ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Monday, October 24, 2016

Warning: Don't Bury Your Arbitration Clause in a Hodge-Podge Paragraph (my official legal term)

I have never been to a trampoline park but doing this blog has given me the impression that they're dangerous! I've already blogged about one in New York, in which the court refused to enforce a waiver of liability for negligence. Now, in this recent case out of Louisiana, Duhon v. Activelaf, No. 2016-CC-0818, a court again finds against another trampoline park's enforceability of its contract terms. This time the term at issue is the contract's arbitration provision. 

The plaintiff was injured at the trampoline park and filed suit seeking damages. The trampoline park responded seeking to compel arbitration pursuant to the agreement that the plaintiff was required to sign before entering the trampoline park.

However, the Louisiana Supreme Court found that the plaintiff did not consent to the arbitration clause. It noted that the clause was buried in the rest of the fairly lengthy agreement in such a way as to be concealed from the plaintiff. Specifically, it was found in the eleventh line of the third paragraph, a paragraph that also meandered through topics such as: the customer's physical ability to partake of the trampoline park, assumption of risks, agreement to follow the trampoline park's rules, and certification that customers would explain those rules to any children accompanying them. To the court, this hodge-podge, catch-all paragraph drowned the arbitration clause in the middle of unrelated information. This was extra-noteworthy because the rest of the agreement was divided into short one-topic paragraphs, save the relevant one containing the arbitration language. The court refers to it as being "camouflaged" within an eleven-sentence paragraph, nine sentences of which had nothing to do with arbitration. Because of this, the court found that the plaintiff did not truly consent to the arbitration provision. 

This was reinforced by a lack of mutuality in the provision. The clause required all customers of the trampoline park to submit to arbitration, but there was no corresponding requirement on the trampoline park's part. In conclusion, the court found the arbitration clause to be unenforceable. 

October 24, 2016 in Games, Recent Cases, True Contracts | Permalink | Comments (1)

KCON XII Call for Participation Now Live: Get Those Cards and Letters Coming!

KCON XII. CFP

October 24, 2016 in Conferences | Permalink | Comments (0)

Saturday, October 22, 2016

Donald Trump's Many Confidentiality Provisions

A friend of mine asked me the other day about the ongoing controversy over all of that unaired Apprentice footage that is apparently sitting around somewhere. MGM and Mark Burnett have both claimed that they are not allowed to release the tapes due to confidentiality provisions in their contracts with Donald Trump. (Fortune has an article about this here, as does the New York Times.) My friend's question basically boiled down to this: Yeah, sure, maybe that deal made sense when the contract was signed with a New York self-professed billionaire but now he's running for President of the United States, and shouldn't that mean something? 

Other people have raised this issue. What seems to me unique about the Donald Trump situation isn't necessarily the confidentiality provisions over the Apprentice tape, but how often, during this political campaign, we've been debating the secrecy Trump requires from all of those around him. The Apprentice contract is just the latest example of this. Over the summer, several news outlets reported on the unusually broad terms of the NDA Trump required his staffers to sign. To be fair, NDAs are not unusual during a Presidential campaign and Hillary Clinton has allegedly had her staffers sign them as well. But Trump's apparently are unusually broad, and he requires them even of volunteers who show up to make calls for Trump's campaign and presumably never even really meet Trump? What confidential information could these volunteers even know? Well, Trump is the one who gets to tell them that. And he's not afraid to sue on the NDAs: We know of at least one arbitration filed against a former staffer, alleging damages of $10 million

Two things I take away from this: 

(1) Donald Trump seems to be obsessed with controlling his image, which makes total sense, as he's made an entire career out of Being Donald Trump and it could even make him President. Trump is so fond of restricting what those around him can say about him that he's even said he'll make his federal employees sign NDAs if he does become President. At the same time, of course, Trump himself doesn't appear to feel restrained in any way to say any thought that comes into his head. So we seem to have a situation where part of the advantage of being rich is being able to say absolutely anything you want and also control to some degree what the people around you get to say, even once your relationship with them has been terminated.  

(2) Despite this, however, we all know more about Donald Trump than I think he wants us to know. In the relentless glare of a Presidential campaign, no matter how many NDAs you leave in your wake, is it just impossible to keep secrets forever? And, maybe, is there something comforting about that? My friend wants to see the Apprentice tapes, but we don't know what's in the Apprentice tapes, and we don't know who even has time to review them. But we do know a great deal, maybe not Apprentice-related, but maybe enough? 

P.S. This is not the first time I've blogged about Donald Trump's contracts. If you're curious, that case hasn't really progressed since that blog entry. 

October 22, 2016 in Celebrity Contracts, Commentary, Current Affairs, In the News, True Contracts | Permalink | Comments (0)

Friday, October 21, 2016

Non-Assignment Clauses and Patent Assignments

If a patent license agreement contains a non-assignment clause, does that also prohibit assignment of the patent?  A recent case said not necessarily.  It depends on the precise wording.

