ContractsProf Blog

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

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Monday, December 31, 2012

Of Hobbits and Contracts

The other night, I finally got to see The Hobbit:  An Unexpected Journey.  Having recently spent several months in New Zealand (the home of Peter Jackson’s Weta studio), I had been surrounded by Hobbit-mania and was interested to see whether the movie proved worthy of the hype.  I wasn’t disappointed.  Although some critics were, well, critical, I thought it was an extremely entertaining movie that made time fly.  Making a highly entertaining movie even better, a lengthy contract played a pivotal role.  When Gandalf the Wizard, and Thorin and his company of dwarves seek Bilbo Baggins’ (i.e. the aforesaid hobbit’s) assistance to accompany them as burglar on an unexpected journey, they first ask him to sign a contract.  The contract, several pages long, outlines in detail his compensation (i.e. consideration) and contains warnings and numerous disclaimers of liability in favor of Thorin & Co.  Being a wise hobbit, Bilbo actually reads the contract, faints, and then refuses to sign it. The next morning, he awakens to a quiet house (dwarves know how to party, but apparently do so responsibly). Bilbo has a change of heart, decides he does want excitement and adventure, signs the contract, picks it up, and runs out of his house to join the departing dwarves.  This is where --for a contracts prof -- the tension is most high.  Having rejected the terms of the contract the night before, we know that the hobbit no longer has the power of acceptance.  Therefore, when Bilbo thrusts his signed contract into the hands of one of the dwarves, he is only making an offer.  It is the dwarf (who apparently has authority to accept on behalf of the other dwarves) who has the power of acceptance.  I don’t think I need a spoiler alert before revealing that they do accept (there wouldn’t be much of a movie if they didn’t). 

There were so many things to like about the movie, not the least of which was the way it illustrated how relational contracts set expectations, shape relationships and establish trust. At one point, Bilbo seeks to desert the dwarves. Although one could argue changed circumstances, I think a better explanation would be that given Thorin’s disparaging comments about Bilbo’s suitability for the journey, Bilbo decides to adjust his performance obligations accordingly.  But events (and the always fascinating Gollum) intervene.  In the end, Bilbo carries out his contractual obligations, proving that - even in Middle Earth - contracts are alive and well.

[Nancy Kim]

 

 

 

 

 

December 31, 2012 in Film, Film Clips, Miscellaneous | Permalink | Comments (1) | TrackBack (0)

Judge Posner on Third-Party Invocation of Forum Selection Clauses

At issue in Adams v. Raintree Vacation Exchange, LLC was "the enforceability of a forum selection clause by entities not named as parties to the contract in which the clause appears."  

Plaintiffs bought timeshare interests in villas at a resort called Club Regina in Baja California, in Mexico (pictured).   Apparently, the villas in question were never built, and plaintiffs filed suit in Illinois against Raintree Vacation Exchange (Raintree) and its business partner in the venture, Starwood Vacation Ownership (Starwood).  Plaintiffs alleged that Raintree owed Starwood $10 million and that Starwood used plaintiffs' money to pay off its debts instead of building the villas.

TijuanaEach contract contained a choice of forum provision providing for jurisdiction in Mexico City federal district courts.  Although that provision also implied that Mexican law should apply, neither party relied on Mexican law, so Judge Posner found that the provision had been waived.  Defendants moved to dismiss the claim based on the choice of forum provision and the District Court granted the motion.

On appeal, plaintiffs alleged that defendants could not rely on the forum selection clause because they were not parties to the original contract, which had been with a Mexican entity that became a Raintree affiliate.  Judge Posner noted that plaintiffs cited to no authority for their claim that litigants who are not parties to a contract cannot rely on such a contract's choice of forum provision, and that lack of authority would be grounds enough for affirming the District Court's decision.  Nonetheless, Judge Posner decided to "trudge on."  

There rule in such cases is that a nonparty to a contract containing a forum selection clause may rely on it if it is "closely related" to the suit.  Judge Posner acknowledges that the standard is rather vague but he breaks it down into two elements, “affiliation” and “mutuality,” which apply in this case to Raintree and Starwood respectively.  Forum slection clauses can sometimes be enforced by companies related to the original party to the agreement that contains the clause.  Thus Raintree may invoke the clause in this case because of its relationship to the Mexican company that entered into the agreement with plaintiffs.  As Judge Posner noted, if courts were not willing "in appropriate circumstances to enforce forum selection clauses against affiliates of signatories, such clauses often could easily be evaded."

Starwood can rely on the forum selection claues because plaintiffs allege that Starwood was an undisclosed principal (Posner calls it a "secret principal") of the Mexican entity with which plaintiffs contracted.  Under agency law, plaintiffs could have invoked the forum selection against Starwood, and as a result of the principle of mutuality, that means that Starwood can also invoke the clause against plaintiffs.

Plaintiffs make the additional argument that since the entire agreement was fraudulent, defendants cannot rely on the forum selection clause.  Seems sensible, but Posner says it is wrong.  Even the contract is fraudulent, that does not make the forum selection clause fraudulent.  There is nothing unclear or misleading about the clause.  Nothing about it suggest an intent to mislead.

 [JT]

December 31, 2012 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Wednesday, December 26, 2012

Weekly Top Tens from the Social Science Research Council

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

October 27, 2012 to December 26, 2012

RankDownloadsPaper Title
1 352 The Cross-Border Freedom of Form Principle Under Reservation: The Role of Articles 12 and 96 CISG in Theory and Practice 
Ulrich G. Schroeter
University of Mannheim - Faculty of Law
2 306 Libertarianism, Law and Economics, and the Common Law 
Todd J. Zywicki
George Mason University - School of Law, Faculty
3 219 Losing the Paper – Mortgage Assignments, Note Transfers and Consumer Protection 
Alan M. White
City University of New York (CUNY) - School of Law
4 181 CISG and CESL 
Ulrich Magnus
c/o Max Planck Institute for Comparative and International Private Law
5 125 Lewellyn Slept Here: A Short History of Sticky Contracts and Feudalism 
Cheryl B. PrestonEli McCann
Brigham Young University - J. Reuben Clark Law School, Unaffiliated Authors - Independent
6 116 Sovereign Immunity and Sovereign Debt 
Mark C. Weidemaier
University of North Carolina (UNC) at Chapel Hill - School of Law
7 112 Contracting About Private Benefits of Control 
Ronald J. GilsonAlan Schwartz
Stanford Law School, Yale Law School 
8 107 The Historical Origins of America's Mortgage Laws 
Andra C. Ghent
Arizona State University (ASU) - Finance Department
9 106 Commercial Sales: The Common European Sales Law Compared to the Vienna Sales Convention 
Marco LoosHarriët Schelhaas
University of Amsterdam - Centre for the Study of European Contract Law (CSECL), Unaffiliated Authors - affiliation not provided to SSRN
10 105 Monism and Dualism in International Commercial Arbitration: Overcoming Barriers to Consistent Application of Principles of Public International Law 
S.I. Strong
University of Missouri School of Law

