ContractsProf Blog

Editor: Jeremy Telman
Oklahoma City University
School of Law

Friday, October 15, 2021

Weekend Frivolity: Steve Vladeck Meme Caption Contest

Since the very idea for weekend frivolity came from Steve Vladeck and Bobby Chesney's wonderful National Security Law podcast, it seems highly appropriate to celebrate Steve's memification in this forum.  Please enter your proposed captions to the Steve Vladeck meme in the comments.  Thoughtful people be warned: the comments page refreshes frequently and will delete your comments.  Draft in Word and then cut and paste before posting!

If we get enough entries (i.e., more than one), we can do a Twitter poll and the winner will get bragging rights.

Here's the meme:

Vladeck Meme

May the best caption win!

October 15, 2021 in Miscellaneous | Permalink | Comments (1)

Wednesday, October 13, 2021

(Belated) Tuesday Top Ten - Contracts & Commercial Law Downloads for October 13, 2021

We may be a day late, but we're certainly not a dollar short, with appearances by formalism, bargaining, corporate governance, and even property in this week's SSRN top downloads! Take a look for yourself:

Top-10

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 14 Aug 2021 - 13 Oct 2021
Rank Paper Downloads
1.

Discharging the Discharge for Value Defense

Columbia University - School of Law
622
2.

The Property Law of Tokens

Widener University - Commonwealth Law School and University of Iowa - College of Law
282
3.

The New Formalism in Private Law

Notre Dame Law School
274
4.

Contracts in Code?

The Chinese University of Hong Kong (CUHK) - Faculty of LawTILT
183
5.

High-End Bargaining Problems

Brigham Young University - J. Reuben Clark Law School
148
6.

Arthur Linton Corbin

Georgetown University Law Cente
141
7.

Dark Contracts

Victoria University of Wellington and College of Law and Business - Ramat Gan Law School
130
8.

Narrative Capacity

Harvard University - Harvard Law School
91
9.

The “Code Adjudicator” Model: The Pubs Code, Statutory Arbitration and the Tied Lease

University of York, York Law School and University of York
88
10.

An Economic Analysis of Restitution for Mistaken Payments

University of Chicago Law School and George Mason University - Antonin Scalia Law School, Faculty
78

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 14 Aug 2021 - 13 Oct 2021
Rank Paper Downloads
1.

Discharging the Discharge for Value Defense

Columbia University - School of Law
622
2.

Arthur Linton Corbin

Georgetown University Law Center
141
3.

Dark Contracts

Victoria University of Wellington and College of Law and Business - Ramat Gan Law School
130
4.

Narrative Capacity

Harvard University - Harvard Law School
91
5.

The “Code Adjudicator” Model: The Pubs Code, Statutory Arbitration and the Tied Lease

University of York, York Law School and University of York
88
6.

תום לב: עיון מושגי השוואתי
Good Faith: A Comparative Conceptual Study

Hebrew University of Jerusalem - Faculty of Law
72
7.

Artificial Intelligence and Agents

Director, Centre for Technology, Robotics, AI and the Law, Faculty of Law, National University of Singapore and City University of Hong Kong (CityU) – School of Law; Centre for Public Affairs and Law; Centre for Chinese and Comparative Law
58
8.

An Impending 'Avalanche': Debt Collection and Consumer Harm after COVID-19

Melbourne Law School, Monash University - Department of Business Law & Taxation, Melbourne Law School - University of Melbourne and University of Melbourne - Law School
52
9.

Diversity, ESG, and Latent Board Power

University of Iowa College of Law and affiliation not provided to SSRN
49
10.

Intelligent Legal Tech to Empower Self-Represented Litigants

University of Missouri School of Law and Victoria University - Victoria University of Technology
39

October 13, 2021 in Recent Scholarship | Permalink

Contracts Prof Blunders into Constitutional Law

We take a break from our usual programming to provide this bit of shameless self-promotion:

Jeremy Telman on Eric Segall's Supreme Myths Podcast 

Supreme Myths

Or if you would like the full video experience (cat cameo included), there this version

 

 

October 13, 2021 in Contract Profs, Web/Tech, Weblogs | Permalink | Comments (0)

Monday, October 11, 2021

Guest Post from Ohad Somech: Incorporating Different Voices into Digital Platforms

SomechOhad Somech
Doctoral Student in the Zvi Meitar Center for Advanced Legal Studies in Tel-Aviv University

In a series of articles, Stephen Burgen of The Guardian reported on the struggle of chambermaids in Spanish hotels to encourage digital platforms, such as TripAdvisor and Booking.com, to factor working conditions into their hotel rankings. When the platforms ignored their appeals, the chambermaids resolved set up an independent booking platform. Work is already underway, with a crowdfunding campaign exceeding the €60,000 target.s

Chambermaid
A Chambermaid

Reading of the chambermaids’ triumph I was delighted, not only for them, but also because this was a great instance of theory coming to life. In Voicing the Market, Roy Kreitner explores a new movement in contract theory. He begins with the observation that contract theory is divided into two bodies of scholarship that, as Judy Kraus has noted, “passed each other like ships in the night.” The first type of scholarship, associated with legal realism, is dedicated to the relation between contracts and markets. The second, originating with Charles Fried’s Contract as Promise, seeks to ground contract law in personal morality.

It is only recently, Kreitner suggests, that contract scholars began to envision the contract-markets-morality triangle as a single theory. Alan Brudner, Daniel Markovits, and Nathan Oman have each independently sought to incorporate both personal morality and markets into their theories of contracts. Kreitner identifies the common denominator in all three works to be markets, and the pricing mechanism in particular, as allowing contracting parties to enter into agreements without first having to discuss what makes the traded thing valuable. In Kreitner’s words “prices are the public, shared face of valuation, which can be conducted without discussion, without dissention, without politics.”

