Thursday, February 19, 2015
I never met Professor Chirelstein, but his book (at left) was a revelation to me. I read it while taking first year contracts. My first year contracts course was rigorous and stimulating, but Chirelstein's book gave me my first inkling that contracts law and lore could be entertaining and fun. I brought that edition with me to work, where it sat in my office until it went down with the World Trade Center. When I became a contracts prof, I started getting the new editions, and I was always happy to see how the book was updated. It still sits on my shelf as a trusted reference book that I recommend to students, hoping to kindle in them the same enthusiasm for the subject that it kindled in me.
A notice is available on the Columbia Law School website and in the New York Times.
Thursday, February 12, 2015
We just received the sad news of Chancellor John E. Murray's death, at age 82. An obituary can be found here in the Pittsburgh Post-Gazette. I met Chancellor Murray only once, at the International Conference on Contracts two years ago at which we honored him. That being the case, I am not well positioned to post a remembrance, and I hope our readers will avail themselves of the comments space to share their recollections.
But I will say this. Less than two weeks ago, Chancellor Murray chimed in on a thread on the Contracts Prof listserv. He shared a sober, scholarly rumination on the parol evidence rule and the CISG. Two weeks earlier, he posted a succinct and complete answer to a question that I had posed on the listserv. According to the Post-Gazette report, on the day he died, Chancellor Murray thought to get word to his law school Dean that he would need somebody to cover his classes the next day. From what little I know of him, I can say that he was absolutely dedicated to his students and his colleagues, and he died with his contracts law boots on.
Sunday, January 25, 2015
An Ohio appellate court upheld a $1.2 million breach of contract judgment against Kent State's men's basketball coach, Geno Ford. The judgment enforced a liquidated damages clause entitling Kent State to damages equal to Ford's annual salary ($300,000) multipled by the number of years remaining on his contract at the point of breach. In Kent State University v. Ford, Coach Ford tried to characterize the liquidated damages clause as a penalty. The court applied Ohio law to determine whether at the time the contract was entered into: 1) damages were uncertain; 2) the damages provided for in the contract were not unconscionable; and 3) the parties intended for damages to follow a breach. The court upheld the trial court's determination that the standard was satisfied in this case. Coach Ford can take consolation in the fact that his salary is short of Jim Harbaugh's by an order of magnitude.
PetaPixel.com reports on a wedding photographer who, after charging a couple $6000 to shoot a wedding album, sought an additional $150 for the album cover. The couple balked, so the photographer is refusing to hand over the photographs and is threatening to charge them an additional $250 "archive fee" if they do not pay up in a month. PetaPixel draws the following lesson from the story:
This all goes to show that as a photographer, you should never rely on verbal agreements when it comes to conditions and charges. Always get everything in writing.
Maybe. The photographer herself has an extremely lengthy blog post about the entire affair in which she claims that everything should have been clear from the written contract. PetaPixel's story makes it seem like an additional charge was added after the contract had been entered into, and if that's the case, the couple might well have balked whether or not the new terms were in writing.
Contracts Prof/Con Law Prof Randy Barnett, writing at the Volokh Conspiracy picked up by the Washington Post, muses interestingly on the applicability of the contractual duty of good faith to the President's duty to faithfully execute the laws in the Constitution's Take Care clause. This helps Barnett reconcile his empathy for the President's refusal to enforce federal drug laws in the face of permissive state laws permitting use of marijuana with his opposition to the President's new initiative on immigration. I've never been persuaded that the contractual analogy is particularly useful in Constitutional interpretation. Suggesting that the contracts doctrine of "good faith" provides a useful gloss on the Take Care clause strikes me as a stretch, but Professor Barnett is always stimulating.
Monday, January 19, 2015
Law in an Information Society
A Festschrift in Honor of Richard Craswell
We live in a time when information—about costs, parties, alternatives, and laws—is more important than ever before. This symposium brings together 25 leading scholars in law and economics, contracts, commercial law, antitrust law, and other topics relating to how litigants, regulators, and policymakers can use information to inform their decisionmaking.
The Stanford Law Review is pleased to present this symposium to celebrate Professor Craswell and his tremendous contributions across many areas of law. Articles will be presented by Ian Ayres and Barry Nalebuff, Louis Kaplow, Alan Schwartz, Christine Jolls, and Tess Wilkinson-Ryan and David Hoffman, and papers will be presented by Matthew Spitzer and Richard Brooks. Many other noted scholars from around the country will serve as discussants.
Attendance is free: See a full schedule and register HERE!
Friday, January 2, 2015
A few days ago, I blogged on the recent lawsuit by United Airlines and Orbitz against the developer of Skiplagged. One of the causes of action alleged is breach of contract for encouraging the purchase of a ticket to certain destinations only to get off at an interim point to save money.
The airlines themselves may be breaching their contracts with flyers. For example, when we buy tickets to be flown from point A to point B, that arguably implies being done so without undue delays and, in particular, possibly having to spend the night at your own cost and without your personal belongings in random cities around the world if connections are missed because of flight delays (unless, of course, you choose to spend the night sitting upright in the airport). Needless to say, if you seek to change your ticket, airlines will either charge extreme high fees and the “difference in price” for doing so or outright prohibit this practice. I’ve had to change tickets many times in the past, and it has typically only taken an agent about five minutes to do so. Unconscionabiliy, anyone?
