Remedies Flashcards

Question

When buyer repudiates the contract or refuses to accept the goods that conform to the contract, what can the seller recover in reliance damages?

Answer 1

Difference between the unpaid contract price and the market price at time of delivery plus incidental damage – expenses avoided ((2-708(1)); or

Answer 2

ii. Expectancy Damages Starting Point Rule: Profit seller would have received from full performance by the buyer + incidental damages and due credit for payments or proceeds of resale (is this different from lost volume sellers) Exception: Unlimited supply -Lost Volume Sellers? b. D gets profits from two boats Exception: Even if unlimited supply, if custom good, you cannot get two sales. iii. NOTE: In either case, seller can also recover incidental damages (2-710) such as the cost of reselling Buyer can recover: i. Deposit less any expenses owed to seller

Answer 3

P receives the value of goods as contracted minus the value of the goods they accepted.

Answer 4

General rule: Owner of pet that is killed can recover only the market value of the pet.

Answer 5

Reliance damages are used in torts and are out-of-pocket expenses.

Answer 6

Pain and suffering Wrongful death Constitutional harm

Answer 7

P may collect compensatory damages for pain and suffering. The court will likely use a per diem method to calculate pain and suffering where the plaintiff's attorney determines a daily amount and multiplies that out over the expected life of the plaintiff. Safeguards in place for per diem approach  Jury instructions,  Opposing counsel rebuttal, AND  Remittitur A concern with the per diem method is that the figure can be highly subjective (e.g., some of the future pains have yet to be suffered).

Answer 8

Golden rule argument is where the lawyer asks the jurors to put themselves in the place of the victim or the injured person and deliver the verdict that they would wish to receive if they were in that person's position.

Answer 9

Wrongful death claims are brought on behalf of the survivors, with the goal of putting survivors (as opposed to the decedent) in their rightful position.

Answer 10

Funeral expenses Compensation for decedent's lost wages

Answer 11

Monetary value of services decedent would have provided to spouse and children (e.g., household chores, childcare, education) Recovery for loss of love/attention/companionship NOTE: Awards in this area are all over the map; evidence of huge influence that race or gender might have in the outcome due to subjective calculation jury makes so room for biases g. NOTE: If wrongful death for child, go through factors i. Do basic rules on wrongful death ii. Apply each one to hypo 1. E.g., Funeral expenses yes 2. No lost wages for this decedent 3. No compensable services 4. So most of damages flow from loss of love 5. Framework is like a hoax – amounts all over the place

Answer 12

Constitutional harms are dignitary harms that are intangible in nature. Compensatory damages should not be presumed in a procedural due process violation, but nominal damages should be awarded. Injury must be shown – P must show that the violation of due process resulted in a concrete injury. Levka tries to propose subjective reaction to strip search and 7th Circuit said we don’t care, we look at objective criteria of your search compared to objective criteria as to others Concerns: Huge variations in damages awards even in comparable cases.

Answer 13

(1) Wage inflation (2) Appropriate discount rate (3) Price inflation ii. Wage and price inflation favor P iii. Discount rate favors D

Answer 14

Wage inflation is the general increase in wages people earn over time (due to cost of living adjustments and other factors). The court will apply a wage inflation rate to determine one’s future salary. Example 1. If no wage inflation, salary after 40 years= $26K. 2. If wage inflation of 3.5%/yr, salary after 40 yrs = $103K.

Answer 15

Future damages (income) must be discounted to the present value of the cumulative future damages. The discount is determined using the highest interest rate that could be earned on a safe investment. context: where P can put big chunk of money in high yield savings account and get more money than you gave them so have to apply discount factor to award Plaintiff is awarded an amount of damages that, if allowed to accrue interest at that rate over the relevant time period, would equal the total amount of cumulative future damages. This is done so that the plaintiff is not unjustly awarded. Thus here, because the plaintiff will receive damages for all her medical expenses including future expenses, the court will discount the damages expenses to present value. d. Rationale: If P gets total sum of money now, we’re overcompensating him, b/c instead of him earning those wages bit by bit over 40 years, he gets them all right now and can invest it all now and start earning interest on it in stock market e. If we assume 10% rate of return (D will argue this that you’re aggressive investor) P gets $38K today f. If we assume 5% rate of return P gets $61K today g. If we assume 3% rate of return (P will argue this, conservative lawyer) P gets $74K today

Answer 16

Price inflation is the increase in prices over a given period of time. Because one of her surgeries will not take place for three years, the court will have to account for price inflation in determining this part of the award. Example: A $1 today is worth less than a $1 tomorrow. If need surgery due to wrongful conduct in 5 years, and that surgery costs $5K today, it will cost more than that in 5 years due to price inflation.

Answer 17

1. Limitation of remedies 2. Liquidated damages 3. Avoidable consequences 4. Offsetting benefits 5. Collateral sources NOTE: Limitation of remedies and liquidated damages only apply in contract.

Answer 18

A limitation of remedies clause seeks to prevent the non-breaching party from recovering what the law would otherwise allow the party to recover upon a breach. Remedy example: You get a refund and no actual damages. But if remedy took four years to go out, then it fails of its essential purpose. Example the agreement may provide for remedies in addition to or in substitution for those provided in this Article and may limit or alter the measure of damages recoverable under this Article, as by limiting the buyer's remedies to return of the goods and repayment of the price or to repair and replacement of non-conforming goods or parts; and (b) resort to a remedy as provided is optional unless the remedy is expressly agreed to be exclusive, in which case it is the sole remedy. (2) Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in this Act. o (3) Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable.

Answer 19

A buyer might accept lesser remedies options in return for a lower price or due to their brand loyalty. There is a competing theme between the freedom to contract and the availability of a minimally adequate remedy in the event of a breach.

