ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Thursday, March 13, 2008

Mike Leigh on Best Efforts (Dedicated to Larry Garvin)

Helen Lenoir: Now, gentlemen, we all know why we’re here.  We seem to have come to something of a stand-still.

Arthur Sullivan: Indeed, we have.

Lenoir: Which, Arthur, is because?

Sullivan: Because, Helen, I am unable to set the piece that Gilbert persists in presenting.

W.S. Gilbert: The piece I persist in presenting, Sullivan, is substantially altered each time; otherwise, there would be little point in presenting it to you.

Sullivan: With all due respect, old chap, it is not substantially altered at all.  You seem merely to have grafted onto the first act the tantalizing suggestion that we are to be in the realms of human emotion and probability, only to disappoint us by reverting to your familiar world of topsy-turvydom.

Gilbert: That which I have grafted on to Act One, Sullivan, has been specifically at your request.  And, if you take exception to topsy-turvydom, you take exception to a great deal of my work of the past twenty-five years, not to mention much of what you and I have written together since Eighteen Hundred and Seventy-One.

Sullivan: That is patent balderdash.

Gilbert: Is it?

Lenoir: Gentlemen.  If we might keep things cordial, we may make some progress.  Arthur, can you really not see your way to setting this new piece?

Sullivan: Alas, Helen, I cannot.

Lenoir: Cannot or will not?

Sullivan: I am truly unable to set any piece that is so profoundly uncongenial to me.

Lenoir: Uncongenial though it may be to you, I must remind you that we here are conducting a business.

Sullivan: And may I remind you, Helen, that I am not a machine.

Lenoir: I would not suggest for one moment that you were.

Sullivan: You all seem to be treating me as a barrel-organ.  You have but to turn my handle, and "Hey Presto!," out pops a tune.

Lenoir: Oh come now, that’s not fair.  You are both contractually obliged to supply a new work on request.

Gilbert: The very act of signing the joint contract dictates that we must be businesslike.

Lenoir: Yes, Mr. Gilbert, and I was wondering whether you might not be able to solve our wee difficulty.

Gilbert: How, pray?

Lenoir: By simply writing another libretto.

Gilbert: That’s out of the question.  I have worked for many long months at this play, which I have every confidence will be the best we have yet produced at the Savoy.  To abandon it would be not only criminal, but wasteful.

Lenoir: I see....  What I don't understand, Arthur, is why you cannot set this piece.   You're our greatest composer.  Surely, you can do anything.

Sullivan: How very kind you are, Helen.  But, I say again to you all: I am at the end of my tether.  I have been repeating myself in this class of work for too long and I will not continue so to do.

. . .

Gilbert: If you wish to write a grand opera about a prostitute dying of consumption in a garret, I suggest you contact Mr. Ibsen in Oslo.  I’m sure he will be able to furnish you with something suitably dull.

. . .

Sullivan: The opportunity to treat a situation of tender, human, and dramatic interest is one I long for more than anything else in the world.

Gilbert: If that is your sincere desire, I would be willing, with Carte's permission to withdraw my services for one term, to allow you to write a grand opera with a collaborator with whom you have a closer affinity than myself.

Sullivan: No, Gilbert.

Gilbert: I'm in earnest, Sullivan.

Richard D’Oyly Carte: No doubt that is something we shall be pursuing in the future.

Gilbert: Indeed.  Well, that is your prerogative, Carte.

Lenoir: However, we are concerned with the present.  Arthur, will you or will you not set Mr. Gilbert's new and original work?

Sullivan: Ma belle Héléne, ce n'est pas possible.

Lenoir: Truly?

Sullivan: I'm afraid so.

Lenoir: That being the case, Mr. Gilbert, would I be right in supposing that you remain unable to accommodate us?

Gilbert: Indeed, Miss Lenoir.  I have had what I deem to be a good idea and such ideas are not three a penny.

Lenoir: What a pity.  This will be a very sad day for many thousands of people.

from Topsy-Turvy (October Films 1999)

[Keith A. Rowley]

March 13, 2008 in Film Clips | Permalink | TrackBack (0)

Wednesday, March 12, 2008

It's a Mystery: Author's Settlement Agreement is Ambiguous

Walter Mosley and Joy Kellman were married for over 13 years.  During that time, Mosley commenced his writing career and became famous for, among other works, a series of stories starring a detective named Easy Rawlins, and his sidekick, Mouse.  Mosely and Kellman entered into a settlement agreement in tandem with their divorce.  At the time, Mosley had written seven Easy Rawlins books and three others, all of which were defined by the parties' agreement as "Marital Books."  Further, Paragraph 4.1(d) of the parties' 27-page agreement settling their divorce provided that:

the Wife shall receive 25 percent. . . of any funds. . . paid to the Husband on account of Marital Books/Literary Works. . . in written, verbal and visual communications, whenever produced after the date of execution of this Agreement, including but not limited to future publishing of Marital Books/Literary Works, screenplays. . ., motion picture rights, fiction and non-fiction, magazines, records, tapes (audio and video), disks (audio, video, CD, DVD, computer), theatrical productions of any kind, movies, television, television movies and radio productions, and any spin-off from any of the foregoing, including but not limited to any television series based on Easy Rawlins and Mouse.

