ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Friday, November 24, 2006

When a donor has a change of heart...

Death_and_the_miser_death_of_a_miser_31_This is the season of giving, right? Well, a recurring theme in contract law: wealthy donor pledges piles of money to a non-profit or charitable institution; wealthy donor (or wealthy donor's heirs) renege on the pledge. Recent examples include: FIU, University of Colorado, and Drexel (a la Allegheny College). (Image: Hieronymus Bosch, Death of the Miser).

In "A Prenup for Donors," the W$J reports that charitable institutions are trying to make it more difficult for donors to "renege on their gifts." It presents a delicate balancing act, however. Apparently pledges happen rather informally, without a written, signed pledge of, say, $101 million. If the charitable institution wants some legal assurances, and asks the potential donor to sign a "binding agreement," the institution might "turn off" that potential donor. The donors might feel betrayed by the institutions' lack of trust and "take their money elsewhere." The article reports:

Nonprofits also are beefing up their development offices, recruiting lawyers and former bankers to better document donations and ensure gift agreements are legally sound. At California State University, Monterey Bay, the school's director of planned giving is a former litigator specializing in estate planning. A few institutions, including Drexel University in Philadelphia, even are taking heirs of wealthy alumni to court.

But making sure donors pay up is a delicate balancing act. As with a prenuptial agreement between an engaged couple, too much tough talk could turn off a potential contributor. That's an especially tricky terrain as nonprofits court newly wealthy hedge-fund managers and investment bankers.

Peter Lewis, who made a $101 million pledge to Princeton, his alma mater, in January, says he "wouldn't react real positively" if an institution insisted he sign a legally binding gift agreement. "My word is good," says the former chief executive of insurance giant Progressive. "If they don't trust me they don't have to take the money -- I can go somewhere else. There are plenty of places that are happy to accept gifts without promises." Neither Princeton nor Mr. Lewis would say whether he signed a legally binding gift agreement.

[Meredith R. Miller]

November 24, 2006 in In the News | Permalink | TrackBack (0)

Thursday, November 23, 2006

Happy Thanksgiving!

Aaa_31 Hope your Thanksgiving is as happy as this turkey's . . . shown here getting a pardon from President Truman.

[Frank Snyder]

November 23, 2006 in Miscellaneous | Permalink | TrackBack (0)

Wednesday, November 22, 2006

Hadfield Named Kirland Professor

Gotanda_2 Southern Cal contracts prof Gillian Hadfield has been named the Richard L. and Antoinette S. Kirland Professor of Law and Professor of Economics at the L.A. school.  Hadfield has been at USC since 2001, after stints teaching at Toronto and Cal-Berkeley.  She's also director of the school's Center for Law, Economics, and Organization.

[Frank Snyder] 

November 22, 2006 in Contract Profs | Permalink | TrackBack (0)

Enforcing International Arbitration Agreements

The Restatement (Second) of Contracts, of course, defines a "contract" as a "promise . . . for the breach of which the law gives a remedy."  But whether an aggrieved party actually receives the remedy that the "law gives" depends on a lot more than contract law.

In a new paper, Enforcing International Arbitration Agreements in Federal Courts: Rethinking the Court's Remedial Powers, forthcoming in the Virginia Journal of International Law, Daniel S. Tan of Latham & Watkins in New York takes a look at the problem of remedies that arise under private international law. Here’s the abstract:

The area of remedies in private international law is largely unexplored, but provide the very means by which the courts can advance private international law aims such as controlling international litigation and enforcing forum selection. The contractual nature of arbitration agreements and the policy in favor of arbitration make this a good starting point from which a wider remedial framework can be developed.

In practice, the U.S. federal courts invariably enforce arbitration agreements with the statutory remedies in the Federal Arbitration Act. Yet, there is no reason why this should be. Where the statutory remedy is deficient or inappropriate, the courts may appeal to their wider inherent remedial powers to fashion suitable relief. The domestic law of remedies suggests that the courts may use specific and (antisuit) injunctive relief to enforce the parties' right to the arbitral forum, or to award ordinary contractual damages to vindicate what is a straightforward breach of contract. Private international law remedies such as stays of proceedings and nonrecognition of judgments obtained in breach of arbitration agreements are other remedial alternatives that can be used to enforce such agreements. All the same, development of each of these remedies must be done within the context of an overarching remedial scheme - akin to that which exists in domestic law. The domestic law of remedies offers an interlocking set of remedial responses to vindicate wrongs. To effectively control international litigation and improper attempts at forum shopping, the courts must endeavor to develop a similar remedial framework in the private international law context, in order that they may be able to render the most appropriate remedial relief to enforce agreements to arbitrate and advance the policy in favor of arbitration.

