ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Friday, March 24, 2017

Contracts read published in Drake Law Review

Abstract

Consent, a powerful concept that lies at the heart of contract law, has received a great amount of scholarly attention. Recently, some contract law scholars have been criticizing consent and suggesting alternative concepts. Contrary to this approach, this Article offers a nuanced description of consent that could pave the way for a better application of consent in contract law. At present, courts ascribe only a narrow meaning to consent, namely, that consent is either informed and freely given, or it is not. However, consent is not simply a “yes or no” question; consent is more complex than such an analysis suggests and can be both gradual and continuous. Rejecting a binary framework which views consent as an on/off concept, this Article asserts that consent is better understood as a spectrum that ranges from “no consent” to “solid consent,” and that contains many gray areas in between. These gray areas include, but are not limited to, hesitation, deliberation, negotiations, mixed feelings and reservations. Further complicating the matter is the fact that consent is often contextual. Consent is shaped by the relationship between the consenter and the consentee. Factors of power, intimacy, trust, arm's length relations and more all differently influence consent. Moreover, consent is socially constructed. Factors such as gender, race and class directly influence the choices and constraints present for both parties in the background of a consensual decision, as do factors such as social context and policy considerations. Consent must be recognized as deriving not only from the individual mindsets of the parties, but also from the relevant public and social circumstances. As such, consent to a prenuptial agreement, consent to an employment agreement and consent to a consumer contract must be recognized as distinct from one another, in that they are shaped by their unique social contexts. By exploring the many shades of consent, this Article may serve as a starting point in the development of a diverse and heterogenic yet useful and practical concept of consent.

 

Link to download complete article can be found here: http://ssrn.com/abstract=2939755

March 24, 2017 | Permalink

Thursday, March 23, 2017

Weekly Top Ten SSRN Contracts Downloads (March 23, 2017)

Top-ten-green

SSRN Top Downloads For SSRN Logo2
Contracts & Commercial Law eJournal

RECENT TOP PAPERS for all papers first announced in the last 60 days
22 Jan 2017 through 23 Mar 2017

Rank Downloads Paper Title
1 278 Rise of the Digital Regulator
Rory Van Loo
Boston University School of Law
2 236 Notice and Takedown in the Domain Name System: ICANN's Ambivalent Drift into Online Content Regulation
Annemarie Bridy
University of Idaho College of Law
3 207 Choice of Law in the American Courts in 2016: Thirtieth Annual Survey
Symeon C. Symeonides
Willamette University - College of Law
4 197 Interpreting Contracts via Surveys and Experiments
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
5 187 Copyright Survives: Rethinking the Copyright-Contracts Conflict
Guy A. Rub
Ohio State University (OSU) - Michael E. Moritz College of Law
6 175 Interpretation and Construction in Contract Law
Gregory Klass
Georgetown University Law Center
7 162 What Brexit Means for the Interpretation and Drafting of Financial Contracts
Matthias Lehmann and Nihal Dsouza
University of Bonn and University of Bonn
8 161 Understanding the Consumer Review Fairness Act of 2016
Eric Goldman
Santa Clara University - School of Law
9 157 The Deformation of Contract in the Information Society
Margaret Jane Radin
University of Michigan Law School
10 148 Comparative Contract Law and Development: The Missing Link?
Mariana Pargendler
Fundação Getulio Vargas Law School at São Paulo

 

SSRN Top Downloads For SSRN Logo2
Law & Society: Private Law - Contracts eJournal

RECENT TOP PAPERS for all papers first announced in the last 60 days
22 Jan 2017 through 23 Mar 2017

Rank Downloads Paper Title
1 278 Rise of the Digital Regulator
Rory Van Loo
Boston University School of Law
2 252 טעות בכדאיות העסקה: שווי האובייקט, התפתחויות עתידיות, נטילת סיכון ורשלנות הטועה (Mistake as to the Worthwhileness of the Transaction: The Object's Value, Future Developments, Assumption of Risk, and Negligence)
Eyal Zamir
Hebrew University of Jerusalem - Faculty of Law
3 207 Choice of Law in the American Courts in 2016: Thirtieth Annual Survey
Symeon C. Symeonides
Willamette University - College of Law
4 197 Interpreting Contracts via Surveys and Experiments
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
5 187 Copyright Survives: Rethinking the Copyright-Contracts Conflict
Guy A. Rub
Ohio State University (OSU) - Michael E. Moritz College of Law
6 175 Interpretation and Construction in Contract Law
Gregory Klass
Georgetown University Law Center
7 157 The Deformation of Contract in the Information Society
Margaret Jane Radin
University of Michigan Law School
8 148 Comparative Contract Law and Development: The Missing Link?
Mariana Pargendler
Fundação Getulio Vargas Law School at São Paulo
9 137 The International Task Force on Mixed Mode Dispute Resolution: Exploring the Interplay between Mediation, Evaluation and Arbitration in Commercial Cases
Thomas Stipanowich and Veronique Fraser
Pepperdine University School of Law and Université de Sherbrooke - Group for the Prevention and Resolution of Disputes (G-PRD)
10 135 Contracting Over Privacy: Introduction
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School

March 23, 2017 in Recent Scholarship | Permalink | Comments (0)

Wednesday, March 22, 2017

Robert Brain (Loyola Los Angeles) - KCON Scholarship Spotlight

The conference is over but the scholarship lives on. This is one of a series of posts highlighting several KCON XII presenters who graciously provided me with abstracts or summaries of their presentations.

KCON12-Logo

A PROPOSAL TO ELIMINATE UCC § 2-315

Robert Brain, Loyola Law School, Los Angeles

            It is my contention that UCC § 2-315, the provision on the implied warranty of fitness for a particular purpose, is: (1) unnecessary; and (2) causes more problems than it solves.  As such, I believe it should be eliminated from the UCC.

Bob Brain (Loyola LA)             The implied warranty of fitness for a particular purpose is unnecessary because a fitness case is, in truth, an express warranty case and can be analyzed under § 2-312.  The only difference from what the Code now recognizes as an express warranty situation and a fitness situation is that the attribute of the good comes initially from the buyer and not the seller.  However, in both cases that parties are contracting based on a shared belief that the good has certain, specified (not implied) qualities.  This can be seen by the two situations below:

             Situation One: A scuba diver walks into a dive shop, looking for a watch that will be waterproof down to 200 feet. She tells the sales associate that she’s looking for a watch for a deep dive.  The clerk says, “This one is guaranteed to be watertight down to 200 feet.” She buys the watch.

             Situation Two: The same woman walks into the same shop and talks to the same associate.  She says, “I’m doing deep diving, and am looking for a dive watch that will stay watertight down to 200 feet.”  The associate picks up the same watch as before, and says, “Here you go.”  The woman buys the watch.

