Remedies – Contracts, Torts & Equity

64 vocabulary flashcards covering key terms, definitions, and element tests from the Remedies lecture notes.

Expectation Damages

Compensatory damages that put the non-breaching party in the position it would have been in had the contract been performed.

Elements to Recover Expectation Damages

(1) Actual cause; (2) Foreseeability; (3) Certainty (not speculative); (4) Unavoidability (mitigation); minus costs avoided.

Reliance Damages

Reimburses expenditures made in reliance on a contract to place the plaintiff as if the contract never existed.

When Reliance Damages Are Awarded

Available when plaintiff’s reliance was foreseeable and expectation damages are too speculative.

Consequential Damages

Losses that arise from the plaintiff’s special circumstances (e.g., lost profits) resulting indirectly from the breach.

Requirements for Consequential Damages

(1) Reasonably foreseeable at formation; (2) Defendant knew or had reason to know of the circumstances; (3) Reasonably certain.

Incidental Damages

Reasonable costs incurred dealing with the breach, such as expenses of returning or storing non-conforming goods.

Restitution Damages (Contract)

Value of the benefit conferred on defendant to prevent unjust enrichment; cannot be recovered with expectation damages.

Punitive Damages in Contracts

Generally unavailable unless the breach is accompanied by a tort allowing such damages (e.g., fraud).

Liquidated Damages Clause – Validity Test

(1) Actual damages were difficult to estimate at formation; (2) Stated amount is reasonable to anticipated/actual loss.

Effect of Liquidated Clause

If valid, only the stated amount is recoverable; if invalid, plaintiff may seek actual damages.

Buyer’s Damages in Land Sale Breach

May recover price paid, FMV–contract price difference, title/closing expenses, prep-to-occupy costs, consequential damages, and interest.

Seller’s Remedy in Land Sale Breach

Typically keeps the “earnest money” deposit as liquidated damages.

UCC Buyer’s Remedies

Cancel, refund payments, cover or market damages, plus incidental & consequential damages.

Cover Damages (Buyer)

Contract price minus price of good-faith substitute purchase.

Market Damages (Buyer)

Contract price minus market price at time & place buyer learned of breach when no proper cover.

Loss-in-Value Damages

Value promised minus value of non-conforming goods when buyer keeps them.

UCC Seller’s Remedies

Withhold delivery, cancel, resale/cover damages, market damages, lost profits (lost-volume), stop delivery, or replevy identified goods.

Cover Damages (Seller)

Contract price minus resale price if resale done in good faith & commercially reasonable manner.

Market Damages (Seller)

Contract price minus market price at time & place for tender.

Lost Volume Seller

Seller with unlimited inventory may recover lost profits when buyer breach deprives an additional sale.

Seller’s Right to Replevy – Elements

Buyer insolvent on receipt, demand within 10 days (unless written solvency misrepresentation), and goods unsold to BFP.

Incidental Damages (Seller)

Commercially reasonable expenses resulting from buyer’s breach.

UCC Contractual Modification of Remedy

Parties may add/limit remedies or alter damage measures by agreement.

Exclusive Remedy Clause

Remedy is sole relief only if contract expressly states it is exclusive.

Remedy Fails of Essential Purpose

If an exclusive/limited remedy fails, aggrieved party may use any UCC remedy.

Limiting Consequential Damages (UCC)

Permitted unless unconscionable; prima facie unconscionable for personal-injury consumer goods.

Quasi-Contract (Unjust Enrichment) Elements

(1) Benefit conferred; (2) Reasonable expectation of payment; (3) Defendant requested or accepted benefit; (4) Unjust enrichment absent payment.

Damages in Quasi-Contract

Only restitution (value of benefit) or reliance damages available.

Reformation

Equitable remedy rewriting a contract to reflect true intent due to misrepresentation or mutual mistake.

Rescission

Cancels contract when formation problem exists; may be sought alongside damages but election bars later rescission.