In New York County Supreme Court, Kellman has sued Mosley for breach of contract, alleging, among other things, that he breached Paragraph 4.1(d).  Kellman claims that Mosley published three new Easy Rawlins novels since the execution of the Agreement, and that, in addition to other projects, a motion picture of one post-divorce title, Little Scarlet, is set to be released.  She argues that she has not received her share of the proceeds from these projects.  And, she argues that she is entitled to her percentage of the proceeds because she reads Paragraph 4.1(d) as entitling her to 25% of any future books or projects which are based on Easy Rawlins and Mouse, regardless of whether the the new projects are listed as "Marital Books."  She basically claims the right to a percentage of net proceeds from any new works or projects which involve the character Easy Rawlins in any way.

Mosley responds that Kellman is not entitled to a percentage of the earnings on the new books in the Easy Rawlins series that were written post-divorce.

In a recent decision, Supreme Court, New York County (Silbermann, J.) denied Kellman's motion for partial summary judgment.  It held that this provision was "ambiguous as to the extent to which Kellman's interest follows Mosley's exploitation of Easy Rawlins in the future works." The court paid particular attention to the words "fiction and non-fiction" and the meaning of the word "spin off."  Further, the extrinsic evidence offered by Mosley of the drafting process merely offered a different view of the meaning of the contested terms "fiction and non-fiction" and did not clarify the meaning of the contract language. coverage.

Kellman v. Mosley (2/22/08, Justice Silbermann).

[Meredith R. Miller]

March 12, 2008 in Recent Cases | Permalink | TrackBack (0)

Government Contracts and the Revolving Door

John_ashcroftYou may know John Ashcroft (left) as the author of "Let the Eagle Soar" or you may know him as a former U.S. Attorney General.  In any case, he testified before Congress yesterday, defending a contract that could pay him as much as $52 million (over an 18-month period) to monitor Zimmer Holdings Inc. of Warsaw, Ind., a company that manufacturers replacement hips and knees.  According to (the Internet home of the St. Louis Post-Dispatch), Zimmer Holdings was one of four companies that agreed to pay $300 million to settle cases arising from a federal investigation.

Ashcroft's Washington, D.C. based company (presumably The Ashcroft Group, LLC) was selected on a no-bid basis by New Jersey's U.S. Attorney Christopher Christie, who used to work for Mr. Ashcroft at the Department of Justice,  In his defense, Mr. Ashcroft pointed out that no taxpayer dollars were spent on the contract as the money paid to him is provided by the company being monitored.  So, it's supposed to make us more comfortable with the quality of the monitoring that the monitor is paid millions of dollars by the party he's supposed to monitor?  But then again, Mr. Ashcroft is a man of integrity, just like this guy.

[Jeremy Telman]

March 12, 2008 in Government Contracting, In the News | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 11, 2008

Real Estate Developer's Detrimental Reliance Entitles Him to $6.5 million

A trial judge in Suffolk County, New York has awarded a real estate developer roughly $6.5 million in damages based on the developer's "detrimental reliance."

The plaintiff Ron Parr, a local real estate developer, had entered into business dealings with another developer, defendant Pitcairn Properties, Inc. The parties' stated intention was to develop and manage real property in Suffolk County, Long Island. In connection with a real estate transaction to obtain undeveloped lots in Ronkonkoma, defendant promised to "issue shares of voting common stock [of a single purpose entity that was to hold title to the properties] to [plaintiff] Ron Parr or his designee for 50 percent of the agreed upon residual value. . . of the property at closing . . ., less the amount paid for the property together with all related costs." When a 50% interest was not transferred to plaintiff, he sued. Plaintiff asserted that "he relied, in good faith, upon all of the representations made to him, most especially that he was entitled to a fifty percent share in the properties."

