ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Friday, March 28, 2008

Transactional Approaches to Teaching

SaimanI 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 . . .

Continue reading

March 28, 2008 in Commentary, Teaching | Permalink | Comments (3) | TrackBack (0)

Thursday, March 27, 2008

Contract Law: Fighting Threats to Artistic Integrity

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]

March 27, 2008 in In the News | Permalink | TrackBack (0)

Wednesday, March 26, 2008

International Agreements: Once More

Beating_a_dead_horseApologies 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.

[Jeremy Telman]

March 26, 2008 in Commentary, In the News, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Medellin and the CISG

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.

[Jeremy Telman]

March 26, 2008 in Commentary, Recent Cases | Permalink | Comments (7) | TrackBack (1)

Tuesday, March 25, 2008

Medellin and Contracts

Scotus 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.

[Jeremy Telman]

March 25, 2008 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Teaching Transactional Contracts Law

GoldmanOur 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.

[Jeremy Telman]

March 25, 2008 in Recent Scholarship, Teaching | Permalink | TrackBack (0)

Consumer Law Conference at the University of Houston Law Center

HoustonMore 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.

Jeremy Telman

March 25, 2008 in Conferences | Permalink | TrackBack (0)

Monday, March 24, 2008

Mistakes Happen: JP Morgan / Bear Stearns Contract

BurnbigAs 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]

March 24, 2008 in In the News | Permalink | TrackBack (0)

Sunday, March 23, 2008

A Bad Case of Chutzpah

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.

[Jeremy Telman]

March 23, 2008 in In the News, Recent Cases | Permalink | TrackBack (0)