Friday, April 17, 2015
I'm going to keep this one brief and provocative.
Six years ago, when Law School Transparency (LST) came into existence, law schools had some problems with transparency. The problems were not actionable. As Michael Simkovic details here and elsewhere (and I will have many more positive things to say about Simkovic's and Frank McIntyre's scholarship in later posts), law schools have always disclosed employment outcomes in accordance with federal Bureau of Labor Statistics categories of employment and unemployment. Now, all law schools include on their websites 509 disclosures that are far more detailed about employment outcomes, as well as lots of other useful information about bar passage rates and the scores of incoming students (new 1Ls only, alas).
The fight is now mostly over debt loads, but again, as Michael Simkovic puts it:
Data from the U.S. Department of Education shows that law students, even at low ranked law schools, remain much less likely to default than most student borrowers. This is true even though law students typically graduate with higher debt levels.
While student debt loads are a huge concern, law students still are not defaulting on their loans.
So, at this point what exactly is the purpose of LST's campaign against law schools?
LST's website identifies its goals as Reform, Information and Accountability. I would say that LST has succeeded on Information and Accountability. Don't take it from me. Here is what Deborah Merritt, who has been quite critical of Simkovic and McIntyre, has to say on the subject:
[T]oday’s law schools publish a wealth of data about their employment outcomes; most of that information is both user-friendly and accurate.
As to LST's main claim on Reform: "American legal education is broken because it is systematically unfair and unaffordable," LST and I will have to agree to disagree. Still, two out of three ain't bad. LST can take credit for having contributed to an environment in which law schools are forced to provide information about student outcomes in a way that really helps students make more informed decisions about whether to go to law school or whether to choose a particular school.
Congratulations, LST. You've won. You've done some real social good. You and others have persuaded college graduates not to go to law school. Unfortunately, that might not be good advice, since Simkovic and McIntyre's research shows that students who go to law school are, on the whole, better off for having done so.
So you can now declare victory and move on to larger projects. Why not use your model to attack other sectors of the economy that, when compared with law schools, are much less transparent, much more important, far less inclined to self-criticism and far more resistant to outside calls for change?
Wednesday, April 15, 2015
Friday, April 3, 2015
In New Zealand, a ban on unfair terms in consumer contracts has taken effect and will, according to the Commerce Commission, will be enforced starting immediately. The regulation forms part of the 2013 Fair Trading Act. Australia introduced a similar ban in 2010.
The Consumer Organization “Consumer NZ” has launched its “Play Fair” campaign to increase awareness of the new law and related consumer issues. According to Consumer NZ, companies had been given plenty of notice of the upcoming ban and thus to review their contracts in order to remove unfair terms, but had to a large extent failed to do so.
The Act will apply to standard-form consumer contracts often used by electricity retailers, gyms, TV service providers and many others.
But what makes a term “unfair”? The Act defines a term as unfair if it would “would cause a significant imbalance between the rights of the company and the consumer, is not reasonably necessary to protect the legitimate interests of the company, [or] would cause detriment, whether financial or otherwise, to the consumer if it were to be applied or relied on.” The Act contains a list of terms that courts are likely to regard as unfair. This covers terms that would allow a company to unilaterally vary the terms of the contract, renew or terminate it, penalize consumers for breaching or terminating the contract, vary the price without giving consumers the right to terminate the contract, or vary the characteristics of the goods or services to be supplied.
After intense lobbying by the insurance industry, that industry was exempted from the ban.
Even though this Act is a consumer protection device, only the New Zealand Commerce Commission can, for now, enforce it. The contemplated fine for violations is $600,000.
In the USA, there are, of course, various statutory and common law protections against unfair terms such as those contained in the UCC as well as fraud protections. However, the deterrence effect of these does not seem effective in relation to at least some industries. Alternatively, perhaps the protections are not broad enough, sufficiently well-known, or sufficiently easy to enforce. Or perhaps people just give up and deal with other companies, or pay what they are asked to do by the companies.
