ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Friday, April 7, 2006

Jessica Simpson Sued for Breach of Contract

The Smoking Gun reports:

Jessica Simpson cut a multimillion dollar licensing deal for low-priced jeans and apparel and then failed to promote them as promised, according to a $100 million breach of contract lawsuit filed yesterday against the singer/actress. The Tarrant Apparel Group alleges that Simpson, 25, failed to support the clothing lines and even refused to be photographed wearing items from the JS by Jessica Simpson and Princy collections. In its New York State Supreme Court complaint, an excerpt of which you'll find below, Tarrant contends that a three-year deal inked in December 2004 requires Simpson to be "actively involved" in promoting the clothing and that she should wear the garments at "public events, shows, and appearances" whenever "reasonably practicable." Simpson, the firm charges, "simply failed to provide the promised support." The complaint also notes that when Simpson was asked by the press last year to name her favorite brand of jeans, "instead of responding 'Princy,' she said 'True Religion.'"

[Miriam Cherry / Hat-tip: Ernest Baello]

April 7, 2006 in Celebrity Contracts | Permalink | TrackBack (0)

Arbitration Clauses in Employment Contracts

Richard_bales_1 No issues of contract law seem hotter today than those that swirl around arbitration clauses.  They have been particularly troublesome in employment situations, where employees may be required to arbitrate not only the terms of their employment, but even claims for statutory violations.

In a new paper, Contract Formation Issues in Employment Arbitration, forthcoming in the Brandeis Law Journal, Richard Bales (Northern Kentucky) takes a comprehensive look at the issues.  Here's the abstract:

American courts operate under the strong presumptions that the Federal Arbitration Act makes nearly all claims arbitrable and nearly all arbitration agreements enforceable.  However, the FAA Section 2 provides that arbitration agreements shall be valid, irrevocable, and enforceable, save upon such grounds that exist at law or in equity for the revocation of any contract.  This apparent reservation of a broad role for state contract law is undercut significantly by two Supreme Court doctrines: the FAA preemption doctrine (which forbids state courts and legislatures from singling out arbitration agreements for inferior treatment) and the separability doctrine (which requires that contract-law challenges directed at the contract as a whole -- as opposed to at the arbitration clause specifically -- be decided by arbitrators rather than courts).  The Court has interpreted both of these doctrines broadly.  Though the broad interpretation of these doctrines has been extensively criticized, the effect nonetheless has been to constrict the applicability of state contract law to arbitration agreements.  This, in turn, has created considerable tension between those doctrines and the Section 2 reservation of state contract law.

This article discusses and evaluates several potential limitations on the preemption and separability doctrines, particularly as applied to employment arbitration agreements, which ould preserve a broader role for state contract law.  The Supreme Court's FAA preemption and separability doctrines frame the big picture of the scope of state authority regarding arbitral contract formation.  After discussing and evaluating these doctrines, this article shifts focus and examines in detail how state courts have applied state contract law to employment arbitration agreements.  State contract law, of course, differs considerably from state to state.  This article does not examine in detail this state-to-state variation generally (e.g., on different approaches to mutuality), but instead focuses specifically on how this variation affects judicial approaches to employment arbitration agreements.  This article examines five issues that often are raised in contract-formation challenges to the enforceability of employment arbitration agreements: notice, consent, the employer's retention of a right unilaterally to modify the agreement, non-reciprocal obligations to arbitrate, and consideration.

[Frank Snyder]

April 7, 2006 in Recent Scholarship | Permalink | TrackBack (0)

Mitchell Review Looks at Minnesota Cases

Aab_26 The William Mitchell Law Review is hosting a symposium on April 20, called 8 Cases You Need to Know, in which speakers will examine eight prominent recent cases from the Minnesota appellate courts.  One of them is a contract case.  It’s Yang v. Voyagaire Houseboats, Inc., 701 N.W.2d 783 (Minn. 2004), holding that a houseboat lessor was not a provider of “recreational equipment” but rather an “innkeeper,” and thus that an exculpatory clause in a houseboat lease was void as against public policy.

[Frank Snyder]

April 7, 2006 in Recent Cases | Permalink | TrackBack (0)

States Must Arbitrate Tobacco Claims

An arbitration clause is, apparently, an arbitration clause -- even when it's in a settlement agreement between sovereign states and giant industries.  So the New York Appellate Division has thrown out a lawsuit by the state of New York arising out of the $206 billion tobacco settlement.  An arbitral panel ruled that the states, which together get about $6.2 billion a year from the settlement, may see a $1.1 billion reduction based on an alleged failure to enforce some aspects of the settlement.  New York had claimed a right to litigated the issue in court.  Whether the payments will be reduced still has not been decided.

