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2012-07-10 17:25:03
Equity remedies NC Bar

Equitable remedies
Show Answers:

  1. Generally what must a P have before seeking any remedy?
    a legal claim for relief
  2. What are the 2 broad remedy categories?
    • (1) money damages
    • (2) equitable relief 
  3. Why is equitable relief referred to as an extraordinary relief?
    • (1) equity operates on the D person in personam
    • (2) coercive meaning tha it is enforced by courts contempt power
    • (3) may effect interest of 3Ps
    • (4) more burdensome on the courts to frame, supervise, and enforce   
  4. Courts prefer to award money damages so in order for a court to award equitable relief, what is required?
    no adequate legal remedy
  5. What is meant when remedies are complementary?
    serve different purposes and protect different interests so may be sought together
  6. Election of remedies is generally raised by whom and for what?
    as a defense by the D
  7. What is the doctrine of election of remedies?
    when an injured party has 2 available but inconsistent remedies to addressa harm the party must choose b/t the possible remedies
  8. What are the prerequisites for obtaining elective relief of any kind?
    • (1) P must establish a substantive claim for liability
    • (2) P must demonstrate no adequate remedy at law or irreparable injury
    • (3) equitable decress is enforceable
    • (4) balance of equities justifies the equitable relief  
  9. Legal remedy is generally deemed inadequate in what 6 circumstances?
    • (1) nature of the harm itself can't be adequately repaired with $ damages
    • (2) K fo or purchase of unique or scarce goods
    • (3) equity is nec to prevent a multiplicity of judicial proceedings
    • (4) $ recoverable at law would be adequate but damages are so speculative in amount that any $ award is likely to be inadequate
    • (5) $ would be entirely adequate remedy but D is insolvent yet still capable of rendering the performance
    • (6) $ is adequate remedy but the D is likely to engage in behavior that will dissipate assets or otherwise render the D judgment proof 
  10. Does the mere inadequacy or lack of legal remedy establish an absolute right to equitable relief?
    no this is largely a matter of judicial discretion
  11. What does it mean that the equitable decree must be enforceable?
    specific and definite and D must be capable of compliance
  12. What is a prohibitory injunction?
    court orders the D to refrain from acting and court can sanction D for continuing the disallowed activity
  13. What is a mandatory injunction?
    court orders the D to perform an affirmative act and the court must supervise the act
  14. T/F - injunctions ordering a specific result are more easily enforceable than those ordering the D to carry on an activity
  15. What is the court balancing when determining if equitable relief is justified?
    the irreparable harm or inadequacy of the legal remedy to the P against the burden on the D of complying with the equitable relief
  16. What are the different types of equitable relief available?
    • (1) injunction
    • (2) SP
    • (3) rescission
    • (4) reformation
    • (5) quasi-K
    • (6) constructive trust
    • (7) equitable liens
    • (8) subrogation       
  17. Are the equitable remedies mutually exclusive?
    not necessarily and often overlap and/or work in tandem
  18. If an equitable defense applies does that also preclude any legal remedies?
  19. What are the possible equitable defenses?
    • (1) laches
    • (2) equitable estoppel
    • (3) waiver
    • (4) unclean hands
    • (5) undue hardship    
  20. What is the definition of an injunction?
    a court order to a person or entity, usually to refrain from doing a particular act
  21. What is the most common form of injunction?
  22. What is a preventive injunction designed to do?
    to prevent wrongful conduct so as to prevent a future harm to the P
  23. What are the requirements for a preventive injunction?
    • (1) the danger of future harm is real
    • (2) no likelihood of voluntary cessation by the D such as would render the issue moot 
  24. What does the court consider when determining if the danger of future harm is real for a preventive injunction?
    • (1) propensity of D to commit the wrongful act
    • (2) consequences of the act are certain
    • (3) iminent threat of injury to the P  
  25. What are the factors considered by the court when determining whether there is a reasonable probability that the D will engage in wrongful acts in the future?
