Equity

Front 1

Six Remedies

Back 1

1. Injunctive Relief
2. Specific Performance
3. Rescission
4. Reformation
5 & 6. Constructive Trusts & Equitable Liens

Front 2

Injunctive Relief Definition

Back 2

Defendant is ordered (enjoined) to do or refrain from doing something

Front 3

Injunctive Relief
Threshold Inquiry

Back 3

Determine if you're to discuss PERMANENT or TEMPORARY injunctive relief
Permanent Injunction issued after full trial on merits
Temporary Injunction issued pending trial on merits
If in doubt, go with Permanent Injunction

Front 4

Temporary Injunctive Relief Two- Part Test

Back 4

In issue is whether the plaintiff can obtain temporary injunctive relief. To do so, the plaintiff must meet a two-part test:
(i) irreparable injury (discuss facts in time-frame context--need relief now)
(ii) Likelihood of success (discuss the probability. Impose bond requirement)

Front 5

Temporary Restraining Order

Back 5

Issued pending a hearing to determine whether a temporary injunction should issue

Front 6

Test for obtaining a TRO

Back 6

In issue is whether the plaintiff can obtain a temporary restraining order. To do so, the plaintiff must met the two-part temporary injunction test, namely:
(i) irreparable injury (discuss facts in time frame context--need relief now)
(ii) Likelihood of success (discuss the probability. impose bond requirement)

Front 7

TROs can be issued _________

Back 7

Ex Parte
Thus,
1. Notice is not required
2. Adversarial proceeding is not required
BUT A GOOD FAITH EFFORT TO DO SO IS REQUIRED

Front 8

TROs are limited to

Back 8

10 days

Front 9

It is very difficult to get any type of temporary injunctive relief that is ________ in form. This is particularly true for a TRO

Back 9

mandatory

Front 10

Permanent Injunctive Relief Memorizer

Back 10

I PUT FIVE BUCKS DOWN
1. Inadequate legal remedies (money damages aren't enough)
2. Property Right/Protectable Interest
3. Feasibility of Enforcement
4. Balancing of the Hardships
5. Defenses

Front 11

1. Inadequate legal remedies
Three legal remedy alternatives

Back 11

1. Replevin
2. Ejectment
3. Money Damages

Front 12

1. Inadequate legal remedies
Money damages inadequate because

Back 12

1. too SPECULATIVE
2. defendant is INSOLVENT
3. IRREPARABLE INJURY
4. avoiding a MULTIPLICITY of ACTIONS
[spotting pointer-->facts will show a prior history of litigation between the parties]
[NOTE: its easier to show money damages are inadequate if protecting an interest in land; e.g., injunctive relief against nuisance, trespass to land]

Front 13

2. Property Right/Protectable Interest
Traditional Rule & Modern Trend

Back 13

TR: Equity will grant relief only where a protectable property right is involved
MT: a protectable right will suffice
WRITE ABOUT BOTH VIEWS

Front 14

3. Feasibility of Enforcement
Two types of Injunctions

Back 14

1. Negative Injunctions (stop something) --> NO enforcement problem
2. Mandatory Injunctions (do something) --> There may be an enforcement problem based on:
(i) the difficulty of supervision OR
(ii) concern with effectively ensuring complaince

Front 15

Three exam favorite mandatory injunction fact patterns

Back 15

1. Act involves the application of great taste, skill or judgment --> Injunction DENIED
2. A series of acts over a period of time --> Injunction DENIED unless plaintiff's case is otherwise great
3. An out of state act is required:
(i) Resident Defendant--> Injunction GRANTED
(ii) Non-Resident Defendant--> Injunction DENIED

Front 16

4. Balancing of Hardships

Back 16

Plaintiff's benefit vs. Defendant's hardship if relief granted

Front 17

Four Balancing of Hardship Rules

Back 17

1. There must be a GROSS DISPARITY between detriment and benefit
2. Even then, there will be no balancing act if the defendant's conduct was WILLFUL
3. If you do decide to balance the hardships, in whole or in part, consider: GIVING THE PLAINTIFF MONEY
4. Hardship to the PUBLIC is also taken into account
[balancing of the hardships is almost always a primary discussion item when the tort is nuisance or trespass to land]

Front 18

5. Defenses

Back 18

(i) Unclean Hands
(ii) Laches
(iii) Impossibility
(iv) Free Speech

Front 19

Unclean Hands

Back 19

The "unclean hands" defense is available only if plaintiff's alleged improper conduct is related to the lawsuit (not just a generally bad guy--> MUST RELATED)

Front 20

Laches

Back 20

1. Laches is a running of a period of time defense. Unlike SOL, however, which involves mere passage of time, laches is concerned with the EFFECT of the passage of time
2. The laches time period will never be greater than the SOL time period (SOL will apply in those instances)

