ContractsProf Blog

Contract Drafting Sources that Promote Substance Over Style

 
Now that we are back in school, I wanted to draw attention to a couple of great new resources for those who are teaching contract drafting or those who would like to incorporate some contract drafting concepts or clauses into their Contracts courses.  The first is an informative article by Lori Johnson, a Professor-in-Residence at University of Nevada, Las Vegas ,  Say The Magic Word:  A Rhetorical Analysis of Contract Drafting Choice, 65 SYRACUSE L. REV. 451 (2015). One of my pet peeves is when contract drafting stylists advocate the modification or even wholesale deletion of contract terms without understanding their underlying purpose simply because it "sounds better."  Johnson explains why it's important to distinguish between legalese without substance (words such as heretofore, whereas, etc.) and legal terms that have a substantive purpose.  I found this article to be refreshing because it focuses on the substance of contract clauses, not just drafting style, with the ultimate goal of protecting the client's interest.

Speaking of the substance of contract clauses -- the second helpful resource is Houston-based attorney D.C. Toedt's Common Draft, an online resource that is basically an encyclopedia of various contract clauses.  It's quite an effort and well worth exploring. 

Washington Post Exposes Scam that Takes Advantage of Recipients of Structured Settlements

The article is here.

It speaks for itself.

There are a million reasons why these contracts, which offer pennies on the dollar on the present value of the settlement, should not be enforced.  Feel free to offer your legal theories in the comments!

Weekly News Roundup

In breaking Bieber news, HuffPo reports that Justin Bieber (pictured, left) claimed breach of contract in canceling a scheduled appearance in Montreal.  The venue where Bieber was scheduled to perform seems to belieber the young artist, as it posted on its Facebook page a notice that neither it nor Mr. Bieber were liable for the cancellation.  Bieber himself tweeted the cancellation, specifically referring to the promoter's breach (and to lying, but we prefer the legal jargon).

In Presidential candidate news, the Wisconsin Gazette reported that Wisconsin taxpayers might have to pay $50 million in damages because Governor Scott Walker (pictured, right) breached a contract that his predecessor had entered into to modernize the states rail service.  According to the Gazette, Spanish train-maker Talgo sued the state for $66 million.  The case settled, with the state agreement to pay nearly $10 million on top of the $42 million it had already paid for trains that it never received. 

The Washington Post reports that a Maryland firm, CNSI, that lost a $200 million contract when its Senior Vice President blew the whistle on irregularities in the award of the contract.  CNSI won a contract to process medicaid claims for the state of Louisiana while one of its former executives was Louisiana's Secretary of the Department of Health and Hospitals.  The contract was cancelled in 2013 and the Secretary of the Department of Health and Hospitals has been indicted for perjury.  CNSI claims that the whistle blower was a disgruntled employee who breached his contract and tortiously interfered.  An investigation into possible wrongdoing by CNSI in connection with the contract is ongoing.

Weekly Top Tens from the Social Science Research Network

SSRN Top Downloads For Contracts & Commercial Law eJournal
RECENT TOP PAPERS 

Rank	Downloads	Paper Title
1	140	The Commission's E-Commerce Sector Inquiry – Analysis of Legal Issues and Suggested Practical Approach  Lars Kjølbye, Alessio Aresu and Sophia Stephanou  Latham & Watkins LLP, Latham & Watkins LLP and Latham & Watkins LLP
2	122	Common Law Values: The Role of Party Autonomy in Private Law  Sarah Worthington  University of Cambridge - Faculty of Law
3	111	Legal Aspects of Subordinated Debt Instruments  Vinod Kothari  Visiting Faculty, Indian Institute of Management
4	108	The Laws of Asian International Business Transactions  Gilles Cuniberti  Universite du Luxembourg - Faculty of Law, Economics and Finance
5	90	A Comprehensive Theory of Civil Settlement  J.J. Prescott and Kathryn E. Spier  University of Michigan Law School and Harvard University - Law School - Faculty
6	75	Contract Formation and Performance Under the UCC and CISG: A Comparative Case Study  Kurt M. Saunders and Leonard Rymsza  California State University, Northridge and California State University, Northridge - Department of Business Law
7	72	Contract as Evil  Peter Linzer  University of Houston - University of Houston Law Center
8	71	The Normative Force of Consent  Heidi M Hurd  University of Illinois College of Law
9	67	Contract Design and the Shading Problem  Robert E. Scott  Columbia University - Law School
10	63	The Risks of Shadow Insurance  Daniel Schwarcz  University of Minnesota Law School