            If the watch starts leaking at 60 feet, under current law, the woman would sue for breach of express warranty under Situation One, but would have to sue for breach of the implied warranty of fitness under Situation Two. The legitimate expectation of the consumer is identical in the two situations and should be analyzed identically.  If the words and actions of the associate in Situation Two are taken as affirming the 200 foot watertight attribute initially broached by the buyer, there is no difference between the two. As such, what are now fitness cases could, and should, be analyzed as breaches of express warranty.

            Conceptually it is difficult to justify the fitness warranty as an “implied” warranty.  In the merchantability cases under § 2-314, it is the attribute of the good – that it is of ordinary quality, for example – that is implied into the transaction.  But under § 2-315, the attribute of the good is expressed; what is “implied” is some representation by the seller as to that expresses attribute, but as noted above, the words and actions of the seller can easily be viewed as communicating that the seller is warranting the attribute under existing law.  It is an “implied” warranty in the same way we say a contract by conduct is an “implied-in-fact” contract.  But we treat implied-in-fact contracts as if they were express contracts, and we should so the same for fitness.

             Another issue is that courts have problems determining whether particular cases should be analyzed as a fitness or a merchantability case.  For example, suppose the buyer asks for “heavy-duty hiking boots” and suppose the shoes come apart upon their first wearing.  Is the proper claim that the boots are not fit as ordinary heavy-duty hiking boots (or even as just boots), or is it a fitness problem because they do not measure up as heavy-duty boots?  Courts have struggled with this issue from the first English case in which the fitness warranty was birthed. 

March 22, 2017 in Conferences, Contract Profs, Recent Scholarship | Permalink

Sunday, March 19, 2017

The Oxford Comma is (Still) Important

In case you have not yet heard about the recent First Circuit Court of Appeals case discussing the legal importance of a comma, here goes: A Maine statute lists the following activities as not counting for overtime pay: Images

The canning, processing, preserving, freezing, drying, marketing, storing, packing for shipment or distribution of: (1) Agricultural produce; (2) Meat and fish products; and (3) Perishable foods.

Does that mean that drivers can get overtime because driving does count for overtime since “packing” covers both “shipment or distribution”? Or should the sentence be read as “packing for storage” as one thing and “distribution” another, thus precluding the drivers from earning overtime pay?

Circuit judge David J. Barron concluded that “the exemption’s scope is actually not so clear in this regard. And because, under Maine law, ambiguities in the state’s wage and hour laws must be construed liberally in order to accomplish their remedial purpose, we adopt the drivers’ narrower reading of the exemption.”

So, commas still matter. Consider too how “I love my parents, Lady Gaga and Humpty Dumpty” and “I love my parents, Lady Gaga, and Humpty Dumpty” are a little different. Language aficionados take note! Precise drafting still matters. Was this an outcome-oriented holding? Perhaps. But if so, a holding in favor of workers over a company in a case of interpretive doubt may, in today’s increasingly tough economy for middle and low-income earners, not be such a bad idea from a public policy point of view.

The case is O’Connor v. Oakhurst Dairy, No. 16-1901 (1st Cir. 2017).

March 19, 2017 in Commentary, Current Affairs, Famous Cases, In the News, Legislation, Miscellaneous, Recent Cases | Permalink | Comments (0)

Friday, March 17, 2017

No Lawsuit for Selling Suboptimally Sized Product

A group of plaintiffs suffering from glaucoma bought eye drops manufactured by six pharmaceutical companies. They claimed that the eye drops were unnecessarily large (no, let’s not go there this time): all drops sold by these manufacturers were larger than 16 microliters (equal to 10% of a tablespoon). The plaintiffs claim that unnecessarily large eye drops are wasteful because the human eye can only contain so much fluid. Anything in excess of that will simply overflow and be wasted, which is a waste of money.

The amount of fluid that the human eye can contain without overflowing varies from person to person. The defendants asserted that the amount often exceeds 16 microliters. Further, the active ingredient in each drop is only about 1% of the drop. The smaller the drop, the less therapeutic effect, they claimed (without explaining why, for example, two drops could not simply be applied by those with larger eyes…). Defendants also claimed that larger drops helps those with unsteady hands, such as the elderly, because “the smaller the drop, the likelier they are to miss.” Now, at least that makes sense… (not!).

As was said on the listserv, this is arguably not even a contract law case at all, especially because no allegation of misrepresentation, breach of contract, or the like was asserted. In the words of opinion author Judge Posner, this is merely a case of “you can do better by us” asserted by plaintiff consumers. “That is all they are arguing.” However, said Posner, “[o]ne cannot bring a suit in federal court without pleading that one has been injured in some way (physically, financially—whatever) by the defendant. That's what's required for standing. The fact that a seller does not sell the product that you want, or at the price you'd like to pay, is not an actionable injury; it is just a regret or disappointment—which is all we have here, the class having failed to allege ‘an invasion of a legally protected interest.’”

So, what do we have here? No contracts violation, perhaps. Consumer fraud under the respective state acts? Apparently not. What we seem to have, however, is another instance of Corporate America taking advantage of consumers with the consent of even the federal judicial appellate system. Of course any product that is larger than what is needed per “portion” is wasteful and thus arguably taking unnecessary advantage of consumers. Whether or not that can be framed as an actionable legal issue in our system is another story altogether, sadly. Even worse: companies do apparently not want to do right by their own customers, in this case often elderly folks going blind! Episode32

This is, of course, not the only instance of needless and blatant consumer fraud (for that is what these instances are, at least in the common, if not the legal, sense of the word). More examples:

  • When you buy lotion, it is next to impossible to get the last, oh, 20% out of those pump-type containers unless you unscrew the pump and pour out the lotion.
  • Almost all perishable food items are sold in much larger portions than what is needed for most of us – think cottage cheese, yoghurt, lunch meats (OK, apart from those itty bitty bags, those are great), milk, you name it. People needing more could just buy two items! (That’s how it’s done with great success in many European countries, but heaven forbid that we ever learn anything from other countries.) The rest of us often have to throw out much of the food as it doesn’t last that long.
  • How about packaging? Huge bags of chips that are only 1/2 full? Same for cereal boxes? Sun screen spray bottles that are also only 1/3 full?
  • OK, I’m in a crappy mood about companies and organizations today, I admit. Of course the capitalist model is the best one, etc. etc. But it would be nice if more companies would focus more on decency, less waste in packaging and eventual product usage, and consumer needs. This eye drop story really is one of forcing consumers to waste product and thus money. Let’s just call a spade a spade.

On an unrelated note: I apologize for being so inactive on this blog for so long. I have had a disappointing contractual work experience that has drained me and continues to do so, frankly. I am trying the hardest I can to find interesting cases to blog about. Should you hear of any, I’d be delighted to be notified. I also invite guest bloggers to blog here with us. As always: thanks to my co-bloggers for their hard and excellent work!

