Thursday, April 28, 2016
In spite of most jurisdictions reading a duty of good faith and fair dealing into all contracts, a Fifth Circuit Court of Appeals has held that it is unlikely that the Texas Supreme Court would find such a duty to exist in Texas. Wow. Additionally, the court found that no fiduciary relationship between a university student and his/her university faculty and other representatives.
Section 205 of the Restatement (Second) of Contracts states that “[e]very contract imposes upon each party a duty of good faith and fair dealing in its performance and enforcement.” See also Farnsworth, “Good Faith Performance and Commercial Reasonableness under the Uniform Commercial Code,” 30 U.Chi.L.Rev. 666, 670 (1963).
The seminal case in this area is Market Street Associates v. Frey, 941 F.2d 599 (7th Cir. 1991). In that case, Judge Posner held that in spite of the somewhat “moralistic overtones of good faith,” not every contract signatory is expected to be his “brother’s keeper.” Nonetheless, “the essentials of the modern doctrine [are] well established in nineteenth-century cases.” “This duty is … halfway between a fiduciary duty (the duty of utmost good faith) and the duty merely to refrain from active fraud. Despite its moralistic overtones it is no more the injection of moral principles into contract law than the fiduciary concept itself is.” “The office of the doctrine of good faith is to forbid the kinds of opportunistic behavior that a mutually dependent, cooperative relationship might enable in the absence of rule. “
In the new Texas case involving a student at SMU who got fired from his part-time job as a Community Adviser for misconduct toward students and faculty, the circuit court held that “Texas law does not impose a generalized duty of good faith and fair dealing and, in fact, rejects it” in all circumstances apart from when 1) a formal fiduciary relationships exists or 2) a “special or confidential relationship” exists. Examples of the former are attorney-clients, trustee-beneficiary, and principal-agents. In Texas, the latter apparently only includes the relationship between an insurer and an insured. That’s it! Texas courts have, found this panel, refused to impose the duty on, for example, employer-employees (not too surprising), lender-borrowers, medical provider-patients (double wow!), mortgagor-mortgagees, and franchisor-franchisees. The court in the described case also said that an “ordinary student-professor relationship is no different;” in other words, there is no fiduciary or even “confidential” or “special” relationship between students and faculty in Texas.
The case does not show how the student’s allegation that a duty of good faith existed between SMU and the student would really have helped the student on the merits. SMU seemed to have a very good case for firing the student from his job. Nonetheless, it is surprising that the court would so categorically reject that such a duty even exists apart from in traditional fiduciary relationships. While it may make sense that “a purely unilateral, subjective” sense of trust in one’s contractual counterpart and that the other party will have one’s interests at heart is not enough to create a fiduciary relationship, there is a vast difference between that and reading out the duty of good faith and fair dealings from most contracts law in general in Texas. Of course, as contracts law is state law, it is true that it is the Texas courts who must change this line of thinking, but doing so seems to be highly warranted given how courts in other parts of the nation rule on the issue.
The case discussed is Hux v. Southern Methodist University, 2016 WL 1621720 (no free online copy available yet).
Monday, April 4, 2016
CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=39855 (Harvard Science Center)
It's a very common thing, to be provided with a "policy" as opposed to a "contract." A recent case out of the District of Massachusetts, Charest v. President and Fellows of Harvard College, Civil Action No. 13-11556-DPW, addresses that exact issue, and concludes, as you might expect, that what you call something isn't as important as how you behave.
Dr. Mark Charest was a chemistry graduate student at Harvard University. While he was there, he and his supervisor (also a defendant in this lawsuit) and other scientists developed a "novel and valuable method for creating synthetic tetracyclines," important for commercial antibiotics. Universities have lots of valuable things being created by their employees and students, so it's not surprising that Harvard had a policy in place for this sort of situation. Harvard had Dr. Charest, as a student, sign the Harvard University Participation Agreement, which contained a clause that Dr. Charest "ha[d] read and  under[stood] and agree[d] to be bound by the terms of the 'Statement of Policy in Regard to Inventions, Patents, and Copyrights,'" referred to in this case as the IP Policy. A lot of things happen from that point on, but the important thing to know for purposes of this blog entry is that Dr. Charest maintained that Harvard had breached the IP Policy. Harvard, in response, maintained (among other things) that the IP Policy was not a contract.
Other than being called a "policy," you might think this an odd argument for Harvard to try to make, considering that having Dr. Charest sign an agreement to be bound by the IP Policy sounds pretty contract-y. A 1988 Massachusetts Supreme Judicial Court decision, Jackson v. Action for Boston Community Development, had held that an employer's personnel manual was not a contract, and so Harvard relied heavily on that precedent, trying to cast its IP Policy as similar to the personnel manual in that case.
Jackson established a number of factors for its decision, and, while some of those factors did weigh in favor of Harvard, others weighed in favor of Dr. Charest. For instance, Harvard maintained the ability to unilaterally modify the IP Policy and there were no negotiations between Harvard and Dr. Charest over the IP Policy, two factors Jackson said support a conclusion that the IP Policy does not impose contractual obligations. However, Harvard called special attention to the IP Policy and Dr. Charest's agreement to it, required Dr. Charest's signature acknowledging the IP Policy, and the IP Policy spoke in mandatory terms rather than suggestive terms, all of which made it seem more like a binding contract.
In the end, the court found that, as the Jackson precedent has developed, the really important thing is whether Dr. Charest understood himself to have to agree to the terms of the IP Policy in order to continue as a student researcher at Harvard, and that Harvard was likewise agreeing to be bound. The court concludes that yes, this was true. The IP Policy sounded as if it was being very clear about Harvard's obligations, because of its unambiguous language. Harvard itself consistently referenced the IP Policy as governing its actions when questioned by Dr. Charest and when communicating with its students. Therefore, Harvard could not pretend now that it had not been behaving as if it was bound by the terms of the IP Policy.
(Nevertheless, the court went on to dismiss most--but not all--of Dr. Charest's claims. The facts are too complicated to get into in the scope of this blog entry, but if you're interested in the relationship between research universities and their graduate students, it's an interesting read.)
