Remedies

Front 1

How to Spot a Remedies Question

Back 1

1. The call of the question line

- “remedies”

- “relief”

- State a specific remedy

2. Most relevant areas are torts and contracts and related property areas

Front 2

How to Approach a Remedies Question

Back 2

1. Determine what substantive area of law is involved

- What specific type of problem is at issue with that substantive area

2. Make sure that plaintiff has a case, e.g. a tort committed, a contract breached

3. Determine what remedies require discussion

- Discuss in this order because you cannot get equitable remedy if legal remedy is available and adequate

i. Legal Remedies

ii. Restitutionary Remedies (Legal/Equitable)

iii. Equitable Remedies

Front 3

Available Tort Remedies (Short)

Back 3

1. Legal: Damages
i. Compensatory
ii. Nominal
iii. Punitive

2. Restitutionary

i. Legal
- Restitutionary Damages
- Replevin
- Ejectment

ii. Equitable
- Constructive Trust
- Equitable Lien

3. Equitable: Injunctive Relief

Front 4

Compensatory Damages (basic definition)

Back 4

Put injured party in the position he would have been in had the injury not occurred

Front 5

Compensatory Damages (four requirements)

$$$$$

Back 5

1. Causation (but for test)

2. Foreseeability (proximate causation)

3. Certainty (damages cannot be too speculative)

4. Unavoidability (REASONABLE STEPS to mitigate)

Front 6

Certainty (compensatory damages in tort)

Back 6

1. Damages cannot be too speculative

i. Past losses have to be established with more certainty than future losses

ii. Historical records help to provide certainty (i.e. old v. new business)

iii. For future damages, plaintiff must show that they are more likely to happen than not. (ALL OR NOTHING)

2. Personal Injury Torts

i. Economic Losses (Special Damages)

- Basic certainty rules apply

- Medical expenses, lost earnings, etc.

ii. Non-economic Losses (General Damages)

- Basic certainty rules do not apply. Jury may award any amount it wishes

- Pain and suffering, etc.

Front 7

Personal Injury Form of Judgment Payment

Back 7

Award must be a single lump sum payment, discounted to present value. Inflation is not taken into account.

Front 8

Nominal Damages

Back 8

Awarded where plaintiff has no actual injury. Serves to establish or vindicate the plaintiff’s rights

Front 9

Punitive Damages

Back 9

Awarded to punish the defendant

1. Plaintiff must first have been awarded compensatory or nominal damages

- Punitive damages can also be attached to restitutionary damages if underlying cause of action is a tort

2. Defendant’s type of fault must be greater than negligence

3. Generally, punitive damages are awarded in an amount relatively proportionate to actual damages.

- Single-digit multiple of actual damages unless conduct facts are extreme

Front 10

Restitutionary (basic definition)

Back 10

Based on the theory that defendant should not be UNJUSTLY ENRICHED.

Front 11

Restitutionary Damages (aka Quasi-Contract)

Back 11

- Legal

- Based on the benefit to the defendant. Amount is calculated based on value of the benefit.

- Cannot award both compensatory and restitutionary damages.

- Argue both if both apply, and give plaintiff the larger amount

Front 12

Replevin

Back 12

1. Plaintiff recovers possession of specific personal property (restitutionary, legal)

- Defendant does not have title

2. Two Part Test

i. Plaintiff has right to possession

ii. Wrongful withholding by defendant

3. Timing ( Plaintiff can recover the chattel before the trial)

i. Plaintiff must post a bond

- Damages to defendant is replevin was in error

ii. Defendant can defeat an immediate recovery by posting a redelivery bond

- Defendant can then keep the chattel until after the trial

iii. Sheriff repossesses the property for plaintiff

4. Replevin is almost always coupled with damages for loss of use or benefit to defendant during the time of detention

Front 13

Defect in Purchase Price

Back 13

Abatement(lower) in the purchase price when specific performance

Front 14

Ejectment

Back 14

1. Plaintiff recovers possession of specific real property (resitutionary, legal)

- Defendant does not have title

2. Two Part Test

i. Plaintiff has right to possession

ii. Wrongful withholding by defendant

- Defendant must be in possession of property (not just trespassing)

3. Ejectment is almost always coupled with damages for loss of use or benefit to defendant during the time of detention

Front 15

Constructive Trust

Back 15

Imposed on improperly acquired property to which defendant has title. (restitutionary, equitable)

- Defendant serves as trustee and must return the property to the plaintiff

Front 16

Equitable Lien

Back 16

1. Imposed on improperly acquired property to which defendant has title (restitutionary, equitable)

2. Property will be subject to an immediate court-directed sale

3. Monies received go to plaintiff

- If proceeds of sale are less than the FMV of property when it was taken, a DEFICEINCY JUDGMENT will issue for difference

Front 17

Rules for Constructive Trusts and Equitable Liens

Back 17

TITLE!!!!!!!!!!!!

