REMEDIES Flashcards
(123 cards)
1
Q
What is the 3 step approach to any remedies question?
A
- Determine what substantive area of law is involved including what specific type of problem is at issue within that area. (could be 2)
- Make sure that plaintiff is going to win the case. (On crossover questions, P will always have a good case).
- Determine what remedies require discussion. Must be done in chronological order as follows:
- legal remedies
- restitutionary remedies
- equitable remedies
2
Q
What are the possible tort remedies?
A
1. legal remedies
• damages
2. Restitutionary remedies
• legal restitutionary
* restitutionary damages
* replevin
* ejectment
• equitable restitutionary remedies
* construtive trusts
* equitable liens
- Equitable remedies
• Injunctive Relief
3
Q
What is the definition of legal damags and hwat are the 3 types?
A
Defendant is ordered to pay money to plaintiff.
- compensatory
- nominal
- punitive
4
Q
What are compensatory damages?
A
These are based on teh damage to the plaintiff. They put the injured party in the position he/she would have been in had the injury not occurred.
5
Q
What are the 4 requirements for compensatory damages?
A
- causation (actual, but for test)
- forseeability (proximate causation–injury must have been foreseeable at the time of the tortious act).
- Certainty (damages can’t be to speculative)
- Unavoidability (P must take reasonable steps to mitigate damages).
6
Q
______ losses have to be established with more certainty than ______ losses.
A
Past; future
7
Q
What is the all or nothing rule in regards to damages awards?
A
For future damages, P must show that they are more likely to happen than not. Greater than 50% chance.
E.g. Injured P is an outstanding undergraduate student who has been accepted to law school. Basisi of future lost income calculation?
• P would argue that more likely than not, they would succeed in law school.
8
Q
The certainty rules for compensatory damages apply to ___________ but not to __________.
A
- economic losses (medical expenses/lost earnings)
2. non-economic losses (pain and suffering, permanent disfigurement.
9
Q
For compensatory damages awards, the award must be a _________ payment. Installment payments are not allowed.
A
single lump sum
10
Q
What are the 2 calculation rules for compensatory damages and what should you write on the bar exam?
A
- The award must be discounted to present value.
- Inflation is not taken into account.
Write: The judgment must be a single lump sum payment discounted to present value without taking inflation into account (except under the modern rule).
11
Q
What are nominal damages? What is their purpose?
A
- Awarded where the P has no actual injury. They serve to establish or to vindicate the plaintiff’s rights.
E.g.: D regularly walks across dirt road on Ps land to get to a bus. P bothered, but no actual injury. But can lead to easement, so P wants to establish rights.
12
Q
What are punitive damages?
A
Awarded to punish the defendant.
13
Q
What are the 3 rules regarding punitive damages in torts?
A
- In order to get punitive damages, P must have first been awarded compensatory or nominal damages. (can also be attached to restitutionary, just can’t be punitive alone).
- In order to get punitive damages, the D’s type fault must be greater than negligence.
- Generally, punitive damages are awarded in an amount relatively proportionate to actual damages. U.S. Supreme Court woudl limit punitive damages to a single digit multiple of actual damages unless conduct facts are extreme. Not more than 9:1 ratio to actual damages.
14
Q
In order to get punitive damages, P must have first been awarded _________ or __________ damages.
A
compensatory; nominal
15
Q
In order to get punitive damages, the D’s type fault must be greater than ____________.
A
negligence
16
Q
Generally, punitive damages are awarded in an amount relatively ________ to actual damages.
A
proportionate
U.S. Supreme Court woudl limit punitive damages to a single digit multiple of actual damages unless conduct facts are extreme. Not more than 9:1 ratio to actual damages.
17
Q
What is the basic concept behind restitutionary damages?
A
Remedies are based on the theory that the defedant should not be unjustly enriched.
18
Q
What are the 3 legal restitutionary remedies?
A
- damages
- replevin
- ejectment
19
Q
What is the basic concept behind legal restitutionary damages?
A
These are based on the benefit to the D and the amount is calculated based on the value of the benefit.
20
Q
Compensatory v. Restitutionary: D destroys plaintiff’s car. Remedy?
