va.h.doran.equity w20 blanks 10.15 - amazon...

VIRGINIA EQUITY PROFESSOR MICHAEL DORAN

UNIVERSITY OF VIRGINIA SCHOOL OF LAW

CHAPTER 1: GENERAL PRINCIPLES

A. In General

• Equity refers to the rules and standards in the Commonwealth of Virginia for the application of equitable remedies.

• The main equitable remedies in Virginia are:

o Injunctions; o Specific performance; o ______________________________________________; o Rescission; and o Restitution.

B. Equity Jurisdiction

• In Virginia, a plaintiff brings a single action seeking legal remedies, equitable remedies, or both.

Example 1: My neighbor habitually trespasses on my land, and he causes damage to my garden. I sue him, asking for both damages to cover the cost of fixing the garden and an injunction to forbid him from trespassing on my land again in the future. Damages are a legal remedy, and an injunction is an equitable remedy. I bring a single civil action in a single Virginia Court demanding both damages and an injunction.

• Two differences between a claim for a legal remedy and a claim for an equitable remedy:

o A plaintiff has a right to a __________________________________________ in an action seeking damages, but not in an action seeking equitable relief.

o A successful plaintiff is entitled to damages as a matter of _____________________________ but is not entitled to equitable relief as a matter of right.

The decision to grant or deny equitable relief is left to the sound ______________________________________ of the trial judge.

C. Enforcement of Equitable Remedies

• The methods for enforcing equitable remedies are ______________________________ than the methods for enforcing legal remedies.

• Broader methods of enforcing equitable remedies give plaintiffs a significant advantage.

2 | © 2019 Themis Bar Review, LLC | VA Equity

Example 2: My neighbor has built a house on my land and is trying to establish adverse possession. I sue him for trespass and win. The court orders him to pay me damages, the traditional legal remedy. The court decides my neighbor must pay me $100 in damages, but it is up to me to enforce the damages award. If my neighbor does not comply with the damages award, I need to go back to court and get an order telling the sheriff to seize some of my neighbor's property so I can sell it off and get my $100. The law puts the burden on the plaintiff (Professor Doran here) to enforce damages as a legal remedy.

Example 3: Same facts as above, but I get an injunction ordering the neighbor to remove the house he has built on my land. That injunction is backed up by the power of the court to hold the neighbor in contempt. If my neighbor does not take down the house, I simply tell the court and the court can then decide that my neighbor is in contempt for disobeying the injunction. Using its contempt power, the court can impose a fine on my neighbor or even put him in jail. By defying the court’s injunction, my neighbor has defied the court itself.

• Contempt can be either ___________________________________ or ______________________________.

Example 4: Same facts as above. The court may institute criminal contempt proceedings against the neighbor. The court may decide to punish my neighbor with 30 days in jail. A criminal contempt proceeding is a criminal proceeding and the neighbor is entitled to all the __________________________ and ___________________________________ that apply in criminal proceedings.

The court could also institute civil contempt proceedings against the neighbor. The court could decide to fine the neighbor $10 per day until he complies with the injunction. Or, the court could incarcerate him until he agrees to comply with the injunction. The neighbor is not entitled to the same protections as in a criminal contempt proceeding.

• The court can take other direct actions to implement equitable relief.

Example 5: I sue my neighbor on a contract to sell me land. My neighbor has promised to sell me 10 acres of land and is now refusing to complete the sale. I sue and the court grants me ________________________________, an equitable remedy. Rather than order my neighbor to transfer the land, the court can effect the sale itself by giving me title to the land or by ordering a court officer to grant me a deed to the land.

• A court can itself enforce an ___________________________________ remedy against a defendant on behalf of a plaintiff.

VA Equity | © 2019 Themis Bar Review, LLC | 3

D. Cardinal Requirement for Obtaining an Equitable Remedy

• A court will grant the plaintiff an equitable remedy only if damages would not provide a full and ______________________________ remedy.

Example 6: My neighbor trespasses once on my land, damaging my carefully landscaped garden. I go into court asking for an injunction. The court will not grant me an injunction because damages provide an adequate remedy. The court says that making my neighbor pay for the damage to my garden is sufficient. It is just one trespass that has already occurred.

• When damages will not provide a full and adequate remedy:

o The plaintiff is suing over property that is __________________________________.

Example 7: If my neighbor contracts to sell me 10 acres of land and then backs out, I can seek an equitable remedy, such as an injunction or specific performance. Damages won't put me in possession of the specific 10 acres of land.

o The defendant acts in a way that would require _____________________________ lawsuits by the plaintiff.

Example 8: If my neighbor trespasses on my land every day, I would have to bring a new lawsuit seeking damages every time he trespasses. The traditional legal remedy of damages fails, so I can pursue an equitable remedy of an injunction.

o The defendant is obligated either to perform under a contract or pay damages and the defendant is __________________________________.

o The plaintiff is entitled to damages, which would normally be a full and adequate remedy, but the damages are _______________________________________________ or _______________________________________.

o The defendant's actions would harm the plaintiff and damages cannot compensate for the harm.

Example 9: The town I live in passes an ordinance that prohibits residents from saying anything critical about the town council, and the punishment is a $1,000 fine and 10 days in jail. That ordinance is a clear violation of First Amendment rights. I make a statement critical of the town council, and I am prosecuted and found guilty. I am fined $1,000 and sentenced to 10 days in jail. I could bring a suit for damages to recover the $1,000 and some payment for the time I spent in jail. Damages are not sufficient because there is an important constitutional right at stake and making the town pay me damages after the fact is an insufficient remedy. I should be able to get an injunction before the fact to prevent the town from enforcing the ordinance against me.


E. Limits on Equitable Relief

• _______________________________________

o The court will only order the defendant to do something that is within the power of the defendant to do.

• Violation of a constitutional right or ______________________________________ public policy

Example 10: I know the local paper is going to publish an unflattering story about me, and I go to court asking for an injunction against the paper. An injunction would violate the publisher's First Amendment right to freedom of the press.

• Interference with another __________________________________________ power

o A Virginia court will not tell another sovereign that it can or cannot do something because it is beyond the contempt power of the court.

• Contracts for ______________________________________ services

Example 11: I contract to mow my neighbor's law every week for the rest of my life, and then I breach this contract. An order from a court that I perform under the contract would result in involuntary servitude.

• Protection of property rights but not _______________________________________ rights

o Traditional rule: individual must show harm to property in order to get an injunction.

There are important exceptions to this rule.

CHAPTER 2: INJUNCTIONS IN GENERAL

A. Forms of Injunctive Relief

• An injunction can be either _____________________________________________ or prohibitory.

• Injunctions only apply to the person(s) identified in the injunction itself.

Example 12: My neighbor makes a habit of trespassing on my land and damages my garden. I may go to court and get an injunction against him to prevent future trespasses. If I succeed, I will have an order that tells my neighbor to stay off my land unless he has my permission. That order is in personam as to my neighbor. It doesn't apply to anyone else.

• A mandatory injunction is a court order that enjoins the defendant to do a specific act.

