Law School Outline - Remedies

Remedies Outline
REMEDIES OUTLINE.................................................................................................................................1
I. DAMAGES..................................................................................................................................................3
A. MEASURE OF TORT DAMAGES........................................................................................................................3
1. In General...........................................................................................................................................3
2. Conversion/Trespass to Chattel..........................................................................................................3
3. Damage to Chattel (usually tort is negligence)..................................................................................5
4. Injuries to Land...................................................................................................................................6
5. Personal Injury...................................................................................................................................7
6. Fraud..................................................................................................................................................7
7. Other Torts..........................................................................................................................................8
B. CONTRACT DAMAGES...................................................................................................................................8
1. General ..............................................................................................................................................8
2. Buyer’s Damages................................................................................................................................9
3. Seller’s Damages..............................................................................................................................11
4. Contractor’s Damages......................................................................................................................12
5. Employer’s Damages........................................................................................................................12
6. Employee’s Damages........................................................................................................................13
C. LIMITATIONS ON DAMAGES (REDUCE AMOUNT OF DAMAGES)............................................................................13
1. Certainty...........................................................................................................................................13
2. Purely economic harm from negligence...........................................................................................13
3. Forseeability.....................................................................................................................................13
4. Avoidable consequences...................................................................................................................14
5. Collateral Source Rule.....................................................................................................................15
6. Credit for Benefit..............................................................................................................................15
7. Betterment.........................................................................................................................................15
II. COERCIVE EQUITABLE RELIEF.....................................................................................................15
A. EXAM APPROACH......................................................................................................................................15
1. Inadequate remedy at law?...............................................................................................................15
2. Equitable defenses?..........................................................................................................................15
3. Balancing Hardships........................................................................................................................15
4. Balancing Equities............................................................................................................................15
5. Excessive Court Supervision.............................................................................................................15
6. Public Interest...................................................................................................................................16
B. EQUITY JDX..............................................................................................................................................16
1. Historically arose in response to flawed legal system. Religious leaders were chancellors..........16
2. Matter of propriety, not power to grant relief ...............................................................................16
3. Inadequacy Requirement (Synonymous with irreparable harm in most cases)...............................16
C. TRO & PRELIMINARY INJUNCTIONS (PROVISIONAL RELIEF)............................................................................16
1. Generally..........................................................................................................................................16
2. Tests:.................................................................................................................................................17
D. EQUITABLE CLEAN-UP................................................................................................................................19
1. Because of merger of legal and equitable courts, courts can grant “equitable damages” if
equitable remedy sought fails (can’t order specific performance, for example, but that was all the
plaintiff asked for.)................................................................................................................................19
2. Limited now because of civil procedure rule that legal matters are decided before equitable
matters..................................................................................................................................................19
E. EQUITABLE DISCRETION (MEASURE OF INJUNCTIVE RELIEF)................................................................................19
1. Unfair K – court doesn’t have to order equitable relief if K is unfair. ...........................................19
2. Extra Certainty of terms in K is required ........................................................................................19
3. Mutuality of remedies – no longer required.....................................................................................19
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4. Equitable defenses............................................................................................................................19
5. Practical Enforceability....................................................................................................................20
6. Balancing..........................................................................................................................................20
7. Public Interests.................................................................................................................................22
F. EQUITABLE DECREES TO DENY RELIEF............................................................................................................22
1. Court has broad discretion to fashion remedy as justice requires and is not bound to either grant
or deny the relief prayed for.................................................................................................................22
G. CONTEMPT...............................................................................................................................................22
1. Generally: Ways of categorizing contempt.......................................................................................22
2. Degree of Specificity Required.........................................................................................................23
3. The Law of the Decree......................................................................................................................23
4. Criminal v. Civil Contempt...............................................................................................................23
5. Collateral Bar Rule...........................................................................................................................24
6. Ability to Pay....................................................................................................................................24
7. Who is Bound....................................................................................................................................24
III. RESTITUTION (FOCUS ON DEF).....................................................................................................25
A. UNJUST ENRICHMENT – ..............................................................................................................................25
1. Defined: Cause of action, remedy is Restitution..............................................................................25
2. Elements: .........................................................................................................................................25
B. RESTITUTION.............................................................................................................................................25
1. Substitutionary .................................................................................................................................25
2. Specific Restitution...........................................................................................................................28
IV. OTHER REMEDIES.............................................................................................................................30
A. RESCISSION (EXAM TIP – R.E.M. APPROACH) ..............................................................................................30
1. Requirements....................................................................................................................................30
2. Election (Has party Affirmed the K?)...............................................................................................31
3. Mechanics of undoing the deal.........................................................................................................31
B. REFORMATION...........................................................................................................................................32
1. Grounds:...........................................................................................................................................32
2. Equitable Remedy – so inadequacy requirement is easy – you can’t get reformation at law..........33
V. ENHANCEMENT AND ADJUSTMENT OF MONETARY AWARDS...........................................33
A. REDUCTION TO PRESENT VALUE OF FUTURE DAMAGES......................................................................................33
B. ATTORNEY’S FEES......................................................................................................................................33
C. INTEREST..................................................................................................................................................33
D. COSTS OF SUIT..........................................................................................................................................33

