ContractsProf Blog

If you don’t sign on the line, you can’t stash the cash

Singer Rod Stewart will have to return a $640,000 down payment and his business associates will have to pay more than $1 million in other damages after the singer was hit by a jury verdict in a breach of contract action.

The lawsuit arose out of a failed attempt to put together a Latin American tour. Under the proposed agreement, which was never signed, tour promoters were to pay Stewart $2.1 million.  The promoters gave him a down payment of $780,000. When the tour did not materialize, Stewart refused to return the down payment, claiming that the promoters had failed to raised the necessary amounts.

A Los Angeles jury disagreed. According to a report by the Celebrity Justice web site, jurors did not believe there had been a final contract between the parties.  One juror was quoted as saying that "without a signed deal, the jury felt Stewart shouldn't have kept the cash."  Stewart's lawyer said the singer would appeal.

The latest from Planet Michael

Things keep getting more complicated for pop star Michael Jackson.  He's now been sued by a "former associate" for breach of contract.

J. Mark Schaffel Jackson says he's owed $3 million for money he loaned to Jackson and for work Schaffel did in a pro-Jackson documentary.  Jackson used some of the borrowed money, says the plaintiff, to buy jewelry for Elizabeth Taylor.

Schaffel, ironically enough, was also the executive producer of Jackson's 2002 single, What More Can I Give?  The answer, apparently, is $3 million.

Reilly on Recent Scholarship

From the forthcoming issue of the AALS Contracts Newsletter, Marie Reilly (South Carolina) reviews a plethora (or is it a myriad?) of new contract law scholarship.

Click the link below for the article.

Of Merchant Usages, Unmade Laws,
International Sales, and Dead Offerors

by Marie T. Reilly
University of South Carolina School of Law

The University of Pennsylvania Law Review has dedicated an issue to the role of consent in contract liability. Omri Ben-Shahar provoked discussion with his essay, Contracts Without Consent: Exploring a New Basis for Contractual Liability, 152 Penn. L. Rev. 1829 (2004). He offers a more finely calibrated tool to recognize contractual liability than the traditional digital paradigm, where one moment a party is not bound at all, but in the next he is bound completely. Because obligation emerges gradually, the author suggests a conception of liability that limits a party’s freedom to retract a commitment to settled aspects of their relationship even before all aspects are settled. Omri characterized the three solicited responses to his idea as "razor-sharp" and on a "continuum between the curious and the angry." Ronald Mann, Contracts–Only With Consent; Daniel Markowitz, The No-Retraction Principle and the Morality of Negotiations; Jason Johnston, Investment, Information, and Promissory Liability.

The University of Wisconsin Law Review published papers presented on a host of contract formation issues by Ian Ayres & Greg Klass, Omri Ben-Shahar, Lisa Berstein, Melvin Eisenberg, Clayton Gillette, Juliet Kostritsky, Roy Kreitner, Stewart Macaulay, Todd Rakoff, Robert Scott & Paul Stephan and James J. White. 2004 Wis. L. Rev. 261 (2004). Although the topic of the symposium was Freedom from Contract, none of the participants espoused freedom from contracts scholarship.

The Chicago Journal of International Law published three related articles on the law merchant and international trade usage: Richard Epstein, Reflections on the Historical Origins and Economic Structure of the Law Merchant; Clayton Gillette, The Law Merchant in the Modern Age: Institutional Design and International Usages Under the CISG; and Avery Katz, The Relative Costs of Incorporating Trade Usage Into Domestic Versus International Sales Contracts [A Response to Gillette]. 5 Chi. J. Int’l L. 1 (2004).  In a journal across town, Larry DiMatteo, Lucien Dhooge, Stephanie Greene, Virginia Maurer and Marisa Pagnattaro examine the CISG after 15 years in The Interpretive Turn in International Sales Law: Analysis of Fifteen Years of CISG Jurisprudence, 24 Nw. J. Int’l L. & Bus. 299 (2004).

