Final - K Remedies

Question 1

Compensatory K Damages

Answer 1

Expectation
Incidental
Consequential
(LIMITATIONS APPLY TO ALL: CFCM)

Question 2

Expectation Damages

Answer 2

Contract expectation damages seek to provide the plaintiff with the benefit of the bargain plaintiff expected to receive.
Purpose is to place nonbreaching party in the same position as if the contract had been performed.

Question 3

Expectation Damages Measure of Recovery

Answer 3

P’s Expected Profit (contract price - market price) = expectation damages OR
P’s cost of purchasing substitute performance MINUS damages that could have been avoided by P = expectation damages

Question 4

Expectation Damages Scenarios under UCC: Seller has goods/Seller in breach

Answer 4

Profit (contract price - market price) OR Substitute goods (replacement cost - contract price) MINUS avoidable damages = expectation damages

Question 5

Expectation Damages Scenarios under UCC: Seller has goods/Buyer in breach

Answer 5

Difference b/t k price & resale price (if resold) OR
Difference b/t k price & market price (not resold) - avoidable damages OR
Lost Profits (if Lost Volume Seller)
If the market contract differential is not adequate to place the seller in as good a position as performance of the contract would have done, then the seller can seek lost profits.

Question 6

Lost Volume sellers who can seek Lost Profits

Answer 6

Seller has practically inexhaustible inventory (Large supply)
OR
But for the breach seller would have made two sales

Question 7

Expectation Damages Scenarios under UCC: Buyer has goods/Buyer in breach

Answer 7

K Price

Question 8

Expectation Damages Scenarios under UCC: Buyer has goods/Seller in breach

Answer 8

Value of goods as warranted/promised minus value of goods as accepted

Question 9

Consequential damages

Answer 9

Consequential damages seek to compensate for damages that are a direct and foreseeable consequence of the K not being performed (in addition to expectation damages)

Question 10

Consequential damages main limitation/issue

Answer 10

FORESEEABILITY is key issue, damages must be reasonably foreseeable by D at the time of contracting
Look for communications between parties
What did D know at time of contracting?

Question 11

Consequential damages examples

Answer 11

Lost profits
Loss of rental income
Costs incurred to resell property
Expenses to look for other work
Lost sales

Question 12

Incidental Damages

Answer 12

ONLY UNDER UCC
Incidental damages are costs reasonably incurred when the other party breaches a contract for the sale of goods (UCC)
Damages any plaintiff would incur related to the breach

Question 13

Incidental Damages triggers

Answer 13

Typical examples for Seller:
Expenses incurred in stopping delivery;
Costs for transportation, care or custody of goods after buyer’s breach;
Costs incurred for return or resale of goods.

Typical examples for Buyer:
Costs incurred to cover;
Costs incurred to reject non-conforming goods. Ex: storage, transportation, inspection expenses.

Question 14

Reliance damages

Answer 14

-Alternative to compensatory/expectation
-Reliance damages are awarded to put P in the same position they would have been had the contract NEVER been made
-Use when damages are too speculative.
-measured by the losses incurred as a result of reasonable reliance on the contract.

Question 15

Reliance damages triggers

Answer 15

-P has a problem with substantive contract claim, e.g. lack of consideration or lack of writing (SOF) but relied on the K (promissory estoppel cases)
-Damages are too speculative to ascertain with certainty, but P has expended $ in reasonable reliance on the contract.

Question 16

Liquidated damages

Answer 16

-Alternative to compensatory
Liquidated damages are appropriate when they are stipulated in the contract and actual damages are too difficult to calculate.
1) Stipulated in the contract
2) Actual damages are too difficult to calculate
3) Reasonable approximation of anticipated loss

Question 17

Nominal damages

Answer 17

awarded where plaintiff’s rights have been violated, but plaintiff suffered no loss

Question 18

Punitive damages

Answer 18

Punitive damages are awarded when defendant has displayed willful, wanton, or malicious tortious conduct, measured by an appropriate punishment for defendant’s misconduct.

