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Valparaiso Univ. Law School

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Monday, August 3, 2015

Weekly News Roundup

Donald_Trump_March_2015In the continuing fallout from Donald Trump's Presidential candidacy (photo right by Michael Vadon via Wikimedia Commons), Trump is now suing celebrity chef Jose Andres.  According to the Washington Times, Andres was to open a restaurant in Washington, DC's old post office building, which will soon be the Trump International Hotel.  He now claims that Trump's anti-immigrant comments make it impossible for him to do so.  It seems that Trump's attorneys' response is to claim that his views on immigration were well known and consistent and should not have come as a surprise to Mr. Andres.  The lawsuit seeks $10 million in damages.

ChristieIn other Presidential candidate news, three unions representing New Jersey public employees are suing the state for breach of contract.  The suit arises out of Governor Chris Christie's efforts to address a budget shortfall by cutting contributions to the state pension fund.  Excellent coverage of this suit and its background can be found in the Winnipeg Free Press here.

The Fay Observer reports that Intersal, a company that discovered the wreck of Blackbeard's ship of the coast of North Carolina, is suing North Carolina.  The suit alleges that the state has breached a contract pertaining to the use photos and video relating to the wreck and seeks $8.2 million in damages.

August 3, 2015 in Celebrity Contracts, Government Contracting, In the News, Recent Cases | Permalink | Comments (0)

Sunday, August 2, 2015

The Legal War on Traditional Cable Companies Continues

Remember Aereo, the company trying to provide select TV programs and movies using alternatives to traditional cable TV programming?  That company went bankrupt after a U.S.  Supreme Court ruling last year.

A federal court in Los Angeles just ruled that online TV provider FilmOn X should be allowed to transmit the programs of the nation’s large broadcasters such as ABC, CBS and Fox online, albeit not on TV screens.  See Fox Television Stations, Inc. v. FilmOn X, LLC, in the U.S. District Court for the Central District of California, No. 12-cv-6921. Of course, the traditional broadcasters have been aggressively opposing such services and the litigation so far.  Recognizing the huge commercial consequences of his ruling, Judge Wu certified the case for an immediate appeal to the Ninth Circuit Court of Appeals.

Said FilmOn’s lawyer in an interview: “The broadcasters have been trying to keep their foot on the throat of innovation.  The court’s decision … is a win for technology and the American public.” 

The ultimate outcome will, of course, to a very large extent or perhaps exclusively depend on an interpretation of the Copyright Act and not so much contracts law as such, but the case is still a promising step in the direction of allowing consumers to enter into contracts for only what they actually need or want and not, at bottom, what giant companies want to charge consumers to protect income streams obtained through yesteryear’s business methods.  Currently, many companies still “bundle” TV packages instead of allowing customers to select individual stations.  In an increasingly busy world, this does not seem to make sense anymore.  Time will tell what happens in this area after the appeal to the Ninth Circuit and other developments.  Personally, I have no doubt that traditional broadcasting companies will have to give in to new purchasing trends or lose their positions on the market.

August 2, 2015 in Current Affairs, E-commerce, Famous Cases, In the News, Legislation, Television, Web/Tech | Permalink | Comments (0)

Thursday, July 30, 2015

Contracts for Trophy Hunting A Bad Idea

I earlier blogged on an American TV personality's contract to hunt and kill one of the most highly endangered species on earth: a black rhino.  That hunt has now been completed at a price tag of $350,000.  The asserted reasoning for wanting to undertake the hunt: the money would allegedly help the species conservation overall and the local population. Studies, however, show that only 3-5% of that money goes to the local population. Some experts believe that the money could be much better spent for both the local population and the species via, for example, tourism to see the animals alive.  This brings in three to fifteen times of what is created through so-called "trophy hunting."

This past week, the world community was again outraged over yet another American's hunt - this time through a contract with a local rancher and professional assistant hunter - of Cecil the Lion.  The price? A mere $50,000 or so.  This case has criminal aspects as well since the landowner involved did not have a permit to kill a lion. The hunter previously served a year of probation over false statements made in connection with his hunting methods: bow and arrow.

This is also how the locally famous and collared Cecil - a study subject of Oxford University - was initially hunted down, lured by bait on a car to leave a local national park, shot, but not killed, by Minnesota dentist Walter Palmer, and eventually shot with a gun no less than 40 hours after being wounded by Palmer.

Comments by famous and regular people alike have  been posted widely since then.  For example, said Sharon Osbourne: ""I hope that #WalterPalmer loses his home, his practice & his money. He has already lost his soul."

I recognize that some people - including some experts - argue for the continued allowance of this kind of hunting. Others believe it is a very bad idea for many biological, criminal, ethical, and other reasons to allow this practice.  If you are interested in signing a petition to Zimbabwe Robert Mugabe to stop issuing hunting permits to kill endangered animals, click here.  It will take you less than 60 seconds. 