Answer 20

(1) If a remedy fails of its essential purpose by not providing minimally adequate relief, the court will default to the UCC. (2) Regardless of any provisions, the court will not bar consequential damages for personal injury from consumer goods (unconscionable)

Answer 21

Liquidated damages provisions are a reasonable estimate of actual damages that will be recovered by one party if other breaches. The estimate takes the form of either a fixed amount or formula. Example: Set amount of damages at $300/day if filming could not take place due to D’s antics.

Answer 22

A court will invalidate a liquidated damages provision that functions as a penalty. A clause functions as a penalty unless the two following requirements are satisfied. (1) Provision must be a good approximation of actual damages (must have a basis in fact); AND (2) Actual damages must be difficult to ascertain at the outset of the contract. Hypo: In hotel opening contract, to set good approximation, look at forecast on potential lost revenue, room reservations, labor costs, etc. Quimbee Note: If the actual damages suffered by the plaintiff are little or none at the time of the lawsuit, a court will not enforce the clause because it then constitutes a mere penalty.

Answer 23

Under the avoidable consequences doctrine, the plaintiff will be denied recovery for the amount of damages that he or she could have reasonable avoided or minimized. The defendant bears the burden of proof. Rationale: Promotes underlying fairness by not awarding the plaintiff damages which he or she could have reasonably avoided. Avoidable consequences (a defense to damages (not to liability) Only in contract Examples - P could have seen doc to avoid minor turning into major injury - Bad construction, P could have rented place out - P could have made reasonable effort to find job after - On exam, argue both sides. Personal injury example: i. Risks associated with surgery; costs associated with surgery; whether P had insurance; whether single parent with other responsibilities; fear of hospital

Answer 24

D has burden of showing P failed to avoid consequences - P does NOT have to pick the best option, just a reasonable one - Per SC (on wrongful term and avoidable consequences), P does not to take demotion or demeaning position. But P forfeits right to back pay/lost wages if does not take a job substantially equivalent to the one lost

Answer 25

When D's conduct not only causes harm to the plaintiff but also creates a benefit for the plaintiff, the value of that benefit can offset the damages owed to P. Only applicable to like for like. 1. Context: Sometimes P derives benefit from D’s wrongful conduct 2. Example: Wrongful term, new job wage will offset the lost wages recovery that the P would otherwise be entitled to receive

Answer 26

Under the collateral source rule, P can recover damages that include amounts for which he or she has already received compensation from sources independent of and collateral (separate) to the defendant. This does not allow for double recovery due to subrogation clauses. On Exam, if the facts do not state P has health insurance, mention the collateral source rule does not apply.

Answer 27

a. Deters D misconduct b. D should not get benefit of P’s prudence in getting insurance c. Do not penalize for people getting insurance

Answer 28

a. Notion of double recovery b. Note on exam that due to subrogation clauses in insurance policies, notion of double recovery is illusive because P has to pay back insurance company if wins

Answer 29

Punitive damages are a civil remedy intended to deter and punish a defendant for his reprehensible conduct. NOTE: Punitive damages should NOT be considered under compensatory damages.

Answer 30

Rule: Under the common law and statutes, most jurisdictions require the P to show malice in order to receive punitive damages.

Answer 31

1. Intent for something to happen; OR 2. Conscious disregard for the probability of harm - NOTE: Malice can be express or implied - NOTE: No punitives for mere or gross negligent conduct. - NOTE: Even if no compensatory damages (e.g., in trespass of neighbor, court can award punitives if malice).

Answer 32

Due process requires defendants to have notice of the bounds of personal liability; punishment should be fair and not arbitrary.

Answer 33

The Supreme Court Established Three Guideposts to Determine Whether Punitive Damages Comport with Constitutional Protections (BMW, State Farm) (1) Degree of reprehensibility of D’s conduct; a. The more reprehensible one’s actions, the more one is on notice of potential liability and thus is no violation of due process b. Only punish for D’s conduct to this party, not to non-parties i. However, take harm to non-parties to account for reprehensibility of D’s conduct. Prof says confusing. (2) Ratio of punitive to compensatory damages; a. There should be some reasonable relationship between compensatory and punitive damages so that D’s are more on notice of potential liability b. General Rule: Single digit ratio (between compensatory and punitives (cannot be more than 9 times) (3) Applicable civil and criminal penalties for this kind of misconduct a. Civil and criminal penalties give D notice on potential seriousness of certain harms and thus comport to due process considerations. b. Example: Here, there was a $10K civil sanction for fraud ON EXAM: Argue both sides.

Answer 34

Preventative remedies are designed to prevent harm before the harm occurs.

Answer 35

i. Coercive (injunction) ii. Declarative (declaration)

Answer 36

An injunction is a court order enforceable by sanctions for contempt of court that directs the defendant to do something or stop doing something. Injunctions are seen as extraordinary forms of relief.

Answer 37

Policy on Damages over Injunctions i. Injunction is an extreme interference with liberty ii. Judicial economy in that court must stay involved to ensure D doesn’t continue activity NOTE: Efficient breach doctrine allowing certain breaches to occur; courts do NOT largely adhere to this perspective

Answer 38

1. Ripe, imminent harm 2. Irreparable injury 3. Whether the injunction would impose an undue burden on the D 4. Whether the injunction would impose an excessive burden on the court 5. Whether the injunction is a prior restraint on free speech

Answer 39

- Ripeness requires an actual controversy as opposed to hypothetical or speculative fears. Example, in Humble, the court denied P's request for an injunction because no evidence D would actually shred litigation documents. - P has the propensity to harm - No moot cases where the case is already resolved - The scope of the injunction must equal the scope of the harm. Example: In Goodyear, the court found that Goodyear's age discrimination impacted one office (and one employee) so a nationwide injunction was too broad.

Answer 40

Is there as an adequate remedy at law? Injunctions are an extraordinary relief that interferes with one’s liberty and impede judicial economy by often requiring courts to be involved with monitoring a defendant’s continued actions.