A
Only compensatory. D hasn’t benefitted from destroying the car. no restitutionary
21
Q
Compensatory v. Restituionary: P buys land (doesn’t use) with private dirt road through the middle. D manufacturing company drives trucks across road on P’s vacant property to get to railroad reducing trip from ten miles to one-half mile. Remedy?
A
Only restitutionary damages. No injury to P, but benefit to D. Saving gas, labor costs, etc.
**Nominal could also be awarded here.
22
Q
Compensatory v. Restitutionary: D steals your machine to use in its business. Remedy?
A
Both.
Compensatory: P is injured, machine was stole.
Restitutionary: D has benefitted. used the machine in business. Unjust enrichment.
- Coudl be punitive as well.
- Remember, P can’t be awarede both compensatory and restitutionary damages. Write about both and give P the larger sum.
23
Q
What is replevin?
A
a legal restitutionary remedy available in tort where the plaintiff recovers possession of specific personal property (chattel).
24
Q
What is the 2 part test for replevin?
A
Establish that:
- P has a right to possesison
- There is a wrongful withholding by D.
*P can get something back before he/she wins at trial. T
25
What is the timing of replevin?
P can recover the chattel before the trial. If this is in issue, mention in your answer that:
1. P will have to post a bond
2. D can defeat an immediate recovery by posting a re-delivery bond. (D can then keep the chattel until after the trial).
*Sheriff repossesses property for the Plaintiff.
26
Who repossesses property for the plaintiff?
The sheriff.
27
Replevin is almost always coupled with _________ for lost use or benefit to the D during the time of detention.
damages (compensatory or restitutionary).
28
What is ejectment?
A legal restitutionary remedy where the Plaintiff recovers possession of specific real property.
29
What is the 2 part test for ejectment?
1. The P has a right to possession.
| 2. There is a wrongrul withholding by the D.
30
Ejectment is available only against a D who has _________ of property.
possession
E.g.: D crosses P's lawn on the way to the bus everyday. No ejectment because no possession.
31
Ejectment is almost always coupled with _________ for lost use or benefit to D during time of wrongful withholding.
damages (compensatory or restitutionary).
32
What are equitble restitutionary remedies in tort?
1. constructive trusts
| 2. equitable liens
33
What is a constructive trust?
Imposed on improperly acquired property to which D has title. D serves as trustee and must return the property to the P.
34
What is an equitable lien?
Imposed on improperly acquired property to which D has title. Property will be subject to an immediate court-directed sale. The monies received go to the plaintiff. If the proceeds of the sale are less than the fair market value of the property when it was taken, a deficiency judgment will issue for the difference and can be used against D's other assets.
35
Constructive trusts and equitable liens can be used only when D has _________ to the property.
title
36
What are the rules related to constructive trusts and equitable liens?
1. Must first be an inadequate legal remedy. (generally money damages)
• Defendant is insolvent; or
• property is unique (constructive trust)
2. Tracing is allowed
•D sold property for $50,000 and put in a bank. P can trace that money.
3. Bona fide purchasers prevail over plaintiff.
• D sold the property to L a BFP. P wants to have a constructive trust imposed on the property. Can he? No. L was a BFP.
4. Plaintiff will prevail over unsecured creditors.
37
How do decide which remedy, constructive trust or equitable lien?
If the property value subsequent to taking goes UP, go with a constructive trust. Get the property back with added value.
If the property subsequent to taking goes DOWN, go with an equitable lien. P will get a deficiency judgment for what it was worth at the time of taking.
When D's property cannot be traced solely to P's property, only an equitable lien is available.
E.g.: D misappropriates money and uses it to remodel his home. Since title to the home was not obtained by sole use of the money, the propery remedy is an equitable lien on it. Can't get the whole house.
38
What is the equitable remedy available in tort? What is the definition?
Injunctive relief: D is ordered (enjoined) to do or refrain from doing something.
39
What is the threshold inquiry for an injunctive relief question?
Determine whether your'e required to discuss permanent or temporary/preliminary injunctive relief.
Permanent injunction: issued after full trial on the merits.
Temporary Injunction: issued pending trial on merits.
