Equity

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apgiering
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94053
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Equity
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2011-07-14 20:48:13
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NY Bar Exam
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NY Bar Exam
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  1. What are equitable remedies?
    Injunctive relief against tortious conduct, specific performance, rescission, and reformation.
  2. Is there an aboslute right to equitable relief?
    No. It is discretionary with the court.
  3. Will equitable relief be granted if it would cause disproportionate harm to the public or the party against whom relief is sought?
    No.
  4. Is there a right to a jury trial in equity?
    No.
  5. When will equitable remedies be available?
    When there is no adequate remedy at law.
  6. What does equity act upon?
    The person.
  7. Will equity take jurisdiction when there are no practical means to enforce its decree?
    No. The court must have the power to force compliance and must be able to determine whether there has been compliance.
  8. Will equity grant relief only where a property right is present?
    As a general rule. Some courts require only a protectible interest.
  9. How does equity prevent a threatened wrong or injury, or set right an injury that has already been inflicted?
    By granting an injunction.
  10. What will an injunction order?
    The defendant either to cease doing (negative injunction) or commence performing (mandatory injunction) a certain act.
  11. Is personal jurisdiction over the defendant required for an injunction?
    Yes.
  12. How are injunctions enforced?
    By holding the noncomplying party in contempt.
  13. How are injunctions classified?
    Mandatory or negative, interlocutory or permanent.
  14. What questions must be answered to determine whether injunctive relief is appropriate?
    • Is the legal remedy inadequate?
    • Is there a property right or protectible interest involved?
    • Is enforcement feasible, practicable, and effective to vindicate the right?
    • Are the hardships balanced?
    • Does the defendant have any defenses?
  15. Describe preliminary injunctions.
    They are aimed at maintaining the status quo until trial on the merits, but do not resolve any permanent rights between the parties.
  16. When can permanent injunctions be issued? Are they binding on the parties?
    Only after a full hearing on the merits. They are binding on the parties.
  17. How long does an injunction remain in full force and effect?
    Until it has been vacated, modified, or set aside; it may not be ignored even if erroneous, unless the court was totally without jurisdiction.
  18. What is the test for injunctive relief for nuisance?
    Consider the baance of hardships. Injunctive relief against nuisance will generally be granted only against a private nuisance; an individual will not have the right to enjoin a public nuisance unless he can show that he has standing to sue, e.g., a special injury.
  19. What is the test for injunctive relief for trespass to land?
    Consider the balance of ahrdships. Injunctive relief is proper where the trespass is continuous.
  20. What is the test for injunctive relief for waste?
    If waste exists, is it destructive, permissive, or ameliorative? Generally, equity will not grant injunstice relief in ameliorative waste situations.
  21. What is the test for injunctive relief for conversion of or trespass to chattels?
    These torts involve interference with an owner's interest in a chattel. Injunctive relief is proper where th einterference is continuous or the converted chattel is unique.
  22. What is the test for injunctive relief for defamation?
    Look for the existence of a property right, but remember that equity courts are hesitant to enjoin mere libel or slander because of free speech rights.
  23. What is the test for injunctive relief for invasion of privacy?
    At common law, no injunction would issue against invasion of privacy, since privacy was construed as a purely personal right. In New york, the courts have uniformly held that there is no cause of action for invasion of privacy apart from the Civil Rights Law (exception for implied promise of confidentiality made by a physician to a patient).
  24. What is the test for injunctive relief for abuse of judicial process?
    This may be a (i) wrongfuly instituted suit or (ii) wrongfully obtained judgment. Regarding the first type of abuse, recall that the court can enjoin the litigants, not the other court. As to a wrongfully obtained judgment, only extrinsic (not intrinsic) fraud is sufficient for equitable relief against enforcement of the judgment.
  25. What is the test for injunctive relief for trade libel (a form of unfair competition)?
    Remember equity courts are more likely to enjoin trade libel than "personal" defamation.
  26. What is the test for injunctive relief for tinducing breach of contract and/or refusal to deny (a form of unfair competition)?
    An injunction is generally proper when a defendant encourages someone to breach a contract with, or refuses to do business with, defendant's competitor.
  27. When is a defendant exempted from injunctive relief in an inducing breach of contract and/or refusal to deal action?
