ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Saturday, April 16, 2005

Film clips: Paint Your Wagon

     Haywood Holbrook:  Dearly beloved. We have gathered together to grant this man, Ben Rumson, exclusive title to this woman, Mrs. Elizabeth Woodling, and to all her mineral resources.  I have drawn up this Record of Claim which here and henceforth will be recognized as a certificate of marriage.  So I ask you Ben, do you recognize this claim as a contract of marriage and do you take this woman to love honor and cherish?
     Pardner: [after long silence] Oh, he does.
     Haywood Holbrook:  Elizabeth Woodling, do you take this man, Ben Rumson, to love, honor and obey him until death do you part?
     Pardner: She does.
    Haywood Holbrook: I now pronounce you claimed and filed as Mr. and Mrs. Ben Rumson.

From: Paint Your Wagon (Paramount 1969)

April 16, 2005 in Film Clips | Permalink | TrackBack (0)

News in brief

Parents of a bride whose posh wedding was "ruined" by the sale of the hotel after the contract was signed, are suing for the extra $90,000 it cost them to move the thing, plus damages for their extreme emotional distress.

General Motors bonds hit a record low and may be headed to junk status, after the carmaker failed to get concessions from its labor unions.

A Kentucky industrial development agency and the insurance company that wrote a contractor's performace bond are locked in a dispute over who breached what.

Iraq may back out of a $500 million grain deal with Australia, citing contaminated wheat as the problem; the Aussies are hotly denying the charge.

Speculation in housing in Sarasota, Florida, is so hot that people are quitting their jobs to buy and "flip" houses and condos.

More than a hundred buyers of units at a Malaysian hostel development are suiing the developer which has failed to make promised payments.

April 16, 2005 in In the News | Permalink | TrackBack (0)

EKU says ex-coach owes it money

There's a potentially interesting liquidated damages dispute brewing at Eastern Kentucky University, where the university says that men's basketball coach Travis Ford owes it some $225,000 for resigning before the end of his contract.  Ford's contract runs through 2007, but he resigned recently to take the vacant job at the University of Massachusetts.

There's no buyout provision in his contract, but there is a clause that says that if he leaves early, he'll pay to EKU, as liquidated damages, an amount equal to the salary EKU would have paid him for the remainder of the agreement.   There's no word from the school as to why they chose to set it up that way rather than to provide for a buyout.

April 16, 2005 in In the News | Permalink | TrackBack (0)

Today in history—April 16

1178 BC: Odysseus finally reaches Ithaca on his journey back from the Trojan War.

1071: The last bit of the Roman empire expires in Italy, as Norman Robert Guiscard captures Bari.

1844: Writer Anatole France is born at Paris.  His most famous line: "The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread."

1881: In Dodge City, Kansas, Bat Masterson fights his last gun battle.  He will end his career as a sportswriter for the New York Morning Telegraph.  "New York is the biggest boobtown in the world," he would say. "They'll buy any Goddamned thing here."

1915: Rhode Island Senator Nelson W. Aldrich dies at New York City.  He's the man who introduced the constitutional amendment creating the Federal income tax.  At the time of his death the maximum tax rate is 7 percent on amounts over $500,000 (or $9.2 million today).

1926: One of the most successful mail order businesses of all time, Harry Scherman's Book of the Month Club, ships its first selection, Lolly Willows by Sylvia Townsend Warner.  It is credited with being the first step in the modern commodification of the book business.

1927: Joseph Cardinal Ratzinger, who will later teach successively at the Universities of Bonn, Münster, Tübingen, and Regensburg, and will be considered by many as a front-runner to succeed Pope John Paul II, is born at Marktl am Inn in Bavaria.

1943: Dr. Albert Hofmann discovers the psychedelic effects of LSD.  It was, like, totally spiritual.

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

Specific Performance

Listokin, Yair,"The Empirical Case for Specific Performance: Evidence from the Tyson-IBP Litigation"; (March 1, 2005).

