May 10, 2008
Rumors from the Campaign Trail II
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?
Rumors from the Campaign Trail
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.
May 9, 2008
Congress May Close Loophole for Defense Contractors
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.
Drafting Conference at Emory Law School
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.
May 6, 2008
More International Contracts Law Scholarship
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.
May 5, 2008
Limerick of the Week: Gay Jensen Farms Co. v. Cargill, Inc.
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.
People Is Stoopid: $5 Million Baby Pictures
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.
May 4, 2008
The Army Lawyer: Special Contracts Issue
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.
Peter Alces in University of Illinois Law Review
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.
New Contracts Scholarship
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.