ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Tuesday, October 30, 2007

FCC Plans to Axe Exclusive Cable Service Contracts

OtvbelwederfrontFrom yesterday's NY Times:

Federal regulators plan to throw out exclusive cable television service contracts with apartment buildings and open up competition to phone companies, according to a published report.

The new rule, which could significantly lower cable prices for millions of subscribers who live in apartments, is expected to be approved Wednesday by the Federal Communciations Commission, The New York Times reported Monday, citing an interview with the agency's chairman.

Under FCC Chairman Kevin Martin's proposal, cable companies, such as Comcast Corp. and Time Warner Cable Inc., would no longer have exclusive deals with apartment buildings and other multiunit dwellings to provide cable TV to building residents, who usually have no other choice for such services.

Here's a link to the article.

[Meredith R. Miller]

October 30, 2007 in In the News | Permalink | TrackBack (0)

Thursday, October 25, 2007

Ted Nugent's Breach of Contract Claim

Reminiscent of the more recent Imus debacle, rocker and lover of hunting, Ted Nugent, has a breach of contract action floating around the Michigan state courts.  The suit arose in 2003 after Nugent "used racial slurs in reference to African-Americans and Asians" on a Denver, Colorado radio program.  Muskegon Summer Celebration (MSC) canceled a performance by Nugent, deciding that Nugent's comments did not reflect the spirit of its celebration and canceled his performance.  Nugent filed an action asserting libel and slander, breach of contract, detrimental reliance, unfair competition and unjust enrichment. 

The trial court granted MSC's motion for summary judgment on the libel and slander and detrimental reliance claims and granted a directed verdict to MSC on the unfair competition and unjust enrichment claims.  The jury returned a verdict in favor of Nugent on the breach of contract claim and awarded the $80,000 contract amount and an $20,000 for lost merchandise sales.  The trial court reduced the verdict by $20,000, figuring that, had Nugent played the concert, he would have owed his agent 25% of the contract amount.

The Michigan Court of Appeals affirmed.  On the breach of contract claim, the court addressed MSC's argument that no contract was formed.  MSC argued that it withdrew its offer for Mr. Nugent to perform before a final agreement was signed.  The Michigan appellate court held:

It is undisputed that various contract documents sent by [the parties' representatives] were never signed.  However, evidence established that the parties nevertheless formed a binding oral agreement.

A valid contract requires the following: 1) parties competent to contract, 2) a proper subject matter, 3) legal consideration, 4) mutuality of agreement, and 5) mutuality of assent. * * * Evidence established that [MSC's representative] called [Mr. Nugent's agent] to make an offer for Mr. Nugent to play on June 30, 2003 for $75,000.  After some negotiation, [MSC's representative] told [Mr. Nugent's agent] that the festival would pay Mr. Nugent $80,000, with a 50 percent deposit.  According to [Mr. Nugent's agent], he and [MSC's representative] agreed on those essential terms, [Mr. Nugent's agent] received approval from Mr. Nugent's manager, and Mr. Nugent was prepared to play on June 30, 2003.  Further, after this conversation occurred, MSC began to advertise that Mr. Nugent would be performing at the festival and it began to sell individual tickets for Mr. Nugent's concert.

Further evidence established that it is common for buyers and booking agents to reach oral agreements for artists to perform, without signed, formal contracts.  [Mr. Nugent's agent] confirmed that his occurred in his own business, entertainment lawyer Michael Novak testified that oral contracts are "the norm" in the music business, and Mr. Nugent's own manager testified that, though it is his job to sign Mr. Nugent's contracts, he rarely does so because signed contracts are generally not used.  Moreover, [MSC's representative] admitted that a percentage of his contracts for the Summer Celebration were not signed and that he would have expected Mr. Nugent to perform irrespective of an executed agreement.  Thus, plaintiffs presented sufficient evidence for the jury to decide whether Mr. Nugent and MSC reached a binding, oral agreement and the trial court correctly denied MSC's motion for summary disposition.

The Court also affirmed the reduction of the contract damages by 25%. 

Is there a lesson here?  Is there an enforceable clause (condition?) that MSC could have inserted in its agreement to avoid paying damages to an artist that uses racial slurs?  Perhaps something akin to a morals clause? 

