ContractsProf Blog

Editor: D. A. Jeremy Telman
Valparaiso Univ. Law School

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Tuesday, November 11, 2014

Weekly Top Tens from the Social Science Research Network

SSRN Top Downloads For Contracts & Commercial Law eJournal
RECENT TOP PAPERS 

RankDownloadsPaper Title
1 114 Say the Magic Word: A Rhetorical Analysis of Contract Drafting Choices 
Lori D. Johnson 
University of Nevada, Las Vegas, William S. Boyd School of Law 
2 113 'Whimsy Little Contracts' with Unexpected Consequences: An Empirical Analysis of Consumer Understanding of Arbitration Agreements 
Jeff SovernElayne E. GreenbergPaul F. Kirgis and Yuxiang Liu 
St. John's University - School of Law, St. John's University School of Law, St. John's University School of Law and St. John's University - School of Law 
3 100 Valuable Lies 
Ariel Porat and Omri Yadlin 
Tel Aviv University and Tel Aviv University - Buchmann Faculty of Law 
4 92 Good Faith: A Puzzle for the Commercial Lawyer 
Noel McGrath 
UCD 
5 84 BitProperty 
Joshua Fairfield 
Washington and Lee University - School of Law 
6 76 Price Squeezes with Positive Margins in EU Competition Law: Economic and Legal Anatomy of a Zombie 
Nicolas Petit 
University of Liege - School of Law 
7 70 Does a Promise Transfer a Right? 
David Owens 
University of Reading 
8 69 Post-Private Law? 
Martijn W. Hesselink 
University of Amsterdam - Centre for the Study of European Contract Law (CSECL) 
9 65 Insurance Agents in the 21st Century: The Problem of Biased Advice 
Daniel Schwarcz and Peter Siegelman 
University of Minnesota Law School and University of Connecticut - School of Law 
10 64 Precedent in Contract Cases and the Importance(?) of the Whole Story 
Robert A. Hillman 
Cornell Law School 

SSRN Top Downloads For LSN: Contracts (Topic)
RECENT TOP PAPERS 

RankDownloadsPaper Title
1 114 Say the Magic Word: A Rhetorical Analysis of Contract Drafting Choices 
Lori D. Johnson 
University of Nevada, Las Vegas, William S. Boyd School of Law 
2 68 Post-Private Law? 
Martijn W. Hesselink 
University of Amsterdam - Centre for the Study of European Contract Law (CSECL) 
3 63 Precedent in Contract Cases and the Importance(?) of the Whole Story 
Robert A. Hillman 
Cornell Law School
4 59 Binding Future Selves 
Kaiponanea T. Matsumura 
Arizona State University (ASU) - Sandra Day O'Connor College of Law 
5 50 Some Features of Promises and Their Obligations 
Michael G. Pratt 
Queen's University (Canada) - Faculty of Law 
6 50 Crossing the Threshold: Arbitral Jurisdiction after BG Group 
Alan Scott Rau 
University of Texas at Austin School of Law 
7 49 The Grand Unified Theory — Methods of Contract Interpretation and Result Oriented Surplus Maximization 
Kyle Chen 
Notre Dame Law School 
8 49 'Please Note: You Have Waived Everything': Can Notice Redeem Online Contracts? 
Cheryl B. Preston 
Brigham Young University - J. Reuben Clark Law School 
9 45 The End of Doctrine: Private Arbitration, Public Law and the Anti-Lawsuit Movement 
Myriam E. Gilles 
Benjamin N. Cardozo School of Law
10 37 Market Regulation of Contractual Terms: A Skeptical View 
Guy A. Rub 
Ohio State University (OSU) - Michael E. Moritz College of Law 

 

November 11, 2014 in Recent Scholarship | Permalink | TrackBack (0)

Monday, November 10, 2014

Weekly News Roundup

According to this report on the International Business Times website, two children, through their mother, are suing Malaysia Airlines for breach of contract and negligence in connection with their father's death on Flight MH370.  Plaintiffs allege that the airline breached a safety agreement that it entered into with their father and the other passengers on the flight.  

Epstein-wendy-tAs reported here in the Bellingham Herald, the Indiana Supreme Court heard arguments on October 30th about the state's contract with IBM to privatize its welfare services.  The state was so disappointed with IBM's performance that it cancelled the contract three years into a $1.3 billion, ten-year deal.  Friend of the blog, Wendy Netter Epstein (pictured), has written about this case in the Cardozo Law Review.

Sunday's New York Times Magazine has a cover story pondering whether lawyers are going to do to football what they did to tobacco.  As an example of what this might look like we have this case filed on October 27, 2014 on behalf of Julius Whittier and a class of plaintiffs who played NCAA football from 1960-2014,  never played in the NFL, and have been diagnosed with latent brain injury or disease.  Mr. Whittier suffers from early-onset Alzheimer's.  The complaint alleges, among other things, breach of contract, based on NCAA documents requiring each member instittuion to look after the physical well-being of student athletes.  

November 10, 2014 in Government Contracting, In the News, Recent Cases, Sports, Travel | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 5, 2014

Expensive Wine

Duff's Private ReserveAccording to this story from NJ.com, a customer in an Atlantic City restaurant bought a bottle of wine with dinner.  The server showed him a wine list and suggested a wine.  When he asked how much the wine cost, she said, "Thirty-Seven Fifty," which he understood to mean $37.50.  She meant $3,750, and the wine list so indicated, but the customer did not have his reading glasses with him.  It's an interesting fact pattern.

Fortunately, an episode of The Simpsons provides best practices in this area, as animated television sit-coms do in most areas.  In episode 8F09, Burns Verkaufen der Kraftwerk, Homer's stock in the Springfield nuclear plant went up for the first time in ten years.  He sells and makes a cool $25.  Soon thereafter, the value of Homer's stock rises to $5200, but that's another matter.