Answer 41

Damages are not adequate when they cannot make P whole. Damages are adequate when they are complete and as practical and as efficient as an injunction.

Answer 42

1. Uniqueness 2. Difficulty in calculating damages 3. Whether market shortage 4. Potential for multiple lawsuit absent an injunction 5. Whether D insolvent

Answer 43

1. Real property including trees (Pardee) (land and that growing out of land cannot be replaced through damages since each piece of land is unique) a. General rule: if a lease, money damages, no injunction. 2. Some courts use uniqueness but others say even if unique, if economically interchangeable b/c a market value exists, no injunction 3. Prize-winning horse a. Argue Hadley where market value can be used for unique animal; damages given b. Argue Pardee where uniqueness (though not real land). A unique item that cannot be obtained from a different seller is sufficient for specific performance. c. She put compare Sampson and Mazzacone [xxx]

Answer 44

1. Example: Hard to calculate reputational harm (Continental where court issues injunction to stop travel broker from reselling Continental’s coupons; no monetary damage but reputational damage)

Answer 45

1. Look both objectively and subjectively 2. In Campbell, special carrots were personally valuable to the company, court grants injunction b/c special carrots not available on market 3. Even if objective test on uniqueness does not pass, if this particular P subjectively believes the product that makes it unique, this may be enough to obtain an injunction 4. NOTE: If P can cover breach by buying goods at a much higher price on open market, P should sue for damages (difference between the replacement grain's price and the contract price).

Answer 46

1. Example: D might not care about paying multiple damage awards so might continue behavior without an injunction.

Answer 47

Minority Jx will not consider whether D can pay

Answer 48

a. Whether harm of an injunction would significantly burden the D as opposed to the benefit to P (D has to scrap entire project just for P to lease advertising billboard)(Wagner) b. Rationale: Extraordinary remedy c. Consider this a balancing test d. NOTE: If encroachment unintentional, court will conduct Wagner balancing test; however, if intentional encroachment, court will NOT conduct balancing instead (will not look at burdens on the D). i. Intentional defined: Knew, should have known, or failed to take reasonable care. 1. D must have affirmatively investigated and not have ignored warnings. e. Example of balancing test (this gets to merits): f. Burden on D if injunction issued: move multimillion $ construction project. If cement plant with dust spewing, no injunction, D should not have to move plant to make P happy (Boomer) g. Burden on P if injunction issued: gain back a few feet of land

Answer 49

a. Types of Considerations a Court Will Take Into Account in Evaluating the Burden on the Court i. An order to do a one-time activity (e.g., take down a banner) will not seem to impose a significant burden on court. ii. An order to refrain from making any future statements would be burdensome, requiring repeated intervention every time D purportedly repeated the problematic behavior. b. Example: In Agyll (Safeway case), where Safeway breaks lease, too difficult for court to monitor Safeway hours, for 35 year lease. Damages adequate. No injunction for P.

Answer 50

A prior restraint is a government action that prohibits speech or other expression before the speech happens.

Answer 51

Courts are very reluctant to grant injunctions that will serve as prior restraints on First Amendment freedoms - Example: Defamation case; no injunction to stop D from speaking - Example: Even a court asking D to remove banner can be seen as a prior restraint - NOTE: On exam, talk about deliberate versus non deliberate framework - On EXAM, mention judicial economy as rationale.

Answer 52

D voluntarily stopping the harmful conduct is only enough to dismiss the request for an injunction if there is no reasonable likelihood of the D reengaging in the behavior. The court will look at the totality of the circumstances (three factors).

Answer 53

(1) Expressed intent to comply (2) Effectiveness of the discontinuance (how easy for D to reengage in the conduct) (3) Character of the past violations (were past violations inadvertent or intentional)?

Answer 54

1. the standard to decide whether the harm is still live is to ask ‘whether a cognizable danger of continued violation’ a. Example: In Grant, where the D resigned from the boards and ended the improper interlocks, the SC found there is not the slightest threat that the Ds will attempt any future activity in violation of the Clayton Act.

Answer 55

Anticipated nuisances do not warrant an injunction given injunctions are an extraordinary remedy. Speculative fears of an increase in crime or decrease in property value is not evidence of a ripe, cognizable harm. If known quantity measures (e.g., a dump or funeral home), injunction more likely. Example: In CT Halfway House, before halfway house built, P seeks injunction barring house from operating alleging will be nuisance. P cites increase in crime and decrease in property value. Court finds both P’s arguments are speculative. No evidence so no ripe, cognizable harm.

Answer 56

One that bars conduct that is otherwise legal out of fear what will happen from legal conduct. Courts are skeptical of these types of injunctions.

Answer 57

An employee may be enjoined from working for a competitor even if the employee signed an NDA if the court believes there is inevitable disclosure, where the employee cannot help but to use the information in his new role (Pepsi)

Answer 58

If a plaintiff can prove that the compensatory damages and the injunction go to two separate harms, a P can receive damages plus an injunction. a. Damages: Address past harms b. Injunction: Prevent future harms c. On exam, do not assume that you cannot get both.

Answer 59

The length of an injunction enjoining the use of a trade secret is limited to the period of time it would take for a legitimate competitor to develop the technology on its own. Rationale: At this point, the trade secret is no longer a secret/it's public. NOTE: NO compensatory damages if the competitor has not sold any products yet because there is nothing to disgorge.

Answer 60

Once equity power is triggered, the court has broad discretion to do what it needs to do to protect those being harmed. b. Example: Trust insolvent/fraud. SEC appoints receiver who fixes trust so D argues injunction to liquidate trust is no longer need. The fraud triggered opening of equitable door triggered equitable muscles. Here, court liquidates trust beyond rightful position.

Answer 61

A structural injunction is a bundle of smaller, permanent injunctions courts use to try to restructure entire institutions when those institutions systematically are violating the law, or when those institutions very structure is somehow unlawful.