[Meredith R. Miller]

October 25, 2007 in In the News | Permalink | TrackBack (0)

Monday, October 15, 2007

UConn Prof on "Leave of Absence" After Showing Offensive Film

Aa_2 Aab_4 Sometime contracts professor Robert Birmingham (left) and the University of Connecticut School of Law have mutually agreed that he’ll take a leave of absence for the rest of the semester, after he showed a "provocative" documentary in class. Birmingham used a clip from a film on prostitution, Really Really Pimpin’ in Da South, in his Remedies class. The clip featured an interview with "Sir Charles" Pipkins, the defendant in a RICO case that Birmingham’s class was studying.  But the film also apparently included footage of scantily-clad exotic dancers, and when Birmingham paused the tape, the picture froze on a close-up of a dancer's thong.  Some offended students apparently walked out of the class.

UConn dean Jeremy Paul -- who is apparently trying to find someone to take over the four classes Birmingham teaches this semester -- says that the issues involve balancing academic freedom with the need to foster "a welcoming, diverse and tolerant environment for students."  The Hartford Courant came out in an editorial against Birmingham's actions, but the best take came from an anonymous commentator, who wrote, apropos the thong, "He was just showing his law students a picture [of] where to screw people; they are going to be lawyers, right?"

[Frank Snyder]

October 15, 2007 in Law Schools | Permalink | TrackBack (0)

Weekly Top Ten

Ssrn Following are the most-downloaded new papers from the SSRN Journal of Contract and Commercial Law for the 60 days ending October 14, 2007.  (Last week's rank in parentheses.)

1 (1) Explaining the Spread of At-Will Employment as an Inter-Jurisdictional Race-to-the-Bottom of Employment Standards, Richard A. Bales (No. Kentucky).

2 (2) Anti-Social Contracts: The Contractual Governance of Online Communities, Joshua Fairfield (Indiana-Bloomington).

3 (3) Renting the Good Life, Jim Hawkins (Independent).

4 (4) Securitization and Its Discontents: The Dynamics of Financial Product Development, Kenneth C. Kettering (New York LS).

5 (5) Utility and Rights in Common Law Reasoning: Rebalancing Private Law Through Constitutionalization, Hugh Collins (London School of Economics).

6 (5) Morality, Social Norms and Rule of Law as Transaction Cost-Saving Devices: The Case of Ancient Athens, Anastassios Karayiannis (Piraeus) & Aristides N. Hatzis (Athens-Philosophy).

7 (9) Behavioral Law and Economics, Paternalism, and Consumer Contracts: An Empirical Perspective, Joshua D. Wright (Geo. Mason).

8 (7) A Study of Interest, John Y. Gotanda (Villanova).

9 (10) Nonbanks in the Payments System: Vertical Integration Issues, Nicholas Economides (NYU-Business).

10 (-) The Limited Autonomy of Private Law, Hanoch Dagan (Tel Aviv).

[Frank Snyder]

October 15, 2007 in Recent Scholarship | Permalink | TrackBack (0)

Friday, October 12, 2007

There Ought To Be a Law...

Arbitration is a creature of contract, and the Contracts course necessarily includes at least a few cases involving arbitration terms. But, pre-dispute arbitration could face its demise in many contexts. Senator Russ Feingold has proposed a bill called the Arbitration Fairness Act, which would invalidate pre-dispute arbitration agreements in employment, consumer and fanchise contracts and "dispute[s] arising under any statute intended to protect civil rights or to regulate contracts or transactions between parties of unequal bargaining power."

The proposed legislation contains the following findings:

(1) The Federal Arbitration Act (now enacted as chapter 1 of title 9 of the United States Code) was intended to apply to disputes between commercial entities of generally similar sophistication and bargaining power.

(2) A series of United States Supreme Court decisions have changed the meaning of the Act so that it now extends to disputes between parties of greatly disparate economic power, such as consumer disputes and employment disputes. As a result, a large and rapidly growing number of corporations are requiring millions of consumers and employees to give up their right to have disputes resolved by a judge or jury, and instead submit their claims to binding arbitration.

(3) Most consumers and employees have little or no meaningful option whether to submit their claims to arbitration. Few people realize, or understand the importance of the deliberately fine print that strips them of rights; and because entire industries are adopting these clauses, people increasingly have no choice but to accept them. They must often give up their rights as a condition of having a job, getting necessary medical care, buying a car, opening a bank account, getting a credit card, and the like. Often times, they are not even aware that they have given up their rights.

