Wednesday, May 19, 2010
As always, quality investigative reporting from Above the Law. Apparently, a contracts prof at Cornell told the students that there would be a word limit on the exam, and said it would be "well, maybe 1000 words." Then, once the exam was given, no word limit was stated. The students were unsure whether they needed to stay within 1000 words (and, if so, per question or per the whole exam?) Some students chose to stay within 1000 words, others chose not to.
If you were the dean, how would you resolve this? Read more of the story over at ATL to see how the situation has apparently been resolved.
[Meredith R. Miller]
Tuesday, May 18, 2010
A. Blair Dunn, Stockman's Liability and the Changing Livestock Genetics Market, 73 Tex. B.J. 406 (2010).
Harper Estes & Douglas Prieto, Contracts as Fences: Representing the Agricultural Producer in an Oil and Gas Environment, 73 Tex. B.J. 378 (2010).
Erin E. Gould, Comment, Read the Fine Print: A Critical Look at Oregon's Noncompete and Nonsolicitation Agreement Laws, 88 Or. L. Rev. 515 (2009).
George L. Gretton, Missives by Fax or PDF?, 14 Edinburgh L. Rev. 280 (2010).
Lord Hoffman, The Achilleas: Custom and Practice or Foreseeability?, 14 Edinburgh L. Rev. 47 (2010).
Bryan Hoynak, Note, Filling in the Blank: Defining Breaches of Contract Excepted from Discharge as Willful and Malicious Injuries to Property Under 11 U.S.C. § 523(a)(6), 67 Wash. & Lee L. Rev. 693 (2010).
J.J. Knauff, A Little TLC: Tender, Liability, and Covenants vis-à-vis Recovery of Pre-Notice Defense Costs After PAJ, Inc. v. Hanover Insurance Co. and its Progeny, 16 Tex. Wesleyan L. Rev. 187 (2010).
Tjakie Naudé, The Consumer's "Right to Fair, Reasonable and Just Terms" Under the New Consumer Protection Act in Comparative Perspective, 126 S. Afr. L.J. 505 (2009).
Peter J. Quinn, Comment, A Click Too Far: The Difficulty in Using Adhesive American Law License Agreements to Govern Global Virtual Worlds, 27 Wis. Int'l L.J. 757 (2010).
Daniel Rainer, Note, The Impact of West Tankers on Parties' Choice of a Seat of Arbitration, 95 Cornell L. Rev. 431 (2010).
[Keith A. Rowley]
Monday, May 17, 2010
I tried demanding higher pay, but as the picture at left illustrates, that didn't work. So instead I am going to take a break from blogging about contracts. To be honest, the decision has less to do with the beating that Joe Hodnicki and Paul Caron administered to me, as my co-bloggers cheered them on, than with the fact that I will be on leave next year and will not be teaching contracts. Since I will not be teaching contracts, I likely will not be thinking about contracts, although contracts doctrine will remain in reasonably close proximity to my heart.
Wednesday, May 12, 2010
Over at The Conglomerate, Christine Hurt has helpfully assembled blog posts addressing various issues that have come up in connection with the nomination of Elena Kagan (pictured) to succeed Justice Stevens on the U.S. Supreme Court. Notably absent in all of these posts is any discussion of or any predictions regarding how Justice Kagan will vote on vital contracts law issues.
For example, although Eugene Volokh, Brian Leiter, Paul Campos, and Mark Tushnet have all weighed in on Kagan's scholarship, none have mentioned her complete failure to address any important doctrinal issues in contracts law. Has she written about unconscionability? The battle of the forms? The concept of fault in contract law? The prevalence of promissory estoppel claims? Whether contracts profs should devote one month or two to the doctrine of consideration? One searches her publications in vain for even a hint of interest in any of these subjects. A very disappointing record for someone who could be the deciding vote in future battles over enforceability or interpretation of contracts. Who will set Justice Breyer straight on the consequences of Joe Bananas' actions? Who will take Justice Scalia aside and explain that the unconscionability doctrine is not about protecting the rights of stupid people? We can only hope that the Senate confirmation hearings will be as illuminating as they usually are on such issues.
