ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Saturday, April 2, 2005

Dang, I knew we forgot something

Texas_flag Plaintiffs who bought a Caterpillar tractor from a Caterpillar dealer that failed to operate properly lost their breach of contract action against both the manufacturer and the seller—on the rather bizarre ground that they failed to provide any evidence of a contract with Caterpillar or that there had been a breach by the dealer.

After discovery in the case, both Caterpillar and its dealer, Mustang, moved for summary judgment on the ground that plaintiffs had adduced no evidence of the contracts. Plaintiffs responded with "the entire transcripts of their depositions, their affidavits, the affidavit of [another witness], and several documents related to the purchase of the tractor."  Remarkably, however, the only portions of this evidence that related to whether a contract was made or that the tractor did not work were the two affidavits—and for some reason they weren’t signed.

Texas requires more than a scintilla of evidence, said the state’s court of appeals, and unsigned affidavits won’t do it.

Duke v. Caterpillar, Inc., 2005 Tex. App. LEXIS 1 (Houston–1st Dist., March 10, 2005)

April 2, 2005 in Recent Cases | Permalink | TrackBack (0)

Today in history—April 2

742: Charles the Great is born at Aachen.

1792: Congress passes the Coinage Act, which creates the United States Mint.

1800: One of the earliest legal "dream teams" in U.S. history succeeds, as Alexander Hamilton and Aaron Burr win an acquittal for Levi Weeks in a sensational murder trial.

1863: Angry women riot in Richmond, Virginia, protesting skyrocketing prices for food and other necessities.

1875: Automobile pioneer Walter Chrysler is born at Wamego, Kansas.

1956: Alfred Pritchard Sloan, Jr., the man credited with creating the modern General Motors Corp., steps down as chair at age 80.

1956: CBS Television introduces the first half-hour daytime soap operas, Edge of Night and As the World Turns.

1980: In an effort to stimulate energy production, President Carter signs a bill imposing a tax on oil production.

1982: Congress creates the United States Court of Appeals for the Federal Circuit.

April 2, 2005 in Today in History | Permalink | TrackBack (0)

Revised Article 1 Legislative Update (4/1)

As of April 1, 2005, eight states – Alabama, Arkansas, Delaware, Hawaii, Idaho, Minnesota, Texas, and Virginia – have enacted versions of Revised U.C.C. Article 1 (and all but Arkansas's are now in effect), and bills proposing the adoption of Revised Article 1 await further legislative or executive action in Arizona, Connecticut, Illinois, Kansas, Montana, Nebraska, Nevada, New Hampshire, New Mexico, Oklahoma, and West Virginia.

The newest arrival is West Virginia, where essentially (if not entirely) identical bills were recently introduced in the house (HB 3095) and senate (SB 660).  Both bills reject the "uniform" version of R1-301 and embrace the "uniform" version of R1-201(b)(20).  HB 3095 was introduced on March 18, 2005, and is presently before the House Judiciary Committee.  SB 660 was introduced on March 21, was reported favorably from the Interstate Cooperation Committee on March 25, and is presently before the Senate Judiciary Committee.  Both introductions appear to come too late in the legislative session to have much chance of adoption this year.  The West Virginia Legislature is scheduled to adjourn on April 9; and March 30 was the last day to consider a bill on the third reading in its originating chamber.


Illinois SB 1647's sponsor's floor amendment appears to be languishing in the Senate Rules Committee, and the bill with it. If I am reading the legislative calendar correctly, the Rules Committee – and, if necessary, the Judiciary Committee – must approve the amendment and report amended SB 1647 favorably by April 15 for it to have any chance of enactment this year.

Montana SB 401 has passed both houses of the legislature and will be sent to the governor after being enrolled.

On April 1, the Nebraska Legislature approved LB 570, as amended, by a vote of 48-0-1 and transmitted it to the governor, who must veto LB 570 by the end of the day Thursday, April 7; otherwise, it will become law with or without his signature.

Nevada SB 201 was introduced March 17, 2005, and was referred to the Senate Judiciary Committee.  The committee held a public hearing on March 31 and referred SB 201 to a subcommittee for prompt action.  The deadline for the committee report is April 15.

The New Hampshire House Commerce Committee held a hearing on HB 719 on March 16, 2005.  On March 21, the committee referred the bill to a subcommittee.  On March 22, the committee voted to retain the bill in committee.  This appears to signal that the bill will not pass this session, as March 30 was the deadline for House action on non-budget bills originated in the House.

