ContractsProf Blog

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

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Friday, August 31, 2012

Using the Government's Breach of Contract Suit Against Navy Seal "Mark Owen" in Class?

PentagonThe U.S. government reportedly is considering filing a breach of contract suit against the Navy Seal (pseudonym "Mark Owen") who wrote a book about the raid and killing of Osama bin Laden.  According to a letter obtained by Reuters, the Pentagon has told Owen that his publication of the book would further violate certain confidentiality provisions in agreements between him and the U.S. government.  The Huffington Post reports the contents of the letter as follows:

"In the judgment of the Department of Defense, you are in material breach and violation of the non-disclosure agreements you signed....Further public dissemination of your book will aggravate your breach and violation of your agreements." 

I recently thought about how I could use this case in class without crossing any lines of impropriety (read: without crossing over into an uncomfortably political discussion).  One angle I envisioned was using it when we get to specific performance.  A topic closer to the (mythical?) impropriety line would be whether Owen would have any arguments regarding why the agreements should not be enforced, perhaps including public policy or duress.  Both are a stretch without more facts.  Regardless of specifics, I think it could be a great case to use when discussing the general topics of the limits of contract law and the limits of contract law remedies. 

[Heidi R. Anderson]

August 31, 2012 in Current Affairs, In the News, Teaching | Permalink | Comments (7) | TrackBack (0)

NYLJ Article: Does a Landlord Have A Duty to Mitigate?

According to Sateesh Nori the answer in New York is "No, but maybe."  The article begins:

A lease is both a contract between parties—the landlord and the tenant—and an interest in land. However, this duality has created conflict in determining whether a landlord has a duty to mitigate damages in the event of a tenant's early termination of a lease. The rule that a landlord has a duty to mitigate derives from basic principles of contract law. The doctrine that the landlord has no duty to mitigate, which views a lease not as a contract but as an interest in land, was seemingly mandated by the Appellate Division, Second Department, in Rios v. Carrillo in 2008. Now, four years later, uncertainty still abounds as courts waver in applying contract principles to lease breaches and carve exceptions into the rule that a landlord has no duty to mitigate. This article attempts to identify the factors relied upon by courts where a duty to mitigate has been applied in contravention of established case law.

Worth a read.

[Meredith R. Miller]

August 31, 2012 in In the News, Miscellaneous, Teaching | Permalink | Comments (0) | TrackBack (0)

Wednesday, August 29, 2012

A Reminder from the AALS Section on Contracts

CALL FOR SUBMISSIONS

AALS Section on Contracts, 2013 Annual Meeting Program

AALS

The Executive Committee of the AALS Contracts Section solicits proposals for presentations at the Section’s Annual Meeting program, The Law of Contracts or Laws of Contracts?, to be held in New Orleans, Louisiana on Saturday, January 5, 2013.

             In The Path of the Law, Oliver Wendell Holmes wrote,

"There is a story of a Vermont justice of the peace before whom a suit was brought by one farmer against another for breaking a churn. The justice took time to consider, and then said that he had looked through the statutes and could find nothing about churns, and gave judgment for the defendant."

This story was meant to ridicule the Vermont justice, but he may have been ahead of his time.  This year’s Section Meeting will revisit perennial and fundamental questions about “contract law” as a legal rubric.  Is it preferable to analyze “contracts” as a category, or to disperse contracts into “churn–like” categories, such as sales, consumer protection, employment, family relations, intellectual property, securities, and so on?  To what extent does the experience of one type of contract justify generalizations about “contract law”? Conversely, what kinds of contracts implicate context-specific practices, markets, or policy concerns justifying specialized analysis and/or doctrine? 

The Section seeks three to five presentations that address these and related questions.  We welcome papers that address these questions broadly as well as those that more narrowly discuss the doctrinal, transactional, or policy characteristics of a specific contractual context.

Submissions:

Full-time faculty members of AALS member law schools are eligible to submit proposals.  Please e-mail an abstract or proposal (500 words or fewer) to section chair Thomas Joo ([email protected]) by 5:00 p.m. (Pacific Time) September 7, 2012.  Drafts and completed papers are welcome (though not required), but must be accompanied by an abstract.  Please indicate whether the paper has been published or accepted for publication (and if so, provide the anticipated or actual date of publication).  There is no publication requirement, but preference will be given to papers that will not have been published by the date of the Annual Meeting.

We particularly encourage submissions from contracts scholars who have been active in the field for ten years or less, especially those who are pre-tenured, as well as more senior scholars whose work may not be widely known to members of the Contracts Section.  We will give some preference to those who have not recently participated in the Section’s annual meeting program. 

Thank you for your consideration.  Please contact Thomas Joo or any other Executive Committee Member if you have any questions.

