January 28, 2013
Quick Thoughts on George Mason LEC Workshop on the Economics of Contracting
I'm about to leave Fort Myers, Florida after a great weekend on Captiva Island, where I participated in the George Mason LEC Workshop for Law Professors on the Economics of Contracting. Economists sure know how to organize a workshop. (By the way, the picture depicts a bird that was hanging out on the balcony of my hotel room).
Over at George Mason they understand incentives. Participants pay a $500 deposit that is only refunded after all sessions (including dinners) are attended. After attending all sessions, participants not only see a return of the deposit but additionally receive a $500 honorarium. Lodging and all meals were covered and they couldn't have paid for better weather (on the day I got there the weather was about 70 degrees warmer than New York). I am still waiting for someone to try to sell me a timeshare.
Broadly, the goal of the program is to expose legal academics to economics. The homework (though voluminous) was thoughtfully compiled and the instruction was engaging. Some participants were already fairly exposed to law and economics others (including myself) had tinkered on the margins in researching but had no background whatsoever. I found the material and the teaching very accessible.
The discussion included contractual (and non-contractual) solutions to hold up problems and price readjustment. We also discussed retail price maintenance and slotting fee contracts. I found the discussion of vertical integration most interesting, though I had to suspend my disbelief when told not to consider the liability implications of choosing to employ someone v. hire them as an indpendent contractor. There were other times when I had to suspend disbelief about psychology and decisionmaking capacity. So, I suppose this is the timeshare. While I didn't buy it, I do feel enriched for having spent some time considering these problems through a classical economics lens.
I highly recommend this and other George Mason programs to anyone with even a passing interest in economics. I learned that reputation matters (though to varying degrees depending on which economists you read). Whatever the case may be, George Mason deserves its excellent reputation for organizing these outstanding workshops. Thanks!
[Meredith R. Miller]
August 03, 2012
ABA Program on 'Wrap Contracts
For those of you attending the ABA conference in Chicago this week, there is a CLE program on Clickwraps, Browsewraps and Why ESIGN Deserves a Bum Rap. The speakers are Mark J. Furletti of Ballard Spahr, Christine Poulon of PayPal and yours truly. The panel is from (the unspeakable hour of) 8:00am-10:00am. If any of you early risers are at the meeting in Chicago, stop by for an earful about the state of electronic contracts.
March 06, 2012
Maybe my imagination isn't that imaginative....
At the wonderful contracts conference this past weekend at Thomas Jefferson (yes, thanks again, Eniola), I learned that, when they excavated to build the school's fabulous new building, remains of a wooly mammoth were discovered. Coincidentally, just this fall, my final exam concerned a contract for the sale of real property. After contract but before closing, the seller had sprinkler repairs done on the lawn and the repair company discovered the skeleton of a dinosaur. Neither buyer or seller was aware of the skeletal remains at the time of contract. Seller wants to rescind. Mutual mistake?
This semester we walked through a hypo about a lease that allows the tenants to keep one "household pet." "Household pet" is nowhere defined in the lease. Tenant obtains a kangaroo to keep as a pet. Our task was to discuss how a court would go about figuring out whether a kangaroo is a "household pet." I thought this imaginative until today, when this story came to my attention. It doesn't answer the question whether a kangaroo is a "household pet," but it does suggest that maybe my imagination isn't that imaginative.
[Meredith R. Miller]
December 26, 2011
AALS Contracts Annual Meeting Program
If you are attending next week's AALS Annual Meeting, please join us for the Contract Section's program, New Voices in Contracts Scholarship, scheduled for Saturday, January 7, 2012, from 1:30 to 3:15 p.m., at the Marriott Wardman Park Hotel. The program will feature three junior scholars whose proposals the selection committee chose from the many quality responses to our CFP.
In alphabetical order, the featured speakers and their topics are
Aditi Bagchi (University of Pennsylvania Law School), Parallel Contract;
Mohsen Manesh (University of Oregon School of Law), Contractual Freedom under Delaware Alternative Entity Law; and
Emmanuel Voyiakis (London School of Economics & Political Science, Department of Law), Contract Law and Reasons of Social Justice.
There will be a brief business meeting following the program.
I look forward to seeing many of you in less than two weeks.
[Keith A. Rowley]
November 05, 2011
AALS Contracts Section Call for Proposals
The Executive Committee of the AALS Contracts Section solicits proposals for the Section’s Annual Meeting program New Voices in Contracts Scholarship, scheduled for Saturday, January 7, 2012, from 1:30 to 3:15 p.m., at the Marriott Wardman Park Hotel.
Invitation: We invite proposals exploring any aspect of contract law, theory, policy, and practice writ large (including, but not limited to, bankruptcy/insolvency, commercial law, consumer law, dispute resolution regimes, family law, insurance law, legal systems, and restitution, in addition to more traditional contract topics) from a behavioral, cognitive, comparative, critical, doctrinal, economic, empirical, equitable, historical, institutional, interdisciplinary, jurisprudential, pedagogical, philosophical, policy-driven, political, or sociological perspective. We will entertain proposals based on work in any stage of completion from formulation to a finished paper, but prefer proposals that are not based on work already published in a mainstream American academic law journal.
Program: Our goal is to provide a forum for contracts scholars who have been active in the field for ten years or less, especially those who are pre-tenured -- although we may consider proposals from more senior scholars whose work may not be widely known to the AALS Contracts Section's membership. We will give some preference to proposers who have not recently been part of an AALS Contracts Section annual meeting program. Depending on the number of proposals we receive and select, we may invite more seasoned contracts scholars whose expertise overlaps with one or more accepted proposals to serve as discussants for one or more presentations.
Submitting a Proposal: Please e-mail an abstract, précis, outline, draft, or paper to section chair Keith Rowley (email@example.com), chair-elect Tom Joo (firstname.lastname@example.org), and immediate past chair Lisa Bernstein (LBernst621@gmail.com) no later than 5:00 p.m. PST, Friday, December 2, 2011, indicating how best to contact you between then and December 10. While we will reserve at least one spot for submissions received by the foregoing deadline (and may consider late proposals), we will begin reviewing proposals as we receive them and may begin extending offers as early as Wednesday, November 30th.
