ContractsProf Blog

CALL FOR PRESENTATION PROPOSALS

 

Institute for Law Teaching and Learning Summer Conference

“Teaching Today’s Law Students”

June 3-5, 2019

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 professors and administrators are reaching today’s law students.   With the ever-changing and heterogeneous nature of law students, this topic has taken on increased urgency for professors thinking about effective teaching strategies. 

 

The conference theme is intentionally broad and is designed to encompass a wide variety of topics – neuroscientific approaches to effective teaching; generational research about current law students; effective use of technology in the classroom; teaching first-generation college students; classroom behavior in the current political climate; academic approaches to less prepared students; fostering qualities such as growth mindset, resilience, and emotional intelligence in students; or techniques for providing effective formative feedback to students.

 

Accordingly, the Institute invites proposals for 60-minute workshopsconsistent with a broad interpretation of the conference theme. Each workshop should include materials that participants can use during the workshop and when they return to their campuses. Presenters should model effective teaching methods by actively engaging the workshop participants.  The Institute Co-Directors are glad to work with anyone who would like advice on designing their presentations to be interactive.

 

To be considered for the conference, proposals should be one page (maximum), single-spaced, and include the following information:

• The title of the workshop;
• The name, address, telephone number, and email address of the presenter(s); and
• A summary of the contents of the workshop, including its goals and methods; and
• A description of the techniques the presenter will use to engage workshop participants and make the workshop interactive.

 

The proposal deadline is February 15, 2019.  Submit proposals via email to Professor Emily Grant, Co-Director, Institute for Law Teaching and Learning, at emily.grant@washburn.edu.

Twitter isn't required to include an arbitration clause

In a recent case out of the District of Arizona, Brittain v. Twitter Inc., No. CV-18-01714-PHX-DG (behind paywall), a court finds Twitter's terms enforceable as neither illusory nor unconscionable. The plaintiffs admitted that they agreed to Twitter's terms of service, but they argued the terms were illusory and unconscionable.

The illusory argument depended on the assertion that Twitter could unilaterally modify the terms at its discretion. But, unlike other cases where the terms were found to be illusory, Twitter did not try to retroactively modify the terms, and it mutually bound itself to the forum selection clause. 

Brittain's unconscionability argument weirdly revolved around the fact that Twitter's terms don't contain an arbitration provision. I found this curious because I've read lots of cases where people want to get out of arbitration clauses, so complaining that the lack of one means the terms are unconscionable isn't an argument I quite follow. Neither did the court, which found that Twitter was not required to include an arbitration clause in its terms and that the terms weren't otherwise unconscionable. 

This decision is behind a paywall, but this case has received some news coverage because of who the plaintiff is. 

 

The Two ships Peerless, the Two Players Brooks, and “The Deal that Never Really Was”

Dear readers:

The below guest blog was shared with us by Oren Gross, the Irving Younger Professor of Law with the University of Minnesota Law School:

Who amongst us has not taught the 1864 case of Raffles v. Wichelhaus, a.k.a. the two ships Peerless? The story of the ships (by some accounts there have been up to eleven ships bearing the same name!) has tantalized and captured the imagination of numerous generations of students learning about meeting of the minds.

You can imagine my delight when, taking a much-needed break from grading exams, I came across a modern version of the story involving three NBA teams and two players named Brooks.

The Washington Wizards, it seems, wanted to strengthen their roster by adding the Phoenix Suns forward Trevor Ariza. For its part, Phoenix was interested in Memphis Grizzlies players and the Grizzlies – in Wizards players. And so, the Wizards’ general-manager concocted a three-team trade and served as the go-between the Suns and the Grizzlies. As part of that trade, the Suns were to get two players from Memphis, namely Selden and Brooks.

Simple enough. Or so it seems. However, as Chris Herrington reported in the Daily Memphian on December 15, 2018, the deal fell apart or, in an insight worthy of contracts’ scholars, “maybe never quite was.”

The problem is that Memphis currently has not one, but two, players on its roster whose last name is Brooks. And whereas the Suns thought they were getting Dillon Brooks, the Grizzlies intended to trade MarShon Brooks. Thus, while “two Grizzlies sources confirmed to The Daily Memphian that it was MarShon Brooks, not Dillon Brooks in the deal. Media in Phoenix, however, insisted it was Dillon, not MarShon.”

As the two teams negotiated through the Wizards as the go-between, the miscommunication as to the identity of the player actually to be traded was not revealed until news of the deal leaked to the media.

The outcome? The three-team deal collapsed. As Herrington put it “the deal that never really was was nixed.”

