february 2020 edition - smartbarprep · 2019-11-27 · mpt will test the same or similar tasks that...

MPT Frequency Analysis For the Multistate Performance Test (MPT)

February 2020 Edition

© 2020 SmartBarPrep | www.smartbarprep.com

The SmartBarPrep MPT Frequency Analysis (hereinafter “Study Guide”) is designed to assist you in studying for the Multistate Performance Test (MPT) and the Uniform Bar Exam (UBE). It was NOT designed to be a prediction of what will be asked on the upcoming bar exam or any future examinations. Although many of the same tasks and/or assignments (“tasks”) have been repeated on past MPT questions, there is NO GUARANTEE that any future MPT will test the same or similar tasks that have appeared on past exams. SmartBarPrep makes NO WARRANTIES or GUARANTEES as to what legal tasks the National Conference of Bar Examiners and/or state bar examiners will test on the upcoming bar exam or any future examinations.

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Table of Contents

MPT Frequency ChartMPT Frequency ChartMPT Frequency ChartMPT Frequency Chart 1111

Tasks Appearing on Past Multistate Performance Tests (MPT’s)

MPT Frequency TableMPT Frequency TableMPT Frequency TableMPT Frequency Table 2222

Number of Times Task Appeared out of Total Number of MPT's

Analysis of Past MPT AssignmentsAnalysis of Past MPT AssignmentsAnalysis of Past MPT AssignmentsAnalysis of Past MPT Assignments 3333

Breakdown of Tasks / Assignments Appearing on Past Multistate Performance Tests (MPT’s)


1

Tasks Tasks Tasks Tasks AppearingAppearingAppearingAppearing on Paston Paston Paston Past Multistate Multistate Multistate Multistate PerformancePerformancePerformancePerformance Tests (MPT’s)Tests (MPT’s)Tests (MPT’s)Tests (MPT’s)

9

12

24

46

9

2

1

1

2

1

3

0 5 10 15 20 25 30 35 40 45

Persuasive Memorandum

Persuasive Letter

Persuasive Brief

Objective Memorandum

Objective Letter

Draft Will

Draft Interrogatories

Draft Findings of Fact & Conclusions of Law

Draft Closing Argument

Draft Causes of Action

Draft Agreement/Contract

# of Times Tested

Number of Times Tasks Appeared on Past ExamsNumber of Times Tasks Appeared on Past ExamsNumber of Times Tasks Appeared on Past ExamsNumber of Times Tasks Appeared on Past Exams


2

Number of Times Task AppearedNumber of Times Task AppearedNumber of Times Task AppearedNumber of Times Task Appeared out of Total Number of MPT'sout of Total Number of MPT'sout of Total Number of MPT'sout of Total Number of MPT's

Past MPT Tasks # of Times Tested % out of Total Exams

Draft Agreement/Contract 3 6.5%

Draft Causes of Action 1 2.2%

Draft Closing Argument 2 4.3%

Draft Findings of Fact & Conclusions of Law 1 2.2%

Draft Interrogatories 1 2.2%

Draft Will 2 4.3%

Objective Letter 9 19.6%

Objective Memorandum 46 100.0%

Persuasive Brief 24 52.2%

Persuasive Letter 12 26.1%

Persuasive Memorandum 9 19.6%


3

Breakdown of Breakdown of Breakdown of Breakdown of Tasks Tasks Tasks Tasks / / / / AssignmentsAssignmentsAssignmentsAssignments Appearing on PastAppearing on PastAppearing on PastAppearing on Past

Multistate Performance TestsMultistate Performance TestsMultistate Performance TestsMultistate Performance Tests ((((MPT’sMPT’sMPT’sMPT’s))))

Exam MPT Name Task / Assignment

July 2019 (MPT-1) American Electric v. Wuhan Precision

Parts Objective Memorandum

July 2019 (MPT-2) Estate of Carl Rucker Objective Memorandum

Feb 2019 (MPT-1) State of Franklin Dept. of Children &

Families v. Little Tots Child Care Center Persuasive Memorandum

Feb 2019 (MPT-2) In re Remick Objective Memorandum

July 2018 (MPT-1) State of Franklin v. Hale Persuasive Brief

July 2018 (MPT-2) Rugby Owners & Players Association Draft Agreement/Contract1

Feb 2018 (MPT-1) State of Franklin v. Clegane Persuasive Brief

Feb 2018 (MPT-2) In re Hastings Objective Memorandum

† A small number of MPT’s have tested more than one type of task in the performance test assignment. 1 Re-draft Articles of Association for Joint Venture + Explain Reasoning.

