Wednesday, May 14, 2014
Yesterday's New York Times features a story about the costs associated with hotel boycotts when an organization has booked a hotel to host a conference or meeting long in advance. This issue ought to be a familiar to anyone who attended the 2011 annual AALS meeting in San Francisco, for which the conference hotel was a Hilton whose workers were on strike.
The article details the costs involved in cancellations. Often the organization is contractually obligated to pay hundreds of thousands of dollars to the hotel even if the conference ulimately takes place at a different venue. According to the Times, if the cancellation is on short notice, the organization is typically obligated to pay 90% of expected room costs and 90% of expected banqueting services. And then there are, of course, the costs of finding an alternative venue in proxity to the original choice on relatively short notice. Major conferences can be booked years in advance.
Sometimes it is possible to mitigate the harm -- by booking at a related hotel or by promising to return to the original hotel if the policy that causes offenese is revoked. The former is unlikely in cases where the problem is with the entity that owns the hotel. But it is more likely in cases like those that arose in connection with anti-immigrant legislation passed in Arizona. Organizations could punish the state by moving to related hotels in states that did not have similar legislation.
Monday, May 5, 2014
Tina L. Stark Gives Kickoff Speech for Emory Law’s Conference on Transactional Law Education, June 6-7
REMINDER: If you haven’t yet registered for Emory Law’s Fourth Biennial Conference on Teaching Transactional Law and Skills, entitled “Educating the Transactional Lawyer of Tomorrow,” you should do so now.
Tina L. Stark (pictured) will return to Emory to kick off the Conference by updating the fantasy curriculum that she proposed in her speech at the inaugural conference in 2008. On Day Two, the keynote panel will address the topic, “Skills is Not a Dirty Word: Identifying and Teaching Transactional Law Competencies.”
You won’t want to miss these or the many other terrific sessions we have planned. You can register for the Conference by clicking here. If you have any questions about registration, please contact the Conference Coordinator, Edna Patterson, at firstname.lastname@example.org.
Please click here to download the 2014 Conference Schedule.
Friday, April 18, 2014
For those of you unable to attend the "Making the Fine Print Fair" Symposium, hosted by the Georgetown Consumer Law Society and Citizen Works -Fair Contracts.org, here is a link to a Livestream of the program. It was an absolutely terrific event with a great mix of academics, consumer advocates, regulators and practitioners. The amazing line-up of speakers, included FTC Chair Edith Ramirez, consumer advocate Ralph Nader and NYT bestselling author Bob Sullivan.
Tuesday, April 15, 2014
Bringing Numbers into Basic and Advanced Business Associations Courses:
How and Why to Teach Accounting, Finance, and Tax
2015 AALS Annual Meeting
Business planners and transactional lawyers know just how much the “number-crunching” disciplines overlap with business law. Even when the law does not require unincorporated business associations and closely held corporations to adopt generally accepted accounting principles, lawyers frequently deal with tax implications in choice of entity, the allocation of ownership interests, and the myriad other planning and dispute resolution circumstances in which accounting comes into play. In practice, unincorporated business association law (as contrasted with corporate law) has tended to be the domain of lawyers with tax and accounting orientation. Yet many law professors still struggle with the reality that their students (and sometimes the professors themselves) are not “numerate” enough to make these important connections. While recognizing the importance of numeracy, the basic course cannot in itself be devoted wholly to primers in accounting, tax, and finance.
The Executive Committee will devote the 2015 annual Section meeting in Washington to the critically important, but much-neglected, topic of effectively incorporating accounting, tax, and finance into courses in the law of business associations. In addition to featuring several invited speakers, we seek speakers (and papers) to address this subject. Within the broad topic, we seek papers dealing with any aspect of incorporating accounting, tax, and finance into the pedagogy of basic or advanced business law courses.
Any full-time faculty member of an AALS member school who has written an unpublished paper, is working on a paper, or who is interested in writing a paper in this area is invited to submit a 1 or 2-page proposal by May 1, 2014 (preferably by April 15, 2014). The Executive Committee will review all submissions and select two papers by May 15, 2014. A very polished draft must be submitted by November 1, 2014. The Executive Committee is exploring publication possibilities, but no commitment on that has been made. All submissions and inquiries should be directed to Jeff Lipshaw, Chair.
Emerging Scholars in Commercial and Consumer Law
The AALS Section on Commercial and Related Consumer Law is pleased to announce a Call for Papers for its program during the AALS 2015 Annual Meeting. The Annual Meeting is currently scheduled to take place in Washington, DC from January 2-6, 2015.
As we all know, no area of the law is ever static. New cases and issues arise that inform and challenge our thinking about existing laws and policies. Such is the case for commercial and consumer law. Whether concerning issues related to financial products, secured lending, arbitration, and the like, commercial and consumer law continue to evolve. Central to this evolution is the emergence of new scholars who contribute their voices and perspectives to these areas of the law. This panel will provide the valuable opportunity for pre-tenured professors to present and discuss their work with others in the field. Panelists are welcome to discuss any topic related to commercial and/or consumer law. Program and eligibility details are below.
Professor Tracie R. Porter, Western State College of Law
Professor Andrea Freeman, University of Hawaiʻi at Mānoa William S. Richardson School of Law
Professor Dalié Jiménez, University of Connecticut School of Law
Professor David Min, University of California, Irvine School of Law
Two speakers to be selected from a call for papers
Format: There is no formal requirement as to the form or length of proposals. Preference will be given to proposals that are substantially complete and to papers that offer novel scholarly insights. A paper may have already been accepted for publication as long as it will not be published prior to the Annual Meeting. The Section does not have plans to publish the papers, so individual presenters are free to seek their own publishing opportunities.
