ContractsProf Blog

Editor: D. A. Jeremy Telman
Valparaiso Univ. Law School

A Member of the Law Professor Blogs Network

Friday, December 30, 2011

Courts Decide Arbitration Waivers, Says the 11th Circuit

11thCircuitSealIn 1996, two parties, Grigsby & Associates (Grigsby) and M Securities Investment (M) agreed to underwrite a $183 million municipal bond offering in Dade County, Florida.  GBR Financial Products failed to pay Grigsby, so Grigsby didn't pay M.  Lots of lawsuits followed.  In 2006 M initiated an arbitration proceeding against Grigsby seeking $2 million in damages, the amount allegedly owed to M for its role in the bond offering.  Grigsby then brought an action in the federal district court claiming that M had waived its right to arbitration and therefore should be enjoined.  The arbitration proceeded, and M won an award of $100,000, plus interest and attorneys' fees, and Grigsby was sanctioned $10,000 for failing to comply with discovery obligations.  

Grigsby challenged that award in federal court, but the district court confirmed the award.  Grigsby then appealed to the 11th Circuit.  Last week, the 11th Circuit issued its opinion, Grigsby & Associates Inc. v. M Securities Investment.  Before the district court, Grigsby had argued that the arbitration was barred by res judicata and because M had waived the right to arbitrate by filing several lawsuits against Grigsby before initiating arbitration proceedings. 

The 11th Circuit agreed with the district court that the res judicata issue is in the category of "disputes over whether a particular claim may be successfully litigated anywhere at all," and that such disputes are presumptively assigned to the arbitrator.  Grigsby's waiver claim would seem to be in the same category, since in Howsam v. Dean Witter Reynolds, Inc., 123 S. Ct. 588 (2002), the U.S. Supreme Court included "allegations of waiver" on the list of issues presumptively for the arbitrator.  The 1st, 3rd, and 6th Circuits have nonetheless treated waiver as issue presumptively to be decided by the courts rather than by arbitrators when the waiver is based on a party's conduct.  The 11th Circuit decided to follow the reasoning of these Circuits.  The district court's failure to decide the issue of waiver was legal error and therefore an abuse of discretion.  

The case was remanded to the district court to decide Grigsby's waiver claim on the merits.  Until it does so, the 11th Circuit vacated the district court's order denying an injunction of the arbitration award, subject to reinstatement if the district court determines that no waiver occurred.

[JT]

December 30, 2011 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Thursday, December 29, 2011

Apple’s Marketing Statements are Non-Actionable Puffery

Plaintiff Alan Vitt’s laptop "crapped out" (term of art) just after the 1-year warranty expired.  The crux of his complaint on behalf of all purchasers of the iBook G4: the laptop did not last “at least a couple of years,” which he allaged is the reasonable consumer expectation of a laptop.  He alleged that “this is because one of the solder joints on the logic board of the iBook G4 degrades slightly each time the computer is turned on and off, eventually causing the joint to break and the computer to stop working shortly after Apple’s one year express warranty has expired.”  Plaintiff further alleged that Apple “affirmatively misrepresented the durability, portability, and quality of the iBook G4 and did not disclose the alleged defect.”

In affirming the dismissal of his complaint, the 9th Circuit held that the marketing statements are non-actionable puffery:

Vitt challenges Apple’s advertising because it stated that the iBook G4 is “mobile,” “durable,” “portable,” “rugged,” “built to withstand reasonable shock,” “reliable,” “high performance,” “high value,” an “affordable choice,” and an “ideal student laptop.” The district court held that these statements are generalized, non-actionable puffery because they are “inherently vague and generalized terms” and “not factual representations that a given standard has been met.” We agree. Even when viewed in the advertising context as Vitt urges, these statements do not claim or imply that the iBook G4’s useful life will extend for “at least a couple of years.” For example, to the extent that “durable” is a statement of fact it may imply in context that the iBook G4 is resistant to problems occurring because of its being dropped, but not that it will last for a duration beyond its expressed warranty.

Vitt v. Apple Computer, Inc. (9th Cir. Dec. 21, 2011).

[Meredith R. Miller]

December 29, 2011 in Recent Cases, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Wednesday, December 28, 2011

Weekly Top Tens from the Social Science Research Network

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

October 27, 2011 to December 26, 2011

RankDownloadsPaper Title
1 212 Incentive Contracting 
Ralph C. Nash
George Washington University - Law School, 
Date posted to database: September 16, 2011 
Last Revised: September 26, 2011
2 195 Endogenous Institutions: Law as a Coordinating Device 
Gillian HadfieldBarry R. Weingast
USC Law School and Department of Economics, Stanford University - The Hoover Institution on War, Revolution and Peace, 
Date posted to database: November 24, 2011 
Last Revised: December 8, 2011
3 176 How to Opt into the Common European Sales Law? Brief Comments on the Commission’s Proposal for a Regulation 
Martijn W. Hesselink
University of Amsterdam - Centre for the Study of European Contract Law (CSECL)
4 142 Political Risk and Sovereign Debt Contracts 
Stephen J. ChoiG. Mitu GulatiEric A. Posner
New York University (NYU) - School of Law, Duke University - School of Law, University of Chicago - Law School
5 88 Introduction: The Three and a Half Minute Transaction: Boilerplate and the Limits of Contract Design 
G. Mitu GulatiRobert E. Scott
Duke University - School of Law, Columbia University - Law School
6 78 Theories of Contract Law and Enforcing Promissory Morality: Comments on Charles Fried 
Brian Bix
University of Minnesota Law School
7 65 Credit on Wheels: The Law and Business of Auto Title Lending 
Jim Hawkins
University of Houston Law Center
8 63 Beyond the First Amendment: Shaping the Contours of Commercial Speech in Video Games, Virtual Worlds and Social Media 
Jon Garon
NKU Chase College of Law
9 60 Subprime Mortgages and the Case for Broadening the Duty of Good Faith 
Chunlin Leonhard
Loyola University New Orleans College of Law
10 59 The Holmesian Bad Man Flubs His Entrance 
Barbara H. Fried
Stanford Law School

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

October 29, 2011 to December 28, 2011

RankDownloadsPaper Title
1 179 How to Opt into the Common European Sales Law? Brief Comments on the Commission’s Proposal for a Regulation 
Martijn W. Hesselink
University of Amsterdam - Centre for the Study of European Contract Law (CSECL)
2 71 Contract Versus Statute in Internet Governance 
Lee A. Bygrave
University of Oslo
3 60 Subprime Mortgages and the Case for Broadening the Duty of Good Faith 
Chunlin Leonhard
Loyola University New Orleans College of Law
4 59 The Holmesian Bad Man Flubs His Entrance 
Barbara H. Fried
Stanford Law School
5 58 Promissory Autonomy, Imperfect Courts, and the Immorality of the Expectation Damages Default 
George G. Triantis
Stanford Law School
6 49 Consumer Protection and the Islamic Law of Contract 
Muhammad Akbar Khan
International Islamic University
7 46 Will Firms Consider a European Optional Instrument in Contract Law? 
Gary Low
Maastricht European Private Law Institute
8 33 Acquis Principles 
Hans Christoph GrigoleitLovro Tomasic
Ludwig Maximilians University of Munich - Faculty of Law, Ludwig Maximilians University of Munich - Faculty of Law
9 30 Mandatory Law: Fundamental Principles 
Hans Christoph Grigoleit
Ludwig Maximilians University of Munich - Faculty of Law
10 29 In-House Counsel’s Role in the Structuring of Mortgage-Backed Securities 
Shaun BarnesKathleen G. CullySteven L. Schwarcz
Duke University - School of Law, Kathleen G. Cully PLLC, Duke University - School of Law

