Monday, March 11, 2013
My co-blogger, Meredith Miller has already commented on the ways in which Martha Stewart is the modern Lady Duff. It really is extraordinary. Martha Stewart is, of course, far more diverse and perhaps more ambitious in terms of the range of products that her company produces, but Lady Duff was quite the force in her day. Remember that Mr. Wood sued her because her agreement to endorse merchandise sold in Sears Roebuck stores allegedly violated their agreement that he was to be her exclusive marketing agent.
As reported in the New York Times, Martha Stewart was in court last week testifying in a showdown between Macy's and J.C. Penney over which company gets to carry Martha Stewart products in its stores. Alas, the facts in this case are much more complicated than the straightforward Wood v. Lady Duff-Gordon. However, the kernel of the dispute is very much reminiscent of the older case.
Martha Stewart's company, now called Martha Stewart Living Omnimedia (MSLO), entered into an agreement with Kmart in 1997 permitting Kmart to sell the company's products in its stores. Ten years later, MSLO entered into a similar agreement with Macy's, and when the agreement with Kmart expired in 2009, Macy's became "the only retailer to sell [MSLO] products in categories like home décor, bedding and bath," according to the Times. In 2011, J.C. Penney started attempting to woo Ms. Stewart into a deal to sell MSLO products in its stores as a mechanism for bolstering its shaky financial performance. James B. Stewart's column in last week's New York Times indicates that, since its new CEO has come on board, J.C. Penney has reported a $4.28 billion loss in sales and laid off 2200 workers, while its share price has dropped 60%.
Upon learning that Ms. Stewart was in bedding with J.C. Penney, Macy's was not well-pleased. In her testimony, Ms. Stewart did not seem to see the problem. When asked if a consumer was likely to buy the same product, say a knife, at two different stores, Ms. Stewart gamely answered that the consumer might have two houses and need one knife for each kitchen. This might explain why she no longer sells her goods at Kmart. What's the point of selling to a demographic that includes renters? She might have added, "I like to keep an extra knife handy for back-stabbing," but her talents for self-mockery (in response to a question about how she spends her time, she responded "I did my time," to the delight of the courtroom audience), do not extend quite that far.
In today's New York Times, David Carr presents an apt anaology: the conflict is like a schoolyard fight between two boys over the most popular girl on the playground. And Carr succinctly explains why Martha Stewart is so popular. Ms. Stewart, he reminds us, "altered the way that people live by decoupling class and taste. . . . When you go into Target or Walmart and see a sage green towel that is soft to the touch, it may not carry her brand, but it reflects her hand. Her tasteful touch — in colors, in cooking, in bedding — is now ubiquitous. . . ." Here too, there are echoes of Lady Duff.
Ms. Stewart expressed surprise that a simple contract dispute would end up in court. It should be possible for the parties to come to an understanding of words written on a page. New York Supreme Court Justice Jeffrey K. Oing may agree, since he sent the case to mediation, but according to James Stewart, he might have arrived at that result through a reasoning process that Ms. Stewart would not endorse. According to James Stewart, the meaning of the contract is clear:
[T]he contract itself seems straightforward, with numerous clauses giving Macy’s exclusive rights to Martha Stewart products in various categories, including “soft home,” like sheets and towels, as well as housewares, home décor and cookware, and specifically limits her rights to distribute her products through any other “department store.”
He adds that there is no question that J.C. Penney is a department store. Justice Oing appeared to agree, since he repeatedly said that the contract is clear, and he granted an earlier injunction. J.C. Penney may have hoped to get around the exclusive contract by setting up a MSLO boutique within its own stores, but James Stewart gives a number of reasons, both legal and factual, and citing to the authoritative Charles Fried on the law, for why that argument is unlikely to fly.
What might fly would be a giant Martha Stewart balloon at the next Macy's Thanksgiving Day Parade. According to James Stewart, Ms. Stewart still asks for and receives free tickets for herself and her grandchildren to that event. Last year, James Stewart reports, she complained that she did not get to sit with the other celebrities who are seated with Macy's CEO, Terry Lundgren. Time for Macy's to show Martha Stewart the love. After all, Macy's does need her products in its stores.
