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Editor: D. A. Jeremy Telman
Valparaiso Univ. Law School

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Saturday, November 20, 2004

Violent struggle over spiritual game

Avary If you ever wondered what kind of crime would be too heinous even for the author of such "ultraviolent" nihilist films as Pulp Fiction and Killing Zoe—well, you can stop.  Torture and mass murder are one thing, but don't even think about stealing one of his ideas.

Screenwriter/director/producer Roger Avary (left) has sued Microsoft for bad faith and breach of implied contract, among other things, claiming that the software titan stole his idea for a video game. The weird thing is that it’s not a Pulp Fiction-esqe shoot-’em-up. It’s a yoga video game, under which a "yoga master" leads student through a "virtual fitness studio."

The complaint (the link is on the right side of this blog about the case) is interesting as a textbook illustration of how disputes like this arise—and the overblown language Hollywood people use when they take meetings on "artistic" concepts.  You can learn more about Avary than you’re likely to want to from his web site.

November 20, 2004 in In the News | Permalink | Comments (0) | TrackBack (0)

Today in contract history—November 20

Edward_i 1272:  Edward I (known as "Longshanks") succeeds his father Henry III as King of England.  Edward (left) will create the Chancery and the Exchequer, and his reforms for the first time bring substantial commercial disputes into the royal courts.  He also passes laws against the Jews, including prohibiting them from lending money.

1847:  From commercial venture to modern town—trading post at Blacksnake Hills officially changes its name to St. Joseph, Missouri.  The former fur trading post will become one of the most important commercial outfitter for the Western expansion.

1866:  Judge Kenesaw Mountain Landis is born.  As a judge, he presides over the Standard Oil antitrust litigation, and later becomes the first Commissioner of Baseball.  He demands, and gets, a lifetime contract.

1967:  President Johnson announces formation of the National Product Safety Commission.

November 20, 2004 in Miscellaneous | Permalink | Comments (0) | TrackBack (0)

Fear stalks Florida

Mercedes_home A Florida homebuilder is creating a what seems to be a reign of terror through the Sunshine State—by suing customers for breach of contract.

"I'm afraid to talk to my neighbors. I'm afraid to walk my daughter to the bus stop. I'm afraid to talk to you right now," said one victim who was sued by Mercedes Homes, Inc., after she distributed flyers to neighbors complaining about poor home construction. A clause in the Mercedes contract prohibits owners from publicly disparaging the workmanship.

"I feel like I'm in a police state. I can't do anything. I have no avenues. I have nowhere to turn," one homeowner said. The last, at least, is an overstatement, since she was at the moment turning to a TV news reporter and meditating a class action lawsuit.

November 20, 2004 in In the News | Permalink | Comments (1) | TrackBack (0)

Ricky Martin settles contract dispute

Ricky_martin Singer Ricky Martin and his manager have settled their contract lawsuit.  Martin originally sued Angelo Medina for $2.5 million, accusing Medina of pocketing unearned commissions

In his counterclaim, Medina—who orchestrated Martin’s climb to stardom—charged the pop idol with breach of contract and sought $63.5 million.

November 20, 2004 in In the News | Permalink | Comments (0) | TrackBack (0)

Friday, November 19, 2004

Today in contracts history—November 19

1493: Christopher Columbus makes his first landing on Puerto Rico. Columbus is best known as the namesake of of the first modern contracts professor, Christopher Columbus Langdell.

1944: President Roosevelt launches the 6th War Loan Drive to raise $14 billion for the war effort.

1985: Pennzoil wins the largest contract-related jury verdict in history, taking $10.5 billion from Texaco.  The case will later settle for an amount that will make the plaintiff's counsel very rich and, later, the law school at the University of Texas very, very happy.

1951: Charles Falconer, later Baron Falconer of Thoroton, is born. He will become the first English Lord Chancellor to refuse to wear the wig and the robe.  Some people just don’t get tradition.

Rm_johnson 1850: Former Vice President Richard Mentor Johnson (left) dies.  Johnson’s lasting work as a Congressman was the abolition of imprisonment for debt in 1832.

November 19, 2004 in Miscellaneous | Permalink | Comments (0) | TrackBack (3)

Surprise: A hockey fight in Canada

Hockey_theme The Canadian national anthem, of course, is Oh Canada. But the song that runs a close second up in the Great White North is the theme song to the popular Hockey Night in Canada. That theme has not been heard much lately, what with the National Hockey League shut down by a lockout.  That’s left Canadians with "serious puck withdrawal," and looking as cheerful as George Soros the day after the U.S. election.

