MEE SUBJECTS: Important Legal Issues Outline

Business Associations
A. AGENCY
1. General Info
i. Agency is created when a person (principle) appoints another (agent) to act on
his behalf.
1. Its a contractual business relationship.
ii. The Agent has whatever duties that s/he agreed to in the contract.
1. Agent owes principle a duty of reasonable care and loyalty.
2. Sub-agent owes the principle & agent the same duty.
2. Principles Liability for Agents Torts
i. Assent
1. Informal agreement b/w a principle (w/capacity) and the agent.
ii. Benefit
1. An agents conduct must be for the benefit of the principle.
iii. Control
1. Principle must have the right to control the agent; having the power to
supervise the manner in which the agent preforms.
a. Scope
i. Liability must arise from the agents actions while in the
scope of the relationship w/ principle.
1. Respondeat Superior
ii. Principle is liable on contracts that the agent enters into
on the principles behalf if the agent acted with authority
of any kind (actual, apparent, or ratified).
b. Sub-agents or borrowed agents will be liable to the principle if
the before mentioned conditions are met. (ABC&S).
iv. No vicarious liability for independent contractors tort.
1. No right for the agent to control.
a. However, liability will attach if, the independent contractor is
engaged in inherently dangerous activities, or it the IC holds
itself out with the appearance of agency.
v. Intentional torts are generally outside the scope.
3. Principles Liability for Agents Torts
i. Actual express authority can be oral; except sale of land contracts.
ii. Can be revoked by unilateral act by either agent or principle or death or
incapacity of principle.
1. Expressed authority revoked unless durable power of attorney.
a. Needs clear survival language.
iii. Actual implied authority given based on conduct or circumstance
1. Necessity
a. What needs to be done to complete the agents assigned task, i.e.
run the store.
2. Custom
a. Lawyer (title or position).

MEE SUBJECTS: Important Legal Issues Outline

3. Prior Acquiescence
a. Same old way we have done it.
iv. Apparent Authority
1. Principle cloaks agent w/ appearance of authority
2. 3rd Party relies on the appearance of authority.
v. Ratification
1. Agent acts w/o actual or apparent authority
a. Principle must have
i. Knowledge
ii. Acceptance of benefits of agents actions
1. Cannot alter terms of the contract.
4. Duties an Agent Owes Principle
i. Duty of care
ii. Duty of obedience (obey reasonable instructions)
iii. Duty of loyalty
1. No self-dealing, usurping the principles opportunity, or making secret
profits at the principles expense w/o disclosure.
B. CORPORATONS
1. Formation
i. Promoters are people acting on behalf of the corporation not yet formed
(fiduciaries). They are solely liable for any pre-incorporation contracts. Until
corporation adopts contracts by express or implied means and novation.
ii. Subscribers make written offers to buy stock--irrevocable for six months
iii. Articles (apain)
1. A-Authorization: Articles of in cooperation that authorizes maximum
number of shares to be sold.
2. P-Purpose: general purpose and perpetual duration or specific statement
of purposecant go outside the scope of that purpose.
3. A-Agent: and address of registered office; registered agent is the
corporations official legal representative.
4. I-Incorporators: Same as above
5. N-Name: the indicia of incorporation Corp.
a. Shareholders are generally not liable for the debts of a
corporation.
i. Limited liability unless you pierce the veil.
1. Alter egousing corporate assets as own or
ignored formalities.
2. Undercapitalizationcorp was started without
sufficient capital to meet its liabilities.
2. Issuance
i. Par value- minimum set purchase price.
1. If directors sell for less they can be sued to recover the deficit.
ii. No par- no minimum issuance price (any valid consideration is ok if approved
by the board).