Eligibility: Since the goal of the program is to provide opportunities for pre-tenured professors, panelists selected from the Call for Papers must not have received tenure at their institution by January 15, 2015. Per AALS rules, only full-time faculty members of AALS member law schools are eligible to submit a paper to a Section’s call for papers. Fellows from AALS member law schools are also eligible to submit a paper but must include a CV with their proposal. Faculty at fee-paid law schools, visiting faculty with no full time appointment at a member school, international and adjunct faculty members, graduate students, and non-law school faculty are not eligible to submit. All panelists, including speakers selected from this Call for Papers, are responsible for paying their own annual meeting registration fee and travel expenses.
Deadline: AUGUST 15, 2014. Please email submissions, in Word or PDF format, to the Program Committee c/o Eboni Nelson at email@example.com with “CFP Submission” in the subject line.
Sunday, April 13, 2014
The AALS Contracts Section has issued its call for papers for the 2015 AALS Annual Meeting in Washington, D.C. - please see below:
CALL FOR PROPOSALS
ASSOCIATION OF AMERICAN LAW SCHOOLS (AALS)
SECTION ON CONTRACTS
2015 ANNUAL MEETING
JANUARY 2-5, 2015
MIND THE GAP! -- CONTRACTS, TECHNOLOGY AND LEGAL GAPS
The AALS Contracts Section solicits proposals for presentations at the Section’s Annual Meeting program, Mind the Gap! - Contracts, Technology and Legal Gaps, to be held in Washington, D.C. on January 2-January 5, 2015.
Technological innovation has created new challenges for the law. New technologies often create legal and ethical questions in areas such as privacy, employment, reproduction and intellectual property. Who owns the data collected by embedded medical devices? Can employers wipe departing employees’ phone data? To what extent are companies liable for harms created by their inventions, such as driverless cars? Who owns crowd sourced content?
Courts and legislatures are often slow to respond to these issues. To fill this legal gap created by rapid advancements in technology, businesses and individuals attempt to reduce their risk and uncertainty through private ordering. They limit their liability and allocate rights through contractual provisions. Technology affects the way contracts are used as well. Employers may have employees agree to remote phone wiping policies in their employment agreement or through click wrap agreements that pop up when they connect to the network server. Through contracts, businesses establish norms that can be hard to undo. The norm of licensing instead of selling software, for example, was established through contract and has become entrenched as a business practice. The collection of online personal information through online contracts is another example.
The Section seeks two or three speakers to join our panel of invited experts to discuss how technology has affected the use of contracts. How have parties used contracts to address the risks created by technologies? In what ways have contracts been used to privately legislate in the gap created by technological advancements? What concerns are raised when private ordering is used to fill the legal gap created by technology? What are, or should be, the limits of consent and contracting where emerging technologies are involved?
Drafts and completed papers are welcome though not required, and must be accompanied by an abstract. Preference will be given to proposals that are substantially complete. Please indicate whether the paper has been published or accepted for publication (and if so, provide the anticipated or actual date of publication). There is no publication requirement, but preference will be given to papers that will not have been published by the date of the Annual Meeting.
We particularly encourage submissions from contracts scholars who have been active in the field for ten years or less, especially those who are pre-tenured, as well as more senior scholars whose work may not be widely known to members of the Contracts Section. We will give some preference to those who have not recently participated in the Section’s annual meeting program.
DEADLINE: August 15, 2014. Please e-mail an abstract or proposal to section chair, Nancy Kim (firstname.lastname@example.org) with “AALS Submission” in the title line by 5:00pm (Pacific Time) August 15, 2014. Submissions must be in Word or PDF format.
Tuesday, March 25, 2014
The Georgetown Consumer Law Society and Citizen Works are co-hosting an exciting conference, "Making the Fine Print Fair," on Friday, April 4. Notable speakers include consumer advocate Ralph Nader, FTC Chairwoman Edith Ramirez and former Director of the Bureau of Consumer Protection of the FTC and Georgetown Law Prof. David Vladeck as well as blog favorites Margaret Jane Radin and Omri Ben-Shahar. Registration is free but space is limited. More information about speakers and how to register below:
Wednesday, March 12, 2014
For those of you who made the wide choice to avoid Miami in February (highs in the 80s, lows in the 70s -- it was hell!), you can still enjoy the experience of hearing the papers presented at last month's conference. The conference organizer, Jennifer Martin, is in the process of making all the sesions availalbe here.
Here's a taste, Robin West's luncheon address:
Ahh, the memories.
Thursday, March 6, 2014
Educating the Transactional Lawyer of Tomorrow
Emory University School of Law – June 6-7, 2014
Emory’s Center for Transactional Law and Practice is delighted to announce its fourth biennial conference on the teaching of transactional law and skills. The conference, entitled “Educating the Transactional Lawyer of Tomorrow,” will be held at Emory Law, beginning at 1:00 p.m. on Friday, June 6th and ending at 3:45 p.m. on Saturday, June 7th.
REGISTRATION AND HOTEL
The registration fee for the Conference is $179.00. It includes a pre-Conference lunch beginning at 11:30 a.m., snacks, and a reception on June 6, and breakfast, lunch, and snacks on June 7. We are planning an optional dinner for attendees on Friday evening, June 6, at an additional cost. Attendees are responsible for their own hotel accommodations and travel arrangements. Registration closes Friday, May 30, 2014.