Tuesday, March 5, 2013
LeBron James participated in this year's NBA All-Star game but one former player, Magic Johnson, was not happy. Magic, like many fans, would like to see the league's star players participate in the fun events leading up to the game, such as the slam dunk contest. Apparently, Magic would like that so much that he's willing to offer $1 million to the winner of next year's slam dunk contest if the contest includes LeBron James. He made that offer on ESPN's show, NBA Countdown:
When I first learned of this, I suspected that Magic's statement was an offer to James himself. However, in the video, Magic appears to say that the money would go to the winner of the contest, LeBron or not (OK, sure, the winner likely would be LeBron but you never know--underdogs can win, too).
Jalen Rose, Magic's co-host of the show NBA Countdown, stated that another player, Blake Griffin, would have to participate, too. Magic's verbal agreement with Rose seems to indicate a modified offer--one in which the $1 million payout is now conditioned on the participation of James and Griffin. From the video, it also appears that Magic is bargaining for performance versus promise but I'm not 100% sure.
For professors looking for a modern-day reward-style offer, this could serve as a less political alternative to the recent reward-style offers by Donald Trump and Bill Maher, about which we previously blogged.
[Heidi R. Anderson]
Thursday, February 21, 2013
There's a theory among some of my foodie friends that, when it comes to food, bacon makes everything better. I'm considering a similar theory for teaching Contracts via hypos: when it comes to Contracts hypos, celebrities make everything better. Hypos work. Sure, they "taste" just fine using names like "Buyer," "Client," and "Sub-Contractor," and I use those names most of the time. But using names like "Jason Patric, you know, the guy from Lost Boys and Narc" often makes the hypo better, at least for the few people over 25 who remember those movies. So, in the interest of making hypos better via celebrity a.k.a. bacon, I bring you this story from TMZ (see, you don't actually have to go to sites of ill repute; you can count on me to go to them for you and only bring you the somewhat good, quasi-clean stuff).
As TMZ reports, actor Jason Patric is in a custody dispute with his ex-girlfriend, Danielle Schreiber. Upon their break-up in 2009, Patric allegedly agreed to compensate Schreiber for her troubles via donating his sperm instead of by paying her. Presumably, in exchange for Patric's promised sperm, Schreiber would not sue Patric for support payments. Simple enough (sort of). But wait, there's more! Patric allegedly would donate his sperm to Schreiber only if she also promised not to seek support from him for the child; Schreiber agreed. If this agreement actually was reached, Schreiber must have believed that Patric's sperm was so valuable that she was willing to forgo support payments for herself and for the child that would result. [Insert skepticism here.]
How does this relate to Contracts hypos? It works as a hypo for R.R. v. M.H., which many of us use to teach how a contract can be deemed unenforceable if it violates public policy. In R.R. v. M.H., the court must decide whether to enforce the surrogacy agreement between a fertile father, married to an infertile wife, and the surrogate mother, who also happens to be married, and who was inseminated with the fertile father's donor sperm. I won't go into the case in more detail here; instead, I would like to focus one part of the case has a direct parallel to the Jason Patric dispute.
In R.R. v. M.H., a state statute provided that the husband of a married woman inseminated with donor sperm was treated as the legal father of the child, with all of the associated benefits and obligations that fatherhood carried along with it. The statute was supposed to facilitate the common practice of women being inseminated by a (usually anonymous) sperm donor. Strictly applying the statute to the facts in R.R. v. M.H. would have led to an absurd result. Specifically, it would have meant that the legal father of the child born to the surrogate would have been the surrogate's husband, who had no real interest in the child. The court wisely argued its way around that literal application and ruled differently.
The Patric dispute also involves a law of unintended consequence much like that involved in R.R. v. M.H. A California law states as follows:
"(b) The donor of semen provided to a licensed physician and surgeon or to a licensed sperm bank for use in artificial insemination or in vitro fertilization of a woman other than the donor's wife is treated in law as if he were not the natural father of a child thereby conceived, unless otherwise agreed to in a writing signed by the donor and the woman prior to the conception of the child."
Applying this law to the Patric situation could, like the law in R.R. v. M.H., produce an absurd result. Let's paraphrase the statute with applicable facts in parentheses:
"The donor of semen (Patric) for use in artificial insemenation of a woman (Schreiber) other than the donor's (Patric's) wife (they weren't married) is treated in law as if he (Patric) were not the natural father unless otherwise agreed in a signed writing."