The court primarily justified its decision to award damages to plaintiff based on plaintiff's detrimental reliance on defendant's promise to transfer the half interest in the properties.* Yet, the court based its damages award on the full expectation measure -- that is, the court awarded plaintiff the value of the performance he was entitled to under the contract, roughly $6.5 million. Perhaps reliance and expectation were one in the same here, because plaintiff originally obtained the right to title to the properties as part of the settlement of a previous action, and transferred that title to the single purpose entity, presumably in reliance on the promise of receiving a half interest.

*A sentence in the opinion that baffles me: "Since a portion of the Plaintiff's action sounds in contract, it is necessary to address only the issues of detrimental reliance and foreseeability inasmuch as the existence of an agreement is not in dispute." Did the judge mean to say "inasmuch as the existence of a promise is not in dispute"? Because, technically, all plaintiff needs is a definite promise to seek damages for detrimental reliance, not the existence of a contract. Perhaps I am missing something here.

Parr v. Ronkonkoma Realty Venture I LLC (2/26/08, Justice Jeffrey Arlen Spinner).

[Meredith R. Miller]

March 11, 2008 in Recent Cases | Permalink | TrackBack (0)

Contracts, Politics, and National Security

Usaf_f15_f16_kc135_750pix  On February 29th, the U.S. Air Force announced that it was awarding a $35-40 billion contract to build aerial refueling planes to a team formally led by Northrop Grumman.  I challenge anyone to click on the image at left and resist the temptation to stand up and shout U.S.A!!  U.S.A.!!  Aerial refueling is cool!!

Anyhow, the contract award to Northrop Grumman and its partner, the European Aeronautic Defense and Space Co. (EADS),was widely reported as a "stunning setback" for Boeing, since EADS is the parent corporation of Boeing's rival, Airbus.  What was the Air Force thinking?  This is about refueling, not about supplying pilots with beaujolais nouveau.  In any case, like an earlier proposal to place a Dubai-controlled company in charge of managing six U.S. port terminals, this government contract raises issues of patriotism, national security and economic outsourcing.

Today, the Associated Press reports that Boeing will file a challenge to the Air Force's decision with the Government Accountability Office.  According to the AP, pressure to review the decision is coming from politicians representing states that would have benefitted had the contract been awarded to Boeing. Meanwhile, Alabma Senator, Richard Shelby, defended the Air Force's decision.  Northrup Grumman reports that the contract will lead to the creation of 2000 new jobs in Mobile.

UPDATE: For those interested in learning more about the Government Accountability Office bid-protest mechanism, there is a new article out:  Robert S. Metzger & Daniel A. Lyons, A Critical Reassessment of the GAO Bid-Protest Mechanism, 2007 Wisc. L. Rev. 1225.

[Jeremy Telman]

March 11, 2008 in Government Contracting, In the News, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Monday, March 10, 2008

Really Hot Cayanne: Porsche Up in Flames

This story concerning allegations of breach of contract, breach of warranty and negligence, courtesy of The BLT:

A D.C. law firm specializing in national security cases moved a little away from its niche this week by filing a civil action against a company that allegedly sold it a new Porsche SUV that spontaneously caught fire.

Paleos & Krieger’s March 3 lawsuit accuses the Georgia-based Porsche Cars North America of breach of contract, breach of warranty, and negligence. The suit also accuses Wisconsin-based Ameriprise Home and Auto Insurance of breach of an insurance contract.

The complaint, filed by partner Roy Krieger, says the firm bought the SUV — a Porsche Cayanne S — from Porsche Cars North America in December 2003 and insured it with Ameriprise.

Krieger says on March 5, 2005, he parked the car outside a local bookstore. After reading for about two hours, he came out to find a fire truck sitting in the lot.

“I just hoped it wasn’t blocking me in,” he said.

When Krieger turned the corner, he found his car to be a wet “smoking hulk” with the interior blackened and all the windows smashed.

“I was quite startled and dismayed because, up to that point, the car had been running fine,” Krieger says. “At the end, it couldn’t even be towed. It had to be placed on a flatbed truck and driven away.”

According to the complaint, a forensic examination to determine the cause of the fire was apparently inconclusive.

It was bad enough the $60,000 car was totalled, Krieger says, but he also lost two custom suits and several dress shirts fresh from the drycleaners.

He is seeking monetary damages of more than $75,000 because the vehicle was under warranty and insurance coverage. He said he hasn’t received any payments.

“I’m over the shock of it now, it was a few years ago,” Krieger says. “But I haven’t gotten any money, and someone’s got to pay.”

Porsche Cars North America’s legal department had not received the complaint and was unable to comment. Ameriprise said it couldn't comment either because the case was pending.

