Remedies

Question 1

Compensatory Damages

Answer 1

General Damages: Foreseeable Damages

Special Damages: Unforeseeable damages.

Question 2

Nominal Damages

Answer 2

Nominal. Duh. Where no damage.

Question 3

Punitive Damages

Answer 3

Generally limited to intentional torts where there is “willful, wanton, or malicious conduct”. Can apply if there is reckless misconduct. Must bear some relationship or proportionality to the actual/nominal damages.

Look at (i) reprehensible nature; (ii) disparity between the actual or potential harm suffered and the award; and (iii) difference between punitive award and analogous civil or criminal penalties.

Tip: if punitive damages are ten times the compensatory damages they are grossly excessive.

Question 4

Constructive Trust

Answer 4

Purpose: To prevent unjust enrichment.

Available when: D has acquired title to property at expense of another through fraud, undue influence, abuse of confidence, MISTAKE, or the like.

Effect: D must transfer title to P. No deficiency judgment.

Priority over unsecured creditors: Yes.

Loss to BFP: Yes.

TIP: When CT and EL are both available use CT where property acquired at P’s expense is worth as much or MORE than his claim.

Question 5

Equitable Lien

Answer 5

Purpose: To prevent unjust enrichment

When available: Same as CT BUT the D has used the funds to improve property the D owns.

Effect: P obtains a lien on property obtained or improved and may obtain a deficiency judgment.

Priority over unsecured creditors: Yes.

Loss to BFP: Yes.

TIP: When CT and EL are both available use EL where property acquired at P’s expense is worth as much or LESS than his claim.

Question 6

Injunctive Relief

Answer 6

Elements:

1. Legal remedy inadequate (continuing wrong is one).
2. Must be feasible to enforce
3. Is hardship to D greater than the benefit to P?
4. Are any defenses available to D?

Tips: ANALYZE whether Mandatory vs. Negative Injunction: Mandatory are hard to enforce, you have to supervise D. Negative is easier because of compellance power.

ANALYZE THIS. WHY IS ONE HARDER THAN THE OTHER. Explain why one remedy is mandatory or negative.

Question 7

Injunction Defenses

Answer 7

Laches: Unreasonable delay that prejudices the D.

Unclean hands: P is guilty of unfair dealing with respect to the TRANSACTION BEING SUED UPON.

Freedom of speech.

Question 8

Interlocutory Injunction: PI and TRO

Answer 8

Purpose: To preserve the status quo

Elements: P must show (i) likely to prevail on the merits; and (ii) would suffer irreparable harm without it.

Two types, PI and TRO.

PI: Only granted after regularly adversarial hearing. The PI lasts till end of the judicial proceeding.

TRO: May be granted with strong showing of why notice should not be required. Usually have to attempt to notify or explain why notice would be futile. Usually only lasts 10 days in CA and 14 in federal court.

Tip: Permanent injunction is the final outcome type of injunction. Lasts as long as necessary. If question is unclear, assume this is what is desired.

Question 9

Injuries to Personal Property

Answer 9

1. Destruction: Market value at time of destruction, less salvage plus interest.
2. Injury to chattel (trespass): Diminution of value or cost of repair.
3. Conversion: Market value at time of conversion, plus interest and costs of pursuit.

Question 10

Injuries to Real Property

Answer 10

1. Simple trespass: Nominal.
2. Trespass causing severance (severance means property is severed from the realty, like removing timber, minerals, etc): Damages, restitution, or injunction as appropriate. Damages is diminution in value of the land, or conversion of what was taken). Other restitutionary measures are also available.
3. Trespass causing other injury (such as dumping): Damages or injunction. Possibly rental damages.
4. Trespass effecting ouster: Ejectment and rental damages
5. Destruction of Realty: Difference (diminution) in value, sometimes full market value if destruction is complete.
6. Destruction/Interference w/Easements: Diminution or cost of repair as applicable. Also injunction.

Question 11

Injuries to Real Property Enroachments

Answer 11

Defined: Where D invades P’s land or airspace.

Damages: Rental value, if permanent, then market value.

Restitutionary Remedy: Ejectment

Injunction

Question 12

Injuries to Real Property: Waste

Answer 12

Voluntary Waste: Deliberate destructive acts. Diminution in value, also injunction as appropriate.

Permissive Waste: Where D has obligation, but fails to act, and land falls into disrepair. Cost of repair but not usually injunction.

Ameliorative Waste: Where D improves value of land. Usually no damages, and injunction usually not available.

Equitable Waste: Injunctive relief? I don’t get this one.

