ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Friday, July 13, 2012

Variation On a Law Prof Favorite: No Motorized Vehicles in the Park

An irresistible law prof favorite: a statute prohibits vehicles in the park.  Can you bring in a bicycle?  A stroller?  Or, as I remember one of my own law profs asking, a wheel chair?  Of course, the exercise was all about interpretation.  We never mentioned the Americans with Disabilities Act (ADA).  Here's a variation on the theme: disabled vets sue New York State Department of Environmental Conservation under ADA because the statute that does not allow "motorized vehicles" in Adirondack Park, preventing them from accessing a number of scenic lakes.  

[Meredith R. Miller]

July 13, 2012 in Recent Cases, Teaching | Permalink | Comments (0) | TrackBack (0)

Thursday, July 12, 2012

As if being a big firm ex-partner weren't bad enough...

The Wall Street Journal reported that as part of a settlement with creditors, former partners of belly-up Dewey & LeBoeuf law firm will be asked to give back amounts ranging from $25,000 to $3,000,000.  This "clawback" offer doesn't seem to be an offer yet - the creditors haven't signed off on it. Maybe a better way to look at it is as an offer by the firm to the ex-partners which, if accepted, would be offered to creditors.  Would it be a conditional offer?  Or maybe two separate offers (firm to ex-partners and then firm to creditors?)  Maybe a contract/release signed by all three groups?  (most likely scenario, but I'll stop obsessing over the contract formation issues now....) The article reports that those ex-partners who fail to sign on to the plan "could end up on the hook for millions of dollars of Dewey's debt."  That's a lot of billable hours.

[Nancy Kim]

July 12, 2012 | Permalink | TrackBack (0)

Suit over USA Network's "Royal Pains"

Forest Park Pictures alleges that it created what the industry calls a "series treatment" for a television show called “Housecall,” featuring a doctor who, after being expelled from the medical community for treating patients who could not pay, moved to Malibu, California, and became a “concierge” doctor to the rich and famous.  Forest Park presenting this material to USA Network (“USA”) both in writing and in a face-to-face "pitch." Below is the opening scene of Robert Altman's "The Player" illustrating what a pitch is like:


Forest Park alleges an implied agreement by USA to pay reasonable compensation if its ideas were used.  Although Forest Park and USA exchanged further communications, discussions ultimately fell off with no formal agreement to produce the show. 

About four years later, USA produced and aired “Royal Pains,” a television show suspciously simlar to "Housecall."  Forest Park then sued USA for breach of the implied agreement.   The district court granted USA’s motion to dismiss on grounds that the Copyright Act preempted the claim and that the contract was too vague to be enforced.  On appeal, the Second Circuit Court of Appeals vacated and remanded.

Section 301 of the Copyright Act expressly preempts a state law claim only if (1)” the work at issue comes within the subject matter of copyright and (2) the right asserted is equivalent to any of the exclusive rights within the general scope of copyright.” However, if the state law claim includes an  element that supplants or supplements the elements of a copyright infringement claim, there is no preemption.  In this case, the Second Circuit found that Forest Park's claim was not preempted because it alleged that USA had promised to pay Forest Park  for the use of its ideas, an element that made its claim "qualitatively different from a suit to vindicate a right included inthe Copyright Act."  In addition, a copyright grants the owner exclusive rights against the world, whereas a breach of contract claim provides no exclusive rights and asserts rights only against the contractual counterparty. 

The Second Circuit then moved on to consider whether Forest Park had alleged a breach of an implied-in-fact contract.  California has long recognized that an implied-in-fact contract may be created where the plaintiff submits an idea that the defendant subsequently uses without compensating the plaintiff.  Although USA argued that even if the parties were part of an implied-in-fact agreement, the agreement could not be enforced because it lacked a definite price term.  However, California courts allow the enforcement of contracts that lack exact price terms as long as the parties’ intentions can be ascertained.  Taking into account the industry custom of pitching an idea for payment, the court remanded back to the District Court, giving Forest Park a chance to prove that such an industry standard price exists and that both parties agreed to it.

We learn from Wikipedia that "Royal Pains" was renewed for its fourth season last September.

[JT and Chirstina Phillips]

July 12, 2012 in Recent Cases, Television | Permalink | Comments (0) | TrackBack (0)

Tuesday, July 10, 2012

Posted to SSRN: Party Sophistication and Value Pluralism in Contract

What good is a contributing blog editorship if I can't use it for a little bit of self-promotion?  

I've posted a draft of "Party Sophistication and Value Pluralism in Contract" to SSRN.  For those of you in attendance at the annual contract law fiesta in San Diego (Thomas Jefferson) back in March, this is the paper that formed the basis of my talk (or, that was the talk that formed the basis of this paper).  Here's the abstract:

In a previous article, Contract Law, Party Sophistication and the New Formalism, 75 Missouri L. Rev. 493 (2010), I documented a trend in United States case law and scholarship that fashions a dichotomy between sophisticated and unsophisticated parties. That article set out to explain the trend as a theoretical compromise between formalism and realism in the face of a renewed formalism. 

However, as I noted in the previous article, the “new formalism” may not be formalism at all because it retains normative concerns. Indeed, the shift in legal thought may be more appropriately and simply characterized as embracing pluralism. This piece will place observations about party sophistication within recent scholarship discussing pluralist conceptions of contract doctrine and suggest that the focus on sophistication is a means to order contract law’s competing values (e.g., autonomy, efficiency, fairness and equality, certainty and predictability).

