September 13, 2005
Today in History: September 13
1791: King Louis XVI of France accepts a new constitution. He’ll be executed anyway.
1806: British Whig leader Charles James Fox dies at London. He probably holds the record for profligacy by an English politician, having managed to run up £140,000 in debt by age 25.
1857: Chocolate tycoon Milton Snavely Hershey is born to a Mennonite family on a farm near Derry Church, Pennsylvania. His first candy business will fail in 1883, but he’ll go on to try again.
1860: John Joseph “Black Jack” Pershing (Nebraska Law 1893), the only U.S. lawyer to achieve the rank of General of the Armies, is born near Laclede, Missouri.
1899: Real estate man Henry Hale Bliss becomes the first American to be killed by an automobile when he’s run down by a taxi at 74th St. and Central Park West in New York City.
1985: Japan’s Nintendo introduces one of the most successful video games of all time, Super Mario Bros.
1998: George Corley Wallace (Alabama Law 1942), the front-runner for the 1972 Democratic Presidential nomination until he was felled by the bullet of an attempted assassin, dies at Montgomery, Alabama.
September 12, 2005
Plaintiffs Afflicted by Spyware Might Not Be Bound by Arbitration Clause in EULA
Most computer users have been afflicted by Spyware – that is, software that a computer user unwittingly downloads from the Internet which allows a company to track, profile and analyze a computer user’s behavior for the purposes of sending the computer user targeted advertising.
In Illinois, a group of computer users brought a class action lawsuit against, among others, a Spyware and advertising company that use the software. The lead plaintiff alleged that, without his consent, the defendants caused Spyware to be downloaded onto his personal computer, and that the Spyware traced his Internet use, invaded his personal privacy and caused substantial damage to his computer. He claimed that defendants “secretly installed” Spyware onto his computer by bundling it with other software that is free on the Internet – e.g., when the computer user downloads and installs a game, she also simultaneously downloads Spyware.
The Defendants claimed that an End User License Agreement (“EULA”) informed plaintiffs that Spyware would be installed and used to monitor the computer user’s Internet usage. The plaintiffs, however, claimed that the defendants installed the Spyware in at least three different ways that avoided showing the EULA to computer users. In response, defendants asserted that the computer user is presented with an opportunity through a hyperlink to read the EULA before downloading any software.
On defendants’ motion to stay the litigation in favor of arbitration, one issue was whether plaintiffs were bound by the arbitration clause contained in the EULA. The court held that the lead plaintiff raised a triable issue of whether he agreed to the EULA, or was even provided with notice of its existence. The court distinguished ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996):
Here, by contrast, plaintiff claims that he was not given notice of the EULA’s existence prior to installation, Spyware begins consuming computer resources when it is installed, and uninstalling Spyware is [a] significantly more confusing and vexing process than returning a product.
Sotello v. DirectRevenue, LLC, 2005 U.S. Dist. LEXIS 18877 (N.D. Ill. Aug. 29, 2005).
[Meredith R. Miller]
Weekly Top Ten
Folowing are the top ten most-downloaded papers from the SSRN Journal of Contract and Commercial Law for the 60 days ending Sunday, September 11, 2005. (Last week's rank 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 (2) On Collaboration, Organizations, and Conciliation in the General Theory of Contract, Ethan J. Leib (Cal-Hastings).
3 (5) The Limits of Lawyering: Legal Opinions in Structured Finance, Steven L. Schwarcz (Duke).
• 4 (-) Brand New Deal: The Google IPO and the Branding Effect of Corporate Deal Structures, Victor Fleischer (UCLA).
5 (4) The Posthumous Life of the Postal Rule Requiem and Revival of Adams v. Lindsell, Peter Goodrich (Cardozo).
6 (6) Friends in High Places: Amity and Agreement in Alsatia, Peter Goodrich (Cardozo).
7 (7) Is Forum-Shopping Corrupting America's Bankruptcy Courts?, Todd J. Zywicki (Geo. Mason).
8 (8) On-line Boilerplate: Would Mandatory Website Disclosure of E-standard Terms Backfire?, Robert A. Hillman (Cornell).
9 (9) New Basics: 12 Principles for Fair Commerce in Mass-Market Software and Other Digital Products, Jean Braucher (Arizona).
10 (-) Employment as a Relational Contract, Robert C. Bird (UConn-Marketing).
The dark side of relational contracts
Few contracts are more typical of long-term relational agreements than the contract between a corporation and its Chief Executive Officer. The relationship, rather than the letter of the agreement, tends to become important -- as illustrated by the recent controversy and Delaware Supreme Court decision in the case of Michael Ovitz and Disney.
The Disney decision held that directors weren’t liable to shareholders for failure to insist on their contractual rights after firing Ovitz. Two recent takes on the Disney decision, are Lessons from Disney by Michael G. O'Bryan of San Francisco’s Morrison & Foerster LLP, and The Disney Decision, by Michael Disney, Bill Gula, Carol Hansell, Alan Golden and Guy Lander of Toronto’s Davies Ward Phillips & Vineberg.
