ContractsProf Blog

We Interrupt This Frivolity for . . . COVID Vaccines and Contracts

There is a dispute brewing about the allocation of COVID vaccines between the EU and the UK.  The dispute raises questions of "reasonable efforts" and force majeure.  Here's a video on the subject.

 

 

Weekend Frivolity: Pandas Suck at Infrastructure

 

 

Farshad Ghodoosi, Contractual Allocation of Risk in Times of Crisis, Part III

Farshad Ghodoosi
Assistant Professor of Business Law
David Nazarian College of Business and Economics
California State University, Northridge

Today’s post is the last post about my article on force majeure clauses. In the last two posts, I first described my article’s explanations (based on law & economics and behavioral approaches) of force majeure clauses. In the second post, I shared the article’s empirical findings. Today, I share with you my suggestion concerning the inclusion of reliance theory in force majeure analysis.

III. Normative Prescriptions

As evidenced from the previous two sections, courts tend to focus on the controllability factor more than foreseeability and lexical interpretation. The control factor in particular places the center of inquiry on promisor’s ability to control. For example, in the aftermath of 2008 financial crisis, in Elavon v. Wachovia, the court stated that continuation of the referral program was well within Wachovia’ and Wells Fargo’ control and therefore does not relieve them from performance.

I argue that this approach is insufficient mainly because it ignores promisee’s degree of reliance. Put differently, current force majeure analysis does not take into account the degree of (true) reliance on promises.

Let’s imagine two students who enrolled in a college: Student A decides to attend this college after touring the campus, visiting the physical facilities including the gym, and classroom sizes. Student B does not plan to spend much time on campus and decides to attend primarily because of its local reputation. Now come Covid-19 restrictions and both have to attend the school online. If both student A and B assert breach of contract and seek restitution, should the law treat them the same?

The current approach seems to treat them the same. I argue, however, that we may be able to use Section 90 of the Restatement (Second) of Contracts and the notion of promissory estoppel to differentiate between these two students. Applying reliance theory, Student A’s degree of reliance on the physical facility is far greater than Student B's. Therefore, it may be more equitable to differentiate between the two by granting restitutionary damages (e.g., refund on tuition) and reliance damages (e.g., expenses and fees related to the lease) to Student A (for further discussion on restitution in this context see David Hoffman & Cathy Hwang's recent article). Using my suggested approach, I analyze the recent case between Edison Ballroom v. Columbia Law School and Gap v. Ponte Gadea. In both cases, by taking into account the degree of reliance by parties (for example Edison Ballroom’s degree of reliance on Columbia Law School’s hosting of its Barrister’s Ball), courts are able to fashion more equitable remedies and outcomes in lieu of the harsh zero-sum game of the current approach (excuse v. no excuse).

As to the reliance theory, a narrow and classical approach views Section 90 as only applicable to defects in formation, in particular lack of consideration. But the language of the section and the developments of promissory estoppel in courts’ opinions as explained in the article is not necessarily prohibitive of its applicable in this context. For example, promissory estoppel has been expanded to situations such as interpretation of an offer, timing of acceptance, preliminary agreements, indefinite agreements, and circumstances under which one party will be allowed to recover in restitution. (A shameless plug, I invoked promissory estoppel in the context of smart/automated contracts here because it is most protective of users of such platforms).

In summary, this paper shows that parties include force majeure clauses to seemingly shift the focus to the events and not their intent at the time of formation and that courts employ the control standard more than other factors. Normatively, I contend that the more equitable outcome can be achieved if promisee’s reliance is also taken into account.

Farshad Ghodoosi, Contractual Allocation of Risk in Times of Crisis, Part II

Farshad Ghodoosi
Assistant Professor of Business Law
David Nazarian College of Business and Economics
California State University, Northridge

Today’s post summarizes my paper’s findings regarding the factors (predictors or variables) that determine courts’ decisions in force majeure clauses. Yesterday’s post dealt with my paper’s explanation for the parties' inclusion of force majeure clauses against the backdrop of the same/similar doctrines in common law and UCC (i.e., impossibility, impracticability, and frustration of purpose).  

