October 8, 2005
Twenty-Five Years Ago (Almost)
Just over 25 years ago P.S. Atiyah published his important work, THE RISE AND FALL OF FREEDOM OF CONTRACT. OXFORD: CLARENDON PRESS, OXFORD UNIVERSITY PRESS. 1979. The importance of this work is attested to by Charles Fried who reviewed the book at 93 Harv. L. Rev. 1858. Fried wrote, "This monumental work is informed by a single coherent theme: [T]he nature of contractual and promissory liability has been largely misunderstood by lawyers, philosophers, and others. ... [P]romise-based liability is seen as the paradigm case for discussion both in law and among philosophers, and perhaps in ordinary discourse[,] [but] [f]ar from being the typical case of obligation, a promise-based liability may be a projection of liabilities normally based on benefit or reliance." Although Fried disagrees with Atiyah in various places, he aptly notes that Atiyah provides a coherent and profound insights into the nature of the history of contract and what that history tell us today.
[Stephen J. Safranek]
Dame Evans on Long Term Contracts
One day the Reverend Billy Graham was introduced to Dame Edith Evans. "We in the ministry could learn a good deal from you," he declared, "about how to put our message across." "You in the ministry have an advantage over us," Evans replied. How so? "You have long-term contracts."
[Meredith R. Miller]
Contracts, Treaties and the Like
This article is useful in reorienting ourselves to remember that contracts are a subset of agreements which are themselves a type of promise. The status of contracts is related to these other types of agreements.
Llewelyn, David and Tehan, Maureen, "'Treaties', 'Agreements', 'Contracts' and 'Commitments' - What's in a Name? The Legal Force and Meaning of Different Forms of Agreement Making." Balayi: Culture, Law and Colonialism, Vol. 7, pp. 6-40, 2005. http://ssrn.com/abstract=815324
The multi-dimensional nature of treaty and agreement making has assumed a central focus in the conduct of relations between Indigenous peoples and settlers in Australia and elsewhere. Whether as a means of resolving disputes, delivering government programmes, or establishing common understandings, agreement making, however defined and named, has become the key tool for engagement between Indigenous and non-Indigenous Australians. Agreements come in all shapes and sizes ranging from registered Indigenous Land Use Agreements (ILUA) to Statements of Commitment, Memorandums of Understanding and Regional Agreements. In other jurisdictions these may be called 'treaties'. This paper examines the plethora of agreements in Australia from the point of view of their enforceability,with particular reference to the categories of agreement and the status of the parties. The paper discusses various categories of agreement and the enforceability of each type. This discussion aims to provide practitioners and native title parties information to assist them choose the appropriate agreement type for their purpose, and to understand the language, meaning and consequences of particular agreements. The paper does not seek to provide an exhaustive legal analysis of the elements of each type of agreement. Rather, it highlights the significant characteristics of each type of agreement, including its common legal status and its most frequent applications. In doing so, the paper provides an accessible insight into the intersection between contract law and agreement making.
Today in History: October 8
1480: A four-day battle begins in which forces of the Golden Horde, opposed by those of Grand Duke Ivan III of Moscow fail to effect a crossing the Ugra River. The ultimate result of the ensuing stand-off is that Russia becomes formally independent of the Khans.
1600: The world’s oldest republic, San Marino, adopts its written constitution.
1869: Former New Hampshire lawyer U.S. President Franklin Pierce, who said after losing renomination, "What else is there to do now but drink?" dies of cirrhosis of the liver at Concord, New Hampshire.
1871: A fire starts in a barn owned by Patrick and Catherine O’Leary. The O’Leary home itself is one of relatively few buildings that will survive the Great Chicago Fire. (Left: Corner of Dearborn & Monroe Sts. after the fire -- Wikipedia Public Domain.)
1889: Airline entrepreneur Collett Everett Woolman is born at Bloomington, Indiana. He’ll start Delta Airlines as a crop-dusting outfit in Macon, Georgia.
