Remedies Short Outline by BrittanyGibbons

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									Remedies 1 Damages  Damages= ∆ is ordered to pay money to the π. 3 Types (Compensatory, Nominal, Punitive)  COMPENSATORY o Compensatory damages are based on the injury to the π. They put the injured party in the position he would have been in had the injury not occurred. o Requirements  (1) Actual Causation: “but for” test  (2) Proximate Causation: injury must have been foreseeable at the time of the tortuous act.  (3) Certainty: damages cannot be too speculative  (past losses must be established with more certainty than future losses)  (historical record, i.e. business profits for last 10 yeas, help provide certainty)  All-or-Nothing Rule: for future damages, π must show that they are more likely to happen than not. (must be better than 50-50)  For General Damages (i.e. non-economic), the basic certainty rules do not apply. The jury may award any amount it wishes, subject to rules.  (4) Unavoidability: π must take reasonable steps to mitigate damages. o Form of Judgment= must be a Single Lump Sum payments. (No installments)  The award must be discounted to present value  Inflation is not taken into account. o FOR CONTRACTS  CONSEQUENTIAL DAMAGES:  available for Related damages Foreseeable at the time of Formation.  LIQUIDATED DAMAGES  2 Part Test o Damages are very difficult to ascertain at time of Contract Formation o This was a reasonable forecast of what they would be.  If Valid, only liquidated damages are available. If not valid, only actual damages are available. ***A clause that provides one can get EITHER, is INVALID. You cannot be given your choice.  NOMINAL o These are awarded where π has no actual injury. They simply serve to establish or vindicate the π’s rights. ($1)  PUNITIVE o These are awarded to Punish the ∆. o Rule: In order to get Punitive damages, π must first have been awarded compensatory or nominal damages, or restitutionary damages (for torts only). o Rule: In order to get punitive damages, ∆’s fault must be greater than negligence. o Rule: **Punitive damages are awarded in an amount relatively proportionate to actual damages. US Supreme Court put limit on punitive damages to a Single Digit multiple of actual damages, unless conduct facts are extreme. (cannot be 10x actual) o Rule: Not allowed in Contract Cases (unless Fraud) Restitutionary Remedies  Restitutionary remedies are based on the theory that the ∆ should not be unjustly enriched.  RESTITUTIONARY DAMAGES (legal restitutionary remedy) o = based on the Benefit to the ∆. Calculated based on the value of the benefit.

Remedies 2 o Rule: you cannot be awarded both compensatory and restitutionary damages. Give π the largest award!*** o Rule: punitive damages can be attached to restitutionary damages as long as the underlying cause of action is in TORT. ** REPLEVIN (legal restitutionary remedy) o = π recovers possession of specific PERSONAL property o 2 Part Test (same test for Ejectment)  (1) π has a right to possession  (2) there is a wrongful withholding by ∆. o Rule: π can recover the chattel before the trial.  Must be a preliminary judicial hearing and π must post a Bond  ∆ can defeat an immediate recovery by posting a Redelivery Bond o NOTE: the Sheriff repossesses the property from the ∆. o Replevin is almost always coupled with damages (compensatory or restitutionary) for lost use or benefit to the ∆ during the detention. EJECTMENT (legal restitutionary remedy) o = π recovers possession to specific REAL property o 2 Part Test (same test for Replevin)  (1) π has a right to possession  (2) there is a wrongful withholding by ∆. o Rule: Ejectment is only available against a ∆ who has possession of the property. o NOTE: the Sheriff ejects defendant from the property. o Ejectment is almost always coupled with damages (compensatory or restitutionary) for lost use or benefit to defendant during time of wrongful withholding. CONSTRUCTIVE TRUST ( equitable restitutionary remedy) o = imposed on improperly acquired property to which ∆ has title. ∆ serves as “trustee” and must return the property to the π. o ***Can only be used when the ∆ has improperly acquired TITLE o Rule: Must show no adequate legal remedy? How? Property is unique. o Rule: Tracing is allowed. o Rule: Bona Fide Purchasers prevail over π. o Rule: π prevails over unsecured creditors EQUITABLE LIEN ( equitable restitutionary remedy) o = imposed on improperly acquired property to which ∆ has title. Property will be subject to an immediate court directed sale. The monies received go to the π. o If the proceeds of the sale 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 ∆’s other assets. o ***Can only be used when the ∆ has improperly acquired TITLE. o Rule: Must show no adequate legal remedy? How? ∆ is Insolvent. o Rule: Tracing is allowed. o Rule: Bona Fide Purchasers prevail over π. o Rule: π prevails over unsecured creditors; however to the extent the π has a deficiency judgment in connection with an equitable lien, you stand on equal footing with other unsecured creditors. Choice of Remedy: Constructive Trust or Equitable Lien? o If the property value subsequent to taking goes UP, go with a constructive trust o If the property value subsequent to taking goes DOWN, go with equitable lien o When ∆’s property cannot be traced solely to π’s property, only an equitable lien is available.

