All questions
Question 1
A retaining wall on Nguyen's property collapsed during a storm and damaged Rivera's yard. Rivera sued Nguyen in federal court for negligence, seeking repair costs. After a bench trial, the court entered judgment for Rivera and awarded $18,000. Six months later, Rivera discovered an engineer's report, prepared before the collapse, warning that the wall was dangerously unstable. Rivera's stated objectives are to (1) file a second federal suit against Nguyen based on Nguyen's failure to heed the report, (2) seek punitive damages in that second suit, and (3) recover attorney's fees from the first suit.
Which of the following best explains the attainability of Rivera's objective to seek punitive damages?
- The objective is unattainable because a final judgment on the merits in the first suit bars a second suit raising claims or damages arising from the same wall collapse. (correct answer)
- The objective is attainable because the engineer's report is newly discovered evidence that was not available at the first trial.
- The objective is attainable because punitive damages are a separate remedy that was never actually litigated in the first action.
- The objective is unattainable because a federal court sitting in diversity cannot award punitive damages unless a state statute expressly authorizes them.
Explanation: Whenever a plaintiff wins a judgment and then tries to sue again over the same underlying event, think claim preclusion. A final judgment on the merits extinguishes the entire claim, including every theory of recovery and every type of damage that could have been raised—not just those actually litigated. Rivera's first negligence suit arose from the wall collapse, so a second suit based on Nguyen's failure to heed the engineer's report is the same claim. The report might be newly discovered evidence, but claim preclusion does not permit a do-over for evidence that existed before trial, even if discovered later. Punitive damages are not a separate remedy that survives; they are part of the same claim for relief and should have been demanded in the first action. The diversity point is also a trap: it is true that punitive damages in federal diversity cases are governed by state substantive law, but the obstacle here is not lack of statutory authorization—it is the preclusive effect of the prior judgment. Thus, the objective is unattainable because the first judgment bars a second suit for damages arising from the same collapse. On exam day, when you see successive lawsuits, first ask whether the prior judgment was final, on the merits, and involved the same parties and claim; if so, res judicata likely bars the later suit.
Question 2
Chen owns 5% of the shares of a closely held corporation. The CEO, who controls the board, caused the corporation to pay herself a $2 million bonus despite declining profits. The board approved the bonus by a vote of 3-2, with the two independent directors voting against. Chen wants to (1) inspect corporate records to investigate the bonus, (2) sue the CEO on behalf of the corporation to recover the bonus, and (3) sue the CEO directly for the resulting decrease in the value of her shares.
Which of the following best explains the attainability of Chen's objective to sue the CEO directly?
- The objective is attainable because a shareholder may sue directly whenever a controlling officer's self-dealing reduces the value of the shareholder's stock.
- The objective is attainable because the bonus was approved by a board vote, so the claim belongs to the shareholders as a group rather than to the corporation.
- The objective is unattainable because a direct action requires proof that the CEO intended to harm Chen personally, and the facts show only an intent to benefit the CEO.
- The objective is unattainable because the alleged injury is to the corporation, and a shareholder cannot bring a direct action for a corporate loss that only decreases share value. (correct answer)
Explanation: Whenever you see a shareholder wanting to sue for a drop in stock value caused by corporate mismanagement, ask: who suffered the injury first? If the harm is to the corporation and the shareholder's loss is merely the indirect result of that corporate loss, the claim belongs to the corporation and must be brought derivatively, not directly.
Here, the $2 million bonus allegedly injured the corporation by depleting its assets. Chen's shares decreased in value only because the corporation lost money. That is exactly the kind of indirect injury that cannot support a direct shareholder suit. Chen's proper route is the derivative suit on behalf of the corporation, with any recovery going back to the corporation, not to Chen personally.
The wrong answers miss this distinction. The claim that a shareholder may sue directly whenever self-dealing reduces stock value ignores the rule that a direct suit requires a separate and distinct injury to the shareholder, not merely a diminished share price. Similarly, the idea that board approval somehow makes the claim belong to the shareholders as a group is wrong: approval affects whether the bonus was a breach of fiduciary duty, but it does not change who owns the claim—the corporation does. Finally, the assertion that a direct action requires proof of intent to harm Chen personally misunderstands the test; the problem is not intent, but the nature of the injury.
Study tip: On the bar exam, if the shareholder's loss is "every shareholder's loss" through a drop in share value, it is derivative. A direct claim requires an injury unique to that shareholder, such as being denied voting rights or a forced buyout.