1944: The Adventures of Ozzie and Harriet debuts on CBS radio. Although it will move in 1949 to NBC and in 1952 to television, it will stay on the air until 1966.
1957: Owner Walter O’Malley (Fordham Law 1930) announces that the Brooklyn Dodgers will move to Los Angeles, California, after Brooklyn authorities resist his plan to replace the aging Ebbets Field. He’ll build his new park in L.A. entirely with private money.
October 7, 2005
"No oral modification" Clause Doesn't Work
Complex and sophisticated loan documents that provide they cannot be amended except in writing can nevertheless be modified by by oral agreement. That’s the lesson from a recent Ninth Circuit opinion, Fanucchi & Limi Farms v. United Agri Products, decided under California law.
The case involved a debtor's claim that its lender orally agreed to allow its existing loan to be subordinated to new financing obtained by the debtor. The case was dismissed because the loan documents specifically prohibited oral modifications. The Ninth Circuit reversed. It’s true, says the court, that oral amendment would violate the contract terms, but a subsequent oral agreement can work a novation of the original loan documentation. The oral agreement would thus simply displace the earlier detailed and un-amendable written agreement with an amendable oral one.
Peter S. Munoz of Reed Smith in San Francisco offers an overview of the case (and an evaluation from a lender’s perspective) in Ninth Circuit Allows Oral Agreement To Supersede Loan Documents.
Gotanda on Damages Under the CISG
The U.N. Convention on Contracts for the International Sale of Goods is a worthy document in many ways, but it is just a tad weak on how you’re supposed to go about calculating damages. John Y. Gotanda (Villanova) notes that this has led to the kind of international inconsistency that CISG was supposed to help alleviate. He offers some thoughtful suggestions in Awarding Damages under the United Nations Convention on the International Sale of Goods: A Matter of Interpretation. Here’s the abstract:
This article seeks to further a great aspiration of international law, providing a uniform set of rules governing trade. To this end, it offers a new method of interpreting the United Nations Convention on the International Sale of Goods that would foster greater uniformity among decisions calculating damages.
Claims for damages in transnational contract disputes often involve millions of dollars. While the Convention provides for the awarding of damages, the relevant articles set forth only the most basic framework for calculating damages. To resolve unsettled issues concerning the calculation of damages, courts and tribunals have turned to domestic rules, instead of searching for an answer through interpreting the Convention itself, as mandated by Article 7(2) of the Convention. This practice has resulted in damages awards that are inconsistent or arbitrary and ultimately undermine the purposes and usefulness of the Convention. The article proposes that tribunals should try to fill gaps by trying to find a solution within the Convention itself, through an analogical application of specific provisions or on the basis of principles underlying the Convention as a whole, before turning to domestic law. This approach would lead to more consistent and predictable awards of damages and would ultimately further the goal of the Convention to create uniform commercial law.
Planned Memphis Move Gets Boost
Good news for the law school at the University of Memphis -- Tennessee Governor Phil Bredesen has announced his support for a plan to move the law school to a new downtown campus at the beautiful and historic Post Office Building (left), which will be fully restored.
How Much Can the Poor Nation Stand?
Today's NY Times has an article about legal blogs ("blawgs"). The article reports on the following:
A survey conducted by Blogads.com, which administers online advertising on blog sites, and completed voluntarily by 30,000 blog visitors last spring, found that 5.1 percent of the people reading the blogs were lawyers or judges, putting that group fourth behind computer professionals, students and retirees. The survey also found that of the 6,232 people who said they also kept their own blogs, 6.1 percent said they were in the legal profession, putting lawyers fourth again, behind the 17.5 percent who said they were in the field of education, 15.1 percent in computer software and 6.4 percent in media, said Henry Copeland, founder of Blogads. He conceded that the survey was hardly scientific, but argued that at least it undermined the popular image of the blogosphere as dominated by antsy teenagers and programmers in their pajamas, tapping away at keyboards all night.
