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?
Tuesday, November 5, 2013
One of the oddities of our new minimester system is that we have two, seven-week contracts courses back-to-back. All of my students from Contracts I and back for Contracts II. And I'm happy to see them. But because my students (well about 3/4 of them) filled out evaluations at the end of the first minimester, I know that not all of them are happy to see me. Ironically, one of the questions on the evaluation form asks students if they would be interested in taking other courses from the instructor. Bummer for those who answered no, given that first year law students don't generally get a choice.
But that little awkwardness aside, getting evaluations at this point is very valuable, and based on the constructive criticism contained in the evaluations, I have made some changes to Contracts II, which otherwise is structured similarly to Contracts I. These changes are as follows:
- As I have mentioned in this space before here, rather than having a casebook and statutory supplment, my colleague Mark Adams and I have edited the cases that we teach, and our Digital Services Librarian, Jesse Bowman (pictured) has put together a LibGuide that features our edited cases, links to the R.2d and UCC and lots other goodies. Many students complained that without a casebook to place the cases in context, they really didn't know what to look for in the readings. I think students are wrong if they think that a casebook would guide them through the cases, since that's not really the pedagogical model in law school. Nor should it be, really. However, given that many students are relying on supplements, I decided to abandon my usual disclaimers about supplements, and I recommended one particular supplement (Blum's Examples and Explanations for Contracts). Students can read the introductory material on each topic before reading the cases to get a sense of what to look for. They can also do the problems at the end of each chapter, which I think are excellent.
- Although I think most of my students understand why I ban laptops and other electronic devices from my classrooms, some students complained of their inability to take notes while also listening to class discussion and viewing the PowerPoint slides. Stealing an idea (which she neglected to copyright) from my co-blogger Nancy Kim, I have appointed three official note takers in each section of contracts. While students are still encouraged to do their own note-taking, the hope is that that official note-takers' work (which I put up on the LibGuide without reviewing them) will serve as a helpful backstop. Students do not need to obsess about getting everything down in their notes. If they miss something, they can rely on the official note-takers to cover it.
- In general, I try to discourage students from obsessing over careful in-class note-taking in any case. I tell them the course is mostly just a friendly discussion about the law -- a party to which everyone is invited. They should just relax and ride the waves, and they can do so, within reason, because at the end of the semeser I hold a comprehensive review session in which I deliver (orally) an outline of the course material at the level of detail for which they will be responsible on the exam. If they have been keeping up with the readings, following class discussion and outlining on their own, that review session should pull it all together for the students (which is why I usually do not recommend supplementary materials). However, I now give short in-class quizzes to my students every two weeks, and that limits their ability to remain carefree until the review session. So, I added a mid-semester (mid-minimester) review session that covers the first half of the course.
So, we'll see. I try wherever possible to adjust my course in response to serious student criticisms. Even if I don't entirely agree with the criticisms, there is no point in persisting with a pedagogy that students actively resist. Still, there are some bedrock principles on which I won't compromise, and so the adjustments I have made are an attempt to improve the delivery of the curriculum in a manner consistent with my ideas about optimal teaching methods.
Thursday, October 31, 2013
I have been periodically reporting in this space on my Law School's new curriculum, which features a new approach to contracts. We have broken each semester into two, seven-week minimesters, and the traditional four-credit, fourteen-week contracts course has been broken into two, two-credit, seven-week courses. As a result, our students had their first set of final exams three weeks ago. They got their grades in mid-October, and I have been meeting with them one-on-one ever since.
I offered a first set of observations on the experiment here. Now that I have been meeting with students, here are a few additional thoughts.
- Far more students have requested conferences with me to go over their exams this year than in any past year. I would put the rate of increased traffic at somewhere between 300% and 500%.
- So far, my conversations with my students have focused entirely on how they can improve their performance on the next exam. No students have come to question their grades, gripe about their grades or complain about the exam or the exam-taking environment.
- Usually, the only students who talk to me about their exams are the students who performed the worst. This semester it has been a mix of some of the top students and most of the bottom students. I haven't seen that many of the students in the meaty part of the curve, but that might be a product of their understanding that a certain triage is taking place. Students who did poorly on the exams need to be meeting with me so that they can get to work right away on remedying identifiable problems. For the rest, there is less urgency.
- To a surprising degree, the meetings have enabled me to identify the nature of the students' problems. It is the rare student who failed miserably on all aspects of the exam. Some have significant deficiencies on multiple choice; some did not IRAC, even though they all know that they have to IRAC. Sometimes, there were specific doctrines that the students had failed to grasp. I hope that this information is useful to them, and to the extent that there are patterns, it is highly useful to me.
- All of this is a lot of work. It is a lot of work for me, and that's okay, but it also puts huge strain on our staff. Schools that might be considering emulating our approach will have to consider the attendant quality-of-work-environment issues. It is also a lot of work for our students to think about what went wrong last minimester when they have also slipped into a new minimester featuring two new substantive law courses without any break.
- One of our main goals with the minimester system is to identify students who are at risk as early as possible and to get them the help we can offer through our ASP program or simply by identifying areas where they can improve their performance. We will be better to gauge the success of this early intervention program at the end of the second minimester in December.