I. Damages
A. Measure of Tort damages
1. In General
a) Damages are a sum of money given as

compensation for a suffered wrong.
b) Damages are a substitutionary remedy.

2. Conversion/Trespass to Chattel
a) Defined:
(1) Conversion – permanent Deprivation of property
(2) Trespass to Chattel – temporary interference with

use of property
b) Measure of general damages: Fair market value at

the time and place of the conversion or destruction
(1) Fair Market Value
(a) Defined: Price a reasonable buyer would pay and
a reasonable seller would accept in a sale of the
product. Operates under the assumption that
property can be replaced.
(b) Sources: Expert, Owner, Cost to recreate, Cost to

generate income
(c) Sentimental Value: split in authority
(i) Bond rule: where primary value is in

sentiment, consideration of the owner’s
feelings is appropriate.
(ii) Some courts, only FMV.
(iii) Some courts say reasonable personal

value, but can’t consider feelings of owner.
(d) Acceptance of FMV results in a Forced Sale –

legal fiction that at time PLA takes substitutionary

remedy, legal title passes to DEF. Public policy
against double-recovery
(e) Loss of Use
(f) Diminution in Value
(i) Subtract value it would have been minus

the value in its current condition
(2) Time of Conversion/Destruction

(a) For goods whose value fluctuates: three way split
(i) “Stand-Pat” rule – FMV at time of

conversion only
(ii) Highest value between conversion and

trial
(iii) Highest market value within a

reasonable time after the owner discovers
the conversion
(3) Place of Conversion/Destruction

(a) Market sense of “place”
(i) Retail market, wholesale market,

manufacturing cost – typically award price
the PLA would pay. So if stolen from
retailer, wholesale cost; if stolen from
consumer, retail price (used). BUT - if
stolen from manufacturer, wholesale
price.??
(b) Geographic sense of “place”
(i) If held for use, add cost of transport
(ii) If held for sale, deduct cost of transport
c) Special Damages
(1) Consequential
(a) Cost of recovery

3. Damage to Chattel (usually tort is negligence)
a) General: Cost of Repair

(1) Rule: Use cost of repair as measure of damages
unless it is not economically and physically viable.
(a) Economically viable: cost of repair exceeds
diminution of value (or value before tort in some
jdx),
(b) Physically viable: antique, unique piece, etc.
(2) Policy: Cost of repair actually reflects true cost as

opposed to estimates of value
(3) Use Diminution in value if Cost of Repair isn’t

viable.
(a) Defined: Value before injury minus the value
after the injury
(b) Rule: (see above rule for Cost of Repair)
b) Special:
(1) Loss of Use
(a) Reasonable Replacement Rental value OR
(i) Measure if no rental market available:

Proportionate cost of keeping and
maintaining alternative.
(2) Lost income while the item couldn’t be used
(3) Rule: Loss of use damages are recoverable even

though no substitute was actually rented or profits
were lost based on loss of opportunity, which has
value. “Spare boat doctrine.”
(4) Clean up
(a) Emotional

4. Injuries to Land
a) Trespass
(1) General
(a) Reasonable rental value and
(i) Pro-rated for amount of land trespassed

upon
(b) Cost of Repair
(2) Special
(a) Emotional Distress
b) Nuisance (intentional interference with use and

enjoyment of property)
(1) General:
(a) Diminution in Value
(i) Usually available when nuisance can’t

be abated
(b) Reasonable Rental Value
(i) if the nuisance is continuing
(2) Special:
(a) Discomfort and Annoyance
(b) Cost of Repair/Clean-up/
(c) Medical
(d) Lost Profits
c) Trees and Crops Injuries