 

AALS Section on Contracts Executive Committee

Curtis Bridgeman

Danielle Hart

Thomas Joo (Chair)

Larry Garvin (Chair-Elect)

Emily Houh

Nancy Kim (Secretary)

[JT]

August 29, 2012 in Conferences | Permalink | TrackBack (0)

The Case of the Non-Existent Arbitral Body

3d CirOn July 26th, the Third Circuit decided Control Screening LLC v. Technological Application and Prod. Co.  The case involved a dispute over the purchase of eight customized X-ray machines for a price of just over $1 million.  The transaction soured and both sides claimed breach.  Control Screening is a New Jersay Company; Techological Application and Production Company (Tecapro) is a state-owned Vietnamese company.  

Although the parties' agreement contained an arbitration clause, Tecapro initiated arbitral proceedings in Belgium under the Belgian Judicial Code.  Control Screening filed a motion to compel arbitration in the United States District Court of New Jersey and to enjoin proceedings in Belgium.    Here's where it gets interesting.  The arbitration clause reads as follows:

In the event all disputes are not resolved, the disputes shall be settled at International Arbitration Center of European countries for claim in the suing party's country under the rule of the Center. Decision of arbitration shall be final and binding [sic] both parties.

The problem is that there is no such thing as the International Arbitration Center of European countries.  

The district court determined that the “only reasonable interpretation of the arbitration clause" was that Taxapro could seek to arbitrate in Vietnam and Control Screening could seek to aribrate in New Jersey.  Since Control Screening exercised its contractual option first, arbitration in New Jersey was proper.  The district court granted Control Screening's motion to compel arbitration.

On appeal, the Third Circuit looked to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), which binding in both the U.S. and Vietnam and is implemented in the U.S. through the Federal Arbitration Act (FAA).    Article II(3) of the New York Convention invalidates an agreement to arbitrate "only when it is subject to an internationally recognized defense such as duress, mistake, fraud, or waiver…”  Here, because the parties mistakenly designated arbitration to commence at a non-existent arbitral body, the forum selection clause of the arbitration agreement is inoperative.  However, the remainder of the agreement establishes an intent to arbitrate.  The Third Circuit treated the agreement as though it had no forum selection clause.  

The FAA provides that “arbitration hearings and proceedings shall be within the district in which the petition for an order directing such arbitration is filed.”  On that basis, the Third Circuit determined that New Jersey was the proper district for the commencement of arbitration.  Because Control Screening’s motion to compel arbitration was brought in the District of New Jersey, the New Jersey arbitration site was proper.

This resolution is not entirely satisifying, as Marc. J. Goldstein points out in his detailed discussion of the case on his Arbitration Commentaries blog.  The parties did not agree on a particular venue, but it was pretty clear that they wanted to arbitrate in Europe.  The Third Circuit acknowledges as much when it rejects (in a footnote) the district court's conclusion that the only reasonable interpretation of the agreement was that each party could initiate arbitration in their home countries.  

The opinion does not state what became of Control Screening's motion to enjoin the proceedings in Belgium.  If a U.S. court grants a motion to compel arbitration in the U.S., does it automatically enjoin foreign aribtral proceedings that had already commenced?  We can understand why that result would follow from the district court's reading of the agreement, but the Third Circuit rejected that reading.  Having acknowledged that the parties anticipated arbitration in Europe, why would the Third Circuit enjoin such a proceeding in favor of a venue to which the parties likely considered and rejected?

[JT and Christina Phillips]

 

 

August 29, 2012 in Commentary, Recent Cases | Permalink | TrackBack (0)

New in Print

Pile of BooksScott J. Burnham, Thoughts on the Withdrawal of Amended Article 2, 52 S. Tex. L. Rev. 519 (2011)

Donald C. Carroll, At-Will Employment: The Arc of Justice Bends Towards the Doctrine's Rejection, 46 U.S.F. L. Rev. 655 (2012).

Chris Dent, Negotiating Control of Artefacts of Creation -- Intellectual Property, Know-How, Confidential Information and Contracts, 43 IIC: Int'l Rev. Intell. Prop. & Competition L. 248 (2012)

Henry Deeb Gabriel, The 2003 Amendments of Article Two of the Uniform Commercial Code: Eight Years or a Lifetime after Completion. 52 S. Tex. L. Rev. 487 (2011)

Fred H. Miller, What Can We Learn from the Failed 2003-2005 Amendments to UCC Article 2? 52 S. Tex. L. Rev. 471 (2011)

John E. Murray, Jr. Revised Article 2: Eliminating the "Battle" and Unconscionability, 52 S. Tex. L. Rev. 593 (2011)

George P. Roach, Rescission in Texas: A Suspect Remedy. 31 Rev. Litig. 493 (2012) 

John M. Scheib, Mind the Gap: Why the Current Case Law on Demurrage Makes Little Sense and Undermines the Federal Statute, 39 Transp. L.J. 53 (2012)

Holly K. Towle, Enough Already: It Is Time to Acknowledge that UCC Article 2 Does not Apply to Software and Other Information, 52 S. Tex. L. Rev. 531 (2011)

