February 18, 2006
Teubner's "Coincidence of Opposites" in Contract Law
In the upcoming Festschrift in Honour of Lawrence Friedman (edited by Robert Gordon and Morton Horwitz, Stanford 2006), Gunther Teubner (left) of Frankfurt's Johann Wolfgang Goethe University offers Coincidentia Oppositorum: Hybrid Networks Beyond Contract and Organization. Here's the abstract:
I. The Impossible Necessity of Sociological Jurisprudence
Thesis 1: It is a scientific misconception of the law to believe that empirical or theoretical social sciences can guide law to any significant degree. The really decisive legal irritations are not supplied by interdisciplinary contact with social sciences, but with normatively loaded "reflexive practices" of various social sectors. My example: the dramatic extension of liability throughout networks (virtual enterprises, franchising nets, just-in-time arrangements) is a doctrinally impossible, but a practically necessary, judicial reaction to social perceptions of the risks posed by networks.
Thesis 2: The "translation" of socially reflexive practices into legal doctrine is not a result of a knowledge transfer from the social sciences to law. Private law doctrine can only be persuaded to develop conceptual innovations by its own, internal, path-dependent evolutionary logic. My example: Network is not a legal concept. It is a social science concept and its legal complement can only be reconstructed within the law by evolving "relational contract" into "connected contracts" (Vertragsverbund).
Thesis 3: One of the most important achievements of sociological jurisprudence has been its ability to understand and support the contribution of law to the resolution of paradoxes within social practice. My example: Networks are confronted by their environment with paradoxical demands. Legal doctrine reacts to such network paradoxes with a new legal concept of "double-attribution."
II. Piercing the Contractual Veil in Distribution Networks:
Three Levels of Legal Reality Construction
Approach 1: Casuistry
Approach 2: Political Law-Making
Approach 3: Socially Reflexive Practices
III. Translation Problems: Networks as Connected Contracts
Definition: "The notion of connected contracts (Vertragsverbund) is used to describe any plurality of contracts which refer to each other within either bilateral or multilateral relationships, whose interconnection gives rise to direct legal effects (of a genetic, functional or conditional nature), whether these simply result in an effect of one contract to the other (or others), or whether one can also observe mutual effects."
IV. The Role of Law in Social De-Paradoxisation Processes
Under certain conditions, hybrid arrangements provide for an institutional environment where paradoxical communication is not repressed, but institutionally facilitated and, sometimes, turned productive. Hybrids as a highly ambiguous combination of networks with contracts and organizations seem the result of a subtle interplay between different and mutually contradicting logics of action. How does the law respond to their transformation of external contradictions into an internal and simultaneously individual and collective orientation? In terms of legal conditions: by means of the dual constitution of connected contracts. In terms of legal consequences: through a selective double attribution to individual contractual partners and to the network as a whole.
V. Legal Conditions: The Dual Constitution of Connected Contracts
1. reciprocal references of bilateral contracts to one another, either found within the performance program and/or distilled from contractual practice ("multi-laterality")
2. a contractual reference to the overall project of the connected contracts ("relational purpose"),
3. a close and legally significant cooperation relationship between the participants within the ulti-lateral relation ("economic unity").
VI. Legal Consequences: Selective Double-Attribution to Contractual Partners and to the Network
1. Co-opetition: Exceptions to competition law
2. Unitas multiplex: Decentralized, re-individualized collective liability
3. Private-public Networks: constitutionalizing reflexive autonomy of network nodes.
No Compliance, No Renewal
A retail tenant who repeatedly breaches covenants in a Victoria, Australia, lease isn’t entitled to exercise the lease’s renewal, at least under common law. That’s the holding in a recent case from the Victorian Civil and Administrative Tribunal, Westgate Battery Co. v. G.C.A. Property Ltd., (2005) VCAT 2080. Campbell Paine of Melbourne’s Phillips Fox runs down the issues in the case, and notes that results might be different under Victoria’s Retail Tenancies Reform Act of 2003.
February 17, 2006
A Refresher Course in Contract Law, Email Restraint and Being a “Real Lawyer”
Via Accidental Blogger, this excerpt from an article in the Boston Globe:
The next time you're tempted to send a nasty, exasperated, or snippy e-mail, pause, take a deep breath, and think again. Then consider the tale of local lawyers William A. Korman and Dianna L. Abdala.