Answer 62

(1) Who has been harmed? (2) What is the scope/nature of the harm? (Example: is injury to all black students in one district or across county?) NOTE: On exam, a structural injunction is just an injunction so do the same five high level factor test. a. Ripe/imminent harm b. Irreparable injury c. Undue burden on the D d. Burden on the court NOTE Example: a. Brown was put into effect by a series of structural injunctions. b. Example: In Swan, where school district desegrated, SC approves of district court remedy and says we can use our power of equity to “achieve the greatest possible degree of actual desegregation. ” Thus, Swan SC adopts the Bailey roaming equitable discretion theme. Bailey—court does whatever it wants (whereas other approach is not to pass the rightful position). Focus was not on ‘what position would students be in if not for unlawful conduct’ b/c drawing neutral lines would have fixed that. Here, Court said let’s build new schools, pair up schools, bus between schools to achieve greatest possible degree of actual desegregation. In Milligan, SC in desegregation took opposite approach and said only return Ps to rightful position. No basis to do bussing and other programs across metro area. Just focus on one school/area.

Answer 63

(1) Potential to implement sweeping change all at once. (2) Judicial economy (by lumping cases together in what could have been a lot of smaller cases) (3) Ability to rely on courts when legislatures not making needed system changes

Answer 64

(1) Need to find a P to step forward and face negative attention in a high-stakes case (i.e., Little Rock 5, Shannon Faulkner) (2) Using the courts as opposed to legislature to force changes means using a branch of government that is not as representative of the people (3) Might be resistance to decisions from courts as opposed to elected representatives (4) Huge burden on the courts to implement structural injunctions

Answer 65

The remedy directly relates to the gap between what would have existed but for the segregation and what actually results from the segregation. i. NOTE: This is the Winston rightful position rule and is the current state of the law and the norm the courts look to. But courts can still apply Bailey roaming rule with broad equitable discretion. These are different philosophies the courts subscribe too i. NOTE: Only if there has been a system wide impact can there be a system wide remedy. ii. NOTE: Also the rightful position rule. NOTE: In Women’s Cadet Program case (U.S. v. Virginia), Ginsburg said remedy of all male school allegation must be tailored to the violation (rightful position rule). Allowed women in (gender discrim case). Court struck down long-standing male-only admissions policy.

Answer 66

A preliminary injunction enjoins the defendant's behavior before trial. A preliminary injunction lasts until the trial begins. At the end of the trial, the P can be permanently enjoined.

Answer 67

- P cannot wait years for a trial in case of a potential trade secret (Coca Cola) - Court signals who may win at trial OR court may get decision wrong and enjoin an innocent partner

Answer 68

Preliminary injunctions Temporary restraining orders

Answer 69

A TRO is an order granting preliminary injunctive relief just until the P's request for a preliminary injunction can be heard. A TRO is in place between now and a hearing for a preliminary injunction (approx. 14 days later).

Answer 70

(1) Live, imminent harm In TRO, must be just for the 14 day period leading up to prelim hearing. In prelim injunction, runs up to time at trial. (2) Likelihood of success at trial on merits (3) Likelihood of irreparable injury if denied In TRO, likelihood injury cannot be compensated with damages before court even gets to prelim hearing. Discuss harms that can occur in 14 day period and whether those can be compensated with money damages. For prelim injunction, assess time between request for prelim injunction and trial; something may occur that money cannot fix (4) Balancing hardships (if erroneously granted or erroneously denied) Balance potential harm to P and potential harm to D (5) Public interest

Answer 71

Courts often use this factor as a sort of "catch-all" to inject their own views about the merits of temporary injunctive relief under these circumstances. For TRO, describe the types of public interest/public policy concerns that might be relevant in the 14 day period.

Answer 72

The court may issue a preliminary injunction or TRO only if the movant gives security in an amount that the court considers proper (called an injunction bond).

Answer 73

An injunction bond is an amount put down by a plaintiff (a party seeking a preliminary injunction or TRO) as a security against the D's potential damages and costs if it turns out the D is wrongfully enjoined. NOTE Only one bond is posted between the TRO and the prelim injunction, meaning the bond is continued through the prelim injunction hearing.

Answer 74

D has profited D failed to mitigate P insolvent, indigent, no funds, etc. (where P does not have funds to pay the bond) ii. NOTE: There is NO need for the D to show that the P had a bad faith request for the prelim inj./TRO

Answer 75

Damages for an erroneously granted preliminary injunction or TRO are limited to the amount of the bond so long as the plaintiff acted in good faith. Rationale: D could have immediately appealed (interlocutory appeal) to challenge amount of bond when it was issued.

Answer 76

A court must not grant a preliminary injunction or TRO without first providing the D notice and an opportunity to respond.

Answer 77

For an ex-parte TRO (granted without notice), P must show: (1) Urgent, imminent harm; AND (2) Attorney must certify to the court the efforts made to give notice or why notice should be excused.

Answer 78

It is extremely unlikely a court will grant ana ex-parte TRO to shut down speech Example: Court will not stop public demonstration.

Answer 79

A TRO will expire after the preliminary injunction hearing or within 14 days, whichever happens first. Rule: If an order lasts longer than 14 days, do not call it a TRO, call it a prelim injunction.

Answer 80

Preliminary injunctions are appealable. TROs are not appealable because by the time the case was up for review, the TRO would expire.

Answer 81

Under the 11th Amendment, private citizens of a state cannot sue the state in federal court unless they seek an injunction against an officer acting in their official capacity or unless the government expressly waives its immunity (constructive consent is not sufficient). Exception: Though you cannot collect pre-judgement non- compliance expenses, D must pay post-injunction compliance expenses (cost of implementing injunction) NOTE: You are not naming the state as a party, you are just naming the individual officer.

