July 1999 - Vermont Bar Examination Essay Questions - Model Answers
[Model Answer - Question I]
[Model Answer - Question II]
[Model Answer - Question III]
[Model Answer - Question IV]
[Model Answer - Question V]
[Model Answer - Question VI]
Examination Essay Questions - July 1999
MODEL ANSWER - QUESTION I - JULY 1999
(1) Discuss the validity of the eastment deed sent by Draftsman
to the Beales in September 1997.
The deed is not valid. In order for a deed to be valid, it must be:
signed by the party granting the property interest, signed by at least one
witness, acknowledged by the grantor before a notary, town clerk, judge or
other official, and recorded in the clerk's office of the town where the
property is located. 27 V.S.A. §341. Deeds must also describe the
property being conveyed and must state the consideration. Finally, deeds
must be delivered and accepted by the grantees.
There are several issues with regard to the easement deed. First, it
was executed by the lawyer acting under a power of attorney. While it is
permissible to execute a deed in this manner (27 V.S.A. §301), such deeds
are not effective unless a document granting a power of attorney is signed
by the grantor of the property, witnessed by at least one witness,
acknowledged and recorded in the office where the deed is required to be
recorded. 27 V.S.A. §305. Accordingly, unless such a power of attorney
document was executed and recorded (and there is nothing in the fact
pattern to suggest that had happened), the execution of the easement deed
by the lawyer is invalid.
Second, while the easement was properly witnessed (by both the
secretary and the paralegal - only one witness was necessary), there is a
question as to whether either of the acknowledgers of the deed was a notary
or otherwise had the statutory authority to acknowledge a deed.
Third, although the deed was delivered to the Beales, they refused to
accept it, specifically because of the extra release of liability clause
that Draftsman put into the deed. (For this reason, the release of
liability is also not valid). The fact that the deed was recorded without
the Beales' permission does not validate it.
Fourth, it does not appear that the Beales gave any consideration for
the deed. For all of these reasons, the deed is not valid.
(2) Assume that Draftsman never sent the Beales the easement
deed and never recorded it. Was the note written by
Draftsman to the Beales on October 4, 1996, an enforceable
contract to transfer an easement? Discuss.
No, the October 4th note was not an enforceable contract.
An enforceable contract for the conveyance of property must be in
writing and signed by the party against whom it is to be enforced (pursuant
to the Statute of Frauds, 12 V.S.A. §181), and it must contain a
description of the land, the purchase price and the date of closing. Here,
although the note satisfied the Statute of Frauds because it was in writing
and signed by Draftsman, it fails on the other elements.
First, while it identifies the Beales' property and vague references
to "my land, and land on which the pipes leading to the well is located,"
it does not contain a full description of the land that is being conveyed
in the easement.
Secondly, it does not describe any purchase price or other
consideration. In fact, there does not appear to be any. While one may
argue that the well water easement should be part of the original
conveyance and therefore no consideration was necessary, such does not
appear to be the case. Specifically, the Beales had already bought and
owned their house. For this reason, it would also be difficult for the
Beales to show that they acted in reliance of the October 4th note. There
is no indication of any type of fraud relating to the fact that they were
not conveyed any rights to the well in the original deed. Another possible
form of consideration may be that the Beales agreed not to sue Draftsman in
return for the promise of well rights. This, however, is not supported by
the facts presented. Thus, it does not appear that Draftsman was under any
obligation to convey the easement.
Finally, there is no firm closing date, only an unspecified time that
depends upon Draftsman's finishing his other houses. This does not appear
to comply with the requirement that the contract state the date of closing.
(3) In addition to the Beales, should the Heavenly Bank name
Draftsman, the Greedy Bank, and/or the Town of Heavenly as
defendants to its foreclosure action? Why or why not?
The bank should name the Beales as the primary defendants in the
foreclosure action because they are the mortgagors. The bank must name
them in order to foreclose their interest pursuant to the mortgage.
Heavenly Bank should not name Draftsman as a defendant because he no
longer has any interest in the property.
The bank should name the Greedy Bank as a defendant because it has a
junior lien on the property. If the Heavenly Bank fails to make Greedy
Bank a defendant, Greedy Bank's interest will remain after the foreclosure
against the Beales is complete.
