contracts: april 8 2010 class notes.

compensatory damages recap.

lost sale doctrine.
locks v. wade
jukebox case - renter argues that the jukebox is rented to someone else and so the lessor has mitigated loss and damages are 0. the owner says hell no -- we had additional capacity, we lost these sales. the fact we had other sales is irrelevant (we were gonna hav eother sales anyways). the lessor sale view prevails.

so maybe land is different... 
you have an apt you want to lease to someone, but then you are able to lease to someone else.
but sharfman thinks that that's not always the case (hotel room example: you can rent the hotel to someone else, even though the other hotel rooms may be empty...)

the principle is not between chattel and real property but whether it's excess capacity for the non-breaching party. the fact that there were other sales is immaterial and can't be counted as mitigation towards the breach.

employment. 
if i get another job elsewhere later, does my new job mitigate damages owed by first employer? maybe.
it's not apples to apples though -- if one job is better/worse than another, that will be taken into consideration in offsetting the wages from context to context.

unemployment benefits cannot count in mitigation (collateral source rule, i received some income from a collateral source not my employer). the collateral source cannot be used to mitigate.

if you are able bodied, but just lazy and you didn't accept another job, can the fact that you could have worked be mitigation? in principle, yes - but employement is a complex topic and so the application will be different. in child support cases, the court will apply damages owed against the party who is unemployed but able bodied/ should be working.

the 666 building case.
able landlord, and tenant breaches. the landlord is paranoid and is covered anyway. but is the landlord also hyper-aggressive in that he wants to recover the insurance cost from the tenant? the tenant is only liable for the priium.
hypo: what if L bought insurance anyawy? T could prob argue unjust enrich if he had paid (this only works if the L doesn't know about the T lack of insurance). purchase of insurance can be a mitiagtion technique.

reliance. 
wood for burbon barrels -- did the buyer have a duty to mitigate prior to the date of performance? because the seller could have performed, even though it had announced to the buyer that it would have ot breach. the buyer could have remedied then and bought the wood subsequently. here, the court said that the buyer had no oblig to mitigate prior to time of performance.

in the instance of inefficient performance.
rivers v. dean.
defendant agreed to build the addition onto the P's house. the addition was unusable. what should the damages be?
X -- current value
X+Y -- promised value
Z -- cost of repair
Z> Y
know the comparison to jacob v. kent (you're not entitled to
in this case, the owner of the home has an addition that is not usable - the breach is material and the breacher is not innocent, so the court is not worried about inefficient performance.

peewee house v. cole
the cost of restoration would be Z. the difference in market value is Y. the jury gives a number between Y and Z. and on appeal, the lower figure is awarded (the Y figure) which leaves the peewees with an unrestored farmhouse and stuck in the pits remedy-wise. this case is hard to reconcile with rivers. sharfman thinks it is a bad result.

shackman.
again, Z>Y
the contractors didn't do grating that needed to be done. that is worth 90K (Z) the diminution is Y. the court awards the larger figure to the plaintiff.... sharfman thinks the award differnces relates to different jurisdictions.


hadley v. baxendale

hydraform

bohac... why is this in our book? because the statute uses the term "consequential 

acquista v. new york life insurance
what extra harm does the bad faith do?
insurer is crossing the line from bad faith to tort

boise v. clark
see the notes, which discuss constitutional limits to punitive damages as well
are punitive damages available for breach of contract? -- yes
in idaho: they are available if
1. deceitful/ fraudulent
2. material omission
tortious conduct, but still must bear a relationship to the award (see BMW v. gore, where the actual damage was like $200 but the punitive was like $10M)

laclede
there is an inadequate remedy at law, instead requires more of a remedy at equity perhaps. 
restatement - special interests, though the general rule is that it is hard to grant this kind of remedy. the 8th cir grants specific performance on the contract.
when can you get specific performance?

see p. 1031 problems.
personal services contracts is a general matter where you can't force people to give their services as equitable remedy.

specific performance concerning land...
walgreens v. sara creek 
this is one of posner's favorite cases, and one that distinguishes his law and economics theoretical interpretations

you're only entitled an equitable remedy when there's an inadequate remedy at law.
the doctrine: the number is very speculative when trying to figure out how to calculate 10 year profit loss.
1. harm to the movant
2. harm to non movant
3. efficency arguments

posner's efficiency arguments: he argues efficiency, social costs, and that a

notes following walgreens: courts granting specific performance for a site that hasn't been built yet, but the courts are quick to say that they won't always force someone to build something that hasn't been built yet!

abc v. wolf 
the existing contract allowed him to negotiate in good faith, and that if he did receive an offer, he had to give abc the opportunity of first refusal (give them the chance for abc to match or best the offer)

does abc have the right to stop wolf from working someplace else?
no -- there's no non-compete clause in this case

property law: april 8 2010 class notes.

title assurance, cont. 

andy associates v. bankers trusts co. 49 N.Y.2d 13

the problem is taht the assignee only records the assignment of the lease, not the rights of the mortgage.
lease is recorded and assigned and assigned again. looking at a grantor-grantee index to the partie's transactions.
1951 - 1954: marce associates (landlord) to marce management (tenant)
1954 - 1968: mortgage and lease assignment to marce handling company
BUT never assigned the mortgage to MHC
1968: mortgage assignment and lease assignment to andy associates

