REMEDIES Flashcards
Split Discussion by Cause of Action, Then Remedy
Cause of action:
- contract
- tort
- property
- quasi-contract/unjust enrichment/restitution
Legal remedy:
- legal
- equitable
Contract Legal Remedies: Damages
Types of compensatory damages:
- benefit of the bargain (expectancy)
- consequential damages
- reliance damages
- incidental damages
- liquidated damages
Benefit of the Bargain (expectancy) Damages
Seek to put the parties in the position they would have been in had the contract been performed
Focus on the economic deal itself - the costs to produce or sell, the profit, and the purchase or sales price
Market price less contract price
Under UCC, “cover” - the cost of replacing the goods
Lost Volume Seller Damages
Lost volume seller - someone who can sell as many of an item as they can find buyers
If buyer repudiates purchase, damage is the lost profit on the item - even if that particular item is resold to another buyer
Fourt-Part analysis for Damages
Contracts damages must be:
- causal (damages would not occur “but for” the breach)
- foreseeable at time of contract
- certain
- unavoidable *duty to mitigate)
Not necessary to do four-part analysis on expectancy (benefit of the bargain) damages
Consequential Damages
Logically flow from a breach of the contract other than the cost of sale, profit and purchase price
Four-part analysis regarding damages must be undertaken
If damage is lost future profits beyond profit from immediate transaction, even though benefit of the bargain, use 4 part analysis if profit is based on projections
Reliance Damages
Seek to put the party in the position they would have been in had the contract not been formed in the first place
Usually out of pocket costs incurred by a party before the contract is actually performed
Only available if the benefit of the bargain - expectancy - damages are too speculative. Otherwise, such damages are possible expectancy damages
Incidental Damages
Expenses reasonably incurred in shipping, care and custody of the goods and, for the seller, in re-selling the goods after a breach
Liquidated Damages
Parties stipulated - to amount
Upheld if damages will be extremely difficult to ascertain and the stipulated amount is a reasonable forecast of the damages
Look at the proportionality of the stipulated amount to the possible level of damages
- re purchase contracts - no more than 6-10%
- service contracts - approximation of lost profit
Otherwise, void as a penalty
Contract Damages - Strategies
If damages are benefit of the bargain, just calculate difference between contract price and market price or cover
If damages are lost future profits, consequential damages, or reliance damages, apply four factor analysis
If contract was never performed or expectancy damages are too speculative, discuss reliance damages
Liquidated damages - extremely difficult to ascertain/ reasonable forecast / proportional
Contract - Equitable Remedies
Specific performance - enforcement of the contract after a breach (elements applicable to enforcement of both common law and UCC contracts)
- there is a valid and enforceable contract, with definite and certain terms
- the party has met all the conditions required or performance of the conditions is excused
- the legal remedy is inadequate, and
- the remedy is feasible (for court to supervise)
Contract - Provisional Remedies (TRO and PI)
Solely in Aid of specific performance or replevin
To preserve subject of contract from imminent sale or transfer
Subject of contract must be unique
TRO
- elements for preliminary injunction plus immediacy of harm
Preliminary Injunction
- irreparable injury
- likelihood of success
- balance of hardships favors the injunction
ER - Rescission - Undoing of Contract
Mistake - must be as to material fact (basis of bargain)
- mutual
- unilateral
- majority: non-mistaken party knows of mistake
- modern - balance harms to each party
Misrepresentation
- False representation / omission of material fact
- D knew (intentional); should have known (negligent) was false OR innocently made (innocent misrepresentation)
- P reasonablly relied to detriment
ER - Reformation
Requires a valid prior agreement Grounds 1. mutual mistake (scrivener's error) 2. unilateral mistake, and 3. fraud
ER - Declaratory Relief
Rights and obligations of parties to a contract
Torts - Damages
Include:
- general damages foreseeable from the injury (pain and suffering)
- special damages that could not have been foreseen from the mere occurrence of the wrong (medical expenses; lost wages)
- punitive damages
Tort damages must be:
- causal (“but for”), foreseeable (as of the time of breach of duty - proximate cause concept, but relaxed for intentional torts), certain, and unavoidable
Torts - Punitive Damages
Awarded for willful and wanton conduct amounting to fraud, oppression, or malice
Subject to due process issues
- the reprehensibility of the defendant’s conduct
- the disparity between the actual or potential harm suffered and the punitive award; and
- the difference between the punitive award and the criminal or civil penalties authorized for comparable misconduct
Torts - ER - TRO/PI
Provisional Remedies - TRO/PI
- Irreparable harm (uniqueness/threat of permanent loss)
- reasonable likelihood of success on the merits - fulfills elements of underlying cause of action
- balance of the hardships favor injunction (no balancing if intentional act)
- Plus for TRO: irreparable harm is imminent
Torts - ER - Permanent Injunction
Legal remedy is inadequate
- irreparable harm (uniqueness of good/object of contract/threat of permanent loss)
- money damages inadequate
- speculative damages
- multiplicity of suits
Feasibility of enforcement - ease of court enforcement ( negative v. mandatory injunction )
Balance of the hardships favors injunction - only if encroachment / nuisance case; no balancing if conduct is intentional
Property Remedies
Injunction for Trespass/Nuisance
Waste:
Voluntary waste: remedies - injunction; damages for diminution in value / cost of repair ; treble damages
Permissive waste: remedies - damages for diminution in value / cost of repair
Ameliorative waste: remedies - if anything, cost of restoration
Unjust Enrichment / Quasi - Contract
Legal theory to support restitution in cases of wrongful retention of benefits and property due to:
illegal or unenforceable contract; OR
wrongful retention or obtaining of property (conversion/fraud)
Unjust Enrichment - Legal Remedies
Replevin
Ejectment
Unjust Enrichment - Legal Remedies: Replevin
Common law replevin - Property wrongfully taken or detained
- recover prejudgment possession through claim and delivery ; based on immediate right to possession/title
UCC Replevin:
- type 1 (useful with anticipatory repudiation)
- goods specifically identified in contract
- plaintiff unable to cover (obtain equivalent goods)
- replevin granted conditioned on payment for goods - Type 2
- buyer made payment, and
- seller failed to deliver, and
- seller insolvent within 10 days OR
- goods for personal, family, or household purpose
Unjust Enrichment - Legal Remedies: Ejectment
Remedy to restore possession of real property
Basis for unlawful detainer (eviction of tenant wrongfully holding over)
If not brought within limitations period, gives rise to adverse possession
