Fl Equity & Remedies

Front 1

Steps in evaluating remedies

Back 1

Identify substantive area of law (K or Tort – may be both since tort (fraud) allows punitive).

Identify breach of K or duty.

Identify what remedies require discussion, in this order:
1. Legal (damages)
2. Restitution
3. Equitable (specific performance)

Front 2

Equitable Remedies: Inadequacy of money damages

Back 2

Equity acts only where there is no adequate remedy at law. Inadequacy:
1. Subject matter of the litigation is unique
2. Damages are speculative and uncertain
3. Multiple and successive suits would have to be brought to get relief at law
4. Irreparable harm from D’s conduct that cannot be fully compensated by a money judgment
5. Damages are not available because D is insolvent

Merger of law and equity = court has the discretionary power to grant both legal and equitable remedies ($$ damages for past misconduct and injunction for future.)

Front 3

Enforcement of Equity Decrees

Back 3

In order for equity to take jurisdiction:

1. Court must have power to force compliance
2. Court must be able to determine whether there has been proper compliance (EX: no application of taste or aesthetics)

Front 4

Legal remedies

Back 4

Damages:

1. Compensatory
2. Nominal
3. Punitive

Front 5

Restitutionary remedies

Back 5

Goal is to avoid unjust enrichment.

Legal (evaluate first):
1. Restitutionary damages
2. Replevin
3. Ejectment

Equitable:
1. Constructive trusts
2. Equitable lien

Front 6

Compensatory damages

Back 6

Put injured party in position he would have been in had the injury/breach not occurred (expectation damages).

Requirements:
1. Causation: "but for"
2. Foreseeability of injury at time of tortious act / time of K formation
3. Certainty: Damages can’t be too speculative. Proof; more likely to happen than not; historical record (old vs new business).
4. Unavoidability (reasonable steps to mitigate).

K price minus what P actually got.

Front 7

Consequential damages

Back 7

Available for related but unusual damages reasonably foreseeable at time of K formation.

Front 8

Nominal damages

Back 8

Plaintiff has no actual injuries to compensate.

Establishes or vindicates plaintiff’s rights.

Front 9

Punitive damages

Back 9

Punishes defendant. N/A in K, but even in K there may be the tort of fraud.

Requirements:
1. Plaintiff must have been awarded compensatory, nominal or restitutionary damages.
2. Defendant’s fault must be greater than mere negligence. Look for willful, wanton or malicious conduct.
3. The more wrongful the conduct, the greater the damages
4. Damages generally relatively proportional to actual damages.

Front 10

Liquidated damages

Back 10

1. Damages must be very difficult to ascertain at time of formation;

2. The stated amount is a reasonable forecast of what the damages would be.

Otherwise, the damages are a "penalty", and not allowed. Clause which provides that one can get either actual damages, or liquidated damages is invalid. If liquidated damages are denied, compensatory damages are available.

Front 11

Restitutionary Damages

Back 11

Legal remedy, to prevent "unjust enrichment" of D. Based on value of the benefit to D (versus compensatory, which focus on injury to P), whether or not D actually benefits. Not capped by K amount.
EX: P has rendered performance to D, but K has fallen through (unenforceable).

Plaintiff can’t be awarded both compensatory and restitutionary damages, but must write about both. Plaintiff must elect between the two (largest amount).

When P is breaching party, CL said no recovery; ML says recovery ok but reduced by D’s damages.

Front 12

Replevin

Back 12

Legal remedy for recovering possession of specific personal property. Usually coupled with compensatory or restitutionary damages (for lost use).

P must have a right to possession; and there is a wrongful withholding by D. P can recover the chattel before trial if:
1. Preliminary judicial hearing
2. P must post bond
3. D can defeat recovery by posting redelivery bond
4. Sheriff repossesses the chattel

P can get property back under K if property is unique or D is insolvent.

