Thursday, May 15, 2008
A Right to Health Insurance for Same-Sex Partners? It Depends on What You Mean by “Similar Union,” “Recognized,” “Only Agreement” and “For Any Purpose”
First Vermont allowed same-sex couples to enter into civil unions. Then Massachusetts allowed same-sex couples to marry. (And, JUST HOURS AGO, the Supreme Court of California lifted that state's ban on same-sex marriage). In response to the strides made by gay rights advocates in Vermont and Massachusetts, many states amended their constitutions to “defend” marriage. Michigan’s constitution was amended to provide:
To secure and preserve the benefits of marriage for our society and for future generations of children, the union of one man and one woman in marriage shall be the only agreement recognized as a marriage or similar union for any purpose.
A dispute arose when the Attorney General issued a formal opinion concluding that this so-called “marriage amendment” prohibited the city of Kalamazoo from providing health insurance to employees’ same-sex domestic partners.
Over a spirited defense, a majority of the Michigan Supreme Court recently held that this amendment to the Michigan constitution prohibits public employers from providing health insurance to employees' same-sex domestic partners. As the dissent paints it: “[t]he majority decides that the ‘marriage amendment’ prevents public employers from voluntarily entering into contractual agreements to provide health benefits to their employees' same-sex domestic partners.”
The majority's decision required many consultations with Webster’s Dictionary.
Wednesday, May 14, 2008
According to the Wall Street Journal, EarthLink announced on Tuesday that it would be discontinuing its wireless Internet service in municipal Philadelphia.
Since 2006, Earthlink had been working with Wireless Philadelphia to provide low-cost wireless Internet service in the city. EarthLink anticipated that 100,000 customers would sign up for the service, but less than 5,000 have done so. EarthLink CEO Rolla Huff explained, "This was about a business model that simply didn't work." Wireless Philadelphia vows to fight on, as the organization put it in a press release on its blog:
Today we received an announcement that EarthLink intends to discontinue operation of its Municipal Wi-Fi Network in Philadelphia. The reason cited was that negotiations with a certain party failed to come to a positive conclusion. The transfer of the EarthLink network is by definition a complex, time-intensive, multi-party transaction. Despite today's announcement, Wireless Philadelphia and the City are still working actively together to identify alternatives for preserving this network and applying it to numerous civic, commercial and social purposes. We remain optimistic for an orderly resolution of this matter. Regardless, Wireless Philadelphia is utterly steadfast in its determination to extend internet access to all members of the community, and we intend to do everything in our power to continue the momentum generated by WP in support of Digital Inclusion.
But wait. Apparently EarthLink is not free to simply walk away from its partnership with the city. It has therefore filed suit seeking permission to remove its Wi-Fi gear from utlity poles on June 12th and seeknig to cap its damages at $1 million. Wi-Fi Net News's Glenn ("I haven’t read the contract’s provisions for this set of circumstances, and I’m not a lawyer") Fleishman expresses skepticism about the prospects for this suit:
EarthLink will ultimately have to pay much more than $1m, I predict, and I suspect some of the settlement will leave gear in selected neighborhoods behind for more modest networking purposes.
Apparently EarthLink is shutting down other, less ambitious, urban networks as well.
HT: Alan White (again!)
Update: The contract is available here.
If we only had a Uruguayan Peso for each of those visitors . . . .
Thanks for visiting!
Tuesday, May 13, 2008
This isn't much of a contracts story, but luckily most things can be connected to contract law.
Contractual obligation distills to what it appears the parties intended to promise to do. And, the first indicator of what the parties intended to promise is the language they use. Word choice is hyper-important. And intricate language gaffes and malapropisms abound, teaching us lessons we can apply to contract drafting. (See, e.g., "Bushisms," though some of these gaffes aren't word choice, but word creation or problems with subject-verb agreement).
Word choice is important, and that is why I like this clip of New York City mayor Michael Bloomberg, which demonstrates his dislike of the word "maintain."
Apparently, the mayor's favorite word is "unconscionable."
[Meredith R. Miller]
Monday, May 12, 2008
A Colorado appellate court recently held that a "no damages for delay" clause in a construction subcontract was enforceable. The general contractor had a highway construction contract with the Colorado Department of Transportation. The general contractor entered into a subcontract for the earthwork on the project. The subcontract contained a "no damages for delay clause", which provided:
Section 6. Delays. (a) In the event the Subcontractor's performance of this subcontract is delayed or interfered with by acts of the Owner, Contractor or other Subcontractors, he may request an extension of time for the performance of same, as herein provided, but shall not be entitled to any increase in the subcontract price or to damages or additional compensation as a consequence of such delays or interference, except to the extent that the prime contract entitled the Contractor to compensation for such delays and then only to the extent of any amounts that the Contractor may, on behalf of the Subcontractor, recover from the Owner for such delays.