The second inquiry of the article tries to make sense of courts’ decisions by analyzing the weight given to six types of events and three types of reasoning as explained below.

1. Empirical Analysis of Courts’ Opinions

In reviewing courts’ opinions, I realized that courts generally use three factors (predictors) related to force majeure clauses: Whether the event was foreseeable (foreseeability); whether it was beyond parties’ control (controllability); and whether the language of contracts include the events before them (lexical interpretation). Although some of the inquires can be intertwined, my main question was the weight given to these factors. These factors can be outcome determinative. For instance, if foreseeability is key, the query is whether parties could foresee a global pandemic at the time of the formation of their contracts. If control is the main inquiry, the question is whether the non-performing party could avoid the consequences of Covid-19 (hence a due diligence test) by, for example, placing the restaurant tables outdoors. Last, if the language is key, the main question is whether Covid-19 falls under any of the events listed (is it an Act of God, for example?).

A corollary of this inquiry is whether the type of events (for instance, natural events as opposed to economic downturns) have any bearings on the type of reasoning the courts have employed. Accordingly, I created the model below which underpins the empirical aspect of the paper:

For the empirical approach, in summary, I used the Harvard Caselaw Access Project (they kindly featured this article). After cleaning, stemming and lemmatizing the text of the opinions related to force majeure from the year 1810 onwards, I applied natural language processing techniques including creating frequency scores based on bag-of-word model, TFIDF, and cosine similarity (in doing so I benefited from Jonathan Choi’s article, and Law as Data, edited by Michael Livermore & Daniel Rockmore, and empirical works by Jed Stiglitz, Eric Talley, Julian Nyarko, and Sarath Sanga among others). I created a dictionary of related concepts (for example, for the “governmental acts” category I included the words “regulations” “shutdown” “closure” “permit” among others.).

Last, I applied regression analysis (including bootstrapping techniques in particular Hayes’ moderation and mediation methods, which may be the first use of its kind in this context in legal scholarship).

Some of the findings reinforce what we expected and some are new. For example:

• Over time, courts have engaged increasingly with events related to (i) economic hardship (broadly defined) and (ii) governmental actions. (see Chart 2 here)
• Over time, in terms of frequency, courts have looked into intent and contractual language more. (see Chart 3 here)
• As courts engage more with the force majeure issue, they are more likely to deploy the control analysis and less so analyses related to foreseeability and contractual interpretation. Put simply, the control variable is the most important factor. (see Table 1 here)
• As to the direct effects, the results show that there are no direct effects between the types of events and the courts’ weighted score for force majeure. Put simply, no particular event triggers any particular analysis. (see Table 2 here)
• As to the indirect effects, the results show that the control variable consistently mediates the relationship between the event type and the weighted score of force majeure. Put simply, control explains the relationship between the type of event and force majeure (lexical interpretation is not significant). (see Table 3 here)
• The analysis related to control plays a more important role at the state level comparing to federal courts. Put differently, state courts tend to use the control factor more than federal courts. (See Chart 4 here)

I also hand-coded 110 decisions for their outcomes (accept or reject) (to be precise, decisions were coded as accept, reject, or not clear/not sure. I then created a dummy coded variable in which “reject” was coded as 1, “accept” was coded a 0 and “not sure” was not included.). The result is as follows:

• Acceptance of the force majeure argument is positively related to the number of times the term force majeure appeared in those cases (The same is true for rejection). Although this is subject to further research and robustness checks, it can reasonably be concluded that the frequency of the phrase “force majeure” is related to acceptance (the frequency of the phrase is a good indicator of its outcome).

In summary, the empirical aspect reveals that the type of event (e.g., natural events v. economic downturn) is not directly related to courts’ force majeure analyses. However, the control variable consistently mediates (explains) the relationship between the two. Put simply, the beyond-the-control-of-the parties standard is the most important variable. The effect of control on force majeure is moderated (more pronounced) in state courts.

