ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Friday, April 21, 2006

Let’s Barter

This CBS News story truly captures the concept of efficient exchange.  Kyle MacDonald decided to start with a paper clip, in the hopes that he could eventually trade his way up to his ultimate goal – owning a house: 

He advertised it in the barter section of, the Web site teeming with city-specific listings for everything from job openings to apartment rentals. At first, MacDonald said merely that he wanted something bigger or better for his red paper clip. No mention of a house — he feared seeming flaky.

While he was visiting his hometown of Vancouver, BC, two women gave him a fish-shaped pen for the paper clip.

Later that day, MacDonald headed to Seattle to catch a ballgame and a flight home. Before the airport, though, he stopped to see Annie Robbins, an artist who had just stumbled upon the Craigslist barter section. She admired its anticonsumerist vibe, she said, so she answered MacDonald's posting “on a lark.”

MacDonald left her home the proud owner of a small ceramic doorknob with a smiley face, made by the son of an artist Robbins knows.

Next up was Shawn Sparks, who was packing up to move from Amherst, Mass., to Alexandria, Va. Sparks, 35, is a huge fan of Craigslist barters, having acquired his 1993 Chevy Blazer in a trade for a used laptop.

Sparks offered MacDonald a Coleman camping stove. Sparks had two, and didn't want to lug both on his move. And he needed a new knob for his espresso machine.

Done. The men celebrated with a barbecue at Sparks' house.

After the stove, things began to snowball: MacDonald traded for a generator, then a party and a trip, a van, a performance by a rock band, and eventually into a year’s free rent.  Along the way, the quest has garnered publicity (which, in my estimation, probably facilitated some of the trades). 

Hat-tip: Daniel Tannenbaum

[Miriam A. Cherry]

April 21, 2006 | Permalink | TrackBack (0)

Davis Honored at WFU

Aaa_26 Wake Forest contracts prof Tim Davis has been selected by the law school's third-year class to win its Excellence in Teaching Award this year.  Davis, who joined the Wake faculty in 1998, won two prior teaching awards during a nine-year stint at SMU.  He's the author or editor of four books on sports law and on and race, including The Business of Sports Agents (University of Pennsylvania Press 2003) (with Shropshire).

[Frank Snyder]

April 21, 2006 in Contract Profs | Permalink | TrackBack (0)

Thursday, April 20, 2006

Texas Bar to Honor Hadley Issue

Hadley_issue_1 The Texas Bar Foundation will award its Law Review Article of the Year award to the Texas Wesleyan Law Review for its Symposium issue, on Hadley v. Baxendale  The issue features a range of contract-related scholarship from some 25 international scholars.  It's an unusual move for the Foundation, which usually singles out a single piece for the honor.

The Law Review has some additional copies of the issue available.  If you teach law, you can get a free copy by e-mailing them or by writing to:   Texas Wesleyan Law Review 1515 Commerce Street Fort Worth, TX 76102.  You'll have to mention this Blog and your academic affiliation for a free copy.  You can also purchase copies at the ridiculously low regular price.

[Frank Snyder]

April 20, 2006 in Recent Scholarship | Permalink | TrackBack (0)

Contingent Contracts and Worker Happiness

Aaa_10 Is contractual job protection important to worker happiness?  Not as much as you'd think, according to Dutch economist Marloes de Graaf-Zul.  In The Anatomy of Job Satisfaction and the Role of Contingent Employment Contracts, she looks at the data and finds that the type of contract, whether fixed or contingent, plays a surprisingly small role in how happy workers are in their jobs.  Here's the abstract:

In this paper I analyze job satisfaction using fixed effect analysis and a multiple equation model.  Overall job satisfaction is analyzed as an aggregate of satisfaction with several job aspects. I find that overall job satisfaction is mainly determined by satisfaction with job content. All aspect satisfactions are subsequently explained from observed characteristics, with special focus on contingent employment contracts. Satisfaction with job security is the aspect satisfaction with the strongest relation to type of contract.  Since this is also the aspect that receives least weight in overall job satisfaction this has little impact on workers' total happiness. More influential is the low satisfaction with job content due to agency work. Overall, temporary agency work leads to the lowest job satisfaction. On-call work and fixed-term work arrangements do not differ from regular work in overall job satisfaction they provide, even though they do lead to higher or lower satisfaction with some aspects of the job.

