ContractsProf Blog

Editor: D. A. Jeremy Telman
Valparaiso Univ. Law School

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Thursday, October 29, 2009

The New Yorker, Blackmail & Contract

David_Letterman The October 19, 2009 issue of The New Yorker had an interesting little “Talk of the Town” item by Lizzie Widdicombe on the whole David Letterman blackmail issue.   Northwestern Law School’s James Lindgren (unfortunately not a ContractsProf) wonders why blackmail is a crime.  I think the Letterman version of Lindgren's hypothetical would run something like this: Suppose Joel Halderman, the alleged Letterman blackmailer, had written a screenplay that would have exposed Letterman’s penchant for sexual liaisons with his employees.  Suppose Letterman had learned of the screenplay, perhaps because Halderman arranged for him to see it, and offered Halderman $2 million to destroy all copies.  Lindgren suggests that, had Halderman accepted such an offer, we would have had an enforceable contract and no crime.  So if the offer runs in the other direction, why is this a crime?

Widdicombe’s piece offers some situations that we might consider akin to blackmail: all commercial transactions, if you are a “Marxist”; divorce proceedings; and consumers who press for settlement by threatening adverse publicity for the corporate defendant.  The offense we take at blackmail is mere evidence of our penchant to wax sanctimonious over other people’s conduct when we engage in similar or worse conduct under color of law and call it virtue, Saul Smilansky seems to suggest.

Epsteinatgmu Richard Epstein rides to the rescue, explaining that we don’t want to live in a world that permits blackmail, because blackmail leads to fraud, “and lying to the world is wrong.”  Of course, I don't know if the world we live in now, in which Letterman voluntarily catalogues his own faults, is any better.  Others acknowledge what Widdicombe calls “the ick factor,” but tie that factor to the fact that Halderman allegedly sought money.  If he had threatened to ruin Letterman’s reputation by going public with the news, there would be no crime.  Libertarian economist Walter Block goes further, arguing that blackmail, even if “yucky” should not be a crime, any more than smoking is a crime. 

I am more interested in the contracts law issue.  I think it is possible that we could use contracts doctrines, such as duress, undue influence and unconscionability to distinguish between enforceable agreements and acts of extortion.  Thoughts?

[Jeremy Telman]

October 29, 2009 in Commentary, In the News | Permalink | Comments (6) | TrackBack (0)

Cosmic Contracts: Forever and Throughout the Universe

 Planets
Great article in today's WSJ titled "Lawyerese Goes Galactic as Contracts Try to Master the Universe."  Read it.  Here's a taste:

Decked out in sequined black and gold dresses, Anne Harrison and the other women in her Bulgarian folk-singing group were lined up to try out for NBC's "America's Got Talent" TV show when they noticed peculiar wording in the release papers they were asked to sign.

Any of their actions that day last February, the contract said, could be "edited, in all media, throughout the universe, in perpetuity."

She and the other singers, many of whom are librarians in the Washington, D.C., area, briefly contemplated whether thy should give away the rights to hurtling their images and voices across the galaxies forever. Then, like thousands of other contestants, they signed their names.

Ms. Harrison figured the lawyers for the show were trying to hammer home the point that contestants have no rights to their performances, "but I think they're just lazy and don't want to write a real contract," she says.

Lawyers for years have added language to some contracts that stretches beyond the Earth's atmosphere. But more and more people are encountering such everywhere-and-forever language as entertainment companies tap into amateur talent and try to anticipate every possible future stream of revenue.

Experts in contract drafting say lawyers are trying to ensure that with the proliferation of new outlets -- including mobile-phone screens, Twitter, online video sites and the like -- they cover all possible venues from which their clients can derive income, even those in outer space. FremantleMedia, one of the producers of NBC's "America's Got Talent," declined to comment on its contracts.

The article provides Prof. Eric Goldman's view of these intergalactic contracts clauses:

[Goldman] says the language could be "a stroke of brilliant foresight." Referring to geographical limits loosely can be dangerous, he says. For instance, "the United States is an ambiguous term...American Samoa, yes or no?"

