ContractsProf Blog

Editor: Jeremy Telman
Oklahoma City University
School of Law

Friday, August 21, 2009

Crocs Settles Breach of Contract Suit with NothinZ-Producer Australia Unlimited, inc.

Crocs Here we have a number of variations on everyone's favorite form of ethylene vinyl acetate footware, Crocs.  However, despite the fact that you can decorate your Crocs with flowers and peace signs, in the litigation context, it is apparently not all love and harmony if you mess with the makers of Crocs footware. Australia Unlimited has recently surivied a three-year legal battle with Crocs, which its President refers to as "Goliath."  Australia Unlimited markets shoes (NothinZ) that look somewhat like Crocs (take a peek here), with the important difference that the strap in the back of the NothinZ can easily be used as a slingshot. 

According to the Daily Camera Online,Crocs filed a claim with the International Trade Commission in 2006 alleging that Australia Unlimited and 10 other companies were infringing on its patents. Crocs then settled with Australia Unlimited in August 2006 but later filed a suit in federal district court alleging that Australia Unlimited was about to release a new shoe that violated the agreement.  Tia Mattson, a Crocs spokeswoman, hoping to get more publicity for her company on the ContractsProf Blog, stressed that the recent settlement between the two companies effectively ends a conflict over an alleged breach of contract and did not involve intellectual property issues.

As Ms. Mattson put it, "I do want to clarify that the lawsuit is not one based on intellectual property.  This was a lawsuit derived from a contract dispute and we (Crocs) are pleased with the final resolution."

[Jeremy Telman]

August 21, 2009 in In the News | Permalink | Comments (1) | TrackBack (0)

On Paris, Zsa Zsa, 1988 and Alternative Measures of Damages

Zsa_Zsa_Gabor_in_Lili_trailer_2_cropped As summer wanes and 1L orientation draws to a close, it is part of the sweet rhythm of academia that a colleague inevitably says something like: "every year, they get younger."  I'll admit, this year, I was the one who said it.  And, in response, I was reminded that, of this incoming 1L class, there are some students who were born in 1988.  1988!  (Apparently, at Northwestern, there's an incoming 1-L who may have been born in the 90's).  (Image of Zsa Zsa, courtesy of Wikimedia Commons).

This has a lot to do with contracts, or at least the teaching of the subject.  

In a previous post, I had asked if anyone happened upon a copy of the Goldberg v. Hilton decision.  Ask on the glorious interwebs and ye shall receive.  (Thanks, Eric Talley (Berkeley)). 

Here's a copy of the decision: Download SLJQZ9-GoldbergvHilton.  I think you'll agree that the facts provide a good example of the certainty limitation on damages, as well as the reliance v. restitution measure of damages.  In the past, as an example on these points, I have used (and will continue to use) the Zsa Zsa Gabor case, Hollywood Fantasies.  (The one where the celebrity fantasy vacation business bombs and the promoters blame it all on Zsa Zsa canceling her gig - purportedly because she had to film her 30 second cameo in Naked Gun 2 1/2).  This year, I will try offering Goldberg v. Hilton as another example, given that involves an element of current (though similarly inexplicable) celebrity. My students born in 1988 might be interested.  

Try it.  If you just can't resist showing your relative age in pop-culture markers, you can mention that, for a time in the late 1940's, Zsa Zsa was married to Paris Hilton's great grandfather.

[Meredith R. Miller]

August 21, 2009 in Celebrity Contracts, In the News, Recent Cases, Teaching | Permalink | TrackBack (0)

Wednesday, August 19, 2009

Judge Denies $8.3+ million sought from Paris Hilton for Movie Flop

399px-Paris_Hilton_3 Not too surprisingly, the film “Pledge This!,” a sorority comedy starring Paris Hilton, bombed.  The film’s investors sued Hilton for over $8.3 million, alleging that Hilton breached her contract by failing to promote the movie, and thereby causing it to bomb.  The $8.3+ million represented roughly what it cost to produce the film, and the investors argued that they could have made at least that much if Hilton had followed through on her end of the bargain.  (Image source: Wikimedia Commons).

The AP reports that Judge Moreno (SDNY SD Fla.) has decided that the damages requested by investors are too speculative.  According to the AP, Judge Moreno wrote:

"The court finds compelling evidence in the record that 'Pledge This!' lost money because the film's inexperienced producers hastily cobbled together a wholly inadequate marketing plan," the judge wrote. "They sent scattershot requests to their principal star in the hopes that she could find time to promote a sinking ship."

Even if Hilton breached by failing to promote the movie, the court held that investors failed to establish a causal link between the $8.3 million loss and her breach.  Hilton is not entirely off the hook, though.  As the AP reports, if she did breach, she may be liable for some of the $1 million she was paid under the contract.

[If you have located an online copy of the court's decision, please leave a link to it in the comments. Thanks!]

