Tuesday, June 26, 2012
Reasons to not enforce a contract... Vanilla Ice, David Bowie and Suge Knight
Hypo: David Bowie calls Vanilla Ice to inform Ice that he wants the rights to Ice's hit "Ice Ice Baby,” because he believes the song directly ripped off his song "Under Pressure." Bowie tells Ice that he knows for a fact that Ice copied the material because he has a witness that was in the recording studio when Ice recorded the song. Bowie doesn't actually have this witness and although Ice knows that the two songs are completely different he agrees to sign an agreement to sign over the rights in order to stay out of a losing lawsuit. Bowie faxes a contract to Ice and Ice signs it. After all, he has plenty of hits coming.
Right after Ice hangs up the phone, Suge Knight bursts into Ice's apartment with two hulking thugs with two hulking handguns ordering that Ice sign "Ice Ice Baby" over to him. Knight believes that Ice stole the music from one of the artists that Knight represents. Ice refuses and tries to explain that he already agreed to turn the rights over to Bowie. Knight, doesn’t hear the explanation and, infuriated, grabs Ice by the neck, pulls him towards the balcony and hangs Ice off the balcony until he agrees to sign the contract that Knight brought.
Analysis: Neither contract would be enforced. Shocking, right? But do you know why? I just found out today.
The contract with Bowie is invalid due to misrepresentation. Misrepresentation requires (1) a statement of "fact" before the contract, (2) by one of the contracting parties or her agent, (3) that is false, and (4) induces the contract.
(1) The statement of fact Bowie made was that he had a witness that Ice stole the material.
(2) Bowie, one of the parties to the contract, made the statement.
(3) The statement was false because Bowie didn't actually have the witness.
(4) Ice agreed to the contract as a result of the misrepresentation. He would not have signed if Bowie had not lied that he had a witness.
The contract with Knight might be a little more obvious. This contract would not be enforced due to physical duress. Ice need only prove that the threat was made and that it caused him to agree. For an agreement or contract to come to fruition, and thus be enforceable, mutual assent or a "meeting of the minds" must occur. This meeting is missing here. The only reason Ice agreed was that he had been hung out the window so his sound mind can't be said to have met that of Knight’s.
Still, in both situations Ice will have to prove that the other parties have unclean hands. This might be easier said than done, and further, Ice might never bring the suit due to fear of the two parties. I hear Bowie is tougher than he looks.
Remedies: If the contracts were considered enforceable then both Bowie and Knight would have rights to remedies from Ice.
Both would probably request specific performance, the exchange of rights to the intellectual property. However, this remedy presents a problem because both cannot own the property so both cannot receive this equitable remedy.
If the Knight contract was considered enforceable then Knight would be considered a bona fide purchaser as long as he didn't know about the previous deal with Bowie. While Ice tried to explain the matter to Knight, he never got the point across so Knight's hands remain clean. Because Knight currently owns the rights, has possession of the contract, it would be unfair to rip them from his fingers so the court won't do that.
Thus, Bowie has a right to remedy by money damages. Bowie would be entitled to expectation damages, a comparison of the dollar value of the performance (the intellectual property's value) with the breach, and the dollar value of the performance with the breach.
Because Bowie has no dollar value without the performance he will be given the intellectual property's fair market value and balance will be restored to the force.
Monday, June 25, 2012
Don't fight the hypo
I've been struggling with the fact that each fact pattern, each question and each answer are told, written and asked for in a vacuum, and during one round of Barbri one of the temps relinquished a valuable piece of advice that I have been wrestling with since, "Don't fight the hypo."
What he meant was to only read the facts as stated in the hypothetical. Don't impute your own. Don't ask, "what if?" because the fact pattern and question provides you with all that is and will ever be in this minute, limited fictional universe.
I have this reflex, innate or trained, to ponder out the "what ifs?," the "but what abouts?" that inevitably occur in a bare-bones-fact pattern. My hand tries to raise, to ask the videotaped professor about the tendons, the nerves, the organs, the muscle and the skin, but these elements of anatomy are irrelevant. If you're given a skeleton, work with a skeleton whether or not it could, in reality, ever have the capacity to walk on its own.
Today the contracts temp expressed the sentiment perfectly, "There are no real world bar questions."
That's it, simply put by a man who has been teaching aspiring lawyers, for about 30 years, how to pass the test that will determine whether or not they are fit to be attorneys, to be responsible for the most important transactions, arguments, occurrences and issues that their clients will ever have to deal with.
I respect that we should be able to work with what we're given, that this skill is valuable in any field, profession or activity, and I might sound like a broken record at this point, but I'm still trying to figure out a good reason as to why the legal profession tests this way.
The bar is set in a fictional universe, one not grounded by gravity nor run by any physical science we know. Each bar, and really each question, lives in its own world, detached from time, detached from space, detached from reality, but the test's job is to determine which graduates are fit to be attorneys. I continue to find difficulty reconciling these two facts.
The only reasonable conclusion I can come up with is that the bar is hard, that they give us this test because it's hard. That, and because they had to do it.
What he meant was to only read the facts as stated in the hypothetical. Don't impute your own. Don't ask, "what if?" because the fact pattern and question provides you with all that is and will ever be in this minute, limited fictional universe.
I have this reflex, innate or trained, to ponder out the "what ifs?," the "but what abouts?" that inevitably occur in a bare-bones-fact pattern. My hand tries to raise, to ask the videotaped professor about the tendons, the nerves, the organs, the muscle and the skin, but these elements of anatomy are irrelevant. If you're given a skeleton, work with a skeleton whether or not it could, in reality, ever have the capacity to walk on its own.
Today the contracts temp expressed the sentiment perfectly, "There are no real world bar questions."
That's it, simply put by a man who has been teaching aspiring lawyers, for about 30 years, how to pass the test that will determine whether or not they are fit to be attorneys, to be responsible for the most important transactions, arguments, occurrences and issues that their clients will ever have to deal with.