Question 19

Legal Restitution

Answer 19

Quasi Contract
Replevin
Ejectment

Question 20

Quasi Contract

Answer 20

GR: A quasi-contract is a contract implied by law to avoid unjust enrichment.
Elements- BKI
1)BENEFIT conferred upon the defendant by the plaintiff
2)Defendant has awareness, appreciation, or KNOWLEDGE of the benefit, and
3) Defendant’s acceptance or retention of the benefit would be INEQUITABLE without payment to the plaintiff

Question 21

Quasi Contract Triggers

Answer 21

1)There is an unenforceable contract
2) Plaintiff materially breached the contract
3) Duties define the parties’ agreement (as opposed to a contract, where the agreement between the parties define the duties)
4) when unclear whether the plaintiff will recover under the contract

Question 22

Quasi contract measure of recovery

Answer 22

Measured by the value of the benefit retained by the defendant
Quantum meruit: reasonable value of services rendered
Quantum valebat: reasonable value of goods received

Question 23

Replevin

Answer 23

Replevin allows recovery of a specific chattel/item of personal property wrongfully withheld by the defendant, and recovery for damages for loss of use.
Requires
(1) plaintiff has the right to possession of the personal property and
(2) defendant has wrongfully withheld the personal property from plaintiff.

Question 24

Ejectment

Answer 24

Ejectment allows recovery of specific real property from which the plaintiff was wrongfully excluded.
Ejectment requires
(1) plaintiff must have right to possession of the real property and
(2) defendant has wrongfully excluded plaintiff from the real property.

Question 25

Equitable Restitution

Answer 25

Rescission
Reformation

Question 26

Rescission

Answer 26

Rescission permits a party to DISAFFIRM and UNDO the bargain, restoring parties to their pre-bargain positions.
Rescission Requires
1) NOTICE of intent to rescind must be given within a reasonable time after the rescinding party learns, or should have learned about the right to rescind
2) TENDER - The rescinding party must return consideration and restore any benefit derived
3) PECUNIARY LOSS - Some jx require the plaintiff show an actual pecuniary loss as a result of the defendant’s conduct

Question 27

Grounds for rescission

Answer 27

1. Fraud, deceit, misrepresentation (fraudulent misrep) and Material misrep)
2. Mistake (Mutual and Unilateral)

Question 28

Rescission on grounds of Fraudulent Misrepresentation

Answer 28

A party may avoid a contract if the party justifiably relied on a fraudulent misrepresentation of the other party.
MJIK
1. Fraudulent MISREPRESENTATION made by one party
2. Innocent party JUSTIFIABLY relied on misrep
3. made w/ INTENT to induce innocent party’s assent
4. Party making assertion KNEW or believed the assertion was untrue

Question 29

Rescission on grounds of Material Misrepresentation

Answer 29

A party may avoid a contract on the basis of material misrepresentation on which the party justifiably relied. Even an innocent misrepresentation can be the basis to avoid a contract if the misrepresentation was material.
Material if:
1. it would Induce a reasonable person to assent OR
2. Party making the assertion knew it was likely to induce other party to assent.
+
3. Justifiable reliance

Question 30

Rescission on grounds of Mutual Mistake

Answer 30

A mutual mistake is a belief shared by both parties that differs from the facts existing before or at the time the contract was executed. The disadvantaged party must not bear the risk of mistake.

Question 31

Rescission on grounds of Unilateral Mistake

Answer 31

A unilateral mistake is an incorrect belief, held by only one of the parties, about an existing fact that affects the exchange between the parties.
The contract is voidable at the mistaken party’s option if: BMK
(1) the mistake concerns a BASIC ASSUMPTION on which the contract was formed;
(2) the mistake will have a MATERIAL impact on the parties’ performances; and
(3) the advantaged party either CAUSED the mistake or KNEW or had reason to know of the mistake.

Question 32

ELECTION OF REMEDIES

Answer 32

Plaintiff must (1) affirm the bargain and seek damages/specific performance OR
(2) disaffirm the bargain and seek rescission

Question 33

Reformation

Answer 33

Reformation allows the parties to reform the writing to reflect the actual agreement.
Reformation is appropriate when
the parties had an actual agreement
the writing does not reflect that agreement
The court may rewrite the contract to reflect the actual agreement.

Question 34

grounds for reformation

Answer 34

Mistake
Fraud
Misrepresentation

Question 35

Reformation by Mutual Mistake

Answer 35

Mutual mistake may provide the basis for reformation if there was a common intention to which the contract can be reformed.
-Typical situation is a scrivener’s error: error in reducing the agreement to writing

Question 36

Reformation by Unilateral Mistake

Answer 36

Unilateral mistake may provide the basis for reformation
1. if there was a mistake on one side and fraud or inequitable conduct on the other.
-One party knew the writing did not reflect the innocent party’s intent (knew about the mistake) AND
-innocent party’s assent is induced by the other party’s fraudulent misrepresentation.