(4) Private arbitration companies are sometimes under great pressure to devise systems that favor the corporate repeat players who decide whether those companies will receive their lucrative business.

(5) Mandatory arbitration undermines the development of public law for civil rights and consumer rights, because there is no meaningful judicial review of arbitrators’ decisions. With the knowledge that their rulings will not be seriously examined by a court applying current law, arbitrators enjoy near complete freedom to ignore the law and even their own rules.

(6) Mandatory arbitration is a poor system for protecting civil rights and consumer rights because it is not transparent. While the American civil justice system features publicly accountable decision makers who generally issue written decisions that are widely available to the public, arbitration offers none of these features.

(7) Many corporations add to their arbitration clauses unfair provisions that deliberately tilt the systems against individuals, including provisions that strip individuals of substantive statutory rights, ban class actions, and force people to arbitrate their claims hundreds of miles from their homes. While some courts have been protective of individuals, too many courts have upheld even egregiously unfair mandatory arbitration clauses in deference to a supposed Federal policy favoring arbitration over the constitutional rights of individuals.

And, on the heals of this proposal, comes a 74-page report, titled "The Arbitration Trap," by a group called Public Citizen. The report exposes the troubling relationship between certain arbitration providers and the credit card industry, and concludes that pre-dispute arbitration is "a rigged game in which justice is dealt from a deck stacked against consumers."

Nevertheless, the near consensus of predictors is that the bill has no chance of passing (or even getting to the floors of the House or Senate). And, despite numerous academic writings that support these findings and the elimination of pre-dispute arbitration agreements in these contexts, there has been very little popular press coverage of the subject. The most mainstream press I have seen yet is this op-ed piece from Forbes, which, in light of credit card industry practices, encourages the passage of the Arbitration Fairness Act.

[Meredith R. Miller]

October 12, 2007 in In the News | Permalink | TrackBack (0)

Thursday, October 11, 2007

Teaching Assistants: Alan M. White

WhiteIf you are looking for a clear, concise, well-written review of rational choice theory as it relates to consumer contracts, as well as a critique of that theory from the perspective of behavioral economics, the rational choice is to read Behavior and Contract, written by my new colleague, Alan White (pictured at left).

Alan's key observation, it seems to me, is that while law and economics has incoporated many of the insights of behavioral scientists, "behavioral law and economics has clung stubbornly to goals of efficiency and autonomy."  (3)  In order to advance these goals, rational choice theorists, who have come to influence legislators and government agencies empowered to implement consumer protection laws, advocate deregulation, which, according to Alan, "produces significant consumer harm, exploitation and rent-seeking, and does not necessarily increse consumer welfare." (5)  Orthodox law and economics scholarship thus fails to achieve its stated goals and that failure, Alan urges, ought to cause us to question "the impoverished norm of efficiency."  (6) 

This is all quite provocative stuff, and there are of course articles on the other side (for example, this one).  But the great advantage of Alan's piece (and the reason why I recommend it as a teaching assistant) is that he clearly and succinctly: (1) summarizes the rational choice model; (2) introduces the major insights from behavioral law and economics that undermine the rational choice model; and (3) reviews various attempts by both scholars and regulators to operationalize the insights of behavioral law and economics so as to provide better consumer protections in the contractual realm.  Alan provides a menu of options and acknolwedges that none fully addresses the various issues raised by the behavioral sciences.  Ultimately, Alan would replace the norm of efficiency with a trio of utliitarian sufficiency, autonomy and equity. (50-51)  The competing norms complicate the task of consumer regulation, as Alan's model is not nearly as parsimonious as the rational choice model.  But Alan is willing to trade parsimony for a model that more accurately reflects the circumstances in which consumers make choices.  He advocates a return to regulation and rejects accusations of paternalism: "Consumer's choices will be framed either by sellers or by legal rules.  Allowing the consumers the freedom and autonomy to be manipulated and exploited does not promote autonomy." (50)

[Jeremy Telman]

October 11, 2007 in Recent Scholarship, Teaching | Permalink | Comments (0) | TrackBack (0)

Wednesday, October 10, 2007

In the News: October 10, 2007

Aa_2 The Atlanta Falcons can make former star quarterback Michael Vick return some $20 million in signing bonuses, an arbitrator rules.  Vick was convicted of conspiracy in connection with dog-fighting, and may never play again.

Aluminum can maker Ball Corp. says it will pay $70 million to settle a contract dispute with Miller Brewing Co., although it's not clear what the breach was.