    • (1) character of past violations
    • (2) sincerity of D intent to comply with the legal obligation
    • (3) effective discontinuance of the activity  
  26. What is a reparative injunction designed to do?
    repair the continuing harmful consequences of past wrongful acts and restore P to the condition they were in before the alleged injury
  27. What is a structural injunction designed to do?
    eliminate the harmful consequences of past wrongful acts and bar future wrongful acts of the same type
  28. What types of disputes do structural injunctions typically encompass?
    broader-scale dispute than one b/t a single P and single D
  29. When is the court not required to first balance the equities when determining whether to issue injunctive relief?
    D conduct is deemed wilfull
  30. For the court to issue injunctive relief the P must show:
    • (1) inadequacy of legal remedies
    • (2) irreparable harm
    • (3) balancing of hardships  
  31. In what circumstances is injunctive relief generally not available?
    • (1) to prevent breach of K that isn't specifically enforceable
    • (2) to enforce criminal law other than public nuisance
    • (3) stay court proceedings
    • (4) enjoin speech   
  32. In what types of cases do injunctions typically raise 1st A problems?
    • (1) personal defamation and trade libel cases
    • (2) publication of printed material involving claims of obscenity or copyright infringement
    • (3) protection of TM and TS involving commercial speech  
  33. Temporary injunctive relief consists of what 2 remedies?
    • (1) TRO
    • (2) preliminary injunctions 
  34. Why is temporary relief considered an especially extraordinary remedy?
    issues prior to a decision on the merits of the case
  35. In what kind of situation is a TRO used?
    emergency situation when the injunction must issue before any hearing and lasts only a few days
  36. How long does a preliminary injunction, if granted, last?
    until a decision on the merits
  37. What is one purpose of temporary injunctive relief?
    maintain the status quo during litigation to avoid irreparable injury to the P during the course of the litigation
  38. What are the 4 criteria for determining whether preliminary relief should be granted?
    • (1) P likely to succeed on the merits of the claim
    • (2) P will suffer irreparable injury
    • (3) balance of hardships or equities lies with the P  
    • (4) public interest will be served by ordering the TRO 
  39. Is it required in all circumstances for a TRO to be granted with notice and a hearing?
    not in exigent circumstances if it appears that irreparable injury will result to the P before the matter can be heard on notice
  40. If a TRO is issued w/o notice and a hearing, what may the P's attorney be required to do?
    certify as to efforts made to give notice to the other party or reasons why notice shouldn't be required
  41. What is a classic example for why notice shouldn't be required for issuing a TRO?
    P fears that D will act in a manner that will frustrate the benefits of the TRO being requested
  42. Is notice required for the issuing of a preliminary injunction?
  43. A P awarded a temporary injunction is required to post a bond that serves what 2 functions?
    • (1) provides source of funds from which wrongfully enjoined D can collect damages sustained as a result of it
    • (2) caps amount of damages that can be collected from P if D is wrongfully enjoined 
  44. The amount of a preliminary injunction bond is determined based on what factors?
    • (1) potential loss to the D
    • (2) potential harm to P
    • (3) public importance of rights involved  
  45. Are government parties seeking interlocutory injunctive relief required to post bond?
  46. How long does a preliminary injunction last?
    generally until the litigation is over
  47. When can decisions involving temporary injunctions be appealed?
  48. Which injunctions aren't generally stayed pending full review?
  49. Which injunctions are generally stayed pending review when so requested by a D?
  50. When is a permanent injunction issued?
    after the P has prevailed on the substantive claim and demonstrated a need for continuing protection
  51. Since a permanent judgment is a final judgment, it continues until when?
    it expires or is dissolved
  52. What are the 2 types of contempt?
    civil & criminal
  53. How should civil contempt be tailored?
    to achieve its desired aim and shouldn't be punitive or disproportionate to the harm that compliance with the order would avoid
  54. What are the 2 types of civil contempt?
    • (1) compensatory - sanction is $ and based on P loss
    • (2) coercive - conditional in nature and must be lifted when compliance with injunction is achieved
  55. What is criminal contempt?
    crime agaisnt the dignity and authority of the court and is indpt of the underlying case that produced the order
  56. What is the punishment for criminal contempt?
    a fixed sentence and/or a fine which is payable to the court
  57. What is specific performance?
    mandatory injunction requiring the D to perform to the requirements in the K
  58. To obtain SP of a K, the P must demonstrate the prerequisites for equitable relief along with what?
    • (1) K at issue is enforceable
    • (2) all conditions precedent have been satisfied
    • (3) K terms at issue are sufficiently certain
    • (4) D is able to perform or the performance can be abated
    • (5) it would be fair to specifically enforce the K    
  59. Traditionally, courts required that both parties be entitled to SP or neither could receive it but today courts generally require only what?