[Frank Snyder]

November 22, 2006 in Recent Scholarship | Permalink | TrackBack (0)

Comcastic Housewives!

The Comcast Corporation and the Walt Disney Company have agreed to a new distribution deal that would bring Disney programming to Comcast's On Demand service.  A few details of the deal have been reported here, for example.  Comcast paid $1.23 billion dollars for the distribution rights to Disney programming and also got a 39.5% stake in E Entermainment Television.  Disney owns ten broadcast television stations, including ABC and the various ESPN joints.  Episodes of ABC hits such as "Desperate Housewives" and "Lost" will be available On Demand within 12 hours of their original broadcasts, which means I can now not watch them whenever I don't want to. 

Actually, On Demand is a wonderful feature.  I never would have finished the article I wrote this summer if I could not have distracted my five-year-old daughter through the 24/7 availability of "Blues Clues" and "Dora the Explorer." 

[Jeremy Telman]

November 22, 2006 in In the News | Permalink | TrackBack (0)

Tuesday, November 21, 2006

Lord Sandwich Did Not Eat Mexican Food, Except Maybe Chocolate

Gotanda_3 The question whether a burrito is a "sandwich" for purposes of a restaurant lease has been getting a lot of play among contracts profs.  Based on classroom anecdotes, some of our students agree with the court's conclusion that a burrito, which involves one tortilla instead of two slices of bread, can't be a sandwich.  Some of them, however, dispute the court's remark in dicta that a quesadilla is also not a sandwich, even though it is usually made by layering cheese or other fillings between two tortillas -- the functional equivalent of a grilled-cheese sandwich.  And a taco is much like the kind of half-sandwiches that lots of moms make for kids by folding a single slice of Wonder Bread around the PB&J filling.  Still others argue that the concept of two slices of leavened bread is inherently Eurocentric, and that many cultures have the equivalent of the sandwich without actually slicing loaves of bread.  Spring rolls, for example.  Or maybe samosas.

In any event, Mike Madison (Pitt) has done us all a favor by collecting the documents in the case, including the expert witness affidavits ("a sandwich is rarely served with beans or rice between the slices," avows an editor of Saveur magazine with an apparent straight face, while a writer for Gourmet notes that "nobody would say that they are going to . . . the sandwich shop to get a burrito") in this helpful post.

[Frank Snyder]

November 21, 2006 in Recent Cases | Permalink | TrackBack (0)

NFL Raiders Lose Contract Fraud Dispute

Aaa_11 The Oakland Raiders of the National Football League (2-8 and firmly mired in last place) suffered another setback yesterday, when a California appellate court threw out a $34.2 million judgment the team had gained against the Oakland-Alameda County Coliseum.  Raiders had claimed that they had been duped into signing a stadium lease based on the Coliseum's "negligent misrepresentation" that that season tickets had been sold out for the 1995 season.

The appellate panel decided, by a 2-1 vote, that the Raiders had waived their rights to sue on the claim when they subsequently entered into a new lease which contained significant concessions from the Coliseum.

[Frank Snyder]

November 21, 2006 in In the News | Permalink | TrackBack (0)

Weekly Top 10

Ssrn_1 Lots of things to be thankful for as we head into the Thanksgiving break, not least of which are a slew of interesting papers -- stuff we guarantee you'll enjoy reading a lot more than the essays that will soon be coming your way.  Following are the top ten most-downloaded new papers from the SSRN Journal of Contract and Commercial Law for the 60 days ending November 19, 2006.  good work to be thankful for this week as we head into Lots of good stuff in this week's Top 10 as we head into the Tha

1 (2) Hoffman v. Red Owl Stores and the Myth of Precontractual Reliance, Robert E. Scott (Columbia).

2 (3) Antitrust and Regulation, Dennis W. Carlton (Chicago-Business) & Randal C. Picker (Chicago).

3-tie (4) Friendship & the Law, Ethan J. Leib (Cal-Hastings).

3-tie (8) To Make or to Buy: In-House Lawyering and Value Creation, Steven L. Schwarcz (Duke).

5 (5) Governing Innovative Collaboration: A New Theory of Contract, Matthew Jennejohn (Columbia).

6 (6) The Cost of Norms: Tax Effects of Tacit Understandings, Alex Raskolnikov (Columbia).

7 (7) The Public Responsibility of Structured Finance Lawyers, Steven L. Schwarcz (Duke).

