remedies
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REMEDIES
1. start with legal remedies(money)before going to equity
2. Then restitution which has legal and equitable remedies
3. When legal remedies are inadequate, it's time for equitable remedies like specific performance
CONTRACT DAMAGES
1. Must be reasonably foreseeable (hadley v. baxendale)
2. be definite and certain (was it in contemplation by both parties at the time the contract was made)
damages must be proven to a reasonable certainty: there are two fact patterns that trigger issues of certainty:
1. lost profits in a new business
2. losses due to delay in fulfilling a contract
LOST PROFITS IN A NEW BUSINESS
old rule: profits not reasonably certain, no recovery
new rule: need evidence of
1. general business conditions
2. success of similiar businesses
3. past profits
4. prior experiences
LOSSES DUE TO DELAY IN FULFILLING CONTRACT
innocent party may be entitled to the overhead costs incurred during delay. No test, reasonable certainty. if damages cannot be proven to a reasonable certainty, look to reliance damages
SEVEN TYPES OF CONTRACT DAMAGES
1. expectation
2. reliance
3. consequential
4. nominal
5. punitives
6. damages for emotional distress
7. liquidated damages
EXPECTATION DAMAGES
Put the P in the position he would have been in had the contract been fully performed. two formulas
1. value-value of d's expected performance minus the benefits P receives for not having to completehis own performance
2. cost-cost forumula is used when the P's primary interest was the perfomance itself. This is the cost of obtaining substitute performance.
example: P contraced with Dto have d install electrical service in an area P planned to sell as a residential subdivision. If all P wanted was electrical service, the cost is simply for substitute performance. If P wanted the value of the service (increase in the amount he could sell each lot for because it has electrical service)then the value formula applies
EXPECTATION DAMAGES FOR DEFECTIVE PERFORMANCE OR NON-CONFORMING GOODS
Gen. Rule:value of k had it been correctly performed minus value of actual performance.
exception: when the difference between expected performance or goods and actual performance and goods is so substantial that the property is unusable or unsafethe measure of damages is what it takes to correct or cmplete performance, even when it exceeds contract price.
MITIGATION IS REQUIRED
Recovery is barred if the P does not make reasonable efforts to mitigate contract damages. D must prove that mitigation has no ocurred.
MITIGATION I SALES CONTRACTS
Buyer's remedies. When the seller breaches, the buyer cannot get expectation damages unless he makes a good faith effort to cover by seeking substitute performance and buyer entitled t consequential damages incurred in seeking cover including
1. difference between K price and actual price for such goods
2. lost profits
3. costs of stopping a project
4. storage
5. rental
BUT money saved by not having to return performance must be deducted from the expectation and consequential damages.
seller's remedies: when the buyer breaches, the seller may still be entitled to lost profits even if he has resold the goods, provided the seller has an unlimited supply.
example: buyer breaches on contract to buy a boat. the seller manages to resell the boat a few months later. But, the seller is still entitled to lost profits because he had an unlimited supply and could have sold two boats in the same period of time. This does not apply to unique goods, or goods with a limited supply.
EXPECTATION DAMAGES IN LEASE CONTRACTS
anticipatory: lessor has started to remodel the premises in anticipation of lesee's occupancy. Lessee breaches contract before moving in. Lessor re-leases property for a lower rent.
Lease in progress: (tenant breaches a lease in progress by moving out before lease period is up). At common law, leases were seen as conveyances. The lesee "owned" the property for the duration of the lease and was responsiblefor the rent the entire time. Modern law views leases as both conveyances and contracts.
Landlord is required to mitigate damages by making reasonable efforts to re-rent the premises.
RELIANCE DAMAGES
Reliance damages return the P to the position he would have been in before the parties entered into the agreement. P may recover expenses incurred in reliance on the agreement.
RELIANCE DAMAGES ARE PROPER WHEN
1. It is impossible to measure expectation damages to a reasonable certainty
2. andP recovers on the theory of promissory estoppel
CALCULATING RELIANCE DAMAGES
Cost to P in reliance on contract plus other detriment incurred as a result of the contract.
example: the "heddie lamar" nose. Court could not measure expectation damages with reasonable certainty. P was awarded costs of the surgery, plus pain, suffering, mental anguish and worsening of condition.
don't forget: lost profits are not reliance damages; they are expectation damages.
CONSEQUENTIAL DAMAGES
Damages incurred as a result of D's breach.
Lost profits may be consequential if the seller breaches and the buyer is unable to complete performancein another contract, thus losing profits.
example: Hardware store agrees to loan contractor goods on credit until contractor builds house and gets paid. Hardware storE backs out, contractor can't finish house and sell it. Market drops by the time he gets what he needs to finish the house.
Lost profits are consequential to the hardware store's breach.
NOMINAL DAMAGES
Token damages that show the D has acted wrongfully but the P is not entitled to any other damages.
reasons: P suffered no actual harm (but if there was actual harm, look to reliance damages) OR P's harm can't be proven to a reasonable certainty.
PUNITIVE DAMAGES
no punies in contract cases.
exceptions:when the same facts and circumstances that give rise to the breach also constitutean independent intentional tort, punitive damages may be awarded in tort. And, when the implied covenant of good faith and fair dealing is breached in an insuance contract courts have permitted punitive damages. Breach of the covenenant is treated as a type of independent tort. This applies ONLY to insurance contracts.
DAMAGES FOR EMOTIONAL DISTRESS
General rule: no emotional damages for breach of K because it is too remote and not foreseeable.
exceptions: contract has elements of 'peronalty': meaning it is made to secure relife from inconvenience or annoyance or to confer particular enjoyment.
AND adequate consideration is not easilydetermined by the terms of the contract.
examples: contract for funeral services, marriage contracts, doctor's agreements and dwelling places.
LIQUIDATED DAMAGES
1. Only enforceable if they are reasonable, if the damages are otherwise difficult to calculate
2. cannot be a penalty
3. cannot violate public policy.
The burden is on the party attacking the liquidated damages clause to show that the damages are not reasonable. Presence of such a clause can be a defense to specific performance if the contract specifies it is the only relief available.
RESTITUTION AND RESCISSION
Restores the something or it's value when the recipient has been unjustly enriched and there is no legal justification which allows him to retain his benefit.
Replevin (legal and equitable)
quasi-contract
equitable lien
constructive trust
subrogation
remedies for good faith improvers of land
LEGAL REPLEVIN
Return of specific property
-court will hold the property until final judgment sheriff will retrieve property
-D can post a bond allowing him to keep the property in his possession until final judgment
EQUITABLE REPLEVIN
Recover of specific chattel when legal remedies are inadequate
-P must show that money dmages are inadequate because theproperty has "pretium" value, that is sentimental value.
QUASI-CONTRACT
Legal fiction imposed by the court to avoid unjust enrichment. "where one has been unjustly enriched at the expense of another, even if there was no contractual agreement or a contract was unenforceable, the court will impose an obligation for restitution to the injured party in the amount to which the party has been unjustly enriched.
EQUITABLE RESCISSION OF A CONTRACT
Cancellation of contract by decree of court.
rescission is permitted for
invalid contracts
fraud
mutual mistake
material breach
default
breach of fiduciary duty
IN RESCISSION
In rescission, the court treats the rescinded contract as if it was never made. Restitution will be ordered to return from each party the benefits he received from others.
requirement: The grounds which make the contract uneforceable must have ocurred at or before the time the contract was entered into. Rescission will not be granted if parties cannot be returned to their original positions. Consideration must be returned in order to rescind.
DEFENSES TO RESCISSION
traditionally, a party who is in breach could not rescind, but modern courts will allow it if
1. the breach was relatively minor and not substantial
2. The parties can be returned to their original position
3. restitution of benefits conferred can be obtained less an offset for the damages to the non-breaching party
4. Unclean hands and laches may apply.
LEGAL RESCISSION
legal rescission occurs when the parties agree to rescind the contract without judicial order.
GROUNDS FOR RESCISSION
innocent misrepresentation: Rescission is the only remedy.
-misrepresentation of a material fact by one who reasonably believes the facts presented are true.
example: S claims property is one hundred acres because he reasonably relied on a survey stating there were one hundred acres when in fact there were only 90 acres.
NEGLIGENT MISREPRESENTATION
Misrepresentation of a material fact by a party who had a duty to ascertain the truth of the matter and failed to do so.
example: A sells C to Blackacre, claiming it has 100 acres, but never making any attempt to determine actual acreage. In fact there are ninety acres.
-rescission and restitution are possible
-or Specific performance for the buyer
INTENTIONAL (FRAUDULENT) AND RECKLESS MISREPRESENTATION
-Intentional/fraudulent misrepresentation of a material fact with the intent to decieve.
-reckless (doesn't check but tells anyway)
Remedies for intentional and reckless mispresentation;
Rescission: P may get rescission and damages
specific performance? Buyer, as innocent party, may be entitled to specific performance with abatement.