Tomorrow’s post will explain the normative aspect of the article which suggests that promisee’s degree of reliance should play a bigger role in force majeure analysis.

Tuesday Top Ten - Contracts & Commercial Law Downloads for January 26, 2021

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 27 Nov 2020 - 26 Jan 2021

Rank	Paper	Downloads
1.	Contractual Allocation of Risks in Times of Crises: Computational and Normative Analyses of Force Majeure Clauses Farshad Ghodoosi Nazarian School of Business & Economics, California State University, Northridge	171
2.	Equity as Meta-Law Henry E. Smith Harvard Law School	160
3.	Does Voter Fraud Pay? Texas Lt. Gov. Dan Patrick’s $1 Million Voter Fraud Offer Michael Conklin Angelo State University	146
4.	Economic Challenges for the Law of Contract Alan Schwartz and Simone M. Sepe Yale Law School and University of Arizona - James E. Rogers College of Law	138
5.	Financial Terms in License Agreements Jorge L. Contreras University of Utah - S.J. Quinney College of Law	125
6.	Introduction: The Oxford Handbook of the New Private Law Andrew S. Gold, John C. P. Goldberg, Daniel B. Kelly, Emily L. Sherwin and Henry E. Smith Brooklyn Law School, Harvard Law School, Notre Dame Law School, Cornell University - Law School and Harvard Law School	117
7.	AI Governance in Canadian Banking: Fairness, Credit Models, and Equality Rights Virginia Torrie and Dominique Payette University of Manitoba and affiliation not provided to SSRN	105
8.	Mandatory Arbitration and the Boundaries of Corporate Law Asaf Raz University of Pennsylvania Law School	96
9.	Whiteness as Contract Marissa Jackson Sow Open Society Foundations (OSF)	83
10.	Freedom to (Smart) Contract: The Myth of Code and Blockchain Governance Law Tiffany Sillanpaa New York University School of Law Law School	82

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 27 Nov 2020 - 26 Jan 2021

Rank	Paper	Downloads
1.	Six Levels of Contract Automation: Evolution to Digitalised Smart (and Legal) Contracts Susannah Wilkinson Herbert Smith Freehills	172
2.	Contractual Allocation of Risks in Times of Crises: Computational and Normative Analyses of Force Majeure Clauses Farshad Ghodoosi Nazarian School of Business & Economics, California State University, Northridge	171
3.	Does Voter Fraud Pay? Texas Lt. Gov. Dan Patrick’s $1 Million Voter Fraud Offer Michael Conklin Angelo State University	146
4.	Mandatory Arbitration and the Boundaries of Corporate Law Asaf Raz University of Pennsylvania Law School	96
5.	Freedom to (Smart) Contract: The Myth of Code and Blockchain Governance Law Tiffany Sillanpaa New York University School of Law Law School	82
6.	Non-Competes and Other Contracts of Dispossession Sandeep Vaheesan and Matthew Buck Open Markets Institute and affiliation not provided to SSRN	80
7.	Trust and Contracts: Empirical Evidence Francesco D'Acunto, Jin Xie and Jiaquan YAO Boston College, The Chinese University of Hong Kong (CUHK) and affiliation not provided to SSRN	79
8.	Justice in Transactions: A Public Basis for Justifying Contract Law? Martijn W. Hesselink European University Institute	61
9.	Old Law Is Cheap Law Gerrit De Geest Washington University in St. Louis - School of Law	53
10.	The Mental Element in Equitable Accessory Liability Lusina Ho The University of Hong Kong - Faculty of Law	49

 

Farshad Ghodoosi, Contractual Allocation of Risk in Times of Crisis, Part I

Farshad Ghodoosi
Assistant Professor of Business Law
David Nazarian College of Business and Economics
California State University, Northridge

Covid-19 and the resulting pandemic triggered a series of legal and policy questions. A principal legal question in private law has been related to performance of contracts and the scope of force majeure clauses in contracts. The interpretation of contract clauses can sometimes have systemic consequences. For example, if consequences related to Covid-19 are construed to be a “physical loss or damage” under business insurance policies, then we may expect systemic repercussions for insurance companies (more on this here). Similarly, the interpretation of force majeure clauses in contracts and whether Covid-19 falls under “Acts of God” or whether the ensuing shutdowns would be deemed a “governmental act” can have systemic consequences (See e.g., Andrew A. Schwartz recent article here).

