ContractsProf Blog

October 12-13 CSLSA 2018 Scholarship Conference at Texas A&M University School of Law

The Registration deadline has been extended until September 20, 2018 for the Central States Law Schools Association 2018 Scholarship Conference. The conference will be held on Friday, October 12 and Saturday, October 13 at the Texas A&M University School of Law in Fort Worth, Texas. We invite law faculty from across the country to submit proposals to present papers or works in progress.

The conference hotel is the Sheraton Fort Worth Downtown Hotel, which is conveniently located immediately next door to the law school. The conference rate is $159 per night and can be accessed by going here to the special CSLSA booking site. The cutoff date for the hotel block is September 20, 2018, so please make your reservations today!

CSLSA is an organization of law schools dedicated to providing a forum for conversation and collaboration among law school academics. The CSLSA Annual Conference is an opportunity for legal scholars, especially more junior scholars, to present working papers or finished articles on any law-related topic in a relaxed and supportive setting where junior and senior scholars from various disciplines are available to comment. More mature scholars have an opportunity to test new ideas in a less formal setting than is generally available for their work. Scholars from member and nonmember schools are invited to attend.

Please click here to register.

For more information about CSLSA and the 2018 Annual Conference please subscribe to the CSLSA blog. We look forward to seeing you in Fort Worth!

New Journal Just for Us!

The Journal of Strategic Contracting and Negotiation (JSCAN) is open for submissions!  JSCAN, a SAGE publication, is "an outlet for research and theory about practices that challenge the status quo in strategic contracting and negotiations, and the commercial implementation of business strategy or policy."  JSCAN is peer-reviewed and welcomes submissions in a wide variety of fields. It may have special appeal to those who write on contract-related topics that have cross-over appeal to those affiliated with business and business schools. (Disclosure:  I am on the editorial board).  You can find more information here.

Court finds HomeAway gives sufficient notice of its terms and conditions online

A recent case out of the Western District of Texas, May v. Expedia, Inc., No. A-16-CV-1211-RP (behind paywall), examines the enforceability of HomeAway.com's online contract. HomeAway is a website that offers vacation rental properties. Property owners can buy one-year subscriptions to HomeAway to list their properties for rent on the website. May was a property owner who had purchased successive annual subscriptions to HomeAway, and who now sues based on several breach of contract and fraud allegations, together with related state claims. HomeAway moved to compel arbitration, pointing to its terms and conditions. Specifically, in July 2016 HomeAway amended its Terms and Conditions to include a mandatory arbitration clause. May allegedly agreed to this clause when he renewed his HomeAway subscription in September 2016, and again when he booked his property through the website in October 2016. 

May argued that he did not agree to the terms and conditions when he renewed his annual subscription because he changed the name on the account to his wife's name in an effort to avoid being bound by the new terms, but the court found that had no effect on the effectiveness of the terms and conditions and that May bound himself when he renewed his subscription, regardless of changing the name on the account. May was trying to take advantage of the benefits of the subscription without binding himself to the terms, and the court found that to be inequitable. 

The court  already found May to be bound but for the sake of completeness also analyzed May's argument that he was not bound when the property was booked because he did not receive sufficient notice of the terms and conditions, which gives us further precedent on how to make an enforceable online contract. The HomeAway site required the clicking of a "continue" button, and wrote above the button that the user was agreeing to the terms and conditions if they clicked the button, with a hyperlink to the terms and conditions. The court found this to be sufficient notice of the terms and conditions. 

Ninth Circuit courts continue to not love arbitration clauses as much as the Supreme Court does

Revitch received an automated advertising call from DirecTV to his cell phone, and sued alleging violations of the Telephone Consumer Protection Act. Revitch was a wireless customer of AT&T, so DirecTV moved to compel arbitration under its sibling corporation's wireless service contract with Revitch. This recent case out of the Northern District of California, Revitch v. DirecTV, LLC, No. 18-cv-01127-JCS, denied the motion, finding that the arbitration clause did not cover claims with DirecTV completely unrelated to the wireless services provided under the AT&T contract. 

