ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Tuesday, December 8, 2015

Out with the Smart Aleck Professors, In with the Party Loyalists

A few days ago, I blogged here on an attempt by some university professors in California to unionize and to obtain better pay and working conditions in general.

In China, university reform is also underway, but, at least in part, with a much more troublesome intent and potentially dire effects for the nation and the world.

The Guardian reports that China’s education minister has vowed to “drive smart alecks, dissenters and thieves” from the country’s university classrooms. This is part of a wider anti-corruption campaign launched by President Xi three years ago.

The alleged misconduct ranges from action that seems reasonable (firing university leaders for filing fake expense reports and taking bribes from students) across the pitiful and almost laughable (punishing senior university officials for engaging in illicit acts of “hedonism” by, for example, driving luxury cars) to the outright shocking and extremely troublesome, seen with Western eyes. For example, several university chiefs have been toppled for “flouting Communist party rules.” Attempts are made to ban books that attempt to spread “Western values.” The education minister has also called for “greater political screening of academics before they are hired” and is worried that “enemy forces” are attempting to “infiltrate university campuses” in order to “turn young minds against the party.”

Liberal academics claim that the discussion and study of sensitive topics has generally become increasingly difficult under the leadership of President Xi.

All this is indeed very troublesome indeed. However, before we roll our eyes too much at these serious Chinese events, let us just remember that the United States academic world is far from perfect either. Recall, for example, the recent defunding of various law school and other university clinics on East Coast campuses for, at bottom, being too liberal and assisting the lower class in obtaining better pay and working conditions. A former senior faculty colleague personally told me once that one of my papers on (are you ready?) climate change was almost “too political” in Orange County, California. The article discussed mainstream factual aspects, including business and investment issues, of climate change that are now, just a few years later, being discussed in Paris by all media, including conservative outlets. Recently, numerous attempts at diversifying college campuses across the nation have shed light on potential elitism and racism in American universities. Nope, we are far from perfect ourselves. But when an entire nation deliberately and officially seeks to censor learning processes, there is indeed cause for alarm.

Last year, I had the great honor, joy and privilege of teaching international environmental law at a prime Chinese university. I brought up such “sensitive” topics as public participation in government law- and decision-making, climate change, and trade in endangered species. I was videotaped doing so (this is normal practice in China). I was also not invited back this past summer. Maybe my teaching is simply no good. Maybe more senior and “famous” lecturers were chosen.   I cannot blame the university for doing so at all. I know that I have a lot with which I can contribute to any educational institution, but I also bow to and honor the many experienced, learned and very well published colleagues on the “market” these days. However, hate to think that I was, perhaps, censored away. I don’t think that is the case. If it was, then I am nonetheless happy to have at least contributed with a few provocative, Western thoughts. Perhaps I was just too much of a smart aleck...

 

December 8, 2015 in Commentary, Current Affairs, Labor Contracts, Law Schools, Teaching | Permalink | Comments (0)

Monday, December 7, 2015

A Settlement Targeted Toward Banks?

 

Target_Data_Breach_GraphicCommercial class-action practitioner Kevin M. McGinty here describes the final settlement of the infamous 2013 theft of credit and debit card data from retail giant Target's point-of sale terminals:

On Tuesday, December 1, Target entered into a settlement agreement with a class of banks and financial institutions that issued the credit and debit cards that were compromised in the 2013 event.  The settlement was the result of negotiations following closely on the heels of an order by the court certifying a card issuer class.  This last settlement resolves card issuers’ claims that were not previously resolved in Target's August 2015 settlement with Visa, which provided $67 million to resolve claims made by Visa card issuing banks under Visa’s fraud resolution process.  Also separate from this settlement is the $10 million settlement of the claims of consumers whose cards were compromised by the data theft, which Target concluded with the consumer class in March 2015.

The current settlement provides for payment of an additional $39,357,939.38 for the benefit of class member banks.  Of that amount, $19,107,939.38 will be used to fund settlements under MasterCard’s fraud resolution process....

Target-data-breach-sadThe $10 million paid in the consumer settlement may seem at first blush to be grossly disproportionate to the roughly $107 million allocated to the card networks and their issuing banks. It actually isn't. The card payment system is built on private contracts that are themselves heavily impacted by federal consumer protection laws like the Truth-in-Lending Act and the Electronic-Funds-Transfer Act. Together, the contracts and federal law place liability for unauthorized purchases squarely on the issuer banks acting through the card networks.  Thus, we should expect the consumer losses from Target's data breach to be minimal compared to those borne by the banks, who were obligated to fund the consumer losses pending recovery from Target as the ultimately responsible party for this particular data breach.

Sometimes the legal system works more-or-less how it is intended. The consumers actually were protected in this instance.

December 7, 2015 in Commentary, Current Affairs, E-commerce, In the News | Permalink | Comments (0)

Saturday, December 5, 2015

Unionizing University Faculty

Five thousand part-time and non-tenure track professors working for the University of Southern California, a private university employing a total of 6,600 faculty, are petitioning the National Labor Relations Board to become unionized. If the petition is granted, the faculty will get a chance to vote on the issue with contract negotiations to follow soon thereafter.

Those of the faculty who support the move say that it could lead to better working conditions, more job stability and higher pay. Currently, part-time faculty teaching courses for USC earn an average of about $5,000 per course. Such faculty often have to piece together jobs teaching classes for several universities earning them the name “freeway flyers.” Parents are often getting upset that students are being taught by part-time adjuncts. Of course, the stress and uncertainty of not having a stable teaching job in one location may indeed affect the quality of the instruction provided by adjuncts and other non-tenured professors.

Nonetheless, USC Provost Michael Quick and other university representatives have warned the potentially unionizing faculty that their move may lead to “less collegiality on campus” because unions, in their opinion, rest on “an adversarial model.” 

Come again? So, some university folks may resent the fact that their low-paid, low-security, but hardworking colleagues for seeking out better working conditions for themselves and thus eventually the university students? That in itself sounds highly uncollegial and should be rethought. Perhaps some university faculty and leaders ought to consider assisting their colleagues in moving towards better working conditions and pay, as the trend is around the nation in both academia and beyond, not trying to retaining status quo. Unions have a sound role to play in this respect. Even without unions, many of us enjoy good working conditions and pay. However, many faculty may not individually be able to obtain such conditions. Unions have demonstrated their ability to assist workers in this respect. “Adversarial” is not the right word for that. It’s called bargaining power and leverage. It is what you make it.

As if this wasn’t insulting enough to the faculty, the university provost also encouraged the faculty to “read anything an organizer asks to you sign as you would read a legal document.” Duh! As one faculty said: “I almost feel like they’re insulting my intelligence.” Apparently, the intelligence of the faculty is recognized in some contexts (teaching), but not in others (reaching out for help to improve one’s working conditions).

