ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Wednesday, November 10, 2010

News in brief

NOVEMBER 10, 2010

PARIS: Ted Forstmann, the head of the management company that represents tennis star Roger Federer, is being sued for breach of contract by a man who claims that he "served as a conduit for hundreds of bets totaling millions of dollars that Forstmann placed on sporting events, including the 2007 French Open final, which Federer lost to Rafael Nadal."

CHICAGO: "A luxury car repair shop [has sued center Eddy Curry of the New York Knicks, claiming that he] racked up more than $73,000 in repair bills on vehicles including a Cadillac Escalade, Mercedes Benz, Range Rover, and Rolls-Royce Phantom. But several checks he issued to the shop were ‘returned by the bank for non-sufficient funds.’’’ Curry has a $60 million contract with the Knicks.

SAN BERNARDINO (Calif.): "Members of the largest union representing California state employees have ratified a new contract with the state."

PHNOM PENH: "Cambodian singer Pich Sophea has denied allegations by . . . the Khmer-Canadian Association that she violated the terms of a contract to perform a series of concerts in Canada."

SANTA ANA (Calif.): "The hearing for the Diocese of Orange/Mater Dei legal complaint against the [California Interscholastic Federation]-Southern Section will be Dec. 20 at the Central Justice Center, Orange County Superior Court. The complaint accuses the CIF-Southern Section of breach of contract, breach of covenant of good faith and fair dealing, breach of fiduciary duties, and unfair business practices in its relationship with Mater Dei athletics."

LONDON: "Construction companies [in Britain] are approaching private sector customers of Rok plc, the failed building group, in a bid to snap up contracts before administrators sell off the business."

PORTLAND (Me.):  "A Navy proposal to award lucrative contracts for a new class of speedy warships to the builders of two competing versions could cut out Maine’s Bath Iron Works from future bidding, Sen. Susan Collins said Tuesday."

WINDSOR (Ont.): An arbitrator has decided that Windsor Regional Hospital acted "unreasonably" in refusing to agree to wage increases for its workers, holding that the wage freeze announced by the Ontario government—relied on by the hospital as justification—was not legally binding and thus that the workers should get a 2 percent increase despite the province’s looming budget deficit.


November 10, 2010 | Permalink | TrackBack (0)

Gee, whiz

1908RandallCountyCourthouseCanyonTexas907TJnsn Our beloved Mother Ship, the Association of American Law Schools, has announced that Elwood Gordon Gee, the President of Ohio State University, will be a featured speaker at the group's annual barn raising and bean feed, which will take place this year in San Francisco.  Gee, who holds the U.S. record for most university presidencies (West Virginia, Colorado, Ohio State, Brown, Vanderbilt, and Ohio State again) is said to be the highest-paid public university president in the country, at over $800,000 a year.  (Left, Gee with OSU's homecoming queen and king.)

He might have some interesting things to say, since he's been battling to cut costs at OSU, where he's been working to evade costly government regulations and bring more commercial practices to the school.  In a recent piece in the OSU student newspaper, Gee says he found that OSU deals annually with about 35,000 vendors, or about 34,000 more than Ford Motor Co. (more vendors mean much more paperwork and administrative time), and argues that burdensome construction regulations drive up costs unnecessarily. 

Those processes are not the only forces hindering OSU's productivity. Government regulations on construction are another hurdle the university must jump.

OSU received permission for ProjectONE, the $1 billion renovation and expansion of the OSU Medical Center, to be exempt from those regulations, Gee said.

"Because of this, we stand to save at the very least 15 percent in total expenditures and will be able to complete the project much more quickly," he said.

Gee said ProjectONE demonstrates the savings and improved productivity afforded to institutions that are free from external control.

People in the private sector make those claims all the time.  It's interesting to see these points raised by a man who's been running nonprofit institutions since I was in law school.


P.S.  One alternative Columbus paper says it has a list of vendors the university wants to cut off, and one of the is the Order of the Coif.

November 10, 2010 in Conferences | Permalink | Comments (0) | TrackBack (0)

Choice of law in Latin American international contracts

Maria Mercedes Albornoz of Mexico’s Centro de Investigación y Docencia Económicas (CIDE), has posted a new paper, Choice of Law in International Contracts in Latin American Legal Systems. Here’s the abstract.

Nowadays, party autonomy is a world-wide accepted principle in the field of international contracts entered into by companies or individuals. In Latin America, however, some countries do not accept it. Unfortunately, there is no international convention unifying the determination of the law of international contracts in force in all Latin American states. Although some of the treaties ratified by these countries do admit the parties’ right to select the lex contractus, the terms and scope of such acknowledgment may vary from treaty to treaty. Also, at the level of national sources of law, while some countries have legislation or case law that expressly allows party autonomy, others are still reticent to the idea of letting the parties choose the law that shall govern their international contracts.

