December 31, 2005
Today in History: Drennan v. Star Paving
On this date, December 31, 1958, the California Supreme Court rewrote every construction contract in the state when it issued Drennan v. Star Paving, 333 P.2d 757 (Cal. 1958).
In the case, contractor Drennan called Star Paving to get a quote to build the Monte Vista Elementary School in Lancaster, California (left). Star did not say that its bid was irrevocable, and Drennan did not pay for an option. After Drennan used Star's bid in his contract proposal, but before Drennan accepted the bid, Star notified him that its bid was mistaken and that it was withdrawn.
Justice Traynor, for the court, held that a subcontractor's bid on a construction job could not be revoked once the contractor had relied on it, even if it had not been accepted and even if no consideration had been paid for keeping the bid open. (Photo: AALSContracts.com)
December 30, 2005
Today in History: DC Gets the UCC
It wasn't in effect a year and a half earlier, on April 17, 1962, when Ora Lee Williams, a mother on relief, bought a $514.95 stereo (about $3,000 today) from the Walker-Thomas Furniture Co. of Washington, D.C. (left). But Circuit Judge J. Skelly Wright (right) applied it anyway to find that the plaintiff stated a claim for unconsionability in the casebook staple, Williams v. Walker-Thomas Furniture Co., 350 F.2d 445 (D.C. Cir. 1965). (Photos: AALSContracts.com).
December 29, 2005
Led Zeppelin on Marketing
music by Jimmy Page & Robert Plant
lyrics by Mark Davis and Rob "Iceman" Izenberg
There's a lady who goes
To the store that won't close,
And she's shopping at 7-Eleven.
Down the aisle there she sees
Ding Dongs, beer, and Friskies
and a Snickers really satisfies her!
Oooh oooh oooh
Oooooooh, make my Slurpee!
Today in History: R.I.P. Seth Wyman
On this date, December 29, 1827, Col. Seth Wyman, the defendant in Mills v. Wyman, dies at Shrewsbury, Massachusetts. His second-oldest older son Seth, Jr. (1787-1865), will inherit most of the property and administer the old man's estate. A picture of Seth, Jr., is here. The classic story of the case is told by Geoffrey Watson here.
Written contracts have developed a form of signalling and processes in order to ensure contract formation. Oral contracts have their form too. Now, we have electronic contracts. How should be deal with signalling in these cases?
Moringiello, Juliet, "Signals, Assent and Internet Contracting" . Rutgers Law Review, Vol. 57, p. 1307, 2005 http://ssrn.com/abstract=859485
Part of the abstract states:
While the Internet is new, the challenges presented by Internet contracts are not. Traditional contract rules, based on the paradigm of two individuals meeting face-to-face to negotiate written terms, have been modified over the years to accommodate diverse methods of communicating contract terms. These modifications have been fashioned to account for the different signals sent to offerees by new methods of contracting.
Today's courts, however, virtually ignore the fact that the common law of contracts has developed rules that account for the different signals sent by contract terms that are delivered in novel ways. This article argues that courts must consider the cautionary function that the paper contract form has traditionally served and account for the different signals sent by electronic contracts. To support this argument, the article reviews the electronic contracting case law and compares it to older cases addressing the issue of assent when contract terms are delivered by novel methods. The paper then discusses the factual differences between paper and electronic contracts, drawing on computer science and marketing scholarship examining the ways that individuals perceive electronic communications. The paper concludes by suggesting approaches to the assent issue that take these different perceptions into account.
December 28, 2005
AALS: What I Really Hate About Commercial Law
The AALS Contracts Section's program is, as we've mentioned before, scheduled for Saturday, January 7, 2006. But there's a great warm-up planned for Friday, when our sister Section on Commercial and Related Consumer Law presents Commercial Calamities. An A-list of commercial law scholars -- most of them also active Contracts Section members -- will present the Dark Side of Commercial Law.
Three papers are particularly interesting to Contracts folks. Victor Goldberg (Columbia) will tee off on Wood v. Lucy, Lady Duff Gordon. and its unfortunate effect on UCC 2-306. Bob Hillman (Cornell) will take a 9-iron and work over UCC 2-209 (the one on modification, rescission, and waiver), an "example of both substantive chaos and drafting disaster." Bob Scott (Virginia) will take on that casebook staple, Hoffman v. Red Owl. Also on tap are Amy Boss (Temple) and Jim White (Michigan). Larry Garvin (Ohio State) will moderate. Here's the official description.
