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Valparaiso Univ. Law School

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Tuesday, February 15, 2011

Charlie Sheen Has No Morals...Clause (allegedly)

Charlie sheen After we discuss ambiguity, contractual interpretation, interpretive maxims and other related topics, I have my first-year Contracts students draft a morals clause for a faux contract between a television network and a performer.  The exercise is an attempt to put the issues "in context" and demonstrate how and why ambiguity actually arises.  We also discuss the general benefits of brevity versus the costs of leaving something out of the contract.  It seems that Warner Brothers may be facing the latter scenario in its contract with actor Charlie Sheen. The clause allegedly left out is a morals clause. 

Most contracts between producers and performers routinely contain a "morals clause," the breach of which entitles the show's producer to fire the performer.  Conduct swept within a morals clause can range from more serious offenses, such as criminal convictions, to any behavior that merely would make the producer or network look bad.  For example, as we've previously reported, Tiger Woods's reported marital infidelities may have triggered the morals clauses in some of his endorsement contracts.  Because Sheen's recent off-camera behavior has made him appear to be, ahem, less than 100% moral, some industry insiders have suggested that Sheen would be fired from the highly-successful CBS show, Two and a Half Men, produced by Warner Brothers.  Not so fast, says Sheen.  Sheen reportedly is telling friends and advisors not to fear because his contract, unlike most others, has no morals clause.  Thus, in Sheen's world, he cannot be fired from the show without his firing being a breach of the contract by Warner Brothers. 

So, if you are tired of hearing about Charlie Sheen's off-camera exploits on this blog or elsewhere, blame  Warner Brothers' lawyers.  If they had included a morals clause in his contract, I am confident that Sheen would not be doing these allegedly immoral things (this sentence brought to you by our sponsor, Sarcasm).

[HRA]

February 15, 2011 in Celebrity Contracts, Current Affairs, In the News, Teaching, Television, True Contracts | Permalink | Comments (2) | TrackBack (0)

AT&T, “Phantom Data”, and Office Space: A Legal Brouhaha

Iphone As reported by CNET News here, consumers have recently filed a class-action lawsuit in the Northern District of California against AT&T for breach of contract, unjust enrichment, and unfair business practices stemming from the “systemically overbilling” of its iPhone and iPad customers for data transactions. For most consumers, independently verifying the data used on their smartphones can be anywhere from extremely difficult to downright impossible. That’s why Plaintiff Patrick Hendricks hired an independent consulting firm to conduct a 2-month study of AT&T’s billing practices of data usage.

The findings should give AT&T customers pause. According to the class action complaint filed on January 27, 2011 in Hendricks v. AT&T Mobility, LLC, AT&T regularly overcharges consumers between 7% and 14%, but in some cases by over 300% for data transfers. Beyond inflated charges, the complaint also alleges charges for what it calls “phantom data traffic”, or data charges when there is no actual data usage by the customer. The consulting firm purchased an iPhone, disabled all web-based data functions, and let the phone sit idle for 10 days. During that period, AT&T billed the account for 2,922 KB of usage, or roughly 35 transactions. In response to the class-action lawsuit, AT&T issued a brief statement, saying, “We intend to defend ourselves vigorously. Transparent and accurate billing is a top priority for AT&T.”

The complaint compares AT&T’s billing practices to “a rigged gas pump that charges for a full gallon when it pumps only nine-tenths of a gallon into your car’s tank.”  Count II of the complaint alleges that AT&T breached its contract with members of the class consisting of all U.S.-based iPhone or iPad users with a usage-based AT&T plan.  AT&T allegedly breached its agreement by rigging its billing system to overstate data usage.  Plaintiffs seek restitution and cessation of the practice.

Fans of the movie Office Space can clearly see the similarities between AT&T's plan, as alleged, and the penny tray at your local 7-11:

Peter Gibbons: [Explaining the plan] Alright so when the sub routine compounds the interest is uses all these extra decimal places that just get rounded off. So we simplified the whole thing, we rounded them all down, drop the remainder into an account we opened.

Joanna: [Confused] So you're stealing?

Peter Gibbons: Ah no, you don't understand. It's very complicated. It's uh it's aggregate, so I'm talking about fractions of a penny here. And over time they add up to a lot.

Joanna: Oh okay. So you're gonna be making a lot of money, right?

Peter Gibbons: Yeah.

Joanna: Right. It's not yours?

Peter Gibbons: Well it becomes ours.

Joanna: How is that not stealing?

Peter Gibbons: [pauses] I don't think I'm explaining this very well.

Joanna: Okay.

Peter Gibbons: Um... the 7-11. You take a penny from the tray, right?

Joanna: From the cripple children?

Peter Gibbons: No that's the jar. I'm talking about the tray. You know the pennies that are for everybody?

Joanna: Oh for everybody. Okay.

Peter Gibbons: Well those are whole pennies, right? I'm just talking about fractions of a penny here. But we do it from a much bigger tray and we do it a couple a million times.

Hopefully, the legal defense team at AT&T can come up with a more convincing argument than Peter Gibbons.