Friday, March 4, 2016
I am pleased to be able to post the following from guest blogger Creola Johnson of the Ohio State University Moritz College of Law:
“His promises are as worthless as a degree from Trump University,” said Mitt Romney during a speech denouncing Donald Trump’s candidacy for the presidency. This statement has prompted additional inquiries into lawsuits filed against Trump University by New York Attorney General Eric Schneiderman and others. (See Petition from New York v. The Trump Entrepreneur Initiative LLC.)
In a class-action lawsuit, many attendees of Trump University alleged that they paid as much as $35,000 to be personally mentored in learning how to earn millions investing in real estate. Despite numerous attempts by lawyers for the Trump defendants to get these lawsuits to dismiss, courts have given the green light for the lawsuits to continue against the Trump defendants. See, e.g., Makaeff v. Trump Univ., LLC, No. 10-CV-940-IEG (WVG), 2010 WL 3988684 (S.D. Cal. Oct. 12, 2010) (refusing to dismiss claims against the for-profit Trump program on educational malpractice grounds because the court was not convinced “Trump University” was “an educational institution to which this doctrine applies.”). For the most recent decision permitting Mr. Schneiderman’s case to proceed, go to: http://www.courts.state.ny.us/courts/AD1/calendar/appsmots/2016/March/2016_03_01_dec.pdf.
What can we say for sure at this juncture about the lawsuits? First, “Trump University” was not a university. There are numerous educational standards and laws that must be complied with for an institution to legitimately claim to be a university. The question then becomes: did the people running Trump’s real estate program (the Trump Program) make promises that arose to level of being a contract. For example, the consumer-plaintiffs alleged that the Trump Program promised that the instructors and mentors running the program would be “hand-picked by Donald Trump.” However, this promise was allegedly breached because most of the instructors and mentors were unknown to Mr. Trump and that they didn’t actually teach any real estate techniques.
We’ll have to wait for a court or jury’s finding regarding what promises were actually made by Donald Trump and the people running the Trump Program. The good news for the plaintiffs and Mr. Schneidermann is that they do not have to prove the existence of a contract. New York, along with every state, has laws that prohibit businesses from engaging in deceptive and unfair business practices.
Consumers should be leery of any language that appears to promise an educational outcome—e.g., “you will earn a six-figure salary after graduation.” While a state’s attorney general, such as Mr. Schneiderman, has the authority to make businesses stop deceptive practices, the attorney general may not be able to get back the money consumers have lost. If it sounds too good to be true, it probably is! For an in-depth discussion of deceptive degrees, see my article, Degrees of Deception: Are Consumers and Employers Being Duped by Online Universities and Diploma Mills?
President’s Club Professor of Law,
The Ohio State University Moritz College of Law
Wednesday, February 17, 2016
It's not a secret that some colleges and universities out there are really struggling. At Lake Superior State University in Michigan, where enrollment has been declining, two professors were recently denied tenure, as Josh Logue reported for InsideHigherEd. As required by the faculty association's agreement with the university, the denials set forth the reason tenure had been denied, and the reason given was the need for the university to reduce staffing in the face of the declining enrollment. The professors took issue with this reason for denial, however, because the agreement contained the following clause:
Recommendations for tenure shall be based on:
a) Careful review of the Tenure Application File [letters of support, CV, and evaluations].
b) Consideration of the faculty member’s collegiality in their relation to faculty, students, staff, and administration.
The professors are saying that that doesn't allow for denial of tenure based on another consideration, such as financial.
It's unclear whether there was a communication with the candidates beforehand that institutional need might impact the tenure decision. The contract doesn't seem to ever mention financial considerations impacting the faculty, or institutional need, or indeed any kind of catch-all, at first glance. It does, however, provide for an appeal of a tenure decision, so I'm curious if the denied candidates will take advantage of this, and what the eventual outcome will be.
Wednesday, January 27, 2016
No, it's not legal-education-related, but rather real-estate-education-related. Which, according to the plaintiff, didn't actually teach her what it promised to teach her. So she sued. The defendant, however, noted that she'd signed a contract with an arbitration clause and so they shouldn't be in court. And the court agreed, in Kane v. Yancy, CIVIL ACTION NO. H-15-1861 (behind paywall), a recent case out of the Southern District of Texas.
Arbitration clauses are, of course, generally looked upon favorably by courts. In this case, there was no dispute that the contract contained an arbitration clause and that the plaintiff signed the contract. Rather, the plaintiff argued that the arbitration clause was unconscionable. The plaintiff claimed the arbitration clause was on the back of the piece of paper that she signed and she never saw it. She further claimed that the arbitration clause required each party to bear their own costs and attorneys' fees, which made the cost of arbitration unconscionably prohibitive for her.
All of the plaintiff's arguments failed. Texas precedent indicated that the question of whether the costs and attorneys' fees portion of the arbitration clause was enforceable was a question for the arbitrator to decide, not the court. At any rate, the court didn't feel that the fees were so exorbitant as to cause concern.
In addition, the court didn't really care about her allegation that she had never seen the arbitration clause because the plaintiff's signature was under a statement indicating that she had read everything on the back of the piece of paper she signed. As we all know, on virtually a daily basis we attest that we've read terms and conditions that we have maybe only barely glanced at, if that. Clearly, that's what the plaintiff in this case did, too. This court didn't care from a legal unconscionability standpoint.
The plaintiff made a couple of other interesting arguments. She tried to argue that, by answering her complaint in court, the defendant had waived its right to arbitration. The court, unsurprisingly, didn't buy it. She also tried to argue that the defendant's breach of the contract excused her from being bound by the arbitration clause. The court, however, noted that the defendant's alleged breach of the contract had nothing to do with the arbitration clause itself, and thus that clause was not excused by the defendant's alleged conduct.
The defendant actually moved for sanctions but the court said that the plaintiff's actions weren't frivolous or intended to harass. So the plaintiff may have lost everything else, but at least she didn't get sanctioned. Hashtag-finding-a-silver-lining.
Saturday, January 23, 2016
This relatively new and unknown funding idea is being tested by Purdue University in cooperation with financial services company Verno Education. The loans are called “Income-share Agreements” or “ISAs.” Investors lend money to students in return for a certain percentage of the student’s future income for a set number of years. A few companies and NGOs in the United States are offering contracts on a limited, pilot basis, although the idea itself is not new: Economist Milton Friedman introduced the idea in the 1950s.