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

October 27, 2012 to December 26, 2012

RankDownloadsPaper Title
1 352 The Cross-Border Freedom of Form Principle Under Reservation: The Role of Articles 12 and 96 CISG in Theory and Practice 
Ulrich G. Schroeter
University of Mannheim - Faculty of Law
2 218 Losing the Paper – Mortgage Assignments, Note Transfers and Consumer Protection 
Alan M. White
City University of New York (CUNY) - School of Law
3 181 CISG and CESL 
Ulrich Magnus
c/o Max Planck Institute for Comparative and International Private Law
4 125 Lewellyn Slept Here: A Short History of Sticky Contracts and Feudalism 
Cheryl B. PrestonEli McCann
Brigham Young University - J. Reuben Clark Law School, Unaffiliated Authors - Independent
5 106 Commercial Sales: The Common European Sales Law Compared to the Vienna Sales Convention 
Marco LoosHarriët Schelhaas
University of Amsterdam - Centre for the Study of European Contract Law (CSECL), Unaffiliated Authors - affiliation not provided to SSRN
6 96 An EU Law for Cross-Border Sales Only – Its Meaning and Implications in Open Markets 
Jürgen Basedow
Max Planck Institute for Comparative and International Private Law
7 88 A People's History of Collective Action Clauses 
Mark C. WeidemaierG. Mitu Gulati
University of North Carolina (UNC) at Chapel Hill - School of Law, Duke University - School of Law
8 78 Contract Theory and the Failures of Public-Private Contracting 
Wendy Netter EpsteinWendy Netter Epstein
Illinois Institute of Technology - Chicago-Kent College of Law, Kirkland & Ellis
9 62 Set in Stone? Change and Innovation in Consumer Standard Form Contracts 
Florencia Marotta-WurglerRobert Brendan Taylor
New York University (NYU) - School of Law, Kirkland & Ellis
10 57

A Plea for European Conflict Rules on Proprietary Security 
Ulrich Drobnig
Max Planck Institute for International and Comparative Private Law


[JT]

December 26, 2012 in Recent Scholarship | Permalink | TrackBack (0)

Holiday Blog Round Up

JlipshawWe have been relatively quiet these past few days as we focus on digestion and other festive activities.  But other law bloggers have been busy.

Bernstein-gaia-lg_1Over at Prawfsblawg, Jeff Lipshaw (pictured, left) has an extended discussion of "legal realism" and contracts pedagogy, and a few other prawfs jump in with interesting comments.

Meanwhile, over at Concurring Opinions, Gaia Bernstein (pictured right) has a post on legislative prohibitions on egg and sperm donor anonymity and the impact of such prohibitions on surrogacy.  According to Bernstein, such prohibitions are common abroad and are gaining ground in the U.S.  She has an article on the subject, which can be found here.

Also at Concurring Opinions, Dave Hoffman has this short post about a provision in credit agreements providing that collection calls are not to be treated as "unsolicited."  Dave suggests that screening calls from one's bank might then be construed as a breach of contract, but a comment suggests that the provision only protects the bank against any allegation that it has violated "do not call" list regulations.

[JT]

December 26, 2012 in Commentary, Weblogs | Permalink | Comments (0) | TrackBack (0)

Monday, December 24, 2012

Ohio Supreme Court Finds Claim by Foreign Student Time Barred

Ohio supreme courtIn September 1993, Mohamed Bassem Rayess, having graduated from a Syrian medical school and completed a residency in France, applied to United States Educational Commission for Foreign Medical Graduates (the Commission) to take Part I of the United States Medical Licensing Examination (USMLE), which is split into four, three-hour exams administered over a two day period.  Dr. Rayess took that exam and failed.  

Fifteen years later, Dr. Rayess sued the Commission, alleging that it had failed to allow him the full time for his exam.  For some reason, Ohio has a fifteen year statute of limitations for claims of breach of a written contract.  Dr. Rayess attached to his complaint: 1) a copy of his application to take the USMLE and an acknowledgement of its receipt; 2) his letter enclosing payment for the exam and a copy of his cancelled check; 3) a transfer request (to take the exam at a different site) and evidence of payment for the transfer; 4) a copy of an informational pamphlet provided by the Comission and a confirmation regarding Dr. Rayess's test site; and 5) an account statement provided by the Commission, reflecting his payments.

The trial court found that these documents did not establish an express, written contract and dismissed the case base on the lapse of the six-year statute of limitations that applies to allegations of breach of an oral promise.  An intermediate appellate court reinstated the claim.  In Rayess v. Educational Commission for Foreign Medical Graduates, the Ohio Supreme Court reversed and reinstated the trial court's dismissal of Dr. Rayess's suit.  In the suit, the Commission asked the Supreme Court to rule on the following proposition:

A written contract cannot exist when it is based on a general informational brochure coupled with supplemental evidence to establish the obligations of the parties.

 The Supreme Court found that the documents that Dr. Rayess attached to his complaint did not suffice to establish a written contract.  "Rather, the commission provided Rayess with an informational pamphlet describing the testing procedure, and Rayess submitted an application to take the examination. Neither the pamphlet nor the application imposed any express enforceable duty on the commission or Rayess."  More specifically, the Commission made no express, written promises about test conditions or times.  As a result the case was a dismissed, which is a shame, because it would have been very interesting to see how Dr. Rayess was going to prove that he was not allowed adequate time to complete his exam fifteen years ago.

