ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Sunday, February 19, 2017

The Contracts Case that No Judge Wants to Hear

In McNair v. Superior Court (6 Cal.App.5th 1227 (Cal. App. 2016), a college football coach brought suit against National Collegiate Athletic Association (“NCAA”) for, among other issues, interference with and breach of contract. That’s hardly unusual. What is unusual is the fact that the case has so far been assigned to … eight judges in five years!

In 2011, for example, NCAA moved t Maricopa-County-Judges
strike McNair’s complaint under the California anti-SLAPP statute. The trial court denied that motion. The NCAA appealed. The appellate court affirmed in “large part, but reversed a small portion.” The NCAA then filed a second peremptory challenge to the trial judge who had denied the anti-SLAPP motion. Without even giving McNair a chance to file an opposition but with full knowledge that an opposition was, in fact, forthcoming, the trial judge disqualified himself. McNair petitioned for a write of mandate contending that the trial court erred as a matter of law and asking the appellate court to issue a write directing the court to vacate its order accepting the postappeal peremptory challenge.

The appellate court this time pointed out that under California law, peremptory challenges to judges may only be filed following a “final judgment.” Cal. Civ. Proc. Code § 170.6(a)(2). A denial of an anti-SLAPP motion is not a final judgment, said the court. NCAA argued that McNair’s writ petition should be denied because, among other things, McNair had not suffered prejudice. However, the court found that McNair had indeed been prejudiced by the trial court’s “abrupt decision” to accept the NCAA’s peremptory challenge before he could oppose it. The court granted McNair’s petition. The case was thus sent back to … the same judge who didn’t want it. Not very reassuring to any of the parties or the general public’s faith in a fair legal system, I am sure. Neither is the fact that our system allows for so many judges in the same case in one single case. Too much and too little… this case definitely seems to be one of too much.

February 19, 2017 in Contract Profs, Sports | Permalink | Comments (0)

Thursday, February 16, 2017

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

Top-10 Scrolling

SSRN Top Downloads For SSRN Logo2
Contracts & Commercial Law eJournal

Rank Downloads Paper Title
1 751 Risk and Anxiety: A Theory of Data Breach Harms
Daniel J. Solove and Danielle Keats Citron
George Washington University Law School and University of Maryland Francis King Carey School of Law
2 304 Empirical Findings on International Arbitration: An Overview
Christopher R. Drahozal
University of Kansas School of Law
3 193 Rise of the Digital Regulator
Rory Van Loo
Boston University School of Law
4 163 Introduction to Contract, Status, and Fiduciary Law
Paul B. Miller and Andrew S. Gold
McGill University Faculty of Law and DePaul University College of Law
5 131 Interpreting Contracts via Surveys and Experiments
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
6 120 The New Sharing Economy: The Role of Property, Tort and Contract Law for Managing the Airbnb Model
Chad G. Marzen, Darren A. Prum and Robert J. Aalberts
Florida State University, Florida State University and University of Nevada, Las Vegas
7 117 Comparative Contract Law and Development: The Missing Link?
Mariana Pargendler
Fundação Getulio Vargas Law School at São Paulo
8 113 Contracting Over Privacy: Introduction
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
9 105 Calling on the CFPB for Help: Telling Stories and Consumer Protection
Pamela Foohey
Indiana University Maurer School of Law
10 102 What Brexit Means for the Interpretation and Drafting of Financial Contracts
Matthias Lehmann and Nihal Dsouza
University of Bonn and University of Bonn

 

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

Rank Downloads Paper Title
1 193 Rise of the Digital Regulator
Rory Van Loo
Boston University School of Law
2 163 Introduction to Contract, Status, and Fiduciary Law
Paul B. Miller and Andrew S. Gold
McGill University Faculty of Law and DePaul University College of Law
3 131 Interpreting Contracts via Surveys and Experiments
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
4 117 Comparative Contract Law and Development: The Missing Link?
Mariana Pargendler
Fundação Getulio Vargas Law School at São Paulo
5 113 Contracting Over Privacy: Introduction
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
6 103 History and Theory of Good Faith Performance in the United States
Steven J. Burton
University of Iowa - College of Law
7 100 Failures in Law Making: The Case of Arbitration Law in India
Badrinath Srinivasan
Independent
8 84 The Limits of Interpretation in the Law of Contract
Andrew Robertson
Melbourne Law School
9 82 The Hague Choice of Law Principles, CISG and PICC: A Hard Look at a Choice of Soft Law
Brooke Adele Marshall
Max Planck Institute for Comparative and International Private Law
10 71 The Deformation of Contract in the Information Society
Margaret Jane Radin
University of Michigan Law School

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

Sunday, February 12, 2017

The University of the Cumberlands Fights Its Former President over Consideration

 University of the Cumberlands Welcome Sign

A recent case out of the Eastern District of Kentucky, Taylor v. University of the Cumberlands, Civil No: 6:16-cv-109-GFVT (behind paywall), has lots of causes of action, including an interesting dispute over whether an agreement between the university and its former President and Chancellor was supported by consideration. 