In Au New Haven v. YKK Corp. (1:15-cv-3411-GHW), (thanks to Finnegan's law firm) YKK entered into an exclusive license agreement with the patent owner, Au New Haven (actually the inventors, but I'm simplifying things here).  The agreement contained the following clause:

“Neither party hereto shall assign, subcontract, sublicense or otherwise transfer this Agreement or any interest hereunder, or assign or delegate any of its rights or obligations hereunder, without the prior written consent of the other party.  Any such attempted assignment, subcontract, sublicense or transfer thereof shall be void and have no force or effect.  This Agreement shall be binding upon, and shall inure to the benefit of the parties hereto and their respective successors and heirs.  “

Subsequently, Au New Haven assigned the patent to Trelleborg without requesting YKK’s consent.  Au New Haven and Trelleborg later sued YKK for patent infringement and breach of the patent licensing agreement.  YKK filed a motion to dismiss against Trelleborg, arguing that Trelleborg lacked standing to sue for patent infringement because Au New Haven failed to obtain YKK’s consent to the patent assignment which meant that it was void as stated in the agreement.

The federal district court (SDNY) stated that the anti-assignment language did not expressly limit transfer of the underlying patent or render it void.  The question then was whether the patent constituted an “interest hereunder,” meaning an interest under the licensing agreement.  The court stated:

“Here, the anti-assignment provision does not expressly bar transfers of the ‘214 Patent itself, or render transfers fo the ‘214 Patent void…the 2014 Assignment would be void ab initio only if the ‘214 Patent is an “interest” under the licensing agreement (i.e., an “interest hereunder”).  The Court finds that it is not.”

The Court’s rationale was that although the ‘214 Patent was the subject of the agreement, it did not “originate” from the licensing agreement, it did not “arise under” the agreement and it was not “created” in accordance with the agreement.  Consequently, the anti-assignment provisions did not render the underlying patent assignment void and Trelleberg had standing to sue for patent infringement.

The decision doesn’t seem right to me.  If the plaintiffs couldn’t assign their rights under the agreement, but they could assign their patent rights to a third party, then wouldn't they be in breach of contract at the very least?  Notably, the Court’s conclusion was limited to whether the patent assignment was void, not whether it breached the licensing agreement.  It was thus following New York law by narrowly construing the effect of an anti-assignment clause.  Still, I don't think it makes sense to construe a clause so that it permits a party to do something that would be a breach of the agreement (which is different from construing a clause as a personal covenant where a violation of the clause would be a breach of contract but the assignment would still be enforceable).  The case could lead to some pretty puzzling results and not necessarily in favor of Au New Haven....

October 21, 2016 in Miscellaneous, Recent Cases | Permalink | Comments (0)

Thursday, October 20, 2016

Deborah Post Named Lifetime Achievement Honoree for KCON XII

 

KCON12-Logo

The organizers and steering committee for the 12th International Conference on Contracts have announced that this year's Lifetime Achievement honoree will be Deborah Post, Professor of Law at Touro College Jacob D. Fuchsberg School of Law. Professor Post will receive the award honoring her career on February 24, 2017 at KCON XII at Southwestern Law School in Los Angeles.

Prof_Deborah_Post Deborah W. Post graduated cum laude from Hofstra University with a major in Anthropology and took a job first as an editorial assistant and then as a teaching assistant to Margaret Mead, the noted anthropologist, before attending Harvard Law School. She began her legal career working in the corporate section of a law firm in Houston, Texas. She left practice for a position at the University of Houston Law School and moved to New York to Touro Law Center in 1987. In the academic year 1994-95 she was a visiting professor at Syracuse Law School. In 2000 she was Distinguished Visiting Professor at DePaul Law School. Professor Post has written extensively in what she considers her three areas of expertise: business associations, legal education and critical race theory. Professor Post seeks to apply an anthropologist's sensibilities and methodologies to the study of law.

Among her most recent efforts are a book on legal education, Cultivating Intelligence: Power, Law and the Politics of Teaching written with a colleague, Louise Harmon and published by New York University Press and a casebook for contracts called Contracting Law with co-authors Amy Kastely and Sharon Hom.

Omni-los-angeles-hotel-exteriorSpeaking of KCON XII, have you registered get? Conference registration and hotel information is available here. Registration by December 15, 2016 will get you the early-bird rate of $250. You should also register and book your room at the Omni Los Angeles Hotel while discounted rooms in the conference block are still available. But hurry! A conference Call for Proposals will be coming out shortly, and we will publish that information here on the blog.

October 20, 2016 in Conferences | Permalink | Comments (0)

Weekly Top Ten SSRN Contracts Downloads (October 20, 2016)