SSRN Top Downloads For LSN: Contracts (Topic)
RECENT TOP PAPERS 

Rank	Downloads	Paper Title
1	140	The Commission's E-Commerce Sector Inquiry – Analysis of Legal Issues and Suggested Practical Approach  Lars Kjølbye, Alessio Aresu and Sophia Stephanou  Latham & Watkins LLP, Latham & Watkins LLP and Latham & Watkins LLP
2	122	Common Law Values: The Role of Party Autonomy in Private Law  Sarah Worthington  University of Cambridge - Faculty of Law
3	108	The Laws of Asian International Business Transactions  Gilles Cuniberti  Universite du Luxembourg - Faculty of Law, Economics and Finance
4	90	A Comprehensive Theory of Civil Settlement  J.J. Prescott and Kathryn E. Spier  University of Michigan Law School and Harvard University - Law School - Faculty
5	83	The Ties That Bind: LLC Operating Agreements as Binding Commitments  Joan MacLeod Heminway  University of Tennessee College of Law
6	77	צדק פרוצדורלי וצדק מהותי בדיני חוזים: עושק וכפייה כמקרי מבחן (Procedural and Substantive Fairness in Contract Law: Exploitation and Duress as Test Cases)  Eyal Zamir  Hebrew University of Jerusalem - Faculty of Law
7	75	Contract Formation and Performance Under the UCC and CISG: A Comparative Case Study  Kurt M. Saunders and Leonard Rymsza  California State University, Northridge and California State University, Northridge - Department of Business Law
8	72	Contract as Evil  Peter Linzer  University of Houston - University of Houston Law Center
9	71	The Normative Force of Consent  Heidi M Hurd  University of Illinois College of Law
10	67	Contract Design and the Shading Problem  Robert E. Scott  Columbia University - Law School

 

Contracting to Pollute

Hugely successful auto-maker Tesla is making very good money not only on its electric cars, but also on its contracts selling zero emission credits to rivaling automakers. New environmental standards in eleven states require that by 2025, 15% of a car company’s sold fleet must be so-called “zero emission” vehicles.  If a company cannot meet existing standards, they can purchase zero emissions credits from other companies that can. Tesla is one of those.

This year, Tesla has sold approximately $68 million worth of credits to competing automakers, which represents 12% of its overall revenue. Overall, Tesla is doing very well: its net profit for the first quarter of this year was more than $11 million and its shares have been reported to be up more than 165% so far this year.

This raises the question that I also raised here on this blog in another post earlier this summer: is the emissions trading scheme a good idea, or does it simply allow for glorified “contracts to pollute”? As with many other things in the law, both could be seen to be the case. See this report that casts doubt on whether carbon credits help or hurt the agenda. Some call them "hot air,"perhaps for good reason. But at least Tesla is, hopefully, challenging other automakers to innovate to pollute less.

Another question, though, is the use of the euphemism “zero emissions.” Electric vehicles are arguably better seen from an environmental point of view than traditional cars, but they are not “zero” emissions.  They could, instead, be called “emissions elsewhere” vehicles.  That, of course, does not sound nearly as good. However, the electricity used for electric cars is produced somewhere. The true question is: by what means? If the electricity stems from dirty coal-fired power plants, the solution is not as good as it sounds, although concentrating the pollution in one large plant may be better than having many individual cars produce power on the road. That is a question for another forum. Suffice it to say that choice is good, and if car buyers could also in all locales could always decide exactly how to source their electricity (from, for instance, solar power), the matter would be different. That is not (yet) the case. So for now, “zero emission” vehicles are actually not so.

Good Enough Notice -- Even if Not for Assent

A recent case out of the Eastern District of California, Handy v. LogMeIn, found that there was notice good enough to defeat a consumer's claims under California's Unfair Competition and False Advertising Laws -- even if that notice might not be sufficient for contract formation.

