Remedies Flashcards
K Legal Remedies–Expectation / Consequential / Punitive Damages–EMPHASIZE
Expectation damages–put the plaintiff in the place she would have been in had the breach not occurred. In a land sales contract, when the seller breaches, the buyer receives the difference between the contract price and the market value as of the date of the breach.
Consequential damages–reasonably foreseeable losses to a non-breaching party that go beyond expectation damages, such as loss of profits. Consequential damages arise out of special circumstances unique to the parties to the contract, rather than from the transaction itself. Consequential damages are appropriate only if:
1–the breaching party knew about the non-breaching party’s special circumstances; or
2–could have reasonably foreseen the harm, in light of the non-breaching party’s special circumstances, that would result from a breach.
Punitive–rare in K but available due to D’s fraudulent conduct in connection w/ K.
K Equitable Remedies–Recission
In lieu of expectation damages may pursue recission as equitable remedy.
Recission—an order that cancels the K; P seeking recission wants it to be as though K never existed; perhaps b/c they were fraudulently induced to enter into the agreement, or b/c both Ps to the transaction were mistaken about what the K reqs—i.e. defeats “meeting of the minds” b/c something corrupted it, thus does not reflect vol agreement.
Elements:
–Consent/grounds (e.g. mistake/fraud);
–Prompt notice of intent to rescind; and
–Offer to restore/ability to restore Ps back to status quo
K Equitable Remedies–Restitution/UE–EMPHASIZE
P may seek recovery of the benefit obtained by D in the form of:
– a money judgment;
– a constructive trust–i.e. compels D to transfer ownership of asset to P; or
–an equitable lien–i.e gives P right to foreclose
*E.g. since D purchased stock with those proceeds, P could also request the court to impose either a constructive trust or an equitable lien on that stock. Since the equitable lien would only give her the right to foreclose on her lien and recover the $250,000 from the proceeds of the sale of the stock, while a constructive trust would give her the right to compel Mark to transfer ownership of the stock to her, the latter would be far more favorable, provided the court found that this result is equitable in light of Mark’s wrongful conduct.
NOT the same as damages–i.e. damages comp for P’s loss, whereas rest prevents D from unjustly benefitting.
Elements:
–P conferred benefit upon D
–D knows or appreciates the benefit
–D’s acceptance or retention of the benefit under the circumstances is such that it would be inequitable to allow D to retain benefit w/o the paying of value in return.
–May be an issue with identification if D commingled proceeds w/ funds from other sources.
K Equitable Remedies–Reformation
Reformation is an equitable remedy that courts provide when a party has shown the elements of unilateral mistake. When a party successfully seeks reformation, the court will re-write a contract in order to conform to the parties’ intent without the mistake.
K Equitable Remedies–Specific Performance
For the ct to grant the equitable remedy of SP–there must be:
1) Inadequate Legal Remedy–i.e. when the subj matter is rare or unique; e.g “one-of-a-kind artistic design.”
2) Definite and certain terms–i.e. K must be valid and the terms must be suff certain (not ambiguous) for the ct to award SP.
3) Feasibility–enforcement of K must be feasible; may not be feasible if reqs too much supervision.
*Typically NOT feasible in a service K b/c of difficulty in supervision and b/c cts feel it is tantamount to invol servitude in violation of 13A.
4) Mutuality–reqs that the P seeking SP has already fully perf or can show that he is ready, willing, and able to perf.
5) No Defenses/Fairness:
*Unclean Hands–a defense to equitable remedy when the P who seeks equitable relief himself engages in serious misconduct–i.e. misconduct must be unethical or immoral–in close relation to the claim.
Tort Remedies–Compensatory Damages / Punitive Damages
In most jurisdictions–the measure of recovery for fraud is the “benefit of the bargain”–i.e., the difference between the actual value received and the value that would have been received if the misrepresentation were true.
*E.g. P can recover the value of the house w/o the bat infestation and the value of the house w/ the infestation.
Alternatively–the buyer may base her recovery on an amount equal to the cost of conforming the property to what she was promised; i.e. the cost of repair
*E.g. the cost of eliminating the bat infestation.
Punitive Damages–available in tort due to fraudulent conduct.
Equitable Remedy–TRO
A TRO is a short-term injunction that is typically sought at the first stage of the plaintiff’s request for injunctive relief. Its purpose is to maintain the status quo pending a hearing for a preliminary injunction, and it may be issued ex parte upon a sufficient showing of urgency. In California, a TRO issued without notice to the defendant generally may not last longer than 15 days.
P must establish:
1) P will suffer irreparable harm if TRO not issued–i.e. inadequate remedy at law;
2) P’s hardships if TRO not issued will be signif greater than hardships on D/3Ps if issued–i.e. balancing of equities favors P; and
3) Likelihood that P will succeed on merits of claim–e.g. breach of K claim.
*Defenses gen NOT considered at TRO stage b/c the opposing P does not have an opp to present an arg against the TRO–defenses reserved for Preliminary Injunction stage.
Equitable Remedy–Preliminary Injunction
Like a TRO, a preliminary injunction is a provisional remedy designed to maintain the status quo pending a trial. It is issued after notice is given to the defendant and after the defendant is given an opportunity to be heard. The standard is the same as the standard for a TRO, but instead of expiring after 15 days, a preliminary injunction will preserve the status quo until trial.
Reqs:
1) Irreparable Injury–apply TRO analysis;
2) Likelihood of Success–apply D’s defenses–e.g. unilateral mistake; fraud/intentional misrep in Breach of K claim
3) Balancing of Hardships
Permanent Injunction
The difference between the requirements for a preliminary injunction and a permanent injunction is that the plaintiff must actually succeed on the merits.
Laches–D Defense Against Equitable Remedy
The defense of laches applies when a plaintiff who seeks relief in equity has delayed bringing her cause of action in such a substantial fashion that it causes prejudice to the defendant.
