Thursday, February 12, 2015
This year, I am teaching a bar preparation course on contracts, which is being offered for the first time at my Law School. This is a lot of fun for me -- I like teaching contracts both semesters because it keeps my mind more focused on the subject. It's also fun to teach the material in a different way -- no cases, as some familiarity with the case law is assumed at this point, so I just give mini refresher lectures and then move on to the homework assignment.
So it's fun, but it's also a lot of work. I give my students four multiple choice questions each day, and they have to turn in their answers -- explaining why the right answer is wrong and the wrong answers are wrong. The idea is to both solidify their understanding of the doctrine and alert them to the strategy behind bar exam "distractors" -- that is, wrong answers that are trying to trick students into mistaking them for correct answers. Most days, they also have to write a short essay, designed to be akin to MEE questions.
Because I am teaching such a course myself, I read with some interest David Frakt's recent post on The Faculty Lounge on the value of in-house bar prep courses. But I was taken aback by the comments. The anonymous or pseudonymous commentators asked the following rhetorical questions:
- Does bar prep make students better lawyers?
- What good is passing the bar when there are no jobs for lawyers anyway?
- Don't law schools have an obligation to refrain from flooding the market with unemployable lawyers?
I think this is a case of massive anger that is massively misdirected. Students are in law school. They want to stay in law school and they want to become lawyers. I have met with many students facing dismissal from my Law School for poor academic performance. The ones I have spoken to all are willing to do whatever it takes to stay in, and they are furious with us when we dismiss them. So we put the time and the energy into bar prep courses because it is what our students need. Some of them need it because they won't do the work without the additional kick in the pants. Others need it because they have many natural gifts that will make them great lawyers, but excelling at standardized tests is not one of them. We are trying to get them over that hurdle so that they can have the careers for which they are otherwise qualified.
I certainly understand the anger of the unemployed law students. I was an unemployed Ph.D. before I went to law school. I know what professional devastation feels like. It seems like the "Law School Scam" crowd thinks the solution is to just shut law schools like the one I teach at. But how would throwing me, my colleagues, and our support staff out of work improve the situation? It certainly would not improve things for the students we serve, most of whom pass the bar, find work, and do better than they would have done without their degrees. Law school opened for me a range of career options that would have been completely unthinkable without my J.D. Why should that opportunity be denied to the current generation of potential law students?
Friday, January 23, 2015
We know that merchantability means passing without objection in the trade. If law review articles were goods, what would that trade be? For law professors, it seems like it is second and third year law students. At some level it would also reviewers of works when a professor is considered for promotion. Recently, though, a colleague of mine and I did a bit of research and began to wonder if acceptable in the trade -- as defined by law students and law professors -- is a meaningful strandard within the trade of academia.
Law professors who do research are generally spending the money of others. The actual buyers are, therefore, those who pay for the scholarship. Let's add that they have no idea what the standard is but would uniformly agree that every article should make someone or something better off and should reflect high quality research. Students and reviewers should be regarded as agents for those paying the bills.
If that is the measure of merchantability (and why wouldn't it be) then editors and reviewers should apply that standard in their own decisions. Clearly they do not and left to their narrow and inappropriate standard for merchantability we have massive amounts of scholarship that, let's face it, is written to justify being granted tenure. There is little verification that most, no matter how carefully done or clever, actually benefits anyone. Some of it -- a small percentage -- is cited but rarely for the substantive points made as opposed to piggy-backing on a fact asserted in the first work. Morever the research is often sloppy. Here is an example. I recently read an article that makes the claim that a certain area of law is now consistent with empirical studies. I looked at the cite and it was to another professor who had not actualy done any empirical work and did not quite say what was claimed. And the work cited by that professor was not on the point made in the first article. In fact the most frequent cite is the hearsay cite in which the author makes a claim because someone else made the same claim.
I expect readers of this will disagree but shouldn't the test of merchatability mean making someone or something (even if a fish) better off and shouldn't documentation be careful and accurate? Don't misunderstand, much of scholarship meets these standards. But much of what currently passes in the trade without objection does not.
Monday, December 15, 2014
The ABA has embraced the idea of student learning outcomes (see Standard 302). I have no objection to the rule as stated. If law schools are not striving to graduate students who are competent in the areas identified by the ABA, they deserve to lose their accreditation.
But I am hearing noises of a much more aggressive version of student learning outcomes (SLOs) which entails identifying in one's syllabus specific SLOs for each class session. I see great potential in this version of the SLO movement for tension with my pedagogical approach (illustrated at left).
I already provide a great deal of guidance to my students on my syllabus. On the day that the word "consideration" appears on the syllabus, I expect them to learn the substantive law of consideration. On the day "promissory estoppel" appears on the syllabus, I expect them to forget everything they learned about consideration and think that all promises that are relied on ential contractual obligations. And by the end of the course, I expect that everything will fall back into place, and that they will be able to deploy the reading comprehension, analytical, and analogical skills that they have been developing all semester (in my course and others) to answer MBE-style final exam questions and essay questions in which I will ask them to apply substantive doctrines to a fact pattern with which they could not possibly be familiar because I have invented it as a test of the skills identified above.