[JT]

December 28, 2011 in Recent Scholarship | Permalink | TrackBack (0)

Monday, December 26, 2011

AALS Contracts Annual Meeting Program

If you are attending next week's AALS Annual Meeting, please join us for the Contract Section's program, New Voices in Contracts Scholarship, scheduled for Saturday, January 7, 2012, from 1:30 to 3:15 p.m., at the Marriott Wardman Park Hotel.  The program will feature three junior scholars whose proposals the selection committee chose from the many quality responses to our CFP.

In alphabetical order, the featured speakers and their topics are

Aditi Bagchi (University of Pennsylvania Law School), Parallel Contract;

Mohsen Manesh (University of Oregon School of Law), Contractual Freedom under Delaware Alternative Entity Law; and

Emmanuel Voyiakis (London School of Economics & Political Science, Department of Law), Contract Law and Reasons of Social Justice.

There will be a brief business meeting following the program.

I look forward to seeing many of you in less than two weeks.

[Keith A. Rowley]

December 26, 2011 in Conferences, Meetings, Recent Scholarship | Permalink | TrackBack (0)

Sunday, December 25, 2011

Vote for the Best Contracts Article of 2011!

Announcing the first annual ContractsProf Blog prize for the best contracts law article of the year, to be awarded at the Spring Contracts Conference to be held at the Thomas Jefferson School of Law in San Diego in March.  The winner will receive a cash prize!

Vote (once only, folks) by sending an e-mail with your favorite contracts law review article from the list below to jeremy.telman@valpo.edu.  If your favorite article is not on the list, you may nominate (and/or vote for) an article that is not on this list through the same e-mail address.

Kenneth A. Adams, Making a Mess of Ambiguity: Lessons from the Third Circuit’s Opinion in Meyer v. CUNA Mutual Insurance Society, Bus. L. Today (the ABA Business Law Section's Online Resource) (Nov. 24, 2011)

Sofia Adrogue, Recent Developments in Fifth Circuit Business Torts Jurisprudence, 43 Tex. Tech. L. Rev. 843 (2011).

Michael Aikins, Off-Contract Harms: The Real Effect of Liberal Rescission Laws on Contract Price, 121 Yale L. J. Online 68 (2011)

Miriam Albert, Lenne Espenschied and Grace M. Giesel, Exercise Showcase, 12 Transactions 335 (2011) 

Luca Anderlini, Leonardo Felli, and Andrew Postlewaite, Should Courts Always Enforce What Contracting Parties Write? 7 Rev. L. & Econ. (2011)

Sally Andersen, Mapping the terrain: The last decade of payday lending in Australia, 39 Australian Bus. L. Rev. 5 (2011)

Hiro N. Aragaki, Equal Opportunity for Arbitation, 58 UCLA L. Rev. 1189 (2011)

Aditi Bagchi, Managing Moral Risk: The Case of Contracts, 111 Colum. L. Rev. 1878 (2011)

Aditi Bagchi, Unequal Promises, 72 U. Pitt. L. Rev. 467 (2011)

Glen Banks, Lost Profits for Breach of Contract: Would the Court of Appeals Apply the Second Circuit's Analysis? 74 Alb. L. Rev. 637 (2010/2011)

Ian Bartum, Thoughts on the Divergence of Contract and Promise, 24 Canadian J. L & Jurisprudence 225 (2011)

Stephen F. Befort, Unilateral Alteration of Public Sector Collective Bargaining Agreements and the Contract Clause, 59 Buff. L. Rev. 1 (2011)

Uri Benoliel, The Behavioral Law and Economics of Franchise Tying Contracts,  41 Rutgers L.J. 527 (2010).

Omri Ben-Shahar, Fixing Unfair Contracts, 63 Stan. L. Rev. 869 (2011)

Omri Ben-Shahar and Eric A. Posner, The Right to Withdraw in Contract Law, 40 J. Legal Stud.115 (2011)

Norman D. Bishara, Fifty Ways to Leave Your Employer: Relative Enforcement of Covenants Not to Compete, Trends, and Implications for Employee Mobility Policy. 13 U. Pa. J. Bus. L. 751 (2011)

Brian H. Bix, Mahr Agreement, Contracting in the Shadow of Family Law (and Religious Law) -- A Comment on Oman's Article, 1 Wake Forest L. Rev. Online 61 (2011)

Jennifer L. Blair, Surviving Reality TV: The Ultimate Challenge for Reality Show Contestants, 31 Loy. L.A. Ent. L. Rev. 1 (2010-2011)

Richard R.W. Brooks & Alexander Stremitzer, Remedies On and Off Contract, 120 Yale L.J. 690 (2011)

Deborah Burand, Kojo Yelpaala and Peter Linzer, Teaching Transactional Skills and Law in an International Context, 12 Transactions 275 (2011)

Scott J. Burnham, Blood Does Not a Contract Make: A Response to Professor Nancy Kim, 1 Wake Forest L. Rev. Online 49 (2011)

Adam Candeub, Contract, Warranty and the Patient Protection and Affordable Care Act, 46 Wake Forest L. Rev. 45 (2011)

Robert A. Caplen, Turning Esch to Dust? The State of Supplementation of the Administrative Record in Bid Protests before the Court of Federal Claims, 12 Whittier L. Rev. 197 (2011)

William J. Carney, Ronald J. Gilson and George W. Dent, Jr., Keynote Discussion: Just What Exactly Does a Transactional Lawyer Do? 12 Transactions 175 (2011)

David Chalkin, A Critical Examination of How Contract Law Is Use by Financial Institutions Operating in Multiple Jurisdictions, 34 Melbourne Univ. L. Rev. 34 (2010)

Vincent Chiappetta, Patent Exhaustion: What's It Good For? 51 Santa Clara L. Rev. 1087 (2011)

Carl J. Circo, Will Green Building Contracts Transform Construction and Design Law? 43 Urb. Law. 4837 (2011)

Neil B. Cohen and William H. Henning. Freedom of Contract vs. Free Alienability: An Old Struggle Emerges in a New Context, 46 Gonz. L. Rev. 353 (2010/11)

Ronnie Cohen and Shannon O'Byrne, Burning Down the House: Law, Emotion and the Subprime Mortgage Crisis, 45 Real Prop. Tr. & Est. L.J. 677 (2011)