Here’s what happened to me one cold winter night a few years back: On my way to Denmark from St. Croix, the airline was late taking off and got even more delayed when it “had to” make an unplanned “quick landing” for gas, which was cheaper at the interim airport than at the end destination, and… ice cubes for people’s drinks! I wish I was kidding, but I’m not. I missed the once-daily connection out of Atlanta to Copenhagen and had to spend the night in Atlanta in December. As I was living in tropical St. Croix at the time, I had some warm clothes with me on board the airplane to stay warm there, but had packed my winter gear in my suitcase. The airline paid for my hotel, but would, in spite of my desperate pleas, not let me have my suitcase back for the night. Result: I had to travel to and from the hotel, etc., in indoor clothes on what turned out to be an unseasonably cold winter day in Atlanta (yes, I should have brought a warmer jacket on board the plane, but planes to and from the Caribbean are often very small and I always try not to bring too much carry-on items).
Before 1978, U.S. airlines were required under “Rule 240” to offer seats on a competitor’s next flight if that would be the fastest way of getting the traveler to his or her destination. Airlines created after deregulation were never required to follow that rule, but older airlines such as Delta, United and Continental apparently still adhere to the rule. Funny that they never seem to mention that when they delay you significantly. Next time you fly, it may pay to scrutinize your contract of carriage more carefully to ascertain your rights in case of a delay.
It may be time for Congress to reintroduce a Rule 240-type requirement on airlines, especially as these have become extremely good at flying full – even at overcapacity - and thus often do not have extra space for passengers that have missed their flights. Good customer service often seems to have given way to airlines’ “me first” attitude in the name of hearing the highest profits possible by nickel-and-diming most aspects of airline travel on, at least, economy class.
Feeling empathetic towards the airlines? Don’t. Full or nearly full flights in conjunction with declining gas prices have enabled U.S.-based airlines to earn the highest profit margins in decades. One trade group estimates that airline made 6% profit margins in 2014, higher than the highest rates in the 1990s. Of course, the task of businesses is to make as much money as they can. But at least they should live up to their own contracts of carriage and other contracts principles just as they claim passengers and website developers should.
Here’s a hat tip to Professor Miriam Cherry and other contracts professors on a well-known industry list serve for news about this story. All opinion and thoughts above are my own.
Wednesday, December 31, 2014
Last month, United Airlines and Orbitz filed a by-now famous lawsuit against the 22-year-old computer specialist who created the website Skiplagged.com. This website helps consumers find the cheapest round-trip airfare possible by buying tickets to a destination to which the traveler does not actually intend to travel, but instead getting off at a layover point which is the truly intended destination and discarding the last portion of the ticket. Roundtrip tickets to certain popular destinations are often much cheaper than to other destinations sought by fewer passengers even though the more popular destinations are further away from one’s point of origin.
To not cause the airline and other passengers undue trouble and delays, this practice, of course, requires not checking in luggage which, it seems, fewer and fewer travelers do anyway (next time you fly, notice the rush to get on board first with suitcases often much bigger than officially allowed and airline personnel deliberately ignoring this for reasons of “competition”).
The cause of action for this lawsuit? “Unfair competition,” and breach of contract because of “strictly prohibited travel,” and tortuous interference with contract.
Unfair competition? I admit that I have not yet read the rather long complaint, but I look forward to doing so very soon. At first blush, however, how can “unfair” can it really be to assist consumers in finding airfare that they want at the best prices available? United Airlines recognizes that there is a discrepancy between its prices to very popular destinations and others on the way, but claims [cite] that if many people “take advantage” of that price differential, it could “hurt the airlines.” Come again? Does it really matter that a customer – with no checked-in luggage – pays whatever price the airline itself has set but simply decides not to use up the entire item purchased? Doesn’t that simply let the airline save gas and potentially give the empty seat to potential stand-by customers? Does it matter to a newspaper that I choose to not read the sports pages? Must I eat the heal of my bread even though I don't like it? What if I really don't like my bread and would rather eat a donut instead, as I thought might be the case?
The issue of breach of contract is arguably a closer one. If airlines “strictly prohibit” the practice of only using part of a ticket, it may be promissory fraud to buy a ticket if one intends at the time of purchase to only use part of it. This could also relate to the purchase of a round-trip ticket only to use it one-way as that too is often cheaper than a one-way ticket, as Justice Scalia found out himself recently.
The Skiplagged.com creator argues that he is only taking advantage of “inefficiencies” in airline travel that travelers have known about for a long time. To me, it seems that airline contracting should work both ways as other types of contracting: airlines take advantage of their bargaining positions as well as their sophisticated knowledge of current and future air travel supply and demand structures. They should do so! I applaud them for that. Jet travel has certainly made my personal and professional life much better than without relatively cheap air travel. But every first year contracts law student also knows (or should know!) that contracting is not and should not be a one-way street. Consumers too are getting more and more sophisticated when it comes to airline travel and other types of online contracting. Websites enable us to inform ourselves about what we wish to spend our money on. As long as consumers do not break the laws or violate established contracting principles, that does not strike me as “unfair competition,” that is simply informed consumerism in a modern capitalist society from which airlines and others have already benefited greatly.
Airlines, wake up: how about working with your customers instead of trying to fight them and modern purchasing trends? How’s this for a thought: start offering one-way tickets for about half of a round-trip ticket just like other transportation vendors (trains, buses, subways) do. Don’t you think that could set you apart from your competition and thus even earn you more customers? If you can fly for a certain amount of money to a certain city, let people pay that only and then simply sell a second ticket for the remaining leg to the more popular end destination where the same plane is headed anyway. Let people off the bus if they want to! Let some one else on instead. It doesn’t seem that hard to figure out how to work with current purchasing trends and your customers instead of resisting the inevitable.
