South Carolina - Equity

Question 1

Five Basic Principles of Equity

Answer 1

(“FRIED”)

Equity is Remedial

Equity is Extraordinary

Equity is Discretionary

Legal Remedy Must Be Inadequate

Equitable Remedy Must Be Feasible

Question 2

Types of Injunctions

Answer 2

Mandatory Injunction: Orders a Defendant to do something

Prohibitive (Negative) Injunction: Orders a Defendant NOT to do something

Question 3

Elements of a Preliminary Injunction

Answer 3

(“bLIpS”)

Irreparable Harm

Likelihood of Success on the Merits

Injunction Bond (mandatory, except in family law cases)

Question 4

Difference between a Preliminary Injunction and a Temporary Restraining Order

Answer 4

1. Irreparable injury must be likely to occur before preliminary injunction hearing can be scheduled
2. TRO hearing can be held ex parte (w/ no notice to ∆)
3. Duration in SC is 10 days (14 days in FRCP)

Question 5

Elements of a Permanent Injunction

Answer 5

(“I Play First Base, Dummy”)

INADEQUACY OF LEGAL REMEDY (π)

PROTECTABLE INTEREST (π)

FEASIBILITY OF ENFORCEMENT (π)

BALANCE OF HARDSHIPS (∆)

DEFENSES (∆)

Question 6

PERMANENT INJUNCTION: Inadequacy of Legal Remedy

Availability

Answer 6

Inadequacy of a legal remedy (usually money damages)

1. Damages are too Speculative
2. Insolvency of ∆
3. Continuing Harm (Multiplicity of Actions)
4. Irreparable Harm

Question 7

PERMANENT INJUNCTION: Protectable Interest

Answer 7

πmust articulate a valid interest that would be protected by the injunction

Question 8

PERMANENT INJUNCTION: Feasibility of Enforcement

Answer 8

1. Power Feasibility: must have jurisdiction over the ∆ or the subject of the injunction (i.e., the property)
2. Administrative Feasibility: must be feasible–compliance with injunction can be monitored by court

Unlikely if series of acts over a period of time; or a complex act involving taste/skill

Question 9

PERMANENT INJUNCTION: Balance of Hardships

1. What should court do if balance weighs in favor of defendant
2. Other factors the court will consider in balance
3. Exception to balancing hardships

Answer 9

Defendant must demonstrate the burden of the hardship SUBSTANTIALLY OUTWEIGHS the benefit to the plaintiff.

1. Because a harm has still occurred, court should award money damages
2. A court will occasionally consider the burden to the public (public policy)
3. The court will not balance hardships if the defendant’s conduct was WILLFUL

Question 10

PERMANENT INJUNCTION: Defenses

Answer 10

Burden on ∆

If any defense is established, Court should award money damages

UNCLEAN HANDS (one who comes to equity must come with clean hands)

πhas engaged in improper conduct RELATED to the lawsuit

LACHES (equity aids the vigilant, not those who slumber on their rights)

From time when π KNOWS of injury, π’sdelay in bringing suit is both UNREASONABLE and PREJUDICIAL. Assumed if SOL has run

FREE SPEECH
If tort is DEFAMATION, TRADE LIBEL, or PRIVACY TORT, injunction should be denied based on constitutional free speech considerations

Question 11

Anti Suit Injunctions

Answer 11

Issued against parties, not courts

AVAILABILITY
Suit in forum state: suit is malicious and unfounded

Suit in foreign state: suit based on wrongfully obtained jurisdiction

Question 12

Elements of a Constructive Trust or Equitable Lien

Answer 12

• Inadequacy of a legal remedy
  1. Improperly Acquired Property
  2. ∆has title to the property

[[Defendant Improperly Acquired Title to Property]]

Question 13

What is a constructive trust

Answer 13

Defendant is forced to return the property

Question 14

What is an equitable lien

Answer 14

Defendant is forced to sell the property.

Plaintiff receives the proceeds, up to the fair market value of the property AT THE TIME IT WAS TAKEN

If proceeds are less than that value, πcan obtain a deficiency judgment

Question 15

Constructive Trusts and Equitable Liens: Tracing

Availability

If πdoesn’t have title to the whole of the property traced

Answer 15

Availability: Tracing is permitted for both

If πdoesn’t have title to the whole of the property traced: Only an equitable lien is permitted

Question 16

Constructive Trusts and Equitable Liens: Unavailability

Answer 16

1. Bona Fide Purchasers: good faith (w/o knowledge) and paid value

Money damages are still available to π

2. Constructive trusts: partially traced property (yada yada)

Question 17

SPECIFIC PERFORMANCE: Elements

Answer 17

“Vice President Is From Delaware”

Validity of Contract (π)

Performance (of Plaintiff) (π)

Inadequacy of Legal Remedy (π)

Feasibility (π)

Defenses (∆)

Question 18

SPECIFIC PERFORMANCE: Validity

Answer 18

A court will be more likely to require contract terms are SPECIFIC and CONSIDERATION IS FAIR.