I respect that we should be able to work with what we're given, that this skill is valuable in any field, profession or activity, and I might sound like a broken record at this point, but I'm still trying to figure out a good reason as to why the legal profession tests this way.
The bar is set in a fictional universe, one not grounded by gravity nor run by any physical science we know. Each bar, and really each question, lives in its own world, detached from time, detached from space, detached from reality, but the test's job is to determine which graduates are fit to be attorneys. I continue to find difficulty reconciling these two facts.
The only reasonable conclusion I can come up with is that the bar is hard, that they give us this test because it's hard. That, and because they had to do it.
Thursday, June 21, 2012
Law in a vacuum
Vacuum: a space empty of matter. (as defined by Wikipedia)
The Bar forces us to study the law within an enclosed space, a vacuum in which each area of law is separate from each other area of law. Either a question is about torts or criminal law, real property or constitutional law, evidence or conflicts of law.
Today we were lectured on Evidence, which relates to all areas of law in at least some remote way. Even when the issue deals with a contract, commercial paper (whatever that really is) or a separation agreement, the writings involved can invariably end up as evidence in at least a civil action so the documents must be written as such.
Evidence is useless on its own. The subject simply will never come up unless there is some other issue at stake, some question, some point to prove, but on the bar we are given a set of facts, and a few following questions, that specifically lay out the rest of the case in order to teach us evidence alone. I understand this method of education is effective in the first place, but how does isolating this variable really test our abilities to be attorneys?
Even within these main areas we are lectured to view each subsection, each individual issue, as separate from all other issues. For example we were given a hypothetical, similar to the one below, that applied to the best evidence rule, which requires an original writing to be submitted except under a few limited exceptions.
HYPO: Jack Bower claims that he worked 24 hours and spent $15 million in reimbursable expenses. There are time sheets and expense reports that say he only worked 20 hours and had only $10 million in reimbursable expenses. Boss wants to testify that Bower only worked 20 hours and spent only $10 million to be reimbursed, but his only knowledge about the issue comes from the time sheets and expense reports. Under the best evidence rule can Boss testify to the number of hours and amount of expenses?
The answer is no, he can't because he only knows this information through the time sheets and expense reports and these reports are available to be submitted as evidence.
That makes sense and everything but it ignores what would really happen. To get the information admitted, Boss would be called on to authenticate the reports. Once the documents are authenticated they may be admitted as evidence. He would still be called to testify but only in relation to authentication, the extent that the documents were accurate and kept in the regular course of business. (We discussed authentication in another section. It was not mentioned in relation to this hypothetical in class.)
I know I may be just complaining, but you would be too if you had to study soulless blackletter law all day long. I guess what I'm saying is that it doesn't seem the Bar is testing us on how to be attorneys, just on how well we can memorize the law and then apply it isolated situations.
Law is not a vacuum because life is not a vacuum. These issues do not come up all by themselves, they are intermingled, mixed, mashed, twisted, turned and ground together. A client comes in with a generic case and an attorney's job is to question, to counsel to pull out not only the important but the collateral facts, to find and work the angles in order to find the best way to represent his/her client.
Each criminal claim might be accompanied by a tort claim. A real property claim may give rise to some issue of Constitutional law.
A client will not walk into your office asking if he has a prescriptive or implied easement on his neighbor's property and that he may be sued for nuisance in addition to being arrested for this supposed nuisance, but that the nuisance is just his invocation of his First Amendment freedom of speech rights. He'll walk in, late, and say that he got this letter from his neighbor's lawyer telling him that he can't use the driveway that runs across his neighbor's property connecting him with the only road to town because his neighbor is angry that he and his band have been playing music that the the neighbor considers obscene and that the neighbor reported the matter to the police.
This hypothetical deals with several issues of law. On the bar though, these facts would never be presented together. The issues would never be presented together. I may be stretching the hypo a bit, but, I'm just trying to make a point.
If this test purports to determine who gets a license and who doesn't should it not have something to do with the actual practice of law? Should the test that determines whether or not we are fit to be attorneys, to handle some of the most important facts and circumstances that occur in people's lives, not have some actual relation to those real lives?
The Bar forces us to study the law within an enclosed space, a vacuum in which each area of law is separate from each other area of law. Either a question is about torts or criminal law, real property or constitutional law, evidence or conflicts of law.
Today we were lectured on Evidence, which relates to all areas of law in at least some remote way. Even when the issue deals with a contract, commercial paper (whatever that really is) or a separation agreement, the writings involved can invariably end up as evidence in at least a civil action so the documents must be written as such.
Evidence is useless on its own. The subject simply will never come up unless there is some other issue at stake, some question, some point to prove, but on the bar we are given a set of facts, and a few following questions, that specifically lay out the rest of the case in order to teach us evidence alone. I understand this method of education is effective in the first place, but how does isolating this variable really test our abilities to be attorneys?
Even within these main areas we are lectured to view each subsection, each individual issue, as separate from all other issues. For example we were given a hypothetical, similar to the one below, that applied to the best evidence rule, which requires an original writing to be submitted except under a few limited exceptions.
HYPO: Jack Bower claims that he worked 24 hours and spent $15 million in reimbursable expenses. There are time sheets and expense reports that say he only worked 20 hours and had only $10 million in reimbursable expenses. Boss wants to testify that Bower only worked 20 hours and spent only $10 million to be reimbursed, but his only knowledge about the issue comes from the time sheets and expense reports. Under the best evidence rule can Boss testify to the number of hours and amount of expenses?
The answer is no, he can't because he only knows this information through the time sheets and expense reports and these reports are available to be submitted as evidence.
That makes sense and everything but it ignores what would really happen. To get the information admitted, Boss would be called on to authenticate the reports. Once the documents are authenticated they may be admitted as evidence. He would still be called to testify but only in relation to authentication, the extent that the documents were accurate and kept in the regular course of business. (We discussed authentication in another section. It was not mentioned in relation to this hypothetical in class.)