[Frank Snyder]

April 20, 2006 in Recent Scholarship | Permalink | TrackBack (0)

Structured Settlements and Secured Transactions

Does the Uniform Commercial Code apply to structured settlements of tort cases?  No, you're likely to react, but it's a closer question than it seems.

Closer, but not close enough, according to a decision last year by the U.S. Court of Appeals for the Ninth Circuit.  The case, reported by Mike C. Buckley of Reed Smith’s Oakland office in Ninth Circuit Holds UCC Does Not Apply to Structured Settlement of Tort Claim, involved a consumer who assigned her tort settlement interest to a third party, gave it a security interest (properly filed), went bankrupt, and reneged on the deal.

[Frank Snyder]

April 20, 2006 in Commentary, Recent Cases | Permalink | TrackBack (0)

Happy Anniversary to the Big Kahuna

Aaa_25 We missed this one (since I was catching rays at the beach at the time) but belated congratulations to our colleage Paul Caron, the Grey Eminence of the Law Professors Blog Network, on the second anniversary of his marvelous TaxProf Blog.

Caron launched the project April 15, 2004, and has since had over 1.5 million visitors, or around 9,000 a day.  Who says tax is dull?

[Frank Snyder]

April 20, 2006 in About this Blog | Permalink | TrackBack (0)

Today in History: Crunden-Martin Asks for a Quote

Aab_23 Aab_22 On this date, April 20, 1895, the Crunden-Martin Wooden Ware Co. of St. Louis, Missouri (left), sends the following message to to the Fairmount Glass Works of Fairmount, Indiana:

Please advise us the lowest price you can make us on our order for ten car loads of Mason green jars, complete, with caps, packed one dozen in case, either delivered here, or f. o. b. cars your place, as you prefer. State terms and cash discount.
Very truly,
Crunden-Martin W. W. Co.

Fairmount's reply, couched as a price quote, will nevertheless be found by the Kentucky Court of Appeals (how did Kentucky get involved in this?) to be an offer.  The case of Crunden-Martin Wooden Ware Co. v. Fairmount Glass Works is a casebook staple.  The Crunden-Martin facility is a proposed National Historic Site -- you can see lots of pictures here.  The "F" in a hexagon (above, right) was the Fairmount trademark.  You can click on "continue reading" for the text of the decision.

[Frank Snyder]

Continue reading

April 20, 2006 in Famous Cases, Today in History | Permalink | TrackBack (0)

Wednesday, April 19, 2006

LOC Rules in China

China_flag_1 The People's Republic of China has new rules governing letters of credit this year.  Wen Qin of Beijing’s Union Law has a rundown of the new system in New Rules for Resolving Letters of Credit Disputes in China.

[Frank Snyder]

April 19, 2006 in Commentary | Permalink | TrackBack (0)

Teaching Consumer Law

Aaa_9 Interested in teaching consumer law?  Or at least raising more consumer law issues in your standard commercial courses?  If so, you'll want to think about attending the University of Houston Law Center conference, Teaching Consumer Law: The Past, Present, and Future of Consumer Law, which is slated for Friday and Saturday, May 19-20, 2006.  The presenters included a blend of academics and practicing attorneys, and should provide a lot of useful information.  Special added attraction at slight additional cost:  Texas Rangers v. Houston Astros at Enron Field Minute Maid Park.

[Frank Snyder]

April 19, 2006 in Conferences | Permalink | TrackBack (0)

Emory Launches Transactional Certificate

Aaa_24 The law school at Emory University is launching a new Transactional Law certificate program, designed to "give Emory Law students the opportunity to focus a part of their training on the representation of business and commercial clients."

The program will require a core of corporate and tax courses, supplemented by a range of business law electives and externships, and will incorporate practitioners in its simulation classes.

[Frank Snyder]

April 19, 2006 in Law Schools | Permalink | TrackBack (0)

Tuesday, April 18, 2006

Construction Liability Disclaimer Upheld

United_kingdom_flag_9 A recent British case involving a contractual warranty in a construction case presented a knotty question of interpretation.  In the case, Contractor had a contract with Developer, who in turn had a contract with Tenant.  The Contractor-Developer contract provided:

The Contractor shall owe no duties or have any liability under this deed which are greater or of longer duration in that which it owes to the Developer under the Building Contract.

Contractor’s work was apparently not very good, and Tenant had to do some remedial work.  Developer went bust and owed Contractor more than the amount of the remedial work.  Could Tenant recover from Contractor?

