ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Saturday, June 11, 2005

Turkey promulgates new commercial code

Turkish_flag A proposed new Turkish Code of Obligations has been released to the public for comments.  The new law, covers virtually all forms of contractual and debt relations.

Vural Günal of Istanbul’s Pekin & Pekin has an analysis of the key innovations in the bill.

June 11, 2005 in Legislation | Permalink | TrackBack (0)

And don't call me Shirley

Federal Judge Jerry Buchmeyer’s legal humor blog Say What?! has this exchange from a trial in Brownsville, Texas:

     Q.  Do you have any other bills or debts or credit card payments?
     A.  I don't have any credit cards.
     Q. Are you currently in bankruptcy?
     A.  Yes.
     Q.  What was that for?
     The Court:  Not having enough money to pay your bills, basically.

June 11, 2005 in Miscellaneous | Permalink | TrackBack (0)

Private v. Public

Whether a particular real estate development project is viewed as “private” or “public” makes a huge difference with respect to costs and paperwork, since “prevailing wage” statutes often require public works to pay much higher wages than private employers would and to keep detailed records.  This is estimated to increase total construction costs from 10 to 33 percent.

Developers in California are therefore welcoming a recent decision by the state’s Department of Industrial Relations that reliance on tax-exempt bonds and Federal tax credits by does not make a project “public” so as to trigger the prevailing wage statutes.  Such funding is a common part of developments that include low- or middle-income housing.  Gary P. Downs of Pillsbury Winthrop Shaw Pittman LLP discusses the issues in a recent client piece.

June 11, 2005 in Commentary | Permalink | TrackBack (0)

Cases: That's why it's called "at will"

California_flag_6 An at-will employment agreement is an at-will agreement, even if it pays a lot of money and includes profit shares and stock options, according to a recent decision by the California Court of Appeals.

Plaintiff John Cripps was a high demand digital marketing guru.  From among a number of offers, he worked out a deal with Fair, Isaac & Co., an at-will deal that paid him $200,000 a year plus one-third of the company's profits and stock options.   When Cripps didn't succeed in bringing in as many clients as everyone hoped, Fair Isaac informed Cripps that his employment contract was going to be "reevaluated."  Cripps was upset over this and sent a letter in reply to "set the record straight."  Fair Isaac thereupon terminated him.

Cripps sued for breach of contract, breach of the covenant of good faith and fair dealing, promissory estoppel, and fraud.  The trial court granted Fair Isaac's motion for summary judgment, and Cripps appealed.  The Court of Appeals affirmed.  In at-will employment contracts, explained the court, the employer has the option of lowering an employee's salary without cause, just like they can terminate employment without cause.  Since Cripps was unable to prove elements of fraud or promissory estoppel, he had no legal leg to stand on.

Cripps v. Fair, Isaac & Co.,, 2005 Cal. App. Unpub. LEXIS 4428 (Cal. Ct. App., May 20, 2005).

June 11, 2005 in Recent Cases | Permalink | TrackBack (0)

Today in history -- June 11

1184 B.C.:  After a ten-year siege, Greek forces sack and burn the city of Troy.

1509: King Henry VIII marries Catherine of Aragon, the widow of his older brother, Prince Arthur.  The marriage will be annulled 24 years later, leading to the English Reformation.

1742: Benjamin Franklin invents the Franklin stove, a major improvement in heating.  Rather than seek a patent, he writes an instruction book on how to make them so that everyone can have one.

1842: Carl Paul Gottfried von Linde, the German engineer and refrigeration pioneer who will go on to found Linde AG, is born at Berndorf in Bavaria.

1892: The first film studio in Australia, and one of the first in the world, the Limelight Department, is founded by the Salvation Army at Melbourne.  Its Soldiers of the Cross (1901) is regarded by some as the first feature film ever produced.

1895: Charles E. Duryea of the Duryea Motor Wagon Co. of Springfield, Massachusetts, receives the first American patent ever issued for an automobile.