Example 13: My neighbor has been trespassing on my land, and he has also been dumping trash in my garden. I want to get a court order telling him to stop dumping trash in my garden. I also want him to remove the trash that he


has already dumped in my garden. I will ask the court for an order that directs my neighbor to come on to my land and remove the trash from my garden. If the court gives me that order, it will have given me a mandatory injunction.

o Courts are reluctant to grant a mandatory injunction unless there has been a full _____________________________________________ on the merits.

In Virginia, the longstanding rule is that a mandatory injunction will not be granted upon a preliminary hearing except in cases of “strong and imperious ______________________________________” where the right to the injunction is clear.

• A prohibitory injunction is a court order that enjoins the defendant not to do a specified act.

o More common than mandatory injunctions

Example 14: Same facts as Example 13. I also want a prohibitory injunction telling my neighbor to stop coming on my land and stop dumping trash in my garden.

B. Temporary Injunction

• An injunction that lasts for a limited period of time that is specified in the injunction itself • Typically goes into effect _______________________________________________ and can be

granted without a full hearing

o Sometimes, even without giving __________________________________ to the defendant

Example 15: My neighbor has sent a work crew out to his land to cut down trees. I notice that some of the workers are wandering onto my land and cutting down some of my trees. My trees are hundreds of years old, and so there is no way to replace them and damages are not an adequate remedy. I rush into court and ask the court for a temporary injunction to make the workers stop. The judge asks whether I have spoken to my neighbor. I tell the judge there is no time for that and I have no idea where my neighbor is. In the meantime, these workers are cutting down my trees. I am looking for a temporary injunction that will go into effect immediately and that I can get without a full hearing and without giving notice to my neighbor.

• Temporary injunctions are hard to get—the court does not hear the defendant's side of the story and so the burden on the plaintiff is a heavy one.

• Standard for granting a temporary injunction:

o The plaintiff does not have an adequate remedy at law; o The plaintiff is likely to succeed on the ______________________________________; o Without the temporary injunction, the plaintiff is likely to suffer

_______________________________________________ harm;


o The balance of the __________________________________ tips in the plaintiff’s favor; AND

o The temporary injunction is in the ___________________________________.

• The court may require the plaintiff to post a ____________________________ to protect the defendant in the event that the defendant wins on the merits.

• Can be issued by any Virginia circuit court that has jurisdiction over the parties and the underlying matter, even if that court is not the right venue for final disposition on the merits

• Must state the time during which the injunction shall be effective

o At the end of that time, the temporary injunction dissolves _______________________________________________, unless the court decides to extend or enlarge it.

o Usually long enough for a full hearing to be held on the merits

• The court can require the plaintiff to give _______________________________ to the defendant before the court issues a temporary injunction.

o This is within the discretion of the courts, but Virginia courts lean heavily in favor of requiring notice rather than issuing a temporary injunction on a purely ex parte basis.

C. Permanent Injunction

• Of _______________________________________________ duration • Issued as a final resolution between the parties

Example 16: My neighbor is cutting down trees on my land. I first get a temporary injunction that will last for 90 days. During those 90 days, the court holds a full hearing on the merits and considers the evidence presented by me, the plaintiff, and by my neighbor, the defendant. The judge grants me a permanent injunction. The permanent injunction prohibits my neighbor from cutting down my trees at any time. Unlike the 90-day injunction, there is no fixed end date for the permanent injunction.

• Can potentially last forever • Requires notice to the defendant and a full hearing on the merits • The court will not grant a permanent injunction on the basis of the plaintiff's pleadings or

_______________________________________________.

o The plaintiff will need to produce better evidence, such as depositions or live testimony.

• Can be issued by any Virginia circuit court that has jurisdiction over the parties and the underlying matter

D. Injunction Procedures

• The court may require that either party post a bond.


o The bond is referred to in Virginia as an "injunction ______________________." o Rationale: the potential harms to either the plaintiff or defendant if the injunction is granted

or denied

Example 17: My neighbor is cutting trees on my land. My neighbor and I are both in Virginia circuit court. I am arguing for a temporary prohibitory injunction, and my neighbor is arguing against one. If the court grants me the temporary prohibitory injunction, my neighbor may suffer economic harm as a result. If my neighbor ultimately wins after a full hearing on the merits, he will have gone some period of time during which he has not been allowed to cut down the trees, and that may delay his construction plans. The court may require that I post a bond as a condition for granting me the temporary injunction.

If after a full hearing, the court denies me a permanent injunction, I may suffer some harm. It may be that I will appeal the court's order and get the order reversed. In the meantime, my neighbor will be out there cutting down the trees on my land. The court may order the neighbor to post a bond to protect me while the appeal is pending.

o The decision to require a bond is committed to the sound discretion of the court.

The court will be much more inclined to order a bond from the plaintiff if the plaintiff is asking for a temporary injunction _______________________________ having given notice to the defendant.

o The court may not order a bond from:

A _______________________________________________; or The Commonwealth of Virginia or its agents or officers.

o The court may order the defendant to post a "forthcoming bond."

Allows the defendant to hold onto ____________________________________ after the court has issued a temporary injunction prohibiting the defendant from moving the property out of Virginia

Example 18: I have some piece of property, and a bank says that the property is security for a debt on which I am in default. The bank is concerned that I will try and move the property out of Virginia while the bank and I are litigating my liability on the debt. The court grants a temporary injunction to the bank that prohibits me from taking the property out of the Commonwealth. The court may require that I either turn over possession of the property to a court officer or post a forthcoming bond if I want to hold onto the property during the litigation.

• In order for a court to dissolve an injunction, the adverse party must be given notice.


• Appeals must be made within 15 days of a circuit court granting or denying an injunction.

E. Governmental Injunctions

• A writ of ____________________________________ to compel a governmental actor to perform some action.

• A writ of ____________________________________ to prohibit a governmental actor from performing some action.

CHAPTER 3: INJUNCTIONS IN SPECIFIC CIRCUMSTANCES

A. Injunctions Against Legal Proceedings

1. Criminal Proceedings

o Generally, a court will refuse to enjoin a criminal proceeding.

Example 19: I am being prosecuted for criminal trespass. The prosecution has already begun and is taking place in a Virginia state court. Can I file a civil action in Virginia court and successfully get an injunction against my prosecution? In most cases, no. The court will deny the injunction and let the criminal action continue. The criminal case gives me the fair opportunity to challenge the prosecution's proof and raise any defenses I may have. The injunction is neither necessary nor appropriate.

o Two exceptions to the general rule:

If there are two or more criminal prosecutions pending against me at the same time, the court may __________________________________ one or more of them so that the individual is only being tried in one case at one time.

Example 20: I am being tried for criminal trespass in Charlottesville, Richmond, and Alexandria all at the same time. The judge in the Charlottesville case may issue an injunction against the prosecution in the Richmond case and Alexandria case until the Charlottesville case is completed. My ability to defend myself is impaired if I am being tried in more than one court at one time. I have rights to be present at trial, assist in my defense, and confront the witnesses against me, which I cannot do if I am in another place at the same time.

