ContractsProf Blog

Nugent v. Muskegon: Day 5

Representatives of the Muskegon Summer Celebration testified yesterday that it was their fear of protesters that led to their cancellation of Ted Nugent's appearance at their 2003 event.  According to the Muskegon Chronicle, Festival Executive Director Joe Austin testified that he had "grave concerns" about security if Nugent performed.  Various news media had reported that Nugent used racially offensive language in a radio interview; Nugent denies he did so.

Austin said that the Festival had tried to get a copy of the broadcast, but that it apparently did not exist, and since it was on a short deadline it chose to "withdraw its offer" before the written contract was signed.

Closing arguments in the trial are scheduled for today, and the case will go to the jury.

Kansas Stands Alone (Again) - Corrected

Having observed the webcast of today's very congenial hearing before the Nevada Senate Judiciary Committee, in which everyone who appeared or submitted written comments on the 2003 amendments to Articles 2 and 2A resoundingly opposed it, and having had a follow-up conversation with the senator with whom I have been communicating about the various UCC issues on the Nevada Legislature's plate this session, I think it is safe to say that Nevada SB 200 (i.e., the 2003 amendments to Articles 2 and 2A) is now dead.

This leaves Kansas where it was before Nevada SB 200 surfaced a couple of weeks ago, as the only state to be considering adopting the 2003 amendments to Articles 2 and 2A this session.  And, having scoured the Kansas Legislature's web site, I see no evidence that the Kansas House has made any progress on either HB 2454 (Article 2) or HB 2455 (Article 2A) since they were referred to the Judiciary Committee in mid-February.

News in brief

Britain’s Cable & Wireless is denying that it has terminated its sponsorship contracts with two West Indian cricket stars.
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Dubai is getting ready to award a multi-billion dollar contract to start construction of its urban light rail system.
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The empire of contract is extending into a place that few would have predicted back when Grant Gilmore was predicting its death: the Russian armed forces.
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Rutgers students are organizing against a renewal of the school’s exclusive beverage deal with Coca-Cola.
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Two college basketball coaches coming off big seasons get new deals: Kim Mulkey-Robinson of Baylor (6 years)  and John Beilein of West Virginia (a two year extension)

Licenses: Theater ticket isn’t a contract

A plaintiff injured by a falling piece of ceiling can’t use a contract theory to get around the provisions of Colorado’s premises liability law, says the state’s court of appeals.

In the case, the plaintiff was hit by a falling acoustic tile in defendant’s movie theater. After he had blown the tort statute of limitations, the plaintiff sued, claiming something called "negligent breach of contract." His theory apparently was that plaintiff had a contractual duty to maintain a safe place for patrons. Since this was a contract, not a tort, he argued, the longer contract statute applied.

Nice try, but no cigar, said the court. A movie ticket is a license, not a contract. The defendant’s only obligation under the license was to admit him to watch the movie, and his only riemedy for breach of the license would be a refund. The defendant’s obligations as the operator of the premises were based in tort, not contract, so the action was untimely.

Sweeney v. UA Theater Circuit, 2005 Colo. App. LEXIS 341 (March 10, 2005)

Today in history—March 31

1596: René Descartes, who will earn his Baccalauréat and Licence in law from the University of Poitiers in 1616, is born at LaHaye, France.

1742: Composer P.D.Q. Bach is born at Leipzig.  Among his greatest works are his cantata Iphigenia in Brooklyn, the opera Hansel and Gretel and Ted and Alice, and his beloved Fanfare for the Common Cold.

1774: The Boston Port Act, which closes the port to shipping until restitution is made to the East India Company for loss of its product in the "Boston Tea Party," goes into effect.

1854: With Commodore Matthew Perry's warships in the harbor near Tokyo, the Japanese government agrees to permit U.S. trade through the ports of Shimoda and Hakodate, ending 200 years of seclusion.

1889: The Eiffel Tower is inaugurated in Paris.  In 1926, installation of three huge illuminated Citroën signs will make it the world's tallest advertising billboard.

1913: Financier and banker John Pierpont Morgan, who acted as a U.S. Federal Reserve before the government established one, dies at Rome, Italy.

