Remedies Flashcards
Available Remedies - Contracts
The following remedies are available for K breaches:
Damages (legal), Restitution (legal), Reformation (equitable), Rescission (equitable), and Specific Performance (equitable).
Expectation, Reliance, Restitution, or Specific Performance + Consequential, and Incidental
Contracts - Legal Remedies
Expectation Damages
- The default K remedy is Expectation Damages.
- Expectation damages are the value of the benefit the P expected to receive from performance of the K.
- To recover, the damages must be:
1. caused by the D (actual cause),
2. foreseeable (proximate cause),
3. certain (damages cannot be too speculative) , and
4. unavoidable (the P must take reasonable steps to mitigate his losses).
Contracts - Legal Remedies
Reliance Damages
- Reliance Damages are whatever a party paid in reasonable reliance of a K; including the money that was paid and pain and suffering, if relevant.
- If Expectation Damages are too speculative, the court may award Reliance Damages instead.
Contracts - Legal Remedies
Restitution Damages
- Restitution is awarded to prevent unjust enrichment.
- It is available when one party confers a benefit onto another party (even if there is no enforceable K).
- It is measured by the benefit received by the D.
- A party cannot recover both Expectation Damages and Restitution Damages.
Contracts - Legal Remedies
Incidental Damages
Incidental Damages are the reasonable costs incurred as a result of a breach of K (i.e. costs of storing non-conforming goods, renegotiating other deals).
Contracts - Legal Remedies
Consequential Damages
- Consequential Damages arise indirectly from the breach, and are awarded because of the injured party’s special circumstances known to the D (e.g. lost profits).
- To recover, the damages must be:
1. reasonably foreseeable at the time of K formation, and
2. reasonably certain.
Contracts - Legal Remedies
UCC Buyer’s Damages
- Under the UCC, a buyer who
(a) never received the goods, or
(b) rejected non-conforming goods may:
1. cancel the K;
2. recover any amount paid (a refund);
3. recover either:
(a) cover damages (the price of substitute goods - the K price), or
(b) market damages (the market price - the K price); and
4. recover Incidental and Consequential Damages. - If the buyer keeps the non-conforming goods, then the buyer is entitled to the difference between the value as promised and the value of the non-conforming goods.
Contracts - Legal Remedies
UCC Seller’s Damages
Under the UCC, when a buyer breaches a K, the seller is entitled to the following damages:
* If the seller resold the goods, the difference between the resale price and the K price.
* If the seller did not resell the goods, the difference between the market price and the K price.
* A lost volume seller (one who has a virtually unlimited supply of goods to sell) may recover lost profits.
* A seller is also entitled to recover Incidental Damages.
Contracts - Legal Remedies
Damages in Contracts for the Sale of Land
- For a breach of K concerning the sale of land, the buyer may recover:
1. any amount paid,
2. the difference between the FMV of the land at the time of the breach and the K price,
3. expenses, and
4. possible Consequential Damages. - The seller normally recovers the “earnest money” deposit as liquidated damages.
Contracts - Legal Remedies
Quasi-Contract
- A quasi-contract is a K implied by law, which acts as a remedy for a dispute between two parties that don’t have a K.
- It is used to prevent the unjust enrichment of the D.
- Under a quasi-contract, the remedy is typically Restitution.
Contracts - Equitable Remedies
Specific Performance
- Specific performance is a court order to make the D perform his duties under the K.
- It is available when:
1. a valid K exists,
2. the P has performed or can perform under the K,
3. legal remedies are inadequate (i.e. rare/unique item, Ks involving the sale of land),
4. enforcement is feasible for the court*, and
5. no valid defenses for the D exist.
It is not feasible to enforce personal service Ks or where land/person is outside the court’s jurisdiction.
Contracts - Equitable Remedies
Reformation
- Reformaton allows a K to be changed to conform to the parties’ original intent.
- It is available if a valid K exists, but there was a misrepresentation or mutual mistake.
Contracts - Equitable Remedies
Rescission
- Rescission allows a party to undo a bargain.
- It is available if there was a problem with the formation of the K (i.e. duress, fraud, misrepresentaion).
Available Remedies - Torts
The following remedies are available in tort actions: Damages (legal), Restitution (legal or equitable), and Injunction (equitable).