Although the survey was concededly "hardly scientific," we can at least assume that there are a lot of lawyers typing away and reading in the blogosphere. Being around lawyers and aspiring lawyers all of the time, the statistic in the article that was more striking (at least to me) was that lawyers make up "considerably less" than 1% of the population (I assume the US population, but the article doesn't specify).
ContractsProf doesn't "get props" in the article, but some notable Prof Blogs do: Eugene Volokh at www.volokh.com; Lawrence Lessig at www.lessig.org; Jack Balkin at balkin.blogspot.com; and Glenn Reynolds at www.instapundit.com.
All of the blawging brings to mind Tom Paxton's song One Million Lawyers (off of the Album "One Million Lawyers and Other Disasters"):
In spring there's tornadoes and rampaging floods,
In summer it's heat stroke and draught.
There's Ivy League football to ruin the fall,
It's a terrible scourge, without doubt.
There are blizzards to batter the shivering plain.
There are dust storms that strike, but far worse
Is the threat of disaster to shrivel the brain,
It's the threat of implacable curse.
In ten years we're gonna have one million [blawgers],
One million [blawgers], one million [blawgers].
In ten years we're gonna have one million [blawgers].
How much can a poor nation stand?
[Meredith R. Miller]
Today in History: October 7
1571: The combined fleets of Venice, Spain, and the Papacy, under Don John of Austria, defeat the Ottoman fleet in the Battle of Lepanto, marking the end of undisputed Muslim rule of the eastern Mediterranean.
1763: King George III issues a proclamation restricting English settlement in North America west of the Allegheny Mountains.
1892: State judge Oliver Wendell Holmes, Jr., moves out of the shadow of his more famous father when the Autocrat of the Breakfast Table dies at age 85.
1806: Englishman Ralph Wedgwood receives a patent for carbon paper. Since neither steel pens nor typewriters are around, there’s not much demand.
1826: America’s first railroad opens for business: the three-mile Granite Railway between Charlestown, Massachusetts, and the granite quarries in nearby Quincy.
1865: Cornell University, founded by a businessman who made his money from the Western Union Telegraph Co., opens its doors at Ithaca, New York. The law school (left) will come 22 years later. (Image: Wikipedia, GNU License)
1912: The Helsinki Stock Exchange opens with its first trade.
1958: President Eisenhower nominates Potter Stewart (Yale Law 1941) for a seat on the U.S. Supreme Court.
1982: The musical Cats opens on Broadway. It will run for 18 years.
1996: News Corporation launches the Fox News Network as a competitor to Turner’s CNN.
2003: Gray Davis (Columbia Law 1967) of California becomes the second state governor in U.S. history to be recalled by the voters. (The first was Lynn Frazier of North Dakota, in 1921.)
October 6, 2005
Texas Wesleyan Dedicates New Library
Texas Wesleyan Law School dedicated its newly renovated library this week, naming it for prominent Fort Worth attorney Dee Kelly. Kelly, founder of the 90-lawyer Kelly, Hart & Hallman, P.C., has been one of the school’s guiding spirits, and has also served on the board of the University of Texas Law School Foundation and as Chair of the Tarrant County Bar Foundation.
The new library is part of a renovation that adds more than one-third more space to the school’s downtown Fort Worth campus. Justice Anthony Kennedy will be the featured speaker at ceremonies there the week of October 17.
Goldberg on Risk Management
Is it helpful to talk about "risk aversion" when we are talking about transactions among sophisticated parties? Victor Goldberg (Columbia) doesn't think so. He prefers thinking about the problem as "risk management," and develops the idea in an interesting new paper, Risk Management in Long-Term Contracts. Here's the abstract:
Long-term contracts are designed to manage risk. After a brief discussion of why it is unhelpful to invoke risk aversion for analyzing serious commercial transactions between sophisticated entities, this paper focuses on adaptation to changed circumstances. In particular, it considers the options to abandon and the discretion to change quantity. It then analyzes a poorly designed contract between Alcoa and Essex showing how the parties misframed their problem and designed a long-term contract that was doomed to fail.