Special hotel rates for conference participants are available at the Emory Conference Center Hotel, less than one mile from the conference site at Emory Law. Subject to availability, rates are $129 per night.
Free shuttle transportation will be provided between the Emory Conference Center Hotel and Emory Law. To make a reservation, call the Emory Conference Center Hotel at 800.933.6679 and reserve under “The Emory Law Transactional Conference” to obtain the special conference rate.
CALL FOR PROPOSALS
We are accepting proposals immediately, but in no event later than 5 p.m. on Monday, March 17, 2014. We welcome proposals on any subject of interest to current or potential teachers of transactional law and skills, focusing particularly on our overarching theme: “Educating the Transactional Lawyer of Tomorrow.” We expect to address questions like the following:
- What is the shape of the future employment market for transactional lawyers? Will our students be working at law firms (small, medium, large), as solo practitioners, as in-house counsel, as government attorneys, or as degreed attorneys not practicing law?
- Who will be the transactional lawyers’ clients? Individuals? Small to mid-sized businesses? Large businesses?
- How do we best educate our students to become transactional attorneys in each kind of practice setting for each kind of client?
- In what particular areas of the law will transactional attorneys be most needed? Administrative Law and Regulatory Practice, Health Law, Intellectual Property Law, and International Business Law, to name a few?
- What are the current best practices for teaching students about each area of transactional law?
- What skill sets and competencies do legal employers expect new transactional attorneys to possess?
- What innovative techniques and technology can we use to enhance the teaching of transactional law and skills?
- How can we teach ethics and professionalism within our transactional law and skills courses?
- How can we assess the students’ progress toward developing the competencies and professionalism required of effective transactional lawyers?
In addition to proposals addressing the overarching questions listed above, we hope to receive proposals that address and update topics that we have considered in past conferences, such as:
- Teaching doctrinal transactional law courses
- Teaching contract drafting and other critical deal skills
- Teaching transactions in an international setting
- Teaching transactional skills within first-year doctrinal courses
Each session will be approximately 80 minutes long. We invite you to present your topic individually or with a panel of other participants and we encourage you to make your presentation creative and interactive. We look forward to receiving your proposals so that we can finalize the Program.
As in prior years, the proceedings of the Conference as well as the materials distributed by speakers will be recorded and published in Transactions: The Tennessee Journal of Business Law, a publication of the Clayton Center for Entrepreneurial Law of The University of Tennessee. Your remarks will be transcribed and you will have the opportunity to edit them. You will also be asked to sign a release permitting publication and broadcast.
Please submit the attached proposal form electronically via the Emory Law website at https://emorylaw.wufoo.com/forms/2014-conference-proposals/ before 5 p.m. on Monday, March 17, 2014.
Beginning March 1, 2014, you can also register for the Conference at our Emory Law website at https://emorylaw.wufoo.com/forms/2014-emory-law-conference-registration/.
If you encounter any technical difficulties in submitting your proposal or in registering online, please contact Edna Patterson, Conference Coordinator, at email@example.com or 404.727.6506.
Tuesday, March 4, 2014
I wish I could say that this were a Kelsen and Contracts Conference, but I can say that there will be some contracts scholars among the participants. And that suffices as a hook for me.
For those readers who are not Kelsen accolytes, if you know people who are (especially if they are philosophers, sociologists, or political scientists), please spread the word.
Monday, February 24, 2014
We had an all-star afternoon panel on Contract Law and Social Justice. The panel was moderated by Robin West, who gave a killer Keynote Speech over lunch. That speech will be forthcoming in the St. Thomas Law Review, as will Amy Schmitz paper, discussed below, so look out for that.
Danielle Hart started off the panel with a paper on Contracts and Inequality. Her talk took issue with the claim that the state is absent in contract law. In fact, she regards contract law as public law because the state is neither netural nor minimal, and contract law in action helps to create and perpectuate inequality. She illustrated her point with a case of a fairly typical subprime mortgage loan to an African-American women in a predominantly minority neighborhood. The state helped manufacture the desire for homeowneship; the state created the residential housing market through regulation and deregulation of the housing market; and the state decides on enforcement and enforces judgment.
The result is that law promotes inequality. Parties to contracts are not equal, but contract law ignores structural inequality in bargaining power and applies rules "neutrally" without adjusting for structural inequality. Thus the stronger party gets the better end of the bargain. And getting into contracts is much easier than getting out of them, especially with the new hurdles to litigation including the Twombly/Iqbal line of cases, as well as standard contract terms such as binding arbitration clasues and class action waivers. The result is an endless cycle in which those with more power continually can use contracts to extract favorable terms in each successive contractual relationship and those without bargaining power are made worse off through unfavorable bargains.
Returning to her illustration involving the African-American borrower, Professor Hart noted that the banks that made subprime loans before the mortgage meltdown are mostly doing fine, but there is now a remarkable racial disparity in wealth in American households (over $113,000 for White households; about $5-6000 for African American and Hispanic households). The numbers are very low for African-American and Hispanic households because so much of their wealth was tied up in their homes, which they lost in the subprime crisis. This illustrates Professor Hart's cycle of contracts law serving the interests the better off at the expense of the poor.
