QUESTION I - JULY 2005
PLEASE NOTE: QUESTION I was a "Multistate Performance Test" (MPT) and is not reproduced here. For additional information see: http://www.ncbex.org/.
QUESTION II - JULY 2005
PLEASE NOTE: QUESTION II was a "Multistate Performance Test" (MPT) and is not reproduced here. For additional information see: http://www.ncbex.org/.
QUESTION III - JULY 2005
Sam was the only son of Frank, a wealthy widower. As a teenager and young man, Sam abused drugs and alcohol and was generally a lazy lout unwilling to take responsibility for anything or anyone other than himself. Almost twelve years ago, when Sam turned eighteen, and after a particularly difficult year in the relationship between Sam and Frank. Frank wrote his will which created a testamentary trust for Sam. The trust included the following relevant clause:
While I dearly love my only child, Sam, he has given me much heartbreak. I truly believe that the only way he will ever improve is by becoming a father like me. Therefore, I hereby create a trust of all of my assets at the time of my death for the benefit of Sam. The income of this trust shall be payable to Sam for his support until he attains the age of thirty. If on his thirtieth birthday he shall have sired a child and he shall be the custodial parent of that child, then the trust shall cease to exist and all of the assets of the trust shall be payable to Sam in full to do with as he deems best for the support of himself and his child or children. If, however, on attaining his thirtieth birthday Sam has not sired a child or, having sired a child, he has lost custody of that child, then the entire trust shall be paid to the Save the Children Fund to support its charitable work and Sam shall be left with none of my estate.
When Sam turned twenty-one, he had a rousing party which resulted in his going into an alcohol and drug-induced coma for a week. Sam recovered from that event, but during the extensive medical treatment in the recovery process, Sam learned that he was sterile and would never be able to sire any children.
Sam never married or entered into any long term commitments with anyone, but he did want to start a family. So, at age twenty-five, Sam adopted a young child, Alexandra. Adopting Alexandra was the best thing Sam ever did. It showed him the true worth of living is not satisfying himself, but rather caring for others. Since adopting Alexandra, Sam has finally stopped the use of all drugs and alcohol. Sam also finally became employed full-time by a charity assisting troubled youths.While aware of the provisions in the trust, out of embarrassment Sam never informed Frank of his inability to have children. However, Frank approved of and truly loved Sam's adopted daughter, Alexandra. Unfortunately, Frank died shortly after Sam's twenty-seventh birthday without ever making any changes to his will or the testamentary trust which he had set up for Sam's benefit. The will was allowed and the trust established pursuant to the will. Since then, the trust has been paying for the support of Sam and Alexandra pursuant to the terms of the trust. Substantial assets remain in the trust at this time.
Sam's thirtieth birthday arrives in a few months. Sam recently contacted the trustee of the trust to discuss the procedure for transferring the assets of the trust into Sam's name when he turns thirty. Sam was shocked to learn that the trustee intends to pay out the assets of the trust to the Save the Children Fund on Sam's thirtieth birthday since Sam has not met the requirements of the Trust; namely, even though Sam is an excellent father to his adopted daughter Alexandra, Sam has not sired a child of his own.
Sam comes to you with the following questions:
1. Sam has heard of the doctrine of cy pres. Explain to him whether this legal doctrine can be used to allow him to get the assets of the trust upon reaching thirty.
2. Explain to Sam generally whether conditions precedent resulting in the potential forfeiture of the assets of a trust can be enforceable in a testamentary trust.
3. Explain to Sam what arguments you would make in support of his claim for the assets of the trust.
QUESTION IV - JULY 2005
In 2000, Lucky the Lawyer represented Sandy Slumlord in his purchase of a multi-family residential rental property located at 100 Main Street in the Town of Newton, Vermont, in connection with the acquisition, financing, permitting, and renovation of the property, and in preparing a pro forma lease agreement for use by Sandy. Lucky was paid for this work and no longer has any active files with Sandy.
By early 2002, there was not much demand for residential rental units in the Newton area, vacancy rates were high, and there was competition for tenants in the housing market. Nevertheless, Lucky was contacted by Danny Debtor, another real estate investor, who wanted to purchase a different multi-family property located at 201 Main Street, within a block of Sandy's. Having heard of his involvement with the 100 Main Street property, Danny wanted to retain Lucky for legal advice and representation in obtaining his new property. Danny informed him that he was operating on a thin margin, was leveraging his purchase price to a great degree, and would have little cash left in order to pay Lucky. Danny suggested that Lucky take an ownership interest in 201 Main Street in lieu of fees. Lucky was hesitant to represent Danny and was unsure whether he should accept compensation in the manner proposed.