Two articles consider ambiguity in express contracts from different perspectives. Lawrence Solan, Pernicious Ambiguity in Contracts and Statutes, 79 Chi-Kent L. Rev. 859 (2004) examines the problem through the lens of judicial opinions. Alan Schwartz & Joel Watson, The Law and Economics of Costly Contracting, 20 J. L. Econ. & Org. 2 (2004) applies an economic filter. On the question of ambiguity in legislation, Scott Baker & Kimberly Krawiec, in The Penalty Default Canon, 72 Geo. Wash. L. Rev. 663 (2004) note that courts filling contractual gaps are sensitive to the reason for the incompleteness, e.g., transaction costs, bounded rationality, or strategic objectives. The authors suggest that courts take the same cause- sensitive approach to interpreting legislation.

Can you find four differences between current and revised Article 1? Keith Rowley can. He shares his insight on the loneliest Article in One for All, But None for (All of) One: Revised Article 1 of the Uniform Commercial Code, Nevada Lawyer July 2004 (Part 1) and August 2004 (Part 2).

Jay Feinman takes a look at the politics of contract law in Un-Making Law: The Conservative Campaign to Roll Back the Common Law (Beacon Press 2004). The author shares his perspective on how the common law is experiencing a radical and regressive change at the hands of right wing forces. See also Un-Making Law: The Classical Revival in the Common Law, 28 Seattle U. L.Rev. 1 (2004), and a web site about the common law which Jay edits, www.thecommonlaw.net.

You and your students will appreciate Robert A. Hillman’s book, Principles of Contract Law published as part of West’s hornbook series. It offers concise and confidence inspiring coverage of the basic principles of contract law. The classic Capability Problem in Contract Law by Richard Danzig is out in a second edition (in paperback) (Foundation Press 2004), co-authored this time with Geoffrey Watson. For the graphically inclined, Frank Doti has published Contract Law Outlines & Flowcharts to show analytically complex contract topics through diagrams. Contracts professors may obtain a complimentary copy from Frank at fdoti@chapman.edu. And, Robert Lloyd’s article Making Contracts Relevant: Thirteen Lessons for the First Year Contracts Course, 36 Ariz. State L. J. 257 (2004) offers a concise list of lessons on the practice of law every contracts professor should deliver in the first year contracts course.

And finally, in an article fitting for Halloween, Val Ricks pronounces The Death of Offers, 79 Ind. L. J. 667 (2004). The author does not nail the coffin shut on offers as the title suggests, but rather examines the rules relating to the effect of the offeror’s death on the offeree’s power to accept.

Cases—Maritime contracts—Railroad transport may be “maritime” if coupled with ocean transport

Is a bill of lading that covers both ocean and overland transport a "maritime contract" subject to the liability limitations of federal admiralty law?  Yes, says the U.S. Supreme Court in a recent opinion.  The holds that a railroad was entitled under admiralty law to the liability limitations of the original shipping contract where the carriage involved both land and sea transportation.

In the case, goods were destroyed in a train wreck on the last leg of a trip from Australia to Alabama.  The original contract contained a Himalaya clause that purported to limit the liability of any third party whose services were used to perform the shipment.  The railroad argued that it was entitled to the limitation under admiralty law, because the goods included ocean transport.

Justice O’Connor, writing for the court, agreed.  Privity of contract is not required before a carrier can benefit from a shipping contract's liability limitations.  The default rule, she wrote, is that any intermediary involved in the transportation contract is acting as an agent of the cargo owner for the purpose of extending liability limits to downstream carriers.

Norfolk Southern Railway Co. v. James N. Kirby, Pty Ltd., No. 02-1028 (U.S. Nov. 9, 2004)

Classroom technology and active student learning

The increasing use of laptop computers in the classroom has created the phenomenon of students who engage in E-mail conversations, play solitaire, download sports scores, and do other things in class.  The problem is not so much that students are not paying attention—there have always been students who didn’t pay attention—but that such activities are often highly distracting to other students.

In a new paper, Paul Caron and Rafael Gely argue that the response is not outlawing laptops, but rather using technology in the classroom to foster active student learning.  The paper, Taking Back the Law School Classroom: Using Technology to Foster Active Student Learning is forthcoming in the Journal of Legal Education.

ICANN, Verisign battle over meaning of "registry services"

The Internet Corporation for Assigned Names and Numbers has countersued Verisign in the running dispute over which entity gets to offer the lucrative Site Finder and Waiting List services.  Verisign, which has the ICANN contract to administer the domain-name function, previously sued ICANN, claiming that ICANN was violating Verisign’s agreement by offering the services itself in competition with Verisign.