Question 13

Nuisance

Answer 13

1. Damages: loss of use and enjoyment.

2. Injunction. Coming to the nuisance may be weighed where the purchase price affected the claimed nuisance.

Question 14

Personal Injury

Answer 14

1. General Damages: pain and suffering, mental/emotional anguish, and loss of enjoyment of life.
2. Special Damages: economic loss, future medical expenses, etc). Must be pled with specificity.
3. Privacy: Damages (mental anguish) and injunctive relief.

Question 15

Fraud

Answer 15

1. Proof of actual injury
2. Consequential damages
3. Where malice is shown, may get punitive
4. Rescission.

Question 16

Inducing Breach of K/Prospective Advantage

Answer 16

1. For Breach of K, the damages are the losses proximately caused.
2. For prospective advantage, hard to show damages, but if you can show a benefit conferred to D can seek restitution of the benefit conferred.

Question 17

K Damages: Compensatory Damages

Answer 17

Awarded to protect expectation interest, must be (i) foreseeable; and (ii) certain.

Also, liquidated damages are permissible if at time of K formation actual damages would have been difficult to ascertain.

If P could have reasonably mitigated the damages, then no recovery of COMPENSATORY damages.

NO PUNITIVES

Question 18

Quasi Contract

Answer 18

Imposes an obligation to pay for unjust gain received pursuant to an unenforceable K. Generally a party recovers the value and/or nature of the benefit conferred.

Question 19

Specific Performance

Answer 19

Elements:

1. Must have a valid K. Terms must be MORE definite and certain than in an action for $$$.
2. Has the P performed/ready to perform?
3. Is the legal remedy inadequate? (something unique involved? liquidated damages not a bar, usually there to ensure performance, not as an alternative)
4. Is enforcement feasible? (may not force a person to PROVIDE services)
5. Any defenses? (SoF, HARDSHIP (kind of like injunction analysis), unclean hands, laches, etc.)

Question 20

Rescission

Answer 20

Cancels the K where it results from mistake, fraud, duress, or where K is materially breached.

Legal Recessions: Effected by P giving back anything gained under K and prompt notice. After which they can seek restitutionary remedies or quasi contract or replevin.

Equitable: Court ordered.

Question 21

Grounds for Rescissions

Answer 21

Most significant are mistake or misrepresentation.

1. Mistake:
   (a) mutual mistakes affecting the basis of the bargain;
   (b) unilateral mistake only if one party knew, or should have known, of the other party’s mistake, and it goes to a material issue.
2. Material misrepresentation that was relied upon.

Question 22

Rescissions Damages

Answer 22

Actions for damages affirms the K, is mutually inconsistent with rescission. Seek rescission first, then damages.

Question 23

Reformation

Answer 23

Purpose: To conform a writing/K to the parties TRUE agreement. Must have a valid ORIGINAL K.

Grounds: Mutual mistake, unilateral mistake (if other party knew or should have known), or material misrepresentation, mistake of law/fraud.

Effect: Parties bound to K but the K changes.

Defenses: Laches or subject matter sold to a BFP.

Question 24

Application of Remedies to K to Buy and Sell Personal Property

Answer 24

1. Damages

2. Specific performance if chattel is unique, or damages highly speculative (output contracts)

Question 25

Application of Remedies to K to Buy and Sell Real Property

Answer 25

1. Damages: (a) Where seller breaches, buyer gets out of pocket loss or benefit of bargain; (b) where buyer breaches, seller recovers difference between market value and K price PLUS consequential damages.
2. Restitution: Where there is fraud or material breach of K, the P can rescind and get restitution of the benefits conferred. (recover offset by value received).
3. Specific Performance: Available with land because land is unique. Buyer wants land, and seller wants to get rid of the land and has to find a new buyer.

Question 26

Application of Remedies to K to Buy and Sell Real Property (Feasible)

Answer 26

For property, but always consider:

1. Is there jurisdiction over the parties or property? Is land outside the jurisdiction?
2. Is there too much supervision required by the Court?
3. Is a negative injunction appropriate? Watch out for personal service K’s where employee tries to breach and work for a competitor.

Question 27

Application of Remedies to K to Buy and Sell Real Property (Defenses)

Answer 27

1. SoF, BUT part performance may take it out of the SoF. Part performance = (a) buyer possession + payment; OR (b) possession + improvements.
2. Other equitable defenses.
3. Remember Equitable Conversion, buyer is considered the equitable owner when the K is executed and the seller is considered to ONLY have right to the $$$.

