Thursday, May 15, 2014
Today's New York Times features an article reporting on a 2012 study that indicates that consumers are better off being forced to buy bundled packages than they would be if they could choose to purchase only the cable channels they actually view. The argument seems to boil down to the fact that it costs the cable companies about the same to bring you four channels as it does for them to bring you 179 channels, so they are going to find a way to charge you the same regardless, and now you will miss out on watching channels that you only watch occasionally. Moreoever, the channels that are most in demand on a per-channel basis will now demand higher fees to make up for lost revenues from their sister stations that fewer people watch and which consequently cannot generate as much advertising revenue as they could under the bundled system.
Given that this story is based on one two-year old study and comes from Times correspondent Josh Barro, who also gives the thumbs up to Frontier Airlines for charging people extra to use overhead storage bins, I'm going to file this story provisionally under, "Wait, that can't be right," and see if any counterarguments turn up. The comments on the story indicate that some of the assumptions underlying the study and Barro's column could be questioned.
Monday, April 7, 2014
My student, Cecelia Harper (pictured), recently ordered television service. The representative for the service provider offered a 2-year agreement, which he said was “absolutely, positively not a contract.” Learned in the law as she is, Cecelia asked the representative what he thought the difference was between a contract and an agreement. He wasn't sure, but he did read her what he called "literature," which surprisingly enough was not a Graham Greene novel but the terms and conditions of the agreement, which included a $20/month "deactivation" fee should Cecelia terminate service before the end of the contract -- oops, I mean agreement -- term.
I have seen said agreement, and it includes the following charming terms:
- Service provider reserves the right to make programming and pricing changes;
- Customer is entitled to notice of changes and is free to cancel her service if she does not like the changes, but then she will incur the deactivation fee;
- Customer must agree in advance to 12 categories of administrative fees that may be imposed on her;
- Service provider reserves right to change the terms of the agreement at any time, and continued use of the service after notice constitutes acceptance of new terms;
- An arbitration clause that excludes certain actions that the service provider might bring; and
- A class action waiver
If the agreement had a $20/month deactivation fee in it, I could not find it. All I see is a deactivation fee of "up to $15." Rather, the "customer agreement" references a separate "programming agreement," and suggests that there are cancellation fees associated with termination prior to the term of the programming agreement.
So in what sense is this not a contract? My guess is that this is service providers trying to emulate what cell phone service providers have done with their "no contract phone" campaigns. For example, there's this one:
I'm guessing that the television service providers have learned that these ad campaigns have made "contract" into a dirty word. They are now seeking to seduce new customers by insisting that they do not offer contracts. Oren Bar-Gill will have to write a sequel to his last book and call it Seduction by Agreement.
If anyone has any other theories for why representatives for service providers are insisting that their contracts are really agreements, please share!
Friday, February 14, 2014
We at the ContractsProf appreciate your readership. Unfortunately, all of our bloggers are occupied at this time binging on Season 2 of House of Cards. Readers may stare at their screens, visit the TaxProf Blog or any other blog on the Law Professor Blog Network, or pass Valentine's Day by doing whatever it takes to get a free crib from Ikea (hat tip to Rachel Arnow-Richman).
We will resume blogging shortly.
Thank you for your patience.
Saturday, February 1, 2014
Running out of examples of unilateral contracts? Well, here's one: Hong Kong tycoon Cecil Chao offered $65 million to any man that could get his lesbian daughter's hand in marriage. That is, if a person could reasonably believe that Chao intended to enter into this bargain (it seems that he was in fact serious, especially in light of his wealth and his rejection of his daughter's sexuality):
Chao's daughter Gigi handled the situation with incredbile grace, writing an open letter to her father:
In her letter, Gigi Chao tells her father that she "will always forgive you for thinking the way you do, because I know you think you are acting in my best interests."
And she says she takes responsibility for some of her father's misplaced expectations.
When he first announced the colossal dowry in 2012, she said at the time she found it "quite entertaining."
But this week she appeared to set the record straight.
"I'm sorry to mislead you to think I was only in a lesbian relationship because there was a shortage of good, suitable men in Hong Kong," she writes. "There are plenty of good men, they are just not for me."