I know I may be just complaining, but you would be too if you had to study soulless blackletter law all day long. I guess what I'm saying is that it doesn't seem the Bar is testing us on how to be attorneys, just on how well we can memorize the law and then apply it isolated situations.
Law is not a vacuum because life is not a vacuum. These issues do not come up all by themselves, they are intermingled, mixed, mashed, twisted, turned and ground together. A client comes in with a generic case and an attorney's job is to question, to counsel to pull out not only the important but the collateral facts, to find and work the angles in order to find the best way to represent his/her client.
Each criminal claim might be accompanied by a tort claim. A real property claim may give rise to some issue of Constitutional law.
A client will not walk into your office asking if he has a prescriptive or implied easement on his neighbor's property and that he may be sued for nuisance in addition to being arrested for this supposed nuisance, but that the nuisance is just his invocation of his First Amendment freedom of speech rights. He'll walk in, late, and say that he got this letter from his neighbor's lawyer telling him that he can't use the driveway that runs across his neighbor's property connecting him with the only road to town because his neighbor is angry that he and his band have been playing music that the the neighbor considers obscene and that the neighbor reported the matter to the police.
This hypothetical deals with several issues of law. On the bar though, these facts would never be presented together. The issues would never be presented together. I may be stretching the hypo a bit, but, I'm just trying to make a point.
If this test purports to determine who gets a license and who doesn't should it not have something to do with the actual practice of law? Should the test that determines whether or not we are fit to be attorneys, to handle some of the most important facts and circumstances that occur in people's lives, not have some actual relation to those real lives?
Tuesday, June 19, 2012
Why?
During the Barbri lectures my mind tends to drift. I am almost certain this symptom is a common reaction to three hour class sessions of any kind, let alone plain blackletter law. One subject that I continually ponder is education.
In the last month we have been provided a sampling of teaching styles, a variety of personalities and abilities. Each professor uses his or her traits, although some don't seem to have much to work with, to illustrate, to explain a variety of legal concepts. Some instruct with vigor, others with detail. Some use hand motions and sound effects, to keep, or draw, our attention and to stick the material into our memory. A few simply drone, buzzing for hours, reading their outlines verbatim, and others use repetitive repetition, like salesman on a late night infomercial, really driving the point, nailing it down, screwing it in, gluing it shut and plastering it with duct tape.
For me though, the most effective interim professors have been those that explain why. The temps who explain the background, the details, the reason, the purpose, the policy, the point of the law, are those that have the greatest effect on me. There's something about learning why that places, perfectly,
a piece of information in my mind.
These teachers do not simply lecture, they do not simply preach the tenets but they express the goals, the background behind the rules. Since I was a kid, I've always wondered, and asked, why. When I understand the why, the policy, then the how, the what, the where, the who and the when seem to come together.
The why gives me understanding, not mere knowledge. I've found that in general the big difference between knowing and understanding is the why. I don't know if other people are the same, as we all learn differently, but it seems that understanding connects me with a fact, or in this case a law, and when my mind connects, my mind memorizes.
When they don't explain why I'm left wondering the point, and then I miss it. Well, if nothing else, I've figured out how I learn, so I guess I'll get back to doing that.
In the last month we have been provided a sampling of teaching styles, a variety of personalities and abilities. Each professor uses his or her traits, although some don't seem to have much to work with, to illustrate, to explain a variety of legal concepts. Some instruct with vigor, others with detail. Some use hand motions and sound effects, to keep, or draw, our attention and to stick the material into our memory. A few simply drone, buzzing for hours, reading their outlines verbatim, and others use repetitive repetition, like salesman on a late night infomercial, really driving the point, nailing it down, screwing it in, gluing it shut and plastering it with duct tape.
For me though, the most effective interim professors have been those that explain why. The temps who explain the background, the details, the reason, the purpose, the policy, the point of the law, are those that have the greatest effect on me. There's something about learning why that places, perfectly,
a piece of information in my mind.
These teachers do not simply lecture, they do not simply preach the tenets but they express the goals, the background behind the rules. Since I was a kid, I've always wondered, and asked, why. When I understand the why, the policy, then the how, the what, the where, the who and the when seem to come together.
The why gives me understanding, not mere knowledge. I've found that in general the big difference between knowing and understanding is the why. I don't know if other people are the same, as we all learn differently, but it seems that understanding connects me with a fact, or in this case a law, and when my mind connects, my mind memorizes.
When they don't explain why I'm left wondering the point, and then I miss it. Well, if nothing else, I've figured out how I learn, so I guess I'll get back to doing that.
Wednesday, June 13, 2012
Policy Argument: An Axe to Grind About A Secured Creditor Priority
(Please try to make it to the end. I had to explain the law before I could grind my axe.)
Today we spent about three and half hours in a lecture about secured transactions, probably the most boring and complicated material I have dealt with other the tax law. I took secured transactions this past semester and I guess I didn't learn much. Secured transactions deal with those relationships between debtors and creditors, and also those among various types of creditors.
I want to complain about a situation in which a creditor can collect property from a third-party purchaser who bought security-interest-encumbered property without knowing of the encumbrance, but in order to do so, in case someone who reads this is not currently deep in the law, I guess I should explain something about secured transactions.
"A secured transaction is a transaction intended to create a security interest in personal property or fixtures. it generally involve a sale on credit or a loan in which the seller or the lender obtains a lien on some or all of the debtor's property as security payment," reads the Moll outline from Barbri's Missouri Lecture Handouts.
All "all caps" definitions in this post are also from this lecture handout.
DEBTOR: The person who owes a payment or performance of the obligation secured.
SECURED PARTY: A lender, seller or other person in whose favor there is a security interest.
SECURITY AGREEMENT: the agreement between the debtor and the secured party that creates a security interest.
SECURITY INTEREST: An interest in personal property or fixtures which secures payment or performance of an obligation. It is a contingent property interest in the debtor's collateral that the debt grants to the creditor. When the contingency, which is default, occurs, the property interest springs to life and the creditor has rights in the debtor's collateral.