Thursday, October 17, 2013
I have been periodically reporting in this space on my Law School's new curriculum, which features a new approach to contracts. We have broken each semester into two, seven-week minimesters, and the traditional four-credit, fourteen-week contracts course has been broken into two, two-credit, seven-week courses. As a result, I have just finished grading my students' final exams.
Here are some preliminary thoughts on the experiment thus far:
1. The frequent assessments that we did helped me to understand that students have difficulties with concepts that I had forgotten were difficult. I'm sure these concepts were difficult for me as well when I was a law student, but after teaching for ten years, they have become dangerously familiar. For example, I discovered that the distinction between "additional" and "different" terms in UCC 2-207 is not obvious to a lot of students. I never paused to consider that in past years, but we had a quiz on the battle of the forms, and many students preparing for the quiz asked me to explain it. Similarly, I learned this year that the phrase "within the statute of frauds" does not obviously and easily translate into "a type of contract that, in order to be enforceable, must be in a writing signed by the party to be charged."
2. I had some concerns going in that it would be difficult for students to prepare themselves for a law school exam just seven weeks into their first semester, and there were no doubt students for whom seven weeks was not enough time to digest all the material we covered in the first minimester. So, I am a bit concerned that some students will underperform on this exam because they are slower than the median at making the adjustment to the law school environment, and I suspect there are students who are slow at the start but nonetheless are capable of developing a profound understanding of the law. But see #4.
3. I also had concerns about our students' preparation for law school essay exams, but I actually found that this year's essays were not qualitatively different from those of past years, to the extent that comparison is possible. There was, as always, a tremendous range in students' approaches to writing the essays, but it was all within expected parameters.
4. The purpose of the minimester in contracts is to give students a meaningful assessment early on. This will give students a realistic sense of where they stand in relation to their peers. It will also help us to identify the students who need additional academic support, and it may even help us to identify what sort of academic support they need. Since all law students are above average, I expect that many of my students will be disappointed by the grades they receive in Contracts I. I hope that their response will not be to become discouraged but to re-double their efforts and get the support they need from our able academic support team.
5. In years past, when a student would perform dismally in contracts, there was not much I could do beyond handing tissues and hoping that the poor performance was a fluke. This year, because of the minimester system, I have a real opportunity to work with students to address difficulties before they become career-threatening. And if students perform consistently poorly in both Contracts I and Contracts II, I will feel much more confident not in showing students the door but in encouraging them to prepare themselves for the possibility that a career in the law may not be in the cards.
My students will get their first minimester grades at the end of the week. I expect that I will be very busy next week meeting with students who want to go over their exams and extract valuable lessons from the experience. Part II of this post will address the extent to which that expectation is met.
Wednesday, October 9, 2013
I am very interested to see what the Law School Deans have to say on their new blog on legal education. This is a subject that interests us over at the ContractsProfs Blog as well. The Deans have already posted in praise of the ABA recommendation that the 20-hour/week limit on employment for full-time students be eliminated. I agree with the logic of the argument -- the ABA does not prohibit students from doing anything else (moot court competition, law review, student government, video games) more than twenty hours a week, so why should it prohibit employment?
Still, I think there is an answer. There may be students who can work more than 20 hours a week and still excel in law school, but I think they would be exceptional. For most students, law school is hard in ways that college is not. And they do not realize that coming in. They worked through college, so they think they can work their way through law school. But by the time they learn that law school presents new challenges, they have already done permanent damage to their transcripts. The 20-hour rule is profilactic, so it is bound to be overinclusive, but this is probably a situation where a bright-line rule makes sense.
It is true that students can spend time in non-remunerative activities to their heart's content but I think there is a difference. Students can tell both themselves and their professors, "I'm sorry; I don't have time to prepare for your class because I have a job." That excuse will not work as well with any other activity. And to the extent that students are putting in extra hours in activities like moot court competitions, law review, clinical work or pro-bono legal activities, those are all part of their legal educations.
The argument that students need to work to support themselves doesn't necessarily fly, since many of them are working in jobs that pay very little compared to the debt they are incurring. They are far better off getting the most out of their investment in legal education than they are earning pocket money. These sentiments open me up to the accusation of paternalism, and I cannot deny that the accusations score a palpable hit. But in an educational context in which much of the curriculum is required, and a good deal more of it is very strongly recommended, I think we crossed that line long ago in far more substantial ways.
One of the main things that I try to get across, especially to first-year students, is that this, meaning law school, is their job now. There may be personal crises and family emergencies that call out for our students' attention, but students have to negotiate those demands and the demands of law school just as they would those demands and the demands of the working world. The law school curriclum is not going to wait for them. If students are distracted when we go over the statute of frauds and the parol evidence rule, they should not expect to be able to catch up when we are covering remedies. There just won't be time.
It is fine with me if the ABA gets rid of the 20-hour rule, but if it did so, I would recommend that my own law school adopt its own 20-hour rule for our students, with the possibility of exemptions (perhaps issued by the Dean of Students) in special cases when we know the student can handle the demands of both work and school. If we are going to have paternalist rules, they should come from within the house rather than from our ABA Big Brother's house.