Answer 82

Declaratory preventative remedies prevent harm by resolving uncertainty. NOTE: Prevent the harm without the coercion - key difference. b. Common Form: Asking the court to resolve a property dispute in advance of the neighbor starting to build. i. Compare to injunction where court will tell you to move pool off property.

Answer 83

Before the court will issue a declaratory remedy, a threshold question for the court to resolve is whether there is a sufficient case/controversy for purposes of Article III. This is important for judicial economy so that the court system is not needlessly filled with cases that are not ripe. The two factors to determine whether a case or controversy exists for Article III purposes: (1). Actual dispute between adverse parties (2). Where a decision by the court will resolve the dispute. NOTE: A court that previously issued a declaratory judgment in favor of a plaintiff may later grant an injunction against the defendant, assuming that the plaintiff has met the requirements for an injunction.

Answer 84

The practical concern with a declaratory remedy is that the declaratory remedy only provides limited relief (e.g., P is not ordered to do anything and they will not be held in contempt for violations). The declaration would simply clarify to the parties the status.

Answer 85

An injunctive order requires irreparable injury while DR does not Violating an injunction could land a D in jail for contempt while ignoring a declaration will not. A P must satisfy more requirements to establish the need for an injunction including the burden on both parties and on the court while the court does not analyze these areas in assessing whether to grant DR. An injunction tells parties to do something while a DR does not. An injunction can occur before or after trial but a DR occurs at the end of trial.

Answer 86

Whether the other side is infringing the patent.

Answer 87

A patent troll is an entity that takes out a patent without any intention of using the patent but rather makes business by suing anyone who gets close. 1. Takeaway—Parties can use declaratory judgments in a very strategic way 2. Example: Tool used to harm other side; small start-up with no resources to litigate

Answer 88

A court can issue a bill to quiet title for both personal and real property. ii. Example: Ask court to quiet title by declaring who owns the title to the stock to stop opposing party from making threats (quiet the threats). iii. NOTE: Bill to Quiet Title and declaratory judgements can be used interchangeably and BOTH happen at the end of the trial on the merits.

Answer 89

Reformation where contract rewritten Rescission where contract is thrown away and completely unwound

Answer 90

Reformation is a declaratory remedy in which the court rewrites the contract to ensure both parties' true intentions are reflected. Reformation promotes equity by ensuring the contract reflects the parties agreed to. 3. Example: Court would likely reform the agreement so that it would clear what the real number should be/was intended to be.

Answer 91

(1) A mutual mistake that does NOT go to the underlying nature of the argument (e.g., a clerical typing error); OR (2) A unilateral mistake where the P shows by clear or convincing evidence that the mistake was induced by fraud. a. Example: Lawyer who manipulated termination agreement to have employer sign different copy and court Reapplied reformation (Hand) 4. NOTE: You cannot claim ignorance of the contents of an agreement as a defense to being bound to agreement unless failure to understand was due to fraud by other party

Answer 92

If the court cannot determine what the agreement was supposed to say, reformation will not work. Thus, you usually need a written (not oral) agreement to make reformation applicable. Example: Meeting of minds on timeshare but misunderstanding on location of time share. Time share was supposed to be near ocean. a. Here, the court cannot rewrite the agreement to correct the mutual mistake b/c cannot determine what you or your roommate would have negotiated for a landlocked timeshare. Here, the court will rescind the agreement. The underlying premise of the deal cannot be determined.

Answer 93

Rescission is an equitable remedy which allows a party to cancel the contract. Rescission completely unwinds the contract making it as if it had never been made. When a court rescinds an agreement, the court gives each side back everything it contributed as part of the agreement. Example: P makes unilateral mistake because of D’s material misrepresentation. P asks court for rescission. If P had already contributed, D must pay that portion.

Answer 94

(1) Mutual mistake about an essential part of the contract (where there was never a true meeting of the minds); OR (2) Unilateral mistake where enforcement would be unconscionable or the other party had reason to know of the mistake or caused the mistake. Example 1. In reformation, Hand keeps severance money (as if he had signed original terms of contract). 2. In rescission, Hand can now sue because as if he never signed contract. 3. Thus, employer would want to seek reformation.

Answer 95

Rescission is at its most powerful when it helps a P get out of an already losing contract. Example: P contracted to make dress for $5K yet had already spent $8K after completing half the work. If material misrepresentation by other side, P can get the $8K back and get out of the contract. Also, P would not have to worry about confidentiality agreement because would be like contract was never formed.

Answer 96

Restitutionary remedies give the plaintiff what the defendant has wrongfully gained. Restitutionary remedies do not focus on what the plaintiff lost.

Answer 97

Quasi contract Accounting for profits Constructive trust Equitable lien Rescission

Answer 98

A person who pays another by mistake is entitled to restitution even if the mistake is due to the payor's lack of care.

Answer 99

Mistaken improvers must prove: (1) They made a reasonable mistake; (2) They erected the building in good faith; AND (3) They had a reasonable belief they owned the land upon which they were improving. On exam - argue both sides. iv. Context on Mistaken Improvers 1. P mistakenly builds on another’s land. 2. P goes to court seeking equitable relief in form of restitution. 3. In restitution, D should not be unjustly enriched with the value of the building.

Answer 100

P can recover: (1) Value of the improvements P made to the other person's property; OR (2) P is entitled to purchase the land upon which P made the improvement based on the market value of the land.

Answer 101

A quasi contract is a fictional contract the court imposes between two parties to prevent unjust enrichment where there was no actual contract between the parties. The aggrieved party in a quasi-contract is entitled to recover the amount of enrichment that would be unjust for the other party to retain. Performance is valued as services rendered, regardless of whether service actually enhanced the value of the property. Used where P performs work for D and is not justly compensated but there is no written contract/meeting of the minds so there can be no damages claim. 1. Example (Anderson): Car repair man fixes car. No written agreement with car owner. Car owner believes only $6K of work to be done. Car repair guy does $9K of work. Since no written agreement, car repair guy sues to recover unjust enrichment to car owner.