Apparently, some think I need to go further and identify on the syllabus precisely what skills and doctinal areas will be covered in each 50-minute hour. There's just one problem.
I don't wanna.
And it's not just because I am a typical academic who begrudges anyone or anything that might force me out of my Socratic comfort zone. Telling students what they are looking for undermines the basic premise of my pedagogical approach, which I think is a common pedagogical approach because it is a very good, legitimate approach to legal education.
Yes, I hide the ball.
If I show my students the ball every day, they will fetch it. But I am not trying to train spaniels; I'm trying to train attorneys, and attorneys need to be able find things when nobody tells them in advance what they are looking for. They also need to know that this is something that they can do (or learn to do) with nothing more than their own internal resources. Every teaching day, in every Socratic exchange with a student, I try to get the student to a question she thinks she cannot answer and then, through a series of prodding questions, none of which provide the student with facts or information she did not already have from reading the text, I try to bring her to a place where she can formulate the answer that she thought she did not have. When the method works, the student has learned both doctrine and a skill -- and hopefully she has gained a great deal of confidence in her own native abilities.
Or, when I ask the student a question, she could just consult the SLOs in the syllabus and recite the learning objective for the day, and one of us would leave the class under the impression that she had learned something valuable.
I am not really afraid that the aggressive SLO movement augurs the end of legal education as we know it, because I know that students pay very little attention to what is on the syllabus (and they'll pay even less if it contains 10-12 pages of detailed SLOs). I just resent the drain on pedagogical resources that could be spent innovating rather than figuring out how best to march in lock step.
Friday, October 31, 2014
As I noted about a month ago the problem for the 2015 International Commercial Artbitration Moot is wonderful for those who like crossword puzzles, solving problems, reading mysteries, or doing detective work. There are facts, deadends, and read herrings galore. No one goes for a big sleep as far as I can tell but there is the dreaded issue of "fundamental breach." In fact, that appears to be the centerpiece of the problem. Just to make it a little twisty, the fundamental breach is by the buyer whose letter of credit may not conform to the contract. Since even that would be too simple, there is a second letter of credit that may or may not conform but which came after the first arguably non comforming one. There are phone calls, emails, letters, accusations, and even an emergency arbitration that, maybe, should not have occurred at all.
At my school 32 students are now writing briefs for the claimants side of the case and preparing for their oral arguments next week. There is something here even for profs not involved in the Moot. Just reading the problem will spark all kinds of ideas for exam questions suitable for the basic contracts course.
Monday, October 6, 2014
The problem is up for the 22nd Annual International Commerical Arbitration Moot. Between now and early December, teams will write the brief for the Claimant. In mid January the brief for the Respondent is due. And then, in March, 200-300 teams from law schools around the world will gather in Vienna for the competition.
There is no limit to the number of students on a team but they must argue in pairs. Typically one student handles the procedural issues and one the substantive or the CISG issues. There are 4 rounds to start with the 64 highest scoring teams moving on to a single elimination tournament.
The problems identify an actual arbitration agency whose rules govern the procedures, This year the procedural issues center around whether the Claimant the right to make an emergency appeal to the arbitration agency and whether the Respondent may join the parent company of the Claimant for purposes of its counterclaim. In one of those puzzles that charactizes the Moot, the parent company "endored" the contract at issue but claims not to be a party do it.
The substantive issue concerns a letter of credit which does not conform (or does it?) to what was called for in the contract. The buyer attempts to "cure" in a sense but the seller says "too late, we have already avoided the contract." Thus, it raises avoidance and cure isssues under the CISG.
This is, at best, a first cut on the problem. As the weeks pass, the problem will reveal itself as the layers are peeled off.
I am happy to trade notes and views with other interested profs.
[In the meantime, try to find the third man.]
Tuesday, September 23, 2014
On today's show, we read our homeowners insurance policy.
The details are amazing. Lava! Vermin! Falling objects! And, hiding in all the fine print, the story of how insurance works — and what makes it break.
The episode happens to have relevance to our ongoing symposium and even features a conversation with Daniel Schwarcz, one of the symposium contributors. If you listen, you'll hear Prof. Schwarcz admit that, to be sexy, insurance law might just need a little airbrushing.
Monday, September 8, 2014
I am sure most readers know what the CISG is. I was surprised to learn that some are not aware of the International Commercial Arbitration Moot (ICAM) held in Vienna annually over the weekend and then into the week just prior to Easter. It is maybe the most rewarding experience I have had as a teacher. The organizers of the Moot release the problem on the first Friday of October. It is usually a spawling but somewhat realistic fact pattern, Typically there are procedural issues and substantive issues dealing, obviously, with international contract law. Over two hundred teams from around the world gather for 4 days of prelims. The top 64 then go into a single elimination tournament.
At my school, like others, we organize a course around the Moot. In the fall, the students first have 5 weeks of regular class sessions on the CISG followed by an exam. After that, the problem comes out and they have 4-6 weeks to write their briefs. Finally, there are oral arguments. From those exercises, 4 to 6 students are selected to be on the team. (all students earn 3 credits whether they make the team or not) Those students must prepare a claimant's and a respondent's brief and practice twice a week until the competition. It requires dedication.
