ContractsProf Blog

Who's Afraid of a Little Express Consent?

Facebook, digital publishers, and others who make money serving up ads to iPhone users are in a tizzy because Apple is doing something rather awesome for its customers.  It is requiring the explicit permission of iPhone  users before they allow apps to surveil their online movements for purposes of personalized advertising.  Here is where we step into the psychedelic world of consent permissions.  For years, Facebook and its pals in marketing and advertising sales, argued that users “consented” and granted permission to these data tracking practices by clicking “Agree.”  Contracts profs split over this issue – some argued that this was not consent; others argued that it was.  The no-reading problem wasn’t really a problem, according to those in the latter camp, because users would have agreed to the terms anyway.  (I wrote about this split in Greenbag a few years ago in the context of Margaret Jane Radin’s book, Boilerplate, and Omri Ben-Shahar’s review of it).  Ben-Shahar divides these two groups into the “autonomists” and the “boilerplate apologists.”  I prefer using less fancy terms so I’ll stick to calling them the “real consent” camp and the “no reading, no biggie” camp.

If the folks in the “no reading, no biggie” camp are right – and that consumers really don’t care about being tracked in exchange for personalized ads– then Facebook and its advertisers should have nothing to fear.   But I suspect that they will have plenty to fear and that Facebook knew all along that its version of consent was just another type of misinformation that it was guilty of distributing.

Anne C. Fleming, Updated with Link to Georgetown Law Center Memorial Page

The legal academy lost a great colleague this week.  Her colleagues and students at the Georgetown mourn their loss here.

The Legal History Blog has a fitting tribute post here.  Since we cannot improve on what was written there, we share some excerpts.  As the first excerpt indicates, more tributes and remembrances will follow:

Anne C. Fleming, Professor of Law, Georgetown University Law Center, died suddenly Tuesday night from an embolism.  We at the blog were fortunate to know her and we join her colleagues, students, friends, and family in mourning her passing. This post will not do justice to her life, but it is a first attempt to recognize the many ways in which she enriched our field.  We know that more remembrances will follow; when they do, we will post them here.

. . .

Anne joined Georgetown’s law faculty in 2014.  In that year she also published “The Rise and Fall of Unconscionability as the ‘Law of the Poor,’” which placed Williams v. Walker-Thomas Furniture Company in the context of a statutory transformation of consumer protection law.  The article remains revered by contracts law teachers for the way it reframes a canonical case.

Anne’s book, City of Debtors: A Century of Fringe Finance (Harvard University Press, 2018), was a Choice Outstanding Academic Title and won the annual book prize of the American College of Consumer Financial Services Lawyers and the Ralph Gomory Book Prize of the Business History Conference . . . 

At her untimely death, Anne had entered a new and ambitious phase of her scholarly career. For example, her 2019 article "The Public Interest in the Private Law of the Poor" explored "uncharted connections between private law and poverty law," showing "how concerns about public spending on poor relief have shaped debates over the private law of the poor for over a century." The article was aimed not only at legal historians and scholars of poverty law, but also at scholars of law and economics and policymakers concerned with contemporary economic inequality. 

Anne was also fully embarked on an enormously exciting book project, “Household Borrowing and Bankruptcy in Jim Crow America, 1920-1960.”

 

. . .

 

Her colleagues, students, and fellow historians all remember her warmth, generosity, utter lack of pretension, and above all her kindness.  A colleague at South Brooklyn Legal Services recalled her as “fiercely dedicated to her clients, a brilliant and selfless advocate.”  Tom Sugrue, one of her dissertation advisors writes that she was “quietly brilliant and deeply humane.” “Losing a good scholar is bad enough,” writes Bruce Mann, who advised her when she was a Climenko,  “but losing such a good person is far worse.”

We at the blog will miss her dearly and treasure her memory.  

-- Dan Ernst, Mitra Sharafi, and Karen Tani

Contracts Law in the News This Week

In a great illustration of Cheryl Harris's seminal work on whiteness as property, we bring you (h/t Carol Chomsky) this story about a Florida couple that increased the appraised value of their home by 40% by removing from the interior of their home all evidence of the fact that Black people live there.  

