FL Equity

Question 1

Both restitution and reliance can be plead, but

Answer 1

only one can be recovered

Question 2

Unilateral mistake will generally not result in rescission, unless:

Answer 2

– Non-mistaken party was aware of mistake, and took advantage of it;

– If severe hardship would be suffered by mistaken party if forced to accept the bargain;

or

– Non-mistaken party had done nothing yet in reliance upon contract

(e.g. General contractor accepts bids from various subcontractors.
There are three bids submitted to the general contractor: $120,000; $110,000; and $80,000. General contractor knew or should have known the bid for $80,000 was low because of a mistake.)

Question 3

Mutual mistake as to a ____________________________ fact or law

Party must show that it was relied upon, and that it was ___________

Answer 3

Material; Detrimental

(E.g. Example 41: In the sale of a cow, both parties are mistaken as to the fertility of the cow.)

Question 4

Courts will consider reformation if:

Answer 4

1) There is a VALID original agreement;
2) The original agreement was in WRITING;

and

3) The original agreement does not reflect the INTENT of the parties

*Party seeking reformation has the burden of proof to establish by CLEAR and CONVINCING evidence

Question 5

Rescission is when the court ___________ a contract and seeks to _______________________

Answer 5

voids; return the parties to a pre-contract state

Question 6

TRUE or FALSE: A requirement of continuous supervision will always prevent a Florida court from ordering specific performance of a contract.

Answer 6

FALSE: A court usually will not order specific performance if the contract calls for a succession of acts that cannot be consummated by one transaction and requires protracted supervision and court direction.

However, the requirement of continuous supervision will not preclude specific performance if the injustice from a refusal to enforce the contract outweighs the burden.

Question 7

Must a court order specific performance when the parties contractually agree to the remedy in the event of a breach of contract?

Answer 7

No;

a court of equity has an independent duty to determine whether the contract can be specifically performed without:

1) inordinate monitoring

OR

2) supervision of performance by the court,
regardless of an agreement of appropriate remedy

Question 8

What are deficiency issues in determining if a party is ready, willing and able to perform the contract?

Answer 8

Issues that arise when one party is unable to fully perform the contract.

Equity can then decree specific performance for the portion that can be performed and award a party compensation or abatement for the portion that cannot be performed.

Question 9

Under Florida law, what is the general rule if the complaint on its face shows that an adequate legal remedy exists?

Answer 9

Equitable remedies are not available.

Question 10

What are the requirements for enforcing a covenant not to compete in Florida?

Answer 10

1) Covenant must be expressly contained in a signed contract and be reasonable in:

(a) time,
(b) geographic area, and
(c) line of business;

2) Employer must plead and prove the covenant is justified by a legitimate business interest (otherwise void);

and

3) Clause must be reasonably necessary to protect the employer’s established interests

Question 11

In Florida, the violation of an enforceable restrictive covenant creates what presumption?

Answer 11

Presumption of irreparable injury to the person seeking enforcement of the restrictive covenant

Question 12

Will courts consider an award of specific performance when the contract contains a liquidated damages clause?

Answer 12

Yes, unless the parties agreed that liquidated damages are the sole remedy

The aggrieved party generally cannot have both the liquidated damages and specific performance.

Question 13

What is a Time of the Essence Clause?

Answer 13

A clause where a party is required to perform within the stipulated time or the party’s rights under the contract are void.

Question 14

What must a plaintiff prove to establish a right to specific performance?

Answer 14

Plaintiff must establish:
(i) Existence of valid contract and fulfillment of all its conditions,
(ii) Inadequacy of legal remedies,
(iii) Feasibility of enforcement,
(iv) Mutuality of remedy, and
(v) Absence of any defenses.

Question 15

Fill in the blanks. Specific performance of a contract generally may be enforced against a _________ to the contract or a person in _______ with a party.

Answer 15

party; privity

Question 16

Fill in the blanks. If the misrepresentation was unintentional, the party seeking rescission will be required to have ____________ ______ on the misrepresentation.

If the misrepresentation was intentional, the party need only show that she _________ relied on the misrepresentation.

Answer 16

reasonably relied; actually

Question 17

What types of contracts are subject to specific performance?

Answer 17

1) Land sale contracts
2) Doctrine of equitable conversion
3) Covenants not to compete
4) Unique chattels
5) Contracts to make testamentary dispositions or mutual wills

Question 18

What types of defenses can defeat a specific performance claim?

Answer 18

1) Standard contract defenses:
improper contract formation,
– mistake,
– impracticability,
– misrepresentation,
– fraud,
– duress,
– incapacity,
– Statute of Frauds, etc.

2) Equitable defenses:
– unclean hands,
– laches,
– undue hardship, etc.

Question 19

What are the four requirements that must be met before the court may impose a constructive trust?

Answer 19

(i) Defendant has legal title to property belonging to the plaintiff;

(ii) Defendant will be unjustly enriched if title remains in him;

(iii) No adequate legal remedy exists;

and

(iv) Fiduciary or confidential relationship exists between parties (e.g., buyer–seller, executor–estate)

Question 20

What are the three types of contracts that a court generally will not specifically enforce?

Answer 20

1) Personal services contracts (unless contract fully performed by party rendering services and failure to carry out agreement would be fraud);

2) Construction contracts;

and

3) Employment contracts

Question 21

When must the grounds for rescission occur?

Answer 21

They must have occurred prior to or contemporaneous with the formation of the contract

Question 22

TRUE or FALSE: Reformation allows a court to make a new contract for the parties.

Answer 22

FALSE: the court can bring about the true intent of the parties, but cannot make a new contract for them.

Question 23

When determining whether the party seeking specific performance is ready, willing, and able to perform the contract, it is important to look for the fulfillment of two conditions. What are they?

Answer 23

1) Time of the Essence Clause and

2) Deficiency Issues

Question 24

What are the three requirements for reformation of a contract?

Answer 24

(i) Valid original agreement;
(ii) Original agreement was in writing; and
(iii) Original agreement fails to accurately express parties’ intent.