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BAR EXAM > South Carolina - Equity > Flashcards

South Carolina - Equity Flashcards

1
Q

Five Basic Principles of Equity

A

(“FRIED”)

Equity is Remedial

Equity is Extraordinary

Equity is Discretionary

Legal Remedy Must Be Inadequate

Equitable Remedy Must Be Feasible

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2
Q

Types of Injunctions

A

Mandatory Injunction: Orders a Defendant to do something

Prohibitive (Negative) Injunction: Orders a Defendant NOT to do something

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3
Q

Elements of a Preliminary Injunction

A

(“bLIpS”)

Irreparable Harm

Likelihood of Success on the Merits

Injunction Bond (mandatory, except in family law cases)

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4
Q

Difference between a Preliminary Injunction and a Temporary Restraining Order

A
  1. Irreparable injury must be likely to occur before preliminary injunction hearing can be scheduled
  2. TRO hearing can be held ex parte (w/ no notice to ∆)
  3. Duration in SC is 10 days (14 days in FRCP)
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5
Q

Elements of a Permanent Injunction

A

(“I Play First Base, Dummy”)

INADEQUACY OF LEGAL REMEDY (π)

PROTECTABLE INTEREST (π)

FEASIBILITY OF ENFORCEMENT (π)

BALANCE OF HARDSHIPS (∆)

DEFENSES (∆)

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6
Q

PERMANENT INJUNCTION: Inadequacy of Legal Remedy

Availability

A

Inadequacy of a legal remedy (usually money damages)

  1. Damages are too Speculative
  2. Insolvency of ∆
  3. Continuing Harm (Multiplicity of Actions)
  4. Irreparable Harm
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7
Q

PERMANENT INJUNCTION: Protectable Interest

A

πmust articulate a valid interest that would be protected by the injunction

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8
Q

PERMANENT INJUNCTION: Feasibility of Enforcement

A
  1. Power Feasibility: must have jurisdiction over the ∆ or the subject of the injunction (i.e., the property)
  2. Administrative Feasibility: must be feasible–compliance with injunction can be monitored by court

Unlikely if series of acts over a period of time; or a complex act involving taste/skill

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9
Q

PERMANENT INJUNCTION: Balance of Hardships

  1. What should court do if balance weighs in favor of defendant
  2. Other factors the court will consider in balance
  3. Exception to balancing hardships
A

Defendant must demonstrate the burden of the hardship SUBSTANTIALLY OUTWEIGHS the benefit to the plaintiff.

  1. Because a harm has still occurred, court should award money damages
  2. A court will occasionally consider the burden to the public (public policy)
  3. The court will not balance hardships if the defendant’s conduct was WILLFUL
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10
Q

PERMANENT INJUNCTION: Defenses

A

Burden on ∆

If any defense is established, Court should award money damages

UNCLEAN HANDS (one who comes to equity must come with clean hands)

πhas engaged in improper conduct RELATED to the lawsuit

LACHES (equity aids the vigilant, not those who slumber on their rights)

From time when π KNOWS of injury, π’sdelay in bringing suit is both UNREASONABLE and PREJUDICIAL. Assumed if SOL has run

FREE SPEECH
If tort is DEFAMATION, TRADE LIBEL, or PRIVACY TORT, injunction should be denied based on constitutional free speech considerations

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11
Q

Anti Suit Injunctions

A

Issued against parties, not courts

AVAILABILITY
Suit in forum state: suit is malicious and unfounded

Suit in foreign state: suit based on wrongfully obtained jurisdiction

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12
Q

Elements of a Constructive Trust or Equitable Lien

A
  • Inadequacy of a legal remedy
    1. Improperly Acquired Property
    2. ∆has title to the property

[[Defendant Improperly Acquired Title to Property]]

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13
Q

What is a constructive trust

A

Defendant is forced to return the property

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14
Q

What is an equitable lien

A

Defendant is forced to sell the property.

Plaintiff receives the proceeds, up to the fair market value of the property AT THE TIME IT WAS TAKEN

If proceeds are less than that value, πcan obtain a deficiency judgment

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15
Q

Constructive Trusts and Equitable Liens: Tracing

Availability

If πdoesn’t have title to the whole of the property traced

A

Availability: Tracing is permitted for both

If πdoesn’t have title to the whole of the property traced: Only an equitable lien is permitted

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16
Q

Constructive Trusts and Equitable Liens: Unavailability

A
  1. Bona Fide Purchasers: good faith (w/o knowledge) and paid value

Money damages are still available to π

  1. Constructive trusts: partially traced property (yada yada)
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17
Q

SPECIFIC PERFORMANCE: Elements

A

“Vice President Is From Delaware”

Validity of Contract (π)

Performance (of Plaintiff) (π)

Inadequacy of Legal Remedy (π)

Feasibility (π)

Defenses (∆)

18
Q

SPECIFIC PERFORMANCE: Validity

A

A court will be more likely to require contract terms are SPECIFIC and CONSIDERATION IS FAIR.