40
A permanent injunction is issued __________ while a temporary injunction is issued ___________.
after a full trial on the merits; issued pending trail on the merit.
41
What is the 2 part test for temporary/preliminary injunctive relief?
1. Establish that there is irreparable injury.
• Facts must be discussed in a time frame context. One must know that he or she will incur irreparable injury while waiting for a full trial and that's why she needs relief NOW.
• Irreparable injury is weighed against any hardship defendant will suffer if a temporary injunction is granted.
2. Establish the P's probability of success on the merits.
• If a preliminary injunction is sought on the exam: mention that the court should impose a bond requirement on plaintiff to reimburse D if the injunction injures him and the P does not succeed.
42
Exam writing approach for temporary injunction:
1. In issue is whether P can obtain a temporary or preliminary injunction. To do so, P must meet a two-part test:
2. Irreparable Injury (discuss in time sensitive facts)
3. Probability of succeeding (discuss bond)
43
Contrast a temporary restraining order with a typical temporary injunction:
TRO is issued pending a hearing to determine whether a preliminary injunction should issue.
The test for obtaining a TRO is identical to that for preliminary injunction.
1. irreparable harm
2. probability of success
44
TRO proceeding can be ex parte. Thus:
1. notice is not required and
2. Adversarial proceeding is not required.
*Even so, if there's an opportunity to give the D notice and a chance to appear and contest the injunction, a good faith effort must be made to do so.
45
TROs are limited to ________ (________ days in federal court).
10 days; 14 days
46
What are the four requirements for a permanent injunction?
1. Inadequate legal remedy
2. feasibility of enforcement
3. balancing of hardships
4. defenses
(I'm feeling bold and determined) OR (I'll feel better dead).
47
In analyzing a case for permanent injunctive relief, why might replevin be an inadequate legal remedy?
1. The sheriff may not be able to recover it, e.g. find or identify the chattel.
2. D can file a redelivery bond (and then, e.g. run off with or destroy chattel in the interim).
48
In analyzing a case for permanent injunctive relief, why might ejectment be an inadequate legal remedy?
The sheriff may refuse to act.
E.g. D builds a structure which slightly encroaches on P's property. Sheriff isn't going to rip it down.
49
In analyzing a case for permanent injunctive relief, why might money damages be an inadequate legal remedy?
1. Too speculative
2. D is insolvent
3. Irreparable injury
• Factory emits clouds of smoke containing metallic particles harmful to the lungs.
4. Avoiding a multiplicity of actions.
• They will tell you there has been a prior history of litigation between the parties.
*It is much easier to show money damages are inadequate if P is protecting an interest in land, e.g., injunctive relief against nuisance, trespass to land.
50
What are the 2 types of injunctions?
1. negative injunction: orders a D to stop what they are doing.
2. mandatory injunction: orders a D to affirmatively do something
51
What are the feasibilty of enforcement rules for each type of injunction?
negative injunctions: no enforcement problems.
mandatory injunctions: may be an enforcement problem based on (i) the difficulty of supervision and (ii) concern with effectively ensuring compliance.
52
If a fact pattern asks for a mandatory injunction and the act involves application of great skill, taste, or judgment, then:
injunction denied.
53
If a fact pattern asks for a mandatory injunction and the act involves a series of acts over a period of time, then:
injunction denied unless P's case is otherwise great. Needs to be a strong case on an important issue. Judge doesn't want to babysit.
54
If a fact pattern asks for a mandatory injunction and the act involves an out-of-state act, then
1. If resident defendant: injunction granted.
| 2. Non-resident defendant: injunction denied. (hard to exercise jx).
55
What is the balacing of hardships for permanent injunctive relief in tort?
P's benefit v. D's hardship if relief is granted.
56
For the balacing of hardships for permanent injunctive relief in tort, there must be a ___________ between D's detriment and P's benefit.
gross disparity.
57
There will be no balancing of hardships for permanent injunctive relief in tort if
the D's conduct was willful.
E.g.: D informs B that he's going to build a building going up to their joint boundary line. B returns from vacation to discover that due to D's willful conduct, the now completed building encroaches slightly onto his properrty.