Abuse of the _____________________________________

Example 21: The criminal prosecutions against me are mean-spirited attempts to harass me and to wear down my financial resources. The city of Charlottesville has enacted a ban against playing Frisbee in public parks, and I am the one spearheading public protests against the ban. The powers that be in Charlottesville are sick of the protests, and I am continually arrested and tried for criminal trespassing. The cases have no merit—my protests have been


peaceful and lawful. The court may issue an injunction against the current action and/or any future action.

2. Civil Proceedings

o Courts are also reluctant to grant injunctions against civil litigation. o Exceptions:

Harassing civil actions

Example 22: I think my neighbor is creating a nuisance by using his outdoor grill to cook steaks. I am a vegetarian, and I am offended by the smell of grilled meat, so I sue on a nuisance theory. I lose. The judge says that grilling steaks would not be offensive to a reasonable person. That is not good enough for me, so the next time my neighbor grills steaks, I sue again. I keep suing and I keep losing. At some point, the court may _____________________________ me from filing any further lawsuits on my grilled-steak nuisance theory. Typically, an injunction of this kind will not be absolute and will state that I need to get leave of the court before filing my civil suit. The court will act as a gatekeeper to protect my neighbor and the court from my repetitive, harassing, and frivolous lawsuits.

The party moving for the injunction can show that the civil judgment was obtained through fraud on the court or fraud on the ____________________________________.

Example 23: I keep suing my neighbor on the nuisance theory. At some point, I bribe the judge to rule in my favor, and the judge awards me $100,000 in damages. My neighbor discovers the facts, and he should be able to get a court order enjoining the enforcement of the damages award because I obtained the damages award through fraud on the judicial process.

B. Injunctions to Protect Real Property Rights

1. Waste

o A change in the conditions of real property caused by, or permitted by, someone who is lawfully in possession of the property to the detriment of someone else who also has a lawful interest in the property

Example 24: I am renting a house from a landlord for two years. I have a current right of possession, the lease, and my landlord has a future interest, the reversion. I am lazy, I don't clean the gutters or the downspouts after the leaves have fallen in the autumn. When winter comes, water backs up in the gutters, freezes, and damages the gutters and downspouts. My landlord may sue me for waste because I have allowed harm to come to the house and that harm prejudices her reversion interest. This type of waste, when I am allowing harm


to come to the property, is called _______________________________________________ waste.

Example 25: I am renting the house from my landlord for two years. I decide I would like the house much more if it did not have a detached garage next to it. I tear down the garage and plant corn where the garage had been. My landlord may sue me for waste because I have caused harm to the property and that harm has prejudiced her interest in the property. This type of waste, when I am actively causing harm to the property, is called _______________________________________________ waste.

The landlord sues me for waste. The landlord may be asking for the traditional legal remedy of damages or the equitable remedy of an injunction.

o In general, an injunction is available to prevent waste, particularly _______________________________________________ waste.

Courts are more reluctant to grant an injunction against _______________________________________________ waste because there is always the possibility that the individual will restore the property to its original condition before the end of the lease term.

2. Nuisance

a. Private nuisance

A substantial and unreasonable interference with an individual's use or enjoyment of real property

An individual can suffer from a private nuisance whether he is the owner or a possessor of the land.

Damages are an available remedy for private nuisance, but a more adequate remedy is an injunction.

Example 26: If my neighbor is having wild parties late at night making a lot of noise and keeping me up, what I really want is for the noise to stop.

Standard for getting an injunction against private nuisance:

• The nuisance threatens _______________________________________________ loss.

• The court may deny the injunction if the balance of the equities do not favor the _______________________________________________.

o In balancing the equities, the court tries to determine who will suffer the greater harm—the plaintiff, if the injunction is denied and the nuisance continues, or the defendant, if the injunction is granted and the nuisance is stopped.


o The interests of a private landowner are entitled to added weight when the court balances the equities.

b. Public nuisance

An unreasonable interference with the health, safety, or property rights of the community

Standard for getting an injunction against a public nuisance:

• The nuisance violates a ______________________________________ right of the plaintiff and causes the plaintiff harm that is not shared by the public at large;

• The harm to the plaintiff is serious; and • The private inconvenience outweighs any public benefit from preserving the

________________________________________________.

3. Trespass to Land

o An unauthorized entry onto land o The usual remedy for trespass is the traditional legal remedy of damages. o There are two situations in which the court may grant an injunction as the remedy for

trespass:

The trespass causes __________________________________ injury to the plaintiff; or

Example 27: The trespass may be continuous or repeated.

The trespass may involve damage to __________________________________ property.

Note 1: Even if the plaintiff would otherwise qualify for an injunction against the defendant's trespass, the courts will ordinarily not issue an injunction if there is a dispute as to the title of the property between the plaintiff and the defendant.

Example 28: I am going onto my land every day and cutting down trees. My neighbor claims that I am wandering onto her land and cutting down her trees, so she sues for an injunction. If I present evidence to the court that there is a dispute as to the title of the parcel of land, the court ordinarily will not order a permanent injunction. The court is more likely to order a temporary injunction, leaving the status quo until the title dispute is resolved.

4. Encroachment

o Continuing trespass in which a structure owned by the defendant reaches onto the plaintiff's land

o The defendant's state of mind will be considered by the court when determining whether to issue an injunction.

It is very difficult and costly for a defendant to remove an encroachment because all or part of the building will have to be moved.


If the encroachment was __________________________________________ and done in good faith, the court will balance the equities between the plaintiff and defendant.

• The defendant will usually come out on top.

If the encroachment was __________________________________________ and done in bad faith, the court typically will grant the plaintiff an injunction without balancing the equities.

5. Easements and Covenants

a. Easements

In the case of either an express or implied easement, the owner of the dominant estate typically can get an injunction to __________________________________ the easement against the owner of the servient estate.

Example 29: I have an easement to drive across a private road on my neighbor's land. It could be either express or implied. I have the dominant estate and she has the servient estate. At a certain point she becomes tired of my using the private road and she puts up a wall blocking my access. I can sue for a mandatory injunction to make her take down the wall. I will win that suit, and I will get my injunction.

b. Covenants

The courts will typically grant an injunction to protect the plaintiff's interest under a covenant.

Example 30: My neighbor and I have covenanted that neither one of us will build a fence on the boundary line that separates our properties. The covenant is one that runs with the land. At some point, I sell my land, and the buyer decides to build a fence along the property line. The neighbor sues and says there is a covenant against building the fence. She asks for a mandatory injunction to make the buyer take down the fence and a prohibitory injunction to prevent the buyer from building a fence in the future. The neighbor will win and get her injunction.

6. Title and Possession of Real Property

o Courts generally do not issue injunctions to a plaintiff who is trying to establish title or __________________________________ possession of real property.

o The plaintiff typically has an adequate remedy at law—such as a quiet-title action, an ejectment action, an eviction action, or an action for unlawful entry.