There are a couple of drawbacks. First is it expensive to send students and a coach to Vienna. At Florida we have been fortunate to have support from the International Section of the State Bar, private donors, and the Law School. Second, the judging in Vienna can be hit and miss. In the four day premlinary period the abitrators (3 each per session) may apply different standards and are sometimes not well prepared. Thus, the goals be for the students must be to learn at much as they can, network, and enjoy, for a few days, interacting with students from all over the world. The winning teams are always superb but some left out of the tournament may also be superb.
I realize there are maybe only a handful of people out there who do not know of this opportunity but I've found it to be very worthwhile (and also hardwork)
Friday, August 29, 2014
- I have all the cases, as well as links to Restatement and UCC sections and exercises that I use in the class (and then some), edited to my tastes and available to the students whether or not they have their hard copies with them;
- Cuts the costs of buying course materials from $150-200 to $15;
- Enables me to change the readings for my course in ways that I choose rather than in ways that casebook editors choose;
- Much easier to deal with (for me and my students) than Blackboard (the Voldemort of educational technology); and
- Provides helpful links to CALI guides, other study aids, contracts videos, and old exams
But the good news is that Debra Denslaw (pictured) is now helping us to keep the LibGuide up to date.
I would welcome suggestions for ways to improve the LibGuide. If you have free materials that would be helpful for first year students to which we could link, please let me know, and we will try to find a place for them on the LibGuide. Anyone who would like to use the LibGuide for their teaching is welcome to do so.
For fans of the blog who find it hard to find those memorable blog posts relevant to the cases you can teach, we gone through the blog and placed below each case links to posts that relate to that case.
Monday, August 11, 2014
Here are the basics:
The practicum is designed to give students a taste for real world contract drafting on behalf of clients. Students are randomly assigned to one of two roles --either representing an employer or a recently hired employee. They negotiate and memorialize the terms of employment their respective clients have already agreed upon. Students will be assigned counterparts within their classes and will negotiate the terms of the contracts through an online portal.
The practicum is set up so that all of the logistical work is done by the software and Professor Eigen. For instance, the software will pair students and email them information about their counterparts. Instructions, participants’ confidential role information, and general instructions will be available through the portal. After student pairs upload their contracts, the software will analyze their work product. Students and professors will receive analytical results in case you wish to spend class time discussing their performance. That is, there is very little work for you if you wish to run it, and you can use almost no class time on it if you wish. Professor Eigen provides a “Professor’s Guide” offering more information including some suggested class discussion points.
There is also an interesting technology-related component of the practicum. If you contact Professor Eigen directly, he will provide more detailed information about it to you.
Instructors who would like to know more about this practicum, and are considering using it in their classrooms this fall should contact Professor Eigen directly: email@example.com
Thursday, June 26, 2014
Thanks to Miriam Cherry (left) for sharing this one:
I love this fact pattern: as reported in the National Law Journal, a student who received a D in contracts is suing the law school he attended, as well as his contracts professor, claiming that the professor deviated from the syllabus by counting quizzes towards the final grade. He claims $100,000 in harm because the D in contracts resulted in his suspension from the law school. He could not transfer to a different law school because he was ineligible for a certificate of good standing.
The case is a cautionary tale. It appears that the syllabus indicated that the quizzes would be optional. The professor then announced in class that the quizzes would actually count. The plaintiff claims to have been uanaware of the change or at least adversely affected by it. I say it is a cautionary tale because I sometimes make changes to my syllabus, usually in response to student feedback. I make sure to e-mail all students to make certain that everyone is aware of the changes and I obsessively remind students of the changes because I worry about precisely what happened here. It may well be that the defendant contracts prof did the same, although the National Law Journal article states that the change was evidenced by the handwritten notes of another student.
There is an interesting exchange on the merits of the case in the comments to the ABA Journal article on this subject. Apparently, there is some case law stating that a syllabus is a contract. For the most part, I think such a rule would benefit instructors. No student could complain about my attendance or no-technology policies because I could tell them (doing my best Comcast imitation) that by continuing to attend my course, they had agreed to my terms. But many of the commentators think that written contracts can never be orally modified. I don't think a syllabus is a contract because I don't think there are parties to a syllabus and I don't think there is intent to enter into legal relations. Things might be different if the syllabus identified itself as a contract and informed students of the manner of acceptance of its terms.
Friend of the blog, Peter Linzer (right), chimes in (comment #13) and succinctly dismisses this notion that a contract not within the Statute of Frauds cannot be orally modified. In any case, he thinks the claim is best understood as sounding in promissory estoppel, and plaintiff's claim fails because, in short, he cannot claim to have reasonably relied on a promise just because he missed class or did not pay attention when that promise was retracted.
Monday, June 9, 2014
Teaching Third Party Beneficiaries, Assignment & Delegation & a New Third Party Beneficiaries Case out of the First Circuit
Last year, my big teaching innovation was to get rid of casebooks and rely instead on cases and ancillary materials that my fellow contracts prof, Mark Adams, and I edited and compiled on a LibGuide. This coming year, my big innovation will be to add a unit on Third Party Beneficiaries, Assignment and Delegation. I can do so because we now have a two-credit course on Damages and Equity at the end of our first-year curriculum, and so I do not need to cover remedies in my contracts course. I will continue to emphasize remedies throughout the course, but we will not end the semester with a unit consisting of cases that focus primarily on remedies issues. Fare thee well, Peevyhouse, Jacob & Youngs, Hadley, et al.! I really will miss you.
