Dan is accused of aiding in a bank robbery in which all of the participants were over six feet tall. One suspect has already been cleared by police because he is only five feet six inches. Since Dan is only five feet two inches, a fortiori he could not have participated in the robbery and will also be cleared.
Nick desperately needs information from Sam to aid Nick in preparing for a lucrative business deal. Sam refuses to provide that information because of its confidential nature. Nick files a lawsuit against Sam so he can acquire the information by claiming that he needs it in connection with the lawsuit. Nick has thus participated in an abuse of process because he used service of summons, which is a legal process, to institute a lawsuit, for the sole purpose of acquiring information not otherwise lawfully available to him.
John’s will gives equal money to Joe and Jane (his children). If Joe were to take his share, then the added tax liability would eliminate all of Joe’s gains. Therefore, Joe decides to reject the legacy. Jane, on the other hand, would benefit from the accretion (if John’s will provided for such a transfer – from Joe to Jane).2. The gradual, imperceptible addition of soil to the shore by the natural action of waters
The Environmental Protection Agency was created by Congress to protect the quality of the nation's air, water, and land. Pursuant to that goal, the agency monitors air pollution in cities, sewage treatment plants, chemical landfills, etc. The Federal Trade Commission regulates commercial practices and takes action against deceptive advertising and monopolistic activity. There are many federal and state administrative agencies that enforce federal and state policies in particular areas of governmental regulation.
John wants to buy a life insurance policy from XYZ Corporation. In order to qualify for lower premiums, he lies about his smoking status. His lie is an “adverse selection” against the insurer.
as part of the defendant's sentence, the judge intends to include a large dollar amount for restitution to the victim. Rather than conduct a trial to determine the defendant's ability to pay the fine, the judge permits the defendant to file an affidavit outlining his financial situation. The affidavit also includes the defendant's name, address, age and other technicalities required by law, and an acknolwedgment of the truthfulness of the statements made. A legally authorized person is required to administer an oath to the signer (called the affiant) and witness his signature.'
Kim, an artist, instructs Lorenzo to sell her paintings to various art galleries and to private parties. Lorenzo is considered Kim's agent, regardless of whom he sells to, since he will have apparent authority to act on her behalf.
Lily sues a manufacturing company for injuries resulting from a defect in one of their products. After she files her papers with the court, she discovers new facts which indicate that the company was negligent in developing the product. Lily seeks to amend her pleading to include these new facts, and, as is generally the case, she is permitted to amend.
John Doe is a 35-year old construction worker. He owns a disability insurance policy. It will pay him a benefit of $100/month. John’s policy has: (i) a maximum disability benefit period of one year; and (ii) an elimination period of one week. The annual claim cost for such a policy equals $12/month; while the gross premium is $18. The additional $6 (ie, $18 minus $12) would cover expenses and profit (and other contingencies).
A business organization that sells athletic equipment used Tim, a local sports star, to advertise and promote their products. His actions made it seem that he was part of the business, and the business did nothing to qualify that image. A manufacturer contracted with Tim to supply the businesss with various types of equipment under their belief that Tim was a part of that business. Although the business may not want that equipment, they are forced to purchase it. Tim's apparent authority as agent of the business organization was due to the organizaation's acquiescense, and this false impression obliges them to act in accordance with the contract.
Suze is arrested for possessing more than 25 grams of marijuana. Once she employs an attorney, the attorney files a notice of apperance with the court stating that he or she is Suze's attorney and will represent her in the forthcoming trial.'
A seller agrees to provide a buyer with certain goods. one clause in the contract states that, if the goods are defective, the buyer can only sue in the seller's home state. The goods turn out to be defective, but the buyer files suit in a court in the buyer's hoe state. The seller makes a special apperance in the court only for the purpose of challenging that court's jurisdiction based on the clause in the contract. by such an apperance, the seller does not acknowledge the court's right to entertain the buyer's suit against him.VOLUNTARY APPEARANCE: an appearance by one who has not been required to appear by service of process.
Jane wants to borrow a sizeable amount of money to build a summer house in the mountains. Although banks are generally unwilling to lend money for such projects, they will lend to Jane because she has substantial assets (including ownership of several buildings and a large number of stocks). Such assets are generally pledged as collateral. With respect to real property, Jane might give the bank a mortgage as a form of collateral.Assets appear as one of three major balance sheet categories and are counterbalanced by liabilities and net assets. In corporations, net assets are usually referred to as shareholder’s equity (or book value).
since its inception, the welfare agency has been criticized for mismanaging federal money (and for allowing people to file multiple claims). The General Accounting Office, an agency of the federal government, agrees to conduct an audit to determine if these allegations are true; and to trace where the money had been spent.see audit of return.
a steward who has charge of lands, goods and chattels to get the best benefit for the owner;
a person appointed by private persons to collect rents and manage their estate; or
a court-appointed guardian of an incompetent.
as a favor to his neighbor, John agrees not to erect a swing set in his backyard. Two years later, John’s grandson moves in with him. So, John [reluctantly] decides to build a swing set – to keep his grandson happy. He is not prevented from building the set even though he had previously told his neighbor he would not erect one. The earlier agreement is not binding on John because it was not a bargained-for exchange. The neighbor provided nothing in the agreement [as consideration] for John’s promise. Thus; the promise was a gratuitous one.
a thief steals several notes that are payable to bearer and sells them to John – who does not know they are stolen. Because the notes are bearer paper, John can demand payment (according to the terms of the notes). The fact that they are stolen has no effect on his ability to collect, because John is the bearer. In other words, the notes are payable to whoever has possession (ie, the bearer).see negotiable instrument.
Jane funds a scholarship. One which Joey receives. As such, Jane is Joey’s benefactor; and Joey is Jane’s beneficiary.2. In a broader sense, a benefactor can be any kind of supporter (eg, a financial investor; a social investor; a personal investor; etc.)
a professional basketball team drafts John – the best player in college. John’s exciting style of play will generate twenty million dollars per year – for the team. As such, the team has an insurable interest in John, and it buys a life insurance policy (to protect their investment). If John dies then the policy will pay the team one-hundred million dollars.
John owns a textile mill; and stores his products in a warehouse. The owner of the warehouse sells several boxes of shirts to Jane [without John’s permission]. Jane suspects no wrongdoing, because she has frequently dealt with the warehouse in a similar manner (without any trouble). Since John left the goods with the warehouse, the subsequent sale to Jane [for value] makes Jane a bona fide purchaser – who is legally entitled to own the goods. Jane even has superior claim to the goods [over John]. Therefore – in order to get compensated for his loss – John must pursue his claim against the warehouse owner.see holder-in-due-course
XYZ Co decides to close ten of its branch offices. As part of the closing, it makes a deal with another company – to sell the buildings in which the offices were located. The original cost of the buildings was $6 million, and their book value has been reduced to $4 million (due to depreciation). The actual market value is $8 million; since, in fact, the buildings have appreciated in value. As such, the two [prospective] trade partners haggle over the purchase price.Companies that invest in stock [of other companies] usually carry the investment at its original cost as book value. The true market value, on the other hand, may be many times the cost.
Franco wants to build a shopping center in town, but for years his requests for building permits have been turned down. Another company is then granted the permits after one request. When Franco inquires why that company is treated differently, he is informed that they "make sure" their requests are granted. Franco understands that to mean he needs to pay money to town council members. If Franco pays the money, he is guilty of bribery even though payment is the only means to secure permits.
Jean files a lawsuit claiming that Don fraudulently induced her to buy a vacuum cleaner. Don replies that he has never met Jean and that he has never sold vacuum cleaners in Jean's section of town. Jean has a burden of proof to show facts that Don sold her a vacuum cleaner and did so by fraudulent means.2. the duty of a plaintiff, at the beginning of a trial, to make a prima facie showing of each fact necessary to establish the existence of a cause of action; referred to as the DUTY OF PRODUCING EVIDENCE (also BURDEN OF EVIDENCE or PRODUCTION BURDEN).
Today, Joe buys a call option. It gives him the right to buy 1 share of XYZ stock – in two months (at $20 per share). The stock option costs $1 (which Joe pays immediately). He hopes that – in two months – the stock will be worth more-than $20 (per share). As it turns out, the XYZ stock is worth $30 at the exercise date (ie, 2 months later). Therefore, Joe exercises his call option. Thereby paying [only] $20 for a $30 stock.
Today, Jane buys a call option. It gives her the right to buy 1 share of XYZ stock – in two months (at $40 per share). The stock option costs $2 (which Jane pays immediately). She hopes that – in two months – the stock will be worth more-than $40 (per share). As it turns out, the XYZ stock is worth $30 at the exercise date (ie, 2 months later). Therefore, Jane does not exercise her call option. Thus, she does not buy the XYZ stock.
Today, Kendra buys a call option. It gives her the right to buy 1,000 shares of XYZ stock – in two months (at $40 per share). The stock option costs $2 per share (totaling $2,000 – which Kendra pays immediately). She hopes that the stock price rises during the two-month wait (ie, it gets “in-the-money”). One month later, the underlying stock price rises to $50/share. Moreover, her call option also rises in value; thereby reaching $5 per share. Therefore, Jane sells her call option (at $5/share); netting a $3,000 total profit.
XYZ Co wants to expand its production capabilities in order to meet the increase in demand [for its products]. Its needs include one factory, and two new office buildings. Regardless of where XYZ obtains the money [for these three capital assets] (ie, whether from a bank; from retained profits; etc.), the money that XYZ spends to acquire these buildings will represent a capital expenditure.
John has empty checking accounts at two different banks (Bank A and Bank B). He writes a check for $50,000 on his Bank A account, and deposits it in his Bank B account. John has good credit at Bank B. As such, he’s able to draw funds against the deposited check before it clears (ie, is forwarded to Bank A for payment, and paid by Bank A). Since the clearing process takes a few days, John deposits the $50,000 in his Bank A account – before the $50,000 check drawn on that account clears. As a result, he steals/kites $50,000.see float; floating debt
There are no eyewitnesses to place Julio at the site of the car accident, but there is a variety of circumstantial evidence to suggest that Julio was involved. The prints at the scene of the accident match the tires on his car, the color of several scratches on the other person's car is the same as the color of Julio's car, and his car is dented precisely where the other driver said it would be. That evidence could be used to implicate Julio in the collission.Compare direct evidence
As of October 31, 2025, Company XYZ has amassed $100M in total insurance claims ($80M from reported claims; $20M from unreported claims). Healthcare providers have already rendered service on $90M of those claims. Therefore, Company XYZ has $90M in accrued claims liability.This liability is sometimes referred to as a liability for accrued benefits.
As of October 31, 2025, Company XYZ has amassed $100M in total insurance claims ($80M from reported claims; $20M from unreported claims). Healthcare providers have already rendered service on $90M of those claims. Therefore, Company XYZ has $10M in unaccrued claims liability (ie, $10M = $100M minus $90M).This liability is sometimes referred to as a liability for unaccrued benefits.
In accordance with securities law, a corporation files a registration statement with the Securities and Exchange Commission concerning a stock sale. After investors buy several million shares of stock and a few years pass, the corporation files for bankruptcy. At that point, a few of the investors realize the statement was false and misleading. Those investors, on behalf of all investors of the corporation, file a class action lawsuit seeking to recover the money they originally paid for the stock.