So, even though Patric and Schreiber had been romantically involved, the formalized donation and the couple's unmarried status could negate Patric's claims to custody. It is not clear whether the statute applies and, not being admitted in California, I'd rather not analyze it further. But it always surprises me how what seems like a one-in-a-million kind of case does, in fact, repeat itself. Eventually.
[Heidi R. Anderson]
Monday, February 18, 2013
Tuesday, February 12, 2013
I recently covered the implied duty of good faith and fair dealing in part through the fun case of Locke v. Warner Bros. In Locke, the LA County Superior Court found that Warner Brothers' alleged failure to even consider Ms. Locke's movie proposals could violate the implied duty of good faith and fair dealing in their contract. Although Warner Brothers was not obligated to produce Ms. Locke's projects, it was obligated to exercise its discretionary power regarding her proposals in good faith. If Warner Brothers had, as Ms. Locke alleged, never actually considered her proposals, it would have violated their contract.
After Ms. Locke survived summary judgment, the case later settled. Prior to that time, Ms. Locke also had suggested that Warner Brothers never seriously considered her proposals as a favor to her ex, Clint Eastwood. Locke and Eastwood had worked together on the movie, The Outlaw Josey Wales (poster pictured to the right), and cohabitated for several years therafter. When the two actors split, Eastwood allegedly convinced Warner Brothers to give Locke the "first look" deal as part of his settlement with her and perhaps had even reimbursed Warner Brothers for the money it paid to Locke under its deal with her.
Inspired by this tale of love and faith lost, student Catherine Witting crafted the following limerick and authorized me to share it with the world.
Locke sued the Dubya B,
Saying "Don't you patronize me!
Clint may pay the bill,
But discretion is still
Subject to good faith guarantee!"
For a more recent case that tracks the facts of Locke, see this post regarding director John Singleton from 2011.
We had previously blogged about the demand letter that Donald Trump sent to Bill Maher. Maher dedicated a segment on his show to the dispute, taking aim at Trump's lawyer. Maher begins: “Donald Trump must learn two things: what a joke is and what a contract is.”
The segment is reminiscent of the Leonard v. Pepsico decision when Judge Wood takes on the task of explaining why the harrier jet commercial was "evidently done in jest." Here, Maher continues the humor in explaining why it was parody when challenged Trump to prove that he (Trump) was not born of an orangutan.
Here's the clip:
[Meredith R. Miller]
Thursday, February 7, 2013
Plaintiff Fabian Zanzi alleged that John Travolta sexually assualted and battered him while Zanzi was attending to him aboard a Royal Carribean Cruise ship. In the District Court for the Central District of California, Travolta moved to compel arbitration based on his cruise ticket and Zanzi's employment agreement. On February 1, 2013, as posted on The Hollywood Reporter, the District Court denied Travolta's motion to compel arbitration.
The District Court rejected Travolta's arguments that Zanzi was bound by the arbitration clause in Travolta's ticket because Zanzi, as a non-signatory to the agreement contained in that ticket could not be bound to arbitrate under it. While the court recognized certain exceptions to the rule against binding non-signatories, it found none of them applicable on these facts.
The court similarly rejected Travolta's argument that Zanzi could be bound by the arbitration clause in Travolta's ticket because Zanzi was an agent of Royal Carribean, a signatory. The court noted that "a non-signatory employee is bound to arbitrate under 'agency principles' only to the extent that its principal signed an arbitration agreement with the authority to bind the employee in his individual capacity." Zanzi never authorized his employer to divest him of his right to bring personal claims.
Travolta next argued that Zanzi should be bound by Travolta's ticket's arbitration clause because Zanzi was a third-party beneficiary to the agreement contained in the ticket. The court rejected Travolta's third-party beneficiary theory, finding that the agreement benefits Royal Caribbean and shields it from liability. Any benefits flowing to Zanzi from the ticket are indirect and incidental.
