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IL Bar Prep > Equity > Flashcards

Equity Flashcards

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1
Q

Injunctive relief

A

D is ordered (enjoined) TO DO or REFRAIN FROM DOING something.

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2
Q

Permanent injunction issued:

A

AFTER full trial on the merits

When in doubt, go with permanent injunction

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3
Q

Preliminary injunction issued:

A

PENDING trial on its merits.

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4
Q

2 part test for preliminary injunctive relief:

A
  1. P must establish that there is IRREPARABLE injury, AND

2. Likelihood of success.

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5
Q

Preliminary injunctive relief bond:

A

Impose a bond on P to reimburse D i the injunction injures him and P does not succeed.

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6
Q

Preliminary injunctive relief model bar answer

A

“In issue is whether P can obtain preliminary injunctive relief. To do so P must meet 2 part test:

  1. Irreparable injury (facts in time frame context)
  2. Likelihood of success: Discuss ‘probability’ - impose bond requirement.
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7
Q

Temporary Restraining Order (TRO)

A

Issued PENDING a hearing to determine whether preliminary injunction should issue.

Test is IDENTICAL to that of preliminary injunction.

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8
Q

For emergencies TRO can be:

A

Ex Parte. Thus:

  1. Notice: None required
  2. Adversarial Proceedings: None required.
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9
Q

TRO’s are limited to:

A

10 days

14 in federal court

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10
Q

Permanent Injunction
5 Part Checklist
“I Put Five Bucks Down”

A
  1. Inadequate legal remedy
  2. Protectable interest requirement
  3. Feasibility of Enforcement
  4. Balancing of Hardships
  5. Defenses
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11
Q

Inadequate legal remedy alternative rule:

A

P must establish there is NO VIABLE LEGAL REMEDY alternative.

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12
Q

4 reasons money damages will be inadequate:

A
  1. IRREPARABLE injury.
  2. Too speculative
  3. It’s a ‘continuing wrong’
  4. D is insolvent
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13
Q

Protectable interest requirement

A

P must establish there is a ‘protectable interest’ involved.

This must be in the answer.

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14
Q

Feasibility of enforcement

A

P must establish that it is feasible to ENFORCE the injunction.

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15
Q

Negative Injunctions

A

STOP doing something. (No enforcement problem)

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16
Q

Mandatory injunctions

A

Must affirmatively perform an act.

Might be an enforcement problem.

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17
Q

Balancing of hardships

A

P’s benefit v. D’s hardship.

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18
Q

4 balancing of hardship rules

A
  1. There must be SUBSTANTIALLY more hardship than benefit.
  2. Even then, there will be NO balancing of hardship if D’s conduct is WILLFUL.
  3. If you decide to balance hardships, in whole or in part, consider giving P money damages.
  4. Hardship to PUBLIC is also (lastly) taken into account.
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19
Q

Defenses

A
  1. Unclean hands

2. Laches

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20
Q

Unclean hands

A

P’s improper conduct will cut off the right to equitable relief.

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21
Q

With unclean hands, P’s improper conduct:

A

MUST be related to the lawsuit.

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22
Q

Laches

A

An ‘inequitable delay’ by P seeking equitable relief cuts off the right to it.

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23
Q

Laches test:

A
  1. Clock starts to run when P KNOWS of the injury

2. The delay cuts off the right to relief when it is BOTH unreasonable AND prejudicial to D.

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24
Q

Constructive Trust

A

Imposed on improperly acquired property to which D now has title.

D MUST RETURN property to P.

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25
Q

Equitable Lien

A

Imposed on improperly acquired property to which D now has title.

Property will be subject to an IMMEDIATE COURT-DIRECTED SALE.

Proceeds go to P. If the proceeds 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 D’s other assets.

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26
Q

When can constructive trusts and equitable liens be used?

A

ONLY when D has title to the property.

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27
Q

If the property value subsequent to taking goes UP, then:

A

Constructive trust

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28
Q

If the property value subsequent to taking goes DOWN, then:

A

Equitable lien.

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29
Q

Specific Performance
5 Part Checklist
“Vacant Properties Intensify Foreclosure Disaster”

A
  1. Contract is valid.
  2. Performance of P must be ASSURED.
  3. Inadequate legal remedy alternative.
  4. Feasibility of Enforcement
  5. Defenses
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30
Q

Uniqueness: Personal Property

A

Personal property is NOT UNIQUE and damages are adequate.

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31
Q

3 Exceptions to uniqueness of personal property rule.

A
  1. One of a kind or VERY rare: Rembrandt.
  2. Personal significance to buyer.
  3. Circumstances make chattel unique.
    (Uniqueness is tested at the time of litigation.)
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32
Q

Enforcement of personal services contracts

A

NOT specifically enforceable.

