ContractsProf Blog

Quote of the day

He who sells
What isn’t his’n,
Must buy it back
Or go to prison.

               Daniel Drew (1797-1879)

(Drew himself proved the force of his dictum when he lost $500,000 to Cornelius Vanderbilt selling shares he didn't own in the New York & Harlem Railroad.)

News in brief

Two computer game firms have settled their battle over the licensing contracts for the popular Half-Life and Counter-Strike video games.

The winners of a Spanish knock-off of TV’s American Idol are suing the producers who, they say, failed to put them in the films they were promised if they won.

A California judge has refused to put a lien on Michael Jackson’s Neverland Ranch in favor of a former business association who claims the entertainer owes him $3 million.

India Brewers is suing Miller Brewing over allegations the Milwaukee firm improperly canceled its 10-year-license on trumped-up claims of "deficiencies" at India’s facilities.

An airline that refused to honor a Kenyan academic’s ticket, confiscated his passports, and held him for 12 hours has been hit by a Kenyan court with 900,000 shillings (about US$12,000) in damages.for its "cruel and incivil" conduct.

Choreographer Christopher Wheeldon has settled his breach of contract action against the Colorado Ballet, after the troupe canceled his new Alice in Wonderland because it would cost too much to stage.

Comedian Tommy Chong is being sued for breach of contact by the producers of The Marijuana-Logues stage show after he withdrew to avoid violating his parole from prison on charges of selling drug paraphernalia.

’Fess up more quickly, say Feds

The U.S. Consumer Product Safety Commission is "flexing its muscles" by imposing unprecedented large fines on evildoers, according to a recent client letter from Powell Goldstein LLP.  The authors, William V. Custer and Vo E. Johnson, note that the biggest problems seem to be delays in notifying the agency of potential problems, and caution businesses to err on the side of reporting possible defects.

Today in history—April 30

1812: The former Orleans Territory is admitted to the Union as the 18th state, under the name "Louisiana."

1883: Painter Édouard Manet dies of syphilis.  His quick "impressionist" style launched a revolution by allowing artists to produce more paintings more quickly and make a living selling them to the bourgeoisie instead of relying on patronage of the wealthy.

1900: The Hawaii Territory is organized with Congressional passage of the Hawaii Organic Act.  Lawyer Sanford Ballard Dole, a cousin of the fruit magnate who had been President of the Republic, becomes its first Governor.

1925: The investment house of Dillon Read & Co. buys the Dodge Brothers Motor Vehicle Co. for $146 million (about $1.5 billion today), in what is said to be the largest cash acquisition in history to date. It will sell the company to Chrysler three years later.

1900: An engineer for the Illinois Central Railroad, John Luther "Casey" Jones, becomes a folk hero when he stays at the switch when his Cannonball, southbound from Memphis at 70 miles an hour, hits a freight train at Vaughan, Mississippi.

1933: Singer Willie Hugh Nelson is born at Abbott, Texas. At age 57 he’ll owe the IRS $16.7 million in unpaid taxes, and will have to record a new album solely to help pay off the tab.

1938: Warner Bros. releases a cartoon called Porky’s Hare Hunt, which introduces an unnamed rabbit.  The rabbit will turn out to be popular and will later be named for the cartoon’s director, Ben "Bugs" Hardaway.

1939: Nearly 200,000 people crowd opening day at the New York World’s Fair in Flushing.  It's the brainchild of a group of local businessmen looking to spark economic growth.  It works, since over the next six years America’s economy will be running at full clip.

1944: Actress Jill Clayburgh is born at New York City. In First Monday in October (1981), she’ll play the first female Supreme Court justice to be shown nude in a shower.

1947: President Truman signs the legislation returning Hoover Dam to its original name.  President Roosevelt’s administration had changed the name from Hoover to "Boulder" shortly after taking office.

1948: The Organization of American States is founded at Bogotá, Colombia.

1948: The Rover Co. introduces the "Land Rover" at the Amsterdam Auto Show. Originally designed out of parts from the U.S. Willys Jeep, the car line will be bought by Ford in 2000.

1956: Former Vice President Alben William Barkley (Virginia Law 1900), dies of a heart attack while giving a speech at Washington & Lee University.

News in brief

The Bank of Ireland's ATM machines will have cash in them this holiday weekend after all, as Brinks agrees to continuecash deliveries pending resolution of its dispute with the bank over liability for armed robberies.

The Pentagon is threatening to terminate Boeing's $15 billion contract to upgrade and replace military radio systems, for alleged failures to meet "cost, schedule, and performance requirements."

An Ontario race track will be allowed to go forward with its season although it still has not reached a contract with the association representing horse owners, trainers, drivers, and caretakers.