In the alternative, Travolta argued that Zanzi should be estopped from litigating his claims against Travolta in court while also litigating related claims against Royal Caribbean through arbitration as required under Zanzi's employment agreement. Here, Zanzi is a signatory to the agreement; Travolta is not. Travolta contended that estoppel applied because Zanzi had "alleged substantially interdependent and concerted misconduct by the nonsignatory Defendant and signatory Royal Caribbean." The court found that characterization inaccurate. Zanzi alleged sexual assault and battery against Travolta; his allegations against Royal Caribbean relate to how his employers treated him after he reported Travolta's alleged misconduct. Zanzi claimed that he had been confined for five days until Travolta disembarked. In his dispute with Royal Caribbean, Zanzi is claiming false imprisonment and intentional and negligent infliction of emotional distress. The two sets of claims relate to separate acts that occurred at different times and there are no allegations that the parties acted in concert.
Days after this decision was issued, as reported in the Daily Mail online, Zanzi announced that he was dropping his suit, citing litigation costs. Travolta's lawyers dismsses Zanzi's allegations as an attempt to gain fame and money by selling the story to the media.
Monday, February 4, 2013
File this under "objective theory" example that even a law professor could not invent.
On national tv Bill Maher challenged Donald Trump to come forward with Trump's birth certificate to prove that Trump was in fact born from a human father (not an orangutan). Apparently Trump provided his birth certificate and then requested that Maher remit the $5 million. The discussion on Fox News: what did Donald Trump reasonably believe? Was this an offer to enter into a unilateral contract? Watch it here:
Who wins: Trump or Maher?
[Meredith R. Miller h/t Steven Crosley]
Thursday, January 10, 2013
With more people acting like citizen journalists these days, celebrities often are exposed for engaging in various activities they'd rather their fans not know about (insert shameless plug for my privacy-related article, The Mythical Right to Obscurity, here). For example, pictures of Justin Bieber recently surfaced that allegedly show him holding a "blunt," a.k.a. marijuana rolled like a cigarette. How is this related to contracts? Well, in order to avoid future publication of pictures like the blunt pics, Justin Bieber reportedly is posting signs wherever he socializes which state that any pictures taken of him during the socializing belong to Justin Bieber only. In other words, if you are hanging out with Justin Bieber, Baby, you are promising not to distribute (take?) any pictures without his express permission. The questions for our blog are:
(i) Is there a contract? Is my staying in the room, thereby giving him Somebody to Love, acceptance of Justin's proposed terms (like my keeping of the computer in Gateway)?
(ii) Is there consideration? Is Justin's staying in the room valid consideration to support my promise not to share pictures of him? Or is everything ok As Long as [He] Love[s] Me?, and
(iii) Has my use of song-related puns in this and other posts grown tiresome?
In a related post, our own Nancy Kim discussed Chris Brown's practice of requiring fellow partiers to sign a confidentiality agreement.
[Heidi R. Anderson]
Monday, December 17, 2012
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.
Monday, December 3, 2012
As reported here in the New York Post, hip hop artist and producer, Ryan Leslie, offered via YouTube video a $1 million reward for the return of a lost laptop and external hard drive.
Mr. Leslie laptop and an external hard drive were allegedly stolen while he was touring in Cologne. Plaintiff Armin Augstein claimed to have foudn the missing items while walking his dog. He returnd the property to the German police and claimed his reward when notified of its existence.
According to the Post, Mr. Leslie gave two explanations for his refusal to pay the reward. First, Mr. Leslie suggested that Mr. Augstein may have been in on the heist, since he found the laptop fifteen miles from where the theft allegedly took place. Second, Mr. Leslie claimed that his duty to pay was contingent on his ability to retrieve certain musical tracks from the external hard drive, something Mr. Leslie claimed he was unable to do. Because Mr. Leslie had returned the hard drive to the manufacturer, the judge informed the jury that they should assume that Mr. Leslie could have retrieved the tracks before doing so.
During jury deliberations, Mr. Leslie's attorneys attempted to settled, but plaintiff refused. After three hours of deliberation, the jury returned with a decision awarding plaintiff the full $1 million. His lawyer commented that Mr. Augstein was due not just a "thank you" but an apology. The law requires only a check.
Tuesday, November 27, 2012
Angus T. Jones could be in breach of contract for making a shocking declaration via You Tube today that Two and a Half Men is “filth” and that viewers should stop watching, some industry experts say.