[Keith A. Rowley]
December 30, 2010
AALS Contracts Section Annual Meeting Program
Speaking of next week's AALS annual meeting, please plan to attend the Contracts Section's annual meeting program, Navigating Lombard Street in a Fog: Seeking (or Ignoring) Landmarks of Intent and Context, next Thursday, January 6th, from 2:00 to 5:00 p.m., in the Divisadero Room, Second Floor Level, Parc 55 Wyndham San Francisco Union Square.
The program will consist of two roundtables, during and after which we hope to elicit audience comments and questions. A brief business meeting will follow the program's conclusion.
Intent to Contract and to be Bound by Specific Terms
Thomas W. Joo (UC-Davis), Moderator
Gregory M. Klass (Georgetown), Intent to Contract in Theory and Practice
Qi (George) Zhou (Sheffield), The Use of Implied Intention in English Contract Law
Tal Kastner (J.D., Yale; Ph.D. candidate (English), Princeton), The Persisting Ideal of Agreement in an Age of Boilerplate
Nancy S. Kim (California Western, visiting at Ohio State), Three Faces of Intent in Contract Formation
Jarrod Wong (U. of Pacific/McGeorge), Class Arbitration Waivers: A Case Study of Constructive Intent and the Limits of a Consent-Based Theory of Contract Law
Intended Meaning (and Effect) of "Agreed" Terms
Keith A. Rowley (UNLV), Moderator
Peter Linzer (Houston), The Problem with Plain Meaning and the Distinction Between Actual Intent in Contract Interpretation and Originalism in Constitutional Interpretation
Steven J. Burton (Iowa), Context, Plain Meaning, and the Objective Theory of Contract Interpretation
Adam B. Badawi (Washington U.), Interpretive Preferences and the Limits of the New Formalism
Michelle E. Boardman (George Mason), Insuring Understanding: The Tested Language Defense
December 03, 2010
Reminder: AALS Contracts Section Call for Proposals
The Executive Committee of the AALS Contracts Section solicits proposals for the Section’s Annual Meeting program Navigating Lombard Street in a Fog: Seeking (or Ignoring) Landmarks of Intent and Context, scheduled for Thursday, January 6, 2011 from 2:00 to 5:00 p.m.
The Topic: Consent supposedly distinguishes contracts from other private or public rights and duties by requiring that each contracting party manifest its intent, at the time it enters into the contract, to be bound to the contract. This program will explore:
♥ whether intent – objectively manifested or otherwise – is or should be an integral part of contemporary contract law, practice, and theory;
♥ the extent to which context affects or should affect a party’s ability to consent, the significance of its manifested consent, or both; and
♥ assuming that intent and context matter, how best to determine and give effect to the parties’ intent in the context of their transaction.
We are particularly interested in fostering discussion of (1) intent to be bound, (2) intent to be bound to specific terms, (3) the intended meaning of agreed terms, (4) intended circumstances under which a party may avoid or delay performing their duties, and (5) intended remedies available or foreclosed if a party does not perform as agreed under circumstances that neither invite nor allow avoidance or delay.
The Program: Inspired by last year’s lively roundtable discussion of pedagogical approaches and by a fairly robust body of recent scholarship relevant to our topic, and paying homage to the increasingly rare, but fondly remembered, two-semester Contracts course, we seek speakers for two (or more) discussion panels, which the planning subcommittee will organize topically. We have secured a 180-minute time slot, which should facilitate a broader, more diverse, and more participatory discussion than the typical 100-minute AALS program permits.
Publication: While we hope that this program will ignite or further fuel already-burning scholarly interest across its broad scope, we do not require an original paper proposal and have not pre-arranged publication of any papers discussed at or arising from the program (although we may explore publishing a program transcript if we can find a suitable venue and all of the speakers consent).
Submitting a Proposal: If you would like to participate as a panelist, please contact program chair Keith Rowley (email@example.com), no later than 12:00 p.m. PST, Monday, December 6th, indicating the aspect(s) of the topic that most interest(s) you; from what perspective(s) you propose to discuss it/them; if applicable, the scholarly work – yours or someone else’s, published or in progress – you plan to draw upon; and how best to contact you between now and December 10. While the program planning subcommittee will reserve some spots for submissions received by the foregoing deadline (and may consider late proposals), we will begin to review proposals as we receive them and may begin extending offers as early as Monday, November 29th.
We apologize for the short notice, but hope to capitalize on it by attracting participants who might have been unwilling or unable to commit themselves in September or early October or who, like some of us, were stymied by the ongoing labor strife at the AALS headquarters hotel. We are meeting; we are meeting elsewhere; and we ask that you help make this a well-attended, informative, and interactive program.
Thank you for your consideration.
[Keith A. Rowley]
December 01, 2010
Drafting executive compensation contracts
There aren't many areas these days where contracts have to be more carefully crafted than that of executive compensation. So you may be interested in a webinar that BNA is putting on next week. Here's the info:
Living on the Edge: Avoiding 409A and 162(m) Pitfalls in a Shifting Environment
Thursday, December 09, 2010
1:00 PM - 2:30 PM ET
Agenda: This BNA webinar will explain how to approach the design and administration of your executive compensation programs (including employment and severance agreements) and avoid the ever-tightening net of tax penalties under Section 409A and 162(m). It will cover common "traps for the unwary" and foot faults that may result in unintentional violations of Sections 409A and 162(m) and provide practical suggestions to guide decision making in these areas to optimize compliance. It will focus on areas where compliance has proven particularly difficult and flag common situations that present the highest risk of IRS challenge. Attendees will acquire practical information on how to avoid common 409A and 162(m) violations, how to spot the violations when they have occurred, how to correct violations when possible, and how to assess penalties when the violation cannot be corrected. Since attendees are often not the only ones in their organizations responsible for the oversight of matters that can lead to 409A and 162(m) violations, attendees will leave with suggestions and tools to aid them in maximizing success by coordinating with others throughout their organizations.
- Traps for the unwary -- the 10 most common situations that risk 409A or 162(m) violations, and how to recognize and deal with them
- Common foot faults - how drafting or operational mistakes that seem minor can result in serious tax penalties
- Implementing compliance procedures, including coordination within the organization
- Presentation of practical tips for spotting compliance issues requiring legal review
- What to do if a violation is discovered - panic, corrections, penalties, gross-ups
July 07, 2010
Now in Print
Douglas G. Baird, The Holmesian Bad Man's First Critic, 44 Tulsa L. Rev. 739 (2009).