 

July 30, 2015 in Celebrity Contracts, Commentary, Current Affairs, Famous Cases, In the News, Legislation, Science, Travel, True Contracts | Permalink | Comments (0)

Wednesday, July 29, 2015

Oxford Conference on General Principles of Law

Institute of European and Comparative Law
 
Celebrating 20 Years of the Institute of European and Comparative Law
 
Friday 25-26 September 2015
 
St Anne's College Oxford and the Mathematical Institute, University of Oxford
 
 
‘General principles of law’ are one of the most visible areas of intersection between EU law and comparative law: as long as they are understood as ‘the general principles common to the laws of the Member States’ (Art 340(2) TFEU) their fleshing out requires careful comparative preparatory work. True, more often than not, the general principles of EU law were not developed on the basis of thorough and textbook style analysis. This does not make it less interesting to look at the interaction of EU law and comparative law in this particular field. Those working together in elaborating general principles of EU law tend to be responsive to input from national laws, and the laws of the Member States have no choice but to be responsive to the general principles developed at EU level.
 
It is the purpose of this conference to look at this particular interaction from the perspectives of EU law and comparative law alike. Leading scholars and practitioners from both fields will come together to discuss the most recent developments in the field.
 
The conference will be held on the occasion of the twentieth anniversary of the Oxford Institute. It will bring together current and former members, visitors and friends of the Institute, as well as those who might belong to one of these categories in the future. Celebration will be an essential part of the proceedings!
 
Further information, including the full programme and registration details can be found here.

July 29, 2015 in Conferences | Permalink

Tuesday, July 28, 2015

Weekly Top Tens from the Social Science Research Network

SSRNSSRN Top Downloads For Contracts & Commercial Law eJournal
RECENT TOP PAPERS 

RankDownloadsPaper Title
1 189 The Law, Economics, and Psychology of Manipulation 
Eric A. Posner 
University of Chicago - Law School 
2 155 After the Revolution: An Empirical Study of Consumer Arbitration 
David Horton and Andrea Cann Chandrasekher 
University of California, Davis - School of Law and University of California, Davis - School of Law 
3 118 Controlling Shareholder's Long-Term Commitment Through Private Benefits of Control 
Albert H. Choi 
University of Virginia School of Law 
4 115 The Commission's E-Commerce Sector Inquiry – Analysis of Legal Issues and Suggested Practical Approach 
Lars KjølbyeAlessio Aresu and Sophia Stephanou 
Latham & Watkins LLP, Latham & Watkins LLP and Latham & Watkins LLP 
5 104 Common Law Values: The Role of Party Autonomy in Private Law 
Sarah Worthington 
University of Cambridge - Faculty of Law 
6 100 Lexical Opportunism and the Limits of Contract Theory 
Jeffrey M. Lipshaw 
Suffolk University Law School 
7 98 Legal Aspects of Subordinated Debt Instruments 
Vinod Kothari 
Visiting Faculty, Indian Institute of Management 
8 94 Reinterpreting the Status-Contract Divide: The Case of Fiduciaries 
Hanoch Dagan and Elizabeth S. Scott 
Tel Aviv University - Buchmann Faculty of Law and Columbia University - Law School 
9 87 The Laws of Asian International Business Transactions 
Gilles Cuniberti 
Universite du Luxembourg - Faculty of Law, Economics and Finance 
10 72 Overcoming the Knowledge Problem in Behavioral Law and Economics: Uncertainty, Decision Theory, and Autonomy 
Philipp Hacker 
Humboldt University of Berlin 

SSRN Top Downloads For LSN: Contracts (Topic)
RECENT TOP PAPERS 

RankDownloadsPaper Title
1 189 The Law, Economics, and Psychology of Manipulation 
Eric A. Posner 
University of Chicago - Law School 
2 155 After the Revolution: An Empirical Study of Consumer Arbitration 
David Horton and Andrea Cann Chandrasekher 
University of California, Davis - School of Law and University of California, Davis - School of Law 
3 115 The Commission's E-Commerce Sector Inquiry – Analysis of Legal Issues and Suggested Practical Approach 
Lars KjølbyeAlessio Aresu and Sophia Stephanou 
Latham & Watkins LLP, Latham & Watkins LLP and Latham & Watkins LLP 
4 104 Common Law Values: The Role of Party Autonomy in Private Law 
Sarah Worthington 
University of Cambridge - Faculty of Law 
5 100 Lexical Opportunism and the Limits of Contract Theory 
Jeffrey M. Lipshaw 
Suffolk University Law School 
6 94 Reinterpreting the Status-Contract Divide: The Case of Fiduciaries 
Hanoch Dagan and Elizabeth S. Scott 
Tel Aviv University - Buchmann Faculty of Law and Columbia University - Law School 
7 87 The Laws of Asian International Business Transactions 
Gilles Cuniberti 
Universite du Luxembourg - Faculty of Law, Economics and Finance 
8 76 The Ties That Bind: LLC Operating Agreements as Binding Commitments 
Joan MacLeod Heminway 
University of Tennessee College of Law 
9 70 צדק פרוצדורלי וצדק מהותי בדיני חוזים: עושק וכפייה כמקרי מבחן
(Procedural and Substantive Fairness in Contract Law: Exploitation and Duress as Test Cases)
 
