ContractsProf Blog

On the Meaning of "Chicken"

Dear Judges Friendly and Traynor:

Upon reflection, Judge Traynor may have had it right when he wrote:

Words, however, do not have absolute and constant referents. "A word is a symbol of thought but has no arbitrary and fixed meaning like a symbol of algebra or chemistry, ..." * * * The meaning of particular words or groups of words varies with the "... verbal context and surrounding circumstances and purposes in view of the linguistic education and experience of their users and their hearers or readers (not excluding judges). ... A word has no meaning apart from these factors; much less does it have an objective meaning, one true meaning."

I say this because, today, I learned what "chicken" apparently means in one specific context in Suffolk County, New York.  You don't suppose that this is was what Frigaliment and B.N.S. meant by "chicken"?

Truly yours,

[Meredith R. Miller]

Reflections on the First Minimester, Part II

I have been periodically reporting in this space on my Law School's new curriculum, which features a new approach to contracts.  We have broken each semester into two, seven-week minimesters, and the traditional four-credit, fourteen-week contracts course has been broken into two, two-credit, seven-week courses.  As a result, our students had their first set of final exams three weeks ago.  They got their grades in mid-October, and I have been meeting with them one-on-one ever since.

I offered a first set of observations on the experiment here.  Now that I have been meeting with students, here are a few additional thoughts.  

• Far more students have requested conferences with me to go over their exams this year than in any past year.  I would put the rate of increased traffic at somewhere between 300% and 500%.

• So far, my conversations with my students have focused entirely on how they can improve their performance on the next exam.  No students have come to question their grades, gripe about their grades or complain about the exam or the exam-taking environment.

• Usually, the only students who talk to me about their exams are the students who performed the worst.  This semester it has been a mix of some of the top students and most of the bottom students.  I haven't seen that many of the students in the meaty part of the curve, but that might be a product of their understanding that a certain triage is taking place.  Students who did poorly on the exams need to be meeting with me so that they can get to work right away on remedying identifiable problems.  For the rest, there is less urgency.

• To a surprising degree, the meetings have enabled me to identify the nature of the students' problems.  It is the rare student who failed miserably on all aspects of the exam.  Some have significant deficiencies on multiple choice; some did not IRAC, even though they all know that they have to IRAC.  Sometimes, there were specific doctrines that the students had failed to grasp.  I hope that this information is useful to them, and to the extent that there are patterns, it is highly useful to me.

• All of this is a lot of work.  It is a lot of work for me, and that's okay, but it also puts huge strain on our staff.  Schools that might be considering emulating our approach will have to consider the attendant quality-of-work-environment issues.  It is also a lot of work for our students to think about what went wrong last minimester when they have also slipped into a new minimester featuring two new substantive law courses without any break.

• One of our main goals with the minimester system is to identify students who are at risk as early as possible and to get them the help we can offer through our ASP program or simply by identifying areas where they can improve their performance.  We will be better to gauge the success of this early intervention program at the end of the second minimester in December.

[JT]

Behavioral Economics and Halloween

According to this scary report from National Public Radio, children are not entirely rational.  Well, perhaps we should not overstate the conclusions one can draw based on the relevant research.  Children are only boundedly rational when it comes to Halloween candy.

A psychologist at Dartmouth College discovered that children were happier when they got a candy bar than they were when they got a candy bar and a piece of gum.  This research calls into question our earlier assumption that more is better.  

And it turns out that, according ot the same NPR report, Halloween candy is not the only realm in which people's responses to experiences can defy our expectations.  It turns out that, while colonoscopies are bad, colonoscopies in which a tube is left inserted in the patient for a while, causing additional discomfort, are . . . (if you guessed worse, you're getting colder), at least according to a survey of patients on what they thought of the experience.

The trick (or treat) is to save the best (or the least bad) for last.  If y0u are handing out candy tonight, and you don't want to get your house egged back into the stone ages, give the children some prunes, and then as they reach for their mace, offer a candy bar.  They will leave happy and nominate you for a Nobel Prize.  Similarly, if you are going to perform an invasive procedure on someone, make sure you have something less bad with which to follow it up.

[JT]

Love, Death and Contracts in "The Forsyte Saga"

John Galsworthy

A contract dispute powers A Man of Property, the first volume of John Galsworthy's The Forsyte Saga, to its conclusion.  Now, I admit, the synopsis that follows is not based on the novels, which I have not read.  It is based on the 2002/2003 television mini-series.  I will happily stand corrected if any Galsworthy fans want to point out discrepancies between the film and novel accounts of the contracts case.

Soames Forsyte loved his wife Irene, but he wanted to possess her, and she only consented to marry him.  Difficulties arose when Irene took an interest in a young architect, Bosinney, who was to wed Soames's second cousin (I believe), June.  

Soames, unaware at this point of the connection between Bosinney & Irene, decides to build a country home to get Irene away from the distractions of London -- in particular he means to separate her from June.  Meanwhile, Bosinney and Irene become lovers, and at the same time, rather unwisely, Bosinney keeps raising the contract price for the home he builds for Soames.

Bosinney and Irene finally push Soames beyond all endurance, and he decides to sue Bosinney for breach of contract because Bosinney has exceeded the agreed-upon, adjusted contract price for the house.  Bosinney is in a bad spot.  He can't afford to pay Soames for the extra costs -- they approach Bosinney's annual income.  Nor can he afford to have a breach of contract claim hanging over him in connection with his first major project.  Indeed, based on the success of his first project, other well-bred Englishmen are beginning to approach him as potential clients, but when they learn of his dispute with Soames, all is put on hold.