    When his attempt to induce third parties in their relationship with someone is privileged. In determining whether a privilege exists, the courts will consider the following: (i) What kind of relationship is defendant's conduct affecting? (That is, inducing someone to breach a contract is worse that inducing a refusal to deal.); (ii) What is the nature of defendant's conduct? (The "softer" the method of inducement, the more likely it is privileged.); (iii) What is the relationship between parties? If defendant is a competitor of plaintiff, he may have a privilege to induce a refusal to deal, but this privilege is usually not extended to cover inducements to breach a contract? What is the relationship to the third party being induced? If defendant has responsibility for the third party or a financial interest in the third party, or the third party sought his advice, there is likely a privilege; (iv) What are defendant's motives?; and (v) What social interests might be advanced?
  28. What is the test for injunctive relief for use of competitor's trade secrets?
    A trade secret will be protected by the courts.
  29. When is property a trade secret?
    A trade secret is information not readily available that gives its possessor a competitive advantage.
  30. When is a trade secret wrongfully obtained?
    Was the document stolen or memorized? Was the taking accomplished by improper conduct? Courts are more likely to issue an injunction if the information was wrongfully obtained?
  31. Is an injunction more likely if there was a fiduciary relationship or a contract relationship in a trade secrets claim?
    Yes. Express covenants not to disclose trade secrets are always specifically enforceable. Howeer, an express contractual covenant is not required in seeking an injunction against disclosure of trade secrets.
  32. Who may be enjoined in a trade secrets case?
    Both the wrongful taker and/or the person who intends to use the trade secret can be enjoined.
  33. What theory should apply if a plaintiff seeks equitable relief in a trade secrets case?
    The theories for liability include (i) violation of a property right in the trade secret, (ii) breach of fiduciary relationship, and (iii) breach of contract.
  34. Will an injunction be available to prevent infringement of a protectable trademark interest?
    Yes.
  35. What terms are not protectable trademark interests and are not entitled to trademark restrictions?
    • Generic terms;
    • Descriptive terms;
    • Geographic designations; and
    • Personal names.
  36. When does trademark infringement arise?
    When there is a pulic likelihood of confusion as to the source of the goods (this is a question of fact. Look to similarity of: marks, goods, geographical marketplaces, types of marketplaces, customers, and price. Also consider the intention of the "second infringing" mark's proprietor.
  37. What is the key to a trademark/trade name case?
    Likelihood of confusion.
  38. Do the majority of jurisdictions grant injunctive relief to prevent dilution of trademark (i.e., where original mark is so strong that if used by anyone for anything--even goods in a different market--the public may still associate it with the original mark proprietor)?
    No.
  39. Can an otherwise protectable trademark lose its protection if the proprietor does not designate it as a "trademark" and the public subsequently adopts it as a generic term?
    Yes.
  40. What is a trade name?
    A trade name identifies the source of goods, services, and businesses.
  41. What is required for injunctive relief in a trade name infringement case?
    There must be a secondary meaning present and the infringing name must be so similar as to be likely to cause confusion. (Analysis is essentially the same as for trademarks.)
  42. What is the test for injunctive relief in a copyright infringement case?
    Injunctive relief is not available for copyright infringement absent compliance with the federal statute. But state common law remedies still apply (i) for works not fixed in a tangible medium of expression, or (ii) where the rights involved are not equivalent to copyright.
  43. What is the test for injunctive relief in a patent infringement case?
    The common law protects the invention's first introduction to the public. Further protection can be had only by compliance with federal law. (Analysis is roughly similar to copyright protection.)
  44. What is the test for injunctive relief in a right to imitate-product simulation case?
    There is no protection against imitation of one's products unless there is patent protection. Exceptons to the rule exist where there is (i) deception or (ii) improper taking.
  45. What is the test for injunctive relief in an appropriation of ideas case?
    State courts have a limited right to protect ideas not protected by federal patent and copyright law. Exceptions to the rule exist where there is (i) deception or (ii) improper taking.
  46. May plaintiffs seek injunctive relief against infliction of physical harm?
    Generally, yes.
  47. What is a legal remedy?
    Money damages, replevin, or ejectment.
  48. When might money damages be inadequate to make the plaintiff whole?
    • Damages are speculative;
    • Defendant is insolvent;
    • The injury is irreparable;
    • A multiplicity of actions might be necessary; or
    • Plaintiff has no right to damages (e.g., the tort is only prospective.
  49. When might replevin be inadequate to make the plaintiff whole?
    If defendant could put up a replevin bond for a unique chattel or if there has been change in the chattel (so that the sheriff would not be able to identify it).
  50. When might ejectment be inadequate to make the plaintiff whole?
    The sheriff refuses to act.
  51. Is the modern trend to give relief, even absent a property right?
    Yes, so long as there is a "protectable" interest, which is something less than a property right (e.g., a right of privacy action).
  52. Is enforcement more feasible for a negative injunction or a mandatory injunction?
    A negative injunction is easier because no supervision is required. The recent trend is to be more liberal in giving mandatory injunctions.