Here's Gigi in her own words:
It sounds like quite a few men responded to the offer with attempts to win Gigi's heart. But it is now too late. Even though Chao will not recognize his daughter's relationship with her long-time partner (really, wife - given that they wed in France even though the marriage is not recognized in Hong Kong), Chao has now revoked the offer.
Monday, January 27, 2014
Severe Economic Disruptions from Climate Change
For many, climate change remains a far off notion that will affect their grandchildren and other “future generations.” Think again. Expect your food prices to increase now, if they have not already. Amidst the worst drought in California history, the United Nations is releasing a report that, according to a copy obtained by the New York Times, finds that the risk of severe economic disruptions is increasing because nations have so dragged their feet in combating climate change that the problem may be virtually impossible to solve with current technologies.
The report also says that nations around the world are still spending far more money to subsidize fossil fuels than to accelerate the urgently needed shift to cleaner energy. The United States is one of these. Even if the internationally agreed-upon goal of limiting temperature increases to 2° C, vast ecological and economic damage will still occur. One of the sectors most at risk: the food industry. In California, a leading agricultural state, the prices of certain food items are already rising caused by the current drought. In times of shrinking relative incomes for middle- and lower class households, this means a higher percentage of incomes going to basic necessities such as food, water and possible medical expenses caused by volatile weather and extreme heat waves. In turn, this may mean less disposable income that could otherwise spur the economy.
Disregarding climate change is technologically risky too: to meet the target of keeping concentrations of CO2 below the most recently agreed-upon threshold of 500 ppm, future generations would have to literally pull CO2 out of the air with machinery that does not yet exist and may never become technically or economically feasible or with other yet unknown methods.
Of course, it doesn’t help that a secretive network of conservative billionaires is pouring billions of dollars into a vast political effort attempting to deny climate change and that – perhaps as a consequence – the coverage of climate change by American media is down significantly from 2009, when media was happy to report a climate change “scandal” that eventually proved to be unfounded.
The good news is that for the first time ever, the United States now has an official Climate Change Action Plan. This will force some industries to adopt modern technologies to help combat the problem nationally. Internationally, a new climate change treaty is slated for 2015 to take effect from 2020. Let us hope for broad participation and that 2020 is not too late to avoid the catastrophic and unforeseen economic and environmental effects that experts are predicting.
Assistant Professor of Law
Western State College of Law
Monday, December 23, 2013
Motion to Compel Arbitration Granted in Part, Denied in Part in Antitrust Case v. Cable Providers and Sports Organizations
On November 25, 2013, Judge Scheindlin of the Southern District of New York issued an opinion in Laumann v. National Hockey League, granting in part and denying in part a motion to compel arbitration brought by defendant Comcast and denying in full a similar motion brought by defendant DIRECTV. Plaintiffs claim that defendants, including the National Hockey League and Major League Baseball, along with the major cable and satellite television service providers entered into "agreements to eliminate competition in the distribution of [baseball and hockey] games over the Internet and television [by] divid[ing] the live-game video presentation market into exclusive territories, which are protected by anticompetitive blackouts," and by "collud[ing] to sell the `out-of-market' packages only through the League [which] exploit[s] [its] illegal monopoly by charging supra-competitive prices." These agreements allegedly violate the Sherman Antiturst Act.
At the heart of plaintiffs' beef, it seems, is that if one wants to view "out-of-market" games -- that is, games that do not feature the team from one's home city or the city where one is located -- one must purchase television packages which inculde all out-of-market games, even if one is only interested in the games of one out-of-market team.
Both Comcast and DIRECTV have customer service agreements that feature arbitration clauses and so both defedants moved to compel arbitration. Judge Scheindlin granted Comcast's motion with respect to one plaintiff who purchased an out-of-market package directly from Comcast and thus was clearly bound by the arbitration provision. The remaining plaintiffs had a more complicated relationship to Comcast and claimed that their claims did not arise directly under their customer service agreements with Comcast.
