Remedies Outline

Overview
 Determine the area of substantive law (may be more than one, normally torts,
property or contracts).

 Make sure P has a case and a relief is needed.

 Determine appropriate remedies (based on available remedies for that substantive

area of law).
o Discuss legal remedies first.
o Discuss restitutionary remedies.
o Discuss pure equitable remedies.

Function of Remedy
 Damages:
o Compensatory Damages: The goal is to put the P in their “rightful position.”
 Compensatory damages provide an award of money to the aggrieved party to
compensate for any loss or injury.

 Compensatory damages are substitutionary remedies.

 In tort cases, the objective is to make the P whole by awarding sufficient money
to indemnify the plaintiff for the loss.

 In contract cases, the objective is not only to compensate for loss, but also to
protect the P’s expectation interest by awarding a sum of money equivalent to
what P would have received if the contract had been performed.

o Nominal Damages: P’s rights have been violated, but no loss is sustained or the
extent of the injury cannot be measured.
 Such an award is in effect a declaration of the P’s right and a determination that
the D infringed upon it.

o Punitive Damages: A sum of money awarded to the P in addition to compensatory

damages to punish the D for willful, wanton, or malicious conduct and to deter
such conduct by the D and others.

 Restitution:
o Restores to P any benefit the wrongdoer may have gained from misconduct.

o The goal is to compel the wrongdoer to disgorge any unjust gain or enrichment.

o Substitutionary Remedies: Provide P with monetary recovery measured by D’s

unjust gain, rather than with the precise thing wrongfully obtained.
  Examples of substitutionary restitutionary remedies include, Quasi-Contract
Actions at law, Constructive Trust, Equitable Lien, and Subrogation in equity.

o Specific Remedies In Restitution: Provide recovery of precise thing the D

wrongfully obtained.

 Specific Relief:
o Gives the injured party the precise performance promised rather than its
equivalent in money.

o Specific performance of contracts, in which the D is ordered to perform his promise,

illustrates this type of relief.

 Preventive Relief:
o Affords protection of the P’s rights by a decree prohibiting (enjoining) the D from
doing certain acts or engaging in particular activities infringing on the P interests.

 Declaratory Relief:
o A declaratory judgment conclusively determines the rights of parties involved in a
contested issue, thereby settling the controversy without awarding any additional
relief, such as damages, restitution, or a coercive decree.

Tort Remedies
 Overall Approach For Tort Remedies:
o Has P been/being injured?
 ANSWER: Compensatory Damages

o Has D derived any Unjust Enrichment?

 ANSWER: Restitutionary Damages

o Does P want the property back?

 ANSWER: Replevin, Ejectment, Specific Performance

o Does P need an Injunction?

 ANSWER: Preliminary, TRO, Permanent

 Tort Damages & Equitable Remedies

o Recovery in Tort is limited by proximate cause.

o Compensatory Damages: If a party has sustained harm because of a tort, the

objective of the remedy of compensatory damages is to place the injured party in
substantially as good a position as he occupied prior to the wrong.

 Plaintiff must show:

 Causation: The injury must have been caused by the tortious act.
 o But For Test: But for the tortious action, the injury wouldn't have
happened

 Foreseeability: The injury must’ve been foreseeable at the time of the

tortious act (“proximate cause”); and

 Certainty: The damages cannot be too speculative.

o Non-Economic Damages: General pain and suffering, disfigurement
 Certainty requirement does not apply. Only required for economic
losses (special damages).

o Future Damages:
 All or Nothing Rule: For future damages, P must show that the
damages are more likely to happen than not. Failure to demonstrate
this will result in no award.

 Remember for Future Damages discuss probability of future events

occurrence, Lost Profits, Historical Records– i.e., no new business,
Medical Expenses

 Unavoidability: P must take reasonable steps to mitigate the damage.

Damages limited to those that could not reasonably have been avoided.
o Calculation: Single lump sum payment, discounted to present value. No
accounting for inflation.

o Nominal Damages: Where the P has no actual injury, the court may award nominal
damages to serve to establish or to vindicate the P’s rights.

o Punitive Damages:
 Where P’s injury results from “willful, wanton, or malicious conduct” on the
part of the D, the court may award punitive damages to punish D.

 P must first have been awarded compensatory, nominal, or restitutionary

damages.