[Meredith R. Miller]

March 10, 2008 in In the News | Permalink | TrackBack (0)

Foreclosure Conference at Valparaiso

ForeclosureMy colleague, Alan White, has organized a one-day conference, "Defending Foreclsosures, Saving Homes," to be held Friday, March 29, 2008 at the Valparaiso University School of Law.  Conference participants will learn about the latest developments in foreclosure and bankruptcy, loss mitigation and mortgage servicer practices. Attorneys interested in representing homeowners will learn the nuts and bolts of the Indiana foreclosure process, explore effective claims and defenses available to homeowners,  and learn how to present workout and loan modification proposals to mortgage servicers. Housing counselors will learn more about judicial foreclosure in Indiana and options available to homeowners at each stage of the process. Architects of the Indiana Foreclosure Prevention Network will be on hand to explain the IFPN initiatives—including the recently established hotline and referral network. 

The full brochure can be found here.  Registration is free and can be accomplished with a call to Faye Jackson at 1-877-VALPOLAW or an e-mail to

[Jeremy Telman]

March 10, 2008 in Conferences | Permalink | TrackBack (0)

Syllabi as Contracts

I have often considered beginning my Contracts course by insisting that students sign and return a copy of a mock syllabus containing unreasonable terms on the first day of class.  My favorite unreasonable term:

If a student's cell phone goes off during class, the instructor may confiscate it for the remainder of the semester.  If the student takes the call, the instructor may confiscate the cell phone and smash it with a hammer, unless it's one of those iphones, in which case the instructor will simply confiscate it.

There would be other standard form contract stuff of course -- an arbitration clause, choice of law, merger, integration, etc.  I expect that if I did this, most of the students would immediately sign and a few would hold out, and I would make a big show of putting pressure on them to sign or leave.  I've never done it because I don't want to start the semester off on an adversarial note. 

Still, I do think of my syllabus as an implied contract.  I am mostly concerned that the syllabus sets forth my expectations regarding attendance and participation.  Some students regard the syllabus as a binding contract that I will cover all of the assigned materials (despite express language to the contrary), and thus there are a few, isolated howls of protest if I suggest that, becasue we are behind, we will skip a case or two. It appears that my students and I are not alone in considering a syllabus as akin to a contract, according to this article in the March 14, 2008 issue of The Chronicle of Higher Education

HT: Penny Andrews

[Jeremy Telman]

March 10, 2008 in In the News, Teaching | Permalink | Comments (0) | TrackBack (0)

Sunday, March 9, 2008

Spring Break

A My postings may be a little thin this week.  As some of you know, my second job is as owner of the Texarkana Gunslingers, an independent minor league baseball team.  Spring training starts May 1, and I'm off to the Border Cities (that's what we call Texarkana, which is half in Texas and half in Arkansas) for a week of getting ready for the season.

So I'll be in and out of touch.  Anyone who wants to order a Gunslingers hat or T-shirt (they make great gifts!) can send me an e-mail.

[Frank Snyder]

March 9, 2008 in About this Blog | Permalink | TrackBack (0)

Vicous Unprovoked Assault on Brian Leiter Refuted!

There are three things most everyone knows about our blogmate Brian Leiter (Texas), the author of Brian Leiter's Law School Reports (the People magazine of America's elite law schools), and more recently Brian Leiter's Legal Philosophy Blog. The first is that he likes to put the name "Brian Leiter" on things. The second is that he'll never put out a ranking in which Texas ranks lower than it does in U.S. News. The third is that he sometimes acts like he needs a personality transplant. Or maybe some lithium.

I note this apropos of this recent attack on our colleague Jeremy Telman, who allegedly misread something Leiter had written.

Department of Scholarly Howlers . . . I would have thought (vanity of vanities, I know, but I would think someone making claims about my views might have read my work) that I had a modest reputation as a major critic of Hart's misinterpretation of legal realism. Indeed, someone who had read only Rethinking Legal Realism, and nothing else, would have learned as much about my views. . . . But putting the scholarly carelessness of Professor Telman's essay to one side . . . .

[Emphasis added.] The nastiness of that irritated me, so I'm sorry to say I actually posted a comment on Leiter's blog in response. I usually try to wait 24 hours before responding when someone bothers me. But I violated my rule. Mea culpa. I said:

Actually, it looks like he read your book. He may have misinterpreted your argument. This might be because (a) he misread it, or (b) he's simply incapable of understanding the nuances of your thought, or (c) you didn't write it clearly. Obviously the third is, as all readers of this blog know, impossible. Unthinkable, even.

But even assuming Prof. Telman is dead wrong, the nastiness of this response is pretty impressive. I find it hard to imagine that Hart (for example) would ever have written this kind of insulting garbage in public about someone who misinterpreted his work. Great scholars seem to be above this kind of petty strutting. It's the lesser ones who get bent out of shape and lash out. "Vanity of vanities," indeed.