The New Mexico House and Senates both unanimously approved HB 834 in mid-March.  It still awaits gubernatorial approval.  Governor Bill Richardson has until noon on April 8 to sign HB 834.  If he does not sign it by that deadline, the bill will not become law this year.

The Oklahoma House of Representatives unanimously approved the committee substitute for HB 2028 on March 16.  It is presently before the Senate Judiciary Committee.  The Senate Judiciary Committee must report on HB 2028 by April 7; thereafter, the deadline for final reading in the Senate is April 28 and the Oklahoma Legislature adjourns sine die on May 27.

There has been no indication of progress on Arizona SB 1234, Connecticut HB 5975, or Kansas HB 2453.

The four bills that appear to be closest to enactment – New Mexico HB 834, Montana SB 401, Nebraska LB 570, and Oklahoma HB 2028 – all reject uniform R1-301.  Thus, if Montana SB 401, Nebraska LB 570, New Mexico HB 834, and Oklahoma HB 2028 were enacted in their present forms, the tally would be 12-0 against uniform R1-301.  Moreover, if Montana SB 401, Nebraska LB 570, New Mexico HB 834, and Oklahoma HB 2028 were enacted in their present forms, they would make the split among enacting jurisdictions over the definition of "good faith" 7-5 in favor of uniform R1-201(b)(20) – with Montana, New Mexico, and Oklahoma adopting the new definition in uniform R1-201(b)(20) and Nebraska retaining the pre-revised definitions in 1-201(19) and 2-103(1)(b).

April 2, 2005 in Legislation | Permalink | TrackBack (0)

Friday, April 1, 2005

Northwestern to host drafting conference

Teaching students how to draft contracts will be the subject of what appears to be an excellent upcoming conference at Northwestern University on July 20-21.  It's called, aptly enough, Teaching Contract Drafting.  Among the topics:

* Why Today's Law Schools Should Teach Contract Drafting
* How Contract Concepts and the Business Deal Affect Contract Drafting
* Essential Guidelines for Competent Drafting
* Stand-Alone Drafting Courses
* Merging Drafting Instruction into Substantive Courses
* Teaching Methods and Practical Advice

What's interesting about the conference is that it's bringing together contracts teachers with legal writing and clinical people for what what looks to be a fruitful discussion.  Information is available at the conference's web site.  A PDF of the brochure is here.

April 1, 2005 in Conferences | Permalink | TrackBack (0)

Film clips

From Be Yourself (1930):

Harry Field: A verbal agreement . . .
Fannie Field: . . . is not worth the paper it's written on.

April 1, 2005 in Film Clips | Permalink | TrackBack (0)

Nugent wins breach of contract case

A Michigan jury has awarded Ted Nugent $100,000 for breach of contract in his dispute with a Muskegon, Michigan festival.

Jurors were out only 90 minutes before returning with a finding that the Muskegon Summer Celebration had an oral contract with Nugent, and that when it canceled his appearance because of fear of protesters it breached that deal.  The damages amount included Nugent's $80,000 appearance fee, plus an estimated $20,000 he would have received from sales of albums and merchandise at the festival.  The judge had previously ruled that he could not get consequential damages for his loss to reputation.

Both sides are considering whether to appeal.

April 1, 2005 in In the News | Permalink | TrackBack (0)

Consideration: Lawyer’s promises after retainer is signed

Michigan_flag A lawyer’s representations to a client he was already representing in a divorce proceeding did not become part of the parties’ contract, because they were "modifications" not supported by consideration, according to the Michigan Court of Appeals in an unpublished decision.

In the case, the plaintiff had retained the defendant lawyer to represent her in a divorce. At some point after the retainer was signed, the lawyer allegedly promised that his client would get half the estate plus spousal support. When it turned out that she didn’t get anywhere near that, she sued.

Since the retainer had already been signed, reasoned the court, the lawyer’s promises could only be a modification. Modifications require consideration. The plaintiff argued that her continued employment of the lawyer provided consideration, but the court disagreed. There was no evidence that her continued employment of him was contingent on his promise, and thus no consideration.

Czyzyk v. Irons, 2005 Mich. App. LEXIS 652 (March 10, 2005)

April 1, 2005 in Recent Cases | Permalink | TrackBack (0)

Today in history—April 1

527: Flavius Petrus Sabbatius Iustinianus—known to history as Justinian I—becomes co-ruler of the Eastern Empire.   His greatest monument will be his revisions to the Roman legal code.