I personally just spent no less than two hours chatting online with a major health care provider over their sudden allegation that a certain doctor I had used was “not in network” (with me thus allegedly owing a few thousand dollars to the insurance company) despite that particular provider being listed on the provider’s own website as “in network” and the doctor having confirmed this. Eventually and after numerous contractual and factual arguments, I was able to persuade provider that I was right. But how many others in my situation would simply give up and cave in to, as was the case, the provider’s repeated bootstrapping arguments that “their ultimate price was fair”?
Only two days later, I heard from a moving company that had agreed to move a car for me for $500 (and confirmed this twice) that the “price is actually $600.” When I told them no, it is not, they repeated their allegation that “we did not have a contract.” After telling them a few things about contract formation and modification principles and after declining listening to their attempted, time-consuming warnings about using other companies that were “scam artists,” I am now looking for a new contract another vendor.
Despite whatever legal protections we may officially have in this country against consumer fraud, it is still rampant. New Zealand’s government enforcement system is interesting, but time will tell if they have more success preventing consumer fraud than we do here.
Thursday, April 2, 2015
I just saw the Goodman Theater's production of August Wilson's Two Train's Running. It is a great play, and this is a first-rate production in every way. One character, Hambone, is a reification of contracts injustice. Hambone painted a fence for an offstage character, Lutz. Lutz promised to pay Hambone a chicken for his work and a ham if Hambone did an especially good job. Lutz paid Hambone a chicken. This occurred nine years prior to the action in the play. Hambone's lines in the play consist almost entirely of "Give me my ham!" and "He gonna give me my ham!" At one point, another character teaches him some additional slogans like "Black is beautiful," but Hambone is never too far from his mantra, as the aggrieved non-breaching party.
Although the play never references R.2d § 228, we are clearly in the realm of conditions of satisfaction. Hambone's entitlement to the ham should have been determined on an objective basis. All of the characters in the play seem agreed that, were such a standard applied, a finder of fact would certainly award Hambone a ham. But Hambone is Black, poor, and ill-equipped for a legal battle. Lutz is white and so powerful that he is able to define Hambone's character without ever suffering the indignity of appearing on stage.
Does Hambone ever get his ham? I don't want to give away too much so I will just say, yes and no.
Monday, March 30, 2015
Earlier this month, Los Angeles-area media reported a somewhat humorous of a valet service that gave away a relatively expensive new car to a random guy claiming that he had "lost the [valet] ticket." Yup, the valet service actually just gave the car to the man who was sporting an Ohio state tattoo. (Of course, this story is not funny for the frustrated car owner).
But wait, the story gets weirder than that (it is, after all, LA, where we worry a lot about our cars...): the valet service sent the responsible employee home and referred the customer to his insurance company. Initial reports indicated that the insurance company did not want to pay for this loss as no theft had occurred... as is always the case, however, the media did not follow up on the end of this story, to the best of my knowledge.
Another valet contract that you must read and that was shared today on the AALS listserv for Contract Professors reminded me of this story. Hat tip to Professor Davis!
Valet companies may have to brush up on their contract writing skills soon...
Thursday, March 26, 2015
Some weeks ago, I blogged here about water rights and shortages in drought-ridden California. Of course, California is not the only state where contractual water rights interface with development and public health concerns.
In Ohio, shale driller Gulfport Energy recently filed suit against the town of Barnesville for rights to extract water for Gulfport’s fracking operations. Gulfport had a contract with Barnesville entitling it to draw water from a local reservoir at one cent per gallon. Under the contract, Gulfport would be able to draw the water unless the village determined that such action would endanger public health. Water rights were subsequently also issued to another driller. In the fall of 2014, the village told Gulfport to stop drawing water from the reservoir because of too low water levels. Gulfport’s suit now asks for adequate assurances of performance of the water contract to ensure that it can continue its fracking operations.