Answer 102

Under a quasi contract with an unintentional wrongdoer, P recovers the reasonable market value of services provided (or the amount of damage caused) whereas under a quasi contract with an intentional wrongdoer, P recovers all of D's consequential gains (e.g., D's profits or cost savings resulting in using P's property). Important: a. Inadvertent just loses the 10 bucks a week b. Conscious gives up the 10 bucks a week plus profits made from using the machine i. Conscious wrongdoer: Do all consequential gains, any gains flowing from D’s conduct. Disgorge all of their consequential gains. D intentionally uses P’s egg washing machine without P’s permission when P had stored his machines away 1. D used P’s machine for 3 years and saved $10/week doing so 2. Only wear and tear on machine, so if sue for compensatory damages, will be $0. 3. Instead, go for restitution. 4. Amount Disgorged to P: $10/week for 3 years

Answer 103

Disgorgement of the D's profits.

Answer 104

In the majority Jx, the parties must be in direct competition to assume D's gains are the actual loss to the P (P gets D's profits plus any damages plus costs). In the minority Jx, the parties do not have to be in direct competition to assume D's gains are the actual loss to the P. A D wrongfully gains by infringing on a P’s trademark even if the parties are NOT in direct competition.

Answer 105

Accounting for profits is the restitutionary remedy for disgorging the D’s wrongfully gained profits.

Answer 106

When applying this remedy, the court will apportion the total profits to determine those profits stemming from the infringement versus those emerging from the company’s own skill and effort.

Answer 107

1. P must establish evidence of D’s gross revenues. P seeks this information through discovery and forensic accounting.

Answer 108

Burden then shifts to D to prove what is deductible. There is a two step process. Step One: D identifies categories of overhead expenses that have some relation to the infringing product i. Example: Rent, personnel, marketing campaign, utility ii. NOTE: D will try and argue as much as possible to deduct from amount given to P. iii. NOTE: Defendant cannot argue his reputation contributed to the profit. iv. NOTE: If D never advertised the movie, cannot deduct ad costs Step Two: D determines an acceptable way to allocate the overhead to the profits. Example: D could try to show that 30% of the purchasers bought the brand because of advertising that did not contain P's quote. NOTE: Look at how many products overall

Answer 109

Rule: Where willful infringement, court will apply extra scrutiny to the D’s assertions.

Answer 110

Give P all the profits D made on his sale to the other person. 1. Context: During closing, seller sells part of land to another person. Buyer sues. 2. How much to return to P from original contract price? 3. Focus on unjust enrichment Instead of giving compensatory damages (value reduction in land), give P all the profits the D made on his sale to the other person

Answer 111

Compensatory damages Restitution through rescission ii. Example: Life insurance company finds out now dead customer materially lied on application. Though losing contract since died early, P life insurance company can unwind entire contract (and not just pay out difference between honest and dishonest application, which would be the damages calculation) 1. This is when rescission is at its most powerful (when P had losing deal and can unwind entire contract) iii. Example: Buyer discovers termites post signing; seller materially misrepresented; rescission; unwind entire contract 1. NOTE: Both sides get any money back they put in. So buyers get back paint for new home; buyers living in home a few weeks so have to make rent payment to sellers. a. Rule: No such thing as a partial rescission.

Answer 112

Courts have adopted two different views regarding how to value partial performance when a court rescinds an agreement. 1. The majority of courts use the contract price as a measurement of the plaintiff’s contribution, except in situations where the defendant’s own misconduct caused the plaintiff’s expenditures to exceed the contract price. Example: Court value’s P’s contributions as 50% of the contract price (e.g., $2500 for half of contract price) 2. The minority of courts (including in Boomer) use the value of the plaintiff’s actual efforts to value the plaintiff’s contribution (e.g., $8K with cost overruns) On Exam: If D’s wrongful conduct caused issue, then argue for minority rule (of value of P’s work)

Answer 113

A misrepresentation is material if had the party known about the misrepresentation, the party would not have entered into the contract. v. Benefits of Rescission 1. Do not want to be in business with liars 2. Eliminates risk in measuring damages 3. Can use money to buy something else with less risk

Answer 114

Under the majority, return the contract price to the P. Under the minority rule, return the total value of services to P (as in Boomer case). i. Context: P builder walks away from project after he built most of it with cost overruns because the D breached his side of contract ii. If damages: None because cost overrun

Answer 115

Constructive trust is a trust that is imposed by the court on equitable grounds against one who has obtained property by wrongdoing in order to prevent the wrongdoer from being unjustly enriched.

Answer 116

Constructive trusts can deter similar misconduct by others by making such thefts and similar misconduct unprofitable.

Answer 117

Constructive trusts help maximize a plaintiff's recovery where a D is insolvent because the plaintiff obtains priority with respect to the asset (since the defendant never owned the asset in the first place).

Answer 118

(1) Specifically identifiable asset; AND (2) Obtained through fraud or similar misconduct. On exam argue both sides of whether fraud. 3. Example: In Ruffin, ex-spouse has no interest in lottery winnings her ex won because she can’t trace his lack of payments to her to the dollars used to buy the lotto ticket. Also, she has no evidence of fraud. Context: Allow P to try and trace their assets into the property D has in his possession (for instance, when D steals P’s brooch and sells it for $500 and puts the $500 into his bank account with his own personal funds. Accordingly, to sort out the value of the constructive trust to which P might be entitled, the court would use tracing presumptions to follow the proceeds from the sale of the brooch. a. The $500 from the proceeds of the sale of the brooch can be attributed to Nelly (under the presumption of rightful withdrawal or to the P (under the investment presumption). b. Define each presumption c. Statement: Note that P has a choice regarding which presumption to argue and she could make this choice with the benefit of hindsight to see how the stock ultimately performed. d. Can P get brooch back? i. Sammy could likely recover monetary relief from D using a constructive trust. Whether P could get the brooch itself back depends on whether the third party who bought is a bona fide purchaser.

