December 10, 2010
Today in History -- December 10
1041 – Byzantine Empress Zoe, who had previously assassinated her husband Romanus III in his bath, puts her adopted son on the Imperial throne as Michael V. When he tries to have her banished, she will have him deposed, arrested, blinded, castrated, and confined to a monastery for the remainder of his life
1541 – Thomas Culpeper and Francis Dereham are executed for having affairs with Henry VIII’s fifth wife, Catherine Howard (left). It’s hard to imagine just how stupid you’d have to be to have an affair with Henry VIII’s wife.
1816 – The United States Senate creates the Committee on Finance as a standing committee. It’s good to know that they keep a close eye on the federal budget.
1817 – Mississippi joins the Union as the 20th U.S. state. What is its official state beverage?
1920 – Automobile pioneer Horace Elgin Dodge, Sr., one of the plaintiffs in the classic corporate law case of Dodge v. Ford Motor Company, 204 Mich. 459, 170 N.W. 668. (1919), dies of pneumonia at the age of 52.
1927 – Announcer George Hay, hosting The National Life & Accident Co’s radio program National Barn Dance on WSM in Nashville, describes the show for the first time as "the Grand Ole Opry."
1935 – Halfback Jay Berwanger of the University of Chicago wins the first Heisman Trophy. Although he will be the first pick in the NFL draft, he will pass up pro football to found a company that makes extruded plastic parts.
1948 – The UN General Assembly, representing all the nations of the world adopts the Universal Declaration of Human Rights, effectively putting an end to human rights abuses around the globe..
(Mississippi’s official state beverage is Milk)
December 8, 2010
Government contracts, then and now
As noted in Today in HIstory, this is the birthday of Eli Whitney, who not only invented the cotton gin but perfected the method of mass production of muskets with interchangeable parts. Wikipedia has an image of one of Whitney's first contracts with the U.S. government:
Government contracts have become substantially longer over the years.
Today in History -- December 8
65 B.C. – Future poet Quintus Horatius "Horace" Flaccus is born, the son of a freed slave at Venusia in southern Italy. Few poetic phrases will ever become as overworked as his "carpe diem."
1660 – Margaret Hughes becomes the first professional actress in English history, appearing as Desdemona in Shakespeare's Othello. She will also become the mistress of Prince Rupert, the "German prince" of Paradine v. Jane. (Right: Margaret Hughes with an early wardrobe malfunction.)
1765 – Eli Whitney is born at Westborough, Massachusetts. His nvention of the cotton gin will make untold millions for Southern planters and Northern mill owners, he will lose nearly all his money in litigation and die broke.
1869 – Thirty-seven year-old Ecuadoran seamstress Narcisa de Jesús Martillo y Morán dies of a fever in Lima, Peru, In 2008 she will be canonized by Pope Benedict XVI.
1954 – Future Yale Law School dean and State Department lawyer Harold Hongju Koh is born at Boston.
1980 – Former Beatle John Lennon is shot and killed outside his home in the exclusive and fabulously expensive Dakota apartment building in New York City, where 5-bedroom apartments can today be had for as little as $19.5 million.
1991 – Meeting in the ancient Belavezhskaya Forest, leaders of Russia, Belarus, and Ukraine sign the agreement dissolving the Soviet Union and creating the new Commonwealth of Independent States.
1993 – President Bill Clinton signs the North American Free Trade Agreement. Critics claim that at least 1 million U.S. jobs have subsequently fled to Mexico, while at least 6 million Mexican workers have fled to the United States.
2004 – Meeting at Cuzco in Peru, delegations from 12 nations create the Union of South American Nations, one of the goals of which is creation of a free trade zone in South America.
December 7, 2010
Today in History -- December 7
43 B.C. – Republican Rome’s greatest lawyer, Marcus Tullius Cicero (left) is murdered by agents of his political rival Marc Antony. His hands and head are cut off and nailed to the rostrum of the Forum.
1295 – Gilbert de Clare, 7th Earl of Gloucester, whose strategic default on his debts involved sacking the Jewish quarter of Canterbury, burning its records, and killing several creditors and bystanders, dies wealthy and respected at Monmouth Castle.
1732 – Actor and theatrical entrepreneur John Rich, having made a fortune off his earlier production of The Beggar’s Opera, opens his new Royal Opera House opens at Covent Garden, London.
1787 – Delaware, whose state capital happens to be the closest to Philadelphia, becomes the first state to ratify the United States Constitution.
1869 – Jesse James and his brother Frank stage their first bank robbery, at the Daviess County Savings Bank in Gallatin, Mo. They kill the cashier but escape with very little cash.
1928 – Future linguist, philosopher, cognitive scientist, political activist, and general man-about-town Avram Noam Chomsky is born at Philadelphia.
1930 – Television station W1XAV in Boston, Mass., broadcasts the first television commercial in the United States, an advertisement for I. J. Fox Furriers. The station is immediately boycotted by PETA.
1941 – The Imperial Japanese Navy launches a surprise attack on the U.S. Pacific Fleet at Pearl Harbor, Hawaii. This will turn ultimately turn out badly for Japan.