1204: Eleanor of Aquitaine, whose decision to divorce the King of France and marry the King of England created a major English presence in France and will lead to several hundred years of intermittent war, dies at 82.

1789: Meeting in New York, the new U.S. House of Representatives elects a Pennsylvania Lutheran clergyman, Frederick Muhlenberg, as its first speaker.

1815: Otto Eduard Leopold von Bismarck, who will study law at the Friedrich Wilhelm University of Berlin and qualify as a laywer in 1835, is born at Schönhausen in Brandenburg.

1826: Samuel Morey of New Hampshire patents a new device that no one can figure out any immediate use for.  It’s called the "internal combustion engine."

1834: Financier James "Big Jim" Fisk is born at Bennington, Vermont.  His attempt, with Jay Gould, to corner the gold market in 1869 will lead to a major financial panic.

1891: The Wm. Wrigley Jr. Co. is founded at Chicago. Its original products will be soap and baking powder, but it will find success when, as a promotion device, it starts including a stick of "chewing gum" with each can of baking powder.

1909: President Taft appoints Billings Learned Hand to U.S. District Court for the Southern District of New York.

1949: Newfoundland becomes Canada’s tenth province.

1970: In a great boon to newspapers and billboard owners, President Nixon signs the law banning cigarette advertising on television and radio.

1970: American Motors Corp. introduces the Gremlin in an attempt to boost its flagging sales.  It helps a little, but not enough.

1976: Steven Paul Jobs, age 21, and Stephen Wozniak, 25, found Apple Computer, Inc.

1999: The Canadian Parliament creates Nunavut Territory from part of the Northwest Territories.  It is as big as Western Europe but has less than 30,000 residents.

April 1, 2005 in Today in History | Permalink | TrackBack (0)

Thursday, March 31, 2005

Nugent v. Muskegon: Day 5

Representatives of the Muskegon Summer Celebration testified yesterday that it was their fear of protesters that led to their cancellation of Ted Nugent's appearance at their 2003 event.  According to the Muskegon Chronicle, Festival Executive Director Joe Austin testified that he had "grave concerns" about security if Nugent performed.  Various news media had reported that Nugent used racially offensive language in a radio interview; Nugent denies he did so.

Austin said that the Festival had tried to get a copy of the broadcast, but that it apparently did not exist, and since it was on a short deadline it chose to "withdraw its offer" before the written contract was signed.

Closing arguments in the trial are scheduled for today, and the case will go to the jury.

March 31, 2005 in In the News | Permalink | TrackBack (0)

Kansas Stands Alone (Again) - Corrected

Having observed the webcast of today's very congenial hearing before the Nevada Senate Judiciary Committee, in which everyone who appeared or submitted written comments on the 2003 amendments to Articles 2 and 2A resoundingly opposed it, and having had a follow-up conversation with the senator with whom I have been communicating about the various UCC issues on the Nevada Legislature's plate this session, I think it is safe to say that Nevada SB 200 (i.e., the 2003 amendments to Articles 2 and 2A) is now dead.

This leaves Kansas where it was before Nevada SB 200 surfaced a couple of weeks ago, as the only state to be considering adopting the 2003 amendments to Articles 2 and 2A this session.  And, having scoured the Kansas Legislature's web site, I see no evidence that the Kansas House has made any progress on either HB 2454 (Article 2) or HB 2455 (Article 2A) since they were referred to the Judiciary Committee in mid-February.

March 31, 2005 in Legislation | Permalink | TrackBack (0)

News in brief

Britain’s Cable & Wireless is denying that it has terminated its sponsorship contracts with two West Indian cricket stars.
                              *  *  *
Dubai is getting ready to award a multi-billion dollar contract to start construction of its urban light rail system.
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The empire of contract is extending into a place that few would have predicted back when Grant Gilmore was predicting its death: the Russian armed forces.
                              *  *  *
Rutgers students are organizing against a renewal of the school’s exclusive beverage deal with Coca-Cola.
                              *  *  *
Two college basketball coaches coming off big seasons get new deals: Kim Mulkey-Robinson of Baylor (6 years)  and John Beilein of West Virginia (a two year extension)

March 31, 2005 in In the News | Permalink | TrackBack (0)

Licenses: Theater ticket isn’t a contract

Colorado_flag A plaintiff injured by a falling piece of ceiling can’t use a contract theory to get around the provisions of Colorado’s premises liability law, says the state’s court of appeals.

