Monday, March 31, 2008
The Metropolitan News-Enterprise is fast becoming one of my favorite sources of contract law news. Last week, the News-Enterprise supplied the basis for a post about chutzpah. Today, the News- Enterprise reports on a fascinating case involving a missing cadaver.
In March 1996, Isol Cartheuser entered into an agreement with the University of California, Irvine (UCI) to donate her body to UCI's College of Medicine after her death. Ms. Cartheuser died later that year. Two years later, Ms. Cartheuser's grandson and adopted son, Butch Vanderpool, and his wife contacted UCI to learn when it would return Ms. Cartheuser's remains. They received no reply, and months later they learned of news stories about UCI's failure to keep track of donated bodies and unauthorized sales of body parts.
UCI eventually confirmed receipt of the body but explained that it had no information regarding the disposing of the cremated ashes. The Vanderpools and four other families then sued UCI alleging breach of contract and other causes of action. The breach of contract claim was apparently based on the Vanderpools' assertion that Ms. Cartheuser had agreed to donate her body on condition that her remains be returned to her family after UCI was done with it. California's Fourth District Court of Appeal rejected the Vanderpools' claim, finding that there was no such unambiguous promise, nor was it clear to whom the body was to be returned if there was such a promise.
Vanderpool v. Regents of the University of California can be found here (decided March 28th).
Friday, March 28, 2008
I have been very impressed since (re)joining the teaching profession by the amount of time and energy that law professors devote to pedagogical concerns. This devotion to teaching has been on display recently on the contracts profs listserv, based on a discussion initiated by Villanova's Chaim Saiman (left). Professor Saiman asked the group if and how contracts profs incorporate transactionally oriented skills into final examinations. The result was a broad-ranging and passionate discussion that could not possibly be summarized in this space. Or so one would think. Nonetheless, the most recent post on the thread attempts to do so. It comes from the thread's initiator, Professor Saiman, who has given me permission to post an edited version here. Summarizing the discussion and adding his own musings, Saiman writes:
Initially the question was a very limited one about test design. . . . The consensus from the list (which I agree with) appears to be as follows:
1. It would be a very hard idea to have students draft provisions free-formed. They lack practice doing this, and it would advantage students with a business background. Moreover, the exercise is a bit sterile unless there is another party pushing back on the provisions, and I for one can't figure out a way to do this on a standard law school exam.
2. A more promising idea, thought not without its shortfalls, would be to describe some background and negotiations, and then have the "issue spotter" take the form of drafting a memo to the client commenting on contractual language that I would provide on the exam. The goal would be to test if they can see what problems / risk this language might raise down the road and to see if they can identify whether the written contract conforms to what the client thinks he is signing. I can imagine this method effectively testing what Farnsworth calls "the law of the contract," e.g., interpretation, parole evidence, conditions, performance and breach, implied terms, default rules and repudiation.
. . .
Invariably, this question about test design became a question of what do we teach in contract class (and law school) and why. This is a large question worthy of much thought, and here at Villanova we are in the midst of undertaking a curriculum review so these issues are on our minds.
FWIW, my own view of the topic . . .
Thursday, March 27, 2008
While many contracts scholars were busy discussing Medellin and the CISG, the Smashing Pumpkins were busy suing their former record label Virgin Records for breach of contract. The band is apparently peeved that the label is using its name and music to market Pepsi Points (remember those, Leonard?) The band claims that the use of their likeness in the promotional campaign extends beyond Virgin's contractual rights and threatens its artistic integrity. That's right, you heard it here first, contract law is making the world safe for artistic integrity.
[Meredith R. Miller]
Wednesday, March 26, 2008
Apologies to those of you who are getting tired of the treaties-as-contracts theme,but once more unto the breach! We have had a couple of recent posts, here and here, about the danger that its international partners will be less willing to enter into agreements with the United States because of recent trends in U.S. law, and today there are new developments on this topic, although this is hardly news.
Our friends over at the Consumer Law and Policy blog have a post today on a New York Times story about the refusal of an Italian court to enforce a judgment against an Italian motorcycle helmet manufacturer because "a peculiarity of American law — punitive damages — was so offensive to Italian notions of justice that it would not enforce the Alabama judgment."