[Frank Snyder]

April 7, 2006 in In the News | Permalink | TrackBack (0)

Today in History: Lonergan Writes a Letter

Aab_15 On this date, April 7, 1954, Joseph A. Lonergan of New York wrote to Albert Scolnick regarding 40 acres of land near Joshua Tree, California.  It was only one step in a longer correspondence that would eventually raise the issue whether describing land and stating that your "rock-bottom" price for selling it is $2,500 amounts to an offer to sell.  The case, in several casebooks, is Lonergan v. Scolnick.

[Frank Snyder]

April 7, 2006 in Famous Cases, Today in History | Permalink | TrackBack (0)

Thursday, April 6, 2006

Bix on Contract Theory

Brian_bix They're the age-old questions, which we never seem to tire of discussing:  Is there such a thing as contract theory?  If so, what is it supposed to do?  Does it have any value beyond making tenure notebooks a little (or a lot) thicker?

The debate often tends to be between those who start with theory and then conclude that certain existing doctrines (which fall outside the theory) are wrong, and those who start with doctrine and then conclude that theories (which don't explain it) are wrong.

The latest to weigh in on the topic is Brian Bix (Minnesota), who is working on a forthcoming book called Contract Law, the first part of which, available now as a working paper called Contract Law Theory, takes a stab at assessing the role of theory in contract law.  Here's the abstract:

This working paper is an early draft of two chapters (and the Preface and Bibliography) from a larger work on Contract Law (for the series, Cambridge Introductions to Philosophy and Law).  The working paper covers the theory-focused part of the project. The paper analyzes what it means to have a theory of Contract, and what the criteria should be for evaluating such theories. The paper concludes that general or universal theories of Contract Law -- at least those that have been presented to date (including economic theories of contract law, and deontological theories focusing on promising or autonomy) -- cannot be justified, and we must seek instead to construct a theory that focuses on a particular legal system (or small group of legal systems), and that emphasizes the variety of principles and approaches within Contract Law, rather than seeking to find or impose a unity that does not exist.

In the course of the argument, the paper also touches on the role of history in explaining legal doctrine, voluntariness in contract formation, the moral obligation to keep contracts, and the relationship between rights and remedies.

[Frank Snyder]

April 6, 2006 in Recent Scholarship | Permalink | TrackBack (0)

Today in History: Minneapolis Surplus Runs an Ad

Exactly fifty years ago, on Friday, April 6, 1956, the Great Minneapolis Surplus Store runs a newspaper ad for its sale the following day, Saturday. 

  Saturday 9 A.M. Sharp 3 Brand New Fur Coats Worth to $100.00
                       First Come First Served $1 Each

One week later, on Friday the 13th, the company will run a second ad,

      Saturday 9 A.M. 2 Brand New Pastel Mink 3-Skin Scarfs
                                  Selling for.$89.50
                    Out they go Saturday. Each ... $1.00
         1 Black Lapin Stole Beautiful, worth $139.50 ... $1.00
                             First Come First Served

When the store refuses to sell the goods to Morris Lefkowitz, on the grounds that only women customers could by, he'll sue, leading to Lefkowitz v. Great Minneapolis Surplus Store, Inc., the classic case of advertisement-as-offer.

[Frank Snyder]

April 6, 2006 in Famous Cases, Today in History | Permalink | TrackBack (0)

Statute of Frauds Erases $1 Million Promise

Kentucky_flag_1 An oral promise to pay a paralegal more than $1 million over ten years as a reward for landing a big plaintiffs' case has been washed out on Statute of Frauds grounds, even though the promise was caught on tape and played at trial, and even though the paralegal apparently performed.  That's the result of a fascinating recent decision by a trial judge in the Bluegrass State.  The Kentucky Law Blog has this summary of the case.  Sounds like the plaintiff will appeal.

[Frank Snyder -- hat tip to Andrew Oh-Willeke]

April 6, 2006 in Commentary, Recent Cases | Permalink | TrackBack (0)

History for the Young

Are you a junior scholar who's not presented more than two papers at a national conference?  Are you interested in legal history?  Are you free in mid-November?

If the answer to all three of these questions is "yes," you'll be interested in the American Society for Legal History's Kathryn T. Preyer Scholars program.  Here's the deal:

The Kathryn T. Preyer Memorial Committee of the ASLH invites submissions for the Kathryn T. Preyer Scholars Competition.  The competition is named in honor of the late Kitty Preyer, a distinguished historian of early America and beloved member of the Society.  The two winners of the competition will be named Kathryn T. Preyer scholars.  Each will present the paper that he or she submitted to the competition at the Society's annual meeting in Baltimore on November 16-19, 2006.  Kathryn T. Preyer Scholars will receive a $250 cash award and reimbursement of expenses of up to $750 for travel, hotel and meals.