In India, ten lakh tonnes (about 2 million U.S. tons) of rice already under contract for export are in limbo after the Cabinet voted to ban shipments of non-basmati rice from the country.

The former basketball coach at Ball State University has lost his claim for $150,000 in contract damages he claims he suffered when he was reassigned from his coaching job to on in university advancement.

Meanwhile, a Baton Rouge jury is preparing to hear the contract and discrimination claims brought by a former football coach at Louisiana-Lafayette, who says he was fired because he was black.

Continue reading

October 10, 2007 in In the News | Permalink | TrackBack (0)

Bales on Employment at Will

Aa Although it's been at the top of our weekly charts for a few weeks now, some of us have just recently got around to checking out the new paper by Richard Bales (No. Kentucky), Explaining the Spread of At-Will Employment as an Inter-Jurisdictional Race-to-the-Bottom of Employment Standards, forthcoming in the Tennessee Law Review.

One of the problems in explaining the growth of at-will employment in 19th century America is that it originally sprang into existence not in the industrialized states of the North, where factory-owners were increasingly viewing workers as replaceable parts to hire and fire as they chose, but in the least industrialized states.  It was the states of the South and West which were early adopters, while the big industrial states like New York and Pennsylvania came much later.  This fact raises problems for what is perhaps the most widely held explanation for at-will employment, which is that it was a judge-made rule to benefit capitalist businesses at the expense of workers.

But Bales offers a different and ingenious take on the subject.  True, he said, it wasn't the industrialists of the Northeast who pushed the rule through.  (They presumably lacked the political power in the industrialized states to get their own judges to adopt favorable rules.)  But the point of the new rule was still to benefit businesses that were increasing in size and scope.  Courts in Southern and Western states, he theorizes, adopted the rule to attract industry by offering better rules for the capitalists than they were already getting in New York and Pennsylvania.  It was this competition, he argues, that ultimately led the industrial states to go along with the trend.  It's a brief but interesting read.  Here's the abstract:

The at-will employment rule is often attributed to Horace Gay Wood, who described the rule in an 1877 treatise. Over the next forty years, the rule was judicially adopted in most American states. How and why the rule spread, however, has been the subject of considerable academic debate.

This essay argues that the underindustrialized states first adopting the at-will rule likely did so as a means of attracting capital. In any event, and more importantly, this essay argues that once the first underindustrialized states adopted the rule, other underindustrialized states would have been compelled to adopt the rule to remain economically competitive with the early-adopters, and industrialized states would have been compelled to adopt the rule to maintain their competitive advantage in the labor market. The adoption of the at-will rule by a handful of underindustrialized states, therefore, precipitated an inter-jurisdictional race-to-the-bottom in employment standards, culminating in the universal adoption of the at-will rule.

Though the focus of this essay is on labor market conditions that existed as the United States was transitioning from a local to a national economy, the implications resonate today as the United States transitions from a national to an international economy, and attempts to avoid a competitive "race to the bottom" with developing countries that are using low wages and un- or under-regulated working conditions to gain an advantage in the global labor market.

[Frank Snyder]

October 10, 2007 in Recent Scholarship | Permalink | TrackBack (0)

Seinfeld on Contractual Liability

I think the only reason we go to the dry cleaner is so I can say to the dry cleaner, "Well, it's ruined."  And of course, the dry cleaner can respond, "It’s not our fault.  We’re not responsible.  We just ruin the clothes. That ends our legal obligation."

                       Seinfeld "The Stock Tip," June 21, 1990.

October 10, 2007 in Film Clips | Permalink | TrackBack (0)

Tuesday, October 9, 2007

In the News: October 9, 2007

R&B singer (and former paralegal) Ginuwine has filed a $4 million contract and fraud action against King Music Group, alleging he was duped into signing the agreement and that the company doesn't actually exist.

Aa_5 The manufacturer of the Rusty line of "surf inspired clothes" is suing the trademark owner, claiming its license to produce the stuff was improperly terminated.

The Ottawa (Ont.) city council is threatening a lawsuit to force the minor-league Ottawa Lynx baseball team to give up a proposed move to Allentown (Pa.), claiming its contract requires the Lynx to play home games in the Capital City until 2009.

Britain's House of Lords is hearing arguments this week on a case with major e-commerce ramifications: are credit-card issuers in Britain required to refund charges to customers who are dissatisfied with the goods they buy using those cards, even when those sales occur outside the U.K.?

