ContractsProf Blog

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

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Wednesday, February 29, 2012

Best Contracts Scholarship of 2011: And the Winner Is . . . .

Ben-Shahar, OmriOmri Ben-Shahar, Frank and Bernice J. Greenberg Professor of Law at the University of Chicago Law School.  The winning article, Fixing Unfair Contracts, was published in 63 Stan. L. Rev. 869 (2011).

 Here is the abstract to Professor Ben-Shahar's article:

Various doctrines of contract and consumer protection law allow courts to strike down unfair contract terms. A large literature has explored the question which terms should be viewed as unfair, but a related question has never been studied systematically—what provision should replace the vacated unfair term? How should a distributively unfair contract be fixed? This Article demonstrates that the law uses three competing criteria for a replacement provision: (1) the most reasonable term; (2) a punitive term, strongly unfavorable to the overreaching party; and (3) the minimally tolerable term, which preserves the original term as much as is tolerable. The Article explores in depth the third criterion—the minimally tolerable term—under which the smallest intervention that is necessary is applied. This criterion, which has received no prior scholarly notice, is surprisingly prevalent in legal doctrine. The Article surveys its ubiquity and explores its conceptual and normative underpinnings.

The competition was fierce, but of the five finalists, Professor Ben-Shahar's article was the only one that was in everyone's top two. Thanks to all who participated in the process for selecting our first annual top contracts law review article.  Thanks especially to the blog editors, Eniola Akindemowo, Heidi Anderson, Nancy Kim, and Meredith Miller for reading each of the five finalists and helping to choose the winner.

Congratulations, Professor Ben-Shahar, and thank you for your singular contributions to contracts scholarship.  We look forward to seeing you at the Spring Contracts Conference this weekend.

[JT]

February 29, 2012 in About this Blog, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 28, 2012

Best Contracts Scholarship of 2011: Honorable Mentions, Part IV

Two weeks ago we announced the top vote getters in our search for the best contracts scholarship of 2011.  We, the editors of the blog then voted for our favorites among those five, which are:

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

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

Juliet P.Kostritsky, Interpretive Risk and Contract Interpretation: A Suggested Approach for Maximizing Value2 Elon L. Rev. 109 (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)

The voting confirmed the quality of the competition, as each of the finalists had its supporters, with three different articles receiving at least one vote for #1 among the five of us who voted.

In order to draw out the suspense as long as possible, we will count down to #1 Casey Kasem style, except that our honorable mentions are in no particular order. 

Kostritsky_julietHonorable mention #4 goes to Juliet Kostritsky, Everett D. & Eugenia S. McCurdy Professor of Contract Law at the Case Western Reserve University School of Law.

Jody S. Kraus and Robert E. Scott, in Contract Design and the Structure of Contractual Intent (84 N.Y.U. L. Rev. 1023  (2009)), have urged courts to enforce the contractual terms that the parites have chosen, unless they have given the court an invitation to exercise equitable powers through the use of terms such as "best efforts."  According to Professor Kostritsky, the result is that Kraus and Scott divide the world of contracts in to those capable of strict enforcement and those with open terms.  Professor Kostritsky takes issue with this view and urges courts to use a variety of tools of interpretation, whether or not the contractual terms are specific, including: "ordinary meaning, trade usage, the entire contract, the purpose of the contract, the surrounding circumstances, and reasonableness."  Courts should aim to "maximize gains from trade and minimize deadweight losses and transaction costs."

Professor Kostritsky's articles reviews numerous situations in which courts have made interpretive interventions despite the lack of open-ended terms in the contracts or delegations of interpretive authority to the courts.  Professor Kostritsky favors such interventions whenever the court determines that the costs of intervention are less than the net benefits and efficiency gains that will result from intervention.  In determining whether or not to intervene, courts should consider the following factors: (1) whether the intervention is likely to curb opportunistic behavior; (2) the ease and cost of the court’s intervening; (3) whether the court can intervene by constructing a liability rule or deciding a legal question based on considerations of projected effects on parties’ behavior given average assumptions about human behavior; (4) whether there are impediments to express contracting; (5) whether informal sanctioning mechanisms exist; and (6) the effect of intervention on the prospect of uncontrolled discretion in a performance obligation.

[JT]

February 28, 2012 in About this Blog, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Weekly Top Tens from the Social Science Research Network

Stephen_Colbert_at_RallyStephen Colbert (pictured) often makes a big deal about the "Colbert Bump" that candidates get from appearing on his show, but that's nothing compared to the Berggren Bump that contracts profs get when ContractsProf Blog Intern 2.0 Justin Berggren posts about their work.  Take as a case in point Zev Eigen, whose work Empirical Studies of Contract was enjoying the respectful obscurity that all too often greets works of serious scholarship.   But now that Justin has given his endorsement of Professor Eigen's project, he's sprung to the top of the Law & Society: Contracts Top Ten!

Folks on the Contracts & Commercial Law Top Ten, you'd better watch out if you are north of #5.  And the rest of you, perhaps it's time you had your people contact Justin's people.  But don't come on too strong.  Start by taking him to lunch.