Boilerplate at Michigan
The University of Michigan, reeling from Saturday's humiliating home football loss to Notre Dame, will try to rebound with Boilerplate: Foundations of Market Contracts, September 23-24 in Ann Arbor.
This is a helpful reminder -- there's still time to register. The line-up of papers:
* Robert Ahdieh (Emory), The Strategy of Boilerplate
* Douglas Baird (Chicago), The Boilerplate Puzzle
* Lucian Bebchuk (Harvard) & Hon. Richard Posner (Chicago), One-Sided Contracts in Competitive Consumer Markets
* Omri Ben-Shahar & James J. White (Michigan), Boilerplate and Economic Power in Auto Manufacturing Contracts
* Michelle Boardman (Geo. Mason), Contra Proferentem: The Allure of Ambiguous Boilerplate
* Stephen Choi (NYU) & Mitu Gulati (Georgetown), Contract as Statute? Boilerplate Contracts & the Paradox of Efficiency
* Kevin Davis (NYU), The Role of Nonprofits in the Production of Boilerplate
* David Gilo & Ariel Porat (Tel Aviv), The Hidden Roles of Boilerplate in Standard Form Contracts
* Robert Hillman (Cornell), On-Line Boilerplate: Would Mandatory Website Disclosure of E-Standard Terms Backfire?
* Jason Johnston (Penn), The Return of Bargain: An Economic Theory of Standard Form Contracts and the Negotiation of Business Relationships
* Ronald Mann (Texas), "Contracting" for Credit
* Margaret Jane Radin (Stanford)
* Todd Rakoff (Harvard)
* Henry Smith (Yale), Modularity in Contracts: Boilerplate and Information Flow
Today in History: September 12
1609: The Dutch East India Co.’s Henry Hudson, looking for a shorter route to the East Indies, discovers the Hudson River instead.
1683: Allied forces under King John III Sobieski of Poland defeat a larger Turkish force and raise the Siege of Vienna, marking the turn of the tide for Muslim expansion into Europe.
1812: Richard March Hoe, who will revolutionize printing by inventing the rotary press, is born at New York City.
1818: Dr. Richard Jordan Gatling, M.D., best known as the inventor of the machine gun, is born at Hertford County, North Carolina. He came up with the idea as a humanitarian effort to reduce the number of soldiers needed to fight a war.
1847: The captured members of St. Patrick’s Battalion, a unit of Irish Catholics who had deserted from the U.S. Army to fight for Mexico, are hanged en masse by order of General Winfield Scott.
1938: The contract for the sale of a house is signed in Swinton v. Whitinsville Savings Bank.
1940: Four French teenagers discover some odd paintings inside a cave at Lascaux, France.
1959: The first regularly scheduled color TV program, Bonanza, premieres on NBC.
1993: TV’s most famous lawyer, Raymond “Perry Mason” Burr dies at Healdsburg, California.
September 11, 2005
Steve Urkel on relational contracts
From Family Matters (ABC-TV):
Steve Urkel: I have a spectacular evening planned!
Laura: We're not going anywhere until the ground rules are straight. First of all, this is not a real date. It's a "non-date". Second, no one must ever know about this "non-date". Third, if you touch me at any time, the "non-date" is over.
Steve Urkel: Well, what if you trip or something?
Laura: Just let me fall! The rest of the rules are covered in this contract.
Steve Urkel: [reading] "No mouth breathing, no snorting, no drooling." Who does these things? They're disgusting. Where do I sign?
Today in History: September 11
1609: Sailing for the Dutch East India Company, Englishman Henry Hudson lands for the first time on Manhattan Island.
1786: Delegates from five U.S. states (Delaware, New Jersey, New York, Pennsylvania, and Virginia) meet at Annapolis, Maryland. They will end the meeting four days later with a call for a constitutional convention.
1789: New York lawyer Alexander Hamilton is named the first U.S. Secretary of the Treasury.
1789: Sir Edward Hall Alderson, Puisne Baron of the Exchequer and author of Hadley v. Baxendale, is born at Great Yarmouth in Norfolk.
1816: Carl Zeiss, the founder of the famed optics company that bears his name, is born at Weimar, Germany.
1823: Economist and stock speculator David Ricardo, the father of "comparative advantage," dies at Gatcombe Park, England.
1847: Stephen Foster's hit song Oh, Susanna premieres at a saloon in Pittsburgh, Pennsylvania.
1897: The 600-year-old African kingdom of Kaffa comes to an end with the capture and deposition of its last king and its incorporation into Menelik II's Ethiopian Empire.
1941: Ground is broken on the world's largest office building, the Pentagon in Arlington, Virginia.
1955: The World Wildlife Fund is founded. It will later successfully defend its WWF trademark against the World Wrestling Federation, now World Wrestling Entertainment.
1987: CBS Evening News anchor Dan Rather, angry at being preempted for a tennis match, becomes the first network anchor to stalk off the set and leave nothing but dead air. Critics say it helped his ratings.
1996: Two of America's historic railroads merge, as the Union Pacific buys the Southern Pacific.
2001: The 9/11 attacks destroy the New York World Trade Center and damage the Pentagon.