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iii. Treasury Stock- previously issued stock that has been reacquired by the corp.
The Corp may resale the stock as no par stock.
1. Pre-emptive right maintain ownership percentage; must be granted and
written in Articles of incorporation.
3. Director/Officer Liability
i. Duty to manage
ii. Protected by the business judgment rule; not liable for innocent mistakes.
iii. Director owes the corporation fiduciary duties and required to act in good faith
in the best interest of the corporation.
1. Duty of care- must use the care that an ordinarily prudent person would
use in a like position.
2. Duty loyalty- no unfair benefits; unless ratification.
4. Shareholder Rights
i. Derivative suits
1. Shareholder is suing the corporation (must have)
a. Contemporaneous stock ownership; at least one share before suit
is filed.
b. Must represent the corporations interest
c. Demand must be rejected by board or wait 90 days after demand
was made to bring suit.
ii. Voting
1. Only the record date owner votes.
iii. Proxies
1. Revocable unless labeled and coupled with an interest.
iv. Quorum
1. Requires a majority of outstanding shares when the meeting begins.
v. Vote
1. Votes cast in favor of the proposal exceed the votes cast against.
vi. Cumulative Voting
1. Multiply the number of shares one holds times the number of directors to
be elected.
vii. Dividends
1. Discretionary unless insolvency.
a. Common-last
b. Preferred-first
c. Participating
d. Cumulative
5. Alternative Business Organizations
i. Eliminating Formalities (Closely-held)
1. Unanimous election and share transfer restriction
2. No piercing the corp. veil
ii. PC
1. Shareholders hold a professional license.
a. Just one profession
2. Members liable only for their own malpractice.
iii. LLC

MEE SUBJECTS: Important Legal Issues Outline

1. Limited liability, liquidity and tax.

2. Members may manage or delegate
6. Fundamental Changes
i. Board resolves
ii. Special notice
iii. Majority of all shares
iv. Dissenters rights
v. Notice to state
7. Federal Securities Law
i. Sec. 10(b) intent to deceive
ii. Sec. 16(b)
1. No trading profits within 6 months.
iii. SOA
1. No knowingly false filings and no benefits during your falsehoods or
blackout period.
C. PARTNERSHIP
1. Formation
i. No general partnership formalities
1. No contract or particular consideration needed.
2. W/o agreement, a partnership at will is
created.
a. Partner may withdraw at any
time.
b. If agreement, leaving partner
may be liable for any damages
caused by the disassociation.
ii. Association with two or more persons who are
carrying on, or conducting a business for profit
and share profits.
1. Presumption of partnership created w/ the notion of sharing profits.
2. Absent an agreement, partners get no salary.
2. Liabilities to Third Parties
i. General partners are liable for all partners obligations.
1. If a partner enters into business with someone then leaves the
partnership, the partnership is usually bound to that agreement.
ii. Estoppel one who represents to a third party that a general partnership exists
will be liable as if a general partnership exists.
1. Doctrine of apparent authority
3. Relations Between Partners
i. Every partner is an agent of the partnership.
ii. Each partner is personally and individually liable on all partnership contracts
and for all torts committed by a partner, or partnership employee, while acting
within the scope of the partnership business.
1. Liability is joint and severala. a plaintiff may recover all the damages from any of the
defendants regardless of their share of the liability.

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iii. General partners are fiduciaries of each other and the partnership.
1. Duty to deal fairly with the partnership and each other.
2. Refrain from competing w/ partnership.
3. Use best efforts to see partnership succeeds.
4. Disclose important info to partners.
5. Properly share profits.
iv. Only ones share of profits is liquid, transferrable personal property.
v. Without an agreement equal control, no salary and equal profits, and losses just
like profits.
4. Limited Liability Partnership (LLP).
i. Formation:
1. Intent does not matter.
2. A partnership must file a statement of qualification with the secretary of
state.
3. Must also name a general partner (manager).
a. General partner has all the rights and duties of a partner in a
general partnership.
b. General partner is a fiduciary: has a duty to disclose material
facts to the other partners.
i. Limited partners have no say in day to day operations
1. However, they can vote on important matters.
5. Dissolution
i. Priority
1. All creditors must be paid
2. All partners capitol contributions
3. The remaining profits get shared among partners
ii. Distribution Rule
1. Each partner must be repaid his or her loans and capitol contributions,
plus that partners share of any profits, or minus that partners share of
any losses.
2. Any property brought into the business it must be determined whether
the partner intended it to remain separate or if it was a contribution to the
partnership.
i. Intent controls.
3. A withdrawing partner may be liable for obligations 2 years later unless
notice was filed with the state. In which case, liability is limited to
obligations incurred within 90 days after filing.
6. Alternative Unincorporated Business Organizations
i. Limited partners, registered limited liability partners + LLCs all have limited
liability.
Commercial Transactions
A. Commercial Paper
a. Negotiable Instrument
i. Instruments must be

MEE SUBJECTS: Important Legal Issues Outline

1.
2.
3.
4.
5.
6.

