition broken) or an executory interest (shifting use).

2. Alienability, Descendability, And Devisability

a. Right of alienation

All present estates (except tenancies at will or sufferance) are alienable. All futureinterests (except rights of entry) are alienable.

1) Restraints on alienation

A restraint on the right of alienation is called a disabling restraint if it purportsto prohibit alienation of the estate and to render void any conveyance by thegrantee. Disabling restraints are void (except, perhaps, when applied tononfreehold estates).


A restraint is called a forfeiture restraint if the grantee loses his estate if heattempts to convey it. A forfeiture restraint would take the form of a qualifiedestate. Forfeiture restraints are generally effective against all estates, except feessimple.

A restraint is called a promissory restraint if the grantee covenants or contractsnot to convey the estate. Promissory restraints are generally effective against allestates, except fees simple.

2) Preemptive rights

A preemptive right is a right retained by a grantor to buy back the grantedproperty when the grantee chooses to sell it. Such a right is enforceable as long asit does not function as a restraint on the grantee's right of alienation. Apreemptive right restrains a grantee's right of alienation if the grantor has a rightto buy the property at a price below market value.

b. Descendability

Descendability is the right of the property owner's heirs to inherit whatever interestshe held in the property by intestacy upon the death of the owner. Except for propertyrights that are limited by the life of the possessor, such as a life estate, all propertyrights today are descendable and will pass to the heirs of the previous owner if shedies intestate.

c. Devisability

Devisability is the right of the possessor to dispose of his interest in land by will.Except for property rights that are limited by the life of the possessor, such as a lifeestate, all property rights today are devisable.

3. Rules of Construction

a. Remainders in "heirs" or "next of kin": The Rule in Shelley's Case and theDoctrine of Worthier Title

At common law, the Rule in Shelley's Case operated as a rule of law to transform aremainder in the "heirs" or "next of kin" of a life tenant into a remainder in the handsof the life tenant herself.

The Doctrine of Worthier Title accomplished much the same function as the Rule inShelley's Case when the grantor conveyed a limited estate inter vivos with aremainder in her own "heirs." The remainder in the grantor's heirs was treated as areversion in the grantor.

Under modern law, the vast majority of states have rejected the Rule in Shelley's Caseand the Doctrine of Worthier Title as rules of law. However, they remain as rules ofconstruction in many states.


b. Conditions of survival

1) General rule - survival not required

As a general principle, the holder of a future interest need not survive the holderof a prior possessory estate in order to take the interest.

2) Exceptions - when survival is required

• When the condition is expressed

• When survival to a given age is required

• When the grant is to "heirs" the individual's family members must survivethat person in order to qualify as heirs

4. Gifts "To A And His Children"

A gift "to A and his children" is ambiguous, in that it could create a concurrent estatebetween A and the children in existence at the time of the conveyance, or it could create apresent interest in the parent and a future interest in all of the parent's children. As a ruleof construction, if A did not have children at the time of the gift, the conveyance wouldcreate a life estate in A and a remainder in all of his children, whenever born. If A hadchildren living at the time of the conveyance, then, as a rule of construction, theconveyance would create a tenancy in common in A and any living children.

II. RIGHTS IN LAND

A. COVENANTS AT LAW AND IN EQUITY

A covenant is an enforceable contractual obligation between two parties. A covenantbecomes a covenant running with the land if it is enforceable not only between the actualparties to the covenant, but also by or against persons who were not parties to the originalagreement, but now hold the land to which the agreement pertains. A covenant can run withthe land either at law or as an equitable servitude.

1. Requirements For A Covenant To Run

a. A binding covenant

In order for a covenant to be enforceable by or against successors, it must first havebeen enforceable between the original parties.

b. A writing and signature

A covenant relating to land must be in writing. The only exception is common-scheme restrictions, discussed infra.

In general, a covenant must also be signed by the promisor. A covenant in a deedneed not be signed by the promisor, if the promisor is the grantee; it will be binding ifthe promisor accepts the deed.


c. Intent

The original parties must have intended that the rights and/or the duties of thecovenant run with the land.

d. Touch-and-concern requirement

A covenant must "touch and concern" the land in order to run; i.e., the promise mustaffect the promisee and promisor as owners of land, and not merely as individuals.If a covenant increases the value of the promisee's land or decreases the value (oruses) of the promisor's land, then most jurisdictions hold that it touches and concernsthe land affected. Covenants to pay money touch and concern the land when there isa direct relationship between the payment of the money and services to be rendered tothe land.

The covenant must touch and concern both the land of the promisor and the land ofthe promisee to be enforceable by and against the successors of both parties.

e. Special requirements for a covenant to run at law

1) Horizontal privity

In order for a covenant to run at law, the promisor and promisee must have beenin privity of estate at the time the covenant was imposed. This means that thepromisor must have granted the promisee's estate to the promisee (or viceversa) by the same instrument that imposed the covenant.

2) Vertical privity

The successor to property can only be held to the covenant if he hassucceeded to the original party's estate (that is, his title can be traced back tothe original party). If the successor to the property acquired his title by adversepossession or at a foreclosure sale, he is not in privity with the original party tothe covenant, and the covenant is not enforceable by or against him. Likewise,many jurisdictions hold that a successor who owns a lesser estate than thepromisor cannot have a covenant enforced against him, since the successor did notacquire the promisor's exact estate.

f. Special requirements for equitable servitudes

1) Privity

No horizontal privity is required for an equitable servitude to be enforceable.Neighboring but unrelated landowners can enter into a covenant that may beenforceable against the successors to the property as an equitable servitude.

Vertical privity is required only for the right to run. Therefore, the partyseeking enforcement of the covenant must be able to trace her estate back to theoriginal promisee.


2) Notice

A covenant is enforceable in equity against the subsequent possessor of theburdened estate any time that possessor had notice, actual or constructive, ofthe existence of the servitude. Only a bona fide purchaser can avoid an equitableservitude on a parcel of land.

3) Dominant estate

An equitable servitude can be enforced only if the person seeking enforcement isthe owner of a parcel benefited by the covenant.

2. The Common Scheme

If land is developed under a common scheme (e.g., a subdivision) and the commonscheme includes restrictions on some lots, the owners of those lots can force the samerestrictions on the owners of other lots which are part of the common scheme but werenot expressly so burdened.

a. Finding a common scheme

In order to find a common scheme, there must at least be similar restrictionsimposed by a common grantor upon a significant number of lots in a given area,such that a scheme of development can be inferred.

b. Effect of common scheme — negative reciprocal restrictions

Any owner burdened by the common-scheme restrictions can enforce thoserestrictions on any land that is part of the common scheme, regardless of who owns it.

3. Denial Of Relief In Equity

Equitable enforcement of a covenant running at law may be denied and an equitableservitude may be extinguished entirely in a number of situations. For example, theequitable doctrine of unclean hands will prevent any lot owner who is in violation ofrestrictions on his land from enforcing those restrictions against others. Also, equitableenforcement of a restriction may be denied if the neighborhood has changed such that thebenefit secured by the restriction is significantly reduced.

4. Comparison Of Land-Use-Control Devices

A lease is an effective means to control the use of the land, as the lessor has anunqualified right to control the use of the land via the lease. However, a lease is onlyappropriate where the person who seeks to control the use of the land is and wants toremain the owner of the land.

A covenant is often an effective means to control the use of land. However, a covenantis binding on successors to land only in the limited situations described in this chapter.

An easement is often a preferable device to a covenant, where it is appropriate.Easements are indefinite in duration and their enforcement is not subject to therequirements of contract law or equitable considerations. However, easements usually


cannot be used to limit the uses of land directly or to require the burdened party toperform an affirmative act.

A zoning ordinance is rarely an effective form of land-use control. In the first place, it isdifficult to obtain and usually cannot be obtained in reference to a single parcel of land.Moreover, its enforcement is uncertain, since it can be enforced only by public authoritiesand is subject to administrative variances and legislative changes.

A qualified estate is also of limited effectiveness. It is only an option if the person whodesires to control the land owns it. Its enforceability is certain, but the severity of thepenalty of forfeiture usually destroys the marketability (and mortgageability) of theproperty.

5. Table Showing Requirements For Running Of Covenants

Duty to Runat Law

Right toRun at

Law

Duty to Runin Equity

Right to Run inEquity

Writing Yes Yes Yes, except incommon-scheme cases

Yes

Intent Yes Yes Yes Yes

Touch andConcern

Yes Yes Yes Yes

DominantEstate

No Yes

Notice No, exceptwhere requiredby recordingstatutes

Yes

HorizontalPrivity

Yes Yes,probably

No No

VerticalPrivity

Yes Yes,probably

No Yes

B. EASEMENTS, PROFITS, AND LICENSES

Easements, profits, and licenses are all types of nonpossessory property rights, meaningthat the holders of such rights have the right to use or control the use of land which they donot own or possess.


1. Easements

The land that is subject to or burdened by the easement is called the servient estate. Ifthere is a parcel of land benefited by the easement, it is called the dominant estate.

a. Classification of easements

1) Appurtenant easements v. easements in gross

If the owner of the easement holds it only by virtue of her status as the owneror possessor of land that is benefited by the easement, then the easement isappurtenant. An appurtenant easement is automatically transferred with theland benefited, and cannot be transferred separately from the transfer of thedominant estate.

An easement in gross is one that benefits no particular parcel of land. Thebenefits of the easement are held personally by the owner.

2) Affirmative v. negative

If one has an affirmative easement, one has the right to physically enter uponand use the land upon which the easement exists. Occurring less frequently is thenegative easement, which gives the owner of the easement the right to preventthe owner of the servient estate from using the land in a particular manner.

b. Creation of easements

1) By express grant

(a) Writing required

(b) Must be recorded to bind successors

2) By express reservation

An easement by express reservation is created when the grantor, in the deed,reserves to himself easement rights in the granted premises.

3) By implication

In order to have an easement by implication, (1) the dominant and servient estatesmust have been held in common ownership at the time the easement was allegedlycreated, (2) the servient estate must have been used in an apparent and continuousway such that a quasi easement could be said to exist, and (3) the continued use ofthe quasi easement must be reasonably necessary to the enjoyment of thedominant estate.

It is possible to defeat an easement by implication by showing that the parties didnot intend to create an easement.

4) By necessity

An easement by necessity is the same as an easement by implication except thatthere is no requirement that a quasi easement exist on the land prior to the time ofthe division of the land, but the easement sought must be "strictly" (not just


reasonably) necessary to the enjoyment of the dominant parcel. An easement isstrictly necessary if the land is practically incapable of use without the easement.

An easement by necessity is unique in that it is not presumed to be infinite; aneasement by necessity lasts only as long as the necessity which gave rise to it.

5) Easement by prescription

An easement by prescription is based upon the same legal principles as title byadverse possession. The elements required for an easement by prescriptionfollow.

(a) Actual use

Use of the servient estate must be made. The use need not oust the ownerfrom possession.

(b) Open and notorious

The use must be such that the owner is put on notice that she has a cause ofaction. The statutory period runs from the time that the owner hasconstructive notice or actual knowledge of the use.

(c) Continuous

The prescriptive use must not be interrupted or even temporarily abandonedduring the statutory period. A use is continuous if it is only seasonal,provided that the customary use of the easement would occur only seasonally.Successive owners of the dominant estate are able to "tack" their periods ofsuccessive use in computing the statutory period. Continuous use isinterrupted and the period must start anew if the owner physically bars theowner of the dominant estate from using the easement, or if the owner initiatescourt action to prevent the use of his property.

(d) Adverse

All that is required for the use to be adverse is that it be without thepermission of the owner. A use that starts permissively can become hostilewhen the user communicates the hostile nature of her use to the owner orwhen the permission is revoked. If the owner grants permission to continuewhat once was a hostile use, then the prescriptive period ends.

(e) Status of the easement at the end of the period

Once the requirements to obtain an easement by prescription are met, theeasement has the permanence of any other kind of easement. There is nolonger a requirement of continuous use.

c. Scope of easements

1) Rights of easement holder

In the case of an easement by grant or reservation, the easement rights aredetermined by the language of that grant. If the easement by grant or reservation


fails to determine the location and scope of the easement, or the easement is aneasement by necessity, the owner of the servient estate has the right to reasonablyfix the location of and control the use of the easement. In the case of easementsby implication or prescription, the location and scope of the easement will bedetermined by the prior (quasi easement or prescriptive) use of the servient estate.

(a) Changed circumstances

Courts will generally permit reasonable change in the use of an easementwhen circumstances have changed since the creation of the easement. If theoriginal use becomes more intense because the dominant estate is more fullydeveloped, there will not be an overburdening of the easement unless theintensity of the use is beyond the reasonable contemplation of the parties.

(b) Use for other than dominant estate

If the holder of the easement attempts to use the easement for the benefit ofland other than the dominant estate, he has automatically overburdened itand that use can be enjoined.

2) Repairs

The easement holder has the obligation to keep the easement in repair, andhas the right to enter onto the servient estate to meet that obligation.

3) Right of holder of servient estate

The holder of a servient estate may make any use of her land that is notinconsistent with the rights of the easement holder. If the easement is one ofpassage, she may use the road herself and permit others to do so.

If the location and scope of the easement have not been defined by a grant or prioruse, she may reasonably control the location and scope of an easement.

d. Termination of easements

1) By the terms of the grant

An easement is of infinite duration unless limited by conditions in the grant.

2) A written release

The holder of an easement, whether in gross or appurtenant, can terminate it bydelivering a written release to the owner of the servient estate.

3) By non-use and intent to abandon

Mere non-use of the easement, even for an extended period, does not result in itsdestruction. Before the easement will be terminated, there must be an affirmativeact that is a manifestation of intent to abandon.


4) Estoppel

If either an oral release or extended non-use is coupled with reliance on thetermination by the owner of the servient estate, then the easement will beterminated.

5) By merger

If the servient and dominant estates come into identical ownership, then theeasement is extinguished. If the servient estate is later separately reconveyed,the easement does not automatically come back into existence.

6) By prescription

If the owner of the servient estate bars the easement holder from using theeasement for the statutory period, the easement will be extinguished.

7) Destruction of the servient estate

If the easement right is one of passage through a building, the easement isterminated if the building is involuntarily destroyed by fire or other cause.

8) Conveyance of servient estate to bona fide purchaser

If a granted easement is not recorded and a purchaser takes the servient estatewithout knowledge of the easement, then the easement is unenforceable againstthe purchaser. Easements by prescription, implication, and necessity, however,bind a bona fide purchaser, even though not recorded.

9) End of the necessity

An easement by necessity ends at the time the necessity ends.

10) Death

In a jurisdiction that does not permit the alienation of easements in gross, they areterminated by the death of the holder, or sometimes by an improper attempt toalienate the easement.

2. Profits A Prendre

Profits a prendre are a specialized form of easement. They consist of an easement rightto go on the land of another coupled with an additional right to sever, remove, andown something from the land, such as gravel, trees, or water.

Profits differ from easements in the following ways.

a. Creation

Profits can be created by express grant, by reservation, by implication (if there was aquasi profit in existence at the time of the division of the common estate), and byprescription. A profit cannot be created by necessity.

b. Gross profits vs. appurtenant profits

A profit in gross is freely assignable, unlike most easements in gross.


c. Exclusive vs. nonexclusive profits

If the profit is "exclusive," then the holder of the profit has an unlimited andexclusive right to take the subject matter of the profit from the land. Even the owneris not permitted to do so. If it is "nonexclusive," then either the owner or others mayalso take the profit, or the profit holder's right to take the profit is limited by quantity,by a time period, or by a use which may be made of the profit taken.

3. Licenses

A license is a right given by the owner that permits a person to go onto and use theowner's land. A license differs from an easement in that it is usually revocable at will,whether given gratuitously or in fulfillment of a contractual obligation. It is also valid iforal, because the Statute of Frauds does not apply.

A license is irrevocable in two instances. If the licensor permits the licensee to maintainpersonal property on his land, the licensee has an irrevocable right to enter onto thelicensor's land for access to the property. If the licensee justifiably relies on a grant of along-term license and spends substantial sums of money because of that reliance, then thelicensor will be estopped from revoking the license.

C. OTHER INTERESTS IN LAND

1. Fixtures

a. Definition

A fixture is an item of personal property that becomes part of the real estate becauseof its annexation to the real estate. Once an item becomes classified as a fixture,ownership of the item passes to the owner of the real estate.

b. Rules for determining when personal property becomes a fixture

The intention of the parties at the time the property was attached controls whether ornot that personal property becomes a fixture. However, if there are no clearindications of the parties' intent, the following factors will be important indetermining their intent.

1) The character of the attachment

Any personalty that is attached to realty in such a way that its removal wouldcause substantial damage to the realty becomes a fixture.

2) The character of the personalty

If the personalty was specially designed for the realty (e.g., doors or windows ofunusual size) then it follows that it was to become part of the realty and is treatedas a fixture. Also, if the personalty is necessary to the use of the realty, it is likelyto be considered a fixture.

On the other hand, trade fixtures, or personalty of a tenant attached as anecessary part of her business on the premises, are presumed not to be a fixture.


3) The relationship between the competing parties

Disputes over fixtures occur between the following groups: (1) vendor andpurchaser, (2) mortgagor and mortgagee, (3) landlord and tenant or owner andlicensee, and (4) life tenant and remainderman. In the first two cases, the personwho annexed the personal property to the realty was the fee owner of the realty atthe time it was annexed. Therefore, it is probable that any property attached bya vendor or mortgagor was intended to be part of the real estate and istherefore to be treated as a fixture. Conversely, any property attached by atenant or licensee is presumed to remain personal property.

c. Removal of personalty not considered a fixture

If the property is not a fixture, then it must be removed promptly at the end of theannexor's estate, or it will become part of the realty. Where there is a life estate,periodic tenancy, or tenancy at will, there is a reasonable time after the end of thetenancy when fixtures can be removed.

Removal is only permitted when it can be accomplished without seriouslydamaging the real estate. Any damage caused by the removal must be repaired bythe owner of the removed personalty.

d. Third-party interest in fixtures

Since most mortgages are written to include later-added fixtures, the holder of asecurity interest in a chattel which is later annexed to real estate, and a mortgageewho has a security interest in the real estate, will likely have competing securityinterests in the fixture.

1) No security interest unless property is easily removable

If the personal property is not removable without substantial damage to the realty,the holder of the chattel has no security interest in the property once it has beenattached.

2) Security interest must be recorded before mortgage■

Generally, a security interest in a chattel prevails over a mortgage only if thesecurity interest in the chattel is recorded prior to the real-estate mortgage.However, a purchase-money security interest in chattels will prevail over even aprior mortgage, provided that the purchase-money security interest is promptlyperfected by recording.

2. Scope And Extent Of Real Property

a. Rights in airspace

The possessor has a right to possession of the airspace above his land. Most often,such intrusions are made by aircraft.


b. Right to support

A possessor of land has the right to both lateral and subjacent support for her land.The right of lateral support means, generally, that neighbors cannot use their land insuch a manner that the surface of the possessor's land subsides. The right ofsubjacent support means that if someone else owns areas below the surface of thepossessor's land (e.g., mines), they have an obligation to keep the surface of thepossessor's land from subsiding. There is no liability for loss of support if theneighbor properly removes water from underneath the possessor's land.

1) Absolute liability

A possessor has an absolute right to lateral support of land in its naturalcondition. The possessor has an absolute right to subjacent support of land inthe condition it was in at the time of the conveyance of the right to subjacentareas. These absolute duties of support cannot be avoided by delegation of thejob of excavation to an independent contractor.

2) Negligence

A possessor always has a cause of action in negligence for subsidence of her land.The possessor may recover, if her neighbor was negligent, even if the land wouldnot have subsided in its natural state.

However, a landowner is not ordinarily liable for the negligence of herindependent contractor (unless the independent contractor was engaged in anultrahazardous activity, such as blasting). The owner can be held liable for herown negligence in choosing an incompetent independent contractor, however, ifthat is the case.

c. Rights in party walls

Rights to support also exist in party walls (i.e., a wall which is part of two separatebuildings and is built along a common boundary line). Each abutting owner ownsthat part of the wall on his side of the common boundary, and has an easement to usethe entire wall for the support of the remaining part of his building.