For another grotesquely inappropriate lawsuit by United Airlines against its own customer, see Jeremy’s blog here.
I will blog more on this issue over the days to come. For now, I’m glad I don’t have to head to an airport. Happy New Year!
Wednesday, December 10, 2014
I read an interesting article the other day about parties to a contract agreeing to a broad arbitration provision and then carving out some issues that would be litigated should a problem arise. As with many others, I am involved in the International Commerical Arbitration Moot and, when I read the article, the issue seemed familiar. That is because this year's problem includes a contract with the following two provisions:
"Art. 20 All disputes arising out of or in connection with the present contract shall be finally settled
under the Rules of Arbitration of the International Chamber of Commerce by three arbitrators
appointed in accordance with the said Rules. The seat of arbitration shall be Vindobona,
Danubia, and the language of the arbitration will be English. The contract, including this clause,
shall be governed by the law of Danubia.
Art 21: Provisional measures
The courts at the place of business of the party against which provisional measures are sought
shall have exclusive jurisdiction to grant such measures."
As you would expect, one of the parties in the problem asks for interim relief from the ICC while the other says interim measures are for courts only. Very often, if not most of the time, the Moot problem is inspired by an actually case. Some years the students are able to find the case and, while it is never quite exactly on point, it can be helpful.
I could not help but wonder if this issue within this year's problem was inspired by a botched effort to carve interim relief out from the general provision. It would be pretty sloppy to draft something like the above but my hunch is that it has happened.
I am curious to know how other ICAM team coaches have dealt with the issue. In particular, does the word "finally" in Article 20 have any particular signficance?
Friday, November 28, 2014
Jean Braucher was a giant in our field, and she has been a great friend to this blog, helping us launch our virtual symposium on Stewart Macaulay and contributing to our virtual symposium on Margaret Jane Radin's book, Boilerplate.
Bill Whitford posted the notice provided below on the Contracts Listserv, and he has given us permission to share it here. We will also share any comments that people might want to post with Bill, who will then pass them along to Jean's family.
It is my very sad obligation to inform the contracts community of the death of Professor Jean Braucher of the Arizona College of Law. Jean passed away on Tuesday, Nov. 25th. The cause of death was uterine cancer. Jean was 64 at her death. She was the daughter of the late Professor and Justice Robert Braucher, of the draftpersons of the Restatement, Second, of Contracts. She is survived by her husband and two children, among others.
Jean's academic career was outstanding. She was a prodigious scholar, writing most about contracts, consumer protection and consumer bankruptcy. She did original empirical work, many times, among other things. She was also an activist in many different venues. As a member of the American Law Institute, she took great interest in revisions of the Uniform Commercial Code and the Restatements, particularly as they impact consumer and software contracts. Here is a link to her CV:
Jean was a close friend, a fellow co-editor of the Macaulay et al. casebook (Contracts: Law in Action), my co-author on several other publications, and an intellectual collaborator and colleague for many years. I sometimes felt that we shared a brain, since we so often viewed issues similarly, but that was obviously not the case since over the years I learned a great deal from her work. And she also made many suggestions that helped me improve my own work. No words can adequately express my sense of personal loss at this untimely death.
Update: Bob Lawless has posted In Memoriam on Credit Slips, and quite a few people have added their own words of remembrance for Jean there.
Thursday, November 20, 2014
In a couple of previous posts I've described the International Commerical Arbitration Moot (ICAM) and detailed some aspects of this year's problem. None of this is news to the contracts, sales, and arbitration professors around the country who are involved in this activity. Still I am surprised at how many schools do not have teams. I have also noted the possible use of the yearly ICAM problem as a source or inspiration of exam questions.
For professors who are interested in starting a team there are many things to consider other than substance. These involve selecting and preparing a team. Here at Florida this means trimming a class of 30 or so hopeful students down to a team of 4 to 6. It is a complicated task. We try as much as possible to hold try outs that resemble the actual competition in Vienna. Other coaches know that the ICAM competition requires students to know the facts and law with precision and to have certain mannerisms that the mainly European judges find appealing. For example, speaking slowly is critical since many if not most judges will have English as a second language. Also, the closer the English spoken is to British English, the better. Why? Most of the arbitrators will have learned English abroad. The use of virtually any slang means you should move up your departure date from Vienna because you will not go far in the competition. "Gonna" must be "going to." "Wanna" must be "want to." No "big bucks." No "you guys." etc. If there such a thing as an eloquent yet casual style, that seems to work best. Yes, theater is involved and the coaches are directors as much as teachers. Even "costumes" seem to count. I watched a rather uncomfortable session in which an arbitrator dressed down a competitor who had, well, "dressed down" by not having the top button of his shirt buttoned. I think most coaches would agree the competition starts when the students arrive at the U.S. departure airport because from that point forward they may be rubbing shoulders with the arbitrators they will encounter in Vienna.
I have been a contributing editor at ContractsProf since 2005. The blog has provided a wonderful platform to share contracts-related news stories (as bizarre as possible), summarize important recent cases and self-promote my scholarship. When Frank Snyder roped me into this nearly a decade ago, alot of things were different in varying degrees, especially: the Internet, law schools and the market for legal services. Frank told me at the time that blogging might seem thankless, but it is not. He said that every so often you meet someone at a conference and they realize you are that person who pointed out the connection between Eminem and Sister Antillico and the NDA Justin Bieber presents to house guests. Frank was right. I've met a lot of great people through the blog and its lead to meaningful conversations about contract law and other things.