It was true that the arbitration provision covered affiliates, and it was also true that DirecTV was an affiliate of AT&T, having become sibling companies a few years after Revitch entered into the contract with AT&T. But the court characterized the establishment of this relationship as a "completely fortuitous fact." The court noted that the intention for wording the clause broadly and including affiliates was typically to cover situations regarding assignments or successors. Nothing of the sort had happened here. No benefits under the contract had been assigned to DirecTV, nor had DirecTV undertaken any obligations under the contract. The calls Revitch was complaining about had nothing at all to do with the wireless service covered by the contract. So the precedent DirecTV tried to rely on was all distinguishable in the view of the court: "The Court concludes that Adams and Andermann, at most, support the conclusion that an entity may become an affiliate subject to the arbitration contract after the time of contracting where that relationship arises from an assignment of the underlying agreement or a related entity becomes a successor to the original contracting entity. That is not the case here."

The court interpreted the arbitration clause of the contract according to ordinary rules of contract interpretation that required the avoidance of absurd results and also that contracts be construed against the drafter. DirecTV argued that the presumption in favor of arbitration established by the Federal Arbitration Act meant that arbitration clauses should trump such rules of contractual interpretation, but the court disagreed. The court stated that, according to Ninth Circuit precedent, the FAA requires arbitration agreements to be placed on equal footing with other contracts. Allowing the suspension of ordinary contract rules of interpretation when arbitration agreements were involved would be placing arbitration agreements on favored footing; on equal footing, the same rules ought to apply to arbitration agreements as apply to all other contracts. Arbitration, the court emphasized, "is a matter of consent." 

This is an interesting case. Due to the consolidation of most of our forms of communication under massive umbrella corporations, a relationship with one subsidiary can be used to assert a relationship with all companies under the same corporate umbrella, as DirecTV tried to do here. This court's view feels rooted in a common-sense understanding that the arbitration agreement Revitch entered into when he decided to sign up for AT&T wireless service shouldn't also cover completely unrelated television services provided by a company that hadn't been affiliated with AT&T when Revitch entered into the contract. Only a few months ago, though, the Supreme Court reversed the Ninth Circuit for refusing to enforce an arbitration clause, re-affirming the trump-card nature of the Federal Arbitration Act over many other public policies. This case seems like another display of Ninth Circuit courts' skeptical views toward arbitration clauses -- which the Supreme Court has just reminded the Ninth Circuit it doesn't share. 

Weekly Top Ten SSRN Contracts & Commercial Law Downloads (August 24, 2018)

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 09 Jun 2018 - 08 Aug 2018

Rank	Paper	Downloads
1.	Online Contracts (2018) Eric Goldman Santa Clara University - School of Law	371
2.	Data Pollution Omri Ben-Shahar University of Chicago Law School	250
3.	The Persistence of 'Dumb' Contracts Jeffrey M. Lipshaw Suffolk University Law School	200
4.	Cash America and the Structure of Bondholder Remedies G. Mitu Gulati and Marcel Kahan Duke University School of Law and New York University School of Law	153
5.	Not-So-Smart Blockchain Contracts and Artificial Responsibility Adam J. Kolber Brooklyn Law School	131
6.	Behavioral Law and Economics - Introduction Eyal Zamir and Doron Teichman Hebrew University of Jerusalem - Faculty of Law and Hebrew University of Jerusalem - Faculty of Law	131
7.	Force Majeure and Excuses in Smart Contracts Eric Tjong Tjin Tai Tilburg Law School	120
8.	New Frontiers in Private Fiduciary Law Paul B. Miller Notre Dame Law School	109
9.	Personalizing Mandatory Rules in Contract Law Omri Ben-Shahar and Ariel Porat University of Chicago Law School and Tel Aviv University	98
10.	Freedom, Choice, and Contracts Hanoch Dagan and Michael Heller Tel Aviv University - Buchmann Faculty of Law and Columbia University - Columbia Law School	95

