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114 Cards in this Set

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Torts: Legal Remedies- Damages

Compensatory: Three exam tips are the 3rd requirement of Certainty
Past losses have to be established with more certainty then future

if there is a historical record that helps to provide certainty

for future damages, P must show that they are more likely to happen then not. this is the "all or nothing rule." (odds have to be better then 50/50 or recover nothing
Torts: Restitutionary Damages

Compensatory v Legal Restitutionary damages
D destroys P's car. remedy is compensatory damages (no benefit)

D manufacturing company drives trucks across P's vacant property to get to railroad reducing trip from 10 miles to one-half mile: legal restitutionary damages (benefit but no actual injury)

D steals your machine to use in business: D steals your machine to use in his business: both compensatory and restitutionary
Torts: Restitutionary Remedies

Equitable RR: When can constructive trusts and equitable remedies be used on the bar exam?
only when the fact pattern indicates that the D has title to the property
Torts: Equitable Remedies

Contrast Temporary Restraining order with typical temporary injunction
TRO: issued pending a hearing to determine whether temporary injunction should issue

Test for TRO: same two part test as for a temporary injunction

TRO proceeding can be ex parte, thus:
(i) notie not required
(ii) adversarial proceeding not required

Note: even though TRO can be issued ex-parte, if there's an opportunity to give the D notice and a chance to appear and contest the injunction, a good faith effort must be made to do so

note: TROs are limited to 10 days. must have regular temporary injunction hearing by then

note: it is very difficult to get any type of temporary injunctive relief that is mandatory in form. This is particularly true for a TRO
Torts: Equitable Remedies

Permanent Injunctive Relief: Fifth-Defenses

Laches (note on time)
laches is a "running of a period of time" defense. unlike the S/L however, which involves the mere passage of time, laches is concerned with the "effect" of the passage of time

the laches period will never be greater then the S/L time period. (no need for laches--the statute will bar the claim)
Specific Tort Fact pattern Possibilities

First set
1. has/is been been/being injured?

2. has a D derives a benefit?

3. Does the P want property returned?

4. Does P need an injunction?

Bar exam note: remember, these Qs are not mutually exclusive
Fraud

Available Remedies
1. damages

2. Constructive Trusts/Equitable Liens


Important bar exam tip: always consider if it (i) also should be analyzed as Ks case and (ii) whether punitive damages (torts) should be awarded
How to spot a remedies question
the call of the question will do one of the following three things:

Use the word "Remedies"

Use the word "Relief"

State a specific remedy
Torts: Legal Remedies- Damages

Compensatory in Personl Injury Torts: The "Certainty" rules
Economic Losses (special Damages) (e.g., medical expenses/lost earnings)
1. the basic rules apply here, i.e., calculation must be met with "sufficient" certainty

Non-Economic Losses (General Damages) (e.g., pain and suffering, permanent disfigurement)
1. the basic certainty rules DO NOT apply here.
2. the jury may award any amount it wishes subject to proper instructions
Torts: Restitutionary Damages

Bar exam tips on compensatory and restitutionary damages
write about both, give P the largest amount

puntive damages can be attached to restitutionary damages as long as the underlying cause of action is in tort
Torts: Restitutionary Remedies

Equitable RR: Rule One for Constructive Trusts and equitable liens--Inadequate Legal Remedy
basic alternative--money damages

the two reasons
1. the D is insolvent
2. for constructive trusts: the property is unique
Torts: Equitable relief

Permanent Injunctions: First-Inadequate Legal remedy alternative

Replevlin-why would it be inadequate?
the sheriff may not be able to recover it

D can file a redelivery bond (and then, e.g., run off with or destroy chattel in the interim)
Torts: Equitable relief

Permanent Injunctions: Fifth--defenses

The Three Laches rules
1. the clock starts to run when the P knows of the injury

2. the delay cuts off the right of relief when it has been both "unreasonable" and "prejudicial" to the D

3. if laches applies, consider awarding P money damages
Specific Tort Fact Pattern possibilities