[JT & Jon Kohlscheen]

 

February 15, 2011 in E-commerce, In the News, Recent Cases | Permalink | Comments (1) | TrackBack (0)

Michael Moore Sues for Profits of “Fahrenheit 9/11”


Michael_MooreFilm Director Michael Moore filed suit last week against brothers Bob and Harvey Weinstein for the 2004 documentary “Fahrenheit 9/11” alleging breach of contract, constructive fraud, and breach of fiduciary duty. According to the Los Angeles Times, Moore is now seeking $2.7 in compensatory damages, legal fees and other costs. The complaint asserts that deceptive accounting practices enabled the Weinsteins to siphon off millions owed to Moore and his company, Westside Productions. The Weinstein brothers allegedly deducted payments that were never made, deducted expenses that were never authorized, and diverted to their own entity at least $2.5 million from the revenue pool, which Moore alleges they were to split 50/50 with Moore.

The documentary, a look at President George W. Bush’s foreign policy, grossed a whopping $222 million worldwide, for which Moore received $19.8 million. The Weinstein brothers and their company, Fellowship Adventure Group, also collaborated with Moore on his 2007 documentary “Sicko,” which attempted to do for the U.S. healthcare industry what Moore's earlier film, "Pets or Meat" did for rabbits.  There subsequently seems to have been a falling out, as the Weinsteins were not involved in Moore's most recent film.  

The Weinsteins' attorney claims Moore is just playing on the timing of the Oscar’s, a claim that Moore’s attorney denies- pointing out that Moore does not even have a movie out this year.  But the Weinsteins are more likely pointing to the timing of the suit as seeking to capitalize on the publicity surrounding the Oscar season and more particularly the Weinstein's film, "The King's Speech," which is a front-runner for best picture.  Or perhaps the Weinsteins' attorney is simply under order to mention "The King's Speech" as often as possible in the run-up to the Oscars.  The only thing worse than being talked about is not being talked about.

While Moore’s films have been shrouded in controversy before, Moore’s attorney reports that this is his first suit in his 20 year career.   Look for a new Moore documentary that takes aim at the legal system.  

[JT & Katherine Freeman]

February 15, 2011 in Celebrity Contracts, Film, In the News | Permalink | Comments (0) | TrackBack (0)

Monday, February 14, 2011

Weekly Top Tens from the Social Science Research Network

SSRN RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of Contracts & Commercial Law eJournal 

December 16, 2010 to February 14, 2011

RankDownloadsPaper Title
1 832 Mortgage Servicing 
Adam J. LevitinTara Twomey
2 455 Choice of Law in the American Courts in 2010: Twenty-Fourth Annual Survey 
Symeon C. Symeonides
3 257 Regulating Systemic Risk: Towards an Analytical Framework 
Iman AnabtawiSteven L. Schwarcz
4 148 The Role of Dynamic Renegotiation and Asymmetric Information in Financial Contracting 
Michael R. Roberts
5 144 The Role of Securitization in Mortgage Renegotiation 
Sumit AgarwalGene AmrominItzhak Ben-DavidSouphala Chomsisengphet,Douglas D. Evanoff
6 127 Pregnant Man?: A Conversation 
Darren RosenblumNoa Ben-AsherMary Anne CaseElizabeth F. EmensBerta E. Hernández-TruyolVivian M. GutierrezLisa Chiyemi IkemotoAngela Onwuachi-WilligJacob Willig-OnwuachiKimberly MutchersonPeter Siegelman,Beth Jones
7 110 American Indian Tribal Law 
Matthew L. M. Fletcher
8 96 Policy Options for Progress Towards a European Contract Law: Comments on the Issues Raised in the Green Paper from the Commission of 1 July 2010, COM (2010) 348 Final 
Jürgen BasedowGregor ChristandlWalter DoraltMatteo FornasierMartin Illmer,Jens KleinschmidtSebastian A.E. MartensHannes RöslerJan Peter Schmidt,Reinhard Zimmermann
9 94 Contract as Convention 
F. H. Buckley
10 78 Exit and the American Illness 
Erin A. O'HaraLarry E. Ribstein

RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of LSN: Contracts (Topic)  

December 16, 2010 to February 14, 2011

RankDownloadsPaper Title
1 455 Choice of Law in the American Courts in 2010: Twenty-Fourth Annual Survey 
Symeon C. Symeonides
2 148 The Role of Dynamic Renegotiation and Asymmetric Information in Financial Contracting 
Michael R. Roberts,
3 127 Pregnant Man?: A Conversation 
Darren RosenblumNoa Ben-AsherMary Anne CaseElizabeth F. EmensBerta E. Hernández-TruyolVivian M. GutierrezLisa Chiyemi IkemotoAngela Onwuachi-WilligJacob Willig-OnwuachiKimberly MutchersonPeter Siegelman,Beth Jones
4 94 Contract as Convention 
F. H. Buckley
5 78 Exit and the American Illness 
Erin A. O'HaraLarry E. Ribstein
6 60 Legal Process and the Discovery of Better Policies for Fostering Innovation and Growth 
Henry N. ButlerLarry E. Ribstein,
7 59 When Money Grew on Trees: The Untold Story of Lucy v. Zehmer 
Barak D. RichmanDennis Schmelzer,
8 50 A Toolbox for European Judges 
Martijn W. Hesselink
9 30 Privatizing the Adjudication of International Commercial Disputes: The Relevance of Organizational Form 
Kevin E. Davis
10 26 Promoting Business Success Through Contract Visualization 
Gerlinde Berger-WalliserRobert C. BirdHelena Haapio

[JT]

February 14, 2011 in Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Restitution Rollout and Washington & Lee

ALI Washington and Lee University School of Law and the American Law Institute are pleased to sponsor a conference, Restitution Rollout: Restatement (Third) of Restitution and Unjust Enrichment, on February 25, 2011 in Lexington, Virginia. 