CONCEALMENT-suppression of material fact with the intent to deceive
Party who allegedly concealed must have duty to disclose
parties dealing at arm's length rarely have a duty to disclose
CONCEALMENT REMEDIES:
Rescission is granted only when concealment was coupled with other facts of inequality such as
inadequacy of price term
overreacing
sharp practice
-damages are available
-innocent party may get specific performance
MUTUAL MISTAKE
-mistake must be more than material, it must go to the heart of the bargain.
-can't be collateral
-look for ambiguous terms
RESCISSION IS THE PRIMARY REMEDY FOR MUTUAL MISTAKE
-specific performance is generally not permitted because there was no meeting of the minds
when price is inadequate:
CA says no SP if price alone is inadequate
most jurisdictions require something more than inadequate price term, such as sharp practice, bad faith, undue influence
Some states need "shock the conscience" inadequacy
UNILATERAL MISTAKE
Generally requires evidence of fraud, undue influence, concealment, unconscionability ro bad faith. Inadequacy of price alone is not enough unless it shocks the conscience. When there is no evidence of the above, rescission may still be granted when the following requirements are met.
1. The party seeking relief must be blameless and not negligent
2. the party must seek rescission promptly
3. it must be possible to restore the parties to their original positions.
SPECIFIC PERFORMANCE FOR UNILATERAL MISTAKE
-When there is no fraud involved with a unilateral mistake, the court has discretion whether or not to order specific performance by balancing equities.
-specific performance will only be graned if it is fair, equitable, and reasonable.
-may not grant it if result would be harsh or oppressive
-inadequacy of price in a unilateral mistake is not sufficient for specific performance except in CA
MORE REMEDIES FOR UNILATERAL MISTAKE
-damages may be available to innocent party
-reformation is permitted where one of the parties knows at the time of the contract signing that the writing does not conform to the parties actual agreement.
REFORMATION
-reformation is permitted when the terms of the written K do not reflect the agreement of the parties
-reformation is proper remedy for
1. scrivener's error
2. unilateral mistake when one of the parties is aware the writing does not reflect the agreement.
REFORMATION REQUIRES
-a valid oral agreement that is unambiguous and clear
-clear and convincing evidence that the writing does not reflect the true intent of the parties
DEFENSES TO REFORMATION
-laches
-sale to BFP
-negligence on the part of mistaken party
-when the contract has been fully performed as written.
note: you can't use the parole evidence rule or SOF as defenses to reformation.
SCRIVENER'S ERROR
when parties have reached a mutually acceptable agreement but there was an error in reducing it to a writing, the primary remedy is reformation of the contract.
SPECIFIC PERFORMANCE
LiquidSOFTOE3B'sCHILD
Liquidated damages clause
statute of frauds
time is of the essence
three breaches: breach of contract, breach duty of good faith and fair dealing, breach of fiduciary duty
clean hands
hardship
Inadequate practice
laches
Difficult to supervise
BUT WAIT: specific performance is for when money damages are inadequate.
1. damages at law are inadequate
2. definite and certain terms
WHAT MAKES DAMAGES AT LAW INADEQUATE?
1. When money damages are hard to measure with reasonable certainty
2. when it is difficult to get subsitute performance (often seen on Tinney's exams is someone who does something special to antique cars, like custom painting or detailing that can't be done by others. Keep in mind issues of involuntary servitude
3. When the contract concerns something unique
ONCE YOU HAVE DETERMINED THAT SPECIFIC PERFORMANCE IS REQUIRED BECAUSE LEGAL REMEDIES ARE INADEQUATE, RUN THROUGH THE ELEVEN DEFENSE AND SEE WHAT STICKS
LIQUIDATED DAMAGES
When a contract specifies that liquidated damages are the only remedy analyze the liquidated damages clause. It must be a reasonable estimate of the anticipated loss and actual damages must be difficult or impossible to ascertain.
STATUTE OF FRAUDS
The statute of frauds provides that certain types of contracts must be in writing in order to be enforceable and signed by the party to be charged.
MYLEGS:
Marriage contracts
year to execute
Land
Executorship
Goods costing more than five hundred dollars
sureties
DEFENSES TO SOF
Fraud-when a party is falsely inducted into the transaction in reliance on a promise specific performance is available.
PART PERFORMANCE
AS a defense to the SOF.
-When one of the parties has partially performed in reliance on a promise, the other party will be estopped from denying the existence of the promise. part performance must be of such nature that it indicates the existence and terms of the contract and be substantial, resulting in enough of a change in position that to refuse to enforce the K because of the SOF would be unjust.
-Watch out for "insufficient acts of part performance"-these are acts that are not sufficient to take the act out of the SOF.
Payment of money- unless the party admits in court that he received the money as payment for the contract, the reciept of money does not prove that an agreement existed.
quasi-contract: is the appropriate remedy to give restitution for money paid.
taking possession of property:
common law: taking possession of property was sufficient for part performance
modernly: taking possession of property alone is not sufficient to show that the K was for the sale of land.
other factors: such as making valuable improvements to the land and payment are necessary for part performance to take it out of the SOF
MOST COMMON PART PERFORMANCE SCENARIO
Old man says "i'll give you my house if you come and care for me" and dies before conveying the house. this never works. Possession of the property and coming to the house were not sufficient part performance to indicate to indicate the terms of the K. Don't forget quantum meruit or constructive trust as a remedy.
TIME IS OF THE ESSENCE
implied in every contract at law.; in other words, when you are seeking legal damages if a time is specified, failure to meet the time term is breach and legal damages are appropriate.
but for contract in equity, it must be expressed clearly in the contract.
in other words, when you are seeking equitable relief like specific performance or the circumstances of the contract must demonstrate the time is of the essence, for example perishable goods.
equity courts are reluctant to enforce the TOE if it leads to forfeiture.
-courts will not enforce time-based cancellation clauses when there is evidence of fraud or overreaching
LOOK OUT FOR WAIVER OF TIME
Repeated acceptance of payments may be seen as waiver of TOE.
BREACHES BY A PARTY
-breach of K by P
-breach of fiduciary duty by P
-breach of duty of good faith and fair dealing
breach of K by P: as a general rule, parties in breach may not be granted specific performance.
breach of fiduciary duty: P is not entitled to specific performance if he has breached a fiduciary duty. The duty is heightened when there is a fiduciary duty between the parties such as agent to a principal. A fiduciary duty is one of the highest degrees of good faith and fair dealing. In that case, the agent has a duty ti disclose all material facts and fraud is not required to rescind a contract when there has been breach of fiduciary duty.
breach of duty of good faith and fair dealing: Every contract carries with it an implied duty of good faith and fair dealing. Courts will look beyond the actual language of the contract to determine what constitutes good faith and fair dealing for each specific case.
example: taking advantage of a unilateral mistake of the other party (for example failure to remind the other party of the end of an option period when they clearly did not remember)
-sellers usually have a higher duty of of disclosure than buyer, often imposed by statute. For example, if a buyer at a garage sale knows a dish is worth thousands, she does not have a duty to disclose it to the seller. but if the seller knows the appliance doesn't work, she has a duty to disclose it to the buyer.
CLEAN HANDS DOCTRINE
P not entitled to equitable remedies when he has unclean hands due to inequitable conduct directly related to contract.
LEGAL AND EQUITABLE REMEDIES
A p who asks for equitable remedies such as specific performance may still be entitled to damages in addition to or instead of equitable relief
HARDSHIP
A court may refuse to order specific performance when to do so would impose unreasonable hardship on the other party. When a contract is unconscionable because it imposes hardship, the court may
1. refuse to enforce the contract
2. enforce only the provisions that are NOT unconscionable
3. may limit the effects of unconscionable provisions to avoid an unconscionable result.
INADEQUATE PRICE TERM
-specific performance cannot be compelled when consideration is inadequate: a court will not enforce a contract unless it is fair, just and reasonable. The courts will balance the hardships and benefits to the respective parties to determine whether or not consideration is truly inadequate.
-inadequate price-ordinarily, inadequacy of price is not enough to refuse to enforce a contract. But when the discrepancy in price is so gross that it shocks the conscience and provides conclusive evidence of fraudulent intent, the court may refuse to grant specific performance.
LACHES
The court will not order Specific performance when there was an unreasonable delay in prosecution of the case caused by P.
-unreasonable delay
-detriment to D
DIFFICULT TO SUPERVISE
When specific performance is too difficult to enforce or supervise, it may act as a defense to specific performance.
example: personal service contracts and construction contracts
old rule- No specific performance for construction contracts
new rule-most courts now allow specific performance for construction contracts
DAMAGES IN TORT
compensatory damages: special and general (special: wages, general: pain and suffering)
consequential damages
nominal damages
punitive damages
damages for emotional distress
COMPENSATORY DAMAGES
This standard remedy for torts is intended to compensate the P for losses suffered, restoring him to as good a position as he would have been had the injury not been inflicted. Two types: general and special
general compensatory damages: Easily foreseeable and anticipated damages. It is foreseeable that if you run a stop sign and hit another car, that the occupants will experience pain and suffering
special damages: must be specifically proven because they are not easily foreseeable from the mere occurrence of the wrongdoing.
-lost wages
-past and future medical costs arising from the injury
-loss of consortium
-loss of enjoyment
example: when D ran the stop sign he couldn't foresee that he would injure an attorney and be responsible for damages in the amount of an attorney's salary vs. a teachers.