There are several types of secured creditors who have achieved security through various methods and at various times, but these specifics are not necessary fort the hypothetical from which my complaint stems.
The Bogarts purchased a sailboat with money borrowed from State Bank, which took a security interest in the sailboat and promptly perfected. (My note: Perfection is a system of methods used to protect the secured party against third parties, including purchasers like Nudnik, and other secured creditors.) Three months later, the Bogarts sold the sailboat to Mabel's Marina, which sells new and used boats. A month later, the sailboat was sold to Nudnik. State Bank has tracked down the sailboat, and seeks to enforce its security interest in the sailboat which is in Nudnik's hands. Can it enforce its security interest in the sailboat?
Answer: State Bank can repossess the boat from Nudnik even though he did not owe them a cent and even though did he did not have any knowledge that the boat was encumbered by State Bank's security interest. Nudnik's only recourse is to sue Mabel's Marina for the loss. (Am I the only person who thinks this result is a bit unfair for a good-faith purchaser. Am I the only one who thinks this pushes the scale a little too heavily for the creditor?)
The rationalization comes from a general rule for UNAUTHORIZED SALES as stated in the lecture handout: A buyer in the ordinary course of business (other than a person buying farm products from a person engaged in farming operations) takes free of a security interest created by his seller even though the security interest is perfected and even though the buyer knows of its existence.
For a third-party purchaser, like Nudnik, to purchase the property unencumbered by the security interest,
BUYER IN THE ORDINARY COURSE: A person who buys goods in good faith, without knowledge that the sale violates the rights of another person (usually a secured party) in the goods, and in the ordinary course from a person in the business of selling goods of that kind.
So, the basic elements for a third-party purchaser to obtain security-interest-encumbered property free of the security interest are: 1. that the property was purchased in the ordinary course of business, 2. in good faith, 3. the security interest was created by the seller.
Here, Mabel's Marina was in the business of selling new and used boats to consumers. Nudnik, a consumer, purchased the sailboat out of Mabel's inventory so the first element is satisfied.
Nudnik did not know anything about the security interest that encumbered the property when he purchased it so the second element is satisfied. (Why would he voluntarily purchase property with another person's security interest attached?)
However, Nudnik fails the test because the security interest was not created by the seller, Mabel's Marina. Here, Nudnik loses his boat, and the money he spent on it, because a party, two degrees away, signed the boat off as collateral. Nudnik, with no opportunity to learn about the security interest, was completely in the dark as to the encumbrance, but still his property is taken away.
Even if he can get the money back from Mabel's, Nudnik has to get an attorney, pay the attorney and possibly deal with a lengthy, expensive and tedious legal process. Besides that, Nudnik misses out on the all the fun he could have had on his boat until he obtains a judgement sufficient to purchase a new one, and we all know, as the Beatles sang in "She's Leaving Home," "Fun is the one thing that money can't buy."
I'm going to go a little further. Let's say Nudnik had asked this girl out, one he's been in love with for years and, having saved up enough money to buy this boat, he finally mustered up the courage to ask her out for a picnic out on the water. Well, now, no boat, no date. She thinks he's a liar and she'll never go out with him again. He's lost a chance at love, and I think everyone knows you cannot sue for actual performance or replevin in such a case.
Yes, I'm adding facts to the equation, but nothing that would effect the legal relevance. The point I'm trying to make is that the law assigns a negative result on someone who could not possibly expect, or know of, the risk he took. Nudnik bought from a boat dealer and, no facts suggest that he should have or could have been aware of State Bank's security interest.
This risk should be on the creditor, who deals in this sort of business and who has a right not to loan to any questionable characters. State Bank had a choice who it dealt with so if it loans to someone like Bogarts who sold the collateral without permission, it should bear the risk, not a party who had never met either the debtor or the creditor.
Also, the creditor, almost as a rule, has deeper pockets than a general consumer. So, not only is the risk put on a party with less knowledge and less experience, but on the party with less ability or stability to shoulder the load.
I'll leave you with a quote from the lecturer this morning, Professor Douglas K. Moll and, assuming you made it this far, I'd like you to ponder it. "Moral implications have nothing to do with the law."
Today we spent about three and half hours in a lecture about secured transactions, probably the most boring and complicated material I have dealt with other the tax law. I took secured transactions this past semester and I guess I didn't learn much. Secured transactions deal with those relationships between debtors and creditors, and also those among various types of creditors.
I want to complain about a situation in which a creditor can collect property from a third-party purchaser who bought security-interest-encumbered property without knowing of the encumbrance, but in order to do so, in case someone who reads this is not currently deep in the law, I guess I should explain something about secured transactions.
"A secured transaction is a transaction intended to create a security interest in personal property or fixtures. it generally involve a sale on credit or a loan in which the seller or the lender obtains a lien on some or all of the debtor's property as security payment," reads the Moll outline from Barbri's Missouri Lecture Handouts.
All "all caps" definitions in this post are also from this lecture handout.
DEBTOR: The person who owes a payment or performance of the obligation secured.
SECURED PARTY: A lender, seller or other person in whose favor there is a security interest.
SECURITY AGREEMENT: the agreement between the debtor and the secured party that creates a security interest.
SECURITY INTEREST: An interest in personal property or fixtures which secures payment or performance of an obligation. It is a contingent property interest in the debtor's collateral that the debt grants to the creditor. When the contingency, which is default, occurs, the property interest springs to life and the creditor has rights in the debtor's collateral.
There are several types of secured creditors who have achieved security through various methods and at various times, but these specifics are not necessary fort the hypothetical from which my complaint stems.