Professor Hurt points us to Ilya
Somin's post at The Volokh Conspiracy on Dean Kagan's decision not to allow military recruiters to visit Harvard's law school because of the military's "don't ask, don't tell" policy. However, Somin does not mention and Hurt does not note that military recruitment involves contracts. What are we to infer from Kagan's actions about her attitudes towards promoting the negotiation of binding agreements?
Hurt similarly alerts us to various concerns, expressed by Elizabeth Nowicki, Dan Markel and by four law professors who wrote a Salon column after writing letter to White House, relating to Dean Kagan's hiring decisions while at Harvard's helm. Once again, the posts all shockingly fail to address the fact that hiring decisions implicate contracts. Clearly, one's conclusions regarding Kagan's anti-contract tendencies in connection with military recruitment must be balanced against her willingness to enter into contracts in the hiring context. Or do these episodes suggest that Kagan has not yet developed a coherent approach to contracts. Is she a contractual flip-flopper or is her approach characterized by the sort of care and nuance associated with the man she has been selected to replace?
Ann Althouse does nothing to illuminate Kagan's views on contracts in her post about Kagan on the subject of gay marriage.
Nate Oman comes closest to raising this important subject over at Concurring Opinions, where he points out that Kagan's resume is weak on private law issues. Indeed, there has been a remarkable though unremarked prejudice in judicial appointments against those who have devoted their legal careers to such issues. Why was there never a Judge, let alone Justice Karl Llewellyn? Would not Judge Williston have adjudicated with formalist rigor. Would not a Justice Corbin have reached the equitable result in every case argued before him? It is, indeed, an outrage.
Brent White (pictured) has catapulted to the top, debuting at #1 with Beyond Guilt on both lists and already #7 on the hallowed SSRN All Time Top 10 List in Law & Society: Contracts!! Congratulations!! Meanwhile, Walking Away is also racking up the downloads. Brent White is the Lady Gaga of contracts scholarship!!!
RECENT HITS (for all papers announced in the last 60 days)
TOP 10 Papers for Journal of Contracts & Commercial Law eJournal
March 13, 2010 to May 12, 2010
RECENT HITS (for all papers announced in the last 60 days)
TOP 10 Papers for Journal of LSN: Contracts (Topic)
March 13, 2010 to May 12, 2010
There is a Grateful Dead exhibit “currently playing” at the New York Historical Society, with lots of knick knacks on loan from the archives at UC Santa Cruz. (Jon Stewart once did a funny bit about a job listing for an archivist of the collection, though it apparently peeved serious archivists everywhere). Here's more information on the exhibit, including the insights of a sociology professor who has written a book called Deadhead Social Science and sounds like she's study the culture like Jane Goodall studied chimps.
The exhibit was a bit sparse and dissatisfying, and it mostly felt like at $12 excuse to lure you into the gift shop to buy a large peace sign tapestry or small stuffed dancing bear for your kids. (It still beat grading exams, of course). There were a few cool pictures of the Fillmore East, which I suppose were obligatory because it was after all an exhibit at the New York Historical Society.
It should be no surprise that, for me, the most interesting thing at the exhibit was a contract – actually, the notice of an exercise of an option pursuant to a contract. I learned that the Grateful Dead signed their first contract with Warner Bros. in 1966. They were the first rock band signed to the Warner label. The exercise of option (pictured, click to enlarge) was dated 1968 and it extended the terms of the 1966 contract through 1969. There was not a copy (at least that I saw) of the 1966 contract.
In the document, “notice is herby given” to Jerome Garcia and his bandmates that “the undersigned, WARNER BROS. – SEVEN ARTS RECORDS, INC., has exercised and hereby exercises its option under the contract referred to above, for with respect to the Term specified, upon and subject to all of the terms and conditions set forth above and in said contract.” The exercise came with a $30,000 advance and 8% of domestic royalties, and 5% of foreign royalties. The rest, as they say, is history.
More than anything, I came away with a sense that this band was a superb marketing machine and had a really good business sense, or at least someone advising them that did…. and still does.
[Meredith R. Miller]
Tuesday, May 11, 2010
Last month was arbitration month here on the blog, but we just can't help ourselves. On April 16th, the Second Circuit issued its opinion in Harrington v. Atlantic Sounding Inc., intervening in a pitched battle between the Federal Arbitration Act, the FAA, and protections afforded injured seamen currently codified in the Jones Act and the Federal Employer's Liability Act, or FELA.
