Bar Exam Rule Statements - MOST TESTED
Character Evidence: When Allowed to Prove Propensity (Defendant's Character)
Character evidence may be offered as circumstantial evidence to prove propensity
in certain limited circumstances:
-Defendant's Character: In criminal cases, a defendant may ALWAYS introduce
evidence of his own character. The prosecution is NOT allowed to present
evidence of the defendant's character to prove propensity UNLESS the defendant
first presents evidence of his own character (defendant "opens the door").
Article 9 of the UCC Governs Secured Transactions
Article 9 of the UCC governs any transaction regardless of its form that creates a
security interest, including security interests in personal property, consignments, a
sale of accounts, chattel paper, and promissory notes.
Attachment and Perfection
Under UCC Article 9, a creditor may properly obtain a security interest in collateral
as a means to secure a loan given to a debtor. Enforcing a security interest
depends on two factors: (1) attachment; and (2) perfection.
Attachment secures the creditor's rights in the debtor's collateral, making the
security interest valid and enforceable against the debtor and third parties.
Perfection gives notice of the creditor's rights in the collateral to other parties
who may have claims to the same, and usually determines which party has
priority to the collateral.
A security interest cannot be perfected unless it has first attached.
,Attachment
Attachment requires: (1) that the creditor extend value to the debtor; (2) the
debtor must have rights in the collateral; and (3) one of the following:
(a) an authenticated record/security agreement memorializing the security
interest that:
(i) reasonably identifies the collateral
(ii) be authenticated by the debtor
(b) the collateral is in the secured party's possession pursuant to a security
agreement;
OR
(c) the secured party has control of certain types of collateral (deposit accounts,
etc.) pursuant to a security agreement
Perfection
Typically, perfection is obtained by the creditor filing a financing statement with
the Secretary of State that identifies the collateral and his security interest in it.
Perfection may also be obtained by taking possession or control of certain types of
collateral. Consumer PMSIs are automatically perfected.
Hearsay
Hearsay is an out-of-court statement that is offered to prove the truth of the
matter asserted. Hearsay is only admissible if it falls under an exception. A
"statement" means a person's oral assertion, written assertion, or non-verbal
conduct, if the person intended it as an assertion.
,Multiple Hearsay
When evidence contains hearsay within hearsay, each level of hearsay must fall
within an exception to be admissible.
Non-Hearsay
If an out of court statement is offered to prove something other than the truth of
the statement, it is non-hearsay and is admissible.
Common non-hearsay statements include: (1) verbal acts of independent legal
significance; (2) statements offered to show the effect on the listener; (3) a prior
inconsistent statement used to impeach; and (4) circumstantial evidence of the
speaker's state of mind.
Priority: Perfected Interest vs. Unperfected Interest
A perfected security interest has priority over a conflicting unperfected security
interest in the same collateral.
A creditor's prior knowledge of an unperfected security interest is irrelevant to
determine priority.
Priority: Unperfected Interest vs. Unperfected Interest
When there are two competing unperfected security interests, the "first in time,
first in right" rule controls, and the first to attach will prevail.
Priority: Perfected Interest vs. Perfected Interest
, When there are two or more perfected secured parties with rights in the same
collateral, the first to file or perfect its security interest has priority. If both
security interests are perfected, then priority dates from the time of filing or
perfection, whichever occurs first.
PMSI vs. Non-PMSI
A PMSI in consumer goods enjoys automatic perfection, meaning the creditor
doesn't need to file a financing statement to perfect the interest. As such, a PMSI
in consumer goods takes priority over another perfected or unperfected interest.
For PMSIs in non-consumer goods, a financing statement must be filed in order to
perfect the interest; otherwise, the security interest is unperfected.
Subject Matter Jurisdiction: Diversity of Citizenship
A federal court can only hear cases where it has subject matter jurisdiction,
because it is a court of limited jurisdiction. A federal court has SMJ to hear a claim
if: (a) there is a federal question; (b) there is diversity of citizenship among the
parties; or (c) supplemental jurisdiction is present.
Diversity of citizenship jurisdiction exists when: (1) there is complete diversity of
citizenship between all plaintiffs and defendants (no plaintiff can be from the
same state as any defendant); and (2) the amount in controversy exceeds $75,000.
Diversity jurisdiction is determined at the time the action is commenced; a post-
filing change of citizenship is irrelevant absent bad faith.