Darren Hardy obtained LogMeInFree which was provided free of charge and allowed users to remotely access a desktop computer from another computer.  Some time later, he purchased Ignition for $29.99 which allowed him to access a computer using a tablet or smart phone.  Four years later, the defendant, LogMeIn, discontinued the free LogMeIn product although it offered LogMeInPro for $49/year for two computers.  Handy claimed that LogMeIn, when marketing Ignition, should have informed consumers that LogMeInFree could be discontinued in the future.

LogMeIn's "Terms and Conditions of Use" stated that users accepted

 "BY COMPLETING THE ELECTRONIC ACCEPTANCE PROCESS, CLICKING THE "SUBMIT"  OR "ACCEPT" BUTTONS, SIGNING, USING ANY OF THE PRODUCTS OR OTHERWISE INDICATING YOUR ACCEPTANCE OF THESE TERMS .  ."

The Terms allowed the company to "to modify or discontinue any Product for any reason or no reason with or without notice to You or the Contracting Party. LMI shall not be liable to You or the Contracting Party or any third party should LMI exercise its right to revise these Terms or modify or discontinue a Product."  It also allowed the company to "in its sole discretion immediately terminate these Terms and this subscription, license and right to use any Product if . . . LMI decides, in its sole discretion, to discontinue offering the Product. LMI shall not be liable to You, the Contracting Party or any third party for termination of the Service or use of the Products . . ."

The plaintiff argued that he didn't remember being prompted to review the Terms and Conditions prior to buying Ignition or during his use of it.  He also stated that if he had known that LogMeInFree would be discontinued, he would not have purchased Ignition.

California's False Advertising Law (Cal. Bus. & Prof. Code section 17500) states that it is unlawful for any company to make any untrue or misleading statement in advertising.  California Unfair Competition Law (Cal. Bus. &  Prof. Code section 17200) prohibits "unlawful, unfair, or fraudulent" business practices.  Because the plaintiff's claims under both Laws relied upon claims that the defendant engaged in knowing deception, the plaintiff was subject to the heightened pleading standards of Rule 9(b) of the FRCP. 

The Court granted the defendant's motion to dismiss because the plaintiff failed to meet the heightened pleading standard for fraud.  It found that the plaintiff failed to provide sufficient factual detail to state his claims for several reasons although I'll only discuss the contract-related one.  The court found that LogMeIn provided notice that LogMeInFree could be terminated in its Terms and Conditions of Use.  While Handy argued that the Terms were not binding as they were a "browsewrap," the court stated that missed the point:

   "Whether the Terms and Conditions constituted an enforceable contract is irrelevant to whether the Terms and Conditions related to LogMeInFree provided notice to prospective purchasers of the Ignition app that LogMeInFree could be discontinued....the fact that Defendant posted on its website information that told users that LogMeInFree could be terminated undermines Plaintiff's claims. Though this information was not forced on Plaintiff through a clickwrap, the evidence makes clear that Defendant did publish the fact that it reserved the right to terminate the free app, LogMeInFree."

In other words, the court found that terms on a website could provide sufficient notice to defeat a claim based upon deception even if the notice wasn't sufficient to meet the standards for contractual assent. 

 

 

They Did It!

Earlier this summer, I blogged on cheating website Ashley Madison promising to provide "100% discreet service" and a group of hackers threatening to reveal the website's customers if the website was not removed.  Well, it was not, and this past week, the group made good on its promise or threat, depending on how one views the issue, to make the stolen database easily available to the general public. 

In spite of Ashley Madison's promise to be "100% discreet" (whatever that means), the fine print used in its contracts also states, "We cannot ensure the security or privacy of information you provide through the Internet."  No contractual promises seen to have been breached if that had been the only promise made.  But as Steve Hedley wrote in his comment (see below), some of those inconvenienced by the hack include a number who paid a fee of $19 specifically for a "full delete". Does US contract law really allow Ashley Madison to take their money and then rely on fine print to justify a complete failure?  That is a very good point and indeed does not seem to be the case.  It could, of course, be that those who paid for a full delete got it and were _not_ among the ones in the publicized batch, but judging solely from media reports on this account, complaints have been made that the promised "full deletes" were not undertaken, so it seems that at least some that paid _additional_ money to become deleted from the website did not get what they paid for.  That's a breach.  Thanks, Steve Hedley, for that comment. 

But the matter is more serious and sad than that: the website was/is apparently also used for finding homosexual partners, which is illegal and carries the death penalty in countries such as Iran, Saudi Arabia, and the United Arab Emirates, where two users were listed.