With reference to my previous writing on the subject, Section I of this Article addresses the increasing significance of party sophistication. The next section summarizes the argument that party sophistication preserves fairness norms in the face of a resurgence of formalism. Section III provides a brief overview of existing pluralist contracts scholarship. The Article then presents its central claim: the attention to the sophistication of contracting parties fits neatly within a theoretical shift toward pluralism and provides a way to strive for coherence and yet still order the competing values of contract law. 

After addressing some case examples in Section IV, this Article concludes that, once the status-based label of “sophisticated” or “unsophisticated” is applied, the law can prioritize values. For sophisticated parties, the supervalues are autonomy and individual liberty, which leads to a rules-driven and a-contextual approach that lends itself to efficiency, predictability and certainty. For unsophisticated parties, the supervalue is a normative one of reasonableness and fairness; it is guided by a contextual and standards-based approach. This allows for a general and comprehensive body of contract law that is both principled and pragmatic, a difficult task given the wide variety of parties and transaction types that contract law serves.

Not shifting any paradigms but definitely fun to write.  I welcome any feedback.

[Meredith R. Miller]


July 10, 2012 in Recent Scholarship | Permalink | TrackBack (0)

Weekly Top Tens from the Social Science Research Network

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

May 11, 2012 to July 10, 2012

RankDownloadsPaper Title
1 202 Reforming the Short-Term Funding Markets 
Morgan Ricks
Harvard University Law School
2 187 Party Choice and the Common European Sales Law, or: How to Prevent the CESL from Becoming a Lemon on the Law Market 
Jan M. Smits
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI)
3 180 The Irony of Privacy Class Action Litigation 
Eric Goldman
Santa Clara University - School of Law,
4 177 The Antitrust/Consumer Protection Paradox: Two Policies at War with Each Other 
Joshua D. Wright
George Mason University - School of Law, Faculty
5 173 The Litigation Finance Contract 
Maya Steinitz
University of Iowa - College of Law
6 162 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
7 157 A Minor Problem with Arbitration: A Proposal for Arbitration Agreements Contained in Employment Contracts of Minors 
Matthew Miller-NovakRichard A. Bales
Unaffiliated Authors - affiliation not provided to SSRN, Northern Kentucky University - Salmon P. Chase College of Law
8 140 Regulatory Techniques in Consumer Protection: A Critique of European Consumer Contract Law 
Oren Bar-GillOmri Ben-Shahar
New York University (NYU) - School of Law, University of Chicago Law School
9 107 Exchanging Information Without Intellectual Property 
Michael J. Burstein
Yeshiva University - Benjamin N. Cardozo School of Law
10 80 Mandatory Arbitration of Internal Trust Disputes: Improving Arbitrability and Enforceability Through Proper Procedural Choices 
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)  

May 11, 2012 to July 10, 2012

RankDownloadsPaper Title
1 162 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 90 A Tea Party at the Hague? 
Stephen B. Burbank
University of Pennsylvania Law School
3 80 Mandatory Arbitration of Internal Trust Disputes: Improving Arbitrability and Enforceability Through Proper Procedural Choices 
S.I. Strong
University of Missouri School of Law
4 78 Law and the Stable Self 
Rebecca E. Hollander-Blumoff
Washington University in Saint Louis - School of Law
5 68 Letting Go of Binary Thinking and Too-Big-To-Fail: Preserving a Continuum Approach to Systemic Risk 
Cheryl D. Block
Washington University in Saint Louis - School of Law
6 32 Remedies for Breach of Contract 
Gaurang Jajodia
Unaffiliated Authors - affiliation not provided to SSRN
7 31 'Do-Not-Track' as Contract 
Joshua Fairfield
Washington and Lee University - School of Law, 
Date posted to database: May 22, 2012 
Last Revised: May 22, 2012
8 31 AT&T Mobility v. Concepcion and the Antidiscrimination Theory of Federal Arbitration Act Preemption 
Hiro N. Aragaki
Loyola Law School (Los Angeles)
9 31 N Problems Require N Instruments 
Gerrit De Geest
Washington University in Saint Louis - School of Law
10 30 DCAA — Is Anyone Home? 
Richard C. Loeb
University of Baltimore - School of Law



July 10, 2012 in Recent Scholarship | Permalink | TrackBack (0)

Monday, July 9, 2012

Life Guard Fired for Tending to Drowning Swimmer

Lifeguard (from Wikimedia Commons)
As the New York Times reported on Friday, Hallandale Beach made the unusual decision in 2003 to hire a private company to run its lifeguard operation.  That company assigns four lifegaurds to patrol an length the size of two football fields.  A company rule provides that if any of the lifeguards leaves his assigned area, he must first notify a supervisor so that his area is covered.  This protects the company from liability.

But Tomas Lopez noticed a struggling swimmer, he raced to help him, leaving his area without notifying his supervisor.  Two other swimmers had brought the drowning man back to shore, but Mr. Lopez helped carry him to the beach and tended to him until the paramedics arrived.  He filled out his report and was fired, but Mr. Lopez had no regrets.  He had not forgotten the rule; he had chosen to disregard it.  Three of his colleagues quit in solidarity; two more were fired for saying they would have done what Mr. Lopez did.  Mr. Lopez's employer then offered him his job back, but Mr. Lopez declined.

This leads us to wonder (as we have wondered before) how outsourcing saves governments money.  Why is it cheaper to hire a company, that one presumes is trying to make a profit, to operate your lifeguard operation than it is to run that operation yourself?  Private companies can be a lot more efficient than government entities in certain ways, but as the focus on liability here suggests, they also have exposures that governments don't and, as this case illustrates, there could be instances in which a private company might do the public safety/economic efficiency analysis differently from how a government, which would likely be insulated from suit by various immunity doctrines, would do it.  


July 9, 2012 in Commentary, In the News | Permalink | Comments (1) | TrackBack (0)