Top-10 Glass

SSRN Top Downloads For SSRN Logo2
Contracts & Commercial Law eJournal

Rank Downloads Paper Title
1 367 Choice of Forum Agreements Under the Brussels I Recast and Under the Hague Convention: Coherences and Clashes
Matthias Weller
EBS Universität für Wirtschaft und Recht
2 275 The Myth of Free
John M. Newman
University of Memphis - Cecil C. Humphreys School of Law
3 220 The Law of Smart Contracts
Max Raskin
New York University (NYU), School of Law
4 215 Inside Safe Assets
Anna Gelpern and Erik F. Gerding
Georgetown University Law Center and University of Colorado Law School
5 195 The Role of the State in Contract Law: The Common-Civil Law Divide
Mariana Pargendler
Fundação Getulio Vargas Law School at São Paulo
6 158 Discussion Draft of a Directive on Online Intermediary Platforms
Christoph Busch, Gerhard Dannemann, Hans Schulte-Nölke, Aneta Wiewiórowska-Domagalska and Fryderyk Zoll
University of Osnabrück - European Legal Studies Institute, Humboldt University of Berlin - Faculty of Law, European Legal Studies Institute Osnabrueck / Radboud University Nijmegen, Universität Osnabrück - European Legal Studies Institute and Universität Osnabruck
7 148 Is Privacy Policy Language Irrelevant to Consumers?
Lior Strahilevitz and Matthew B. Kugler
University of Chicago Law School and Northwestern University - Pritzker School of Law
8 128 Tort Reform through the Backdoor: A Critique of Law & Apologies
Yonathan A. Arbel and Yotam Kaplan
Harvard Law School and Hebrew University of Jerusalem
9 118 Engineering Humans with Contracts
Brett M. Frischmann and Evan Selinger
Yeshiva University - Benjamin N. Cardozo School of Law and Rochester Institute of Technology - Department of Philosophy
10 124 The Reform of the French Law of Obligations: Les Jeux Sont Faits
Jan M. Smits and Caroline Calomme
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI) and Maastricht European Private Law Institute (M-EPLI)

SSRN Top Downloads For SSRN Logo2
Law & Society: Private Law - Contracts eJournal

Rank Downloads Paper Title
1 367 Choice of Forum Agreements Under the Brussels I Recast and Under the Hague Convention: Coherences and Clashes
Matthias Weller
EBS Universität für Wirtschaft und Recht
2 275 The Myth of Free
John M. Newman
University of Memphis - Cecil C. Humphreys School of Law
3 220 The Law of Smart Contracts
Max Raskin
New York University (NYU), School of Law
4 217 Trophy Hunting Contracts: Unenforceable for Reasons of Public Policy
Myanna F. Dellinger
University of South Dakota Law School
5 195 The Role of the State in Contract Law: The Common-Civil Law Divide
Mariana Pargendler
Fundação Getulio Vargas Law School at São Paulo
6 124 The Reform of the French Law of Obligations: Les Jeux Sont Faits
Jan M. Smits and Caroline Calomme
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI) and Maastricht European Private Law Institute (M-EPLI)
7 117 Evolution or Intelligent Design? The Variation in Pari Passu Clauses
Stephen J. Choi, G. Mitu Gulati and Robert E. Scott
New York University School of Law, Duke University School of Law and Columbia University - Law School
8 116 Causa and Consideration – A Comparative Overview
Dimitar Stoyanov
New Bulgarian University, Department of Law
9 100 The Expanding Circle of Contract Law
Jan M. Smits
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI)
10 97 Optimal Fee-Shifting Bylaws
Albert H. Choi
University of Virginia School of Law

October 20, 2016 in Recent Scholarship | Permalink | Comments (0)

Tuesday, October 18, 2016

Contract Clauses and Transactional Skills

Fundamentals of Contract Law

I'm happy to report that my new book, The Fundamentals of Contract Law and Clauses, is now available.  The book is intended to give students a working knowledge of contract law, meaning that they learn the meaning of contract clauses and how they are shaped and affected by doctrine.  It's a textbook but it's not a casebook - it's intended to be used as a supplement in a first year contracts course or a primary text in a business school or undergraduate contracts law course.  (There's a Teacher's Manual which is available to instructors adopting the book which contains discussion points and exercises). 

 It always seemed a bit strange to me to teach contracts law solely by using cases - this emphasizes how to win disputes rather than how to avoid them.  This makes sense for litigators, but transactional attorneys (which I was for a decade) have a different role.  As Mark Burge has pointed out on this blog, contracts is a good gateway to transactional skills but it's not easy to figure out how to do that seamlessly.  Hopefully, this book will be an easy way to incorporate some "transactional skills" into a first year contracts course. 

October 18, 2016 in Books, Miscellaneous, Teaching | Permalink | Comments (0)

Monday, October 17, 2016

If Albert Einstein Wins the Nobel Prize...

I was listening to the podcast No Such Thing as a Fish (highly recommended) when I learned that Einstein used his Nobel Prize money as a divorce settlement to his first wife...the only catch being that he divorced her in 1919 and won the Nobel Prize in 1921. The podcast characterized this as: "If I win the Nobel Prize, I'll give you the money." Amazing! Imagine being so confident in your Nobel Prize chances! (I guess if you are Einstein, you would be that confident.) 

I couldn't find the contract myself, although the story was verified by Time and also shows up on Wikipedia

I know I just found a new go-to hypo to use in class. 

October 17, 2016 in Celebrity Contracts, Commentary, Law Schools, Teaching, True Contracts | Permalink | Comments (2)

Friday, October 14, 2016

George Richard Lunn, Clergyman, Politician, Ice House Owner

This week, while teaching parol evidence, I taught the case of Mitchill v. Lath, which involves an oral agreement between the parties to tear down an ice house on land to the land their sales agreement was about. A student asked what the deal was with the guy who owned the land the ice house was on, and I admit I didn't know the deal, so I went and looked it up, and here's the deal: 

He was George Richard Lunn, a clergyman who was born in Iowa but settled in Schenectady, where he was elected mayor on a Socialist ticket and later served in the House of Representatives and as Lieutenant Governor of New York. I had no idea who Lunn was and thought it was interesting that he turned out to have a Wikipedia page. The Wikipedia page doesn't mention his role in Mitchill v. Lath but his Prabook entry does. 