Submissions are welcome on any legal, institutional and/or constitutional aspect of American history.  Graduate students, law students, and other early-career scholars who have presented no more than two papers at a national conference are eligible to apply. Papers already submitted to the ASLH Program Committee, whether or not accepted for an existing panel, and papers never submitted are all equally eligible for the competition.

Submissions should include a curriculum vitae of the author, contact information, and a complete draft of the paper to be presented.  The draft may be longer than could be presented in the time available at the meeting (twenty minutes) and should contain supporting documentation, but one of the criteria for selection will be the suitability of the paper for reduction to a twenty-minute oral presentation.

The deadline for submission is June 15, 2006.  The Preyer Scholars will be named by August 1.  Electronic submissions (preferably in Word) are strongly encouraged and should be sent to the members of the Preyer Committee: Lyndsay Campbell, Christine Desan, Sarah Barringer Gordon, Maeva Marcus, and Laura Kalman, Chair.

[Frank Snyder

April 6, 2006 in Miscellaneous | Permalink | TrackBack (0)

It's an Ill Wind . . .

. . . that blows no one good.  Take Hurricane Rita, for example.  It was a disaster for most, but not for lawyers in Beaumont, Texas, who say plaintiffs have filed four times as many insurance suits this year than last in storm-ravaged Jefferson County..

[Frank Snyder]

April 6, 2006 | Permalink | TrackBack (0)

Wednesday, April 5, 2006

ContractsProf Notches 200,000th Visitor











Thanks to all those who have made us the incredible, unbelieveable success story that we are, especially all you Little People out there, especially you, Mom, for signing on 400 times every day.  Who said retirement would be dull?

[Frank Snyder]

April 5, 2006 in About this Blog | Permalink | TrackBack (0)

Tickling in Lieu of Rent: Enforceable Deal?

The Associated Press is reporting on yet another interesting phenomenon that has cropped up since the advent of the internet: the online classified ad that offers a room in exchange for sex.   In cities throughout the U.S., Craigslist housing ads offer, for example, a room in exchange for ''sex and light office duty"; a one-bedroom pool house free ''to a girl that is skilled and willing"; a $700-a-month room at a discount to a fit female willing to provide sex.  Sounds like prostitution, right?  The article explains why the cops "aren't kicking down doors":

Paul J. Browne, a deputy police commissioner in New York, said investigators have found that the Craigslist ads are frequently ''little more than a form of voyeurism that didn't result in an actual exchange of sex for rent."

And, there are, after all, ads that are less overtly sexual: ''I usually rent the room for 600, but if you are really ticklish and willing to trade being tickled for the extra rent then we have a deal." 

But, do these ads lead to enforceable deals?  The overtly sexual arrangements, at least in the states where prostitution is illegal, are very likely void as against public policy.  But what about the less sexually overt arrangements?  What if the lessee doesn't allow the lessor to do the promised tickling?  Does the lessor have a valid contract claim to the "extra rent"?  I am sure stranger claims have been brought in housing or small claims court . . .

[Meredith R. Miller]

April 5, 2006 in In the News | Permalink | TrackBack (0)

Penalties and Financial Contracts

Aab_24 An interesting paper that we're noting a little belatedly:  Penalties and Optimality in Financial Contracts: Taking Stock, by Michael A. Robe (American University-Business), Eva-Maria Steiger (Humboldt University-Berlin, left). and Pierre-Armand Michel (University of Liege-Management).  Here's the abstract:

A popular view of limited liability in financial contracting is that it is the result of societal preferences against excessive penalties. The view of most financial economists is instead that limited liability emerged as an optimal institution when, in the absence of a clear limit on economic agents' liability, the development of some economic activities might have been thwarted.  Viewing the institution from the perspective of optimal legal system design allows us to better understand the current debate on it.

We present a broad history of penalties in financial contracts to highlight the interactions between technology, legal environments, purpose of the financial relationship, and contractual provisions. We show that harsh monetary and non-pecuniary penalties are not mere relics from a bygone era and, at the same time, that limited liability is far from a recent institution. We then discuss trade-offs associated with legal mandates of either unlimited or limited liability, both for the contracting parties and for the rest of Society.

We identify two broad patterns. First, the toughness of liability rules and bankruptcy laws decreases as exogenous sources of uncertainty become relatively more important, and increases with the opportunity for moral hazard (related to diligence, risk taking, or deception). Second, bankruptcy laws become more lenient as the scope for labor specialization and the returns to human capital or entrepreneurship increase.