Front 13

Ejectment

Back 13

Legal remedy. P recovers possession of specific legal property, usually coupled with compensatory or restitutionary damages for loss of use.

1. P has right to possession
2. Wrongful withholding by D: Possession (adverse or holdover tenant).
3. Sheriff ejects

Front 14

Equitable Remedies: Steps and Analysis

Back 14

1. General requirements for equitable relief are satisfied
a. legal remedy is inadequate
b. equitable relief is feasible

2. Are any specific requirements for the particular remedy satisfied?
a. Injunction
b. SP
c. Rescission and reformation

3. Any defenses which would prevent equitable relief?
a. Unclean hands
b. Laches (time bar)
c. Impossibility or undue hardship
d. Freedom of speech

Front 15

Constructive Trust: Definition, General Principles, & Defenses

Back 15

Equitable remedy to prevent unjust enrichment when a wrongdoer has gained title to property through misappropriation. D serves as trustee and must convey the property to P to prevent unjust enrichment. Also applies to property that was purchased solely with the proceeds of the misappropriated property.

If money is the subject matter, it must be traceable.

Defenses: Equitable defenses apply; P loses to BFP to whom title has transferred.

Front 16

Constructive Trust: Requirements

Back 16

Requirements:

1. Title held by D
2. Unjust enrichment
3. Inadequacy of legal remedy
4. Confidential or fiduciary relationship must exist

Front 17

Constructive Trust: Advantages over Restitution

Back 17

Advantages over Restitution at law:

(1) If D is insolvent, P has advantage over simple creditors (because he is recovering his own property) and

(2) If the res has increased in value, P will get the advantage of the increase.

Front 18

Constructive Trust: Gifts

Back 18

Gifts: Often sought under suspicious circumstances – If donee is in a position to exert undue influence or has a fiduciary relationship with the donor, the donee has the burden of proving that the gift was freely given… otherwise, party seeking to set the gift aside has burden of proving an impropriety.

Mere family relationship usually insufficient.

Front 19

Equitable Lien: Definition and Defenses

Back 19

Imposed on improperly acquired property to which D has *title* - to secure payment of money to P because D misappropriated P’s money or property, so a remedy needed to prevent unjust enrichment.

Property subject to immediate court-directed sale. Monies received go to P. If the proceeds < FMV when it was taken, deficiency judgment will issue for difference and can be used against D’s other property.

Like a constructive trust, P has priority over creditors, but P loses to BFP.

Defenses: Equitable defenses and transfer to a BFP.

Front 20

Equitable Lien: Requirements

Back 20

Requirements:
1. D misappropriated P’s money or property under circumstance creating a debt or obligation to pay;
2. P’s property can be traced to property owned by D; and
3. Retention of the property by D would result in the unjust enrichment of D

Split of authority as to whether inadequacy of legal remedy is required, but insolvency usually suffices.

Front 21

Equitable Lien: Miscellaneous Notes

Back 21

Like a CT, it applies to property related to proceeds of misappropriated property. Unlike a CT, no requirement that trust property be purchased solely with the proceeds – commingled funds or property that was merely improved with the proceeds are ok.

If value has gone up, CT is the better option. If decreased in value, P is better off suing for the full amount of the misappropriation and getting an equitable lien imposed on the property for whatever value it has.

Front 22

Requirements for constructive trusts and equitable liens

Back 22

1. Legal remedy is inadequate: D is insolvent, or in the case of constructive trust, property is unique.

2. Tracing of funds is allowed.

3. BFP’s prevail over P.

4. P’s prevail over unsecured creditors.

Front 23

Constructive Trust vs. Equitable Lien

Back 23

If property value goes up after taking, use constructive trust.

If property value goes down after taking, use equitable lien.

If property can’t be traced solely to P’s property, only an equitable lien is available (i.e. commingled bank account – lien limited to lowest acct balance).

Front 24

Equitable Mortgage

Back 24

Judge-made mortgage impressed against a deed absolute.