1936: Robert Erwin Howard, the writer most famous for creating the charater of Conan the Barbarian, blows his brains out with a .38 Colt revolver in the front seat of his car.

1981: Major League Baseball players go on strike, leading to a two-month work stoppage.

1982: Stephen Speilberg's ET: The Extra-Terrestrial opens at theaters; it will earn $100 million in its first month -- a huge amount for the day -- and will eventually become the fourth highest-grossing film of all time, adjusted for inflation.

1985: A Fabergé Egg sells for a record £1,375,00 in New York City.

1998: Compaq Computer buys Digital Equipment Co. for $9 billion, in one of the largest technology deals to date.

June 11, 2005 in Today in History | Permalink | TrackBack (0)

Employment Contracts Are More Than Contracts

Bird, Robert C., "Employment as a Relational Contract" . Journal of Labor and Employment Law, Vol. 8, 2005

This article shows how employment contracts need to viewed beyond the scope of the written agreements. Norms of the workplace are a significant aspect of the contract.

June 11, 2005 in Recent Scholarship | Permalink | TrackBack (0)

Friday, June 10, 2005

Hadley's Mill


Joseph and Jonah Hadley's City Flour Mills, June 2005.  This photograph shows the Mill after renovation was completed.  The upper floors are now residential, and the ground floor will be occupied by a restaurant-pub.  The view is looking from the Docks toward Gloucester Cathedral (seen in the background).  Grain, much of it from the Ukraine and Canada, was carried by wagon from the barges to the Mill.  It is believe that the steam engine was on the ground floor of the central building.  The building to the left, of typical Gloucestershire stone, was the Mill's office.  The one on the right is a warehouse.

The photograph is courtesy Michael Thorpe, Gloucester City Council, which has granted permission for its use in all educational or nonprofit contexts.

June 10, 2005 in Famous Cases | Permalink | TrackBack (0)

News in brief

Apple has announced that it will drop IBM as a chip supplier for its personal computers and will begin using Intel chips.

The case of a BYU veterinary professor, fired by the school on various charges, including improperly dispensing medications and wrestling with female students, will go to trial.

InterActiveCorp, the parent of Ticketmaster and the Home Shopping Network, will sell its 5.4 percent share of Vivendi Universal Entertainment to NBC Universal for about $3.4 billion in cash and shares.

The University of Pittsburgh, responding to a breach of contract action over its cancellation of the "Semester at Sea" program, says its action was prompted by "grave concerns" about the safety of the ship.

Google ($80 billion) this week passed Time Warner ($77.5 billion) to become the world’s most highly valued media company—although Time Warner has 12 times the revenues and 5 times the profit.  Bubble?  What bubble?

A New Mexico congressman is asking the Energy Department to renew the University of California’s contract to manage the Los Alamos National Laboratory, which expires in September, to July 2006, when a new management contract is due to be awarded.

The number of contract workers at Japanese auto plants—workers who do not get the benefits of regular employees—has reached a record 40,000, as Japanese auto production explodes.

Critics say a new garbage-hauling contract in Fort Wayne, Indiana, creates the wrong incentives, because it pays the hauler $62 a ton for hauling garbage but $103 a ton for hauling recyclables—which means that residents will save money by throwing recyclables in the trash.

June 10, 2005 in In the News | Permalink | TrackBack (0)

Cases: Broker is up the river

Indiana_flag A one-year term agreement under which the parties continue past the termination date becomes a contract at will and can be canceled by either party at any time, says a recent decision by the U.S. Court of Appeals for the Tenth Circuit.

In the case, Near North Insurance and Black Agents & Brokers Agency (BABA) entered into a one-year contract, under which BABA (a qualified minority-owned business) would represent it with Riverboats, the operator of floating casinos. Riverboats’ Indiana charter required it to place certain percentages of its business with minority-owned firms.  Near North and BABA signed a one-year deal which provided it could only be renewed by both parties in writing.  Under the deal, Near North sent invoices to Riverboats; Riverboats sent payment to BABA; BABA endorsed the checks and mailed them back to Riverboats; and Riverboats then mailed them to Near North.

