California Bar Exam Lecture Notes - Remedies

8/12/2019 California Bar Exam Lecture Notes - Remedies

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I. INTRODUCTION

A. General Categories of Remedies (OL I.A.)

1. Liability must exist for remedies. The three areas of remedy analysis, in order of consideration, are:

a. Remedies at law (Damages)

b. Restitution

c. !uitable remedies

II. REMEDIES AT LAW

A. Damages in Torts Cases (OL II.A.)

1. Purpose

a. The "ur"ose of damages in torts actions is generally:

#om"ensation, to "ro$ide an award in the form of money %udgment to the aggrie$ed "arty to com"ensate for anyloss or in%ury resulting from the unlawful act of omission of another

b. & secondary "ur"ose:

'unishment or deterrence

. Basic Tpes of Damages

a. T!ree Categories of Tort Damages

(1) #om"ensatory

() ominal

(*) 'uniti$e

b. Compensator Damages

(1) #om"ensatory damages are designed:to com"ensate the "laintiff for loss suffered

() T!ree "e Concerns+#om"ensatory damages must be:

(a) oreseeable

EXAMPLE:

Thin- bac- to the agon /ount doctrine, which holds that if a defendant commits a tortuous act, the

defendant will be res"onsible for the foreseeable conse!uences of that tortuous act.

(b) #ertainty 0 There must be "roximate and legal cause between the wrongdoers act and the "laintiffs

in%ury

1) The court must be able to calculate the damages with certainty:

2tronger re!uirement in contract than tort as damages are more certain3 stronger for "ro"erty than

"ersonal in%ury.

EXAMPLE:

'laintiff wants to start u" a brand new business. Defendant tortiously interferes with that business

starting u", and therefore 'laintiff is unable to start u" that new business and wants to reco$er lost

"rofits. 4ow could a court measure lost "rofits in this situation, with a brand new business with no

record or history5 This is a situation where certainty will be a "roblem.

(c) 6na$oidable

1) The "laintiff must:

/itigate the loss she or he suffered

) T#o "e Points

Remedies



a) 7f the "laintiff fails, after the defendants tortuous act, to ta-e reasonable ste"s to mitigate the

damage suffered:

The "laintiff will not be able to reco$er

b) 7f the "laintiff ta-es ste"s and ex"ends some money in doing so: ex"enditures are reco$erable to

mitigate the damages.

EXAMPLE:

' o"erates a "etting 8oo and D negligently -noc-s a hole in the fence of the 8oo. ' then has to

!uic-ly go to the hardware store, buy material, and "atches the fence. The ex"enditures would

be reco$erable because they are reasonable ex"enses in mitigating harm9damages.

c. General Damages

(1) eneral damages are damages:

These are damages that naturally flow from the defendants act

() To that end, these ty"es of damages are "resumed and do not ha$e to be "leaded by the "laintiff.

EXAMPLE:

If P is !it o$er t!e !ead% t!e damage to !is !ead is presumed% t!e don&t !a$e to 'e pleaded.

d. pecial Damages

(1) 2"ecial damages are:

&ny other damages suffered by the defendants act and "laintiff has to "lead them s"ecially

EXAMPLE:

If P is !it o$er t!e !ead ' D% it can 'e presumes t!at t!is #ill cause some pain. If P claims t!at !e is

no# suffering from 'lurred $ision as a result% and t!at is pre$enting !im from #oring% !e is no#

claiming lost #ages. T!ese must 'e separatel pleaded and pro$en.

() xam"les of 'ersonal 7n%ury #laims:

(a) 'ain and suffering

(b) Damages to "ri$acy

(c) Damages to re"utation

*. In$ol$ing Personal Propert

a. The standard measure of damages is:

diminution in $alue or cost in re"air, whiche$er is less, along with loss of use damages

b. or destruction of "ersonal "ro"erty, the standard measure of damages is:

mar-et $alue or re"lacement $alue, less de"reciation

EXAMPLE:

7f ' had a briefcase, but had been using it for a number of years and therefore, it had become somewhat ragged

and beaten u", though still functional. D subse!uently destroys the briefcase, and ' wants it re"laced, demanding

the re"lacement $alue. The destroyed briefcases $alue is less than a new one, so there must be some deduction

for de"reciation.

c. Con$ersion $s. Trespass to C!attels

(1) ;oth in$ol$e:

damage to or dis"ossession of "ersonal "ro"erty

() #on$ersion in$ol$es:

a more substantial interference with "ro"erty interest

(*) Tres"ass to chattels in$ol$es:

lesser damage or dis"ossession of "ro"erty

(<) The general remedy for con$ersion:

orced sale of the item to the defendant. 'laintiff does not get the "ro"erty

(=) The general remedy for tres"ass to chattels:

Re"air $alue or rental $alue



<. In$ol$ing Real Propert

a. tandard *easure of Damages

(1) The reco$ery standard is:

Diminution of $alue or cost of re"air "lus loss of use

() or destruction of "ro"erty, the standard measure of damages is:

diminution in $alue as in mar-et $alue before destruction 0 minus $alue after destruction, or the costto rebuild, whiche$er is less

b. Trespass(1) 7f the tres"asser damages the land:

' is entitled to reco$er for the damages

() 7f no in%ury results to the land from the defendants tres"ass:

nominal damages

(a) +,ception:

if entry into the land by defendant has effectuated an ouster.

