Tabb, Spring 2017
Part I: Injunctions and Specific Performance
Definition: a court order designed to avoid future harm to a party by prohibiting or mandating certain behavior by another party. The injunction is “preventive” in the sense of avoiding harm. The wording may be either prohibitory (“Do not trespass”) or mandatory (“Remove the obstruction”).
Traditional Requirements (eBay Inc. v. MercExchange (2006))
A plaintiff seeking an injunction must demonstrate:
(1) that it has suffered an irreparable injury;
(2) that remedies available at law are inadequate;
(3) that, considering the balance of hardships between the plaintiff and the defendant, a remedy in equity is warranted; and
(4) that the public interest would not be disserved by a permanent injunction.
Inadequate Remedy at Law
(1) too speculative or hard to measure damages;
(2) multiple damage actions would be necessary because of the nature of the invasion of the plaintiff’s rights;
(3) continuity of harm;
(4) subject matter is unique;
(5) whether personal issues are important or relevant;
(6) whether monetary damages are effective
Remedies are adequate if:
(1) the harm can be easily and accurately ascertained in a single action. This is most common when the plaintiff has suffered the entire injury by the time of trial and the condition giving rise to the harm has abated.
(2) where the conditions causing the harm is continuing but can be easily rectified [In Connor v. Grosso, 259 P.2d 435 (Cal. 1953), the court found the remedy at law adequate after the defendant left litter on the plaintiff’s property. Although the trespass was continuing in that the litter was still on the plaintiff’s property at the time of trial, the court concluded that the remedy at law was adequate because the plaintiff could pay for someone to remove the trash and then sue the defendant for the cost incurred.] Trespass:
Continuing trespass (show that the defendant won’t vacate)
Repeated trespasses (requires a showing that the defendant is likely to continue to repeat the invasions in knowing violation of the plaintiff’s rights).
Definition: issued to enforce contractual rights and duties.
(1) the existence of a valid contract with definite and certain terms;
This requirement must be distinguished from the level of definiteness required to support a finding of contract formation. A higher level of certainty and definiteness of terms is required, then, as a predicate for specific performance than for damages at law. The reasons for the elevated role of certainty in equity are to aid the court in framing the decree and to ensure that the party enjoined understands with appropriate clarity the nature of the obligations expected. The latter consideration is critical because disobedience of the order could subject the party to potential contempt sanctions. Therefore, if significant contract terms are considered vague or ambiguous and not capable of reasonable interpretation through resort to extrinsic evidence, the court will decline equitable relief. In some cases, a court may supply a missing term, such as time for delivery or total quantity in an output contract, and authorize specific performance to carry out the parties’ expectations.
(2) the claimant is able and ready to perform their own duties and has satisfied all conditions under the agreement;
(3) the breaching party is able to render performance;
(4) no adequate remedy at law exists; and
(5) the balance of interests and relative hardships favors the claimant.
Additionally, the court of equity will take into account potential issues in fashioning, supervising, or enforcing the order. (excessive time & resources)
Mutuality of remedies
The modern view treats mutuality of remedies as just one factor in deciding the propriety of specific performance (The rule held that specific performance would only be available to one party if it was equally available to the other contracting party)
Courts will not order specific performance of contracts for personal services, such as contracts with professional athletes or artistic performers because:
(1) an adequate remedy at law exists unless the services are unique;
(2) such orders are difficult to supervise and enforce; and
(3) the constitutional prohibition of involuntary servitude.
Although equity will not compel performance of personal services, the court may grant a negative injunction to prohibit rendering the same services for another.
In the leading case, Lumley v. Wagner, an opera singer entered into an exclusive contract to sing for the proprietor of a London theater for a period of three months. Another London theater persuaded the singer to break the contract and perform for their opera production instead. The court granted an injunction restraining her from performing for the competing production. On appeal, the Lord Chancellor upheld the p
exercise of reasonable diligence; and
(5) the party claiming estoppel would sustain undue prejudice if the other party was permitted to take an inconsistent position from the facts originally asserted.
Definition: Remedy available where a contract is considered too oppressive or one-sided
Two Threads of Requirement:
(1) Procedural Factors:
Key idea: “lack of meaningful choice” by the party with lesser bargaining strength
gross inequality in bargaining power;
manner of formation flawed because sharp practices;
lack of understanding of risk because one party inexperienced, or unsophisticated in commercial matters;
Premise: would not have agreed if reasonably appreciated risks;
Did the stronger party know the limited resources or lack of knowledge of the weaker party?
Key idea: “unreasonably favorable terms”
Mathematical difference objectively wide in consideration exchanged for nature of product or services;
Reference to custom or standard practices in the industry;
Importance of the item to the buyer, such as necessities;
Lack of readily available alternatives;
Risk of default;
If the court finds that the contract or specific terms amount to unconscionability, there are three options:
(1) invalidate the entire agreement;
(2) enforce the remainder of the contract without the offending clause; or
(3) limit the application of the terms to avoid an unconscionable result.
Election of remedies
Definition: provides that when an injured party has two available but inconsistent remedies to redress a harm, the act of choosing one constitutes a binding election that forecloses the other.
Rejected by the UCC
Restatement: provides that the manifestation of a choice of inconsistent remedies does not bar another remedy unless the other party “materially changes his position in reliance on the manifestation.” A change of position is considered “material” if allowance of a switch in remedies would be “unjust.”