Remedies

Question 1

Torts: Compensatory Damages [goal + elements]

Answer 1

Put π in the position she would have been in had the injury not occurred. Damages must be (1) causal; (2) foreseeable; (3) certain; and (4) unavoidable.

Question 2

Torts: Compensatory Damages – Future Damages

Answer 2

π must show that they are more likely to happen than not

Question 3

Torts: Compensatory Damages – Unavoidability

Answer 3

π must take reasonable steps to mitigate damages.

Question 4

Torts: Do certainty rules apply to general damages?

Answer 4

No. Jury can award any amount it wishes for pain and suffering and permanent disfigurement, subject to proper instructions

Question 5

Torts: Can the jury award installment payments?

Answer 5

No. Must be a lump sum discounted to present value without taking inflation into account (except under the modern rule).

Question 6

Torts: Nominal Damages

Answer 6

Awarded to π who suffers no actual injury.

Question 7

Torts: Punitive Damages

Answer 7

Awarded to punish ∆. π first must have been awarded compensatory or nominal damages. The ∆’s fault must be greater than negligence. The amount must be relatively proportionate to actual damages (no more than 9x).

Question 8

Torts: Restitutionary Remedies [Goal]

Answer 8

Awarded to avoid unjust enrichment.

Question 9

Torts: Legal Restitutionary Remedies

Answer 9

Amount is based on the value of the benefit to the ∆ (in contrast with compensatory damages, which focuses on injury to π). The two legal restitutionary remedies are replevin and ejectment.

Question 10

Can both compensatory and restitutionary damages be awarded to π?

Answer 10

No. But need to write about both on the exam. Has π been injured (compensatory damages)? Has ∆ benefitted (restitutionary damages)?

Question 11

Replevin

Answer 11

Legal restitutionary remedy. π recovers possession of specific PERSONAL property. π must show (1) she has a RIGHT to possession and (2) there has been a wrongful WITHHOLDING by ∆. π can recover possession of the personal property BEFORE trial.

π will have to post a bond. ∆ can defeat immediate recovery by posting a re-delivery bond.

Question 12

Ejectment

Answer 12

Legal restitutionary remedy. π recovers possession of specific REAL property. π must show (1) she has a RIGHT to possession and (2) there has been a wrongful WITHHOLDING by ∆. Ejectment is only available against a ∆ who has POSSESSION of the property.

Question 13

Torts: Equitable restitutionary remedies

Answer 13

The two types are constructive trusts and equitable liens

Question 14

Constructive Trust

Answer 14

Imposed on improperly acquired property to which ∆ has TITLE. ∆ acts as a trustee and must return the property to π.

Requires: (1) ∆ has title to property which (2) can be traced to property that ∆ wrongfully acquired from π.

Use when property value increases

Question 15

Equitable Lien

Answer 15

Imposed on improperly acquired property to which ∆ has TITLE. Property is subject to an immediate court-directed sale, the proceeds of which go to π. If the proceeds are less than the FMV of the property when taken, a deficiency judgment will result.

Requires: (1) ∆ has title to property which (2) can be traced to property that ∆ wrongfully acquired from π.

Use when ∆ wrongfully appropriates money from π, which he then uses to improve other property (e.g., building an addition on ∆’s home with embezzled money from π)

Question 16

When are the equitable restitutionary remedies of constructive trusts and equitable liens used?

Answer 16

(1) There must be an inadequate LEGAL remedy alternative
––is ∆ insolvent? is the property unique?

(2) Tracing is allowed
(3) BFPs prevail over π
(4) π will prevail over unsecured creditors

Question 17

How to decide b/n constructive trust and equitable lien

Answer 17

If property value goes UP after taking –> constructive trust

If property value goes DOWN after taking –> equitable lien

If ∆’s property cannot be traced solely to π’s property, only an equitable lien is available
––i.e., if ∆ did not use π’s property to obtain title to ∆’s property, then a constructive trust remedy does not work
––example: ∆ misappropriates money and uses it to remodel his house –> since title to ∆’s home was not obtained by use of the money, the property remedy is an equitable lien

Question 18

Equitable remedies: distinctions between permanent injunction, preliminary injunction, TRO

Answer 18

Permanent injunction: issued AFTER a full trial on the merits
Preliminary injunction: issued PENDING trial on the merits
TRO: issued PENDING a hearing for a preliminary injunction

Question 19

Elements for temporary injunctive relief (PI or TRO)

Answer 19

π must show…

(1) IRREPARABLE INJURY will occur if π needs to wait for a trial on the merits/PI hearing;
(2) the irreparable injury outweighs any HARDSHIP ∆ will suffer if a temporary injunction is granted;
(3) likelihood of SUCCESS on the merits;
(4) in public interest

Courts typically require that π post a bond, to reimburse ∆ in the event π does not succeed at the hearing or trial.

If TRO: mention ex parte; mention 10-day limit (CA) / 14-day limit (FED)

Question 20

Elements for permanent injunctive relief

Answer 20

(1) There must be an INADEQUATE legal remedy alternative…
––Replevin (inadequate b/c sheriff can’t find property or ∆ could simply file re-delivery bond)
––Ejectment (inadequate b/c sheriff may refuse to act)
––Damages (inadequate b/c (i) too speculative; (ii) ∆ is insolvent; (iii) irreparable injury; (iv) need to avoid a multiplicity of actions

(2) Enforcement of the injunction must be FEASIBLE
––Enforcement can be an issue w/ mandatory injunction where there is difficulty of supervision or a concern with effectively ensuring compliance
––Note: courts will NOT grant a permanent injunction against a non-resident ∆

(3) π’s benefit OUTWEIGHS ∆’s/public’s hardship (gross disparity)

Question 21

Defenses against award of permanent injunctive relief

Answer 21

Unclean Hands

Laches: unreasonable and prejudicial delay in π bringing claim
––Note: clock starts when π learns of her injury

Impossibility: ∆ cannot fulfill

Free speech: for defamation or privacy torts

Question 22

Contracts: Compensatory Damages [goal + requirements + types]

Answer 22

Put π in as good a position as if the breach had not occurred. π must show (1) causation; (2) foreseeability; (3) certainty; and (4) mitigation.