(b) 7n this exce"tion, the "laintiff will be entitled to reco$er:

reco$er rental $alue for as long as the defendant carries out the occu"ation. 7f not ousted, %ust reco$er

nominal damages

=. In$ol$ing -arm to +conomic Interestsa. In General

(1) 4arm to economic interests:

/ust be tac-ed on to "ersonal in%ury or "ro"erty damage

() &s a general rule:

#annot reco$er for "ure economic loss

b. raud

(1) eneral damages for fraud are measured by either:

(a) benefit of the bargain a""roach (slight ma%ority rule)

1) 6nder this a""roach, the damages are measured:

between the $alue the ' thought what she was recei$ing and the $alue of what she recei$ed

(b) out of "oc-et

1) 6nder this a""roach, the damages are measured:

between sale "rice and $alue of what ' actually recei$ed

HYPOTHETICAL

Don offers to sell 'at a tool set for >*=. Don re"resents the mar-et $alue of the set as >=? but -nows in fact it is worth only >=

Relying on Dons re"resentation of $alue, 'at "urchases the set for >*=. hat are 'ats damages under an out@of@"oc-et

measure5 6nder a benefit@of@the@bargain measure5

;enefit of bargain measure, the slight ma%ority rule, damages measured between what she thought she was recei$ing and what

she recei$ed. 2he thought she was recei$ing >=? toolset and she recei$ed >=, so she would get damages of 0 >=. Aut of

"oc-et measure @ >1? (>*= minus >=)

B. /ominal Damages

a. hen a tort occurs without damage:

Then nominal damages are awarded because damage is not an element of intentional tort



EXAMPLE:

or any tres"ass on real "ro"erty, the "laintiff has the right to at least nominal damages attributable to the in$asion

of the owners exclusi$e right to the land, e$en if the defendants "resence on the land caused no actual damage to

the "ro"erty.

b. ominal damages gi$e rise to the "otential for "uniti$e damages.

C. Puniti$e Damages

a. 'uniti$e damages are designed to "unish the defendant:

commits intentional and rec-less conduct done maliciously, wrongfully

b. 'uniti$e damages are a$ailable when:

in tort cases, there has been willful, wanton or malicious conduct. 'laintiff is not entitled to an award of "uniti$e

damages but %ury may award them at their discretion

c. & "laintiff is ne$er entitled to an award of "uniti$e damages, but may see- them:

in a ma%ority of %urisdictions, "uniti$e damages can be tac-ed on after com"ensatory and nominal damages are award

. Collateral ource Rule

a. 7f a "laintiff gets benefits from a collateral source (i.e., not the defendant) in a tort or contract action:

hile ' can only reco$er once for his in%uries, any amount from collateral source, is not deducted from the amount

defendant owes in damages

EXAMPLE:

'laintiff brings an action against Defendant for >?,??? in medical ex"enses. 'laintiff was insured at the time of the

accident that caused his in%uries, and his insurance com"any "aid all medical ex"enses. 'laintiff may still sue

Defendant for the medical ex"enses and collect the full amount if he "re$ails on the liability issue.

B. Damages in Breac! of Contract Cases (II.B.)

1. In General

a. The goal is to "ut the "laintiff:

in the same "osition to the "laintiff would ha$e been if the contract had been "erformed. These are -nown as

ex"ectation damages.

. & li0uidated damages clause is an attem"t by the "arties:

to establish in ad$ance of the breach, what the damages would be in the e$ent of a breach.a. here enforceable, courts will find li!uidated damages:

determines the reco$ery

b. Two im"ortant considerations to determine if a li!uidated damages clause is a measure of damages or a

"unishment are:

(1) Damages must be difficult to ascertain at the time contract is formed

() 'arties must made a reasonable attem"t to forecast the damages

c. here those re!uirements are not met:

Li!uidated damages would be "resumed to be a "enalty and unenforceable. #ourt may grant s"ecific "erformance if

a""ro"riate, unless contract sti"ulates li!uidated damages as the only remedy

&s a general rule, any time a li!uidated damages clause arises in a "roblem, there will be a $ery strong argument that itis a "enalty and unenforceable. This is to allow students to go on and discuss other damages.

*. &n e,pectation measure:

is the standard measure that flows from that ty"e of contract together with any conse!uential damages. The damages

must be shown with reasonable measure

<. In$ol$ing ale of Real +state

a. Breac! ' Purc!aser

(1) The measure of damages when the buyer breaches is:

the difference between the contract "rice and fair mar-et $alue of the "ro"erty

E&/T7'



EXAMPLE:

eller contracts to sell propert for 1233%333. Buer 'reac!es t!e contract. T!e fair maret $alue of t!e

propert at t!e time of t!e 'reac! is 143%333. eller #ould reco$er 123%3335t!e difference 'et#een t!e

contract price and t!e fair maret $alue.

() These damages are solely interested in com"ensation. 7f the mar-et "rice exceeds the contract "rice:

unli-e tort damages, contract damages are solely interested in com"ensation so the seller will notreco$er anything

b. Breac! ' eller

(1) The measure of damages when the seller breaches:

fair mar-et "rice minus the contract "rice

EXAMPLE:

ame facts as t!e last e,ample% onl t!is time% eller 'reac!es. Buer #ill reco$er 123%3335t!e

difference 'et#een t!e contract price and t!e fair maret $alue.