Each party can extend the height or length of a wall. This must be done at his ownexpense, and no contribution is allowed unless the other party undertakes to use theextended wall.

d. Rights in the subsurface

The possessor of land has the exclusive right to the area underneath the surface of herland, and can prevent the mining of minerals even though she cannot reach them fromthe surface. By the same token, the possessor has the right to sell, lease, or grant aneasement in subsurface areas. She does not, however, have the exclusive right tounderground liquids and gases if they flow from her land to the land of another.


e. Rights in common resources of light, air, streams, and bodies of water

1) Rights in light and air

To be valid, rights to light and air must be specifically granted in deeds or otherconveyances.

A negative easement for light and air cannot be created by implication, because itis not apparent (and also because it would create uncertainty in titles and hamperdevelopment).

Likewise, an easement for light and air cannot be obtained by prescription merelybecause one landowner enjoyed, without permission, light or air that came acrossthe property of his neighbor for the statutory period.

2) Water rights classification of bodies of water and rights therein

(a) Watercourses

Any water that follows a well-defined course or channel, whetheraboveground or belowground, is a watercourse. A watercourse need not havewater in it year-round.

If a watercourse is navigable, the riparian owner's rights are subservient to thepublic rights in the watercourse. If the waterway is nonnavigable, theriparian owner owns the land under the stream (and has full usufructuaryrights in the water).

The riparian owner's usufructuary rights vary depending on the theoryadopted in the jurisdiction. At common law, the riparian owner had the rightto use as much water as she needed for domestic purposes (e.g., irrigation of afamily garden on riparian land, bathing, etc.) and could use water fornondomestic (i.e., commercial purposes) only insofar as the quality andquantity of the water she returned to the stream were not affected. Thisstandard was called the "natural flow doctrine," meaning that a lower, riparianlandowner had a right to receive water in its natural state, unaffected by anynondomestic uses. Many western states have adopted an appropriationsystem. Under such a system, the priority of all users is determined by thetime they began their use, with the prior user always having a superior right tocontinue her use. Thus, if the water supply becomes inadequate, later userswill have to discontinue their use so that the uses of prior users are protected.

(b) Aboveground ponds and lakes

If a landowner owns all the land around a lake or pond, he usually has aproprietary right in the water, meaning that he owns the water itself and cansell it as he pleases.

If the land around a lake is held by several persons, the rights of such littorallandowners are only usufructuary, and are generally identical to theusufructuary rights of riparian landowners. The usufructuary rights of littorallandowners may also be subject to the public rights in a lake that is used for


recreational or commercial purposes. Some of the western states that haveestablished appropriation systems have also applied it to lakes and ponds.Thus, even a littoral landowner must acquire a permit to protect hisusufructuary rights.

(c) Underground ponds and lakes

Again, if a landowner owns all the land above an underground pool or lake,she has a proprietary right in the water.

If a landowner owns only part of the land above a lake, her rights will dependon the theory applicable in the jurisdiction. At common law, a rule ofcapture applied — in effect, each landowner above a lake had an unqualified,absolute (but not exclusive) right to appropriate the water below. Basically, alandowner was free to use or sell whatever water she could pump out. Mostjurisdictions have now gravitated to a reasonable-use standard, wherebylandowners have a right to use underground water to a reasonable extent fordomestic, riparian uses. Under such a standard, a landowner will have a rightto use underground water for nonriparian uses only if no other riparian usesare effected. Some jurisdictions have adopted a correlative-rights standardwhich gives a landowner a proprietary right to the proportion of water in anunderground lake which corresponds to her proportion of the land over thelake.

(d) Surface water

Surface water consists of bodies of water, which do not follow any regularcourse or have any identifiable, regular boundaries. The most common formsof surface water are runoff from rain or snow, and temporary tidal pools andmarshlands.

The owner of land on which surface water is found has a proprietary right init.

However, the more common issue is whether a landowner can freely ridhimself of such waters. In most jurisdictions today, a reasonable usestandard applies (though it may take a variety of forms or names); alandowner is permitted to repel or remove surface water as long as it does notunduly damage the land of a neighbor.

f. Nuisance

A possessor of land has the right to quiet enjoyment of the land. In some situations,an action in nuisance will lie to prevent (or compensate for) violations of this right.Generally, actions of nuisance will only lie for nonphysical invasions (noise, odors,etc.). Physical violations (water, trespassers) are more properly the province oftrespass actions, as discussed immediately above.


1) Interference with use and enjoyment

The action for nuisance protects the plaintiff from interference with the use andenjoyment of her property. Traditionally, it involves such interferences as noise,excessive light, odors, fumes, smoke, etc. The plaintiff may sustain the nuisanceaction by showing that the defendant substantially interfered with the plaintiff'suse and enjoyment of her property, and that such interference was unreasonable,even if the defendant's conduct was not negligent or intentional.

2) Reasonableness of conduct

Whether defendant's conduct is reasonable or unreasonable involves the balancingof three considerations: (1) the locality and character of the surrounding area; (2)the nature, extent, and frequency of the interference; and (3) the utility and socialvalue of the activity involved.

3) Relief

The court in a nuisance action may grant damages and/or injunctive relief Whereplaintiff's harm is insignificant when contrasted with the potential harm todefendant if injunctive relief is granted, the court may treat the nuisance aspermanent, and award plaintiff damages for the diminution in the value of hisproperty.

4) Public nuisance

Recovery for personal injury resulting from a nuisance may be had whether thenuisance is private or public. If the nuisance is public, plaintiff's injury must beof a different kind than that of the general public.

D. TAKINGS AND ASPECTS OF ZONING

I. Takings

Both the federal government and state governments and instrumentalities of both have thepower to take private property by eminent domain. However, the Fifth Amendment tothe Constitution prohibits the United States from taking private property for public usewithout just compensation. That amendment is applicable to the states through theFourteenth Amendment.

a. Requirement of a public purpose

A purported taking is invalid if it is not for a public purpose. However, the court hasconstrued a public purpose broadly, as coterminous with the scope of the sovereign'spolice power.

If the taking is held invalid because it did not serve a public purpose, the landowner isentitled to damages for the temporary taking for the period when she was unable touse her property because of the invalid taking.


b. What constitutes a taking

Not all actions by the government that regulate the use of land and in many instancessubstantially diminish its value are takings for which the government must paycompensation. Zoning ordinances, environmental protections laws, and landmarkpreservation are usually found to be valid regulations under the police power insteadof compensible takings. There are a number of situations, however, where theregulations constitute a taking.

Any physical intrusion on private property by the government or the establishment ofa non-possessory property interest, such as an easement, constitutes a taking.

A land-use regulation, even if enacted for valid police-power purposes, will constitutea taking if it deprives the owner of all economically viable use of the land. The onlybasis upon which the state could justify a regulation depriving the land of alleconomic value under the police power is to prove that the building on the land wouldconstitute a common-law nuisance.

To be a valid regulation instead of a taking, the regulation must also substantiallyadvance the governmental objective being pursued and there must be a tight fitbetween the regulation and the governmental interest.

2. Zoning

Zoning is the governmental control of the land-use by governmental action. Localgovernment (that of a county, city, or town) enacts the ordinance that actually controls theuse of land. The local ordinance is authorized when the state acting pursuant to the policepower enacts a zoning-enabling act. There are two levels on which the validity of azoning act can be attacked: a constitutional level, and that it violates the enabling act.

a. Constitutional attack on zoning ordinance

1) The police-power justification

Over the years, the court has sanctioned the use of zoning control the density ofdwelling units to prevent overcrowding, to achieve aestheticism by imposingcontrols on the style of buildings to prevent the intrusion of buildings that mightdepress neighboring property values, to preserve the integrity of historical districtsby prohibiting building which is out of character in such districts, etc. As courtsbecame less intrusive on legislative judgments on economic matters, all of thesetypes of zoning controls have been authorized under the police power.

2) Takings

A zoning ordinance can constitute a taking, however, when it deprives thelandowner of all economic use of her land, or when it imposes conditions uponthe use of land which are disproportionate to the benefits which are conferred bythe government. The ordinance is not unconstitutional because it constitutes ataking; however, the government must pay just compensation for the value of landwhich the ordinance has taken away from the landowner.


3) Due process

Since the adoption of a zoning ordinance is a legislative act, owners of landaffected are not entitled to notice and hearing. If there is an amendment to theordinance that will only affect a few specific parcels of land, however, thegovernmental activity is more administrative in nature, and affected owners willbe entitled to procedural due process.

A zoning ordinance can violate substantive due process by infringing upon theassociational rights of families.

4) Equal protection

Zoning ordinances are fundamentally economic regulations, which neitherinfringe fundamental rights, nor discriminate by suspect classifications, and thusthe ordinance must only bear a rational relationship to a permissible stateobjective to be upheld.

If a zoning ordinance operates with respect to a suspect classification the strict-scrutiny standard will apply only if the plaintiffs can show that the purpose of theordinance was to discriminate, not that it has a discriminatory effect.

5) First Amendment issues

A zoning ordinance could be unconstitutional if it improperly limited the right offree speech.

b. The zoning-enabling act

The zoning-enabling act in force in a state sets forth the procedure which amunicipality must follow in enacting or amending a local zoning ordinance andcontains such substantive limitations on the power of a municipality as the statedetermines appropriate. Unless the state enabling act runs afoul of one of theconstitutional limitations described above, it is valid. Actions of a municipality thatviolate the act's procedural requirements or substantive limitations are invalid.Because enabling acts vary widely, a question is impossible in this area withoutspecific reference to the text of the enabling act. The proper approach is to test theactions taken under the zoning ordinance against the specific provisions of theenabling act.

c. Administration of zoning

1) Passing and amending the zoning ordinance

The first step in subjecting property to zoning controls is the passage of the localzoning ordinance. The procedure for passage must be in accordance with the stateenabling act. The local ordinance usually divides the municipality into zoningdistricts, prescribes the uses which are allowed as of right (conditionally allowedand prohibited in each district), and sets forth density regulations, and setback andheight requirements for each district. It then sets up an administration andenforcement structure that must be in accordance with the enabling act.


2) Protection of nonconforming uses

Property that is in existence at the time a zoning ordinance is enacted or amendedand which violates the ordinance either in use, density, or dimensionalrequirements is protected as a nonconforming use. Such uses can usually bemodified with permission of the zoning administrative body, usually a zoningboard of appeals. Some ordinances provide that non-conforming uses must beamortized and can only continue for a specific period. A majority of courtsuphold such limitations as long as they are reasonable in length and the propertycan be economically used after the nonconforming use is phased out.

3) Conditional uses

Many zoning ordinances today permit specific uses only if certain conditions aremet. Many times these conditions are general, such as a requirement that the usebe "compatible" with the neighborhood. Normally, compliance with suchconditions is determined by a zoning board of appeals after a public hearing inwhich both proponents and neighbors have an opportunity to be heard. Manycommercial permits are granted only after some local body reviews the site planof the development.

4) Variances

There are circumstances dealing with unique conditions on a particular lot of landwhere compliance with the provisions of the zoning ordinance would create asubstantial hardship on the landowner. Variances permitting the property to beused for a purpose prohibited by the zoning ordinance are rarely granted whereasdimensional variances are commonly approved.

5) Floating zones and planned unit developments

As the zoning process has matured over the past seventy years, ordinances havepermitted developers and administrators more flexibility in planning specific uses.Planned unit developments permit developers of large parcels to plan mixed usesof varying densities on the property and gain approval of the entire plan by someplanning authority in the municipality. Floating zones set forth the requirementsfor a particular kind of use and permit developers to petition the proper authoritiesto place specific land in those zones.

III. REAL PROPERTY CONTRACTS

A. RELATIONSHIPS INCLUDED

The contract for the sale of land is used in two distinct situations. The most commonsituation is the one in which its function is to bind the parties. Within a short period of time,usually less than 90 days, the contract is performed by the seller conveying title to the buyerin exchange for the agreed-upon consideration. The buyer does not ordinarily takepossession until the contract is fully performed.


The second situation occurs when the contract is used as a financing device. The buyer takespossession at the time the contract is executed, makes periodic payments on the purchaseprice, and receives a conveyance only when all of the consideration has been paid.

B. CREATION AND CONSTRUCTION: THE STATUTE OF FRAUDS

The Statute of Frauds requires that any conveyance of an interest in land or promise toconvey an interest in land be in writing and signed to be enforceable in a court.

1. Interests In Land Within The Statute Of Frauds

Interests in land include: (1) leaseholds, except those of short duration which areexpressly excepted by statute; (2) interests of mortgagor and mortgagee or vendor andpurchaser under a specifically enforceable contract; (3) present and future interests, bothlegal and equitable; (4) easements and profits; (5) interests created by covenants; and (6)option contracts. Contracts by joint tenants or tenants in common to partition land intoseparate tracts for each tenant are generally also held to be within the Statute of Frauds.

2. Contracts Associated With Land Not Within The Statute Of Frauds

Agreements which create a license as opposed to an easement or covenant, boundaryagreements and brokers contracts, and a promise not to make a will so that an heir willinherit the real estate, although connected with land are not within the Statute of Frauds.

C. THE PURCHASE -AND-SALE AGREEMENT

1. The Enforceability Of A Purchase-And-Sale Agreement

In order to be enforceable, an agreement to convey land must meet the followingrequirements: the agreement must be a valid contract, and the agreement must satisfy theStatute of Frauds (or the Part Performance Doctrine).

In general, it can be said that an agreement to convey land is enforceable only if it isevidenced in a writing or writings that will satisfy the Statute of Frauds. However, acourt will order a conveyance of land, without any evidentiary writing at all, if therequirements of the doctrine of part performance (discussed, infra) are met.

a. Required contents of the writing(s)

Any writing or collection of writings that evidences the agreement will suffice, evenif they were not intended to embody the contract. For the contract to be enforceable,the parties and the land must be identified, there must be language indicating a salewas intended, and the purchase price must be included if it has been agreed upon.The document must then be signed by the party to be charged.

b. The part-performance doctrine

If a court finds sufficient evidence in the parties' actions of an agreement to conveyproperty, it will order a conveyance of the land, despite the lack of a writing.Generally, part performance is not grounds for an action at law for damages; specificperformance is the only remedy available.


In general, jurisdictions require the purchaser to perform varying combinations of thefollowing acts: (1) payment of the purchase price, (2) possession of the land with thepermission of the seller, and (3) improvements to the land. A majority ofjurisdictions require all three. Payment of the purchase price alone is not sufficient.

2. Implied Conditions Or Terms

a. Time of performance ("closing")

When a purchase-and-sale agreement fixes no date for performance, a court willpresume that the parties intended it to be performed within a reasonable time.

If a specific date is fixed, strict compliance with that date is required only in anaction at law (for damages). Strict adherence to the date for performance is notrequired in equity, unless the contract specifies that time is of the essence, or that factcan be implied from the circumstances of the contract. Thus, failure to perform onthe specified date is usually not grounds for an action for rescission or specificperformance.

b. Title required

If the purchase-and-sale agreement is silent on the matter, the seller is required todeliver marketable title at the closing to all of the property specified in the purchase-and-sale agreement. The requirements of marketable title are discussed below. Theagreement can provide for a lesser quality of title.

c. Burdens related to title defects

1) Seller's right to notice of defects

When the purchaser finds a defect in the title, he must notify the vendor, who willthen have a reasonable time to clear the defect. A purchaser cannot assert a defectthat was not brought to the vendor's attention as a justification for the purchaser'sfailure to perform.

2) Seller's burden to clear liens

If there is a defect in marketable title created by a lien on the property, the sellerhas the obligation to clear that lien at the time of the closing. The most commonlien is a mortgage lien that can be cured by use of a portion of the proceeds at theclosing. If the defect is uncurable by the payment of a specified amount of moneybecause another person has some title claim, then the obligations of the parties isgoverned by the agreement.

3) Seller's right to notice of defects

When the purchaser finds a defect in the title, she must notify the vendor, whowill then have a reasonable time to clear the defect. A purchaser cannot assert adefect that was not brought to the vendor's attention as a justification for thepurchaser's failure to perform.


4) Variance between area owned by seller and area specified in agreement

Minor variances between the land promised in the contract to convey and the landconveyable by the seller will not put the seller in breach of contract, unless therewas fraud involved. A variance between the area agreed to and actuallyconveyable also will not usually result in an adjustment of the purchase price,unless the price was established on a per-acre basis.

5) Buyer's options when defect incurable

The buyer has a right to terminate the agreement and recover his deposit. Someagreements give the seller a period of time to cure a title defect and keep theagreement in force during that time. Some agreements will require the seller touse good-faith efforts to cure a title defect. In any event, the buyer can waive therequirement of marketable title and take any title that the seller possesses.Ordinarily, if the buyer elects to take the seller's unmarketable title, he must paythe full purchase price.

D. PERFORMANCE

1. Fitness And Suitability Of The Premises

Since the Uniform Commercial Code does not apply to sales of realty, there are generallyno implied warranties, except for the covenants of title discussed below incident to adeed. The purchaser must rely on express warranties of material fact made by the seller.The one exception is that a warranty of habitability is implied in every deed from avendor who is also the builder of the improvements on the land.

Except for the implied warranty on a new home, obligations of the seller concerning thephysical status of the premises conveyed depends upon the language set forth in thepurchase-and-sale agreement. If nothing is said about condition and there is nomisrepresentation about the condition of the premises, the obligation of the seller is onlyto convey the premises in their existing condition.

Most purchase-and-sale agreements provide that the buyer has a period of time to inspectthe condition of the premises and terminate the agreement if it has environmental defectsor has physical defects, and terminate the agreement if the defects are not cured. If thebuyer does not terminate within the specified period, she is cannot use the defects as areason to back out of the agreement.

2. Marketable Title Required

Unless the contract provides otherwise, the seller must provide "marketable" title at theclosing, even if he is only obligated to give a quitclaim deed. If the seller cannot producemarketable title, he is in breach of the contract to convey; the purchaser need not gothrough with the conveyance and may sue for damages.

A marketable title is one reasonably free from doubt both in fact and in law. It is thetype of title that a reasonable, prudent, and knowledgeable businessperson desiring topurchase the property would accept. If there is a factual problem with the title, the factssupporting its marketability must (1) be so conclusive that a judge would not permit a


contrary verdict to stand, and (2) be capable of proof whenever challenged. If thechallenge is one of law, the law in favor of good title must be clear and not debatable.

An adverse possessor must obtain a judicial decree supporting his title before he hasmarketable title. Defects that render title unmarketable are as follows:

a. Gaps or defects in the chain of title

b. Inadequate estate

c. Encumbrances

The purchase-and-sale agreement can specifically provide that the conveyance is to bemade subject to certain enumerated encumbrances. Absent an agreement to thecontrary, encumbrances have the following effects.

Mortgages and liens destroy marketable title.

Dower rights destroy marketable title.

Restrictions and equitable servitudes destroy marketable title only if they are moreburdensome than the zoning ordinances applicable to the land.

Leasehold interests destroy marketable title.

Easements destroy marketable title only if they actually or potentially interfere withthe reasonable use of the land.

Zoning ordinances do not destroy marketable title. However, if the zoning ischanged between the time of the purchase-and-sale agreement and the time of theclosing, some courts would permit the purchaser to rescind the agreement. Also, anexisting violation of a zoning ordinance likely renders title unmarketable.

3. Risk Of Loss

The parties are always free to determine in their agreement who will bear the risk of loss.However, if they fail to do so, most jurisdictions hold that the doctrine of equitableconversion governs the risk of loss. The minority view is that risk of loss is on the vendoruntil legal title passes. The Uniform Vendor and Purchaser Act puts the risk of loss onthe party in possession.

Where the risk of loss is on the purchaser, but only the seller is insured for the loss, theneither the seller must deduct the insurance proceeds from the sale price or he must paythose proceeds to the purchaser.