Front 21

The 3 Laches Rules

Back 21

1. The clock starts to run when the plaintiff KNOWS of the injury
2. The delay cuts off the right to relief when it is both UNREASONABLE and PREJUDICIAL to the defendant (watched the encroachment happen)
3. If Laches, consider GIVING THE PLAINTIFF MONEY

Front 22

Impossibility

Back 22

Impossible for defendant to carry out terms of injunction

Front 23

Free Speech

Back 23

If the tort is defamation or privacy publication branch tort (false lights, private facts),, your based answer is: Injunction DENIED based on free speech grounds

Front 24

Permanent Injunction MEMORIZER

Back 24

I PUT FIVE BUCKS DOWN
1. Inadequate legal remedies
2. Property Rights/Protectable Interest
3. Feasibility of Enforcement
4. Balancing the Hardships
5. Defenses

Front 25

Equity will NOT enjoin _______

Back 25

Crimes (but see if the conduct could be characterized as a tort)

Front 26

Who will be bound by an injunction?

Back 26

1. Parties
2. Employees and agents acting with notice
3. Third persons acting with notice

Front 27

Erroneous Injunction

Back 27

1. Still have to obey it
2. Have it MODIFIED or DISSOLVED

Front 28

Contempt

Back 28

1. Civil Contempt (to coerce)
-->Money (fine) [ct. may also award damages to P]
-->Imprisonment (D can get out by agreeing to comply)
2. Criminal Contempt (to punish)
--> Fine
--> Imprisonment (can't get out; set period of time)
Constitutional safegaurds apply for criminal contempy
NO CONTEMPT for noncompliance with a money judgment (exceptions: alimony, child support)

Front 29

Unfair Competition Torts

Back 29

1. Trade Libel
2. Intereference with Business Relationships
3. Trade Secret Misappropriation
4. Trademark/Trade Name Infringement
5. Right to Imitate Problem

Front 30

Trade Libel

Back 30

The great hesitation equity has about enjoining personal defamations because of free speech DOES NOT carry over to trade libel. In a proper case, injunctive relief will issue

Front 31

Interference with Business Relationships

Back 31

1. Applies to both existing and prospective relationships
2. Existence of a privilege. Most important facts are:
(i) def's persuasion conduct (aggression vs. mere suggestions)
(ii) Relationship between the parties (competitors?, close relatives or advisors?)
NOTE: harder to get a privilege when interfering with an existing relationship (as compared to a prospective one)

Front 32

Trade Secret Misappropriation

Back 32

1. Determine that what the plaintiff has is a trade secret (something not generally available to the public which gives its possessor a competitive advantage)
2. Determine if ti was taken by improper conduct (breach of fiduciary duty?)
Who may be enjoined? Taker and 3d party seeking to use it

Front 33

Trademark/Trade Name Infringement

Back 33

1. Determine there is a protectable trademark (and w/in scope of protection)
2. Determine that there has been an "infringement)
(i) likelihood of confusion (are there similarities)

Front 34

Right to Imitate Problem
RULE

Back 34

One has right to freely imitate another's unpatented product

Front 35

Right to Imitate Problem
EXCEPTIONS

Back 35

1. Deception to the public (then discuss trademark infringement)
2. Improper taking (then discuss trade secret misappropriation)

Front 36

2. Specific Performance
Definition

Back 36

Defendant is required to perform the contract

Front 37

Specific Performance Memorizer

Back 37

Cha Cha Is My Favorite Dance
1. Contract is Valid
2. Contract Conditions of Plaintiff Satisfied
3. Inadequate Legal Remedy
4. Mutuality of Remedy
5. Feasibility of Enforcement
6. Defenses

Front 38

1. Contract is Valid

Back 38

P must show K terms with more CERTAINTY and DEFINITENESS than req'd for money damages at law

Front 39

2. Contract Conditions of Plaintiff Must be Satisfied

Back 39

Conditions satisfied/fulfilled:
1. Already performed
2. ready and able to perform
3. excused from perfoming

Front 40

2. Contract Conditions of Plaintiff Must be Satisfied
TWO FACT PATTERNS

Back 40

1. Deficiencies Fact Pattern
2. Time is of the essence clause Fact Pattern

Front 41

2. Contract Conditions of Plaintiff Must be Satisfied
Deficiencies Fact Pattern
Threshold Inquiry

Back 41

Who is the P?
Is it the seller or buyer

Front 42

2. Contract Conditions of Plaintiff Must be Satisfied
Deficiencies Fact Pattern
SELLER as Plaintiff

Back 42

1. Can enforce contract if defect is MINOR
2. CANNOT enforce contract if defect is MAJOR, unless he can cure before closing