The Periodic Table of Top Ten SSRN Contracts & Commercial Law Downloads (December 18, 2018)

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 19 Oct 2018 - 18 Dec 2018

Rank	Paper	Downloads
1.	Regulating Blockchain: Techno-Social and Legal Challenges - An Introduction Philipp Hacker, Ioannis Lianos, Georgios Dimitropoulos and Stefan Eich Humboldt University of Berlin, University College London - Faculty of Laws, Hamad Bin Khalifa University and Princeton Society of Fellows	148
2.	The Value of Choice and the Justice of Contract Hanoch Dagan Tel Aviv University - Buchmann Faculty of Law	78
3.	Digitalisation of Payment Services Fernando Zunzunegui Universidad Carlos III de Madrid - Faculty of Social Sciences and Law	74
4.	The Story of the Dubai International Financial Centre Courts: A Retrospective Jayanth K. Krishnan Indiana University Maurer School of Law	62
5.	Addressing Infringement: Developments in Content Regulation in the US and the DNS Annemarie Bridy University of Idaho	61
6.	Contract Governance in Small World Networks: The Case of the Maghribi Traders Lisa Bernstein University of Chicago - Law School	58
7.	Legal Boundaries of Blockchain Technologies: Smart Contracts as Self-Help? Florian Möslein Universität Marburg (Institut für Handels- und Wirtschaftsrecht)	57
8.	Substituted Performance in Contract Law: An Analysis Badrinath Srinivasan Independent	53
9.	The Middleman's Damages Revisited Victor P. Goldberg Columbia Law School	52
10.	Arbitrators and the Interpretation of Contacts Alan Scott Rau University of Texas at Austin - School of Law	48

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 19 Oct 2018 - 18 Dec 2018

Rank	Paper	Downloads
1.	The Value of Choice and the Justice of Contract Hanoch Dagan Tel Aviv University - Buchmann Faculty of Law	78
2.	Transaction Costs of Blockchain Smart Contracts Jakub J. Szczerbowski SWPS University of Social Sciences and Humanities	63
3.	Addressing Infringement: Developments in Content Regulation in the US and the DNS Annemarie Bridy University of Idaho	61
4.	Contract Governance in Small World Networks: The Case of the Maghribi Traders Lisa Bernstein University of Chicago - Law School	58
5.	Legal Boundaries of Blockchain Technologies: Smart Contracts as Self-Help? Florian Möslein Universität Marburg (Institut für Handels- und Wirtschaftsrecht)	57
6.	Substituted Performance in Contract Law: An Analysis Badrinath Srinivasan Independent	53
7.	The Middleman's Damages Revisited Victor P. Goldberg Columbia Law	52
8.	Arbitrators and the Interpretation of Contacts Alan Scott Rau University of Texas at Austin - School of Law	48
9.	Quantifying Damages in Cases of Advantageous Breach: The Curious Case of McDonald’s Milkshakes Mark Giancaspro University of Adelaide - School of Law	38
10.	Comments on the (Indian) Arbitration & Conciliation (Amendment) Bill, 2018 Badrinath Srinivasan Independent	38

A past consideration case reminds us that being recognized for your past hard work isn't good for your breach of contract claim

I don't know about everyone else but my casebook teaches past consideration using very old cases. Here's past consideration raised as an issue with a recent case out of the Southern District of California, Wright v. Old Gringo Inc., Case No. 17-cv-1996-BAS-MSB (behind paywall). 

The case is really interesting, because the court acknowledged that the complaint had proper consideration allegations: ownership interest, salary, and performance bonuses in exchange for providing "expertise and services." The problem came from the deposition testimony, all of which seemed to establish that in fact the ownership interest had been provided as a reward for previous work. The plaintiff herself testified that the ownership interest was effective even if she immediately quit the job, indicating it wasn't in exchange for future services. Plaintiff's friends and relatives provided similar testimony, that the ownership interest was given "to show . . . appreciation" and "for . . . recognition of her hard work." There was no evidence presented that the ownership interest was offered on the condition of future work in exchange. For that reason, the court granted summary judgment for failure of consideration. 

The plaintiff's remaining claims were permitted to go forward, including promissory estoppel and tort claims. Those claims (as I remind my students!) don't require consideration. 

I find this case really interesting because I'm sure the plaintiff's friends only thought they were helping her with their testimony. This is the kind of thing that I think makes instinctive sense to non-lawyers: the plaintiff did something awesome and they recognized it by giving her an amazing gift. But lawyers know that consideration doctrine makes that a bad thing, not a good one. 

(The decision also contains a statute of limitations and damages discussion.)

When setting a noncompete time period, "not less than five years" = five years

A recent case out of Illinois, Pam's Academy of Dance/Forte Arts Center v. Marik, Appeal No. 3-17-0803 (behind paywall but you can listen to the oral argument here), highlights the weirdness of just throwing extra words into a contract without thinking through what they really mean. 