Expectation Damages
––The most common measure of damages is the expectation measure, whereby π is given the benefit of her bargain.

Reliance Damages
––Put the π in as good a position as she would have been in had the K never been performed

Consequential Damages
––Reflect losses over and above expectation damages. They must be foreseeable. Not available to sellers under UCC.

Incidental Damages
––Costs associated with caring for goods after breach or for arranging a substitute transaction. Need not be foreseeable.

Question 23

Contracts: Liquidated Damages

Answer 23

Clause is valid when (1) damages are very difficult to ascertain at time of contracting and (2) the amount is a reasonable forecast of what they would be.

Note: a clause that allows for either actual or liquidated damages is invalid –> give π actual compensatory damages

Question 24

Contracts: trigger for restitutionary remedies

Answer 24

Prevent unjust enrichment. Where a party has performed and then the contract is breached or the contract is unenforceable, look to restitution.

π gets value of the benefit conferred; π can also get the property back if it is unique or ∆ is insolvent

Question 25

Can π, as a breaching party, get restitution

Answer 25

Under the modern view, recovery in restitution is allowed. It cannot be greater than the K rate and will be reduced by and damages suffered by ∆ as a result of the breach.

Question 26

Contracts: Specific Performance

Answer 26

(1) there must be a valid, certain, and definite K
(2) π must have satisfied her K obligations, that she is ready and willing to perform, or that her performance has been excused
(3) inadequate legal remedy alternative
––damages would be speculative; ∆ is insolvent; multiplicity-of-suits problem; unique property (e.g., land; antique; personal significance; circumstances [note: uniqueness is tested @ time of litigation])
(4) enforcement must be feasible
––personal service Ks –> SP is not feasible (involuntary servitude)
––non-compete covenants –> SP is feasible if (1) services are unique and (2) scope (geography + time) is reasonable

Question 27

Contracts: Specific Performance –– Defenses

Answer 27

Unclean Hands

Laches

Unconscionability

Mistake

Misrepresentation

Statute of Frauds
––Note: bar exam tends to test part performance exception to land sale K. Where there is an oral land sale K, that runs afoul of the statute of frauds. However, under the part performance exception, if one has given valuable part performance (2 of 3: payment; possession; valuable improvements) and relied on the K, it will be enforceable and SP can be granted.

Question 28

Contracts: SP –– what happens when seller can’t deliver the agreed upon consideration (e.g., the agreed upon quantity of land)?

Answer 28

First: who is the π?

Seller-π: can seek SP of K if defect is minor, but w/ abatement of purchase price

Buyer-π: can seek SP of K even if defect is major, w/ abatement of purchase price

Question 29

Contracts: SP –– what happens when the buyer does not meet the time-is-of-the-essence clause?

Answer 29

The facts will tee up a situation where the seller wants to keep the land and all performance (payments) made by buyer, and the buyer is suing for SP

EQUITY ABHORS FORFEITURES
––avoid forfeiture if loss to S is small; tardiness is de minimis; S has accepted late payments in the past (Waiver); and/or B would suffer undue hardship

If SP not awarded, give B restitution

Question 30

Contracts: does a liquidated damages clause make money damages inadequate?

Answer 30

No! SP is still available

––Exception: where clause says LD is “only remedy”

Question 31

Contracts: Rescission

Answer 31

Original K is considered voidable and rescinded, restoring status quo.

Need to determine whether there are adequate grounds and whether any defenses apply.

Grounds
––all relate to K formation problem
––(i) mistake; (ii) misrepresentation; (iii) coercion; (iv) undue influence; (v) lack of capacity; (vi) failure of consideration; (vii) illegality

Defense
––Unclean hands
––Laches

Question 32

Contracts: Reformation

Answer 32

Writing is changed to conform to the original intent of the parties. To be entitled to reformation, a π must show: (1) a valid K exists; (2) sufficient grounds.

Grounds: (i) misrepresentation; (ii) mutual mistake; (iii) unilateral mistake (where non-mistaken party ACTUALLY knew of mistake)

Defenses: unclean hands; laches
––Note: the following are NOT defenses: π’s negligence; SoF; Parol Evidence

Question 33

Contracts: Damages for breach of employment K

Answer 33

Employer Breaches: employee is entitled to the remaining K price minus avoidable damages (comparable position)

Employee Breaches: cost of finding replacement, if breach was material

Question 34

Contracts: Damages for breach of construction K

Answer 34

Builder Breaches
––Costs of completion + reasonable compensation for delay - benefit conferred

Owner Breaches
––Before completion: lost profit + costs - avoidable damages
––After completion: full K price + interest

Question 35

Contracts: Replevin (UCC)

Answer 35

Legal restitutionary remedy designed to allow π to recover wrongly taken personal property. π must show (1) she has a RIGHT to possession and (2) there has been a wrongful WITHHOLDING by ∆.

Under UCC, buyer can replevy goods from seller if he has made partial payment and goods were purchased for personal, family, or household purposes.

Buyer can also replevy undelivered, identified goods if after reasonable effort, buyer cannot secure adequate substitute goods. Replevy is not adequate when sheriff cannot find the property.