ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Saturday, March 19, 2005

Cases: Lessee has burden under Art. 2A

Ohio_flag_1 A defendant who wants to argue that a creditor’s sale under UCC § 2A-523 is unreasonable and that a lessor’s calculation of late fees and penalties are invalid under § 2A-504 may have a tough row to hoe in Ohio, under a new decision from the Court of Appeals.

The defendant defaulted on her automobile lease with GMAC, which repossessed the car and ultimately sold it. She made payments under an agreed-upon repayment schedule, but later defaulted again and GMAC sued.  The company moved for summary judgment based on affidavits by its record keeper, claiming that the total amount owed was now $7,512.  The defendant argued that the this amount was in dispute, since GMAC used different figures in its summary judgment motion, its complaint, and the affidavit submitted in support, and did not explain how the various payments had been credited.  She also argued that there was no evidence that the sale had been done in a reasonable manner.

That wasn’t enough to raise an issue of fact for the court. Although GMAC did not explain the discrepancy, the court speculated that it might have been due to the different times at which the documents were prepared, reflecting different balances. Similarly, there was no evidence that the sale was not reasonable—there was no evidence at all on the point—and therefore summary judgment was appropriate.

GMAC v. Ferguson, No. 04AP-795, 2005 Ohio 899, 2005 Ohio App. LEXIS 896.

March 19, 2005 in Recent Cases | Permalink | TrackBack (0)

Today in history—March 20

1602: The first great modern commercial enterprise, the Dutch East India Company, is founded.

1793: William Murray, 1st Earl of Mansfield, the Chief Justice whose was perhaps England's greatest commercial jurist, dies at London.

1852: Boston’s J.P. Jewett takes a chance by publishing a work by an unknown author.  Harriet Beecher Stowe’s Uncle Tom’s Cabin, or Life Among the Lowly will sell an unprecedented 500,000 copies by 1857.

1869: William E. Story agrees to pay his 15-year-old nephew William 2d $5,000 if the latter will "refrain from drinking, using tobacco, swearing, and playing cards or billiards for money until he became 21 years of age."

1883: The Paris Convention for the Protection of Industrial Property is signed.

1904: The father of behavioral psychology, Burrhus Frederic Skinner, is born at Susquehanna, Pennsylvania. The story that he raised his daughter in a Skinner box is an urban legend. Probably, anyway.

1916: Albert Einstein, one of the relatively few scientists whose name will become a registered trademark, publishes his The Foundation of the General Theory of Relativity.

1934: San Francisco Mayor and longtime California Assembly Speaker Willie Lewis Brown, Jr. (Hastings Law 1958) is born at Mineola, Texas.

1939: Future Montreal lawyer and Canadian Prime Minister Brian Mulroney (Laval Law 1964) is born at Baie-Comeau, Quebec.

1941: Securities and Exchange Commissioner Jerome New Frank is confirmed by the Senate to the U.S. Court of Appeals for the 1st Circuit.

March 19, 2005 in Today in History | Permalink | TrackBack (0)

Film Clips

From Notting Hill (1999):

   Anna: What’s so annoying is now I’m so totally fierce when it comes to nudity clauses.
   William: You have clauses in your contract?
   Anna: Yeah. "you may show the dent at the top of the artist’s buttocks, but neither cheek or if a stunt bottom is being used, artists must have full consultation."
   William: You have a stunt bottom?
   Anna: I could have a stunt bottom, yes.
   William: Are people tempted to go for better bottoms than their own?
   Anna: Well yeah, I would. This is important stuff.
   William: Hell of a thing to put on your passport, "Occupation: 'Mel Gibson’s bottom.'"
   Anna: Actually, Mel does his own ass work. Well why wouldn’t he?

March 19, 2005 in Film Clips | Permalink | TrackBack (0)

Contract Articles

"Strict Liability and the Fault Standard in Corrective Justice Accounts of Contract"

By: Curtis Bridgeman

Florida State University College of Law

Document: Available from the SSRN Electronic Paper Collection:

Paper ID: FSU College of Law, Public Law Reserch Paper No. 146

Date: February 19, 2005

Contact: Curtis Bridgeman


Postal: Florida State University

College of Law

425 W. Jefferson Street

Tallahassee, FL 32306

Phone: 850-644-6075


Corrective-justice theorists have enjoyed a certain amount of success explaining tort law. Some of these theorists have begun to apply corrective-justice theory to the law of contract, but they have not yet explained how corrective justice, which normally argues that private law is concerned with the correction of wrongdoing done to victims by injurers, can explain a body of law like contract that seems indifferent to wrongdoing. In this paper, I argue that void is a problem for corrective-justice theories of contract, since although contract compensates for breach it does not do so as a way of responding to breach as a form of moral wrongdoing. Corrective justice can still explain contract law, however, because there is a way of understanding corrective justice as the view that private law compensates for losses that are wrongful even though they may or may not be the result of wrongdoing. Moreover, I argue that by understanding corrective justice in this way we achieve a general theory of contract that is more acceptable from the point of view of political liberalism than the current non-corrective accounts of contract.