Second set
1. Do the wrongs relate to the past only

2. Do the wrongs relate to the future only?

3. do the wrongs relate to both the past and the future?
How to approach a remedies question:

Step one
step one: determine what substantive area of law is involved and what specific problem is at issue with that substantive area (i.e., what tort or what type of K)

Bar Exam Tip: the fact pattern may be susceptible to more than one substantive law interpretation (e.g., torts and Ks)
Torts: Legal Remedies- Damages

Compensatory related to Personal Injury Torts: Form of Judgment Payment
the award must be a lump sump payment

installment payments are not allowed

How to Calulate:
1. award must be discounted to present value (what award can we give him now so in 20 years it will cover the $100,000)
2. inflation is not taken into account. under the modern view it is
Torts: Restitutionary Damages

Legal RD: Replevlin

definition
P recovers possession of specific personal property
Torts: Restitutionary Remedies

Equitable remedies: Rule 2 for constructive trusts and equitable liens--Tracing is allowed
Doofus sold the property for $50,000, which he put in a bank.

trace to bank account
Torts: Equitable relief

Permanent Injunctions: Inadequate legal remedies

Ejectment-why would it be inadequate?
the sheriff may refuse to act
Torts: Equitable Relief

Permanent Injunctions: Defenses

Impossibility
Impossible for the D to carry out terms of Injunction
Bar Exam Compensatory Damages Language
"P is entitled to compensatory damages to put him in the position he would have been in had this wrong not occurred. On these facts....
How to approach a Remedies Question

Step 2
Make sure that P has a case (e.g., a tort committed, a K breached)
Torts: legal Remedies-Damages

Nominal: Basic Concept
these are awarded when P has no actual injury. they serve to establish or vindicate's the P's rights
Torts: Restitutionary Damages

Legal RD: Two part test for Replevlin
P has a right to possession

there is a wrongful withholding by D
Torts: Restitutionary Remedies

Equitable RR: Rule 3 for constructive trusts and equitable liens--BFPs
BFPs prevail over P

D sold the property to L, a BFP. B wants to have a constructive trust imposed on the property. can he?

no, trace proceeds instead
Torts: Equitable Remedies

Injunctive Relief: Threshold Inquiry
determine if you're required to discuss "permanent" or "temporary" injunctive relief

permanent injunction: issued after full trial on merits

Temporary (preliminary, interlocutory) Injunction: Issued pending trial on merits

Exam Tip: if in doubt: go with permanent
Torts: equitable relief

Permanent Injunctions: First- Inadequate Legal Remedies

Money damages- why inadequate?
they're too speculative

no right to money damages b/c a tort is only "threatened," not yet committed

D is insolvent

irreparable injury

note: a loss to "unique" property (e.g., land, family heirloom) is regarded as an irreparable injury

avoiding a multiplicity of claims (bar exam Q will tell you there is a prior history of litigation between these parties

bar exam tip: if is much easier to show money damages are inadequate if P is protecting an interest in land, e.g., injunctive relief against nuisance, trespass to land
Torts: equitable relief

Permanent Injunction: Defenses

Free Speech
if the tort is a defamation or a privacy publication branch tort, your best exam answer is:

Injunction denied b/c of free speech grounds
How to Approach a remedies question

Step 3
Determine what remedies require discussion. this must be done is the following chronological order:

FIRST: Legal remedies (damages)

SECOND: Restitutionary Remedies

THIRD: Equitable remedies
Torts: Legal Remedies-Damages

Punitive: Basic Concept
These are awarded to punish the D
Torts: Restitutionary Remedy

Legal RR: bar exam tips for Remedies
most likely bar issue is timing (P can recover the chattel before the trial)

there must be some preliminary judicial hearing

P will have to post a bond

D can defeat an immediate recovery by posting a redelivery bond (D can then keep the chattel until after the trial)

note: the sheriff repossesses the property for P

bar exam tip: replevlin is almost alwats coupled with damages (compensatory or restitutionary) for lost use or benefit to the D during the time of detention)
Torts: Restitutionary Remedies

