ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Monday, August 21, 2017

"We Built This City" (that was just to give you the earworm)

This case, out of the Northern District of California, Chaquico v. Freiberg, Case No. 17-cv-02423-MEJ, concerns a fairly common entertainment law issue that results when bands lose and gain members: who gets to still use the band name? Jefferson Starship has a fairly rocky naming history, having originally been called Jefferson Airplane and later morphing into Starship after a prior fight over the name. Because band name ownership can be a tricky thing to decide under intellectual property law, and because it might result in rulings that the band members (current and former) might not like, bands frequently try to handle these disputes by contract. Like with any contract, the efficacy of this approach differs based on the wording of the particular contract, which is what happens with the contract claims in this case: based on wording and timing and the interplay of other contracts, the court dismisses all of them but those that happened after January 2016.  

(If you're interested in this sort of thing, Rebecca Tushnet writes up another of these cases, this one involving the band Boston.)

August 21, 2017 in Celebrity Contracts, Current Affairs, In the News, Recent Cases, True Contracts | Permalink | Comments (0)

Sunday, August 20, 2017

Beauty Salon's Customer Lists Weren't Confidential When They Were on Social Media (and more beauty salon rulings)

A recent case out of New York, Eva Scrivo Fifth Avenue, Inc. v. Rush, 656723/2016, stems from the defendant, Rush, being discovered working for a rival beauty salon, Marie Robinson, while still employed by the plaintiff, Scrivo. Scrivo terminated Rush upon learning of this. Rush spoke to two clients in the Scrivo salon before exiting the salon, allegedly saying she would get in touch with them, and at least one of the clients left the salon, refusing to be serviced by anyone but Rush. Rush also posted a note on her personal Instagram saying that she would be moving to Marie Robinson and people should get in touch with her for appointments. 

Scrivo sued alleging, among other things, breach of contract, based on the restrictive covenant contained in the Employment Agreement, which prohibited Rush from, among other things, soliciting Scrivo's clients and disclosing confidential information and trade secrets. Scrivo sought to enjoin Rush from soliciting, communicating with, or providing services to anyone she serviced while working for Scrivo, for a period of one year. 

Unfortunately for Scrivo, the court denied its motion. The court noted that the noncompete needed to protect Scrivo's legitimate interests, avoid undue hardship on Rush, and be in the public interest. The court found that Scrivo failed to demonstrate the that noncompete was necessary to protect its interests. There was nothing about Rush's services that were "unique or extraordinary," and Rush was replaceable. Scrivo's customer lists were not confidential information, because the identity of its customers was pretty readily available online in social media posts and Scrivo never attempted to hide any of it. None of the skills Rush used in cutting hair were confidential, either. Rush claimed to be self-taught, claimed not to have taken any customer lists, and claimed that any clients that followed her did so of their own accord and initiative and that she did not solicit them. 

Not only was the court dubious that Scrivo had legitimate interest to protect, the court also thought the sought injunction was unduly burdensome on Rush. Scrivo provided evidence that Rush had serviced 900 clients over the course of six years at Scrivo. Rush would surely have to therefore affirmatively ask each person who came to Marie Robinson if they had ever been serviced at Scrivo in order to ascertain if there was a possibility Rush had worked on them. Scrivo wanted Rush to turn away clients who came in independently, and the noncompete had only required Rush to refrain from soliciting clients. 

Finally, the court didn't think Scrivo would suffer any irreparable harm without injunctive relief. If Scrivo could prove Rush violated the noncompete, then Scrivo could get the value of the services the client didn't purchase from Scrivo. 

August 20, 2017 in Labor Contracts, Recent Cases, True Contracts, Web/Tech | Permalink | Comments (0)

Los Angeles Allegedly Violates Free Speech Rights with Entertainment Contracts

Pershing Square in downtown Los Angeles is an outdoor area that is regularly the home of free summer concerts and demonstrations of various kinds throughout the year. You would think you could snap as many photos as you wanted of events there since it is an outdoor, public area, right? Cropped_26394084682_722974dd19_k.0

This past summer, the answer was no. A photojournalist wanted to take pictures of, among others, the B-52s. However, he was informed of a policy that had been set up with the performers per contractual agreement. The policy barred professional photography equipment, albeit not cell phone usage, from the square during concerts.

ACLU has complained to the Los Angeles City Attorney and the General Manager of the Department of Recreation and Parks, claiming that the city does not have a right to contract away the general public’s First Amendment rights because some performers want it that way.

How do you see contractual rights intersecting with the First Amendment in the government contracting context? Comment below!

August 20, 2017 in Current Affairs, Government Contracting, In the News, Miscellaneous, Music, True Contracts | Permalink | Comments (0)

Saturday, August 19, 2017

Things to Think About Before You Put Your Project on Kickstarter

The Internet has encouraged so many cool and interesting ways of creating. Scrolling through Kickstarter, to pick just one website, can expose you to an incredible variety of artistic endeavors that you can support, many of which involve board games. In fact, several of my friends have Kickstartered several board games, and I own several other Kickstarter board games that didn't come from friends at all.