Homer conte1mplates his options and decides to buy beer.  The following conversation with Moe (of Moe's Tavern) ensues:

Moe: Want a Duff?

Homer (haughtily): No, I'd like a bottle of Henry K. Duff's Private Reserve.

Moe  (Gasping): Are you sure? 'Cause once I open the bottle, there's no refund.

See?  That's how it's done!

November 5, 2014 in Commentary, Food and Drink, In the News | Permalink | TrackBack (0)

New in Print

Pile of BooksLynn Foster,. The Hands of the State: The Railure to Vacate Statute and Residential Renants' Rights in Arkansas. 36 U. Ark. Little Rock L. Rev. 1 (2013)

Damien Geradin, The Meaning of "Fair and Reasonable" in the Context of Third-Party Determination of FRAND Terms, 21 Geo. Mason L. Rev. 919 (2014) 

Joshua D. Wright,  SSOs, FRAND, and Antitrust: Lessons from the Economics of Incomplete Contracts, 21 Geo. Mason L. Rev. 791 (2014) 

Duquesne

Duquesne Law Review Drafting Our Future: Contract Law In 2025, 

52 Duq. L. Rev. 263-413 (2014)

SYMPOSIUM ARTICLES

The Judicial Vision of Contract: The Constructed Circle of Assent and Unconscionability
John E. Murray, Jr. 

The Future of Fault in Contract Law
Robert A. Hillman 

Two Alternate Visions of Contract Law in 2025
Nancy S. Kim

The Future of Many Contracts
Victor P. Goldberg 

A Eulogy for the EULA
Miriam A. Cherry 

The Death of Contracts
Franklin G. Snyder & Ann M. Mirabito

November 5, 2014 in Recent Scholarship | Permalink | TrackBack (0)

Tuesday, November 4, 2014

New Scholarship on Consumer Misconceptions Regarding Arbitration Clauses

SovernJeff Sovern  (pictured), with whom readers may be familiar from our recent virtual symposium, has a new paper on SSRN, co-authored with three of his St. John's colleagues, Elayne E. Greenberg, Paul F. Kirgis, and Yuxiang Liu.

The paper is titled "'Whimsy Little Contracts' with Unexpected Consequences: An Empirical Analysis of Consumer Understanding of Arbitration Agreements." Here’s the abstract, though there’s obviously a lot more in the paper itself:

 

Arbitration clauses have become ubiquitous in consumer contracts. These arbitration clauses require consumers to waive the constitutional right to a civil jury, access to court, and, increasingly, the procedural remedy of class representation. Because those rights cannot be divested without consent, the validity of arbitration agreements rests on the premise of consent. Consumers who do not want to arbitrate or waive their class rights can simply decline to purchase the products or services covered by an arbitration agreement. But the premise of consent is undermined if consumers do not understand the effect on their procedural rights of clicking a box or accepting a product. 

This article reports on an empirical study exploring the extent to which consumers are aware of and understand the effect of arbitration clauses in consumer contracts. We conducted an online survey of 668 consumers, approximately reflecting the population of adult Americans with respect to race/ethnicity, level of education, amount of family income, and age. Respondents were shown a typical credit card contract with an arbitration clause containing a class action waiver and printed in bold and with portions in italics and ALLCAPS. Respondents were then asked questions about the sample contract as well as about a hypothetical contract containing what was described as a “properly-worded” arbitration clause. Finally, respondents were asked about their own experiences with actual consumer contracts. 

The survey results suggest a profound lack of understanding about the existence and effect of arbitration agreements among consumers. While 43% of the respondents recognized that the sample contract included an arbitration clause, 61% of those believed that consumers would, nevertheless, have a right to have a court decide a dispute too large for a small claims court. Less than 9% realized both that the contract had an arbitration clause and that it would prevent consumers from proceeding in court. With respect to the class waiver, four times as many respondents thought the contract did not block them from participating in a class action as realized that it did, even though the class action waiver was printed twice in bold in the sample contract, including one time in italics and ALLCAPS. Overall, of the more than 5,000 answers we recorded to questions offering right and wrong answers, only a quarter were correct. 

Turning to respondents’ own lives, the survey asked if they had ever entered into contracts with arbitration clauses. Of the 303 respondents who claimed never to have done so and who also answered a question asking whether they had accounts with certain companies that include arbitration clauses in their contracts, 264, or 87%, did indeed have at least one account subject to an arbitration clause. 

These and other findings reported in this Article should cause concern among judges and policy-makers considering mandatory pre-dispute consumer arbitration agreements. Our results suggest that many citizens assume that they have a right to judicial process that they cannot lose as a result of their acquiescence in a form consumer contract. They believe that this right to judicial process will outweigh what one respondent referred to as a “whimsy little contract.” Our results suggest further that citizens are giving up these rights unknowingly, either because they do not realize they have entered into an arbitration agreement or because they do not understand the legal consequences of doing so. Given the degree of misunderstanding the results demonstrate, we question whether meaningful consent is possible in the consumer arbitration context.