By aggregating information from dispersed transactions, markets represent the moral accomplishment of allowing mutual recognition and collaboration without requiring parties to share similar values and beliefs. But, Kreitner goes to ask, is bracketing our disagreement about values truly a virtue? His answer is that bracketing may be desirable in well-functioning, competitive, or ideal markets, but not in many real-world ones.

In bracketing values and fixating on price and quality, markets offer us the option of participating or exiting. But many market actors, such as the Spanish chambermaids, want their voices to be heard as well. Indeed, rather than bracket valuation of working conditions, the chambermaids want every tourist to be confronted by them. Some may shrug off the information, but for others – including, I suspect, many of the blog’s readers – staying at hotels that mistreat their staff would be a non-starter.

And there is an even bigger picture to consider. The relationship between platforms and their commercial users is notoriously complex, not least because of the multiple functions served by platforms. One such function, Rory Van Loo suggested, is as conscripted regulators of the market that they constitute (e.g., the hotel market). Thus, one lesson from the chambermaids’ story is that, at least when it comes to working conditions, platforms have dropped the ball (if not forgot all about it).

Bilbao_-_Guggenheim_aurore
Guggenheim, Bilbao, image by PA

However, were the chambermaids to succeed, platform may be pressured to do what they initially refused to do and include working conditions in their ranking. Imagine Amazon requiring sellers on the platform to provide it with information on working conditions (or environmental impact) and incorporate that information into Amazon’s ranking system. Though this may seem like a pipedream at the moment, initiatives like that of the chambermaids in Spain may bring it closer to reality. The other lesson from the story, then, is that platforms are ideally placed to offer a voice to market actors who are rarely given one, and we should encourage the platforms to do so.  

So, whenever we can (safely) travel to Spain again, don’t forget to visit the chambermaids’ (forthcoming) website and make sure you are satisfied with the working conditions at the hotel where you are staying.

October 11, 2021 in Commentary, Contract Profs, E-commerce, Recent Scholarship, Travel, Web/Tech | Permalink | Comments (0)

Friday, October 8, 2021

Weekend Frivolity: The Is-a-Taco-a-Sandwich Debate!

The following clip is full of things I hate:

  1. Taco Bell
  2. Formal debates
  3. Popular culture parodying academic discourse
  4. The debate over whether a taco (or a wrap or a reuben or an oreo cookie or an accordion or whatever) is a sandwich
  5. TV commercials (unless they are GEICO commercials)

But when you combine all of these things, it somehow creates the ideal clip for frivolity!

By the way, the answer is that a sandwich has to be food, so sorry Taco Bell!

H/T Texas A&M School of Law Professor Wayne Barnes

October 8, 2021 in Food and Drink, Television | Permalink | Comments (0)

Thursday, October 7, 2021

At Last, A COVID-Related Breach Case that Might Succeed!

COVIDThere have been innumerable force-majeure type suits brought on by COVID-19.  This one might have a shot, because of one-sided cancellation provisions.  Plaintiffs, Jasmine and Robert Nicholson, have filed a class action lawsuit in the Court of Common Pleas of Pennsylvania against Defendant Wurzak Hotel Group Mark LLC (Wurzak), which operates the Hilton Philadelphia City Avenue and the Sheraton Valley Forge.

Plaintiffs allege that  they paid a  $10,000.00 deposit two years in advance in order to reserve space at the Philadelphia Hilton in September 2020.  When Pennsylvania Gov. Tom Wolf declared an emergency due to the COVID-19 pandemic in March 2020, Plaintiffs’ wedding as envisioned could not legally take place. Wurzak remained hopeful that the Governor would ease restriction by September 2020 and urged Plaintiffs to reschedule their wedding in lieu of a refund. But the Governor did not ease restrictions until May 2021, and even then wedding venues were to operate  at 25% venue capacity, well below the Plaintiffs’ 175 minimum guest count.

Plaintiffs sought a refund of their deposit, relying on the following contractual provision:

Screen Shot 2021-10-06 at 11.34.51 AMAfter being denied a refund, Plaintiffs held a smaller wedding ceremony in Delaware, where there were fewer restrictions.

Reagan Wedding
A Typical Philly Wedding

Plaintiffs’ complaint (register for free to view) alleges that the purported class may include more than 500 individuals who had events booked during the 15 months of pandemic closures from March 2020 to June 2021.  According to the complaint, Wurzak refused to offer refunds but instead assured class members that they could reschedule once COVID restrictions were lifted. 

Plaintiffs assert three claims: breach of contract, unjust enrichment, and violations of state unfair trade practices and consumer protection statutes.  Plaintiffs stress the unfairness and one-sidedness of the agreement.  The venue can cancel and offer a refund, but plaintiffs cannot cancel in similar circumstances. 

I admit, I don’t understand why the disparity is even an issue.  Plaintiffs wanted to have their wedding in September 2020 as planned, but the city’s ban on events made that impossible.  They couldn’t have their wedding; the venue couldn’t host the wedding.  This seems to be precisely the situation contemplated under Paragraph 6 of the agreement, and the venue seems obligated to offer a refund. 

I don’t know how else to read the paragraph. It is a sensible provision and is not actually one-sided.  People cancel their wedding plans all the time.  It is understandable that the venue would not want to refund deposits every time one party backs out, or a family death makes a wedding celebration ill-timed, or a car accident renders one or both celebrants unable to attend.  Contracts are risk allocation devices, and the people renting the venue bear the risk of cancellation.

But Paragraph 6 is about the venue being unavailable.  The venue was unavailable.   On a reading of the plain language of Paragraph 6, Wurzak should return the deposit.  I suspect that the plaintiffs did not notice Paragraph 6 until they had already sought to cancel and re-book, but the court should not allow unwitting plaintiffs to be victimized by such a trap for the unwary.  