I have never asked my friends how they document their collaborations on the board games they list on Kickstarter, but you can imagine that many people throw ideas up there to see what happens without bothering to hire lawyers or formalize relationships. This, of course, can turn out poorly if you have an eventual falling-out with your friend, but it can also turn out poorly if something even more horribly tragic happens and one of the collaborators dies suddenly and unexpectedly, which may be what happened in the case of the Kickstarter game Divorce! The story is sad and heartbreaking and I read all about it over on The Outline. It's tangled and convoluted and has devolved into a series of oral accusations in large part because there is nothing in writing. And that could be evidence that the parties in question had no collaborative relationship regarding the board game, but it could also be evidence that the parties in question were friends in their twenties who never anticipated that one of them was going to go away for a fun weekend and never come home. 

(h/t to Aja Romano)

August 19, 2017 | Permalink | Comments (0)

Friday, August 18, 2017

Brian O'Conan Hypo

Having disappeared for a couple of weeks into frantic preparation for the new semester, I thought I would re-emerge by sharing a hypo that I do with my students on the first day of class, based on Conan O'Brien's contract dispute with NBC from a few years ago. The hypo goes something like this: 

Brian O’Conan is a comedic host who has helmed a show on CBN, Later at Night, for sixteen years. Later at Night airs at 12:30, and Brian has always wanted to “move up” in the world of late night hosts to host a show at the earlier time of 11:30. Five years ago, in order to keep Brian at the network, CBN promised to give Brian hosting duties for its legendary 11:30 show, Somewhat Late at Night, as soon as Len Jayo’s current contract was up. Somewhat Late at Night is a flagship show that has aired in its time slot on CBN for 43 years; prior to that, it started at 11:15 for 14 years. For its entire 57-year existence, Somewhat Late at Night has begun directly after the late local news.

Brian and CBN enter into a contract with the following terms:

  • Brian is guaranteed that he will be the host of Somewhat Late at Night.
  • Both Brian and CBN promise to act in good faith in executing the contract.
  • Both parties will mitigate any damages caused by a breach of contract, but CBN agrees that it will pay Brian $40 million if it breaches the contract.
  • Brian is prohibited from being a late-night host on any other network in the event of a breach of the contract.

As promised by the contract, Brian becomes host of Somewhat Late at Night. After a strong start, Brian’s ratings trail off. Six months into Brian’s stint as host, CBN makes a public announcement that Somewhat Late at Night will be moved to start at midnight. It will use the 11:30 time slot for a new late-night show with old Somewhat Late at Night host Len Jayo.

Brian, learning all of this for the first time from the public announcement, tells CBN it has breached the contract, demands payment of $40 million, and also opens discussions with a competing network, Wolf, to host a new late night show at 11:30.

***

I like this hypo because, even though it was several years ago now, most students recognize the real-life situation this problem was based on and so feel somewhat engaged with it. In addition, even though I have taught them literally nothing about contract law at this point, I think they gain a lot of confidence from being able to examine the problem and come up with ideas for how the analysis should begin. I usually split them up and assign them a side to represent and have them make arguments on their client's behalf, and then allow them time for rebuttal. Along with discussing the contract's terms around the show itself, the students get into discussions about good faith, mitigation of damages, and just basic fairness. When we're done with the discussion, I then ask them how they felt about the side they had been assigned to, and if any of them had wished they'd had the other side. I think it is a good basic introduction to the task of being lawyers that I find relaxes them a little on the first day: If they can already talk about this problem on the first day, imagine how much better they'll be once they know some law!

If you're starting school years like I am, good luck!

August 18, 2017 in Celebrity Contracts, Commentary, Current Affairs, In the News, Law Schools, Teaching, Television, True Contracts | Permalink | Comments (2)

Thursday, August 17, 2017

Contracts and Commercial Law Scholarship: Weekly Top Ten SSRN Downloads (August 17, 2017)

Top10-Electric

Top Downloads For: SSRN Logo2

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 18 Jun 2017 - 17 Aug 2017

Rank Paper Downloads
1.

How to Restructure Venezuelan Debt (¿Cómo restructurar la deuda venezolana?)

Cleary Gottlieb Steen & Hamilton LLP - New York Office and Duke University School of Law
2,349
2.

Crypto Transaction Dispute Resolution

University of St. Thomas, Minnesota - School of Law and Department of Mathematics, Metropolitan State University
263
3.

The Choice Theory of Contracts (Introduction)

Tel Aviv University - Buchmann Faculty of Law and Columbia University - Columbia Law School
145
4.

Relational Contracts of Adhesion

University of Pennsylvania Law School
121
5.

Aspects of Loyalty

McGill University, Faculty of Law, Paul-André Crépeau Centre for Private and Comparative Law
121
6.

Justice, Fault, and Efficiency in Contract Law

University of Florida - Levin College of Law
95
7.

Over-Reliance Under Contractual Disgorgement

Hebrew University of Jerusalem - Faculty of Law and Hebrew University of Jerusalem
89
8.

Corporate Governance for Complex Cryptocurrencies? A Framework for Stability and Decision Making in Blockchain-Based Monetary Systems

European University Institute
86
9.

Disclosure Rules in Contract Law

Harvard Law School and Tel Aviv University
84
10.

Springwell-watch: New Insights into the Nature of Contractual Estoppel

London School of Economics - Law Department
77

 

Top Downloads For: SSRN Logo2

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 18 Jun 2017 - 17 Aug 2017

Rank Paper Downloads
1.