November 4, 2014 in Contract Profs, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Weekly Top Tens from the Social Science Research Network

SSRNSSRN Top Downloads For Contracts & Commercial Law eJournal
RECENT TOP PAPERS 

RankDownloadsPaper Title
1 107 Say the Magic Word: A Rhetorical Analysis of Contract Drafting Choices 
Lori D. Johnson 
University of Nevada, Las Vegas, William S. Boyd School of Law 
2 94 Valuable Lies 
Ariel Porat and Omri Yadlin 
Tel Aviv University and Tel Aviv University - Buchmann Faculty of Law 
3 87 Good Faith: A Puzzle for the Commercial Lawyer 
Noel McGrath 
UCD 
4 73 BitProperty 
Joshua Fairfield 
Washington and Lee University - School of Law 
5 68 Does a Promise Transfer a Right? 
David Owens 
University of Reading 
6 63 Insurance Agents in the 21st Century: The Problem of Biased Advice 
Daniel Schwarcz and Peter Siegelman 
University of Minnesota Law School and University of Connecticut - School of Law 
7 61 The (Il)Legitimacy of Bankruptcies for the Benefit of Secured Creditors 
Charles W. Mooney 
University of Pennsylvania Law School 
8 61 Post-Private Law? 
Martijn W. Hesselink 
University of Amsterdam - Centre for the Study of European Contract Law (CSECL) 
9 58 Precedent in Contract Cases and the Importance(?) of the Whole Story 
Robert A. Hillman 
Cornell Law School 
10 51 Selling Stories or You Can't Own This: Cultural Property as a Form of Collateral in a Secured Transaction Under the Model Tribal Secured Transactions Act 
Grant Christensen 
Charlotte Law

SSRN Top Downloads For LSN: Contracts (Topic)
RECENT TOP PAPERS 

RankDownloadsPaper Title
1 107 Say the Magic Word: A Rhetorical Analysis of Contract Drafting Choices 
Lori D. Johnson 
University of Nevada, Las Vegas, William S. Boyd School of Law 
2 61 Post-Private Law? 
Martijn W. Hesselink 
University of Amsterdam - Centre for the Study of European Contract Law (CSECL) 
3 58 Precedent in Contract Cases and the Importance(?) of the Whole Story 
Robert A. Hillman 
Cornell Law School 
4 55 From Contract to Status: Collaboration and the Evolution of Novel Family Relationships 
Elizabeth S. Scott and Robert E. Scott 
Columbia University - Law School and Columbia University - Law School 
5 51 Binding Future Selves 
Kaiponanea T. Matsumura 
Arizona State University (ASU) - Sandra Day O'Connor College of Law 
6 49 Crossing the Threshold: Arbitral Jurisdiction after BG Group 
Alan Scott Rau 
University of Texas at Austin School of Law 
7 48 Some Features of Promises and Their Obligations 
Michael G. Pratt 
Queen's University (Canada) - Faculty of Law 
8 46 The Grand Unified Theory — Methods of Contract Interpretation and Result Oriented Surplus Maximization 
Kyle Chen 
Notre Dame Law School 
9 43 The End of Doctrine: Private Arbitration, Public Law and the Anti-Lawsuit Movement 
Myriam E. Gilles 
Benjamin N. Cardozo School of Law 
10 32 Market Regulation of Contractual Terms: A Skeptical View 
Guy A. Rub 
Ohio State University (OSU) - Michael E. Moritz College of Law 

 

November 4, 2014 in Recent Scholarship | Permalink | TrackBack (0)

Monday, November 3, 2014

Recent Contracts News

As reported on JDSupra here, the Florida District Court of Appeal for the Fourth District, sitting en banc, held that while an insurer’s liability for coverage and the extent of damages must be determined before a bad faith claim becomes ripe, the insured need not also show that the insurer is liable for breach of contract before proceeding on the bad faith claim.

We have also learned from JD Supra of Piedmont Office Realty Trust v. XL Specialty Ins. Co., 2014 U.S. App. LEXIS 20141 (11th Cir. Oct. 21, 2014), in which the United States Court of Appeals for the Eleventh Circuit, elected to certify to the Supreme Court of Georgia the question of whether an insured’s payment obligations under a judicially approved settlement agreement qualify as amounts that the insured is “legally obligated to pay,” and if so, whether the insured’s failure to have obtained the insurer’s consent to settle resulted in a forfeiture of coverage.

FootballAccording this this report on Yahoo! Sports, Oklahoma State is suing the former Offensive Coordinator of its football team, Joe Wickline (who now is a coach for the University of Texas), and Wickline has countersued.  According to the report, Wickline's contract with Oklahoma State require that he pay the balance of his contract ($593,478) if he left for another position and was not his new team's play-caller. Wickline claims that he is calling plays at Texas.  What a bizarre thing to put in a contract.  It's a reserve non-compete!  In effect, Oklahoma State is saying that it would pay Wickline to call plays for a rival.

According to this report from the Courthouse New Service,  Ted Marchibroda Jr., the son of NFL Football coach Ted Marchibroda, filed a $1 million malpractice lawsuit against Sullivan, Workman & Dee and trial lawyer Charles Cummings , alleging breach of contract, professional negligence and breach of fiduciary duty.  In a 2011 lawsuit, Marchibroda accused sports agent Marvin Demoff of breaching an agreement to share the proceeds of NFL contracts for linebacker Chad Greenway. He claims that he is also owed money for recruiting center Alex Mack. 

McIlroy
Uploaded by Mark Schierbecker 

And continuing our sports report, Golf.com notes that golfer Rory McIlroy is taking a break from the "sport" to pursue his legal claims against his former management company, Horizon Sports Management.  McIlroy claims that Horizon took advantage of his youth to extract an unconscionable 20% fee for McIlroy's off-the-course income.  Horizon is claiming $3 million in breach-of-contract damages.

In a simpler companion case to the Sharpe v. AmeriPlan Corp. case about which we blogged earlier today, the Eighth Circuit affirmed the District Court's denial of a motion to compel arbitration in Quam Construction Co., Inc. v. City of Redfield.  As reported here on Law.com, the case was relatively easy, since the contract at issue contained permissive language: "the parties may submit the controversy or claim to arbtiration."  Given such language, the Eighth Circuit agreed with the Distrcit Court that arbitration could not be compelled.

