Remedies

Question 1

Requirement for SP?

Answer 1

Must show:(1) money damages inadequate * (2) feasible to enforce decree.

Question 2

Likilihood of SP damages for land, sale of goods, and personal services.

Answer 2

All land is unique and special (special performance is available).

Sale of Goods (no general specific performance) will have to go get other goods. UCC 2 only allows SP if (1) goods are unique or (2) buyer unable to cover (Buyer cannot = cannot go get a substitute, think art, antiques, special goods = might).

No specific performance for personal services contract (can’t force someone to do a job). Can enjoin employees from joining competitiors (think negative SP).

Question 3

2 types of nonmonetary damages?

Answer 3

Specific Performance

Reclamation

Question 4

Requirements for unpaid seller’s right to reclaim goods

Answer 4

eller can get reclamation if: (1) buyer insolvent when received rules AND (2) Seller demands reclamation w/10 days of receipt of good and (3) Buyer still has possession of goods.

Exception: Reclaim goods after 10 days if: (1) buyer misrepresents solvency, (2) in writing, (3) w/in 3 months before delivery.

Rare under UCC 2. Always start w/ credit. If cash, then no reclamation.

Question 5

Main types of monetary damages in K.

Answer 5

Expectation

Reliance

Restitution

Incidential

Consequential

LD

Question 6

Expectation Damages

Answer 6

default monetary remedy. Take him forward. (hairy hand - difference between promise, perfect hand, and original. not original , scarred, to hairy).

Question 7

Reliance

Answer 7

Expectation damages are uncertain. (as if contract had never been made… take him back).

Question 8

Restition

Answer 8

Measured by value of benefit conferred. (What is reasonable value I conferred on other party).

Question 9

Incidental:

Answer 9

Costs incident to breach (after, take care of goods, storage, return bad goods, etc.)

Incidental damages + foreseeable is wrong answer b/c incidental always recoverable.

Question 10

Consequential

Answer 10

recoverable if foreseeable at time of formation. (indirect result of breach) - loss profits she would have made). (Chatty Hadley = have to tell the other party up front so it is foreseeable at time of formation). Lost profits must be foreseeable at time of formation.

Question 11

Liquidate damages

Answer 11

IF: difficult to estimate at contract formation + reasonable forecast of damages (if not reasonable, then construed as penalty).

Lump sum LD that doesn’t vary with proportionate harm is no good.

If LD struck down, then give expectation, reliance, restitution.

Question 12

Buyer damages if seller breaches - three options:

Answer 12

(1) Cover damage: Cover price - original contract price (if covered in good faith) get difference between 2.

Cover - go out in the market place for replacement. Doesn’t matter if cover price more than FMV if in good faith.

(2) Market damages: market price - original contract (not covered or don’t cover in good faith).

(3) Loss in value: Value as promised - value as delivered. (buyer keeps nonconforming).

Consequential damages not available for sale of goods.

Question 13

Seller Damages under UCC 2:

Answer 13

(1) resale damages: contract price - resale price (resold in good faith).

(2) Market price: Contract price - market price (didn’t resale at all or in good faith).

(3) Contract price available if seller CANNOT resell goods. (custom made goods).

(4) Lost volume seller: The other damages are never adequate if they are a lost volume seller = have unlimited supply. Lost profits measure of damages.

Question 14

Duty to mitigate scope:

Answer 14

limited to similar/comparable subject matter.

Question 15

Define “sale to bona fide purchaser.”

Answer 15

The right to specific performance in a land sale contract is cut off if the subject matter of the contract has already been sold to another who purchased for value and in good faith.

Question 16

Equitable Defenses Available

Answer 16

Laches—a claim that the plaintiff has delayed bringing the
action and that the delay has prejudiced the defendant;

Unclean hands—a claim that the party seeking specific
performance is guilty of wrongdoing in the transaction
being sued upon; and

Sale to a bona fide purchaser—a claim that the subject
matter has been sold to a person who purchased for
value and in good faith.

Question 17

When will a court order SP for a “Covenant Not to Compete?” (I.e., negative SP?

Answer 17

if: (1) the services to be performed are
unique (thus rendering money damages inadequate); and (2) the
covenant is reasonable.

To be reasonable:

1. The covenant must be reasonably necessary to protect
   a legitimate interest of the person benefited by the
   covenant (that is, an employer or the purchaser of the
   covenantor’s business);
2. The covenant must be reasonable as to its geographic
   scope and duration (meaning, it cannot be broader than
   the benefited person’s customer base and typically cannot
   be longer than one or two years); and
3. The covenant must not harm the public.

Question 18

Buyer’s nonmonetary remedies under UCC 2:

Answer 18

Cancellation (rightful rejection and cancel)

Replevy Identified Goods: If a buyer has made at least part payment of the purchase price of goods that have been identified under a contract and the seller has not delivered the goods, the buyer may replevy the goods from the seller in two circumstances:

(i) The seller becomes insolvent within 10 days after receiving
the buyer’s first payment; or

(ii) The goods were purchased for personal, family, or household purposes.

In either case, the buyer must tender any unpaid portion of the purchase price to the seller.

Question 19

Rescission

Answer 19

Rescission is a remedy whereby the original contract is considered
voidable and rescinded. The parties are left as though a contract had
never been made. The grounds for rescission must have occurred
either before or at the time the contract was formed. The grounds
are:
(i) Mutual mistake of a material fact
(ii) Unilateral mistake if the other party knew or should have
known of the mistake
(iii) Unilateral mistake if hardship by the mistaken party is so
extreme it outweighs the other party’s expectations under the
contract
(iv) Misrepresentation of fact or law by either party as to a material
factor in the negotiations that was relied upon, and
(v) Other grounds, such as duress, undue influence, illegality, lack
of capacity, and failure of consideration

Generally all equitable defenses (including laches and unclean
hands) are available in a rescission action. Note that the plaintiff’s
negligence isn’t a defense.

Question 20

Reformation

Answer 20

Reformation is the remedy whereby the writing setting forth the
agreement between the parties is changed so that it conforms to the
original intent of the parties.

a. Mistake
To reform a contract because of mistake, there must be: (1) an agreement
between the parties, (2) an agreement to put the agreement in
writing, and (3) a variance between the original agreement and the
writing.
b. Misrepresentation
If a writing is inaccurate because of a misrepresentation, the plaintiff
can choose between reformation and avoidance. To qualify for
reformation, the misrepresentation must relate to the content or the
legal effect of the record. Misrepresentations as to the subject matter
of the agreement aren’t grounds for reformation; rescission and
damages are the proper remedy for that.