remedies and damages calculations Flashcards
(113 cards)
1
Q
K expectation damages calculation
A
The general formula is that expectation damages = losses in value caused by the breach + gains prevented by the breach − savings resulting from not having to perform.
2
Q
Lost volume seller damages under UCC
A
The manufacturer is a lost-volume seller, i.e., a seller that could have made both the breached sale and the second sale because it could produce a virtually unlimited number of goods. Upon breach, a lost-volume seller is entitled to recover the lost profit on the sale
3
Q
Equitable vs legal remedies
A
Equitable: order party to refrain from or engage in act. Legal - montary damages. Equitable R: (1) discretionary; (2) issued by a judge (NOT entitled to jury on equitable issues); (3) backed by court’s contempt power; (4) require showing legal remedy is inadequate typically; (5) may be deemed extraordinary because they place burden on the court and may be obtained without full procedural protections.
4
Q
Preliminary injunction requirements
A
HELP +notice + bond to cover the costs
and damages to the nonmoving party in the event it is later determined that the injunction should not have issued; CA law does not require a bond to be posted.
HELP: irreparable harm, balance of equities between possibilyt of irreparable harm and injury/inconvenience to nonmovant; liklihood of success on the merits; and public interest
5
Q
Detailed purelim injunction rerquirements
A
1) The party seeking relief must give notice to the nonmoving party before filing the motion;
(2) The moving party must show a likelihood of success on the merits of the case (though the
movant does not have to prove its case at this stage, the court will consider whether the
movant’s evidence may later lead to success on the merits);
(3) The moving party must establish that the nonmoving party’s conduct, if not enjoined, is likely to
irreparably harm the movant or render a final judgment on the merits ineffectual;
(4) The moving party must prove that the balance of equities tips in its favor (i.e., the possibility
of irreparable harm to the movant if the injunction does not issue is greater than the possible
injury or inconvenience to the nonmoving party if the injunction does issue); and
(5) The court must consider the impact on nonparties to the litigation, and specifically whether
there would be a critical public interest that likely would be injured or furthered by granting the
preliminary injunction.
6
Q
Temproary restraining order
A
Temporarily prevents immediate harm. Can only last 14 days (15 in CA to 22) and extended another 14 for good cause -turns into PI.
Requires showing of PI HELP
No notice required IF (1) moving party can prove it will suffer irreparable harm before the nonmoving party can be notified and a hearing held AND (2) atty certifies its attempts to give notice or reasons why notice shouldn’t be required.
7
Q
TRO CA specifics
A
Court has discretion to issue a TRO w.o bond. IF granted w/o notice, court MUST hear a hodlging on TRO application as soon as available, but NO LATER than 15 days after TRO issued. CAN be extended to 22 days with good cuase.
TRO Alternative test: balance/weigh certain elements of traditional (HELP) test w/o giving equal weight on a sliding scale so strong showing on one element can compensate for weak showing on another.
8
Q
Examples of irreparable harm
A
Courts have found that the following may constitute irreparable harm:
the likelihood of multiple lawsuits;risk of loss of a unique or irreplaceable good;
uncertainty or difficulty in measuring or proving damages;the defendant’s insolvency;
the abrogation of constitutional rights; and
loss of chance or advantage.
9
Q
Public interest test
A
“public interest” has generally been deemed synonymous with public policy. It can encompass public concerns such as the economy, the environment, safety, health, government, and national security. However, the government’s involvement in a lawsuit does not always satisfy the public interest requirement.
10
Q
Permanent injunction
A
is issued after a full trial or a decision on the merits, and lasts for an indefinite
amount of time unless modified or dissolved. Five requirements must be met:
(1) The moving party must establish that the nonmoving party’s conduct, if not enjoined, is likely to
irreparably harm the movant or render a final judgment on the merits ineffectual;2) The moving party must prove that the balance of equities tips in its favor (i.e., the possibility of
irreparable harm to the movant if the injunction does not issue is greater than the possible injury or
inconvenience to the nonmoving party if the injunction does issue);
(3) The moving party must show that there is no critical public interest that would be injured if the
permanent injunction were granted;
(4) The claim must be ripe (i.e., that the alleged injury is real and concrete; not remote, speculative, or
contingent on some future event that may or may not occur); and
(5) There must be no administrative burden on the court (i.e., it cannot require the court’s supervision
over a long period of time or complex involvement of the court).
11
Q
Equitable remedy - specific performance
A
s a type of permanent injunction that requires a party to perform a contractual
obligation as an alternative to paying damages. Seven requirements must be met:
(1) The legal remedy is inadequate;
(2) A valid contract exists with certain and definite material terms;
(3) The defendant is able to perform its duties under the contract or stands ready to continue
performance in the future;
(4) The plaintiff has substantially performed or satisfied any conditions precedent;
(5) The decree is enforceable and able to be supervised;
(6) Enforcement would not create an unreasonable hardship on the defendant relative to the
benefit the plaintiff would gain by performance; and
(7) There are no defenses.
12
Q
Equitable defenses to specific performance
A
equitable defense will bar SP, but could still get monetary. Unclean hands, laches, acquiescence, equitable estoppel. mistake, misrep, unconsionabilty, parole evidence, SOF
13
Q
UCC specific performance of goods
A
UCC specific performance for sale of goods IF goods are unique: (1) goods are availablet to buyer ONLY from seller; (2) goods are custom-built FOR buyer; (3) goods have historical or sentimental significance OR (4) goods are designed to particular specifications. WILL NOT be availbale if can buy cover (substitute goods
14
Q
Limits on contract specific performance
A
court will decline discreation to award SP if (1) unclean hands by claimant; (2) laches (harm caused by claimant’s unreasonable delay in asserting rights; (3) prior sale of Ks subject matter toa good faith bfp; (4) sharp practices which are P’s conduct that odes not rise to level of a K defense, but has elements of unconsionability, undue influence, duress, or misrep
14
Q
Limits on contract specific performance
A
court will decline discretion to award SP if (1) unclean hands by claimant; (2) laches (harm caused by claimant’s unreasonable delay in asserting rights; (3) prior sale of Ks subject matter toa good faith bfp; (4) sharp practices which are P’s conduct that odes not rise to level of a K defense, but has elements of unconsionability, undue influence, duress, or misrep
15
Q
Mandatory and negative injunction
A
party to DO something.