From the outset, one senses that Soames has Bosinney cornered and will destroy him.  Bosinney believes, rather absurdly, that he can win the case, but Soames is a solicitor and he can hire the best trial lawyer in London.  Bosinney hasn't a chance.  Perhaps it's all for the best then when he is run over by a carriage and killed just before the case is lost.  Soames ends up selling the house to his Uncle.  The sale price might give us a better sense of the extent of the legal injustice wrought in Forsyte v. Bosinney.

[JT]

 

Texas Taco Fight over Trade Secrets

Our Founding Editor Frank Snyder (pictured) sent us this story from the Fort Worth Business Press about a dispute over the "chef-inspired" offeerings at the three-store Texas Taco chain.  Another chain, Torchy's Taco, is alleging that Texas Taco's menu is based on Torchy's "Taco Bible."  

The alleged Edward Snowden of this taco thriller is an ex-Torchy's grill cook who is now working for Texas Taco.  The employee allegedly attempted to steal Torchy's Taco Bible by slipping it under his shirt.  Torchy's caught this on video camera and ordered the employee to return to Bible.  He surrendered the Bible and was fired.  Apparently, Torchy's neglected to confiscate the microfilm (or flash drive or whatever device the employee allegedly used to copy the recipes).  Some months later, some of Torchy's descriptions of its tacos appeared on Texas Taco menus that gave the creations new names.  

It is not entirely clear whether the employee is now being sued for beach of a covenant not to compete, for theft of trade secrets or both.  Both the cook and Texas Taco deny any wrongdoing. 

[JT]

Weekly Top Tens from the Social Science Research Network

RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of Contracts & Commercial Law eJournal 
August 30, 2013 to October 29, 2013

Rank	Downloads	Paper Title
1	169	Freedom of Contracts  Michael A. Heller, Hanoch Dagan,  Tel Aviv University - Buchmann Faculty of Law, Columbia University - Columbia Law School
2	115	A Model Litigation Finance Contract  Maya Steinitz, Abigail Field,  University of Iowa - College of Law, Unaffiliated Authors - Independent
3	98	Distributive Justice and Contract  Aditi Bagchi,  Fordham University - School of Law
4	95	The Challenge of Boilerplate  Robin Bradley Kar,  University of Illinois at Urbana-Champaign - College of Law
5	67	Is There a 'Duty to Read'?  Charles L. Knapp,  University of California - UC Hastings College of the Law
6	61	The Interpretation and Fairness of Standardized Terms: Certainty and Predictability Under the CESL and the CISG Compared  Nicole Kornet,  Maastricht University - European Private Law Institute (M-EPLI), Maastricht University - METRO Institute
7	60	Property as Platform: Coordinating Standards for Technological Innovation  Henry E. Smith,  Harvard Law School
8	57	Cross-Debarment: A Stakeholder Analysis  Christopher R. Yukins,  George Washington University - Law School
9	55	Rejecting the Right to International Arbitration on Domestic Public Policy Grounds - The Case of Tethyan Copper Company in Pakistan  Faisal Daudpota,  Advocate High Court
10	55	Can We Be Obliged to Be Selfless?  Lionel Smith,  McGill University - Faculty of Law - Paul-André Crépeau Centre for Private and Comparative Law,

RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of LSN: Contracts (Topic)  
August 30, 2013 to October 29, 2013

Rank	Downloads	Paper Title
1	169	Freedom of Contracts  Michael A. Heller, Hanoch Dagan,  Tel Aviv University - Buchmann Faculty of Law, Columbia University - Columbia Law School
2	115	A Model Litigation Finance Contract  Maya Steinitz, Abigail Field,  University of Iowa - College of Law, Unaffiliated Authors - Independent
3	98	Distributive Justice and Contract  Aditi Bagchi,  Fordham University - School of Law
4	95	The Challenge of Boilerplate  Robin Bradley Kar,  University of Illinois at Urbana-Champaign - College of Law
5	67	Is There a 'Duty to Read'?  Charles L. Knapp,  University of California - UC Hastings College of the Law
6	61	The Interpretation and Fairness of Standardized Terms: Certainty and Predictability Under the CESL and the CISG Compared  Nicole Kornet,  Maastricht University - European Private Law Institute (M-EPLI), Maastricht University - METRO Institute
7	57	Cross-Debarment: A Stakeholder Analysis  Christopher R. Yukins,  George Washington University - Law School
8	40	Social Media and the Rise in Consumer Bargaining Power  Wayne Barnes,  Texas A&M University (TAMU) - School of Law
9	40	Contract and Property Law: Distinct, but not Separate  Sjef van Erp,  Maastricht European Private Law Institute, University of Maastricht - Faculty of Law
10	38	Horizontal Application of the Charter of Fundamental Rights  Dorota Leczykiewicz,  University of Oxford - Faculty of Law

[JT]

We Welcome Brian Leiter Back to the Law Professor Blog Network

As announced on the TaxProf Blog, the Mother Ship of the Law Professor Blog Network, of which this blog is a proud member, Leiter's Law School Reports and Leiter's Law School Rankings Join Law Professor Blogs Network.