H/T to @Hoffprof for alerting us to the case and to Alyssa Cross for her research assistance.

October 7, 2021 in Recent Cases | Permalink | Comments (0)

Wednesday, October 6, 2021

Squid Game, Contracts and Consent

I’ve been a bit negligent in my blogging duties as I’ve been busy with the start of classes (I’m teaching Torts this semester, hence my use of the word “negligent”).  So, when my daughter recommended that I watch Squid Game, I scoffed and self-importantly told her that I’m too busy to even post on the contractsprofblog let alone watch a scary Korean thriller (believe me, Koreans make some scary thrillers – it’s not all just Parasite and Train to Busan). For those of you who aren’t on Tik Tok (I know there are one or two of you out there), Squid Game is the insanely popular, meme-worthy, Korean thriller which is one of Netflix’s biggest hits ever.    But then she told me that Squid Game might be a scary-a** thriller but it’s also and more importantly for blogging purposes, a show about contracts and consent.  Contracts and consent?  My two favorite topics!  So, in the name of research, I pulled myself away from my course prep and forced myself to watch the first episode of Squid Game.  And lo and behold, my daughter was right.  It’s all about contracts and consent -- and also the role of money in bargaining power and “bodily integrity transactions” and a whole host of other things relevant to this blog.

(Some spoilers ahead)

The hapless protagonist is a loving father who is a mess of a human being (he steals money from his mother to bet on horse races and doesn’t seem to exhibit the traits of a rational actor – you know this will end in a bad contract for him as a result).  He loses then wins at the races, and then gets beaten up by thugs to whom he owes a lot of money who then force him under threat of physical injury to sign a waiver of his “physical rights,” meaning that they’ll take his kidney if he doesn’t pay up.  (Duress alert!  That contract is void).  He’s desperate for money and gets even more desperate when he learns that his daughter is going to move to the U.S. because her step-dad just got a job there and the only way to keep her in Korea is by making enough money to support her.  This is the “hard luck” bargaining situation that contracts scholars worry about – and one where I think it is hard to find robust consent.  He then meets a well-dressed stranger with whom he plays an even stranger game (it involves money for winning and getting slapped for losing), and then after a few twists and turns, he wakes up in a giant gym-like room in a jumpsuit with dozens of others dressed like him.  They are all made an “offer” to participate in a game, but they know nothing about what the game entails except that there is a very large prize for the winner.  The freakily masked game officials want to ensure that everyone plays the game of their own “free will” even though it is clear that the one thing they all have in common is that they are all suffering under the weight of crushing debt and being harassed by aggressive debt collectors. 

Before they can play the game, they must sign a ‘Player Consent Form” which is your standard adhesive contract offered on a take it or leave it basis.  But unlike the ubiquitous TOS, there are only 3 provisions on this form.  No hidden terms, so no problem, right?  WRONG -- Oh man, so wrong! The first clause says that the Player is not allowed to stop playing although the third clause says the Games may be terminated if the majority agrees.  The second clause says that the Player who refuses to play will be eliminated. But the terms are ambiguous, don’t you think?  Who is the “majority”?  Is it the majority of the participants or the freakily masked officials?  What happens if a Player stops playing?  Most importantly how will the Player be eliminated?  The protagonist hesitates but instead of listening to that voice of doubt (aka the voice of reason) and insisting on getting some clarity about what the terms actually mean (where’s the Definitions section?), he looks around, sees the folks around him sign the contract without a second thought, and then exhibits herd mentality when he signs on the dotted line  “Just because everyone else Clicks to Agree doesn’t mean you have to, does it?”  That scene demonstrates once again that the rational actor is a rare (non-existent) creature indeed, especially if you have money troubles, peer pressure, physical fatigue and optimism bias.  I won’t reveal what happens next, except to say that as with all contracts, the interpretation of the terms makes all the difference in the world and I think it’s fair to say, the contract did not meet the reasonable expectations of the parties.  Talk about unconscionable contracts.

My daughter tells me that Episode 2 has even more contract stuff in it.  But to be honest, I’m still recovering from the abuse of bargaining power and the rampant lack of robust consent in Episode 1. 

October 6, 2021 in Commentary, Games, Miscellaneous | Permalink | Comments (2)

Tuesday, October 5, 2021

Tuesday Top Ten - Contracts & Commercial Law Downloads for October 5, 2021

Top10-Granite

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 06 Aug 2021 - 05 Oct 2021
Rank Paper Downloads
1.

Discharging the Discharge for Value Defense

Columbia University - School of Law
609
2.

The New Formalism in Private Law

Notre Dame Law School
264
3.

Arthur Linton Corbin

Georgetown University Law Center
136
4.

Dark Contracts

Victoria University of Wellington and College of Law and Business - Ramat Gan Law School
115
5.

Narrative Capacity

Harvard University - Harvard Law School
82
6.

An Economic Analysis of Restitution for Mistaken Payments

University of Chicago Law School and George Mason University - Antonin Scalia Law School, Faculty
77
7.

Between Rights and Rites: The Ironies of Crisis and Contract

Suffolk University Law School
73
8.

Too Long; Didn't Read: Finding Meaning in Platforms’ Terms of Service Agreements

UCLA Institute for Technology, Law & Policy
68
9.

Liberal Property and Just Markets

Tel Aviv University - Buchmann Faculty of Law
68
10.

The Corporate Contract and the Internal Affairs Doctrine

University of Oregon School of Law
61

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 06 Aug 2021 - 05 Oct 2021
Rank Paper Downloads
1.

Discharging the Discharge for Value Defense

Columbia University - School of Law
609
2.

Arthur Linton Corbin

Georgetown University Law Center
136
3.

Dark Contracts

Victoria University of Wellington and College of Law and Business - Ramat Gan Law School
115
4.