One of the most rewarding parts of blogging is the record of posts we've created over the years. Sometimes I will do a "quick and dirty" search on Google for the answer to a contracts question and I find the answer on this blog.
I have come to the realization that I just do not have the time to commit to the blog right now. In fact, earlier this week I made a list of things I was going to quit (quite liberating; highly recommended). I am clearing the decks to focus on writing projects and other pursuits, including my new role at Touro as Director of Solo & Small Practice Initiatives. It is where my heart is right now, and I am going to follow that.
In short, thanks Jeremy and previous blog overlords for letting me holdover this long.
With much gratitude for this opportunity, here's a reprise of turkey leftovers in time for Thanksgiving.
Tuesday, November 4, 2014
Jeff Sovern (pictured), with whom readers may be familiar from our recent virtual symposium, has a new paper on SSRN, co-authored with three of his St. John's colleagues, Elayne E. Greenberg, Paul F. Kirgis, and Yuxiang Liu.
The paper is titled "'Whimsy Little Contracts' with Unexpected Consequences: An Empirical Analysis of Consumer Understanding of Arbitration Agreements." Here’s the abstract, though there’s obviously a lot more in the paper itself:
Arbitration clauses have become ubiquitous in consumer contracts. These arbitration clauses require consumers to waive the constitutional right to a civil jury, access to court, and, increasingly, the procedural remedy of class representation. Because those rights cannot be divested without consent, the validity of arbitration agreements rests on the premise of consent. Consumers who do not want to arbitrate or waive their class rights can simply decline to purchase the products or services covered by an arbitration agreement. But the premise of consent is undermined if consumers do not understand the effect on their procedural rights of clicking a box or accepting a product.
This article reports on an empirical study exploring the extent to which consumers are aware of and understand the effect of arbitration clauses in consumer contracts. We conducted an online survey of 668 consumers, approximately reflecting the population of adult Americans with respect to race/ethnicity, level of education, amount of family income, and age. Respondents were shown a typical credit card contract with an arbitration clause containing a class action waiver and printed in bold and with portions in italics and ALLCAPS. Respondents were then asked questions about the sample contract as well as about a hypothetical contract containing what was described as a “properly-worded” arbitration clause. Finally, respondents were asked about their own experiences with actual consumer contracts.
The survey results suggest a profound lack of understanding about the existence and effect of arbitration agreements among consumers. While 43% of the respondents recognized that the sample contract included an arbitration clause, 61% of those believed that consumers would, nevertheless, have a right to have a court decide a dispute too large for a small claims court. Less than 9% realized both that the contract had an arbitration clause and that it would prevent consumers from proceeding in court. With respect to the class waiver, four times as many respondents thought the contract did not block them from participating in a class action as realized that it did, even though the class action waiver was printed twice in bold in the sample contract, including one time in italics and ALLCAPS. Overall, of the more than 5,000 answers we recorded to questions offering right and wrong answers, only a quarter were correct.
Turning to respondents’ own lives, the survey asked if they had ever entered into contracts with arbitration clauses. Of the 303 respondents who claimed never to have done so and who also answered a question asking whether they had accounts with certain companies that include arbitration clauses in their contracts, 264, or 87%, did indeed have at least one account subject to an arbitration clause.
These and other findings reported in this Article should cause concern among judges and policy-makers considering mandatory pre-dispute consumer arbitration agreements. Our results suggest that many citizens assume that they have a right to judicial process that they cannot lose as a result of their acquiescence in a form consumer contract. They believe that this right to judicial process will outweigh what one respondent referred to as a “whimsy little contract.” Our results suggest further that citizens are giving up these rights unknowingly, either because they do not realize they have entered into an arbitration agreement or because they do not understand the legal consequences of doing so. Given the degree of misunderstanding the results demonstrate, we question whether meaningful consent is possible in the consumer arbitration context.
Friday, October 31, 2014
As I noted about a month ago the problem for the 2015 International Commercial Artbitration Moot is wonderful for those who like crossword puzzles, solving problems, reading mysteries, or doing detective work. There are facts, deadends, and read herrings galore. No one goes for a big sleep as far as I can tell but there is the dreaded issue of "fundamental breach." In fact, that appears to be the centerpiece of the problem. Just to make it a little twisty, the fundamental breach is by the buyer whose letter of credit may not conform to the contract. Since even that would be too simple, there is a second letter of credit that may or may not conform but which came after the first arguably non comforming one. There are phone calls, emails, letters, accusations, and even an emergency arbitration that, maybe, should not have occurred at all.
At my school 32 students are now writing briefs for the claimants side of the case and preparing for their oral arguments next week. There is something here even for profs not involved in the Moot. Just reading the problem will spark all kinds of ideas for exam questions suitable for the basic contracts course.
A few weeks ago, we blogged here about how some businesses may pay customers to remove negative reviews from sites such as TripAdvisor.
The blog raised the question of just how reliable online reviews are given this practice and, potentially, the business itself (or friends/family) posting numerous positive reviews, thus making for an entirely fake overall review.
Here’s a twist on that: Yelp will actually remove posts without notifying either the reviewed business or the review poster if the latter has not posted enough other reviews on Yelp. Of course, Yelp decides just how many other reviews are “enough.”