In COVID news, the National Law Review reports that Senior District Judge David Alan Ezra granted an insurer's motion to dismiss in Diesel Barbershop v. State Farm Lloyds.  The court found that the insurance policy at issue required a showing of physical property damage and that the virus had caused none.  Even if it had, the policy had a virus exclusion that precluded any award in the case.  Plaintiffs' claim that their loss was due to closure orders issued by civil authorities was unavailing where they could show no direct physical loss.

The National Law Review provides helpful links to reports on similar cases, similarly decided in Florida, Michigan, and the District of Columbia. 

Leonard v. Pepsico: Three Versions of the Commercial

I am teaching Leonard v. Pepsico, a case I blogged about before, next week.  It has become increasingly difficult to find all three version of the commercial  on the web.  Enter CALI, with this helpful page that contains all three videos, a very convenient tool, especially in the Zoom era.

The page also includes a news video celebrating the plaintiff in the case, a business student who saw the commercial, did the math, and saw an opportunity to make a quick buck -- or to clarify the law of offers.

Tuesday Top Ten - Contracts & Commercial Law Downloads for August 25, 2020

Sure the fall semester is underway and you may be juggling new tricks in teaching online, hybrid, and live (but distanced!) courses. We think there is no better way to get away from it all than to peruse the latest scholarship on our favorite topic. Right? Right! So let's get to it:

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 26 Jun 2020 - 25 Aug 2020

Rank	Paper	Downloads
1.	Force Majeure, Frustration and Impossibility: A Qualitative Empirical Analysis Smaran Shetty and Pranav Budihal Columbia Law School and National University of Singapore	690
2.	The Social Cost of Contract David A. Hoffman and Cathy Hwang University of Pennsylvania Law School and University of Virginia School of Law	424
3.	COVID-19 Business Interruption Insurance Losses: The Cases For and Against Coverage Christopher C. French The Pennsylvania State University (University Park) – Penn State Law	228
4.	Pervasive Infancy: Reassessing the Contract Capacity of Adults in Modern America Michael Lewis Rath, Young and Pignatelli	199
5.	License to All or Access to All? A Law and Economics Assessment of Standard Development Organizations’ Licensing Rules Anne Layne-Farrar and Richard Stark Charles River Associates and Cravath, Swaine & Moore LLP	162
6.	Unlawfully-Issued Sovereign Debt Mark C. Weidemaier and G. Mitu Gulati University of North Carolina School of Law and Duke University School of Law	160
7.	New Light on Twyne's Case Emily Kadens Northwestern University School of Law	152
8.	Contracts and COVID-19 Andrew A. Schwartz University of Colorado Law School	147
9.	Smart Contracts and Automation of Private Relationships Pietro Sirena and Francesco Paolo Patti Bocconi University - Bocconi Law Department and Bocconi University - Department of Law	114
10.	The Distinction Between Private Law and Public Law Hanoch Dagan and Benjamin C. Zipursky Tel Aviv University - Buchmann Faculty of Law and Fordham University School of Law	109

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 26 Jun 2020 - 25 Aug 2020

Rank	Paper	Downloads
1.	Force Majeure, Frustration and Impossibility: A Qualitative Empirical Analysis Smaran Shetty and Pranav Budihal Columbia Law School and National University of Singapore	690
2.	The Social Cost of Contract David A. Hoffman and Cathy Hwang University of Pennsylvania Law School and University of Virginia School of Law	424
3.	Pervasive Infancy: Reassessing the Contract Capacity of Adults in Modern America Michael Lewis Rath, Young and Pignatelli	199
4.	Unlawfully-Issued Sovereign Debt Mark C. Weidemaier and G. Mitu Gulati University of North Carolina School of Law and Duke University School of Law	160
5.	Contracts and COVID-19 Andrew A. Schwartz University of Colorado Law School	147
6.	Relationship as Product: Transacting in the Age of Loneliness Shmuel I. Becher and Sarah Dadush Victoria University of Wellington and Rutgers, The State University of New Jersey - Rutgers Law School	88
7.	From Automation to Autonomy: Some Non-existent Problems in Contract Law Dr Eliza Mik Melbourne Law School	79
8.	Hashing Out Agreements: An Overview of 'Smart' Contracts under Canadian Law Florian Martin-Bariteau and Marco Pontello University of Ottawa - Common Law Section and University of Ottawa, Common Law Section, Students	65
9.	Contracts, Markets, and Justice: On Peter Benson's 'Justice in Transactions' Felipe Jiménez USC Gould School of Law	64
10.	Silence for Sale Jeff Gordon Sydney Law School	60