The traditional territorialism of the Latin region of the American continent has caused the assimilation of party autonomy to be very slow. Nevertheless, in recent years, a remarkable phenomenon has taken place: even the most reticent states, certainly compelled by the pressures of international commerce and by the regional integration’s needs, have signed treaties on international arbitration, where the choice of the law applicable to the substance of the controversy is expressly accepted. Although these treaties only apply to international contracts subject to arbitration proceedings, they are helping to, gradually, fissure the states’ resistance to party autonomy. But it is necessary to recognize that the legislators’ and judges’ deep-rooted mentality changes required for a general admission of choice of law in international contracts could still take some years. In the meanwhile, what happens in day-to-day practice? Is there any alternative for the parties who desire to exercise their autonomy by selecting their contract’s law? This might be important both for a foreign party – used to choosing the law of its international contracts – and for a party established in a Latin American country where no choice of law is permitted or where that choice is subject to restrictions.

This article presents a wide panorama of the multilateral treaties and the national laws dealing with the determination of the law of international contracts in force in Latin American countries, including references to the case law available to the public. Furthermore, it focuses on some states’ resistance to adopt party autonomy by exploring the causes of such attitude, the consequences it can bring, as well as the possible options for the affected parties. In addition, it notes a quite recent fissure to this resistance, introduced via international arbitration. Finally, it stresses the need for a uniformed or – at least – harmonized regulation in all Latin American countries, allowing the parties to choose the law of their international contracts. Looking for the legal certainty essential for the development of international commerce, and without neglecting the state’s fundamental interests, different ways for achieving this goal are proposed.


November 10, 2010 in Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 9, 2010

Today in History -- November 10

1444 – Islamic troops under Sultan Murad II crush the allied armies of Hungary and Poland at the Battle of Varna in what will later become Bulgaria. The victory sets the stage for the Muslim conquest of Constantinople.

1674 – Pursuant to the Treaty of Westminster which ended the Third Anglo-Dutch War, England formally acquires the former Dutch colony of Nieuw-Nederland and its capital, Nieuw-Amsterdam.

1766 – The charter of Queen’s College—founded by the Dutch Reformed Church—is is signed by New Jersey royal governor William Franklin. After the War of 1812 it will be renamed for war hero and school benefactor Colonel Henry Rutgers.

1775 – At Tun Tavern in Philadelphia, Samuel Nicholas—commissioned by the Continental Congress only days earlier as the first Captain of Marines—holds the first drive to sign up men for what will become the United States Marine Corps.

1871 – After eight arduous months in the African jungle, reporter Henry Morton Stanley of the New York Herald finally tracks down explorer/missionary Dr. David Livingstone in Ujiji, near Lake Tanganyika. No one knows whether he actually said, "Dr. Livingston, I presume?"

1894 – Future Slovenian lawyer and law school dean Boris Furlan is born at Trieste in the Austro-Hungarian Empire. In 1947 he will be sentenced to 20 years in prison by communist authorities for translating George Orwell’s Animal Farm.

1975 – Seventeen miles from the safety of Whitefish Bay, the Northwestern Mutual Life Insurance Co.’s ore freighter Edmund Fitzgerald sinks suddenly and without a trace, killing all 29 crew members. No distress signal is ever sent.


1997 – WorldCom and MCI Communications announce a $37 billion merger, the biggest in U.S. history to that date. Five years later the whole shooting match will go bankrupt.


November 9, 2010 in Today in History | Permalink | Comments (0) | TrackBack (0)

Smaller government, more tax revenue, cheaper booze . . . .

1908RandallCountyCourthouseCanyonTexas907TJnsn The New York Times says Pennsylvania is looking a privatizing the liquor business in the state. The proposal to get the state out of selling booze (it currently runs some 600 stores statewide) could net the Keystone State $2 billion in immediate revenue, cut several thousand state jobs, and open up a new source of tax revenue from the private sellers.

The Times doesn’t mention the fact, but it might also cut liquor prices for consumers. And allow Pennylvanians to experience real Texas bourbon (left).