John executed his will at a time when his relationship with his brother was at a low point. As the relationship improves, John writes a codicil [to his will] providing that a certain amount of money pass to his brother. The codicil also revokes any statement in the will that specifically denies his brother anything.
Damien is charged with robbing six persons at a poker game and his defense in the first trial involving the alleged robbery of only one of the victims is that he wasn't there [ALIBI], and if he is acquitted at that trial due to the jury's specific acceptance of his alibi, the state will be estopped to relitigate the alibi question with respect to the other related robberies.
Jack kidnaps a young girl and takes her across state lines, a crime that violates both federal and state laws. Although Jack could be prosecuted by both jurisdictions or either of them, under principles of comity the federal prosecutor allows the state to proceed first, because of the anger of the community and their desire to try Jack in a local setting.
John – who is a bank trustee – felt he had an excellent tip on a stock. So, he commingled his own funds with the funds of one of the bank trusts. The investment is successful, but the bank still disciplines John (ie, the trustee), because he never made an exact accounting of the stock purchased with trust money.
“No State shall, without the Consent of Congress... enter into any agreement or compact with another state, or with a foreign power...”INTERSTATE COMPACTS that have been congressionally approved include those relating to:
John Doe files an employment discrimination complaint with the FCHR. At that stage he is referred to as the "Complainant". John Doe later files suit at DOAH. Where he becomes a "Petitioner". Ultimately, John Doe withdraws his DOAH suit in exchange for going to federal court. Now that he's in the judicial branch, John Doe is known as the "Plaintiff" in his case.
Jane gave Kim (her daughter), title to a home. She also instructed Kim to pass the home to Kim’s daughter; or – if Kim did not have a daughter – to Kim’s son (upon Kim’s death). This gift to Kim was a conditional fee, since if Kim died without a daughter (or son), title to the home returned to Jane (ie, Kim’s mother). If Jane predeceased Kim, then the home would return to Jane’s estate (and pass under Kim’s will).
Although Jane ran a prosperous business in California, she agreed to return to NYC – to care for her aging mother (Joyce). As a demonstration of her gratitude, Joyce promised Jane the money located in Joyce’s bank account. Nothing was ever signed, though. Then – upon the mother’s death – Joyce’s other children contested Jane’s claim [to the whole account]. They felt that there was no contract [between Joyce and Jane] because Jane gave no consideration in return for the money in Joyce’s account. A court would probably find that Jane’s care for the mother – at the mother’s request (as well as the giving up of a prosperous business) – constituted consideration. Therefore, Joyce's intestate promise was deemed to be enforceable.
In this case, John Doe claims that he lost wages and benefits because Company ABC “constructively discharged” John Doe from his job. Put another way, John Doe claims that he left his job because the hostile work environment made his working conditions intolerable.
John Doe charges ABC Co. with sexual harassment in his discrimination complaint. In the hearing, DOAH found that Mr. Doe's direct manager sexually harassed him. That finding rendered ABC Co. "constructively knowledgeable" of sexual harassment in the workplace; and, thus, liable.
John contracted with a company (to put aluminum siding on his house). The company transfers the contract to a financial firm, and receives the amount John had agreed to pay the company (less a small discount – with respects to the financial firm). Under basic commercial law, if the company does not perform the work satisfactorily, John will still have to pay the financial firm, because that area of law protects the firm [as a holder in due course] from claims against the company once the firm assumes the contract. But under some states’ consumer-protection laws, the firm must take responsibility for the company work (in most instances).
A judge orders a litigant to disclose several important documents to his adversary. The litigant refuses because he feels that the documents will give away trade secrets. The court has certain formulas and designs deleted, and orders that the documents be relinquished. If the litigant still refuses, he can be held in contempt of court, resulting in a jail sentence and/or a fine. The nature of the sanction is within the trial judge's discretion. As a general legal proposition, an order of a court must be obeyed or appealed. It may not be disregarded.
John establishes a trust to take effect at his death. He names his wife as beneficiary. The trust instrument also provides that if his wife remarries, then John’s son & daughter become the beneficiaries (and his wife loses eligibility). Since there is no assurance that John’s wife will ever remarry, his son & daughter are considered contingent beneficiaries.
John grants land to Jane (his sister) until she dies, and then provides that the land go to Paul’s children. Paul did not have any children at the time, so the grant [of the land to them following Jane’s death] is a contingent estate. If Paul has still no children when Jane dies, then the title [to the land] reverts back to John (who first granted it).
Glen wants to purchase a large tract of land from seller to build a manufacturing plant but is unsure whether he can get a loan from the bank to finance the construction costs. Therefore, he signs a conditional contract with the seller that he will purchase the land only if he obtains a construction loan from the bank.
John drafted a will. Thereby giving his summer home to Jenny and Joey (his children). As a result of that devise, the two are coparceners.see parcener.
John – as a sole proprietor – runs several clothing shops. After speaking with other businesspeople, he decides to form a close corporation. Under that arrangement, John still controls the company. Even though there might be others (eg, his wife; his siblings; etc.) who hold shares of stock in the corporation. He also enjoys the limited liability aspect of a corporation in that – if the corporation owes money – a creditor will be limited to the corporation’s assets (not to John’s).a small corporation with limited earnings may elect to be taxed as an ordinary partnership; its stockholders thus enjoy limited personal liability and only individual (not also corporate) taxation. A corporation electing this federal income tax option is a SUBCHAPTER S CORPORATION.
Doe Brothers (a partnership) decides to incorporate. After filing what they believe are the necessary papers, the partnership changes its name to Doe Corporation; and continues to carry on its business. Several years later, a creditor sues both the corporation and the partners who run it. Thereby claiming that the partners are not protected from personal liability, because they failed to file certain papers for incorporation (therefore, a corporation was never legally formed). Unless the omission was intentional (or under other rare circumstances), a court will generally find that the error was inadvertent. Thus, the court will deem Doe Corporation to be a de facto corporation; thereby shielding its operators/stakeholders from personal liability.
a professional basketball team drafts John – the best player in college. John’s exciting style of play will generate twenty million dollars per year – for the team. As such, the team has an insurable interest in John, and it buys a life insurance policy (to protect their investment). If John dies then the policy will pay the team one-hundred million dollars.
John creates a trust (naming his [adopted] children as beneficiaries). A football field is stated to be the trust corpus in the trust instrument. The ticket sales [from the field] form the income that gets distributed to the children.2. In civil law, corpus refers to a positive fact (as distinguished from a possibility).
A retail store owner sues a manufacturer for a shipment of defective clocks. Regardless of the validity of that suit, the manufacturer could counterclaim against the store owner if, for example, the owner owed the manufacturer money for past shipments. Both the storeowner’s and the manufacturer’s claims would then be decided by the courts.In federal practice, a COMPULSORY COUNTERCLAIM arises out of the subject matter of the opposing party’s claims, and unless the defendant makes such a counterclaim in the suit that has been brought against him or her, he or she may be barred from ever raising that claim again. A PERMISSIVE COUNTERCLAIM is any other counterclaim and may be made by the defendant in the action that has been brought against him or her or in a subsequent suit. See setoff. Compare cross-claim.
Jane wants to sell a large tract of land that is adjacent to her home. As an inducement to John (the buyer), Jane is willing to make a promise with him. The covenant grants John access-to/use-of Jane's driveway – so that John will not have to build one [of his own].
Crystal Lighting contracts with a construction company to install unique light fixtures throughout a new building. On the basis of that contract, Crystal also contracts with one of its suppliers to have several hundred fixtures delivered to Crystal. Since this is not a normal order for Crystal, Crystal explains what all the fixtures are for. The supplier then breaches his contract. Ordinary light fixtures do not fit in the building design. Any damages in the contract between Crystal and the construction company that result from the breach are the direct foreseeable result of the supplier's breach. As such, those damages are called consequential damages.'DOUBLE [TREBLE] DAMAGES: twice [or three tiems] the amount of damages that a court or jury would normally award, recoverable for certain kinds of injuries pursuant to a statute authorizing the double [or treble] recovery. These damages are intended in certain instances as punishment for improper behavior. Treble damages is a statutory remedy most often awarded in antitrust violations.
Several corporations are found guilty of fixing the price of milk over a nine-year period. In addition to assessing a fine on the corporations, a judge awards an additional amount as punitive damages. Since all purchases of milk were affected by the price-fixing, the judge might order that the amount of the punitive damages be repaid to consumers by a coupon offering.EXPECTATION DAMAGES: a measure of the money damages available to plaintiff in an action for breach of contract, based on the value of the benefit he would have received from the contract if the defendant had not breached, but had completed performance as agreed. The amount is generally the monetary value of full performance of the contract to the plaintiff minus costs plaintiff avoided by not performing his own part of the contract.
Nursing homes were established throughout a particular state under the authority of a newly enacted state law. Now, two years later, portions of the law are found to be unconstitutional. Instead of closing all the homes that were set up, the state permits them to continue to operate under its de facto authority until the law is amended and legal.The de facto acts of a person or entity may for some purposes regarded as legally binding. Compare de jure.
a new corporation is set up exactly according to both state and federal incorporation laws. The corporation is therefore a de jure (ie, legal) corporation.Generally used in contrast to de facto; de jure connotes “as a matter of law,” whereas de facto connotes “as a matter of practice not founded upon law.”
Cy is arrested for possession of one marijuana cigarette. Although marijuana possession has not been decriminalized in the state where Cy is arrested, the prosecutor decides not to prosecute Cy for the possession since it is only a de minimis infraction
A state statute gives a defendant convicted in a municipal court the right to appeal that conviction de novo in a higher court. That right means that the defendant will have a new trial in which the facts and issues will be reviewed anew.
A state legislature passes a taxing measure that will have a widespread effect on corporations doing interstate business within that state. A payment of the tax with a subsequent refund if the tax is found invalid would result in administrative difficulties. Therefore, one of the affected corporations asks a court for a declaratory judgment on the validity of the tax.
XYZ Co buys a large area of land (one which it plans to locate its national headquarters). To promote goodwill between the company and the surrounding communities, XYZ Co dedicates a portion of land to the county parks committee (who accept permanent ownership of the land).
A carpenter files a suit against a homeowner, claiming that the homeowner failed to pay the carpenter for work performed six months ago. Under the state’s court rules, the homeowner has twenty days to file an answer to the carpenter’s claim. If the homeowner fails to do so within twenty days, the court will enter a default judgment against him declaring that the homeowner must pay the carpenter what is claimed.2. judgment given without the defendant being heard in his own defense.
Jane wants to sell her house to a Ron (who is moving into the state). Prior to purchasing the house, Ron has a title search done – to determine if anyone else has claimed ownership of the house [besides Jane]. That search discloses a bank note that has never been paid, but which the bank has not yet acted upon. Thus, the outstanding bank note gives rise to a defective title (which now makes Ron reluctant to buy the house).2. With reference to negotiable instruments, “defective title” denotes title obtained through illegal means (eg, fraud)
Sandor claims that the issue of his liability for damage on his sidewalk resulting in injury to another was settled in a previous case. The judge reminds Sandor that the previous case concerned the city’s obligation to keep the sidewalks in good repair and the city’s liability for injury to a person. The part of the case addressed to a private citizen’s liability was not necessary to the decision and hence was only dictum and is not binding on this judge.