The case described above is Eike, et al. v. Allergan, et al., No. 16-3334 (Seventh Cir. 2017).

Hat tip to my colleagues on the Contracts listserv for discussing this case.

March 17, 2017 in Commentary, Contract Profs, Current Affairs, Miscellaneous, Recent Cases, True Contracts | Permalink | Comments (0)

Thursday, March 16, 2017

Weekly Top Ten SSRN Contracts Downloads (March 16, 2017)

Top10-speech bubble

SSRN Top Downloads For SSRN Logo2
Contracts & Commercial Law eJournal

RECENT TOP PAPERS for all papers first announced in the last 60 days
15 Jan 2017 through 16 Mar 2017

Rank Downloads Paper Title
1 263 Rise of the Digital Regulator
Rory Van Loo
Boston University School of Law
2 225 Notice and Takedown in the Domain Name System: ICANN's Ambivalent Drift into Online Content Regulation
Annemarie Bridy
University of Idaho College of Law
3 193 Choice of Law in the American Courts in 2016: Thirtieth Annual Survey
Symeon C. Symeonides
Willamette University - College of Law
4 182 Interpreting Contracts via Surveys and Experiments
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
5 162 Interpretation and Construction in Contract Law
Gregory Klass
Georgetown University Law Center
6 158 Copyright Survives: Rethinking the Copyright-Contracts Conflict
Guy A. Rub
Ohio State University (OSU) - Michael E. Moritz College of Law
7 153 What Brexit Means for the Interpretation and Drafting of Financial Contracts
Matthias Lehmann and Nihal Dsouza
University of Bonn and University of Bonn
8 147 Understanding the Consumer Review Fairness Act of 2016
Eric Goldman
Santa Clara University - School of Law
9 146 The Deformation of Contract in the Information Society
Margaret Jane Radin
University of Michigan Law School
10 145 Comparative Contract Law and Development: The Missing Link?
Mariana Pargendler
Fundação Getulio Vargas Law School at São Paulo

 

SSRN Top Downloads For SSRN Logo2
Law & Society: Private Law - Contracts eJournal

RECENT TOP PAPERS for all papers first announced in the last 60 days
15 Jan 2017 through 16 Mar 2017

Rank Downloads Paper Title
1 263 Rise of the Digital Regulator
Rory Van Loo
Boston University School of Law
2 193 Choice of Law in the American Courts in 2016: Thirtieth Annual Survey
Symeon C. Symeonides
Willamette University - College of Law
3 182 Interpreting Contracts via Surveys and Experiments
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
4 162 Interpretation and Construction in Contract Law
Gregory Klass
Georgetown University Law Center
5 146 The Deformation of Contract in the Information Society
Margaret Jane Radin
University of Michigan Law School
6 145 Comparative Contract Law and Development: The Missing Link?
Mariana Pargendler
Fundação Getulio Vargas Law School at São Paulo
7 134 Contracting Over Privacy: Introduction
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
8 110 The International Task Force on Mixed Mode Dispute Resolution: Exploring the Interplay between Mediation, Evaluation and Arbitration in Commercial Cases
Thomas Stipanowich and Veronique Fraser
Pepperdine University School of Law and Université de Sherbrooke - Group for the Prevention and Resolution of Disputes (G-PRD)
9 109 History and Theory of Good Faith Performance in the United States
Steven J. Burton
University of Iowa - College of Law
10 83 Contract Exposition and Formalism
Gregory Klass
Georgetown University Law Center

March 16, 2017 in Recent Scholarship | Permalink | Comments (0)

Offers, Counteroffers, Conditions Precedent

A recent case out of Ohio, Sabatine BK Development v. Fitzpatrick Enterprises, Case No. 2016CA00116, is a nice case for offer-counteroffer problems as well as condition precedent situations. In the case, Sabatine sent a purchase offer to Fitzpatrick for a piece of land "as depicted on Exhibit A." However, Sabatine never sent an Exhibit A. Fitzpatrick made his own Exhibit A and sent it to Sabatine along with some other changes. The court found that this was a counteroffer, not an acceptance. Fitzpatrick's new Exhibit A was a material modification of Sabatine's offer, which had contained no Exhibit A at all and therefore never defined the land that was being discussed. Sabatine needed to accept this counteroffer. However, Sabatine actually rejected the counteroffer. So there was never any contract. 

Alternatively, the parties were excused from performing because the contract contained a condition precedent that never occurred. The contract read that the contract was "subject to a mutually agreeable replat of the property." "Subject to" is classic condition precedent language, and the parties never agreed on a replat of the property, so it was never fulfilled, and so neither of the parties had to perform. 

March 16, 2017 in Recent Cases, True Contracts | Permalink | Comments (0)

Tuesday, March 14, 2017

Pineapples Don't Merit Injunctive Relief

 

Ananas comosus dsc07804.jpg
By David Monniaux - Own work, CC BY-SA 3.0, Link

I just listened to a podcast about the fledgling pineapple industry in Hawaii in the 19th century, and then a case about pineapple crossed my inbox. (It's a snowy day on the East Coast, so thinking about pineapples is welcome.) It's a case out of the Southern District of Florida, Del Monte International v. Ticofrut, Case No. 16-23894-CIV-MARTINEZ/GOODMAN (behind paywall), and it involves Costa Rican pineapples. It's an interesting case revolving around Del Monte's quest for a preliminary injunction to stop Ticofrut from selling pineapples to third parties. Del Monte had consented to these third party sales when Del Monte and Ticofrut were in a contract together. However, once the contract ended and the negotiations between the parties didn't lead to a new contract, Del Monte objected to the third party sales as violating restrictive covenants in the old contract that survived its termination. 

The court doesn't really doubt that Ticofrut's sales are in violation of the restrictive covenants, but the court doesn't think that these violations are resulting in irreparable harm to Del Monte, and largely that's because Del Monte had previously allowed the third party sales. The court thinks it's absurd for Del Monte to argue it's being irreparably harmed by conduct that it previously had no problem with. The court sums up Del Monte's position as "it cannot be harmed by conduct it agreed to but can be harmed by that same conduct if it did not agree to it," which it finds "fundamentally faulty." The court basically says that either Del Monte permitted itself to be irreparably harmed before or the conduct doesn't irreparably harm Del Monte at all; it thinks the latter is more likely. 

The court also concludes that Del Monte's injuries here aren't unique or difficult to quantify. Pineapples can be valued pretty easily, so the court says that, unlike in other cases involving non-competes, it's not difficult to compensate Del Monte with monetary damages instead of injunctive relief. 