Matthew K. Bell, Forget What You Intended: Surprisingly Strict Liability and COGSA Versus Carmack, 37 Transp. L.J. 57 (2010).
Molly Brooks, The "Seller-Friendly" Approach to MAC Clause Analysis Should be Replaced by a "Reality-Friendly" Approach, 87 U. Det. Mercy L. Rev. 83 (2010).
Edwin Butterfoss & H. Allen Blair, Where is Emily Litella When You Need Her?: The Unsuccessful Effort to Craft a General Theory of Obligation of Promise for Benefit Received, 28 Quinnipiac L. Rev. 385 (2010).
David Cabrelli & Rebecca Zahn, Challenging Unfair Terms: Some Recent Developments,  Jurid. Rev. 115.
Ross Dillon, A Bale of Wool,  N.Z.L.J. 145.
Lisa A. Fortin, Note, Why There Should Be a Duty to Mitigate Liquidated Damages Clauses, 38 Hofstra L. Rev. 285 (2009).*
James Gordley, The Origins of Sale: Some Lessons from the Romans, 84 Tul. L. Rev. 1437 (2010).
Sam S. Han, Predicting the Enforceability of Browse-wrap Agreements in Ohio, 36 Ohio N.U. L. Rev. 31 (2010).
Robert A. Hillman & Maureen A. O'Rourke, Principles of the Law of Software Contracts: Some Highlights, 84 Tul. L. Rev. 1519 (2010).**
Kristin L. Hines, Note, Examining Contractual Models for Transferring Environmental Liability: How They Work and Where They are Headed, 11 Vt. J. Envtl. L. 395 (2009).
Martin A. Hogg, Promise: The Neglected Obligation in European Private Law, 59 Int'l & Comp. L.Q. 461 (2010).
Joshua Karton, Contract Law in International Commercial Arbitration: The Case of Suspension of Performance, 58 Int'l & Comp. L.Q. 863 (2009).
Nancy S. Kim, Expanding the Scope of the Principles of the Law of Software Contracts to Include Digital Content, 84 Tul. L. Rev. 1595 (2010).**
Juli Loden, Comment, The Earth is Not Flat, and "A Quasi Contract is Not a Contract at All" -- Tennessee Restitution and Unjust Enrichment Law, 11 Transactions: Tenn. J. Bus. L. 167 (2010).
Susana López-Bayón & Manuel González-Díaz, Indefinite Contract Duration: Evidence from Electronics Subcontracting, 30 Int'l Rev. L. & Econ. 145 (2010).
Andrew C. W. Lund, Opting Out of Good Faith, 37 Fla. St. L. Rev. 393 (2010).
Larry A. DiMatteo & Samuel Flaks, Beyond Rules, 47 Hous. L. Rev. 297 (2010).
Juliet M. Moringiello & William L. Reynolds, What's Software Got to Do with It? The ALIPrinciples of the Law of Software Contracts, 84 Tul. L. Rev. 1541 (2010).**
Otto Sandrock, The Choice Between Forum Selection, Mediation and Arbitration clauses: European Perspectives, 20 Am. Rev. Int'l Arb. 7 (2009).
Hannibal Travis, The Principles of the Law of Software Contracts: At Odds with Copyright, Consumer, and Employment Law?, 84 Tul L. Rev. 1557 (2010).**
Hal R. Varian, Computer Mediated Transactions, 100 Am. Econ. Rev. 1 (2010).
Daniel A. Verrett, Comment, Delay Damages Sufficient for a Maritime Lien?: The Economic Loss Doctrine Brings Certainty to the High Seas, 47 Hous. L. Rev. 463 (2010).
Kate Zdrojeski, Note, International Ice Hockey: Player Poaching and Contract Dispute, 42 Case W. J. Int'l L. 775 (2010).
* - Despite a somewhat awkward title -- the point is to mitigate damages, not mitigate clauses -- this Note is worth a read, arguing that, inter alia, preventing economic waste, a penalty on the breaching party, and windfall profits for the nonbreaching party, as well as promoting consistent remedial principles, should oblige a court (or arbitrator) to not mechanistically assess the damages to which the parties agreed in their contract.
** - These four essays comprise a mini-symposium on the ALI's Principles of the Law of Software Contracts, arising out of a program I organized and moderated at January's AALS Annual Meeting in New Orleans. (Yes, that's January 2010.) Bob Hillman, Maureen O'Rourke, and Juliet Moringiello spoke at the program, as did Amy Boss and Florencia Marotta-Wurgler. Nancy Kim and Hannibal Travis responded to a supplemental call for papers to accompany those the program speakers were contributing to the print symposium.
For those who complain about the sometimes sluggish processes of student-edited law journals (for example here, including the comments), the program was on January 9, final drafts were due February 15, and the print issue arrived in my campus mailbox on June 2. Unfortunately, this pace proved too brisk for several authors lined up to contribute to the print symposium (including yours truly). I hope to collect those authors' contributions, revised-as-appropriate versions of these four essays and other essays and articles first appearing elsewhere, and some original shorter response and reply pieces, in a book coming soon -- at least by astronomical or paleontological standards -- from an as-yet-undisclosed legal academic publisher.