Despite the one-year limit, the parties continued in this fashion for several years, until Near North decided to terminate the agreement.  BABA sued Near North for breach of contract and racial discrimination, and also sued Riverboats, claiming it was a party to the contract.

The Tenth Circuit affirmed summary judgment, holding that while a contract can be implied from conduct, it will only be done where it appears the parties intended to contract.  Here, there was no evidence that Riverboats intended to be bound to BABA in any way.  The fact that Near North and BABA had continued their prior deal without executing a term extension indicated that they meant it to be terminable at will.

Black Agents & Brokers Agency, Inc. v. Near North Insurance Brokerage, Inc., 2005 U.S. App. LEXIS 9740 (7th Cir., May 27, 2005).

June 10, 2005 in Recent Cases | Permalink | TrackBack (0)

Cooley honors Kent

Kent_headshot_2 It was a pleasure getting the mail this morning, to see a flyer from Thomas Cooley touting Contracts prof (and Contracts Newsletter columnist) Mara Kent.

Here's a PDF of the flyer.  Congrats!

June 10, 2005 in Contract Profs | Permalink | TrackBack (0)

Today in history - June 10

1829: Oxford and Cambridge hold the first Boat Race. Cambridge leads the all-time series 78-72-1.

Bear_flag 1846: Settlers at Sonoma, Alta California, declare independence from Mexico as the California Republic.  The Republic lasts only 25 days before residents throw in their lot with the United States.  (Photo: Wikipedia.)

1874: George Dickinson signs a memorandum offering to sell his property at Croft to John Dodds for £800, and promising to keep the offer open until Friday.

1923: Jan Ludvik Hoch is born at Slatinske Dòly in what is now the Czech Republic.  As "Robert Maxwell" he will become a publishing titan (the Mirror Group) and Labour M.P., before disappearing mysteriously from his boat.

1935: Dr. Robert Holbrook Smith, a boozing surgeon from Akron, Ohio, takes his last drink.  This date is celebrated as the founding of Alcoholics Anonymous.

1937:Nova Scotia lawyer Sir Robert Laird Borden, Canada’s 8th prime minister, dies at Ottawa.

1944: With permission from his high-school principal, 15-year-old lefthander Joe Nuxhall becomes the youngest player to appear in a major-league baseball game when he pitches 2/3 of an inning for the Cincinnati Reds.

1948: Svenska Aeroplan AB (better known as "Saab") builds its first automobile.

1955: Mr. and Mrs. Green sign an offer sheet to have their roof replaced by the Ever-Tite Roofing Corp.

1966: California schoolteacher Donald Odorizzi is arrested for homosexual activities; the case will subsequently be dropped for lack of evidence, but not before he resigns.

1976: Adolph Zukor, the Hungarian immigrant whose first job in show business was sweeping floors, but who went on to found what would become Paramount Studios, dies at age 103 at Los Angeles.

June 10, 2005 in Today in History | Permalink | TrackBack (0)

Economic Duress

Tan, Daniel S., "Constructing a Doctrine of Economic Duress" . Construction Law Journal, Vol. 18, No. 2, pp. 87-96, 2002

This article reviews economic duress in the context of the construction industry and reviews how that theory works in recent cases.

June 10, 2005 in Recent Scholarship | Permalink | TrackBack (0)

Thursday, June 9, 2005

Connecticut Enacts Revised Article 1

Governor M. Jodi Rell signed Connecticut HB 6985 into law on June 7.  Like the versions of Revised Article 1 previously enacted in Alabama, Arkansas, Delaware, Hawaii, Idaho, Minnesota, Montana, Nebraska, Nevada, New Mexico, Oklahoma, Texas, and Virginia, HB 6985 rejects uniform R1-301 in favor of language similar to pre-revised 1-105.  Like the versions previously enacted in Arkansas, Delaware, Minnesota, Montana, Nevada, New Mexico, Oklahoma, and Texas, HB 6985 adopts the uniform good faith definition in R1-201(b)(20). By its terms, HB 6985 will take effect on October 1, 2005.

