ContractsProf Blog

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

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Thursday, July 4, 2013

What Could Be More All-American than a Baseball Contract?

NY  MetsThere have been a few articles over the past few days about Bobby Bonilla's contract with the New York Mets.  Bonilla played for the Mets until he retired in 2001.  At that point, he still had $5.9 million outstanding on his contract.  Rather than giving Bonilla a lump sum payment, the Mets opted to pay him start paying him in 2011.  The Mets are to pay Bonilla a total of $29.8 million over 25 years.  

Cork Gaines of the Business Insider explains that this was a good deal for the Mets in terms of their bottom line on the Bonilla contract.  Assuming an 8% rate of return, the long-term payout deal is worth $10 million less over time to Bonilla than would a one-time payout.  And, because the Mets had the use for teny years of the $5.9 million that they owed Bonilla until the payouts began in 2011, they were able to invest that money, and the come out at the other end looking pretty good, assuming an 8% annual return on investment and ignoring all other issues, like the tax consequences of the transaction.  

In the New York Times, Jeff Z. Klein and Mary Pilon are decidedly less positive about the Bonilla contract, but they dutifully report that all parties involved stil believe they acted in their own best interest.  The Times provides some details missing from the Buinsss Insider report.  The Mets needed to get Bonilla off their books and out of their clubhouse so that they could free up space under the MLB salary cap and free themselves from an underperforming player who had become a distraction.  

We have expressed our view before that multi-million dollar, multi-year deals for veteran ballplayers are irrational.   With baseball mania for statistics, it ought to be possible to fine-tune baseball contracts with incentives so that players actually get paid for performance (you know, like CEOs) rather than getting paid for hitting .250 when they are 35 because they hit .320 when they were 29.

[JT]

July 4, 2013 in Celebrity Contracts, Commentary, In the News | Permalink | Comments (1) | TrackBack (0)

Wednesday, July 3, 2013

New in Print

Pile of BooksElliot Axelrod, The Efficacy of the Negative Injunction in Breach of Entertainment Contracts. 46 J. Marshall L. Rev. 409 (2013)

Richard A. Bales & Matthew Miller-Novak, A Minor Problem with Arbitration: A Proposal for Arbitration Agreements Contained in Employment Contracts of Minors. 44 McGeorge L. Rev. 339 (2013)

Miriam A. Cherry, Cyber Commodification, 72 Md. L. Rev. 381 (2013)

Moshe Gelbard & David Elkins, The Remedy of Price Reduction in a Mixed Legal Environment, 42 Stetson L. Rev. 1398 (2012)

Alan J. Meese, The Market Power Model of Contract Formation: How Outmoded Economic Theory Still Distorts Antitrust Doctrine, 88 Notre Dame L. Rev. 1291 (2013)

Jan M. Michaels, Michael J. McNaughton & Sridevi R. Krishnan, The "Non-Cumulation" Clause: Policyholders Cannot Have Their Cake and Eat It Too, 61 U. Kan. L. Rev. 701 (2013)

Jon D. Michaels, Privatization's Progeny, 101 Geo. L.J. 1023 (2013)

Juliet M. Moringiello & William L. Reynolds, From Lord Coke to Internet Privacy: The Past, Present, and Future of the Law of Electronic Contracting, 72 Md. L. Rev. 452 (2013)

Robert J. Rhee, The Tort Foundation of Duty of Care and Business Judgment. 88 Notre Dame L. Rev. 1139 (2013)

Val Ricks, Assent Is Not an Element of Contract Formation, 61 U. Kan. L. Rev. 591 (2013)

Kurt S.Schulzke, Gerlinde Berger-Walliser & Pier Luigi Marchini, Lexis Nexus Complexus: Comparative Contract Law and International Accounting Collide in the IASB-FASB Revenue Recognition Exposure Draft, 46 Vand. J. Transnat'l L. 515 (2013)