Heavenly Bank should not name the town as a defendant because property
taxes are by law a superior lien to any mortgage. Accordingly, the bank
cannot foreclose the town's interest in the property taxes. Morever,
unless the Beales pay the back-due taxes, the bank or whoever acquires the
property through the foreclosure process may be liable to the town for the
(4) Assume that the Heavenly Bank names all of the appropriate
parties as defendants.
Briefly describe what steps, if any, you would recommend
that each defendant in the foreclosure action take in order
to protect its interests, were you each defendant's
As discussed in the previous answer, the only appropriate parties are
the Beales and the Greedy Bank.
Representing the Beales: I would recommend that the Beales enter a
notice of appearance in order to be served with all pleadings and other
documents in the case. Because the Bank is entitled to its attorneys fees
in foreclosure proceeding, I would not recommend any unnecessary action
that may increase the Bank's cost, since the Beales would ultimately have
to pay them.
From the facts presented in the question, the Beales do not have any
defenses against the bank, thus, there is little we could do to stop the
foreclosure itself, short of settling with the bank or having the Beales
repay the loan. Nevertheless, because it appears that the Beales have
equity in the property, I would recommend that they request the foreclosure
to proceed under a power of sale, rather than strict foreclosure, because
under a power of sale, they would be entitled to any surplus that remains
after the other parties are paid from the proceeds of a sale of the
Representing the Greedy Bank. The Greedy Bank should also enter an
appearance in order to be given an opportunity to redeem the property. It
should also file its own foreclosure action against the Beales, otherwise,
it may be in the position where it redeems the property on behalf of the
MODEL ANSWER - QUESTION II - JULY 1999
1. What, if any, immediate steps can be taken to deal with the
suspension, which the Board ordered would occur during the
[3 V.S.A. §815 states that either the agency or the reviewing court
can issue a stay pending judicial review. In this case, the reviewing court
would be the Supreme Court, because no express provision governs, id., and
therefore a request for a stay should be filed with both the Board and the
2. What are the procedures for challenging the Board's
[3 V.S.A. §815 states that the appeal in a contested case is to the
Supreme Court unless another court is expressly provided by law. An appeal
is commenced by filing a notice of appeal with the Board, per V.R.A.P. 13.]
3. What, if any, issues can Sam raise, and what are his chances
Procedural irregularities: ten days notice is probably sufficient
under the statute requiring reasonable notice. However, the notice does not
appear to have included a reference to the regulation allegedly violated.
Exclusion of Fred violated the Open Meeting Law, and an argument could be
made per 1 V.S.A. §312(a) that the ruling is void. Also – hearsay is
permitted if of the sort reasonably relied upon but the hearsay used in
this case may not be of that sort.
New evidence: §815(b) states that before the date set for the court
hearing, can make an application for leave to present additional evidence,
and if the court finds the evidence is material and there were good reasons
to fail to present it in proceedings before the agency, the court may order
that additional evidence be taken before the agency, and the agency may
modify its findings and decision.
Validity of rule: The failure to file the final rule with the
Secretary of State is fatal to the operation of the rule. The amendment
after the hearing, since it did not cause the published summary to become
misleading or inadequate, is not. 3 V.S.A. §846.
MODEL ANSWER - QUESTION III - JULY 1999
1. In evaluating Adam's activities in this matter it is necessary to
separate the potential claims against Adam for his alleged conduct against
Bambi from the allegedly wrongful conduct against Eve.
The aggravated sexual assault statute, 13 V.S.A. § 3253 should be the
initial area of inquiry regarding Adam's contact with Bambi. This statute
makes it illegal for any person to perform a sexual assault with the threat
to cause imminent bodily injury, 13 V.S.A. § 3253(a)(6), or the actor
performs repeated nonconsensual sexual acts as part of the same occurrence
or as a part of the perpetrator's common scheme or plan. 13 V.S.A. §
3253(a)(9). The age provision of this Act is inapplicable as Bambi is ten
years old and the statute requires that the victim be under ten. 13 V.S.A.
Defenses to this claim would involve proof that Adam had sexual
contact with Bambi or that it was performed under threat of force, or as
part of any common plan or scheme. The defenses would be primarily fact
based but could involve defenses as to what constitutes a common plan or
scheme, or what constitutes a threat to cause harm.