March 14, 2017 in Food and Drink, Recent Cases, True Contracts | Permalink | Comments (1)

Monday, March 13, 2017

On International Women's Day, Advocacy Groups Launch "Full Citizenship Project for Law Faculty"

Professional associations unite to support full institutional citizenship - an effort to correct gender and related disparities among law faculty

The Legal Writing Institute (LWI) and the Association of Legal Writing Directors (ALWD) announce the launch of a new initiative aimed at correcting gender and related disparities among U.S. law faculty.  Organizers chose International Women's Day (March 8) to launch the "Full Citizenship Project for All Law Faculty" because of the professional status challenges that continue to plague skills-based and academic support law faculty, who are predominantly women.

As law faculty status and salaries decrease, the percentage of women faculty increases.  Based on available data, roughly - and only - 36 percent of tenured or tenure track faculty are female, whereas 63 percent of clinical faculty and 70 percent of legal writing faculty are female.  This disparity is due to faculty teaching in skills-based areas often being denied the opportunity to earn the same security of position and academic freedom that traditional law faculty enjoy.  Yet security of position and academic freedom are needed for a robust classroom and innovative teaching in all areas of law.

The Full Citizenship Project kicks off the start of a campaign to raise awareness about the challenges facing many of the women and men who teach in skills-based positions.  

"The goal of this project is to gain support among all law school administrators and faculty for our view that no justification exists for subordinating one group of law faculty to another based on the nature of the course, the subject matter, or the teaching method," said Kim D. Chanbonpin, President of the Legal Writing Institute.  "We believe these rights are now necessary more than ever before to ensure that law students and the legal profession benefit from the myriad perspectives and expertise that all faculty bring to the mission of legal education.  

The first step of this project involves gathering signatures from across the country endorsing the Full Citizenship Statement, which has already been adopted by these organizations and by the Society of American Law Teachers Board of Governors.  A copy of the Full Citizenship Statement is available.

We invite all interested parties - both within and beyond the legal academy - to endorse the Statement by signing here.  The signature campaign begins on International Women's Day (March 8) and will end on Equal Pay Day (April 4).  Organizers plan to report and present the results of the project to interested organizations, including the American Association of Law Schools, the American Bar Association, and the American Law Deans Association.  More information about the Citizenship Project is available on the LWI website.

ABOUT LWI AND ALWD: The Legal Writing Institute (LWI) is a nonprofit organization dedicated to improving legal communication by supporting the development of teaching and scholarly resources and establishing forums to discuss the study, teaching, and practice of professional legal writing.  LWI has nearly 3,000 members representing 38 countries.  The Association of Legal Writing Directors (ALWD) is a non-profit professional association of directors of legal reasoning, research, writing, analysis, and advocacy programs from law schools throughout the United States, Canada and Australia.  ALWD has more than 300 members representing more than 150 law schools.  The mission of ALWD is to pursue activities to help law schools provide excellent legal writing instruction. 

 

Contact:

Kim D. Chanbonpin

President, The Legal Writing Institute

The John Marshall Law School

312-386-2856

kchanbonpin@jmls.edu

-OR-

Mary Bowman

Associate Professor of Law and Director of the Legal Writing Program

Seattle University School of Law

206-979-3301

bowmanm1@seattleu.edu

 

March 13, 2017 | Permalink

Friday, March 10, 2017

Deborah Zalesne (CUNY) - KCON Scholarship Spotlight

The conference is over but the scholarship lives on. This is one of a series of posts highlighting several KCON XII presenters who graciously provided me with abstracts or summaries of their presentations.

KCON12-Logo

Choosing “Choice” in the Age of ART: Designer Babies and the Case for Genetic Selection

Deborah Zalesne (City University of New York School of Law)

ABSTRACT 

While rapidly developing Assisted Reproductive Technology (“ART”) such as in vitro fertilization, surrogacy, artificial insemination, IUI, fertility medication, intracytoplasmic sperm injection, cryopreservation, and pre-implantation genetic diagnosis, offer new pathways to parenthood, this capacity has challenged our collective notions about family. Ethical questions that arise require rethinking the traditional view of family as something “organic” and “natural” and as a “self-contained unit.”

Deborah Zalesne (CUNY)New technologies allow for far-reaching reproductive decision-making that was not possible even a generation ago. Parents can now select the sex, race, or other characteristics of an embryo to be implanted. Parents can also choose to cryopreserve their embryos to allow for implantation in the future, or choose to terminate or reduce a pregnancy because of birth defects or multiples. With the opportunities presented by reproductive autonomy and choice come legal and ethical chaos of sorts, and a division that pits consent against state and public interest.

As these technologies develop, questions arise as to whether, as a society, we should allow market forces and private contracting to control their use – in effect allowing the market to decide what is right or wrong. Is leaving development of reproductive technology to the demands of the market equivalent to saying nothing is right or wrong – only efficient or inefficient, wealth maximizing, or not wealth maximizing? Or, rather, does the market represent the natural course of change and the inevitable direction of society, with regulation of technology in these areas simply inhibiting progress? There is no single answer to these questions that can be applied across the board to all the various existing and emerging technologies.  I argue, however, that where there is tension between individual reproductive choice and other moral values, the use of reproductive technologies is most often best left to the choice of individuals and the innovation of the market. 

My presentation highlights some of the ethical issues that arise from the reproductive capabilities that have developed over the past decades, focusing specifically on the unique ethical issues that arise from pre-implantation genetic testing. (I will also briefly discuss ethical issues surrounding gamete donation and surrogacy, which can result in more than two legal or biological parents; the creation, selection, freezing, and destruction of embryos; and prenatal testing, selective abortion and selective reduction.) Much of the resistance to these technologies stems from long-held and deeply ingrained beliefs about the purity of reproduction and motherhood. As technology continues to create reproductive possibilities that were once unheard of or considered fantasy, the purity of motherhood, pregnancy, reproduction, and family are threatened, creating controversy and debate. My talk examines some potentially troubling contract clauses that can give reproduction choices to intended parents that did not exist before technology facilitated it. I attribute some of the resulting ethical concern to societal hesitance to deviate from traditional family norms, looking specifically at the sacredness of motherhood and primacy of biology in definitions of parenthood.

Ultimately, I argue for emphasis on consent and market freedom, and for more rigorous and consistent enforcement of reproductive agreements. The law, by its nature, is slow to respond and slow to capture societal mood, which is constantly evolving. Artificial insemination, for example, was originally, over a century ago, thought to be scandalous, but opinions softened eventually. Since law necessarily lags behind social momentum, family law and regulation are often ill equipped to address adequately the myriad ethical issues that have arisen and are likely to arise as technology advances further. Even as family law adapts, it will never be able to keep pace with the rapid developments happening in reproductive technology and accommodate all possible non-normative relationships, ever growing based on cultural and social shifts, and made even more accessible through technology. Regulation of new technologies can thwart progress, inhibiting the development of important medical procedures. Consent, market forces, and contract law, on the other hand, which are based on individual needs, individual desires, and societal demand, are the best arena for dealing with rapid technological momentum.