Direct Evidence: Susan testified that she looked out into her hallway at 4 A.M. and observed her neighbor Mae hitting her husband with a hammer.
Circumstantial Evidence: Susan testified that at 4 A.M. she was awakened by screams and banging noises from the adjoining apartment and the next morning found the injured body of Mae's husband in the hallway. Additional inferences need to be drawn to link Mae to the crime of assaulting her husband.
EXAMPLE: John regularly enters into contracts where he is not to be paid until the work is completed. But John needs the money before he starts the work (in order to purchase materials/etc). Because the contracts represent obligations to pay [by other parties], a bank is willing to give John the money that the contracts call for – less a discount. That discount mainly covers the difference in the value of:The discount will also factor in the probability that some/all of the contracts will not pay out.(a) the money given to John now versus what the money will be worth when the bank is paid [by the other parties]; as well as (b) a small profit margin for the bank.
Alina gets into an accident when her rear wheels stop for no reason, causing the car to skid into a highway divider. In her lawsuit against the car manufacturer, Alina uses the discovery procedure to obtain memos and test run results that the manufacturer used in designing the car. Without discovery, Alina may not be able to acquire that information.
Jason, a juvenile, is charged with an assault upon another teenager. In Jason's state, the law provides the juvenile judge with the judicial discretion to have the case heard in the juvenile court or to transfer the case to an adult court. Previous cases and the law itself establish certain standards to use in determining whether a transfer is appropriate, but the judge has the discretion to decide which court shall hear the matter. The decision, though, may be appealed to a higher court.LEGAL DISCRETION: the use of one of several equally satisfactory provisions of law.
Jorge brings a lawsuit against a company, claiming that it never refunded his money for an item he returned.
The company shows the judge a check made payable to Jorge and cashed by him, with a large notation on the check that it was payment for the return of the item. Jorge then tries to make an additional claim that the company owes him more money for other reasons. The judge will usually dismiss with prejudice Jorge's claim for the refund price alone and instruct him to file a separate claim if he is seeking for more money. The "with prejudice" aspect of the court's decision means that Jorge can never again sue on the same claim unless he successfully appeals the decision.
At the end of every quarter, a corporation distributes dividends to its shareholders. A distribution takes place (whether the dividends represent checks; additional shares; cash; or any other payment form).
one of the top three oil companies purchases the sixth largest oil company. After a long investigation, the government determines that the purchase will remove gasoline price competition in many states. If a court agrees with the government’s position, it will order the larger company to divest itself of the smaller company.
Ray is charged with destroying government property. After a long trial, a jury finds Ray not guilty. Immediately after the trial, new evidence is discovered that unquestionably links Ray to the destruction. Under principles of double jeopardy, the prosecutor cannot retry Ray for the crime even with the new evidence.
Police in a municipality devise a scheme to produce a confession from Randy, who was accused of murder. The grail judge permits the prosecution to use the confession, and Randy is convicted. On appeal, a judge could find that the scheme violates procedural due process of law, based on the nature of the police scheme and the general nature of the American judicial system, which looks to produce convictions based on evidence acquired from sources other than the accused. In essence, due process is that level of process which is deemed fair based on a balancing of all interests.
Jane is held at gunpoint until she agrees to help some people rob a bank. At her trial for the robbery, Jane pleads duress and explains what happened. At the conclusion of trial, the jury finds that Jane was [indeed] under duress. Therefore, they acquit her.
John is a bank teller, and one month he is short of cash. So, he takes money from a customer’s depositions – with the full intention of returning it in a few weeks. His intent to return the money, though, has no relevance to the fact that the money was embezzled. As such, his only defense – in this instance – would be to claim that: (a) the money belonged to him; or (b) he had the customer’s consent.Compare defalcation; misapplication [misappropriation] of property
a piece of land that Jebediah wants is encumbered by a mortgage (which is greater than the stated value of the land). He purchases the property anyway; believing that (i) the value is understated; and (ii) that one day he will be able to sell the land at a great profit.
Plastics Company has been disposing of its waste products in an adjacent river for over a decade. Environmentalists finally determine that some of the liquid waste contains a deadly carcinogen. A court enjoins (ie, forbids) Plastics from using the river for disposal based on the environmentalists’ proofs.
Women and men who perform equal tasks in their jobs for the state receive unequal pay. In a lawsuit seeking equal pay, the fact that a question based on gender is raised forces the state to demonstrate a compelling government interest to justify the distinction.
ABC Co agrees to supply a XYZ Co with all the wheat that XYZ Co will need – for one year. The agreement includes a provision that – if the annual harvest for a group of states falls below an established level – ABC Co is relieved of its obligation.
Nelson convinces an associate to sign what appears to be a valid contract which gives the associate the right to buy certain items from Nelson. When the contract turns out to harm Nelson more than the associate, Nelson tries to deny the validity of the instrument. A court will find that Nelson is estopped (ie prevented) from raising the claim since it was Nelson who initiated the offer.
as an independent consultant, Jane works for many different companies. Her scheme has each company pay her under a different fictitious name. She then sets up bank accounts in each name to facilitate cashing the checks. By that method, she evades her taxes because the Internal Revenue Service is unable to locate any of the fictitious individuals.evasion different from avoidance of tax (which denotes the legal interpretation of relevant tax law to minimize tax liability).
Application to install wiretaps on telephones are always made ex parte, i.e., without notice to the person whose phone is sought to be electronically surveilled. Otherwise, the person will know his or her phone is wiretapped and avoid incriminating conversations. Because the application is ex parte, requireements not usually insisted on must be met to protect privacy, and the person who is recorded may challenge the sufficiency of the application at a later opportunity.
a customer buys a new set of tires for his car, the pace of which includes a federal excise tax. The money generated by the tax is used for road maintenance and other transportation expenses and is justified by the rationale that anyone who buys tires must be using them on the roads. The tax is a means of ensuring that users pay for related government services.
John’s will names Tom as the executor of John’s estate. As executor, Tom must ensure that: (i) the provisions in John’s will are carried out; (ii) debts against the estate are paid; and (iii) any money owed is collected. If there are ambiguities in the will (or if the will is contested), then Tom is responsible for seeing that a lawsuit is either filed (or answered). Tom is compensated for his job; and he is reimbursed for any expenses [by John’s estate].
John and Jane are a married couple with three children. Federal income tax laws allow the couple three exemptions (one foreach child on the couple’s joint tax return). The exemptions reduces their taxable income.
Loni obtains a court order requiring a company to give her all relevant information concerning a certain product that she claims injured her. At trial, a judge finds her evidence insufficient and dismisses her claim. Afterwards, Loni finds other documents in the company's possession that she never received but that would have proved her case. The extrinsic fraud committed upon her gives rise to both a suit against the company for the fraud and a right for Loni to have a new trial with the new documents.
Jane copyrights an article that she publishes in a medical journal. Although Jenny has the sole right to authorize copies of the article, the fair use doctrine permits a teacher to make as many copies. The condition for the teacher’s usage, notably, is that he/she is using it for classroom instruction (which satisfies fair use).
The United States Supreme Court decides that the constitution does not protect a person’s privacy from a certain police tactic. Under the doctrine of federalism, though, a state court may nonetheless interpret its state constitution as prohibiting the same police conduct. The federal and state judicial systems are sufficiently separate so that a state court can afford greater protection to its citizens than the federal courts by a more liberal interpretation of its own constitution and laws. The state courts must observe any minimum federal rights, however, under the Supremacy Clause to the United States Constitution.
Jane conveys land to John – in fee simple absolute. John has complete ownership of the land, and he can do whatever he wants with it.
Jane conveys land to John – in determinable fee; thereby restricting its use to religious purposes only. If John ever uses the land for some non-religious, then it will revert back to Jane (or to whomever [else] she designates).when the word “fee” appears alone (ie, without any qualifying words) it designates a fee simple estate.
Elon sued his employer for wrongful termination. The court found that Elon did fall under the provisions of the state’s whistleblower statute because his firing was a direct result of his complaint regarding the company’s failure to provide safety harnesses to its employees.
ABC Co launches a strategy to acquire new customers. Pursuant to that strategy, it makes several firm offers to other local businesses; thereby guaranteeing that ABC Co will supply all the local business with apparel – for ninety days (at a fixed price). The local businesses can enforce that offer despite providing zero consideration [for it].
a John promises to pay Joey $1,000 if Joey quits smoking (until Joey’s 25th birthday). John dies when Joey is 23, though, and Joey still refrains from smoking. At age 25, Joey requests the $1,000, but the executor of John’s estate claims that Joey never promised anything in return for the money. A court finds that Joey’s forbearance [from smoking] constituted consideration to support the contract. Thus, the court orders the executor to pay.
During the refueling of a ship, gasoline spills into the harbor. A spark from a nearby welder ignites (when it lands on a piece of highly flammable fabric). The fabric falls into the harbor, and a fire develops. Consequently, the whole harbor burns down. Even though no fire would have started had the fueling company been more careful, that company is not responsible for the destruction of the harbor. The damage was an unforeseeable consequence of spilling a small amount of fuel oil.In a contract setting, a party’s liability for consequential (or special) damages is limited to damages arising from the foreseeable consequences of his/her breach.
A truck lightly hits the rear end of a car, but, because of the vehicle’s construction, the car bursts into flames and the driver is seriously injured. The driver, who is from another state, wants to have the case heard in his home state. The car company asks the court to invoke the forum non conveniens doctrine and have the case transferred to the state where the accident occurred. That request is granted because the witnesses to the accident, as well as the actual scene, are both in the other state, and it would be more inconvenient to have that information brought to the driver’s home state than to have the driver go to the state where the accident occurred.
John is a dairy farmer. On June 1st, he enters into a forward contract with a local grocery store. Therein, he agrees to sell 1,000 bottles of milk – at $2 per bottle – on June 30th (ie, one month from now). He has thereby hedged his price risk (ie, he has guarded against financial losses due to fluctuations in milk prices). On June 30th, milk prices have fallen to $1 per bottle. Therefore – by selling his milk at 2X the market price – John [effectively] insured himself against a price drop.see hedging; derivatives; put options; call options; stock options; option contracts; futures contracts
Loni obtains a court order requiring a company to give her all relevant information concerning a certain product that she claims injured her. At trial, a judge finds her evidence insufficient and dismisses her claim. Afterwards, Loni finds other documents in the company's possession that she never received but that would have proved her case. The extrinsic fraud committed upon her gives rise to both a suit against the company for the fraud and a right for Loni to have a new trial with the new documents.FRAUD IN FACT [POSITIVE FRAUD] actual fraud; deceit; concealing something or making a false representation with an evil intent [scienter] when it causes injury to another. It is used in contrast to CONSTRUCTIVE FRAUD, which does not require evil intent.
