November 17, 2006
The New York Times reports that Blockbuster Inc. has reached a deal with Bob and Harvey Weinstein that will give Blockbuster exclusive rights to the Weinstein brothers' movies through 2010. The purpose of the agreement seems to be to prevent Netflix, my main source of entertainment, from getting its hands on the Weinstein brothers' films. In my humble opinion, this deal makes about as much sense as my deal back in the 1970s to release my new muscial performances exclusively in 8-track.
The Weinstein brothers founded the Miramax movie studio, which is now owned by Disney. [Miramax's recent "The Queen," featuring Helen Mirren, received rave reviews, but I can't comment because it never played anywhere near Valparaiso, Indiana, while the insipid "Marie Antoinette" played nearby for weeks. Nothing plays in Valparaiso anymore as our only movie theater just closed. Not that I'm bitter or anything. I'll just put "The Queen" on my Netflix queue.]
The Weinstein Brothers now run the Weinstein Company, and "Bobby," their film about the day Robert Kennedy was assassinated, is to be released today. According to the New York Times, that film will never darken my door, as it will be covered under the new agreement. Nor will I be able to add upcoming Weinstein Brother movies, "The Nanny Diaries," or "The Protector," to my queue.
Pity. At least I don't have to worry about late fees.
November 16, 2006
The Face of Hamer v. Sidway
Almost all of us teach that old contract law chestnut Hamer v. Sidway, 124 N.Y. 538, 27 N.E. 256 (1891), probably the granddaddy (or at least grand-uncle) of all unilateral contract cases. Here's a picture of Franklin Sidway (1834-1920), the executor of William E. Story's estate and the putative defendant in the case.
Sidway was a member of a well-connected Buffalo mercantile and shipping clan. He married the daughter of Elbridge Gerry Spaulding, a Buffalo banker who served as mayor and congressman and who played a major role on the U.S. House Ways and Means Committee in financing the Civil War. Franklin himself, after a good education and a Grand Tour of Europe, rose to become director and Vice President of the Farmers and Mechanics Nationial Bank -- his father-in-law, perhaps coincidentally, was President -- the role in which he became involved as executor of the Story estate. He seems to have been cut out for an executor: a contemporary biography calls him "prudent, conservative, quick of decision, and not afraid of large undertakings." In the 1850s he had been one of the organizers of the Niagara Base Ball Club, which is famous as one of the first modern baseball clubs.
The family is remembered in the dignified Beaux-Arts Sidway Building in Buffalo.
Contracts Prof Weekly Spotlight: George W. Kuney
B.A., University of California, Santa Cruz
J.D., Univerisity of California, Hastings College of Law
M.B.A., University of San Diego
George W. Kuney is an Associate Professor of Law and Director of the Clayton Center for Entrepreneurial Law at University of Tennessee College of Law, where he teaches Contracts, Contract Drafting, Debtor-Creditor, Property, Representing Enterprises and Workouts & Reorganizations.
Professor Kuney was born and raised in San Francisco and was a partner in the San Diego office of Allen Matkins Leck Gamble & Mallory LLP where he concentrated his practice on insolvency and reorganization matters nationwide. Prior to that he received his training with Howard, Rice, Nemerovski, Canady, Robertson & Falk LLP and Morrison & Foerster LLP.
Professor Kuney's expertise and scholarly interests relate to business transactions and litigation with an emphasis on acquisitions, recapitalizations, reorganizations and financing. He is a Research Fellow of the Center for Corporate Governance, a multi-disciplinary research center of the University of Tennessee. He is also an Editor Emeritus of the California Bankruptcy Journal and the Business Law News and is currently the editorial advisor to Transactions: The Tennessee Journal of Business Law. He teaches Contracts, Contract Drafting, Property, Debtor-Creditor, Workouts & Reorganizations, and a transactional simulation seminar at UT. He is an author of Kuney & Lloyd, Contracts: Transactions and Litigation (West 2006) and the author of The Elements of Contract Drafting (2d Ed. West 2006) and Legal Drafting in a Nutshell (3d Ed. West 2007), as well as a number of law review and other articles.