June 9, 2005 in Legislation | Permalink | TrackBack (0)

Rohwer retires at McGeorge

Claude_rohwer After 44 years of teaching contracts, Clyde Rohwer has announced his retirement from the University of the Pacific’s McGeorge School of Law, where has has served as Associate Dean for International Affairs and Professor of Law.

Rohwer is practically synonymous with McGeorge’s successful attempts to broaden its international focus.  He was Associate Dean for Graduate and International Programs during the development of the school’s LL.M. programs.   He’s also taught in Salzburg, London, Shanghai, Edinburgh, Bialystok, Krakow, Beijing, and Vienna.

Rohwer has written on many subjects over the years, including a volume for Kluwer on Commercial Agency, but he’s best known to law students as the author of Contracts in a Nutshell  (Sample comments from readers at "a classic"; "comprehensive, readable, and succinct"; "an excellent presentation of the theory of contracts"; "well worth the money".)

After graduating from Boalt Hall in 1958, Rohwer served in the Judge Advocate General’s office and went in private practice.  He taught part-time from 1961 to 1967, when he joined the full-time faculty.   A highly regarded teacher, he was named the University Professor of the Year in 1981.  Since 1996, he’s been heavily involved as a consultant to the Vietnamese government in drafting and implementing a new commercial code.

June 9, 2005 in Contract Profs | Permalink | TrackBack (0)

Cole Porter: Love for Sale

It’s Cole Porter’s birthday (he’d be 114 today), an appropriate time to recall one of his cheerier lyrics.

                      Love for Sale

Who will buy?
Who would like to sample my supply?
Who's prepared to pay the price,
For a trip to paradise?
Love for sale

Let the poets pipe of love
in their childish way,
I know every type of love
Better far than they.

If you want the thrill of love,
I've been through the mill of love;
Old love, new love
Every love but true love
Love for sale.

Love for sale,
Appetizing young love for sale.
Love that's fresh and still unspoiled,
Love that's only slightly soiled,
Love for sale.

June 9, 2005 in Miscellaneous | Permalink | TrackBack (0)

Cases: Too late to raise contract claim

California_flag_5 Two bereaved daughters whose mother’s ashes were accidentally disposed of by a funeral home lost their breach of contract claim for failure to raise it before trial, in a recent decision by the California Court of Appeals.

The daughters of Gay Davis had wanted to scatter her ashes at sea, but the mortuary had already accidentally disposed of Davis’s ashes. The daughters brought suit against the mortuary, claiming negligence and negligent infliction of emotional distress. Only after trial started did they move to amend the pleadings to add a count for breach of contract.

Too late, said the court. California has a general policy allowing "liberal amendments to pleadings," but here the change would fundamentally alter the mortunary's defense strategy. Since the daughters showed no reason why they could not have raised the issue earlier, the motion was properly denied.

Baxter v. Wilson & Kratzer Mortuaries, 2005 Cal. App. Unpub. LEXIS 4363 (Cal. Ct. App. May 18, 2005).

June 9, 2005 in Recent Cases | Permalink | TrackBack (0)

Good news, bad news for Goldman Sachs

Creditors of bankrupt eToys have lost their breach of contract claim against investment house Goldman Sachs, who they claimed breached a duty to the Internet bubble company to maximize the share price at its IPO.

But the New York Court of Appeals has, oddly enough, ruled that even absent a contractual obligation, Goldman can be nailed for breach of a fiduciary duty—no, not to the poor schmucks who bought the stock at too high a price on its IPO, but to eToys and its sophisticated venture capitalists, who didn't get as much money as they possibly could from selling the worthless turkey to the public.

While lone dissenter Susan Philips Reid thought that injecting common-law fiduciary duty into a complex transaction among sophisticated parties all represented by experienced counsel was unwise, the majority stressed the narrowness of its decision.