Korman was miffed that Abdala notified him by e-mail this month that, after tentatively agreeing to work at his law firm, she changed her mind. Her reason: ''The pay you are offering would neither fulfill me nor support the lifestyle I am living."
In his e-mail reply, Korman told Abdala that her decision not to have told him in person ''smacks of immaturity and is quite unprofessional," and noted that in anticipation of her arrival, he had ordered stationery and business cards for her, reformatted a computer, and set up an e-mail account. Nevertheless, he wrote, ''I sincerely wish you the best of luck in your future endeavors."
Her curt retort: ''A real lawyer would have put the contract into writing and not exercised any such reliance until he did so."
His: ''Thank you for the refresher course on contracts. This is not a bar exam question. You need to realize that this is a very small legal community, especially the criminal defense bar. Do you really want to start pissing off more experienced lawyers at this early stage of your career?"
Here’s the full story from the Globe.
[Meredith R. Miller]
Dental Office Isn't "Noxious" Business
A dentist’s office is not a “noxious, dangerous or offensive trade or business,” and therefore the wealthy residents of the historic and extremely expensive Treadwell Farm Historic District on New York's Upper East Side will have to suffer the annoyance of having it on their block, according to a recent decision by a Manhattan state court judge, reported in the New York Lawyer.
A group of dentists occupied the first two floors of a four-story townhouse. Plaintiffs Samuel Lek (CEO of Lek Securities Corp.) and Helen Roosevelt (of Teddy’s, not Frank’s wing of the family) led a suit by the East Sixties Property Owners Association to try to boot them out, demanding a permanent injunction and a constructive trust on all their revenues. The angry Masters of the Universe sued under an 1868 real estate covenant that provided:
That no . . . business or occupation known as nuisances in the law or which may be dangerous or offensive to the neighboring inhabitants shall ever be made, erected or permitted on said lots of land.
The covenant went on to specifically to categorize things like slaughterhouses, tanneries, gunpowder manufacturers, and gambling dens.
As a matter of law, a dentist’s office isn’t in that class, ruled Justice Faviola Soto (left), dismissing the complaint. The plaintiffs essentially argued that the mere existence of a commercial establishment in the neighborhood was "offensive to the neighboring inhabitants," but Soto -- the daughter of immigrants and the first judge of Dominican descent to sit on the New York bench -- concluded that the “discreet brass plate” that announced the name of the dental offices could not reasonably be viewed in the same class as a circus, a saloon, or a brass foundry.
Incidentally, if you're willing to put up with a nearby dental office, you can rent a cute little place in the district for a mere $17,000 a month.
No Evidence = Violation of Natural Justice
An adjudicator’s decision in a construction contract dispute ordinarily gets a lot of deference in the U.K, but not where the decision violates principles of “natural justice.” Those principles are violated when an adjudicator (a kind of arbitrator who issues interim rulings in ongoing construction projects but whose decisions are not final) makes a finding in the absence of any evidence on the point. That seems to have been the case in a recent Court of Session decision, Ardmore Construction Ltd. v. Taylor Woodrow Construction Ltd. Fraser McMillan of London’s Pinsent Masons offers an account of the case.
February 15, 2006
Summary Judgment, Ten Years Later
After ten years of litigation, the buyer of a valuable slice of Long Island oceanfront has finally won his case -- on summary judgment. He'll thus get $16 million worth of property for the $2.1 million he agreed to pay back in 1995. Of course, the summary judgment may have to go up on appeal now.
The tortured history of the case, with its aborted trial, Justice Department investigation, busted settlement, fiduciary duty claims, and special master to handle discovery disputes, is related in this story from the New York Law Journal, via Law.com.
This was the press release headline: Robert F. Kennedy, Jr. Kicked Off St. Thomas University School of Law's 2006 Distinguished Speaker Series.
No, that’s not what they meant. Kennedy wasn’t booted. In fact, Kennedy “kicked off” the series with a speech in which he noted that “We did not inherit the environment from our ancestors, we borrowed it from our children” and argued that “There is no civil right more basic that the right to a healthy environment.”
