ContractsProf Blog

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

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Friday, August 9, 2013

Contracts LibGuides

Jesse-Bowman2This year, my colleauges at the Valparaiso University Law School and I, with the help of our librarian, Jeese Bowman (pictured), are teaching with the aid of this LibGuide.  The LibGuide contains all of the cases that we will use in our courses, plus links to Restatement,  UCC and CISG sections, as well as tabs through which students can find links to excercises, past exams and model answers, study guides, blog posts and other information that might prove useful to our students.

The move to the LibGuide was motivated by a number of considerations.  First, we have all used different casebooks and find a great deal to praise and admire in all of them.  However, no single casebook can be perfect for each contracts professor's individual needs.  I have a roster of cases that I think work best for the material I want to convey to my students.  No single casebook includes all of the cases I want to use, and the casebook authors sometimes edit their cases slightly differently than how I would edit them.  My colleagues and I edited the cases posted on the LibGuide to suit our teaching needs, and if we differ, we can always put up multiple versions.  

Second, even if I could find the perfect casebook that had every single case I want to teach and all the relevant ancillary materials, I still could not justify the expense to my students.  Casebook prices are simply too high, since we can deliver the same materials through the LibGuides.  I should note that, because I ban laptops and other technology from my classroom, I do require that the students buy xeroxed copies of the edited cases.  That will run them $10 a piece for the first seven-week minimester.

Yup! That's not a typo!  We are teaching contracts in two, two-credit, seven-week "minimesters," a topic about which I will have a lot to say in future posts.  

The LibGuide is still a work in progress.  Each week, I send Jesse more materials to add to the LibGuide.  This is another advantage of the LibGuide over print course materials.  It is easily expanded; easily revised; easily updated.  

The final advantage of the LibGuide is (dare I say it?) . . . LibGuides are fun.  Ask any librarian!  And believe you me, librarians know how to have fun.  They are fun for the same reason that this blog is fun.  You can follow links that interest you, and they often take you to unexpected and illuminating places.  We hope that our LibGuide will grow and prosper and that it will provide a portal through which our students can wander cautiously, tentatively until [whoosh!] they fall down a rabbit hole and emerge in the Wonderland of contract law.

[JT]

 

August 9, 2013 in Commentary, Contract Profs, Law Schools, Television | Permalink | TrackBack (0)

Wednesday, August 7, 2013

Response to Jeremy Telman's Post about Op-Ed on Wrap Contracts

This post responds to the thoughtful comments offered by my co-blogger Jeremy Telman in his post about my op-ed.  As he hinted, an op-ed provides a great forum for raising issues to a larger, non-academic audience but it is hardly the place to be thorough. Jeremy’s post gives me an opportunity to briefly touch upon the issues that I address in my forthcoming book.  (Note:  If you use the promotion code 31998 and click here you get a 20% discount).

Danger signJeremy raised the issue of the inadequacy of doctrinal solutions.  In fact, all of my proposed solutions are doctrinal.  There are undoubtedly more effective way to achieve societal changes, but doctrine obviously matters and right now, the law of wrap contracts is a mess.  It’s in a mess in a lot of different ways, yet the courts seem to be in denial, repeating the refrain that wrap contracts are “just like” other contracts. This is simply not so.  Much of my scholarship looks at how technology shapes behavior and argues that courts should consider the role of technology when they interpret and apply the law.  With respect to wrap contracts, courts ignore the ways that digital form affects both user perception and drafter behavior (i.e. overuse).  My proposed solutions seek to make the effects of the digital form part of the court’s analysis. 

One of these solutions, briefly mentioned in the op-ed and discussed in the book and elsewhere,  is a “duty to draft reasonably” which acts to counter the burden of the “duty to read.”  The duty to draft reasonably has very little to do with getting consumers to read contracts – it’s about getting companies to ask for less by making it less palatable for them to ask for more. As I explain in great length in my book, there are plenty of reasons why I am not a big fan of the duty to read –and why I think trying to get consumers to read is an inadequate solution.  Consumers shouldn’t be expected to read online contracts, at least, not as they are now drafted.  Reading wordy online contracts is not efficient and would hurt productivity. It’s also useless, since consumers can’t negotiate most terms.  Instead, we should try to get companies to present their contracts more reasonably/effectively.  We should require them to signal the information in an effective manner, the way that road signs signal dangerous conditions.  For example, I propose using icons, such as the danger icon that accompanies this post, to draw consumers’ attention to certain information.  Currently, courts construe “reasonable notice” to mean something other than “effective notice” – and this places too heavy a burden on consumers to ferret out information.  A “duty to draft reasonably” shifts the focus from the consumer's behavior to the drafting company’s behavior.  Could the company have presented the information in a better way? And if so, why didn’t it?  This is a question that courts used to ask with paper contracts of adhesion – but for some reason, they have moved away from this with wrap contracts. 