March 19, 2005 in Recent Scholarship | Permalink | TrackBack (0)

Today in history—March 19

1831: The first bank robbery in U.S. history occurs, as malefactors hit the City Bank of New York for $245,000—or something over $5 million in 2003 dollars.

1891: Future California governor, Republican vice-presidential nominee, and Chief Justice Earl Warren (UC-Berkeley Law 1917) is born at Los Angeles.

1914: John Jay Berwanger is born at Dubuque, Iowa. He is not only the only Heisman Trophy winner from the University of Chicago, but the only one to be tackled by a future president of the United States, Gerald Ford of the University of Michigan.

1918: The U.S. Congress establishes time zones for the United States, although railroads have been using them for decades, and daylight savings time.

1920: The U.S. Senate refuses to ratify the Versailles Treaty after President Wilson refuses to accept any modifications.

1950: Former wholesale pencil sharpener distributor and Tarzan creator Edgar Rice Burroughs dies at Encino, California. He was the first major author to set up his own company to publish his own books, cutting out the middlemen.

1979: The nation is riveted to its television sets as the U.S. House of Representatives begins broadcasting live coverage of its proceedings on the C-SPAN network.  Well, this might be an exaggeration.

March 19, 2005 in Today in History | Permalink | TrackBack (0)

Friday, March 18, 2005

Cases: No special language required for accord & satisfaction

New_york_flag_1 A plaintiff who demanded and accepted a specific amount as due him from a breach had entered into an accord and satisfaction, said the New York Appellate Division, even though the defendants did not tell him they intended such a thing and even though the check made in payment did not reflect it.

The issue in any accord and satisfaction case, said the court, is what the parties intended.  Here, the plaintiff had demanded the precise amount that at the time he thought he was owed.  Defendants paid that full amount. Under these circumstances, both parties should have understood they were working an accord and satisfaction of the dispute.

Horn v. PTJP Partners, LP., No. 5470 et al., 2005 N.Y. App. Div. LEXIS 2069 (1st Dept. March 1, 2005).

March 18, 2005 in Recent Cases | Permalink | TrackBack (0)

First, get paid

Henny Youngman's first rule for aspiring entertainers was, "Get the money."  That can be easier said than done.

Struggling musicial "artists" and those who represent them present a fertile ground for misunderstanding or even overreaching.  The problem is ubiquitous—a recent story from Kenya details the contract woes of young musicians for whom everything seems to be going right—except that they aren’t getting any money.

March 18, 2005 in In the News | Permalink | TrackBack (0)

... and Arkansas Makes Eight (and Counting)

Arkansas's version of Revised Article 1 -- formerly HB 1497, now Act 856 -- has become law.  Act 856 includes the uniform R1-201(b)(20) "good faith" definition (bringing the running tally to four states that have adopted uniform R1-201(b)(20) and four states that have retained the definition from pre-revised 1-201(19)) but rejects uniform R1-301 in favor of language tracking pre-revised 1-105.  (As such, uniform R1-301 is now 0-for-8.)

Elsewhere, New Mexico HB 834 passed the Senate unanimously and has been transmitted to the Governor.  Like Arkansas Act 856, New Mexico HB 834 includes the uniform R1-201(b)(20) "good faith" definition and rejects uniform R1-301 in favor of language tracking pre-revised 1-105.

More than a month after Oklahoma HB 2028 had been introduced, the Oklahoma House Judiciary Committee adroitly "substituted" a comprehensive Article 1 revision for the original version of HB 2028, which only proposed amending pre-revised 1-102  (If you don't believe me, go to, click on "Text of Measures," and compare the texts of the "Introduced" version of HB 2028 and the "Committee Substitute" version.), and recommended its passage.  The House passed an amended version of the committee substitute on March 16th, engrossed it, and sent it to the Senate for its consideration.  Engrossed HB 2028 also includes the uniform R1-201(b)(20) "good faith" definition and rejects uniform R1-301 in favor of language tracking pre-revised 1-105.