Judge Scheindlin first ruled that any colorable dispute about the scope or validity of the arbitration clause must be referred to the arbitrator. Plaintiffs colorfully objected that where the relationship between the agreements and the claims are too attenuated, granting Comcast's motion would be like compelling arbitration of a claim by a plaintiff who had been hit by a Comcast bus. Judge Scheindlin agreed with respect to one plaintiff, where "the sole nexus between his claims and his Comcast service is the allegation that his DIRECTV package contained material produced by the Comcast" Regional Sports Networks.
Comcast also sought to compel arbitration of claims brought against it pursuant to arbitration clauses in plaintiffs' agreements with DIRECTV. With respect to these claims, Judge Scheindlin noted that there was no clear intent to have questions of arbitrability between a signatory and a non-signatory decided by the arbitrator. She then ruled that the arbitration clause in the DIRECTV agreements did not encompass plaintiffs' claims against Comcast. She also rejected Comcast's claim that plaintiffs should be estopped from bringing a claim under the DIRECTV agreements through any mechanism other than arbitration.
DIRECTV's motion to compel arbitration against another plaintiff failed because the plaintiff is not a DIRECTV customer bound by its arbitration agreement. The DIRECTV subscription is in the name of plaintiff's wife, and the court rejected any claim that he could be bound by admission or estoppel.
Monday, December 9, 2013
Like others writing or reading this blog, my students are currently toiling away on their final exam. This means the last several days have been filled with questions. Sometimes the questions are so good I think the questioner should be teaching the course and not me. On the other hand, sometimes the questions are so worrisome that I wonder whether or not I have actually been teaching anything at all. One of my favorite sources of questions is 2-205 of the Code. In the context of essay questions I have presented all manner of issues based on 2-205. Are initials sufficient as a signature? (The Comments say yes.) What constitutes an assurance? What is a reasonable time? When I enter "2-205" into westlaw I am surprised at how few cases seem to turn on a 2-205 question.
Most of us have probably asked a question based on something like this. "Please let me know whether you accept within 7 days." Is that an assurance? If not, it's not a firm offer. Or is it? Suppose it is "I will hold the offer open for you. Please led my know your answer within seven days." How long is the offer open? Seven days or even longer if that is reasonable? And what does reasonable depend on? Should the reasonable offeree [btw is there an official correct spelling of offeree?] really expect the offer to be available on day 10.
And there are the questions dealing with a firm offer that is rejected or when there is a counter offer. Does it matter if the offeree has relied on the rejection? After all, the firm offer is a very thin concept and mere limits the rationale for a revocation. Which raises the question what are the other rationales for revocation?
If we fall back to common law answers what we know, or seem to know, is that firm offers can be open for longer than the time stated, although they become "soft" after that time, and if rejected or met with a counteroffer, can end before the time stated.
On the other hand, if the drafters only meant to take the consideration requirement out of option contracts (which the Restatement almost does), are these answers right?
2-205 is like a box of choclates.
Tuesday, October 1, 2013
IF YOU ARE NOT UP-TO-DATE ON BREAKING BAD EPISODES,
READ NO FURTHER
Thursday, September 26, 2013
NFL v. MIA: we've mentioned issues related to this incident on this blog in the past. But, if you ask me, it just got good.
Here's the background: at the 2012 Superbowl, this little flip of the bird happened during the halftime show:
The NFL has since sued (in arbitration) M.I.A. (the bird-flipping artist in the video above) for $1.5 million. The NFL’s claim? It claims that M.I.A. breached her contract because the “offensive gesture” was “in flagrant disregard for the values that form the cornerstone of the NFL brand and the Super Bowl." In the contract, she apparently acknowledged “the great value of the goodwill associated with the NFL and the tremendous public respect and reputation for wholesomeness enjoyed by the NFL."
The case, it sounds, comes down to what is “offensive” and what exactly are the “wholesome” values of the NFL. This FoxSports column does a great job explaining why the lawsuit is “laughable” – with video footage as evidence of just how wholesome the NFL is.
A video of M.I.A. has recently surfaced. In the video, she (rather articulately) explains the absurdity of the lawsuit. As 411Mania.com describes:
[M.I.A.] says the NFL is "scapegoating me into trying to set the goalpost for what is offensive in America." She notes that the picture in which she is seen giving the middle finger also has a group of sixteen year-old girls who were selected from a high school in Indianapolis who are in cheerleader outfits with their "hips thrusted in the air, legs wide open, in this very sexual...sexually provocative position."
