ContractsProf Blog

Editor: Jeremy Telman
Oklahoma City University
School of Law

Thursday, January 24, 2013

When It Comes to The Hobbit, Puts Us to Shame


Closest Thing to a Dwarvish Scroll Available on Wikipedia
Last month, our very own Nancy Kim beat me to the punch by posting about the contract that Bilbo Baggins enters into with Thorin's crew in The Hobbit.  I was so upset that she beat me to the punch on the subject matter that I docked her a month salary from her position as contributing editor on the blog.   

Now we've both been shown up (and how!), by James Daily, identifed here by as

 a lawyer and co-author of The Law and Superheroes, [who] typically focuses his legal critiques on the superhero world at the Law and the Multiverse website he runs with fellow lawyer and co-author Ryan Davidson. 

Apparently, Mr. Daily got his hands on a replica of the five-foot-long scroll that was used as the contracts prop in the film.  He then goes through the contract provision by provision and reaches the following conclusion:

One the whole, the contract is pretty well written.  There are some anachronisms, unnecessary clauses, typos, and a small number of clear drafting errors, but given the contract’s length and its role in the film (which is to say not a huge one, especially in the particulars) it’s an impressive piece of work. I congratulate prop-maker and artist Daniel Reeve on a strong piece of work.  

He provides a link for those interested in purchasing their own version of the contract, for a mere $500.  " If you’d like an even more accurate replica of the contract, Weta’s online store has a version with hand-made touches by Mr. Reeve."

We tip our hats to Mr. Daily.  

Treasure_chest_colorBut I have my own thoughts about the contract that Mr. Daily does not mention.  First, the price term of the contract is ambiguous, since it promises Bilbo "only cash on delivery, up to and not exceeding one fourteenth of total profits (if any)," which on my reading does not really guarantee him anything.  On the other hand, the dwarves do promise to pay for Bilbo's funeral expenses, if necessary, so I think under the contract terms, he's better off dead.

This ambiguity is only partially clarified with the later provision that "the company shall retain any and all Recovered Goods until such a time as a full and final reckoning can be made, from which the Total Profits can then be established.  Then, and only then, will the Burglar’s fourteenth share be calculated and decided."  While this provision would strengthen any potential argument Bilbo might make that he should get no less and no more than a fourteenth share, if the contract does not define "full and final reckoning," he might have to wait quite some time to get that share, perhaps beyond his own final reckoning, and then it's Frodo's problem.

In addition, to address a matter of genuine concern; i.e., one that actually plays a role in the book, the contract does not specify the manner of delivery of payment.  As Bilbo points out in Chapter 18 (spoiler alert: the mission to recover Smaug's treasure was a success), "How on [Middle] earth should I have got all that treasure home without war and murder all along the way, I don't know."   Mr. Daily offers a solution: since the contract does not actually entitle Bilbo to any protion of Smaug's treasure but only to the value of a 1/14 share, the Dwarves could have wired a check to Bilbo's bank in the Shire (or the Middle Earth equivalent to a wire transfer).  But in the book, Bilbo waived his right to the spoils of war beyond "two small chests, one filled with silver, and the other with gold, such as one strong pony should carry."   

The fact that he did so suggests that really no part of the contract mattered much in the end.  And that is as it should be, since the bonds formed by those who joined Thorin's crew went well beyond those that can be reduced to any writing or even to any trilogy of films.

[JT, with hat tip to Mark Edwin Burge of the Texas Wesleyan School of Law for directing us to the site]

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If you hadn't docked my month's salary, I might be able to afford my very own version of the contract!

I think a court would probably interpret the ambiguous payment provision in Bilbo's favor especially, as you point out, in the context of the other provisions. I think the "final reckoning" language is trickier, and so is the calculation of "Total Profit" - gross or net? If net, it can be like Hollywood contracts that leave him with zero after all those expenses (including platters of meat for the dwarves). Remember Forrest Gump...

I'm quite impressed that there was actual contract language in what some (not including yours truly) might consider a minor prop. Not long ago I visited the traveling Harry Potter exhibit and noticed that a lot of the printed material that was used (e.g. newspapers announcing Sirius Black's escape, etc) was gibberish after the first few lines.

Thanks for the post and the shame - here at ContractsProf, we're not proud.

Posted by: Nancy | Jan 25, 2013 7:11:10 AM

Nancy, a court might well come out the way you predict, but the contract provides for arbitration in the "Dwarvish tongue" by an arbiter chosen by ""The Company." Assuming that the arbitration clause is enforceable (I don't know if Middle Earth has an analogue to the Federal Arbitration Act), I'd wager my fourteenth share on the Dwarves winning.

Posted by: Jeremy Telman | Jan 28, 2013 5:44:34 AM

A small correction: there is a less-detailed replica available from The Noble Collection for $40

The Weta version is $450 (and for better or worse I don't own a copy). Both versions have the same text.

You make some good points about the weakness of the "up to and not exceeding one fourteenth of total profits" clause. But there is another section regarding payment. It says, among other things, "Wherefore and for which the Company promises the whole amount, to give and to pay to Burglar or to Burglar’s accredited messenger one fourteenth of total profits, if in gold then good and of correct weight, and if other than gold, then of good quality and of correct and proper measure, within one year of the completion of the Adventure." That seems to put Bilbo's claim to a precise one-fourteenth share of profits on pretty solid footing (however "profits" are reckoned according to Generally Accepted Dwarven Accounting Principles).

The profits seem to be net. In the first clause related to profits (the "cash on delivery" clause), it states "not including any of the gross paid to other parties in lieu of royalties or help and provisions given or loaned."

Posted by: James Daily | Feb 3, 2013 12:37:33 AM