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Definition
| Initial Consideration: always look for remedies in this order (helpful mnemonic is DRIve)— A. Damages: money stemming from tort or breach of contract B. Restitution: either money stemming from unjust enrichment or various forms of specific restitution C. Injunction: 1. injunction for a tort: either an equitable order to refrain from doing something (negative injunction) or to do something (mandatory or affirmative injunction) 2. injunction for contract (specific performance): equitable order to perform the contract |
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Term
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Definition
Damages: the basic theory for torts damages is to look at the past. Put the plaintiff where he was before the tort occurred. 1. actual damages: these are compensatory damages. They seek to put the plaintiff back to where he was before the tort (e.g. before his arm was broken; the value of the car before the crash, etc.). Palsgraff “zone of danger” test applies. 2. nominal damages: a small or nominal amount of money available when no actual damages can be proved. 3. punitive damages: noncompensatory damages that punish and deter. You cannot get punitive damages without first getting actual or nominal damages. Intentional, outrageous, or reckless There are three elements to determine the amount of punitive damages: behavior will often be a cause for punitive damages. a. degree of wrongfulness of the conduct b. proportionality toward actual damages c. rich defendants typically pay more Note: there is a constitutional Due Process limit on punitive damages (BMW v. Gore). |
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Term
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Definition
Restitution: benefits that are unjustly retained by the defendant.
1. legal remedies:
a. money: look for the benefit to the defendant. There does not need to be any injury to the plaintiff. Plaintiff must choose between money damages and restitution (can’t collect both).
b. replevin: recovery of specific personal property
c. ejectment: recovery of specific real property (e.g. against an adverse possessor or squatter)
2. equitable remedies: note—if value of property goes up, you want a constructive trust, if the property value goes down, you want an equitable lien. Also: both are valuable for priority in bankruptcy proceedings.
a. constructive trust: an obligation to convey specific property to the plaintiff. Two requirements:
i. defendant must have title; and
ii. acquisition of the title must be traceable to the wrongdoer
b. equitable lien: security interest in specific property. Two requirements:
i. defendant must have title; and
ii. either (1) acquisition of the title must be traceable to the wrongdoer; or (2) stolen property is traceable to improvements of property already owned |
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Term
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Definition
Injunction: either a negative or affirmative injunction. Look for a breach of the legal obligation. Has the defendant committed a tort, or is he about to? Requires five elements to award an injunction (mnemonic is I Put Five Bucks Down)
1. I—inadequate: are the legal remedies inadequate? I.e.: would the damages be too small or speculative; would there be a multicplicity of damage suits; would the injury be irreparable; is there threatened injury to land?
2. P—property: is there a property right involved? (Note: both personal and real property are protected by injunctions.)
3. F—feasible: is an injunction feasible? I.e.: would it require too much court supervision; is it appropriate?
4. B—balanced: in torts, courts will balance for encroachment and nuisance cases. If it’s an intentional encroachment, there will be no balancing and the plaintiff will automatically win. Courts always balance interests in a private nuisance.
5. D—defenses: these are not defenses to the cause of action, but for the equitable remedy of an injunction.
a. laches: the effect of the passage of time
b. unclean hands: plaintiff must come into equity with “clean hands.” Plaintiff’s unclean hands must be related to the transaction of the suit.
c. freedom of speech: 1st Amendment rule against “prior restraint.” For prior restraint (stopping a newspaper from printing something), you can sue for damages after the fact, but cannot prevent the activity. Exception: no 1st Amendment protection for national defense issues or trade libel
d. criminal act: equity will not enjoin a crime (you cannot prevent a crime—you’ve got to prosecute it).
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Term
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Definition
Damages: basic theory of contract damages is to look to the future or expectation. Put the plaintiff in the position he would have been had the contract been fulfilled.
1. expectation damages (“benefit of the bargain”): the benefit the plaintiff expected to get from the contract. This is usually the amount that is actually contracted for. Note: expectation damages are presumed to be foreseeable.
2. consequential damages: harm to plaintiff in addition to the lost expectation. Consequential damages must be foreseeable at the time the contract was entered into under Hadley v. Baxendale. These are additional damages caused as a consequence of the breach.
3. liquidated damages: damages specified in the contract. A liquidated damages clause is invalid if it operates as a penalty. If the parties make their intentions clear, a liquidated damages clause may serve as a replacement for specific performance as well as for actual damages.
4. punitive damages: the general rule is that punitive damages do not apply to contracts. Two exceptions:
a. bad faith breach of an insurance contract by the insurer
b. bad faith employment contract by the employer |
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Term
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Definition
Restitution: seeks to counter benefits unjustly retained by the defendant.
1. legal remedies:
a. money: money unjustly retained by the defendant. Often called “quasi-contract,” “quantum meruit,” or “unjust enrichment.”
b. replevin: recovery of specific personal property
c. ejectment: recovery of specific real property (e.g. against an adverse possessor or squatter)
2. equitable remedies: note—if value of property goes up, you want a constructive trust, if the property value goes down, you want an equitable lien. Also: both are valuable for priority in bankruptcy proceedings.
a. constructive trust: an obligation to convey specific property to the plaintiff. Two requirements:
i. defendant must have title; and
ii. acquisition of the title must be traceable to the wrongdoer
b. equitable lien: security interest in specific property. Two requirements:
i. defendant must have title; and
ii. either (1) acquisition of the title must be traceable to the wrongdoer; or (2) stolen property is traceable to improvements of property already owned
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Term
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Definition
Injunction: specific performance of the contract. Look first for a breach of a legal obligation. Has the defendant breached a valid contract or is he about to? Requires five elements to award (mnemonic is I’d Die For My Dog)
1. I—inadequate: are the legal remedies inadequate? I.e.: would the damages be too small or speculative; would there be a multicplicity of damage suits; does plaintiff seek to recover a unique chattel or buy land?
2. D—definite: are the terms of the contract definite and certain? A court granting specific performance will want to know exactly what the parties intended.
3. F—feasible: is the specific performance feasible? Watch out for land outside the jurisdiction in a land sale contract. Some courts used to decline to enforce specifically land sale contracts for out-of-state land. This is no longer true, provided the court has valid in personam jurisdiction over the relevant parties.
4. M—mutuality: is there mutuality to the obligation? I.e. ensure that both parties are obligated to perform (e.g. no defense to the contract due to being a minor or insane).
5. D—defenses: these are not defenses to the cause of action, but for the equitable remedy of an injunction.
a. laches: the effect of the passage of time
b. unclean hands: plaintiff must come into equity with “clean hands.” Plaintiff’s unclean hands must be related to the transaction of the suit.
c. freedom of speech: typically not a defense in contract cases
d. hardship: specific performance will not be granted if there are inadequate consideration (low price) and harsh terms in the contract, rendering the contract to harsh for enforcement by a court of equity (unconscionable).
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Term
| Special Contract Remedies |
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Definition
| Special remedies sometimes available for contracts. There are two— 1. Rescission: the contract is void or voidable. The deal is called off, and the parties go back to where they were before entering into the contract. Rescission is a kind of restitution. 2. Reformation: the contract is valid and enforceable, but is written incorrectly. The contract is written correctly (“reformed”) and then enforced. |
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