 Calculation: Must be relatively proportional to actual damages.

o Restitution:
 Restitutionary Damages: Where the D has been unjustly enriched, the court
may award damages based on the benefit to the D.
 Calculation: The amount is calculated based on the value of the benefit.
However, where both compensatory and restitutionary damages are
available, P can’t get both. Instead, he must make an election of the two.
Generally, the P should be awarded the larger sum of the two.
 No Restitution for Encroachment or Nuisance.
o Injunctive Relief:
 Temporary Injunctive Relief: To recover to recover temporary injunctive relief,
P must meet a two part test:
 Irreparable Injury: P must show that without the injunction, he will incur
irreparable injury while waiting for a full trial on the merits.
o Balancing Test: harm to P if injunction is denied v. harm to the D if
injunction is granted.
 Where D created the hardship (even if substantial) balance likely to
weigh in P’s favor.

 Likelihood of success: P must show that he has a strong likelihood of

success on the merits. The court will look to the probability of this success.
o This is not an inquiry on success of obtaining a permanent injunction.

o The court should also impose a bond requirement on P to reimburse the

D if the injunction injured him and P does not succeed.

 Permanent Injunctive Relief:

 P must meet a five-part test [I Put Five Bucks Down]
o Inadequate Legal Remedy: Money damages may be too speculative; D
may be insolvent; the sheriff may be unable or unwilling to enforce a
replevin or ejectment action.

o Property Interest/Protectable Interest:

 Traditional View: Equity will grant relief only where there is a
protectable property right involved.

 Modern View: Any protectable interest will suffice.

o Feasibility of Enforcement: Only an issue with mandatory injunction.

 Enforcement problems may stem from:
 The difficulty of supervision, or
 Concern with effectively ensuring compliance.

o Balancing of Hardships: P’s benefit v. D’s hardship + the public’s

hardship [but, if the D’s conduct was willful, no balancing].

o Defenses (or lack thereof):

 Laches: Where there has been an unreasonable lapse of time between
when the P learned of the injury and when the P filed the lawsuit, and
that lapse of time is prejudicial to the D, laches will cut off the right to
injunctive relief (but not monetary damages).

 Unclean Hands: The persons seeking equitable relief must not be

guilty of any improper conduct that is related to the lawsuit.
  Impossibility: It would be impossible for the D to carry out the terms
of the injunction.

 Free Speech: Injunction may be denied on free speech grounds.

Contract Remedies
Overall Approach For Contract Remedies:
 Recovery in Contract may be limited by the requirement that consequential damages
be foreseeable.

 Has P been/being injured?

o Answer: Expectation Damages

 Has D derived any Unjust Enrichment?

o Answer: Restitution

 Does P want the property back?

o Answer: Replevin, Ejectment, Constructive Trust, Equitable Lien

 Does P want the Contract performed?

o Answer: Specific Performance

 Does P want the Contract ripped up?

o Answer: Rescission

 Does P want the Contract re-written?

o Answer: Reformation

Contract Damages & Equitable Remedies:

 Compensatory Damages: Based on injury to the Plaintiff

o If a party is injured by breach of contract, the objective of compensatory damages is
to place the injured party in substantially as good a position as he would have had if
the contract had been performed.
 Rationale: This measure of damages protects the P’s expectation interest by
awarding any profits that might have been realized from full performance.

o Requires: Clair Fucked Charlie’s Uncle

 Causation;
 Foreseeability (tested at the time of formation);
 Certainty;
 Unavoidability (mitigation)
 o Types of Compensatory Damages: Connie’s Impala Smashed Nick’s Lamborghini
 Consequential Damages: Available for related damages that were foreseeable at
the time of formation (e.g., damage to reputation).

 Incidental Damages: Available for “hassle” involved in dealing with breach.

 Seller Breaches a Land Sale Contract:

 Compensatory Damages = out-of-pocket loss OR benefitofthebargain

 Nominal Damages:
 Nominal damages are also allowed, but punitive damages are NOT allowed.
o If D’s conduct is willful, you can get punitive damages because it's a tort.

 Liquidated Damage:
 Liquidated damage clauses are permissible, if they are valid.
o Liquidated damage clauses must show:
 Damages are difficult to ascertain at the time of contract formation

o Estimate was a reasonable forecast of what the damages would be.

 If liquidated damages are too high, they will be viewed as a penalty.

o Result: If valid → only liquidated damage amount.

o Result: If invalid → dismiss liquidated damages clause and determine

actual damages.

o Can’t recover both compensatory and liquidated damages. But can get
other remedies outside of actual damages, such as specific performance.

 Restitution:
o Unenforceable Contract: If a contract is unenforceable after P has performed (due
to mistake, capacity, illegality), P can get restitutionary damages for
property/money given to D, or for services rendered for D for the value of the
benefit.
 Not necessary to find that the D actually benefited, only that D received a benefit.

 If the value of the services is greater than the Contract rate, P can still recover
that value.

