K Remedies Flashcards
K Legal Remedy: Nominal Damages
- P suffers no loss BUT used to establish a right
Types of K remedies (legal and equitable)
Legal Remedies
- Damages: Com/Expect, Consequential, Nom, Liq
1) Compensatory: Direct or Consequential + FACCUV (Foreseeable, Actual Causation, Certainty, Unavoidable, Value: fmv at breach)
2) Nominal
3) Liquidated Damages
Restitutionary Remedies
- Legal Restitutionary: prevent unjust enrichment
1) Restitutionary Damages
Equitable Remedies
- Specific Performance: CCIMFD (Contract is valid, Conditions are performed/excused, Inadequate legal remedies, Mutuality of performance, Feasibility of enforcement, Defenses must be overcome LUUUM: laches, Unclean Hands, Undue Hardship, Unconscionability, Mutual mistake)
- Rescission: IFILMMUD (Illegality, Failure of Consideration, Impossible Performance, Lack of capacity, Misrepresentation of material fact or law, Mistake: mutual or uni, UI, Duress)
- Reformation
K Legal Restitutionary Remedy: Restitutionary Damages
- Apply to Unenfoceable K (mistake, lack of capacity, SoF, etc) and to Breach of K cases
- Non-breaching party can recover for services rendered or recover property
- Breaching party cannot recover money (Modern view: allowed to recover - cost of other party)
K Equitable Remedy: Specific Performance
Cha Cha Is My Favorite Dance
- Forces D to perform on valid K
Elements:
1) Contract MUST be valid (not unconscionable) - K Terms MUST be sufficiently definite and certain (more proof than for money damages)
2) Conditions for P are satisfied/performed or excused by NON-breaching party
- If P breaches but partially performs look for Restitutionary remedies
- Minor defect on RealProp: Seller CAN enforce K
- Major defect on RealProp: Seller cannot enforce K unless cured by closing -vs- Buyer CAN enforce K
- Ct MUST lower purchase price to reflect defect
3) Inadequacy of legal remedy (no compensatory: D is insolvent, damages are speculative, etc)
- RealProp (unique) between two parties
BUT if TP BFP not in the K, B cannot recover RP from BFP
- Personal Prop NOT unique
Except: Rare goods or One of a Kind (art, antiques, etc) ID in the K
- If goods are not unique award damages
4) Mutuality of performance: counter-performance
5) Feasibility of enforcement: performance is possible under the K
- NOT personal services
- Covenants not to compete ARE enforceable if a) services are unique AND b) scope is reasonable
5) Defenses overcome: SLUUMM
- Equitable Defenses
a) Laches: clock runs when P learns of injury and P’s right is cut off when relief is Unreasonable AND Prejudicial to D
b) Unclean Hands: P’s wrongful act MUST relate to claim
c) Unconscionability at the time of K formation
- K Defenses
Mistake
Misrepresentation
SoF (RealProp exception: any two is sufficient: payment + possession + valuable improvement OR Estoppel based on Detrimental Reliance)
- If Specific Performance NOT available award look for Restitutionary
- Time is of the Essence Clause: award Specific performance EVEN if clause is valid
- Specific Performance AND Liquidated damages are allowed UNLESS K provides Liquidated is only remedy
K Remedy for Services K
Compensatory
Restitution
Specific Performance (ONLY for covenant not to compete)
K Equitable Remedy: Rescission (K excuse)
- ONLY if performance remains (cannot rescind once fully performed)
- MUST be mutual w/consideration (effectiveness of consideration is sufficient consideration)
- Grounds for rescission: I FILM MUD (all occurred AT THE TIME of K formation)
1) Illegality after K
2) Failure of consideration
3) Impossible performance: unanticipated event - objective test
4) Lack of capacity
5) Misrep of material fact/law: MUST show actual reliance
6) Mutual Mistake of material fact: NOT on collateral fact (e.g. quality, desirability, fitness of prop) - Unilateral mistake NOT rescission
Exception: non-mistaken party knew or should have known of the mistake
7) UI
8) Duress - Defenses:
1) Laches: clock runs when P learns of injury and P’s right is cut off when relief is Unreasonable AND Prejudicial to D
2) Unclean Hands: P’s wrongful act MUST relate to claim
Analysis to determine type of K remedy
1) Legal remedies
2) Restitutionary remedies (legal and equitable)
3) Equitable remedies
K Remedy for Sale of RealProp
Compensatory
Restitution
Specific Performance
Rescission
Reformation
K Legal Remedy: Compensatory Damages
Compensatory: Put injured party in the position he would have been in had the K not been breached by protecting P’s expectation interest
Elements: FACCU
1) Foreseeability (proximate causation): injury was foreseeable at time of K FORMATION (limits liability)
2) Actual Causation: but-for factual test
3) Certainty: Cannot be speculative
- Direct Damages: flow inherently from the wrong
- Consequential: (natural result + notice) apply in lost reputation case
4) Unavoidable: P took reasonable steps to mitigate injury/loss
Measure:
-Std
Promise - Given + Consequential (natural result + notice) + Indidental - Expenses saved
- S Breach + B keeps defective goods
FMV if no breach - FMV as defective + Indidental - Expenses saved - S Breach + S keeps defective goods:
FMV - K price or (reasonable replacement - K price) + Indidental - Expenses saved - B breach + B Keeps goods:
K price + Indidental - Expenses saved - B breach + S keeps goods
Kprice - resale + Incidental - Expenses saved
-Loss-volume: lost profit (Kprice - Market price) + Indidental - Expenses saved
K Remedy for Sale of Personal Prop
Compensatory
Restitution
Specific Performance
Rescission
Reformation
K Remedy for Construction K
Compensatory
Restitution
Specific Performance (Only Owner but difficult enforcement because of services)
K Legal Remedy: Liquidated Damages
Elements:
1) Damages for K breach are DIFFICULT to measure AT THE TIME of K formation
and
2) Amount is REASONABLE ESTIMATION of compensatory damages
- If valid: ONLY liquidated and NO actual damages
If invalid: ONLY actual
If Clause provides party can choose either actual or liquidated = invalid clause = Give P actual compensatory damages - Specific Performance AND Liquidated damages are allowed UNLESS K provides Liquidated is only remedy
Tip:
if set amount = NOT reasonable estimation
If formula or range amount = reasonable estimation
K Equitable Remedy: Reformation
- Ct changes written K to conform w/party’s original understanding
- MUST be a valid K (meeting of the minds)
- Grounds for Reformation: MM
1) Misrep of material fact/law: MUST show actual reliance
2) Mutual Mistake of material fact: NOT on collateral fact (e.g. quality, desirability, fitness of prop) - Unilateral mistake NOT rescission
Exception: non-mistaken party KNOWS of the mistake - Defenses:
1) Laches: clock runs when P learns of injury and P’s right is cut off when relief is Unreasonable AND Prejudicial to D
2) Unclean Hands: P’s wrongful act MUST relate to claim - PER NOT a defense to reformation