The Bogarts purchased a sailboat with money borrowed from State Bank, which took a security interest in the sailboat and promptly perfected. (My note: Perfection is a system of methods used to protect the secured party against third parties, including purchasers like Nudnik, and other secured creditors.) Three months later, the Bogarts sold the sailboat to Mabel's Marina, which sells new and used boats. A month later, the sailboat was sold to Nudnik. State Bank has tracked down the sailboat, and seeks to enforce its security interest in the sailboat which is in Nudnik's hands. Can it enforce its security interest in the sailboat?
Answer: State Bank can repossess the boat from Nudnik even though he did not owe them a cent and even though did he did not have any knowledge that the boat was encumbered by State Bank's security interest. Nudnik's only recourse is to sue Mabel's Marina for the loss. (Am I the only person who thinks this result is a bit unfair for a good-faith purchaser. Am I the only one who thinks this pushes the scale a little too heavily for the creditor?)
The rationalization comes from a general rule for UNAUTHORIZED SALES as stated in the lecture handout: A buyer in the ordinary course of business (other than a person buying farm products from a person engaged in farming operations) takes free of a security interest created by his seller even though the security interest is perfected and even though the buyer knows of its existence.
For a third-party purchaser, like Nudnik, to purchase the property unencumbered by the security interest,
BUYER IN THE ORDINARY COURSE: A person who buys goods in good faith, without knowledge that the sale violates the rights of another person (usually a secured party) in the goods, and in the ordinary course from a person in the business of selling goods of that kind.
So, the basic elements for a third-party purchaser to obtain security-interest-encumbered property free of the security interest are: 1. that the property was purchased in the ordinary course of business, 2. in good faith, 3. the security interest was created by the seller.
Here, Mabel's Marina was in the business of selling new and used boats to consumers. Nudnik, a consumer, purchased the sailboat out of Mabel's inventory so the first element is satisfied.
Nudnik did not know anything about the security interest that encumbered the property when he purchased it so the second element is satisfied. (Why would he voluntarily purchase property with another person's security interest attached?)
However, Nudnik fails the test because the security interest was not created by the seller, Mabel's Marina. Here, Nudnik loses his boat, and the money he spent on it, because a party, two degrees away, signed the boat off as collateral. Nudnik, with no opportunity to learn about the security interest, was completely in the dark as to the encumbrance, but still his property is taken away.
Even if he can get the money back from Mabel's, Nudnik has to get an attorney, pay the attorney and possibly deal with a lengthy, expensive and tedious legal process. Besides that, Nudnik misses out on the all the fun he could have had on his boat until he obtains a judgement sufficient to purchase a new one, and we all know, as the Beatles sang in "She's Leaving Home," "Fun is the one thing that money can't buy."
I'm going to go a little further. Let's say Nudnik had asked this girl out, one he's been in love with for years and, having saved up enough money to buy this boat, he finally mustered up the courage to ask her out for a picnic out on the water. Well, now, no boat, no date. She thinks he's a liar and she'll never go out with him again. He's lost a chance at love, and I think everyone knows you cannot sue for actual performance or replevin in such a case.
Yes, I'm adding facts to the equation, but nothing that would effect the legal relevance. The point I'm trying to make is that the law assigns a negative result on someone who could not possibly expect, or know of, the risk he took. Nudnik bought from a boat dealer and, no facts suggest that he should have or could have been aware of State Bank's security interest.
This risk should be on the creditor, who deals in this sort of business and who has a right not to loan to any questionable characters. State Bank had a choice who it dealt with so if it loans to someone like Bogarts who sold the collateral without permission, it should bear the risk, not a party who had never met either the debtor or the creditor.
Also, the creditor, almost as a rule, has deeper pockets than a general consumer. So, not only is the risk put on a party with less knowledge and less experience, but on the party with less ability or stability to shoulder the load.
I'll leave you with a quote from the lecturer this morning, Professor Douglas K. Moll and, assuming you made it this far, I'd like you to ponder it. "Moral implications have nothing to do with the law."
Tuesday, June 12, 2012
Fiduciary Duties...An attempted explanation
This morning Barbri sent Professor Michael Closen to lecture about Agency and Partnership. Closen was an effective teacher, having written Bar exam questions in several states, with an effective outline for both learning the material and for studying it later.
Closen stressed certain areas of Agency and Partnership law as particularly important, one of which was fiduciary duties. He explained the importance of our learning fiduciary duties because of the subject's prevalence on the bar. He also explained that this subject regularly appears on bar exams because the subject matter is actually important to attorney's in real life.
What is a fiduciary?
A fiduciary duty is a duty owed by an agent to his principal. According to my outline, the law holds fiduciary interests in high regard and rigorously enforces fiduciary duties.
An agent is someone who is an employee or independent contractor for a principal. The principal pays the agent to do some kind of work, whether salaried, in the case of employees, or by piecework, hourly or some other means in the case of independent contractors. Independent contractors are not necessarily agents, but if independent contractors are held to be/considered agents, then they owe the same fiduciary duties to principal whether as a general employee.
If Owner of Market hires Manager to run Market then Owner is the principal and Manager is the agent. This case refers to an employment relationship. If X hires hires Y to clean re-roof his home and only to re-roof his home, then X is the principal and Y is the agent. This case refers to an independent contractor situation.
Fiduciary Duties
Duty of LOYALTY, duty of OBEDIENCE, duty of CARE, duty to ACCOUNT, Duty NOT TO COMPETE with principal & NOT TO BE A DUAL AGENT.
DUTY OF LOYALTY
The agent must place the principal's interests first, foremost and exclusive to all other interests (including the agent's own interest, such as in self-dealing). The agent cannot benefit in a conflict of interest fashion while in service of the principal.
Example: A is hired to purchase a plot of land for P but instead purchases the land for himself. A then sells the land to X for a profit. This act breaches the duty of loyalty because A took from P the investment opportunity that P had hired A to perform. However, A could have prevented his breach of duty by making full disclosure that he was going to buy the land himself and if he offered P the chance to buy the lot for a reasonable time.
(I'm not sure what reasonable means. The term "reasonable" comes up all the time in many types of law. The objective standard presented by "reasonable" is a legal fiction with no specific definition so it is something for the jury to decide in any given situation.)
