ContractsProf Blog

Brooklyn honors Cohen

Brooklyn Law School's BLS LawNotes magazine carries a profile of Neil Cohen, who has been named the school's first Jeffrey D. Forchelli Professor of Law.  Cohen, who has taught at the school since 1985, is a noted expert on contracts, commercial law, and, more importantly, baseball.

The article does not appear to be online, but here's a release from the school.

News in brief

African American leaders are discussing whether to put forward a "contract with black America" as a test for political leaders.

It's common enough for people to ignore the fine print in the contracts they sign, and in New Hampshire it seems that public officials do much the same thing.

A citizens' group in Durham (N.C.) is pressuring the city's largest employer, Duke University, to see that its contract workers get enough to "afford food, clothing and electricity."

A new survey of employers suggests that with the improving economy they are willing to be a little more generous in contract negotiations, except in explosive, high-cost areas like health benefits.

Iron ore prices have risen more than 70 percent this year, putting tremendous pressure on steel producers in an uncertain economy.

The U.K.'s Ministry of Defence is about to award a record-breaking £4 billion IT contract to a consortium led by America's EDS and Japan's Fujitsu.

School, physician in non-compete dispute

Judges are not usually sympathetic to employee non-competes involving physicians, and it looks like judges in Iowa are going to get a crack at one that looks awfully broad.  The University of Iowa and a plastic suregon are locked in a dispute that arose when Dr. Al Aly left the UI hospitals, where he had been since 1997, to help start Iowa City Plastic Surgery in Coralville.

Under the employment contract, Dr. Al Aly agreed not to "practice medicine" for two years within a 50-mile radius of "any" UI health facility.

Weekly Top 10

The Top 10 Contracts-Related downloads from the SSRN network, for the 60 days ending February 27:

1.  Emerging Policy and Practice Issues, by Steven L. Schooner & Christopher R. Yukins

2.  Rawls and Contract Law, by Kevin A. Kordana & David H. Tabachnick

3.  Unity and Pluralism in Contract Law, by Nathan Oman

4.  Private Motive and Perpetual Conditions in Charitable Naming Gifts: When Good Names Go Bad, by John K. Eason

5.  The Doctrine of Good Faith in Contract Law: A (Nearly) Empty Vessell?, by Emily Houh

6.  Allegheny College Revisited: Cardozo, Consideration, and Formalism in Context, by Curtis Bridgeman

7.  Law and the Emotions: The Problems of Affective Forecasting, by Jeremy A. Blumenthal

8.  The Limits of Lawyering: Legal Opinions in Structured Finance, by Steven L. Schwarcz

9.  Towards a New Model of Consumer Protection: The Problem of Inflated Transaction Costs, by Jeff Sovern

10.  Fairness and the Optimal Allocation of Ownership Rights, by Ernst Fehr, Susanne Kremhelmer & Klaus M. Schmidt

Well, they're not exactly "late fees"

Blockbuster Video's ballyhooed "no late fees" promotion has, it seems, a little hitch in it.  And the hitch has got it into hot water with the New Jersey Attorney General's Office.  Turns out that Blockbuster's contract provides that after eight days, late rentals are merely converted into sales.  The AG's office say Blockbuster says that this wasn't disclosed to consumers.  Blockbuster apparently disagrees.

Want to visit St. Pete, anyone?

From the good folks at Stetson:

Stetson University College of Law is in need of visitors for the Summer 2005 session (end of May through mid-July), and the 2005-06 academic year.  For the Summer session, we need some combination of the following courses: Contracts, Criminal Law, Constitutional Law, Property, or Professional Responsibility.  For the Fall 2005 and Spring 2006 semesters, we are looking for a Contracts (with a possibility of Commercial Law) visitor.  We may also need a Property visitor for Fall 2005.

For info, contact Associate Dean Theresa Pulley Radwan.

In defense of Allegheny College

All of Judge Cardozo's contracts opinions are interesting, but few have aroused as much interest over the years as Allegheny College v. National Chautauqua County Bank, the decision that held that consideration is unnecessary to support charitable pledges.  Or maybe in didn't hold that, exactly.  Actually, does anyone know exactly what it held?  Anyone?

As Curtis Bridgeman (Florida State) argues in an interesting new paper, Allegheny College Revisited: Cardozo, Consideration, and  Formalism in Context, few of old Ben's opinions have been so widely criticized, even by people who applaud the outcome.  Bridgeman sets out to rectify this, mounting a sustained defense of the opinion and replying to much of the criticism.  Click on the link for the abstract.

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Today in history--February 28

1828: The Baltimore & Ohio Railroad is incorporated.  It will be the first railroad to offer both passenger and freight carriage.

1849: Regular steamship service between America's two coast begins, as the S.S. California reaches San Francisco from New York after 4 months and 21 days.

1850: The University of Deseret, the forerunner of the University of Utah opens in Salt Lake City.

1854: A group of Whigs and antislavery Democrats meets at Ripon, Wisconsin, and creates the "Republican" party.

