REMEDIES OUTLINE
I.
II.
Introductory Information
A. Classifications of Remedies
1. Specific v. Substitutional
a. Specific: preventing harm, undoing harm, or in-kind remedy
b. Substitutional: money in place of what was lost
2. Four Categories
a. Damages: compensatory, nominal, punitive
b. Coercive: injunctions, specific performance, etc.
c. Declaratory: resolves uncertainty
d. Restitutionary: disgorging of unjust enrichment
3. Legal v. Equitable
4. Provisional/Preliminary v. Final
B. Rightful Position Principle: the purpose of damages is to restore the injured party,
as nearly as possible, to the position they would be in but for the wrongdoing
Compensatory Damages Generally
A. Contract v. Tort Conceptually
1. Contract law – Expectancy Damages – Looks forward to the position the
plaintiff would have been in but for the breach
2. Tort law – Pre-injury State – Looks back to the plaintiff’s pre-accident
condition as a proxy for the condition the plaintiff would be in but for the tort
B. Corrective Justice v. Economic Analysis
1. Corrective Justice: put the plaintiff in their rightful position
2. Economic Analysis: remedy the wrong in the most economically efficient
manner (e.g. construction damages – repair unless inefficient, then difference
in value)
C. Single Recovery Rule: the plaintiff cannot double recover damages
D. Defining Value
1. Value: what a third-party neutral would pay
2. Fair Market Value: sufficient if ascertainable
3. Special Property Exception: no market for the property, therefore, no FMV;
not just a question of whether property is special
4. Court is not concerned with individualized/sentimental value
E. *** Damages must be proven with reasonable certainty under the circumstances
F. Least Expensive Method of Wholeness
1. Example: for property, the plaintiff may receive the lesser of (1) market value
(2) replacement cost or (3) income or capitalization of earnings (use of
property as an income stream e.g. rental)
2. The law wants to put the plaintiff in the rightful position by the least
expensive means
3. Construction Damages and the Lesser of Two Rule
a. General Construction Damages
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i.
III.
IV.
The cost of Restoration/Repair if (1) cost is reasonable and (2) is
reasonably necessary (cost of repair does not have to be less than
difference in property value)
ii.
Otherwise, difference in property value before and after the wrong
b. Lesser of Two Rule
i.
the plaintiff may recover the lesser of (1) the diminution of the
property’s value or (2) replacement cost
ii.
Unless Special Property: property with (1) a unique use (2) suitable
only to the owner, and (3) without a fair market value – then
plaintiff is entitled to replacement/repair costs
G. Valuation Timing
1. Generally
a. Contract: at the time of breach
b. Tort: at the date of the wrong
2. Property of Highly Fluctuating Value
a. At the time of the loss; or
b. Highest value between
i.
The wrong and trial/filing/judgment; or
ii.
Awareness of the wrong and a reasonable time after
Personal Injury Actions
A. Besides damages like medical bills, most PI damages are not accurately calculable
besides comparison to other similar injury awards
B. Per Diem Damage Arguments
1. Argument by counsel that jury should allocate damages by a per day value
(e.g. paralysis is worth $100 a day at least!)
2. Jurisdictions are split about what is allowed to be suggested to the jury in
closing: (1) Nothing (2) Lump Sum and/or (3) Per Diem
3. Definitely not allowed – Golden Rule Argument: “Put yourself in P’s
position; what would you want?”
C. Personal Injury Damages Categories
1. Pain & Suffering
2. Medical Costs
3. Lost Wages (Future and Past)
4. Disfigurement
5. Aggravation of Condition
6. Emotional Damages
D. Wrongful Death: Loss to Survivors
1. Medical Costs
2. Funeral Costs
3. Lost Support (Wages minus Spending on Self)
4. Emotional Distress (if observer)
5. Loss of Society/Companionship/Consortium
Expectancy and Reliance
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V.
A. The law does not prevent “excessive” expectancies
B. Reliance: injured party is put in the pre-contract position; any value expended
toward performance may be recovered.