DUTY OF OBEDIENCE
This one is easy. The agent must obey the reasonable instructions of the principal. The agent has a responsibility to do the job he was hired to do.
Example of a breach: P hires A to run Shop. P orders A to deal with X to purchase widgets. A purchases equal-quality widgets from Y at a substantially higher price even though X had plenty of widgets available. A's act of disobedience was unreasonable under the circumstances because he could have contracted with X to save money as he was told.
Example of not-a-breach: P hires A to run the same shop. P orders A to murder X and steal the widgets. This request is not reasonable because, not only is it out of the scope of A's duties, but the act is illegal. Illegal acts are presumptively unreasonable so no breach has occurred.
DUTY OF CARE
The agent must exercise reasonable care in performing functions for the principal.
Example of a breach: P hires A to run Shop. P tells A to contract to purchase widgets at the best price he can find. X calls to solicit widgets right after A gets off the phone with P. X's widgets cost $100/widget more than Y's widgets cost even though the widgets are comparable. A did not do any research or shopping around, but immediately contracted to purchase widgets from X.
A has exercised his duty of care because he did not even try to find cheaper widgets.
Example of not-a-breach: P gives A the same instructions as above. X calls to solicit widgets and A tells him he will call back to confirm the purchase later. A calls Y, Z, L, F and M, none of which can provide him with a cheaper price for comparable widgets than X. Because, he needs to order the widgets that day to fill an order to C, A contracts with X to purchase widgets. R calls the next day to solicit widgets at a substantially cheaper price than X.
Here, A has performed the duty of care because he made a reasonable effort to find less expensive widgets in the time he was allotted to perform the task.
DUTY TO ACCOUNT
The agent must account to the principal for money and property received by the agent in the course of agency functioning.
Example: A is regularly required to fly for his work under P. P pays for the flight but A is rewarded the frequent flier miles.
If A does not report his frequent flier miles to P, then he has breached his duty to account.
If A reports his frequent flier miles to P, then he has not breached his duty to account.
DUTY NOT TO COMPETE WITH PRINCIPAL & NOT TO BE A DUAL AGENT
The agent must NOT compete with the principal, and the agent cannot serve as a dual agent for two principals (unless the agent has disclosed the proposed dual representation to both principals and has obtained their consent to such dual representation).
Example: A is hired by P to contract for the purchase of land in Constantinople. X hires A to sell land in Constantinople.
Here, A would be a dual agent to contracting parties, and would violate his duty not to be a dual agent to both parties, unless he made full disclosure to each party. He would have to explain to each party that he was simultaneously representing the other party in the transaction, and both parties would have to give consent.
Example: A is hired to purchase a plot of land for P but instead purchase the land for himself. A then sells the land to X for a profit. This act breached the duty of loyalty because A took from P the investment opportunity that P had hired A to perform. However, A could have prevented his breach of duty by making full disclosure that he was going to buy the land himself and if he offered P the chance to buy the lot for a reasonable time.
Here, A has breached his duty not to compete with P by buying the land for himself that he was hired to buy for P.
But Alex, isn't that the same hypothetical from duty of obedience? Why yes it is. I'm glad you asked.
The duty of obedience is an umbrella duty that will tack on to or encompass any other duty. Closen explained that if on the Bar Exam there is one breach of duty then there will be two breaches, one for the initial/specific breach, in this case the breach of the duty not to compete, and the second for breach of obedience.
Closen stressed certain areas of Agency and Partnership law as particularly important, one of which was fiduciary duties. He explained the importance of our learning fiduciary duties because of the subject's prevalence on the bar. He also explained that this subject regularly appears on bar exams because the subject matter is actually important to attorney's in real life.
What is a fiduciary?
A fiduciary duty is a duty owed by an agent to his principal. According to my outline, the law holds fiduciary interests in high regard and rigorously enforces fiduciary duties.
An agent is someone who is an employee or independent contractor for a principal. The principal pays the agent to do some kind of work, whether salaried, in the case of employees, or by piecework, hourly or some other means in the case of independent contractors. Independent contractors are not necessarily agents, but if independent contractors are held to be/considered agents, then they owe the same fiduciary duties to principal whether as a general employee.
If Owner of Market hires Manager to run Market then Owner is the principal and Manager is the agent. This case refers to an employment relationship. If X hires hires Y to clean re-roof his home and only to re-roof his home, then X is the principal and Y is the agent. This case refers to an independent contractor situation.
Fiduciary Duties
Duty of LOYALTY, duty of OBEDIENCE, duty of CARE, duty to ACCOUNT, Duty NOT TO COMPETE with principal & NOT TO BE A DUAL AGENT.
DUTY OF LOYALTY
The agent must place the principal's interests first, foremost and exclusive to all other interests (including the agent's own interest, such as in self-dealing). The agent cannot benefit in a conflict of interest fashion while in service of the principal.
Example: A is hired to purchase a plot of land for P but instead purchases the land for himself. A then sells the land to X for a profit. This act breaches the duty of loyalty because A took from P the investment opportunity that P had hired A to perform. However, A could have prevented his breach of duty by making full disclosure that he was going to buy the land himself and if he offered P the chance to buy the lot for a reasonable time.
(I'm not sure what reasonable means. The term "reasonable" comes up all the time in many types of law. The objective standard presented by "reasonable" is a legal fiction with no specific definition so it is something for the jury to decide in any given situation.)
DUTY OF OBEDIENCE
This one is easy. The agent must obey the reasonable instructions of the principal. The agent has a responsibility to do the job he was hired to do.
Example of a breach: P hires A to run Shop. P orders A to deal with X to purchase widgets. A purchases equal-quality widgets from Y at a substantially higher price even though X had plenty of widgets available. A's act of disobedience was unreasonable under the circumstances because he could have contracted with X to save money as he was told.