One might assume that some sort of international agreement would be in place that would reqiure foreign courts to enforce judgments of U.S. courts. According to the U.S. Department of State, no such agreements are in place and here's why:
Although there are many reasons for the absence of such agreements, a principal stumbling block appears to be the perception of many foreign states that U.S. money judgments are excessive according to their notions of liability.
The University of Michigan's Bruce Frier has raised the following interesting question in the aftermath of the Supreme Court's decision in Medellin v. Texas (already mentioned on this blog here) yesterday:
Does anyone know whether the CISG is among the treaties whose enforceability within the United States is endangered by today's Supreme Court decision?
I'm not sure anyone knows, but two Contracts Profs have ventured opinions and given me permission to post them here.
University of Maryland's Michael Van Alstine writes:
The CISG should satisfy even the Court's (misguided and historically unfounded) heightened requirement for self-execution. In his message to the Senate in 1983, President Reagan expressly stated the premise that the CISG would be self-executing upon Senate consent and later ratification. See Message from the President of the United States to the Senate Transmitting the United Nations Convention on Contracts for the International Sale of Goods, Sept. 21, 1983, S. Treaty Doc. No. 98-9 (1983) ("The Convention is subject to ratification by signatory States (Article 91(2)), but is self-executing and this requires no federal implementing legislation to come into force throughout the Untied States").
Seton Hall's Michael Zimmer is unpersuaded:
Given that the Court said the Treaty must explicitly include a provision that it is self-executing, I am not sure that, without more, President Reagan's statement is any better than President Bush's statement.
One note of clarification might be helpful for our readers. Because the CISG is a treaty, under the Supremacy Clause, it is binding law for international contracts for the sale of goods, provided that the parties to the contract are nationals of signatory states. The parties might clarify that they intend to be bound by the CISG or by the UCC, and if they do so, this issue would not arise, because parties can freely contract around the CISG or free to choose to be bound by it. The issue would only arise if the parties do not specify which law governs and at least one party tries to argue that U.S. law relating to the sale of goods rather than the CISG should govern.
The Blog would welcome additional thoughts.
Tuesday, March 25, 2008
The U.S. Supreme Court today decided Medellin v. Texas. Links to the opinion as well as extended scholarly discussion of the case can be found, for example, on Opinio Juris, here, and on SCOTUSblog, here, here and here. The crucial question in the case is whether the International Court of Justice's 2004 ruling in Mexico v. U.S. (Avena) requires implementation by state courts (in this case Texas courts) where the President has issued a memorandum directing state courts to implement the decision.
In Avena, the ICJ found that the U.S. had violated its obligations under Article 36 of the Vienna Convention on Consular Relations by failing to advise foreign nationals who are criminal suspects of their right to consular notification and consultation. The ICJ suggested that the appropriate remedy was a case-by-case review and reconsideration to determine whether the foreign nationals had suffered prejudice because they were denied their right of consular notification and consultation. Medellin, who was arrested, convicted and sentenced to death in Texas without being informed of his Article 36 rights, is one of the criminal defendants potentially affected by the rulling. Texas has taken the position that the ICJ ruling cannot override state procedural rules limiting defendants' rights to file successive habeas petitions and that the President lacks constitutional authority to require state courts to comply with a decision of the ICJ.
In an opinion authored by Chief Justice Roberts, the U.S. Court ruled 6-3 in favor of Texas. Justice Roberts first noted that the ICJ statute is not a self-executing treaty and that Congress has taken no action to make it so. Article 94 of the U.N. Charter, under which each state undertakes to comply with decisions of the ICJ, does not mean that there are to be domestic remedies in case of non-compliance. The Chief Justice also found no authorization, either from Congress or in the Constitution, empowering the President to direct state courts to implement a decision of the ICJ.
So, how does this relate to contracts? Well, first, there is some overlap between this ruling and a previous post about how recent developments in U.S. doctrine are creating new obstacles for parties considering entering into agreements with the U.S. The majority's expansive view of the doctrine of non-self-executing treaties leaves the U.S. (or in this case state governments) free to refuse to abide by the U.S.'s international obligations. As Justice Breyer's dissenting opinion makes clear, there are strong arguments suggesting that the purpose of the Supremacy Clause was to create a presumption that treaties are self-executing.