Crypto Transaction Dispute Resolution

University of St. Thomas, Minnesota - School of Law and Department of Mathematics, Metropolitan State University
263
2.

The Choice Theory of Contracts (Introduction)

Tel Aviv University - Buchmann Faculty of Law and Columbia University - Columbia Law School
145
3.

Relational Contracts of Adhesion

University of Pennsylvania Law School
121
4.

Property and Sovereignty Imbricated: Why Religion Is Not an Excuse to Discriminate in Public Accommodations

Harvard Law School
99
5.

Over-Reliance Under Contractual Disgorgement

Hebrew University of Jerusalem - Faculty of Law and Hebrew University of Jerusalem
89
6.

Disclosure Rules in Contract Law

Harvard Law School and Tel Aviv University
84
7.

Springwell-watch: New Insights into the Nature of Contractual Estoppel

London School of Economics - Law Department
77
8.

Digital Technology as a Challenge to European Contract Law – From the Existing to the Future Architecture

Humboldt University of Berlin - Faculty of Law and European University Institute
73
9.

What Law Governs Forum Selection Clauses

Willamette University - College of Law
73
10.

Property and the Construction of the Information Economy: A Neo-Polanyian Ontology

Georgetown University Law Center
61

 

 

August 17, 2017 in Recent Scholarship | Permalink | Comments (0)

Wednesday, August 16, 2017

Duress in Demotion and Termination Case: Not so Fast, Employers

In times when it seems that employers often not only attempt to, but also often get away with, unreasonable demotion and/or termination attempts, the Eighth Circuit Court of Appeals has upheld the rights of employees not to be forced into unreasonable demotion “agreements.”

The crucial facts of the case are as follows: In 2011, Timothy Gilkerson was hired by Nebraska Colocation Centers (“NCC”) as a Vice President and General Manager in an IT function that also included Gilkerson’s expanding the company’s customer base. Among other things, the employment contract stated that Mr. Gilkerson could only be fired for cause defined as the “willful misconduct in carrying out Executive’s duties which causes economic harm” to NCC or the “persistent failure to perform the duties and responsibilities of his employment hereunder….” The contract also specified various generous sales and retirement bonuses.

NCC subsequently became dissatisfied with Gilkerson’s sales-related performance. Gilkerson received an employee performance review with an “Unsatisfactory” rating for “Achieved Sales Goals” and “Fulfills the terms of his contract.” Gilkerson signed the review document, but noted his dissatisfaction with the sales goal rating. NCC ultimately determined that Gilkerson was not “effective” in his role, announced the hiring of a new Vice President and, the same day, told Gilkerson that 1) the new employee would be moving into Gilkerson’s office and 2) that Gilkerson’s job ti Unknown
tle was changed to something less desirable from his point of view.

Crucially to the case, Gilkerson was presented with a “Mutual Rescission” to rescind the employment contract and a “Term Sheet” which set forth new and much less desirable terms of Gilkerson’s employment. In other words” NCC sought to demote Gilkerson. Importantly, the “mutual rescission” sought to convert Gilkerson’s contractual status to be an at-will employee. Gilkerson smartly consulted with an attorney who told him not to sign the Mutual Rescission. At a subsequent meeting with the NCC president, Gilkerson was told he had two choices: Accept the rescission and term sheet or be fired for cause; an obvious Hobson’s choice. Gilkerson signed. You guessed it: he was then also fired.

Gilkerson filed suit, claiming contractual duress which, in Nebraska, involves a two-part test: First, the agreement obtained must have been obtained by means of pressure. Second, the agreement itself must be unjust, unconscionable, or illegal. Whether particular facts are sufficient to constitute duress is, in Nebraska, a matter of law.

The duress test sounds like a high standard to meet. Sure enough: on a motion for summary judgment, the trial court found that “had the revised terms … been given to a newly-hired employee, they would certainly have been seen as fair, or even generous.” However, as the Court of Appeals pointed out: Gilkerson was not a new employee. It was just wrong for the employer and court to treat him as such. The Court found the new “term sheet” unjust because, after analyzing case precedent, there was no economic justification for requiring Gilkerson to accept an at-will employment agreement, other than “it allowed NCC to avoid the provisions of the Contract that were most favorable to Gilkerson.” No kidding. The court also specifically took issue with the provision that made Gilkerson an at-will employee after having served in a contractually better position for quite some time. The appellate court thus found duress to lie. Images

Contracts are, of course, negotiable at the outset. However, in times of fierce competition in many job markets, it is good to see that courts standing up for employees presented with clearly unreasonable employment “choices” and decisions by employers well into an employment situation. It is one thing if an employee is at working will. It is quite another if he/she is not, as this case clearly demonstrates. Contracts must be performed in good faith by both parties. That, of course, includes the employer as well. In times when unemployment rates are dropping, hopefully employees will obtain stronger bargaining positions both at the outset of and during the employment relationship. Nonetheless, presenting employees with unreasonable “choices” such as the above. Of course, employees should rise to the reasonable expectations of employers. But employers do not and should not have carte blanche to do whatever they wish to contractually bound employees. This can hardly come as a surprise to any reasonable employer.

The case is Gilkerson v. Nebraska Colocation Centers LLC., 2017 WL 2656073.

