October 18, 2006
The Right to Destroy
Steve Wynn, a hotel/casino magnate in Las Vegas, apparently destroyed his Picasso, “The Dream” after jostling it in an attempt to point out a feature to guests. As the full news story described:
"Smack in the middle ... was a black hole the size of a silver dollar. 'Oh s---,' he said. 'Look what I've done. Thank goodness it was me.'"
Wynn's office on Tuesday confirmed the story, an account of which also appeared in this week's The New Yorker.
He had already sold (but not delivered) the painting for $139 million. Of course, it would have made for a more interesting contracts problem if Wynn hadn’t done the honorable thing and agreed to keep and repair the painting!
Contracts Prof Weekly Spotlight: Shandrea Solomon
She received her J.D. in 1994 from Loyola University School of Law, New Orleans, where she accrued several honors and awards including the Shell Oil Scholarship, Trial Practice Book Award, Moot Court membership, and recognition for her skills in Mediation & Arbitration. She received her Bachelor of Arts in English from Southern University A&M College in Baton Rouge, Louisiana, where she graduated cum laude. She received several honors and awards, including the President's Scholarship, Alumni Scholarship, Lambda Iota Tau English Fraternity recognition, and Outstanding Student Awards.
Prior to joining PhoenixLaw's faculty, Professor Solomon held positions at several major schools. She was assistant to the dean and adjunct professor at the University of Mississippi Law School, director of admissions and special programs at the University of Florida College of Law, and the vice president of student affairs at Edward Waters College in Jacksonville, Florida. She also interned with ProServ Sports Agency in Phoenix and the Minnesota Vikings Football Club.
Her research interests cover several facets of the law, with a focus on affirmative action and diversity in legal education, but also contracts, criminal law and procedure, and sports and entertainment law. She is a member of the Louisiana Bar Association, National Bar Association, and Delta Sigma Theta Sorority, Inc.
Professor Solomon is passionate about community service. She serves as a faculty advisor to the Phoenix School of Law Family Advocacy Pro Bono Project, a collaborative service project of PhoenixLaw, the Salvation Army – Elim House, and the Volunteer Lawyers Project of Maricopa County. The Project provides services to survivors of domestic violence. She also sits on the board of the Literacy Volunteers of Maricopa County, an organization that addresses adult literacy issues in Arizona. Other community-based activities with which she is involved include the Arizona Cardinals Community Service Wives/Significant Others Foundation, Phoenix Rescue Mission, Boys & Girls Club, Cardinals Kids Camps, Salvation Army Annual Canned Food drive, the Phoenix Women’s Sports Foundation, and Habitat for Humanity.
Professor Solomon and her husband, Richard, defensive backs’ coach with the Arizona Cardinals Football Club, reside in Gilbert, Arizona.
October 17, 2006
Tom Waits on Commerce
Tom Waits performing "Step Right Up" in 1977. Mostly accurate lyrics/translation available here. ["You got it buddy: the large print giveth and the small print taketh away..."]
[Meredith R. Miller]
FW: Fw: Fwd: FWD: Best Lawyer/Insurance Story of the Year...
Don't you love those forwarded, forwarded, forwarded, forwarded emails? This is why someone invented infinity. Well, my dear friend's mother (Ada) sent along this one, probably because I'm a lawyer. The story (of course) proclaims itself to be true, and I paste it here (below) in its entirety -- including original emphasis and self-conscious narration (from an unknown narrator many forwards back?). Who cares if it is true - the lesson to law students: stay awake in both contracts and criminal law.
Charlotte, North Carolina:
A lawyer purchased a box of very rare and expensive cigars, then insured them against, among other things, fire. Within a month, having smoked his entire stockpile of these great cigars and without yet having made even his first premium payment on the policy the lawyer filed a claim against the insurance company. In his claim, the lawyer stated the cigars were lost in a series of small fires.
The insurance company refused to pay, citing the obvious reason, that the man had consumed the cigars in the normal fashion. The lawyer sued....and WON!
Now stay with me...
Delivering the ruling, the judge agreed with the insurance company that the claim was frivolous.
The judge stated nevertheless, that the lawyer held a policy from the company, which it had warranted that the cigars were insurable and also guaranteed that it would insure them against fire, without defining what is considered to be "unacceptable fire" and was obligated to pay the claim.