Following a long trial, a company is found negligent in manufacturing a product that caused Ayad substantial hair loss. The manufacturer’s assets in that state are insufficient to cover the full amount of the judgment. Ayad can take that judgment to another state where the manufacturer has assets, sue upon that judgment, and by applying the full faith and credit principle, obtain another judgment, and collect whatever he is still owed.
John owes money to a department store – for goods that he purchased on credit. Once John stopped paying, the store brought a garnishment proceeding against him [for the money owed]. If the court agrees with the store, then it will order that a portion of John’s wages go directly to the store (and not to John).
Motions submitted before a judge, which in essence ask the judge to do something, must be supported by a showing of good cause. On a motion to exclude or suppress evidence for trial, good cause must be shown by example of illegal police conduct in the seizing of the evidence. For the motion to be granted, the judge must be convinced the conduct occurred and is enough to justify exclusion.
Dion purchases securities for 60 percent of their face value from an associate. The associate had obtained the securities fraudulently, and the real owner then sued Dion for their return. Dion is protected from the owner's claims if he acted in good faith and is thus a bona fide purchaser. The owner states that Dion could not have acted in good faith since he purchased them at such a low cost in comparison with their face value. But that fact alone does not preclude Dion's good faith defense, since the low price can be justified by the associate's dire need for quick cash.In property law, a good faith purchaser of land pays value for the land and has no knowledge or notice of any facts that would cause an ordinary, prudent person to make inquiry concerning the validity of the conveyance.
John has been selling hot dogs on the street for 15 years. The town council then decides to require licenses for all street vendors. Because the measure includes a grandfather clause, John can continue selling his food without a license.
A complaint if filed against Bruno alleging that he seriously hurt someone in a barroom brawl and then fled the scene. The gravamen of the complaint is that Bruno seriously hurt someone.
The confession of two codefendants are improperly introduced at Vic’s trial. An appellate court may find that the violation was merely harmless error and does not require a new trial for Vic if the confessions had little or no effect upon the jury’s determination of Vic’s guilt.
Defendant Doug is on trial for robbing Victim Vinnie, Witness Walt wants to testify that Bartender Bart told Walt that Doug had admitted to Bart the commission of the robbery. Walt's testimony would be hearsay if it were offered to prove the truth of the matter (Doug confessed) since Doug did not tell Walt. (Note, however, that if Bart himself were to testify it would not be hearsay since he heard the confession and may be cross-examined about the circumstances). If Walt's testimony were offered for a purpose other than the truth of the confession (such as to establish that Bart was an extremely close friend of Doug and that Doug confided in Bart his closest secrets), some courts would allow the testimony.Hearsay is prohibited due to the constitutional guarantee of confrontation (see confrontation clause); however, there are many exceptions to the hearsay rule of exclusion based on a combination of trustworthiness and necessity. Thus, official written statements, such as payroll records, where the declarant's statements are based on firsthand knowledge and where the officer is under an official duty to make the report (and hence has no motive to falsify) are admissible under the BUSINESS RECORDS EXCEPTION. Another common exception is made for DYING DECLARATIONS. Under this rule a statement made by a person with knowledge or hopeless expectation of his or her impending death is admissible through another who overheard that statement where the declarant is unavailable because he or she died. Originally it was strongly believed that a dying person would tell the truth; thus the witness' testimony as to what the dying declarant said became admissible both on the grounds of trustworthiness and necessity. Today, with more skepticism about the effect of religiosity of truth-telling, necessity remains as a major factor in determining admissibility. The question of the witness' credibility is subject to demeanor examination and cross-examination for bias, memory, etc. Some jurisdictions permit any admission by a party to be offered by his or her adversary in a civil proceeding through any competent witness as another broad exception to the hearsay rule.
XYZ Co is fearful of being taken over by a large international company; thereby losings its [coveted] independence. To prevent the takeover, it undervalues the worth of its real estate holdings (making XYZ Co appear unworthy of buying). The real estate holdings constitute hidden assets.
XYZ Co regularly buys promissory notes from stores that require the customers to sign these notes in return for merchandise. XYZ is a holder in due course of these notes, because XYZ has given value for them. That status thereby protects XYZ from [almost] all claims against the notessee bona fide purchaser
At Zack's trial for robbery, the prosecution wants to introduce evidence that Zack and his wife argue frequently. That evidence is considered immaterial nad is not allowed at the trial.
Ben asserts his privilege against self-incrimination when the grand jury asks probing questions about his activities. If the grand jury gives Ben immunity from criminal prosecution for anything to which he testifies before the grand jury, Ben can no longer use the privilege. The privilege is only available when Ben is subject to prosecution for what he says, a fear that the immunity eliminates.
Jenny conveys an indefeasible estate to Johnny. Therefore, Johnny has perfect title to the land. With that, he can do whatever he pleases [with the indefeasible estate], because there is no circumstance that can deprive him of title.
John buys a piece of land from Kat. Unbeknownst to John, the land was encumbered by a lien (for several years of back taxes that Kat had not paid). John pays the taxes but has a right of indemnity against Kat – for the tax liability.compare contribution
John signs a personal check, and on the back of it he writes “pay to Jane”. Jane, therefore, is the indorsee. John – on the other hand – is the indorser.In the absence of fraud/illegality, an indorsee has all of the right/title/interest – in a negotiable instrument – that the indorser previously had.
John writes a personal check, and he drops it on the floor. Jane finds the check, signs it on the back; and deposits it in her credit union. As the indorser [of the check], John is still liable to pay the money.
Jane is arrested for tax evasion. She decides to handle her case by herself (ie, , without the assistance of an attorney – pro se). Since she has a 6th Amendment Right to an attorney – and to have one appointed if she cannot afford one – a judge must ensure that her decision [to operate pro se] is based on informed consent. Such consent would include an understanding of: (i) her right to an attorney; and (ii) what her decision entails.Informed consent is also used in tort law. For illustration, a patient must be told the nature & risks of a medical procedure before the physician can validly claim exemption from liability [for battery; medical malpractice; etc.).
a landlord refuses to supply his tenants with heat during the winter months. Regardless of the reasons for the 's action, a court might issue a mandatory injunction forcing the landlord to supply heat.'PERMANENT INJUNCTION: one issued upon completion of a trial in which the injunction has been actively sought.
Federal law prohibits discrimination based on race. May, a black woman, is refused a job because of her race. Even if she gets another job and although no physical injury resulted to her, she has been injured in the eyes of the law and can pursue a monetary remedy or an award of the job she was refused.
XYZ Co. borrows money from a bank – to pay its own overdue debts – in the hopes that XYZ’s business will improve. That hope is not realized. Thus, payments to the bank (as well as to other creditors) begin to develop again. Ultimately, XYZ gets finally declared insolvent. If any assets remain in the company, then XYZ’s creditors and/or a court will divide them in some fair fashion.
ABC Co wants to insure supplies of wheat over the next five years. So, it writes an installment contract [with a farmer’s cooperative] to deliver monthly shipments of wheat to ABC Co over the five-year period. The contract also requires ABC to pay the cooperative over the [same] five-year period.
a professional basketball team drafts John – the best player in college. His contract will pay him ten million dollars per year – for three years. John’s exciting style of play will generate twenty million dollars per year – for the team. As such, the team has an insurable interest in John, and it takes out an insurance policy [on him] (to protect their investment).
John buys a life insurance policy. Thereby naming his wife (Jane) as the beneficiary. If John dies (while the policy is in-force), then the insurer will pay [a death benefit to] Jane. Therefore, John is the insured person (as well as the policyholder).3. the person who contracts for a policy of insurance (which indemnifies him/her – against loss of property/life/health/etc.)
Fran wins a suppression motion to exclude certain evidence against her in an upcoming trial. Before the trial begins, the prosecutor seeks leave from the judge to file an interlocutory appeal from the suppression order, rather than wait until the trial is concluded before appealing the judge's ruling on Fran's motion. If the prosecutor's request is granted, Fran's trial will not proceed until an appellate court rules on the motions.
The Pope family sues Durable Paperboard Company for using chemicals that contain carcinogens in phone repair products. Two other companies use the same chemicals and fear that a decision adverse to Durable will result in many lawsuits against them based on the same claim. The companies therefore seek to intervene in the suit between the family and Durable.
Jane's will declared that any part of her estate – that was not specifically distributed to someone else – be divided among her issue. Her children tried to claim the full amount of this residual property, but – as the childern were reminded by the court [in a lawsuit against them] – "issue" refers to all descendants (including children; grand-children; and other descendants).4. in legal practice, the term "issue" refers to a point of fact/law that is disputed between parties [in the litigation]. In general, an "issue" is an assertion by one side and/or a denial by the other.
John & Jane are a married couple, and they have a daughter named Jenny. John & Jane decide to buy a life insurance policy; naming Jenny as the beneficiary. It is a joint lives policy. Therefore, Jenny will receive the death benefit after both of her parents perish (ie, after both John & Jane die).
three co-workers develop a new method of marketing ice cream. So, they establish a joint venture; thereby: (i) limiting business activity to the marketing scheme; and (ii) obliging each associate to contribute enough money for the joint venture to last one year. If the venture is not successful by that time, then: (i) all remaining money will be distributed to the associates; and (ii) the venture will be dissolved.
Robin files a lawsuit but inadvertently names the wrong parties as defendants. When her case comes to trial, it may be dismissed as against the people she wanted to sue because they were not named. That dismissal would not be a judgment on the merits. Since the court's action in doing so is necessitated by a procedural error committed by Robin.JUDGMENT ON THE PLEADINGS see SUMMARY JUDGMENT (below)
Kristen claims that on the day of the accident the roads were very slick as a result of a torrential downpour. However, the victim of the accident brings in several weather maps and reports showing that for seven days prior to and including the day of the accident, there was not a single raindrop. A court can take judicial notice of the maps and reports.
A governor is required by law to extradite a person sought by another state when that state institutes proper legal proceedings. Still, the governor may decide not to extradite if, for example, he or she sees an obvious life-threatening situation should the person be returned to the state seeking him or her. In such instances, a court will usually deem the failure to extradite as a nonjusticiable controversy and will take no action to force the governor to extradite.
Believing that he had good title to property, Kareem constructs an office building and fully rents it out. George watches Kareem construct the building and waits an additional ten years before asserting an ownership interest in the property. A court might apply the doctrine of laches and bar George's claim for two reasons. George was aware of the construction and took no action until the building was completed, a point at which Kareem had invested a considerable amount of money. Also, George took an inordinate amount of time to raise his claim.
John buys a life insurance policy. As long as he continues to pay his [monthly] premiums the insurer will keep his policy in force (subject to grace periods). Three months pass, however, without John making any of his monthly premium payments. Therefore, his policy lapses (ie, his life is no longer insured).
a car engine part was prone to breaking apart (after 200 miles of driving); thereby causing the engine to fail entirely. The part, however, was inside the cam shaft; and, thus, could not be detected without dismantling the engine. As such, the faulty part was a latent defect of the engine.compare patent defect.
a judge schedules a pre-trial hearing to decide what evidence will be allowed at trial. Each party is given an opportunity to make arguments, and the judge decides not to allow a statement by one of the plaintiff’s witnesses. At trial, the plaintiff attempts to argue for the introduction of the statement. Because of the pre-trial decision, the judge applies the law of the case doctrine and refuses to allow the introduction of the statementCompare collateral [COLLATERAL ESTOPPEL]; double jeopardy.
the domicile of the owner is presumed to be the situs of personal property for taxing purposes regardless of where it is actually located.The term legal fiction commonly occurs in cases where adherence to the fiction is perceived as working an injustice. Thus, when the personal property has never been in the state where the owner is domiciled and it would clearly be unfair to tax the property, the court will dispense with the situs presumption as a mere legal fiction.