[JT]

December 24, 2012 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Thursday, December 20, 2012

From Our Self-Promotion Department: Telman on Totten (Again)

LincolnThey say that doing the same thing over and over and expecting different results is the hallmark of insanity.  But it's also the hallmark of scholarship.  I have just posted on SSRN the shortest version yet of my argument for why we should not conflate the state secrets privilege with the Totten doctrine.  The good people over at the American University National Security Law Brief have agreed to publish it, so it should be up with them early next year.

Totten establishes a justiciability rule: people who enter into voluntary secret agreemetns with the government cannot sue to enforce those agreements because doing so would violate the implied terms that the agreements are to be kept secret.  Thus, Totten, estate administrator for a man who alleged that he had entered into a spy contract with President Lincoln (here pictured before he became either a vampire hunter or Daniel Day Lewis) but had not been paid, could not recover on the contract.  That basic principle was subsequently expanded in Tenet v. Doe to bar not just suits on contracts but all suits to enforce secret agreements with the government.

So, I have my issues with Totten, which I think has become overbroad, as I explained here.  But the point of the current article is simple and straightforward:  The state secrets privilege is an evidentiary privilege.  It is neither a contracts doctrine nor a justiciability doctrine.  The conflation of Totten with the SSP has resulted in the unwarranted pre-discovery dismissal of colorable claims alleging tort and constittuional violations by the government and its contractors.

But for those who want to see the draft, you can download it on SSRN here.  This is the abstract:

The state secrets privilege (SSP) has become a major hindrance to litigation that seeks to challenge abuses of executive power in the context of the War on Terror. The Supreme Court first embraced and gave shape to the SSP as an evidentiary privilege in a 1953 case, United States v. Reynolds. Increasingly, the government relies on the SSP to seek pre-discovery dismissal of suits alleging torts and constitutional violations by the government. Lower federal courts have permitted such pre-discovery dismissal because they have confused the SSP with a non-justiciability doctrine derived from an 1875 case, Totten v. United States. The Totten doctrine only applies to claims brought by people who have entered into voluntary relationships with the government, but it is now being invoked when the government seeks dismissal of tort claims through the SSP. While the government should invoke the SSP whenever necessary to prevent disclosure of information that might jeopardize national security, such invocations of the SSP should never result in pre-discovery dismissal.

[JT]

December 20, 2012 in Famous Cases, Recent Scholarship | Permalink | Comments (2) | TrackBack (0)

Wednesday, December 19, 2012

Thoughts on the Instagram Kerfuffle

Stop me if you've heard this one before - Facebook changes its Terms in a way that its users find offensive and invasive of their privacy.  Uproar ensues and Facebook promises that the changes are harmless and everyone is just overreacting.  Facebook backs off, a little, and then pushes the boundaries a little further next time, regaining even more ground against its users.  Sound familiar? 

When Facebook bought Instagram for (approximately) $750 million dollars, we should have known the time was coming when Instagram would piss off its users, too.  Well, that time is here.  Instagram posted changes to its Terms of Use this week which made users concerned that the company could use their content (i.e. photos) in advertisements.  So that lovely picture you took of your sweet grandmother could be used in an ad for Depends. The media was all over it, and you can read about it here, and here, and here

I think the public backlash is a very good thing since it reminds companies that there are at least some people who are reading their online agreements.  Unfortunately, they are usually only reading the terms of companies that already have a monopoly in the marketplace.  It's not easy for unhappy Facebookers, Googlers or Instagramers to pick up their content and go elsewhere - where would they go? 

What makes my skin crawl, however, is the misleading reassurances doled out by companies when they are called on their online agreements.  Instagram, for example, states on its blog that users shouldn't fear, because it respects them, really it does:

"Instagram users own their content and Instagram does not claim any ownership rights over your photos. Nothing about this has changed. We respect that there are creative artists and hobbyists alike that pour their heart into creating beautiful photos, and we respect that your photos are your photos. Period.

I always want you to feel comfortable sharing your photos on Instagram and we will always work hard to foster and respect our community and go out of our way to support its rights."

While it may be true that Instagram users own their content, Instagram does take a pretty broad license from its users:

"Instead, you hereby grant to Instagram a non-exclusive, fully paid and royalty-free, transferable, sub-licensable, worldwide license to use the Content that you post on or through the Service, except that you can control who can view certain of your Content and activities on the Service as described in the Service's Privacy Policy, available here: http://instagram.com/legal/privacy/."

As Instagram knows, it doesn't need to own your content in order to use it as if it owned it.  All it needs is a broad license, like the one it has.  Note that it has the right to "use" the content - and doesn't define what that means or restrict that use very much.

The Privacy Policy states that Instagram may use the information to in the following ways:

  • "provide personalized content and information to you and others, which could include online ads or other forms of marketing
  • provide, improve, test, and monitor the effectiveness of our Service
  • develop and test new products and features
  • monitor metrics such as total number of visitors, traffic, and demographic patterns"

I found this sentence particularly sneaky:

"We will not rent or sell your information to third parties outside Instagram (or the group of companies of which Instagram is a part) without your consent, except as noted in this Policy"

Did you like the "except as noted in this Policy" ?  And, as Contracts profs know, "consent" means something other than what a layperson might think - it can mean just using a website in many cases.  There is similar broad language here:

"We may also share certain information such as cookie data with third-party advertising partners. This information would allow third-party ad networks to, among other things, deliver targeted advertisements that they believe will be of most interest to you." 

I'm not as concerned about the targeted advertisements (which doesn't mean I'm not concerned at all) as I am about the "such as" and "among other things."

And remember, the Terms do expressly state:

"Some or all of the Service may be supported by advertising revenue. To help us deliver interesting paid or sponsored content or promotions, you agree that a business or other entity may pay us to display your username, likeness, photos (along with any associated metadata), and/or actions you take, in connection with paid or sponsored content or promotions, without any compensation to you."

The company reassures its users, on its blog that it is not their "intention" to "sell" user photos.  The company says it is working on language to make that clear.  Let's hope so, but my guess is that they are probably going to use more mealy language like "at the moment" or "sell as a good defined under the UCC," or something that leaves wide open the possibility that it can make money off user photos by selling them to third party advertisers. 