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

December 30, 2011 to February 28, 2012


Rank Downloads Paper Title
1 422 The Scope and Implications of Stern v. Marshall, 131 S. Ct. (2011)
Michael St. Patrick Baxter, Elizabeth Gibson, Randal C. Picker, R. Patrick Vance,
Covington & Burling LLP, University of North Carolina (UNC) at Chapel Hill - School of Law, University of Chicago - Law School, Jones Walker - New Orleans Office
2 359 Choice of Law in the American Courts in 2011: Twenty-Fifth Annual Survey
Symeon C. Symeonides,
Willamette University - College of Law
3 160 Bankruptcy, Backwards: The Problem of Quasi-Sovereign Debt
Anna Gelpern,
American University Washington College of Law
4 134 The Proposal for a Regulation on a Common European Sales Law: Shortcomings of the Most Recent Textual Layer of European Contract Law
Horst Eidenmueller, Nils Jansen, Eva-Maria Kieninger, Gerhard Wagner, Reinhard Zimmermann,
University of Munich, University of Muenster, University of Wuerzburg, University of Bonn, Max Planck Institute for Comparative and International Private Law,
5 133 Empirical Studies of Contract
Zev J. Eigen,
Northwestern University School of Law
6 111 Contract Theory: Is There a Path Through the Theoretical Jungle?
Martin Hogg,
University of Edinburgh - School of Law
7 104 Boomer-Ang Eldercare: Deductible Claim?
Wendy C. Gerzog,
University of Baltimore - School of Law,
Date posted to database: February 6, 2012
Last Revised: February 6, 2012
8 96 Judging Lite: How Arbitrators Use and Create Precedent
Mark C. Weidemaier,
University of North Carolina (UNC) at Chapel Hill - School of Law,
9 87 The WTO’s Revised Government Procurement Agreement - An Important Milestone Toward Greater Market Access and Transparency in Global Public Procurement Markets
Robert D. Anderson, Steven L. Schooner, Collin D. Swan,
World Trade Organization, George Washington University - Law School, George Washington University - Law School
10 78 A Radical View of Legal Pluralism
Jan M. Smits,
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI),

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

December 30, 2011 to February 28, 2012

Rank Downloads Paper Title
1 132 Empirical Studies of Contract
Zev J. Eigen,
Northwestern University School of Law
2 111 Contract Theory: Is There a Path Through the Theoretical Jungle?
Martin Hogg,
University of Edinburgh - School of Law
3 96 Judging Lite: How Arbitrators Use and Create Precedent
Mark C. Weidemaier,
University of North Carolina (UNC) at Chapel Hill - School of Law
4 77 Aggregation and Law
Ariel Porat, Eric A. Posner,
Tel Aviv University, University of Chicago - Law School,
Date posted to database: December 20, 2011
Last Revised: February 23, 2012
5 65 A Dual Approach to Contract Remedies
Michael D. Knobler,
Yale University - Law School,
Date posted to database: December 9, 2011
Last Revised: February 10, 2012
6 60 Beyond Ex Post Expediency - An Ex Ante View of Rescission and Restitution
Richard R. W. Brooks, Alexander Stremitzer,
Yale University - Law School, UCLA School of Law
7 54 Contract Law's Inefficiency
David M. Driesen,
Syracuse University - College of Law
8 53 Private Law and Moral Practices Part 1: Contract
Prince Saprai, George Letsas,
University College London - Faculty of Laws , University College London - Faculty of Laws
9 50 Non-State Law in the (Proposed) Hague Principles on Choice of Law in International Contracts
Genevieve Saumier, Lauro Gama,
McGill University - Faculty of Law, PUC-Rio
10 48 Contracts Meet Henry Ford
Barak D. Richman,
Duke University - School of Law

[JT]

February 28, 2012 in Recent Scholarship | Permalink | TrackBack (0)

Best Contracts Scholarship of 2011: Honorable Mentions, Part III

Two weeks ago we announced the top vote getters in our search for the best contracts scholarship of 2011.  We, the editors of the blog then voted for our favorites among those five, which are:

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

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

Juliet P.Kostritsky, Interpretive Risk and Contract Interpretation: A Suggested Approach for Maximizing Value2 Elon L. Rev. 109 (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)

The voting confirmed the quality of the competition, as each of the finalists had its supporters, with three different articles receiving at least one vote for #1 among the five of us who voted.

In order to draw out the suspense as long as possible, we will count down to #1 Casey Kasem style, except that our honorable mentions are in no particular order.  

GoldbergHonorable mention #3 goes to Victor Goldberg, Jerome L. Greene Professor of Transactional Law at Columbia Law School.

Professor Goldberg provides the following useful summary of his article:

Most Contracts casebooks feature either Baird v. Gimbel or Drennan v. Star Paving to illustrate the limits on revocability of an offer. In this article an analysis of the case law yields three major conclusions. First, as is generally known, in the contractor–subcon- tractor cases Drennan has prevailed. However, both it and its spawn, Restatement 2d 87(2), have had almost no impact outside that narrow area. Moreover, almost all the cases involve public construction projects—private projects account for only about ten percent of the cases. This suggests that private parties have managed to resolve the problem contractually. Public contract law is encrusted with regulations, which courts and contracts scholars have ignored. The result is a peculiar phenomenon—a supposedly general contract doctrine that applies only in a specific context, but which ignores the features of that context.

 [JT]

February 28, 2012 in About this Blog, Government Contracting, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Monday, February 27, 2012

Recent Scholarship: Zev Eigen on Empirical Studies of Contract

In Empirical Studies of Contract,  Zev Eigen, examines scholarly works published in the last seven years from the fields of, among others, law, management, sociology, psychology, and law and economics to report the trend of empirical analysis of the relationship of contracting party behavior to contract terms.  Eigen aims to determine whether scholars are asking the right questions and whether their methods are producing reliable empirical data. 

EigenProfessor Eigen briefly reviews the history and evolution of contracts doctrine and the trend noted as early as 1963 (by Stewart Macaulay) of a growing “discord between how contract is experience and how the law assumes contract is experienced.”  He next presents the methods used to classify the papers reviewed.  Professor Eigen classified 113 empirical papers according to the eight questions they sought to answer.  These eight questions are then sorted in relation to two propositional poles: 1) Contracts are a product of how drafters and signers interpret the law; and 2) Contracts are a product of factors exogenous to the law. 