Rap mogul Sean Combs is being sued for $19 million by a man who says that Combs didn't pay him the agreed-on license fees for music cut by the late Notorious B.I.G.  Combs reportedly has said that the plaintiff was involved in Biggie's still-unsolved 1997 murder.

George Washington University may be headed to trial in a $200,000 dispute with a software firm, after mediation failed to reach an agreement.

October 9, 2007 in In the News | Permalink | TrackBack (0)

Weekly Law School Rankings

Aa_4 In the world of law school rankings, somebody's lemon is always somebody else's lemonade.  USC's Gould School of Law took a tumble, which means that for the first time in just about forever Cal-Berkeley has a higher-rated law school than does Southern Cal.  Gould's drop was good news for the Paul M. Hebert Law Center at Louisiana State, which is now number one and is making Chancellor Jack Weiss (left) look pretty happy.

Three schools join the Top 20, while the folks at Missouri-Columbia have their highest ranking (10) since the invention of the Gregorian calendar.  All rankings based on ContractsProf's proprietary secret but very exact ratings methodology.  Last week's rank in parentheses.

1 (2) LSU (Hebert)
2 (3) Cal-Berkeley (Boalt)
3 (4) Ohio State (Moritz)
4 (6) Boston College
5 (9) Oklahoma
6 (1) Southern California (Gould)
7 (11) West Virginia
8 (12) Oregon
9 (13) South Carolina
10 (15) Missouri-Columbia
11 (17) Arizona State (O’Connor)
12 (8) Florida (Levin)
13 (14) Hawai'i (Richardson)
14 (18) Cincinnati
15 (5) Wisconsin
16 (7) Kentucky
17 (-) Illinois
18 (-) Kansas
19 (-) Florida State
20 (16) Texas

Dropped out of Top 20:  Georgia, Nebraska, Miami

[Frank Snyder]

October 9, 2007 in Law Schools | Permalink | TrackBack (0)

A Funny Thing Happened on the Way to the Parthenon

Aa_3 The law on the books, as we are fond of telling our students, is not always the same as the law in action.  And the law in action is often only a small slice of the larger commercial environment.  Even where a party might save money by breaching a contract, that party will usually perform -- not because it is worried about being sued, but rather because performing is the "right" thing to do.  Those who have tried to install modern contract law in environments where social norms don't encourage the performance of promises have found that all the statutes and court decisions in the world can't create a hospitable contracting environment.

So how do you get a hospitable contracting environment?  In a new essay, Morality, Social Norms and Rule of Law as Transaction Cost-Saving Devices: The Case of Ancient Athens, scholars Anastassios Karayiannis (Piraeus) and Aristides N. Hatzis (Athens) examine how the Greeks came to develop one of the earliest and most successful systems of the ancient world.  Here's the abstract:

The importance of the institutional framework for economic development is widely accepted today and it is duly stressed in the economic literature. The protection of property rights, the enforcement of contracts and an efficient legal system are the pillars of the contemporary rule of law. However, formal institutions cannot function without being internalized by the citizens and without the backing of social norms. Morality and social norms are the major elements of the informal institutional structure, the social capital, which is also critical for social welfare and economic development. In this paper we will discuss both the formal and the informal institutional framework of Ancient Athens, which was a free market society with economic problems similar to contemporary market societies. Athenians developed a highly sophisticated legal framework for the protection of private property, the enforcement of contracts and the efficient resolution of disputes. Such an institutional framework functioned effectively, cultivating trust and protecting the security of transactions. This entire system however was based on social norms such as reciprocity, the value of reputation and business ethics. Conformity to social norms as well as moral behavior was fostered by social-sanction mechanisms (such as stigma) and moral education. The Athenian example is a further proof of the importance of morality and social norms as transaction cost-saving devices even in quite sophisticated legal systems. Their absence or decline leads inevitably to the need for more regulation, clear-cut rules, less judicial discretionary power and more litigation. Athenian law was pioneering in the development of rules and institutional mechanisms suitable for the reduction of transaction costs, many of them surviving in the most complex contemporary legal systems.

[Frank Snyder]

October 9, 2007 in Recent Scholarship | Permalink | TrackBack (0)

Monday, October 8, 2007

In the News: October 8, 2007

Aa Singer Bruce Springsteen and his wife are being sued for breach of contract, after they allegedly backed out of a deal to buy am $850,000 horse for their daughter.

