Ch9. Past-Exam Error Analysis — The Most Commonly Missed Points

Contract Law — Common Mistakes

① Rescission vs. Termination
   → Rescission = retroactive unwinding + restitution (treated as never formed)
   → Termination = prospective only (lease, employment, ongoing services)

② Disclaimer Deadline = 9 Months
   → Written qualified disclaimer under IRC § 2518 within 9 months of death

③ Forced / Elective Share
   → Surviving spouse only: typically 1/3 to 1/2 of augmented estate
   → Children have NO forced share under US law

④ Tort Statute of Limitations = Discovery Rule (commonly 2–3 years)
   → Do not confuse with general contract SOL (commonly 4–6 years)

⑤ Respondeat Superior = Employee Acting in Scope of Employment
   → Personal frolic outside job duties = NOT employer liability

Recording Law — Common Mistakes

⑥ Recording = Notice, Not Validity Guarantee
   → Recording gives constructive notice; recorder does NOT warrant title

⑦ No Warranty of Title by Recorder
   → Formal review of instrument only; title insurance fills the protection gap

⑧ Lis Pendens = Priority Notice (Relates Back on Final Judgment)
   → Subsequent deeds recorded after lis pendens take subject to outcome

⑨ Entity Existence = Articles Filed AND Approved
   → Drafting articles of organization alone does NOT create the entity

⑩ Amendment Filing = Within Statutory Period (commonly 30–90 days)
   → Name change, registered agent change, officer change all require timely filing

Civil Procedure — Common Mistakes

⑪ Claim Preclusion Applies to Final Judgment Only (not interim rulings)
⑫ Federal Appeal Deadline = 30 Days; State courts vary (14–60 days)
⑬ Enforcement Tools = Writ, Garnishment, Lien, Levy
   → Writ of execution, wage garnishment, recorded judgment lien, bank levy
⑭ Attachment = Monetary; Injunction/TRO = Non-Monetary
⑮ Closing Escrow = Funds + Title Transfer Simultaneously

Business Entity Law — Common Mistakes

⑯ Entity Legally Exists = Secretary of State Approves Filing
⑰ Corporate Supermajority = 2/3 of votes cast (common default); charter may vary
⑱ Director Term = Typically 1 year (annual election); charter may stagger
⑲ Derivative Suit Threshold = Shareholder must have owned shares at time of wrong
⑳ Merger = Surviving Entity Assumes All Liabilities of Merged Entity

Key Concept Cards

Rescission = Retroactive; Termination = Prospective ★★★★★ : Rescission treats the contract as never having existed; termination ends obligations going forward. Memory hook: rescind = retroactive; terminate = prospective

Enforcement = Writ / Garnishment / Lien ★★★★★ : Three primary tools to collect on a money judgment. Memory hook: collect = writ/garnish/lien

Entity Existence = Filing Approved ★★★★☆ : The entity comes into existence only upon state approval of the articles. Memory hook: entity = state approval

Practice Quiz

Q. What is the practical significance of claim preclusion (res judicata) applying only to the judgment, not the court’s reasoning?

Claim preclusion bars re-litigation of the same claim after a final judgment on the merits. Because it applies to the claim — not every factual finding in the opinion — a plaintiff whose claim was dismissed may still have related claims that were not fully litigated. For example, a dismissed breach-of-contract claim does not bar a separate tort claim arising from the same facts if that tort was not raised. This distinction matters in litigation strategy when deciding which claims to pursue first.

Q. In what service areas do document preparers and attorneys compete?

Document preparers dominate: real property recording, LLC/corporate filings, routine probate petitions for pro se filers. Attorney-only work: courtroom representation, legal advice, signing as counsel of record. Competitive overlap: complaint drafting for pro se litigants, business formation counseling, and estate planning documents (where UPL rules vary by state). Cost advantage favors document preparers for high-volume, standardized recording work.