This article provides an actual instance in which specific performance as a contract award increased market value. Thus, from a post-breach perspective, the common law's preference for damages may be misplaced. An interesting perspective on damages.

April 16, 2005 in Recent Scholarship | Permalink | TrackBack (0)

Friday, April 15, 2005

Happy 50th to the Titan of Fast Food

Today marks one of the great commercial and cultural milestones of the 20th century: the opening of Ray Kroc’s first McDonald's restaurant in Des Plaines, Illinois. It sells the 1955 version of health food: meat, potatoes, bread, cheese, and milk. On that first day, the store takes in $366.12.

April 15, 2005 in In the News | Permalink | TrackBack (0)

The casebook of the future

Matthew_bodie Casebooks and Contracts go together like, well, horses and carriages.  The first casebook was, of course, C.C. Langdell's work on Contracts.  Through the years most of the titans of Contract law have written them.  They've uniformly been big, square, heavy, and expensive.  But are they destined to be that way forever?

Matthew Bodie of Hofstra (left) doesn't think so.  In a new paper, The Future of the Casebook: An Argument for an Open-Source Approach, argues that modern open source technology allows for a much more collaborative approach to classroom materials, that will simultaneously allow for greater collaboration and more individuality.  Click on the link for the abstract.

Continue reading

April 15, 2005 in Recent Scholarship | Permalink | TrackBack (0)

Where does the Pope get his hats?

In case you wondered how the Pope goes about buying clothes, it’s apparently traditional for him to enter into an exclusive-dealing requirements contract with one of the old tailor shops in Rome.

April 15, 2005 in In the News | Permalink | TrackBack (0)

Today in history—April 15

1452: Renaissance man Leonardo da Vinci is born, coincidentally, during the Renaissance. He is widely regarded as genius, but he didn’t know squat about contract law.

1858: Sociologist/educationist David Émile Durkheim is born at Épinal, France.

1865: Tailor Andrew Johnson becomes the first regular working person—not a lawyer, wealthy planter, or war hero—to become President of the United States.

1883: Barrister Stanley Melbourne Bruce, who will become the 8th Prime Minister of Australia, is born at Melbourne, Victoria.

1920: Somebody murders a shoe company’s paymaster and guard and makes off with some $16,000.  Ballistics tests will later show that the killer was Nicola Sacco, but his friend Bartolomeo Vanzetti may well have been innocent.

1920: Future lawyer and German president Freiherr Richard von Weizsäcker is born at Stuttgart, the son of a prominent Nazi diplomat.

1924: Rand McNally publishes its first road atlas.

1927: In a splendid publicity stroke, owner Sid Grauman has Douglas Fairbanks, Mary Pickford and Norma and Constance Talmadge put their hand- and footprints in wet cement in front of his new Chinese Theater in Hollywood.

1952: The plaintiff in Lonergan v. Scolnick claims a contract was made.

1980: Existentialist Jean-Paul (Nausea) Sartre dies in Paris. His life may mean something, or it may not.

1983: The House of Mouse hits Asia, as Tokyo Disneyland opens its doors. It’s not actually owned by Disney, but by Oriental Land Company, Ltd., which licenses the "theme" from Disney.

1994: After eight years of discussion, the Uruguay Round of trade talks ends with the signing of the Marrakesh Agreement, which among other things creates the World Trade Organization.

2002: Byron Raymond White, the only former Pittsburgh Steelers player to serve on the U.S. Supreme Court, dies at age 84.

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

Two Articles on the Border

Georgetown Journal of Legal Ethics Spring, 2005


Although this article deals most closely with no sue promises, it shows how pervasive contract law can be in other fields.

Practising Law Institute Commercial Law and Practice Course Handbook Series

PLI Order Number 5989, March-April, 2005

27th Annual Current Developments in Bankruptcy & Reorganization


Arnold M. Quittner

This article shows how executory contracts and leases are dealt with in bankruptcy and is useful for those who may be drafting contracts where such matters should be of serious concern.