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Remedies 3 Restitutionary Remedies in CONTRACT Cases  When a K is unenforceable (due to mistake, lack of capacity, statute of frauds, illegality), π can still recover restitutionary damages based on the premise of Unjust Enrichment.  Breached Contracts o ∆ Breaches  Plaintiff can get restitutionary damages for property/money given to, or services rendered for, ∆. (For the Value of the benefit.)  If the property is UNIQUE, or the ∆ is INSOLVENT, π can get property back. o π Breaches  Traditional View= no recovery of restitutionary damages  Modern View= π can recover restitutionary damages  Cannot be greater than the contract rate and is reduced by any damages suffered by ∆ as a result of the breach. Equitable Remedies  INJUNCTIVE RELIEF o = ∆ is ordered (enjoined) to do or refrain from doing something o Permanent Injunction= issued after full trial on merits. o Temporary (Preliminary, Interlocutory) Injunction: issued pending trial.  TEMPORARY INJUNCTIVE RELIEF o Two-Part Test  Irreparable Harm  Time Frame Context: π must show that he will incur irreparable injury while waiting for a full trial on the merits, and that’s why he or she needs relief now.  Balancing of Hardships: irreparable injury is weighed against any hardship ∆ will suffer if a temporary injunction is granted.  Likelihood of Success- π must establish probability  Bond Requirement: the court should impose a bond requirement on π to reimburse ∆ if the injunction injures him/her and the π does not succeed.  TEMPORARY RESTRAINING ORDER o = issued pending a hearing to determine whether temporary injunction should issue. o Two-Part Test (same as temporary injunction)  Irreparable Harm  Likelihood of Success o Rule: Notice is Not Required (TRO proceeding can be Ex Parte) o Rule: Adversarial Proceeding is Not Required. o Rule: TROs are limited to 10 days. (must have regular temporary injunction hearing by then. o Note: It is very difficult to get any type of temporary injunctive that is mandatory in form. This is especially true for a TRO.  PERMANENT INJUNCTION o 5-Part Test (I Put Five Bucks Down)  Inadequate Legal Remedy (3 fact pattern of why it would be inadequate)  Replevin: (1) where sheriff may not be able to recover, find, or identify the chattel, or (2) ∆ can file the redelivery bond and then run off or destroy the chattel in the meanwhile.  Ejectment: sheriff may refuse to act