1. Frequently applies even when there is not a valid contract due to fault by the
breaching party – equitable estoppel
2. Essential Reliance: cost of performance
3. Losing Contract: if plaintiff has no anticipated profits but would lose money if
fully performed, plaintiff may recover reliance minus expected loss from K
C. Efficient Breach
1. A breach of contract that is profitable in spite of paying other party’s
expectancy damages
2. Looked upon neutrally by the law because of its efficiency and for utilitarian
overall positive impact
3. Different from Opportunistic Breach in which the breaching party is better off
but the injured party is worse off. Disfavored by the law.
D. Breach of Warranty Damages
1. Value of what was supposed to be delivered – Value of what was delivered
2. i.e. Value of Promise – Value of Performance
3. This formula generally is applied even when the difference is immense,
implying that what the buyer expected was unrealistic. The court puts most of
the blame on the seller who over-promised
E. Lost Volume Seller: a plaintiff may recover lost profits resulting from breach of
contract if seller could have met buyer’s order AND all other demand
- (1) seller’s supply exceeds demand and (2) other sales would have happened
even if no breach
- “Cover” is not counted against the seller because the seller could satisfy extra
volume
F. Essential Reliance Look up in treatise
Consequential Damages
A. Definition: special damages caused by the breach, which were within the
contemplation of the parties at the time of the contract. Foreseeable Damages at
the time the agreement was made.
B. Direct v. Special Damages
1. Direct: inherently flow from the wrong
2. Special: damages resulting from particular circumstances
a. In Contract: Consequential Damages
b. In Tort: Proximate Damages
C. Exception: Damages for Delayed Payment
1. A plaintiff suing for damages from delayed payment is limited to interest for
the extent of the delay
2. The exception applies whether plaintiff is able to mitigate by borrowing
money or not
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VI.
VII.
3. Without this exception, mitigation would require the plaintiff to cover by
lending money if possible, but if impossible, plaintiff could recover
consequential damages arising from delayed payment
Limitations on Damages
A. Modified Remedies
1. A contract may provide for a special type of remedy. Most common is a repair
or replace provision in a sale of goods K
2. Parties may and frequently do contract to waive consequential damages.
3. Majority Rule: limited remedy terms and waiver of consequential damages are
separate provisions; therefore, breach of the limited remedy does not make
waiver of consequentials unenforceable
4. UCC: If a modified remedy Fails of its Essential Purpose or deprives a party
of the substantial value of the bargain under the circumstances, the remedy
provision fails, and gap fillers replace
5. Some limits on damages are unconscionable (e.g. personal injury damages)
B. Liquidated Damages
1. Test for High Liquidated Damages: There must be
a. Some Uncertainty about damages prospectively (anticipated damages are
unclear); and
b. Not Punitive: actual damages are approximately
i.
Anticipated Damages; OR
ii.
Actual Damages
2. Most Jurisdictions will enforce an unreasonably low liquidated damages
clause; some jurisdictions will let P choose between LD and actual damages
3. The same rate of liquidated damages may not be applied to breaches of
obligations of different importance
Mitigation
A. Affirmative Defense asserting that the plaintiff could have avoided some of the
damages sustained, absolving the defendant of liability for those damages
B. Avoidable Consequences: the P may not recover damages that could have been
avoided by prospectively reasonable efforts to mitigate
C. Reasonableness of cover options is assessed from time of the breach, not
retrospectively
D. Defendant can’t argue that the plaintiff could have mitigated by means the
defendant could have used to perform
E. Offsetting Benefit
1. Damages may be reduced by any benefit plaintiff received that would not
have been available but for the defendant’s breach/wrong
2. Typically have to be damages of the same kind – breach of employment K;
other job/work found is an offsetting benefit, but not if outside work hours (?)
F. Collateral Source Rule
1. The jury is not to be informed of payments made to the plaintiff from a
collateral source
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VIII.
IX.