While the decision itself, granting in part and denying in part the university's motion to dismiss, is behind a paywall, the dispute has been reported and described in the press. Dr. Taylor served as the President of the university for 35 years. He alleged that the school had agreed to pay him and his wife almost $400,000 annually after his retirement until they were both dead. The school disputed the validity of that agreement. The Taylors then brought several claims against the university, including breach of contract. 

On the motion to dismiss, the main contract argument involved consideration. The university argued that the contract was given in recognition of the Taylors' successful fundraising efforts and service to the school, which had already occurred. This, the university contended, meant it was past consideration and rendered the agreement unenforceable. 

The court acknowledged that the agreement discussed the Taylors' past behavior. However, the court also identified five current promises the Taylors made under the agreement: to continue to serve as president until he decided to retire; to accept the role of Chancellor until he decided to retire; to serve as an Ambassador of the university; to serve the university in any capacity requested; and to continue to fundraise for the university. Therefore, there was consideration. 

The university then argued that the agreement had no definite end date, which would mean it was terminable at will. However, the court noted that that rule applies to contracts that would otherwise run forever. In such a circumstance, the right to terminate at will can be considered appropriate. In this case, the contract would terminate once both of the Taylors were dead. No one knew when that date would be, but presumably the Taylors will not live forever and therefore the contract will not run forever. Therefore, the contract was not terminable at will, and the Taylors lived to fight another day on their breach of contract claim (although the court noted that there were significant disputes surrounding the execution of the agreement and its proper interpretation). 

February 12, 2017 in In the News, Labor Contracts, Recent Cases, Teaching, True Contracts | Permalink | Comments (0)

Thursday, February 9, 2017

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

Top10-Electric


SSRN Top Downloads For SSRN Logo2
Contracts & Commercial Law eJournal

Rank Downloads Paper Title
1 739 Risk and Anxiety: A Theory of Data Breach Harms
Daniel J. Solove and Danielle Keats Citron
George Washington University Law School and University of Maryland Francis King Carey School of Law
2 296 Empirical Findings on International Arbitration: An Overview
Christopher R. Drahozal
University of Kansas School of Law
3 169 Rise of the Digital Regulator
Rory Van Loo
Boston University School of Law
4 157 Introduction to Contract, Status, and Fiduciary Law
Paul B. Miller and Andrew S. Gold
McGill University Faculty of Law and DePaul University College of Law
5 110 The New Sharing Economy: The Role of Property, Tort and Contract Law for Managing the Airbnb Model
Chad G. Marzen, Darren A. Prum and Robert J. Aalberts
Florida State University, Florida State University and University of Nevada, Las Vegas
6 108 Comparative Contract Law and Development: The Missing Link?
Mariana Pargendler
Fundação Getulio Vargas Law School at São Paulo
7 97 Calling on the CFPB for Help: Telling Stories and Consumer Protection
Pamela Foohey
Indiana University Maurer School of Law
8 92 Interpreting Contracts via Surveys and Experiments
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
9 91 Contracting Over Privacy: Introduction
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
10 87 Behavioral Law & Economics Goes to Court: The Fundamental Flaws in the Behavioral Law & Economics Arguments Against No-Surcharge Laws
Todd J. Zywicki, Geoffrey A. Manne and Kristian Stout
George Mason University - Antonin Scalia Law School, Faculty, International Center for Law & Economics (ICLE) and International Center for Law and Economics

 

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

Rank Downloads Paper Title
1 169 Rise of the Digital Regulator
Rory Van Loo
Boston University School of Law
2 157 Introduction to Contract, Status, and Fiduciary Law
Paul B. Miller and Andrew S. Gold
McGill University Faculty of Law and DePaul University College of Law
3 108 Comparative Contract Law and Development: The Missing Link?
Mariana Pargendler
Fundação Getulio Vargas Law School at São Paulo
4 99 History and Theory of Good Faith Performance in the United States
Steven J. Burton
University of Iowa - College of Law
5 99 Failures in Law Making: The Case of Arbitration Law in India
Badrinath Srinivasan
Independent
6 92 Interpreting Contracts via Surveys and Experiments
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
7 91 Contracting Over Privacy: Introduction
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
8 79 The Limits of Interpretation in the Law of Contract
Andrew Robertson
Melbourne Law School
9 77 The Hague Choice of Law Principles, CISG and PICC: A Hard Look at a Choice of Soft Law
Brooke Adele Marshall
Max Planck Institute for Comparative and International Private Law
10 66 Unbundling Efficient Breach: An Experiment
Maria Bigoni, Stefania Bortolotti, Francesco Parisi and Ariel Porat
University of Bologna - Department of Economics, University of Cologne - Faculty of Management, Economics and Social Sciences, University of Minnesota - Law School and Tel Aviv University

 

February 9, 2017 in Recent Scholarship | Permalink

Tuesday, February 7, 2017

Wrongful Termination of Law Professors

Our colleagues at The Faculty Lounge wrote an interesting blog post about the alleged wrongful termination of half of Charlotte Law School's faculty after the recent demise of that particular school.  See the article here.