1935: Trumpeter Herb Alpert is born at Los Angeles.  At one point his Tijuana Brass will outsell the Beatles in the U.S. 2-to-1 (with four albums in the top 20 simultaneously), and he and partner Jerry Moss will sell their A&M Records to Polygram in 1989 for $500 million.

1948: Vice President Albert Arnold Gore, Jr. (Vanderbilt Law, did not graduate), son of Tennessee Senator Albert Arnold Gore, Sr., is born at Washington, D.C.

1967: Jimi Hendrix becomes the first rock star to set fire to his guitar at a concert in London. He subsequently must be treated for burns to his hands at a local hospital.

1968: Article 2 of the Uniform Commercial Code goes into effect in Mississippi.

1991: The Warsaw Pact comes to an end about fifty years before experts had expected it to.

News in brief

A decision seems imminent on the city of Anaheim’s claim that its baseball team breached its contract by changing its name to "Los Angeles Angels."
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Insurer AIG is saying that a contract with Warren Buffett’s Berkshire Hathaway was apparently something of a sham transaction, and had the result of inflating the company’s earnings.  Meanwhile, Buffett’s role in the transaction is being investigated by New York Attorney General Elliott Spitzer.
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The former coach of the Valencia soccer team, fired with two years left on his contract, will go to court to claim the $10.5 million balance on his contract.
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Ontario physicians have approved 3-to-1 a new four-year contract, giving them raises of from 2 to 2.5 percent and removing caps on the amount they can bill the government.
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The "winners" in the New York Daily News’'s ill-fated Scratch-n-Match game—there apparently are several thousand of them—are stepping up the pressure to force the paper to honor misprinted winning tickets.
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The estate of the late rapper Ol’ Dirty Bastard is has filed a $1.8 million breach of contract suit against a Florida promoter.

Writings: Indemnification agreement need not be signed

Our friends at the New York Civil Law blog are reporting on a new decision by the Empire State's highest court, involving contractual indemnification agreements in workers' compensation claims.  In the case, Flores v. Lower East Side Service Center, the court held that a contract had been formed even though the contract document had not been signed.

Nugent v. Musegon: Day 4

Guitarist Ted Nugent was on stage yesterday in a Muskegon, Michigan, courtroom, as he took the stand in his lawsuit against a festival that canceled his appearance in 2003.

Nugent denied making racial slurs to two Denver disk jockeys, reports of which led the Muskegon festival to drop him from the bill.  The "Motor City Madman," who comes from the Detroit area, said he had been particularly disappointed because he'd planned a family get-together at the Michigan event.

Conditions: Failure to comply dooms buyer’s claim

A buyer who fails to comply with a condition precedent cannot sue for the seller’s breach of the agreement, says the U.S. Court of Appeals for the Fourth Circuit.

In the case, Lockheed agreed to sell one of its operations to BTN.  In reliance on the agreement, BTN took several actions, including ordering telephone service and acquiring insurance.  The agreement, however, required BTN to demonstrate that it had "resources and assets necessary and sufficient to conduct the [transferred business] and to perform its obligations and Contracts."  After BTN had trouble getting financing, Lockheed demanded evidence that it was in compliance.  When BTN failed to satisfy Lockheed, the seller terminated the deal and sold the unit to someone else.  BTN sued, claiming breach of contract and reliance.

Under Maryland law, said the court, there is no duty under a contract if a condition precedent is unfulfilled.  Here, there was no factual dispute that BTN was not in compliance with its obligations.  Lockheed had no duty to go forward, and thus neither tort nor contract claims would lie against it.

Bi-Tech North, Inc. v. Lockheed Martin Corp., 2005 U.S. App. LEXIS 4026 (4th Cir. March 10, 2005).

Law & feminism at Davis

This Friday, April 1, the U.C. Davis Law Review is hosting The Future of Critical Race Feminism. The day-long session runs from 9:00 to 4:30 in Davis’s Moot Courtroom. The four panels are titled, "Race, Sex, and Working Identities," "Color, Feminism, and the State," "Deconstructing the Image Repertoire of Women of Color," and "Defining the Voices of Critical Race Feminism."