Despite, or perhaps because of, the brilliance of its framers and the interests of its users, commercial law has at least its share of errors, omissions, archaisms, peculiarities, and downright stupidities. Our session is devoted to airing our favorite annoyances about commercial law, ranging from problems with specific provisions to problems with structure and form. Our aim here is not to be particularly constructive but rather to be interestingly critical, though in the course of criticism doubtless some hints toward improvement will emerge.
Today’s panelists are drawn from a larger group whose accumulated grievances will be collected in a symposium to be published in the Ohio State Law Journal. Each participant will present a pet peeve, with plenty of time for Section members to add their own (or, at whatever peril, to defend a cherished doctrine or structure against the attacks of others).
The session is scheduled for 1:30 to 3:15. The Section business meeting will take place at the conclusion.
Well, Larry Ribstein (Illinois) and Bruce Kobayashi (Geo. Mason) are not exactly conventional thinkers. Here's a blast from the past, their Emory Law Journal piece, State Regulation of Electronic Commerce. Here's the abstract:
There is a widespread belief that regulation of electronic commerce by individual states is unworkable because firms doing global business on the Internet easily can evade state regulation or, conversely, because firms are subject to excessive regulation due to states' overlapping jurisdiction. Instead, it is believed that electronic commerce is best regulated at the federal or even global level, and that any state regulation should be pursuant to uniform laws. This article challenges this conventional wisdom. It shows that regulation of electronic commerce by individual states has several advantages over federal or uniform state laws and that the problems of state regulation have been exaggerated.
First, state regulation provides variety, evolution and competition that is especially well suited to the dynamic nature of electronic commerce. Second, courts can minimize jurisdictional overlaps by enforcing choice-of-law and choice-of-forum contracts. Third, markets alleviate concerns that enforcing contractual choice would lead to a race-to-the-bottom in state Internet regulation. Any remaining problems with state regulation should be analyzed in comparison with those that would result under federal or uniform state law.
Yep, We've Got a Good Deal
Our colleague Paul Caron over at TaxProf Blog has the details of a new U.S. government survey of what professors do all day long. Not surprisingly, they teach, research, and do "other" stuff. There's no separate breakouts for law schools, but the average teaching load at a U.S. law school (6 hours a semester) compares pretty well to all the disciplines listed.
The average professor teaching at a doctoral public university spends 10 hours a week in the classroom and writes 5 articles, 1 review, and half a book every year. No wonder the Ph.D.s are looking for jobs here.
December 27, 2005
Non-Contract Tools and IT Contracting
There are methods for for contracting parties engaged in complex tasks to ensure performance that don't involve putting terms in the contract. They may rely on reputation, for example, or they might use pre-contract quality certification of vendors. Francis R. Xavier of the Department of Economics at Hyderabad University takes a look at this in Determinants of Inter Firm Contractual Relations: A Case of Indian Software Industry. Here's the abstract:
We analyze the impediments to inter-firm contractual relations, existing formal and informal ways of getting around them, especially the role of reputation and trust in mitigating the conflict of interest between the firms. We study it in the context of Indian IT industry. Contract design is specified as a function of reputation (age, repeated contracts and quality certification), asset specificity, complexity and uncertainty. We test the likelihood of observing Time & Material contract, a better propertied contract in the face of uncertainty. Empirical evidence confirms the propositions posited. Reputed firms tend to get highly complicated and uncertain projects. Asset specific investments do not seem to have any implication on contract type and complexity. The results broadly hint that the firms reckon more on creating an understanding through formal quality certifications to solve pre-contractual adverse selection problems and repeated contracting to solve the problems of behavioral uncertainties rather than relying on the court.
Contracts Subject of Transactional Panel
There are some things of interest to Contracts profs (besides our own annual session) at the AALS Annual Meeting, slated for January 3-7, 2006, at the Marriott Wardman Park in D.C. On Wednesday, January 4, there's a program on transational law. Breakout panels include two sessions on Contracts -- Aribtation, Comparative Concepts (Remedies). Speakers will include Janet Levit (Tulsa), Hannah L. Buxbaum (Indiana-Bloomington). William S. Dodge (Cal-Hastings), Ruth E. Gordon (Villanova), Andrea K. Bjorklund (Cal-Davis), David V. Snyder (Tulane), and Kellye Y. Testy (Seattle).
Only the Best for Sinatra
The late Frank Sinatra had a reputation as a man who liked his food and his liquor. But his tastes were good, not trendy. For example, his touring performance contract specified that his own dressing room be fitted out with Jack Daniel's, Chivas Regal, Absolut or Stolichnaya Vodka, Courvoisier, Beefeater Gin, Nova Scotia salmon, jumbo shrimp, and unfiltered Camel cigarettes -- but also with egg salad sandwiches, Campbell's Chicken & Rice Soup (three cans), and cherry Life Savers.