Equitable RR: Rule 4 for constructive trusts and equitable liens--unsecured creditors
P will prevail over unsecured creditors

note: to the extent you have a deficiency judgment in connection with an equitable lien, you stand on equal footing with other unsecured creditors
Torts: Equitable Relief

Permanent Injunction: Second-Property Right/Protectable Interest requirement
traditional rule: equity will grant relief only where a protectable property right is involved

today, what is a "protectable" property right is very liberally construed. any legitimate property interest will suffice

Modern trend: you don't need a property right--a protectable interest will suffice
Torts: Equitable relief

Permanent Injunction Memorizer:

"I put Five Bucks Down"
Inadequate legal remedy

Property Rights/Protectable Interest

Feasibility of enforcement

Balancing of hardships

Defenses
The Tort Remedies
The Legal Remedies: Damages

The Restitutionary remedies
1. restitutionary damages
2. replevlin
3. ejectment

Equitable Restitutionary Remedies
1. Constructive Trusts and equitable liens

The Equitable Remedies: Injunctive relief
Torts: Legal Remedies-Damages

Punitive: The Three Rules
1. in order to get puntive damages, P must first have been awarded compensatory or nominal damages

note: PD can also be attached to restitutionary damages

2. in order to get punitive damages, D's type of fault must be greater then negligence

3. generally, puntive damages are awarded in an amount relatively proportionate to actual damages (as actual damages go up, puntive damages go up)
Torts: Restitutionary Remedies

Legal RR: Definition of Ejectment
P recovers possession of specific real property
Torts

choice of remedy: Constructive trust or equitable lien?
if the property value subsequent to taking goes up, go with a constructive trust

if the property value subsequent to taking goes down, go with an equitable lien

when the D's property cannpt be traced solely to P's property, only an equitable lien is available
Torts: Equitable Relief

Permanet Injunction: Third--Feasibility of enforcement
two types of injunctions:
1. negative injunction--stop doing it
2. Mandatory injunction--perform an act

Rules
1. negative injunction: there is no enforcement problem
2. Mandatory Injunction: there may be an enforcement problem based on
(i) the difficulty of supervision or
(ii) concern with effectively ensuring compliance
Torts: Miscellaneous Injunctive relief problems

Crimes
Equity will not enjoin them (check to see if the conduct could be characterized as a tort
Torts-The Legal Remedies- Damages

definition
D is ordered to pay money to P

(i) compensatory

(ii) nominal

(iii) punitive
Torts: Restitutionary Damages

Basic Concept
these remedies are based on the theory that the D should not be "unjustly "enriched
Torts: Restitutionary Remedies

Legal RR: 2-part test for ejectment
P has right to possession

there is a wrongful witholding by D
Torts

choice of remedy: Constructive trust or equitable lien?
if the property value subsequent to taking goes up, go with a constructive trust

if the property value subsequent to taking goes down, go with an equitable lien

when the D's property cannpt be traced solely to P's property, only an equitable lien is available
Torts: equitable Remedies

Temporary Injunctive relief: 2 part test
1. establish that there is irreparable injury

exam fact discussion: facts must be discussed in a "time frame context." in short, one must show that he will incur irreparable injury while waiting for a full trial on the merits--and thats why he or she needs relief now

Note: balancing of hardships: irreparable injury is weighed against any hardship D will suffer if a temporary injunction is granted
Torts: Equitable Remedies

Permanent Injunctive relief--feasibility of enforcement

the three exam favorite "mandatory" injunction fact patterns
act involves the application of "great taste, skill, or judgment:" bar exam answer--injunction denied

a series of acts over a series of time: Bar Exam answer--injunction denied unless P's case is great

an out of state act is required
(1) resident D: Injunction granted
(2) Non-resident D: injunction denied

Bar exam tip: if a decree can be couched as "negative injunction," you should note that in your answer and eliminate the enforcement problem
Torts: miscellaneous injunctive relief problems

who will be bounf by an injunction?
Parties

employees and agents acting with notice

others acting in "concert" with notice
Personal Property Torts


The Three Basic Bar Exam Fact Patterns
One: Destroyed Property
Available remedies--compensatory damages