    In these cases, look to the complexity of the act to be performed and whether continuous acts are required. Remember, a court may avoid the problem by couching the decree's terms negatively.
  53. Will a court grant injunctions if it does not have sufficient contacts with the defendants?
    No. The court is more likely to grant injunctions if the defendant is a resident of the court's jurisdiction. The court is hesitant to grant a mandatory injunction in these cases, but will still do so under proepr circumstances.
  54. How do you balance hardships in considering whether to apply an injunction?
    Weigh the benefit to the plaintiff if the injunction is granted against the hardship to defendant that would result from the injunction. If the benefit to plaintiff is greatly outweighed by the burden on defendant, the court generally will not issue an injunction. Also, consider the defendant's behavior: A willful defendant generally will not profit from this rule. Neither will a defendant who has proceded against the plaintiff's assertion of rights.
  55. Can a court award combination injunction/money damages?
    Yes.
  56. Does the defendant have any defenses to an injunction?
    Both standard tort defenses and equitable defenses may be available to the defendant.
  57. What are the equitable defenses?
    • Unclean hands;
    • Laches;
    • Estoppel; and
    • Defenses of Impossibility, Hardship, and Freedom of Speech
  58. When are unclean ahnds available as a defense to an injunction?
    When the improper conduct relates to the same transaction involved in the litigation.
  59. When are laches available as a defense to an injunction?
    If plaintiff has unreasonably delayed in bringing an action and the delay is prejudicial to defendant.
  60. When does laches commence to run?
    When plaintiff has knowledge that a right has been infringed. Laches may serve as an earlier time bar than the statute of limitations; howeer, laches cannot be longer than the statute of limitations.
  61. When is estoppel available as a defense to injunctions>
    If one party acts wrongfully or negligently and thereby induces reliance by another who is entitled to rely and who changes his position to his detriment.
  62. When are the defenses of impossibility, hardship, and freedom of speech available as a defense to an action for injunctive relief?
    In appropriate circumstances.
  63. What is the purpose of a preliminary injunction?
    To preserve the status quo between the parties until full trial on the merits can be held.
  64. What must the moving party show for a preliminary injunction?
    • Irreparable injury if a preliminary injunction is not granted; and
    • The likelihood of prevailing at the later trial.
  65. Must notice of a preliminay hearing for a preliminary injunction be given to the defendant?
    Yes.
  66. Before grant of a preliminary injunction, must the plaintiff post a bond?
    Yes, to indemnify the defendant for damages if it is finally determined that the plaintiff was not entitled to the injunction.
  67. What damages can a defendant receive from an improvidently granted injunction?
    Damages are generally limited to the amount of the bond.
  68. When may a temporary restraining order (TRO) be granted?
    In drastic circumstances.
  69. What are the notice requirements for a TRO?
    Less formal notice is required; indeed, it may be granted without notice if the moving party makes a strong showing why notice should not be required.
  70. If a TRO is granted, when will the issuing court schedule a hearing for grant of a preliminary injunction?
    At the earliest possible date.
  71. Is injunctive relief available against criminal conduct?
    Generally no, on constitutional grounds, as it would deprive defendant of the right to a trial by jury. But consider whether the crime is also a tort which may be enjoined.
  72. Is injunctive relief available involving political rights?
    Generally no, because of legal remedies, e.g., when mandamus is ufficient. But consider whether the conduct endangering the political right is also tortious and, thus, subject to relief.
  73. Is injunctive relief available to enjoin the distribution of obsecene materials?
    The supreme court may enjoin distribution of bscene materials. Such actions are to be brought by the district attorney.
  74. What is specific performance?
    A remedy that orders one party to a contract to perform according to the terms of the contract.
  75. What must a plaintiff show in order to obtain specific performance?
    • A contract exists;
    • All contractual conditions have been fulfiled;
    • The legal remedy is inadequate;
    • Mutuality of remedy exists;
    • Enforcement is feasible; and
    • There are no defenses available to defendant.
  76. Does there need to be a valid contract in order to get specific performance?
    Yes. In fact, equity requires the contract terms to be somewhat more certain than would a court in an action at law, although parol evidence may be used to make the contract more certain. The contract must be supported by consideration. Generally, equity courts will not examine the sufficiency of consideration unless it is unconscionable.
  77. Are unconscionable contracts entitled to equitable relief?
    No.
  78. What is a time of the essense clause?
    A time of the essense clause requires one party to perform within a stipulated period of time. As a general rule, when the party does not perform within the stated period, his contractual rights are void.
  79. If a time of the essense clause is not expressly included in the contract, will a reasonable time to perform be implied?
    Yes.
  80. If a contract is wholly executory, will a time of the essense clause be strictly enforced?
    Yes.
  81. If a contract is partially executed, will a time of the essense clause by enforced?
    No, a court will be likely to avoid the effect of the clause if (i) loss to the other party is small; (ii) the forfeiting party would suffer undue hardship; (iii) tardiness is "de minimis"; or (iv) seller has performed acts giving rise to a waiver situation.