Today in History: October 6
1846: Inventor and entrepreneur George Westinghouse is born at Central Bridge, New York.
1887: Architect Charles-Edouard Jeanneret (“Le Corbusier”), the man who will give the world those great sterile concrete “plazas” that so many cities adopted in the Sixties and Seventies, is born at La Chaux-de-Fonds, Switzerland.
1893: Owners of the near-bankrupt North Dakota Milling Co. in Grand Forces, desperate for a product that will make money in the face of a growing recession, come up with “Cream of Wheat.”
1903: The High Court of Australia sits for the first time. For more than 70 years it will move between Sydney and Melbourne before coming to rest in Canberra in 1980. (Photo: John Conway, GFDL License)
1927: Warner Bros. premieres the first “talking” motion picture, The Jazz Singer. Only a few minutes of the film are talking, but Al Jolson sings five songs, including "My Mammy."
1945: Ejected from a Chicago Cubs World Series game because his pet goat (sitting next to him in the stands) smells bad, angry tavern owner William Sianis curses the Cubs, who go on to lose the series. They have not one a pennant since.
2004: Sirius Satellite Radio announces plans for a $500 million contract with radio personality Howard Stern.
October 5, 2005
A Bronx Tale
There was colorful article in the NY Times this past weekend about an old Bronx courthouse and a related breach of contract suit that caused an architect to quit architecture and take up painting. The painter was Oscar Bluemner, who will soon have a retrospective exhibit at the Whitney Museum of American Art. The article describes him as “the sad-eyed German émigré with a shaggy mustache who designed the Bronx Borough Courthouse, the majestic Beaux-Arts structure that stands at 161st Street and Third Avenue in the Melrose section."
In 1903, a “Tammany hack,” Michael J. Garvin, was handed the job of designing the courthouse. Garvin had no experience or training as an architect, so he hired Bluemner to “ghost design” the courthouse. If Bluemner’s design for the building was accepted, Garvin said he would credit Bleumner as the architect and split the $40,000 commission. When the building design was approved, Garvin never paid Bluemner. The article explains:
Naïvely, Bluemner never bothered asking Garvin for a contract; as he testified in court later, it "never occurred to me that he would not keep his word." Although Bluemner worked for months on the design without pay, Garvin, far wiser in the ways of hard-knuckled urban politics, submitted it under his name alone. As The New York World reported, Garvin explained his action to Bluemner by saying: "Ability counts for nothing in politics. If you have the 'pull,' you get the work. I have the 'pull.' "
Apparently, after many years and various appeals, Bluemner only ever saw $5000. The article tells that Bluemner’s “experience with Garvin and the years of subsequent litigation left him so disillusioned that he abandoned any dreams of becoming a public architect.” Instead, he took up painting buildings – he wrote in his diary: “[a]s a painter, only being free matters.”
As for the Beaux-Arts style courthouse, it is still in the
[Meredith R. Miller]
Katz to Visit Oxford
Contracts prof and family law expert Sanford N. Katz (Boston College) has been elected a Visiting Fellow at Pembroke College, Oxford University, for the Trinity Term 2006. It’s Katz’s third stint as a Visiting Fellow, once before at Pembroke and once at All Souls.
He has another connection with Oxford, having been responsible for starting the program under which BC undergraduates can spend a year at Pembroke as matriculated Oxford students.
O'Connor Joins W&M
The College of William & Mary has announced that former Supreme Court Justice Sandra Day O'Connor has been signed as the school's new Chancellor. She succeeds Henry Kissinger, who stepped down from the post this year. Other famous chancellors in the school's history include George Washington, John Tyler, Margaret Thatcher, and Warren Burger. (Photo: W&M Press Release)
Today in History: October 5
1658: Maria d’Este, future queen consort of King James II, is born at Modena, Italy. Her delivery of a healthy son (and thus a Catholic heir) triggers the Whig coup that will oust James from the throne.