In the case, the plaintiff was hit by a falling acoustic tile in defendant’s movie theater. After he had blown the tort statute of limitations, the plaintiff sued, claiming something called "negligent breach of contract." His theory apparently was that plaintiff had a contractual duty to maintain a safe place for patrons. Since this was a contract, not a tort, he argued, the longer contract statute applied.

Nice try, but no cigar, said the court. A movie ticket is a license, not a contract. The defendant’s only obligation under the license was to admit him to watch the movie, and his only riemedy for breach of the license would be a refund. The defendant’s obligations as the operator of the premises were based in tort, not contract, so the action was untimely.

Sweeney v. UA Theater Circuit, 2005 Colo. App. LEXIS 341 (March 10, 2005)

March 31, 2005 in Recent Cases | Permalink | TrackBack (0)

Today in history—March 31

1596: René Descartes, who will earn his Baccalauréat and Licence in law from the University of Poitiers in 1616, is born at LaHaye, France.

1742: Composer P.D.Q. Bach is born at Leipzig.  Among his greatest works are his cantata Iphigenia in Brooklyn, the opera Hansel and Gretel and Ted and Alice, and his beloved Fanfare for the Common Cold.

1774: The Boston Port Act, which closes the port to shipping until restitution is made to the East India Company for loss of its product in the "Boston Tea Party," goes into effect.

1854: With Commodore Matthew Perry's warships in the harbor near Tokyo, the Japanese government agrees to permit U.S. trade through the ports of Shimoda and Hakodate, ending 200 years of seclusion.

1889: The Eiffel Tower is inaugurated in Paris.  In 1926, installation of three huge illuminated Citroën signs will make it the world's tallest advertising billboard.

1913: Financier and banker John Pierpont Morgan, who acted as a U.S. Federal Reserve before the government established one, dies at Rome, Italy.

1935: Trumpeter Herb Alpert is born at Los Angeles.  At one point his Tijuana Brass will outsell the Beatles in the U.S. 2-to-1 (with four albums in the top 20 simultaneously), and he and partner Jerry Moss will sell their A&M Records to Polygram in 1989 for $500 million.

1948: Vice President Albert Arnold Gore, Jr. (Vanderbilt Law, did not graduate), son of Tennessee Senator Albert Arnold Gore, Sr., is born at Washington, D.C.

1967: Jimi Hendrix becomes the first rock star to set fire to his guitar at a concert in London. He subsequently must be treated for burns to his hands at a local hospital.

1968: Article 2 of the Uniform Commercial Code goes into effect in Mississippi.

1991: The Warsaw Pact comes to an end about fifty years before experts had expected it to.

March 31, 2005 in Today in History | Permalink | TrackBack (0)

Wednesday, March 30, 2005

News in brief

A decision seems imminent on the city of Anaheim’s claim that its baseball team breached its contract by changing its name to "Los Angeles Angels."
                                   * * *
Insurer AIG is saying that a contract with Warren Buffett’s Berkshire Hathaway was apparently something of a sham transaction, and had the result of inflating the company’s earnings.  Meanwhile, Buffett’s role in the transaction is being investigated by New York Attorney General Elliott Spitzer.
                                   * * *
The former coach of the Valencia soccer team, fired with two years left on his contract, will go to court to claim the $10.5 million balance on his contract.
                                   * * *
Ontario physicians have approved 3-to-1 a new four-year contract, giving them raises of from 2 to 2.5 percent and removing caps on the amount they can bill the government.
                                   * * *
The "winners" in the New York Daily News’'s ill-fated Scratch-n-Match game—there apparently are several thousand of them—are stepping up the pressure to force the paper to honor misprinted winning tickets.
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The estate of the late rapper Ol’ Dirty Bastard is has filed a $1.8 million breach of contract suit against a Florida promoter.

March 30, 2005 in In the News | Permalink | TrackBack (0)

Writings: Indemnification agreement need not be signed

New_york_flag_2 Our friends at the New York Civil Law blog are reporting on a new decision by the Empire State's highest court, involving contractual indemnification agreements in workers' compensation claims.  In the case, Flores v. Lower East Side Service Center, the court held that a contract had been formed even though the contract document had not been signed.

March 30, 2005 in Recent Cases | Permalink | TrackBack (0)

Nugent v. Musegon: Day 4

Guitarist Ted Nugent was on stage yesterday in a Muskegon, Michigan, courtroom, as he took the stand in his lawsuit against a festival that canceled his appearance in 2003.