Answer 119

Someone who has their property wrongfully taken from them and transferred to a third party can get a constructive trust over that property unless the purchaser is a bona fide purchaser. A bona fide purchaser is a (1) good faith purchaser; (2) purchased for value; and (3) without notice.

Answer 120

Did the buyer subjectively believe the D had the right to sell the item?

Answer 121

How much did the buyer pay and was this the fair market value?

Answer 122

What did the buyer know about the origin of the item?

Answer 123

Rightful withdrawal presumption and investment presumption

Answer 124

If D takes P's money and commingles it with D's money, the presumption is that the money withdrawn from the account is the D's money first. P's money is still in the account.

Answer 125

If D wrongfully takes P's money and commingles it with D's money, and then withdraws the money to invest that money particularly in a profitable way, the presumption is that the D is investing the P's money. NOTE: i. If you saw D made a good investment, argue for the investment presumption, not the rightful withdrawal presumption.

Answer 126

i. Context: You cannot point to specific property so you force sale of it through up front lien and later get part of proceeds in case of default. Also, person broke, so you don’t sue for damages. Cannot get constructive trust because cannot point to the whole house as the property that was theirs. Note - you don't own the larger property. NOTE: Doesn’t matter if property is decreasing or increasing value because the P will always get the same amount of money.

Answer 127

A court imposes an equitable lien to secure a P's right to a judgment when the judgment relates to a specific piece of property.  P gets lien on house to say “there’s some part of my money in this property so I want my money from it” 1. Courts will NOT impose a constructive trust or equitable lien on if: a. (1) Third party is a bonafide purchaser that purchased the item in good faith; b. (2) Paid real value for the item; AND i. NOTE: Gratuitous recipients (donees) are not BFPs and thus a court will impose a constructive trust or equitable lien. c. (3) Without notice that the item was wrongfully acquired. Important Note: Equitable liens only can attach to property with respect to which a P has some rights. a. Example: Get the money judgement from an equitable lien under the sale of the kitchen equipment backed by the hotel as opposed to the kitchen equipment itself under constructive trust.

Answer 128

Constructive right gives you the right to the property itself but equitable lien gives you security interest

Answer 129

Ancillary remedies are remedies that work in aid of another remedy to help that remedy work better.

Answer 130

A money judgment on its own is just a piece of paper; a judgment is better enforced through an ancillary remedy.

Answer 131

Contempt Writ of Execution Writ of Garnishment Attorney's Fees

Answer 132

Contempt is a court sanction used to make previous court orders more powerful in the criminal or civil context.

Answer 133

The contempt power is both broad and limited. Broad in that the judge has broad discretion to decide if there is a violation and what to impose while limited in that in coercive civil contempt it is difficult to persuade defendants to take an affirmative act when they do not want to budge.

Answer 134

1. The court had jurisdiction to issue the injunction. 2. The individual violated the injunction.

Answer 135

Civil coercive contempt Criminal contempt NOTE: Both types of contempt can lead to jail time.

Answer 136

Civil coercive contempt is when the court imposes a conditional penalty on the contemnor to persuade or coerce the contemnor to go along with the court order.

Answer 137

Examples include monetary fines for each day the contemnor does not follow court orders and jail time until the contemnor is willing to follow the court's orders. The contemnor has the key to the jailhouse. In the case of fines, the fines should be per diem fines (a fine for each day of not following orders) or contain a purge clause (where the court imposes a fine but if contemnor obeys court, the court will purge the fine). Purge clause: We will impose this fine but if you do what we said, we will purge the fine/give it back to you. Note farce between criminal monetary contempt (you pay $10 a day for every day of not stopping bad conduct) and coercive civil per diem (you pay $10 a day for every day of not stopping bad conduct) Only thing that can make these different is purge clause but that is not always applicable

Answer 138

Criminal contempt sanctions are punishment for failing to abide by a court's order.

Answer 139

The contemnor is imprisoned as a penalty, looking backward at the conduct. Nothing the contemnor does can reduce the time in prison. Also, the contemnor can be subject to fines that cannot be purged.

Answer 140

- Coercive civil contempt hearings do not take place in front of a jury. In criminal contempt, a jury trial is required. More protection is given to criminal contempt given the taking of liberty is not removed once it is imposed. - Coercive civil contempt the contemnor has the keys to the jailhouse and can take an affirmative act to get out of prison whereas in criminal contempt nothing the contemnor does can remove or reduce the penalty.

Answer 141

Whether the wrongful conduct took place in front of the judge (weighs toward civil contempt) versus whether the wrongful conduct took place outside of court room (weighs toward criminal contempt and jury likely needed to weigh in on facts judge was not present to witness)

Answer 142

Abuse of discretion by judge Same judge deciding whether there is a violation and what type of contempt to impose Problematic if judge not fair or rationale

Answer 143

If it is not about the money but the principal If the sanction is fines and the defendant is judgment proof

Answer 144

Whether there is a substantial likelihood continued incarceration will lead to compliance Concern with standard - too much speculation

Answer 145

Regardless of their constitutionality, court orders including injunctions must be obeyed. “No man can be a judge in their own case.”

Answer 146

1. Transparently invalid injunction 2. D tried to challenge the injunction but is met with 'delay and frustration' of their constitutional claims. Concerns What is transparently invalid? How much delay and frustration does one need?

Answer 147

File a motion with the trial judge to vacate or modify the TRO.

Answer 148

Writ of execution Writ of garnishment

Answer 149

A court order aimed at enforcing a judgment that directs the sheriff or another officer to seize or levy on property of the defendant so the property can be sold to garner proceeds.