Brian was part of the network in 2005-09, and he and Blog Emperor Paul Caron had a chance to reconnect over dinner when he came to Pepperdine ten days ago to deliver a lecture sponsored by the Glazer Institute for Jewish Studies on his book Why Tolerate Religion?(Princeton University Press, 2012).

We join Paul in welcoming Brian Leiter's Law School Reports and Brian Leiter's Law School Rankings back to the Law Professors Blogs Network.  

[JT]

 

Contracts Blawg Roundup

The Essence of a Blawger

Here is a collection of recent posts on other law blogs (blawgs) about contracts:

Concurring Opinions' Larry Cunningham on The Responsibility of Autonomy: More on Berkshire and Benjamin Moore

Prawfsblawg's Sarah Lawsky on Law Review Publication Agreements

Balkinization's Frank Pasquale on Private Prison Problems (and the Scholars Who Warned Us)

The Conglomerate's David Zaring, If Treasury Prioritizes Debt Repayments After Reaching The Debt Ceiling, Can Anyone Sue?

In addition, there's been a lot of traffic on the state of law reviews, a topic we have written about here and here.  Here's a sampling:

Concurring Opinions Daniel Solove, In Defense of Law Reviews

Prawfsblawg's Paul Horowitz, Wheat, Chaff, and Law Reviews

Prawfsblawg's Howard Wasserman on Courts and Law Reviews

Prawfsblawg's Jack Chin, Getting Law Review Fans Out of the Closet: Liptak on Jacobs and Waxman

Prawfsblawg's Matt Bodie, Et Tu, Adam? The Lazy Critiques of Law Reviews Continue

The Faculty Lounge's Jeff Redding, Reforming Faculty/Student Norms vis-à-vis U.S. Law Reviews

[JT]

Quincy Jones Sues Michael Jackson Estate and Sony for Breach of Contract

As reported here by Reuters, 27-time Grammy-winning producer Quincy Jones (pictured) is suing the estate of Micahel Jackson and Sony Music Entertainment (Sony) for $20 million for breach of two contracts relating to music that Mr. Jones produced on some of Michael Jackson's most successful albums.  Mr. Jones alleges that the music was re-mixed for used in a Michael Jackson concert movie, "This Is It," and in to Cirque du Soleil shows that use Mr. Jackson's music.  Mr. Jones claims that he is being denied proceeds in violation of his agreements with Sony and Mr. Jackson based on secret agreements between Sony and the administrators of Mr. Jackson's estate.

[JT]

Disco Star Sues Contractor for Allegedly Faulty Work

"I Will Survive" singer Gloria Gaynor has filed breach of contract and warranty claims against a contractor.  According to MyCentralJersey.com:

Gaynor has filed suit in state Superior Court in Somerville against a Piscataway contractor who replaced a second-floor concrete deck at her home that she says later caused leaks into the house and has to be replaced at a cost of $120,000.

According to the lawsuit filed earlier this month, Gaynor contracted with Diaz Landscape Design and Tree Service of Piscataway in November 2007 to remove an existing second-floor concrete deck and replace it with a new deck at a cost of $38,060.

After the new deck was installed, the lawsuit alleges, water began to leak into Gaynor’s home because of “faulty construction.”

There was also water ponding on the deck, water damage to wood sills and supports and the formation of mold, according to the suit.

Gaynor told the contractor about the problems and asked that the conditions be corrected. The contractor attempted to fix the problems, but the attempts failed and the problems persisted, causing more damage to the property, according to the lawsuit.

Gaynor then had another contractor examine the work performed by Diaz.

The new contractor determined that the work done by Diaz was “so faulty and defective” that the only appropriate remedy is removing the deck and constructing a new one at a cost of $120,000, the suit says.

Besides breach of contract and breach of warranty, Gaynor’s suit also charges Diaz with consumer fraud by not being registered in New Jersey as a home improvement contract and failing to obtain the required building permits, resulting in the work not being inspected.

Is Gaynor entitled to the cost of replacement of the deck?  Time for a music break:

 

[Meredith R. Miller]

In Defense of Student-Edited Journals

Meredith Miller's post from yesterday touched on a topic that most law professors have considered at some point or other.  For years, there has been a movement to replace student-edited law reviews with a more professional model.  Judge Posner threw his support behind an operation called PRSM -- the Peer Reviewed Scholarship Marketplace.  But the idea has not caught on (judging by the stagnating PRSM membership).  In my view, it is a fine thing to have different models out there, so it is fine with me that some student-edited journals are experimenting with peer review (and I hear anecdotally that many student-edited journals have been doing so informally all along).  But my main point here is to stress how we all benefit from student-edited journals, and law professors should stop griping and realize how lucky they are to have the current arrangement.  

I have written on this subject before here, emphasizing the benefits students derive from their work on law journals.  Here is the heart of my argument from that previous post:

 Some of the best training that happens at law schools happens at law reviews.  I came to law school with ten years of scholarly experience under my belt, because I had written a doctoral dissertation, published historical scholarship and taught before making the jump to law school.  Still, my skills as a researcher skyrocketed in my third year as a law student when I was responsible for overseeing a team of cite and substance editors on a number of review essays that we published in our Review of Law and Social Change.  The evidentiary standards for legal scholarship are far more exacting than they are in the humanities and the non-quantitative social sciences.  No claim can be made without authority.  As a result, I became a far more intrepid researcher, and I unlearned intellectual habits acceptable to my former field of study and adopted intellectual habits essential to successful lawyering.  