By way of comparison: part-time and untenured faculty at both the University of California and California State University have long been represented by unions. That has not led to any reports of “less collegiality” or any other of the parade of horribles-scenarios so often invoked when it comes to employee versus employer bargains assisted by unions.

December 5, 2015 in Commentary, Current Affairs, Labor Contracts, Teaching | Permalink | Comments (0)

Contract Issues in "Doctor Who"

WARNING: SPOILERS BELOW FOR "FACE THE RAVEN"

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As we get ready for the season finale tonight, I thought I'd bring up the fact that a major story point of "Doctor Who" recently revolved around a matter of contract law. 

If you watched the episode "Face the Raven," then you know that the Doctor's companion, Clara, found herself in mortal peril when she agreed to be marked for death instead of her friend Rigsy. Ashildr, the immortal woman who'd caused the whole problem, looked at Clara mournfully after being told of the substitution. She could have broken the contract for Rigsy's soul, she explained, but she couldn't break the contract for Clara's soul. Poorly phrased, at first this made no sense to me. I understood it as Ashildr being willing to breach the contract on behalf of Rigsy but not on behalf of Clara and I was annoyed (because I've always been very fond of Clara). 

However, upon reflection, I think I've realized what they really intended: Ashildr and the deadly raven entered into a contract by which the raven would receive Rigsy's soul. Ashildr had the right to terminate this contract with notice to the raven (and that notice could take the form of Rigsy's willing transfer of the death mark), but she did not have the right to alter the terms of the contract to substitute anyone else for Rigsy. If she terminated the contract, the raven was free to carry out its death sentence on whoever carried the mark. When Rigsy transferred the death mark to Clara, he apparently voided the raven's contract with Ashildr to kill Rigsy. Which meant that Clara's death mark had no contractual implications: neither Ashildr nor Rigsy were involved with it or could affect its meaning in any way. Clara was outside of the realm of contract law. So I think we were truly meant to believe that Ashildr was powerless to fix Clara's situation, because all of the power she'd received under the contract had been terminated.

I think. 

I am such a joy to watch "Doctor Who" with, as you can see. And after I went through all this analysis for my friends' benefits, they pointed out to me that this was an alien contract and who knows what alien contract law looks like. I wonder if alien contract law requires consideration...

December 5, 2015 in Commentary, Television | Permalink

Thursday, December 3, 2015

Restatement (Third) of Presumptively Unread Contracts

This post from yesterday linked to a funny video where several people unwittingly agreed to some onerous "terms and conditions" in exchange for a chance to win a free iPad and, befitting a "pranked" setup, the people looked a bit foolish in the process.

But they really weren't foolish. While the surface joke is "ha, ha, look what you get for not reading the contract," the signing parties were behaving perfectly rationally. When faced with an adhesion contract in a sidewalk-passer-by setting, no one has an opportunity to read much of anything, and the terms aren't negotiable, anyway. Some 99% of us (or more) scrolled through the last End User License Agreement we saw and hurriedly checked the box labeled, "I have read and understood the foregoing terms," when we had in fact done nothing of the sort.

The moral of the story--now that we have killed the joke by dissecting it--is that Margaret Jane Radin, our co-blogger Nancy S. Kim, and others have gotten something fundamentally correct: clickwrap and other adhesion contracts really are different, and evaluating them under one-size-fits-all contract doctrine makes little sense.  Perhaps the time has come for a Restatement (Third) of Presumptively Unread Contracts.

December 3, 2015 in Commentary, E-commerce, Web/Tech | Permalink | Comments (7)

Farewell Post V: The Shark's Farewell (Move or Die)

Shark
Shark that stopped moving . . .

As editor of this blog, I would often tell contributors that a blog is a shark: it has to move or it dies.  That's why it is important to post often.  But it's also why it is good for us to change the guard from time to time.  After a while, one's posts tend to re-tread familiar ground, and it is time for me to get out of the way and let new voices come forward.

I am happy to see that some new contributing editors are already posting on the blog.  I wish them and the continuing editors happy blogging.  But their arrival suggests it is time for me to sign off.

I am moving to new hunting grounds.  Readers interested in my post-blog scholarship (deemed "interesting and recommended" by the Legal Theory Blog) can have a look at SSRN, where my newest piece just appeared.  Here's the abstract:

Originalism in constitutional interpretation continues to grow in its reach, its sophistication, its practical applicability and its popular support.  Although originalism first developed in the 1960s as a doctrine of judicial modesty, originalist judges are now far more confident in their ability to discern the Constitution’s original meaning and thus are willing to strike down legislative enactments inconsistent with that meaning.  Two aphorisms by the leading practitioners of originalism sum up originalism’s journey.  Justice Scalia, writing in the 1980s, conceded that originalism was merely “the lesser evil” and consoled himself with the Chestertonian dictum that “a thing worth doing is worth doing badly.”  Justice Thomas places fewer limitations on his own belief in originalist method and adopts as his motto “any job worth doing is worth doing right.”  The challenge for contemporary originalism is that it is not the sort of thing that G.K. Chesterton thought was worth doing badly, but it also may be the sort of thing that is very difficult to do right.

 

Anyone interested in my full farewells can find links to the other posts in this series below.  Thanks once again to Frank Snyder for inviting me to join this blog, to Paul Caron for creating the blog network of which this blog is a part, and to my fellow bloggers, past and present.  I have made a number of connections through this blog, and I hope that they will continue, as I continue to be interested in the subjects I have helped the blog cover over the past decade.

Farewell Post IV: Students and Tipping Points

Farewell Post III: Misplaced Anger

Farewell Post II: Still Crazy About Blogging after All These Years

Farewell Post I: Why Junior Faculty Members Should Blog

December 3, 2015 in About this Blog, Commentary | Permalink | Comments (2)

Tuesday, December 1, 2015

The (Il-)Legality of Workplace Bullying and Discrimination

In cases where workers have quit their jobs because of intolerable workplace bullying and thus wish to assert illegal discrimination, the United States Supreme Court seems inclined to start the statute of limitations “clock” when the employee resigns rather than when the last discriminatory action takes place. Private sector workers typically have 180 days to report job discrimination to the Equal Employment Opportunity Commission (“EEOC”) whereas public sector employees must do so within 45 days.

The case is Green v. Brennan, No. 14-613.  In it, a postal worker claims that he was passed over for a promotion because he is black. When he complained to his employer, the United States Postal Service, he was allegedly forced to choose between retirement or a lower-paying job 300 miles away. He resigned and filed suit for constructive discharge, but missed the EEOC deadline. The trial and appellate courts disagreed as to when the statute of limitations should start to run, which would have made a difference in the case.

As the law currently stands, employees only enjoy legal protection against discrimination based on a relatively narrow range of underlying issues such as age, gender, national origin, race, religion or disability under, most relevantly, Title VII of the Civil Rights Act of 1964. But luckily, times are changing. Although employees in this country enjoy notoriously few of the rights and work norms that are taken for granted in so many other parts of the industrialized world, some states are doing something to change this situation, at long last. In California, for example, AB 2053 now requires California employers with 50 or more employees to include training in the prevention of “abusive conduct” to already existing requirements regarding sexual harassment. 