REQUIREMENTS FOR COMPENSATORY DAMAGES
-foreseeable
-unavoidable
-causation
-certainty
FORESEEABLE: damages must be foreseeable in order to be compensable
UNAVOIDABLE: The P must take reasonable steps to mitigate or avoid the damages. D has the burden of proof that damages could have been mitigated or avoided.
CAUSATION: The damages must be proximately caused by the D's wrongdoing. "but for" test...but for the D's running of the stop sign, the P would not have been injured.
CERTAINTY: The P must prove the damages with reasonable certainty. Reasonable certainty is enough to satisfy a reasonable person.
CONSEQUENTIAL DAMAGES
Incidental costs as a result of the injury. example: cost of a rental car while damaged car is being repaired.
NOMINAL DAMAGES
-when there is no actual injury, nominal damages serve to;
-vindicate the P
-protect important public interest
example: violation of constitutional rights: when there is no actual injury, P is entitled only to nominal damages. Punitive and consequential damages may be awarded if there is actual injury in fact.
PUNITIVE DAMAGES IN TORT
-punitive damages are intended to punish the wrongdoer, deter wrongful behavior, encourage litigation to promote defense of the law.
-Some states don't allow punitive damages: on the theory that punitive damages be paid to victims fund rather than to the P.
-not tax deductible
-insurance companies don't pay punis
-can be based on financial status of D
-except in negligence, actual damage not needed
DAMAGES FOR EMOTIONAL DISTRESS
available in tort since IIED and NIED are torts
EMOTIONAL DISTRESS WITHOUT PHYSICAL INJURY
old rule: no recovery for NIED without physical injury
modern rule: actual physical injury is not required as long as reasonable damages can be proven
pecuniary damages include medical expenses, lost earnings, and the cost of custodial care.
non-pecuniary: pain and suffering, loss of ability to engage in certain activities
MOST PERSONAL INJURY DAMAGES ARE NOT TAXABLE
exception: punitive damages
COLLATERAL SOURCE RULE
-When P receives funds from a collateral source (usually insurance coverage) the D may not deduct those payments from the damage award. Reasoning is it would penalize the P for having insurance. However, insurance companies usually put a lien against the judgment to recover the costs.
MICRA CAP ON MEDICAL MALPRACTICE
California law caps non-economic damages in medical malpractice at 250K. Under MICRA, D may deduct collateral source benefits as long as the costs of those benefits are factored in.
STRUCTURED SETTLEMENTS
payments divided and distributed over time
-usually in the form of annuities purchased by D
-tax advantages for P because a lump sum award would quickly be converted to taxable assets.
-provides long-term financial security for P
REMITTITUR AND ADDITUR
remittitur: a court may reduce the amount of damages if the award is excessive. P is offered the choice of a new trial by accepting a reduction in the award.
smart to choose
additur: Allows a D to avoid a new trial by accepting an increase in verdict. Often seen in cases involving a run away jury. Very rare. Not allowed in Fed. court
RESTITUTIONARY RELIEF
EQUITABLE LIEN
-d must have title
-acquisition of property in question may or may not be traceable to the D's wrongdoing
-wrongdoing must have some connection with property
-this is the best remedy if the value of the property decreases after the wrongdoing.
example: D misappropriates money from p and uses the money to buy shares of stock. The court may impose an equitable lien on the stock in favor of P to secure his claim against D for misapproriation of property
CONSTRUCTIVE TRUST
When a D has title to property which he is not entitled to keep in equity and good conscience, the court may impose a constructive trust on the property for the benefit of the rightful owner.
-compels the constructive trustee to convey the property to the rightful owner
-D must have wrongfully obtained title
-Acquisition or retention of title is due to the D's wrongdoing
-this is the best remedy if the value of property increases.
example: D steals 10k to buy stock. If stock increases in value, P can get constructive trust over the stock, whatever the value.
DIFFERENCE BETWEEN CONSTRUCTIVE TRUST AND EQUITABLE LIEN
In constructive trust, the res is considered the property of P wrongfully held by the D and the D must deliver the property to P.
In an equitable lien, the res belongs to the D, but P has a security interest-D owes P money and the lien is imposed on D's property to satisfy debt.
REMEDIES AGAINST INNOCENT CONVERTER
Remedy against an innocent converter is an equitable lien, not a constructive trust.
COMMINGLING OF ASSETS
Where the wrongdoer commingles her own funds and funds misappropriated from the victim in a single account, and then uses funds from that account to purchase property, an equitable lien is given to the claimant for the full amount of his claim on both the funds remaining in the account of any property purchased with funds traced from that account.
example: D commingles in a bank account 1k of her own money with 1k of embezzled money from P. D withdraws 1k to purchase stock now worth 750 dollars. P has an equitable lien on both the fund and the stock for the full amount of his claim of 1k.
INJUNCTIVE RELIEF
equity in torts: An injunction is an in personam order by the court ordering D to do something or refrain from doing something.
GENERALLY EQUITY WILL NOT ENJOIN A CRIME
exceptions: courts may apply an injunction to avoid crimes which cause invasion of property rights or pecuniary interests. When acts of the D threaten irreparable harm especially to the health and safety of the public, and when criminal prosecution will not give adequate protection, the court has the power to restrain those acts.
PRIVATE ATTORNEY GENERAL STATUTE
-permits a private party to bring suit when the attorney general or other responsible gov. agencies fail to or refuse to act against a violation of statute.
-the wrong must be to the public as a whole or a large number of persons
-CA has a private attorney general statute but most states don't.
A MAJOR PURPOSE OF AN INJUNCTION IS TO PRESERVE THE STATUS QUO
Especially TRO's and preliminary injunctions where the goal is to prevent something from happening until the court can sort things out.
injunctions may be either
-prohibitory (stops D from doing something)
-mandatory (requires D to do something)
Some courts feel that mandatory injunctions don't "preserve the status quo" because they require the D to do something that the D wouldn't otherwise do.
but even those courts will use mandatory injunctions in exceptional cases where the rights involved are clear and irreparable harm sill occur if the mandate is not followed.
example: requiring a working spouse to keep up health insurance payments for the ex.
-if the working spouse let the insurance lapse, the ex might not be able to obtain new coverage for a chronic medical condition.
INJUNCTIONS REQUIRING THE PAYMENT OF MONEY ARE OFTEN POINTS TO BE ARGUED ON AN EXAM
the payment of money is a mandatory injunction when it's purpose is to prevent irreparable harm rather than to compensate for harm that has already occured.
example: case where court orders big corporation to pay for medical exams to determine the extent of the toxic tort
3 types of injunctions
1. TRO
2. preliminary injunction
3. permanent injunction
TRO's
orders of a very short duration designed to preserve the status quo until the matter is fully heard.
NOTICE IS GENERALLY REQUIRED, BUT
When there is danger of immediate and irreparable harm before the opposition could be heard, ex part requests will be granted. When notice would frustrate the purpose of the TRO notice need not be given.
REQUIREMENTS FOR A TRO
1. P is likely to succeed on the merits
2. no adequate remedy at law
3. Irreparable harm may result without the TRO
4. balance of the hardships favors the P
5. no harm to the public
SOME JURISDICTIONS REQUIRE PARTY REQUESTING TRO OR PI TO POST A BOND
To ensure that the D is compensated if the TRO is wrongly issued. Bonds are required in federal injunctions.
WHEN TRO IS WRONGLY GRANTED
The bond will be paid to the D unless:
-the P can put forth good reasons to deny the bond
-a good faith belief in the merits of the case is not enough to avoid paying the bond
-the bond is the limit of damages the D is entitled to for wrongful TRO or PI
PRELIMINARY INJUNCTION
similiar to a TRO but can't be ordered ex parte, less extreme circumstances than TRO...same requirements to TRO but
-court will consider the likelihood of the P's success as well as the merits
-balancing the respective interests of the parties is of greater concern
TRO'S AND PRELIMINARY INJUNCTIONS EXPIRE AUTOMATICALLY UNLESS RENEWED OR A PERMANENT INJUNCTION IS GRANTED
PERMANENT INJUNCTIONS (I PUT FIVE BUCKS DOWN)
-Inadequate remedy at law
-personal or property right involved
-feasible
-balances hardship between P and D
-defenses
REMEDY AT LAW IS INADEQUATE BECAUSE
-it's too speculative
-it's too small to adequately compensate P
-because of continuing harm, the P would have to bring multiple suits
(e.g. a continuing nuisance like factory emitting toxic fumes)
-injury is irreparable
-involves land which is unique
PROPERTY VS. PERSONAL RIGHT
traditionally, courts will not issue injunctions to protect personal rights but that is no longer the case. mention this for points.
FEASIBILITY
-if it's a mandatory injunction, discuss why it's proper under the circumstances
-will the injunction achieved the intended result
-will the injunction require excessive supervision by the court or others?
BALANCE OF HARDSHIPS
In cases of intentional encroachment or public nuisance: P always winds, but argue it anyway.
Consider harm to third parties, the public the environment or the local economy.