In this post, I would like to address some of the advantages of student-edited journals from the author's perspective.  The main advantages of student-edited journals is that they are plentiful and rely on free labor.  Since as I explained above, the labor is a valuable component of legal education, I don't feel too badly for the students who are not paid for their editorial work.  But their efforts are responsible for raising the level of legal scholarship well above that of other humanities and social sciences.  

Having more journals to publish in is good.  Allow these adorable kids to explain:

 

You see, it's not complicated.

When I was a historian, I submitted articles for peer review.  I waited 3-6 months for readers' reports.  Sometimes the readers' reports were positive, and my article got published without further editing beyond typesetting.  Other times I was told to revise and re-submit.  In general, I would say that the suggested revisions were recommendations that I recast my own research to satisfy the reviewer, and I was not always convinced that doing so would enhance the quality of the piece.  But I would do my best to revise, and there were times when my attempts to satisfy the reviewer were unsuccessful.  I could move on to the next journal, but I don't think I ever did.  I published in a specialized field, and there were usually only a couple of journals where it made sense for me to publish.  The universe of qualified reviewers was also limited.  Two of my historical writings, to which I devoted months of work were never published, and one of them should have been.  

Without a doubt, legal scholars benefit from being able to submit simultaneously to scores of publications.  If none of those publications bite, we wait six months for the next round and try our luck with a fresh crop of editors who may not have the benefit of a meaningful institutional memory.  At some point, worthwhile scholarship finds its way into print, and as long as the publication is included on a database, and most journals are, students, attorneys, and scholars can find it regardless of the prestige of the publication.  

Okay, so what is the downside?

One potential downside is that a lot of useless nonesense gets published.  I would be very interested to see evidence that peer review prevents the publication of useless nonesense.  People bandy about the statistic that 40% of law review articles are never cited.  Okay, is a higher percentage of peer reviewed material cited?  In any case, as I wrote in another post:

As for scholarship itself, Brian Leiter was here a few weeks ago to deliver our annual Seegers Lecture on Jurisprudence.  In response to a question about the value of scholarship, he said something very close to my view.  Most of what gets published is a dead end.  But a certain percentage of it is very valuable, and there is no way of telling ex ante which scholarship is going to move the ball in a meaningful way.  That's why we need lots of people doing their best to move the ball and why we need to continue to support faculty scholarship. 

The other downside is that students are incompetent as editors not only in selection but also in the way they deal with the text.  This, I say, is nonsense.  Peer review may be more rigorous but peer editing clearly is not.  Whenever I have submitted essays for peer review, the final product is almost identical to the original, except for formatting and the repair of the odd typo.  Student editors work hard to improve the quality and clarity of the writing, and they also find authority where it is lacking.  They make us seem much more lucid, knowledgeable and careful than we really are -- or than we are when we first submit our offerings up for publication.  

The last time I published in a peer-review, peer-edited journal, my piece was: 1) accepted, 2) rejected following a coup on the editorial board, and 3) re-accepted after the coup unraveled.  The re-acceptance was conditional on revisions.  The readers' reports came to me nearly two years after the original submission, but I received many vague missives from the journal suggesting that I had very little time to make the necessary changes or the journal would pass on publication.  I made the requisite changes (which were idiotic and necessitated a new research project) and re-submitted.  For months, I heard nothing.  My inquiries recieved no response until I received the page proofs.  The page proofs corresponded to my original draft.  That's right, the "professional editors" who insisted that I revise my article were then prepared to publish my article without the revisions.  Publication followed some months later, about two years after the article was first accepted for publication.  I know we all have horror stories about student editors, but could they really have done much worse than that?

I have been storing these thoughts up for a while, hoping that I would one day have the time to publish them in a student-edited law journal.  For now, a blog post will have to do.

[JT] 

We're #41!

As reported here on the TaxProf Blog, our blog broke into the Top 50 blogs edited by law professors for the most recent 12-month period (Oct. 1, 2012 - Sept. 30, 2013).  We had just over 168,000 page views over the period, a 9.4% increase over the previous twelve-month period.  

Thanks for viewing!

[JT]

Weekly Top Tens from the Social Science Research Network

RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of Contracts & Commercial Law eJournal 
August 22, 2013 to October 21, 2013

Rank	Downloads	Paper Title
1	156	Freedom of Contracts  Michael A. Heller, Hanoch Dagan,  Tel Aviv University - Buchmann Faculty of Law, Columbia University - Columbia Law School
2	109	A Model Litigation Finance Contract  Maya Steinitz, Abigail Field,  University of Iowa - College of Law, Unaffiliated Authors - Independent
3	98	Indescendibility  David Horton,  University of California, Davis - School of Law
4	94	Distributive Justice and Contract  Aditi Bagchi,  Fordham University - School of Law
5	89	The Challenge of Boilerplate  Robin Bradley Kar,  University of Illinois at Urbana-Champaign - College of Law
6	77	Justice and Harsh Results: Beyond Individualism and Collectivism in Contracts  Kenneth K. Ching,  Regent University - School of Law
7	75	A Presumptively Better Approach to Arbitrability  John A. E. Pottow, Jacob Brege, Tara J. Hawley,  University of Michigan Law School, University of Michigan at Ann Arbor - University of Michigan Law School, University of Michigan Law School
8	68	Law Wars: Australian Contract Law Reform vs CISG vs CESL  Lisa Spagnolo,  Monash University - Faculty of Law
9	60	Managing Our Money: The Law of Financial Fiduciaries as a Private Law Institution  Hanoch Dagan, Sharon Hannes,  Tel Aviv University - Buchmann Faculty of Law, Tel Aviv University - Buchmann Faculty of Law
10	59	Property as Platform: Coordinating Standards for Technological Innovation  Henry E. Smith,  Harvard Law School

RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of LSN: Contracts (Topic)  
August 22, 2013 to October 21, 2013

Rank	Downloads	Paper Title
1	156	Freedom of Contracts  Michael A. Heller, Hanoch Dagan,  Tel Aviv University - Buchmann Faculty of Law, Columbia University - Columbia Law School
2	109	A Model Litigation Finance Contract  Maya Steinitz, Abigail Field,  University of Iowa - College of Law, Unaffiliated Authors - Independent
3	94	Distributive Justice and Contract  Aditi Bagchi,  Fordham University - School of Law
4	89	The Challenge of Boilerplate  Robin Bradley Kar,  University of Illinois at Urbana-Champaign - College of Law
5	77	Justice and Harsh Results: Beyond Individualism and Collectivism in Contracts  Kenneth K. Ching,  Regent University - School of Law
6	57	Is There a 'Duty to Read'?  Charles L. Knapp,  University of California - UC Hastings College of the Law
7	50	Cross-Debarment: A Stakeholder Analysis  Christopher R. Yukins,  George Washington University - Law School
8	49	The Interpretation and Fairness of Standardized Terms: Certainty and Predictability Under the CESL and the CISG Compared  Nicole Kornet,  Maastricht University - European Private Law Institute (M-EPLI), Maastricht University - METRO Institute
9	42	Software Tools for the Visualization of Definition Networks in Legal Contracts  Michael Curtotti, Eric McCreath, Srinivas Sridharan,  Australian National University (ANU), Australian National Univerity, University of California, San Diego (UCSD)
10	31	Horizontal Application of the Charter of Fundamental Rights  Dorota Leczykiewicz,  University of Oxford - Faculty of Law

[JT]

NYT's Adam Liptak on Lackluster Legal Scholarship (or, On Elephants Swatting Flies)

In case you didn't see it, Adam Liptak's Sidebar column in the New York Times takes aim at student-edited law reviews with such zingers as: "Law reviews are such a target-rich environment for ridicule that it is barely sporting to make fun of them."  Liptak gets it mostly right in describing the dismal status quo, incluing the utter lack of relevance of most law review articles to the practicing bar.  (I had a law professor who said the best way to keep a secret is in a law review article and I tend to think he was right). 

I am shocked that this story is newsworthy and I don't necessarily agree with the prescription that "blind screening, peer review and more training for the student editors" would make all the difference.  But I am most grateful that Liptak's column references a 1936 essay by Yale Professor Fred Rodell titled “Goodbye to Law Reviews.”  It made my day.  Check out the abstract:

It is doubtless of no concern to anyone that this is probably my last law review article. As a matter of fact, this makes one more article than I had originally planned to write. It was something in the nature of a New Year's resolution. Yet the request to do a piece about law reviews seemed a golden opportunity to make my future absence from the "Leading Articles, Authors" lists a bit more pointed than would the business of merely sitting in a comer, sucking my thumb, and muttering Boo. Keeping well in line with two traditions—a course which lawyers will readily understand—I decided to break the resolution and not wait for opportunity's second knock. This, then, is by way of explaining why I do not care to contribute further to the qualitatively moribund while quantitatively mushroom-like literature of the law.

There are two things wrong with almost all legal writing. One is its style. The other is its content. That, I think, about covers the ground. And though it is in the law reviews that the most highly regarded legal literature—and I by no means except those fancy rationalizations of legal action called judicial opinions—is regularly embalmed, it is in the law reviews that a pennyworth of content is most frequently concealed beneath a pound of so-called style. The average law review writer is peculiarly able to say nothing with an air of great importance. When I Used to read law reviews, I used constantly to be reminded of an elephant trying to swat a fly.

Just proves that there is nothing new to say.

[Meredith R. Miller]

Supplier Codes of Conduct and Working Conditions in the Global Supply Chain

Please allow me this moment of shameless self-promotion.  I just posted a draft to SSRN titled "Corporate Codes of Conduct and Working Conditions in the Global Supply Chain: Accountability through Transparency in Private Ordering."  What began as a musing on whether the supplier codes of transnational corporations should be viewed through the lens of contract law evolved into a regulatory piece about transparency.  It has a little something for everyone: contract law, employment law, international law, human rights, corporate governance and securities regualtion.  All inspired by a summer abroad course I taught in Vietnam.  Here's the abstract:

In early 2012, Apple Inc. had its very own “Nike moment.” The mainstream news media raised issues concerning working conditions at a Foxconn factory in China that manufactures iPads. The press accounts described serious and sometimes deadly safety problems, excessive overtime, underage workers, and even a rash of suicides. More recently, massive and deadly tragedies in Bangladesh garment factories have captured United States media attention. This negative publicity has renewed questions about how to achieve humane conditions for workers at factories that supply goods to transnational companies (“TNCs”). 

Prompted by the negative media attention, Apple publicized its “Supplier Code of Conduct” and voluntarily joined the Fair Labor Association (“FLA”), a non-profit consortium of companies, universities and organizations committed to improving working conditions through accountability and transparency. These steps to voluntarily undertake higher standards can only be understood with reference to the greater context of international guiding principals and the setbacks in implementing them.