I can do so without regrets, as my students will study these cases (or at least the subject matter for which they are the vehicle of presentation) in their Damages and Equity course. The reason I feel I need to jettison this material in favor of third parties, etc. is that I have recently learned that those subject matters are heavily tested on the multi-state bar exam. They also are important in practice, and I don't know where they would be covered if not in first-year contracts.
So, with that in mind, the recent First Circuit case, Feingold v. John Hancock Life Ins. Co. caught my eye. The case related to Feingold's mother's insurance policy, which she took out in 1945. The policy named Mrs. Feingold's late husband as the sole beneficiary. He apparently pre-decesased her, and she died in 2006. Feingold had no knowledge of his mother's policy and did not inform John Hancock of her death until 2012. At that point, he sought information about her policy. John Hancock issued Feingold a death benefit check of $1,349.71 but provided no further information about his mother's policy. That policy, it seems, required a named beneficiary to notify the insurer of the policy-holder's death. Because such a provision was permissible under state law, the trial court found that John Hancock had no duty to notify Feingold of the policy or to independently seek out potential beneficiaries.
But Feingold also relied on a 2011 Global Resolution Agreement (GRA) entered into by John Hancock and several states. Under the GRA, John Hancock agreed to alter some of its practices relating to unclaimed property. Feingold filed a putative class action claiming that he and other members of the class were harmed as third-party beneficiaries of the GRA when John Hancock breached its obligations under the GRA.
The First Circuit affirmed the District Court's grant of John Hancock's motion to dismiss Feingold's claims. The First Circuit found that Feingold and the putative class members are not third-party beneficiaries to the GRA. The GRA contains no language sufficient to overcome the "strong presumption" against third party beneficiaries. While Feingold alleged that both John Hancock and the states entered into the GRA in order to protect insurance policy beneficiaries, the First Circuit reasoned that Feingold and others like him are at most incidental rather than direct beneficiaries of the GRA. Under applicable state law, the fact that states were parties to the agreement strengthens the assumption in favor of the third parties' incidental status.
Tuesday, June 3, 2014
After two employees of Amedisys, Inc. (Amedisys) went to work for its competitor, Kingwood Home Health Care, LLC (Kingwood), Amedisys sued Kingwood for tortious interference. The two parties then engaged in a game of legal chicken. Amedisys threatened that it would not settle below six figures. Kingwood responded with a settlement offer of $90,000, expecting that Amedisys would reject the offer and trigger Rule 167 of the Texas Civil Practice and Remedies Code, which would allow Kingwood to recover litigation costs if the case went to trial and resulted in a judgment considerably less favorable to Amedisys than the settlement offer.
Amedisys accepted the settlement offer. This apparently was not what Kingwood wanted or expected, and Kingwood refused to treat Amedisys's response as an acceptance. Kingwood proceeded with some pre-trial motions, and Amedisys filed an emergency motion for the enforcement of the settlement agreement. Kingwood claimed that the settlement agreement lacked consideration and that it was fraudulently induced by Amedisys's statement that it would not settle for less than six figures. Note that Kingwood is thus effectively admitting that it made its settlement offer only in order to avail itself of Rule 167. After a few more procedural complexities, the trial court granted Amedysis's motion to have the settlement agreement enforced.
On appeal, in addition to its allegations that the settlement agreement lacked consideration and was fraudulently induced, Kingwood claimed that Amedisys's purported acceptance was a counteroffer because it did not match the terms of Kingwood's offer. While Kingwood offered $90,000 "to settle all claims asserted or which could have been asserted by Amedisys,” Amedisys agreed to accept $90,000 "to settle all monetary claims asserted." Despite the fact that this argument was first raised on appeal, the Texas Court of Appeals agreed with Kingwood and reversed the trial court's judgment in favor of Amedisys.
The Supreme Court found that the Court of Appeals acted correctly in considering Kingwood's argument, raised for the first time on appeal, that no contract existed. Amedisys, as the moving party, bore the burden of proving each element of its claim that Kingwood had breached a contract, including proof of the existence of a contract.
[Editorializing here: This seems more than a bit off to me. Amedisys likely thought it had proved the existence of a contract when it presented evidence of offer and acceptance. At the trial court, Kingwood did not raise any claims that the acceptance was invalid based on the difference in wording between offer and acceptance. Why should Kingwood be permitted to sit on its legal arguments and save them for appeal? By not raising them in opposition to Amedisys's motion, Kingwood should have been treated as having waived those arguments. Otherwise, Amedisys would have to attempt to guess every possible legal challenge that Kingwood might raise to its claims and put them in its motion papers. In the process, Amedisys would be required to aniticipate every conceivable counterargument to its position, raise and refute each argument. This places an intolerable burden on the movant.]