October 14, 2016 in Famous Cases, Law Schools, Teaching, True Contracts | Permalink | Comments (0)

Month-long TV Station Outage and the Duty of Good Faith

DISH Network sells satellite television packages to viewers nationwide.  In 2014, its contracts with Turner Network Sales and FOX News Networks expired. DISH was not able to negotiate renewals with these stations for approximately one month. DISH Network also did not offer complaining subscribers any form of monetary relief for the interruptions with the result that subscribers that had selected packages including FOX and Turner TV filed a class action suit for breach of contract in spite of being able to access literally hundreds of other channels.

One of the issues on appeal before the Eighth Circuit Court of Appeals was whether DISH Network violated the duty of good faith and fair dealing by not providing those two particular channels in an uninterrupted manner.  The court found that not to be the case. Images

The contract provided a Limitation of Liability Clause which, in relation to interruptions and delays, stated that “[n]either we nor our third-party billing agents … will be liable for any interruption in any service or for any delay or failure to perform, including without limitation … DISH Network’s access to all or any portion of services….”

The covenant of good faith will “not contradict terms or conditions for which a party has bargained.”  Thus, said the court, the argument was precluded by the unambiguous terms of the agreement.  “Courts must take care to ensure that we don’t use the covenant as another means for substituting a different deal from the one the parties contemplated.” 

That makes sense.  I can’t help thinking how litigious our society can be in allowing suits such as the above to proceed that far.  Does it really matter that one cannot get a couple of TV stations out of hundreds for a month?  Is it worth burdening the court system such a matter?

On the other hand, DISH could also just have offered some sort of compensation to its customers.  Cable TV is indeed very expensive these days, so the subscribers do have a point here. 

Furthermore, Cable TV providers still refuse to unbundle services to an arguably sufficient extent.  What about those of us who really truly only want to see a few specific stations?  Why should we continually have to pay for a bunch of extra stations that we never watch?  Until such unbundling become reality, arguments such as there being many other stations to choose from are arguably somewhat irrelevant.

The case is Neil Stokes; Craig Felzien v. DISH Network, L.L.C., 2016 WL 5746329.

October 14, 2016 in Current Affairs, Recent Cases, Television | Permalink

Thursday, October 13, 2016

Weekly Top Ten SSRN Contracts Downloads (October 13, 2016)

Top-10 wStars

 

SSRN Top Downloads For SSRN Logo2
Contracts & Commercial Law eJournal

Rank Downloads Paper Title
1 362 Choice of Forum Agreements Under the Brussels I Recast and Under the Hague Convention: Coherences and Clashes
Matthias Weller
EBS Universität für Wirtschaft und Recht
2 221 Making America Worse: Jobs and Money at Trump Casinos, 1997-2010
Jonathan C. Lipson
Temple University - James E. Beasley School of Law
3 206 The Myth of Free
John M. Newman
University of Memphis - Cecil C. Humphreys School of Law
4 152 Sizing up Private Law
Andrew S. Gold and Henry E. Smith
DePaul University College of Law and Harvard Law School
5 146 Is Privacy Policy Language Irrelevant to Consumers?
Lior Strahilevitz and Matthew B. Kugler
University of Chicago Law School and Northwestern University - Pritzker School of Law
6 121 Tort Reform through the Backdoor: A Critique of Law & Apologies
Yonathan A. Arbel and Yotam Kaplan
Harvard Law School and Hebrew University of Jerusalem
7 115 Evolution or Intelligent Design? The Variation in Pari Passu Clauses
Stephen J. Choi, G. Mitu Gulati and Robert E. Scott
New York University School of Law, Duke University School of Law and Columbia University - Law School
8 111 Causa and Consideration – A Comparative Overview
Dimitar Stoyanov
New Bulgarian University, Department of Law
9 150 Discussion Draft of a Directive on Online Intermediary Platforms
Christoph Busch, Gerhard Dannemann, Hans Schulte-Nölke, Aneta Wiewiórowska-Domagalska and Fryderyk Zoll
University of Osnabrück - European Legal Studies Institute, Humboldt University of Berlin - Faculty of Law, European Legal Studies Institute Osnabrueck / Radboud University Nijmegen, Universität Osnabrück - European Legal Studies Institute and Universität Osnabruck
10 167 The Law of Smart Contracts
Max Raskin
New York University (NYU), School of Law

 

SSRN Top Downloads For SSRN Logo2
Law & Society: Private Law - Contracts eJournal

Rank Downloads Paper Title
1 363 Choice of Forum Agreements Under the Brussels I Recast and Under the Hague Convention: Coherences and Clashes
Matthias Weller
EBS Universität für Wirtschaft und Recht
2 214 Trophy Hunting Contracts: Unenforceable for Reasons of Public Policy
Myanna F. Dellinger
University of South Dakota Law School
3 206 The Myth of Free
John M. Newman
University of Memphis - Cecil C. Humphreys School of Law
4 167 The Law of Smart Contracts
Max Raskin
New York University (NYU), School of Law
5 115 Evolution or Intelligent Design? The Variation in Pari Passu Clauses
Stephen J. Choi, G. Mitu Gulati and Robert E. Scott
New York University School of Law, Duke University School of Law and Columbia University - Law School
6 111 Causa and Consideration – A Comparative Overview
Dimitar Stoyanov
New Bulgarian University, Department of Law
7 99 The Role of Contract: Stewart Macaulay's Lessons from Practice
Brian Bix
University of Minnesota Law School
8 90 The Reform of the French Law of Obligations: Les Jeux Sont Faits
Jan M. Smits and Caroline Calomme
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI) and Maastricht European Private Law Institute (M-EPLI)
9 84 'All the World's a Stage': The Seven Ages of Unjust Enrichment
Graham Virgo
University of Cambridge - Faculty of Law
10 96 The Expanding Circle of Contract Law
Jan M. Smits
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI)