Here’s M.I.A. regarding the lawsuit, which she describes as "a massive display of... powerful corporation dick shaking." In light of the 16-year-old cheerleaders on stage behind her, she frames the issue in the lawsuit as whether female sexual exploitation or empowerment is more offensive. Interesting stuff:
[Meredith R. Miller]
Thursday, September 19, 2013
Friday, September 13, 2013
Over the summer, hte UK's National Audit Office presented to the BBC Trust Finance Committee this Report on executive severance payments made to fromer BBC executives. The BBC has reduced its management staff signficantly since 2009. In so doing, it expects savings totalling £92 million. However, the BBC also has made severance payments to the 150 ousted executives totalling £25 million.
According to the Report, the BBC plans changes going forward. From now on severance pay will not exceed 12-months salary or £150,000, whichever is less.
The drama of Parliamentary hearings into the payments is well described here in the UK's The Guardian. The BBC's Director General at the time of the payments was Mark Thompson, who recently moved on to The New York Times, where he is Chief Executive. Thompson defended the payments before Parliament, although they exceeded by £1.4 million (£2 million in The Independent's account) the BBC's contractual obligations to its former executives. The largest single payment was just over £1 million, and it went to Thompson's deputy, Mark Byford. According to the BBC, the investigation into severance payments was triggered by a £450,000 payment to one BBC executive who resigned in connection with a scandal after just 54 days on the job.
From an American perspective, it is a bit hard to see what the fuss is all about. Sure, capping severance for executives at publicly-owned entities is certainly a reasonable policy, but even without the cap, exceeding contractual obligations by something less than 10% while achieving significant savings overall seems pretty tame on the overall scales of both wasteful public-sector spending and executive severance packages. As Brad Pitt's character puts it in Inglorious Bastards, that should just get you a chewing out. But perhaps we have been desensitized by the size of severance packets, even at public corporations, on this side of the pond.
1. It is perhaps telling that the Report begins with three blank pages (after the cover page) followed by two mostly blank pages. Apparently they don't audit their own use of paper.
2. UK usage seems to have completely abandoned the hyphenated compound adjective. Thus, after all the blank pages, the Report begins, "The BBC Trust receives value for money investigations into specific areas of BBC activity." I had to read this sentence three times before I could make any sense of it. That's because "value for money" is a compound adjective rather than two nouns separated by a preposition. To my eyes, the sentence would have been far more readable if it had been written: "The BBC Trust receives value-for-money investigations into specific areas of BBC activity. " Am I the only one? My inquiry also relates to changes going on in Law Review offices in the US, as I have tussled with student editors who have grown hostile to hyphens in recent years. I like the little fellas.
Tuesday, September 10, 2013
According to Rolling Stone, Ohio resident Noam Lazebnik has sued Apple for breach of contract, claiming that "he and other Breaking Bad fans have been cheated by only receiving the first eight episodes of the show's final 16 episodes with their iTunes 'Season Pass.'" Rolling Stone explains:
The AMC drama's fifth season has aired in a split format of two eight-episode mini-runs. Lazebnik says he and other customers were promised "every episode in that season," which should include the final eight episodes (since those are technically still part of Season Five). According to the lawsuit, Apple owes fans either $14.99 (for the standard version) or $22.99 (for the high-def version).
Lazebnik is basing the suit on "breach of contract and violation of California's consumer protection laws."
"When a consumer buys a ticket to a football game, he does not have to leave at halftime," reads the claim. "When a consumer buys an opera ticket, he does not get kicked out at intermission." Apple representatives contacted by GigaOM did not immediately respond to a request for comment.
[Meredith R. Miller]
Friday, August 9, 2013
This year, my colleauges at the Valparaiso University Law School and I, with the help of our librarian, Jeese Bowman (pictured), are teaching with the aid of this LibGuide. The LibGuide contains all of the cases that we will use in our courses, plus links to Restatement, UCC and CISG sections, as well as tabs through which students can find links to excercises, past exams and model answers, study guides, blog posts and other information that might prove useful to our students.