The dispute concerned a noncompete between a dance studio and Marik, one of its employees. The covenant not to compete stated that Marik wouldn't engage in any similar business "for a period of not less than five (5) years," and wouldn't solicit any teachers or students "for a period of not less than three (3) years." The parties were arguing over whether this language meant "five years" and "three years," or whether it meant that the noncompete could extend past five and three years. 

In a vacuum, the statement "not less than five years" reads as "at least five years" to me, meaning that the time period could last longer. But as a matter of contract interpretation, that makes no sense. Could the noncompete theoretically go on for 50 years? After all, that would be a period "not less than" five. On the other hand, as the defendants argued, interpreting the time periods as five and three years would render the "not less than" language as "mere surplusage" -- an interpretation courts usually strive to avoid. 

The court noted that contract interpretation's goal is to discern the intent of the parties. "Not less than" has been interpreted by Illinois courts in a variety of ways, but never in the context of a noncompete. However, many out-of-state courts had come to the conclusion that, in a covenant not to compete, "not less than five years" should be construed as meaning five years. This would prevent the employer from arguing that the noncompete was violated six years later. Indeed, the court thought that arguing that it meant six years would amount to bad faith. 

Whether the five- and three-year periods were reasonable was a fact-based inquiry that had to be determined by looking at the totality of the circumstances. 

This is a situation where I'm sure the "not less than five years" language sounded fancy and official but it was truly pointless. I think the employee probably understood it to be five years and three years (to the extent that the employee read and understood the agreement), and to the extent the employer understood the language to mean otherwise and entitle it to set an indefinite time period, I'm with the court that that's an unreasonable interpretation. 

You and your corporate entities: often a complex story with repercussions

I got really excited when I saw this case because it's always nice to have a recent parol evidence case to look at, and this one involves movies!

It's a recent case out of Mississippi, Rosenfelt v. Mississippi Development Authority, No. 2017-CA-01120-SCT (you can listen to the oral arguments here). The MDA had communications with Rosenfelt regarding his movie studios' attempt to make movies in Mississippi, eventually guaranteeing a loan through a term sheet signed by the MDA and by Rosenfelt on behalf of his two movie studios. When Rosenfelt wanted to make another movie and applied for another loan under the terms of the agreement, the MDA turned down the request. Rosenfelt then sued for specific performance and damages. Rosenfelt initially triumphed on a motion for partial summary judgment but then, during the specific performance debate in the case, the MDA filed a summary judgment motion challenging Rosenfelt's standing, which resulted in dismissal of Rosenfelt's complaint. 

Rosenfelt appealed, alleging that there was an agreement between him personally and the MDA. However, the court noted that all communications from the MDA were directed explicitly to Rosenfelt as president of the relevant movie studio. The court's decision came down to contract interpretation: All of the written documents in the case unambiguously referred to Rosenfelt in his official corporate capacity or were signed by Rosenfelt in his official corporate capacity. Given the lack of ambiguity on the face of the documents, the court refused to consider parol evidence as to whether Rosenfelt was personally a party to any of the agreements.  Because all of Rosenfelt's allegations concerned his personal agreement with the MDA, the court dismissed the suit. 

This case serves as a reminder that, once you have set up corporate entities, you need to be careful to remember how those corporate entities impact not just your legal liabilities but also your legal rights. 

Taylor Swift and Contract Law

Sorry for being absent lately. Blame exam season! So this is slightly old news but I plan to bring it up in my Entertainment Law class in the spring, so I was doing a sprint through the news reporting on it: Taylor Swift and her new contract. 

The (Sporadically) Weekly Top Ten SSRN Contracts & Commercial Law Downloads (November 21, 2018)