“Abusive conduct” is that which a “reasonable person would find hostile, offensive, and unrelated to an employer’s legitimate business interests.” “It may include repeated infliction of verbal abuse … that a reasonable person would find threatening, intimidating, or humiliating, or the gratuitous sabotage or undermining of a person’s work performance.” The conduct must be undertaken with malice. In other words, AB 2053 targets a wide range of workplace bullying that is not linked to “traditional” discrimination. Such conduct is surprisingly common and accepted by management to a surprisingly great extent in more places than you might think and in places that may or may not surprise you, including our very own field, legal academia.

Unfortunately, AB 2053 does not yet have sufficient legal “teeth” as defining “malice” and the bullying targeted by the law is difficult. Thus, in spite of the extent of the problem and its many recognized and severe consequences on both employers’ productivity and success levels as well as, of course, the employees’ varied interests, if an employee thinks she or he has an issue with his or her employer, the “resolution is likely [to come from] human resources, and not the courts.” 

What happens if a human resources department is disinterested in or for other reasons - corporate acceptance of workplace bullying, perhaps - unwilling to assist the employee? Perhaps not much, as the situation stands. But just as the Civil Rights movement started some place and built up at least some protections against some types of discrimination, modern notions of what constitutes workplace discrimination and its negative effects are, luckily, spreading. In spite of the usual initial criticism, AB2053 is a very good start. Undoubtedly, the common law will be able to shed further light on what modernly constitutes acceptable workplace behavior and what does not. That way, the law can get the required legal “teeth.” In the meantime, it is a sad observation about the modern American workplace that so many managers effectively tolerate or even undertake workplace harassment and that so few counterbalancing institutions in place in other cultures exist here, for instance trade unions. In contracts law, it’s all about the bargaining power. Most American workers have too little in today’s workplace.

December 1, 2015 in Commentary, Current Affairs, Labor Contracts, Legislation | Permalink | Comments (0)

Joining the Team: Mark Edwin Burge (Texas A&M)

Changes are underway at the ContractsProf Blog, and I am delighted to be one of them.  Thanks to Myanna Dellinger for giving me the opportunity to join a team building on over a decade of quality content established by our founder (and my faculty colleague) Frank Snyder, outgoing editor Jeremy Telman, and many others throughout the years.

Who is this guy, anyway? Glad you asked. I am an Associate Professor of Law at Texas A&M University School of Law in Fort Worth, proud home for two years of the esteemed International Conference of Contracts that, as Jeremy mentioned here, has been closely associated with this blog since its inception. My major scholarly interests are in contracts (seriously, did you think I would NOT say "contracts" here?), commercial law (especially payment systems), and the interaction of both fields with legal skills and practice. I came to the academy after eight years of practice in the areas of business and commercial litigation and related transactions. Despite some occasional flirtations with theory, I have yet to shake off my greater interest in how lawyers actually make things work. So I've learned to live with that, and I'm most fortunate to be at a law school with colleagues and an administration who support the grab-bag of things I do.

My current work, which I hope to discuss here occasionally (while skillfully avoiding off-putting narcissism in the process), involves the intersection of private contract law with public regulation in the rapidly developing area of emerging payment systems. Where exactly are the best dividing lines between private and public law, especially in an age where the lag between technology and law seriously strains the institutional capacity of legal systems? Perhaps we can find some answers to that overarching question and have some fun along the way. I should, in the interest of full disclosure, confess that I think contract law is fun.

I look forward to the adventure, and I appreciate anyone who is along for the ride.

 

December 1, 2015 in About this Blog, Commentary, Conferences, Contract Profs, E-commerce | Permalink | Comments (0)

Monday, November 30, 2015

Farewell Post IV: Students and Tipping Points

OutliersI've been re-reading Malcolm Gladwell.  The sub-title of The Tipping Point is How Little Things Can Make a Big Difference.  That same idea is at the heart of some of his other works.  In Outliers, he reports on the importance of birth dates in Canadian hockey.  Boys who have birthdays in January and February tend to be hockey stand-outs, Gladwell argues, because in their early years when they are under ten years old, they are significantly older and more physically mature than the boys born towards the end of the calendar year.  As a result, the January and February kids get picked for all the travel teams and then all the all-star teams.  They get more practice in, they get the coaches' attention, and they also get to play in more challenging situations.  With each new experience, they improve incrementally, but eventually the differences between the January and February kids and the November and December kids are vast.*

I've been thinking about how students at unranked law schools like mine are like Gladwell's Canadian hockey players born in November and December.  But in the case of law students, the differences between the students who score 170 on the LSAT and those who score 145 on the LSAT are not as arbitrary as the Gregorian calendar.  They are often socio-economically determined. Obviously, this does not apply to all students who score below 150 on the LSAT; I am generalizing.  

But I am thinking of students from economically stressed families.  Their parents work all the time and/or their parents are divorced, adding additional economic stress and uncertainty to the family environment.  The parents may not have been to college or they may have gone but not pursued a serious course of study.  In any case, higher education takes a back seat in many families to more immediate concerns: children over 18 (or over 16) have to work.  Children have to look out for their siblings while the parents take care of other responsibilities.

Many of my students worked their way through college.  Many took five or six years to graduate because they needed to work or because they had to interrupt their studies for various reasons.  They ran out of money, they needed to care for a sick parent or grandparent, or they weren't performing well in college for reasons ranging from homesickness to immaturity to undiagnosed medical conditions exacerbated by the stress of a strange environment.  They went to small, struggling colleges or to branch campuses of state universities.  Their instructors tried diligently to help them, but they were in need of remedial courses, and they were in environments that did not encourage concentration on the development of the sorts of critical reasoning skills that comprise the basic building blocks of legal education.  Their undergraduate teachers were satisfied if they followed directions, committed instructional materials to memory and then re-created thought processes that were covered in class or in readings.

By the time these students arrive at law school, they seem less intelligent, less dedicated, less disciplined, less professional and less mature than students at higher ranked schools.  Standardized tests tells us this is the case.  They are none of those things.  They are bright, ambitious people who were born in December.  They never got the training that the students born in January got.  They never were asked to compete on the same level.  They never got the same encouragement.  They sat out entire seasons due to outside pressures that prevented them from focusing on their own careers.  

And now they arrive at law school, and nothing as changed.  The vast majority of students just go to the "best" law school that accepts them (or the best law school that accepts them and offers them money).  Geography may play some role, but US News rankings determine the outcome of regional contests.  A law school may tout its experiential learning programs or its program in entrepreneurship, but it will attract students in a rather narrow band of LSAT scores and undergraduate GPAs.  Students with strong LSATs and UGPAS go to the highly-ranked schools.  Students with the weakest LSATs and UGPAs go to unranked schools, where their peers are other students like them who have never had the opportunity to develop the study skills, the discipline, the critical thinking skills, the maturity and the professionalism that are the hallmarks of the successful pre-professional.

