Remedies

Question 1

What legal remedies are available for a breach of contract?

Answer 1

1) Expectation damages
2) Reliance damages
3) Consequential damages
4) Incidental damages
5) Restitution damages

*Punitive damages are generally NOT available.

Question 2

What are Expectation Damages?

When are they available?

Answer 2

Damages that arise directly from the breach, and are an attempt to put the non-breaching party in the same position it would have been in but for the breach.

To recover, damages must be:

1) Causedbythedefendant;
2) Foreseeable;
3) Certain; AND
4) Unavoidable.

Question 3

What are Reliance Damages?

When are they available?

Answer 3

The expenditures made by a party in reliance of the contract and are an attempt to put the non-breaching party in the position it would have been if the contract never existed.

Available when:

1) Plaintiff acted in reliance on the defendant’s agreementto perform; AND
2) The plaintiff’s reliance was foreseeable.

Question 4

What are Consequential Damages?

When are they recoverable?

Answer 4

Damages that arise indirectly from the breach and are awardedbecause of the injured party’s special circumstances.

To recover, damages MUST be:

1) Reasonably foreseeable at the time of contract formation;
2) Arise from the plaintiff’s special circumstances that the defendant knew or had reason to know of; AND
3) Reasonably certain (not speculative).

Question 5

What are Incidental Damages?

Answer 5

The reasonable costs incurred as a result of a breach of contract (i.e. costs of returning non-conforming goods).

Question 6

When is Restitution awarded?

Answer 6

It is awarded to prevent unjust enrichment, and is available when one party confers a benefit onto another party.

Damages = based on value of benefit conferred.

Question 7

When will Liquidated Damages be enforced?

Answer 7

If:

1) The amount of damages 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 are the damages for breach of a land sale contract?

Answer 8

1) Any amount paid;
2) The difference between the fair market value at the time

of the breach and the contract price;

3) Expenses incurred in investigating title and preparing

necessary paperwork;

4) Expenses incurred in preparing to occupy the land;
5) Possible consequential damages; AND
6) Interest.

Question 9

UCC Seller’s Remedies / Damages

Under the UCC, what remedies does a seller have if a buyer breaches a contract for the sale of goods?

Answer 9

a) Withhold delivery of the goods;
b) Cancel;
c) Recover cover damages;
d) Recover market damages;
e) Recover lost profits if the seller is a lost volume seller;
f) Stop delivery of the goods when he discovers buyer is insolvent;
g) Stop delivery of a truckload when buyer breaches; OR
h) Replevy identified goods.

Question 10

UCC Buyer’s Damages

Cover Damages

vs.

Market Damages

vs.

Loss-In-Value Damages

Answer 10

Cover: Difference between the contract price and the price of substitute goods (used if buyer covered in good faith).

Market: Difference between the market price and contract price (used if the buyer did not cover in good faith or at all).

Loss-In-Value: Difference between the value as promised and the value of the non-conforming goods (used if the buyer keeps the non-conforming goods).

Question 11

When will a quasi-contract be created?

Answer 11

If:

1) The plaintiff confers a benefit upon the defendant;
2) The plaintiff had a reasonable expectation he would be compensated for the benefit;
3) The defendant requested the benefit; AND
4) The defendant would be unjustly enriched (if not forced to compensate the plaintiff).

Question 12

How does Reformation allow a contract to be changed, and when is it available?

Answer 12

It allows a contract to be changed to conform to the parties’ original intent.

It is available if a valid contract exists, BUT there was a misrepresentation OR mutual mistake of material fact.

*Will not be reformed if a valid equitable defense exists.

Question 13

When is a Rescission of a contract an available remedy?

Answer 13

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

BUT, a contract will NOT be rescinded if:

a) A valid equitable defense applies; OR
b) The plaintiff sued for damages under the contract in a prior action.

Question 14

When is Specific Performance available?

Answer 14

When:

1) A valid contract exists with clear and definite terms;
2) The plaintiff has performed under the contract or is

ready, willing, and able to perform;

3) Legal remedies are inadequate;
4) Enforcement is feasible for the court; AND
5) No valid equitable or contractual defenses exist.

Question 15

What are the available legal remedies in tort actions?

Answer 15

1) Compensatory damages
2) Nominal damages
3) Punitive damages
4) Restitution damages

Question 16

What are Compensatory Damages?

Answer 16

Damages that are an attempt to put the injured party in the same position it would have been in but for the injury.

To recover, damages must be:

1) Caused by the defendant;
2) Foreseeable;
3) Certain; AND
4) Unavoidable.

Question 17

When are Nominal Damages available in a tort action?

Answer 17

When the plaintiff has NOT suffered an actual injury, but still wants to establish his rights.

*They are not available where either damages or actual injury is an element to a cause of action.

Question 18

When are Punitive Damages available in a tort action?

Answer 18

They are awarded to punish the defendant, and are available if:

1) The plaintiff was awarded actual damages;
2) The punitive damages are proportional to the actual damages; AND
3) The defendant’s conduct was willful, malicious, or egregious (more than negligent).

