Equitable Remedies (Specific Performance, rescission, reformation)

Question 1

Specific Performance requirements

Answer 1

P must show (1) Contract is valid (certain and definite); (2) Plaintiff must have performed and satisfied K; (3) inadequate legal remedy alternative; (4) feasibility of enforcement; and (5) Lack of defenses

CCIFD

Question 2

Certain and Definite

Answer 2

Requirement for specific performance.

P must be able to show the K terms with MORE CERTAINTY AND DEFINITENESS than is required in a money damages action

Question 3

P’s Performance

Answer 3

P must be able to show her contract conditions have been fulfilled, either performed or excused

Question 4

Inadequate legal remedy

Answer 4

When money damages are inadequate

(1) speculative; (2) D is insolvent; (3) multiple suits are necessary; or (4) thing bargained for is UNIQUE

Question 5

Feasibility of enforcement

Answer 5

usually this is an issue only in personal service contracts, land sale contracts, and construction contracts

Involuntary Servitude problem

Question 6

Defenses to SP

Answer 6

unclean hands; laches; unconscionability (tested at time of K formation)

Contract defenses, as well

Question 7

Rescission

Answer 7

Cancels K when it results from mistake, fraud, misrepresentation or duress, or if the K is materially breached

usually accompanied by RESTITUTION of benefits conferred

Question 8

Defenses to rescission

Answer 8

unclean hands and laches

Negligence of P is NOT a good defense

Question 9

Election of Remedies

Answer 9

If P sues for Damages First, rescission of K is NOT allowed (“Affirmance of K”)

If P sues for rescission first, damages ARE allowed

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

Question 10

Reformation

Answer 10

(1) Determine if valid K; (2) determine if there are grounds for reformation

Difference with rescission: with reformation, you are arguing that there was a meeting of the minds and a valid K, but that the K does not reflect what was agreed upon

Question 11

Grounds for Reformation

Answer 11

Mistake; misrepresentation

NOTE: unlike rescission, unilateral mistake as ground for reformation is limited to when D KNOWS of the mistake, not just “should know”

Question 12

Defenses to Reformation

Answer 12

Unclean Hands; Laches

NOT: negligence of P; SoF; parol evidence

Question 13

Misrepresentation/Fraud

Answer 13

Misrepresentation/fraud: A misrepresentation of a material past or present fact, made with knowledge, intended to deceive, upon which the P actually relies

If fraudulent misrepresentation, P has option of rescinding the K and seeking restitution for any unfair benefit, or affirming the contract and seeking damages

If innocent misrepresentation, K can only be rescinded