 

February 7, 2017 | Permalink

Monday, February 6, 2017

Federal Law Bans Gag Clauses

We’ve written about non-disparagement or “gag” clauses in wrap contracts on this blog in the past.  These clauses prohibit consumers from writing negative reviews about a company and typically impose a penalty or fee if the consumer does so.  California already has a law which prohibits them and now there’s a federal law.  The Consumer Review Fairness Act (CRFA) prohibits gag clauses and intellectual property transfer clauses in consumer form contracts.  (The prohibition on IP transfers is intended to prevent companies from using the DMCA takedown provisions to get posted content removed).  “Form contract” is defined as a contract with standardized terms “imposed on an individual without a meaningful opportunity for such individual to negotiate the standardized terms.”  Form contract does not include an employment or independent contractor contract.  The CRFA permits state attorney generals to bring a civil action on behalf of state residents.  The Federal Trade Commission may also institute action or intervene in a pending action.    

The law goes into effect for on March 14, 2017.

February 6, 2017 in Current Affairs, Legislation, Web/Tech | Permalink | Comments (0)

Sunday, February 5, 2017

A Holiday Decoration Lawsuit!

The holiday season feels like it happened so long ago, but, if you make yourself think way back to that distant era of our history, you may recall that suddenly spotlights that broadcast dancing snowflakes or other festive decorations onto houses were everywhere. 

Now they're in court, too. A case recently removed to the District of New Jersey, Closeout Surplus & Salvage CSS, Inc. v. Sears Outlet, LLC, Docket No. 2:17-cv-00104-KSH-CLW (behind paywall), involves the "Glow Bright" version of these lights. Here's a video of Glow Bright laser light show, to refresh your recollection and also maybe revive a little holiday spirit. 

The plaintiff, Closeout, alleged that it had an exclusive right to sell the Glow Bright with tripod and remote and began selling and advertising the product online. The plaintiff alleges that Sears, the defendant, appropriated the plaintiff's advertising and began advertising that it, too, was selling the Glow Bright with tripod and remote. However, the plaintiff alleges that only it had the right, via contract, to sell the Glow Bright with tripod and remote. It appears from the allegations that Sears was only selling the Glow Bright alone but, in appropriating plaintiff's advertisements, it looked to consumers like Sears was selling the Glow Bright with the tripod and remote.  

The plaintiff has therefore sued Sears for tortious interference with contractual relationship and/or prospective economic benefits and unfair trade practices and unfair competition. The suit was just removed to federal court at the beginning of January and Sears has not yet answered the complaint, but I'll keep an eye on it to give you the latest updates in holiday decoration law. 

February 5, 2017 in Film Clips, Recent Cases, True Contracts, Web/Tech | Permalink | Comments (0)

Saturday, February 4, 2017

Providing "Retirement Benefits" Isn't the Same as Providing Health Insurance Coverage

A recent case out of New York, Wilson v. New York State Thruway Authority, 931-16, deals with the collective bargaining agreement between the New York State Thruway Authority and its retirees over whether the Thruway Authority was contractually bound to provide health insurance coverage to the retirees at no cost. The retirees had enjoyed free health insurance until April 1, 2016, when the Thruway Authority required them to start paying six percent of their premiums. The retirees wanted to introduce evidence that the parties understood that the Thruway Authority was going to pay all of their health insurance premiums, pursuant to the collective bargaining agreement. 

The problem was that the contract between the parties contained no such obligation and the court found that the contract was unambiguous on its face. All that the contract stated was that the Thruway Authority should provide "retirement benefits" made available by New York statutes the contract went on to enumerate. None of those statutes contained provisions requiring the Thruway Authority to provide health insurance coverage. In fact, health care benefits were governed by different New York statutes, not the ones enumerated, and New York state courts had long pointed out that "retirement benefits" and "health care benefits" were two different things governed by two different statutes under New York law. Given that, the court concluded that "retirement benefits" was an unambiguous term of art that the parties knew the definition of, given their particular citation of New York statutes to define it. The court refused to allow extrinsic evidence in the face of this lack of ambiguity. If the retirees had wished the Thruway Authority to pay for their health insurance premiums, they should have included an express provision saying that in the collective bargaining agreement, as many other collective bargaining agreements construed under New York law had done. 