Maureen A. Weston, The Death of Class Arbitration after Concepcion? 60 U. Kan. L. Rev. 767 (2012)

[JT]

August 29, 2012 in Recent Scholarship | Permalink | TrackBack (0)

Tuesday, August 28, 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 

June 28, 2012 to August 27, 2012

RankDownloadsPaper Title
1 1452 A Transactional Genealogy of Scandal: From Michael Milken to Enron to Goldman Sachs 
William W. BrattonAdam J. Levitin
University of Pennsylvania - Law School, Georgetown University - Law Center
2 168 You Definitely Should Have: A Contractual Look at Israeli Wedding Gift Culture 
Zvi H. Triger
Striks School of Law, The College of Management Academic Studies (COLMAN)
3 159 What Can Be Wrong with an Option? An Optional Common European Sales Law as a Regulatory Tool 
Horst Eidenmueller
University of Munich
4 141 The Dynamics of Contract Evolution 
Stephen J. ChoiG. Mitu GulatiEric A. Posner
New York University (NYU) - School of Law, Duke University - School of Law, University of Chicago - Law School
5 139 Featuring People in Ads 
Eric GoldmanRebecca Tushnet
Santa Clara University - School of Law, Georgetown University - Law Center
6 135 Hollywood Deals: Soft Contracts for Hard Markets 
Jonathan Barnett
USC Gould School of Law
7 113 Contract and Innovation: The Limited Role of Generalist Courts in the Evolution of Novel Contractual Terms 
Ronald J. GilsonCharles F. SabelRobert E. Scott
Stanford Law School, Columbia University - Law School, Columbia University - Law School
8 82 Autonomy, Pluralism, and Contract Theory 
Hanoch Dagan
Tel Aviv University - Buchmann Faculty of Law
9 82 The Importance of Fault in Contract Law 
Robert A. Hillman
Cornell Law School
10 78 Do Promises Distinguish Contract from Tort? 
Curtis BridgemanJohn C. P. Goldberg
Florida State University - College of Law, Harvard Law School

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

June 28, 2012 to August 27, 2012

RankDownloadsPaper Title
1 168 You Definitely Should Have: A Contractual Look at Israeli Wedding Gift Culture 
Zvi H. Triger
Striks School of Law, The College of Management Academic Studies (COLMAN)
2 159 What Can Be Wrong with an Option? An Optional Common European Sales Law as a Regulatory Tool 
Horst Eidenmueller
University of Munich
3 135 Hollywood Deals: Soft Contracts for Hard Markets 
Jonathan Barnett
USC Gould School of Law
4 82 Autonomy, Pluralism, and Contract Theory 
Hanoch Dagan
Tel Aviv University - Buchmann Faculty of Law
5 82 The Importance of Fault in Contract Law 
Robert A. Hillman
Cornell Law School
6 75 The Return-Reducing Ripple Effects of the 'Carried Interest' Tax Proposals 
Heather M. Field
University of California - Hastings College of the Law
7 73 Reflections on the Two-Handed Lawyer: Thinking versus Action in Business Lawyering 
Jeffrey M. Lipshaw
Suffolk University - Law School
8 62 The Proposal for a Regulation on a Common European Sales Law: Deficits of the Most Recent Textual Layer of European Contract Law 
Horst EidenmuellerNils JansenEva-Maria KieningerGerhard WagnerReinhard Zimmermann
University of Munich, University of Muenster, University of Wuerzburg, University of Bonn, Max Planck Institute for Comparative and International Private Law
9 56 Contracts, Treaties and Umbrella Clauses: Some Jurisdictional Issues in International Investment Arbitration 
Velimir Zivkovic
University of Belgrade - Faculty of Law
10 52 The Contract that Neither Party Intends 
David McLauchlan
Victoria University of Wellington - Faculty of Law

[JT]

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

Monday, August 27, 2012

Sixth Circuit Upholds Sanctions and Remands Union Dispute to the NLRB

6th CirIn July, 2009, DiPonio Construction Company, Inc. (DiPonio) terminated its collective bargaining agreement (CBA) with the International Union of Bricklayers and Allied Craftworkers Local 9’s (the Union).  The Union brought a claim for unfair labor practices (ULP) before the National Labor Relations Board (NLRB) alleging that DiPonio was required by the National Labor Relations Act (NLRA) to bargain for a new CBA.  Five days before the NLRB filed a ULP complaint against DiPonio, DiPonio sought a declaratory judgment from the district court stating that it had properly terminated the CBA.  When the NLRB moved to dismiss DiPonio’s claim for lack of subject matter jurisdiction, DiPonio amended its complaint to include a breach of contract claim and filed a motion to stay the NLRB proceedings.  The timing of the contract claim made it seem motivated by a desire to create jurisdiction in federal court over a dispute over which the NLRB would otherwise have exclusive jurisdiction.