The Bangor Lumberjacks of the Canadian-American baseball league have folded after the league yanked the franchise.

Marconi Corp. has lost a $20 billion contract everyone had expected it to get from its biggest client, BT Group (the British Telecom).

La-Z-Boy, Inc., has sold its office furniture business to the Indiana family that owns Best Home Furnishing.  Terms were not disclosed.

New Hampshire state workers, without a contract for two years, have reached agreement on a new one, giving them annual 2 percent raises for three years.

Nutmeg court ponders liability waiver

The Connecticut Supreme Court is pondering the question whether a ski-area operator can enforce the waivers it requires customers to sign.  A report in the Connecticut Law Tribune outlines the arguments in the case, Hanks v. Power Ridge.

In it, an insurance salesman and his 12-year-old son went snow-tubing.  The resort required them, as a condition of doing so, to sign a contract that noted that "serious physical injury or death" can result from the activity, and said that "I fully assume all risks associated with Snowtubing, even if due to the NEGLIGENCE of" the resort.  Dad thought that the language was "so egregious" that no court would enforce it, so he signed.  He was later injured, and claimed that the slopes were negligently designed.

Some states have statutes making such waivers enforceable, but Connecticut will apparently have to decide the issue on common law grounds.

Top mysteries of 2004

For lawyers and academics who indulge a taste for crime fiction, here's the list of this year's Edgar Awards, as voted by the membership of the Mystery Writers of America:

Best Novel:
California Girl by T. Jefferson Parker

Best First Novel by an American:
Country of Origin by Don Lee

Best Paperback Original Novel:
The Confession by Domenic Stansberry

Best Critical/Biographical Work
The New Annotated Sherlock Holmes: The Complete Short Stories edited by Leslie S. Klinger

Best Fact Crime
Conviction: Solving the Moxley Murder: A Reporter and a Detective's Twenty-Year Search for Justice by Leonard Levitt

Best Short Story
"Something About a Scar" from Anything You Say Can and Will Be Used Against You by Laurie Lynn Drummond

Best Young Adult Mystery
In Darkness, Death by Dorothy & Thomas Hoobler

Best Juvenile Mystery
Chasing Vermeer by Blue Balliett

Best Play
Spatter Pattern (Or, How I Got Away With It) by Neal Bell

Best Television Episode
Law & Order: Criminal Intent, "Want," Teleplay by Elizabeth Benjamin. Story by René Balcer & Elizabeth Benjamin

Best TV Feature of Mini-Series
State of Play by Paul Abbott

Best Motion Picture Screenplay
A Very Long Engagement, Screenplay by Jean-Pierre Jeunet, based on the novel by Sébastien Japrisot

Are international transactions different?

Structuring transactions is a delicate business, even when the parties share the same language, culture, and legal system.  Things only get more complicated when they turn international.

Lawyer Peter Mendell of Canada’s Davies Ward Phillips & Vineberg LLP offers his take on dealing with the unique problems involved in negotiating international deals.

Today in history—April 29

1683: China’s Qing dynasty annexes Taiwan, which had previously been colonized by the Dutch. It is the first time in 30,000 years that the Chinese rule the island.

1770: Captain James Cook and crewman from the HMS Endeavour land at Botany Bay in Australia. Emigrants will later sing:
     Farewell to your bricks and mortar,
     Farewell to your dirty lies!
     Farewell to your gangers and gang-planks
     And to hell with your overtime!
     For the good ship "Ragamuffin,"
     She's lying at the quay,
     For to take oul’ Pat with a shovel on his back
     To the shores of Botany Bay

1854: The first college for African-American students, the Ashmun Institute, is founded near Oxford, Pennsylvania, by a Presbyterian minister, John Miller Dickey.  Its name will later be changed to Lincoln University.

1863: William Randolph Hearst, whose newspaper career will start at age 23 when his father gets the San Francisco Examiner in payment of a gambling debt, is born at San Francisco, California.

1944: One of the longest-running and most successful franchises in film history ends with the premiere of the last "Our Gang" comedy, Dancing Romeo.  Forty-one child actors were at one time or another part of the Gang.

1951: Philospher Ludwig Wittgenstein dies at Cambridge, England. At the time of his death he had published only one book.

1960: American Bandstand’s Dick Clark testifies before Congress as part of the "payola" investigations.  Although he's not charged with wrongdoing, ABC will subsequently require him to give up his publishing and recording interests.

1992: Rioting in Los Angeles kills more than fifty people and destroys nearly $1 billion worth of property.

News in brief

British celebrities are wary after David "Bend it Like" and Victoria "Posh Spice" Beckham failed to get an injunction enforcing a confidentiality agreement signed by their nanny, who sold salacious tidbits about them to the News of the World for £250,000.

