The issue this week concerns the appropriate remedy when controlling shareholder(s) breach the fiduciary duties they owe to the other shareholders. An article by attorney William S. Monnin-Browder discusses whether courts should apply a minority interest discount in a forced sale. Background As explained in many published opinions, “stockholders in the close corporation owe one …
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This posting continues the question of whether fault should be considered in evaluating a claim for breach of contract, specifically, whether the courts should weigh the “fault” of the non-breaching party. When would such “fault” by the non-breaching party arise? It would seem that three time frames could be considered: Before (i.e., during the formation …
Continue reading “A Comparative Fault Defense in Contract Law – Part 2”
This week’s posting considers whether culpability should be considered in a claim for breach of contract. The traditional answer in the U.S. (traditional at least since 1900) is No. As discussed in a recent symposium, “In terms of the Restatement of Contracts conception, then, contract law is strict liability without a contributory negligence defense . …
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Trusts have been employed in the English legal system for hundreds of years. In 1979, Prof. R.H. Hehnholz reviewed court records to examine the early history of trusts. Prof. Hehnholz started by noting, “As a means of avoiding feudal incidents and of evading the common law rule prohibiting devises of freehold land, the feoffment to …
Continue reading “The Enforcement of Trusts in the Medieval Legal System”
The California Supreme Court recently considered when a transfer of ownership occurs in the context of an estate planning trust. The dispute arose in under Proposition 13, which sets the rules for property tax reassessment. According to the court, “When Helfrick died, the residence’s assessed value for tax purposes was $96,638, with total taxes due …
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In the recent case of Sharabianlou v. Karp, 2010 DJDAR 2039 (Feb. 8, 2010), the court considered the following facts. “Faced with uncertainty about the scope of the contamination and the cost of its cleanup, and unable to agree on who should pay for the remediation, the parties failed to close escrow. After further efforts …
Continue reading “Agent Not Liable for Breach of Fidicuary Duty Without Proof of Damages”
Continuing his recent discussion of fault in contract law, Judge Posner explains that, “The idea of ‘good faith’ is an example. We generally want people to be honest and aboveboard in their dealings with others. But there is no general duty of good faith in contract law. If you offer a low price for some …
Continue reading “Judge Posner Writes on Blameworthiness in Contract Theory”
Judge Richard A. Posner of the Seventh Circuit Court of Appeals contributed his thoughts at a symposium on the rationale for liability for breach of contract. One of his points is a sound analytic distinction between tort liability and contract liability, a concept which is sadly muddled in California cases. Writes Judge Posner, “Here is …
Prof. Deborah A. DeMott from Duke University School of Law has written a thoughtful article in which she differentiates among the fiduciary duties owed by agents. Prof. Demott begins as follows: “Legal theorists differ on how best to characterize fiduciary duty; to some, it’s best understood as a consequence of contract – as a set …
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The Fourth District Court of Appeal held in Le vs. Pham, 2010 DJDAR 297 (January 6, 2010) “that where the bylaws of a pharmacy corporation provide that one stockholder must give another a right of first refusal on the sale of any stock, it is a breach of fiduciary duty for the selling stockholder to …
Continue reading “Le vs. Pham – Careless Reasoning in Sale of a Pharmacy”