WTC insurance dispute makes top 10 list

Law.com’s list of the top ten defense wins of 2004 has only one contract dispute on it, but that one was a doozy.  The online journal picked Swiss Re’s court victory in its insurance coverage dispute with the World Trade Center owners as one of the year’s biggest victories.  In the case, the WTC owners had claimed that the two planes that crashed into the two towers were two separate occurrences under the policy, while Swiss Re successfully argued that it was only one.  Swiss Re was represented by Barry R. Ostrager and Mary Kay Vyskocil of Simpson Thacher & Bartlett.

Three other business-related cases made the top-ten, including Latham & Watkins’s successful antitrust case for Oracle Corp. in its bid for PeopleSoft (voted number one), Fish & Richardson’s win for Microsoft in a major patent dispute, and Orrick Herrington’s defense of Union Carbide in a fraud action by Kelly-Moore Paint.

Today in history—March 30

1855: Representing the North American Insurance Co., attorney Abraham Lincoln loses when a Springfield (Ill.) jury returns a $2,000 verdict for the plaintiff.

1858: One of the great convenience inventions is made as Hiram Lipman of Philadelphia patents the pencil with an attached eraser.

1867: The United States purchases Alaska from Russia for $7.2 million, or about two cents an acre. Most of this press thinks that the price is way too high.

1926: Ingvar Kamprad, a dyslexic who will start selling matches from a bicycle and later found the IKEA furniture empire, is born at Agunnaryd, Sweden.

1931: Rupert Whitehead, whose wife Blanche is ailing, invites Caro and Frank Davis to come to California to care for her; the subsequent dispute will become Davis v. Jacoby.

1951: Remington Rand delivers the first UNIVAC I computer to the U.S. Census Bureau.

1964: The television show Jeopardy debuts for the first time.

1970: Secretariat is born at Caroline County, Virginia. He will enjoy the fruits of his Triple Crown career by getting to sire more than 600 foals.

1986: Actor James Cagney, who never actually said, "You dirty rat!" in a film, dies at Stanfordville, New York.

1987: Illustrating the fact that great art is priceless, Vincent Van Gogh's painting "Sunflowers" is purchased for about $40 million.

Foreseeable damage?

Four male models who were hired to pose as "abusive husbands" in a series of New York ads are suing, claiming that the city breached its contracts with them by leaving the posters up past the original five-week period promised.

It's an interesting damages question, because the models' claim is that the posters have been up so long that people have started to believe they're actually abusive husbands.  The four were paid between $1,500 and $2,000 to appear in ads that picture them behind bars with legends like "Successful executive. Devoted churchgoer. Abusive husband."

The ads were originally done in 2002, and were supposed to be up only five weeks.  But though the men have been trying to get them taken down for more than two years, some are still on display.  Even acquaintances are now starting to think that the men really are wife-beaters.  One model lost his contract, and the others say they can't get work.

The four are claiming $1 million each in damages as a result of the city's breach.  (Thanks to How Appealing for the link.)

News in brief

Trial resumes today in the breach of contract action between rocker Ted Nugent and a festival in Muskegon, Michigan.
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The Tokyo Metropolitan Symphony Orchestra is becoming the country’s first to move toward a performance-based (no pun intended) wage system, under which some employees will see their pay based on annual performance evaluations.
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Two oil firms are going to court over contract claims in a busted drilling project in Kentucky.
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A Portuguese consortium will today sign a 35-year contract to complete, maintain, and operate Bulgaria’s main southern highway.
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The U.S. State Department says it will limit bidders for its proposed new five-year, $300 million IT service support contract to small businesses.
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U.S. and European bidders are complaining about the terms the Turkish government wants to include in its upcoming contract to buy 30 attack helicopters.
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The Australian Tax Office is backing off on plans to put its computer contract out for bids, because it says it’s too become too dependent on the existing vendor, America’s EDS, to allow for a change.

Richards to visit at TWU

Clark Richards, of Jackson Walker LLP’s office in Austin, will join Texas Wesleyan School of Law as a visiting associate professor teaching Contracts next fall.