People have a fundamental right, both morally and legally, to privacy and freedom when it comes to reproduction, so intervention where there are private reproductive agreements is not usually justified. Individual choice should guide reproduction (whether natural or artificially mediated), and a free market and private contracting are the best vehicles for delivering assisted reproductive services and for responding to individual choice. Assisted reproduction, like sexual reproduction, is not a social enterprise. Although it often involves more than two parties, it is still based on private arrangements and should be governed by rules of privacy and autonomy. 

The SSRN link to the full paper is: http//ssrn.com/abstract=2930290

March 10, 2017 in Conferences, Contract Profs, Recent Scholarship | Permalink | Comments (1)

Thursday, March 9, 2017

Weekly Top Ten SSRN Contracts Downloads (March 9, 2017)

Top10DeskSign

SSRN Top Downloads For
Contracts & Commercial Law eJournal

RECENT TOP PAPERS for all papers first announced in the last 60 days SSRN Logo2
8 Jan 2017 through 9 Mar 2017

Rank Downloads Paper Title
1 251 Rise of the Digital Regulator
Rory Van Loo
Boston University School of Law 
2 202 Notice and Takedown in the Domain Name System: ICANN's Ambivalent Drift into Online Content Regulation
Annemarie Bridy
University of Idaho College of Law
3 179 Choice of Law in the American Courts in 2016: Thirtieth Annual Survey
Symeon C. Symeonides
Willamette University - College of Law
4 168 Interpreting Contracts via Surveys and Experiments
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
5 152 Interpretation and Construction in Contract Law
Gregory Klass
Georgetown University Law Center
6 144 What Brexit Means for the Interpretation and Drafting of Financial Contracts
Matthias Lehmann and Nihal Dsouza
University of Bonn and University of Bonn
7 137 The Deformation of Contract in the Information Society
Margaret Jane Radin
University of Michigan Law School
8 128 Contracting Over Privacy: Introduction
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
9 93 Understanding the Consumer Review Fairness Act of 2016
Eric Goldman
Santa Clara University - School of Law
10 138 Comparative Contract Law and Development: The Missing Link?
Mariana Pargendler
Fundação Getulio Vargas Law School at São Paulo

 

SSRN Top Downloads For
Law & Society: Private Law - Contracts eJournal

RECENT TOP PAPERS for all papers first announced in the last 60 days SSRN Logo2
8 Jan 2017 through 9 Mar 2017

Rank Downloads Paper Title
1 251 Rise of the Digital Regulator
Rory Van Loo
Boston University School of Law
2 179 Choice of Law in the American Courts in 2016: Thirtieth Annual Survey
Symeon C. Symeonides
Willamette University - College of Law
3 168

Interpreting Contracts via Surveys and Experiments
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School

4 152 Interpretation and Construction in Contract Law
Gregory Klass
Georgetown University Law Center
5 138 Comparative Contract Law and Development: The Missing Link?
Mariana Pargendler
Fundação Getulio Vargas Law School at São Paulo
6 137 The Deformation of Contract in the Information Society
Margaret Jane Radin
University of Michigan Law School
7 128 Contracting Over Privacy: Introduction
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
8 109 History and Theory of Good Faith Performance in the United States
Steven J. Burton
University of Iowa - College of Law
9 86 The International Task Force on Mixed Mode Dispute Resolution: Exploring the Interplay between Mediation, Evaluation and Arbitration in Commercial Cases
Thomas Stipanowich and Veronique Fraser
Pepperdine University School of Law and Université de Sherbrooke - Group for the Prevention and Resolution of Disputes (G-PRD)
10 80 Contract Exposition and Formalism
Gregory Klass
Georgetown University Law Center

March 9, 2017 in Recent Scholarship | Permalink | Comments (0)

Wednesday, March 8, 2017

Company's Pledge to Donate to a Charity Did Not Create a Contract

A recent case out of the Second Circuit, McCabe v. ConAgra Foods, Inc., 16-3301-cv, adds to the jurisprudence on promotions and offers and unilateral contracts. 

ConAgra ran an annual promotion whereby it pledged to donate to a charity every time a certain code from its packaging was entered on its website, up to a certain maximum amount. McCabe alleged that this promotion created a contract and alleged that ConAgra breached the contract. A promotion is generally not considered an offer to enter into a contract unless it is clear, definite, and explicit, leaving nothing left to negotiate. ConAgra's promotion did not rise to that level, not least because the promotion was clearly limited to a certain maximum amount. For that reason, a person entering the code into ConAgra's website would never have any way of knowing if its code would trigger a donation on ConAgra's part, because the maximum donation amount might have already been achieved. ConAgra's promotion was not an offer, and McCabe could not accept it. 

McCabe then tried to characterize the promotion as an invitation for offers, with people "offering" when they input the code onto ConAgra's website, and ConAgra "accepting" when it acknowledged receipt of the code. However, the promotion was too indefinite to set any terms for the "offer," and the code entry itself did not clarify any of the terms further. 

At any rate, even if there had been a contract, the court found that there weren't sufficient allegations ConAgra had breached it. There was no allegation that ConAgra did not donate to the charity every time it received the code, up to the maximum amount. McCabe's disagreement was really with the charity's own methodology, which was not ConAgra's issue. 

You can listen to the oral argument in this case here

March 8, 2017 in E-commerce, Recent Cases, True Contracts, Web/Tech | Permalink | Comments (0)

Orit Gan (Sapir College, School of Law) - KCON Scholarship Spotlight

The conference is over but the scholarship lives on. This is one of a series of posts highlighting several KCON XII presenters who graciously provided me with abstracts or summaries of their presentations.

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Gett Abuse

Orit Gan (Sapir College, School of Law)

SapirLogoUnder Jewish law divorce occurs when the husband writes and delivers and the wife accepts a gett. Until wife is granted a gett she may not remarry or date. Some men use the gett as a bargaining chip to extort favorable economic divorce agreements. In other words men threaten women by refusing to grant them a gett unless they will succumb to their financial demands. This is gett abuse.

Women who pay for their gett resist enforcement of the divorce agreements by claiming duress, and U.S. courts usually accept such claims. However, based on anti-commodification theories I claim that trading the gett for money should be prohibited. I suggest that gett should be an inalienable right for two reasons. Women pay for a gett under conditions of severe inequality. They are coerced by the necessities of the situation. Moreover, this exchange has a degrading effect. Women's autonomy, dignity and freedom are corrupted and diminished by trading the gett. In an ideal world a gett should not be commodified.

