A climber signed a release before joining a guided rock-climbing trip. The release stated that climbing is dangerous and that participants assume ordinary risks of falling rocks and weather. During the trip, Guide ignore...
Citations: Restatement negligence defenses principles
A creditor seeks alter-ego liability against the sole member of an LLC. The creditor's only evidence is that the LLC never held annual member meetings. The operating agreement does not require meetings. Which statement i...
Citations: Model Business Corporation Act and common-law veil-piercing principles, Revised Uniform Limited Liability Company Act and common-law alter-ego principles
A judgment creditor of a LLC member obtains a charging order against the member's LLC interest. Which statement best describes the creditor's rights? This question tests the charging-order remedy against an LLC interest...
Citations: Revised Uniform Limited Liability Company Act secs. 201, 203, 401, 407, 409, 502, 503, 601, 701
A limited liability company has members who are citizens of States A, B, and C. The LLC was organized in State D and has its headquarters in State E. What is the LLC's citizenship for diversity purposes? The correct answ...
Citations: Carden v. Arkoma Associates, Section 1332 diversity principles
A limited liability company has members who are citizens of States A, B, and C. The LLC was organized in State D and has its headquarters in State E. What is the LLC's citizenship for diversity purposes? The correct answ...
Citations: Carden v. Arkoma Associates, Section 1332 diversity principles
An LLC fails to pay a vendor. The vendor sues the LLC's sole member, alleging only that the member owned and managed the LLC. The member also personally guaranteed a separate bank loan. Which statement best describes per...
Citations: Revised Uniform Limited Liability Company Act secs. 201, 203, 401, 407, 409, 502, 503, 601, 701
...er-managed. The manager signs leases and selects vendors. A passive member owns 10 percent but has no management role. Which statement best describes fiduciary-duty allocation? This question tests who owes fiduciary duti...
Citations: Model Business Corporation Act secs. 8.30-8.32 and 8.60-8.63, Revised Uniform Partnership Act sec. 404, Revised Uniform Limited Liability Company Act secs. 105 and 409
A buyer calls the seller's listed business number. A person answers, "Seller Auto Parts," discusses the buyer's pending order, gives the correct invoice number, and promises shipment. At trial, the buyer offers testimony...
Citations: Federal Rule of Evidence 901(b)(6)
A city council member voted against a developer. The next day, Blogger posted, "Council Member took a $20,000 bribe from the developer last month," citing an anonymous source. Blogger had received court records showing t...
Citations: Restatement defamation principles
A developer hired a framing subcontractor for a hotel project. The lumber supplier refused to extend more credit to the subcontractor unless someone guaranteed payment. The developer orally told the supplier, "Ship the l...
Citations: Restatement (Second) of Contracts sections 110, 112, 116
A developer hired a framing subcontractor for a hotel project. The lumber supplier refused to extend more credit to the subcontractor unless someone guaranteed payment. The developer orally told the supplier, "Ship the l...
Citations: Restatement (Second) of Contracts sections 110, 112, 116
A dissolved LLC distributes most of its cash to members after receiving written notice of a substantial pending equipment-defect claim. What is the best analysis? This question tests LLC winding up and distributions when...
Citations: Model Business Corporation Act secs. 11.01-11.07, 12.02, 13.01-13.31, 14.01-14.32, Revised Uniform Limited Liability Company Act secs. 701-707
A gang member pointed a loaded gun at Lena and said, "Drive this van through the locked warehouse gate now, or I will shoot you." Lena believed the threat was real and immediate. She drove through the gate, damaging it...
Citations: NCBE MBE Subject Matter Outline, Criminal Law and Procedure defenses, Common law and Model Penal Code duress and necessity principles
...delivered a general warranty deed while a valid mortgage already encumbered the property. The grantee discovered the mortgage one month later. When was the covenant against encumbrances breached? A present covenant is b...
Citations: Common-law conveyancing doctrine
...acturer agreed to sell a distributor 20,000 custom bottles for a September product launch. In July, the manufacturer missed two status calls, its plant was reported closed for a week, and a shipping manager emailed, "We...
Citations: Restatement (Second) of Contracts sections 250, 251, 256, UCC sections 2-609, 2-610, 2-611
...acturer agreed to sell a distributor 20,000 custom bottles for a September product launch. In July, the manufacturer missed two status calls, its plant was reported closed for a week, and a shipping manager emailed, "We...
Citations: Restatement (Second) of Contracts sections 250, 251, 256, UCC sections 2-609, 2-610, 2-611
A member of a member-managed LLC spends extra hours negotiating customer contracts. The operating agreement is silent about salary or service compensation. Which statement best describes the default rule? This question t...
Citations: Revised Uniform Limited Liability Company Act secs. 201, 203, 401, 407, 409, 502, 503, 601, 701
A member of an LLC sells her "entire LLC interest" to a buyer. The operating agreement is silent, and the other members do not admit the buyer as a member. What does the buyer generally receive? This question tests trans...
Citations: Revised Uniform Limited Liability Company Act secs. 201, 203, 401, 407, 409, 502, 503, 601, 701
A member of an LLC sends the other members a signed notice stating, "I withdraw from the company effective today." The LLC has other members and continues operating. Which statement best describes the likely effect? This...
Citations: Revised Uniform Limited Liability Company Act secs. 201, 203, 401, 407, 409, 502, 503, 601, 701
A member of Congress reads subpoenaed documents into the record during a committee hearing, then gives the same documents to a campaign consultant who posts them with campaign commentary. The target of the documents sues...
Citations: U.S. Const. art. I, sec. 6, cl. 1, Gravel v. United States, United States v. Brewster
A member of Congress reads subpoenaed documents into the record during a committee hearing, then gives the same documents to a campaign consultant who posts them with campaign commentary. The target of the documents sues...
Citations: U.S. Const. art. I, sec. 6, cl. 1, Gravel v. United States, United States v. Brewster
A member-managed LLC has three equal members and no operating-agreement provision on voting. Two members approve replacing a routine supplier. One member objects. Which statement best describes the default management rul...
Citations: Revised Uniform Limited Liability Company Act secs. 201, 203, 401, 407, 409, 502, 503, 601, 701
...sue derivatively over a self-dealing transaction approved by a five-member board. The complaint alleges that three directors personally received side payments from the buyer and that a fourth director is the buyer's chie...
Citations: Model Business Corporation Act secs. 7.40-7.47, Federal Rule of Civil Procedure 23.1 derivative-pleading principles
A state sells timber from state-owned land. It gives residents first priority to buy the timber, and every buyer must agree to process the timber at mills located in the state before reselling it. An out-of-state mill ch...
Citations: South-Central Timber Development, Inc. v. Wunnicke
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