() here the contract "rice is the same as or lower than mar-et "rice:

the buyer is not harmed so no reco$er

=. In$ol$ing ales of Goods 6nder Article 7

a. Breac! ' Buer

(1) #ontract "rice minus the mar-et "rice

1) The seller can also resell the item and then "ursue damages, "ro$ided:

a) resale is done in good faith

b) commercially reasonably manner

c) reasonably soon after the breach @

) hen this occurs, the sellers damages:

contract "rice minus resale "rice

*) Lost 8olume eller Rule

a) hen a seller is in the business of selling goods of this -ind, and has a fairly unlimited su""ly of

those goods:

the commercial seller is always entitled to loss of "rofits on the sale

EXAMPLE:

2eller o"erates a stereo store, and contract to sell a stereo for >1??. ;uyer breaches, and 2eller

"roceeds to resell the stereo to someone else. 2eller has suffered damage because he should

ha$e sold two stereos, but because of ;uyers breach, 2eller sold only one.

b. Breac! ' eller

(1) The buyers standard measure of damages:

/ar-et "rice minus the contract "rice

() & buyer can also reco$er:

Difference between the co$er "rice and contract "rice

(a) & buyer co$ers by buying re"lacement goods without:

1) 6nreasonable delay

) ood faith

*) Reasonable time

B. In$ol$ing +mploment

a. Breac! ' +mploer

(1) The em"loyees standard measure of damages:

Lost wages

() 4owe$er:

2ub%ect to affirmati$e duty to mitigate



(*) "e Rule

m"loyee is not re!uired to ta-e on any %ob 0 similar %ob in the same area

b. Breac! ' +mploee

(1) The em"loyers standard measure of damages:

xtra cost of hiring someone else to do the %ob

C. In$ol$ing Construction on Real +state

a. Breac! ' O#ner or Purc!aser

(1) The builders standard measure of damages:The "rofits the builder ex"ected to ma-e on the %ob "lus the cost ex"ended to date

EXAMPLE:

-omeo#ner !ires Painter to paint !er !ouse for 123%333% and Painter e,pects to e,pend 19%333 on

supplies and la'or% t!ere' maing a 1:%333 profit. If -omeo#ner 'reac!es t!e contract t!e ne,t da%

Painter is entitled to 1:%333% constituting !is lost profits. If Painter 'oug!t t!e paint and painted a

fourt! of t!e !ouse% !e #ould 'e entitled to t!e 1:%333 plus t!e cost e,pended to date on t!e paint and

t!e la'or.

b. Breac! ' Builder or Contractor

(1) The owners remedy if the wor- is not yet com"leted:

additional cost to com"lete abo$e the contract "rice

() 7f the builder or contractor com"letes the wor- but with defects, the owner may reco$er either:

cost to remedy the defect unless the cost is too dis"ro"ortionate to the benefit recei$ed. 7n such asituation, diminution of $alue.

EXAMPLE:

T!in 'ac to t!e famous Cardo;o Read<Pipe decision. Builder #as !ired to 'uild a !ouse using

Read<Pipe% 'ut instead used anot!er pipe t!at #as almost as good% 'ut #asn&t Read<Pipe. In t!at

case% t!e cost to remed #as too disproportionate to repair% so instead t!e court granted t!e

diminution of $alue.

. Conse0uential damages

&ny other damages that are foreseeable and certain

a. #onse!uential damages must be reasonable foreseeable:to the breaching "arty at the time the contract was formed

F. Incidental damages

2ubset of conse!uential damage

1?. Reliance damages

&lternati$e method to measure damages

a. These consist of any ex"enditures:

any ex"enditures made for "erformance of the contract "rior to the breach

EXAMPLE:

& contracts to build a house for ;, and goes out and buys lumber and other materials that & will need to build the

house. ;efore & starts wor-, ; breaches the G. & could "ursue ex"ectation damages, or & could sim"ly choose tosue for reliance damages. These damages would be the amount ex"ended in "re"aration to "erform the G to date,

or the amount s"ent on the materials.



III. RESTITUTIONARY REMEDIES

A. Remedial Purpose

1. & restitutionary remedy see-s to "re$ent the un%ust enrichment of the defendant:

by returning to the claimant any benefits un%ustly conferred by the claimant on the defendant

B. Restitutionar Remedies in Tort Cases (OL III.B.)

1. Legal Remediesa. +=ectment

(1) &ction to remo$e D wrongfully in "ossession of 's land

b. Reple$in

(1) &ction at law for the reco$ery of s"ecific chattels that ha$e been wrongfully ta-en or detained

. +0uita'le Remedies

a. ;oth e!uitable remedies arise out of a !uasi@contract analysis.

b. 2ome courts re!uire a showing:

legal remedy is inade!uate before they can get e!uitable remedies or constructi$e trust

c. Constructi$e Trust

(1) & constructi$e trust is a legal fiction by which:

that the D who has wrongfully dis"ossessed the ' of "ro"erty is holding that "ro"erty in trust

() 7f successful:

a trust is im"osed on the "ro"erty to order for D to return the "ro"erty

(*) 7t differs from re"le$in because:

in constructi$e trust, if the "ro"erty has changed formed, the trust can be im"osed on the new form

EXAMPLE:

Defendant stole a ring from Plaintiff. Defendant t!en sold it for 12>%333. Defendant t!en too 12:%333

from t!at 12>%333 and used it to purc!ase Blacacre% and Blacacre increased in $alue to 1>3%333.Plaintiff can trace Blacacre all t!e #a 'ac to t!e stolen ring. Plaintiff can t!erefore get a

constructi$e trust on Blacacre and in effect 'ecome t!e o#ner. Defendant #ill 'e forced to con$e

Blacacre to Plaintiff.