Narrative Capacity

Harvard University - Harvard Law School
82
5.

The Mysterious Market for Post-Settlement Litigant Finance

University of Texas School of Law, Tel Aviv University - Buchmann Faculty of Law and Yeshiva University - Benjamin N. Cardozo School of Law
78
6.

Between Rights and Rites: The Ironies of Crisis and Contract

Suffolk University Law School
73
7.

תום לב: עיון מושגי השוואתי
Good Faith: A Comparative Conceptual Study

Hebrew University of Jerusalem - Faculty of Law
71
8.

Too Long; Didn't Read: Finding Meaning in Platforms’ Terms of Service Agreements

UCLA Institute for Technology, Law & Policy
68
9.

An Impending 'Avalanche': Debt Collection and Consumer Harm after COVID-19

Melbourne Law School, Monash University - Department of Business Law & Taxation, Melbourne Law School - University of Melbourne and University of Melbourne - Law School
40
10.

Diversity, ESG, and Latent Board Power

University of Iowa College of Law and affiliation not provided to SSRN
38

October 5, 2021 in Recent Scholarship | Permalink

Scarlett Johansson Settles Black Widow Suit

Black_Widow_(2021_film)_posterAs Sid Delong noted in his post about the case from August, Ms. Johannson's litigation strategy was unusual and a bit mysterious.  She sued Disney for tortiously interfering with her contractual relations with Marvel, a Disney subsidiary, without suing Marvel for breach of contract.  The case was catnip for law profs interested in contracts, torts, remedies, the Marvel movies, and Ms. Johansson.

Alas, as is so often the case, Ms. Johansson settled her claims against Disney.  The details of the settlement have not been made public.  However,  in separate statements, the parties seem to have decided to kiss and make up.      

As reported on the BBC, Disney's content chairman said of Ms. Johansson, "We appreciate her contributions to the Marvel Cinematic Universe and look forward to working together on a number of upcoming projects," and he proceeded to plug a forthcoming movie.  Even though the report is on the BBC, let's not forget that Disney owns ABC, so it never forgets to Always Be Celling.  

For her part, Ms. Johansson, whose Black widow character is a Russian assassin turned Avenger, said "I'm incredibly proud of the work we've done together over the years and have greatly enjoyed my creative relationship with the team."  More of a whimper than a bang.

Will the actor be haunted for sucking up so shamelessly in order to move on with her career, just as the Natasha Alianova character (the Black Widow) is haunted by the fact that in her attempt to assassinate General Dreykov, she gravely injured his daughter, Antonia Dreykov (Taskmaster)?  We're just asking questions here.

October 5, 2021 in Celebrity Contracts, Recent Cases | Permalink | Comments (0)

Monday, October 4, 2021

That Danish Museum and Joni Mitchell

Joni 1974On her concert album, Miles of Aisles, Joni Mitchell (right and below, petting Buddy in the Oval office) is tuning up, and people are shouting requests at her.  Joni (we've been on a first-name basis since the 70s) is also an accomplished painter and she muses: 

That's one thing that's always, like, been a difference between, like, the performing arts, and being a painter, you know. A painter does a painting, and he paints it, and that's it, you know. He has the joy of creating it, it hangs on a wall, and somebody buys it, and maybe somebody buys it again, or maybe nobody buys it and it sits up in a loft somewhere until he dies. [Joni tends to go to dark places.]  But he never, you know, nobody ever, nobody ever said to Van Gogh, "Paint a Starry Night again, man!" You know? He painted it and that was it. 

And then she proceeds to perform The Circle Game, which I hope she was planning to play regardless of fans' requests.

Joni_Mitchell_pets_Buddy_in_the_oval_office
And yet, for some reason, the Danish Kunsten Museum at issue in Sid's post from earlier today essentially said to the artist, Jens Haaning, "Hey, paint A Starry Night again, man."  Except it wasn't an immortal painting that is etched in the consciousness of every sentient being who has ever had the pleasure of marveling at it, it was a piece of concept art that will be as ephemeral in our consciousness as the last one about which we commented on this blog.

Starry NightAccording to the BBC, Haaning was asked to reproduce previous works of art in which he had framed currency representing the annual salary in Denmark and Austria (you can view his previous works here).  That seems like a risky request to make of a conceptual artist interested in the plight of the working man.  Joni Mitchell understood the difference between making fixed works of art and performance art.  She didn't necessarily appreciate people shouting requests at her as though she were some street corner musician playing For Free, but she recognized that it is socially acceptable to ask a musician to play a request but inappropriate to ask a painter or a sculptor to reproduce a work of art (unless the artist is Bob Ross, who re-created each painting thrice!).

Sid DeLong has already covered the legal issues in the Haaning case well.  I think the contract case and the restitution claim are easily separated.  The museum contracted for a conceptual work of art, and it got more than it bargained for.  Mr. Haaning's original work might have caused some sort of stir in the art world, but it was nowhere near as successful as Take the Money and Run, the art of breach of contract as performance.  The success of the work has garnered the museum and Mr. Haaning far more notoriety than they would have gotten from a reproduction of Mr. Haaning's work.  

However, it appears that he never contracted for the right to keep the 530,000 Danish kroner he was supposed to use to make the art.  The title of his blank canvases could be construed as an admission of liability.  Not having seen the documents relating to the deal between artist and museum one cannot be certain, but it is hard to imagine a legal argument for why Mr. Haaning should get to keep the money.

Friend of the blog Mitu Gulati has also published a discussion of The Cheekiest Artist of Modern Times over at Credit Slips.