Purdue President Mitch Daniels has touted the idea, claiming that the loans “shift the risk of career shortcomings from student to investor: if the graduate earns less than expected, it is the investors who are disappointed; if the student decides to go off … to Nepal instead of working, the loss is entirely on the funding providers….” Voila, truly “debt-free-college” according to Daniels.
Not so fast. First, most college students of course end up finding a job. They will thus have to repay something. That something could easily be very expensive. For example, if a student borrowed $10,000 via a contract to repay 5% of her income for five years after graduation and ends up getting a $60,000 job, she or he will have to pay back $15,000 without compounded interest.
Student protections are currently poor. For example, there is no clarity as to whether the Fair Credit Reporting Act would apply. Further regulations of this area are necessary. Meanwhile, students will have to individually bargain these types of contracts very carefully.
Wednesday, January 20, 2016
When I was in law school, I remember starting to be really struck by how often I had to sign liability releases: going to play paintball, renting skis, etc. A recent case out of the Tenth Circuit, Espinoza v. Arkansas Valley Adventures, had to deal with just such a release in the context of a tragic whitewater rafting accident.
The plaintiff's mother drowned when her raft capsized during a rafting trip organized by the defendant. She had signed a contract that released the defendant from liability for negligence. The plaintiff agreed that his mother had signed the release but tried to argue that the release was unenforceable. As a matter of Colorado law, though, he lost. The court found the release enforceable both as a matter of public policy and under the particular circumstances of the mother's signing.
The court explained that Colorado uses four facts to determine whether a release of liability for negligence is enforceable:
(1) the existence [or nonexistence] of a duty to the public; (2) the nature of the service performed; (3) whether the contract was fairly entered into; and (4) whether the intention of the parties is expressed in clear and unambiguous language.
The court concluded that, while other states were free to disagree on this, Colorado had decided that corporations providing recreational activities are allowed to protect themselves from liability for negligence. The court stated that this is a valid policy choice for Colorado to make because it arguably encourages the active, outdoorsy lifestyle that the state of Colorado cherishes and wants to protect and promote. Without such ability to protect themselves, companies might be discouraged from offering recreational activities like horseback riding, snowboarding, or whitewater rafting. And in fact other courts in Colorado had explicitly found that companies offering whitewater rafting trips can protect themselves from liability for negligence using a contractual release. The court stated that the Colorado legislature was free to introduce a statute that would change this legal precedent, but, as it stood, the court was bound to follow the precedent.
Having decided that the release was not against public policy according to the first two factors of the balancing test, the court then further decided that the plaintiff's mother had fairly entered into the contract with full knowledge of the risks at stake. The court dismissed the plaintiff's expert testimony that the rapids his mother was exposed to were too advanced for a beginner (in contrast to what the defendant had assured her) by pointing to the fact that the defendant had expert testimony that the rapids were suitable for beginners. Finally, the court noted that the release had the typical all-caps language that you see on these sorts of contracts. You know: "HAZARDOUS AND INVOLVES THE RISK OF PHYSICAL INJURY AND/OR DEATH" and "THIS IS A RELEASE OF LIABILITY & WAIVER OF LEGAL RIGHTS." The truth is, seldom does any consumer seeing that stuff really take it a serious communication of a great risk of death, I think. Especially not when there was some evidence that the consumer has been assured the trip in question was suitable for families with children. Nonetheless, the court found that the language of the release unambiguously informed the plaintiff's mother of the risks of the activity and the fact that she was releasing the defendant from liability should those risks come to pass.
There was a dissent in this case, however, who agreed that the release wasn't against public policy but disagreed on the conclusion that the contract had been fairly entered into. In the dissent's view, the contradictory testimony about the level of difficulty of the rapids meant that the question should have gone to the jury.
I don't spend a lot of time in my Contracts class talking in detail about liability releases for negligence, but this case made me think that I should talk about them more, because they really do seem to arise in the context of so many activities.
Tuesday, January 19, 2016
Do law students intending to practice in the areas of contracts and commercial law particularly need to consider the risk of being replaced by artificial intelligence? It wouldn't hurt.
At this month's AALS annual meeting, Harvard Law School Dean Martha Minnow made some headlines with her comments that the threat to the jobs of human lawyers from artificial intelligence is overhyped:
Minow said she didn’t see computers having a role in matters that require subjective legal judgment. “Assessment and critique of justice and justice mechanisms, I don’t see AI taking that on. Nor do I see AI taking on ethics,” she said. “I don’t mean to suggest there is no relation between AI and ethical suggestions, but I don’t think you’ll ever get rid of the human being. There will always be a need for human beings.”
Dean Minnow's points of optimism--that matters of justice and ethics will require a human component--seem substantially correct, but they highlight a particular problem in the contract and commercial law fields. Matters of human justice, like the administration of criminal penalties and the protection of civil rights, are a natural bulwark against the replacement of lawyers by computers in those fields. The values at stake are ones that we, as a society, would be (fortunately) fundamentally queasy about taking out of human hands. But what if the stakes are "mere" money, as is frequently the case with contracts? That is the kind of area where increased efficiencies and removal of the human element give less pause.
This sort of automation of transactional work is certainly underway, ranging from the drafting of basic transactional documents through websites like Legal Zoom to the intriguing use of smart contracts that can govern and enforce themselves, such as through application of Bitcoin-style blockchain technology. In short, teachers of Contracts are training students in a field with a high degree of risk of being automated out of existence.
Robolawyer is coming, so how do we prepare our Contracts students to become lawyers whose value-adding proposition is not susceptible to automation? This question has many answers, I suspect, but we won't reach any of them unless we start by recognizing the problem.
Thursday, January 7, 2016
Recently, Stacey blogged here about whether tenure is a contract. Yesterday, the news broke that a tenured associate political science professor at Wheaton College, a private Christian university, may soon get to test that theory.
Shortly after the San Bernadino, California, shooting massacre, Professor Larycia Hawkins stated on her Facebook account (which listed her profession and employer) that she “stand[s] in religious solidarity with Muslims because they, like me, a Christian, are people of the book. And as Pope Francis stated last week, we worship the same God." She elaborated that “we are formed of the same primordial clay, descendants of the same cradle of humankind--a cave in Sterkfontein, South Africa that I had the privilege to descend into to plumb the depths of our common humanity in 2014.” She also wore a hijab in “embodied solidarity” with Muslim women.