Question 3
A mother was at home several blocks away when her six-year-old child was struck by a delivery truck in a crosswalk outside school. She did not see or hear the accident; she learned of it when a neighbor called. The child suffered a broken leg. The mother's stated objectives are to (1) recover the child's medical expenses, (2) recover damages for her own emotional distress from learning of the accident, and (3) obtain an injunction requiring the trucking company to install better mirrors on its trucks.
Which of the following best explains the attainability of the mother's objective to recover for her own emotional distress?
- The objective is attainable because the mother is a close relative of the child and the trucking company owed the child a duty of care.
- The objective is unattainable because a bystander may recover for emotional distress only if she was present at the scene and contemporaneously perceived the injury, and the mother did not. (correct answer)
- The objective is attainable because the mother suffered severe emotional distress as a direct result of the defendant's negligent conduct toward her child.
- The objective is unattainable because emotional distress damages are not recoverable in a negligence action unless the plaintiff also suffered physical impact.
Explanation: When you see a claim by a plaintiff who did not suffer physical harm but seeks damages for emotional distress because of harm to someone else, your mind should go immediately to bystander negligent infliction of emotional distress. The rule is strict: a bystander can recover only if she is a close family member, was present at the scene, and contemporaneously perceived the injury-producing event. Here, the mother was blocks away and neither saw nor heard the accident; she learned of it later by phone. Therefore, her claim for emotional distress fails, even though she is the child's mother.
That missing sensory connection also explains why the correct answer is not simply that she is a close relative or that the trucking company owed the child a duty. Those factors are relevant, but presence and contemporaneous perception are the key requirements. Likewise, her severe distress, while understandable, cannot substitute for the rule; a close relationship plus severe distress is not enough. Finally, the old idea that emotional distress damages require a physical impact has been abandoned or relaxed in most jurisdictions—so that answer states a false absolute. The modern test is about perception, not impact.
On the exam, remember the phrase "present, close, and contemporaneous." If the plaintiff did not actually witness the injury, the bystander claim fails—no matter how foreseeable or heartbreaking the harm.
Question 4
The only cinema in a city was designated a historic landmark. The owner applied for a demolition permit to replace it with an office tower. The landmark commission denied the permit, but the cinema continues to operate profitably. The owner's stated objectives are to (1) demolish the cinema, (2) obtain just compensation for the denial, and (3) sell the cinema to a nonprofit that would preserve it.
Which of the following best explains the attainability of the owner's objective to obtain just compensation?
- The objective is attainable because any regulation that denies a landowner the right to demolish a building and build a more profitable one effects a taking.
- The objective is unattainable because the landmark designation leaves the owner with an economically viable use and is a reasonable land-use regulation, not a taking. (correct answer)
- The objective is attainable because the landmark designation singles out the owner's property for a burden that should be borne by the public as a whole.
- The objective is unattainable because a city may impose any land-use regulation for public health, safety, or welfare without paying compensation.
Explanation: Whenever you see a landowner challenging a regulation that blocks development, think regulatory takings. The central question is whether the regulation leaves the property with an economically viable use and reasonably furthers a legitimate public interest. Here, the cinema continues to operate profitably, so the landmark designation does not destroy the owner's economic use. Historic-preservation laws are a classic reasonable land-use regulation, and the owner cannot claim just compensation merely because demolition and an office tower would be more profitable.
The answer claiming that any denial of the right to demolish and build a more profitable building effects a taking is wrong: takings law does not guarantee owners the most valuable use of property. The answer invoking the idea that the owner is singled out for a burden the public should bear sounds fair, but a historic landmark designation can permissibly burden one property owner when a viable economic use remains. Finally, the answer suggesting a city may impose any land-use regulation without compensation overstates the police power: regulations can go so far that they become takings, but this one does not.
Strategy tip: on takings questions, first ask whether the owner lost all or substantially all economic use, not just expected profit. Loss of an opportunity to earn more is not the kind of loss the Takings Clause compensates.
Question 5
Peters, a citizen of Iowa, was injured by a machine manufactured by MidCo, a Delaware corporation whose principal place of business is Iowa. Peters bought the machine from RetailCo, an Iowa corporation with its principal place of business in Iowa. Peters sued both in Iowa state court, seeking $1 million for negligence and strict liability. MidCo's stated objectives are to (1) remove the entire case to federal court, (2) have the federal court decide only MidCo's claims and remand the claims against RetailCo, and (3) have the federal court apply the Federal Rules of Civil Procedure after removal.