This decision is fairly straightforward as a matter of the law: finding that the term was unambiguous (and indeed basically defined within the document through the statutory citations) and so therefore extrinsic evidence was unnecessary to decide the breach of contract action (the court here concluded that, with no obligation to pay the health insurance premiums, the Thruway Authority had not breached the contract). However, it is a legal dispute that we might see more and more of, as deals with retirees are reevaluated and altered in an age of shrinking budgets. 

February 4, 2017 in Commentary, Government Contracting, Labor Contracts, Legislation, Recent Cases, True Contracts | Permalink | Comments (0)

Friday, February 3, 2017

No Class Actions For Investment Fraud Claims in the Eighth Circuit

In Holtz v. JPMorgan Chase Bank (the “Bank”), Judge Easterbook recently held that litigants may pursue state law contracts or fiduciary duty claims in an individualized manner, but not in the form of class action law suits under the Securities Litigation Uniform Standards Act of 1998 (“the Litigation Act,” 15 U.S.C. § 78bb (F)).

In the case, the plaintiffs alleged that the Bank gave its employees incentives to place clients’ money on the Bank’s own mutual funds, even when those funds have higher fees or lower returns than competing funds sponsored by third parties. The Bank allegedly failed to inform the clients of this conflict of interest or lied about it. Plaintiffs also argued that banks have fiduciary duty that they simply cannot contract out of under state contract law. J. Easterbrook recognizes that contract claims survive federal statutory pre-emption standards. Here, the Litigation Act is on point. However, to plead misrepresentations or omissions under the Act, the contract claims must not be “material.” (An omission is “material” when a reasonable investor would deem it significant to an investment decision.) In other words, the gravamen of litigation under the Act must, it seems, be statutory, and not purely contractual, issues. If the contractual issues are material, they must be litigated in the form of state law claims.

Per Easterbrook, “there are plenty of ways to bring wrongdoers to account – but a class action that springs from lies or material omissions in connection with federally regulated securities is not among them … If [the plaintiff] wants to pursue a contract or fiduciary-duty claim under state law, she has only to proceed in the usual way: one litigant against another.”

Another win in the “war” against class actions, it seems.

February 3, 2017 in Contract Profs, Current Affairs, Miscellaneous, True Contracts | Permalink | Comments (0)

Consent to Face Scanning

In a recent case, the video game publisher 2K recently won the right to collect and store gamers biometric data (in this case, face scans) indefinitely.  The face scanning technology is used in at least two of its NBA series games to allow gamers to create "personalized virtual basketball players". 

Plaintiffs agreed to allow them to do so when they agreed to the company’s terms and conditions.  The plaintiffs didn’t dispute that they had agreed to the terms or that they had consented to having their faces scanned; their objection was that they did not know that the scans would be stored “indefinitely” and that 2K could share the biometric data.  The court ruled that there was no harm under the Illinois Biometric Information Privacy Act.  The focus was not on contractual assent to the terms and conditions.  But this made me wonder, given how unobtrusive most terms and conditions are, and how easy it is to "manifest assent," shouldn't there be more stringent assent requirements when it comes to consent with respect to certain terms (such as the permanent storage and sharing of biometric data)?  Isn't it time we moved past the notion of blanket assent?

As more companies move toward biometric data for a wide range of reasons, we’re likely to see more problems with too-easy consent and wrap contracts.

February 3, 2017 in Commentary, Current Affairs, Miscellaneous, Web/Tech | Permalink | Comments (0)

Thursday, February 2, 2017

Weekly Top Ten SSRN Contracts Downloads (February 2, 2017)

Top 10 Groundhog Day

SSRN Top Downloads For SSRN Logo2
Contracts & Commercial Law eJournal

Rank Downloads Paper Title
1 700 Risk and Anxiety: A Theory of Data Breach Harms
Daniel J. Solove and Danielle Keats Citron
George Washington University Law School and University of Maryland Francis King Carey School of Law
2 291 Empirical Findings on International Arbitration: An Overview
Christopher R. Drahozal
University of Kansas School of Law
3 160 Contractual Estoppel and the Misrepresentation Act 1967
Richard Hooley
University of Cambridge - Faculty of Law
4 152 Introduction to Contract, Status, and Fiduciary Law
Paul B. Miller and Andrew S. Gold
McGill University Faculty of Law and DePaul University College of Law
5 151 Remedies
Ariel Porat
Tel Aviv University
6 112 Rise of the Digital Regulator
Rory Van Loo
Boston University School of Law
7 107 Excessive Contractual Penalties in Football
Despina Mavromati
Court of Arbitration for Sport
8 103 The New Sharing Economy: The Role of Property, Tort and Contract Law for Managing the Airbnb Model
Chad G. Marzen, Darren A. Prum and Robert J. Aalberts
Florida State University, Florida State University and University of Nevada, Las Vegas
9 88 Calling on the CFPB for Help: Telling Stories and Consumer Protection
Pamela Foohey
Indiana University Maurer School of Law
10 87 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