Eyal Zamir 
Hebrew University of Jerusalem - Faculty of Law 
10 67 Contract Formation and Performance Under the UCC and CISG: A Comparative Case Study 
Kurt M. Saunders and Leonard Rymsza 
California State University, Northridge and California State University, Northridge - Department of Business Law 

 

July 28, 2015 in Recent Scholarship | Permalink

New Scholarship from Across the Pond

Rupert Macey-Dare 

 
Macey-dare Rupert_LargeUniversity of Oxford - Saint Cross College; Middle Temple; Freshfields Bruckhaus Deringer LLP; Minerva Chambers

July 12, 2015
 

Abstract:      

On 2 August 1849, towards the end of a 3 year voyage, the whaling ship Richmond ran aground with a full cargo of oil and whalebone, on the rocky coastline of the Behring Straits. Three passing ships, the Elizabeth Frith, the Panama and the Junior immediately came to the rescue, both of the Richmond's crew and also of the Richmond’s cargo, which they bought for fire-sale prices at an impromptu auction. The Richmond's owners in due course objected, and 7 years later on, in 1856, the validity of the auction was a key issue before the US Supreme Court. This court pronounced the sale invalid and clarified the key legal principal that a contract is only valid if parties have both the power and real freedom to contract.

However there was a second question considered in detail by the Supreme Court, namely what was the alternative fair remuneration that should be substituted for the salvors? This led to a complex and sophisticated analysis of the business risks and fair returns for both parties. Although the context was admiralty law and commercial salvage rather than international tax, the Supreme Court's analysis is remarkably close modern transfer pricing analysis and Post v Jones can perhaps also be viewed as a prototype early transfer pricing type case.
 

Number of Pages in PDF File: 12

 

July 28, 2015 in Recent Scholarship | Permalink

Monday, July 27, 2015

Weekly News Roundup

Bitcoin_logo.svgAs Fortune Magazine reported here, Lifelock has sued a bitcoin digital wallet company called Xapo.  Xapo's founder and CEO, Wences Casares, formerly owned a company that was purchased by Lifelock, and he became a Lifelock employee at that point.  Lifelock alleges that he used a product from his old company to create Xapo.  Casares responds that Lifelock had no interest in the product.  Casares moved to dismiss the suit in California Superior Court, and that motion was denied.  Fortune provides more complete background on the case here.  For some reason, Fortune describes the suit as sounding in fraud, but it sounds more like a breach of contract/IP issue to me.  Other websites (e.g., Bitcoin News Service here and Bitcoin Magazine here) describe the suit as sounding in breach of contract.

 This is not exactly news, but the Daily Telegraph is reporting on sex contracts at U.S. colleges and universities as though it were news.  While the report features some discouraging information about the frequency of sexual assault at UK and U.S. universities, it adopts a snide tone regarding sex contracts and concludes that they are "overly simplistic and potentially harmful."  Although the report acknowledges that the contracts are "conversation starters" and are not intended to be binding contracts, it proceeds to treat them as contracts and to point out the obvious -- like that people are entitled to change their minds about sex.   Ugh.  It's not as if this is not something that has occurred to the designers of sex contracts.  The models of such contracts that we have discussed here include language requiring consent on an on-going basis to each new sex act.  This approach is easy to mock, but, as we've seen before, those who denigrate serious approaches to the problem of sexual assault on college campuses fail to provide alternatives.  The Telegraph cites to an organization called the "Good Lad Workshop" that encourages college students to be good guys.  It is clear that the spokesman for the organization knows nothing about how actual sex contracts work.

July 27, 2015 in In the News, Web/Tech | Permalink | Comments (0)

Thursday, July 23, 2015

Porn, Perry and the Pope

You cannot say that we are boring you this week.  Our blogs have included considerations on advertising on porn sites and having one’s illicit affairs forgotten contractually. Add to that the news that this week, Roman Catholic nuns, the archdiocese of Los Angeles, the formerly Jesuit student turned California Governor Brown and Pope Francis all had something to say about contracting about major and, admittedly, some minor issues.

To start with the important: Pope Francis famously issued his Encyclical Letter Laudato Si’ “On Care for our Common Home.”  In it, he critiques “cap and trade agreements,” which by some are considered to be a mere euphemism for contractual permits to pollute and not the required ultimate solution to CO2 emissions. In the Pope’s opinion, “The strategy of buying and selling carbon credits can lead to a new form of speculation which would not help reduce the emission of polluting gases worldwide. This system seems to provide a quick and easy solution under the guise of a certain commitment to the environment, but in no way does it allow for the radical change which present circumstances require. Rather, it may simply become a ploy which permits maintaining the excessive consumption of some countries and sectors.” Well said.

