ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Wednesday, August 24, 2005

The Simpsons on Contract Law

Homer Simpson runs out of donuts at work, so he sells his soul to the devil in exchange for a donut.  (The devil is played by Homer's do-good neighbor, Ned Flanders).  At trial, Lionel Hutz, the Simpsons’ attorney, attempts to undermine the devil's testimony regarding the enforceability of Homer's contract to sell his soul for a donut:

Devil Flanders: I simply ask for what is mine.

Lionel Hutz: That was a right-pretty speech, sir.  But I ask you, what is a contract?  Webster's defines it as "an agreement under the law which is unbreakable."  What is unbreakable?  Excuse me, I must use the restroom.

From the Treehouse of Horrors IV episode, the Homer and the Devil sequence (first aired Halloween 1993).

[Meredith R. Miller]

August 24, 2005 in Quotes | Permalink | TrackBack (0)

Tuesday, August 23, 2005

News in Brief

MultiCultural Radio, one of the nation’s largest minority-owned broadcasters, is now suing to collect the $255,000 contract judgment it won last year, along with other damages from the Air America talk radio network.

Meanwhile, Air America is engaged in “continuous discussions” about repaying the $875,000 in start up loans it got during the 2004 campaign from a publicly funded New York Boys & Girls Club that’s now under investigation by Attorney General Elliot Spitzer.

A 60-40 joint venture between General Electric and Rolls Royce has won the $2.47 billion engine contract for the next generation of U.S. stealth fighters.

Many home heating oil dealers in the Northeast have stopped offering advance contracts for winter fuel oil -- a common hedge against the usual winter spikes --  because current summer prices are higher than normal winter prices.

The Cincinnati (Ohio) school district has approved a contract with a commercial developer to sell 16 of its schools on commission.

The mechanics are out on strike, and flight attendants may follow for Northwest Airlines.

The Illinois Supreme Court’s reversal of a $1.06 billion judgment against State Farm Insurance also has after-market auto parts manufacturers beaming; the court ruled that using after-market parts was not a breach of the insurance company’s duties to its customers.

[Frank Snyder]

August 23, 2005 in In the News | Permalink | TrackBack (0)

Call for Papers: Contracts

                                       CALL FOR PAPERS

                           Friday-Saturday, February 24-25, 2006
                                        Fort Worth, Texas

                           Celebrate the Diversity of Contract Law

Submissions are cordially invited for the inaugural Spring Contracts Conference, a two-day program hosted by the Texas Wesleyan University School of Law.   Papers and works in progress are welcome from those who are working in any aspect of Contract law, including commercial sales topics, and from any methodological perspective, whether doctrinal, theoretical, empirical, historical, economic, critical, comparative, or interdisciplinary.  Works that take an international or civil law approach are also welcome.  Junior scholars are particularly encouraged to participate.

The year 2006 marks some important anniversaries: It's the 25th anniversary of the Second Restatement, and also the 250th anniversary of William Murray, Earl of Mansfield, becoming Chief Justice of England.  It's the anniversary of some famous cases, including the 40th anniversary of Odorizzi v. Bloomfield School District (duress), the 70th of Webb v. McGowin (consideration), and the 90th of Varney v. Ditmars (indefiniteness).  We expect that there will be panels relating to some or all of these topics.  Panel organizers may send out individual calls for papers on those topics.

Those who would like to organize panels of 3-4 papers with a connecting theme are welcome to submit proposals.  Panel proposals should include the name and contact information of the moderator or organizer, and a summary of the proposed papers or works in progress.

Individual submissions should be made by a brief abstract (one page is sufficient) that includes contact information for the author.  Individual submissions will be grouped on panels with like submissions.  There is no publication commitment for the conference, but we expect that some of the panels will arrange for law review publication.  The Texas Wesleyan Law Review may offer publication to selected papers for a special symposium issue.