The response by the College is, for now, the equivalent of “You’re fired.” The College placed Professor Hawkins on administrative leave in December "to explore significant questions regarding the theological implications of her recent public statements, including but not limited to those indicating the relationship of Christianity to Islam." Further, "Wheaton College faculty and staff make a commitment to accept and model our institution's faith foundations with integrity, compassion and theological clarity. As they participate in various causes, it is essential that faculty and staff engage in and speak about public issues in ways that faithfully represent the college's evangelical Statement of Faith." According to Wheaton College President Ryken, however, the College also “support[s] the protection of all Americans including the right to the free exercise of religion, as guaranteed by the Constitution of the United States." Professor Hawkins’ legal team is, according to televised news statements on 1/6, exploring the possibility of a lawsuit should the professor’s preferred solution – mediation and an amicable solution – turn out to be impossible.
This case raises serious questions about the academic freedom of tenured professors – even untenured ones - with which we as law professors are also very familiar. This is perhaps even more so in the cases of private colleges. It seems to me that with a message along the lines of what even Pope Francis uttered along with a reasoned (meta)physical explanation of her views and the College’s self-professed acceptance of freedom of religion, Professor Hawkins did not act in a way that should, under notions of academic freedom, get her fired. If we as law professors do not agree with or wish to challenge certain traditional or even untraditional legal views, are we not allowed to do so because the institutions we work for or the majority of our colleagues hold another view? One would hope so. Most of us can probably agree that academic freedom is exactly all about being able to, within reason at least, provoke deeper thought in relation to what we teach. Note that Dr. Hawkins did not teach religious studies, but political science. With the current embittered debate about Muslims and terrorism around the world, Dr. Hawkins arguably raised some interesting points even if one does not agree with her statements from a Christian point of view.
Stay tuned for more news on this case!
Wednesday, December 30, 2015
Here's one for all the professors out there: Smith v. Board of Supervisors for the University of Louisiana System, Civil Action Case No. 13-5505 Section: "G" (3), out of the Eastern District of Louisiana.
Steven Smith was a tenured professor at the University of New Orleans ("UNO"). Smith alleged a series of disagreements / misunderstandings that eventually led to Smith being committed to teaching the spring 2012 semester at both UNO and a Brazilian university, the Federal University of Bahia ("UFBA"). Smith attempted to resolve the conflict by pushing his start date at UFBA to the last two weeks of his semester at UNO. He had his students at UNO use the final two weeks to work on final projects, which would be submitted to him electronically while he was in Brazil at UFBA. Smith alleged that there was further miscommunication between him and UNO administration about Smith's schedule and whether or not it was acceptable. As a result, Smith stated that he was threatened numerous times with termination. Eventually, he was encouraged to resign and did so.
Smith sued asserting several causes of action, including breach of contract. The Board responded by arguing that Smith and the Board never entered into a contract at all.
Smith first pointed to the faculty handbook and UNO bylaws as the contract between himself and the Board. However, the faculty handbook explicitly stated that it "should not be construed as a formal contractual agreement between the University and its faculty." The court therefore found that the handbook did not constitute a contract.
That was not the end of Smith's contract claims, however, and that's where the tenure issue comes in. Smith argued that his tenure provided him with "a contractual right to continued employment." To support his argument, Smith pointed to the definition of "tenure" in Black's Law Dictionary as well as a number of statements made to Smith when he was granted tenure. The Board made no argument in opposition, leading the court to conclude that, "[a]lthough there was no specific written tenure contract, the parties appear to agree that Smith's achieving tenure meant that he was no longer an at-will employee." Accordingly, the court found that tenure was a contract between Smith and the Board. Whether or not this contract had been breached was a genuine issue of material fact precluding summary judgment.
Wednesday, December 16, 2015
The call for proposals below is reposted from our sister site, Business Law Prof Blog, as it is relevant to recent conversations here about teaching transactional lawyering skills in the context of the first-year Contracts course. The Institute for Law Teaching and Learning has a tremendous track record of putting on conferences full of cutting-edge information on the pedagogy and practices of law teaching. The "Real-World Readiness" theme looks like another winner, and perhaps some of our readers are open to presenting their ideas to this receptive audience.
CALL FOR PRESENTATION PROPOSALS
Institute for Law Teaching and Learning—Summer 2016 Conference
June 10-11, 2016
Washburn University School of Law—Topeka, Kansas
The Institute for Law Teaching and Learning invites proposals for conference workshops addressing the many ways that law schools are preparing students to enter the real world of law practice. With the rising demands for “practice-ready” lawyers, this topic has taken on increased urgency in recent years. How are law schools and law professors taking on the challenge of graduating students who are ready to join the real world of practicing attorneys? Can we be doing more?
The Institute takes a broad view of educational practices that promote real-world readiness. Accordingly, we welcome proposals for workshops on incorporating such teaching techniques in doctrinal, clinical, externship, writing, seminar, hybrid, and interdisciplinary courses. Workshops can address real-world readiness in first-year courses, upper-level courses, required courses, electives, or academic support teaching. Workshops can present innovative teaching materials, course designs, curricular or program designs, etc. Each workshop should include materials that participants can use during the workshop and also when they return to their campuses. Presenters should model best practices in teaching methods by actively engaging the workshop participants.
The Institute invites proposals for 60-minute workshops consistent with a broad interpretation of the conference theme. To be considered for the conference, proposals should be one single-spaced page (maximum) and should include the following information:
- the title of the workshop;
- the name, address, telephone number, and email address of the presenter(s);
- a summary of the contents of the workshop, including its goals and methods; and
- an explanation of the interactive teaching methods the presenter(s) will use to engage the audience.
The Institute must receive proposals by February 1, 2016. Submit proposals via email to Emily Grant, Co-Director, Institute for Law Teaching and Learning, at firstname.lastname@example.org.
More information is available at: http://lawteaching.org/conferences/2016/
I'm posting this proposal and solicitation of comments at the request of some valued contracts-prof colleagues named below. I hope you'll take them up on their request for feedback, which you can provide directly by clicking on the links associated with their names.