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 22 Sep 2018 - 21 Nov 2018

Rank	Paper	Downloads
1.	Sovereign Debt Restructuring and U.S. Executive Power (Reestructuración de Deuda Soberana y el Poder Ejecutivo Norteamericano) Lee C. Buchheit and G. Mitu Gulati Cleary Gottlieb Steen & Hamilton LLP - New York Office and Duke University School of Law Date Posted: 03 Oct 2018 Last Revised: 01 Nov 2018	587
2.	Requiem for a Paradox: The Dubious Rise and Inevitable Fall of Hipster Antitrust Joshua D. Wright, Elyse Dorsey, Jan Rybnicek and Jonathan Klick George Mason University - Antonin Scalia Law School, Faculty, Government of the United States of America - Federal Trade Commission, Freshfields Bruckhaus Deringer LLP and University of Pennsylvania Law School	461
3.	'Surrounding Circumstances' in Contractual Interpretation: Where are we Now? John Eldridge The University of Sydney Law School	188
4.	Big Data is Not Big Oil: The Role of Analogy in the Law of New Technologies Lauren Henry Scholz Florida State University - College of Law	110
5.	Regulating Blockchain: Techno-Social and Legal Challenges - An Introduction Philipp Hacker, Ioannis Lianos, Georgios Dimitropoulos and Stefan Eich Humboldt University of Berlin, University College London - Faculty of Laws, Hamad Bin Khalifa University and Princeton Society of Fellows	102
6.	The Structure of Remedial Law Stephen Smith McGill University - Faculty of Law	93
7.	The Arbitration-Litigation Paradox Pamela Bookman Temple University Beasley School of Law	80
8.	The Value of Choice and the Justice of Contract Hanoch Dagan Tel Aviv University - Buchmann Faculty of Law	68
9.	Here Lions Roam: CISG As the Measure of a Claim’s Value and Validity and a Debtor’s Dischargeability Amir Shachmurove Troutman Sanders LLP	66
10.	Art 6:102: Implied Terms Helge Dedek McGill University - Faculty of Law	59

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 22 Sep 2018 - 21 Nov 2018

Rank	Paper	Downloads
1.	'Surrounding Circumstances' in Contractual Interpretation: Where are we Now? John Eldridge The University of Sydney Law School	188
2.	Fusion and Theories of Equity in Common Law Systems P G Turner University of Cambridge - St. Catharine's College	108
3.	The Arbitration-Litigation Paradox Pamela Bookman Temple University Beasley School of Law	80
4.	The Value of Choice and the Justice of Contract Hanoch Dagan Tel Aviv University - Buchmann Faculty of Law	68
5.	Art 6:102: Implied Terms Helge Dedek McGill University - Faculty of Law	59
6.	Addressing Infringement: Developments in Content Regulation in the US and the DNS Annemarie Bridy University of Idaho	56
7.	The Modernization of European Consumer Law: A Pig in a Poke? Marco Loos University of Amsterdam - Centre for the Study of European Contract Law (CSECL)	51
8.	Substituted Performance in Contract Law: An Analysis Badrinath Srinivasan Independent	49
9.	Transaction Costs of Blockchain Smart Contracts Jakub J. Szczerbowski SWPS University of Social Sciences and Humanities	47
10.	Revisiting Unconscionability: Reciprocity and Justice C. Scott Pryor Campbell University - Norman Adrian Wiggins School of Law	41

 

The vital difference between a promise and a condition

I always tell my students that if you want people to promise to do something, you'd better make sure you don't phrase it as a condition in your contract, and a recent case out of the Middle District of Pennsylvania, Allen v. SWEPI, LP, No. 4:18-CV-01179 (behind paywall), carries just that lesson. 

The contract was for the purposes of exploring for oil and gas on the Allens' land and read that the agreement was "made on the condition that within sixty (60) days from the Effective Date of this lease, [the defendant] shall pay to the [Allens] the sum of Two Thousand Dollars ($2000.00) per acre for the first year." The defendant never paid the Allens this sum, and the Allens sued. However, the defendant argued that this was nothing but an option contract. It had the right to rent the land for oil and gas exploration if it paid the required sum. However, it was not required to pay that sum. Instead, the payment was a condition that had to be fulfilled before the contract would come into operation. The court agreed and dismissed the Allens' breach of contract causes of action. 

The court then also dismissed the Allens' promissory estoppel claim, because it found that there had been a valid and enforceable contract between the parties -- it was just an option contract that the defendant chose not to exercise. 

The Allens seem to have thought they had rented this land to the defendant. I think that what they wanted to accomplish (or thought they were getting) with the quoted clause was to make sure they were paid within 60 days. However, in phrasing it as a condition, what they got was no commitment from the defendant at all. 

No Compete Clauses in Bilateral Contracts (No Unilaterality)

In a recent case, employment agency Robert Half International, Inc. (“Robert Half”) brought suit against a former employee, Nicholas Billingham, and Billingham’s current employer, Beacon Hill Staffing (a competitor of Robert Half) for actual and anticipatory breach of contract. Billingham’s contract with Robert Half included the agreement that Billingham would not compete with or solicit clients from Robert Half if leaving the company.  Nonetheless, Billingham accepted employment with Robert Half’s direct competitor where he stated that he intended to “add to my team quickly and take market share from Beacon Hill’s competitors.”  Robert Half brought suit.  Billingham and Beacon Hill moved to dismiss the complaint for failure to state a claim.