Whether that is a good idea is another story. From a short-term perspective: yes, we need energy preferably domestically sourced to avoid international supply interruptions and the geopolitical problems that are associated with importing energy raw materials. But fracking and fossil fuel production in general are associated with other severe problems including heavy water usage in the case of fracking. Such water, the argument goes, is better used for other things such as farming and household consumption.
Business as usual for fracking companies may not be the best idea seen from a societal point of view. Contracts rights are only a small part of this much bigger problem. However, time seems to have come for governments to incorporate escape clauses not only for “public health concerns” into water contracts, but also for drought concerns. This is not always done, as the above case shows, but such a relatively easy step could help solve at least some contractual disputes. In times of increasing temperatures and decreasing rainfall in some areas, such contract drafting may well make sense.
Today's New York Times reports that Microsoft will require the companies with which it partners, its contractors and vendors who employ more than 50 workers, to provide their employees who do work for Microsoft with 15 days of annual paid sick leave and vacation time. Microsoft expects that it will have to increase its pay to these partners to help them with the added expense of the policy.
As the Times points out, it is a very American approach to the protection of workers' rights. Congress will not act and only a few state legislatures have done so. Microsoft, like other large technology companies, can afford to provide decent wages and benefits to its workers. However, companies increasingly prefer to contract work out to small companies that do not treat their workers nearly as well.
The Times notes that the gap is not only between skilled computer programmers and unskilled or semi-skilled janitors or groundskeepers but also between whites and African Americans and Latinos. While the latter, traditionally-underrepresented minorities account for our 3-4% of tech workers, they account for 75% of janitorial and maintenance workers. Eschewing Google's and Facebook's approaches of replacing contract workers with its own employees, entitled to company benefits, Microsoft has explained its move in a manner also consistent with the great American tradition of enlightened self interest. Microsoft general counsel explained that: 1) happy workers are more productive; and 2) sick workers who come to work can infect others.
This move can have a big impact, especially if other major companies follow Microsoft's lead, but I'm not sure that the effects will all be good for workers. If a contractor has some workers that work for Microsoft and some that don't, the Microsoft jobs suddenly become highly sought-after. A company may try to stay below the 50-employee threshold to avoid the private regulation. Or it may divide Microsoft work among its staff (in the interests of internal morale), which might dilute the effects of the regulation. If you do only 20% of your work for Microsoft, do you only qualify for three days of vacation/sick leave? It may take a few years (and a few contracts disputes) to work out the kinks.
Thursday, March 19, 2015
The problem with constructive consent, or substituting "manifestations of assent" for actual assent, in consumer contracts is that consumers often aren't aware what rights they've relinquished or what they have agreed to have done to them. Too bad for consumers, right? Well, it's also too bad for companies. Companies that rely on contracts to obtain consumer consent may find that what suffices for consent in contract law just won't cut it under other law that seeks actual consumer consent. Michaels, the arts and crafts store chain, found that out the hard way. They were recently hit with two class action lawsuits alleging that their hiring process violates the Fair Credit Reporting Act (FCRA). Job applications clicked an "I Agree" box which indicated "consent" to the terms and conditions which authorized a background check on the applicant. As this article in the National Law Review explains, the FCRA requires that job applicants receive "clear and conspicuous" standalone notice if they are seeking consent from applicants to obtaining a background report. A click box likely won't (and shouldn't) cut it. Contracts that everybody knows nobody reads shouldn't be considered sufficient notice. It would, of course, be much simpler if contractual consent were more aligned with actual human behavior....
Monday, March 16, 2015
The New York Times reported yesterday on the rise of a new type of non-disclosure agreement in connection with home construction. Basically, rich people associated with the tech industry are making everyone who works on their homes sign sweeping non-disclosure agreements.