More law schools are no longer regularly or frequently offering courses in (1) payment systems, (2) secured transactions, and/or (3) sales. In part, this happens because these schools do not have faculty members who want to teach the courses. And, in other cases, because students do not sign up for commercial law courses--even if the commercial law courses are taught from 11-12 on Tuesdays and Thursdays.
Most students do not need 42 class hours of payment systems, 42 hours of secured transactions, and 42 hours more of sales. ["What?! I'm appalled by this heretical statement!" - Ed.] Lawyers in a general civil practice do, however, need to have familiarity with core commercial law concepts in order to master the specific statutory provisions that govern the transaction or litigation matter on which they are working. ["Okay, that's better." - Ed.] And, before that, there is a need to pass the state bar exam.
We propose that the needs of such students can best be meet in a two-credit course covering only core commercial law concepts, and we are working on course materials for such a course. We welcome your reasoned arguments against this proposal. Even more welcome would be your suggestions as to how 28 class hours can most effectively be used by students learning core commercial concepts.
We look forward to seeing you at the AALS and receiving your emails.
Hmmm. The idea of commercial law in two credits makes this teacher of payment systems and sales a little queasy (see my initial reaction in the selfie photo at left). Still, I probably wouldn't argue with the proposition that some exposure to commercial law is better than none. I'm curious what the broader contracts community thinks, so I've opened up the comments below. Meanwhile, take advantage of this opportunity to help our colleagues with an interesting project.
Sunday, December 13, 2015
Back in October, the New York Court of Appeals decided in principle that candidates for the bar must demonstrate that they have acquired legal skills (as opposed to just the legal knowledge traditionally tested on the bar exam). Our sister blog, Legal Skills Prof Blog, summarizes here some of the options being considered by the court's task force on the all-important question of how to implement such a skills requirement. The activity in New York is, in many respects, a supersized or advanced version of curricular rule changes adopted by the ABA.
This curricular movement is, I believe, an opportunity for those who teach Contracts. Skills taught in law school have traditionally had a substantial bent towards litigation, a bent that is unsurprising in a curriculum dominated by the case method. Even inroads by our friends in alternative dispute resolution still deal with skills applied after a dispute has arisen between parties. When we teach Contracts principally through appellate opinions, we follow the same after-the-fact approach toward doctrine. It doesn't have to be that way. The subject of Contracts is inherently a matter of transactional importance that should be our students' gateway to transactional thinking. By transactional, I mean an emphasis on "before the fact" lawyering where the goal is to prevent a dispute from occurring in the first place. In an era of greater focus on the acquisition of legal-practice skills, Contracts is the place where we have the possibility early on to ensure to skills include a focus on dispute prevention, not just dispute cure.
Transactional thinking is not inherently built-in to the case method and thus likely requires the introduction of skills exercises alongside traditional pedagogical approaches. More resources than ever are available now to enable us to make Contracts a gateway to transactional thinking, fortunately. Implementing such a shift still requires substantial work, however, but the change is one that is in our students' best interests if we can do it well.
Tuesday, December 8, 2015
A few days ago, I blogged here on an attempt by some university professors in California to unionize and to obtain better pay and working conditions in general.
In China, university reform is also underway, but, at least in part, with a much more troublesome intent and potentially dire effects for the nation and the world.
The Guardian reports that China’s education minister has vowed to “drive smart alecks, dissenters and thieves” from the country’s university classrooms. This is part of a wider anti-corruption campaign launched by President Xi three years ago.
The alleged misconduct ranges from action that seems reasonable (firing university leaders for filing fake expense reports and taking bribes from students) across the pitiful and almost laughable (punishing senior university officials for engaging in illicit acts of “hedonism” by, for example, driving luxury cars) to the outright shocking and extremely troublesome, seen with Western eyes. For example, several university chiefs have been toppled for “flouting Communist party rules.” Attempts are made to ban books that attempt to spread “Western values.” The education minister has also called for “greater political screening of academics before they are hired” and is worried that “enemy forces” are attempting to “infiltrate university campuses” in order to “turn young minds against the party.”
Liberal academics claim that the discussion and study of sensitive topics has generally become increasingly difficult under the leadership of President Xi.
All this is indeed very troublesome indeed. However, before we roll our eyes too much at these serious Chinese events, let us just remember that the United States academic world is far from perfect either. Recall, for example, the recent defunding of various law school and other university clinics on East Coast campuses for, at bottom, being too liberal and assisting the lower class in obtaining better pay and working conditions. A former senior faculty colleague personally told me once that one of my papers on (are you ready?) climate change was almost “too political” in Orange County, California. The article discussed mainstream factual aspects, including business and investment issues, of climate change that are now, just a few years later, being discussed in Paris by all media, including conservative outlets. Recently, numerous attempts at diversifying college campuses across the nation have shed light on potential elitism and racism in American universities. Nope, we are far from perfect ourselves. But when an entire nation deliberately and officially seeks to censor learning processes, there is indeed cause for alarm.
Last year, I had the great honor, joy and privilege of teaching international environmental law at a prime Chinese university. I brought up such “sensitive” topics as public participation in government law- and decision-making, climate change, and trade in endangered species. I was videotaped doing so (this is normal practice in China). I was also not invited back this past summer. Maybe my teaching is simply no good. Maybe more senior and “famous” lecturers were chosen. I cannot blame the university for doing so at all. I know that I have a lot with which I can contribute to any educational institution, but I also bow to and honor the many experienced, learned and very well published colleagues on the “market” these days. However, hate to think that I was, perhaps, censored away. I don’t think that is the case. If it was, then I am nonetheless happy to have at least contributed with a few provocative, Western thoughts. Perhaps I was just too much of a smart aleck...
Saturday, December 5, 2015
Five thousand part-time and non-tenure track professors working for the University of Southern California, a private university employing a total of 6,600 faculty, are petitioning the National Labor Relations Board to become unionized. If the petition is granted, the faculty will get a chance to vote on the issue with contract negotiations to follow soon thereafter.
Those of the faculty who support the move say that it could lead to better working conditions, more job stability and higher pay. Currently, part-time faculty teaching courses for USC earn an average of about $5,000 per course. Such faculty often have to piece together jobs teaching classes for several universities earning them the name “freeway flyers.” Parents are often getting upset that students are being taught by part-time adjuncts. Of course, the stress and uncertainty of not having a stable teaching job in one location may indeed affect the quality of the instruction provided by adjuncts and other non-tenured professors.
