ContractsProf Blog

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Best holiday wishes from Bangkok!

FGS

Merger Clause Defeats Breach of Contract Action in Wisconsin

Kudos to the State Bar of Wisconsin for some excellent legal reporting.  Joe Forward, a legal writer for the Bar, has posted a thorough case summary  of a recent contracts dispute, Town Bank v. City Real Estate Development LLC, 2010 WI 134 (Dec. 14, 2010).  The case involved a renegotiated loan agreement between the Bank and the LLC.  Originally, the Bank had signed a commitment letter which obligated it to advance $9 million towards a condominium development, subject to certain financing conditions, which the LLC apparently failed to satisfy.

The parties later entered into a "term credit agreement," under which the Bank loaned only $2.5 million and encouraged the LLC to seek alternative financing for the rest.  The Bank later sought a declaratory judgment that no additional financing was required, and the LLC counterclaimed, seeking the additional $6.5 million.  A jury awarded the LLC $600,000, but the appeals court reversed.

The Wisconsin Supreme Court, by a 5-2 margin, upheld the appeals court.  The decision turned on the Majority's finding that the term credit agreement was unambiguous and contained a merger clause that precluded the LLC from introducing evidence of the Bank's prior commitments to provide additional financing.  Two dissenting justices would have allowed consideration of the earlier commitment letter.  The dissenting justices were concerned that the ruling might create uncertainty in contractual relationships since a merger provision in one agreement between the parties could have unforeseen ramifications for earlier agreements between the parties.  Cleverly mining an amicus brief by the Wisconsin Bankers Association for arguments that cut against the Association's interest in the case, the dissenting justices viewed the commitment letter as a stand-alone agreement that must be subjected to separate interpretation from that of the term credit agreement.  

This might be a nice teaching case for those interested in looking for recent takes on the parol evidence rule.

[JT]

6th International Conference on Contracts

Stetson University College of Law and Texas Wesleyan School of Law are co-sponsoring the 6th Annual International Conference on Contracts, February 18 and 19, 2011, at Stetson’s beautiful campus in Gulfport, Fla. Similar to previous contracts conferences held at UNLV, McGeorge, South Texas, Texas Wesleyan, and Gloucester, England, this conference is designed to offer scholars and teachers at all experience levels an opportunity to present and discuss recently-published papers, forthcoming papers, works-in-progress, and pedagogical innovations, and to network with colleagues from the U.S and around the globe.

The conference hotel will be the Tradewinds Resort in nearby St. Pete Beach. Need we say more?  Well, in case we do need to say more, we'll say this: Stewart Macauley will give the keynote address.  

You can register for the conference here.

[JT}

Paris Hilton Sued for Breach of Contract

I know.  It is hardly news that Paris Hilton (PH) is being sued for breach on contract.  I mean, haven't we already run the same headline here, here, and here.  But this is a new case, and the more pictures we have of PH on the blog, the more visitors we get, so for those of you who are looking for real news about contracts law, you'll have to skip on to one of our non-fluffy posts.  And for those of you genuinely interested in PH, shame on you!

In this case, according to the Courthouse New Service, Le Bonitas of Bologna claims that it paid PH a nearly 100,000 Euro advance in return for the right to use PH's name and image on its clothing.  Under the terms of the agreement, Le Bonitas was to submit each article of clothing to PH Enterprises for approval within 10 days.  No response after 10 days was to be construed as disapproval.  But PH was allegedly too busy to respond to Le Bonitas's requests in a timely manner.  Perhaps they should have followed Dwight Schrute's example and treated silence as acceptance. Perhaps PH would have been too busy to follow up and sue if Le Bonitas had breached the terms of the licensing agreement.

The company is seeking $200,000 in damages for breach of contract.  

 [JT]

 

Weekly Top Ten from the Social Science Research Network

No really hot scholarship --based on downloads, anyway -- this week.  Contracts scholars, this is your chance to break into the big time.

RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of Contracts & Commercial Law eJournal 
October 21, 2010 to December 20, 2010

Rank	Downloads	Paper Title
1	193	Choice of Forum Provisions in Intra-Corporate Litigation: Mandatory and Elective Approaches (The 2010 Pileggi Lecture)  Joseph Grundfest,  Stanford University Law School,  Date posted to database: October 11, 2010  Last Revised: October 27, 2010
2	192	Party Autonomy in Rome I and IΙ from a Comparative Perspective  Symeon C. Symeonides,  Willamette University - College of Law,  Date posted to database: October 25, 2010  Last Revised: October 26, 2010
3	192	The Gold Clause Cases and Constitutional Necessity  Gerard N. Magliocca,  Indiana University School of Law - Indianapolis,  Date posted to database: November 17, 2010  Last Revised: November 21, 2010
4	191	Suing the Government as a 'Joint Employer' - Evolving Pathologies of the Blended Workforce  Steven L. Schooner, Collin D. Swan,  George Washington University - Law School, George Washington University - Law School,  Date posted to database: October 21, 2010  Last Revised: November 16, 2010
5	151	Divided Loyalties: The Attorney’s Role in Bankruptcy Reaffirmations  Gregory M. Duhl,  William Mitchell College of Law,  Date posted to database: November 17, 2010  Last Revised: November 17, 2010
6	140	The Regulation of Surrogate Motherhood in Greece  Aristides N. Hatzis,  University of Athens - Department of Philosophy & History of Science,  Date posted to database: October 10, 2010  Last Revised: October 10, 2010
7	137	Access or Expectation: The Test for Fiduciary Accountability  Robert Flannigan,  University of Saskatchewan,  Date posted to database: October 29, 2010  Last Revised: December 17, 2010
8	127	When Do Fiduciary Duties Arise?  James J. Edelman,  University of Oxford - Faculty of Law,  Date posted to database: October 26, 2010  Last Revised: November 13, 2010
9	104	Contract, Uncertainty and Innovation  Ronald J. Gilson, Charles F. Sabel, Robert E. Scott,  Stanford Law School, Columbia University - Law School, Columbia University - Law School,  Date posted to database: November 20, 2010  Last Revised: December 3, 2010
10	91	Structure and Reform of Corporate Governance in the United Kingdom in Relation to the Shareholder Versus the Stakeholder Theory  Rohit Arora,  Unaffiliated Authors - affiliation not provided to SSRN,  Date posted to database: September 29, 2010  Last Revised: September 29, 2010

RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of LSN: Contracts (Topic) 
October 21, 2010 to December 20, 2010

Rank	Downloads	Paper Title
1	88	Strategic Default: The Popularization of a Debate Among Contract Scholars  Meredith R. Miller,  Touro College - Jacob D. Fuchsberg Law Center,  Date posted to database: October 3, 2010  Last Revised: November 17, 2010
2	86	The English vs. The American Rule on Attorneys Fees: An Empirical Study of Attorney Fee Clauses in Publicly-Held Companies’ Contracts  Theodore Eisenberg, Geoffrey P. Miller,  Cornell University - School of Law, New York University (NYU) - School of Law,  Date posted to database: November 11, 2010  Last Revised: November 15, 2010
3	60	Origin Myths, Contracts, and the Hunt for Pari Passu  Mark C. Weidemaier, Robert E. Scott, G. Mitu Gulati,  University of North Carolina (UNC) at Chapel Hill - School of Law, Columbia University - Law School, Duke University - School of Law,  Date posted to database: July 17, 2010  Last Revised: November 10, 2010
4	50	An Optional Instrument on EU Contract Law: Could it Increase Legal Certainty and Foster Cross-Border Trade?  Martijn W. Hesselink,  University of Amsterdam - Centre for the Study of European Contract Law (CSECL),  Date posted to database: October 23, 2010  Last Revised: December 15, 2010
5	41	An Optional Contract Law for Europe? (Rote Karte oder grünes Licht für den Blue Button) (German)  Walter Doralt,  Max Planck Institute for Comparative and International Private Law,  Date posted to database: November 11, 2010  Last Revised: November 11, 2010
6	36	Rudolf Von Jhering’s Influence on Karl Llewellyn  Robert Whitman, Julie E. Wynns,  University of Connecticut School of Law, Unaffiliated Authors - affiliation not provided to SSRN,  Date posted to database: October 1, 2010  Last Revised: October 1, 2010
7	32	The Double Soul of Promissory Estoppel - A Comparative View  Paolo Pardolesi,  Università degli Studi di Bari - Faculty of Law,  Date posted to database: November 5, 2010  Last Revised: December 8, 2010
8	31	How Organisational and Structural Weaknesses Impacted the Harmonisation Process and What it Implies for European Private Law (Strukturelle Schwächen in der Europäisierung des Privatrechts – Eine Prozessanalyse der jüngeren Entwicklungen) (German)  Walter Doralt,  Max Planck Institute for Comparative and International Private Law,  Date posted to database: November 11, 2010  Last Revised: November 11, 2010
9	21	Arbitration's Suspect Status  Hiro N. Aragaki,  Fordham University - Fordham University Schools of Business,  Date posted to database: November 29, 2010  Last Revised: December 2, 2010
10	19	Autonomy and Paternalism from a Common Law Perspective: Setting Aside Disadvantageous Transactions  Stephen Michael Waddams,  University of Toronto - Faculty of Law,  Date posted to database: October 25, 2010  Last Revised: October 25, 2010

[JT]

Adobe Alleges Breach of a Non-Compete Agreement

As reported in the Deseret News, Adobe Systems is suing c Joshua James, the co-founder of Omniture, a company that Adobe bought in 2009.  James received $80 million in the transaction, and he was also paid handsomely to stay on as an Adobe executive in charge of the Omniture division.  When he left Adobe, he received another substantial one-time payment, but now Adobe claims that he has violated the terms of the agreement he entered into with Adobe at that time.  In a suit filed on December 10th, Adobe alleges that James bought Corda Technologies and now serves as that company's CEO.  Adobe alleges that Corda competes with Adobe and thus that James's purchase of and executive status in Corda violates his non-compete agreement.  In addition, Adobe alleges that James attempted to recruit at least one key employee from Adobe, also in violation of the agreement.  

James denies all wrongdoing, claiming that he has been very careful to abide by the terms of his agreement with Adobe and that he has never attempted to lure employees away from Adobe.  "In fact," he claims, "I have convinced dozens of unhappy Adobe people to stay."  I love that line, because you know someone is really your friend and has your best interests at heart when they tell you to keep the job that is making you miserable.  James also claims that Corda does not compete with Adobe.  Rather, Adobe buys Corda's products.  James chalks it all up to a personal vendetta against him.  But James apparently also filed a suit against Adobe alleging that it was trying to interfere with his work at Corda.  

I would be cautious about suing the company that owns Photoshop.  They can really do a number on you.

[JT]