Here's the trailer, if you dare:

[Meredith R. Miller]

August 19, 2009 in In the News, Recent Cases | Permalink | Comments (1) | TrackBack (0)

Tuesday, August 18, 2009

Starting with Intent to Enter Legal Relations [or Why I Don't Start with Remedies]

In his first post as guest blogger, Alan White explained his reasons for starting with Peevyhouse.  Alan's arguments were enough to persuade me to move Peevyhouse into the number 2 spot, but I try to ease the students into the study of contracts with a set of concepts that I think most students find less challenging than damages.  The contracts course I took as a law student began with damages, and there is not a thing I would have changed about my experience with that course (other than my grade).  Nonetheless, in retrospect I must confess that I was bewildered for the longest time as to what exactly it was that we were studying.  It was a pleasant bewilderment for me, but I know that some of my fellow students were not as appreciative.  And I have a sense that my own students grasp the material more easily if we take the typical contractual transaction through from beginning to end, with many gestures toward the end along the way.

So, I begin not with Peevyhouse, but with Hurley v. Eddingfield.  The case hails from Indiana, which is a good reason to start with it if you teach in Valparaiso.  It also gets across a simple point, which was my no means intuitive to me when I was a law student: the concept of freedom of contract includes the principle that there is no freestanding duty to enter into contractual relations with others.  
From there, I confront my students with the opposite end of the specturm: the law is relatively indifferent to our actual intentions when determining intent to be bound.  I illustrate this with a case, Ray v. William G. Eurice Bros. in which a small construction company is bound to a perhaps unreasonable building contract that the builders did not read with any attention.  The case also illustrates expectation damages and I make the most of that.  

My students are often unsympathetic to the builders in Ray, so I have them look at an earlier version of the Google terms of service, included in the Farnsworth (ed.) Selections for Contracts, which serves as my statutory supplement.  We then talk about the frequency with which they (and I) download software subject to license agreements that they (and I) do not read and thus become bound by terms that we would not have agreed to if we 1) read them; 2) understood them; and 3) had any bargaining power.  

So, while Alan begins with a case that illustrates the limitations of standard remedies for contract breach, I begin with cases that illustrate other ways in which contracts doctrine refuses to protect those who will not or cannot protect themselves.

[Jeremy Telman]

August 18, 2009 in Teaching | Permalink | Comments (1) | TrackBack (0)

Monday, August 17, 2009

Alan White: Teaching Peevyhouse First

Peevyhouse farm

The first in a series of posts by

guest blogger

Alan White

      I was fortunate during my transition from practice to teaching to have had the wise counsel of several experienced contracts teachers, and as it happened they were all advocates of the Wisconsin group text, Contracts:  Law in Action.  Being an empiricist, legal realist, and having decidedly leftist political tendencies, I was attracted to the Law and Society project, and so I dove in last fall, and dragged my good friend Jeremy Telman, an unrepentant Kelsenian, along with me.  Horrified by the absence of vital doctrine, Jeremy plugged the gaps with a few old chestnuts, while I did the best I could to stick to the authors’ logic and lesson plan, aided by extensive notes they generously shared.  Promising my students that this would not be their father’s Contracts class, I supplemented the materials with pleadings and exercises grabbed from the (mostly financial crisis-related) headlines, to drive home the point that we would be learning the real world version of Contracts law.  Reviews were mixed.

          This year, with one semester’s experience under my belt, I hope to enrich my teaching of Contracts with a variety of assessments, collaboration with our Legal Writing teachers (more on this later) and other improvisations.  I’ll try to recount the successes and failures each week as the semester progresses. 

          Law in Action begins at the end (of a lawsuit), with remedies.  This makes complete sense to me, as a former plaintiff’s lawyer, who was never interested in any statute or common law doctrine until I could see what it might do for my client.  Regrettably (and I offer this as the friendliest of critiques) the casebook begins the term with the Shirley Maclaine case, Parker v. Twentieth Century Fox.  I find this regrettable because the case illustrates nothing so much as an exception to an exception to a remedies principle.  If one wants to begin by getting across the idea of what the so-called expectation interest is, why bring in the issue of mitigation of damages?  If on the other hand, one wants to get across the simple idea that contract remedies are rarely adequate to make parties whole, why not use a mitigation case in which the aggrieved employee is not fully compensated, on the grounds of failure to mitigate?  And if the point is to liven up the proceedings with a bit of pop culture, perhaps a case involving a more contemporary entertainer would do. 

          So I decided to deviate only slightly from the casebook’s path this year and to lead with the contract-remedies-are-never-fully-compensatory theme.  To do that, we will begin not with the Parker case, but with Peevyhouse v. Garland Coal Company, a case that aroused ire and passion and the best classroom discussion last year, and therefore the case I will rely on to start this year with a bang.  The injustice of the Oklahoma Supreme Court’s decision seems obvious, and yet when pressed to view the question of compensation from the Coal Company’s point of view, students come quickly to understand the murkiness and ambiguity of the seemingly limpid principle that the victim of a breach should receive what they expected.  The wonderful video history of the case, produced by Professor Judith Maute, will once again be featured, I think to introduce the second day of discussion, after we first have at the opinion in splendid isolation from the entire context and the facts not selected for narration by the Oklahoma Supreme Court.  To my students who might read this, be patient, all will be revealed in the end (of the first week.)