Nonetheless, USC Provost Michael Quick and other university representatives have warned the potentially unionizing faculty that their move may lead to “less collegiality on campus” because unions, in their opinion, rest on “an adversarial model.”
Come again? So, some university folks may resent the fact that their low-paid, low-security, but hardworking colleagues for seeking out better working conditions for themselves and thus eventually the university students? That in itself sounds highly uncollegial and should be rethought. Perhaps some university faculty and leaders ought to consider assisting their colleagues in moving towards better working conditions and pay, as the trend is around the nation in both academia and beyond, not trying to retaining status quo. Unions have a sound role to play in this respect. Even without unions, many of us enjoy good working conditions and pay. However, many faculty may not individually be able to obtain such conditions. Unions have demonstrated their ability to assist workers in this respect. “Adversarial” is not the right word for that. It’s called bargaining power and leverage. It is what you make it.
As if this wasn’t insulting enough to the faculty, the university provost also encouraged the faculty to “read anything an organizer asks to you sign as you would read a legal document.” Duh! As one faculty said: “I almost feel like they’re insulting my intelligence.” Apparently, the intelligence of the faculty is recognized in some contexts (teaching), but not in others (reaching out for help to improve one’s working conditions).
By way of comparison: part-time and untenured faculty at both the University of California and California State University have long been represented by unions. That has not led to any reports of “less collegiality” or any other of the parade of horribles-scenarios so often invoked when it comes to employee versus employer bargains assisted by unions.
Wednesday, December 2, 2015
A pithy piece over at the Lawyerist makes the point that while lawyers tend to be well-educated and academically accomplished, those facts do not make them inherently good writers. One particularly unhelpful contribution to the problem by legal education is the fact that "law students spend their days reading legal writing that is often verbose, stilted, and chock full of legalese." While I suspect that statement was most directed toward classic-but-musty cases like Hadley v. Baxendale and Hawkins v. McGee, it got me thinking about the reading and drafting of contracts.
Whenever I teach a contract drafting course, proper use and evaluation of existing form provisions is a recurring theme. Clients will not want to pay for reinventing the wheel, and form documents help prevent needless reinvention. Indeed, drafting everything from scratch will tend to turn much transactional work into a sunk cost, the complete antithesis of the value-adding service lawyers need to provide in this automation age. At the same time, the murky and verbose language of so many forms has its own transactional cost: more lawyer and client time is required for every instance of deciphering poorly-drafted language. Unsurprisingly, many students will resolve this tension in favor of copying legalese instead of clarifying it. Pressures of real-life contract drafting are likely to reinforce this tendency in law practice.
Poor contract forms are much like computer viruses--once they are in the system, they will replicate themselves when given the opportunity. Only a lawyer who understands the deal underlying a contract and who has developed the judgment to discern between what to fix and what to keep can prevent the virus from spreading, but even then only once. The form is still out there.
One of the challenges of teaching contracts and commercial law in today's tight legal marketplace is guiding our students toward having understanding and judgment capable (among other things) of stopping contract viruses. Some think that building such transactional cognition is beyond the capacity of law schools, but for our students' sake, I disagree. The lawyers who will avoid being automated out of existence are the ones capable of making sound and complex judgment calls.
Monday, November 30, 2015
I've been re-reading Malcolm Gladwell. The sub-title of The Tipping Point is How Little Things Can Make a Big Difference. That same idea is at the heart of some of his other works. In Outliers, he reports on the importance of birth dates in Canadian hockey. Boys who have birthdays in January and February tend to be hockey stand-outs, Gladwell argues, because in their early years when they are under ten years old, they are significantly older and more physically mature than the boys born towards the end of the calendar year. As a result, the January and February kids get picked for all the travel teams and then all the all-star teams. They get more practice in, they get the coaches' attention, and they also get to play in more challenging situations. With each new experience, they improve incrementally, but eventually the differences between the January and February kids and the November and December kids are vast.*
I've been thinking about how students at unranked law schools like mine are like Gladwell's Canadian hockey players born in November and December. But in the case of law students, the differences between the students who score 170 on the LSAT and those who score 145 on the LSAT are not as arbitrary as the Gregorian calendar. They are often socio-economically determined. Obviously, this does not apply to all students who score below 150 on the LSAT; I am generalizing.
But I am thinking of students from economically stressed families. Their parents work all the time and/or their parents are divorced, adding additional economic stress and uncertainty to the family environment. The parents may not have been to college or they may have gone but not pursued a serious course of study. In any case, higher education takes a back seat in many families to more immediate concerns: children over 18 (or over 16) have to work. Children have to look out for their siblings while the parents take care of other responsibilities.
Many of my students worked their way through college. Many took five or six years to graduate because they needed to work or because they had to interrupt their studies for various reasons. They ran out of money, they needed to care for a sick parent or grandparent, or they weren't performing well in college for reasons ranging from homesickness to immaturity to undiagnosed medical conditions exacerbated by the stress of a strange environment. They went to small, struggling colleges or to branch campuses of state universities. Their instructors tried diligently to help them, but they were in need of remedial courses, and they were in environments that did not encourage concentration on the development of the sorts of critical reasoning skills that comprise the basic building blocks of legal education. Their undergraduate teachers were satisfied if they followed directions, committed instructional materials to memory and then re-created thought processes that were covered in class or in readings.
By the time these students arrive at law school, they seem less intelligent, less dedicated, less disciplined, less professional and less mature than students at higher ranked schools. Standardized tests tells us this is the case. They are none of those things. They are bright, ambitious people who were born in December. They never got the training that the students born in January got. They never were asked to compete on the same level. They never got the same encouragement. They sat out entire seasons due to outside pressures that prevented them from focusing on their own careers.
And now they arrive at law school, and nothing as changed. The vast majority of students just go to the "best" law school that accepts them (or the best law school that accepts them and offers them money). Geography may play some role, but US News rankings determine the outcome of regional contests. A law school may tout its experiential learning programs or its program in entrepreneurship, but it will attract students in a rather narrow band of LSAT scores and undergraduate GPAs. Students with strong LSATs and UGPAS go to the highly-ranked schools. Students with the weakest LSATs and UGPAs go to unranked schools, where their peers are other students like them who have never had the opportunity to develop the study skills, the discipline, the critical thinking skills, the maturity and the professionalism that are the hallmarks of the successful pre-professional.