Amanda Harmon Coole , Marka B. Fleming and Gwendolyn McFadden-Wade, The Constitutional and Contractual Controversy of Suspicionless Drug Resting of Public School Teachers, 63 Okla. L. Rev. 421 (2011)

Lawrence A. Cunningham, A New Legal Theory to Test Executive Pay: Contractual Unconscionability. 96 Iowa L. Rev. 1177 (2011)

Jaime, Dodge, The Limits of Procedural Private Ordering, 97 Va. L. Rev. 723 (2011)

Michael A. Dorelli  and Phillip T. Scaletta, Recent Developments in Indiana Business and Contract Law. 44 Ind. L. Rev. 1053 (2011)

Mateja Djurovic, Serbian Contract Law: its development and the New Serbian Civil CodeEur. Rev. of Contract L. 65 (2011) 

Christopher R. Drahozal, and Peter B. Rutledge, Contract and Procedure, 94 Marq. L. Rev. 1103 (2011)

Shelley Dunck, Brian Krumm and Sharon Pocock, Teaching Contract Drafting Using Real Contracts, 12 Transactions 359 (2011) 

W. David East, Douglas Wm. Godfrey and Carol D. Newman. Teaching Transactional Skills and Tasks other than Contract Drafting, 12 Transactions 217 (2011) 

David G. Epstein, Response to Reasonable Expectations in Sociocultural Context, 1 Wake Forest L. Rev. Online 54 (2011) 

David M. Epstein, Helen S. Scott, Carole Heyward and Daniel B. Bogart, Simulations in Clinics, Contract Drafting, & Upper-Level Courses, 12 Transactions 55 (2011)

Horst Eidenmüller, Why Withdrawal Rights? 7 Eur. Rev. of Contract L. 1 (2011) 

Carlos A. Encinas, Clause Majeure?: Can a Borrower Use an Economic Downturn or Economic Downturn-Related Event to Invoke the Force Majeure Clause in Its Commercial Real Estate Loan Documents? 45 Real Prop. Tr. & Est. L.J. 731 (2011)

Mark Fagan, Tamar Frankel, Eric J. Gouvin and Kathy Z. Heller, Upper-level Courses: Three Exemplars, 12 Transactions 377 (2011)

Yuval Feldman & Doron Teichman, Are All Contractual Obligations Created Equal? 100 Georgetown L. J. 5 (2011) 

Stephen Friedman, Arbitration Provisions: Little Darlings and Little Monsters, 79 Fordham L. Rev. (2011)

Thomas A. Gabriele, Could the Weapon Systems Acquisition Reform Act of 2009 Have Fixed the Problems that Plagued the F-22 Acquisition Project Back in 1981?40 Pub. Cont. L.J. 741 (2011)

David Gilo & Ariel Porat, Viewing Unconscionability through a Market Lens, 52 Wm. & Mary L. Rev. 133 (2011)

Victor Goldberg, Traynor (Drennan) Versus Hand (Baird):Much Ado About (Almost) Nothing, J. Legal Analysis Advance Access (Oct. 7, 2011)

Eric J. Gouvin, Robert Statchen, Anthony J. Luppino and William A. Kell, Interdisciplinary Transactional Courses, 12 Transactions 101 (2011)

Jack M. Graves, Arbitration as Contract: The Need For a Fully Developed and Comprehensive Set of Statutory Default Legal Rules, 2 Wm. & Mary Bus. L. Rev. 227 (2011).

Stefan Grundmann & Sebastian Uhlig, German Contract Law – Nearly a Decade After the Fundamental Reform in the Schuldrechtsmodernisierung,  Eur. Rev. of Contract L. 78 (2011) 

Surya Gablin Gunasekara, "Other Transaction" Authority: NASA's Dynamic Acquisition Instrument for the Commercialization of Manned Spaceflight or Cold War Relic? 40 Pub. Cont. L.J. 893 (2011) 

John M. Garon and Elaine D. Ziff, The Work Made for Hire Doctrine Revisited: Startup and Technology Employees and the Use of Contracts in a Hiring Relationship, 12 Minn. J. L. Sci. & Tech. 489 (2011)

David Hahn, The Internal Logic of Assumption of Executory Contracts, 13 U. Pa. J. Bus. L. 723-750 (2011)

Sam Foster Halabi, Efficient Contracting between Foreign Investors and Host States: Evidence from Stabilization Clauses, 31 Nw. J. Int'l L. & Bus. 261 (2011)

Grant M. Hayden & Matthew T. Bodie, The Uncorporation and the Unraveling of "Nexus of Contracts" Theory, 109 Mich. L. Rev. 1127 (2011) (reviewing Larry E. Ribstein, The Rise of the Uncorporation)

Trevor C. Hartley, Choice of Law Regarding Voluntary Assignment of Contractual Obligations under the Rome I Regulation, 60 Int'l & Comp. L. Quarterly 29 (2011)

Joan MacLeod Heminway, Michael A. Woronoff and Lyman P.Q. Johnson. Innovative Transactional Pedagogies, 12 Transactions 243 (2011)

Alec Hillbo, Fifty Years of Restrictive Covenants in Arizona Law,  4 Phoenix L. Rev. 725 (2011)

Robert A. Hillman and Maureen O'Rourke. Defending Disclosure in Software Licensing, 78 U. Chi. L. Rev. 95 (2011)

Adam J. Hirsch, Freedom of Testation/Freedom of Contract, 95 Minn. L. Rev. 2180 (2011)

Michael H. Hoffheimer, Conflicting Rules of Interpretation and Construction in Multi-jurisdictional Disputes, 63 Rutgers L. Rev. 599 (2011)

David Horton, Arbitration as Delegation, 86 N.Y.U. L. Rev. 437 (2011)

Grace Hum, Miki Felsenburg, Barbara Lentz, Carolyn Broering-Jacobs and Ted Becker, Legal Writing Professors Morphing into Contract Drafting Professors, 12 Transactions 127 (2011)

Woodrow Hartzog,  Website Design as Contract, 60 Am. U. L. Rev. 1635 (2011)

Adam J. Hirsch, Freedom of Testation/Freedom of Contract, 95 Minn. L. Rev. 2180 (2011)

John Patrick Hunt, Taking Bubbles Seriously in Contract Law, 61 Case W. Res. L. Rev. 681 (2011) 

Christine Hurt, Regulating Compensation, 6 Entrepren. Bus. L.J. 21 (2011)

William P. Johnson, Understanding Exclusion of the CISG: A New Paradigm of Determining Party Intent,59 Buff. L. Rev. 213 (2011)

Louis Kaplow, On the Meaning of Horizontal Agreements in Competition Law, 99 Cal. L. Rev. 693 (2011)

Won Kidane, Immigration Law As Contract Law. (Reviewing Victor Romero, Everyday Law for Immigrants), 34 Seattle U. L. Rev. 889 (2011)

Juliet P. Kostrisky, Interpretive Risk and Contract Interpretation: A Suggested Approach for Maximizing Value. 2 Elon L. Rev. 109 (2011)

Anne Layne-Farrar, An Economic Defense of Flexibility in IPR Licensing: Contracting around "First Sale" in Multilevel Production Settings, 51 Santa Clara L. Rev. 1149 (2011). 

