REMEDIES OUTLINE

COMPENSATORY DAMAGES

I. Expectancy Damages

i. Purpose – Put wronged party in rightful position and deter further wrongdoing

a. Breach of Contract = expectation damages

x. Rightful position is where the wronged party would have been if

the contract had been fulfilled

b. General Formula: market price – contract price

x. Seller Breach

I. Buyer Damages = market price – contract price

xx. Buyer Breach

I. Seller Damages = contract price – cost of sale

i. Also considered PROFIT MARGIN

c. Damages typically calculated by looking at FAIR MARKET VALUE of

item lost, replacement cost, or diminution of value

x. Policy: Use fair market value because it is OBJECTIVE measure

of what was lost rather than subjective measure based on plaintiff’s
personal value

I. If too difficult to calculate because speculative or

subjective, then equitable remedies (specific performance,
restitution, injunction) are likely better remedy

xx. Case: US v. Hatahley (native horses) – damages are based on fair

market value; need to put wronged party in rightful position in
cheapest possible way

ii. Factors to analyze damages

a. Causal (but for breach there would be need for damages)

b. Foreseeable (both parties could foresee damage for breach at time)

c. Certainty (ACTUAL loss)

d. Unavoidable (reasonably mitigate)

 iii. Special Use Damages

a. Case: In Re September 11 Litigation (owners of twin towers) – a special

use property where compensatory damages are difficult to determine may
still get monetary damages if it is being used for its intended purpose and
there is NOT an active market for type of property

iv. Lost Volume Seller

a. Have ONE item = if it can be sold to subsequential buyer NO damages

b. Have MORE than one item = if can be sold to subsequent buyer YES
damages because could have sold TWO rather than one

v. Economic Harm Rule

a. RULE: If suing for negligence (tort), cannot sue for mere economic harm
but instead must show PHYSICAL impact to person or property

vi. Tort Damages – Emotional trauma and distress, pain and suffering

a. Determining reasonableness of award

x. RULE: To determine if a jury verdict is excessive, must defer to

jury decision UNLESS awards is MONSTROUSLY excessive or
so large as to shock conscious

I. Compare with other awards in similar cases

b. Tort Liability for Constitutional Deprivations

x. Must determine if the distress was caused by constitutional

deprivations and if it were justified by government or not

II. Consequential Damages

i. RULE: Logically flow from breach of the contract

a. Involve damages OTHER THAN cost of sale, profit, purchase price

ii. Tortious Interference

a. For issues of tortious interference with a contract, damages parties can get
BOTH damages from the contract AND damages relating to tortious
action

x. Case: Texaco v. Pennzoil (Getty interference) – Can get damages

for both the breach itself and the action that caused the breach
 iii. Duty to Mitigate

a. Injured party has a duty to mitigate damages

x. Failure to do so may result in reduction in damages awarded

b. Example: Cover (good faith effort without reasonable delay to substitute)

III. Reliance Damages

i. RULE: Put injured party in position would have been in if contract would NOT
have been formed in first place

a. Only available if too speculative to award expectancy damages or there is

no contract that is enforceable

IV. Liquidated Damages

i. Contractual limitations on damages

a. Why agree to such limitations?

x. Maintain business relationships

xx. Imbalance in negotiating power

ii. Evaluating Validity of Liquidated Damages

a. RULE: Liquidated damages should be thrown out if it is unconscionable,

as in it is so one-sided as to suppress or surprise non-contracting parties

PUNITIVE DAMAGES

I. Punitive Damages

i. RULE: To determine if punitive damages should be awarded, court looks at (1)

the reprehensibility of defendant’s conduct, (2) the malice involved, and (3) the
defendant’s intent when going about the misconduct

a. California also looks at the wealth of the defendant

b. Can also look at what punitive damages were awarded in other, similar
cases

c. What is “malice”?

