Sunday, January 31, 2016
KCON XI Schedule Published
Conference Organizer Colin Marks of St. Mary's University School of Law has published the schedule for the upcoming edition of this blog's favorite conference--the 11th International Conference on Contracts. KCON XI will be held in picturesque San Antonio on February 26-27. The deadline for booking hotel accommodations in the block at the conference rate is just one week away.
For more information on both hotel accommodations and registration, consult the conference website. Meanwhile, take a glance at the schedule below to see the scintillating topics and company you'll be missing if you aren't yet San Antonio bound.
Friday, February 26, 2016
8 – 8:45 a.m. Breakfast and Networking
8:45 – 9 a.m. Welcome to KCON XI
9 – 10:30 a.m. Concurrent Sessions
- Professorial Professions: Creating a Student-centered Contracts Classroom
- Moderator: Hazel Beh, University of Hawai’i
- Charles Calleros, Arizona State University
- Myanna Dellinger, University of South Dakota
- Frank G. Snyder, Texas A&M University
- Adrian J. Walters, Chicago-Kent College of Law
- What You Thought You Knew About Remedies in Sales Transactions May Not Be True: Highlights in Article 2 Remedies and Contracting for Limitations
- Moderator: Wayne Barnes, Texas A&M University
- Sidney DeLong, Seattle University, The Notice of Breach Dilemma: Conflict and Cooperation in Eastern Airlines v McDonnell Douglas
- Nancy Kim, California Western School of Law, Teaching UCC Remedies from Concept to Clause
- Colin Marks, St. Mary’s University School of Law, On-Line and As Is
- Jennifer Martin, St. Thomas University
10:30 – 10:45 a.m. Break (Sponsored by West Academic)
10:45 a.m. – 12:15 p.m. Concurrent Sessions
- Innovations in Teaching and Mentoring
- Moderator: Robert D. Brain, Loyola Law School Los Angeles
- Keith A. Rowley, UNLV William S. Boyd School of Law
- Frank G. Snyder, Texas A&M University
- Ben Templin, Thomas Jefferson School of Law, The New Pedagogy: Here’s the ball. Let’s play catch
- Contract Law in an Administrative and Regulatory Context
- Moderator: James W. Fox Jr., Stetson University College of Law
- Hazel Beh, University of Hawai’i, Insurance as the AntiContract
- David Friedman, Willamette University College of Law, Refining Advertising Regulation
- Peter Marchetti, Texas Southern University, Thurgood Marshall School of Law, Bankruptcy “Clawback” Provisions: Congress Needs to Amend Section 546
- Chris French, Penn State Law, The Illusion of Insurance Contracts
12:15 – 1:30 p.m. Lunch
1:30 – 3 p.m. Concurrent Sessions
- Contract Interpretation and Construction
- Moderator: Deborah Post, Touro Law Center
- Gastón de los Reyes Jr., The George Washington University School of Business, Formality in the Choice Architecture of Contracting: The Case of Paradine v. Jane
- Dan O’Gorman, Barry University, Closing the Parol-Evidence-Rule Loophole: The Consideration Exception and the Preexisting-Duty Rule
- Frank Snyder, Texas A&M University, Consumer Preference and Majoritarian Rule – Empirical Studies in Default Tender Rules
- Eric Zacks, Wayne State University, Standardized Contracts: Restatement (Second) of Contracts Section 211: Unfulfilled Expectations
- Employment Contracts
- Moderator: Bonita K. Roberts, St. Mary’s University School of Law
- Wendy Netter Epstein, DePaul University, Contracting for Results in Health Care?
- Allen Kamp, John Marshall Law School, Employee Wellness Programs: Fundamental Contract Issues
- Meredith R. Miller, Touro Law Center, You’re Fired!: The Effect of Involuntary Termination on Restrictive Covenants
3 – 3:15 p.m. Break – Law Classrooms Building Foyer Area
3:15 – 4:45 p.m. Concurrent Sessions
- The Impact of Virtual Currencies
- Moderator: Daniel Barnhizer, Michigan State University College of Law
- Mark Burge, Texas A&M University, Electronic Payment Systems
- Catherine Christopher, Texas Tech University, Virtual Currency
- Angela Walch, St. Mary’s University School of Law
- Contract Drafting
- Moderator: Danielle Hart, Southwestern Law School
- Nadelle Grossman, Marquette University, Transactional Contracts and Textbook Simulation Discussion
- Russell Korobkin, UCLA School of Law, Bargaining with the CEO: The Case for “Negotiate First, Choose Second”
- Jane Winn, University of Washington, Framework Contracts and the New Managerial Revolution
5:30 – 9 p.m. Reception Dinner and Lifetime Achievement Award Ceremony Honoring Peter Linzer
Saturday, February 27, 2016
8 – 9 a.m. Breakfast and Networking
9 – 10:30 a.m. Concurrent Sessions
- Theoretical Perspectives on Contract Law
- Moderator: Jennifer Martin, St. Thomas University
- Shawn Bayern, Florida State University, The Failure of Law and Economics
- Sidney DeLong, Seattle University, Jephthah’s Daughter and Morally -Efficient Breach
- Orit Gan, Sapir College, Peres Academic Center, The Many Faces of Contractual Consent
- Val D. Ricks, South Texas College of Law, Contract Doctrine as Contract Theory
- Remedies: Beyond Expectation Damages
- Moderator: Nancy Kim, California Western School of Law
- Yehuda Adar, Israel Law School, Pre-Contractual Disgorgement
- Moshe Gelbard, Israel Law School, Pre-Contractual Disgorgement
- Caprice Roberts, Savannah Law School, Supreme Disgorgement
- Roger Halson, University of Leeds, UK, Liquidated Damages and “Penalty” Clauses in the UK: A New Approach
10:30 – 10:45 a.m. Break
10:45 a.m. – 12:15 p.m. Concurrent Sessions
- Contract Law and Neoliberalism
- Moderator: Dov Waisman, Southwestern Law School
- Danielle Hart, Southwestern Law School, Contract Law & Ideology
- Creola Johnson, The Ohio State Univesity Moritz College of Law, Contractual Duplicity: Creditors Force Consumers into Arbitration While Exploiting the Criminal Justice System to Arrests Consumers Who Cannot Pay
- Hila Keren, Southwestern Law School, Scalia on Contracts: The Dissemination of Neoliberal Logic
- Matthew Titolo, West Virginia, Neoliberalism’s Fine Print
- E-Commerce
- Moderator: Colin P. Marks, St. Mary’s University School of Law
- Daniel Barnhizer, Michigan State University College of Law, Contracts and Automation: Exploring the Normativity of Codability
- Stacy-Ann Elvy, New York Law School, The Internet of Things (IOT) and Bargaining Disparity
- Max N. Helveston, DePaul University, Regulating the Digital Marketplace
12:15 – 1:30 p.m. Lunch
1:30 – 3 p.m. Concurrent Sessions
- Consumer Financial Protection Bureau (CFPB), Consumer Contracts, and Arbitration
- Moderator: Peter Linzer, University of Houston
- Richard Frankel, Drexel University
- Ramona Lampley, St. Mary’s University School of Law
- Jean Sternlight, University of Nevada, Las Vegas
- International Perspectives on Contract Law
- Moderator: Val D. Ricks, South Texas College of Law
- Mateja Durovic, City University of Hong Kong, EU Consumer Contract Law – Does it Really Protect Consumers?