 

October 4, 2021 in Commentary, In the News, Music | Permalink | Comments (0)

Help Wanted: Widener Law

Widener_University_SealWidener University Commonwealth Law School in Harrisburg Pennsylvania is seeking an entry-level or lateral tenure-track professor to teach contracts, a two-semester, five-credit course, beginning with the  2022-23 academic year.   For more information about the position and other needs of the law school, please see our position description here at or contact Professor Jill Family, Appointments Committee Chair at jefamily@widener.edu

October 4, 2021 in Help Wanted, Law Schools | Permalink | Comments (0)

Sidney DeLong, The Art of the Steal

THE ART OF THE STEAL
Sidney W. DeLong

DelongA recent contract dispute raises some amusing questions about the relationships between art and contract law: Can breach of a contract be a form of modern art? If so, can breach of a contract to provide a work of art itself constitute the promised work of art?

A Danish artist, Jens Haaning, was famous for imaginative art works intended as social commentary. Two of his previous works consisted of real currency pasted into a picture frame, each containing the average annual incomes of Danes and Austrians. The Kunsten Museum of Modern Art (below) commissioned him to recreate these two pieces as part of an exhibition about the labor market entitled “Work It Out.”  Its contract with Haaning provided that he was to receive the equivalent of around $7,000 in expenses plus a government-determined viewing fee. In addition, the Museum gave him the equivalent of $84,000, (534,000 kroner), which he was to attach to the art works as he had previously done. 


Shortly afterward, he delivered two empty picture frames, entitled “Take the Money and Run.” As he later explained, he thereby fulfilled his promise of artwork: “The work is that I have taken their money…It’s not theft. It is a breach of contract, and breach of contract is part of the work.” 

If you are unfamiliar with modern art, it may surprise you that the director of the museum admitted that the production was art appropriate to the exhibit about the labor market (illustrating the artist’s labor situation): “I want to give Jens absolutely the right that a work has been created in its own right, which actually comments on the exhibition we have. But that is not the agreement we had.” In other words, it’s good art but it’s a breach of contract. Nevertheless, Kunsten Museum chose to display the empty frames with their title because they were thematic to the exhibit. “It’s a comment on how we all work and it’s probably also a comment on the value of what he creates,” the museum director said. (This post will not address the intellectual property issues raised by this case.)

Whether or not it ends up in court, the dispute prompts some familiar contracts questions in novel dress. The Museum’s claim for return of the money is a familiar claim for restitution, either as a remedy for conversion or for repudiation of the contract. It would argue that it retained ownership of the money that Haaning converted to his own use. The contract seems analogous to one in which a customer supplies gold to a jeweler to form into a necklace for the customer. The customer remains the owner of the gold and if the jeweler refuses to return it, it is liable for conversion.

Haaning argued that taking the money and ripping off the Museum (his “employer”) was “the work,” an artistic performance commissioned by the Museum. He might argue that his contract obligated him to create a work of art “using the cash” he was given and he did precisely that: by taking the cash and refusing to paste it into a frame and return it to the Museum, he converted his own work situation into an act of resistance in solidarity with workers everywhere. As he said, "I encourage other people who have just as miserable working conditions as me to do the same."

A third, more familiar, contracts issue of interest is whether the Museum, by displaying the empty frames, collecting revenue generated by them, and admitting that they make an artistic statement appropriate to the exhibition, thereby waived Haaning’s breach by accepting his performance. The director was quoted as saying "It wasn't what we had agreed on in the contract, but we got new and interesting art." In reply, the Museum may argue that its action was only a mitigation of its damages and in any event, does not eliminate its restitution claim for the missing cash.

Puzzles about ArtFinally, Haaning presents the question whether breach of a contract can be its performance. The paradox of self-referentiality was one of the hallmarks of late 20th century movements in art and literature, so why should law escape its force? How should a court apply the objective theory of contract meaning if both parties understand that to breach the contract is, in a sense, to perform it? For Haaning, to take the money and run fulfilled his contract obligation by engaging in the most dramatic form of performance art, confronting the Museum and its visitors with its complicity in the exploitative work situation its exhibition was intended to portray.

So we are left to ponder: Breach as art? Breach as performance? Breach as speech?

(For readers who are interested in questions about the nature of art, I recommend a delightful little book “Puzzles About Art: An Aesthetics Casebook” by Margaret P. Battin et. al. (St. Martins Press 1989). Although it is somewhat dated in the Age of Banksy, even a Philistine can enjoy it.)

October 4, 2021 in Commentary, Current Affairs, In the News | Permalink | Comments (0)

Friday, October 1, 2021

Weekend Frivolity: No Stems, No Seeds that You Don't Need

It still teach Brookside Farms v. Mama Rizzo, even though I don't like it very much, for three reasons:

  1. It's still the only case I can find that deals with modifications under the UCC.  ContractsProfs, if you know a better case, help me out!
  2. It's got the reference to a basil sale carcinoma, and a student challenged me to work that into a Limerick.
  3. The first modification in the case involves a request from the buyer that the seller remove the stems from the basil leafs.  Because childhood is so sticky, every time I read or think about the case, I am reminded of the Cheech and Chong song with the immortal lyric: "No stems no seeds that you don't need -- Acapulco Gold is some badass weed!"

I played a clip of this video for my students so that they would understand my attachment to the case.

Their response?  "Hey, the clip is three minutes long, but you only played about ten seconds of it!"  

October 1, 2021 in Famous Cases, Teaching | Permalink | Comments (0)

Reminder: KCON Zoom Panel Today!

Post-employment restrictions are in the news. President Biden mentioned them in his July 9 executive order.  In July, the Uniform Law Commission approved a uniform act governing covenants not to compete.  Illinois, Nevada, and D.C. have recently enacted legislation.

Should competition law should play a role in regulating such terms?  This panel will generate wisdom in that regard.