Question 19

What are the damages awarded for Fraud?

Answer 19

Either:

a) The actual losses suffered (difference in what the plaintiff gave and received); OR
b) The benefit of the bargain (difference in what he received and what he was fraudulently led to believe he would receive)

Question 20

What are the damages for conversion of property?

Answer 20

Either:

a) Possession of the property; OR
b) The fair market value of the property at the time of the conversion.

Question 21

What are damages for trespass to land?

Answer 21

Either:

a) The diminution in value of the property; OR
b) The cost to repair the property.

Question 22

What is a Temporary Restraining Order (TRO)?

When is it available?

Answer 22

An emergency remedy used to maintain the status quo pending the outcome of a hearing or application.

It is ONLY available when the plaintiff will suffer immediate and irreparable harm.

Question 23

What must party show to receive a TRO on notice to the other parties?

Answer 23

The court will analyze the same factors as a preliminary injunction.

Question 24

For an ex parte TRO, what must the moving party do?

Answer 24

1) Provide specific facts in a sworn statement showing immediate and irreparable injury, injury, loss, or that damage will result before an adverse party can be heard;
2) Certify in writing any efforts made to give notice to the adverse party and why notice should not be required; AND
3) Give security in an amount that the court deems proper.

*The United States, its officers, and its agencies are not required to give security.

Question 25

What must the moving party show for a **Preliminary Injunction**?

Answer 25

1) A likelihood of success on the merits; 2) A likely threat of irreparable harm; 3) Balancing of hardships (in favor of the moving party); 4) An injunction is in the public interest; 5) Notice to the adverse party; **AND** 6) Security (post a bond) in an amount the court deems proper.

Question 26

What must be shown for a **Permanent Injunction**?

Answer 26

1) Inadequate legal remedies; 2) A protectable personal or property interest; 3) Feasibility of enforcement; 4) A balancing of hardships (to both parties); **AND** 5) No valid equitable defenses.

Question 27

When is an **Equitable Lien** available?

Answer 27

If a defendant: 1) _Wrongfully acquired_ title to property; **AND** 2) Would be _unjustly enriched_ if allowed to keep the property. (The court will force the sale of the property and the plaintiff will receive the proceeds).

Question 28

When is a **Constructive Trust** (used to prevent unjust enrichment resulting from wrongful conduct) available as a remedy?

Answer 28

If the defendant: 1) _Wrongfully acquired_ title to property; **AND** 2) Would be _unjustly enriched_ if allowed to keep the property. \*The court will require the defendant to hold the property as a trustee, and then return it to the plaintiff.

Question 29

When is **replevin** (allows recovery of specific personal property) available as a remedy?

Answer 29

If: 1) The defendant is wrongfully withholding personal property; 2) That the plaintiff has a right to possess. \*A plaintiff may recover property *before trial* IF there is a preliminary judicial hearing and the plaintiff posts bond.

Question 30

When is **Ejectment** (recovery of specific real property) available as a remedy?

Answer 30

If: 1) The defendant has actual possession of the property; 2) The defendant is wrongfully withholding the property; **AND** 3) The plaintiff has a right to possess the property.

Question 31

When does a **Purchase Money Resulting Trust** arise?

Answer 31

When one party provides consideration for the purchase of real property BUT titles it to another. The party providing the consideration is the beneficiary of the trust; the person holding title is the trustee.

Question 32

When does a **Pro Rata Resulting Trust** arise?

Answer 32

When one party provides only **partial consideration** for the purchase of real property AND the property istitled in another party’s name. The party providing the consideration is the beneficiary of the trust; the person holding title is the trustee.

Question 33

When does the defense of **Laches** bar recovery?

Answer 33

When: 1) There is an _unreasonable delay_ between when the plaintiff learned of the injury/breach and when the action was brought; **AND** 2) The _defendant is prejudiced_ by the delay.

Question 34

When does the doctrine of **Unclean Hands** bar recovery?

Answer 34

When a plaintiff is guilty of **unethical, unlawful**, or otherwise **improper conduct** related to the subject of the lawsuit.

Question 35

Can a plaintiff recover damages as a result of a breach that could have been avoided?

Answer 35

**NO.** Accordingly, a party must take *reasonable steps to _mitigate_* their losses.

Question 36

What must a plaintiff show to state a prima facie case for **Intentional Misrepresentation?**

Answer 36

1) Misrepresentation of a material fact by the defendant; 2) The defendant knew that the statement was false; 3) Intent of the defendant to induce the plaintiff 4) Actual and reasonable reliance by the plaintiff; **AND** 5) Damages.

Question 37

What must a plaintiff show to state a prima facie case for **Negligent Misrepresentation**?

Answer 37

1) A misrepresentation by the defendant; 2) Supplied for guidance of others in a business transaction; 3) The defendant knew (or should have) that the information was supplied to guide plaintiff in business transactions; 4) The defendant was negligent in obtaining/communicating the false information; 5) Actual and reasonable reliance by the plaintiff; **AND** 6) The false information proximately caused the plaintiff’s damages.