November 3, 2014 in In the News, Recent Cases, Sports | Permalink | TrackBack (0)

Fifth Circuit Finds Arbitration Clause Trumped By Dispute Resolution Mechanisms in Parties' Prior Agreements

PyramidThe Fifth Circuit's opinion in Sharpe v. AmeriPlan Corp. begins with a wise observation on the state of the law of arbitration.  "As the use of arbitration clauses grows, so too do the legal arguments surrounding their validity and enforceability."  The plaintiffs in the case raised all of the traditional objections to arbitration clause, labeling it: not  supported by consideration, illusory, unconscionable, not broad enough to cover the dispute in the case, and waived.  The Fifth Circuit rejected all of these arguments and nonetheless found for plaintiffs on the ground that the arbitration agreement could not be harmonized with dispute resolutions found in earlier agreements among the parties still in effect.

The plaintiffs were "independent business owners" (IBOs) who earned their income from AmeriPlan by selling health plans and recruiting additional IBOs.  Upon recruiting the requisite number of IBOs, they earned the statue of Sales Directors, who can earn an income stream (down lines) from the commissions of the IBOs they had recruited.  All named plaintiffs were Sales Directors when AmeriPlan terminated them without cause in 2011.  In doing so, it also deprived plaintiffs of their down lines.  Plaintiffs sued, alleging that they had been promised lifetime vested residual income.

5th CircuitThe parties relationships were governed by three agreements.  Three of the four named plaintiffs entered into Sales Director agreements with AmeriPlan that provided for mediation followed by litigation in the case of a dispute.  After a jury returned a $5.5 million verdict against AmeriPlan in favor of a Sales Director, AmeriPlan added an arbitration clause to its Policy Manual.  Plainitffs accepted this revision either by clicking an "I agree" icon on AmeriPlan's website or because AmeriPlan sent them notice of the change in the form of a revised Policy Manual that contained the new arbitration clause on page 22.

Plaintiffs sued in California.  AmeriPlan had the case tranferred to federal court and then changed the venue to Texas.  It then moved to compel arbitration.  The District Court granted the motion while deleting two provisions that it found unconscionable.  Plaintiffs appealed to the Fifth Circuit.  The Fifth Circuit reversed as to three of the four plaintiffs.

The Court noted that an amendment to an agreement would ordinarily effectively supersede a prior, related agreement.  Here, however, the Plaintiffs' Sales Director agreements provided they could only be amended through a written agreement executed by all parties.  As that did not occur, here, the three plaintiffs whose agreements reserved a right to litigation retained that right.  The survival of the original agreements was especially clear in that AmeriPlan had relied on language in those agreements in order to transfer the case from California to Texas.  AmeriPlan conceded as much but claimed that the agreements could be harmonized.  But the Fifth Circuit found that the detailed two-tiered plan in three of the plaintiffs' Sales Director agreements clearly required mediation followed by litigation in Texas.  That structure could not be reconciled with the revised Policy Manual's arbitration clause.  The Court was especially secure in its reading of three of the plaintiffs' Sales Director agreements because the fourth plaintiff had entered into an earlier version fo the agreement which lacked such details.  The Court held that the addition of the detailed language manifested AmeriPlan's clear commitment to its two-tiered approach of mediation followed by litigation of disputes governed by the Sales Director agreements.

The Fifth Circuit reversed and remanded with respect to three of the plaintiffs.  The fourth will have to arbitrate her claims.  The Court acknoweldged that the result might seem arbitrary, but it was in fact simply a product of the Court's effort to give effect to the differing terms of the parties' agreements. 

 

November 3, 2014 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Friday, October 31, 2014

More on the Puzzling ICAM Problem

 

Crossword_puzzle_with_lady_in_black_coat

As I noted about a month ago the problem for the 2015 International Commercial Artbitration Moot is wonderful for those who like crossword puzzles, solving problems, reading mysteries, or doing detective work. There are facts, deadends, and read herrings galore. No one goes for a big sleep as far as I can tell but there is the dreaded issue of "fundamental breach." In fact, that appears to be the centerpiece of the problem. Just to make it a little twisty, the fundamental breach is by the buyer whose letter of credit may not conform to the contract. Since even that would be too simple, there is a second letter of credit that may or may not conform but which came after the first arguably non comforming one. There are phone calls, emails, letters, accusations, and even an emergency arbitration that, maybe, should not have occurred at all.

At my school 32 students are now writing briefs for the claimants side of the case and preparing for their oral arguments next week. There is something here even for profs not involved in the Moot. Just reading the problem will spark all kinds of ideas for exam questions suitable for  the basic contracts course.

 

October 31, 2014 in Conferences, Contract Profs, Games, Law Schools, Meetings, Teaching | Permalink | Comments (0) | TrackBack (0)

Posting a Positive Review on Yelp? Not Unless You Haven’t Posted Numerous Other Times Before

A few weeks ago, we blogged here about how some businesses may pay customers to remove negative reviews from sites such as TripAdvisor.

The blog raised the question of just how reliable online reviews are given this practice and, potentially, the business itself (or friends/family) posting numerous positive reviews, thus making for an entirely fake overall review.

Here’s a twist on that: Yelp will actually remove posts without notifying either the reviewed business or the review poster if the latter has not posted enough other reviews on Yelp.  Of course, Yelp decides just how many other reviews are “enough.”

This happened recently to my husband, who is an extremely busy IT professional, but who nevertheless got such a good experience from a small local business that he took the time to post a for him rare review of the business with pictures of the product we had bought.  A few days later, the business owner contacted him to ask why he had taken the review down again.  He had not, but Yelp had for the above reason.