2. Damage award is not offset by insurance coverage
Tort Reform
A. Tort Reform Recommendations and the RP
1. Many statutes limit non-economic damages in tort cases – prevents P from
returning to rightful position
2. Eliminating Collateral Source Rule: doesn’t harm RP; P is getting
compensated – issue is that it disincentivizes getting insurance
3. Limit/Abolish Punitive Damages: doesn’t impact RP because already a
windfall
4. Abolish Joint & Several Liability – interferes with the RP insofar as P can’t
recover against other tortfeasors
5. Recovery of Attorney’s Fees if Frivolous Case – no impact on RP; P doesn’t
deserve anything
6. Limit Contingency Fee %: doesn’t impact RP
7. Reduce Compensation if Early Death/Lower Medical Costs Retrospectively –
arguably is more accurate at putting P in RP by preventing windfall from
difficulty of predicting damages at trial
8. Shorten S.o.L.: heavily damages the RP by outright barring good claims
B. Challenges to Recovery Caps
1. Right to Jury Determination: jury said $X, you stopped them; usually fails
because cap is law applied after fact-finding
2. Separation of Powers
3. Irrebuttable Presumption Damages < Cap
4. Equal Protection – effective to kill laws on medical malpractice and products
liability specifically; greater protection to those Ds than others
5. Fundamental Right to Full Compensation/Remedy
C. Remittitur: judge gives option of retrial or highest judgment that would not shock
the conscience
1. Doesn’t deny the right to a jury because of the optional retrial
2. Defendant may make a motion for remittitur
D. Additur: opposite; option of retrial or lowest judgment that doesn’t shock the
conscience
E. Presumed Damages: recognized in defamation law but not constitutional violation
cases
Taxes, Interest, and Discounting to Present Value
A. Taxes
1. PI awards are not subject to income taxes; other forms of recovery are
2. Some courts, including federal courts, provide an instruction to the jury
informing them PI awards aren’t taxed so they shouldn’t increase the award to
make up for taxes
3. Arguably necessary to prevent a windfall – if P would have paid income tax
on lost wages but won’t pay tax on the award, P gets windfall
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X.
4. Other side – Congress wouldn’t give a special exemption for PI awards unless
they wanted Ps to get a windfall
B. Pre-Judgment Interest
1. Default Rule: no pre-judgment interest unless ascertainable damages – if it is
clear at the time of breach what the D owes if liable
2. Allowed in maritime cases
C. Post-Judgment Interest
1. Awarded in every state
2. Amount is set by statute
D. No Compound Interest – only simple interest
E. Discounting to Present Value
1. Single Judgment Principle: we want one payment for finality of the matter,
but award must be adjusted
2. Awards of Future Damages are adjusted to account for the time value of
money and inflation
3. Investment Value
a. Rate of interest that would be earned on the best and safest investment
b. Adjusts award down – by giving future damages now, you can invest it
and make money, so if you got the full value now, you’d be
overcompensated
4. Inflation: adjusts award up because money will be worth less once you reach
the point in the future when your damage would be sustained
5. Generally, investment rate > inflation
6. Compound interest is used to adjust to present value
7. Total Offset Rule: PA law assumed Investment Value and Inflation match
each other; most courts don’t
8. Employment and Lifespan
a. How long will/would the P keep working?
b. How long will/would P live?
Punitive Damages
A. Culpability Requirement: D must be guilty of something worse than mere
negligence – e.g. willful and wanton conduct, gross negligence, recklessness,
intentional conduct, etc.
B. By definition a windfall for the P
C. Some statutes will give part of punitive award to the state
D. Constitutional Limit on Punitive Damages
1. BMW Guideposts
a. Reprehensibility of Defendant’s Actions
b. Ratio of Punitive to Compensatory Damages
c. Analogous Civil or Criminal Penalties or Fines
2. Ratio Issue: if compensatory damages are significant
a. Double digit rations are usually unreasonable
b. 4:1 is the upper end of reasonableness
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XI.