I'd suggest you save Granny some embarrassment and delete that photo now.

[Nancy Kim]

 

December 19, 2012 in Commentary, Current Affairs, Miscellaneous, True Contracts, Web/Tech, Weblogs | Permalink | Comments (0) | TrackBack (0)

New in Print

Kevin E. Pile of BooksMartingayle,  Non-Competition Agreements in Virginia in the Aftermath of Home Paramount Pest Control v. Shaffer. 47 U. Rich. L. Rev. 457 (2012)

Erin O'Hara O'Connor, Kenneth J. Martin and Randall S. Thomas, Customizing Employment Arbitration. 98 Iowa L. Rev. 133 (2012)

Daniel P. O'Gorman,  Promises, Policies, and Principles: The Supreme Court and Contractual Obligation in Labor Relations. 22 Cornell J.L. & Pub. Pol'y 93 (2012)

Nathan B. Oman,  Markets as a Moral Foundation for Contract Law. 98 Iowa L. Rev. 183 (2012) 

Cheryl B. Preston, and Eli McCann, Llewellyn Slept Here: A Short History of Sticky Contracts and Feudalism. 91 Or. L. Rev. 129 (2012)

[JT]

December 19, 2012 in Recent Scholarship | Permalink | TrackBack (0)

Tuesday, December 18, 2012

On Legal Ed Reform, Elephants and 800-Pound Gorillas

Adult_gorilla_costume_mascotJeremy has been writing thoughtfully on these pages about curricular reform.  Those interested in the subject (and/or metaphors about elephants and 800 pound gorillas) may want to read the comment that my extraordinary colleague (and contractsprof) Jack Graves and I submitted to the ABA Task Force ont he Future of Legal Education.  Here's the link.

[Meredith R. Miller]

December 18, 2012 in Commentary, Law Schools | Permalink | Comments (1) | TrackBack (0)

Clickwrap Contract Containing Arbitration and Forum Selection Clauses Upheld in 10th Circuit

10th Cir.At this point, it should come as no surprise that consumers can be held to the terms of agreements they enter into by clicking on a box next the words "I agree" on a computer screen or simply by continuing to use services after being provided with notice of the terms.  But what if the computer screen belongs to a technician who installs your television and voice communications services?  And what if notice of the change in terms to your internet service comes in an e-mail notifying you that you are accepting new terms by continuing to use the service?

In Hancock v. American Telegraph and Telephone Co., Inc., the 10th Circuit held that contracts entered into through such mechanisms are enforceable.  The 10th Circuit affirmed a District Court ruling dismissing all of plaintiffs claims based on forum selection and arbitration clauses.

On appeal, plaintiffs argued they did not knowingly accept AT&T's terms, claiming that the registration process to sign up for AT&T's services was complex and confusing and thus deprived them of an opportunity to give meaningful assent to governing terms.  Plaintiffs also raised factual issues that they thought should have precluded dismissal.  For example, one of the plaintiffs submitted an affidavit claiming that he was never informed of AT&T's terms of service and never agreed to them.  When the "I agree" box is on a technician's computer rather than on the consumer's, how do we know who clicked the box?  In a footnote, the court found immaterial the distinction between clicking a box on a technician's laptop and one on your own. 

As to plaintiffs' arguments about the obscurity of the registration process, their best case was Specht v. Netscape Commc’ns Corp., 306 F.3d 17 (2d Cir. 2002), in which the court struck down terms that were hidden because the consumer would have had to scroll down a screen in order to find them.   But the Tenth Circuit distinguished this case from Specht and found that AT&T's terms were not hidden.  In order to register for AT&T's internet services, consumers must first acknowledge that they have read and agreed to AT&T's terms, and a technician may not install television and voice services until the consumer has acknowledged receipt of AT&T's terms.

Based on declarations providing information of AT&T's standard practices, the Tenth Circuit found that the District Court had not erred in resolving factual disputes in AT&T's favor.  

[JT]

December 18, 2012 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Weekly Top Tens from the Social Science Research Council

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

October 19, 2012 to December 18, 2012

RankDownloadsPaper Title
1 328 The Cross-Border Freedom of Form Principle Under Reservation: The Role of Articles 12 and 96 CISG in Theory and Practice 
Ulrich G. Schroeter
University of Mannheim - Faculty of Law
2 304 Libertarianism, Law and Economics, and the Common Law 
Todd J. Zywicki
George Mason University - School of Law, Faculty
3 213 Losing the Paper – Mortgage Assignments, Note Transfers and Consumer Protection 
Alan M. White
City University of New York (CUNY) - School of Law
4 174 CISG and CESL 
Ulrich Magnus
c/o Max Planck Institute for Comparative and International Private Law
5 124 Lewellyn Slept Here: A Short History of Sticky Contracts and Feudalism 
Cheryl B. PrestonEli McCann
Brigham Young University - J. Reuben Clark Law School, Unaffiliated Authors - affiliation not provided to SSRN
6 101 Commercial Sales: The Common European Sales Law Compared to the Vienna Sales Convention 
Marco LoosHarriët Schelhaas
University of Amsterdam - Centre for the Study of European Contract Law (CSECL), Unaffiliated Authors - affiliation not provided to SSRN
7 101 The Historical Origins of America's Mortgage Laws 
Andra C. Ghent
Arizona State University (ASU) - Finance Department
8 93 Sovereign Immunity and Sovereign Debt 
Mark C. Weidemaier
University of North Carolina (UNC) at Chapel Hill - School of Law
9 91 An EU Law for Cross-Border Sales Only – Its Meaning and Implications in Open Markets 
Jürgen Basedow
Max Planck Institute for Comparative and International Private Law
10 86 Contracting About Private Benefits of Control 
Ronald J. GilsonAlan Schwartz
Stanford Law School, Yale Law School