Torts - Legal Remedies
Compensatory Damages
- Compensatory damages are awarded to compensate the P for injury or loss. They are measured by the monetary value of the P’s harm.
- To recover, the damages must be (i) caused by the D (actual cause), (ii) foreseeable (proximate cause), (iii) certain (damages cannot be too speculative, and (iv) unavoidable (the P must take reasonable steps to mitigate his losses).
- A P can recover for anticipated future losses.
Torts - Legal Remedies
Nominal Damages
Nominal damages are available when the P has not suffered an actual injury, but still wants to establish his rights.
Torts - Legal Remedies
Punitive Damages
Punitive damages are awarded to punish the D. They are available if (i) the P was awarded actual damages (compensatory or nominal), and (ii) the D’s conduct was willful, malicious or egregious (must be more than just negligence).
Torts - Legal Remedies
Restitution Damages
Restitution is awarded to prevent unjust enrichment. It is available when one party confers a benefit onto another party. It is measured by the benefit received by the D.
Torts - Legal Remedies
Damages for Fraud
Damages for fraud or deceit are either: (a) the difference in value between what the P gave and what he received, or (b) the difference in value between what the P actually received and what he was fraudulently led to believe he would receive.
Torts - Legal Remedies
Damages for Conversion of Property
Damages for conversion of property are the full market value of the property at the time of conversion.
Torts - Legal Remedies
Damages for Trespass to Chattels
Damages for trespass to chattels are the actual damages suffered, which may include the cost of repairs.
Equitable Remedies
Temporary Restraining Orders (TRO)
- A TRO is an emergency remedy used to maintain the status quo pending a PI hearing.
- The party moving for a TRO must show:
1. an irreparable harm to the movant;
2. a likelihood of success on the merits;
3. legal remedies are inadequate; and
4. balancing of the hardships favors the moving party.
Irish Lads Inhale Beer
Equitable Remedies
Preliminary Injunction (PI)
- A PI maintains the status quo pending a full trial on the merits.
- A court may issue a PI only upon notice to the adverse party.
- The party moving for a PI must show the same factors as a TRO.
Equitable Remedies
Permanent Injunction
- A permanent injuction is issued after a full trial on the merits.
- A party seeking a permanent injunction must demonstrate that:
1. it has suffered an irreparable injury;
2. legal remedies are inadequate; and
3. balancing of the hardships to both parties.
Irish Inhale Beer
Equitable Restitution
Constructive Trust
- A constructive trust is available if a D:
1. wrongfully acquired title to property; and
2. would be unjustly enriched if allowed to keep the property. - The court will require the D to hold the property as a trustee, and then return it to the P.
- A P may trace his property to other forms, and is entitled to any increase in value of the property.
Equitable Restitution
Equitable Lien
- An equitable lien is available if a D:
1. wrongfully acquired title to property; and
2. would be unjustly enriched if allowed to keep the property. - The court will force the sale of the property, and the P will receive the proceeds.
- A P may trace his property to other forms, but he is not entitled to any increase in value of the property.
- Unlike a constructive trust, the P is entitled to a deficiency judgment for any shortfall.
Equitable Remedies
Ejectment
Ejectment allows the recovery of specific real property, if:
1. the D is wrongfully withholding the property; and
2. the P has a right to possess the property.
Defenses
Laches
Laches bars a P’s recovery when:
1. there is an unreasonable delay between when the P learned of the injury/breach and when the action was brought; and
2. the D is prejudiced by the delay.
Defenses
Unclean Hands
The doctrine of unclean hands bars a P’s recovery when a P has conducted herself unfairly in the transaction in dispute.
Defenses
Mitigation of Damages
- A party must take reasonable steps to mitigate his losses.
- A P cannot recover damages as a result of a breach that could have been avoided.
Defenses
Intentional & Negligent Misrepresentation
- To state a prima facie case for Intentional Misrepresentation, a P must show that:
1. the D knowingly and recklessly misrepresented a material fact with the intent to induce the P; and
2. the P justifiably relied on the misrepresentation and suffered financial loss. - To state a prima facie case for Negligent Misrepresentation, a P must show:
1. a misrepresentation by the D in a business transaction;
2. the D was negligent in obtaining or communicating the false information;
3. intent of the D to induce the P;
4. actual and reasonable reliance by the P; and
5. damages.