XII.
c. 1:1 is probably reasonable
3. If compensatory damages are very low or nominal damages awarded, higher
ratios are permissible
4. Wealth of the Defendant is usually permissible to consider, but not in the
federal system
5. Damages to non-parties can’t be used directly to calculate punitives
E. No Punitive Damages in Contract
Injunctions Generally
A. Ripeness/Mootness: standing issue – there must be a case or controversy
1. Ripeness: a despite seeking an injunction is ripe if there is an imminent threat
a. Time Element: the temporal proximity of the threat
b. Probability Element: the threat can’t be remote or speculative
- Pepsico: employee only covered by confidentiality agreement; working for
Coke presents an almost inevitable, unavoidable breach – inj. granted
2. Mootness: is there no longer a controversy where there once was one – injury
and risk removed
a. Exception 1: Capable of Repetition but Evading Review
b. Exception 2: Voluntary Cessation that May Resume – court will evaluate
whether there is a sufficient probability of reoccurrence
B. Types of Injunctions
1. Preventative: injury has not yet occurred; prevent future injury
2. Reparative: prevent further harm from past injury
3. Structural: complex injunctions meant to change structural problems
C. Irreparable Injury Rule
1. In order to receive equitable relief, there must be an inadequate remedy at law
2. If equitable remedy denied there would be an otherwise irreparable injury
D. Scope of the Injunction
1. Injunction must be narrowly tailored to put the least necessary restriction
because of the exceptional nature of the remedy
2. No “Follow the Law” Injunctions – the law is already a deterrent
E. No Double Recovery
1. P can’t get both an injunction and damages for future harm
2. Injunction to prevent future harm and damages for past harm is OK
F. Rightful Position v. Equitable Discretions
1. Rightful Position: injunctions should still be guided by the principle of putting
the P in their rightful position, regardless of impact on D
2. Equitable Discretion: some courts have applied an equitable discretion
standard – the D has committed some wrong, so an injunction windfall for the
P is better than one for the D
3. Lannetti’s View: putting the P in the RP is the goal, but in some cases, the RP
is unclear or impossible to determine; then, courts should use Equitable
Discretion to be fair as far as possible
Irreparable Injury Rule
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XIII.
A. Facts and Myths
1. Injunctions are a greater burden on the court – Myth; enforcement of
judgments is burdensome too, and P may need to bring multiple actions
2. Injunctions are a greater intrusion on D’s liberty – Myth; D already is not
allowed to do whatever is enjoined
3. Injunctions require quicker responses from the court – Partially True in
respect to TROs and Preliminary Injunctions; Permanent Injunctions are no
more time sensitive than normal actions
4. Rule protects right to a jury trial – True; protected D from P going around the
jury system and then negotiating a money settlement
5. Rule allows for efficient breach – True
B. Harms That Satisfy IIR
1. Multiplicity of Suits
2. Reputational Harm/Difficulty in Determining Damages
3. Risk of Personal Injury
4. Unique Property – Real Estate or Special Personal Property (no market)
5. Market Shortage – Can’t cover
6. * Insolvency – only partial support; not enough on its own
C. Harms That Don’t Satisfy IIR
1. Sentimental value of property
2. Decrease in property value
D. Replevin – exception from the IIR; technically a legal action
Balance of the Hardships
A. Burden on Defendant if injunction granted
1. Permanent v. Preliminary Injunctions
a. Permanent: after D adjudicated to be in the wrong, so some extra burden
on D is ok, just Not Disproportionate
b. Preliminary: complete balancing – greater burden on D not permissible
2. Economic cost of conforming
3. First Amendment Rights
a. If scope of injunction is too broad – unconstitutional prior restraint
b. Must be narrowly tailored to speech already adjudicated as not
constitutionally protected
c. E.g. “P is a thief!” D may be enjoined from making that statement again;
can’t enjoin saying anything about P; covers statements that may be
completely permissible
4. If D committed Deliberate Wrongdoing – undue burden on D defense fails
B. Burden on Plaintiff if no injunction
C. Burden on the Court
1. Court has discretion over evaluating this issue; will ignore if a matter of
serious public interest
D. Public Interest
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1. Economic Impact on Community (e.g. shutting down nuisance major
employer would hurt local economy)