Operators of the Eurotunnel say that £570 million this year, on the heels of a £1.334 billion loss last year, and will be bankrupt by 2007 unless bondholders restructure its debt.

Wheeling Pittsburgh Steel has sued coal producer Massey Energy, claiming Massey repeatedly breached its contract to deliver coal and forced Wheeling to buy on the spot market, costing it millions.

Dell Computer says it’s landed the contract to provide and service the 57,000 computers used by Honeywell International.

The economic outlook in Germany continues to be bleak, with annual growth projected at less than a quarter of the U.S. rate while unemployment still hovers around 12 percent.

America’s Hewlett Packard has won the contract to provide technology for the new European-wide police and border control system that some critics have called "Big Brother."

Providers of financial processing technology—the folks who provide both outsourcing and software for in-house financial management—say contract renewals are running at record levels.

Germany’s ThyssenKrupp has won a contract to help build a new state-of-the-art nuclear reactor in South Africa.

Bank of Ireland customers will find many ATM machines empty this holiday weekend because of a dispute between the bank and Brinks Allied over who should be responsible for losses sustained in armed robberies.

Electricity: Good or service?

One of the most common UCC-coverage hypotheticals is whether electricity is a "good" or a "service."  The good folks at Morrison & Foerster LLP have weighed in on the issue in a new unsigned client piece, Electricity: A "Good" under the UCC. Should be a Simple Question — Right?

Their conclusion?  It depends.  The piece has a nice review of the most recent cases on the subject and advises clients to deal with the issue by making sure to include an appropriate choice of law provision.

Technology confab is ready to rumble

Reminder to all the e-commerce folks:  Next weekend is the Computer Law Association's 2005 World Computer and Internet Law Congress, slated for May 5-6, 2005, at the Park Hyatt Hotel in Wasington, D.C.  It's co-sponsored by, among other's, the ABA Committee on Cyberspace Law.

The program looks to be thoroughly practical rather than theoretical, but it's a good place to learn about the cutting-edge issues in the law and technology area.

Film Clips: Monty Python and the dead parrot

    Mr. Praline:  I wish to complain about this parrot what I purchased not half an hour ago from this very boutique.
    Owner:  Oh yes, the—ah—ah, the Norwegian Blue.  What's—ah—what's wrong with it?
     Mr. Praline:  I'll tell you what's wrong with it, my lad. He’s dead, that's what's wrong with it!
    Owner:  No, no, he's uh—he's resting.

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Today in history—April 28

1758: James Monroe, the lawyer who will become 5th President of the United States, is born at Westmoreland County, Virginia. He’s best known for his "Monroe Doctrine," which announced that the U.S. would not tolerate European interference in the Americas, except by Britain, France, Spain, Portugal, the Netherlands, Denmark, and Russia.

1788: Maryland becomes the 7th state to ratify the U.S. Constitution.

1789: Sailors led by mate Fletcher Christian mutiny aboard the HMAV Bounty, a former merchant collier previously known as the Bertha.

1906: Kurt Gödel, one of the three greatest logicians who ever lived, is born at Brno in what is now the Czech Republic. His work is really, really complicated, but fortunately, the life of the law has not been logic.

1930: The first night game in organized baseball history takes place in Independence, Kansas. The Muskogee Chiefs beat the Independence Producers 13-3 in a Western Association game.

1930: Future Secretary of State and Secretary of the Treasury James Addison Baker III (Texas Law 1957) is born at Houston, Texas.

1990: After 6,237 performances, the Broadway musical A Chorus Line closes.

2001: Dennis Tito, the former aeronautical engineer who founded the Wilshire Associates investment firm, becomes the first "space tourist" after paying $20 million for a trip to the Soyuz space station.

2002: Ruth Handler (née Mosko), the creator of the Barbie doll and later president of Mattel, dies at 85.  Barbie and Ken were named for her children.

2003: Apple Computer's iTunes Music Store launches, selling 1 million songs in its first week.  A breach of contract suit by Apple Corps, the Beatles’ record arm, will shortly follow.

Recent Law Review Articles of Interest

Interesting discussion of entrance and exit issues surrounding agreements to arbitrate. “One Judge’s Perspective on Procedure as Contract” Lee Rosenthal, 80 Notre Dame Law Review 669-80.

A review of how the House of Lords’ recent cases on mistake have narrowed this legal option. “Is Mistake Dead in Contract Law?”, Desmond Greenwood, 34 Hong Kong Law Journal 495-513.