CHAPTER 4: INJUNCTIONS TO PROTECT BUSINESS INTERESTS

A. Covenants Not to Compete

• A contractual agreement between the plaintiff and the defendant that the defendant will not compete with the business interests of the plaintiff

• Used in variety of contexts but most litigated in the _______________________________________________ context

Example 31: I take a job as a regional salesman for ABC, Inc. ABC, Inc. manufactures and sells heavy equipment used in construction. It hires me as the principal salesman for central Virginia. My job is to travel throughout central Virginia, meet with current and potential customers and promote and sell the company's products. ABC, Inc. has one major competitor in Virginia, a company called MNO, Inc. MNO, Inc. also manufactures and sells heavy construction equipment, and it targets the same customer base. The two companies are head-to-head competitors.

When I sign on with ABC, Inc., the company has me sign a non-compete agreement. The agreement says that when I leave the employment of ABC, I will not go to work as a salesman for a competitor of ABC anywhere in central Virginia for a period of two years. I work for ABC for several years, and I am a very successful salesman. MNO notices this and hires me away. I am now working for MNO, which is the principal competitor of my former employer. ABC sues me and asks the judge for an injunction to prevent me from working as a salesman for MNO. Will ABC get the injunction?

• Virginia law is slanted against the enforcement of a non-compete agreement.

o A non-compete agreement is a restraint on trade.

• The court will interpret the non-compete agreement __________________________________ against the employer and give the employee the benefit of any ambiguities in the contract.

Example 32: Same facts as Example 31. If the non-compete agreement says that I will not go to work for any other manufacturer of construction equipment, the court may decide that I am free to go work for a distributor of construction equipment.

• Employer must show that the non-compete agreement is _______________________________.

o Reasonableness has three components:

Reasonable from the perspective of the ______________________________________;

• The restrictions are no greater than necessary to protect the legitimate business interests of the employer.


Reasonable from the perspective of the ______________________________________; and

• The restrictions are not unduly ____________________________ or oppressive in terms of limiting the employee's ability to go out and earn a living.

Reasonable from the perspective of ____________________________________.

• The restrictions cannot be void as against ____________________________.

o Whether the agreement meets the reasonableness test is a question of law, not a question of fact.

The appellate court will review the issue de novo.

o Virginia courts consider several factors when deciding whether an agreement is reasonable:

_________________________________ of the non-compete agreement

• The non-compete restraint cannot last forever. • Virginia courts have upheld non-compete agreements lasting as long as five years. • The period generally runs from the time the employee first leaves the employer.

o The Supreme Court of Virginia has held that in some cases the period can run from the time the court first upholds the covenant.

The ______________________________________ scope has to be reasonable. The scope or type of _____________________________ covered by the agreement

• Virginia takes an “all-or-nothing” approach to enforcing these agreements by injunction.

o Either the entire agreement is valid and enforceable, or it is entirely unenforceable.

• Any injunction under a non-compete agreement will be a ____________________________________________ injunction, not a mandatory injunction.

• If the former employer is in _____________________________________ of the employment contract, the former employee may be excused from the non-compete agreement.

Example 33: If ABC breached its contract with me by withholding my sales commission that were due to me under the contract, the court may excuse me from the non-compete agreement.

• Virginia courts tend to be more tolerant of non-compete agreements in the context of the ____________________________ of a business.

o If a business owner sells her business, the buyer likely will want a non-compete agreement from the seller.

B. Trade Secrets

• Virginia has adopted the Uniform Trade Secrets Act.


o Provides for several remedies, including injunctions o A trade secret is any information, including any formula, pattern, compilation, program,

device, method, technique, or process, that meets two requirements:

The information must derive independent economic value from not being __________________________________________________; and

The information must be the subject of ______________________________ efforts to maintain its secrecy.

Example 34: A cola maker's recipe for its cola would be a trade secret. A computer software maker's code would also be a trade secret.

The information does not need to be patented or copyrighted in order for it to be a trade secret.

o Specifically authorizes courts to enjoin the actual or _____________________________________________ misappropriation of trade secrets

Example 35: I have been working at ABC as an engineer and have acquired valuable trade secrets of the company. Now, I am going to work for a competitor, MNO. ABC may be concerned that I will reveal trade secrets once I am working for MNO. If ABC knows that I have actually divulged trade secrets to MNO, ABC can seek an injunction against the use of those trade secrets. Additionally, ABC can seek an injunction against my threatened disclosure of trade secrets.

• Virginia does not follow the “inevitable disclosure” rule.

o The inevitable disclosure rule says that a court may grant an injunction if the individual's disclosure of trade secrets hasn't actually happened and hasn't even been threatened but is inevitable because the individual is working at a competitor.

o In Virginia, the plaintiff must show that the disclosure is at least ___________________________________________ before the court will issue an injunction.

• The court can issue either a prohibitory or mandatory injunction.

C. Right of Publicity

• Every person has the right to ______________________________________ the use of her name, portrait, or picture for advertising or other trade purposes.

• The unauthorized use of a person's name, portrait, or picture for advertising or other trade purposes can be enjoined.

Example 36: If I want to use your name, portrait, or picture for advertising or to promote my product for my company, I need to get your written consent. If I don't, you can get a prohibitory injunction to stop me.


• The Virginia code states that this right continues for ______ years after the individual's death.

CHAPTER 5: SPECIFIC PERFORMANCE OF CONTRACTS

A. In General

• Remedy for breach of contract • Specific performance is an order made under the court's equity powers that the defendant

____________________________________ under the contract as the defendant promised. • Specific performance is a type of injunction. • Generally advantageous to the plaintiff—values performance more than damages • Enforced directly by the court using its contempt powers • In this context, courts tend to stand firm on the cardinal requirement for equitable relief—the

plaintiff must not have a ________________ and ___________________________ remedy at law.

• The plaintiff in any contract action has a choice whether or not to ask for specific performance.

o The baseline right in a contract action is damages.

Example 37: You and I have a contract under which I am supposed to sell you my collection of rare coins. I change my mind and I refuse to sell the coins to you. If you sue me and win on a breach of contract, you are entitled as a matter of right to damages. You can ask the court instead to order specific performance. Once you decide to ask for specific performance, the court may grant you specific performance. If it does grant specific performance, the court will order me to sell you the coin collection. If it does not grant specific performance, you will get damages for the breach.

B. Requirements

• Five requirements:

o A _____________________________________ between the plaintiff and the defendant; o All of the _________________________________ required under the contract for the

defendant’s performance have been fulfilled; o The plaintiff must have already performed under the contract, be willing and able to

perform, or the plaintiff’s non-performance is excused; o The plaintiff must not have a full and adequate legal remedy; and o Enforcement of the contract must be both _________________________ and

___________________________________.

1. A valid contract between plaintiff and defendant

o A valid contract requires offer, acceptance, and consideration.


o Virginia courts generally require that the promise for which specific performance is sought be _____________________________________________ and __________________________________.

It is hard to order specific performance of a vague obligation.