Specific Performance – Requirements

Valid contract, plaintiff performed or ready, legal remedy inadequate, enforcement feasible, and no defenses.

Mutuality Doctrine (Modern)

Satisfied if one party can assure performance; both parties need not literally be capable of specific performance.

Tort Legal Remedies

Compensatory, consequential, nominal, punitive, and restitution damages.

Compensatory Damages – Tort

Place plaintiff as if no injury; must satisfy cause, foreseeability, certainty, and mitigation.

Non-Economic Loss Certainty Rule

Pain & suffering not subject to strict certainty; future earnings based on lost earning capacity, not past wages.

Nominal Damages

Token sum awarded to vindicate rights when no actual loss; unavailable where actual damages are an element.

Punitive Damages (Tort)

Require actual or nominal damages, proportionality, and willful, malicious, or egregious conduct.

Restitution Damages (Tort)

Value of benefit defendant unjustly obtained from plaintiff.

Fraud Damage Measures

Either out-of-pocket loss (actual) or benefit-of-the-bargain expectancy.

Conversion Damages

Possession of property or its FMV at time of conversion plus recovery efforts costs.

Trespass to Chattels Damages

Actual damages, including repair costs, for harm to personal property.

Trespass to Land Damages

Nominal allowed; if actual harm, recover diminution in value or cost of repair and possibly emotional distress.

Temporary Restraining Order (TRO)

Emergency injunction preserving status quo to prevent immediate, irreparable harm until hearing.

Ex Parte TRO Requirements

Sworn facts of immediate harm, certification of notice efforts, and security bond (except U.S. government).

Federal TRO Expiration

Automatically ends after 14 days unless extended for good cause or by opposing party consent.

Preliminary Injunction Elements

(1) Likely success on merits; (2) Likely irreparable harm; (3) Balance of hardships favors movant; (4) Public interest served; notice & bond required.

Adequate Legal Remedy & PI

If money damages suffice, court should deny preliminary injunction.

Mandatory vs. Restraining Injunction

Mandatory compels action; restraining prohibits action; both available preliminarily or permanently.

Permanent Injunction Elements

Irreparable injury, inadequate legal remedy, balance of hardships, and no disservice to public interest after trial on merits.

Declaratory Judgment – Art. III Test

Substantial, immediate, and real controversy between adverse parties sufficient to satisfy case-or-controversy requirement.

Equitable Lien – Elements

Defendant wrongfully obtained title and would be unjustly enriched; court orders sale with proceeds to plaintiff (deficiency allowed).

Constructive Trust – Elements

Defendant wrongfully obtained title and unjust enrichment; property held in trust and returned to plaintiff (includes appreciation).

Constructive vs. Equitable Lien

Constructive trust gives plaintiff the property’s increase in value; equitable lien gives sale proceeds, no appreciation.

Replevin – Requirements

Defendant wrongfully withholds personal property that plaintiff has right to possess; pretrial recovery with hearing & bond.

Ejectment – Requirements

Defendant in actual possession wrongfully withholds real property that plaintiff has right to possess.

Purchase Money Resulting Trust (PMRT)

One party pays full purchase price but titles real property to another; payer is beneficiary, title holder is trustee.

Pro Rata Resulting Trust

Payer supplies only part of purchase price; trust proportionate to contribution.

Laches Defense

Unreasonable delay plus prejudice to defendant bars equitable relief.

Unclean Hands Defense

Plaintiff’s own improper conduct related to lawsuit bars equitable relief.

Mitigation of Damages Doctrine

Plaintiff cannot recover losses that could reasonably have been avoided without undue risk or burden.

Intentional Misrepresentation Elements

False material fact, scienter, intent to induce, actual & reasonable reliance, and damages.

Negligent Misrepresentation Elements

False material fact supplied for business guidance, defendant’s negligence in obtaining/communicating, foreseeable reliance, actual & reasonable reliance, and damages.

Duty to Disclose – When Arises

Active concealment, fiduciary relationship, need to correct earlier mistake, or to prevent prior statement from being misleading.