This happened recently to my husband, who is an extremely busy IT professional, but who nevertheless got such a good experience from a small local business that he took the time to post a for him rare review of the business with pictures of the product we had bought. A few days later, the business owner contacted him to ask why he had taken the review down again. He had not, but Yelp had for the above reason.
Of course, Yelp probably wants to avoid the occasional rage posting or an overly rosy review. However, the above practice seems unethical and unreasonable. Review sites will by nature have both good and bad reviews. Yelp has chosen to believe that if a person only posts one thing, it must by definition by unreliable as being too far on either end of the spectrum. However, the truth of the matter is that a lot of busy professionals do not have the time for or interest in posting a large amount of reviews. That, of course, does not make an occasional review unreliable, perhaps quite the opposite: if you don’t post a lot of views, the ones you do must reflect truly good or bad experiences.
Not only does Yelp waste reviewer’s time like this, but it does not even explain this policy on its guidelines section of its website.
A healthy dose of skepticism towards review websites seems warranted, which probably does not surprise too many of us.
Friday, October 24, 2014
Today, October 24, 2014, is a banner day for contracts law because today is the date for two major conferences honoring two giants in the field.
First UC Hastings is hosting a Symposium to Honor Professor Chuck Knapp's 50th Year of Law Teaching. Here is the schedule for that.
8:45 – 9:00 Introduction & Welcome
9:00-10:30 Panel I -- The State of Contract Law
Professor Jay Feinman, Rutgers University - Camden
Professor William Woodward, Santa Clara University
Professor Danielle Kie Hart, Southwestern Law School
Moderator – Professor Harry G. Prince, UC Hastings College of Law
10:45-12:15 Panel II -- The Role of Casebooks in the Future of Contract Law
Professor Deborah Post, Touro Law Center
Professor Carol Chomsky, University of Minnesota
Professor Thomas Joo, UC Davis
Moderator – Professor Nathan M. Crystal, University of South Carolina
12:15-1:15 Lunch: Marvin Anderson Lecture – Professor Keith Rowley, UNLV
1:30-3:00 Panel III -- The Politics of Contract Law
Professor Peter Linzer, University of Houston
Professor Judith Maute, University of Oklahoma
Professor Emily M. S. Houh, University of Cincinnati
Moderator – Professor Jeffrey Lefstin, UC Hastings College of Law
3: 15-4:45 Panel IV -- The Future of Unconscionability as a Limit on Contract Enforcement
Professor David Horton, UC Davis
Professor Hazel Glenn Beh, University of Hawaii
Moderator – Professor William S. Dodge, UC Hastings College of Law
4:45-5:00 Concluding Remarks
In addition, the Temple Law Review is hosting a symposium in honor of Bill Whitford:
And here is the schedule for that:
9:00 - 9:30 Introductory Remarks9:30 - 10:45The Bankruptcy Research Database - Its Development and Impact
- Douglas Baird: The Transformation of Large Corporate Reorganizations 1979-2014 Seen Through the Lens of the BRD
- Bob Lawless: What Legal Empiricists Do Best
- Lynn LoPucki: Measuring Bankruptcy Success
- David Skeel: Rediscovering Corporate Governance in Bankruptcy: The LoPucki and Whitford Studies
11:00 - 12:15 The Lifecycle of Consumer Transactions: Consumer Contracting, Protection, and Bankruptcy
- Melissa Jacoby: Superdelegation
- Ethan Leib: Contra Proferentem and the Role of the Jury in Contract Interpretation
- Angela Littwin: Why Process Consumer Complaints? Then and Now
- Katherine Porter: The Ideal of Rough Justice: Consumer Protection as Business, and Business in Consumer Protection
12:30 - 1:45Lunch Break
- Brief video-presentation from a special guest
- Talk: Bob Hillman: Precedent in Contract Cases and The Importance(?) of the Whole Story; Response by Bill Whitford
2:00 - 3:15 Mixed Methods: Comparative Law, Comparative Methods
- Stewart Macaulay: Bill Whitford: A New Legal Realist Seeking to Understand Law Outside the Law School's Doors
- Iain Ramsay: US Exceptionalism and the Comparative Study of Consumer Bankruptcy
- Jay Westbrook: The Application of the Model Law on Cross-Border Insolvency in the United States, Canada, and the United Kingdom
- Jean Braucher: Examination as a Method of Consumer Protection
3:30 - 4:00 Free for All: What Don't You Know That You Should Know?
Yesterday's New York Times included a "The Upshot" column by Jeremy B. Merrill. The print version was entitled Online, It's Easy To Lose Your Right to Sue [by the way, why can't the Times be consistent in its capitaliziation of "to"?], but the online version's title tells us how easy, One-Third of Top Websites Restrict Customers' Right to Sue. The usual way they restrict the right is through arbitration provisions and class-action waivers. They do so through various wrap mechanisms so that consumers are bound when they click "I agree" to terms they likely have not read and perhaps have not even glanced at.
Some websites attempt to bind consumers by stating somewhere on their websites that consumers are bound to the website's and the company's terms simply by using the company's website or its products (I'm looking at you, General Mills). The only thing surprising about this, given the Supreme Court's warm embrace of binding arbitration and class action waivers, is that two-thirds of websites still do not avail themselves of this mechanism for avoiding adverse publicity and legal accountability.