August 16, 2017 in Labor Contracts, True Contracts | Permalink | Comments (0)

Saturday, August 12, 2017

Why Hawkins v. McGee Might be the Best Teaching Tool in Contracts Law

Continuing with responses to Professor Calleros' call for the best contracts cases, Professor Otto Stockmeyer weighs in with his piece 'Reflection on Teaching the First Day of Contracts Class.' In his paper Professor Stockmeyer discuses advice for first year law students and the significance of the Contracts course. He then goes on to assert the 'Hairy Hand' Case, Hawkins v. McGee, is the most significant case and an excellent starting place for law students. 

 

The full paper can be found by following the link below. 

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2927249

August 12, 2017 | Permalink

Thursday, August 10, 2017

Why R.R. V. M.H. Might Be the Best Teaching Tool in the Contracts Casebook

Recently, Professor Charles Calleros posted a blog proclaiming Pyeatte v. Pyeatte as the "best teaching tool in contracts law." In his post Professor Calleros issued an open call to colleagues to respond with their interpretations on the best cases for contract law.  David Epstein has answered the call with his choice of RR v. MH, a Massachusetts Supreme Court decision. The case focuses on the concept of surrogate parents and whether their contract would be enforceable. The full piece is found below at the link, and is a promising read for educators and students alike. 

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3015923 

Full paper found at the link above. 

August 10, 2017 | Permalink

Contracts and Commercial Law Scholarship: Weekly Top Ten SSRN Downloads (August 10, 2017)

Top-10 Cube Letters

Top Downloads For: SSRN Logo2

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 11 Jun 2017 - 10 Aug 2017

Rank Paper Downloads
1.

How to Restructure Venezuelan Debt (¿Cómo restructurar la deuda venezolana?)

Cleary Gottlieb Steen & Hamilton LLP - New York Office and Duke University School of Law
2,216
2.

Crypto Transaction Dispute Resolution

University of St. Thomas, Minnesota - School of Law and Department of Mathematics, Metropolitan State University
248
3.

The Choice Theory of Contracts (Introduction)

Tel Aviv University - Buchmann Faculty of Law and Columbia University - Columbia Law School
140
4.

Justice, Fault, and Efficiency in Contract Law

University of Florida - Levin College of Law
90
5.

Over-Reliance Under Contractual Disgorgement

Hebrew University of Jerusalem - Faculty of Law and Hebrew University of Jerusalem
86
6.

Aspects of Loyalty

McGill University, Faculty of Law, Paul-André Crépeau Centre for Private and Comparative Law
85
7.

Relational Contracts of Adhesion

University of Pennsylvania Law School
83
8.

Corporate Governance for Complex Cryptocurrencies? A Framework for Stability and Decision Making in Blockchain-Based Monetary Systems

European University Institute
79
9.

Disclosure Rules in Contract Law

Harvard Law School and Tel Aviv University
76
10.

Postscript to Just Relationships: Reply to Gardner, West, and Zipursky

Tel Aviv University - Buchmann Faculty of Law and Tel Aviv University - Buchmann Faculty of Law
75

 

Top Downloads For: SSRN Logo2

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 11 Jun 2017 - 10 Aug 2017

Rank Paper Downloads
1.

Crypto Transaction Dispute Resolution

University of St. Thomas, Minnesota - School of Law and Department of Mathematics, Metropolitan State University
248
2.

The Choice Theory of Contracts (Introduction)

Tel Aviv University - Buchmann Faculty of Law and Columbia University - Columbia Law School
140
3.

Property and Sovereignty Imbricated: Why Religion Is Not an Excuse to Discriminate in Public Accommodations

Harvard Law School
98
4.

Over-Reliance Under Contractual Disgorgement

Hebrew University of Jerusalem - Faculty of Law and Hebrew University of Jerusalem
86
5.

Relational Contracts of Adhesion

University of Pennsylvania Law School
83
6.

Disclosure Rules in Contract Law

Harvard Law School and Tel Aviv University
76
7.

Springwell-watch: New Insights into the Nature of Contractual Estoppel

London School of Economics - Law Department
74
8.

Property and the Construction of the Information Economy: A Neo-Polanyian Ontology

Georgetown University Law Center
58
9.

Digital Technology as a Challenge to European Contract Law – From the Existing to the Future Architecture

Humboldt University of Berlin - Faculty of Law and European University Institute
58
10.

Liberal Contract Theory and Actually Existing Contracts

New York University (NYU) - Furman Center for Real Estate and Urban Policy
51

August 10, 2017 in Recent Scholarship | Permalink | Comments (0)

Thursday, August 3, 2017

More Real Estate Misrepresentations

I'm just going to start a little subset of cases involving misrepresentations in the context of real estate transactions. This latest case is out of Tennessee, Hall v. Eagle Rock Development, LLC, No. E2015-01487-COA-R3-CV (you can listen to the oral arguments here). In this case, the Halls won rescission of the purchase contract and a refund of the money they paid, based on misrepresentations regarding the lot's access to public sewage disposal. While there was a dispute as to whether they were specifically told by the development's broker that the lot had access to public sewage, the court found the broker had not been "forthcoming" about the sewage situation, and the other documents involved in the transactions represented at several points that public sewage access would be possible, including the MLS brief and the real estate listings that contained public sewage as a product feature. The website for the development stated that the lots would have public sewage access, and nowhere qualified the statement as being contingent on certain funding requirements. Plus, there was a sewer manhole directly in front of the lot. 