Example 38: I have a valuable coin collection, and you want to buy it from me. I don't want to sell you all my coins, and you don't want to buy all my coins. We agree to a contract, complete with offer, acceptance, and consideration. The contract says you will pay me $1,000,000 for a selection of my coins that have a fair market value of $1,000,000. The contract says that the precise coins that I will sell to you will be determined by further discussion and arrangement of the parties. If we can't reach agreement on which coins I will sell you, you will keep the $1,000,000, and I will keep my coins. This is not a definite or certain promise made by me to you. It is indefinite, vague, and uncertain. The court will not order specific performance because the promise is not capable of specific performance.

If our contract specified the coins to be sold, you would have a much better chance of getting specific performance. In that case, the court would tell me to hand over the coins specified in the contract.

2. All the conditions required under the contract for the defendant's performance must be fulfilled.

The plaintiff cannot get specific performance if there are still _____________________________________ conditions on the defendant's performance.

Example 39: Same facts as above. I agree to sell you $1,000,000 worth of coins, and our contract specifies which coins I will sell to you. The contract also says that the sale and delivery of the coins is contingent on the coins being evaluated and appraised by a third-party appraiser. While you and I are waiting for the third-party appraiser to give us the report, you get impatient and sue me, asking the court for specific performance. The court will not award specific performance because the sale is contingent on an appraisal by a third party and that has not happened yet.

3. Performance

o The plaintiff must have already performed under the contract; o The plaintiff must be able and willing to perform under the contract; or o The plaintiff's non-performance under the contract must be excused.

Example 40: We have agreed that I will sell you $1,000,000 worth of coins, but the contract says that you need to put the $1,000,000 into an escrow account 24 hours before I deliver the coins to you. You haven't put the money into the escrow account, but you sue me anyway asking the court to order specific


performance. The court will not order me to perform when you haven't performed.

Example 41: Same facts as above. You haven't deposited the $1,000,000 in escrow, and I sue you asking the court for specific performance. The court asks me whether I have performed yet by delivering the coins. I have not, but the contract specifies escrow first, then delivery. I am willing and able to make delivery as soon as the money is put into escrow. I have met this requirement for specific performance.

o Virginia no longer recognizes the doctrine of mutuality of ___________________________.

This is a rule that says a plaintiff who has performed under the contract cannot get specific performance against the defendant for the defendant's breach of the contract unless the defendant would have been able to get specific performance against the plaintiff for the plaintiff's breach of the contract.

4. The plaintiff must not have a full and adequate legal remedy.

o Key consideration for specific performance

If damages or another legal remedy provides a ___________________________ and _______________________________________________ remedy for the plaintiff, the court will not grant specific performance.

o Contract contains a liquidated damages clause:

Even if the contract has a liquidated damages clause, the plaintiff can still seek specific performance unless the contract specifies that liquidated damages are to be the __________________________________ remedy under the contract.

o Plaintiff is seeking both specific performance and damages:

Courts sometimes grant both specific performance and damages as a remedy on a contract action.

5. Enforcement of the contract must be both fair and feasible.

o Specific factors Virginia courts look to when deciding whether enforcement would be fair:

If the plaintiff has engaged in sharp dealings or practices, the court may decline to order specific performance.

Example 42: You press the contract for the sale of my coin collection on me while I was in the hospital, distracted by my bad health. The court may tell you that because of your conduct, you will not get specific performance.

The defendant labored under some __________________________________. Performance under the contract would impose a

_______________________________________________ on the defendant.


Inadequate consideration

Example 43: You and I contracted for me to sell you my coin collection for $1,000,000, and after we get the appraisal back, it turns out that my coin collection is worth $50,000,000. The inadequacy of consideration may stand in the way of you getting specific performance when I decide not to sell you the coins.

o The courts also consider __________________________________________ of enforcement.

If supervising the defendant's performance will be difficult, burdensome, or impractical, the court generally will not order specific performance.

C. Specific Performance of Land Sale Contracts

Example 44: I have agreed to sell 100 acres of land to you in fee simple absolute, and you have agreed to purchase the 100 acres of land from me. When it comes time to perform, I breach. You sue and seek specific performance. Because this is a contract for the sale of land, the court is likely to grant specific performance.

• The courts have long said because that each parcel of land is ___________________________, and therefore damages do not provide a full and adequate remedy.

• If the seller cannot convey the land as contracted (e.g., does not have the full amount of acres promised), the buyer can seek both specific performance and an _______________________________________________ of the purchase price.

• If the buyer breaches, the seller can also be entitled to specific performance, ordering the buyer to pay the purchase price.

D. Contract for the Sale of Goods

• General rule: Neither the buyer nor the seller can get specific performance on a contract for the sale of goods.

Example 45: I have agreed to sell you 10 million paper clips for you to use in your business, and I breach. Your only remedy is ________________________________________________.

• Two exceptions to this rule:

o Specific performance is available if the goods are __________________________________.

Example 46: If the contract is a contract to sell a work of art, my rare coins, or a rare diamond, the court will treat it like a land sale and order specific performance.

o Specific performance is available if the goods are otherwise ____________________________________________ to the buyer.


Example 47: I have a monopoly on the sale of paperclips and you can't get them anywhere else but you need them in your business. You may be able to get specific performance.

E. Contract for the Sale of Stock in a Corporation

• If the stock is stock in a publicly-traded corporation, the courts generally will not order specific performance.

• If the stock is stock in a private corporation that is not publicly traded, the courts may grant specific performance.

F. Contracts for Personal Services

• Generally, not subject to specific performance

Example 48: A rising baseball star contracts to play center field for a particular baseball team and then changes his mind. The team cannot get specific performance ordering him to play. The team should be able to get a prohibitory injunction to prevent him from playing for another team while he is under contract.

• A promise to employ someone to render personal services generally is not subject to specific performance.

o If someone is wrongfully terminated under a personal services contract, the remedy is typically damages and not specific performance.

Example 49: Same facts as above. If the team wrongfully fires the center fielder, he will not be able to get specific performance forcing the team to put him back on the roster.

G. Contract to Make a Will

Example 50: You and I enter into a contract under which I agree to write a will leaving you my 300-acre farm in central Virginia. You cannot get specific performance on this contract while I am alive. A will is always revocable. You also cannot get specific performance on this contract after I have died. A court cannot order a dead man to make a will. If I die and I devise that 300-acre farm to someone else, you may be able to get the court to impose a constructive trust on the land and then order that the land be transferred to you.

H. Support Obligations

• Specific performance is available.

Example 51: If mom and dad divorce and dad agrees to pay child support to mom for the benefit of the children, mom can get specific performance on that promise.


I. Computer Information Transactions

• Virginia has adopted the Uniform Computer Information Transactions Act.

o A court may order specific performance in a computer-information transaction.

• A computer information transaction is an agreement or the performance of an agreement to create, modify, ______________________________________, or to license computer information or information rights.

• Specific performance may be ordered if:

o The ______________________________________ provides for specific performance; o The contract is not for personal services, and the agreed performance is unique; OR o In other proper circumstances.

• Any order for specific performance in a computer information transaction must provide adequate ___________________________________________________ to protect the confidentiality of information and the informational rights of the parties.