The American Law Institute (ALI), the leading legal-reform organization in the United States, restates basic legal subjects to inform the legal profession what "the law" is in a particular subject. In 2010, the ALI approved the Restatement (Third) Restitution and Unjust Enrichment (2011), the subject of our Restitution Rollout.

W&L Restatement Third restores the full title, Restitution and Unjust Enrichment, that appeared on the Tentative Drafts of the original Restatement but was dropped when the official text was published, thus emphasizing that the subject matter encompasses the independent body of law of unjust enrichment, and not simply the remedy of restitution.

At the conference, ALI Reporter Andrew Kull and ALI Director Lance Liebman will introduce the Restatement Third of Restitution. They will be joined by leading Restitution and Contracts scholars including Joe Perillo, Lionel Smith, Peter Linzer, and Caprice Roberts, among others.

Sponsored by the W&L Frances Lewis Law Center, the American Law Institute, and the W&L Law Review. CLE credit available.

For the full seminar agenda and biographies of the participants, you can click on the conference link above.

[JT]

February 14, 2011 in Conferences | Permalink | Comments (0) | TrackBack (0)

Introducing the ContractsProf Blog Interns!

Jon Kohlscheen   Katherine_Freeman

  JV

 

 

 

 

 

We are pleased to announce that, through the good offices of the Valparaiso University School of Law, the blog now has three student research assistants who will toil mightily to bring the world the latest in contracts law developments.  

They are, from left to right, Jon Kohlscheen, Katherine Freeman and Jared Vasiliauskas.  All three are first year students at the Valparaiso University School of Law, fresh with enthusiasm for contracts law, having just completed our one-semester, four credit course in the subject.  

Our readers can expect to see the products of their work on the blog beginning this week.

[JT]

February 14, 2011 in About this Blog | Permalink | TrackBack (0)

Conference Announcement: Contract as Promise at 30

Charles_Fried In honor of the 30th anniversary of the publication of Charles Fried's Contract as Promise, the Suffolk University Law School will be hosting a conference on March 25, 2011.  Conference details, including a full agenda/schedule, are available here,  From their website, here is the introduction:

ABOUT THE PROGRAM

In 1981, Professor Charles Fried published a book on contract theory entitled Contract as Promise. For almost thirty years, the book has been the seminal work on the moral or deontological justification for the state's enforcement of private promises. No scholarly discussion of the field can be complete without addressing its claims, whether one agrees or not with its original and provocative stand. Suffolk University Law School will mark the thirtieth anniversary of the book's publication with a day-long symposium. Distinguished contract theorists will offer papers and commentary, followed by reflections from Professor Fried. Participants presently scheduled include the Honorable Richard Posner, Randy Barnett, Barbara Fried, T.M. Scanlon, Jean Braucher, Richard Craswell, Jody Kraus, Carol Chomsky, Avery Katz, Henry Smith, Lisa Bernstein, Seana Shiffrin, Daniel Markovits, Juliet Kostritsky, John C.P. Goldberg, Rachel Arnow-Richman, Curtis Bridgeman, Nathan Oman, Roy Kreitner, Gregory Klass, and Robert Scott. This is an opportune moment to step back, review the alternative approaches to contract theory that have developed since 1981, and to offer views about future doctrinal or inter-disciplinary developments, whether based in moral philosophy, welfare economics, sociology, or other disciplines. The papers and proceedings will be published in a forthcoming issue of the Suffolk Law Review.

[JT] 

 


February 14, 2011 in Conferences | Permalink | Comments (0) | TrackBack (0)

Thursday, February 10, 2011

Wisconsin Contracts Group Conference in October

UW The Wisconsin Contracts Group and the Wisconsin Law School announce a contracts conference to be held at Wisconsin Law School on October 21-22, 2011.  The title of the conference is: Empirical and Lyrical: Revisiting the Contracts Scholarship of Stewart Macaulay.  A website with details about the conference, including a brief description of paper topics, has been established.   Sixteen papers will be presented at the conference, by the following scholars: David Campbell, Robert W. Gordon, Ethan Leib, Brian Bix, Jay Feinman,  Gillian Hadfield, Claire Hill, Charles Knapp, Deborah Post, Edward Rubin, Carol Sanger, Robert Scott, D. Gordon Smith, Josh Whitford and Li-Wen Lin, John Wightman and William Woodward.  The conference will conclude with a banquet on Saturday, October 22, at which Stewart Macaulay will give a talk.

    All faculty and academic staff at any university are welcome to attend.  There is no conference fee.  Pre-registration is required for the conference and for the conference banquet.  For more information, see the website linked above.  Questions about registration, etc., should be directed to Pam Hollenhorst, Conference Coordinator, at pshollen@wisc.edu.  Other questions about the conference should be directed to Bill Whitford, at whitford@mailplus.wisc.edu.

[JT]

February 10, 2011 in Conferences | Permalink | TrackBack (0)

Wednesday, February 9, 2011

Is Miss San Antonio in Breach of Contract because She Gained Weight?

Domonique Ramirez, a teenage “beauty queen,” has sued the Miss Bexar County Organization, claiming that she has been unfairly stripped of her title as “Miss San Antonio.”  The peagant organizers sent Ramirez’ parents an email revoking her crown.  They then declared the paegent runner-up the new Miss San Antonio.  Ramirez has sued for her crown back.  A judge issued a temporary restraining order against the paegant’s organizers, preventing them from giving the title to the runner-up while the lawsuit is pending.