It took about five minutes to get a response from Leiter:

You really are a nasty piece of work, aren't you? I knew from our prior exchanges that you had some chips on your shoulder, but really, this is something else. I think you must not spend any time with philosophers. When people get things wrong, philosophers say so. It's nothing to do with strutting or pettiness, but with truth. You've heard of that, right?

What a sick man you must be.

Wow, it takes a real philosopher engaged in the never-ending pursuit of truth to draw so accurate a picture of a subject he's never actually met. I'm devastated. Now I'll go crawl under my rock and die.

[Frank Snyder]

March 9, 2008 in About this Blog | Permalink | TrackBack (0)

Saturday, March 8, 2008

How Much Should a CD Cost?

Walmart_exterior Well, of course, a CD should cost whatever the market says it should cost.  It's a matter of supply and demand, as anybody familiar with the most basic economic principles will tell you.  Oh, wait.  That was in the days before Wal-Mart.  Now, it seems, CDs, like a lot of other products will cost whatever Wal-Mart says they should cost.  And according to new reports such as this one, CD's will now be subject to a five-tier pricing scheme. 

The top 15-20 hottest titles will cost $10; other hits and current titles will cost $12; top catalog CDs will cost $9, midline cataogue CDs will cost $7 and budget CDS will cost $5.  Since Wal-Mart accounts for something like 22% of the retail market in CDs, the big record labels may not have a choice but to agree to the Wal-Mart pricing structure.  Wal-Mart divisional merchandise manager for home entertainment, Jeff Maas, would not rule out the possibility that Wal-Mart might simply stop stocking CDs or greatly reduce the number of titles displayed if Wal-Mart cannot reach some agreement on a new pricing structure with the major record labels.

According to Maas, "The customer votes every single day in our stores, and based on what they want is how we merchandise our stores."  Apparently not enough customers are voting for CDs at the existing prices. 

For those curious about the CD-buying habits over at the ContractsProf Blog, I can disclose that the only popular music I have bought recently is that of the celebrated daughters of my colleagues.  You can cut out the middle man and listen to the music of Sarah Dooley here; you can hear Kate Myers here.  If Wal-Mart begins carrying them, I'll think about shopping there.

[Jeremy Telman]

March 8, 2008 in In the News | Permalink | Comments (0) | TrackBack (0)

Georgia O'Keeffes to Stay at Fisk University

RadiatorbuildingnewyorknightIn 1949, Georgia O'Keeffe donated 101 of her paintings, including Radiator Building -- Night, New York (left) to Fisk University.  As CBS reports, O'Keeffe's donation required that the paintings not be sold and be kept on permanent display. Fisk University, however, is in financial distress and, according to The New York Times, a Tennessee judge last month enjoined Fisk from selling a half-interest in the artworks to the Crystal Bridges Museum in Bentonville, Arkansas, for $30 million.

The Georgia O'Keeffe Museum in New Mexico, representing Ms. O'Keeffe's estate, sued in Tennessee to recover the paintings from Fisk, alleging a breach of the terms of the 1949 donation.  Judge Ellen Hobbs Lyle ruled that Fisk may not sell the paintings, but it will not have to give them up.  The ruling may put Fisk's continued existence at risk.

[Jeremy Telman]

March 8, 2008 in In the News | Permalink | Comments (2) | TrackBack (0)

Friday, March 7, 2008

Consequential Damages Welcome Here!

NyIn two cases decided on February 18, 2008, the New York Court of Appeals permitted the award of consequential damages despite contractual provisions in insurance policies excluding consequential loss, so long as the damages were the "foreseeable" and "natural and probable consequence" of a policy breach and were "within the contemplation of the parties" at the time the policy was issued.  So reports James W.. Carbin on the Duane Morris LLP website

The cases are Bi-Economy Market, Inc. v. Harleysville Ins. Co. of N.Y., 2008 WL 423451, 2008 N.Y. Slip. Op. 01418 (N.Y. Feb. 19, 2008) and Panasia Estates, Inc. v. Hudson Ins. Co., 2008 WL 420014, 2008 N.Y. Slip Op. 01419 (N.Y. Feb. 19, 2008) and both can be found here.  In both cases, the policies in question excluded coverage for consequential losses, but the Court of Appeals held the insurers liable where the consequential damages flowed not from the event insured against but from the insurer's failure to timely pay the claim.