Governor Brown, however, disagrees: Brown shrugged off Francis' comments. "There's a lot of different ways," he told reporters, "that cap and trade can be part of a very imaginative and aggressive program."  Brown, however, does agree with the Pope that we are “dealing with the biggest threat of our time. If you discount nuclear annihilation, this is the next one. If we don’t annihilate ourselves with nuclear bombs then it's climate change. It’s a big deal and he’s on it.”

In less significant contractual news, Roar, Firework, and I Kissed a Girl and I Liked It singer Katy Perry is interested in buying a convent owned by two Sisters of the Most Holy and Immaculate Heart of the Blessed Virgin. Why? Take a look at these pictures. The only problem is who actually has the right to sell the convent to begin with: the Sisters or the archdiocese. When two of the sisters found out the identity of the potential buyer (Perry), they became uninterested in selling to her because of her “public image.” They now prefer selling to a local restaurateur whereas the archdiocese prefers to complete the sale to Perry, although she bid less ($14.5 million) on the property than the restaurateur ($15.5 million). Perry may be about to learn that image is indeed everything in California, even when it comes to the Divine. Perry is no stranger to religion herself as she was, ironically, raised in a Christian home by two pastor parents. 

July 23, 2015 in Commentary, Contract Profs, Current Affairs, Famous Cases, In the News, Legislation, Music, Religion | Permalink | Comments (0)

Wednesday, July 22, 2015

New in Print

Pile of BooksJuliet P. Kostritsky, Context Matters -- What Lawyers Say about Choice of Law Decisions in Merger Agreements, 13 DePaul Bus. & Com. L.J. 211 (2015)

Murat Madykov, Step-in Right As a Lender Protection Mechanism in Project Financed Transactions, 13 DePaul Bus. & Com. L.J. 273 (2015)

Genevieve Saumier, The Hague Principles and the Choice of Non-State "Rules of Law" to Govern an International Commercial Contract, 40 Brook. J. Int'l L. 1 (2014)

July 22, 2015 in Recent Scholarship | Permalink

Tuesday, July 21, 2015

Weekly Top Tens from the Social Science Research Network

SSRNSSRN Top Downloads For Contracts & Commercial Law eJournal
RECENT TOP PAPERS 

RankDownloadsPaper Title
1 168 The Law, Economics, and Psychology of Manipulation 
Eric A. Posner 
University of Chicago - Law School 
2 164 The Influence of Comparative Law on the English Law of Obligations 
Andrew Burrows 
University of Oxford - Faculty of Law 
3 154 After the Revolution: An Empirical Study of Consumer Arbitration 
David Horton and Andrea Cann Chandrasekher 
University of California, Davis - School of Law and University of California, Davis - School of Law 
4 131 Facilitating Incomplete Contracts 
Wendy Netter Epstein 
DePaul University - College of Law 
5 106 Controlling Shareholder's Long-Term Commitment Through Private Benefits of Control 
Albert H. Choi 
University of Virginia School of Law 
6 102 The Commission's E-Commerce Sector Inquiry – Analysis of Legal Issues and Suggested Practical Approach 
Lars KjølbyeAlessio Aresu and Sophia Stephanou 
Latham & Watkins LLP, Latham & Watkins LLP and Latham & Watkins LLP 
7 94 Lexical Opportunism and the Limits of Contract Theory 
Jeffrey M. Lipshaw 
Suffolk University Law School 
8 93 Reinterpreting the Status-Contract Divide: The Case of Fiduciaries 
Hanoch Dagan and Elizabeth S. Scott 
Tel Aviv University - Buchmann Faculty of Law and Columbia University - Law School 
9 90 Common Law Values: The Role of Party Autonomy in Private Law 
Sarah Worthington 
University of Cambridge - Faculty of Law 
10 88 What We Know About Contract Law and Transacting in the Marketplace – A Review Essay 
John Gava 
Adelaide Law School 

