UT Bar Multistate Essay 2 — Questions and Answers
Question 1: In an MEE business associations essay, a general partner of a limited partnership personally guarantees a partnership loan without informing the limited partners. Which duty analysis is most relevant?
- The duty of loyalty, because the guarantee may create a conflict of interest with the partnership (Correct answer)
- The duty of obedience, because guarantees require unanimous consent
- No duty analysis, because guarantees always benefit the partnership
- The duty of disclosure owed only to third-party creditors
Correct answer: The duty of loyalty, because the guarantee may create a conflict of interest with the partnership
A general partner's self-interested transactions implicate the fiduciary duty of loyalty, which requires full disclosure and fair dealing with the partnership.
Question 2: An MEE trusts question describes a settlor who creates a revocable trust and later becomes incapacitated. Who generally holds the power to enforce the trustee's duties during the settlor's incapacity under the UTC?
- The trustee alone, acting as a self-monitor
- The qualified beneficiaries, because the settlor cannot exercise control (Correct answer)
- The state attorney general in all cases
- No one, because revocable trusts are unenforceable until death
Correct answer: The qualified beneficiaries, because the settlor cannot exercise control
Under the UTC, while a settlor is competent the duties run to the settlor, but upon incapacity qualified beneficiaries may enforce the trustee's duties.
Question 3: A decedent's will leaves 'my car' to a nephew, but the decedent sold that car and bought a new one before death. In an MEE wills essay, what doctrine determines whether the nephew takes the new car?
- Dependent relative revocation
- Ademption by extinction, with courts examining whether a replacement rule applies (Correct answer)
- Abatement of general devises
- Incorporation by reference
Correct answer: Ademption by extinction, with courts examining whether a replacement rule applies
A specific devise that is not in the estate at death is adeemed by extinction, though many states and the UPC allow the beneficiary to take replacement property.
Question 4: In an MEE conflict of laws essay, a Utah court hears a contract dispute with no choice-of-law clause. Under the Second Restatement approach, which test governs?
- The law of the forum always applies
- The place of contracting controls exclusively
- The state with the most significant relationship to the transaction and parties (Correct answer)
- The law chosen by the defendant
Correct answer: The state with the most significant relationship to the transaction and parties
The Second Restatement applies the law of the state with the most significant relationship, weighing contacts such as place of negotiation, performance, and the parties' domicile.
Question 5: An MEE family law question involves a premarital agreement waiving spousal support, signed the night before the wedding without financial disclosure. What is the strongest argument against enforcement?
- Premarital agreements are per se void as against public policy
- The agreement was involuntary or unconscionable given the timing and lack of fair disclosure (Correct answer)
- Spousal support can never be waived by contract
- The agreement fails because it was not notarized
Correct answer: The agreement was involuntary or unconscionable given the timing and lack of fair disclosure
Courts scrutinize premarital agreements for voluntariness and unconscionability, and last-minute signing combined with no financial disclosure supports non-enforcement.
Question 6: In an MEE secured transactions essay, a creditor perfects a security interest in equipment by filing, but the debtor's name on the financing statement uses a common nickname instead of the registered legal name. What is the likely result?
- The filing is effective because any name identifying the debtor suffices
- The filing is seriously misleading and ineffective unless a standard search under the correct name would find it (Correct answer)
- The filing is effective against all creditors but not buyers
- The filing automatically lapses after 30 days
Correct answer: The filing is seriously misleading and ineffective unless a standard search under the correct name would find it
Under UCC Article 9, an incorrect debtor name makes a financing statement seriously misleading and ineffective unless a search under the debtor's correct name using standard search logic would disclose it.
Question 7: An MEE agency essay describes a principal who tells suppliers that an agent has authority, then privately revokes it. The agent later contracts with a supplier who knew of the original authority. Is the principal bound?
- No, because actual authority terminated upon revocation
- No, because agents cannot bind principals after any revocation
- Yes, under apparent authority, because the supplier reasonably relied on the principal's prior manifestation (Correct answer)
- Yes, but only if the agent is also personally liable
Correct answer: Yes, under apparent authority, because the supplier reasonably relied on the principal's prior manifestation
Apparent authority survives private revocation of actual authority until third parties who knew of the authority receive notice of its termination.
UT Bar Multistate Essay 2
In an MEE business associations essay, a general partner of a limited partnership personally guarantees a partnership loan without informing the limited partners.
Which duty analysis is most relevant?