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Equity

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QuestionAnswer
Equity Issues 1. Is thescision a right to equitable relief? 2. Is equitable relief practicable? 3. Are there any equitable defenses that preventthe issuance of equitable relief?
Availability of Equitable Remedies -Equity acts only where no adequate remedy @ law -inadequate cuz of: 1)damages can't make P whole cuz subj matter is unique 2)damages are speculative and uncertain 3)multiple/successive suits would have to be brought 4)insolvency of D 5)irreprable harm
Equity Jurisdiction -Personal Jurisdiction -In proper circumstances (divorce, foreclosure) they will exercise quasi in rem juris
Enforcement -Equit won't take juris where there is no practical means to enforce decree. -2fold enforce problem: 1)Crts must have pwr to force compliance 2) Crts must be able to determine whehther there has been proper compliance
Remedy in Equity -Is discretionary -No absolute right to absolute relief -i.e. a crt will not grant equitalbe remedy if harm caused by granting the remedy outweighs the benefit that the moving party would receive. -Crt considers hardship of public and to nonmoving part
Right to Jury Trial G/R: no right jury trial -If party: 1)joins several separate equitable/legal claims that have certain issues in common or 2)states a single claim & demands both legal equitable remedies: she is entitled to have common facts/or singlem claim tried b4 jur
Right to Jury Trial Cont... Note: U.S. Supr Crt has indicated that where separate legal and equiable claims arise from a single set of facts, it is necessary that the entire case be submitted the the jury and not just the legal claim
Injunctive Relief obtain relief if P shows: 1)legal remedy inadequate 2)Enforcement of equitable decree would be feasibile/practicable/effective to vindicate Ps rights 3) hardship to D and pulbic doesn't outweight beneift that P may get from relief 4) no defenses avail
Civil v. Criminal Contempt Civil=seek to coerce Criminal=seek to punish
Defenses in Contempt Proceedings -crt that issued the injunction lacked jurisdiction over parties & subj matter -Crts generally will not consider the validity of the merits of the underlying injunction
Mandatory Injunction -When the D must perform the particular act -A mandatory injunction is remedial in its operation
Negative Injunction -when D must cease performing particulr act -Negative injuction (prohibitory injunction) is preventive in its operation
Interlocutory Injunction -i.e. temporary, in order to maintain the status quo btwn parties until trial on mertis. -it does not resolve any permanent rights btwn parties
Permanent Injunction -issued after a full hearing on the merits and is binding on parties
Who is bound by injunction? -only those named/identified parties -Decree binds: 1)all parties 2)their agents and EEs who receive actual notice by service or otherwise and 3)3rd parties acting in concert/collusion w/ parties, after receiving service or otherwise
Notice Req't for Injunction -no one may be hled in contempt for violating an injunction unless he acted with some form of notice that the injunction was issued
Duration of Injunction -full force & effect until it has been vacated or modified by crt that issued it or until set aside on appeal -Until then it must be obeyed, even if erroneous/appears constutionally invalid -may be ignored if crt that issued accted w/out juris
Injuctive Relief Against Tortious Conduct 1. Determine what tort has been, is being, or is about to be committed 2. Determine whether legal remedy is adequate 3. Is enforcement Feasible? 4. Are Hardships balanced? 5. Does D have defenses?
Typical Tort Situations -Nuisance: priv nuisance not public. Excep=may seek to enjoin public if show special damagages not suffered by public -Tresspass to Land -Waste -Conversion/Trespass to Chattels-Defamation-Invasion of Rght to privacy-Abuse of Jud Process-Unfair competiti
UnFair Competition and Trade Secrets 1. Decide if info qualifies as trade secret (plan/process/formula/valuable info that's not patented 2.Manner inwhich trade secret taken (wronful manner) 3.Relationship btwn taker and owner: Fidiuc/contract 4. Who can be enjoined: taker and intended use
Money Damages inadequate -Damages are speculative: imposs to assess amt of money damages -D is insolvent -Irreparable injury -Multiplicity of Actions: suffer same wrong in future if only given money damages -No right to damages (threatened but not committed tort)
Replevin -a legal remedy used to recover specific prop that has been wrongfully taken or detained
Replevin inadequate -Replevin Bond: Where unique chattel involved: D frustrates purpose -Change in Chattel:D changes so its not identifiable through Ps descrip -Ejectment:sheriff refused to act
Feasible enforcement of mandatory and negative injuctions -Negative-easier: contempt -Mandatory: not so easy. In grant injuction like this look to complexity of act to be performed and whether its continuous
Hardship -benefit to P if relief granted must outweigh the hardship to D -Exception: Hardship will not be balanced where the D's tortious conduct has been willful
Defenses -D may rely on both tort and equitable defenses --Unclean hands --Laches --Impossibility --Hardship --Freedom of Speech
Defenses: Laches -May be available to D if the P has unreasonably delayed in bringing action and the dely is prejudicial --Excuses for Delay: Exuse Ps delay: concealment, fraud, or inequitable conduct by D; Reasonalbe lack of awareness of the facts giving rise to relief