The first time the Halls were provided with a disclosure statement indicating they would not have public sewage access was actually the day the sales contract was executed, despite the fact that the sellers had prepared this document months earlier and so could have shared it well in advance. The fact that the Halls signed the disclosure statement while executing the sales contract did not bar their recovery. (Nor did the fact that the Halls' contract stated that they were purchasing the property "as is.")

The Halls maintained that they would never have bought the lot had they known it didn't have public sewage access, not least because it restricted the size of the house they could build on the lot. Accordingly, the court ordered the contract rescinded and the purchase price be refunded, which was exactly the remedy that the Halls were seeking. 

The sellers pointed out that it actually took the Halls three years to figure out public sewage access was not possible. They claimed that the problem here was the Halls' failure to fully investigate the property or fully read the documents they signed at closing. However, the court found that the weight of all the contrary representations the Halls had been given outweighed this. 

August 3, 2017 in Recent Cases, True Contracts | Permalink | Comments (0)

Contracts and Commercial Law Scholarship: Weekly Top Ten SSRN Downloads (August 3, 2017)

Top-10-gold-logo

Top Downloads For: SSRN Logo2

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 04 Jun 2017 - 03 Aug 2017

Rank Paper Downloads
1.

Crypto Transaction Dispute Resolution

University of St. Thomas, Minnesota - School of Law and Department of Mathematics, Metropolitan State University
235
2.

A New Dawn for the Law of Illegality

University of Oxford - Faculty of Law
142
3.

The Choice Theory of Contracts (Introduction)

Tel Aviv University - Buchmann Faculty of Law and Columbia University - Columbia Law School
138
4.

The Design of Staged Contracting

University of Virginia School of Law and Stanford Law School
120
5.

Justice, Fault, and Efficiency in Contract Law

University of Florida - Levin College of Law
87
6.

Over-Reliance Under Contractual Disgorgement

Hebrew University of Jerusalem - Faculty of Law and Hebrew University of Jerusalem
83
7.

Springwell-watch: New Insights into the Nature of Contractual Estoppel

London School of Economics - Law Department
73
8.

Corporate Governance for Complex Cryptocurrencies? A Framework for Stability and Decision Making in Blockchain-Based Monetary Systems

European University Institute
73
9.

Postscript to Just Relationships: Reply to Gardner, West, and Zipursky

Tel Aviv University - Buchmann Faculty of Law and Tel Aviv University - Buchmann Faculty of Law
73
10.

Disclosure Rules in Contract Law

Harvard Law School and Tel Aviv University
72

 

Top Downloads For: SSRN Logo2

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 04 Jun 2017 - 03 Aug 2017

Rank Paper Downloads
1.

Crypto Transaction Dispute Resolution

University of St. Thomas, Minnesota - School of Law and Department of Mathematics, Metropolitan State University
235
2.

The Choice Theory of Contracts (Introduction)

Tel Aviv University - Buchmann Faculty of Law and Columbia University - Columbia Law School
138
3.

The Design of Staged Contracting

University of Virginia School of Law and Stanford Law School
120
4.

Property and Sovereignty Imbricated: Why Religion Is Not an Excuse to Discriminate in Public Accommodations

Harvard Law School
96
5.

Over-Reliance Under Contractual Disgorgement

Hebrew University of Jerusalem - Faculty of Law and Hebrew University of Jerusalem
83
6.

Springwell-watch: New Insights into the Nature of Contractual Estoppel

London School of Economics - Law Department
73
7.

Disclosure Rules in Contract Law

Harvard Law School and Tel Aviv University
72
8.

Property and the Construction of the Information Economy: A Neo-Polanyian Ontology

Georgetown University Law Center
54
9.

Liberal Contract Theory and Actually Existing Contracts

New York University (NYU) - Furman Center for Real Estate and Urban Policy
49
10.

Leadership Competencies for Business Lawyers: Using a Framework that Links Strategy, Law, and Ethics

University of Michigan
46

August 3, 2017 in Recent Scholarship | Permalink | Comments (0)

Tuesday, August 1, 2017

Fact-Checking the Snopes Lawsuit

You, like me, might often resort to Snopes to weed through what's true and what's not in the avalanche of information we're exposed to every day. (My most recent Snopes search: can a gift shop upcharge federal postage stamps? The answer is yes!) Recently Snopes turned to its constituents on the Internet to help provide funding to keep the website alive, precipitated by a lawsuit stemming from several contracts between the parties at issue. The whole thing is a matter of messy corporate structure that really seems like it's going to depend on the court's reading of the stock purchase agreement between the parties. Vox has a rundown of the whole situation here (that I'm quoted in). 

August 1, 2017 in Commentary, Current Affairs, In the News, Recent Cases, True Contracts, Web/Tech | Permalink | Comments (0)

Friday, July 28, 2017

Why Pyeatte v. Pyeatte May Be the Best Teaching Tool in Contracts Law

Our friend and esteemed colleague, Professor Charles Calleros, has kindly sent the following as a guest contribution to the ContractsProf Blog.  Enjoy!

