Business Associations · NextGen Bar Exam single best answer
A shareholder of a corporation cannot attend the upcoming annual meeting, so she signs and mails the corporation a proxy card appointing her business partner to vote her shares. The card names no expiration date and says nothing about being irrevocable. It is an ordinary appointment, given for no consideration and unconnected to any sale of, or loan against, her shares. Before the meeting she has a change of heart, shows up in person, and asks to vote the shares herself.
May the shareholder revoke the proxy and vote her own shares?
AOption A. Incorrect answer. No, because a proxy is binding for the meeting for which it was given.
BOption B. Correct answer. Yes, because this proxy is revocable and her appearance to vote revokes it.Correct
COption C. Incorrect answer. No, because she failed to state in writing that the proxy was revocable.
DOption D. Incorrect answer. Yes, but only if the appointed partner consents to the revocation.
Why
An ordinary proxy is freely revocable, and a shareholder revokes it simply by showing up and voting the shares herself (or by submitting a later-dated proxy). Because this was a garden-variety appointment — not coupled with any interest such as a share purchase or a secured loan — she may revoke it and vote in person (B). A wrongly treats every proxy as locked in; revocability is the default, not the exception. C invents a writing requirement for revocation — the default runs the other way, a proxy being revocable unless it conspicuously states it is irrevocable and is coupled with an interest. D gives the proxy holder a veto he does not have; revocation is the shareholder's unilateral act. (Separately, an undated proxy would in any event lapse after 11 months under the MBCA.)