As I was reading this article, it started to sound very familiar -- a lot like reading this blog. And just as I was beginning to wonder why the Times was not ' quoting our own Nancy Kim, the article did just that:
When courts decide whether a website’s terms can be enforced, they look for two things, Ms. Kim said: First, whether the user had notice of the site’s rules; and second, whether the user signaled his or her agreement to those rules. Courts have ruled that simply continuing to use the site signals agreement. When browsewrap agreements have been thrown out, as in the Zappos case, courts have said that the site’s link to the terms wasn’t displayed prominently enough to assume visitors had noticed it.
Congratulations to Nancy on such prominent notice of her scholarship!
And congratulations to the Times for paying attention!
Monday, October 6, 2014
The problem is up for the 22nd Annual International Commerical Arbitration Moot. Between now and early December, teams will write the brief for the Claimant. In mid January the brief for the Respondent is due. And then, in March, 200-300 teams from law schools around the world will gather in Vienna for the competition.
There is no limit to the number of students on a team but they must argue in pairs. Typically one student handles the procedural issues and one the substantive or the CISG issues. There are 4 rounds to start with the 64 highest scoring teams moving on to a single elimination tournament.
The problems identify an actual arbitration agency whose rules govern the procedures, This year the procedural issues center around whether the Claimant the right to make an emergency appeal to the arbitration agency and whether the Respondent may join the parent company of the Claimant for purposes of its counterclaim. In one of those puzzles that charactizes the Moot, the parent company "endored" the contract at issue but claims not to be a party do it.
The substantive issue concerns a letter of credit which does not conform (or does it?) to what was called for in the contract. The buyer attempts to "cure" in a sense but the seller says "too late, we have already avoided the contract." Thus, it raises avoidance and cure isssues under the CISG.
This is, at best, a first cut on the problem. As the weeks pass, the problem will reveal itself as the layers are peeled off.
I am happy to trade notes and views with other interested profs.
[In the meantime, try to find the third man.]
Monday, September 29, 2014
The NYT had an article about e-cigarette label warnings today that was eerily appropriate given our symposium on Omri Ben-Shahar and Carl Schneider's book, More Than You Wanted to Know: The Failure of Mandated Disclosure. The reporter must have been following our blog symposium and seems to have come up with an example that supports the arguments made by Ben-Shahar and Schneider. The article explains how big tobacco companies have been putting warning labels on their e-cigarette packages that are more extensive than those on their tobacco cigarettes. There are several possible explanations for why they are doing this, ranging from the least cynical (they want to be good corporate citizens) to the more cynical (they are trying to set up their smaller e-cigarette competitors for later regulation, possibly reduce demand for e-cigs to boost sales of tobacco cigs, and protect themselves from liability).
I tend to be in the more cynical camp. Big tobacco companies are both attempting to protect themselves from liability by setting forth as many potential dangers of their product as they can, and they are positioning e-cigarettes as "just as" dangerous, if not more, than plain old tobacco cigarettes. The article notes something that readers of the book and blog already know - the disclosures have little effect on consumer purchasing decisions because nobody reads them. The strategy of big tobacco supports the arguments made by Ben Shahar and Schneider that disclosure hurts rather than helps consumers except there's one crucial difference - the companies are putting these extensive disclosures on the labels themselves. They are not mandated. By voluntarily disclosing the harms of e-cigs, big tobacco companies both protect themselves from liability and avert regulation. Doing away with mandated disclosure wouldn't prevent this kind of strategic selective disclosure --selective and strategic in the sense that these companies are only forthcoming with certain products and with certain types of disclosure. It's revealing that one of the companies claiming that e-cigarettes warrant more extensive disclosure than their tobacco counterparts is RJ Reynolds, which succesfully sued the FDA to prevent mandated graphic warnings on cigarette packages.
So - the battle about disclosure continues to rage....
Monday, September 15, 2014
This week we will begin our virtual symposium on the new book by Omri Ben-Shahar and Carl E. Schneider, More Than You Wanted to Know: The Failure of Mandated Disclosure.
This week, the symposium will include contributions by the contracts law scholars introduced below:
Aditi Bagchi teaches Contracts and Labor Law at the Fordham University School of Law, where she is an Associate Professor. She writes about the nature of contractual obligation, contract interpretation, and questions in political and moral philosophy as they arise in contract. She has explored these issues with respect to employment and consumer contracts in particular. She has a related interest in the comparative political economy of contract, labor and corporate law.
Links to Professor Bagchi's academic papers can be found on SSRN here.
Steven J. Burton is the John F. Murray Professor of Law at the University of Iowa. He currently teaches Contracts and a Seminar on Advanced Problems in Contract Law. He joined the law faculty in 1977 after four years with the Office of the Legal Adviser at the U.S. Department of State.