4. Remedies For Breach Of Purchase-And-Sale Agreement

a. Damages

Either party is entitled to expectancy damages (the difference between the marketvalue of the property at the time of the closing and the purchase price) if the otherparty breaches. If the seller breaches, the purchaser is also entitled to the return ofany deposit she has paid.


b. Specific performance

Either side can also elect to obtain specific performance, meaning that the court willforce the breaching party to pay the purchase price or convey the property, whicheveris appropriate. A court may also award incidental damages as part of a judgment forspecific performance.

c. Rescission

E. INTEREST BEFORE CONVEYANCE

1. The Effect Of An Enforceable Purchase And Sale Agreement — The Doctrine OfEquitable Conversion

The doctrine of equitable conversion provides that a purchaser who has a valid andbinding agreement to convey should be treated as the owner of the property. The doctrinedoes not apply to options to purchase, unenforceable (e.g., oral) agreements to convey, oragreements to convey in which a condition precedent to enforceability (e.g., attainment ofa mortgage) has not been met.

a. Right of possession and enjoyment

Equitable conversion does not give the purchaser a right to possession prior to thetime of performance. If the contract gives the right to possession to the purchaserbefore the closing, he has the full use of the property and may commit waste on it aslong as the value of the property does not fall below the balance due on the purchaseprice.

b. Risk of loss

The parties are always free to determine in their agreement who will bear the risk ofloss. However, if they fail to do so, most jurisdictions hold that once there is abinding purchase-and-sale agreement, the purchaser bears the risk of loss if theproperty is destroyed, even if she does not have possession.

c. Third-party damage

The purchaser can bring a tort action against third parties for any damage to theproperty committed after the execution of the contract to convey.

2. Earnest Money Deposits

A purchase and sale agreement typically requires that the buyer deposit a portion of thepurchase price in escrow, and usually provides that the deposit will be liquidated damagesif the buyer defaults. Courts will permit the seller to keep the deposit in the event of abuyer default, providing it bears a reasonable relationship to the seller's actual damages.

3. The Closing

a. Seller must sign deed

The purchaser is entitled to a deed from and actually signed by the seller if the deed isto contain any warranties of title.


b. Purchaser's obligation to produce purchase money

The purchaser is expected to produce the full purchase price at the time of the closing,unless other arrangements are made.

F. RELATIONSHIPS AFTER CONVEYANCE

1. Effect Of Closing On Purchase-And-Sale Agreement

In general, a conveyance discharges the obligations arising from the contract toconvey, except those obligations expressly made to survive the closing. After accepting adeed, the purchaser may sue only on the covenants (e.g., the warranties of title) containedin the deed.

2. Title Problems

Once the deed is delivered and accepted, the grantee can only sue for defects in the titlebased on the covenants of title in the deed. Any promises made by the grantor in thepurchase-and-sale agreement are superseded and extinguished by the deed, unless thoseprovisions of the purchase-and-sale agreement are made to survive the deed.

IV. REAL PROPERTY MORTGAGES

A. TYPES OF SECURITY DEVICE

1. Mortgages (Including Deeds Of Trust)

a. Mortgage

A mortgage is a conveyance of an interest in land for the purpose of securing someobligation that the owner of the land ("the mortgagor") owes to a creditor (the"mortgagee").

b. Deeds of trust

A trust deed is a conveyance from the owner of property to a third person in trust.The trustee is to hold the property as security for a debt owed by the owner to alender. The trust instrument will require the trustee to deed the property to the debtorwhen the obligation is satisfied, or to the creditor in the event of default. Theprincipal difference between the deed of trust and a mortgage is in the method ofenforcement; the trustee may be able to sell the property without all of the safeguardsrequired for a foreclosure sale.

2. Land Contracts As A Security Device

A purchaser who buys property under an installment contract is in much the sameposition as a mortgagor. The purchaser will take immediate possession of the property,but will not be the legal owner of the property until she pays the seller the full purchaseprice in installments and receives a deed.

There are two principal problems with this device from the buyer's viewpoint.

First, the seller may be unable to deliver clear title when the payments have beencompleted.


Second, if the purchaser under an installment contract breaches by making a late paymentor by failing to make a payment at all, she may lose the right to enforce the contract andobtain a deed and also forfeit the payments she has already made.

3. Absolute Deeds As Security, Equitable Mortgages

Where a deed, absolute on its face, was delivered solely as security for a debt, the deed istreated as an equitable mortgage.

a. Procedure to establish an equitable mortgage

To establish that a deed is in fact an equitable mortgage, the grantor (mortgagor) mayintroduce parol evidence in an equity proceeding to show that the deed was intendedonly to serve as a mortgage and that he is entitled to a reconveyance when the debt ispaid.

b. Rights of bona fide purchasers from the equitable mortgagee

If the deed that is in fact an equitable mortgage has been recorded in the registry ofdeeds, however, a bona fide purchaser from the grantee (mortgagee) can cut off therights of the grantor (mortgagor).

4. Sale Leaseback Arrangements

A sale of property accompanied by a lease back to the seller may function as a financingdevice. In effect, the purchase money given to the seller of the land is a loan, thepurchaser merely holds title as security for the repayment of the money loaned, and theseller-lessee's rent payments are mortgage payments. At the end of the lease, the seller-lessee can usually repurchase the property and recover legal title for the amount of theloan still outstanding.

B. SOME SECURITY RELATIONSHIPS

1. The Underlying Obligation

A mortgage must serve as security for an underlying obligation. The obligation isoften a debt owed by the mortgagor to the mortgagee. However, a landowner can grant amortgage to secure any sort of obligation — including a duty to perform services.

A mortgage is enforceable only as long as there is an underlying, enforceableobligation. If the underlying debt is unenforceable (e.g., for lack of consideration, fraud,duress, etc.) the mortgage is likewise unenforceable and the mortgagor has a right to havethe mortgage discharged. There are, however, two exceptions — if the debt becomesunenforceable due to a discharge in bankruptcy or due to the running of the statute oflimitations, the mortgage will continue to be enforceable. Requirements for a mortgageare as follows:

a. Formalities of execution

b. Consideration not required


2. Title And Lien Theories Of Mortgages

In a so-called title-theory state, the mortgagor will deed legal title to the mortgagee, butwill retain an "equity of redemption" — the right to have legal title revested in him whenhe discharges his obligation. In a so-called lien-theory state, the mortgagor conveys onlya lien on the property to the mortgagee.

3. Rights Between Mortgagor And Mortgagee Prior To Default

The mortgagor has the full right of possession (including the corollary right to the rentsand profits from the land) until default. The mortgagor also has a possessory right to usethe property, as long as her use does not constitute waste that would prejudice the securityinterest of the mortgagee.

4. Right To Redeem And Clogging The Equity Of Redemption

In some states, even after the mortgagee has foreclosed the equity of redemption and ineffect vested title in himself or a purchaser from the mortgagee, some states permit themortgagor to redeem the property for a period of time, usually two years after theforeclosure sale. If the mortgagor pays the lesser of the amount bid at the foreclosure saleor the amount due on the mortgage note and foreclosure costs within the prescribed time,the mortgagee or the person buying from him must deed the property back to themortgagor.

C. TRANSFERS BY THE MORTGAGOR1. Conveyance Free And Clear Of The Mortgage

The grantor-mortgagor can convey the property free and clear of the mortgage if shedischarges her obligation to the mortgagee at the time of or prior to the closing.

2. Conveyance Subject To The Mortgage

The grantor can convey the property without making any special arrangements in regardto the mortgage. In this situation, only the grantor is personally liable on the note.The purchaser will lose his land, however, if the mortgage obligation is not discharged,and so will be informally expected to pay the mortgage debt. The grantor-mortgagor canforce the mortgagee to foreclose on the land before pursuing the grantor-mortgagorpersonally. If the grantor-mortgagor does pay on the mortgage obligation, however, he issubrogated to the rights of the mortgagee, and may foreclose on the property if thegrantee does not pay him back.

3. Conveyance Subject To The Mortgage With The Grantee Assuming The Debt

The grantee may expressly promise the grantor-mortgagor that she will pay themortgage obligation as it becomes due. By assuming the mortgage obligation, thegrantee becomes the principal debtor and the grantor-mortgagor becomes a surety. Thegrantee's express promise to pay the mortgage obligation gives the grantor-mortgagor adirect cause of action against the grantee if the grantee fails to pay. The mortgagee is athird-party beneficiary of the grantee's promise to pay, and so the mortgagee can sue thegrantee directly if the grantee fails to pay.


4. Novation

In a few cases, the mortgagee may agree to substitute the grantee as the obligor andrelease the grantor-mortgagor from any liability. In order to accomplish this, the granteeand mortgagee would have to enter into a new contract (or "novation").

5. Due-On-Sale Clauses

In theory, the mortgagee need not approve of the conveyance of the property to thegrantee or the financial arrangements made between the grantor-mortgagor and grantee.However, most mortgages now contain a "due-on-sale" clause that makes the entiremortgage debt due immediately if the grantor-mortgagor conveys the property. If theentire debt is not paid when the mortgagee exercises his right to call the entire debt, themortgage can foreclose. So, unless the grantor-mortgagor and grantee can arrange to payoff the mortgagee at the time of the sale, they must obtain the mortgagee's approval ofthe sale. Courts have upheld the validity of due-on-sale clauses.

D. TRANSFERS BY MORTGAGEE

Mortgagees may transfer both the underlying obligation and the mortgage itself. Normally,the two will be transferred together.

A conveyance of a mortgage is a conveyance of an interest in property and so must meet thenecessary formalities. Words of conveyance, however, are not necessary to transfer themortgagee's interest in a mortgage; the term "assign" is sufficient.

If the obligation is in the form of a negotiable note, it will be endorsed and negotiated to thetransferee. Any other obligation must be conveyed by a contract between the mortgagee andthe transferee (or a novation between the mortgagor and the new obligee).

The first purchaser has the presumed right to both instruments, except that a holder in duecourse of the note always has a superior right to the mortgage.

E. DISCHARGE AND DEFENSES

When the mortgagor has satisfied his obligations to the mortgagee, he is promptly entitled toreceive from the mortgagee a discharge of the mortgage in recordable form so that he canclear his title of the mortgage encumbrance. Most states impose severe penalties onmortgagees who fail to provide a discharge when they are obligated to do so. In addition themortgagor can sue for any actual damages suffered by failure to provide a discharge.

A mortgagee, however, is not required to accept satisfaction of the underlying obligation ifthe mortgage note does not permit prepayment of the mortgage. If the note only permits themortgagor to pay the note with interest in installments over a fixed period of time, themortgagee can refuse to accept any payment except the installment due and not discharge themortgage. Many states have provisions that in consumer mortgages require the mortgagee toaccept prepayment and discharge the mortgage.

The mortgage note frequently provides for a prepayment penalty if the mortgagor wants topay the mortgage off ahead of time. Such clauses are lawful. The mortgagee does not have


to discharge the mortgage until he receives both the amount due on the note and theprepayment penalty.

F. FORECLOSURE

If the mortgagor defaults on the underlying obligation, the mortgagee has the power toforeclose on the mortgage. Foreclosure is the process that extinguishes the mortgagor'sequity of redemption and allows the mortgagee to use the mortgaged property to satisfy theunderlying debt.

1. Types Of Foreclosure

a. Bill in equity to foreclose

This is also called "strict foreclosure." In an equitable proceeding, the mortgageeasks the court to set a date for performance of the obligation and to order that, if thereis no performance by that date, the mortgagor's equity of redemption be cut off

b. Foreclosure by entry of action

This method is used if the mortgage contains no power-of-sale provision. Themortgagee must enter the land and continue in possession for three years. At the endof the statutory period, the mortgagor's equity of redemption is automatically cut off

c. Foreclosure under a power of sale

Most commonly, a mortgage is foreclosed pursuant to a power of sale contained inthe mortgage.

1) Mortgagee must comply with contractual and statutory provisions

In order to foreclose on and sell mortgaged property validly, the mortgagee mustadhere strictly to the contractual and statutory requirements for a foreclosure sale.For example, statutes generally require that the foreclosure sale be by publicauction after proper notice to the mortgagor and advertisement of the sale.

2) Mortgagee must act in good faith

The mortgagee must act in good faith and use reasonable diligence to protect theinterests of the mortgagor. However, the mortgagee is allowed both to bid on theproperty at the foreclosure sale and to act as the auctioneer.

2. Rights Of Omitted Parties

The mortgagee prior to foreclosure must run the title to determine all persons having aninterest in the mortgage premises. These parties include the original mortgagor, anysubsequent owner of the property who has received her interest through the mortgagor,and junior mortgage holders; any attaching creditors; and any other persons whoseinterest in the land is shown in the record title. These parties must be notified of theforeclosure proceeding so that they can object to it if they think the proceeding isimproper and so that they can attend the foreclosure sale to protect their interests.


3. Deficiency And Surplus

The proceeds of a foreclosure sale are distributed as follows: (1) to the foreclosingmortgagee goes the sum of the unpaid balance of the obligation, the interest up to thetime of foreclosure (but not thereafter), and the costs of foreclosure; (2) then, juniormortgagees and attaching creditors have access to the proceeds, in the order of theirseniority under the recording statute; and (3) any surplus goes to the mortgagor.

a. Deficiency judgment

In many states, the mortgagee has a right to a deficiency judgment if the propertydoes not bring enough to satisfy his claim.

b. Relationships between competing mortgagees at foreclosure

The priorities of mortgagees are determined by the recording statute of thejurisdiction. Thus, the first mortgage granted is not necessarily the first in priority.

The purchaser at the sale will take the property free of all encumbrances except thosesenior to the mortgage being foreclosed. The junior mortgagees will have to bid onthe property to protect their interests in it.

c. Relationship between mortgagees and holders of security interests

Mortgages are usually written so that they cover any fixtures, whether attached to therealty at the time of the mortgage or later added. Since fixtures may be the separatesubject of security interests, there may be competing security interests in the samefixture.

1) Fixtures that can be subject to security interests

Goods irretrievably incorporated into realty (e.g., bricks) cannot properly be theobjects of security interests other than mortgages.

2) Priorities of mortgages and security interests

Generally, only a security interest in a fixture that is recorded prior to themortgage takes priority over the mortgage. There is one exception, however, apurchase-money security interest prevails over even a prior mortgage, if it isperfected within a reasonable time after annexation of the fixture to realty.

3) Rights of the superior holder of a security interest

If the holder of a security interest prevails over the mortgagees, she may removethe fixtures. She will be liable to the mortgagees for any damage done to theproperty by removal.

4. Statutory Right Of Redemption

Many states allow a mortgagor to recover the property for a reasonable amount of timeafter the foreclosure sale by paying the amount of the winning bid at the foreclosure saleto the mortgagee or the purchaser at the foreclosure sale. While this procedure makes theproperty unmarketable for a period of time, it does make it prudent for the mortgagee to


bid a fair price at the foreclosure sale. If he bids a nominal price, the property can beredeemed for that nominal price.

5. Deed In Lieu Of Foreclosure

When a mortgage is in default, the mortgagor and mortgagee can agree that the mortgagorwill deed the property to the mortgagee in satisfaction of the mortgage debt. Such aprocedure is valid, and if done properly will transfer the ownership of the property to themortgagee.

The deed in lieu of foreclosure is not a viable option if there are subsequentencumbrances on the property, because the deed will not wipe them out as a mortgageforeclosure will. Therefore the mortgagee taking a deed in lieu of foreclosure must makesure that the deed will give her clear title to the property.

V. TITLES

A. ADVERSE POSSESSION

Adverse possession is a doctrine that vests title to property in a person solely by reason of hislong-standing possession of the land. Generally, the possessor must wrongfully possess land,in such a way that the true owner should notice his possession, for the period of the statute oflimitations for ejectment. At common law, the period was 20 years.

1. Time When Statute Begins To Run

The statute begins to run when the owner becomes or should become aware of thepossession.

a. Possession must be hostile

In general, the possession must be without the owner's permission, but need not behostile in the sense of ill will.

1) Cotenant cases

Possession by a cotenant becomes hostile only when the cotenant eitherphysically ousts the other cotenants or effects a constructive ouster ofnonpossessory cotenants by expressly informing them that she is assertingexclusive dominion over the property.

2) Permissive commencement cases

If possession commenced under a lease or in some other permissive manner, thenit does not become adverse until there is explicit notification that possession ishenceforth adverse, or there is activity known to the owner which is inconsistentwith the lessee's permissive use of the premises.

b. Possession must notify owner; open-and-notorious possession

The statute of limitations does not begin to run until the owner actually knows orshould know of the possessor's possession. The legal standard has developed that theowner is put on notice of the possession when the possessor takes open and


notorious possession of the property. The possession required will be the type ofpossession that the average owner of such land would exercise. Physical presence onthe land is indispensable.

c. Effect of owner's disabilities

If the owner is disabled at the time his cause of action accrues, the common-law ruleis that the statute of limitations does not run against him until the disability isremoved. However, the running of the statute is not affected by disabilities laterincurred.

2. Requirement Of Continuous Possession

The possessor acquires title by adverse possession only if she has been in continuouspossession for the statutory period. Seasonal use qualifies as "continuous," as long as thepossessor uses the property during the appropriate season for each and every year of thestatutory period.

a. "Tacking" between successive possessors

An adverse possessor is entitled to count the period of possession of a priorpossessor towards the statutory period, if he is in privity with the priorpossessor. Any sort of consensual transfer of possession will put two adversepossessors into privity. Two possessors are not in privity when the secondpossessor's possession is adverse to the first possessor.

b. Interruption of possession

If the possessor's continuous possession is interrupted by the owner, thestatutory period must start all over again. The possession can be interrupted byany of the following methods.

1) Possession by the owner

The possessor's possession must be exclusive of the owner. Thus, if the ownergoes into possession, the statutory period is terminated.

2) Ouster

3) Judicial action

Filing an action for ejectment will terminate the possessor's possession, as long asthe owner obtains a decree of ejectment.

3. Title Obtained By Adverse Possession

The possessor takes a new title. Thus, his title is not subject to the defects found in therecord owner's title.

The possessor only takes the estate of the owners who no longer have a cause ofaction to eject him. If the possessor first took possession during a life estate or estate foryears, a bare 20 years of possession will only give him title to those estates.


a. Possession no longer required

After obtaining title by adverse possession, the possessor need not remain inpossession.

b. Property acquired by possession and constructive adverse possession

Generally, the possessor acquires title only to the property she has actuallypossessed. However, under the doctrine of constructive adverse possession, if apossessor enters onto land and takes possession of a part of it under "color of title,"she will obtain title to the entire tract, even though she didn't possess all of it.

B. CONVEYANCE BY DEED

1. Requirements Of A Valid Conveyance

A deed must meet the requirements of the Statute of Frauds, and often the additionalrequirements of the deeds statute of the jurisdiction, to be valid.

a. Requirements of a valid deed

1) Signature of the grantor

2) Name of the grantee

3) Words of conveyance

4) Description of the property conveyed

b. Elements not generally required

1) Witnesses or acknowledgment

2) Recording

3) Consideration

2. Necessity Of A Grantee

The grantee need only be identifiable from the deed. The grantee need not sign the deed.Also, the grantor need not be the one to place the grantee's name on the deed. Thegrantor may hand over a deed without a grantee's name and the conveyance will be validfor whomever's name later appears as the grantee (assuming that the grantor had therequisite intent to convey at the time he handed over the deed).

3. Delivery

There must be a "delivery" of the deed for title to be conveyed. The grantor "delivers"the deed at the time that she intends to confer an immediate, irrevocable interest on thegrantee. A physical transfer of the deed to the grantee most likely indicates that thegrantor intended to create an immediate interest in the grantee. However, it is possible tohave delivery without physical transfer, and vice versa.


a. Delivery without physical transfer

A grantor can "deliver" the deed without physically giving it to the grantee. All heneed do is execute the deed and somehow manifest intent to make it effectiveimmediately.

b. Physical transfer without delivery

By the same token, the grantor can physically transfer the deed to the grantee withoutaffecting delivery. If the grantor hands over the deed without intent to immediatelyand irrevocably create an interest in the grantee, the deed will not pass title.