Richards earned his B.A. in economics from Northwestern and his J.D. in 1997 from the University of Texas, where he was elected to the Order of the Coif.  Richards has an international bent; he’s fluent in Japanese and has an LL.M. from the University of London.  Before going into practice he was a law clerk to the Hon. Thomas M. Reavley on the U.S. Court of Appeals for the Fifth Circuit.  He has written in the areas of media and technology law and construction litigation.

Coming home to roost

Contract chicken-raising is a big business.  About 90 percent of U.S. chickens are raised in a system in which big companies like Tyson, Perdue, and Pilgrim’s Pride provide the chicks and the feed and pay farmers to raise them, with the payment formula based on weight.  The farmers are responsible for the chicken houses, labor, electricity, and heat.

It’s a tough business, and the interests and while some farmers flourish, others go bankrupt.  The economics of the business and some of the issues regarding the fairness of the process to farmers are the subject of an interesting article in the Fort Worth Star-Telegram.

Unilateral offers: No ambiguity in casino’s offer

Signs around a casino slot machine constituted an offer for a unilateral contract that was accepted when the patron played the game, says the U.S. Ninth Circuit Court of Appeals in a new unpublished decision.

The patron pulled the lever and won a $644,000 jackpot.  That created a contract between the parties, said the court.  At issue, however, were the terms.  The patron wanted to be paid the full amount up front.  The casino argued that this amount was to be paid over 25 years, pointing to a placard on the front of the machine, which said "Progressive jackpot paid in equal installments.  First installment paid upon validation of win. Balance paid in 25 annual installments."  The patron pointed to signs advertising the jackpot that made no mention of this.

Nevertheless, summary judgment was appropriate for the casino, said the court. There was no conflict between the jackpot signs and the placard; none of the jackpot signs mentioned how the payout would be made.  Since the casino had tendered the initial payment and offered a $253,000 discounted-value buyout, it was not in breach of the contract.

Semaan v. IGT, 2005 U.S. App. LEXIS 4081 (9th Cir. March 8, 2005)

Today in history—March 29

1638: Under auspices of the New Sweden Company, an expedition under Peter Minuit establishes the first European settlement in what is now Delaware, which the new colonists call Nya Sverige, or "New Sweden."

1790: Virginia lawyer and future President John Tyler is born, the son of Governor John Tyler, at Charles City County, Virginia.  His two vetoes of Henry Clay's proposed national banking act will lead to him becoming the only sitting U.S. president to be expelled from his own political party.

1806: The first U.S. national highway, called the Great National Pike (but better known as the Cumberland Road) is authorized, to run from Cumberland, Maryland, to what is now Vandalia, Illinois.

1867: Queen Victoria gives Royal Assent to the British North America Act, which will establish the Dominion of Canada.

1918: Samuel Moore Walton, who will turn a single Ben Franklin franchise store in Newport, Arkansas, into the world's largest retailer, Wal-Mart, is born near Kingfisher, Oklahoma.

1955: Future Football Hall of Famer and sausage impresario Earl Campbell is born at Tyler, Texas. His "Earl Campbell Hot Links" are about the best thing you can put on a bun.

1972: Joseph Arthur Rank, the Methodist Sunday School teacher who started his own film company to make "family oriented" films that would compete with "crass" Hollywood Productions and built it into the Rank Organisation, dies at Winchester, Hampshire.

1961: The 23rd amendment to the U.S. Constitution is ratified.  Who knows which one this is?

1993: Catherine Callbeck becomes the first female premier in Canadian history when she becomes premier of Prince Edward Island.

1999: The Dow Jones Industrial Average crosses the 10,000 mark for the first time.

News in brief

Supermodel Heidi Klum has lost a contract has her contract with Germany's largest mail order firm terminated because she's pregnant with her second child.

A real estate developer is charging the Canadian government with rigging a bid process to steer a contract to a higher-priced bidder.

Actress Uma (Kill Bill) Thurman has signed a "multi-million dollar contract" to be the "new face" of Louis Vuitton luggage.

Ontario's physicians are voting today on a new contract with the government, and the result seems too close to call.

Film Clips

From A League of Their Own (1992):

Jimmy Dugan:   All right, everyone, let's listen up now, listen up.  Something important has just happened.  I was in the toilet reading my contract, and it turns out, I get a bonus when we get to the World Series.  So, let's play hard, let's play smart, use your heads.