The paper’s findings include the following: 1) researchers are increasingly persuaded that actors do not behave rationally or in ways that optimize efficiency; 2) moral constraints are important in understanding how individuals interpret contractual obligations; and 3) there has been a notable rise in scholarly exploration of form contracting.

Professor Eigen recommends that scholars improve the substance and methods of collecting empirical data.  He notes in the scholarship a disproportionate focus on certain questions and corresponding neglect of others.  He makes a number of suggestions for empirical projects that scholars might undertake.  As to method, Professor advocates more qualitative analysis as well as the observation that forty percent of the papers evaluated used experimental methodologies, a relatively high percentage. 

Based on his review of recent empirical works on contracts, Professor Eigen concludes that they review “the fungibility of contract law in . . . post-Durkheimian and post-Weberian contemporary life, wherein the role of law is reduced, and perhaps more importantly, compartmentalized.”  In our world, contract law parallels or shadows “extra-legal sources of power, authority, status and norms of exchange” rather than moderating and mediating social and economic exchange on its own.

[JT and Justin Berggren]

February 27, 2012 in Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Best Contracts Scholarship of 2011: Honorable Mentions, Part II

Two weeks ago we announced the top vote getters in our search for the best contracts scholarship of 2011.  We, the editors of the blog then voted for our favorites among those five, which are:

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

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

Juliet P.Kostritsky, Interpretive Risk and Contract Interpretation: A Suggested Approach for Maximizing Value2 Elon L. Rev. 109 (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)

The voting confirmed the quality of the competition, as each of the finalists had its supporters, with three different articles receiving at least one vote for #1 among the five of us who voted.

In order to draw out the suspense as long as possible, we will count down to #1 Casey Kasem style, except that our honorable mentions are in no particular order.  

Kemit_mawakanaHonrable mention #2 goes to 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)

Kemit Mawakana is Associate Professor of Law at the University of the District of Columbia's David A Clarke School of Law, where he teaches contracts and the Community Development Law Clnic. 

Professor Mawakana's article uses anthropological work to highlight the danger that injustices will arise as a result of the Federal Circuit's embrace of the plain meaning rule (PMR) in Coast Federal Bank, FSB v. United States, 323 F.3d 1035 (Fed. Cir. 2003) (en banc).  Dr. Ani developed the concept of the rhetorical ethic (RE) which she associates with Euro-American culture.  The RE assists Euro-Americans in the maintenance of power, enabling them to talk of lofty principles such as peace and goodwill while in fact engaging in war and other destructive practices.  According to Dr. Ari, "Nowhere other than in European culture do words mean so little as indices of belief."

After an introductory section providing examples of the RE at work in U.S. society ("All men are created equal . . ."), Professor Mawakana takes us through the history of the PMR.  Applying the PRM in the contractual context, courts give words their plain, ordinary, and literal meaning, even if that meaning differs from the parties intention and even if it yields to harsh or inequitable results.  The PMR fell into disfavor in the 20th century, havnig been rejected by the Restatement (Second) of Contract and by the Uniform Commercial Code, but some jurisdictions still follow the PMR, and the Federal Circuit embraced it in its 2003 decision in Coast Federal

Professor Mawakana next reviews the facts and history of Coast Federal, in which the Federal Circuit en banc reversed a panel decision, finding that the PMR applied to this very complex case with a tortured history.  He reviews arguments for an against the PMR, and then, in a concluding section explains the PMR with the assistance of Dr. Ari's RE theory.  From this perspective, the PMR is an embodiment of RE and injects hypocrisy into the pursuit of justice.  Professor Mawakana's solution is simple: permit the introduction of extrinsic evidence in contractual disputes.

[JT]

February 27, 2012 in About this Blog, Government Contracting, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Best Contracts Scholarship of 2011: Honorable Mentions, Part I

Two weeks ago, we announced the top vote getters in our search for the best contracts scholarship of 2011.  We, the editors of the blog then voted for our favorites among those five, which are:

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

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

Juliet P.Kostritsky, Interpretive Risk and Contract Interpretation: A Suggested Approach for Maximizing Value2 Elon L. Rev. 109 (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)

The voting confirmed the quality of the competition, as each of the finalists had its supporters, with three different articles receiving at least one vote for #1 among the five of us who voted.

In order to draw out the suspense as long as possible, we will count down to #1 Casey Kasem style, except that our honorable mentions are in no particular order.  

Honorable mention #1 goes to 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)

CaplenRobert Caplen, shown here in the author photo of his book, Shaken & Stirred: The Feminism of James Bond, was the Articles Editor of the Florida Law Review, a Research Editor of the University of Florida Journal of Law & Public Policy, and a board member of the Florida Journal of International Law. He was a litigation associate at Greenberg Traurig, LLP in Washington until 2007 when he assumed his current responsibilities as clerk for Judge Sweeney at the Court of Federal Claims,  In August 2012, he will begin a one-year clerkship on the Ninth Circuit. 

Those engaged in the lively sub-field of government contracting law may already be familiar with Robert Caplen's article, which addresses the standard for supplementing the administrative record in bid protests heard by the Court of Federal Claims.   His title refers to Esch v. Yuetter, 876 F.2d 976 (D.C. Cir. 1989), which encouraged a flexible approach towards supplementating the administrative record.  The Court of Federal claims addressed the Esch standard recently in Axiom Resource Mgt., Inc. v. U.S., 564 F.3d 1374 (Fed. Cir. 2009) and now calls for a more individuated treatment of motions to supplement the administrative record.