Times reporter Matt Richtel posed a number of questions to workers outside a home that, court documents from a different case reveal, is being renovated for an undisclosed Facebook executive (pictured). He was able to extract only answers like, "I'm an electrician working on a house." As to which house, workers would gesture towards a neighborhood and say "one of the ones over there." But the mystery was not too difficult to solve, as workers swarmed "like ants" on the home, and they have been working on it for two years.
Matt Richtel does a great job highlighting the irony of the situation. He quotes Facebook founder Mark Zuckerberg, commenting on Facebook's privacy policies, as follows: “People have really gotten comfortable not only sharing more information and different kinds, but more openly and with more people.” And yet, in correspondence disclosed in the other case referenced above, Mr. Zuckerberg's attorney wrote, "Mr. Zuckerberg goes to great lengths to protect the privacy of his personal life.”
There is no necessary contradiction between Mr. Zuckerberg's desire to maintain his own privacy and his belief that other people choose not to protect their own. But Facebook has been pretty aggressive in eroding privacy, in part through a libertarian paternalism in which all the default choices lead to a surrender of privacy, or through extracting waivers of privacy rights by contractual means that do not rise to the level of meaningful, knowing consent.
So yeah. This is ironic.
Friday, March 6, 2015
The always excellent Bob Sullivan recently wrote a post on his blog about the nastiness that resulted from Curt Schilling's proud daddy post. (The nastiness is seriously nasty). As Sullivan points out, and which I've argued here and here, online companies like Twitter have a business responsibility to make sure the services they offer are safe. Online, of course, everything turns into a debate about free speech, even when the so-called speech is obviously obscenity (and please, don't argue with me about this one - if you saw the tweets, you would agree that a "reasonable person" would think they were obscene) and even though the billion dollar companies are not state actors. The problem is that Section 230 of the Communications Decency Act has been construed very broadly by courts to protect websites like Twitter from liability for content posted by others. That gives these companies little incentive to invest resources into policing their sites. But as Sullivan notes, if they don't start to clean up their sites, people might start leaving in droves.
So what should businesses do? One thing they could do is start taking their contracts seriously. We are all familiar with clickwrap and browsewrap agreements that nobody reads. They often contain codes of conduct or, in the case of Twitter, "content boundaries." Companies can start making these agreements more readable and salient. They can start by actually enforcing them. For example, Twitter can enforce their content boundaries by kicking users off the site or charging them a fine for violating the rules (maybe after a warning) which may help defray the costs of policing the site....They can also design their contracts so they are more readable and post a "warning" that abusive tweets will be subject to a fine or suspension and force users to "click" to acknowledge they have read the warning. I suspect that many who tweet impulsively later regret it so a warning at point of posting/sending might make some think twice.
I realize that hiring people to evaluate each reported post might take time so that the best solution would be software that flags certain posts and sends a warning to the user to reconsider the post. It could also contain a reminder that the user will be liable for damages if the tweet is defamatory. All this scary stuff is in the contract - but because it is contained behind a hyperlink, few users will actually read it. An email delivered to the users, reminding them of their contractual obligations and the scary things (public condemnation, suspension or expulsion from the site, liability for lawsuits, maybe even criminal prosecution if the tweet is threatening enough) that might happen to them if they violate these obligations, might be more effective. Some users may voluntarily take down the post in response to the automated email which may cut down on the number of tweets subject to human review.
Of course, contracts can only do so much, but they might help.
Thursday, March 5, 2015
The official portrait of former President Bill Clinton has been completed. See it here. It was painted in the “conservative realistic style” … maybe a little too realistic and not sufficiently conservative?