“Plausible Rogues: Contract and Property, D.L. Carey Miller, 9 Edinburgh Law Review 150-6

“Protecting and Licensing Software: Copyright and Common Law Contract Considerations,” Lateef Mtima, 22 Computer & Internet Lawyer 13-23.

Studies how inequality of bargaining power means far more than economic disparity and why courts should look at power from the real world perspective of it.

“Inequality in Bargaining Power,” Daniel Barnhizer, 76 University of Colorado Law Review 139-241.

A theoretical discussion on Freedom from and in contract. One of several good articles in this edition of the Wisconsin Law Review.

“Is ‘Freedom from Contract’ Necessarily a Libertarian Freedom?” Todd Rakoff, 2004 Wisconsin Law Review 477.

See above

“’Agreeing to Disagree’ Filling Gaps in Deliberately Incomplete Contracts, Omri Ben-Shahar, 2004 Wisconsin Law Review 389-428.

Let’s try it again.

“The Death of Contract,” Robert Scott, 54 University of Toronto Law Journal 369-90.

ICODR competition features contract negotiation

Teams from Toledo, Hamline, Belgrade, Cal-Hastings, Cornell, Maryland, Cardozo, and British Columbia carried off the top prizes in the Fourth International Competition for Online Dispute Resolution (ICODR), which involved law schools from five continents.

The competition, which covers both negotiation and mediation, is the brainchild of Contracts prof Ben Davis of Toledo (left), and it’s one of the few that deals with dispute resolution outside the litigation setting, which makes it particularly interesting to commercial types.  One of the mediation problems involved a pre-litigation dispute over whether a great entertainer’s signature on a musical instrument bought on eBay was genuine. The other required the parties to negotiate the purchase of a domain name.

Davis, who also teaches international law and dispute resolution, led the group that started the competition in 2001.  It offers what he calls "a rare opportunity to project themselves on the international plane and compete with students from around the world." The online competition is entirely anonymous; neither the competitors nor the judges know which schools are involved in a particular negotiation.  "Students who may not have dealt with persons from other countries," says Davis, "can now try their luck and see what they can do. A student who is found to be effective may find a vocation thanks to this experience. At least we hope so."

If you're interested in exploring fielding a team for next year's event, you can contact Davis here.

Who'll draft the contracts, anyway?

The Philippine government is considering a bill to improve the lot of domestic servants.  The new bill requires that they be called "household members" instead of "houseboy" and "housemaid"; requires written contracts; and sets minimum wages.  The sponsor calls it the "Magna Carta of Household Helpers."  At least one commentator isn't impressed with the idea of written contracts:

As for the employer-employee relationship fixed by a contract, the big question really is, who will benefit from such a contract, especially one drawn and written in fine print that those of us who can read wouldn't even bother to read… how much more for those who do not know how to read or write? There lies the problem, as employers may just put in the fine print something the uneducated servant may not understand.

News in brief

David and Victoria "Posh Spice" Beckham say they'll bring a breach of contract action against their son's former nanny, who sold her stories about them to a newspaper.

Kraft Foods has been hit with a lawsuit for allegedly violating spam rules in sending out messages for its Gevalia Coffee division.

Arizona becomes the first state to enact the new Uniform Real Property Electronic Recording Act (URPERA), which allows for e-filing of real property records.

A new survey says that e-commerce sales in Canada are up for a fifth consecutive year, but still amount to less than one percent of business revenues.

The Philadelphia Orchestra has become the only one of the top five American orchestras to land a recording contract, after its musicians agreed to "depart from" the master musicians' contract which is said to make U.S. orchestras too expensive.

More contract wins for Boeing, as it lands a $6.9 billion deal to supply 50 aircraft to Air India.

Georgia has made it a felony to send fraudulent or deceptive mass e-mails to state residents.

Paper, not plastic

Despite the growth of electronic contracting, a great many people still prefer paper, according to a report from BNA's Electronic Commerce and Law journal.  Enforceability of e-contracts isn't a problem, says the report.  But paper still has advantages.  The "cautionary" functions of a contract are easier to achieve through the formalities of a written document, and people still have confidence that paper is more secure than the little digits, or pixels, or whatever they are on the computer.

Boilerplate conference slated

Boilerplate is ubiquitous in the modern world of contracts, if "ubiquitous" is the word we're looking for.  You'd think that after a hundred years of legal analysis, most of the issues around boilerplate (the pejorative term for "standard form") would be pretty much settled.  But you'd only think that if you weren't a contracts lawyer.

The issues surrounding standard forms will be the topic of a new conference, Boilerplate: Foundations of Market Contracts, to be held at Michigan on September 23-24.  Omri Ben-Shahar as put together an A-list of panelists.  Should be an interesting and thought-provoking couple of days.  Click on the "Continue Reading" for the full announcement.

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