A more likely alternative would be 13 V.S.A. § 3252. This statute
deals with Sexual Assault without aggravating circumstances. However, this
statute forbids sexual acts with a person under 16. 13 V.S.A. §
3252(a)(3). Here, no compulsion need be shown, nor does the issue of
Defense to this claim would involve the issue of the performance of a
"sexual act" between Adam and Bambi. A "sexual act" under the statute is
defined as "conduct between persons consisting of contact between the penis
and the vulva, the penis and the anus, the mouth and the penis, the mouth
and the vulva, or any intrusion, however slight, by any part of a person's
body or any object into the genital or anal opening of another." 13 V.S.A.
§ 3251(1). The defense to this claim would be factual as to the nature of
the alleged occurrence.
Another claim would be lewd or lascivious conduct with a child. 13
V.S.A. § 2602. This act forbids: "A person who shall willfully and lewdly
commit any lewd or lascivious act upon or with the body, any part or member
thereof, of a child under the age of sixteen years, with the intent of
arousing, appealing to or gratifying the lust passions or sexual desires of
such person or such child..." Here, sexual assault need not be proven.
Defenses to this claim would again focus on what allegedly occurred
between Adam and Bambi. Legal defenses could also arise as to the nature
of the "arousing, appealing to or gratifying the...sexual desires" of Adam.
Also, a potential claim for mental deficiency might be raised to avoid the
intent requirement of the statute.
Finally, a claim may be advanced of conspiracy pursuant to 13 V.S.A. §
1404. The conspiracy might involve claims of sexual assault, aggravated
sexual assault or lewd and lascivious conduct between Adam and Bambi with
the aid or assistance of David and/or Eve. However, conspiracy charges are
only available, based upon the facts of this case for sexual exploitation
of children pursuant to 13 V.S.A. § 2822 or § 2824. The conspiracy would
require an overt act by Adam or David on Bambi.
Defenses to the conspiracy claim would again focus on the alleged
conduct between Adam and Bambi but would also include conduct between Bambi
and David or even Bambi and Eve. Furthermore, the legal defenses to
conspiracy include renunciation of the crime, notice to law enforcement or
conduct designed to prevent the crime.
As to Adam's potential crimes with Eve, these are much more limited.
Eve is now seventeen so neither 13 V.S.A. § 3253(a)(3) nor 13 V.S.A. §
3253(a)(8) would apply. Furthermore, given Eve's statements of her
feelings towards Adam, consent would be an issue in any claim for sexual
assault or aggravated sexual assault. Furthermore, the conspiracy charges
would be unlikely to apply as both 13 V.S.A. § 2822 and § 2824 require that
the victim be under the age of 16. 13 V.S.A. § 2821(1). Therefore, it is
unlikely that any criminal charges would succeed regarding Adam's conduct
2. The claims against David relative to his conduct with Bambi would
be similar as those outlined above against Adam relating to sexual assault,
aggravated sexual assault and conspiracy. However, as Bambi's father,
David could be exposed to increased punishment pursuant to 13 V.S.A. §
3252(b). Similarly 13 V.S.A. § 3252(a)(4) would apply as David is Bambi's
father. Furthermore, if sexual acts occurred between David and Bambi
before Bambi turned 10, the aggravated sexual assault provision, 13 V.S.A.
§ 3253(a)(8), would apply.
The defenses outlined above for Adam's claims would also apply here to
David's actions, except where the claims involve only sexual acts with a
child under 16 with a familial relationship in which case only the sex act,
Bambi's age and the familial relationship need be proven.
In addition, David may be exposed to criminal sanctions for Sexual
Exploitation of Children pursuant to 13 V.S.A. § 2821 et seq. This issue
involves the videotape provided by Paula showing sexual contact between Eve
and Bambi. In order to prove Sexual Exploitation of Children, one needs to
show that the defendant "promote(d) a sexual performance by a child...or
induce(d) a child to engage in such a performance." The "child" must be
under the age of 16 at the time of the performance. Performance includes
videotape recordings of "sexual conduct" including the contact between
Eve's mouth and Bambi's vulva. 13 V.S.A. § 2821(2)(A).
Defenses to this claim include whether David directed the sexual
conduct or was it spontaneous conduct on Eve's behalf. Was there any
promotion or distribution of the videotape. 13 V.S.A. § 2821(5)? Was
there some allegedly legitimate reason for the production of the videotape?
13 V.S.A. § 2824(b). Most importantly, however, is the statute of
limitations defense which forecloses prosecutions of these actions more
than six years after their occurrence. 13 V.S.A. § 4501(b).