Hila Keren next presented her paper on Contract Law and the Responsive State, in which she addressed what can be done in light of the very depressing state of things as described in Professor Hart's paper. Professor Keren regards contracts as a mode of social regulation and offered ways in which we can use contracts law to further socially desireable ends. She does so in the context of two patterns of market exploitation. The first is "predatory prenups;" that is, prenups in which a woman is coerced into a marriage relationship because of particular vulnerabilities. Second, in predatory loan agreements, people enter into unfavorable loans because they were vulnreable, low-income, unsophisticated, first-time buyers.
Inequalities are increased if judges refuse to intervene to protect exploited parties. Professor Heren agrees with Professor Hart that judges are increasingly refusing to intervene. Her proposal is to replace our neo-liberal theory with a revamped vulnerability theory to underpin contracts doctrine. Neo-liberal theory associates equality with non-discrimination; vulnerability theory focuses on the right of individuals to participate in society and to have their human dignity recognized and protected. Neo-liberal theory regards the subject as the private, autonomous individual; under vulnerability theory we are all vulnerable and interconnected. Finally, neo-liberal theory regards the state as a threat to individual freedom, while vulnerability theory desires a responsive state that will address human vulnerabilities. In the contractual context, the responsive state simply refuses to enforce exploitative contracts.
Vulnerability theory eanbles us to appreciate that vulnerability is a normal part of life that arises as a product of state policies and politics. Permitting exploitation of such vulnerabilities harms human dignities, and the responsive state ought not to permit such exploitation. Professor Keren supports the recognition of a right not to be exploited through contractual means, and she notes that European law recognizes a norm against contractual exploitation. In the U.S., where that norm is not legislatively enacted (and the prospects are dim), we might be able to make due with a beefed-up version of the doctrine of unconscionability.
Amy Schmitz gave a talk on Acccess to Consumer Remedies in the Squeaky Wheel System. Her talk built on this paper from the Pepperdine Law Review. By "squeaky wheel," Professor Schmitz refers to the fact that only 1/3 of consumers do anything when dissatisfied with a product and few go beyond just calling and complaining. Very wealthy consumers are the most likely to complain about non-conforming consumer goods. Those "squeaky wheels" often get the remedy they wanted and they end up being loyal customers because they are satisfied with customer service.
The same goes with sales. White men are more likely to bargain than women or minority groups. An Ian Ayres study indicated that women paid a 40% mark-up over men in car sales and African Americans and Hispanics paid a 100% mark up over white male consumers. Most people do not bargain or seek to change terms when they enter into contracts, and most people do not read or pay attention to most contractual terms.
So, how do we bring back remedies? How do we compel sellers to stand by their goods? Professor Schmitz suggests that we need a new "handshake" to ignite justice in business-to-consumer contracting. She thinks online dispute resolution (ODR) might be a way to do so in a low-cost, flexible, user-friendly and non-intimidating manner.
Charles Knapp delivered a paper called Unconscionability: Once More Unto the Breach. He has been tracing the progress of unconscionability doctrine in the U.S. in a series of law review articles, including this one and this one. His main argument at this point is that courts have developed a comprehensive body of law on unconscionability. The doctrine comes up a lot in all sorts of contexts, and the courts know how to deal with unconscionability. The doctrine is more pervasive than one might think. Unconscionable behavior also comes up frequently in the interpretation of state and federal statutes. Courts have also recognized unconscionability as a sword as well as a shield, permitting recovery of large claims based on court findings that certain agreements are unconscionable. Judges with conscience should not enforce unconscionable agreements because lots of people and corporations do not have consciences.
Peter Linzer commented on the papers. He noted Chuck Knapp's important contribution in helping us to recognize that unsconscionability is not a doctrine that we embraced in the 60s and 70s and then it ran its course. It is alive and well and continues to permit court to invalidate contracts when "something smells bad." He noted that consumer contracts are far more complex today than they were in the age of face-to-face transactions, because we work through intermediaries (Amazon, Google, credit card companies) each of which has its own terms that we agree to by clicking or using the product.
Professor Linzer expressed some skepticism that merchants will embrace Professor Schmitz's online dispute resolution mechanisms. Doctrinal solutions to the problems of form contracts also fail because consumers don't want to litigate, and if they do, the odds are stacked against them. He therefore prefers the European route of banning certain contractual provisions through blacklists and greylists. So, we could simply ban pre-dispute binding arbitration in consumer contracts or choice of forum clauses that force the world to come to (e.g.) Microsoft when Microsoft already operates globally. The new Consumer Financial Protection Bureau may be the entity that can actually do these things.
Finally, Professor Linzer noted that consumer spending accounted for 71% of the GDP last year. That makes contracts law an issue of public law.
Saturday, February 22, 2014
Our own Meredith Miller started the panel with a paper on Getting Paid: Contracting in the Naked Economy. Professor Miller's paper is in part a reflection on her experience with freelancers who have been doing work in the new economy and have been experiencing a hard time getting paid. The amount due often does not rise to a level that would justify litigation. Professor Miller began by discussing "the rise in independent work," which is a lose category encompassing the "jobless but not workless." These people are often highly skilled, and big companies prefer to have consultants rather than employees because of liabilities and costs attendant to employees that are not associated with contractual relations with constultants.
On the other side, there is a literature promoting the benefits to workers in being independent workers. There are advantages to not having a boss, to not having to commute, not having face-time at work, etc. Why deal with people when you can stay home in the company of your cats? But there are significant problems associated with being an independent worker, including significantly, not getting paid. Professor Miller presented staggering statistics indicating that a very high percentage of independent workers have a hard time getting paid, and a very small percentage of them hire an attorney or actually proceed to court. She illustrated the problem with this video.