Remedies 4 Money Damages: **(1) Too SPECULATIVE; (2) no right to money damages because tort is only Threatened; (3) ∆ is INSOLVENT; (4) Irreparable Injury; (5) avoid a multiplicity of actions (a prior history of litigation between the same parties relating to this type of action). o It is much easier to show $ damages are inadequate if π is protecting an interest in land. Property Right Involved  Traditional Rule: Equity will grant relief only where a protectable property right is involved. o Protectable Property Right= any legitimate property interest  Modern View: All you need is a protectable interest. Feasibility of Enforcement  Two Types of Injunctions o (1) Negative Injunction: “stop doing it”  No enforcement problem o (2) Mandatory Injunction: “do something”  There may be an enforcement problem based on (i) the difficulty of supervision, and (ii) concern with effectively ensuring compliance.  “Mandatory” Injunction Fact Patterns o Act involves the application of great skill, taste, or judgment— injunction denied. o A series of acts over a period of time—injunction denied. o A out-of-state act—for Resident ∆- granted; for Non-Resident ∆- injunction denied. Balancing of the Hardships  = π’s benefit v. ∆’s hardship if injunction is granted  There must be a Gross Disparity between detriment and benefit.  Willful Conduct: if ∆’s conduct is willful, there is no balancing.  **Hardship to the public is also taken into account. Defenses  UNCLEAN HANDS o “bad guy” π fact pattern. o = available only if π’s alleged improper conduct is related to the lawsuit.  LACHES (only bars permanent injunction, not $$$ damages) o = a “running period of time” defense. o Unlike the statute of limitations, which involves the mere passage of time, laches is concerned with the effect of the passage of time. o Rule of Laches  (1) clock starts to run when the π knows of the injury  (2) delay cuts off the right to relief when it has been Both Unreasonable & Prejudicial to the ∆. o If laches applies, consider Awarding π $$$ damages.  IMPOSSIBILITY o Injunction is denied if it is Impossible for ∆ to carry out terms of the injunction.  FREE SPEECH 

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Remedies 5 o If the tort is defamation or a privacy publication tort, the injunction will probably be denied based on free speech grounds SPECIFIC PERFORMANCE (Contracts only) Cha Cha Is My Dance o =∆ is required to perform on the contract. o 5-Part Test  (1) Valid Contract (burden on π to show K is valid)  (2) Contract Conditions of π must be satisfied.  Plaintiff must be able to show his contract conditions have been fulfilled (already performed, ready and able to perform, or excused from performing).  2 “Conditions Fact Patterns” o Seller Cannot deliver the agreed upon Consideration  π-Seller breaches by sending defective goods.  Seller can enforce the K if the defect is Minor, but cannot enforce the K if the defect is Major, unless the seller can cure the defect before or at closing.  π-Buyer wants SP for seller to deliver on K  π-Buyer can enforce the K even if the defect is Major, but cannot enforce the K if the defect is very major.  (Court will lower the purchase price to take into account this defect in consideration). o Buyer does not meet contract condition of timely performance  Land Sale K, with an express time of the essence clause, and a forefeiture provision. Is this scenario, buyer makes a late payment. Seller wants to keep both the land and any performance rendered to date. Buyer will bring a lawsuit for specific performance.  Result: Equity abhors Forefeiture. Court will look at (1) loss to seller is small; (2) tardiness is de minimis; (3) Waiver (seller has accepted late payments in the past; (4) buyer would suffer undue hardship.  (3) Inadequate Legal Alternative  4 Reasons: (1) Damages are speculative; (2) ∆ is insolvent; (3) multiple suits are necessary; (4) The thing bargained for is Unique. o Uniqueness= land (even if identical). Tested at time of breach o General Rule: personal property is not unique, unless (i) one of a kind or rare; (ii) personal significance to buyer; (3) circumstances made chattel unique (i.e. oil shortage).  Liquidated Damages Clause DO NOT make $ damages adequate. Specific Performance is still available. Exception= if liquidated damages clause provides that this is the “only remedy”  (4) Mutuality of Remedy  Ex. B, 17 years of age, enters into a K to buy land from D, an adult. D refuses to convey, and B brings an action for specific performance. There is no mutuality of remedy because if D sued B for SP, he couldn’t get it because B is an infant.

