GA REMEDIES- THEMIS OUTLINE 3

Question 1

What is an ‘in term’ restriction on competition?

Answer 1

A restriction on competition during the existence of a business relationship is not unreasonable if it promotes or protects the purpose of the agreement.

Ga. Code Ann. § 13-8-56.

Question 2

What is the reasonableness of a durational restriction on competition after termination of employment?

Answer 2

A durational restriction on competition by a former employee is presumed reasonable if it spans no more than two years after termination.

Ga. Code Ann. § 13-8-57(b).

Question 3

What is the presumed reasonableness of a durational restriction for business owners or sellers?

Answer 3

A durational restriction is presumed reasonable if it spans no more than the longer of five years or the payment period to the owner or seller.

Ga. Code Ann. § 13-8-57(d).

Question 4

What is the presumed reasonableness of a durational restriction for distributors or franchisees?

Answer 4

A durational restriction is presumed reasonable if it spans no more than three years after termination.

Ga. Code Ann. § 13-8-57(c).

Question 5

What defines a reasonable geographic restriction?

Answer 5

A geographic restriction is reasonable if it includes areas where the employer does business and the total distance is reasonable.

Ga. Code Ann. § 13-8-56(2).

Question 6

What is a good-faith estimate of the geographic area in post-termination restrictions?

Answer 6

A good-faith estimate of applicable geographic areas is enforceable, even if it includes areas where the employee did not work.

Ga. Code Ann. § 13-8-53(c)(1).

Question 7

What is the time frame for identifying the geographic area in a post-termination covenant?

Answer 7

The geographic area may be specified as ‘the territory where the employee is working at the time of termination.’

Ga. Code Ann. § 13-8-53(c)(2).

Question 8

How is a scope-of-activities restriction measured?

Answer 8

It is measured by the business of the employer or the person in whose favor the covenant is given.

Ga. Code Ann. § 13-8-56(3).

Question 9

What is a customer nonsolicitation provision?

Answer 9

An employee may agree to refrain from soliciting the employer’s customers for a stated time after termination, enforceable without specifying a geographic area.

Ga. Code Ann. § 13-8-53(b).

Question 10

What is a nondisclosure provision regarding confidential information?

Answer 10

An agreement to maintain confidentiality need not be restricted by time or geographic area.

Ga. Code Ann. § 13-8-53(e).

Question 11

What can a Georgia court do if a covenant is too broad?

Answer 11

A court may strike the offending language and preserve the remainder of the agreement.

Ga. Code Ann. § 13-8-54(b).

Question 12

What is rescission?

Answer 12

Rescission is the avoidance or unmaking of a contract, often followed by restitution.

Restatement (Third) of Restitution and Unjust Enrichment § 54.

Question 13

What is the effect of rescission on a contract?

Answer 13

Rescission seeks a judicial declaration that an agreement is not enforceable due to lack of necessary elements.

Various grounds include lack of consideration or fraud.

Question 14

What must fraud be pleaded with?

Answer 14

Fraud must be pleaded with particularity.

Ga. Code Ann. § 9-11-9(b).

Question 15

What is required before bringing a suit for rescission based on fraud?

Answer 15

The defrauded party must restore or offer to restore what they received from the contract.

Ga. Code Ann. § 13-4-60.

Question 16

What is the seller’s right when a contract is rescinded for fraud?

Answer 16

The seller has the right to recover goods when a contract is rescinded for fraud.

Ga. Code Ann. § 13-4-61.

Question 17

What must mistake be pleaded with?

Answer 17

Mistake must also be pleaded with particularity.

Ga. Code Ann. § 9-11-9(b).

Question 18

Can both unilateral and mutual mistakes form the basis for rescission?

Answer 18

Yes, both unilateral and mutual mistakes can lead to rescission.

Ga. Code Ann. § 23-2-31.

Question 19

What types of mistakes can serve as grounds for rescission?

Answer 19

Mistakes of law and fact can serve as grounds for rescission.

Ga. Code Ann. § 23-2-21(b).

Question 20

What is the effect of affirmation of a contract after learning of grounds for rescission?

Answer 20

Affirmation of a contract bars rescission.

Aliabadi v. McCar Dev. Corp., 547 S.E.2d 607 (Ga. Ct. App. 2001).

Question 21

What can annul a conveyance?

Answer 21

A conveyance may be annulled due to mistake or fraud.

Ga. Code Ann. §§ 23-2-25, 23-2-60.

Question 22

What is restitution?

Answer 22

Restitution refers to a cause of action and a remedy for unjust enrichment at the plaintiff’s expense.

Restatement (Third) of Restitution and Unjust Enrichment § 1.

Question 23

What must a plaintiff show to recover in restitution?

Answer 23

The plaintiff must show that they conferred a benefit on the defendant that measurably increased the defendant’s wealth.

Restatement (Third) of Restitution § 1 cmt. d.

Question 24

What must be proven for unjust enrichment?

Answer 24

The defendant’s retention of the benefit must be unjust, not merely that they benefited from the plaintiff’s action.

Stoker v. Bellemeade, LLC, 615 S.E.2d 1 (Ga. Ct. App. 2005).

Question 25

What is specific restitution?

Answer 25

Specific restitution compels the return of a benefit to prevent unjust enrichment.

Restatement (Third) of Restitution § 9.

Question 26

What is a constructive trust?

Answer 26

A constructive trust is an equitable remedy to recover specific property from someone unjustly enriched by its acquisition.

Restatement (Third) of Restitution § 55.

Question 27

What is a constructive trust?

Answer 27

A constructive trust is a judicially created equitable remedy to recover specific property from the holder of legal title who has been unjustly enriched by the acquisition of that title.

Restatement (Third) of Restitution § 55.

Question 28

What are the requirements to secure a constructive trust?