Rather than endure lengthy and costly appeal process, the insurance company accepted the ruling and paid $15,000 to the lawyer for his loss of the cigars lost in the fires.
NOW FOR THE GOOD PART...
After the lawyer cashed the check, the insurance company had him arrested on 24 counts of ARSON!!!
With his own insurance claim and testimony from the previous case being used against him, the lawyer was convicted of intentionally burning his insured property and was sentenced to 24 months in jail and a $24,000 fine.
This is a true story and was the First Place winner in the recent Criminal Lawyers Award Contest.
[Meredith R. Miller]
America is, if nothing else, the land of ratings. Whether it's a TV show or a toaster, there's somebody out there who'll give you a ranking. It's naturally interesting to know that Maria Sharapova is the World's 27th Sexiest Woman, and that Pittsburgh is the World's 39th Most Livable City, but what about something really important, like blogs?
Well, the good folks at Blog Juice are already on the job. They've got a handy automatic calculator that can help you determine just how great your favorite blogs are, with their Blog Juice Calculator. Check it out.
Turns out that ContractsProf has a Blog Juice rating of 4.8. We're not sure whether that's good or bad, exactly. As of the moment we're tied with The Poker Chronicles, a point or two behind The Cancer Blog, but well ahead of Climate Crisis. Halfway between cancer and global warming sounds about right for a blog on contract law, I suppose.
Rowley on Farnsworth on Mistake
The late Allan Farnsworth was one of the titans of 20th century contract law. His last major work was Alleviating Mistakes: Reversal and Forgiveness for Flawed Perceptions. Now out from the Michigan Law Review is a review of that work by Keith A. Rowley (UNLV), called To Err is Human. Rowley notes that Alleviating Mistakes is a work that "delves into how contract, criminal, and tort law, and equity deal with factual and legal mistakes and the rationale for each substantive body of law’s similar or dissimilar treatment of various types of mistakes."
Plus, if you've never quite got the distinction between being ignorant of a fact and being mistaken about it, it's a good primer.
Weekly Top Ten
Following are the top ten most-downloaded recent papers from the SSRN Journal of Contract and Commercial Law for the 60 days ending October 15, 2006.
1 The Promise and Perils of Credit Derivatives, David A. Skeel (Penn) & Frank Partnoy (San Diego).
2 Transaction Cost Economics: An Assessment of Empirical Research in the Social Sciences, Barak D. Richman (Duke) & Jeffrey Macher (Georgetown-Business).
3 Payment Wars: The Merchant-Bank Struggle for Control of Payment Systems, Adam Levitin (Independent).
4 The Flight from Arbitration: An Empirical Study of Ex Ante Arbitration Clauses in Publicly-Held Companies' Contracts, Theodore Eisenberg (Cornell) & Geoffrey P. Miller (NYU).
5 Expectation Damages and Contract Theory Revisited, Richard Craswell (Stanford).
6 The Law and Economics of Preliminary Agreements, Alan Schwartz (Yale) & Robert E. Scott (Columbia).
7 Restitution for Wrongs and the Restatement (Third) of the Law of Restitution, James Steven Rogers (Boston College).
8 What Do Corporate Default Rules and Menus Do? An Empirical Examination, Yair Jason Listokin (Yale).
9 Legal Origins: Reconciling Law & Finance and Comparative Law, Mathias M. Siems (Edinburgh).
10 Hoffman v. Red Owl Stores and the Myth of Precontractual Reliance, Robert E. Scott (Columbia).
Solan Named Associate Dean
We're never sure whether we ought to say "congratulations" or "condolences" (after all, you now get to hear grade complaints from everyone's students) but Brooklyn Law School contracts prof Lawrence M. Solan has been named Associate Dean for Academic Affairs there.
Solan, who is an expert in language and law, has been at Brooklyn since 1996, and is the Don Forchelli Professor of Law.
A bad hair day?
The New York Law Journal reports on this hairy breach of contract case from the S.D.N.Y.:
Pony Pal entered into a contract with Claire's Boutiques in September 2004 to sell "an inventive, removable hair piece comprising an elastic loop suitable to surround and bind a ponytail of a user and a connection end securing a first end of a length of hair strands to the elastic loop."