Two: Damaged Property--compensatory damages

Three: Disposession
(i) Compensatory damages
(ii) Restitutionary Damages (if D benefits)
(iii) Replevlin
(iv) Mandatory Injunction (if chattel is unique and damages and replevlin won't work)
(V) Constructive Trust/Equitable Liens (particularly if D is insolvent and/or "tracing" facts are involved
(vi) Self-Help (reasonable force to recapture
Torts: Legal Remedies- Damages

Compensatory: Basic Concept
These are based on the injury to the P. they put the injured party in the position he would have been in had the injury not occurred
Torts: Restitutionary Remedies

Legal RR: bar exam tips
most likely bar exam issue: ejectment is only against the D who has possession of the property

note: sheriff ejects D from property

bar exam tip: ejectment is almost always coupled with damages (compensatory or restitutionary) for lost use or benefit to D during time of wrongful withholding)
note on equitable liens
if the bank account is dissipated and the balance sinks below the P's claim, the lien is limited to the lowest account balance between the time of wrongdoing and the suit
Torts: equitable remedies

Injunctive relief: 2 part test cont
2. establish P's likelihood of success (P must establish this "probability")

Bar Exam Tip: if a temporary injunction is sought on the exam, mention that the court should impose a bond requirement on P to reimburse D if the injunction injures him and the P does not succeed
Torts: Equitable Relief

Permanent Injunction: Balancing of hardships

the 4 balancing hardship rules: P's benefit v D's hardship if relief granted
1. there must be a gross disparity between detriment and benefit

2. even then, there will be no balancing if D's conduct was wilful

bar exam tip: balancing of hardships defense is almost always a primary discussion item when the tort is nuisance or tresspass to land

3. if you decide to balance hardships, n whole or in part, consider awarding the P money damages

4. hardship to the public is also taken into account
Torts: Miscellaneous Injunctive relief problems

Erroneous Injunction
One still has to obey an erroneous injunction

therefore, what one must do is have it modified or dissolved
Real Property Torts

5 Basic Fact Patterns
One: Simple Trespass
(i) nominal damages
(ii) injunction (avoiding multiplicity of actions)

Two: Destruction/Damage of realty
(i) compensatory damages
(ii) injunction

Three: Dispossession
(i) compensatory damages
(ii) restitutionary damages
(iii) ejectment (since its available, no injunction)

Four: Encroachment
(i) compensatory damages
(ii) injunction (probably emphasize balancing of hardships) (no restitution)

Five: Nuisance
(i) Compensatory Damages
(ii) Injunction (probably emphasize balancing of hardships) (no restitution)
Torts: Legal Remedies- Damages

Compensatory: The 4 requirements
causation: this is refers to actual causation (the "but for" test)

foreseeability: this refers to foreseeability causation (the injury must have been foreseeable at the time of the tortious act

certainty: this means the damages cannot be too speculative

unavoidability: this means the P must take reasonable steps to mitigate the damages
Torts: Restitutionary Damages

"Legal" Restitutionary Damages: Basic Concept
these are based on the benefit to the D and the amount is calculated based on the value of the benefit

contrast this with compensatory damages which focus on the injury to the P
Torts: Restitutionary Remedies

Equitable RR: Constructive Trusts and equitable liens definition
1. Constructive Trust: imposed on improperly acquired property to which D has title. D serves as "trustee" and must return the property to the P

2. Equitable Lien: imposed on improperly acquired property to which D has title.

property will be subject to an immediate court directed sale

the monies received go to the P

if the proceeds of the sale are less then the fair market value of the property when it was taken, a deficiency judgment will issue for the difference and can be used against D's other assets
Torts: Equitable Remedies

Injunctive relief: definition
D is ordered (enjoined) to do or refrain from doing something
Torts: equitable remedies