In today’s action, ICANN claims that the contract that authorizes Verisign to administer the domain-name process does not permit Verisign to offer the services.  The key to the dispute is what the contract means by "registry services"—a phrase that apparently was adopted before anyone realized how lucrative the add-on services could be.

ICANN also is seeking to have the dispute moved from a California court to arbitration before the International Chamber of Commerce.

Six degrees of separation: The case of Feinberg v. Pfeiffer Co.

From the forthcoming issue of the AALS Contracts Newsletter, the curious connections between the well-known promissory estoppel case of Feinberg v. Pfeiffer Co., Ernest Hemingway, the Warner-Lambert Pharmaceutical Company, Frank Lloyd Wright, Marisa Berenson, and The Metropolitan Museum of Art . . . .

Mrs. Feinberg's Pension, Ernest Hemingway, Warner-Lambert, Frank Lloyd Wright, Marisa Berenson, and the Metropolitan Museum of Art

by Frank Snyder
Texas Wesleyan University School of Law

For most Contracts teachers, the Pfeiffer Company is best known as the outfit that refused to pay the pension it promised to its bookkeeper in Feinberg v. Pfeiffer Co. But the Pfeiffer clan is known for many other things.

The story of the Pfeiffer Company begins when Paul, Henry, and Gustavus Pfeiffer and their families (including Paul’s six-year-old daughter Pauline) move from Parkersburg, Iowa, to St. Louis in 1901. They start a fledgling pharmaceutical company that is immediately successful. In 1908 they buy a little Philadelphia company called William Warner & Co., and their local business goes national. The Pfeiffer company will in the course of time make other acquisitions (including a company called Lambert that makes "Listerine"), and will later become the mighty Warner-Lambert Pharmaceutical Company.

Wealth comes to the Pfeiffers. In 1918, the same year young Pauline Pfeiffer graduates from a select Catholic high school in St. Louis, her father Paul buys a home (left) on 63,000 acres of land in Piggott, Arkansas.

Already a very wealthy young woman through the creation of family trusts, Pauline majors in journalism at the University of Missouri, and goes on to become a successful reporter for the Cleveland Press, the New York Herald, and Vanity Fair. She ultimately becomes a fashion editor for Vogue in Paris. Intelligent, wealthy, fashionable, and accomplished, dark-haired and grave, a devout Catholic, she has a great many suitors—and naturally falls for the least suitable, a struggling and already married writer named Ernest Hemingway.

Pauline becomes a close friend of Hemingway and his then-wife Hadley.  Ernest, never a model of domestic virtue, manages to divorce Hadley, and Pauline marries him in 1927, seven months after his first big success, The Sun Also Rises—ironically dedicated to Hadley. Ernest goes on to write much of A Farewell to Arms in Piggott, Arkansas.

The couple have two children, Patrick and Gregory. Pauline, desperate to keep the philandering Hemingway with her, often leaves the children at their home in Key West to follow Papa to Europe, Africa, Cuba, and Wyoming. But it doesn’t work. Ernest gets a divorce in 1940, a month after For Whom the Bell Tolls. Meanwhile the children will blame her, not their glamorous father, for their abandonment and will resent her all their lives.

Pauline will die of a brain hemorrhage and be buried in an unmarked grave in Hollywood, California. In the 1988 film Hemingway, she will be played by Marisa Berenson (left).

Today, the Hemingway-Pfeiffer Museum and Educational Center is operated in the old Pfeiffer home by Arkansas State University.

Meanwhile, uncle Gus Pfeiffer has moved to New York. He enjoys occasional marlin fishing with Hemingway, but he is an astute businessman and the company prospers. He and his wife will become notable philanthropists. The Gustavus and Louise Pfeiffer Research Foundation will support numerous medical and educational projects, including endowment of a major chair in medicine at Stanford and in pharmacology at Texas, and will still make substantial medical research grants today.

Gus’s hobby, besides fishing, will come to be chess. He will become the foremost collector of chess sets in the world. His collection is now the property of the Metropolitan Museum of Art.