And, the Nebraska Legislature has advanced LB 570 (as amended by AM 229 and AM 7027) for engrossment.  The amended version of LB 570 referred for engrossment rejects both uniform R1-201(b)(20) and uniform R1-301 in favor of language tracking pre-revised 1-201(19) and 1-105, respectively.  (Prior to being amended, LB 570 included uniform 1-201(b)(20), but did not include uniform 1-301.  See here.)

March 18, 2005 in Legislation | Permalink | TrackBack (0)

Fair Dealing in European Contract Law

Marjorie Hoch (2005) "Is Fair Dealing a Workable Concept for European Contract Law?", Global Jurist topics: Vol. 5: No. 1, Article 2.


In this paper I will try to determine whether good faith and fair dealing make a couple or whether fair dealing has its own existence and, if not, to which concepts it can be linked. I will also try to determine whether fair dealing can be or become one of the common principles of European contract law. In order to decide whether fair dealing is a workable concept for European contract law, it is first necessary to determine whether it is a workable concept for English law. I will first try to determine whether fair dealing is a concept at all and whether it is necessary. Then I will demonstrate to what extent a general concept of fair dealing would constitute a legal irritant to the legal structure of English law and still to what extent fair dealing's substance might fit the evolutionary spirit of English law. As a result, I will be able to determine to what extent fair dealing is a workable concept for future European contract law.

March 18, 2005 in Recent Scholarship | Permalink | TrackBack (0)

Thursday, March 17, 2005

Cases: No consideration for arbitration clause

Louisiana_flag A manufactured-home buyer who voluntarily signed a manufacturer’s arbitration agreement in connection with a sale was not bound to arbitrate, says the Louisiana Court of Appeals in a recent decision.

The plaintiff bought the home from United Homes. It had been manufactured by Belmont Homes. The plaintiff signed three documents: (1) a bill of sale from United; (2) a delivery agreement with United; and (3) a one-page "Acknowledgment and Agreement" that provided for arbitration between plaintiff and Belmont. This last document had not previously been discussed, but had been presented at the closing. When plaintiff sued United and Belmont for rescission of the deal on various grounds, Belmont responded with an exception of prematurity—in effect, demanding arbitration.

No, said the court. The parties had already agreed on the terms of the sale before the arbitration issue was raised. The plaintiff had no obligation to sign the arbitration agreement, since he was entitled to get the home based on the other two agreements. It was therefore unsupported by consideration in the plaintiff’s deal with United. Belmont tried to argue that its warranty was consideration for the arbitration clause, but this failed, said the court, because Belmont failed to show that its warranty provided plaintiff with anything beyond what the law already required it to provide.

Abshire v. Belmont Homes, Inc., No. 04-1200, 2005 La. App. LEXIS 531 (3d Cir. March 2, 2005).

March 17, 2005 in Recent Cases | Permalink | TrackBack (0)

Today in history—March 18

37: The Roman Senate makes a really bad decision, annulling the will of the Emperor Tiberius and making young Caligula emperor.

1673: Lord Berkeley of Stratton sells his half of New Jersey to the Quakers under William Penn.

1766: Speaking of bad decisions, the English Parliament passes the Stamp Act, which will become wildly unpopular in the American colonies.

1782: One of America’s most original political thinkers, John Caldwell Calhoun, is born near Abbeville, South Carolina.

1837: Stephen Grover Cleveland, the New York lawyer who as sheriff of Buffalo will become the only U.S. President to personally execute a condemned criminal, is born at Caldwell, New Jersey.

1850: Partners Henry Wells and William Fargo found a new business which they call The American Express Co.

1938: Mexican President Lázaro Cárdenas del Río nationalizes all foreign-owned oil resources in the country.

1947: William Crapo Durant, the founder of General Motors, dies at New York City. He lost control of his company in 1920 and virtually his whole fortune (at age 68) in the 1929 crash, but made a second fortune in real estate and bowling alleys.

1968: The U.S. Congress votes to take the country off the gold standard.

1974: OPEC’s five month oil embargo against the U.S. and other allies of Israel ends, but not before we get gas rationing, an "energy czar," and the 55-mile-an-hour speed limit.