Temporary Injunction Model bar answer
in issue is whether P can obtain temporary injunctive relief. to do so, P must meet a two part test:

(i) irreparable injury: discuss facts in time-frame context

(ii) likelihood of success: discuss the "probability." impose bond requirement
Torts: Equitable remedies

Permanent Injunctive Relief: Fifth--Defenses

Unclean Hands
The Bar Exam Trick fact pattern: Bad guy P fact pattern

The Rule: the "unclean hands" defense is available "only" if P's alleged improper conduct is related to the lawsuit
Torts: Miscellaenous Injunctive Relief Problems

Contempt
1. Civil Contempt (to coerce)
a. Money (fine): court may also award damages to P in its discretion
b. imprisonment: D holds the keys to the jailhouse (can get out by agreeing to comply)

1. criminal contempt (to punish)
a. Money (fine)
b. Imprisonment: can not get out of prison, remain for set amount of time

Note: constitutional safeguard apply to criminal contempt cases

Bar exam tip: there is no civil or criminal contempt for non-compliance with a money judgment (exceptions: alimony, child support)

bar exam tip: injunctive relief is almost always coupled with damages for injuries incurred in the time period prior to obtaining the injunction
Personal Injury Torts

Available remedies
1. Compensatory damages
a. economic losses/special damages (e.g., lost wages): Certainty rules apply
b. Non-economic losses/general damages (e.g., pain and suffering): Certainty rules do not apply
c. Lumps sum payment: Discounted to present value. Inflation not taken into account

2. Injunction
a. only against prospectie intentional tortious conduct
K: The legal remedies-Damages

Compensatory damages
based on injury to the P
The K remedies
The Legal Remedies
1. Damages

Legal Restitutionary remedies
1. restitutionary damages
2. replevlin
3. ejectment

equitable restitutionary remedies
1. constructive trusts and equitable liens

The equitable remedies
1. specific performance
2. rescission
3. reformation
K: The legal Remedies-Damages

The 4 requirements for compensatory damages
1. causation
2. foreseeability (tested at time of formation
3. certainty
4. unavailability (mitigation)
K: The legal remedies-Damages

Compensatory and consequential damages
consequential damages are available for related damages foreseeable at the time of formation

bar exam favorite fact pattern: the "reputation" fact pattern
K: Legal Remedies

are nominal damages allowed?
Yes
K: Legal Remedies

are puntive damages allowed?
No

bar exam tip: if D's conduct is willful, you should always try to see if you can characterize as a tort case
K: Legal Remedies

The Liquidated Damages Clause Fact Pattern
Two part test for validity
1. damages are very difficult to ascertain at time of K formation
2. This was a reasonable forcast of what they would be

bar exam trick fact pattern: Clause provides that one can get either actual damages or liquidated damages
1. Invalid provision: if you have LD clause, can't take your pick. have to go with the LD clause
K: Restitutionary Remedies

what are they for?
To prevent unjust enrichment
K: Restitutionary Remedies

what are the legal restitutionary remedies?
Restitutionary damages

Replevlin

Ejectment
K: Equitable Restitutionary Remedies

What are they?
constructive trusts

equitable liens
K:

The Basic Bar Exam Restitutionary "K" fact pattern
K fails "after" P has rendered performance (partial or complete)

Two ways this occurs on the bar exam
1. The K is unenforceable
2. The K is breached
K:

The Basic Bar Exam Restitutionary "K" fact pattern

Unenforceable Ks
the K is unenforceable due to mistake, lack of capacity, statute of frauds, illegality

The Two Qs
1. Can P get restitutionary damages for property/money given to, or services rendered for, D?
a. Yes, for the value of the benefit

2. Can P get the property back?
a. Yes, if it's unique or D is insolvent
K:

The Basic Bar Exam Restitutionary "K" fact pattern

Breached Ks: P as non-breaching party
Bar Exam threshold inquiry: Who is the P? Is he the non-breaching or breaching party?

non-Breaching party
1. P can get restitutionary damages (value of the benefit) for property/money given to or services rendered for D
note: the value of the recovery may be greater than the K rate