Used when a debtor gives a deed absolute to his creditor solely to secure an obligation, and the creditor refuse to recognize the security nature of the interest (may refuse to reconvey upon satisfaction of the debt).

Front 25

Temporary Restraining Order

Back 25

Issued ex parte pending hearing to determine whether temporary injunctions should be issued.

Balance irreparable injury; likelihood of success; immediate need.

Notice not required, but should try to give some notice; no adversarial proceeding required. Expires after 10 days.

Front 26

Temporary / Preliminary Injunction

Back 26

Temporary (preliminary/interlocutory) – Issued pending full trial on merits, if moving party shows:
1. Irreparable injury while waiting for full trial on merits requires immediate relief. "Preserves status quo" between parties until trial is finished. Balance hardships of parties –the harm to P must heavily outweigh the harm that D would suffer if not granted; also must show that granting the injunction will not disserve the public interest.
2. P must show likelihood of success. Court should impose bond on P to reimburse D if P does not succeed. Bond amount doesn’t limit D’s recovery.
3. Notice to adverse party (Note: Person enjoined can only be held in contempt for violating an ex parte order only if the violation occurs after the person learns of the order.)
4. Bond requirement

Misc.: In effect until further order of court; Enjoined party may move at any time to dissolve or modify and motion must be heard within 5 days after application for hearing on the motion.

Front 27

Permanent Injuction

Back 27

Issued after trial on merits. Evaluation:
1. Inadequate legal remedy alternative (repevin – sheriff refuses to recover; ejectment; money damages too speculative, no injury, insolvent D, irreparable injury, unique property, equitable remedy superior); avoiding multiplicity of actions – prior history of litigation on this action between these parties.
2. Protectable interest requirement: CL required property right; ML requires any legitimate protectable interest.
3. Feasibility of enforcement:
a. Negative injunction requires D to stop act
b. Mandatory injunction require D to perform an act (may be a problem if difficulty to supervise or concern w/ensuring compliance – denied if subjective judgment required, series of acts over period of time, out-of-state act required of nonresident defendant).
4. Balancing P’s benefit vs. D’s hardship. Disparity in hardship must be gross, but even then money damages awarded. N/A if D’s conduct was willful/intentional. Discuss public’s hardship, esp. in case of nuisance and trespass to land.
5. Defenses

Front 28

Injunctions: Normally Available

Back 28

Normally available when:

1. Continuous trespass to land
2. Conversion of a unique chattel
3. To prevent the continuation of a wrongfully instituted suit

Front 29

Injunctions: Sometimes Available

Back 29

Sometimes available:

1. To eliminate a nuisance (not public)
2. To prevent waste (not ameliorative)
3. To prevent enforcement of a fraudulently obtained judgment
4. Inducing breach of K and/or refusal to deal
5. Use of competitor’s trade secrets
6. Trademark and/or trade name infringement
7. Right to imitate/product simulation
8. Copyright and patent infringement

Front 30

Injunctions: Usually Unavailable

Back 30

Normally not available:

1. Defamation
2. Commercial defamation / trade libel
3. Publication of private facts
4. Pending criminal proceedings (but maybe threatened criminal proceedings only under extraordinary circumstances)

Front 31

Injunctive relief: To prevent enforcement of a fraudulently obtained judgment

Back 31

Provided it was obtained by extrinsic fraud (bribing judge/juror, threatened witness) but not if obtained by intrinsic fraud (perjury, forgery – Why?: You should have brought it up at trial)

Front 32

Equitable Remedy Defenses

Back 32

1. Unclean hands: P’s alleged improper conduct related to lawsuit.
2. Laches (delay less than SOL, but sometimes can be more – look to facts of each case): Clock starts running when P knows of injury/that right has been infringed; right to relief cut off when lapse is both unreasonable and prejudicial to D. If laches applies, consider awarding P money damages – Excuses for delay include: concealment, fraud, or inequitable conduct by D or reasonable lack of awareness of the facts giving rise to relief..
3. Impossibility of performance
4. Hardship: Unconscionable K; grossly inadequate consideration @ formation.
5. Free speech (defamation or privacy publication)