Total Exams Analyzed 46

Total # of MPT’s 105

Total # Tasks Previously Tested† 110

SmartBarPrep Analysis of Past MPT Assignments


4


July 2017 (MPT-1) Peek et al. v. Doris Stern and Allied

Behavioral Health Services Persuasive Brief

July 2017 (MPT-2) In re Zimmer Farm Objective Memorandum

Feb 2017 (MPT-1) In re Ace Chemical Objective Memorandum

Feb 2017 (MPT-2) In re Guardianship of King Draft Findings of Fact & Conclusions

of Law2

July 2016 (MPT-1) In re Whirley Objective Memorandum

July 2016 (MPT-2) Nash v. Franklin Department of Revenue Persuasive Brief

Feb 2016 (MPT-1) In re Anderson Objective Memorandum

Feb 2016 (MPT-2) Miller v. Trapp Persuasive Letter + Objective

Memorandum3

July 2015 (MPT-1) In re Bryan Carr Objective Letter4

July 2015 (MPT-2) In re Franklin Aces Objective Letter5

Feb 2015 (MPT-1) In re Harrison Objective Memorandum

Feb 2015 (MPT-2) In re Community General Hospital Persuasive Letter6

July 2014 (MPT-1) In re Kay Struckman Objective Memorandum

July 2014 (MPT-2) In re Linda Duram Persuasive Letter7

Feb 2014 (MPT-1) In re Rowan Persuasive Brief

Feb 2014 (MPT-2) In re Peterson Engineering Consultants Objective Memorandum

July 2013 (MPT-1) Monroe v. Franklin Flags Amusement

Park Persuasive Brief

July 2013 (MPT-2) Palindrome Recording Contract Draft Agreement/Contract8

Feb 2013 (MPT-1) In re Wendy Martel Objective Letter9

Feb 2013 (MPT-2) In re Guardianship of Will Fox Persuasive Brief

July 2012 (MPT-1) State of Franklin v. Soper Objective Memorandum10

July 2012 (MPT-2) Ashton v. Indigo Construction Co. Persuasive Brief

2 Instructions state to draft assignment in a persuasive way, but without being explicitly argumentative. 3 Two Tasks Assigned: Persuasive Demand Letter + Short Objective Memorandum. 4 Opinion Letter to Client. 5 Opinion Letter to Client. 6 Draft Letter Responding to Purported HIPAA violations. 7 Persuasive Demand Letter. 8 Re-draft Provisions of a Rock Band's Recording Contract + Explain Reasoning/Complications. 9 Opinion Letter to Client. 10 Objective Bench Memorandum.