(1) General:
(a) Diminution in Value to the land caused by
absence
(b) Cost of Replacement

(c) Lost profits (usually when the tree/crop is
productive)
(d) Value of right to prospect (grow crops if seeds are

lost, mine, etc.)
5. Personal Injury
a) General:
(1) Pain and Suffering
(a) Encompasses both physical sensation and
emotional reaction to injury (general damages)
(2) Loss of Earning Capacity

(a) Impairment of ability to earn in the future
b) Special:
(1) Medical
(2) Lost Wages
6. Fraud
a) Type of misrepresentation:
(1) Intentional – rescission, damages, punitive
damages
(2) Negligent – rescission, damages
(3) Innocent – (all but one jdx) rescission only
b) General Damage:
(1) Out-of-Pocket - Value parted with minus value
received (minority)
(a) Example where FMV = $155, K price is $150, and
actual value = $145. OOP damages: $150-145=$5.
(2) Benefit of Bargain - Value as Promised minus

value received (plurality rule)

(a) Example where FMV = $155, K price is $150, and
actual value = $145. OOP damages: $155-145=$10
(3) Cost to Make Representation True (preferred

choice)
(4) Flexibility Rule – court can adopt any of the

above as seems most fair.
7. Other Torts
a) Misappropriation of funds –
(1) General: the measure is the amount
misappropriated
b) Trade Secret Publication –

(1) Generals:
(a) Cost to develop trade secret
(b) Maybe - injured party’s profit margin times

number of sales of competitor who benefited
B. Contract Damages
1. General
a) Policy: Put the plaintiff in the position he would

have been in if the contract had been fully performed
(forward looking)
b) General Measures –
(1) General Damages:
(a) Benefit of Bargain – FMV minus K price
(2) Special Damages:

(a) Reliance
(i) PLA is limited to only reliance when:
(a) Promissory Estoppel is basis of

claim

(b) Expectancy is too speculative
(c) When party has no expectancy

damages
(d) Public policy reasons (Dr.

Malpractice)
(b) Consequential
c) Types of breaches
(1) Non-performance
(2) Defective Performance (substantial performance)

(a) Minor
(b) Major
2. Buyer’s Damages
a) Major defect
(1) Flureau Jdx: if breach was in good faith, no
benefit of the bargain, only reliance
(a) Incidental Reliance Damages (Cost of
improvements, cost of investigating title)
(b) Essential Reliance Damages (Purchase Price,

interest
(2) Majority jdx: Benefit of the Bargain in addition to

all of reliance damages
(a) Measure: FMV minus K price
b) Non-Performance
(1) Essential Reliance Damages - So much of price
as has been paid AND
(2) Incidental Reliance - Market price at time and

place set for delivery minus contract price

c) Minor Defective
(1) Value as promised minus value as received
d) Resale Contract – split of authority

(1) Fair market value minus contract or
(2) Resell value minus contract
e) Defective Performance
(1) Majority Rule:
(a) Cost of repair unless it would create economic
waste
(i) Economic Waste Rule – repair would

mean destruction of perfectly good item
(b) If cost of repair would create economic waste,

diminution in value at time of breach.
(i) Value had the contract been performed

completely minus value as performed.
(2) Minority Rule (2nd Restatement):

(a) Cost of repair unless it is grossly disproportionate
to diminution in value.
f) Partial Performance
(1) Difference between the amount unpaid on the K
and the amount required to get someone else to
finish.
g) Consequential (Special) Damages

(1) Lost Profits
(a) Lost Primary Profits: difference between what
the buyer would have earned from reselling had their
been no breach and what was earned after breach
(b) Lost Secondary Profits: Lost profits from

secondary products also sold (e.g., if breach was over

tires, buyer who sold hubcaps as well as tires could
recover for resulting loss of hubcap sales)
(c) Loss of Goodwill: profits lost on future sales

rather than on sale of defective goods.
(i) Requires PLA to prove such lost future

profits were causally linked to breach of
warranty and provide trier of fact with
reasonable basis from which to calculate
damages.
h) Reliance Damages
(1) Types:
(a) Incidental Reliance – Money spent as a
consequence of dealing with the breach
(b) Essential Reliance - Money spent connected with

performing (Performing or preparing to perform)
(2) Exception: Reliance damages are limited if it can

be shown that the full performance would have
resulted in a net loss to the plaintiff. (Can’t escape
bad bargain). But – DEF has the burden of proving
the project was a loser.
3. Seller’s Damages
a) Sale of Land
(1) Benefit of the Bargain: K price minus FMV.
(Take what they expected to get (K price) and
subtract what they expected to give (FMV of land).
(a) Because damages are paid as cash now, measure
market value & K price on all-cash basis.
(b) Economic Obsolescence Theory: Seller is allowed

to rely on a depressed FMV of the property that
results from dissemination of information about the
broken contract. So when the land is devalued
because the buyer breached, the seller is allowed to
use the new lower FMV.
(c) Resale price is relevant evidence of FMV, but not

determinative.

