TO:  Commercial Law Students
FROM: Avery Katz
DATE: May 24, 1995
RE:  Feedback on Spring 1995 exam
 

I have put on reserve the top three student answers to each of the questions to the final exam, along with a copy of the
exam itself.  What made these answers the best was their coverage of arguments, detail and sophistication in use of
facts, and clarity in organization and explanation.   If you drew different inferences from the given facts than I did or
than the top answers did, you wouldn't have lost points, unless your inferences were completely unsupportable.  Where
some people lost points were in restating the facts without tying them to legal or planning issues.

There were only two common errors, one on each question.  On question 1 a number of you wasted time discussing
whether Irwin had a purchase money interest (and details related to purchase money status, such as mechanics of filing,
priority in proceeds, etc.)  It is true that Irwin is a purchase money lender for inventory, but this status is irrelevant for
purposes of priorities, since there is no other creditor named in the problem who has an interest in inventory.  All that
matters for priority here is first-in-time.  (Firefly is arguably earlier in time, but has no interest in inventory).  It would
have been better to spend the time discussing the effect of UCC §2-403 on the parties' priorities in the returned and
resold machines, an issue several people overlooked in their answers.

On the second question, good answers could have gone in a variety of directions, and the top three answers illustrate
some possibilities.  Most answers failed to address the issue of preferences, which is a real problem for any
arrangement in which Crandall reduces its stake in Donner's or upgrades its security.  Moreover, this is a problem for
Second Bank as well, because transfers to Second Bank that operate for the benefit of Crandall are three-corner
preferences, recoverable from Second Bank under §550 if made within the preference period.   As with the first
question, organization, clarity, and discussion of specific facts and business problems made the difference between
good answers and adequate ones.

Your individual exams will be available for inspection at the registrar's office, though I have not made many marks on
them other than check marks; instead, I kept a score sheet containing my own notes on each exam.   If you want to
discuss your individual exam, please feel free to contact me; you will find it useful to read the top answers on reserve,
however, before we meet.

As I told you, it was a real pleasure teaching the class this term, and I wish you all well.