[Keith A. Rowley]
February 26, 2010
Spring Contracts Conference: Day One
The 2010 Spring Contracts Conference begins today at UNLV's William S. Boyd School of Law. Here's Friday's line-up:
The Contract Law System and Power – Past, Present, and Future
Chair: Jay M. Feinman (Rutgers-Camden)
Hila Keren (Hebrew U. of Jerusalem), Considering Affective Consideration
Nancy S. Kim (Cal Western), ‘Wrap Contracts as Sword, Shield, Crook, and Drawbridge
Amy J. Schmitz (Colorado), Pizza-Box Contracting: An Empirical Exploration of Consent
Danielle Kie Hart (Southwestern), Smoke, Mirrors & Contract Law
Incomplete Information and Contract Law
Chair: Keith A. Rowley (UNLV)
Robert Anderson (Pepperdine), Information, Incentives, and Disclosure in the Law of Contracts
H. Allen Blair (Hamline), No-Reliance Clauses
Yair Listokin (Yale), Bayesian Interpretation
Shawn J. Bayern (Florida State), Rational Ignorance, Rational Closed-Mindedness, and Modern Economic Formalism in Contract Law
Contract Law’s Intersection with Business Law
Chair: Nancy B. Rapoport (UNLV)
Daniel S. Kleinberger (William Mitchell), Battle Report from the Undiscovered Territory – The Law of “Contractual Organizations” Continues its Silent War on the Common Law of Contract
Andrew A. Schwartz (Colorado), A “Standard Clause Analysis” of the Frustration Doctrine and the Material Adverse Change Clause
Lydie N. Pierre-Louis (St. Thomas (FL)), Mini-Tender Offers: The Lack of Federal Jurisdiction and the Failure of Fundamental Contract Law Principles to Protect Investors
Keynote: Omri Ben-Shahar (U. of Chicago), The Failure of Mandated Disclosure
Arbitration and Unconscionability in Rent-a-Center West v. Jackson and Elsewhere
Chair: Jean R. Sternlight (UNLV)
Charles L. Knapp (UC-Hastings), Blowing the Whistle on Mandatory Arbitration: Unconscionability as a Signaling Device
Karen Halverson Cross (John Marshall (IL)), Letting the Arbitrator Decide? Unconscionability and the Allocation of Authority Between Courts and Arbitrators
Christopher R. Drahozal (Kansas), Rent-A-Center and Institutional Arbitration Rules
Thomas J. Stipanowich (Pepperdine), Contracts and Conflict Management: Another Look
Forming Contracts and Similar Relationships
Chair: James W. Fox, Jr. (Stetson)
Michael Pratt (Queen's U. (Ontario)), What is a Promise?
Val D. Ricks (South Texas), The Continued Relevance of Consideration
Janet Ainsworth (Seattle), Beyond Status and Contract: Relational Estoppel as a Source of Rights and Obligations in Intimate Relationships
Andrea B. Carroll (LSU), Reviving Proxy Marriage
Vive la Différence!: Comparative Contract Theory
Chair: Daniel D. Barnhizer (Michigan State)
Robin J. Effron (Brooklyn), Revisiting The Death of Contract: Gilmore’s Thesis in Comparative Perspective
Wayne R. Barnes (Texas Wesleyan), French Subjective Theory of Contract: Separating Rhetoric from Reality
Tadas Klimas (Kaunas, Lithuania), Lessons American and Continental Contract Theory Can Teach One Another
Franklin G. Snyder (Texas Wesleyan), Cross-Cultural Adoption of Legal Rules: The Case ofHadley v. Baxendale
[Keith A. Rowley]
November 14, 2009
AALS Program and Print Symposium on Teaching Contracts
The AALS Section on Contracts invites you to attend our Annual Meeting program on New Approaches to Teaching Contracts: A Teach-In and solicits additional proposals for a companion symposium issue to appear in the Washington Law Review.
The Topic: Responding to profound changes in the practice of law and in our larger culture, many Contracts professors strive to update their methods and materials. In the spirit of the Annual Meeting’s transformative law theme, our program will explore a variety of new approaches that contracts professors have begun to introduce in the classroom and in teaching materials to address both changes in the structure of practice that require new lawyers to hit the ground running and ways that wired students synthesize material and acquire skills. We hope that the program, as a whole, will motivate experienced contracts professors to de-laminate their notes and inspire newer professors to move beyond their own professors in developing new ways to convey the beauty, complexity, and occasional imperfections of contract law.
The Program: Our annual meeting program, scheduled for Friday, January 8, 10:30 AM to 12:15 PM, Melrose Room, Third Floor, Hilton New Orleans Riverside, will feature Douglas Baird (Chicago) on the Langdellian, classic-case-centered method; Scott Burnham (Montana) on using drafting exercises to develop both skills and doctrinal understanding; Carol Chomsky (Minnesota) or Christina Kunz (William Mitchell) on their contribution to Thomson/West’s new Interactive Casebook Series, Contracts: A Contemporary Approach (West forthcoming 2010); Jonathan Hyman (Rutgers-Newark) on "Teaching Contracts with Student Role-Play Arbitrations"; Emily Kadens (Texas) on adapting the problem-based method more commonly used in upper-level commercial law courses to the first-year Contracts course; Shruti Rana (Maryland) on "Integrating Cross-border Perspectives on Contract Law: Comparing US and International Perspectives on Acceptances;" and Deborah Schmedemann (William Mitchell) on "Actual Reality: Peopling the Contracts Course."
The Print Symposium: The Washington Law Review will publish a print symposium in its November 2010 issue, which will include papers from most of our presenters, papers selected from among those who responded to our initial call for proposals, as well as others from whom we solicited contributions, and some shorter responses and replies.
How to Submit a Paper or Proposal: We may be able to accommodate on a space-available basis a limited number of additional short (15-20 pages) papers, responses, and replies in the symposium issue. If you would like to contribute please e-mail an abstract, précis, or draft by Monday, December 14, 2009 to the Planning Subcommittee: Martha Ertman (Maryland), Lisa Bernstein (Chicago), and Keith Rowley(UNLV). Please direct your submission to all three of our email addresses: firstname.lastname@example.org, email@example.com, and firstname.lastname@example.org, respectively. The Planning Committee and members of the law review's editorial board will review all timely submissions and offer publication to any we can accommodate.[Keith A. Rowley]
AALS Program and Print Symposium on the Principles of the Law of Software Contracts
The AALS Section on Commercial and Related Consumer Law invites you to attend our Annual Meeting program on The Principles of the Law of Software Contracts: A Phoenix Rising from the Ashes of Article 2B and UCITA? and solicits additional proposals for a companion symposium issue to be published in the Tulane Law Review.
The Topic: On May 19, 2009, the ALI approved the Principles of the Law of Software Contracts, which undertake to weave the currently divergent threads of law governing software contracts into a coherent whole that will guide parties in drafting, performing, and enforcing software contracts, assist courts and other arbiters in resolving disputes involving software contracts, and, perhaps, inform future legislation addressing software contracts. Do the Principles clarify the law of software contracts? Will they successfully unify the law of software contracts? Are they consistent with current best practices in software contracting? Will they encourage desirable future developments in the law and practice of software contracts? These are among the questions our program speakers will address.