In addition, they are still subject to the same outside pressures that prevented them from getting the most out of their college educational experiences. I once had a student miss a contracts class because she had to pick up her father at the airport. Her family did not think it was a big deal for her to miss class. No matter how many times we tell them that being a law student is a full-time job, the message does not sink in for students from families who think of school as a part-time endeavor supplemented with a "real job." Many of my students work 20 hours a week, and they resent the fact that we have opted to keep the 20-hour rule when the ABA has abandoned it. They would work more if they could. When I confronted my students in a bar prep course on contracts last year with evidence showing that almost none of our graduates who worked while studying for the bar passed the bar exam, they responded with outraged exclamations: "Well, I've gotta eat!"
All of this (and more) suggests to me that we might be facing a tipping point phenomenon at law schools with median LSATs below 150. This is not about failing law schools or about failing law students. It is about small differences adding up incrementally to a sudden plummet in bar passage rates. If I'm right, I don't think the solution is anything that law schools can undertake on their own. Malcolm Gladwell's conclusion is that Canada is missing out on a lot of hockey talent by benching players born after July. I think the legal profession (and thus society) will miss out on a lot of untapped legal talent if we don't continue to find a way to train the students who have the drive, the grit and the commitment, but not the preparation, for law school. As I indicated in the previous post in the series, I don't think the legal profession or our society as a whole benefits from excluding the students whose pre-law-school predictors suggest that they will struggle to pass the bar examination the first time they take it. After all, while January and February produce more NHL hockey players than any other month, on average, according to Quanthockey.com, they are not the best. The January players score an average of 105.4 points over their NHL careers. October payers score an average of 128.3, and December players best them all at 138.8!
Monday, November 23, 2015
A lot of people are angry at the legal academy. They are angry about falling bar passage rates and limited career opportunities. They are angry that law schools do not do enough to prepare them for the bar or for practice and that tuition is too high given what traditional legal education can accomplish. The anger, to the extent that it comes from law graduates who worked hard and still cannot find satisfying work as attorneys, is understandable. Directing that anger at law professors is also understandable but in most cases unjustified.
We did not create the market conditions. We, for the most part, are not even the architects of the policies that determine admissions standards or tuition. We are very limited in the extent to which we can innovate because we are subject to ABA educational guidelines that increasingly (and often unhelpfully) micro-manage our operations. Almost every innovation that would improve legal education would also make legal education more expensive.
I want to outline two arguments in this post. First, legal academics and administrators at unranked law schools are people of good will who are trying to continue to serve people who ardently aspire to become attorneys. Second, the legal profession is also full of people of good will, but collectively the legal profession is behaving as professions always do in times of economic contraction: they are raising barriers to entry so as to protect their incomes and their self-created monopoly in the provision of specialized services.
What is going on at unranked law schools is pretty simple. For decades, such law schools accepted students who, for the most part, could not have gotten in to more highly-ranked law schools. For decades, the overwhelming majority of such students went on to pass the bar and enter the legal profession. As Michael Simkovic and Frank McIntyre have shown, those students are financially better off for having done so, and without the lower-ranked schools, they never would have had the careers they now have. Unranked law schools started dipping deeper into the applicant pool when that pool shrunk considerably in size, believing that they had the ability to identify students who could succeed in law school and in the legal profession and that they could address the needs of the academically underprepared with beefed-up academic success programs and curricula more geared towards bar preparation.
Evidence is mounting that law schools were overly sanguine about their ability to help students in the bottom quartile of the national LSAT pool. But evidence is also beginning to suggest that the pool has bottomed out and begun to grow again. That should mean that unranked law schools that are competing for students may have a larger pool of students to compete over, and so long as schools learn their lesson and keep growth and costs down, that should mean that they can begin to increase their admissions standards back towards where they were a decade ago. In five years, the crisis may well have passed and the law schools over which the sword of Damocles currently hangs will be crowing about gaudy bar passage and employment rates.
This result is far preferable to shutting down existing law schools. Right now, we have overcapacity, but it law schools disappear, they are unlikely to reappear. And if, as seems likely, the law schools that close are the unranked law schools, the losses will hit underserved communities the hardest. I will have more to say about who those communities are and why keeping them out of the legal profession is a big problem in the next post in this series.
The ABA is the guardian of our profession. What do professions and professional organizations do? Following Magali Sarfatti Larson, we can conceive of the legal profession as a group of trained experts attempting to establish a monopoly over a market in services. The key to control over a market for professionals becomes control over the production of producers. By limiting the supply of credentialed practitioners, professionals assure themselves a favorable bargaining position in the market for their knowledge and services. (Magali Sarfatti Larson, The Rise of the Professions: A Sociological Analysis 29-30 (1977)). As Larson points out, professions do not so much meet existing needs as shape or channel the needs of consumers (id. at 58). In order for a profession to succeed, it needs to convince the members of society as a whole that its services are necessary and that only people with a certain kind of expertise and credentialing are qualified to provide such services.
And so, when the going gets tough, barriers to entry rise. Recent trends of (often steeply) lower bar passage rates and the steady drumbeat calling for greater scrutiny of law schools viewed as underperforming are consistent with how Larson's model predicts professional organizations will respond to economic pressures. But it also threatens to add a new and ugly chapter to the history of the ABA.
Many have written about the racist bias underlying the establishment of the ABA (e.g., Daria Roithmyer, Deconstructing the Distinction between Bias and Merit, 85 Cal. L. Rev. 1449, 1476 (1997)). I do not think there is any such intentional bias at work today, but the organizations so eager to mete out death sentences to law schools that serve underrepresented minorities and the academically underprivileged need to think about what the legal profession will look like in 2025 if their wishes all come true.
Wednesday, November 18, 2015
I'm not stopping because I'm burned out. I still love blogging, and I wouldn't be surprised if, after a hiatus, I want to come back to blogging in some form. I'm stopping because I think I've maxed out on the benefits I can derive for myself and my law school from this enterprise, and it is time for me to find new ways to contribute. Also, look how blogging has aged me, as evidenced in these photographs of me taken before I started blogging (left) and after (right).