The district court granted the NLRB’s motion to dismiss and imposed sanctions against DiPonio under Rule 11 of the Federal Rules of Civil Procedure.  DiPonio appealed to the Sixth Circuit and the Union sought further sanctions.  Last month, in DiPonio Constrcution Company, Inc. v. Interaitonal Union of Bricklayers and Allied Craftworkers Local 9the Sixth Circuit affirmed the district court’s ruling in its entirety, while refusing to impose further sanctions.  The Sixth Circuit found that the question at issue was primarily one of representation rather than of contractual interpretation, and thus that resolution of the dispute in a federal court was inappropriate. 

The NLRB has exclusive jurisdiction over controversies concerning sections 7 or 8 of the NLRA, but federal courts have concurrent jurisdiction with the NLRB over contracts interpretation issues.  However, where the matter is primarily one of representation instead of contractual interpretation, courts defer to the NLRB. 

The nature of DiPonio’s bargaining obligations depends on whether the parties entered into the CBA pursuant to § 8(f) or § 9(a) of the NLRA.  Section 9(a) requires employers to “bargain with a union that has been designated by a majority of the employees in a unit for the purposes of collective bargaining with the employer,” while section 8(f) “allows unions and employers in the construction industry to enter into CBA’s without requiring the union to establish that it has the support of a majority of the employees in the unit covered by the CBA.”  In short, if the CBA is a § 8 contract, DiPonio has no duty to negotiate for a new CBA, but if it is a § 9(a) contract, it does.

In a 2006 decision, the Sixth Circuit found that a dispute will be treated as “primarily representational” (1) “where the NLRB has already exercised jurisdiction over a matter and is either considering it or has already decided the matter,” or (2) “where the issue is an ‘initial decision’ in the representation area.”  Here, the question of whether the contract was entered into pursuant to § 8(f) or § 9(a) was already before the NLRB (the Union’s ULP Complaint).  Thus, the matter was deemed primarily representational, and the Sixth Circuit handed the case over to the NLRB.

The Sixth Circuit upheld the Rule 11 sanctions that the district court imposed because DiPonio’s breach of contract claim was without merit and was filed in order to delay the NLRB proceedings.

[JT and Christina Phillips]

August 27, 2012 in Labor Contracts, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Contracts Limerick of the Week: Pennsy Supply v. American Ash Recycling Corp.

PavementJust when you thought it was safe to venture onto the blog. . . .

I've actually been in Limerick rehab for the past three years.  But with a new casebook, I have some fresh material.  I think I'm still a bit rusty because the facts of this case are highly Limerickworthy, and yet I'm uncertain that this is a keeper.  

American Ash made available to paving companies a material known as AggRite -- all the paving companies had to do was cart it away.  Pennsy Supply did so for use in paving driveways and parking lots in a high school in Northern York County, Pennsylvania.  In fact, it carted away 11,000 tons of the stuff.  

The AggRite didn't work so well, and the pavement cracked during its first winter.  Pennsy perfomed all the repairs, which involved carting away and disposing of the AggRite, which it turns out is hazardous waste.  I love the idea of dumping 11,000 tons of hazardous waste in a public high school parking lot.  It's the kind of metaphor that could be at the heart of a Don DeLillo novel.  

The Superior Court of Pennsylvania found that there was consideration and thus that Pennsy had a viable warranty claim (at least for the purposes of surviving a motion to dismiss/demurrer).  American Ash received a benefit when Pennsy agreed to haul away 11,000 tons of hazardous waste for free.

Pennsy Supply, Innc. v. American Ash Recycling Corp. of Pennsylvania

The court found a bargain was closed
When American Ash Corp. disposed
Of its AggRite through Pennsy
In the ideal dispens’ry:
A lot to a school juxtaposed.

[JT]

August 27, 2012 in Famous Cases, Limericks, Teaching | Permalink | Comments (1) | TrackBack (0)

Thursday, August 23, 2012

Update Regarding "Earth, Wind & Contract"

Ewf

In March, we briefly mentioned a contract-based royalty payment dispute between one member of the disco group Earth, Wind and Fire, and the children of a deceased member of the group.  According to this story, the defendant, Maurice White, now has responded in court.  (It is unclear whether White's response was an answer to the complaint, a motion for summary judgment, or something else).  White alleges that there was no oral agreement pursuant to which he was to pay royalties and that, if there was an oral agreement, it is not enforceable.  This could end up being a good case to discuss when presenting the statute of frauds.  Expect another post if/when I am able to find the court filings.