DEFENSES TO PERMANENT INJUNCTIONS
-laches
-unclean hands
-first amendment issues (can't restraing private speech, commercial speech has less protection)
-criminal acts (equity will not enjoin a crime because it bypasses criminal protections)
exception: nuisances that are also a crime
MODIFICATION OF INJUNCTIONS (LET)
-laws have changed
-Ends of justice better served by modifying the injunction
-Things (circumstances) have changed usually controlling factors upon which injunction was granted)
INJUNCTIONS MUST BE OBEYED UNTIL THE COURT HAS MODIFIED OR TERMINATED THE INJUNCTION
(Collateral bar rule)
Unless and until an injunction has been set aside, the enjoined parties must obey the injunction. Those who disobey an injunction may not defend against an ensuing criminal contempt charge on the ground that the order was erroneous or even unconstitutional.
Defenses: The issuing court lacks jurisdiction. But under the collateral bar rule, the parties must continue to obey the injunction until the proper jurisdiction is determined. The injunction is "transparently invalid".
TERMINATION OF AN INJUNCTION
Whether an injunction will be terminated depends on whether
1. the underlying wrong has been resolved
2. the parties complied in good faith
3. there is no likelihood that the enjoined party will return to the same violations.
injunctions may be terminated completely or incrementally (for example school desegregation)
WHEN YOU APPEAL AN INJUNCTION
How is the status quo maintained during the case on appeal?
PROHIBITORY INJUNCTIONS
Are intended to maintain the status quo until adjudication on the merits. When a party appeals an injunction which is prohibitory the injunction remains in force until the appeal is decided.
MANDATORY INJUNCTIONS
Have the effect of changes: when an appeal is filed against a mandatory injunction, it will stay the injunction until the appeal is decided.
REMEDIES FOR INJURY TO PROPERTY
When a tortfeasor owes damages on property with a fluctuating value: (due to conversion, destruction or impairment) recover may be either
1. value of the subject matter or interest at the time of the conversion, destruction or impairment
2. the highest replacement value of a fluctuating commodity within a reasonable period during which P might have replaced it.
3. The additional value of the chattel due to additions or improvements of the converter (this doesn't make sense)
IN ROTHKO- estate executors sold the paintings in his estate to their own business for less than they were worth...damages could have been either
1. the amount received at sale minus amount he should have sold for at the time of the sale or
2. value of the paintings plus appreciation between breach of fiduciary duty and time of trial
in ROTHKO the court applied number two because of bad faith. When goods have a fluctuating value and there is bad faith, damages will be measured at the point where the commodity was worth most.
DAMAGES FOR HARM TO LAND
-past invasions: difference between value before and after the harm, or at the P's election and cost of restoration, loss of use of land, annoyance to occupant.
-future invasions,
P may elect to recover damages for both past and future invasions
compensation for past harm and either decrease in the value of the land caused by the continuance of the invasion, or the reasonable cost to the P for avoiding future invasions.
PURE ECONOMIC LOSS IN TORT
For example negligence which interferes with P's ability to conduct business
old rule: a party who has suffered pure economic loss in tort can't recover for negligence in tort
modern rule: when pure economic loss is foreseeable as a proximate result at the negligence of the D, damages are available.
-distinguish from strict liability: no damages for economic loss.
LOSS OF CONSORTIUM
Loss of affections, solace, companionship, society, assistance and sex.
-courts will consider the relationship between the injured part and the P
-spouses: common-law husband had an action for loss of consortium but not wives. Modern law: either spouse may bring an action for loss of consortium, deprived party may also claim emotional distress for loss
-parent child: majority rule: no action for parent/child or child/parent loss of consortium.
Min. rule: permitted if there is some serious or disabling injury.
LOSS OF CONSORTIUM IN A WRONGFUL DEATH CLAIM
Majority rule is that there is no action for loss of consortium in wrongful death only pecuniary losses are compensated in wrongful death (example: lost wages)
Ca permits recover for the loss of society, comfort and protection when a D causes a spouse or child's wrongful death. CA allows domestic partners to sue as well.
LOSS OF ENJOYMENT OF LIFE
Action for somebody who is injured and who can't fully participate in life's activities
WRONGFUL BIRTH/LIFE
There is a 50/50 split among jurisdictions whether or not a claim lies for wrongful birth or life
sterilization: 1. sought for economic reasons 2. sought for medical reasons. (see outline...never tested before)
WRONGFUL DEATH
wrongful death of fetus: courts are split as to recovery for wrongful death of unborn child. maj. allows a cause of action
Wrongful death of child:
-traditional rule: parents may recover for pecuniary losses only
-modern trend permits damages for loss of society, comfort and companionship
NIED- parent must have been in the zone of danger and aware.
-parent's recover for minor child is the amount of potential earnings as a minor, offset by the costs of raising a child.
WRONGFUL DEATH OF ADULT CHILD
Majority rule: parents may recover for the wrongful death of an adult child if they can prove a reasonable expectation of support.
WRONGFUL DEATH OF PARENTS
-heirs may recover for loss of inheritance in a wrongful death action
-P must prove that there is a high probability that the deceased would have added to the estate and left it to P.
IMPLIED CAUSE OF ACTION
The issue in these cases is whether there is an implied remedy when a federal statute or the books does not specify a private remedy. (look at the statute)
BIVENS
used when the issue is a constitutional rather than statutory right. Unless statute says otherwise damage remedy available unless "special factors".
REMEDIES FOR INVASIONS OF PERSONAL INTERESTS
Defamation: first amendment rights must be considered.
-actual malice required for issues of public concern
-courts will usually not enjoin defamation unless there is no adequate remedy at law
-commercial speech which is false, misleading, or proposes illegal transaction may be enjoined.
PRIVACY AND PUBLICITY
-damages permitted for invasion of a persons' privacy
-the press not permitted to invade a right of publicity by sharing performer's entire performance (the human cannonball)
FAMILY ISSUES
A child's name:
old rule: father had the right to have his child bear his name
new rule: best interests of the child.
court also has the right to order medical treatment of minors, even if not life-threatening.
cruzan: clear and convincing evidence of incompetent patients intent may be required
EDUCATIONAL RIGHTS
courts are reluctant to interfere but it depends; public or private school
DISCLIPINARY SUSPENSION:
public school only minimal hearing required for suspensions up to ten days.
ACADEMIC ISSUES IN PUBLIC SCHOOL
Some level of procedure is required, but not the level of notice and opportunity to be heard. courts will generally not interfer unless the school acted in an arbitrary and irrational manner or breached a duty of good faith.
DISCIPLINARY AND ACADEMIC ISSUES IN A PRIVATE SCHOOL
The court will not interfere. Remember withou state actors, there is no due process issue. However, the court may rule on contract issues.
INTERFERENCE WITH PROFESSIONAL ASSOCIATIONS
courts won't interfere unless it affects the right to work
PUBLIC EMPLOYMENT
to comply with due process termination of public employment requires notice and a hearing.
CALCULATING DAMAGES/SETTLEMENTS
1. salary for one year - expenses of working
2. x years of expected work
3. x discount rate
4. + inflation rate
TAXATION ISSUES IN DAMAGES
-Personal injury damages or NOT taxable
-some states permit jury instruction that damages are not taxable
-compensatory damages are not taxable
-punitive damages are taxable
INSURANCE CONSIDERATIONS
collateral source rule: when a p gets funds from a collateral source like an insurance company, the d may not deduct those payments from the damage award.
remember MICRA
punitive damages: most insurance companies exclude coverage for punis: majority rule is that payment of punis by insurance companies violates public policy
STRUCTURED SETTLEMENTS
instead of lump sum payment for a large damage award, a structured settlement is divided and distributed over time.
PEOPLE LOSSES
-loss of consortium
consortium includes loss of affection, solace, companionship, society, assistance, and sex
-deprived spouses may also claim emotional damages due to loss
-courts will consider the quality of the relationship between P and injured party
SPOUSES
common law-husband had action for loss of consortium, but not wives
modernly-either spouse had an action for loss of consortium.
PARENTS
majority rule: no action for parent/child or child/parent loss of consortium
minority rule: permit it if there is a serious, permanent, or disabling injury. (court may consider quality of relationship)
IN WRONGFUL DEATH ACTION
majority-no action for loss of consortium in wrongful death
-only pecuniary losses are compensated in wrongful death
california permits recover for loss of society, comfort and protection when a D causes a spouse's or child's wrongful death (use these buzzwords)
california allows domestic partners to sue for wrongful death.
LOSS OF ENJOYMENT OF LIFE
This is an action for somebody who is injured and who can't participate fully in life's activities.
majority rule: loss of enjoyment is part of pain and suffering and is not recognized as a separate cause of action
-it is not the same as mental suffering
-some jurisdictions recognize loss of enjoyment as a separate cause of action from pain and suffering.
where it is recognized, courts have held that there must be some level of cognitive awareness in the victim to understand the loss.
theory: damages for loss of enjoyment are compensatory and personal to the injured party. Can't be asserted by a spouse, parent, or child.
In other words, if the injured party is unconscious, no action for loss of enjoyment.