    the party to be held to SP be ready and able to perform
  60. If the P seeks SP, the P must establish what?
    that $ damages are inadequate to restore him to the position he would have been in had the breaching party performed
  61. With land sale K and SP, what do courts presume?
    breach of an agreement to transfer real property can't be adequately relieved by pecuniary compensation b/c of the unique character of land
  62. What is the doctrine of equitable conversion?
    under an executory real estate sales K, the B is regarded as the equitable owner of the property and theS is viewed as the equitable owner of the balance of the purchase price
  63. What determines the rights of the parties upon an event making full performance of a land sale K impossible?
    doctrine of equitable conversion
  64. What happens if the B dies before the land sale K has been performed?
    B heirs/devisees may specifically enforce it and the duty to pay purchase price is a K obligation that the B executor is required to pay out of the B estate
  65. What happens if the S dies before the land sale K has been performed?
    • right to K price passes as part of the personal property of S estate
    • proper party to enforce the K is the executor of the S estate 
  66. According to the UCC, SP is available for what kinds of goods?
    • (1) unique
    • (2) specially manufactured goods
    • (3) goods that are scarce on the market   
    • (4) goods from competitors are deemed inferior 
  67. When is SP of K for the sale of closely held corporate stock available?
    • (1) no readily ascertainable market price
    • (2) stock represents the voting control of the corporation 
  68. When will courts generally enforce or even imply a CNC?
    during the term of employment K to prevent an EE with unique or highly marketable skills from breaching the K in order to work for a competitor to the ER
  69. When are courts are generally reluctant to imply a CNC?
    after the employment has been terminated unless there are TS or other confidential business information to be protected
  70. The factors for determining the reasonableness of CNC are what?
    • (1) scope of activities involved
    • (2) geographic limits
    • (3) duration of the restrictions  
  71. When is SP generally not available?
    K is for personal services and thus requires the parties to continue a relationship and/or where supervision of the agreement by the court would be onerous
  72. What kinds of K are generally not enforceable by SP?
    • (1) employment K
    • (2) partnership agreements
    • (3) franchise agreements
    • (4) construction K   
  73. What is a reformation or K revision?
    court modifies or alters a written agreement to make it conform to the actual intent of the parties
  74. What theory is reformation based on?
    there was a valid agreement b/t the parties but the writing fails to conform to their understanding
  75. Reformation is only available in what 2 cases?
    • (1) fraud in the inducement
    • (2) mistake in execution 
  76. If the court determines there was no valid K to begin what is the appropriate equitable remedy?
  77. What is meant for fraud in the inducement for reformation?
    if one party induces the other party to execute the K by fraudulently misrepresenting the doc's contents, reformation may be granted to reflect the understanding of the innocent party
  78. Can reformation be granted when both parties are mutually mistaken or unaware that the written instrument constitutes a deviation from their original oral agreement?
  79. What is the appropriate remedy when either party claims to haev made a mistake in entering into the K?
    rescission b/c no meeting of the minds therefore no valid K existed
  80. If either party knows or has reason to know that the written instrument doesn't embody the true agreement, reformation may be granted to reflect what?
    understanding of the unkowing party
  81. Will reformation be denied simply b/c the party seeking it is chargeable with negligence?
  82. What are the defenses or limitations to reformation?
    • (1) SoF
    • (2) PER
    • (3) protection of rights to 3Ps  
  83. If the written agreement doesn't satisfy the SoF, can it be reformed?
    not typically unless the doctrine of part performance applies
  84. Why isn't PER a valid defense to reformation?
    the court must attempt to learn the original agreement of the parties
  85. Revision or reformation of K is generally available only insofar as it can be done w/o prejudice to what?
    rights acquired by 3P in GF and for value
  86. Is a valid K required for rescission?
    no as the parties are seeking to return to their original state before the alleged K was formed
  87. What is the effect of rescinding a K?
    it is rendered void or cancelled
  88. What will courts generally order simultaneously with a rescission order?
    restitution to restore the parties to the position they were in before the execution of the K
  89. When the D breaches and the P sues for breach seeking rescission, the P must choose b/t what?
    • affirming the K and seeking damages/SP
    • OR
    • disaffirming the K and seeking rescission 
  90. What must the party be prepared to do in order to invoke the rescission remedy at law?
    to tender back what he has received under the terms of the K and thus restore the parties to the position they were in before the K
  91. Rescission in equity is traditionally available where what?
    consideration can't be returned but merits the case or likelihood of irreparable harm justify the remedy
  92. Is rescission available as a matter of right or selection?
    no - to seek rescission the P must invoke a proper basis or ground that allows for such relief