1. Inadequate legal remedy

i. Alternative – damages

ii. Reasons (D insolvent; Property unique- ct)

2. Tracing is allowed

3. BFPs prevail over plaintiff (proceeds of that sale can be traced)

4. Plaintiff prevails over unsecured creditors

5. Choice of remedy

i. Constructive Trust: If property value subsequent to taking goes up

ii. Equitable Lien

- If property value subsequent to taking goes down

- Defendant’s property cannot be traced solely to plaintiff’s property

Front 18

Injunctive Relief

Back 18

Equitable Relief

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

Threshold inquiry

1. Permanent injunction – issued after full trial on the merits

2. Temporary injunction – issued pending trial on merits

Almost always coupled with money damages!!!!!!!!

Front 19

Temporary Injunctive Relief

Back 19

Two Part Test

1. Establish that there is irreparable injury

i. Facts must be discussed in a time frame context – imminent

ii. Irreparable injury is weighed against any hardship defendant will suffer

2. Establish plaintiff’s likelihood of success (probability)

- Plaintiff must post a bond

Front 20

Temporary Restraining Order

Back 20

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

2. Identical test used

3. TRO proceeding can be ex parte

i. Notice not required

ii. Adversarial proceeding not required

4. Limited to 10 days

Front 21

Permanent Injunctive Relief ( five basic parts)

Back 21

1. Inadequate legal remedy alternative

2. Property Interest/Protectable Right

3. Feasibility of Enforcement

4. Balancing of Hardships

5. Defenses

Front 22

Inadequate Legal Remedy Alternative (Permanent Injunctive Relief)

Back 22

1. Alternative – Replevin

i. Sheriff may not be able to recover it

ii. Defendant can file a redelivery bond

2. Alternative – Ejectment: Sheriff may refuse to act

3. Alternative – Money Damages

i. Too speculative

ii. No right to money damages because tort is only threatened, not yet committed

iii. Defendant is insolvent

iv. Irreparable injury (Unique property)

v. Avoiding a multiplicity of suits (prior lit. btwn parties relating to this type of action)

Front 23

Property Right/Protectable Interest Requirement (Permanent Injunctive Relief)

Back 23

Traditional rule – equity will grant relief only where a protectable property right is involved

Modern trend – a protectable interest will suffice

Front 24

Feasibility of Enforcement (Permanent Injunctive Relief)

Back 24

Two Types of Injunctions

1. Negative – stop doing something

2. Mandatory (Affirmative) – do something

Rules

1. Negative injunctions have no enforcement problems

2. Mandatory injunctions may have enforcement problems based on

i. Difficulty of supervision

ii. Concern with effectively ensuring compliance

3. Examples

i. Act involves application of great taste, skill or judgment (inj. denied)

ii. Series of acts over a period of time (inj. denied unless P’s case is otherwise great)

iii. Out-of-state act required

- Resident defendant – injunction granted

- Non-resident defendant – injunction denied

Front 25

Balancing of Hardships (Permanent Injunctive Relief)

Back 25

Plaintiff’s benefit v. Defendant’s hardship if relief granted

Rules

1. There must be a gross disparity between detriment and benefit

2. No balancing if defendant’s conduct was willful

3. If you balance hardships, consider awarding plaintiff money damages

4. Hardship to public is also taken into account

i. First discuss defendant’s hardship

ii. Discuss public’s hardship

iii. Deny injunction and award plaintiff money damages

Front 26

Insolvent Defendant

Back 26

Write about Constructive Trust

Inadequate legal remedy because can't get money damages

Front 27

Defenses (Permanent Injunctive Relief)

Back 27

1. Unclean Hands

2. Laches

3. Impossibility

4. Free Speech

Front 28

Unclean hands

Back 28

Available only if plaintiff’s alleged improper conduct is related to the lawsuit

No generalized “bad guy” plaintiff

Front 29

Laches

Back 29

1. Concerned with the effect of passage of time

2. Never be greater than statute of limitations

3. Rules

i. Clock starts to run when plaintiff knows of the injury

ii. Relief is cut off when delay was both unreasonable and prejudicial to defendant

iii. If laches applies, consider awarding plaintiff money damages

Front 30

Problems w/ Injunctive Relief

Back 30

1. Crimes: Equity will not enjoin crimes

2. Who is bound

i. Parties

ii. Employees and agents acting with notice

iii. Third persons acting with notice

3. Erroneous injunction: Must still obey erroneous injunction until it is modified or dissolved

4. Contempt: Disobeyance of court order

i. Civil contempt (to coerce)