Of course, Yelp probably wants to avoid the occasional rage posting or an overly rosy review.  However, the above practice seems unethical and unreasonable.  Review sites will by nature have both good and bad reviews.  Yelp has chosen to believe that if a person only posts one thing, it must by definition by unreliable as being too far on either end of the spectrum.  However, the truth of the matter is that a lot of busy professionals do not have the time for or interest in posting a large amount of reviews.  That, of course, does not make an occasional review unreliable, perhaps quite the opposite: if you don’t post a lot of views, the ones you do must reflect truly good or bad experiences. 

Not only does Yelp waste reviewer’s time like this, but it does not even explain this policy on its guidelines section of its website.

A healthy dose of skepticism towards review websites seems warranted, which probably does not surprise too many of us.

October 31, 2014 in Contract Profs, Current Affairs, E-commerce, Web/Tech | Permalink | TrackBack (0)

Wednesday, October 29, 2014

New in Print

Pile of BooksKenneth A. Adams, Beyond Words, Solicitors Journal, Sept. 30, 2014

Andrea J. Boyack, Common Interest Community Covenants and the Freedom of Contract Myth. 22 J.L. & Pol'y 767 (2014)

Jan De Bruyne, Liability of Classification Societies: Cases, Challenges and Future Perspectives, 45 J. Mar. L. & Com. 181 (2014)

Nancy S. Kim, Boilerplate and Consent, 17 Green Bag 293 (2014)

Jocelyn E. H. Limmer, China's New "Common Law": Using China's Guiding Cases to Understand How to Do Business in the People's Republic of China, 21 Willamette J. Int'l L. & Disp. Resol. 96 (2013) 

Mark R. Matthews, A Doomed Proposal for Uniform Commercial Code Section 2-207: That Official Comment Would Have Led to Confusion, Not Clarity, 44 Cumb. L. Rev. 223 (2013-2014) 

Erin O'Hara O'Connor & Christopher R. Drahozal, The Essential Role of Courts for Supporting Innovation, 92 Tex. L. Rev. 2177 (2014)

Peter B. Rutledge & Christopher R. Drahozal, "Sticky" Arbitration Clauses? The Use of Arbitration Clauses after Concepcion and Amex, 67 Vand. L. Rev. 955 (2014)

October 29, 2014 in Recent Scholarship | Permalink | TrackBack (0)

Tuesday, October 28, 2014

Weekly Top Tens from the Social Science Research Network

SSRNSSRN Top Downloads For Contracts & Commercial Law eJournal
RECENT TOP PAPERS 

RankDownloadsPaper Title
1 211 Rolling Back the Repo Safe Harbors 
Edward R. MorrisonMark J. Roe and Christopher S. Sontchi 
Columbia Law School, Harvard Law School and United States Bankruptcy Courts, District of Delaware 
2 96 Say the Magic Word: A Rhetorical Analysis of Contract Drafting Choices 
Lori D. Johnson 
University of Nevada, Las Vegas, William S. Boyd School of Law
3 87 Valuable Lies 
Ariel Porat and Omri Yadlin 
Tel Aviv University and Tel Aviv University - Buchmann Faculty of Law 
4 84 Contract Law and Regulation 
Giuseppe Bellantuono 
University of Trento - Faculty of Law 
5 82 Good Faith: A Puzzle for the Commercial Lawyer 
Noel McGrath 
UCD 
6 76 Performance-Based Consumer Law 
Lauren E. Willis 
Loyola Law School Los Angeles 
7 66 Does a Promise Transfer a Right? 
David Owens 
University of Reading 
8 66 BitProperty 
Joshua Fairfield 
Washington and Lee University - School of Law 
9 62 Insurance Agents in the 21st Century: The Problem of Biased Advice 
Daniel Schwarcz and Peter Siegelman 
University of Minnesota Law School and University of Connecticut - School of Law 
10 62 Price Squeezes with Positive Margins in EU Competition Law: Economic and Legal Anatomy of a Zombie 
Nicolas Petit 
University of Liege - School of Law 

SSRN Top Downloads For LSN: Contracts (Topic)
RECENT TOP PAPERS

RankDownloadsPaper Title
1 96 Say the Magic Word: A Rhetorical Analysis of Contract Drafting Choices 
Lori D. Johnson 
University of Nevada, Las Vegas, William S. Boyd School of Law 
2 60 Post-Private Law? 
Martijn W. Hesselink 
University of Amsterdam - Centre for the Study of European Contract Law (CSECL) 
3 52 From Contract to Status: Collaboration and the Evolution of Novel Family Relationships 
Elizabeth S. Scott and Robert E. Scott 
Columbia University - Law School and Columbia University - Law School
4 45 Some Features of Promises and Their Obligations 
Michael G. Pratt 
Queen's University (Canada) - Faculty of Law 
5 45 The Grand Unified Theory — Methods of Contract Interpretation and Result Oriented Surplus Maximization 
Kyle Chen 
Notre Dame Law School 
6 45 Crossing the Threshold: Arbitral Jurisdiction after BG Group 
Alan Scott Rau 
University of Texas at Austin School of Law 
7 43 Precedent in Contract Cases and the Importance(?) of the Whole Story 
Robert A. Hillman 
Cornell Law School 
8 41 Binding Future Selves 
Kaiponanea T. Matsumura 
Arizona State University (ASU) - Sandra Day O'Connor College of Law
9 40 The End of Doctrine: Private Arbitration, Public Law and the Anti-Lawsuit Movement 
Myriam E. Gilles 
Benjamin N. Cardozo School of Law 
10 29 The Network Contract in Italy: A Third Route between 'Contract' and 'Organisation'? 
Maurizio Sciuto 
Università degli Studi di Macerata

 

October 28, 2014 in Recent Scholarship | Permalink | TrackBack (0)

Second Circuit Upholds District Court, Rejecting Indian Commerce Clause Claim

2d CircuitIn The Otoe-Missouria Tribe of Indians v. N.Y. State, Dep't of Financial Services, the Second Circuit upheld the District Court's denial for a preliminary injunction sought by two Native American tribes and related entities (collectively the Tribes) engaged in high-interest, short-term loans offered over the Internet.  The interest rates on the loans exceeded state caps, and so the Department of Financial Services (the Department) sought to bar them.  The Tribes sought a preliminary injunction, claiming that the bar violated the Indian Commerce Clause of the U.S. Constitution. 