Second, contracts scholars are already discussing the ramifications of this opinion with respect to the Convention on the International Sale of Goods. If Article 94 of the U.N. Charter does not obligage the U.S. to implement decisions of the ICJ by enforcing them domestically, could there be a problem if, for example, state courts were to decide that the CISG is not binding on them?
The Medellin opinion is long and I just gave it a quick read. I will be grateful to anyone who can provide additional thoughts on the opinion and/or corrections to my initial chracterization of it. I also welcome thoughts on the CISG issue.
Our faculty, like the faculty at many law schools, is engrossed in the Carnegie report on legal education. Meanwhile, the contracts law professors listserv is bubbling with interesting ideas about integrating practical drafting and transactional skills training into the first-year contracts curriculum. The result is a doubled heightening of my awareness of my own inadequacies as a contracts professor. Oh well.
As long as I'm wallowing . . . . I came across Eric Goldman's recent publication "Integrating Contract Drafting Skills and Doctrine." It's short enough that even I can read it. Here's the abstract:
This Essay is based on my remarks at the "Teaching Writing and Teaching Doctrine: A Symbiotic Relationship?" conference at Brooklyn Law School, February 2006. The Essay discusses the benefits and challenges of integrating the teaching of contract drafting skills and doctrine. The Essay then discusses some ways I have accomplished this integration.
More than 30 experts from around the world will converge in Houston on May 23rd and 24th, 2008 to discuss issues of importance to any comsumer law professor at a conference entitled "Teaching Consumer Law -- The Who, What, Where, Why, When and How."
The conference will look at issues such as: what materials should be used in teaching consumer law; alternative teaching methods; new developments in consumer law; innovative ways to look at traditional consumer problems; global approaches to consumer regulation; and how consumers can collect attorneys fees.
This conference comes with a special bonus: conference participants are invited to watch the Houston Astros play the Philadelphia Phillies. Information and a registration form are available here or you can call Professor Richard Alderman at 713-743-2165.
Monday, March 24, 2008
As the WSJ Law Blog recounts, today newspapers are reporting that the JP Morgan and Bear Stearns deal is being renegotiated and, in addition to shareholder disapproval, this may be due to contract "mistakes." "Mistakes" apparently include an inadvertently included sentence. What do you expect when a 40-page merger agreement is drafted by sleep-deprived lawyers (seemingly) over a weekend?
[Meredith R. Miller]
Sunday, March 23, 2008
The Metropolitan News-Enterprise reports on a charming little case called Shalant v. Smith that was recently affirmed by the California Court of Appeals, 2nd District.
In 1998, Stuart Smith retained Joseph L. Shalant for $5000 to represent him in a malpractice action. Shalant filed claims against two physicians on Smith's behalf and eventually informed Smith that he had done so. Four days before Smith was to be deposed in the action, Shalant demanded a non-refundable $25,000 fee plus $10,000 in costs and threatened to discontinue the representation if Smith did not pay. Smith paid. Some time later, Smith fired Shalant after Shalant shouted at him in a telephone conversation. Smith demanded a return of the $25,000 retainer on the ground that it violated California's Medical Injury Compensation Reform Act (MICRA). Shalant refused.
In 2002, having retained new counsel, Richard Booth, Smith was able to settle his malpractice claim for $500,000. Shalant claimed entitlement to a part of that recovery based on quantum meruit, but Smith and Booth refused. Meanwhile, the State Bar Association was investigating Shalant for having entered into an illegal fee agreement with Smith. Indeed, the State Bar Court found that the fee agreement violated MICRA and was the product of abusive conduct by Shalant constituting "a coercive act involving moral turpitude." Since Shalant had been disciplined on four previous occasions, he was disbarred as a result of this conduct. Shalant refused to return the improper $25,000 fee so the State Bar reimbursed Smith. Happy ending, no?
No. In 2006, Shalant sued Smith and Booth for quantum meruit, claiming entitlement to 85% of the appropriate MICRA fee that Booth had received. The case was dismissed because the statute of limitations for quantum meruit claims had lapsed. Shalant amended his complaint to add claims for breach of contract by both Smith and Booth and alleging that Booth was unjustly enriched. The California Court of Appeal this week affirmed the dismissal of that amended complaint. Shalant was not in privity with Booth and thus could not sue him for breach of contract. Shalant was in privity with Smith, but since a client has a right to discharge his attorney, Shalant's only possible recovery would have been in quantum meruit. However, any possible quantum meruit claim, the court found, was still barred by the statute of limitations, as was Shalant's unjust enrichment claim.