However, in cases where the grantee has physical possession of the deed, the grantorwill have to overcome a presumption that the deed was delivered.

c. Physical transfer to third parties

In line with the general rule above, physical transfer to a third party only qualifies as adelivery if the grantor thereby intends to create an irrevocable and immediate interestin the grantee. Thus, an unconditional transfer of the deed to the grantee's agent willlikely qualify as a delivery.

4. Land Description And Boundaries

Aside from the basic requirement that the property be described in a manner sufficient toidentify it in order for the deed to be valid, any description of the property in the deedwill be important in any subsequent disputes regarding the boundaries of the property.

Where different descriptions of land in the same deed are inconsistent, the following rulesof construction will be applied. Natural monuments prevail over artificial ones. Naturaland artificial monuments both prevail over distances. Specific descriptions prevail overgeneral ones.

If a deed refers to a plan, the plan is incorporated into the deed, and the courses anddistances on the plan are to be regarded in determining the true construction of the deed.

If the grantor conveys property bounded by a road and the grantor owns the fee under theroad, the deed conveys property to the middle of the road, unless that does not appear tobe the grantor's intent and there is a reason she might want to keep an exclusive interestin the road (e.g., she owns the land on the other side or at the end of the road and needs itfor access).

The same rules as above apply to waterways — the deed is presumed to convey to themiddle ("the thread") of a waterway (if the grantor owned the land under the waterway)and any distances are measured from the banks of the waterway.

5. Covenants Of Title

Covenants of title are promises by a grantor in a deed in regard to the title the grantor isconveying. Once the deed is delivered and accepted, the grantee can only sue for defectsin the title based on the covenants of title in the deed.


a. Types of covenants

1) Present covenants

(a) Covenant of seisin

Here, the grantor warrants that he has title to and possession of the property orthe interest in property conveyed.

(b) Covenant of the right to convey

Here, the grantor warrants that she has the right to convey the property to thegrantee.

(c) Covenant against encumbrances

Here, the grantor warrants that there are no liens, mortgages, easements, orother interests in third parties which will diminish the ownership rights of thegrantee, except those listed in the deed.

2) Future covenants

(a) Covenant of quiet enjoyment

By the covenant of quiet enjoyment, the grantor warrants that the grantee andhis successors will not be disturbed in their possession of the property by thegrantor or someone with a claim of title superior to that of the grantor.

(b) Covenant of warranty

By the covenant of warranty, the grantor guarantees that her title is good, andthat she will assist in defending that title against claims by third parties.

(c) Covenant for further assurances

This covenant is not common, but where it is given, the grantor promises thathe will take whatever steps are necessary to perfect any defects in title.

b. Types of deeds

There are, generally, three types of deeds with respect to covenants.

1) Quitclaim deed

The quitclaim (or "release") deed contains no covenants. It conveys to the granteewhatever the grantor had, without making any representations or promises as tothe grantor's title.

2) General warranty deed

The general warranty deed contains all of the covenants discussed above, exceptthe covenant for further assurances. Such a deed makes the grantor liable for anyencumbrances or defects in title that existed at the time of the conveyance,whether attributable to her or her predecessors.


3) Special warranty deed

The special warranty deed contains the same covenants as the general warrantydeed, but the grantor is liable only for defects or encumbrances incurred duringhis ownership. In effect, the grantor warrants only that the property was notencumbered and the title did not become defective during his ownership.

c. Actions for breach of covenants

1) Time of breach

Present covenants are breached at the time of conveyance, if at all. Thus, thestatute of limitations starts to run at the time of the conveyance, even if the titledefect or encumbrance is not discovered until later.

Future covenants are not breached until the grantee's title to the property isseriously and validly disputed. The mere existence of an undisclosed mortgagewill not breach a future covenant; the grantee must be threatened with eviction.

2) Who can sue

A grantee has a cause of action only against her immediate grantor for a breach ofa present covenant. Future covenants run with the land. Therefore, once a grantorhas made a future covenant, she is liable to any subsequent grantee in her chain oftitle for any defects or encumbrances that existed at the time she conveyed theproperty.

C. CONVEYANCING BY WILL

If an individual dies leaving a valid will, and owns real estate in his individual capacity asopposed to owning it as a joint tenant, the will acts as an instrument of conveyance, andtransfers ownership of the property to the persons to whom the property was devised. If theproperty is not specifically devised by the will, the residuary clause of the will serves as theinstrument of conveyance. If the will does not effectively dispose of property, then the lawsof intestacy of the state in which the property lies govern the devolution of the property to thedecendent's heirs. For the disposition in any of these cases to be effective, there must be aprobate of the decedent's estate so that the will is allowed and their heirs determined andthere is a record of the distribution of the estate.

There are three circumstances where the devise of the real estate made in the will isineffective:

1. Ademption

The will only operates on property that is owned by the decedent at the time of death. Ifthe decedent sold or otherwise disposed of the property during her lifetime, the devise isadeemed by extinction, and the devisee does not receive other property to compensateher.

2. Exoneration

The devise of the real estate is effective only if all of the debts and taxes of the estate canbe paid without selling the real estate to satisfy them. If the real estate is specifically


devised, all of the property not specifically bequeathed or devised that is in the residuaryestate will be sold before specifically devised real estate to satisfy debts and taxes. If thereal estate is part of the residuary, then it will be sold to satisfy specific and generallegacies, and will abate if there are not sufficient unallocated funds to satisfy both theexpenses of the estate and the prior legacies. If the executor must sell to pay the debts orprior legacies, the devise of real estate in the will is ineffective.

3. Lapse

A devise is only effective if the devisee survives the testator. It will lapse if the testatorsurvives the devisee and will be disposed of by the residuary clause of the will, or if thedevise is to a sole residuary legatee, by intestacy. All jurisdictions have anti-lapsestatutes that provide that a devise to a relative survived by issue will go to the issue if thenamed relative predeceases the testator. Statutes vary with respect to the degree ofkindred required between the decedent and the deceased devisee.

D. PRIORITIES AND RECORDING1. Types Of Priority

a. Recording acts

A deed need not be recorded to be valid and convey good title. An unrecorded deedis always valid to give good title to the grantee, at least in regard to the grantor.However, if a grantee does not properly and promptly record his deed, he may losehis title if his grantor later grants the land again to someone else ("the subsequentgrantee").

Recording systems give stability to titles by providing a method of verifying agrantor's title and protecting the title of a purchaser who has bought land withoutknowledge of any prior grantee. A grantee must promptly and properly record thedeed he receives from the grantor, or a subsequent purchaser without knowledge ofhis deed may be able to take good title from the grantor. The public-recording systemprovides a method for a purchaser of land to give notice to the rest of the world thathe is now the record owner of land, so that no subsequent purchaser from the grantorcan rob him of title. In essence, although an unrecorded deed is valid as between agrantor and a grantee, only a properly recorded deed is good against the rest of theworld.

b. Judgment liens

The priority given to a judgment lien over other instruments depends on the statute inthe jurisdiction. Some states require that a judgment be recorded in the registry ofdeeds before it is a lien on property and it is then governed by the priorities in therecording system. In some states a judgment is a lien as soon as it is rendered by acourt, even if it is not recorded in the registry of deeds. The priority of that lienwould be governed by the date of the judgment. Some states make a judgment a lienagainst property acquired subsequent to the judgment where it would take priorityover other liens filed at that time except for purchase-money mortgages. If a state


gives automatic lien status to a judgment, it is necessary to check for judgment liensin an title search.

c. Fraudulent conveyances

Almost all states have enacted the Uniform Fraudulent Conveyance Act. When theowner of property makes a fraudulent conveyance, a transfer, or when the conveyanceis made to defraud creditors, designated creditors, set forth in the act, have rights inthe property superior to the rights of the transferee. They can treat the property as if itwere still owned by the transferor and can use it to satisfy their claims against thetransferor. However, if the property is transferred for some value to an innocentpurchaser who does not know that the transaction is a fraudulent conveyance, thatpurchaser has superior rights to the extent of the consideration she furnished. Ananalysis of the specific provisions of the act follows:

A deed need not be recorded to be valid and convey good title. An unrecorded deedis always valid to give good title to the grantee, at least in regard to the grantor.However, if a grantee does not properly and promptly record her deed, she may loseher title if her grantor later grants the land again to someone else ("the subsequentgrantee").

d. Protection of bona fide purchasers other than under statutes

Since most of the remedies for creditors to set aside conveyances and for holders ofunrecorded instruments to try to obtain property from bona fide purchasers areequitable in nature, the bona fide purchaser may have the equitable defenses oflaches, or unclean hands, in a suit which tries to take the property away from him.

2. Scope Of Coverage

a. Recorded documents

An individual records an instrument affecting land by filing it in the registry of deedsfor the jurisdiction where the land lies. Usually the instrument must be notarized anda fee paid. The recorder's office then photocopies the instrument, binds it in achronological volume, and indexes it according to the system employed in thejurisdiction (as explained below).

b. Mechanics of title searches

The only way a purchaser can verify the validity and quality of the grantor's title is byusing indexes to find all of the documents making up the grantor's chain of title.How these indexes are used depends on the type of index utilized in the jurisdiction.

1) The tract index

The tract index is used in some highly developed urban areas. All of the land inthe jurisdiction is subdivided into small parcels known as "tracts." Eachinstrument is then indexed under the tract designation. The title examiner looks inthe tract index under that particular tract, and finds references to the book andpage numbers of all documents affecting that tract. She will then go to the recordbooks to examine those documents.


2) The grantor-grantee index

The most common type of indexing system is the grantor-grantee index, which isactually two separate indexes — one arranged by the grantor's name and onearranged by the grantee's name. When an instrument is brought to the registrar'soffice, it is indexed under the name of the grantor in the grantor index, and underthe name of the grantee in the grantee index.

c. When a subsequent purchaser gets superior title

1) Subsequent purchaser must receive a valid deed

A subsequent purchaser's deed cannot defeat a prior deed if the subsequent deedis forged or obtained from an incapacitated grantor.

2) Subsequent deed must have been purchased

In order to qualify as a purchaser, the subsequent grantee must give "value."Value means more than nominal consideration, but does not necessarily mean afair price. A deed given in exchange for cancellation of a debt is purchased. Adeed given as security for a loan (i.e., a mortgage) is purchased, as long as theloan and the deed are simultaneous.

3) Subsequent purchaser usually must have purchased without notice

In the overwhelming majority of jurisdictions (i.e., all jurisdictions but thosewhich have a pure "race" system of recording, discussed below), a subsequentpurchaser must be a bona fide purchaser to prevail — that is, she must havepurchased without notice of the prior, unrecorded conveyance. A subsequentpurchaser can be notified of a prior purchase by the following three types ofnotice.

(a) Constructive notice

A promptly and properly recorded and indexed deed is constructive notice toall. An improperly recorded or indexed deed is usually held not to beconstructive notice, unless it is actually discovered by a title examiner.

(b) Actual notice

(c) Inquiry notice

A prospective purchaser is expected to inspect the land before buying. If theland is in the possession of a stranger, then the grantee has the duty toinvestigate further or he will not be a bona fide purchaser.

4) Subsequent purchaser may have to record first

Whether the subsequent purchaser must record her deed to prevail over the priordeed depends on the type of recording system employed in the jurisdiction.


(a) Notice system

A subsequent bona fide purchaser need not record to prevail over a priordeed, in a notice system of recording. Under a notice system, a subsequentpurchaser takes good title by merely purchasing without notice of the priorconveyance.

(b) Race-notice system

Under a race-notice system, the subsequent bona fide purchaser mustrecord first, in order to prevail over a prior grantee.

(c) Race system

A race system gives good title to whomever records first, regardless ofwhether that person had notice of prior conveyances.

d. Interests affected by recording system

Title obtained by adverse possession; easements obtained by implication, necessity,or prescription; and short-term leases need not be recorded. All other interests mustbe recorded.

e. Doctrine of shelter

Once a subsequent bona fide purchaser has achieved superior title as against a priorgrantee, he can convey that priority to almost anyone, including someone who hadnotice of the prior conveyance. However, a purchaser who is not a bona fidepurchaser cannot convey to a bona fide purchaser and then buy the property back toobtain the status of a bona fide purchaser.

3. Special Problems

a. Instruments recorded out of chain of title

1) The deed recorded early — estoppel by deed

Estoppel by deed operates in the situation where an individual has conveyed aninterest in land by a warranty deed, but does not actually own the land until afterthat conveyance. In such a situation, the title is transferred automatically to thegrantee when the grantor acquires it. The question then becomes whether asubsequent purchaser can get good title from that same grantor. Because a personexamining title will not find the conveyance from the grantor to the prior granteein the chain of title, the majority rule is that a subsequent bona fide purchasercan get good title, despite the doctrine of estoppel by deed.

2) The instrument recorded late

Since the registry of deeds records and indexes instruments by the date they arereceived at the registry, rather than by the date of the conveyance, it is possiblethat a valid conveyance might not be recorded until after the grantor has conveyedthe property a second time. The majority of jurisdictions hold that a


purchaser does not have constructive notice of a late-recorded instrumentthat is out of the chain of title.

b. Constructive notice

A promptly and properly recorded and indexed deed is constructive notice to all. Aproperly recorded and indexed deed defeats all subsequent grantees.

However, a subsequent purchaser need not actually check the registry of deeds toattain the status of a bona fide purchaser. If the prior deed is not recorded, thesubsequent purchaser can be a bona fide purchaser, even if she did not check therecord.

c. Forged instruments

Forged documents, even if properly recorded and notarized and relied upon by bonafide purchasers, are ineffective to affect title. Even if the forged document was backin the chain of title, so that the seller received an unforged deed when he took title,the doctrine of shelter is inapplicable, and the buyer who takes through a forgedinstrument will lose to the true owner.

d. Transfers from corporations and by agents

A deed signed by an officer of a corporation on its behalf or by an agent for aprincipal only conveys the interest of the principal if the agent is authorized to signthe document or if the purchaser is protected under some theory of apparent authorityor estoppel. The common practice when a corporation conveys property is to placeon record a corporate vote authorizing the officer to execute the deed on behalf of thecorporation. Likewise, an agent executing a deed for an individual should place onrecord a power of attorney authorizing the action. Without these documents onrecord, there is a flaw in the title.

e. Purchase-money mortgages

In some jurisdictions, the seller who takes back a purchase-money mortgage may beentitled to additional protection, so that her mortgage is valid against a trustee inbankruptcy even though she did not immediately protect her security interest byrecording the purchase-money mortgage. Likewise, if there is a statute in thejurisdiction which gives judgments or government liens an automatic attachmentagainst after-acquired property, those statutes would not apply so as to give priorityover purchase-money mortgages.



REAL PROPERTY

I. OWNERSHIP

A. LIFE ESTATES

■ Any remainderman (including a contingent remainderman) can enjoin a lifetenant from committing waste.

■ The holder of an interest after a qualified fee simple determinable or fee simplesubject to a condition subsequent cannot enjoin the holder of the fee simple forwaste.

■ If there is a mortgage on property at the time it is conveyed to a life tenant anda remainderman, the life tenant is responsible for interest and current real estatetaxes, and the remainderman is responsible for paying the principal. The lifetenant is obligated to pay the interest due on the mortgage during his estate, tothe extent that the property produces or can produce income.

B. COTENANCY

■ The granting of a mortgage by one joint tenant does not transform the tenancyinto a tenancy in common in a state adopting the lien theory of mortgages, but itdoes in a title-theory state.

■ If two joint tenants die simultaneously, the estate of each takes one half.

■ A conveyance by all joint tenants of an undivided portion of their interest to athird party does not destroy the joint tenancy between them in the portion theyretain.

C. FUTURE INTERESTS

■ If an interest is created in a third party in the same instrument as the priorpossessory interest and can take in possession upon the termination of the priorinterest, it is a remainder.

■ A remainder is contingent if there is a condition precedent to its becomingpossessory or the holders are unascertained.

2 MicroMash MBE In Brief: Real Property Exam Alerts

■ A remainder is vested if it can take whenever and however the previous estateterminates. The persons taking are ascertained and there is no conditionprecedent to their taking.

■ If the named vested remainderman dies before the life tenant, her devisees takeher interest if she leaves a will. Her heirs take if she dies intestate.

■ If there is a class gift (a gift to children or grandchildren), afterborn members ofthe class can join the class until the class closes. If the grantor does not indicateotherwise, the class closes at the time any member of the class is capable oftaking possession of the gift.

■ If there is a remainder to the children of a living person and one or morechildren are in existence, then during the prior estate the interest in the childrenis "subject to open," or "subject to partial divestment."

■ A future interest can be alienated prior to its becoming possessory.

■ The interest in the "heirs" of a living person is contingent, because heirs cannotbe determined until the person's death.

D. THE LAW OF LANDLORD AND TENANT

1. TYPES OF TENANCIES

■ A periodic tenancy is terminated by notice (from either the landlord or thetenant) before the beginning of a rental period terminating the tenancy at theend of that period.

■ A term for years is terminated at the end of the term without notice by eitherparty.

2. ASSIGNMENT AND SUBLETTING

■ A tenant is liable to pay rent during the term even if she has assigned herinterest in the leasehold.

■ An assignee is obligated to pay rent during the time that she possesses theleasehold property, but is not obligated to pay rent if she further assigns herleasehold interest.

■ Only if the landlord, tenant, and assignee enter into a novation is the tenantno longer liable for the rent.

■ When a tenant validly assigns a lease, the assignee and the landlord (or thelandlord's successors) are bound by all of the covenants in the lease, such asa covenant to pay taxes or a covenant giving the tenant a right to purchasethe property.

■ A covenant against assignment does not prevent a tenant from subletting theproperty and vice versa.

MicroMash MBE In Brief: Real Propert Bar Exam Alerts 3

3. RENT

■ A tenant who is denied the beneficial use of the property by the landlord andwho moves out is not liable to pay the rent on the theory that she wasconstructively evicted.

E. SPECIAL PROBLEMS

1. THE RULE AGAINST PERPETUITIES

■ A child conceived but not born at the time of the commencement of the rulewill be considered a life in being.

■ The Rule Against Perpetuities does not apply to interests in the grantor(reversions, possibilities of reverter, or rights of entry for condition broken) orvested remainders.

■ The time for determining lives in being when the conveyance is by will is atthe death of the testator.

■ The time for determining lives in being when the conveyance is by inter vivosdeed is at the time of the conveyance.

■ The time for determining lives in being when the conveyance is by irrevocableinter vivos trust is at the time of the conveyance. If the trust is revocable, itis at the time that the power to revoke terminates (either on the death of thetestator or earlier if the power to revoke is relinquished).

■ The Rule Against Perpetuities invalidates rights of first refusal which mightnot be exercised within the period of the rule.

■ Under the common-law Rule Against Perpetuities, any person is irrebuttablypresumed capable of having children until death.

If the Rule Against Perpetuities invalidates the interest of one member of aclass, the disposition to the entire class is invalid.

■ If an interest is invalid because of the Rule Against Perpetuities, thedisposition is construed with the invalid gift deleted.

■ If there is no ultimate disposition in a will because of an invalid disposition,then the testator's heirs take.

■ If there is an incomplete disposition by conveyance because of an invalidity,then the grantor or his heirs have a reversion.

2. ALIENABILITY

■ A right of first refusal that only requires the seller to sell at market value isnot an invalid restraint on alienation.


■ A prohibition of a grantee's right to alienate property or a provision forfeitingan interest if the grantee attempts to alienate is invalid.

■ The owner of property can by contract restrict her own right to alienateproperty.

II. RIGHTS IN LAND

A. COVENANTS

■ The person who imposes a covenant that runs with the land cannot enforcethat covenant against a subsequent purchaser unless he is still the owner ofsome land which was owned by him at the time he imposed the covenant.

