Thursday, October 27, 2005
It's a little late, but the University of Georgia has announced that Robert P. Bartlett, III, has been brought on board this fall as a new assistant professor who will teach contracts and payment systems.
Bartlett got his B.A. and J.D. from Harvard, where he was a Notes Editor for the Harvard Law Review. He practiced for several years doing complex business transactions, and has written a number of things that show he actually knows their practical aspects, including things like Understanding Price-Based Antidilution Protection: Five Principles to Apply When Negotiating a Down-Round Financing in The Business Lawyer. Before joining the faculty at the Athens (Ga.) school, Bartlett was a visiting assistant professor at Fordham Law School.
1430: Grand Prince Vytautas of Lithuania, known as “the Great,” dies just weeks before the arrival of the crown that would have given him the title of king. Vytautas Magnus University and its Law School (left) are named for him.
1811: Isaac Merritt Singer is born at Pittstown, New York. He’ll develop a knack for inventing things as a way of paying for his career as an actor, but will later discover that the sewing machine is more profitable than show business.
1838: Missouri Governor Lilburn Boggs orders all Mormons to be driven from the state.
1904: The New York City Subway opens. Because private investors didn't believe that the costs of digging the tunnels would ever be profitable, the city used public funds to build them and contracts with the Interborough Rapid Transit Co. to maintain and operate the trains, splitting the 5-cent fare.
1940: Crime boss John Joseph Gotti, Jr., is born at the Bronx, New York. His career will prove that if you leave it on the stove long enough on high enough heat, stuff will stick to Teflon.
1986: In what comes to be known as the Big Bang, the Thatcher government deregulates the London Stock Exchange, removing fixed commissions and allowing securities firms to act as broker-dealers.
1997: Newly implemented New York Stock Exchange “circuit breakers” are tripped as an economic scare in Asia causes major drops in all the world’s major exchanges. The U.S. market will mostly recover the next day.
This week, the Source, a hip-hop magazine, has sued Black Entertainment Television (BET) and two of its executives for $100 million for breach of contract. The complaint apparently alleges that BET, a Viacom-owned network, backed out of an agreement to televise The Source Awards on October 25. "Stay tuned" for more details.
[Meredith R. Miller]
Wednesday, October 26, 2005
Is a claim of fraudulent inducement based on pre-contractual representations defeated by a merger clause? A recent case holds that "it depends."
In an insurance case, Magistrate Judge Pepe of the Eastern District of Michigan held that “representations of fact made by one party to another to induce that party to enter into a contract” are not “wiped away” by a merger clause. Otherwise, a savvy but shady character could commit fraud in the inducement and protect herself with a merger clause. However, in the situation where “collateral agreements or understandings between two parties . . . are not expressed in a written contract,” those oral agreements are eviscerated by a merger clause, even if they were the product of fraud.
Judge Pepe noted that, then, the question is “when does fraud invalidate an entire contract, and when is it such that it provides no remedy or recourse if there is a written contract with a merger clause?” His answer:
fraud will invalidate a contract when a party’s assent to said contract is induced through justified reliance upon a fraudulent misrepresentation. A merger clause can render reliance unjustified as to agreements, promises or understandings related to performances that are not included in the written agreement.
The court held that the "key element" in cases involving merger clauses is:
whether one justifiably relied on the representations of another when the parties’ written agreement clearly stated that by signing the document they were agreeing that the document made up the parties’ entire agreement regarding the terms of the contract and its performance standards.
Star Ins. Co. v. United Commercial Ins. (E.D. Mich. Sept. 30, 2005).
[Meredith R. Miller]
Contracts and commercial law prof Philip T. Lacy has been named Interim Dean of the University of South Carolina School of Law.
Lacy, who got his B.A. at Duke and his LL.B. at Virginia, has taught at South Carolina for 30 years, the last fourteen as associate dean for academic affairs. A noted Article 9 expert, he's best known to the world outside academia as co-author of Clark Boardman Callaghan's four-volume Uniform Commercial Code Transaction Guide.