The move to the LibGuide was motivated by a number of considerations. First, we have all used different casebooks and find a great deal to praise and admire in all of them. However, no single casebook can be perfect for each contracts professor's individual needs. I have a roster of cases that I think work best for the material I want to convey to my students. No single casebook includes all of the cases I want to use, and the casebook authors sometimes edit their cases slightly differently than how I would edit them. My colleagues and I edited the cases posted on the LibGuide to suit our teaching needs, and if we differ, we can always put up multiple versions.
Second, even if I could find the perfect casebook that had every single case I want to teach and all the relevant ancillary materials, I still could not justify the expense to my students. Casebook prices are simply too high, since we can deliver the same materials through the LibGuides. I should note that, because I ban laptops and other technology from my classroom, I do require that the students buy xeroxed copies of the edited cases. That will run them $10 a piece for the first seven-week minimester.
Yup! That's not a typo! We are teaching contracts in two, two-credit, seven-week "minimesters," a topic about which I will have a lot to say in future posts.
The LibGuide is still a work in progress. Each week, I send Jesse more materials to add to the LibGuide. This is another advantage of the LibGuide over print course materials. It is easily expanded; easily revised; easily updated.
The final advantage of the LibGuide is (dare I say it?) . . . LibGuides are fun. Ask any librarian! And believe you me, librarians know how to have fun. They are fun for the same reason that this blog is fun. You can follow links that interest you, and they often take you to unexpected and illuminating places. We hope that our LibGuide will grow and prosper and that it will provide a portal through which our students can wander cautiously, tentatively until [whoosh!] they fall down a rabbit hole and emerge in the Wonderland of contract law.
Thursday, February 28, 2013
On last night's Colbert Report, Stephen announced that he, a company man, was contractually obligated to provide a sponsor integration for Halls Mentho-Lyptus cough drops. He does so by changing the name of his intern Jay to "Halls Mentho-Lyptus with Triple-Soothing Action Presents Jay the Intern."
Ahh, the power of contracts.
Thursday, February 21, 2013
There's a theory among some of my foodie friends that, when it comes to food, bacon makes everything better. I'm considering a similar theory for teaching Contracts via hypos: when it comes to Contracts hypos, celebrities make everything better. Hypos work. Sure, they "taste" just fine using names like "Buyer," "Client," and "Sub-Contractor," and I use those names most of the time. But using names like "Jason Patric, you know, the guy from Lost Boys and Narc" often makes the hypo better, at least for the few people over 25 who remember those movies. So, in the interest of making hypos better via celebrity a.k.a. bacon, I bring you this story from TMZ (see, you don't actually have to go to sites of ill repute; you can count on me to go to them for you and only bring you the somewhat good, quasi-clean stuff).
As TMZ reports, actor Jason Patric is in a custody dispute with his ex-girlfriend, Danielle Schreiber. Upon their break-up in 2009, Patric allegedly agreed to compensate Schreiber for her troubles via donating his sperm instead of by paying her. Presumably, in exchange for Patric's promised sperm, Schreiber would not sue Patric for support payments. Simple enough (sort of). But wait, there's more! Patric allegedly would donate his sperm to Schreiber only if she also promised not to seek support from him for the child; Schreiber agreed. If this agreement actually was reached, Schreiber must have believed that Patric's sperm was so valuable that she was willing to forgo support payments for herself and for the child that would result. [Insert skepticism here.]
How does this relate to Contracts hypos? It works as a hypo for R.R. v. M.H., which many of us use to teach how a contract can be deemed unenforceable if it violates public policy. In R.R. v. M.H., the court must decide whether to enforce the surrogacy agreement between a fertile father, married to an infertile wife, and the surrogate mother, who also happens to be married, and who was inseminated with the fertile father's donor sperm. I won't go into the case in more detail here; instead, I would like to focus one part of the case has a direct parallel to the Jason Patric dispute.