A related doctrinal adjustment that I propose in my book is specific assent.  For terms that take away user rights (which I refer to as “sword” and “crook” provisions), the user should be forced to actively assent by, for example, clicking on an icon.  The idea here is also not to get users to read, but to hassle them!  Imagine  having to click to give away each use of your data.  What a pain – and that’s the point.  The incorporation of a transactional hurdle or burden damages the relationship between the website and the user – and the more hurdles, the more annoying it becomes to complete the transaction. 

 Both proposals try to signal the type of company to the consumer.  A website full of danger icons sends a very different message than one with only one or two danger icons.  A website which requires a user to click forty times to complete a transaction won’t be around too long. 

As for better solutions, there are ways to address specific problems by using third party tools and I am all in favor of technical solutions.  For example, you can use duckduckgo or Tor to try to cover your tracks. But technical solutions have their shortcomings or limitations because they only address one part of the larger problem and it gets to be a bit like whack-a-mole as technology shifts and improves. 

Ultimately, any comprehensive solution has to be implemented by the government – either the legislature or the judiciary.  But it’s up to us, the consumers, to raise the issue as one needing a solution and we can do this through the democratic process and by marching with our feet. I agree with Jeremy that there are problems with collective action – there are coordination and resource issues as well as cognition limits, but that doesn't mean we shouldn't do anything. I don’t want to get into the thicket of that in this already too-long post, but I address this issue at great length in my book and propose that one way to deal with this is by reconceptualizing unconscionability.

Consumer advocacy groups and the websites referred to by Jeremy in his post certainly help with the collective action problem.  They inspire us to get off the couch.  Not easy when companies make it so comfortable for us to do nothing but that’s the nature of the beast here – it’s the same in other areas where consumers face the corporate marketing machinery and its expertise in manipulation.  As Kate O'Neill notes in the comments to Jeremy's post, we contracts profs have a role which is to point out the inconsistencies and contradictions in judicial application of doctrine and propose better ways to evaluate legal issues.  Some may scoff that judges don’t read law review articles --or books written by academics-- but it’s our job to keep trying.

 

[Nancy Kim]

August 7, 2013 in Commentary, Current Affairs, Miscellaneous, Web/Tech | Permalink | Comments (0) | TrackBack (0)

New in Print

Pile of BooksMitchell N. Berman, Coercion, Compulsion, and the Medicaid Expansion: A Study in the Doctrine of Unconstitutional Conditions, 91 Tex. L. Rev. 1283 (2013)

Andrea Doneff, Is Green Tree v. Randolph Still Good Law? How the Supreme Court's Emphasis on Contract Language in Arbitration Clauses Will Impact the Use of Public Policy to Allow Parties to Vindicate Their Rights. 39 Ohio N.U. L. Rev. 63 (2012)

Silke J. Forbes & Mara Lederman, Contract Form and Technology Adoption in a Network Industry, 29 J.L. Econ. & Org. 385 (2013) 

Ricard Gil & Justin Marion, Self-Enforcing Agreements and Relational Contracting: Evidence from California Highway Procurement, 29 J.L. Econ. & Org. 239 (2013)

Phillip T. Glyptis, Viability of Arbitration Clauses in West Virginia Oil and Gas Leases: It Is All About the Lease!!! 115 W. Va. L. Rev. 1005 (2013)

L. Paul Goeringer, H.L. Goodwin & Michael Popp, The New Fuel Frontier: Biomass Contracting. 5 Ky. J. Equine, Agri., & Nat. Resources L. 71 (2012-2013)

Karen E. Kahle & Denielle M. Stritch, Grouping the Marcellus Payout: Use of Class Actions in Royalty Litigation Concerning Post-Production Cost Deductions, 88 N.D. L. Rev. 699 (2012)

Daphna Kapeliuk & Alon Klement, Changing the Litigation Game: An ex Ante Perspective on Contractualized Procedures, 91 Tex. L. Rev. 1475 (2013) 