(2) NOT interest on benefit of bargain: because of
concept of equitable conversion. At the time the
contract was signed, the seller’s interest in land was
equitably converted to an interest in money.
b) Sale of goods: UCC makes resale value one

determinative way of measuring FMV.
4. Contractor’s Damages
a) Benefit of Bargain:
(1) If no performance: K price less contractors cost to
perform
(2) If partial performance: Either:

(a) Whatever is still owed on K minus what he saved
by not having to perform; or
(b) Compensation for what he’s done so far plus

profit expected.
5. Employer’s Damages
a) Cost of obtaining other service equivalent to that

promised and not performed minus K price. FMV
not performed – K price for period not performed
(1) The salary the breaching employee gets at his new
employer is strong evidence of the FMV of the
services.

6. Employee’s Damages
a) Present cash value of the K to the employee if it

had not been breached, less actual earning or what he
reasonably could have earned from other employment
b) Small minority of Jdx: Special consequential

damages for harm to reputation as a result of breach
C. Limitations on Damages (reduce amount of damages)

1. Certainty
a) As to Existence of damages (was the plaintiff really

harmed?)
(1) Reasonable Probability
b) As to Amount of damages (calculation)

(1)
2. Purely economic harm from negligence
3. Forseeability
a) Contract
(1) Hadley v. Baxendale - Reason to know at time of
K formation. Either
(a) Reasonably considered as following naturally or
(b) Within reasonable contemplation as the probable

result
(2) When damages are disproportionate to the K

price, not foreseeable
b) Tort
(1) Reasonably foreseeable at time of tort
(2) Focus on whether plaintiff was foreseeable

(3) “Eggshell skull plaintiff” – no real issue as to
extent of damages
4. Avoidable consequences
a) General idea: PLA must take reasonable steps to

minimize harm from the tort/contract
(1) Restatement: Damages are not recoverable that
could have been avoided without undue burden, risk,
or humiliation
(2) Special beliefs – can be considered as a factor

when determining reasonableness, but aren’t
determinative. (Jehovah’s Witness)
(3) If the defendant is equally capable of avoiding the

loss, the plaintiff does not have to take on the burden.
(4) Employment – employee must take reasonable

steps to secure other employment.
(a) If the other employment opportunity is different
and inferior, PLA doesn’t have to take it. Factors:
(i) Title, type of work, location,

5. Collateral Source Rule
a) Majority General Rule: If injured party receives

some compensation for injury from a source wholly
independent from the DEF, such payment may not be
deducted from the damages otherwise available.
Policy – keep benefit of thrift.
b) CAL: same as above, but to be a collateral source,

it has to be something for which the PLA has actually
or constructively paid or is subject to subrogation
(insurance).
c) Minority of Jdx. have repealed the collateral

source rule
6. Credit for Benefit
a) Rule: When the defendant’s violation of PLA’s

rights leaves PLA in better position than before, DEF
is entitled to a credit for the benefit.
7. Betterment
a) Defined: After DEF commits tort, repair occurs

that extends useful life beyond what it would have
been. Multiply percentage increase by money paid.
b) DEF can’t force use on PLA.
II. Coercive Equitable Relief

A. Exam Approach
1. Inadequate remedy at law?
2. Equitable defenses?
3. Balancing Hardships
4. Balancing Equities
5. Excessive Court Supervision

6. Public Interest
B. Equity Jdx
1. Historically arose in response to flawed legal system.
Religious leaders were chancellors.
2. Matter of propriety, not power to grant relief
3. Inadequacy Requirement (Synonymous with

irreparable harm in most cases)
a) Common arguments used to show remedy at law is

inadequate:
(1) DEF is insolvent
(2) Irreplaceability –
(a) No market for replacement (closely held stock)
(b) Not available in market (heirloom)
(c) With land, there is a presumption land is

irreplaceable
(3) Difficulty of measuring – (e.g. value of growing

old trees; careful trade secret)
(4) Secure remedy (equitable lien/constructive trust)
(5) Multiplicity of suits/Continuing Harm – legal

remedy would require PLA to sue over and over
again each time the damage occurs.
b) Synthesized: Remedy at law is inadequate if it is

not as full, complete, and efficacious.
C. TRO & Preliminary Injunctions (Provisional relief)