Negative injunction - prohibits party from performing a K or engaging in certain behavior.
16
Q
Specific performance inadequate at law requuirement
A
Inadequate Remedy at Law: situations where there is an inadequate remedy at law
include:
(1) When the contract is for the sale of land, because land is unique;
(2) When an employer is seeking to prevent employees from disclosing trade secrets in
breach of confidentiality agreements; and
(3) When the contract involves the sale of unique goods, custom-built goods, goods with
historical or sentimental significance, or goods designed to particular specifications.
* Personal Services: courts have never awarded specific performance for personal services
17
Q
Equitable remedy - reformation
A
when a written document does not conform to the actual agreement between the
parties (perhaps because of a typographical error), the aggrieved party may seek a reformation of the
document. The moving party must show, by clear and convincing evidence, that the contract’s terms are
not as the parties agreed upon because of mistake, fraud, or misrepresentation.
18
Q
Reformation/recision not permitted to adversely affect BFP
A
reformation is not an available remedy if reformation of the document
would adversely affect the rights of a bona fide purchaser (i.e., a purchaser of property who
gave value in good faith without notice of the error or conflicting interest)
19
Q
Specific performance defenses
A
(1) unclean hands - P denied equitable relif IF engaged in wrongful conduct that is directly related to claim at issue (not about a collateral matter) (2) laches - bar equitable claim when P hasn’t acted promptly - unreasonable delay based on TOC -wartime conditions, P’s socioeconomic status, P’s invetigation of claims and prep for litigation, incapacity, illness, pursuit of other avenues for legal resolution + material prejudice to D that is evidentiary loss or economic; (3) acqueisence - P knowingly fails to object to infringement of rights by D acting unkowingly/w/o malice; (4) equitable estoppel - (a) first person misrepd/concealed material facts; (b) knew when making rep they were untrue; (c) estoppel claimer did NOT know misreps were untrue when acted upon’ (d) first person intended/reasonably expected seocnd person would act on misresps; (e) second person reasonably relied in good faith to determinet on misreps and was prejudiced or would be prejudiced by reliance if first person permitted to deny truth. EE applies to Equitable claims AND legal claims
20
Q
Mutual recision
A
all parties and decision MUST be supported by consideration. If no party has performed, recision itself counts as consideration. NO mutual recision if one party started performance. NO writing requirement.
21
Q
Unilateral rescision
A
is an equitable remedy where the court invalidates a contract upon a showing
by the moving party that, at the time of formation, the contract was not supported by mutual assent due
to fraud, fraudulent misrepresentation, misrepresentation of a material fact (even if not fraudulent), mutual
mistake, or unilateral mistake.
22
Q
recision notice requirement
A
efore filing suit and promptly upon discovering grounds
for rescission, a plaintiff must provide notice to the defendant and return the benefits received from the contract, unless (1) the benefit has been disposed of prior to discovery of the grounds for rescission, (2) the benefit is presently worthless, or (3) if the benefit is money, and the amount equates to whatever the defendant may owe the plaintiff.
23
Q
Declaratory judgment
A
sets forth the rights, status, and other legal relations of the parties, regardless
of whether further relief is or could be claimed.
24
Seller damages when Buyer breaches LAND SALE K
Expectation damages! =
difference between K price
and FMV on date of breach
(usually date of performance unless
anticipatory repudiation) +
consequential -
benefits recieved and expenses
saved by seller
if breach is in a failing market,
seller may recover damages
if property value drops btwn
time K entered and breach.
If breach is in rising market,
seller may not have any
damages.
seller can always recover
costs and expenses of putting
property back on market
as consequential damages
e.g. maintenance, tax,
escrow fees...AND rental value
of land if purhcaser occupied
land before breach.
Reduce damages by sum
seller saved due to breach.
25
Equitable defense unclean hands
a plaintiff may be denied an equitable remedy if two requirements are met:
(1) The plaintiff engaged in wrongful conduct (i.e., conduct that is fraudulent, illegal, willful,
reckless, grossly negligent, or in blatant disregard for the rights of others, although the conduct
does not need to have caused injury to the defendant); and
(2) That wrongful conduct is directly related to the claim at issue (i.e., directly related to the same
transaction forming the basis upon which relief is sought; it cannot be a collateral matter).
26
Equitable damages laches
s a defense that bars an equitable claim where the plaintiff has not acted promptly in bringing
the action. The defendant must show:
(1) An unreasonable delay by the plaintiff, and
(2) Material prejudice to the defendant.
* Unreasonable: to determine whether the delay was unreasonable, the court will
examine a variety of factors, including:
(1) The plaintiff’s socioeconomic status, incapacity, or illness;
(2) Wartime conditions;
(3) Conduct inducing delay by the opposing party;
(4) Good faith negotiations between the parties;
(5) The plaintiff’s investigation of claims and preparation for litigation; and
(6) Pursuit of other avenues for legal resolution.
* Material Prejudice: there are two kinds of prejudice that will support a laches defense.