■ For a deed covenant to be enforceable against a subsequent owner of theproperty restricted, the original parties must have intended that it apply tosubsequent owners, the subsequent owners must have actual or recordnotice of the restriction, and the subject matter of the restriction must touchand concern the land.

■ The recording by a grantee of a deed containing a covenant running with theland is a satisfactory substitute for a memorandum signed by the grantee,and the defense that the covenant is unenforceable because of the Statute ofFrauds is invalid.

■ If the grantor consistently imposes similar covenants on a group of lots in asubdivision, he has created a common scheme and the owner of any lotsburdened by the restrictions can sue the owner of any other lot to enforcethe restrictions.

■ If the grantor imposes similar covenants on a group of lots in a subdivision,she has created a common scheme and can be required to impose similarrestrictions on all remaining lots in the subdivision, even if she has notpromised in writing that she will do so.

B. EASEMENTS AND PROFITS

1. EASEMENTS BY NECESSITY

■ An easement by necessity or implication can only be created at the time ofthe division of a commonly owned parcel.

■ An easement created by necessity ends when the necessity ends, but the endof the reason for creating an express easement does not terminate anexpress easement.

■ An easement for light and air does not arise by necessity or implication.


2. EASEMENTS BY PRESCRIPTION

■ An easement by prescription need not be recorded to be effective againstpurchasers.

■ The scope of an easement by prescription depends upon the scope of the useduring the prescriptive period.

• Once an easement by prescription ripens with the passage of the appropriatetime, continuous use of the easement is not necessary to maintain it.

• If use is with the permission of the owner, then no prescriptive rights accrue.If nothing is said, then the use is adverse.

■ The adverse use of the property need not be exclusive to obtain an easementby prescription.

3. SCOPE OF EASEMENTS

■ An easement is overburdened if it is used to benefit land other than thedominant estate.

■ Non-use alone is insufficient to terminate an easement.

■ An easement by grant must be in writing and signed by the grantor to bevalid.

■ An easement by grant must be recorded in order to bind bona fidepurchasers of the benefited land.

■ An appurtenant easement is automatically transferred with the dominantestate.

■ A person cannot alienate her interest in an appurtenant easement separatefrom the alienation of the dominant estate, and the attempted alienationdestroys the easement.

■ The holder of an easement has the right to make repairs to property such aspipes and roads that are associated with the easement.

■ A person cannot have an easement on land that she owns in fee simple.

■ If the holder of the dominant estate acquires title to the servient estate, theeasement is destroyed by merger and is not reinstated by a later conveyanceof the servient estate.

■ If the owner of an interest in land induces another person to rely substantiallyon the fact that the owner will not assert her property right, the owner will beprevented from later asserting that right by reason of estoppel.

4. PROFITS A PRENDRE

■ A person who holds an exclusive profit a prendre has the right to apportion it.


■ A profit a prendre can be unlimited in time and is created in the same manneras an express easement.

C. FIXTURES

■ A tenant has the right to remove personal property that he attached to the realestate, even though the property might otherwise be characterized as a fixture(real estate).

■ A person having an estate of uncertain duration (e.g., a life estate) who plantscrops on that land can enter the land and remove the crops at the end of thegrowing season.

III. REAL PROPERTY CONTRACTS

A. CREATION AND CONSTRUCTION

■ A written brokerage-listing agreement is not a memorandum sufficient to satisfythe Statute of Frauds.

■ Payment of the purchase price by the buyer is not sufficient part performance totake an oral agreement out of the Statute of Frauds.

■ A written memorandum is necessary to change co-ownership from one form toanother.

B. MARKETABLE TITLE

■ Restrictions imposed by zoning ordinances do not render title unmarketable.

■ The fact that a buyer would be exposed to nonfrivolous litigation is sufficient torender title unmarketable.

■ An adverse possessor whose title has not been confirmed in a judicial proceedingdoes not have marketable title.

■ The most useful property device to control the use of land, which does notseriously affect the marketability of title, is usually an easement. However, if themarketability of title is not an issue, a qualified estate is the most certain form ofcontrol.

C. INTERESTS BEFORE CONVEYANCE

1. EQUITABLE CONVERSION

■ In a jurisdiction that recognizes equitable conversion, the risk of loss is on thebuyer from the time that a binding purchase-and-sale agreement is executed.

■ If a purchase-and-sale agreement is executed in a jurisdiction whichrecognizes equitable conversion, the buyer's interest is immediately an


interest in realty and the seller's interest is immediately an interest in theproceeds (i.e., personalty).

2. CLOSING

■ If time is of the essence, then the seller and the buyer must each beprepared to close on the date specified in the agreement, or each is indefault.

D. RELATIONSHIPS AFTER CONVEYANCE

■ If a purchase-and-sale agreement is consummated by the delivery of a deed,covenants contained in the purchase-and-sale agreement are no longerenforceable, unless the agreement specifically states that they survive theclosing.

IV. REAL PROPERTY MORTGAGES

A. TYPES OF DEVICES

■ A deed that is absolute on its face, but was intended only to convey a securityinterest, can be reformed by a court into an equitable mortgage, as long as abona fide purchaser does not now hold title.

■ Other security devices, such as installment sales contracts, will be treated as amortgage by a court. The usual procedures required for foreclosure andredemption will be applied.

B. TRANSFERS BY MORTGAGE; FORECLOSURE

■ A person who purchases at a mortgage foreclosure takes free of anyencumbrances placed on the land subsequent to the mortgage that is beingforeclosed.

■ If the mortgagor sells property without paying off the mortgage and the buyeragrees to assume and pay the mortgage, the buyer is primarily liable and themortgagor is only secondarily liable on the mortgage note.

■ If the mortgagor sells property without paying off the mortgage and the buyertakes subject to the mortgage (i.e., without agreeing to pay the debt), the buyeris not liable for any deficiency judgment on the mortgage note, but can lose theproperty through foreclosure if she does not pay the mortgage.

■ If a deed (rather than a mortgage) is given to secure the payment of a debt, thedeed is an equitable mortgage. Parol evidence can be used to prove that thedeed was intended to be a mortgage.


■ If there is an equitable mortgage, the grantor-mortgagor can require areconveyance of the property upon payment of the debt unless the grantee-mortgagee has conveyed the property to a bona fide purchaser.

• A mortgage foreclosure is not effective against a junior encumbrance unlessnotice is given to the holder of the encumbrance.

• A purchase-money mortgage (a mortgage from the grantee to the grantor tosecure part of the purchase price) which is recorded immediately after the deedtakes precedence over any other liens on the property.

V. TITLES

A. ADVERSE POSSESSION

■ Open, notorious, and exclusive possession by one cotenant for the statutoryperiod will not establish adverse possession unless the other cotenant wasousted at the beginning of that period.

■ Joint possession with the rightful owner interrupts the adverse possessor'sexclusive possession. Adverse possession must start all over again after therightful owner leaves.

■ If adverse possession commences against a competent adult, the subsequentownership by a minor or a person with a disability does not interrupt thestatutory period.

■ It is possible to obtain title by adverse possession to airspace by projections froma structure that overhangs another's property.

■ Transfer of ownership by the true owner does not interrupt the running of theperiod of adverse possession.

• Transfer of rights from one adverse possessor to a subsequent adversepossessor does not interrupt the running of the period of adverse possession.

B. CONVEYANCING BY DEED

1. VALID CONVEYANCE

■ A forged deed is a nullity conveying no title.

■ The time of the transfer of title dates back to the time when the deed wasdelivered into a commercial escrow if the transaction is consummated.

■ If the owner of property delivers a valid deed to a grantee, title is transferredto the grantee even though the deed is not recorded.

• The subsequent redelivery of the original deed from the grantee to thegrantor does not retransfer title to the grantor. A new deed signed by thegrantee is required for that retransfer.


■ A grantee who receives a warranty deed is not required to be a bona fidepurchaser to sue his grantor for a breach of a warranty.

■ If the grantee of a validly delivered deed objects to owning the property, titlehas not been transferred because the grantee has not accepted the deed.

2. LAND DESCRIPTION AND BOUNDARIES

■ Any description of property describing the property deeded with reasonablecertainty is sufficient to make the deed effective. A reference to a survey orplan is sufficient, even if the survey or plan is not recorded. In cases ofambiguity, parol evidence is admissible to clarify the parties' intent. A deedthat does not sufficiently describe the property, even after consideration ofparol evidence, is invalid.

■ Where there is a conflict, a description of the property by monumentsprevails over a description of the property by distances.

3. COVENANTS OF TITLE

■ A quitclaim deed contains no covenants. A warranty deed usually containsboth present and future covenants. Future covenants run with the land,while present covenants do not. Thus, the grantee may sue only theimmediate grantor for breach of a present covenant (such as the covenantagainst encumbrances). Present covenants are also breached, if at all, at thetime of conveyance.

■ The covenant of quiet enjoyment (a future covenant) is breached only whenthe grantee is ousted from possession of (even part of) the land.

■ If a person grants an interest in land that he does not own to a grantee by awarranty deed, the grantee automatically becomes the owner of that interestas soon as the grantor acquires it, because of estoppel by deed.

C. PRIORITIES AND RECORDING

■ Recording is not required for an effective transfer of interests between theparties to the transaction.

• If the owner of property delivers a deed to a grantee and she recordsimmediately, and the owner then delivers a deed of the same property to asubsequent grantee, the subsequent grantee loses because she has(constructive) notice of the prior deed.

■ If the owner of property deeds first to one grantee and then to a secondgrantee, the issue of which grantee prevails does not turn on whether the firstgrantee is a bona fide purchaser. That inquiry is relevant only with respect tothe second grantee.

■ A deed that is recorded out of order in the chain of title is not constructive noticeto a subsequent bona fide purchaser.


■ In a notice jurisdiction, the subsequent grantee cuts off the interest of the priorgrantee who fails to record if the subsequent grantee is a bona fide purchaser.

■ In a race-notice jurisdiction, the subsequent grantee cuts off the interest of theprior grantee who fails to record if the subsequent grantee is a bona fidepurchaser and records prior to the first grantee.


MBE IN BRIEF

TORTS

Table of Contents

I. INTENTIONAL TORTS 1

A. HARMS TO THE PERSON 1

I. Assault 1

2. Battery 1

3. False Imprisonment 24. Intentional Infliction Of Mental Distress 2

B. HARMS TO PROPERTY 2

1. Trespass To Land 22. Trespass To Chattels 33. Conversion 3

C. DEFENSES TO CLAIMS FOR PHYSICAL HARMS 3

1. Consent 32. Privilege 33. Immunity 4

4. Necessity 5

D. DAMAGES RECOVERABLE FOR INTENTIONAL HARMS 5

II. NEGLIGENCE 5

A. DUTY 5

1. Duty To Act 6

2. Unforeseeable Plaintiffs 6

3. Obligations To Control The Conduct Of Third Parties 6

B. STANDARD OF CARE 7

1. The Reasonable Prudent Person 7

2. Rules Of Conduct Derived From Statutes And Custom 8

C. PROBLEMS RELATING TO PROOF OF FAULT INCLUDING RESIPSA LOQUITUR 8

1. Res Ipsa Loquitur 9

2. Direct Evidence Of Negligence 9

D. PROBLEMS RELATING TO CAUSATION 10

1. "But For" Test 10

2. Substantial Factor Test 10

3. Harms Traceable To Multiple Causes 10

4. Apportionment Between Multiple Defendants 11

E. LIMITATIONS ON LIABILITY AND SPECIAL RULES OFLIABILITY 11

1. Proximate Cause 11

2. Claims Against Owners And Occupiers Of Land 12

3. Claims For Mental Distress Not Arising From Physical Harm; OtherIntangible Injuries 13

4. Claims For Pure Economic Loss 14

F. LIABILITY FOR THE ACTS OF OTHERS 14

1. Joint Liability 14

2. Vicarious Liability 15

3. Master-Servant Relationship 15

G. DEFENSES TO NEGLIGENCE ACTIONS 15

1. Contributory Fault 15

2. Assumption Of The Risk 16

3. Imputed Negligence 16

4. Immunity 16

H. DAMAGES IN NEGLIGENCE ACTIONS 17

1. Damages Recoverable 17

2. Collateral Source Rule 17

III. STRICT LIABILITY 17

A. ABNORMALLY DANGEROUS 17

B. THE RULE OF RYLANDS V. FLETCHER 17

C. KEEPING ANIMALS 17

1. Trespassing Animals 17

2. Personal Injury Caused By Wild Animals Or Domestic Animals 17

IV. PRODUCTS LIABILITY 18

A. NEGLIGENCE 18

B. STRICT LIABILITY 18

1. Individuals Protected 19

2. When Strict Liability Is Applicable 19

3. Defenses 19

C. MISREPRESENTATION AND WARRANTY THEORIES 20

1. Misrepresentation Under Restatement §402B 20

2. Warranties Under The Uniform Commercial Code 20

V. OTHER TORTS 20

A. NUISANCE 20

1. Interference With Use And Enjoyment 20

2. Reasonableness Of Conduct 21

3. Relief 21

4. Public Nuisance 21

B. CLAIMS BASED UPON DEFAMATION AND INVASION OFPRIVACY 21

1. Defamation 21

2. Invasion Of Privacy 22

C. CLAIMS BASED UPON MISREPRESENTATIONS 22

1. Deceit 22

2. Negligent Misrepresentation 23

D. CLAIMS BASED UPON INTENTIONAL INTERFERENCE WITHBUSINESS RELATIONS 23

1. Interference With Contractual Relations 23

2. Interference With Advantageous Relations 24

E. CLAIMS BASED UPON MALICIOUS PROSECUTION 24

1. Elements 24

2. Application To Civil Proceedings 24

VI. IMPACT OF INSURANCE, WORKERS' COMPENSATION, AND"NO-FAULT" SYSTEMS 24

A. AREAS AFFECTED BY INSURANCE 24

B. TYPES OF INSURANCE 24

Hi

C. WORKERS' COMPENSATION SYSTEMS 25

D. "NO-FAULT" SYSTEMS 25

iv

TORTS

I. INTENTIONAL TORTS

A. HARMS TO THE PERSON

1. Assault

In an action for assault, plaintiff must prove: (1) that defendant placed plaintiff in actualapprehension of an immediate harmful or offensive touching; (2) that defendant intendedeither to bring about the offensive or harmful touching, or the apprehension thereof (as,for example, by threatening plaintiff with an unloaded gun); and (3) that plaintiff did notconsent. The defendant must have had the apparent present ability to bring about such acontact. A conditional threat of immediate harm constitutes an assault if the condition isone which defendant is not privileged to impose under the circumstances.

2. Battery

a. Elements

In an action for battery, plaintiff must prove that defendant: (1) intended to causeplaintiff to suffer a harmful or offensive touching, or to create apprehension inplaintiff of an imminent harmful or offensive touching; (2) actually caused such aharmful or offensive touching; and (3) did so without plaintiffs consent. Substantialcertainty that the contact will result satisfies the intent requirement. Intent to bringabout the touching does not necessarily mean intent to harm the plaintiff. Thedoctrine of transferred intent applies to battery as well as to assault.

b. Lack of consent

Whether the action is for assault or battery or both, plaintiff must prove lack ofconsent. If the plaintiff has not consented, expressly or impliedly (by conduct orcustom), the touching is unpermitted, and defendant is liable even if she acted withthe best of motives (e.g., unlawful extension of surgery). Consent is not purely asubjective matter; the defendant is entitled to act upon reasonable appearances inimplying plaintiff's consent. Consent induced by fraud is not effective if it goes tothe essence of the touching; it does, however, bar the action if defendant's fraudrelated solely to a collateral matter. Likewise, consent induced by defendant'smisrepresentation, even though not intentional, does not bar the action if it goes to theessence of the touching.

Normally, consent bars the action even though the consent was to an unlawful act.There are, however, two exceptions: (1) a minority of jurisdictions do not recognizeconsent to a breach of the peace (e.g., fist fighting), and allow the participants to sueone another for assault and battery; and (2) where criminal law invalidates consent inorder to protect a class of persons against their own lack of judgment (e.g., statutoryrape), such invalidation will likewise apply in a civil action.

2 MicroMash MBE In Brief: Torts

The touching may not go beyond the scope of consent given unless, in a medicalsituation, the doctor extends an operation to protect the life or health of the patient.

3. False Imprisonment

In an action for false imprisonment, plaintiff must prove that defendant: (1) confined theplaintiff within a limited area from which there was no reasonable and apparent means ofescape — merely impeding plaintiffs movement in a certain direction is insufficient; (2)acted intentionally; and (3) did not have plaintiff's consent. There is a split of authorityon the issue of whether plaintiff must be aware of his confinement at the time it takesplace; the Restatement (Second) of Torts requires awareness. Awareness is not requiredif plaintiff suffered harm from the confinement.

4. Intentional Infliction Of Mental Distress

In an action for intentional infliction of mental distress, plaintiff must show thatdefendant's conduct caused plaintiff severe emotional distress. Slight distress,embarrassment, or humiliation is insufficient. The more recent cases do not requirephysical harm resulting from the distress, although if it occurs, such physical harm is alsocompensable. Plaintiff must also prove that defendant acted intentionally. Recklessdisregard for the plaintiffs rights will satisfy the requirement of intent. Commoncarriers, innkeepers, and public utilities are strictly liable to their patrons for mentaldistress caused by highly offensive insults.

B. HARMS TO PROPERTY

The torts involving intentional harm to property are: (1) trespass to land; (2) trespass tochattels; and (3) conversion.

1. Trespass To Land

a. Elements of action

In an action for trespass to realty, plaintiff must establish: (1) that she had possessionor the right to possession of the land in question; (2) that defendant either herselfmade an entry onto the land, or projected an object onto the land, and (3) thatdefendant did so intentionally. In trespass to property, consent is an affirmativedefense. Except where defendant is the real owner or the person having the right topossession, the plaintiff in actual possession (even though wrongfully) is entitled toprevail. While defendant's entry must be intentional, she need not know she iscommitting a trespass; a good-faith mistake does not excuse the entry, even if it isreasonable. She is also liable for any harm caused by her trespass to the person orproperty of the possessor or members of the possessor's family; a showing ofnegligence is not required.

b. Nuisance distinguished

While trespass to land protects the plaintiff's possessory interest in the land, theaction for nuisance protects the plaintiffs use and enjoyment of his property. Recentcases in some jurisdictions have rejected the distinction between nuisance and

MicroMash MBE In Brief: Torts 3

trespass that is based solely upon whether the invasion is by tangible items (e.g.,stones) or intangible items (e.g., chemicals). See section V(A) on nuisance.

c. Damages

Nominal damages may be recovered for trespass, even though no actual harm is doneto the property.

d. Privilege

A person may be privileged to enter the land of another to protect her own person orproperty; the privilege is, however, incomplete, in that she must pay damages for anyactual harm that she causes. The state may take a person's property for the publicgood under its power of eminent domain; it must, however, pay the owner for its fairvalue. Under the police power, the state may destroy or limit the use of property thatrepresents a danger to the public safety, health, or welfare. In such case, no damagesare awarded to the owner.

2. Trespass To Chattels

Trespass to chattels and conversion both involve an interference with the plaintiff'spossessory interest in personal property. If the dominion over the property is notcomplete, the interference constitutes a trespass to the chattel, in which case damages arefor any actual damage to the property or actual loss of its use.

3. Conversion

Where defendant's interference is sufficient to constitute an act of dominion over theproperty, the plaintiff in an action for conversion may recover its fair market value. Inthe alternative the plaintiff may sue for return of the goods taken in an action of replevin.

C. DEFENSES TO CLAIMS FOR PHYSICAL HARMS

1. Consent

Since lack of consent is an element in many intentional torts, the issue of consent isdiscussed with the discussion of the tort itself.