  1. Enforcement problem
  2. Involuntary servitude.
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33
Q

Covenant Not to Compete Enforceable if:

2 part test

A
  1. The services are UNIQUE.

2. The scope (geographic and durational) is reasonable.

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34
Q

Equitable Defenses

A
  1. Unclean hands
  2. Laches
  3. Unconscionability
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35
Q

Contract defenses

A
  1. Mistake (bilateral)
  2. Misrepresentation
  3. Statute of Frauds
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36
Q

Unconscionability

A
  1. More than simply a bad deal.

2. Tested at the time of CONTRACT FORMATION.

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37
Q

Rescission

A

The original K is considered voidable and rescinded.

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38
Q

2 step analysis of rescission:

“Good Dog”

A
  1. Are there grounds for rescission?

2. Are there valid defenses?

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39
Q

7 General grounds for rescission

A

They all relate to CONTRACT FORMATION.

  1. Mistake
  2. Misrepresentation
  3. Coercion
  4. Undue influence
  5. Lack of capacity
  6. Failure of consideration
  7. Illegality.
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40
Q

Mutual Mistake

A

Must be MATERIAL FACT for rescission.

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41
Q

Unilateral mistake, general rule: Rescission:

A

will be denied.

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42
Q

Rescission exception to unilateral mistake general rule:

A

The NON-MISTAKEN party knows or SHOULD HAVE KNOWN of the mistake.

43
Q

Misrepresentation: Rescission will be:

A

Granted. But P must show that they ACTUALLY RELIED on the misrepresentation.

44
Q

With rescission non-defenses (negligence of P):

A

WILL NOT WORK.

45
Q

Defenses to rescission

A
  1. Unclean hands

2. Laches

46
Q

Reformation:

A

Changes written agreement to conform with parties’ original understanding.

47
Q

3 step analysis for reformation:

“Very Good Dog”

A
  1. valid K.
  2. grounds for reformation.
  3. defenses.
48
Q

Defenses to reformation

A
  1. Unclean hands

2. Laches

49
Q

Mutual mistake. Reformation will be:

A

granted.

50
Q

Unilateral mistake. Reformation will be:

A

denied.

51
Q

Exception: Unilateral mistake reformation will be:

A

granted. Where the non-mistaken party KNOWS of the mistake.

52
Q

Misrepresentation. Reformation will be:

A

granted.

Available for BOTH innocent and intentional misrepresentations. Rewriting reflects EXPRESSED INTENT of the parties.

53
Q

Injunctive relief

A

D is ordered (enjoined) TO DO or REFRAIN FROM DOING something.

54
Q

Permanent injunction issued:

A

AFTER full trial on the merits

When in doubt, go with permanent injunction

55
Q

Preliminary injunction issued:

A

PENDING trial on its merits.

56
Q

2 part test for preliminary injunctive relief:

A
  1. P must establish that there is IRREPARABLE injury, AND

2. Likelihood of success.

57
Q

Preliminary injunctive relief bond:

A

Impose a bond on P to reimburse D i the injunction injures him and P does not succeed.

58
Q

Preliminary injunctive relief model bar answer

A

“In issue is whether P can obtain preliminary injunctive relief. To do so P must meet 2 part test:

  1. Irreparable injury (facts in time frame context)
  2. Likelihood of success: Discuss ‘probability’ - impose bond requirement.
59
Q

Temporary Restraining Order (TRO)

A

Issued PENDING a hearing to determine whether preliminary injunction should issue.

Test is IDENTICAL to that of preliminary injunction.

60
Q

For emergencies TRO can be:

A

Ex Parte. Thus:

  1. Notice: None required
  2. Adversarial Proceedings: None required.
61
Q

TRO’s are limited to:

A

10 days

14 in federal court

62
Q

Permanent Injunction
5 Part Checklist
“I Put Five Bucks Down”

A
  1. Inadequate legal remedy
  2. Protectable interest requirement
  3. Feasibility of Enforcement
  4. Balancing of Hardships
  5. Defenses
63
Q

Inadequate legal remedy alternative rule:

A

P must establish there is NO VIABLE LEGAL REMEDY alternative.

64
Q

4 reasons money damages will be inadequate:

A
  1. IRREPARABLE injury.
  2. Too speculative
  3. It’s a ‘continuing wrong’
  4. D is insolvent
65
Q

Protectable interest requirement

A

P must establish there is a ‘protectable interest’ involved.

This must be in the answer.

66
Q

Feasibility of enforcement

A

P must establish that it is feasible to ENFORCE the injunction.

67
Q

Negative Injunctions

A

STOP doing something. (No enforcement problem)

68
Q

Mandatory injunctions

A

Must affirmatively perform an act

Might be an enforcement problem

69
Q

Balancing of hardships

A

Equity balances P’s benefit v. D’s hardship.

