January 11, 2005
Final panels set for Midyear fête
The final panelists have been set for the AALS Midyear Contracts Conference in Montréal on Exploring the Boundaries of Contract Law. Papers were solicited for two panels, and the selection committee has announced the winning efforts.
The first session, Implications of Limited Rationality for Contract and Commercial Law, will be moderated by organizing chair Bob Hillman (Cornell). Panelists will be Marcus Cole (Stanford), Manuel Utset (Utah), and Danielle Kie Hart (Southwestern).
Omri Ben-Shahar (Michigan) will moderate the second, Revisiting A Classic: Charles Knapp’s "Enforcing the Contract to Bargain." The panelists will be Chuck Knapp (Cal-Hastings), Kristin Madison (Penn), Alan Schwartz (Yale), and Amy Schmitz (Colorado).
Details on the conference, which will be held June 14-17, are on the AALS program page.
Today in history—January 11
1815: John Alexander Macdonald (left, on the $10 bill) is born at Glasgow, Scotland. He will become a successful trial lawyer and first prime minister of the new Dominion of Canada (1867-73, 1878-93). His anti-American "National Policy," which rejects free trade with the U.S. and imposes high tariffs, is highly popular.
1878: Alexander Campbell becomes the first dairyman to put milk in glass bottles. Previously, milk had been sold in bulk and ladled into customer’s buckets.
1911: One of the world’s great research societies, the Max Planck Society, is founded. For some reason the original name, "Kaiser Wilhelm Society for the Advancement of Science" will eventually get dropped.
1925: Grant Tinker, the man who will turn wife Mary Tyler Moore’s 13-week contract for a TV series into the MTM entertainment empire (Mary Tyler Moore Show, Bob Newhart Show, WKRP in Cincinnati, Remington Steele, Hill Street Blues, St. Elsewhere) is born in Stamford, Connecticut.
1936: Another Canadian lawyer and prime minister, Jean Chrétien, is born at Shawinigan, Quebec.
1939: Richard Allen Posner, the law and economics scholar and future judge of the U.S. Court of Appeals for the Seventh Circuit, is born at New York City.
1964: U.S. Surgeon General Luther Terry calls a press conference to announce that smoking is hazardous to your health. Congress requires package warnings a year later.
1973: Civilization shudders as major league baseball votes to permit the use of the designated hitter in the American League.
1984: Michael Jackson’s Thriller becomes the biggest-selling album of all time, passing the 10 million mark. The previous record-holder? The cast recording of West Side Story.
1986: Author James (Shogun) Clavell signs a contract with Morrow/Avon Publishing, giving him a $5 million advance for his book, Whirlwind.
Vote for your favorite legal thinker
In cased you missed it over the holidays, Legal Affairs magazine is running an Internet poll to name the Top 20 Legal Thinkers of Today. Not surprisingly, Con Law folks and those who work in specialized idioms (e.g., critical studies, law & economics) are heavily represented. The magazine does ask for write-ins, though.
Results are going to be published in May or so.
Oman on Smith on "Contract Theory"
Steven A. Smith’s book Contract Theory is one of the most interesting recent works on contracts. In an upcoming review in the Michigan Law Review, available on SSRN, Nate Oman takes a respectful but critical look at Smith’s sustained defense of the promissory basis of contract law. The abstract:
The contemporary philosophy of contract law must reconcile apparently incommensurable theories of contractual obligation, namely those based on moral rights and those based on economic efficiency. In his recent book, Contract Theory, Stephen Smith seeks to solve this problem by arguing that economic theories fail to explain contract law while rights-based theories adequately account for the law. His argument, however, rests on a misunderstanding of economic and legal reasoning, and results in implausible claims about the contours of contract law. Rather than dismissing one or the other of these two approaches, philosophers of contract law should look for ways of providing a principled integration of them. This paper argues that the Rawlsian notion of the priority of liberty provides one path toward such a principled integration.
Oman also has his own fine law blog, Tutissima Cassis ("Strongest Armor").
January 10, 2005
Toyota changes name of "Tsunami" vehicle
Toyota Canada has dropped plans to name a version of its popular sedan the "Celica Tsunami," in the wake of the Asian disaster. It was just a year ago that the company picked the name, calling the car "the new wave of bold style."
The new name? Celica Sports Package.