While the common law does provide that an acceptance may not qualify or change the material terms of an offer, the Texas Supreme Court found that the differences between offer and acceptance in this case were not material given the full context of the exchanges between the parties. Amedisys made clear its intention to accept Kingwood's offer on the terms Kingwood presented. Moreover, there were no additional claims that Amedisys might potentially bring, as the doctrine of res judicata would bar Amedisys for bringing additional, related claims once the suit had been settled.
Because the Court of Appeals declined to rule on Kingwood's additional defenses, the Supreme Court remanded the case back to the Court of Appeals for resolution of those issues.
For those who would like to explore the Mirror Image Rule with students, this is a pretty interesting case, and the Texas Supreme Court provides a video recording of the oral arguments, so that would be pretty cool to share with students as well.
Wednesday, May 21, 2014
Join us & help shape
the future of legal education
June 13-15, 2014
in Greensboro, N.C.
• William C. Hubbard, President Elect, American Bar Association; Chair, Board of Directors, World Justice Project; Partner, Nelson Mullins Riley & Scarborough
• Bill Henderson, Professor of Law, Indiana University Maurer School of Law; named the second most influential person in legal education by National Jurist (2012 & 2013)
• Experiential learning leaders from other disciplines including: architecture, business, engineering and medicine
• Change and innovation experts from: Casa Myrna Vazquez, Inc., ExperiencePoint and Legal OnRamp
• Law scholars and teachers from: CUNY School of Law; Elon University School of Law; Hamline School of Law; Indiana University Mauer School of Law; New York Law School; Northeastern University School of Law; Notre Dame Law School; NOVA Southeastern University Shepard Broad Law Center; University of Denver Sturm College of Law; University of Minnesota School of Law; Vermont Law School; Washington College of Law
ABOUT THE SYMPOSIUM: The symposium will focus innovations to improve legal education and enhance the relevance of lawyers in the rapidly changing 21st century. Presentations and discussions will emphasize effective and integrated experiential education to accommodate financial and structural challenges in law and legal education, addressing the following questions:
• What do we mean by experiential learning?
• What are the → Innovations → Barriers → Successes in producing integrated and effective curricula?
• What ideas have the Alliance Working Groups developed since the Inaugural Symposium?
• What perspective can other disciplines provide regarding our efforts?
The symposium is being hosted by the Alliance for Experiential Learning in Law and Elon University School of Law. Visit law.elon.edu/aell to register and to learn more about the symposium. The registration fee is $100. Contact Jane Law at Elon University School of Law with any questions related to registration: firstname.lastname@example.org or (336) 279-9325.
The Alliance for Experiential Learning in Law Steering Committee
• Cindy Adcock, Charlotte School of Law
• Margaret Barry, Vermont Law School
• Luke Bierman, Dean-Designate, Elon University School of Law
• Susan Brooks, Drexel University School of Law
• Christine Cimini, Vermont Law School
• Roberto Corrada, Sturm College of Law, University of Denver
• Bob Dinerstein, Washington College of Law, American University
• Steve Ellmann, New York Law School
• Deborah Epstein, Georgetown Law
• Bob Jones, Notre Dame Law School
• Kate Kruse, Hamline University School of Law
• Susan Reich Paulsen, University of Minnesota Law School
• Ruthane Robbins, Rutgers University School of Law
• Pat Coughlan Voorhies, Northeastern University School of Law
The Second National Symposium on Experiential Learning in Law Planning Committee
• Steve Friedland, Co-Chair, Elon University School of Law
• Margaret Barry, Co-Chair, Vermont Law School
• Bill Henderson, Co-Chair, Indiana University Maurer School of Law
• Christy Benson, Elon School of Business
• Olympia Duhart, Nova University School of Law
• Jim Exum, Elon University School of Law; Former Chief Justice of the North Carolina Supreme Court
• Bill McNichol, Reed Smith; Rutgers University School of Law
• Madeline Obler-Grill, Elon Law Journal
• Gene Pridgen, K&L Gates; Immediate Past President, North Carolina Bar Association
• Vivian Wexler, Bingham McCutchen
• Pat Coughlan Voorhies, Northeastern University School of Law
Friday, February 21, 2014
Kingsley Martin of KM Standards gave a luncheon address on "The Emergence of Contracts Standards and Its Future Impact on Legal Education." He introduced us to some very impressive technology that can greatly increase the efficiency with which practicing attorneys review standard agreements. Here's what it looked like:
This technology enables an attorney to review a new document, say a merger agreement, by comparing it to a database of say 15 similar documents. It immediately identifies the provisions that are similar to those found in the database, those found in the new document and not in the database, and those not found in the new document but common in other, similar agreements. An attorney can then quickly pinpoint what is missing from the document and might need to be added and what unusual provisions might regard careful scrutiny.
More particularly, the technology can also use the database to identify the most common language used in standard provisions and also variations in standard provisions so that one can see the range of how parties work out standard terms and pick out the language that is best suited for a particular deal.
The steps are to identify the unitary elements of standard form agreements, identify the clauses components and then draft clauses in clear, standard English. Ultimately, Martin thinks that such the technology can help attorneys negotiate optimal terms. For example, if you are trying to find optimal compensation in an employment agreement at a public company, you could go on to EDGAR and get all the filings that disclose compensation terms. The parties then should be able to discern from the data an appropriate compensation package.