March 17, 2005 in Today in History | Permalink | TrackBack (0)

Film Clips

From Interstate 60 (2002)

   Valerie: Valerie McCabe, Yale ‘91.  I’ve got a special rate for visitors, and I know I can win your case.
   Neal: You don’t even know my case.
   Valerie: The Madison case? Nuisance suit. Happens to visitors all the time. Fact is J.J. Madison doesn’t even have a cat. He’s allergic. I could have it thrown out in no time.
   Neal: Wait, he never had a cat? So, why’s he going to sue somebody for it?
   Valerie: Because he can.
   Neal: What?
   Valerie: Every adult citizen of Morlaw is a lawyer, so everybody sues everybody else. It doesn’t matter if there’s a cause. It’s how we ensure that everyone makes a living off their profession.
   Neal: Yeah, but that’s insane.
   Valerie: I could sue you for that. You just made a defamatory remark about his town. Hey, are you looking at my legs?  I could sue you for that too, sexual harassment.
   Neal: Is there anything you can’t sue me for?
   Valerie: Hire me. That way, everything between us is subject to attorney-client privilege. I’m $75 an hour. First hour is free.
   Neal: Well, at least you know my case. All right, you’re hired.

March 17, 2005 in Film Clips | Permalink | TrackBack (0)

Wednesday, March 16, 2005

Cases: Two policies trip up injured woman

Missouri_flag A Missouri woman who happened to be in the wrong family car when she was hit by an under-uninsured motorist is out of luck, according to a decision by the Missouri Court of Appeals.

Chastity Vega was driving in her 1993 Dodge Shadow when she was hit and seriously injured by a pickup truck that carried only $25,000 in insurance.  She sought another $50,000 in under-insured motorist (UIM) coverage from her insurance carrier Shelter.  Turns out, however, that the Vegas not only had two cars, Chastity’s Shadow and husband John’s 1988 Chevy S10 Pickup, but they had two policies, not one joint policy.  Both were provided by Shelter, both apparently from the same agent.  But John’s policy had a UIM provision and Chastity’s didn’t.

When Chastity tried to argue that she ought to be able to recover under John’s policy (which offered coverage for family members in non-insured cars) she ran into a provision that excluded coverage for "bodily injury to an insured while occupying a motor vehicle (other than an insured auto) owned by you or a relative."  She argued that this was ambiguous, but the court had no trouble sorting it out.  She was not in an "insured auto" because under John’s policy that meant the Chevy pickup.  Since she was occupying a vehicle "owned by" her that wasn't the Chevy, she could not recover.

Vega v. Shelter Mut. Ins. Co., No. WD 64135, 2005 Mo. App. LEXIS 342 (W.D. March 1, 2005).

March 16, 2005 in Recent Cases | Permalink | TrackBack (0)

Today in history—March 17

1673: Jacques Marquette and Louis Jolliet begin their explorations. They will subsequently find that the Mississippi River empties into the Gulf of Mexico, spurring French businessmen to begin planning colonization of the region.

1756: New York City holds its first St. Patrick’s Day celebration at the Crown & Thistle Tavern.

1777: Roger Taney is born to a slave-owning, tobacco-planting family in Calvert County, Maryland. He will later be rejected by the Senate as Secretary of the Treasury, but will be confirmed to the less important job of Chief Justice of the Supreme Court.

1845: Rubber manufacturer Stephen Perry of London invents the rubber band.

1834: Automobile entrepreneur Gottlieb Daimler, who will invent both the motorbike and the automobile, is born at Schorndorf, Germany.

1866: U.S. Supreme Court Justice Pierce Butler, who will become one of the leading business lawyers of his day, is born at Pine Bend, Minnesota.

1931: Looking for a way to lure folks to its wide open spaces, Nevada legalizes gambling.  It works.

1959: The Missouri Court of Appeals makes one of the first major uses of promissory estoppel in a straight commercial setting when it decides Feinberg v. Pfeiffer Co.

March 16, 2005 in Today in History | Permalink | TrackBack (0)

We giveth, we taketh away

Employers who pre-pay commissions to sales personnel and then want to take them back when the conditions aren’t fulfilled have got a boost from the California Court of Appeal, says the Sheppard Mullen law firm in a client release relating to the recent decision in Steinhebel v. Los Angeles Times Communications.

March 16, 2005 in Commentary | Permalink | TrackBack (0)

Tuesday, March 15, 2005

Cases: Carnival Cruise redux

Idaho_flag In a case whose facts are nearly identical with those in Carnival Cruise Lines, Inc., v. Shute, 499 U.S. 585 (1991), the Idaho Supreme Court has held that state statutes invalidating choice of forum clauses cannot be applied to actions that occur on the high seas.