70
Q

4 balancing of hardship rules

A
  1. There must be SUBSTANTIALLY more hardship than benefit.
  2. Even then, there will be NO balancing of hardship if D’s conduct is WILLFUL.
  3. If you decide to balance hardships, in whole or in part, consider giving P money damages.
  4. Hardship to PUBLIC is also (lastly) taken into account.
71
Q

Defenses

A
  1. Unclean hands

2. Laches

72
Q

Unclean hands

A

P’s improper conduct will cut off the right to equitable relief.

73
Q

With unclean hands, P’s improper conduct:

A

MUST be related to the lawsuit.

74
Q

Laches

A

An ‘inequitable delay’ by P seeking equitable relief cuts off the right to it.

75
Q

Laches test:

A
  1. Clock starts to run when P KNOWS of the injury

2. The delay cuts off the right to relief when it is BOTH unreasonable AND prejudicial to D.

76
Q

Constructive Trust

A

Imposed on improperly acquired property to which D now has title.

D MUST RETURN property to P.

77
Q

Equitable Lien

A

Imposed on improperly acquired property to which D now has title.

Property will be subject to an IMMEDIATE COURT-DIRECTED SALE.

Proceeds go to P. If the proceeds 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 D’s other assets.

78
Q

When can constructive trusts and equitable liens be used?

A

ONLY when D has title to the property.

79
Q

If the property value subsequent to taking goes UP, then:

A

Constructive trust

80
Q

If the property value subsequent to taking goes DOWN, then:

A

Equitable lien.

81
Q

Specific Performance
5 Part Checklist
“Vacant Properties Intensify Foreclosure Disaster”

A
  1. Contract is valid.
  2. Performance of P must be ASSURED.
  3. Inadequate legal remedy alternative.
  4. Feasibility of Enforcement
  5. Defenses
82
Q

Uniqueness: Personal Property

A

Personal property is NOT UNIQUE and damages are adequate.

83
Q

3 Exceptions to uniqueness of personal property rule.

A
  1. One of a kind or VERY rare: Rembrandt.
  2. Personal significance to buyer.
  3. Circumstances make chattel unique.
    (Uniqueness is tested at the time of litigation.)
84
Q

Enforcement of personal services contracts

A

NOT specifically enforceable.

  1. Enforcement problem
  2. Involuntary servitude.
85
Q

Covenant Not to Compete Enforceable if:

2 part test

A
  1. The services are UNIQUE.

2. The scope (geographic and durational) is reasonable.

86
Q

Equitable Defenses

A
  1. Unclean hands
  2. Laches
  3. Unconscionability
87
Q

Contract defenses

A
  1. Mistake (bilateral)
  2. Misrepresentation
  3. Statute of Frauds
88
Q

Unconscionability

A
  1. More than simply a bad deal.

2. Tested at the time of CONTRACT FORMATION.

89
Q

Rescission

A

The original K is considered voidable and rescinded.

90
Q

2 step analysis of rescission:

“Good Dog”

A
  1. Are there grounds for rescission?

2. Are there valid defenses?

91
Q

7 General grounds for rescission

A

They all relate to CONTRACT FORMATION.

  1. Mistake
  2. Misrepresentation
  3. Coercion
  4. Undue influence
  5. Lack of capacity
  6. Failure of consideration
  7. Illegality.
92
Q

Mutual Mistake

A

Must be MATERIAL FACT for rescission.

93
Q

Unilateral mistake, general rule: Rescission:

A

will be denied.

94
Q

Rescission exception to unilateral mistake general rule:

A

The NON-MISTAKEN party knows or SHOULD HAVE KNOWN of the mistake.

95
Q

Misrepresentation: Rescission will be:

A

Granted. But P must show that they ACTUALLY RELIED on the misrepresentation.

96
Q

With rescission non-defenses (negligence of P):

A

WILL NOT WORK.

97
Q

Defenses to rescission

A
  1. Unclean hands

2. Laches

98
Q

Reformation:

A

Changes written agreement to conform with parties’ original understanding.

99
Q

3 step analysis for reformation:

“Very Good Dog”

A
  1. valid K.
  2. grounds for reformation.
  3. defenses.
100
Q

Defenses to reformation

A
  1. Unclean hands

2. Laches

101
Q

Mutual mistake. Reformation will be:

A

granted.

102
Q

Unilateral mistake. Reformation will be:

A

denied.

103
Q

Exception: Unilateral mistake reformation will be:

A

granted. Where the non-mistaken party KNOWS of the mistake.

104
Q

Misrepresentation. Reformation will be:

A

granted.

Available for BOTH innocent and intentional misrepresentations. Rewriting reflects EXPRESSED INTENT of the parties.

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