Stephen J. Leacock, Fingerprints of Equitable Estoppel and Promissory Estoppel on the Statute of Frauds in Contract Law, 2 Wm. & Mary Bus. L. Rev. 73 (2011)

Chunlin Leonhard, Subprime Mortgages and the Case for Broadening the Duty of Good Faith, 45 U.S.F. L. Rev. 621 (2011)

Michael H. LeRoy, The New Wages of War--Devaluing Death and Injury: Conceptualizing Euty and Employment in Combat Zones, 22 Stan. L. & Pol'y Rev. 217 (2011)

Florencia Marotta-Wurgler, Will Increased Disclosure Help? Evaluating the Recommendations of the ALI's "Principles of the Law of Software Contracts," 78 U. Chi. L. Rev. 165 (2011)

Carter Anne McGowan, Twittergate: Rethinking the Casting Director Contract, 21 Fordham Intell. Prop. Media & Ent. L.J. 365 (2011)

Brittnay M. McMahon, The Science behind Surrogacy: Why New York Should Rethink Its Surrogacy Contracts Laws, 21 Alb. L.J. Sci. & Tech. 359 (2011)

Kemit A. Mawakana, In the Wake of Coast Federal: The Plain Meaning Rule and the Anglo-American Rhetorical Ethic, 11 U. Md. L.J. Race, Religion, Gender & Class 39 (2011)

Roy S. Mitchell, Cultural Sensitivities in International Construction Arbitration, 2 Faulkner L. Rev. 325 (2011)

Terry F. Moritz, and Brandon J. Fitch, The Future of Consumer Arbitration in Light of Stolt-Nielsen. 23 Loy. Consumer L. Rev. 265 (2011)

Jim.Moye, Let's Put the Fear in the FERA! Suggestions to Make the Fraud Enforcement and Recovery Act of 2009 a Strong Fraud Deterrent, 35 S. Ill. U. L.J. 421 (2011)

Sondra Bell Nensala, Homeland Security Presidential Directive 12: How HSPD-12 May Limit Competition Unnecessarily and Suggestions for Reform, 40 Pub. Cont. L.J. 619 (2011).

Richard K. Neumann, Jr., Tina L. Stark and Howard Katz, Negotiations, 12 Transactions 153 (2011) 

Raymond T. Nimmer,  Copyright First Sale and the Over-riding Role of Contract. 51 Santa Clara L. Rev. 1311 (2011). 

N. Pieter M. O'Leary, Bullies in the Sandbox: Federal Construction Projects, the Miller Act, and a Material Supplier's Right to Recover Attorney's Fees and Other "Sums Justly Due" under a General Contractor's Payment Bond, 38 Transp. L.J. 1 (2011)

Nathan B. Oman, Consent to Retaliation: A Civil Recourse Theory of Contractual Liability96 Iowa Law Review 529 (2011)

Nathan B. Oman How to Judge Shari'a Contracts: A Guide to Islamic Marriage Agreements in American Courts, 2011 Utah L. Rev. 287

Kingsley S. Osei, The Best of Both Worlds: Reciprocal Preference and Punitive Retaliation in Public Contracts, 40 Pub. Cont. L.J. 715 (2011).

Salvatore Orlando, The Use of Unfair Contractual Terms as an Unfair Commercial Practice, 7 Eur. Rev. of Contract L. 76 (2011)

Heidi Lynn Osterhout, Maj. U.S. Air Force. No More "Mad Money": Salvaging the Commander's Emergency Response Program, 40 Pub. Cont. L.J. 935 (2011) 

Francesco Parisi, et al., Optimal Remedies for Bilateral Contracts, 40 J. Legal Stud. 245 (2011)

Lisa Penland, David Thomson, Susan Duncan, Karen J. Sneddon and Susan M. Chesler, New Ways to Teach Drafting and Drafting Ethics, 12 Transactions 187 (2011)

Lynn C. Percival, IV, Public Policy Favoritism in the Online World: Contract Voidability Meets The Communications Decency Act, 17 Tex. Wesleyan L. Rev. 165 (2011)

Abigail Lauren Perdue, For Love or Money: An Analysis of the Contractual Regulation of Reproductive Surrogacy, 27 J. Contemp. Health L. & Pol'y 279- (2011).

Ryan Peterson, Regulating the Global Marketplace: Why the U.S. Government Must Revise the Current Rules on Contracting with Foreign-Controlled U.S. Businesses, 40 Pub. Cont. L.J. 1061 (2011)

Lucille M. Ponte, Getting a Bad Rap? Unconscionability in Clickwrap Dispute Resolution Clauses and a Proposal for Improving the Quality of These Online Consumer "Products," 26 Ohio St. J. on Disp. Resol. 119 (2011)

Judith Resnick, Fairness in Numbers: A Comment on AT&T v. Concepcion, Wal-Mart v. Duke, and Turner v. Rogers, 125 Harv. L. Rev. 78 (2011)

David Robbins, et al, Path of an Investigation: How a Major Contractor's Ethics Office and Air Force Procurement Fraud and Suspension/Debarment Apparatus Deal with Allegations of Potential Fraud and Unethical Conduct, 40 Pub. Cont. L.J. 595 (2011). 

Regina Robson, Paying for Daniel Webster: Critiquing the Contract Model of Advancement of Legal Fees in Criminal Proceedings, 7 Hastings Bus. L.J. 275 (2011)

Victor C. Romero, Immigration Law, Contracts, and Due Process: A Response to Professor Won Kidane's Review of Everyday Law for Immigrants. 34 Seattle U. L. Rev. 903 (2011) 

Guy A. Rub, Contracting around Copyright: The Uneasy Case for Unbundling of Rights in Creative Works, 78 U. Chi. L. Rev. 257 (2011)

Kara M. Sacilotto, Deja Vu All Over Again: Cost-Reimbursement Contracts Fall out of Favor (Again), but Should They? 40 Pub. Cont. L.J. 681 (2011).

Jane Scott and Charles Fox, Contract Drafting in 90 Minutes, 12 Transactions 7 (2011)

Daniel P. Selmi, The Contract Transformation in Land Use Regulation, 63 Stan. L. 591 (2011)

Steven L. Schooner, A Random Walk: The Federal Circuit's 2010 Government Contracts Decisions, 60 Am. U. L. Rev. 1067 (2011)

Andrew A. Schwartz,  Consumer Contract Exchanges and the Problem of Adhesion, 28 Yale J. on Reg. 313 (2011)

Jan M. Smits, Rethinking the Usefulness of Mandatory Rights of Withdrawal in Consumer Contract Law: The Right to Change Your Mind? 29 Penn St. Int'l L. Rev. 671 (2011)

Tina L. Stark, Welcome & Opening Remarks, 12 Transactions 3 (2011)

David F.Tavella and Anne Marie Tavella, Advice and Consent for Federal Judges: a New Alternative Based on Contract Law, 3 Drexel L. Rev. 521 (2011). 

