Lesser of Two Rule: The court find the least expensive way of putting the P back in the rightful

position- societal view of efficiency Lesser of two rule 1. Diminution in market value- worth x before damage and worth y after 2. Cost of replacement- cost of buying another of what you just lost (same condition) 3. Cost of repair + loss of use Go with lesser of 3 special property exception Special property exception to lesser of two rule: applies when there is not market for the property so diminution in market value valuation is not possible Test: 1. Must be unique and specially built for a special purpose 2. Specific use 3. No market for the type of property 4. Improvement is appropriate Liquidated Damages Courts will not uphold a liquidated damage clause if its seen as a penalty. A clause is a penalty and not a reasonable attempt to estimate damages, when: o A contract states several obligations of different importance, and the liquidated damage clause provides the same liability for breach of any of them. o When the liquidate damage clause provides for compensation thats unreasonably high in light of the anticipated or actual loss caused by the breach. (over-liquidated)

TRO & Preliminary Injunction Standard ELEMENTS: 1. Strong likelihood of success on the merits 2. Likelihood of irreparable injury to P absent the injunction 3. Balance of hardships in favor of P a. the irreparable harm to P if the injunction were improperly denied; VERSUS b. any harm to the D if the injunction were improvidently granted (could lead to injunction bond on P 4. Advancement of the public interest (easy to meet perfunctory inquiry) a. ordered by court prior to trial on merits of case b. valid no longer than until trial on merits TRO ONLY: show that harm is imminent, so rush TRO is necessary!! TIMING!! 1. Urgency 2. Duration 3. Notice 4. Appealability

Factors re: whether an injunction to prevent future violations is necessary: 1. bona fides of expressed intent to comply (this factor seems to collapse into 2 & 3) 2. effectiveness of discontinuance 3. character of past violations propensity requirement 1) Is there sufficient evidence of imminent harm? 2) OR substantial certainty that the harm will occur? (Could be shown with past pattern of similar behavior OR statement by D that he will act) AND 3) are facts sufficiently developed for reliable decision? (ripeness requirement) Ripeness RULE: Party seeking injunction must show potential irreparable injury as essential condition for relief AND must demonstrate in addition (1) that there is real danger that acts to be enjoined will occur, (2) that there is no other remedy available, and that, (3) under those circumstances, court should exercise its discretion to afford the unusual relief provided by injunction Test for Injunctions: To get a preventive injunction, the movant must show that: (1) There is a real threat of unlawful conduct (specific evidence, not speculation) This does NOT require that D have already committed one violation before he can be can be enjoined from committing another. This does NOT require that D explicitly threaten a violation or admit his intention to violate. However, it may be difficult to prove that an injunction is necessary w/o a first violation or threat (2) resulting in a real threat of injury to the P. City of Los Angeles v. Lyons (1983): P challenged a police practice of choking arrestees. Even though the police had already choked Lyons once, the Court held that Lyons suit to enjoin future choking was unripe, b/c he could not show any likelihood that he personally would be choked again. (3) The injury must be irreparable (absent the injunction). Irreparable = if we wait, it will be too difficult to repair the harm through money damages. (4) The issue must be ripe for litigation. Ripe = the facts/evidence must be sufficiently developed to prove that the specific harm will occur. Ex// Case against a mobster, who has bribed and tampered with juries in the past. If the case was just filed, then an injunction against jury tampering wouldnt be ripe at that time b/c theres no substantial certainty that the jury tampering will actually happen. Not certain that the case will go to trial (it could settle), that the case will be tried before a jury (it could go before a judge), etc. Equitable Discretion The judge has a roving commission to do good, and should see that equity is done to all within his jurisdiction and thus that the problem should be resolved. Injunction & Third Parties 1. If the ORDER is directed TO DEFENDANT Third parties can be affected substantially, but NOT to the point of being restructured. (laundering an order) 2. If the ORDER is directed TO THIRD PARTY OR PARTY NOT LIABLE Minor and ancillary is okay. To show that a remedy is appropriate, need to prove that (1) the party violated the law and (2) the remedy extends no further than necessary for implementation.