Uncle Henry Pfeiffer, childless, will also engage in substantial philanthropy. He and his wife Annie will make major gifts to a little Methodist school in Misenheimer, North Carolina, called Mitchell Junior College. The college will be renamed in their honor and will later become Pfeiffer University. They will also endow many other colleges, including (among other things) a library and a chapel at MacMurray College, a science building at Bennett College, and two dormitories at Cornell College.

They will also be responsible for what may be the most hideous college chapel in America, a disappointing Frank Lloyd Wright effort (left) at Florida Southern College named for Annie.

The Pfeiffer company will cease to exist in 2000, when Warner-Lambert is acquired by Pfizer.

As if Australian footy weren't violent enough already . . .

A long-time player for the Western Bulldogs of the Australian Football League has sued the club in what is called a "ground-breaking" breach of contract claim.

Fullback Martin Croft, who retired recently, says that the club induced him to sign a performance-based contract on which he would be paid based on the number of games he played—and then assigned him to a minor league affiliate, the Werribee Tigers of the Victorian Football League, so that he had no opportunity to perform.  The assignment came immediately after a remarkable five-goal performance in a game against the Kangaroos.

The AFL Players Association has decided to back Croft on the claim, which is the first in the history of a league that goes back to 1896.

Copyright v. Contract

One of the functions of contract law is to permit parties to define property rights among themselves, expanding or contracting them at their mutual pleasure.

Does the equation change when we are talking about intellectual property?  This is a matter of some controversy, and David Rice (Roger Williams) weighs in on the topic in a new article, Copyright and Contract: Preemption After Bowers v. Baystate, just out in the Roger Williams University Law Review.  Rice (left) makes the case that federal copyright law preempts and displaces contract law, and that courts who approve software "licenses" that extend the scope of copyright protection are failing to carry out Congressional intent.   (No link available.)

Contracts and Christian social thought

Several contracts teachers will be on the panel this January in San Francisco for Taking Christian Legal Thought Seriously. The day-long session, sponsored by Law Professors’ Christian Fellowship, the Journal of Catholic Social Thought, and Lumen Christi, runs concurrently with the AALS program and will be held a few blocks away at the Hotel Monaco.

Unfortunately, the afternoon part of the proceedings conflicts with the Section's meeting, which is scheduled for 1:30 on Saturday.

Among the panelists are John Breen (Loyola-Chicago), James Gordley (UC Berkeley), Scott Pryor (Regent), and Mark Scarberry (Pepperdine).

David W. Carroll (1932-2004)

The faculty news publication from Southern Cal notes the death of longtime contracts teacher and scholar David W. Carroll.

Carroll, who was 72, overcame childhood polio that left him a triplegic, to become a successful practicing attorney and law professor at Toledo.  He spent four years teaching in Nigeria and Uganda, before joining the USC law faculty in 1975.  He retired in 1992.

Contract suit against novelist Patterson can go forward

A woman who claims that her ex-fiancé stole her ideas to use in his best-selling novels will get a chance to prove her breach of contract claim.  A New York judge threw out several claims against novelist James Patterson, but agreed that Christina Sharp can proceed on her contract claims.

Sharp had a romantic relationship with Patterson and the parties had planned to wed until they broke up in 1997.  Sharp says that Patterson asked her to help him with some of the romantic passages in his subsequent, best-selling Cat and Mouse. She says she did not ask for compensation because she thought they would be sharing the benefits after their marriage.

Too many Brennans spoil the broth

A long-running feud among the members of one of New Orleans’s leading restaurant families will go back to court for yet another round.  Members of the Brennan family—which control such famous Crescent City eateries as the original Brennan’s (left), Commander's Palace, Mr. B’s Bistro, Bacco, Ralph Brennan's Red Fish Grill, and Ralph's on the Park, as well as units in Las Vegas, Houston, and California—are again trying to stop Cousin Dickie Brennan from using the family name.

The interesting point this time is that the newest battle is over a settlement agreement from a previous round of the litigation. In 1998, the various Brennans agreed to a settlement that let Dickie continue to use the Brennan name.  But his cousins sued him in 2000, claiming he had breached the agreement in the way he used the Brennan name in his own Dickie Brennan’s Steakhouse and other restaurants.  They won a jury verdict in 2002, but the jury found that the breach was not substantial enough to terminate the agreement.

Now they’re trying again, arguing that since the 1998 settlement has no termination date, it is terminable at will. They have sent Cousin Dickie a termination notice. Lawyers for Dickie argue that the claim is too late; issues about the prior agreement should have been raised in the 2000 lawsuit.