1875: Sir Goldsworthy Gurney, who built the first successful steam-powered passenger road car, dies at age 82.  He had opened a successful London-to-Bath car service, but fear for the loss of jobs in the horse carriage industry led to it being taxed out of existence.

1885: The American Telephone & Telegraph Co. is incorporated in New York as a subsidiary of American Bell Telephone.  Its mission: Develop a national long-distance system.

1955: Webb Pierce's version of Jimmy Rodgers's In the Jailhouse Now tops the U.S. country music charts.

1983: The final episode of M*A*S*H becomes the highest-rated television series episode of all time.

Hofstra looking for visitors

Hofstra Law School is looking for visitors for the 2005-06 year.  They need a wide range of subjects, including Contracts, Commercial Law, Bankruptcy, Civil Procedure, Con Law, Wills Trusts & Estates, Federal Income Tax, and Criminal Law. Contact Vice Dean Marshall Tracht if interested.

Today in history--February 27

1812: George Gordon, Lord Byron, a classmate of Baron Alderson at Cambridge, gives his first speech in the House of Lords, defending Luddite violence against industrial machinery.

1844: Lawyer and financier Nicholas Biddle, who presided over the Second Bank of the United States before it was destroyed by President Jackson, dies at Philadelphia.  He was valedictorian of his class at Princeton at age 15.

1886: Hugo Lafayette Black (Alabama Law 1906) is born at Harlan, Alabama.

1891: David Sarnoff is born at  Uzliany in what is now Belarus.  He will join the Marconi Wireless Co. as a telegrapher at age 15, and at 28 will become the General Manager of the new Radio Corporation of America, leading RCA until his death in 1970.

1900: Meeting at Memorial Hall in London, Britain's Trade Union Congress creates the "Labour Representation Committee," the forerunner of the Labour Party.

1922: In Leser v. Garnett, the U.S. Supreme Court finds the 19th amendment to the U.S. Constitution to be, well, constitutional.

1936: The world's most famous dog trainer, Ivan Petrovich Pavlov, dies at age 86.

1951: The 22nd amendment to the U.S. Constitution, which ensures that presidents will be lame ducks during their second terms, is ratified.

1974: Time, Inc., launches People magazine.

2004: The founder of the Monthly Review, Marxist economist Paul Marlor Sweezy, dies at 93, still waiting for the Revolution.

Professor Spotlight: Lisa Bernstein

Ever since Mills v. Wyman, the first case of her first semester at law school, Lisa Bernstein (Chicago) knew that she wanted to spend her life teaching contracts.

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Today in history--February 26

1797: The Bank of England issues the first one-pound banknote.

1808: Honoré Daumier, the French illustrator whose legal prints grace almost as many law offices as the ABA Journal, is born at Marseilles.

1829: Levi Strauss, future San Francisco gold rush dry-goods merchant and inventor of copper-riveted denim work pants, is born at Buttenheim, Bavaria.

1863: President Abraham Lincoln signs the National Currency Act, which creates the Office of the Comptroller of the Currency.

1870: Alfred Beach opens a pneumatic subway in New York, but the technology is disappointing and the venture is a failure.

1921: Economist and lawyer Carl Menger, whose Grundsätze der Volkswirtschaftslehre in 1871 is regarded by many as the start of the "Austrian School," dies at 81.

1932: Singer Johnny Cash is born at Kingsland, Arkansas.  Auditioning for Sam Phillips at Sun Records in 1954, he will sing gospel songs.  Phillips will tell him to "go home and sin, then come back with a song I can sell."

1991: Timothy John Berners-Lee develops the WorldWideWeb while working for the European Organization for Nuclear Research.

1995: England's oldest merchant bank, Barings Bank (founded in 1762) collapses after a single trader loses $1.4 billion gambling on derivatives.  It subsequently is sold to ING for £1.

Film clips

Yes Minister (BBC), "The Quality of Life," March 30, 1981

[Talking about a bank's building plans for a new skyscraper]

James Hacker: I see, it's just profits, isn't it, Sir Desmond?
Sir Desmond Glazebrook: Not just profits, it's profits.
Hacker: Don't you think of anything but money?
Glazebrook: No, why?
Hacker: What about beauty?
Glazebrook: Beauty?  This is a building, not an oil painting.
Hacker: And the environment?
Glazebrook: Oh yes, I promise you we'll make sure it is part of the environment. It is bound to be once it's there, isn't it?

Implied term can't conflict with express term

An implied "good cause" termination clause in a contract is inconsistent with an express clause that provides the employee may be fired on one month’s notice, according to the Irish High Court.

The employer, claiming a sluggish market, made 12 of 130 employees "redundant" and laid them off.  The employee challenged that decision, claiming that it was "expressly or impliedly promised" that he would be fired only for cause.  The contract, however, said nothing about grounds for termination.

The court, by Justice Mary Laffoy, held that the just cause termination provision was inconsistent with the express terms of the employment contract, and that the express terms controlled. The court did, however, find an implied promise not to terminate the contract for one year after the plaintiff had accepted an assignment to Uruguay.