Deadline for submissions is Friday, November 18, 2005, although earlier submissions will be accepted on a rolling basis.  Submissions after that date will be considered on a space-available basis.  Submissions (E-mail is encouraged) should be sent to:

Franklin G. Snyder
Visiting Professor of Law
Notre Dame Law School
Notre Dame, IN 46556

August 23, 2005 in Conferences | Permalink | TrackBack (3)

Saving Face

If a trailer manufacturer’s disclaimers begin on the first page of a warranty, but continue to the second page, are the disclaimers "on the face" of the warranty within the meaning of the Magnuson-Moss Warranty Act? The District Court of the Southern District of Indiana held that the disclaimers were not on the face of a warranty and, therefore, the disclaimers violated the Act.

The trailer manufacturer argued that, because the list of disclaimers began on the first page, it was prominently displayed and, thus, served the Act’s purpose of alerting consumers to a limitation on damages. The consumer, however, argued for an interpretation of Act based upon the plain meaning of the regulations. 16 C.F.R. § 701.1(i) defines "on the face of the warranty" to mean:

(1) Where the warranty is a single sheet with printing on both sides of the sheet or where the warranty is comprised of more than one sheet, the page on which the warranty text begins; (2) Where the warranty is included as part of a larger document, such as a use and care manual, the page in such document on which the warranty text begins.

The consumer contended that, consistent with the federal regulations, the list of disclaimers should appear in its entirety on the first page of the warranty, even if it meant that the disclaimers came before the warranty coverages.

Adopting the consumer’s plain meaning argument, the court "acknowledge[d] that other courts may interpret the statutes and regulations here differently." Nevertheless, it refused to "expand the meaning of ‘the face of the warranty’ to include second pages."

Miley v. Fleetwood Enterprises, Inc., No. 1:05-CV-0589, __ F. Supp. 2d __ (Aug. 10, 2005).

[Meredith R. Miller]

August 23, 2005 in Recent Cases | Permalink | TrackBack (0)

Today in History: August 23

686: Charles Martel (“the Hammer”) is born at Herstal in what is now Belgium.  His victory against great odds at the Battle of Poitiers will stop the Arab advance into Europe, though it will be two generations before the Arabs are finally driven back across the Pyrenees.

1305: Scottish hero Sir William Wallace is strangled, emasculated, drawn, and quartered at Smithfield Market in London.

1614: The Rijksuniversiteit Groningen is founded.  Today its law school is regarded as one of the best in the Netherlands.

1784: Delegates from counties in what is now the eastern part of Tennessee (then western North Carolina), meeting at Jonesborough, form the “State of Franklin.” It is never recognized by the United States and by 1790 it will cease to exist.

1833: Slavery is abolished in British crown colonies, but not in lands owned and controlled by the East India Company.

1902: Fannie Merrit Farmer opens Miss Farmer’s School of Cookery at Boston, Massachusetts.  She’ll popularize the use of precise measurements in recipes, and get a candy company named after her.

1939: Stalin and Hitler sign agree to the Molotov-Ribbentrop Treaty, which provides for nonaggression and amicably divvies up Finland, Estonia, Latvia, Lithuania, Poland and Romania between the two.

August 23, 2005 in Today in History | Permalink | TrackBack (0)

Monday, August 22, 2005

News in brief

An Akron (Ohio) jury took two hours to decide (6-2) that basketball star LeBron James did not have an oral contract with a local businessman to make a documentary, rejecting Joseph Marsh’s claim for $5.75 million in lost profits.

The Winn-Dixie supermarket chain is suing its excess commercial property insurance carrier, claiming that the company has refused to pay for losses resulting from four hurricanes that hit the Southeastern U.S. last year.

Some 6,500 workers at the Canadian Broadcasting Co. are locked out in a dispute with management, which is demanding the right to use contract workers instead of permanent hires.

A Los Angeles writer is suing ABC television, claiming that its hit series Lost is based on a development concept that was the subject of a contract he signed with ABC in 1977.

British Airways and its catering company, Gate Gourmet, are in the midst of new contract talks despite the fact that the caterer’s firing of 670 striking workers led to a wildcat sympathy strike by BA’s ground staff.