David can be prosecuted for incest pursuant to 13 V.S.A. § 205 for
sexual conduct between himself and either Bambi or Eve. All that need be
proven is "fornification" and the familial relationship.
David's conduct with Eve is fraught with the same issues as raised
with Adam. The fact that David is Eve's father does not alter the defenses
available to David as Eve is over 16 years of age at the time of the
current activities. If any conduct could be proven within the last six
years, but before Eve turned sixteen, then those claims could be addressed.
Again, given Eve's statements as to her feelings towards David, any
prosecutions here may be difficult.
3. There exist multiple protections the State can utilize to prevent
Bambi from being further traumatized by her testimony in any criminal
prosecutions in this matter.
Bambi's statements to her mother would be admissible in any
prosecution of either David or Adam pursuant to V.R.E. 804a. This rule
requires that the statements of a victim of a sexual assault, aggravated
sexual assault, lewd and lascivious conduct, incest, or "wrongful sexual
activity", to another person be admissible hearsay. The issues would
involve whether Bambi's clutching her pubic area constitutes a "statement".
Another issue may be that the evidence may not be admissible in the sexual
exploitation charge if one is brought, as that criminal activity is not
specifically listed in the charges in which this exception to the hearsay
rule is allowed. If VRE 804a were to be utilized, then notice of the
hearsay statements to be utilized would need to be given to the Defendants
pursuant to V.R.Cr.P. 26. VRE804a also requires that the victim be
available to testify pursuant to VRE 807. Rule 807 allows for videotaped
or closed circuit TV testimony at trial. This method is also available for
the charges of sexual assault, aggravated sexual asssault, lewd and
lascivious conduct, or incest. Finally, a guardian ad litum may be
appointed for Bambi to represent her interests in these matters. This
guardian ad litum could not be her mother.
MODEL ANSWER - QUESTION IV - JULY 1999
All property owned by either and both parties in a divorce case,
however and whenever acquired, is subject to equitable division by the
family court. 15 V.S.A. § 751. When making an equitable division, the
court considers the 12 factors identified in § 751(b). Some criteria favor
Alice, while others favor Bill. Alice will emphasize the following: Bill's
vocational skills are superior to hers; she will have custody of Charles
and therefore the court should award her the home or the right to live
there for a reasonable time; and her contribution as homemaker to the
family. Bill's strong points are the short duration of the marriage;
neither made any contribution to the education, training or increased
earning power of the other; each has more or less equal opportunity for
future acquisition of capital assets and income; essentially all of their
substantial property was acquired through Bill's pre-nuptial wealth; Alice
will not be saddled with any debts; and that the "respective merits of the
parties" weighs very heavily in Bill's favor. The court will examine all
of the assets owned by both of the parties, separately and jointly, and
balancing the 12 criteria might award the home to Bill, order the Jaguar
sold with the proceeds divided between them so that each can afford a new
car, and divide the remaining personal property according to each party's
needs. The Court probably will not award Alice any part of Bill's
inheritance. The short duration of the marriage and Alice's egregious
fault in causing the separation will be the primary reasons for the family
Maintenance is awarded pursuant to 15 V.S.A. § 752. Alice satisfies
the threshold criteria for a maintenance award because she (i) lacks
sufficient income and property to provide for her reasonable needs and (ii)
is Charles' custodian. When awarding maintenance, the family court
considers the 7 criteria in § 752(b). Alice will emphasize that she and
Bill enjoyed a high standard of living during the marriage. Bill will
point out that Alice has made a new household with David, which weighs
against or diminishes her demand for maintenance because of David's
presumed earning capacity which is a financial resource available to Alice.
Alice and Bill did establish a fairly high standard of living during the
marriage, but Bill will argue that the marriage was very short in duration
and the standard was artificially high because it was based on Bill's
inheritance, not on his earnings. The family court may reasonably require
Bill to pay modest maintenance to Alice for a relatively short period of
time to enable Alice to obtain additional skills to improve her employment
When Bill adopted Charles, he became Charles' father. Bill owes an
unavoidable duty to support his son. Tactically, Bill would be well
advised not to weaken his arguments against a property settlement and
maintenance by attempting to avoid his clear obligation for Charles'
support under the child support guidelines.
For a case involving somewhat similar facts, see Allen v. Allen, 132
Vt. 182 (1974).