October 13, 2016 in Recent Scholarship | Permalink | Comments (0)

Wednesday, October 12, 2016

Haunted House Waivers

 

Horror in Prater.jpg
By Jebulon - Own work, CC0, Link (This is basically as scary as I can handle.)

'Tis the season!

No, not that season--yet--although last week I was shopping and noticed that the shelves are full of Christmas merchandise already so maybe it is that season. 

But the real season is Halloween! Now I enjoy Halloween well enough but I'm not much of a haunted house person (or even a scary movie person), so I don't know much about them, and I was fascinated to learn that there are several haunted houses around the country that require attendees to sign waivers. In the words of this Cosmo article, "A 'if you're so scared that you actually die, your family won't sue us into oblivion' type of waiver." (Some haunted houses even involve electric shocks, I was told. Electric shocks!! I had no idea.)

I was able to locate a couple of these haunted house waivers online. Here's one that acknowledges risk of animal bites and contacts with poisonous plants (yikes!). Here's another one (with I have to admit a fair amount of typos) that contains a little clause down at the bottom acknowledging that you've been offered safety glasses. 

At least one article queries whether this practice is entirely legal. The article asks, "Is it okay to mentally and even physically abuse individuals if they sign a waiver? Is there a limit to what should be legally acceptable?" and notes that few people are able to complete the experience and that it frequently leaves participants bruised, cut, and apparently shivering with shock. The haunted house they're talking about in the article requires guests to go through a health check first, I guess to try to minimize the possibility that they will suffer any lasting harm--either physically or mentally--from whatever crazy thing is going on in there. While this might sound terrifying to me, it apparently just sounds like an awesome time to a bunch of people. According to this article, there's a 17,000-person waiting list to get into this haunted house. 

Another interesting thing I learned while researching this stuff (peering at the scary descriptions from between my fingers) is that apparently some of the haunted houses also make the guests sign confidentiality provisions? I guess to preserve the surprise for others. At any rate, now I've creeped myself out just looking at this stuff and I need to go watch some HGTV just to stop shuddering!

Btw, if you are a haunted house person and you're curious if one of these extreme you-would-have-to-pay-me-a-million-dollars-to-go-in-here experiences is near you, I found lists here and here. Or feel free to leave your personal favorite in the comments! Happy haunting!

October 12, 2016 in Current Affairs, In the News, True Contracts | Permalink | Comments (0)

Monday, October 10, 2016

Nobel Prize for... Contracts!

This is a big day for contracts!  First was the launch of the JOTWELL Contracts section - and now this - the Nobel Prize for Economics was awarded to Oliver Hart (Harvard) and Bengt Holmstrom (MIT) for their work on contracts!  Their work addressed how contracts could encourage mutually beneficial behavior, and had an influence on a range of contracts types, including employment contracts.  Congratulations to both!

 

 

October 10, 2016 in Current Affairs | Permalink | Comments (0)

JOTWELL - Contracts section

Exciting news!  JOTWELL (the Journal of Things We Like - Lots!) has a new Contracts section - and it has just gone live!  David Hoffman (Temple) and I are the Section editors.  Aditi Bagchi (Fordham), Dan Barnhizer (Michigan State),  Shawn Bayern (Florida State), Omri Ben-Shahar (Chicago), Martha Ertman (Maryland),  Robert Hillman (Cornell), Hila Keren (Southwestern), Florencia Marotta-Wurgler (NYU), Eboni Nelson (South Carolina), Robert Scott (Columbia), Tess Wilkinson-Ryan (Pennsylvania) and Eyal Zamir (Hebrew University) are contributing editors so expect to see articles from them over the next few months. 

The inaugural article is by Prof. Robert Hillman of Cornell and reviews Aaron Perzanowski & Chris Jay Hoofnagle's article, What We Buy When We Buy Now, (forthcoming U. Pa. L. Rev.).  The article raises interesting issues about ownership of digital "goods" and has already sparked interest in the popular press.

Welcome to the world of contracts JOTWELL!