Plaintiff Harrington had been employed by Weeks Marine for two years before suffering a back injury in April 2005. Harrington left Weeks' employ, but Weeks paid for his medical expenses and made maintenance payments of $20/day. Harrington's doctor prescribed painkillers, which Harrington supplemented, presumably without prescription, by drinking a half-gallon of vodka every two or three days. Despite this therapy, Harrington required surgery to repair a herniated disk. Harrington sought additional support from Weeks and received a "Claim Arbitration Agreement," CAA. Under the CAA, Weeks agreed to advance Harrington 60% of his gross earnings until Harrington was again fit for duty. In return, Weeks agreed to arbitrate any claim he might have against Weeks. After undergoing surgery, Harrington signed the CAA and had it notarized. He told the notary that he knew what he was signing, but he would later claim that he did so under the influence of painkillers and alcohol. The notary's testimony on this subject was confused: the notary testified that Harrington was not impaired but was in pain and spoke incoherently on the rare occasions he chose to do so.
In December, Harrington was still unable to work, and he sought continued assistance from Weeks. Weeks agreed to continue support through January 2006 but required that Harrington sign an Addendum to the CAA. Harrington did so, and brought it to the same notary. Harrington testified that he was at that time drinking two quarts of vodka and six beers a day. Harrington was terminated at the end of January, and he brought suit in June 2006. Weeks moved to dismiss the complaint or to compel arbitration. The District Court denied the motion, finding the arbitration agreement both procedurally and substantively unconscionable. It was procedurally unconscionable because Weeks asked Harrington to sign the CAA when he was in pain and under the influence. It was substantively unconscionable because it forced Harrington to agree to Weeks' claims that it had no liability for his injury.
On appeal, Harrington argued that the CAA was invalid because it was inconsistent with provisions of FELA incorporated in the Jones Act and guaranteeing certain forum-selection rights of seamen. The Second Circuit rejected that argument, noting that the FAA applies in the maritime context and reflects a federal policy in favor of arbitration. The provision of FELA on which Harrington sought to rely is not about arbitration at all and was adopted in 1910, thus predating the FAA and the rise of employment arbitration. The purpose of FELA was to provide that a seaman could bring a claim in a convenient forum and not to preclude arbitration.
The Second Circuit also rejected the District Court's conclusion that the CAA was unconscionable. First, the court noted that the District Court found the CAA substantively unconscionable based on one misleading provision, but the Second Circuit found that misleading language in an agreement goes to procedural, not substantive unconscionability, unless as a result of its operation the provision "shocks the conscience." The Second Circuit was not shocked. The provision said that Weeks was not "currently responsible or liable for any other damages under general maritime law, the Jones Act or any other applicable law." That, the court said, is arguably simply a statement of fact, since liability had yet been adjudicated. Applying New Jersey law, the court concluded that the CAA could not be unconscionable without a showing of substantive unconscionability.
The Second Circuit vacated the District Court's judgment and remanded the case for further proceedings relating to Harrington's incapacity defenses to the enforceability of the CAA and the question of Harrington's potential ratification of the agreement by having received its benefits.
Judge Calabresi (pictured) dissented. He argued that the majority's decision did not "take adequate account of the historic importance and purpose of both the Jones Act and FELA, and of their unique protections for specific categories of workers, such as seamen. . . ." Judge Calebresi recounts the special circumstances that motivated Congress to provide special protections to seamen, including the right to choose unilaterally between a bench and a jury trial. He reads FELA Section 5 as protecting a seaman's "right to bring his claim in any forum that was made eligible to him by statute." Because the CAA deprived Harrington of that right, it was invalid under the Jones Act and FELA. Judge Calebresi would not permit the policy in favor of arbitration to trump the worker-protection values underlying FELA and the Jones Act.
Judge Calabresi would not have reached the unconscionability issue, since he would have invalidated the CAA on statutory grounds. However, had he reached it, he would have agreed with the District Court that the CAA was unconscionable based on his different understanding of New Jersey's "sliding scale" approach to unconscionability.
Monday, May 10, 2010
More on Stolt-Nielsen can be found at the Disputing Blog. A post from University of Missouri Prawf, S. I. Strong can be found here. Another post by Pepperdine Prawf Thomas J. Stipanowich can be found here.