Rank Downloads Paper Title
1 160 Contractual Estoppel and the Misrepresentation Act 1967
Richard Hooley
University of Cambridge - Faculty of Law
2 152 Introduction to Contract, Status, and Fiduciary Law
Paul B. Miller and Andrew S. Gold
McGill University Faculty of Law and DePaul University College of Law
3 151 Remedies
Ariel Porat
Tel Aviv University
4 112 Rise of the Digital Regulator
Rory Van Loo
Boston University School of Law
5 107 Excessive Contractual Penalties in Football
Despina Mavromati
Court of Arbitration for Sport
6 97 Failures in Law Making: The Case of Arbitration Law in India
Badrinath Srinivasan
Independent
7 96 History and Theory of Good Faith Performance in the United States
Steven J. Burton
University of Iowa - College of Law
8 87 Comparative Contract Law and Development: The Missing Link?
Mariana Pargendler
Fundação Getulio Vargas Law School at São Paulo
9 82 Contracting Over Privacy: Introduction
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
10 75 The Limits of Interpretation in the Law of Contract
Andrew Robertson
Melbourne Law School

 

February 2, 2017 in Recent Scholarship | Permalink

Friday, January 27, 2017

Reminder: January 31 Deadline for KCON XII Proposals Looms Tuesday

(H/T Dov Waisman. Info reposted from January 19 due to the conference proposal deadline--which is this coming Tuesday! - MEB)

KCON12-Logo
Dear Colleagues,

Happy New Year!  The 12th Annual International Conference on Contracts (KCON XII) is scheduled to begin on Friday, February 24th.  Here in Los Angeles, we are excitedly preparing for the conference and wanted to write with a couple of reminders.

First, we are still accepting proposals for presentations and panels.  The final deadline for submitting a proposal is Tuesday, January 31st.  We have received many terrific proposals so far and have only a small number of slots left.  So if you wish to submit, please do so at your earliest convenience, and in all events by the 31st.  As a reminder, in addition to traditional panel presentations, this year we are inviting short, ten-minute talks on a number of special topics, all of which are listed in the Call for Participation.  [Those CFP topics are

w Celebrating Deborah Post (the receiver of the lifetime achievement award)

w Teaching Tricks for Tough Topics

w Getting Better With Age: The History of Specific Contract Doctrines

w Hot from the Oven: Recent Cases or Legislation of Interest

w Outrageous Contracts

w Ignored Issues in Contract Law

 - Ed.]

If you have already submitted a proposal (thank you!), be sure to register for the conference and book your hotel room.

Also, if you have not done so already, please be sure to register for the conference and book reservations at the conference hotel as soon as possible. Conference registration and hotel information is available here. You should book your room at the Omni Los Angeles Hotel while discounted rooms in the conference block are still available.  Only a limited number of discounted rooms are available, so act fast!  The final deadline for booking a room at the Omni at the discounted rate is Sunday, February 12, but we expect all discounted rooms to be booked well before then.

That’s it for now.  We’ll be in touch with more details early next month.  If you have any questions or concerns about KCON XII, please contact Danielle Hart, Hila Keren, and/or myself at kcon12@swlaw.edu.  We look forward to seeing everyone in L.A. on February 24th and 25th!

Best,

Dov Waisman

Associate Professor of Law

Southwestern Law School

January 27, 2017 in Conferences | Permalink

This Is a Case About Copyright, Forum Selection Clauses, and Porn

Here's a case about porn. 

I thought all of us could use a brief break from the news, and porn always raises such interesting legal issues. This recent case out of the District of Arizona, AMA Multimedia LLC v. Sagan Limited, No. CV-16-01269-PHX-DGC, deals with the application of a forum selection clause to a copyright infringement case. You can read the complaint from the case here, and a couple of earlier orders from the case here and here. (Thanks to Eric Goldman for passing along the order link!)

The plaintiff, AMA, is a producer of pornographic material who entered into a contract with Porn.com, owned and operated by defendants (nice straightforward--and I would imagine valuable--URL there). Under the contract, AMA granted a license for the use of certain content. AMA became aware that Porn.com was displaying many copyrighted works which AMA had not granted a license to and sued for copyright infringement. The defendants responded that this lawsuit is governed by the contract between them, which has a forum selection clause requiring legal actions "arising out of or relating to" the contract to take place in Barbados. 

AMA's main argument was that the forum selection clause didn't apply because this is a case about copyright infringement, not about any issues arising from the contract. However, the court pointed out that the contract was entirely about the proper use of copyrighted works. AMA's copyright infringement case was really a case about the defendants using works in a way that violated the contract between them. The court would necessarily have to interpret the contract to decide if the defendants' behavior was in fact infringing. Therefore, the forum selection clause applied.