Recently Val Ricks has collected a number of essays from colleagues on best and worst cases for the development or application of contract law.  In addition to participating in that project, Charles Calleros invites faculty to upload and post links to essays about their favorite cases as teaching tools (regardless whether the cases advance the law in an important way). He starts the ball rolling with this Introduction to his essay on "Why Pyeatte v. Pyeatte Might be the Best Teaching Tool in the Contracts Casebook":

Pyeatte v. Pyeatte, a 1983 decision of the Arizona Court of Appeals, did not break new ground in the field of contracts. Nonetheless, I assert that it is one of the best pedagogic tools in the Contracts casebook, for several reasons:

  •  *          The facts are sure to grab the attention of first-semester law students: A law grad reneges on a promise to support his ex-wife through graduate school after she supported him through law school during their marriage;

*          This 1980’s opinion is written in modern plain English, allowing students to focus on substance, while also learning a few necessary legal terms of art.

*          After their immersion in a cold and rather unforgiving bath of consideration and mutual assent, students can finally warm up to a tool for addressing injustice: quasi-contract;

*          The opinion’s presentation of background information on quasi-contract provides an opportunity to discuss the difference between an express contract, an implied-in-fact contract, and an implied-in-law contract; 

*          Although the wife’s act of supporting her husband through law school seems to beg for reciprocation or restitution, students must confront judicial reticence to render an accounting for benefits conferred between partners in a marriage, exposing students to overlap between contract law and domestic relations law;

*          The appellate ruling of indefiniteness of the husband’s promise – presented in a later chapter in my casebook, but looming vaguely in the background of the discussion of quasi-contract – invites critique and perhaps even speculation that the appellate panel felt comfortable denying enforcement of the promise precisely because it knew it could grant restitution under quasi-contract; and

*          The court’s admonition that expectation interest forms a ceiling for the calculation of restitution reveals a fascinating conundrum that brings us back to the court’s ruling on indefiniteness. . . .

You can find the whole essay here.

July 28, 2017 in Commentary, Contract Profs, Famous Cases, Law Schools, Miscellaneous, Recent Scholarship, Teaching, True Contracts | Permalink | Comments (2)

Thursday, July 27, 2017

Contracts and Commercial Law Scholarship: Weekly Top Ten SSRN Downloads (July 27, 2017)

Top-10 Block Letters

Top Downloads For: SSRN Logo2

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 28 May 2017 - 27 Jul 2017

Rank Paper Downloads
1.

Crypto Transaction Dispute Resolution

University of St. Thomas, Minnesota - School of Law and Department of Mathematics, Metropolitan State University
173
2.

A New Dawn for the Law of Illegality

University of Oxford - Faculty of Law
136
3.

The Choice Theory of Contracts (Introduction)

Tel Aviv University - Buchmann Faculty of Law and Columbia University - Columbia Law School
127
4.

The Design of Staged Contracting

University of Virginia School of Law and Stanford Law School
115
5.

Paternalism and Contract Law

University of Hull
105
6.

Justice, Fault, and Efficiency in Contract Law

University of Florida - Levin College of Law
84
7.

Over-Reliance Under Contractual Disgorgement

Hebrew University of Jerusalem - Faculty of Law and Hebrew University of Jerusalem
81
8.

The Failures of State Insurance Regulation

University of Minnesota Law School
79
9.

Postscript to Just Relationships: Reply to Gardner, West, and Zipursky

Tel Aviv University - Buchmann Faculty of Law and Tel Aviv University - Buchmann Faculty of Law
73
10.

Springwell-watch: New Insights into the Nature of Contractual Estoppel

London School of Economics - Law Department
71

 

Top Downloads For: SSRN Logo2

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 28 May 2017 - 27 Jul 2017

Rank Paper Downloads
1.

Crypto Transaction Dispute Resolution

University of St. Thomas, Minnesota - School of Law and Department of Mathematics, Metropolitan State University
173
2.

The Choice Theory of Contracts (Introduction)

Tel Aviv University - Buchmann Faculty of Law and Columbia University - Columbia Law School
127
3.

The Design of Staged Contracting

University of Virginia School of Law and Stanford Law School
115
4.

Paternalism and Contract Law

University of Hull
105
5.

Property and Sovereignty Imbricated: Why Religion Is Not an Excuse to Discriminate in Public Accommodations

Harvard Law School
95
6.

Over-Reliance Under Contractual Disgorgement

Hebrew University of Jerusalem - Faculty of Law and Hebrew University of Jerusalem
81
7.

Springwell-watch: New Insights into the Nature of Contractual Estoppel

London School of Economics - Law Department
71
8.

Disclosure Rules in Contract Law

Harvard Law School and Tel Aviv University
67
9.

Property and the Construction of the Information Economy: A Neo-Polanyian Ontology

Georgetown University Law Center
51
10.