D. A. Jeremy Telman, Langdellian Limericks, 61 J. Legal. Educ. 110 (2011)

Steve Thel and Peter Siegelman, You Do Have to Keep Your Promises: A Disgorgement Theory of Contract Remedies, 52 Wm. & Mary L. Rev. 1181- (2011)

Marina Tsikun and Kuei-Jung Ni, Using Licensing Contracts to Protect Holders of Traditional Knowledge Related to Genetic Resources -- a Reflection on ICGB Projects, 42 IIC: Int'l Rev. Intell. Prop. & Competition L. 299 (2011)

Megan S. Vahey, A Discussion on the District of Columbia's Procurement Law and the Spark That Led to Renewed Reform Efforts, 14 U.D.C. L. Rev. 115 (2011)

Florian Wagner-von Papp, European Contract Law: Are No Oral Modification Clauses Not Worth the Paper They Are Written On? 63 Current Leg. Problems 511 (2011)

Christine M. Westphal, Restrictive Covenants in Employment Contracts: Regulating Employee Solicitation. 37 J. Legis. 108 (2011)

Tess Wilkinson-Ryan, Breaching the Mortgage Contract: The Behavioral Economics of Strategic Default, 64 Vand. L. Rev. 1547 (2011)

Chris Willett, The Functions of Transparency in Regulating Contract Terms: UK and Australian Approaches, 60 Int'l & Comp. L.Q. 355 (2011). 

John J.Worley, Karl Okamoto and Sherry Porter, Transactional Centers and Certificate Programs, 12 Transactions 299 (2011)

Huma T. Yasin, Playing Catch-up: Proposing the Creation of Status-based Regulations to Bring Private Military Contractor Forms within the Purview of International and Domestic Law. 25 Emory Int'l L. Rev. 411 (2011)

Noah D. Zatz,  Beyond Misclassification: Tackling the Independent Contractor Problem without Redefining Employment. 26 A.B.A. J. Lab. & Emp. L. 279 (2011).

 [JT] 

December 25, 2011 in Conferences, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Thursday, December 22, 2011

Clerkship Position Available with the DC Contract Appeals Board

The DC Contract Appeals Board is hiring law clerks for the Spring 2012 semester. They are interested in 2Ls, 3Ls, and LL.M.s with a strong interest in government contracts law, and litigation. 

The CAB has an extremely busy docket, providing you with an excellent opportunity to gain experience working on bid protest and contract claims. Moreover, each student will work directly for a judge, serving as the judge's law clerk. 

Requested Application Materials: 

Applicants should provide a one-page cover letter, resume, recent legal writing sample (8 pages maximum that has been written within the last 3 years), and three professional references (including email addresses and telephone numbers). 

Applications may be mailed or emailed as follows: 

Richard Rothschild
General Counsel
D.C. Contract Appeals Board
441 4th Street, NW., Suite 350N
Washington, D.C. 20001
richard.rothschild@dc.gov

[JT w/ HT to Jessica Tillipman and the Government Procurement Law Program at the George Washington University Law School]

December 22, 2011 in Government Contracting, Help Wanted | Permalink | Comments (0) | TrackBack (0)

Wednesday, December 21, 2011

New in Print

Tuesday, December 20, 2011

U.S. State-to-State Arms Sales Data 2003-2010

Some clues as to how the Greeks have spent all their money are available now from the Congressional Research Service.

A few other random thoughts on the data:

  • African governments clearly are not doing all they could to help the U.S. economy through purchases of U.S. weaponry
  • Hooray for Canada's unexpected militarism
  • And while we're at it, good on ya Australia!
  • Eastern Europe (other than Poland), don't look now but there's still a big Russian bear behind you.  Can we interest you in some supersonic jets?

Thanks to Steven Aftergood of the Federation of American Scientists' Secrecy News blog for providing the link!

[JT]

December 20, 2011 in Current Affairs, Government Contracting | Permalink | Comments (0) | TrackBack (0)

Weekly Top Tens from the Social Science Research Network

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

October 20, 2011 to December 19, 2011

RankDownloadsPaper Title
1 218 Codification and Flexibility in Private International Law 
Symeon C. Symeonides
Willamette University - College of Law
2 209 Incentive Contracting 
Ralph C. Nash
George Washington University - Law School
3 167 How to Opt into the Common European Sales Law? Brief Comments on the Commission’s Proposal for a Regulation 
Martijn W. Hesselink
University of Amsterdam - Centre for the Study of European Contract Law (CSECL)
4 142 Bijzondere Overeenkomsten in Kort Bestek (Specific Contracts in a Nutshell) 
Alain-Laurent VerbekePieter Matthias BrulezNicolas CaretteNele Hoekx
University of Leuven, Faculty of Law, Department of Private Law, Unaffiliated Authors - affiliation not provided to SSRN
5 132 Political Risk and Sovereign Debt Contracts 
Stephen J. ChoiG. Mitu GulatiEric A. Posner
New York University (NYU) - School of Law, Duke University - School of Law, University of Chicago - Law School
6 131 Keynote Address: A Regulatory Framework for Managing Systemic Risk 
Steven L. Schwarcz
Duke University - School of Law
7 116 Endogenous Institutions: Law as a Coordinating Device 
Gillian HadfieldBarry R. Weingast
USC Law School and Department of Economics, Stanford University - The Hoover Institution on War, Revolution and Peace
8 85 Introduction to International Commercial Arbitration 
Margaret L. Moses
Loyola University of Chicago - School of Law - Faculty
9 84 Introduction: The Three and a Half Minute Transaction: Boilerplate and the Limits of Contract Design 
G. Mitu GulatiRobert E. Scott
Duke University - School of Law, Columbia University - Law School
10 71 Theories of Contract Law and Enforcing Promissory Morality: Comments on Charles Fried 
Brian Bix
University of Minnesota Law School