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

October 19, 2012 to December 18, 2012

RankDownloadsPaper Title
1 328 The Cross-Border Freedom of Form Principle Under Reservation: The Role of Articles 12 and 96 CISG in Theory and Practice 
Ulrich G. Schroeter
University of Mannheim - Faculty of Law
2 213 Losing the Paper – Mortgage Assignments, Note Transfers and Consumer Protection 
Alan M. White
City University of New York (CUNY) - School of Law
3 174 CISG and CESL 
Ulrich Magnus
c/o Max Planck Institute for Comparative and International Private Law
4 124 Lewellyn Slept Here: A Short History of Sticky Contracts and Feudalism 
Cheryl B. PrestonEli McCann
Brigham Young University - J. Reuben Clark Law School, Unaffiliated Authors - affiliation not provided to SSRN
5 101 Commercial Sales: The Common European Sales Law Compared to the Vienna Sales Convention 
Marco LoosHarriët Schelhaas
University of Amsterdam - Centre for the Study of European Contract Law (CSECL), Unaffiliated Authors - affiliation not provided to SSRN
6 91 An EU Law for Cross-Border Sales Only – Its Meaning and Implications in Open Markets 
Jürgen Basedow
Max Planck Institute for Comparative and International Private Law
7 85 A People's History of Collective Action Clauses 
Mark C. WeidemaierG. Mitu Gulati
University of North Carolina (UNC) at Chapel Hill - School of Law, Duke University - School of Law
8 76 Contract Theory and the Failures of Public-Private Contracting 
Wendy Netter EpsteinWendy Netter Epstein
Illinois Institute of Technology - Chicago-Kent College of Law, Kirkland & Ellis
9 74 In Defense of Commercial Capitalism: Lessius, Partnerships and the Contractus Trinus 
Wim Decock
Max-Planck-Institute for European Legal History
10 58 Set in Stone? Change and Innovation in Consumer Standard Form Contracts 
Florencia Marotta-WurglerRobert Brendan Taylor
New York University (NYU) - School of Law, Kirkland & Ellis

[JT]

December 18, 2012 in Recent Scholarship | Permalink | TrackBack (0)

Monday, December 17, 2012

World's #1 Golfer Sued for Breach of Endorsement Contract

Rory_McIlroyHaving jumped the shark last week with posts about curricular reform, we have decided to stick with what we know: sports contracts. 

As reported here in the Telegraph, Rory McIlroy (pictured), this year's world #1 golfer, is not Tiger Woods.  In addition, it appears that Mr. McIlroy has been endorsing Oakley sportswar until recently and now wants to jump ship and join team Nike.  Oakley is claiming a right of first refusal and claims that it offered to match Nike's offer to Mr. McIlroy.  He apparently spurned that offer and so is, according to Oakley, in breach of contract.

Oakley is claiming that it is irreparably harmed by the breach and seeks to enjoin Mr. McIlroy from enjoying the benefits of his $200 million Nike agreement.  In the alternative, Oakley is seeking unspecified damages.

Reading between the lines, there do appear to be issues that are of some interest.  Usually a right of first refusal requires the holder of the right to match the competing offer.  But ESPN.com suggests that Oakley was only offering McIlroy $60 million to continue endorsing its products.  Perhaps that amount is equal to the portion of McIlroy's Nike deal that relates to Nike apparel.  In addition, ESPN reports on an e-mail sent by Oakley to McIlroy's agent back in September when contract negotiations were breaking down.  The e-mail read,  "Understood. We are out of the mix. No contract for 2013."

McIlroy will argue that the e-mail suggests that Oakley waived its option to renew its agreement with McIlroy.  Oakley contends that, notwithstanding the September e-mail, negotiations resumed and Oakley claims to have matched Nike's offer.

So, there will be unwonted excitement on the golf tour next year as viewers tune in to see what McIlroy is wearing.

[JT]

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

Friday, December 14, 2012

Thoughts on Curricular Reform VI: Preparing the Academically Adrift for Practice

Liberal artsThe title of this post references Richard Arum and Josipa Roksa's influential 2011 book, Academically Adrift: Limited Learning on College Campuses.  For the sake of argument, let's assume that this book accurately reflects the state of higher education.  That is, let us assume the following:

  • Undergraduates attending U.S. colleges and universities report that learning is not their top priority;
  • Students make alarmingly little academic progress, especially in terms of critical thinking, complex reasoning and writing, during their four years of undergraduate education;
  • The gap between students who get a lot out of their undergraduate educations and those who get little is at least persistent and perhaps growing;

In addition, let us adopt the hypothesis that our students are not adults, but emerging adults.  That is, let us assume that our students are not fully formed, cognitively or emotionally.  They are beginning to accept the responsibiltiies of adulthood, but they are not really there yet.  

SydneyIf all of these things are true, what is an appropriate curriculum for 21st-century law students?  

For those of you who have been following this series of posts, the answer might not be surprising.  Students are not learning the skills that a liberal arts education used to provide.  One way to make certain that they develop those skills is by providing a liberal arts education in law school.  It would not be a traditional liberal arts education but a liberal arts education designed to meet the needs of twenty-somethings rather than teens, and clearly oriented towards arriving at practical, professional goals.  As I suggested before, for most law schools, the model should be small, cloistered liberal arts education, at least in the first year, rather than the research university model.  In some ways, designing this curriculum is easy and a lot of fun, because we already know what our students want to do career-wise.  We don't have to design a one-size, fits-all curriculum that would be appropriate for both English majors and engineers and everything in between.  Whether our law students are English majors or engineers, they still need the same package of professional skills necessary for the legal profession.

While tuition pressures and student impatience and immaturity are pushing reform towards a shorter law school curriculum, our students really need a longer and more intense learning experience in law school.  Most but not all law schools would benefit from a first year designed to get students' critical thinking, complex reasoning and writing skills to the level that, twenty years ago, was presumptively already achieved after college.  That means they need to take a lot of small, writing-intensive courses while also learning professional skills and training for an ethically challenging, client-centered practice.  

DaumierFinding a way to deliver such an education without greatly increasing our students' debt-load is of course the great challenge.  One option would be to create a hybrid model in which the first two years of legal education focus on the sort of liberal arts cognitive and ethical skills development that I discussed above, combined with the sort of integrated doctrinal education that has been subject of previous posts.  The second two years (yes, the second two years) should be underwritten by prospective employers who work collaboratively with law schools to develop a curriculum that is part apprenticeship, part law clinic and part bar preparation.  So, while law school now takes four years, students only pay for two of them, with the firms or businesses covering remaining tuition costs in lieu of salaries for their apprentices.  In principle, all four years of such a legal education could be rewarding and challenging for the students, and they would emerge far better prepared for practice that they are under the current system.