The Program: The Commercial and Related Consumer Law Section's annual meeting program, scheduled for Saturday, January 9, 10:30 AM to 12:15 PM, in the Magnolia Room, Third Floor, Hilton New Orleans Riverside, will feature Principles Reporter Bob Hillman (Cornell) and Associate Reporter Maureen O’Rourke (Boston U.), who will offer their unique insights on the drafting process, key substantive provisions, and their legal and practical implications; Amy Boss (Drexel), who will add her insights about the failures of the UCC Article 2B project and UCITA and the prospects for the Principles’ success; Juliet Moringiello (Widener), who will discuss her and co-author Bill Reynolds's (Maryland) paper "What's Software Got to Do With It?," offering their perspectives on the Principles process, largely ignoring past efforts and debates, and addressing some of the assumptions underlying the Principles and how they address those assumptions; and Florencia Marotta-Wurgler (NYU), who will discuss her and co-author Yannis Bakos's (NYU Stern School of Business) paper "How Much Does Disclosure Matter?," which delves deeper into the value of disclosure -- an important assumption underlying the Principles and a subject the Principles tackle substantively -- and augments the conceptual discussion with empirical analysis.
The Symposium Issue: The Tulane Law Review will publish a print symposium issue including papers from most of our presenters, papers selected from among those who responded to our initial call for proposals as well as others from whom we solicited contributions, and some shorter responses and replies. We can accommodate a limited number of additional papers, responses, and replies in the symposium issue, which is scheduled to go to press in late summer 2010.
How to Submit a Paper or Proposal: If you would like to contribute to the print symposium, and want your proposal to receive full consideration, please e-mail an abstract, précis, or draft by Monday, December 14, 2009 to Professor Keith A. Rowley, Chair of the AALS Section on Commercial and Related Consumer Law. E-mail: email@example.com. We may consider submissions received after December 14 on a space-available basis. Executive Committee members and the Tulane Law Review's symposium editors will review all timely submissions and notify no later than Monday, January 11, 2010 those authors we would like to contribute to the print symposium.[Keith A. Rowley]
July 03, 2009
Call for Proposals
Call for Proposals
AALS Section on Contracts
New Approaches to Teaching Contracts: A “Teach-In”
2010 AALS Annual Meeting, New Orleans, Louisiana
The Section on Contracts solicits proposals for its Annual Meeting program, New Approaches to Teaching Contracts: A “Teach-In,” scheduled for Friday, January 8, 2010, at 10:30 a.m., and for a planned print symposium to follow.
The Topic: Responding to profound changes in the practice of law and in our larger culture, many Contracts professors strive to update their methods and materials. In the spirit of the Annual Meeting’s transformative theme, our program will explore a variety of new approaches that contracts professors have begun to introduce in the classroom and in teaching materials to address both changes in the structure of practice that require new lawyers to hit the ground running and ways that wired students synthesize material and acquire skills. We hope that the program, as a whole, will motivate experienced contracts professors to de-laminate their notes and inspire newer professors to move beyond their own professors in developing new ways to convey the beauty, complexity, and occasional imperfections of contract law.
The Program: The roundtable discussion will feature professors demonstrating a variety of pedagogical approaches. Invited presenters include: Douglas Baird (Chicago), on the Langdellian method centering on classic cases; Scott Burhnam (Montana), on using drafting exercises to develop both skills and doctrinal understanding; Carol Chomsky (Minnesota) or Christina Kunz (William Mitchell), on their contribution to West’s Interactive Casebook Series, Contracts: A Contemporary Approach (West forthcoming 2009); and Emily Kadens (Texas) on adapting the problem-based method more commonly used in upper-level commercial law courses to the first-year Contracts course. We seek two more presenters on innovative approaches to teaching Contracts. Presentations should demonstrate (rather than merely describe) teaching methods, perhaps distributing or illustrating any relevant materials through PowerPoint or other means. Each presentation should last 10-15 minutes, though we realize it will likely be taken from a larger work or set of materials.
The Symposium: We are working to identify a journal that will provide the best outlet in which to publish papers from our presenters, as well as additional contributions from those who respond to this call for proposals. We have begun discussions with the Journal of Legal Education and welcome your suggestions about other venues for the print symposium.
How to Submit a Proposal: Please submit a title, brief description, and any supporting materials no later than SEPTEMBER 1, 2009 to the Planning Subcommittee: Martha Ertman (Maryland), Lisa Bernstein (Chicago), and Keith Rowley (UNLV). Please direct your submission to all three of our email addresses: firstname.lastname@example.org, email@example.com, and firstname.lastname@example.org, respectively. We will select two proposals for the Annual Meeting program from those submitted and notify their authors by October 1, 2009. Once we secure a publication commitment, we will begin contacting additional proposal authors to discuss contributing to the print symposium.
[Keith A. Rowley]
June 19, 2009
ALI Principles of the Law of Software Contracts
Speaking of the recently-approved Principles of the Law of Software Contracts (the subject of our sister section's call for proposals below), here's an overview and remarks from Reporter Bob Hillman for the benefit of those who have not already read them on Concurring Opinions:
Maureen O’Rourke, the Associate Reporter on the Principles of the Law of Software Contracts, and I are posting the following to acquaint readers with the Principles and also to respond to some criticism of one section of the Principles that creates, under certain circumstances, an implied warranty of no known material hidden defects in the software.
On May 19, the membership of the American Law Institute unanimously approved the final draft of the Principles of the Law of Software Contracts. As the Introduction to the project states, the Principles “seek to clarify and unify the law of software transactions.” The Principles address issues including contract formation, the relationship between federal intellectual property law and private contracts governed by state law, the enforcement of contract terms governing quality and remedies, the meaning of breach, indemnification against infringement, automated disablement, and contract interpretation.
The Introduction to the Principles explains further that “[b]ecause of its burgeoning importance, perhaps no other commercial subject matter is in greater need of harmonization and clarification. . . . [T]he law governing the transfer of hard goods is inadequate to govern software transactions because, unlike hard goods, software is characterized by novel speed, copying, and storage capabilities, and new inspection, monitoring, and quality challenges.” Many of the rules of Article 2 of the UCC therefore apply poorly to software transactions or not at all, and the Principles are intended to fill the void.
The Principles are not “law,” of course, unless a court adopts a provision. Courts can also apply the Principles as a “gloss” on the common law, UCC Article 2, or other statutes. Nor do the Principles attempt to set forth the law for all aspects of a transaction, but instead rely on sources external to the Principles in many areas.