Chomsky joins ContractsProf as co-editor

The Contract Section web site has a new co-editor. Longtime Section listserve manager Carol Chomsky (Minnesota) has agreed to take the job. Chomsky (as almost all of you know) is a former co-president of the Society of American Law Teachers, president of Minnesota Women Lawyers, and is a member of the American Law Institute.

She has taught at Minnesota since 1985.

Estate of adjunct whistleblower sues university

Attorneys for the estate of a former adjunct music instructor at Western New Mexico University are suing the school, claiming breach of contract, retaliatory discharge, and civil rights violations.

Charlotte Ashford, then 39, was refused renewal of her adjunct teaching contract after she brought forward student complaints against a tenure-track associate professor. The estate says that Ashford got consistently high student ratings and that her retention was supported by her department chair.  The decision came after she raised questions about how one of the tenure-track faculty had been treating students.

The former adjunct died of cancer in August.

Quis custodiet ipsos custodes?

The question of accountability looms large in situations where the government uses contracts with private entities perform services for it. Steven Schooner (George Washington) examines the problem in light of the Iraq prison scandal in a new paper, Contractor Atrocities at Abu Ghraib: Compromised Accountability in a Streamlined, Outsourced Government, which will be published in a forthcoming issue of the Stanford Law & Policy Review.  Click on the link at the bottom of this entry for the abstract.

Schooner (left) also has a new piece out in Legal Times, co-written with colleague Christopher Yukins, exploring the problems that have plagued the government’s drive to make contracting more efficient.

ABSTRACT

Staggering numbers of contractor personnel have supported, and continue to support, American combat and peace-keeping troops and the government's Herculean reconstruction efforts in Iraq. Yet recent experiences in Iraq, particularly allegations that contractor personnel were involved in inappropriate and potentially illegal activities at the Abu Ghraib prison, expose numerous areas of concern with regard to the current state of federal public procurement. Sadly, because these incidents coincide with a series of procurement scandals, the likes of which the government has not experienced since the late 1980's, they cannot be dismissed so easily as anomalies.

The Abu Ghraib abuses suggest at least two matters that cry out for government-wide attention and intervention. First, the federal government must devote more resources to contract administration, management, and oversight. This investment is an urgent priority given the combination of the 1990's Congressionally-mandated acquisition workforce reductions and the Bush administration's relentless pressure to accelerate the outsourcing trend. Second, the proliferation of interagency indefinite-delivery contract vehicles, and the perverse incentives that derive from these fee-based purchasing vehicles, have prompted troubling pathologies in public contracting that require correction and constraint.

Finally, something Richard Posner and Fred Rodell can agree on

If you’ve ever had one of those conversations with a colleague from another department about publishing, you’ve probably heard the envious questions:

"You mean, you can send it out to as many journals as you want?"

"You can get an answer in weeks?"

"You don’t have to revise it to deal with inane comments by the anonymous mossbacks that particular journal always relies on to butcher anything new and different?"

"They don’t make you cut half of it out?"

Well, that’s the good side to the law review process. The bad side, says Judge Richard Posner (left) in a recent piece in Legal Affairs, Against the Law Reviews, is that (among other things) articles are too long and are not vetted by people who have any idea what they’re doing.

The reader response is mixed.  Thanks to Marie Reilly (South Carolina) for forwarding the article.

Revaluing Williston

In his day, Samuel Williston must have been a giant—not only the greatest contract scholar of the times, but widely popular with practicing lawyers and influential with legislators.  No legal scholar has had more influence on modern contract law than Williston; much of the work of scholars like Corbin and Llewellyn is simply remodeling the house designed by Williston in the First Restatement and the Uniform Sales Act.

Yet generations of internecine scholarly warfare have reduced his reputation these days to that of a dim-witted ivory tower pedant whose jurisprudence was as pointless and unreal as that of any any medieval Schoolman. Only Christopher Columbus Langdell falls lower on the totem pole than Williston—perhaps because "Christopher Columbus Langdell" is a more absurd name.

In a new article, Rediscovering Williston, Mark Movsesian (Hofstra) goes back and looks at Williston’s work, finding it less "arid and conceptual" than it is usually regarded.  Movsesian is not a Williston partisan, but a fair-minded critic who finds a great deal more pragmatism in the old man than his reputation might suggest.