Assessment is at TIME OF CONTRACT FORMATION

Question 19

SPECIFIC PERFORMANCE: Plaintiff’s Performance

Answer 19

(“one who seeks equity must do equity”)

πmust show she already performed, or

show she is ready to perform

Question 20

SPECIFIC PERFORMANCE: Plaintiff’s Performance > Time is of the Essence Clause

Answer 20

If provision is violated, specific performance is unavailable, unless

1. π’s tardiness is de minimus
2. defendant’s loss due to the tardiness is slight
3. undue hardship suffered by π
4. waiver by ∆

Question 21

SPECIFIC PERFORMANCE: Plaintiff’s Performance > Marketable Title

Answer 21

If plaintiff cannot satisfy conveying marketable title, court will not award specific performance, unless

1. Deficiency is minor (de minimus)
2. Waiver by ∆

If court awards specific performance, it will also order a reasonable reduction in price

Question 22

SPECIFIC PERFORMANCE: Inadequacy of Legal Remedy

Answer 22

No adequate legal remedy: usually, money damages are insufficient

1. Damages are too Speculative
2. Insolvency of ∆
3. Breach is Ongoing
   * 4. Subject of Contract is Unique

Question 23

SPECIFIC PERFORMANCE: Inadequacy of Legal Remedy > Uniqueness of Property

REAL PROPERTY

PERSONAL PROPERTY

Answer 23

REAL PROPERTY: always unique (both buyer and seller can get specific performance–mutuality of remedy doctrine)

PERSONAL PROPERTY: Not Unique. Exceptions:

1. Rare
2. Special Value to Buyer
3. Unique due to market circumstances (at time of litigation [[breach?]])

Question 24

SPECIFIC PERFORMANCE: Feasibility

Answer 24

1. Power Feasibility: must have jurisdiction over the ∆ or the subject of the injunction (i.e., the property)
2. Administrative Feasibility: must be feasible–compliance with injunction can be monitored by court

Unlikely if series of acts over a period of time; or a complex act involving taste/skill

Question 25

SPECIFIC PERFORMANCE: Feasibility > Personal Service Contracts General Rule Covenants Not to Compete

Answer 25

GENERAL RULE Specific Performance NOT available COVENANTS NOT TO COMPETE: enforceable by injunction, if 1. Necessary to protect legitimate interests of employer 2. Terms are reasonable wrt geography and scope/duration 3. supported by valuable consideration Court will not Blue Pencil--partially enforce a covenant in the face of an unreasonable term

Question 26

SPECIFIC PERFORMANCE: Feasibility > Land-Sale Contracts

Answer 26

Feasibility depends on having jurisdiction over the 1. The Buyer, AND either 2. The Seller OR the Land [[but if buyer is π, just need seller or the land, right?--w/e]]

Question 27

SPECIFIC PERFORMANCE: Defenses

Answer 27

Defense to Form of Remedy 1. Unclean Hands 2. Laches Defense to Availability of Remedy 3. Mistake 4. Misrepresentation 5. SOL

Question 28

RESCISSION: Definition Elements

Answer 28

DEFINITION: original contract is deemed voidable and rescinded through restitution. ELEMENTS: "Good Dog" 1. Grounds 2. Defenses

Question 29

RESCISSION: Grounds Examples of some grounds for rescission (don't memorize)

Answer 29

1. Plaintiff must show a defect relating to formation of the contract. 2. The defect must be FUNDAMENTAL and DEFEAT THE PURPOSE of the contract ``` EXAMPLES OF GROUNDS FOR RESCISSION (don't memorize) Mistake Misrepresentation Duress Fraud Undue Influence Lack of Capacity Failure of Consideration Illegality ```

Question 30

RESCISSION: Grounds > Mutual Mistake

Answer 30

Rescission available if 1. Mistake relates to a MATERIAL FACT 2. Mistake does not relate to a COLLATERAL FACT

Question 31

RESCISSION: Grounds > Unilateral Mistake General Rule Exception

Answer 31

General Rule: Rescission not available EXCEPTION Non-mistaken party KNEW or SHOULD HAVE KNOWN of mistake. EXCEPTION: Mistaken party would suffer an UNDUE HARDSHIP

Question 32

RESCISSION: Grounds > Misrepresentation

Answer 32

Rescission granted on misrepresentation if it was 1. MATERIAL, and 2. PLAINTIFF RELIED

Question 33

RESCISSION: Defenses

Answer 33

Unclean Hands Laches *Plaintiff's Negligence

Question 34

REFORMATION: Definition Elements

Answer 34

DEFINITION Court changes written agreement to conform to the original understanding of the parties ELEMENTS ("VERY GOOD DOG") 1. Validity of Contract 2. Grounds 3. Defenses

Question 35

REFORMATION: Grounds > Mutual Mistake

Answer 35

If defect in written agreement is result of mutual mistake, reformation granted if mutual mistake is shown by CLEAR AND CONVINCING EVIDENCE

Question 36

REFORMATION: Grounds > Unilateral Mistake General Rule Exception

Answer 36

If defect in written agreement is result of unilateral mistake, reformation will be denied Exception: If non-mistaken party ACTUALLY KNEW of plaintiff's mistake, reformation willb e granted.

Question 37

REFORMATION: Grounds > Misrepresentation

Answer 37

If defect in written agreement is result of misrepresentation, reformation will be granted

Question 38

REFORMATION: Defenses

Answer 38

Unclean Hands Laches Bona Fide Purchaser: Reformation not available if granting it would adversely affect the rights of a BFP

Question 39

REFORMATION: Defenses > Parol Evidence Rule

Answer 39

Parol Evidence Rule MAY NOT be invoked as a defense to reformation

Question 40

Equitable Maxims

Answer 40

(Equity "IS DREADFUL") In Personam: “equity acts in personam, not in rem” Substance: “regards substance over form” Do Equity: “One who seeks equity must do equity” Remedy: “Equity will not suffer a wrong to be without a remedy” Equality: “Equity is equality” A: “Equity Aids the Vigilant & Diligent” Do: “all courts have the inherent power TO DO all things reasonably necessary to ensure that just results are reached to the fullest extent possible” Forfeitures: “Equity disfavors forfeitures” Unclean Hands: One who comes into equity must do so with clean hands” Law: “Equity follows the law”