ContractsProf Blog

Editor: Jeremy Telman
Oklahoma City University
School of Law

Monday, November 22, 2004

Happy Fiftieth Birthday to Lucy v. Zehmer!

Birthday_cake_1 Who would have thought that two good ol’ Virginnie boys sitting at a bar getting "high as a Georgia pine" would lead to one of the most famous and popular of American contract cases?  Yet fifty years to the day after the Virginia Supreme Court decided Lucy v. Zehmer, the case is a fixture of nearly every contracts casebook—and is likely to remain so.

Douglas Boshkoff’s limerick on the case:

Land contracts are serious stuff,
So Lucy's attorney got tough.
"We don't know the truth.
Was it due to vermouth?"
Well, the court quickly called Zehmer's bluff.

From:  Selected Poems on the Law of Contracts, 66 N.Y.U.L. Rev. 1533, 1536 (1991)

The opinion is here in HTML and here in PDF.  For an interesting Lithuanian-English parallel translation (ever wonder how Lithuanians say "high as a Georgia pine"?) see here.

To include your thoughts and comments on the case in the Birthday Book, just click on the "comments" link at the foot of this message.

November 22, 2004 in Famous Cases | Permalink | Comments (0) | TrackBack (0)

Yet another contract suit against Michael Jackson

Michael Michael Jackson’s legal woes continue to mount. The entertainer (left, in happier times) has been sued by a Los Angeles antique dealer for the unpaid balance due on $380,000 worth of antiques the star allegedly bought. The dealer, the Mayfair Gallery, claims it is still owed $180,000. It doesn’t seem to be a question of Jackson being broke; Forbes magazine last year reckoned his net worth at about $350 million.

November 22, 2004 in In the News | Permalink | Comments (0) | TrackBack (0)

Today in history—November 22

1802: Thomas Cook, the man who invented the modern tourism business, is born. Without him there would have been no Carnival Cruise Line decision.

1868: John Nance Garner is born. He was Vice President for FDR’s first two terms; although he was generally opposed to Wall Street interests, he also opposed president’s plan to pack the court to overrule the Lochner line of cases.

1927: Judge Cardozo invents a new twist to the consideration doctrine in his opinion for the New York Court of Appeals in Allegheny College v. National Chautauqua County Bank

Elvis_1 1954: Two good ol’ boys finally learn who’ll get the Ferguson farm, as the Virginia Supreme Court issues its opinion in Lucy v. Zehmer.

1955: In one of the great contract bargains of all time, RCA records buys the contract of singer Elvis Presley (left) from Sun Records for $55,000.

November 22, 2004 in Miscellaneous | Permalink | Comments (0) | TrackBack (0)

Cases—Damages—True value of property at time of sale is damage measure for fraud in inducement

Florida_flag Where the purchaser of rental property raises a claim of fraud in the inducement, the measure of damages is the difference between the inflated and the actual value of the property on the date of the sale, says the Florida District Court of Appeal.

The buyer had purchased property on the false representation that it was fully leased and that the leases had two years to run. When the major tenant moved out, the buyer sued for the lost value of the rent. But this was the wrong measure of damages, said the court. The buyer was required to introduce evidence of the true value of the property on the sale date; it failed to do so, and its claim for lost rent had to be dismissed

The buyer was doubly out of luck because it apparently failed to plead breach of contract, and its attempt to amend its contract in the middle of the trial was property denied.

Kind v. Gittman

, 2004 Fla. App. LEXIS 17054 (4th Dist. Nov. 10, 2004)

November 22, 2004 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Google sues customer for breach of pay-per-click deal

Google_1 A Google advertising customer who allegedly sought to increase its profits by clicking repeatedly on its own links is now on the wrong end of a law suit by the search engine firm. Google sued Houston-based Auctions Expert International in Santa Clara, California, claiming that the firm was abusing the system under which sites are paid by the click. Google says the contract prohibits customers from clicking their own links.

Fraud in its pay-per-click system has been a problem for the recently public Google. A man who developed a program that automatically roamed the Internet clicking on Google sites is presently facing criminal charges after allegedly trying to extort $100,000 from the company on a threat of turning the program over to spammers.

November 22, 2004 in In the News | Permalink | Comments (0) | TrackBack (0)

Sunday, November 21, 2004

Today in history—November 21

Judah_benjamin 1861: Judah P. Benjamin (left) is appointed Confederate Secretary of War.  He had previously turned an offer from President Pierce to serve on the U.S. Supreme Court—he would have been its first Jewish member—and after the war he became one of the most celebrated commercial lawyers in Britain, publishing his Treatise on the Law of Sale of Personal Property in 1868.

1877: Thomas Edison invents the phonograph.

1945: With the war over, the United Auto Workers strike General Motors’ plants in Detroit.

1969: A major step in the Internet, as the first ARPANET link is created.

1990: Judge Kimba (Leonard v. Pepsico) Wood sentences Michael Milken is sentenced to 10 years in prison.

1995: The Dow Jones Industrial Average closes above 5000 for the first time.