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

October 20, 2011 to December 19, 2011

RankDownloadsPaper Title
1 165 How to Opt into the Common European Sales Law? Brief Comments on the Commission’s Proposal for a Regulation 
Martijn W. Hesselink
University of Amsterdam - Centre for the Study of European Contract Law (CSECL)
2 84 Introduction: The Three and a Half Minute Transaction: Boilerplate and the Limits of Contract Design 
G. Mitu GulatiRobert E. Scott
Duke University - School of Law, Columbia University - Law Schoo
3 70 Contract Versus Statute in Internet Governance 
Lee A. Bygrave
University of Oslo
4 58 Subprime Mortgages and the Case for Broadening the Duty of Good Faith 
Chunlin Leonhard
Loyola University New Orleans College of Law
5 57 Promissory Autonomy, Imperfect Courts, and the Immorality of the Expectation Damages Default 
George G. Triantis
Stanford Law School
6 57 The Holmesian Bad Man Flubs His Entrance 
Barbara H. Fried
Stanford Law School
7 45 Will Firms Consider a European Optional Instrument in Contract Law? 
Gary Low
Maastricht European Private Law Institute
8 44 Consumer Protection and the Islamic Law of Contract 
Muhammad Akbar Khan
International Islamic University
9 28 Mandatory Law: Fundamental Principles 
Hans Christoph Grigoleit
Ludwig Maximilians University of Munich - Faculty of Law
10 27 Acquis Principles 
Hans Christoph GrigoleitLovro Tomasic
Ludwig Maximilians University of Munich - Faculty of Law, Ludwig Maximilians University of Munich - Faculty of Law

[JT]

December 20, 2011 in Recent Scholarship | Permalink | TrackBack (0)

Thursday, December 15, 2011

Employees Cannot Rely on Arbitration Clause, 11th Circuit Rules

11thCircuitSeal

In Jim Walter Resources Inc. v. United Mine Workers of America, plaintiff Jim Walter Resources (Jim Walter) alleged that the defendant Union had conducted a work stoppage in violation of the parties' collective bargaining agreement (the Agreement).  The District Court had dismissed Jim Walter's claim, holding that the dispute was subject to arbitration under the terms of the Agreement.  The Eleventh Circuit reversed and remanded the claim of back to the District Court for trial. 

The Agreement permitted the Union to designate "memorial periods" for legitimate purposes not exceeding a total of ten days during the term of the Agreement.  The Union did so on October 14, 2008 and again on October 28, 2008.  The Union justified the memorial days based on the workers' desire to attend local hearings of the Department of Labor, Mine Safety and Health Administration.  Jim Walter countered that the justification was pretextual, and that the memorial days constituted improper work stoppages as a protest in connection with disputes at one of the mines.  Jim Walter sued and sought damages.  

The Union argued that the Agreement provided a "settlement of disputes" mechanism designed to avoid resort to the courts.  Jim Walter countered that the contract did not "contemplate or provide for . . . the arbitration of any claim or grievance[] asserted by the employer."  Drawing on caselaw from the old 5th Circuit, which included the states now comprising the 11th Circuit and is therefore binding on the 11th Circuit, the Court adopted the rule that an employer is not bound to arbitrate a claim for damages flowing from an alleged breach of a collective bargaining agreement where “the contractual grievance machinery is wholly employee oriented."  The Court noted similar rules adopted in the 1st, 3rd, 7th and 9th Circuits, while conceding that decisions from the 2nd, 3rd and 4th Circuits are arguably to the contrary.  The District Court had relied on the 2nd Circuit's decision in ITT World Communications, Inc. v. Communications Workers of America, 422 F.2d 77 (2d Cir. 1970), but the Supreme Court subsequently called that decision into question in Rock Company v. International Brotherhood of Teamsters, U.S., 130 S. Ct. 2847, 2859, n. 8 (2010).

Here, the Court ruled that the grievance procedure at issue was "wholly employee oriented" and thus did not apply to Jim Walter's claim.

[JT]

December 15, 2011 in Labor Contracts, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Wednesday, December 14, 2011

Firing Bars Enforcement of Non-Compete Clause in Montana

Montana SupremeIn Wrigg v. Junkermier, Clark, Campanella, Stevens, P.C. the Supreme Court of the State of Montana asked the non-musical question: "Can an employer enforce a covenant not to compete when the employer ends the employment relationship?"  Wrigg was a shareholder in JCCS, an accounting firm.  The covenant at issue stated the following:

If this Agreement is terminated for any reason and Shareholder provides professional services in a business...in competition with JCCS the Shareholder agrees as follows:

To pay to JCCS an amount equal to one hundred (100%) of the gross fees billed by JCCS to a particular client over the twelve month period immediately preceding such termination, if the client was a client of JCCS within the twelve month period prior to Shareholder’s leaving JCCS’ employment...and the particular client is thereafter within one year of date of termination served by Shareholder’s partners, or any professional services organization employing the Shareholder.

In May 2009, JCCS's CEO notifed Wrigg that her contract would not be renewed when it came up in June.  the letter reminded Wrigg of the covenant not to compete.  Wrigg had difficulty finding work at another accounting firm, but the covenant made it difficult for her to find work.  Eventually, she found employment with Rudd and Company (Rudd), but in order to do so she had to accept a significant cut in salary from $154,000 to $87,000 due to Rudd's concerns about the covenant.  Wrigg sought a declaration regarding the enforceability of the covenant.  The trial court ruled that the covenant was enforceable because it was reasonable as to time and place, was based on good consideration and afforded reaonable protection without imposing an unreasonable burden on the employer, the employee or the public.  

The key issue for the Montana Supreme Court, not addressed by the District Court, was whether the covenant protected a legitimate business interest in a case such as this one.  Montana generally disfavors covenants not to compete, and the Supreme Court noted that such disfavor is heightened when the employer chooses to end the relationship.  Surveying law from other jurisdictions, the Montana Supreme Court ruled that "an employer normally lacks a legitimate business interest in a covenant when it chooses to end the employment relationship."  The Court found immaterial the question of whether Ms. Wrigg's departure was triggered by a termination or simply the expiration of her contract.  Either way, she did not leave on the terms usually contemplated in such covenants -- she did not voluntarily leave employment so that she could compete against JCCS.

[JT]

December 14, 2011 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

New in Print

Pile of BooksAditi Bagchi, Unequal Promises, 72 U. Pitt. L. Rev. 467 (2011)
 

Michael A. Dorelli  and Phillip T. Scaletta, Recent Developments in Indiana Business and Contract Law. 44 Ind. L. Rev. 1053 (2011)
 

Surya Gablin Gunasekara, "Other Transaction" Authority: NASA's Dynamic Acquisition Instrument for the Commercialization of Manned Spaceflight or Cold War Relic? 40 Pub. Cont. L.J. 893 (2011) 
 

Brent A. Little and Cheryl B. Preston, ICANN Can: Contracts and Porn Sites-Choosing "to Play Internet Ball in American Cyberspace." 21 Pac. McGeorge Global Bus. & Dev. L.J. 79 (2008)
 

Heidi Lynn Osterhout, Maj. U.S. Air Force. No More "Mad Money": Salvaging the Commander's Emergency Response Program, 40 Pub. Cont. L.J. 935 (2011) 
 

Ryan Peterson, Regulating the Global Marketplace: Why the U.S. Government Must Revise the Current Rules on Contracting with Foreign-Controlled U.S. Businesses, 40 Pub. Cont. L.J. 1061 (2011)


Robert E. Scott & Paul B. Stephan, The Limits of Leviathan
: Contract Theory and the Enforcement of International Law (Cambridge UP 2011).