In R.R. v. M.H., a state statute provided that the husband of a married woman inseminated with donor sperm was treated as the legal father of the child, with all of the associated benefits and obligations that fatherhood carried along with it. The statute was supposed to facilitate the common practice of women being inseminated by a (usually anonymous) sperm donor. Strictly applying the statute to the facts in R.R. v. M.H. would have led to an absurd result. Specifically, it would have meant that the legal father of the child born to the surrogate would have been the surrogate's husband, who had no real interest in the child. The court wisely argued its way around that literal application and ruled differently.
The Patric dispute also involves a law of unintended consequence much like that involved in R.R. v. M.H. A California law states as follows:
"(b) The donor of semen provided to a licensed physician and surgeon or to a licensed sperm bank for use in artificial insemination or in vitro fertilization of a woman other than the donor's wife is treated in law as if he were not the natural father of a child thereby conceived, unless otherwise agreed to in a writing signed by the donor and the woman prior to the conception of the child."
Applying this law to the Patric situation could, like the law in R.R. v. M.H., produce an absurd result. Let's paraphrase the statute with applicable facts in parentheses:
"The donor of semen (Patric) for use in artificial insemenation of a woman (Schreiber) other than the donor's (Patric's) wife (they weren't married) is treated in law as if he (Patric) were not the natural father unless otherwise agreed in a signed writing."
So, even though Patric and Schreiber had been romantically involved, the formalized donation and the couple's unmarried status could negate Patric's claims to custody. It is not clear whether the statute applies and, not being admitted in California, I'd rather not analyze it further. But it always surprises me how what seems like a one-in-a-million kind of case does, in fact, repeat itself. Eventually.
[Heidi R. Anderson]
Monday, February 18, 2013
Friday, February 15, 2013
CNN's Erin Burnett did some intrepid reporting and "went to book a cruise . . . on Carnival so we could look at the contract..." The contract apparently says that, even after 5 days of being stuck on a disabled ship with no electricity or plumbing, "you're out of luck":
Shute v. Carnival Cruise Lines reprise?
[Meredith R. Miller]
Tuesday, February 12, 2013
We had previously blogged about the demand letter that Donald Trump sent to Bill Maher. Maher dedicated a segment on his show to the dispute, taking aim at Trump's lawyer. Maher begins: “Donald Trump must learn two things: what a joke is and what a contract is.”
The segment is reminiscent of the Leonard v. Pepsico decision when Judge Wood takes on the task of explaining why the harrier jet commercial was "evidently done in jest." Here, Maher continues the humor in explaining why it was parody when challenged Trump to prove that he (Trump) was not born of an orangutan.
Here's the clip:
[Meredith R. Miller]
Monday, February 4, 2013
File this under "objective theory" example that even a law professor could not invent.
On national tv Bill Maher challenged Donald Trump to come forward with Trump's birth certificate to prove that Trump was in fact born from a human father (not an orangutan). Apparently Trump provided his birth certificate and then requested that Maher remit the $5 million. The discussion on Fox News: what did Donald Trump reasonably believe? Was this an offer to enter into a unilateral contract? Watch it here:
Who wins: Trump or Maher?
[Meredith R. Miller h/t Steven Crosley]
Wednesday, December 5, 2012
In a recent episode of 30 Rock ("Mazel Tov, Dummies!"), Liz Lemon (Tina Fey) gets married. Liz attempts to subvert the wedding industrial complex by tying the knot in her gym clothes at City Hall. She fights any desire to make it a "special day," leading her boyfriend/fiance to tell her "it is ok to be a human woman."
Interesting for our purposes: there is a sub-plot in the episode that is reminiscent of Leonard v. Pepsico. It begins at a little past 4 minutes into the episode. A creepy character played by John Hodgman comes to collect a woman (the character Jenna Maroney) that he says he earned by collecting $1,000,0000 Surge points. Surge is a soda and his claim to the money is based on a tv advertisement. The Surge points catalogue entitles Hodgman to the item or its equivalent value. Since it is "illegal to own someone," Jack Donaghy (Alec Baldwin) has to determine Jenna's value (and Jenna is not happy with the assessment of her worth).
Take a study/grading break:
[Meredith R. Miller - h/t 1L Matthew Gray]