Front 33

Laches

Back 33

Defense of laches is available where P has delayed bringing suit if:
1. The delay is unreasonable, based upon when P obtained knowledge of the wrong, and
2. The delay s prejudicial to D

2 types of prejudice that may be shown:
1. Defense prejudice – lost records, witness is dead, etc.
2. Economic prejudice – relied, spent $$, hired another

P may still seek a legal remedy; P who is denied SP because of laches may still seek K damages. Prejudice will normally be presumed by court if party seeks equitable relief after applicable statute of limitations.

Front 34

Injunctive Issues: Crimes vs. Torts

Back 34

Crimes won’t be enjoined, but torts will be (Notes: #1 – On exam most crimes are also torts, so they may be enjoined in the same manner as any other form of tortious conduct. #2 – FL has a statute providing for injunctive relief in theft crimes (to get property back).

Front 35

Injunctive Issues: Who?

Back 35

Only D, his agents/employees with notice, and others acting in concert with D and with notice will be bound by an injunction.

Front 36

Injunctive Issues: Erroneous Injunctions

Back 36

Erroneous injunction: D is bound, and must go to court to have it modified or dissolved.

Front 37

Injunctive Issues: Contempt

Back 37

Contempt: Punishment for disobeying court order.

1. Civil: Money damages; imprisonment until D willing to comply.
2. Criminal: Fine; imprisonment for set amount of time.

No contempt for failure to comply with money judgment.

Front 38

Injunctive Relief: Unavailable

Back 38

Injunctive relief involving political rights generally will not be granted. Also, injunctive relief usually not available for defamation, commercial defamation/trade libel, publication of private facts, pending criminal proceedings.

Front 39

Contempt

Back 39

The method by which the courts enforce equitable orders.

To be held in contempt, D must have disobeyed a specifically detailed, unequivocal judicial command, and must have had the ability to obey the command.

Front 40

Contempt: Civil

Back 40

Instituted by a private party, as part of an underlying action, in order to:

(1) compensate P for damages caused by D’s disobedience of court order (compensatory civil contempt) or

(2) compel D’s compliance with order to prevent further losses (coercive civil contempt – fines, jail)

Front 41

Contempt: Criminal

Back 41

Brought by the government to punish errant behavior. Its purpose is to uphold the dignity of the court. Classified as either:

(1) Direct – occurs in the presence of the court (judge may punish summarily, without const. protections such as a hearing or attorney) or

(2) Indirect – outside the presence of the court (need production of evidence to prove it occurred – D must be given notice, right to be heard)

Front 42

Injunction Mnemonic

Back 42

"I Put Five Bucks Down"

1. Inadequate legal remedy
2. Protectable property right (CL) / interest (ML)
3. Feasibility of enforcement
4. Balancing of hardships
5. Defenses: Unclean hands related to lawsuit, laches.

Front 43

Personal Property Torts – destruction or dispossession of property

Back 43

1. Destroyed property: FMV at time of loss. No loss-of-use unless income producing.
2. Damaged property: Reduced value; or cost of repair plus loss of use (rental car).
3. Dispossessed property
4. Conversion (major): P may accept chattel back, or take FMV at time of dispossession. Except: Highest of fluctuating value; if dispossession is willful and chattel is improved then increased value; if D refuses P’s demand for return and destroys property then P may select time of conversion, demand or disposition.
5. Minor dispossession: Nominal damages; or loss of use. Also consider restitution if D benefits, replevin, mandatory injunction (unique), constructive trust/equitable lien, self-help.

Front 44

Real Property Torts: Trespass

Back 44

Trespass: Nominal damages; restitution of D benefits. Injunction for repetitive and ongoing trespass (avoids multiplicity of actions).