According to the artist, Nelson Shanks, the bluish shadow of a person that you see on the mantelpiece next to Clinton is that of Monica Lewinski in her infamous blue dress. You got that right: the artist himself has admitted that he purposefully scarred the picture just as the Lewinsky scandal scarred Clinton’s second term. The artist has apparently caught quite some flak for having done this. Regardless of artistic freedom and setting aside all thoughts about the scandal per se, what is, after all, at issue here is a contract for artwork depicting a former President of the United States of America. A bit more respect may have been in order. This was not any regular client having a portrait done; it’s in effect the entire nation that commissioned this work. Perhaps a subjective satisfaction clause would have been in order here. Even if it had been any “regular” client, deliberately depicting one’s paying client in a highly controversial light seems to me to be in questionable taste.
On the other hand, the argument has been made that if the artist had been held to certain contractual stipulations, the portrait of the 42nd President would have been “stiff and untrue.”
That’s not the case? Take a look and judge for yourself. While much has been made of Clinton holding an actual, gash, newspaper – so retro – the strange positioning of his fingers on his hip looks more bizarre to me. An indication of his alleged two-sided look at what constituted “the truth” in certain contexts? To me, it looks more like the V sign for, perhaps, Clinton’s ultimate victory over at least some of the political and other challenges he faced.
Tuesday, March 3, 2015
Last year, Starbucks announced a new corporate-supported educational program that one year later is still viable: Starbucks will reimburse its full-time workers for taking online classes with Arizona State University. Partial tuition (58%) will be offered to freshmen and sophomores and full tuition for juniors and seniors as long as credits are earned within the past 18 months so as to keep students on track.
As you may have noticed if you are a Starbucks customer, very many of its employees appear to be college-aged. In fact, 70% of Starbucks’ workforce are either in school already or have had to drop out because of various personal difficulties.
This program seems to be a benefit to employees who cannot afford to go to school full time (or even part time), but who desire and education. What is remarkable is also how few “strings” are attached to the program. For example, the employees do not even have to stay with Starbucks after the completion of their degree. Said CEO Howard Schultz (still the CEO): "We want to attract and retain great people. We want to provide [our employees] with new tools and new resources to have advancements in the company.”
What is in it for ASU? This has been said to be a coup for the university, which already has one of the nation’s largest and most highly regarded online programs. Of course, Starbucks has a large amount of employees with, presumably, many coming and going, so ASU now has access to a large database of potential students, something many universities – private and public - are craving in these competitive times.
For the students and the university, rates may be discounted. This is normal in this type of situation. What would truly make a difference would be if the rates could become so reduced for students that they would, in effect, have no out-of-pocket costs altogether.
What, to me, is interesting about this situation is that a public university has found out workable model for online classes and cooperation with a private business venture when many private universities have not.
The somewhat strange catch here is that ASU cannot enter into any other arrangement with a for-profit business for four years, but that Starbucks is free to advertise its partnerships with a few other schools.
See the contract at issue here.
See Starbucks’ description of the program here.
Tuesday, February 17, 2015
I've been away from the submission process for a few years. In the meantime, Scholastica has entered the picture, which from an author's view is simply an expensive headache, and more journals are encouraging authors to submit directly through either e-mail or their own online submissions process.
Having been a historian before becoming a law professor, I am still grateful for the advantages of student-edited law journals and authors' ability to submit to scores of journals simultaneously. I still believe that this process is better for authors and not significantly less arbitrary that double-blind peer review. Lots of scholarship gets published that does not end up getting used or cited under both systems, but the peer review process banishes lots of possibly meritorious scholarship to the dung-heap of history based on the opinions of two people whose reasoning might be insufficient to justify such a heavy penalty.
That said, I do find a new feature of online submission processes disquieting. At least one journal that encourages authors to submit through their online submission form features a Submission Agreement that includes a link to a separate page containing the journal's "attribution and usage policies." The latter are incorporated by reference, and thus one must agree to them in advance before submitting the article. There is nothing particularly onerous in the Submission Agreement or the usage policies, but the problem is that authors submit to dozens or scores of journals. The journals cannot really expect authors (or their administrative assistants who submit on their behalves) to read through boilerplate terms. So there we have it -- forms that purport to bind law professors to terms to which they have not meaningfully consented. This is especially ironic if, like me, you have been writing about the dangers of form contracts and the degraded version of "consent" in this context.