The article is forthcoming in the Washington and Lee Law Review.

ABSTRACT

This is an intellectual history of classical contracts scholar Samuel Williston. I argue that the conventional account of Williston's jurisprudence presents an incomplete and distorted picture. While much of Williston's work can strike a contemporary reader as arid and conceptual, there are strong elements of pragmatism as well. Williston insists that doctrine be justified in terms of real-world consequences, maintains that rules can have only presumptive force, and offers institutional explanations for judicial restraint. As a result, his scholarship shares more in common with today's new formalism than we commonly suppose. Even the undertheorized quality of Williston's scholarship—to modern readers, the least appealing aspect of his work—makes a certain amount of sense, given his goals and intended audience.

Lady Duff Gordon dress hits the block tomorrow

Want a piece of Lucy lore from Wood v. Lucy, Lady Duff Gordon?  Jim Fishman (Pace) points out that an original gown by the couturier known as "Lucile" is up for auction tomorrow in the "Couture, Textiles, and Accessories" sale at the Doyle New York auction house.  It's the dress on the cover, but to see the item web page you'll need to do a search on "Lucile."

Pre-sale estimate on the gown, which is said to be from Lady Duff Gordon's first American collection, is $5,000-$7,000.

The Doyle catalogue entry follows.

The rich informal design of purple velvet voided overall to metallic gold silk gauze in an Orientalist meandering cloud motif, lined in purple silk chiffon, comprising a stitched demi-empire surplice bodice over a camisole of light ochre silk with chiffon and hammered gold lace inset, the weighted outer skirt shaped as modified surplice at left front to reveal weighted underskirt of light ochre silk with purple chiffon overlay, an iridescent lime to lemon silk satin self backed sash concluding in metallic gold fringe, Oriental poppy corsage of metallic gold gauze lined in purple velvet, size 2/4, labeled: Lucile Ltd./37 West 36th St/New York.  Very good condition, some wear to chiffon.

Lucile, Lady Duff Gordon, (1863 - 1935), was the first internationally celebrated British woman couturier, due not only to her innovative haute bohemian design and dressmaking skills but also her flair for marketing and publicity. Having dressed the aristocracy, royalty and stage stars of Europe from her couture salon in London such as the Queens of England and Spain, Lady Randolph Churchill, Consuelo, Duchess of Marlborough, Lillie Langtry, Isadora Ducan et al., she went on to open salons in New York, Paris and Chicago from 1910 to 1915, dressing celebrities such as Irene Castle, Marion Davis and Mary Pickford among others, and society clients like Gertrude Vanderbilt Whitney, Rita Lydig, and Elsie de Wolf. Lucile was the first designer to express individual style, calling her designs 'Personality' dresses, rather than copying French designs which was the norm. She used willowy live models in glamorous themed fashion shows, also firsts. She dropped necklines, slit skirts and did away with corsets with masterful workmanship. In the sexually adventurous world of Edwardian society, the freedom of her uncorseted gowns had its uses, and between the relaxation of old aristrocratic mores and the incredible wealth of the Belle Epoch, women flocked to Lucile to have something unique designed to liberate their individual personalities. Her sister, Elinor Glyn, coined the term the 'It Girl' in her 1907 best selling novel Three Weeks, (see lot/pc 3856) one of the most infamous euphemisms of the 20th century.

This lot appears to be from Lucile's American debut collection and is a superb example of her talents, not only revealing her passion for color and her emotional, impressionistic design, but also because it reveals the charged personality, the 'It', of Margaret Daly Brown.

Designing the It Girl: Lucile and her Style is the Fashion Institute of Technology's Spring show, February 28 - April 16 2005.

Estimate $5,000-7,000

Paula Abdul's very broad force majeure clause

If singer/dancer Paula Abdul’s flight gets canceled or she gets sick and misses a concert, she may be entitled to be paid by the promoter anyway, as long as it’s not her fault.

An odd force majeure clause in her tour contract provides:

In the event that ARTIST is unable to perform during the period of time specified in the Contract due to no fault of her own, ARTIST shall be paid the full compensation agreed upon without the necessity of ARTIST’S performing.