Employment 2021: Contract v. Competition
Which Should Govern Freedom to Work?
A KCON Zoom Panel

Friday, October 1, 2021
2 p.m. to 4 p.m. Central Time

HarrisUnconscionability in Contracting for Worker Training
Jonathan F. Harris
Associate Professor of Law
Loyola Law School, Los Angeles
@LawProfJHarris

Bundling Postemployment Restrictive Covenants: When, Why, and How It Matters
Starr-evanNon-Disclosure Agreements and Externalities from Silence
Evan Starr
Associate Professor
Robert H. Smith School of Business, University of Maryland
https://sites.google.com/site/starrevan/home

Boilerplate Collusion: Clause Aggregation, Antitrust Law & Contract Governance
LobelOrly Lobel
Warren Distinguished Professor of Law
University of San Diego School of Law
https://www.orlylobel.com/

Remarks

Posner  EricEric A. Posner
Kirkland & Ellis Distinguished Service Professor of Law
Arthur and Esther Kane Research Chair
University of Chicago Law School
Author of How Antitrust Failed Workers (and a batch of related articles)

Questions and Comments from the Floor

Please direct questions to Val Ricks, South Texas College of Law Houston, organizer and moderator, at vricks@stcl.edu.

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October 1, 2021 in Conferences, Contract Profs, Recent Scholarship | Permalink | Comments (0)

Reality Television Star Wins Motion to Dismiss, Fraudulent Inducement, Fraud and RICO Claims

Nope.  Not that reality television star.

In Goureau v. Lemonis, Plaintiffs Nicolas Goureau and Stephanie Menkin contend that their business’s participation in CNBC’s TV show The Profit caused their company to go into crippling debt. The Profit is an American documentary-style reality television show broadcast on CNBC. In each episode, the show’s host, Marcus Lemonis (right), typically offers a capital investment and his expertise to an already-struggling small businesses in exchange for an ownership stake in the company. He revamps the company in hopes of making a profit for the business and himself.

Lemonis
Image by Samdpark, CC BY-SA 4.0 , via Wikimedia Commons

Plaintiffs ran an upscale women’s clothing brand through their Gooberry Corporation. It was successful overall and had several stores around the country. Plaintiffs sought outside investors and in early 2014, Plaintiffs interviewed and were selected to appear on The Profit. During the show, Plaintiffs and Mr. Lemonis came to the agreement that Mr. Lemonis would buy 30% of Gooberry for $800,000.  However, Mr. Lemonis allegedly began significant renovations of the Gooberry stores that cost upwards of $2,000,000 and told Plaintiffs they would be stuck with the bill if they decided to back out of the deal. Many of the experts appointed to assist in the changes to Gooberry were Mr. Lemonis’s employees from other companies, who charged Plaintiffs consulting fees. Knowing all this, after filming in 2014, the parties still entered a final operative Stock Purchase Agreement, which gave Lemonis 32 of 100 shares of Gooberry for $800,000, and a Shareholder Agreement, which placed Mr. Lemonis on a board of directors.

The relationship further soured when Loomis began operating the company under the Lemonis name, bought merchandise that made costs higher and work more difficult, and subsequently made it harder to compete with other boutiques and department stores. Mr. Lemonis tried to expand Plaintiffs' brand by investing in a new business, ML Fashion, LLC, that would be the umbrella entity for the parties’ various business ventures. ML Fashion was funded by credit agreements that it had with Defendant ML, LLC. Plaintiffs contend that whenever ML Fashion lent money to Gooberry, those funds were coming from Lemonis through ML, LLC, and that this action was increasing the debt position of both ML Fashion and Gooberry.

In short, Plaintiffs allege that Mr. Loomis engaged in a series of corporate restructurings that enabled him to take control of their business and deprive them of their controlling stake.  He did so in stages so that their stakes in the business shrunk as their business’s indebtedness to entities that he controlled grew.  At the same time, he mismanaged their business until their business’s indebtedness to the entities that Mr. Loomis controlled exceeded their equity in their own business.  One is left wondering both how they allowed themselves to be so effectively snookered and how exactly Mr. Loomis benefits from the transactions as described. 

Maybe there’s a lesson in this for all of us.  Reality TV stars may not be what they seem to be.

Plaintiffs filed suit and asserted thirteen claims. including three fraud-based claims against Defendants, Mr. Lemonis and his business entities, including Machete, the production company responsible for the Profit: 1) fraudulent inducement ; 2) fraud; and 3) mail and wire fraud under RICO. On September 2, the District Court for the Southern District of New York granted Defendants’ motion to dismiss those three claims, the only claims relevant to the court’s jurisdiction over the case. With those claims out of the case, Plaintiffs would have to either amend their complaint to address its deficiencies or refile a suit on their remaining claims in state court.

The court held that Plaintiffs did not plead their fraudulent inducement or fraud claims with the requisite specificity.  Without allegations sufficient to support their predicate claims, Plaintifs also could not make out a RICO claim.  The Complaint, taken as a whole, alleges that the real-world impact of the various investment schemes depicted on The Profit does not correspond to how that impact as portrayed on the reality television series.  The court found these representations on which Plaintiffs allegedly relied to be either inactionable puffery or forward-looking projections. 

Part of the problem is that the Defendants are well-advised.  They pepper their statements and documents with language that puts people in Plaintiffs’ position on real or constructive notice that they are taking a risk and that there are no guarantees that the venture will be profitable.  The other part of the problem is that Plaintiffs forged ahead with the deal, when they could have backed out, even after Mr. Loomis revealed that the partnership would require their business to take on an additional $2 million in debt.  They also seem to have willingly entered into the agreements that resulted in the corporate restructurings which they now characterize as fraudulent.

Because federal jurisdiction was predicated on Plaintiffs’ RICO claim—and the court found Plaintiffs’ complaint insufficient—the court declined to rule on the remaining claims. Plaintiffs have until October 05, 2021, to notify the court if they intend to amend their complaint to address its deficiencies.