CUNY Hosts Non-Profit Conference
Nonprofit, the saying goes, is a tax status, not a business plan. Large amounts of money are controlled by nonprofit organizations -- and who's getting those benefits? That seems to be the intriguing question addressed by an upcoming CUNY Law Review is hosting, Who Profits from Nonprofits?
The program is slated for Friday, March 3, at CUNY’s law school. Admission is free.
Today in History: Jeremy Bentham
No intellectual current has had more of an impact on contract theory in the past forty years than the law and economics movement. An important strand in that movement is utilitarian analysis. And utilitarianism, in a way, started on this date, February 15, 1748, when Jeremy Bentham was born at Houndsditch, London, the son and grandson of attorneys. Bentham was a prototype for the modern law professor: he qualified to practice at Lincoln's Inn but never actually practiced, spending his time instead writing about law.
He left his estate to help found University College, London, where his cadaver -- embalmed, dressed, and seated in a chair wearing a big hat -- still greets visitors. (Image: Michael Reeve, GNU License, Wikipedia)
Through the Fire
Even if you aren’t a basketball fan (and I am not), check out Through the Fire. It is a documentary about Sebastian Telfair’s rags-to-riches jump from Lincoln High School straight to the NBA. Telfair grew up in a public housing project in Coney Island, Brooklyn and, passing up an offer to play at Louisville, he skipped college and entered the 2004 NBA draft directly out of high school. The movie is compellingly woven together by interviews with Telfair, his brothers, his high school coach and, also, intense high school game footage. The story follows Telfair’s high school basketball “career” to his eventual signing of a $15 million sneaker deal in his senior year – all this after Telfair emotionally mentions in an interview that he grew up without money to purchase sneakers, and had to borrow his sister’s sneakers to play out on the Coney Island courts.
And, the movie is at least marginally related to contract law for a few reasons. First, it shows the scouts and other forces of the seemingly lawless basketball culture in the lead-up to Telfair’s pre-NBA $15 million endorsement deal with Adidas. Second, it, perhaps, raises questions about sneaker companies’ donation of shoes and use of charismatic high school players to begin building brand loyalty in the schools (and, thereby, help competitive NYC high schools to lure agile teenage basketball players with the incentive of free sneakers). And, finally, it indirectly introduces what seems to be a hotly contested issue: whether a 20-year age requirement for the NBA draft should be included in the Collective Bargaining Agreement between the NBA and players.
[Meredith R. Miller]
February 14, 2006
Quotes: Predicting Student Success
Parenthesis: For generations we've used the oracular reading of oxen guts to predict our students’ careers, or lack thereof.
Hercules: Eeeyugh! Couldn't you use some sort of aptitude test instead?
Parenthesis: We tried that. The oxen guts were more accurate by 72 percent.
From: Hercules (TV Series)
Contracts and Philosophy at UVA
The Virginia Law Review is hosting a symposium this weekend with a contracts flavor. It’s called Contemporary Political Theory and Private Law and it’s scheduled for this Friday and Saturday, Feb. 17-18, 2006, at Slaughter Hall on the UVA campus. Among the speakers are Jody Kraus, Kevin Kordana, and Steven Walt (all of Virginia), Daniel Markovits (Yale), and Barbara Fried (Stanford).
Weekly Top 10
Three new papers join our Weekly Top 10 list this week, including an impressive fourth-place debut by a new piece from NYU's Oren Bar-Gill. Following are the top ten most-downloaded papers from the SSRN Journal of Contract and Commercial Law for the sixty days ending February 12, 2006. (Last week's ranking in parentheses.)
1 (1) Law and the Rise of the Firm, Henry Hansmann (Yale), Reinier Kraakman (Harvard) & Richard C. Squire (Yale).
2 (2) Contract as Statute, Stephen J. Choi (NYU) & G. Mitu Gulati (Georgetown).
3 (6) Choice, Consent, and Cycling: The Hidden Limitations of Consent, Leo Katz (Penn).
4 (-) Bundling and Consumer Misperception, Oren Bar-Gill (NYU) (left).
5 (7) Penalties and Optimality in Financial Contracts: Taking Stock, Michel A. Robe (American-Business), Eva-Maria Steiger (Humboldt-Business) & Pierre-Armand Michel (Liege-Management).
6 (7) Diversity of Contract Law and the European Internal Market, Jan M. Smits (Maastricht).