Professor Miller suggested simple solutions for independent workers such as clear definitions and expectations in contracts, payments schedules, process payments or payments in advance, terminations fees and attorneys fees in cases of non-payment. She recommended the Shake App as a means for quickly throwing together useable contracts. She also discussed legislative reforms, such as New York's proposed Freelancer Payment Protection Act, and potential private solutions.
Rachel Arnow-Richman next gave her paper on Modifying Employment Contracts. Professor Arnow-Richman began by discussing the abysmal case law on employment law, and by suggesting that modification is just another area in which the law is bad for workers and largely incoherent. Employment is generally at will these days, and so the notion of modification is difficult because it is not entirely clear that there is a contract to modify. The agreements are relational and the obligations are indefinite. Still, where the employer regards the modification as legally binding (e.g., the creation of non-competes, arbitration provisions, or retraction or modification of a previously promulgated employer policy), the doctrine of modification is applicable.
Professor Arnow-Richman noted two general approaches that have been applied to modification. The unilateral approach focuses on the employee's at-will status with the employee's continued employment constituting the consideration for the modifcation. For example, a Colorado case recently upheld the imposition of a non-compete clause on an at-will employmee because the employer can terminate the contract at any point. If the employer can terminate, it can also introduce a new contract with new terms that the employee accepts by continuing employment. This approach is troubling, because the worker obviously derives no benefit, and the notion that the benefit was continued employment is a sort of fiction, since that employment is still terminable at will. Some courts enforce such unilateral modifications only in the case of some additional consideration, such as a raise. In the at-will context, this is not all that helpful, since the additional consideration will not be relevant to the employee if she is sacked the following day.
The second approach, which Professor Arnow-Richman prefers, is to require advance notice as the consideration. This approach relates to a paper she gave at the AALS Section on Contracts meeting in 2013, which is now forthcoming in the Florida Law Review. There have been cases in which courts have upheld modifications based on reasonable notice. Unfortunately, the courts do not seem to know why they are doing so. Still, Professor Arnow-Richman thinks that there is way to make sense of this approach, and it turns on treating even at-will employment as a bilateral contract. If we so understand at-will employment, and we should, since employment begins with a promissory acceptance and the parties generally anticipate a long-term relationship, then reasonable notice is a standard term for modification.
I had the pleasure of chairing a panel populated by four young scholars all writing on Behavior, Bargaining, Incentives and Contract.
Kenneth Ching went first with his paper on Justice and Harsh Results: Beyond Individualism and Collectivism in Contracts. His paper focused on Cardozo's celebrated opinion in Jacob & Youngs v. Kent in which Cardozo held that, although Jacob & Youngs had not installed Reading pipes as called for in the contract, it had nonetheless substantially performed the contract by installing pipes of similar quality. Professor Ching maintains that Cardozo was wrong on both the facts and the law in the case. The contract in the case made clear that complete performance was a condition of payment, and the law was clear (then and now) that there can be no substantial performance of a condition. Moreover, even if it were possible to substantially perform conditions, Jacob & Youngs did not do so, as Cardozo would have noted had he actually applied the test to the facts of the case.
The case is but a gateway to Professor Ching's larger point about collectivist and individualist approaches to contracts law. Judge Cardozo's opinion seems to take a collectivist (or parternalist) approach to the doctrinal problems that the case raises. That is, Cardozo thinks we are all better off if people aren't held to unreasonable terms that would require the destruction of a home to replace pipes with virtually identical pipes. Judge McLaughlin's dissent seems to be more individualist, focusing on Kent's perspective and his right to insist on the contracts rights for which he had bargained. Professor Ching's approach rejects both collectivist and individualist approaches. He favors a Thomist approach that tries to resolve conflict in line with reason and with the goal of promoting human flourishing. Cardozo's opinion might be attractive from a Thomist perspective. Responding to a question, Professor Ching acknowledged that James Gordely, whose approach informs Professor Ching's, would find for Jacob & Youngs based on unconscionability. Still, Professor Ching maintains, Judge Cardozo reached the wrong result because of his mischaracterization of the facts and the law.
Next up was Andrew Verstein who gave a (his first ever) Prezi presentation (which was super cool) on Ex Tempore Contracting. His paper takes on a tradition that distinguishes between ex ante and ex post approaches to contracts interpretation. In the former, the parties specify how the contract is to be interpreted ("use Reading pipes"), and in the latter, the parties delegate interpretation to an adjudicator ("use merchantable pipes"). In the ex ante approach, the parties determine the meaning of the terms; in the ex post approach, some neutral third party (court or arbitrator) determines the meaning. Ideally, parties decide between precise (ex ante) terms and vague (ex post) terms based on the costs and benefits of choosing specific terms in particular contexts. Parties should draft to minimize the sum of ex ante and ex post costs.
But Professor Verstein contends that there is middle ground between before performance and after (alleged) breach. Some contracts disputes can be resolved during performance. The parties can specify that a particular third party will resolve disputes that arise during performance (ex tempore), and they can be resolved whether the terms are superficially vague or superficially precise. The aim remains to reduce the costs of dispute resolution, and there are many situations in which it is most efficient for the parties to agree to ex tempore dispute resolution, especially in construction agreements. Professor Verstein illustrates this point with the case of the Chinese Ertan Dam, a huge construction project. All disputes relating to that dam were resolved within six months of the dam's completion. This fact is attributable to the existence of netural expert panels (dipute boards) that addressed disputes as they arose and were able to sort out most disputes before the parties became too aggrieved. Reviewing Florida dispute boards, Professor Verstein finds that 98% of disputes are resolved without further conflict and the cost is 10-50% of arbitration. This is not really dispute resolution, Professor Verstein contends; it is ex tempore contracting. And, it turns out, this happens a lot more often than we realize.
