ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Friday, February 6, 2009

Now in Print: Dispatches from Abroad


In an effort to help raise awareness among this blog's readers, most of whom are (as am I and my fellow bloggers) based in the U.S., this is the second of an irregular series of posts designed to call attention to recent English-language contracts scholarship appearing in journals that SmartCILP generally does not index and to which Westlaw or LexisNexis may not provide full-text on-line access. (Hein Online makes many of these periodicals available -- but typically not the most recent issues.)

J.W. Carter, Intermediate Terms Arrive in Australia and Singapore, 24 J. Contract L. 226 (2008).

David Pearce, Remedies for Breach of a Keep-Open Covenant, 24 J. Contract L. 199 (2008).

Nathan Tamblyn, Damages Under String Contracts for Sale of Goods, [2009] J. Bus. L. 1.

Paul-Erik Veel, Penalty Clauses in Canadian Contract Law, 66 U. Toronto Fac. L. Rev. 229 (2008).

Goh Yihan, Towards a Consistent Approach in Breach and Termination of Contract at Common Law: RDC Concrete Pte. Ltd. v. Sato Kogyo (S) Pte. Ltd., 24 J. Contract L. 251 (2008).

Qi Zhou, Is a Seller's Efficient Breach of Contract Possible in English Law?, 24 J. Contract L. 268 (2008).

[Keith A. Rowley]

February 6, 2009 in Recent Scholarship | Permalink | TrackBack (0)

Thursday, February 5, 2009

Now in Print


Wayne Barnes, French Subjective Theory of Contract: Separating Rhetoric from Reality, 83 Tul. L. Rev. 359 (2008).

Robert Boyle, The Enforceable Prepayment Penalty, 6 DePaul Bus. & Com. L.J. 585 (2008).

James W. Fox, Jr., The Law of Many Faces: Antebellum Contract Law Background of Reconstruction-Era Freedom of Contract, 49 Am. J. Legal Hist. 61 (2007).*

Juliet P. Kostritsky, Uncertainty, Reliance, Preliminary Negotiations and the Holdup Problem, 61 SMU L. Rev. 1377 (2008).

Richard Moberly, Protecting Whistleblowers by Contract, 79 U. Colo. L. Rev. 975 (2008).

Dudi Schwartz, Interpretation and Disclosure in Insurance Contracts, 21 Loy. Consumer L. Rev. 105 (2008).

* - While the cover date for Jamie Fox's article is 2007, the issue's copyright date is 2009.  Oh well, it is a journal of legal history after all. 

[Keith A. Rowley]

February 5, 2009 in Recent Scholarship | Permalink | TrackBack (0)

Madoff Mistake Case?

This story from the NY Times:

In June 2006, Steven Simkin and Laura Blank, who were in the process of a divorce, agreed to evenly split the $5.4 million in an account they had with Madoff Securities, according to a suit that Mr. Simkin filed Tuesday in State Supreme Court in Manhattan. Mr. Simkin gave Ms. Blank $2.7 million in cash, according to the suit, and held onto the account.

All this happened, of course, before federal authorities arrested Mr. Madoff in December on charges that he ran a Ponzi scheme that lost up to $50 billion. Mr. Simkin, much to his chagrin, would discover that his account was “worthless, literally not worth the paper on which the parties’ valuation rested,” the suit claimed, referring to the couple.

Now Mr. Simkin is suing Ms. Blank for the $2.7 million that he said he paid her.

“Steven, the bulk of whose liquid assets were invested with Madoff Securities, has been gravely damaged,” the lawsuit said. “It is only fair and equitable for Laura to shoulder her share of that harm.”

The couple was married for 30 years, separated in January 2002, and divorced in 2006, according to the suit.

During their divorce proceedings, the lawsuit said, Mr. Simkin and Ms. Blank struggled to value many of their assets — their Scarsdale home, his law partnership, her Manhattan apartment — but one of the values that came easily was that of their account with Mr. Madoff. They agreed to an equal split, the suit said. Because the account turned out to be valueless, the lawsuit said, the spirit of the agreement was broken.

“Allowing Laura to retain her asymmetrically large portion of the parties’ true assets would allow her to profit, at Steven’s expense, from Madoff’s fraud,” the suit said. “This is an inequitable benefit conferred on Laura by virtue of the parties’ joint mistake regarding the value of the Madoff account, and an inequitable harm to Steven.”

Ms. Blank did not return a telephone message seeking comment.

Mr. Simkin is a partner at the New York law firm of Paul, Weiss, Rifkind, Wharton & Garrison and chairman of the firm’s real estate department. He has represented lenders in several major real estate transactions.

So, it seems that there was a mutual mistake here: both parties thought the account was worth $5.4 million, but it was, in fact, worthless. However, did Simkin bear the risk of this mistake? Keeping the account entitled him to its (magical) rate of return, so does this mean he also risked any losses?

