ContractsProf Blog

Editor: D. A. Jeremy Telman
Valparaiso Univ. Law School

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Saturday, February 12, 2005

News in brief

Baseball's Texas Rangers are saying they won't be re-negotiating the contract of staff ace Kenny Rogers, on the unusual ground that "on all of their contracts -- good or bad -- the Rangers stick to the deal they made."

Wal-Mart stores says it will close the Canadian store that is about to become the chain's first union shop.

Russia's Gorbunov Aviation signs a ten-plane deal with a Moscow finance lessor, a positive move for the government-owned industry.

Not surprisingly, a Seattle shipyard wins the $223 million contract to build four new automobile ferries for the state of Washington; it is the only one of five competitors found capable of performing.

Under pressure, the Alabama welfare department says that when its current contract runs out in 2007 it will stop using a call center in India to handle calls from food stamp recipients, but warns that taxpayers will have to pay more.

An energy services company wins a $175 million jury verdict for breach of a license agreement.

February 12, 2005 in In the News | Permalink | Comments (0) | TrackBack (0)

Professor Spotlight: Omri ben Shahar

Omri1 Omri Ben-Shahar joined the University of Michigan Law School in 1998, after teaching for three years at Tel-Aviv University.  He had also served as a research fellow at the Israel Democracy Institute and a panel member of Israel's Antitrust Court, and clerked at the Supreme Court of Israel.

He spent five years in the early 90’s at Harvard University, where he earned a SJD and a Ph.D in economics.  At Michigan, he teaches Contracts and Law-and-Economics, and he founded the Olin Center for Law and Economics.  He is a regular participant in the annual meetings of the American Law and Economics Association.  This year he has joined the AALS Contract Section Executive Committee as an at-large member.

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February 12, 2005 in Contract Profs | Permalink | Comments (0) | TrackBack (0)

Today in history--February 12

1719: One of the world's oldest insurance companies, the Onderlinge van 1719, is founded at Haarlem, Netherlands.

1733: The first settlers from the H.M.S. Anne go ashore to found the 13th of the original American colonies, which they name for King George II.

1809: Abraham Lincoln and Charles Darwin are born on opposite sides of the Atlantic and at opposite ends of the social spectrum.

1825: The Creek Indians cede the last of their ancestral lands in Georgia to the U.S. government and begin their trek west.

1870: The Utah Territory grants women the right to vote.

1879: The first artificial ice rink in the U.S. opens at Madison Square Garden in New York.

1946: The United Kingdom scuttles the last of 121 captured German U-boats.  When it later discovers that the U-boats contain a great deal of valuable stuff, it has to pay someone to bring them back up again.

1973: The vanguard of a revolution that never arrives, Ohio becomes the first state to put road signs in kilometers on its highways.

2004: Mattel Toys announces that after 43 years of dating, Barbie and Ken have decided to split, saying that they need to "spend some quality time apart."

February 12, 2005 in Today in History | Permalink | Comments (0) | TrackBack (0)

Cases--Limitations--UCC 2-725 trumps sovereign immunity

The statute of limitations in U.C.C. § 2-725 trumps state common law and statutory sovereign immunity, according to the Texas Court of Appeals.

In the case, a local hospital district, conceded to be a government entity, used GE equipment in a new electrical system it had installed.  It claimed that the equipment was defective, but it waited five years after the goods were delivered to bring the action.  GE moved to dismiss for failure to comply with the statute of limitations.

A government instrumentality is a “person,” said the court, and a “person” who engages in a transaction is a “party” under  § 1-201(b).  Under § 2-725, a “party” must bring the action within four years.  That means the hospital is covered.  Texas has a general statute that provides that state entities are not bound by various statutes of limitations, but the one in § 2-725 isn’t specifically listed.  The action was therefore barred.

Tarrant County Hospital District v. GE Automation Services, 2005 Tex. App. LEXIS 699 (Jan. 27, 2005)

February 12, 2005 in Recent Cases | Permalink | Comments (1) | TrackBack (0)

Friday, February 11, 2005

News in brief

A New York Times story says that baseball's Yankees knew about slugger Jason Giambi's steroid use, and carefully eliminated all references to the performance enhancing substances in his $120 million contract.