5


Feb 2012 (MPT-1) Franklin Resale Royalties Legislation Persuasive Memorandum11

Feb 2012 (MPT-2) In re WPE Property Development, Inc. Objective Letter12

July 2011 (MPT-1) In re Field Hogs, Inc. Objective Memorandum + Draft

Agreement/Contract13

July 2011 (MPT-2) In re Social Networking Inquiry Persuasive Memorandum

Feb 2011 (MPT-1) Butler v. Hill Objective Memorandum + Draft

Closing Argument14

Feb 2011 (MPT-2) In re Magnolia County Objective Memorandum

July 2010 (MPT-1) In re Hammond Persuasive Brief

July 2010 (MPT-2) In re City of Ontario Objective Memorandum

Feb 2010 (MPT-1) State of Franklin v. McLain Persuasive Brief

Feb 2010 (MPT-2) Logan v. Rios Objective Memorandum15

July 2009 (MPT-1) Jackson v. Franklin Sports Gazette, Inc. Objective Memorandum

July 2009 (MPT-2) In re City of Bluewater Persuasive Letter16

Feb 2009 (MPT-1) Phoenix Corporation v. Biogenesis, Inc. Objective Memorandum

Feb 2009 (MPT-2) Ronald v. Department of Motor Vehicles Persuasive Memorandum

July 2008 (MPT-1) Bohmer v. Bohmer Objective Memorandum

July 2008 (MPT-2) Williams v. A-1 Automotive Center Objective Memorandum + Draft

Causes of Action17

Feb 2008 (MPT-1) In re Velocity Park Objective Memorandum

Feb 2008 (MPT-2) In re Lisa Peel Objective Memorandum

July 2007 (MPT-1) Acme Resources, Inc. v. Robert Black

Hawk et al. Persuasive Brief

July 2007 (MPT-2) In re Mistover Acres LLC Objective Memorandum

Feb 2007 (MPT-1) In re Tamara Shea Objective Memorandum

Feb 2007 (MPT-2) Glickman v. Phoenix Cycles, Inc. Persuasive Letter18

11 Persuasive "Leave-Behind" Document. 12 Opinion Letter to Client. 13 Two Tasks: Draft Objective Memorandum + Re-draft Arbitration Clause. 14 Two Tasks: Draft Objective Memorandum + Persuasive Closing Argument. 15 Early Dispute Resolution (EDR) Statement to EDR Judge. Instructions stated to candidly discuss the strengths & weaknesses of the case. 16 Response to Demand Letter. 17 Two Tasks: Draft Objective Memorandum + Draft Causes of Action for Fraud. 18 Follow-up Letter to Opposing Counsel Persuasively Setting Forth Basis of Client's Claim and Why No Exceptions Apply.



6


July 2006 (MPT-1) Larson Real Estate File Objective Memorandum

July 2006 (MPT-2) Parker v. Essex Productions Persuasive Memorandum

Feb 2006 (MPT-1) Harris v. CBL Objective Memorandum

Feb 2006 (MPT-2) State of Franklin v. Butler Persuasive Brief

July 2005 (MPT-1) In re Clarke Corporation Objective Letter19

July 2005 (MPT-2) In re Brigham Persuasive Letter20

Feb 2005 (MPT-1) In re Rose Kingsley Objective Memorandum

Feb 2005 (MPT-2) Reynolds v. Preferred Medical Providers Persuasive Letter21

Feb 2005 (MPT-3) In re Barnett Objective Memorandum

July 2004 (MPT-1) In re Marian Bonner Persuasive Letter22

July 2004 (MPT-2) Graham Realty, Inc. v. Brenda Chapin Objective Memorandum23

July 2004 (MPT-3) Wells v. Wells Persuasive Brief

Feb 2004 (MPT-1) State v. Miller Persuasive Brief

Feb 2004 (MPT-2) Rivera v. Baldisari Amusement Parks,

Inc. Objective Memorandum

Feb 2004 (MPT-3) Bennett v. Sands Construction Company Objective Memorandum

July 2003 (MPT-1) Vargas v. Monte Persuasive Brief

July 2003 (MPT-2) In re Franklin Forum Objective Memorandum

July 2003 (MPT-3) Meerstein v. EasyGO Airlines Objective Memorandum

Feb 2003 (MPT-1) In re Suarez Persuasive Letter24

Feb 2003 (MPT-2) In re Cora Ames Objective Memorandum

Feb 2003 (MPT-3) Arden Industries, Inc. v. Freight

Forwarders, Inc. Persuasive Brief

July 2002 (MPT-1) State v. Tweedy Persuasive Memorandum

July 2002 (MPT-2) In re Al Merton Draft Will25

July 2002 (MPT-3) GVP Non-Disclosure Agreement Objective Letter26

19 Opinion Letter to Client. 20 Draft Persuasive Letter that will Serve as a Brief in Support of an Application to the Court. 21 Letter to Opposing Counsel Rejecting Demand to Arbitrate. 22 Letter to Opposing Counsel. 23 Case Planning Memo. 24 Letter to Opposing Counsel. 25 Draft Will Provisions + Explain Reasoning. 26 Opinion Letter to Client.



7


Feb 2002 (MPT-1) Franklin Construction Company Objective Letter27

Feb 2002 (MPT-2) In re Madert Persuasive Letter28

Feb 2002 (MPT-3) Whitford v. Newberry Middle School

District Draft Closing Argument29

July 2001 (MPT-1) State v. White Persuasive Brief30

July 2001 (MPT-2) True Values Television Network, Inc. Objective Memorandum

July 2001 (MPT-3) Petition of Mona St. John Persuasive Brief31

Feb 2001 (MPT-1) State v. Palm Persuasive Brief

Feb 2001 (MPT-2) Steinberg & Son, Inc. v. Wye Objective Memorandum

Feb 2001 (MPT-3) Consumer Protection Division v. Bernhard's Appliances, Inc.