Daniel B. Kostrub & Roger S. Christenson II, Canons of Construction for the Interpretation of Mineral Conveyances, Severances, Exceptions, and Reservations in Producing States, 88 N.D. L. Rev. 649 (2012)

Daniel P. O'Gorman, Redefining Offer in Contract Law, 82 Miss. L.J. 1049 (2013)

Michael Pillow, Clashing Policies or Confusing Precedents: The "Gross Negligence" Exception to Consequential Damages Disclaimers, 4 Wm. & Mary Bus. L. Rev. 493 (2013) 

Christyne J. Vachon, Smokin'! Modification in Boomtown: When Business Is Booming, Look to the United States District Court for the Potential Effect of an Instant Message, an Analysis of the Recent CX Digital Media, Inc. v. Smoking Everywhere, Inc., 88 N.D. L. Rev. 613 (2012)

[JT]

August 7, 2013 in Recent Scholarship | Permalink | TrackBack (0)

Tuesday, August 6, 2013

Thoughts on Nancy Kim's Op-ed on Wrap Contracts and Online Privacy

KimA few days ago, my co-blogger Nancy Kim (pictured) posted a link to her op-ed in the Sacramento Bee entitled Why do we sign away our Internet Right to Privacy?  Today, I would like to take her to task for not solving the world's problems within the confines of an op-ed. 

The comments on her op-ed are unusually knowledgeable and interesting as online comments go, so kudos to the readers of the Sacramento Bee, and they anticipate some of my remarks below.

As I told Nancy (and I expect that she will return to weigh in on the subject) I was disappointed with her proposed remedies to the problem of online form contracts which include hidden terms that compromise privacy rights.  In the op-ed, she offers two suggestions: first, that courts should closely scrutinize the terms of contracts of adhesion for reasonableness; and second that we consumers should band together and voice our opposition to form contracts that deprive us of our privacy rights by grumbling about or boycotting (at least for a day) the websites that use such contracts.  Neither of these proposals strikes me as all that promising, and I know from having read Nancy's other writings that she has better ideas.

Courts

With respect to courts, Nancy suggests that the "duty to read" that the judiciary currently imposes on consumers ought to be offset by companies' "duty to draft reasonably."  Nancy contends that this would constitute a more evenhanded approach to reasonableness.  I'm sold; consumer advocates are sold; but I just don't see even the vaguest glimmer of hope that courts will move in such a direction.  The Supreme Court's recent arbitration decisions suggest that courts understand reasonableness as anything that promotes the agenda of the chamber of commerce, so long as it falls short of consigning orphans to lives of indentured servitude.  And the trend towards Dickensian understandings of commercial reasonableness is in my view heading in the direction of the 19th century robber barons and away from the world of Judges like Skelley-Wright and Traynor who would actually shape the law with the perspectives of ordinary consumers in mind.

From Grumbling to Boycotts

Nancy sensibly suggests that we consumers should not expect courts to do all the heavy lifting.  Consumers need to step up as well, either by complaining loudly on websites like Facebook and Twitter so that other users will learn about those sites' privacy policies and how much they suck, or by writing to members of Congress or by (heaven forfend!) staying away from the site for a few days in an organized way so that the site gets the message that consumers care about privacy.  To all of this I say, "meh."  I don't think people are sufficiently motivated to organize on these subjects, and I don't think a write-in campaign to either the websites themselves or to politicians will have much effect.  Zev Eigen raises a number of questions in his comment on the Sacramento Bee website.  His comments are a bit cryptic, but I think he is suggesting that people might be willing to sacrifice a shocking amount of privacy in exchange for the ability to "like" their sister-in-law's cousin's picture of her neighbor's newborn.  But Zev, if you are out there, feel free to elaborate.

Better Solutions

I'm not trying to show Nancy up here -- I'm not pretending that I know of solutions to the problem of which she is unaware.  I learned these solutions from Nancy and her ilk (e.g., the Boilerplate crowd and the Seduction by Contract crowd).  So, first, two of the comments on the Sacramento Bee website reference privacy-protective alternatives to mainstream websites.  I literally learned about these things from Nancy and Dan Barnhizer in comments posted on this very blog.  My recently remedied ignorance suggests that Nancy could do a lot of good by foregrounding the message that there are (at least sometimes) alternatives to the old stand-bys (I'm looking at you Google). 