November 21, 2004 in Miscellaneous | Permalink | Comments (0) | TrackBack (0)

Cases—Employee noncompete clauses—Continued employment is not consideration

Washington_flag An employee noncompete clause signed five years after employment started is unenforceable unless it is backed by "independent consideration," according to a new decision by the Washington Supreme Court.

In this case, the employer had its sales representative, an at-will employee who worked on commission, sign the agreement, but did not offer any increased salary, job protection, or anything else.  When the employer subsequently changed its commission schedule, the sales rep began looking around for other employment.  The employer fired him and wrote a letter to its competitor (whom the sales rep had contacted) stating that it intended to enforce the noncompete.

The court held that continued employment is not, itself, consideration for the a noncompete.signed after the employment relationship has begun.

Labriola v. Pollard Group, Inc., 2004 Wash. LEXIS 825 (Nov. 10, 2004)

November 21, 2004 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Cases—Just cause dismissal—Jury can only assess good faith

Maryland_flag When a contract expressly provides that dismissal be only for "just cause," may a jury independently determine whether that cause existed?  Maryland's highest court. in a 5-2 decision, says no—the jury's job in that case is to determine whether the employer acted in objective good faith and acted reasonably under the circumstances.

Dr. Michael Conte had a contract with the Towson State University that provided he could only be terminated for just cause.  He subsequently was fired after he allegedly embroiled the University in a series of accounting irregularities and cost it more than $2 million in state funding.  Conte convinced a jury that he was not, in fact, responsible, and won more than $900,000 in damages.

The Court of Appeals, in a majority opinion by Judge Raker, reversed, holding that it was error to let the jury determine the underlying facts of whether Conte had been guilty of incompetence.  Acknowledging that there is a split of authority on the question, the court chose to follow what it considered to be the majority rule.  Chief Judge.

Towson University v. Conte, No. 55 (Maryland Court of Appeals, Nov. 17, 2004)

Maryland attorney Stuart Levine has published a criticism of the opinion on his tax and corporate law blog.

November 21, 2004 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Mara Kent's Recent Cases Roundup

Kent_headshot_1 Sandra Bullock, parenting contracts, Bart Simpson, cell phones, Madonna, toys, Van Halen, and the Baltimore Orioles—Mara Kent (Thomas Cooley) looks at them all in her forthcoming column in the AALS Contracts Newsletter.

Click the link below for the full article.

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November 21, 2004 in Commentary | Permalink | Comments (0) | TrackBack (0)

Saturday, November 20, 2004

Violent struggle over spiritual game

Avary If you ever wondered what kind of crime would be too heinous even for the author of such "ultraviolent" nihilist films as Pulp Fiction and Killing Zoe—well, you can stop.  Torture and mass murder are one thing, but don't even think about stealing one of his ideas.

Screenwriter/director/producer Roger Avary (left) has sued Microsoft for bad faith and breach of implied contract, among other things, claiming that the software titan stole his idea for a video game. The weird thing is that it’s not a Pulp Fiction-esqe shoot-’em-up. It’s a yoga video game, under which a "yoga master" leads student through a "virtual fitness studio."

The complaint (the link is on the right side of this blog about the case) is interesting as a textbook illustration of how disputes like this arise—and the overblown language Hollywood people use when they take meetings on "artistic" concepts.  You can learn more about Avary than you’re likely to want to from his web site.

November 20, 2004 in In the News | Permalink | Comments (0) | TrackBack (0)

Today in contract history—November 20

Edward_i 1272:  Edward I (known as "Longshanks") succeeds his father Henry III as King of England.  Edward (left) will create the Chancery and the Exchequer, and his reforms for the first time bring substantial commercial disputes into the royal courts.  He also passes laws against the Jews, including prohibiting them from lending money.

1847:  From commercial venture to modern town—trading post at Blacksnake Hills officially changes its name to St. Joseph, Missouri.  The former fur trading post will become one of the most important commercial outfitter for the Western expansion.

1866:  Judge Kenesaw Mountain Landis is born.  As a judge, he presides over the Standard Oil antitrust litigation, and later becomes the first Commissioner of Baseball.  He demands, and gets, a lifetime contract.

1967:  President Johnson announces formation of the National Product Safety Commission.

November 20, 2004 in Miscellaneous | Permalink | Comments (0) | TrackBack (0)

Fear stalks Florida

Mercedes_home A Florida homebuilder is creating a what seems to be a reign of terror through the Sunshine State—by suing customers for breach of contract.

"I'm afraid to talk to my neighbors. I'm afraid to walk my daughter to the bus stop. I'm afraid to talk to you right now," said one victim who was sued by Mercedes Homes, Inc., after she distributed flyers to neighbors complaining about poor home construction. A clause in the Mercedes contract prohibits owners from publicly disparaging the workmanship.

"I feel like I'm in a police state. I can't do anything. I have no avenues. I have nowhere to turn," one homeowner said. The last, at least, is an overstatement, since she was at the moment turning to a TV news reporter and meditating a class action lawsuit.