Which of the following best explains the attainability of MidCo's objective to remove the entire case?
- The objective is attainable because the amount in controversy exceeds $75,000 and the claims arise under state law, so diversity jurisdiction is available.
- The objective is attainable because MidCo is a Delaware corporation and Peters is an Iowa citizen, so the parties are completely diverse.
- The objective is unattainable because a defendant may remove only when all defendants join in the removal notice, and RetailCo would not agree to removal.
- The objective is unattainable because MidCo is a citizen of Iowa for diversity purposes, RetailCo is also an Iowa citizen, and Peters is an Iowa citizen, so complete diversity is absent. (correct answer)
Explanation: Whenever you see a removal question, first check the jurisdictional basis—removal to federal court requires that the case could have originally been brought there, usually under diversity or federal-question jurisdiction. For corporate defendants, remember the "dual citizenship" rule: a corporation is a citizen of both its state of incorporation and its principal place of business. MidCo is incorporated in Delaware but has its principal place of business in Iowa, so it is an Iowa citizen for diversity purposes, just like Peters and RetailCo. Since complete diversity requires no plaintiff to share a state with any defendant, this case fails—Peters and both defendants are Iowa citizens. That is why MidCo's objective to remove the entire case is unattainable.
The choice stating that the objective is attainable because the amount exceeds $75,000 and the claims arise under state law misses the real problem: the amount in controversy is satisfied, but diversity jurisdiction also requires complete diversity, which is absent here. The choice relying on MidCo being a Delaware corporation and Peters an Iowa citizen is similarly flawed because it ignores MidCo's Iowa citizenship and RetailCo's presence in the case. The choice about all defendants needing to join the removal notice states a true removal requirement, but the passage gives no indication that RetailCo refuses to join; the actual obstacle is lack of diversity, not lack of unanimity. So the correct explanation is that MidCo's own Iowa citizenship defeats diversity.
On the bar exam, always list each party's citizenship before evaluating removal or diversity jurisdiction—and for corporations, always include both the state of incorporation and the principal place of business.
Question 6
Bascombe agreed in a signed contract to buy a specific waterfront lot from Donner for $500,000. The contract said: “If Donner fails to convey title, Donner will refund Bascombe’s deposit and pay Bascombe $25,000 as liquidated damages. This is Bascombe's sole remedy for a failure to convey." The $25,000 was a reasonable estimate of the loss Bascombe would suffer if the sale failed. Donner then refused to close after receiving a higher offer and still holds title. Bascombe’s stated objectives are to (1) obtain the lot, (2) collect the $25,000 liquidated damages, and (3) recover the cost of a title search.
Which of the following best explains the attainability of Bascombe's objective to obtain the lot?
- The objective is attainable because waterfront land is unique and money damages are inadequate, so a court may decree specific performance despite the liquidated damages clause.
- The objective is unattainable because the contract expressly made liquidated damages Bascombe's sole remedy, so Bascombe agreed to accept money rather than compel Donner to convey. (correct answer)
- The objective is unattainable because Donner's refusal to convey was an anticipatory repudiation that discharged Bascombe's duty to tender and left only a claim for damages.
- The objective is attainable because Bascombe's payment of a deposit and readiness to close created an equitable lien on the lot that can be enforced by judicial sale.
Explanation: Whenever you see a liquidated-damages clause paired with a request for specific performance, the first question is whether the parties made that remedy exclusive. Here they did. Land is generally unique, so money damages are inadequate and a court would ordinarily decree specific performance. But the contract expressly stated that the deposit refund plus $25,000 was “Bascombe’s sole remedy” for a failure to convey. By agreeing to that language, Bascombe surrendered his right to compell Donner to transfer the lot. His stated objective to obtain the lot is therefore unattainable despite the uniqueness of waterfront property. The $25,000 figure being reasonable estimate doesn't matter — reasonableness validates the liquidated damages clause, but doesn't make specific performance available.
The answer that uniqueness and inadequacy justify specific performance "despite" the liquidated damages clause fails because the clause isn't something a court can ignore; it is an express limitation on remedies. The anticipatory-repudiation answer misunderstands that doctrine: Donner's refusal gave Bascombe a choice — treat the contract as discharged and sue for damages, or await performance and seek specific performance. Repudiation does not automatically reduce his claim to damages. The equitable-lien answer is also flawed: paying a deposit and being ready to close do not create an equitable lien on Donner's lot that can be enforced by judicial sale; at most, Bascombe might have restitution rights, but that would not give him ownership.
