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The parties dispute the legal effect of a contested transaction. A party lost a first suit and then repackaged the same transaction under a new legal theory. The record contains both written proof and disputed oral testimony. The parties disagree about the legal effect of those facts. Which answer gives the best resolution?

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The court should resolve the dispute by applying the operative rule to the material facts: The answer should identify the governing rule for Claim and Issue Preclusion and apply it to the operative facts. Resolve the dispute on equitable fairness alone without identifying the governing doctrine or its limits. Treat the formal label attached to the claim or defense as conclusive and disregard facts bearing on the rule's elements. Stop the analysis once the proponent states a plausible rule, without addressing the strongest counterargument.

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