(1) Evidentiary Prejudice: such as loss or destruction of critical documentary evidence or unavailability of important witnesses
(2) Economic Prejudice: such as potential loss of a relied-upon income stream or the
expenditure of resources in reliance on the status quo
27
Buyer's expectation damages when seller breaches LAND SALE
expectation damages = FMV on due date of seller's performance - K price + consequential damages - benefits received and expenses saved by buyer.
Good faith title defect - If resulting from seller's good faith mistake, 2 rules. Majority (CA) - allows nonbreaching buyer to recover expectation damages using formula. (minority rule limits buyer's recovery to reliance damages)
Bad-faith title defect - expectation damages imposed in all jx.
28
Equitable defense acquiescence
applies when a plaintiff knowingly fails to object to an infringement of her rights by a
defendant who is acting unknowingly and without malice.
29
Equitable defense equitable estoppel
uitable Estoppel: six elements must be met:
(1) The first person misrepresented or concealed material facts;
(2) The first person knew at the time he made the representations that they were untrue;
(3) The second person, which is the party claiming estoppel, did not know that the representations
were untrue when they were made and acted upon;
(4) The first person intended or reasonably expected that the second person would act upon the
representations;
(5) The second person reasonably relied upon the representations in good faith to her detriment; and
(6) The second person would be prejudiced by reliance on the representations if the first person is
permitted to deny the representations’ truth.
30
Equitable defense statute of frauds
contracts that fall within the statute of frauds are unenforceable unless evidenced
by a writing that (1) is signed by the party against whom enforcement is sought, and (2) contains the essential terms of the deal. However, if good-faith partial performance has been rendered, the oral contract may be enforced through specific performance or the plaintiff may be entitled to recover reliance damages, or restitutionary damages under quasi-contract theories
31
SOF applies to MYLEGS
1) Contracts pertaining to interests in land;
(2) Contracts that cannot be fully performed within a year;
(3) Promises by executors or administrators to personally pay the estate’s debts;
(4) Contracts in which a person (the surety) has promised to pay the debts of another;
(5) Contracts made in consideration of marriage; and
(6) Contracts for the sale of goods for $500 or more.
32
Mutual mistake -equitable defense
: a belief shared by both parties that differs from the facts existing before or at the time
the contract is executed. The belief must be one about an existing fact, not a mistaken opinion or belief
about future events. A contract may be voidable by the disadvantaged party if:
(1) The mistake concerns a basic assumption (relates to material fact/subject matter of K) on which the contract was formed;
(2) The mistake will have a material impact on the parties’ performances; and
(3) The disadvantaged party did not bear the risk of the mistake.
Bearing risk of mistake: where person either (1) has greater knowledge of relevant facts OR (2) realizes they do not have the knowledge but still proceeds with the transaction.
Mistake as to value of item is NOT enough.
33
unilateral misunderstanding is NOT a defense
If one party has reason to know the other party attached a different meaning, the court will find there IS mutual assent and no defense. Ambiguious language will be interpreted per meaning attached by unknowing party.
34
Contract defense parol evidence rule
when ther eis a final, written agreement, court shouldn't consider extrinsic evidence CONTRADICTING written agreements when determine K terms BUT MAY consider extrinsic evidence of a prior agreement to establish FRAUD OR MISTAKE.
35
Unilateral mistake
an incorrect belief, held by only one of the parties, about an existing fact that
affects the exchange between the parties. A contract is voidable at the mistaken party’s option if:
(1) The mistake concerns a basic assumption on which the contract was formed;
(2) The mistake will have a material impact on the parties’ performances; and
(3) The advantaged party either caused the mistake or knew or had reason to know of the mistake;
or the mistake makes the contract unconscionable
36
Misunderstanding defense where there is no mutual assent
no manifestation of mutual assent occurs if a material term of an agreement is
ambiguous, the parties attach different meanings to the term, and either:
(1) Neither party knows or has reason to know of the meaning attached by the other party; or
(2) Both parties know or have reason to know of the meaning attached by the other party.
* Waiver: a party may waive its misunderstanding and choose to enforce the contract according
to the other party’s understanding.
37
Equitable defense fraudulent misrep
: a party may avoid a contract if the party justifiably relied on a
fraudulent misrepresentation of the other party. A misrepresentation is fraudulent if it was made with the
intent to induce the other party’s assent, and the party making the assertion:
(1) Knew or believed that the assertion was untrue;
(2) Stated or implied confidence that the assertion was true, while knowing that such confidence
was unfounded; or
(3) Knew that there was no proper basis on which to make the assertion.
Makes K VOIDABLE
38
Equitable defense material misrep
a party may avoid a contract
based on purposeful concealment or based on one of the nondisclosure circumstances listed
below, if the party justifiably relied in good faith on a concealed or nondisclosed material fact.
o Nondisclosure: may be deemed equivalent to a misrepresentation when disclosure:
(1) Would prevent a prior statement from being a misrepresentation or fraud;
(2) Would correct the other party’s mistake about a basic assumption of the contract;
(3) Would correct a mistake about the contents of a writing that forms part of the contract;
or
(4) Is required because of a relationship of trust and confidence.
Makes K voidable
39
Seller's duties in real estate sales
sellers have certain duties to disclose that commonly arise in real estate sales. These duties include:the duty to respond truthfully to a question asking about a potential defect;
the duty to make a full disclosure after making a partial disclosure, where failure to do so would result in a misrepresentation; and
the duty to correct a prior unknowing false statement, i.e., a false statement that the seller believed to be true when it was made.
Statute may ALSO impose duty to disclose.
40
Equitable defense Unconsionability
Makes K voidable. a contract or contract term is unconscionable when it is extremely unjust or
overwhelmingly one-sided in favor of the party with superior bargaining power so that no reasonable
person would have agreed to it.