Interlocutory Injunctions -Purpose=to preserve the status quo until a full trial on merits held -2 types: 1)Preliminary: granted only after regular adversary-type hearing & remains effective till full trial 2.Temporary-Restraining Order (TRO): emergency order imposed until hear
Interlocutory Injunction Requirements -Seeker must generally show irreprable injury and the likelihood of prevailing on the merits of underlying case. Usually mus also give notice of hearing and might be req'd to post bond
Irreparable Injury -if not granted -harm must outweight the harm to the D -if money damages will not suffice- balance hardships.(loss of rep, depriv of const'l rights, loss of rare/unique chattel, rarely adequately replaced with money) -harm that occurs b4 hearing/trial
Injunctive Relief for Criminal Conduct -G/R: equity will not enjoin a crime: Most crimes are also torts and may therefore be enjoined in same manner as any form of tortious conduct
Injuncive Relief involving Political Rights -G/R: injunctive relief will not be granted where the political rights of an indiv'l are involved -Legal remedies (quo warranto, mandamus) are considered adequate protection -no prop right involved, equitable relief not feasibly enforced -voting rights
Specific Performance -a remedy by which 1 party to a K is ordered to perform according to K's terms -P Must show: 1. a K exists 2.all contractual conditions have been fulfilled 3.legal remedy inadequate 4.enforcement not feasible 5.no defenses available to D
SP: Does K exist -looks for certainty of terms-material terms incl: names of parties, price,time & manner of pymt and other material terms & conditions. -Allow parol evidence to determine terms -generally don't examine sufficiency of consid-unless "shocks the conscience
SP: have all conditions been met? -fullfillment of all conditions precedent & readiness to perfrom any conditions concurrent -2 conditions issues: time of the essence clauses & Deficiencies
SP: Have all conditions been met? Time of the Essence Clause -Req's 1 party to perform w/in a stipulated period of time. G/R: his rights under K will be void -Clause must be express -Type of K: Wholly executory=stricly enforced; Partially executed=construed liberally to avoid harsh results of forefeiture
SP: Have all conditions been met? Deficiencies -the inability of 1 party to perform the contractual conditions fully -crt can decree SP as to the portion of the K that cn be performed & award compensation/abatement as the unperformable portion of the K
Defiencies -Seller can perform except for minor deficency=equity enforce K against buyer-allow reasonable comp -Where buyer sues for SP & there is defect in title to land, etc.-equity will grant SP & give buyer abatement in PP -seller cures b4- deficency irrel.
SP: Is the legal remedy Inadeqate? 1)Thing bargained for is rare or unique 2)D is insolvent 3)Damages are speculative 4)Multiple Suits Necessary 5)Liquidated damges clause-treated as alt remedy
SP: is enforcement feasible? 2 situations generally arise: 1) Contracts for Personal Services: G/R: no enforceable thorugh SP-can't force someone to work 2)Land Sale Ks:
SP: Are there any Defenses available to D? Defences may be twofold: standard contract defenses and equitable defenses
Standard Contract Defenses 1. SoF= k for sale not specifically enforceable unless there is a sufficient writing, signed by party to be charged: Exception: part performance: SP of oral k will be granted if part perf unequivocally indicates k 2. Misrep: of material factor 3. Mistak
Equitable Defenses 1. Laches 2. Unclean hands 3. Hardship: test of "unconscnionability": SP will not be denied simply because the D made a bad bargain-unconscionability will be tested at the time the K was entered into
SP of Negative Covenants not to Compete Req'ts that must be met: 1. Covenant must Be express 2. Services must be unique 3. Covenant must be reasonable -Most states will not enforce a covenant not to compete if enforcement will harm the public
SP: standards of Reasonableness 1. Covenant must be reasonably nec'y to protect a legit interest of ER 2. Covenant must be reasonable in its scope, both as to the geographical scpe and duration -If found unreasonable crts will enforce according to "reasonable scope" unless very unreas
SP: Negative Covenant in Sale of Business -Where one sells business, commercial or prof'l, and expressly agrees as part of consid not to engage in competition with buyer equity will enforce agrmt. Covenant must be reasonable: reasonably necessary to protect buyer and scope must be reasonable
SP: Equitable Conversion -after a K for sale of land has been entered into, the buyer is considered the woner of the land and the seller the holder of legal title only as security for pymt of PP. -buyer is considered to have real prop interest & seller a personal prop interest
Rescission -remedy whereby the original K is considered voidable and rescinded -Recission puts an end to the transaction & leaves the parties as though the K had never been made -Analyze grounds and defenses -Offer to restore other party to Status Quo unnecessary
Grounds for Rescission -to secure this remedy it is necessary that the grounds therefor must have occured either before or at the time the K is entered into 1) Mistake 2) Misrep 3) Other grounds(duress, undue influence, illegality, lack of capaciity, or failure of consid)
Grounds: Mistake 1. Mutual Mistake:based on mutual mat. mistake of fact(material to transaction) 2.Unil Mistake: won't suffice: 2 except: 1)Other party knew/reason should know mistake 2)hardship suffered by mistaken pty so extreme that it outweighs other partys exepect.