Fordham Law School has announced creation of the new T. J. Maloney Chair in Business Law. The new position -- one of four recently created at the school -- is funded by a $2 million grant from the eponymous alum, who is president of Lincolnshire Management, a private equity firm. Fordham has plans to add three more chairs in the relatively near future.
1825: With cannons firing in celebration, the $7.6 million Erie Canal opens. It will ensure that New York City becomes the principal port for the growing Great Lakes region.
1854: Cereal entrepreneur Charles William “C.W.” Post is born at Springfield, Illinois. His big secret will not be his products (Grape Nuts, Post Toasties), which he largely copies from Kellogg's, but his realization that sophisticated print advertising could be used to sell mass-market brands.
1863: At the Freemasons Tavern on Great Queen Street in London, the Football Association is formed.
1881: Sheriff Virgil Earp’s efforts to enforce a local gun control ordinance leads to three corpses and several men seriously wounded at the O.K. Corral in Tombstone, Arizona Territory.
1931: Chicago White Sox owner (and former baseball player) Charles Comiskey dies at Eagle River, Wisconsin. In 1919 he ordered star pitcher Eddie Cicotte, who had 29 wins to be benched at the end of the season to prevent him from collecting a contractual bonus he’d receive for 30 wins.
1948: An atmospheric inversion in the Monongahela Valley traps emissions from local zinc works and steel mills in the fog at Donora, Pennsylvania. At least 20 people will die and 7,000 people will be hospitalized.
1985: All of the “present” events in the film Back to the Future occur on this date.
1991: A 33-year-old art aficionado is crushed to death when a 485-pound umbrella, part of an installation called "Umbrellas" by artist Christo, comes loose in the wind and pins her against a boulder.
Tuesday, October 25, 2005
Few more contractual documents are more ambitious than the things that have come to be known as End User License Agreements. (Remember, "By opening this package you agree to spend the rest of your life as Bill Gates's towel boy"?) Tom Joo (UC-Davis) forwards this nice discussion that "translates" some of the various clauses into English.
The relatives of a deceased Hmong woman are suing a California cemetery for breach of contract. They allege that they were sold a burial plot that “already contained rusty casket handles” and human remains. Although the allegations, if true, would be disturbing no matter what the context, in the Hmong cultural tradition, improper burial could also stall deceased’s journey to the spirit world. [Hat-tip: Gariel Nehoum]
1154: Nineteen bloody years of civil war and constant upheaval finally come to an end with the death of King Stephen and the ascension of his longtime rival and adopted heir, Henry II.
1495: King João II of Portugal dies at age 40. He refused to sponsor Columbus’s voyage to the west, not because he thought the world was flat, but because Portuguese mariners knew that that the globe was much bigger than Columbus estimated.
1683: Lord Chief Justice Sir William Scroggs (“perhaps the worst of the judges who disgraced the English bench at a period when it had sunk to the lowest degradation”) dies at London.
1828: The St. Katharine Docks open in London. Their inadequate size means that they’ll always be something of a failure as commercial docks, but in the 1970s they’ll become a very nice marina for pleasure boats.
1861: Twenty-four men gather at the local Masonic Hall to create the Toronto Stock Exchange. Today it’s the fourth biggest in North America.
1938: The Archbishop of Dubuque denounces “swing” music as degenerate and says that it will create a “primrose path to hell.” No one believes him, but World War II breaks out just months later.
1993: The little guy from Shawinigan, Jean Chrétien (Laval Law 1958), becomes Prime Minister of Canada.
Monday, October 24, 2005
Few changes in this week's Top 10, although one of the papers from the recent Michigan Boilerplate conference debuts at number 10. Following are the top ten most-downloaded papers from the SSRN Journal of Contract and Commercial Law for the 60 days ending October 23, 2005. (Last week's ranking in parentheses.)