2. Privilege

There are two basic affirmative defenses to the torts of intentional harm to the person:privilege and immunity. Privilege justifies defendant's conduct so that no tort occurs.

a. Self-defense

Self-defense is a privilege. A person is entitled to use reasonable force to preventinjury to himself. Deadly force cannot be used to repel force of a nondeadly nature.A person may not use deadly force even to repel deadly force, if there is a reasonablemeans of escape. Most states, however, hold that this retreat doctrine does not applyto a person while in his home or place of business.


b. Defense of a third person

A person may use reasonable force to protect a third person. A majority ofjurisdictions, however, take the view that the actor takes the risk whether the personshe is defending would be privileged to defend herself in like manner, and is thusliable in case of mistake.

c. Defense of property

Reasonable force may be used to recapture property, provided the original takingwas wrongful (as opposed to merely a wrongful refusal to return), and there is freshpursuit. The force used solely to recover or protect property may not be deadly; trapssuch as spring guns, likely to cause death or serious injury, may not be used. Mostjurisdictions grant a privilege to a shopkeeper to use reasonable force to detain aperson for a reasonable period upon reasonable grounds that such person has stolenproperty. The privilege ends when the goods are recovered; the shopkeeper cannotcontinue to hold such person in order to obtain a signed confession.

d. Arrest without a warrant

In the absence of a statute restricting or expanding the common law, a peace officermay arrest without a warrant: (1) a person who has committed or is committing afelony; (2) a person he reasonably suspects of having committed a felony; or (3) aperson who has committed or is committing in the officer's presence a misdemeanorwhich is a breach of the peace. Reasonable grounds as to the commission of amisdemeanor are insufficient. A private person may arrest without a warrant for: (1)a felony, only if a felony has in fact been committed, and he has reasonable groundsto believe that the person arrested committed the felony or (2) a misdemeanorconstituting a breach of the peace committed in the presence of the arresting person.

e. Discipline of children

Parents are privileged to use reasonable force to discipline their children. In theabsence of a statute to the contrary, a teacher may use reasonable force to discipline achild.

3. Immunity

Immunity does not make defendant's conduct nontortious, but does bar an action for suchconduct on policy grounds.

a. Interspousal and parent-child

The majority of jurisdictions have partially or totally abolished intrafamily immunity,principally on the basis that the presence of liability insurance precludes anyargument that such suits destroy family harmony. Immunity does not exist betweensiblings, nor does it generally apply against a spouse's employer being sued underrespondeat superior.


b. Charitable immunity

The doctrine of charitable immunity has been abolished in practically all states,although some states by statute limit the amount recoverable against a charity.

c. Governmental immunity

The federal government cannot be sued in tort except as allowed under the FederalTort Claims Act. Under the act, the federal government is liable only if a privateperson would be liable under the law of the place where the tort occurred. Norecovery is allowed for intentional torts, for the performance or nonperformance ofdiscretionary functions, or on a strict liability theory.

In most jurisdictions, a state may be sued for torts only to the extent permitted bystatute. This doctrine is, however, eroding. Further, some states have enactedlegislation similar to the Federal Tort Claims Act, allowing suits against the state.Municipalities are generally held liable for torts performed while carrying outproprietary functions, but not while carrying out governmental functions. However,as with states, the doctrine of municipal immunity is eroding.

d. Immunity of public officials

Judges and high governmental officials enjoy an absolute immunity from tortliability. Lower officials are protected when performing quasi-judicial, legislative, ordiscretionary responsibilities, but not when performing purely ministerial acts.

4. Necessity

The defense of necessity is available when the defendant's tortious conduct wasnecessary to avoid greater harm.

D. DAMAGES RECOVERABLE FOR INTENTIONAL HARMS

Compensatory damages for intentional harm to the person, unlike negligence, do not requireproof of actual injury. Compensatory damages may be recovered for the humiliation,indignity, and injury to feelings resulting from defendant's conduct. Where defendant'sconduct is outrageous, punitive damages are allowed in many states. Jurisdictions differ onwhether punitive damages are covered by a liability insurance policy. A majority ofjurisdictions allow assessment of punitive damages against an employer under respondeatsuperior for the outrageous conduct of its servant, even though the employer did not order orcondone the conduct; a minority of states, and the Restatement, disagree.

II. NEGLIGENCE

A. DUTY

The initial step in a negligence action is to establish the duty owed plaintiff by defendant.Duty may involve either: (1) a duty to act or (2) a duty not to act in a negligent or recklessmanner.


1. Duty To Act

a. No duty to act generally

Absent some special relationship between the parties, the law does not impose ageneral duty to render aid to another.

b. Creation of duty

Some special relationships upon which courts have imposed a duty to aid include:(a) employer-employee; (b) innkeeper-guest; (c) common carrier-passenger; (d)business invitor-invitee; (e) social invitor-invitee. A duty to act has also beenimposed upon the person in control of the instrumentality which has caused the harmor is causing the harm, even though there was no initial negligence on the part of theperson in control. Also, a person who has put into public distribution a product thatshe subsequently discovers is defective has a duty to warn.

c. Good Samaritan rule

If a person, having no duty to act, does undertake to act, he must exercise reasonablecare. This is sometimes called the "Good Samaritan Rule." Most states have enactedstatutes making the "Good Samaritan Rule" inapplicable to doctors and nurses whorender emergency treatment at the scene of an accident.

2. Unforeseeable Plaintiffs

An individual has a duty to avoid negligent conduct which runs not only to those personswhom the plaintiff can foresee will be harmed if she does not fulfill her duty but also tothose unforeseen plaintiffs who are within the scope of the risk of being harmed by herconduct. A further discussion of this issue is contained in the section dealing withproximate cause.

One who has acted negligently is liable not only to direct victims of her negligence, butalso to anyone who undertakes to rescue persons in peril from the defendant's negligence.A defendant who endangers only herself is also liable for her negligence to anyone whotries to rescue her from her own misconduct.

3. Obligations To Control The Conduct Of Third Parties

a. Owners of automobiles

The owner of an automobile is not generally liable for the negligence of anotherperson driving the automobile. Some states have, however, enacted statutes holdingthe owner liable up to a certain amount (consent statutes), on the theory that theowner is able to obtain liability insurance. Such statutes have been held to replace thefamily purpose doctrine. The owner of an automobile is not generally liable for thenegligence of the operator simply on the basis of the presence of the owner in theautomobile. Where, however, the owner is present in his automobile which is beingdriven in a negligent manner, he may be held for his own negligent failure to takesteps to prevent the automobile from being so operated.


b. Torts of infants

Infants are liable for their tortious conduct provided that they have the capacity tocommit the particular tort. Under the common law, parents are not vicariously liablefor the torts of their children. However, a parent may be liable for his or her ownnegligence in entrusting a child with a dangerous instrumentality which results ininjury to another, or where the parent is aware of the child's propensity for violentconduct and fails to take reasonable steps to discipline the child or warn potentialvictims.

B. STANDARD OF CARE

1. The Reasonable Prudent Person

a. The general objective standard

Absent some relationship between the parties, which may create a greater or lesserduty, a person owes others the duty of exercising reasonable care. The defendant'sconduct is measured by the objective standard of a reasonable person under thecircumstances. What is reasonable depends upon a great variety of factors. Basically,a comparison is made between the burden of avoiding the occurrence of harm withthe probability that harm will occur and the gravity of that type of harm if it doesoccur. The defendant is not excused simply because she did the best that she could,considering her knowledge, experience, and intelligence; she is held to have theknowledge, experience, and intelligence of a reasonable person.

b. Emergencies

An actor confronted with a sudden emergency will not be required to act as if he hadhad adequate time to weigh alternatives and decide on the most reasonable course ofaction. While an objective standard of reasonableness should still be applied in suchcases, the standard is one of a reasonable person under all the circumstances and theemergency will be considered as one of the circumstances.

c. Minors

This rule does not apply to children. A child's conduct will be measured by that of aperson of the child's age, knowledge, and experience. Where the child's activityinvolves the operation of an automobile, airplane, or powerboat, she will be held to anadult standard.

d. Physically and mentally impaired individuals

While the mental deficiencies of the adult defendant are not considered indetermining the reasonableness of his conduct, the physical infirmities of thedefendant are considered. Thus, the defendant is not responsible for a sudden,unforeseeable heart seizure that causes him to lose control of his automobile. On theother hand, if the defendant knows that he is subject to "spells" which render himunconscious, he is liable in negligence if, while driving, he becomes unconscious andloses control of the automobile.


e. Greater knowledge than ordinary reasonable person

A person who has greater intelligence, knowledge, or experience than the reasonableperson will be held to that higher standard.

1) Physicians

For years, the standard of care for a physician was whether her conduct measuredup to the standard of care and skill ordinarily possessed by others in herprofession practicing in the same community as the defendant. This has changedin recent years. Some courts use a "same or similar community" standard, whileothers have completely abandoned a community standard by holding thephysician to the standard of the average qualified practitioner nationwide.

2) Other professionals

Other professionals such as lawyers, architects, and engineers are measured by thecare and skill possessed by other members of their profession.

f. Automobile operator

In some states, the duty of the operator of a motor vehicle to his social guest in the caris something less than ordinary care; this is either by statute (guest statutes) orcommon law. Many courts have recently held that guest statutes are unconstitutionalas a denial of equal protection.

2. Rules Of Conduct Derived From Statutes And Custom

a. Violation of criminal statute

Jurisdictions differ on the effect to be given to defendant's violation of a criminalstatute. A majority hold that the unexcused violation of a criminal statute isnegligence per se; a minority hold that it is evidence of negligence. Even innegligence per se jurisdictions, the courts generally consider whether defendant'sconduct, although technically in violation of the criminal law, was neverthelessexcused. In any case, no effect will be given to the violation unless the harm toplaintiff was of the type that the statute was intended to prevent.

b. Rules of conduct derived from custom

Proof of a company safety rule and its violation by an employee is admissible asevidence of negligence. Proof of an industry-wide standard or custom is admissibleon the issue of the appropriate standard of care, but is not conclusive on that issue.Even though the defendant acted consistently with the standard of care currentlyapplied in the community, the defendant may be negligent because the communitystandard was set too low.

C. PROBLEMS RELATING TO PROOF OF FAULT INCLUDING RES IPSALOQUITUR

Defendant's breach of duty may be proven by circumstantial evidence (res ipso loquitur), ordirect evidence, which includes violation of a criminal statute.


1. Res Ipsa Loquitur

The doctrine of res ipsa loquitur permits the fact finder to find the defendant negligenteven though the plaintiff has produced no direct evidence of negligence. The plaintiff,however, must establish by circumstantial evidence that the greater likelihood is that theharm to the plaintiff resulted from defendant's negligence, rather than from some othercause. Plaintiffs evidence should warrant a finding that defendant at some time hadcontrol of the instrumentality which caused the harm, that the harm was such as does notordinarily occur in the absence of negligence, and that the harm was not the result of theconduct of plaintiff herself or of some person other than defendant. A res ipsa casemerely justifies an inference of negligence. Most jurisdictions permit res ipsa loquitur tobe used in medical malpractice cases, but in most instances it must be accompanied byexpert testimony.

2. Direct Evidence Of Negligence

Obviously, the plaintiff may establish the defendant's breach of duty by the introductionof direct evidence of negligence even apart from violations of criminal statutes. Themajor problems in this area are: (a) the need in some cases for expert testimony; (b) thesufficiency of the evidence to avoid a directed verdict; (c) the relevancy or materiality ofthe evidence on the issue of negligence.

a. Expert evidence on professional standards or custom in the trade

Expert testimony is necessary where plaintiffs claim of negligence involves a matterof such a nature that a jury cannot, on the basis of its own common knowledge andexperience, determine whether reasonable care has been exercised. While mostmedical malpractice cases require expert testimony, there are some instances wherelay persons are capable of determining negligence based upon common knowledgeand experience.

Evidence that defendant's conduct was consistent with the custom in the trade orcalling is merely evidence of due care; it does not establish due care.

b. Sufficiency of the evidence

The majority of negligence cases involve either a claimed defect or unsafe conditionin the premises owned or controlled by the defendant, or the claimed negligentoperation of an automobile by the defendant.

1) Defect in premises

With respect to premises, the mere existence of a slight defect (e.g., a slight ridgein a carpet) does not establish negligence, since the appropriate standard isgenerally reasonable care and not perfection. The issue is whether the defendant'sconduct has created an unreasonable risk of harm. Many factors are involved inthat determination, including expense. With respect to even ordinary defects, thedefendant is not an insurer. He is given a reasonable opportunity to discoverdefects and make repairs. With respect to foreign substances on a floor or step, itis incumbent upon the plaintiff to prove either that the defendant or his


employees had actual knowledge of the presence of the foreign substance andfailed to remove it, or that they had a reasonable time to discover the presenceof the foreign substance and remove it, and failed to do so. As mentionedpreviously, whether a defect or foreign substance is involved, there is no duty onthe defendant to warn the plaintiff of obvious conditions.

2) Operation of motor vehicle

With respect to the operation of a motor vehicle, the alleged negligent act may beone of many types: excessive speed, inattention, mechanical defects, etc. Themere fact that the defendant's automobile struck the plaintiff or the plaintiff'sautomobile does not of itself establish negligence. While intoxication may beevidence of negligence, it does not generally ipso facto establish negligence, inthe absence of a showing of some unreasonable conduct in the driving of themotor vehicle. An owner is not an insurer that her vehicle is in safe mechanicalcondition. She is required to exercise ordinary care to keep her vehicle in areasonably safe condition.

D. PROBLEMS RELATING TO CAUSATION

An essential element of plaintiff's negligence action is that defendant's negligent act causedplaintiff's injury. This is referred to as actual or factual cause. Sometimes, particularly inmedical malpractice cases, expert testimony is needed to show actual cause. Such experttestimony must indicate a probability (and not merely a possibility) that defendant'snegligence resulted in plaintiff's harm.

1. "But For" Test

Except in some cases involving joint tortfeasors, defendant's conduct cannot beconsidered the cause of plaintiff's harm if such harm would have occurred even had thedefendant not so acted. The question is not, however, whether a like harm or similarharm would have occurred without defendant's negligent act, but whether the same harmwould have occurred.

2. Substantial Factor Test

In most cases involving joint tortfeasors, plaintiff's injury is the result of the combinednegligent acts of two or more tortfeasors, and the harm would not have resulted fromeither act standing alone. Occasionally, however, there are situations where either actalone would have caused the harm. While the "but for" rule of actual causation does notliterally apply in these latter situations, the courts treat each defendant's act as the causeof plaintiff's harm, despite the fact that the harm would have occurred anyway (i.e., fromthe other defendant's act).

3. Harms Traceable To Multiple Causes

a. Concurrent causes

Where the plaintiff is injured from the negligent act of co-defendants who shared acommon duty toward the plaintiff or acted in concert with each other, the "but for"test can usually be readily applied to make the defendants jointly and severally liable


for the full amount of the plaintiffs damages. Occasionally, however, the plaintiffsharm may result from two independent acts or events, either alone being insufficientto cause the plaintiffs harm. The courts have taken the position that where thedefendant's negligent act unites with another event, the defendant's negligence willbe considered the cause of at least part of the harm. If the other human agent isanother negligent defendant, the defendants will be held jointly and severally liable.

Also, where two defendants have acted negligently, although independently, but dueto the circumstances it is impossible to determine which defendant caused theplaintiffs injury (as where two defendants fire shotguns in the general direction of theplaintiff but only one hit the plaintiff), the courts have treated the defendants as jointtortfeasors, even though in actuality only one of the defendants has caused theplaintiffs injury.

b. Indivisible injury caused by multiple defendants

Occasionally, two or more defendants commit negligent acts, each probably causinginjury to the plaintiff, but it is impossible under the circumstances for the plaintiff toshow which of his injuries were caused by each defendant. Where the triers of factcannot ascertain the amount of damage each wrongdoer has inflicted, they areauthorized to hold all of the wrongdoers liable for all of the plaintiffs injuries (i.e.,joint and several liability), on the ground that each has participated in the infliction ofa single indivisible injury.

4. Apportionment Between Multiple Defendants

Sometimes the negligent acts of two or more defendants cause separate injuries toplaintiff, but it is impossible under the circumstances to show which injuries were causedby each defendant. Most courts, in this situation, will hold the defendants jointly andseverally liable for all the injuries. A few states hold that the court should instruct thejury to make a rough apportionment, or, if such apportionment is not possible, the juryshould apportion the damages equally among the defendants.

E. LIMITATIONS ON LIABILITY AND SPECIAL RULES OF LIABILITY

1. Proximate Cause

Courts are less likely to apply the rules of proximate cause strictly in cases of intentionaltorts, rather than negligence. The area of proximate cause may be divided into twocategories: (1) harm within the risk, and (2) persons within the risk.

a. Harm within the risk

Plaintiff must prove that she suffered personal injury or tangible property damage as alegal result of the defendant's action.

1) Foreseeability

A majority of courts hold that a defendant is liable only for the foreseeable harmthat results from his conduct. However, the defendant can be held liable for evenunusual harm if some harm was foreseeable.


2) Sequential harm and intervening acts

Some courts adopt the view that a defendant is liable for all of the harm whichfollows in unbroken sequence from her negligent act. Thus, the most commonproximate cause problem is whether the intervening negligence of a third party,which combines with the negligence of defendant to cause plaintiffs injury, willlegally break the chain of proximate cause. In a foreseeability jurisdiction, thedefendant will be held liable for the entire harm (usually jointly and severally withthe second actor) if the conduct of the second actor was reasonably foreseeable.The conduct of the second actor may be reasonably foreseeable in somecircumstances even though it is intentional; in fact, even criminal conduct may,under some circumstances, be foreseeable. In a jurisdiction holding defendantliable for the direct unbroken consequences of her act, defendant is liable eventhough the second actor's act was not foreseeable, as long as it was not of such anature as to take over as the efficient cause of the harm.

b. Persons within the risk

1) Foreseeable plaintiff — the Palsgraf case

The two views of proximate cause from the concept of persons within the risk areset out in the Palsgraf case. In Palsgraf the majority held that defendant is liableto plaintiff only if plaintiff was a person to whom harm was reasonablyforeseeable when defendant acted; the act must have created an unreasonable riskof harm to plaintiff. The dissenting opinion held that a person should be entitledto recover if in fact injured by defendant's negligent act, even though defendant'sact initially created no reasonable risk of harm to plaintiff The only restriction onliability is that the harm may not be too remote in time or space, or limited bypublic policy considerations.

2) Rescue doctrine

A person who negligently places another in a position of danger is liable to a thirdperson who comes to the aid of the victim and is injured in so doing, unless theattempted rescue was foolhardy. Assumption of risk is no defense. This issometimes referred to as the rescue doctrine. It also applies where defendantnegligently places himself in a position of danger, and plaintiff is injured whileattempting a rescue.

2. Claims Against Owners And Occupiers Of Land

a. By business invitees

The duty of a business invitor to an invitee is ordinary care to keep the premises in areasonably safe condition; this includes the duty to make reasonable inspections. Theduty extends also to one accompanying a business invitee. There is a difference ofjudicial opinion whether one entering a business establishment for a purpose otherthan one financially benefiting the owner (e.g., to make a telephone call or to get outof the rain) is a business invitee or a mere licensee, but the Restatement does notrequire a business purpose for an invitee.


The duty of ordinary care owed to a business invitee does not apply when the plaintiffgoes into areas of the premises to which the invitation did not extend. The duty ofordinary care to a business invitee extends to using reasonable care to prevent injuryto the invitee by the acts of third persons.

While a few recent cases hold to the contrary, most jurisdictions treat police andfirefighters as licensees rather than invitees. Some states hold that they are inviteeswhen they come on the property under the same circumstances as other members ofthe public and to a part of the premises that is normally open to the public.

b. By social guests and licensees

Most states hold that the duty owed to a social guest or licensee does not require thelandowner to make reasonable inspections of the premises; she is only required tomake safe those unsafe conditions known to her, or to warn the social guest orlicensee of such conditions. A few states have recently abolished all distinctionsamong business invitees, social guests, and licensees, holding the owner to a duty ofreasonable care to all.