2. P can get the property back if it's unique or the D is insolvent
K:

Basic bar exam restitutionary "K" fact pattern

Breached Ks: P as breaching party
traditional view is that P could not recover restitutionary damages

modern view: P can (cannot be greater then the K rate and is reduced by any damages suffered by D as a result of the breach
K: The Equitable remedies

Specific Peformance five part checklist

First: K is valid
P must be able to show the K is valid

Bar Exam Note: In order to obtain specific performance, P must be able to show the K terms with more "certainty and defintness" that would be the case in an action for money damages at law
K: The Equitable Remedies

5-Part checklist:

Two: K conditions of P must be satisfied
P must be able to show his K conditions have been fulfilled (already performed, ready and able to perform, or excused from performing)
K: The Equitable Remedies

Five part checklist: Two-K conditions of P must be satisfied

Deficiencies Fact Pattern
seller cannot deliver the agreed upon
-C

Threshold Inquiry: who is the P? Is is the seller or buyer?

Seller as P
1. Can enforce the K if the defect is minor
2. cannot if major unless seller can cure defect by closing

Buyer as P
1. can enforce K even if defect is major
2. cannot enforce if very major (b/c purchase price would be lowered too much)

if you decide that SP should be granted even though defect still remains, must include sentence that court will lower purchase price (abatement)
K: The equitable Remedies

5-part checklist for SP: 2nd-K conditions of P must be satisfied

Time of the essence clause fact pattern
Buyer does not meet K condition of timely performance

The fact lineup
1. there will be a land sale K
2. the K will contain an express time of essence clause (if this is not in fact pattern, NOT at issue)
3. The clause will contain a forfeiture provision
4. there will have been partial performance (from buyer who has made payments towards the purchase price)
5. Buyer will have made a late payment (triggers time of the essence clause and its forfeiture provision. seller wants to keep land and any performance to date)
6. Buyer will bring a lawsuit for SP
K: Equitable Remedies

5 part Checklist for SP

Time of the Essence Clause fact pattern results
Note: Equitable Maxim: Equity abhors forfeitures

factors court can look at to avoid harsh result of a forfeiture
1. loss to seller is small
2. tardiness is de minimis
3. waiver (seller has accepted late payments in past)
4. Buyer would suffer undue hardship

Tip 1: On the bar exam, always award SP

Tip 2: in your answer, note that the modern trend would give P restitutionary relief if SP were not granted)

Note: all the flashcards on this subject have dealt with partially performed Ks. If buyer has done nothing yet, the time is of the essence clause will be enforced
K: The equitable Remedies

5 part checklist for SP

3rd-Inadequate Legal remedy
What is the basic alternative? Money damages

Why would they be inadequate?
1. damages are speculative
2. D is insolvent
3. Multiple suits are necessary
4. the thing bargained for is unique
K: The Equitable Remedy

5-part checklist for SP: 3rd--Inadequate Legal Remedy

the Concept and threshold inquiry
The concept: if the property is "unique," then even if P received money damages, he could not simply go out and buy it. It would not be available

Threshold inquiry: determine whether K was for the sale of real or personal property
K: The equitable Remedy

5 party checklist for SP: 3rd--Inadequate Legal remedy

Real Property
The Rule: Land is unique

The bar exam trick fact pattern: Every parcel of land will be made to look identical

The special "Seller's rule: Sellers of land can get specific performance even though all they have coming is money (i.e., the purchase price)
K: The equitable remedies

5 part checklist for SP: 3rd--Inadequate legal remedy

Personal property
General rule: personal property is not unique

Exceptions
1. One of a kind or very rare
2. personal significance to buyer
3. circumstances make chattel unique (OPEC cuts gas production)
Liquuidated Damages Clause

General Rule
A LD clause does NOT make money damages adequate. SP is still available

Exception: where the clause provides that this is to be the "sole remedy."
K: The equitable remedy

5-part checklist for SP

4th--Mutuality of Remedy
B, 17 years old, enters into a K to buy land from D, an adult. D refuses to convey, and B brings action for SP. result?