The pageant organizers say that Ramirez violated the terms of her contract, did not attend required events, showed up late to appearances and gained weight.  According to ABC:

“As a Miss San Antonio reigning queen, she has to live up to our rules and regulations and the standards of our contract," said Linda Woods, the pageant board's spokeswoman.

Woods accused Ramirez of skipping pageant-sanctioned events to attend unauthorized paid appearances.

In the media, Woods has suggested one of the reasons Ramirez lost her title was because she had gained weight.

"She was doing a photo shoot and asked to wear her wardrobe from the competition, but it did not fit her. I told her we need to get you on an exercise program. We need to get ready to compete for Miss Texas, just like any elite athlete," Woods told ABCNews.com.

Ramirez's lawyer, Luis Vera of the League of United Latin American Citizens, called the pageant's reasons for axing the teenager "lies."

"It's just total lies. They make things up one after another," Vera said.

The lawyer said the board violated the terms of its contract and is punishing Ramirez for their errors.

"The contract says she will be chaperoned and driven to every appearance and that her parents are not allowed to attend," he said. "Then they would call her and say she needs to get to events on her own. At the time she just turned 16, how is she supposed to get there without her parents?"

Here’s a video clip about the story:

These tween and teen beauty contests seem to be very popular in many locations across the U.S. (and, heck, maybe they are popular in the NY Metro area where I grew up but I just didn’t, well, fall within the demographic).  In any event, I think they should give the crown to Olive from Little Miss Sunshine:

 [Meredith R. Miller]

February 9, 2011 in In the News, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Ambassador Seeks New Posting

Yesterday's New York Times reported that Beverly Hills, California has let go its ambassador, Gregg Donovan, who for the past decade has greeted tourists in a top hat and red tailcoat with polyglot shouts of "Welcome to Beverly Hills!"  According to the Times, the official position of Beverly Hills Ambassador was created to help establish a friendlier atmosphere on Rodeo Drive after it developed a bad reputation when a fictional storekeeper demeaned a fictional prostitute played by Julia Roberts in a film about how the real lives of prostitutes are really quite a bit like the lives of every other character Ms. Roberts has ever portrayed.  This is a bit confusing, since as the clip below illustrates, the simple solution is not to have the government throw money at problems by hiring yet another public employee at taxpayer expense.  The solution, as any self-respecting woman knows, is to have a rich guy pay to enhance the self-esteem of working women.

 

Although Mr. Donovan is "without a doubt" the human being most photographed by tourists in the world, we have no copyright-free photograph to share, perhaps in part due to a contract dispute over Beverly Hills' right to continue to use Mr. Donovan's image in its brochures.  When Beverly Hills gave Mr. Donovan his notice, it sent him a separation agreement in which he was to permit the city to continue to use his image in its promotional materials.  Mr. Donovan refused to sign.  According to the Times, he will still occasionally shout greetings to people on Rodeo Drive, just out of sheer love of his vocation, but he is also looking for other gigs. 

Anybody out there looking for an ambassador?  New York?  Hollywood?  Las Vegas? 

Actually, after The Paper Chase, perhaps Harvard Law would benefit from an ambassador in Mr. Donovan's mold. 

[JT]

February 9, 2011 in Commentary, Film Clips, In the News | Permalink | Comments (0) | TrackBack (0)

New in Print

Pileofbooks Michael J. Borden, The Promissory Character of Adequate Assurances of Performance, 76 Brooklyn L. Rev. 167 (2010)

Anthony, G. Eonas & Erin M. Secord, Exploring the Creditor's Duty of Reasonable Care Under UCC Article 9 Amidst Recession and Revision, 89 Or. L. Rev. 623 (2010)

Daniel Gottschalk, Weaseling out of the Deal: Why Buyers Should Be Able to Invoke Material Adverse Change Clauses in the Wake of a Credit Crunch, 47 Houston L. Rev. 1051 (2010)

Andrew J. Kazakes, Protecting Absent Stakeholders in Foreclosure Litigation: the Foreclosure Crisis, Mortgage Modification, and State Court Responses, 43 Loy. L.A. L. Rev. 1383 (2010)

John F. O'Connor, Contrators and Courts Martial, 77 Tenn. L. Rev. 751 (2010) 

[JT[

February 9, 2011 in Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 8, 2011

TIME OUT in the Fifth Circuit

Surgery On January 12, 2011, the Fifth Circuit issued its opinion in a contracts case, Cole v. Sandel Medical Industries.  Sandel makes medical supplies that are supposed to improve hospital safety.  In order to encourage innovation, Sandel offers small payments -- up to $4000/year for five years -- to medical professionals who submit ideas via Sandel's website.  Nearly half of the company's products are the result of such submissions, and in only one case, when the submitted idea was patentable, did Sandel pay a more substantial royalty.

After being informed by a Sandel sales rep., Jeff Penfield, of the gist of Sandel's willingness to pay for ideas, Cole, a San Antonio nurse, submitted an idea related to Sandel's TIME OUT products, which help remind medical professionals to double check that they have the right patient, the right procedure, the right -- that is, correct -- limb, organ, etc. before proceeding.  The form on which she submitted her idea -- basically a bright orange TIME OUT warning sign -- contained the following terms:

I do not give any rights in my submission to Sandel Medical Industries L.L.C.(SMI). Any rights in my submission may be givento SMI only in a future agreement between SMI and myself.

I agree not to reveal my submission (verbally or in writing) to anyone other than SMI, for one year from the date of this agreement.