November 9, 2010 in In the News | Permalink | Comments (0) | TrackBack (0)

Epstein on getting out of public pension contracts

Chicago’s Richard Epstein, on whether states may be able to repudiate some of their pension liabilities and bring public pensions in line with those in the private sector:

1908RandallCountyCourthouseCanyonTexas907TJnsn I think that the . . . sensible approach is to side-step the bankruptcy proceedings and find ways to attack the union pension obligations directly, given their enormous size. It is odd that these days the only sacred contracts are those which the state enters into with unions for the benefit of their members.

The key question is whether it will be possible to persuade the courts that these pension agreements were the result of political self-dealing, which means that they should be set aside unless it could be shown that the state received fair value for the services rendered when it made those deals. I think that case is bold but winnable, yet only when the situation becomes truly desperate.


November 9, 2010 in Commentary | Permalink | Comments (0) | TrackBack (0)

The difference between argument and contradiction

Via Jake Linford at Prawfsblawg, one of the great (sort of law-related) Python sketches of all time:


Linford also has some good thoughts about how to use sound recordings of appellate arguments to enliven class discussion of cases.


November 9, 2010 in Television | Permalink | Comments (0) | TrackBack (0)

Strange bedfellows

1908RandallCountyCourthouseCanyonTexas907TJnsn Odd couple of the day: A former Alaska governor-turned-housewife, and the President of the World Bank. When you figure that these two seem to agree with China, Russia, and Germany, it may be a sign of the Apocalypse.


November 9, 2010 in In the News | Permalink | Comments (0) | TrackBack (0)

News Briefs: Tuesday

NOVEMBER 9, 2010

MIAMI: "A promoter and booking agent has filed suit against Cuba’s iconic band Los Van Van (below) and its leader Juan Formell to stop a planned U.S. tour."


LONDON: "Goldman Sachs Group Inc. will ask a London court to prevent Natixis SA from terminating bond protection it sold to Goldman at a trial beginning Monday."

SAN DIEGO: California authorities are moving against firms charging up-front fees to help homeowners restructure their mortgages.

KANSAS CITY: "Linebacker Derrick Johnson, who turns 28 later this month, agreed to terms on a five_year contract extension Monday with the Kansas City Chiefs. The deal guarantees Johnson about $15 million and could be worth as much as about $34 million."

LAS VEGAS: "The North Las Vegas Police Officers Association is suing the city of North Las Vegas for alleged breach of contract, saying the city unlawfully removed its president from his position."

INDIANAPOLIS: "Wednesday, Nov. 10, marks the start of the early signing period for NCAA programs, which continues until Nov. 17, giving players a chance to commit early to a school and team."

BOULDER (Colo.): "It was the news many people had been expecting: Dan Hawkins fired from his position as the head football coach of the University of Colorado Buffaloes."

LONDON: The BBC is pursuing breach-of-contract claims against driver Ben Collins a/k/a "The Stig," the "nameless, secret test driver" on a BBC program, after Collins revealed his identity in his autobiography.


November 9, 2010 in In the News | Permalink | Comments (1) | TrackBack (0)

Can't pierce veil for contract claim absent fraud or improper use

A Allegations of breach of contract by a subsidiary corporation aren’t enough to pierce the corporate veil in Massachusetts, absent "allegations of fraudulent or improper use of [the other entitie’s] corporate form in a manner related to the contract. That’s the holding of a recent decision by a Bay State federal court in TechTarget, Inc. v. Spark Design, LLC, et al., No. 10-Civ.-11266 (WGY), 2010 U.S. Dist. LEXIS 114645 (D. Mass. Oct. 27, 2010).

A summary of the decision from New York’s Katten Muchin Rosenman LLP is here.


November 9, 2010 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Monday, November 8, 2010

Today in History -- November 9

1620 – Emigrants aboard the 180-ton cargo vessel Mayflower, trying to find Manhattan Island, instead get their first sign of Cape Cod, Massachusetts.

1857The Atlantic magazine is founded at Boston. It will later publish an article by Charles W. Eliot that will result in Eliot becoming President of Harvard. Eliot will later select Christopher C. Langdell as Dean of the university’s law school. Great oaks from little acorns come.

1862 – Major General Ambrose Burnside assumes command of the Army of the Potomac in the American Civil War. Burnside will prove to be a much better inventor (the Burnside carbine) and railroad executive, than a general. But his whiskers will make him immortal.

1872 – A fire in the basement of a commercial warehouse on Summer Street gets out of control, and within twelve hours more than 60 acres of downtown Boston are destroyed in the worst fire in the city’s history.

1907 – Britain’s King Edward VII gets a birthday present: the Premier Mining Co.’s 530-carat Great Star of Africa diamond. It will later be mounted into the head of the Royal Scepter.