First: Determine and discuss that you have a mutuality fact pattern. This is one where D argues: "P should not be able to enforce this K against me b/c I could not enforce it against him

Second: Set out the Rule: "court will reject the mutuality argument if it feels secure that the P can and will perform

Third: Grant SP: In your answer, have the decree provide for simultaneous performance
K: The Equitable remedies

5-part test for SP

5th--defenses
Equitable defenses
1. Unclean Hands
2. Laches
3. Unconscionability
(i) more then simply a "bad deal." there must also be some "smell factor" facts that brought it about
(ii) tested at the "time of K formation"

K defenses
1. Mistake
2. Misrepresentation
3. S/F
SP memorizer
Cooking could inflate my duff

Contract Must be valid

contract conditions satisfied

Inadequate legal remedy

Mutuality of remedy

Defenses
K:

Specific Performance: two particular problem areas

One: Equitable conversion

The two basic bar exam fact patterns-Death
Who gets what? (assuming EC)

D enters into a specifically enforceable K to sell blackacre. before the closing, he dies. His will gives his real property to B, his personal property to L. who gets what?

B gets nothing
L gets purchase price
K: The equitable remedies

5-part check list for SP: 5th--Defenses

Bar exam favorite: Stature of frauds/part performance doctine problem
How do you spot the problem?
1. the K "must" involve land." it could be either a land sale K or one to make a testamentary disposition of land
2. this K will have been an oral K

Once you have spotted and set out the problem, discuss the rule

The rule: if one has rendered (i) valuable performance, (ii) in reliance on the K, this will take the case out of the S/F and SP will be granted

what is valuable performance?
(i)payment (in whole or in part)
(ii) possession
(iii) valuable improvements
(iv)valuable services (modern trend)

any two of the top three taken together
K:

SP: Two Particular Problem areas

One: Equitable Conversion
on the exam, this issue will invole a land sale K

Threshold inquiry: determine if the land sale K in your question is specifically enforceable
1. if yes, an equitable conversion has occurred
2. result: the property interests of the buyer and seller are regarded as switched

thus, the buyer will now be regarded as having the real property interest (the "specifically enforceable" right to the land) and

the seller will now be regarded as having the "personal" property interest (specifically enforceable right to the money)

Bar exam fact pattern tip: Timing of the bar exam issues
1. they occur between K execution and the closing
K:

Specific Performance: two particular problem areas

One: Equitable conversion

The two basic bar exam fact patterns-Damage/Destruction
Risk of Loss (assuming EC)

Majority Rule: the risk is on the buyer (exception: loss is brought about by the seller's negligence)

Modern trend: the risk is on the seller (exception: at the time of the loss the buyer has either legal title or possession)

right to insurance proceeds: whoever has the risk of loss should get insurance. Remember, if the buyer has the risk of loss and proceeds go to seller, buyer can get them using the constructive trust theory
SP: Two particular problem areas

Employment K enforceability
Rule: they are not specifically enforceable

reasons:
1. Enforcement problem
2. Involuntary servitude
SP: Two Particular Problem areas

Employment K enforceability

Negative covenants
the covenant must protect a legitimate interest of the person in whose favor it runs. for this to be the case, the services must be unique

the covenant must be reasonable in both its geographical and durational scope
K: The equitable Remedies

Rescission

defintion
the original K is considered voidable and rescinded
K: The equitable remedies

2-part Rescission test

The grounds
Grounds: (i) mistake, (ii) misrepresentation, (iii)Coercion, (IV) Undue influence, (V)failure of -C, (Vii) illegality

all these relate to K formation
K: Equitable Remedies

2 part Rescission test

Part One: Mistake
Mutal Mistake
1. Material Fact: Rescission granted
2. Collateral fact (going to quality, desirability, or fitness of property for a particular purpose): Rescission denied