Answer 150

Typically multiple creditors in line and a question arises as to who has priority over the proceeds of the asset?

Answer 151

A lien on personal property is acquired at the time the sheriff seizes property in execution. In the majority of jurisdictions, manual interference of the property IS acquired to validly execute on a lien. In the minority of jurisdictions (including Nebraska), manual interference with the property is NOT required to validly execute on a lien. Execution is a very state specific remedy.

Answer 152

1. Sheriffs have higher priorities than executing liens (e.g., handling crimes) 2. Multiple creditors in line 3. Various states have generous standards as to exemptions from those assets that can be executed on

Answer 153

a. Benefit i. People do not go destitute or made unable to drive to work b. Disadvantage i. People manipulate system (e.g., OJ Simpson multimillion dollar property and other assets found outside the scope of valid items to levy on)

Answer 154

Execution on property can be a powerful remedy to help collect on a money judgment but it has a host of issues associated with it.

Answer 155

served on a third party to intercept any debts that the third party owes the D. 1. Plaintiff is creditor / collector and garnishor 2. Bank is third party and garnishee 3. Defendant is debtor

Answer 156

In Florida, once a writ is served, the garnishee is liable for all debts owed to the debtor and must hold onto any funds deposited after the answer. 1. NOTE: If mistake, does not matter.

Answer 157

1. Creates workplace morale issues when employees think they might have forced deductions from their paycheck 2. Creates payroll complications for employers 3. Can be held liable for accounting mistakes

Answer 158

1. D might not have enough property to satisfy judgment while salary or bank gives creditor a more likely path to finding money 2. Eliminate the potential for complexity due to D’s involvement by cutting D out of the equation and going directly to bank or employer for funds 3. Leverage fact that an employee will likely be embarrassed for employer to know employee owes money

Answer 159

Each side is responsible to pay their attorney fees. a. Exception: Where statute (such as Section 1983 constitutional violations) provides differently i. If you are a prevailing plaintiff in a civil rights case, you can collect an award of your reasonable attorney fees

Answer 160

Though the purpose of compensatory damages is the rightful position, in which the P is put in the position he would have been in but for the defendant’s wrongful conduct, even if the P wins the case, she might be out of pocket for attorney fees in a way that puts her below her point of being ‘whole.’

Answer 161

a. Discourages attorneys intentionally delaying case given the other side will not pay for fees b. Encourages settlement as plaintiffs more likely to settle if attorney fees growing and plaintiffs know they have to pay c. Discourages frivolous litigation as you know other side will not pay for your attorney fees. Supports judicial economy.

Answer 162

1. Civil rights plaintiffs seek to vindicate important civil and constitutional rights that cannot be valued in monetary terms and may greatly benefit humanity 2. Doing otherwise would deter lawyers from taking civil rights cases (e.g., if they only recovered contingency in a case where the amount of damages might be small because a constitutional violation)

Answer 163

They must be reasonable. Under the lodestar approach, reasonable fees represent reasonable hours expended (actual hours) times reasonable hourly fee. Hourly fee can be calculated using firm's hourly fee or comparable figures in the market (similar work and level of experience). Attorney in their fee submission can provide affidavits and declarations.

Answer 164

Whether counsel secured a complete or partial victory i. Courts weary of employing this approach 1. Will deter claims that have merit 2. Cannot effectively separate work into what produced positive result versus not (e.g., deposition)

Answer 165

1. Statutory fee-shifting is one-way fee shifting a. Only prevailing Ps can collect their attorney’s fees. Prevailing Ds do NOT collect their attorney fees.

Answer 166

i. Don’t want to discourage Ps from filing meritorious claims ii. However, if bad faith litigation, P might be responsible iii. Ds have deeper pockets.

Answer 167

1. Employment: shift fees to defendant 2. Bad Faith litigation: shift fees to person exercising bad faith 3. Holding someone in contempt: shift fees to contemnor 4. Divorce or family law cases: shift fees to person who can afford it 5. Contract cases for breach of settlement: shift fees to person who breaches settlement agreement

Answer 168

The losing party has to pay the other side's costs (e.g., costs of taking depositions, making copies, witnesses, etc.)

Answer 169

Remedial defenses are defenses to damages (not to liabilities). An equitable remedial defense will bar equitable remedies and a legal remedial defense will bar legal remedies.

Answer 170

Laches Unclean hands Unconscionability (procedural or substantive)

Answer 171

Laches is an equitable remedial defense barring equitable remedies in the case of undue delay.

Answer 172

To establish laches, P must show: 1. (1) Unreasonable delay on the part of the P; AND 2. (2) Material prejudice that results from the delay. a. Example: Evidence lost due to delay, D incurs additional cost because did not realize there was an issue

Answer 173

Found only if P waited to sue after (a) actual notice of claim or (b) constructive notice of the claim (i.e., reasonably should have had notice).

Answer 174

Difference with SoL: SoL is defense to liability; SoL black and white, no weighing as in above.

Answer 175

Unclean hands is an equitable remedial defense the defendant establishes by showing: 1. (1) Plaintiff came into litigation having engaged in wrongdoing; AND 2. (2) Wrongdoing relates to basis of the plaintiff’s suit. a. Example: Employer sues employee but employer knew of employee’s wrongful conduct and did nothing about it; employer has unclean hands.

Answer 176

Unconscionability is a remedial defense where courts do not want to enforce agreements that violate basic ideas of morality and fairness. Procedural and substantive v. NOTE: Straddles both legal and equitable remedial defenses.

Answer 177

iii. Procedural unconscionability relates to the way in which the agreement came into being such as unequal bargaining power, or circumstances such as distress or other unfair circumstances

Answer 178

iv. Substantive unconscionability relates to the substance of what the contract contains such as the benefits all going to one side, unfair terms (e.g., waiving right to sue), or unconscionable limitation of remedies clause.