- Dr. Shivprasad Swaminathan, Global Law School, Delhi, India, Consideration and Induced Reliance
- Qi Gao, Beihang University School of Law, Consumer Protection under Chinese Contract Law
3 p.m. – 3:15 p.m. Break
3:15 p.m. – 4:45 p.m. Concurrent Sessions
- International on Contract Law
- Moderator: Mark Burge, Texas A&M University
- Pablo Lerner, Israel Law School, Constructive Trusts in Israeli Land Contracts – Contract as Key
- Dr. Lachmi Singh-Rodrigues, University of West of England, Avoidance of the Contract and the Seller’s Right to Cure Under the CISG
- Yashveer Singh Yadav, Hidayatullah National Law University, India (LL.B. Honors, 2016), International Trade: Contract Necessities Including Incoterms
- Public Policy Considerations in Contract Law
- Moderator: David A. Grenardo, St. Mary’s Univ. School of Law
- Wayne Barnes, Texas A&M University, Arrested Development: Rethinking the Age of Majority in the 21st Century
- Myanna Dellinger, University of South Dakota, Contracts to Kill Endangered Species: Public Policy Arguments
- Joan MacLeod Heminway, The University of Tennessee College of Law, The LLC Operating Agreement and its Relation to Contract
5 p.m. – 7 p.m. Closing Reception
January 31, 2016 in Conferences | Permalink | Comments (0)
On Artificial Intelligence and Contract Law
Ian Kerr of the University of Ottawa's Centre for Law, Technology and society has an interesting post from last September on a topic of that has been of occasional discussion on this blog, and which I came across only recently. In "The Arrival of Artificial Intelligence and 'The Death of Contract,'" Kerr outlines some of the foreseeable challenges facing today's students of contract law due to disruptive technology:
On the market today are a number of AI products that carry out contract review and analysis. Kira, an AI system used to review and analyze more than US$100 billion worth of corporate transactions (millions of pages), is said to reduce contract review times by up to 60%. Likewise, a Canadian product called Beagle (“We sniff out the fine print so you don’t have to”) is faster than any human, reading at .05 seconds per page. It reads your contract in seconds and understands who the parties are, their responsibilities, their liabilities, how to get out of it and more. These are amazing products that improve accuracy and eliminate a lot of the “grunt work” in commercial transactions.
But hey—my Contracts students are no dummies. They can do the math. Crunch the numbers and you have a lot of articling students and legal associates otherwise paid to carry out due diligence who now have their hands in their pockets and are looking for stuff to do in order to meet their daily billables. What will they do instead?
In some ways, such concerns are just teardrops in an ocean full of so-called smart contracts that are barely visible in the murky depths of tomorrow. Their DRM-driven protocols are likely to facilitate, verify, and enforce the negotiation and performance of contracts. In some cases, smart contracts will obviate the need for legal drafting altogether—because you don’t actually need legal documents to enforce these kinds of contracts. They are self-executing; computer code ensures their enforcement.
Kerr's concludes that smart contracts and their technological relatives are no more the death of contract than what Grant Gilmore pronounced, but that the change is worrisome, including to our relational understanding of contract doctrine and its practice:
I suspect we will face some significant changes and I am not sure that it’s all good. Self-executing contracts, like the DRM-systems upon which they are built, are specifically designed to promote the wholesale replacement of relational aspects of contract such as trust, promise, consent and enforcement. As such, they do injury to traditional contract theory and practice. While I have no doubt that an AI-infused legal landscape can to some extent accommodate these losses by creating functional equivalents where historical concepts no longer make sense (just as e-commerce has been quite successful in finding functional equivalents for the hand-written signature, etc.), I do worry that some innovations in AI-contracting could well have a negative effect on human contracting behavior and relationships.
The entire post is worth a read for anyone interested in the impact of technology on contracts.
January 31, 2016 in Commentary, Contract Profs, E-commerce, Web/Tech | Permalink | Comments (0)
Mobile Carriers Give up Two-year Contracts
Mobile carriers seem to have grown tired of, effectively, being in the loan business funding people’s new phones. American consumers were used to this model, which was a way for phone companies to hide the large price of a new phone into a monthly bill.
More recently, consumers want to change their phones more often than every two plus years, so many prefer paying up front for their phones to be able to change plans whenever they want to instead of having to wait out a long-term contract (or risk sanctions if breaching it).
All the major carriers – T-Mobile, Verizon, Spring and now AT&T – have now shifted away from two-year contracts. The question now is whether consumers will truly choose to pay for their phones in full at the point of purchase or, as has been mentioned, opt for installment plans that lets them upgrade more often than before remains to be seen. Given the price of phones, but also the seemingly insatiable need by many for new technology, installment contracts may be the likely end result. If so, it will be interesting to see how carriers will avoid tying people into long-term contracts, which has proved to be undesirable, but at the same time trying to do, at bottom, some of that via “installment contracts.”
January 31, 2016 in Current Affairs, E-commerce, In the News, Web/Tech | Permalink
Friday, January 29, 2016
Confusing Contracts Language as Litigation Strategy?
The class action lawsuit against Uber for allegedly misclassifying its drivers as “independent contractors” instead of regular “employees” is growing in scope and importance. (O’Connor v. Uber Technologies Inc., 13-cv-03826, Northern District of California). It now covers more than 100,000 drivers. If Uber loses, the case could mean the end of the so far highly lucrative business ride share model that is currently valued at a whopping $60 b worldwide. http://www.bloomberg.com/news/articles/2015-12-18/uber-faulted-by-judge-for-confusing-drivers-with-new-contract
A recent contractual twist developed as follows: Judge Chen had previously found certain contractual language between Uber and its drivers to be unconscionable and unenforceable. Uber claims it tried to fix those issues in a new set of contracts prohibiting its drivers from “participating in or recovering relief under any current or future class action lawsuits against the company.” (Link behind a sign-in request). The drivers were, instead, required to resolve potential conflicts via arbitration. The new contract did, however, purport to give drivers 30 days to opt out of the arbitration provision.
Judge Edward Chen stated about this contractual language that “it is likely, frankly, to engender confusion.” The potential for confusion stems from the fact that numerous drivers have, obviously, already joined the class action lawsuit just as many still may want to do so. Hundreds of drivers are said to have called the plaintiffs’ lawyer, Shannon Liss-Riordan, to find out whether they have to opt out of the new contract to join the lawsuit. Ms. Liss-Riordan called the updated contract an attempt to “trick her clients into relinquishing their rights to participate in the class action.”
Uber, however, claimed that it was just trying to fix previous problematic contractual language and that it would “not apply the new arbitration provisions to any drivers covered by the class action.” The contractual language, though, does not say so.
Whether this is an example of deliberate strong-arming or intimidating the drivers into not joining the lawsuit or simply unusually poor contract drafting may never be known. Judge Chen did, however, order Uber to stop communicating with drivers covered by the class action suit and barred the company from imposing the new contract on those drivers.