    Also look to see if judicial sale might be appropriate in a given case.
  82. If there is a minor deficiency in a land transaction, can the seller get specific performance?
    Yes.
  83. Can a buyer get specific performance despite substantial deficiencies?
    Yes, but he will be unable to get specific performance if hte deficiency is very large.
  84. If specific performance is granted, must there be an abatement in price for the deficiency?
    Yes.
  85. When is a legal remedy inadequate?
    • The thing bargained for is rare or unique; or
    • Money damages are inadequate.
  86. Is land always unique?
    Yes. Thus, both the buyer and seller of land can get specific performance.
  87. When is personal property unique?
    When it is (i) unique in kind, (ii) of personal significance to the buyer (using a reasonable person test), or (iii) in short supply. If so, specific performance is avaialble. If not, money damages are adequate.
  88. If personal services are not unique, is specific performance available?
    No, money damages are adequate.
  89. If personal services are unique, is specific performance availalbe?
    Perhaps, but equity will not force a person to provide personal services to another, because of "involuntary servitude" problems and the difficulty of enforcement.

    However, the defendant can be prevented from working for someone else by enforcement of a negative contract.
  90. When are money damages inadequate?
    When damages are speculative, the defendant is insolvent, or multiple suits would be necessary.
  91. What is negative mutuality and when is it a problem?
    Negative mutuality involves the argument that plaintiffs should be allowed to enforce the contract because defendant would not be able to.
  92. When is negative mutuality not a problem?
    When both parties are capable of performing and counterpeformance may be sufficiently secured.
  93. What is affirmative mutuality?
    Affirmative mutuality involves the argument that plaintiff should be allowed to enforce the contract because defendant would have been able to. Its only relevance today is to land sale contracts (i.e., the seller can get specific performance because the buyer could).
  94. What issues does the question of the impracticability of specific performance involve?
    • Can the court supervise protracted performance and derive a standard to judge performance; and
    • Can the court reach the defendant onr the res and effectively compel performance?
  95. Are personally services contracts deemed specifically enforceable?
    Generally, no.
  96. Will New York courts enforce a negative covenant not to complete or enjoin an employee whose services are unique from performance or competition?
    Yes.
  97. Are land sale contracts feasibly enforced?
    Yes, unless the seller brings the action and only he and the res are before the court.
  98. Are there any defenses to specific performance?
    • Standard contract defenses;
    • Misrepresentation;
    • Mistake; and
    • Equitable defenses.
  99. What are standard contract defenses to specific performance?
    These include, e.g., the Statute of Frauds, inadequate consideration, misrepresentation, impossibility, and mistake. The most important here is the Statute of Frauds and the exception to its application, the past performance doctrine.
  100. How can the past performance doctrine operate to take a contract out of the Statute of Frauds (i.e., allow it to be specifically enforced)?
    An oral contract for the sale of land may be enforced if there is part performance such that the parties cannot be placed in the status quo ante.

    Actions sufficient to take the contract out of the Statute of Frauds include: (i) possession of the land by buyer coupled with valuable improvements or payment or (ii) performance of the land by buyer coupled with valuable improvements.