The Principles apply to agreements for the transfer of software or access to software for a consideration, i.e., software contracts. These include licenses, sales, leases, and access agreements. The project does not apply to the exchange of digital media or digital databases. It applies a predominant purpose test to determine applicability to transactions involving embedded software or software combined in one transfer with digital media, digital databases, and/or services.
We are the Reporter and Associate Reporter of the software principles. We have been greatly aided by our advisors, consultative group members, ALI Council members, liaisons from the National Commissioners on Uniform State Law, Business Software Alliance, and the American Bar Association, and many additional lawyers from industry and other groups who, over the last five and one-half years, have met with us, talked with us on the phone, and exchanged e-mails with us. We believe the project moved along smoothly largely because of the efforts of all of these groups and individuals.
Nevertheless, in the two weeks leading up to approval in May, we received communications from a few software providers evidencing concern largely with one section of the Principles. Section 3.05(b) creates a non-excludable implied warranty that the software “contains no material hidden defects of which the transferor was aware at the time of the transfer.” The section only applies if the transferor receives “money or a right to payment of a monetary obligation in exchange for the software.” Because the section may be the most controversial provision, we devote the rest of this post to the issue.
Despite concerns that section 3.05(b) creates “new law,” it simply memorializes contract law’s disclosure duties and tort’s fraudulent concealment law. The section makes clear that these rules apply to software transfers in order to allocate the risk to the party best able to accommodate or avoid the costs of materially defective software. Obviously this is the transferor in situations where only it knows of the material defect and the transferee cannot protect itself. The section requires that the transferor knows of the defect at the time of the transfer (negligence in not knowing is not enough to trigger liability), the defect is material, and it is hidden.
A few software providers have concerns that the concepts of “hidden,” and “material defect” are obtuse and will “increase litigation” or require a flood of “detailed notices” to prospective users. These concepts, however, are hardly unknown to the law. A comment to section 3.05(b) says that a “hidden” defect occurs if the “defect would not surface upon any testing that was or should have been performed by the transferee.” This is nothing new. See, e.g., UCC 2-316(3)(b) (”there is no implied warranty with regard to defects which an examination ought in the circumstances to have revealed to [the buyer]“).
A few software providers also worry about the meaning of “material defect.” The comments to section 3.05(b) point out that the section simply captures the principle of material breach: Does the defect mean that the transferee will not get substantially what it bargained for and reasonably expected under the contract? The criticism that “materiality” is too vague, if accurate, would mean that contract law would have to abolish its material breach doctrine too.
Putting together the requirements of actual knowledge of the defect at the time of the transfer, that the transferee reasonably does not know of the defect, and that the defect constitutes a material breach means that a transferor would be insulated from liability in situations identified by the concerned software providers as problematic. These include where the transferor has received reports of problems but reasonably has not hadtime to investigate them, where the transferee’s problems are caused by uses of which the transferor is unaware, where the transferor learns of problems only after the transfer, and where the problems are benign or require reasonable workarounds to achieve functionality. The best example of when section 3.05(b) would apply is, as comment b to the section says, where the transferor already knows at the time of the transfer that the software will require “major workarounds . . . and cause long periods of downtime or never [will] achieve promised functionality,” the transferee cannot discover this for itself, and the transferor chooses not to disclose the defect.
As we have already said, the section simply memorializes existing law. Under the common law, a contracting party must disclose material facts if they are under the party’s control and the other party cannot reasonably be expected to learn of the facts. Failure to disclose in such circumstances may amount to a representation that the facts do not exist and may be fraudulent. See, e.g., Shapiro v. Sutherland, 76 Cal. Rptr. 2d 101, 107 (Cal. Ct. App. 1998) (”Generally, where one party to a transaction has sole knowledge or access to material facts and knows that such facts are not known or reasonably discoverable by the other party, then a duty to disclose exists.”); Hill v. Jones, 725 P.2d 1115, 1118-19 (Ariz. Ct. App. 1986) (”[U]nder certain circumstances there may be a ‘duty to speak.’ . . . [N]ondisclosure of a fact known to one party may be equivalent to the assertion that the fact does not exist. . . . Thus, nondisclosure may be equated with and given the same legal effect as fraud and misrepresentation.”). The Restatement (Second) of Contracts section 161(b) states that “[a] person’s non-disclosure of a fact known to him is equivalent to an assertion that the fact does not exist . . . where he knows that disclosure of the fact would correct a mistake of the other party as to a basic assumption on which that party is making the contract and if non-disclosure of the fact amounts to a failure to act in good faith and in accordance with reasonable standards of fair dealing.” Section 161, comment d of the Restatement (Second) adds “In many situations, if one party knows that the other is mistaken as to a basic assumption, he is expected to disclose the fact that would correct the mistake. A seller of real or personal property is, for example, ordinarily expected to disclose a known latent defect of quality or title that is of such character as would probably prevent the buyer from buying at the contract price.”
One concern of a commentator is that fraudulent concealment is a tort, implying that it has no place in the Principles. But the principle appears prominently in the Restatement (Second) of Contracts section 161. And why not memorialize a principle that discourages a party in a contract setting from hiding material facts that the other party reasonably does not know? The commentator notes that fraudulent concealment requires intent to deceive, but wouldn’t that be the usual inference if a transferor licenses software it knows is materially defective and knows the transferee cannot discover it?
A few organizations also are concerned that section 3.05(b) cannot be disclaimed. But there are plenty of cases that do not allow a party to contract away liability for concealment. One critic wonders why a statement such as “I am not giving any assurances about there being no defects in this software,” should not insulate a transferor from liability. A reasonable licensee, assuming the good faith of the licensor, would believe that this licensor does not intend to make any express warranties or implied warranties of merchantability or fitness, not that the licensor knows that the software is materially defective so that the software will be largely worthless to the licensee. A transferor playing this game is surely in bad faith and, frankly, engaging in reprehensible conduct. But there is a way to ensure no liability under this section, namely to disclose material hidden defects. In effect, disclosure is the disclaimer.
Bob Hillman and Maureen O’Rourke
June 2, 2009
The Concurring Opinions post -- which Bob asked me to re-post, with the blessings of the Concurring Opinions folks -- has provoked several comments and has been the subject of a follow-up post by David Hoffman, one of Concurring Opinions's thirteen regular contributors. Dave's post has generated its own comments. While we here at ContractsProf might have a vested interest in generating site traffic, it may be more efficient to funnel feedback through a single conduit. Because Concurring Opinions got the ball rolling, feel free to comment, or to respond to existing comments, there.