[Heidi R. Anderson]

August 23, 2012 in Celebrity Contracts, Current Affairs, Teaching | Permalink | TrackBack (0)

New in Print (including some New Books)

Pile of BooksDaniel Friedmann, Does the Dead Contract Rule Restitution from Its Grave? 92 B.U. L. Rev. 811 (2012) 

Steven J. Koprince, The Small Business Guide to Government Contracts: How to Comply with the Key Rules and Regulations . . . and Avoid Terminated Agreements, Fines or Worse (AMACOM 2012)

Timothy E. Lynch, Gambling by Another Name; The Challenge of Purely Speculative Derivatives, 17 Stan. J.L. Bus. & Fin. 67 (2011)

George J. Siedel, The Double Liar Dilemma in Business Negotiations. 17 Stan. J.L. Bus. & Fin. 1 (2011)

Bill Seiter and Ellen Seiter, The Creative Artist's Legal Guide: Copyright, Trademark and Contracts in Film and Digital Media Production (Yale UP 2012)

[JT]

August 23, 2012 in Recent Scholarship | Permalink | TrackBack (0)

Wednesday, August 22, 2012

Cigarette Packaging and - Contracts?

Last week, the Australian High Court upheld a ban on company logos on cigarette packages. The law that was upheld also requires that the front of cigarette packages show images of the harmful effects of smoking (e.g. mouth ulcers, tumors, etc).

Okay, you might be wondering what this has to do with contracts.  One of my current research interests (obsessions) is the idea of notice substituting for actual assent, especially with online contracts. A dinky hyperlink nestled at the bottom of a page can serve as "notice," at least in the eyes of some courts although most people don't actually notice them.  The fuss over the cigarette packaging (and Big Tobacco really fought hard over this one) underscores something that is often lost on courts evaluating notice in contract cases -- the quality of the notice matters. A warning label in a small text box gets ignored; graphic visual depictions of injured human organs do not. Snazzy corporate labels make smoking seem cool; plain labels don't have that same cachet. Websites, too, could draw more attention to their contracts, but they don't. They certainly know how to grab our attention when they want it, with images and sounds. So why make legal terms so unobtrusive?  Could it be that they don't really want us to read them?

[Nancy Kim]

August 22, 2012 in In the News, Legislation, Miscellaneous, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Tuesday, August 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 

June 21, 2012 to August 20, 2012

RankDownloadsPaper Title
1 1302 A Transactional Genealogy of Scandal: From Michael Milken to Enron to Goldman Sachs 
William W. BrattonAdam J. Levitin
University of Pennsylvania - Law School, Georgetown University - Law Center
2 197 The Optional Instrument of European Contract Law: Opting-in through Standard Terms – A Reply to Simon Whittaker 
Jürgen Basedow
Max Planck Institute for Comparative and International Private Law
3 164 You Definitely Should Have: A Contractual Look at Israeli Wedding Gift Culture 
Zvi H. Triger
Striks School of Law, The College of Management Academic Studies (COLMAN)
4 150 What Can Be Wrong with an Option? An Optional Common European Sales Law as a Regulatory Tool 
Horst Eidenmueller
University of Munich
5 132 Featuring People in Ads 
Eric GoldmanRebecca Tushnet
Santa Clara University - School of Law, Georgetown University - Law Center
6 132 The Dynamics of Contract Evolution 
Stephen J. ChoiG. Mitu GulatiEric A. Posner
New York University (NYU) - School of Law, Duke University - School of Law, University of Chicago - Law Schoo
7 122 Hollywood Deals: Soft Contracts for Hard Markets 
Jonathan Barnett
USC Gould School of Law
8 102 Affirmatively Inefficient Jurisprudence?: Confusing Contractors’ Rights to Raise Affirmative Defenses with Sovereign Immunity 
Steven L. SchoonerPamela Kovacs
George Washington University - Law School, George Washington University - Law School
9 99 Contract and Innovation: The Limited Role of Generalist Courts in the Evolution of Novel Contractual Terms 
Ronald J. GilsonCharles F. SabelRobert E. Scott
Stanford Law School, Columbia University - Law School, Columbia University - Law School
10 96 Law and the Stable Self 
Rebecca E. Hollander-Blumoff
Washington University in Saint Louis - School of Law

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

June 21, 2012 to August 20, 2012

RankDownloadsPaper Title
1 197 The Optional Instrument of European Contract Law: Opting-in through Standard Terms – A Reply to Simon Whittaker 
Jürgen Basedow
Max Planck Institute for Comparative and International Private Law
2 164 You Definitely Should Have: A Contractual Look at Israeli Wedding Gift Culture 
Zvi H. Triger
Striks School of Law, The College of Management Academic Studies (COLMAN)
3 150 What Can Be Wrong with an Option? An Optional Common European Sales Law as a Regulatory Tool 
Horst Eidenmueller
University of Munich
4 122 Hollywood Deals: Soft Contracts for Hard Markets 
Jonathan Barnett
USC Gould School of Law 
5 96 Law and the Stable Self 
Rebecca E. Hollander-Blumoff
Washington University in Saint Louis - School of Law
6 81 Autonomy, Pluralism, and Contract Theory 
Hanoch Dagan
Tel Aviv University - Buchmann Faculty of Law
7 73 The Return-Reducing Ripple Effects of the 'Carried Interest' Tax Proposals 
Heather M. Field
University of California - Hastings College of the Law
8 70 The Importance of Fault in Contract Law 
Robert A. Hillman
Cornell Law School
9 69 Reflections on the Two-Handed Lawyer: Thinking versus Action in Business Lawyering 
Jeffrey M. Lipshaw
Suffolk University - Law School
10 53 The Renegotiating Clause in Petroleum International Joint Venture Agreements 
Talal Abdulla Al-Emadi
University of Qatar