The saga continues with trial set for June 30.
Meanwhile, Lyft settled a very similar lawsuit by its drivers in the amount of $12 million. Under that settlement, Lyft will still be able to classify its drivers “independent contractors.”
January 29, 2016 in E-commerce, Famous Cases, In the News, Labor Contracts, Web/Tech | Permalink | Comments (0)
Thursday, January 28, 2016
Weekly Top Ten SSRN Contracts Downloads (January 28, 2016)
SSRN Top Downloads For
Contracts & Commercial Law eJournal
SSRN Top Downloads For
LSN: Contracts (Topic)
January 28, 2016 in Recent Scholarship | Permalink
Wednesday, January 27, 2016
Uniform Commercial Code Adoptions: Here's the Current Scorecard
Perhaps the greatest and most unintended misnomer in the field of commercial law is that the Uniform Commercial Code is called the Uniform Commercial Code. A more accurate name might have been the As-Uniform-as-Possible-Given-that-States-Are-Going-to-Do-Their-Thing Commercial Code. (That name admittedly doesn't roll off the tongue nearly as well as "UCC."). The picture is further complicated by the fact that the official code has itself been amended many times over the last several decades.
For those of us who are interested in the status of UCC adoptions, however, our friends at the Uniform Law Commission (or NCCUSL, if you prefer the old-school name) have produced a handy one-stop scorecard showing which jurisdictions have adopted which revisions of the UCC. The scorecard is dated December 1, 2015, but I'm told on good authority by my colleague and ULC guru Bill Henning that it remains current today. Use the knowledge below to amaze and impress your commercial law friends around the water cooler--or else to drive your non-commercial law friends away from the water cooler.
On a technical note, you might need a wide screen (i.e., not a smartphone) to view the table in its proper format.
UCC SCORECARD
50+ State Survey of Adoptions of Revised Official Text of the UCC
STATES |
UCC |
UCC11 (2001) |
UCC2A (1990) |
UCC3/4 (1990) |
UCC3/4 (2002) |
UCC4A (1989) |
UCC5 (1995) |
UCC6 (1989) |
UCC7 (2003) |
UCC8 (1994) |
UCC9 (1998) |
UCC9 (2010) |
Alabama |
1965 |
20042 |
1992 |
1995 |
19923 |
1997 |
1996 |
2004 |
1996 |
2001 |
2014 A |
|
Alaska |
1962 |
2009 |
1993 |
1993 |
19933 |
1999 |
1993 |
2009 |
1996 |
2000 |
2013 B |
|
Arizona |
1967 |
20062 |
1992 |
1993 |
19913 |
1996 |
2004 |
2006 |
1995 |
1999 |
2014 A |
|
Arkansas |
1961 |
2005 |
1993 |
1991 |
2005 |
19913 |
1997 |
1991 |
2007 |
1995 |
2001 |
2013 A |
California |
1963 |
2006 |
1991 |
1992 |
19903 |
1996 |
Rev 90 |
2006 |
1996 |
1999 |
2013C |
|
Colorado |
1965 |
2006 |
1991 |
1994 |
19903 |
1996 |
1991 |
2006 |
1996 |
2001 |
2012 B |
|
Connecticut |
1959 |
2005 |
2002 |
1991 |
1990 |
1996 |
1993 |
2004 |
1997 |
2001 |
2011 B |
|
Delaware |
1966 |
2004 |
1992 |
1995 |
1992 |
1998 |
1996 |
2004 |
1997 |
2000 |
2013 B |
|
DC |
1964 |
2013 |
1992 |
1994 |
2013 |
19923 |
1997 |
2015 |
2013 |
1997 |
2000 |
2013 A |
Florida |
1965 |
2007 |
1990 |
1992 |
1991 |
1999 |
1993 |
2010 |
1998 |
2001 |
2012 A |
|
Georgia |
1962 |
2015 |
1993 |
1996 |
19923 |
2002 |
2015 |
2010 |
1998 |
2001 |
2013 A |
|
Hawaii |
1965 |
20042 |
1991 |
1991 |
19913 |
1996 |
1998 |
2004 |
1997 |
2000 |
2012 A |
|
Idaho |
1967 |
20042 |
1993 |
1993 |
19913 |
1996 |
1993 |
2004 |
1995 |
2001 |
2012 A |
|
Illinois |
1961 |
20082 |
1991 |
1991 |
19903 |
1996 |
1991 |
2008 |
1995 |
2000 |
2012 A |
|
Indiana |
1963 |
20072 |
1991 |
1993 |
2009 |
19913 |
1996 |
2007 |
2007 |
1995 |
2000 |
2011 A |
Iowa |
1965 |
2007 |
1994 |
1994 |
19923 |
1996 |
1994 |
2007 |
1997 |
2000 |
2012 A |
|
Kansas |
1965 |
2007 |
1991 |
1991 |
1990 |
1996 |
1992 |
2007 |
1996 |
2000 |
2012 A |
|
Kentucky |
1958 |
2006 |
1990 |
1996 |
2006 |
19923 |
2000 |
1992 |
2012 |
1996 |
2000 |
2012 A |
Louisiana |
1974 |
2006 |
1992 |
19903 |
1999 |
1991 |
2009 |
1995 |
2001 |
2012 A |
||
Maine |
1963 |
2009 |
1992 |
1993 |
19923 |
1997 |
1992 |
2009 |
1997 |
2000 |
2013 A |
|
Maryland |
1963 |
20122 |
1994 |
1996 |
19913 |
1997 |
2004 |
1996 |
1999 |
2012 A |
||
Mass. |
1957 |
2013 |
1996 |
1998 |
19913 |
1997 |
1996 |
2013 |
1996 |
2001 |
2013 A |
|
Michigan |
1962 |
20122 |
1992 |
1993 |
2014 |
19923 |
1998 |
1998 |
2012 |
1998 |
2000 |
2012 A |
Minnesota |
1965 |
2004 |
1991 |
1992 |
2003 |
19903 |
1997 |
1991 |
2004 |
1995 |
2000 |
2011 A |
Mississippi |
1966 |
2010 |
1994 |
1992 |
2010 |
19913 |
1996 |
1994 |
2006 |
1996 |
2001 |
2013 A |
Missouri |
1963 |
1992 |
1992 |
19923 |
1997 |
2004 |
1997 |
2001 |
2013 A |
|||
Montana |
1963 |
2005 |
1991 |
1991 |
19913 |
1997 |
1991 |
2005 |
1997 |
1999 |
2013 A |
|
Nebraska |
1963 |
20052 |
1991 |
1991 |
19913 |
1996 |
1991 |
2005 |
1995 |
1999 |
2011 A |
|
STATES |
UCC |
UCC1 (2001) |
UCC2A (1990) |
UCC3/4 (1990) |
UCC3/4 (2002) |
UCC4A (1989) |
UCC5 (1995) |
UCC6 (1989) |
UCC7 (2003) |
UCC8 (1994) |
UCC9 (1998) |
UCC9 (2010) |
Nevada |
1965 |
2005 |
1991 |
1993 |
2005 |
19913 |
1997 |
1991 |
2005 |
1997 |
1999 |
2011 A |
NH |
1959 |
2006 |
1993 |
1993 |
19933 |
1998 |
1993 |
2006 |
1998 |
2001 |
2012 B |
|
NJ |
1961 |
2013 |
1994 |
1995 |
19943 |
1997 |
1994 |
2013 |
1997 |
2001 |
2013 A |
|
NM |
1961 |
2005 |
1992 |
1992 |
2009 |
19923 |
1997 |
1992 |
2005 |
1996 |
2001 |
2013 A |
New York |
1962 |
2015 |
1994 |
19903 |
2000 |
2001 |
2015 |
1997 |
2001 |
2015 A |
||
NC |
1965 |
2006 |
1993 |
1995 |
19933 |
1999 |
2004 |
2006 |
1997 |
2001 |
2012 A |
|
ND |
1965 |
2007 |
1991 |