In addition, they are still subject to the same outside pressures that prevented them from getting the most out of their college educational experiences.  I once had a student miss a contracts class because she had to pick up her father at the airport.  Her family did not think it was a big deal for her to miss class.  No matter how many times we tell them that being a law student is a full-time job, the message does not sink in for students from families who think of school as a part-time endeavor supplemented with a "real job."  Many of my students work 20 hours a week, and they resent the fact that we have opted to keep the 20-hour rule when the ABA has abandoned it.  They would work more if they could.  When I confronted my students in a bar prep course on contracts last year with evidence showing that almost none of our graduates who worked while studying for the bar passed the bar exam, they responded with outraged exclamations: "Well, I've gotta eat!"

Ray Bourque
Ray Bourque, Hall of Fame Class of 2004. 
Born December 28, 1960

All of this (and more) suggests to me that we might be facing a tipping point phenomenon at law schools with median LSATs below 150.  This is not about failing law schools or about failing law students.  It is about small differences adding up incrementally to a sudden plummet in bar passage rates.  If I'm right, I don't think the solution is anything that law schools can undertake on their own.   Malcolm Gladwell's conclusion is that Canada is missing out on a lot of hockey talent by benching players born after July.  I think the legal profession (and thus society) will miss out on a lot of untapped legal talent if we don't continue to find a way to train the students who have the drive, the grit and the commitment, but not the preparation, for law school.  As I indicated in the previous post in the series, I don't think the legal profession or our society as a whole benefits from excluding the students whose pre-law-school predictors suggest that they will struggle to pass the bar examination the first time they take it.  After all, while January and February produce more NHL hockey players than any other month, on average, according to Quanthockey.com, they are not the best.  The January players score an average of 105.4 points over their NHL careers.  October payers score an average of 128.3, and December players best them all at 138.8!

*Gladwell might be wrong about Canadian hockey players. He has his critics but also his supporters.

November 30, 2015 in Commentary, Teaching | Permalink | Comments (4)

Monday, November 23, 2015

Farewell Post III: Misplaced Anger

Rage of AchillesA lot of people are angry at the legal academy.  They are angry about falling bar passage rates and limited career opportunities.  They are angry that law schools do not do enough to prepare them for the bar or for practice and that tuition is too high given what traditional legal education can accomplish.  The anger, to the extent that it comes from law graduates who worked hard and still cannot find satisfying work as attorneys, is understandable.  Directing that anger at law professors is also understandable but in most cases unjustified.  

We did not create the market conditions.  We, for the most part, are not even the architects of the policies that determine admissions standards or tuition.  We are very limited in the extent to which we can innovate because we are subject to ABA educational guidelines that increasingly (and often unhelpfully) micro-manage our operations.  Almost every innovation that would improve legal education would also make legal education more expensive.  

I want to outline two arguments in this post.  First, legal academics and administrators at unranked law schools are people of good will who are trying to continue to serve people who ardently aspire to become attorneys.  Second, the legal profession is also full of people of good will, but collectively the legal profession is behaving as professions always do in times of economic contraction: they are raising barriers to entry so as to protect their incomes and their self-created monopoly in the provision of specialized services.

What is going on at unranked law schools is pretty simple.  For decades, such law schools accepted students who, for the most part, could not have gotten in to more highly-ranked law schools.  For decades, the overwhelming majority of such students went on to pass the bar and enter the legal profession.  As Michael Simkovic and Frank McIntyre have shown, those students are financially better off for having done so, and without the lower-ranked schools, they never would have had the careers they now have.  Unranked law schools started dipping deeper into the applicant pool when that pool shrunk considerably in size, believing that they had the ability to identify students who could succeed in law school and in the legal profession and that they could address the needs of the academically underprepared with beefed-up academic success programs and curricula more geared towards bar preparation.  

Evidence is mounting that law schools were overly sanguine about their ability to help students in the bottom quartile of the national LSAT pool.  But evidence is also beginning to suggest that the pool has bottomed out and begun to grow again.  That should mean that unranked law schools that are competing for students may have a larger pool of students to compete over, and so long as schools learn their lesson and keep growth and costs down, that should mean that they can begin to increase their admissions standards back towards where they were a decade ago.  In five years, the crisis may well have passed and the law schools over which the sword of Damocles currently hangs will be crowing about gaudy bar passage and employment rates.  

This result is far preferable to shutting down existing law schools.  Right now, we have overcapacity, but it law schools disappear, they are unlikely to reappear.  And if, as seems likely, the law schools that close are the unranked law schools, the losses will hit underserved communities the hardest.  I will have more to say about who those communities are and why keeping them out of the legal profession is a big problem in the next post in this series.

The ABA is the guardian of our profession.  What do professions and professional organizations do?  Following Magali Sarfatti Larson, we can conceive of the legal profession as a group of trained experts attempting to establish a monopoly over a market in services.  The key to control over a market for professionals becomes control over the production of producers. By limiting the supply of credentialed practitioners, professionals assure themselves a favorable bargaining position in the market for their knowledge and services. (Magali Sarfatti Larson, The Rise of the Professions: A Sociological Analysis 29-30 (1977)). As Larson points out, professions do not so much meet existing needs as shape or channel the needs of consumers  (id. at 58).  In order for a profession to succeed, it needs to convince the members of society as a whole that its services are necessary and that only people with a certain kind of expertise and credentialing are qualified to provide such services.   

And so, when the going gets tough, barriers to entry rise.  Recent trends of (often steeply) lower bar passage rates and the steady drumbeat calling for greater scrutiny of law schools viewed as underperforming are consistent with how Larson's model predicts professional organizations will respond to economic pressures.  But it also threatens to add a new and ugly chapter to the history of the ABA.

Many have written about the racist bias underlying the establishment of the ABA (e.g., Daria Roithmyer, Deconstructing the Distinction between Bias and Merit, 85 Cal. L. Rev. 1449, 1476 (1997)).   I do not think there is any such intentional bias at work today, but the organizations so eager to mete out death sentences to law schools that serve underrepresented minorities and the academically underprivileged need to think about what the legal profession will look like in 2025 if their wishes all come true.   

November 23, 2015 in About this Blog, Commentary, Teaching | Permalink

Friday, November 20, 2015

The High Price of an Unenforceable Agreement to Agree

The law firm of Andrews Kurth was recently hit with a nearly $200million dollar judgment for malpractice.  Yes, that's right - nearly 200 MILLION dollars.  At the bottom of this - an agreement which was deemed unenforceable as an "agreement to agree."  As reported by Law 360 (which requires registration - apologies), the malpractice suit stemmed from representation in a dispute involving a family business, Martin Resource Management.  Two brothers, Scott and Ruben Martin, were fighting over  management issues until their mother stepped in to broker a deal.  Andrews Kurth represented Scott Martin and sought changes to the deal to ensure its enforceability.  Scott ended up suing Ruben to force him to comply with the terms of the settlement; however, the appeals court ruled that the settlement agreement revised by Andrews Kurth was unenforceable as an "agreement to agree."  Many lawsuits ensued resulting in this incredibly large jury award.