August 17, 2009 in Famous Cases, Teaching | Permalink | Comments (1) | TrackBack (0)

Welcome, Alan White!!

AlanWhite2007_black  I am pleased to welcome to the blog my friend and colleague, Alan White.  Avid fans of the blog might think that name sounds familiar.  And sure enough, we have had reason to mention Professor White's scholarship previously on this blog here, and we've advertized one of his conferences here (he's got another one planned for later this semester, so stay tuned!),  But now the real excitement begins, because Alan has agreed to do a guest blogging stint this semester in which he will blog about his first-year contracts course. 

I will be posting Alan's comments as he writes them.  In separate posts, I will then add my own blow-by-blow account of what is going on in my contracts course.  Alan and I both adopted the same casebook last year, so we started out in a relatively similar place, but this year our teaching approaches are diverging, as we supplement the casebook we are using with our own ideas about what first-year students need from a contracts course.  I think we both have found the three-way conversation involving the two of us and our casebook a fruitful one.  We hope it will interest readers of the blog as well. 

In any case, we here at the blog are grateful to Alan for his willingness to share his thoughts and experiences.  Our readers will enjoy getting inside the mind of a still young contracts prof who is still willing to try new ways to stimulate his students and to prepare them for practice.

[Jeremy Telman]

August 17, 2009 in About this Blog, Contract Profs, Teaching | Permalink | Comments (0) | TrackBack (0)

Another Take on the Van Halen "No Brown M&M's Rider"

Bob1-711378 Perhaps the most famous contract in rock history is Van Halen’s 1982 World Tour rider.  It contains the legendary requirement that the band be provided with a bowl of M&M’s in the dressing room, with all brown M&M’s removed from the bowl.  Actually, the rider states, on the topic of Munchies: 


You can check out the rider here if you’d like.

Until recently, the famous Brown M&M’s rider seemed nothing more than an example of the frivolity of the rock star ego.  Then I listened to an alternative explanation, courtesy of NPR’s fabulous radio show This American Life.

In an episode titled “The Fine Print,” with the help of John Flansburgh of They Might Be Giants, we are offered a business reason for the M&M's clause of the rider.  

Apparently, beyond the backstage food and drink requirements, tour riders contain very important instructions that affect how smoothly the show will run -- for example, electricity or weight requirements for the band’s gear.  Well, if the promoter at the local venue does not read the rider, it is likely that something will go very wrong at the show.  So, Van Halen used the M&M’s for signaling purposes: if there were no brown M&M’s in the bowl, the band knew that the local promoter read the rider.  If the brown M&M’s were there, the band knew that the local promoter had not read the rider carefully, and technical and safety requirements might not have been met.

You can give the show a listen here.  The Van Halen part is in the very beginning of the show, but it is well worth listening to the entire show.

[Meredith R. Miller] 

August 17, 2009 in Celebrity Contracts, Food and Drink, True Contracts | Permalink | Comments (0) | TrackBack (0)

At Best Buy, Too Good To Be True

Courtesy of Best Buy (via CNN), here's a nice lesson on the objective theory and the doctrine of mistake:

Early Wednesday morning, listed a 52-inch Samsung HDTV for $9.99 -- a savings of more than $1600.

As customers jumped on the Web site trying to take advantage of the offer, Best Buy announced it was a "pricing error" and was no longer available.

A recorded message on Best Buy's customer service line told customers "we will not be placing any more orders for this unit," and messages were sent on Twitter apologizing "for any disappointment."

Customers who placed orders early Wednesday were left wondering if they got away with the bargain. Eric VanBergen of Grand Rapids, Michigan, told CNN he snapped one up for $84.79 -- including $70 shipping and taxes -- at 5:30 a.m. Then, he ordered a second.

Dozens of customers were posting to Twitter and, saying they also placed often multiple orders.

It appears they are out of luck. In a statement, Best Buy apologized for the mistake but said it would "not be honoring the incorrect price."

Company representatives posted online messages telling customers "All current and previous orders made for the TV at this price on will be cancelled, and customers will be refunded in full for the purchase."

The company's Web site states Best Buy reserves the right to "revoke offers or correct errors" even if a credit card has already been charged.

The price mix-up gave way to customer frustration as people lost out on the deal of the year. ".bestbuy dang you!!!!" was how VanBergen reacted on Twitter after learning that his two confirmation e-mails from Best Buy were meaningless.

But it appears there is little else they can do. A spokeswoman for the Federal Trade Commission that investigates consumer complaints told CNN "The FTC act bars unfair and deceptive commercial practices." Those would be cases of phony offers or sweepstakes, rather than a mistake, she said.

[Meredith R. Miller - h/t Isaac Samuels]

August 17, 2009 in In the News | Permalink | Comments (0) | TrackBack (0)