Example of not-a-breach: P hires A to run the same shop. P orders A to murder X and steal the widgets. This request is not reasonable because, not only is it out of the scope of A's duties, but the act is illegal. Illegal acts are presumptively unreasonable so no breach has occurred.
DUTY OF CARE
The agent must exercise reasonable care in performing functions for the principal.
Example of a breach: P hires A to run Shop. P tells A to contract to purchase widgets at the best price he can find. X calls to solicit widgets right after A gets off the phone with P. X's widgets cost $100/widget more than Y's widgets cost even though the widgets are comparable. A did not do any research or shopping around, but immediately contracted to purchase widgets from X.
A has exercised his duty of care because he did not even try to find cheaper widgets.
Example of not-a-breach: P gives A the same instructions as above. X calls to solicit widgets and A tells him he will call back to confirm the purchase later. A calls Y, Z, L, F and M, none of which can provide him with a cheaper price for comparable widgets than X. Because, he needs to order the widgets that day to fill an order to C, A contracts with X to purchase widgets. R calls the next day to solicit widgets at a substantially cheaper price than X.
Here, A has performed the duty of care because he made a reasonable effort to find less expensive widgets in the time he was allotted to perform the task.
DUTY TO ACCOUNT
The agent must account to the principal for money and property received by the agent in the course of agency functioning.
Example: A is regularly required to fly for his work under P. P pays for the flight but A is rewarded the frequent flier miles.
If A does not report his frequent flier miles to P, then he has breached his duty to account.
If A reports his frequent flier miles to P, then he has not breached his duty to account.
DUTY NOT TO COMPETE WITH PRINCIPAL & NOT TO BE A DUAL AGENT
The agent must NOT compete with the principal, and the agent cannot serve as a dual agent for two principals (unless the agent has disclosed the proposed dual representation to both principals and has obtained their consent to such dual representation).
Example: A is hired by P to contract for the purchase of land in Constantinople. X hires A to sell land in Constantinople.
Here, A would be a dual agent to contracting parties, and would violate his duty not to be a dual agent to both parties, unless he made full disclosure to each party. He would have to explain to each party that he was simultaneously representing the other party in the transaction, and both parties would have to give consent.
Example: A is hired to purchase a plot of land for P but instead purchase the land for himself. A then sells the land to X for a profit. This act breached the duty of loyalty because A took from P the investment opportunity that P had hired A to perform. However, A could have prevented his breach of duty by making full disclosure that he was going to buy the land himself and if he offered P the chance to buy the lot for a reasonable time.
Here, A has breached his duty not to compete with P by buying the land for himself that he was hired to buy for P.
But Alex, isn't that the same hypothetical from duty of obedience? Why yes it is. I'm glad you asked.
The duty of obedience is an umbrella duty that will tack on to or encompass any other duty. Closen explained that if on the Bar Exam there is one breach of duty then there will be two breaches, one for the initial/specific breach, in this case the breach of the duty not to compete, and the second for breach of obedience.
Monday, June 11, 2012
Barbri at home
I know a handful of my classmates have been just watching the Barbri lectures at home because they find the power to control their breaks to be comfortable. I guess this works for some people but there's no way I can do this.
As a result of my 2:30 am arrival I didn't make it to class this morning and because I woke up with a barbecue jones, I didn't get started until late this afternoon, although I did have a wonderful lunch with a good friend.
I'm currently trying to get through the Barbri lectures on my own schedule and I keep stopping. I continue to be distracted, by the Internet, by writing and by my own short attention span.
I cannot miss another one of these lectures. I require the structure that the classroom environment provides. I must be cut off from the Internet, that never-ending playground of procrastination, and from everything but the material I'm studying or I may not learn it.
This post itself is a product of such procrastination, the distractions that the World Wide Web provides.
While this started as an activity to fill the 10-minute void between Barbri sections, it has now become a tool by which I put off the painfully mundane lecture that waits for me. I've only got one left, another hour until I can do something else, maybe take a break from the law if that were possible.
"Oh, I'll do it later. I don't want to do it now."
Well, Alex, its later. Get back to work.
As a result of my 2:30 am arrival I didn't make it to class this morning and because I woke up with a barbecue jones, I didn't get started until late this afternoon, although I did have a wonderful lunch with a good friend.
I'm currently trying to get through the Barbri lectures on my own schedule and I keep stopping. I continue to be distracted, by the Internet, by writing and by my own short attention span.
I cannot miss another one of these lectures. I require the structure that the classroom environment provides. I must be cut off from the Internet, that never-ending playground of procrastination, and from everything but the material I'm studying or I may not learn it.
This post itself is a product of such procrastination, the distractions that the World Wide Web provides.
While this started as an activity to fill the 10-minute void between Barbri sections, it has now become a tool by which I put off the painfully mundane lecture that waits for me. I've only got one left, another hour until I can do something else, maybe take a break from the law if that were possible.
"Oh, I'll do it later. I don't want to do it now."
Well, Alex, its later. Get back to work.
Swimming in the law
I didn't get home until about 2:30 am last night because I spent yesterday at a friend's cabin outside of Jefferson City. I really needed a day like yesterday, the water, the trees, the wind, the sky and the people. I had the chance to converse with old friends and new. I'm thankful for days like yesterday, days that refill my cup, or at least top it off.
However, hypotheticals kept popping in my head all day long. Every so often I'd ask Abby Medin, a Washington Law School grad, fellow Barbri student, friend and birthday-girl, what she thought about a fact pattern that happened to occur in general conversation. Of course it was usually necessary to tweak a story to give a legitimate fact pattern.
"Hey, Abby, would that have been considered an implied easement if the Brunner's stopped giving them permission to store the tractor?" I'd ask. "Would the neighbors have rights to enforce the easement?"
In this particular situation she referred me to her father, Ron Medin, who is actually an attorney. The answer he gave me was correct and practical, which doesn't help me at all for the Bar Exam as the Bar seems to be located in a theoretical universe akin to Marvel, D.C. or Kevin Smith's Jay and Silent Bob Universe.