Question 37

Injunctive relief

Answer 37

An injunction directs the defendant to act or refrain from acting in a specific way and is used to maintain the status quo.
Types:
TRO
Prelim Injunction
Permanent Injunction
SPECIFIC PERFORMANCE

Question 38

TRO

Answer 38

-Emergency measure to maintain the status quo until a hearing on the preliminary injunction
-May be issued ex parte (without notice to opposing party or opportunity to be heard)
-Limited to a short period of time (e.g. 10-14 days)

Question 39

When can TRO be issued ex parte?

Answer 39

If party makes a strong showing that
1) ID of adverse party is unknown
2) Adverse pty cannot be located in time
3) notice would render further action fruitless (Hide/dispose of subject matter of litigation)

Question 40

TRO factors

Answer 40

(1) IMMINENT Irreparable harm to plaintiff unless injunction issues
MAIN TRO ISSUE: why does this party need the injunction urgently without notice? IMMINENT irreparable harm during waiting time if not granted
(2) Balance of hardships weighs in plaintiff’s favor/Public Interest
(3) Likelihood of success on the merits

Question 41

Preliminary injunction

Answer 41

-Long term measure to maintain the status quo until completion of a trial
-Issued after notice and hearing
-Remains in force pending trial, at which time it is either dissolved or made permanent

Question 42

Prelim injuctive relief factors

Answer 42

(Summarize factors 2& 3 that are similar to TRO)
(1) Irreparable harm to plaintiff unless injunction issues
MAIN PRELIM ISSUE: Focus on harm during PENDING trial
(2) Balance of hardships weighs in plaintiff’s favor/Public Interest (See TRO section for analysis)
(3) Likelihood of success on the merits (See TRO section for analysis)

Question 43

Specific performance

Answer 43

Specific Performance is a form of permanent equitable injunctive relief that orders the nonperforming party to perform its obligations under contract.

Question 44

Specific performance requirements

Answer 44

1) Contract with certain and definite terms
2) Conditions required for defendant’s performance must be satisfied
3) Inadequate legal remedy
4) relief must be equitable, mutuality + Fairness
5) enforcement must be feasible (no personal service contracts)

Question 45

Inadequate legal remedy scenarios

Answer 45

Land – presumed unique
Unique good
Sometimes novel agreements
Sometimes plea bargains

Question 46

Relief must be equitable: Mutuality

Answer 46

Traditionally – either party must have been able to obtain specific performance
Modern trend – reject mutuality of remedies as a condition to obtaining specific performance

Question 47

Relief must be equitable: Fairness

Answer 47

Procedural: agreement reached by means and methods that are fair and just
Substantive: Consideration must bear a reasonable relationship to the value P received from D’s reciprocal performance

Question 48

K Defenses

Answer 48

Laches
Bad Faith
-Unclean Hands
-Breach Duty of good faith (UCC)
Seek Rescission
Estoppel
PER

Question 49

Laches

Answer 49

A plaintiff must bring an equitable claim within a reasonable period of time or lose the right to bring the claim. Laches is a defense that bars an equitable claim where the plaintiff has not acted promptly in bringing the action.
The defendant must show
(1) an unreasonable delay by the plaintiff, and
(2) material prejudice to the defendant.

Question 50

Bad Faith: Unclean Hands

Answer 50

Plaintiff may be denied an equitable remedy because he engaged in wrongful conduct directly related to the claim at issue

Question 51

Bad Faith: Breach Duty of Good Faith (UCC)

Answer 51

UCC governs transactions for the sales of goods. UCC imposes a duty of good faith in the performance and enforcement of every contract.
Merchants, or people who deal in goods of the kind, have a heightened obligation of good faith.

Question 52

Estoppel

Answer 52

Equitable estoppel applies when a party makes a material misrepresentation and the other party reasonably acts in reliance on that misrepresentation to their detriment.

Question 53

PER

Answer 53

In contract disputes, parol evidence is any agreement that is not contained within the written contract. Under the parol evidence rule, these agreements made outside of the contract are inadmissible in court unless there is evidence of fraud, duress, or a mutual mistake. The rationale behind the rule is to deter untruthful attacks on contracts.