    Insufficient acts for past performance include: (i) mere payment of the purchase price; (ii) mere possession of the land; (iii) possession of land coupled with minor improvements or improvements that can be compensated for in money; (iv) performance not exclusively referable to the contract but which may be explained on some other theory (e.g., rent payments); and (v) performance of services of which there can be adequate compensation in an action at law.
  101. What are actions sufficient to take the contract out of the Statute of Frauds under the past performance doctrine?
    • Possession of the land by buyer coupled with valuable improvements or payment; or
    • Performance of the land by buyer coupled with valuable improvements.
  102. What actions are insufficient to take the contract out of the Statute of Frauds under the past performance doctrine?
    • Mere payment of the purchase price;
    • Mere possession of the land;
    • Possession of land coupled with minor improvements or improvements that can be compensated for in money;
    • Performance not exclusively referable to the contract but which may be explained on some other theory (e.g., rent payments); and
    • Performance of services of which there can be adequate compensation in an action at law.
  103. Can a misrepresentation be a defense to specific performance?
    Yes, if it goes to a material factor. Concealment of a material fact will prevent specific performance as long as the party concealing this information stands in a confidential relationship to the other contracting party. The level of misrepresentation necessary to qualify as a defense to specific performance is not as high as that necessary to result in a rescission of the contract.
  104. Can mistake be a defense to specific performance?
    Yes, if it is bilateral, material, and a mistake of fact rather than a mistake of law. Unilateral mistake is a defense to specific performance only if the non-mistaken party either knew of, or reasonably should have known of, the mistake.
  105. Will an employment contract be specially enforced?
    No.
  106. What are the four (4) requirements to enforce a covenant not to compete?
    • The service must be unique;
    • The covenant must be reasonably necessary to protect legitimate interests of the employer and reasonable as to both geographical scope and duration;
    • The covenant must not unreasonably burden the parties; and
    • The covenant must not harm the general public.
  107. Will noncompetition covenants expressly included in contracts for the sale of business be enforceable?
    If the contract is reasonably necessary to protect the buyer and reasonable in geographic scope and duration.
  108. May the seller of the goodwill of a business be permanently enjoined from actively soliciting former customers away from the purchaser of the business?
    Yes.
  109. Will equity specifically enforce a contract to make a particular disposition by imposing a constructive trust on the property in the hands of the personal representative?
    Yes, as long as the property involved is unique.
  110. Will equity enforce a contract to execute mutual wills by imposing a constructive trust upon the personal representative of the party who failed to execute a will in accordance with the contractual terms?
    Yes.
  111. Where contracts to make a particular disposition or to execute mutual wills relate to real property, will they be enforced?
    Only if they are in writing.

    Nevertheless, under proper circumstances (e.g., part performance doctrine), specific performance will be granted.
  112. After a contract for the sale of land has been made, who is considered the owner of the land?
    Under the doctrine of equitable conversion, the buyer is considered the owner of the land (and therefore has the real property interest) and the seller is considered to hold legal title only as security for the purchase price (and therefore holds a personal property interest).
  113. Can an equitable conversion be worked by a direction in a will to sell specific property so that proceeds form the sale of real property go to individuals entitled to personal property?
    Yes.

    NOTE: This is not the result where the will gives a discretionary power of sale to the executor or where the will makes a specific devise of particular property; i.e, devisee will be entitled to the proceeds from the sale.
  114. When does equitable conversion occur under an option contract?
    Upon exercise of the option.
  115. Who has the risk of loss between buyer and seller?
    The seller, unless the contract provides otherwise or the buyer has either legal title (e.g., there has been a closing) or possession at the time of the loss.
  116. What remedy does the seller have when there is material destruction of property and he has the risk of loss?
    No remedy. The buyer may rescind and receive back any consideration paid. The buyer, at his option, may also get specific performance with abatement in the purchase price. Where the destruction is immaterial, both the buyer and seller are entitled to specific performance but the buyer is entitled to partial abatement.
  117. If the buyer of an insurance policy has the risk of loss and insurance proceeds go to the seller, can the buyer get them using a constructive trust theory?
    Yes.
  118. What is the effect of rescission?
    Rescission voids the contract and leaves the parties as though the contract had never been made.
  119. What are grounds for rescission?
    • Mistake;
    • Misrepresentation;
    • Special Rule for Attorney-Client Contracts; or
    • Duress, undue influence, illegality, lack of capacity, or failure of consideration.
  120. Will a mutual mistake suffice for rescission?
    The mistake must go to a material fact. Mutual mistakes as to collateral facts (e.g., quality, desirability, or fitness of the property involved) are not grounds for rescission where there have been no express or implied representations. Mutual mistakes of fact involving compromise of a disputed fact or where a claim is known to be doubtful are not grounds for rescission when the fact as to which the parties compromised is also the one on which they were mutually mistaken.
  121. Will a unilateral mistake suffice for rescission?
    Generally, no. However, exceptions to the rule exist when the other party knew of, or should reasonably have known of, the mistake or, under the modern trend, when the nonmistaken party has not yet taken steps in reliance on the contract or when the mistaken party would suffer great hardship.
  122. Although rescision generally is not available for a unilateral mistake, will it be available if the nonmistaken party either knew or should have known of the mistake?
    Yes.