- Money fine

- Imprisonment – defendant can get out by agreeing to comply

ii. Criminal contempt (to punish)

- Money fine

- Imprisonment – remain for set amount of time

- Constitutional safeguards apply

Front 31

Destroyed Property (potentially available remedies in tort)

Back 31

Compensatory damages

Front 32

Damaged Property (potentially available remedies in tort)

Back 32

Compensatory damages

Front 33

Dispossession (potentially available remedies in tort)

Back 33

1. Compensatory damages

2. Restitutionary damages (if defendant benefits)

3. Replevin

4. Mandatory injunction (if chattel unique and damages and replevin won’t work)

5. Constructive trust/Equitable lien (particularly if D is insolvent and/or tracing involved)

6. Self-help (reasonable force to recapture)

Front 34

Simple Trespass (potentially available remedies in tort)

Back 34

1. Nominal damages

2. Restitutionary damages

3. Injunction (avoiding multiplicity of suits )

Front 35

Destruction/Damage of Realty (potentially available remedies in tort)

Back 35

1. Compensatory damages

2. Injunction

Front 36

Dispossession (potentially available remedies in tort)

Back 36

1. Compensatory damages

2. Restitutionary damages

3. Ejectment

4. Constructive Trusts/Equitable Liens

Front 37

Encroachment (potentially available remedies in tort)

Back 37

BOTH

1. Compensatory damages

2. Injunction (emphasize balancing of hardships )

- Write that there is never restitution

Front 38

Nuisance (potentially available remedies in tort)

Back 38

BOTH

1. Compensatory damages

2. Injunction (emphasize balancing of hardships )

- Write that there is never restitution

Front 39

Personal Injury Torts (potentially available remedies)

Back 39

1. Compensatory damages

i. Economic losses (special damages) – certainty rules apply

ii. Non-economic losses (general damages) – certainty rules do not apply

iii. Lump sum payment discounted to present value. Inflation not taken into account

2. Injunction

- Only against prospective intentional tortious conduct

Front 40

Fraud (potentially available remedies in tort)

Back 40

Always discuss both tort and K and think about punitive damages

1. Damages

2. Constructive trusts/Equitable liens

Front 41

Available Contract Remedies (short)

Back 41

1. Legal: Damages
i. Compensatory (including consequential)
ii. Nominal
iii. Liquidated

2. Restitutionary

i. Legal
- Restitutionary Damages
- Replevin
- Ejectment

ii. Equitable
- Constructive Trust
- Equitable Lien

3. Equitable
i. Specific Performance
ii. Rescission
iii. Reformation

Front 42

Consequential Damages

Back 42

Subset of Compensatory Damages

Reasonably foreseeable at time of K formation

Front 43

Punitive Damages in Contract

Back 43

Not allowed

If conduct is willful, try to characterize as a tort

Front 44

Liquidated Damages Clause

Back 44

1. Two Part Test for Validity

i. Damages are very difficult to ascertain at time of contract formation

ii. Reasonable forecast of what they would be

2. Clause cannot state that you get either actual or liquidated - invalid

Front 45

Restitutionary relief in Contract

Back 45

Based on the theory that defendant should not be unjustly enriched

Contract “fails” after plaintiff has rendered performance (partial or complete)

Includes:

1. Unenforceable Contracts

2. Breached Contracts

Front 46

Unenforceable Contracts

Back 46

1. Contract is unenforceable due to mistake, lack of capacity, statute of frauds, illegality, etc.

2. Plaintiff can get restitutionary damages for property/money given to, or services rendered for, defendant at the value of the benefit

- It is not necessary to find that defendant has benefited, just that they received a benefit, whether or not they used it

3. Plaintiff can recover value of services even if it is greater than contract rate

4. Plaintiff can recover property if unique or defendant insolvent

Front 47

Breached Contracts

Back 47

1. Plaintiff as Non-Breaching Party

i. Plaintiff can get restitutionary damages for property/money given to, or services rendered for, defendant at the value of the benefit

ii. Plaintiff can recover value of services even if it is greater than contract rate

iii. Plaintiff can recover property if unique or defendant insolvent

2. Plaintiff as Breaching Party

i. Traditional view – no recovery

ii. Modern view – recovery allowed

- Cannot be greater than contract rate and is reduced by any damages suffered by defendant (non-breaching party) as a result of the breach

Front 48

Specific Performance (Basic Requirements)