Most actors’ deals typically include disparagement clauses that prohibit them from making negative statements about their show in public, but it’s rare for any studio to enforce such a codicil because what can be considered disparagement is so subjective and, as one high-powered source says, “What moron would stab the show that pays him?” Jones, as well as his costars Ashton Kutcher and Jon Cryer, renewed his contract in May for Men‘s current season. He’s earning a reported $300,000 per episode.
Warner Bros. TV would not comment on whether Jones’ deal includes such a boilerplate clause. And even if it did, it seems unlikely WBTV would act on it considering Jones is only 19 and also plays an integral role on the show, which is currently ranked as TV’s third most-watched comedy. Asks an exec at a competing studio, “What are they going to do, fire him?”
[Meredith R. Miller]
Wednesday, November 14, 2012
From the ABA Journal:
Movie studios and marketers are recognizing the power of social media with new contract clauses for stars with Twitter and Facebook requirements.
Some studios contracts now require actors to make best efforts to use social media to support their work, an unidentified lawyer tells the New York Times. And companies paying for celebrity endorsements are writing social media guarantees into contracts, Advertising Age reported last year.
"We're starting to hear in negotiations, ‘We'd like to include X number of tweets or Facebook postings,' " Peter Hess, co-head of commercial endorsements for Creative Artists Agency, told Advertising Age.
The Times profiled a new company called theAudience that helps manage the social media presence for celebrities, movie marketers and record labels. According to the story, a star with a huge online following has more leverage when negotiating compensation packages to star in a movie or endorse a product.
[Meredith R. Miller]
Wednesday, November 7, 2012
As reported here by the BloombergBusinessweek, Jay Kramer, former attorney for master of horror, Stephen King, filed suit in New York’s Supreme Court against the author’s agents, Arthur B. Greene and Susan Greene of the Arthur B. Greene Literary Agency, alleging conversion of commissions for work performed, breach of contract, quantum merit/unjust enrichment, and tortious interference.
Kramer was fired on March 30th after having worked for Mr. King for thirty years. He alleges that the defendants have withheld his commission for several projects that he helped broker, including film and television production projects based on King's writings: Secret Window, The Stand, and 1408, among others. Kramer alleges that after he was fired, the Greenes “jointly and severally began diverting the sums owed to [him] to their own account.” Kramer is asking for $1 million in damages.
[Christina Phillips & JT]
Tuesday, November 6, 2012
Sam Lufti, former self-proclaimed manager to Britney Spears (left), filed suit against the “Baby One More Time” pop-star for breach of contract, against her father for assault and battery, and against her mother for defamation. Lutfi alleges he had a multi-year contract with the singer that entitled him to 15% of her income. However, as reported here by the New York Daily News, Lufti was unable to recall ever telling a single person that Spears promised to pay him 15% of her income, nor was he able to produce an adequate written contract. He could only provide a form contract that he downloaded from the internet, which he claimed he had used to make an oral agreement with Ms. Spears.
As reported on Fox News here, the suit was dismissed on Friday as Mr. Lufti was able to make out any of his claims against Ms. Spears or her parents.
[Christina Phillips & JT]
Thursday, October 25, 2012
Although I am loathe to increase publicity for someone as publicity-hungry as "The Donald," I am confident that our loyal readers will permit me this one post. A few first semester Contracts students sent me a link to the above video and suggested that this was a great example of an offer to enter into a reward-style unilateral contract. I told them I'd oblige them and post it here. It clearly identifies the one person who can accept, the manner and mode of acceptance, and the performance sought in return for Trump's promise. In case you've been living under a rock ignoring anything political lately, the performance he seeks is President Obama's submission of passport and college application records (which Trump reportedly believes indicate a place of birth of Kenya). The offered reward is Trump's promise to donate $5 million to a charity of the president's choice.
The president's fantastic response from The Tonight Show is posted below.
Not to be outdone, Stephen Colbert has offered up his own reward, the nature of which was, well...see for yourself (viewer discretion strongly advised).
[Heidi R. Anderson]
Monday, October 22, 2012
As promised, the following is contributed by Professor Miriam Cherry's student, Umo O. Ironbar:
As a 1L student at Saint Louis University, reading the conditions materials in Professor Lawrence Cunningham’s Contracts in the Real World Stories of Popular Contracts was refreshing.