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 09 Jun 2018 - 08 Aug 2018

Rank	Paper	Downloads
1.	Online Contracts (2018) Eric Goldman Santa Clara University - School of Law	371
2.	Data Pollution Omri Ben-Shahar University of Chicago Law School	250
3.	The Persistence of 'Dumb' Contracts Jeffrey M. Lipshaw Suffolk University Law School	200
4.	Force Majeure and Excuses in Smart Contracts Eric Tjong Tjin Tai Tilburg Law School	120
5.	Personalizing Mandatory Rules in Contract Law Omri Ben-Shahar and Ariel Porat University of Chicago Law School and Tel Aviv University	98
6.	Freedom, Choice, and Contracts Hanoch Dagan and Michael Heller Tel Aviv University - Buchmann Faculty of Law and Columbia University - Columbia Law School	95
7.	The Impact of the French Doctrine of Significant Imbalance on International Business Transactions David Restrepo-Amariles, Eva Mouial Bassilana and Matteo Winkler HEC Paris - Tax & Law, Université Côte d'Azur and HEC Paris	83
8.	Purposive Contractual Interpretation Andrew Robertson The University of Melbourne - Law School	75
9.	Why the Equity of Redemption? D.P. Waddilove Harvard Law School	69
10.	Breach of Contract: A Plea for Clarity and Discipline Neil H. Andrews University of Cambridge - Faculty of Law	66

Another health insurance case where getting proper care pushes you into debt

We have blogged several times before about the confusing and often tragic state of health care and health insurance in this country. Now we have another case out of the Eighth Circuit to add to the tally, Ferrell v. Air EVAC EMS, Inc., No. 17-2554. 

Ferrell went to an emergency room with chest pain. Emergency room staff arranged for an air ambulance operated by AIR EVAC to transport him to another hospital. Ferrell's health insurance only covered a thousand dollars of this helicopter flight, so Ferrell was billed over $29,000. Ferrell then sued on behalf of a class of those similarly situated, alleging that there was no enforceable contract with the air-ambulance provider because he was not informed of the price of the helicopter flight before taking it. The problem, though, is that the federal Airline Deregulation Act (the "ADA") comes into play here, as this is about air travel. The ADA, among other things, prohibits states from regulating the cost of air transportation. 

Ferrell argued that the ADA should not apply to air-ambulance services, which are unique from other forms of air transportation. But the plain language of the ADA is broad enough to include air-ambulance services, so the court refused to exclude them from the preemption. Because Ferrell was bringing a class action, this doomed all of his claims. 

The court did find that Air EVAC could potentially bring a breach of contract claim if Ferrell refuses to pay, and that Ferrell could then assert there was no enforceable contract in defense. In that case, Air EVAC could then possibly rely on equity to recover the value of the services provided, and then the court would be able to determine that value without ADA preemption. 

Which is a pretty complicated analysis and decision. Surely this is not the most efficient way we can think of to handle health care in this country. But I suppose there is something poetic about having to lump in health care with the air transportation industry: They often are both perplexing in their treatment of their customers.  

California warranty case against Google illustrates the work the covenant of good faith and fair dealing does for consumers

A recent case out of the Northern District of California, Weeks v. Google LLC, Case No. 18-cv-00801 NC (behind paywall), involves Google's Pixel phones, which the plaintiffs allege are defective. The phones were covered by a warranty that permitted Google to either repair, refund, or replace the phones, at its discretion. When the plaintiffs complained about the defective phones, Google offered to replace the phones, but the plaintiffs weren't happy with that result: Their allegations are that their defective phones would just be getting replaced with more defective phones, until the point when the warranty expired. 

The court agreed with Google that, under the terms of the warranty, Google had every right to do exactly that: "The Court understands plaintiffs' outrage at Google's being able to replace a defective Pixel with another defective Pixel for 365 days straight. . . . It beggars reason and would appear to make hash of the spirit of the warranty. But the warranty provided a remedy, and as far as the Court can tell, Google abided by its remedy. . . . The question of whether it was valid under the express warranty to replace a defective Pixel with another defective Pixel must be answered in the affirmative based on a plain reading of the Limited Warranty."

However, all was not lost for the plaintiffs, because the court then turned to allegations that Google had breached the covenant of good faith and fair dealing, a claim which the court allowed to survive Google's motion to dismiss.  The court found that, while Google's conduct might not have been in violation of the terms of the contract, its conduct was not "expressly permitted" under the contract, nor did it meet "reasonable expectations" as to what its behavior would be. Therefore, the covenant of good faith and fair dealing acted as a backstop here against the dismissal of the breach of warranty claims. 

(The court also allowed fraudulent concealment and California consumer protection law claims to survive.)