 

 

October 10, 2016 in Commentary, Contract Profs, Miscellaneous, Recent Scholarship, Web/Tech | Permalink | Comments (0)

Thursday, October 6, 2016

Weekly Top Ten SSRN Contracts Downloads (October 6, 2016)

Top-10 Scrolling

SSRN Top Downloads For SSRN Logo (small)
Contracts & Commercial Law eJournal

Rank Downloads Paper Title
1 354 Choice of Forum Agreements Under the Brussels I Recast and Under the Hague Convention: Coherences and Clashes
Matthias Weller
EBS Universität für Wirtschaft und Recht
2 197 The Myth of Free
John M. Newman
University of Memphis - Cecil C. Humphreys School of Law
3 161 The Puzzle of PDVSA Bond Prices
Paolo Colla, Anna Gelpern and G. Mitu Gulati
Bocconi University - Department of Finance, Georgetown University Law Center and Duke University School of Law
4 146 Sizing up Private Law
Andrew S. Gold and Henry E. Smith
DePaul University College of Law and Harvard Law School
5 134 Is Privacy Policy Language Irrelevant to Consumers?
Lior Strahilevitz and Matthew B. Kugler
University of Chicago Law School and Northwestern University - Pritzker School of Law
6 120 The Law of Smart Contracts
Max Raskin
New York University (NYU), School of Law
7 119 Discussion Draft of a Directive on Online Intermediary Platforms
Christoph Busch, Gerhard Dannemann, Hans Schulte-Nölke, Aneta Wiewiórowska-Domagalska and Fryderyk Zoll
University of Osnabrück - European Legal Studies Institute, Humboldt University of Berlin - Faculty of Law, European Legal Studies Institute Osnabrueck / Radboud University Nijmegen, Universität Osnabrück - European Legal Studies Institute and Universität Osnabruck
8 116 Tort Reform through the Backdoor: A Critique of Law & Apologies
Yonathan A. Arbel and Yotam Kaplan
Harvard Law School and Hebrew University of Jerusalem
9 110 Evolution or Intelligent Design? The Variation in Pari Passu Clauses
Stephen J. Choi, G. Mitu Gulati and Robert E. Scott
New York University School of Law, Duke University School of Law and Columbia University - Law School
10 109 Causa and Consideration – A Comparative Overview
Dimitar Stoyanov
New Bulgarian University, Department of Law

 

SSRN Top Downloads For SSRN Logo (small)
Law & Society: Private Law - Contracts eJournal

Rank Downloads Paper Title
1 354 Choice of Forum Agreements Under the Brussels I Recast and Under the Hague Convention: Coherences and Clashes
Matthias Weller
EBS Universität für Wirtschaft und Recht
2 210 Trophy Hunting Contracts: Unenforceable for Reasons of Public Policy
Myanna F. Dellinger
University of South Dakota Law School
3 197 The Myth of Free
John M. Newman
University of Memphis - Cecil C. Humphreys School of Law
4 120 The Law of Smart Contracts
Max Raskin
New York University (NYU), School of Law
5 110 Evolution or Intelligent Design? The Variation in Pari Passu Clauses
Stephen J. Choi, G. Mitu Gulati and Robert E. Scott
New York University School of Law, Duke University School of Law and Columbia University - Law School
6 109 Causa and Consideration – A Comparative Overview
Dimitar Stoyanov
New Bulgarian University, Department of Law
7 94 The Role of Contract: Stewart Macaulay's Lessons from Practice
Brian Bix
University of Minnesota Law School
8 90 The Expanding Circle of Contract Law
Jan M. Smits
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI)
9 75 Ordinary Contract Principles
Robert A. Hillman
Cornell Law School
10 62 Human Rights and English Contract Law: Parallel Worlds?
Francois du Bois
University of Leicester - School of Law

October 6, 2016 in Recent Scholarship | Permalink | Comments (0)

Wednesday, October 5, 2016

Further Adventures in Hip-Hop Contracts: Jay-Z Edition

Hip-Hop Contracts Week continues! This time with a recent ruling out of the Southern District of New York in Walker v. Carter, #1:12-cv-05384-ALC-RLE (behind paywall). 

Rocafella

source: Wikipedia

In the case, the plaintiff, Walker, sued Jay-Z and others regarding not a song but the logo for Roc-a-Fella Records. The court was dismissive of Walker's relationship to the logo right off the bat: "Plaintiff casts himself as the creative mastermind of the Logo's design, though he admits that he neither came up with the idea for the Logo nor drew any part of it." Right away you can tell that this doesn't sound like a judge who's inclined to find for the plaintiff here. 

And he doesn't. He grants defendants' motion for summary judgment, finding that there was no evidence of any written contract between the parties and so Walker's breach of contract claims could not survive. Walker had alleged that he and the defendants had entered into a contract providing for royalties to be paid over a period of ten years. Unfortunately for Walker, this contract--which couldn't possibly be performed within a year--is subject to the Statute of Frauds and required to be in writing, or at least for there to be sufficient evidence that a writing once existed. Generally, in New York this evidence has consisted of either the admission by the other party that a writing did exist at one time or the testimony of witnesses regarding the signing and content of the now-lost writing. Here, defendants denied that any writing had ever existed (which seems predictable, frankly) and Walker could produce no witnesses as to the signing of the contract, as Walker stated that no one other than the defendants and himself were there when the contract was signed.

Walker did produce two witnesses regarding the existence of the contract. However, they were insufficient. One testified that he had seen a piece of paper Walker told him was a contract but that he didn't read the contract and did not know what the contract said. The other testified in a number of ways that contradicted Walker's own testimony regarding the contract: Walker claimed to have written the contract in the same face-to-face meeting when it was signed, but the witness claimed to have seen the contract before it was signed, which couldn't have been possible if Walker's testimony was true. Walker claimed to have lost the contract in 1996, but the witness claimed to have seen it in 2000. Walker claimed the contract was written on blank paper, the witness claimed the contract was on lined paper. Et cetera. The court felt justified, given all of these impossible contradictions in the testimony, in disregarding this witness's testimony, especially since the witness also claimed to have a direct interest in the contract due to his close relationship with Walker. In fact, the court recounted that the witness had initially testified that he had never seen the contract, and only changed his testimony after being spoken to by counsel and after the statute of frauds had become an issue in the case. 