 

Weekend Frivolity: A Letter from Babyland Amusement Company

Thanks to Dave Hoffman (aka @HoffProf), the main thing we are looking forward to in 2021, aside from the arrival of a COVID vaccine, is teaching Hanford during the second semester of Contracts.  Now, he has provided, via Trang (Mae) Nguyen this letter from the company at the heart of the case.  The letterhead is a great indication of why this case is so much fun!

Weekend Frivolity: Introduction to the First Year, from UVA Law School

For the first time, I am somewhat concerned that our weekend frivolity is not sufficiently frivolous.  But this wonderful introduction to the first year from UVA's 2016 orientation focuses on Lucy v. Zehmer, which is itself about frivolous offers.  It's a fun case of course, and the UVA faculty does a great job with it and uses the case to help prepare their students for the challenges of the first year.

Clauses and Controversies

Mitu Gulati of Duke Law School and Mark Weidemaier of University of North Carolina Law School have a new podcast on contract clauses and controversies called...Clauses & Controversies!  The first episode is on governing law clauses and a controversy involving Venezuelan bonds.  As Mitu Gulati notes at the beginning of the episode, too often 1L contracts courses neglect to show students actual contract clauses (a problem which inspired me to write a book that uses contract clauses to illustrate doctrinal concepts).  I look forward to hearing more Clauses & Controversies podcasts - they promise to help spice up the online delivery of contract law this fall.

An Old Case Is Now a New Must-Teach Case

Yesterday, having recommended the Promises, Promises podcast, I listened to my first episode.  I thought it was the first episode, because it is the earliest one on the podcast's homepage, but it didn't feel like a first episode, so maybe there are more episodes that I haven't found yet.  The hosts clearly had already hit their stride.  Dave Hoffman has now clarified to me that there is no "first episode." The podcast mimics asynchronous teaching: contracts profs can plug the episodes into their syllabi wherever they like.

The episode discusses Hanford v. Connecticut Fair Association, which is a case about traveling baby beauty pageants.  A dispute arose over whether an outbreak of polio in 1916 provided legal grounds for the entity that was to host the pageant to cancel the event.  I know, I had you at traveling baby beauty pageant.  If they still existed in 2001, I definitely would have entered my daughter.  Then we could pay for her college tuition with her winnings! 

Given the times, this sleeper of a case is now a must-teach case.  

Another Contracts Podcast: Clauses and Controversies

Just last week we posted a notice for  a new podcast from Dave Hoffman and Tess Wilkinson-Ryan, Promises, Promises, which already has a baker's dozen episodes.  Our readers can get in on the ground floor with Mitu Gulati and Mark Weidemaier's new podcast, Clauses and Controversies, which released its first three episodes on Monday. While Promises, Promises discusses classic cases from the standard first-year contracts curriculum, Clauses and Controversies announces itself as "A Podcast about International Finance, Contract Clauses and the Controversies Surrounding These Clauses."

I am looking forward to recommending Promises, Promises to my students when we get to the cases that Professors Hoffman and Wilkinson-Ryan discuss, and I am looking forward to recommending Clauses and Controversies to my students who have backgrounds in finance so that they can listen to the episodes and dumb them down a bit so that I can follow.  Just kidding -- the podcast is actually very accessible and a great place for folks without a background in international finance to get a taste of the excitement.

Fox 43 Interviews Dave Hoffman and Nancy Kim on University COVID Policies

Fox 43 showed great discernment in its choice of interviewees for this piece on how universities are responding to the return to classes at colleges and universities.

