EQUITY

Covers 95% of Equity Material Tested

First / Threshold Question: Is this in the right court? Should it be in the Court of Chancery or
in Superior Court?
1. Chancerys Equitable Jurisdiction (Q: Is this case properly heard in the Court of
Chancery?)
a. Threshold Issue re: Equitable Jurisdiction: Is there a remedy at law adequate?
i. If so, case does not belong in chancery; probably belongs in Superior
Court
b. Chancery JX grant & limitation (by statute):
i. Section 341 GRANT: The court of chancery shall have jurisdiction to hear
and determine all matters and causes in equity
ii. Section 342 LIMITATION: Court of Chancery shall not have jurisdiction
to determine any matter wherein sufficient remedy may be had by common
law or statute before any other court of this state
Next Question: Should the Court of Chancery issue the equitable remedy P seeks? Is there any
reason to deny the equitable relief sought?
2. Equitable Relief
a. No Right to Equitable Relief:
i. Unlike legal remedies, which issue as a matter of right, the P has no
absolute right to equitable relief.
ii. Decision to issue an equitable remedy lies in the sole discretion of the
Court of Chancery (in the Chancellors or Masters)
b. Equitable Defenses (i.e. the reasons the court will use to deny equitable relief):
1. Latches
2. Unclean Hands
3. Balance of Hardship
4. Ripeness
5. Mootness
6. Impracticality
7. Specificity
8. Equitable Estoppel
9. Waiver
10. Acquiescence
11. Ratification
12. Unconscionability
Next Question: Does the P have a proper case for equitable relief (i.e. is P seeking a form of
equitable relief)?
3. Forms of Equitable Relief
a. Injunctions: (MOST TESTED)
i. Definition: An extraordinary equitable remedy that operates in personam
to enforce personal and property rights and prevent future injury.
ii. Injunctive relief is appropriate only to prevent harm that is imminent,
unspeculative, and genuine
iii. Two Classifications of Injunctions:
1. Mandatory Injunction: [very rare]
a. Compels D to perform a specific act (e.g. D is ordered to
remove boulders he put on Ps land)
b. Will often see with real estate cases, since real estate is
unique
c. Note to know: No right to strike for public employees
2. Prohibitory Injunction: (Most likely to see)
a. Directs D not to do a specific act (e.g. D is enjoined from
trespassing upon Ps land)
b. Traditionally awarded more liberally than mandatory
injunctions
iv. Three Types of Injunctions:
1. Temporary Restraining Order (TRO)
a. Definition: Operates to prevent irreparable injury and to
preserve the status quo pending a hearing on an application
for a preliminary injunction.
b. To prevail, P must establish 3 elements:
i. There is an imminent threat of irreparable injury to
Ps interests in the absence of such relief
1. ** Chancery rules require P to file an
affidavit or verified complaint evidencing
such injury **
2. Generally issued on a limited record
ii. There exists a reasonable probability that P will
succeed on the merits of its complaint at trial
iii. The balance of hardships arising from the issuance
of the TRO tips in Ps favor on the record presented
c. TRO issued for a limited period (generally 10 days or
less) and may be issued w/o notice to D (i.e. issued ex
parte); P must post a security bond
2. Preliminary Injunction (PI):
a. Purpose: preserve the status quo pending a final
determination on the merits.
b. Unlike a TRO, the Preliminary Injunction requires that
D be given notice of Ps application
c. Stays in effect until the trial is resolved; P must post a
bond
d. Is usually considered on a paper record
e. A preliminary injunction is considered an
extraordinary remedy and will be denied where the
remedy sought is excessive in relation to the injury or
unnecessary to prevent the injury threatened.
f. 3 Elements P Must Prove:
i. Reasonable probability of success on the merits
1. ** This first element receives greater
weight for the PI than the TRO; this is
what distinguishes their tests **
ii. Immediate threat of irreparable harm in the absence
of an injunction
iii. Balance of hardships tips in plaintiffs favor
1. (I.e. harm plaintiff will suffer if relief is
denied outweighs harm defendant will suffer
if the relief is granted)
3. Permanent Injunction:
a. Moving party must prove:
i. Actual success on the merits
1. (Note: Permanent injunctions only issue
after a final determination on the merits)
ii. Irreparable harm
iii. Harm resulting from failure to issue an injunction
outweighs the harm befalling the opposing party if
the injunction is issued
b. Not truly permanent b/c can always seek relief from it
later (e.g. if changed circumstances, etc.)
b. Additional Equitable Remedies:
i. Specific Performance: extraordinary remedy
1. Only available if the terms of the contract are definite and money
damages are a poor substitute for performance; often used with real
estate
ii. Equitable Conversion:
1. Rule that equity regards what ultimately must be done as having
been done
a. Note: There are no SOL for equity cases
iii. Rescission: cancellation of unmaking of an agreement and attempts to
return the parties to the status quo
1. RECENT MBE Q: 40% to 50% unconscionable rates
iv. Reformation: designed to change the written agreement to reflect the true
intent of the parties or to correct a scriveners error
v. Restitution: requires D to pay over to P a sum of money which D has
acquired under circumstances which might have been deemed unjust
enrichment or a windfall
vi. Contempt: Parties who fail to obey the Court of Chancerys orders may
be found in contempt of the Court and fined $100 or get 170 days in jail.
c. Other Chancery Actions:
i. Accounting
ii. Guardianship
iii. Partition
Next Question: If properly in Chancery, what court procedure rules have to be followed?
4. Court Procedure: Rules of the Court of Chancery
a. Must have a Verified Complaint
b. Must have proper service on an organization you must serve the summons and
complaint to the corporations registered agent (i.e. cant serve the guy cutting the
grass) or personally serve any officer or director of the corporation
c. Times New Roman 14 point; they will reject it if it doesnt follow the rule
d. Note: There are no juries in the Court of Chancery.
NOTE: Superior court:
e. Handles 95% of the civil cases with significant amounts in controversy
INJUNCTION GAME PLAN:
1. Injunctive Relief for Tortious Conduct:
a. Identify the Tort:
1. NOTE: Fact pattern may try to emotionally justify conduct, ignore
that
ii. Possibly:
1. Waste of Real property:
a. Voluntary, Permissive, or Ameliorative
2. Trespass
a. Could be:
i. Entry or causing another object to enter land
ii. Remaining on the land after permission to enter has
expired
iii. Failing to remove an object from the land of another
where there is a duty to do so
3. Nuisance:****
a. Public: unreasonable interference with a right common
to all members of public
b. Private: Private nuisance is the unreasonable
interference with the use and enjoyment of the land
4. Injuries to Personal Rights:
a. Defamation
b. Right to Privacy
5. Injuries to Economic Interests
a. Trade Libel
b. Inducing Breach of Contract
c. Refusal to Deal
d. Misrepresentation of Trade Secrets
e. Trademark and Name Infringement
b. Is there a protectable interest?
c. Is the legal remedy inadequate?
d. Are the hardships balanced?
i. Hardship may not be balanced where the defendants conduct was criminal
or violated an important public policy
e. Does the defendant have any defenses to Equity?
f. Is Enforcement feasible?
Outline in the Answer, graders will award points for outlined answers not filled in
Exams tend to ask about service in conjunction with injunctions
Should list long arm as 3114