International labor standards have remained largely aspirational and the International Labor Organization (“ILO”) lacks meaningful enforcement power. Moreover, United States labor and employment laws generally do not apply extraterritorially. For these reasons, much of the more recent standard setting has been undertaken voluntarily by TNCs through their own codes of conduct or by joining a non-profit standard-setting organization. For example, through its “Supplier Code of Conduct” Apple has ostensibly committed itself to improving working conditions in the factories that manufacture its products. By joining the FLA, it has agreed to independent audits of its suppliers. 

Given the lack of mechanisms to enforce international standards and the presumption against extraterritorial application of United States law abroad, it is tempting to view the self-regulatory nature of supplier codes through the lens of contract law. Although the codes of conduct may be incorporated by reference in supply contracts, they do not bring any stronger enforcement mechanisms to workers in the international supply chain. While the codes use legalistic language, they are carefully written to avoid the risk of creating liability. The codes typically do not fix the TNCs to a firm commitment to monitor and audit suppliers and, therefore, often echo the aspirational nature of ILO standards. Even where promises of monitoring can be found in the code language, it is not likely that workers can enforce those promises as third party beneficiaries. 

Further, it would be misguided to treat the supplier codes of conduct as exposing TNCs to contractual liability. The codes are voluntarily enacted and self-imposed; once the codes potentially subject TNCs to contract claims, there is a disincentive to adopt the codes in the first place. Indeed, many TNCs that rely on global suppliers have yet to adopt a code of conduct or join an organization like the FLA.

Given these challenges, this paper shifts focus away from attempts to enforce global standards or apply contract principles to the private ordering of supplier codes of conduct. Instead, this paper argues that a model of transparency may be the most promising path to holding TNCs accountable for working conditions in the factories of their suppliers. The central normative claim of this paper is that the United States should require TNCs to disclose whether they have a supplier code of conduct, the terms of that code and who does the monitoring and auditing of suppliers. Disclosure requirements are more likely to encourage TNCs to voluntarily undertake standards that reflect best practices. The focus on transparency falls squarely within the recent push to require companies to report on more than strictly financial information.

Conditions for workers in the supply chain will only improve if required by the source of demand for the products they are employed to manufacture. Despite the fact that self-imposed codes have been criticized as platitudes or public relations stunts, some TNCs have made more concrete commitments to monitoring and auditing their suppliers. Adding transparency to the supply chain will make it relatively easy for interest groups to rate a TNC’s commitment to improving working conditions. A disclosure model that brings information to the United States marketplace and informs the demand for products may have the greatest potential to increase TNCs’ accountability and improve working conditions in factories across the globe.

You can download it here.  Comments, suggestions and wagging fingers are all welcomed.

[Meredith R. Miller]

Out-of-Network Doctors: Officious Intermeddlers?

Saturday's New York Times featured a story about a family that was nearly ruined by medical bills resulting from their infant daughter's emergency heart surgery.  Although the hospital was in network, not all of the doctors who treated the infant were, and so the insurer passed on "balance payments" to the family for the difference between what out-of-network medical personnel charged and what insurance covered for such out-of-network medical personnel.  

According to the story, the family was never informed that some of the people treating the child were out-of-network.  Then they were billed thousands of dollars.  Fortunately, the child's grandmother had the resources to fight the insurers every inch of the way and the story has a relatively happy ending.  They were able to appeal some of the out-of-network charges, and then their insurance company agreed to kick in a bit more of a contribution and the out-of-network provider wrote off the rest.  The family only ended up paying around $10,000.  

That result is likely the result of a compromise that relied on the facts of the particular case, but it also seems like the right result under a theory of restitution.  The family did not agree to have an out-of-network provider provide medical services for their daughter.  When such services were provided, they were provided officiously to the extent that the medical provider sought compensation beyond what the family was willing to pay.  They should not be required to pay in excess of that amount when nobody ever asked them if they would accept services out of network.

However, the facts of this case are relatively easy.  The answer to the question of whether a family would accept out-of-network medical services necessary to save their infant daughter is almost certainly yes.  But what follows from that.  One could argue that whether or not there is actual consent to treatment by out-of-network providers in an emergency situation, recovery should be limited to in-network charges.  Consent is not meaningful when given under conditions of such emotional duress.  Or one could argue that, because a family would always consent if asked, the officious intermeddler argument above is specious.  Families that want better coverage will have to pay for better insurance.

According to the Times, it is not clear that the Afffordable Care Act (ACA) addresses this problem.  One expert says it doesn't and that the ACA could exacerbate the problem because networks may be smaller on many ACA plans.  On the other hand, the Times reports that under the ACA, annual out-of-pocket expenses should not exceed $6,350 for individuals and $12,700 for a family of two or more in 2014.   

The distinction between in-network and out-of-network is likely a historical accident in the United States.  I would guess that it is unknown in many of the 45 countries whose health care systems are regarded as more efficient than that of the United States.  Twenty-three of these countries have higher life expectancies than the U.S.  Overall, in a 2000 study, the World Health Organization ranked the United States 38th overall in the quality of its healthcare system, despite the fact that the U.S. in #1 in per capita expenditures on health care.