Professor Verstein's paper is forthcoming in the William & Mary Law Review and can be downloaded here.
Wendy Netter Epstein next presented her paper on Public Private Contracting and the Reciprocity Norm. Professor Epstein's thesis is that in some public private contracts it is very difficult for the government to reduce agency costs by writing more detailed contracts. Picking up on Professor Verstein's theme, Professor Epstein contends that in certain circumstances it is better to have less detailed contracts with mechanisms for ongoing dispute resolution during contract performance. This approach is most appropriate where there is a shallow market (i.e., very few private contractors bid), a narrow application (e.g., private prisons) or a disempowered group of third-party beneficiaries (e.g., welfare recipients).
While a lot of scholarship has focused on the need for more detailed contracts in this context so as to provide for strong oversight of private actors working in the public interest. Professor Epstein suggests that the result has been to increase the size and complexity of government contracts. However, this solution does not work well because, where there is no well-functioning market, the government cannot effectively moitor and discipline private contractors. Moreover, one point of outsourcing is to promote innovation and creativity, and excessive government monitoring of private contractors undermines that aim. Professor Epstein drawns on research in the behavioral sciences and contends that reciprocity norm, which rewards people for kind actions, constrains actors more powerfully than models based on rational actors would predict. She thus thinks that strict enforcement mechanisms and sanctions regimes often undermine cooperation in the public private contracting context. Governments might be better served by communicating their positive intentions towards private contractors by entering into looser contracts that would permit the parties to chart the course of the collaboration on an on-going basis as the project proceeds.
Finally, Eric Zacks presented a paper on The Moral Hazard of Contract Drafting. One party to a contract can act opportunistically as an economic agent of the other party. The agency relationship arises when one party asks the other party to draft the agreement. That is a delegation of authority that would then be ratified upon acceptance. The danger of agency costs arises in that there may be a disparity between the contract as conceived and the contact as written.
There may be economic value in having one party be the contract preparer. For example, that party might have greater experience and expertise in contract preparation. But the drafter may write the contract is such a way as to enable it to take advantage of the other party after performance has begun. Then the question arises whether the principal (the non-drafting party) is able to monitor the agent (the drafting party). For example, in consumer contracts, it seems unlikely that non-drafting consumers would be capable of both foreseeing and monitoring the agency costs involved in allowing sellers to draft consumer contracts. One solution is for the principal to hire an agent (e.g., a lawyer) to monitor the contract. Or there might be outside monitoring services to prevent opportunistic behavior, such as regulatory agencies or courts, or statutory requirements that certain transactions be written in plain language.
Courts are less likely to intervene when they think the principal (non-drafting party) is sophisticated and has the means to protect itself against opportunistic behavior by the agent (drafting party). In the contractual context, we have more limited ways to discourage opportunistic behavior through incentives for good behavior.
Those not satisfied with this summary of Professor Zacks' argument can download the entire thing here.
Friday, February 21, 2014
Shawn Bayern presented his work in progress on Meta-contextualist Contract Interpretation. Although Professor Bayern began by suggesting that, non-withstanding his previous presentations at this conference in which he denounced formalism and defended contextualist approaches, he really thinks that if asked in any given context, which interpretive regime should apply to a particular transaction, his answer is, "it depends." In short, the answer to the question of textualism vs. contextualism is contextual. Thus, Professor Bayern is a meta-contextualist. Parties should be able to determine what interpretive regime will apply to them. It might well be textualist, but (ah ha!), the text of the parties' agreement should not be dispositive in determining that issue. Rather, courts should look to the context informing that agreement. Happily, this seems to be what courts do. If the parties make clear that they intend to be bound by their text, then courts should take a textual approach. Otherwise, they should not just rely on the text, regardless how clear it is, but should review the text in the context of the negotiations. After all, a contract negotiated at gunpoint should not be binding regardless of its clarity.
Peter Gerhart then presented his paper co-authored with Juliet Kostritsky, Efficient Contextualism. The main point of the paper, like Professor Bayern's, is that the distinction between contextual and textual approaches is not particularly useful. Our real goal is to get at the parties' obligations, and whether we do that with text or context does not really matter. Both approaches, if pursued one-sidedly, have significant drawbacks. Textualism can lead to literalism and absurd results. Contextualism, if unconstrained, can be terribly inefficient and capricious.
Instead Professor Gerhart proposes "efficient contextualism" through determinate reasoning, which requires each party to identify the facts that must be true in order for their interpretation to succeed. While Professor Bayern thinks that the methodology appropriate to each contract must be determined with specific reference to the context in which that contract was negotiated, Professor Gerhard suggests that there can be a uniform approach to interpretation that would in fact be what unites the law of contracts. He used the facts of Jacob & Youngs v. Kent to illustrate. What does "use Reading Pipe" mean in the context of that agreement and what result is surplus maximizing? The answer depends on what the parties knew or reasonably should have known and intended at the time of the agreement. Determinate reasoning should promote efficiency by narrowing the issues in dispute which can then be settled either through motion practice or by a quick trial to resolve the few factual disputes on which the parties' differing contractual interpretations hinge.