The full case can be downloaded here. The opinion issued on March 19, 2008.
Saturday, March 22, 2008
Although I teach contracts and contribute to this blog, I am not a contracts scholar. My main research interests lie at the intersection of U.S. constitutional law and international law. But in that context, I have been thinking a lot of late about how current trends in the law create substantial disincentives for entities to enter into contracts with the U.S. government. I'm sure that readers who deal with government contracts regularly can think of many more, but I want to focus on two developments that would give me pause if I were considering entering into a contract with the U.S.
For more bloviation, click on the link . . .
Friday, March 21, 2008
Do professors have a life outside of class? Or, do they strut and fret their hour up at the lectern, then lie dormant until the next class starts? Well, if any student ever believed the professor disappeared into a void only to reappear for classes, the internet apparently has the capability to ruin this fantasy. From an article in yesterday's New York Times, which invokes contract law's very own Professor Kingsfield as the archetype of all professors:
There was a time when professors did not outrank music premieres on television. They were buttoned-up authority figures, like the legendary fictional Professor Kingsfield, portrayed by John Houseman in “The Paper Chase.” The personal lives of professors could only be imagined from the sparse clues of clothing, handwriting and the contents of offices.
These days, the clues are usually digital and are broad invitations to get to know the person behind the Ph.D. It is not uncommon for professors’ Web pages to include lists of the books they would take to a deserted island, links to their favorite songs from bygone eras, blog posts about their children, entries “written” by their dogs and vacation photographs.
While many professors have rushed to meet the age of social networking, there are some who think it is symptomatic of an unfortunate trend, that a professor’s job today is not just to impart knowledge, but to be an entertainer.
Certainly, professors have embraced the Internet since its earliest days, using it as a scholarly avenue of communication, publication and debate. Now it is common for many to reveal more personal information that has little connection to their work
Some do so in hopes it will attract attention for a book or paper they have written; others do so inadvertently, joining Facebook to communicate with students and then finding themselves lured deeper by its various applications.
Many, though, say that by divulging family history and hobbies, they hope to appear more accessible to students.
Well, even with all of the cyber-accessibility and transparency, the article continues:
A number of professors said the most disarming thing of all to students is when they encounter a professor not on a Web page, but in the real world.
When a student spotted Mr. Gosling on a street near campus, he said, “She looked at me in, like, horror. Like, ‘Wait a minute, you have a life?’ The idea that I would continue to exist — it was sort of a violation of her expectations.”
Funny, I always thought that the most disarming thing for students happened right in class: the realization that I am nothing like Professor Kingsfield.
[Meredith R. Miller]
When teaching the law of contract conditions, I find that the mortgage contingency clause contained in most residential real estate contracts is a palpable example. A simple and recent New York Supreme Court case provides a ready illustration.
Plaintiffs/sellers contracted with defendant/buyer for the purchase of real estate. Buyer deposited $35,000 in escrow with the sellers' attorney. Sellers were ready, willing, able to close on the date provided in the contract. However, buyer's attorney informed the sellers that the buyer would not be appearing at the closing because the buyer did not have a valid mortgage commitment in place. The buyer requested return of the down payment.
Sellers brought suit seeking summary judgment in lieu of complaint, relying on the contract of sale. Buyer cross-moved for summary judgment, pointing to the contract's mortgage contingency clause. The clause provided that the obligations of the buyer were conditioned upon the issuance of a written commitment on or before "45 days from date hereof." The paragraph provided that, if the commitment was not issued within that time,"then either party may cancel this contract by giving notice to either party . . ., in which case the contract shall be deemed canceled. . . ."
The court granted the buyer's cross-motion for summary judgment, holding:
[T]he defendant, has demonstrated that she made a good faith attempt to obtain a written commitment. The mortgage contingency clause contained in the contract provides that the purchaser shall (a) make prompt application to a lender for a mortgage loan, (b) furnish accurate and complete information as required, (c) pay all fees related to the application and loan, (d) pursue such application with due diligence, (e) cooperate in good faith with the lender, and (f) promptly give notice to the seller of the name and address of each lender that the purchaser has made an application to. The defendant has demonstrated compliance with such terms.