SSRN Top Downloads For LSN: Contracts (Topic)
RECENT TOP PAPERS 

RankDownloadsPaper Title
1 168 The Law, Economics, and Psychology of Manipulation 
Eric A. Posner 
University of Chicago - Law School 
2 164 The Influence of Comparative Law on the English Law of Obligations 
Andrew Burrows 
University of Oxford - Faculty of Law 
Date posted to database: 19 May 2015 
Last Revised: 9 Jun 2015
3 154 After the Revolution: An Empirical Study of Consumer Arbitration 
David Horton and Andrea Cann Chandrasekher 
University of California, Davis - School of Law and University of California, Davis - School of Law 
4 131 Facilitating Incomplete Contracts 
Wendy Netter Epstein 
DePaul University - College of Law 
5 102 The Commission's E-Commerce Sector Inquiry – Analysis of Legal Issues and Suggested Practical Approach 
Lars KjølbyeAlessio Aresu and Sophia Stephanou 
Latham & Watkins LLP, Latham & Watkins LLP and Latham & Watkins LLP 
6 93 Reinterpreting the Status-Contract Divide: The Case of Fiduciaries 
Hanoch Dagan and Elizabeth S. Scott 
Tel Aviv University - Buchmann Faculty of Law and Columbia University - Law School 
7 93 Lexical Opportunism and the Limits of Contract Theory 
Jeffrey M. Lipshaw 
Suffolk University Law School 
8 90 Common Law Values: The Role of Party Autonomy in Private Law 
Sarah Worthington 
University of Cambridge - Faculty of Law 
9 88 What We Know About Contract Law and Transacting in the Marketplace – A Review Essay 
John Gava 
Adelaide Law School 
10 83 The Laws of Asian International Business Transactions 
Gilles Cuniberti 
Universite du Luxembourg - Faculty of Law, Economics and Finance

 

July 21, 2015 in Recent Scholarship | Permalink

Monday, July 20, 2015

Statutory and Contractual Rights to be Forgotten - Also in Naughty Cases

In 2014, the Court of Justice of the European Union famously held that “[i]ndividuals have the right - under certain conditions - to ask search engines to remove links with personal information about them. This applies where “the information is inaccurate, inadequate, irrelevant or excessive” for the purpose of otherwise legitimate data collection. “A case-by-case assessment is needed considering the type of information in question, its sensitivity for the individual’s private life and the interest of the public in having access to that information.”

A few days ago, infamous adultery-enabling website Ashley Madison and “sister” site (no pun intended) EstablishedMen.com, which “connects ambitious and attractive young women with successful and generous benefactors to fulfill their lifestyle needs,” was hacked into by “The Impact Team,” a group of apparently offended hackers who threatened to release “all customer records, including profiles with all the customers’ secret sexual fantasies and matching credit card transactions, real names and addresses, and employee documents and emails” unless the owner of the sites, Avid Life Media, removes the controversial websites from the Internet permanently. 

Notwithstanding legal issues regarding, perhaps, prostitution, do customers have a right to be forgotten?  Not in general in the USA so far. Even if a provision similar to the EU law applied here, it would only govern search engines. Ashley Madison had, however, contractually promised its paying users a “full delete” in return for a fee of $19.  The problem? Apparently that the site(s) still kept purchase details with names.  Further, of course, that the company promised and still promises “100% discreet service.”  Both seemingly clear contractual promises.

Although the above example may, for perhaps good reason, simply cause you to think that the so-called “clients” above have only gotten what they asked for, the underlying bigger issues remain: why in the world, after first Target, then HomeDepot and others, can companies not find out how to securely protect their customers’ data “100%”? And why should we, in the United States, not have a general right to be deleted not only from companies’ records, but from search engines, if we want to? I admittedly live a very boring life. I don’t have anything to hide. But if I once in a blue moon sign up for something as simple as Meetup.com to go hiking with others, my name and/or image is almost certain to appear within a few days online. I find that annoying. I don’t want my students, for example, to know where I occasionally may meet friends for happy hour. But unless I invest relatively large amount of time in figuring out how to use and not use new technology (which I see that I have to, given the popularity of LinkedIn and the like), I may end up online anyway. That’s not what I signed up for.

As for Ashley Madison, the company has apparently been adding users so rapidly that it has been considering an initial public offering. You can truly get everything on the Internet these days, perhaps apart from data security.

July 20, 2015 in Commentary, Current Affairs, E-commerce, Famous Cases, In the News, Web/Tech | Permalink | Comments (0)

A Love Letter to Alex Blumberg & Gimlet Media

I LoveLetter was never a business person.  I grew up hoping to some day live in a commune.  That dream collapsed when I experienced the idiocy of rural life, so I did the next least practical thing and got a Ph.D. in German history.  But now I teach contracts and business associations.  My brother is still living the dream (sort of), residing on a kibbutz in the Arava.  But the kibbutz has a factory that makes sealable plastic bags, and my brother actually works for an engineering company located on a neighboring kibbutz.  In short, there is no escape from commercial enterprise.

In some ways, Alex Blumberg's project is the perfect fit for someone like me, who teaches and studies commercial transactions from the convenient distance of the academy.  Blumberg comes from public radio, where he co-hosted Planet Money and was a producer for This American Life.  He decided to go over to the dark side and created his own media company, which eventually became Gimlet Media, a producer and distributor of high-quality podcasts.  I am not yet hooked on its other projects, but I am extremely taken with StartUp, and I recommend it to people who teach business courses, including business and media law.