The United Auto Workers gave Chrysler Corp. a 72-hour strike notice after negotiations between the car company and the union on a new contract seemed to stall.

Meanwhile, the lights may not be all that bright on Broadway, where a producers and union stagehands are locked in discussions about a new contract; producers have threatened a lockout in their attempt to cut back the required number of hands at each show.

Kazakhstan had apparently decided not to try to rework its contract with Italy's oil giant Eni ti develop the Kashhagan oil field.  The project has been hit with a number of delays.

A bad harvest means that hundreds of Australian grain farmers aren't going to be able to come up with the grain their contracts require them to deliver to dealers this year; they're mulling whether to try legal action or seek to renegotiate.

Speaking of Australia, a new survey says that 46 percent of companies have had a contract dispute with their IT providers.

[Frank Snyder]

October 8, 2007 in In the News | Permalink | TrackBack (0)

Weekly Top Ten

Ssrn Major turnover in the rankings this week, with a new Number One and six new entries on the charts. Following are the Top 10 most-downloaded new papers from the SSRN Journal of Contract and Commercial Law for the 90 days ending October 7, 2008.  (Last week's rank in parentheses.)

1 (2) Explaining the Spread of At-Will Employment as an Inter-Jurisdictional Race-to-the-Bottom of Employment Standards, Richard A. Bales (No. Kentucky).

2 (4) Anti-Social Contracts: The Contractual Governance of Online Communities, Joshua Fairfield (Indiana-Bloomington).

3 (5) Renting the Good Life, Jim Hawkins (Independent).

4 (-) Securitization and Its Discontents: The Dynamics of Financial Product Development, Kenneth C. Kettering (New York LS).

5-tie (10) Morality, Social Norms and Rule of Law as Transaction Cost-Saving Devices: The Case of Ancient Athens, Anastassios Karayiannis (Piraeus) & Aristides N. Hatzis (Athens-Philosophy).

5-tie (-) Utility and Rights in Common Law Reasoning: Rebalancing Private Law Through Constitutionalization, Hugh Collins (London School of Economics).

7 (-) A Study of Interest, John Y. Gotanda (Villanova).

8 (-) Arbitral Jurisdiction and the Dimensions of Consent, Alan Scott Rau (Texas).

9 (-) Behavioral Law and Economics, Paternalism, and Consumer Contracts: An Empirical Perspective, Joshua D. Wright (Geo. Mason).

10 (-) Nonbanks in the Payments System: Vertical Integration Issues, Nicholas Economides (NYU-Business).

[Frank Snyder]

October 8, 2007 in Recent Scholarship | Permalink | TrackBack (0)

Third Party Beneficiaries: Classic Hypo, Different Ansewr

Uk_flag_3 The English case of Avraamides v Colwill, [2006] EWCA Civ 1533, decided last year by the Court of Appeal, concerned an old chestnut in the context of third-party contractual rights:  If I buy a business and promise to pay off its liabilities, can its creditors claim as third party beneficiaries?  (Note that, however hackneyed this question may be in the U.S. context, it's new in England, where our anti-privity legislation only dates from 1999).

Put briefly, in Avraamides, A signs up Corporation B to reconstruct his bathroom; B botches the work and is liable to AB then sells the business to C, C agreeing (1) "to settle the current liabilities of the company" and (2) "to complete outstanding customer orders taking into account any deposits paid by customers as at 31 March 2003, and to pay in the normal course of time any liabilities properly incurred by the company as at 31 March 2003."  B being judgment-proof, A sues C as third-party beneficiary.

Held, the suit fails -- not on the basis of any sophisticated analysis, but simply on the basis of the wording of our anti-privity legislation (i.e. the Contracts (Rights of Third Parties) Act 1999).  This says in § 1(3):

The third party must be expressly identified in the contract by name, as a member of a class or as answering a particular description but need not be in existence when the contract is entered into.

Here, says the court, there's no express naming of the third party, and the word "express" means you can't infer who it might be from the wording or intent of the contract as a whole.

This shows the problems of legislating in a nation of strict-constructionists.  Had C agreed to "pay the current creditors of the company," A would presumably have won.  As it is, C must be thanking his lucky stars his lawyers chose to say "settle the current liabilities of the company," even though no doubt the lawyers thought it made no odds which way they put it.