1935 – The Congress of Industrial Organizations is founded in Atlantic City, New Jersey by eight trade unions belonging to the American Federation of Labor.  The CIO and the AFL will battle fiercely for 20 years before merging back again.

1967 – With $7,500 borrowed from family members, 21-year-old college dropout Jann Wenner launches the first issue of Rolling Stone magazine in San Francisco.


1989 – The government of communist East Germany opens checkpoints in the Berlin Wall allowing its citizens to travel to West Germany.


November 8, 2010 in Today in History | Permalink | Comments (0) | TrackBack (0)

Harvard betting on inflation

1908RandallCountyCourthouseCanyonTexas907TJnsn Via Taxprof, the report that the World's Wealthiest Universitty,TM after piling up a cash hoard outside its endowment of over a billion dollars, is now raising another billion from the bond markets.  The money will pay down existing debt and be used for capital improvements.

Investors are very interested.  The rate is just under 5%, and you have to figure that Harvard's credit rating is much better than, say, California's.

All of you who are borrowing money to contribute to that cash hoard can feel feel very proud.  If the university gets enough money, maybe tuition will go down.  Someday.


November 8, 2010 in Law Schools | Permalink | Comments (0) | TrackBack (0)

News Briefs: Monday

NOVEMBER 8. 2010 . . . .

HOLLYWOOD:  "Hollywood actors' unions and major studios announced Sunday they had reached a new, three-year contract averting the kind of strike that paralyzed the US entertainment industry for 100 days in 2008."

BERLIN: " Siemens AG, Europe's largest engineering company, said it is close to signing a contract to supply a Chinese city with electric_vehicle charging infrastructure."

Aa ATLANTIC CITY: "Lawsuits have cost Atlantic City $39 million in just 10 years."

MANILA: "The Court of Appeals Sixth Division has dismissed the petition of IBM to restrain the Pasay Regional Trial Court from hearing the P100-million damage suit filed by the Government Service Insurance System against the computer manufacturer."

MIAMI: The city’s NBA team, already locked in a breach-of-contract battle with Clear Channel Communications, says it has switched stations after giving Clear Channel 30 days’ notice."

LOS ANGELES: "Homeowners Say Loan Mods Led Them To Foreclosure."

NEWARK:  "Morgan Stanley Sued for Foreclosure Fraud."

WASHINGTON (D.C.): "Thompson Hine has filed a $480,000 lawsuit against a Florida-based electronic cigarette company and its president, alleging that they failed to pay for work the firm performed on a suit against the Food and Drug Administration."

LONDON: "Precious metals set new peaks as Bernanke defends [quantitative easing]."

MISSOUlA (Mont.): "A medical marijuana grow operation is suing a Missoula clinic over $50,000 it claims a board member illegally transferred into the clinic's account."

NEW YORK: "With manager Joe Girardi's contract negotiations settled, the Yankees have now turned their attention toward re-signing the heart of their team, shortstop Derek Jeter."

NEW BRITAIN (Conn.): "Attorney Hit With $227,000 Verdict in Fees Dispute."


November 8, 2010 in In the News | Permalink | Comments (0) | TrackBack (0)

Oklahoma attorney fee statute doesn't cover breach of agency K

Oklahoma has a statute that provides:

A "In any civil action to recover for labor or services rendered, or on an open account, a statement of account, account stated, note, bill, negotiable instrument, or contract relating to the purchase or sale of goods, wares, or merchandise, unless otherwise provided by law or the contract which is the subject of the action, the prevailing party shall be allowed a reasonable attorney fee to be set by the court, to be taxed and collected as costs."
Okla. Stat. tit. 12, § 936.  Does the statute permit attorneys' fees in a suit by an insurance company against an agent who, in breach of its agreement, failed to notify the insurer of a claim and thus caused the insurer to incur bad-faith damages?
No, says the Tenth Circuit.  In its recent decision in North American Specialty Insurance Co. v. Britt Paulk Insurance Agency, Inc..No. 10-7010 (U.S. Ct. App. 10th Cir,. Nov. 4, 2010), the court noted that Oklahoma construes § 936 very narrowly, and the insurer's suit is neither a "contract relating to the purchase or sale of goods, wares, or merchandise," an "open account," or any other of the specific categories set forth in the statute.  The insurer was therefore not entitled to recover the quarter-million in attorneys' fees it incurred.

November 8, 2010 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Sunday, November 7, 2010

Today in History -- November 8

A 1308 – The Doctor Subtilis, the Blessed John Duns Scotus, dies at age 43 at the Franciscan studium at Cologne.