[JT]

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

In Memoriam: David Rakoff

David_rakoff_2006On August 9th, 2012, David Rakoff died of cancer.  David and I went to college together.  We had two things in common: before college, we had both belonged to the same socialist zionist youth group, and we both danced.  Since college, we stayed in touch a bit, because David was a very generous person, but he was out of my league, and we both knew it (although only I would say it).  David was probably the most creative person I ever knew.  

David was incredibly good at so many things.  He made things all the time.  I still remember vividly the characters he created for our college's variety show circa 1984: the Neanderthal, bone-through-the-nose ladies' man who runs into some toughs from the Male Feminist League; the director of Cliffs' Notes music videos, all of whose productions involve columns and leather-clad women with odd markings all over their bodies dancing erotically; and of course the lead in his short, 16mm spoof of French New Wave cinema, Pain D'Amour, in which he falls in love with a baguette.  That was thirty years ago.  I've seen so much theater since then, and so little has stayed with me as David's work has done.  

But he was creative in very basic ways.  One evening, three of us were trying to figure out what to do for dinner.  We went into our friend's kitchen and catalogued the food in her refrigerator and cupboards.  While I mentally reviewed my list of affordable restaurants within walking distance, David gleefully rattled off the useful ingredients he had come across, "Et voilà!".  I could think of no way that the named ingredients could be combined to make something edible, so I asked, "We put all those together, and what do we have?"  "Dinner!" David exclaimed.  It turned out to be a quiche, and it was delicious.  I didn't know it was possible to just make one of those.  Forgive me, I was 20, but David was 19.

Around the same time, David made me a hand-painted birthday card that was also a sort of portrait. The card congratulated me at the beginning of my third decade.  I had to get out a calculator to figure out how I could be entering my third decade at the age of 20.  David accompanied me when I cut off my pony tail.  He kept the hair to use for paintbrushes, or so he said.  I hope he wasn't fibbing.

Although I have all these intimate memories of David, I probably never counted as one of his closest friends.  But who knows?  I think David was still coming to grips with the consequences of his homosexuality in the age of AIDS when we knew each other.   As a result, there were parts of his private life that were closed off to me in that unenlightened era.  David wrote about how he never really formed close attachments to people.  I think his line is "loved by everybody; beloved by none."  If you go to David's Facebook page, you'll see that there are probably hundreds of people who can share memories of David similar to mine in their fondness and intimacy.  If he wasn't capable of true compassion, he did a damn good job of faking it.  For all of his argumentative skills, David succeeded in convincing only himself that he was anything but a mensch.

Although his short film, The New Tenants won an Academy Award, David moved on from film and acting to writing.  He wrote three books, and I learned on Saturday from This American Life, that a novel in verse is forthcoming.  A novel in verse!  

But wait, there is a contracts hook here.  Here is a link to a hilarious contract that David wrote and read for another episode of This American Life.  

David's life was far too short, but he lived it very, very well.

[Jeremy Telman]

August 21, 2012 in Miscellaneous | Permalink | Comments (0) | TrackBack (0)

Monday, August 20, 2012

TOS Grading

An article posted on TechCrunch, available here, discussed a new site which reviews terms of service (TOS) of various websites. The site provides a "grade" for website policies and can be accessed here (btw, it is looking for people to get involved).

[Nancy Kim]

August 20, 2012 in Miscellaneous, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Strike Settlement Considered a Win for Caterpillar

Strike
"Strike" from the National Museum in Warsaw, Poland

As reported in Saturday's New York Times, 780 members of the International Association of Machinists ended their fifteen-week strike when, against the recommendation of union leaders, the workers voted to ratify a six-year contract that contained almost all of the concessions that Caterpillar demanded.  

The contract that the Caterpillare offered included a six-year wage freeze for workers hired before May 2005, a move that Caterpillar justified by claiming that its senior workers were being paid above market levels.  At the time Caterpillar made this pooposal, it was reporting record profits.  