[Andrew Tettenborn (Exteter) sent this quite a while back, but it somehow got lost, perhaps while Frank Snyder was laid up.  We though it was still an interesting case even though it's not really "recent."]

October 8, 2007 in Recent Cases | Permalink | TrackBack (0)

Wednesday, October 3, 2007

Weekly Law School Rankings

Aa_2 The race is getting closer, but Southern Cal's Gould School of Law continues to keep a slim lead over the Paul M. Hebert Law Center of Louisiana State in this week's rankings of the top law schools in the U.S.  It was a week of upheaval marked by some big jumps and some dizzying drops.  Penn State (Dickinson) and Alabama drop out of this week's Top 20.  Schools are, as always, ranked by ContractsProf's proprietary computer ranking software; last week's rank in parentheses.  (Right: Cal-Berkeley Dean Christopher Edley, Jr., whose school moved all the way to third this week.) 

1 (1) Southern California (Gould)
2 (2) LSU (Hebert)
3 (7) Cal-Berkeley (Boalt)
4 (8) Ohio State (Moritz)
5 (9) Wisconsin
6 (11) Boston College
7 (12) Kentucky
8 (3) Florida (Levin)
9 (4) Oklahoma
10 (13) Georgia
11 (5) West Virginia
12 (10) Oregon
13 (15) South Carolina
14 (14) Hawai'i (Richardson)
15 (16) Missouri-Columbia
16 (6) Texas
17 (20) Arizona State (O’Connor)
18 (-) Cincinnati
19 (19) Nebraska
20 (-) Miami

[Frank Snyder]

October 3, 2007 in Law Schools | Permalink | TrackBack (0)

Adjunct Professors

They’re in touch with the latest developments in law and practice. They’re dedicated to teaching and mentoring lawyers. They get very little money and less respect, but they routinely get high ratings from the students who sit in their classes.

Who are they?  Adjuncts, of course.  No law school can get by without them, and schools often tout their skills to students, who for some reason tend to like to take classes from those who are actually practicing what they teach.  Yet they are all-but-invisible outside their own classrooms, and many tenure-track faculty have no idea who they are when they pass in the halls.

It takes a special kind of person to do that kind of work, and part of the ever-growing Law Professor Blogs Network empire is Adjunct Law BlogThe lead editor is veteran adjunct Mitch Rubinstein (St. John’s & New York LS), who’s also Senior Counsel to the New York State United Teachers.  His co-editors are full-timers Eric Lustig (New England) and Gail Levin Richmond (Nova Southeastern).

Rubinstein’s specialty is employment law, so the blog occasionally has some things of interest to contract law types who aren't adjuncts, like this one about the employee fired for working for someone else while out on Family Medical Leave Act status.

[Frank Snyder]

October 3, 2007 in Law Schools | Permalink | TrackBack (0)

More on Reed v. UND

Aab_38 Those of you who use the Epstein-Markell-Ponoroff contract law casebook teach the case of Reed v. University of North Dakota, 589 N.W.2d 880 (N.D. 1999).  You might be interested in some background information.

Reed is a sad case, in which a young UND hockey player was required by his coaches to run in a 10-kilometer charity race as part of his conditioning program.  About 200 yards short of the finish line, he collapsed from dehydration.  Rushed to the emergency room, he eventually needed one kidney and two liver transplants.  He sued both UND and the North Dakota Association for the Disabled, the group that had sponsored the event.  His suit against UND was knocked out on other grounds, and his suit against NDAD had to overcome the fact that he had signed a liability release before the race.  The player argued it was unenforceable for lack of consideration.  No, said the court, there was consideration of the release, and therefore it was enforceable.

The hockey player was Jace Reed (left).  Reed had been a high school star at Grand Rapids High School in Minnesota.  In 1989 he was taken in the fifth round of the National Hockey League draft (86th overall) by the New York Islanders -- ahead of future NHL stalwarts like Pavel Bure (Canucks), Aaron Miller (Nordiques), and Dallas Drake (Red Wings).  Instead of signing a pro contract, Reed opted to hone his skills at UND, a perennial hockey power that has won seven NCAA championships, three in the ten years before Reed joined.  At UND, Reed played in 23 games his first two seasons, and was preparing to battle for a starting spot in his third year.