Billingham first defended himself arguing that unilateral contracts cannot be anticipatorily breached since they technically seen do not arise until the actual performance has been rendered.  He argued that his contract was unilateral since his remaining obligations were not yet due.  (Strangely, he did so although he had already terminated the relationship himself.)  The court corrected him on this point, noting that a unilateral contract is one that “occurs when there is only one promisor and the other party accepts, not by mutual promise, but by actual performance or forbearance.”  (Quoting Williston § 1:17).  To help my students distinguish accepting by beginning of performance in bilateral contracts from offers for unilateral contracts, which is sometimes confusing for them, I tell them that they must scrutinize what type of acceptance is sought by the offeror: if onlythe actual performance, then there is a truly an offer for a unilateral contract. If this is not clearly the case, there is an offer for a “regular” bilateral contract.  In this instance, the contract between Billingham and Plaintiff was bilateral, not unilateral.  Robert Half promised to employ Billingham in exchange for Billingham's promise to abide by the restrictive covenants in the Agreement.  Billingham's promise included the prospectiveagreement that he would refrain from certain activities upon departing the company.  Billingham was thus not correct that the agreement “became unilateral” after his resignation.  That is a legal impossibility.  His obligations to forbear from the non-competitive agreements became due the moment he left Robert Half.  As with many other contractual issues, unilaterality and bilaterality are examined at the point of contract formation, not by looking at what actually happened thereafter.

The court thus found that plaintiffs had sufficiently pled a claim of anticipatory, if not actual, breach of contract. 

Plaintiffs also stated a claim for unjust enrichment. Defendants argued that Robert Half has not actually “conferred” any benefits on Beacon Hill and would thus not be liable for compensation under that theory.  The court noted that this is wrong.  Beacon Hill received a “benefit” from Billingham's employment through the revenue that he generates, his professional training, his relationships with customers and candidates, and his industry knowledge.  Beacon Hill's retention of these benefits is “unjust” as they are benefits that Billingham is barred, by the agreement, from conferring on Beacon Hill.

The case is Robert Half International Inc. v. Billingham, 317 F.Supp.3d 379, 385 (D.D.C., 2018).

The (Quasi) Weekly Top Ten SSRN Contracts & Commercial Law Downloads (November 10, 2018)

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 11 Sep 2018 - 10 Nov 2018

Rank	Paper	Downloads
1.	Sovereign Debt Restructuring and U.S. Executive Power (Reestructuración de Deuda Soberana y el Poder Ejecutivo Norteamericano) Lee C. Buchheit and G. Mitu Gulati Cleary Gottlieb Steen & Hamilton LLP - New York Office and Duke University School of Law	579
2.	Requiem for a Paradox: The Dubious Rise and Inevitable Fall of Hipster Antitrust Joshua D. Wright, Elyse Dorsey, Jan Rybnicek and Jonathan Klick George Mason University - Antonin Scalia Law School, Faculty, Government of the United States of America - Federal Trade Commission, Freshfields Bruckhaus Deringer LLP and University of Pennsylvania Law School	444
3.	The New Law of Penalties: Mapping the Terrain John Eldridge The University of Sydney Law School	246
4.	The Private Law Critique of International Investment Law Julian Arato Brooklyn Law School Date Posted: 13 Sep 2018 Last Revised: 21 Oct 2018	227
5.	'Surrounding Circumstances' in Contractual Interpretation: Where are we Now? John Eldridge The University of Sydney Law School Date Posted: 27 Sep 2018 Last Revised: 24 Oct 2018	181
6.	Reputation Failure: Market Discipline and Its Limits Yonathan A. Arbel University of Alabama - School of Law	105
7.	Noncompetes as Tax Evasion Rebecca Morrow Wake Forest University - School of Law	92
8.	Big Data Is Not Big Oil: On Analogical Reasoning, New Technologies, and Law Lauren Henry Scholz Florida State University - College of Law	89
9.	The Structure of Remedial Law Stephen Smith McGill University - Faculty of Law	82
10.	The Enduring Distinction Between Business Entities and Security Interests Ofer Eldar and Andrew Verstein Duke University School of Law and Wake Forest University School of Law	79

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 11 Sep 2018 - 10 Nov 2018

Rank	Paper	Downloads
1.	The New Law of Penalties: Mapping the Terrain John Eldridge The University of Sydney Law School	246
2.	'Surrounding Circumstances' in Contractual Interpretation: Where are we Now? John Eldridge The University of Sydney Law School	181
3.	Reputation Failure: Market Discipline and Its Limits Yonathan A. Arbel University of Alabama - School of Law	105
4.	Fusion and Theories of Equity in Common Law Systems P G Turner University of Cambridge - St. Catharine's College	78
5.	The Arbitration-Litigation Paradox Pamela Bookman Temple University Beasley School of Law	75
6.	The Value of Choice and the Justice of Contract Hanoch Dagan Tel Aviv University - Buchmann Faculty of Law	57
7.	How Did We End Up in a World Where Browsewraps are Enforced Even When They Waive All Consumer Rights? Cheryl B. Preston Brigham Young University - J. Reuben Clark Law School	54
8.	Addressing Infringement: Developments in Content Regulation in the US and the DNS Annemarie Bridy University of Idaho	50
9.	Introduction to the Research Handbook on Fiduciary Law D. Gordon Smith and Andrew S. Gold Brigham Young University - J. Reuben Clark Law School and Brooklyn Law School	38
10.	Transaction Costs of Blockchain Smart Contracts Jakub J. Szczerbowski SWPS University of Social Sciences and Humanities	38