Practical advice for potential plaintiffs
Tribune Media real estate columnist Robert Bruss offers some commentary that ought to make those of us who are part of the legal profession cringe a bit. Advising a buyer whose seller had breached a contract and caused $20,000 in damages, Bruss outlines the legal issues, but then gives the practical answer.
Although $20,000 is a lot of money, by the time you hire an attorney and go to trial, you can easily incur thousands of dollars for legal fees with no guarantee of winning.
Even if you obtain a $20,000 judgment against the sellers, then to benefit you have to collect it. If the sellers have substantial real estate assets, you can record your judgment and then wait perhaps many years to collect, if ever.
Today in history—January 10
1863: The North Metropolitan Railway Co. opens the world’s first subway, the London Underground, to fare-paying passengers.
1901: The Gladys City Oil, Gas, & Mfg. Co. hits oil at Spindletop, near Beaumont, Texas. "The startled roughnecks fled as six tons of four-inch drilling pipe came shooting up out of the ground. After several minutes of quiet, mud, then gas, then oil spurted out. The Lucas geyser [left], found at a depth of 1,139 feet, blew a stream of oil over 100 feet high until it was capped nine days later and flowed an estimated 100,000 barrels a day." Over the next few years Spindletop will give birth to Texaco, Gulf Oil, Sun Oil, and Humble (now Exxon).
1910: Norman Heatley is born at Woodbridge, Suffolk. Although it is Alexander Fleming who will discover penicillin, it is Heatley who will discover how to produce it in mass quantities so that it can be used as an antibiotic.
1919: The man who developed the science of acoustics by his experiments in the Fogg Lecture Room at Harvard—itself a candidate for the Trojan Doctrine—dies at Cambridge, Massachusetts. His masterpiece is Symphony Hall, Boston.
1937: The first issue of the news magazine Look hits the stands—and sells 700,000 copies.
1944: General Electric delivers the first fully-portable electric power plant to the United States Navy. The plant, which can generate 10,000 watts of power, fits on six specially designed rail cars and can be set up almost anywhere in 24 hours.
1949: RCA records launches the 7" 45-rpm record. Together with the 33-1/3 LP introduced the year before, it will wipe out the old 78-rpm records. The 45 is superior to the 78 because its center is thicker than its edges, allowing stacks of records to be played without the grooves rubbing against each other.
1960: Marty Robbins’ El Paso (at 5 minutes, 19 seconds) becomes the longest song to that time ever to reach number 1 on the charts. It’s popular in part because disk jockeys appreciate the fact that five minutes allows for a toilet break.
1969: After 147 years of publishing, the Saturday Evening Post folds its tent.
1972: Billionaire Howard Hughes puts the brakes on one of the most audacious commercial frauds of all time, breaking his silence to tell reporters by telephone that his purported autobiography was a fake. Clifford Irving and his wife had received a $750,000 advance from McGraw-Hill for the book.
1978: Singer Johnny Paycheck hits the top of the charts with Take This Job and Shove It.
1990: Warner Communications buys Time, Inc. To avoid angry shareholders, the deal is structured as a takeover of Warner by Time for $14.1 billion.
2000: Speaking of Time, at the apex of the NASDAQ frenzy, AOL announces one of the best deals of all time, its purchase of Time-Warner for a really, really big pile of worthless paper.
Berendt named associate dean
John Marshall Law School has announced that Gerald Berendt has been named Associate Dean for Advanced Studies and Research. Berendt, a contracts teacher who specializes in labor and employment, marks his 30th year at the Chicago school this year.
Cases—Interpretation—Contracts must be interpreted sensibly to give effect to all provisions
The ordinary rule in Illinois is that a license agreement without a fixed term is terminable at will, but that rule can be overcome by other language in the agreement, according to the U.S. Court of Appeals for the Seventh Circuit in an opinion by Judge Frank Easterbrook.
The once-mighty Wurlitzer Company was split up in 1985—its piano and organ operations became part of Baldwin Piano, while its jukeboxes went to Deutsche Wurlitzer, GmbH. Baldwin owned the trademark, while DW had a license to use the trademark on jukeboxes. In 2003, Baldwin announced that the license was canceled, and immediately filed suit under the Lanham Act to keep DW from using the name. The contract contained the following clause:
Except as herein provided, and as provided in Article 14 hereof, this Agreement shall continue in force without limit of period but may be can celled by the Licensor for material breach. In the event of Licensee's material breach of this Agreement, Licensor shall notify Licensee of the breach and Licensee shall have ninety (90) days to cure the breach or to request arbitration by a single arbitrator in accordance with the then current rules of the American Arbitration Association.