REMEDIES
1. start with legal remedies(money)before going to equity
2. Then restitution which has legal and equitable remedies
3. When legal remedies are inadequate, it's time for equitable remedies like specific performance
CONTRACT DAMAGES
1. Must be reasonably foreseeable (hadley v. baxendale)
2. be definite and certain (was it in contemplation by both parties at the time the contract was made)
damages must be proven to a reasonable certainty: there are two fact patterns that trigger issues of certainty:
1. lost profits in a new business
2. losses due to delay in fulfilling a contract
LOST PROFITS IN A NEW BUSINESS
old rule: profits not reasonably certain, no recovery
new rule: need evidence of
1. general business conditions
2. success of similiar businesses
3. past profits
4. prior experiences
LOSSES DUE TO DELAY IN FULFILLING CONTRACT
innocent party may be entitled to the overhead costs incurred during delay. No test, reasonable certainty. if damages cannot be proven to a reasonable certainty, look to reliance damages
SEVEN TYPES OF CONTRACT DAMAGES
1. expectation
2. reliance
3. consequential
4. nominal
5. punitives
6. damages for emotional distress
7. liquidated damages
EXPECTATION DAMAGES
Put the P in the position he would have been in had the contract been fully performed. two formulas
1. value-value of d's expected performance minus the benefits P receives for not having to completehis own performance
2. cost-cost forumula is used when the P's primary interest was the perfomance itself. This is the cost of obtaining substitute performance.
example: P contraced with Dto have d install electrical service in an area P planned to sell as a residential subdivision. If all P wanted was electrical service, the cost is simply for substitute performance. If P wanted the value of the service (increase in the amount he could sell each lot for because it has electrical service)then the value formula applies
EXPECTATION DAMAGES FOR DEFECTIVE PERFORMANCE OR NON-CONFORMING GOODS
Gen. Rule:value of k had it been correctly performed minus value of actual performance.
exception: when the difference between expected performance or goods and actual performance and goods is so substantial that the property is unusable or unsafethe measure of damages is what it takes to correct or cmplete performance, even when it exceeds contract price.
MITIGATION IS REQUIRED
Recovery is barred if the P does not make reasonable efforts to mitigate contract damages. D must prove that mitigation has no ocurred.
MITIGATION I SALES CONTRACTS
Buyer's remedies. When the seller breaches, the buyer cannot get expectation damages unless he makes a good faith effort to cover by seeking substitute performance and buyer entitled t consequential damages incurred in seeking cover including
1. difference between K price and actual price for such goods
2. lost profits
3. costs of stopping a project
4. storage
5. rental
BUT money saved by not having to return performance must be deducted from the expectation and consequential damages.
seller's remedies: when the buyer breaches, the seller may still be entitled to lost profits even if he has resold the goods, provided the seller has an unlimited supply.
example: buyer breaches on contract to buy a boat. the seller manages to resell the boat a few months later. But, the seller is still entitled to lost profits because he had an unlimited supply and could have sold two boats in the same period of time. This does not apply to unique goods, or goods with a limited supply.
EXPECTATION DAMAGES IN LEASE CONTRACTS
anticipatory: lessor has started to remodel the premises in anticipation of lesee's occupancy. Lessee breaches contract before moving in. Lessor re-leases property for a lower rent.
Lease in progress: (tenant breaches a lease in progress by moving out before lease period is up). At common law, leases were seen as conveyances. The lesee "owned" the property for the duration of the lease and was responsiblefor the rent the entire time. Modern law views leases as both conveyances and contracts.
Landlord is required to mitigate damages by making reasonable efforts to re-rent the premises.
RELIANCE DAMAGES
Reliance damages return the P to the position he would have been in before the parties entered into the agreement. P may recover expenses incurred in reliance on the agreement.
RELIANCE DAMAGES ARE PROPER WHEN
1. It is impossible to measure expectation damages to a reasonable certainty
2. andP recovers on the theory of promissory estoppel
CALCULATING RELIANCE DAMAGES
Cost to P in reliance on contract plus other detriment incurred as a result of the contract.
example: the "heddie lamar" nose. Court could not measure expectation damages with reasonable certainty. P was awarded costs of the surgery, plus pain, suffering, mental anguish and worsening of condition.
don't forget: lost profits are not reliance damages; they are expectation damages.
CONSEQUENTIAL DAMAGES
Damages incurred as a result of D's breach.
Lost profits may be consequential if the seller breaches and the buyer is unable to complete performancein another contract, thus losing profits.
example: Hardware store agrees to loan contractor goods on credit until contractor builds house and gets paid. Hardware storE backs out, contractor can't finish house and sell it. Market drops by the time he gets what he needs to finish the house.
Lost profits are consequential to the hardware store's breach.
NOMINAL DAMAGES
Token damages that show the D has acted wrongfully but the P is not entitled to any other damages.
reasons: P suffered no actual harm (but if there was actual harm, look to reliance damages) OR P's harm can't be proven to a reasonable certainty.
PUNITIVE DAMAGES
no punies in contract cases.
exceptions:when the same facts and circumstances that give rise to the breach also constitutean independent intentional tort, punitive damages may be awarded in tort. And, when the implied covenant of good faith and fair dealing is breached in an insuance contract courts have permitted punitive damages. Breach of the covenenant is treated as a type of independent tort. This applies ONLY to insurance contracts.
DAMAGES FOR EMOTIONAL DISTRESS
General rule: no emotional damages for breach of K because it is too remote and not foreseeable.
exceptions: contract has elements of 'peronalty': meaning it is made to secure relife from inconvenience or annoyance or to confer particular enjoyment.
AND adequate consideration is not easilydetermined by the terms of the contract.
examples: contract for funeral services, marriage contracts, doctor's agreements and dwelling places.
LIQUIDATED DAMAGES
1. Only enforceable if they are reasonable, if the damages are otherwise difficult to calculate
2. cannot be a penalty
3. cannot violate public policy.
The burden is on the party attacking the liquidated damages clause to show that the damages are not reasonable. Presence of such a clause can be a defense to specific performance if the contract specifies it is the only relief available.
RESTITUTION AND RESCISSION
Restores the something or it's value when the recipient has been unjustly enriched and there is no legal justification which allows him to retain his benefit.
Replevin (legal and equitable)
quasi-contract
equitable lien
constructive trust
subrogation
remedies for good faith improvers of land
LEGAL REPLEVIN
Return of specific property
-court will hold the property until final judgment sheriff will retrieve property
-D can post a bond allowing him to keep the property in his possession until final judgment
EQUITABLE REPLEVIN
Recover of specific chattel when legal remedies are inadequate
-P must show that money dmages are inadequate because theproperty has "pretium" value, that is sentimental value.
QUASI-CONTRACT
Legal fiction imposed by the court to avoid unjust enrichment. "where one has been unjustly enriched at the expense of another, even if there was no contractual agreement or a contract was unenforceable, the court will impose an obligation for restitution to the injured party in the amount to which the party has been unjustly enriched.
EQUITABLE RESCISSION OF A CONTRACT
Cancellation of contract by decree of court.
rescission is permitted for
invalid contracts
fraud
mutual mistake
material breach
default
breach of fiduciary duty
IN RESCISSION
In rescission, the court treats the rescinded contract as if it was never made. Restitution will be ordered to return from each party the benefits he received from others.
requirement: The grounds which make the contract uneforceable must have ocurred at or before the time the contract was entered into. Rescission will not be granted if parties cannot be returned to their original positions. Consideration must be returned in order to rescind.
DEFENSES TO RESCISSION
traditionally, a party who is in breach could not rescind, but modern courts will allow it if
1. the breach was relatively minor and not substantial
2. The parties can be returned to their original position
3. restitution of benefits conferred can be obtained less an offset for the damages to the non-breaching party
4. Unclean hands and laches may apply.
LEGAL RESCISSION
legal rescission occurs when the parties agree to rescind the contract without judicial order.
GROUNDS FOR RESCISSION
innocent misrepresentation: Rescission is the only remedy.
-misrepresentation of a material fact by one who reasonably believes the facts presented are true.
example: S claims property is one hundred acres because he reasonably relied on a survey stating there were one hundred acres when in fact there were only 90 acres.
NEGLIGENT MISREPRESENTATION
Misrepresentation of a material fact by a party who had a duty to ascertain the truth of the matter and failed to do so.
example: A sells C to Blackacre, claiming it has 100 acres, but never making any attempt to determine actual acreage. In fact there are ninety acres.
-rescission and restitution are possible
-or Specific performance for the buyer
INTENTIONAL (FRAUDULENT) AND RECKLESS MISREPRESENTATION
-Intentional/fraudulent misrepresentation of a material fact with the intent to decieve.
-reckless (doesn't check but tells anyway)
Remedies for intentional and reckless mispresentation;
Rescission: P may get rescission and damages
specific performance? Buyer, as innocent party, may be entitled to specific performance with abatement.
CONCEALMENT-suppression of material fact with the intent to deceive
Party who allegedly concealed must have duty to disclose
parties dealing at arm's length rarely have a duty to disclose
CONCEALMENT REMEDIES:
Rescission is granted only when concealment was coupled with other facts of inequality such as
inadequacy of price term
overreacing
sharp practice
-damages are available
-innocent party may get specific performance
MUTUAL MISTAKE
-mistake must be more than material, it must go to the heart of the bargain.