My constant hypothesizing had to be annoying but my brain wouldn't shut off so I really didn't have a choice. I guess I could have kept it to myself but I really wanted to know the answers and I seem to learn through conversation. I just feel bad for everyone who had to listen to me.
Since Bar prep started I've been gradually getting deeper into the law. At first I walked in knee deep, splashed the rest of me to get used to the cold. About a week ago the water was at my waist and I think I might have just dived in. I'm swimming in it and I think I need to get a snorkel. In another week or two I'm going to need scuba gear and come July I'll be in the market for a submarine.
Law and policy is overtaking all space in my mind but for the decent section composed entirely of barbecue sauce and potatoes. To anyone who encounters me for the next six or so weeks, beware, although I don't know how much I'm going to get out.
However, hypotheticals kept popping in my head all day long. Every so often I'd ask Abby Medin, a Washington Law School grad, fellow Barbri student, friend and birthday-girl, what she thought about a fact pattern that happened to occur in general conversation. Of course it was usually necessary to tweak a story to give a legitimate fact pattern.
"Hey, Abby, would that have been considered an implied easement if the Brunner's stopped giving them permission to store the tractor?" I'd ask. "Would the neighbors have rights to enforce the easement?"
In this particular situation she referred me to her father, Ron Medin, who is actually an attorney. The answer he gave me was correct and practical, which doesn't help me at all for the Bar Exam as the Bar seems to be located in a theoretical universe akin to Marvel, D.C. or Kevin Smith's Jay and Silent Bob Universe.
My constant hypothesizing had to be annoying but my brain wouldn't shut off so I really didn't have a choice. I guess I could have kept it to myself but I really wanted to know the answers and I seem to learn through conversation. I just feel bad for everyone who had to listen to me.
Since Bar prep started I've been gradually getting deeper into the law. At first I walked in knee deep, splashed the rest of me to get used to the cold. About a week ago the water was at my waist and I think I might have just dived in. I'm swimming in it and I think I need to get a snorkel. In another week or two I'm going to need scuba gear and come July I'll be in the market for a submarine.
Law and policy is overtaking all space in my mind but for the decent section composed entirely of barbecue sauce and potatoes. To anyone who encounters me for the next six or so weeks, beware, although I don't know how much I'm going to get out.
Friday, June 8, 2012
"If it was easy everyone would do it."
Since I last posted we've gone through double torts, wills and double doses of property. Each day consists of three and a half hours of class broken up into three sections with two 10 minute breaks.
I have notes that I took on the side in order to make some blog posts but between multiple choice practice tests, practice essays, reading the outlines before class and AMP questions when it works. (BTW after I finished posting about AMP the last time it shut down mid-question.)
This process is redundant and difficult. I do not concentrate well when I'm only reading, when I'm trying to memorize so this task has been difficult. I guess that's a main reason I want to go into journalism, to interview, to dig, to write. It's not like lawyers have to memorize much but I do know that dealing with the exact same few laws every day would drive me nuts so the fact that we cover a different aspect of law every day keeps be into it, keeps me awake, keeps me alive.
I've heard that the Bar test has nothing to do with being a lawyer and that seems to be the case. However, I do get why the profession sees fit to use such a test to regulate who gets in the club. It's not because you need to memorize more than a few laws and the rules of evidence, if you're a trial lawyer, but because it's hard.
As Tom Hanks explained as Jimmy Dugan in A League of Their Own, "If it was easy then everyone would do it." The Bar is the last weeding out process, to separate the men from the boys, the women from the girls, those who care enough from those who don't, not those who are smart enough from those who aren't. If you made it this far you can make if you try, if you do the work.
Well, there's that, and there's the fact that every other lawyer had to do it so why should they change it now? Tradition. Maybe there's a better way, but why look for it?
"I had to go through that pain in the ass so why shouldn't they?"
Maybe there's a way where we could actually make sure attorneys know what they're doing before they're issued a license, released in the wild to interfere with people's lives, the most important situations their clients will ever have to deal with. Maybe we could create a law school culture where students learn to be lawyers, not just to think like lawyers.
Just think about this; Would you want a doctor who has only studied medical theory, who has only performed a few dissections, who has only taped up a few artificial wounds?
I have notes that I took on the side in order to make some blog posts but between multiple choice practice tests, practice essays, reading the outlines before class and AMP questions when it works. (BTW after I finished posting about AMP the last time it shut down mid-question.)
This process is redundant and difficult. I do not concentrate well when I'm only reading, when I'm trying to memorize so this task has been difficult. I guess that's a main reason I want to go into journalism, to interview, to dig, to write. It's not like lawyers have to memorize much but I do know that dealing with the exact same few laws every day would drive me nuts so the fact that we cover a different aspect of law every day keeps be into it, keeps me awake, keeps me alive.
I've heard that the Bar test has nothing to do with being a lawyer and that seems to be the case. However, I do get why the profession sees fit to use such a test to regulate who gets in the club. It's not because you need to memorize more than a few laws and the rules of evidence, if you're a trial lawyer, but because it's hard.
As Tom Hanks explained as Jimmy Dugan in A League of Their Own, "If it was easy then everyone would do it." The Bar is the last weeding out process, to separate the men from the boys, the women from the girls, those who care enough from those who don't, not those who are smart enough from those who aren't. If you made it this far you can make if you try, if you do the work.
Well, there's that, and there's the fact that every other lawyer had to do it so why should they change it now? Tradition. Maybe there's a better way, but why look for it?
"I had to go through that pain in the ass so why shouldn't they?"
Maybe there's a way where we could actually make sure attorneys know what they're doing before they're issued a license, released in the wild to interfere with people's lives, the most important situations their clients will ever have to deal with. Maybe we could create a law school culture where students learn to be lawyers, not just to think like lawyers.
Just think about this; Would you want a doctor who has only studied medical theory, who has only performed a few dissections, who has only taped up a few artificial wounds?
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