No, said the court.  The point of the clause was to limit Contractor’s liability to the amount of its obligations to the amount it was to get from Developer.  Since it had a set-off against Developer for all claims, it couldn’t be liable to Tenant.

Jeremy Glover of London’s Fenwick Elliott LLP runs down the facts in Will a Warranty Always Enable an Employer to Pursue a Claim Against the Contractor if the Developer Becomes Insolvent?

[Frank Snyder]

April 18, 2006 in Commentary, Recent Cases | Permalink | TrackBack (0)


Those interested in the role of contract law in private ordering -- whether for or against -- should consider submitting proposals for the Annual Program of the AALS Section on Contracts.  This year's topic, says Chair Jean Braucher (Arizona) is New Frontiers in Private Ordering.  Papers selected will be published in the Arizona Law Review.  Here's the Call for Papers:

The Section on Contracts of the Association of American Law Schools is seeking two presenters for its annual meeting program on the topic, New Frontiers in Private Ordering.  The program, to be held on January 5, 2007, in San Francisco, will explore ways in which contracts, real or metaphorical, are being used to deal with problems that public law might tackle but is not addressing very effectively.  A "new frontier" in private ordering can involve, among other possibilities, an unusual purpose of contracting or an unusual subject matter of the contract.  Both celebratory and critical perspectives are welcome.  Papers could do one or more of the following:  describe an interesting example, develop a theoretical perspective, and consider strengths and weaknesses of using private rather than public ordering to address a social problem.

Two presentations will be made by invited speakers, and two presentations will be by scholars selected through this call for papers.  The Arizona Law Review has agreed to publish these four papers and is interested in publishing several additional papers in the issue on this topic.  The AALS annual meeting program will only allow time for four presentations but additional papers to be published will be announced at the program and abstracts will be made available.

Aaa_22Aaa_23  One of the two invited papers is a co-authored spin-off from a book by Professors Ian Ayres (Yale) and Jennifer Brown (Quinnipiac, right), Straightforward:  How to Mobilize Heterosexual Support for Gay Rights (Princeton University Press 2005), which suggests ways for people to "contract" around homophobia by, for example, buying products with the "fair employment mark" indicating that the seller does not discriminate on the basis of sexual orientation.  The new paper will discuss how an employer who adopts the mark can restrict, better quantify, and better control litigation risk than under existing nondiscrimination policies. The other invited paper is by Professor Michele Goodwin (DePaul) and is a spin-off from her book Black Markets:  The Supply and Demand of Body Parts (Cambridge University Press 2006), which is on trade in human organs and raises race and class issues concerning this trade.  Her new paper will focus on the promise of negotiated sales of body parts as a means to better serve the interests of both sellers and buyers.  Drawing on the example of negotiation in the reproductive realm, the paper will develop the argument that selective private ordering in intimate spaces can better serve the poor and racial minorities than public ordering.

A selection committee, in consultation with the editors of the Arizona Law Review, will choose two additional papers for presentation.  The committee members are Professor Jean Braucher (Arizona), chair of the Section on Contracts, and Professors Martha Ertman (Utah) and Robert Hillman (Cornell), members of the section Executive Committee.  The deadline for submissions is Sept. 1, 2006, but the committee encourages earlier submissions and will read papers as they are submitted.  Please send an abstract and a draft paper as electronic attachments to Jean Braucher.  Questions also can be directed to that address.  Selections will be made before Oct. 1, 2006, in time for inclusion of the names of those selected in the AALS annual meeting program.  Panelists will be expected to circulate near-final draft papers among themselves by December 15.  The deadline for manuscripts will be March 15, 2007, with publication in the fall 2007 issue of the Arizona Law Review.  The length of pieces should be no more than 30 printed ages (40 to 45 double-spaced manuscript pages). Papers can be co-authored; if selected, co-authors will have to allot their program time among themselves.  AALS will not provide funds for speakers' travel expenses or meeting registration; annual meeting speakers typically obtain funding from their home institutions.

[Frank Snyder]

April 18, 2006 in Conferences | Permalink | TrackBack (0)

Weekly Top 10

Ssrn_logo_54 Few changes in this week's countdown, except that a second paper from Chase's Richard Bales makes the list.  Following are the top ten most-downloaded new articles from the SSRN Journal of Contract and Commercial Law for the sixty days ending April 16, 2006.

1 (1) Emerging Policy and Practice Issues (2005), Steven L. Schooner & Christopher R. Yukins (Geo. Washington).