[Meredith R. Miller][H/T Alan Hornstein]

February 5, 2009 in In the News | Permalink | Comments (1) | TrackBack (0)

Wednesday, February 4, 2009

Apple Sued (Again!) for Breach of Warranty over 3G Speed

Two things near and dear to my heart have converged in one place: contract law and the iphone.  Apple was already facing lawsuits over 3G reception, and now PCWorld reports:

Apple and AT&T Mobility are facing two new lawsuits claiming the speed and infrastructure of the 3G network is insufficient.

The lawsuits were filed in the United States District Court of the Southern District of Florida and in the United States District Court Eastern District of Texas Sherman Division this week.

The lawsuit claims this violates statutory and common law, including consumer protection statutes, negligent misrepresentation, unjust enrichment, and breaches of express and implied warranties.

The lawsuits make eight claims against the companies including Breach of Express Warranty, Breach of Implied Warranty of Fitness of Purpose, Unjust Enrichment, Negligent Misrepresentation, Intentional Misrepresentation, and Breach of Contract.

Well, at least 3G is still so much faster than EDGE (in a fit of irrepressible geekiness, I tried this test myself on the AT&T network):

[Meredith R. Miller]

February 4, 2009 in In the News, Recent Cases | Permalink | TrackBack (0)


SnowI really just wanted to post to say that Valparaiso got hit with about two feet of snow, and it is awesome. Our street is outside of the city (yes, we live in the greater metropolitan Valparaiso area!) and so it has not been plowed and is not likely to be plowed any time soon. And so, the image at left pretty much captures what I see when I look out my window.

But, when I went on wikipedia to get the image in question, I found that my use of it is subject to something called the GNU Free Documentation License, the purpose of which is "to make a manual, textbook, or other functional and useful document "free" in the sense of freedom: to assure everyone the effective freedom to copy and redistribute it, with or without modifying it, either commercially or noncommercially. Secondarily, this License preserves for the author and publisher a way to get credit for their work, while not being considered responsible for modifications made by others."

Now, I often use images on this blog that I find on the Wikipedia Commons. I do so because images on Wikipedia Commons may be freely reused without permission. Increasingly, however, I find that images on Wikipedia are now subject to this GNU license, which is fine, except that it's damned hard to know how to comply with it! The GNU license states:

You may copy and distribute the Document in any medium, either commercially or noncommercially, provided that this License, the copyright notices, and the license notice saying this License applies to the Document are reproduced in all copies, and that you add no other conditions whatsoever to those of this License.

Okay, so, for example, with respect to the image I'm using today, how do I reproduce the license when I copy and distribute an image on this blog? Is it enough that I provided a link to the license (as I have done) or am I supposed to cut and paste the license into each blog post that contains an image subject to the license (which would be ridiculous)?

In addition, the license provides the following:

To use this License in a document you have written, include a copy of the License in the document and put the following copyright and license notices just after the title page:

Copyright (c) YEAR YOUR NAME.

Permission is granted to copy, distribute and/or modify this document under the terms of the GNU Free Documentation License, Version 1.2 or any later version published by the Free Software Foundation; with no Invariant Sections, no Front-Cover Texts, and no Back-Cover Texts.

A copy of the license is included in the section entitled "GNU Free Documentation License".

It seems to me that this "freedom" is more trouble than it's worth.

I do want to give credit where credit is due.

So, thanks, Sean the Spook, for this lovely picture of Long Mynd in Shropshire, taken on February 24, 2005.

It reminds me of home.

[Jeremy Telman]

February 4, 2009 in Miscellaneous | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 3, 2009

Enough Already With the Chickens: Let's Talk about "Visitors"

Visitor_growth_graph1The cosmos aligned perfectly: on the very day I taught ambiguity, the New York Law Journal reported a New York County Supreme Court case about ambiguity. And now I can demonstrate the doctrine is not just for the birds.

In WebMD LLC v. RDA International Inc., the parties entered into a January 2007 internet advertising contract, pursuant to which plaintiff guaranteed " . . . 36,000 visitors to WebMD Health Zone and WebMD related condition centers driving to website." In October and December of that same year, the parties again contracted for advertising space; in the October contract, the plaintiff guaranteed that there would be 6,791,727 impressions, and in the December contract, the plaintiff promised 605,311 impressions.

When defendant failed to pay in full the some $450,000+ owed under the advertising contracts, plaintiff sued. The defendant had acknowledged owing money under the contracts, but asserted the affirmative defense that plaintiff had failed to fully perform its end of the bargain:

According to defendant, an "impression" is an internet user who accesses a website once in a 30 minute time frame; that user may be counted as a second "impression" if, after the 30 minutes, he or she accesses the site again. Defendant asserts that, by counting the same user multiple times, plaintiff failed to provide 36,000 "unique" visitors. Defendant's assertions are based on definitions by the Interactive Advertising Bureau, Media Rating Council, and Advertising Research Foundation, promulgated between 2001 and 2004, which defined a "unique visitor" as an internet user who is only counted once, regardless of the number of times he or she accesses a site. Based on these definitions, defendant maintains that plaintiff only performed 70-80 percent of its contractual promises.