7 (9) A Bridge, a Tax Revolt, and the Struggle to Industrialize: The Story and Legacy of Rockingham County v. Luten Bridge Co., Barak D. Richman (Duke), Jordi Weinstock (Duke) & Jason Mehta (Harvard).
8 (-) Legal Infrastructure, Judicial Independence, and Economic Development, Daniel Klerman (Southern California).
9 (-) Courts and Contractual Innovation: A Preliminary Analysis, Mitchell Berlin & Yaron Leitner (Federal Reserve Bank of Philadelphia).
10 (10) The (CISG) Road Less Traveled: Case Comment on GreCon Dimter Inc. v. J.R. Normand Inc., Antonin I. Pribetic (Steinberg Morton Frymer LLP).
February 13, 2006
Rejoice and Be Glad!
Here's a bit of classroom humor from Gary Neustadter (Santa Clara):
I use Dove v. Rose Acre Farms, 434 N.E.2d 931 (Ct. App. Ind. 1982), to illustrate the principle that substantial performance cannot satisfy a condition. In that case, a law student worked for Rose Acre Farms (a big Indiana egg producer) during the summer. He and others were promised a large bonus for doing some construction work, provided that, among other things, they were never even a moment tardy and didn't miss any work on account of illness. He got strep throat the last two days of the 10-week project and was denied the bonus even though the project was completed on time. The court denied him relief for his failure to satisfy the condition.
Rose Acre has a nice website at: http://www.roseacre.com/default.html. If you scroll down on it a bit, you can find the comfort that Rose Acre might have offered the law student in lieu of the bonus: "This is the day which the Lord has made; Let us rejoice and be glad in it. Psalms 118 verse 24."
Seller Gets Its Terms in 2-207 Battle
A seller who wants to ensure that all its contracts incorporate its own terms can do so if it works hard enough at it. That’s the lesson of a recent decision by a federal district court in Pennsylvania.
In the case, British commodity broker Westbrook Resources had a series of four contracts with an American manufacturer, Globe, to supply manganese ore. Three contracts were on forms supplied by Westbrook, whose policy was to contract only on its own terms. On the fourth, Globe argued that an oral contract for sale of 22,000 metric tons of ore had been reached by January 6, 2005. After this date, the parties allegedly exchanged forms. Westbrook refused to sign a Globe form, and instead signed its own form and sent it to Globe. Globe refused to sign the Westbrook form. The parties subsequently performed, and Globe sued, claiming the ore was not of “acceptable size.” Westbrook moved to compel arbitration, based on a clause in its standard form requiring arbitration in the U.K.
Globe argued that there was an oral contract for the ore, and that the subsequent forms were “competing written confirmations of a prior oral agreement.” Under that theory, the arbitration clause would have been knocked out. District Judge Gary Lancaster disagreed. Noting the parties’ prior use of written agreements, he concluded that both parties had a practice of requiring contracts in writing. It seemed to him that Westbrook had, in fact, rejected Globe’s January 19 offer to sign a Globe form, and had sent its own form as an offer. Globe subsequently accepted the offer when it accepted the goods.
Globe Metallurgical v. Westbrook Resources, 2006 U.S. Dist. LEXIS 2307 (Jan. 23, 2006).
Today in History: Karl Llewellyn Dies
On this date, February 13, 1962, Karl Nickerson Llewellyn, principal architect of the Uniform Commercial Code, died at Chicago. In addition to his work in commercial law, Llewellyn had been the only person to have served as editor-in-chief of the Yale Law Review for three years, and the only American citizen to win the Iron Cross fighting for the Kaiser in World War I.
February 12, 2006
Today in History: Happy Birthday, Rog
On this date, February 12, 1900, Roger John Traynor was born at Park City, Utah. He earned his Ph.D. and J.D. from Cal-Berkeley in 1927, and spent his entire career working for the State of California, as a professor at Boalt Hall, as a state tax official (credited for introducing the vehicle registration fee, the state sales tax, the state income tax, the use tax, the state corporate income tax, and the state fuel tax), and from 1940-70 as a Justice and then Chief Justice (1964-70) of the California Supreme Court. In that latter position he authored such casebook staples as Drennan v. Star Paving and Pacific Gas & Electric Co. v. G. W. Thomas Drayage Co.