According to Mr. Carbin, "[t]he Court of Appeals' decision in Bi-Economy is the first recognition that a policy insuring 'business interruption' proves the foreseeability required for an award of consequential damages stemming from an insurer's breach of the policy contract by failure to timely pay a claim, even where the policy contains an exclusion for 'consequential loss.'"  The Court applied the same rule in Panasia Estates but remanded the case for a determination of whether the consequential losses at issue were foreseeable.

[Jeremy Telman]

March 7, 2008 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Thursday, March 6, 2008

Showdown in Minnesota

Bargill It's high noon in L’etoile du Nord, and the big guns are out and firing.  In its "Exchange" forum, the Minnesota Law Review is featuring lively contributions by NYU's Oren Bar-Gill (left) and the University of Chicago's Richard Epstein (below left). 

Bar-Gill's essay, The Behavioral Economics of Consumer Contracts, addresses the question of whether the fact that individuals make mistakes merits legal intervention.  In order to answer this question, Bar-Gill answers four sub-questions: (1) Do consumers suffer from systematic misperception of the costs and benefits associated with certain products?  (2) Do sophisticated sellers respond strategically to consumer misperception?  (3) Is consumer misperception and sellers' response thereto welfare-reducing? (4) Is legal intervention warranted and if so what type of legal internvetion is desirable?

Epstein In his response, The Neoclasical Economics of Consumer Contracts, Richard Epstein contends that "Bar-Gill overstates the level of consumer error by underestimating the corrective powers already at work."  Epstein further argues that both Bar-Gill and the behavioral economists on whom he relies "ignore more traditional explanations that better account for the apparently irrational behavior that they observe."  Finally, Epstein suggets that credit markets themelves, especially as aided by the introduction of new technologies such as the Internet, provide "the most powerful way to combat all sorts of consumer misperceptions."

[Jeremy Telman]

March 6, 2008 in Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 5, 2008

To Deponents: More Contract Talk, Less Profanity

A federal judge has sanctioned a lawyer and his client for the client's stubborn and sustained use of profanity during his deposition in a contract dispute.  The story, from the WSJ Law Blog:

First thing we did this morning, after reading that a federal judge fined a lawyer and his client $29,000 for using a certain swear word (or variations thereof) 73 times during a deposition, was reach for our calculator.

That’s $367 per F-bomb!

In a 44-page opinion in GMAC Bank v. HTFC, a case concerning a contract dispute, Judge Eduardo Robreno found that Aaron Wider, the CEO of HTFC, a mortgage investor, engaged in “hostile, uncivil, and vulgar conduct, which persisted throughout the nearly 12 hours of deposition testimony.” According to Robreno, Wider’s lawyer, Joseph Ziccardi, “snickered” at his client’s conduct and failed to stop his client’s tirades and was therefore culpable as well. (Click here for the Legal Intelligencer story.)

As a matter of sheer empirics, the "f-word" was used in the deposition 73 times; the word "contract" was only used 14 times.  Lesson to deponents in contract disputes: more contract talk, less profanity.

[Meredith R. Miller]

March 5, 2008 in In the News | Permalink | TrackBack (0)

Tuesday, March 4, 2008

Peevyhouse Redux?


This story from Robert J. Ambrogi at's Legal Blog Watch:

It is debatable whether George Washington ever chopped down a cherry tree, but we can be certain he was never dragged into court over it. Not so the Martha's Vineyard property owner and his unfortunate landscaper who must pay $90,000 after chopping down 10 of his neighbor's trees. Boston lawyer Terry Klein, at his blog Decisionism, urges anyone considering chopping a neighbor's tree to read yesterday's Massachusetts Appeals Court decision, Glavin v. Eckman.

So who knew that Massachusetts has a law imposing treble damages on anyone who cuts down a neighbor's tree? Certainly not Bruce Eckman. His view of the ocean from the pricey Aquinnah section of this resort island off the Cape Cod coast was obstructed by trees inconveniently located on the lot of his neighbor, James A. Glavin. In 1996, Eckman asked Glavin for permission to cut the trees, but the neighbor said no. Five years later, apparently unable to endure his obscured view any longer, Eckman hired a landscaper and gave him his marching orders: cut down any trees that blocked the view. The landscaper complied and thus this litigation.

Complicating it all was that these weren't just any 10 trees. These were large, mature oak trees. In fact, the trees were a key part of the reason Glavin purchased the lot, which adjoined another lot on which he'd built his vacation home five years earlier. The trees, as the court explained, "were ideally situated to provide shade and serve as a backdrop to a pond that Glavin planned to restore."