This is just one idea for addressing our students' needs, if in fact the assumptions that inform this design are accurate.  I am agnostic on the question of whether undergraduates really are academically adrift and are emerging rather than fully matured adults.  Like everyone in the academy, I have my own views, but I admit that they are anecdotal and unscientific.  I have chosen these assumptions because they seem to be informing a lot of the ideas for change that are driving the movement for curricular reform at law schools today.  But I think there is a disconnect between the problem and the solution.  

Law schools are playing a game of "Can You Top This?" by touting their clinical and skills training programs, because that seems to be what the students and the market are demanding.  But if students lack basic cognitive skills, as well as maturity, what is the rush to get them into practice?  We all need to slow down.  If the assumptions listed above are informing calls for change, we need to wait for our students to become adults before we force them to deal with adult problems.  We can't expect them to magically develop critical thinking, complex reasoning and writing skills by simply throwing them into practice.  We also should not give up on their cognitive development because, if the emerging adulthood literature is right, our students are still capable of intellectual growth of a kind that our adult brains cannot match.

Vance SusanStuart06As educators, our main concern is providing our students with the training they need so that they can succeed in the profession of their choosing.  But as legal educators, we also have to consider the needs of our students' future clients.  The fact that our students want to serve clients as soon as possible is not a sufficient reason to let them do so before they are ready both in terms of their cognitive development and their maturity.  

I should add that my thoughts in this area have been influenced by the work of two of my colleagues, Susan Stuart (right) and Ruth Vance (left), who are engaged in a scholarly project devoted to working out the long-term consequences for legal education of the latest research into the preparedness and cognitive development of the current generation of law students.  My thoughts here only scratch the surface of the subject matter.  And those interested in the topic should look for Ruth and Susan's work, which we all hope will be coming to a law journal near you in the near future.

[JT]

December 14, 2012 in Commentary, Law Schools, Teaching | Permalink | Comments (2) | TrackBack (0)

Thursday, December 13, 2012

Thoughts on Curricular Reform V: A Coordinated Curriculum and Academic Freedom

PilloryAs I have mentioned in previous posts. one way to make it possible to integrate real, concentrated skills training across the curriculum without hiring a score of new legal writing and skills training instructors is to have doctrinal faculty and legal writing and skills training faculty work with doctrinal faculty to build a coordinated curriculum.  I think a consequence of this decision would have to be the eventual development of custom-made teaching materials and the rejection of traditional, subject-based casebooks.  My own experience in putting together my own materials for many of the courses I teach is that one can save the students 70-80% of the costs associated with buying course materials by simply putting together materials using legal materials in the pubic domain and exercises of one's own design.

This is a difficult task, and as the third post in this series suggested, part of the costs of such change would be those of re-training a faculty hired to teach a traditional curriculum so that they could become effective teachers of an integrated curriculum.  But there is another potential problem.  What of academic freedom?  What if the faculty members don't want to change?

One option would be the whipping post and the pillory (pictured).

According to the AAUP Statement of Principles on Academic Freedom, instructors are "entitled to freedom in the classroom in discussing their subject, but they should be careful not to introduce into their teaching controversial matter which has no relation to their subject."  Read broadly, as I believe it should be, this means that an instructors' determination about how best to deliver her material to her students need not bow to an institutional curriculum with which she does not agree.  The reason for this braod construction of academic freedom is that, if tenured faculty could be disciplined or terminated for not teaching in a certain way, their perceived departure from institutional pedagogical norms could become the purported grounds for a termination that is in fact motivated by other, impermissible considerations, such as political views, dogged opposition to the law school or university administration, age, race, sexual preference, etc.  A new curriculum cannot become the means by which the law school rids itself of inconvenient colleagues.

Ideally, with adequate faculty vetting, discussion, participation and buy-in, the transition from a traditional curriculum to an integrated curriculum could go smoothly.  In many institutions that attempt to transformation, however, the transition to a new curriculum will likely have to take place slowly, perhaps piece-meal.  If only the torts professors are willing to coordinate with the legal writing and skills training programs, then only that part of the curriculum will be coordinated.  If the program is clearly a success and the students clamor for greater integration, then perhaps the more recalcitrant professors can slowly be won over.  

[JT]

December 13, 2012 in Commentary, Teaching | Permalink | Comments (1) | TrackBack (0)

Wednesday, December 12, 2012

Thoughts on Curricular Reform IV: The Place of Scholarship in the 21st Century Legal Academy

TamanahabI am going to invoke a name that heightens the blood pressure of many legal academics.

Brian Tamanaha (pictured).  

I admit that I have not read Professor Tamanaha's book cover-to-cover, but I've read a number of his blog posts and a lot of commentary about his book, so I think I have a fairly good handle on his main points and without endorsing the book in its entirety, I think that much of what he says in Failing Law Schools is relevant to on-going discussions on curricular reform.  That is, I agree with Tamanaha's argument (as I understand it) to the extent that he faults law schools for modeling themsevles on research universities in which faculty members are rewarded for high-profile, cutting-edge research with reduced administrative responsibilities and lighter teaching loads.

But, as I argued in a previous post, the solution is not to turn the clock back to a pre-Langdellian era in which law schools were simply glorified apprenticeships, and instructors were practitioners who taught part-time.  Instead, some law schools should models themselves not on great research universities but on great liberal arts colleges.  The professors at great liberal arts colleges engage in scholarly research, often at a very high level, but their primary allegience is to their own community.  

When I was a doctoral student, I was befriended by an emeritus professor who had taught at that institution for nearly seventy years.  He was a historian of international reknown in his field.  He had also chaired the department, been actively engaged in university administration and was the first chair of the Ivy League athletic eligibility committee. In addition, he had served for thirty-two years as the Mayor of the small town abutting the university.  

When I came to know him, he was at work on a history of the university.  He told me that the most important change that he had experienced during his career, which spanned most of the 20th century, was that the department had changed from one in which what mattered most was the esteem in which one was held by one's colleagues and students to one in which what mattered most was the esteem in which one was held by professors at other universities.  The change saddened him.  It diminished the place's sense of itself as a community defined by a spirit of collegiality and common purpose. 

