Specific performance Flashcards
Specific performance requirements
A court of equity will only grant SP of Ks where the goods are unique or money damages are inadequate (no adequate remedy at law).
Land is assumed to be unique. Intellectual property is also considered unique. However, rare doesn’t equal unique. Must be VERY rare.
Courts will consider the following factors in determining the adequacy of damages:
1) difficulty in determining damages with a reasonable certainty;
2) difficulty in obtaining alternate substitute performance with money awarded as damages; and
3) likelihood that the damage award could not be collected.
not usually granted for chattels, but may be granted if output K or the like because indeterminate amount of chattels.
Specific performance in the UCC
Specific performance may be used when goods are unique or other circumstances (like output K – goods not calculable and K involving peculiar source or materials). Plaintiff must try to cover, but may have right of replevin if cannot cover with comparable substitute.
Meaning of unique for specific performance
No so much the rarity of an item but the difficulty in valuing the item. Unique means valuation is uncertain.
SP and leases
They are not going to be automatically unique like land. However, if a condition of the leased property is not met by the lessor, then SP may be appropriate (the lessee cannot just start construction on land without consent of lessor).
Equitable conversion
Legal fiction that, at the time a K for land is signed, the equitable title of the land goes to purchaser, heirs, and assigns; and the equitable title to the money goes to seller, heirs, and assigns. Its a way to work out SP for land sales when someone dies after making a deal.
Ne exeat
Filing of a bond to get a bill that prevents a person from leaving jurisdiction.
SP and Ks for personal service
Don’t like to force people to work against their will, but may enjoin them from performing elsewhere if K was exclusive.
Also could get a performance bond – forfeit a sum of money if fail to perform.
Covenants not to compete
May be enforced in some situations like: trade secrets, sale of business because you are buying goodwill of business, and where employer/employee services are special, unique, or extraordinary.
Factors to determine reasonableness:
1) duration and geography; (shouldn’t be more than a year)
2) whether the employee represents the sole contact with the customer;
3) confidential information and trade secrets;
4) Whether the covenant seeks to eliminate competition
5) Whether the benefit to the employee is disproportionate to the detriment to the employer;
6) Whether the employer seeks to stifle inherent skill and experience of the employee;
7) Whether covenant would cut of employee’s sole mean of support (livelihood)
8) whether the talent of the employee that the employer seeks to suppress was actually developed during the period of employment
9) Whether the forbidden employment is merely incidental to the main employment.
Also: is restriction greater than required for protection of legitimate business interest, does it impose undue hardship on employee, and does it harm the public?
Liquidated damages
A liquidated damages provision will be allowed if:
1) damages from the breach are difficult to ascertain;
2) fixed damages in advance, as long as the amount is reasonable in light of the anticipated probable harm;
3 ) If you can quantify the potential damage, then a LD provision will not be enforced;
4) LD provision cannot be a penalty.