1. Generally
a) Difference: (standards are stricter for provisional)

(1) TRO – Provisional, fast, may be ex parte, usually
brief, irreparable harm

(2) Prelim – Provisional, notice, hearing, adversarial,
irreparable harm
(3) Perm – trial on merits, inadequacy
b) Notice & Hearing – almost always required, except

in extreme cases
c) Bonds – help guard against risk of error.

Wrongfully enjoined party can recover from bond
fund. Bond is usually a cap.
d) 4 Basic Elements:
(1) Likelihood of success
(2) Irreparable harm (Immediacy)
(3) Balance equities
(4) Public interest
e) Status Quo – generally we strive to avoid changing

the status quo, less risk of error
(1) (Minority rule) look to form of injunction.
(a) Mandatory Injunctions – requires action (harder
to get, changes status quo)
(b) Prohibitory injunctions – stops action
(2) Majority rule – last uncontested status before the

controversy
2. Tests:
a) 9th #1 & 11th Cir:

(1) Likelihood of success on merits
(2) Irreparable harm
(3) Balance of hardships

(a) Exam – identify harms and make comparative
discussion

(4) Advancement of public interest
b) 9th #2
(1) Probable success on the merits and possibility of
irreparable harm; OR
(2) Existence of serious questions on the merits and

the balance of hardships tipping decidedly in favor of
PLA
(a) “Serious questions” means some chance of
success on a reasonable claim
(3) Public interest
c) D.C. Cir. (Sanders)

(1) Likelihood of success on merits
(2) Irreparable harm
(3) Balance Harm to interested parties
(4) Public interest
d) Leubsdorf forumla
(1) P x Hp > (1-P) x Hd = Only if the harm to the
plaintiff if the injunction is denied multiplied by the
probability of success is greater than the defendant’s
probability of success on the merits multiplied by
harm to defendant if the injunction is granted.

D. Equitable clean-up
1. Because of merger of legal and equitable courts,
courts can grant “equitable damages” if equitable remedy
sought fails (can’t order specific performance, for
example, but that was all the plaintiff asked for.)
2. Limited now because of civil procedure rule that legal

matters are decided before equitable matters.
E. Equitable discretion (measure of injunctive relief)

1. Unfair K – court doesn’t have to order equitable relief if
K is unfair.
2. Extra Certainty of terms in K is required
a) Policy: court needs to know what to order the

parties to do
3. Mutuality of remedies – no longer required.
4. Equitable defenses
a) Unclean Hands – Defined: no person can obtain

affirmative relief in equity with respect to a
transaction in which he has himself been guilty of
inequitable conduct.
(1) Inequitable conduct
(2) Must be willful and
(3) Fraudulent, illegal, or unconscionable

(a) Broader concept than just “illegality” because it
also includes unconscionable conduct.
(4) Misconduct must bear immediate relationship to

the transaction at issue
b) Laches – law doesn’t aid those who sleep on their

rights.
(1) Unreasonable delay

(a) Look to the excuse – a delay that is not excused is
unreasonable
(b) Applicability of SOL? 3-way split
(i) SoL creates rebuttable presumption
(ii) Completely disregard
(iii) Use SoL as one factor to consider
(2) Delay prejudiced other party

(a) Worry about losing evidence (death, failed
memory, lost documents) OR
(b) Change in position in reliance on inaction
5. Practical Enforceability
a) Can the court issue an enforceable order

(1) Impossibility of performance
(2) Illegality of enforcement (involuntary servitude,

exercise of religion, etc.)
b) Excessive Supervision
(1) Often framed as argument that ordering relief
will create inherently unstable relations
6. Balancing
a) Balance of Hardships
(1) Reasoning Process:
(a) Identify harm to PLA if injunction is denied,
(b) Identify harm to DEF is injunction is granted
(c) Compare the two
(2) Do we balance when there is a statute? Yes with

some exceptions.