Jane runs a red light and hits another car; injuring both the driver and the passenger. Jane has incurred tort liability for her action.
Joan gets a license to be a hair stylist. Soon thereafter, she begins working in Zuri’s Hair Salon. If Joan’s license falls out of good standing then Zuri’s hair salon will terminate her employment. Moreover, if Joan departs Zuri’s Hair Salon (for any reason) then Zuri cannot transfer Joan’s license to anyone else (eg a new employee).compare franchise; lease; monopoly.
XYZ Co. has installed all the ventilation in an office complex. The owner of the complex falls into bankruptcy – and cannot pay Standard. By operation of the law of their state (where the work was done), XYZ has a mechanic’s lien (equaling the value of the work it performed). That lien attaches to the office complex, so that XYZ has a priority of payment for any money that is paid to the complex.
John owns a life insurance policy. Thereby naming his wife (Jane) as the beneficiary. After decades of marriage, John dies (thereby making Jane a widow). As the widowed beneficiary, Jane collects the death benefit ($100,000) on John’s life insurance policy
Safety Corporation and Fire Prevention, Inc., enter into a long-term contract whereby Fire Prevention supplies Safety with all the sprinkler systems Safety needs. Instead of leaving a damage figure to a court decision if either party should breach the agreement, the parties include a liquidated damages clause in the contract. That clause provides both a dollar figure and a formula for calculating damages with the higher of the two figures constituting the maximum damages either party could charge.
before a supplier ships any goods to XYZ Co, the supplier requires the company to sign a promissory note (explaining the payment terms; the dates; and obliging XYZ Co to meet those terms). XYZ Co, therefore, is the maker of the note, because since it is the party that has to make the payments.
Franz hopes to get re-elected and accepts a bribe to fund his campaign from the Widgets Corporation in exchange for the promise of providing them future government contracts. Franz has committed malfeasance.
A state legislature passes a law that provides that, upon request, a person has the right to see any information the government has on file for that person. Kathy files such a request with the State's Attorney General and is refused access to her information. Unless the refusing party can show some compelling need for secrecy, a court will issue a writ of mandamus to the holder of the records, directing the release of the information.see ministerial act
XYZ Co has $10B in direct written premiums. All of the companies – within the State of Alabama – have $200B in direct written premiums. Therefore, XYZ Co has a 5% market share (ie, 5% = 10÷200).
A contract between Natick, Inc., and a recording company called for 12 separate shipments of blank CDs. The first three shipments were defective and were returned to Natick. The recording company was falling behind in its production schedule when the fourth shipment arrived and that shipment was also defective. The four defective shipments constitute a material breach of the contract and permit the recording company to cancel the contract and perhaps to institute a lawsuit against Natick as well.
Sara and Henry wish to obtain a divorce. Hoping to avoid undue litigation and emotional trauma, they secure the help of a professional divorce mediator, who attempts a mediation of their affairs.
“a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practice or goods involved in the transaction or to whom such knowledge or skill may be attributed by his employment of an agent or broker or other intermediary who by his occupation holds himself out as having such knowledge or skill.”For purposes of implied warranty, a one-time seller is not a merchant if he/she: (a) is not engaged in the business of selling goods in question; or (b) does not hold himself/herself out as a person who deals in such goods.
John has the right to possess (and use a farm) until his death, at which time the land passes to Jane. Jane, however, has no desire to farm (or own a country house). So, she sells her interest [back] to John. Therefore, John’s right-of possession [until his death] merges with the interest he purchases from Jane. Thereby giving him full ownership of the land – forever. As a result, John can dispose of the property however he wants to.Similarly, when the owner of an easement becomes the owner of the land, the easement is terminated – by merging into the possessory interest.
John Doe has a life insurance policy. His annual contract premium is $100, but he pays $9/month for it. That $9 premium is his modal premium (notice how John’s monthly premium isn’t equal to 1/12th of his annual premium).
XYZ Co. is granted the exclusive right to supply natural gas to the southern part of a state. The right is granted out of convenience & necessity, since it would be impractical to have several gas companies running underground gas lines. Moreover, it is desirable to have the state control pricing of a necessary item. Thus – as a grant by the state – the monopoly in favor of XYZ Co is a lawful monopoly.see antitrust laws
Tina files a lawsuit against Private University, claiming that the university has denied her admission because of her race. Before the case reaches the trial court Private admits Tina as a student. Because of the school’s actions, the case between Tina and Private is rendered moot. Tina can no longer claim that race was a factor in denying her admission, since she has been admitted.
Jane employs a handyman (named John). Although John is neither Jane’s relative nor her financial provider, Jane tries to buy a life insurance policy on him. The policy would pay Jane $100,000 if John were to die. However, since Jane has no insurable interest in John’s life (ie, he’s more valuable to her if he’s dead than if he’s alive), her prospects form a moral hazard. Therefore, the insurance company refuses to sell her the policy.see BOLI; COLI; foreseeability; insurable interest;
John wants to buy Jane’s home [for $80,000]. He can afford a $16,000 down payment and is willing to assume Jane’s $64,000 mortgage. If the bank agrees to the assumption of its mortgage, then John will be personally responsible for the mortgage payments. If John should default, however, then the bank can still hold Jane liable. This is because she is the original mortgagor (unless she is released by the bank – as part of the assumption).
John borrows money from a bank. He thereby signs a promissory note [to repay the bank loan within twelve months]. That note is a negotiable instrument, and the bank can transfer it to any other party. Since the note is freely transferable, John does not repay it unless he knows who possesses it. So, he demands that – upon payment – the note be returned to him (to prevent it from being transferred to another party).
at 1AM, two car drivers get into an accident. Each claims that the other ran a red light. Under a no-fault insurance plan, the argument [as to who ran the light] is irrelevant. The plan provides each driver with compensation for his injuries (the compensation, of course, is to be paid by their own/respective insurance companies). If the injuries are substantial, then fault may be relevant. This is because a fault-based lawsuit is generally permitted – even in no-fault jurisdictions. Moreover, lawsuits can also be launched when injuries exceed a specified dollar amount. Nevertheless, under a no-fault system, most cases can be settled without litigation.
Neil sues Quincy for a debt incurred when Neil painted his house. One requirement of filing the suit is that Neil personally notify Quincy of the court action. After several unsuccessful attempts to meet Quincy and physically hand him a copy of the complaint, Neil satisfies the notice requirement by sending a copy to Quincy's business and hoeme addresses and by tacking a copy on Quincy's door. Quincy is considered to have received constructive notice of the action whether or not he actually learned of it.IMPLIED NOTICE notice that may be inferred from facts that a reasonable person had means of knowing but failed to inquire further. A person has no right to avoid information and then say that he or she had no notice. "Implied notice" is distinguished from CONSTRUCTIVE NOTICE (above), in that the latter rests upon strictly legal presumptions whereas the former is a form of ACTUAL NOTICE (above) arising from inferences of fact.
Ronit plans to buy an apartment complex from Maru. Upon touring the property, Ronit observes that all the apartments are occupied. Upon purchasing the property, he is shocked to find out that the tenants have long-term leases. His failure to follow up on the information that the units were occupied will prevent any claim that he had no notice that existing tenants came with the property.INDIRECT NOTICE see IMPLIED NOTICE (above)
Jane rents an apartment in an apartment complex. In the adjacent apartment, a politically active group meets very frequently – at late hours. That adjacent apartment is never used for sleep. Even if the group’s activities are legal, Jane has a nuisance action against them. The reason is because: (i) their late hours disturb her; and (i) they are not using the apartment for its normal/intended purpose.
Geneva possesses telephone recordings of a contractor offering a bribe to secure a construction grant. When Mack, another contractor, sues to have the grant overturned because of the possibility of a bribe, he requests that Geneva give him the recordings. If Geneva destroys or otherwise loses the recordings after they are requested, she will be charged with obstruction of justice.Statutes addressing this subject may reach beyond interference with the judicial process and also proscribe interference with police officers and other such administrative officials.
a representative of XYZ Co sends a letter to a large outlet store informing them of an overstock (in several types of bricks the company is hoping to eliminate). The store responds that it will buy the full overstock – for the price stated in XYZ’s letter. Plus, the store includes a check [with their response]. The store views XYZ’s letter as an offer. So, by sending a positive response – and a check – to XYZ, the store believes: (i) that a bargain has been struck; and (ii) a valid contract has been established.2. a promise/commitment to do (or refrain from doing) some specified thing in the future
A motorist sees an accident on the highway late at night but fails to call anyone, although he possessed a working cell phone. As a result of that omission, one of the victims of the accident dies. Although common standards may view the motorist as somewhat responsible for the death, the motorist cannot be found liable in a court of law since he has no legal duty to report the accident. If he had been involved in the accident, he would have had a legal duty to summon help and his omission in that instance would be the subject of civil and possibly criminal action.
The Constitution of the United States provides that the Supreme Court has original jurisdiction in all cases affecting ambassadors. Notwithstanding any issue of diplomatic immunity, if an ambassador from France were sued, the Supreme Court, rather than some lower court, would hear the case.
John and Jane own a large piece of undeveloped land (as tenants-in-common). John uses his ownership interest to obtain a loan from the bank. When he defaults on the loan, the bank can seek a partition of the land. With a partition, the bank owns one-half of the land, and Jane owns one-half. Subsequent to a partition, the parties own particular portions of the land. If the land cannot be divided equitably, then the land will be sold (and the proceeds divided).
Ball Corporation is the largest maker of a chemically based ceiling tile, although other smaller companies also produce the product. The tiles were installed in school buildings, and the chemical in them has had an adverse effect on the children. it could not be determined which company's tiles had been used, but only the smaller companies are named in a suit by the children. Ball is never mentioned. The other companies want Ball named as an indispensable party because, by numbers alone, it is most likely that Ball's tiles were used in schools. Ball also wants to be named because it fears that a judgment against the other companies will be used against it, even thoug hit did not have an opportunity to participate in the litigation, and because otherwise a favorable outcome for the other companies would not prevent Ball from being sued later for the same thing.NECESSARY PARTY: one whose interests will be affected by the suit or without whom complete relief cannot be granted, but who will not be joined if doing so would deprive the court of jurisdiction in the case.
John examines a warehouse space prior to renting it for himself. Normal examination would reveal that water leaked into the warehouse in several spots. Nevertheless, John moves his property into the warehouse. Unfortunately, some of it is subsequently damaged [by water]. Since the leakage was a patent defect (one which John should have discovered), John cannot sue for the damage.Compare latent defect
John dies without a will. His wife has predeceased him, and he is survived by two children. A third child has also predeceased him but has left two children. Under a per stirpes distribution, John’s two children each receive one-third of his estate. The remaining one-third is distributed to the children of the third child – who had predeceased Frank.