The University of Virginia’s head football coach has a new five-year deal that will pay him $1.7 million a year, a nice raise from the $765,000 he’s making under this current contract, which had two years to run.

Britain’s Everton soccer club says that former captain Alan Stubbs’s decision to leave the Toffees was not, as he claimed, because the club insisted on having a clause in the contract relating to his prior bout with testicular cancer.

The Miami Herald has a good story about the acrimonious contract litigation going on between Belize and the American businessman who bought its privatized national telephone company.

[Frank Snyder]

August 22, 2005 in In the News | Permalink | TrackBack (0)

Get that "Discretionary" "Guarantee" In Writing

The 7th Circuit recently ruled that a fired employee had no right to a pro-rated share of his year-end bonus because it was discretionary.

Plaintiff Lillien applied for a job as general counsel for Peak6. Peak6 sent Lillien two offer letters, promising him a base salary of $150,000 and a "year-end discretionary bonus." The letters also stated that, in the event of an IPO, Lillien would receive stock options. Despite the discretionary language in the offer letters, according to Lillien, two employees of Peak6 told him that the process leading up to an IPO was substantially complete and that he was guaranteed $500,000 in options. Lillien asked the Human Resources department to put this bonus guarantee in writing, but he was informed that Peak6 never puts target bonus numbers in writing. Lillien accepted the job.

When Lillien started work for Peak6, he found out that the company’s CFO had just quit, dooming the IPO process. The company suffered losses and, after roughly 7 months, Lillien was fired. Lillien sued Peak6 on contracts theories. He lost on summary judgment, and the 7th Circuit affirmed.

Lillien claimed, among other things, that Peak6 breached the employment contract by failing to give him a pro-rated share of his year-end bonus. However, the 7th Circuit held that the offer letter explicitly described the year-end bonus as "discretionary." The court determined that the bonus letter made no guarantee of a bonus, and the language of the letter was not open to any other interpretation. Lillien was precluded from introducing evidence concerning bonus conversations with Peak6 employees because of the parol evidence rule.

Lillien v. Peak6 Investments, L.P., 2005 U.S. App. LEXIS 15832 (Aug. 2, 2005).

[Meredith R. Miller]

August 22, 2005 in Recent Cases | Permalink | TrackBack (1)

Weekly Top 10

Ssrn_logo_20 Following are the top ten most-downloaded papers from the SSRN Journal of Contract and Commercial Law for the 60 days ending August 21, 2005.  Last week's ranking in parentheses; • indicates fastest-rising papers.

1 (1) Understanding the Current Wave of Procurement Reform -- Devolution of the Contracting Function, Christopher R. Yukins (Geo. Washington)

2 (5) Freedom, Compulsion, Compliance and Mystery: Reflections on the Duty Not to Enforce a Promise, Jeffrey M. Lipshaw (Wake Forest)

3 (4) On Collaboration, Organizations, and Conciliation in the General Theory of Contract, Ethan J. Leib (Cal-Hastings)

Lauren_willis 4 (4) Decisionmaking & the Limits of Disclosure: The Problem of Predatory Lending, Lauren E. Willis (Loyola-L.A.) (left)

5 (6) The Posthumous Life of the Postal Rule Requiem and Revival of Adams v. Lindsell, Peter Goodrich (Cardozo)

6• (tie) (10) Friends in High Places: Amity and Agreement in Alsatia, Peter Goodrich (Yeshiva)

6 (tie) (7) On-line Boilerplate: Would Mandatory Website Disclosure of E-standard Terms Backfire?, Robert A. Hillman (Cornell)

8 (-) The Limits of Lawyering: Legal Opinions in Structured Finance, Steven L. Schwarcz (Duke)

9 (tie) (-) Evolving Business and Social Norms and Interpretation Rules: The Need for a Dynamic Approach to Contract Disputes, Nancy Kim (Cal Western)

9 (tie) (-) New Basics: 12 Principles for Fair Commerce in Mass-Market Software and Other Digital Products, Jean Braucher (Arizona)

August 22, 2005 in Recent Scholarship | Permalink | TrackBack (0)

Tobacco companies liable under settlement

The North Carolina Supreme Court has ruled that U.S. tobacco companies must pay tobacco growers $424 million as part of the 1999 anti-smoking settlement.  Under the settlement, the companies had agreed to pay tobacco farmers, who had hitherto been paid by the Federal government to grow tobacco, $5.1 billion to compensate them for the losses they'd face from reduced demand.  The settlement provided that the companies would offset any amounts they received from other sources against the companies' obligations.