AMA next tried to argue that the forum selection clause should be found unenforceable because it would force AMA to litigate in a jurisdiction where discovery would be difficult and costly, and was therefore designed to discourage AMA from bringing suit at all. However, the court found that AMA provided no evidence for its assertions regarding litigation in Barbados being difficult and expensive, and that the mere inconvenience of the jurisdiction was not enough to negate the forum selection clause. 

January 27, 2017 in Recent Cases, True Contracts, Web/Tech | Permalink | Comments (0)

Thursday, January 26, 2017

Weekly Top Ten SSRN Contracts Downloads (January 26, 2017)

Top-10 Glass

SSRN Top Downloads For SSRN Logo2
Contracts & Commercial Law eJournal

1 655 Risk and Anxiety: A Theory of Data Breach Harms
Daniel J. Solove and Danielle Keats Citron
George Washington University Law School and University of Maryland Francis King Carey School of Law
2 272 Empirical Findings on International Arbitration: An Overview
Christopher R. Drahozal
University of Kansas School of Law
3 185 Drafting for Dispute Resolution
John M. Newman
University of Memphis - Cecil C. Humphreys School of Law
4 157 The Corporation as Courthouse
Rory Van Loo
Boston University School of Law
5 155 The Commercial Law of Bitcoin and Blocktrain Transactions
Stephen M. McJohn and Ian McJohn
Suffolk University Law School and Independent
6 143 Remedies
Ariel Porat
Tel Aviv University
7 143 Introduction to Contract, Status, and Fiduciary Law
Paul B. Miller and Andrew S. Gold
McGill University Faculty of Law and DePaul University College of Law
8 139 Contractual Estoppel and the Misrepresentation Act 1967
Richard Hooley
University of Cambridge - Faculty of Law
9 108 The New Lex Mercatoria: An Emerging Challenge to Legal Systems in Cross-Border Transactions
Jan H. Hendrik Dalhuisen
King's College London
10 106 Excessive Contractual Penalties in Football
Despina Mavromati
Court of Arbitration for Sport

 

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

Rank Downloads Paper Title
1 185 Drafting for Dispute Resolution
John M. Newman
University of Memphis - Cecil C. Humphreys School of Law
2 157 The Corporation as Courthouse
Rory Van Loo
Boston University School of Law
3 143 Remedies
Ariel Porat
Tel Aviv University
4 143 Introduction to Contract, Status, and Fiduciary Law
Paul B. Miller and Andrew S. Gold
McGill University Faculty of Law and DePaul University College of Law
5 139 Contractual Estoppel and the Misrepresentation Act 1967
Richard Hooley
University of Cambridge - Faculty of Law
6 108 The New Lex Mercatoria: An Emerging Challenge to Legal Systems in Cross-Border Transactions
Jan H. Hendrik Dalhuisen
King's College London
7 106 Excessive Contractual Penalties in Football
Despina Mavromati
Court of Arbitration for Sport
8 91 Failures in Law Making: The Case of Arbitration Law in India
Badrinath Srinivasan
Independent
9 68 The Hague Choice of Law Principles, CISG and PICC: A Hard Look at a Choice of Soft Law
Brooke Adele Marshall
Max Planck Institute for Comparative and International Private Law
10 66 The Limits of Interpretation in the Law of Contract
Andrew Robertson
Melbourne Law School

 

January 26, 2017 in Recent Scholarship | Permalink | Comments (0)

Wednesday, January 25, 2017

No Substitution of Arbitrators by Courts when One Institution Becomes Legally Unavailable

There is split authority on the issue of whether courts can appoint a substitute for an arbitral institution that becomes unavailable after the execution of an arbitration agreement. In the Second Circuit, no such substitution is possible.

In the case, Deborah Moss applied for three payday loans through SFS, an online lender. SFS relied on First Premier Bank serving as the “middleman” in order to debit Moss’ account. The loan application documents with SPS included an arbitration clause listing the National Arbitration Forum (“NAF”) as the arbitral institution.

After receiving the three loans, Moss filed a class action suit against First Premier Bank and Bay Cities Bank alleging violations under the RICO Act by “facilitate[ing] high-interest payday loans that have been outlawed in some states.” The banks moved to compel arbitration arguing they were entitled to enforce the terms that Moss agreed to when she applied for the loans. The district court agreed and granted the motion.

Moss then sent a letter to the National Arbitration Forum (“NAF”) indicating her intent to proceed with arbitration. NAF refused the case stating “it was unable to accept Moss’s dispute pursuant to a consent judgment” it had entered into with the Minnesota Attorney General pursuant to which NAF would no longer accept consumer arbitrations such as Moss’s.

Moss then tried to vacate the district court’s motion to compel arbitration, arguing that she could not arbitrate her claims at all since NAF declined her case. The district court granted this motion, finding that the court could not appoint a substitute arbitrator because the parties had specifically designated NAF and because there was no “lapse in time in the naming of the arbitrator or … some other mechanical breakdown in the arbitrator selection process” under Section 5 of the FAA. The banks appealed, seeking to have the appellate court compel Moss to arbitrate before a different arbitrator.