x. RULE: Intent to cause harm OR know that could be causing harm

but do not care as to the consequences
 I. CA – willful, conscious disregard of rights/safety of others

ii. Purpose – deter misconduct so court heavily weighs level of defendant’s

reprehensibility and whether conduct is SO reprehensible that want to deter it
further with punitive damages

a. Cannot use punitive damages to punish a defendant for injuries inflicted

on non-parties to the injury

iii. Constitutional Limitations on Punitive Damages

a. A party must have FAIR NOTICE that their actions would cause a certain
level of liability for punitive damages

x. Cannot be the case that punitive damages end up SO HIGH that

during litigation defendant could not even imagine paying award

I. How to determine if award is excessive

i. Degree of reprehensibility of defendant action

a. Nonviolence < violence

b. Trickery > mere negligence

c. Deliberateness

ii. Ratio between harm suffered and the punitive

damages awarded

iii. Amount of punitive award compared to civil or

criminal penalties a court could impose

iv. Trial Court Factors

a. RULE: At the trial court level, the court should look at the following
factors to determine the appropriate amount of punitive damages: (1) the
moral reprehensibility of the injurious act, (2) the amount needed to deter
subsequent similar actions, (3) in California, the wealth of the defendant,
and (4) the potential amount of punitive damages awarded in similar suits.
The appropriate ratio in which a trial court should determine punitive
damages is a 1:10 ratio.

v. Appellate Court Factors

a. RULE: In reviewing if the punitive damage awarded by the lower court

was constitutional and not so aggressive as to be excessive, the appellate
court must determine the reasonableness of the punitive damages, using a
 variety of factors, including: (1) the degree of reprehensibility of
defendant’s actions, (2) the ratio between harm suffered and punitive
damages awarded, and (3) the amount of punitive damages awarded
compared to civil or criminal penalties a court could impose.

INJUNCTIONS

I. Temporary Restraining Order (TRO)

i. TRO is the FASTEST remedy

a. TRO requires only 24-hour notice to be given to defendant

x. BUT, only lasts about 10 days

ii. RULE: TRO requires a plaintiff to show the case is (1) ripe, (2) not moot, (3)
there is a likelihood of irreparable harm to the plaintiff if the TRO is not granted,
and (4) the plaintiff is likely to prevail on preliminary and permanent injunctions

a. Ripe = There is a threat of imminent harm

b. Not moot = Defendant has NOT stopped the wrongdoing

iii. TRO focuses on maintaining status quo of parties

a. Possible court will err on side of caution and NOT grant TRO until it is
able to hear more evidence later on in process

II. Preliminary Injunction

i. Preliminary injunction will continue until matter goes to trial and there can be an
attempt to seek a permanent injunction

a. More notice is required for defendant so they have more time to begin to
gather evidence and defend themselves

ii. RULE: A preliminary injunction requires a plaintiff to show the case is (1) ripe,
(2) not moot, (3) the plaintiff will suffer irreparable injury if it is not granted
before trial, (3) that there is strong likelihood that the plaintiff will succeed in
getting a permanent injunction at trial, (4) the hardships weigh in favor of the
plaintiff and there will not be much burden on the defendant if the injunction is
erroneously granted, and (5) public interest weighs in favor of granting the
injunction

a. Ripe = Threat of imminent harm

b. Not Moot = Defendant has NOT stopped the wrongdoing

c. Irreparable Injury = There would be no adequate remedy at law

 x. Damages would be insufficient because they would be hard to
determine, calculate, immeasurable

d. Balance of Hardships = Plaintiff wants to show there is little to no

hardship on the defendant even in the event the preliminary injunction is
granted erroneously BUT plaintiff would have greater hardship if
injunction not granted at all

x. What if the injunction is erroneously granted?

I. Plaintiff must post bond in case defendant IS harmed

through an erroneous grant of a preliminary injunction

i. If a permanent injunction is NOT awarded,

defendant is given the bond as compensation for
damages that other injunction(s) could have caused

ii. Court may waive the bond if find the injunction was
brought in good faith

II. Bond amount determined by looking at certain factors

i. Amount of harm defendant could be caused if

injunction is erroneously granted

ii. How much defendant would be prejudiced at trial if

injunction is erroneously applied

e. Public Interests

x. Example: Free speech (1st amendment)