Most states hold that with respect to active conduct (as opposed to the condition ofthe premises), the duty of the landowners to social guests and licensees is ordinarycare.

c. By trespassers

The duty of a landowner to a trespasser is, in most jurisdictions, to avoid either grossnegligence or willful and wanton conduct. Exceptions to this rule include infanttrespassers (sometimes referred to as the "attractive nuisance doctrine") and technicaltrespassers. Also, the landowner owes a duty of ordinary care with regard to activeconduct toward discovered trespassers.

3. Claims For Mental Distress Not Arising From Physical Harm; Other IntangibleInjuries

a. Negligent infliction of emotional distress

Most jurisdictions allow recovery for severe mental distress negligently inflicted, andfor any physical harm resulting from such mental distress despite the absence of anyphysical impact, provided plaintiff was within the zone of physical danger fromdefendant's negligence, and was thus fearful for his or her own safety. Manyjurisdictions also allow recovery for mental distress resulting from witnessing injuryto a close relative (e.g., a child).

b. Prenatal injuries

Most jurisdictions allow recovery for prenatal injuries whether or not resulting indeath, provided that the fetus is born alive. There is a split of authority whether awrongful death action is allowed when the fetus is stillborn. A majority of statesallow recovery provided the injury took place when the fetus was viable (capable ofliving apart from its mother — approximately 24 weeks).


c. Wrongful death

1) Damages — standard for liability

In almost all states, recovery for wrongful death is statutory, recovery at commonlaw having been denied. While a few states base recovery on the loss to thedecedent's estate, most base and measure damages on the loss to survivors forsuch elements as loss of support, loss of services and companionship, and, in thecase of a spouse, loss of consortium. The standard for liability in wrongful deathis generally derivative; that is, recovery may be had if the decedent, had hesurvived, could have recovered damages for his injury. Therefore, substantivedefenses which would have been available against the decedent are available inthe death action. Also, the contributory negligence of the survivor-plaintiff(s) willpreclude recovery.

2) Survival statutes

Unlike the death statute, under which recovery is had for the decedent's death,survival statutes preserve certain claims which decedent had at the time of herdeath. Thus, where decedent's death resulting from defendant's negligence is notinstantaneous, recovery for such elements as pain and suffering and medicalexpenses are recoverable under a survival statute for the benefit of the estate,whereas generally, recovery for decedent's death under the death statute goesdirectly to the survivors.

4. Claims For Pure Economic Loss

While a person may be liable in negligence for injury to the plaintiffs person or physicalproperty, it is generally held that, except for wrongful death actions, proximate causedoes not extend to economic harm suffered by the plaintiff as a result of injury toanother individual's person or property. Thus, an employer may not normally recoverin negligence for injury to an employee. Nor may a person recover in negligence for lostwages against a defendant who negligently burned down the plaintiffs place ofemployment. Nor may an insurance company recover in negligence the amount which ithad paid out on a life insurance policy against the defendant who had negligently causedthe death of the insured. In all these situations, however, if the plaintiff could establishthat the defendant acted with the intent to injure the plaintiff, recovery may be had on atheory of intentional interference with contractual or advantageous relations.

F. LIABILITY FOR THE ACTS OF OTHERS

1. Joint Liability

a. Concurrent negligent acts

If two or more defendants, by their concurrent negligent acts, bring about harm to theplaintiff, and it is not possible to separate the portions of the harm resulting from eachact, the defendants may be held jointly liable. The effect of joint liability is that eachdefendant is liable for the entire harm, although obviously plaintiff can collect onlyup to the amount of the judgment. If a joint tortfeasor pays more than his pro rata


share of the judgment, he has the right of contribution against the other jointtortfeasor. In most jurisdictions, proration is determined by the number of jointtortfeasors involved, and not upon relative degrees of fault.

b. Contribution and indemnification

Contribution should be distinguished from indemnification. Contribution involvesthe sharing of the financial burden among joint tortfeasors. Indemnification involvesrecovery by a nonwrongdoer who has incurred a judgment against the actualwrongdoer or the one responsible for the harm. It seeks the full amount of thejudgment rather than a part of it. For example, under respondeat superior a mastermay obtain indemnification from the negligent servant.

2. Vicarious Liability

Vicarious liability is based upon a relationship between the defendant and the onecommitting the tort, as, for example, a master's liability for the tort of her servant. Thereis no vicarious liability on the part of a parent for the tort of a child, nor is there vicariousliability on one spouse for the tort of the other.

3. Master-Servant Relationship

A master is liable for the tort of his servant if the tort occurred while the servant wasacting within the scope of his authority. Except where the activity is inherentlydangerous, an employer is not liable for the tort of an independent contractor. The test ofa master-servant relationship is whether the employee is subject to the employer's right tocontrol the details of the work performed. It is not necessary to prove that defendant paidthe employee to perform the services in order to establish a master-servant relationship.Under the borrowed servant rule, the defendant may be responsible for the servant's tortwhere defendant controlled the servant in carrying out the work, even though the servantwas paid by a third person. The liability of a master for the servant's torts underrespondeat superior includes intentional torts, even where expressly prohibited by themaster, where the intentional tort was committed by the servant while advancing themaster's business. A master is not liable for a servant's tort where the tort occurred whilethe servant had substantially deviated from his authorized route. Where the detour isslight, that is, reasonably foreseen by the master, the master is liable. General partnersand persons engaged in a joint enterprise for profit are vicariously liable for the tortscommitted by each other in conducting the business. The rule does not generally apply tojoint enterprises of a noncommercial nature (i.e., social).

G. DEFENSES TO NEGLIGENCE ACTIONS

1. Contributory Fault

a. Contributory negligence

The defense of contributory negligence means that plaintiffs own negligencecontributed proximately to her injury. While most jurisdictions have adopted rules ofcomparative negligence, contributory negligence still operates as a complete defensein some jurisdictions.


b. Last clear chance doctrine

The Last Clear Chance Doctrine was designed to mitigate the harshness of thedefense of contributory negligence as a complete bar to recovery. Thus, most stateswhich adopted comparative negligence have abolished the Last Clear ChanceDoctrine. Under the Last Clear Chance Doctrine, plaintiff, even though guilty ofcontributory negligence, could recover provided: (1) plaintiff was in a position ofperil; (2) defendant was aware of plaintiffs position of peril and of plaintiffsinability to extricate himself; and (3) defendant could then have prevented the harmby the exercise of ordinary care.

c. Comparative negligence

Most states which have adopted comparative negligence have done so by statute.Several states have recently adopted comparative negligence as a matter of commonlaw. Under comparative negligence, plaintiff may recover damages even thoughguilty of contributory negligence, but damages are reduced by the percentage ofplaintiffs negligence. In states having pure comparative negligence, plaintiff maystill recover a percentage of her damages even though her negligence exceedsdefendant's. In a majority of states which have adopted a modified comparativenegligence, plaintiff will not recover if her negligence exceeds defendant's.

2. Assumption Of The Risk

The defense of assumption of risk requires proof that plaintiff knowingly entered into, orstayed in, a position of danger. The defense applies irrespective of the reasonableness ofplaintiffs conduct. This defense is being abolished in some states, particularly in thejurisdictions which have adopted comparative negligence.

3. Imputed Negligence

The general rule is that the negligence of one party cannot be attributed to another. Thus,the contributory negligence of a driver cannot be raised by a negligent third party to baran action by a passenger in the driver's car. Likewise, the negligent supervision ofparents will not act to bar a suit by their child to recover for harm resulting from thenegligence of a third party, and the negligence of the plaintiffs spouse will not defeat theplaintiffs cause of action against a third party. The exceptions to this rule are that thenegligence of the deceased will bar (or reduce) a wrongful death recovery by thedecedent's estate and the negligence of the spouse will bar or reduce a claim for loss ofconsortium.

4. Immunity

Immunity is also a defense that may be raised in a negligence action as well as an actionfor intentional tort.


H. DAMAGES IN NEGLIGENCE ACTIONS

1. Damages Recoverable

In a personal injury action, plaintiff may recover for: (1) diminution of earning capacity,past and future; (2) medical expenses, past and future; and (3) pain and suffering, past andfuture. Most states also allow recovery for loss of consortium for injury to either thehusband or wife.

2. Collateral Source Rule

In most states, amounts received by injured plaintiffs under medical insurance plans orwage compensation plans are not deducted from damages recovered for medical expensesor impairment of earning capacity; this is referred to as the collateral source rule.

III. STRICT LIABILITY

A. ABNORMALLY DANGEROUS

Most jurisdictions allow recovery on a strict liability theory for harm resulting fromabnormally dangerous activities. Conduct is abnormally dangerous if it: (1) necessarilyinvolves a risk of serious harm to the person, land, or chattels of others which cannot beeliminated by the exercise of utmost care and (2) is not a matter of common usage.

B. THE RULE OF RYLANDS V. FLETCHER

In Rylands v. Fletcher, Justice Blackburn stated that "the person who for his own purposesbrings on his land and collects and keeps there anything likely to do mischief if it escapes,must keep it in at his peril, and if he does not do so, is prima facie answerable for all thedamage which is the natural consequence of its escape." The rule was modified by the Houseof Lords, which confined the doctrine to non-natural uses of the land, i.e., activity that is notordinary or appropriate for its locality.

C. KEEPING ANIMALS

1. Trespassing Animals

Apart from statute, owners are strictly liable for harm done by animals trespassing off theowner's land only if the animals constitute livestock or wild animals. However, somestates by statute also make the owners of domestic pets liable for harm done bytrespassing animals.

2. Personal Injury Caused By Wild Animals Or Domestic Animals

Apart from the trespassing situation, under the common law, strict liability applies onlyto harm done by wild animals kept by the defendant. Negligence is required to imposeliability on the owner of livestock or a domestic pet unless the owner knew or had reasonto know of the animal's dangerous propensities; in that event, strict liability is imposed.By statute, some states impose strict liability on the owner of a dog for harm done by thedog, unless the victim was committing a trespass or other tort.


IV. PRODUCTS LIABILITY

A. NEGLIGENCE

Sellers of products, like anyone else, can be held liable for injuries caused by their failure toexercise due care. A breach of this duty can be found in any one of the followingcircumstances.

A defendant can be liable under a negligence products liability theory when his failure toexercise due care causes a product to differ from its intended design and this differencecauses the product to be more dangerous than others of its type. This type of negligence mayresult from carelessness in manufacturing (as when a product is improperly assembled) orfrom a mishandling of the product (as when it is dropped or improperly exposed to theelements).

Negligence may be found, even if a product meets the specifications of its designer, if thedesign unreasonably fails to protect potential plaintiffs from harm. This so-called"negligence in design" requires a careful consideration of whether the defendant could havereasonably foreseen the danger, the extent to which the technology in existence at the time ofits manufacture could minimize the risks, and the degree to which the consumer could bereasonably expected to appreciate and protect himself from harm.

A product might be suitable for its intended purpose when used properly, but unreasonablydangerous if it is handled differently. In such a case, a defendant can be liable in negligenceif he fails to provide adequate instructions or warnings with regard to foreseeable uses towhich the product may be put.

Any seller who is physically responsible for the product's dangerous condition can be liableunder a negligence theory. In addition, sellers further down the chain of distribution can beliable if a reasonable inspection would have revealed a product's dangers and theyunreasonably failed to protect possible plaintiffs from such dangers.

The question whether a wholesaler or retailer should inspect goods at all, and the kind ofinspection that is appropriate, is determined by ordinary concepts of reasonableness andforeseeability. Factors which would weigh in the balance include: (a) the potentialdangerousness of the product, (b) any safety history with regard to the product orpredecessors in possession, (c) the presence of any physical evidence of danger (as when theproduct arrived in a damaged container), and (d) the practical ability of the defendant toinspect the product (including costs).

B. STRICT LIABILITYAll jurisdictions today recognize the liability of a manufacturer for negligence, despite theabsence of privity between the manufacturer and the consumer. Most jurisdictions alsorecognize the liability of a manufacturer, seller, or supplier for a defective product withoutany showing of fault and despite the absence of privity. Liability is based upon either awarranty theory or a theory of strict liability in tort. A supplier may be strictly liable, eventhough selling such product is not its principal business (e.g., sale of popcorn at a movie


theatre); however, a person who is an occasional seller (e.g., sale of automobile by privateperson to used car dealer) is not strictly liable.

Manufacturers are strictly liable for defective component parts which are supplied by othersbut assembled into the final product. Further, they are liable for a final defective product,even when they rely upon a third person (e.g., a dealer) to complete assembly, and the thirdperson causes the product to be defective. Whether the defect was discoverable by areasonable inspection is irrelevant under strict liability.

Strict liability does not apply to services; negligence must be proved. In hybrid (service-product combination) situations, strict liability may apply to harm caused by the product.

1. Individuals Protected

Consumers as well as users (e.g., passengers in an automobile) are protected by the strictliability rule. Further, the majority rule allows recovery even by a bystander injured bythe product. Misuse of a product does not bar strict liability where the misuse wasforeseeable. Obviousness of the defect is not a defense in defective design cases. Therescue doctrine applies in strict liability cases.

2. When Strict Liability Is Applicable

a. Defective manufacture or design

Strict liability has been applied to so-called "defective design" cases as well as tomanufacturing defects. Most cases involve automobiles where plaintiff claims thatsevere injury from a collision could have been avoided by a safer design. These areoften referred to as "second collision" cases.

b. Unavoidably unsafe products

Unavoidably unsafe products, products which in the present state of humanknowledge are incapable of being made safe for their intended and ordinary use, arejustified by the need for the product. Such a product is not defective, norunreasonably dangerous, if properly prepared and accompanied by proper directionsand warnings.

c. Failure to warn

Strict liability has also been applied where, even though the product was notdefective, defendant failed to warn consumers adequately of its dangerouscharacteristics (e.g., child killed by drinking furniture polish).

3. Defenses

Usually, neither contributory negligence nor assumption of the risk alone constitutes adefense to the manufacturer's or seller's liability based upon either warranty or strictliability. Where, however, plaintiff, with knowledge of the defective product,unreasonably continues to use the product, the defense of unreasonable assumption ofrisk is available to defendant. A few jurisdictions have used plaintiff's contributorynegligence to diminish her damage recovery in a strict liability suit even where there wasno assumption of the risk.


C. MISREPRESENTATION AND WARRANTY THEORIES

Several potential products liability theories are based upon express or implied assertionsconcerning the nature and quality of a seller's goods.

1. Misrepresentation Under Restatement §402B

Under §402B of the Restatement (Second) of Torts, a commercial seller's publicmisrepresentation of material fact concerning the character or quality of a productis actionable if the plaintiff is injured thereby.

2. Warranties Under The Uniform Commercial Code

a. Express warranty under U.C.C. §2-313

Section 2-313 of the Uniform Commercial Code imposes liability for injuriesresulting from a breach of express warranty. Insofar as its applicability to tortsquestions is concerned, an express warranty claim is essentially the same as an actionunder §402B except that: (1) liability can be imposed on any seller (not just oncommercial suppliers), (2) the warranty need not be made to the public at large, (3)specific reliance on the warranty is not required so long as it was "part of the basis ofthe bargain," and (4) the plaintiff must fall within the class of people protected by therelevant state's version of §2-313.

b. Implied warranty of merchantability under U.C.C. §2-314

Under U.C.C. §2-314, every commercial seller warrants that the goods he sells are of"fair average quality within the description" and "fit for the ordinary purposes forwhich such goods are used" unless this implied warranty of merchantability isclearly disclaimed or modified. The privity notice, and defense issues with regard tothis action, are the same as those relating to express warranty as discussed above.

c. Implied warranty of fitness for a particular purpose under U.C.C. §2-315

When a seller has reason to know of the buyer's particular purpose for certain goodsand that the buyer is relying on the seller's skill or judgment to select a productappropriate for such needs, the seller impliedly warrants that the goods are fit for thatuse. This implied warranty of fitness for a particular purpose applies whether ornot made by a commercial distributor.

V. OTHER TORTS

A. NUISANCE

1. Interference With Use And Enjoyment

The action for nuisance protects the plaintiff from interference with the use andenjoyment of her property. Traditionally, it involves such interferences as noise,excessive light, odors, fumes, smoke, etc. The plaintiff may sustain the nuisance actionby showing that the defendant substantially interfered with the plaintiff's use andenjoyment of her property, and that such interference was unreasonable, even if thedefendant's conduct was not negligent or intentional.


2. Reasonableness Of Conduct

Whether defendant's conduct is reasonable or unreasonable involves the balancing ofthree considerations: (1) the locality and character of the surrounding area; (2) the nature,extent, and frequency of the interference; and (3) the utility and social value of theactivity involved.

3. Relief

The court in a nuisance action may grant damages and/or injunctive relief. Whereplaintiffs harm is insignificant when contrasted with the potential harm to defendant ifinjunctive relief is granted, the court may treat the nuisance as permanent, and awardplaintiff damages for the diminution in the value of his property.

4. Public Nuisance

Recovery for personal injury resulting from a nuisance may be had whether the nuisanceis private or public. If the nuisance is public, plaintiffs injury must be of a different kindthan that of the general public.

B. CLAIMS BASED UPON DEFAMATION AND INVASION OF PRIVACY

1. Defamation

a. Elements

The elements of an action for defamation are: (1) defendant published a falsecommunication of fact concerning the plaintiff which held plaintiff up to scorn andridicule in the eyes of a respectable minority in the community; (2) the defamatorymatter was communicated to at least one person other than plaintiff herself, and itsdefamatory meaning was understood by the third person; and (3) if the defamation isslander (oral), and does not fall into one of the four categories of slander per se,special damages must be proven. Proof of special damages requires a showing that,as a result of the slander, someone denied plaintiff an existing or prospective benefit,as for example, the loss of a job.

b. Fault requirements; damages

Under the First and Fourteenth Amendments to the United States Constitution,statements concerning public officials and public figures are not actionable unlessthere is clear and convincing evidence that defendant knew the statement was false, ormade the statement with reckless disregard for its truth or falsity. A person may be apublic figure generally or a public figure solely with respect to the matter involved inthe publication. A private person may recover upon a state-imposed standard, but noton a strict liability standard. Usually the state-imposed standard will be negligence.If plaintiff establishes liability on the basis of a standard less than knowledge offalsity or recklessness, plaintiff may recover actual damages and presumed damages,but no punitive damages will be allowed. Pretrial discovery into the thoughts andeditorial processes of the alleged defamer is allowed to enable the plaintiff to provemalice.


c. Defense

Falsity is an element of the plaintiff's case, but truth is still an absolute defense. Theother primary defense in an action for defamation is privilege, which, depending uponthe importance of the policy advanced by the privilege, is either absolute orconditional. An absolute privilege protects the person making the defamatorystatement, even where that person acts maliciously. A conditional privilege protectsonly the nonmalicious publisher of defamatory matter.

2. Invasion Of Privacy

a. Categories

There are four categories of the tort of invasion of privacy: (1) intrusion upon theplaintiff's physical solitude — for example, placing a listening device in his home —this category does not require a publication of the matter to sustain recovery; (2)publication of matters concerning plaintiff which violate common decencies —recovery under this category is extremely difficult unless the matter published is notnewsworthy; (3) publication of matters which, while not necessarily defamatory,place plaintiff in a false light in a way which would be highly offensive to areasonable person; and (4) appropriation of some element of plaintiff's personality forcommercial purposes, as for example the unauthorized use of the picture of a famousathlete on defendant's product.

b. Constitutional considerations

The constitutional considerations with regard to fault requirements for mediadefendants set out by the United States Supreme Court in the defamation area applyalso in the area of invasion of privacy.