After the introduction, Part II of Mr. Caplen's article addresses legal standards applicable to bid protests in the Court of Federal Claims.  The primary focus of that court's proceedings in bid protests is the administrative record reviewed by the agency whose decision is challenged in the court.  This presents some difficulty, Caplen points out, since the agency whose discretion the court is supposed to review is also the agency that, in its discretion, assembles the administrative record.  The flexible approach set forth in Esch allows parties to supplement the administrative record for various reasons.  

Grounds for permissible supplementation pursuant to Esch include allegations of bias or bad faith and the eight Esch exceptions, which Caplen describes as follows:

(1) when the record before the court does not adequately explain agency action; (2) when the agency does not consider factors relevant to its final decision; (3) when evidence not included in the record was considered by the agency; (4) when a case or issue is so complex that moreevidence is needed to enable a court to understand everything clearly; (5) when evidence arising after the agency action proves one way or another whether the decision was correct; (6) when an agency is sued for its failure to take action; (7) in cases arising under the National Environmental Policy Act; and (8) in cases where relief, particularly apreliminary injunction, is at issue.

As Caplen explains, there was some inconsistency in the treatment of the Esch exceptions, with some courts describing them as "factors," while in some cases any one of the exceptions is treated as grounds for supplementing the record.  Almost immediately, other courts criticized Esch.  

According to Caplen, the Federal Circuit had never directly addressed the standard for review of decisions by the Court of Federal Claims to supplement the administrative record prior to Axiom.  He summarizes the Axiom approach as follows:

[T]he Federal Circuit mandated that the court evaluate the agency-assembled record before resorting to supplementation, a process that could potentially allow courts to supplement the record more frequently and survive appellate scrutiny by justifying their decisions upon the use of generic and nebulous language.

 In Axiom, the Federal Circuit disapproved of the Court of Federal Claims' reliance on Esch.  The Federal Circuit found such reliance inappropriate to the extent that it was inconsistent with the general standard, reaffirmed in the Supreme Court's decision in Florida Power & Light Co. v. Lorion, 470 U.S. 729 (1985).  Caplen then explores the uncertainties in that standard.  

He notes that the main effect of Axiom is that the Court of Federal Claims has learned not to cite to Esch but to insulate its decisions from review through circumlocutions that achieve the same results as would have been achieved by following Esch.  Caplen notes the significant danger that courts will now allow supplementation more frequently, or more erratically, because the standards announced in Axiom are so vague as to permit a great deal of variation in their implementation.

[JT]

February 27, 2012 in About this Blog, Government Contracting, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

The Spring Contracts Conference Is Only Days Away!!

We will be honoring Professor Melvin Eisenberg for a lifetime of important contributions to contracts scholarship.  We will also be honoring our selection for the best contracts article to appear in 2011 (keep an eye on this blog for an announcement of the winner later this week).  

San Diego
For those seeking more information on the conference, at which CLE credits are available, here is the main page.

And for those already stocking up on suntan lotion for the trip to San Diego, here is the conference program.

We at the blog are proud to note one of our own contributors, Eniola Akindemowo, is the conference organizer.  Thanks and congratulations to Eniola for pulling this conference together!

[JT]

February 27, 2012 in Conferences | Permalink | Comments (0) | TrackBack (0)

Friday, February 24, 2012

Another Rowling contract

In other news about J.K. Rowling, it turns out that the hugely successful author of the Harry Potter series has just signed a contract for an adult novel (no not an adult novel, but an adult novel). The Washington Post has the story here  What's interesting is that the book did not go to "auction" but was negotiated by her new agent with Little Brown, a new publisher. I would love to see the terms of that publishing contract!

[Nancy Kim]

February 24, 2012 in Books, Celebrity Contracts | Permalink | Comments (0) | TrackBack (0)

Rowling Settles Contract Dispute with Former Agent

The Telegraph reports here that JK Rowling has settled a dispute with her former literary agent, Christopher Little. Little was the agent who pulled Rowling's manuscript for the first Harry Potter book out of the slush pile. Much to Little's surprise, Rowling decided to join a former agent of Little's, Neil Blair, at Blair's new agency. It seems like there's loads of contract law issues here - Little undoubtedly had an exclusive agreement with Rowling to represent her, Blair may have had a non-compete with Little. Did Little's agency agreement contain the exclusive right to represent Rowling with respect, not just to her published works and associated film rights, but "new media" such as Rowling's Pottermore website (which she and Blair were working on while both were with Little)? Did the work done by Rowling and Blair on Pottermore violate their agreements with Little? Unfortunately for us contracts profs, the terms of the agreements are all confidential....

This situation brings up an issue that I've always wondered about with respect to exclusive agency agreements -contract law seems to me somewhat one-sided, in favor of agents, when it comes to exclusive agency contracts. Wood v. Lucy, Lady Duff Gordon held that an exclusive agency agreement that did not specify performance targets did not lack consideration because it was implied that an exclusive agent would exercise reasonable efforts to perform, otherwise the agent wouldn't get paid. But I think it's not uncommon for agents representing uknown writers, actors and singers, to spend their time on their established clients and only use minimal efforts to promote their new, lesser known, clients. Clients typically terminate the agency after the period of exclusivity in that situation, but under the rationale in the Lady Duff Gordon case, couldn't the clients sue for "breach" of the duty to use reasonable efforts? I would think the answer is yes. The bigger hurdle would be damages, which would be hard to calculate with any certainty for a new, unproven artist. There's also the bargaining power issue. There's typically a lack of bargaining power between a new client and an agent (we're not talking here about Rowling the rich and famous author, but Rowling the unpublished struggling single mom on government benefits). Theoretically, a client could terminate an agency agreement during the period of exclusivity if the agent is not exercising reasonable efforts - but a client would only do that if she had another agent or was able to sell her [insert creative work here] on her own. In that case, the terminated agent would likely sue the client for a share of any royalties, claiming that the client did not give the agent adequate time to perform under the agency agreement. 