Plaintiff was injured on a Royal Caribbean cruise ship, falling as she exited an elevator. She had received her ticket in advance and had been required to sign it before boarding.  It contained a clause requiring suits to be brought in Miami, Florida, but she elected to sue in Ada County, Idaho.

Her lawyers raised a complicated argument involving competing public policies, factors governing forum selection in maritime cases, and Idaho’s own strongly expressed statutory policy against forum selection clauses.  But the court wasn’t impressed. Whatever Idaho’s views of the subject, it said, at least in maritime cases the state courts are bound by Carnival Cruise.

Fisk v. Royal Caribbean Cruises, No. 3004, 2005 Ida. LEXIS 44 (March 4, 2005).

March 15, 2005 in Recent Cases | Permalink | TrackBack (0)

Revised Article 1 in Illinois

Senator Kirk Dillard, who introduced Illinois SB 1647 a few weeks ago, today offered an amendment on the Illinois Senate floor to replace the uniform versions of R1-201(b)(20) and R1-301, which were in the original bill he introduced and the Illinois Senate Judiciary Committee unanimously approved, with pre-revised 1-201(19) and 1-105, respectively.  The Illinois Senate has yet to vote on the amendment.

March 15, 2005 in Legislation | Permalink | TrackBack (0)

Today in history—March 16

1521: Fernão de Magalhães, a/k/a Ferdinand Magellan, on an expedition looking for a trade route to the Far East, reaches the Philippines. That’s as far as he will get, though a few of his crew will finish the trip around the world.

1660: England’s Long Parliament, which had sat throughout much of the Civil War and the Commonwealth since 1641, is dissolved.

1751: The man on the $5,000 bill, James Madison, is born to a wealthy planting family in King George County, Virginia.

1802: President Thomas Jefferson signs legislation creating the United States Military Academy at West Point, New York. Before the quasi-war with France in 1798-1801 he had considered it unconstitutional, but apparently changed his mind.

1819: Dr. John Boston of London discovers hay fever.

1900: Arthur Evans, the heir of a Welsh paper manufacturer, completes his purchases of land around the ruins of Knossos on Crete, preparatory to his excavation of one of the most important Bronze Age civilizations.

1903: "Judge" Roy Bean, the saloonkeeper who as justice of the peace in Langtry, Texas, was the "Law West of the Pecos," dies in bed after an unusually heavy bout of drinking.

1972: Twenty-two years after it is opened as a triumph of modern architecture, the Pruitt-Igoe housing project in St. Louis is demolished. Even poor people don’t like giant cement cubes designed by Bauhaus architects.

March 15, 2005 in Today in History | Permalink | TrackBack (0)

Film clips

From: NewsRadio ("Presence," April 4, 1996)

[Mr. James has been playing poker and mentions that he lost.]
Dave:  What did you lose?
Mr. James:  Bill.
Bill:  Yes, chief?
Mr. James:  Bill.
Bill:  Heard you the first time chief.
Mr. James:  I don’t think you understand, I LOST BILL.
Bill:  You can’t bet me in a poker game.
Mr. James:  I’m afraid I can, check your contract.
     [Bill pulls out his contract]
Dave: You carry around your contract?
Bill: At times like these, it doesn’t sound so ridiculous, now does it?  [Reading]  "Loss of job can be a result of termination, merger, or act of God."  It doesn’t say anything about poker.
Mr. James:  Read your "Act of God" clause.
Bill:  [Reading]  "Mr. James should, and for the sole purpose of this contract only, be referred to as 'God.'"

March 15, 2005 in Film Clips | Permalink | TrackBack (0)

"29 is not 30"

From Eight Men Out (MGM 1988)

Eddie Cicotte: You said if I won 30 games this year there'd be a $10,000 bonus.

Charles Comiskey: So?

Cicotte: I think you owe it to me.

Comiskey: Harry, how many games did Mr. Cicotte win for us this year?

Harry: 29, sir.

Cicotte: You had [Sox manager] Kid [Gleason] bench me for two whole weeks in August.  I missed five starts.

Comiskey: We had to rest your arm for the [World] Series.

Cicotte: I would have won at least two of those games -- and you knew that.

Comiskey: I have to keep the best interests of the club in mind, Eddie.

Cicotte: I think you owe me that bonus.

Comiskey: 29 is not 30, Eddie.  You will get only the money you deserve.  (Pause)  Anything else?

Cicotte: No, Mr. Comiskey.  That's it.

March 15, 2005 in Film Clips | Permalink | TrackBack (0)