Back 48

Defendant required to perform the contract

1.Contract valid

1.5 Contract conditions of plaintiff must be satisfied

2. Terms of the K are definite and specific

3.Inadequate legal remedy

4.Mutuality of Remedy

5.Defenses

Front 49

Contract Conditions of Plaintiff Must be Satisfied (Specific Performance)

Back 49

1. Plaintiff must be able to show his contract conditions have been fulfilled

i. Already performed

ii. Ready and able

iii. Excused from performing

2. Deficiencies

i. Seller cannot deliver the agreed upon consideration

ii. Seller as Plaintiff can enforce contract if defect is

- Minor

- Major only if seller can cure before or at closing

iii. Buyer as Plaintiff can enforce contract even if defect is major, unless very major

- Abatement in purchase price to take into account defect in consideration

3.Time of the Essence Clause

Front 50

Time of the Essence Clause

Back 50

Specific Performance: K conditions of P must be satisfied

1. Buyer does not meet contract condition of timely performance

2. Facts

i. Land sale contract

ii. Contract will contain express time of the essence clause

iii. Clause will contain a forfeiture provision (forfeiture of all performance rendered to date if not timely)

iv. Partial performance which is potentially subject to forfeiture

v. Buyer will make a late payment

3. Seller wants to keep both land and any performance rendered to date, buyer will bring lawsuit for specific performance

4. Equitable maxim – equity abhors forfeitures

5. Factors

i. Loss to seller is small

ii. Tardiness is de minimis

iii. Waiver (seller has accepted late payments before)

iv. Buyer would suffer undue hardship

Front 51

Inadequate Legal Remedy (Specific Performance)

Back 51

Alternative – Money Damages

1. Damages are speculative

2. Defendant is insolvent

3. Multiple suits are necessary

4.. Thing bargained for is unique

Liquidated damages clause does not make money damages adequate

1. Specific Performance is still available

2. Exception: clause provides that this is “exclusive” or “only” remedy

Front 52

Uniqueness Problem (Specific Performance)

Back 52

1. Tested at time of litigation

2. If the property is unique, then even if plaintiff received money damages, he could not simply go out and buy it

3. Real property

i. Land is unique

ii. Seller can get specific performance even though all they have coming is money

4. Personal Property, usually not unique but some exceptions:

i. One of a kind or very rare

ii. Personal significance to buyer

iii. Circumstances make chattel unique (shortage)

Front 53

Mutuality of Remedy (Specific Performance)

Back 53

1. Defendant argues that plaintiff should not be able to enforce contract against him because he could not enforce against plaintiff

- Plaintiff is someone who lacks capacity

2. Rule - Court will reject the mutuality argument if it feels secure that plaintiff can and will perform

- Grant specific performance and provide for simultaneous performance

Front 54

I put five bucks down

Back 54

Permanent Injunctive Relief

- Inadequate legal remedy
- Property interest/Protectable Interest
- Feasibility of enforcement
- Balancing of Hardships
- Defenses

Front 55

Two sets of question for Tort problems

Back 55

1. Has plaintiff been injured?
2. Has defendant derived a benefit?
3. Does plaintiff want property returned?
4. Does plaintiff need an injunction?

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?

Front 56

Defenses to Specific Performance

Back 56

Equitable Defensese

1. Unclean Hands
2. Laches
3. Unconconscionability (tested at time of K formation)

Contract Defenses

1. Mistake
2. Misrepresentation
3. Statute of Frauds

Front 57

Statute of Frauds with part performance

Back 57

1. Contract involves land and will have been oral

2. Rule – if one has rendered valuable part performance in reliance on the contract, this will take the case out of the Statute of Frauds and specific performance will be granted (two of three)

i. Payment (in whole or part)

ii. Possession

iii. Valuable improvements

Front 58

Two Problems with Specific Performance

Back 58

1. Equitable Conversion

2. Personal Service Contracts

Front 59

Equitable Conversion (Specific Performance)

Back 59

1. Is land sale contract specifically enforceable?

i. Yes – equitable conversion occurred upon execution

- Property interests of the buyer and seller were switched

- Buyer has real property interest (specifically enforceable right to land)

- Seller has personal property interest (specifically enforceable right to money )

2. Death prior to closing

3. Damage and Destruction

i. Risk of Loss

- Majority rule – risk on buyer

- Modern trend – risk on seller

Front 60

Personal Services Contracts (Specific Performance)

Back 60

1. Personal Service Contracts

- Not specifically enforceable (enforcement problem; involuntary servitude)