[Nancy Kim]

February 24, 2012 in Books, Celebrity Contracts, Miscellaneous | Permalink | Comments (2) | TrackBack (0)

Did Fabio Capello Breach His Contract by Criticizing the Football Association?

Fabio-CapelloAccording to The Guardian, Fabio Capello (pictured), manager of England’s national football team could be in breach of contract after publicly challenging the Football Association’s (FA) decision to strip John Terry, England’s national football team captain, of his captaincy.  The Guardian reports that the FA made this decision after John Terry allegedly racially abused English footballer, Anton Ferdinand.  Capello was upset that this decision was taken without consulting him.  Capello said that he felt “undermined by the FA decision to notify him after the decision had  been made.

Capello also objects to the substance of the decision, finding it premature.  Preferring civil justice to sports justice, Capello believes that Terry should remain captain until the courts decide whether he committed the crime. 

While the details of Capello’s contract are unknown, People Management reports the contract likely gives the FA final say regarding squad selection, but does that also relate to choosing the team captain?   People Management also suspects that the contract contains some sort of gag provision and notes that in the UK, senior executive contracts often contain a provision preventing the employee from bringing the company into disrepute or making a public statement that is in direct conflict with a statement made by the employer.  If Capello’s contract contained this provision, he may be in breach for making his views, opposing the FA’s decision, public.  Whether such a remedy entitles the FA to treat Capello’s conduct as a repudiation of the agreement or can serve as grounds for dismissal will turn on the precise contractual language.

As the Guardian reports here, Capello resigned as Manager on February 8th, and the parties agreed to a £1.5 million settlement.  Capello's annucal salary was £6 million.  A confidentiality agreement means we will never get to explore the issues of breach in more detail. 

[JT & Janelle Thompson]

February 24, 2012 in Celebrity Contracts, Sports | Permalink | Comments (0) | TrackBack (0)

Thursday, February 23, 2012

Supreme Smack Down of West Virginia on the FAA

In yet another arbitration case, on Tuesday the Supreme Court decided per curiam Marmet Health Care Center, Inc. v. Brown.  The Court chastised West Virginia’s Supreme Court of Appeals for handing down three decisions that disregarded the Court’s interpretations of the Federal Arbitration Act (FAA).  The Court vacated the West Virginia rulings, which had held unenforceable pre-dispute arbitration agreements that apply to claims alleging personal injury or wrongful death at nursing homes.

In all three cases, a family member of a deceased patient sued the nursing home for negligent injuries or harm resulting in the patient’s death.  The nursing homes sought to compel arbitration.  The cases were consolidated, and the West Virginia Supreme Court of Appeals held, as a matter of public policy, that no agreement could compel arbitration of a claim of negligence that results in personal injury or wrongful death.   Calling the Supreme Court’s interpretation of the FAA “tendentious” and reasoning that Congress did not intend for the FAA to apply to personal-injury or wrongful-death suits, the West Virginia Supremes refused to compel arbitration.  

Tendentious?

 

The Court pointed out that the FAA does not contain exceptions for wrongful-death or personal-injury claims.  Instead it enforces the parties’ bargain to arbitrate disputes and “reflects an emphatic federal policy in favor of arbitral dispute resolution.”  Furthermore, the court explained that in AT&T Mobility LLC v. Concepcion, the U.S. Supreme Court held that “when state law prohibits outright the arbitration of a particular type of claim, the analysis is straightforward:  The conflicting rule is displaced by the FAA.”

Although the West Virginia Court had also found the arbitration agreements invalid because unconscionable, the U.S. Supremes remanded on that issue, indicating suspicion that the West Virginia had held the agreement unconscionable because it violated West Virginia public policy, a notion the Court held preempted under the FAA.  On remand the state court must decide if the arbitration clauses at issue are unconscionable under state common law principles that somehow escape federal preemption.

[JT and Janelle Thompson]

February 23, 2012 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Law and Social Norms: The Jumbotron Kiss

481px-El_Beso_(Pinacoteca_de_Brera,_Milán,_1859)It is common at sporting events to have a segment during time-outs at which the camera focuses on couples (always heterosexual, natch) and, as the crowd looks at their images on the Jumbotron, the couples almost invariably kiss.  This practice is known as the Kiss-Cam.

This week's installment of This American Life includes a short introductory segment in which tv producer Bill Langworthy recounts how he was induced by the Kiss-Cam to kiss his ex-girlfriend's best friend, a woman whom, according to Bill, he would not otherwise kiss for any amount of money. 

This American Life's host, Ira Glass, points out that Bill "did not have to kiss her; there would be no penalty; there was no contract; no money had changed hands. . . . "  Bill explains that he felt that, with everyone watching, and with a producer looking at him, expecting him to act, he felt compelled to kiss his ex-girlfriend's best friend.  This is a nice little gloss on the view that we often comply with our obligations (or even our perceived obligations) whether or not we are legally obligated to do so for reasons apart from contractual obligation.  And so, a surprisingly high percentage of commercial obligations -- even among sophisticated parties who could lawyer the relationship to death if they so choose -- arise informally. 

But we offer a different perspective on what is going on here.  Bill explains that he attended the ball game with two friends, a married couple.  Someone who coordinates the Kiss-Cam segment came around and asked the married couple if they would mind kissing for the Jumbotron.  They agreed.  This was already a revelation, since the parties often look as though they are taken by surprise when the Kiss-Cam seizes upon them.  Who knew it was all a set-up?  In any case, according to Bill, a few beer runs later, the parties had switched seats, so when the Kiss-Cam alighted, it hit him and his ex-girlfriend's best friend, instead of their married neighbors. 