Plaintiff moved for summary judgment and to strike defendant's affirmative defenses. The motions turned on whether the word "visitors" as used in the parties' contracts was ambiguous. The court (Ling-Cohan, J.) held that the term was unambiguous:

It is a settled rule that whether a contract is unambiguous is a question of law that may be decided by the court. * * * In the instant case, the contract clauses have been provided. The contract provision, as cited above, guarantees that plaintiff will provide 36,000 visitors to the site, not 36,000 "unique visitors." Defendant does not dispute the total number of visitors to the site as calculated by plaintiff, but complains that the visitors were not "unique visitors."

Although the term "visitors" is not specifically defined in the contract, the lack of a definition does not, in and of itself, create an ambiguity. As stated in Graev v. Graev (46 AD3d 445, 451 [1st Dept 2007]), "extrinsic evidence cannot be used to create an ambiguity in an agreement, but only to resolve an ambiguity. That one party to the agreement may attach a particular, subjective meaning to a term that differs from the term's plain meaning does not render the term ambiguous [internal citations omitted]."

Here, although undefined, the term "visitors" is unambiguous. The definitions advanced by the organizations quoted by defendant refer to "unique visitors," and do not define the term "visitor" to mean "unique visitor." If defendant wished to be guaranteed "unique visitors" to the site, it should have specified such in the agreement.

Even if the term "visitors" were deemed to be ambiguous, its interpretation remains the exclusive function of the court unless the "determination of the intent of the parties depends on the credibility of extrinsic evidence . . . [internal quotation marks and citation omitted]." Village of Hamburg v. American ref-Fuel Company of Niagara, L.P., 284 AD2d 85, 88 (4th Dept 2001). This is especially true where the contract is entered into by sophisticated and counseled business people.

* * *

In the instant matter, defendant is asking the court to reform the terms of the agreement to conform to a definition provided by an organization that is not a party to the agreement, and has not submitted any evidence or argument that, at the time of the execution of the agreement, the parties intended something other than what appears on the face of the contract. This the court cannot do. * * *

The court granted plaintiff's motions.

WebMD LLC v. RDA International Inc., 102830/08, NYLJ 2/2/09 (New York County Supreme Court Jan. 6, 2009)

[Meredith R. Miller - h/t Patricia Sturm]

February 3, 2009 in Recent Cases | Permalink | TrackBack (1)

Business Associations Limerick of the Week: Austin v. Consolidated Edison

Like Lovenheim, Austin is a case in which a corporation refused to distribute a shareholder proposal in advance of an annual shareholder meeting. Consolidated Edison's labor union proposed new rules that would provide employees with more generous pension benefits. In this case, the basis for management's refusal to distribute the proposal was its claim that the proposal was excludable under SEC Rule 14a-8(i)(7) because it related to ordinary business operations. The court stated that the proposal, while audacious, was still mundane and thus was best addressed through the collective bargaining process rather than through a shareholder vote.

Austin v. Consolidated Edison Co.

Finding the audacious mundane,
The court would not entertain
Plaintiffs' inventions
Relating to pensions,
And dismissed the suit as inane.

[Jeremy Telman]

February 3, 2009 in Famous Cases, Limericks, Teaching | Permalink | Comments (0) | TrackBack (0)

Monday, February 2, 2009

New Way to Occupy Your Time While Unemployed: Sue Your Former Employer

UgolinoThe New York Times reports a recent uptick in the number of lawsuits by laid-off workers against their former employers. The report highlights suits by former Lehman Brothers, Eos Airlines and Heller Ehrman employees, who claim they were not given the notice due under the Worker Adjustment and Retraining Notification (WARN) Act, and suits by former Dell and Ethan Allen employees alleging age and sex discrimination. But the report also suggests that we may be facing a perfect storm of employment litigation. The elements of the storm include new protections for employees, coupled with an administration that may be more inclined to enforce laws on the books and an economic environment in which desperate workers are willing to take extreme measures, including litigation.

[Jeremy Telman]

February 2, 2009 in In the News | Permalink | Comments (0) | TrackBack (0)

This Just In: More on Chickens

We're on something of a chicken roll.

I just learned that we, the United States" are "the Saudi Arabia of chicken."

Stephen Colbert recommends that we form an O-Peck on this clip:

I'm not sure how this relates to Frigaliment but perhaps someone can figure it out.

[Jeremy Telman]

February 2, 2009 in Miscellaneous | Permalink | Comments (0) | TrackBack (0)