Remedies - Bar Review

Question 1

Tort remedies

Answer 1

Actual damages, nominal damages, punitive damages, incidental damages, replevin, ejectment, constructive trust, equitable liens, temporary restraining orders, preliminary injunctions, and permanent injunctions.

Question 2

Contract remedies

Answer 2

Expectation, consequential, incidental, liquated, replevin, money restitution, recission, reformation, and specific performance. Normally punitive damages are not applicable in contract law and require that malice be shown, and a separate action eligible for punitive damages.

Question 3

Compensatory damages

Answer 3

Designed to compensate the plaintiff for their contractual damages and include both expectation and consequential damages. To receive compensatory damages, they must have been: 1) Foreseeable; 2) Causal; 3) Certain; 4) Unavoidable; and 5) May not be awarded if there is a failure to mitigate.

Question 4

Expectation damages

Answer 4

All expected profits or costs that would have been realized if the contract was fully performed by the breaching party. They place the non-breaching party in the position they would have been in if the contract was fully performed.

Question 5

Consequential damages

Answer 5

Stem directly from the breach, are foreseeable, and certain. E.g., lost salary while recovering from a car accident.

Question 6

Reliance damages

Answer 6

If expectation damages are too speculative or uncertain, the plaintiff may elect to recover based on their reasonable reliance on the contract. They award the plaintiff the cost of performance and are designed to put the plaintiff in the position they would have been in had the contract never been made.

Question 7

Liquidated damages

Answer 7

Specified within the written agreement, must be difficult to estimate and will not be enforced if used as a penalty for non-performance.

Question 8

Incidental damages

Answer 8

Smaller, reasonable costs that stem directly from the breach. E.g., Cost of placing an advertisement in Autotrader when the first buyer fails to perform.

Question 9

Nominal damages

Answer 9

Recoverable when no actual injury is sustained, however if actual injury is a required element of the claim, nominal damages are not available.

Question 10

Punitive damages

Answer 10

May be awarded if clear and convincing evidence establishes that the defendant acted willfully, wantonly, recklessly, or with malice. Not generally available in contract actions.

Question 11

Restitution

Answer 11

A legal remedy that protects against another party’s unjust enrichment. It restores a benefit conferred on the other party to a contract, or makes whole the victim of fraud.

Question 12

Replevin

Answer 12

Equitable remedy that permits the plaintiff’s recovery, before trial, possession of a chattel wrongfully taken or detained. The person seeking replevin must be the rightful owner of the property prior to the defendant’s possession.

Question 13

Ejectment

Answer 13

Legal remedy to remove a person in possession of real property and return proper possession to plaintiff who was wrongfully ousted.

Question 14

Reformation

Answer 14

A court may reform a contract to match the contracting parties’ intentions at formation. Usually only available if there was a misrepresentation or mutual mistake that requires correction. E.g., to correct a scrivener’s error or when analyzing parol evidence.

Question 15

Rescission

Answer 15

Treats the contract as cancelled due to defects in formation. E.g., fraud, misrepresentation, unclean hands, laches.

Question 16

Specific performance

Answer 16

A court may order a party to perform a contract when there is: 1) A valid contract with certain terms; 2) No adequate legal remedy; 3) Feasible enforcement; 4) Mutuality of performance; and 5) No valid defenses.

Question 17

Inadequate legal remedies

Answer 17

When evaluating specific performance, legal damages are inadequate if they are speculative, the defendant is insolvent, or if the bargained-for item is unique.

Question 18

Feasible enforcement

Answer 18

A court will not specifically enforce a promise if enforcement imposes a burden on the court that is disproportionate to the advantages gained from enforcement.

Question 19

Mutuality of performance

Answer 19

The aggrieved party must show it is prepared to perform on the contract. E.g., a real property purchaser who sues for specific performance but buys a different house during litigation may not have the money to perform any longer.

Question 20

Specific performance unfairness

Answer 20

Specific performance will not be granted if such relief would be unfair. Factors include defenses, hardship, inadequate consideration, and unconscionability.

Question 21

Mitigation of damages

Answer 21

A plaintiff is required to make best efforts to mitigate damages. If not, their damages may be reduced due to their failure to act. A plaintiff is not required to mitigate unless damages could have been avoided without undue risk, burden, or humiliation.

Question 22

Temporary restraining order

Answer 22

An equitable remedy used in an emergency to maintain the status quo until the court can hear the case. Last for 10 days in state courts and 14 in federal, but can be extended. The moving party must show a likelihood of success on the merits, imminent irreparable harm, and provide a bond to prevent damage to the non-movant should the court rule in the non-movant’s favor. Notice should be provided to the non-moving party. However, a TRO can be granted ex parte if necessary.

Question 23

Preliminary injunction

Answer 23

Ensures the status quo after a TRO hearing an until the conclusion of litigation. The moving party must show a likelihood of success on the merits, a likelihood of irreparable harm, a balancing of hardships in favor of the movant, and provide a bond should the case fail. Unlike a TRO, notice is required. See Winter v. Natural Resource Defense Council (2008).

Question 24

Permanent injunction

Answer 24

A permanent court order which requires a person to do something or refrain from doing something at completion of trial. It is appropriate where there is an inadequate remedy at law, it concerns a property interest, there is feasibility of enforcement, and a balancing of hardships.

Question 25

Constructive trust

Answer 25

An equitable remedy where the court will require a defendant to hold wrongfully acquired property in trust, and if later ordered by the court, to return it to the plaintiff. Preferred by a plaintiff when the property goes up in value. Money is also property for purposes of a constructive trust.

Question 26

Equitable lien

Answer 26

Forces a sale of property wrongfully held by a defendant with the proceeds being delivered to the plaintiff. Expecting that the proceeds will not equal the value of the property when it was illegally obtained, the plaintiff will likely seek a deficiency judgement to become whole. A plaintiff will seek this remedy when property goes down in value, constructive trust when it goes up.

Question 27

Laches

Answer 27

A plaintiff is barred from recovery when they purposefully delay bringing suit and that delay materially prejudices the defendant.

Question 28

Unclean hands

Answer 28

A plaintiff’s case will fail when they are guilty of some sort of illegal or improper conduct related to the matter of the lawsuit.

Question 29

Attachment

Answer 29

Process by which another’s property is seized in accordance with a writ or judicial order for the purpose of securing a potential judgement. Often a tool used when attempting to sue someone that may go insolvent.