However, we do not live in an ideal world. In today's reality, trading a gett also has advantages for women. Paying for a gett is their only way to break free from the marriage. The alternative is staying married against their will. Furthermore, women bring tort claims against their husbands in civil courts for gett refusal claiming emotional distress. Women then leverage the compensation that they are awarded to get a gett. They use the tort claim to improve their bargaining power and trade the damages awarded for a gett.

Therefore both commodification and non-commodification of gett have both advantages and disadvantages for women. A way out of this double bind dilemma is to recognize incomplete commodification.

The gett abuse analysis has broader implications. For example, the gett abuse analysis may be applicable to custody negotiations. Spouses bargain for their children's custody and maintenance upon divorce. Studies show that women are willing to waive financial rights in order to get custody. This transaction may have the corruption and coercion effects and therefore custody may also be an inalienable right.

March 8, 2017 in Conferences, Contract Profs, Recent Scholarship | Permalink | Comments (0)

Tuesday, March 7, 2017

Hila Keren (Southwestern Law School) - KCON Scholarship Spotlight

The conference is over but the scholarship lives on. This is one of a series of posts highlighting several KCON XII presenters who graciously provided me with abstracts or summaries of their presentations.

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Emotional Value and the Value of Emotions

Hila Keren, Ph.D. (Southwestern Law School)

Hila Keren (Southwestern)American contract law has demonstrated an ongoing and long-lasting reluctance to award remedies to a party to a contract who suffered an emotional harm due to a breach by the other party. Such reluctance stands in clear contrast to the treatment of other harms coming from a breach of contract, namely economic and physical harms. In this paper I argue for equal treatment of all harms caused by a breach of contract and against the legal marking of emotional harms as unfit for the general effort of contract law to compensate injured parties.

For many decades legal theorists have debated the aptness of a special and tightfisted legal response to emotional harms, highlighting both aspects relating to the nature of law and the qualities of the emotions. For example: Is the law, with its rational logic, able to address affective problems? Are emotions uniquely easier to fake or inflate?

Hila Keren KCON12 SlideMy paper brings to the debate a fresh set of arguments. Analyzing the issue from the perspective of the novel approach of law and emotions, I argue that the reluctance to award damages for emotional harms reflects and reinforces law’s “hyper-rationality,” i.e., the broader legal misunderstanding and mistreatment of emotions. More importantly, taking emotions seriously and in an interdisciplinary fashion, I contend that for the last four decades we have been subject to a rapidly increasing dominance of a neoliberal worldview that has operated to reconfigure the meaning of the emotions themselves. This significant shift, I submit, makes compensation for emotional harms more necessary than ever before. 

In particular, I show how neoliberalism has made key positive emotions, such as happiness, an essential part of our human capital and thus has turned these emotions into economic assets—indistinguishable from those the law is eager to protect by contractual remedies. Similarly, neoliberalism has reframed negative emotions of the sort engendered by breach of contract—anxiety or anger for example—as a cause of depreciation of one’s human capital, making such harms impossible to tell apart from other contractual injuries. In a neoliberal world that constantly requires people to invest expensive resources in maintaining their emotional “portfolio,” I conclude, there is an urgent need to bring the conventional reluctance to compensate for emotional harms to an end.

 

March 7, 2017 in Conferences, Contract Profs, Recent Scholarship | Permalink | Comments (0)

Allen Kamp (John Marshall - Chicago) - KCON Scholarship Spotlight

The conference is over but the scholarship lives on. This is one of a series of posts highlighting several KCON XII presenters who graciously provided me with abstracts or summaries of their presentations.

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WELLNESS PROGRAMS UNDER THE AFFORDABLE CARE ACT—A STATUTORY DEFINITION OF “VOLUNTARY”

Allen R. Kamp (John Marshall Law School - Chicago)

          Can Congress force you to eat your broccoli?  To the Supreme Court in NFIB v. Sibelius, the answer is no under the Commerce Clause, but yes under the Taxation Clause.[1] But can your employer force you to eat it? The answer may well be yes.

Allen Kamp (JMLS Chicago)         An employer could have this ability under wellness programs.” Wellness program” is a defined term under the Affordable Care Act.[2] Wellness programs may include monitoring of vital functions and activity that may report activity 24/7.[3] A certain activity level may be required, for example, 5,500 steps a day. Wellness programs may also require meeting such goals as lowering body/mass ratio or cholesterol levels.[4]

          The ACA authorizes wellness programs if they are “voluntary.” The term is numerically defined, unlike legal definitions of duress and unconscionably, which may invalidate some contracts. Employers can reduce employees’ pay by 30% of the total amount of the insurance costs of the employee’s insurance and be “voluntary.” (The total cost includes both the employee and the employer’s contribution.[5] Thirty percent of the average cost of insurance is more than $5,000 per year.[6] For a low wage employee, this penalty is a high percentage of his income.[7]

          The Equal Employment Opportunity Commission has issued a regulation that adopts the ADA definition of “voluntary.” [8]

          Although the definition of voluntary will probably not be decided for years, wellness programs starkly pose the issue of the limits of employer power under the employment contract  Thanks to modern technology, such biometric data as activity level and pulse can be monitored 24/7.[9] A blood test now can reveal he presence of nicotine, cholesterols, glucose, and a great amount of other data such as nicotine use.[10] Should the employer be allowed to monitor employee behavior and vitals 24/7? Wellness programs can include exercise programs (for example, 5,500 steps a day), taking part in health improvement counseling (e.g., weight loss or smoking cessation), and attainment of certain goals, such as lower cholesterol and body/mass index. Should an employer be able to mandate an exercise regime? Should an employer be able to require either achievement of a change in an employee’s body with the threat of sanctions or firing if the change fails to take place?

          The rule may well be that Congress cannot force one to eat one’s broccoli, at least under the Commerce Clause, but one’s employer may well be able to. One can, of course, find another job (one without a wellness program), while one cannot opt out of a federal law. But finding a new job for many is difficult and finding one without a wellness program could be harder.

          We can engage in law professor speculation. Given that assesment to contract terms is found in the most extenuated contexts (See, e.g., Carnival Cruise). Does the ADA definition actually represent  an advance towards a meaningful definition of consent?

          This leads to my final point, which is a dig at my libertarian friends and colleagues. The libertarian premise is that if government power is limited, human freedom is increased. Is there, however, a Law of Conservation of Power in a society parallel to the Law of Conservation of Energy, that the amount of energy in a closed system remains constant? Does the amount of power in a society remain constant, so that if power is diminished in one place it just goes somewhere else?

[1] Nat’l Fed'n of Indep. Bus. v. Sebelius, 132 S. Ct. 2566, 567 U.S.___ (2012).

[2] Patient Protection and Affordable Care Act § 1201(4), 42 U.S.C. § 300gg-4(j)(1)(A) (2012).

[3] E.g., the Fitbit.