[JT]

U. of Chicago Law to Host Panel on the Contracts Scholarship of Douglas Baird

Lunchtime Panel: Baird's Contracts

Date: Wednesday, October 23, 2013 - 12:15pm - 1:30pm

Location: 

 Classroom II

Contact info: Marjorie Holme, [email protected]

Reconstructing Contracts: The Contracts Scholarship of Douglas Baird

A panel of leading scholars discuss Douglas Baird's pathbreaking work on Contract Law published in his new book "Reconstructing Contracts."

• Avery Katz, Vice Dean and Milton Handler Professor of Law, Columbia Law School
• Stewart Macaulay, Malcolm Pitman Sharp Professor & Theodore W. Brazeau Professor, University of Wisconsin Madison Law School
• Ariel Porat, The Alain Poher Chair in Private Law, Faculty of Law, Tel Avivi University

Moderated by Omri Ben-Shahar, Leo and Eileen Herzel Professor of Law and Economics and Kearney Director of the Coase-Sandor Institute for Law & Economics, University of Chicago Law School

Lunch will be provided.

Faculty: 

 Douglas G. Baird

 Omri Ben-Shahar

 Ariel Porat

 

[JT]

Reflections on the First Minimester, Part I

I have been periodically reporting in this space on my Law School's new curriculum, which features a new approach to contracts.  We have broken each semester into two, seven-week minimesters, and the traditional four-credit, fourteen-week contracts course has been broken into two, two-credit, seven-week courses.  As a result, I have just finished grading my students' final exams.

Here are some preliminary thoughts on the experiment thus far:

1.    The frequent assessments that we did helped me to understand that students have difficulties with concepts that I had forgotten were difficult.  I'm sure these concepts were difficult for me as well when I was a law student, but after teaching for ten years, they have become dangerously familiar.  For example, I discovered that the distinction between "additional" and "different" terms in UCC 2-207 is not obvious to a lot of students.  I never paused to consider that in past years, but we had a quiz on the battle of the forms, and many students preparing for the quiz asked me to explain it.  Similarly, I learned this year that the phrase "within the statute of frauds" does not obviously and easily translate into "a type of contract that, in order to be enforceable, must be in a writing signed by the party to be charged."  

2.     I had some concerns going in that it would be difficult for students to prepare themselves for a law school exam just seven weeks into their first semester, and there were no doubt students for whom seven weeks was not enough time to digest all the material we covered in the first minimester.  So, I am a bit concerned that some students will underperform on this exam because they are slower than the median at making the adjustment to the law school environment, and I suspect there are students who are slow at the start but nonetheless are capable of developing a profound understanding of the law.  But see #4.

3.    I also had concerns about our students' preparation for law school essay exams, but I actually found that this year's essays were not qualitatively different from those of past years, to the extent that comparison is possible.  There was, as always, a tremendous range in students' approaches to writing the essays, but it was all within expected parameters.

4.     The purpose of the minimester in contracts is to give students a meaningful assessment early on.  This will give students a realistic sense of where they stand in relation to their peers.  It will also help us to identify the students who need additional academic support, and it may even help us to identify what sort of academic support they need.  Since all law students are above average, I expect that many of my students will be disappointed by the grades they receive in Contracts I.  I hope that their response will not be to become discouraged but to re-double their efforts and get the support they need from our able academic support team.  

5.     In years past, when a student would perform dismally in contracts, there was not much I could do beyond handing tissues and hoping that the poor performance was a fluke.  This year, because of the minimester system, I have a real opportunity to work with students to address difficulties before they become career-threatening.  And if students perform consistently poorly in both Contracts I and Contracts II, I will feel much more confident not in showing students the door but in encouraging them to prepare themselves for the possibility that a career in the law may not be in the cards.

My students will get their first minimester grades at the end of the week.  I expect that I will be very busy next week meeting with students who want to go over their exams and extract valuable lessons from the experience.  Part II of this post will address the extent to which that expectation is met.

[JT]

Arbitration Agreement Found Unconscionable

Just when you start to lose faith in the judiciary, a couple of cases come along that suggest that some judges are willing to exercise common sense.  I blogged about Judge Koh’s opinion regarding consent in a case involving Google and email scanning in a previous post.  Today, I want to talk about a case that was even more delightful because it bucked the wave of arbitration clause cases ruling against consumers.  In Clark v. Renaissance West, LLC, the Superior Court of Maricopa County found an arbitration clause substantively unconscionable and therefore unenforceable -- and the Court of Appeals affirmed!

The plaintiff was John H. Clark, an eighty-eight year old man who was admitted into a nursing facility owned by Renaissance West.  After checking in, he signed an arbitration agreement which required him to arbitrate all disputes with Renaissance West.  After he was discharged, he filed a complained alleging that while he was at the nursing facility, he had been neglected and consequently, suffered a severe pressure ulcer that required medical treatment and long term case.  Renaissance West moved to dismiss and compel arbitration.  The trial court held an evidentiary hearing at which Clark’s expert witness testified that it would cost Clark approximately $22,800 in arbitrator’s fees to arbitrate the case.  The trial court ruled that based upon Clark’s limited income (he was retired and living on a fixed income), the arbitration agreement was substantively unconscionable.  The Court of Appeals agreed.

There were several noteworthy aspects to this case.  First, the trial court found that the arbitration agreement was not procedurally unconscionable.  The Agreement was a separate document from other paperwork signed at the time of admission, it was conspicuous and in bold font and large print.  It was also not offered on a take-it-or-leave-it basis and it could have been rescinded within thirty days of signature.  But, as Maxwell v. Fidelity held, you don’t need both procedural and substantive unconscionability in Arizona.  Substantive unconscionability will do.