    Typical fact pattern: contractor's bid that is substantially lower than the other bids; so low that the other party should know it is a mistake.
  123. When is relief allowed for mistake of law?
    When it can be justified by analogy with mistake of fact.
  124. What must an attorney seeking to enforce a contract with her client establish?
    That it was entered into the client with full knowledge of all material circumstances known to the attorney. The attorney must also show that the contract was free from fraud on her part or misconception on the client's part, and that the attorney did not abuse confidences. The burden rests entirely on the attorney to show absence of any misconduct.
  125. Is it necessary for a party seeking rescission to offer to restore the other party what he received before bringing the action?
    No, but the court may make such restoration a condition precedent to relief.
  126. Are the usual equitable defenses (e.g., unlean hands or laches) available in an action for rescission?
    Yes.

    NOTE: Under the general rule, negligence of a plaintiff is not a defense to a suit for rescission.
  127. If a suit for rescision is the first action brought and it is unsuccessful, will it act as a bar to a subsequent suit to recover damages?
    According to some courts, yes, as long as the failure of the rescission action was not based on the merits of the fraud issue.
  128. What is the effect of reformation?
    Reformation changes the written agreement to make it conform to the original intent of the parties.
  129. What is the difference between rescission and reformation?
    With rescission, you are arguing that there is no contract because there was no true "meeting of the minds." With reformation, you are arguing that there was a "meeting of the minds" but that the agreement is not accurately reflected in the written contract.
  130. To be reformed, must a valid contract exist in the first instance?
    Yes.
  131. What are grounds for reformation?
    Mistake and misrepresentation.
  132. Will mutual mistake always suffice for reformation?
    Yes.

    The mistake can be of either fact or law.
  133. Will unilateral mistake suffice for reformation?
    The recent trend is to allow reformation for unilateral mistake when the writing does not conform to the original agreement and one of the parties is aware of this (unilateral mistake coupled with fraud or inequitable conduct).

    THe mistake can be of either fact or law.
  134. Is misrepresentation sufficient grounds for reformation?
    Yes. It may be innocent of fraudulent. An instrument will be reformed to reflect the expressed intent of the parties.
  135. What are defenses to reformation?
    Look for the usual equitable defenses such as unclean hands, laches, etc.
  136. Will equity courts allow reformation where the subject matter of the contract sought to be reformed has been sold to a bona fide purchaser for value and without notice?
    No. This is a defense to reformation.
  137. Is a plaintiff's negligence (e.g., failure to read the contract) a bar to reformation?
    Generally, no.
  138. Do the Statute of Frauds and parol evidence rule apply in reformation cases?
    As a general rule, no.
  139. Can an instrument conveying a gift be reformed by the donor if there is a mistake of law or fact?
    Yes.

    EXCEPTION: Where the donee has substantially relied to his detriment on gifts as conveyed.
  140. Can a donee have a gift instrument reformed?
    No, even if the gift instrument does not confirm to the original intent of the donor. Some courts, however, allow reformation where the donee has detrimentally relied on the donor's original intent which was not expressed in the instrument. As a general rule, the donee may have a gift reformed against the donor's heirs.
  141. What is a constructive trust?
    A restitutionary remedy imposed by courts to prevent unjust enrichment when a wrongdoer has gained title to property through misappropriation of another's money or property. Defendant's title must be traceable solely to the misappropriated propery (most courts also require a showing that the legal remedy is inadequate). If established, the court will force the trustee to convey to the plaintiff title to the misappropriated property or its product. This gives the plaintiff priority over unsecured creditors. The usual equitable defenses are applicable, and transfer to a bona fide purchaser terminates a plaintiff's equitable right to the proprety.
  142. What will the court do if a constructive trust is established?
    The court will force the trustee to convey to the plaintiff title to the misappropriated property or its product. This gives the plaintiff priority over unsecured creditors.
  143. What equitable defenses are applicable to constructive trust?
    The usual equitable defenses.
  144. Does transfer to a bona fide purchaser terminate a plaintiff's equitable right in a property and work as a defense to a constructive trust?
    Yes.

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