Front 43

2. Contract Conditions of Plaintiff Must be Satisfied
Deficiencies Fact Pattern
BUYER as Plaintiff

Back 43

1. Can enforce even if defect is MAJOR
2. CANNOT enforce if defect is VERY MAJOR

Front 44

2. Contract Conditions of Plaintiff Must be Satisfied
Deficiencies Fact Pattern
If you grant Specific Performance

Back 44

mention ABATEMENT in the purchase price

Front 45

2. Contract Conditions of Plaintiff Must be Satisfied
Time is of the essence clause Fact Pattern

Back 45

1. Land sale contract with express time of the essence clause
2. Clause will contain a forfeiture provision
3. Partial performance now subject to forfeiture (buyer has made some payments)
4. Buyer makes late payment
5. Buyer brings SP suit

Front 46

2. Contract Conditions of Plaintiff Must be Satisfied
Time is of the essence clause Fact Pattern RESULT

Back 46

EQUITY ABHORS FORFEITURE
1. Loss to seller is small
2. Tardiness is de minimus
3. Waiver by Seller
4. Undue hardship on Buyer

Front 47

3. Inadequate Legal Remedy Alternative
Basic Alternative?
Why inadequate?

Back 47

MONEY DAMAGES
b/c
1. damages are SPECULATIVE
2. D is INSOLVENT
3. MULTIPLE SUITS NECESSARY
4. thing bargained for is UNIQUE

Front 48

3. Inadequate Legal Remedy Alternative
Favorite Bar Exam Issues

Back 48

1. Uniqueness problems
2. Liquidated damages clauses

Front 49

3. Inadequate Legal Remedy Alternative
Uniqueness problems fact patterns

Back 49

1. If the property is unique, then even if P received money damages, he could not simply go out and buy it
2. Determine whether contract was for the sale of real or personal property
3. Real property always UNIQUE

Front 50

3. Inadequate Legal Remedy Alternative
Uniqueness problems fact patterns [PERSONAL PROPERTY]

Back 50

Personal property not unique
EXCEPTIONS:
1. One of a kind or very rare
2. Personal significance to buyer
3. Circumstances make chattel unique at time of litigation

Front 51

3. Inadequate Legal Remedy Alternative
Liquidated Damages Clauses

Back 51

A liquidated damages clause does NOT make money damages adequate. Specific Performance is still available, unless the clause provides that this is the "ONLY" remedy

Front 52

4. Mutuality of Remedy

Back 52

1. Determine and discuss that you have a mutuality fact pattern (D argues that P should not be able to enforce this K against me b/c I could not enforce it against him [i.e., b/c P is a minor])
2. Set out the Rule: "Court will reject the mutuality argument if it feels secure that the plaintiff WILL perform"
3. Grant specific performance and have decree provide for SIMULTANEOUS performance

Front 53

5. Feasibility of Enforcement

Back 53

Personal Service Contracts are not specifically enforceable b/c
(i) ENFORCEMENT problem
(ii) INVOLUNTARY SERVITUDE

Front 54

6. Defenses

Back 54

Equitable Defenses
1. Unclean Hands
2. Laches
3. Unconsicionability
Contract Defenses
1. Mistake
2. Misrepresentation
3. Statute of Frauds

Front 55

Unclean Hands

Back 55

Unclean hands defense available only if P
s alleged improper conduct is related to the lawsuit

Front 56

Laches

Back 56

1. Concerned with the effect of the passage of time (before SOL period)
2. Clock runs when P knows of injury
3. Delay to relief cut off when it is both UNREASONABLE & PREJUDICIAL to D
4. If laches applies, consider giving P money

Front 57

Unconsicionability

Back 57

1. More than a bad deal. Must have smell factor facts
2. Tested at the time of contract formation

Front 58

6. Defenses
Bar Exam Favorites
Statue of Frauds/Part Performance Doctrine

Back 58

Spotting
1. Contract must involve land
2. K will have been oral
Discuss the rule: "If one has rendered (i) VALUABLE PART PERFORMANCE (ii) IN RELIANCE ON THE K, this will take the case out of the SoF and SP will be granted

Front 59

What is VALUABLE PART PERFORMANCE

Back 59

ANY TWO OF THESE:
1. Payment (in whole or part)
2. Possession
3. Valuable Improvements
MODERN TREND includes VALUABLE SERVICES

Front 60

Specific Performance Problem Areas

Back 60

1. Equitable Conversion
2. Covenant Not to Compete

Front 61

Equitable Conversion

Back 61

Where a valid land sale contract is entered into an equitable conversion occurs upon execution
RESULT: property interest of the buyer and seller are regarded as switched upon execution
(only occur between contract execution and closing)

