Under seismically induced loading, shallow foundations commonly fail by overturning on saturated soils. While the excess pore pressures may have fully dissipated following construction, undrained conditions are typically presumed in the assessment of seismic capacity in conventional applications due to the high rates of loading induced during an earthquake. Undrained strength, however, can be critically dependent on the history of loading and significantly heterogeneous and anisotropic around a foundation. The finite element method is utilized in this study for a proper assessment of the impact of these factors on the overturning moment capacity of surficial foundations on saturated soils, with specific emphasis on failure under seismic loading. Uplift capability has been incorporated into the models and analyses have been conducted for different drainage conditions. Based on the analyses results and comparisons with analytical formulae, it is concluded that the assumption of homogeneous soil strength as well as the disregard of stress path followed can lead to significant overestimation of the overturning moment capacity. The proposed improved approach comprises calculation of the overturning moment capacity based on drained soil behavior and subsequent application of an undrained behavior reduction factor (URF) compatible with the representative pore-pressure parameter A.