Friday, August 26, 2011
Many of us who start our Contracts classes with contractual formation likely are, or soon will be, discussing offers, acceptance, and the Objective Theory in class. This recent clip from the popular reality television show, So You Think You Can Dance, may be a fun way to spice up those discussions. I plan to use it to illustrate the difference between an offer and a mere invitation to offer but I could see using it for other concepts, too, such as the importance of context when judging whether a reasonable person would view the discussion as an offer.
The relevant portion should begin automatically after a commercial or two. If not, jump directly to the 26-minute mark. The exchange is between a contestant on the show, the host of the show, and one of the judges. The primary potential offer is one to perform in the judge's upcoming re-make of Dirty Dancing.
Thursday, August 25, 2011
The New York Post reports that the Jane Goodall Institute for Wildlife Research, Education and Conservation is suing Sprout Foods in a $720,000 breach of contract claim. We have not been able to locate an online version of the complaint, but media reports suggest that the Goodall Institute agreed to help market a new baby food to be named "Janey Baby" in return for an estimated $850,000 in royalties. According to the Post, the Institute derives some of its revenue by permitting Jane Goodall's name to be linked with products that are appropriate for association with that name. Since the Goodall name is associated with chimpanzees (and don't worry, we are aware that the picture at left does not contain a chimp), it's not clear to me why that's the name you would want on your baby food, but SpongeBob is on my daughter's toothpaste, despite the fact that we've never associated him with good personal hygiene. Marketing is indeed a mysterious field.
Despite ambitious plans for the new food, and despite the fact that Goodall herself went out to Oregon to visit Sprout's organic farm, Sprout never brought the product to market and never paid the institute its fee. Sprout's primary defense appears to be that the contract was negotiated with its former CEO who was not "authorized" to enter into such an agreement. Hmmm. Although Sprout is defending itself against the charge of contractual breach, it is also "begun discussions with the institute concerning a revised relationship that would be of substantial benefit to both parties," according to the Post.
If your best argument is that your CEO was not an authorized agent on a contract that apparently was partly performed, discussing a revised relationship seems like a good option.
Tuesday, August 23, 2011
I've survived a contracts conference shipwreck. And now I can say I've experienced an earthquake in the middle of teaching Lucy v. Zehmer. Apparently the epicenter is in Mineral, Virginia, population 500. Coincidentally, this looks to be only about a two-hour drive from MCKenney, Virginia, home of the Ye Olde Virginnie.
I hope everyone and everything nearby is safe.
[Meredith R. Miller]
|1||548||How Markets Work: The Lawyer's Version
Mark C. Weidemaier, G. Mitu Gulati,
University of North Carolina (UNC) at Chapel Hill - School of Law, Duke University - School of Law
|2||86||Unfair Terms in Contracts between Businesses
Martijn W. Hesselink,
University of Amsterdam - Centre for the Study of European Contract Law (CSECL)
|3||83||Pluralism and Perfectionism in Private Law
Tel Aviv University - Buchmann Faculty of Law
|4||76||Contract Drafting: A Prerequisite to Teaching Transactional Negotiation
Tina L. Stark,
Boston University School of Law
|5||53||The Possible Irony of AT&T versus Concepcion
Colin P. Marks,
St. Mary's University School of Law
|6||49||Law as a ByProduct: Theories of Private Law Production
Bruce H. Kobayashi, Larry E. Ribstein,
George Mason University - School of Law, University of Illinois College of Law
|7||47||Contracting for Procedure
Kevin E. Davis, Helen Hershkoff,
New York University (NYU) - School of Law, New York University (NYU) - School of Law
|8||33||Deleted Words, Prior Negotiations and Contract Interpretation
Victoria University of Wellington - Faculty of Law
|9||30||Restitution and Relationships
Tel Aviv University - Buchmann Faculty of Law
|10||30||Bringing Order to Contracts Against Public Policy
David Adam Friedman,
Willamette University College of Law
Monday, August 22, 2011
This is the sort of mess that local governments deal with all the time, but this one hits home for those of us in the Valparaiso Community School District. As reported in the Northwest Indiana Times, the Valparaiso Community School Board held a special meeting on August 4th to approve a contract to erect a $250,000 scoreboard at the high school in time for the start of the football season. As public expenditures go, this one seems a no-brainer, as the Board apparently believed on August 4th that it could cover the cost of the new scoreboard with advertising revenues within five years.
Some Valparaisans were outraged, however, by the lack of public discussion and by the deficient notice prior to the special meeting held on August 4th. At a subsequent Board meeting on August 16th, public outrage was exacerbated by the revelation that the school had in fact secured only $54,000 in advertising revenues and there are divergent accounts of what information about advertising commitments was supplied to the Board at the time it approved the contract.
But here's where it gets interesting. The Board defended its hasty action on the ground that the $250,000 contract had already been entered into by unnamed "individuals who thought they had the authority" to enter into such a contract. This revelation by the Board was met with a smattering of laughter at the public meeting. Why were the outraged Valparaisans laughing? Because they know that, under agency law, thinking you have the authority to enter into a $250,000 contract is not the same thing as having such authority. And if residents find it laughable that some employee of the high school would claim to have such authority, the other party to the contract knew or should have known that such contracts require Board approval to be binding. In short, there was no need for the Board to rush to approve the contract, because the contract was never binding in the first place.
In addition, there is the separate, disputed issue of whether such a contract must be awarded only after a solicitation of competitive bids, which did not occur in this case.
Whether or not the contract was enforceable at the time it was signed, the Board has now adopted it, so it has become binding. That does not mean that it could not be challenged of course. Angry Valparaisans could run to court and seek to enjoin any further measures to install the new scoreboard. But doing so would cost taxpayers more money, and so citizens who would like to hold the allegdly unaccountable Board to account while also preventing improper expenditures of public funds are faced with a Hobson's choice.