Alice's move clearly violates the family court order and is a contempt
of court. Even if the requirement that she give notice before moving out
of state might arguably be invalid, see Pearson v. Pearson, 726 A.2d 71,
Vt. (1999), this is an unappealed order and any intentional violation
is a contempt. This move substantially disrupts Bill's and Charles' rights
to have parent-child contact, and constitutes a real, substantial and
unanticipated change in circumstance providing jurisdiction to the family
court to entertain a motion to modify its original decree. Bill might
argue that he should be awarded sole parental rights and responsibilities
over Charles, in which case Alice will become liable to pay child support
under the guidelines. Alice has shown by her actions that she lacks the
ability to foster a close relationship between Bill and Charles, an
important criterion under 15 V.S.A. § 665(b). Alternatively, Bill might
ask the court to allow a different parent-child contact schedule that is
realistic given the great distance between Bill's and Charles' home. The
threshold for showing changed circumstances is lower when a party seeks
modification of parent-child contact orders than in custody cases, and Bill
has a strong argument here. The Vermont Family Court retains jurisdiction,
to the exclusion of the Minnesota court if it has adopted the Uniform Child
Custody Jurisdiction Act, because Vermont is Charles' "home state" where he
lived for at least six consecutive months preceding the move. The Federal
Kidnaping Act does not apply because Alice was the custodial parent at the
time of the move. Bill is Charles' father and his duty to support Charles
is uncontestable. Again, tactically, he would be well advised to concede
On the facts as presented, Alice has no defense to a contempt
proceeding. She should argue that even if she is in contempt, she remains
the more suitable custodial parent, that the only issue in a proceeding
involving parental rights and responsibilities is whatever is in the best
interests of the child, and that no change should be made to the order in
respect of parental rights and responsibilities. On these facts, again,
Alice will be hard pressed to prevent a change in the parent-child contact
provisions of the order if Bill seeks a modification with respect to them.
The court will find Alice in contempt and may impose an appropriate
penalty. When deciding whether parental rights and responsibilities should
be modified the court will not give much consideration to the fact of the
contempt; it will consider what it believes is in Charles' best interests.
Absent any troubling facts, the court probably will not change the
custodial arrangement. The court will restructure parent-child contact to
provide Bill and Charles reasonable visitation. For example, the family
court might order that Charles spend a portion of or perhaps the entire
summer with Bill, and one of the long winter vacations such as Christmas-
New Year or February school vacation. The court might also order Alice to
pay all of the costs of transporting Charles to and from Minnesota because
she created this added expense when she moved in violation of the order.
The family court might also order Alice to pay Bill's attorney fees.
MODEL ANSWER - QUESTION V - JULY 1999
1a) Potential Claims.
Rich may sue John for negligence. John owed a duty of care to Rich
which he breached. If Rich can demonstrate that John's negligence
proximately caused his injuries, he may be entitled to damages from John.
Rich should also consider bringing a negligence claim against the
driver who stopped on the traveled portion of the road, depending on what
facts are developed.
In addition, Rich might consider a "dram shop" claim against the
second convenience store which sold John beer since he may well be able to
demonstrate that he was injured as a result of John's intoxication, and
that the convenience store sold John intoxicating liquor when John was
apparently under the influence of intoxicating liquor. 7 V.S.A. § 501(a).
However, because the statute of limitations for such claims is two years,
Rich's potential dram shop claim would be foreclosed. 7 V.S.A. § 501(d).
Keith's injuries would give rise to a negligence-based claim. The
executor or administrator of Keith's estate may bring a survival action
against John and/or the other driver on behalf of the estate to recover for
damages, including pain and suffering, lost wages, and medical bills
incurred by Keith prior to his death. 14 V.S.A. § 1453.
Keith's potential dram shop claim, like Rich's, would be foreclosed by
the two-year statute of limitations. Similarly, any wrongful death action
is barred by the two year statute of limitations. 14 V.S.A. § 1492(a).
1b) Choice of Forum.
Rich and Keith's estate and/or personal representative (collectively
"the plaintiffs") could sue John in state court in Vermont, and venue would
lie in Chittenden Superior Court. See 12 V.S.A. § 402. The plaintiffs
could also sue John in the appropriate Massachusetts state court.
Because John is a Massachusetts resident, and assuming that the
damages in issue would exceed $75,000, the plaintiffs could also sue John
in the United States District Court in either Vermont or Massachusetts. 28
U.S.C. § 1332.