A dispute arose when the general contractor and subcontractor could not agree on the amount of the subcontractor's final compensation for the work. Among other things, the subcontractor sought additional compensation based on alleged delays relating to the construction of a retaining wall and traffic lane closures. The general contractor maintained that this compensation was precluded by the “no damages for delay” clause in the subcontract.
The appellate court affirmed the trial court, and enforced the clause:
We are unaware of any published state court decision in Colorado addressing a “no damages for delay” clause. However, a federal appeals court in a case arising in Colorado and the majority of courts in other jurisdictions that have addressed the issue have generally upheld the validity of such clauses. See W.C. James, Inc. v. Phillips Petroleum Co., 485 F.2d 22, 25 (10th Cir.1973) (observing that “[s]uch clauses are commonly used in the construction industry and are generally recognized as valid and enforceable”); Owen Constr. Co. v. Iowa State Dep't of Transp., 274 N.W.2d 304, 306 (Iowa 1979) (“Such clauses are defended [in cases involving public contracts] on the theory they protect public agencies which contract for large improvements to be paid for through fixed appropriations against vexatious litigation based on claims, real or fancied, that the agency has been responsible for unreasonable delays.”)(citing A. Kaplen & Son, Ltd. v. Hous. Auth., 42 N.J.Super. 230, 233, 126 A.2d 13, 15 (1956)); Maurice T. Brunner, Annotation, Validity and Construction of “No Damage” Clause with Respect to Delay in Building or Construction Contract, 74 A.L.R.3d 187 (1976 & 2007 Cum.Supp.)(collecting numerous state and federal cases upholding “no damages for delay” clauses); see also In re Marriage of Bolding-Roberts, 113 P.3d 1265, 1267 (Colo.App.2005); Kohn v. Burlington N. & Santa Fe R.R., 77 P.3d 809, 811 (Colo.App.2003) (observing that when there are no Colorado decisions, we may look to other jurisdictions, including federal jurisdictions, for guidance).
Nevertheless, “no damages for delay” clauses have been strictly construed against owners or contractees because of the harsh results that may flow from the enforcement of such clauses. See John E. Green Plumbing & Heating Co. v. Turner Constr. Co., 742 F.2d 965, 966 (6th Cir.1984) (applying Michigan law); E.C. Ernst, Inc. v. Manhattan Constr. Co., 551 F.2d 1026, 1029 (5th Cir.1977) (applying Alabama law); Cunningham Bros., Inc. v. City of Waterloo, 254 Iowa 659, 664, 117 N.W.2d 46, 49 (1962).
We are persuaded by these decisions, and we similarly conclude “no damages for delay” clauses are valid and enforceable in Colorado, but they are to be strictly construed against the owner or contractee.
Tricon Kent Co. v. Lafarge North America, Inc., __ P.3d __, 2008 WL 1902514 (Colo. App. May 1, 2008).
[Meredith R. Miller]
[Meredith R. Miller]
It is worth teaching Business Associations just for this case. It is the perfect illustration of the doctrine of inherent authority. It has all of the necessary ingredients: a general agent for an undisclosed principal who exceeds his authority by entering into a contract for goods he was not authorized to purchase. It also has a special added ingredient: Bovril.
As I tell my students, Bovril was developed by French scientists after the Franco-Prussian War because they thought that concentrated beef extract would enhance the fighting ability of French soldiers. In order to demonstrate the effectiveness of this technique, I instruct my students to go to the Google.com home page, enter "French military victories" and then hit the "I'm feeling lucky" button. It's a crowd pleaser.
Anyhew, here's the Limerick:
Watteau v. Fenwick
Inherent authority imposes
Liability where no one discloses
The one whose dinars
Are owed for cigars . . .
And other goods that offend noses.
Sunday, May 11, 2008
Uma Thurman is mad. In fact, I haven't seen her this mad since Michael Madsen shot her in the chest, took her samurai sword and buried her alive. She is no longer mad at Bill. No, no, that's all in the past. Now, she is mad at Lancome, according to the Wall Street Journal, because she alleges that the French cosmetics corporation is continuing to use her image to promote its products after the expiration of a licensing agreement. Fans of movie stars, cosmetics and litigation can find the complaint here.
