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Tuesday, May 28, 2013

Boilerplate Symposium Part XIV: Peter Linzer, That Was No Contract: That Was My Lunch

This is the fourteenth in a series of posts reviewing Margaret Jane Radin's Boilerplate: The Fine Print, Vanishing Rights and the Rule of Law.

LinzerPeter Linzer is a Professor of Law at the University of Houston Law Center.

Peggy Radin’s book, Boilerplate has got lots of people talking – and blogging, particularly about her argument that boilerplate contracts aren’t contracts at all, and shouldn’t be overseen by contract law.   Peggy was expanding on the theme of the apologists for adhesion who argue that the form contract is simply part of the product; you’d pay less, and we’d analyze the transaction very differently if you were buying a used or dented washer, so why shouldn’t we treat the washer with a disclaimer of merchantability the same way?   Peggy does a good job in undermining the idea that the benevolent sellers (they would say “licensors”) will share their savings with you by reducing the price, but the bigger objection is from those who are offended by the removal of form contracts from the contracts kingdom.  Yet that has been the process throughout the history of products liability, the very area Peggy is pointing to.

BoilerplateThe usual starting point of products liability is Winterbottom v. Wright, an 1842 decision of the Court of Exchequer, in which a coachman who had been injured when a defective mail coach “broke down,” attempted to recover from Wright, who had contracted with the Postmaster-General (who had immunity) to supply the coach and keep it in good repair.  Lord Abinger, the Chief Baron, took considerable care to support his conclusion that no duties were owed that were not “public duties” or violations of the law of nuisance, unless they were created by contract. Since Winterbottom was not in privity of contract with Wright, Winterbottom had no claim against him for his injuries, though caused by Wright’s failure properly to perform his contractual duties.  For nearly seventy-five years, the courts chipped away at this notion that a manufacturer (or, as in Winterbottom’s case, a maintenance contractor) had no tort duty to the ultimate user, until Cardozo, in Macpherson v. Buick Motor Co. destroyed the doctrine, with careful delineation of the caselaw, but really in three sentences: “We have put aside the notion that the duty to safeguard life and limb, when the consequences of negligence may be foreseen, grows out of contract and nothing else. We have put the source of the obligation where it ought to be.  We have put its source in the law.”

This worked well when negligence could be shown, but it didn’t help Bertha Chysky, a waitress who had been furnished as part of her lunch a piece of cake containing a nail that punctured her gum and cost her three teeth. She couldn’t prove negligence against the wholesale baker and sued for breach of warranty. The New York Court of Appeals, only seven years after Macpherson, and with Cardozo joining with the majority, reversed a verdict for her because “privity of contract does not exist between the seller and such third persons [like Bertha], and unless there be privity of contract there can be no implied warranty.”  Yet in the same era, in other states, courts were focusing on the nature of food to expand liability, until it became the widespread law that implied warranties were not limited to a contractual privity, and until Roger Traynor, in 1944, could use the fact that a Coke bottle contained “foodstuffs” to buttress his seminal opinion in Escola v. Coca-Cola Bottling Co., the well-spring of strict products liability. 

By focusing on the subject matter of the transaction rather than the formalities of contract or the assumption that tort is based on fault and wrong, Cardozo, Traynor and many other judges and writers were able to transform the issue to a question of who should bear the cost when a product injures a consumer, regardless of contract, regardless of fault.  Similarly, the courts, Congress and state legislatures should look, not at the mechanics of contract, but at the many factors relied upon by Professor Radin, to restrain the power of sellers to deprive consumers of rights that the social system has granted them and that form contracts attempt to take away.

 [Posted, on Peter Linzer's behalf, by JT]

http://lawprofessors.typepad.com/contractsprof_blog/2013/05/boilerplate-symposium-part-xiv-peter-linzer-that-was-no-contract-that-was-my-lunch.html

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