* * *
As the defendant was unable to obtain a mortgage commitment with due diligence, and notified the plaintiff accordingly prior to the closing date, the contract was deemed canceled and therefore, the defendant is entitled to a full refund of her down payment.
Buyer was awarded the return of her down payment.
The Duke Chronicle reports that Duke University removed water dispensers from campus dormitories because their presence violated the terms of a 10-year contract between Duke Dining Services and the Coca-Cola Company. Under the terms of the agreement, only Coca-Cola products may be dispensed on campus, and the water in question was a flavored product, apparently produced by one of Coca-Cola's competitors.
One Duke freshman was unable to quench her thirst: . "I was upset because I don't want to drink soda and it was a nice in-between alternative from soda at every meal, but now that that's gone there aren't many options left." Others were unmoved by the change: "I don't see the point in paying for water that's flavored and doesn't even taste that much better. I just don't like it."
Now, Duke's Director of Dining Services Jim Wulforst is facing the biggest crisis of his administration. The Duke Chronicle provides a picture of a smiling, relaxed Mr. Wulforst, obviously taken in happier times: "We're at a crossroads right now, and we're trying to figure out how to bring the product back without violating the contract," he said. "It just can't be a fountain system attached to the existing Coke system."
Yeah, that's what he says now, but what were those drinks doing there in the first place? Duke students want to know, "What did you know, Wulforst, and when did you know it?"
Here's my legal opinion: Flavored water is gross.
Thursday, March 20, 2008
MTV films is releasing Stop-Loss at the end of the month. Here's a synopsis from the website:
Decorated Iraq war hero Sgt. Brandon King makes a celebrated return to his small Texas hometown following his tour of duty. He tries to resume the life he left behind. Then, against Brandon’s will, the Army orders him back to duty in Iraq, which upends his world. The conflict tests everything he believes in: the bond of family, the loyalty of friendship, the limits of love and the value of honor.
But for those of you who like your media old school, The Nation has published Michael Zweig's "The War and the Working Class" The essay explores a number of contract issues in connection with the U.S. military's recruitment practices. These issues include "stop-loss," which Zweig describes as the military reserving "the right to extend the deployment time and active-duty status of every soldier beyond the service dates prescribed in their enlistment contracts and mobilization papers." According to Zweig, most soldiers were unaware of the stop-loss provision but by 2006, it had been enforced against 50,000 soldiers. Zweig also reports that court challenges to the enforcement of the stop-loss provision were unsuccessful.
Zweig also identifies another questionable practice. The military entices recruits with promises of benefits, such as educational training and signing bonuses but reserves the right not to pay such bonuses if the soldier leaves the military before her or his commitment is over, even if the reason for the soldier leaving the military is severe combat injuries. This seems like the sort of loophole that a legislature concerned about supporting the troops could easily close, but Congress has not done so yet.
Monday, March 17, 2008
As we previously reported, a Michigan appellate court awarded Ted Nugent $60,000 in contract damages after the Muskegon Summer Celebration (MSC) retracted an invitation to Mr. Nugent to perform at the Celebration in 2003.
Last week, MLive.com reported that, after a dispute over whether or not the judgment had actually been paid, MSC's attorneys filed a motion asking the judge to enter a satisfaction of judgment, since Nugent's attorney had not done so. Perhaps, Nugent and his attorneys were paralyzed. Or maybe it was just a case of cat scratch fever. In any case, apparently hoping to avoid a legal free for all or another trip to the dog eat dog world of litigation in the state where one might find the Motor City madhouse Nugent's attorneys apparently released their stranglehold on the satisfaction of judgment and permitted the litigation to be terminated.
I am told that the Valparaiso University School of Law's Foreclosure Conference announced previously on this blog is already oversubscribed.
Those of you who would still like to experience Spring in Indiana might want to attend our Conference on Law, Poverty and Economic Inequality to be held April 3-4, 2008. Contrary to the information on the aforelinked webpage, those interested in registering should contact Melissa Mundt at 219-465-7847 or via e-mail at Melissa.Mundt@valpo.edu.