A writing;
Signed by the maker (note) or order (draft);
Containing an unconditional promise (note) or order (draft);
To pay a fixed amount of money;
To order or to bearer;
On demand or at a definite time;
a. If no time is stated, the instrument is payable on demand.

B. Secured Transactions
a. Credit transaction
b. CrAAPS
i. Cr Creation
1. Debtor buys something on credit from another party called the creditor
or secured party.
ii. A Attachment
1. Gives the creditor rights in the collateral as against the debtor.
2. To ensure payment, the creditor takes a security interest in specific
personal property; the creditor can take control of the property to satisfy
debts.
3. For the security interest to materialize into an enforceable legal right
between the parties, attachment must take place.
a. Purchase Money Security Interest (PMSI). X wants to buy car
gets $ from lender and buys the car. Lender now has a security
interest in the car.
b. This is accomplished through agreement, possession, or control.
4. P Perfection
a. Serves as notice and maximizes the creditors rights in the
collateral as against third parties who might also have an interest
in the same collateral.
b. Often accomplished by filling out a filing statement.
c. Holder of a properly perfected PMSI has superiority over other
security interest in the same collateral.
5. P Priorities
a. When a debtor defaults, several people may have an interest in
the collateral.
b. PSMI in consumer goods automatically perfects upon attachment.
Conflict of Law
A. Erie Doctrine
a. The doctrine provides that in a case based solely in diversity, a federal district court
will apply the substantive law of the state in which it is located, including the states
choice of law rules. The court will however apply federal law to procedural matters.
B. FF&C
a. A state must give full faith and credit to the judgments of a sister state if:
i. The sister state had jurisdiction to enter the judgment

MEE SUBJECTS: Important Legal Issues Outline

C.

D.

E.

F.
G.

H.
I.

1. Presumption that the rendering court has jurisdiction; burden on

party attacking judgment to prove otherwise.
ii. The judgment was on the merits
1. SOL does not work
2. Default judgment works
iii. The judgment was final.
1. Federal courts must recognize state court judgments and state courts
must recognize federal judgments (per supremacy clause).
Marriage/Divorce
a. If spouses live in different states, the state in which either spouse is domiciled has
jurisdiction over the marriage and therefore, has jurisdiction to grant a valid divorce.
i. Domicile is the state in which one lives w/ the intent to remain indefinitely.
ii. A states jurisdiction over one spouse is not a sufficient basis for dividing up
joint property, awarding custody or support.
Child Custody
a. Most states have adopted either the Uniform Child Custody Jurisdiction Act or the
Uniform Child Custody Jurisdiction and Enforcement Act
i. Under either act, the childs home state has jurisdiction to enter child
custody decrees and modify such decrees.
ii. Child home statethe state the child has lived in for 6 consecutive months
before custody proceeding.
1. Ends when a court determines that neither the child nor parent
resides in the state.
2. Act prohibits another state from modifying decree if it was entered
with proper jurisdiction.
3. If childs home state declines to exercise jurisdiction or the child has
no home state, a state with a significant connection to the child and at
least one parent can modify the decree.
Choice of Law Issues
a. For torts, apply law of the state of injury or where injuring causing conduct
occurred, or domicile of the parties.
b. For contracts, absent a forum selection clause applies law where the contract was
made or executed.
c. For property, apply law where property is located.
d. For corporations, generally governed by law of the state where incorporated.
Constitutional Law
Contracts
a. 1. STATUTE OF FRAUDS
b. 2. PAROL EVIDENCE
c. 3. WARRANTIES
Criminal Law
Family Law
a. Requirements for a valid marriage
i. Must be suitable age or emancipated
ii. Not too closely related
iii. Consent from both parties