CHAPTER 6: EQUITABLE CONVERSION AND REFORMATION, RESCISSION, AND CANCELLATION

A. Equitable Conversion

1. In General

o Equitable conversion is a doctrine most commonly seen in sales of real property. o Under the doctrine:

The buyer becomes the _________________________________________ owner of the land once the buyer and the seller have signed a binding contract for the sale of the land.

The seller continues to hold legal ________________________________ to the land until the seller grants the deed to the buyer.

o Closely tied to specific performance

The buyer, who holds an equitable interest in the land, can seek specific performance against the seller.

o The usual considerations about fairness apply.

The courts will not apply equitable conversion if enforcement of the contract would not implement the party's intentions, if there was ______________________________ or misrepresentation in making the contract, or enforcement would produce an inequitable outcome.


2. Rights and Obligations of Buyer and Seller

o Both the buyer and the seller have an equitable ______________________________ against the property that is the subject of the contract.

The buyer has a vendee's lien to ensure performance by the seller. The seller has a vendor's lien to ensure performance by the buyer.

o The buyer can seek the equitable remedy of specific performance in the event of the seller's breach.

Example 52: I agree to sell you 100 acres of farmland in central Virginia. We sign a contract free of misrepresentation or fraud, and then I breach. On the day we set for closing, I tell you I found another buyer willing to pay more and I am not going to transfer title to you. I tell you I'll refund the purchase price you have already paid to me with interest, but that is not good enough for you because you want the 100 acres. You sue me and invoke the doctrine of equitable conversion, and you demand specific performance. You will win that lawsuit, and the court will order me to transfer title to the 100 acres of land to you.

o Because the buyer has become the equitable owner of the property, the seller's creditors can no longer look to the land to satisfy any claims that they may have against the seller.

The creditors can only look to the ______________________________________ price.

Example 53: On January 1, I cause a car accident, leaving the tort victim with medical bills and property damage. On June 1, you and I enter into a contract for the sale of the 100 acres, with closing set for August 1. On July 1, my tort victim obtains a judgment against me for her medical bills and property damage. The tort victim cannot look to the land to satisfy the judgment against me, but can look to the purchase price.

o The buyer, as equitable owner, bears the _________________________________ to the property during this time.

Example 54: We sign our contract on June 1, with closing set for August 1. On June 15, the farm house burns down. I call you up and tell you about the fire. The buyer will still have to pay the full purchase price for the land and the farmhouse unless the loss or harm to the property is the seller's fault.

o The buyer, as equitable owner, also has the burden of _____________________________________________________ the property.

The seller is not obligated to keep insurance on the property once the buyer has become the equitable owner, unless the contract specifies otherwise.


If the seller does keep insurance on the property and there is damage or destruction to the property, the seller must ______________________________________ the purchase price by the amount of any insurance proceeds that the seller receives.

Example 55: We agree that I will sell you my house and the land it sits on for $300,000. The house burns down in between the signing of the contract and the closing, and the insurance company gives me a check for $140,000. You only have to pay me $160,000 at closing, otherwise I would be collecting $140,000 from the insurance company and $300,000 from you.

o Once the contract is signed, the seller's interest is treated as in interest in __________________________________________________ property at the time of the seller's death. The buyer's interest is treated as in interest in _________________________________ property at the time of the buyer's death.

Example 56: I agree to sell 100 acres of Virginia farmland to my neighbor, Buyer. I'll convey the 100 acres to Buyer, and Buyer will pay me $1,000,000. We sign the contract on June 1 with closing set for August 1. I die on July 1, devising all my real property to my son and bequeathing all my personal property to my daughter. Who gets what under my will?

Daughter is entitled to my personal property, and she has the rights to the $1,000,000 that Buyer will pay on August 1. Son is entitled to my real property, but I don't have any real property at the time of my death. I still have legal title to the 100 acres, but Buyer is now the equitable owner of the property. Son will get the legal title to the 100 acres, subject to the binding obligation to transfer title to Buyer on August 1.

If Buyer dies before the transfer of legal title, the devisee of his real property will be entitled to the 100 acres, and the legatee of his personal property will not get the $1,000,000 due to be paid on August 1.

o If the buyer or seller dies before closing, the ____________________________________________________ of either the buyer or the seller is authorized by the Virginia code to show up at closing and complete performance.

o Virginia follows the majority rule on option contracts.

Example 57: If the contract that Buyer and I make on June 1 is only an option for Buyer to buy the 100 acres, Buyer does not become the equitable owner of the land until he exercises the option.

B. Reformation, Rescission, and Cancellation

1. Definitions

o Reformation is an order by the court to modify the terms of a document that has legal effect, such as a contract or a ______________________________________.


The parties did reach an agreement, but something went wrong when the agreement was reduced to writing, such that the document does not reflect the intent of the party or parties who signed it.

Something was omitted from the contract, or something was stated ______________________________________ in the contract.

o Rescission is the “unmaking” of an oral or written contract—a revocation, abrogation, or ______________________________________ of the contract.

It winds the clock back and puts the parties in the positions they would have been in if the contract had never been made.

o Cancellation is the negation of a legal instrument, such as a deed or a mortgage or a contract for the sale of goods.

2. Grounds

a. Equitable grounds

Mistake, fraud, undue influence, duress, and lack of capacity—whether before or at the time of the execution of the document or the formation of the contract

The plaintiff must show the grounds by ______________________________________________________ evidence.

b. Failure of consideration

A party to a contract can get rescission of the contract if there is a failure of consideration.

Rescission is not available if the failure of consideration is only partial and there has been ______________________________ performance by the defendant.

c. Statutory grounds

Virginia has several statutory grounds for rescission or cancellation of a contract

• Fraudulent conveyances and gifts by insolvent donors • The buyer or the seller of goods can cancel a contract for the sale of the goods if the

other side _______________________________________.

3. Limitations

o Transfers to bona fide purchasers ______________________________________ reformation, rescission, and cancellation.

o If one party to a contract is seeking rescission of the contract, she must tender back to the other party any consideration that she received.

Exception: The party seeking rescission is not required to tender back the consideration if the basis for seeking rescission is the other party’s fraud.


CHAPTER 7: RESTITUTION AND DEFENSES IN EQUITY

A. Restitution

1. In General

o An equitable remedy under which the defendant must ______________________________________ property to the plaintiff.

o Two basic forms:

The defendant must return a particular item of property to the plaintiff; or The defendant must pay money to the plaintiff with the amount based on the value of a

particular item of property.

o The goal is to prevent the unjust enrichment of the defendant.

2. Specific Restitution

o The defendant has some item of property that belongs to the plaintiff, and the court orders the defendant to ______________________________________ that property to the plaintiff.

o Key consideration is whether permitting the defendant to keep the property would unjustly enrich the defendant.

o Unjust enrichment can occur in many ways:

A gift that involves a ________________________________ by the donor

Example 58: My grandfather tells me that he wants to give me the pocket watch that he had with him during WWII. He gives me a key to a safe deposit box at the bank, telling me I should go to the bank and take the watch and anything else that is in the safe deposit box. I got to the bank, open the safe deposit box and discover there is no pocket watch there, but my grandmother's diamonds, pearls, rubies, and sapphires are there. I take the jewels out of the box and keep them. My grandfather would have a claim of unjust enrichment against me and could ask the court to order ____________________________, forcing me to give the jewels back.

