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Simple English definitions for legal terms
transaction-or-occurrence test
Read a random definition: wrongful termination in violation of public policy
A quick definition of transaction-or-occurrence test:
The transaction-or-occurrence test is a way to determine if a claim is a compulsory counterclaim under the Federal Rules of Civil Procedure. There are four different tests that can be used to determine this:
- Are the legal and factual issues raised by the claim and counterclaim largely the same?
- Would res judicata (a legal principle that prevents a party from re-litigating a claim) bar a later suit on the counterclaim if the compulsory-counterclaim rule did not exist?
- Will substantially the same evidence support or refute both the plaintiff's claim and the counterclaim?
- Are the claim and counterclaim logically related?
If the answer to any of these questions is yes, then the claim is likely a compulsory counterclaim. This means that it must be brought in the same lawsuit as the original claim, or it may be barred from being brought in a later lawsuit.
A more thorough explanation:
The transaction-or-occurrence test is a method used to determine if a claim is a compulsory counterclaim under Fed. R. Civ. P. 13(a). There are four different tests that can be used:
- Are the legal and factual issues raised by the claim and counterclaim largely the same?
- Would res judicata prevent a later suit on the counterclaim if the compulsory-counterclaim rule did not exist?
- Will substantially the same evidence support or refute both the plaintiff's claim and the counterclaim?
- Are the claim and counterclaim logically related?
For example, if a person sues their landlord for breach of contract, and the landlord files a counterclaim for unpaid rent, the transaction-or-occurrence test would be used to determine if the counterclaim is compulsory. If the legal and factual issues raised by the breach of contract claim and the unpaid rent counterclaim are largely the same, then the counterclaim would likely be compulsory.