June 9, 2005 in In the News | Permalink | TrackBack (0)

Today in history—June 9

1732: James Oglethorpe gets a royal charter for his proposed new colony for transported debtors, which he will call "Georgia" after the man who grants it.

1768: The first industrialist in U.S. history, Samuel Slater, is born at Derbyshire, England. He’ll build the first successful water-powered textile mill in America, and he will be worth about $1 million at death.

1772: Townspeople in Warwick, Rhode Island capture the revenue cutter HMS Gaspée, which has run aground. She will be burned the next day in protest against British tax laws.

1781: Railroad pioneer George Stephenson, the self-taught coal miner who will design the world’s best railway engines and help build most of the important early lines in England, is born at Wylam, near Newcastle upon Tyne.

1790: The first book is registered under the new U.S. Copyright Act: The Philadelphia Spelling Book by John Barry, entered at the U.S. District Court in Philadelphia.

1815: The Congress of Vienna adjourns. Nobody likes the results, but it does manage to stave off a general European war for 100 years.

1870: Charles Dickens, whose Jarndyce and Jarndyce is probably the most famous fictional lawsuit of all time, dies at Gadshill Place, near Rochester in Kent.

1902: The first Horn & Hardart Automat, prototype of America’s first fast-food restaurant chain, opens at 818 Chestnut Street in Philadelphia.

1916: Robert Strange McNamara, who will decide that the Vietnam War is a bad idea 20 years after it’s too late to do anything about it, is born at San Francisco, California.

1930: Chicago Tribune reporter Jake Lingle discovers that it’s not wise to owe $100,000 in gambling debts to Al Capone, as he’s shot dead during rush hour at the Illinois Central underpass.

1934: Donald Fauntleroy Duck is born in the Walt Disney short, The Wise Little Hen. Trivia: In Iceland, he’s known as Andrés Önd.

June 9, 2005 in Today in History | Permalink | TrackBack (2)

Wednesday, June 8, 2005

News in brief

Californians who have false advertising and deceptive business practices against Nevada casinos can sue in the friendlier clime of the Golden State, says the California Supreme Court.

Maritech Leasing and the Teamsters Union have signed a new contract, the first between a port trucking company and the union in more than 20 years.

Dallas car dealer David McDavid has sued Time Warner, Inc. for breach of contract over his failed purchases of the NBA Atlanta Hawks and NHL Atlanta Thrashers.

Korea’s L.G. Philips LCD has landed a contract worth as much as $5 billion to supply liquid crystal displays to America’s Hewlett Packard.

General Motors, losing money even faster than it’s losing customers, has announced that it will cut 25,000 manufacturing jobs by 2008.

Northwest Airlines, fearing a strike by flight attendants, is already taking applications for replacement workers.

Officials in Keyport, New Jersey, are going to learn whether a standard "no liability" clause in a memorandum of understanding provides a bulletproof defense against the claims of a frustrated real estate developer.

June 8, 2005 in In the News | Permalink | TrackBack (0)

All-girl "Grease" violates license contract

Those who write for motion pictures labor at the lowest levels of the business, but those who write for the stage are gods.  The sanctity of the playwright’s work is an article of faith in the theater biz—and an article of contract, too.

Two small theater companies in Philadelphia are learning that the hard way. The two, which planned to put on an all-female version of the musical Grease (set in an all-girl high school), have received a cease-and-desist letter from Samuel French, the company that controls the rights to the show. The contract to license the show specifies that male roles must be played by males, and vice versa.

This is not an uncommon provision, and authors have not been reluctant to enforce it.  Edward Albee reportedly shut down an all-male version of his Who’s Afraid of Virginia Woolf, and Samuel Beckett’s estate prohibited a female version of his Waiting for Godot.

The Philadelphia groups have responded by switching to a revue they call Grease and Desist.

June 8, 2005 in In the News | Permalink | TrackBack (1)