FL Equity

Question 1

What happens if a FL court determines covenant NOT to compete is unreasonable?

Answer 1

Modify or blue pencil the covenant and then enforce

Question 2

What are the basic principles of equity?

Answer 2

FRIED
- Feasibility to enforce equitable remedy
- Remedial
- Inadequacy of legal remedy ($)
- Extraordinary
- Discretionary (up to court)

Question 3

What are the equitable remedies?

Answer 3

1. injunctive relief
2. constructive trusts
3. equitable liens
4. specific performance
5. rescission
6. reformation

Question 4

When is a temporary or a permanent injunction issued?

Answer 4

• Temporary –> issued before trial on the merits
• Permanent –> issued after trial on the merits

Question 5

What are the steps/elements to getting injunctive relief

Answer 5

Step 1 –> P must show legal remedy inadequate
Step 2 –> P must show enforcement is feasible
Step 3 –> D will then balance hardships
Step 4 –> D will try to use a defense

Question 6

When are money damages inadequate?

Answer 6

1. damages are speculative
2. injury is irreparable
3. multiplicity of actions might be necessary
4. P has no right to damages (ex: tort prospective)
5. D is insolvent
6. subject matter is unique

Question 7

When is an equitable remedy feasible?

Answer 7

When either of the following is PRESENT in Florida:
1. Defendant; OR
2. subject of injunction

Question 8

How are hardships balanced?

Answer 8

Weigh the benefit to P if injunction granted AGAINST the hardship to D that would result from injunction

Question 9

When won’t the court issue an injunction after D balances hardships?

Answer 9

If benefit to P is GREATLY OUTWEIGHED by BURDEN in D

Burden to public can be taken into consideration

Question 10

How does a D’s argument for hardship become estopped?

Answer 10

When D acts willfully

Question 11

What are defenses to an injunction?

Answer 11

1. unclean hands
2. laches
3. impossibility
4. hardship
5. free speech

Question 12

What is the unclean hands defense?

Answer 12

Defense to Injunction arguing that P has acted improperly in the event in question

Conduct MUST relate to the same transaction involved in the litigation

Question 13

What is the laches defense?

Answer 13

Defense to Injunction

Defense MAY be available if:
1. P has unreasonably delayed in bringing action
2. delay is prejudicial, AND
3. D had no knowledge that the P would claim the right alleged in suit

CAN BE SHORTER THAN SOL, shouldn’t be longer than SOL

Starts when P knows that right has been infringed

Question 14

For what things are injunctions usually allowed for?

Answer 14

1 - continuous trespass to land

2 - conversion of unique chattel

3 - wrongfully instituted suit
- if filed in forum state –> P must show malicious + unfounded suits
- if NOT filed in forum state –> P must show wrongfully obtained jurisdiction

Question 15

For what things may an injunction be allowed for?

Answer 15

1. private nuisance (NOT public)
2. voluntary (destructive) / permissive waste (NOT ameliorative)
3. wrongfully obtained judgment by extrinsic fraud
4. breach of contract / refusal to deal (injunction not given if D shows only healthy competitive behavior)
5. misappropriation of trademark / trade secret / trademark

Question 16

For what things are injunctions generally NOT available for?

Answer 16

1. defamation
2. trade libel
3. invasion of privacy
4. other privacy

Question 17

What must a P show to get specific performance?

Answer 17

1. a valid contract exists
2. the P has or is ready, willing, and able to perform
3. legal remedy ($) is inadequate
4. enforcement is feasible
5. there are no defenses for D available

Question 18

How is consideration measured in equity courts?

Answer 18

Require consideration to be fair at time of contracting

Question 19

What issues arise when there is a “time of essence” clause, and P seeking specific performance has violated it?

Answer 19

Scenario 1
- specific performance will NOT be available if contract is validly entered into & signed by the parties

Scenario 2
- if contract is partially executed, the court will want to avoid clause to avoid forfeiture

court will be likely to avoid effect of clause IF:
1. loss to other party small
2. forfeiting party would suffer undue hardship
3. tardiness is de minimis
4. D waived the clause

Question 20

Explain how deficiencies in a land sale contract due to P can affect P getting specific performance

Answer 20

Seller P –> P can get specific performance if deficiency is minor

Buyer P –> D can get specific performance even with substantial deficiencies, but NOT if deficiency is VERY LARGE

There must be abatement in price for P’s deficiency

Question 21

When can a P get specific performance for personal property?

Answer 21

Personal property is:
1. unique in kind
2. of personal significance to the buyer (reasonable person test); OR
3. in short supply

Question 22

In a land sale contract, and P is seeking specific performance, when is enforcement feasible?

Answer 22

Check if parties and/or land are IN JURISDICTION

Question 23

What defenses can be raised by D of a specific performance claim?

Answer 23

Standard Contract Defenses
1. statute of frauds (part performance defense for SOF)
2. inadequate consideration
3. misrepresentation
4. impossibilities
5. mistake

Question 24

When are covenants not to compete enforceable?

Answer 24

FL allows the enforcement of contracts that restrict or prohibit competition as long as contracts are reasonable in TIME, AREA, and LINE OF BUSINESS

To be enforceable:
1. covenant MUST be set forth in a writing signed by the person against whom it is sought to be enforced
2. P MUST show that there is a legitimate business interest in justfying restriction
3. restraint MUST be reasonably necessary to protect legitimate business interest

Question 25

What is the rebuttable presumption for reasonabless in a covenant not to compete for cases involving trade secrets?

Answer 25

• less than 5 years = reasonable
• greater than 10 years = unreasonable

Question 26

What is reasonable in time for a covenant not to compete?

explain different circumstances

Answer 26

• D former employee, agent, or independent contractor + case does NOT involve the sale of business assets or any type of equity interest in a business = less than or equal to 6 months is reasonable and greater than 2 years is unreasonable
• D former distributor, dealer, franchisee, or licensee of trademark or service mark +

Question 27

What does rescission do?

Answer 27

rescission voids the contract and leaves the parties as though the contract was NEVER MADE

Question 28

What are grounds for rescission?

Answer 28

P MUST SHOW there was a defect relating to formation of K

GROUNDS
1. mistake
2. misrepresentation
3. duress
4. undue influence
5. illegality
6. lack of capacity
7. failure of consideraiton

grounds MUST have occurred either b4 or at time K entered into

Question 29

What does reformation do?

Answer 29

Reformation changes the written agreement to make it conform to parties original intent

Question 30

What are the requirements to reform K?

Answer 30

1. valid K
2. grounds met (mistake, mistep)
3. D has no defenses (unclean hands, laches, etc.)

Question 31

What is a constructive trust?

Answer 31

A restitutionary remedy imposed by courts to prevent unjust enrichment when a wrongdoer has gained title to property through misappropriation of anothers money or property

Question 32

When can an equitable lien be imposed on a D’s property?

Answer 32

Can be imposed on D’s property to secure a debt owed to P if the P demonstrates that D misappropriated P’s money or property (creating debt)

Harm measured @ time take | deficiency judgments allowed

Question 33

If D misappropriates P’s property, should P seek a constructive trust or equitable lien?

Answer 33

• Value of property increases after D misappropriates –> go for constructive trust (return of property)
• Value of property decreases after D misappropriates –> go for equitable lien (money at time of taking)