Weekly Top Ten SSRN Contracts & Commercial Law Downloads (August 13, 2018)

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 09 Jun 2018 - 08 Aug 2018

​

Rank	Paper	Downloads
1.	Online Contracts (2018) Eric Goldman Santa Clara University - School of Law	371
2.	Data Pollution Omri Ben-Shahar University of Chicago Law School	250
3.	The Persistence of 'Dumb' Contracts Jeffrey M. Lipshaw Suffolk University Law School	200
4.	Cash America and the Structure of Bondholder Remedies G. Mitu Gulati and Marcel Kahan Duke University School of Law and New York University School of Law	153
5.	Not-So-Smart Blockchain Contracts and Artificial Responsibility Adam J. Kolber Brooklyn Law School	131
6.	Behavioral Law and Economics - Introduction Eyal Zamir and Doron Teichman Hebrew University of Jerusalem - Faculty of Law and Hebrew University of Jerusalem - Faculty of Law	131
7.	Force Majeure and Excuses in Smart Contracts Eric Tjong Tjin Tai Tilburg Law School	120
8.	New Frontiers in Private Fiduciary Law Paul B. Miller Notre Dame Law School	109
9.	Personalizing Mandatory Rules in Contract Law Omri Ben-Shahar and Ariel Porat University of Chicago Law School and Tel Aviv University	98
10.	Freedom, Choice, and Contracts Hanoch Dagan and Michael Heller Tel Aviv University - Buchmann Faculty of Law and Columbia University - Columbia Law School

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 09 Jun 2018 - 08 Aug 2018

Rank	Paper	Downloads
1.	Online Contracts (2018) Eric Goldman Santa Clara University - School of Law	371
2.	Data Pollution Omri Ben-Shahar University of Chicago Law School	250
3.	The Persistence of 'Dumb' Contracts Jeffrey M. Lipshaw Suffolk University Law School	200
4.	Force Majeure and Excuses in Smart Contracts Eric Tjong Tjin Tai Tilburg Law School	120
5.	Personalizing Mandatory Rules in Contract Law Omri Ben-Shahar and Ariel Porat University of Chicago Law School and Tel Aviv University	98
6.	Freedom, Choice, and Contracts Hanoch Dagan and Michael Heller Tel Aviv University - Buchmann Faculty of Law and Columbia University - Columbia Law School	95
7.	The Impact of the French Doctrine of Significant Imbalance on International Business Transactions David Restrepo-Amariles, Eva Mouial Bassilana and Matteo Winkler HEC Paris - Tax & Law, Université Côte d'Azur and HEC Paris	83
8.	Purposive Contractual Interpretation Andrew Robertson The University of Melbourne - Law School	75
9.	Why the Equity of Redemption? D.P. Waddilove Harvard Law School	69
10.	Breach of Contract: A Plea for Clarity and Discipline Neil H. Andrews University of Cambridge - Faculty of Law	66

 

Watch out for relevant statutes when entering into contracts (but also, read your own contract language)

A recent case out of the Eastern District of Virginia, K12 Insight LLC v. Johnston County Board of Education, Civil Action No. 1:17-cv-1397, is a cautionary tale for being aware of how statutes can affect contracts. But, also, it could have been decided just on the contractual language alone. 

In the case, the Board of Education signed an Order Form with K12 Insight that provided for an annual fee for three one-year terms. After signature, the school district realized that it could not afford the final two years of the subscription to K12's software and so attempted to terminate the subscription. K12 sued for breach of contract, alleging that the school district was obligated to maintain its subscription for the full three years. 

The court declared the Order Form contract to be void. First, there was a statute that required a pre-audit certification to be affixed to the Order Form in order to ensure that there would be funding for the school district's contract. This contract lacked the pre-audit certification (which maybe explains why there wasn't funding). The court found that the contract was also outside the scope of the superintendent's authority. 

But, finally, even if the contract had been properly made, the Board was permitted under the contract's own terms to terminate it if it didn't have sufficient funds. That was exactly what happened here, so the termination was proper. 

CSLSA 2018 Scholarship Conference at Texas A&M University School of Law: October 12-13

Registration is now open for the Central States Law Schools Association 2018 Scholarship Conference, which will be held on Friday, October 12 and Saturday, October 13 at Texas A&M University School of Law in Fort Worth, Texas. We invite law faculty from across the country to submit proposals to present papers or works in progress.

CSLSA is an organization of law schools dedicated to providing a forum for conversation and collaboration among law school academics. The CSLSA Annual Conference is an opportunity for legal scholars, especially more junior scholars, to present working papers or finished articles on any law-related topic in a relaxed and supportive setting where junior and senior scholars from various disciplines are available to comment. More mature scholars have an opportunity to test new ideas in a less formal setting than is generally available for their work. Scholars from member and nonmember schools are invited to attend.