[4] Although many federal statutes regulate wellness, none deal with the problems of employee privacy or employer control over employees per se. Statutes which may apply to wellness programs in are the Affordable Care Act (ACA), The Americans With Disability Act (ADA), the Genetic Information Non-Disclosure Act (GINA), HIPPA, and Title VII. The main current legal controversies center around the ACA, the ADA and GINA.

[5] 42 U.S.C. § 300gg-4(j)(3)(A) (2012).

[6] Letter from Congressional Members, Robert C. Scott, Elizabeth Warren, Patty Murray, Louis McIntosh Slaughter, Richard Blumenthal, Janice D. Schakowsky, and Sherrod Brown to Jerry R. Yang, Chair of the EEOC (Feb. 2, 2016), http://democrats.edworkforce.house.gov/sites/democrats.edworkforce.house.gov/files/2016-02-11%20Letter%20to%20EEOC%20Chair%20Yang%20re.%20GINA%20Proposed%20Rule.pdf

[7] This brings the ACA into conflict with at least two other federal acts, the ADA and GINA. Both prevent health information from being disclosed to the employer. Note that the ADA is a law designed to prevent discrimination against the disabled and focuses on that problem, not the privacy aspects of wellness programs. The ADA defines “voluntary” as not being based on any sanction for non-agreement to participation in a wellness program. GINA has a similar provision, with the non-disclosure extending to spouses. So which Act controls? At present it is open question. The ACA is the later act and following the ADA or GINA would make its voluntary section meaningless. But the ACA Regulations do say that the ACA does not limit the ADA. The AARP has sued the E.E.O. C., seeking to have the regulation invalidated. See Complaint,  ww.aarp.org/content/dam/aarp/aarp_foundation/litigation/pdf-beg-02-01-2016/AARP-v-EEOC-complaint.pdf

[8] (3) Incentives offered for employee wellness programs. The use of incentives (financial or in-kind) in an employee wellness program, whether in the form of a reward or penalty, will not render the program involuntary if the maximum allowable incentive available under the program (whether the program is a participatory program or a health-contingent program, or some combination of the two, as those terms are defined in regulations at 26 CFR 54.9802-1(f)(1)(ii) and (iii), 29 CFR 2590.702(f)(1)(ii) and (iii), and 45 CFR 146.121(f)(1)(ii) and (iii), respectively) does not exceed:

(i) Thirty percent of the total cost of self-only coverage (including both the employee's and employer's contribution) of the group health plan in which the employee is enrolled when participation in the wellness program is limited to employees enrolled in the plan;

(ii) Thirty percent of the total cost of self-only coverage under the covered entity's group health plan, where the covered entity offers only one group health plan and participation in a wellness program is offered to all employees regardless of whether they are enrolled in the plan;

(iii) Thirty percent of the total cost of the lowest cost self-only coverage under a major medical group health plan where the covered entity offers more than one group health plan but participation in the wellness program is offered to employees whether or not they are enrolled in a particular plan; and

(iv) Thirty percent of the cost of self-only coverage under the second lowest cost Silver Plan for a 40-year-old non-smoker on the state or federal health care Exchange in the location that the covered entity identifies as its principal place of business if the covered entity does not offer a group health plan or group health insurance coverage.

29 C.F.R. 1630 (d) (2). Published 5/17/16, e-version.

 [9] See webpage of Fitbit advertising the use of the device in wellness programs.

[10] My latest blood test showed that I drink too much water and consume too many saturated fats and sugars.

March 7, 2017 in Conferences, Contract Profs, Recent Scholarship | Permalink | Comments (0)

Monday, March 6, 2017

Fire Brings Us Another Impossibility Case

Here's one for when you teach impossibility: 

The plaintiff is a travel company. The defendant operates a resort. They had a multi-year contract whereby the plaintiff would rent out the resort for Passover each year. The resort burned down and the guests could no longer go to it. The resort, however, sought to keep the plaintiff's down payment. This lawsuit in New York, Leisure Time Travel, Inc. v. Villa Roma Resort and Conference Center, Inc., 32504/09 (behind paywall), resulted. 

The court found that the fire "undoubtedly" rendered the resort's performance impossible, but the resort could not unjustly enrich itself by keeping the travel company's deposit. Therefore, the resort had to give the deposit back to the travel company. 

The court also contemplated whether, once the resort was rebuilt, it was required to permit the travel company to rent it out for Passover. The court found that it had been uncertain at the time of the fire whether or not the resort would ever be rebuilt, and it indeed took years for it to be rebuilt. Therefore, it considered the contract to have been rescinded at the point that the fire rendered the resort's performance impossible, with neither party under any obligation to perform anymore. 

(The resort, weirdly, sought payment from the travel company for the years when the resort was not operational and could not be rented out. The court classifies this claim as "incredible" and denies it. The same fire that rendered the resort's performance impossible also freed the travel company from having to pay for a benefit it was no longer receiving.)

March 6, 2017 in Recent Cases, Travel, True Contracts | Permalink | Comments (0)

Guy Rub (Ohio State) - KCON Scholarship Spotlight

The conference is over but the scholarship lives on. This is one of a series of posts highlighting several KCON XII presenters who graciously provided me with abstracts or summaries of their presentations.

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Copyright Survives: Rethinking the Copyright-Contracts Conflict

Guy A. Rub (The Ohio State University Michael E. Moritz College of Law)

Guy Rub (Ohio State)Copyright law consists of legal norms that govern certain actions with respect to creative works fixed in a tangible medium of expression. Contracts allow individuals to create legal norms with respect to creative (and non-creative) works that are fixed (and those that are not fixed) in a tangible medium of expression. This potential overlap in legal norms can create tension between the two. This tension is typically discussed under the auspice of copyright preemption doctrine.

The leading decision on this matter is Judge Easterbrook’s 1996 decision in ProCD v. Zeidenberg. In that case, the Seventh Circuit held that a contract that restricted the use of factual information was not preempted by the Copyright Act and therefore enforceable. The reaction among copyright scholars was swift and passionate. In dozens of articles and books, spreading over two decades, scholars cautioned that if the ProCD approach is broadly adopted, the results would be dire. Through contracts, the rights of copyright owners would run amok, expand, and in doing so they would invade, shrink, and possibly destroy the public domain. Contracts, we were repeatedly warned throughout the years, would kill copyright law.

 This Article challenges this scholarly consensus by studying the 288 court opinions that have dealt with the copyright-contract conflict over the past four decades. This examination reveals surprising facts: Notwithstanding the scholars’ warnings, ProCD’s approach won the day and was embraced by most federal circuit courts. However, the doomsday scenarios scholars warned against did not materialize. The overall effect of contracts on the size and scope of the public domain, or over copyright law as a whole, seems minimal. The Article explains this discrepancy and shows that contracts are an ineffective tool to control information because they are too weak of a device to threaten or replace copyright law. Indeed, to paraphrase Mark Twain, the reports of the death of copyright were greatly exaggerated.

