August 16, 2005
For the first time, UPenn Law School will be offering an elective course in contract drafting. Most schools provide instruction in legal writing, but the focus of these courses is on litigation. Penn is joining the increasing number of law schools that are offering courses with a focus on skills for transactional practice. For example, Temple Law School has an Integrated Transactional Program, "[f]or students who do not believe their future is in the courtroom or who want to develop their negotiating, counseling, drafting, and interviewing skills in a realistic one-on-one lawyer/ client experience." An article in the Legal Intelligencer (subscription required) provides some information about the UPenn course. The article touches upon finding the appropriate balance of theory and practice in legal education.
[Meredith R. Miller]
News in brief
Settlement talks have broken down in the breach of contract action brought by an Israeli stent manufacturer against Boston Scientific.
A British firm is expected to get the order for 20 million smallpox vaccinations being sought by the U.S. government for its antiterrorism program.
The city of Aurora, Illinois, has sued the Walter Payton Roundhouse for breach of contract, claiming that the developers of the restaurant property failed to give it a promised security interest.
Iran and Yemen have entered into a deal for Iran’s Parsian to build electricity pylons in Yemen.
Three years ago, contract negotiations between Boeing and its machinists’ union broke down almost immediately, but this year both sides are taking a less confrontational stance as the August 30 contract deadline approaches.
A Malaysian court holds that a single made-up word can’t be the subject of copyright, handing a loss to Exxon Corp.
The United Nations has announced that it will launch a study aimed at improving oversight of U.N. contracting activities.
The National Basketball Association’s “one time amnesty provision,” which allows teams to cut high-paid players whose guaranteed contracts won’t count against the salary cap, is causing some high-profile departures.
Leonard Cohen sues business manager
Sixties legend Leonard Cohen has sued his business manager and a tax lawyer for $5 million, claiming breach of contract, fraud, breach of fiduciary duty, and professional negligence. Cohen says that the two took advantage of him by looting or mismanaging his estate and his retirement accounts while he was engaging in his spiritual life at a Los Angeles Zen center.
Kelley Lynch had been Cohen's business manager for 17 years she was fired by the Canadian-born songwriter. According to the rather florid complaint:
This civil action is another case of a tragedy that has become all too familiar in the music industry -- a business manager and professional advisers exploit an immensely talented artist's loyalty and trust through greed, self-dealing, concealment, knowing misrepresentation and reckless disregard for professional fiduciary duties.
A bankrupt firm in Italy is suing the banks who helped it issue the bonds it defaulted on. Parmalat Finanziaria SpA claims that Italy’s UniCredito Italiano SpA and America’s J.P. Morgan Chase & Co. knew it was in lousy financial condition when it agreed to help the firm issue bonds from 1997 to 2001. By doing so, says the lawsuit, filed in court in Parma, Italy, the two banks helped it continue in business and lose even more money. The suit claims about $5.5 billion in damages; the total face value of the bonds raised was $2 billion.
Today in History: August 16
1812: Massachusetts lawyer and militia general William Hull surrenders his whole army and Fort Detroit to a British and Indian force one-fifth his size. He is later sentenced to be shot for incompetence, but is pardoned.
1819: At St. Peter’s Field in Manchester, England, troops attack a large mob gathered to advocate for free trade and political reform. Eleven people die in what comes to be called the “Peterloo Massacre.”
1841: President Tyler vetoes the bill that would re-establish the Second Bank of the United States.
1911: Economist Ernst Friedrich Schumacher is born at Bonn, Germany. He’ll write the popular Small is Beautiful, although he himself works for the 800,000-employee British National Coal Board.
1938: Blues legend Robert Johnson dies of pneumonia three days after being poisoned by a jealous husband. The story that he sold his soul to the Devil at the crossroads of U.S. 61 and U.S. 49 in Clarksdale, Mississippi, is probably a legend.
1954: The first issue of Sports Illustrated magazine hits the newsstands. It was originally going to be called Sport, but the owners of that name wanted $200,000 to release it.
1962: Pete Best loses his chance to become a near-billionaire when the Beatles fire him as their drummer. His replacement is Richard “Ringo Starr” Starkey from Rory Storm & the Hurricanes.
1977: Elvis Presley dies on the floor of his bathroom at Graceland, his home in Memphis, Tennessee. Today Graceland is a wholly owned division of CKX Corp. (Nasdaq: CKXE).