D will argue gross disparity to make me tear it all down but because willful, no balancing. Real world, parties would settle, but no settling on the bar, tear down buildings.
58
In balancing of hardships for permanent injunctive relief in tort, in addition to P's benefit and D's hardship being considered, the hardship to the _______ is also taken into account.
public
E.g. A factory spews out clouds of smoke and fumes. There is no cost effective way to sufficiently abate this nuisance. An injunction would force the factory to close down. It is located several miles from a small town and employs 500 persons. The only nearby structure is Plaintiff's small home. Result?
1. discuss D's hardship: will need to relocate, etc.
2. discuss the public hardship: jobs, community
3. deny the injunction
4. award the P money damages
59
Balancing of hardships defense is almost always a primary discussion item when the tort is ________ or ___________.
nuisance; trespass to land
60
What are the defenses to consider when considering whether to award permanent injunctive relief?
1. Unclean hands
2. Laches
3. Impossibility
4. Free speech
61
What is the defense of unclean hands?
The unclean hands defense is available only if plaintiff's alleged improper conduct is related to teh lawsuit.
*Bar exam will give you a really shitty plaintiff. Make sure his bad behavior is related to the lawsuilt.
62
What is the laches defense?
Equitable equivalent to the statute of limitations. Unlike the statute of limitations, however, which involves the mere passage of time, laches is concerned with the effect of the passage of time.
The laches period will never be greater than the statute of limitations time period.
1. The clock starts to run when the plaintiff learns of the injury.
2. The delay cuts off the right to relief when it has been both unreasonable and prejudicial to the D.
3. If laches applies (meaning injunction denied), consider money damages.
E.g. Structure encroaches on P's land, but P is there the entire time and watches construction proceed. The delay in doing anything cuts off the right to equitable relief. Deny injunction.
63
What are the 3 laches issues?
1. The clock starts to run when the plaintiff learns of the injury.
2. The delay cuts off the right to relief when it has been both unreasonable and prejudicial to the D.
3. If laches applies (meaning injunction denied), consider money damages.
E.g. Structure encroaches on P's land, but P is there the entire time and watches construction proceed. The delay in doing anything cuts off the right to equitable relief. Deny injunction.
64
What is impossibility?
Defense to permanent injunction when it is impossible for the D to carry out the terms of the injunction.
65
What is the free speech defense in permanent injunction?
If the tort is defamation or a privacy publication branch tort (false light, private facts), your best exam answer is:
Injunction denied based on free speech grounds.
66
Who will be bound by an injunction?
1. the parties (defendant)
2. employees and agents acting with notice
3. others acting "in concert" with notice
Eg: Manufacturer makes Lebron James tshirts without James's permission and is enjoined from doing so. Vendor at stadium buys tshirts for resale and continues selling them even though he knows of the injunction. Result?
Even though not a party, still bound by the injunction.
67
If there is an erroneous injunctioin, does one have to obey it?
Yes. Therefore, what one must do is have it modified or resolved.
68
Court issues an order of _________ for disobeyance of a court order. The main objective of civil contempt is to ________, while the main objective of criminal contempt is to _______.
contempt; coerce; punish.
For imprisonment for civil contempt, the D holds the keys to the jailhouse. He can get out by agreeing to comply.
For imprisonment for criminal contempt, can't get out by your own will. Remain there for a set amount of time.
69
Injunctive relief is almost always coupled with ______ for injuries incurred in the time period prior to obtaining the injunction.
damages
70
What remedies apply?
1. Has/ is plaintiff being injured?
2. Has D derived a benefit?
3. Does P want the property returned?
4. Does P need an injunction? Is the harm still going on?
1. compensatory damages
2. restitutionary damages
3. replevin/ejectment
4. temporary? permanent? IFBD
71
What are the available remedies for the following commonly tested personal property torts?
1. destroyed property
2. damaged property
3. dispossession
1. compensatory damages
2. compensatory damages
3. compensatory damages
restitutionary damages
replevin
mandatory injunction
constructive trusts/equitable liens
self-help (reasonable force to recapture)
72
What are the available remedies for the following commonly tested real property torts?