Nugent denied making racial slurs to two Denver disk jockeys, reports of which led the Muskegon festival to drop him from the bill.  The "Motor City Madman," who comes from the Detroit area, said he had been particularly disappointed because he'd planned a family get-together at the Michigan event.

March 30, 2005 in In the News | Permalink | TrackBack (0)

Conditions: Failure to comply dooms buyer’s claim

Maryland_flag A buyer who fails to comply with a condition precedent cannot sue for the seller’s breach of the agreement, says the U.S. Court of Appeals for the Fourth Circuit.

In the case, Lockheed agreed to sell one of its operations to BTN.  In reliance on the agreement, BTN took several actions, including ordering telephone service and acquiring insurance.  The agreement, however, required BTN to demonstrate that it had "resources and assets necessary and sufficient to conduct the [transferred business] and to perform its obligations and Contracts."  After BTN had trouble getting financing, Lockheed demanded evidence that it was in compliance.  When BTN failed to satisfy Lockheed, the seller terminated the deal and sold the unit to someone else.  BTN sued, claiming breach of contract and reliance.

Under Maryland law, said the court, there is no duty under a contract if a condition precedent is unfulfilled.  Here, there was no factual dispute that BTN was not in compliance with its obligations.  Lockheed had no duty to go forward, and thus neither tort nor contract claims would lie against it.

Bi-Tech North, Inc. v. Lockheed Martin Corp., 2005 U.S. App. LEXIS 4026 (4th Cir. March 10, 2005).

March 30, 2005 in Recent Cases | Permalink | TrackBack (0)

Law & feminism at Davis

This Friday, April 1, the U.C. Davis Law Review is hosting The Future of Critical Race Feminism. The day-long session runs from 9:00 to 4:30 in Davis’s Moot Courtroom. The four panels are titled, "Race, Sex, and Working Identities," "Color, Feminism, and the State," "Deconstructing the Image Repertoire of Women of Color," and "Defining the Voices of Critical Race Feminism."

March 30, 2005 in Conferences | Permalink | TrackBack (0)

WTC insurance dispute makes top 10 list’s list of the top ten defense wins of 2004 has only one contract dispute on it, but that one was a doozy.  The online journal picked Swiss Re’s court victory in its insurance coverage dispute with the World Trade Center owners as one of the year’s biggest victories.  In the case, the WTC owners had claimed that the two planes that crashed into the two towers were two separate occurrences under the policy, while Swiss Re successfully argued that it was only one.  Swiss Re was represented by Barry R. Ostrager and Mary Kay Vyskocil of Simpson Thacher & Bartlett.

Three other business-related cases made the top-ten, including Latham & Watkins’s successful antitrust case for Oracle Corp. in its bid for PeopleSoft (voted number one), Fish & Richardson’s win for Microsoft in a major patent dispute, and Orrick Herrington’s defense of Union Carbide in a fraud action by Kelly-Moore Paint.

March 30, 2005 in In the News | Permalink | TrackBack (0)

Today in history—March 30

1855: Representing the North American Insurance Co., attorney Abraham Lincoln loses when a Springfield (Ill.) jury returns a $2,000 verdict for the plaintiff.

1858: One of the great convenience inventions is made as Hiram Lipman of Philadelphia patents the pencil with an attached eraser.

1867: The United States purchases Alaska from Russia for $7.2 million, or about two cents an acre. Most of this press thinks that the price is way too high.

1926: Ingvar Kamprad, a dyslexic who will start selling matches from a bicycle and later found the IKEA furniture empire, is born at Agunnaryd, Sweden.

1931: Rupert Whitehead, whose wife Blanche is ailing, invites Caro and Frank Davis to come to California to care for her; the subsequent dispute will become Davis v. Jacoby.

1951: Remington Rand delivers the first UNIVAC I computer to the U.S. Census Bureau.

1964: The television show Jeopardy debuts for the first time.

1970: Secretariat is born at Caroline County, Virginia. He will enjoy the fruits of his Triple Crown career by getting to sire more than 600 foals.

1986: Actor James Cagney, who never actually said, "You dirty rat!" in a film, dies at Stanfordville, New York.

1987: Illustrating the fact that great art is priceless, Vincent Van Gogh's painting "Sunflowers" is purchased for about $40 million.

March 30, 2005 in Today in History | Permalink | TrackBack (0)