Stephen Waddams, Principle and Policy in Contract Law
: Competing or Complementary Concepts? (Cambridge UP 2011)

[JT]

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

Tuesday, December 13, 2011

Prosecutor's Literary Contract Creates Conflict of Interest

IN Ct of AppealsDavid R. Camm has been twice tried and convicted for the murder of his wife, his son, and his daughter in September 2000.  Twice those convictions have been overturned. During the second trial in 2006, Floyd County Prosecutor Keith Henderson, who had served as prosecutor at the second trial, sought a literary agent for a book he planned to write about the case.  He found an agent and negotiated an agreement between the end of the trial and sentencing.  Three years later, Henderson entered into a contract with Penguin to publish the book "Sacred Trust: Deadly Betrayal" (shouldn't that be a semi-colon?).

When Camm's conviction was reversed for the second time, Henderson wrote to his literary agent.  Henderson emphasized his commitment to writing the book but insisted that it could not come out prior to the completion of a third trial.  Eventually, the parties agreed to cancel the contract, and Henderson returned his advance.  Camm, having learned of the book deal, petitioned for the appointment of a special prosecutor.  Henderson issued a press release in which he noted that the publishing contract had been canceled but stressing his desire that "the unedited version of events needs to be told.”

At a hearing on the petition, Dean Emeritus Norman Lefstein of the Indiana University School of Law testified that Henderson's conduct created a conflict of interest under Indiana's Rules of Professional Conduct 1.7 and 1.8(d).  The trial court rejected that argument, finding that there was no "clear and convincing evidence" of a conflict.  

Camm filed an interlocutory appeal.  The Indiana Court of Appeals reversed, finding that Henderson, in signing a contract to write a book about Camm "permanently compromised his ability to advocate on behalf of the people of the State of Indiana" in Camm's third trial.  The full opinion can be found here: Camm v. State.

[JT]

December 13, 2011 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Weekly Top Tens from the Social Science Research Network

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

October 13, 2011 to December 12, 2011

RankDownloadsPaper Title
1 394 The Corporation as Social Contract 
M. KapteinJohan Wempe
Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM), Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)
2 212 Codification and Flexibility in Private International Law 
Symeon C. Symeonides
Willamette University - College of Law
3 204 Incentive Contracting 
Ralph C. Nash
George Washington University - Law School
4 150 How to Opt into the Common European Sales Law? Brief Comments on the Commission’s Proposal for a Regulation 
Martijn W. Hesselink
University of Amsterdam - Centre for the Study of European Contract Law (CSECL)
5 140 Bijzondere Overeenkomsten in Kort Bestek (Specific Contracts in a Nutshell) 
Alain-Laurent VerbekePieter Matthias BrulezNicolas CaretteNele Hoekx
University of Leuven, Faculty of Law, Department of Private Law, Unaffiliated Authors - affiliation not provided to SSRN
6 126 Keynote Address: A Regulatory Framework for Managing Systemic Risk 
Steven L. Schwarcz
Duke University - School of Law
7 125 A Theory of Redressive Justice 
Andrew S. Gold
DePaul University - College of Law
8 124 Political Risk and Sovereign Debt Contracts 
Stephen J. ChoiG. Mitu GulatiEric A. Posner
New York University (NYU) - School of Law, Duke University - School of Law, University of Chicago - Law School
9 113 Arbitral Power and the Limits of Contract: The New Trilogy 
Alan Scott Rau
University of Texas at Austin School of Law
10 109 Endogenous Institutions: Law as a Coordinating Device 
Gillian HadfieldBarry R. Weingast
USC Law School and Department of Economics, Stanford University - The Hoover Institution on War, Revolution and Peace

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

October 13, 2011 to December 12, 2011

RankDownloadsPaper Title
1 147 How to Opt into the Common European Sales Law? Brief Comments on the Commission’s Proposal for a Regulation 
Martijn W. Hesselink
University of Amsterdam - Centre for the Study of European Contract Law (CSECL)
2 113 Arbitral Power and the Limits of Contract: The New Trilogy 
Alan Scott Rau
University of Texas at Austin School of Law
3 80 Introduction: The Three and a Half Minute Transaction: Boilerplate and the Limits of Contract Design 
G. Mitu GulatiRobert E. Scott
Duke University - School of Law, Columbia University - Law School
4 60 Contract Versus Statute in Internet Governance 
Lee A. Bygrave
University of Oslo
5 56 Subprime Mortgages and the Case for Broadening the Duty of Good Faith 
Chunlin Leonhard
Loyola University New Orleans College of Law
6 55 Promissory Autonomy, Imperfect Courts, and the Immorality of the Expectation Damages Default 
George G. Triantis
Stanford Law School
7 42 Will Firms Consider a European Optional Instrument in Contract Law? 
Gary Low
Maastricht European Private Law Institute
8 38 The Holmesian Bad Man Flubs His Entrance 
Barbara H. Fried
Stanford Law School
9 38 Consumer Protection and the Islamic Law of Contract 
Muhammad Akbar Khan
International Islamic University
10 28 Rollen Und Rollenverständnisse Im Transnationalen Privatrecht (Roles and Role Perceptions in Transnational Private Law) 
Ralf Michaels
Duke University - School of Law

[JT]

December 13, 2011 in Recent Scholarship | Permalink | TrackBack (0)

Greetings from Netanya...

Greetings from Netanya Academic College, where I will enjoy this symposium tomorrow: Law of Contract or Laws of Contracts (here's the program: Download Symposium).  Come join us if you are in Israel!

[Meredith R. Miller]

 

December 13, 2011 in Conferences, Travel | Permalink | Comments (0) | TrackBack (0)

Monday, December 12, 2011

Ticket Pricing Errors and Unilateral Mistakes

A recent letter to the NYT's consumer advocate, the "Haggler," (aka David Segal, who some of us law profs may not love so much anymore since his recent swipe at legal scholarship...) raised some interesting contracts issues. A reader complained that in early September he bought two round trip tickets from San Francisco to Palau for $510 on Korean Air for a trip in February. In the interim, he booked hotels, bought an underwater camera and made plans. Sixty-four days later, he received an email from Korean Air stating that the posted fare was "erroneous" and that his tickets were cancelled. They offered a refund for "travel-related" expenses, including the tickets, and a $200 Korean Air voucher. The reader stated that with the voucher, his new fare would be $360/ticket higher than the fare he had originally booked.

So, what's the price of an average airline ticket to Palau from S.F. in early February? I checked and it's anywhere from $1600 to $2500 for coach. But before you say unilateral mistake -- for didn't the reader check other airlines and know that the quoted rate was so much lower? - I say, Hold on. I realize this is not the first time an airline, or any company, has posted an erroneous fare. The Haggler discussed another incident involving British Airways that arose in 2009 where the company posted fares from U.S. to India for $40. In that case, British Airways covered travel-related costs and gave out $300 vouchers. (One of the issues in an exam I wrote several years ago was inspired by this situation).