Not surprisingly, this story again shows the importance of internet data security.  One would think that after the recent HomeDepot, Target and other database breach episodes, people would have learned, but apparently, this is not the case.

 

Teaching Again . . . and Thinking about Goods

We started up again this week, so I am once again having the pleasure of introducing students to the glorious realm of contracts law.  Today, we will be delving into Article 2 of the Uniform Commercial Code for the first time, starting with concepts like "goods" and "merchants."  I use Blum's Examples and Explanations as a supplement to the cases I use with my students.  He has a series of questions about whether various transactions are sales of goods.  One involves the sale of a cow.  

I have a fantasy Socratic exchange about this example:

Me: Is a cow a good?
Student: Yes, it is a good.
Me: How do you know that a cow is a good?
Student: A cow is a good because UCC §2-105 defines "goods" to include all things moveable at the time identified for sale.  It also specifies that the unborn young of animals are goods, so it follows a fortiori that the animals themselves also must be goods.
Me: Interesting, but the answer I was looking for was "because it moooooooooves."

Blum then moves on to more difficult examples involving hybrid contracts.  The Contracts Listserv has been hopping with discussion of this very topic.  I remain puzzled by the preference for the preponderant purpose test.  As I argued here, the gravamen of the action test makes far more sense to me.

Forthcoming Scholarship from Your Blog Editors

Nancy S. Kim and I have an article, Internet Giants as Quasi-Governmental Actors and the Limits of Contractual Consent, forthcoming in the Missouri Law Review, and that journal has been kind enough to feature our abstract on their homepage.  

We look forward to seeing this one in print, and as usual the work has improved throughout the editing process, but if you can't wait for the final version, a draft is still up on SSRN.

Or, if you want the elevator speech, you can watch this video.

 

Weekly Top Tens from the Social Science Research Network

SSRN Top Downloads For Contracts & Commercial Law eJournal
RECENT TOP PAPERS 

Rank	Downloads	Paper Title
1	151	Corporate Legacy  Andrew A. Schwartz  University of Colorado Law School
2	132	The Commission's E-Commerce Sector Inquiry – Analysis of Legal Issues and Suggested Practical Approach  Lars Kjølbye, Alessio Aresu and Sophia Stephanou  Latham & Watkins LLP, Latham & Watkins LLP and Latham & Watkins LLP
3	119	Common Law Values: The Role of Party Autonomy in Private Law  Sarah Worthington  University of Cambridge - Faculty of Law
4	113	Overcoming the Knowledge Problem in Behavioral Law and Economics: Uncertainty, Decision Theory, and Autonomy  Philipp Hacker  Humboldt University of Berlin
5	110	Legal Aspects of Subordinated Debt Instruments  Vinod Kothari  Visiting Faculty, Indian Institute of Management
6	105	The Laws of Asian International Business Transactions  Gilles Cuniberti  Universite du Luxembourg - Faculty of Law, Economics and Finance
7	86	A Comprehensive Theory of Civil Settlement  J.J. Prescott and Kathryn E. Spier  University of Michigan Law School and Harvard University - Law School - Faculty
8	71	Contract Formation and Performance Under the UCC and CISG: A Comparative Case Study  Kurt M. Saunders and Leonard Rymsza  California State University, Northridge and California State University, Northridge - Department of Business Law
9	68	Contract as Evil  Peter Linzer  University of Houston - University of Houston Law Center
10	65	Secret Consumer Scores and Segmentations: Separating Consumer 'Haves' from 'Have-Nots'  Amy Schmitz  University of Colorado Law School