(<) Ta-e note that you cannot trace "ro"erty that is sold to a bonafide "urchaser.

EXAMPLE:

ame ring e,ample% 'ut no#% Defendant sells Blacacre to a 'ona fide purc!aser. Plaintiff can no

longer get a constructi$e trust on Blacacre. -o#e$er% Plaintiff can still get a constructi$e trust on t!at

12>%333.

d. +0uita'le Lien

(1) This is a situation where:

' is allowed to ha$e a lien im"osed on "ro"erty() The benefit of either e!uitable remedy:

' becomes a secured creditor

EXAMPLE:

Original ring fact pattern. Plaintiff can sue Defendant for 12>%333% t!e fair maret $alue of t!e ring. But

if Plaintiff does so% !e 'ecomes a general creditor. If Plaintiff sues for an e0uita'le remed% !e

'ecomes a secured creditor and t!erefore !as priorit o$er general creditors% and t!ere' a'le to

reco$er first% 'efore ot!er creditors.

(*) #ourts will im"ose a lien:

for the $alue of "ro"erty ta-en



EXAMPLE:

Defendant em'e;;les 1>%333 from Plaintiff and uses t!at mone to mae impro$ements to !is !ome% #!ic!

causes !is !ouse to increase in $alue ' 1>%333. Plaintiff cannot claim a constructi$e trust o$er t!e !ome%

'ut could claim an e0uita'le lien o$er t!e propert in t!e amount of 1>%333.

EXAMPLE:

ame facts as a'o$e% 'ut t!e !ome onl impro$es ' 1:%333. Plaintiff can get an e0uita'le lien on t!e

!ome% 'ut onl for 1:%333. Restitution is concerned #it! t!e 'enefit 'eing conferred.

*. Lo#est Intermediate Balance Rule

EXAMPLE:

2u""ose D embe88les >=,??? from ' and "uts it into his ban- account. 4is account has a balance of >,???. 4e has

now brought the balance u" to >C,???. 4e then decides to go on a cruise and s"ends ><,??? from the account on the

cruise, so the balance falls to >*,???. hen he returns, he gets a gift from a relati$e for >1,??? and "uts it into the

account, bringing the balance u" to ><,???. ' now sues. ' can get an e!uitable lien, but is limited to >*,??? under the

Lowest 7ntermediate ;alance Rule.

a. 6nder this rule:

Lowest intermediate balance between the tort and lawsuit is sub%ect to e!uitable lien.

C. Restitutionar Remedies in Contract Cases (OL III.C.)

1. General Rule Recap

a. The general rule of remedies is to com"el the defendant:to return the reasonable $alue of benefit conferred by ' on the D when it would be un%ust for D to not "ay

. ?uasi<Contract

a. Huasi@contracts are contracts im"lied in law:

to order a D to "ay reasonable $alue of benefit conferred

b. 4owe$er, the -ey concern is that when this benefit was conferred by mista-e:

reasonable ex"ectation of "ayment from this "erson.

EXAMPLE:

Thief steals a car from '. The car had some defects and minor damage. Thief too- the car to a re"air sho" and had

it fixed u" to loo- brand new. Iust as the re"airs were com"leted, the "olice arri$ed and too- the car bac- to the

owner. There was a reasonable ex"ectation of "ayment from Thief, but not from the rightful owner, who didnt as-for this. The re"air sho" cant force a benefit onto someone. Therefore, there is no !uasi@contract on these facts

alone.

HYPOTHETICAL

#lar- contracts to ha$e Landsca"er "lant trees and shrubs in her bac-yard. #lar- li$es at 1?? Acean &$enue. An the

date of "erformance, Landsca"er by mista-e goes to /itchells home at 1??? Acean &$enue and "erforms the

landsca"ing wor-. &fter reali8ing his error, Landsca"er attem"ts to reenter /itchells bac-yard to remo$e the

im"ro$ements. /itchell refuses to "ermit Landsca"er to come bac- onto the "ro"erty and threatens to in%ure him if he

does so. 7mmediately thereafter, Landsca"er brings a restitutionary action against /itchell see-ing to reco$er the

reasonable $alue of the trees and shrubs that were "lanted. 2hould Landsca"er "re$ail5

Restitution damages are awarded when ' confers benefits on D and not re"aying ' would un%ustly enrich D. 7f benefits

are conferred by mista-e, -ey concern is whether there was a reasonable ex"ectation of "ayment from the "erson who

is enriched. 4ere, owner is refusing to allow remo$al. 2ome courts ha$e argued that this can be seen as an

acce"tance of benefits by the owner. Ather cases ha$e held that this may be a con$ersion. 7n either case, owner has to

"ay. Restitution allowed

d. &nother area !uasi@contracts arise:

unenforceable contract i.e. due to statute of frauds or discharge, court can order restitution

*. Breac! of Contract

a. & "arty may also see- restitution:



when there has been a breach of contract

(1) The aggrie$ed "arty can elect:

whether to choose restitution damages or ex"ectation damages

() xce"tion:

where the aggrie$ed "arty has already fully "erformed his or her end of the contract.