Sunday, March 16, 2008
Last month, we reported that a number of convservative authors were headed to arbitration with their claims against Regnery Publishing, a conservative press. This month, according to Human Events.com, the arbitrator, in a separate proceeding, ordered author Richard Miniter to repay an advance he had received to publish the second of a two-book deal with Regnery, sinced he has now signed an agreement to allow another press to publish the second book. Miniter apparently flew the Regnery coop due to his dissatisfaction with their marketing strategies, which are the subject of the separate arbitration claim.
Friday, March 14, 2008
By affixing his signature to SB 93 on March 13, 2008, Governor Mike Rounds made South Dakota the thirtieth state to enact Revised Article 1. South Dakota's enactment, along with Kansas's (enacted last year), will take effect on July 1, 2008.
SB 93, like the versions of Revised Article 1 enacted in Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Minnesota, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Oklahoma, Rhode Island, Texas, Utah, Virginia, and West Virginia, rejects uniform R1-301. (To date, only the U.S. Virgin Islands has adopted uniform R1-301.)
SB 93, like the versions of Revised Article 1 enacted in Arkansas, California, Colorado, Connecticut, Delaware, Florida, Iowa, Kansas, Kentucky, Louisiana, Minnesota, Montana, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Oklahoma, Texas, and West Virginia, adopts uniform R1-201(b)(20)'s definition of "good faith." By contrast, Alabama, Arizona, Hawaii, Idaho, Indiana, Nebraska, Rhode Island, Utah, and Virginia retained the pre-R1 “honesty in fact in the conduct or transaction concerned” definition in Article 1 and left 2-103(1)(b) & 2A-103(3) unchanged.
The bills currently pending in Massachusetts, Pennsylvania, Tennessee, and Vermont do not appear to be making much progress. But, you can count on your faithful correspondent to alert you if that changes.
[Keith A. Rowley]
Thursday, March 13, 2008
Speaking of best efforts, consider the following standard-form language from the 1919 contract between "Shoeless" Joe Jackson and the Chicago White Sox (more precisely, Charles Comiskey, who owned the White Sox):
The player agrees to render for the club owner, at such times and places during the term of this contract as the club shall designate, his best services as a ball player; and he agrees to keep himself in the best possible physical condition from the date hereof until the termination of the contract; and a violation of either of the foregoing provisions of this paragraph shall be such a breach of contract as shall entitle the club owner either to terminate this contract forthwith, by written notice, or to suspend the player, by written notice, without pay until the club owner is satisfied that the player is ready, able and willing to resume his services in the manner in this paragraph provided. The player further agrees that, during the term of this contract, he will not, except with the consent of the American League, engage, either during the American League season or at any other time, in any game or exhibition of base ball, foot ball, basket ball, or other athletic sport, except as herein provided.
Form 1919, American League Player's Contract ¶ 3 (emphasis added). As baseball-savvy readers and those who heard my presentation at February's Fourth International Conference on Contracts at McGeorge School of Law know, several members of the 1919 Chicago White Sox arguably did not render their best services as ballplayers during the World Series against the Cincinnati Reds.
The final sentence of Paragraph 3, which served to make the player-team contract exclusive on the player's part, also reinforced the effect of Paragraph 9 -- the 1919 version of the so-called "reserve clause," a later version of which former St. Louis Cardinals great Curt Flood unsuccessfully challenged when he was traded to the Philadelphia Phillies after the 1969 season.
Whenever, in the sole judgment of the club owner, it is to the advantage of the club that such action be taken, the club owner may transfer the player to another base ball club and assign the rights and obligations of the club owner hereunder to the owner of such other base ball club ....
Form 1919, American League Player's Contract ¶ 9.
In Flood v. Kuhn, 407 U.S. 258 (1972), the U.S. Supreme Court upheld the reserve clause -- which institutionalized, to paraphrase Flood, well-paid slavery. But major league baseball's hard-fought victory was fleeting, as the reserve clause met its demise following the 1975 season at the hands of arbitrator Peter Seitz, who ruled in favor of all-star pitchers Andy Messersmith and Dave McNally, declaring them to be "free agents" who could play or refuse to play for any major league baseball team that wanted their services.
[Keith A. Rowley]