The Tribes' claims turned on whether the loans took place on their sovereign territory or in New York State.  The Second Circuit observed that, although the loans were initiated on the Tribes' territories, they flowed across New York State.  When the Department shut down the Tribes' loan operations, it had devastating effects on the tribal economies, and so the Tribes sued to enjoin the bar on their loans.  

On review of the denial of the motion for preliminary injunction, the Second Circuit found no clear error.  It concluded that, while the Tribes may ultimately prevail, the record is at this point too murky, and thus the Tribes could not establish their likely success on the merits.

October 28, 2014 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Monday, October 27, 2014

11th Circuit Refuses to Compel Arbitration Where Forum Was Unavailable

11thCircuitSealAccording to his complaint, Abraham Inetianbor borrowed $2600 from Western Sky Financial, LLC in January 2011.  Over the next twelve months, he paid $3252 to the servicer of the loan, CashCall, Inc. (CashCall).  Believing that he had paid off the loan, Mr. Inetianbor then refused further payments. According to the complaint, CashCall responded by reporting a default to credit agencies, harming Mr. Inetianbor's credit rating.  He sued, alleging defamation and usury, as well as a violation of the federal Fair Credit Reporting Act.

 CashCall moved to compel arbitration pursuant to a clause in the loan agreement that called for "Arbitration, which shall be conducted by the Cheyenne River Sioux Tribal Nation by an authorized representative . . . .”  The District Court initially granted the motion, but it proved impossible for the parties to arbitrate since the Sioux Tribe "does not authorize arbitration."  Eventually, the District Court denied the motion to compel CashCall appealed.

Before the 11th Circuit, Inetianbor v. CashCall, Inc., CashCall argued that; 1) the failure of the arbitral forum should not void the arbitration agreement even if the forum selection is integral to the agreement; 2) even if that were the rule, it only applies when the forum clause is "integral" to the agreement, and this forum clause was not "integral"; and 3) the District Court erred in finding the aribral forum unavailable.  The Court rejected all three arguments.

First, under Circuit rules, the panel could not reverse a rule adopted by a previous panel.  Such a reversal could only occur by the entire Court sitting en banc.  Thus the panel was bound to hold to the Circuit's rule that arbitral agreements cannot be enforced where the forum fails and the forum clause is integral to the agreement.   Second, after a lengthy discussion, the Court concluded that the forum clause at issue in this case was integral.  Finally, the Court agreed with the District Court that the Tribe's involvement was essential and that arbitration involving the Tribe was unavailable.

Judge Restani, United States Court of International Trade Judge, sitting by designation, concurred.  She agreed with the majority's conclusion that the arbitration agreement was unenforceable, but she  would have struck it as unconscionable.

 

October 27, 2014 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Friday, October 24, 2014

A Great Day For Contracts Law

Today, October 24, 2014, is a banner day for contracts law because today is the date for two major conferences honoring two giants in the field.

First UC Hastings is hosting a Symposium to Honor Professor Chuck Knapp's 50th Year of Law Teaching.  Here is the schedule for that.

Knapp8:15 - 8:45  Registration and Breakfast

8:45 – 9:00 Introduction & Welcome

9:00-10:30   Panel I -- The State of Contract Law

Professor Jay Feinman, Rutgers University - Camden

Professor William Woodward, Santa Clara University

Professor Danielle Kie Hart, Southwestern Law School

Moderator – Professor Harry G. Prince, UC Hastings College of Law

10:30-10:45  Break

10:45-12:15  Panel II -- The Role of Casebooks in the Future of Contract Law

Professor Deborah Post, Touro Law Center

Professor Carol Chomsky, University of Minnesota

Professor Thomas Joo, UC Davis

Moderator – Professor Nathan M. Crystal, University of South Carolina

12:15-1:15  Lunch:  Marvin Anderson Lecture – Professor Keith Rowley, UNLV 

1:15-1:30  Break

1:30-3:00 Panel III -- The Politics of Contract Law

Professor Peter Linzer, University of Houston

Professor Judith Maute, University of Oklahoma

Professor Emily M. S. Houh, University of Cincinnati

Moderator – Professor Jeffrey Lefstin, UC Hastings College of Law

3: 15-4:45 Panel IV -- The Future of Unconscionability as a Limit on Contract Enforcement

Professor David Horton, UC Davis

Professor Hazel Glenn Beh, University of Hawaii

Moderator – Professor William S. Dodge, UC Hastings College of Law

4:45-5:00  Concluding Remarks

In addition, the Temple Law Review is hosting a symposium in honor of Bill Whitford:

Whitfordsymposiumlogo (1)

 

And here is the schedule for that:

9:00 - 9:30 Introductory Remarks9:30 - 10:45The Bankruptcy Research Database - Its Development and Impact

Moderator:
Professor Tom C.W. Lin
Speakers:
  • Douglas Baird: The Transformation of Large Corporate Reorganizations 1979-2014 Seen Through the Lens of the BRD
  • Bob Lawless: What Legal Empiricists Do Best
  • Lynn LoPucki: Measuring Bankruptcy Success
  • David Skeel: Rediscovering Corporate Governance in Bankruptcy: The LoPucki and Whitford Studies