The other solution is to let the invisible hand help us to overcome the group action problem that prevents our grumbling and boycotting from having much force.  I believe there already are websites that help people compare the terms of service of various providers.  How about an online version of something like Consumer Reports that does nothing but compare companies' boilerplate terms.  Are you looking to get a new phone contract?  Terms of Servitude (e.g.) will tell you which companies' terms are most rapacious.  Would you like to connect with your friends and "friends," without revealing to advertizers or others your addiction to websites about the real lives of the people on Jersey Shore?  Keep Out (e.g.) could be a website devoted to comparing the privacy policies of the various competitors in that field.  Such websites could be money-making propositions or they could be wikis -- or both I suppose.  Either way, they would be a far more powerful tool for group action (methinks) than the aggregated grumbling that Nancy advocates.

Perhaps once I get her book, Wrap Contracts (OUP 2013), I will see that she has quite a bit to say on this topic.

[JT]

August 6, 2013 in Commentary | Permalink | Comments (1) | 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 

June 7, 2013 to August 6, 2013

RankDownloadsPaper Title
1 4000 Multimodal Bill of Lading: The Problem of Party Liability 
Nadezda Alexandrovna Butakova
Russian Presidential Academy of National Economy and Public Administration (RANEPA)
2 174 A Psychology of Choice of Laws 
Gary Low
Singapore Management University - School of Law, Maastricht European Private Law Institute
3 149 Ice Cube Bonds: Allocating the Price of Process in Chapter 11 Bankruptcy 
Edward J. JangerMelissa B. Jacoby
University of North Carolina (UNC) at Chapel Hill - School of Law, Brooklyn Law School
4 83 Interpreting Investment Treaties as Incomplete Contracts: Lessons from Contract Theory 
Wolfgang Alschner
Graduate Institute of International and Development Studies
5 57 Catalyzing Fans 
Howard M. WassermanDan MarkelMichael McCann
Florida State University College of Law, University of New Hampshire School of Law, Florida International University (FIU) - College of Law
6 56 An Analytical Framework for Legal Evaluation of Boilerplate 
Margaret Jane Radin
University of Michigan Law School
7 56 Duties of Love and Self-Perfection: Moses Mendelssohn's Theory of Contract 
Helge Dedek
McGill University - Faculty of Law
8 51 Sticky Covenants 
Gus De FrancoFlorin P. VasvariRegina Wittenberg MoermanDushyantkumar Vyas
University of Toronto - Rotman School of Management, London Business School, University of Toronto - Rotman School of Management, University of Chicago - Booth School of Business
9 50 Mediation at the Intersection with Contract Law: The Settlement Agreement 
Anna Giordano Ciancio
Unaffiliated Authors - Independent
10 48 Carve-Outs and Contractual Procedure 
Erin A. O'Hara O'ConnorChristopher R. Drahozal
Vanderbilt University - Law School, University of Kansas School of Law

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

June 7, 2013 to August 6, 2013

RankDownloadsPaper Title
1 4000 Multimodal Bill of Lading: The Problem of Party Liability 
Nadezda Alexandrovna Butakova
Russian Presidential Academy of National Economy and Public Administration (RANEPA)
2 174 A Psychology of Choice of Laws 
Gary Low
Singapore Management University - School of Law, Maastricht European Private Law Institute
3 82 Interpreting Investment Treaties as Incomplete Contracts: Lessons from Contract Theory 
Wolfgang Alschner
Graduate Institute of International and Development Studies
4 56 An Analytical Framework for Legal Evaluation of Boilerplate 
Margaret Jane Radin
University of Michigan Law School
5 51 Sticky Covenants 
Gus De FrancoFlorin P. VasvariRegina Wittenberg MoermanDushyantkumar Vyas
University of Toronto - Rotman School of Management, London Business School, University of Toronto - Rotman School of Management, University of Chicago - Booth School of Business
6 50 Mediation at the Intersection with Contract Law: The Settlement Agreement 
Anna Giordano Ciancio
Unaffiliated Authors - Independent
7 35 State Contract Law and Debt Contracting 
Gil SadkaSharon P. KatzColleen Honigsberg
Columbia University - Columbia Business School, Columbia University - Accounting, Business Law & Taxation, Columbia University - Accounting, Business Law & Taxation
8 34 Revisiting the Efficiency Theory of Non-Contemplated Contingencies in Contract Law 
Yuval Procaccia
IDC Herzliya - Radzyner School of Law
9 31 In Defense of Surrogacy Agreements: A Modern Contract Law Perspective 
Yehezkel Margalit
Tel-Aviv University
10 28 Tracing Trajectories in Contract Law Theory: Form in Anglo-New Zealand Law, Substance in Japan and the United States 
Luke R. Nottage
University of Sydney - Faculty of Law