In StartUp, Blumberg and his team wrestle publicly with every private thing associated with setting up a new company.  The show provides a unique, well-edited but still very intimate, behind-the-scenes view of new companies.  The first season focused on Blumberg's own company, Gimlet Media, including hilarious episodes devoted to naming the company.  Blumberg had settled on the name "Orelo," but when he told his wife that he had selected that name because it means "ear" in Esperanto, she burst out laughing, and when she finally caught her breath, she gasped out "That's so . . . dumb. . . . So dumb!"  He was also considering American Podcasting Corporation.  He explained to one of his unimpressed investors that the name would be a throwback to older media companies like ABC.  The disenchanted investor said something like, "No, no, I get it."  My real question that I wish the podcast had addressed is why did you form a corporation rather than an LLC?  That would have been a great episode for my business associations course!!

StartUp's second season covered a very different type of company, Dating Ring, an online dating service that was supposed to have, as its special gimmick, a team of matchmakers who actually set you up with people you will likely connect with.  I don't know if this was Blumberg's design, but I really loved the contrast between Season 1, which covered a company that I wanted to succeed and that did succeed, and Season 2, which covered I company that I wanted to fail, and pretty much did fail.  I hated Dating Ring from the moment its founders announced that they wanted to be the Uber of dating.  As followers of this blog know, Uber has its own problems, but the analogy highlighted the tension at the heart of Dating Ring's model -- they want to help you find true love, but they want to do it in a seamless, mechanized way.  They also considered advertising on porn sites, because nothing says "I want to bring you home to my mother" like "I met her through a website that was linked to on my favorite porn site."  Season 2 provides great insights into some of the many reasons why a company can fail, despite having smart, dedicated people with talent and energy and an idea that some investors think promising.

But the second season was also invaluable for its reporting on fundraising, on the mindset of people who want to become entrepreneurs and the crazy rollercoaster ride that most new companies experience.  At one point, Dating Ring's founders go to a consultant who is really like a couple's therapist for start-up founders.  From a distance it seemed a bit ridiculous, but one could also easily imagine how in such an intimate relationship the idea "I don't have a large enough equity stake" could translate into "I don't think you really love me and value me the way you ought to do."

I am looking forward to Season 3 almost as much as I am looking forward to Season 2 of Serial.

July 20, 2015 in Commentary, Miscellaneous | Permalink | Comments (0)

Honda Enters into $24 Million Consent Order with CFPB over Discriminatory Loan Practices

CfpbOn July 14th, American Honda Finance Corporation (Honda) and the Consumer Financial Protection Bureau (CFPB) entered into a consent order (the Order).  The CFPB and the Civil Rights Division of the Department of Justice (DOJ) alleged that Honda had violated the Equal Credit Opportunity Act (ECOA) and its implementing legislation by permitting dealers to charge higher interest rates on auto loans on the basis of race and national origin.  

DOJAccording to the Order, after a joint investigation, the DOJ and the CFPB made found that, during the time period covered, on average, African-American borrowers were issued loans that resulted in an extra $250 in interest payments over the course of the loan compared to loans issued to non-Hispanic whites.   Hispanics paid an extra $200 and Asians and Pacific Islanders paid an extra $150.  This result was the product of Honda's specific policy and practice.  

The Order gives Honda three options that it can pursue in order to prevent future violations of the ECOA in the future.  Honda will also pay $24 million into an escrow account.  The funds will be used to compensate borrowers for the excessive interest payments they were required to make.

As the CFPB notes on its website:

Today’s action is part of a larger joint effort between the CFPB and DOJ to address discrimination in the indirect auto lending market. In December 2013, the CFPB and DOJ took an action against Ally Financial Inc. and Ally Bank that ordered Ally to pay $80 million in consumer restitution and an $18 million civil penalty.

Hat tip to Michael Gibson of the OKCU School of Law.  Professor Gibson suggests that legal scholarship by Ian Ayres and others laid the foundation for this Order and others like it.

July 20, 2015 in Current Affairs, In the News, Legislation | Permalink | Comments (0)

Friday, July 17, 2015

Fourth Annual Insurance Workshop at Rutgers Camden

Rutgers-Camden_Law_SchoolThe Rutgers Center for Risk and Responsibility is holding its fourth annual insurance workshop on Friday, October 2, 2015. This is a day-long event on the Camden campus with an opportunity to present and receive comments on drafts or less fully formed works-in-progress on topics related to insurance law or other aspect of managing or regulating risk.

For more information, contact Professor Rick Swedloff, swedloff@camden.rutgers.edu

July 17, 2015 in Conferences, Law Schools | Permalink

Thursday, July 16, 2015

More Contracts News that Hits Home

MuwakanaContracts Prof Kermit Mawakana (pictured) has sued the University of District Columbia (UDC) for breach of contract and employment discrimination in connection with his termination from UDC's David A. Clarke School of Law.  Last week, the District Court for the District of Columbia issued an opinion in the case. On UDC's motion to dismiss the contract claim, the court found that UDC had breached no express contract but may have breached an implied contract, and it denied the motion.  