Monica E. White, "Package Deal": The Curious Relationship between fiduciary duties and the implied covenant of good faith and fair dealing in Delaware limited liability companies, 21 U. Miami Bus. L. Rev. 111-181 (2013)

 And one new book:

Steven J. Burton & Melvin A. Eisenberg, Contract Law: Selected Source Materials Annotated (West, 2013)

 [JT]

July 3, 2013 in Recent Scholarship | Permalink | TrackBack (0)

A non-disparagement clause and a contract that pushes the limits without one

The NYT's (new) ethicist, Chuck Klosterman tackled the issue of non-disparagement clauses in last Sunday's magazine (you have to scroll down past the first question about the ethics of skipping commercials).  Klosterman stated that, "(n)ondisclosure provisions that stretch beyond a straightforward embargo on business-oriented “trade secrets” represent the worst kind of corporate limitations on individual freedom — no one should be contractually stopped from talking about their personal experiences with any company."  He adds, "You did, however, sign this contract (possibly under mild duress, but not against your will)."  A non-disparagement clause, however, is quite different from a blanket nondisclosure provision - the ex-employee may presumably talk about her personal experiences, as long as she leaves out the disparaging remarks.  "Mild duress" is an oxymoron since duress, by its definition, is not mild and if you sign something under duress, you are signing it against your will.  Despite getting the nuances wrong, the advice -- which is basically to say nothing bad but say nothing good either --  is sound. Sometimes silence speaks volumes.

Non-disparagement clauses in settlement agreements are fairly common and I don't think they are necessarily outrageous (it is a settlement agreement afterall).  That's not the case with this agreement, posted courtesy of radaronline and discussed at Consumerist.  The agreement doesn't contain a non-disparagement clause but still manages to be overreaching.  The agreement, purportedly from Amy's Baking Company , requires that its employees work holidays and weekends, and extracts a $250 penalty for no-shows.  It also forbids employees from using cell phones, bringing purses and bags to work, and having friends and family visit during working hours.  The contract also contains a non-compete clause, prohibiting employees from working for competitors within a 50 mile radius for one year after termination.  What the agreement doesn't contain is a non-disparagement clause - and a clause prohibiting employees from sharing the terms of the agreement with others.  My guess is that those clauses will probably show up in the next iteration of the contract....

 

[Nancy Kim]

July 3, 2013 in Current Affairs, Miscellaneous, True Contracts | Permalink | Comments (1) | TrackBack (0)

Tuesday, July 2, 2013

Chemerinsky on Italian Colors and Other Recent SCOTUS Opinions

E_chemerinsky_profile3Erwin Chemerinsky has an op-ed in today's New York Times about three pro-business decisions from the recently-concluded Supreme Court term.  He devotes a couple of paragraphs to Concepcion and then talks a little bit at the end about Italian Colors.  

The article draws on these three opinions as examples of the pro-business bent of the current Supreme Court.  The cases are in the areas of employment discrimination, product liability and arbitration.  In all three areas, the Court made it harder this term for plaintiffs who are trying to sue commercial enterprises to get past a motion to dismiss.  

Chemerinsky picks up on Justice Ginsburg's call for a legislative solution, but very few people believe our elected representatives are capable of (or interested in) addressing these issues.

[JT]

July 2, 2013 in Commentary, In the News | Permalink | Comments (0) | 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 3, 2013 to July 2, 2013