An ______________________________ of a fiduciary or confidential relationship

Example 59: I am the trustee of a trust and I convert some of the trust assets to my own possession and use. The beneficiary of the trust would claim unjust enrichment and would ask the court to order restitution so that I do not keep my ill-gotten gains.

3. Constructive Trust

o Invention of the courts to remedy some fraud or other unjust, unconscionable, or unlawful action of the defendant


o Courts use a constructive trust to prevent unjust enrichment by the defendant when the defendant is holding property that __________________________________ to the plaintiff.

o Closely tied to specific restitution—once the court imposes the constructive trust on the property, it ordinarily orders specific restitution.

Example 60: I'm your lawyer, and I abuse that relationship. I give you papers to sign, and I tell you that the papers set up a family-owned LLC, which is what you wanted me to do. In fact, the papers instead transfer title of your 100 acres of Virginia farmland to me. You discover the truth, and you sue me. The court imposes a constructive trust on the farmland. The court says that although I hold legal title to the farmland, I hold that farmland in constructive trust for you. The court orders me to make restitution.

What if in the meantime I sold the farm land to a third party who bought the land in good faith, for valuable consideration, and with no notice of my wrong doing? The court will say I hold the sale proceeds from the sale to the third party in constructive trust for you, and the court will order me to make restitution of the sale proceeds. Because I am holding the sale proceeds in constructive trust, my other creditors do not have access to the sale proceeds.

4. Equitable Lien

o A lien imposed by the court on property held by the defendant to ______________________________________ the plaintiff's claim of unjust enrichment

o The property belongs to the defendant, but the plaintiff is entitled to a ______________________________________ interest in the property.

o Has a broader scope than a constructive trust

The court can impose an equitable lien either on property held by the defendant that rightly should belong to the plaintiff, or on property belonging to the defendant that has been improved or made more ________________________________________ by the plaintiff.

Example 61: I am your attorney, and I mislead you into transferring title to your 100 acres of Virginia farmland to me. The court may impose a constructive trust on the farmland, or it may impose an equitable lien on the farmland.

Example 62: I am your contractor, and I build a new barn on your farmland, but you don't pay me. The court may impose an equitable lien on the barn to secure my claim against you, but it would not impose a ______________________________________ trust on the barn because the barn rightly belongs to you.

Example 63: I have deceived you into transferring title to your 100 acres of Virginia farmland to me. You have both possible remedies available to you. As a general matter, you will choose the equitable lien if the value of the property


has gone down, and you will choose the constructive trust if the value of the property has gone up. Let’s say the farmland was worth $250,000 when I had you sign papers transferring it to me and it is now worth $200,000. An equitable lien will give you a lien against the farmland for $200,000 and leave you free to pursue the other $50,000 from my personal assets. Let’s say instead that the farmland has increased in value from $250,000 to $300,000. It would be smart to pursue a constructive trust, as it will lead to you getting back the farmland, which has increased in value to $300,000.

5. Subrogation

o The _______________________________________________ of the legal rights of one person by reason of another person's payment of the first person's obligation.

Example 64: I negligently cause a car accident, injuring my neighbor, Ned. Ned has $25,000 in medical bills. Ned’s insurance company covers his medical bills, paying $25,000 to his doctors. Ned then sues me for negligence, and he recovers a judgment of $25,000 from me for his medical expenses. If Ned keeps the $25,000 he receives from me, he will be unjustly enriched. The remedy of subrogation allows the insurance company to assume Ned’s rights against me. In effect, the insurance company steps into Ned’s shoes.

o Very common in the context of insurance

The Virginia code specifically recognizes the subrogation rights of an insurance company that has paid the expenses of the insured.

6. Equitable Accounting

o A remedy imposed against the defendant, usually a fiduciary, to restore _____________________________ that would otherwise unjustly enrich the defendant.

Example 65: I am the trustee of a trust that your great-grandparents set up for your benefit. At some point, I cause the trust to hire my law partner to do some legal work. The trust pays legal fees to my firm, and I share in those fees. You, the beneficiary of the trust, may sue and demand an equitable accounting. If the court orders an equitable accounting, the court will figure out the amount that I have unjustly enriched myself and order me to pay that amount over to you.

o Virginia statutory law provides for equitable accounting in the case of joint tenancies and tenancies in common.

o Virginia common law recognizes equitable accounting in a principal-agent relationship and among partners in a partnership.


7. Receivership

o By statute, a court may appoint a _____________________________________ to exercise control over the defendant's property in order to protect the plaintiff's interest in the defendant's property.

o The general receiver is not an agent for either the plaintiff or the defendant.

Stands as a third-party neutral between the plaintiff and the defendant and acts under the ______________________________________ of the court

B. Equitable Defenses

1. Laches

o An unreasonable ___________________________________ by the plaintiff in bringing a claim that either works to the prejudice of the defendant or implies that the plaintiff has waived the claim

Example 66: If the plaintiff has a cause of action on a contract that potentially would provide a basis for specific performance, a delay by the plaintiff in bringing suit might prejudice the defendant through the loss of evidence over time or through a material change in the defendant's position.

o Laches versus statute of limitations

A statute of limitations provides a hard and fast rule for when the plaintiff's claim expires.

Laches applies in the absence of a statute of limitations and the standard under laches is _____________________________________________________.

o A legal disability on the plaintiff will excuse the plaintiff's delay in bringing suit.

A plaintiff who is a child or incompetent cannot be blamed for not bringing suit right away.

If the plaintiff has a guardian or other _________________________________ who can bring suit on behalf of the plaintiff, then laches will apply in the usual way.

o Does not apply against the Commonwealth of Virginia or against local governments within the Commonwealth as to governmental functions

2. Unclean Hands

o The plaintiff must not have done anything wrong with respect to the specific rights in the specific ___________________________________ that gives rise to the plaintiff's claim.

Example 67: My neighbor Ned and I sign a contract for me to sell my land to him. He later asserts that I acted fraudulently, and he seeks an equitable remedy, such as rescission or an injunction. If I can show he also made


misrepresentations in the contract, I will have shown he has unclean hands and his unclean hands may prevent him from getting equitable relief.

o The plaintiff's bad conduct must not only relate to the specific rights and the specific transaction, it must also have operated to the _________________________________ of the defendant.

3. Balancing the Hardships/Equities

If the defendant can show that granting the equitable relief demanded by the plaintiff will cause the defendant more _____________________ than not granting the relief would cause to the plaintiff, the court may decide not to grant the relief.

4. Acquiescence

If the defendant can show that the plaintiff has _________________________________________________ in the defendant's conduct, the court may deny equitable relief.

5. Equitable Estoppel

o The plaintiff's representations have induced ______________________________ by the defendant and have caused the defendant to change his position to his ______________________________________________.