UCC Article 2 Governs Contracts for the Sale of Goods
Article 2 of the UCC governs all contracts for the sale of goods. Goods are defined
as all things that are movable at the time of identification to the contract. Under
Character Evidence: When Allowed to Prove Propensity (Defendant's Character)
Character evidence may be offered as circumstantial evidence to prove propensity
in certain limited circumstances:
-Defendant's Character: In criminal cases, a defendant may ALWAYS introduce
evidence of his own character. The prosecution is NOT allowed to present
evidence of the defendant's character to prove propensity UNLESS the defendant
first presents evidence of his own character (defendant "opens the door").
Article 9 of the UCC Governs Secured Transactions
Article 9 of the UCC governs any transaction regardless of its form that creates a
security interest, including security interests in personal property, consignments, a
sale of accounts, chattel paper, and promissory notes.
Attachment and Perfection
Under UCC Article 9, a creditor may properly obtain a security interest in collateral
as a means to secure a loan given to a debtor. Enforcing a security interest
depends on two factors: (1) attachment; and (2) perfection.
Attachment secures the creditor's rights in the debtor's collateral, making the
security interest valid and enforceable against the debtor and third parties.
Perfection gives notice of the creditor's rights in the collateral to other parties
who may have claims to the same, and usually determines which party has
priority to the collateral.
A security interest cannot be perfected unless it has first attached.
,Attachment
Attachment requires: (1) that the creditor extend value to the debtor; (2) the
debtor must have rights in the collateral; and (3) one of the following:
(a) an authenticated record/security agreement memorializing the security
interest that:
(i) reasonably identifies the collateral
(ii) be authenticated by the debtor
(b) the collateral is in the secured party's possession pursuant to a security
agreement;
OR
(c) the secured party has control of certain types of collateral (deposit accounts,
etc.) pursuant to a security agreement
Perfection
Typically, perfection is obtained by the creditor filing a financing statement with
the Secretary of State that identifies the collateral and his security interest in it.
Perfection may also be obtained by taking possession or control of certain types of
collateral. Consumer PMSIs are automatically perfected.
Hearsay
Hearsay is an out-of-court statement that is offered to prove the truth of the
matter asserted. Hearsay is only admissible if it falls under an exception. A
"statement" means a person's oral assertion, written assertion, or non-verbal
conduct, if the person intended it as an assertion.
,Multiple Hearsay
When evidence contains hearsay within hearsay, each level of hearsay must fall
within an exception to be admissible.
Non-Hearsay
If an out of court statement is offered to prove something other than the truth of
the statement, it is non-hearsay and is admissible.
Common non-hearsay statements include: (1) verbal acts of independent legal
significance; (2) statements offered to show the effect on the listener; (3) a prior
inconsistent statement used to impeach; and (4) circumstantial evidence of the
speaker's state of mind.
Priority: Perfected Interest vs. Unperfected Interest
A perfected security interest has priority over a conflicting unperfected security
interest in the same collateral.
A creditor's prior knowledge of an unperfected security interest is irrelevant to
determine priority.
Priority: Unperfected Interest vs. Unperfected Interest
When there are two competing unperfected security interests, the "first in time,
first in right" rule controls, and the first to attach will prevail.
Priority: Perfected Interest vs. Perfected Interest
, When there are two or more perfected secured parties with rights in the same
collateral, the first to file or perfect its security interest has priority. If both
security interests are perfected, then priority dates from the time of filing or
perfection, whichever occurs first.
PMSI vs. Non-PMSI
A PMSI in consumer goods enjoys automatic perfection, meaning the creditor
doesn't need to file a financing statement to perfect the interest. As such, a PMSI
in consumer goods takes priority over another perfected or unperfected interest.
For PMSIs in non-consumer goods, a financing statement must be filed in order to
perfect the interest; otherwise, the security interest is unperfected.
Subject Matter Jurisdiction: Diversity of Citizenship
A federal court can only hear cases where it has subject matter jurisdiction,
because it is a court of limited jurisdiction. A federal court has SMJ to hear a claim
if: (a) there is a federal question; (b) there is diversity of citizenship among the
parties; or (c) supplemental jurisdiction is present.
Diversity of citizenship jurisdiction exists when: (1) there is complete diversity of
citizenship between all plaintiffs and defendants (no plaintiff can be from the
same state as any defendant); and (2) the amount in controversy exceeds $75,000.
Diversity jurisdiction is determined at the time the action is commenced; a post-
filing change of citizenship is irrelevant absent bad faith.
UCC Article 2 Governs Contracts for the Sale of Goods
Article 2 of the UCC governs all contracts for the sale of goods. Goods are defined
as all things that are movable at the time of identification to the contract. Under