In connection with his purchase, Danny Debtor obtained part of his purchase price for the 201 Main Street tenement house by means of a first, purchase-money mortgage granted by the Ethan Allen Bank of Newton ("the Bank"). By 2003, the vacancy rate was high and Danny's project had already failed. The Bank filed a foreclosure action in the Adams County, Vermont, Superior Court on March 1, 2003 and recorded a copy of the foreclosure complaint in the Newton land records. The Superior Court issued a judgment order and decree of foreclosure in favor of the Bank, which the Bank duly recorded in the land records on June 1, 2003, with the right of redemption due to expire on December 1, 2003.
On November 25, 2003, Danny filed for protection under the federal bankruptcy code. The bankruptcy trustee sought to avoid the mortgage, because (as all parties to the action agreed), the acknowledgment on the mortgage deed from Danny to the Bank was defective. The trustee argued that a mortgage with a defective acknowledgment is totally invalid; that, therefore, the mortgage would not bind a subsequent purchaser of the property; and as a result the property should be added to the bankruptcy estate. The Bank's counsel argued that the filing of the foreclosure complaint gave subsequent purchasers constructive notice of the mortgage, in effect curing the defect and preventing the trustee from avoiding the mortgage.
QUESTION V - JULY 2005
Last year, Gail Gullible quit her job to pursue her dream of starting a small business as a sole proprietor. Using her own hard-earned savings, Gail found a location for her enterprise, purchased the equipment she needed, hired two employees, and opened shop under the name, “Gullies.”
Gail quickly became overwhelmed by the billing and record-keeping aspects of her new business. As a result, she hired ConsultCo, a consulting firm run by husband and wife Charley and Sheila Shifty, to recommend and install business systems for her.
Sheila recommended ConsultCo’s own business software, BusPro, as a full-service program. She promised it would be effective and user-friendly. Sheila also promised that Charley would train Gail on the system, occasionally trouble-shoot the system, and provide technical support. These promises were oral only; no agreement was ever reduced to writing. For all of this, ConsultCo charged Gail $25,000.
After BusPro was installed and ConsultCo’s bill was paid, the software stopped functioning. Not only that, Gail’s entire computer system failed. Gail repeatedly called ConsultCo, but she was never able to reach anyone. Her attempts to reach the Shiftys at their home were similarly unsuccessful.
Desperate, she contacted another computer support company. Its technical specialists concluded that BusPro had infected Gail’s system with a serious computer virus. They were able to restore the system at a cost of several thousand dollars. Gail also had to purchase and install new business software at a significant cost.
The BusPro failure was a serious blow to Gail’s new business, both financially and as a drain on her time. As a result, her business failed to pay the two employees their wages during the entire month they worked before they were laid off.
You represent Gail and her business. Upon learning of her situation, you file suit against ConsultCo, Charley Shifty, and Sheila Shifty, asserting claims for breach of contract, breach of warranty and consumer fraud.
Discovery in the case reveals the following facts:
QUESTION VI - JULY 2005
Sam Seller is a certified public accountant whose hobby is cooking. He likes to spend his Friday evenings preparing a batch of tamales, then selling them at the farmers' market on Saturday. Bob Buyer tries one of the tamales and likes it, and asks Sam if he would like to prepare some dishes for the annual banquet of the Vermont Vegan Society the following Friday. The theme for this year is China, so Bob asks Sam if he would prepare 400 spring rolls. Sam agrees, and says that he could do it for $2.00 per spring roll. As a reminder to himself, he writes on a brown paper bag, "400 spring rolls @ $2.00, Vermont Vegan Society, Friday, August 19." He asks Bob to write his name and phone number underneath, which Bob does.
On Friday evening, Sam appears at the banquet hall with the spring rolls. Bob tries one out, and discovers to his horror that it contains shrimp. Sam tells him, "Of course it has shrimp. Everyone knows that spring rolls contain shrimp!" Bob refuses to take the spring rolls, pointing out what he considers to be obvious -- that vegans don't eat seafood, and he refuses to pay Sam. He calls a local restaurant, and learns that an order of 400 spring rolls, to be delivered within an hour, will cost him $3.00 per spring roll. He makes the order, and pays the extra cost. Upon learning how much over budget the banquet has gone, the Board of Directors of the Vegan Society removes Bob as president, much to his embarrassment. In the meantime, Sam tries to sell the spring rolls at the farmers' market the next morning, but because they are not fresh, he has to sell them for only $1.00 each.
Sam sues Bob for $400, the amount of money that he lost as a result of Bob's refusal to accept the spring rolls. Bob counter claims for $400, the amount of money that he had to spend as a result of Sam's providing spring rolls with shrimp. He also sues for his lost wages as president of the Vermont Vegan Society.
For each question, please state the applicable rule and its source, and apply the rule to the facts to determine the answer.
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