But a fight is brewing over the popular theme.  Composer Dolores Claman and the related entities that control the song have sued the Canadian Broadcasting System for for $2.5 million, claiming breach of contract and copyright violation. The suit says that the CBC improperly used the song in broadcasts outside Canada, in violation of the contract.

November 19, 2004 in In the News | Permalink | Comments (0) | TrackBack (0)

A big experience in a small country

Uruguay The chance to see other cultures and interact with faculty and students who have different perspectives is one of the great things about a Fulbright  grant.  In the forthcoming issue of the AALS Contracts Newsletter, Scott Burnham (Montana) talks about his teaching experiences in Uruguay.

Click the link below for the full story.

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November 19, 2004 in Teaching | Permalink | Comments (0) | TrackBack (0)

Pragmatism v. idealism in the real world

Most contracts teachers know that the connection between the theories we propound and the things that lawyers do in the business world can be a little tenuous.  In a new paper, Contracts, Contingency and Lawyers as Leaders: Moral Philosophy in Complex Business Transactions, Jeffrey Lipshaw (Senior V.P., Secretary, and General Counsel of Great Lakes Chemical Corp.) argues that pragmatic accounts of law do not line up with the realities of practice in sophisticated transaction, and he turns to philosophical models—particularly that of Kant—for a better account.

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November 19, 2004 in Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

A Tale of Two Apples

Rachel_1The battle between Apple Corps, the Beatles' record label, and computer-maker Apple Corp., is a cautionary tale about how changes in technology can undo the most carefully crafted agreements.

In her Contracts in Popular Culture column in the forthcoming issue of the AALS Contracts Newsletter, Rachel Arnow-Richman (Denver) takes a look at the clash of icons.  Click on the link below for the full story.

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November 19, 2004 in Commentary | Permalink | Comments (0) | TrackBack (1)

Thursday, November 18, 2004

The Carnival Cruise Song (with apologies to John Denver)

Carnival_cruise From the files of the Department of Contract Musicology, Cheryl Preston (BYU) offers a ditty about the Supreme Court's most famous standard-form contract case.

Tenors should sing it in the key of G . . . .  Click on the link below for the lyrics.

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November 18, 2004 in Miscellaneous | Permalink | Comments (0) | TrackBack (0)

This date in contracts history—November 18

William_caxton 1477:  William Caxton (left) produces the first English book on a printing press.  Four hundred years later, printing will reach its zenith with the modern law review.

1836:  Sir William S. Gilbert is born.  He will go on to write the libretto for Trial by Jury, perhaps the funniest operetta ever written about a breach of promise action in the Court of Exchequer.

1903:  The United States makes a major land deal, acquiring the Panama Canal Zone for $10 million in the Hay-Bunau Varilla Treaty.

1928:  Mickey Mouse is born with the release of Steamboat Willie.  Seventy-six years later he’s still not in the public domain.

1938: John L. Lewis is elected the first president of the new Congress of Industrial Organizations.

November 18, 2004 in Miscellaneous | Permalink | Comments (0) | TrackBack (0)

A better approach to teaching damages

Syracuse_l_rev_1 The various formulas by which courts purportedly calculate damages can be difficult to teach and confusing to students.  In a forthcoming article in the AALS Contracts Newsletter, Jake Barnes (Seton Hall) and Debbie Zalesne (CUNY) offer a new and improved solution: the "surplus-based" approach to damages.  The article is a handy guide; the theory is set out in an upcoming article in the Syracuse Law Review.

Click the link below for the full text.

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November 18, 2004 in Teaching | Permalink | Comments (0) | TrackBack (0)

Cases—Attorneys' Fees—Liquidated amount

Massachusetts A swimming pool contractor who spent $11,000 in legal fees to recover $8,500 from a defaulting buyer will get at least some of that difference back.

A provision in the parties’ contract provided that a prevailing party would be entitled to attorneys’ fees "equal to 20% of the amount [determined to be] owing unless a court sets a smaller or larger fee."  Massachusetts Superior Court Judge Mary-Lou Rup held that under the clause the plaintiff could recover $1,700 in legal fees plus another $370 in costs—leaving plaintiff only $430 worse off than if it had not sued.