SMI agrees not to use, sell, or disclose to others, any of the submitter’s information provided above. SMI accepts this submission only for evaluation. SMI and submitter shall have no further obligations to each other, unless a seperate [sic] agreement is entered into.

One year after telling Cole that it was not going to pursue her idea, Sandel began marketing an orange TIME OUT surgical towel that it later acknowledged was the product of Cole's suggestion.  Still later, Sandel claimed that it was also paying someone else for the idea and was only offering Cole a contract to maintain good relations with submitters.  Sandel offered Cole its standard compensation agreement.  She made a counteroffer, which Sandel rejected, and she then sued seeking $10 million for breach of contract and fraud.

Affirming the District Court's dismissal of the case, the Fifth Circuit found that the internet form on which Cole submitted her idea constituted nothing more than an unenforceable agreement to agree, as it lacked a price term.  The Fifth Circuit rejected Cole's alternative argument that Penfield had made an offer when he told her of Sandel's reimbursement policy which she had accepted by submitting her idea.  The Court reasoned that this offer, if such it was, was revoked by the internet submission form, which the Court construed as as superseding offer.

[JT]

February 8, 2011 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Weekly Top Tens from the Social Science Research Network

SSRN RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of Contracts & Commercial Law eJournal

December 9, 2010 to February 7, 2011

Rank

DownloadsPaper Title
1 793 Mortgage Servicing 
Adam J. LevitinTara Twomey
Georgetown University - Law Center, National Consumer Law Center, 
Date posted to database: December 18, 2010 
Last Revised: January 20, 2011
2 437 Choice of Law in the American Courts in 2010: Twenty-Fourth Annual Survey 
Symeon C. Symeonides
Willamette University - College of Law, 
Date posted to database: January 11, 2011 
Last Revised: January 25, 2011
3 211 Regulating Systemic Risk: Towards an Analytical Framework 
Iman AnabtawiSteven L. Schwarcz
University of California, Los Angeles (UCLA) - School of Law, Duke University - School of Law, 
Date posted to database: January 6, 2011 
Last Revised: January 7, 2011
4 137 The Role of Securitization in Mortgage Renegotiation 
Sumit AgarwalGene AmrominItzhak Ben-DavidSouphala Chomsisengphet,Douglas D. Evanoff
Federal Reserve Bank of Chicago - Economic Research, Federal Reserve Bank of Chicago, Ohio State University - Finance Department, Fisher College of Business, Office of the Comptroller of the Currency - Economics Dept - Credit Risk Analysis Division, Federal Reserve Bank of Chicago, 
Date posted to database: January 17, 2011 
Last Revised: January 26, 2011
5 136 The Role of Dynamic Renegotiation and Asymmetric Information in Financial Contracting 
Michael R. Roberts
University of Pennsylvania - The Wharton School - Finance Department; National Bureau of Economic Research (NBER), 
Date posted to database: December 31, 2010 
Last Revised: December 31, 2010
6 122 The Uncorporation and the Unraveling of 'Nexus of Contracts' Theory 
Grant M. HaydenMatthew T. Bodie
Hofstra University - School of Law, Saint Louis University School of Law, 
Date posted to database: December 10, 2010 
Last Revised: December 15, 2010
7 122 Pregnant Man?: A Conversation 
Darren RosenblumNoa Ben-AsherMary Anne CaseElizabeth F. EmensBerta E. Hernández-TruyolVivian M. GutierrezLisa Chiyemi IkemotoAngela Onwuachi-WilligJacob Willig-OnwuachiKimberly MutchersonPeter SiegelmanBeth Jones
Pace Law School, Pace University - School of Law, University of Chicago Law School, Columbia Law School, University of Florida Levin College of Law, Unaffiliated Authors - 
affiliation not provided to SSRN, University of California, Davis - School of Law, University of Iowa College of Law, Unaffiliated Authors -affiliation not provided to SSRN, Rutgers School of Law-Camden, University of Connecticut - School of Law, Unaffiliated Authors - affiliation not provided to SSRN
Date posted to database: December 17, 2010 
Last Revised: January 5, 2011
8 85 Contract as Convention 
F. H. Buckley
George Mason University - School of Law, Faculty, 
Date posted to database: January 16, 2011 
Last Revised: February 1, 2011
9 72 Exit and the American Illness 
Erin A. O'HaraLarry E. Ribstein
Vanderbilt University - Law School, University of Illinois College of Law, 
Date posted to database: January 23, 2011 
Last Revised: February 4, 2011
10 56 Sovereign Snake Oil 
Anna GelpernG. Mitu Gulati
American University Washington College of Law, Duke University - School of Law, 
Date posted to database: January 6, 2011 
Last Revised: February 7, 2011

RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of LSN: Contracts (Topic)  