Not remembering signing your arbitration agreement doesn't mean you didn't sign it

Another day, another arbitration compelled, this time in a recent case out of the Northern District of Illinois, Nitka v. ERJ Dining IV, LLC, Case No. 18 cv 3279. The plaintiff sued the defendant for sexual harassment, sex discrimination, and assault and battery. The defendant countered that the plaintiff had signed an agreement to arbitrate disputes relating to her employment, which these were. The plaintiff stated she had no memory of signing the arbitration agreement, but the defendant's Vice President of People and Development testified that it required new employees to sign such agreements before entering employment and maintained them in the usual course of business. The plaintiff's arbitration agreement was located in her personnel file. Furthermore, the plaintiff had apparently affirmatively indicated on an electronic form that she had signed the agreement. 

The plaintiff then argued that she had been a minor at the time of signing the agreement, but the court pointed out that she ratified the agreement by continuing to work for the defendant after her eighteenth birthday. 

I believe that the plaintiff did not remember signing the arbitration agreement. To be honest, I believe that, even if she remembered, she probably had no idea what it really was. She was a minor trying to get a job at a Chili's. I'm sure she signed what she was told to sign and clicked the electronic check-boxes she was told to click -- exactly the way the vast majority of us do when getting a new job. 

Mirror image rule reminder

Here's one for exam review. 

A recent case out of the District of Oregon, Reed v. Ezelle Investment Properties Inc., Case No. 3:17-cv-01364-YY, contains an application of the mirror image rule. 

The parties in the case were embroiled in a copyright infringement dispute. They had settlement discussions as follows: 

• Reed's counsel sent Ezelle a cease and desist letter that included a settlement agreement proposing to settle the matter for $5,000. 
• Negotiations followed. 
• Ezelle's counsel sent Reed's counsel a thousand dollar check (stating that it was not a settlement offer, although that doesn't seem important to the analysis here). 
• Reed's counsel responded saying that Reed accepted the thousand dollar offer and sending Ezelle's counsel a new proposed settlement agreement. 
• Ezelle's counsel crossed out the proposed agreement's confidentiality clause and sent it back. 
• Reed's counsel said the confidentiality clause was non-negotiable. 
• There were further negotiations that fell apart, leading eventually to this lawsuit. 

Ezelle argued that the parties had settled the case through the above series of events, but the court found there was never a binding settlement because Ezelle never accepted the settlement agreement. Under the mirror image rule, when Ezelle's counsel crossed out the confidentiality clause, that operated as a counteroffer that Reed would have needed to accept. Reed never did. Rather, Reed informed Ezelle that the proposed modification of the settlement agreement was unacceptable. Therefore, there was no binding settlement agreement between the parties. 

Ezelle argued that the confidentiality clause should be classified as immaterial or unconscionable, so that the settlement agreement should be enforced just with the confidentiality clause struck, as Ezelle had desired. However, the court found no reason to strike the confidentiality clause. 

The court went on to find copyright infringement and awarded $1500 in statutory damages, as well as attorneys' fees and costs. 

The fights over arbitration clauses continue

Alison Frankel has a write-up of A-1 Premium Acceptance, Inc v. Hunter, No. SC96672, a case out of Missouri that refuses to substitute an arbitrator when the arbitrator named in the arbitration clause is no longer available (in this case, the specified National Arbitration Forum no longer provides arbitration services on consumer loans like in the contract at issue here). This is yet another court weighing in on a split that's developed: Can arbitration be compelled when the arbitration clause specified a now-unavailable arbitrator, in which case the court substitutes an arbitrator, keeping to the pro-arbitration nature of the contract? Or should courts refuse to rewrite such contracts to compel arbitration in a forum not originally agreed to, rather allowing judicial proceedings to proceed? 

Myanna Dellinger has already written about this issue in a context of another case. Given how many arbitration clauses out there might still be in effect that specify a now-defunct arbitrator, this doesn't seem like an issue that's going away. Frankel's article concludes by quoting A-1's attorney as indicating that it will petition the Supreme Court to resolve the dispute. 

(h/t to Eric Chiappinelli for sending this along to us!)