BAR EXAM APPLICATION

Question 1

&""licants were as-ed to consider issues arising from breach of a ser$ice contract. /aria, a homeowner, res"onded by

tele"hone to a handbill "osted on her door-nob by Resi@#lean (R#), a com"any offering com"lete housecleaning ser$ices for

>=??. They mutually agreed the ser$ices would be "erformed on riday, but on Thursday e$ening, /aria sold her home. hen

the crew arri$ed riday morning, she sent them away. R#s loss of "rofit was >1??, but R# billed /aria for >=??.

&ssuming /aria breached her contract with R# how much, if anything, does /aria owe R#5

&""licants must discuss "ossible com"ensation for R#s ex"ectancy interest, as well as any conse!uential damages or

incidental damages.

From the July 2006 California Bar Exam

Damages award for breach of contract are supposed to place the in the same position that would ha!e been "# if the

contract had been performed. Assuming Maria is liable, RC would not be entitled to $500. They would only be entitledto $500 if they had fully performed the contract. They would receie their lost profits and costs e!pended to date,

which is $"00 here.


Question 2

&""licants were "resented with damages issues arising from a wrongful death. Iac- owned the worlds largest uncut diamond,

worth >1 million uncut, but "otentially >* million if cut into finished gems. & master diamond cutter, #hi", agreed in writing to

underta-e the ris-y tas- of cutting the diamond for com"ensation of >1??,???, "ayable u"on successful com"letion. 4owe$er,

before beginning the %ob, #hi" died as a result of being hit by a negligent dri$er, ilbur. #hi" left a widow, /elinda.

hat damages, if any, may /elinda reco$er against ilbur5

&""licants must consider elements of com"ensatory damages for wrongful death, including such items as #hi"s "otentialfuture earnings, loss of consortium, medical and funeral ex"enses, and /elindas emotional distress at being widowed.

From the July 200$ California Bar Exam

Conse%uential damages ha!e to be foreseeable and certain& "n a wrongful death action' lo!ed one sues for damages suffered

for loss of lo!ed one& (t issue here is whether )*00000 is sufficiently certain to be awarded for the wrongful death action& +e

are told that )*00000 would ha!e been paid only on completion of a ris,y procedure& Damages may be too speculati!e to

perform& -elinda won.t get the )*00000 lost due to Chip.s death but the loss of profits' pro!ided it is not speculati!e&

IV. EQUITABLE REMEDIES

A. Introduction

Traditional re!uirement for e!uitable relief was that legal remedy was inade!uate. The "rime e!uitable remedy in torts is an

in%unction, and in contracts is s"ecific "erformance.

B. +0uita'le Remedies in Tort Cases (OL I8.C.)

1. In=unctions

a. Definition

(1) &n in%unction is a court order:

e!uitable relief designed to order a "erson or entity to refrain rom doing an act or do a "articular act

b. T!ree Tpes of In=unctions



(1) The three ty"es of in%unctions are:

(a) tem"orary restraining order

(b) "reliminary in%unction

(c) "ermanent in%unction

c. Temporar Restraining Orders (TROs) and Preliminar In=unctions

(1) These are most li-ely to arise in situations:

where the ' is facing some immediate harm that could de$elo" $ery soon

EXAMPLE:

D 'uilds a 'uilding on P&s propert% and P is suing to end D&s encroac!ment. -ere% t!e court doesn&t

need to #orr a'out a temporar restraining order or preliminar in=unction 'ecause t!ere no

immediac of !arm5t!ere is time to litigate.

EXAMPLE:

D and P are neig!'ors. D announces plans t!at e$er #eeend nig!t% starting t!is upcoming #eeend%

!e intends to conduct parties in !is 'acard t!at !e #ill c!arge people to attend% #!ere t!ere #ill 'e

'ands plaing loud music and #!ic! #ill go late into t!e nig!t. P doesn&t #ant t!is. -ere% a TRO or

preliminar in=unction #ould 'e #arranted.

() TRAs are issued most often ex parte at the $ery onset of litigation, in order to maintain the status !uo. The

"laintiff will be entitled to a TRA:

where the ' can show that there is a li-elihood of immediate harm and we need to ta-e action tomaintain the status !uo

(*) Duration

(a) TRAs are $ery short duration in%unctions, often granted for only:

1?@? days

(<) Bond

(a) An granting a TRA or "reliminary in%unction "ending a final decision on the merits, the court or %udge will

re!uire:

&""licant to "ost a bond for the "ayment of any damages that the "arty en%oined may sustain by reason

of the in%unction

(=) Preliminar -earing(a) hen a TRA has been issued ex parte:

Then, the court conducts a "reliminary hearing

(b) & "reliminary in%unction is issued to maintain:

The status !uo until a full hearing can be held to determine if the in%unction should be "ermanent

(c) The following must be "ro$en for a "reliminary in%unction to be issued:

1) 'robability of "re$ailing on merits

) 7rre"arable in%ury if the "reliminary in%unction is not issued

*) ;alancing of interests fa$ors the '

<) 'ublic interest fa$ors the granting of relief

(d) 6nder an alternati$e test, the "laintiff has the o"tion:stablishing the sliding scale test

1) 6nder the sliding scale test, the greater the "otential irre"arable in%ury to the "laintiff if the in%unction

is not granted:

The lesser the re!uired showing of "re$ailing on the merits

d. Permanent In=unctions

(1) & "ermanent in%unction is issued at a full hearing on the merits:

' must ha$e "re$ailed on the substanti$e claim and shown a need for continuing "rotection to beeligible for "ermanent in%uncti$e relief

() i$e<Point Test



(a) 7nade!uate legal

(b) 'ro"erty right

(c) easibil ity

(d) ;alancing

(e) Defenses ha$e to be considered

1) ote that while the first four are elements to be "ro$en:

/ust consider defenses in the analysis

(f) *nemonic De$ice@ I am Passing the uc-ing Bar , Damnit

(*) Inade0uate Legal Remed (OL I8.B.)