Therefore the court concluded that the statute of frauds required the contract to be in writing, there was no writing, and there was no genuine issue of material fact that there had ever been a writing, and so granted defendants' summary judgment motion. 

(He also found that Walker's copyright infringement claims were time-barred, so this was a total victory for Jay-Z and the other defendants.)

(A Reuters article about the case can be found here.)

October 5, 2016 in Celebrity Contracts, Commentary, Current Affairs, Music, Recent Cases, True Contracts | Permalink | Comments (0)

Monday, October 3, 2016

50 Cent, P.I.M.P., and Contracts Concerning Hip-Hop Songs

In 2003, 50 Cent released the song "P.I.M.P." The song was a huge top-ten hit for the hip-hop artist, achieving gold status in sales. 

The problem is that Brandon Parrott alleges that the song contains, without his prior consent, a track he wrote called "BAMBA." 

The parties had apparent discussions about this in 2003, entering into a settlement agreement under which Parrott received some royalties on "P.I.M.P." in exchange for Parrott licensing the pieces of his song that were used in "P.I.M.P." and agreeing to release all of his remaining claims. According to the defendants, the contract between the parties contained a clause in which Parrott represented "that no promise, representation, or inducement not expressed herein" was made in connection with the contract. 

The parties are back in court, though, with Parrott alleging in a pro se complaint filed in the Central District of California, Parrott v. Porter, #2:16-cv-04287-SJO-GJS (behind paywall), that that the settlement agreement is invalid because he was basically tricked into signing it "under false and fraudulent pretenses." Parrot argues that he thought the defendants acted in "Good Faith" and used "BAMBA" in "P.I.M.P." entirely accidentally. However, Parrott claims that he has now realized that the defendants knew that "P.I.M.P." contained Parrot's music and deliberately released "P.I.M.P." without attempting to contact Parrot for permission beforehand. In addition, Parrott appears to contend that there are inconsistencies with the royalty statements he's been sent under the settlement agreement that he has been unable to reconcile due to the defendants' lack of cooperation.

The defendants have now responded to the complaint with a motion to dismiss, apparently resting mainly on the fact that the settlement agreement is valid and governs the situation between the parties, under which Parrott has been collecting royalties for years. 

Where is 50 Cent in all of this? Preoccupied with his own ongoing bankruptcy proceedings. 

(Hollywood Reporter article on all this here.)

October 3, 2016 in Celebrity Contracts, Current Affairs, In the News, Music, True Contracts | Permalink | Comments (0)

Friday, September 30, 2016

Payments Law Meets Free Speech at the Supreme Court

Credit-cardsYesterday, the United States Supreme Court granted certiorari in the case of Expressions Hair Design v. Schneiderman, which could result in a significant change in the way end users perceive credit card use. The issuing banks and card networks would, for obvious reasons, prefer a system in which the costs of card usage are borne by merchants and are hidden from the card-using customers who then perceive card use as free. Since that preference has found its way into the law of several states, it has raised a First Amendment issue.

Tony Mauro of law.com summarizes the case as follows:

In the Expressions case, the court will be asked to decide the constitutionality of laws in 10 states that allow merchants to charge customers more for credit-card transactions—but require them to call the difference a cash “discount,” not a credit-card “surcharge.” California, Connecticut, Florida, Massachusetts, New York and Texas are among the states with similar statutes on the books.

The credit-card industry has lobbied for such laws since the 1980s, critics say, because using the word “surcharge” would discourage shoppers from using credit cards.

“A ‘surcharge’ and a ‘discount’ are just two ways of framing the same price information—like calling a glass half full instead of half empty,” Deepak Gupta of Gupta Wessler wrote in his petition challenging New York’s law. “But consumers react very differently to the two labels, perceiving a surcharge as a penalty for using a credit card.”

Expressions Hair Design posted a sign that said it would charge three percent more for paying by credit “due to the high swipe fees charged by the credit-card industry.” It and other merchants challenged the law as a violation of their First Amendment speech rights. The U.S. Court of Appeals for the Second Circuit rejected the claim, finding that the law regulates “merely prices,” not speech.

*   *   *

A coalition of large merchants including Albertsons, Rite Aid and Spirit Airlines sided with the petitioners in urging the court to take the case.