(3) Options available regarding crafting injunctive
relief when balancing the hardships
(a) Find nuisance and enjoin
(b) Find nuisance and damages
(c) No nuisance
(d) Find nuisance and PLA pays DEF’s costs/losses

and enjoin
(e) Find nuisance and enjoin results
(f) Find nuisance and limit
(g) Require regular reports or technical

developments
(h) Timetables
(4) Balancing hardships in contracts case is much

harder than in tort.
b) Balance of Equities
(1) Instead of weighing relative hardships, look to
equitable conduct (good faith, etc.)

7. Public Interests
a) Consider harm or benefit to the general public if

the relief is granted or denied.
b) Exam tip: If the action is a tort, there is always a

public interest in favor of granting the injunction to
discuss.
F. Equitable decrees to deny relief

1. Court has broad discretion to fashion remedy as
justice requires and is not bound to either grant or deny
the relief prayed for.
G. Contempt
1. Generally: Ways of categorizing contempt
a) Direct v. Indirect
(1) Direct contempt: recalcitrant or unseemly
conduct
(2) Indirect – disobedience of court order
b) Criminal v. Civil
(1) Criminal – public purpose, punish and deter,
beyond reasonable doubt
(2) Civil – No jury, burden is clear and convincing

evidence
(a) Purpose: secure private plaintiff the benefits of
an injunction – compensatory purpose
(b) Form: opportunity to purge
c) Retrospective v. Prospective
(1) Retro – defendant breached and judge can no
longer secure the conduct, so judge has to order
something else as compensation (money, criminal
contempt)

(2) Prospective – coercive contempt to threaten
defendant to perform
2. Degree of Specificity Required
a) Due process requirement to make sure person

knows what conduct is forbidden before being
punished for it.
3. The Law of the Decree
a) The order will spell out what constitutes a

violation, so must look at the order
4. Criminal v. Civil Contempt
a) Look to the Purpose and Form to determine which

one – these are all factors
(1) Purpose:
(a) Secure compliance for PLA - civil
(b) Vindicate court – criminal
(2) Form:
(a) Structure:
(i) Set sentence/fine with code of conduct –

criminal
(ii) Daily fine - civil
(b) Indeterminate sentence/fine (contemnor holds

key to own jail cell – civil
(c) Opportunity to purge – civil
(d) Complexity of order

5. Collateral Bar Rule
a) Order of the court must be obeyed until set aside
b) Disregard of court order bars ability to challenge

validity
c) Exceptions:
(1) Order is transparently invalid
(2) Challenge is based on lack of subject matter

jurisdiction
(3) Irreparable harm if forced to comply (loss of

privilege)
6. Ability to Pay
a) General rule – we don’t imprison for inability to

pay. Exceptions:
(1) Family support
(a) Court can impose contempt sanctions for
violation of family support order even where the
contemnor has no ability to pay if the lack of work is
willful and person had ability to work.
7. Who is Bound
a) Only Parties, agents, and servants, attorneys &

those in concert or participation with them
(1) Not those who are not in privity

b) Notice
III.Restitution (focus on DEF)

A. Unjust enrichment –
1. Defined: Cause of action, remedy is Restitution
2. Elements:
a) Unjust
b) Enrichment
B. Restitution
1. Substitutionary
a) At Law
(1) Tort Measured: Value of the defendant’s gain
(a) There may be different methods of measuring
b) In Equity
(1) Tracing Doctrine –
(a) Basic Tracing Rule: PLA Can trace her property
into any form or specie into which it has been
transmuted.
(i) PLA can trace money into a commingled

account
(ii) BFP take free and clear of PLA’s claim

for constructive trust or equitable lien, but
donee or purchaser with notice takes subject
to PLA’s rights.
(b) Pro Rata Rule: PLA can trace her property into
asset acquired with her money and with DEF’s
money proportionately
(c) Withdrawal from Commingled Accounts: 4-way

split of authority [Exam tip – when you see money
being withdrawn from a commingled account – finish

the hypothetical for each rule before moving on to
the next rule.]
(i) Rule in Clayton’s case: First in, first out.
(ii) Jessel’s Bag rule: DEF’s money is

always presumed to have been withdrawn
first.
(iii) Rule from In re Oatway: PLA may

choose the order of withdrawals.
(iv)Restatement: Tracing: PLA always can

trace into the account and into any product
acquired with account funds. Measure:
depends on how bad DEF was in acquiring
money.
(a) If DEF was NOT a conscious

wrongdoer: PLA is limited to an
equitable lien but can apply her
equitable lien against both the
account and any product.
(b) b. If DEF WAS a conscious

wrongdoer – P gets a choice:
(i) PLA can, at a

minimum get an equitable
lien against the account and
any product or:
(ii) PLA can get a pro

rate share of both the
account and any product in
the proportion of what she
had in the account over the
total amount in the account.
(d) Replenishment into account after some part of

money dissipated: Four rules:
(i) ALL JDX: If P can prove DEF had

intent to replenish, P’s money treated as
restored.
(ii) If P can’t prove intent to replenish