(a) & legal remedy could be inade!uate because:

1) Damages too s"eculati$e to "ut a dollar $alue on it

) /ulti"licity of suits

*) #ontinuing harm

<) hen sub%ect matter of the contract in$ol$es real "ro"erty

a) Land is uni!ue

=) irre"arable in%ury

a) This arises when damages ha$e not yet occurred:

but will occur and cannot ade!uately com"ensate for the harm when it occurs

EXAMPLE:

#oca@#ola buys commercial time for a national s"ot it intends to broadcast at the end of the first

!uarter of the next 2u"er ;owl. 'e"si then contacts the networ- in charge of the 2u"er ;owl and

con$inces them to "ull out of their deal with #oca@#ola and instead run a 'e"si commercial in its

"lace. #oca@#ola wants to sue for an in%unction to sto" 'e"si from doing this. This is an irre"arable

in%ury. #oca@#ola has not yet suffered damages, but will suffer harm if their commercial does not

run, and it will be $ery hard to measure %ust what those damages are.

(<) Propert Rig!t

(a) Today, many %urisdictions ha$e abolished the "ro"erty right. Those which retain it:

ha$e so ex"anded the definition of "ro"erty right that anything !ualifies

(b) &ny interest:

you ha$e will !ualify as a "ro"erty right

(=) easi'ilit (OL I8.B.)

(a) The first -ey feasibility concern is a %urisdictional concern. This is only really a concern:

for ci$il "rocedure, where D is outside the state or the in%unction would tell D to do or not do something

outside the state

(b) The second -ey feasibility concern:

Two ty"es of in%unction that are issued

1) & mandatory (affirmati$e) in%unction:

com"els D to do something

) & "rohibitory (negati$e) in%unction:

com"els D to sto" doing something

(c) /andatory in%unctions "resent a feasibility concern because courts:

would ha$e to su"er$ise Ds "erformance

(B) Balancing (OL I8.C.)

(a) Two -ey concerns:

hat is balanced and when it ta-es "lace

(b) hat is balanced5



1) The harm to the "laintiff if no in%unction is issued is balanced:

&gainst the burden on the defendant if the in%unction is issue

(c) hen does balancing ta-e "lace5

1) ;alancing always ta-es "lace unless:

The Ds conduct is willful.

HYPOTHETICAL

The 6.2. a$y uses sonar during training exercises in the waters off the coast to "re"are stri-e grou"s to detect, trac-, andneutrali8e enemy submarines. rou"s and indi$iduals de$oted to the "rotection of marine mammals and ocean habitats assert that

the sonar causes serious in%uries to these animals. $en if these "laintiffs ha$e demonstrated a substantial li-elihood of irre"arable

in%ury, may such in%ury be outweighed by the go$ernmental and "ublic interest in effecti$e, realistic training of sailors in national

defense, "re$enting issuance of an in%unction5

This hy"o as-s us to use the balancing test and examine what would ha""en to ' if in%unction is not grant . &re there

other ways to train the sailors5 hat is the short@term and long@term effect on marine life5

(C) Defenses (OL I8.D.)

(a) The two most fre!uently tested defenses are:

1) Latches

) 6nclean hands

(b) Lac!es

1) Laches arises when a "laintiff:

6nreasonably delays asserting rights and the delay "re%udices defendant

) Do not confuse this with statute of limitations. This is "rimarily a "re%udicial

harm concern.

*) The focus is less on the timing as:

're%udicial harm concern

() 6nclean -ands (OL I8.D.)

(a) 6nder this defense, if the "laintiff has committed some wrongful conduct which has in%ured the defendant

with res"ect to the dis"ute currently between the "arties:

The 's hands are not clean

(b) The wrongful conduct by the "laintiff:

hich has in%ured the D in connection with dis"ute between the "arties

EXAMPLE:

Defendant in some way was bac-ing out of a business deal with 'laintiff, and 'laintiff sought an

in%unction. hile see-ing this in%unction, 'laintiff got into a car accident with Defendant. This would not be

unclean hands+the two are unconnected.