1. simple trespass
2. destruction/damage of realty
3. dispossession
4. encroachment
5. nuisance
1. Simple Trespass:
nominal damages
restitutionary damages
injunction: avoiding multiplicity of actions
2. Destruction/Damag of Realty:
compensatory damages
injunction
3. Dispossession:
compensatory damages
restitutionary damages
ejectment: since it's available, no injunction
constructive trusts/equitable liens
4. Encroachment
compensatory damages
injunction: emphasize balancing hardships
NO restitution
5. Nuisance
compensatory damages
injunction: emphasize balancing of hardships
NO restitution
73
What are the available remedies personal injury torts?
1. compensatory damages
• economic losses/ special damages (e.g. lost wages)
• non-economic losses/ general damages (e.g. pain & suffering)
• lump sum payment discounted to present vlaue without inflation taken into account.
2. injunction
ONly against prospective intentional tortious conduct.
74
What are the available remedies for fraud?
1. damages
2. constructive trust/equitable lien
*Tip: Always consider whether punitive damages shoudl be awarded AND if the case could also be analyzed as a contracts case.
75
What are the contract remedies?
```
1. Legal Remedies
•Damages
2. Restituionary Remedies
• Legal Restitutionary Remedies
1. restitutionary damages
2. replevin
3. ejectment
• Equitable restitutionary remedies
1. constructive trusts
2. equitable liens
3. The equitable remedies
• specific performance
• rescission
• reformation
```
76
What are the four requirements for contracts compensatory damages?
same as torts:
1. causation
2. foreseeability
3. certainty
4. mitigation (unavoidabillity)
77
What are the two types of compensatory damages in contract?
1. direct damages: those that flow inherently from the wrong. *Most common is expectation measure: what position did P expect to be in after k was formed?
2. Consequential damges: available for related damages foreseeable at the time of formation. Need to be chatty iwth the person your're forming K with. Favorite fact pattern = the lost reputation fact pattern. Lost business on future sales.
78
T/F: Nominal damages are allowed in contract.
True
79
T/F: Punitive damages are allowed for contract breach.
False! No punitive damages in contract law.
80
On a contract question, if the D's conduct was willful, you shoudl always try to see if you can characterize it as a _______ case.
fraud; then it is a tort case where you can get punitive damages.
81
What is the 2 part test to determine the validity of a liquidated damages clause?
1. Damges are very difficult to ascertain at time of contract formation.
2. This was a reasonble forecast of what they would be. If amount is excessive this amount would be a penalty.
If valid: only liquidated damages available.
If invalid: only actual damages available.
82
A contract clause provides that one can get either actual damages or liquidated damages. What result?
Invalid clause--throw it out and give actual damages.
83
The basic bar exam restitutionary damages fact pattern involves
a contract that fails after P has rendered some performance (partial or complete).
Generaly comes up when contract is unenforcealbe or breached.
84
If a contract is unenforceable due to e.g. mistake, lack of capacity, statute of frauds, illegality:
1. Can P get restitutionary damages for property/money given to, or services rendered for D?
2. Can plaintiff get the property back?
1. yes, for the value of the benefit
• P sells store fixtures to D for a new store, pursuant to an unenforceable contract. D decides not to open the store and repudiates the k. P can get restitutionary damages for the value of the benefit.
2. Yes, if it is unique or D is insolvent.
85
t/f: For restitutionary damages, the value of the recovery can be greater than the contract rate.
True
86
To get restitutionary damages after a breached contract (P as breaching party v. P as non-breaching party)
P as non-breaching party:
1. P can get restitutionary damages for property/money given to or services rendered for D.
2. P can get property back if it is unique or defendant is insolvent.
If P is the breaching party:
1. Traditional view= no recovery
2. Modern view= Recovery is allowed, but cannot be greater than the contract rate and is reduced by any damages suffered by D as a result of the breach.
Eg: Contract for land, price = $100,000. P, after paying 30% of the purchase price defaults.
87
What is specific performance?
An equitable remedy in contract where the D is required to perform the contract.
Also, a favorite testing area in contracts on the bar.
88
What is the specific performance 5 part checklist?