That Massachusetts law against cutting your neighbor's trees is silent on how to measure the damages should such cutting occur. Courts generally use either the value of the cut timber or the diminution of property value. But Glavin argued that neither would compensate him. He asked for, and the jury awarded, damages based on what it would cost him to restore the trees. This came to $30,000, the jury concluded, and the trial judge tripled that to $90,000. This was OK, the Appeals Court said, given that "any diminution in market value arising from the wrongful cutting was of less importance than was the destruction of the special value that the land and its stand of mature oak trees held for Glavin."

If there is anyone comparable to George Washington in this tree-chopping tale, it may be the landscaper, who chose not to appeal the jury's verdict against him. It is almost as if the landscaper chose to say, "I cannot tell a lie."

Glavin v. Eckman

Hold back your chainsaws, Massachusetts!

[Meredith R. Miller - h/t Alan Hornstein]

March 4, 2008 in In the News, Recent Cases | Permalink | TrackBack (0)

Monday, March 3, 2008

Tom Stoppard on Formation Defenses (and Vic Goldberg's "Net Profits Puzzle")

Fennyman: Henslowe, do you know what happens to a man who doesn't pay his debts?   His boots catch fire!

Cut to playhouse interior where the proprietor, Henslowe, is trussed up with his boots being held to a burning brazier Fennyman's henchman, Lambert.   Fennyman, to whom Henslowe is indebted, interrogates Henslowe and instructs Lambert while Fennyman's clerk, Frees, watches.   Henslowe moans in agony.

Fennyman: Why do you howl when it is I who am bitten?   What am I, Mr. Lambert?

Lambert: Bitten, Mr. Fennyman.

Fennyman: How badly bitten, Mr. Frees?

Frees: Twelve pounds, one shilling, and four pence, Mr. Fennyman, including interest.

Henslowe: (moan)   I can pay you.

Fennyman: When?

Henslowe: (moan) Two weeks.   Three weeks at the most.   Oh, for pity's sake.

Fennyman: (gesturing to Lambert)  Take them out.

Lambert pulls a rope lifting Henslowe's boots away from the brazier.  Henslowe sighs with relief.

Fennyman: Where will you find ...

Frees: ... sixteen pounds, five shillings, and nine pence ...

Fennyman: ... including interest, in three weeks?

Henslowe: I have a wonderful new play.

Fennyman: (again gesturing to Lambert) Put them back in.

Lambert looses the rope, moving Henslowe's boots back toward the fire.

Henslowe: (moan) It's a comedy.

Fennyman: Cut off his nose ...

Lambert brandishes a knife and holds it under Henslowe's nose.

Henslowe: It's a new comedy by William Shakespeare ...

Fennyman: ... and his ears.

Lambert retrains the knife to the base of Henslowe's right ear.

Henslowe: ... and a share.  We will be partners, Mr. Fennyman.

Fennyman: Partners?

Fennyman motions for Lambert to desist.  Lambert does so grudgingly, then pulls the rope again to lift Henslowe's boots from the fire.

Henslowe: It's a crowd-tickler.  Mistaken identities, shipwreck, Pirate King, a bit with a dog, and love triumphant.

Lambert: I think I've seen it.  I didn't like it.

Henslowe: But this time it is by Shakespeare.

Fennyman: What’s it called?

Henslowe: "Romeo and Ethel, the Pirate's Daughter."

Fennyman: Good title.

Fennyman motions for Lambert to untie Henslowe.

Fennyman: A play takes time.  Find the actors.  Rehearsals.  Let's say we open in two weeks.

Fennyman throws open the stage curtain and walks toward where the audience would stand and sit.

Fennyman: That’s what, 500 groundlings at two pence a head; in addition, 400 backsides at three pence -- a penny extra for cushions.  Call it 200 hundred cushions.  Say, two performances for safety.  How much is that, Mr. Frees?

Frees: Twenty pounds to the penny, Mr. Fennyman.

Fennyman: Correct.

Henslowe: But I have to pay the actors and the author.

Fennyman: Share of the profits.

Henslowe: There's never any ...

Fennyman: Of course not.

Henslowe: Oh, Mr. Fennyman.  I think you might have hit upon something.

Fennyman: Sign there.

Fennyman gestures to a piece of parchment that Frees has prepared.  Henslowe, his hands still bound, does his best to make his mark while Frees tries to assist by moving the parchment around the stationary quill.

from Shakespeare in Love (Miramax Films 1998).

[Keith A. Rowley]

March 3, 2008 in Film Clips | Permalink | TrackBack (0)

Sunday, March 2, 2008

Legal Theory Blog Recommends . . .

For the first time since December 1, 2007, Lawrence Solum, the inspirator of the Legal Theory Blog, recommends a piece of contracts scholarship as his Download of the Week.  He recommends Curtis Bridgeman's Contracts as Plans.