December 10, 2010 to February 8, 2011

RankDownloadsPaper Title
1 441 Choice of Law in the American Courts in 2010: Twenty-Fourth Annual Survey 
Symeon C. Symeonides
Willamette University - College of Law, 
Date posted to database: January 11, 2011 
Last Revised: January 25, 2011
2 136 The Role of Dynamic Renegotiation and Asymmetric Information in Financial Contracting 
Michael R. Roberts
University of Pennsylvania - The Wharton School - Finance Department; National Bureau of Economic Research (NBER), 
Date posted to database: December 31, 2010 
Last Revised: December 31, 2010
3 122 Pregnant Man?: A Conversation 
Darren RosenblumNoa Ben-AsherMary Anne CaseElizabeth F. EmensBerta E. Hernández-TruyolVivian M. GutierrezLisa Chiyemi IkemotoAngela Onwuachi-WilligJacob Willig-OnwuachiKimberly MutchersonPeter SiegelmanBeth Jones
Pace Law School, Pace University - School of Law, University of Chicago Law School, Columbia Law School, University of Florida Levin College of Law, Unaffiliated Authors - 
affiliation not provided to SSRN, University of California, Davis - School of Law, University of Iowa College of Law, Unaffiliated Authors -affiliation not provided to SSRN, Rutgers School of Law-Camden, University of Connecticut - School of Law, Unaffiliated Authors - affiliation not provided to SSRN
Date posted to database: December 17, 2010 
Last Revised: January 5, 2011
4 85 Contract as Convention 
F. H. Buckley
George Mason University - School of Law, Faculty, 
Date posted to database: January 16, 2011 
Last Revised: February 1, 2011
5 73 Exit and the American Illness 
Erin A. O'HaraLarry E. Ribstein
Vanderbilt University - Law School, University of Illinois College of Law, 
Date posted to database: January 23, 2011 
Last Revised: February 4, 2011
6 51 Legal Process and the Discovery of Better Policies for Fostering Innovation and Growth 
Henry N. ButlerLarry E. Ribstein
George Mason University - School of Law, Faculty, University of Illinois College of Law, 
Date posted to database: January 14, 2011 
Last Revised: January 17, 2011
7 46 A Toolbox for European Judges 
Martijn W. Hesselink
University of Amsterdam - Centre for the Study of European Contract Law (CSECL),
Date posted to database: December 17, 2010 
Last Revised: February 2, 2011
8 29 Privatizing the Adjudication of International Commercial Disputes: The Relevance of Organizational Form 
Kevin E. Davis
New York University (NYU) - School of Law, 
Date posted to database: January 15, 2011 
Last Revised: January 15, 2011
9 24 Promoting Business Success Through Contract Visualization 
Gerlinde Berger-WalliserRobert C. BirdHelena Haapio
ICN Business School, University of Connecticut - Department of Marketing, Lexpert Ltd, 
Date posted to database: January 21, 2011 
Last Revised: January 21, 2011
10 20 'One Truth is Clear, Whatever is, is Right': The History, Indeterminacy, and Ideological Significance of the Doctrine of Economic Duress 
Frank C. Huntington
J.D., Harvard Law School (1984); Ph.D., Brown University (1981); B.A. Swarthmore College (1974), 
Date posted to database: December 31, 2010 
Last Revised: January 6, 2011

[JT]

February 8, 2011 in Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Monday, February 7, 2011

TSA and Unions

Scanners
Last week, we brought you news of a stand-off between the Transportation Security Administration and Congress over whether or not airports should have complete freedom to choose to hire private screeners.  Over the weekend, courtesy of The New York Times, we learned of more breaking TSA news.  According to the Times, TSA director, John Pistole, has agreed to allow a union to bargain on behalf of the working conditions of TSA employees.  

But many traditional areas of collective bargaining will be off limits, and the TSA employees cannot strike.  Although TSA employees already have the right to join a union, those unions can only represent TSA employees on individual issues; they are not currently authorized to represent employees for the purposes of collective bargaining.  

Democrats applaud Mr. Pistole's decision; Republicans decry it, calling it a gift from the Obama Administration to organized labor.  The decision may in part be prompted by surveys suggesting low morale among TSA workers.  The hope is that collective bargaining can help with morale.  As we indicated last week, private screeners' compensation packages must be equivalent to those of federal employees.  Does this mean that, if TSA employees decide to join a union, that union will also effectively represent the interests of private screeners?

[JT]

February 7, 2011 in Government Contracting, In the News, Labor Contracts | Permalink | Comments (0) | TrackBack (0)

Sunday, February 6, 2011

Bumped at the Superbowl

Looks like there was a bit of a kerfuffle over seating at the Superbowl (the game is on as I blog).  According to YahooNews:

Approximately 850 fans with tickets in temporary seating sections were relocated to similar or better seats. Four hundred fans who were not accommodated with seats inside the stadium will each receive a refund of $2,700 – triple the cost of the face value of their ticket.

According to the article, which is citing these angry ticket holders, "stuff blocking the seats" was the reason given for the unceremonious bump. 

Perhaps a good contracts hypo for determining damages - as one member of the crowd yelled, "what about our travel and hotel expenses?"

[Miriam Cherry]

February 6, 2011 in Sports | Permalink | TrackBack (0)

Friday, February 4, 2011

Are Baseball Players Suckers for Oddball Incentive Clauses?

Baseball money With the Superbowl coming up this Sunday, many sports fans currently are focused on football (or at least on the commercials to air during the football telecast).  However, a recent story collecting oddball terms in professional baseball players' contracts recently grabbed my attention.  Most of the terms detailed are incentive clauses of the "do "this thing, get this much more money" variety.  What makes these incentive clauses particularly interesting, however, is that many of the triggering actions appear impossible or near impossible to achieve.  For example, some players that have World Series MVP incentives play for teams that stand little chance of winning games let alone the World Series (sorry, Pittsburgh).  In another perplexing example, a player who is a designated hitter (meaning that he does not play in the field--ever) has a clause promising to pay him extra money if he wins a Gold Glove, an award given to the best fielding player at a particular position.  Ultimately, the article raises an interesting question that some of our readers may be able to address...why?  Why are these clauses, many of which sound downright silly, in these contracts at all?  Is it because the agent copied and pasted the terms from another player contract?  Is it because the player is delusional?  Or, is it because these incentives somehow help the contracts satisfy rules that apply solely to professional sports contracts (such as terms insisted upon by the players' union)?  If anyone has an idea, please post in the comments.  And enjoy the Superbowl!