Some actors are campaigning against the proposed new SAG/AFTRA contract with film and television producers, arguing that they ought to get a better deal.

Basketball's Toronto Raptors apparently will buy out the contract of "fading star" Alonzo Mourning, for somewhere around $10 million.

North Carolina's Goodrich Corp. wins a 20-year, $6 billion contract to supply parts to France's Airbus Industries.

Labor troubles at San Francisco hotels continue.

Scandal-plagued Chicago mayor Richard Daley issues an executive order saying that city contractors who contribute to his campaign war chest will forfeit their contracts, although he'll keep their contributions.

The Boston subway system signs a 15-year contract to provide wireless services at four of its busiest stations.

February 11, 2005 in In the News | Permalink | Comments (0) | TrackBack (0)

Cases—Damages—No consequentials on first film venture

A film producer whose first film saw its opening spoiled by his Internet service provider's erroneous blocking of his e-mail notices,  couldn't muster enough evidence to allow the grant of consequential damages, according to the U.S. Court of Appeals for the Second Circuit.

Independent producer Peter Hall had scheduled the premiere of his Delinquent ("Raw, restless, contemplative and haunting"—The Village Voice)  in New York City on September 12, 1997.  He had a personal account with an ISP, EarthLink.  He used that account to send out notices of the premiere, hoping to drum up business. EarthLink, thinking it was a spam e-mail, blocked his account.  It later determined, however, that he was in compliance with its rules and unblocked the account. Hall sued.

Applying California law, the court held that while damages for a new venture could be recovered if "their nature and occurrence can be shown by evidence of reasonable reliability," the producer, who had never made film before, could not show how much money it would have made if the ads for the new film had actually been delivered.

Hall v. EarthLink Network, Inc., 2005 U.S. App. LEXIS 1230 (2d Cir. Jan. 25, 2005).

February 11, 2005 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Soccer and incomplete contracts

The problem of incomplete contracts is a hot one in the contracts field. A new paper from the National Bureau of Economic Research takes a look at the issues by examining the contracts of Spanish soccer players.  We haven't read it yet, and we're not exactly sure what it's about, but here's the abstract:

The theory of incomplete contracting is rival to that of complete contracting as a frame of reference to understand contractual relationships. Both approaches rest upon diametrically opposed postulates and lead to very different policy conclusions. From a theoretical viewpoint, scrutiny of the postulates has revealed that both frameworks are reasonable. This paper designs and implements an empirical test to discern whether contracts are complete or incomplete. We analyze a problem where the parties' inability to commit not to renegotiate inefficiencies is sufficient for contractual incompleteness. We study optimal contracts with and without commitment and derive an exclusion restriction that is useful to identify the relevant commitment scenario. The empirical analysis takes advantage of a data set from Spanish soccer player contracts. Our test rejects the commitment hypothesis, which entails the acceptance of the existence of contractual incompleteness in the data. We argue that our conclusions should hold a fortiori in many other economic environments.

February 11, 2005 in Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Law & econ call for papers

The Supreme Court Economic Review, an "interdisciplinary journal that seeks to provide a forum for scholarship in law and economics, public choice and constitutional political economy" is looking for papers.  If you’re the sort of person who actually knows what "constitutional political economy" is, this may be something you’re interested in. Click the link for the call for papers.

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February 11, 2005 in Meetings | Permalink | Comments (0) | TrackBack (0)

Coaching deals taking longer

Contract negotiations for successful university athletic coaches are getting more complicated every year. Auburn University, for example, has four of its top coaches unsigned, and negotiations are continuing.  The most prominent of them is football coach Tommy ("13-0") Tuberville, who has agreed "in principle" to seven years at $2 million a year, but the devils are in the details.

"It's a litigious society that we live in," says the school’s athletic director. "It's always this, that and the other. If you're going to have something for three, four, five years, you want to be able to live with it."

February 11, 2005 in In the News | Permalink | Comments (0) | TrackBack (0)

Today in history—February 11

1650: The father of modern philosophy, René Descartes, dies at age 53.