McGrath v. Trintech Technologies Ltd., [2004] IEHC 342.

It's catchy and you can dance to it

From the Department of Contracts Musicology, this from Ben Davis's student Kate Hamilton at Toledo:

8 Ways to Avoid Enforcement

(to the tune of Paul Simon's 50 Ways to Leave your Lover)

You're just a Kid, Sid
They Misrepresent, Brent.
Under Duress, Jess, they Influenced me.

Make like you're Nuts, Gus,
And they didn't Discuss much
Unconscionability,
And Bad policy.

Today in history--February 25

1836: Samuel Colt receives a patent for his new multi-shot pistol, called a "revolver. "God made all Men," the saying goes, "but Col. Colt made them equal."

1845: George Houstoun Reid, a barrister who will become Australia's fourth prime minister, is born at Johnstone, Renfrewshire, Scotland.

1870: Hiram Rhoades Revels (R-Miss) becomes the first African-American elected to the U.S. Senate, filling the seat vacated in 1861 by Jefferson Davis.

1888: John Foster Dulles (George Washington Law 1911) is born at Washington, D.C.

1899: Paul Julius Baron von Reuter (born Israel Beer Josaphat), the founder of the the international Reuters news agency, dies at a villa in Nice, France.

1901: Financier J. P. Morgan incorporates United States Steel Corp. It turns out to be a bad long-term investment, since its net worth today (as USX Corp.) is less than its original 1901 capitalization.

1913: The 16th amendment to the U.S. Constitution is ratified. It creates the federal income tax.

2003: Tom O'Higgins, former Chief Justice of Ireland and twice candidate for president, dies at age 86.

2004: The biggest surprise hit in movie history, Mel Gibson's Passion of the Christ, opens on Ash Wednesday.  Estimates are that Gibson will net some $400 million from the film, which is the ninth nighest-grossing film in U.S. history.

News in brief

The European Aeronautic, Defense and Space Company (the Airbus folks) has apparently won "preferred bidder" status on a new British Royal Air Force contract worth some $25 billion.

Oakland Raiders owner Al Davis won't get a new trial of the verdict that he does not own the rights to a Los Angeles football franchise from the National Football League.

Groups in Liberia are protesting the transition government decision to grant a 38-year extension on Firestone Tire & Rubber's long-standing rubber concession.

Radio personality Howard Stern and Clear Channel Communications have settled the contract actions that arose when the company dropped Stern from several of its stations.

A South Carolina school board is suing a former school psychiatrist for breach of contract and return of all salary paid after it discovered that she forged her diploma and other professional credentials.

The Pakistan Cricket Board has fined fast bowler Shoaib Akhtar for breaches of contract during an Australian tour, including visiting nightclubs, issuing press releases without club approval.

Students debate big question: Coke or Pepsi?

Students at Rutgers University in New Brunswick are holding a public meeting today to decide who’ll get the school's 10-year soft drink contract.  Under the previous contract, signed in 1994, Coca-Cola paid the University $1 million a year to be the exclusive beverage provider. The local AAUP chapter, however, has condemned Coca-Cola for its alleged labor practices in Colombia.

Some students, however, just want a choice.  One noted that offering Coke but not Pepsi would be at odds with the University philosophy—"We are supposed to be about diversity," he said.

It's not nice to fool Mother Nature

The Breyer’s "All Natural Ice Cream" folks are being sued because they use milk that has been enhanced by growth hormones.  A class action complaint has been filed in a Missouri state court. The suit also names a retail seller, Schnuck’s Markets, Inc.

The case may raise a nice interpretation issue.  Breyer’s, a unit of the European Unilever combine, allegedly advertises that it uses "only the finest ingredients from all natural sources in the manufacture of Breyers All Natural Ice Cream."  On its web site, it carries a "Pledge of Purity," which "means there are only pure ingredients—just natural, delicious taste."  The plaintiffs, however, claim that the milk used by Breyer’s contains "recombinant bovine growth hormone (rBGH), antibiotics and other synthetic ingredients."  The action alleges fraud, breach of contract, and unjust enrichment.

Magic words don't work

While putting the phrase "subject to contract" in a proposal will usually defeat the creation of an executory contract, one will still be found if the subsequent conduct of the parties demonstrates that they have concluded the deal, according to a recent decision by Britain's Queen's Bench.

In the case, both plaintiff and defendant signed a proposal for cleaning services which incorporated plaintiff’s standard terms, but also said it was "subject to contract."  Except in a very strong and exceptional case, held Justice Field, those words prevent an executory contract from coming into force.  But that standard was met in the case, he ruled, because because both parties subsequently engaged in the activities specified by the contract: the cleaner cleaned and the buyer paid.   The Rugby Group Ltd. v. Proforce Recruit Ltd. (QBD Feb. 2, 2005).

Bahamian lawyer Errol Niles has some thoughts on the case here.