Please click here to register and to submit a presentation proposal. Registration is FREE for faculty at CSLSA member and affiliate law schools (which is quite a lot of law schools). The deadline for registration is September 1, 2018.

For more information about CSLSA and the 2018 Annual Conference please subscribe to the CSLSA blog. Information on the conference-rate hotel block will be posted soon. We look forward to seeing you in Forth Worth!

Weekly Top Ten SSRN Contracts & Commercial Law Downloads (August 3, 2018)

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 04 Jun 2018 - 03 Aug 2018

Rank	Paper	Downloads
1.	Online Contracts (2018) Eric Goldman Santa Clara University - School of Law	351
2.	Data Pollution Omri Ben-Shahar University of Chicago Law School	245
3.	The Persistence of 'Dumb' Contracts Jeffrey M. Lipshaw Suffolk University Law School	186
4.	Cash America and the Structure of Bondholder Remedies G. Mitu Gulati and Marcel Kahan Duke University School of Law and New York University School of Law	148
5.	Not-So-Smart Blockchain Contracts and Artificial Responsibility Adam J. Kolber Brooklyn Law School	123
6.	Behavioral Law and Economics - Introduction Eyal Zamir and Doron Teichman Hebrew University of Jerusalem - Faculty of Law and Hebrew University of Jerusalem - Faculty of Law	120
7.	Force Majeure and Excuses in Smart Contracts Eric Tjong Tjin Tai Tilburg Law School	113
8.	New Frontiers in Private Fiduciary Law Paul B. Miller Notre Dame Law School	106
9.	Equity as Supplemental Law Paul B. Miller Notre Dame Law School	104
10.	Granular Legal Norms: Big Data and the Personalization of Private Law Christoph Busch and Alberto De Franceschi University of Osnabrück - European Legal Studies Institute and University of Ferrara - Faculty of Law	101

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 04 Jun 2018 - 03 Aug 2018

Rank	Paper	Downloads
1.	Online Contracts (2018) Eric Goldman Santa Clara University - School of Law	351
2.	Data Pollution Omri Ben-Shahar University of Chicago Law School	245
3.	The Persistence of 'Dumb' Contracts Jeffrey M. Lipshaw Suffolk University Law School	186
4.	Force Majeure and Excuses in Smart Contracts Eric Tjong Tjin Tai Tilburg Law School	113
5.	Personalizing Mandatory Rules in Contract Law Omri Ben-Shahar and Ariel Porat University of Chicago Law School and Tel Aviv University	98
6.	Freedom, Choice, and Contracts Hanoch Dagan and Michael Heller Tel Aviv University - Buchmann Faculty of Law and Columbia University - Columbia Law School	92
7.	The Impact of the French Doctrine of Significant Imbalance on International Business Transactions David Restrepo-Amariles, Eva Mouial Bassilana and Matteo Winkler HEC Paris - Tax & Law, Université Côte d'Azur and HEC Paris	82
8.	Purposive Contractual Interpretation Andrew Robertson The University of Melbourne - Law School	69
9.	Why the Equity of Redemption? D.P. Waddilove Harvard Law School	68
10.	Breach of Contract: A Plea for Clarity and Discipline Neil H. Andrews University of Cambridge - Faculty of Law	64

 

Harvey Weinstein's insurance policies

Yet another contract aspect has emerged to the Harvey Weinstein situation, beyond the NDAs with the accusers, the contracts between lawyers and private investigators, and the complicated situation with the National Enquirer. Now insurance policies have stepped into the fray. According to this article, Weinstein's insurance companies are denying coverage based on alleged exclusions of "blatantly egregious and intentionally harmful acts." Weinstein, as his defense has stated, denies the accusations against him and counters that the insurance companies are siding with the accusers in order to get out of paying their obligations. 

According to the insurers, Weinstein is facing eighteen lawsuits and other claims that have been filed in the past year. Naturally, Weinstein's defense is costing a great deal of money. Whether the insurance companies need to pay out under the policies (and which insurance companies need to pay out) probably depends on the exact wording of the policies, which seem to all be slightly different. For instance, one carrier was providing "crisis assistance" in the event of "significant adverse regional or national media coverage." Another was apparently a policy for legal defense that according to Weinstein explicitly included criminal investigations.