IN Bar Multistate Essay 2

Question 1

In an MEE business associations essay, a member of a member-managed LLC signs a supply contract in the LLC's name without other members' approval. When is the LLC bound?

Accepted Answer

When the contract is within the ordinary course of the LLC's business

Answer

Only if all members unanimously ratify the contract

Answer

Never, because LLC members lack agency authority

Answer

Only if the operating agreement expressly names that member as agent

Question 2

A testator's will leaves 'my car' to a nephew, but the testator sold that car and bought a new one before dying. Under the ademption doctrine tested on the MEE, what does the nephew most likely receive?

Accepted Answer

Nothing, if the jurisdiction applies traditional ademption by extinction to the specific gift

Answer

The cash value of the original car

Answer

The replacement car automatically in all jurisdictions

Answer

A share of the residuary estate equal to the car's value

Question 3

In a secured transactions essay, a bank perfects a security interest in a debtor's equipment by filing. The debtor then sells the equipment to a buyer who knows nothing of the lien. Who prevails?

Accepted Answer

The bank, because a perfected security interest generally continues in collateral after sale

Answer

The buyer, because good-faith purchasers always take free of security interests

Answer

The buyer, because filing gives no notice to individuals

Answer

The bank, but only if it repossesses within 10 days of the sale

Question 4

A conflict-of-laws MEE question asks which law governs a contract dispute where the contract has no choice-of-law clause. Under the Second Restatement approach, courts apply the law of the state with:

Accepted Answer

The most significant relationship to the transaction and the parties

Answer

The place where the lawsuit was filed, always

Answer

The domicile of the defendant, always

Answer

The place of contract performance, without exception

Question 5

In a family law essay, a premarital agreement waiving spousal maintenance is challenged. Under the Uniform Premarital Agreement Act, the agreement is unenforceable if the challenging spouse proves:

Accepted Answer

Involuntary execution, or unconscionability at signing plus inadequate financial disclosure

Answer

Only that the terms now seem unfair after changed circumstances

Answer

That the agreement was signed less than 30 days before the wedding

Answer

That no attorney reviewed the agreement, which alone voids it

Question 6

A trustee invests the entire trust corpus in a single speculative stock, which loses value. Under the Uniform Prudent Investor Act frequently tested on the MEE, the trustee most likely breached the duty of:

Accepted Answer

Prudent investing, by failing to diversify trust assets

Answer

Loyalty, by engaging in self-dealing

Answer

Impartiality, by favoring the remaindermen

Answer

Disclosure, by failing to publish annual reports

Question 7

In an agency essay, a principal secretly instructs its purchasing agent not to buy goods over $5,000, but the agent has routinely made larger purchases for the principal from a longtime vendor. The agent buys $8,000 of goods. Is the principal bound?

Accepted Answer

Yes, because the agent had apparent authority based on prior dealings the principal permitted

Answer

No, because express instructions always destroy all authority

Answer

No, because contracts over $5,000 require written authority

Answer

Yes, but only if the agent personally guarantees the purchase