The Court of Appeals noted that an arbitration agreement “may be substantively unconscionable if the fees and costs to arbitrate are so excessive as to ‘deny a potential litigant the opportunity to vindicate his or her rights.’”  The question of whether arbitration is prohibitively expensive depends “on the unique circumstances of each case” and courts consider the following factors.

The first is “the party seeking to invalidate the arbitration agreement must present evidence concerning the cost to arbitrate.”  This evidence “cannot be speculative,” and must be based upon “specific facts showing with reasonable certainty the likely costs of arbitration.”  The court found that the expert testimony was adequate to establish the estimate cost of $22,800 in arbitrators’ fees alone.

The second factor is that a party must make  a “specific individualized showing as to why he or she would be financially unable to bear the costs of arbitration” based upon his or her specific income/assets.  Here, the plaintiff testified that he was retired, living on a fixed income, and did not have any financial resources such as savings or stocks.  His total monthly income of $4,630, consisted of social security benefits, a pension and veteran’s assistance payments.  The court deferred to the trial court’s finding that in light of these facts, arbitration would be cost-prohibitive. 

The third factor is “whether the arbitration agreement or the applicable arbitration rules references in the arbitration agreement permit a party to waive or reduce the costs of arbitration based on financial hardship.”  In this case, the arbitration agreement did not provide for a reduction or waiver of fees based upon financial hardship.  Strike three.

Based upon an analysis of the three above factors, the court concluded that there was reasonable evidence to support the trial court’s finding that plaintiff would be unable to afford to arbitrate his claims. Consequently, the arbitration agreement “effectively precludes Plaintiff from obtaining redress for any of his claims, and is therefore substantively unconscionable and unenforceable.”

[Nancy Kim]

Weekly Top Tens from the Social Science Research Network

RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of Contracts & Commercial Law eJournal 
August 16, 2013 to October 15, 2013

Rank	Downloads	Paper Title
1	133	Freedom of Contracts  Michael A. Heller, Hanoch Dagan,  Tel Aviv University - Buchmann Faculty of Law, Columbia University - Columbia Law School
2	102	A Model Litigation Finance Contract  Maya Steinitz, Abigail Field,  University of Iowa - College of Law, Unaffiliated Authors - Independent
3	98	Indescendibility  David Horton,  University of California, Davis - School of Law
4	83	The Challenge of Boilerplate  Robin Bradley Kar,  University of Illinois at Urbana-Champaign - College of Law
5	83	Distributive Justice and Contract  Aditi Bagchi,  Fordham University - School of Law
6	76	Justice and Harsh Results: Beyond Individualism and Collectivism in Contracts  Kenneth K. Ching,  Regent University - School of Law
7	75	A Presumptively Better Approach to Arbitrability  John A. E. Pottow, Jacob Brege, Tara J. Hawley,  University of Michigan Law School, University of Michigan at Ann Arbor - University of Michigan Law School, University of Michigan Law School
8	58	Property as Platform: Coordinating Standards for Technological Innovation  Henry E. Smith,  Harvard Law School
9	55	Law Wars: Australian Contract Law Reform vs CISG vs CESL  Lisa Spagnolo,  Monash University - Faculty of Law
10	55	Managing Our Money: The Law of Financial Fiduciaries as a Private Law Institution  Hanoch Dagan, Sharon Hannes,  Tel Aviv University - Buchmann Faculty of Law, Tel Aviv University - Buchmann Faculty of Law

RECENT HITS (for all papers announced in the last 60 days) 
TOP 10 Papers for Journal of LSN: Contracts (Topic)  
August 16, 2013 to October 15, 2013

Rank	Downloads	Paper Title
1	133	Freedom of Contracts  Michael A. Heller, Hanoch Dagan,  Tel Aviv University - Buchmann Faculty of Law, Columbia University - Columbia Law School
2	102	A Model Litigation Finance Contract  Maya Steinitz, Abigail Field,  University of Iowa - College of Law, Unaffiliated Authors - Independent
3	83	The Challenge of Boilerplate  Robin Bradley Kar,  University of Illinois at Urbana-Champaign - College of Law
4	83	Distributive Justice and Contract  Aditi Bagchi,  Fordham University - School of Law
5	76	Justice and Harsh Results: Beyond Individualism and Collectivism in Contracts  Kenneth K. Ching,  Regent University - School of Law
6	49	Is There a 'Duty to Read'?  Charles L. Knapp,  University of California - UC Hastings College of the Law
7	45	Cross-Debarment: A Stakeholder Analysis  Christopher R. Yukins,  George Washington University - Law School
8	44	The Interpretation and Fairness of Standardized Terms: Certainty and Predictability Under the CESL and the CISG Compared  Nicole Kornet,  Maastricht University - European Private Law Institute (M-EPLI), Maastricht University - METRO Institute
9	38	Software Tools for the Visualization of Definition Networks in Legal Contracts  Michael Curtotti, Eric McCreath, Srinivas Sridharan,  Australian National University (ANU), Australian National Univerity, University of California, San Diego (UCSD)
10	28	Social Media and the Rise in Consumer Bargaining Power  Wayne Barnes,  Texas A&M University (TAMU) - School of Law

[JT]