* Procedural Unconscionability: relates to unequal power in the bargaining process.
* Substantive Unconscionability: relates to unfairness of the contract’s terms.
* Sliding Scale: courts may require less evidence of procedural unconscionability if there is
more evidence of substantive unconscionability, and vice versa
41
Threshold for establishing entitlement to K breach damages
(1) causation - breach caused loss; (2) foreseeabilty - loss was reasonably foreseeable or w/n breaching party's contemplation when K was formed; (3) certainty - P must prove with reasonable certainty both that the loss occurred AND amount of loss; (4) unavoidability duty to mitigate - nonbreaching party CANNOT win damages for losses that could have been avoided e.g. take reasonable steps to mitigate.
42
Legal remedies in K
Primary: Liquidated damages, expectation damages, reliance damages, nominal damages. Exclusive of e/o.
Secondary - consequential, incidental, punitive (never unless bad faith breach), attorney's fees
UCC damages - buyer's/seller's expectation damages (market damages), buyer's cover, seller's resale, lost volume seller, breach of warranty, consequential damages, incidental damages
43
Liquidated damages remedy for K
: clauses are enforced if reasonable; courts consider several factors in
determining reasonableness, including:
(1) The difficulty of estimating or proving the harm caused by breach; and
(2) Whether the liquidated damages clause is a reasonable forecast of that harm (or a penalty
44
K expectation damages
: put the nonbreaching party in the economic position it would have
enjoyed if the contract had been performed.
o Common Law Calculation: expectation damages = losses in value caused by the breach +
gains prevented by the breach – savings resulting from not having to perform.
o Partial Performance: if the plaintiff partially performed and incurred expenses at the time
the defendant breached the contract, the plaintiff will first recover the plaintiff’s expenses
and then receives the expected profit under the contract.
o Defective or Unfinished Construction: the aggrieved party may recover damages based on
(1) the diminution in the property’s market price caused by the breach (i.e., the difference
between the land’s value with the proper performance and the land’s value with the defective
performance), or (2) the cost to complete performance or to remedy the defects, unless the
cost is clearly disproportionate to the loss in value caused by the breach (i.e., the cost of
repair will cause economic waste).
o Lost-Volume Sellers: are contractors who can do multiple jobs at a time; in these cases, the
party is not required to offset the amount they received from subsequent contracts because
the party could have and would have performed both contracts but for the breach.
45
K damages - reliance damages
represent the amount that would put the nonbreaching party in the position
that party was in before entering the contract. Reliance damages may include direct expenses incurred
in part performance or preparing to perform as well as foreseeable collateral expenses incurred.
o Reasonableness: reliance damages will be awarded only to the extent they are reasonable
under the circumstances (i.e., not disproportionately high in comparison to the value of
the contract at issue or incurred after it appeared that the other party had breached
46
K breach primary remedy seocndary remedy
: are minimal awards (e.g., $1) that are granted when there is no
compensable harm caused by the breach. The award of nominal damages might enable the
claimant to seek other types of statutory damages, such as attorney’s fees.
47
K breach secondary remedy - consequential damages
: are a type of special damages that are caused by a breach
of contract but that do not directly flow from the breach and may be awarded only to a
nonbreaching party who seeks expectation damages. They are not available to parties who
seek reliance or restitution damages
48
K breach secondary remedy incidental damages
other expenses incurred by the nonbreaching party as a result of
another party’s breach. Often these expenses are incurred to mitigate the harm caused by the breach or to protect the claimant’s or other party’s interests. MUST BE REASONABLE
49
K breach secondary remedy punitive damages
: are almost never awarded in breach of contract actions. When they
are awarded, the defendant has generally engaged in breach of a fiduciary duty, fraud/
misrepresentation, or another tort, and evidence has been introduced showing the defendant’s
fraud, bad faith, or reckless indifference to the rights of others. A breach that might lead to a
punitive damages award is known as a bad-faith breach.
50
Breach of K secondary remedies Atty fees - not recoverable
not recoverable by the prevailing party in a breach-of-contract action
unless the contract or an applicable statute provides for their recovery.
51
UCC damages if K involves sale of goods. Buyer's expectation (market damages)
the difference between the market
price of the goods and the contract price at the time the buyer received notice of the seller’s breach.
This assumes the market price is higher than the contract price for which the buyer bargained. DEFAULT
52
Incidental damages
Incidental damages:(1) the costs to obtain substitute performance, (2) additional advertising/marketing costs, and/or (3) storage costs for items that were subject to the contract
53
Damages when owner breaches after construction contractor fully performed
expectaiton damages for full K price
54
Damages when owner bareaches before construction work starts
K expectation damages = K price - expenses saved from noncompletion + consequential damages - any other expenses saved. (often includes profits if winning K).
55
Damages when owner breaches after contractor did partial work
expectation damages - full K price - amounts or expenses saved and minus any value recovered by selling materials.
OR amount contractor spent in performing + expected profit.
56
Damages when owner breaches and contractor is lost-volume seller
entitled to FULL amount of K WITHOUT offset for another K IF they can prove the second K is NOT mitigation bc it could have and would have been performed two Ks but for breach.
57
Damages for nonperformance when contractor breaches
The owner’s damages for a contractor/service provider's breach of contract are calculated using this formula: Owner’s damages upon contractor’s nonperformance = fair market value of performance (to obtain services elsewhere) – unpaid portion of contract price + consequential damages – benefits received and expenses saved by owner.
58
Damages when contractor provides defective performance
CA uses cost of repair and SOMETIMES award diminution in value if awarding cost of repair causes economic waste. D bears burden to establish that awarding cost of repair would be so economically wasteful that it warrants diminution value instead. Consequential damages are ADDED and benefits received/expenses saved SUBTRACTED.