2. Environmental Issues
3. Defendant or Plaintiff may be used as a proxy for the public – P’s right to use
property is infringed translates into the right of property owners to use their
property as they wish
E. Per se Undue Burden on D
1. Special Performance of Personal Service Ks: raises 13th Amend. issues
XIV. Preliminary Injunctions and TROs
A. Due Process Concerns
1. Courts are reluctant to grant because the Defendant is not getting their full due
process
2. In exceptional circumstances, court will even permit ex parte proceedings
B. Status Quo Principle:
C. Injunction Bond: bond put up in case a preliminary injunction is later held to have
been erroneously granted
D. Whether bond is required and how much is entirely up to Court Discretion
E. Temporary Restraining Orders (TROs)
1. Often ex parte
2. 14 day duration limit
3. Unappealable (no formal findings & short duration)
4. Importance of court distinction whether it is issuing a TRO or Prelim.
F. Preliminary Injunction hearing and trial may be consolidated so that presentation
of evidence in the first carries over
XV. Declaratory Relief
A. Statutory Remedy, not found in the common law
B. Purpose: to clarify the law or facts and prevent future disputes
C. Only typically used in a few areas
1. Constitutionality of a Statute
2. Intellectual Property Rights
3. Insurance Coverage
D. Difference from Injunctions
1. Looser ripeness standard
2. Does not have to be individuated like an injunction
3. No IIR
4. No force of contempt of court, just issue preclusion
XVI. Restitution
A. Basic Principle: where would the defendant be had there been no wrong; put the
D in the pre-wrong position
1. Not punitive because it doesn’t make the D worse of than if no wrong
2. Restitution may exceed Compensatory Damages because the law would rather
the P get a windfall than the D profit from wrongdoing
3. P can’t recover Restitution AND Compensatory Damages
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B.
C.
D.
E.
F.
G.
H.
4. Amount
a. Only as much as necessary to put D in the pre-wrong position
b. In conscious wrongdoer cases, doubt is resolved in favor of the P
Reasons for Seeking Restitution
1. Defendant’s Gain > Plaintiff’s Loss
2. No Other Remedy (e.g. mistake)
3. Insolvency: P can get 100% money owed, not share of bankruptcy estate
Common Cases
1. Mistake: P confers a benefit on D by mistake
2. Emergency Benefit: P confers a benefit in an emergency without consent
3. D acquires benefit from P through an unlawful act
4. P confers a benefit on D pursuant to actual/supposed K
Restitution and Breach of Contract
1. Restitution not available if efficient breach
2. Is always available for cases of fraud, misappropriation, conversion, fiduciary
duties, and infringement
3. Facts Against Efficient Breach – Actually Opportunistic Breach
a. D Bypassed the Market
b. Defective Construction
c. Specific Performance is Available
d. Culpability
e. Lost Opportunity
Mere Volunteer/Officious Intermeddlers
1. Someone who confers a benefit on the D without the D’s knowledge or
consent may not then sue for restitution
2. If D knew and didn’t stop P, restitution may be available
Special Cases
1. Innocent Improver Cases: Innocent landowner has choice between
a. Paying the value of the improvements and keeps them
b. Sells land to P that improvements are on
c. Reversal of Non-Superseded Judgement
2. Reversal on Appeal – No Supersedeas Bond: P entitled to proceeds of
sheriff’s sale, not FMV
3. Valuation under Quasi-Contract: if D consented – value of serves, not the
increase in property value
4. Farash: No enforceable K; No benefit to the D – “restitution” of the expense
sustained by P; reliance under the guise of restitution
5. Losing Contract (Boomer v. Muir): P with negative expectancy may seek the
following depending on the jurisdiction – (1) Prorated K Price for amount
performed (2) Cost of Performance (highest) (Majority Rule) (3) Cost Minus
Expected Loss
Accounting for Profits: court order to D to disclose all profits
Apportionment: how much of the profit is attributable to the wrong?