April 15, 2005 in Recent Scholarship | Permalink | TrackBack (0)

Thursday, April 14, 2005

Law professors work too hard

Over at the Conglomerate blog, Gordon Smith of Wisconsin has gathered some data about teaching loads at leading law schools, which show that the 12-hour load is an anachronism at those levels.   There are a number of comments.  One interesting thing about the discussion is that no one mentions the impact on students.

Hey, in a few more years, maybe full-time faculty won't have to teach at all.  [Ed. note: I forgot; teaching "informs" our scholarship, so we probably should continue to do at least a bit of it.]

April 14, 2005 in Commentary | Permalink | TrackBack (0)

Interpretation: "Gather" v. "Transport"

Us_flag The Fifth Circuit issued a new decision yesterday wiith a nice interpretation issue.  True, it’s statutory, not contractual, but it’s interesting to watch the court try to figure out whether a particular 10-mile pipeline "transports" natural gas—which means it’s regulated by the feds—or only "gathers" it.  The court finds FERC’s decision on the point to be wrong.  The decision is Jupiter Energy Corp. v. FERC, No. 04-60041 (5th Cir. Apr. 12, 2005).

April 14, 2005 in Recent Cases | Permalink | TrackBack (0)

Contract and tort in warranty law

David_prince Warranty law is one of those areas where contract and tort law seem to be joined at the hip.  At one point it might have seemed that strict liability in tort and the accompanying discovery rule would eliminate any role for contract.  It hasn't happened though.  In a new paper, Defective Products and Product Warranty Claims in Minnesota, Dave Prince of William Mitchell argues that warranty law is still "an important supplement" to tort rules.  It's unfortunately one of those articles that will be useful to actual practicing lawyers and judges, but don't let that dissuade you.  Click on the link for the abstract.

Continue reading

April 14, 2005 in Recent Scholarship | Permalink | TrackBack (0)

Loan sharks v. Walker-Thomas

Strictly speaking, the new Bankruptcy Act is outside the bailiwick of this blog, but things like credit card terms aren’t. Thus, those interested in a law-and-economics approach to things like usury limits might want to check out a post by Todd Zywicki (George Mason) over at the Volokh Conspiracy blog.

April 14, 2005 in Commentary | Permalink | TrackBack (0)

Today in history—April 14

1759: Georg Friedrich Händel, who against his father’s wishes gave up the study of law for a musical career, dies at London.

1828: Noah Webster copyrights the first edition of his new Dictionary.

1860: Working for the Central Overland California & Pikes Peak Express Co., the first "Pony Express" rider reaches Sacramento, ten days after leaving St. Joseph, Missouri.

1865: John Wilkes Booth becomes the first actor to become prominent in American politics when he assassinates President Lincoln.

1910: President Taft becomes the first president to throw out the first ball on baseball’s opening day, at a game between the Washington Senators and the Philadelphia Athletics.

1914: The city of Irving, Texas, is incorporated, a matter of relatively little importance unless you’re a Dallas Cowboys fan.

1917: Dr. Ludovic Lazarus Zamenhof, the ophthalmologist who is best known for inventing the Esperanto language, dies at age 57. Today Esperanto is the official language of the World Esperanto Association.

1975: Actor Fredric March, who played the bigoted buffoon in Inherit the Wind (1960), dies at Los Angeles, California.

1977: Actress Sarah Michelle Gellar is born in New York City. Her first real acting job will be a Burger King commercial at age 4.

1986: The heaviest hailstones ever recorded—2.2 pounds each—hit Bangladesh.

April 14, 2005 in Today in History | Permalink | TrackBack (0)

Wednesday, April 13, 2005

Tell us what you really think

What do you hate most about commercial law?  The pointless circularity of some UCC definitions?  The pathological reliance on "reasonableness"?  The definition of "finance lease"?  Llewellyn's tortuous writing style?  Cardozo opinions?  Easterbrook opinions?  Pacific GasTrident Center?  The fact that numbers are involved?