1979: Former Canadian Prime Minister John George Diefenbaker (Saskatchewan Law 1919) dies at Ottawa. In life, he led the opposition to adoption of the Maple Leaf flag, but they put one on his casket anyway.
August 15, 2005
Another Student Suit Challenging Fee Increases
Students have commenced a class action against the UC Regents for increasing fees. The students say that they entered into a contract with the university when they accepted admission, and claim that the fee increases are a breach of that contract. As an example, the students point to 2002 and 2003 Boalt Hall School of Law catalogs and applications, which stated that “the professional degree fee remains at the same level for the three years in which the student is enrolled in the program.”
The lead plaintiff, Andrea Luquetta, is a third-year student at UCLA School of Law. She raised concerns that the fee increases "make it harder for low-income people to access education.” UC says that it has to raise the fees due to budget constraints, and claims that the effect of this and other class action lawsuits is to “shift the cost of the plaintiffs’ education to other students.”
[Meredith R. Miller]
Llewellyn: Good, bad, and ugly
One of the great services of the Social Science Research Network is that it's publishing not only the latest scholarship, but posting worthy articles from the past in a way that makes them accessible to those who (unlike the blessed contracts professor) do not have unlimited Lexis and Westlaw on their desktops.
Up recently is Ingrid Michelsen Hillinger’s The Article 2 Merchant Rules: Karl Llewellyn's Attempt to Achieve the Good, the True, the Beautiful in Commercial Law, still fresh and interesting 20 years after its appearance in the Georgetown Law Journal. Here's the abstract:
In 1949, the Uniform Commercial Code was unveiled by Karl Llewellyn and his drafting-crew, which legally distinguished merchants and nonmerchants within Article 2 of the Code. However, the author suggests that a merchant muddle has arisen due to a fundamental misunderstanding of the nature and purpose of Article 2, which the author argues was never intended to codify merchant custom and trade usage. Section I of the article describes and then refutes the perception that the merchant rules codify actual business practices. It goes on to discuss some of the actual considerations that prompted the substantive content of the merchant rules. Section II explains how the merchant/nonmerchant bifurcation naturally resulted from Llewellyn's jurisprudence. Section III explores the problem of deciding who is a merchant and why it should matter, using as an example the question of whether a farmer is a merchant under the statute of frauds. Finally, section IV discusses the legacy of Llewellyn's Article 2 merchant theory and concludes that a thorough reevaluation of the merchant rules is now in order.
Weekly Top 10
Following are the top ten most-downloaded articles from the SSRN Journal of Contract and Commercial Law for the 60 days ended August 14, 2005. (Previous week's position in parentheses; • indicates fastest-rising paper.)
1 (1) Understanding the Current Wave of Procurement Reform - Devolution of the Contracting Function, Christopher R. Yukins (Geo. Washington)
2 (3) The Comparative Law and Economics of Pure Economic Loss, Francesco Parisi (Geo. Mason), Vernon V. Palmer (Tulane) & Mauro Bussani (Trieste)
3 (2) Decisionmaking & the Limits of Disclosure: The Problem of Predatory Lending, Lauren E. Willis (Loyola-L.A.)
4• (-) On Collaboration, Organizations, and Conciliation in the General Theory of Contract, Ethan J. Leib (U.C.-Hastings)
5 (4) Freedom, Compulsion, Compliance and Mystery: Reflections on the Duty Not to Enforce a Promise, Jeffrey M. Lipshaw (Wake Forest)
6 (6) The Posthumous Life of the Postal Rule Requiem and Revival of Adams v. Lindsell, Peter Goodrich (Cardozo)
•7 (-) On-line Boilerplate: Would Mandatory Website Disclosure of E-standard Terms Backfire?, Robert A. Hillman (Cornell)
8 (7) Better than Cash? Consumer Protection and the Global Debit Card Deluge, Arnold S. Rosenberg (Thos. Jefferson)
9 (8) Private Dispute Resolution in the Card Context: Structure, Reputation, and Incentives, Andrew P. Morriss & Jason Korosec (Case Western)
10 (9) Friends in High Places: Amity and Agreement in Alsatia, Peter Goodrich (Cardozo)
Google Suspends Project; Publishers Not Appeased
In December, Google launched an ambitious project called "Google Print for Libraries." Google plans to scan all sorts of books housed in the world's premier libraries and make them available on the Internet. Publishers were outraged by the project.