Front 45

Real Property Torts: Destruction & Damages

Back 45

Destruction/Damage: Damages measured at time of destruction, cost of repair, loss of use, diminution in value.

Plants: Diminution in value of land + conversion of plant. Injunction for ongoing tort.

Front 46

Real Property Torts: Dispossession

Back 46

Dispossession: Rental value for period of occupation; or restitution if benefit conferred. Ejectment/replevin. No injunction available b/c adequate legal remedy available (ejection).

Front 47

Real Property Torts: Encroachment

Back 47

Encroachment: Rental value for continuing trespass; FMV for permanent trespass. No restitution available. Injunction if ejectment and other legal remedies are not available.

Front 48

Nuisance

Back 48

Lost rental value or profits; cost to remedy; award for discomfort or annoyance. Permanent nuisance (balance of hardships doesn’t make it worth abating nuisance): Diminution of value; and costs to reduce nuisance to P if not already done; damages for past invasions. No restitution. Injunction available. Balance the hardships.

Front 49

Waste

Back 49

Voluntary : Diminution in value, cost of repairs, injunction.

Permissive: Cost of repairs.

Ameliorative: No remedies.

Front 50

Personal Injury

Back 50

Damages: Special (must be sufficiently certain) vs. general (pain and suffering – no certainty needed). P must take reasonable steps to mitigate damages.

Installment payments are not allowed – lump sum only. Award must be discounted to present value, and inflation is not a factor (is under modern view).

Front 51

Specific Performance of K: Requirements

Back 51

K exists and is valid, and material terms must be certain and definite, consideration exists

1. Existing, valid contract
2. Conditions of P satisfied
3. Inadequate legal remedy
4. Mutuality of remedy
5. No defenses available to D

Front 52

SP: Conditions of P

Back 52

Conditions of P must be satisfied – P is ready, willing, and able to perform (land sale K: nonconforming land, or time is of the essence)

Front 53

SP: Inadequate legal remedy

Back 53

Inadequate legal remedy: Speculative, insolvent, multiple suits, unique subject matter at time of litigation (land always unique - even seller can get SP; personal property not unique & money damages adequate, unless very rare or personal significance).

Liquidated damages clause doesn’t make legal remedy adequate unless clause states it is the sole remedy.

Front 54

SP: Mutuality of remedy

Back 54

Mutuality of remedy: P shouldn’t be able to enforce K against D if D can’t enforce against P (b/c P is 17yo). Court will grant SP if both parties are capable of performing and the court can sufficiently secure P’s counter-performance. Courts can easily assure counter-performance by requiring by simply requiring simultaneous performance.

• Negative Mutuality: P should not enforce because D could not enforce
• Affirmative: P should enforce because D could enforce.

Front 55

SP: No defenses available to D

Back 55

No defenses available to D:
1. Unclean hands, laches,
2. Unconscionability at time of K formation (not b/c changed circumstances).

K defenses:
1. Mistake,
2. Misrepresentation of material factor (or concealment of if confidential relationship exists – overlap w/ unclean hands too),
3. SOF (or part performance w/ oral K – requires 2 of: Payment, Possession, Valuable improvements)

Front 56

SP: Seller of land can’t deliver the land

Back 56

If seller is P: Can enforce K if defect is minor; court will "abate" purchase price. Cannot enforce if defect is major, unless seller can cure before closing.

If seller is D (buyer is P): Buyer can enforce K even if defect is major; court will abate purchase price. Cannot enforce K if defect is very major (i.e. half the house is missing).

Front 57

Land Sale: "Time is of the essence" fact patterns

Back 57

Land sale K w/express "time is of the essence" clause and forfeiture clause (i.e., if buyer doesn’t make a payment, seller keeps land and all payments made) – this condition requires full performance by a specified date. Because this is an equitable remedy, the court has the ability to balance hardships. Equity abhors forfeitures, so court will look at these factors: Loss to seller is small, breach is minimal, waiver by seller, undue hardship to buyer.
Usually, the court will grant specific performance but deny forfeiture. Even if specific performance not granted, modern trend is to give restitutionary relief (unjust enrichment).