1991 |
19913 |
1997 |
1993 |
2005 |
1997 |
2001 |
2011 A |
|
Ohio |
1961 |
2011 |
1992 |
1994 |
19913 |
1997 |
1996 |
2011 |
1997 |
2001 |
2012 A |
|
Oklahoma |
1961 |
2005 |
1991 |
1991 |
2009 |
1990 |
1996 |
1997 |
2005 |
1995 |
2000 |
2015 A |
Oregon |
1961 |
2009 |
1989 |
1993 |
19913 |
1997 |
1991 |
2009 |
1995 |
2001 |
2012 B |
|
Penn. |
1953 |
2008 |
1992 |
1992 |
1992 3 |
2001 |
1992 |
2008 |
1996 |
2001 |
2013 A |
|
PR |
2012 |
2012 A |
||||||||||
RI |
1961 |
20072 |
1991 |
2000 |
19913 |
2000 |
2001 |
2006 |
2000 |
2000 |
2011 A |
|
SC |
1966 |
2014 |
2001 |
2008 |
2008 |
19963 |
2001 |
2001 |
2014 |
2001 |
2000 |
2013 A |
SD |
1966 |
2008 |
1989 |
1994 |
19913 |
1998 |
1993 |
2009 |
1998 |
2000 |
2012 A |
|
Tenn. |
1963 |
2008 |
1993 |
1997 |
19913 |
1998 |
1998 |
2008 |
1997 |
2000 |
2012 A |
|
Texas |
1965 |
2003 |
1993 |
1995 |
2005 |
19933 |
1999 |
1993 |
2005 |
1995 |
1999 |
2011 A |
USVI |
1967 |
2002 |
2001 |
2000 |
2001 |
2000 |
2002 |
2002 |
2002 |
|||
Utah |
1965 |
20072 |
1993 |
1993 |
1990 |
1997 |
1996 |
2006 |
1996 |
2000 |
2013 A |
|
Vermont |
1966 |
2007 |
1994 |
1994 |
19943 |
1999 |
1994 |
2015 |
1996 |
2000 |
2014 A |
|
Virginia |
1964 |
20032 |
1991 |
1992 |
19903 |
1997 |
2011 |
2004 |
1996 |
2000 |
2012 A |
|
Wash. |
1965 |
2012 |
1993 |
1993 |
19913 |
1997 |
1993 |
2012 |
1995 |
2000 |
2011 A |
|
WV |
1963 |
2006 |
1996 |
1993 |
19903 |
1996 |
1992 |
2006 |
1995 |
2000 |
2012 A |
|
Wisconsin |
1963 |
2010 |
1992 |
1996 |
19923 |
2005 |
2009 |
2010 |
1998 |
2001 |
2012 A |
|
Wyoming |
1961 |
2015 |
1991 |
1991 |
1991 |
1997 |
1991 |
2015 |
1996 |
2001 |
2013B |
|
TOTAL |
53 |
51 |
51 |
52 |
12 |
53 |
52 |
52 |
50 |
53 |
53 |
52 |
(Last updated 12-1-15)
1 Choice of Law Provision: All enacting jurisdictions except the U.S. Virgin Islands have enacted the choice-of-law provision (Section 1-301) in the 2008 Official Text. The USVI enactment includes the 2001 text of that section.
2 Definition of “good faith”: retains the good faith standard found in pre-revised UCC1.
3 Adopted the 2012 Amendment to UCC Article 4A.
A Adopted Alternative A of 9-503.
B Adopted Alternative B of 9-503.
C Adopted non-uniform safe harbor in 9-503.
January 27, 2016 in Current Affairs, Legislation | Permalink | Comments (0)
Binding Arbitration Clauses, Educational Training Materials Edition
No, it's not legal-education-related, but rather real-estate-education-related. Which, according to the plaintiff, didn't actually teach her what it promised to teach her. So she sued. The defendant, however, noted that she'd signed a contract with an arbitration clause and so they shouldn't be in court. And the court agreed, in Kane v. Yancy, CIVIL ACTION NO. H-15-1861 (behind paywall), a recent case out of the Southern District of Texas.
Arbitration clauses are, of course, generally looked upon favorably by courts. In this case, there was no dispute that the contract contained an arbitration clause and that the plaintiff signed the contract. Rather, the plaintiff argued that the arbitration clause was unconscionable. The plaintiff claimed the arbitration clause was on the back of the piece of paper that she signed and she never saw it. She further claimed that the arbitration clause required each party to bear their own costs and attorneys' fees, which made the cost of arbitration unconscionably prohibitive for her.
All of the plaintiff's arguments failed. Texas precedent indicated that the question of whether the costs and attorneys' fees portion of the arbitration clause was enforceable was a question for the arbitrator to decide, not the court. At any rate, the court didn't feel that the fees were so exorbitant as to cause concern.
In addition, the court didn't really care about her allegation that she had never seen the arbitration clause because the plaintiff's signature was under a statement indicating that she had read everything on the back of the piece of paper she signed. As we all know, on virtually a daily basis we attest that we've read terms and conditions that we have maybe only barely glanced at, if that. Clearly, that's what the plaintiff in this case did, too. This court didn't care from a legal unconscionability standpoint.
The plaintiff made a couple of other interesting arguments. She tried to argue that, by answering her complaint in court, the defendant had waived its right to arbitration. The court, unsurprisingly, didn't buy it. She also tried to argue that the defendant's breach of the contract excused her from being bound by the arbitration clause. The court, however, noted that the defendant's alleged breach of the contract had nothing to do with the arbitration clause itself, and thus that clause was not excused by the defendant's alleged conduct.
The defendant actually moved for sanctions but the court said that the plaintiff's actions weren't frivolous or intended to harass. So the plaintiff may have lost everything else, but at least she didn't get sanctioned. Hashtag-finding-a-silver-lining.
January 27, 2016 in Recent Cases, Teaching, True Contracts | Permalink | Comments (0)
Monday, January 25, 2016
Is a Dollar Movie in This Day and Age Still Feasible?
The average price for a movie ticket in the United States is apparently $8.61. A recent case out of Ohio, Capital City Community Urban Development v. Columbus City, Case No. 13CVH-01-833 (behind a paywall), dealt with the question of whether a dollar movie is still feasible when most movies cost more than $8.00.