[JT]

August 6, 2013 in Recent Scholarship | Permalink | TrackBack (0)

Monday, August 5, 2013

Dentist with Curious "I Own Your Criticism Contract" is On the Lam

DentistArs Technica provides a nice summary of the state of affairs in the case of the New York City dentist who attempted to contract around the criticism of her patients.  It even includes a shout out to law profs Eric Goldman (Santa Clara) and Jason Schultz (Berkeley).  Open wide, here's a taste:

A lawsuit regarding a dentist and her ticked-off patient was meant to be a test of a controversial copyright contract created by a company called Medical Justice. Just a day after the lawsuit was filed, though, Medical Justice backed down, saying it was “retiring” that contract.

Now, more than a year after the lawsuit was filed, the case against Dr. Stacy Makhnevich seems to have turned into a case about a fugitive dentist. Makhnevich is nowhere to be found, won’t defend the lawsuit, and her lawyers have asked to withdraw from the case.

***

In 2010, Robert Lee was experiencing serious dental pain. He went to see Dr. Stacy Makhnevich, the “Classical Singer Dentist of New York,” in part because she was a preferred provider for his dental insurance company. Before Makhnevich treated him, she asked him to sign a contract titled “Mutual Agreement to Maintain Privacy.”

The contract worked like this: in return for closing “loopholes” in HIPAA privacy law, Lee promised to refrain from publishing any “commentary” of Makhnevich, online or elsewhere. The contract specified that Lee should “not denigrate, defame, disparage, or cast aspersions upon the Dentist.”

And the kicker: if he did write such reviews, the copyright would be assigned to the dentist. She’d own it.

This “I own your criticism” contract would soon be put to the test, because Lee was an extremely unhappy customer. “Avoid at all cost!” he wrote in a one-star Yelp review. “Scamming their customers! Overcharged me by about $4000 for what should have been only a couple-hundred dollar procedure.”

The forms Makhnevich was using, provided to her by a company called Medical Justice, were already the subject of considerable controversy. Two tech-savvy law professors, Eric Goldman of Santa Clara University and Jason Schultz of UC Berkeley, launched a website to fight the contracts, which garnered considerable press. Former Ars Technica writer Tim Lee chronicled his own experience with a Philadelphia dentist who was using the contract.

The “Mutual Agreement” was essentially a work-around to try to stifle patient reviews. Doctors, or any other business, who believe that an online review is, say, defamatory, can go ahead and sue a reviewer—but they don’t have an easy way to get the review down. Review sites like Yelp are protected by Section 230 of the Communications Decency Act, which immunizes the platforms hosting such user-generated content, as long as they don’t edit it heavily. Review sites in the US don’t typically remove posts when a business claims defamation.

Copyright, however, is a different story. Section 230 doesn’t cover intellectual property laws, and Yelp has to react quickly to claims that a user has violated copyright law.

Users of the Medical Justice form were counting on that, and it worked. In September 2011, staff members of Dr. Makhnevich sent DMCA takedown notices to Yelp and DoctorBase. That was followed up with invoices sent to Robert Lee, saying he owed $100 per day for copyright infringement. Accompanying letters threatened to pursue “all legal actions” against him.

Of course, the dentist's disappearance and considerable negative press leads Paul Levy of Public Citizen to remark: 

“It’s quite possible that the consequence of her having this contract is that she had to give up her dental practice,” said Levy. “It’s the Streisand effect gone bonkers.”

Yes, indeed.  More from Ars Technica here.

[Meredith R. Miller]

August 5, 2013 in In the News, Recent Cases, True Contracts | Permalink | Comments (1) | TrackBack (0)

Sunday, August 4, 2013

Op-Ed on Wrap Contracts and Online Privacy

The Sacramento Bee published my op-ed on wrap contracts and online privacy today.  Here's the link.

 

[Nancy Kim]

 

August 4, 2013 in Contract Profs, Current Affairs, Web/Tech | Permalink | Comments (0) | TrackBack (0)