Unfortunately, I couldn't get a copy of the actual agreement that was at issue - I would really like to see what the language looked like...

 

November 20, 2015 in Commentary, In the News | Permalink | Comments (0)

Wednesday, November 18, 2015

Farewell Post II: Still Crazy About Blogging after All These Years

BeforeI'm not stopping because I'm burned out.  I still love blogging, and I wouldn't be surprised if, after a hiatus, I want to come back to blogging in some form.  I'm stopping because I think I've maxed out on the benefits I can derive for myself and my law school from this enterprise, and it is time for me to find new ways to contribute.  Also, look how blogging has aged me, as evidenced in these photographs of me taken before I started blogging (left) and after (right).

ShinerMoving on feels especially urgent given what is going on in the legal academy and in unranked law schools like mine in particular.  Posts III and IV in this series will elaborate on that subject.  Given the challenges that my current students face and that I face in teaching them, I am contemplating a complete re-tooling of my approach to teaching contracts.  I have requested a year off from teaching contracts next year so that I can teach a couple of legal writing/legal reasoning courses and get better insights into where my students are at in those areas when they get to law school.  I also need to learn from my skills-training colleagues so that I can better incorporate skills training into doctrinal teaching when I go back to teaching contracts, as I very much hope to do.  

At the same time, at age 52, I am beginning to think about what remains of my career as an academic and what sort of an impact I think I can have in the 10-15 years that remain to me as an active scholar and teacher.  It is already clear to me that my most important impact is going to be in the classroom.  Although I would like to think that I have original ideas and can contribute to an academic debate that can move the law or inform policy decisions, the likelihood of that is small, as it is for most of us mortals.  Still, perhaps out of vanity, I have three book projects that I think will keep me occupied into my sixties.  One is an edited collection on Hans Kelsen, which is under contract and which I hope will come out next year.  The second is an intellectual history of originalism in constitutional adjudication, as a judicial practice, an academic approach and a popular movement.  The third will be on theories of public international law,  I have a typology of public international law theories that I use in presenting the material to my students.  I've always wished there were a book that did this the way it needs to be done. Oona Hathaway and Harold Koh edit a collection which is very useful, but for some reason they have not decided to organize the material the way I organize it.  I'm kidding.  My organization is unique, and I will only know if it makes sense once the book is well underway.  So, I have assigned myself the task of writing that book.

None of these projects relates to contracts law, and so the prospects for me returning to contracts scholarship before retirement are remote.  I expect that I will continue to follow the blog, use it as a resource, refer students to it, and feel pride that I contributed to it for nearly a decade.  But I need to allocate my dwindling intellectual energies elsewhere.  Producing a book every five years is something I think I can still handle while focusing on Job 1, which is helping my students pass the bar and prepare for their legal careers.

November 18, 2015 in About this Blog, Commentary, Teaching | Permalink | Comments (0)

Monday, November 16, 2015

Farewell Post I: Why Junior Faculty Members Should Blog

I have told my co-bloggers and the Blog Emperor that I intend to step down from the blog at the end of the semester.  I am leaving things in good hands.  Nancy Kim will continue as a contributing editor, and Myanna Dellinger has agreed to step up as editor.  I hope that this post will aid Myanna in her efforts to attract new contributors.  The more different voices we feature on the blog, the more we can attract new readers and move others from occasional to habitual readers.  

Before I go, I have a few things to get off my chest, and I will do so in a final series of posts.

SnyderFirst come the thanks (and they will come again at the end).  Nearly ten years ago, I sent a Limerick to Frank Snyder (pictured) and asked him if he would be interested in posting it on this blog.  He responded by inviting me to become a regular contributor.  He showed me the ropes and roped me in to the contracts law community, and for that service, I owe him continual thanks, as the benefits continue to accrue.  While on the blog, I have had many great colleagues, who have helped keep the blog going and added new and interesting perspectives.  Two such colleagues, Nancy Kim and Meredith Miller, merit special thanks because of their long tenure on the blog and because their contributions moved the blog in new directions, both scholarly and quirky, that expanded our readership in ways we could not otherwise have done.  Both served me as sounding boards both in my contracts scholarship and in connection with issues that arose on occasion relating to the blog.  It is a bit odd to describe as friends people you have only spoken with face-to-face on a handful of occasions.  Yet, in unreflective moments, when I confess that I like to go to the International Conferences on Contracts because I get to see my friends there, I have Frank, Meredith and Nancy (and others) in mind.

Which brings me to the second subject I want to tackle in this post.  When I started blogging, I was untenured, and there were a few articles circulating (as well as many more blog posts) suggesting that it might not be a great idea for junior faculty members to blog.  The main concern was that blogging would interfere with serious scholarship.  Based on my own experience, I think this is nonsense.  Blogging can certainly spur scholarship, but I have never been much of a contracts scholar (with the exception of my forthcoming article so-authored with Nancy Kim, my publications tend not to be about contracts).   But blogging also is scholarship, and it is scholarship that is much, much, much more widely read than are law review articles.  This blog gets about 300 unique visitors A DAY.  I think I am doing well if one of my articles gets to 300 downloads TOTAL on SSRN.

And my posts on this blog have been cited in law review articles.  It doesn't happen all that often, but when it does, it is always for the unique substance of the blog post.  My law review articles are sometimes cited for that purpose, but probably more often, my law review articles are cited for some proposition that the author could have found in ten other law review articles.  

But the benefits of blogging to a junior faculty member can also lie elsewhere.  Blogging has certainly kept me on top of new developments in a field in which I teach.  But beyond that, blogging has helped me establish connections with contracts professors throughout the country and sometimes even internationally.  Through our online symposia, I have gotten to work with contracts scholars who are doing the most exciting work in the field.  I hope for better and not for worse, I am known as a contracts professor in ways that I think other contracts professors at "unranked" law schools generally are not, and I expect that my being known (for better and not for worse) also redounds to the benefit of my law school.  By way of contrast, I am not equally well known in the field of international law, although that is where I do most of my writing, and in the community of American scholars who work on Hans Kelsen . . . .  Just joking, all six of them know me.

On the more personal and less professional level, I have had innumerable, rewarding conversations with contracts professors at various conference and gatherings.  Often, these conversations begin with something like, "I saw your post about . . . ." or "Oh yes, I know you from the blog . . . "  We academics are awkward people.  The blog provides a ready ice-breaker, and so I have the blog to thank for providing the gateway to many rewarding exchanges.