That ended with his injuries.  During his hospitalization, the "big, tough defenseman" nearly died and dropped from 215 pounds to 145.  Doctors were not sure he would even be able to return to school, let alone play sports.  His hockey days were over.  Ultimately, he was able to return to UND in the fall of 1992.  The school's "Big Green Club" of athletic boosters raised the money to pay the remainder of his school expenses.

[Frank Snyder]

October 3, 2007 in Famous Cases | Permalink | TrackBack (0)

Contracts Spotlight: Eniola Akindemowo

Spotlight_2_6_4_12_2Eniola Akindemowo (Thomas Jefferson)

213bios1photo Ph.D., University of London (Queen Mary)

LL.M, University of London (University College)

LL.B, University of Ife

Grad. Cert. (Higher Education), Monash University

Professor Akindemowo joined the faculty of the Thomas Jefferson School of Law in San Diego in 2006.  She teaches Contracts and E-Commerce.

Professor Akindemowo brings 17 years of teaching th Thomas Jefferson. Immediately before joining Thomas Jefferson, she was a faculty member of the Monash University Faculty of Law in Melbourne Australia, where she was also an Associate Director of the Center for Law in the Digital Economy (CLiDE).  She has been the recipient of several competitive research and travel grants.

She enjoys the fact that contracts are deeply rooted in everyday life, and that there is an abundance of material/examples - regular news clips, music, movies, common daily experiences - to use as teaching aids to enliven the classroom. Professor Akindemowo has a particular interest in comparative contractual law, given that she has taught Contracts from the perspectives of the US legal system, the English legal system, and the Australian legal system. Her other areas of interest and expertise are Information Technology Law, Internet Contracting, Payment Systems and E-Commerce.

Professor Akindemowo is the author of several articles that have been published in both student-edited, and peer-reviewed journals. She is the author of the first substantive book on IT law to have been published in Australia, and co-author of another on E-Commerce and the Law.

[The be the next feature in the Contracts Prof Blog spotlight, send a note to Meredith Miller.]

October 3, 2007 in Contracts Profs Weekly Spotlight | Permalink | TrackBack (0)

Tuesday, October 2, 2007

Teaching Assistants: Geoffrey R. Watson

WatsonWe broke some hearts in last week's post on Kirksey v. Kirksey, as several generations of contracts profs and students were forced to part with their fantasies regarding Isaac and Antillico (Angelico) Kirksey.  Well, this week we have very good news.  Levi Wyman lived!  And his father may even have loved him!!  Or so says Geoffrey R. Watson (left) in In the Tribunal of Conscience: Mills v. Wyman Reconsidered, 71 Tulane L. Rev. 1749 (1997).

Like Kirksey, Mills v. Wyman is a familiar case, involving a Good Samaritan (Mills) who cared for the dying Levi Wyman, estranged son of Seth Wyman.  Mills wrote to Seth to inform him of his son's condition and to invite Seth to visit his son.  According to the case, Seth replied that he could not come but would cover any costs Mills incurred in caring for Levi.  Levi Wyman died, despite Mills' ministrations, and Seth's promise was not kept.  Mills sued to enforce the promise.  The Supreme Judicial Court of Massachusetts concluded that Seth Wyman had a moral obligation to pay Mills but no legal one and ruled for Wyman.

Watson finds fault with everything about the Massachusetts' court's opinion.  Seth Wyman never promised to pay Mills, and Levi Wyman did not die until many years later.  Moreover, if the facts were as the court construed them, Watson thinks the "court missed an opportunity to shape a more sensible doctrine of promissory liability."  Id. at 1752.  Unlike those killjoys, Casto and Ricks, who sucked all the joy and mystery out of Kirksey, Watson leaves some of the mysteries of Mills unresolved.  For example, Watson's exhaustive historical research did not enable him to explain why the court treated Levi Wyman as a corpse in 1825 when as late as 1829 he was engaged in spending and wasting "his estate by excessive drinking and idleness."  Id. at 1757.  We do learn some dramatic details of Levi's illness, however.  For example, his symptoms included bouts of delirium during which "he leaped out of a chamber window to the immminent hazard of his life" and for which he was treated by a "prominent Hartford physician" with "1 gallon spirits" and pills.  Perhaps the Massachusetts court simply indulged the safe assumption that in the 1820s medical treatment for an illness such as Levi's was little more than an unpleasant prelude to death.

Continue reading

October 2, 2007 in Commentary, Famous Cases, Recent Scholarship, Teaching | Permalink | Comments (1) | TrackBack (0)