The WSJ notes that Lancome has filed its own suit against Thurman, apparently claiming that, under the licensing agreement, it is not subject to liability for third-party use of Thurman's image . Lancome issued a statement on Friday in which it said that it would not comment on on-going litigation but claimed that "The use of Ms. Thurman's image after her contract expired, however minor, was neither deliberate nor intentional." Uh huh. Sounds like the pot was already broken when they borrowed it.
Saturday, May 10, 2008
Here's another rumor that is circulating: At the height of the Lewinsky scandal, Bill Clinton (pictured saying "I did not have sex with that woman . . . " -- well, no, not really) promised Hillary that if she stuck by him, he would help her become President. Many people on the Internet openly avow belief in the rumor. For example, here (comment by "Donald"), here (comment by "Janette"), here (comment by "transam76"), here (comment by "Cameron"), and a more obscure reference here ("You see, they really deserve a second eight years. Bill promised Hillary all those years ago.").
I also have intelligent friends who report on this rumor to me with the sort of wide-eyed insistence I usually associate with people recounting their abduction by aliens. The alleged promise is supposed to explain why Bill Clinton has inexplicably been out campaigning for -- of all people -- his wife!
But this is exam season, so who can come up with arguments for why such a promise would or would not be enforceable?
I have heard many versions of a rumor of a contract between Barack Obama and Hillary Clinton. The deal is that she will get out of the race if he will get her campaign out of its debt . . . to her. In other words, it's greenmail: Obama would be paying Clinton to go away.
Yesterday, "The Caucus," the New York Times politics blog reported that Obama "would not rule out the
possibility of helping Senator Hillary Rodham Clinton retire her
campaign debt to bring her into the fold and unify Democrats," although discussions have not yet taken place. Various websites provide versions of the rumor and commentary. For example, Ashish on 411mania.com notes the irony that "Obama would
essentially be using money people donated to his campaign to BEAT
Clinton to pay off the debts Clinton accumulated while trying to beat
Obama." Forbes characterized the plan as a "buyout."
Apparently, that notion had some Obama supporters up in arms, as they do not want their campaign donations to go to Hillary. As "The Caucus" reports, Obama staffers are now saying that there would be a separate fundraising drive to raise money for Hillary's reimbursement.
A scientific poll on Democratic Underground.com suggests that 58% of the people scientifically selected to participate in the poll would oppose any assumption by Obama's campaign of the Clinton debt.
Friday, May 9, 2008
According to the Associated Press, as reported in the Orlando Sentinel, Congress is moving to close a loophole that until now has permitted military contractors to avoid paying taxes and evade the strictures of U.S. employment law by setting up off-shore shell corporations.
According to the report, U.S.-based military contractors have been setting up subsidiaries in places like the Cayman Islands. These subsidiaries then employ U.S. citizens who provide support services for the U.S. military abroad. As foreign corporations doing work abroad, these subsidiaries do not pay social security or medicare taxes for their workers and need not abide by federal labor and anti-discrimination laws. The A.P.'s investigation suggests that the off-shore subsidiaries exist only on paper, without an address or phone number.
The House passed tax legislation two weeks ago that would treat foreign subsidiaries of U.S. government contractors as U.S. corporations. The Senate is now considering the measure. Today's New York Times features an editorial urging passage of the legislation.
On May 30-31, 2008, Emory Law School will be hosting a conference entitled "Teaching Drafting and Transactional Skills: The Basics and Beyond." Given recent discussions on this blog (here) and recently scholarship on the subject (noted here) and scholarly interest in the subject evidenced by other conferences such as the one noted here, this seems a timely event.
More information on the conference is available here.
Tuesday, May 6, 2008
Florida Coastal School of Law's Charles Martin (pictured) recently published The Electronic Contracts Convention, the CISG, and New Sources of E-Commerce Law in 16 Tulane Journal of International and Comparative Law 1 (Fall 2007). Here's the abstract:
Although no non-European Union convention focusing on international electronic commercial contracts is currently in effect, such contracts are growing in number and importance and do not exist in a legal vacuum. The Convention on Contracts for the International Sale of Goods (CISG) has been interpreted by its Advisory Council to apply to such electronic contracts. International law, based on general principles of good faith and equity and on customary international law, is an existing and future source of international commercial electronic contract law. Customary international electronic commerce law is derived from the general practices of businesses contracting through electronic communications that are accepted as law, and from international treaties and model laws, and their interpretations, which have been accepted as authoritative descriptions of such practices. The United States will decide whether or not and how to ratify the Convention on the Use of Electronic Communications in International Contracts (CUECIC) that was proposed by it to the United Nations Commission on International Trade Law (UNCITRAL) and was drafted and approved by UNCITRAL. CUECIC advances further than existing law the legitimacy and functionality of international electronic commercial contracts. U.S. ratification decision makers should recognize this advancement, reinforce the freedom of contract norms promoted by CUECIC, and preserve the legitimacy of customary international law as a supplement to the limited contract formation rules of CUECIC.