For years, I have introduced myself to students as "the editor of the ContractsProf Blog, the official blog of the AALS Section on Contracts."  As I look out at their impassive faces, I tell them that they have now heard my best pick-up line.  I love the joke, especially since I don't know what it means to be the official blog of the AALS Section on Contracts.  I also love it because I think my students think it might be an impressive thing but also that my joking about suggests that I don't take myself too seriously.  

They are dead wrong about that.  When my teenage daughter gets too sassy, I remind her that I am a famous contracts professor.  I sign various school forms "D. A. Jeremy Telman, FCP," and I explain that FCP stands for famous contracts professor. "Dad," my daughter groans, "you are not a famous contracts professor."  "Oh yeah?" I counter.  "Can you name one who is more famous?"

She cannot, and now I have a plaque (Fathers' Day 2015) to prove it!

IMG_0999

November 16, 2015 in About this Blog, Commentary, Teaching | Permalink | Comments (0)

Thursday, November 12, 2015

Library Fines, Oliver Wendell Holmes and Libertarian Paternalism

NickelIn The Path of the Law, Holmes wrote that “[t]he duty to keep a contract at common law means a prediction that you must pay damages if you do not keep it,—and nothing else.”  

I was thinking of that dictum this morning as I renewed an overdue library book (on CD, to be honest).  The librarian graciously renewed the item but noted that I owe a five cent fine because I renewed one day late.  I threw a hissy fit.  Yesterday was Veterans Day!  The library was closed.  How could I renew when the library was closed?!?  I'm a poor law professor on a very fixed income! Have you no sense of decency, sir, at long last? Have you left no sense of decency?

No, I didn't.

My public library seems to understand that there is no moral opprobrium associated with a breach of this kind of implied promise.  Since I became addicted to listening to books on CD in the car, I have borrowed well over 100 such books from my public library.  Almost invariably, I have to renew them, as it takes me more than two weeks to finish them.  Only once have I had to return a book that I wanted to renew because it had been requested by another reader (listener).  My delict is de minimis and likely harms nobody.

But here's the rub.  I used to always return/renew my library materials on time.  But a few times I've held on to the items a few extra days so that I could finish them and make just one trip to the library to renew and pick out a new book.  That saves me time, which I value more than the five cents a day.  Still I feel a bit guilty about this new habit (that's why I am busy rationalizing my behavior), and I wish my library would charge me $1/day for overdue books.  I can afford it, but it would hurt enough to nudge me into being a better citizen.

November 12, 2015 in Commentary, Teaching, True Contracts | Permalink | Comments (2)

Friday, November 6, 2015

The Way We Teach Now

TeacherThe other day, I had lunch with a friend who is preparing to teach a course for the first time.  I asked him how his preparation was going, and he told me that he was reading a book by a law professor on the subject matter of the course.  That is a perfectly reasonable way to prepare to teach a  course.  

But it's not what I do.

After our conversation, it occurred to me that I now increasingly bifurcate my mind between subjects about which I write and subjects that I teach.  In cases where I write about what I teach, I read one set of materials for scholarship and another set to prepare for teaching.  There is very little overlap.  

In order to write scholarship, I read books and law review articles, as well as case law and other relevant primary sources of law.  In order to teach, I review the cases I am teaching, as well as the supplementary material that I assign -- usually a treatise or a book from the Examples & Explanations series, (or something similar) and then spend most of the rest of my preparation time designing exercises and reading students' work product.  Of course, I have various electronic news feeds that keep me abreast of developments relevant to the fields I teach, but it is rare that developments in the law change my approach to teaching contracts.  I still read books and law review articles about contracts in pursuit of a scholarly agenda (and for fun!), but what I read rarely affects the way I present the material.  

I spent the evening after my conversation with my friend giving myself a 40-question multiple choice exam on contracts.  The questions were provided by a vendor with which my law school has contracted.  The vendor provides bar-style questions to help our students review material.  I wanted to make certain that the questions were appropriate for my students and that the test-designers understood the material the same way I did.  Of the 40 questions, I found that 22 were appropriate for my students, and so I decided to warn them away from just jumping into the quiz bank.  Too many of the questions related to sales topics not covered in the first year course or to other topics that I don't get to in a four-credit course.  Instead, I edited the 40 questions I reviewed in order to come up with two practice quizzes for my students.

This approach to teaching has become mine through a slow process that I did not notice until I spoke with my friend and then later reflected on how it had struck me as quaint that he was preparing to teach a new course by reading a book of scholarship with a distinctive and unorthodox take on the subject matter.  I remember that the doctrinal courses that I took in law school were not just about doctrine; many of my teachers were able to teach me doctrine in the context of a semester-long or year-long sustained argument incorporating overarching themes that my professors used to organize, understand and critique the doctrine.  They were not just teaching the law; they were teaching an approach to the law, and they were trusting us to sort things out.

Perhaps I do so as well, and I don't read scholarship in connection with teaching anymore because, twelve years into teaching, I have read enough scholarship on contracts to suffice for a lifetime of 1L teaching.  But I think slipping bar passage rates are also a factor in the transformation of my approach to teaching.  I worry that introducing critical perspectives and theoretical approaches will confuse more than enlighten.  I still encourage students to engage critically with the case law, but I tend to do so by asking them to think about the facts and the law from each party's perspective rather than by encouraging them to question the doctrines.

November 6, 2015 in Commentary, Teaching | Permalink | Comments (1)

Monday, November 2, 2015

Lego Turns Down Order for Millions of Lego Bricks to be Used for "Political" Purposes

Danish toy building brick maker Lego recently turned down an order for several million lego bricks that were to have been used in an art exhibit by Chinese artist and human rights activist Ai Weiwei in Melbourne.   Why?  Because Lego refrains from “actively engaging in or endorsing the use of Lego bricks in projects or contexts of a political agenda.” 

The bricks would have been used for two projects, one of which would have consisted of mosaic portraits of twenty Australian advocates for human rights and for information and Internet freedom.  Prominent lawyers such as Michael Kirby and Geoffrey Robertson would have been depicted as would have WikiLeaks founder Julian Assange.

Last year, Mr. Ai used Legos to create mosaic portraits of 176 political exiles and prisoners of conscience in an exhibit on Alcatraz Island in San Francisco.  At that time, Mr. Weiwei bought the toys via a nonprofit helping him develop the Alcatraz exhibition.

This is apparently not the first time that the Lego Group is turning down otherwise valuable contracts for its popular bricks.  Just this year, Lego rejected a proposal to make Lego figures of the female United States Supreme Court justices, also because such use was considered “political.” (Huh?!)  Previously, Lego has tried to persuade a Polish artist to withdraw an installation that used Lego bricks to depict a Nazi concentration camp (Lego, in turn, withdrew that request after lawyers got involved.).