 

Uber and Lyft drivers in CA

In a previous post, I blogged about the legal (and particularly, legislative) constraints on private parties to recharacterize legally defined relationships such as calling an employee an independent contractor.  In CA, the issue has been heating up and reached a critical point when AB 5, a new law addressing the classification of employees v. independent contractors, went into effect.  As I mentioned in that prior post, the California Attorney General Xavier Becerra and the city attorneys of Los Angeles, San Diego, and San Francisco sued Uber and Lyft, arguing that they had misclassified their drivers as independent contractors when they should be employees under AB 5.  Last week, a California judge agreed and issued a preliminary injunction compelling the companies to classify their drivers as employees immediately (due to the pandemic, this issue has even greater urgency given have financially stressed many drivers are.  Uber and Lyft ridership is also way down). The Verge has the story and a copy of the complaint.

The takeaway is that parties to a contract may allocate their rights and responsibilities but only in areas where they have the authority to do so.  Private parties do not have the right to characterize their relationship in a way that doesn’t reflect reality (as defined by statute).  Facts matter, even in contracts.

Tuesday Top Ten - Contracts & Commercial Law Downloads for August 18, 2020

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 19 Jun 2020 - 18 Aug 2020

Rank	Paper	Downloads
1.	Contracts for Clouds, Revisited: An Analysis of the Standard Contracts for 40 Cloud Computing Services Johan David Michels, Christopher Millard and Felicity Turton Queen Mary University of London, School of Law - Centre for Commercial Law Studies, Queen Mary University of London, School of Law - Centre for Commercial Law Studies and Queen Mary University of London, School of Law - Centre for Commercial Law Studies	700
2.	Force Majeure, Frustration and Impossibility: A Qualitative Empirical Analysis Smaran Shetty and Pranav Budihal Columbia Law School and National University of Singapore	565
3.	The Social Cost of Contract David A. Hoffman and Cathy Hwang University of Pennsylvania Law School and University of Virginia School of Law	391
4.	COVID-19 Business Interruption Insurance Losses: The Cases For and Against Coverage Christopher C. French The Pennsylvania State University (University Park) – Penn State Law	193
5.	Pervasive Infancy: Reassessing the Contract Capacity of Adults in Modern America Michael Lewis Rath, Young and Pignatelli	191
6.	License to All or Access to All? A Law and Economics Assessment of Standard Development Organizations’ Licensing Rules Anne Layne-Farrar and Richard Stark Charles River Associates and Cravath, Swaine & Moore LLP	160
7.	Unlawfully-Issued Sovereign Debt Mark C. Weidemaier and G. Mitu Gulati University of North Carolina School of Law and Duke University School of Law	151
8.	New Light on Twyne's Case Emily Kadens Northwestern University School of Law	141
9.	Contracts and COVID-19 Andrew A. Schwartz University of Colorado Law School	137
10.	Windstream and Contract Opportunism Elisabeth de Fontenay Duke University School of Law	115

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 19 Jun 2020 - 18 Aug 2020

Rank	Paper	Downloads
1.	Force Majeure, Frustration and Impossibility: A Qualitative Empirical Analysis Smaran Shetty and Pranav Budihal Columbia Law School and National University of Singapore	565
2.	The Social Cost of Contract David A. Hoffman and Cathy Hwang University of Pennsylvania Law School and University of Virginia School of Law	391
3.	Pervasive Infancy: Reassessing the Contract Capacity of Adults in Modern America Michael Lewis Rath, Young and Pignatelli	191
4.	Unlawfully-Issued Sovereign Debt Mark C. Weidemaier and G. Mitu Gulati University of North Carolina School of Law and Duke University School of Law	151
5.	Contracts and COVID-19 Andrew A. Schwartz University of Colorado Law School	137
6.	Frustration, not Fortitude: the Case for Applying the Doctrine of Frustration to Leases Affected by COVID-19 Eu-Yen Tay Independent	111
7.	Relationship as Product: Transacting in the Age of Loneliness Shmuel I. Becher and Sarah Dadush Victoria University of Wellington and Rutgers, The State University of New Jersey - Rutgers Law School	84
8.	From Automation to Autonomy: Some Non-existent Problems in Contract Law Dr Eliza Mik Melbourne Law School	76
9.	Symposium Article: Complete Contracts in Finance Elisabeth de Fontenay Duke University School of Law	67
10.	Contracts, Markets, and Justice: On Peter Benson's 'Justice in Transactions' Felipe Jiménez USC Gould School of Law	64

Party Like It's 2017!