Friday, May 7, 2010
Here’s the deal, according to the Boston Globe: Back in 2006, Bob St. Germain renewed his wireless phone service contract, which included his cellphone and cellphones for his son and daughter. Unbeknownst to St. Germain, the two-year promotional period allowing free downloads had expired, and Verizon was now charging for downloaded kilobytes.
But St. Germain’s son, Bryan, a student at Framingham State College, didn’t realize this, and started downloading a lot of stuff to his phone. The August 2006 bill was for $12,233. When St. Germain called to complain, Verizon told him that since that last bill, he’d run up an additional $5,000 in downloading fees.
“You can’t print what my husband said’’ when the bill came, Mary St. Germain said. “He was very shocked.’’
According to the Globe, Verizon eventually offered to reduce the bill by half. But St. Germain would have none of it. He rejected the offer and Verizon responded by sending the bill to a collection agency.
Verizon officials said that the charges were legitimate and that they have tried to work with St. Germain to resolve the dispute.
“We go to great lengths to educate our customers on their products and services so that they avoid any unintended bills,’’ two Verizon spokesmen wrote in an email to the Globe. Verizon also says the amount of the charges were laid out clearly in St. Germain’s agreement.
* * *
On the one hand, Verizon claims its charges were clearly stated. It’s also agreed to cut the charges down by half.
On the other hand, the St. Germains say the charges are ridiculous, that someone should have let them know that something odd was going on with their account. Others say consumers can’t be blamed for failing to read or comprehend the fine print of a user agreement. It also seems fair to wonder how much it cost Verizon to provide the 816,000 kilobytes of stuff to Bryan Germain’s phone, though telecom companies often argue that demand on their networks, and the costs to expand networks to allow for it, can add up.
Gotcha contracting? Is Restatement (2d) 211 up to the task? Or, should St Germain be held to the old "duty to read"?
[Meredith R. Miller]
Thursday, May 6, 2010
Christina L. Kunz (pictured left) and Carol L. Chomsky (pictured right) have just published their new casebook, Contracts: A Contemporary Approach. Ordinarily, I don't get too excited about new casebooks, but this one is different and worth a look. If you don't have a copy of your own, you can look at substantial chunks of the book on West's website (theirs is the second book listed in the Interactive Casebook series). You really need to look at the sample pages to see for yourself the extent to which this is a departure from standard casebooks. But for those of you pressed for time, here is the marketing blurb.
This casebook allows students to learn more effectively by providing critical reading and thinking questions and well-situated text boxes with supplemental information to explain and expand understanding. With better advance preparation, class can begin at a more sophisticated level and proceed to deeper issues. The material is presented in a visually engaging manner, and the accompanying electronic version provides live links to cited sources and useful websites. Provisions from the Restatement, UCC, CISG, and UNIDROIT appear in text, alleviating the need for a statutory supplement. The book is organized chronologically in the traditional order for contract analysis. It includes classic cases foundational in the historical development of many concepts and newer cases chosen for their teachability and lessons about modern business practices and current issues. “Practice Pointers” provide a transactional focus by explaining the function of common contract clauses. The book includes both essay and multiple choice problems that encourage periodic review.
Wednesday, May 5, 2010
Tuesday, May 4, 2010
Michael J. Bales, Note, The Grapes of Wrathful Heirs: Terminations of Transfers of Copyright and "Agreements to the Contrary," 27 Cardozo Arts & Ent. L.J. 663 (2010).
Henry Barkhausen, Regulating in the Shadow of the U.C.C.: How Courts Should Interpret State Consumer Protection Laws, 119 Yale L.J. 1329 (2010).
Chunlin Leonhard & John M. Wunderlich, Identifying Fungible Goods under the UCC Through a Contextual Lens, 55 Wayne L. Rev. 901 (2009).
Chapin F. Cimino, Review Essay, Private Law, Public Consequences, and Virtue Jurisprudence, 71 U. Pitt. L. Rev. 279 (2010) (reviewing Colin Farrelly & Lawrence B. Solum eds., Virtue Jurisprudence (2008)).
Paul S. Davies, Contract and Unjust Enrichment: A Blurry Divide, 126 L.Q. Rev. 175 (2010).