The contractual provision at issue was: "The Buyer agrees to provide Saturday movies for children once the theater is operational, and for as long as feasible. The cost is to be $1.00 or less for a double feature." (So, in fact, it was fifty cents a movie.) The clause actually wasn't that old (from what I could discern from the facts, it seems to have only been written in 2002), so it wasn't as if the dollar price was intended to be profitable, which both parties acknowledged. However, the issue was that the defendant had sought donations to offset the cost of the features and been unsuccessful. That meant that the theater would suffer a loss of $100,000 a year to fulfill the contractual provision, which would have been a substantial hardship to the theater. Moreover, the double feature wasn't very popular in the community. In a theater with a capacity of 400, it usually only attracted a few dozen patrons.
The parties fought over whether the definition of feasibility included a consideration of the economics of the issue. There was some precedent that feasibility required looking at the finances of the situation. Also, compellingly in the court's view, feasibility had to take into account the finances or else it had no meaning. The argument that "feasible" meant "capable of being done" without looking to the finances meant that it would be "feasible" basically as long as the theater was open, i.e., as long as the theater had a projection. That would mean that it would be "feasible" until the theater closed down entirely. If that was the meaning of the word "feasible," there was really no reason to have that specification in the contract: it would have just been a clause in effect until the theater closed.
This all makes sense to me, especially considering that there didn't seem to be much public interest in having the double feature continue. However, what's really striking to me about this opinion is the statement that "Columbus never showed a Saturday children's movie." So apparently Columbus's argument was really that it was never feasible to have the double feature. This meant Columbus agreed to a provision in the contract that it apparently never intended to comply with? That's not a wrinkle that gets introduced in this case--in fact, the line that no double feature had ever been shown is basically a throwaway line--but I found it to be the most striking detail.
January 25, 2016 in Commentary, Film, Recent Cases, True Contracts | Permalink | Comments (0)
Saturday, January 23, 2016
Futures Contracts for College Education
Since college and traditional student loans can be so expensive, why not create, in effect, “futures contracts” for post-college incomes?
This relatively new and unknown funding idea is being tested by Purdue University in cooperation with financial services company Verno Education. The loans are called “Income-share Agreements” or “ISAs.” Investors lend money to students in return for a certain percentage of the student’s future income for a set number of years. A few companies and NGOs in the United States are offering contracts on a limited, pilot basis, although the idea itself is not new: Economist Milton Friedman introduced the idea in the 1950s.
Purdue President Mitch Daniels has touted the idea, claiming that the loans “shift the risk of career shortcomings from student to investor: if the graduate earns less than expected, it is the investors who are disappointed; if the student decides to go off … to Nepal instead of working, the loss is entirely on the funding providers….” Voila, truly “debt-free-college” according to Daniels.
Not so fast. First, most college students of course end up finding a job. They will thus have to repay something. That something could easily be very expensive. For example, if a student borrowed $10,000 via a contract to repay 5% of her income for five years after graduation and ends up getting a $60,000 job, she or he will have to pay back $15,000 without compounded interest.
Student protections are currently poor. For example, there is no clarity as to whether the Fair Credit Reporting Act would apply. Further regulations of this area are necessary. Meanwhile, students will have to individually bargain these types of contracts very carefully.
January 23, 2016 in Current Affairs, Labor Contracts, Law Schools, Teaching, True Contracts | Permalink | Comments (0)
Thursday, January 21, 2016
Fired for Posting Critical Comments about Employer on Facebook
On Thursday, the U.S. Circuit Court of Appeals for the D.C. Circuit heard arguments about whether a clothing company illegally fired three retail store employees for their Facebook posts criticizing the employer. The case involves the as-of-yet little developed area of how labor law applies to social media usage as well as other complex issues of contracts and employment law. The case is Design Technology Group v. NLRB, Case Number 20-CA-035511. The case also demonstrates the issue of poor workplace conditions and how little employees can do under contracts law or other bodies of law against this, which I have blogged about before (most recently here). I am not an employment law expert. I simply find this case very interesting from the point of view of how social media law is developing in relation to what is, after all, also an employment contract.
In the case, three employees repeatedly brought various safety concerns to the attention of the store manager. Among other things, the employees felt that the area of San Francisco where the store was located was relatively unsafe at certain times of the evening and that, perhaps, store hours could thus be changed to alleviate this problem. Homeless people would also gather in numbers outside the store to watch a burlesque video that the store played on a big TV screen right inside a window, thus potentially also attracting various (other) unsavory characters.
Allegedly, the store manager did not respond to these safety concerns and treated the employees in an immature and unprofessional way. The three employees discussed the events not at the water cooler, which is so yesteryear, but on Facebook. These posts included messages such as
- “It’s pretty obvious that my manager is as immature as a person can be and she proved that this evening even more so. I’m am unbelieveably [sic] stressed out and I can’t believe NO ONE is doing anything about it! The way she treats us in NOT okay but no one cares because everytime [sic] we try to solve conflicts NOTHING GETS DONE!!... “
- “800 miles away yet she’s still continues to make our lives miserable. phenomenal!”
- “hey dudes it’s totally cool, tomorrow I’m bringing a California Worker’s Rights book to work. My mom works for a law firm that specializes in labor laws and BOY will you be surprised by all the crap that’s going on that’s in violation 8) see you tomorrow!”
One of the employees did bring the California worker’s rights book—which covered issues such as benefits, discrimination, the right to organize, safety, health, and sanitation—to work and put it in the break room where other employees looked through it, noticing that they were entitled to water and sufficient heat.
This same employee also (naïvely) sent resumes from the company computer in spite of company rules allowing only sporadic computer access (the store manager had allegedly set a bad example by using the store computer for personal purposes herself). The company discovered this as well as the Facebook posts, and fired the three employees.
The company argues that the workers commented on Facebook only in order to create a pretext for filing a claim with the NLRB. The smoking gun, according to the company, is the following exchange of (select, but most salient) Facebook postings:
- “OMG the most AMAZING thing just happened!!!! J”
- “What … did they fire that one mean bitch for you?”
- “Nooooo they fired me and my assistant manager because “it just wasn’t working out” we both laughed and said see yaaah and hugged each other while giggling ….Muhahahahaha!!! “So they’ve fallen into my crutches [sic].”
The use of the expression “Muhahaha” is, according to the company, the smoking gun indicating the employee’s desire to get fired. It does indeed seem to indicate _some_ reveling in the turn of events, but arguably not a desire to be fired. The “top definition” of the phrase on the user-created online “Urban Dictionary” is, today, “supost [sic] to be an evil laugh when being typed in a game.” Case briefs list it as “An evil laugh. A laugh one does when they are about to do something evil. Such as when a villain has a plot to take over the world, he does this laugh right before it goes into effect. Also a noise made by people who have just gotten away with an evil deed or crime….” The “evil laughter” entry on Wikipedia describes the phrase Muhahaha as being “commonly used on internet Blogs, Bulletin board systems, and games. There, [it is] generally used when some form of victory is attained, or to indicate superiority over someone else.”
The company appeals a ruling from the National Labor Relations Board (“NRLB”) finding the terminations unlawful because the employees’ discussions of working conditions were protected concerted activities under the National Labor Relations Act. The company claims that the comments were not legally protected because they were part of a scheme to manufacture an unfair labor practice claim.