I haven't taught Contracts since 2017.  In that year, my university announced that it would not be admitting a new class of first-year law students.  There were no new students to teach in 2018, or in 2019.

But it's 2020, and I am a new faculty member at the Oklahoma City University School of Law, where I get to teach four (count 'em!) sections of socially distanced students.  Great to be back in the saddle!  

Weekend Frivolity: For Nancy, the Resident Dog Person

The cat person in me has to ask: Really, four minutes of this?!?

Bar Exams (again)

Jeremy recently blogged about bar exam waivers and discussed Andrea Boyack's excellent article discussing the contract issues relating to them ( I plan to use Boyack's article in my contracts and business law classes to help students "issue spot" and understand these legal concepts in a relevant context).  The  bar exam waivers are particularly problematic given the reports by bar exam takers about the lack of safety protocols followed by those who administered the bar exam.  The ABA Journal reports that North Carolina bar exam takers have complained about people not wearing masks, dirty restrooms, and a lack of sanitation procedures for pencils, tables and computer toggles.  Colorado bar exam takers have another reason to be concerned - one asymptomatic exam taker tested positive for COVID-19 shortly after taking the exam.  

Waivers v. Exculpatory Agreements

With all the talk about COVID waivers, I thought it might be helpful to discuss the difference between waivers and exculpatory agreements (or agreements to waive rights).  Because we refer to both as “waivers,” things can get confusing.  I just wrapped up my summer trimester Contracts II course where “waivers” were on the syllabus.  Waivers always cause so much confusion and I used to think that it was because we discuss them when we get to conditions (I’ll leave the confusing topic of conditions for a later post….)  A waiver, of course, is an intentional relinquishment of a known right.  When I discuss waivers in Contracts class, it’s in the context of waiving one’s contractual right.  The party with the right may unilaterally waive it.  One does not need the other party’s consent to waive a right because it is not an agreement – it’s the act of not enforcing a right arising under the agreement.  Just as one may unilaterally waive a known right, one may also unilaterally retract it as long as the other party hasn’t detrimentally relied (and there’s still time to perform). 

This is different from an exculpatory agreement, which is also often referred to as simply a “waiver.” An exculpatory agreement is a contract where what one party is giving up are rights that they would otherwise have in exchange for what the other party is offering. It differs from the first type of waiver (the act of waiving) because one is promising to waive the right.  The waiver is the consideration and cannot be unilaterally retracted. 

It wasn’t until I taught Torts that I realized the reason why some students might be confused when we discuss “waivers” in Contracts.  They may be confusing “waivers” (the present act of waiving) with exculpatory agreements containing a waiver of rights as part of a bargained for exchange.

Any thoughts about waivers?  I welcome comments below.

A Big Red Alternative to Waivers

Contracts giant Peter Linzer shared with us a link to Cornell University's alternative to COVID waivers.  From her perch high above Cayuga's waters, Cornell President Martha Pollock has determined to use the powers of contract (well, "compact") to nudge students towards behaviors that are healthy not only for themselves, but also for the entire Cornell community.

Instead of pulling students onto campus and disclaiming any liability when students get sick, Cornell is pushing students away unless the students agree to take responsibility for their own conduct.  The compact spells out the necessary conduct of students, and here's the rub:

I understand that violations of this Compact will be handled expeditiously by the Cornell Compact Compliance Team (“CCCT”). I agree that should the CCCT determine that my behavior violated the Compact, I may lose the privilege of engaging in on-campus activities (including research and in-person classes), residing in on-campus housing, or accessing Cornell facilities and buildings, and that my Cornell net id and/or Cornell card may be deactivated for a period of time (blocking my ability to participate in remote learning and other online Cornell activities) as determined by the CCCT. I acknowledge and agree that there is no appeal of the decisions and directives of the CCCT, as these determinations will be made on an urgent basis to protect the health and safety of the community as a whole.