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1. After wrongful conduct is proven, it is presumed that ALL profits are from
wrongdoing
2. D bears the burden of proving that some profits are attributable to the D’s own
efforts or contributions
3. D may deduct variable costs from gross receipts, not fixed overhead
I. Rescission
1. Cancels Transaction and Reverses all Benefits – Puts both parties in their precontract position
2. Must be an enforceable K
3. Bases
a. Total Breach: substantial impairment of the value of the whole K
b. Fraud
c. Duress
d. Mutual Mistake
e. Unilateral Mistake
XVII. Constructive Trust and Tracing
A. Constructive Trust
1. Elements
a. Unjust Enrichment
b. Traceable/Identifiable Property
2. Plaintiff may also recover profits and other benefits received from the P’s
property
3. In the context of bankruptcy, the unjustly enriched party would be other
creditors, not the wrongdoer
4. Plaintiff has burden to prove tracing by clear and convincing evidence
5. Constructive Trust Money in Bankruptcy: may be construed as not passing
into bankruptcy estate or P has priority over creditors in bankruptcy to the full
amount
B. Equitable Lien
1. Lien placed on specific property
2. May or may not be able to demand liquidation
3. Recovery is limited to lien amount – can’t recovery profits
C. Tracing
1. Bona Fide Purchaser: if there is a BFP, P can’t recovery the property but can
recover profits from the sale
2. Constructive Trust Money: P has priority over creditors for constructive trust
money; P cannot get profits if there are any remaining unpaid creditors
3. Presumptions
1. Presumption that Wrongdoer Spends His Own Money First
a. Keeps misappropriated funds in the account
b. New Money deposited does not replace victim’s already spent money
2. Presumption That Wrongdoer Invests the Victim’s Money First
o Cannot defy actual chronology of events
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o Presumption can be used to establish fractional interests in investments
3. Presumptions applied after the fact in the way most favorable to the P;
every possible assumption is made in P’s favor
XVIII. Contempt
A. Elements
1. Individuated Court Order
2. Service
3. Failure to Comply (Willfully/Intentional)
B. Criminal Contempt
1. Prosecuted in the name of the state
2. Fines go to gov.
3. Criminal procedures and protections apply
C. Compensatory Civil Contempt
1. Prosecuted in the name of the P
2. Same rules are applied as an action for damages
3. Fines go to the P
4. Clear and convincing evidence standard
D. Coercive Civil Contempt
1. Typically, imprisonment to coerce action; defendant may secure release at any
time by compliance
2. May only be exercised if and so long as it has a coercive effect; if not, the D
must be released
o Duration is irrelevant
3. In federal system, witnesses who refuse to testify may be held 18 mo. Max
E. Collateral Bar Rule
1. A party cannot collaterally attack an injunction in a contempt hearing
2. Even an invalid injunction may be used as a basis to hold a party in contempt
3. The enjoined party must use the legal process to challenge the validity of the
injunction, not merely disregard it, even if a good faith belief it is invalid
4. Exception: if the court lacked jurisdiction to issue the injunction, the rule does
not apply
XIX. Enforcement of Judgments
A. Record judgments in counties to get a lien on real property in the county
B. Writ of Execution is used to enforce against personal property
1. Writ is delivered to sheriff who levies property and sells
2. Valid Levy requires sheriff to generally exercise as much control of the
property as the nature of it permits
C. Garnishment
1. Means of executing against debts owed to the judgment debtor
2. Typically wages, bank account, and anyone else who owes them money
3. If garnishee negligently allows depositor to withdraw money or other harm,
garnishee is liable
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4. If garnishee fails to answer the writ of garnishment, the garnishee could be
liable for the full judgment, even if no debt was owed by the garnishee to the
judgment debtor
D. Debtor’s Interrogatories: questions posed to debtor under oath regarding assets
E. Exemptions: D’s property may be covered by a number of different exemptions
XX. Attorney’s Fees
A. American Rule: each party pays their own fees
- Most countries make losing party pay other side’s fees
B. Exceptions
1. Statutory Provisions
2. Contract Terms
3. Domestic Relation Cases
4. Sanctions for misconduct in discovery or bad faith litigation
5. Collateral Litigation Expenses
XXI. Defenses
A. In Pari Delicto: legal defense – P is mostly responsible
B. Unclean Hands
C. Unconscionability
D. Estoppel – emphasis on reliance by P
E. Waiver – intentional conduct or statement
F. Laches – delay & prejudice
G. Statute of Limitations
H. General Equitable Discretion
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