It will be interesting to see how the Court of Appeals will address the social media aspect of this case. One the one hand, it does seem exceptionally naïve to expect to be able post anything in writing on the internet – Facebook, no less – without it potentially being seen by one’s current or future employer. I’m sorry, but in 2016, that should not come as a surprise to anyone (note that the company also used email monitoring software to discover whether its employees applied for jobs with competitors, which at least one of the employees here did). Note to employees who may not have a home computer or internet access: use a library computer.
On the other hand: does it really matter what employees post to their “friends” about their jobs, absent torts or other clear violations of the law (not alleged here)? Isn’t that to be expected today just as employees previously and still also talk in person about their jobs? Isn’t the only difference in this case that the posts are in writing and thus traceable whereas “old-fashioned” gossip was not? If employees merely state the truths, as seem to have been the case in this instance perhaps apart from the last “Muhahaha” comment, isn’t it overreaching by the employer to actually _fire_ the employees if they, of course, otherwise provided good services? Even if the employees are exaggerating, boasting, or outright lying, should employers be able to fire employees merely because of private comments on Facebook posted to one’s online “friends”?
An alternative idea might be to consider whether the employees were actually on to something that (gasp!) could help improve a poor work situation for the better.
The National Federation of Independent Business’ Small Business Legal enter has filed an amicus brief in support of the company, alleging that the NLRB decision “allow[s] employees regardless of their motive or actual misconduct to become termination-proof simply by making comments relating to their employment online.”
That’s hardly what the employees are arguing here. They do, however, argue a right to discuss their employment situation online without a snooping employer terminating them just for doing so. In this case, the employees had, noticeably, tried to improve highly important workplace issues in a fruitful way. The situation did, however, escalate. In and of itself, however, the “fallen into my clutches” comment, although of admittedly debatable intent, does not seem to indicate that the employees were attempting to manufacture an unfair labor practice claim. The employees seemed to have been primarily concerned with safety issues and working conditions, but were fired in retaliation for their critical online arguments. That, to me, seems like a fair argument.
Stay tuned for the outcome of this case!
January 21, 2016 in Commentary, E-commerce, Famous Cases, Labor Contracts, Science, Web/Tech | Permalink | Comments (1)
Weekly Top Ten SSRN Contracts Downloads (January 21, 2016)
Puffery object lesson: The author of the number 9 article on the Contracts & Commercial Law eJournal list tells me on good authority that Apple Pay, Bitcoin, and Consumers: The ABCs of Future Public Payments Law is worth at least twice--possibly even THREE times--the price of the download! How can you resist downloading such a clearly unprecedented value?
Hmmm... that was pretty bad. Maybe we should just get to this week's actual lists.
SSRN Top Downloads For
Contracts & Commercial Law eJournal
SSRN Top Downloads For
LSN: Contracts (Topic)
January 21, 2016 in Recent Scholarship | Permalink
Wednesday, January 20, 2016
The Enforceability of Liability Releases for Negligence in Colorado
When I was in law school, I remember starting to be really struck by how often I had to sign liability releases: going to play paintball, renting skis, etc. A recent case out of the Tenth Circuit, Espinoza v. Arkansas Valley Adventures, had to deal with just such a release in the context of a tragic whitewater rafting accident.
The plaintiff's mother drowned when her raft capsized during a rafting trip organized by the defendant. She had signed a contract that released the defendant from liability for negligence. The plaintiff agreed that his mother had signed the release but tried to argue that the release was unenforceable. As a matter of Colorado law, though, he lost. The court found the release enforceable both as a matter of public policy and under the particular circumstances of the mother's signing.
The court explained that Colorado uses four facts to determine whether a release of liability for negligence is enforceable:
(1) the existence [or nonexistence] of a duty to the public; (2) the nature of the service performed; (3) whether the contract was fairly entered into; and (4) whether the intention of the parties is expressed in clear and unambiguous language.
The court concluded that, while other states were free to disagree on this, Colorado had decided that corporations providing recreational activities are allowed to protect themselves from liability for negligence. The court stated that this is a valid policy choice for Colorado to make because it arguably encourages the active, outdoorsy lifestyle that the state of Colorado cherishes and wants to protect and promote. Without such ability to protect themselves, companies might be discouraged from offering recreational activities like horseback riding, snowboarding, or whitewater rafting. And in fact other courts in Colorado had explicitly found that companies offering whitewater rafting trips can protect themselves from liability for negligence using a contractual release. The court stated that the Colorado legislature was free to introduce a statute that would change this legal precedent, but, as it stood, the court was bound to follow the precedent.
Having decided that the release was not against public policy according to the first two factors of the balancing test, the court then further decided that the plaintiff's mother had fairly entered into the contract with full knowledge of the risks at stake. The court dismissed the plaintiff's expert testimony that the rapids his mother was exposed to were too advanced for a beginner (in contrast to what the defendant had assured her) by pointing to the fact that the defendant had expert testimony that the rapids were suitable for beginners. Finally, the court noted that the release had the typical all-caps language that you see on these sorts of contracts. You know: "HAZARDOUS AND INVOLVES THE RISK OF PHYSICAL INJURY AND/OR DEATH" and "THIS IS A RELEASE OF LIABILITY & WAIVER OF LEGAL RIGHTS." The truth is, seldom does any consumer seeing that stuff really take it a serious communication of a great risk of death, I think. Especially not when there was some evidence that the consumer has been assured the trip in question was suitable for families with children. Nonetheless, the court found that the language of the release unambiguously informed the plaintiff's mother of the risks of the activity and the fact that she was releasing the defendant from liability should those risks come to pass.
There was a dissent in this case, however, who agreed that the release wasn't against public policy but disagreed on the conclusion that the contract had been fairly entered into. In the dissent's view, the contradictory testimony about the level of difficulty of the rapids meant that the question should have gone to the jury.
I don't spend a lot of time in my Contracts class talking in detail about liability releases for negligence, but this case made me think that I should talk about them more, because they really do seem to arise in the context of so many activities.
January 20, 2016 in Commentary, Recent Cases, Sports, Teaching, Travel, True Contracts | Permalink | Comments (4)
Tuesday, January 19, 2016
Contracts Professors: Prepare to Meet Robolawyer
Do law students intending to practice in the areas of contracts and commercial law particularly need to consider the risk of being replaced by artificial intelligence? It wouldn't hurt.
At this month's AALS annual meeting, Harvard Law School Dean Martha Minnow made some headlines with her comments that the threat to the jobs of human lawyers from artificial intelligence is overhyped:
Minow said she didn’t see computers having a role in matters that require subjective legal judgment. “Assessment and critique of justice and justice mechanisms, I don’t see AI taking that on. Nor do I see AI taking on ethics,” she said. “I don’t mean to suggest there is no relation between AI and ethical suggestions, but I don’t think you’ll ever get rid of the human being. There will always be a need for human beings.”