In addition to his other activities, professor Kuney consults for outside clients on matters related to business law, contracts, Chapter 11, and insolvency. One of his current passions is exploring and advocating the limitations of bankruptcy law as a device to affect non-debtor rights and duties that could not be affected under otherwise applicable non-bankruptcy law. He conducts transactional training seminars and clinics for law students, lawyers, and law firms across the country.
Professor Kuney lives in the Ft. Sanders neighborhood of Knoxville with his wife, Donna C. Looper, also an attorney and an Adjunct Professor. His interests include architecture, entrepreneurship, history, real estate development, land use, carpentry, hiking, and Lady Vols basketball.
November 15, 2006
Scott on Precontractual Reliance
The first contract law case I ever taught -- as a visitor in Bill Woodward's class at Temple Law School -- was Hoffman v. Red Owl Stores, 26 Wis. 2d 683, 133 N.W.2d 267 (1965). It's the casebook staple about precontractual reliance, and it raises two (or maybe four) perennial questions: (1) When (and why) is it reasonable for someone to rely on a promise that the person knows or ought to know is not legally enforceable? (2) When (and why) should reliance on an unenforceable promise transmute the thing into an enforceable promise?
In a new paper, Hoffman v. Red Owl Stores and the Myth of Precontractual Reliance, forthcoming as part of the Ohio State Law Review symposium on "Commercial Calamities," Bob Scott (Columbia), takes a look at Hoffman and what he takes to be its misplaced importance in the contract law canon. Here's the abstract:
Hoffman v. Red Owl Stores is one of the storied cases in modern contract law. The conventional wisdom is that Hoffman represents the emergence of a new legal rule imposing promissory estoppel liability for representations made during preliminary negotiations. Yet a review of contemporary case law shows that, in fact, courts require some form of agreement before they will grant recovery for early reliance. Hoffman's main legacy, therefore, has been as a trap for the unwary lawyer (and unhappy client) who unsuccessfully seek recovery for reliance on preliminary negotiations. This article asks how the court in Hoffman was able to find liability where other courts have not. A careful examination of the trial record shows that the conventional understanding of the facts in Hoffman is simply wrong. The true facts show that the breakdown in the negotiations between Hoffman and Red Owl officials was a product of a misunderstanding as to the nature of his financial contribution to the enterprise, a misunderstanding as attributable to Hoffman's carelessness as to any representations made by Red Owl's agents. The article then uses a large sample of decided cases to recover the law in action that governs precontractual liability. This sample highlights the emergence of a new default rule that imposes liability for a failure to bargain in good faith following a binding preliminary commitment. This new legal duty has been largely unexplored in the casebooks or the secondary literature, in part because of the misplaced attention paid to the unfortunate controversy between Mr. Hoffman and Red Owl Stores.
Alaska Packers -- The Video Treatment
And if a flag is not enough, you might want to show your students a video that illustrates the problem faced by Domenico and his colleagues in the Alaska Packers case.
As I explain to my students before showing the video, the problems Domenico et al. faced went beyond faulty nets. In fact, as the video suggests, Alaska Packers' workers were to go to extraordinary lengths to procure salmon for the company. Given what they had to go through, it's not suprising that they demanded higher pay. I wouldn't fight a bear for 2 cents a fish. I mean, I might have in 1902, but I have since learned from Stephen Colbert that bears can be mean.
The Alaska Packers Flag
Those looking for additional visual aids for classroom presentation of that perennial "consideration for a modification" case, Alaska Packers v. Domenico, here (left ) is the flag of the Alaska Packers Association. The flag was flown from the ships sailed back and forth between San Francisco and the salmon fields of Alaska. According to the web site, House Flags of Shipping Companies, the flag was sometimes flown without the letter "A." The flag design would have been painted on the funnels as well as flown at the staff. A slightly different version is also shown here.
At the upper right is the label from a can of Alaska Packers' Chief Brand Alaska Chum Salmon. product of the Alaska Packers. Feel free to enjoy its "lightly salted" flavor.
FIU Donor Withdraws $20 Million Pledge
Promises of charitable donations are, as we all know, enforceable without consideration. If you're looking for a good illustration of a withdrawn donation, consider the case of Florida International University, where a donor has withdrawn a $20 million pledge to the institution's new medical school.