Monday, May 5, 2008
Gay Jensen Farms Co. v. Cargill Inc. is a great case for teaching the very important principle that contractual relations, including agency relations, can be implied through conduct. In this case, the Warren Grain & Seed company defaulted on contracts made with farmers for the sale of grain. Because Warren was judgment-proof, the plainitffs went after Cargill on the theory that Warren had become Cargill's agent. The court found Cargill could be held liable as a principal both because of its creditor/debtor relationship and because of its buyer/supplier relationship with Warren. Especially in connection with the former relationship, there was strong evidence that Cargill exercised effective control over Warren's business.
Gay Jensen Farms Co. v. Cargill, Inc.
Warren was deep in the hole,
So it went on the Cargill, Inc. dole.
No simple creditor,
Cargill's a predator,
And must pay, since it had control.
Answer: The kind of person who doesn't need the money in the first place.
One interesting thing about this agreement: In the New York Times article, it seems quite clear that the publishers cannot justify the prices they have been paying for baby pictures, which now frequently exceed $1 million. The Times quotes industry executives as saying that "the most important factors are impossible to measure: the value of being known as the place to go for those pictures, and of keeping them out of a competitor’s hands." It gets clearer still:
Larry Hackett, People’s editor, said, “Last year, we lost a couple of weddings because OK! magazine was willing to spend more money than we thought made sense.” If that sort of thing becomes common, he said, “they’re going to get traction, and I don’t want any competitor to get traction where I can stop it.”
This kind of comment falls into a pattern of grossly inflated contracts that benefit the ultra-rich, something this blog has commented on before. These contracts are not subject to rational defenses. People is now pretty much admitting that it pays more for these photos than "makes sense." The competition, OK!, has yet to make a profit. The high prices are motivated by fear of the competition, which creates a feeding-frenzy dynamic in the bidding and defies conventional market logic.
Sunday, May 4, 2008
The Army Lawyer's January 2008 issue is a special issue devoted to "Contracts and Fiscal Law Developments of 2007 -- The Year in Review. As the Table of Contents indicates, much of the issue is taken up with developments in contracts law.
Scholars have expended considerable energy in the effort to “discover” a normative theory of Contract. This Article surveys that effort and concludes that something fundamental about Contract has been missed and has frustrated the search from the outset. Succinctly, Contract doctrine resists the neat formulation theory requires.
Theorists’ perspectives on Contract may be generalized as attempts to impute either deontology or consequentialism to the Contract law. Focusing largely on deontological constructions of Contract, this Article demonstrates the inconsistencies among the extant heuristics—promise, reliance, and transfer—and more importantly, the failure of any of those constructions to provide a coherent explanation of Contract doctrine. This failure reveals a more fundamental failure of Contract theory generally: Because doctrine is a matter of historical accident rather than “divine” inspiration, efforts to explain doctrine as an outgrowth of some coherent and fundamental purpose are necessarily unavailing, and ultimately obfuscatory.
Contract defies reduction into certain normative terms because Contract doctrine is an amalgam of normative inclinations. Neither pure deontology nor pure consequentialism is the source of all Contract; both rather serve as poles at the ends of a Contract continuum. This Article concludes that the search for the grail—the theory of Contract—heretofore has been misdirected. Our effort to understand Contract in normative terms should begin anew, from the premises offered here.