2 (2) Contract Law Theory, Brian Bix (Minnesota).

3 (3) The Best Puffery Article Ever, David A. Hoffman (Temple).

4 (4) Reputations, Relationships and the Enforcement of Incomplete Contracts, W. Bentley MacLeod (Columbia-Economics).

5 (7) Contract Formation Issues in Employment Arbitration, Richard A. Bales (Northern Kentucky).

6 (5) Reading Wood v. Lucy, Lady Duff-Gordon with Help from the Kewpie Dolls, Victor P. Goldberg (Columbia).

7 (6) The Moral Impossibility of Contract, Peter A. Alces (Wm. & Mary).

8  (-) The Employment Due Process Protocol at Ten: Twenty Unresolved Issues, and a Focus on Conflicts of Interest, Richard A. Bales (Northern Kentucky)

9 (8) Modularity in Contracts: Boilerplate and Information Flow, Henry E. Smith (Yale).

10 (9) Creative Commons: A Skeptical View of a Worthy Pursuit, Niva Elkin-Koren (Haifa).

[Frank Snyder]

April 18, 2006 in Recent Scholarship | Permalink | TrackBack (0)

Participants in Clinical Drug Trial Sought Continued Treatment Based on Contract Theories

What if an individual who participates in a clinical trial of a drug wants to continue to receive that drug when the study is completed? Does the trial participant have a right to continued treatment based on theories of contractual obligation or promissory estoppel? Seems that the answer depends on whether, in addition to the clinicians, the drug company made any promises.

A group of individuals who suffer from Parkinson’s elected to participate in a clinical study of a drug to treat the disease. The company that developed the drug essentially commissioned the study, which was conducted by researchers at a university.  The drug company entered into a "Clinical Trial Agreement" with the university and researchers, which included a "Protocol" for the trial.  Among other things, the "Protocol" provided that the participants could elect to continue treatment up to 24 months after the study was completed.  The Protocol also allowed the drug company to terminate the study in specified circumstances. 

At some point during the clinical trial, the drug company terminated all clinical use of the drug, citing (1) a study that some trial participants developed neutralizing antibodies that caused irreversible damage to vital organs and (2) a long-term toxicology study of primates using the drug which found that the primates developed lesions on their brains. Some of the trial participants, however, believe that the drug is effective and that their physical, cognitive and emotional faculties have improved. These participants sought an injunction, requiring the drug company to continue to administer the drug to them. They sought the injunction, at least in part, based on breach of contract and promissory estoppel. The court did not issue the injunction and the Sixth Circuit held that the District Court did not abuse its discretion in denying the injunction.

The participants claimed that the drug company was contractually obligated to supply them with the drug. The court held that no contract ever existed between the participants and the drug company that required the company to continue to provide the drug. The participants primarily relied upon an "Informed Consent Document."  The participants had signed the consent form, but this document did not contain a drug company signature. The court held that this document, therefore, did not bind the drug company. The court also held that the Clinical Trial Agreement did not bind the drug company to continue to provide the drug to the participants because the participants were not signatories to that agreement -- rather, it was solely between the drug company, the researchers and the university.  Moreover, the court held that the researchers and university did not make promises to the participants on behalf of the drug company -- because the researchers were independent contractors and did not have apparent authority to bind the drug company.

The participants also claimed that the drug company was required to provide them with the drug based on promissory estoppel – that is, the researchers informed the participants that they would make decisions based upon the patients’ best interests and, if the drug proved to be safe and effective, the participants could continue to receive the drug beyond the trial period. Again, however, the court held that there was no evidence of a promise made by the drug company, and the promises of the university and researchers could not bind the drug company.

[Note: original post updated for clarification].

Abney v. Amgen, Inc., __ F.3d __ ( Mar. 29, 2006 6th Cir. 2006).

[Meredith R. Miller]

April 18, 2006 in Recent Cases | Permalink | TrackBack (0)

Monday, April 17, 2006

Did Prior Leave Prior to Completing Contract (?)

Mark Prior of the Cubs allegedly breached a contract to sign autographs at an art and home-décor store (he was paid $69,800 for his appearance).  The Chicago Tribune on-line (registration required) has the full story (quoted in part here):

Fans were disappointed, Prior acknowledged Monday while testifying in a breach-of-contract lawsuit filed by the store, but laid the blame on the event's lack of organization. He said he earned the $69,800 that he was paid. "I never behaved rudely in front of the fans," Prior said under cross-examination. "I tried to rectify a situation that, basically, was going south."