"Throughout the world" would be one alternative, but that excludes possible future markets, he says. Some day, Mr. Goldman adds, people might ask, "What were they thinking? Why didn't they get the Mars rights?"

Cosmic. 

[Meredith R. Miller]

October 29, 2009 in Contract Profs, In the News | Permalink | Comments (1) | TrackBack (0)

Wednesday, October 28, 2009

Wow: Does the UCC List Kidnapping and Murder as Buyer’s Remedies?

This gets filed in “Whacky Stories” and/or “Chutzpah!”  Apparently, buyer and N.Y. seller have a contract for the construction and sale of an ice cream truck for a price of $18,000.  Buyer requests a refund; seller refuses.  Buyer makes the trip to New York and kidnaps seller and murders seller's friend.  Buyer pleads guilty in exchange for KFC and ice cream.  Now, presumably from prison, buyer sues seller for (1) refund and (2) reimbursement of travel expenses to New York.  We just can't make this stuff up.

[Meredith R. Miller][h/t Isaac Samuels]

October 28, 2009 in In the News | Permalink | Comments (0) | TrackBack (0)

Important Consumer Alert: Baby Einstein DVDs Might Not Make Kids Smarter

Disney, which makes the Baby Einstein series of children’s DVDs, has “set the record straight” with an announcement that it does not advertise the videos as “educational.” Consumer rights groups had accused the company of deceptive advertising because there is no proof that the videos make kids smarter.  The company is actually offering a refund to buyers who purchased a DVD between June 5, 2004, and Sept. 4, 2009.  Here’s the story from Newsday

Beth Kichel and Lisa Kobel are expecting a Baby Einstein windfall - between them the Long Island moms own half a dozen of the DVDs, and the Walt Disney Co. is now refunding $15.99 per video.

A throw-down between The Baby Einstein Company and a Boston child advocacy group has resulted in the bonus for consumers.

"The Campaign for a Commercial-Free Childhood" has been fighting the Einstein division of Disney for years, saying the company's advertising was "deceptive." The advocacy group's position: There's no proof watching the videos, which feature classical music and art for babies and toddlers, makes a child any smarter.

Baby Einstein countered by posting a "set the record straight" announcement on its Web site, saying it doesn't advertise the videos as "educational," and that it has expanded its refund policy, not because it's guilty, but as a show of confidence in the product and to end the fight. "We decided it to leave it up to those consumers," wrote general manager Susan McLain.

Kichel and Kobel are among the consumers ready to cash in. Kichel got her tapes when her daughter, Tali, now 2, was born. "I tried to make her watch them, having heard the hype about how intellectually stimulating they are for the newborns," said Kichel, who lives in Bellmore. "She had no interest in them. I will look for them now to return and get the refund."

Kobel, who lives in Huntington and has a 22-month-old named Jillian, echoed Kichel as the moms played with their children at the indoor playground Once Upon a Treetop in Plainview. "I didn't buy them thinking, 'Oh, it's going to make her smarter,' " Kobel said. "They're a little boring."

[Meredith R. Miller]

October 28, 2009 in In the News | Permalink | Comments (0) | TrackBack (0)

Monday, October 26, 2009

Alan White on In-Class Exercises

Walker-Thomas The Fifth in a Series of Posts by Guest Blogger, Alan White:

Two of my favorite in-class exercises, one on unconscionability and one on remedies, highlight one of the fundamental difficulties of thinking like a lawyer.  Law is incredibly frustrating for first-year students, because it calls simultaneously or alternately for rigorous logical precision and wildly creative indeterminacy. 

After reading Williams vs. Walker-Thomas Furniture and eliciting Judge Skelly Wright’s famous two-part formulation, I ask students to spend fifteen minutes in small groups coming up with a list of facts that either party might wish to prove at the trial on remand.  To organize their thinking, I draw four columns on the whiteboard, two for the merchant and two for the consumer, one each to prove or disprove 1) the absence of meaningful choice and 2) terms unreasonably favorable to the drafter, i.e. procedural and substantive unconscionability.  We then populate the columns with ideas from each of the groups, until the class time runs out.