1. contract is valid/certain/definite
2. contract conditions of plaintiff must be satisfied
3. inadequate legal remedy alternative
4. feasibility of enforcement
5. Defenses
(cha-cha is fairly difficult)
89
In order to obtain specific performance, P must be able to show the contract terms with more _________ and __________ than would be the case in an action for money damages at law.
certainty; definiteness
90
The "contract conditions of P must be satisfied" requirement means that
P must be able to show that her contract conditions have been fulfilled (already performed, or ready and able to perform, or excused from performing).
91
If a P is seeking specific performance, but there is an issue with deficiency and the seller cannot delver the agreed upon consideration e.g. the quantity of land is not available, what result?
1. Is P the seller or buyer?
2. If P is seller, can specifically enforce the K if the defect is minor, but cannot if the defect is major unless the seller can cure the defect by closing.
If P is the buyer, can enforce the k even if the defect is major, however, cannot enforce the k if the defect is very major. (look for 3-400 acres out of 1000).
92
If you decide that specific performance should be granted under the deficiencies rules, even though a defect still remains, you must include a sentence noting that the court will:
lower the purchase price to take into account the defect in consideration: abatement.
93
There is a land sale contract with an express time is of the essence caluse. The clause also contains a forfeiture provision saying if performance is not timely, forfeiture of all performance rendered to date. Buyer partially performs. He has made payments towards the purchase price but makes a late payment. This triggers the forfeiture clause & time is of the essence clause. Seller wants to keep both the land and any performance rendered to date. Buyer brings suit for specific performance. What result?
1. Equity abhors forfeitures.
2. Factors the court can look to to avoid the harsh result of forfeiture:
• loss to seller is small
• tardiness is de minimis
• waiver (seller has accepted late payments in the past)
• buyer would suffer undue hardship (losing land and money counts).
* In your answer, not that under modern trend, even if no specific performance, buyer would get restitutionary relief and get money back.
94
On the bar exam, you should ___________ award specific performance.
almost always
95
Under the modern trend, in a time is of the essence case where the buyer is seeking specific performance, even if specific performance were not granted, what is likely to occur?
court would give pliantiff (buyer) restitutionary relief and give him his money back even if not the land.
96
Why might legal remedy alternatives be inadequate in a contracts case? (thus warranting equitable relief in specific performance?)
1. Damages are speculative
2. defendant is insolvent
3. multiple suits are necessary
4. thing bargained for is unique*
97
In order for the thing bargained for to be "unique" such that specific performance might be the only remedy:
1. Land is unique--all of it , always. On the exam, they'll make every parcel of land identical--doesn't matter.
2. Personal property is generally not unique except for in 3 situations:
1. one of a kind or very rare:
2. personal significance to the buyer
3. circumstances make the chattel unique
E.g. OPEC decides to drastically cut down oil production, causing severe gas shortages. Can buyer get specific performance of contract to purchase gas. Yes.
*Uniqueness is tested at the time of litigation, not contract formation.
98
Uniqueness is tested at the _____________ not at ____________
time of litigation; contract formation.
99
T/F: A liquidated damages clause does not make money damages adequate. Specific performance is still available.
True.
*Exception: Where the clause provides that this is to be the only remedy.
100
Personal services contracts are not specifically enforceable because of:
1. enforcement problem
| 2. involuntary servitude
101
Covenants not to compete are enforceable if:
1. the services are unique and
| 2. the scope (geographic and duration) is reasonable.
102
What are the equitable defenses in contract?
1. Unclean hands
2. Laches
3. Unconscionability
103
What are the general contract defenses?
1. mistake
2. misrepresentation
3. statute of frauds
104
There is a land sale contract (or a testamentary disposition of land) that was an oral contract. Defendant now raises the Statute of Frauds as a defense to specific performance. What result?
If one has rendered (i) valuable part performance, (ii) in reliance on the contract, this will take the case out of the SOF and specific performance will be granted.
Valuable part performance=
1. Payment in whole or part
2. possession
3. Valuable improvements
4. valuable services
*Under common law, any 2 or the tope three taken together. Under modern trend, 4 is sufficient.
105
What is rescission?