1808: A Pennsylvania judge named Jesse Fell experiments with burning coal in his fireplace.  Turns out, it works, and the Pennsylvania coal industry is born.

1809: Robert Fulton receives a patent for the steamboat.

1812: Massachusetts Governor Elbridge Gerry announces a new redistricting plan for the state, which seems suspiciously designed to enhance the electoral chances of Jeffersonian candidates.  One district looks like a salamander, or "gerrymander."

1826: University College London, the third or fourth university in the U.K. (Durham argues about the sequence) is founded.

1847: Industrialist Thomas Alva Edison, founder of several companies including General Electric, is born in Milan, Ohio.

1928: Cousins Ed Shoemaker and Edward Knabusch invent the La-Z-Boy recliner chair.

1941: Bandleader Glenn Miller receives the first "gold record" ever awarded, for his Chattanooga Choo-Choo.

1966: Willie Mays of the San Francisco Giants becomes baseball’s highest-paid player, at $130,000 a year.

1994: The Monsanto Co. begins sales of the first genetically engineered growth hormone for cattle, called "Posilac."

1999: Pluto passes Neptune to become the farthest planet from the sun; Neptune had been farther since 1979.

February 11, 2005 in Today in History | Permalink | Comments (0) | TrackBack (0)

Getting what you pay for

Are Super Bowl commercials worth $2.8 million for 30 seconds?  A new look by the good folks at the Wharton School says "maybe."

February 11, 2005 in Commentary | Permalink | Comments (0) | TrackBack (0)

Thursday, February 10, 2005

Houston is not a bad place to spend the winter

Houston's South Texas College of Law is looking for candidates for its new Fred Parks Distinguished Visiting Chair in Law.  There's no subject matter restriction, but the school wants a "distinguished scholar with a sincere interest in teaching and mentoring younger faculty."

Interested parties, or those who have folks to suggest, should contact the search committee chair, Cherie Taylor, or Dean James Alfini

February 10, 2005 in Contract Profs | Permalink | Comments (0) | TrackBack (0)

Stanley Cup trust question aired

Via our colleagues over at Wills, Trusts & Estates Prof Blog, here’s a link to an opinion letter raising a neat little interpretation question.  It's one involving trusts, not contracts, but among the questions is whether the NHL is the "world’s leading hockey league" this year if it isn’t playing because of a lockout.  If it's not, then other Canadian hockey teams may have a right to challenge for the prestigious cup.

February 10, 2005 in In the News | Permalink | Comments (0) | TrackBack (0)

Cases—Interpetation—Wrestler sues over change in script

A professional wrestler who claims that a wrestling promoter improperly changed the scripted outcome of a match can go forward on his breach of contract claims, says the Georgia Court of Appeals.

Wrestler Terry Bollea, a/k/a "Hulk Hogan" and "Hollywood Hogan," had a deal with Universal Wrestling Corp. (formerly World Championship Wrestling), for a pay-per-view program called "Bash at the Beach."  Under the contract, the script called for Hogan to wrestle "champion" Jeff Jarrett.  Hogan says that UWC changed the script by having Jarrett lie down and forfeit the match.  This and other things, said Hogan, violated a clause in his contract that provided that Hogan "shall have approval over the outcome of all wrestling matches in which he appears, wrestles and performs, such approval not to be unreasonably withheld."

UWC argued that "outcome" meant whether Hogan won or lost; Hogan argued that it meant the "outcome" of the "story line"—the total result that would affect his character. The court found that summary judgment was properly denied since a jury trial would be required to sort out such questions.

Bollea v. World Championship Wrestling, Inc., 2005 Ga. App. LEXIS 33 (Jan. 21, 2005).

February 10, 2005 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Trailer residents sue for power outage

The city of Hampton, Georgia, is locked in a dispute a local trailer park, many of whom have been without city-provided electricity since August.  The city cut the power to the Clover Ranch Manufactured Home Community, claiming that the community’s wiring was inadequate.  Residents are claiming breach of contract.  The park’s owners have sued, claiming that vacant units can’t be leased because there’s no power.  The park has been open since 1970.