-can't be collateral
-look for ambiguous terms
RESCISSION IS THE PRIMARY REMEDY FOR MUTUAL MISTAKE
-specific performance is generally not permitted because there was no meeting of the minds
when price is inadequate:
CA says no SP if price alone is inadequate
most jurisdictions require something more than inadequate price term, such as sharp practice, bad faith, undue influence
Some states need "shock the conscience" inadequacy
UNILATERAL MISTAKE
Generally requires evidence of fraud, undue influence, concealment, unconscionability ro bad faith. Inadequacy of price alone is not enough unless it shocks the conscience. When there is no evidence of the above, rescission may still be granted when the following requirements are met.
1. The party seeking relief must be blameless and not negligent
2. the party must seek rescission promptly
3. it must be possible to restore the parties to their original positions.
SPECIFIC PERFORMANCE FOR UNILATERAL MISTAKE
-When there is no fraud involved with a unilateral mistake, the court has discretion whether or not to order specific performance by balancing equities.
-specific performance will only be graned if it is fair, equitable, and reasonable.
-may not grant it if result would be harsh or oppressive
-inadequacy of price in a unilateral mistake is not sufficient for specific performance except in CA
MORE REMEDIES FOR UNILATERAL MISTAKE
-damages may be available to innocent party
-reformation is permitted where one of the parties knows at the time of the contract signing that the writing does not conform to the parties actual agreement.
REFORMATION
-reformation is permitted when the terms of the written K do not reflect the agreement of the parties
-reformation is proper remedy for
1. scrivener's error
2. unilateral mistake when one of the parties is aware the writing does not reflect the agreement.
REFORMATION REQUIRES
-a valid oral agreement that is unambiguous and clear
-clear and convincing evidence that the writing does not reflect the true intent of the parties
DEFENSES TO REFORMATION
-laches
-sale to BFP
-negligence on the part of mistaken party
-when the contract has been fully performed as written.
note: you can't use the parole evidence rule or SOF as defenses to reformation.
SCRIVENER'S ERROR
when parties have reached a mutually acceptable agreement but there was an error in reducing it to a writing, the primary remedy is reformation of the contract.
SPECIFIC PERFORMANCE
LiquidSOFTOE3B'sCHILD
Liquidated damages clause
statute of frauds
time is of the essence
three breaches: breach of contract, breach duty of good faith and fair dealing, breach of fiduciary duty
clean hands
hardship
Inadequate practice
laches
Difficult to supervise
BUT WAIT: specific performance is for when money damages are inadequate.
1. damages at law are inadequate
2. definite and certain terms
WHAT MAKES DAMAGES AT LAW INADEQUATE?
1. When money damages are hard to measure with reasonable certainty
2. when it is difficult to get subsitute performance (often seen on Tinney's exams is someone who does something special to antique cars, like custom painting or detailing that can't be done by others. Keep in mind issues of involuntary servitude
3. When the contract concerns something unique
ONCE YOU HAVE DETERMINED THAT SPECIFIC PERFORMANCE IS REQUIRED BECAUSE LEGAL REMEDIES ARE INADEQUATE, RUN THROUGH THE ELEVEN DEFENSE AND SEE WHAT STICKS
LIQUIDATED DAMAGES
When a contract specifies that liquidated damages are the only remedy analyze the liquidated damages clause. It must be a reasonable estimate of the anticipated loss and actual damages must be difficult or impossible to ascertain.
STATUTE OF FRAUDS
The statute of frauds provides that certain types of contracts must be in writing in order to be enforceable and signed by the party to be charged.
MYLEGS:
Marriage contracts
year to execute
Land
Executorship
Goods costing more than five hundred dollars
sureties
DEFENSES TO SOF
Fraud-when a party is falsely inducted into the transaction in reliance on a promise specific performance is available.
PART PERFORMANCE
AS a defense to the SOF.
-When one of the parties has partially performed in reliance on a promise, the other party will be estopped from denying the existence of the promise. part performance must be of such nature that it indicates the existence and terms of the contract and be substantial, resulting in enough of a change in position that to refuse to enforce the K because of the SOF would be unjust.
-Watch out for "insufficient acts of part performance"-these are acts that are not sufficient to take the act out of the SOF.
Payment of money- unless the party admits in court that he received the money as payment for the contract, the reciept of money does not prove that an agreement existed.
quasi-contract: is the appropriate remedy to give restitution for money paid.
taking possession of property:
common law: taking possession of property was sufficient for part performance
modernly: taking possession of property alone is not sufficient to show that the K was for the sale of land.
other factors: such as making valuable improvements to the land and payment are necessary for part performance to take it out of the SOF
MOST COMMON PART PERFORMANCE SCENARIO
Old man says "i'll give you my house if you come and care for me" and dies before conveying the house. this never works. Possession of the property and coming to the house were not sufficient part performance to indicate to indicate the terms of the K. Don't forget quantum meruit or constructive trust as a remedy.
TIME IS OF THE ESSENCE
implied in every contract at law.; in other words, when you are seeking legal damages if a time is specified, failure to meet the time term is breach and legal damages are appropriate.
but for contract in equity, it must be expressed clearly in the contract.
in other words, when you are seeking equitable relief like specific performance or the circumstances of the contract must demonstrate the time is of the essence, for example perishable goods.
equity courts are reluctant to enforce the TOE if it leads to forfeiture.
-courts will not enforce time-based cancellation clauses when there is evidence of fraud or overreaching
LOOK OUT FOR WAIVER OF TIME
Repeated acceptance of payments may be seen as waiver of TOE.
BREACHES BY A PARTY
-breach of K by P
-breach of fiduciary duty by P
-breach of duty of good faith and fair dealing
breach of K by P: as a general rule, parties in breach may not be granted specific performance.
breach of fiduciary duty: P is not entitled to specific performance if he has breached a fiduciary duty. The duty is heightened when there is a fiduciary duty between the parties such as agent to a principal. A fiduciary duty is one of the highest degrees of good faith and fair dealing. In that case, the agent has a duty ti disclose all material facts and fraud is not required to rescind a contract when there has been breach of fiduciary duty.
breach of duty of good faith and fair dealing: Every contract carries with it an implied duty of good faith and fair dealing. Courts will look beyond the actual language of the contract to determine what constitutes good faith and fair dealing for each specific case.
example: taking advantage of a unilateral mistake of the other party (for example failure to remind the other party of the end of an option period when they clearly did not remember)
-sellers usually have a higher duty of of disclosure than buyer, often imposed by statute. For example, if a buyer at a garage sale knows a dish is worth thousands, she does not have a duty to disclose it to the seller. but if the seller knows the appliance doesn't work, she has a duty to disclose it to the buyer.
CLEAN HANDS DOCTRINE
P not entitled to equitable remedies when he has unclean hands due to inequitable conduct directly related to contract.
LEGAL AND EQUITABLE REMEDIES
A p who asks for equitable remedies such as specific performance may still be entitled to damages in addition to or instead of equitable relief
HARDSHIP
A court may refuse to order specific performance when to do so would impose unreasonable hardship on the other party. When a contract is unconscionable because it imposes hardship, the court may
1. refuse to enforce the contract
2. enforce only the provisions that are NOT unconscionable
3. may limit the effects of unconscionable provisions to avoid an unconscionable result.
INADEQUATE PRICE TERM
-specific performance cannot be compelled when consideration is inadequate: a court will not enforce a contract unless it is fair, just and reasonable. The courts will balance the hardships and benefits to the respective parties to determine whether or not consideration is truly inadequate.
-inadequate price-ordinarily, inadequacy of price is not enough to refuse to enforce a contract. But when the discrepancy in price is so gross that it shocks the conscience and provides conclusive evidence of fraudulent intent, the court may refuse to grant specific performance.
LACHES
The court will not order Specific performance when there was an unreasonable delay in prosecution of the case caused by P.
-unreasonable delay
-detriment to D
DIFFICULT TO SUPERVISE
When specific performance is too difficult to enforce or supervise, it may act as a defense to specific performance.
example: personal service contracts and construction contracts
old rule- No specific performance for construction contracts
new rule-most courts now allow specific performance for construction contracts
DAMAGES IN TORT
compensatory damages: special and general (special: wages, general: pain and suffering)
consequential damages
nominal damages
punitive damages
damages for emotional distress
COMPENSATORY DAMAGES
This standard remedy for torts is intended to compensate the P for losses suffered, restoring him to as good a position as he would have been had the injury not been inflicted. Two types: general and special
general compensatory damages: Easily foreseeable and anticipated damages. It is foreseeable that if you run a stop sign and hit another car, that the occupants will experience pain and suffering
special damages: must be specifically proven because they are not easily foreseeable from the mere occurrence of the wrongdoing.
-lost wages
-past and future medical costs arising from the injury
-loss of consortium
-loss of enjoyment
example: when D ran the stop sign he couldn't foresee that he would injure an attorney and be responsible for damages in the amount of an attorney's salary vs. a teachers.