China’s reaction to the Ai Weiwei story? The state-run Chinese Global Times reported that “as China becomes more powerful, commercial organizations and national governments will become more well behaved and more scared to apply a double standard to China.” (Link to Global Times not available, but see here for coverage from NPR and the NY Times)  Surely, at least part of that statement must be a mistranslation.  If not, then let’s indeed hope that governments and corporations alike become better behaved (if not, could we give them time out?).

Does this case make sense from a business point of view?  Perhaps, if the company wants to err on the extremely cautious side of avoiding negative PR in general.  Or is this perhaps rather an issue of not risking to upset a very valuable and increasingly affluent country such as China?  Should it matter to a manufacturer what its products are sold for?  Said Weiwei: “A company that sells pens [also] cannot tell a writer that he or she can’t do political or romantic writing. It’s really none of their business.” 

Having been born and raised in Denmark, Lego’s attitude surprises me somewhat.  Danes – whether organizations or individuals – often weigh in on important social issues.  Danes are often not afraid to speak their minds on important social issues.  That is simply how “small talk” and opinion-making is formed in the nation.  As a nation, Denmark often touts itself as a world leader when it comes to other complex issues such as comprising the environment, energy and health care even though those could also be seen as “political” in nature.  On that backdrop, Lego’s attitude seems even more conservative from a PR point of view, but of course, it is a multi-million dollar company worried about the bottom line.  Fair enough, but in a way, it would be refreshing if companies would take more responsibility for the ultimate effects of their products.  Some are.  For example, some companies are voluntarily reducing the sugar content in their products or at least providing less sugary alternatives to traditional products.  Others are not (the gun industry, to mention one).  But where, such as in the Lego case, companies decide to be overly cautious in relation to issues that do not seem all that controversial and that are not even funded or otherwise supported by the vendor itself, it seems that we are risking censorship via corporatism. 

The future of Weiwei’s exhibits is unknown, but he is reported to be making use of Lego collection points after having received numerous offers of Lego donations on social media. 

November 2, 2015 in Commentary, Current Affairs, In the News, Miscellaneous, True Contracts | Permalink | Comments (0)

Monday, October 26, 2015

Retirement Plans

I expect that when I am retired I will have time to devote myself full time to the joy of dealing with the utility and telecommunications companies, because avoiding being ripped off by these monopolists is really a full-time job.  Two recent examples:

Mobile_phone_evolution1. I don't have a smart phone.  I hate telephones, so I get by with a dumb phone and a pre-paid plan.  I spend about $200/year on my cellphone.  My wife is similar, but she probably spends half as much.  

I recently travelled to Europe, and I needed to make exactly one phone call when I arrived.  There was no simple way to avoid making the phone call, and having a phone with which to place the call was easier than stealing an iPhone from an unsuspecting tourist.  I called my service provider and asked if there was a simple and inexpensive way for me to use my phone for three days in Belgium.  Three disconnections and over an hour later, I thought I had a way to do so FOR FREE!  I was told that they would send me a new sim card.  If I sent the card back within 30 days, there would be no charge.  A $26 charge would show up on my credit card, but it would be removed once I returned the sim card.  This sounded too good to be true.  Had my call been re-routed to some scam artist?  On the Internet, I checked and re-checked the number I had called while I was on hold (I had a lot of time to check), and I had the customer service person repeat himself several times to make certain I understood the terms.

Very long story short, my service provider did charge me $26, and then wanted to add something like $80/month for the new phone service I had allegedly ordered.  After perhaps another two hours on hold/arguing with "customer service" people, the service provider did what they had repeatedly told me was impossible.  They gave me a full refund (except for the original $26, which was a shipping and handling charge).  I could live with that.  I could console myself that being able to make that phone call was worth $26, even though I would never have agreed to that in advance.

One week later, I received a $50 refund from the telephone service provider.  I have no idea how they arrived at that figure.  I chalk it up to even more incompetence.  I wanted to try to return the refund, to which I am not entitled  (beyond the $26), but I know that doing so will take far more time than it is worth.  I will consider the "refund" a partial payment for the extensive legal advice I offered about the fraud in which they had engaged by repeatedly telling me that the sim care would cost me nothing and then trying to charge me for it.  

2. Adventures with the cable company: Telecom icon

  • Unannounced, guys from the cable company dig a hole in our backyard and leave us with an open cable box with cables shooting out of the top of it.  They tell me they will be back in a day or two to close the box and bury the lines going across my yard and the yards of my neighbors on either side.
  • We receive notice that we must upgrade our cable box, and we follow onscreen instructions to have it sent to us.
  • We receive an invoice with a new charge for "additional outlets"
  • We install the new cable box and while speaking with someone who activates it remotely, I set up a service call so that they can come back, close up the cable box, fill in the hole and bury the cable before the ground freezes.
  • The next morning I receive a call confirming the cancellation of my service call.
  • I call back immediately, outraged that I have to re-schedule a service call that I never cancelled, and I am able to get it rescheduled, although the cable company still says that they have a record indicating, that in the 12 hours since I scheduled the service call,  I called them to cancel it.
  • While on the phone, I ask them about the "additional outlet" charge, and they inform me that it is a shipping and handling charge for the new cable box (that they insisted that I needed).

I pointed out that it is misleading (to say the least) to call a shipping and handling charge an "additional outlet" charge.  Because I was livid, or perhaps just because I bothered to ask, they agreed to remove the "additional outlet" charge.  Similarly, we are now enjoying a $50 "discount" on our cable services because I threatened to switch to a satellite dish and because we "had not had a discount in a while."  

It does now seem to be the policy of the monopolists that they will just keep raising the rates of loyal customers until they crack, and then they will lower them until they see an opportunity to start ratcheting up the price again.  Last year, I got fed up with what we were being charged for garbage collection, placed a phone call, and got the bill reduced by 50%.  I then told my neighbors that they should all do the same.  And they did.  And it worked.

How all of this slips below the radar and is not the subject of federal regulation or class actions is beyond me!

October 26, 2015 in Commentary, Miscellaneous | Permalink | Comments (1)

Thursday, October 22, 2015

DNA Test Kits, Law Enforcement and TOS

23andme just issued a report that indicates that it has received 4 requests for  customer information from law enforcement agencies and the FBI.  The company was able to fend off those requests.  Given that the company has over a million customers, that's not a large number, but the implications are chilling.  As Jeremy Telman and I argue in a forthcoming article, the personal data collected by private companies may be used by the government in ways that may surprise us (and, in some cases, deprive of us basic constitutional rights....)  23andme extracts its customers consent by including the following in its TOS:

"Further, you acknowledge and agree that 23andMe is free to preserve and disclose any and all Personal Information to law enforcement agencies or others if required to do so by law or in the good faith belief that such preservation or disclosure is reasonably necessary to: (a) comply with legal process (such as a judicial proceeding, court order, or government inquiry) or obligations that 23andMe may owe pursuant to ethical and other professional rules, laws, and regulations; (b) enforce the 23andMe TOS; (c) respond to claims that any content violates the rights of third parties; or (d) protect the rights, property, or personal safety of 23andMe, its employees, its users, its clients, and the public. In such event we will notify you through the contact information you have provided to us in advance, unless doing so would violate the law or a court order."