The workers were losing a war of attrition.  105 workers had alredy crossed the picket line and returned to work and no concessions were in sight.  In addition to the pay freeze, the workers agreed to a pension freeze for the same group of senior workers and an increase in employee contributions for health care.  They were able to get Caterpillar to increases the "ratification bonus" form $1000 to $3100.  Caterpillar also agreed to a single 3% increase for workers hired after 2005 at the end of this year.  Finally, workers won a concession on the reasignment of workers, regardless of seniority.  Caterpillar wanted to be able to assign workers to new jobs indefinitely, regardless of seniority.  Under the new agreement, they may do so for a maximum of 90 days.  k

The senior workers subject to the pay freeze earn, on the average, $26/hour, which comes out to about $50,000/year gross, plus overtime.  Caterpillar reported profits of $4.9 billion last year and expects earnings to be stronger still in 2012.  Its chief executive, Douglas R. Oberhelman, increased by 60 percent in 2011 to $16.9 million.  That means his raise was about $8000 per striking worker.  

[JT]

August 20, 2012 in In the News, Labor Contracts | Permalink | Comments (0) | TrackBack (0)

Saturday, August 18, 2012

AMR Corporation motion to end pilots' contract denied

Last week, a federal judge denied AMR Corporation's request to abandon collective bargaining agreements with its pilots' union.  AMR Corp. is the parent company of American Airlines.  AMR is undergoing bankruptcy and the motion was part of its reorganization efforts.  You can read more here

[Nancy Kim]

August 18, 2012 in In the News, Labor Contracts | Permalink | Comments (0) | TrackBack (0)

Friday, August 17, 2012

New Year, New Casebook!

Chomsky-carol KunzNext week, after a two-year hiatus, I will embark on my sixth semester teaching contracts.  This time, for the first time, I will be using Christina Kunz (left) and Carol Chomsky's (right) casebook, Contracts: A Contemporary Approach.  I am looking forward to returning to teaching contracts and especially to trying out a new approach.  

In addition to the new casebook, I am also incorporating clickers into my course for the first time.  That is, I will be polling my students and giving them little un-graded mini-quizzes.  They will give me answers by pressing buttons on their clickers, and I will see the results immediately.  Because the clickers enable the students to participate anonymously, they need not be nervous about getting the wrong answers and I hope that this technology will help me quickly take the temperature of my students and see if the material is sinking in.  

I have colleagues who find one casebook and stick with it, but I am a firm believer in the switcheroo.  I've learned a great deal from teaching out of each of the casebooks I have used prior to this one.  I expect that I will learn a great deal from an intense immersion into Chomsky's and Kunz's approaches to teaching contracts.  And I am eager to see how and the extent to which m students make use of their casebook's interactive features.

But mostly, the new casebook will give me the opportunity to cover some cases that I haven't used before, and new cases mean new limericks!

Stay tuned (bwhahahaha!)

[JT]

August 17, 2012 in Teaching | Permalink | Comments (0) | TrackBack (0)

Thursday, August 16, 2012

New in Print (Books)

Pile of Books

A number of new casebooks or new editions of older casebooks have either come out or are due to come out in the coming weeks.  Here's a taste:

Gerald E. Berendt, et al.,  Contract Law and Practice (3d Ed., LexisNexis 2012)

Richard Craswell & Alan Schwartz, Foundations of Contracts Law (LexisNexis 2012)

John Owen Haley, Fundamentals of Transnational Litigation: The United States, Canada, Japan and the European Union (LexisNexis, 2012)

Charles Knapp, et al., Problems in Contract Law: Cases and Materials (7th Ed., Aspen, 2012)

Robert E. Scott & Jody S. Kraus, Contract Law and Theory (5th Ed., LexisNexis, 2012)

Robert E. Scott & George Triantis, Foundations of Commercial Law, (LexisNexis 2012)

[JT]

 

August 16, 2012 in Recent Scholarship | Permalink | TrackBack (0)

An Early Win for Hewlett-Packard in Its Battle with Oracle

For three decades Oracle and Hewlett-Packard (“HP”)  worked together, with HP selling its hardware and Oracle selling its software, to their shared customers and the two corporations cooperating to make certain that Oracle's software was compatible with HP's servers which run on a system called "Itanium."  Tensions arose when Oracle acquired Sun Microsystems (“Sun”), a direct HP competitor, in 2010.  And things did not get better when Oracle hired HP's former CEO, Marc Hurd, and HP sued to enjoin Hurd from sharing trade secrets with his new employers.  Meanwhile, HP sought assurances from Oracle that it would continue to offer its software on HP’s platforms.  Along with assurances from Oracle’s most senior software execs that it was committed to business as usual, the parties signed a “reaffirmation agreement” (the Agreement), which stated in Paragraph 1:

Oracle and HP reaffirm their commitment to their longstanding relationship and their mutual desire to continue to support their mutual customers.  Oracle will continue to offer its product suite on HP platforms, and HP will continue to support Oracle products…on its hardware in a manner consistent with that partnership as it existed prior to Oracle’s hiring of Hurd.