Since Bill is himself a producer, it seems reasonable to assume that he understood how things like the Kiss-Cam operate.  Having identified its prey, the Kiss-Cam was going to focus on a particular seat, rather than on, for example, the tall guy wearing a baseball cap and the home team's jersey., since that latter description lacks specificity in the context of a sporting event. 

Come on Bill, maybe you really wanted to kiss her and were just waiting for the Jumbotron to permit you to break the taboo?

[JT]

February 23, 2012 in Commentary, Sports, True Contracts | Permalink | Comments (0) | TrackBack (0)

Wednesday, February 22, 2012

New in Print

Pile of Books
George R. La Noue, Western States' Light: Restructuring the Federal Transportation Disadvantaged Business Enterprise Program 22 Geo. Mason U. Civ. Rts. L.J. 1 (2011).

Timothy E. Lynch,  Derivatives: A Twenty-First Century Understanding 43 Loy. U. Chi. L.J. 1 (2011)

Schillig, Michael. Directive 93/13 and the 'Price Term Exemption': A Comparative Analysis in the Light of the 'Market for Lemons' Rationale. 60 Int'l & Comp. L.Q. 933 (2011)

Drury D. Stevenson &Nicholas J. Wagoner, FCPA Sanctions: Too Big to Debar? 80 Fordham L. Rev. 775 (2011)

[JT]

February 22, 2012 in Recent Scholarship | Permalink | TrackBack (0)

What's More Exciting than FarmVille?

Well, anything really. . . .

 

(sorry about the commercial)

But the answer we were looking for is a lawsuit about FarmVille:

According to a decision issued on February 6, 2012, by Oakland, California Judge Yvonne Gonzales Rogers, popular game developer Zynga, Inc., (“Zynga”), may owe some of its success to rival game creator, SocialApps, LLC, (“SA”).  As stated in SA’s First Amended Complaint, the company invested substantial time, resources and money to develop “myFarm,” the first social networking game to allow players to create their own virtual farms, which it released on Facebook in or about November 2008.  In or about May of 2009, Zynga approached SA about a possible purchase or license agreement regarding intellectual property rights, confidential information and source code for myFarm.  The parties subsequently entered into a letter agreement wherein SA agreed to provide information to Zynga for “due diligence” purposes.  Under both the express and implied terms of the agreement the parties had a mutual expectation that if Zynga used SA’s myFarm concept and distinct features, Zynga would compensate SA for such use.  However, once SA provided Zynga with its source code for myFarm, Zynga stopped communicating and never compensated or credited SA.

 After Zynga’s June 19, 2009 release of its own game, FarmVille, SA filed suit, believing Zynga had used its confidential source code without permission or compensation to develop the game.  Zynga subsequently filed a Motion to Dismiss SA’s claims of misappropriation of trade secrets and various breach of contract claims.  Judge Rogers allowed the various breach of contract claims to move forward, but dismissed the claim in regards to theft of trade secrets related to images and various features of myFarm, on the grounds that these images were available to the public before the May 2009 letter agreement or June 2009 release of FarmVille.

While Zynga obtained a partial win, Judge Rogers let stand the three claims for breach of implied contract, confidence, and implied covenant related to the myFarm source code.  According to the Judge, “the allegations here are sufficient to allege conduct beyond a mere breach of the terms of the agreement which would support a claim for tort damages."   As reported by Law.com, Zynga has yet to seek dismissal of SA’s claims for copyright infringement and breach of written contract. 

[JT & Christina Phillips]

February 22, 2012 in Recent Cases, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 21, 2012

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

December 23, 2011 to February 21, 2012

Rank Downloads Paper Title
1 412 The Scope and Implications of Stern v. Marshall, 131 S. Ct. (2011)
Michael St. Patrick Baxter, Elizabeth Gibson, Randal C. Picker, R. Patrick Vance,
Covington & Burling LLP, University of North Carolina (UNC) at Chapel Hill - School of Law, University of Chicago - Law School, Jones Walker - New Orleans Office
2 338 Choice of Law in the American Courts in 2011: Twenty-Fifth Annual Survey
Symeon C. Symeonides,
Willamette University - College of Law
3 153 Bankruptcy, Backwards: The Problem of Quasi-Sovereign Debt
Anna Gelpern,
American University Washington College of Law
4 111 The Proposal for a Regulation on a Common European Sales Law: Shortcomings of the Most Recent Textual Layer of European Contract Law
Horst Eidenmueller, Nils Jansen, Eva-Maria Kieninger, Gerhard Wagner, Reinhard Zimmermann,
University of Munich, University of Muenster, University of Wuerzburg, University of Bonn, Max Planck Institute for Comparative and International Private Law
5 101 Contract Theory: Is There a Path Through the Theoretical Jungle?
Martin Hogg,
University of Edinburgh - School of Law,
Date posted to database: January 12, 2012
Last Revised: February 3, 2012
6 90 Judging Lite: How Arbitrators Use and Create Precedent
Mark C. Weidemaier,
University of North Carolina (UNC) at Chapel Hill - School of Law,
Date posted to database: January 10, 2012
Last Revised: January 27, 2012
7 89 Boomer-Ang Eldercare: Deductible Claim?
Wendy C. Gerzog,
University of Baltimore - School of Law
8 81 The WTO’s Revised Government Procurement Agreement - An Important Milestone Toward Greater Market Access and Transparency in Global Public Procurement Markets
Robert D. Anderson, Steven L. Schooner, Collin D. Swan,
World Trade Organization, George Washington University - Law School, George Washington University - Law School
9 76 A Radical View of Legal Pluralism
Jan M. Smits,
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI)
10 69 Aggregation and Law
Ariel Porat, Eric A. Posner,
Tel Aviv University, University of Chicago - Law School