We looked at a deal that Kevin Costner went into for the creation of massive bronze bison sculptures which would be put in place in his luxury resort in South Dakota named The Dunbar (a tribute to his successful production of his 1990 movie “Dancing With Wolves). Another case we looked at was Charlie Sheen’s “play-or-pay” contract with Warner Brothers.
These cases are still so vivid in my mind because I actually knew who the parties were. Unlike other cases that could have been found in my regular contracts textbook, I did not have to wait until the notes and questions sections after the cases to know why these cases were so important or infamous, or why they made the selection into the textbook out of the hundreds of thousands of cases that have been tried.
I grew up watching Kevin Costner and Charlie Sheen on the big screen and television. They are both successful actors – and both had more than their share of controversy. When we read about Charlie Sheen our class was abuzz and more people wanted to speak and contribute to the class discussion. For me and many of my fellow classmates, the excitement came in part because Charlie Sheen was everywhere in the news and Internet. Everyone was just waiting to see what new eccentric behavior he was going show at any given time or day.
And here in my contracts class, we were actually talking about his legal issues. For me, it made the concepts we were learning more real. Conditions as defined by Restatement (Second) of Contracts, Section 224 made more sense to me. Conditions were no longer just words that were only used in law school academia.
I feel like many of the law students who will read Professor Cunningham’s contracts book will find it easier to follow the parties who are involved in the cases. Sometimes the biggest obstacle in understanding a case and what it is about is just being able to follow who the parties are and thus why they are in court. In using cases that involve people and stories we as students are familiar with, the materials make it easier for us to grasp the concepts and laws the courts are using to resolve breach of contract cases.[Posted by JT]
Aside from the deeper theoretical questions that Prof. Cunningham raises about contract theory in Contracts in the Real World, the heart of the book is in its fun, rollicking, and thoroughly modern examples.
Every contracts professor should take a look at this book to glean ideas for real-world examples and hypotheticals. Even if your textbook is stuck in the world of itinerant homesteaders, ships using astrolabes for navigation, and delayed industrial components (shout out to Kirksey, Raffles, and Hadley v. Baxendale!), your students will appreciate the use of some fun celebrity stories to liven up the classroom discussion.
The last time that I taught Contracts, for example, I did a series of hypotheticals based on Charlie Sheen’s contractual troubles. Based on Prof. Cunningham’s materials, I was able to structure some hypotheticals based on Sheen for my unit on conditions. The students seemed to appreciate it, and in fact, I have asked a student from my class last year to share her impressions with our blog readers. It appears here.
[Posted by JT]
Erik Gerding is an Associate Professor at the University of Colorado Law School
Let me start out with a criticism of Larry’s book: it is too much fun. I had a hard time breaking off just a chunk of Contracts in the Real World to write about and found myself spending several hours reading one interesting vignette after another on famous and infamous contracts.
The book will make a wonderful companion text to a traditional contracts casebook. Its value is not just in its engaging account of contract stories or in giving context to chestnut cases, but in providing a very intuitive framework for understanding contract law. The traditional contracts course, perhaps by virtue of having the doctrine of consideration at its heart, can be one of the most confusing in the One-L year. Students are often left to divine the inner structure (or lack thereof) of contract law on their own, likely while cramming for finals. Sometimes the epiphany comes. For many students it does not.
Larry has a real genius for laying out the doctrinal building blocks in a very thoughtful and accessible structure. He groups cases around a rough life cycle of contracts, with chapters devoted to “Getting In: Contract Formation,” to “Facing Limits: Unenforceable Bargains,” to “Paying Up: Remedies.” The layout of the book combined with its lucid writing demystifies contracts.
The layout may at first appear to make this book an ill fit as a companion text to many case books, because many of the cases appear in Contracts in the Real World under a different doctrinal heading than in a particular case book. For example, in the case book I currently use Batsakis v. Demotsis appears in the chapter on “consideration.” Larry places this classic next to cases on unconscionability. I also teach Lucy, Lady Duff Gordon in consideration, while Larry situates it in “Performing: Duties, Modification, Good Faith.”