2. Covenants not to Compete

- Two Part Test for Validity

i. Covenant must protect a legitimate interest of the person in whose favor it runs. Services must be unique

ii. Covenant must be reasonable in both geographical and durational scope

Front 61

Rescission

Back 61

Equitable Remedy in K

Original contract is considered voidable and rescinded

Grounds for Rescission

1. Mistake, misrepresentation, coercion, undue influence, lack of capacity, failure of consideration, illegality (never validly formed in the first place )

2.Mutual Mistake

i. Material Fact – rescission granted

ii. Collateral Fact – rescission denied

- Quality, desirability, fitness of property for particular purpose

3. Unilateral Mistake

- Rescission usually denied unless non-mistaken party knew or should have known of the mistake

4. Misrepresentation

- In order to get rescission, the plaintiff must show that they have actually relied upon the misrepresentation

Front 62

Valid Defenses to Rescission

Back 62

1. Unclean hands

2. Laches

Negligence of plaintiff is not a defense

Front 63

Problems w/ Recission

Back 63

1. Election of Remedies

i. Plaintiff sues for damages first rescission is not allowed

ii.. Suing for damages first affirms the contract

- Plaintiff sues for rescission first damages are allowed

iii. Plaintiff can sue for both at the same time, but must elect the preferred remedy before judgment

2. Availability of Restitution

- If a plaintiff who is entitled to rescission has previously rendered performance on the contract, he can get compensated for it or get the property back via restitution

3. Legal Rescission

i. Plaintiff gives notice and tenders back any consideration received

ii. Plaintiff then sues for restitution for anything given to defendant

Front 64

Reformation

Back 64

Equitable Remedy in K

- Changes written agreement to conform with the parties original understanding

Three Part Test

1. Valid contract

2. Grounds for Reformation

i. Mutual Mistake

ii. Unilateral Mistake where non-mistaken party knew of mistake

iii. Misrepresentation (both innocent and intentional)

3. Valid Defenses

i.. Unclean hands

ii. Laches

4. Non-defenses

i. Negligence of plaintiff

ii. Statute of Frauds

iii. Parol Evidence Rule

Front 65

Cha Cha Is My Dance

Back 65

Specific Perfmormance

- Contract must be valid
- Condition of P satisfied
- Inadequate legal remedy
- Mutuality of remedy
- Defenses

Front 66

Personal Property (potentially available remedies in K)

Back 66

1. Compensatory Damages

i. Seller’s breach – does not convey, delivers damaged goods

ii. Buyer’s breach – does not pay

2. Restitution

3. Specific Performance

4. Rescission

5. Reformation

Front 67

Real Property (potentially available remedies in K)

Back 67

1. Compensatory Damages

i. Seller’s breach – does not convey

ii. Buyer’s breach – does not pay

2. Restitution

3. Specific Performance

i. Land is unique

ii. Both buyer and seller can get

4. Rescission

5. Reformation

Front 68

Construction Contracts (potentially available remedies in K)

Back 68

1. Compensatory Damages

i. Owner’s breach – does not pay

ii. Builder’s breach – non-completion, defective completion

2. Restitution

i. Only builder for work done, unless owner pre-paid

3. Specific Performance: only owner, but enforcement problems

Front 69

Personal Services Contracts (potentially available remedies in K)

Back 69

1. Compensatory Damages

i. Employer’s breach – wrongfully terminates

ii. Employee’s breach – wrongfully quits

2. Restitution: only employee for services rendered, unless employer pre-paid

3. Specific Performance: valid covenant not to compete

Front 70

Good Dog

Very Good Dog

Back 70

Rescission
- Grounds
- Defenses

Reformaiton
- Valid K
- Grounds
- Defenses

Front 71

Questions for Contract Problem

Back 71

1. Has plaintiff been injured?

2. Has defendant derived a benefit?

3. Does the plaintiff wants his property back?

4. Does plaintiff want the contract reformed?

5. Does plaintiff want the contract ripped up?

6. Does plaintiff want the contract rewritten?

Front 72

Tracing: recovering where money has been spent

Back 72

Lowest intermediate balance unless minority replenishment theory

Front 73

Damages in landsale contracts

Back 73

Traditional common law: out of pocket expenses (downpayment, cost of title search, etc)

Other jurisdictions: benefit-of-the-bargain = market price - K price

Front 74

When they want a preliminary injunction

Back 74

Discuss:

1) Likelihood of success on the merits (there is always a sub-issue here such as breach of K, anticipatory repudiation, etc.)

2) Balance the Hardships (remember to do, but ignore if conduct is wilful)

3) Necessity to maintain status quo

Front 75

Modern trend for mutuality of remedy

Back 75

Mutuality of Performance