11:00 - 12:15 The Lifecycle of Consumer Transactions: Consumer Contracting, Protection, and Bankruptcy

Moderator:
Professor Hosea H. Harvey
Speakers:
  • Melissa Jacoby: Superdelegation
  • Ethan Leib: Contra Proferentem and the Role of the Jury in Contract Interpretation
  • Angela Littwin: Why Process Consumer Complaints? Then and Now
  • Katherine Porter: The Ideal of Rough Justice: Consumer Protection as Business, and Business in Consumer Protection

12:30 - 1:45Lunch Break

  • Brief video-presentation from a special guest
  • Talk: Bob Hillman: Precedent in Contract Cases and The Importance(?) of the Whole Story; Response by Bill Whitford

2:00 - 3:15 Mixed Methods: Comparative Law, Comparative Methods

Moderator:
Professor Salil K. Mehra
Speakers:
  • Stewart Macaulay: Bill Whitford: A New Legal Realist Seeking to Understand Law Outside the Law School's Doors
  • Iain Ramsay: US Exceptionalism and the Comparative Study of Consumer Bankruptcy
  • Jay Westbrook: The Application of the Model Law on Cross-Border Insolvency in the United States, Canada, and the United Kingdom
  • Jean Braucher: Examination as a Method of Consumer Protection

3:30 - 4:00 Free for All: What Don't You Know That You Should Know? 

October 24, 2014 in Conferences, Contract Profs | Permalink | Comments (0) | TrackBack (0)

The New York Times's "The Upshot" Column on Wrap Contracts

Yesterday's New York Times included a "The Upshot" column by Jeremy B. Merrill.  The print version was entitled Online, It's Easy To Lose Your Right to Sue [by the way, why can't the Times be consistent in its capitaliziation of "to"?], but the online version's title tells us how easy, One-Third of Top Websites Restrict Customers' Right to Sue.   The usual way they restrict the right is through arbitration provisions and class-action waivers.  They do so through various wrap mechanisms so that consumers are bound when they click "I agree" to terms they likely have not read and perhaps have not even glanced at.  

Some websites attempt to bind consumers by stating somewhere on their websites that consumers are bound to the website's and the company's terms simply by using the company's website or its products (I'm looking at you, General Mills).  The only thing surprising about this, given the Supreme Court's warm embrace of binding arbitration and class action waivers, is that two-thirds of websites still do not avail themselves of this mechanism for avoiding adverse publicity and legal accountability.

As I was reading this article, it started to sound very familiar -- a lot like reading this blog.  And just as I was beginning to wonder why the Times was not ' quoting our own Nancy Kim, the article did just that:

Wrap Contracts“Courts have been very reluctant to say that browsewrap is not enforceable,” said Nancy S. Kim, a professor at the California Western School of Law and the author of a book about online contracts.

When courts decide whether a website’s terms can be enforced, they look for two things, Ms. Kim said: First, whether the user had notice of the site’s rules; and second, whether the user signaled his or her agreement to those rules. Courts have ruled that simply continuing to use the site signals agreement. When browsewrap agreements have been thrown out, as in the Zappos case, courts have said that the site’s link to the terms wasn’t displayed prominently enough to assume visitors had noticed it.

Congratulations to Nancy on such prominent notice of her scholarship!

And congratulations to the Times for paying attention!

 

October 24, 2014 in About this Blog, Contract Profs, In the News | Permalink | Comments (1) | TrackBack (0)

Tuesday, October 21, 2014

Weekly Top Tens from the Social Science Research Network

SSRNSSRN Top Downloads For Contracts & Commercial Law eJournal
RECENT TOP PAPERS 

RankDownloadsPaper Title
1 202 Rolling Back the Repo Safe Harbors 
Edward R. MorrisonMark J. Roe and Christopher S. Sontchi 
Columbia Law School, Harvard Law School and United States Bankruptcy Courts, District of Delaware 
2 168 Featuring People in Ads (2014 Edition) 
Eric Goldman and Rebecca Tushnet 
Santa Clara University - School of Law and Georgetown University Law Center 
3 131 Contract as Empowerment Part II: Harmonizing the Case Law 
Robin Bradley Kar 
University of Illinois College of Law 
4 94 Say the Magic Word: A Rhetorical Analysis of Contract Drafting Choices 
Lori D. Johnson 
University of Nevada, Las Vegas, William S. Boyd School of Law 
5 86 Three Models of Promissory Estoppel 
Andrew Robertson 
Melbourne Law School 
6 82 Contract Law and Regulation 
Giuseppe Bellantuono 
University of Trento - Faculty of Law
7 73 Good Faith: A Puzzle for the Commercial Lawyer 
Noel McGrath 
UCD 
8 71 Performance-Based Consumer Law 
Lauren E. Willis 
Loyola Law School Los Angeles 
9 66 Does a Promise Transfer a Right? 
David Owens 
University of Reading 
10 60 Insurance Agents in the 21st Century: The Problem of Biased Advice 
Daniel Schwarcz and Peter Siegelman 
University of Minnesota Law School and University of Connecticut - School of Law 