After Congress agreed to pay $10.1 billion to farmers in exchange for ending tobacco quotas and price supports, the companies argued that they should not have to pay the amounts that had not yet been distributed.

August 22, 2005 in In the News | Permalink | TrackBack (0)

Today in History: August 22

1654: Jacob Barsimon, an employee of the Dutch East India Co., becomes the first Jewish immigrant to what will become the United States when he lands at New Amsterdam.

1791: Slaves in the northern part of Haiti revolt, triggering a twelve-year civil war that will culminate in independence in 1803.

1851: The U.S. schooner America beats 15 other yachts in a race around the Isle of Wight to win a silver cup made by Garrard's of London.  The award will be named the America’s Cup in her honor.

1902: The unsuccessful Henry Ford Co., which had begun life as the unsuccessful Detroit Automobile Co., is reorganized after Ford’s departure and given a new name: Cadillac Automobile Co.

1902: German director Leni Riefenstahl is born at Berlin, Germany.  She will become the first major film maker to be blacklisted for her political views.

1903: Former Prime Minister Robert Arthur Talbot Gascoyne-Cecil, 3rd Marquess of Salisbury, dies at age 73.  He was the son-in-law of Sir Edward Alderson, Baron of the Exchequer and author of Hadley v. Baxendale.

1911: Louvre employee Vincent Peruggia walks out of the museum with da Vinci’s Mona Lisa under his coat.  It remains missing for two years before Peruggia is arrested trying to sell it to a Florence art dealer.

1926: Charles W. Eliot, the man who hired Christopher C. Langdell to revolutionize legal education at Harvard, dies at age 92.

August 22, 2005 in Today in History | Permalink | TrackBack (0)

Sunday, August 21, 2005

Burn, baby, burn!

Heirs of Black Panther leader Huey Newton, who want to make something called “Revolutionary Hot Sauce” for their nonprofit Huey P. Newton Foundation, are seeking a trademark for the slogan “Burn Baby Burn.”  The sauce was developed jointly by ex-Panther David Hilliard and singer Al Green, and will have several versions, on of them “incredibly hot.”  The PTO application for the mark is here.

The slogan came into popular culture during the 1965 Watts Riots, when mobs torched local businesses, shouting "Burn, baby, burn!"  The phrase was originally used by an L.A. disk jockey as an intro to hot new soul records.

[Frank Snyder]

August 21, 2005 in In the News | Permalink | TrackBack (0)

Today in History: August 21

1841: The first U.S. patent for the Venetian blind is issued John Hampson of New Orleans, Louisiana, who solves the problem of how to make the slats move together and stay in place.

1888: William Seward Burroughs of St. Louis, Missouri, gets a patent for the first successful adding machine.  His American Arithmometer Co. will eventually involve into the computer firm Burroughs Corp.

1856: New York City merchant Townsend Harris becomes the first U.S. consul in Japan, where he will eventually negotiate the first trade treaty between the two countries.  John Wayne will play him in the 1958 film The Barbarian and the Geisha.

1863: Confederate troops burn the antislavery town of Lawrence, Kansas, killing all the men and boys they find.  The town will rebuild, and three years later the University of Kansas will be founded there.

1947: Legendary automobile designer Ettore Arco Isidoro Bugatti, whose company, located in Alsace, was virtually destroyed by the Second World War, dies at age 65.

1959: Hawaii joins the Union as the 50th state.

1991: Latvia declares its independence from the former Soviet Union.

August 21, 2005 in Today in History | Permalink | TrackBack (0)