Example 68: My land and the land of my neighbor Ned are bound by an equitable servitude that neither plot of land will be used for commercial purposes. At some point Ned comes to me and says he is thinking of opening up a small retail store on his land and asks if I mind. I tell him to go ahead. Eighteen months later, he has spent several hundred thousand dollars on plans, permits, and construction, and I sue asking the court for an injunction to enforce the equitable servitude on the land. He will raise the defense of equitable estoppel and will tell the court I told him I didn't care about the servitude and that he relied on my statement to his detriment.

o The four elements a party needs to show by clear and convincing evidence to establish equitable estoppel are:

A representation by the party against whom equitable estoppel is asserted; __________________________________________________ on the representation by

the party who is now asserting equitable estoppel; A change in position by the party asserting equitable estoppel; and _____________________________________________________ by the party asserting

equitable estoppel.


CHAPTER 8: REVIEW

A. General Points on Equitable Remedies

• There are five remedies traditionally associated with equity:

o Injunctions o Specific performance o Reformation o Rescission o Restitution

• Establishing equity jurisdiction in Virginia is no different from establishing legal jurisdiction in Virginia.

o Any civil action seeking legal remedies, equitable remedies, or both can be brought as a single action in a single Virginia court.

• Equitable remedies are enforced directly by the court and are backed up by the ________________________ power of the court.

o Contempt proceedings can be either civil or criminal.

• The cardinal requirement for obtaining an equitable remedy is that the legal remedies available to the plaintiff do not provide a ______________________________________ remedy.

• The decision to grant equitable relief always rests with the sound discretion of the court. • Generally not granted in contracts for personal services or to protect personal rights as opposed

to property rights

B. Injunctions

• A mandatory injunction is a court order that enjoins a defendant to do a specified act. • A prohibitory injunction is a court order that enjoins a defendant ______________________ a

specified act. • A temporary injunction lasts for a limited period of time, specified in the injunction itself. • A permanent injunction is of _______________________________ duration. • In order to get a temporary injunction, the plaintiff must show:

o The plaintiff does not have an adequate remedy at law; o The plaintiff is likely to succeed on the merits; o Without the injunction, the plaintiff is likely to suffer

_________________________________ harm; o The balance of the equities tips in the plaintiff’s favor, and o The temporary injunction is in the public interest.

• A permanent injunction always requires notice to the defendant and a full hearing on the merits.


• For either a temporary or permanent injunction, the court may require a bond from the plaintiff or defendant.

C. Injunctions in Specific Circumstances

• Injunctions against legal proceedings

o The courts are very reluctant to enjoin legal proceedings, particularly criminal proceedings. o There are exceptions for multiple prosecutions, vexatious and harassing criminal or civil

actions, and for the enforcement of civil judgments that have been obtained through a fraud on the court or a fraud on the judicial process.

• Injunctions to protect real interests in property

o Courts often issue injunctions against ______________________________, private and public nuisance, and continuous or repeated trespass.

o Court will usually issue injunctions against intentional, bad faith encroachments, but not against unintentional, good faith encroachments.

o Courts will use both prohibitory and mandatory injunctions to enforce easements and real covenants.

o Courts will generally not issue an injunction to a plaintiff who is trying to establish title or recover possession of real property.

• Injunctions to protect business interests

o Non-compete agreements are generally ______________________________ in Virginia, especially in the employer-employee context.

Non-compete agreements will be enforced with an injunction if the agreement is reasonable from the prospective of the employer, reasonable from the prospective of the employee, and reasonable from the perspective of society.

The factors considered by the court in determining whether a non-compete agreement is reasonable include:

• The _____________________________________ of the agreement; • The geographic scope of the agreement; and • The type of _____________________________ covered by the agreement.

o Virginia has adopted the Uniform Trade Secrets Act.

It specifically authorizes injunctions for the actual or threatened misappropriation of trade secrets.

o Virginia statutory law allows any person to get an injunction against the unauthorized use of her name, portrait, or picture for advertising or other trade purposes.

D. Specific Performance

• Equitable remedy associated with contracts


• An order made under the court's equity powers that the defendant perform under the contract as the defendant has promised

• Requirements:

o A _______________________________ contract; o All the conditions for the defendant's performance have been fulfilled; o The plaintiff must have performed, be able and willing to perform, or non-performance

under the contract is excused; o Plaintiff does not have a full and adequate remedy at law; and o Enforcement of the contract is both ____________________________________.

• Specific performance is generally available for:

o Land sale contracts o Contracts to sell unique or otherwise unavailable goods o Contracts to sell stock in non-public corporations o Spousal or child support o Computer information transactions

• Specific performance is not available for:

o The sale of non-unique or generally available goods o ______________________________________ contracts o Contracts to make wills

E. Equitable Conversion, Reformation, Rescission, and Cancellation

• Equitable conversion is a doctrine treating the buyer as the _________________________________________ of property between the time the parties sign the binding contract for the sale of the property and the time when title actually passes from the seller to the buyer.

o The buyer has a lien on the property and can seek specific performance. o The seller's creditors cannot look to the property. o The risk of loss falls on the buyer. o The seller is not obligated to insure the property unless the agreement specifies. o In the event that one or both parties die, the buyer is treated as having the property itself in

his estate, and the seller is treated as having the sales proceeds in her estate.

• Reformation is an equitable remedy under which the court modifies a contract or other document to conform to the _____________________________ of the parties.

• Rescission is an equitable remedy under which a court unwinds a contract or property transfer, putting the parties in the position they would have been had the contract never been made.

• Cancellation is the negation of a legal instrument, such as a deed or a mortgage or a contract for the sale of goods.


• The equitable grounds for reformation, rescission, and cancellation are mistake, fraud, undue influence, _____________________________, and lack of capacity.

• Rescission of a contract can also be obtained upon a failure of ________________________________.

• The statutory grounds for rescission or cancellation of a contract include fraudulent conveyances, gifts by insolvent donors, and breach by either party in a contract for the sale of goods

F. Restitution and Defenses in Equity

• Restitution is an equitable remedy under which the court orders the defendant to return property money to the plaintiff.

o The key objective is to prevent the defendant's unjust enrichment. o Specific restitution requires the return of a specific _________________ of property. o Related equitable doctrines include constructive trust, equitable lien, subrogation, equitable

accounting, and the appointment of a general receiver.

• Five defenses to equitable remedies:

o Laches: an unreasonable ______________________________ by the plaintiff in bringing suit, when that delay operates to the prejudice of the defendant or implies waiver by the plaintiff.

o _____________________________________: wrongdoing by the plaintiff with respect to the rights and the transaction involved in the lawsuit.

o Balancing the hardship that granting relief would impose on the defendant against the hardship that not granting equitable relief would impose on the plaintiff.

o Acquiescence by the plaintiff in the defendant's conduct o Equitable estoppel resulting from a representation by the plaintiff on which the defendant

relies to his detriment.

BEST OF LUCK!

[END OF HANDOUT]

va.h.doran.equity w20 blanks 10.15 - amazon...

Documents