Question 28

Construction Contracts

Answer 28

1. Owner Breach:

Damages: (a) Builder recovers lost profits if K is wholly executory; (b) if K is fully performed then K price plus interest; (c) if K partially performed then measured by deducting from the K price the cost of completing the K (basically the value of builder’s performance).

Restitution: If owner repudiates after partial performance, Builder may rescind the K and sue in quasi contract for value of the benefit conferred.

2. Builder Breach:

Damages: (a) If Builder has substantially performed, it is the cost of repair or replacement or difference in value if it had been built as intended vs. as built; (b) if Builder abandons the K then it is the cost of repair or completion less anything owed to the builder, plus compensation for delay.

Restitution: Permitted.

3. Specific performance is permitted.

Question 29

Personal Services Contracts

Answer 29

1. Damages: (a) If employee breaches then employer recovers cost of obtaining replacement; (b) if employer breaches, employee gets wages due or promised, less avoidable damages.
2. Restitution: (a) if employee breaches, the employer may rescind and seek restitution of wages paid but not earned; (b) if employer breaches, the employee may elect a restitutionary remedy and sue for the reasonable value of the services rendered. (NOTE: employee who materially breached may still recover value of services rendered less the employer damages).
3. Specific Performance: Cannot force someone to work. But can enforce a restrictive covenant that is reasonable in time, duration, and scope where the services provided are unique.

Question 30

Replevin

Answer 30

1. Used to recover specific chattels wrongly taken or detained by Defendant.
2. Article 2 of UCC permits buyer to replevy undelivered, identified goods, if, after reasonable effort, buyer is unable to secure adequate substitute goods.
3. Replevin not an adequate remedy where there is no guarantee the cops will be able to locate the goods.

Question 31

Defense of Hardship

Answer 31

D must show that there was (a) inadequacy of consideration; (b) marked inequity between the parties; AND (c) unfair advanced exercised by the P.

Mere fact that subject matter of K is worth more is not relevant.

This is a defense to specific performance.

Question 32

Compensatory Damages

Answer 32

1. Compensate for breach by putting the non-breaching party into the position they would have been in had the promise bene enforced.
2. Expectation damages are a TYPE of compensatory damages that are measured by the benefit of the bargain, i.e., the difference between MARKET PRICE AND K PRICE.

Question 33

Incidental Damages

Answer 33

In a sale for GOODS the non breaching party may also recover incidental damage (expenses for inspection, receipt, transportation, care, custody of goods, other reasonable expenses).

Question 34

Consequential Damages

Answer 34

1. Those losses that are above and beyond expectation damages, these are unforeseeable damages (lost profits, future medical expenses, etc.).
2. Generally they arise due to the P’s particular circumstances.
3. CANNOT BE SPECULATIVE..

Question 35

Purchase Money Resulting Trust

Answer 35

(i) Court may impose a purchase money resulting trust after an acquisition of real property in which (a) one person takes legal title (the ‘trustee’); and (b) another supplies consideration before or at the same time the other person takes title.
(ii) trustee’s sole duty is to convey title to beneficiary
(iii) where beneficiary pays only part of consideration, only entitled to pro-rata portion of the title.

Exceptions:

(i) Generally, will not imply a trust where title is taken in the trustees name to prevent creditors of the would-be beneficiary from getting to her property; HOWEVER, illegality of purpose will not bar relief where the illegal scheme is slight compared to the trustees unjust enrichment.

NO WRITING NECESSARY IMPOSED BY COURT.

Question 36

Hardship

Answer 36

Court may perform a balancing test to determine if the benefit to the Plaintiff is outweighed by the burden to the Defendant. Majority view is that where this is the case the P may only seek monetary damages.

Question 37

Damages for a Continuing Nuisance

Answer 37

Rule: (i) traditionally, it is the value of the loss of use and enjoyment PLUS costs incurred in trying to abate AND damages for annoyance; (ii) damages must be caused by D breach, be foreseeable, CERTAIN, and unavoidable.

Damage Computation/Limit: (i) Computed from the time the nuisance began up to commencement of the action; (ii) recovery for FUTURE losses not available because D may cease at any time.

Permanent Nuisance: (i) developed to avoid a multiplicity of suits, allows recovery for permanent diminution of the land; (ii) mere proof of physical permanence showing that nuisance cannot be practically abated is enough.

Question 38

Laches

Answer 38

Elements: (i) D must show that P has unreasonably delayed in asserting an equitable claim; and (ii) that the delay has prejudiced the D.

Laches runs from the time P had knowledge that a right has been infringed .