Likewise, if the plaintiffs chose to sue only the other driver, the
plaintiffs could sue in Vermont state court, in federal district court if
and only if the other driver resided outside of Vermont, and in the state
of residence of the other driver if different from Vermont.
If the plaintiffs sued both John and the other driver in the same
action, and the other driver was a Vermont residence, then the plaintiffs
would not be able to sue in federal court due to a lack of complete
diversity of citizenship. In that case, the plaintiffs would be limited to
suing both parties together in the Vermont Superior Court.
If the plaintiffs sued both John and the other driver, and the other
driver was not a Vermont resident, then the plaintiffs could sue in Vermont
state court or in the federal district court in Vermont. (If the other
driver happened to be from Massachusetts, the plaintiffs could also sue in
Massachusetts state or federal court.)
2a) John's Defenses.
On John's behalf, I would argue that the plaintiffs assumed the risk
of their injuries by entering and riding in a car driven by John at a time
when he appeared to be inebriated. I would argue that Keith and Rich were
comparatively negligent for the same reasons.
Moreover, one could argue that even if John was negligent, his
negligence did not proximately cause the plaintiffs' injuries, and that
even if John had driven with reasonable care, he would have hit the car
stopped in the traveled lane. The other driver's negligence was actually
the sole cause of the plaintiffs' injuries.
If the plaintiffs brought wrongful death or dram shop claims, I would
raise the statute of limitations as an affirmative defense on the bases
If the plaintiffs sued in the wrong court-such as federal district
court in the absence of complete diversity-I would raise the lack of
jurisdiction as a defense as well.
Finally, if Rich attempted to bring a survival or wrongful death
action on Keith's behalf, I would plead his failure to bring the action in
the name of the personal representative as a defense.
I would raise the affirmative defenses (e.g.- statute of limitations,
comparative negligence, etc.) in the answer to the complaint. Other
defenses could be raised by motion.
2b) Claim Against Other Driver.
In Vermont there is no right to contribution among joint tortfeasors
and therefore if the plaintiffs have sued only John, John does not have the
right to add as a party the person responsible for the vehicle stopped on
the road. See Howard v. Spafford, 132 Vt. 434 (1974).
If the plaintiffs sued John in state court, then John could seek to
remove the action to the federal district court in the district and
division embracing that state court pursuant to 28 U.S.C. § 1441. Notice
of removal must be filed with the appropriate federal court within thirty
days after John's receipt of the initial pleading in the case. 28 U.S.C. §
MODEL ANSWER - QUESTION VI - JULY 1999
1. To answer the question, it is necessary to define the status of
each party making or defending a claim.
Sam is a merchant with respect to the baler, even though he did not
stock them and had never sold one. As a general farm equipment dealer,
he held himself out to have knowledge of them when Ben asked about them
and he offered to obtain one to sell to ben.
Ben is a buyer, and apparently a partner with Bobby, but is not a
drawer on the check.
Bobby is also a buyer, apparently a partner with Ben, and the
drawer on the check.
John Elk Co. is a holder in due course of the check drawn on Barnboard
and Sons, which they accepted from Sam in partial payment of his debt
to them. Under UCC §3-302, the check is not obviously a forgery or
alteration, nor is it so irregular or incomplete to call into question
its authenticity. Elk took it i)for value [Sam's debt]; ii)in good
faith; iii)without notice that it was dishonored; and iv)without notice
that any party has a defense described in §3-305(a).
The check given by Bobby on the Barnboard and Sons account was a
negotiable instrument. It was an unconditional order to pay a fixed
amount of money, that was i)payable to "order" at the time it came into
possession of the holder; ii)was payable on demand; iii)did not state any
other undertaking or instruction by Bobby to do any act in addition to the
payment of money.
Elk's claim against Sam for money owed still exists. Since the
check from Ben and/or Bobby did not clear, no credit is due Sam from
Elk. The check was taken subject to collection and under UCC §3-310,
the obligation is not discharged until the check is honored.
We have to assume that Sam endorsed the check when he "gave" it to
Mary Madegood to apply to his account with Elk. As an endorser, he is
also liable for the check to Elk under UCC §3-415.
Elk is a holder in due course against Ben as defined above. As such,
Elk has all the rights to proceed against Ben to collect the check.
Sam's defense is that Elk accepted the check without
restriction by depositing the check. Under UCC §3-310, the
uncertified check only suspended the obligation to pay until the check is
honored and paid by the bank.