Equity court may choose to ignore strict enforcement of this type of clause if:
1. Tardiness is de minimus (3 minutes late)
2. Loss to other party is slight
3. Undue hardship to forfeiting party
4. Equity goes out of its way to find a waiver

Front 58

SOF/Part Performance re: land

Back 58

When a land sale K is oral, "valuable part performance in reliance on K" will take the K out of the SOF and specific performance will be granted.

Requires two of the following:
* Payment (whole or part)
* Possession
* Valuable improvements

Front 59

Contract SP Mnemonic

Back 59

"Cooking Could Inflate My Duff"

1. Contract must be valid
2. Conditions of P must be satisfied
3. Inadequate legal remedy
4. Mutuality of remedy
5. Defenses

Front 60

Recission

Back 60

Original K is void, and rescinded – as though K had never been made. May be legal (by action of the parties) or equitable (by court decree). Usually coupled with restitution of benefits conferred.

1. Grounds for rescission (must have occurred before or at the time the K is entered into):
a) Mistake: Mutual mistake of material fact is grounds for rescission; collateral fact not grounds (quality, desirability, fitness of property). Unilateral mistake not grounds unless non-mistaken party should have known of the mistake or if mistaken party would suffer undue hardship.
b) Misrepresentation: Fact or Law; material factor; Innocent misrepresentation requires reasonable reliance by party seeking rescission; intentional (fraudulent) misrepresentation require actual reliance.
c) Also: duress, undue influence, illegality, capacity, failure of consideration.

2. Defenses: General equitable defenses. Negligence of P is not a defense. If P sues for damages first, can’t later sue for rescission because P has affirmed the K by suing for damages. Can sue for rescission first, or both at same time.

If P is entitled to rescission and has paid money over to D, he is entitled to restitution to recover any value exchanged prior to rescission.

Front 61

Reformation: Definition & Requirements

Back 61

Changes written K to conform with the parties’ original intent. Requirements:
1. Valid K (Compare: in rescission, there is no valid original K)
2. Grounds for reformation: No mutual assent; mutual mistake of material fact; unilateral mistake coupled with fraud (one party actually knew of mistake – “should have known” does not apply); misrepresentation
3. Defenses: Unclean hands, laches, BFP for value without notice. Not: Negligence of P, SOF, PER. Can’t adversely affect BFP.

Front 62

Reformation: Gifts - Donor & Donee

Back 62

Gifts – Donor: Reformation allowed for mistake of law or fact, where an instrument conveying a gift fails to express the true intention of the donor, unless donee has relied to his detriment on the gift as
conveyed.

Gifts – Donee: may not have gift instrument reformed, unless he has detrimentally relied upon the original intent of the donor that was not expressed in the gift instrument.

Front 63

Real Property Sale K: Seller’s breach and buyer’s breach

Back 63

Benefit of bargain/expectation:
1. Seller breach: Recover out of pocket losses; or difference between K price and appreciated FMV (depends on jurisdiction).
2. Buyer’s breach: Benefit of bargain - Difference between K and depreciated FMV.

Restitution: Fraud or material breach gives restitution of benefits conferred.

Specific performance: Land is unique; both buyer and seller can get SP. If land is out of state, must have PJ over seller (when land is in state court has in rem PJ).

Front 64

Equitable Conversion: Definition & Requirements

Back 64

If a K to sell real estate is entitled to SP the doctrine of equitable conversion takes effect. Need specifically enforceable land sale K.
Property interests of buyer/seller have been switched: Buyer is equitable owner of property, and seller is equitable owner of proceeds. Applies after execution but before closing.

