INJUNCTIVE RELIEF: Definition and Examples

Injunctive Relief

If you’re at a crossroads and not sure of what to do to mitigate damages caused by a former employee, a business partner, or someone you recently entered an agreement with, consider getting an injunctive relief.

It will put a stop to the activities of the other party while you both straighten things out.

Injunction is an equitable remedy, and was developed in English equity courts. It has traditionally been used when a harm cannot be properly repaired by a monetary reward, as with other equitable remedies. (The notion that reflects this is that an injunction can only be granted if there is “no sufficient remedy at law.”) Injunctions are meant to restore someone’s rights once they have been violated.

There are different types of injunctive relief and they serve different purposes. Therefore, this article will holistically discuss them to help you understand them.

What is an Injunctive Relief

Injunctive relief, often known as an injunction, is a remedy that prevents or requires a party to do something. For example, injunctive relief can be used to stop a city council from demolishing a wildlife reserve, especially when the species there are endangered.

Or, it could be used to other a party to compensate another party for damages caused. It’s usually only used when there’s no other legal option and irreparable harm will follow if the relief isn’t granted.

Injunctive relief could also be used in so many other scenarios such as property litigation, employment law, healthcare law, and commercial and construction disputes.  

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Declaratory and Injunctive Relief

A declaratory remedy is a judgment by a court that states the rights of parties without mandating any specific action or specifying damages awarded.

When a party seeks a declaratory judgment, it wants the court to make an official statement about the status of the dispute at hand. This will help the parties involved understand their rights and how to proceed if need be.

Meanwhile, Injunctive relief is a remedy that prevents or requires a party to do something.

Injunctive Relief Clause

An injunctive remedy clause is a portion of a contract that requires one or both parties to refrain from doing something that might hurt the other party. Below is a sample of a relief Clause.

It’s used when there’s no way to undo the damage produced by trading money or other valuable property, and the only option to avoid damage is to discontinue the indicated action.

Injunctive Relief. The Borrower recognizes that in the event the Borrower fails to perform, observe or discharge any of its obligations or liabilities under this Agreement, any remedy of law may prove to be inadequate relief to the Lenders. Therefore, the Borrower agrees that the Lenders, at the Lenders’ option, shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages.

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Injunctive Relief Examples

There are numerous scenarios where an injunctive relief can be used. The following are a few of such situations.

#1. Intellectual Property Infringement

Infringement of intellectual property, even if only for a day, can be extremely costly to the property owner. As a result, TROs are an excellent tool for a patent owner to stop a competitor from selling his invention, or for a trademark owner to stop a company from creating and selling counterfeit purses bearing the owner’s brand.

Selling bootleg items belonging to a film studio, plagiarizing another person’s work, or utilizing music without the composer’s permission are all examples of intellectual property infringement. If the intellectual property owner can establish that there is actual infringement, the injunction will almost always turn into a permanent injunction.

#2. Client Theft

People are usually at loss on what to do when a former employee starts poaching their customers. This usually happens when such employees signed an unenforceable non-compete agreement (NCA) and if they are poaching in areas where they are allowed to.

But what if such a former employee actually signed an enforceable NCA? And he’s actively poaching some of your best clients? This is where an Injunctive relief can come in, especially if such an employee is poaching clients he should not.

The distance a former employee is engaging with clients, as well as a time period during which the individual cannot engage in this field, are examples of criteria. When specialist doctors, for example, leave a hospital and open a private practice far away, they must sign a non-compete agreement (NCA).

If this is the case, a TRO is the quickest route to stop the unfavorable action. And, once the dust has settled and the employee has stopped poaching clients, the parties can decide how to proceed.

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#3. Freezeouts of Minority Shareholders

It is not commonplace for the majority (typically family) investors to “freeze out” the minority (generally non-family) stockholders in closely held, small business firms with private stockholders. This includes the company’s minority stockholder’s position being terminated.

In this instance, a TRO is an effective tool for preventing the majority owners from freezing out the minority shareholders — and, in some cases, rehiring them. The irreparable injury arises when a minority stockholder gets fired from his or her job and hence is unable to earn a living.

#4. Breaches Of Fiduciary Duties

Injunctions are particularly effective in cases where a corporation fiduciary begins to act in a way that is harmful to the firm and, as a result, to the beneficiaries.

Consider what would happen if one partner started selling large sums of firm assets without the other’s permission or agreement. An injunction issued in a timely manner can stop the bleeding long enough for the parties to figure out what’s going on.

The plaintiff must show that the defendant is not operating in the best interests of the company to establish this violation. This can be aided by a paper trail, which records specific transactions.

#5. Contract Breaches

In the corporate world, contracts are taken very seriously. They demonstrate a written agreement and specify a state in which to resolve disagreements.

Not paying vendors for their services is an example of a contract breach. In most cases, courts award money to the innocent party to compensate for the damages, but an injunction can provide equitable relief as well. Specific performance, if requested by the innocent person, would constitute an equitable remedy.

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#6) Bankruptcy

When a company files for bankruptcy, it surrenders its assets to the court in order to pay off as many obligations as feasible. Whether they file for Chapter Seven or Chapter Eleven bankruptcy determines how much power the court has over their assets and how much they must pay.

A stay of action is a bankruptcy injunction that prevents creditors from collecting money or assets throughout the process. This provides some breathing room for the plaintiff while allowing the courts to keep control. A creditor must file a court petition.

Injunctive Relief Types

Injunctive relief is of three types and they are as follows: TRO (Temporary Restraining order; preliminary injunction, and permanent injunction.

Every injunctive relief is valid for a certain period of time different from one another.

Preventive injunctions are used to rectify an ongoing legal wrong or to protect the plaintiff from harm. One such injunction may be issued against a factory for damaging locals’ drinking water.

As the name implies, a TRO (temporary restraining order) is a short-time order that bars a party from taking a given line of action.

Because it can be granted and enforced promptly, a TRO is frequently the first line of defense for a party seeking injunctive relief. They are utilized to maintain the status quo.

Whereas a preliminary injunction is issued after the dust has settled from the TRO and the parties have had a chance to discuss the facts that led them to this point with the court.

While a permanent injunction is exactly what it sounds like.

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FAQs

what is an injuctive relief?

Injunctive relief, often known as an injunction, is a remedy that prevents or requires a party to do something.

What types of injunctive relief are there?

There are three TRO (Temporary Restraining order; preliminary injunction, and permanent injunction.

What is an Injunctive Relief Clause?

An injunctive remedy clause is a portion of a contract that requires one or both parties to refrain from doing something that might hurt the other party.

Conclusion

Getting an injunctive relief might be all you need to stop someone from taking advantage of you. This post explains all it is about and where and when to apply one. And if you’ve read till this point, I’d like to think you understand it all.

If not, kindly let us know in the comment section.

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