SSRN Top Downloads For LSN: Contracts (Topic)
RECENT TOP PAPERS 

Rank	Downloads	Paper Title
1	132	The Commission's E-Commerce Sector Inquiry – Analysis of Legal Issues and Suggested Practical Approach  Lars Kjølbye, Alessio Aresu and Sophia Stephanou  Latham & Watkins LLP, Latham & Watkins LLP and Latham & Watkins LLP
2	119	Common Law Values: The Role of Party Autonomy in Private Law  Sarah Worthington  University of Cambridge - Faculty of Law
3	105	The Laws of Asian International Business Transactions  Gilles Cuniberti  Universite du Luxembourg - Faculty of Law, Economics and Finance  Date posted to database: 26 Jun 2015  Last Revised: 26 Jun 2015
4	86	A Comprehensive Theory of Civil Settlement  J.J. Prescott and Kathryn E. Spier  University of Michigan Law School and Harvard University - Law School - Faculty
5	81	The Ties That Bind: LLC Operating Agreements as Binding Commitments  Joan MacLeod Heminway  University of Tennessee College of Law
6	75	צדק פרוצדורלי וצדק מהותי בדיני חוזים: עושק וכפייה כמקרי מבחן (Procedural and Substantive Fairness in Contract Law: Exploitation and Duress as Test Cases)  Eyal Zamir  Hebrew University of Jerusalem - Faculty of Law
7	71	Contract Formation and Performance Under the UCC and CISG: A Comparative Case Study  Kurt M. Saunders and Leonard Rymsza  California State University, Northridge and California State University, Northridge - Department of Business Law
8	67	Contract as Evil  Peter Linzer  University of Houston - University of Houston Law Center
9	63	Contract Design and the Shading Problem  Robert E. Scott  Columbia University - Law School
10	54	Liberty at the Borders of Private Law  Donald J. Smythe  California Western School of Law

 

 

Something Really Interesting Is Going on in Iowa

 

It's not the Caucuses -- duh!

FACULTY POSITIONS

 

            THE UNIVERSITY OF IOWA COLLEGE OF LAWanticipates hiring several tenured/tenure track faculty members and clinical faculty members (including a director for field placement program) over the coming year. Our goal is to find outstanding scholars and teachers who can extend the law school’s traditional strengths and intellectual breadth. We are interested in all persons of high academic achievement and promise with outstanding credentials. Appointment and rank will be commensurate with qualifications and experience. Candidates should send resumes, references, and descriptions of areas of interest to:  Faculty Appointments Committee, College of Law, The University of Iowa, Iowa City, Iowa  52242-1113.

            THE UNIVERSITY OF IOWA is an equal opportunity/affirmative action employer. All qualified applicants are encouraged to apply and will receive consideration for employment free from discrimination on the basis of race, creed, color, national origin, age, sex, pregnancy, sexual orientation, gender identity, genetic information, religion, associational preference, status as a qualified individual with a disability, or status as a protected veteran.

Contract Dispute Keeps Top Athlete off U.S. Track & Field Team

By Phil Roeder from Des Moines, IA, USA

I often begin my course by telling students that contracts facilitate mutually beneficial transactions.  So, if they want to be the kind of attorneys who make the world a better place, transactional work is the place to be.  But sometimes one-sided contracts drawn up in a context of vastly unequal bargaining power can prevent mutually beneficial transactions from taking place.  This seems to be occurring in the case of Nick Symmonds, a six-time U.S. outdoor champion at 800 meters who won a silver medal at the 2013 World Championships.  According to this story in the New York Times, Symmonds has been left off the U.S. team for the 2015 Worlds taking place later this month because he refused to sign a contract.

Symmonds refused to sign a vaguely-worded document that seemed to require that athletes wear Nike gear exclusively, even in their free time.  Nike, according to the Times, has committed to sponsoring U.S. Track & Field to the tune of $20 million per year through 2040.  But that contract might interfere with Symmonds' contractual obligations with his own sponsor, the running-shoe company, Brooks.  According to the Times, athletes were instructed to pack only Nike-branded or non-branded apparel for the World Championships.  Symmonds points out that Brooks is paying for him to wear its brand at important events.  If he is prohibited from doing so, why would Brooks continue to sponsor him.  Symmonds is all for the Stars and Stripes, but he also has to worry about dollars and cents.  He estimates that 75% of his income comes through sponsorships.

Symmonds does not object to wearing Nike apparel at official events.  He objects to the vague language that seems to preclude him from supporting his sponsor when he is not at official events.  Some are saying that Symmonds is taking this position because he has no chance to medal at the Worlds anyway, so he has nothing to lose.  The photo above shows him winning the US championships in 2010.  He won again in 2015.  If that guy has no chance, what does it say about the rest of the team?