Sheila is charged with robbery. At her trial, Tomas, Sheila's boyfriend, admits to the crime, which results in a "not guilty" verdict for Sheila. Because of a procedural technicality, Tomas cannot be tried for the robbery. But if the prosecution can prove that Tomas lied about committing the crime, he could then be prosecuted for perjury.
John agrees to buy Jane’s house. Their contract covers only the land and home – not any of Jane’s personal property. Therefore, this agreement allows Jane to remove clothes/furniture/rugs/etc but not the heating system.
The prosecutor introduces very prejudicial evidence at Roy’s trial. The judge fails to instruct the jury to limit their consideration of that evidence, despite the obvious need for such an instruction. Roy is convicted and the case is appealed. Even though Roy’s attorney did not object to the introduction at the time it occurred – a procedure that would normally be required before a new trial could be granted – the appellate court may apply the plain error rule and grant Roy a new trial.Compare harmless error; miscarriage of justice.
John is arrested for unlawful possession of handguns (found in the trunk of his car). John argues that he did not have actual possession of the guns, since the trunk was locked, and he was driving the car. Although that fact may be true, he is still liable for prosecution, because he had constructive possession (evidenced by the fact that he’s the only person with keys to the trunk).
a trust instrument [created by a grandmother] gives [her son] a special power of appointment – to distribute the income generated [by the trust principal] to all of the grandmother’s living grandchildren. The son has no power to touch the principal, but he has discretion to determine which grandchildren get how much of the interest.
Jane’s will leaves her home to Joey. Other language in the will provides that if Joey ever sells Jane’s home, then she hopes he sells it to some other member of the family. That precatory language creates doubt as to: (i) whether Joey has an obligation to sell the house to another family member; and (ii) what will happen if Joey sells it to someone else.
Burton writes a check to a car repair establishment that the bank refuses to cash. The law in Burton's state establishes a presumption that he knowlingly intended to write a bad check if (1) there is no account in Burton's name at the bank named on the check or (2) the shop was refused payment for lack of funds within thirty days of the date on the check and Burton did not pay the amount owed within ten days of being informed of the bank's refusal to honor the check.
Sylvain is caught with untaxed cigarettes. In the state where he is caught, untaxed cigarettes are designated prima facie contraband and are immediately subject to forfeiture to the state.
Tara buys property for Sphinx Mall Company. Sphinx desires to be an undisclosed principal because it believes that land prices would skyrocket if sellers knew the identiy of the real purchaser.
All citizens of a county are required to be available for jury duty. Doctors are privileged to avoid this requirement, because of their constant need to attend to their patients.
Joaquin discusses with his attorney a past wrong he is alleged to have committed. If the attorney is asked to discuss this without Joaquin’s permission, she will not be permitted to do so since the communication was privileged.
Jane sells some of her land to a neighbor, who [by the sale] acquires ownership of a lake. Three months later the neighbor conveys to Jane the right to use the lake. Jane then sells her portion of the land to another party. That party does not have the right to use the lake. The requirements of horizontal privity are not met, because the covenant is made after the transfer of the land between Jane and the neighbor.
Tamara files a lawsuit against a company, but the company never responds. before entering a default judgment against the company, the judge demands proof that the company was served with notice of the suit. Without such proof, the judge cannot be sure that the company knows there is a suit against it.
John deposits one of his customer’s checks [in the bank], but the check is returned [for insufficient funds in the customer’s account]. So, John files a protest [with the customer]; demanding that customer must pay the debt in cash.
John sets up a trust for his two sons; naming his bank as trustee. The trust instrument, however, doesn’t define how the trust principal should be invested. Nevertheless, the trustee is bound [by the prudent-man rule] to purchase securities that: (i) may not offer the highest return possible; yet (ii) are very safe investments.see also trustee.
John wants to construct a tall office building, but he needs part of the sidewalk that is adjacent to the area. The city is willing to allow this infringement of a public easement if John will provide other access to the public (eg, an open passageway through the building; or an alternate facility for public usage).
John puffs his cutlery by stating that it’s the best-quality cutlery that money can buy. A purchaser of these utensils then finds a nearly identical set that costs less money. John’s comments, however, cannot be taken as facts. Nor can they give rise to a lawsuit [against John] – by the customer (for misleading advertising/etc.).
Today, Joe buys a put option. It gives him the right to sell 1 share of XYZ stock – in two months (at $20 per share). The stock option costs $1 (which Joe pays immediately). He hopes that – in two months – the stock will be worth less-than $20 (per share). As it turns out, the XYZ stock is worth $30 at the exercise date (ie, 2 months later). Therefore, Joe does not exercise his put option. Thus, he avoids selling his share of XYZ stock.
Today, Jane buys a put option. It gives her the right to sell 1 share of XYZ stock – in two months (at $40 per share). The stock option costs $2 (which Jane pays immediately). She hopes that – in two months – the stock will be worth less-than $40 (per share). As it turns out, the XYZ stock is worth $30 at the exercise date (ie, 2 months later). Therefore, Jane exercises put call option. Thereby receiving $40 for a $30 stock
Today, Kendra buys a put option. It gives her the right to sell 1,000 shares of XYZ stock – in two months (at $40 per share). The stock option costs $2 per share (totaling $2,000 – which Kendra pays immediately). She hopes that the stock price falls during the two-month wait (ie, it gets “in-the-money”). One month later, though, the underlying stock price rises to $50/share. Moreover, her put option also falls in value; thereby reaching $1 per share. Therefore, Jane keeps her put option. At the exercise date (ie, two-months after her [original] put option purchase), the stock price has fallen to $30 per share. Therefore, Kendra exercises her put option. Thereby selling 1,000 shares [at $40/share] for $40,000 [total].
A car owner brings his car in for brake repairs. The mechanic fixes the brakes and in doing so he also fixes a separate part of the axle that has a direct relationship to the car’s ability to brake correctly. Although the axle repair was not specifically contracted for, a quasi contract is implied for which the owner must pay the mechanic.
Two parties stipulate [agree] on the facts of the situation in which they are involved. The judge is then asked to only rule on the question of law that those facts present.
XYZ Co agrees to lease a warehouse that is owned by a landlord. When XYZ’s lease is set to begin, though, the previous tenants are still there in the warehouse. Their presence violates the company’s right to quiet enjoyment. A few states may place the burden of removing the tenants on the company. Most states, however, place the burden on the landlord. In those states, XYZ Co could rescind the lease (without penalty) if those tenants fail to leave within certain amount of time.The covenant may be – and often is – included in a deed [conveying title to property]. If it is present in a deed, then the grantor is obligated to protect the estate of his grantee [against lawful claims of ownership by others].
John believes he is the rightful owner of a parcel of land, but there is a question concerning the transfer of the land [25 years ago]. In order to quell any doubts so that he may sell the property, John brings a quiet title action (to confirm his ownership of judicial decree).
John buys stock for $5 a share. Ten years later, he sells the stock for $15/share. Therefore, John has a realization of $10 (on each share), and he must pay tax on the total gain. Had, on the other hand, the stock sold at $1/share, then John would have experienced a loss of $4/share. Therefore, his income would have reduced by that amount (before his tax liability got calculated).
XYZ Co. finds that the amount of its outstanding loans [to banks] is greater than the corporation wants. The directors recapitalize the corporation – by exchanging shares of the corporation’s stock for money [to repay the loans]. As a positive byproduct, XYZ subsequently receives additional equity investors (due to reducing of its debt).Recapitalizations are common when public companies emerge from bankruptcy.
The Antique Furniture Company is heavily-indebted to several creditors, and is only showing average sales. In a court-approved agreement (between the owners of the company and the creditors), Antique is placed in receivership. The court appoints a receiver to oversee Antique’s expenditures. Plus – at the same time – the Court orders the creditors to (i) settle for a partial payment of the debt; and (ii) dismiss the remaining debts [against Antique].Compare bankruptcy.
A court rule provides that a judge must inform a person convicted of a crime of his or her right to an attorney to pursue an appeal if he or she so desires. Since all comments by the judge are transcribed, a record is produced that will eliminate any question whether the person was informed of his or her rights.
Zhang Wei has been before a judge several times on criminal charges and has been acquitted each time. After each trial, the judge makes certain disparaging comments indicating to the press that he believes Zhang Wei is guilty. When Zhang Wei comes before the judge again, Zhang Wei seeks a recusal based on the earlier comments. Zhang Wei contends that the comments indicate prejudice on the judge's part and will prevent his getting a fair trial.In most states, a judge may also be disqualified because he is related within certain degrees to a party litigant.
The EPA was created by congress to protect the quality of the nation’s air/ water/land. Pursuant to that goal, the agency monitors: (i) air pollution in cities; (ii) sewage treatment plants; (iii) chemical landfills; and more. The FTC, on the other hand, regulates commercial practices (and takes action against: (i) deceptive advertising; and (ii) monopolistic activity).There are many federal/state regulatory agencies that enforce the federal/state policies in particular areas of governmental regulation.
XYZ Co. sells 1,000 life insurance policies. Its total amount in-force is 10B. XYZ is worried that it might suffer dramatically large losses – in any given year. Therefore, it enters into a reinsurance contract with ABC Corporation. ABC agrees that it will pay 1B to XYZ – if XYZ suffers 2B in claims this year. As such, ABC is the reinsurer providing reinsurance to XYZ (the insurer).
Carlos ordered 200 items at a set price from a company that happens to be the only manufacturer of the item. Although his order has been produced, the company refuses to deliver unless Carlos pays a price increase. Carlos seeks relief from a court, which in this instance should be to order delivery since the item cannot be purchased elsewhere.The term generally does not comprehend an award of money damages. Thus the term AFFIRMATIVE RELIEF is often used to indicate that the gist of relief is protection from furture harm rather than compensation for past injury.
a grandfather conveys a house to his son for life, then to his oldest grandson. The grandson has a vested remainder in the house since he is entitled to it at the son’s death. If the grandson pre-deceases the son, the house is distributed according to the provisions of the grandson’s will.
John leaves a shipment of goods in a warehouse, and he prepays storage costs [for three months]. At the end of that time, he goes to pick up the goods, but the warehouse refuses to release them (until he pays for the storage). Therefore, John sues for replevin – to obtain his withheld goods.
A store owner sues Annika for failure to pay a debt. Annika files a counterclaim against the store owner claiming that the washer and dryer Annika purchased, which gave rise to the debt, have never worked properly. The store owner can reply to the counterclaim that he is not responsible for the problem or that Annika has not operated the machines correctly.
John Doe sues Company XYZ for employment discrimination. In order to win his lawsuit, Mr. Doe needs to collect [relevant] information - from a variety of sources. One such source is Company XYZ (itself); who has Mr. Doe’s personnel records. Thus, Mr. Doe sends Company XYZ an RFP; thereby asking the employer to provide his personnel records (among other things).