MAJORITY Lowest Intermediate Balance
rule – Presumed that any replenishment is

not PLA’s money. Each depletion further
reduces PLA’s money to the lowest point.
(iii) If P can’t provie intent to replenish

MINORITY rule: Presumption that any
replenishment is restoration
(e) DEF withdraws money from account where DEF

has commingled money of two or more PLAs:
(i) MINORITY: First in, first out
(ii) MAJORITY: Each victim bears

depletions pro rata
(2) Constructive Trust

(a) Requirements:
(i) Unjust Enrichment & Inadequacy
(ii) Tracing to new property
(b) Right conferred: P gets equitable ownership of

the asset
(3) Equitable Lien

(a) Requirements:
(i) Unjust enrichment & inadequacy
(ii) Trace PLA’s property to improvement of

an asset of DEF
(b) Right conferred: P becomes lienholder and can

force sale to pay the lien
(4) Subrogation
(a) Requirement:
(i) Unjust enrichment & inadequacy
(ii) Trace use of PLA’s property to

discharge of an obligation previously owed
by DEF.

(b) Right Conferred: P obtains former creditor’s
rights (only meaningful of creditor had secured
interest, otherwise, damages are adeauate.)
2. Specific Restitution
a) At Law (Replevin for personal property,

Ejectment for land)
(1) Requirements:
(a) Conversion, or trespass with ouster, or
contractual right to the property
(b) Can Replevy from anyone in whose possession it

is found
(c) Constitutional requirements of notice and

opportunity to be heard before replevin, but TRO
type setting might be enough.
(2) Accession
(a) Exception to replevin rule that you can recover
from anyone in whose possession the property is
found
(b) Rule:
(i) Party must be BFP
(ii) BFP must add labor and materials such

that the FMV of the chattel is greatly
enhanced.
(iii) Usually, BFP would be required to

pay damages for conversion to PLA
measured as FMV of the item before its
value was greatly enhanced. (BFP would
then sue DEF for breach of warranty of title
to get the money back)
(3) Measure when PLA sues for conversion seeking

replevin:
(a) Return and detention damages (loss of use or
depreciation)
(b) FMV of property at time of taking + interest or

(c) FMV of property at time of trial + detention
damages
(i) In order to know detention damages, we

have to know why the chattel was held. If
held for use, detention damages are Fair
Rental Value. If held for sale, depreciation.
(4) Result: Actual repossession effectuated by the

sheriff or marshal
b) Equitable Replevin (“Give it back” injunction”)

(1) Rule: Inadequacy of legal remedy and equitable
considerations (because replevin is such an adequate
remedy, usually requires unique goods.)
(2) Result: Order of injunction with power of

contempt, but no detention damages.
c) Real Property Restitution

(1) Forcible Entry & Detainer (squatter)
(a) Accelerated process to get someone off land
(2) Ejectment
(a) Settle ownership disputes
(b) Get DEF out
(c) Mesne profits (rental value)
(d) Set-off if good faith improvement
(3) Damages and Injunction
(4) Injunction
(5) Quiet Title/Suit to Remove Cloud on Title

IV. Other remedies
A. Rescission (Exam tip – R.E.M. approach)
1. Requirements
a) Grounds –
(1) Material Breach/Failure of Consideration
(2) Deception
(a) Intentional Misrepresentation
(b) Negligent misrepresentation
(c) Innocent misrepresentation
(d) Non-disclosure
(e) Concealment
(3) Undue Influence
(4) Duress
(a) Traditional
(b) Economic
(5) Mutual/Unilateral Mistake as to basic assumption
(6) Incapacity
(a) Age
(b) Mental
(c) Intoxication
(7) Illegality
b) Tender or Actual Restoration

(1) Party seeking rescission must tender or actually
return what that party received under the K.