[Keith A. Rowley]
May 28, 2009
Call for Proposals
Call for Proposals
AALS Section on Commercial and Related Consumer Law
“The Principles of the Law of Software Contracts:
A Phoenix Rising from the Ashes of Article 2B and UCITA?”
2010 AALS Annual Meeting, New Orleans, Louisiana
The Executive Committee of the AALS Section on Commercial and Related Consumer Law invites proposals for the Section’s 2010 AALS Annual Meeting program and a print symposium to follow on the topic “The Principles of the Law of Software Contracts: A Phoenix Rising from the Ashes of Article 2B and UCITA?”
The Topic: Contracts concerning computer software have presented difficult legal issues for many years. Although software is often bought and sold like goods, software contracts do not fit easily into the sale of goods rubric of Uniform Commercial Code Article 2. In the 1990s, the American Law Institute (ALI) and the National Conference of Commissioners on Uniform State Laws (NCCUSL) sought to address special issues concerning software contracts by developing a new UCC Article 2B. This effort failed because of fundamental disagreements about the substance of important rules. NCCUSL (now known as the Uniform Law Commission, or ULC) then carried forward the project on its own and, in 1999, promulgated the Uniform Computer Information Transactions Act (UCITA), providing a comprehensive (and controversial) set of rules for licensing computer information. To date, only Maryland and Virginia have enacted UCITA, and the ULC has ceased promoting additional enactments.
A new software contracts project has emerged in Article 2B’s and UCITA’s wake: the Principles of the Law of Software Contracts. On May 19, the ALI approved the Principles, which undertake to weave the currently divergent threads of law governing software contracts into a coherent whole that will guide parties in drafting, performing, and enforcing software contracts, assist courts and other arbiters in resolving disputes involving software contracts, and, perhaps, inform future legislation addressing software contracts. Do the Principles clarify the law of software contracts? Will they successfully unify the law of software contracts? Are they consistent with current best practices in software contracting? Will they encourage desirable future developments in the law and practice of software contracts? These are among the questions we hope our program speakers and symposium contributors will address.
The Program: Principles Reporter Bob Hillman (Cornell) and Associate Reporter Maureen O’Rourke (Boston U.) will offer their unique insights on the Principles’ drafting, key substantive provisions, and their legal and practical implications. Amy Boss (Drexel), who was intimately involved with both Article 2B and UCITA and has been an adviser on the Principles, will add her own insights about the prior efforts’ failures and the prospects for the Principles’ success. We seek one or more additional speakers who will offer their perspectives on the Principles, the economic, historical, policy, and political forces that motivated and shaped them, and their likely impact on the law and practice of software transactions.
The Symposium: We are working to identify a law review that will provide the best outlet in the which to publish papers from our presenters as well as a number of additional papers from those who respond to this call for proposals and others from whom we are soliciting contributions. In addition to contributions from a broader cross-section of legal scholars than we can offer the opportunity to speak at the annual meeting, we hope that the print symposium will also include articles from interested judges, practitioners, and others. We currently anticipate that finished papers would be due in late spring or summer 2010 for publication in late 2010 or early 2011.
How to Submit a Proposal: If you would like to present or contribute, please e-mail an abstract, précis, or draft by August 29, 2009 to Professor Keith A. Rowley, Chair of the Section on Commercial and Related Consumer Law. E-mail: email@example.com. The Executive Committee will review all submissions and notify by October 1, 2009 those we would like to present their topics at the annual meeting and those additional authors we would like to contribute to the print symposium.
[Keith A. Rowley]
January 05, 2009
Reminder: Annual Meeting Panel
For those of you attending this week's AALS annual meeting, please remember the Contracts Section's program Friday, January 9, 2009, at 8:30 am in Marina Salon G, South Tower/Level 3, San Diego Marriott Hotel & Marina. The program features a panel of speakers -- Kenneth Ayotte (Northwestern), Robert P. Bartlett, III (Georgia), and Tom Joo (UC-Davis) -- addressing "Immutable Rules and Contract Law." Click here for more details. A brief business meeting will follow the panel.
[Keith A. Rowley]
December 15, 2008
Dick Speidel Tribute at AALS Annual Meeting
From our friend Mike Kelly at the University of San Diego:
Northwestern University School of Law and the University of San Diego School of Law are hosting a reception honoring the career of Richard Speidel, who passed away this past semester. Dick was a major figure in contracts, commercial law, and international arbitration.
The reception will be held at the AALS Annual Meeting in San Diego on Friday, January 9, from 6:30 to 8:30 p.m. in the Warner Center Room, 4th floor, south tower of the San Diego Marriott Hotel & Marina, with a short program beginning at 7:00 p.m. We will also videotape remarks from those who knew Dick or his work and will provide a copy to Dick's family.
[Keith A. Rowley]
December 13, 2008
Contracts Panel at AALS Annual Meeting
Please plan to attend the Contracts Section's program and business meeting at the AALS Annual Meeting in sunny San Diego. The topic for this year's panel is "Immutable Rules and Contract Law."
Chosen from among those who the planning committee invited to submit a proposal and those who submitted a proposal in response to a general call for papers I posted to this web site and sent to the AALS Contracts listserv in September, this year's presenters are Kenneth Ayotte (Northwestern), Robert P. Bartlett, III (Georgia), and Tom Joo (UC-Davis), who will be speaking about the following topics:
Kenneth Ayotte & Patrick Bolton (Columbia-Business), "Optimal Property Rights in Financial Contracting"
In this paper we propose a theory of optimal property rights in a financial contracting setting. Following recent contributions in the property law literature, we emphasize the distinction between contractual rights, that are only enforceable against the parties themselves, and property rights, that are also enforceable against third parties outside the contract. Our analysis starts with the following question: which contractual agreements should the law allow parties to enforce as property rights? Our proposed answer to this question is shaped by the overall objective of minimizing due diligence (reading) costs and investment distortions that follow from the inability of third-party lenders to costlessly observe pre-existing rights in a borrower’s property. Borrowers cannot reduce these costs without the law’s help, due to an inability to commit to protecting third-parties from redistribution. We find that the law should take a more restrictive approach to enforcing rights against third-parties when these rights are i) more costly for third-parties to discover, ii) more likely to redistribute value from third-parties, and iii) less likely to increase efficiency. We find that these qualitative principles are often reflected in observed legal rules, including the enforceability of negative covenants; fraudulent conveyance; corporate veil-piercing; and limits on assignability. In this paper we propose a theory of optimal property rights in a financial contracting setting.