November 20, 2004 in In the News | Permalink | Comments (1) | TrackBack (0)

Ricky Martin settles contract dispute

Ricky_martin Singer Ricky Martin and his manager have settled their contract lawsuit.  Martin originally sued Angelo Medina for $2.5 million, accusing Medina of pocketing unearned commissions

In his counterclaim, Medina—who orchestrated Martin’s climb to stardom—charged the pop idol with breach of contract and sought $63.5 million.

November 20, 2004 in In the News | Permalink | Comments (0) | TrackBack (0)

Friday, November 19, 2004

Today in contracts history—November 19

1493: Christopher Columbus makes his first landing on Puerto Rico. Columbus is best known as the namesake of of the first modern contracts professor, Christopher Columbus Langdell.

1944: President Roosevelt launches the 6th War Loan Drive to raise $14 billion for the war effort.

1985: Pennzoil wins the largest contract-related jury verdict in history, taking $10.5 billion from Texaco.  The case will later settle for an amount that will make the plaintiff's counsel very rich and, later, the law school at the University of Texas very, very happy.

1951: Charles Falconer, later Baron Falconer of Thoroton, is born. He will become the first English Lord Chancellor to refuse to wear the wig and the robe.  Some people just don’t get tradition.

Rm_johnson 1850: Former Vice President Richard Mentor Johnson (left) dies.  Johnson’s lasting work as a Congressman was the abolition of imprisonment for debt in 1832.

November 19, 2004 in Miscellaneous | Permalink | Comments (0) | TrackBack (3)

Surprise: A hockey fight in Canada

Hockey_theme The Canadian national anthem, of course, is Oh Canada. But the song that runs a close second up in the Great White North is the theme song to the popular Hockey Night in Canada. That theme has not been heard much lately, what with the National Hockey League shut down by a lockout.  That’s left Canadians with "serious puck withdrawal," and looking as cheerful as George Soros the day after the U.S. election.

But a fight is brewing over the popular theme.  Composer Dolores Claman and the related entities that control the song have sued the Canadian Broadcasting System for for $2.5 million, claiming breach of contract and copyright violation. The suit says that the CBC improperly used the song in broadcasts outside Canada, in violation of the contract.

November 19, 2004 in In the News | Permalink | Comments (0) | TrackBack (0)

A big experience in a small country

Uruguay The chance to see other cultures and interact with faculty and students who have different perspectives is one of the great things about a Fulbright  grant.  In the forthcoming issue of the AALS Contracts Newsletter, Scott Burnham (Montana) talks about his teaching experiences in Uruguay.

Click the link below for the full story.

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November 19, 2004 in Teaching | Permalink | Comments (0) | TrackBack (0)

Pragmatism v. idealism in the real world

Most contracts teachers know that the connection between the theories we propound and the things that lawyers do in the business world can be a little tenuous.  In a new paper, Contracts, Contingency and Lawyers as Leaders: Moral Philosophy in Complex Business Transactions, Jeffrey Lipshaw (Senior V.P., Secretary, and General Counsel of Great Lakes Chemical Corp.) argues that pragmatic accounts of law do not line up with the realities of practice in sophisticated transaction, and he turns to philosophical models—particularly that of Kant—for a better account.

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November 19, 2004 in Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

A Tale of Two Apples

Rachel_1The battle between Apple Corps, the Beatles' record label, and computer-maker Apple Corp., is a cautionary tale about how changes in technology can undo the most carefully crafted agreements.

In her Contracts in Popular Culture column in the forthcoming issue of the AALS Contracts Newsletter, Rachel Arnow-Richman (Denver) takes a look at the clash of icons.  Click on the link below for the full story.

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November 19, 2004 in Commentary | Permalink | Comments (0) | TrackBack (1)

Thursday, November 18, 2004

The Carnival Cruise Song (with apologies to John Denver)

Carnival_cruise From the files of the Department of Contract Musicology, Cheryl Preston (BYU) offers a ditty about the Supreme Court's most famous standard-form contract case.

Tenors should sing it in the key of G . . . .  Click on the link below for the lyrics.

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November 18, 2004 in Miscellaneous | Permalink | Comments (0) | TrackBack (0)

This date in contracts history—November 18

William_caxton 1477:  William Caxton (left) produces the first English book on a printing press.  Four hundred years later, printing will reach its zenith with the modern law review.

1836:  Sir William S. Gilbert is born.  He will go on to write the libretto for Trial by Jury, perhaps the funniest operetta ever written about a breach of promise action in the Court of Exchequer.

1903:  The United States makes a major land deal, acquiring the Panama Canal Zone for $10 million in the Hay-Bunau Varilla Treaty.

1928:  Mickey Mouse is born with the release of Steamboat Willie.  Seventy-six years later he’s still not in the public domain.

1938: John L. Lewis is elected the first president of the new Congress of Industrial Organizations.

November 18, 2004 in Miscellaneous | Permalink | Comments (0) | TrackBack (0)