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LGST 101 Lecture 3

O the bank could take the house which over time may

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o The bank could take the house, which over time may have appreciated a lot in value o Under traditional contract law, the bank could sell the house and keep the money o Your answer at law is therefore questionable o So people went to equity The bank gets hundreds of thousands of dollars, which it shouldn’t get Equity courts agree o Under equity of redemption, bank can’t get more than the money you owed plus interest plus expenses – not the sale of the house, which goes to you Equity is a very powerful court It solves problems where the answer at law is inadequate Judge can follow maxims of equity
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Equity cases are more informal – no jury o Judge follows maxims Equity will not allow a wrong to go without an answer Delay defeats equity o Equity is very fast o Must go to equity within days, and judge will hear argument and hand down decision within days Law takes much longer Clean hands doctorate o Must have clean hands to sue in equity o You can’t have had a hand in the problem Fundamentally, equity is quick and dirty law – it fills in where law does not To sue for equity, you go to the same courthouse, the same judge, and the judge will decide whether it should be a case in law or equity Presumption is that you will sue in law o The answer in law is almost always money o And in most issues, money is an adequate answer This presumption is rebuttable – if you want to go to equity, you need to justify and explain that going to law is inadequate o Must explain why answer at law is unreasonable or unfair o Then judge will decide which court Primarily two equity cases (though there are many equitable answers that come out of cases) Specific performance – do what you promised to do o Suppose you offer something to someone for 8,000 and you both agree to the deal Then, someone else offers to pay you 10,000 and you agree to that The first guy will sue o In the above case, and in any contract of sale in law, the first guy will need to get the good from somewhere else; if it is more expensive than the price you offered, then you sue for the difference in price plus any expenses In the answer at law, receiving money is fine – that’s an acceptable outcome (as explained above) o But if the item is rare, and you can’t get the good in the market, then you go to equity Argue that the item is very rare, and that the answer at law of money is inadequate because you want the good, not the money, and you can’t get the good in the marketplace Sell the good as you promised
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o Court then issues a writ of specific performance, which requires that you do what you promised to do Injunction – stop doing what you’re doing o Example: store whose employees go on strike You are not only losing money, but also customers (patronage) Must show that money is inadequate (that you are also losing customers), and so you want to go to court of equity o Complete opposite of specific performance If you ignore either the writ of specific performance or the injunction, you go to jail for contempt of court Equity requires quick answer and prompt response, and so is very powerful Thus, equity solves problems, especially where the law cannot help (fills in holes of law) In equity, you must show loss that occurs on top of money All this happens quickly
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o The bank could take the house which over time may have...

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