[H.R.A. w/ hat tip to student Ron Angerer]

February 4, 2011 in Celebrity Contracts, Current Affairs, Sports | Permalink | Comments (0) | TrackBack (0)

TSA and Private Screeners: The Difference?

JohnMica As NPR reports here, the Transportation Security Administration does not want to hire private screeners to work at any more airports, although the private contractors will continue their work at the 16 airports at which they currently operate.  Florida Republican Representative John Mica (pictured right) protests, claiming that TSA is bloated and we would be better off with private screeners, given that "[n]early every positive security innovation since the beginning of TSA has come from the contractor screening program."

What innovations could Representative Mica be thinking of?  I wonder what the result would be if you asked airline travelers to name their favorite innovations in airport security in the past ten years.  Daniel Solove has been tracking these developments over at Concurring Opinions at some time.  Here is his post about standard TSA procedures.  How have things improved in the past few years?  Well, here is Solove's more recent post on the subject.  Is this the sort of innovation about which the good Congressman is crowing?

Not for nothing, NPR notes that Congressman Mica has received campaign donations from some of the private companies that are trying to win contracts to provide airport screeners.  A spokesman denies that such donations have played any role in the Congressman's position on this issue.  

Roy_Blunt, The Kansas City Star now reports that Senator Roy Blunt (pictured left) is also sponsoring legislation that would encourage the use of private screeners.  The legislation is said to be a response to the TSA's denial of a request by the Springfield-Branson airport to switch to private screeners.  The request reportedly came after two reports of federal employees being neglectful of passengers at the airport, causing delays that resulted in people missing their flights.  

According to the TSA's website, the standards for screening are identical, whether the screeners are private or federal: "TSA sets the security protocols and standards for all commercial airports nationwide, to include airports participating in [the private screeners programs]."  That would suggest that one's experience of private screeners should not be significantly different from one's experience of federal screeners.  But perhaps the private screeners are cheaper?  No, according to TSA:

ATSA mandates private screening companies to provide compensation and other benefits to their screeners that are not less than the level of compensation and other benefits provided to comparable Federal Government personnel. TSA conducted an extensive review of the private contractors and found overall the private screening companies are providing pay and benefits that equal or exceed the pay and benefits provided by the Federal Government.

But since the TSA has to monitor the private screeners, and because there are transactions costs involved in negotiating the terms under which the private contractors serve, it seems likely that private screeners actually add costs, even if they are not better paid.  And then what of legal wrangling if there are allegations of misconduct by a private screener?   

So, the argument for private screeners must run something like this.  Private companies are preferable because competition leads to better efficiency and better customer service.  In addition, private companies might have more rigorous hiring practices that ensure a higher quality of personnel.  Is there any empirical basis to support such reasoning or are there other justifications for preferring private screeners?

[JT]

February 4, 2011 in Government Contracting, In the News, Travel | Permalink | Comments (1) | TrackBack (0)

Thursday, February 3, 2011

Jim Bean v. Jose Cuervo: A Lesson on Material v. Minor Breach

It is not often that two of my favorite things – contract law and tequila --  converge in one place.  At least, whenever I enjoy my favorite sipping tequila, I get up the courage to move the conversation to contract law, and my attempts usually get derailed quickly.

Jim-beam-white Thankfully, a recent case from a New York County trial court manages Jose-Cuervo-Especial-lg
to merge my two interests.  Jim Beam Brands Co. (Jim Bean) has sued Tequila Cuervo Law Rojena S.A. de C.V. (Cuervo) for breach of a contract settling a previous trademark dispute.  Jim Beam holds the trademark for the names “Old Crow” and “Crow,” and various crow designs for whiskey and bourbon.  In the previous suit, Jim Beam sued Cuervo when Cuervo used a crow design and the word “crow” in advertising Cuervo products.  Eventually, they settled the dispute and agreed to limit Cuervo's use of the bird design.

Now, Jim Beam sues Cuervo, claiming breach of the contract.  Cuervo admits that, for seven years, it variously used a bird design in violation of the settlement.  Thus, Jim Beam sued claiming that Cuervo breached the contract.  Cuervo responded that the breach was not material.  The court held: so what, reminding Cuervo even minor breaches may entitle a party to damages.  The court recited the black letter law:

The New York courts routinely allow a nonbreaching party to seek damages, not only for a material breach (Texter v Trotta, 48 AD3d 455 [2d Dept 2008]), but also for a minor, or immaterial, breach as. well (Seidlitz v Auerbach, 230 NY 167 [1920]).

The materiality or non-materiality of a breach of contract only goes to the question of the type of remedy that may be allowed, not to the issue of liability. In order to be entitled to nonmonetary relief for breach of a contract, the non-breaching party must demonstrate that the breach was material.

"The right to rescission generally exists as an alternative remedy to an action for damages where there has been a material breach of a contract [emphasis added] (Manning v Manning, 97 AD2d 910, 911 [3d Dept 1983]); Richard A. Hutchens CC, L.L.C. v State of New York, 59 AD3d 766 [3d Dept 2009] [a material breach entitles injured party to seek rescission]); Jones v Jones, 232 AD2d 3130020[1st Dept 1996] [material breach entitles non-breaching party to seek rescission]).