 The Article concludes by placing this analysis in context, as part of a broader ongoing discussion on the desirability and enforceability of standard-form agreements.

 The Article is available for SSRN download here: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2926253

March 6, 2017 in Conferences, Contract Profs, Recent Scholarship | Permalink | Comments (0)

Eric Zacks (Wayne State) - KCON Scholarship Spotlight

The conference is over but the scholarship lives on. This is one of a series of posts highlighting several KCON XII presenters who graciously provided me with abstracts or summaries of their presentations.

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The Statute of Limitations, Res Judicata, and Acceleration Clauses in Mortgage Foreclosures

Eric A. Zacks (Wayne State University Law School)

ABSTRACT

Eric Zacks (Wayne State)The high volume of foreclosures during and following the Great Recession in the United States has led to the revelation of many troubling lending practices. It also has led to problematic judicial decisions that erode borrower protection by curtailing or eliminating procedural requirements and substantive defenses with respect to foreclosure. My article examines the treatment of statute of limitation and related defenses after a loan has been accelerated following a default. In particular, one would expect the formalism that is used to justify strict enforcement of the loan instruments for foreclosure purposes would also be employed when mortgagors fail to comply with statutory, common law, or contractual requirements regarding mortgage assignment, enforcement, acceleration, or foreclosure. In each instance, however, mortgagors are often instead protected by a contextual or equitable approach that seeks to preserve their right to foreclose. Some courts have ignored the traditional rule that acceleration under a contract starts the clock for statute of limitation purposes or that acceleration consolidates the loan instrument into a single obligation as opposed to an installment obligation. Instead, these courts have permitted lenders to accelerate loans repeatedly without triggering the statute of limitations or res judicata defenses. Consequently, lenders are permitted to assert foreclosure claims with respect to the same underlying debt amount over and over again. Instead of being used as a last-resort, acceleration and the subsequent foreclosure process can now be wielded as a significant threat to borrowers throughout the life of their home loan. My article explores the tendency of, and justification for, adjudicators to liberalize the foreclosure process and provides a critique of this approach.

March 6, 2017 in Conferences, Contract Profs, Recent Scholarship | Permalink | Comments (0)

Saturday, March 4, 2017

Inmates Didn't Consent to Be Bound to a Contract Every Time They Used the Telephone

Myanna has already blogged about the problem of inmate telephone rates being set unreasonably high. Myanna's blog post was about a dispute in California but a recent decision out of the Western District of Arkansas, In re Global Tel*Link Corporation ICS Litigation, Case No. 5:14-CV-5275 (behind paywall), deals with the same issue. (There are several of these litigations, as well as other government debates about regulation of these rates.) In the Arkansas decision, the court refuses to compel arbitration. 

Global Tel*Link's allegation was that the inmates consented to the terms of use when they funded their accounts to enable them to make phone calls, and the terms of use contained an arbitration clause. Every time the inmates put money on their accounts with Global Tel*Link, they heard a message similar to the following: 

Please note that your account, and any transactions you complete with GTL or any of its affiliates, are governed by the terms of use and the privacy statement posted at www.connectnetwork.com . The terms of use and the privacy statement were most recently revised on March 30, 2015.

The court determined, however, that a reasonable person would not have understood this message as referring to a contract and as constituting consent to be bound by that contract, since it never used any contract buzzwords like "contract," "consent," "agree," "assent," "offer," "accept," etc. The court said that, as far as the inmate listening to the message was concerned, the terms of use and privacy statements could have been just generally applicable legal rights imposed by regulators. The court characterized Global Tel*Link's behavior as basically hiding the contract ball: Global Tel*Link could have straightforwardly said the inmates were entering into a contract but instead "invite[d] [them] to visit a website where [they] might accidentally stumble across this fact." (I went to connectnetwork.com. The terms of use are located at the bottom of the page and required me to scroll to find them, and I just blogged about a case where the persistent location of the terms of use hyperlink at the bottom of the page didn't constitute enough notice.)

Because the inmates never signed anything, never clicked or punched any button signifying acceptance of contract terms, never had an opportunity to review the terms of use prior to using Global Tel*Link's services, and would not reasonably have understood the message to be referring to contractual terms, the inmates did not assent to the contract and thus are not bound by the contract's arbitration provision. 

March 4, 2017 in Current Affairs, Government Contracting, In the News, Recent Cases, True Contracts, Web/Tech | Permalink | Comments (0)

Friday, March 3, 2017

If You Disagree with Your Insurance Company's Claim Decision, Do It Promptly

A recent case out of the Southern District of Florida, Rodriguez v. Liberty Mutual Fire Insurance Company, Case Number 16-21926-CIV-MORENO (behind paywall), clarifies the statute of limitations on insurance claims. Rodriguez filed an insurance claim in 2005, to cover damage resulting from Hurricane Katrina. That same year, Liberty Mutual sent Rodriguez a check with a letter indicating that the claim had been completely reviewed. Rodriguez took the check and cashed it. Then, ten years later, in 2015, Rodriguez requested an appraisal of the claim, which Liberty Mutual denied. Rodriguez then brought suit, alleging that the statute of limitations should be measured from Liberty Mutual's denial of the appraisal request in 2015, rather than from the payment of the claim in 2005. 

The court disagreed with Rodriguez. Florida has a five-year statute of limitations on breach of property insurance contract claims. The statute of limitation runs from the breach of the policy. The complaint here alleged that Liberty Mutual breached the contract by failing to make full and adequate payment for the damage done in 2005. Liberty Mutual had informed Rodriguez in 2005 that it considered its review to be complete and Rodriguez made no indication to Liberty Mutual that it was dissatisfied with Liberty Mutual's decision until 2015. Rodriguez also gave no reason to try to justify the ten-year delay in notifying Liberty Mutual of a dispute. Therefore, the statute of limitations began accruing in 2005, not in 2015 when the appraisal request was denied. Otherwise, an insured could simply sit on rights an indefinite period of time, ask for an appraisal many years later, and never be barred by the statute of limitations, which the court thought could not be the right result. 

In addition, the court found that, even if the statute of limitations did not bar the action, Rodriguez breached the insurance policy by failing to provide "prompt notice" as required under the policy. In Florida, this failure to provide prompt notice can justify a denial of coverage. The court found that waiting ten years constituted late notice, and, in Florida, also raised a presumption that Liberty Mutual was prejudiced by the delay, which Rodriguez did not even attempt to overcome. Even without the presumption, the court held that Liberty Mutual had shown prejudice because evidence showed that the house had been damaged again in 2013, which would have made it difficult for Liberty Mutual to investigate the previous 2005 damage at issue in this case. 

March 3, 2017 in Recent Cases, True Contracts | Permalink | Comments (0)