Risk of loss on buyer/vendee after execution, before closing (FL), unless loss has occurred due to vendor’s negligence. Modern trend puts risk of loss on seller unless buyer has possession. Whoever has risk of loss should get benefit of insurance proceeds.

Option K – equitable conversion occurs when option is exercised.

Front 65

Equitable Conversion: Death & Wills

Back 65

Directed to sell in will: EC takes place upon death of testator and the proceeds from the sale will go to those entitled to the personal property.

Real property passes directly to the heirs of a decedent; Personal property goes to the estate’s executor or administrator.

Death:
1. Death of vendee – has real property interest and ∴ goes to the person entitled to his real property under either his will or the laws of intestate succession. Personal rep must pay purchase price out of the general estate.
2. Death of vendor – construed as personal property and will pass to person entitled.

Front 66

SP: Enforcement in Land Contracts

Back 66

SP can be achieved by:
1. Ordering seller to convey and buyer to pay, or
2. Transferring title by court order upon payment

Feasibility:
1. Only B and property present – SP feasible: order B to pay and transfer title to land by court order
2. Only B and S present – SP feasible: property need not be in jurisdiction; parties are sufficient
3. Only S and property present – SP not feasible because the court can transfer and compel S, but can’t compel B to pay.

Front 67

Construction Contracts

Back 67

Owner’s breach: If no performance yet, damages is K price minus cost of performance (lost profits). If fully performed, damages is K price. If partially performed, K price minus costs saved.

Builder’s breach: Cost of completion, minus payments due. If defect in construction, diminution in value or cost of repairs.

Front 68

Personal Services Contracts

Back 68

Employer breach: EE can recovery money owing (restitution – reasonable value of services rendered); must discuss duty to mitigate with comparable work.

Employee breach: Employer can recover additional cost of equivalent replacement. Restitution for reasonable value of services rendered, capped at K price.

Never specifically enforceable (enforcement problem; involuntary servitude).

Front 69

SP: Negative Covenant Not to Compete - Requirements

Back 69

1. Writing required
2. Legitimate business interest required (P must show justification for restriction – EX: trade secrets, specific customers or patients, trademark, etc.)
3. Restraint must be reasonably necessary to protect interest (If overbroad, court will modify/”blue pencil” to make reasonable)
4. Rebuttable presumption regarding reasonableness of a post-term restrictive covenant
a. Employees – 6 months or less reasonable / more than 2 years unreasonable
b. Former distributor/dealer – no more than 1 year / more than 3 years
c. Seller of business interest – no more than 3 years / more than 7 years
d. Trade secrets – nor more than 5 years / more than 10 years
5. Enforced by any appropriate remedy, including temp. and perm. Injunctions – violation of enforceable RC creates a presumption of irreparable injury to P
6. Applies to covenants after July 1, 1996

Front 70

SP: Negative covenant not to compete - Generally

Back 70

Must protect a legitimate interest of person in whose favor it runs; must be reasonable in both geographical, durational, and line of business scope.

FL: Any restrictive covenant not supported by a “legitimate business interest” is void and unenforceable.

Note: Court will not consider any individualized economic or other hardship that might be caused to the person against whom enforcement is sought.

Front 71

SP: Ks to make testamentary disposition or execute mutual wills

Back 71

As long as property is unique, a constructive trust is imposed on the property in the hands of the personal representative

Will impose a constructive trust upon personal rep of the party who failed to execute a will in accordance with the contractual terms

When they relate to real property, SOF applies.

Front 72

Subrogation

Back 72

Where one person is required to (1) pay the loss sustained by another, (2) pay the obligation owed by another, or (3) discharge a lien upon the property of another, such person may succeed to and be subrogated to the rights of the victim of the loss against the person who caused it, or the creditor of the obligation, or the former holder of the lien.

May be base on agreement and K (conventional subrogation) or upon equitable principles (equitable subrogation)

Subrogation not available to volunteers.