Professor Linzer is enthusiastic about the Cornell alternative to waivers.  I'm not so sure.  This is a lot of power to put in the hands of the CCCT, and the need for urgent action does not explain the absence of recourse.  If students must forfeit rights and privileges for which they have paid, why can't there be a post-apocalypse right of appeal for a refund and perhaps even an apology?  After all, Cornell carves out an exception to FERPA and threatens to tell your Mom if you violate the compact.  That kind of reputational harm is hard to undo.

Another problem with the compact is that Cornell reserves the right to change the rules on the fly.

The expectations set forth below are based on recommendations by public health authorities and may change based on the spread of COVID-19 in the Ithaca community or developments in medical knowledge. To protect myself and others, I understand and agree to adhere to the following expectations, and with supplemental health and safety responsibilities the university or public health authorities may establish.

Would you advise a client to accept such terms?

Finally, the compact includes language about assumption of risk that comes very close to forcing students to sign a waiver:

I acknowledge that, even with the mitigation steps taken by Cornell and my anticipated compliance with the expectations set forth above, I may be exposed to and contract COVID-19. I further understand that there are risks to participating in the Cornell on-campus community, whether in live classrooms, residence halls, or other activities.

Well, at least it's conspicuous.

On the whole, I like Cornell's approach, and with a few tweaks, I might throw the weight of my two Cornell degrees behind it.  But neither of those degrees are in law, and they don't weigh much on any scale.

Promises, Promises on Spotify!

We at the blog are delighted to share a new Contracts podcast, Promises, Promises from Tess Wilkinson-Ryan & Dave Hoffman.

No doubt, we’ll have more to say about this once we have time to listen!

The Function of University Waivers

Yesterday, Jeremy posted about university liability waivers.  I have written about the differences between notices and contracts in the past, and am in the middle of writing another article on the topic, and so found this issue particularly interesting.  Generally, I am not a fan of liability waivers because they tend to be hidden in fine print and the person “agreeing” to it has no choice. The university liability waivers, however, seem to be very different.

First, they are presented in a conspicuous way and require a much more deliberate act of consent (it’s not simply a click to a link that nobody reads).  The wording is clear and the student has to do something conscious that takes time, such as inputting their student ID number.  The language does not mess around about the legal effect of the “manifestation,” unlike the typical wrap contract where users click without even knowing what they are doing.  The students also have a choice - I think all universities that are planning to open are allowing their students to opt-out and study from home.  (If not, then the waivers are coercive, IMHO).  In other words, students don't have to sign them if they want to stay enrolled and continue their studies.

Second, the waivers seem to be serving a very different function.  No university wants to be known for having a COVID-19 outbreak, and they all want to protect their students, faculty and staff.  This is not a cold-hearted corporation acting irresponsibly, hiding important terms in fine print.  Universities will make efforts to reopen safely.  The concern – the weak link in all these efforts – is that students will not act responsibly and that they won’t follow the safety protocols.  Generally, members of this particular demographic group (19-25) seem to be discounting the possibility of contracting the virus or the risks associated with catching it, and they are getting it as a faster rate than other groups as a result (and spreading it).*  Colleges can reopen safely if everyone, follows the rules; but commonsense tells us that many people will not unless they are informed of the consequences.  These consequences must be made clear to them, and they should be made relevant to them (not just a hypothetical older person in a nursing home)  I personally think universities should emphasize not only waivers but repercussions to the students like academic probation or disciplinary action if they violate the protocols.  Prevention is more important than escaping liability in this case. 

I don't know if the waivers should or would be enforceable to waive liability, but they seem pretty effective at emphasizing the severity of the problem and the need to follow the protocols.  They are bringing a lot of attention to students who might otherwise downplay the risks (optimism bias, anyone?)  In other words, they are effective as notices even if they should not be as contracts.

 

*I apologize for having to make this generalization; I know there are many 18-25 year olds who are taking this very seriously and being very responsible – much more responsible than older adults.