Liberal Contract Theory and Actually Existing Contracts

New York University (NYU) - Furman Center for Real Estate and Urban Policy
47

July 27, 2017 in Recent Scholarship | Permalink | Comments (0)

Make Sure You Use Photos According to the License Agreement

Recently, Procter & Gamble has been sued for copyright infringement based on its use of photographs on packaging. It's not that P&G didn't have a license; it's that P&G allegedly violated the scope of the license. The allegations claim that P&G, trying to keep costs down, negotiated for fairly narrow rights. It makes a ton of sense to do that if that's all you want the photos for. After all, why pay for rights that you're probably not going to utilize? However, the caveat with that is to be sure that you won't want to use the photos beyond what you're negotiating. That's allegedly what P&G did, and why it finds itself the subject of a lawsuit. 

July 27, 2017 in Commentary, Current Affairs, In the News, Recent Cases, True Contracts | Permalink | Comments (0)

Wednesday, July 26, 2017

Court Refuses to Send Claims Against DirecTV to Arbitration

This recent case out of the Central District of California, Perez v. DirecTV Group Holdings, LLC, Case No. 8:16-cv-1440-JLS-DFMx, has some interesting allegations. The plaintiff claims that DirecTV contacted her, unsolicited, at her place of business and sold her a promotional deal there for satellite cable. After the plaintiff agreed to the deal, DirecTV installed the equipment that same day and then asked the plaintiff to sign an Equipment Lease Agreement (ELA). The ELA was entirely in English, even though all communications up to that point had taken place in Spanish (and even though DirecTV apparently had a Spanish-language version of the ELA). The plaintiff signed the ELA, even though she couldn't understand it and it wasn't translated for her, and gave it to the DirecTV representative. She was not given a copy to keep for herself. 

Later, after selling her the satellite cable, DirecTV then contacted the plaintiff to say that she didn't have permission to display the cable, since she was displaying it in a business. It demanded settlement of the purported illegal reception and display. The reception and display DirecTV complained about was the same equipment that DirecTV had just installed. DirecTV demanded $5,000 from the plaintiff to settle the claim. The plaintiff brought this class action, alleging that this was part of a scheme DirecTV had to target selling its services to small business owners (especially minority business owners) and then immediately turn around and accuse those small business owners of having purchased the wrong type of DirecTV for their businesses.  

DirecTV moved to compel arbitration.  The ELA did have an arbitration provision, and the plaintiff did sign it. However, the ELA referenced the Customer Agreement, which she did not receive until it was sent to her by mail later, and therefore the ELA's terms were actually ambiguous, meaning there was no clear agreement to arbitrate.  

DirecTV therefore argued that the plaintiff consented to arbitration when she received the Customer Agreement in the mail, with its full and thorough arbitration provision, and didn't cancel DirecTV's service. However, silence alone does not ordinarily represent acceptance. And the offer and acceptance on the contract between the plaintiff and DirecTV had already happened, on the day of installation. There was nothing in the ELA that indicated that the terms of the contract would change in the future when she received the Customer Agreement and that by keeping the Customer Agreement she was consenting to those changes. 

Other courts have enforced DirecTV's arbitration provision but those cases were distinguishable because those customers were given the Customer Agreement before installation. In at least one other case, a court enforced the Customer Agreement when it was provided after installation because of "practical business realities." This court, however, expressed skepticism that "business practicalities" were a valid justification, and, at any rate, there was no such business practicality at issue here. DirecTV could easily have provided the plaintiff with the Customer Agreement when service was installed. 

At any rate, even if the arbitration provision were enforceable, it excepted any dispute regarding "theft of service," which the case at issue concerns. DirecTV alleged that it was not required to arbitrate these disputes, but its customers were. This one-sided interpretation of this provision raised issues of unconscionability, especially paired with the plaintiff's powerlessness to negotiate the contract at all, which was not in a language she spoke, and which she did not receive until after she was in a position where to refuse the terms would have resulted in a contractual penalty of a cancellation fee of several hundred dollars. Therefore, the court refused to compel arbitration. 

July 26, 2017 in Recent Cases, Television, True Contracts | Permalink | Comments (0)

Tuesday, July 25, 2017

Differences Between German and American Law Don't Preclude German Forum

I started reading this case out of the Northern District of Alabama, ProctorU, Inc. v. TM3 Software GMBH, Civil Action Number 2:17-cv-00926-AKK (behind paywall), because it involves exam proctoring software, which of course is a type of software I am interested in. It ends up really being a case about forum selection and German law vs. American law. 

ProctorU alleged that TM3 was contractually obligated to provide software that could "accurately identify test-takers" within 140 characters. Instead, TM3 provided software that ProctorU claimed could not accurately identify test-takers, even after 280 characters. (I'm not sure how this works technologically; the opinion doesn't get into it beyond this, although I found the website for the software here.) ProctorU therefore sued in the Northern District of Alabama. TM3 moved to dismiss based on a forum selection clause in their contract that required cases to be brought in Germany. 

ProctorU tried to argue that the forum selection clause was unenforceable because of the differences between German and American law. For instance, a jury trial wouldn't be available to ProctorU, it wouldn't be able to recover punitive damages, and discovery would be much more limited than American discovery. The court, however, found that nothing about those differences indicated that ProctorU would be unable to prove its case in Germany. 