REQUIREMENTS FOR COMPENSATORY DAMAGES
-foreseeable
-unavoidable
-causation
-certainty
FORESEEABLE: damages must be foreseeable in order to be compensable
UNAVOIDABLE: The P must take reasonable steps to mitigate or avoid the damages. D has the burden of proof that damages could have been mitigated or avoided.
CAUSATION: The damages must be proximately caused by the D's wrongdoing. "but for" test...but for the D's running of the stop sign, the P would not have been injured.
CERTAINTY: The P must prove the damages with reasonable certainty. Reasonable certainty is enough to satisfy a reasonable person.
CONSEQUENTIAL DAMAGES
Incidental costs as a result of the injury. example: cost of a rental car while damaged car is being repaired.
NOMINAL DAMAGES
-when there is no actual injury, nominal damages serve to;
-vindicate the P
-protect important public interest
example: violation of constitutional rights: when there is no actual injury, P is entitled only to nominal damages. Punitive and consequential damages may be awarded if there is actual injury in fact.
PUNITIVE DAMAGES IN TORT
-punitive damages are intended to punish the wrongdoer, deter wrongful behavior, encourage litigation to promote defense of the law.
-Some states don't allow punitive damages: on the theory that punitive damages be paid to victims fund rather than to the P.
-not tax deductible
-insurance companies don't pay punis
-can be based on financial status of D
-except in negligence, actual damage not needed
DAMAGES FOR EMOTIONAL DISTRESS
available in tort since IIED and NIED are torts
EMOTIONAL DISTRESS WITHOUT PHYSICAL INJURY
old rule: no recovery for NIED without physical injury
modern rule: actual physical injury is not required as long as reasonable damages can be proven
pecuniary damages include medical expenses, lost earnings, and the cost of custodial care.
non-pecuniary: pain and suffering, loss of ability to engage in certain activities
MOST PERSONAL INJURY DAMAGES ARE NOT TAXABLE
exception: punitive damages
COLLATERAL SOURCE RULE
-When P receives funds from a collateral source (usually insurance coverage) the D may not deduct those payments from the damage award. Reasoning is it would penalize the P for having insurance. However, insurance companies usually put a lien against the judgment to recover the costs.
MICRA CAP ON MEDICAL MALPRACTICE
California law caps non-economic damages in medical malpractice at 250K. Under MICRA, D may deduct collateral source benefits as long as the costs of those benefits are factored in.
STRUCTURED SETTLEMENTS
payments divided and distributed over time
-usually in the form of annuities purchased by D
-tax advantages for P because a lump sum award would quickly be converted to taxable assets.
-provides long-term financial security for P
REMITTITUR AND ADDITUR
remittitur: a court may reduce the amount of damages if the award is excessive. P is offered the choice of a new trial by accepting a reduction in the award.
smart to choose
additur: Allows a D to avoid a new trial by accepting an increase in verdict. Often seen in cases involving a run away jury. Very rare. Not allowed in Fed. court
RESTITUTIONARY RELIEF
EQUITABLE LIEN
-d must have title
-acquisition of property in question may or may not be traceable to the D's wrongdoing
-wrongdoing must have some connection with property
-this is the best remedy if the value of the property decreases after the wrongdoing.
example: D misappropriates money from p and uses the money to buy shares of stock. The court may impose an equitable lien on the stock in favor of P to secure his claim against D for misapproriation of property
CONSTRUCTIVE TRUST
When a D has title to property which he is not entitled to keep in equity and good conscience, the court may impose a constructive trust on the property for the benefit of the rightful owner.
-compels the constructive trustee to convey the property to the rightful owner
-D must have wrongfully obtained title
-Acquisition or retention of title is due to the D's wrongdoing
-this is the best remedy if the value of property increases.
example: D steals 10k to buy stock. If stock increases in value, P can get constructive trust over the stock, whatever the value.
DIFFERENCE BETWEEN CONSTRUCTIVE TRUST AND EQUITABLE LIEN
In constructive trust, the res is considered the property of P wrongfully held by the D and the D must deliver the property to P.
In an equitable lien, the res belongs to the D, but P has a security interest-D owes P money and the lien is imposed on D's property to satisfy debt.
REMEDIES AGAINST INNOCENT CONVERTER
Remedy against an innocent converter is an equitable lien, not a constructive trust.
COMMINGLING OF ASSETS
Where the wrongdoer commingles her own funds and funds misappropriated from the victim in a single account, and then uses funds from that account to purchase property, an equitable lien is given to the claimant for the full amount of his claim on both the funds remaining in the account of any property purchased with funds traced from that account.
example: D commingles in a bank account 1k of her own money with 1k of embezzled money from P. D withdraws 1k to purchase stock now worth 750 dollars. P has an equitable lien on both the fund and the stock for the full amount of his claim of 1k.
INJUNCTIVE RELIEF
equity in torts: An injunction is an in personam order by the court ordering D to do something or refrain from doing something.
GENERALLY EQUITY WILL NOT ENJOIN A CRIME
exceptions: courts may apply an injunction to avoid crimes which cause invasion of property rights or pecuniary interests. When acts of the D threaten irreparable harm especially to the health and safety of the public, and when criminal prosecution will not give adequate protection, the court has the power to restrain those acts.
PRIVATE ATTORNEY GENERAL STATUTE
-permits a private party to bring suit when the attorney general or other responsible gov. agencies fail to or refuse to act against a violation of statute.
-the wrong must be to the public as a whole or a large number of persons
-CA has a private attorney general statute but most states don't.
A MAJOR PURPOSE OF AN INJUNCTION IS TO PRESERVE THE STATUS QUO
Especially TRO's and preliminary injunctions where the goal is to prevent something from happening until the court can sort things out.
injunctions may be either
-prohibitory (stops D from doing something)
-mandatory (requires D to do something)
Some courts feel that mandatory injunctions don't "preserve the status quo" because they require the D to do something that the D wouldn't otherwise do.
but even those courts will use mandatory injunctions in exceptional cases where the rights involved are clear and irreparable harm sill occur if the mandate is not followed.
example: requiring a working spouse to keep up health insurance payments for the ex.
-if the working spouse let the insurance lapse, the ex might not be able to obtain new coverage for a chronic medical condition.
INJUNCTIONS REQUIRING THE PAYMENT OF MONEY ARE OFTEN POINTS TO BE ARGUED ON AN EXAM
the payment of money is a mandatory injunction when it's purpose is to prevent irreparable harm rather than to compensate for harm that has already occured.
example: case where court orders big corporation to pay for medical exams to determine the extent of the toxic tort
3 types of injunctions
1. TRO
2. preliminary injunction
3. permanent injunction
TRO's
orders of a very short duration designed to preserve the status quo until the matter is fully heard.
NOTICE IS GENERALLY REQUIRED, BUT
When there is danger of immediate and irreparable harm before the opposition could be heard, ex part requests will be granted. When notice would frustrate the purpose of the TRO notice need not be given.
REQUIREMENTS FOR A TRO
1. P is likely to succeed on the merits
2. no adequate remedy at law
3. Irreparable harm may result without the TRO
4. balance of the hardships favors the P
5. no harm to the public
SOME JURISDICTIONS REQUIRE PARTY REQUESTING TRO OR PI TO POST A BOND
To ensure that the D is compensated if the TRO is wrongly issued. Bonds are required in federal injunctions.
WHEN TRO IS WRONGLY GRANTED
The bond will be paid to the D unless:
-the P can put forth good reasons to deny the bond
-a good faith belief in the merits of the case is not enough to avoid paying the bond
-the bond is the limit of damages the D is entitled to for wrongful TRO or PI
PRELIMINARY INJUNCTION
similiar to a TRO but can't be ordered ex parte, less extreme circumstances than TRO...same requirements to TRO but
-court will consider the likelihood of the P's success as well as the merits
-balancing the respective interests of the parties is of greater concern
TRO'S AND PRELIMINARY INJUNCTIONS EXPIRE AUTOMATICALLY UNLESS RENEWED OR A PERMANENT INJUNCTION IS GRANTED
PERMANENT INJUNCTIONS (I PUT FIVE BUCKS DOWN)
-Inadequate remedy at law
-personal or property right involved
-feasible
-balances hardship between P and D
-defenses
REMEDY AT LAW IS INADEQUATE BECAUSE
-it's too speculative
-it's too small to adequately compensate P
-because of continuing harm, the P would have to bring multiple suits
(e.g. a continuing nuisance like factory emitting toxic fumes)
-injury is irreparable
-involves land which is unique
PROPERTY VS. PERSONAL RIGHT
traditionally, courts will not issue injunctions to protect personal rights but that is no longer the case. mention this for points.
FEASIBILITY
-if it's a mandatory injunction, discuss why it's proper under the circumstances
-will the injunction achieved the intended result
-will the injunction require excessive supervision by the court or others?
BALANCE OF HARDSHIPS
In cases of intentional encroachment or public nuisance: P always winds, but argue it anyway.
Consider harm to third parties, the public the environment or the local economy.