Unilateral mistake
General Rule: Rescission denied
Exception: the non-mistaken party knows or should know of the mistake

modern trend exception: the mistaken party would suffer undue hardship if there is no rescission
K: Equitable Remedies

two part test for rescission

Mistake continued (Mispresentation)
in order to get rescission based on misrepresentation grounds, the P must show that they have "properly relied"
upon the misrepresentation

The "Proper" Reliance tests
1. Innocent Misrepresentations: reasonable reliace by P

2. Intentional Misrepresentations: only requires "actual" reliance
K: Equitable Remedies

two part test for rescission

second step: determine if there are valid defenses
1. unclean hands
2. laches

non-defense
a. negligence of P is not a good defense
K: Equitable Remedies

two part test for rescission

second step: determine if there are valid defenses

Three specific Items
One: Election of remedies
1. P sues for Damages "first": Rescission is not allowed. this is regarded as an affirmance of the K
2. P sues for rescission first: Damages are allowed

note: P can sue for both at the same time, but must elect preferred remedy before judgment

Two: availability of restitution
1. if a P who is entitled to restitution has previously rendered performance on the K, he can get compensated for it or get property back via restitution

Three: Legal Restitution (not tested yet)
1. P accomplishes this by his own actions
2. First step: P gives notice and tenders back and -C received
3. Second step: P then sues for restitution for anything given to D
SP: The equitable Remedies

Reformation

definition:
changes written agreement to conform with the partie's original understanding
K: equitable remedies

Reformation

Three step analysis-Step One
determine if there is a valid K
K: equitable remedies

Reformation

Three step analysis-Step two
Determine if there are grounds for reformation

1. Mistake
a. mutual mistake: Reformation granted
b. Unilateral Mistake: reformation denied
exception: where the non-mistaken party knew (not should have known. this is fraud or inequitable conduct

2. Misrepresentation: reformation granted. this is available for both innocent and intentional misrepresentations. Rewriting reflects expressed intent of the parties
K: equitable remedies

Reformation

Three step analysis-Step three
Determine if there are valid defenses

1. unclean hands
2. S/F
3. parol Evidence Rule

bar exam note: Subsequent BFP: reformation is not allowed where it would adversely affect the rights of a subsequent bona fide purchaser
Rescission Memorizer
Good dog

1. grounds for rescission
2. defenses
Reformation Memorizer
Very Good Dog

1. Valid K
2. grounds for reformation
3. defenses
Specific K fact patterns for exam
1. has P been injured
2. has D received a benefit
3. does P want the property returned
4. does P want the K performed
5. does P want the K ripped up
6. does P want the K re-written
K:

Compensatory damages language for bar exam
"P is entitled to compensatory damages to put him in the position he would have been in had this wrong not occurred. On these facts....

threshold inquiry analysis for CD:
1. Ask: which party to the K committed the breach and how did they do it?
Personal Property Sale Ks Cheat Sheet
Available remedies
1. compensatory damages
a. seller's breach
b. Buyer's breach

2. Restitution
a. favorites: unenforceable, breached Ks

3. SP: property not unique, subject to exceptions

4. Rescission

5. Restitution
Real Property Sale C cheat sheet
Available remedies
1. compensatory damages
a. seller's breach
b. buyer's breach

2. restitution
a. favorites: unenforceable/breached Ks

3. SP: remember
a. land is unique
b. both buyer and seller can get SP
c. Favorites
(i) deficiencies/Time of essence clauses
(ii) equitable conversion fact patterns

5. Rescission
6. Reformation
Construction Ks cheat sheet
Available remdies

1. compensatory damages
a. owner's breach (does not pay)
b. builder's breach (non-completion)

2. restitution
a. only builder for work done--unless owner pre-paid

3. SP: only owner: but very difficult b/c of enforcement problems
Personal Service Ks cheat sheet
Available remedies

1. Compensatory damages
a. employer's breach (wrongfully terminates)
b. employee's breach (wrongfully quits)

2. restitution
a. only employee for services rendered--unless employer prepaid

3. SP
a. No: Employment K
b. Yes: valid covenant not to compete