Here is the abstract:

This paper offers an original theory of contract law that draws from recent work in the philosophy of action and legal theory. Human beings are essentially planning creatures. Making plans and following through with them is crucial to everyday practical reasoning both for individuals acting alone and individuals acting together. This somewhat intuitive point was not fully appreciated in the philosophy of action as recently as twenty years ago, when Michael Bratman began to point out the inadequacies of the then-dominant view of rationality. Recently, Scott Shapiro has been applying Bratman's insights on practical reasoning to debates in legal theory to great effect, developing what he calls the planning theory of law. According to the planning theory, laws are plans for citizens, developed and applied by legal institutions to solve coordination problems that result from individuals living together in otherwise unplanned communities.

In this paper, I propose a new theory of contract law informed by these insights. First I will survey the current leading theories of contract and explain why a new theory is needed. Then I will argue that viewing contracts as plans designed to solve a particular coordination problem better accounts for how we are able to make exchanges over time even in situations where the parties involved might otherwise not be able to trust one another. A planning theory of contract law takes the view that whatever ends a society might want to achieve, those ends are more likely to be achieved if the parties have the ability to create contracts, that is, to adopt legally obligatory plans to make exchanges. The theory does not seek to justify a particular body of contract law. Rather, as I will argue, it explains the fundamental doctrines of our current law better than do the presently available theories.

Once we view contracts as plans, it becomes clear that a better understanding of planning will give us a better understanding of contract law. It follows that advances in the philosophy of practical reasoning as it treats plans will give us insight into contract law. In the final part of the paper, I will show how these insights go beyond an accurate description of the established central doctrines of contract law and can lead to a better resolution of more controversial issues. For now I will be limited to offering a few indicative examples that offer suggestions for further study. At the very least, I hope to establish that contract scholars should pay attention to scholarship on practical reasoning just as they have long studied moral philosophy and economics.

[Jeremy Telman]

March 2, 2008 in Recent Scholarship | Permalink | TrackBack (0)

Saturday, March 1, 2008

The Best is the Enemy of the Reasonable

Uk_flag What’s the difference between a clause requiring "best endeavours" and one requiring "reasonable endeavours"? And, for that matter, one requiring "all reasonable endeavours"? In a decision last year, Rhodia International Holdings v. Huntsman International LLC, [2007] EWHC 292 (Comm), the U.K. High Court took a whack at sorting them out.  A duty to use "reasonable endeavours," said the court, can be met by exhausting only one of a number of possible solutions, while a duty to use "best endeavours" requires the party to exhause all possible courses of action.

In a recent memo, Use Of Best And Reasonable Endeavours In Contracts, solicitor Sian Forbes of Bristol’s Bevan Brittan LLP offers an analysis of the decision.

[Frank Snyder]

March 1, 2008 in Commentary | Permalink | TrackBack (0)

Three Cheers for Merchants!

Reilly_3I was just reading with great interest the spiffy new Commercial Law Blog when I came across a fascinating post on The Morality of Trade by Marie T. Reilly (pictured) that included this:

If merchants "were [ever] considered" no better than thieves, I say, consider who's doing the considering. The possibility of gains from trade in the hands of "merchants" was and is the key driver for social and economic mobility and the political instability that comes with it. Feudal lords had much to fear and loathe at the possibility that by trading among themselves serfs might drag themselves out of hunger and ignorance. And so too the Church. Trade is possible only when people assert property rights. Assertion and exploitation of property rights by political subordinates is the beginning of the end of a social order based on birthright and violence.

Stirring stuff.  But why does it seem so familiar?  Ah, yes, here's what it reminds me of:

The bourgeoisie, historically, has played a most revolutionary part.

The bourgeoisie, wherever it has got the upper hand, has put an end to all feudal, patriarchal, idyllic relations. It has pitilessly torn asunder the motley feudal ties that bound man to his "natural superiors", and has left no other nexus between people than naked self-interest, than callous "cash payment". It has drowned out the most heavenly ecstacies of religious fervor, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation. It has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom -- Free Trade. . . .

The bourgeoisie has disclosed how it came to pass that the brutal display of vigor in the Middle Ages, which reactionaries so much admire, found its fitting complement in the most slothful indolence. It has been the first to show what man's activity can bring about. It has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, and Gothic cathedrals; it has conducted expeditions that put in the shade all former exoduses of nations and crusades.

What great 19th-century thinker is Mary T. Reilly channeling (find out below the break)?

Continue reading

March 1, 2008 in Commentary, Quotes | Permalink | Comments (2) | TrackBack (0)