MBE PRACTICE QUESTIONS

A breeder of quarter horses entered into an agreement with a rancher to sell and deliver two quarter horses, one to the rancher and the other to the rancher's fiancée as a gift. Although the fair market value of each horse was $3,000, the horse breeder agreed to sell both horses together for a total price of $5,000. Under the agreement that the rancher wrote out and both parties signed, the horse breeder agreed to deliver one horse to the rancher on August 1, at which time the rancher agreed to pay the horse breeder $5,000. The horse breeder further agreed to deliver the other horse to the rancher's fiancée on August 12. On August 1, the horse breeder delivered the first horse to the rancher and, at the same time, the rancher gave the horse breeder a certified check for $5,000. On August 12, the horse breeder brought the second horse to the residence of the rancher's fiancée and told her that the horse was a gift from the rancher. The rancher's fiancée told the horse breeder that she loathed quarter horses and she refused to take the horse. The horse breeder brought this horse back to his farm and sent an e-mail to the rancher, informing him that his fiancée refused delivery and that he (the horse breeder) could not keep the horse. Two weeks later, after not hearing from the rancher, the horse breeder sold the horse to an interested party for $3,000. If the rancher sues the horse breeder, how much should the rancher recover? response - correct Press Enter or Space to submit the answerA$3,000, the value of the second horse.CorrectB$2,000, the difference between the value of the horse delivered to the rancher and what the horse breeder received from the rancher.CNothing, because the rancher was not financially harmed.DNothing, because the horse breeder performed his part of the contract.

Answer Discussion - Correct The rancher should recover $2,000 because that is the amount by which the horse breeder would be unjustly enriched. In a proper tender of delivery under UCC section 2-503, the seller must put and hold conforming goods at the buyer's disposition for a time sufficient for the buyer to take possession. The seller must give the buyer notice reasonably necessary to enable him to take possession of the goods. Proper tender of delivery entitles the seller to acceptance of the goods and to payment according to the contract. [UCC §2-507] Having made a proper tender of delivery at the place designated by the rancher and having notified the rancher of his fiancée's nonacceptance, the horse breeder has discharged his duty under the contract. When a party's duty of performance is discharged, the other party is entitled to restitution of any benefits that he has transferred to the discharged party in an attempt to perform on his side. With the horse breeder's contractual duty to deliver the second horse to the rancher's fiancée discharged, the horse breeder would be unjustly enriched, to the detriment of the rancher, if he were permitted to keep the entire $5,000 paid to him by the rancher. The rancher conferred a benefit upon him by paying him $5,000 in exchange for two horses, one of which was to be delivered to the rancher, the other to the rancher's fiancée. Because delivery to the fiancée cannot be accomplished, the rancher finds himself in a position of having paid $5,000 for one horse, the fair market value of which is $3,000. Thus, if the horse breeder is permitted to retain the sum of $5,000, he will be unjustly enriched by $2,000. Therefore, the rancher should recover restitution of $2,000. (A) is incorrect because $3,000 represents more than the amount by which the horse breeder has been unjustly enriched. Although the value of the second horse is $3,000, keep in mind that the horse breeder's duty to deliver the horse to the rancher's fiancée has been discharged (and the horse breeder still has title to the horse under the UCC rule that title passes on delivery). The rancher received a discount of $1,000 off the total fair market value of the two horses because he was buying both of them. Once the horse breeder's duty under the contract is discharged, the rancher cannot recover the benefit of that bargain under the contract; he can only recover the benefit conferred upon the horse breeder, the retention of which would unjustly enrich the horse breeder. Because the horse breeder has received $5,000 from the rancher for one horse worth $3,000, the amount of unjust enrichment is $2,000. (C) is incorrect because, if the rancher recovers nothing, he will have incurred financial harm by paying $5,000 for one horse worth $3,000. (D) is incorrect because the fact that the horse breeder tendered performance but was unable to complete delivery of the second horse to the rancher's fiancée, solely due to her refusal to accept the horse, does not justify the horse breeder's keeping the entire $5,000 paid by the rancher, because the horse breeder would be unjustly enriched.

A seller conveyed her residential city property to a buyer by a general warranty deed. On taking possession of the property, the buyer discovered that the garage of his neighbor encroached six inches onto his property. If the buyer wishes to compel the seller to assist him in a suit against the neighbor, which of the following covenants may he rely on to do so? A. Seisin and encumbrances. B. Warranty and further assurances. C. Seisin and warranty. D. Encumbrances and further assurances.

Answer Discussion - Incorrect The buyer would rely on the covenants of warranty and further assurances to compel the seller to assist him in a suit against his encroaching neighbor. Under the covenant of warranty, the grantor agrees to defend, on behalf of the grantee, any lawful or reasonable claims of title by a third party, and to compensate the grantee for any loss sustained by the claim of superior title. The covenant for further assurances is a covenant to perform whatever acts are reasonably necessary to perfect the title conveyed if it turns out to be imperfect. These covenants are "continuous" (run with the land) and require the grantor to assist the grantee in establishing title. The covenants of seisin and encumbrances do not require such assistance. A covenant of seisin is a covenant that the grantor has the estate or interest that she purports to convey. Both title and possession at the time of the grant are necessary to satisfy this covenant. The covenant against encumbrances is a covenant assuring that there are neither visible encumbrances (easements, profits, etc.) nor invisible encumbrances (mortgages, etc.) against the title or interest conveyed. While the seller may have violated these two covenants because of the garage encroachment, they do not provide the basis to compel her to assist the buyer in a title suit. Instead, the buyer merely has a cause of action against the seller for their breach. Therefore, (A), (C), and (D) are wrong.