  93. What are the grounds for rescission?
    • (1) misrepresentation
    • (2) mistake
    • (3) substantial breach
    • (4) illegality
    • (5) failure of consideration
    • (6) lack of capacity
    • (7) impossiblity of performance
    • (8) duress
    • (9) undue influence        
  94. What 2 elements must a P show when seeking for rescission for innocent misrepresentation?
    • (1) innocent misrepresentation was material to the K
    • (2) P reasonably relied upon the innocent misrepresentation 
  95. When does fraudulent misrepresentation occur?
    D knowingly makes a false representation that is relied upon to the P detriment
  96. What are the elements to establish rescission for mutual mistake?
    • (1) both parties are  mistaken as to a fact underlying the K
    • (2) mistaken fact goes to the very essence of the K
    • (3) mistake had material effect on the bargain
    • (4) party seeking rescission didn't AoR for the mistake   
  97. How may a party assume the risk of a mistake in one of 2 ways?
    • (1) by express terms of the K
    • (2) where the party had the means to discover the truth or should have known his knowledge as limited but treated his limited knowledge as adequate 
  98. What 3 elements are required for rescission based on unilateral mistake?
    • (1) mistake is about a basic assumption underlying the K
    • (2) mistaken party will suffer extreme hardship by enforcement of the K and D isn't prejudiced
    • (3) other party knew of the P mistake and proceeded regardless  
  99. What is the goal of restitution?
    restore the D to his rightful position and prevent his being unjustly enriched at the P expense
  100. What is the focus of restitution?
    on the D gains rather than the P losses
  101. What is the inquiry involved in restitution?
    whether the P is entitled to the restoration of benefits which unjustly enriched the D
  102. Does restitution require the P to establish the inadequacies of legal remedies?
    not if he can establish that restitution is nec to prevent unjust enrichment
  103. Quasi-K is the term used to describe what kind of situation?
    allows P to recover D unjust gains - court implies a K where D is obligated to return item to P
  104. What are the requirements of quasi-K?
    • (1) P conferred a benefit on D
    • (2) D realized the benefit
    • (3) retention of the benefit under the circumstances is unjust  
  105. What constitutes a benefit?
    any form of advantage
  106. When is retention of a benefit deemed unjust for quasi-K?
    some wrongful conduct on part of the recipient, mistake on part of the provider of the benefit, or both
  107. Restitution of the benefit received by the D should do what?
    make the P whole for the loss suffered and may even provide him with a windfall profit incidentally
  108. Is it possible to have a benefit w/o a loss or a loss to the one who transfers value w/o a real benefit to the recipient?
  109. Restitution focuses on D gain rather than P loss and seeks to make the recipient do what?
    return the benefit he unjustly holds
  110. What is disgorgement?
    stripping the D of ill-gotten gains, particularly where benefit was derived from violation of statute such as the securities laws
  111. What particular form of restitution does disgorgement refer to?
    where some public interest is involved
  112. Disgorgement of profits should be used on a breach of K that is what and to deter what?
    both material and opportunistic in order to deter conscious wrongdoers from retaining the profits that result from their opportunistic breach
  113. What is a constructive trust?
    restitutionary remedy designed to prevent unjust enrichment of D by effectuating transfer of property from D to P
  114. What does a constructive trust seek to do?
    retake from a wrongder the title to property he obtained as a result of misrepresentation thru conduct such as fraud, mistake, undue influence, or breach of fiduciary duty
  115. What are the requirements for a constructive trust?
    • (1) D holds legal title to specific property that rightfully belongs to P
    • (2) D breached a fiduciary duty
    • (3) retention of the property by D would result in unjust enrichment  
  116. When a constructive trust is warranted as a remedy, what does the court order?
    that D hold the property at issue in trust for the P and is required to account for the profits generated by the property
  117. What cuts off a constructive trust?
    transfer of property to bona fide purchaser
  118. May a P trace to obtain a constructive trust with respect to any property that was purchased with proceeds of the misappropriated property?
  119. What is an equitable lien?
    charge or encumbrance imposed against specific property that makes the property stand as security for debts or obligations owed
  120. What cuts off an equitable lien?
    transfer of property to a bona fide purchaser
  121. Between constructive trusts and equitable liens, which one conveys title and which one imposes an encumbrance?
    • constructive trust - title
    • equitable lien - encumbrance 
  122. Between constructive trusts and equitable liens which allows for the recovery of specific property and which provides for the receipt of $ upon the sale of the property?