Contracts, wrote Judge Easterbrook should be interpreted in a "sensible" way so that important clauses do not "drop out." If the license were terminable at will, then this clause serves no purpose whatsoever. The court concluded that the license was "perpetual" but was terminable for cause. Baldwin Piano, Inc. v. Deutsche Wurlitzer GmbH, 2004 U.S. App. LEXIS 26127 (7th Cir. Dec. 16, 2004).
January 9, 2005
Rapper zaps Reebok
Rapper Pharrell Williams of The Neptunes has filed a $4 million contract action against Reebok International, which manufactures his "Billionaire Boys Club" clothing and "Ice Cream" shoe lines.
In his complaint, Williams (at left, in a BBC T-shirt), says that there were production and quality problems with samples Reebok produced that were not corrected, and that the company failed to meet distribution standards.
Today in history—January 9
1788: Connecticut becomes the fifth state to ratify the constitution. The state's general assembly will later pick "The Constitution State" as its official motto, in place of the more familiar, "The Little Rectangular State Next to New York."
1793: Jean Pierre Blanchard makes the first successful balloon flight in the United States, flying 15 miles from Philadelphia to Woodbury, New Jersey. The event today is commemorated by a single-family residential real estate development in Woodbury called "Blanchard’s Landing."
1816: Sir Humphrey Davy’s new safety lantern is used for the first time in a coal mine.
1839: The French Academy of Sciences is informed of the development of a marvelous new photographic process, the daguerreotype.
1878: The father of behavioral psychology, John Broadus Watson, is born in Greenville, South Carolina. Forced to leave a faculty post at Johns Hopkins after having an affair with a student, he will join the J. Walter Thompson advertising agency, selling Yuban Coffee.
1895: American entrepreneur Aaron Lufkin Dennison dies at Birmingham, England. Dennison was the first man to make watches with interchangeable parts, and his American Waltham Watch Co. will go on to make 40 million timepieces over the next hundred years. As a sideline, he started making his own boxes. His box company today is known as Avery Dennison Corp.
1958: Willis Rodney Whitney dies in Schenectady, New York. Then an associate professor at MIT, he was hired by General Electric to do part-time chemical research in 1900, and later founded GE’s research lab, the first basic industrial research lab in the world.
1969: The Anglo-French Concorde aircraft makes its first test flight at Bristol, England.
1979: Architect Pier Luigi Nervi, the man responsible for introducing to the world those warm, inviting, giant reinforced concrete public buildings we all love, dies at Rome. (Left: SCOPE Cultural Center, Norfolk, Va.)
1984: Actress Clara Peller makes television history in a Wendy’s television ad when she demands, "Where’s the beef?"
1986: Eastman Kodak exits the instant camera business after it loses a patent infringement lawsuit.
1998: Walter E. Diemer, senior vice president of the Fleer Co., dies at Lancaster, Pennsylvania. In 1928, working as an accountant for Fleer, he accidentally invents a new kind of chewing gum. This "bubble gum"—colored pink because that’s the only color he has on hand—sells out immediately, and Diemer is soon training the Fleer sales force in how to blow bubbles to demonstrate the product.
1998: Communitarians are dismayed as two international teams of scientists announce that they have discovered that the galaxies are moving farther apart at increasing speeds.
Cases—Interpretation—Breach of contract resulting in physical loss is covered under policy
A warehouse operator who "misrotated" beverages—that is, shipping the newer cases before the older ones, so that some cases were shipped out of code—could recover its losses from its insurer as a "physical loss," according to the New Jersey Superior Court.
The operator, Customized Distribution Services, settled with the manufacturer, Campbell Soup, for its losses, which amounted to $1.3 million. CDS’s insurer, Zurich, denied coverage, claiming, among other things, that the policy excluded "gradual deterioration" of products, and that "loss" was defined as "accidental loss or damage." CDS’s own failure to comply with its contract with Campbell’s was not, argued Zurich, such a loss. The trial court gave summary judgment to Zurich.
Wrong, wrote the court, in an opinion by Judge Alley. The terms were ambiguous, and where the terms are ambiguous they must, of course, be construed against the insurer. Customized Distribution Services v. Zurich Insurance Co., 2004 N.J. Super. LEXIS 442 (App. Div. Dec. 16, 2004).