Michael Feit, Responsibility of the State Under International Law for the Breach of Contract Committed by a State-Owned Entity, 28 Berkeley J. Int'l L. 142 (2010).
George S. Geis, An Empirical Examination of Business Outsourcing Transactions, 96 Va. L. Rev. 241 (2010).
Anna Gelpern & Adam J. Levitin, Rewriting Frankenstein Contracts: Workout Prohibitions in Residential Mortgage-Backed Securities, 82 S. Cal. L. Rev. 1075 (2009).
Nathalie Hofmann, Interpretational Rules and Good Faith as Obstacles to the UK's Ratification of the CISG and to the Harmonization of Contract Law in Europe, 22 Pace Int'l L. Rev. 145 (2010).
David Horton, The Shadow Terms: Contract Procedure and Unilateral Amendments, 57 UCLA L. Rev. 605 (2010).
Marco J. Jimenez, The Many Faces of Promissory Estoppel: An Empirical Analysis Under the Restatement (Second) of Contracts, 57 UCLA L. Rev. 669 (2010).
Jeremy Johnson, Contract: Missed Opportunity?,  N.Z.L.J. 50.
Richard T. Karcher, The Coaching Carousel in Big-Time Intercollegiate Athletics: Economic Implications and Legal Considerations, 20 Fordham Intell. Prop. Media & Ent. L.J. 1 (2009).
Alan C. Lazerow, Comment, Give and "Get"? Applying the Restatement of Contracts to Determine the Enforceability of "Get Settlement" Contracts, 39 U. Balt. L. Rev. 103 (2009).
Todd Evan Lerner, Comment, Playing the Blame Game Online: Who is Liable When Counterfeit Goods are Sold Through Online Auction Houses?, 22 Pace Int'l L. Rev. 241 (2010).
Martin P. Levin, The Contemporary Guide to Negotiating the Author-Publisher Contract, 54 N.Y.L. Sch. L. Rev. 447 (2009/10).
Lee Mason, Rethinking Negligence in Force Majeure Clauses: Risk, Allocation, Fairness and Certainty in Commercial Contracts,  J. Bus. L. 199.
Catherine S. Neal, The Role of the Judiciary in Advancing Public Policy to Promote Ethical Business Practices: Comparing Gray Market Tires to Tiffany Silver Jewelry, 19 Kan. J.L. & Pub. Pol'y 171 (2010).
Brent O'Callahan, Contract Interpretation: Prior Negotiations,  N.Z.L.J. 69.
Pauline Ridge, Pre-Judgment Compound Interest, 126 L.Q. Rev. 279 (2010).
Stephanie K. Savino, Comment, Puppy Lemon Laws: Think Twice Before Buying that Doggie in the Window, 114 Penn St. L. Rev. 643 (2009).
Andrew A. Schwartz, A "Standard Clause Analysis" of the Frustration Doctrine and the Material Adverse Change Clause, 57 UCLA L. Rev. 789 (2010).
Robert E. Scott, Hoffman v. Red Owl Stores and the Limits of the Legal Method, 61 Hastings L.J. 859 (2010).
Irina Slavina, Note, Don't Bet on It: Casinos' Contractual Duty to Stop Compulsive Gamblers from Gambling, 85 Chi.-Kent. L. Rev. 369 (2010).
Jeffrey W. Stempel, The Insurance Policy as Social Instrument and Social Institution, 51 Wm. & Mary L. Rev. 1489 (2010).
Benjamin A. Templin, The Marriage Contract in Fine Art, 30 N. Ill. U.L. Rev. 45 (2009).
Paul Todd, Excluding and Limiting Liability for Misdelivery,  J. Bus. L. 243.
William C. Whitford & Stewart Macaulay, Hoffman v. Red Owl Stores: The Rest of the Story, 61 Hastings L.J. 801 (2010).
Tina M. Woehr, Note, The Use of Parol Evidence in Interpretation of Plea Agreements, 110 Colum. L. Rev. 840 (2010).
[Keith A. Rowley]
Daniel Kirk, a Vietnam War veteran, worked at Millar Elevator Industries beginning in the late 70s. In 2002, Millar's operations were integrated into those of the Schindler Elevator Company. In 2003, Millar was demoted and resigned. Eight months later, Kirk sued, alleging that he had been fired in violation of VEVRAA, the VIetnam Era Veterans Readjustment Assistance Act. That claim was dismissed and the dismissal was affirmed last year.