Contractual Issues and the Resignation/Termination of University of Illinois' Chancellor Phyllis Wise

According to this Chicago Tribune report, the University of Illinois' Chancellor, Phyllis Wise (pictured), and its Board of Trustees are fighting over whether she can resign or whether it is too late for her to resign because she has been terminated.  The exchange reminds me of a scene from the old Dick Van Dyke Show.  Laura (Mary Tyler Moore) has been helping out her husband, Rob (Dick van Dyke), by working as a typist, but Laura keeps making jokes that the other writers think are funny, which gets under Rob's skin.  She storms out saying: 

The only reason I came here was to help you, and if I have annoyed you, I sincerely apologize, and to keep from causing you any further annoyance, I want you to know that I'm fired! 

To which Rob responds,  "You can't fire! I quit ya!"

That fight was a product of marital discord, but the current dispute is about contracts and money.  Wise apparently tendered her resignation first, which would have triggered a $400,000 payment.  The Board rejected that resignation and has chose instead to initiate dismissal proceedings.  Wise has responded by tendering a second resignation.  Wise characterizes the $400,000 payment as a pro-rated portion of a retention bonus to which she was entitled under her 2011 contract.  But U of I's President was also offering to keep Wise on in an administrative capacity, which seems like a nice way to justify the payment.  Wise claims entitlement to the payment even though she is now refusing the administrative post.  

Wise stands accused of having used personal e-mail accounts to conduct official business, allegedly in order to escape rules requiring disclosure of official correspondence.  Sound familiar?  

Weekly News Roundup

According to this report in the Chicago Sun Times, The Chicago Teachers' Union (CTU) is calling "strikeworthy" a proposal by Chicago Public Schools (CPS) CEO Forrest Claypool that teachers pay their full pension contributions.  The proposal would result in a seven percent pay cut according to CTU PresidentKaren Lewis.  The CTU had previously agreed to a seven percent "pension pick-up" in lieu of a pay raise.  Claypool now claims that there is no solution to CPS's $9.5 billion pension crisis that does not involve an end to the pick-up.  Chicago teachers will likely return to work without a contract and could strike at any time.   Mayor Rahm Emanuel (pictured) has proposed phasing out the pick-up over a period of years in an attempt to ease the blow.

The Los Angeles Times reports that UC San Diego and the University of Southern California (USC) have filed competing lawsuits in a battle over control of a long term research project that seeks to develop treatments for Alzheimer's.  A researcher at UC San Diego switched his affiliation to USC and has sought to take some of the project's funding with him.   In early rounds, a San Diego judge has sided with UC San Diego on ownership of the project, including databases relevant to the project's ongoing research.  Eli Lilly & Co. had pledged up to $76 million to UC San Diego to test a new Alzheimer's medication that the company is developing.  Lilly now plans to move those fund to USC's new institute.  The future of this research project seems caught in the cross-hairs of competing claims to contractual entitlement to both funding sources and intellectual property.

The Business Insider reported last week that Fox Sports analyst Craig James is suing the network, alleging that he was fired for voicing his opposition to gay marriage.  James alleges breach of contract and discrimination.  His termination, days after he was hired, allegedly relates to a statement he made in 2012 when he was running for U.S. Senate that gays and lesbians would have "to answer to the Lord for their actions."

Weekly Top Tens from the Social Science Research Network

SSRN Top Downloads For Contracts & Commercial Law eJournal
RECENT TOP PAPERS 

Rank	Downloads	Paper Title
1	210	The Law, Economics, and Psychology of Manipulation  Eric A. Posner  University of Chicago - Law School
2	125	Controlling Shareholder's Long-Term Commitment Through Private Benefits of Control  Albert H. Choi  University of Virginia School of Law
3	124	The Commission's E-Commerce Sector Inquiry – Analysis of Legal Issues and Suggested Practical Approach  Lars Kjølbye, Alessio Aresu and Sophia Stephanou  Latham & Watkins LLP, Latham & Watkins LLP and Latham & Watkins LLP
4	114	Common Law Values: The Role of Party Autonomy in Private Law  Sarah Worthington  University of Cambridge - Faculty of Law
5	106	Overcoming the Knowledge Problem in Behavioral Law and Economics: Uncertainty, Decision Theory, and Autonomy  Philipp Hacker  Humboldt University of Berlin
6	105	Legal Aspects of Subordinated Debt Instruments  Vinod Kothari  Visiting Faculty, Indian Institute of Management
7	104	Lexical Opportunism and the Limits of Contract Theory  Jeffrey M. Lipshaw  Suffolk University Law School
8	99	The Laws of Asian International Business Transactions  Gilles Cuniberti  Universite du Luxembourg - Faculty of Law, Economics and Finance
9	95	Reinterpreting the Status-Contract Divide: The Case of Fiduciaries  Hanoch Dagan and Elizabeth S. Scott  Tel Aviv University - Buchmann Faculty of Law and Columbia University - Law School
10	82	A Comprehensive Theory of Civil Settlement  J.J. Prescott and Kathryn E. Spier  University of Michigan Law School and Harvard University - Law School - Faculty