59
UCC SEller's expectation damages (market damages)
: the difference between the contract
price, which is the amount the seller expected to receive for the goods, and the fair market value of
the goods at the time the seller tendered the goods. This assumes the seller would have received a
good deal under the contract because the market price is lower than the contract price.
60
UCC BUyer's cover (not required)
if the buyer covers by purchasing the goods from another seller, the measures
of damages will be the difference between what the buyer paid for the substitute goods and
the contract price. A court will only award cover damages if:
(1) The buyer has rightfully rejected or revoked acceptance of the delivered goods;
(2) The buyer has made a good faith purchase of substitute goods; and
(3) The buyer made the purchase without unreasonable delay
61
UCC Seller's resale (optional)
if the seller resells the good in good faith and in a commercially reasonable
manner after giving notice to the buyer, the seller will receive the difference between the
contract price and the resale price.
62
UCC lost volume seller damages
if the seller resells and the seller is a lost-volume seller (i.e., a seller who
could have made both sales because the seller carried sufficient volume of the good), then the seller would be entitled to the lost profits from the breached sale, which is calculated as the difference between the contract price and the seller’s costs of acquiring or producing the good
63
UCC breach of warranty damages
: the difference, at the time and place of acceptance, between the
value of the goods accepted and the value the goods would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount.
64
UCC Consequential damages
only a buyer can recover consequential damages resulting from a
seller’s breach. The UCC generally does not permit sellers to recover consequential damages. By
agreement, the parties may limit or exclude consequential damages unless doing so is unconscionable.
Includes
loss from buyer's requirements
or needs for goods that seller
had a reson to know and coudl
not have been reasonably
prevented, injuries to persons or
property proximately resulting
from seller breach of
warranty.
Parties may exclude consequential
damages in the K unless
unconsionable. Presumed
uncionsionable where personal
injury resulted from
consumer goods.
65
UCC incidental damages
available to buyer and seller. expenses incurred by
nonbreaching
party as result of breach:
inspecting, receiving,
transporting
goods and/or expenses for
care and custody of goods.
Seller can recover
incidental damages when
buyer WRONGFULLY
rejects goods.
66
Torts Legal remedies
Compensatory damages: personal injury (pain and suffering/medical expenses/lost earnings/diminshed earning capacity; damages to property; fraud
Punitive damages
Nominal damages
67
Torts personal injury damages.
Compensatory damages are awarded to make the inured party whole. Personal injury damages account for inflation and future expenses.
Calculation: general damages (p/s) + special damages (medical expenses/lostincome) - present value adjustment for inflation
Pain and Suffering: are intended to compensate a party for any form of conscious
suffering caused by another’s tort (e.g., the impairment or loss of any physical abilities,
the emotional distress caused by fear, anxiety, depression, or humiliation; or the loss
of freedom). There is a presumption that pain and suffering is a natural consequence
of bodily injury, but the extent and monetary value of pain and suffering is determined
independently by the jury based on the circumstances.
o Medical Expenses: can include past, ongoing, and future medical expenses that are a result of an injury suffered because of the defendant’s actions. Must plead with particularity.
o Lost Earnings/Diminished Earning Capacity: these are alternative remedies and represent the
amount of wages and other fringe benefits that the plaintiff would have received if the injury never occurred. Damages for lost earning capacity may be recovered even if the plaintiff did
not have any actual earnings at the time of the injury.
68
Damages to property calculation
here are two tests used to measure the harm caused to property:
(1) diminution in value of the property (i.e., difference between the value of the property before
the injury and the value of the property after the injury) and (2) the cost to repair or replace the
property. CA courts usually award the lesser of the two calculations.
69
DTort remedy damages to property - destroyed personal property
when property is completely destroyed, the injured party will
receive the property’s fair market value at the time of its destruction minus the scrap or
salvage value. The fair market value is the amount a willing, knowledgeable buyer would have paid a willing, knowledgeable seller for the property before the injury occurred, at the time and place the injury occurred. if repair cost is disproportionately high, court may award nothing
70
Lost earnings damages - tort legal damages - personal injury
Lost earnings represent that amount of wages and other fringe benefits that the plaintiff would have received but for the injury suffered due to the defendans tort.
71
Tort legal remedies - personal injury - lost/diminsihed earning capacity
: Damages for lost or diminished earning capacity compensate a plaintiff for an anticipated loss of future income. DIMINISHED: amount P Would have earned but for injury. Earning capacity before and after injury - any expenses P saved bc of injury. Usually saught with permanent injuries. Considers education, age, experience, talents, general health, physical capacity.
diminished earning capacity = earning capacity before injury - earning capacity after injury - expenses saved from injury.
72
Tort legal remedies for damaged property alternative measures
f there is no fair market value, the court uses the value of
the item to the owner. The owner must produce some evidence that allows the court
to determine a fair value with certainty. The court will consider the cost of the item
when new, the item’s condition and age, the item’s time in use, and the expense of
replacing the item with a similar one, but will not consider any sentimental value the
owner may attach to the item
73
Compensatory damages for lost/destroyed personal property Torts
= property’s fair market value at time of its destruction – scrap value + ensuing loss (special damages, loss of use, and fair compensation for time and money expended in pursuit of the property, if applicable).
74
damaged personal property compensatory damages
diminution in value or repair cost +ensuing loss (loss of use) - damages reasonably avoided.
75
Tort property damages loss of use
to recover for loss of use, the property owner must show that the property
owner both needed the property and was prevented from using it by the defendant’s
wrongful action. The measurement is either the rental cost for a temporary replacement
until a permanent replacement property is obtained, or the rental value that would be
charged for the personal property taken or destroyed.