But the British Airways case was different from the Korean Air case in several ways. The British Airways fare was so low that I think the purchasers "knew or should have known" about the mistake. The Korean Air price was also low, but given the deals to be found on the Internet and that the tickets were booked so far in advance, it is not evident that the purchaser "should have known" that the fare was a mistake. It's a great deal, but not clearly a mistake. Furthermore, the wrong price was listed for only a few minutes on the British Airways site, whereas the erroneous fare was posted on the Korean Air website for several days ("at least four"). Would it be "unconscionable" to force Korean Air to honor the fare? Maybe. Under Donovan v. RRL Corp., the standard of"unconscionability" for unilateral mistake purposes is lower than required when it's a standalone defense.

There's another issue that was raised in the Haggler column as a potential problem for the purchasers, the "contract of carriage." I checked on the Korean Air website and found the document - all 44 pages of it. It's accessible as a link on the bottom of the Korean Air website, of course. I took a brief glance at the document (necessarily brief b/c of the length). There were some references to Korean Air's ability to cancel for broad and vaguely defined reasons, but I would not have interpreted these as permitting cancellation for posting an erroneous fee - these seemed more appropriately interpreted as allowing cancellation for equipment failure or scheduling or weather complications.

I may have missed it, but I didn't see a provision allowing Korean Air to cancel for posting an erroneous fare after it has confirmed the reservation. To interpret the existing cancellation clauses to mean Korean Air can cancel at will would create mutuality issues. Korean Air would not want to make this argument for while such an interpretation would disadvantage the purchasers in this particular case, it could also mean that the contracts it enters with its other customers are void (and customers could cancel at the last minute).

Another provision I didn't see and just might have missed (although I doubt it) was a choice of law provision with respect to contract claims.

[Nancy Kim]

December 12, 2011 in Commentary, E-commerce, Miscellaneous, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Sunday, December 11, 2011

"Zip-it" contracts in a brave new world

Last week was a big week for contracts to "keep-your-mouth-shut". The L.A. times had this article about the recent exchange between "The Girl with the Dragon Tattoo" producer, Scott Rudin, and New Yorker film critic, David Denby. It seems that Denby broke his promise not to publish a review of an early screening of the movie. While these "agreements" are common in the film and publishing industry, they are much harder to enforce because of the Internet and the ability to post instantaneously.

On the flip side, more businesses that would otherwise not have considered such agreements are doing so. Paul Levy discusses one type of agreement that has been receiving some attention in the blogosphere, "medical confidentiality" agreements. Dave Hoffman blogged about it as well here. While I can understand, on a personal level, the desire to contain what one considers to be unfair negative reviews on an easily googleable website (not that it's ever happened to me, ahem...), these contracts raise a lot of troubling issues. And while it may seem like bad business for a doctor or dentist to have a patient sign a "zip-it" contract, if these practices are widely adopted, they become standard practice, leaving consumers with no real choice (kind of like the intrusive tracking policies adopted by so many websites which we can't really seem to prevent....).

[Nancy Kim]

 

December 11, 2011 in Current Affairs, Miscellaneous, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Friday, December 9, 2011

The Student Evaluation (in Limerick Form)

Bus. Org. Review SessionAs I write, my students at the DePaul University College of Law are taking my Business Organizations exam.  Because I visited at other law schools in Fall 2010 and this Fall, I have not taught contracts in two years.  I miss it, but I had a great deal of fun with the DePaul students.  They were very accepting of me despite the fact that I now have very long hair (for a business law professor) and I banned all use of laptops and electronic devices during class.  As a result, my class had a rather unorthodox look to it, as the picture at right illustrates.

Somehow, a tradition developed in my afternoon class that one of the students would draw a little picture on the attendance sheet.  But when I picked up the attendance sheet after the last day of class, there was no picture.  I immeidately protested.  After class, a student, who would neither confirm nor deny that he had drawn the previous pictures (the outcome of forensic testing is pending), drew a snowman holding a sign.  On the sign, he wrote the following:

At first, I thought Telman a kook,
He looks like Jesus and no Facebook
But despite my apprehension
I actually paid more attention.
That Telman's okay in my book.

Awwwww.

[JT] 

December 9, 2011 in Limericks, Teaching | Permalink | Comments (1) | TrackBack (0)

Thursday, December 8, 2011

More about those gas well leases

Jeremy Telman recently posted about this front page article in the NYT about oil and gas well leases, and the contractual traps for the unwary. This article mentions and explains some common terms in such leases.

There are additional contract issues that were raised by the article having to do with the bargaining process. There's a bargaining imbalance where you have one party with greater financial resources than the other or one with greater financial need. Another bargaining disparity involves knowledge - the oil and gas companies are much more familiar with these types of transactions and more knowledgeable about what could go wrong. It's their business. The landowners, on the other hand, presumably don't enter into these transactions often.

Unfortunately, contract law doesn't usually recognize these kinds of bargaining disparities, especially outside of the consumer context -- at least not to invalidate the contracts. A court might consider them in interpreting ambiguous contractual clauses. In addition, the landowners might be able to raise a lack of good faith argument that might affect the interpretation or construction of some of the contractual clauses or the parties' performance under the contract. For example, one lease cited in the article contained language that said that "preparation" to drill would allow the gas company to extend the duration of the lease. The landowners had negotiated what they considered a bad deal and planned to renegotiate it after it expired. A day before the expiration date, the gas company "parked a bulldozer nearby and started to survey an access road. A company official informed them that by moving equipment to the site, Chief Oil and Gas was preparing to drill and was therefore allowed to extend the lease indefinitely." I don't know about you, but that strikes me as performance that's not in good faith. I hope a judge would agree.

Something else that struck me in reading about these leases was how they highlight the overconfidence and optimism bias in these types of deals. Landowners are likely to focus on the potential upside of these deals - which can be pretty sky high. But things can and do go wrong in any type of transaction. The long term nature of these contracts makes it even more important to think carefully about the risks and not just the upside -- but a long time horizon also makes it harder to evaluate those risks.

And of course, as Jeremy mentioned in his post, there's the Peevyhouse issue. Even if you carefully draft a "clean up" or similar clause, a court may find performance to be economically wasteful and not enforce it. To safeguard against that, the parties might consider putting clean up costs in an escrow account and including a liquidated damages provision.

While this article was about gas well leases, I can see similar issues arising with other long term contracts, particularly those between landowners and energy companies. I predict we'll see a slew of innovative solutions around alternative energy (such as windfarms on private land) which is great - but again, it's important to take a large dose of caution with that optimism, especially if you are representing the "little guy/gal."

[Nancy Kim]

December 8, 2011 in Current Affairs, In the News, True Contracts | Permalink | Comments (0) | TrackBack (0)

Microsoft Adds Class Action Waiver to Xbox Live Terms of Service

First Sony, now Xbox Live.  Apparently this one does not even have the laughable snail mail opt out.

[Meredith R. Miller]

December 8, 2011 in E-commerce, In the News, Web/Tech | Permalink | Comments (0) | TrackBack (0)