SSRN Top Downloads For LSN: Contracts (Topic) 
RECENT TOP PAPERS 

Rank	Downloads	Paper Title
1	210	The Law, Economics, and Psychology of Manipulation  Eric A. Posner  University of Chicago - Law School
2	124	The Commission's E-Commerce Sector Inquiry – Analysis of Legal Issues and Suggested Practical Approach  Lars Kjølbye, Alessio Aresu and Sophia Stephanou  Latham & Watkins LLP, Latham & Watkins LLP and Latham & Watkins LLP
3	114	Common Law Values: The Role of Party Autonomy in Private Law  Sarah Worthington  University of Cambridge - Faculty of Law
4	104	Lexical Opportunism and the Limits of Contract Theory  Jeffrey M. Lipshaw  Suffolk University Law School
5	99	The Laws of Asian International Business Transactions  Gilles Cuniberti  Universite du Luxembourg - Faculty of Law, Economics and Finance
6	95	Reinterpreting the Status-Contract Divide: The Case of Fiduciaries  Hanoch Dagan and Elizabeth S. Scott  Tel Aviv University - Buchmann Faculty of Law and Columbia University - Law School
7	82	A Comprehensive Theory of Civil Settlement  J.J. Prescott and Kathryn E. Spier  University of Michigan Law School and Harvard University - Law School - Faculty
8	80	The Ties That Bind: LLC Operating Agreements as Binding Commitments  Joan MacLeod Heminway  University of Tennessee College of Law
9	78	A Quick Fix? Credit Repair in Australia  Paul Ali, Lucinda O'Brien and Ian Ramsay  University of Melbourne - Law School, Melbourne Law School and University of Melbourne - Law School
10	75	צדק פרוצדורלי וצדק מהותי בדיני חוזים: עושק וכפייה כמקרי מבחן (Procedural and Substantive Fairness in Contract Law: Exploitation and Duress as Test Cases)  Eyal Zamir  Hebrew University of Jerusalem - Faculty of Law

More on the Charleston Law School Case

One of our readers asked for a follow-up on our post on the suit by Charleston Law School professors seeking to enjoin the Law School from eliminating their tenured positions.  We have good news to report, at least provisionally: 

Charleston's Post & Courier reports that a judge last week blocked the termination of two tenured law professors until their suit against the law school is either settled or adjudicated.

More on the Stephen Salaita Case

We shared with our readers Professor Robin Kar's views on the case a while back.

Professor Kar (pictured) has now updated his positions in light of the decision that we reported on last week.

You can find Professor Kar's latest here.

Federal Judge Allows Stephen Salaita's Suit Against the University of Illinois to Proceed

In a case we have been following for a year (here, here, and here, for example), Stephen Salaita is suing the University of Illinois for withdrawing its offer to hire him to teach in its American Indian Studies Program after discovering some intemperate anti-Zionist tweets Mr. Salaita had posted.  This week, a Federal District Court ruled on the University's motion to dismiss the claim.  While the Court dismissed some of Salaita's claims, his breach of contract and first amendment claims were allowed to proceed.  The case is Salaita v. Kennedy, and the opinion is here.

The claim that we care about is, of course, the breach of contract claim.  Mr. Salaita signed an employment letter and so claimed that he had a contract with the University.  The University claimed that there was no contract because the offer of employment was subject to approval of the University's Board, which never occurred.  The Court carefully parsed the language of the offer letter and found that the offer was not conditional on board approval.  Rather, board approval was a condition of performance of the contract; it was not a condition of the offer.

Although the Court conceded that the language of the offer letter might be ambiguous, the University's conduct resolved such ambiguities in favor of a finding of a contract.  The University paid Mr. Salaita's moving expenses, gave him office space and an e-mail address, and referred to him as "our employee." 