Study tip: when a contract contains an explicit "sole remedy" clause, that clause controls — even where equitable relief would otherwise be available. Always check whether the parties contracted around default remedies before assuming specific performance applies.
Question 7
Ellis signed a three-year written employment contract with a marketing firm. The contract permitted termination only for cause. Eight months later, the firm's new CEO fired Ellis without cause and hired a replacement. Ellis has found a comparable job starting in two months. Ellis's stated objectives are to (1) recover the salary he would have earned for the remaining term, (2) be reinstated to his former position, and (3) recover damages for emotional distress from the termination.
Which of the following best explains the attainability of Ellis's objective to be reinstated?
- The objective is attainable because the contract expressly limits termination to cause, and the employer's breach is continuing.
- The objective is attainable because money damages are inadequate when an employee has lost a specific contractual position with a fixed term.
- The objective is unattainable because courts will not order an employer to continue employing a person; specific performance of personal services would require ongoing supervision and is unavailable. (correct answer)
- The objective is unattainable because Ellis must first prove that the employer acted in bad faith, and the facts do not establish bad faith.
Explanation: Whenever you see a question about an employee seeking reinstatement, think equitable remedies. The employee may have a strong breach-of-contract claim, but the remedy of reinstatement is specific performance—forcing the employer to continue an employment relationship. Courts generally refuse to order specific performance of personal-service contracts, whether that means forcing an employee to work or forcing an employer to keep an employee. Ongoing employment requires trust, cooperation, and continuing supervision that courts are ill-equipped to provide. That is why the correct explanation is the one stating the objective is unattainable because courts will not order an employer to continue employing a person; specific performance of personal services would require ongoing supervision and is unavailable.
The choice claiming the objective is attainable because the contract expressly limits termination to cause and the breach is continuing confuses liability with remedy. A continuingbreach may support damages, butt does not make an equitable remedy available. Similarly, the choice arguing money damages are inadequate when an employee has lost a specific contractual position with a fixed term misstates common-law employment doctrine: courts generally treat expectancy damages—lost salary minus mitigation—as adequate, and a fixed-term job is not unique in the specific-performance sense. Finally, the choice requiring proof of bad faith is wrong because bad faith is not a preconditionto reinstatement in an ordinary breach action; even egregiousbad faith would not make specific performance available here. Remember the pattern: in employment contracts, damages are the remedy;reinstatement is reserved for statutory or collective-bargaining contexts, not common-law contract claims.
Question 8
Grant owned a 100-acre tract and sold the northern 40 acres to North. The only access from the northern parcel to a public road was a dirt road across Grant's retained southern parcel, and Grant used that road before the sale to reach the northern parcel. Grant later sold the southern parcel to Young. Young now refuses to allow North to use the road. North's stated objectives are to (1) use the dirt road to reach the public road, (2) install a gate at the road's entrance, and (3) obtain an order requiring Young to maintain the road.
Which of the following best explains the attainability of North's objective to use the dirt road?
- The objective is attainable because the sale left the northern parcel without access, and an easement by necessity arose over Grant's retained parcel and passed to Young. (correct answer)
- The objective is unattainable because an easement by necessity cannot be implied against a subsequent purchaser who takes without actual notice of the prior use.
- The objective is attainable only if North can show that Young's deed expressly granted an easement for the road.
- The objective is unattainable because an easement by necessity benefits only the original grantee and cannot pass to later owners of the dominant estate.
Explanation: When you see a land sale that leaves one parcel with no access except over the seller's retained land, think easement by necessity. It is implied by law when a grantor conveys a parcel that is landlocked by the severance, because the law assumes the parties intended reasonable access. Here, Grant sold the northern 40 to North, and the only route to a public road ran across Grant's retained southern parcel, which he had used before the sale. At the moment of severance, North's parcel needed that access, so an easement by necessity arose over Grant's retained land. Because the easement is appurtenant to the northern parcel and attached to the servient southern parcel, it ran with the land. Young took the southern parcel subject to it, and North can enforce it.
The idea that North's objective is unattainable because an easement by necessity cannot be implied against a subsequent purchaser without actual notice is wrong: the easement arose at the original severance, binds successors to the servient estate, and Young is charged with inquiry notice because the landlocked parcel and visible road would prompt a reasonable buyer to investigate. Likewise, attainability does not depend on an express grant in Young's deed; an easement by necessity arises by operation of law, not from deed language. Finally, the easement is not limited to the original grantee: it is appurtenant to the dominant estate and passes to later owners of the northern parcel.
