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Flashcards in K remedies Deck (37):
1

3 contract remedies

1) Specific Performance
2) Rescission
3) Reformation

2

specific performance memorize

(old- Joe Bidden) Vice President Is From Delaware
1) V: Validity
2) P: P's performance
3) I: Inadequacy
4) F: Feasibility
5) D: Defenses

3

general specific performance and whose burden on parts

SP requires the D to perform the terms of the K.
5 part test. First 4 burden on P then last 1 on D

4

first rule for specific performance

VALIDITY
- P must be able to show the K is valid
- court more likely to require the terms of the K are clear and that the consideration is fair.

5

second rule for specific performance

P's Performance
- P must able able to show that they ALREADY PERFORMED or is READY TO PERFORM

6

second rule of specific performance (time of essence clause)

If the P does not comply with this clause, SP will be unavailable UNLESS
1) P's tardiness diminenous (not big deal)
2) P would suffer undue hardship
3) D's loss due to tardiness is slight
4) condition has been waived

7

second rule of specific performance (P's already performed- marketable title to land)

In a land sale, S must be able to convey marketable title. If the P cannot satisfy this condition, the court will not award SP UNLESS

1) Defiance is minor
2) condition has been waived

-if court does award SP, it will also order a REASONABLE REDUCTION in price to account for deficiency

8

in a SP action for marketable title of land and there is a deficiency but court allows SP what will the court do

it will also order a REASONABLE REDUCTION in price to account for deficiency

9

step 3 for SP

INADEQUACY
- P must be able to show there is no viable remedy alternative. Usually money not good enough

10

common rules for inadequacy

1) damages too speculative
2) D is insolvent
3) breach is continuing/ ongoing
4) subject of K is UNIQUE

11

inadequacy of assessing uniqueness (real property)

Real Property: IS ALWAYS UNIQUE.
- does not matter if the facts say it is the same as others
- Even if B breaches, S can get SP

12

inadequacy of assessing uniqueness (personal property)

Gr: personal property is NOT unique (and damages are adequate)

x/c
1) items is RARE (hard to get on market)
2) item has SPECIAL VALUE TO BUYER
3) item is unique due to MARKET CONDITIONS

13

x/c for uniqueness of GR that personal property is not unique

1) items is RARE (hard to get on market)
2) item has SPECIAL VALUE TO BUYER
3) item is unique due to MARKET CONDITIONS
-ex: oil prices go crazy due to war
- uniqueness is tested at time of litigation

14

step 4 of specific performance

Feasibility
- P must be able to show that is feasible to enforce the K

1) PERSONAL SERVICE K: GR: not available
x/c courts will enforce a covenant not to compete if
(a) services at issue are UNIQUE and
(b) terms of the covenant are reasonable with respect to (1) GEOGRAPHY and (2) DURATION

15

step 4 of specific performance (feasibility of Personal service K)

Gr: SP is NOT AVAILABLE

16

what will courts grant if certain criteria are met for covenants not to compete and what is the steps to consider to grant it or not

1) enforcement for a covenant no to compete is injunction

courts will enforce a covenant not to compete if
(a) services at issue are UNIQUE and
(b) terms of the covenant are reasonable with respect to (1) GEOGRAPHY and (2) DURATION

17

step 4 of specific performance (feasibility of land sale K)

Feasability depends on location of the parties and land
No issue if
1) both parties and land are located w/i forum
2) both parties are located in forum and land outside
3) buyer and the land are w/i the forum but seller is outside

problem if
1) S and the L are w/i the forum but B is outside
- cannot reach the B unless specific jurisdiction

18

step 5 for specific performance

DEFENSES
Equitable defenses
1) unclean hands
2) laches

K defenses
1) mistake
2) misrepresentation
3) SOF

19

once again Specific Performance memorizer

Vice President Is From Delaware
1) V: validity
2) P: P's performance
3) I: Inadequacy
4) F: Feasibility
5) D: Defenses

20

generally what is rescission

when the original K is VOIDABLE and is rescinded. Any previously rendered performance will be unwound through RESTITUTION

21

what always comes with rescission

restitution

22

steps for rescission

1) Grounds: never deal to begin with
- P must show that there was a defect relating to the FORMATION of the K

2) DEFENSES: normal equitable remedies
- but P's negligence is NOT a valid defense to rescission

23

examples of grounds for rescission during K formation

1) mistake
2) misrepresentation
3) coercion
4) undue influence
5) lack of capacity
6) failure of consideration
7) illegality

24

grounds for rescission (mutual mistake)

GR: is mutual mistake is available if it relates to a MATERIAL FACT
-material: willingness to buy and purchase price

- GR: rescission is NOT available if the mutual mistake is COLLATERAL

25

grounds for rescission (unilateral mistake)

GR: rescission based on unilateral mistake is NOT AVAILABLE

26

X/C for when grounds for rescission (unilateral mistake) is allowed

1) when the non-mistaken party
a) KNEW or
b) SHOULD HAVE KNOWN of the mistake

2) if the mistaken party would suffer UNDUE HARDSHIP

27

grounds for rescission (misrepresentation)

GR: rescission based on a misrepresentation will be granted if the misrepresentation was
1) material and
2) P relied upon it

28

reformation

court changes the written agreement to the original understanding of the parties

29

reformation steps

1) VALIDITY: P must demonstrate the existence of a valid K

2) GROUNDS:
(a) mutual mistake: if the defect in writing is result of mutual mistake reformation will be granted

(b) unilateral mistake: reformation will be DENIED
x./c if non-mistaken party KNEW of the mistake, reformation will be granted)
- NOT SHOULD HAVE KNOWN

(b) misrepresentation: if the defect in written agreement is result of misrepresentation, reformation will be GRANTED.
- Regardless if was intentional or innocent

30

reformation mutual mistake

if the defect in writing is result of mutual mistake reformation will be granted

31

reformation unilateral mistake GR

reformation will be DENIED

32

reformation unilateral mistake x/c

if non-mistaken party KNEW of the mistake, reformation will be granted)
- NOT SHOULD HAVE KNOWN

33

reformation misrepresentation

if the defect in written agreement is result of misrepresentation, reformation will be GRANTED.
- Regardless if was intentional or innocent

34

reformation defenses

normal equitable defenses
- unclean hands, laches,`etc.

In addition court will NOT reform K if doing so would adversely affect the rights of a BFP

35

what does IL look for specific performance of a noncompetion clause

IL will grant Specific Performance of a noncompetition clause if the clause
1) serves a legitimate interest of the employer
2) does not impose undue hardship on the employee and
3) not injurious to the public.

36

how does IL courts look for TOC to see if noncompetion clause services a legitimate business interest

1) w/e the employer is seeking to protect long-term relations with customers,
2) w/e the employee has received confidential information through employment
3) the geographic scope of the covenant and
4) its duration

37

in IL what amount of consideration is needed for covenant not to compete

need consideration: continued employment for SUBSTANTIAL PERIOD OF TIME
- at least 2 years. So even if employee quits w/i 2 years it will not be enforceable because did not work for at least 2 years