Remedies

Question 1

What are the available legal remedies for breach of contract?

Answer 1

The following legal remedies are available for breach of contract:

1. expectation damages;
2. reliance damages;
3. restitution damages;
4. incidental damages; AND
5. consequential damages.

Punitive damages are generally NOT available in a breach of contract action, but may be awarded in a contract action involving corresponding tort claims that allow such damages (i.e. fraud).

Question 2

What are expectation damages?

Answer 2

Expectation damages arise directly from the breach and aim to put the non-breaching party in the same position it would have been in had the contract been performed – the benefit of the bargain. To recover, the damages must be:

1. caused by the defendant;
2. foreseeable;
3. unavoidable; AND
4. certain.

Question 3

What are reliance damages and when are they available?

Answer 3

Reliance damages constitute reimbursement for expenditures made in reliance on a contract.

The purpose is to put the non-breaching party in the position they would have been if the contract never existed.

Reliance damages are available when:

1. a plaintiff acted in reliance on the defendant’s agreement; AND
2. the reliance was foreseeable.

Question 4

What are consequential damages?

Answer 4

Consequential damages arise indirectly from the breach due to the injured party’s special circumstances.

Consequential damages are available when they are:

1. from special circumstances known to the defendant;
2. reasonably foreseeable; AND
3. reasonably certain.

Question 5

What are incidental damages?

Answer 5

Incidental damages are reasonable expenses incurred as a result of a breach of contract, such as costs of storing or returning non-conforming goods.

Question 6

What are restitution damages?

Answer 6

Restitution is awarded to prevent unjust enrichment and is based on the value of the benefit conferred upon the defendant. A party cannot recover both expectation and restitution damages.

Question 7

What are liquidated damages?

Answer 7

Liquidated damages will be enforced if: (1) the amount is difficult to estimate at the time the contract was formed; AND (2) the amount is reasonable to the actual damages suffered.

Question 8

What damages can a buyer recover for breach of contract concerning the sale of land?

Answer 8

The buyer may recover: (1) any amount paid; (2) the difference between the fair market value and the contract price; (3) expenses incurred in investigating title; (4) expenses for preparing to occupy the land; (5) possible consequential damages; AND (6) interest.

Question 9

What remedies does a buyer have under the UCC?

Answer 9

A buyer may: (1) cancel the contract; (2) recover any amount paid; (3) recover Cover Damages or Market Damages; AND (4) recover Incidental and Consequential damages.

Question 10

What are Cover Damages?

Answer 10

Cover Damages are the difference between the contract price and the price of substitute goods, used if the buyer covered in good faith.

Question 11

What are Market Damages?

Answer 11

Market Damages are the difference between the market price at the time of breach and the contract price, used if the buyer did not cover in good faith.

Question 12

What remedies does a seller have under the UCC?

Answer 12

A seller may: (a) withhold delivery; (b) cancel; (c) recover cover damages; (d) recover market damages; (e) recover lost profits if a lost volume seller; (f) stop delivery of goods; (g) replevy identified goods in certain instances.

Question 13

What is a quasi-contract?

Answer 13

A quasi-contract is implied by law to prevent unjust enrichment, created if: (1) the plaintiff confers a benefit; (2) had a reasonable expectation of compensation; (3) the defendant requested the benefit; AND (4) the defendant would be unjustly enriched.

Question 14

What is reformation in contract law?

Answer 14

Reformation allows a contract to be changed to conform to the parties’ original intent if a valid contract exists, but there was a misrepresentation or mutual mistake.

Question 15

What is rescission in contract law?

Answer 15

Rescission treats the original contract as cancelled and is available if there was a problem with the formation of the contract.

Question 16

What is specific performance?

Answer 16

Specific performance is a remedy available when: (1) a valid contract exists with clear terms; (2) the plaintiff has performed or is ready to perform; (3) legal remedies are inadequate; (4) enforcement is feasible; AND (5) no valid defenses exist.

Question 17

What are the available legal remedies in tort actions?

Answer 17

The following damages are available: (1) compensatory damages; (2) consequential damages; (3) nominal damages; (4) punitive damages; AND (5) restitution damages.

Question 18

What are compensatory damages?

Answer 18

Compensatory damages attempt to put the injured party in the same position it would have been but for the injury. To recover, damages must be: (1) caused by the defendant; (2) foreseeable; (3) certain; AND (4) unavoidable.

Question 19

What are nominal damages?

Answer 19

Nominal damages are available when the plaintiff has NOT suffered an actual injury but still wants to establish rights.

Question 20

What are punitive damages?

Answer 20

Punitive damages are awarded to punish the defendant and are available if: (1) the plaintiff was awarded actual damages; (2) the punitive damages are proportional; AND (3) the conduct was willful, malicious, or egregious.

Question 21

What are damages for fraud?

Answer 21

Damages for fraud are either: (a) actual losses suffered; OR (b) the benefit-of-the-bargain.

Question 22

What are damages for conversion of property?

Answer 22

For conversion, a plaintiff may recover either: (a) possession of the property; OR (b) the fair market value at the time of conversion.

Question 23

What are damages for trespass to chattels?

Answer 23

In an action for trespass to chattels, the damages awarded are the actual damages suffered, which may include the cost of repairs.

Question 24

What are damages for trespass to land?

Answer 24

In an action for trespass to land, damages are measured by either: (a) the diminution in value; OR (b) the cost to repair the property.