An equitable remedy where teh original contract is considered voidable and rescinded. REquires a 2 step analysis:
1. Determine if there are grounds for rescission
2. Determine if there are valid defenses.
106
What is the 2-step analysis for rescission?
1. Determine if there are grounds for rescission.
| 2. Determine if there are valid defenses.
107
What are the general grounds for rescission?
1. Mistake
2. Misrepresentation
3. Coercion
4. Undue influence
5. Lack of capacity
6. failure of consideration
7. illegality
* All relate to contract formation (no mutual assent)
108
If there is mutual mistake about a material fact, rescission should be _______.
granted
E.g. B and D enter a k for the sale of a warehouse building which they both mistakenly believe is in good condition. In fact, it has major structural problems. Rescission granted.
109
If there is mutual mistake as to a collateral fact, rescission should be
denied.
E.g. B enters into a k with D for a warehouse. Both believe its only use is as a warehouse. One week later, developer offers D three times the sale price because he intends to convert it into expensive loft apartments. Rescission? No.
110
If there is a unilateral mistake, rescission should be
denied.
General Exception: If the non-mistaken party knows or should have known of the mistake.
E.g.: contractor submits a bid for a construction project, negligently leaving out a major cost item. The bid is far, far less than competing bids and is accepted. Rescission. yes.
Modern Trend Excption: The mistaken party would suffer undue hardship if there is no rescission.
111
In order to get a rescission based on misrepresentation grounds, the P must show
that he actually relied upon the misrepresentation.
112
The valid defenses for rescission are:
1. unclean hands
2. laches
NOT negligence. Negligence of P is not a good defense. If contractor negligently leaves out a 0 on a bid, negligence of P will not negate rescission.
113
If P sues for damages first, rescission is ___________. But if Plaintiff sues for rescission first, ________.
rescission is not allowed; damages are allowed.
Rescission is not allowed if P sues for damages first because suing for damages is regarded as an affirmance of the contract.
P can even sue for both at the same time, but must elect the preferred remedy before judgment.
114
T/F: If a P who is entitled to rescission has previously rendered performance on the contract (e.g. performance of services, advance on purchase price), she can get compensated for it or get the property back via restitution.
True.
115
What is reformation?
Equitable remedy in contract where the written agreement is changed to conform with the parties' original understanding.
116
What is the 3 step analysis for reformation?
1. Is there a valid contract? Meeting of the minds?
2. Are there grounds for reformation?
Mistake?
Misrepresentation?
3. Are there valid defenses?
Unclean hands?
Laches?
117
If there is a mutual mistake, the reformation is _______. If a unilateral mistake reformation is _______.
granted; denied.
Exception: Where the non-mistaken party knows of the miskate. **(Not known or should have known as in rescission).
118
If misrepresentation, reformationis _________.
Rewriting reflects the expressed intent of the parties.
119
What are potential defenses to reformation? What are not?
Unclean Hands & Laches
Not =
1. negligence of P
2. statute of frauds
3. parol evidence rule
120
What are potential available remedies for a personal property sale contract case?
1. compensatory damages
•seller's breach: does not convey, delivers damaged goods
• buyer's breach (does not pay)
2. restitution
•unenforceable/ breached contracts
3. specific performance
• property not unique--check exceptions
4. rescission
5. reformation
121
Available remedies for a real property sale contract?
```
1. compensatory damages
• seller's breach: does not convey
• buyer's breach: does not pay
2. Restitution
• Unenforceable/ breached contracts
3. Specific Performance
• Land is unique
• Both buyer and seller can get SP
• Deficiences/ Time of the Essence clauses
4. Rescission
5. Reformation
```
122
Available remedies for construction contracts?
1. Compensatory damages
•Owner's breach (doesn't pay)
• builder's breach (non-completion, defective)
2. Restitution
• Only the builder can get for work done unless the owner pre-paid
3. Specific performance
•Only the owner, but very difficult because of enforcement problems.
123
Available remedies for personal services contracts?
```
1. Compensatory damages
•ER's breach (wrongful termination)
• EE's breach (wrongfully quits)
2. Restitution
•ONly the EE for services rendered, unless ER prepaid
```
3. Specific Peformance
• No for employment contract
• Yes for valid covenant not to compete