Persuasive Brief

July 2000 (MPT-1) March v. Betts Persuasive Letter32

July 2000 (MPT-2) Pauling v. Del-Rey Wood Products Co. Draft Interrogatories33

July 2000 (MPT-3) Franklin Asbestos Handling Regulations Persuasive Memorandum + Objective Memorandum34

Feb 2000 (MPT-1) In re Application Specialists, Inc. Objective Memorandum

Feb 2000 (MPT-2) Proffet v. Dinsdale Instruments, Inc. Persuasive Brief

Feb 2000 (MPT-3) In re Lewis T. Travin Persuasive Memorandum

July 1999 (MPT-1) In re Steven Wallace Objective Memorandum

July 1999 (MPT-2) Kantor v. Bellows Persuasive Letter35

July 1999 (MPT-3) In re Emily Dunn Draft Will36

Feb 1999 (MPT-1) Meley v. Boundless Vacations, Inc. Objective Memorandum

Feb 1999 (MPT-2) In re Sylvester Parks Persuasive Memorandum

Feb 1999 (MPT-3) In re Marina Martin Objective Memorandum

July 1998 (MPT-1) State v. Robert Baker Objective Memorandum

27 Opinion Letter to Client. 28 Letter to Opposing Counsel. 29 Draft Closing Argument to the Court with a Persuasive & Compelling Presentation. 30 Brief in Support of a Motion to be heard by the Judge in camera. 31 Legal Argument Section of a Petition for Clemency. 32 Persuasive Mediation Statement. 33 Draft Interrogatories + Short Explanation of How Each Will Serve Intended Purpose. 34 Two Tasks: Write a Memo that States the "Best Case" for Non-Preemption of Regulatory Scheme + Discuss if Each Provision can Survive a Preemption Challenge. 35 Letter to Opposing Counsel. 36 Draft Will Provisions + Explain Reasoning.



8


July 1998 (MPT-2) In re Laser Lens, Inc. Objective Letter37

Feb 1998 (MPT-1) Piccolo v. Dobbs Persuasive Brief

Feb 1998 (MPT-2) In re Gardenton Board of Education Objective Memorandum

July 1997 (MPT-1) In re Kiddie-Gym Systems, Inc. Objective Letter38

July 1997 (MPT-2) State v. Devine Persuasive Brief

Feb 1997 (MPT-1) Alexander v. BTI and Bell Persuasive Brief

Feb 1997 (MPT-2) In re Hayworth and Wexler Objective Memorandum

37 Opinion Letter to Client. 38 Opinion Letter to Client.

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Essay Priority Outline For the UBE/MEE


© 2020 SmartBarPrep.com 1

AGENCY01

A. Agency Relationships

■ Creation of Agency Relationship

• An agent is a person or entity that acts on behalf of another – the principal. Agency is a fiduciary relationship, and exists if there is: (1) assent (a formal or informal agreement between the principal and the agent); (2) benefit (the agent’s conduct on behalf of the principal primarily benefits the principal); AND (3) control (the principal has the right to control the agent by being able to supervise the agent’s performance – the degree of control does not need to be significant). Whether an agency relationship exists depends upon the existence of the required elements above (the characterization of the relationship by the parties is irrelevant).

■ Types of Agency Relationships

• There are three types of agency relationships. A universal agent has broad authority to act on behalf of the principal, and is authorized to perform ALL acts the principal is allowed to perform. A general agent normally has authority to conduct a series of transactions over a period of time for a particular purpose, business, or operation (i.e. a manager of a restaurant). A special agent has limited authority to conduct: (a) a specific act/transaction; OR (b) certain actions over a specified period of time.

■ Termination of Agency Relationship

• An agency relationship terminates and the agent no longer has authority to act if: (a) the principal or the agent manifests to the other that the relationship is terminated; (b) a specified term of the agent’s authority expired; (c) upon operation of law by the death of the principal or agent; OR (d) upon operation of law by the incapacity of the principal or agent (except where a durable power of attorney exists).

o Under the common law, an agent’s authority is revoked upon death, regardless of whether the third party has notice of the death. In some states, the authority is not revoked until the third party is notified of the principal’s death.