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

December 23, 2011 to February 21, 2012

Rank Downloads Paper Title
1 101 Contract Theory: Is There a Path Through the Theoretical Jungle?
Martin Hogg,
University of Edinburgh - School of Law
2 90 Judging Lite: How Arbitrators Use and Create Precedent
Mark C. Weidemaier,
University of North Carolina (UNC) at Chapel Hill - School of Law
3 69 Aggregation and Law
Ariel Porat, Eric A. Posner,
Tel Aviv University, University of Chicago - Law School
4 59 A Dual Approach to Contract Remedies
Michael D. Knobler,
Yale University - Law School
5 58 Empirical Studies of Contract
Zev J. Eigen,
Northwestern University School of Law
6 51 Beyond Ex Post Expediency - An Ex Ante View of Rescission and Restitution
Richard R. W. Brooks, Alexander Stremitzer,
Yale University - Law School, UCLA School of Law,
7 50 Private Law and Moral Practices Part 1: Contract
Prince Saprai, George Letsas,
University College London - Faculty of Laws , University College London - Faculty of Laws
8 49 Contract Law's Inefficiency
David M. Driesen,
Syracuse University - College of Law
9 43 Contracts Meet Henry Ford
Barak D. Richman,
Duke University - School of Law
10 48 Non-State Law in the (Proposed) Hague Principles on Choice of Law in International Contracts
Genevieve Saumier, Lauro Gama,
McGill University - Faculty of Law, PUC-Rio

[JT]

February 21, 2012 in Recent Scholarship | Permalink | TrackBack (0)

Sunday, February 19, 2012

"Lady" Spears Settles Exclusive Licensing Dispute

In a previous post, I outlined some parallels between Britney Spears and Lady Duff Gordon, both of whom were sued for violating allegedly exclusive licensing deals.  Britney's dispute was with Brand Sense, who sued upon discovering that Britney was entering into fragrance deals with other parties despite their allegedly exclusive arrangement with her to promote the fragrance, Radiance (ad embedded).  According to the ever-reliable TMZ, Britney and Brand Sense have settled their dispute, with Britney agreeing to pay the overdue commissions.  Bummer.  I was hoping for a reported opinion.  

[Heidi R. Anderson]  

 

February 19, 2012 in Celebrity Contracts | Permalink | TrackBack (0)

Friday, February 17, 2012

Snyder on How to "Dine and Ditch" Under the UCC

Frank-snyder1The ABA Journal reports that The Cheesecake Factory will begin posting drink prices in Massachusetts after a lawyer threatened suit.  According to the article, the lawyer "threatened to sue under the Massachusetts Consumer Protection Act on behalf of a friend who was charged $11 for a margarita at a Cheesecake Factory in Chestnut Hill. The price was not on the menu and the server was only able to provide a range of drink costs."  

The ABA Journal looks to our very own founder, Franklin Snyder, for guidance.  Previously, Frank had commented in a New York Times column about Nello.  This Manhattan restaurant has (had?) a practice of not mentioning the price of a white truffle pasta lunch special.  This practice shocked a recent diner when he turned over a bill charging $275 for the dish.  To the New York Times, Snyder commented:

“You might be interested in letting your readers know that a restaurant meal is a ‘sale of goods’ under Article 2 of the Uniform Commercial Code,” he wrote. “The code provides that where the buyer and seller have agreed to a contract but have not agreed on the price, the price is not what the seller subsequently demands. It’s a reasonable price for the goods at issue. Thus a customer has no obligation to pay for anything more than the reasonable price of a pasta meal at a trendy restaurant.”

He continued: “In this circumstance, a customer should make a reasonable offer for the value of the meal, then walk out and wait to be sued for breach of contract. Be sure to leave the restaurant full contact information so they can’t claim that you’re trying to steal something.”

Thanks for the tip, Frank! I'm heading over to Nello for the truffle pasta dish.  I hope there isn't a price listed on the menu.

[Meredith R. Miller]

February 17, 2012 in About this Blog, Commentary, Contract Profs, Food and Drink, In the News, Legislation | Permalink | Comments (3) | TrackBack (0)

Will M.I.A.'s Next Hit Appear on an SSRN Top Ten List?

MIA_front_faceIn a little-noticed incident, since most people were watching Downton Abbey that night, a British rapper, M.I.A. (pictured left) performing during this year’s NFL Super Bowl halftime show, looked into the camera, uttered an expletive, and flipped the bird to millions of viewers around the world.  As a result, in addition to millions of people knowing of her existence, she may be in breach of contract with the NFL. 

As reported by Yahoo.com Sports, NFL spokesman, Greg Aiello, maintains that when the league hires the entertainment for the show, the artists are required to sign an agreement containing safeguards concerning artists’ conduct.  TMZ.com reports that the agreement between M.I.A. and the NFL contained a clause indemnifying the NFL against any fines that may be imposed by the Federal Communications Commission (FCC) as a result of her behavior during the halftime show.  TMZ also reported that the NFL agreed to indemnify NBC against any such fines, because the NFL is responsible for the halftime show’s content.  M.I.A. thus may be contractually obligated to pay any fines that the FCC chooses to impose on NBC and the NFL.   The news reports do not make clear what other remedies the NFL might have against M.I.A., since the indemnification clause would seem to cover any harms the NFL could suffer as a result of M.I.A.’s conduct.