Finally, Amir Pichhadze (pictured left in an image from the Yazigallery), an SJD candidate at the University of Michigan whose recent successes have garnered a lot of attention, presented his paper on Transfer Pricing & Contractual Interpretation. The subject matter of his paper is complex, so I will post an abstract that he has shared with me:
As the OECD’s Transfer Pricing Guidelines (“TPG”) and US Regulations recognize, the contractual terms of a controlled transaction are a ‘relevant circumstance’ (i.e. ‘comparability factor’) that ought to be taken into account when conducting the transfer pricing comparability analysis.
The purpose of this paper is to identify that domestic contractual interpretation law has a critical role in this comparability analysis. Firstly, it makes it possible to ascertain the substance of the terms, as they were intended by the parties. This is essential in order to properly recognized and give effect to the transaction as it was structured by the parties. Second, the parties’ contractual intentions make it possible to determine whether the controlled transaction’s surrounding circumstances are linked to the transfer price, which would make them a ‘relevant circumstance’ in the comparability analysis.
In Canada v. GlaxoSmithKline Inc. (“Glaxo case”), for example, if Glaxo Canada intended in the controlled transaction [which was a Supply Agreement with Adechsa, an associated foreign company] to bundle payments for goods received under the expressed terms of the controlled transaction as well as for services received from its parent company [Glaxo Group, which is located in the UK] under a separate Licence Agreement, then that Licence Agreement would have to be taken into account as a ‘relevant circumstance’ because it is linked to (i.e. it has an impact on) the transfer price.
Part 1 of this paper identifies that in order to properly ascertain Glaxo Canada’s contractual intentions, in the Supply Agreement, the courts had to interpret that agreement by applying the relevant principles from Canada’s contractual interpretation law. By failing to do so, the courts have risked making an error of law in their analysis. The extent of their error will be explored in part 2 of this paper. The analysis of the courts’ approach in this case ought to serve an important function. It ought to alert courts in other countries to recognize the role that their domestic contractual interpretation law has in the transfer pricing comparability analysis, so that they avoid making the same errors as those made by the Canadian courts.
Kingsley Martin of KM Standards gave a luncheon address on "The Emergence of Contracts Standards and Its Future Impact on Legal Education." He introduced us to some very impressive technology that can greatly increase the efficiency with which practicing attorneys review standard agreements. Here's what it looked like:
This technology enables an attorney to review a new document, say a merger agreement, by comparing it to a database of say 15 similar documents. It immediately identifies the provisions that are similar to those found in the database, those found in the new document and not in the database, and those not found in the new document but common in other, similar agreements. An attorney can then quickly pinpoint what is missing from the document and might need to be added and what unusual provisions might regard careful scrutiny.
More particularly, the technology can also use the database to identify the most common language used in standard provisions and also variations in standard provisions so that one can see the range of how parties work out standard terms and pick out the language that is best suited for a particular deal.
The steps are to identify the unitary elements of standard form agreements, identify the clauses components and then draft clauses in clear, standard English. Ultimately, Martin thinks that such the technology can help attorneys negotiate optimal terms. For example, if you are trying to find optimal compensation in an employment agreement at a public company, you could go on to EDGAR and get all the filings that disclose compensation terms. The parties then should be able to discern from the data an appropriate compensation package.
How might this affect teaching? He thinks his basic contracts clauses could be reduced to playing cards. One might then run various simulations with students (or one could just choose to characterize the exercise as a "game" that they students "play"). The students can then choose and negotiate using the various cards and see if they can work out a satisfactory deal. Or they may not be able to achieve a satisfactory deal through the use of common terms, and then the challenge is to see if they can draft unique language suitable to their ends.
Anyone interested in seeing what the cards might look like can check them out here.
Jennifer Martin (picutured at left), who did a simply incredible job putting together this conference, welcomed us this morning to sunny Florida.
We then got under way with a plenary session on the work of Linda Rusch (pictured below at right), the conference's honoree. Candace Zierdt chaired the session and introduced Louis Higgins from West Academic. He spoke of how great it has been for him to work with Linda as an author. He claimed that in working with Linda on about 20 books(!), she has never once missed a deadline.
Amy Boss, whom Stephen Sepinuck recognized as the reigning "Queen of the UCC," then spoke of Linda's career as both an academic and as a law reformer. Linda read a number of comments from an impressive array of judges and practitioners who have worked with Linda on law reform projects. Linda is the type of person whose work often goes unnoticed, because it takes place outside of the spotlight among small groups of extremely well-informed experts on commercial law but often comes to shape both complex federal regulations and state statutes. People uniformly compliment Linda for her creativity and organization and for her sense of humor. People are willing to work with Linda on all manner of projects because she is extremely competetent, organized, efficient, approachable and enjoyable to work with. She clearly understands the theoretical underpinnings of commercial law but she never loses sight of the practical.
Next, Neil Cohen spoke of Linda's constant presence in the firmament of commercial law. Her work has not been flashy and evanscent. Rather, she is a steady reminder that there are ways to improve on our work and our understanding of commercial law while also working at improving the law itself. He commended her for her successful revision of Article 7 and for the "unbuilt architecture" of the revised Article 2 that the ALI approved but then fell at the Uniform Law Commission. Professor Cohen made the excellent point that the remedies sections in the original Article 2, which are extremely well-conceived, are not especially well drafted. Linda was significantly involved in reconceptualizing, re-organization and re-writing the Article 2 remedies sections. The failure of state legislatures to adopt the revised Article 2 is a loss to all of us who teach the subject matter, because the legal principles are far more clearly laid out in the revised version (thanks to Linda's work) than they were in the original.