September 30, 2016 in Current Affairs, E-commerce, Recent Cases | Permalink | Comments (0)

Thursday, September 29, 2016

Weekly Top Ten SSRN Contracts Downloads (September 29, 2016)

Top-ten-books

SSRN Top Downloads For SSRN Logo (small)
Contracts & Commercial Law eJournal

Rank Downloads Paper Title
1 336 Choice of Forum Agreements Under the Brussels I Recast and Under the Hague Convention: Coherences and Clashes
Matthias Weller
EBS Universität für Wirtschaft und Recht
2 190 The Myth of Free
John M. Newman
University of Memphis - Cecil C. Humphreys School of Law
3 161 The Puzzle of PDVSA Bond Prices
Paolo Colla, Anna Gelpern and G. Mitu Gulati
Bocconi University - Department of Finance, Georgetown University Law Center and Duke University School of Law
4 142 Sizing up Private Law
Andrew S. Gold and Henry E. Smith
DePaul University College of Law and Harvard Law School
5 122 Is Privacy Policy Language Irrelevant to Consumers?
Lior Strahilevitz and Matthew B. Kugler
University of Chicago Law School and Northwestern University - Pritzker School of Law
6 114 Tort Reform through the Backdoor: A Critique of Law & Apologies
Yonathan A. Arbel and Yotam Kaplan
Harvard Law School and Hebrew University of Jerusalem
7 106 Causa and Consideration – A Comparative Overview
Dimitar Stoyanov
New Bulgarian University, Department of Law
8 104 Discussion Draft of a Directive on Online Intermediary Platforms
Christoph Busch, Gerhard Dannemann, Hans Schulte-Nölke, Aneta Wiewiórowska-Domagalska and Fryderyk Zoll
University of Osnabrück - European Legal Studies Institute, Humboldt University of Berlin - Faculty of Law, European Legal Studies Institute Osnabrueck / Radboud University Nijmegen, Universität Osnabrück - European Legal Studies Institute and Universität Osnabruck
9 95 Engineering Humans with Contracts
Brett M. Frischmann and Evan Selinger
Yeshiva University - Benjamin N. Cardozo School of Law and Rochester Institute of Technology - Department of Philosophy
10 93 Consumer Protection in the Age of Big Data
Max N. Helveston
DePaul University - College of Law

 

SSRN Top Downloads For SSRN Logo (small)
Law & Society: Private Law - Contracts eJournal

Rank Downloads Paper Title
1 336 Choice of Forum Agreements Under the Brussels I Recast and Under the Hague Convention: Coherences and Clashes
Matthias Weller
EBS Universität für Wirtschaft und Recht
2 209 Trophy Hunting Contracts: Unenforceable for Reasons of Public Policy
Myanna F. Dellinger
University of South Dakota Law School
3 190 The Myth of Free
John M. Newman
University of Memphis - Cecil C. Humphreys School of Law
4 106 Causa and Consideration – A Comparative Overview
Dimitar Stoyanov
New Bulgarian University, Department of Law
5 92 The Role of Contract: Stewart Macaulay's Lessons from Practice
Brian Bix
University of Minnesota Law School
6 87 Evolution or Intelligent Design? The Variation in Pari Passu Clauses
Stephen J. Choi, G. Mitu Gulati and Robert E. Scott
New York University School of Law, Duke University School of Law and Columbia University - Law School
7 86 Coverage Information in Insurance Law
Daniel Schwarcz
University of Minnesota Law School
8 85 The Expanding Circle of Contract Law
Jan M. Smits
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI)
9 71 Ordinary Contract Principles
Robert A. Hillman
Cornell Law School
10 56 Promissory Estoppel and the Origins of Contract Law
Eric Alden
Northern Kentucky University, Chase College of Law

September 29, 2016 in Recent Scholarship | Permalink | Comments (0)

Anti-SLAPP Motion Granted when Filing Suit in Spite of Contractual Promise Not to Do So

In 2012, Mr. Flores decided to go skydiving in California. He contracted with Skydive Monterey Bay Inc. (“Skydive”) to do so. Unfortunately, his parachute deployed prematurely, rendering him unconscious during the jump that in turn resulted in severe injuries upon landing. Flores of course sues Skydive for various torts. Skydive cross-complains alleging breach of contract based on the release that Flores had signed before the accident. This read that Flores would not “sue or make any claim of any nature whatsoever against Skydive … for personal injuries or other damages or losses sustained … as a result of my ‘parachuting activities’ even if such injures or other damages or losses sustained by me as a result of my ‘parachuting activities’ are caused by the negligence, in any degree, or other fault of Skydive….” Unknown

Flores filed a motion to strike Skydive’s cross-complaint under the California anti-SLAPP statute. This is a two-prong test that at bottom required Flores to prove that his lawsuit arose from protected activity and Skydive to prove that it had a probability of prevailing on the claim, in this case the breach of contract.

The court found that despite the contractual clause, Flores had not “waived” his right to the protections of the anti-SLAPP provisions as Skydive argued. The court found that the “filing of a complaint is an act undertaken in furtherance of the constitutional right to petition.” The burden then shifted to Skydive to demonstrate that its breach of contract claim had “minimal merit.” Skydive did not meet that low burden because it failed to provide evidence of damages resulting from the breach (the court relied on the four familiar elements of a contract: existence, performance or excuse by plaintiff, defendant’s breach, and damages). Skydive had simply called Flores’ breach of contract “incredulous,” but did not submit “any affidavits or declarations to support the allegations of damages” such as the costs of defending against the lawsuit and the potential damages on the merits of the claim. Images

Flores can now continue his lawsuit. The case shows the high importance of not relying on self-serving statements, accusations and bare allegations in legal proceedings. This is another aspect of the law that should be obvious, but apparently is not.

The case is Gerardo Flores v. Skydive Monterey Bay, Inc., 2016 WL 4938863 (not officially published), Monterey County Super. Ct. No. M126778.

September 29, 2016 in Recent Cases, True Contracts | Permalink | Comments (0)