The practice is especially irksome as the submission process does not otherwise involve a contract. When I submit my article to multiple journals for publication, I am submitting an invitation for offers. I have no obligation to the journals, and they have no obligation to me. They don't even have to read my piece before rejecting it, nor do they have to respond in any way to me. And if they do offer to accept my piece (which, note, is typically described as an "offer to publish" not as an "acceptance"), I can reject that offer and go merrily on my way.
The introduction of form contracts at the submission state -- a point at which the parties have no legal relationship -- is simply unnecessary.
Monday, February 16, 2015
Back in 2013, we mused about the seeming disconnect between public outrage at NSA data mining and the lack of comparable outrage with respect to private data mining. Nancy Kim and I have been writing in this area, and a recent report in the ABA Journal provides additional fodder for our scholarship.
One of the things that makes television's "smart" these days is that they have the ability to respond to voice commands. If you have this feature on, the television transmits your information to a third party, according to Samsung. If you turn the voice recognition feature off, your television still gathers the data but it does not transmit it.
Thursday, February 12, 2015
This year, I am teaching a bar preparation course on contracts, which is being offered for the first time at my Law School. This is a lot of fun for me -- I like teaching contracts both semesters because it keeps my mind more focused on the subject. It's also fun to teach the material in a different way -- no cases, as some familiarity with the case law is assumed at this point, so I just give mini refresher lectures and then move on to the homework assignment.
So it's fun, but it's also a lot of work. I give my students four multiple choice questions each day, and they have to turn in their answers -- explaining why the right answer is wrong and the wrong answers are wrong. The idea is to both solidify their understanding of the doctrine and alert them to the strategy behind bar exam "distractors" -- that is, wrong answers that are trying to trick students into mistaking them for correct answers. Most days, they also have to write a short essay, designed to be akin to MEE questions.
Because I am teaching such a course myself, I read with some interest David Frakt's recent post on The Faculty Lounge on the value of in-house bar prep courses. But I was taken aback by the comments. The anonymous or pseudonymous commentators asked the following rhetorical questions:
- Does bar prep make students better lawyers?
- What good is passing the bar when there are no jobs for lawyers anyway?
- Don't law schools have an obligation to refrain from flooding the market with unemployable lawyers?
I think this is a case of massive anger that is massively misdirected. Students are in law school. They want to stay in law school and they want to become lawyers. I have met with many students facing dismissal from my Law School for poor academic performance. The ones I have spoken to all are willing to do whatever it takes to stay in, and they are furious with us when we dismiss them. So we put the time and the energy into bar prep courses because it is what our students need. Some of them need it because they won't do the work without the additional kick in the pants. Others need it because they have many natural gifts that will make them great lawyers, but excelling at standardized tests is not one of them. We are trying to get them over that hurdle so that they can have the careers for which they are otherwise qualified.
I certainly understand the anger of the unemployed law students. I was an unemployed Ph.D. before I went to law school. I know what professional devastation feels like. It seems like the "Law School Scam" crowd thinks the solution is to just shut law schools like the one I teach at. But how would throwing me, my colleagues, and our support staff out of work improve the situation? It certainly would not improve things for the students we serve, most of whom pass the bar, find work, and do better than they would have done without their degrees. Law school opened for me a range of career options that would have been completely unthinkable without my J.D. Why should that opportunity be denied to the current generation of potential law students?
Wednesday, February 11, 2015
Property development is often considered a way for local communities to earn more taxes and evolve with times in general. But when construction and other development is approved in geologically risk areas such as flood zones and things go awfully wrong, is this a mere property and contracts issue, or may criminal liability lie?