[Frank Snyder]

April 5, 2006 in Recent Scholarship | Permalink | TrackBack (0)

Santana Sued by Ex-Assistant

You can send your employees out for sensitivity training, for urine testing, or to learn Microsoft Office.  But can you send them out to have their "closeness to God" calibrated by a chiropractor named "Dr. Dan"?

Musician Carlos Santana and his wife Deborah will apparently learn the answer to that when a decision is rendered in a lawsuit brought against them by a 59-year-old former personal assistant who had worked for them since 1988.  Dr. Dan allegedly told Bruce Kuhlman that he had a a "low enlightenment/consciousness level" which wasn't unusual for folks his age, and "promised it could be raised."  Apparently it couldn't, and Kuhlman sued.

[Frank Snyder]

April 5, 2006 in In the News | Permalink | TrackBack (0)

Less Tenure?

The gulf between tenure-track and non-tenure-track teachers at U.S. law schools may widen, if law school deans get their way.  According to the National Law Journal, the American Law Deans Association is petitioning the U.S. Department of Education to remove the ABA's role in setting tenure standards.  The ABA has been pushing tenure for such folks as clinicians, librarians, and even (gasp!) legal writing instructors.

Enough is enough, say the deans -- the law schools themselves ought to be able to determine the tenure status of such low-lifes without interference from a bunch of lawyers who couldn't tell Important Cutting-Edge Scholarship from second base.  What do they think we are -- teaching institutions?

[Frank Snyder]

April 5, 2006 in Law Schools | Permalink | TrackBack (0)

Today in History: Happy Birthday, Seth

Aab_18 On this date, April 5, 1758, Seth Wyman is born to Ross and Dinah Wyman at the farming community of Shrewsbury, Massachusetts.  Capt. Ross Wyman will be one of the Minute Men of Shrewsbury, and will command an artillery detachment company on the march against the British at Lexington, April 19, 1775 (left).

Seth will later marry Mary Brown in 1782, and their son Levi will eventually run away to sea.  An exaggerated report of Levi's subsequent alleged death in Hartford will lead to his father's historical fame as the defendant in Mills v. Wyman.

[Frank Snyder]

April 5, 2006 in Famous Cases, Today in History | Permalink | TrackBack (0)

Tuesday, April 4, 2006

Breach of Contract Leads to Elephant Stampede

800pxbaby_elephants3After a contractor abandoned a project in Malawi to erect a 20-kilometer fence near Kasunga National Park, elephants wreaked havoc on crops in the surrounding area.  Apparently, the contractor left the job at Christmas time with only 13 kilometers of fence built, and that fence was not electrified.  The contractor never returned to complete the job.  The rain season came and the elephants trampled over the existing portion of the fence, destroying crops in communities near the protected area. 

[Meredith R. Miller]

April 4, 2006 in In the News | Permalink | TrackBack (1)

Funeral Home Breached by Sending Corpse to Landfill

Aab_14 The family of a man whose body was accidentally sent to a landfill by a Michigan funeral home is suing for $1 million, claiming breach of contract and infliction of emotional distress.

When 66-year-old Erwin Jordan died, his body was taken to the Notier-VerLee-Langeland Funeral Home in Holland (left) while the family was deciding on burial or cremation.  As was its winter custom, the funeral home stored the body in a box in its unheated garage.  When the company's trash hauler arrived, the driver apparently assume the box was trash and took it to the Zeeland Township landfill.  A search for the body at the landfill has been unavailing.

The family is also suing the trash hauler, Priority Arrowaste, for negligence.  (Photo: NVLL Funeral Home Web Site.)

[Frank Snyder]

April 4, 2006 in In the News | Permalink | TrackBack (0)

Department of Contracts Musicology: Excuses

Aaa_7 Having mentioned Harry Flechtner's The CISG Song yesterday, we thought we'd mention an oldie but goodie: the C&W classic Excuses, by Chapman's Tom Bell.  There's no recording available, but the refrain goes like this:

Mistake, frustration, impratiCAbility:
Thanks to these reasons, I am now are free.
Mistake, frustration, impratiCAbility!
The whole deal is OFF, between you and me.

[Frank Snyder]

April 4, 2006 in Miscellaneous | Permalink | TrackBack (0)

Quotes: Let's Hope This Isn't True

In sum, a more carefully and fully tested piece of legislation has never been presented in these United States.

Karl Llewellyn, on the proposed Uniform Commercial Code

April 4, 2006 in Quotes | Permalink | TrackBack (0)