The Second Circuit found that because the parties had designated an “exclusive arbitral forum, the district court cannot circumvent the intent of the parties nor can it appoint a substitute arbitrator.” Therefore, the Second Circuit held that the district court property declined to compel Moss to arbitrate in a “forum to which she did not agree.”

The case is Moss v. First Premier Bank, 15-2513 (2d Cir. 2016).

January 25, 2017 in Current Affairs, Recent Cases, True Contracts | Permalink | Comments (0)

Equitable Estoppel Saves Statute of Frauds Issue in an Agreement Between Father and Daughter

This is a point I teach in class and I was happy to see it illustrated in a recent case out of Connecticut, Fitzgerald Management, LLC v. Fitzgerald, FBTCV166056848S (behind paywall). In the case, the defendant alleged that her father had promised multiple times to give her title to her residence if she took care of her grandmother and maintained other properties. Unfortunately, this alleged agreement between the defendant and her father was entirely oral and never committed to paper, in contravention of the statute of frauds admonition that contracts regarding real estate be in writing. 

Whenever I teach equitable estoppel in connection with the statute of frauds, I note that one of the situations where you see it come up most often is in family situations, where people might not think to enter into formal written contracts or, if they think about it, might be reluctant to insist upon it because it might be perceived as implying a lack of trust. This situation, about an agreement between a father and a daughter, fits that mold. The daughter alleged that, in reliance on her father's promise, she performed substantial improvements on the property at issue. The court found that this reliance on the daughter's part was reasonable. The daughter took care of her grandmother and maintained the requested properties, thus fulfilling her part of the bargain. At this stage of the litigation, the court found that this could entitle the daughter to equitable estoppel preventing the invocation of the statute of frauds against the agreement with her father. 

January 25, 2017 in Commentary, Recent Cases, True Contracts | Permalink | Comments (0)

Tuesday, January 24, 2017

Misunderstanding a Question Won't Save You If the Question Wasn't Ambiguous

A recent case out of the Middle District of Georgia, Great Lakes Insurance SE v. Queen, Case No. 3:15-CV-123 (CDL) (behind paywall), serves as an example of a case where the insured claimed the insurance policy at issue was ambiguous and the court disagreed.

In the case, Queen, the insured, owned a home with several outbuildings. While Queen's home and outbuildings were on an eight-acre parcel of land, Queen answered "no" to the question on the Great Lakes homeowners' insurance policy that asked if the property to be insured was on more than five acres. When one of Queen's outbuildings was destroyed in a fire, he sought to recover under the insurance policy. Great Lakes, however, upon learning that Queen's parcel of land encompassed eight acres, denied coverage, alleging that it would not have issued the policy had Queen not misrepresented the size of the parcel of the land. 

Queen argued that he had not made a misrepresentation on the insurance application. He argued that, while the parcel of land he owned totaled eight acres, it had been divided into four tracts, each of which was less than five acres. Queen's home and outbuildings were located on a particular "tract" of the larger parcel that was smaller than five acres, and so Queen had answered "no" to the question. 

The court conceded that Queen may have misunderstood the question on the insurance policy, but asserted that the question was nevertheless not ambiguous. The question asked if "the property" to be insured was situated on more than five acres. In this case, Queen provided an address as "the property" to be insured, and the amount of property associated with that address was eight acres, as even Queen conceded. Queen may have subjectively intended only to insure a particular tract of land inside that parcel, and may have had no intention to mislead Great Lakes, but that didn't change the court's conclusion that it was unambiguous--and in fact undisputed--that the property to be insured--the address provided to Great Lakes by Queen--was situated on more than five acres.

Queen next tried to argue that his misrepresentation was not material. Great Lakes submitted an affidavit that it would not have insured the property had it known that it was situated on more than five acres. The court questioned the business justification for this, asserting that the affidavit provided no explanation for how Great Lakes's risk would have increased, given that Queen's house and outbuildings sat on less than five acres. However, Queen provided no evidence rebutting Great Lakes's affidavit. Without any contrary evidence, the court had no choice but to accept Great Lakes's affidavit at face value and conclude that there was no genuine fact dispute on the question of the materiality of Queen's misrepresentation.

In the end, the court found that Great Lakes was entitled to rescind the insurance policy and granted Great Lakes summary judgment. You get the feeling that the court felt badly for Queen but also felt that it could not reach any other conclusion. 