How might this affect teaching? He thinks his basic contracts clauses could be reduced to playing cards. One might then run various simulations with students (or one could just choose to characterize the exercise as a "game" that they students "play"). The students can then choose and negotiate using the various cards and see if they can work out a satisfactory deal. Or they may not be able to achieve a satisfactory deal through the use of common terms, and then the challenge is to see if they can draft unique language suitable to their ends.
Anyone interested in seeing what the cards might look like can check them out here.
Sunday, February 9, 2014
This article in the WSJ coincides perfectly with my syllabus as we are now finishing up our segment on offer and acceptance. Apparently, in the early to mid-nineties, the band Rocket from the Crypt agreed to let in free to their concerts anyone with a tattoo of the band’s logo.
As with many messy offer and acceptance scenarios, it started informally. The band members got tattoos of the logo – of a rocket blasting out of grave – and a few of their friends decided to do the same. Eventually, the band decided to let anyone with the tattoo get in free to see them play. They were a small band then and so whoever had the tattoo was probably a friend (or a friend of a friend) of a band member. But the band grew in popularity – and so did the number of tattooed fans. At their 2005 farewell concert, 500 rocket-tattooed fans got in free.
Now the band is preparing for their reunion tour. Tickets are selling out. There’s just one small problem. Many of the venues where they are scheduled to play don’t want to honor the free-admission-with-tattoo policy.
In my humble opinion, it doesn’t sound like the band actually made an offer to anyone, much less the public at large. The terms weren't definite - how big did the tattoo have to be? Could it be anywhere? For how long would fans get in free? Were there any limits?
But the band did honor the “tattoo-as-ticket” in the past. Does that then give rise to an implied contract? Or is there an equitable estoppel argument that could be raised given the fans’ reliance?
As interesting as this may be to ponder for contracts profs, in the end, I think there should be no enforceable contract and no estoppel claim for the simple reason that the band never intended to make an offer to the public at large. Furthermore, it doesn’t seem reasonable for someone to get a tattoo based upon what they understand to be the band’s informal policy of letting tattooed fans in free. The practice was a custom that grew organically, rather than a promise that must be kept as long as the band plays or the tattoo lasts. Not everything is a contract. If there was some sort of actual promise made, the band's promise was likely one to make a gift (free admission) to show their appreciation to anyone who had a tattoo. In other words, the band members weren't bargaining for fans to get a tattoo, and they weren't bargaining for them to show up to the venue with a tattoo - rather, motivated by affective reasons, they made a donative promise to let in their most loyal fans, the ones with tattoos, for free.
Wednesday, January 29, 2014
All four members of Motley Crue signed an agreement Tuesday that will permanently dissolve the legendary rock group after a final tour.
Vince Neil, Mick Mars, Nikki Sixx and Tommy Lee appeared in a Hollywood hotel Tuesday for a signing ceremony for a "cessation of touring agreement," which their lawyer said would bring a peaceful end to the group.
"Other bands have split up over rancor or the inability of people to get along, but this is mutual among all four original members and a peaceful decision to move on to other endeavors and to confirm it with a binding agreement," attorney Doug Mark said.
Motley Crue has sold more than 80 million albums since hitting the road in 1981, but drummer Tommy Lee said, "Everything must come to an end."
"We always had a vision of going out with a big f**king bang and not playing county fairs and clubs with one or two original band members," said Lee, who is the youngest member at 51. "Our job here is done."
Guitarist Mick Mars, the oldest band member at 62, said the group's 33 years have had "more drama than 'General Hospital.'"
Vocalist Vince Neil, 52, said he'll miss the group, but it's not an end to his rock career. "I feel there are a lot of great opportunities and exciting projects after Motley."
The first leg of "The Final Tour" starts in Grand Rapids, Michigan, on July 2.
The termination agreement becomes effective at the end of 2015, after a global tour that will include Alice Cooper.
"Motley Crue and Alice Cooper -- A match made in Armageddon?" said Cooper.
I'd love to see a copy of the contract (...wherefore Motley Crue hereby f***g agrees fortwith to cease any and all rock band activities of any kind...). In the main, it sounds like a hard one to breach: I promise not to show up for band stuff anymore!
Wednesday, January 8, 2014
Monday, December 23, 2013
One of the unexpected benefits of global acquisitions and diversification of multinational enterprises is that the companies occasionally pop up in interesting contracts cases. Such is the situation in Hoffman v. Daimler Trucks North America, LLC, a case from the Western District of Virginia involving the purchase of an RV that was such a lemon only the mice could love it. Daimler Trucks, a wholly owned subsidiary of Daimler AG, got itself entangled in this case through Freightliner Trucks, its U.S. truck division, and earned itself a quick education in U.S. warranty law.
The case offers some interesting reflections on the interrelationship and interactions between state and federal law with respect to the creation and disclaimer of warranties in the consumer purchase context, as well as the role played by specialized statutes like vehicle lemon laws. Too often, the basic Contracts course barely has time to deal with UCC warranty law and lore, and so the compact treatment of these issues can be a useful hand-off for students interested in exploring some of the implications of warranty law and policy.