Question 25

What is a Temporary Restraining Order (TRO)?

Answer 25

A TRO is an emergency remedy to maintain the status quo pending a hearing and is available when the plaintiff will suffer immediate and irreparable harm.

Question 26

What are the requirements for issuing a TRO ex parte?

Answer 26

The court may issue an ex parte TRO if the moving party: (1) provides specific facts showing immediate harm; (2) certifies efforts to give notice; AND (3) gives security as deemed proper.

Question 27

What is the expiration of an ex parte TRO in Federal Court?

Answer 27

An ex parte TRO automatically expires after 14 days unless extended for good cause or with opposing party consent.

Question 28

What is required for an ex parte TRO to be issued in Federal Court?

Answer 28

It must give notice to the adverse party and provide security in an amount deemed proper by the court. ## Footnote In Federal Court, the United States, its officers, and its agencies are not required to give security.

Question 29

How long does an ex parte TRO last in Federal Court?

Answer 29

An ex parte TRO automatically expires after 14 days unless the court sets a shorter expiration.

Question 30

What can a court do regarding the expiration of an ex parte TRO?

Answer 30

A court can extend the expiration for good cause or if the opposing party consents to the extension.

Question 31

What happens if an ex parte TRO is granted in California?

Answer 31

A hearing for the preliminary injunction will be set no later than 15 days (or 22 days if there’s good cause) from the date the TRO is issued.

Question 32

What is a preliminary injunction?

Answer 32

A preliminary injunction maintains the status quo pending the outcome of an action to protect against irreparable harm.

Question 33

What are the requirements for issuing a preliminary injunction?

Answer 33

It requires notice to the adverse party and security in an amount deemed proper by the court.

Question 34

What must the moving party show for a preliminary injunction?

Answer 34

The moving party must show: (1) likelihood of success on the merits; (2) likely threat of irreparable harm; (3) balancing of hardships in favor of the moving party; (4) injunction is in the public interest.

Question 35

When should a motion for a preliminary injunction be denied?

Answer 35

If the moving party has an adequate remedy at law.

Question 36

What types of injunctions can a court issue?

Answer 36

A court can issue a restraining injunction or a mandatory injunction.

Question 37

What is a permanent injunction?

Answer 37

A permanent injunction is issued after a full trial on the merits.

Question 38

What are the requirements for a permanent injunction?

Answer 38

It requires: (1) inadequate legal remedies; (2) a protectable personal or property interest; (3) feasibility of enforcement; (4) balancing of hardships; (5) no valid equitable defenses.

Question 39

What is a declaratory judgment?

Answer 39

A declaratory judgment determines the rights and obligations of the parties.

Question 40

When can a Federal Court issue a declaratory judgment?

Answer 40

Only when there is a case of actual controversy that meets justiciability requirements under Art. III of the Constitution.

Question 41

What are the requirements for a declaratory judgment action?

Answer 41

It must involve: (1) a substantial controversy; (2) adverse legal interests; (3) sufficient immediacy and reality.

Question 42

What is an equitable lien?

Answer 42

An equitable lien is available if a defendant wrongfully acquired title to property and would be unjustly enriched by keeping it.

Question 43

What happens if the proceeds from a forced sale are less than the property's value?

Answer 43

The plaintiff is entitled to a deficiency judgment.

Question 44

What is a constructive trust?

Answer 44

A constructive trust is an equitable remedy to prevent unjust enrichment from wrongful conduct.

Question 45

What are the requirements for a constructive trust?

Answer 45

It is available if a defendant wrongfully acquired title to property and would be unjustly enriched by keeping it.

Question 46

What is replevin?

Answer 46

Replevin allows the recovery of specific personal property wrongfully withheld by a defendant.

Question 47

What are the requirements for replevin?

Answer 47

The plaintiff must have a right to possess the property and there must be a preliminary judicial hearing.

Question 48

What is ejectment?

Answer 48

Ejectment allows the recovery of specific real property wrongfully withheld by a defendant.

Question 49

What is a Purchase Money Resulting Trust (PMRT)?

Answer 49

A PMRT arises when one party provides consideration for the purchase of real property but titles it to another.

Question 50

What is a Pro Rata Resulting Trust?

Answer 50

A Pro Rata Resulting Trust arises when one party provides partial consideration for property titled in another's name.

Question 51

What is the defense of laches?

Answer 51

Laches bars recovery when there is an unreasonable delay in bringing an action that prejudices the defendant.

Question 52

What is the doctrine of unclean hands?

Answer 52

It bars recovery when a plaintiff is guilty of unethical or improper conduct related to the lawsuit.

Question 53

What is the mitigation of damages principle?

Answer 53

A plaintiff cannot recover damages that could have been avoided by taking reasonable steps.

Question 54

What are the elements of intentional misrepresentation?

Answer 54

To establish a case, a plaintiff must show: (1) misrepresentation of a material fact; (2) knowledge of falsity; (3) intent to induce; (4) reliance; (5) damages.

Question 55

What are the elements of negligent misrepresentation?

Answer 55

A plaintiff must show: (1) misrepresentation; (2) supplied for guidance; (3) knowledge or should have known; (4) negligence; (5) reliance; (6) damages.

Question 56

What is concealment in relation to misrepresentation?

Answer 56

Concealment is an affirmative act to keep another from learning a fact and is equivalent to misrepresentation.