1 (1) Risk Management in Long-Term Contracts, Victor P. Goldberg (Columbia).
2 (3) Katrina's Continuing Impact on Procurement -- Emergency Procurement Powers in H.R. 3766, Christopher R. Yukins & Joshua I. Schwartz (Geo. Washington).
3 (2) Bargaining Power in Contract Theory, Daniel D. Barnhizer (Michigan State).
4 (4) Are Heuristics a Problem or a Solution?, Douglas A. Kysar (Cornell).
5 (8) Resolving the Paradox of the Consideration Doctrine: The Implications of Inefficient Signaling and of Anti-Commodification Norms, David Scott Gamage (Texas) & Allon Kedem (Law Clerk)
6 (7) Competition and the Quality of Standard Form Contracts: An Empirical Analysis of Software License Agreements, Florencia Marotta-Wurgler (NYU).
7 (6) Are 'Pay Now, Terms Later' Contracts Worse for Buyers? Evidence from Software License Agreements, Florencia Marotta-Wurgler (NYU).
8 (9) Credit Card Accountability. Samuel Issacharoff & Erin F. Delaney (NYU).
9 (10) The Myth of the Rational Borrower: Rationality, Behaviorism, and the Misguided 'Reform' of Bankruptcy Law, Susan Block-Lieb (Fordham) & Edward J. Janger(Brooklyn).
10 (-) The Hidden Roles of Boilerplate in Standard Form Contracts, David Gilo & Ariel Porat (Tel Aviv).
A hotel manager refused to rent a room to a blind man (plaintiff) because he was accompanied by a guide dog. Plaintiff sued the hotel and its manager, asserting federal and state discrimination claims and various tort claims. Plaintiff also sued on a breach of contract theory. The hotel moved for summary judgment on the breach of contract claim, arguing that mental and emotional damages alone are insufficient to maintain a breach of contract action. The District Court for the Middle District of Alabama granted the motion for summary judgment and dismissed the breach of contract claim.
The court noted:
The general rule is that plaintiffs may not recover for mental anguish on breach of contract claims. However, an exception to this rule exists "where the contractual duty or obligation is so coupled with matters of mental concern or solicitude, or with the feelings of the party to whom the duty is owed, that a breach of that duty will necessarily or reasonably result in mental anguish or suffering." (citations omitted)
The court held that contracts for the rental of hotel rooms did not fall within this exception, and observed that "the majority of cases falling within this exception regard breaches of contract that render homes uninhabitable." However, the court distinguished a hotel room from a home:
While hotel rooms may take on the temporary role of one's "castle," as a home would, hotel rooms are drastically dissimilar from homes in terms of the amount of money invested, the amount of care taken in upkeep, and the amount of thought and emotional concern invested.
Hardesty v. CPRM Corp. (M.D. Ala. Jun. 1, 2005)
[Meredith R. Miller]
An interesting bit of historical contracting is on sale at eBay: the original 1947 publishing contract for Babe Ruth's autobiography "as told to" Robert Considine. The contract itself isn't famous, but the typewritten changes and interlineations on the standard form allow you to see the various points of negotiations in a way that a modern signed contract can't.
You can read it online, but you'll probably have to pay a fair amount to own it.
1648: The modern international system of nation-states is more or less officially born with the signing of the Peace of Westphalia.
1852: Daniel Webster, whose defense of Dartmouth College struck a major blow to public higher education in the Northeast, dies at his home at Marshfield, Massachusetts.
1855: Utica, New York lawyer and businessman James Schoolcraft Sherman is born at Utica. He'll become Vice President of the United States under William Howard Taft.
1861: The Western Union Co. completes the first transcontinental telegraph line, linking Sacramento, California, to the East.