On the federal side, we have the Magnuson–Moss Warranty Act — affectionately known as the Federal Trade Commission Improvement Act of 1975, 15 U.S.C. § 2301 et seq. Magnuson-Moss establishes federal minimum standards for warranties if and when a written warranty is offered. If a seller does offer a written warranty to a consumer, seller may not disclaim or modify any implied warranties. 15 U.S.C. § 2308(a). Any written warranties must be made available to the consumer prior to the sale. 15 U.S.C. § 2302(b)(1)(A).
On the state side, of course, we have substantive warranty law represented by the UCC. The UCC will be relevant even when Magnuson-Moss is not (i.e., when an oral, but not a written warranty is offered to the consumer). In contrast with federal law, the UCC permits disclaimer of express and implied warranties, but imposes requirements when a seller attempts to disclaim. UCC § 2-316. Hence, the applicability of Magnuson-Moss could make a substantial difference in a case where disclaimer of warranty is an important issue.
The story so far . . .
In the fall of 2010, Donald Kent Hoffman of Fishersville, Virginia, bought a Tuscany recreational vehicle from RV dealer Camping World. The RV had been manufactured by Thor Motor Coach and included a chassis built by Daimler Trucks North America and various component parts supplied by Drew Industries. To Mr. Hoffman’s deep disappointment, there were very few things about his RV that weren’t problematic, and so Hoffman and the RV spent nine out of their first ten months together off the road and in the shop. Indeed, the situation was so dire that, during one of the repair episodes at Camping World, the RV developed a mouse infestation because it was left outside for an extended period of time.
The mice were apparently untroubled by the flaws in the RV. Among other things, the automatic leveler and indicator lights did not work, nor did the water and waste water indicator lights. The aisle lights in the coach did not work. The deadbolt in the cabin did not work, but then the door didn’t lock from the inside anyway. The door did manage to leak water into the cabin when it rained, however, and the sprayer on the kitchen sink leaked. There was no heat in the vehicle. The front seat did not properly swivel or recline. The map light did not work. The airbags deflated. The driver's side mirror would not stay in place. The control panel did not function properly, nor did the window shades. The steps were installed improperly. The batteries died quickly. In addition, various features that Hoffman said he had been promised were absent from the RV – there was no GPS as promised, and no satellite television.
Daimler, trading as Freightliner, entered the story during the course of Hoffman’s tortuous attempts to coordinate warranty coverage. Camping World told Hoffman that the problem with the air bags would have to be addressed by Freightliner, but Hoffman reported back that Freightliner said it was “ok as per truck stand[a]rds.” Meanwhile, the general twelve-month warranty on the RV was set to expire on or about October 29, 2011. Before this happened, Hoffman attempted to revoke his acceptance of the RV by dropping it off at Camping World and seeking a refund of the purchase price. (The RV apparently remains at Camping World pending the outcome of the litigation, although there is no indication in the court’s opinion where the mice are at this point.)
In April 2012, the long-suffering, travel-deprived Mr. Hoffman brought suit in state court against Camping World, Daimler Trucks, Drew, and Thor for breach of express and implied warranties under Magnuson-Moss and the Virginia Uniform Commercial Code (VUCC), and against Thor under Virginia’s Motor Vehicle Warranty Enforcement Act, popularly known as the Virginia Lemon Law, Va. Code Ann. § 59.1–207.11 et seq. Thor and Camping World, the only defendants served at that point, managed to have the action removed to federal district court, since neither apparently was a Virginia resident.
At this juncture, the scope of the Virginia Lemon Law became an issue. There is some authority that the Virginia Lemon Law does not apply to a completed motor home, but only to the “self-propelled motorized chassis,” Va. Code Ann. § 59.1–207.11. Since Daimler Trucks manufactured the chassis, Hoffman amended his complaint to name Daimler Trucks as the correct defendant on the Lemon Law claim. At that point, the defendants filed motions to dismiss.
The retailer’s disclaimers
The interaction of the three relevant bodies of law – Magnuson-Moss, UCC § 2-316, and the Lemon Law – is critical to the motions to dismiss. The express warranties that Hoffman relied on in his claims against Camping World were not written, hence not covered by Magnuson-Moss, and Camping World argued that it had validly disclaimed any express warranties via a merger clause in the written contract of sale, and that it had disclaimed any implied warranties in a conspicuous manner as required by VUCC § 2-316(2).
Boldly going where most Contracts students have not gone before, Judge James C. Turk found that a merger clause in the contract of sale, coupled with the parole evidence rule embodied in UCC § 2-202, overcame Hoffman’s express warranty claim. As to the implied warranty, however, in a clear and succinct discussion Judge Turk found that the relevant disclaimer clause was not conspicuous for purposes of disclaiming the implied warranties, and he denied Camping World’s motion to dismiss as to the implied warranty claims.
The manufacturer’s disclaimers
Thor’s argument was that its written warranty reduced the limitation period to “90 days after the expiration of the [designated] warranty coverage period,” or in other words three months after the one-year warranty. However, Thor’s warranty language was ambiguous; the same page also referred to a two-year warranty on the vehicle frame, which might make the limitation period in question 27 months instead of 15 months. Rejecting the approach taken in the now-classic RV warranty case, Merricks v. Monaco Coach Corp., and relying on the limitation rules of UCC § 2-725, Judge Turk decided that “Hoffman could not accept the limitation period by passive acceptance of the RV without objection to the pertinent warranty provision.”