Professor Burton is the author or co-author of five books: Elements of Contract Interpretation (Oxford University Press, 2009); An Introduction to Law and Legal Reasoning (Wolters, Kluwer, 3d ed. 2006); Principles of Contract Law (West, 4th ed. 2012); Contractual Good Faith: Formation, Performance, Breach, Enforcement (Little, Brown & Co., 1995) (with Eric G. Andersen); and Judging in Good Faith (Cambridge University Press, 1992). He has editedThe Path of the Law and Its Influence: The Legacy of Oliver Wendell Holmes, Jr. (Cambridge University Press, 2000) and co-edited American Arbitration Principles and Practise (Practising Law Institute, 2008) (with Robert B. von Mehren and George W. Coombe, Jr.). He is also the author of numerous journal articles, including "The New Judicial Hostility to Arbitration: Federal Preemption, Contract Unconscionability, and Agreements to Arbitrate" 2006 Journal of Dispute Resolution 469; "Combining Conciliation with Arbitration in International Commercial Disputes," 18 Hastings Journal of International and Comparative Law 637 (1995); "Good Faith in Articles 1 and 2 of the Uniform Commercial Code: The Practice View," 35 William and Mary Law Review 1533 (1994); "Default Rules, Legitimacy, and the Authority of a Contract," 2 Southern California Interdisciplinary Law Journal 115 (1993); "Racial Discrimination in Contract Performance: Patterson and a State Law Alternative," 25 Harvard Civil Rights - Civil Liberties Law Review 431 (1990); "Ronald Dworkin and Legal Positivism," 73 Iowa Law Review 109 (1987); and "Breach of Contract and the Common Law Duty to Perform in Good Faith," 94 Harvard Law Review369 (1980).
Ryan Calo is an assistant professor of law at the University of Washington, where he co-directs the Tech Policy Lab, and an affiliate scholar at the Stanford Center for Internet and Society. Professor Calo researches the intersection of law and emerging technology, with an emphasis on robotics and the Internet. His work on drones, driverless cars, privacy, and other topics has appeared in law reviews and major news outlets, including the New York Times, the Wall Street Journal, and NPR. Professor Calo has also testified before the full Judiciary Committee of the United States Senate and was a speaker at the Aspen Ideas Festival.
Links to Professor Calo's academic papers can be found on SSRN here.
Robert Hillman is the Edwin H. Woodruff Professor of Law at Cornell University. He has written extensively on contracts and contract theory, the Uniform Commercial Code, and related jurisprudence. His articles have appeared in the Stanford, NYU, Columbia, Chicago, Michigan, Northwestern, Duke, and Cornell law reviews, and he is the author of The Richness of Contract Law (1997) and a coauthor of the Sixth Edition of White, Summers, and Hillman, Uniform Commercial Code (2012 through 2014). A 1972 graduate of Cornell Law School, Professor Hillman clerked for the Hon. Edward C. McLean and the Hon. Robert J. Ward, both U.S. District Judges for the Southern District of New York. After private practice with Debevoise & Plimpton in New York City, he began his teaching career at the University of Iowa College of Law. Hillman joined the Cornell Law School Faculty in 1982, and, in addition to teaching and authoring or co-authoring several major contracts and commercial law works, he served as Associate Dean from 1990-1997. An arbitrator, consultant on commercial litigation, and the Reporter for the American Law Institute's Principles of the Law of Software Contracts, Professor Hillman teaches contracts, commercial law, and the law of e-commerce. He also teaches a class on the nature, functions, and limits of law for Cornell University's Government Department.
Professor Hillman's c.v., including a list of publications can be found here.
Ethan Leib is Professor of Law at Fordham Law School. He teaches in contracts, legislation, and regulation. His most recent book, Friend v. Friend: Friendships and What, If Anything, the Law Should Do About Them explores the costs and benefits of the legal recognition of and sensitivity to friendship; it was published by Oxford University Press. Leib’s latest scholarly articles will appear in Legal Theory (on fiduciary and promissory theory) and the Georgetown Law Journal (on “regleprudence” and OIRA). He has also written for a broader audience in the New York Times, USA Today, Policy Review, Washington Post, New York Law Journal, The American Scholar, and The New Republic. Before joining Fordham, Leib was a Professor of Law at the University of California–Hastings in San Francisco. He has served as a Law Clerk to then-Chief Judge John M. Walker, Jr., of the U.S. Court of Appeals for the Second Circuit and as a Litigation Associate at Debevoise & Plimpton LLP in New York.
Linkes to Professor Leib's academic papers can be found on SSRN here.
Lauren Willis is Professor of Law at the Loyola Law School, Los Angeles. Professsor Willis clerked for the Office of the Solicitor General of the United States and for Judge Francis D. Murnaghan, Jr. of the United States Court of Appeals for the Fourth Circuit. Before coming to academia, she was a litigator in the Housing Section of the Civil Rights Division of the U.S. Department of Justice and worked with the U.S. Federal Trade Commission on predatory mortgage lending litigation. Professor Willis joined the Loyola faculty in 2004. She has also taught at Stanford Law School, the University of Pennsylvania Law School and Harvard Law School. She was honored by Loyola’s graduating day class with the 2008 Excellence in Teaching award.
Her recent publications include:
- When Nudges Fail: Slippery Defaults, U. Chi. L. Rev.
- The Financial Education Fallacy, American Econ. Rev.
- Will the Mortgage Market Correct? How Households and Communities Would Fare If Risk Were Priced Well, Conn. L. Rev.
- Against Financial Literacy Education, Iowa L. Rev.
- Decisionmaking and the Limits of Disclosure: The Problem of Predatory Lending: Price, Maryland L. Rev.
Stay tuned. It's going to be a very interesting week on the blog!
Monday, September 8, 2014
I am sure most readers know what the CISG is. I was surprised to learn that some are not aware of the International Commercial Arbitration Moot (ICAM) held in Vienna annually over the weekend and then into the week just prior to Easter. It is maybe the most rewarding experience I have had as a teacher. The organizers of the Moot release the problem on the first Friday of October. It is usually a spawling but somewhat realistic fact pattern, Typically there are procedural issues and substantive issues dealing, obviously, with international contract law. Over two hundred teams from around the world gather for 4 days of prelims. The top 64 then go into a single elimination tournament.