Grounds: Misrepresentation -Misrep by one party=grounds -Misrep of fact or law -Misrep must be material -Rescission will granted regardless of whether the misrep is innocent or fraudulent: actual reliance is req'd
Defenses to an Action for Rescission -General Equitable Defenses -Negilgence of P not a defense to suit for rescission
Reformation -the remedy whereby the writing setting forth the agrmt btwn the parties is changed so that it conforms with the original intent of the parties 1. Is there a vaild K? 2. Grounds for Reformation? 3. Does D have defenses?
Difference btwn rescission and reformation Rescission-no valid k due to mistake, misrep, etc. Reformation-original k is valid but subsequent writing of parties for some reason doesn't conform to original K. Thus they seek to change writing so that it does conform with original
Grounds for Reformation 1. Mistake: mutual: also based on unilat mistake coupled w/ fraud/inequit conduct (one party knows but fails to tell other) 2. Misrep: written instru is incorrect as a result of either innocent or fraduelent misrep. Will reform to reflect expressed inten
Defenses to Reformation -General Equitable Defenses -Existence of BFP: equity crts will not allow reformation in cases where subj matter of K sought to be reformed has been sold to BGP for value and w/out notice
Special "nondefenses" -P's Negligence: doesn't bar reform -Parol Evidence rule not applied in reformation actions -SoF is not applicable in reformation actions --think about "adding of land" to written instrument-must meet SoF
Reformation of Gifts -Instru conveying gifts may also be reformed. -Note whether it is the donor or donee who is seeking reformation
Reformation of gifts by Donor -Where an instru conveying a gift fails to express the true intention of the donor, he may have it reformed. May be had whether mistake is one of fact or law -Exception: donee has relied to his detriment on the gift as conveyed
Reformation of Gift by Donee -Donee may not have gift instru reformed. -A number of crts will allow reformation where donee has detrimentally relied upon original intent of donor which isn't expressed in gift instru -G/R donee may have gift reformed against donor's heirs.
Constructive Trust -equitable remedy imposed by crts -used to prevent unjust enrichment where a wrongdoer has gained title to prop through misappropriation -not really a trust; rather word "trust" connotes the method crt uses to vest title to prop in P- declares D trustee
Req'ts for Constructive Trust 1. Title held by D: not limted to specific prop that D wrongfully acquired. P can use tracing to impose trust: cannot be imposed on prop that merely improved Ps prop 2. Unjust enrichement 3.Inadequacy of Legal Remedy 2.
Advantages over Restitution at law 1. Priority over unsecured creditors 2. Increased value of property, P gets advantage of that increase
Defenses to Action to Impose Constructive Trust -Equitable Defenses -Right to constructive trust is cutt of by transfer of legal title to a BFP (one who pays value and takes w/out notice of facts giving rise to constructive trust)
Constructive Trust: Gifts -often sought where suspicious circ surround giving of a gift -donee in position to exert undue influence/fiduc relationship w/ donor, donee has burden of proving gift freely given. Otherwise party seeking to set gift aside has burden prove impropriety
Equitable Lien -an equitable charge on property imposed by law to prevent unjust enrichment -once imposed on D's prop, the lien can be foreclosed and the prop sold to satisfy P's claim
Equitable Lien Req'ts -Same as constructive trust -runs from time P's prop wronfully acquired -priority over subsequent creditors -can be imposed on prop that was merely improved w/ the Ps prop or proceeds thereof. -show legal remedy inadequate
Equitable Mortgage -judge-made mrtg impressed against a deed absolute -used when debto gives a deed absolute to his creditor solely to seucre an obligation, and the creditor, at some point, refuses to recognize the security nature of the interest
Subrogation -Where 1 person req'd to: 1) pay loss sustained by another 2)pay the obligation owed by another or 3)discharge a lien upon the prop of another, the person may succeed to and be subrogated to the rights of the victim of the loss agsint person who caused it
Created by: sachav3