Meanwhile, Kirk brought suit under the False Claim Act in the name of the U.S. government. In 2007, the government elected not to intervene and Kirk pursued his claim as a relator. His suit alleged that Schindler had entered into hundreds of contracts subject to VEVRAA requirements but that Schindler had failed to comply with those requirements. Among other claims, Kirk alleged that Schindler failed to submit required VETS-100 reports in some years and had filed false VETS-100 forms in others. The district court dismissed the action finding, among other things, that the claim was bared under the FCA, 31 U.S.C. s. 3730(e)(4), which provides that information that has been publicly disclosed cannot be a basis for a FCA claim. The information at issue here related to the allegedly missing and/or falsified VETS-100 forms that Mr. Kirk had discovered through FOIA requests.
The relevant section of the FCA provides:
No court shall have jurisdiction over an action under this section based upon the public disclosure of allegations or transactions in a criminal, civil, or administrative hearing, in a congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation, or from the news media, unless the action is brought by the Attorney General or the person bringing the action is an original source of the information.
The Second Circuit vacated and remanded. There was no question that Mr. Kirk was not the original source of the information, so the only question whether a FOIA request counts as "public disclosure" for the purposes of the statute. The Third Circuit answered that question in the affirmative. The Ninth Circuit concluded that only a FOIA request that results in the production of an "enumerated source;" that is, one of the types of sources expressly named in the statute, creates a jurisdictional bar to an FCA claim. The Second CIrcuit followed the Ninth. It was supported in its position by the U.S. government as amicus curiae.
The full opinion in the case, United States of America ex rel. Daniel Kirk v. Schindler Elevator Corp. can be found here.
Monday, May 3, 2010
I turned up a Limerick from a case I haven't taught in a few years, so I thought I would share it. The connection to contracts law is pretty attenuated, but I'm sure we could find one if we looked hard enough. The issue in the case was whether or not Indiana's anti-takeover statute, the Control Share Acquisitions Chapter of Indiana's Business Corporation law, should be struck down as inconsistent with the Williams Act and the Commerce Clause.
The Williams Act provides for disclosure when any party gains control of over 5% of an issuer's shares. It also provides for certain procedural and substantive limitations on tender offers. The Indiana Act provided additional protections against tender offers for Indiana corporations by requiring a shareholder vote on whether or not the acquiror would be permitted to vote its shares once it crossed certain thresholds of ownership: 20%, 33.3%, 50%.
Judge Posner, writing for the Seventh Circuit and following the Supreme Court's plurality decision in Edgar v. MITE Corp., struck down the Indiana Act as inconsistent with the Williams Act and also with the Commerce Clause. Justice Powell (pictured), writing for the majority of the Supreme Court, reversed. While the Illinois statute at issue in MITE favored existing management over the rights of acquirors and shareholders alike, the Indiana Act was consistent with the aims of the Williams Act, in that it favored neither acquirors nor incumbent management and sought only to protect the rights of shareholders. It's impact on interstate commerce was negligible, and even if there was some slight discriminatory effect, that discrimination was acceptable in light of the internal affairs doctrine, that for the most part leaves the regulation of corporations to the state legislators that create corporations in the first place.
Justice Scalia concurred. He had no disagreement with Justice Powell on the law, but he was irked that Justice Powell ventured a judgment on the aim of the statute. He regarded it as "extraordinary to think taht the constitutionality of the Act should depend on" whether the Court thought that the Indiana Act aimed to protect shareholders of incumbent management. Justice Scalia seemed open to the view that the Indiana Act was idiotic but lawful and should be upheld regardless of its folly. Three dissenting Justices, following Posner's reasoning, would have found the Indiana Act to be a kind of unlawful folly.
CTS Corporation v. Dynamics Corporation of America
The Williams Act does not preclude
A state from protecting its brood.
Posner dislikes it;
Scalia won't strike it:
"It's law, so what if it's crude?"
Since we crowed a few weeks back about our imperialistic tendency to write on topics beyond contracts law (conventionally conceived), we would also like to note the other worthwhile blog posts of interest to our readers: