Pg 23

Question 1

What are proper grounds for rescission?

Answer 1

- misrepresentation
– failure of consideration
– duress or undue influence
– illegality
– mistake
– breach of contract

Question 2

How can misrepresentation be a ground for rescission?

Answer 2

During formation of the contract the seller misrepresented a fact that a reasonable buyer would have relied on and did rely

Question 3

How can failure of consideration be a ground for rescission?

Answer 3

The plaintiff isn’t getting what he bargained for

Question 4

How can rescission be granted for illegality?

Answer 4

If the subject matter of the contract is illegal

Question 5

What is the effect of rescission?

Answer 5

It cancels the contract so that the contract is no longer enforceable.

Question 6

Why is it that restitution goes hand-in-hand with rescission?

Answer 6

Because when a contract is canceled, the court wants to restore the parties to the position they were in before forming the contract. So the party seeking rescission must be willing to return any property that he got from the other party since both parties must be restored to the position they were in before formation

Question 7

What is involved in reformation?

Answer 7

If parties make an agreement, but in putting it in writing they don’t accurately reflect the terms of the agreement, the writing is then reformed so that it does. Contracts are not reformed, writings are reformed. Courts do not change the basic agreement between the parties, they just change the writing to make it accurately reflect the terms of the agreement. Then the reformed writing can be enforced and the party can either sue for breach of the writing or for specific performance. Reformation is only an equitable remedy and is not enforced at law.

Question 8

What are different grounds to seek reformation?

Answer 8

Fraud or mistake. If either of these interfere with putting the agreement into writing, then the writing is reformed to reflect the true agreement of the parties.

Question 9

What is the point of reformation?

Answer 9

To try to reflect the accuracy of the agreement between the parties

Question 10

What has to be proven for reformation?

Answer 10

First, the party must prove the terms of the agreement, then that the writing is not an accurate reflection of the agreement

Question 11

Is parol evidence allowed in the process of reformation of a contract?

Answer 11

Yes, in order to reform, you must bring in parol evidence to contradict the writing and to show that it must be reformed. This is OK because reformation is a specific exception to the parol evidence rule

Question 12

What do you need to do an essay when you’re discussing remedies?

Answer 12

• identify a liability theory
  – identify the remedy
  – identify potential liability defences

Question 13

What is a remedy defense?

Answer 13

These are used when a plaintiff is seeking an equitable remedy and the defendant wants to prevent that equitable remedy. It is a reason not to give the plaintiff the remedy because of his own actions

Question 14

What are the major equitable defenses?

Answer 14

Laches and unclean hands

Question 15

How does laches apply to the government both historically and modernly?

Answer 15

• historically: gov was not be estopped by laches for claims that affect the public interest
  – modernly: when government actions occur to protect the public interest, the bar still applies, but it does not apply when the suit deals with the rights of private individuals or business or commercial interests

Question 16

What are some factors that may excuse or justify a delay in bringing a claim?

Answer 16

– socio economic status/poverty
- incapacity
- illness
– war-time conditions
– other party inducing delay
– dispute over property rights
– good faith negotiations with the other party
– investigation of claims and preparation for litigation
– pursuing other avenues for legal resolution

Question 17

What does accrual mean?

Answer 17

The time that a suit can be brought. Usually this is the date that the plaintiff sustained injury

Question 18

What are the two exceptions to accrual being the date that the plaintiff sustained injury”

Answer 18

– discovery doctrine

- continuing injury or violation

Question 19

How does the discovery doctrine relate to the date of injury?

Answer 19

A cause of action accrues when a plaintiff knows about the injury or harm or should have known about it. The SOL begins when a plaintiff suspects or should suspect his injury is caused by wrongdoing or has notice of something that would put a reasonable person on inquiry.

Question 20

What is involved in the exception to accrual that calls for continuing injury or violation?

Answer 20

If a defendant engages in sustained, protracted wrongdoing, each act is a separate and distinct cause of action with its own SOL and a new claim occurs with each violation. It doesn’t count if the course of conduct is complete but the injury continues [like the defendant stopped the nuisance but pollutants still affect ground water]. This needs ongoing injury.

Question 21

How does tolling happen?

Answer 21

- minority
– insanity
– imprisonment
– being absent from the state
– estoppel
– concealment
– unusual catastrophes like earthquakes or a sudden coma

Question 22

What is tolling?

Answer 22

This suspends the running of the SOL from either statutes or equity

Question 23

What is the defense of laches?

Answer 23

This bars a plaintiff that unreasonably delayed bringing an action. The idea is that equity aids the vigilant, not those that sleep on their rights. The focus is prejudice to the defendant. If he can show that the plaintiff unreasonably delayed in asserting his rights and caused prejudice to the defendant, then the court will not issue equitable relief

Question 24

What does it mean to say that laches is a defence to issuance of a remedy, not to a liability theory?

Answer 24

If laches bars an equitable remedy, the plaintiff can still get damages as compensation for the wrong. Equitable defences do not affect legal remedies

Question 25

What is the rationale behind laches?

Answer 25

This encourages parties to act diligently to bring claims and it stops one party from taking unfair advantage of another

Question 26

What is the SOL burden for laches?

Answer 26

If the plaintiff doesn’t bring a legal claim for damages within the SOL period, the claim is barred. But if the plaintiff brings a claim for equitable relief within the SOL and the defendant wants to assert laches, he must prove that the plaintiff’s delay was an unreasonable period of time that caused prejudice to the defendant. If he can satisfy that burden, then the plaintiff will not get equitable relief, but the plaintiff can still pursue damages against the defendant. If the claim for equitable relief has been filed after the SOL has run, the delay is presumed to be unreasonable and the defendant just has to prove he suffered prejudice because of it. Then laches prevents the equitable remedy unless the plaintiff can show that the delay was not unreasonable. If plaintiff can not show that, then laches prevents the equitable remedy from being given, and since the SOL has run, he cannot get damages either

Question 27

What is the difference between SOL and laches?

Answer 27

• SOL: bars legal remedies based solely on the time given in the statute. This involves a definite COA timeframe. If you don’t file within that time, then the legal remedy is not available. This only applies to legal remedies
  – laches: only applies to equitable remedies and the focus is on prejudice to the defendant, not timing. The timing is a factor, but it’s not the only thing

Question 28

If a plaintiff sues for specific performance six months before the SOL runs, and one month later the court says that the plaintiff waited too long and denies specific performance based on laches, what can he do?

Answer 28

You can still sue for damages because the equity equity court only barred a specific performance claim, but there’s still time left for SOL, so the legal claim can still be filed