C. CLAIMS BASED UPON MISREPRESENTATIONS

1. Deceit

The elements of an action for deceit are:

• the defendant made a misrepresentation of an existing fact;

• with intent to induce reliance from plaintiff or from a class of which plaintiff is amember;

• with knowledge of falsity or with reckless disregard for truth or falsity (referred to asscienter), or in some cases, the legal equivalent of scienter;

• the misrepresentation was of a material nature; and

• plaintiff relied upon the misrepresentation to his or her detriment.

a. Misrepresentation

While the misrepresentation is usually of an objective fact, it may involve amisrepresented intention or opinion since there the existing fact is the speaker's stateof mind. A broken promise, standing alone, is not a misrepresented intention; fraud atthe time of the statement of intent must be shown. A misrepresentation may be


established by showing defendant's silence when there was a duty to speak, as forexample where the seller of property fails to disclose a dangerous, concealed defectwhich the buyer could not have discovered by a reasonable inspection.

b. Knowledge of falsity

Scienter (knowledge of falsity or recklessness) was an essential element of the deceitaction at common law. Today, however, some jurisdictions allow plaintiff to recoverat least out-of-pocket damages where the defendant made an unqualified assertion offact as to her own knowledge concerning a matter which was susceptible of exactknowledge.

c. Reasonableness of belief

Most jurisdictions today do not deny recovery for deceit on the basis that plaintiffwas unreasonable in believing defendant's misrepresentations. A distinction,however, still exists between misrepresentations of fact and so-called "seller's talk."The reliance must be at least justifiable.

d. Damages

Damages in deceit may be either "benefit-of-the-bargain" damages or "out-of-pocket"damages. Most jurisdictions, where defendant's conduct was intentional or reckless,allow plaintiff to recover "benefit-of-the-bargain" damages; that is, the differencebetween what plaintiff received and what he would have received if the representationhad been true, provided such damages can be proved with reasonable certainty.Otherwise, plaintiff may only recover "out-of-pocket" damages; that is, the differencebetween the value of what the plaintiff gave up and what he received.

2. Negligent Misrepresentation

An action for negligent misrepresentation will lie against a defendant who, in theperformance of her trade or profession, negligently provides erroneous information whichis used by the plaintiff to his or her detriment despite the absence of privity betweenplaintiff and defendant, provided that such liability would not expose the defendant to anunlimited liability to an indeterminate number of persons. Generally, a defendant will beheld liable despite lack of privity only if the defendant knew that the plaintiff would belikely to rely on the representation.

D. CLAIMS BASED UPON INTENTIONAL INTERFERENCE WITHBUSINESS RELATIONS

1. Interference With Contractual Relations

a. Elements

The elements of the action for interference with contractual relations are: (1) plaintiffhad an existing contract with a third person; (2) defendant knew of the contract; and(3) defendant intentionally interfered with the contract. While occasionally adefendant's conduct may be privileged, business competition does not justify


intentional interference with contractual relations, although some courts holdotherwise where the contract was terminable at will.

b. Distinguish — procuring refusal to contract

The action for intentional interference with existing contractual relations should bedistinguished from the tort of procuring a person's refusal to contract with plaintiffwhich may, unless the means used are unlawful, be justified on the basis of businesscompetition.

2. Interference With Advantageous Relations

A defendant may be liable in tort for intentionally interfering with a prospective benefit toplaintiff; for example, interfering with the making of a will in which plaintiff was to benamed as a beneficiary.

E. CLAIMS BASED UPON MALICIOUS PROSECUTION

1. Elements

The elements of an action for malicious prosecution are: (1) defendant procured theinitiation of criminal proceedings against plaintiff; (2) defendant did not have probablecause to procure such proceedings; (3) defendant acted with malice; and (4) plaintiffreceived a favorable termination in the proceedings. Arrest of the plaintiff is not anecessary element of the tort. While malice may be inferred from lack of probable cause,lack of probable cause cannot be inferred from malice.

2. Application To Civil Proceedings

Some jurisdictions recognize the action for malicious prosecution in the civil sense, as,for example, the unwarranted initiation of bankruptcy proceedings. The elements of lackof probable cause, malice, and favorable termination are still present.

VI. IMPACT OF INSURANCE, WORKERS' COMPENSATION, AND"NO-FAULT" SYSTEMS

A. AREAS AFFECTED BY INSURANCE

Insurance, particularly liability insurance, has played a significant role in recent decades inthe development of tort law. Particularly affected are: (1) the extension of vicarious liability;(2) extension of strict liability for defective products; (3) abolition of various immunitydoctrines; (4) development of Workers' Compensation plans; and (5) development of no-fault systems.

B. TYPES OF INSURANCE

There are basically two types of insurance:

(1) First-party insurance, which pays the insured or designated persons (usually theinsured's family) for their loss. It is not based upon liability. Medical insurance is atypical form of first-party insurance.


(2) Third-party insurance, in which the insurer pays a third person to whom the insured hasbecome liable; it is liability insurance.

C. WORKERS' COMPENSATION SYSTEMS

Under Workers' Compensation, an injured employee recovers medical expenses and apercentage of lost wages without having to prove fault and even if the employee himself wasguilty of contributory negligence. However, the employer is immune from any liability intort for having caused the employee's injury.

D. "NO-FAULT" SYSTEMS

Under no-fault a person injured due to an accident arising from the use of an automobile (i.e.,operator, passenger, pedestrian) may recover medical expenses and a percentage of lostwages (up to some prescribed maximum amount) without proving negligence, even thoughthe victim was guilty of contributory negligence. The owner or operator of the vehicle isimmune from liability up to the prescribed amount. Beyond that, the owner or operator maybe liable in tort.



TORTS

I. INTENTIONAL TORTS

A. HARMS TO THE PERSON

1. ASSAULT

■ Intent to cause apprehension of contact is all that is required for the tort ofassault. Contact or intent to actually contact is not required.

■ Words alone are not enough unless accompanied by an ability and intent toact.

■ There is a privilege to use any assault or reasonable battery in self-defense,defense of others, and to eject trespassers. These privileges exist as long asthe actor reasonably believed the circumstances called for the conduct, evenif there was a mistake.

2. BATTERY

■ To recover from battery, the plaintiff must show (1) an intentional and (2)unconsented (3) harmful or offensive (4) touching. No actual harm isrequired, though.

■ There is a privilege to use any assault or reasonable battery in self-defense,defense of others, and to eject trespassers. These privileges exist as long asthe actor reasonably believed the circumstances called for the conduct, evenif there was a mistake.

3. FALSE IMPRISONMENT

■ The plaintiff need not resist confinement to have an action for falseimprisonment.

■ The imprisonment must be (1) intentional and (2) without consent to beactionable.

■ A shopkeeper has a privilege to reasonably detain someone reasonablysuspected of shoplifting.

■ The plaintiff must have been aware of the confinement.

2 MicroMash MBE In Brief: Torts Bar Exam Alerts

■ Any reasonable exit or alternate route from confinement defeats the cause ofaction.

■ Only a wrongful arrest constitutes false imprisonment. The fact that theplaintiff did not actually commit the crime does not automatically give rise toa cause of action.

4. INTENTIONAL INFLICTION OF MENTAL DISTRESS

■ The defendant's conduct must be extreme and outrageous such that it wouldbe substantially certain to cause severe emotional distress in a person ofnormal sensitivities. However, the defendant can also be held liable if sheknows of the victim's peculiar sensitivities.

■ Bystanders can recover for emotional distress resulting from an intentionaltort to a family member only if the defendant knew the bystander was awitness.

B. HARMS TO PROPERTY

1. TRESPASS TO LAND

■ Force need not be used to gain entry, but consent (even implied consent) willdefeat the trespass to land cause of action.

■ There is a privilege to trespass in emergency situations and to protect one'sown property, but the trespasser must pay for any damage done by thetrespass.

2. TRESPASS TO CHATTELS; CONVERSION

■ Both trespass to chattels and conversion require an intentional interferencewith the personal property of another. However, like trespass to land, thedefendant need not know that the trespass was wrongful for it to beactionable. The defendant need only intend to commit the act thatconstitutes the trespass.

■ Only a substantial interference with personal property can be the basis for anaction of conversion. If the defendant has substantially damaged or lost thepersonal property or if the defendant refuses to return it after demand hasbeen made, the plaintiff can bring an action for conversion to recover thevalue of the personal property at the time that the defendant first asserteddominion over it. Any lesser interference with personal property is only thebasis for a trespass to chattels action to recover damages for the harm doneto the chattel and the plaintiff's lost use of the chattel.

MicroMash MBE In Brief: Tort Bar Exam Alerts 3

II. NEGLIGENCE

A. DUTY

■ Generally, one has a duty to act reasonably, but one usually does not have aduty to rescue someone from a danger that he or she did not create. Only thecreator of the peril or a close family member (usually a parent) has any duty torescue someone in danger.

■ Once one undertakes to rescue, though, one has a duty to act with reasonablecare. This is called the Good Samaritan doctrine.

B. RES IPSA LOQUITUR

■ The plaintiff can prevail without direct proof of the defendant's negligence if shecan prove (or the circumstances alone indicate) that she would not have beenharmed if the defendant had not been negligent. The plaintiff need only showthat it is more likely than not that the defendant was negligent (and that there isa causal connection to the plaintiff's harm).

■ Res ipsa loquitur is irrelevant if there is direct evidence that the defendant wasnegligent.

■ The defendant can defeat a res ipsa loquiturcase against her by showing that itis just as likely that someone else's negligence caused the plaintiff's harm.

C. CAUSATION

■ The test of factual causation is "but for," i.e., the plaintiff's harm would not haveoccurred if not for the defendant's negligence.

■ The chain of causation is broken by a superseding intervening cause. However,the defendant is liable for any harm which would have occurred if not for thesuperseding cause.

■ A foreseeable intervening cause is not superseding. An unlawful or negligent actmay be foreseeable.

■ Once a plaintiff has recuperated from an injury by the defendant, the defendantis not liable for subsequent injuries just because they would not have happenedif not for the plaintiff's weakened condition from the first injury.

■ Even if there is factual causation, there must be proximate cause (i.e., theplaintiff's harm must not be too remote). A cause cannot be the "proximate"cause unless it is also the factual cause.

D. CONTRIBUTION

■ Where two or more independent defendants are responsible for the plaintiff'sharm, each is generally ultimately liable only for the part of plaintiff's harm forwhich he is responsible. However, the plaintiff can recover all of his damages


from the defendants if their combined negligence causes more harm than theiractions alone would have caused (or even if, alone, their actions would not havecaused any harm).

■ Contribution is available between joint tortfeasors no matter what the relativedegrees of fault. Contribution allows a defendant who was held liable to recovera pro rata share of her liability from her joint tortfeasors.

• A negligent defendant is only entitled to contribution (not completeindemnification) from a joint tortfeasor.

E. CLAIMS AGAINST OWNERS OF LAND

■ At common law, a business invitee was owed a duty of reasonable care. Alicensee (social guest) was only owed a duty to warn of dangers known to theowner or occupant but not obvious to the licensee. A trespasser was only oweda duty to avoid gross negligence or wanton, willful misconduct.

■ The doctrine of "attractive nuisance" only applies if the landowner or occupanthas reason to know both that children might come onto the land, and that thenuisance might be dangerous to them. Then, the landowner owes a duty ofreasonable care to the infant trespasser(s). It is not necessary that the childrenbe attracted onto the land by the nuisance.

F. NEGLIGENT INFLICTION OF MENTAL DISTRESS

■ A plaintiff can recover for negligent infliction of mental distress only if (a) sheexperiences some actual physical harm from the defendant's negligence, (b) sheis within the zone of danger, or (c) she witnesses harm to a family member.

• The plaintiff can only recover if the defendant's conduct was sufficient to causeemotional distress in a person of normal sensitivities. Once this objective test ismet, the plaintiff can recover for any emotional harm, even if it is unusual.

G. LIABILITY FOR THE ACTS OF OTHERS

1. EMPLOYEES AND OTHER AGENTS

■ Employers are liable for the torts of their servants committed within the scopeof their employment. An intentional tort is within the scope of employment ifit was committed to further the master's business.

■ A plaintiff who is injured by a servant may sue the servant and/or theemployer.

2. INDEPENDENT CONTRACTORS

• Generally, the employer of an independent contractor is not liable for thetorts of the independent contractor. An employee is an independentcontractor — as opposed to a servant — if the employer does not control theemployee's performance.


■ However, an employer is liable for ultrahazardous activity (e.g., blasting)undertaken by an independent contractor. There is said to be a nondelegableduty to see that such activity is performed properly.

■ An employer of an independent contractor can also be held liable for hernegligence in hiring an unfit contractor.

3. JOINT ENTERPRISE

■ When two parties enter into a joint enterprise, they are liable for each other'storts within the scope of the joint enterprise activity.

4. INDEMNIFICATION

■ A right of indemnification exists when a nonnegligent defendant has beenheld vicariously liable (i.e., for the negligence of another, e.g., a servant).The nonnegligent defendant has the right to recover all of the amount forwhich she was held liable from the negligent party.

H. DEFENSES

1. CONTRIBUTORY FAULT

■ Under a contributory (as opposed to comparative) negligence rule, anynegligence on the part of the plaintiff would bar his recovery against thedefendant. However, in some jurisdictions, a negligent plaintiff could stillrecover if the defendant had the last clear chance to avoid the accident.

■ The contributory negligence of another party will not be attributed to theplaintiff, even if the parties are related. However, under most wrongful deathstatutes, the contributory negligence of either the decedent or thebeneficiaries will bar recovery.

2. COMPARATIVE NEGLIGENCE

■ Under a comparative negligence statute, the negligence of the plaintiff willnot defeat the plaintiff's cause of action, but her recovery will be reduced byher share of the negligence.

■ Under a "pure" comparative negligence statute, the plaintiff will recover nomatter how negligent she was. Under a "hybrid" comparative negligencestatute, she will recover only if her negligence was equal to or less than thecombined negligence of the other parties.

■ Comparative negligence does not change the rule of joint and several liabilitybetween joint tortfeasors. A plaintiff can recover all of her damages (minusher share of the negligence) from one defendant; that defendant will thenhave to seek contribution from the joint tortfeasor (based on the jointtortfeasor's share of the negligence).


3. DAMAGES IN NEGLIGENCE ACTIONS

■ Expert testimony is usually required to prove future medical expenses.

■ A defendant is liable for all of the damages proximately caused by hernegligence, even if the defendant's particular damages were unforeseeable.

III. STRICT LIABILITY

A. ABNORMALLY DANGEROUS ACTIVITIES

■ There is strict liability for any harm which results from a use of land which (1) isnot common to the area and (2) presents a serious risk of harm even ifundertaken with due care. In such a case, the plaintiff need not show that thedefendant's conduct of the abnormally dangerous activity was negligent torecover.

B. ANIMALS

■ Owners of wild animals are strictly liable for the harm caused by them; owners ofdomesticated animals are only liable for their own negligence regarding theanimals.

IV. PRODUCTS LIABILITY

A. NEGLIGENCE

■ Contributory negligence is a defense in a products liability action based onnegligence.

■ Exercise of due care by the defendant in manufacturing or handling the productwill defeat plaintiff's products liability claim in negligence.

B. STRICT PRODUCTS LIABILITY

■ The manufacturer of a defective component is liable for the defective partsincluded in the finished product.

■ A supplier (i.e., a seller or manufacturer) of a product is strictly liable if: (1) theproduct was defective when it left the party's hands and (2) that defect causesthe plaintiff harm.

■ Foreseeable users and even bystanders may recover under a strict liabilitytheory.

■ Assumption of the risk is a defense in strict products liability actions, butcontributory negligence is not.


■ Exercise of utmost care by the defendant in manufacturing or handling theproduct will not defeat plaintiff's strict liability claim.

■ Misuse by the plaintiff is not a defense, unless that misuse was unforeseeable.

■ Alteration of the product after it left the defendant's hands can defeat theplaintiff's strict liability action.

■ An assembler is liable for the defective parts included in its finished product.

■ Unavoidably unsafe drugs (including blood) are the basis of strict liability only ifthe supplier does not notify the physician of the potential dangers.

C. DEFENSES

■ A plaintiff's cause of action is defeated by assumption of the risk only if he hadactual, subjective knowledge of the risk and voluntarily assumed it.

V. OTHER TORTS

A. NUISANCE

■ A nuisance exists when the defendant's use of neighboring land unreasonablyinterferes with the use and enjoyment of the plaintiff's land.

• A defendant can be held liable for nuisance even if the offending use is notnegligent.

1. PUBLIC NUISANCE

■ A nuisance is a private nuisance if it interferes with only one neighbor's useand enjoyment of her land. That neighbor has a cause of action for privatenuisance.

■ A nuisance is a public nuisance if it interferes with the use and enjoyment ofseveral neighboring parcels. In general, only the relevant political subdivision(city, county, etc.) has the right to sue for a public nuisance. However, aprivate plaintiff can sue for public nuisance if the harm to that plaintiff fromthe nuisance is different in kind from the harm to the public (or if a statutegives the neighbor a private cause of action).

2. DEFENSES TO NUISANCE ACTION

■ If there is an actual physical invasion of the plaintiff's land, the cause ofaction is for trespass, rather than nuisance.

■ Which use commenced first is a factor to be considered in deciding whether aparticular use is a nuisance, but it is not dispositive. (That is, one can "moveto the nuisance" and still enjoin it or recover damages in some cases.)


■ The fact that a particular use is permitted by the applicable zoningregulations does not establish that it is not a nuisance, although it is someproof that the use is reasonable.

■ Some courts will deny any judgment for plaintiff if the defendant's use of theland is socially useful. Other courts will award damages, but will refuse toenjoin such a use.

B. DEFAMATION

1. LIBEL

■ Some jurisdictions treat libel per se and libel per quoddifferently. Libel perse is that which is libelous on its face. Libel per quod is that which is libelousonly when taken in conjunction with facts known by those to whom the libelis published. These jurisdictions allow recovery for libel per quod only if thereare "special" (i.e., actual monetary) damages.

2. PUBLICATION

■ There must be a publication — meaning that the defendant must intend orallow that at least one person (other than the defamer and defamed) receiveand understand the statement (even if they don't believe it).

3. DEFENSES

■ Truth is an absolute defense in a defamation action (and a "false light"privacy action).

4. "DEFAMATORY" DEFINED

■ Material is defamatory if it would lower the person's esteem in the eyes of areputable segment of the community.

5. FAULT

■ Where a showing of malice is not required, any other plaintiff must at leastprove negligence to recover for defamation.

6. MALICE REQUIRED

■ A public official or figure must prove "malice" — that the defendant acted withknowledge of falsity or reckless disregard for the truth — in order to recoverfor defamation (or invasion of privacy).

7. DAMAGES

■ The common law rule is that a plaintiff suing for slander must show specialdamages unless the slander constitutes slander per se (charging the plaintiffwith a crime, a loathsome disease, sexual misconduct, or businessincompetence).


8. DEFENSES

■ There is no defamation if the statement was privileged. Relevant statementsmade in court hearings are absolutely privileged. (A perjury action, not adefamation action, is the proper action for lies stated in court) All otherprivileged statements (those made by an employer to another employerabout an employee, statements in administrative hearings) are only protectedby a qualified privilege. Such qualified privileges can be overcome if thestatement was made with knowledge that it was false or with recklessdisregard for its truth.

■ A public official or figure must prove "actual malice" to recover fordefamation. "Actual malice" requires that the plaintiff prove that thedefendant either knew that the information was false, or acted with recklessdisregard for its truth or falsity.

C. INVASION OF PRIVACY

■ Publication is not required for the tort of intentional intrusion upon seclusion.

■ Truth is not a defense to the torts of invasion of privacy (except "false light"publicity).

■ Newsworthiness is a defense to the tort of invasion of privacy.

■ Publishing information in the public record cannot generally be the basis for aprivacy tort.

■ A defendant can be held liable for giving 'unreasonable publicity to the plaintiff'sprivate life if the material published would be highly offensive to a reasonableperson and is not of legitimate public concern (i.e., newsworthy).

■ A defendant can be held liable for false-light publicity even if the materialpublished is complimentary (as long as it is untrue).

D. MISREPRESENTATION

■ In order to be deceit, there must usually be an affirmative misrepresentation.Silence is a misrepresentation only when the defendant had some legal (e.g.,fiduciary) duty to disclose.

■ A statement of opinion is not an actionable misrepresentation.

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