SSRN Top Downloads For  LSN: Contracts (Topic)
RECENT TOP PAPERS 

RankDownloadsPaper Title
1 168 Featuring People in Ads (2014 Edition) 
Eric Goldman and Rebecca Tushnet 
Santa Clara University - School of Law and Georgetown University Law Center 
2 131 Contract as Empowerment Part II: Harmonizing the Case Law 
Robin Bradley Kar 
University of Illinois College of Law 
3 94 Say the Magic Word: A Rhetorical Analysis of Contract Drafting Choices 
Lori D. Johnson 
University of Nevada, Las Vegas, William S. Boyd School of Law 
4 59 Post-Private Law? 
Martijn W. Hesselink 
University of Amsterdam - Centre for the Study of European Contract Law (CSECL) 
5 55 Disclaimers of Contractual Liability and Voluntary Obligations 
Michael G. Pratt 
Queen's University (Canada) - Faculty of Law 
6 48 Wolves of the World Wide Web: Reforming Social Networks’ Contracting Practices 
Michael L. Rustad and Thomas H. Koenig 
Suffolk University Law School and Northeastern University 
7 48 From Contract to Status: Collaboration and the Evolution of Novel Family Relationships 
Elizabeth S. Scott and Robert E. Scott 
Columbia University - Law School and Columbia University - Law School 
8 45 Some Features of Promises and Their Obligations 
Michael G. Pratt 
Queen's University (Canada) - Faculty of Law 
9 42 The Grand Unified Theory — Methods of Contract Interpretation and Result Oriented Surplus Maximization 
Kyle Chen 
Notre Dame Law School 
10 38 The End of Doctrine: Private Arbitration, Public Law and the Anti-Lawsuit Movement 
Myriam E. Gilles 
Benjamin N. Cardozo School of Law

 

October 21, 2014 in Recent Scholarship | Permalink | TrackBack (0)

Monday, October 20, 2014

After Twelve Years of Trying: No Enhanced Performance from Drinking Red Bull

Class action lawsuits can be a great way for consumers to obtain much necessary leverage against potentially overreaching corporations in ways that would have been impossible without this legal vehicle.  But they can also resemble mere litigiousness based on claims that, to laypeople at least, might simply seem silly.  Decide for yourself where on this spectrum the recent settlement between Red Bull and a class of consumers falls.  The background is as follows:

The energy drink Red Bull contains so much sugar and caffeine that it can probably help keep many a sleepy law professor and law student alert enough to get an immediate and urgent job done.  I admit that I have personally enjoyed the drink a few times in the past, but cannot even drink an entire can without my heart simply beating too fast (so I don’t). 

Red Bull’s marketing efforts promised consumers a “boost, “wings,” and “improved concentration and reaction speeds.”  One consumer alleges in the class action suit that he “had been drinking the product since 2002, but had seen no improvement in his athletic performance.” 

It strikes me as being a bad idea to pin one’s hopes on a mere energy drink to improve one’s athletic performance.  These types of energy drinks seem to be geared much more towards a temporary sugar high than anything else.  At any rate, if the drink doesn’t help, why continue drinking it for another 12 years? 

Nonetheless, a group of plaintiffs filed claim asserting breach of express warranty, unjust enrichment, and violations of various states’ consumer protection statutes.  The consumers claim that Red Bull’s deceptive conduct and practices mean makes the company’s advertising and marketing more than just “puffery,” but instead deceptive and fraudulent and thus actionable.  The company of course denies this, but has chosen to settle the lawsuit “to avoid the cost and distraction of litigation.” 

To me, this case seems to be more along the lines of Leonard v. Pepsico than a more viable claim.  Having said that, I am of course not in favor of any type of false and misleading corporate claims for mere profit reasons, but a healthy dose of skepticism by consumers is also warranted.

October 20, 2014 in Current Affairs, Famous Cases, Food and Drink, In the News | Permalink | Comments (0) | TrackBack (0)

Friday, October 17, 2014

Documentary on Forced Arbitration

The Alliance for Justice has released a documentary on forced arbitration called Lost in the Fine Print.  It's very well-done, highly watchable (meaning your students will stay awake and off Facebook during a viewing), and educational.  I recently screened the film during a special session for my Contracts and Advanced Contracts students.  It's only about 20 or so minutes and afterward, we had a lively discussion about the pros and cons of arbitration.  We discussed the different purposes of arbitration and the pros and cons of arbitration where the parties are both businesses and where one party is a business and the other a consumer.  Many of the students had not heard about arbitration and didn't know what it was.  Many of those who did know about arbitration didn't know about mandatory arbitration or how the process worked.  Several were concerned about the due process aspects.  They understood the benefits of arbitration for businesses, but also the problems created by lack of transparency in the process.  I thought it was a very nice way to kick start a lively discussion about unconscionability, public policy concerns, economics and the effect of legislation on contract law/case law.  

I think it's important for law students to know what arbitration is and it doesn't fit in easily into a typical contracts or civil procedure class so I'm afraid it often goes untaught.  The website also has pointers and ideas on how to organize a screening and discussion questions.

October 17, 2014 in Commentary, Current Affairs, Film, Legislation, Miscellaneous | Permalink | Comments (0) | TrackBack (0)

Tuesday, October 14, 2014

Want to make sandwiches? First, sign this non-compete...

Jimmy John's, a sandwich chain that frankly I had never heard of but which has over 2,000 franchise locations, apparently makes its employees sign pretty extensive confidentiality and non-compete agreements , as reported by Bob Sullivan and this Huffington Post article.  It's not clear to me what trade secrets are involved in making sandwiches, although I am a big fan of more transparency when it comes to what goes in my food and how it's made. As Bob Sullivan points out, in this economy, employment-related agreements for most employees are typically adhesion contracts. Making workers sign non-competes to get a job makes it much harder for them to get their next job.  In this case, the employee is prohibited from working for two years at any place that makes 10% of its revenue from any sandwich-type product (broadly defined to include wraps and pitas) that is within 3 miles of any Jimmy Johns location.  Given that there are 2,000 such locations, it could make it difficult for some food industry workers to find other jobs.

October 14, 2014 in Current Affairs, Food and Drink, Labor Contracts, Miscellaneous | Permalink | Comments (3) | TrackBack (0)