Robert P. Bartlett, III & Victoria Plaut (Georgia-Psychology), "Blind Consent? A Social Psychological Investigation of Non-Readership of Click-Through Agreements"
Across two studies we aimed to measure empirically the extent of non-readership of clickthrough agreements (CTAs), identify the dominant social representations that exist about CTAs, and experimentally manipulate these representations in order to decrease automatic non-reading behavior. In our initial questionnaire study (Study 1), as predicted, the vast majority of participants reported not reading CTAs and the most prevalent social representations of CTAs contributing to non-readership included: they are too long and time-consuming, they are all the same, they give one no choice but to agree, they are not important, the companies are reputable, and they are irrelevant. Manipulating these representations on a simulated music web site (Study 2) revealed an increase in readership. The greatest effect on comprehension of CTA terms and rates of rejection came from manipulating the length representation. These results demonstrate support for the influence of social representations on CTA readership, provide evidence against the common "limited cognition" perspective on non-readership, and suggest that presenting CTAs in a shorter, more readable format can increase CTA readership and comprehension as well as shopping of CTA terms.
It is routinely stated that the defining aspect of contract law is that parties control their obligations. But in fact the most fundamental, and immutable, rule of contract law points in the opposite direction: every "contractual" arrangement of the parties is potentially subject to broad judicial review. The law empowers courts to supply critical aspects of incomplete contracts. This power is commonly described as the passive facilitation of the parties' intent. But "contract law" includes the potential that a court, in some extreme cases, will abrogate party intent by rewriting or refusing to enforce agreements to which parties did agree. Moreover, even run-of-the-mill "contract law" cases often turn on questions as to which which the contracting parties' intent cannot be discerned. In such cases, the fundamental "objective theory" of contract holds that subjective agreement of the parties is not necessary, as long as a court believes parties' actions should be "objectively" interpreted to manifest consent.
Analyzing the legitimacy of this broad court power lies in recognizing the implicit policy judgments courts apply. This is made difficult by the fact that these judgments tend to be cloaked in rhetoric that invokes notions of consent. For example, the "objective theory" consistently uses the term "consent" even while conceding that subjective agreement is unnecessary. Recognizing courts' implicit policy judgments then demands an explanation of whether courts are qualified to make them. Conservative market economics offers a theoretical explanation for the importance of the parties in contract -- their purportedly unique ability to value entitlements and trade them in utility-enhancing ways. A realistic modern theory of contract must recognize that parties do not control contracts and thus requires a theoretical explanation for judicial role.
My argument also suggests that the discourse about mandatory and default rules in contract may incorrectly framed. It assumes there are two kinds of rules: those that the parties can agree to change, and those that they may not. Starting from the normative assumption that parties should presumably be able to change rules, and the descriptive assumption that they can change most rules, it asks for descriptive and normative explanations of exceptions. But as a descriptive matter, true "default rules" may not exist in contract law. That is, because courts always have the power to review any agreement, even an agreement to opt out of court review, there is no way for parties to make a self-enforcing commitment to opt out.
The program begins Friday, January 9, 2009, at 8:30 am in Marina Salon G, South Tower/Level 3, San Diego Marriott Hotel & Marina, and will be followed by a brief business meeting. We hope to see you there.
[Keith A. Rowley]
September 06, 2008
Call for Papers: AALS Annual Meeting
The AALS Section on Contracts solicits papers and proposals for our 2009 Annual Meeting program on “Immutable Rules and Contract Law,” scheduled for Friday, January 9, from 8:30-10:00 a.m.
In the last three decades, legal scholars have paid considerable attention to conceptualizing and prudentially designing contractual rules. Most of this attention has been placed on default rules (e.g., Should we prefer "majoritarian" rules that mimic the likely intent of the parties or "penalty" rules that purportedly force information revelation?). Part of this concentration on immutable rules has been due to a sense that the rationales for immutable rules were well understood and widely accepted. In recent years, important contributions within legal scholarship, humanities, and the social sciences have alerted us to a number of ways that contracting may fail (due to transaction costs, cognitive failure, externalities, path dependence, etc), which in turn reasserts the importance of understanding the role of immutable rules. This panel is intended both to survey and to evaluate the set of immutable rules within a system of contract and commercial law, concentrating on three questions: (1) What are the key immutable rules within contract law? (2) What are the principal policy rationales behind immutable rules in contract law? (3) How well equipped is contract law (compared to other areas of law) to contend with these policy concerns.
If you are interested in participating, please e-mail your paper or proposal to firstname.lastname@example.org not later than Monday, September 29, 2008.
[Keith A. Rowley]
September 11, 2007
Back to the Future
Hard as it may be for law students to believe, there was a time when the point of law schools was actually to train lawyers. For generations, however, our beloved Mother Ship -- the Association of American Law Schools -- has been working to focus law schools on more important things: generating more law review articles; getting faculty in other departments to recognize that we really are, too, scholars, not Hessian trainers; and cutting teaching loads for tenure-track faculty.
Is the AALS rethinking its mission? Well, maybe. President Nancy Rogers (Ohio State), in an op-ed piece in the National Law Journal, notes that a lot of people have been calling for changes in the way law schools go about actually preparing students for practice. That, she says, will be one of the things talked about at this year's annual AALS Bean Feed and Wiener Roast in New York City, when 3,000 of the Best and Brightest will gather to talk legal education and eat at good restaurants on expense accounts.
We may disagree about how to go about fixing the problem -- fewer law review articles and more time teaching and mentoring don't seem to be on anyone's agenda -- but we can expect the attendees to agree with Rogers that Congress needs to offer some debt relief to students so we can keep charging them really high fees while teaching only nine to twelve semester hours a year.
Disclaimer: We want to remind everyone that the comments on this blog are not the opinions of the Association of American Law Schools, or the Section on Contract Law -- which are obviously fictitious entities which couldn't have any opinions in the first place -- or of the editors of this blog, or of the writers, or possibly of anyone at all.