Before the groups began their work, one student raised her hand and asked me what was meant by “absence of meaningful choice.” One sensed that she was craving the precision we found in remedies calculations.  The requested definition is, of course, the elusive object of the exercise.

This is useful practice, inter alia, in understanding factors and elements.  The two major categories, procedural and substantive unconscionability, are required elements, for mostbut not all courts.  The wide variety of facts one could use to prove either element are factors, necessary but perhaps not sufficient in any case to persuade the judge.  Some students argue that any adhesion contract suffers from absence of meaningful choice, while others will assert equally persuasively that a consumer always has a choice, if only not to contract at all, unless perhaps the contract is for absolutely necessary goods.  The discussion of meaningful choice also provides a rare occasion in Contracts class (compared to say, Criminal or Constitutional Law) to discuss race, gender and class.  This exercise is always mentioned favorably in course evaluations.

Violin On the other end of the determinacy spectrum is a remedies problem supplied by the Macaulay casebook that involves a breach of a contract to sell a violin (see mug-shot at right) and the seller’s damages after resale.  The problem includes incidental damages, consequential damages, expenses saved, and a variety of other confusing numbers.  In the end, a careful application of the rules of U.C.C. §2-706 should result in a single, correct answer, in the form of a numeric damage award.  I ask students to perform this exercise individually, usually at the end of one class to prepare for the next.  I then call on students and ask for their bottom line answer, and continue asking for numbers until I have exhausted the alternatives they have arrived at.  This year there were more than twenty answers in a class of about fifty.  The result of the exercise is dismaying to teacher as well as student, but forces us both to understand that law is not just a matter of endlessly inventing arguments, but also requires careful logic and critical thinking. 

Both exercises force me to remember that learning the law is a long journey, on which first year students are just embarking.  They also remind me that I did learn a few things at the AALS new law teachers’ conference. 

[Posted, on Alan's behalf by Jeremy Telman]

October 26, 2009 in Teaching | Permalink | Comments (1) | TrackBack (0)

Contracts Limerick of the Week: Dunnebacke v. Pittman

Robert_Frost_ As I told my students, this Limerick makes history.  It is the first time that a famous line of iambic pentameter has been slipped into a Limerick.  The case to which it relates is a fairly simple one.  Mr. Pittman and Mrs. Gilligan engaged in discussions about putting up a wall behind her beach-front property to protect it against erosion.  The parties' accounts of these discussions differ.  Mr. Pittman emerged with the belief that he had marching orders,so he constructed a large V-shaped barrier behind Mrs. Gillegan's Wisconsin property while she was in Chicago.  Mrs. Gilligan was distracted because her husband kept yelling "SKIPPER!"  Well, perhaps not.  But in any case, she did not regard their conversation as resulting in an agreement, and she considered the new retaining wall a monstrosity.  

The trial court chided Mr. Pittman for his careless way of doing business and found no meeting of the minds, but it granted Mr. Pittman leave to amend his complaint and to seek recovery based on unjust enrichment.  The Supreme Court of Wisconsin was even less sympathetic, finding that there could be no recovery because Mrs. Gilligan did not in fact benefit from having a hideous concrete wall erected on her property.  Mr. Pittman was simply going to have to absorb his labor and material costs. 

This simple case inspired the following unprecedented legal Limerick:

Dunnebacke v. Pittman

Mrs. Gilligan was not in thrall;
No agreement could she recall.
Pittman may lose his biz,
But something there is
That doesn't love a wall.

After I recited this historic Limerick and informed my students that the last line two lines repeated a line from Robert Frost, one of my students uttered an incredulous, "That's it?!?"  It was the first time one of my Limericks has been heckled.  I have half a mind to go heckle her while she is studying.  

I'll come upon her in the library, and say, "You call that reading?  Come on, turn the page already!  Pink highlighter, eh?  You sure you got the right passages?"  

Yeah.  We stand-up law professors ought to give as good as we get.

[Jeremy Telman]

October 26, 2009 in Limericks, Television | Permalink | Comments (1) | TrackBack (0)