Strategy: whenever a conveyance creates a landlocked parcel, check for an easement by necessity; remember both the burden and the benefit run with the land.
Question 9
A city maintains a large public park and routinely grants permits to private groups for displays and events. It granted a church a permit to place a nativity scene during December. The city then denied a permit to an atheist organization for a solstice display in another part of the same park, explaining that the display would offend park visitors. The atheist organization's stated objectives are to (1) obtain a permit for the solstice display, (2) recover nominal damages for the denial, and (3) have the city adopt a written policy allowing all private displays on an equal basis.
Which of the following best explains the attainability of the atheist organization's objective to obtain a permit?
- The objective is unattainable because a public park is not a public forum for religious or anti-religious speech.
- The objective is unattainable because the city may deny a permit whenever it reasonably believes the display will offend park visitors.
- The objective is attainable because, having opened the park to private displays, the city cannot exclude the atheist organization based on the viewpoint of its message. (correct answer)
- The objective is attainable because the Establishment Clause requires the city to treat religious and nonreligious displays identically in a public park.
Explanation: Whenever you see a permit denial for speech in public space, think public-forum doctrine. Public parks are traditional public forums, so once the city allows private displays, it cannot regulate speech based on viewpoint. The city's stated reason—that the atheist display would offend park visitors—is exactly that: a viewpoint-based objection to the message. Because the city had already opened the park to private displays, it must treat the atheist organization's solstice display on the same basis. The permit is therefore attainable.
The "public park is not a public forum" choice is wrong because parks are the classic example of a traditional public forum. The choice allowing denial whenever the city reasonably believes the display will offend visitors is also wrong: listener offense is a "heckler's veto," not a valid content-neutral reason, and cannot justify viewpoint discrimination. Finally, the Establishment Clause choice is tempting but mislocates the doctrine. The Establishment Clause does not itself require identical treatment of religious and nonreligious private speech; here the atheist group's right comes from the Free Speech Clause and the city's decision to create a forum open to all private displays.
On exam day, when you see a denial based on how people might react to a message, recognize viewpoint discrimination—and remember that traditional public forums have the highest speech protections.
Question 10
A subdivision's recorded declaration states that all lots are restricted to residential use. The declaration is referenced in the deeds of the first 40 homes but is not mentioned in the deed to Lot 41, which the developer sold to a commercial builder. The builder did not read the declaration and had no actual knowledge of the restriction, but a reasonable title search of the Lot 41 chain of title would disclose the recorded declaration. The builder now plans to open a coffee shop on Lot 41. A neighboring homeowner's stated objectives are to (1) enjoin the coffee shop, (2) recover damages for diminished property value, and (3) force the builder to pay attorney's fees.
Which of the following best explains the attainability of the homeowner's objective to enjoin the coffee shop?
- The objective is attainable only if the homeowner can prove the builder had actual notice, because constructive notice is insufficient for an injunction.
- The objective is unattainable because the builder did not sign the declaration, and there is no privity of estate between the builder and the homeowner.
- The objective is unattainable because the restriction does not touch and concern the land, as it benefits only the original developer.
- The objective is attainable because the recorded declaration gives constructive notice, and the residential restriction touches and concerns the land and was intended to benefit all lot owners. (correct answer)
Explanation: When you see a subdivision restriction question, focus on equitable servitudes and real covenants: a recorded declaration containing a common scheme can bind later purchasers if they have notice. Here, the residential-use restriction was in the recorded declaration, and although the builder had no actual knowledge, a reasonable title search would disclose it. That is constructive notice, and constructive notice is enough to enforce an equitable servitude by injunction. The restriction also touches and concerns the land because it controls how Lot 41 is used, and it was intended to benefit the subdivision's lot owners, not just the developer. So the homeowner can enjoin the coffee shop.
The answer claiming the injunction is attainable only with actual notice is wrong: for equitable servitudes, constructive notice suffices. The answer claiming the builder is not bound because he did not sign the declaration and there is no privity of estate is wrong: no privity is required for an equitable servitude, and successors with notice are bound by a common scheme. The answer claiming the restriction does not touch and concern the land and only benefits the developer is wrong: residential-use restrictions directly affect land use and value and benefit all lot owners. The correct answer is that the recorded declaration gives constructive notice, the restriction touches and concerns the land, and it was intended to benefit all lot owners.
Study tip: on bar-exam property questions, separate the rules for covenants (damages, privity required) from equitable servitudes (injunctions, notice sufficient). Here the injunction request points you toward equitable servitude law.