Longtime FIU supporter Herbert Wertheim had promised $20 million dollars, and the school was planning on naming the school after him. (Yes, the naming rights would be probably be consideration so the charitable gift exception may not apply here.) But FIU balked at his request to allow him to pay it in four annual $5 million installments. On the telephone, the university president reportedly told Wertheim that he'd got the naming rights "on the cheap" and that the University could get $100 million for them. Wertheim apparently told the school that it would be unfair for him to stand in the way if FIU could get $100 million, so he withdrew his pledge and resigned from the Board of Trustees.
More on the Borat Litigation
Apropos of our earlier mention of the breach of contract litigation surrounding the new Borat film, here's a link to a National Public Radio segment on the subject.
[Frank Snyder -- hat tip, Scott Burnham]
November 14, 2006
Isaac Kirksey and Dan Rather
In their article, "Dear Sister Antillico . . .": The Story of Kirksey v. Kirksey, William Casto (Texas Tech) and Val Ricks (South Texas) unearth a lot of fascinating information about the parties to, and the background of, one of the most famous "consideration" cases in U.S. contract law history, Kirksey v. Kirksey, 8 Ala. 131 (1845).
One nugget in that delightful piece may have escaped your notice: Isaac James Kirksey (1797-1865), the brother-in-law who (the story goes) threw the poor widow Kirksey out in the cold, is the great-great-great grandfather of former CBS News anchor Dan Rather. Isaac, it seems, married one Mary Connally, the sister of Angelico (not "Antillico") Connally Kirksey. Isaac and Mary's daughter Eliza Jane Kirksey married one Daniel Rather of Talladega County, Alabama, in 1840, the same year Isaac sent the invitation to his sister-in-law. The Rathers moved to Shelbyville, Texas, and the rest is history. You can read about it in the Dan Rather genealogy. (Image: Wikipedia)
Weekly Top 10
1 Restitution for Wrongs and the Restatement (Third) of the Law of Restitution, James Steven Rogers (Boston College).
2 Hoffman v. Red Owl Stores and the Myth of Precontractual Reliance, Robert E. Scott (Columbia).
3 Antitrust and Regulation, Dennis W. Carlton (Chicago-Business) & Randal C. Picker (Chicago).
4 Friendship & the Law, Ethan J. Leib (Cal-Hastings).
5 Governing Innovative Collaboration: A New Theory of Contract, Matthew Jennejohn (Columbia).
6 The Cost of Norms: Tax Effects of Tacit Understandings, Alex Raskolnikov (Columbia).
7 The Public Responsibility of Structured Finance Lawyers, Steven L. Schwarcz (Duke).
8 To Make or to Buy: In-House Lawyering and Value Creation, Steven L. Schwarcz (Duke).
9 Unilateral-Modification Provisions in Employment Arbitration Agreements, Michael L. DeMichele & Richard A. Bales (Northern Kentucky).
10 Party Autonomy in the Private International Law of Contracts: Transatlantic Convergence and Economic Efficiency, Giesela Ruehl (Max Planck Institute).
November 13, 2006
Limerick of the Week
I had never heard of Lenawee County Board of Health v. Messerly before I adopted Knapp, Crystal and Prince's Problems in Contract Law, but I congratulate them on the choice, as the case teaches quite well in my experience. For those unfamiliar with the case, the facts of the case are that the Pickles bought from the Messerlys a 600-square-foot property, which housed a three-unit apartment building. The Pickles agreed to take the property "as is," but soon thereafter discovered a sewage leak that rendered the apartment building uninhabitable. A nonconforming septic system, installed by a prior owner, was the culprit. The trial court found no fraud or misrepresentation. The case serves to address the doctrine of mistake.
I can never quite get my mind around the idea of a 600-square-foot plot of land upon which a three-unit appartment building is situated. One of my students this semester hales from Lenawee County and tells me that it is a rural area where people seldom deal in tracts of land smaller than one acre. Equally baffling, how can it be that nobody had any knowledge of the nonconforming setpic system and the attendant sewage leak until the Pickles quite literally stepped in it? Do these people lack a sense of smell? My students always raise these worldly questions, but conveniently they play no role in the opinion. This allows us to focus on mistake:
The sewage leak, that was no trickle.
Now the property ain't worth a nickel.
When "as is" you take,
You eat your mistake,
So bon appetite, Mr. Pickles.