Dean Minnow's points of optimism--that matters of justice and ethics will require a human component--seem substantially correct, but they highlight a particular problem in the contract and commercial law fields. Matters of human justice, like the administration of criminal penalties and the protection of civil rights, are a natural bulwark against the replacement of lawyers by computers in those fields. The values at stake are ones that we, as a society, would be (fortunately) fundamentally queasy about taking out of human hands. But what if the stakes are "mere" money, as is frequently the case with contracts? That is the kind of area where increased efficiencies and removal of the human element give less pause.
This sort of automation of transactional work is certainly underway, ranging from the drafting of basic transactional documents through websites like Legal Zoom to the intriguing use of smart contracts that can govern and enforce themselves, such as through application of Bitcoin-style blockchain technology. In short, teachers of Contracts are training students in a field with a high degree of risk of being automated out of existence.
Robolawyer is coming, so how do we prepare our Contracts students to become lawyers whose value-adding proposition is not susceptible to automation? This question has many answers, I suspect, but we won't reach any of them unless we start by recognizing the problem.
January 19, 2016 in Commentary, Current Affairs, Law Schools, Teaching, Web/Tech | Permalink | Comments (2)
Monday, January 18, 2016
What Happens If Your YouTube Channel Suddenly Disappears?
A recent case out of California, Lewis v. YouTube, continues on my terms and conditions theme from earlier.
The plaintiff in this case had a bunch of videos on YouTube. One day, she found that YouTube had deleted them. The videos had had close to 500,000 views at the time YouTube deleted them. The plaintiff claimed that she spent a lot of time and money promoting them but there was no commercial aspect to the videos; she didn't make any money off of them.
Upon realizing YouTube had deleted her videos, she sent YouTube an e-mail asking what had happened and if her videos could be restored. She received in response what appeared to be a form e-mail informing her that she'd violated YouTube's terms and conditions but not giving any truly specific information. The best that I can discern is that YouTube thought she was a spammer.
The plaintiff replied to the e-mail from YouTube saying that she had not engaged in any behavior violating the terms and conditions. She received another response from YouTube identical to the first. She filed a formal appeal with YouTube, and received another identical response.
So that brings us to the lawsuit in question, in which the plaintiff was alleging that YouTube violated the covenant of good faith and fair dealing implicit in its terms and conditions when it deleted her videos unjustifiably and without any notice.
To be honest, I see the plaintiff's point and I'm kind of on her side. It's frustrating when you have no idea what you've done wrong and you can't get a website to explain anything to you and you just feel kind of powerless. The good news is that at some point she did get YouTube's attention enough that it did restore her videos. I don't know if that happened before or after the lawsuit was filed.
It seems, therefore, like the plaintiff got what she wanted, which was restoration of her videos. The lawsuit appears to have really been about trying to get damages, but the court pointed out that YouTube's terms and conditions (which, let's face it, none of us reads) contained a limitation of liability clause that is valid in California, so the plaintiff couldn't seek any damages.
I think this is a situation where the court just thought that plaintiff had what she wanted and was just being greedy. I would be curious to see another case challenging the limitation of liability clause where the plaintiff could prove actual damages that might sway a sympathetic judge. But, for now, YouTube's terms and conditions do act to protect YouTube from having to pay out damages. If you find yourself a victim of YouTube's apparently aggressive anti-spamming patrol, you might just have to settle in for a bit of a fight in getting YouTube's attention, without much hope of compensation for any of that time and effort.
January 18, 2016 in Commentary, Recent Cases, True Contracts, Web/Tech | Permalink | Comments (0)
Friday, January 15, 2016
Very, Very Frequent Flyers Do Not Have Separate Contracts with Airlines
If a customer belongs to an airline’s frequent flyer program, but flies so often that one obtains an elevated status under that program, is the customer then also by implication governed by a separate contract with the airline and not just the “basic” version of the frequent flyer rules?
No, according to a Seventh Circuit Court of Appeals opinion in Hammarquist v. United Continental Holdings, Inc. (Nos. 15-1836 and 15-1845).
In the class action lawsuit against beleaguered United Airlines, plaintiffs were members of the airline’s “MileagePlus” program. Condition no. 1 of the program rules stated that the airline had the “right to change the Program Rules, regulations, benefits, conditions of participation or mileage levels … at any time, with or without notice ….” Plaintiffs, who had obtained “Premier” status argued that under the Premier Program, an alternative modification provision prohibited United from changing the benefits that had already been earned, but which could, per airline tradition and the basic program rules, only be enjoyed the following year. The court made short shrift of that: The plaintiffs did not dispute that the parties’ contractual relationship was governed by the Program Rules that, under precedent established in Lagen v. United Continental Holdings, the elevated status of some frequent flyers does not result in a free-standing contracts separate from the underlying frequent flyer program being established. United Airlines had not made any contractual representations that would render it unable to change the benefits under the basic contract.
Plaintiffs also argued that at the most, United Airlines should only be allowed to change the benefits once a year and not, as had apparently been the case, in the
middle of the year. Plaintiffs relied on the airline’s website, which had stated th at changes were possible “from year to year,” but also that “unless otherwise stated,” the basic Program Rules applied to the Premier Program. That, according to the plaintiffs, meant that the airline could not change the benefits “at any time” as had been stated in the frequent flyer rules. The court found that United Airlines had never “stated” that Condition no. 1 did not also apply to its very frequent flyers, and that the airline had never contractually promised that changes could only be implemented only from year to year.
Nice try, but in this case, a contractually fair enough outcome, it seems. United Airlines “cannot be liable for breaching a contract that it did not make.”
January 15, 2016 in Current Affairs, Miscellaneous, Recent Cases, Travel, True Contracts | Permalink | Comments (1)
Thursday, January 14, 2016
Weekly Top Ten SSRN Contracts Downloads (January 14, 2016)
SSRN Top Downloads For
Contracts & Commercial Law eJournal
RECENT TOP PAPERS for all papers first announced in the last 60 days
15 Nov 2015 through 14 Jan 2016
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RECENT TOP PAPERS for all papers first announced in the last 60 days
15 Nov 2015 through 14 Jan 2016
January 14, 2016 in Recent Scholarship | Permalink
Wednesday, January 13, 2016
The Tricky Question of Whether Minds Met
A recent case out of Ohio, Oryann, Ltd. v. SL & MB, LLC, highlights how complicated it can be to determine whether a contract ever existed in the first place.
This case involved the sale and purchase of a horse farm that was being operated as a horse-boarding business. The parties agreed on a price of $640,000, and in all of their communications back and forth, that price was always stated as being the price for the real estate of the farm. There was no written reference to purchase of the business and its assets until the parties were through with their negotiations and signing the final papers. Those final papers indicated that the buyer was buying real estate for $350,000 and the business for $290,000. The business sale contract referenced "Exhibit A" as listing the assets that were being transferred, but Exhibit A was never completed.
A disagreement arose between the parties, and the trial court found that there was never any meeting of the minds with respect to the sale of the business and it was illusory because it didn't have enough specificity to show that anyone was bound to do anything due to the fact that there was never any enumeration of the assets to be transferred (given the blank Exhibit A). While the trial court enforced the real estate contract in the amount of $350,000, it threw the business sale contract out as unenforceable.