Assessment is at TIME OF CONTRACT FORMATION

19
Q

SPECIFIC PERFORMANCE: Plaintiff’s Performance

A

(“one who seeks equity must do equity”)

πmust show she already performed, or

show she is ready to perform

20
Q

SPECIFIC PERFORMANCE: Plaintiff’s Performance > Time is of the Essence Clause

A

If provision is violated, specific performance is unavailable, unless

  1. π’s tardiness is de minimus
  2. defendant’s loss due to the tardiness is slight
  3. undue hardship suffered by π
  4. waiver by ∆
21
Q

SPECIFIC PERFORMANCE: Plaintiff’s Performance > Marketable Title

A

If plaintiff cannot satisfy conveying marketable title, court will not award specific performance, unless

  1. Deficiency is minor (de minimus)
  2. Waiver by ∆

If court awards specific performance, it will also order a reasonable reduction in price

22
Q

SPECIFIC PERFORMANCE: Inadequacy of Legal Remedy

A

No adequate legal remedy: usually, money damages are insufficient

  1. Damages are too Speculative
  2. Insolvency of ∆
  3. Breach is Ongoing
    * 4. Subject of Contract is Unique
23
Q

SPECIFIC PERFORMANCE: Inadequacy of Legal Remedy > Uniqueness of Property

REAL PROPERTY

PERSONAL PROPERTY

A

REAL PROPERTY: always unique (both buyer and seller can get specific performance–mutuality of remedy doctrine)

PERSONAL PROPERTY: Not Unique. Exceptions:

  1. Rare
  2. Special Value to Buyer
  3. Unique due to market circumstances (at time of litigation [[breach?]])
24
Q

SPECIFIC PERFORMANCE: Feasibility

A
  1. Power Feasibility: must have jurisdiction over the ∆ or the subject of the injunction (i.e., the property)
  2. Administrative Feasibility: must be feasible–compliance with injunction can be monitored by court

Unlikely if series of acts over a period of time; or a complex act involving taste/skill

25
Q

SPECIFIC PERFORMANCE: Feasibility > Personal Service Contracts

General Rule

Covenants Not to Compete

A

GENERAL RULE
Specific Performance NOT available

COVENANTS NOT TO COMPETE: enforceable by injunction, if

  1. Necessary to protect legitimate interests of employer
  2. Terms are reasonable wrt geography and scope/duration
  3. supported by valuable consideration

Court will not Blue Pencil–partially enforce a covenant in the face of an unreasonable term

26
Q

SPECIFIC PERFORMANCE: Feasibility > Land-Sale Contracts

A

Feasibility depends on having jurisdiction over the

  1. The Buyer, AND either
  2. The Seller OR the Land

[[but if buyer is π, just need seller or the land, right?–w/e]]

27
Q

SPECIFIC PERFORMANCE: Defenses

A

Defense to Form of Remedy

  1. Unclean Hands
  2. Laches

Defense to Availability of Remedy

  1. Mistake
  2. Misrepresentation
  3. SOL
28
Q

RESCISSION:

Definition

Elements

A

DEFINITION: original contract is deemed voidable and rescinded through restitution.

ELEMENTS: “Good Dog”

  1. Grounds
  2. Defenses
29
Q

RESCISSION:

Grounds

Examples of some grounds for rescission (don’t memorize)

A
  1. Plaintiff must show a defect relating to formation of the contract.
  2. The defect must be FUNDAMENTAL and DEFEAT THE PURPOSE of the contract
EXAMPLES OF GROUNDS FOR RESCISSION (don't memorize)
Mistake
Misrepresentation
Duress
Fraud
Undue Influence
Lack of Capacity
Failure of Consideration
Illegality
30
Q

RESCISSION: Grounds > Mutual Mistake

A

Rescission available if

  1. Mistake relates to a MATERIAL FACT
  2. Mistake does not relate to a COLLATERAL FACT
31
Q

RESCISSION: Grounds > Unilateral Mistake

General Rule

Exception

A

General Rule: Rescission not available

EXCEPTION
Non-mistaken party KNEW or SHOULD HAVE KNOWN of mistake.

EXCEPTION: Mistaken party would suffer an UNDUE HARDSHIP

32
Q

RESCISSION: Grounds > Misrepresentation

A

Rescission granted on misrepresentation if it was

  1. MATERIAL, and
  2. PLAINTIFF RELIED
33
Q

RESCISSION: Defenses

A

Unclean Hands
Laches

*Plaintiff’s Negligence

34
Q

REFORMATION:

Definition

Elements

A

DEFINITION
Court changes written agreement to conform to the original understanding of the parties

ELEMENTS (“VERY GOOD DOG”)

  1. Validity of Contract
  2. Grounds
  3. Defenses
35
Q

REFORMATION: Grounds > Mutual Mistake

A

If defect in written agreement is result of mutual mistake, reformation granted if mutual mistake is shown by CLEAR AND CONVINCING EVIDENCE

36
Q

REFORMATION: Grounds > Unilateral Mistake

General Rule

Exception

A

If defect in written agreement is result of unilateral mistake, reformation will be denied

Exception: If non-mistaken party ACTUALLY KNEW of plaintiff’s mistake, reformation willb e granted.

37
Q

REFORMATION: Grounds > Misrepresentation

A

If defect in written agreement is result of misrepresentation, reformation will be granted

38
Q

REFORMATION: Defenses

A

Unclean Hands
Laches

Bona Fide Purchaser: Reformation not available if granting it would adversely affect the rights of a BFP

39
Q

REFORMATION: Defenses > Parol Evidence Rule

A

Parol Evidence Rule MAY NOT be invoked as a defense to reformation

40
Q

Equitable Maxims

A

(Equity “IS DREADFUL”)

In Personam: “equity acts in personam, not in rem”
Substance: “regards substance over form”
Do Equity: “One who seeks equity must do equity”
Remedy: “Equity will not suffer a wrong to be without a remedy”
Equality: “Equity is equality”
A: “Equity Aids the Vigilant & Diligent”
Do: “all courts have the inherent power TO DO all things reasonably necessary to ensure that just results are reached to the fullest extent possible”
Forfeitures: “Equity disfavors forfeitures”
Unclean Hands: One who comes into equity must do so with clean hands”
Law: “Equity follows the law”

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