In France, the answer is the latter. The former mayor of the small French seaside town La Faute-sur-Mer was just sentenced to jail for four years for deliberately hiding flood risks so that he and the town could benefit from the “cash cow” of property development, a French court has held. His deputy mayor received a two-year sentence in the same plot.
In 2010, the cyclone Xynthia hit western Europe and knocked down seawalls in the French town, leading to severe floods and 29 deaths.
Wait… a cyclone in France? Yes. Climate change is real and it’s here. Unless we do something about it (which apparently we don’t), things will only get worse. As on-the-ground steps that could prevent extreme results such as the above are often simply ignored or postponed while more and more research is done and money saved at various government scales, lawsuits will necessarily follow. The legal disciplines, including contracts law, will have to conform to the new realities of a rapidly changing climate. For starters, we need to seriously question the wisdom and continued desirability of constructing more and more homes in coastal and other flood prone areas. Ignoring known risks is, well, criminal.
Monday, February 2, 2015
We have had quite a few posts about Uber, Lyft and other ride-sharing services, but they just keep popping up in the news, and the wrinkles are always unexpected and fascinating. Saturday's New York Times reported that the companies allow drivers to rate their passengers. If you get a bad rating, you'd better hail a cab or [shudder] take public transportation. It's not such a strange thing to be rated by a service-provider you pay, the Times point out. After all, students pay tuition to attend law school, and yet we grade them. But of course, students know that going in. Probably most passengers don't expect to be rated. What a wonderful century we inhabit -- so many opportunities to pass judgment on perfect strangers!
And what sort of behavior will get you a bad rating? It may be simple things like asking the driver to turn the heat/air conditioning/radio up or down. One rider expressed her angst about being thought insensitive or lacking in interpersonal skills if she took a call or did work while riding. Even Uber's CEO, one of the few riders with access to his own rating, was downgraded from five stars as a passenger to four. He attributes the lackluster reviews to work stress. He blames himself. "I was not as courteous as I should have been.” He should watch out. You can be banned from Uber, which siad in a blog post that it only wants to serve "the most respectful riders."
The article suggests that two-way review systems are inevitable, even though they may be inaccurate. A comparison of a site that allowed two-way reviews with one that allowed only one-way review found that the two-way system leads to far more positive reviews.
What goes around comes around. I would not put it past these companies to monitor their drivers' ratings of passengers. The company may find its own ways to retaliate against drivers who complain about passengers who do nothing more offensive than behaving like busy people who are getting a ride from a stranger as part of a commercial transaction.
Sunday, January 25, 2015
An Ohio appellate court upheld a $1.2 million breach of contract judgment against Kent State's men's basketball coach, Geno Ford. The judgment enforced a liquidated damages clause entitling Kent State to damages equal to Ford's annual salary ($300,000) multipled by the number of years remaining on his contract at the point of breach. In Kent State University v. Ford, Coach Ford tried to characterize the liquidated damages clause as a penalty. The court applied Ohio law to determine whether at the time the contract was entered into: 1) damages were uncertain; 2) the damages provided for in the contract were not unconscionable; and 3) the parties intended for damages to follow a breach. The court upheld the trial court's determination that the standard was satisfied in this case. Coach Ford can take consolation in the fact that his salary is short of Jim Harbaugh's by an order of magnitude.
PetaPixel.com reports on a wedding photographer who, after charging a couple $6000 to shoot a wedding album, sought an additional $150 for the album cover. The couple balked, so the photographer is refusing to hand over the photographs and is threatening to charge them an additional $250 "archive fee" if they do not pay up in a month. PetaPixel draws the following lesson from the story:
This all goes to show that as a photographer, you should never rely on verbal agreements when it comes to conditions and charges. Always get everything in writing.
Maybe. The photographer herself has an extremely lengthy blog post about the entire affair in which she claims that everything should have been clear from the written contract. PetaPixel's story makes it seem like an additional charge was added after the contract had been entered into, and if that's the case, the couple might well have balked whether or not the new terms were in writing.