1519 – Hernán Cortés enters the Aztec city of Tenochtitlán. Emperor Moctezuma welcomes him with a great celebration, but later will come to regret his hospitality..

1576 – Representatives at the States-General of the Netherlands sign the Pacification of Ghent, the document that will unite them in opposition to Spanish rules.

1836 – Milton Bradley is born at Vienna, Maine. He will forever change American childhood by designing games that do not (like those of his predecssors) teach moral lessons, but rather encourage children to pursue wealth and worldly success.

1848 – Philosopher and logician Friedrich Ludwig Gottlob Frege is born at Wismar in the Duchy of Mecklenburg-Schwerin.

1889 – Montana becomes the 41st U.S. state.

1895 – While working with vacuum tubes in his laboratory, Wilhelm Röntgen discovers a new kind of radiation that, for lack of a better word, he temporarily calls the "X" ray.

1966 – President Lyndon B. Johnson signs into law a bill allowing the National Football League and its rival American Football League to merge without violating the antitrust laws.


November 7, 2010 in Today in History | Permalink | Comments (0) | TrackBack (0)

Weekly Top Ten

SSRN Following are the Top 10 most-downloaded papers from the SSRN Journal of Contract and Commercial Law for the 60 days ending November 7, 2010.  (Last week's ranking in parentheses.)

1 (1)  Two Faces: Demystifying the Mortgage Electronic Registration System's Land Title Theory, Christopher Lewis Peterson (Utah).

2 (2)  Good Faith and Contract Interpretation: A Law and Economics Perspective, Simone M. Sepe (Arizona).

3 (3)  The Need for Insurance Policy Transparency, Daniel Schwarcz (Minnesota).

4 (7)  Choice of Forum Provisions in Intra-Corporate Litigation: Mandatory and Elective Approaches, Joseph Grundfest (Stanford).

5 (6)  Taking Punitive Damages Seriously: Why a French Court Did Not Recognize An American Decision Awarding Punitive Damages and Why it Should Have, François-Xavier Licari (Metz).

6 (5)  Misbehavioral Economics: The Case Against Behavioral Antitrust, Joshua D. Wright (Geo. Mason) & Judd E. Stone (Int’l Center for Law & Economics).

7 (8)  A Moral Rights Theory of the Private Law, Andrew S. Gold (DePaul).

8 (9)  Contractors and the Ultimate Sacrifice, Steven L. Schooner & Collin D. Swan (Geo. Washington).

9 (–)  Should Consumers Be Permitted to Waive Products Liability? Product Safety, Private Contracts, and Adverse Selection, Albert H. Choi (Virginia) & Kathryn E. Spier (Harvard).

10 (10)  Vertical Restraints, Dealers with Power, and Antitrust Policy, Herbert J. Hovenkamp (Iowa).


November 7, 2010 | Permalink | TrackBack (0)

Today in History -- November 7

680 – The Third Council of Constantinople opens. It will subsequently condemn the heresy of monotheletism, the notion that Christ had only a single (divine) will.

A 1492 – With an explosion that can be heard 80 miles away, a flaming 279-pound rock falls from the sky an smashes into a field near the village of Ensisheim in Alsace. Emperor Maximilian I takes it as a good omen for his wars against the French and the Swiss, but he turns out to be mistaken.

1775 – John Murray, Earl of Dunmore, the Royal Governor of Virginia, issues a proclamation offering emancipation to all slaves in the colony who will take up arms on behalf of the Crown against the rebels.

1811 – Near the confluence of the Tippecanoe and Wabash rivers, a mixed force of U.S. regulars and militia under Governor William Henry Harrison defeats a nine-tribe coalition under Tecumseh. Fewer than 1,500 men participate in the battle on both sides—fewer than 100 are killed—but it will lead to the ultimate defeat of Tecumseh’s Confederacy.

1872 – The 300-ton brigantine Mary Celeste sails from New York harbor bound for Genoa with a cargo of 1,700 barrels of commercial alcohol. Less than a month later it will be found drifting of the Azores, its entire crew having disappeared without a trace.

1874 – New York cartoonist Thomas Nast of Harper's Weekly for the first time uses an elephant as a symbol for the U.S. Republican Party.

1907 – Mexican railway engineer Jesús García Corona, 27, saves the entire Sonoran town of Nacozari de Garcia from destruction by by heroically driving a blazing train full of dynamite four miles out of town where it explodes. He is killed in the process.

1916 – Jeannette Rankin of Montana becomes the first woman elected to the U.S. Congress.


November 7, 2010 in Today in History | Permalink | Comments (0) | TrackBack (0)