The Irreparable Injury Rule (default rule): Courts will not grant an equitable remedy (injunction) if a legal remedy (money damages) would be adequate. If money damages are adequate (to restore the P to his rightful position), then the injury is not irreparable and an injunction will not be issued by the court. Test: What does adequate mean? o Court will consider the uniqueness or replaceability of the item to be replaced. If its too unique (and if it cant be replaced), then use injunctive relief. If its not unique (and if it could be substantially replaced by purchasing a substitute), then use money damages. o A legal remedy is adequate only if it is as complete, practical, and efficient as the equitable remedy. A legal remedy levied against an insolvent/judgment-proof D is inadequate. o When deciding re: choice of remedy, Courts will also consider: If a remedy places a disproportionate burden on the D or the Court (e.g. injunctions that require ongoing monitoring). If it would force specific performance of an employment contract (which is not allowed). Rule: In a time of shortage (scarcity), the buyer can get specific performance of a K for an item that might not ordinarily be seen as unique (thus, a shortage can make an item unique). Specific performance of Ks for the sale of ordinary goods may also be granted if time constraints or sheer size of the K make it difficult/impossible to cover. Courts frequently grant specific performance of Ks for the sale of ordinary goods if scarcity, time constraints, or the sheer size of the K make it difficult or impossible to cover. Factors: - Damages difficult or impossible to ascertain: Continental Airlines - Scarcity: Campbell Soup - Uniqueness: cutting down trees - Fears and speculation cannot justify injunctive relief Nicholson - Subjective fear, even if leading to decline in property value, not sufficient; Nicholson

When replacement/cover is possible, but difficult: Majority: Grant specific relief. Substantial minority: Do not grant specific relief, instead grant damages. o Due to the irreparable injury rule, damages are viewed as adequate even if the goods are replaceable only with difficulty or only with similar (but not identical) goods. BLACK LETTER LAW- REMEDIES A. Compensatory Damages B. Reliance Damages C. Restitutionary Damages D. Nominal Damages E. Punitive Damages Constitutional Restraints: In determine whether a punitive damage award violates the excessive punishment standard, the following factors considered (BMW): 1. the degree of reprehensibility of defendants conduct 2. the disparity between the harm or potential harm suffered by the plaintiff and the punitive damages award; and 3. the difference between the remedy and the civil penalties authorized or imposed in comparable cases

To determine reprehensibility of defendants conduct, P may be required to establish one of following: 1. harm was physical rather than economic 2. tortious conduct demonstrated an indifference to, or reckless disregard for, the health or safety of others 3. the target of the conduct had financial vulnerability 4. the conduct involved repeated incidents rather than an isolated incident 5. harm was the result of intentional malice, trickery, or deceit rather than a mere accident (State Farm Mut. Auto. Ins. Co.. v. Campbell) Ratio between compensatory and punitive: No bright line test but award that exceeds single-digit ratio between punitive and compensatory damages will rarely comply with Due Process Clause Defendants wealth also important consideration in determining excessiveness of punitive damage award. Factors for Prejudgment Injunction 1. P will suffer irreparable harm if injunction not issued 2. The Ps hardships if the injunction is not issued will be significantly greater than the hardships on the D and third parties if the injunction is issued (balancing the equities in the Ps favor) 3. likelihood that P will succeed on merits Permanent Injunction 1. irreparable harm if injunction not issued 2. hardships if injunction is not issued will be significantly greater than hardships on D and third parties if injunction issued Specific Performance 1. must be a contract 2. contract terms must be sufficiently certain to provide a basis for the court order 3. conditions required for the defendants performance must be satisfied 4. damages must be inadequate to protect Ps expectation interest 5. relief must be equitable 6. enforcement must be feasible Specific performance will not be granted when this relief unfair: 1. sharp practices- Ps behavior does not rise to level of contract defense but only contains elements of such defense (unconscionability, misrepresentation, duress, undue influence) 2. mistake 3. hardship 4. inadequate consideration 5. defenses (estoppel, laches, unclean hands) To get constructive trust: 1. D holds title to property to be subject to constructive trust 2. Ds retention of property would unjustly enrich D 3. legal remedy is inadequate Equitable lien- reqs essentially same as for constructive trust except P who provides services that improve Ds property may be entitled to EL on such property, even though P would not be entitled to CT with respect to property value of property goes down seek EL value goes up seek constructive trust