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Remedies 6 Rule: π should not be able to enforce this contract against me because I could not enforce it against him.  Rule: Court will reject the mutuality argument if it feels secure that the π can and will perform.  The court would probably rule for Simultaneous Performance to avoid a mutuality problem.  (5) Defenses  Equitable Defenses o Unclean Hands o Laches o Unconscionability= tested at time of K formation (not like uniqueness.  Contract Defenses o Mistake o Misrepresentation o Statute of Frauds: if one has rendered (1) valuable part performance; (2) in reliance on the contract, this will take the case out of the Statute of Frauds and Specific Performance will be granted.  Valuable Part Performnace= 2 of 3 (payment, possession, or improvements. RESCISSION Good Dog o = the original contract is considered voidable and rescinded o 2 Step Analysis  Grounds for Rescission  (1) Mistake, (2) Misrepresentation; (3) Coercion; (4) Undue Influence; (5) Lack of Capacity; (6) Failure of Consideration; (7) Illegality.  (they all relate to Contract Formation)  Mistake: if mutual mistake of material fact, contract is rescinded. o IF it is a mutual mistake of collateral fact it is not rescinded o If it is a unilateral mistake, it is not rescinded except (1) the non-mistaken party knows or should know of the mistake or (2) the mistaken party would suffer undue hardship if there is no rescission.  Misrepresentation: rescission is granted. Π must show detrimental reliance.  Defenses  Unclean Hands  Laches  Negligence of π is not a good defense o Election of Remedies:  If π sues for damages FIRST, rescission is not allowed. This is an affirmance of the K.  If π sues for rescission FIRST, rescission is allowed.  If π sues at the same time, rescission is allowed as long as he elects the preferred remedy before judgment. o Availability of Restitution  Even if the π gets rescission, he can sue for restitution for any partial performance. o Legal Rescission (π accomplishes this by his own actions 

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Remedies 7  First: π gives notice and tenders back any consideration received.  Second: π sues for restitution for anything given to defendant. REFORMATION Very Good Dog o = changes written agreement to conform with the parties original understanding o 3 Step Analysis  Valid Contract  Grounds for Reformation  (1) Mistake (same rule above); (2) Misrepresentation (allowed for both innocent and intentional  Defenses  (1) Unclean Hands; (2) Laches  Non-defenses= negligence, statute of frauds, parol evidence rule o **Reformation is NOT allowed if it would adversely affect the rights of a subsequent bona fide purchaser.

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Miscellaneous Injunctive Relief Problems  Crimes: Equity will NOT enjoin them. (∆’s criminal conduct).  Who is Bound by an Injunction? o (1) Parties; (2) Employees and Agents acting with Notice; (3) Other Persons acting with notice.  Erroneous Injunction: even if erroneous, you have to obey it. (must have it modified or dissolved).  Contempt: for disobeyance of a court order o Civil Contempt (to coerce)= Money Fine or Imprisonment (∆ “holds the keys”) o Criminbal Contempt (to punish)= Money Fine or Imprisonment (∆ cannot get out) Miscellaneous Specific Performance Problems  Equitable Conversion: equity regards done that which has been done (once parties have executed a binding K for the sale of land, equitable title vests in the purchaser and the vendor holds legal title only as security for payment of the balance of the purchase price. o If land contract is specifically enforceable, an equitable conversion has occurred upon execution. The Result being the property interests of the buyer and seller have Switched. (The buyer now owns the Real Property Interest and the Seller owns the Personal Property Interest.) o This Occurs Between Execution & Closing.  Death: if Seller dies after execution but before closing, Buyer is treated as having owned the property.  Damage/Destruction: Majority Rule: risk is on the buyer. Modern Trend: risk is on the seller.  Right to Insurance proceeds goes to whoever has the risk of loss  Employment Contracts o Rule= Employment Contracts are NOT specifically enforceable.  Why? Enforcement problems and Involuntary Servitude o Covenants not to Compete= ENFORCEABLE if:  The covenant protects a legitimate interest of the person. (i.e. Service is unique)  The covenant must be reasonable in BOTH its Geographical and Durational scope.

Remedies 8 Tort Remedies  Legal Remedies o Damages  Restitutionary Remedies o Legal Restitutionary Remedies  Restitutionary Damages  Replevin  Ejectment o Equitable Restitutionary Remedies  Constructive Trust  Equitable Lien  Equitable Remedies o Injunctive Relief

Contracts Remedies  Legal Remedies o Damages  Restitutionary Remedies o Legal Restitutionary Remedies  Restitutionary Damages  Replevin  Ejectment o Equitable Restitutionary Remedies  Constructive Trust  Equitable Lien  Equitable Remedies o Specific Performance o Rescission o Reformation


								
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