In honor of the Red Sox, some baseball contracts

Hello! I was away at a conference last week and then the Red Sox* decided to win the World Series, which threw off all productivity for a while. As I ease back into blogging, I thought I'd link you to this piece from Business Insider, analyzing some of the terms set forth in the 2011-era version of Major League Baseball's uniform contract. I find my students always love to look at real-life contracts, and this is a nice point in the year to do it, as it's a nice way to demonstrate that they are now able to (or should be able to!) understand more of the contract than they might have on the first day of class. 

Of course, I always try to impress upon my students that contracts can be negotiated, so here's a list of some more unusual contract clauses baseball players were successful in getting teams to agree to. 

*(not the Red Sex)

Attorneys cannot use anti-SLAPP statutes to strike client complaints

Is an attorney’s work in underlying lawsuits on behalf of clients protected speech under the United States or similar state constitutional standards?  No, held a California Appellate Court recently.

The California anti-SLAPP provisions state that “[a] cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.  An act in furtherance of a person's right of petition or free speech under the United States or California Constitution in connection with a public issue includes ... any written or oral statement or writing made in connection with an issue under consideration or review by a ... judicial body....” 

A client alleged that his attorney misrepresented his labor law expertize when negotiating the retention agreement between the two and that the attorney conducted settlement negotiations with the opposing party in order to drive up fees.  When the attorney sued his client to collect his fees, the client cross-complained for fraud and breach of contract.  The attorney then moved to strike the cross-complaint under the California anti-SLAPP statute, Code of Civil Procedure § 425.16. 

The court found that merely because attorneys occur as part of litigation – the client’slitigation – a malpractice claim such as this is not subject to anti-SLAPP.  Said the court, “[i]t is the principal thrust or gravamen of the plaintiff's cause of actionthat determines whether the anti-SLAPP statute applies, and when the allegations referring to arguably protected activity are only incidental to a cause of action based essentially on non-protected activity, collateral allusions to protected activity should not subject the cause of action to the anti-SLAPP statute.”

“Although attorney retention negotiations may in a sense be ‘connected’ with judicial proceedings involving the client, they in no way relate to the substance of an issue under review in the proceedings or further the attorney's petition or free speech rights in them.  If they did, then every communication between an attorney and a client who is or may become involved in judicial proceedings would constitute an exercise of the attorney's petition and free speech rights, and every lawsuit for malpractice would be required to undergo a second-prong anti-SLAPP analysis.  No principle or authority supports such a proposition.

The case is Mostafavi Law Group v. Ershadi, 2018 WL 4690887, (Cal.App. 2 Dist., 2018)

The (Not Quite) Weekly Top Ten SSRN Contracts & Commercial Law Downloads (October 19, 2018)

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 20 Aug 2018 - 19 Oct 2018

Rank	Paper	Downloads
1.	Graying of U.S. Bankruptcy: Fallout from Life in a Risk Society Deborah Thorne, Pamela Foohey, Robert M. Lawless and Katherine M. Porter University of Idaho, Indiana University Maurer School of Law, University of Illinois College of Law and University of California - Irvine School of Law	3,240
2.	Sovereign Debt Restructuring and U.S. Executive Power (Reestructuración de Deuda Soberana y el Poder Ejecutivo Norteamericano) Lee C. Buchheit and G. Mitu Gulati Cleary Gottlieb Steen & Hamilton LLP - New York Office and Duke University School of Law	551
3.	The SAFE, the KISS, and the Note: A Survey of Startup Seed Financing Contracts John F. Coyle and Joseph M. Green University of North Carolina School of Law and Thomson Reuters Practical Law	388
4.	Requiem for a Paradox: The Dubious Rise and Inevitable Fall of Hipster Antitrust Joshua D. Wright, Elyse Dorsey, Jan Rybnicek and Jonathan Klick George Mason University - Antonin Scalia Law School, Faculty, Government of the United States of America - Federal Trade Commission, Freshfields Bruckhaus Deringer LLP and University of Pennsylvania Law School	386
5.	Demystifying Technology. Do Smart Contracts Require a New Legal Framework? Regulatory Fragmentation, Self-Regulation, Public Regulation. Marco Dell'Erba New York University School of Law	284
6.	The New Law of Penalties: Mapping the Terrain John Eldridge The University of Sydney Law School	234
7.	The Private Law Critique of International Investment Law Julian Arato Brooklyn Law School	185
8.	Poor Consumer(s) Law: The Case of High-Cost Credit and Payday Loans Shmuel I. Becher, Yuval Feldman and Orly Lobel Victoria University of Wellington, Bar-Ilan University - Faculty of Law and University of San Diego School of Law	148
9.	'Surrounding Circumstances' in Contractual Interpretation: Where are we Now? John Eldridge The University of Sydney Law School	148
10.	The Impact of the Hague Principles on Choice of Law in International Commercial Contracts Michael Douglas and Nicholas Loadsman The University of Western Australia Law School and Clayton Utz	117