C. +0uita'le Remedies in Contract Cases1. pecific Performance (OL I8.C.)

a. & s"ecific "erformance decree:

!uitable decree that is issued in res"onse to a breach of contract

(1) 7t com"els:

;reaching "arty to "erform his or her to "erform his or her contractual obligations

b. i$e "e Concerns

(1) Definite and certain contract

() 7nade!uate legal remedies

(*) easibility



(<) /utuality

(=) Defenses

(B) *nemonic De$ice@

Do I rame / Diploma

c. Definite and Certain Contract

(1) 7t must be established that:

&n enforceable contract

() The concern is that:7t needs to be definite and certain enough so that court can instruct the wrongdoer what to do

(*) T!ree Pro'lems in Land<ale Contracts

(a) /ar-etable title

1) 7n e$ery land@sale contract:

7m"lied co$enant of mar-etable title unless the "arties ex"ressly state otherwise

) 7f a seller see-s s"ecific "erformance:

/ust ha$e mar-etable title to the land

(b) Time of the essence contract

EXAMPLE:

;uyer contracts to buy "ro"erty from 2eller for >1??,???, to be "aid in fi$e e!ual installments, and the

"ro"erty is not to be con$eyed until all fi$e "ayments are made. The contract s"ecifically states that time

is of the essence and this is enforceable. ;uyer ma-es first three "ayments on time, and then is four days

late on the fourth "ayment. ;ecause of this tardiness, 2eller refuses to go through with the deal. ;uyer

see-s to sue for s"ecific "erformance in this regard. ;uyer can sue if the ;uyer tenders the "erformance

within a reasonable time and denial of s"ecific "erformance would result in substantial harm to the

breaching "arty. ;uyers substantial harm would be full forfeiture.

(c) &batement situation

1) This arises when it is determined that for some reason:

The land that the seller is "romising to con$ey is not what was "romised

EXAMPLE:

;uyer contracts with 2eller to buy a 1??@acre "arcel of land of ;lac-acre. 7t turns out the "arcel is F acres,

not 1??. #ould there be s"ecific "erformance if ;uyer tries to bac- out5 7t de"ends on who is see-ing. 7f

the ;uyer is see-ing, then yes, there will be s"ecific "erformance with an abatement of "urchase "rice,

because ;uyer has decided he still wants the "ro"erty. 7f 2eller is see-ing, it de"ends on whether or not

the defect is material or minor. & buyer cant be forced to buy "ro"erty with a material defect.

d. Inade0uate Legal Remed (OL I8.B.)

(1) Legal remedy must be inade!uate. li!uidated damage clause does not ma-e legal remedy is ade!uate.

inade!uate remedies can arise from irre"arable harm, s"eculati$e nature of damages, or if you are dealing

with real "ro"erty

e. easi'ilit (OL I8.C.)

(1) Iurisdictional concerns similar to Torts cases() Jou cannot s"ecifically enforce a "ersonal ser$ice contract. This is because:

7ndentured ser$itude is not constitutional

(*) & "laintiff can still "re$ent a defendant from wor-ing for anybody else in o""osition:

n%oining a breach of negati$e co$enant

(a) 7m"lied into a "ersonal ser$ice contract is:

egati$e co$enant that D would not wor- for someone else

EXAMPLE:

& little -nown roc- grou" signs a contract with a concert "romoter to "erform a concert on a gi$en night



for >=,???. &fter signing, but "rior to the date of "erformance, the roc- grou" releases an album which

shoots to the to" of the charts, and now the band has become a hot commodity, commanding as much as

>=?,??? "er a""earance. They contact the "romoter and demand more money. The "romoter refuses.

The roc- grou" then signs a contract to "erform a concert for a ri$al on the same night for >=?,???. The

first concert "romoter learns of this and sues. The court cant force "erformance, but can sto" the roc-

grou" from "erforming for the ri$al "romoter by en%oining a breach.

f. *utualit

(1) &t common law, mutuality meant that the "laintiff:

could only get s"ecific "erformance against D if D could get the sameEXAMPLE:

A contracts to 'u a uni0ue ring. Legal remedies in t!is situation are inade0uate% 'ecause t!e ring is

uni0ue. !ile t!e 'uer could get specific performance due to t!e uni0ueness of t!e =e#elr% t!e seller

could not% 'ecause mone damages are ade0uate. it!out t!e e,istence of mutualit% no specific

performance #ould 'e a$aila'le at common la# at all.

() Today, mutuality is established if the "arty see-ing "erformance has either:

(a) 2ubstantially rendered "erformance

(b) #an assure that "erformance will be rendered

EXAMPLE:

2ame facts as the uni!ue ring exam"le. The buyer could "ut money into an escrow account. This issatisfactorily ensuring the buyers "erformance, because the buyer is "utting his "erformance somewhere

where he cannot reach it.

(*) at!er<on -pot!etical

(a) Thin- bac- to the earlier hy"othetical in$ol$ing the father and son, and the estate con$eyance. The son

could not see- s"ecific "erformance to force the father to con$ey the estate because:

the son cannot assure that s"ecific "erformance will be rendered

g. Defenses (OL I8.D.)

(1) 7n addition to laches and unclean hands, two additional defenses are:

(a) 4ardshi"

1) 7f enforcement of the contract would an undue hardshi" on the defendant:

because of 's su"erior bargaining hardshi", then s"ecific "erformance will not be ordered

EXAMPLE:

&s relati$e dies, lea$ing her entire estate to &. &, -nowing nothing of wine, goes to the home, locates

the wine cellar, and finds a rare, old wine. & then goes to a local ex"ert who -nows what it is worth,

but the ex"ert tries to cheat & and gi$es him a bad estimate of the wines $alue. &fter entering into a

contract to sell the wine to the ex"ert, & learns the true $alue and bal-s at the deal, leading to the

ex"ert suing for s"ecific "erformance. ranting s"ecific "erformance would wor- an undue hardshi"

because of the ex"erts su"erior bargaining "osition.