• Apparent authority continues until the principal communicates the termination to third parties (even if the agency relationship was actually terminated). A principal may communicate termination by notifying third parties directly, making a public announcement, or by recovering from the agent any items indicating authority.

4 of 50 Exams

HIGHFeb 2009, Essay 1Feb 2006, Essay 2July 2004, Essay 5Feb 1996, Essay 5

1 of 50 Exams

LOW Feb 2005, Essay 7

3 of 50 Exams

MEDJuly 2002, Essay 6July 2001, Essay 6July 1996, Essay 2

MEE TIP The subjects of Agency and Partnerships are normally tested together on essay questions.

MEE TIP The rule for Creation of an Agency Relationship is normally tested along with such topics as authority, undisclosed principal, or employee vs. independent contractor.

© 2020 SmartBarPrep.com 151

MEE TIP: When & How to Discuss Relevance

EVIDENCE09

MEE TIP All evidence essay questions must be answered according to the Federal Rules of Evidence.

A. Probative Value

■ Probative Value: Relevancy & Rule 403 Exclusions

• Relevancy: To be admissible, evidence must be relevant. Evidence is relevant if: (1) it has any tendency to make a fact more or less probable than it would be without the evidence; AND (2) the fact is of consequence in determining the action. Relevant evidence is admissible unless another rule or exclusion provides otherwise.

• Rule 403 Exclusions: Under FRE 403, the court may exclude relevant evidence if its probative value is substantially outweighed by a danger of: (a) unfair prejudice; (b) confusing the issues; (c) misleading the jury; (d) undue delay; (e) wasting time; OR (f) being needlessly cumulative. Evidence is unfairly prejudicial when the evidence is (1) unnecessary, AND (2) might cause the jury to improperly sympathize or dislike a party. As an alternative to excluding evidence completely under Rule 403, the court could limit the unfair prejudice to a party by limiting the scope of evidence or examination to specific topics.

If a question asks whether certain evidence is “admissible”, be sure to discuss Relevance. In recent essays, relevancy has been discussed briefly for each item even though relevance wasn’t the primary rule tested. For example, on the July 2018 MEE (Essay 5), Relevance was briefly discussed at the beginning of Point One, Two, Three(a), and Four.

For this type of brief analysis: First, state “Evidence is relevant if it has any tendency to make a fact more probable or less probable than it would be without the evidence.” Then, write one sentence on why the evidence is relevant. Remember to state the rule and analysis very briefly (unless a greater analysis of Relevance and the Rule 403 exclusions is warranted).

B. Policy Exclusions

■ Subsequent Remedial Measures

• Subsequent remedial measures are measures taken that would have made an earlier injury or harm less likely to occur. Under the FRE, evidence of subsequent remedial measures is NOT admissible to prove: (a) negligence; (b) culpable conduct; (c) a defect in a product or design; OR (d) a need for a warning or instruction.

7 of 25 Exams

HIGHJuly 2018, Essay 5 July 2017, Essay 5Feb 2016, Essay 2July 2014, Essay 5Feb 2013, Essay 7Feb 2012, Essay 1Feb 2010, Essay 7

1 of 25 Exams

MEDFeb 2012, Essay 1

FRE = Federal Rules of Evidence

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© 2020 SmartBarPrep | www.smartbarprep.com 1

AGENCY 01

A. Agency Relationships

Creation of Agency Relationship

Definition – Agency is a fiduciary relationship, where a

person or entity (the agent) acts on behalf of another

(the principal).

Elements – An agency relationship exists if there is:

1) Assent – a formal or informal agreement;

2) Benefit – the conduct primarily benefits the

principal; AND

3) Control – the principal has the right to control

the agent (control doesn’t need to be

significant).

*The characterization of the relationship by the parties is

irrelevant.

Types of Agency Relationships

− Universal Agent – has broad authority,

authorized for ALL acts the principal can

perform.

− General Agent – has authority to conduct a

series of transactions over a period of time.

− Special Agent – has limited authority either for

a specific act/transaction OR a specified period

of time.