MEE SUBJECTS: Important Legal Issues Outline

iv. Parties not married to someone else

1. Common law marriage
a. Only a minority of states recognize
b. Cohabitate
c. Hold themselves out as being married.
i. Unclear if other states recognize this right under the
doctrine of full faith and credit.
2. Spousal support during marriage
a. Generally, one spouse is not liable for the others debts.
i. Exception is necessaries; food, shelter, medical
expenses.
ii. Spouses may bring tort actions against each other.
iii. Either spouse may bring an action against a 3rd party
for loss of consortium.
3. Adoption
a. Biological parents rights are terminated and a new parentchild relationship is created.
b. Generally, a natural parent is entitled to notice of adoption.
i. However, this entitlement is subject to the marital
status, whether there was a declaration of paternity
filed, if parent is living w/ child, or providing support.
ii. A biological parent can be found to have abandoned
the childno contact or support.
iii. Once parental rights are officially terminated, bioparents have no rights or obligations to child.
4. Paternity
a. A child born during a marriage is presumed to be the
husbands child.
i. Presumption can be rebutted by clear and convincing
evidence to the contrarygenetic test etc.
5. Under the Uniform Status of Children of Assisted Conception Act
and the Uniform Parentage Act the husband of a woman who bears a
child through assisted contraception is the fathers.
a. Unless he brings an action within 2 years after notice of the
childs birth & it is determined that he did not consent.
6. Surrogacy
a. Enforceable if approved by a court before conception.
7. Duty of Support
a. Generally, a childs legal parent is obligated to support the
child at least until the age of 18.
i. Duty terminates upon emancipation or termination of
parental rights.
ii. Sexual relations in a state resulting in a child is
sufficient contact to justify jurisdiction for deterring
support and custody obligations.

MEE SUBJECTS: Important Legal Issues Outline

8. Torts
a. Parents and children may sue each other.
9. Divorce
a. In most states, a divorce can be obtained regardless of fault
and consent.
b. A court that has personal jurisdiction over either spouse has
the ability to grant a divorce.
i. A court with jurisdiction over only one cannot divide
property or determine support.
1. Court must have jurisdiction over both.
ii. Court has jurisdiction if a spouse is a residentw/
domicilephysical presence in the state w/ intent to
stay.
1. State may have a residency requirement of no
more than 90 days.
c. Under the UCCJEA and UCCJA, the childs home state has
jurisdiction to enter into a decree and/or modify it.
i. Home state is where child has lived for 6 consecutive
months directly before the custody proceeding.
1. If legit, another state cannot modify.
d. Right to privacy
i. Gives the parents the right to the upbringing of their
child.
e. Premarital agreements
i. Under the SOFmust be in writing
ii. Cant be created in bad faith or undue influence
iii. Full disclosure must be given to both parties
iv. Rights over children cannot be contracted.
1. Look to state law where agreement was
executed or most significant relationship to the
parties.
f. Separation Agreement
i. Courts will not enforce if based on bad faithfraud or
duress.
ii. Failure to disclose all assets.
1. Courts will divide marital property equitable.
g. Separate property is property that one spouse brings into the
marriage; this includes property acquired during the marriage
by gift.
i. All other property is marital property.
ii. Separate property can become marital property if it is
comingled with marital property.
h. When courts divide property, they consideri. Income
ii. Skills

MEE SUBJECTS: Important Legal Issues Outline

iii. Employability
iv. Contribution
10. Palimony
a. When people live together in a marriage like relationship.
Courts will divide property under a number of theories.
11. Spousal Support
a. A court may award spousal support
i. Can be temporary or permanent (rare).
ii. Based on necessity not fault.
1. Courts consider
a. Length of marriage
b. Standard of living
c. Financial resources
d. Contribution
e. Age/physical condition
2. Modification
a. Available if there is a substantial and
material change in circumstances.
b. Cant be done in bad faith
12. Child custody
a. Courts determine custody on the interests of the child.
i. Wishes of parents and child are considered
b. Modification is allowed if substantial change in
circumstances.
i. Person seeking change has burdon
ii. Cant contract away child support obligations.
c. Amounts based oni. Parents income and needs of the child
ii. Courts can require parent to provide med ins.
iii. Court will mdify if there is a substaintial change in
circumstances
1. Cant be a bad faith change
2. If a parent dies, the estate can be liable.
13. Under the Uniform Interstate family Support Act (all states)
a. A support order can be enforced in every state by mailing
order directly to obligated persons employer or states
support enforcement agency.
b. Obligation terminates with parental rights or upon
termination of parental rights.
c. Full faith & credit
i. Another state must recognize another states divorces
and decrees.
J. Evidence
K. Federal Civil Procedure
a. Getting into Fed Court
i. Federal Question Jurisdiction