Jane creates a trust for her children; providing that the rentals [from an office building] be distributed to each child [month]. The office building is the trust res – since it generates the income that is distributed to the children.In a QUASI IN REM (see quasi) proceeding, land (or chattels) that are seized (and attached) at the beginning of the action – in order that they may later be used to satisfy a personal claim) – are the res of such suits. The term refers as well to the status of the individuals. Thus, in a divorce suit, the marital status is the res. The purpose of a res is to establish a court’s jurisdiction. If the property lies within the state where the action is brought (or an individual in a divorce action is a domiciliary of the state) then jurisdiction is established.
In his will, John leaves his antique car to a cousin (who subsequently predeceases him). He also provides a residuary clause that leaves any of his property – that has not already been disposed of in the will – to his oldest son. In addition to receiving all of John’s property [that was not left to others], the son – as the residuary legatee – also receives the antique car.
Two parties litigate an issue in one federal disctrict court, and the defendant loses. Under the principle of res judicata, the defendant could not then go to another federal district court and litigate the same issue a second time.Compare collateral [COLLATERAL ESTOPPEL].
A truck driver employed by a manufacturing company causes an accident while delivering a shipment to a buyer. The doctrine of respondeat superior allows the victims to sue the company for any injuries caused by the driver. Under normal principles of tort responsibility, the driver can also be sued. Since it is unlikely that he has the money to pay a damage award, the doctrine acts to assure that the victims will be paid the full amount of the award because the company by law will be required to carry adequate insurance or have sufficient assets for such contingencies. Absent this doctrine, companies would be able to hire judgment-proof drivers and in that fashion avoid all liability for injuries caused by such drivers.
When John sells a plot of land next to his house, he includes a restrictive covenant with the deed. That restriction states that no structure that is higher than two-and-one-half stories tall can be constructed on the land. Since the covenant is included with the deed, it is valid against any/all other purchasers [of the land].
the president wants to increase the federal excise tax on gasoline – by five cents – to raise revenues needed to repair the nation’s roads & bridges. Knowing that the president is anxious to approve the bill, a senator attaches a rider to it. The rider provides for an unrelated measure that the senator was having difficulty getting support for [by itself] (see tacking).
John (a buyer) enters into a contract with XYZ Co.. Therein, John agrees to assume risk of loss – only when the boat is in his possession. Therefore, if anything should happen to the boat before it’s delivered to John, then – from John’s point of view – XYZ co. must take responsibility for the damages.2. In insurance law, the term refers to the contingencies (ie, the unknown events) – that are contemplated by the insured (and that are covered by the insurance).
John divides a large building so that he can sell one-half to another businessman. There is only one alley through which deliveries can be made, though; and the alley is on John’s [side of the property]. In the deed of sale, John includes a covenant that allows the other businessman to use the alley. That covenant runs with the land – so that anyone who buys the store [from the other businessman] can enforce the covenant against any owner of the other half of the building.compare chain of title
John owes money to several creditors – as a result of work they performed on his building. He avoids the creditors, and they obtain a judicial order demanding payment. His continued refusal to pay results in a forced sale of the building. The excess of the sale price [over the money owed] is returned to John.
a lease provides that the tenant shall save harmless the landlord against claims for injuries [to persons on the premises]. As a result of this clause, the tenant is required to reimburse the landlord in the event such a claim is successfully prosecuted (and damages are recovered against the landlord).
A corporation files a registration statement, containing false representations, with the Securities and Exchange Commission so that the corporation may sell stock to the public. Applicable law holds a party liable if with scienter he or she signs a statement that contains false representations. The requirement of scienter means that the party must know of the false representations and know thtat the statemnt will be used to deceive others into purchasing stock.
John works as a professional limo driver for XYZ Co. One day, he decides to visit his house – during his shift. As he drives to his home, though, he crashes into a child. XYZ will not be responsible for the child’s injuries if John was not in the scope of his employment [at the time of the crash].see implied consent; occupational hazard; respondeat superior; vicarious liability
John receives a check for a debt owed to him. He signs the check and turns it over to Jane (to whom he owes money). John is secondarily liable on the check, so that if the check is dishonored, then Jane can look to John for payment.see co-signor
in order to obtain a loan from a bank, John uses a pricey painting as collateral. The bank has a security interest in the painting; and can acquire ownership of it – if the loan is not repaid.
John – who owns several apartment houses (that are fully rented) – conveys them to Joe. Therefore, Joe is seised of the buildings (ie, he has legal title to them). However, since the tenants have leases – that allow them to remain in their apartments – Joe cannot do whatever he wants to the buildings (until all the leases expire).
John’s car is stolen. Two weeks later he sees it in a downtown auto repair shop. John can employ self-help by driving the car home – without calling the police [to aid him]. Likewise, since John had defaulted on his car loan, his creditor could come and take the car – without legal process [so long as there is no breach of the peace] – to satisfy the debt.
John borrows $100 worth of stock [from Jane]. He promises to return the stock to her by tomorrow. Jane agrees; and John immediately sells the borrowed stock (receiving $100). At the end of the day, the stock price has fallen to $80. So, John buys the stock back. At which time – and as agreed – John returns the stock to Jane. As a result, he has netted $20 [in sales profits].
The prosecutor believed that defense witnesses might alter their versions of the facts if they were permitted to hear the State’s witnesses testify. To avoid that problem, he asked for the sequestration of all witnesses. The judge agreed and excluded all potential witnesses from the courtroom until they were called to testify.
John works for XYZ Co. as an actuary. In order to perform analysis on XYZ’s policies-in-force, John decides to examine the records in seriatim fashion.
A company is accused of discriminatory hiring practices by the Equal Employment Opportunity Commission (EEOC). The Commission will usually file with the company a notice of its accusations and will attempt to reach a settlement before looking to the courts. That method generally gives each party more flexibility. In certain instances, a judge may have to approve the settlement.compare plea bargaining
A group of prisoners petitions a court to allow them greater visitation rights than their present one-visit-a-month allotment. The judge is inclined to agree with them and orders prison officials to show cause why greater visitation privileges should not be granted immediately. The officials must then provide at least some rationale for the limit, or the court will order a change, pending a trial on the petition.
a university borrows money from a bank to build a library. In its appeal to alumni, the school stresses that it wants to develop a sinking fund to pay off the loan. It is hoped that the fund will generate enough interest income so that the principal is never reached.in government bodies, a sinking fund – whose sources are taxes/imposts/duties – is appropriated toward payment of interest on a public loan (and for eventual payment of the principal).
A state wants to build a highway that requires the use of private property. Negotiations with the property owners fail to persuade them to sell to the state. The state can then use its sovereign power of eminent domain over all property within the state to take private property and put it to public use upon payment of .
John is well-known for his ability to spend large sums of money quickly – and foolishly. Fearful that his habits may one day leave him without enough to live on, his mother creates a spendthrift trust – with John as beneficiary. The trust is restricted so that he receives only interest. Plus, it prevents him from invading the principal –except with special permission.
Payne, a resident of one state, files a suit claiming that another state prevents its own citizens from voting. Since Payne is not affected by the fact that citizens of another state may not be getting the opportunity to vote, he has no standing to bring this challenge. There are procedures whereby a court has the discretionary power to allow Payne to participate in a suit if someone files it who does have standing. Payne might also have standing in the suit first referred to if the challenged state action adversely impacts on a national election that affects Payne.
A state supreme court rules that a person's privacy interests demand court protection of telephone toll records from police investigations. Several years later, the issue is brought back to the court. The prosecutor claims that other states allow the records to be used without interference in privacy and that other privacy protections can be employed if necessary. Even if some new members of the court agree with the prosecutor, the court most likely will apply stare decisis and abide by the previous decision.
An apartment dweller is found in default under his lease. He seeks a stay of execution of the eviction order until he can make new living arrangments. A stay may be granted, but not for an excessively long time.
Jane’s will declared that any part of her estate – that is not specifically distributed to someone else – be divided among her issue. Her children tried to claim the full amount of this residual property, but – as the children were reminded by the court [in a lawsuit against them] – “issue” refers to all descendants (including children; grandchildren; etc).see private offering; secondary distribution
Today, Joe buys a call option. It gives him the right to buy 1 share of XYZ stock – in two months (at $20 per share). The stock option costs $1 (which Joe pays immediately). He hopes that – in two months – the stock will be worth more-than $20 (per share). As it turns out, the XYZ stock is worth $30 at the exercise date (ie, 2 months later). Therefore, Joe exercises his call option. Thereby paying [only] $20 for a $30 stock.
Today, Jane buys a call option. It gives her the right to buy 1 share of XYZ stock – in two months (at $40 per share). The stock option costs $2 (which Jane pays immediately). She hopes that – in two months – the stock will be worth more-than $40 (per share). As it turns out, the XYZ stock is worth $30 at the exercise date (ie, 2 months later). Therefore, Jane does not exercise her call option.
Today, Kendra buys a call option. It gives her the right to buy 1,000 shares of XYZ stock – in two months (at $40 per share). The stock option costs $2 per share (totaling $2,000 – which Kendra pays immediately). She hopes that the stock price rises during the two-month wait (ie, it gets “in-the-money”). One month later, the underlying stock price rises to $50/share. Moreover, her call option also rises in value; thereby reaching $5 per share. Therefore, Jane sells her call option (at $5/share); netting a $3,000 total profitsee call option; put option.
the shareholders of a corporation believe that the corporation is not pressing a debt owed to it by another company. The shareholders bring a stockholders’ derivative action – to force the officer to take steps against the other company (to secure payment).see ex. rel; qui tam
Adrienne harbors wild animals on her estate. A child accidentally enters the estate and is harmed by one of these animals. Adrienne will usually be held strictly liable for the injury regardless of the fact that the child did not belong there or that the child scared the animal. Society imposes that cost on Adrienne merely for keeping the animals.
A party files a lawsuit and the opponent replies, so that both parties are prepared to litigate the issue. If the judge realizes for some reason that he has no jurisdiction over the case, he will on his own initiative dismiss the case. His action is taken sua sponte.
John (a fee owner) conveys to Jane [for life] and conveys the remainder to Jane’s children. At the time of the grant, Jane has one child (Jenny). Jenny has a vested remainder subject-to-open (to let in later-born children). Thereafter, Jane gives birth to Joey and Jessy. Upon their births, the remainder: (i) opens; and (ii) vests in Jenny, Joey, and Jessy – as tenants.“subject to open” is also known as “subject to partial defeasance”
Jane has two years remaining on her rental agreement when she: (i) marries John; and
(ii) moves into his apartment. Except in rare circumstances, Jane will be able to sublease her [own] apartment to someone else. Yet – unless the landlord makes a different arrangement – Jane is still responsible for seeing that rent is paid each month.
Several years ago. Wynn was a marketing consultant to a large firm. The firm is being sued by a company that claims the firm gave it false information. Wynn is not personally being sued, but is issued a subpoena duces tecum to testify at the trial and bring with him any papers relevant to the firm's relationship with the company.