January 24, 2017 in Commentary, Recent Cases, True Contracts | Permalink | Comments (0)

Sunday, January 22, 2017

Apollo 11 Moon Rock Bag Stolen, Sold to BFPV at Auction, Now Government Wants it Back

In times with enough serious and often depressing news, I thought I would bring you this little neat story (with profuse apologies to everyone, including my co-bloggers, for my virtual absence for a few months):

An Apollo 11 bag used to protect moon rocks samples was stolen by Max Ary, a former curator convicted in 2006 of stealing and selling space artifacts that belonged to the Cosmosphere space museum in Hutchinson, Kansas. Mr. Ary subsequently served two years in prison and was sentenced to pay more than $132,000 in restitution. Space artifacts found in his home, including the Apollo 11 bag, were forfeited to meet that debt. However, the Apollo 11 bag was incorrectly identified as Ary's and subsequently sold to Nancy Carlson for $995 in February 2015 at a Texas auction held on behalf of the U.S. Marshals Service. MoonRockBack

The government petitioned the court to reverse the sale and return the lunar sample bag to NASA, alleging that due to a mix up in inventory lists and item numbers, the lunar sample bag that was the subject of the April 2014 forfeiture order was mistakenly thought to be a different bag and that no one, including the United States, realized at the time of forfeiture that this bag was used on Apollo 11. The government cited cases where federal courts vacated or amended forfeiture orders, including where inadequate notice was provided to a property owner, as a justification for the bag's return to NASA.

Judge J. Thomas Marten ruled in the U.S. District Court for Kansas that Ms. Carlsen obtained the title to the historic artifact as "a good faith purchaser, in a sale conducted according to law." With her title to the bag now ordered by the Kansas court, Carlson needs to file a motion in the U.S. District Court for Texas for its return from NASA's Johnson Space Center in Houston. However, “[t]he importance and desirability of the [lunar sample] bag stems solely and directly from the efforts of the men and women of NASA, whose amazing technical achievements, skill and courage in landing astronauts on the moon and returning them safely [to Earth] have not been replicated in the almost half a century since the Apollo 11 landing," the judge wrote … Perhaps that fact, when reconsidered by the parties, will allow them to amicably resolve the dispute in a way that recognizes both of their legitimate interests," J. Marten wrote.

H/t to Professor Miriam Cherry for bringing this story to my attention.

January 22, 2017 in Commentary, Contract Profs, Current Affairs, Famous Cases, Government Contracting, In the News, Miscellaneous, Science | Permalink | Comments (0)

Thursday, January 19, 2017

The Defendant's "Brain Fog" May Have Made Him Incompetent to Enter into a Contract

I don't come across a lot of cases revolving around competence, but here's a recent one out of New York, Gray v. Jung, No. 62996 (behind paywall). The case, at the summary judgment stage, revolves around plaintiff's seeking of specific performance on a real estate contract. The court found that the plaintiff met his burden regarding the appropriateness of specific performance as a remedy, but the defendant raised sufficient evidence of lack of competency to defeat the plaintiff's motion. The defendant submitted "a considerable amount of medical records" indicating that he suffered from "brain fog" that prevented him from fully understanding the real estate contract at issue. Plaintiff had his own evidence that the defendant was indeed competent to enter into the contract and that his subsequent regret at entering into the contract shouldn't render it unenforceable. However, the court found that there was a genuine dispute of material fact on the question of the defendant's competence that defeated summary judgment. 

January 19, 2017 in Recent Cases, True Contracts | Permalink | Comments (1)

KCON XII Reminder: Conference Proposals Due by January 31

H/T Dov Waisman from the Contracts Prof Listserv for this post:

KCON12-Logo

Dear Colleagues,

Happy New Year!  The 12th Annual International Conference on Contracts (KCON XII) is scheduled to begin on Friday, February 24th.  Here in Los Angeles, we are excitedly preparing for the conference and wanted to write with a couple of reminders.

First, we are still accepting proposals for presentations and panels.  The final deadline for submitting a proposal is Tuesday, January 31st.  We have received many terrific proposals so far and have only a small number of slots left.  So if you wish to submit, please do so at your earliest convenience, and in all events by the 31st.  As a reminder, in addition to traditional panel presentations, this year we are inviting short, ten-minute talks on a number of special topics, all of which are listed in the attached Call for Participation.  If you have already submitted a proposal (thank you!), be sure to register for the conference and book your hotel room.

Also, if you have not done so already, please be sure to register for the conference and book reservations at the conference hotel as soon as possible. Conference registration and hotel information is available here. You should book your room at the Omni Los Angeles Hotel while discounted rooms in the conference block are still available.  Only a limited number of discounted rooms are available, so act fast!  The final deadline for booking a room at the Omni at the discounted rate is Sunday, February 12, but we expect all discounted rooms to be booked well before then.

That’s it for now.  We’ll be in touch with more details early next month.  If you have any questions or concerns about KCON XII, please contact Danielle Hart, Hila Keren, and/or myself at kcon12@swlaw.edu.  We look forward to seeing everyone in L.A. on February 24th and 25th!

Best,

Dov Waisman

Associate Professor of Law

Southwestern Law School

January 19, 2017 in Conferences | Permalink | Comments (0)