In exchange for an upfront payment of $10,000 and future royalties of 5 percent, Pony Pal agreed to let Claire's manufacture and sell its product. Claire's paid the $10,000. But the business relationship between Claire's, an international retailer with over 2,000 stores nationwide, and the Iowa-based licensor grew brittle. Claire's refused to pay royalties, and the adversaries soon were splitting hairs over patent specifics.
Claire's argued that, because it had made enough changes to Pony Pal's hair piece, it had fallen outside the scope of the patent.
The case distilled to an interpretation of the language in Pony Pal’s patent which described the removable hair piece as comprising “a length of hair strands having a first end and a second end.”
Claire's argued that the wording of the patent called for strands of hair to be attached at one end to an elastic loop.
The two parties disagreed over the meaning of the term "end." The patent language at issue reads "a connection securing the first end of the length of hair strands to a portion of the elastic loop."
Claire's argued that "the 'first end' and 'second end' of the 'length of hair strands' must be the same as the collective ends of the hair strands themselves." Based on this reading, Claire's created a hair piece that consisted of a braid and placed the loop at a different end.
Pony Pal, in its memo of law, contended that the "first end" language should be properly construed as "the proximal end of a collection or bundle of hair strands and is not limited to end extremities of linear or unidirectional strands of hair."
After combing through the legal papers, Judge Haight concluded that the plain meaning of the words was that "one end of the length of hair is opposite to the other."
"The first end is attached to the elastic loop, the other hangs opposite to it (that is, distally from the elastic loop)," Judge Haight said. "The language of the claim, and indeed, the invention, are no more complicated than this."
Based on this interpretation, the court held that Claire's product was similar enough to Pony Pal's to fall within the patent and, therefore, Claire had breached the parties' contract by failing to pay royalties.
NYLJ article. Full text of the opinion.
[Meredith R. Miller]
October 16, 2006
Online Clickthrough Agreements Upheld
In my Cyberlaw course, I argue to my students that the best way to form a valid online agreement is through a "mandatory non-leaky clickthrough" agreement. By this, I mean that, to reach their destination, every user must go through a mandatory process that requires the user to affirmatively click that they are agreeing to the contract terms. These contracts generally have fared well when considered by courts--at least, from a formation standpoint. (See my list of online contract formation cases here).
For a textbook example of how the courts evaluate mandatory non-leaky clickthrough agreements, consider ESL Worldwide.com, Inc. v. Interland, Inc., 06-CV-2503 (S.D.N.Y. June 21, 2006). In that case, a disgruntled customer sued a web host because the hosted website was allegedly offline for 7 months. The web host moved to dismiss based on the forum selection clause in its contract. The court says:
First, Shin may not remember click the icon, but Defendants' records reveal that he did, in fact, so click...Furthermore, because of the manner in which the website is organized, without having clicked "Accept," Shin would not have been allowed to access certain other sections of the site, and it is uncontested that Shin did enter those sections...Finally, the text above the "Accept" icon clearly states that by clicking "Accept," a user is bound to the new Terms of Services, and such terms, which include the forum selection clause, are easily accessed by clicking on the accompanying link.
As you can see, an airtight formation process makes it easy for the court. Case dismissed.
Google recently won a similar outcome in Person v. Google, where Google successfully moved to change venues based on the venue selection clause in its mandatory clickthrough AdWords contract. Person v. Google Inc., 2006 WL 2884444 (S.D.N.Y. Oct. 11, 2006).
Limerick of the Week
I taught both Frigaliment and Peerless last week. What a great week to be a contracts professor!
Helen of Troy's face may have launched a thousand ships, but Peerless is the ship that launched a hundred Limericks. Hmmm, perhaps a lesser boast. In any event, this was my first Limerick, and since I was assisted in writing it by my wife, the poet Catherine Tufariello, I think it is one of my best.
There are pedagogical principles underlying my Limericks for Lawyers project. The Limericks are supposed to summarize facts and law in a way that helps students remember both the cases and the principles that they stand for. But sometimes the cases themselves are so memorable, pedagogy takes a back seat to frivolity.