Remedies

Question 1

Contracts - Available Remedies

Answer 1

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

Question 2

Contracts - Legal Remedies

Expectation Damages

Answer 2

• 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,
  2. foreseeable,
  3. certain (damages cannot be too speculative) , and
  4. unavoidable (the P must take reasonable steps to mitigate his losses).

Question 3

Contracts - Legal Remedies

Reliance Damages

Answer 3

• Reliance Damages are the expenditures made by a party in reasonable reliance of the K and are an attempt to put the non-breaching party in the position it would have been if the K never existed.
• If Expectation Damages are too speculative, the court may award Reliance Damages instead.

Question 4

Contracts - Legal Remedies

Restitution Damages

Answer 4

• 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.

Question 5

Contracts - Legal Remedies

Incidental Damages

Answer 5

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).

Question 6

Contracts - Legal Remedies

Consequential Damages

Answer 6

• 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.

Question 7

Contracts - Legal Remedies

UCC Buyer’s Damages

Answer 7

• Under the UCC, a buyer who
  never received the goods, or
  rejected non-conforming goods may:
  1. recover either
  (a) the difference between the K price and the price of substitute goods (cover damages), or
  (b) the difference between the market price and the K price (market damages); and
  2. 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.

Question 8

Contracts - Legal Remedies

UCC Seller’s Remedies/Damages

Answer 8

Under the UCC, when a buyer breaches a K, a seller is entitled to the following remedies:
1. withhold delivery of the goods,
2. cancel,
3. recover cover damages,
4. recover market damages
5. recover lost profits if the seller is a lost volume seller (one who has a virtually unlimited supply of goods to sell),
6. stop delivery of the goods when he discovers buyer is insolvent,
7. stop delivery of a truckload, OR
8. replevy (repossess) identified goods.

Question 9

Contracts - Legal Remedies

Damages in Contracts for the Sale of Land

Answer 9

• 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,
  4. possible Consequential Damages, and
  5. interest.
• The seller normally recovers the “earnest money” deposit as liquidated damages.

Question 10

Contracts - Legal Remedies

Quasi-Contract

Answer 10

• 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.

Question 11

Contracts - Equitable Remedies

Specific Performance

Answer 11

• 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; real property is always considered unique),
  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.

Question 12

Contracts - Equitable Remedies

Reformation

Answer 12

• 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 of material fact.

Question 13

Contracts - Equitable Remedies

Rescission

Answer 13

• 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).

Question 14

Torts - Available Remedies

Answer 14

The following remedies are available in tort actions: Damages (legal), Restitution (legal or equitable), and Injunction (equitable).

Question 15

Torts - Legal Remedies

Compensatory Damages

Answer 15

• 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, (ii) foreseeable, (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.

Question 16

Torts - Legal Remedies

Nominal Damages

Answer 16

Nominal damages are available when the P has not suffered an actual injury, but still wants to establish his rights.

Question 17

Torts - Legal Remedies

Punitive Damages

Answer 17

Punitive damages are awarded to punish the D, and are available if:
1. the P was awarded actual damages (compensatory or nominal damages), and
2. the D’s conduct was willful, malicious or egregious (more than negligent).

Question 18

Torts - Legal Remedies

Restitution Damages

Answer 18

• 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.

Question 19

Torts - Legal Remedies

Damages for Fraud

Answer 19

Damages for fraud are either:
(a) the difference in what the P gave and received, or
(b) the difference in what the P received and what he was frauduently led to believe he would receive.

Question 20

Torts - Legal Remedies

Damages for Conversion of Property

Answer 20

Damages for conversion of property are either:
(a) possession of the property, or
(b) the FMV of the property at the time of the conversion.

Question 21

Torts - Legal Remedies

Damages for Trespass to Chattels

Answer 21

Damages for trespass to chattels are the actual damages suffered, which may include the cost of repairs.

Question 22

Equitable Remedies

Temporary Restraining Orders (TRO)

Answer 22

• A TRO is an emergency remedy used to maintain the status quo pending the outcome of a hearing or application.
• The party moving for a TRO must show:
  1. a likely threat of irreparable harm,
  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

Question 23

Equitable Remedies

Preliminary Injunction (PI)

Answer 23

• 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:
  1. a likely threat of irreparable harm,
  2. a likelihood of success on the merits,
  3. legal remedies are inadequate, and
  4. balancing of the hardship favors the moving party.
  (The same factors as a TRO).

Question 24

Equitable Remedies

Permanent Injunction

Answer 24

The party seeking a permanent injunction must show:
1. irreparable injury,
2. inadequate legal remedies, and
3. balancing of the hardships to both parties.

Irish Inhale Beer

Question 25

# Equitable Restitution Constructive Trust

Answer 25

* 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.

Question 26

# Equitable Restitution Equitable Lien

Answer 26

* 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.

Question 27

# Equitable Remedies Ejectment

Answer 27

* Ejectment allows the recovery of specific **real property**. * It is available if: 1. the D is wrongfully withholding the property; and 2. the P has a right to possess the property.

Question 28

# Defenses Laches

Answer 28

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.

Question 29

# Defenses Unclean Hands

Answer 29

Unclean hands bars a P's recovery when a P has conducted herself unfairly in the transaction in dispute.

Question 30

# Defenses Mitigation of Damages

Answer 30

* 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.

Question 31

# Defenses Intentional & Negligent Misrepresentation

Answer 31

* The elements for _Intentional Misrepresentation_ are: 1. misrepresentation of a material fact, 2. the D knew the statement was false, 3. intent of the D to induce the P, 4. actual and reasonable reliance by the P, and 5. damages. * The elements for _Negligent Misrepresentation_ are: 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.