Testimony before Will County Circuit Judge Herman Haase showed Prior was paid $50,000 to sign 1,000 miniature porcelain replicas of Wrigley Field and $19,800 to sign 300 other pieces of memorabilia….

The store alleged Prior was rude and left after signing only 196 baseballs, pitching rubbers, bats, jerseys and the like, and 390 Wrigley replicas. The contract called for all 1,000 to be signed within 14 days of the event, the suit says.

Earlier in the trial, which will be continued until April 25 after more testimony Tuesday, a Just Ducky Too employee testified that Prior left with more than 30 people waiting for autographs.

Prior testified that an oral deal struck during the event allowed each photograph to be counted as an autograph. The agreement came after the first two dozen people in line met Prior and had their photo taken with him, the pitcher said.

But that was not how the event was supposed to work, he said. In addition, Just Ducky Too owners were asked to pull an Internet advertisement that stated each person who bought a signed stadium replica for $299 would get two "VIP tickets" to meet Prior. The ad was not pulled, he said.

"The way I read this was that there was going to be 2,000 people in front of me, versus signing 300 items—a big difference," Prior testified. "It wasn't what I agreed to do. ... It could get very lengthy."

Early in the event, a store employee "dragged" a young boy through the line, Prior said, and the boy appeared to be upset that he was told there would be no photograph with the player.

"The kid was lying there and crying and yelling," Prior said. "What I saw was kind of traumatic."

Prior said he stepped out from behind his table, signed a piece of memorabilia for the boy and allowed the two to be photographed together.

Then he excused himself and went outside, where he talked to his wife and then told the storeowners that the event was disorganized and unprofessional, he said.Prior denied using profanity, stating "absolutely not" when asked if he had done so.

Prior said when the line for autographs ended, he went to the rear of the store to sign more items and bring his total up to 300. He returned twice to the signing table after other customers showed up, before signing more items in back and leaving about 8:15 p.m., he said.

[Miriam A. Cherry]

April 17, 2006 in Celebrity Contracts | Permalink | TrackBack (0)

Winn on Adware Contracts

The Berkeley Technology Law Journal has published Jane K. Winn, Contracting Spyware by Contract, 20 Berkeley Tech. L.J. 1345 (2005), a follow-up to her presentation at the Boalt Spyware Conference in April 2005. 

Jane details the phenomenon that I’ve described as the “crisis of contract” online.  People may manifest assent to adware from a legal formalities perspective, but we don’t really believe that they manifested assent.  She thinks it would be a mistake to develop a one-off “solution” to the crisis of adware contracts (she analogizes such responses to the “dismal failure” of ad hoc solutions in the privacy context).  Instead, she favors an across-the-board change in American contract law to incorporate the principles of the EU’s Unfair Contract Terms Directive.

Unlike many other adware commentators, Jane carefully distinguishes between existing law (adware contracts usually enforceable) and her preferred policy result (adware contracts should usually be invalid as “unfair marketing”).  Thus, although she doesn’t like the existing contracting practices, she acknowledges that “in the absence of a conflict between contract terms and fundamental public policy of the forum, or evidence of misconduct so egregious that it might rise to the level of unconscionable, courts are likely to find that adware EULAs are enforceable contracts.” 

The abstract:

The question of what constitutes "spyware" is controversial because many programs that are adware in the eyes of their distributors may be perceived as spyware in the eyes of the end user. Many of these programs are loaded on the computers of end users after the end user has agreed to the terms of a license presented in a click-through interface. This paper analyzes whether it might be possible to reduce the volume of unwanted software loaded on end users' computers by applying contract law doctrine more strictly. Unwanted programs are often bundled with programs that the end user wants, but the disclosure that additional programs will be downloaded is usually buried deeply within dense form contracts. Even though this makes it difficult for end users to recognize that they are agreeing to have multiple programs installed at once and that some of those programs may be objectionable, US courts are unlikely to invalidate those disclosures. This is because in business to consumer online contracting cases in the US, courts have tended to be very deferential to the intentions of the merchants in designing the contract interfaces. In the EU, by contrast, such conduct by software distributors would not be binding on consumers. Under unfair contract terms laws in place in EU member states, consumer objections to bundled software could not be overridden by terms hidden in standard form contracts.

[Eric Goldman]

April 17, 2006 in E-commerce, Recent Scholarship | Permalink | TrackBack (0)