III. Permanent Injunction

i. RULE: A permanent injunction requires a plaintiff show (1) ripeness, (2) no

mootness, (3) irreparable injury with no adequate remedy at law, (4) a balance of
hardships showing the hardship on the defendant will have to be much greater on
defendant than on the plaintiff if injunction is to be denied, and (5) public interest

a. Ripe = Threat of imminent harm

b. Not Moot = Defendant has NOT stopped the wrongdoing

c. Irreparable Injury (factors to consider)

x. Everything to do with real estate

xx. Personal property that is irreplaceable (unique good)

 xxx. Intangible rights that cannot be bought, sold

xxxx. Damages cannot be calculated

xxxxx. Risk of further litigation

xxxxxx. Insolvent defendants with threatened injuries

ii. Modifying Injunctions

a. If there is a change in law or in fact the burden is on the party seeking the
change to show that the change warrants a change to the injunction

x. Must a condition UNFORESEEN at time injunction was made

IV. Specific Performance

i. Enforces performance of a contract after it has been breached

a. RULE: Specific performance can compel performance of a contract where

(1) there is a valid and enforceable contract with definite and certain terms
(2) the parties have met all conditions required or performance of the
conditions have been excused (3) the legal remedy is inadequate and (4)
the remedy is feasible for a court to supervise

DECLARATORY JUDGMENTS

I. Declaratory Order

i. RULE: Asking the court to determine rights and obligations of parties

a. Does NOT put an end to personal liabilities of parties

x. Merely an announcement of rights of parties

b. Makes getting an injunction easier

ii. Requirements of declaratory relief

a. Actual case or controversy

b. Ripeness (imminent threat of harm)

x. Does NOT require showing of irreparable injury

 iii. Assertions of Unconstitutionality

a. In criminal proceedings, the one facing penalty can argue

unconstitutionality as a COMPLETE defense

x. If there is an ongoing criminal case the federal court should NOT

take over the case and decide it for the state

RESTITUTION

I. Recission

i. RULE: An equitable remedy that allows a contractual party to cancel a contract

a. Recission via mistake

x. Mistake must be in connection with a MATERIAL fact

b. Recission via misrepresentation

x. RULE: For recission to occur through misrepresentation, there

must be a (1) false representation or omission of material fact (2)
which defendant knew, should have known was false, or was
innocently made and (3) the plaintiff reasonably relied on it to their
detriment

I. Detrimental Reliance = unjust enrichment

c. Recission via Undue Influence

ii. Recission can either put the parties back into the position they were in but for the
contract if benefit conferred OR if no benefit conferred merely cancel the contract

II. Reformation

i. Requires a valid PRIOR agreement

a. Only available on: mutual mistake, unilateral mistake, fraud

ii. Redrafting of a document for what it should have been but for a mutual mistake or
fraud by one of the parties

a. Fraudulent inducement

III. Replevin
 i. Property was wrongfully taken or detained

IV. Repudiation

i. RULE: Statement by obligor to obligee indicating that the obligor will commit a
breach that would itself give oblige claims for damages for a total breach

V. Accounting for Profits

i. RULE:

a. Example: Copyright Cases

x. If a piece of work was based on another’s original copyrighted

work but new author used significant amounts of their labor and
effort to transform it likely will be very little disgorgement of
profits

ii. Policy

a. Court has JURY come up with what they deem to be an appropriate split
of profits because it is best way to put plaintiff in rightful position with
least expense to defendant

x. Plaintiff may be deserving of some profits but not all if defendant

has put in significant work, effort, labor

iii. Overhead

a. RULE: An infringer may be allowed overhead costs from the grant of

profits that were not directly related to infringement or wrongful act at
issue

VI. Quiet Title

i. Focus on a claim and rules on it (statement of rights)

VII. Immunity

i. Absolute Immunity

a. Members of congress, President, prosecutors, judges

x. Do not want them to be sued for every decision they have to make

ii. Qualified Immunity

a. Carry out the policy (police, administrative agents)

 x. Shielded from civil damages in so far that conduct does not violate
established statutory or constitutional rights

I. No subjective element; objective intent (knew or should

have known)

CONSTRUCTIVE TRUSTS

I. Constructive Trust

i. RULE: Plaintiff shows that certain parts of his property were wrongfully obtained
by defendant and should be held by the defendant for benefit of plaintiff

a. Typically used in FRAUD cases, or breaches of contract for real property

ii. Elements to analyze

a. Retention of property by wrong-doer would be unjust enrichment

b. Sole trust obligation is to convey title of property to plaintiff

c. Plaintiff gets benefit of increase/appreciation in value

d. Does NOT apply where wrongdoer COMMINGLES money or

IMPROVES the property

iii. Tracing

a. If property taken via fraud, can trace through various forms the property
has taken in hands of tortfeasor (comingling)