However, even a minor breach allows the innocent party some measure of damages to put it in the same position that it would have been in if no breach had occurred.  

Thus, the court ruled for Jim Bean on liability and ordered a trial on damages.  

Jim Bean Brands Co. v. Tequila Cuervo La Rojena S.A. De C.V., 600122/08, NYLJ 1202480086862, at *1 (Sup. NY, Decided January 27, 2011) (Justice Richard B. Lowe, III).

[Meredith R. Miller]

 

February 3, 2011 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Belatedly Introducing Our New Contributing Editor, Eniola Akindemowo

New contributing editor, Professor Eniola Akindemowo of the Thomas Jefferson School of Law got up her first post before we got a chance to introduce her to our readers, but our loyal readers are probably remember her well, since she was featured on the blog three years ago.  Here is her official bio:

AkindemowoBefore joining the faculty at the Thomas Jefferson School of Law, Professor Eniola O. Akindemowo was a member of the law faculty at Monash University in Melbourne Australia, and before that of faculty of the University of Western Sydney, Australia.  She has also taught law at the University of East London, and at Middlesex University in the UK.

Professor Akindemowo has authored articles that have been published in both student-edited, and peer-reviewed journals. She is the author of the first substantive book on IT law published in Australia, and co-author of another on E-Commerce and the Law.  Her Ph.D. thesis titled Electronic Fund Transfers, Consumers, Electronic Funds and the Law, was a comparative study of U.S. and British law. Professor Akindemowo has been the recipient of several competitive research and travel grants. Her scholarly interests include comparative commercial law, e-money, m-payments and payment systems, anti-terrorism financing regulation, and contractual, consumer and intellectual property issues arising from e-commerce.

Professor Akindemowo is currently the Co-chair of the General Provisions Sub-committee of the American Bar Association (ABA) UCC Committee, and an executive committee member of the Association of American Law School (AALS) Internet and Computer Law Section.  She is also a member or associate of the American Bar Association (ABA), the National Bar Association, the Earl B. Gilliam Bar Association, and the International Technology Law Association. 

A keynote or featured speaker at numerous conferences, Professor Akindemowo currently teaches Contracts Law, Payments Law and eCommerce Law at the Thomas Jefferson School of Law.  She has been a visiting scholar of the University of New South Wales Faculty of Law, and a distinguished visitor at the University of Newcastle (NSW, Australia).  Before undertaking her LL.M. and Ph.D. research, Professor practiced commercial law in the law firms of J.B Majiyagbe (SAN) & Co, and Abayomi Sogbesan (SAN) & Co.

Welcome to the blog!  We look forward to many illuminating posts!

[JT]

February 3, 2011 in About this Blog, Contract Profs | Permalink | Comments (0) | TrackBack (0)

Happy Groundhog Day!

Groundhogday2005 It was Groundhog Day yesterday and Punxsuatawney Phil did not see his shadow.  Spring, in other words, is officially around the corner, definitely less than six weeks away.  Or is it?  Can we hold the Inner Circle the group on whose behalf  Punxsuatawney Phil acts – to this happy prediction?  What should we make of the annual February 2nd hoopla?  Does it provide a reliable forecast – it is promoted as a "reliable prediction of when spring will begin" after all

The pertinent question is whether there is even a hint of any intention to be legally obliged by the assurance of reliability that accompanies every such 'Philly' prediction?  An assurance, I might add, that draws thousands of avid devotees to the ceremony annually.  But then, do we even think of suing the weatherman when the weather forecast on the evening news is wrong?  Perhaps the analogy is not such a good one – we should compare apples with apples.  Your humble weatherman on the evening news is not to be compared with the likes of such a prophetic rodent as Phil, I suppose. 

A reasonable response to the spring prediction might be to treat it all as a publicity stunt.  Nothing but an elaborate performance.  One by Phil and the Inner Circle, on behalf of the Borough of Gobblers Knob in Punxsuatawney Pennsylvania that surely is most appreciative of the tourist traffic. 

So, perhaps it is all in jest?  This has, after all, been an annual event for the last 125 years.  Surely the groundhog Phil of yesterday’s prediction cannot be the same Phil of the first ever 'Philly' groundhog spring prediction.  Or, can he be?  There are those whispers about a certain elixir of life.   There is an alternative explanation of course – that the Inner Circle has had an inexhaustible supply of prophetic Phils over the years – but this strains credulity.

I suppose one could take an analytical approach and test Phil’s batting average over the years.  It is a matter of public record after all.  Apparently Phil has seen his shadow 99 times, and not seen his shadow 16 times .  It should not be too difficult to map Phil’s predictions against historical weather records.  But perhaps we need not bother to do even that.   

Considering the fierce snowstorms presently lashing a large swath of the US, a not unreasonable conclusion would be that Phil’s prediction yesterday morning was nothing but a bold faced statement to be taken with a pinch of salt.  How can spring be near when weathermen are panicking about 'thundersnow'?  Reasonably reliable?  I haven’t done the math, but I strongly suspect that Phil’s predictions are not very reliable at all.  Poor Phil.

This does mean of course, that Phil’s predictions are poor candidates for contractual liability.  No failure of consideration, no misrepresentation, no estoppel.  Poor disappointed litigious weather watchers.  Lucky Phil.  

[Eniola O Akindemowo]

 

February 3, 2011 in Commentary, Current Affairs, In the News | Permalink | Comments (0) | TrackBack (0)