At my school, like others, we organize a course around the Moot. In the fall, the students first have 5 weeks of regular class sessions on the CISG followed by an exam. After that, the problem comes out and they have 4-6 weeks to write their briefs. Finally, there are oral arguments. From those exercises, 4 to 6 students are selected to be on the team. (all students earn 3 credits whether they make the team or not) Those students must prepare a claimant's and a respondent's brief and practice twice a week until the competition. It requires dedication.
There are a couple of drawbacks. First is it expensive to send students and a coach to Vienna. At Florida we have been fortunate to have support from the International Section of the State Bar, private donors, and the Law School. Second, the judging in Vienna can be hit and miss. In the four day premlinary period the abitrators (3 each per session) may apply different standards and are sometimes not well prepared. Thus, the goals be for the students must be to learn at much as they can, network, and enjoy, for a few days, interacting with students from all over the world. The winning teams are always superb but some left out of the tournament may also be superb.
I realize there are maybe only a handful of people out there who do not know of this opportunity but I've found it to be very worthwhile (and also hardwork)
In our first post about the Salaita case, we lamented how few posts really wrestled with the contractual (or promissory estoppel) issues in the case. Professor Kar’s post is the most detailed investigation of the contractual issues to appear to date. We also queried whether Salaita's potential constitutional claims against the University of Illinois might turn on the question of whether or not he had a contract with that institution, which is also the institution at which Professor Kar (pictured, at right) teaches. Kar notes:
Critics of the Chancellor’s decision argue that, even if there was no contract, Salaita’s rights to academic freedom vis-à-vis the University of Illinois should apply with equal force at the hiring as at the firing stage.
Professor Kar seems to disagree. He does not rule out entirely the possibility of constitutional and academic freedom claims in the absence of a contract, but he does note that "the existence of a contract should change the nature of the underlying arguments on both sides of this case."
Peofessor Kar's analysis is both passionate, in dealing with an issue that is creating genuine anguish at his institution, and dispassionate, in treating the Salaita case as a forum for the elaboration of his theory of contract law as empowerment. Based on the publicly-available facts, Professor Kar thinks Salaita's contractual claims are quite strong. As he puts it, "If the publicly known facts are all there is to know about this case, then I believe there very likely was a contract in this case, and that it may well have been breached." This is so because (in short), Salaita's offer letter incorporated by reference the American Association of University Professors' (AAUP) principles of academic freedom, and the AAUP interprets those principles to require (at least) warnings hearings before someone in Salaita's position can have his offer letter revoked. At this point, Professor Kar argues, his view of contract as empowerment becomes relevant to the analysis:
The power of the marketplace—in both academic and non-academic contexts—depends on parties’ capacities to make commitments that have certain objective elements to them. In this particular case, this means that the condition of Board of Trustee approval gave the Board some authority to refuse Salaita’s appointment—but not necessarily the authority it subjectively believes it has. If the Board’s unwillingness to approve this appointment reflects an undisclosed and idiosyncratic understanding of its authority, which diverges too sharply from the shared understandings of the national academic community, then there is likely a contract here. And it may well have been breached.
Professor Kar then proceeds to a discussion of the way out for the University of Illinois, which probably would involve a retreat. If the facts are as Professor Kar believes them to be, the Chancellor should "admit that the Salaita decision was in error and state that this matter is—properly speaking—outside of her hands."
I do not disagree with Professor Kar's analysis but I would like to push him on one point that I think is vital in this case and in his theory of empowerment generally. As a normative theory, I find Professor Kar's theory attractive, but I wonder about its applicability to situations of grossly unequal bargaining power, and I believe the Salaita case is such a situation. Professor Kar takes up this issue in earnest at the end of the second part of his work on contract as empowerment On page 73, Professor Kar acknowledges that parties "rarely enter into contracts from perfectly equal bargaining positions" and he notes that, "[i]t would therefore be significantly disempowering if parties were only bound by contracts negotiated in these circumstances."
But parties are routinely bound in circumstances when they have no real bargaining power. In such circumstances, even if Professor Kar is right that contracts law ought to be about empowerment, much of contract law (and this point has been made at great length by Peggy Radin, Nancy Kim, Oren Bar-Gill and others), is currently extremely disempowering for ordinary consumers and even for small businesses when (as in Italian Colors) they have to contract with corporate behemoths.
Professor Kar's assessment of Salaita's contractual claims turns on communal understandings of the contractual obligations that arise in such circumstances:
The University of Illinois is part of a much larger academic community, which extends well beyond the confines of Illinois. Its contractual interactions with other members of this community will thus be subjected to some tests for consistency with national understandings of how these interactions typically work. This includes national understandings about the appropriate relationship between government-appointed entities, like the Board of Trustees, and faculty decisions about hiring at academic institutions that aim to pursue knowledge impartially and in the absence of political influence.
As the conversation that has been taking place on the blogosphere thus far suggests, there may be no national consensus on the subject. Some contracts scholars will agree with Professor Kar; others, like Dave Hoffman, think that Salaita's contractual and promissory estoppel claims are weak, and they are weak precisely because Salaita lacked the bargaining power to protect himself. And if Salaita's case were to go before an adjudicatory body, it will not be decided based on whether contracts ought to be empowering but on whether the already empowered University of Illinois can escape any contractual obligation that might empower Professor Salaita.