H/T to Alyssa Cross and the ever-reliable @NY_Contracts

October 1, 2021 in Recent Cases, Television | Permalink | Comments (0)

Wednesday, September 29, 2021

Groundhog Day Moment: Trump Loses a Case Involving a Non-Disclosure Agreement

Groundhog
Neither of these creatures is Bill Murray

You know that moment in the film Groundhog Day when Bill Murray's character wakes up to "I Got You Babe" and thinks the DJs have screwed up and played yesterday's tape by accident?  If I just went with the headline "Trump NDA Ruled Unenforceable," you would have shaken your head and yelled at your computer, "Dude, refresh your feed!"  After all, we've already run stories about unenforceable Trump nondisclosure agreements (NDAs) here and here and here and here.  

And now comes the case of Omarosa  Manigault Newman (Omarosa) who wrote a book about her time in the Trump White House.  In 2018, the Trump Campaign sought arbitration to enforce an NDA into which Omarosa alleged entered in 2016.  According to NBC News, Omarosa alleges in her book, Unhinged: An Insider's Account of the Trump White House that Trump was a racist and also that he was in severe mental decline during his Presidency.  Not having read the book, I can only wonder whether Omarosa cited as evidence of that decline her own hiring to work in the White House based on her appearance in three separate season of Mr. Trump's reality television show, The Apprentice.

According to The New York Times, the arbitrator deemed the Trump NDA too vague to be enforced.  It apparently prohibited Omarosa from revealing confidential information, but that term was defined so broadly as to capture just about anything, including mere opinions critical of Mr. Trump.  In addition to ruling in Omarosa's favor, the arbitrator also granted her attorneys' fees.  Gracious as always, Trump issued a statement, reprinted in Rolling Stone, in which he acknowledged defeat and praised Omarosa for besting him on the law and the facts.  

Just kidding. 

He said: “I gave Omarosa three attempts at The Apprentice and she failed. At her desperate request I gave her an attempt at the White House and she failed there too, people truly hated her.”

Stephanie Grisham's tell-all about Melania Trump is due out next week.  Stay tuned.

September 29, 2021 in Celebrity Contracts, Current Affairs, In the News, Recent Cases | Permalink | Comments (0)

Tuesday, September 28, 2021

Tuesday Top Ten - Contracts & Commercial Law Downloads for September 28, 2021

As September draws to a close and Fall has fallen upon us, what better time is there to catch up on the latest in contract law scholarship and its commercial law cousin. Grab some downloads below!

Top-10 Cube Letters

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 30 Jul 2021 - 28 Sep 2021
Rank Paper Downloads
1.

The New Formalism in Private Law

Notre Dame Law School
243
2.

Herbert Hovenkamp as Antitrust Oracle: Appreciating the Overlooked Contributions of the New Harvard School

University of Pennsylvania Law School
191
3.

Smart Contracts, Real-Virtual World Convergence and Economic Implications

Massachusetts Institute of Technology (MIT) - Computer Science and Artificial Intelligence Laboratory (CSAIL)
141
4.

Arthur Linton Corbin

Georgetown University Law Center
122
5.

The Odious Haitian Independence Debt

Université Libre de Bruxelles - SBS-EM, CEB, Graduate Institute of International and Development Studies (IHEID) - Department of Economics, University of North Carolina School of Law and Duke University
120
6.

Dark Contracts

Victoria University of Wellington and College of Law and Business - Ramat Gan Law School
98
7.

An Economic Analysis of Restitution for Mistaken Payments

University of Chicago Law School and George Mason University - Antonin Scalia Law School, Faculty
76
8.

Narrative Capacity

Harvard University - Harvard Law School
74
9.

Between Rights and Rites: The Ironies of Crisis and Contract

Suffolk University Law School
70
10.

Liberal Property and Just Markets

Tel Aviv University - Buchmann Faculty of Law
65

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 30 Jul 2021 - 28 Sep 2021
Rank Paper Downloads
1.

Arthur Linton Corbin

Georgetown University Law Center
122
2.

Dark Contracts

Victoria University of Wellington and College of Law and Business - Ramat Gan Law School
98
3.

The Mysterious Market for Post-Settlement Litigant Finance

University of Texas School of Law, Tel Aviv University - Buchmann Faculty of Law and Yeshiva University - Benjamin N. Cardozo School of Law
76
4.

Narrative Capacity

Harvard University - Harvard Law School
74
5.

Between Rights and Rites: The Ironies of Crisis and Contract

Suffolk University Law School
70
6.

Too Long; Didn't Read: Finding Meaning in Platforms’ Terms of Service Agreements

UCLA Institute for Technology, Law & Policy
61
7.

Data Protection in the Big Data Era: The Broken Informed Consent Regime and the Way Forward

National Taiwan University - College of Law
35
8.

Indian Law on Standard Form Contracts

Indian Institute of Management Ahmedabad, Shardul Amarchand Mangaldas & Co, Advocates & Solicitors, Supreme Court of India and National Law University, Jodhpur
24
9.

An Impending 'Avalanche': Debt Collection and Consumer Harm after COVID-19

Melbourne Law School, Monash University - Department of Business Law & Taxation, Melbourne Law School - University of Melbourne and University of Melbourne - Law School
24
10.

