ContractsProf Blog

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

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Tuesday, April 25, 2006

Film Clips: Was it Worth It?

Ann Orkin:  Eight years I went to law school. Three times I took the
bar.  I finally get a a client and my client is a lunatic.

     From: The Gun in Betty Lou’s Handbag (1992)

April 25, 2006 in Film Clips | Permalink | TrackBack (0)

Consolidating the Boards of Contract Appeals

Aaa_29 New legislation will consolidate all of the federal government's various civilian Boards of Contract Appeals, the entities responsible for hearing and resolving disputes under federal contracts, into a single organization.  Last Friday the folks at George Washington's law school hosted a panel discussion (left), led by Stephen Schooner and Christopher Yukins, on what that's going to mean for those who practice before the Boards.  If you missed it, don't worry -- a podcast of the program is available.

[Frank Snyder]

April 25, 2006 in Government Contracting | Permalink | TrackBack (0)

"Guerilla Terms" and Standard Form Contracts

Peter_alces_2 "Guerrilla terms," says Peter Alces (Wm. & Mary), are terms that sophisticated parties sneak into standard form contracts contracts in a way that they are kept hidden from the other party.  These terms, he says, can be inefficient as well as unfair.  The paper is, appropriately enough, called Guerrilla Terms.  Here's the abstract:

Recent contributions to economic theory provide the means to reconcile deontological and consequentialist objectives in the case of standard form consumer contracts. An appreciation of the forces operating on those who draft form agreements demonstrates a type of market failure that calls for the balance struck by contract doctrine's inquiry into the basis of substantial rather than merely ostensible "agreement." That is, contract doctrine, through conceptions of "bargain" and "agreement" may police just those transactional contexts in which the apparent disjunction of efficiency and equity may be most pronounced.

This paper proceeds from four premises: (1) It is irrational to read standard forms, those used in common consumer transactions; (2) The terms form drafters include in those standard forms are functionally equivalent to "add on" product supplements (like the printer cartridge you need for your computer printer, or the telephone charges on your hotel bill); (3) "shrouding," effectively hiding the true and complete cost of a purchase, explains the inefficiency at equilibrium of what I refer to as "guerrilla terms," the terms hidden in the boilerplate because it is not in form drafters' interest to bring them to the attention of less sophisticated consumers; and (4) certainty and predictability in the contract law governing form agreements need only be realized in an actuarial and not in a per-transaction sense. The argument presented here supports each of those assertions and reconciles our attitude toward contract doctrine with the reality of standard form agreements.

My conclusions are reinforced by reference to the law and social psychology literature as it relates to contract. A conception of human agency in terms of situation, context, rather than disposition reveals the mechanism by which guerrilla terms accomplish unfair and inefficient results. "Dispositionism," the idea that human actors are defined by the rational disposition they assume, is chimerical, appealing to our most robust conceptions of "self," but is also ultimately false, or at least profoundly incomplete. Social psychology's revelation of our situationist selves - we are in no small part defined by the circumstances that surround us and our often less than rational responses to them - corrects misapprehensions founded on idealistic and ultimately inaccurate depictions of how we engage contract doctrine. Doctrine does not fail so long as we take it seriously; it is only our propensity to translate the elements of doctrine into terms that we, wrongly, assume are constrained by transactional realities that corrupts contract doctrine. I conclude that there is a role for the courts and the common law to play, that contract doctrine founded on substantial bargain and agreement can and should continue to matter, that only conscientious application of classical contract doctrine can realize the goals of equity and efficiency.

[Frank Snyder]

April 25, 2006 in Recent Scholarship | Permalink | TrackBack (0)

Changed Circumstances

United_kingdom_flag_10 In the context of insurance contracts, an insurer under common law has a right to consider the contract discharged if “changed circumstances materially alter the insured risk.”  But what does that mean?  Suppose all that’s happened is that events have occurred that make the likelihood of a payout much more likely.  Does that count?  And if it does, does the insurer get to keep the premium?

Those were the issues for the U.K. Commercial Court in last year’s Swiss Reinsurance Co. v. United India Insurance Co.   John Hanson and Emma Sephton of London’s Barlow Lyde & Gilbert run down the answers (maybe; yes) in Material Alteration To The Insured Risk.

[Frank Snyder]

April 25, 2006 in Commentary, Recent Cases | Permalink | TrackBack (0)

Monday, April 24, 2006

Depeche Mode on Contracts

It is only recently that I joined the modern world and purchased an iPod. 