Moving on feels especially urgent given what is going on in the legal academy and in unranked law schools like mine in particular. Posts III and IV in this series will elaborate on that subject. Given the challenges that my current students face and that I face in teaching them, I am contemplating a complete re-tooling of my approach to teaching contracts. I have requested a year off from teaching contracts next year so that I can teach a couple of legal writing/legal reasoning courses and get better insights into where my students are at in those areas when they get to law school. I also need to learn from my skills-training colleagues so that I can better incorporate skills training into doctrinal teaching when I go back to teaching contracts, as I very much hope to do.
At the same time, at age 52, I am beginning to think about what remains of my career as an academic and what sort of an impact I think I can have in the 10-15 years that remain to me as an active scholar and teacher. It is already clear to me that my most important impact is going to be in the classroom. Although I would like to think that I have original ideas and can contribute to an academic debate that can move the law or inform policy decisions, the likelihood of that is small, as it is for most of us mortals. Still, perhaps out of vanity, I have three book projects that I think will keep me occupied into my sixties. One is an edited collection on Hans Kelsen, which is under contract and which I hope will come out next year. The second is an intellectual history of originalism in constitutional adjudication, as a judicial practice, an academic approach and a popular movement. The third will be on theories of public international law, I have a typology of public international law theories that I use in presenting the material to my students. I've always wished there were a book that did this the way it needs to be done. Oona Hathaway and Harold Koh edit a collection which is very useful, but for some reason they have not decided to organize the material the way I organize it. I'm kidding. My organization is unique, and I will only know if it makes sense once the book is well underway. So, I have assigned myself the task of writing that book.
None of these projects relates to contracts law, and so the prospects for me returning to contracts scholarship before retirement are remote. I expect that I will continue to follow the blog, use it as a resource, refer students to it, and feel pride that I contributed to it for nearly a decade. But I need to allocate my dwindling intellectual energies elsewhere. Producing a book every five years is something I think I can still handle while focusing on Job 1, which is helping my students pass the bar and prepare for their legal careers.
Monday, November 16, 2015
I have told my co-bloggers and the Blog Emperor that I intend to step down from the blog at the end of the semester. I am leaving things in good hands. Nancy Kim will continue as a contributing editor, and Myanna Dellinger has agreed to step up as editor. I hope that this post will aid Myanna in her efforts to attract new contributors. The more different voices we feature on the blog, the more we can attract new readers and move others from occasional to habitual readers.
Before I go, I have a few things to get off my chest, and I will do so in a final series of posts.
First come the thanks (and they will come again at the end). Nearly ten years ago, I sent a Limerick to Frank Snyder (pictured) and asked him if he would be interested in posting it on this blog. He responded by inviting me to become a regular contributor. He showed me the ropes and roped me in to the contracts law community, and for that service, I owe him continual thanks, as the benefits continue to accrue. While on the blog, I have had many great colleagues, who have helped keep the blog going and added new and interesting perspectives. Two such colleagues, Nancy Kim and Meredith Miller, merit special thanks because of their long tenure on the blog and because their contributions moved the blog in new directions, both scholarly and quirky, that expanded our readership in ways we could not otherwise have done. Both served me as sounding boards both in my contracts scholarship and in connection with issues that arose on occasion relating to the blog. It is a bit odd to describe as friends people you have only spoken with face-to-face on a handful of occasions. Yet, in unreflective moments, when I confess that I like to go to the International Conferences on Contracts because I get to see my friends there, I have Frank, Meredith and Nancy (and others) in mind.
Which brings me to the second subject I want to tackle in this post. When I started blogging, I was untenured, and there were a few articles circulating (as well as many more blog posts) suggesting that it might not be a great idea for junior faculty members to blog. The main concern was that blogging would interfere with serious scholarship. Based on my own experience, I think this is nonsense. Blogging can certainly spur scholarship, but I have never been much of a contracts scholar (with the exception of my forthcoming article so-authored with Nancy Kim, my publications tend not to be about contracts). But blogging also is scholarship, and it is scholarship that is much, much, much more widely read than are law review articles. This blog gets about 300 unique visitors A DAY. I think I am doing well if one of my articles gets to 300 downloads TOTAL on SSRN.
And my posts on this blog have been cited in law review articles. It doesn't happen all that often, but when it does, it is always for the unique substance of the blog post. My law review articles are sometimes cited for that purpose, but probably more often, my law review articles are cited for some proposition that the author could have found in ten other law review articles.
But the benefits of blogging to a junior faculty member can also lie elsewhere. Blogging has certainly kept me on top of new developments in a field in which I teach. But beyond that, blogging has helped me establish connections with contracts professors throughout the country and sometimes even internationally. Through our online symposia, I have gotten to work with contracts scholars who are doing the most exciting work in the field. I hope for better and not for worse, I am known as a contracts professor in ways that I think other contracts professors at "unranked" law schools generally are not, and I expect that my being known (for better and not for worse) also redounds to the benefit of my law school. By way of contrast, I am not equally well known in the field of international law, although that is where I do most of my writing, and in the community of American scholars who work on Hans Kelsen . . . . Just joking, all six of them know me.
On the more personal and less professional level, I have had innumerable, rewarding conversations with contracts professors at various conference and gatherings. Often, these conversations begin with something like, "I saw your post about . . . ." or "Oh yes, I know you from the blog . . . " We academics are awkward people. The blog provides a ready ice-breaker, and so I have the blog to thank for providing the gateway to many rewarding exchanges.
For years, I have introduced myself to students as "the editor of the ContractsProf Blog, the official blog of the AALS Section on Contracts." As I look out at their impassive faces, I tell them that they have now heard my best pick-up line. I love the joke, especially since I don't know what it means to be the official blog of the AALS Section on Contracts. I also love it because I think my students think it might be an impressive thing but also that my joking about suggests that I don't take myself too seriously.
They are dead wrong about that. When my teenage daughter gets too sassy, I remind her that I am a famous contracts professor. I sign various school forms "D. A. Jeremy Telman, FCP," and I explain that FCP stands for famous contracts professor. "Dad," my daughter groans, "you are not a famous contracts professor." "Oh yeah?" I counter. "Can you name one who is more famous?"
She cannot, and now I have a plaque (Fathers' Day 2015) to prove it!