Nevermind that this provision is not one that most customers would have bothered to read, hidden as it is behind a hyperlink and buried in the text.  You can read more about the potential use of DNA test kits by law enforcement agencies here and here

But wait - there's more!  As I was scrolling through 23andme's terms, I found another provision that potentially affects even more customers:

"Genetic Information you share with others could be used against your interests. You should be careful about sharing your Genetic Information with others. Currently, very few businesses or insurance companies request genetic information, but this could change in the future. While the Genetic Information Nondiscrimination Act was signed into law in the United States in 2008, its protection against discrimination by employers and health insurance companies for employment and coverage issues has not been clearly established. In addition, GINA does not cover life or disability insurance providers. Some, but not all, states and other jurisdictions have laws that protect individuals with regard to their Genetic Information. You may want to consult a lawyer to understand the extent of legal protection of your Genetic Information before you share it with anybody.

Furthermore, Genetic Information that you choose to share with your physician or other health care provider may become part of your medical record and through that route be accessible to other health care providers and/or insurance companies in the future. Genetic Information that you share with family, friends or employers may be used against your interests. Even if you share Genetic Information that has no or limited meaning today, that information could have greater meaning in the future as new discoveries are made. If you are asked by an insurance company whether you have learned Genetic Information about health conditions and you do not disclose this to them, this may be considered to be fraud."

This is information that might be very useful to a potential customer.  So why is this buried way down in the TOS?  Maybe because it might make potential customers think twice about purchasing the kit?  (Ya think?)  Back in the good old days, companies posted potential dangers relating to the use of their products and services where you could see them.  We used to call them notices and they had to be conspicuous.  Now they bury them in the fine print and call them "contracts." 

 

October 22, 2015 in Commentary, Current Affairs, Miscellaneous, Web/Tech | Permalink | Comments (0)

Friday, October 16, 2015

The Seventh Circuit and the Removal of Unpublished Opinions from Legal Limbo

7th Circuit SealClass action plaintiffs began working with Cellular Sales (Cellular), which sells Verizon wireless services, in 2010.  Cellular required that they form a business entity like an LLC and that they sign a sales agreement that identified them as independent contractors.  The sales agreements did not contain arbitration clauses.  In 2011, the plaintiffs became employees of Cellular and signed new compensation agreements that did contain arbitration clauses.  When plaintiffs brought claims that, before the compensation agreements entered into force, they were misclassified as independent contractors when they were really employees, Cellular sought to compel arbitration.  The District Court denied that motion.  

In Holick v. Cellular Sales of New York, the Seventh Circuit affirmed.  Although the Court acknowledged that an arbitration clause can apply retroactively, it cannot do so when the cause of action arises under a contract that does not contain an arbitration clause.  In construing arbitration clauses, courts must give effect to the parties' intentions, and the Seventh Circuit saw no evidence that the parties intended to arbitrate disputes arising pursuant to their sales agreements.

VirgilMoscowNot so small aside: in its opinion the Seventh Circuit notes that plaintiffs relied heavily on an unpublished Fourth Circuit opinion.  I found this curious and so I dug a bit.  According to the Illinois Bar Journal the Seventh Circuit changed its rules relating to unpublished opinions in 2006. It is now permissible to cite to unpublished opinions issued on or after January 1, 2007.  Citation to unpublished opinions issued prior to 2007 is still prohibited.  Well, this is progress.  As my colleague, David Cleveland has argued in numerous articles, unpublished opinions are a bad idea, and allowing parties to cite to them goes a long way towards eliminating the dangers of the designation.  

But why draw the line at 2007?  When I was in college, I saw a play called Sister Mary Ignatius Explains It All to You.  I have no idea what compelled me to see that play and even less idea why I remember this one joke, but here it is: Sister Mary Ignatius explains that before Vatican II, unbaptized babies were consigned to limbo.  After Vatican II, they are allowed to enter heaven.  Sister Mary Ignatius is asked what becomes of the pre-Vatican II babies that were in Limbo.  She pauses.  "They are still in limbo."  Maybe it was the delivery, but I still love that line, and remember it 30 years later.  Yup, the rest of my college years are a blur.

Interestingly enough, I read on Slate that in 2007, the Vatican investigated the concept of limbo and either eliminated it entirely or at least determined that unbaptized babies do not end up there.  The articles I read suggest that limbo was just for unbaptized babies, but I thought the virtuous pagans (like Virgil pictured right) were there as well (discussing prosody I am told).  In any case, 2007.  The very same year that unpublished opinions emerged from limbo! Coincidence?  

October 16, 2015 in Commentary, Recent Cases | Permalink | Comments (0)

Monday, October 12, 2015

Sears Makes a Mistake

Some shoppers on Sears.com thought it was their lucky day when they saw expensive play sets and fancy toys available for the low price of $11.95.  Consumerist has the story here.  If you saw a storybook cottage that typically costs hundreds of dollars listed for sale at the low, low price of $11.95, what would you think?  That's right.  Unless it was advertised as a huge blowout sale, you would probably guess it was a mistake.  Apparently, Sears lists items sold by third parties and gets a cut - and this time, a third party had made a pricing error on its items.  Of course, some Sears sellers were upset - even though Sears refunded their money and gave them a $5 gift card.  So, for all those upset sellers, let's run through the mistake scenario to see whether the law would be on your side:

Was this a mistake of a basic assumption?  - Yes, it was a pricing error and pricing errors are generally considered basic assumption mistakes.

Was the mistake made by one or both parties (was it a mutual or unilateral mistake?) - Here, Sears mistakenly believed that the prices listed on its website were accurate (not all $11.95) while the customers saw what the prices were - $11.95 -  so it was a unilateral mistake made by Sears. 

Did it have a material effect?  Yes, there's a big difference between $11.95 and hundreds of dollars so Sears would make less money on the transaction.

Did the non-mistaken party (the Sears customers) know or should they have known of the mistake?  - Yes, because they should know that expensive playsets are typically not sold for such a low price unless it is part of a promotion or clearance sale.

Did the mistaken party bear the risk of the mistake?  You might think Sears would, since it is their website.  But based upon existing case law (i.e. Donovan v. RRL Corp), since there's no lack of good faith here and Sears presumably acted reasonably in managing its website - it does not constitute "neglect of a legal duty" and Sears likely doesn't bear the risk of the mistake.

So - there you have it.  Sorry kids - guess you'll just have to go outside and build your own play castles with branches and old bed sheets...

 

October 12, 2015 in Commentary, E-commerce, In the News, Web/Tech | Permalink | Comments (4)