A dog owner lived next door to a day care center. Because he had a large yard and there were no applicable zoning restrictions, he installed a kennel and began training attack dogs to sell to businesses. As soon as he opened the business and posted signs in front advertising the exceptional ferocity of the dogs, some parents who had children enrolled in the day care center became alarmed at the prospect of the dogs right next to the yard where the children played, especially because the children could see and hear the dogs being taught to attack people. Within a few months of the dogs' arrival next door, the owner of the day care lost 10% of her enrollment. If the day care owner brings a nuisance action against the dog owner, what will be the most critical factual issue that the trier of fact must resolve to determine who should prevail? response - incorrect Press Enter or Space to submit the answerIncorrectAWhether the day care owner suffered other damages in addition to her economic losses.CorrectBWhether the day care owner's use of her property makes her business abnormally sensitive to the presence of the dogs.CWhether the dog owner conducted his business with reasonable care.DWhether the dog owner was apprised of the day care owner's concerns and did nothing to alleviate them.

Answer Discussion - Incorrect The determining factor for the day care owner in prevailing will be whether her use of the property is abnormally sensitive to the presence of the dogs. Nuisance is an invasion of private property rights by conduct that is either intentional, negligent, or subject to strict liability. Strict liability will be the basis for a nuisance action (sometimes called an "absolute" nuisance or a "nuisance per se") when wild animals or abnormally dangerous domestic animals are involved, or when defendant is engaged in an abnormally dangerous activity. Thus, dogs known by their owner to be vicious may create a private nuisance when they interfere with the use and enjoyment of the land next door, and the owner may be subject to strict liability because of his knowledge of the dogs' dangerous propensities. [See Restatement (Second) of Torts §822, comment j] For the presence of the dogs to be an actionable nuisance, however, they must result in a substantial interference with the day care owner's use of her land. The interference will not be characterized as substantial if it is merely the result of plaintiff's specialized use of her own property. [See Foster v. Preston Mill Co., 268 P.2d 645 (1954)-D not strictly liable for blasting operations that caused female mink on P's ranch to kill their young in reaction to the vibrations] Hence, (B) states the most critical factual issue. (A) is incorrect because the day care owner does not need to establish other types of damages to recover once she has established that the dog owner's activity is an actionable interference with the use and enjoyment of her land. (C) is incorrect because the exercise of reasonable care by the dog owner is irrelevant; the day care owner's nuisance action arises from an activity for which the dog owner is strictly liable. (D) is incorrect because the dog owner's knowledge of his interference with the day care owner's use of her property would only establish that his conduct might also be an intentional nuisance, which would require the day care owner to show unreasonableness, i.e., that her injury outweighs the utility of his conduct. She does not need to make that showing for a nuisance action based on strict liability.

A fee simple owner of a restaurant provided in his will that the property should go on his death "in fee simple to my friend, but if during my friend's lifetime my son has children and those children are alive when my friend dies, then to said living children." When the owner died, the friend took over the restaurant. If the son has children and one or more of them are alive when the friend dies, who will take title to the restaurant at that time? A. The friend's heirs, because the attempted gift to the son's children is invalid under the Rule Against Perpetuities.Incorrect B. The son's children, because their interest is not contingent, being a possibility of reverter. C. The son's children, because their interest is vested, subject to defeasance. D. The son's children, because their interest will vest, if at all, within a life in being plus 21 years.

CORRECT ANSWER - D The interest given to the son's children does not violate the Rule Against Perpetuities because the interest will vest, if at all, within 21 years after the life of the friend. Pursuant to the Rule Against Perpetuities, no interest in property is valid unless it must vest, if at all, not later than 21 years after one or more lives in being at the creation of the interest. In the case of a will, the perpetuities period begins to run on the date of the testator's death, and measuring lives used to show the validity of an interest must be in existence at that time. Here, the interest given to any of the son's children who are born during the friend's lifetime and who survive the friend must vest, if at all, on the death of the friend (who is a life in being at the time of the owner's death). Thus, this interest will vest, if it does vest, within 21 years after the friend's life, and is therefore not in violation of the Rule Against Perpetuities. (A) is therefore incorrect; if one or more of the son's children is alive at the time of the friend's death, the friend's heirs will get nothing because their fee simple will be divested. (B) incorrectly characterizes the interest of the son's children as a possibility of reverter. A possibility of reverter is the future interest left in a grantor who conveys a fee simple determinable estate. Although under different circumstances the son's children could acquire a possibility of reverter as heirs of the grantor (the owner), their interest in this case was conveyed directly to them in the owner's will. (C) is incorrect because the interest of the son's children is not vested. Their interest is a shifting executory interest rather than a remainder because it divests the fee simple estate of the friend and his heirs. The friend has a fee simple subject to an executory interest because the estate will remain with his heirs if none of the son's children are alive when the friend dies. The friend's death while the son's children are alive divests the interest of the friend's heirs; it is therefore a shifting executory interest rather than a remainder.