Gibraltar Pools Corp. v. Matsuk, 2004 Mass. Super. LEXIS 355 (Mass. Super. Ct. Hampden, Oct. 1, 2004)

November 18, 2004 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Teaching contracts visually

Irma_russell_1 In her regular Teaching Contracts column in the forthcoming AALS Contracts Newsletter, Irma Russell (Memphis) writes about Frank Doti's (Chapman) new book:

I was very impressed with the book . . . [which] uses graphs and flow charts to explain contracts concepts.  For many years in contracts and other classes, I have used Venn Diagrams on the board and "sets" as we learned them in math class long ago.  I have found these to be very helpful for many students.  Some of my students have produced their own charts as well, engaging in the experience of internalizing the process of organizing the concepts.  I asked Frank to write a brief description of his work for this column.

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November 18, 2004 in Teaching | Permalink | Comments (0) | TrackBack (0)

At-will associate can pursue "implied contract" claim for bonus

New_york_flag An at-will law firm associate who claims that his proffered $150,000 annual bonus was too small will have his chance to get to a jury.  A New York appellate court has reinstated the claim by former Andreas & Berger associate Kevin Haverty that his work in winning a $3 million fee for the firm should have resulted in a higher bonus.

According to the New York Lawyer, Haverty was making $110,000 a year as an associate. The firm offered him a $150,000 bonus for his work, but Haverty rejected it as too "paltry." When the firm refused to go higher, Haverty quit and sued. Though he had no formal employment contract, the court held that he had the right to try to prove an implied contract for a bonus and to recover on quantum meruit grounds.

November 18, 2004 in In the News | Permalink | Comments (0) | TrackBack (0)

Yes, there is a cultural revolution, it’s just not Mao’s

Mao_zedong An 11-year-old boy who was promised a computer if he scored above a 94 on his schoolwork sued his mother when she reneged on the promise after he scored a 97.

The kicker is that this scenario didn’t even happen here in The Most Litigious Nation on Earth™—but in China. Apparently capitalism and denim jeans aren’t the only features of American culture that the Chinese are adopting.

November 18, 2004 in In the News | Permalink | Comments (0) | TrackBack (0)

Are CEO employment contracts like other employment contracts?

The popular view of CEO employment contracts is that they are one-sided; the sycophants who populate the typical board give the top executive pretty much anything he or she wants.

Yet "despite all the ink spilled about executive compensation," write Stewart Schwab and Randall Thomas in a new paper, hardly anyone has actually examined these contracts systematically. Schwab and Thomas hope to rectify the omission in What Do CEOs Bargain For? An Empirical Study of Key Legal Components of CEO Employment Contracts.  The study finds some things that both support and seem to conflict with the popular view.

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November 18, 2004 in Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Using contracts to perform traditional firm functions

Untitled It is a commonplace that similar kinds of activities activities can be organized within firms or between firms, and in the latter situation it is contract law that governs the relationship.  A significant trend over the past twenty years has been the growth in outsourcing—turning to contractual relations to deal with business functions once done within the firm.

A new article from the Wharton Business School explores the process through an examination of IBM, which is trying to reinvent itself as a supplier of outsourcing services to other businesses.

November 18, 2004 in Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 17, 2004

Happy 400th birthday to the Parol Evidence Rule

It is one of the curious things about contract law that some of the most interesting cases involve the dullest of rules.  There are few duller than the Parol Evidence Rule.  And yet, as Hila Keren points out, the case that gave it birth is a fascinating story of love, death, and—well, deer.

Keren marks the 400th anniversary of the Parol Evidence Rule with a fascinating look back at The Countess of Rutland's Case.  Click on the link below for the article.

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November 17, 2004 in Famous Cases | Permalink | Comments (0) | TrackBack (0)

Cases—Damages—Lost profit claim too speculative

Florida_flag A Burger King franchisee lost on a claim that it was harmed by the nearby arrival of a Wendy’s.  The franchisee had bought land from Seller with a proviso that Seller would not sell land within 1,500 feet of the BK store to a competitor.  But Seller subsequently sold land to a Wendy’s franchisee only 655 feet away.

Seller plainly breached its covenant, said the Florida First District Court of Appeal in a per curiam opinion.  But dismissal of the franchisee’s claim was nevertheless appropriate because its damages evidence was too speculative.  In addition to the new competition, the store’s profits were affected by several other things, including road construction, national marketing problems, and the store’s own internal operating difficulties.

A. R. Holland, Inc. v. Wendco Corp., 2004 Fla. App. LEXIS 14432 (Fla. Civ. App. 1st Dist. Oct. 1, 2004).

November 17, 2004 in Recent Cases | Permalink | Comments (0) | TrackBack (0)