According to the court, Professor Mawakana was hired in 2006 as an Assistant Professor and promoted to Associate Professor three years later.  However when he came up for tenure, his application was denied because he had not met UDC's criteria for scholarship.  Professor Mawakana alleged defects in his review process that amounted to a breach of contract.  The court found that the review policies did not amount to a contract and thus found no breach of an express contract, but it did find that the complaint alleged sufficient facts "if just barely" for the claim for breach of an implied contract to proceed.  The court similarly found that plaintiff had alleged sufficient facts to allow his claim for breach of the implied covenant of good faith and fair dealing to proceed.

The court did not rule on Professor Mawakana's non-contractual claims.  

July 16, 2015 in Contract Profs, Law Schools, Recent Cases | Permalink | Comments (0)

New in Print

Pile of BooksRobert M. Jarvis, Aboitiz & Co. v. Price: Some Lingering Questions, 55 Am. J. Legal Hist. 64 (2015)

Christopher K. Odinet, Commerce, Commonality, and Contract Law: Legal Reform in a Mixed Jurisdiction, 75 La. L. Rev. 741 (2015) 

Nadezda Rozehnalova & Jiri Valdhans, Rome I and Rome II Regulations: Choice of Law Compared, 7 J. Eurasian L. 1 (2014)

J.H. Verkerke, Legal Ignorance and Information-Forcing Rules, 56 Wm. & Mary L. Rev. 899 (2015)

July 16, 2015 in Recent Scholarship | Permalink

Tuesday, July 14, 2015

Non-Compete and Non-Solicitation Clauses Void in Tech Employment Contracts in Hawaii

Hawaii's Governor David Ige recently signed a bill  into law making "a non-compete or a non-solicit clause in any employment contract relating to an employee of a technology business... void and of no force and effect." 

Under the law, effective July 1, a "technology business" is defined as a "trade or business that derive the majority of its gross income from the sale or license of products or services resulting from its software development or information technology development, or both."  It excludes businesses that are part of the broadcast industry or any telecommunications carrier.  There are exceptions, such as when the restrictive covenant is in connection with the sale of a business or partnership.  Furthermore, agreements to protect trade secrets are still valid.

With this bill, Hawaii joins California and a few other states in invalidating non-compete clauses in employment agreements.  In doing so, it has made clear that it has a "strong public policy" in promoting the growth of new businesses and recognized the "special hardship on employees of technology businesses" who are unduly restricted given the unique and limited geographic area of the state. 

Important to note is how this will affect not just those contracts where the choice of law clause selects Hawaii, but those where the governing law is one other than Hawaii's (or California's).  In those cases, it's likely that a Hawaiian court will not enforce the governing law clause if it would defeat this important state policy in favor of tech worker mobility -- i.e. an employer probably won't be able to get around Hawaii's law by selecting another state's law in the governing law clause.  (I'm currently working on a book about contract clauses and hope to write a short post on governing law clauses in the near future).

July 14, 2015 | Permalink | Comments (0)

Weekly Top Tens from the Social Science Research Network

SSRNSSRN Top Downloads For Contracts & Commercial Law eJournal
RECENT TOP PAPERS 

RankDownloadsPaper Title
1 161 The Influence of Comparative Law on the English Law of Obligations 
Andrew Burrows 
University of Oxford - Faculty of Law 
2 159 The Law, Economics, and Psychology of Manipulation 
Eric A. Posner 
University of Chicago - Law School 
3 145 After the Revolution: An Empirical Study of Consumer Arbitration 
David Horton and Andrea Cann Chandrasekher 
University of California, Davis - School of Law and University of California, Davis - School of Law 
4 142 Freedom to Tinker 
Pamela Samuelson 
University of California, Berkeley - School of Law 
5 127 Facilitating Incomplete Contracts 
Wendy Netter Epstein 
DePaul University - College of Law 
6 96 The Consumer Financial Protection Bureau and the Quest for Consumer Comprehension 
Lauren E. Willis 
Loyola Law School Los Angeles 
7 92 Controlling Shareholder's Long-Term Commitment Through Private Benefits of Control 
Albert H. Choi 
University of Virginia School of Law 
8 92 The Commission's E-Commerce Sector Inquiry – Analysis of Legal Issues and Suggested Practical Approach 
Lars KjølbyeAlessio Aresu and Sophia Stephanou 
Latham & Watkins LLP, Latham & Watkins LLP and Latham & Watkins LLP 
9 90 Reinterpreting the Status-Contract Divide: The Case of Fiduciaries 
Hanoch Dagan and Elizabeth S. Scott 
Tel Aviv University - Buchmann Faculty of Law and Columbia University - Law School 
10 89 A Theory of Global Trade Law and the WTO 
Panagiotis Delimatsis 
Tilburg Law and Economics Center (TILEC) 