Answer 28

The plaintiff must establish that:
1. The defendant holds title to the property.
2. Retention of the property would violate an equitable principle.
3. The legal remedy is inadequate.

Ga. Code Ann. § 53-12-132; Ansley v. Raczka-Long, 744 S.E.2d 55 (Ga. 2013).

Question 29

Can a constructive trust be sought against someone who has possession but not title to property?

Answer 29

No, a constructive trust may not be sought against someone who has possession but not title to the property in question.

Restatement (Third) of Restitution § 55 cmt. f.

Question 30

What is the effect of a constructive trust?

Answer 30

A constructive trust results in the plaintiff gaining ownership of the property itself, without needing to account for any increase in value during the defendant’s ownership.

The defendant is also not liable for any decrease in value.

Question 31

What is an equitable lien?

Answer 31

An equitable lien is a judicially created remedy that recognizes the plaintiff’s restitution claim against the defendant by imposing a lien on the defendant’s property as security for that claim.

Restatement (Third) of Restitution § 56.

Question 32

What are the requirements for an equitable lien?

Answer 32

The requirements are similar to those for a constructive trust, but a plaintiff providing services that improve the defendant’s property may be entitled to an equitable lien even if not entitled to a constructive trust.

Restatement (Third) of Restitution § 56.

Question 33

What is subrogation?

Answer 33

Subrogation is a remedy that allows the plaintiff to ‘stand in the shoes’ of a creditor or lienholder if the plaintiff’s property was used to discharge an obligation or lien on the defendant’s property.

Restatement (Third) of Restitution § 57.

Question 34

What is reformation?

Answer 34

Reformation is an equitable remedy that involves judicial rewriting of an agreement or instrument to reflect the true intent of the parties.

Reformation is available for trust instruments to reflect the settlor’s intent.

Question 35

What is required for a contractual writing to be reformed?

Answer 35

The parties must have previously entered into an agreement; reformation cannot create an agreement where none exists.

Restatement (Second) of Contracts §§ 155, 166.

Question 36

What is a mutual mistake in the context of reformation?

Answer 36

A writing may be reformed to conform to the parties’ prior agreement if both parties were unaware that it did not do so.

Restatement (Second) of Contracts § 155.

Question 37

Who may seek reformation of a contract?

Answer 37

Any party to the contract, an intended beneficiary, or a successor-in-interest may seek reformation.

Restatement (Second) of Contracts § 155 cmt. e.

Question 38

What defenses can be raised against reformation?

Answer 38

Defenses include good-faith purchaser rights, negligence of the party seeking reformation, and the statute of limitations.

Various citations including Ga. Code Ann. § 23-2-31.

Question 39

When does the statute of limitations commence for an action for reformation based on mutual mistake or fraud?

Answer 39

The statute of limitations generally commences when the mistake or fraud has been discovered, or until by the exercise of reasonable diligence it should have been discovered.

Evans v. Lipscomb, 470 S.E.2d 641 (Ga. 1996).

Question 40

What does the parol evidence rule state regarding reformation?

Answer 40

The parol evidence rule does not prevent a party from presenting evidence of a prior agreement to establish fraud or mistake.

Smith v. Jones, 269 S.E.2d 471 (Ga. Ct. App. 1980); Restatement (Second) of Contracts § 214(d).

Question 41

Does the Statute of Frauds prevent the reformation of a contract?

Answer 41

No, the Statute of Frauds does not prevent the reformation of a contract, especially when essential terms are mistakenly omitted or incorrectly stated.

Head v. Stephens, 109 S.E.2d 772 (Ga. 1959); Restatement (Second) of Contracts § 156.

Question 42

Who may file a petition for reformation of a trust instrument?

Answer 42

The petition for reformation may be filed by the trustee, any trust beneficiary, or the personal representative of the settlor’s estate in the case of an unfunded testamentary trust.

Question 43

What must be proved to reform a trust provision?

Answer 43

The settlor’s intent must be proved by clear and convincing evidence.

Ga. Code Ann. § 53-12-60.

Question 44

What is a writ of ne exeat?

Answer 44

A writ of ne exeat may be sought to restrain a person from leaving the jurisdiction of the state.

Question 45

In what situations can a writ of ne exeat be sought?

Answer 45

It can be sought in situations involving obligors, persons with interest in decedent property, remaindermen, mortgagees, or any person interested in property about to be removed.

Question 46

What is a quia timet proceeding?

Answer 46

A quia timet proceeding is to protect an interest in land and may take one of two statutory forms.

Question 47

What is the purpose of a conventional quia timet action?

Answer 47

It seeks to cancel an instrument that casts a cloud over the complainant’s title or subjects them to future liability or present annoyance.

Ga. Code Ann. §§ 23-3-40-44; Duffee v. Jones, 68 S.E.2d 699 (Ga. 1952).

Question 48

What does the ‘quia timet against all the world’ provision allow?

Answer 48

It permits the speedy resolution of disputed title claims to land and the removal of any cloud upon title to land.

Question 49

What is a bill of peace?

Answer 49

A bill of peace is an equitable remedy available to confirm a right previously established by more than one legal trial and to avoid a multiplicity of actions.

Question 50

What is the purpose of equitable interpleader in Georgia?

Answer 50

Equitable interpleader applies when a person possesses property or funds to which more than one person lays claim, making it doubtful or dangerous for the holder to act.

Question 51

What distinguishes Georgia equitable interpleader from federal statutory interpleader?

Answer 51

Unlike federal statutory interpleader, the Georgia statute requires that the stakeholder cannot advance a claim to the subject matter of the action.

Ga. Code Ann. §§ 23-3-90-92; Midland Nat’l Life Ins. Co. v. Emerson, 174 S.E.2d 211 (Ga. Ct. App. 1970).