The appellate court, however, disagreed with the trial court's conclusion. To the appellate court, it was obvious from the language of the contracts and the behavior of the parties that there was a meeting of the minds with respect to the sale of the business and that the parties were bound by the contract. The appellate court noted that the two contracts were intended to be read as one entire deal, not two separate deals the way the trial court was reading it. The appellate court thought that if the parties intended to be bound by the real estate contract (as the trial court had found), then it had to follow that they intended to be bound by the business sale contract as well, as the contracts' language expressly referenced each other and the fact that they were one deal. And, as the appellate court noted, the trial court's ruling on the contracts meant that the trial court was ignoring was ignoring the fact that, at all times, the amount of money the parties were discussing was $640,000. It didn't make sense to then pretend that the parties had only intended to pay half of that.
The appellate court was untroubled by the blank Exhibit A. The business sale contract's language explicitly stated that "all" of the business would be transferred; the purchasing party took possession and ran the business for over a year without complaining about a lack of specificity in the contract because of the missing Exhibit A; and the evidence showed that the parties did indeed transfer over their business assets. The appellate court thought it was therefore clear from the parties' behavior that they understood what the business sale contract achieved, even without the Exhibit A.
So, where the trial court had seen questionable conduct, the appellate court found an enforceable contract.
The key to the trial court's ruling might actually be in the parties' testimony as to why they ended up executing two separate contracts: They wished to lessen the amount of real estate tax paid in the transaction. I think the trial court thought that the parties clearly thought the real estate was worth $640,000, didn't want to pay the taxes owed on that, and so pretended the real estate was only worth $350,000 in order to avoid those taxes. In fact, it appears from the parties' testimony that that's exactly what they did. I think the trial court disapproved of that and that its ruling probably reflects its unwillingness to endorse the parties' behavior.
January 13, 2016 in Commentary, Recent Cases, True Contracts | Permalink | Comments (0)
Monday, January 11, 2016
Beware Insurance Policy Exclusions: Liquid Nitrogen Cocktails and Precious Metal Air Conditioning Units Edition
A pair of cases, Evanston Ins. Co. v. Haven South Beach, out of the Southern District of Florida, and Celebration Church v. United National Insurance Co., out of the Eastern District of Louisiana, reminds us that insurance policies can be tricky things.
In Evanston, Barbara Kaufman went to the Ninth Annual Taste of the Garden at the Miami Beach Botanical Garden. Haven South Beach, one of the vendors there, sold her a drink containing liquid nitrogen. Mrs. Kaufman became ill after consuming the drink and sued Haven. Haven, in turn, tried to involve Evanston under its insurance policy. However, the insurance policy contained a clause stating that it didn't apply to situations involving the "dispersal" of "pollutants." So the debate, of course, was over whether the presence of the liquid nitrogen in the drink, added to give the drink a "smoking" appearance, was the introduction of a pollutant that disqualified the insurance policy from applying. The policy described a "pollutant" as, among other things, an "irritant," and the court concluded that the liquid nitrogen was an irritant, as a dangerous and hazardous chemical likely to cause at least some irritation. Therefore, its dispersal into the drink was a circumstance that excluded Mrs. Kaufman's injury from insurance coverage under the policy.
In Celebration Church, the insurance policy in question excluded coverage for theft of precious metals. Celebration Church had a number of rooftop air conditioning units whose condensers were stolen. The condensers each contained coils made of one of the precious metals excluded from the insurance policy. Therefore, the insurance company refused to pay out under the policy. The court found the insurance company was justified in its reading of the contract. Although the theft of the air conditioning units extended to thievery beyond just a "precious metal," the court concluded that the only common sense reading of the clause was that the insurance policy did not apply to any damage caused by a theft of precious metals, and the court further concluded that the theft of the air conditioning condensers was to obtain the precious metal inside, so their entire theft was excluded.
The lesson is clear: Those insurance policy exclusions can really come back to haunt you.
(Also, avoid liquid nitrogen in your cocktails, I think.)
January 11, 2016 in Food and Drink, Recent Cases, Religion, True Contracts | Permalink | Comments (0)
Thursday, January 7, 2016
Weekly Top Ten SSRN Contracts Downloads (January 7, 2016)
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Contracts & Commercial Law eJournal
RECENT TOP PAPERS for all papers first announced in the last 60 days (8 Nov 2015 through 7 Jan 2016 )
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RECENT TOP PAPERS for all papers first announced in the last 60 days (8 Nov 2015 through 7 Jan 2016)
January 7, 2016 in Recent Scholarship | Permalink
Tenured Political Science Professor Fired for Statements about God
Recently, Stacey blogged here about whether tenure is a contract. Yesterday, the news broke that a tenured associate political science professor at Wheaton College, a private Christian university, may soon get to test that theory.
Shortly after the San Bernadino, California, shooting massacre, Professor Larycia Hawkins stated on her Facebook account (which listed her profession and employer) that she “stand[s] in religious solidarity with Muslims because they, like me, a Christian, are people of the book. And as Pope Francis stated last week, we worship the same God." She elaborated that “we are formed of the same primordial clay, descendants of the same cradle of humankind--a cave in Sterkfontein, South Africa that I had the privilege to descend into to plumb the depths of our common humanity in 2014.” She also wore a hijab in “embodied solidarity” with Muslim women.
The response by the College is, for now, the equivalent of “You’re fired.” The College placed Professor Hawkins on administrative leave in December "to explore significant questions regarding the theological implications of her recent public statements, including but not limited to those indicating the relationship of Christianity to Islam." Further, "Wheaton College faculty and staff make a commitment to accept and model our institution's faith foundations with integrity, compassion and theological clarity. As they participate in various causes, it is essential that faculty and staff engage in and speak about public issues in ways that faithfully represent the college's evangelical Statement of Faith." According to Wheaton College President Ryken, however, the College also “support[s] the protection of all Americans including the right to the free exercise of religion, as guaranteed by the Constitution of the United States." Professor Hawkins’ legal team is, according to televised news statements on 1/6, exploring the possibility of a lawsuit should the professor’s preferred solution – mediation and an amicable solution – turn out to be impossible.
This case raises serious questions about the academic freedom of tenured professors – even untenured ones - with which we as law professors are also very familiar. This is perhaps even more so in the cases of private colleges. It seems to me that with a message along the lines of what even Pope Francis uttered along with a reasoned (meta)physical explanation of her views and the College’s self-professed acceptance of freedom of religion, Professor Hawkins did not act in a way that should, under notions of academic freedom, get her fired. If we as law professors do not agree with or wish to challenge certain traditional or even untraditional legal views, are we not allowed to do so because the institutions we work for or the majority of our colleagues hold another view? One would hope so. Most of us can probably agree that academic freedom is exactly all about being able to, within reason at least, provoke deeper thought in relation to what we teach. Note that Dr. Hawkins did not teach religious studies, but political science. With the current embittered debate about Muslims and terrorism around the world, Dr. Hawkins arguably raised some interesting points even if one does not agree with her statements from a Christian point of view.
Stay tuned for more news on this case!
January 7, 2016 in Commentary, Current Affairs, Famous Cases, In the News, Law Schools, Religion, Teaching, True Contracts | Permalink | Comments (0)