RankDownloadsPaper Title
1 252 The Hague Principles on Choice of Law for International Contracts: Some Preliminary Comments 
Symeon C. Symeonides
Willamette University - College of Law
2 229 Regulation Through Boilerplate: An Apologia 
Omri Ben-Shahar
University of Chicago Law School
3 218 Can an Arbitrator Conduct Independent Legal Research? If Not, Why Not? 
Paul Bennett Marrow
New York Law School
4 134 Customary Law: An Introduction 
Lisa BernsteinFrancesco Parisi
University of Chicago Law School, University of Minnesota - Law School
5 127 On the Applicability of the Common European Sales Law to Some Models of Cloud Computing Services 
Chris ReedClarice CastroRuy de Queiroz
Universidade Federal de Pernambuco, Queen Mary University of London, School of Law, Centro de Informática - Univ Federal de Pernambuco
6 99 The Information Privacy Law of Web Applications and Cloud Computing 
Sebastian Zimmeck
Columbia University - Department of Computer Science
7 98 Lochner, Liberty of Contract and Paternalism: Revising the Revisionists? 
Harry G. Hutchison
George Mason University - School of Law
8 71 Contracts as Technology 
Kevin E. Davis
New York University (NYU) - School of Law
9 67 Interpreting Investment Treaties as Incomplete Contracts: Lessons from Contract Theory 
Wolfgang Alschner
Graduate Institute of International and Development Studies
10 67 In Quest of the Arbitration Trifecta, or Closed Door Litigation?: The Delaware Arbitration Program 
Thomas Stipanowich
Pepperdine University School of Law

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

May 3, 2013 to July 2, 2013



RankDownloadsPaper Title
1 252 The Hague Principles on Choice of Law for International Contracts: Some Preliminary Comments 
Symeon C. Symeonides
Willamette University - College of Law
2 229 Regulation Through Boilerplate: An Apologia 
Omri Ben-Shahar
University of Chicago Law School
3 127 On the Applicability of the Common European Sales Law to Some Models of Cloud Computing Services 
Chris ReedClarice CastroRuy de Queiroz
Universidade Federal de Pernambuco, Queen Mary University of London, School of Law, Centro de Informática - Univ Federal de Pernambuco
4 99 The Information Privacy Law of Web Applications and Cloud Computing 
Sebastian Zimmeck
Columbia University - Department of Computer Science
5 98 Lochner, Liberty of Contract and Paternalism: Revising the Revisionists? 
Harry G. Hutchison
George Mason University - School of Law
6 67 Interpreting Investment Treaties as Incomplete Contracts: Lessons from Contract Theory 
Wolfgang Alschner
Graduate Institute of International and Development Studies
7 61 The No Reading Problem in Consumer Contract Law 
Ian AyresAlan Schwartz
Yale University - Yale Law School, Yale Law School
8 59 Do the Right Thing: Indirect Remedies in Private Law 
Daphna Lewinsohn-Zamir
Hebrew University - Faculty of Law
9 53 Disclosing Corporate Disclosure Policies 
Victoria L. Schwartz
Pepperdine University School of Law, University of Chicago - Law School
10 47 Dispute Resolution in Public Contracts: Lessons from Select International Best Practices 
Sandeep Verma
Ministry of Defence, Government of India

[JT]

July 2, 2013 in Recent Scholarship | Permalink | TrackBack (0)

Monday, July 1, 2013

Adventures in Contracts of Adhesion

I was traveling this weekend and stayed at a hotel.  As we were about to check in, I noticed this sign, which I would surely never have noticed if I did not teach contracts.

Parking warning

Look,much of this may be true whether or not the sign exists, but still I hope that I do not live in a world in which someone can plop down a sign on a parking lot and thereby bind me to whatever terms she chooses to impose.  The troublesome word here, of course, is "irrefutable."  Since this was an open parking lot that my hotel shared with a number of other hotels, there was no parking attendant.  I could have written out a note certifying that my 2001 Camry is immaculate and handed to the people at reception.  I expect that would have been flummoxed by such a note.  Whether or not my note is accurate, I would regard it as a reasonable response to the sign.  I would not want to run the risk of being on the wrong side of an irrefutable presumption, so better to state my claim as sweepingly as possible.

The wicked witch had it right.  "What a world, what a world!"

[JT]

July 1, 2013 in Commentary, Travel, True Contracts | Permalink | Comments (0) | TrackBack (0)