DEFENSES TO PERMANENT INJUNCTIONS
-laches
-unclean hands
-first amendment issues (can't restraing private speech, commercial speech has less protection)
-criminal acts (equity will not enjoin a crime because it bypasses criminal protections)
exception: nuisances that are also a crime
MODIFICATION OF INJUNCTIONS (LET)
-laws have changed
-Ends of justice better served by modifying the injunction
-Things (circumstances) have changed usually controlling factors upon which injunction was granted)
INJUNCTIONS MUST BE OBEYED UNTIL THE COURT HAS MODIFIED OR TERMINATED THE INJUNCTION
(Collateral bar rule)
Unless and until an injunction has been set aside, the enjoined parties must obey the injunction. Those who disobey an injunction may not defend against an ensuing criminal contempt charge on the ground that the order was erroneous or even unconstitutional.
Defenses: The issuing court lacks jurisdiction. But under the collateral bar rule, the parties must continue to obey the injunction until the proper jurisdiction is determined. The injunction is "transparently invalid".
TERMINATION OF AN INJUNCTION
Whether an injunction will be terminated depends on whether
1. the underlying wrong has been resolved
2. the parties complied in good faith
3. there is no likelihood that the enjoined party will return to the same violations.
injunctions may be terminated completely or incrementally (for example school desegregation)
WHEN YOU APPEAL AN INJUNCTION
How is the status quo maintained during the case on appeal?
PROHIBITORY INJUNCTIONS
Are intended to maintain the status quo until adjudication on the merits. When a party appeals an injunction which is prohibitory the injunction remains in force until the appeal is decided.
MANDATORY INJUNCTIONS
Have the effect of changes: when an appeal is filed against a mandatory injunction, it will stay the injunction until the appeal is decided.
REMEDIES FOR INJURY TO PROPERTY
When a tortfeasor owes damages on property with a fluctuating value: (due to conversion, destruction or impairment) recover may be either
1. value of the subject matter or interest at the time of the conversion, destruction or impairment
2. the highest replacement value of a fluctuating commodity within a reasonable period during which P might have replaced it.
3. The additional value of the chattel due to additions or improvements of the converter (this doesn't make sense)
IN ROTHKO- estate executors sold the paintings in his estate to their own business for less than they were worth...damages could have been either
1. the amount received at sale minus amount he should have sold for at the time of the sale or
2. value of the paintings plus appreciation between breach of fiduciary duty and time of trial
in ROTHKO the court applied number two because of bad faith. When goods have a fluctuating value and there is bad faith, damages will be measured at the point where the commodity was worth most.
DAMAGES FOR HARM TO LAND
-past invasions: difference between value before and after the harm, or at the P's election and cost of restoration, loss of use of land, annoyance to occupant.
-future invasions,
P may elect to recover damages for both past and future invasions
compensation for past harm and either decrease in the value of the land caused by the continuance of the invasion, or the reasonable cost to the P for avoiding future invasions.
PURE ECONOMIC LOSS IN TORT
For example negligence which interferes with P's ability to conduct business
old rule: a party who has suffered pure economic loss in tort can't recover for negligence in tort
modern rule: when pure economic loss is foreseeable as a proximate result at the negligence of the D, damages are available.
-distinguish from strict liability: no damages for economic loss.
LOSS OF CONSORTIUM
Loss of affections, solace, companionship, society, assistance and sex.
-courts will consider the relationship between the injured part and the P
-spouses: common-law husband had an action for loss of consortium but not wives. Modern law: either spouse may bring an action for loss of consortium, deprived party may also claim emotional distress for loss
-parent child: majority rule: no action for parent/child or child/parent loss of consortium.
Min. rule: permitted if there is some serious or disabling injury.
LOSS OF CONSORTIUM IN A WRONGFUL DEATH CLAIM
Majority rule is that there is no action for loss of consortium in wrongful death only pecuniary losses are compensated in wrongful death (example: lost wages)
Ca permits recover for the loss of society, comfort and protection when a D causes a spouse or child's wrongful death. CA allows domestic partners to sue as well.
LOSS OF ENJOYMENT OF LIFE
Action for somebody who is injured and who can't fully participate in life's activities
WRONGFUL BIRTH/LIFE
There is a 50/50 split among jurisdictions whether or not a claim lies for wrongful birth or life
sterilization: 1. sought for economic reasons 2. sought for medical reasons. (see outline...never tested before)
WRONGFUL DEATH
wrongful death of fetus: courts are split as to recovery for wrongful death of unborn child. maj. allows a cause of action
Wrongful death of child:
-traditional rule: parents may recover for pecuniary losses only
-modern trend permits damages for loss of society, comfort and companionship
NIED- parent must have been in the zone of danger and aware.
-parent's recover for minor child is the amount of potential earnings as a minor, offset by the costs of raising a child.
WRONGFUL DEATH OF ADULT CHILD
Majority rule: parents may recover for the wrongful death of an adult child if they can prove a reasonable expectation of support.
WRONGFUL DEATH OF PARENTS
-heirs may recover for loss of inheritance in a wrongful death action
-P must prove that there is a high probability that the deceased would have added to the estate and left it to P.
IMPLIED CAUSE OF ACTION
The issue in these cases is whether there is an implied remedy when a federal statute or the books does not specify a private remedy. (look at the statute)
BIVENS
used when the issue is a constitutional rather than statutory right. Unless statute says otherwise damage remedy available unless "special factors".
REMEDIES FOR INVASIONS OF PERSONAL INTERESTS
Defamation: first amendment rights must be considered.
-actual malice required for issues of public concern
-courts will usually not enjoin defamation unless there is no adequate remedy at law
-commercial speech which is false, misleading, or proposes illegal transaction may be enjoined.
PRIVACY AND PUBLICITY
-damages permitted for invasion of a persons' privacy
-the press not permitted to invade a right of publicity by sharing performer's entire performance (the human cannonball)
FAMILY ISSUES
A child's name:
old rule: father had the right to have his child bear his name
new rule: best interests of the child.
court also has the right to order medical treatment of minors, even if not life-threatening.
cruzan: clear and convincing evidence of incompetent patients intent may be required
EDUCATIONAL RIGHTS
courts are reluctant to interfere but it depends; public or private school
DISCLIPINARY SUSPENSION:
public school only minimal hearing required for suspensions up to ten days.
ACADEMIC ISSUES IN PUBLIC SCHOOL
Some level of procedure is required, but not the level of notice and opportunity to be heard. courts will generally not interfer unless the school acted in an arbitrary and irrational manner or breached a duty of good faith.
DISCIPLINARY AND ACADEMIC ISSUES IN A PRIVATE SCHOOL
The court will not interfere. Remember withou state actors, there is no due process issue. However, the court may rule on contract issues.
INTERFERENCE WITH PROFESSIONAL ASSOCIATIONS
courts won't interfere unless it affects the right to work
PUBLIC EMPLOYMENT
to comply with due process termination of public employment requires notice and a hearing.
CALCULATING DAMAGES/SETTLEMENTS
1. salary for one year - expenses of working
2. x years of expected work
3. x discount rate
4. + inflation rate
TAXATION ISSUES IN DAMAGES
-Personal injury damages or NOT taxable
-some states permit jury instruction that damages are not taxable
-compensatory damages are not taxable
-punitive damages are taxable
INSURANCE CONSIDERATIONS
collateral source rule: when a p gets funds from a collateral source like an insurance company, the d may not deduct those payments from the damage award.
remember MICRA
punitive damages: most insurance companies exclude coverage for punis: majority rule is that payment of punis by insurance companies violates public policy
STRUCTURED SETTLEMENTS
instead of lump sum payment for a large damage award, a structured settlement is divided and distributed over time.
PEOPLE LOSSES
-loss of consortium
consortium includes loss of affection, solace, companionship, society, assistance, and sex
-deprived spouses may also claim emotional damages due to loss
-courts will consider the quality of the relationship between P and injured party
SPOUSES
common law-husband had action for loss of consortium, but not wives
modernly-either spouse had an action for loss of consortium.
PARENTS
majority rule: no action for parent/child or child/parent loss of consortium
minority rule: permit it if there is a serious, permanent, or disabling injury. (court may consider quality of relationship)
IN WRONGFUL DEATH ACTION
majority-no action for loss of consortium in wrongful death
-only pecuniary losses are compensated in wrongful death
california permits recover for loss of society, comfort and protection when a D causes a spouse's or child's wrongful death (use these buzzwords)
california allows domestic partners to sue for wrongful death.
LOSS OF ENJOYMENT OF LIFE
This is an action for somebody who is injured and who can't participate fully in life's activities.
majority rule: loss of enjoyment is part of pain and suffering and is not recognized as a separate cause of action
-it is not the same as mental suffering
-some jurisdictions recognize loss of enjoyment as a separate cause of action from pain and suffering.
where it is recognized, courts have held that there must be some level of cognitive awareness in the victim to understand the loss.
theory: damages for loss of enjoyment are compensatory and personal to the injured party. Can't be asserted by a spouse, parent, or child.
In other words, if the injured party is unconscious, no action for loss of enjoyment.
posted by Robert Smith at 9:51 AM
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