Front 62

Equitable Conversion: Buyer has a _____ property interest

Back 62

real
(SP right to the land)

Front 63

Equitable Conversion: Seller has a ____ property interest

Back 63

personal
(SP right to money)

Front 64

Equitable Conversion: Death of Seller

Back 64

Real Property heirs get nothing
Personal Property heirs get everything (money from purchase price)

Front 65

Equitable Conversion: Damage/Destruction

Back 65

Majority Rule: Risk is on the buyer (unless loss brought about by the seller's negligence)
Modern Trend: Risk on seller (unless at time of loss buyer has legal title or possession)

Front 66

Covenant Not to Compete

Back 66

Two part test:
1. Covenant must protect a legitimate interest of the person in whose favor it runs. This means the services must be unique.
2. The covenant must be reasonable both in its GEOGRAPHICAL & DURATIONAL scope

Front 67

RESCISSION
Definition

Back 67

the original K is considered voidable and rescinded

Front 68

Rescission
Two step analysis

Back 68

GOOD DOG
1. Determine if there are GROUNDS for rescission
2. Determine if there are valid DEFENSES

Front 69

Rescission
Determine if there are grounds for rescission

Back 69

1. Mistake
2. Misrepresentation
3. Coercion
4. Undue influence
5. Lack of capacity
6. failure of consideration
7. illegality

Front 70

Rescission
Determine if there are grounds for rescission
Types of MISTAKE

Back 70

Mutual Mistake
Unilateral Mistake

Front 71

Mutual Mistake

Back 71

Material Fact: Rescission GRANTED
Collateral Fact (going to quality, desirability, of fitness for a particular purpose): Rescission DENIED

Front 72

Unilateral Mistake

Back 72

Rescission DENIED
EXCEPTIONS:
If the non-mistaken party knows or should have known of the mistake
MODERN TREND EXCEPTION: mistaken party would suffer undue hardship if no rescission

Front 73

Misrepresentation

Back 73

Rescission Granted:
P must show that they actually relied on the misrepresentation

Front 74

Rescission
Determine if there are valid DEFENSES

Back 74

Unclean Hands
Laches
NEGLIGENCE DOES NOT WORK (it's not a good defense)

Front 75

Availability of Restitution

Back 75

If a P is entitled to rescission has previously rendered performance on the contract (e.g., performance of services, advance on purchase price), he can get compensated for it or get the property back via RESTITUTION

Front 76

REFORMATION
Definition

Back 76

Changes written agreement to conform wit the parties' original understanding

Front 77

REFORMATION
3-step analysis

Back 77

VERY GOOD DOG
1. Determine if there is a VALID CONTRACT
2.Determine if there are GROUNDS for the reformation
3. Determine if there are valid DEFENSES

Front 78

2. Grounds for reformation

Back 78

1. MISTAKE
(i) Mutual: Reformation GRANTED
(ii) Unilateral: Reformation DENIED unless nonmistaken party KNOWS of the mistake
2. MISREPRESENTATION: Reformation GRANTED
(i) available for both innocent and intentional misrepresentations. Rewriting reflects expressed intent of the parties

Front 79

3. Determine if there are valid DEFENSES

Back 79

1. Unclean Hands
2. Laches
Non-defenses:
a. negligence of P
b. SoF
c. Parole Evidence Rule
REFORMATION is not allowed were it would adversely affect the rights of a subsequent BFP

Front 80

CONSTRUCTIVE TRUST

Back 80

Imposed on improperly acquired property to which defendant now has title. D serves as "trustee" and must return the property to P

Front 81

EQUITABLE LIEN

Back 81

Imposed on improperly acquired property to which defendant has title. Property will be subject to an immediate court ordered sale. The monies received go back to the P. If the proceeds are less than the FMV of the property when it was taken, a DEFICIENCY JUDGMENT will issue for the difference and can be used against D's other assets

Front 82

Constructive Trust and Equitable liens only apply where D has _____ to the property

Back 82

title

Front 83

Four Rules for Constructive Trust or Equitable Lien

Back 83

1. Inadequate legal remedy alternative
(i) Basic alternative is money damages
(ii) inadequate b/c defendant is insolvent, or for Constructive Trusts, the property is unique
2. Tracing is allowed
3. BFP prevails over plaintiff
4. P will prevail over unsecured creditors (but Def. Judg. has = footing with unsecured creditors)

Front 84

Choice of Remedy between Constructive Trust or Equitable Lien

Back 84

1. If prop value up, go with constructive trust
2. If prop value down, go with equitable lien
3. If prop can't be traced solely to P's property, only equitable lien available