    • CT - recovery of specific property
    • EL - receipt of money upon the sale of the property 
  123. When is equitable lien a proper remedy?
    when the D didn't acquire title with misappropriate funds to used those funds to improve the property
  124. Between constructive trusts and equitable liens, which increases the value of the traced assets and which is limited to a certain sum?
    • CT - increases in value of traced assets
    • EL - limited to certain sum 
  125. What principal is subrogation based on?
    if A (subrogee) has paid B's (subrogor) obligation to C it is only fair and just that A receive reimbursement from B or B is unjustly enriched
  126. What does it mean that subrogation is a derivative claim?
    subrogee derives their claim from the subrogor therefore his rights rise no higher than those of the subrogor and any defense against subrogor is typically available against the subrogee
  127. What is the result if the subrogee acts as a volunteer or intermeddler?
    there is no unjust enrichment and no subrogation
  128. Can subrogation arise by agreement?
    yes and the agreement will govern the rights of the subrogor and subrogee
  129. When does equitable subrogation arise by operation of law?
    there is a showing of unjust enrichment
  130. What are equitable defenses?
    defenses that D may raise to equitable relief and are independent from any defense to the substantive claim
  131. What is the basic notion regarding a court sitting in equity?
    designed to do justice and won't grant relief to claimant whose own behavior is somehow tainted with respect to the claim
  132. A court of equity has the discretion to deny equitable relief if what?
    • (1) claimant engaged in unconscionable or otherwise wrongful conduct in securing the right being asserted
    • (2) D had been prejudiced by prior inconsistent conduct or undue delay by claimant in pursuing the claim 
  133. What happens if equitable defenses aren't asserted in a timely manner?
    deemed waived
  134. May equitable defenses be asserted against the gov?
  135. An equitable remedy will be barred by the doctrine of laches if what 2 conditions are met?
    • (1) P has waited unreasonable length of time in asserting their claim
    • (2) D has suffered prejudice as result of P unreasonable delay 
  136. The court decides whether denial of equitable relief due to laches would be just based on what?
    • (1) reasons for P delay including diligence
    • (2) consequences of the delay 
  137. If the SoL hasn't run on a claim does that mean that laches doesn't apply?
    not nec b/c the length of time in SoL is guidance for what is reasonable or unreasonable delay b/c doctrine of laches isn't predicated merely on the passage of time but also on prejudice to to the D
  138. If the SoL has run on the substantive claim, the P bears the burden of proving what regarding laches in order to obtain equitable relief?
    facts that would negate laches or toll the SoL
  139. A lack of vigilence or diligence on the P part may do what regarding laches?
    render the delay inexcusble
  140. Will lack of knowledge or ability to discover the facts underlying the right to relief support application of the doctrine of laches?
  141. What are the 3 elements of equitable estoppel?
    • (1) P by words, conduct, or silence caused D to believe fact or certain state of affairs existed
    • (2) D reliance on P words, conduct, or silence
    • (3) D prejudiced as result of reliance  
  142. When can't equitable estoppel not be asserted?
    against the gov or when it would nullify a strong public policy
  143. What is equitable extension of the SoL?
    D may be estopped from asserting SoL to an untimely claim when his conduct induced the P to refrain from filing during the SoL so long as the SoL itself doesn't expressly exclude equitable extension
  144. What is a waiver?
    voluntary and intentional relinquishment of a known right - both express or inferred from P conduct
  145. Is reliance by D required to establish waiver?
  146. Regarding unclean hnds, what maxims does equity follow?
    • (1) he who comes into equity must come with clean hands
    • (2) no on can take advantage of his own wrong
    • (3) b/t those who are equally in the wrong the law won't interpose  
  147. The defense of unclean hands will prevent granting equitable relief to a P who was engaged in what?
    improper or unfair conduct in the course ofthe same X for which P seeks equitable relief
  148. Improper conduct in the course of the same X for which the P seeks equitable relief means what?
    close connection to the matter in controversy forming the substantive claim
  149. Do the majority of courts apply the unclean hands doctrine at law?
  150. In injunction cases, undue harship is considered by balancing what in determining whether the injunction should issue in the first place?
    equities to each party and the public
  151. The doctrine of undue hardships is commonly invoked in what kinds of cases?
    encroachment cases to prevent issuance of injunctive relief