FL Equity Flashcards
What happens if a FL court determines covenant NOT to compete is unreasonable?
Modify or blue pencil the covenant and then enforce
What are the basic principles of equity?
FRIED
- Feasibility to enforce equitable remedy
- Remedial
- Inadequacy of legal remedy ($)
- Extraordinary
- Discretionary (up to court)
What are the equitable remedies?
- injunctive relief
- constructive trusts
- equitable liens
- specific performance
- rescission
- reformation
When is a temporary or a permanent injunction issued?
- Temporary –> issued before trial on the merits
- Permanent –> issued after trial on the merits
What are the steps/elements to getting injunctive relief
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
When are money damages inadequate?
- damages are speculative
- injury is irreparable
- multiplicity of actions might be necessary
- P has no right to damages (ex: tort prospective)
- D is insolvent
- subject matter is unique
When is an equitable remedy feasible?
When either of the following is PRESENT in Florida:
1. Defendant; OR
2. subject of injunction
How are hardships balanced?
Weigh the benefit to P if injunction granted AGAINST the hardship to D that would result from injunction
When won’t the court issue an injunction after D balances hardships?
If benefit to P is GREATLY OUTWEIGHED by BURDEN in D
Burden to public can be taken into consideration
How does a D’s argument for hardship become estopped?
When D acts willfully
What are defenses to an injunction?
- unclean hands
- laches
- impossibility
- hardship
- free speech
What is the unclean hands defense?
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
What is the laches defense?
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
For what things are injunctions usually allowed for?
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
For what things may an injunction be allowed for?
- private nuisance (NOT public)
- voluntary (destructive) / permissive waste (NOT ameliorative)
- wrongfully obtained judgment by extrinsic fraud
- breach of contract / refusal to deal (injunction not given if D shows only healthy competitive behavior)
- misappropriation of trademark / trade secret / trademark
For what things are injunctions generally NOT available for?
- defamation
- trade libel
- invasion of privacy
- other privacy
What must a P show to get specific performance?
- a valid contract exists
- the P has or is ready, willing, and able to perform
- legal remedy ($) is inadequate
- enforcement is feasible
- there are no defenses for D available
How is consideration measured in equity courts?
Require consideration to be fair at time of contracting
What issues arise when there is a “time of essence” clause, and P seeking specific performance has violated it?
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
Explain how deficiencies in a land sale contract due to P can affect P getting specific performance
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
When can a P get specific performance for personal property?
Personal property is:
1. unique in kind
2. of personal significance to the buyer (reasonable person test); OR
3. in short supply
In a land sale contract, and P is seeking specific performance, when is enforcement feasible?
Check if parties and/or land are IN JURISDICTION
What defenses can be raised by D of a specific performance claim?
Standard Contract Defenses
1. statute of frauds (part performance defense for SOF)
2. inadequate consideration
3. misrepresentation
4. impossibilities
5. mistake
When are covenants not to compete enforceable?
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
What is the rebuttable presumption for reasonabless in a covenant not to compete for cases involving trade secrets?
- less than 5 years = reasonable
- greater than 10 years = unreasonable
What is reasonable in time for a covenant not to compete?
explain different circumstances
- 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 +
What does rescission do?
rescission voids the contract and leaves the parties as though the contract was NEVER MADE
What are grounds for rescission?
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
What does reformation do?
Reformation changes the written agreement to make it conform to parties original intent
What are the requirements to reform K?
- valid K
- grounds met (mistake, mistep)
- D has no defenses (unclean hands, laches, etc.)
What is a constructive trust?
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
When can an equitable lien be imposed on a D’s property?
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
If D misappropriates P’s property, should P seek a constructive trust or equitable lien?
- 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)