1968-1973: now the problem is MA gives a mortgage assignment to bombay east
1973: satisfaction of the mortgage is recorded in 1973
1974: a new mortgage taken between BE and bombay trading

what's the langugage of recording statutes? andy associates is void against a good faith mortgagee for consideration (whaaa?)

in good faith means "without notice"
what does it mean to have notice?
1. actual notice
2. constructive notice

this is why we have these statutes (see LNH2)

the question isn't whether or not BT had notice, but whether it had constructive notice.
did it? -- YES
why? because BT could have read the subsequent chain of assignments that a reasonable business would have inquired into (LHN2)

so now, we have three different types of notice that remove you from the recording statute:
1. actual notice
2. constructive notice
3. inquiry notice (charged with facts you would have discovered if you had continued inquiry based on facts you had already discovered)

what would BT have done if they had read the documents? it could have done a "block and lot" number search.

BT screwed up they didn't search for the assignment and didn't cross check it against the grantor-grantee index. the lawyer who did this search is liable for malpractice.

title search exercise.
use the NYC automated city register information system (www.nyc.gov/acris) to generate a title report for the property currently for sale on utopia parkway opposite the law school parking lot. use your title report, and any other information you can find in the title records, to answer the following questions:
1. who currently owns the property?
2. when did the coffineaus acquire the property?
3. under what type of deed did the hardings acquire title?
4. what was the interest rate and payment schedule of the hardings' mortgage?
5. on what date did the hardings pay off their mortgage? -- mortgage satisfaction is the date that it was recorded. how do you figure out the date it was executed? -- look at the instrument itself



servitudes. 

so far, we've been talking about possessory interests in property (legal interests including right to posess). but right to posess is only one in regard to physical things, and for property there is also the right to use, the right to exclude, the right to alienate etc.

we've discused how rights to property can be divided up over time

servitudes have to do with dividing in respect to interest in someone else's land

types of servitudes
non-possessory interests in real property
1. easements:
   A is given the right to enter upon/make use of B's land.
   A is given an affirmative easements

2. A is given the right to enter upon B's land and remove something attached to the land;
    A's interest is a profit

3. A is given the right to enforce a restriction on the use of B's land;
    A's interest may be a negative easement (dominant estate telling the serviant estate what not to do), real covenant or an equitable servitude.
    the determination of which type will depend on the remedy sought.
4. A is given the right to require B to peform some act on B's land;
    A's interest may be treated as a real covenant or an euitable servitude
    depending on the remedy sought.
5. A is given the right to require B to pay money for the upkeep of specified facilities.
    this is a real covenant dependent on the remedy sought.

negative easements, which gives a right to control the use of the land but
    not a right to use the land yourself

appertenant easement, a parcel of land is benefited by the easement
   easement in gross, doesn't require the same burden/benefit relationship. it is the right of use in the
   land of another that is personal (fishing or hunting rights for example)
if you want to control the use of someone else's land, typically an easement is not the way to do it. however, easements have grown up recently as conservation easements. 
   profit: right to do something profitable on the property but not to possess the property itself (like the
   right to drill minerals)
   real covenants:
   equitable servitude (covenant enforceable in equity, by injunction): this interest is more flexible than
   the covenant enforceable at law.
   permissive use (license): we won't really be looking at this, but it will come up with prescriptive
   easements

creation of easements
by express grant (written instrument)

by implication
    easement implied by prior existing use
    easement implied by necessity

by prescription (n.b. -- determining prior use)

van sandt v. royster 148 Kan. 495

lot 19 belonged to the jones to the van sandt. lot 20 belonged to the murphys to the royster and lot 4 belonged to the baileys, and then to the grays.
the roysters and the grays sewer lines are connected to his. and then one day

1936: van sandt has a load of shit in his basement.

van sandt wants to enforce his rights as the owner of lot 19 for an injunction for them to have

royster and gray argue easement by perscription (n.b. -- this easement is like adverse possession).

quasi easement was created for the serviant/ dominant tenements... but what does this really tell us about the interests?
1. if you sell a piece of land, do you continue to hold any rights in it?
2. is this the sort of thing you can be on notice about?

why do we care about this???
because the roysters and the grays are deriving a benefit from the fact that the pipes run under the property and they have been for a long time.

we have to now weigh the interests of the three parties: is the defendant's (and their predecessors in interest) use of the pipesmore important, or van sandt's right to exclusion on his property.

a distinction of reserved v. granted easements: under the restatement, it comes in as factor A. why? because it would be easiest for the conveyor to manage how this interest is created and assigned -- just put it into the deed! grantor is in a better position to make the granting explicit. so how does the increased burden manifest itself?

actual requirements for establishing the easement from a prior existing use:
1. existed at the time that the serviant tenement was severed from the dominant tenement
2. permanent and continuous
3. apparent to the owner of the serviant tenements
4. necessary to the enjoyment of the dominant tenement

now we need to know whether there was reliance:
who is asserting, the grantor or grantee?
common or reciprocal benefits derived might put you on notice of the benefits derived in that it's being enjoyed by others.

these are the elements of determining prior use, but the problem can be that they are very fluid. this plus the restatement is what we'll use however. but remember that we can determine degrees of necessity, etc. 

othen v. rosier
seems like adverse possession but that doesn't really translate well here because the property is not owned.

reading is 740-750, 755-768