Termination of Agency Relationship

An agency relationship terminates by:

a) A manifestation by either party that the

relationship is terminated;

b) Expiration of a specified term of authority;

c) Death of principal or agent (by operation of law);

OR

d) Incapacity of the principal or agent (by

operation of law) – except if a durable power of

attorney exists.

Death of Principal:

Common Law → agency is terminated regardless of

whether the third-party has notice of principal’s death.

Some States → NOT terminated until the third-party has

notice of the death.

Agency Contracts – Principal can terminate the agent

at any time.

− BUT, principal may be liable for damages if

agent is terminated prior to the expiration of a

contract (unless the agent materially breached

contract).

B. Contractual Liability of Principal & Agent

Actual Authority – A principal is bound to a contract

entered into by its agent if the agent had actual authority.

Two Types – occurs if:

Express Authority → by principal’s explicit directions to

the agent (either orally or in writing).

Implied Authority → either:

a) Action is necessary to carry out the agent’s

express authorized duties;

b) Agent acted similarly in prior dealings with the

principal; OR

c) It’s customary for an agent in that position

(silence/acquiescence can give rise to a

reasonable belief of authority in the future).

An agent has actual authority when acting within their

reasonable understanding of authority, even if the

principal later shows the agent was mistaken.

Apparent Authority – A principal is bound to a contract

entered into by its agent if the agent had apparent

authority.

Apparent Authority exists when:

1) A third-party reasonably believes the agent

has authority to act on behalf of the principal;

AND

2) That belief is traceable from the principal’s

manifestations (principal holds the agent out as

having authority).

A principal holds the agent out as having authority

when he:

a) gives a position or title indicating authority;

b) previously held the agent out and did not

published a revocation; OR

c) cloaked the agent with the appearance of

authority.

*Continues until the principal communicates termination

to third-parties.

Apparent Authority is NOT applicable if the third-party

had knowledge that the agent did not have actual

authority.

Unidentified/Partially Disclosed Principal → Apparent

Authority CAN exist.

Undisclosed Principal → Apparent Authority CANNOT

exist.

Inherent Agency Power – Protects third-parties when

dealing with agents even if there is no actual or apparent

authority.

H

H H

L

M

M


PARTNERSHIPS 02

Definitions

Pship = Partnership

UPA = Uniform Partnership Act

RUPA = Revised Uniform Partnership Act

ULPA = Uniform Limited Partnership Act

RULPA = Revised Uniform Limited Partnership Act

A. Creation of Partnerships

General Partnership (GP) – is created when:

1) two or more persons;

2) as co-owners;

3) carry on a business for profit.

*Intent to form a partnership is NOT required.

A joint venture or sharing in gross profits DOES NOT

automatically create a partnership.

Creditor vs. Partner – A person who receives a share of

the profits is presumed to be a partner UNLESS the

payment is received in payment:

a) of a debt;

b) for wages as an employee or independent

contractor;

c) of rent;

d) of an annuity or retirement benefit;

e) of interest/loan charges; OR

f) for the sale of goodwill of a business.

Limited Partnership (LP) – is composed of limited

partner(s) AND at least one general partner.

Formation – An LP is formed upon filing a Certificate of

Limited Partnership with the Secretary of State, which

must include:

1) name of Pship;

2) address of Pship;

3) name and address of each partner;

4) whether the Pship is an LLP; AND

5) signed by a general partner.

Limited Liability Partnership (LLP) – In an LLP, all

partners have limited personal liability.

To Become an LLP:

1) It must be approved by the same vote necessary

to amend the Pship Agreement; AND

2) A Statement of Qualification must be filed with

the Secretary of State containing:

i. name and address of Pship;

ii. statement that the Pship elects to

become an LLP; and

iii. a deferred effective date (if any).

Filing DOES NOT create a new partnership (if a GP or

LP existed prior to filing).

− The Pship remains liable for any obligations

before it became an LLP.

Amending the Pship Agreement – Unless agreed

otherwise, the Pship agreement may be amended at any

time with a unanimous vote.

B. Power & Authority of Partners

Authority to Bind the Partnership – A partner is an

agent of the Pship, and generally has authority to bind

the Pship for its business (including contracts).

− To bind the Pship, the partner MUST have

authority.

