Remedies

Question 1

Specific Performance

Answer 1

SP: An order from the court to the breaching party to perform. Requires: (1) A valid K, (2) satisfaction of P’s conditions/performance, (3) inadequate legal remedy, and (4) feasibility.

Question 2

Ks where SP is typically available vs. not available

Answer 2

Available: land sale Ks (because all real estate is unique) and Ks for sale of goods that are rare or unique at time performance is due

Not available: Service Ks (bc of problems of enforcement and involuntary servitude). But Ks will enforce an order of SP not to compete if (1) services are unique, and (2) the covenant not to compete is reasonable.

Question 3

Rescission

Answer 3

Rescission is a remedy where the OG K is considered voidable and rescinded. The grounds must have occurred before or at the time the K was entered. Grounds include:

(1) Mutual mistake of material fact
(2) Unilateral mistake if other party knew or should have known
(3) Unilateral mistake if hardship by the mistake party is so extreme it outweighs the other party’s expectations under the K,
(4) Misrep of fact or law by either party as to a material factor of the K that was relied upon,
(5) Other grounds: duress, undue influence, illegality, lack of capacity, and failure of consideration

Question 4

Reformation

Answer 4

A remedy whereby the writing setting forth the agreement is changed so that it conforms to the original intent of the parties. Grounds for reformation include

(1) A mistake in which there’s some variance b/w the original agreement and the writing, or
(2) Misrepresentation relating to the content of the record (not misreps as to the SM).

Failure to read the record does not preclude a party from obtaining reformation.

Question 5

Defenses to equitable remedies: 3

Answer 5

Laches, unclean hands, sale to a BFP

Question 6

Laches

Answer 6

A claim that (1) the P has delayed bringing the action and (2) that the delay has prejudiced the D.

Question 7

Unclean hands

Answer 7

A claim that the party seeking SP is guilty of wrongdoing in the tx being sued upon.

Question 8

Sale to a BFP

Answer 8

A claim that the SM has been sold to a person who purchased for value and in good faith.

Question 9

Buyer’s Nonmonetary Remedies under UCC

Answer 9

(1) Cancellation: if B rightfully rejects good bc they do not conform
(2) Replevy ID’d goods: If B has made part payment on the goods and the S has not delivered, or where a B is unable to secure adequate substitute goods, the B may replevy the goods in certain circs.
(3) SP: available where goods are unique or in other proper circs

Question 10

Seller’s non monetary remedies

Answer 10

(1) Withhold goods: S can withhold if B fails to make payment by deliver, or where goods were sold on credit and the S learns B is insolvent.
(2) Recover goods: (i) S can recover goods (1) if B was insolvent when it received the goods and (2) S makes a demand within 10 days from B receiving them. (ii) S can reclaim goods at ANY time if B misrepresented its insolvency to S in writing within 3 months before delivery.
(3) Force goods on B: this is limited to an action for price when the S is unable to resell the goods to others at a reasonable price

Question 11

Damages: General Rule

Answer 11

Damages can be recovered only to the extent they can be proved with reasonable certainty and could not be avoided with reasonable effort.

Question 12

Compensatory damages

Answer 12

These seek to put the non breaching party in the position she would have been in had the promise been performed. The standard measure is expectation damages, i.e. sufficient damages to give P the benefit of the bargain / buy substitute performance.

For me: If profit is certain, it’s included in expectation damages.

Question 13

Reliance damages

Answer 13

If expectation damages are too speculative, the P may elect to receive reliance damages, which award her the cost of her performance, i.e. they are designed to put the P in the position she would have been in had the K never been formed.

Question 14

Consequential damages

Answer 14

These are special damages related to the nonbreaching party’s particular circs. These can be recovered only if, at the time the K was made they were reasonably foreseeable. The breaching party must have known or had reason to know of the special circs giving rise to the damages.

Note: these are ONLY available to buyers under the UCC; never sellers.

Question 15

Incidental damages

Answer 15

These are costs to the injured buyer or seller of transporting/caring for goods after a breach and of arranging a substitute transaction. They are always recoverable.

Question 16

Punitive Damages

Answer 16

NOT awarded in K cases

Question 17

Nominal damage

Answer 17

May be awarded when a breach is shown but no actual loss is proven.

Question 18

Liquidated damages

Answer 18

Parties to a K may stipulate what damages are to be paid in the event of a breach. They are upheld if damages (1) were difficult to estimate at the time of K formation, (2) are a reasonable forecast of probable damages, and (3) cannot operate as a penalty.

Question 19

Avoidable damages / duty to mitigate

Answer 19

An injured party cannot recover damages he could have avoided (mitigated) with reasonable effort. These are subtracted.

Question 20

Buyer’s damages under UCC: 3 options

Answer 20

(1) Cover damages (use if B covers in good faith): cover price - original K price (+ incidental + consequential - expenses saved as a result of S’s breach)
(2) Market damages (use if B doesn’t cover or covers in bad faith): Market price - K price (+ incidental + consequential - expenses saved by S’s breach)
(3) Loss in value (use if B keeps non-conforming goods): value as promised - value as delivered (+ incidental + consequential). If B wants these, he must notify S within a reasonable time of the nonconformity.

Question 21

Buyer’s breach if S anticipatorily breaches

Answer 21

Market price at the time the B learned of the breach - K price

Question 22

Seller’s damages under UCC: 4 options

Answer 22

(1) Resale damages (if S resells in good faith): K price - resale price
(2) Market damages (if S does not resell or resells in bad faith): K price - market price
(3) K price: only available if S cannot resell the goods
(4) Lost profit: only available if S is a lost volume seller (i.e. the profit S would have gotten had he made the sale).

Question 23

Employment Ks: breach by employee

Answer 23

Costs of replacing employee - amounts owed to employee for work done

Question 24

Employment Ks: breach by employer

Answer 24

K price - amount employee made or would have made by taking similar position (employer must prove position available)

Question 25

Construction K: breach by homeowner (before completion vs. after completion)

Answer 25

If before construction: expected profit + costs expended
If during construction: K price - cost of completion
If after completion: K price + interest

Question 26

Breach by builder

Answer 26

Before or during: Costs of completion + damages from delay - quasi-K recovery for benefit conferred by builder
Late completion: value of lost use

Question 27

Restitution / Unjust Enrichment

Answer 27

Restitution is available to prevent unjust enrichment when one has conferred a benefit on another and it would be unjust for the benefitted person to retain the benefit. The measure of restitution is the value of the benefit conferred. This is usually measured by the value received by the D, but can also be measured but he detriment suffered by P.

Question 28

Restitution if K was breached / unenforceable

Answer 28

In this case, the non-breaching party may choose to cancel the K and sue for restitution; if P has FULLY performed, he’s limited to K damages (so this is only available if P has not fully performed).

If the K was unenforceable, P can seek a quasi-K remedy.

Question 29

Restitution when NO K was involved: Quasi-K remedy

Answer 29

Available if (1) P has conferred a benefit on D, (2) P conferred the benefit with a reasonable expectation of compensation for its value, (3) D knew or had reason to know of P’s expectation, and (4) D would be unjustly enriched if he were allowed to retain the benefit without compensating P.