Google entered into agreements with Harvard, Stanford, University of Michigan, Oxford and the New York Public Library to digitally scan millions of their books, including many that are copyrighted, and make them available on the Internet through its search engine. A copy of one of these cooperative agreements between Michigan and Google provides that the parties intend to "perform . . . pursuant to copyright law." Publishing groups, however, were snarling. They called on Google to cease unlicensed scanning of their copyrighted materials. The publishers challenged Google's assertion of the "fair use" doctrine of federal copyright law.
This past Friday, Google made an announcement on its corporate blog that it will suspend scanning of any "in-copyright books" until November 2005. The company stated that this suspension of the project will give "any and all copyright holders" time to advise Google "which books they'd prefer that we not scan if we find them in a library." Google further stated:
We’re going to continue talking about Google Print with our partners and the publishing industry. These discussions have been crucial in helping to build a program that benefits the industry and, most important, the millions of users who’ll be able to discover new books. Stay tuned.
The publishing industry is not appeased. Patricia Schroeder, president and CEO of the Association of American Publishers said that Google’s concession did not alleviate the publishing industry’s concerns that the project infringes on publisher's copyrights. She stated that “Google’s procedure shifts the responsibility for preventing infringement to the copyright owner rather than the user, turning every principle of copyright law on its ear.”
[Meredith R. Miller]
Today in History: August 15
927: Saracens capture and destroy Taranto in Italy, enslaving all the survivors and transporting them to Africa.
1769: Napoléon Bonaparte, the inspiration if not the author of many of the world’s legal systems, is born, the son of a lawyer and diplomat, at Ajaccio, Corsica.
1843: Tivoli Gardens, the original prototype for Disneyland, opens in Copenhagen.
1877: Thomas Edison makes the first voice recording, reciting “Mary Had a Little Lamb.”
1935: Pilot Wiley Post and entertainer Will Rogers are killed when their small plane crashes a few miles from Point Barrow, Alaska.
1942: The Texas Oil Co.’s tanker S.S. Ohio, though torpedoed, bombed repeatedly, and even hit by a crashed German dive bomber, makes it into Malta harbor with 12,000 tons of desperately needed fuel to keep the island’s defenses going.
1947: India becomes independent from the United Kingdom.
1971: The world effectively goes off the gold standard when President Nixon announces that the United States will no longer redeem dollars for gold.
August 14, 2005
Students at New Zealand's Waiariki Institute of Technology are suing the school because the degree programs they took are unaccredited and won't allow them to be registered as social workers. The students majored in the nontraditional "kaupapa Maori and adventure therapy" B.A. programs, and are now claiming that the degrees are worthless.
Waiariki's academic director doesn't see any breach of contract. "They got what they paid for, which was a degree."
Governing law clauses in New Jersey
Contractual provisions that specify the law that will govern the agreement are common -- so common that they often tend to fade into the boilerplate. But, as all good contracts lawyers know, they're not always enforceable. New Jersey judges, for example, often prefers to apply the law they know rather than the one the parties have chosen, as Gianfranco Pietrafesa of Cooper Rose & English (Summit, N.J.) in New Jersey Law on Governing Law Contract Provisions.
Today in History: August 14
1040: Mac Bethad mac Findláech, known to history as "Macbeth," becomes King of Scotland when he slays Duncan I in battle near Elgin in Moray.
1771: Sir Walter Scott, the lawyer who led the successful battle to allow the Bank of Scotland to continue to issue banknotes, is born at Edinburgh. Oh, he also wrote novels and poetry.
1880: Cologne Cathedral is finally completed, 600 years behind schedule. The original contract did not contain liquidated damages clauses for delay.
1933: A metal cable rubbing against the dry bark of a pine tree ignites the Tillamook Burn, a forest fire that will burn 375 square miles of timber worth about $450 million (in 1933 dollars).
1951: William Randolph Hearst, who was expelled from Harvard for putting faculty pictures on the bottom of chamber pots, dies at Beverly Hills, California.
1968: The British Parliament passes the Marine Offenses Act to outlaw independent offshore radio stations and protect the BBC monopoly.
1980: Lech Walesa leads a dockworkers' strike at Gdansk, Poland. This will lead to the formation of the Solidarity union.