So far I’ve been enjoying owning it, as it makes the car rides out to Long Island more bearable.

I’ve just finished the project of getting my CDs transferred into iTunes, and have been using the “shuffle” feature, which digs up the oddest juxtaposition of songs.  Sometimes you even forget that you owned a song, and then rediscover it suddenly.

Such was the case in the car today, when the song “Everything Counts” by Depeche Mode randomly came up on shuffle.  I’m dating myself a bit like this, but I used to listen to this particular CD a lot at the end of high school.  I was glad to encounter it again, as some of the synth pop from the 80s has held up, really remarkably well, considering that it's, er, synth pop.

Anyway, here are the lyrics, which I assume to be songwriter Martin Gore’s take on the recording industry:

The handshake
Seals the contract
From the contract
There’s no turning back
The turning point
Of a career
A career of being insincere
The holiday
Was fun packed
The contract
Still intact

The grabbing hands
Grab all they can
All for themselves
After all

It’s a competitive world
Everything counts in large amounts

The graph
On the wall
Tells the story
Of it all
Picture it now
See just how
The lies and deceit
Gained a little more power
Confidence
Taken in
By a sun tan
And a grin

The grabbing hands
Grab all they can
All for themselves
After all

It’s a competitive world
Everything counts in large amounts

The grabbing hands
Grab all they can
Everything counts in large amounts

[Miriam Cherry]

April 24, 2006 | Permalink | TrackBack (0)

Blogs and Scholarship

Aaa_28 Do blogs by law professors count as "scholarship"?  Some argue that they should, even though my dean counts it as "service."  (At my law school, "service" need not actually result in any benefit to anyone, which is why faculty committee work also counts.)

But whether or not they're "scholarship," blogs are certainly getting cited.  Ohio State law student Ian Best (top left) on his blog 3L Epiphany, is compiling a list.  He's found some 70 blogs that have been cited, many repeatedly.  Douglas Berman's Sentencing Law & Policy blog -- part of our Law Professor Blogs Network -- has been cited 60 times in law journals, the most of any blog.  You can see Best's list here.

ContractsProf is tied for the nineteenth most-cited blog ("We're top twenty!"), with a total of, well, two citations.  One of them was by Bob Hillman, who in a recent Michigan Law Review article quoted an "Anonymous" comment on this blog.  If you'd asked, Bob, I could have told you who the "Anonymous" was, and got my name in the Michigan Law Review again.  My dean likes that.

Also on Best's site are interviews with two judge who have cited blogs in judicial opinions.  Particularly interesting are the comments of U.S. District Judge Richard Kopf, who notes that blogs allow academics doing cutting-edge work to make their stuff accessible to judges and practitioners at a practical leve. 

[Frank Snyder]

April 24, 2006 in About this Blog | Permalink | TrackBack (0)

"Nonprofit" is a Tax Designation, Not a Business Plan

Aaa_27 Fcsl1_3 A good many people in legal education are up in arms about the growth of for-profit law schools.  The fear (whether justified or not) is that the quest for profits will work to the disadvantage of students.

Yet, as the National Law Journal points out in an interesting article, the nonprofit law schools are using a variety of the same management techniques that their for-profit cousins.  The reason?  Pressure from the U.S. News rankings, says the Journal.  (Images: For-profit Florida Coastal law school's new 220,000 square-foot lakeside facility.)

[Frank Snyder]

April 24, 2006 in Law Schools | Permalink | TrackBack (0)

Weekly Top 10

Ssrn_logo_55 Two new papers and one returnee join this week's Top Ten.  Following are the ten most-downloaded new papers from the SSRN Journal of Contract and Commercial Law for the sixty days ending April 23, 2006.  (Last week's rank in parentheses.)

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

5 (-) Corporation and Contract, Henry Hansmann (Yale).

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

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

8 (-) Constructing a Bid Protest Process: Choices Every Procurement Challenge System Must Make, Daniel I.. Gordon (GAO).

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

10 (-) Legal Default Rules: The Case of Wrongful Discharge Laws, W. Bentley MacLeod (Columbia-Economics) & Voraprapa Nakavachara (Southern Cal-Economics).

[Frank Snyder]

April 24, 2006 in Recent Scholarship | Permalink | TrackBack (0)