Stagflation in American Jurisprudence

Florida State University and Angelo State University - Business Law
17

September 28, 2021 in Recent Scholarship | Permalink

Teaching Assistants: Gregory Klass on Arthur Linton Corbin

KlassGeorgetown Law's Gregory Klass (left) has posted a chapter on Corbin that will appear in a forthcoming collection of Scholars of Contract Law

Here is the abstract from SSRN:

This chapter on Arthur Linton Corbin will appear in the forthcoming collection, Scholars of Contract Law. The chapter provides a brief summary of Corbin’s life, then discusses five topics: Corbin’s Socratic approach to the classroom and his introduction of the caselaw method at Yale; Corbin’s analytic approach, which was inspired by Hohfeld and is illustrated by Corbin’s definitions of “contract” and “consideration”; Corbin’s evolutionary theory of the common law, his understanding of the relationship between law and social mores, and his insistence that legal rules always be treated as mere “working rules”; Corbin’s occasional appeal, despite his general aversion to high theory, to the reliance theory of contract; and Corbin’s account of contract interpretation, where one sees the reliance theory at work, together with a surprisingly narrow conception of meaning.

Corbin plays an important role in most first-year contracts law courses, or at least he does in mine.  Together with Karl Llewellyn, he represents the transition from the formalism of the First Restatement of the Law of Contracts to the legal realism of the Second.  But I've never been able to put much flesh on the bones.  Llewellyn lived an interesting life.  I hadn't come across much information about Corbin to help me understand what made him tick.

Of course, the tension between Willistonian formalism and Corbinian legal realism can be overdrawn.  Corbin collaborated on the First Restatement; he died long before the Second Restatement was completed.  As Klass's piece makes clear, Corbin came by his realism, if one can give his approach that name, slowly and incrementally, as he struggled to make sense, in Benjamin Cardozo's phrase, of the "trackless ocean" of the common law.

Part of the difficulty of identifying Corbinian methodology is that he seems not to have been interested in theorizing divorced from practical applications.  Legal realists might have used Frege or Russell or Wittgenstein or American pragmatism to inform their understanding of law.  Corbin was more interested in finding a language adequate to describe commercial relations in practice.  To the extent one can associate Corbin with a school of thought, according to Klass, he was indebted to Hohfeld's analytic approach.  His academic achievement is a tribute to his unique combination of analytic rigor, building on Hohfeldian categories, and Sitzfleisch.  Well into his 80s, he could be found in Yale's ill-lit library pouring over the latest caselaw.  Into his 90s, index cards containing his notes on the latest cases could be found by his armchair.

Take heart, fellow academic underachievers!  Corbin was the Kant of contracts.  He was 75 when he published the first edition of his monumental casebook, seven years after his retirement from teaching.  By the time he published the second edition, he was 88.

September 28, 2021 in Contract Profs, Recent Scholarship | Permalink | Comments (2)

Monday, September 27, 2021

Ohio State Linebacker, Inspired by Cheerleader, Tests the Limits of the First Amendment

Last month, I posted about Mahanoy Area School District v. B.L., a case in which the Supreme Court held 8-1 that a school could not punish a cheerleader for a profane Snap expressing frustration with, among other things, school, softball, and cheerleading.  The Court held that, while schools can regulate some off-campus speech, it could not punish B.L. for exercising her First-Amendment rights in ways that did not threaten significant disruption of school activities.

How RightsThe case is of interest to this blog (at least arguably), because B.L. had signed a form as a condition of her participation in team activities, in which she promised not to say negative things on the Internet about her school or cheerleading.  None of the courts that heard the case gave any weight to B.L.'s promise, and while I don't think the promise should be given dispositive weight, I, following Jamal Greene's How Rights Went Wrong, think courts should weigh all the interests implicated in the case before them and that the school's interest in holding B.L. to her promise is one such interest.

Over the weekend, a similar situation arose.  K'Vaughn Pope, a linebacker for the Ohio State Buckeyes, apparently was upset about his lack of playing time.  According to ESPN, after conversation with several members of the coaching staff, Mr. Pope was escorted from the field.  He then took to Twitter and, while the game was still in progress, in a since-removed post, wrote "f--- Ohio State."  He also wrote "good lucc to my teammates" and that one is still up.

Reporters inquired of Ohio State coach Ryan Day whether Mr. Pope was still on the team.  Coach Day wisely equivocated, but the question assumes that disciplining a student at a state university for comments critical of that university is permissible under the First Amendment.  Or perhaps the reporters thought it appropriate to discipline a student-athlete for misspelling "luck" in a comment viewable by the public.  

As reported here, Coach Day then spoke a bit about commitments, which may or may not be contractual, and about other things:

[W]hen you make a commitment to a team at the beginning of the year, when you make a commitment to the Ohio State Buckeyes, that’s what you do. One of the hard things is that you have to play certain guys, and you have to make some decisions on who’s playing in those games and you just really count on guys to be great teammates if they’re not getting on the field … What it really is, is that guys want to play and you can’t play everyone. And then frustration kicks in.

I'm guessing that few will think that the First Amendment prohibits Coach Day from disciplining Mr. Pope for his conduct and speech.  If so, why can he be disciplined when B.L. could not?  

Coach Day's remarks are sensible.  I'm not a fan of college sports, but if they are to exist, if public high schools are to field sports teams, it seems obvious to me that coaches ought to be empowered to discipline athletes for conduct that they deem detrimental to their teams, subject to internal due process protections permitting students with means of appeal.  The notion that the First Amendment would have anything to say about students' non-political speech critical of their coaches' decisions strikes me as not just wrong but ludicrous.  And the notion that federal judges are better situated than school administrators to determine where to draw the line between permissible and impermissible disciplinary measures strikes me as more evidence of the bizarre sacralization of a few privileged "rights." We infantilize ourselves when we act as though the Constitution has to sort out all our problems.

September 27, 2021 in Commentary, Recent Scholarship, Sports | Permalink | Comments (3)

Friday, September 24, 2021

Weekend Frivolity: Deadheading Mums

Sorry all!  It's been a slow week on the blog because teaching, believe it or not, is hard work!  Also, I overcommitted on the writing front.

In the meantime, don't forget to deadhead your mums!  This video delights me.

 

 

September 24, 2021 in Miscellaneous | Permalink | Comments (0)