76
Tort property damages lost profits
o recover for lost profits, the property owner must prove the personal property
was used to generate income and that the property owner suffered loss of profits produced
by the destroyed or converted property. To measure lost profits, a court will consider
all factors relevant to the likelihood of the success or lack of success of the business or
transaction that are reasonably provable, including general business conditions, the degree
of success of similar transactions, expert testimony, business records, market surveys, etc.
77
Tort damages to lost property -
he injured party will receive the lesser of (1) the diminution
in the property’s fair market value or (2) the reasonable cost to repair the damage and
restore the property to its condition before the wrongful act. Plus lost use
78
Tort possessory invasions
if a defendant violates a landowner’s right to exclusively possess
the landowner’s land, the landowner may seek the full array of damages available,
including equitable (e.g., injunctions when the violation is continuous), restitutionary (e.g.,
ejectment), and legal remedies (e.g., compensatory, nominal damages).
79
Invasion of right to use and enjoy property remedy
: legal remedies available depend on whether
damages are permanent or temporary. Where harm is permanent, damages are calculated
by the difference in the fair market value of land before and after the injury. Where harm is
temporary, the cost of repair or the diminished rental value is the appropriate measure.
– Permanent: where the cost of restoring or repairing the real property to its original
condition exceeds the diminution in the value of the property caused by the harm, or there
is simply no way to control or remedy the problem, or where an injunction is not feasible.
– Temporary: where the harm can be remedied or abated
80
Tort remedy for fraud
: a party injured by the fraud of another may recover the difference between the actual
value of that with which the defrauded person parted and the actual value of that which the
defrauded person received. The party also may recover any additional damages arising from
the particular transaction, such as:
(1) Amounts actually and reasonably expended in reliance upon the fraud;
(2) Compensation for loss of use and enjoyment of property proximately caused by the fraud;
or
(3) Lost profits or other gains that might reasonably have been earned by use of the property
81
Additional tort remedies
ental value:amount individual could have obtained by renting the property OR amount it would cost to rent property of like kind. Court may consider frequqency and timeframe of property's use before loss.
Fair market value measurement - Consider time and place of injury - time is immediately before property is taken or destroyed. MAY be demand date if it is for conversion and D refuses to return property after a demand.
If value fluctuates, P may recover highest market value of property btwn conversion/destruction and time of trial PLUS interest if P acted with reasonable diligence in bringin action.
Place of injury - nearest market to locaiton where harm occurred. IF nearest market is NOT in P's locality, have to deduct cost of transportation to market from the value.
82
Real property repair costs that exceed loss in value of real property
may be recovered, provided that (1) the plaintiff has a personal reason to restore the real property to its former condition, and (2) the repair costs are reasonable in light of the property’s value before the injury and the actual damage sustained
83
Real property compensatory dmages
tort differential OR reasonable repair cost + consequential/special damages (loss of use)
84
Remedy for conversion/forced sale
- conversion is a forced sale and P can recover damages EQUAL to the converted property's FMV at time of taking. What a buyer offers can be used as evidence of FMV. Owner must also be able to collect loss of use of car to extent it takes time obtain a replacement.
there is NO FMV because of personal/sentimental value - courts use Alternative methods - cost to replace/reproduce/value to owner as substituion but still no sentimental value.
85
Tort remedy punitive damages
where the tortious conduct is particularly egregious, punitive damages may be
warranted and issued in addition to compensatory or nominal damages. In CA, a plaintiff may recover
punitive damages if the plaintiff proves, with clear and convincing evidence, that the defendant acted
with malice, oppression, or fraud. To measure the value of punitive damages, the court looks at several
factors to ensure the award is not excessive to the point that it violates the due process clause of the 14th
Amendment. Some of these factors include:
(1) The nature and reprehensibility of the defendant’s conduct;
(2) The defendant’s net wealth;
(3) The relationship between the actual harm and the amount of punitive damages;
(4) The seriousness of the harm resulting from the misconduct;
(5) The defendant’s awareness that such harm would result;
(6) The duration of the misconduct, the defendant’s conduct upon discovery of the misconduct, and
any efforts to conceal the misconduct;
(7) The profitability of the defendant’s misconduct;
(8) The total deterrent effect of other damages and punishments imposed upon the defendant; and
(9) The difference between the punitive damages award and the civil penalties authorized or
imposed in comparable cases
86
Tort damages -nominal damages
: are damages in name only and are imposed when the injury is slight or
imperceptible. The award of nominal damages might enable the claimant to seek other types of statutory
damages, such as punitive damages and attorney’s fees.
87
14A due process clause effect on punitive damages
A court reviewing a punitive damage award must consider (1) the degree of reprehensibility of the defendant’s conduct; (2) the disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award, and (3) the difference between the punitive damages award and the civil penalties authorized or imposed in comparable cases.
88
Real property posessory remedies
restitutionary - ejectment actionto
remove from property OR
return value of any property
taken by trespasser who severed
(took things attached to the land).
If severed property has its own
value, the amount is returned
in addition to other damages.
89
Limitations on tort remedies
: the injured party must establish four things to recover damages:
(1) Causation: the plaintiff must prove that the defendant’s breach caused the loss; for torts, both
actual and proximate causation must be proven.
(2) Foreseeability: the loss must have been reasonably foreseeable or within the breaching
party’s contemplation when the contract was formed; for torts, only the type of loss must be
reasonably foreseeable but the defendant will be held liable for all the harm that reasonably
and naturally flows from or follows the defendant’s wrongful act, regardless of whether the
extent of harm was actually contemplated.
(3) Certainty: the plaintiff must prove with reasonable certainty that the loss occurred and the
amount of the loss.