1929: On "Black Thursday," the Dow Jones Industrial Average takes a sudden drop, spreading panic. The Chicago and Buffalo stock exchanges close their doors and eleven prominent financiers kill themselves, before an afternoon rally restores order to the market.
1945: Having temporarily reinstated the death penalty for the purpose, the Norwegian government sends Vidkun Quisling and two associates to a firing squad.
2003: Supersonic passenger fight comes to an end with the last regular British Airways Concorde flight. The plane, loaded with celebrities, crosses the Atlantic in 3.5 hours but must spend 45 minutes taxiing around Heathrow Airport.
Sunday, October 23, 2005
[Circus master Amos Calloway is talking Karl the Giant into signing a deal.]
Calloway: Tell me, Karl, have you ever heard the term "involuntary servitude"?
Calloway: "Unconscionable contract"?
Karl: Uh, nope.
Big Fish (2003)
1456: One of the relatively few lawyers to achieve sainthood, Giovanni da Capistrano (in Spanish, San Juan Capistrano) dies at Villach, Hungary, after helping lead the Crusade that saved Belgrade from Ottoman conquest.
1739: After a British captain displays his ear, allegedly severed by Spanish authorities, Parliament declares war on Spain. It will come to be known as the War of Jenkins' Ear.
1813: As a result of the war with Britain, the Pacific Fur Company's trading post at Astoria, Oregon, is taken over by the British North West Company, which will go on to dominate fur trading in the region for a quarter of a century.
1835: Small-town Illinois lawyer Adlai Ewing Stevenson I is born at Christian County, Kentucky. He'll go 3-5 in election campaigns, but one of the wins will be as Vice President in Grover Cleveland's first administration.
1861: Again ignoring a prior order from Chief Justice Taney, President Lincoln suspends the writ of habeas corpus in Washington, D.C.
1946: The United Nations General Assembly convenes for the first time, at Flushing Meadow in New York City.
1987: Ushering in the modern era of partisan political battles over judicial nominees, the U.S. Senate rejects Judge Robert Bork for a seat on the U.S. Supreme Court.
Saturday, October 22, 2005
American Express filed a lawsuit this week against a chief executive of Savvis Communications, a publicly held telecommunications company. The complaint, which includes causes of action for breach of contract and unjust enrichment, alleges that the executive and three guests ran up a $241,000 tab at a Scores, a popular "topless" nightclub in Manhattan. It alleges that he charged the evening's activities on his American Express card, and he has failed to pay the bill. The executive and Savvis' counsel assert that some of the charges were fraudulent. Apparently, the Manhattan D.A. is presently investigating alleged overcharges at Scores.
[Meredith R. Miller]
But, to a certain extent, the mere change of law is of itself prejudicial to the common good: because custom avails much for the observance of laws, seeing that what is done contrary to general custom, even in slight matters, is looked upon as grave. Consequently, when a law is changed, the binding power of the law is diminished, in so far as custom is abolished. Wherefore human law should never be changed, unless, in some way or other, the common weal be compensated according to the extent of the harm done in this respect.
St. Thomas Aquinas, Summa Theologica (Benziger Bros. edition, 1947)
First part of the second part, question 97, article 2
The most famous contracts professor of all time isn't Langdell, Williston, Corbin, or Llewellyn. It's Harvard's Charles W. Kingsfield, Jr., whose larger-than-life persona still broods over the academy more than 30 years after he appears in The Paper Chase.
In The Shadow of Professor Kingsfield: Contemporary Dilemmas Facing Women Law Professors, forthcoming in the William & Mary Journal of Women and the Law, Martha Chamallas (Ohio State) looks at "the predicament of women law professors in an era when the representation of women on law faculties has reached a 'critical mass.'" She "explores three mechanisms for reproducing gender inequality: (1) self-fulfilling stereotypes, (2) gender-specific comparison groups, and (3) the accumulation of small disadvantages." And she "uses stories from her own and colleagues' experiences to illustrate contemporary forms of bias."