SSRN Top Downloads For LSN: Contracts (Topic)
RECENT TOP PAPERS 

RankDownloadsPaper Title
1 264 Two Cheers for Corporate Experimentation: The A/B Illusion and the Virtues of Data-Driven Innovation 
Michelle N. Meyer 
Union Graduate College - Icahn School of Medicine at Mount Sinai Bioethics Program 
2 161 The Influence of Comparative Law on the English Law of Obligations 
Andrew Burrows 
University of Oxford - Faculty of Law 
3 159 The Law, Economics, and Psychology of Manipulation 
Eric A. Posner 
University of Chicago - Law School
4 145 After the Revolution: An Empirical Study of Consumer Arbitration 
David Horton and Andrea Cann Chandrasekher 
University of California, Davis - School of Law and University of California, Davis - School of Law 
5 127 Facilitating Incomplete Contracts 
Wendy Netter Epstein 
DePaul University - College of Law 
6 92 The Commission's E-Commerce Sector Inquiry – Analysis of Legal Issues and Suggested Practical Approach 
Lars KjølbyeAlessio Aresu and Sophia Stephanou 
Latham & Watkins LLP, Latham & Watkins LLP and Latham & Watkins LLP 
7 90 Reinterpreting the Status-Contract Divide: The Case of Fiduciaries 
Hanoch Dagan and Elizabeth S. Scott 
Tel Aviv University - Buchmann Faculty of Law and Columbia University - Law School 
8 85 Lexical Opportunism and the Limits of Contract Theory 
Jeffrey M. Lipshaw 
Suffolk University Law School 
9 84 What We Know About Contract Law and Transacting in the Marketplace – A Review Essay 
John Gava 
Adelaide Law School 
10 75 The Laws of Asian International Business Transactions 
Gilles Cuniberti 
Universite du Luxembourg - Faculty of Law, Economics and Finance

 

 

 

July 14, 2015 in Recent Scholarship | Permalink

Monday, July 13, 2015

NY Times on the "Gig Economy"

Today's New York Times has an article about how Uber and Lyft are merely the latest incarnation of a decades-long trend towards replacing (or attempting to replace) employees with independent contractors.  According to the Times, Uber is a rather extreme version, officially employing only 4000 people, while 160,000 people make their living through Uber.  The Times attributes stagnating wages to this "gig economy," acknowledging that other forces, including the decline of unions and globalization, are also contributing factors.  As of 2014, 18% of all jobs held in the United States are occupied by independent contractors.

But the process has its roots in older trends, such as the move towards franchises that got going in the 1960s and has continued its steady expansion.  In the hospitality industry, hotel chains enter into franchise agreements with hotel operators, who in turn now increasingly turn to independent contractors to provide services within their hotels.  The results has been a decline in wages in the industry in the 21st century.  

As usual in Times articles these days, if you read on below the fold, you will learn the upside to the "gig economy."  Some people choose to be self-employed consultants to that they can work flexible hours and work from home.  But it's hard to find a silver lining here for ordinary workers.  Some can succeed as independent contractors, but their wages tend to be low, they have no job security, and the work may come in uncontrollable bursts followed by long, anxiety-producing lulls.  

July 13, 2015 in In the News, Labor Contracts | Permalink | Comments (0)

Weekly News Roundup

ChicagoBlackhawksLogo.svgWe have some news from the world of hockey, that is, the sport of the 2015 Stanley Cup Champion Chicago Blackhawks (logo pictured).   While elite teams (like the Blackhawks) struggle to keep their rosters under the salary camp (Goodbye Patrick Sharp; Goodbye Brandon Saad -- thanks for the memories and the Cups!), as reported on ESPN.com, the L.A. Kings used an alleged "material" breach of contract to terminate center Mike Richards rather than buying him out to evade the cap.  The alleged material breach was at first mysterious, but it has now bee reported, e.g., here on Forbes.com, that Richards was detained at the Canadian border in illegal possession of OxyContin.  But the Forbes report also indicates that Richards' mere arrest is not grounds for termination, and even if he is convicted, the NHL's drug policy does not call for termination.  It calls for substance abuse treatment.  Go Blackhawks!

The Bangor Daily News reports that author Tess Gerritsen has dropped her $10 million law suit against Warner Bros. for breach of contract in connection with the film "Gravity."  As we reported previously, a District Court in California dismissed her complaint but  allowed her twenty days to amend and refile.  The complaint is based on a $1 million contract Gerritsen signed in 1999 to sell the book’s feature film rights to a company that was eventually purchased by Warner Bros.  Gerritsen has admitted that the film "is not based on" her book, but she asserts that the book clearly inspired the film.  

 

 

July 13, 2015 in Books, Celebrity Contracts, Film, In the News, Sports | Permalink | Comments (0)