As to the two claims against Daimler Trucks – one for breach of express and implied warranties and the other for violation of the Lemon Law – Daimler Trucks argued that Hoffman had simply failed to state a claim for breach of warranty and that the Lemon Law claim was untimely. On the latter argument, which is somewhat beyond our scope, the court allowed relation back to the original filing date of the complaint in determining that the Lemon Law claim against Daimler Trucks in the amended complaint was not time-barred.
On the breach of warranty claim, Judge Turk agreed that Hoffman had failed to plead specific breaches attributable to Daimler Trucks, and hence dismissed the claim against the manufacturer with leave to amend. More importantly from a teaching perspective, the Daimler situation illustrates the impact of Magnuson-Moss clearly and succinctly. Daimler Trucks purported to disclaim all implied warranties in its written warranty, but that contravened Magnuson-Moss. Once the supplier gives a written warranty, it cannot wholly disclaim implied warranties. 15 U.S.C. § 2308. Hence, Hoffman’s implied warranty claims against Daimler Trucks would survive a disclaimer argument.
The supplier’s arguments
Drew, the components supplier, argued that Hoffman’s claims were untimely and that, in any event, its express and implied warranties applied only to Thor, not to the consumer. The timeliness argument neatly illustrates the difference between warranty periods and limitation periods, which, in the court’s view, Drew had confused. Drew had argued that the claims were untimely because they weren’t brought within the one-year warranty period. Judge Turk was quick to point out that “[t]he warranty and limitation periods, however, are not identical concepts. The warranty period covers the component parts for a specified period of time; in other words, it defines the time in which the warrantor has a responsibility to repair or replace the covered parts. The limitation period, however, places constraints on the time in which the buyer must sue.” Simply put, the parties had not agreed to reduce the limitations period “by the original agreement,” per UCC § 2-725(1), and so the UCC default four-year statute of limitations applied.
On the warranty issues, Drew was on stronger ground. Drew claimed that its limited express warranty extended coverage only to Thor, the initial purchaser, and not to the consumer. The Court agreed. Based on a Fourth Circuit warranty case, Buettner v. R.W. Martin & Sons, Inc., which involved a remote supplier who had not even given an express warranty to its immediate purchaser, Judge Turk argued that “an original seller is still free to disclaim warranties as to foreseeable users. . . . The Drew limited warranty plainly extended only to the initial purchaser and Hoffman is not entitled to enforce its protections.”
Drew also argued that it had effectively disclaimed all implied warranties in the text of its written express warranty, but Hoffman countered that this attempt was ineffective because Magnuson-Moss prohibits such disclaimers when the supplier provides a written warranty to a consumer. Here the court found that Magnuson-Moss was not applicable, because Drew did not offer Hoffman a “written warranty” as the term is understood by Magnuson-Moss, because the warranty was intended for the product manufacturer, not the ultimate consumer, per 16 C.F.R. § 700.3(c). Hence, the Magnuson-Moss limitation on disclaimers of implied warranties was inapplicable, and UCC disclaimer rules governed. The court found the disclaimer sufficiently conspicuous to pass muster under UCC 2-316, and it dismissed the claim against Drew.
I would recommend this case to anyone seeking an exemplary discussion of the interplay of federal, UCC, and consumer law with respect to warranties. Judge Turk is undeterred by the complexities of the overlapping issues and multiple defendants, and his analysis is clear, concise, and informative. Students looking for further guidance on these issues would benefit from a careful review of Hoffman.
Sunday, December 8, 2013
My contracts students have their exam tomorrow. I held office hours today, since classes just ended on Thursday, and I had quite a bit of traffic. My students seem primed for the exam -- their knowledge of contracts law is approaching an all-time high.
In case any of my students that I didn't get to see today are looking at the blog, I just want to wish you good luck.
Tuesday, November 12, 2013
When teaching contracts I deal with a delimma. I feel that any law student who graduates and could not carry on a cocktail party discussion about the Coase Theorem has been short changed. There are many places in a contracts class where one might address the theorem. (Of course maybe we all assume someone else will do it.) In fact, if one teaches Walgreen Co. v. Sara Creek Property, you almost have to go out of your way to avoid discussing it even if you do not name it. Specific performance generally invites discussion of the Theorem. It also comes up, if you want it to, any time you ask the class how the parties could avoid an issue. In effect, the could bargain around many problems.
The problem is that, once mentioned, how do you keep it from showing up repeatedly on final exam essay answers? It might legitimately come up in a policy discussion about specific performance but I am pretty sure I have never asked a question that would call for that analysis. It is less pesky than "good faith" and "unconscionability" which tend to worm their way into any answers the students find complicated.
In fact, when teaching anything (for me that means copyright, antitrust. law and economics, and contracts) there are many pieces of information that you may feel make for a better educated law student. Once you mention them they will find their way into exam answer because, well . . . . that's what students do. So how do you enlighten them in a way that rounds them out without also signaling that they need to cram the information into their exam answer?