I would like to see some law schools abandon the hope of being imitatio Harvards in favor of becoming imitatio Haverfords (or Oberlins or Grinnells, etc.).  Moreover, such a change is what our students need.  Increasingly, our students come to us without the benefit of a traditional liberal arts education that prepares them for the challenges of legal practice.  Legal education needs to provide that grounding in basic reasoning, professional development, and writing skills before we throw them into the world of practice.

Unfortunately, it is not what our students want, or at least I don't think it is what they want.  Like a lot of law professors, I introduce a lot of theoretical and interdisciplinary perspectives into my courses.  This time of year, when students finally avail themselves of my office hours, they often ask whether "any of that theory that we talked about in class" will be covered on the exam.  They clearly hope that the answer will be no, and when the answer is yes, I can almost see them doing the mental calculation to try to deremine how well they will have to do on the rest of the exam to make up for their complete inability or unwillingness to wrestle with what seems terribly impractical to them.  They shouldn't worry, since I grade on a curve and they are mostly in the same boat.  

Many law students come from unsatisfying experiences in the world of work.  It is completely understandable if their attitude is, "Look, I got a college degree, and it didn't qualify me to have a career.  I came to law school to learn practical skills, not to waste more tuition dollars on 'academics.'"

It is understandable that they think that, but in many cases, students were not able to find satisfying work before law school because they lack the cognitive abilities, reasoning and writing skills that they would need to succeed.  And they won't succeed after law school without those abiliites skills either.

And so, I still believe that law professors need to be teacher/scholars, actively engaged in scholarship and in the lives of their communities and in their students' intellectual development.  As for scholarship itself, Brian Leiter was here a few weeks ago to deliver our annual Seegers Lecture on Jurisprudence.  In response to a question about the value of scholarship, he said something very close to my view.  Most of what gets published is a dead end.  But a certain percentage of it is very valuable, and there is no way of telling ex ante which scholarship is going to move the ball in a meaningful way.  That's why we need lots of people doing their best to move the ball and why we need to continue to support faculty scholarship. 

In addition, as I have noted in a different context, I think our students need to be part of the academic enterprise.  The very best training I received in my law school happened at my journal, when I first engaged in meaningful research, not of my own choosing, with something (albeit just the sources for claims made in law review articles) at stake.

[JT]

 

December 12, 2012 in Commentary, Teaching | Permalink | Comments (4) | TrackBack (0)

New in Print

Pile of BooksGeorge S. Geis, Broadcast Contracting, 106 Nw. U. L. Rev. 1153 (2012)

Daniel M. Hausermann, The Case Against Statutory Menus in Corporate Law, 9 Hastings Bus. L.J. 45 (2012)

Darren A. Prum and Lorilee A. Medders, The Bonds That Tie: Will a Performance Bond Require That a Surety Deliver a Certified Green Building? 9 Hastings Bus. L.J. 1 (2012) 

Charles M. Thatcher, Specific Performance as a Seller Remedy for Buyer's Breach of a Sales Contract--The Availability of Judicial Purchase Orders. 57 S.D. L. Rev. 218 (2012)

[JT]

December 12, 2012 in Recent Scholarship | Permalink | TrackBack (0)

Tuesday, December 11, 2012

SCOTUS Grants Cert. on Another Arbitration Case

SCOTUSLast week, the Supreme Court granted review of Oxford Health Plans LLC v. Sutter. The issue, according to SCOTUSblog is:

Whether an arbitrator acts within his powers under the Federal Arbitration Act (as the Second and Third Circuits have held) or exceeds those powers (as the Fifth Circuit has held) by determining that parties affirmatively “agreed to authorize class arbitration,” Stolt-Nielsen S.A. v. Animalfeeds Int'l Corp., based solely on their use of broad contractual language precluding litigation and requiring arbitration of any dispute arising under their contract

The agreement at issue, which was drafted by Oxford, in the case makes no reference to the availability of class arbitration.  The arbitrator issued an award authorizing class arbitration.  Oxford challenged that award, relying on Stolt-Nielsen, about which we have previously posted here and here.  Both the District Court and the Third Circuit affirmed the arbitral award.

For comprehensive treatment and links to the relevant documents, check out the ever-reliable SCOTUSblog.

[JT]

December 11, 2012 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Thoughts On Curricular Reform III: The Costs of Change

Case filesSome of my colleagues think that the costs of change pale in comparaison to the costs of carrying on as if nothing has changed in the legal profession.  "Change or die," or something like that, is the slogan.  If those are my only options, then change it is!

Actually, even if our backs are not exactly up against the wall, it is certainly healthy for law schools to think in a fundamental way about what it is we are doing.  Are we serving our students well?  Are we serving the legal profession well?  Are we serving the consumers of legal services well?  Where does legal scholarship fit in with the overall mission of legal education?  It is possible to get intp a professional groove that can then develop into a rut.  In the process, one can lose sight of these questions.

That said, carrying out the sorts of reforms that the Carnegie Report has called for in the current economic climate raises certain challenges.  Reformers almost universally call for more of an emphasis on practical skills training in law schools and for a reduction in the costs of legal education.  It is hard to imagine how to do both simultaneously.  Skills training is simply more expensive than doctrinal teaching.  It is hard to do legal writing courses well when the class size exceeds 25, and really class sizes around 15 are optimal.  Few law schools have the resources to achieve that sort of faculty/student ratio in all legal writing courses.  Law clinics should have no more than ten students per faculty member.  

One could cut the costs of law schools by relying more on adjuncts or even on lawyers who might volunteer to oversee extended externships and apprenticeship programs.  One could rely more on online education.  But these solutions might impose unacceptable costs in terms of the quality of legal education.  In order for legal education to progress, we should develop a post-Langdellian model, rather than revert to pedagogical practices abandoned with good reason at the turn of the 20th century.

The other cost of change has to do with use of faculty resources to best advantage.  A law school that hired faculty members based on one model of legal education must consider the serious challenges the school must overcome in order to use the same faculty to deliver a completely different currciulum.  It may be necessary to re-train the faculty to teach a different way, but training might not help if the faculty members do not entirely buy in to the need for fundamental change.  