While making a delivery, a utility company performs its task negligently. As such, John’s home burns down. Thankfully, his home is protected by fire insurance. Thus, John’s insurance company pays him for the damages. As a result, John’s claim [against the utility company] is then subrogated to the insurance company. This subrogated insurance company will be entitled to collect/recover damages – from the utility company
John rents space in a warehouse, but he finds that he does not need the full amount that he rented. So, he leases part of that [unoccupied] space to Jane (who happens to need some storage space). Jane (who is the subtenant), may pay rent to either: (i) John; or (ii) the warehouse owner. Nevertheless, John is still liable for the full rent (unless some other agreement with [the warehouse owner] is reached).compare assignment [ASSIGNMENT OF A LEASE]; see substitution; subrogation
a long-term contract includes a very technical formula – for determining the cost of wheat. The formula allows for fluctuations in: (i) the market;
(ii) the weather; and
(ii) other factors. Although the price can therefore vary each time a price is paid, the fact that there is a formula means that the contract includes a sum certain.
Dale erects a structure on his property that almost completely blocks the sun from the pool area that his neighbor just built, and the neighbor sues Dale to remove the structure. Dale and the neighbor agree on that set of facts. The only question is whether Dale may do as he wants, which in his instance is a question of law. Both parties, therefore, seek a summary judgment supporting their respective positions.see directed verdict
Nico sues a landscaper for installing a defective sprinkler systems. His attorney prepares a summons notifying the landscaper of the court action. The clerk of the court stamps the summons, and it is then isued.See process; service. Compare subpoena.
The United States Supreme Court rules that no person can be arrested in his or her home without an arrest warrant issued by a judge. Regardless of the procedures the various states used before the supreme Court decision, the Supremacy Clause mandates that the Supreme Court's decision govern future police practice.'
XYZ Co. wants to issue bonds so that it has enough money to develop a new product. The problem, though, is that XYZ Co has a poor reputation. One which is causing would-be investors to be unwilling to buy its bonds – without some guarantee. Therefore, XYZ Co seeks a surety; who will thereby guarantee payment – to XYZ’s bondholders – of XYZ’s bonds.see bondsman
a state imposes a tax on “the privilege of doing business” in the state. As long as the tax is only imposed on the income that the corporation earns in the state (or on the value) of the corporation’s assets in the state, the tax is a valid franchise tax on the corporation.
a state requires a bus company to obtain certificates of title to operate their buses in that state. The certificates will not be issued until a tax is paid, based on the fair market value of the buses. The tax is permitted as a use tax to offset the cost of maintaining the state highways.
John – who is in a high tax bracket –choose to invest in real estate. His aim is to take advantage of tax losses that these investments create. John, in effect, is using money – that he would have [otherwise] paid in taxes – to offset part of his investment. Moreover, if his investment is a good one, he may also make a profit when he sells his interests. These types of investments are referred to as tax shelters.see tax exempt; tax preference items; tax evasion; tax avoidance; universal life insurance
XYZ Co. contracts with a books wholesaler to distribute XYZ’s books nationwide. XYZ arranges to have the books shipped to the wholesaler’s main warehouse (on a specific date), and the wholesaler agrees to pick them up there. XYZ fulfills its obligation, but the wholesaler does not take the books on the date agreed upon. Two days later, the books get destroyed (by fire). Since XYZ completed its tender of delivery, the wholesaler must pay for the damages.
John owns 100 shares of stock. He makes a gift to Jane as follows: “To myself for life, then to Jane.” The gift [to Jane] is a testamentary disposition – since it does not take effect until John’s death.
a group of friends purchase a condominium at a ski resort. They develop a time-sharing arrangements to fit each person’s desire. To be specific, John reserves two weeks in May; Jane reserves three weeks June; and so-on. Unless the agreement states otherwise, John – as an owner – can do whatever he wants with the condo – for his two weeks (including leasing it to his family).
John’s car is stolen. The thief sells it to Jane (who pays a fair value for the car and has no knowledge/suspicion that it is stolen). John still has superior title to the car [over Jane] even though Jane paid money for the vehicle. As a basic principle of law, a person cannot [ordinarily] take title from a thief.
State law provides that a person has 45 days to file an appeal from a conviction and that a judge must inform the person of that limit. At the end of Randolph's trial, the judge fails to inform him of the limit. When he is informed five months later, it is technically too late to file. A court may toll the 45-day limit until Randolph is informed of its existence, which in this case would be five months after the conviction. If an appeal is then not filed within 45 days, the opportunity will not be granted again.'2. charge for the use of another's property
Chandler places a large object on a railroad track to see what happens when it is hit by an oncoming train. The train derails in a set of circumstances that would not have occurred if there had been no object on the track. Chandler has committed an intentional tort agains the railroad and its passengers. He committed a crime as well.
John works for XYZ Co (a liquor company). Although the liquor’s formula has been used for 90 years, there is no patent on it. John leaves the company to work for someone else. XYZ Co can legally prevent John from using the formula, because it is a trade secret.see non-compete contracts
John purchases a piece of land, but the purchase agreement names a close friend as the purchaser. Since the friend is not considered a natural object of John’s affection (which is usually a relative), a presumption arises that John did not make a gift to his friend. Unless other evidence is shown to invalidate that presumption, a court finds that the friend holds title to the property as a resulting trust for John.
John creates a trust for his children. He wants to control the disposition of the money generated by the trust, so he names himself as trustee. In that position, he can be sure that his desires – in relation to the trust – are carried out.3. Also used loosely as anyone who acts as a guardian/fiduciary in relationship to another person. Examples include – but are not limited to: public officers (acting for the benefit of his/her constituents); a state (acting for the benefit of its citizens); or a partner (acting for the benefit of his/her copartner).
A merchant allows his customers to buy goods on credit. He does not force them to sign any papers evidencing the debt, but, in return, he charges a fluctuating interest rate. This practice may violate the Truth in Lending Act, and the merchant may be liable for penalties.see informed consent
As part of the demolition of a building, a construction company uses various methods of blasting. These methods are permitted even though they might cause damage – due to the use of explosive devices – elsewhere. But since blasting is an ultrahazardous activity., the company must pay any damage that results (regardless of foreseeability).
Jane needs money quickly (to meet her monthly car payments). She contracts with a company to work at extremely low wages in return for them making her car payments. The contract may be declared unconscionable because (i) Jane entered into it in a distressed state; and (ii) the company took great advantage of her position.compare arm’s length
XYZ Co. transports highly flammable liquids across the country. It finds an insurance company to underwrite an insurance policy; thereby shifting the risk (and consequences) of an accident onto another company. XYZ will have to pay a high price for the underwriting; and the insurance company may require frequent supervision of XYZ’s safety practices.To underwrite a stock (or bond issue) is to insure the sale of stocks (or bonds) by agreeing to buy the entire issue – in the event that they are not sold to the public [before a certain date].
Jane has Joey draft her will (which provides Joey with most of Jane’s estate). Joey is – in addition to being an attorney – Jane’s son. Jane’s other children also had equally meaningful relationships with Jane. Yet, Jane’s will [virtually] excluded them. As such, the state court determined that undue influence existed – on the part of Joey; and it invalidated portions of that legacy.compare coercion; duress; fiduciary; trustee; agent; representative
John plants trees – under a contract with Jane. Jane dies before John is paid, though. Plus, Sam subsequently buys Jane’s house. Therefore, Sam must pay John for the trees, because: (1) Sam has been unjustly enriched [by John’s work]; and (ii) John has suffered loss [exhibited by the forfeited value of his planted trees].compare quantum meruit; vassals; copyright; trademark; unfair competition
John needs money, but he can’t get a bank loan. So, Jane lends him $20,000 – at a 75% annual interest rate. John agrees to the arrangement; and, in fact, he doesn’t think that it’s unfair. One big problem, though, is that the 75% interest rate exceeds the maximum allowable rate [in the US state that they both reside]. Therefore, Jane has violated the state’s usury laws, and she can be prosecuted. A prosecution that could result in her having to return: (i) any/all interest that she has received; and (ii) the $20,000 principal that she lent [to John].
Neerja files a lawsuit against a package delivery service for damaging a package they delivered to her. At the trial, she offers proof to show that she never received the package. The difference between her original claim and the claim that she offers to prove constitutes a fatal variance, and Neerja’s case will probably be dismissed.2. in zoning law, an exemption from the application of a zoning ordinance or regulation permitting a use that varies from that otherwise permitted. The exception is granted by the appropriate authority in special circumstances to protect against undue hardship wrought by strict enforcement. See nonconforming use.
Jane conveys a house to Joey (her son) – who will keep it until he has his first child – at which time the house is to pass to Jenny (Jane’s daughter). Not until Joey’s child is born can it be determined whether Jenny will get the house. But immediately upon the birth, Jenny’s interest in the house vests; giving rise to a vested estate.
Mekhi drives a truck for Speedy Delivery Service. While pulling out of a driveway, he hits a pedestrian. Speedy will be vicariously liable for the pedestrian's injuries under the doctrine of respondeat superior.
Taye agrees to drive the getaway car in a robbery. Donna, who enters the bank, kills a teller during the robbery. In most states, Taye is vicariously liable for the killing.
A doctor is on trial for performing an abortion. In a voir dire examination of potential jurors by counsel or the court, it is revealed that a prospective juror has strong religious beliefs concerning abortions that would bias any possibility of a fair and independent judgment. That juror will most likely not be used at the doctor’s trial.2. A voir dire examination during the trial refers to a hearing by the court out of the presence of the jury upon some issue of fact or law that requires an initial determination by the court or upon which the court must rule as a matter of law alone.
Spencer enteres into a plea bargain with the prosecutor in the hope that he will receive a lighter sentence. Since the plea representes an admission of guilt and a waiver of the right to a jury trial, the judge must be sure that Spencer realizes the consequences of his actions. Therefore, the judge will inform Spencer that he has a right to have a trial and that there is no guarantee that a plea will necessarily result in any different sentence than from a trial. Without these precautions, the judge cannot be sure that Spencer's waiver is knowing and intelligent.
XYZ Co. orders a specially enforced truck – for a new type of service it is starting. XYZ places the order with a dealership with whom XYZ has often worked [in the past]; and explains the need/purpose for the vehicle. The vehicle is delivered to XYZ, which finds that – after one shipment – the truck is not built as specified. As such, a warranty-of-fitness (which was expressly written in the contract [between XYZ and the dealer) has been breached. Therefore, XYZ can return the truck (and demand a refund).
Directors of XYZ Bank arrange for friends of theirs to obtain large loans from the bank. The friends use fictitious names/businesses so that they cannot be traced [when the loans default]. The directors always approve the loans, and the money is split between the directors and friends (see kickbacks). The scheme represents white-collar crime, and each participant is liable for criminal prosecution.consumer fraud, bribery and stock manipulation are other examples of white-collar crime.
The preacher testified as a character witness at Brian's rial, giving many examples of Brian's service to the elderly and poor. Looking only at the charitable work Brian had done, the preacher could not believe Brian would burglarize a house.EXPERT WITNESS: see expert witness.
Ivan is charged with tax evasion. He hires an attorney to prepare the case, and the attorney hires an accountant to compute Ivan’s income. Because the attorney hires the accountant, the accountant is working for the attorney, not for Ivan. The accountant’s report is the work product of the attorney and therefore cannot be obtained by the Internal Revenue Service.
If Ivan hires the accountant and then presents the accountant’s report to the attorney, the report would not be considered a privileged work product and would be discoverable by the IRS.