Whatever it is, our friends at the AALS Section on Commercial and Related Consumer Law have got a panel for you: Commercial Calamities, or What I Hate Most About Commercial Law.  It’s scheduled for the AALS Annual meeting this coming January.  So get out your knives, test the blade with your thumb, and get ready to participate.  Click on the link for the call for papers.

Continue reading

April 13, 2005 in Conferences | Permalink | TrackBack (0)

Battle isn't over for rocker

Ted Nugent says he's not satisfied with the $100,000 he won previously in breach of contract claim against a Muskegon (Mich.) festival.  He's quoted in Rolling Stone as saying of the case:

When I get accused of such a horrible thing [as using racial slurs], I get really fucking angry.  I went to court and sued them and won, but I'm not done yet.  We killed the beast with the smallest gun they allowed us [i.e., expectancy damages].  We're gonna go back, get a bigger gun [consequential damages], and kill them all—figuratively speaking.

April 13, 2005 in In the News | Permalink | TrackBack (0)

News in brief

Nike, which has often been criticized for conditions at its overseas plants, has published a list of the factories where its shoes are made: there are 700 of them around the world.

Contract talks between faculty and administrators at Florida International University have hit an impasse; faculty have been without a contract since 2003.

The National Hockey League and its players are going back to the table to mull over a "new concept" that tries to bridge the gap between them.

Ave Maria University has got the final permit from the Corps of Engineers to build its new 5,000 acre, $240 million campus on former farmland in Florida.

France's Arianespace and the Russian space ministry have signed a deal to allow Russian Soyuz launches from French Guiana.

Tasmanian pea farmers are angry at plans by Idaho's J.R. Simplot Co. of Idaho to slash prices it pays by 25 percent next year.

April 13, 2005 in In the News | Permalink | TrackBack (0)

Forest giant slammed for breach

After a year of thought and 138 pages of opinion, a federal banktruptcy judge in Atlanta has ruled that Weyerhauster Co. breached its warranties against infringement when it spun off a division in an IPO whose disposable diapers infringed patents held by Kimberly-Clark and Proctor & Gamble.  Judge Margaret Murphy assessed damages at $457.8 milion.

One of the interesting features about the case is that ordinarily a claim for failure to disclose in an IPO would be governed by securities laws (which Weyerhauser says were not violated) but the judge decided to proceed under a contract theory.

April 13, 2005 in Recent Cases | Permalink | TrackBack (0)

Decisions, decisions

Birger_wernerfelt In a great many contractual situations, one party has a substantial amount of discretion over its own performance.  A law school, for example, has a contract with its students, but the school will unilaterally decide what classes are offered, who will teach them, what time they'll be taught, what hours the library will be open, who'll be licensed to provide beverages in the building, and so on.  MIT economist Birger Wernerfelt views these as incomplete contracts where subsequent term-making has been delegated to one party.  In Incomplete Contracts and Renegotiation, he tries to model such situations:

The parties to a contract typically make a lot of decisions during the time it is in force, and the paper is based on the premise that it takes time to be involved in any one of these decisions.  Attempts to economize on decision-making time then imply that the parties may write a contract in which each cedes some decision rights to the other.  The cost of the arrangement is that the information and preferences of the uninvolved party are neglected.  We find that decisions are more likely to be left out of contracts if only one player attaches significant weight to them and simultaneously is well informed.  While the direct effect of this may be small, it is dramatically amplified if the decision-maker can be disciplined by the threat of renegotiation.  We identify a set of conditions under which the possibility of renegotiation allows the parties to leave all non-price decisions out of the contract.  By thus arguing that the threat of renegotiation allows contractual incompleteness, the paper reverses the direction of causality stressed by the literature.

April 13, 2005 in Recent Scholarship | Permalink | TrackBack (0)