(4) Unavoidability (Duty to Mitigate): a party cannot win damages for losses that could have
been avoided (i.e., the party must make reasonable and timely efforts to mitigate damages).
90
REmedy for trespass
If trespass is significant
compensatory damges =
rental value of land for time
that land is wrongfully possessed
Trespass hurting business = consequential damages. If trespass denied P entrance to property = punitive.
If encroachment is permanent = reduction in value of P's land. Temporary encroachment = cost to remove encroachment AND restore land to previous condition + value of any loss of use.
Collateral Source Rule: states that a defendant does not get credit toward the damages if a portion
of those damages has been paid by a collateral source (e.g., an insurance company or the state).
Economic Loss Rule: precludes recovery in negligence for economic losses in the absence of physical
harm to persons or property. This rule only applies in tort cases and does not apply to intentional torts. Economic loss is considered either (1) damage to a product, or (2) other loss that does not cause
personal injury or damage to another’s property.
91
Limit on damages for pure economic loss
Regular torts/ strict liability - NO damages for pure economic loss
CAN get pure econmic damages for intentional torts or CONTRACT warranty claim
92
Quantum meruit (restitution)
under CL, reqs (1) P
performed services; (2)
at D's request; (3) services
conferred benefit on D.
Recovery = what D
unjustly gained. (usually
value of services rendered
or property conveyed to
another).
common volunteer
restitution exceptions:
(1) a doctor rendering emergency medical services, (2) emergency treatment for a child, and (3) emergency treatment for a pet.
93
Restitutionary requirements
the moving party must show (1) a benefit conferred on another (2)
at the plaintiff’s expense (3) that, in fairness, belongs to the plaintiff, or that would be inequitable for the
defendant to retain.
* Benefit Obtained at the Plaintiff’s Expense: can be tangible or intangible and could
have been received (1) intentionally or (2) by mistake, such as a plaintiff’s accidental payment.
* Unjust Enrichment: courts look closely at whether retention of the benefit would be unjust.
o Gifts: if the benefit is a gift, there is no unjust enrichment.
o Volunteers: restitution is not available to one who has provided a benefit to another
gratuitously unless:
(1) The party who received the benefit from a volunteer had a meaningful choice about
whether to receive it, or the volunteer conferred an unrequested benefit in an emergency;
(2) The goods or services were necessary to prevent serious bodily harm or pain;
(3) The volunteer intended to charge for the goods or services;
(4) The volunteer did not have a reason to know that the recipient or the recipient’s
representative would not consent to receipt of the goods or services; and
(5) Consent by the recipient was impossible due to unconsciousness or other incapacity
94
Valuing restitution
usually uses an objective market value to determine the monetary value of the defendant’s benefit (i.e., determined by reference to what third parties
would pay for it in the hands of the defendant). May also include property rental value
o Subjective Value: a court will use a subjective measure, such as what the defendant
herself gained from retaining the benefit, when there is some culpability on the part of the defendant in obtaining the benefit.
95
Legal restitutionary remedies - replevin
a plaintiff must show that the plaintiff has legal title to the property. If successful, a
sheriff will seize the property and give it back to the plaintiff and the plaintiff can recover loss of use damages, if applicable.
96
What plaintiff must prove in a fraudulent misrepresentation claim in California
the defendant represented to the plaintiff that an important fact was true;
that representation was false;
the defendant knew that the representation was false when the defendant made it, or the defendant made the representation recklessly and without regard for its truth;
the defendant intended that the plaintiff rely on the representation;
the plaintiff reasonably relied on the representation;
the plaintiff was harmed; and
the plaintiff’s reliance on the defendant’s representation was a substantial factor in causing the plaintiff’s harm.
97
Legal restitutionary remedy ejectment
plaintiff must establish rightful title to the land and the right to immediate
possession. A judgment will order the sheriff to exercise discretion to take possession of the
property by ousting the defendant and returning possession to the plaintiff.
o Improvements to Land: a defendant that has deprived a plaintiff of rightful possession
cannot recover compensation for any improvements made to the land by the defendant
during the time of wrongful possession. However, if the plaintiff seeks monetary damages in addition to possession, a good-faith defendant may be entitled to a credit for the value of such improvements.
o Summary Ejectment: also known as an unlawful detainer or eviction action, allows a
landlord to regain possession of the premises from a tenant who has failed to pay rent.
98
Legal restitutionary remedies - quasi contract/quantum meruit
1) The plaintiff performed certain services for the defendant that were not gratuitous;
(2) Those services were rendered at the defendant’s request; and
(3) Those services conferred a benefit on the defendant (and it would be unjust for the
defendant to retain a benefit without compensating the plaintiff who conferred it).
Recovery = what D unjustly gained. (usually value of services rendered or property conveyed to
another)
99
UCC restitutionary remedies
a buyer may recover restitution (any deposit paid) and other damages in two circumstances:
(1) Where a seller fails to make delivery, repudiates the contract, or breaches and this occurs before the buyer accepts the goods; or
(2) Where the buyer rightfully rejects the goods or justifiably revokes acceptance.
o Breaching Buyer: if there is no agreed-upon liquidated damages clause between the parties, then the buyer’s restitution will be reduced by either 20% of the value of the
buyer’s total performance under the contract or $500, whichever is smaller. It also will be
reduced by the seller’s right to recover other damages, as well as by any benefits received
by the buyer under the contract.
100
Equitable restitutionary remedies
Restitution of property/certain sum of money requires moving party to show
1) Unjust enrichment;
(2) A res, which means there is an identifiable piece of property or sum of money; and
(3) Traceability (i.e., allows a plaintiff to follow the plaintiff’s property into its substituted form).