Jody Kraus's: From Langdell to Law and Economics: Two Conceptions of Stare Decisis in Contract Law and Theory, has just come out in the Virginia Law Review. Here's the abstract:
In his classic monograph, The Death of Contract, Grant Gilmore argued that Christopher Columbus Langdell, Oliver Wendell Holmes, and Samuel Williston trumped up the legal credentials for their classical bargain theory of contract law. Gilmore’s analysis has been subjected to extensive criticism, but its specific, sustained, and fundamental charge that the bargain theory was based on a fraudulent misrepresentation of precedential authority has never been questioned. In this Essay, I argue that Gilmore’s case against the classical theorists rests on the suppressed premise that the precedential authority of cases resides in the express judicial reasoning used to decide them. In contrast, I argue that the classical theorists implicitly presuppose that the precedential authority of cases consists in the best theory that explains their outcomes, even if that theory is inconsistent with the case’s express judicial reasoning. The classical view of precedential authority completely defuses Gilmore’s charge of fraud. In Gilmore’s view, merely demonstrating the inconsistency between the proposition for which the classical theorists cited a case and the express reasoning in that case suffices as proof of misrepresentation. But in the classical theorists’ view, the express reasoning in a case is simply a theory of its precedential authority, which, like any theory, can be wrong. Thus, the classical theorists simply reject Gilmore’s claim that a case cannot properly be cited for a proposition inconsistent with its express reasoning. The real dispute, then, between Gilmore and the classical theorists is over the nature of precedential authority and not the content of contract law.
Having reframed the classic death-of-contract debate, I then trace these competing conceptions of precedential authority through the major schools of contemporary contract theory. I argue that a contract theory’s embrace of one view instead of the other can be explained by the relative priority it accords to each of the two components in a conception of adjudicative legitimacy. A conception of adjudicative legitimacy consists in a theory of what it means for a decision to be based on law and a theory of what is required for law to be justified. I explain why theories according priority to the former tend to subscribe to the precedents-as-outcomes view, while theories according priority to the latter tend to favor the express reasoning view. The Essay concludes by arguing that the economic analysis of contract law subscribes to the precedents-as-outcomes view and therefore is the contemporary jurisprudential successor to the late 19th century classical theorists.
Friday, May 2, 2008
In their new case comment, All Quiet on the CISG Front: Guiliani v. Invar Manufacturing, the Battle of the Forms, and the Elusive Concept of Terminus Fixus, James M. Klotz, Peter Mazzacano and friend of the Blog, Antonin I. Pribetic argue that the CISG gets no respect, no respect at all. Not even in Canada! Here's the abstract from SSRN:
Since Canada adopted the U.N. Convention on the International Sale of Goods (the "CISG") in 1992, international sales practitioners have been patiently waiting for a corpus of Canadian case law to develop. The slow pace of development of case law has been due, in large part, to the failure of litigants and judges to recognize that the CISG is the applicable law in numerous international contract disputes involving the sale of goods. The latest example, the recently reported case of Guiliani v. Invar Manufacturing is a further manifestation of this failure. Not only is this case the latest disappointment in Canadian CISG jurisprudence, the case also begs additional questions: When is contract formation complete? At what point does the "battle of the forms" end, and contract consummation begin? Finally, is there a specific point at which the contract is formed, or is the idea of terminus fixus in contracts an elusive goal? This Case Comment considers these questions within the broader context of the failure in Canadian jurisprudence to give the CISG its day in court.
HT: Antonin Pribetic!
According to the Wall Street Journal (see story "The Ousting of Lurita Doan"), Lurita Doan (pictured), as chief of the General Services Administration, oversaw "tens of billions of dollars in government contracts" with the help of inspectors general. In her two-year tenure as GSA chief, Doan generated a lot of controversy.
In 2006, frustrated with oversight by those inspectors general, Doan proposed to cut the budget of the inspector general's office by $5 million. Doan claimed that she was going after wasteful government spending, despite the fact that the office reported that its oversight had saved the government $1 billion over the previous two years through its watchdog efforts with respect to government contracts. The Washington Post obtained a copy of notes from a GSA staff meeting in which she chided the inspectors general as terrorists: "There are two kinds of terrorism in the US: the external kind; and, internally, the IGs have terrorized the Regional Administrators,"
In January 2007, Doan admitted she made a "mistake" in awarding a no-bid contract to a friend.
In March, 2007, the House Committee on Oversight and Government Reform initiated investigations into Ms. Doan's conduct that may have violated the Hatch Act, which prohibits partisan campaign activities on federal property, when she allegedly directed GSA administrators to "help our [Republican] candidates" in a teleconference with one of Karl Rove's deputies on the line.
A full catalog of Washington Post stories covering Doan's career in public service is available here.
This week, Doan finally resigned from the GSA at the request of the White House. Heckuva job, Doanie.
Thursday, May 1, 2008
Thanks to Joe Hodnicki of the Law Professors Blog Network and to Frank Snyder, whose limitless indulgence permits me to post here, we now have a new topical category for the Limericks fans out there. It has not yet been fully populated, but I hope to do so over the next few weeks. Then, those of you who want to gather the full collection of Limericks for Lawyers can do so by clicking on "Limericks" in our Topical Archive. You can have a look at what's there now here.