8 (10) Party Autonomy in the Private International Law of Contracts: Transatlantic Convergence and Economic Efficiency, Giesela Ruehl (Max Planck Institute).

9 (-) A Good Faith Revival of Duty of Care Liability in Business Organization Law, Carter G. Bishop (Suffolk).

10 (-) The Market for Contracts, Geoffrey P. Miller (NYU).

[Frank Snyder]

November 21, 2006 in Recent Scholarship | Permalink | TrackBack (0)

If Fox and HarperCollins Don't Do It, Will They Have Breached?

180pxo_j_simpson As everybody now knows (pretty much whether they want to or not), ReganBooks, an imprint of HarperCollins, recently announced that it would publish a book "written" by O.J. Simpson entitled If I Did It.  The book was to be promoted through a two-part interview of Simpson by Judith Regan, the editor of ReganBooks, which was to appear on Fox television.  Regan has explained at some length that she views the book as a form of confession (is she unfamiliar with the semantic power of the word "if"?) and has stated that she was motivated to publish the book becasue she was herself a victim of domestic violence.

As everybody also knows by now, Rupert Murdoch's News Corporation, the corporate parent of both the Fox network and ReganBooks, pulled the plug on both the book and the interview.  And so now only the contracts question remains: will the News Corporation have to pay damages to Simpson for breaching the contract?

The New York Times reports that Simpson likely has already been paid a percentage of his advance, and the News Corporation will likely be contractually obligated to pay whatever else was due under the contract.  But could it be that Simpson is motivated by greed alone?  I doubt it.

[Jeremy Telman]

November 21, 2006 in Celebrity Contracts, In the News | Permalink | TrackBack (0)

The Law of the Turkey

Turkeys_1_1I'd hazard a guess that nearly all contract law concepts can be learned with turkey cases (and one chicken case... and maybe one cow case). In the spirit of Thanksgiving, some turkey cases here (In the U.S., this time of year is rough for the turkeys. It is also likely a rough time for purveyors of turkeys, especially if their contracts do not go as planned. Thanksgiving 1917 was certainly difficult for Jacobsen-Reimers Co, a California company. . .) and here (George R. Whaley had been a poultry farmer for some 35 years. For 20 of those years, under oral contract, Whaley supplied turkeys to H&H Poultry Co., a poultry processor. . .).

Have a Happy Thanksgiving!

[Meredith R. Miller]

November 21, 2006 in Miscellaneous | Permalink | TrackBack (0)

Monday, November 20, 2006

A $51 Million Conversation

Bostonredsoxlogo I was a bit perplexed when I read that the Boston Red Sox had agreed to pay $51 million just for the right to talk with Japanese pitcher, Daisuke Matsuzaka.  But National Public Radio has set me straight.  The Red Sox apparently paid for exclusive rights to negotiate with Matsuzaka.  If at the end of 30 days, the negotiations do not yield a deal that will have Yankee fans crying into their spilt milk, the Red Sox get their money back.  In short, the infield fly rule applies to these negotiations.

Poor Boston.  With their luck, they will succeed in getting Matsuzaka, but since the Chicago Cubs have just re-signed Aramis Ramirez and look like they are going to land Alfonso Soriano, the Cubs will now be absolutely unbeatable in 2007. 

If I may use the vernacular.  That's right, baby! The Cubs in 2007.  An absolute lock! *

You read it here first. 

[Jeremy Telman]

*The Contracts Prof Blog and Jeremy Telman make no guarantee as to the accuracy of any of the predictions contained in this post.  If there is any doubt as to the accuracy of any claim or information in this post, the reader is responsible for verifying same against an alternative source.  This post will be subject to periodic revision from April through October 2007 with the full expectation that it and all cache copies of it will be deleted permanently in October 2007 along with a box or two of tissues and one broken heart.

November 20, 2006 in In the News | Permalink | TrackBack (0)

Limerick of the Week

Frank has now deluged us with Too Much Information on Kirksey v. Kirksey.  Alas, Casto and Ricks' research lends no support to the pet theory of some students who read the case.  To wit, whenever I teach this case, at least one student is convinced that Isaac was a bit sweet on Angelico (Antillico), that his love was unrequited and that he avenged himself through eviction.  But the research doesn't disprove the theory either . . . .   And so, the Limerick survives. 


From a house to a hut to the street
Was the course of Ms. Kirksey's retreat.
She could not recover
From her in-law (her lover?)
Who'd nakedly promised a suite.

[Jeremy Telman]

November 20, 2006 in Famous Cases, Limericks, Teaching | Permalink | Comments (0) | TrackBack (0)