1665: The Christian-Albrechts-Universität zu Kiel (often known simply as the University of Kiel) is founded.
1829: New York City lawyer Chester Alan Arthur is born at Fairfield, Vermont. As President, one of his biggest objectives will be to cut tariffs to reduce the embarrassing surpluses the Government keeps running.
1902: Ray Arthur Kroc, the former traveling salesman who did more than anyone to create American fast food culture, is born at Oak Park, Illinois.
1921: The first baseball World Series game is broadcast on radio. The New York Yankees beat the New York Giants at the Polo Grounds, 3-0. The Giants will win the Series, though.
1936: Two hundred miners and other unemployed workers set out on a march from Jarrow to London to petition Parliament for relief. They won't get it.
1941: Former Supreme Court Justice Louis Dembitz Brandeis (Harvard Law 1877) dies at Washington, D.C.
1953: California Governor and failed Vice Presidential candidate Earl Warren (UC-Berkeley Law 1914) is sworn in as Chief Justice of the United States.
1962: The Beatles release “Love Me Do” in Britain. It will be the band’s first hit.
1969: The BBC decides to offer something completely different, and comes up with the debut of Monty Python’s Flying Circus.
October 4, 2005
No ADR for King of Pop
Michael Jackson has sued one of his former concert promoters, Marcel Avram and his German company, in a dispute related to Jackson backing out of two concerts on New Year's Eve 1999. Avram previously sued Jackson over the breach of contract in Santa Barbara in November 2002, and a jury eventually determined that Jackson owed Avram $5.3 million. The parties subsequently signed a settlement agreement to resolve all claims, but a dispute under the settlement agreement has apparently arisen and Avram had commenced arbitration. Jackson's suit seeks injunctive relief to prevent arbitration, and instead resolve the differences in the Santa Barbara Superior Court.
A Mexican Carbolic Smoke Ball
A poor 61-year-old Mexican grandmother who turned her grandson into police to get a $100,000 reward may not get the money, since she failed to follow the offeror's specifications.
It's a classic unilateral offer scenario. The Crime Stoppers organization had offered the reward for the capture of Raul Gomez-Garcia, accused of killing one Denver police officer and wounding another. Gomez-Garcia escaped a four-week manhunt and went to Mexico. His grandmother, Florencia Castañeda Rodriguez, who "makes a living scooping up ears of corn left by harvesters and embroidering handkerchiefs," cooperated with police and led Gomez-Garcia to a small convenience store in Culiacán, Mexico, where police were waiting for him.
Trouble is, the Crime Stoppers group requires that anyone who wants to claim the reward must call the organization with the tip, not merely contact local law enforcement authorities. Spokesmen for Crime Stoppers says that whether Castañeda Rodriguez will get the reward is a "gray area" and that it will review the matter when and if Gomez-Garcia is extradited.
[Frank Snyder -- hat tip, Rachel Arnow-Richman]
Gray Lady on Boxtop Licenses
The New York Times has a take on the recent Lexmark International decision, involving boxtop licenses for patented products.
[Frank Snyder -- Hat tip, Gerald Caplan]
A Dubious Milestone
Twenty-two years ago today, in Clearwater, Florida, the first Hooters Restaurant opened for business, proving that you can make money in America selling sex, bad taste, and buffalo wings. (Left, Hooters Girls entertaining troops in the "Let Freedom Wing" tour. Photo: Wikipedia Public Domain.)
The controversial chain only hires female servers, who are required, under the employee handbook to “acknowledge and affirm” that:
my job duties require I wear the designated Hooters Girl uniform.
my job duties require that I interact with and entertain the customers.
the Hooters concept is based on female sex appeal and the work environment is one in which joking and sexual innuendo based on female sex appeal is commonplace.
I do not find my job duties, uniform requirements, or work environment to be offensive, intimidating, hostile, or unwelcome.
Excerpt from the Hooters employee handbook are available on The Smoking Gun.