If the Court accepted the University’s argument, the entire American academic hiring process as it now operates would cease to exist, because no professor would resign a tenure position, move states, and start teaching at a new college based on an “offer” that was absolutely meaningless until after the semester already started. In sum, the most reasonable interpretation of the “subject to” term in the University’s offer letter is that the condition was on the University’s performance, not contract formation.

The Court then quickly rejected the University's argument that the Dean had no authority to make the offer to Mr. Salaita.

Contractual Curiosity in the NFL

By Mike Morbeck via Wikimedia Commons

Yesterday's New York Times included a report on the odd case of Jason Pierre-Paul (pictured), a New York Giants lineman who injured himself in a fireworks accident last month.  The injury came while Pierre-Paul and the Giants were negotiating his contract, and right now the player is in a contractual limbo.  The Giants named Pierre-Paul as a "franchise player" and offered him a one-year $14.8 million contract.  Pierre-Paul refused that offer, holding out for a multi-year deal.

Pierre-Paul is part of the team but he currently has no contract and thus can refuse to allow visits from team doctors.  Apparently, he has elected to do so, and so the Giants do not know the extent of his injury or how it will affect his play.  The Times reports that Pierre-Paul had to have his right finger amputated and that there was other damage to his hand, but that is all we and presumably all the Giants know  for now.   There seems to be a lot of brinksmanship involved, but it also seems likely that in the end, Pierre-Paul will accept the one-year deal.  The Giants may then invoke their right to dock Pierre-Paul's pay if he misses games due to "non-football injury."  

The Times speculates that Pierre-Paul may be holding out so that he has time to recover and avoid a loss of pay.  I'm not sure how that works.  What if he misses practices (training camp has already begun)?  Why would the Giants agree to his return before they have been permitted to thoroughly test his playing ability?  One answer is that Pierre-Paul would then become a free agent who could jump to a rival.  Perhaps a realistic possibility, but the Times also notes that Pierre-Paul has underperformed in two of the last three seasons.  NFL football is a high-risk game.

A Justified Existence for Some California Law Schools?

A new Los Angeles Times investigation has revealed that nine out of ten students drop out of unaccredited law schools in California.  Of the few students that graduate, only one in five ultimately become a lawyer.  In other words, a mere 2% of the people that initially enroll in an unaccredited law school end up being attorneys.  Shameful at best.  One example of one person who did not make it as an attorney is former Los Angeles mayor Antonio Villaraigosa who went to “People’s College of Law” and took the bar four times, but never passed.

Unaccredited law schools are said to flourish in California. The state is one of only three in the nation that allow students from unaccredited law schools to take the bar test (the others are Alaska and Tennessee).  Unaccredited schools in California are held to very few academic standards by regulatory bodies and, by their very nature, none by accrediting agencies.

Most of the unaccredited law schools are owned by small corporations or even private individuals.  One, for example, is owned by a“Larry H. Layton, who opened his school in a … strip mall above a now-shuttered Mexican restaurant. He thought the Larry H. Layton School of Law, which charges about $15,000 a year, would grow quickly. But according to the state bar records, he has had six students since 2010.”  

Experts again say that action must be taken.  For example, Robert Fellmeth, the Price Professor of Public Interest Law at the University of San Diego School of Law, has stated that unaccredited schools “aren't even diploma mills, they are failure factories.  They're selling false hope to people who are willing to put everything out there for a chance to be a lawyer."  

As before, the problem goes beyond unaccredited law schools.  Several ABA accredited law schools also demonstrate both poor employment and bar passage statistics, although the problem seems to be the most severe when it comes to unaccredited schools. 

This story is not new to your or many others.  However, it serves as a reminder of the continued importance of both insiders and outsiders taking a renewed look at regulations for (and broader expectations of) law schools in California and beyond. As always, purchasers of anything including educational “services” (which, as the above other and many other studies show, can all too easily turn out to be disservices) should be on the lookout for what they buy. A great deal of naivety by new students seems to be contributing to the problem.  However, that does not justify the tactics and perhaps even the existence of some of these educational providers. Having said that, I also – again – cannot help ask myself what in the world some of these students are thinking in believing that they can beat such harsh odds. Hope springs eternal, it seems, when it comes to wanting to become a California attorney.