These differences actually demonstrate a strength of the book. Some disconnect between the organization of a primary case book and a companion text forces students to move beyond a facile understanding of contract law in terms of rigid doctrines. Seeing cases in different contexts and fitting into different doctrinal boxes can help students see that lawyering involves more than memorizing black letter rules and putting issues into the right doctrinal box. Indeed, sometimes different doctrinal boxes can apply to the same problem and lead to the same result (witness rules on past consideration and duress). At other times, the choice of the doctrinal box makes a huge difference (see those same two doctrines). Accomplished students can move from memorizing blackletter law to seeing the possibility of creative lawyering. Larry’s organization – both intuitive and surprising – will help students at both stages.
One final strength of the book is Larry’s choice to include not only court cases but many contemporary contract disputes that never reached the courtroom (such as the dispute between NBC and Conan O’Brien). This brings into the classroom a wider panorama of how lawyers encounter and shape contractual problems in practice. After all, few contracts and few lawyers find their way into a courtroom. Most disputes are resolved in the shadow of law.
I also have a wish list for Larry’s next project (from personal experience, I can tell you how invigorating it is for an author who has just finished a book to be asked “what’s next?’). One of the limitations of the traditional contracts curriculum is how rarely students read and interpret – let alone negotiate or draft – actual contracts. It would be incredibly helpful as a professor to have some of the source contracts behind these stories. Although some of these contracts are already contained in a judicial opinion (Carbolic Smoke Ball) and many will not be public (Conan’s deal with NBC), others might be available with some digging. Having real and full contracts would allow professors to meet many of the items on Professor Collins’ wish list, such as transactional perspectives and drafting exercises. Although some lawyers litigate over failed contractual relationships, many more help parties plan prospectively – including by drafting and negotiating deals. For most attorneys, contracts are not an autopsy subject, to be dissected in a court opinion, but a living thing.
Professor Cunningham’s book provides a joyful reminder of the life in contracts.
[Posted by JT]
Thursday, October 4, 2012
The United States District Court for the Southern District of New York recently awarded a partial win to the Estate of Mario Puzo (author of the popular novel “The Godfather”) when it denied Paramount Pictures Corp.’s (Paramount) motion to dismiss the Estate’s breach of contract counterclaim, which Paramount claimed was preempted by the Copyright Act. The win was indeed partial in that the District Court dismissed the Estate’s remaining counterclaims. The issue at the heart of the parties' dispute, whether book publishing rights to all sequels were among the rights that Puzo sold to Paramount, was not before the court on Paramount’s motion to dismiss.
The Estate's breach of contract claim is based on a 1969 Agreement between Puzo Sr. and Paramount, (the details of which we recently blogged about here), through which Paramount claims that Puzo signed over all publishing rights regarding any sequel to “The Godfather.” Based on some language that the parties left out of the 1969 agreement, the Estate reads Paramount's rights more narrowly and alleges that Paramount repudiated and breached the 1969 Agreement when it interfered with rights allegedly reserved in the Estate. In fact, the District Court noted, the Estate is seeking to characterize as repudiation conduct that simply contradicted the Estate's narrow reading of Paramount's contractual rights. Under New York law, such conduct does not constitute a repudiation unless a party advances an untenable contract interpretation in order to avoid its contractual obligations. The Court hinted that there was no evidence that Paramount had ever sought to escape its contractual obligations and thus seems to have tipped its hand that it sees no merit in the Estate's breach of contract claim. However, as Paramount did not move to dismiss on that basis, the court moved on to the preemption issue.
The District Court rejected Paramount's argument that federal copyright law preempts the Estate's breach of contract claim. The elements required to prove the Estate’s claim differ from those needed to establish copyright infringement. Instead of proof of a valid copyright and copying of protected elements of a copyrighted work, the Estate must establish that Paramount had a contractual obligation not to interfere with its exercise of book publishing rights and that Paramount breached that obligation. Moreover, the Court pointed out, “a copyright is a right against the world,” providing for exclusive rights in the holder. In contrast, the Estate’s claimed right is one that creates a potential liability in Paramount if it should breach. Everyone else can do as they please.
In sum, because the Estate’s claim focuses on a contractual obligation outside federal copyright law, it is not preempted and Paramount’s motion to dismiss the Estate's breach of contract claim on that basis was denied.
[Christina Phillips and JT]