1985 – Former U.S. Supreme Court Justice Potter "I know it when I see it" Stewart dies at Hanover, New Hampshire.
December 6, 2010
Patterson on contract and antitrust in standard form contracts
If you were at the Fourth International Conference on Contracts at McGeorge two years ago, you heard Mark Patterson (Fordham) present his work-in--progress exploring the intersection between contract law and antitrust as it relates to standard form contracts. Well, that piece is now out: Standardization of Standard-Form Contracts: Competition and Contract Implications. 52 Wm. & Mary L. Rev. 327 (2010). It's avaliable online. Here's the abstract:
Standard-form contracts are a common feature of commercial relationships because they offer the advantage of lower transaction costs. This advantage of standard contracts is increased when there is a second layer of standardization under which multiple firms agree on a standard contract. Trade associations and similar entities often effect standardization of this kind through collective agreement on a standard contract, sometimes under the aegis of state actors. Multifirm contract standardization can provide not only the usual transaction-cost advantages of standard-form contracts, but also increased competition among firms, because a standard contract makes comparison among firms’ offerings easier. But standardization among firms also eliminates competition on the standardized terms, adding market power to bargaining power and making it less likely that the needs of all parties will be served.
The collective formation of standard-form contracts has recently begun to receive academic attention. This attention, however, has for the most part focused on contract interpretation, emphasizing the fact of standardization and the nature of the standardizing entity. Less attention has been paid to issues of contractual fairness. Moreover, the competitive effects of contract standardization, which implicate primarily antitrust law, are distinct from those addressed by contract law. When sellers agree on contract terms, they eliminate competition among themselves on those terms. This sort of agreement can be undesirable even if the agreed-upon terms of the contract are fair and reasonable in themselves, because the standard contract can eliminate competition among reasonable terms.
Fundamentally, the standardization of contracts is a standardization of the package offered to customers, in much the same way as is standardization of a product, and antitrust law has often been skeptical of such standardization. But contract standardization can also be viewed as altering not the product itself, but the legal background governing the purchase. Under that view, the contract simply standardizes the legal backdrop for what otherwise continues to be a competitive and vigorously bargained transaction. Which of these perspectives more accurately describes contract standardization likely differs from case to case, yet the courts generally have considered neither whether competition law should apply differently to standardization of contracts than to standardization of other "products" nor whether and how contract law should alter the competition analysis.
This Article addresses the issue of contract standardization by exploring the interaction of antitrust and contract law in three basic respects. The first is substantive, focusing on product terms and considering standardization of terms both to reduce costs (interoperability standards) and to improve the contract (quality standards). This focus on terms is consistent with the antitrust approach of the Department of Justice, which has asked whether standardization involves "competitively significant" terms, but as the Article describes this standard is not well defined. The Article then moves to procedure, considering different contexts in which contract standardization occurs and discussing the implications of different means of negotiation. Third, the Article considers the possibilities both of voluntary adoption of contracts and of adoption incentives created by private organizations and by the state. The Article then draws on these discussions to suggest some analytical approaches to contract standardization.
December 5, 2010
Unifying European contract law: a contractual approach
With the euro teetering and growing talk about some countries pulling out of the European Unioin, there's still a great deal of effort going on toward standardizing contract law among the members. In a new paper, Walter Doralt of the Max Planck Institute for Comparative and International Private Law notes that the differing contract regimes among member states have slowed down trade. He has a new paper forthcoming in the Archiv für die Civilistische Praxis called Rote Karte oder grünes Licht für den Blue Button ("An Optional Contract Law for Europe?"). The paper is in German, but here's the English abstract:
The European Commission (EC) has made clear its intention to further harmonise private law in Europe. The state of contract law in Europe is fragmentary. Different levels of consumer protection exist from one Member State to another as relevant European directives only establish a minimum level. As a consequence, businesses serving customers in more than one Member State incur higher costs because of various and different rules that must be complied with. Empirical data suggests that businesses frequently avoid cross-border trade for this reason. The EC is proposing as a solution an optional European contract law regime that could be elected by parties. It would embody a high level of consumer protection and its rules would take precedence over all national rules, including mandatory rules.
This paper argues that such a choice would not be exercised by consumers, but rather by businesses, which will opt for it in their standard contract terms - if at all. A lack of court decisions and little academic literature make success far from certain. Nevertheless, the optional regime could be attractive for businesses, depending on the content of the rules (which are currently being drafted). It will also depend on the scope of the instrument and more specifically on whether a business can apply it to most or all contracts if it so wishes. Therefore, the scope should not be limited to cross-border trade or to e-commerce or to B2B or B2C contracts.
Finally, this paper argues that the potential for simplification and, hence, cost reduction through a single uniform contract law regime may be greater in regular trade than in e-commerce for businesses such as large retailers operating through stores as they could streamline their general terms and their contractual duties according to a single set of rules for all contracts concluded in any Member State of the EU.
For those of us who aren’t fluent in German but who think the abstract is interesting, let’s hope an English translation is forthcoming. A wink is as good as a nod to a blind horse.