MEE SUBJECTS: Important Legal Issues Outline

1. Plaintiffs case must be based on federal law

a. Based on the well pleaded complaint standard
ii. Diversity Jurisdiction
1. Requires 2 things
a. No plaintiff can be a citizen of the same state as any
defendant.
i. Citizenship based on domicile and determined at the
time the suit is filed.
b. More than $75,000 must be in controversy.
i. Must be based on a good faith estimate.
2. Erie Doctrine
a. Fed Court must apply state law rules
i. Fed Procedure applies
ii. If state law is unclear Fed Court must apply the law
that states Supreme Court would likely apply.
3. Removal
a. Defendant can file for a removal if the case meets one of the
criteria
b. Defendant cannot remove if case was filed in state court
where the defendant lives.
4. Supplemental Jurisdiction
a. Claims and parties can be taken to fed court if they arise from
the same transaction or occurrence.
b. Must be at least one claim that has fed sub matter or diversity
jurisdiction.
i. Fed court may decline if it is a novel state issue.
5. Jurisdiction in general
a. Constitutionality is based on notice and sufficient nexus.
i. Defendant must have sufficient contact with the forum
state- does not offend traditional notions of fair play
and substantial justice.
b. Minimum contacts
i. Quantity and nature of contact with the forum
(purposeful availed).
ii. Connection between the state and those contacts
iii. Interests of the state in protecting its citizens.
6. Venue
a. Proper when (procedural apply fed law).
i. Events giving rise to the claim/property
ii. Defendant resides in state
b. Transfer
i. Anywhere the claim could have been brought
ii. Party consent
7. Joinder
a. Permissible if the interests of justice support it and it will not
destroy jurisdiction or venue.

MEE SUBJECTS: Important Legal Issues Outline

b. Judicial efficiency
8. Counter claims
a. Must be brought against the plaintiff if they arise out of the
occurrence.
9. Class actions
a. Numerous class (efficiency)
b. Common question
c. Representative of the class
d. Adequate representation of entire class
e. Superior method of adjudication
10. Amendment
a. Pleading may be amended 1 before a responsive pleading is
served or within 21 days after the service of the pleading.
b. Amendments relate back to the date of the original pleading .
11. Temporary restraining orders
a. Can be immediately granted if it appears from the facts that
irreparable harm will occur.
b. Cant be longer than 14 days.
12. Preliminary injunction
a. Granted only after notice and a hearing
b. Party seeking injunction must show irreparable injury will
occur, he would likely succeed on the merits, and harm to him
is greater than the other party.
13. Discovery
a. A party may discover any matter not privileged which is
relevant to the claim or defense of any party.
b. Attorney work product generally not discoverableunless
there is a substantial need for it.
14. Summary Judgment
a. Will be granted if from the pleadings, affidavits, and
discovery material, it appears that there is no genuine dispute
of material fact than the moving party is entitled to judgment
as a matter of law.
i. Must be filed at any time up to 30 days after the close
of discovery.
ii. Partial Sum Judgment
1. Can apply to all or some of the issues.
15. Judgment as a matter of law
a. A motion for judgment as a matter of law is appropriate when
a party has been heard in full and there is no legally sufficient
evidentiary basis for a reasonable jury to find for the party.
i. Anytime the other party has been heard in full.
16. Collateral estopple

MEE SUBJECTS: Important Legal Issues Outline

a. Issue preclusion prevents a party from an earlier action from

relitagating in a subsequent action issues that were decided in
an earlier action.
i. Prior judgment must be final/on the merits.
b. Res judicata
i. Claim preclusion once a final judgment has been
rendered on a particular cause of action, the plaintiff is
barred from asserting the same cause of action in a
later lawsuit.
c. Final judgment rule
i. An appeal from a federal district court decision
generally can be taken only after the court has reached
a final decision on the merits by rendering a final
judgment as to all parties and all causes of action
involved.
L. Property
Landlord-tenant (especially assignments and subleases)
Cotenancies (especially severance of joint tenancies)
Easements (especially the 4 ways of creating easements)
Torts
Trusts
Wills