At our law school, we are exploring teaching skills across the curriculum as a way to introduce skills training into doctrinal courses without have to hire twenty new faculty members.  In a previous post, I suggested that this might require us to jettison existing course materials, because the approach entails coordination of instruction across courses.  Lawyering exercises are to be designed that will relate to what is being taught in multiple doctrinal courses, and instructors in those courses will be involved in simulations, problems, and other forms of assesment.  The burdens of actually doing the assessment, actually giving feedback to students, would presumably be more evenly distributed that they currently are, among doctrinal and skills instructors.

As the comments on the last post in this series suggested, there are already casebooks designed to address the recommendations of the Carnegie Report.  But if the aim is not only the integration of skills and ethical lawyering training into doctrinal courses but also the coordination of doctinal courses with a lawyering program, existing course materials may not be up to the task, because existing course materials are still designed with traditional doctrinal divisions (contracts, civil procedure, torts, property, criminal law, etc.) in mind and may not integrate (for example) exercises in contracts and civil procedure or torts and property.   And if the aim is to structure the learning environment in a way that makes sense across the curriculum, that is hard to do in the traditional law school environment in which each faculty members develops her course in splendid isolation.

[JT]

December 11, 2012 in Commentary, Teaching | Permalink | Comments (0) | TrackBack (0)

Weekly Top Tens from the Social Science Research Council

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

October 11, 2012 to December 10, 2012

RankDownloadsPaper Title
1 304 The Cross-Border Freedom of Form Principle Under Reservation: The Role of Articles 12 and 96 CISG in Theory and Practice 
Ulrich G. Schroeter
University of Mannheim - Faculty of Law
2 268 Libertarianism, Law and Economics, and the Common Law 
Todd J. Zywicki
George Mason University - School of Law, Faculty
3 201 Losing the Paper – Mortgage Assignments, Note Transfers and Consumer Protection 
Alan M. White
City University of New York (CUNY) - School of Law
4 161 CISG and CESL 
Ulrich Magnus
c/o Max Planck Institute for Comparative and International Private Law
5 122 Lewellyn Slept Here: A Short History of Sticky Contracts and Feudalism 
Cheryl B. PrestonEli McCann
Brigham Young University - J. Reuben Clark Law School, Unaffiliated Authors - affiliation not provided to SSRN
6 95 Commercial Sales: The Common European Sales Law Compared to the Vienna Sales Convention 
Marco LoosHarriët Schelhaas
University of Amsterdam - Centre for the Study of European Contract Law (CSECL), Unaffiliated Authors - affiliation not provided to SSRN
7 95 The Historical Origins of America's Mortgage Laws 
Andra C. Ghent
Arizona State University (ASU) - Finance Department
8 88 An EU Law for Cross-Border Sales Only – Its Meaning and Implications in Open Markets 
Jürgen Basedow
Max Planck Institute for Comparative and International Private Law
9 84 Markets as a Moral Foundation for Contract Law 
Nathan B. Oman
William & Mary Law School
10 78 A People's History of Collective Action Clauses 
Mark C. WeidemaierG. Mitu Gulati
University of North Carolina (UNC) at Chapel Hill - School of Law, Duke University - School of Law

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

October 11, 2012 to December 10, 2012

RankDownloadsPaper Title
1 304 The Cross-Border Freedom of Form Principle Under Reservation: The Role of Articles 12 and 96 CISG in Theory and Practice 
Ulrich G. Schroeter
University of Mannheim - Faculty of Law
2 201 Losing the Paper – Mortgage Assignments, Note Transfers and Consumer Protection 
Alan M. White
City University of New York (CUNY) - School of Law
3 161 CISG and CESL 
Ulrich Magnus
c/o Max Planck Institute for Comparative and International Private Law
4 122 Lewellyn Slept Here: A Short History of Sticky Contracts and Feudalism 
Cheryl B. PrestonEli McCann
Brigham Young University - J. Reuben Clark Law School, Unaffiliated Authors - affiliation not provided to SSRN
5 95 Commercial Sales: The Common European Sales Law Compared to the Vienna Sales Convention 
Marco LoosHarriët Schelhaas
University of Amsterdam - Centre for the Study of European Contract Law (CSECL), Unaffiliated Authors - affiliation not provided to SSRN
6 88 An EU Law for Cross-Border Sales Only – Its Meaning and Implications in Open Markets 
Jürgen Basedow
Max Planck Institute for Comparative and International Private Law
7 84 Markets as a Moral Foundation for Contract Law 
Nathan B. Oman
William & Mary Law School
8 78 A People's History of Collective Action Clauses 
Mark C. WeidemaierG. Mitu Gulati
University of North Carolina (UNC) at Chapel Hill - School of Law, Duke University - School of Law
9 74 Contract Theory and the Failures of Public-Private Contracting 
Wendy Netter EpsteinWendy Netter Epstein
Illinois Institute of Technology - Chicago-Kent College of Law, Kirkland & Ellis,
10 72 In Defense of Commercial Capitalism: Lessius, Partnerships and the Contractus Trinus 
Wim Decock
Max-Planck-Institute for European Legal History

 

[JT]

December 11, 2012 in Recent Scholarship | Permalink | TrackBack (0)

Monday, December 10, 2012

Larry Cunningham on Nitro-Lift

CunninghamA few weeks ago, we noted the Supreme Court's decision in Nitro-Lift Technologies L.L.C. v. Howard.

Over on Concurring Opinions, Larry Cunningham has a far stronger response to the decision, noting especially that there were no dissents from the Supreme Court's per curam decision.  He calls for Congress to sort out the robes:

In numerous past SCOTUS cases, dissenting opinions were routinely filed exposing the flaws in the Court’s jurisprudence. The recent per curium opinion may signal capitulation, indicating that there are no longer any Justices prepared to object to these mistakes. That defeat means it is clearly time for Congress to rein the Court in. It should make it clear that state courts are responsible for developing and applying state contract law, not SCOTUS, federal courts or private arbitrators.

There is a lively comment section following Larry's post.

[JT]

December 10, 2012 in Commentary, Recent Cases, Weblogs | Permalink | Comments (0) | TrackBack (0)