Contracts Prof/Con Law Prof Randy Barnett, writing at the Volokh Conspiracy picked up by the Washington Post, muses interestingly on the applicability of the contractual duty of good faith to the President's duty to faithfully execute the laws in the Constitution's Take Care clause. This helps Barnett reconcile his empathy for the President's refusal to enforce federal drug laws in the face of permissive state laws permitting use of marijuana with his opposition to the President's new initiative on immigration. I've never been persuaded that the contractual analogy is particularly useful in Constitutional interpretation. Suggesting that the contracts doctrine of "good faith" provides a useful gloss on the Take Care clause strikes me as a stretch, but Professor Barnett is always stimulating.
Friday, January 23, 2015
We know that merchantability means passing without objection in the trade. If law review articles were goods, what would that trade be? For law professors, it seems like it is second and third year law students. At some level it would also reviewers of works when a professor is considered for promotion. Recently, though, a colleague of mine and I did a bit of research and began to wonder if acceptable in the trade -- as defined by law students and law professors -- is a meaningful strandard within the trade of academia.
Law professors who do research are generally spending the money of others. The actual buyers are, therefore, those who pay for the scholarship. Let's add that they have no idea what the standard is but would uniformly agree that every article should make someone or something better off and should reflect high quality research. Students and reviewers should be regarded as agents for those paying the bills.
If that is the measure of merchantability (and why wouldn't it be) then editors and reviewers should apply that standard in their own decisions. Clearly they do not and left to their narrow and inappropriate standard for merchantability we have massive amounts of scholarship that, let's face it, is written to justify being granted tenure. There is little verification that most, no matter how carefully done or clever, actually benefits anyone. Some of it -- a small percentage -- is cited but rarely for the substantive points made as opposed to piggy-backing on a fact asserted in the first work. Morever the research is often sloppy. Here is an example. I recently read an article that makes the claim that a certain area of law is now consistent with empirical studies. I looked at the cite and it was to another professor who had not actualy done any empirical work and did not quite say what was claimed. And the work cited by that professor was not on the point made in the first article. In fact the most frequent cite is the hearsay cite in which the author makes a claim because someone else made the same claim.
I expect readers of this will disagree but shouldn't the test of merchatability mean making someone or something (even if a fish) better off and shouldn't documentation be careful and accurate? Don't misunderstand, much of scholarship meets these standards. But much of what currently passes in the trade without objection does not.
Monday, January 19, 2015
I recently came across an article by Professor Sidney Kwestel that has many good and interesting things to say about the UCC's famous battle of the forms section, 2-207. However, Professor Kwestel suggests the UCC § 2-207(2)'s "knock out rule" cannot be right because it violates "a basic contract concept--that the offeror is the master of the offer."
I've always understood the "rule" that the offeror is the master of the offer to mean only that: (1) the offeror is free to revoke the offer at any time before acceptance; and (2) under the common law, the offeror can treat any purported acceptance that is not a mirror image of the offer as a rejection of the offer and a counteroffer. In my view, the notion is hardly a "basic concept." It's more like a slogan. You think you are the master of your offer. Big deal. I'll make you a counteroffer. Then I'm the master. Oooh la la.
Professor Kwestel thinks it absurd that an expression of assent could operate as assent to some terms but not others. However, the result is worse for the offeror under the common law. Under the last shot rule, the counterofferor's terms do not just knock out the offeror's terms, they replace them. Since the UCC's version of the battle of the forms eliminates both the mirror image rule and the last shot rule, it reduces the slogan to its first meaning -- it only permits revocation at any time before acceptance. The result is much more even-handed as to whose terms govern, and I count that as a win.
Certainly there are problems about what to do with different terms under § 2-207, and Professor Kwestel's article is very good about illuminating the difficulty navigating between the text of the section and the reporter's comments. While I can easily concede that it has its flaws, I think the problems with the knock-out rule are more textual than conceptual.