 P can get specific property back if it is unique, or D is insolvent.

o Quasi-Contract: P awarded the reasonable value of D’s illgotten gain or the

difference between the present value of the good less the value before the benefit
conferred by P.
 o Breach of Contract:
 Where Plaintiff is the nonbreaching party:
 Plaintiff may recover restitutionary damages for property/money given to,
or servicesrendered for Defendant for the VALUE of the BENEFIT.

 Plaintiff can get the property back if it is unique or Defendant is insolvent.

 Where Plaintiff is the breaching party:

 Traditional View: No recovery allowed.
 Modern View: Recovery allowed, but limited to Contract price and must be
offset to reflect Defendant’s damages. Cannot be greater than Contract rate.

 Specific Performance:
o Five Part Checklist
 Inadequacy of Legal Remedies:
 Damages may be inadequate because:
o They’re speculative,
o Defendant s insolvent;
o Multiple suits are necessary; and
o The thing bargained for is unique (tested at the time of litigation, not
during contract formation).
 Liquidated damage clause ≠ $ is inadequate.

 Definite and Certain Terms: Terms of the Contract must be sufficient certain to
constitute a valid Contract.

 Feasibility of Enforcement: Is this possible? Too much court supervision needed?

 Mutuality of Remedy: Must show the other side can also secure performance.
Only an issue where P lacks capacity. Court will reject mutuality if it feels secure
that P can and will perform.

 Lack of Defenses: Unclean hands; laches; unconscionability; mistake;

misrepresentation; equitable conversion (sale to bona fide purchaser); SoF
(satisfied if (1) part performance (2) in reliance on Contract).

o Special Problems
 Deficiencies Fact Pattern
 Seller as Plaintiff: Can enforce Contract if the defect is minor. Cannot enforce
Contract if the defect is major unless the seller can cure the Contract before
closing.

 Buyer as Plaintiff: Can enforce the Contract even if the defect is major
(abatement – court will lower the purchase price to take into account this
defect). Cannot enforce the Contract if the defect is very major.
  “Time of the Essence” Clause
 Includes forfeiture provision. Equity abhors forfeiture.

 Avoid forfeiture (and award specific performance), where:

o Loss to the seller is small;
o Tardiness is de minims;
o Waiver – seller has accepted late payments in the past;
o Buyer would suffer undue hardship.

 Modern Trend: Courts will give P restitutionary relief if specific performance

were not granted. But, if buyer has not made even an initial payment – the
forfeiture clause will be strictly enforced.

 Equitable Conversion: Real property interest of the buyer and seller are switched
upon execution of the land Contract. Thus, the buyer will be regarded as having
the real property interest (the specifically enforceable right to the land). Seller
will be regarded as having the personal property interest (the specifically
enforceable right to the money).

 Covenants Not to Compete (Employment Contracts):

 Pose enforcement problems and can be viewed as involuntary servitude

 Two-Part Test for Validity

o The covenant must protect a legitimate interest.
o The covenant must be reasonable in both its geographical and durational
scope.

 Rescission
o Equitable Remedy: whereby one who is fraudulently induced into entering a
Contract may rescind the Contract.

o TwoStep Analysis:
 Determine if there are grounds for the rescission (improper formation of
contract):
 Mistake
 Misrepresentation
 Coercion
 Undue Influence
 Lack of Capacity
 Failure of Consideration
 Illegality
 o Mutual Mistake of Fact
 Mutual mistake of material fact = grounds

 Mutual mistake of collateral fact ≠ grounds

 Unilateral mistake ≠ grounds UNLESS the nonmistaken party knows or should

haveknown of the mistake.

o Defenses: Determine if there are valid defenses.

 Unclean hands, laches (negligence is NOT a valid defense).

o Special Problems:
 Timing and Election of Remedies:
 If Plaintiff sues for damages first, rescission is NOT allowed.
 If Plaintiff sues for rescission first, damages ARE allowed.

 Availability of Restitution: If a Plaintiff who is entitled to rescission has

previously rendered performance on the Contract, he can get compensated for it
or get the property back via restitution.

 Legal Rescission: Plaintiff accomplishes this by her own actions. Plaintiff gives
notice and tenders back any consideration received. Plaintiff then sues for
restitution for anything given to Defendant.

 REFORMATION
o The Court may modify a written agreement to conform w/ the parties’ original
understanding.

o Three Steps:
 Determine if there is a valid contract.
 Determine if there are grounds for reformation.
 Mutual mistake
 Unilateral mistake IF nonmistaken party KNOWS of mistake
 Misrepresentation

o Determine if there are valid defenses:

 Unclean hands
 Laches.