(2) Property must be in substantially the same
condition
(3) In California, Tender is effectuated by serving

suit.
c) Notice
(1) Must give notice within Reasonable amount of
time of discovering the grounds for rescinding (or
free from undue influence of duress). Factors to
consider:
(a) Existence of settlement negotiations – especially if
wrongdoer assured PLA that settlement is
forthcoming.
(b) How Speculative the waiting period is
(c) Prejudice to wrong-doer from waiting
(2) California – serving suit satisfies notice
2. Election (Has party Affirmed the K?)
a) Express – manifest intent to affirm
b) Implied – Exercise dominion

(1) Acted like an owner (affirm) or gratuitous bailee
(rescind)
3. Mechanics of undoing the deal
a) Restitution of K consideration
b) Restitution of gains from having K consideration

(1) Reasonable Rental Value (property)
(2) Interest (money)
(3) Profit (business)
(4) Reasonable value of Improvements

c) Other restitution
d) Consequential Damages
(1) Usually not available – only available when
grounds for rescission are
(a) Intentional or negligent misrepresentation, non-
disclosure, concealment or
(b) Failure of consideration, material breach
e)
B. Reformation
1. Grounds:
a) Mutual Mistake in Integration

(1) Writing doesn’t accurately reflect the parties’
agreement
(2) Not available when a third party’s right will be

unfairly affected. (Like BFP)
(3) Doesn’t apply when the mistake is as to a basic

assumption
b) Fraud in Integration
(1) Reliance must not be wholly irrational,
preposterous, or absurd
(2) No third parties (BFP)’s rights are unfairly

affected
(3) Generally, can’t get reformation from non-

disclosure

2. Equitable Remedy – so inadequacy requirement is
easy – you can’t get reformation at law.
V. Enhancement and adjustment of monetary awards

A. Reduction to present value of future damages
B. Attorney’s fees
C. Interest
D. Costs of suit

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Remedies Outline

More Free Outlines: http://c.finamore.home.comcast.net or http://finamore.net 1

More Free Outlines: http://c.finamore.home.comcast.net or http://finamore.net 2

a) Damages are a sum of money given as

b) Damages are a substitutionary remedy.

(2) Trespass to Chattel – temporary interference with

b) Measure of general damages: Fair market value at

(b) Sources: Expert, Owner, Cost to recreate, Cost to

(c) Sentimental Value: split in authority

(i) Bond rule: where primary value is in

(ii) Some courts, only FMV.

(iii) Some courts say reasonable personal

(d) Acceptance of FMV results in a Forced Sale –

More Free Outlines: http://c.finamore.home.comcast.net or http://finamore.net 3

(e) Loss of Use

(f) Diminution in Value

(i) Subtract value it would have been minus

(2) Time of Conversion/Destruction

(i) “Stand-Pat” rule – FMV at time of

(ii) Highest value between conversion and

(iii) Highest market value within a

(3) Place of Conversion/Destruction

(i) Retail market, wholesale market,

(b) Geographic sense of “place”

(i) If held for use, add cost of transport

(ii) If held for sale, deduct cost of transport

More Free Outlines: http://c.finamore.home.comcast.net or http://finamore.net 4

a) General: Cost of Repair

(b) Physically viable: antique, unique piece, etc.

(2) Policy: Cost of repair actually reflects true cost as

(3) Use Diminution in value if Cost of Repair isn’t

(b) Rule: (see above rule for Cost of Repair)

(i) Measure if no rental market available:

(2) Lost income while the item couldn’t be used

(3) Rule: Loss of use damages are recoverable even

More Free Outlines: http://c.finamore.home.comcast.net or http://finamore.net 5

(i) Pro-rated for amount of land trespassed

(b) Cost of Repair

b) Nuisance (intentional interference with use and

(i) Usually available when nuisance can’t

(b) Reasonable Rental Value

(i) if the nuisance is continuing

(b) Cost of Repair/Clean-up/

(d) Lost Profits

c) Trees and Crops Injuries

(b) Cost of Replacement

More Free Outlines: http://c.finamore.home.comcast.net or http://finamore.net 6

(d) Value of right to prospect (grow crops if seeds are

(2) Loss of Earning Capacity

(2) Lost Wages

(2) Negligent – rescission, damages

(3) Innocent – (all but one jdx) rescission only

(2) Benefit of Bargain - Value as Promised minus

More Free Outlines: http://c.finamore.home.comcast.net or http://finamore.net 7

(3) Cost to Make Representation True (preferred

(4) Flexibility Rule – court can adopt any of the

b) Trade Secret Publication –

(b) Maybe - injured party’s profit margin times

a) Policy: Put the plaintiff in the position he would