Restitution of traced property can be asserted against the wrongdoer or against a third party
holding the substituted property unless the third party is a bona fide purchaser.
101
Constructive trusts
may be imposed if:
(1) There is a res comprised of property or some interest (possessory is sufficient) in property;
(2) The plaintiff has a legal right to the res; and
(3) The defendant wrongfully acquired or detained the res and does not rightfully hold legal
title to it.
Inadequate Remedy at Law: some jurisdictions require that legal remedies be inadequate
before imposing a constructive trust, but this is NOT required in CA.
o Result: a plaintiff receives ownership of the ENTIRE asset, or whatever substitute form the
property has become using tracing, including any increases or decreases in its value
102
UCC seller breach gives buyer security interest
The buyer also has a security interest in any goods in his possession for payments made and expenses reasonably incurred (e.g., for inspection or transportation) and may hold such goods and resell them as would an aggrieved seller. Note, however, that subject to any security interest of the buyer, when the seller has no agent or place of business in the market for rejected perishable goods or goods subject to quick devaluation, a merchant buyer who rejected the goods must make reasonable efforts to sell them for the seller’s account (unless the seller provides reasonable instructions). Instructions are not reasonable if the seller does not provide indemnity for expenses when demanded
103
Uses for constructive trust (when property appreciates)
constructive trust used where D acquired title to property through actual/constructive fraud, mistake, coercion, undue influence, duress, embezzlement, conversion, misuse/misappropriation of infor, uncisionable, infringement of copyright OR violation of fiduciary duty
BEST where property appreciated
104
Quasi contract
no legally enforceable K but D would be unjustly enriched. law implies a promise to pay for services rendered and accepted, so when a party performs valuable services for another, the law raises an implied promise to pay a reasonable compensation for the services unless performed gratutiously.
105
Implied in fact contract
legally enforceable contract, which requires mutual assent and consideration, based on circumstantial evidence of the parties’ intent to enter into a contract. Another distinction is that, where a suit under a quasi-contract seeks to restore the aggrieved party to its former position by return of the benefit (or payment for its equivalent value), a suit for breach of an implied-in-fact contract allows the aggrieved party to seek enforcement of or recover damages under the implied contract.
106
Equitable lien
: the requirements are the same as for a constructive trust. The major
differences between an equitable lien and a constructive trust are:
(1) An equitable lien is a security lien on the property that is satisfied when the property is
sold either voluntarily by the property owner, or by forced sale or foreclosure; and
(2) If the value of the property is not enough to cover the amount of money unjustly taken
from the plaintiff, the plaintiff can get a deficiency judgment against the defendant for the
remaining amount.
o Priority: an equitable lien is a stronger remedy than a judgment lien because an equitable
lienholder will have priority over other general creditors.
107
Purchase money resulting trust - use when real property is taken in name of a person who did not furnish the money for the purchase
ay be imposed if:
(1) There was a transfer of property to a person other than the purchaser.
(2) The purchaser intended that a resulting trust arise (i.e., the purchaser did not intend that the
person holding title to the property would become the sole owner of the property).
(3) The person holding title is not a natural object of the purchaser’s purchase (i.e., there is no
presumption of a gift, as from the purchaser to the purchaser’s child or spouse).
108
Subrogation
ermits a party who has been required to satisfy a loss created by a third
party’s wrongful act to step into the shoes of the injured party and recover directly from the
wrongdoer. It is permitted where:
(1) The subrogee paid to protect its own interest;
(2) The subrogee was not acting as a volunteer;
(3) The subrogee was not primarily liable for the debt;
(4) The entire debt was paid; and
(5) Subrogation does not cause any injustice to the rights of others.
o Derivative Rights: the subrogee’s (i.e., the payer’s) rights are the same as and cannot
exceed the rights available to the subrogor (i.e., the original party to the obligation).
109
Defenses to restitutionary remedies - BFP, Change in position, volunteer
Bona Fide Purchaser: the person who holds the equitable interest is precluded from enforcing that
interest against a bona fide purchaser (i.e., a third party who has acquired legal title to the property for
value and without notice).
Change in Position: courts may deny restitution where a defendant has changed position detrimentally such that holding the defendant liable for restitution would be inequitable. The change-in-position defense
works only where the defendant has not acted tortiously and is not at fault in bringing about the changed
position.
Volunteer: restitution is not available to volunteers (i.e., people who have officiously conferred a benefit on an unwilling defendant who had no choice in its acceptance).
110
CA fraudulatn misrep damages calculation
California follows the minority rule that awards damages based on an out-of-pocket measure where an individual is defrauded in the purchase, sale, or exchange of property by another who is not a fiduciary. The out-of-pocket measure of damages is directed to restoring the plaintiff to the financial position he enjoyed before the fraudulent transaction. It awards the difference in the actual value at the time of the transaction between what the plaintiff gave and what he received.
California’s formula is stated as follows: Out-of-pocket damages for fraudulent misrepresentation in a land sale contract = contract price – fair market value + consequential and incidental loss – expenses avoided.
Negligent misrep-seldom tested. Use out-of-pocket damages. difference between the value the plaintiff received and the purchase price or value
111
Specific performance essay test tips
Plaintiff must first show (1) a valid contract, (2) all conditions have been met and plaintiff has performed (or is ready to perform) under the contract, (3) the legal remedy is inadequate, (4) it is feasible for a court to enter a decree for specific performance, and (5) the defendant does not have any defenses. Examinees should briefly discuss each of these five things.
112
Test day reminders - these always come up
For example, damages must be foreseeable and not speculative. The plaintiff must mitigate damages. And punitive damages are not appropriate in negligence cases.
Equitable lien and constructive trust are tested TOGETHER