The parties continued business as usual until Oracle abandoned this “work together” approach.  In a press release issued in March, 2011, it announced, without notice to HP, that new versions of Oracle’s software would no longer be compatible with HP’s server platform.  HP then filed suit, soon followed by Oracle’s very colorful cross-complaint

After a 12-day trial, on August 1st, the Santa Clara Couty Superior Court bestowed this win on HP, fiinding in HP's favor on its claims for both breach of contract and promissory estoppel.  The court found that the parties are bound by the Agreement, and that Oracle has a continuing obligtation to offer its product suite on HP's Itanium-based server platforms until HP discontinues the sale of its Itanium-based servers.   

The Superior Court began its inquiry by breaking down the plain language of Paragraph 1 and determined that (1) the first sentence was fully consistent with a continued obligation to make certain that Oracle software is compatible with HP servers, and (2) the second sentence used the language “Oracle will continue…” which can “only be reasonably interpreted as requiring Oracle to continue offering its product on HP’s Itanium platforms.”

The court rejected Oracle's argument that the Agreement  “merely a ‘public hug’ that imposed no obligations on either party,” and that Oracle “retained absolute discretion with regard to” making its software compatible with HP's systems.  In rejecting the "public hug" theory, the court noted that throughout the parties’ history, 99% of their dealings were accomplished without contracts.  Therefore, based on the parties’ prior course of dealing and the plain language of Paragraph 1, because HP was simply asking Oracle to maintain the business relationship as it had been prior to Oracle’s hiring of Hurd, it was fair and reasonable to require Oracle to continue its obligation to make its software compatible with HP systems.  Since the court interpreted the Agreement as a promise by Oracle to continue to work with HP, it found that Oracle's unilateral announcement that it would no longer make its software compatiable with HP systems constituted a breach of contract.

The court also ruled for HP on its promissory estoppel claim, based upon unambiguous promises made by two Oracle executives.  In reliance upon these assurances, HP provided Oracle with nearly $5 million of Itanium servers for porting and continued to invest in research and development in order to optimizing compatibility with Oracle’s software.  Further, HP also entered into the Itanium Collaboration Agreement (“ICA”) with Intel, a $264 million investment.  As the parties’ had been long-time business partners, it was foreseeable that HP would have no reason to doubt Oracle’s word and would make investments based on its support.   HP relied upon the parties’ long-term, upstanding business relationship to its detriment.  As a result, the court found that all elements of a promissory estoppel claim were satisfied. 

In sum, the plain language of the agreement, Oracle’s continued assurances of commitment, both to HP and to the public, and the parties’ long history of informal dealing sans contracts led the court to find for HP on both the breach of contract and promissory estoppel claims.  The court ordered Oracle to continue its porting obligations without charge “until such time as HP discontinues the sale of its Itanium-based servers.”

As reported here by allthingsd.com, Oracle released the following statement:

“Last March, Oracle made an engineering decision to stop future software development on the Itanium chip.  We made the decision as we became convinced that Itanium was approaching its end of life and we explained our rationale to customers here.  Nothing in the Court’s preliminary opinion changes that fact.  We know that Oracle did not give up its fundamental right to make platform engineering decisions in the 27-words HP cites from the settlement of an unrelated employment agreement.  HP’s argument turns the concept of Silicon Valley ‘partnerships’ upside down.  We plan to appeal the Court’s ruling while fully litigating our cross claims that HP misled both its partners and customers.” 

So, the battle has been lost but the war continues.

[Chrstina Phillips and JT]

 

August 16, 2012 in Recent Cases, Web/Tech | Permalink | Comments (0) | TrackBack (0)

Tuesday, August 14, 2012

Don't Get Screwed Over

Docracy is an open source legal document site.  The site has launched a video campaign called "Don't Get Screwed Over" - it very effectively conveys the importance of freelancers having written contracts:

A free open source contract site is a great idea. I am not convinced, however, that it obviates the need for an attorney.  That said, it is true that, regardless of whether an attorney is involved, freelancers should always get their deals in writing and carefully express expecations and payment schedule.  The site's founder Matt Hall appears to share in my sentiment and believes that his site is a starting point for freelancers to figure out what they need and to find an attorney.  Hall told .net magazine:

[T]he video was designed to "make sure freelancers are aware how important it is to have a contract for work they do, and that there are resources like Docracy that can take the fear and mystery out of the process". He said it's increasingly common that freelancers don't get paid for work they've done, starkly highlighted by projects like the World's Longest Invoice.

Hall recommended "upfront and clear communication with your client about what's expected, when it's expected and when you'll be paid", and then getting this all down in writing and signed. "Clear communication can go a long way to avoiding problems in the future," he added. And while Docracy can be a starting point, Hall said such sites are not a replacement for proper legal advice: "A good lawyer who understands your business will save you money over the long term, so get educated and then find a good lawyer you like working with. We have a bunch of great, tech-savvy lawyers on the site who have already shown their willingness to help freelancers, so they might be a good start."

[Meredith R. Miller]

August 14, 2012 in Film Clips, Miscellaneous, Web/Tech | Permalink | Comments (1) | TrackBack (0)