(b) !uitable esto""el

1) 6nder this defense, where "laintiff has engaged in some action or inaction:

then ' may be esto""ed from asserting e!uitable rights.

HYPOTHETICAL

E owns a golf course. J owns a business that abuts the golf course. During construction of the course, J "rotested Es "lan to

construct homes on the course that would border Js "ro"erty. 7n res"onse to Js ob%ections, E ga$e J choices of what would

border Js "ro"erty. J selected a fairway for a certain hole. &fter the course o"ened, J sought an in%unction re!uiring a

redesign of that hole because golf balls were landing on Js "ro"erty. 2hould J be e!uitably esto""ed from obtaining an

in%unction5



!uitable esto""el can be used when ' has engaged in some action or inaction that has induced the defendant to ta-e action

that is now basis of the challenged. J will be esto""ed here since J chose the fairway in the first "lace.


Question 3

&""licants were as-ed to analy8e issues arising from a contract for the sale of a rare "iece of art. 'aula was commissioned by/useum to find and "urchase certain original "aintings. 'aula learned that the wor-s were in the hands of "ri$ate collectors

and had not been sold on the mar-et for years, but she located a "ri$ate collector, 2ally, who "ossessed three "aintings that

/useum desired. 2ally agreed to sell any one of the three to 'aula for >??,???. 'aula did not disclose that she re"resented

/useum, e$en when 2ally mentioned that she only sold to other "ri$ate collectors and e$en though 'aula had to consult with

/useum before ma-ing the final selection. hen 2ally learned from a wire transfer of funds that /useum was actually the

"urchaser, she refused to surrender the selected "ainting to 'aula.

#an 'aula obtain s"ecific "erformance of 2allys agreement to sell the "ainting5

&""licants must consider, in addition to issues regarding the enforceability of the oral contract, whether s"ecific "erformance is

an a$ailable remedy on these facts, and whether 2ally could raise e!uitable defenses.

From the July 200/ California Bar Exam

pecific performance may be granted as a remedy for breach of contract& 1ere there is a breach of contract between and

for the sale of a rare piece of art& +e need to consider whether specific performance can be granted for breach of contract'

which has elements3 definite and certain contract' inade%uate legal remedy' feasibility' mutuality and defenses& 4here does

not seem to be much issue here with regards to contract& Dollar damages may be ade%uate but it was a rare piece of art so

legal remedy may be inade%uate& 4here do not seem to be feasibility 5 urisdictional problems& (s for mutuality concerns'

can assure her payments by putting it in an escrow account and here' she seems to ha!e wired the money& (t issue is

whether' can argue defenses because misrepresented her position at the museum and whether this is sufficient to be

considered unclean hands&


Question 4

&""licants were as-ed to e$aluate both legal and e!uitable remedies for breach of a contract for land. 2tan and ;arb entered

into a $alid written contract whereby (1) 2tan agreed to con$ey ;arb 1?? acres of agricultural land and water rights in an

ad%acent stream, and () ;arb agreed to "ay 2tan >1??,???. Two wee-s before the con$eyance was set to ta-e "lace, 2tan

called ;arb and told her the deal was off because he had been offered >1*?,??? for the land from another "arty. The next day,

;arb disco$ered that 2tan has title to only F? acres of the land, and that he does not ha$e water rights to the stream. 7t would

cost >1=,??? to "urchase such rights from their true owner.

hat e!uitable and contractual remedies may ;arb see-, and what is the li-ely outcome on each5

&""licants must ex"lain how ;arbs damages would be calculated for 2tans breach, and discuss the re!uirements for s"ecific

"erformance, including the a$ailability of an ade!uate remedy at law, and how the "urchase "rice would be abated for the

deficiencies if ;arb can re!uire 2tan to con$ey the "ro"erty.

From the July 200 California Bar Exam

7E-E-BE7 D7E 5 Damages' 7estitution and E%uitable 7emedy& Facts indicate enforceable contract exists& Damages for

contracts are designed to restore the plaintiff to her original position as if the contract had ne!er been breached& 4he damages

would be to cost to Barb to purchase land to meet her needs plus her conse%uential damages&

4here appears to be no restitution damages her as Barb ne!er did anything in reliance of the sale of land&

+e need to consider whether specific performance can be granted for breach of contract' which has elements3 definite and

certain contract' inade%uate legal remedy' feasibility' mutuality and defenses&

pecific performance re%uires definite contract' which we ha!e here' but we need to discuss whether there should be an

abatement of the purchase price to show that the land was not as ad!ertised& "f the buyer is see,ing specific performance' then

specific performance would be ordered& "f seller is see,ing an abatement' then seller would need to show material breach&

1ere' it is the buyer so specific performance would be ordered if the buyer agrees to buy the land despite the fault&



"nade%uate legal remedy is not a problem because land is uni%ue& Feasibility is not an issue as there seem to be no

urisdictional issue& Barb can assure payment by placing her payment for the land in an escrow account so there is mutuality&

4here seems to be no ade%uate defense for tan&

+hen seller breaches contract for the sale of property' buyer may reco!er the mar,et price minus the contract price& "f the

mar,et price is )*80'000' buyer should reco!er )80000 as a result of the breach&

Documents

California Bar Exam Lecture Notes - Remedies