February 10, 2005 in In the News | Permalink | Comments (0) | TrackBack (0)

Man bites dog

In case you missed it, some of the nation's elite law reviews (Columbia, Cornell, Duke, Georgetown, Harvard, Michigan, Stanford, Texas, Penn, Virginia, Yale), are taking a stand for shorter articles.  Under the joint agreement, each review is going to develop its own standards.

The Harvard Law Review is out of the gate with its new rules, under which it will give preference to articles of less than 25,000 words and will not print articles over 50,000 words without good reason.  Click on the link for the Review's letter outlining the new policy.

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February 10, 2005 in In the News | Permalink | Comments (0) | TrackBack (0)

News in brief

Two big law firms will get even bigger, as San Fran’s Pillsbury Winthrop and D.C.’s Shaw Pittman agree to a merger.

Singer Britney Spears sue her insurance carriers for nearly $10 million, after they refuse to pay on a policy covering a canceled tour.

The New York Transit Authority issues a $143 million contract to Unisys Corp. for "desktop support services."

The Peruvian government cancels a water-services privatization contract with the French firm Suez Lyonnaise des Eaux.

Roads will stay open in Ohio, as unionized turnpike toll collectors and maintenance workers agree to a new contract.

The Association of Trial Lawyers of America, hoping to "reach out" to GOP senators pushing tort reform, hires a new chief executive—from Howard Dean’s presidential campaign.

A grand jury decides not to indict a man prosecuted for telling really lame lawyer jokes at a Long Island courthouse.

An heir to the Morton Salt fortune and the Gibson Dunn law firm have been hit with a $23 million judgment for a baseless lawsuit against an art expert.

February 10, 2005 in In the News | Permalink | Comments (0) | TrackBack (0)

Save big bucks, register today

Today is the last day to get the Early Bird Registration Discount for the ABA Section of Business Law’s Spring Meeting in Nashville. The meeting is scheduled for March 31-April 3, and you get $50 off if you register by today. The meeting brochure is here and you can register online here.

February 10, 2005 in Meetings | Permalink | Comments (0) | TrackBack (0)

Today in history—February 10

1258: The Mongols burn Baghdad to the ground.

1808: Civil engineer John Edgar Thomson is born in Springfield, Pennsylvania. As president of the Pennsylvania Railroad, will take it from 246 miles of track to 6,000 miles of track by 1874.

1897: The New York Times adopts the slogan, "All the news that’s fit to print."

1933: The Postal Telegraph Company of New York introduces the singing telegram.

1956: Elvis Presley records Heartbreak Hotel for RCA Records.

1957: The styrofoam cooler is invented.

1961: The Los Angeles franchise in the new American Football League moves to San Diego. The team is called "Chargers" in part because owner Barron Hilton had recently launched his new "Carte Blanche" credit card.

1967: The 25th amendment to the U.S. Constitution is ratified. It’s the one about what happens when the president becomes incompetent.

February 10, 2005 in Today in History | Permalink | Comments (0) | TrackBack (0)

Wednesday, February 9, 2005

News in brief

The most powerful woman in American business, CEO Carly Fiorina of Hewlett-Packard, has stepped down, reportedly forced out by the board.

New Delhi's Multi Commodity Exchange has started trading in India's first-ever crude oil futures contract.  Meanwhile, the Chicago Board of Trade is getting ready to offer the first futures contract for ethanol.

Chicago aldermen are calling for an investigation after repeated scandals involving award city contracts have rocked city hall.

Sikorsky Aircraft Co. says that it will not protest the Navy's award of a $1.8 billion helicopter contract to a competitor.

Unions at the University of Maine say that the system's chancellor has "poisoned labor relations" by his comments to a newspaper.

Workers at Imperial Sugar have ratified a new three year contract; details aren't released but both sides say they're pleased.

The Los Angeles Philharmonic has reached agreement with conductor Esa-Pekka Salonen on a new contract through 2008, with additional option years thereafter; terms are not disclosed.

A U.S. company receives a $15 million contract from the Israeli government to help bring U.S.-style welfare reform to Israel.

February 9, 2005 in In the News | Permalink | Comments (0) | TrackBack (0)