The FCC sets out the relevant regulatory scheme as follows:

Obscene material is not protected by the First Amendment and cannot be broadcast at any time. To be obscene, the material must have all of the following three characteristics:

  • an average person, applying contemporary community standards, must find that the material, as a whole, appeals to the prurient interest;
  • the material must depict or describe, in a patently offensive way, sexual conduct specifically defined by applicable law; and
  • the material, taken as a whole, must lack serious literary, artistic, political, or scientific value.

Indecent material is protected by the First Amendment, so its broadcast cannot constitutionally be prohibited at all times.  However, the courts have upheld Congress' prohibition of the broadcast of indecent material during times of the day in which there is a reasonable risk that children may be in the audience, which the Commission has determined to be between the hours of 6 a.m. and 10 p.m.  Indecent programming is defined as “language or material that, in context, depicts or describes, in terms patently offensive as measured by contemporary community standards for the broadcast medium, sexual or excretory organs or activities.”  Broadcasts that fall within this definition and are aired between 6 a.m. and 10 p.m. may be subject to enforcement action by the FCC. 

Profane material also is protected by the First Amendment, so its broadcast cannot be outlawed entirely. The Commission has defined such program matter to include language that is both “so grossly offensive to members of the public who actually hear it as to amount to a nuisance” and is sexual or excretory in nature or derived from such terms.   Such material may be the subject of possible Commission enforcement action if it is broadcast within the same time period applicable to indecent programming: between 6 a.m. and 10 p.m.

So, FCC fines may result if the FCC determines that M.I.A.'s conduct was either obscene, indecent or profane, as the halftime show aired before 10 PM.

[JT and Christina Phillips]

 

February 17, 2012 in Celebrity Contracts, In the News, Sports, Television | Permalink | Comments (0) | TrackBack (0)

Wednesday, February 15, 2012

New in Print

Pile of Books

Richard R.W. Brooks and Alexander Stremitzer. Beyond Ex Post Expediency--an Ex Ante View of Rescission and Restitution, 68 Wash. & Lee L. Rev. 1171 (2011)

David Campbell, A Relational Critique of the Third Restatement of Restitution Section 39, 68 Wash. & Lee L. Rev. 1063 (2011)

Kevin E. Davis and Helen Hershkoff, Contracting for Procedure, 53 Wm. & Mary L. Rev. 507 (2011)

Anthony Duggan, Proprietary Remedies in Insolvency: a Comparison of the Restatement (Third) of Restitution & Unjust Enrichment with English and Commonwealth Law, 68 Wash. & Lee L. Rev. 1229 (2011).

Mitchell L. Engler and Susan B. Heyman, The Missing Elements of Contract Damages, 84 Temp. L. Rev. 119 (2011)

Victor P. Goldberg, After Frustration: Three Cheers for Chandler v. Webster. 68 Wash. & Lee L. Rev. 1133 (2011)

W.M.C. Gummow, Justice, High Court of Australia, Moses v. Macferlan 250 Years On, 68 Wash. & Lee L. Rev. 881 (2011)

Richard H. Hiers, Ancient Laws, Yet Strangely Modern: Biblical Contract and Tort Jurisprudence, 88 U. Det. Mercy L. Rev. 473 (2011)

Candace Saari Kovacic-Fleischer, Cohabitation and the Restatement (Third) of Restitution & Unjust Enrichment, 68 Wash. & Lee L. Rev. 1407 (2011)

Andrew Kull, Three Restatements of Restitution. 68 Wash. & Lee L. Rev. 867 (2011)

Peter Linzer and Donna L. Huffman, Unjust Impoverishment: Using Restitution Reasoning in Today's Mortgage Crisis. 68 Wash. & Lee L. Rev. 949 (2011)

David F. Partlett, and Russell L. Weaver. BP Oil Spill: Compensation, Agency Costs, and Restitution. 68 Wash. & Lee L. Rev. 1341 (2011)

Joseph M. Perillo, Restitution in a Contractual Context and the Restatement (Third) of Restitution & Unjust Enrichment, 68 Wash. & Lee L. Rev. 1007 (2011)

Doug Rendleman, .Measurement of Restitution: Coordinating Restitution with Compensatory Camages and Punitive Damages, 68 Wash. & Lee L. Rev. 973 (2011)

Adam Rigoni,  A Sin of Admission: Why Section 62 Should Have Been Omitted from the Restatement (Third) of Restitution & Unjust Enrichment. 68 Wash. & Lee L. Rev. 1203-1226 (2011).

George P. Roach, Counter-Restitution for Monetary Remedies in Equity. 68 Wash. & Lee L. Rev. 1271 (2011)

James Stevem Rogers, Indeterminacy and the Law of Restitution, 68 Wash. & Lee L. Rev. 1377 (2011)

Caprice L. Roberts, The Restitution Revival and the Ghosts of Equity. 68 Wash. & Lee L. Rev. 1027 (2011)

Lionel Smith, Common Law and Equity in R3RUE, 68 Wash. & Lee L. Rev. 1185 (2011)

Michael Traynor, The Restatement (Third) of Restitution & Unjust Enrichment: Some Introductory Suggestions, 68 Wash. & Lee L. Rev. 899 (2011)

Louis E. Wolcher,  Intent to Charge for Unsolicited Benefits Conferred in an Emergency: A Case Study in the Meaning of "Unjust" in the Restatement (Third) of Restitution & Unjust Enrichment. 68 Wash. & Lee L. Rev. 9117 (2011)

W.F. Young, Translocations and Inertia. 68 Wash. & Lee L. Rev. 1335 (2011)

[JT]

February 15, 2012 in Recent Scholarship | Permalink | TrackBack (0)