Larry Garvin spoke of having met Linda early in the process of UCC revision in 1996 and watched her move from back-bencher to leader in undertaking elegant revisions, especially to the Article 2 damages sections. Professor Garvin basically added his "I agree" to Professor Cohen's comments and then moved on to an appreciation of Linda's scholarly work since the UCC revisions, focusing especially on her article in the SMU Law Review on the ongoing struggle for balance in Article 2 and on Linda's 2003 Temple Law Review article on products liability. In sum, Professor Garvin noted that Linda's scholarship and law reform efforts generally are characterized by clarity and balance.
Finally, Stephen Sepinuck spoke on behalf of the younger scholars who have benefited from Linda's support and mentoring. Professor Sepinuck highlighted as his favorite of Linda's articles her 2008 article in the Chicago-Kent Law Review on payment systems. When the time comes to revisit the laws of payment systems, Professor Sepinuck suggested that this article will provide the basis for that work. He also noted that the reason very few people know anything about the UCC's Article 7 is that Linda's draft made that section so clear that Article 7 issues almost never need to be litigated. He also noted her important contributions to the Restatement (3d) of Restitution and Unjust Enrichment so as to make certain that nothing in the Restatement is inconsistent with anything in the UCC.
Linda said a few quick words of thanks to the panelists, whom she had gotten to know at many meetings at mediocre hotels in medium-sized cities close to major airports. Professor Zierdt announced that the entire panel will be available on YouTube, so that's somethign to look for soon.
A number of us from the blog are here at KCON 9 in Miami -- the 9th Annual International Conference on Contracts. We may do some live blogging on the panels, or we may just reflect afterwards on the sessions. But for now, let's just say, highs in the 80s, lows in the 70s.
Tuesday, February 18, 2014
Save the Date: Symposium to Honor Professor Chuck Knapp’s
50th Year of Law Teaching – October 24, 2014
The University of California, Hastings College of the Law is sponsoring a symposium to honor Professor Chuck Knapp on the completion of his 50th year of law teaching. (He began his teaching career at NYU School of Law in fall 1964.) The date for the event is Friday, October 24, 2014, and it will be held on the campus of UC Hastings in San Francisco.
The day-long program will include four panels that will focus on areas that are of particular interest to Professor Knapp, but that will also address topics with broad appeal to contract law scholars. The panel topics include:
*The State of Contract Law
*The Future of Unconscionability as a Limit on Contract Enforcement
*The Politics of Contract Law
*The Role of Casebooks in the Future of Contract Law
Confirmed speakers include:
- Professor Hazel Glenn Beh, University of Hawaii
- Professor Carol Chomsky, University of Minnesota
- Professor Jay Feinman, Rutgers University – Camden
- Professor Danielle Kie Hart, Southwestern Law School
- Professor David Horton, UC Davis
- Professor Emily M. S. Houh, University of Cincinnati
- Professor Thomas Joo, UC Davis
- Professor Russell Korobkin, UCLA
- Professor Peter Linzer, University of Houston
- Professor Judith Maute, University of Oklahoma
- Professor Deborah Post, Touro Law Center
- Professor William Woodward, Temple University
Questions may be directed to Professor Harry G. Prince at UC Hastings by email at firstname.lastname@example.org and by telephone at 415-565-4790.
Monday, February 17, 2014
Assessment Across The Curriculum
Institute for Law Teaching and Learning
Spring Conference 2014
Saturday, April 5, 2014
“Assessment Across the Curriculum” is a one-day conference for new and experienced law teachers who are interested in designing and implementing effective techniques for assessing student learning. The conference will take place on Saturday, April 5, 2014, at the University of Arkansas at Little Rock William H. Bowen School of Law in Little Rock, Arkansas.
Conference Content: Sessions will address topics such as
- · Formative Assessment in Large Classes
- · Classroom Assessment Techniques
- · Using Rubrics for Formative and Summative Assessment
- · Assessing the Ineffable: Professionalism, Judgment, and Teamwork
- · Assessment Techniques for Statutory or Transactional Courses
By the end of the conference, participants will have concrete ideas and assessment practices to take back to their students, colleagues, and institutions.
Who Should Attend: This conference is for all law faculty (full-time and adjunct) who want to learn about best practices for course-level assessment of student learning.
Conference Structure: The conference opens with an optional informal gathering on Friday evening, April 4. The conference will officially start with an opening session onSaturday, April 5, followed by a series of workshops. Breaks are scheduled with adequate time to provide participants with opportunities to discuss ideas from the conference. The conference ends at 4:30 p.m. on Saturday. Details about the conference are available on the websites of the Institute for Law Teaching and Learning (www.lawteaching.org) and the University of Arkansas at Little Rock William H. Bowen School of Law (ualr.edu/law).
Conference Faculty: Conference workshops will be taught by experienced faculty, including Michael Hunter Schwartz (UALR Bowen), Rory Bahadur (Washburn), Sandra Simpson (Gonzaga), Sophie Sparrow (University of New Hampshire), Lyn Entrikin (UALR Bowen), and Richard Neumann (Hofstra).
Accommodations: A block of hotel rooms for conference participants has been reserved at The DoubleTree Little Rock, 424 West Markham Street, Little Rock, AR 72201. Reservations may be made by calling the hotel directly at 501-372-4371, calling the DoubleTree Central Reservations System at 800-222-TREE, or booking online at www.doubletreelr.com. The group code to use when making reservations for the conference is “LAW.”