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 20 Aug 2018 - 19 Oct 2018

Rank	Paper	Downloads
1.	The SAFE, the KISS, and the Note: A Survey of Startup Seed Financing Contracts John F. Coyle and Joseph M. Green University of North Carolina School of Law and Thomson Reuters Practical Law	388
2.	Demystifying Technology. Do Smart Contracts Require a New Legal Framework? Regulatory Fragmentation, Self-Regulation, Public Regulation. Marco Dell'Erba New York University School of Law	284
3.	The New Law of Penalties: Mapping the Terrain John Eldridge The University of Sydney Law School	234
4.	'Surrounding Circumstances' in Contractual Interpretation: Where are we Now? John Eldridge The University of Sydney Law School	148
5.	Arbitration Nation: Data from Four Providers Andrea Chandrasekher and David Horton University of California, Davis - School of Law and University of California, Davis - School of Law	124
6.	Implementation Negotiation: A Transactional Skill that Builds on and Transforms Classic Negotiation Theory Tina L. Stark Independent	119
7.	The Impact of the Hague Principles on Choice of Law in International Commercial Contracts Michael Douglas and Nicholas Loadsman The University of Western Australia Law School and Clayton Utz	117
8.	Split Derivatives: Inside the World's Most Misunderstood Contract Dan Awrey University of Oxford, Faculty of Law	106
9.	Transactional Skills Education: Mandated by the ABA Standards Tina L. Stark Independent	105
10.	Reputation Failure: Market Discipline and Its Limits Yonathan A. Arbel University of Alabama - School of Law	70

 

Contracts quintessential first-year course: Law school professor makes his case

From WMU-Cooley Distinguished Professor Emeritus Otto Stockmeyer:

In my view, Contracts is the quintessential first-year course. It presents an excellent introduction to the common law and legal reasoning. The course is foundational to several upper-level courses, and the best predictor of law school success. Lawyers have reported that they use Contracts in their practice almost twice as much as any other law school subject.

Although traditionalists begin the course with offer and acceptance, there are both pedagogical and practical reasons to start with remedies. Studying remedies is not easy going for beginning students, who tend to hate working with numbers. But they tell me that they like difficult topics placed early in the term so they have longer to process the material.

The most important reason to start with remedies is the opportunity to begin the first day’s class with Hawkins v. McGee.

Here are my Top Ten reasons why:

10. The opinion immediately demonstrates to beginning students their need for a law dictionary. The first paragraph alone contains five legal terms.

9. The opinion shows how judges sometimes load their opinions with empty overstatements, such as “clearly” and “obviously” when the facts were neither.

8. The opinion demonstrates the process of analysis that courts employ when direct legal authority is lacking.

7. The opinion allows an early exploration of some distinctions between tort (medical malpractice) and contract (promise of 100 percent success) in a context readily understood by beginning students.

6. The opinion revolves around two of the central themes in Contract law: the objective theory of assent and the expectation objective of contract remedies.

5. The opinion is an excellent introduction to remedies and the difference between tort and contract damages.

4. The opinion illustrates that general principles are easier to state than to apply.

3. The opinion has more poignancy than the commercial disputes that will follow.

2. The case has a rich subsequent history that can be explored as time permits.

1. Three words: The Paper Chase. Many students will have read the book or rented the movie. They expect Contracts to begin with a study of the “hairy hand” case. Disappoint them the first day and they may question their choice of law schools.

The Paper Chase
The movie version of this law school classic contains two scenes that I’ve used in my class. The first is Professor Kingsfield’s ‘skull full of mush’ explanation of why law schools use the Socratic method. That needs to be addressed the first day.

The second is Kingsfield’s encounter with a student, Mr. Hart. After recapping the facts of Hawkins v. McGee, Kingsfield asks, ‘Now Mr. Hart, what sort of damages do you think the doctor should pay?’

I then would call on several students and ask whether Mr. Hart gave the right answer (no, he didn’t). The ice having been broken, another term of Contracts has been successfully launched.

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Read the full text of Professor Stockmeyer’s paper on the Social Science Research Network.

Dish Network and Univision fight over who breached

As the Hollywood Reporter reports, the license agreement expired between Dish Network and Univision more than three months ago, and the parties are fighting it out in federal court, pointing fingers at which of them (if any, I suppose) breached the license agreement, and whether there are any additional IP claims in play. It's a high-profile case with a real impact for Hispanic viewers, who probably just would like to get Univision back on Dish. Given the litigation, that might take a while.