ProctorU also tried to argue that it had agreed to the forum selection clause based on misrepresentations by TM3, and that, having been induced by fraud, it should therefore be unenforceable. ProctorU alleged that TM3 told ProctorU its investor was the state of Bavaria, who would not agree to any forum selection clause that was not German. It turned out that Bavaria had only an indirect minority interest in TM3. ProctorU claimed had it known how minor the state of Bavaria's interest was, it would not have agreed to the German provision. However, the court found that the statement that the state of Bavaria was an investor was true; TM3 had not told ProctorU that the state of Bavaria was a majority investor. Furthermore, it was ProctorU's obligation to conduct due diligence before accepting the contract terms, which should have revealed who TM3's investors were. 

Therefore, the court dismissed the case based on the forum selection clause. 

July 25, 2017 in Recent Cases, True Contracts, Web/Tech | Permalink | Comments (0)

Friday, July 21, 2017

Scholarship Spotlight: Crypto Transaction Dispute Resolution (Kaal & Calcaterra)

 

Crypto Transaction Dispute Resolution

Wulf A. Kaal (University of St. Thomas, Minnesota - School of Law)

Craig Calcaterra (Department of Mathematics, Metropolitan State University)

Abstract

Blockchain-ImageThe rapid evolution of anonymous, autonomous, and distributed blockchain-based smart contracting creates friction and enforceability issues with existing legal and jurisdictional principles, calling the future governance of blockchain technology into question. The effective governance of blockchain technology and smart contracting is essential to ensuring its continuing evolution. Based on the mathematical principles underlying the disposition of blockchains, we propose and evaluate an alternative approach to the existing legal exercise of jurisdiction that is inherent in blockchain technology itself. We call this distributed jurisdiction.

This contribution is not merely theoretical. Several Ethereum smart contracting crypto startups demonstrate that anonymity can be perpetuated in blockchain technology, despite blockchains’ eternal storage of information and its growing size working against anonymity. Startup applications highlight that the technology itself offers means of internal controls that help ensure effective governance in the continuing evolution of the technology.

Based on the concept of distributed jurisdiction, we suggest an open source platform ecosystem for smart contracting dispute resolution that allows users to opt into a conflict resolution mechanism that enables more nuanced crypto solutions and produces greater certainty in the process. Anonymized arbiter expertise via rankings in combination with a representation option for crypto disputes provide a resolution mechanism for legacy businesses that desire to participate in the growth of crypto business opportunities, hope to avoid legacy system intermediation and the associated transaction costs, but require legal legacy system assurances and crypto dispute resolution equivalence.

July 21, 2017 in Recent Scholarship | Permalink | Comments (0)

Thursday, July 20, 2017

Contracts and Commercial Law Scholarship: Weekly Top Ten SSRN Downloads (July 20, 2017)

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Top Downloads For: SSRN Logo2

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 21 May 2017 - 20 Jul 2017

Rank Paper Downloads
1.

Crypto Transaction Dispute Resolution

University of St. Thomas, Minnesota - School of Law and Department of Mathematics, Metropolitan State University
142
2.

A New Dawn for the Law of Illegality

University of Oxford - Faculty of Law
133
3.

Determining the Territorial Scope of State Law in Interstate and International Conflicts: Comments on the Draft Restatement (Third) and on the Role of Party Autonomy

Indiana University Bloomington Maurer School of Law
117
4.

The Design of Staged Contracting

University of Virginia School of Law and Stanford Law School
105
5.

Paternalism and Contract Law

University of Hull
102
6.

The Failures of State Insurance Regulation

University of Minnesota Law School
77
7.

Over-Reliance Under Contractual Disgorgement

Hebrew University of Jerusalem - Faculty of Law and Hebrew University of Jerusalem
76
8.

Postscript to Just Relationships: Reply to Gardner, West, and Zipursky

Tel Aviv University - Buchmann Faculty of Law and Tel Aviv University - Buchmann Faculty of Law
73
9.

Justice, Fault, and Efficiency in Contract Law

University of Florida - Levin College of Law
71
10.

Springwell-watch: New Insights into the Nature of Contractual Estoppel

London School of Economics - Law Department
66

 

Top Downloads For: SSRN Logo2

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 21 May 2017 - 20 Jul 2017

Rank Paper Downloads
1.

Crypto Transaction Dispute Resolution

University of St. Thomas, Minnesota - School of Law and Department of Mathematics, Metropolitan State University
142
2.

Determining the Territorial Scope of State Law in Interstate and International Conflicts: Comments on the Draft Restatement (Third) and on the Role of Party Autonomy

Indiana University Bloomington Maurer School of Law
117
3.

The Design of Staged Contracting

University of Virginia School of Law and Stanford Law School
105
4.

Paternalism and Contract Law

University of Hull
102
5.

Property and Sovereignty Imbricated: Why Religion Is Not an Excuse to Discriminate in Public Accommodations

Harvard Law School
89
6.

Politicized Dispute Settlement in the Pre-Investment Treaty Era: A Micro-Historical Approach

University of Wisconsin Law School
82
7.

Over-Reliance Under Contractual Disgorgement

Hebrew University of Jerusalem - Faculty of Law and Hebrew University of Jerusalem
76
8.

Disclosure Rules in Contract Law

Harvard Law School and Tel Aviv University
65
9.

Costs Allocation Under the Amended Indian Arbitration Law: A Critique

Independent
56
10.

Springwell-watch: New Insights into the Nature of Contractual Estoppel

London School of Economics - Law Department
66

July 20, 2017 | Permalink | Comments (0)