Ben's defense is that he may raise the same defenses against Elk as
he could against Sam under UCC §3-305(a). However, under UCC §3-305(b),
Ben cannot raise a defense against Elk for enforcement of a right
to payment under a contract, but only defenses based on i)infancy;
ii)duress, lack of legal capacity or illegality of the transaction;
iii)fraud; or iv)discharge of obligor in insolvency proceedings. In
casual terms, only "real" defenses could be raised, and not "personal"
2. Sam has a claim for breach of contract. He sold Ben the
baler and Ben agreed to pay. Sam can sue Ben in contract.
Bobby, who is a partner in Barnboard and Sons, is liable to Sam as
the drawer of the check, which is a negotiable instrument. There is no
indication that Barnboard and Sons was a corporation or that Bobby was
signing merely as an authorized signer of the check. The check was not
conditional. As a holder of the check, Sam is entitled to enforce payment.
Under UCC §2-710, Sam is also entitled to all incidental damages
he suffers as a result of Ben's breach.
One of Ben's defenses is that there is a failure to comply with the
Statute of Frauds, UCC §2-201. However, although the Bill of Sale may not
meet the requirements of §2-201(1), Bobby, on behalf of Barnboard and Sons,
made payment, which was accepted, making the contract enforceable.
Ben will also raise various breaches by Sam as defenses. The
contract has been breached since the baler did not work. It was sold as
an "automatic" baler, which is an express warranty. The automatic feature
did not work. Sam also expressly told Ben it was in good condition and
had the auto baler feature. While "good condition" may be just sales
talk, the auto baler was expressly guaranteed to be present; its
apparent failure violated the express warranty.
There is also an implied warranty of fitness for a
particular purpose since Sam knew of the special feature that Ben wanted
and that Ben relied on Sam to find a baler with that feature. Since
that specific feature failed, the "particular purpose" of the machine
failed and that warranty was breached.
Since Sam is a merchant, the implied warranty of
merchantability was also breached. The machine did not perform at even
the basic level of a non-automatic baler if the snagging that occurred
was severe enough to interfere with the general operation of the machine.
Bobby's defenses against Sam, as the drawer of the check, are a
failure of consideration. That is, the baler, which did not work, was
not worth what he paid for it. As a partner in Barnboard and Sons, he
also had the same defenses regarding breach of contract that Ben raised.
Bobby has the additional defense that he was only an
authorized signer on the check, that the baler was actually sold to
Barnboard and Sons according to the bill of sale, and that it was Ben who
actually stopped payment on the check, not Bobby.
3. Ben has a claim against Sam for his breach of the contract. He
may cancel the sale by revoking his acceptance, or Bobby's acceptance on
behalf of Barnboard and Sons. Since his revocation came a day after he
and Bobby took delivery of the baler, it appears to be within a
reasonable time period. He may recover as damages the loss resulting in
the ordinary course of events from Sam's breach as determined in a manner
which is reasonable. UCC §2-714.
Incidental damages can be recovered for expenses of
inspection, receipt, transportation and other reasonable expenses incident
to the breach. UCC §2-715.
Consequential damages can be recovered for any loss resulting
from the general or particular requirements and needs of which Sam had
reason to know. UCC §2-715.
Ben's actual damages appear to be minimal, since he still had his
old baler and did not have to buy, rent or lease another machine, nor did
he lose much time in switching over to the old machine, causing him to
lose any of his hay crop.
However, since Ben and Bobby are liable to Elk on the check, their
consequential damages will be significant and Sam will be liable to them
for the amount of the check or the amount that they are required to pay
to Elk as a holder in due course.
Sam's defenses are that Ben and Bobby accepted the baler after a
reasonable opportunity to inspect the baler and that they signified to Sam
that the baler was conforming to their needs by taking delivery of the
baler. UCC §2-606.
He is also going to claim that he was not a merchant, as to the
baler, although he did sell farm equipment. That claim should fail,
as he generally dealt in farm machinery and took on the obligation of
finding the specific baler for Ben and selling it to him in the regular
course of his business.
Under UCC §2-508, Sam has a legitimate argument that he was not
given the opportunity to cure, before Ben revoked his acceptance.
Board of Bar Examiners
Mailing address: 109 State St.
Montpelier VT 05609-0702
Office Location: 111 State St.