x. Have to show FRAUD

b. Lowest Intermediate Balance Rule

x. Money take the form of various items that were purchased with it

xx. Cannot claim additional money they the party put in

I. Stuck at lowest amount the account took

xxx. Court assumes tortfeasor uses THEIR money first

I. Court assumes investments were done with victim’s money

II. Equitable Lien

i. Does NOT provide specific restitution of property, but creates security interest for
equitable debt
 a. Appropriate when commingles own funds with misappropriated funds

ii. Equitable lien is better when the value of the property has gone down

a. Get what was taken not the value it is worth now

SUBROGATION

I. Equitable Subrogation

i. Equitable = fairness

ii. Subrogation = can sue while standing the shoes of someone else

a. Occurs when paid debts of another (as if buying a loan)

x. Facts that allow this to arise?

I. Pay debt of someone else

II. Voluntary payment

i. Cannot just pay other people’s loans and then sue

III. No injustice to future lien holders

CONTEMPT

I. Civil Contempt

i. Coercive Contempt

a. RULE: Contempt designed solely to get a party to comply with court order

x. Employed by judge only so long as there is a substantial likelihood

that contempt will accomplish the purpose of enforcing compliance
(could become a criminal punishment; martyr for cause)

I. Burden of Proof – offending party

xx. As soon as the order is complied with it should be released

b. Must have NOTICE of the contempt

ii. Compensatory/Remedial Contempt

a. RULE: Contempt designed to make other party whole who was harmed as
a result of someone violating an injunction
 x. Applies only to damage done AFTER an injunction is issued

II. Criminal Contempt

i. RULE: Punishment like any other criminal prosecution which is prosecuted by

sovereign with plaintiff as the complaining witness

a. If punitive in nature then has to be criminal

b. Issues of due process

III. Collateral Bar Rule

i. RULE: Cannot violate an injunction and then in a contempt proceeding argue the
constitutionality of the injunction

a. Exception: Court had no jurisdiction, order has no pretense to validity,

attempted to appeal but met with only frustration and delay

IV. Injunctive Reach

i. Amendment is okay versus always being included in group affected by injunction

DEFENSES

I. Laches

i. RULE: Plaintiff is barred from bringing a claim if have unreasonably delayed in

bringing such claim

a. Delay must be one that is just enough to prejudice the defendant by not
being brought sooner (fact dependent)

i. Elements to Analyze

a. Unreasonable delay

b. Prejudice, harm to defendant

x. Economic, trial and evidence, speculative

II. Unclean Hands

i. RULE: Party seeking equitable relief must NOT be guilty of inequitable or

wrongful conduct with respect to subject matter of present suit
III. Statute of Limitations

i. RULE: Prevents plaintiff from bringing stale claim that should have been brought
against defendant at a previous, specified time period

a. Bootstrap Rule

x. RULE: Plaintiff cannot use a recent injury that occurred outside

the statute of limitations to allow for standing to sue on a previous
injury

I. HOWEVER, begins to run only upon reasonable discovery

IV. Equitable Estoppel

i. RULE: Defendant must show that (1) plaintiff made or did an act, form of
conduct, omission, affirmative statement and (2) defendant relined on such
conduct of plaintiff in connection with the misconduct

a. Defendant must have reasonably, justifiably relied on plaintiff’s conduct

b. Plaintiff must have known or reason to know (suspicion) that defendant

would rely on their conduct

c. Has to be FAIR

V. Waiver

i. RULE: Defendant must show that statements, other conduct, omission, silence by
plaintiff indicated that plaintiff would not enforce a legal right of theirs in the
future

a. Elements of Waiver

x. Intentionally

xx. Relinquishes

xxx. Known

xxxx. Right

b. If waiver is based on SILENCE, must be

VI. Unconscionability

i. Procedural Unconscionability
 a. Factors of Procedural Unconscionability

x. Unequal bargaining power

xx. Time and manner of contract formation

xxx. Economic hardship of party claiming unconscionability

ii. Substantive Unconscionability

a. Factors of Substantive Unconscionability

x. Contract itself is substantively unfair

xx. Contract is so one-sided that it should not be upheld in a court

ANCILLARY DAMAGES

I. Attorney’s Fees

i. RULE: Prevailing party may not recovery attorney’s fees unless there is some
special provisions of law that allows it

a. Exceptions: Bad faith by attorney or party; included in contract; statutory

exceptions (constitutional suits)

b. Only party can waive the attorney’s fees NOT the attorney