Express Actual Authority – A partner receives such

authority from the partners.

− Acts within the ordinary course of business

→ must be approved by a majority of the

partners.

− Acts outside the ordinary course of business

→ must be approved unanimously.

− If Pship Agreement is silent → a partner has

authority for usual & customary matters

UNLESS he knows: (a) other partners might

disagree, or (b) that consultation is appropriate.

Ordinary Course of Business = normal and necessary for

managing the business.

Implied Actual Authority (Incidental Authority) – A

partner may take actions reasonably incidental or

necessary to achieve the partner’s authorized duties.

Apparent Authority – A partner has apparent authority

for acts:

a) conducted within the ordinary course of the

Pship business; OR

b) of the kind carried on by the Pship.

BUT, a partner’s act will NOT bind the Pship when the:

1) Partner lacked authority; AND

2) Third-party knew (or received notice) of a lack of

authority.

Authority to Bind the Partnership After Dissolution –

A partner’s authority is limited after dissolution.

Actual Authority → limited only to acts appropriate for

winding up the business.

H

H

M

M

M


CORPORATIONS & LLC’S 03

Definitions

BoD = Board of Directors

SH = Shareholder

RMBCA = Revised Model Business Corporation Act

RULLCA = Revised Uniform Limited Liability Company

Act

A. Formation of a Corporation

Formation of a Corporation

Date of Corporate Existence → begins on the date the

Articles of Incorporation are properly filed with the

Secretary of State, unless a delayed effective date is

specified.

− RMBCA → DOES NOT allow an earlier effective

date.

De Jure Corporation = a properly formed corporation.

Articles of Incorporation – are filed to form a

corporation, and MUST contain:

1) corporate name;

2) number of shares the corp. is authorized to

issue;

3) corp.’s address and name of the initial registered

agent; AND

4) name and address of each incorporator.

The Articles of Incorporation control if there is a

conflict with the Bylaws.

Bylaws = rules and regulations adopted by the BoD that

govern the internal operations of a corp.

− RMBCA → bylaws may contain any provision

not inconsistent with the: (a) Articles of

Incorporation; OR (b) law of the jurisdiction.

Amending the Bylaws:

Shareholders → may amend or repeal.

Board of Directors → may amend or repeal UNLESS:

a) Articles of Incorporation exclusively reserve the

power to SH’s; OR

b) The SH’s (in amending a bylaw) expressly

provide that the BoD cannot amend or reinstate

that specific bylaw.

*If a bylaw deals with director nomination procedures,

the BoD retains power to safeguard the voting process,

BUT cannot repeal a shareholder approved bylaw.

Powers of a Corporation – A corp. has the power to do

all things necessary or convenient to carry out its

business and affairs.

− Includes → lawsuits, own/lease real property,

contracts, borrow/loan money, make

investments, involvement with other businesses,

fix compensation/salaries, charitable donations,

pay/engage in lobbying.

B. Formation of a Limited Liability Company

Formation of an LLC

Articles of Organization – An LLC is formed when the:

1) Articles of Organization (a.k.a. Certificate of

Formation) is properly filed with the Secretary of

State; AND

2) LLC has at least one member.

Operating Agreement – Governs: (1) the relations

between the members and LLC; (2) the rights/duties of

managers; (3) activities and affairs of the LLC; and (4)

any means and conditions for amending the Operating

Agreement.

C. Pre-Formation Contract Liability

Liability of Promoter – A promoter acts on behalf of a

corp. that has not yet been formed.

A promoter is personally liable when:

1) he purports to act as or on behalf of a corp.;

AND

2) knows no corp. was formed.

A promoter remains personally liable for a pre-corp.

contract even if the corp. subsequently adopts the

contract.

− BOTH the corp. and the promotor will be liable if

adopted.

A promoter is NOT liable if:

a) there is a subsequent novation; OR

b) the contract explicitly provides that the promoter

has no personal liability.

Liability of Corporation – A corp. is NOT liable on a

contract made by a promoter UNLESS the corp.

expressly or impliedly adopts the contract post-

incorporation.

− Express Adoption = BoD action or reference in

corp.’s formation documents.

− Implied Adoption = Corp. (1) knows / has

reason to know the material terms of the

contract; AND (2) accepts some benefit of the

contract.

M

M

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