In this regard, I had three queries:

• Why do parties include force majeure clauses given the impossibility and impracticability doctrines in common law and UCC? Put differently, assuming the impossibility/impracticability doctrines are defaults rules, do parties deviate from them in their contracts and, if so, in what ways?
• In analyzing the cases related to force majeure, what factors do courts take into account the most? Put differently, what are the predictors and their respective weights in courts’ force majeure analysis?
• Does the current approach yield the most efficient and equitable outcome? How can it be improved?

In my new paper, which employs various techniques including natural language processing and bootstrapping regression, I try to answer each of the queries above. This post is also divided into three parts based on the inquires stated above.

Today’s post addresses the reasons parties incorporate force majeure clauses in their contracts. I should emphasize at the outset that this area of contract law is riddled with inconsistent decisions and does not always lend itself to easy generalizable theories. This is a work-in-progress and I welcome any comments you may have.

1. Raison d'etre for Force Majeure Clauses

I pursued this query using law & economics and behavioral economics. Let me give the conclusion (albeit not conclusive nor always generalizable) at the outset. Through force majeure clauses, parties seem to drop the notion of “basic assumption” underlying impossibility & impracticability (and frustration of purpose) doctrines. By doing that, force majeure clauses act as a delegatory clause enabling the courts to look at ex post events and consequences therefrom rather than what parties anticipated/contemplated at the time of contracting (ex ante). Both the Restatement (Second) of Contracts § 265, § 261 and UCC § 2-615 emphasize that the supervening event must be an event the “non-occurrence of which was a basic assumption on which the contract was made.” The most memorable “basic assumption” (albeit in the context of frustration of purpose doctrine to be precise) was the cancellation of the coronation of King Edward VII which was postponed due to the illness of the King. The non-occurrence (or cancellation) of the coronation formed the “basic assumption” of a lease agreement according to the court in Krell v. Henry (1903).

In an empirical analysis of 1,000 force majeure clauses, I found that most parties do not include the phrases related to basic assumptions while they mostly include the word control (see Chart 1 here). The law & economics approach can help us to some extent in this regard (in particular, Ian Ayres & Robert Gertner classic article). The basic assumption requirement in common law provides judicial tailoring of parties’ intent and therefore can act as a “penalty default rule.” This is an incentive to parties to contract around it while eliminating the basic assumption requirement. This makes the contract interpretation less about parties’ intent at the time of formation and more about how the events unfolded after the contract. The behavioral explanation (for example, using Russell Korobkin work here and Ben-Shahar & Pottow here) directs us to analyze these clauses as “sticky” without giving much of a rational explanation as to why parties include these clauses in spite of the same/similar default rule in common law. I conclude that both of these approaches can help us. Seemingly, parties do not desire the courts to look at their intents at the time of contract formation with hindsight bias. This shifts the analysis from “perceived risk” to “actual risk” in contractual interpretation of force majeure clauses. The risk of the basic assumption requirement is that courts may find events “foreseeable” due to the hindsight bias (many believe that pandemics were foreseeable. Didn’t Bill Gates for example warn us about it a long time ago?). This makes Covid-19 not a “black swan” to borrow the parlance of Wall Street. The basic assumption inquiry lends itself to hindsight bias. And it seems that parties would like to avoid it through force majeure clauses.

Tomorrow’s post will discuss the empirical findings regarding the factors that play the most important role in courts’ decisions in force majeure clauses.  

Introducing our Guest Blogger, Farshad Ghodoosi

This week we are happy to present a three-part blog post from Farshad Ghodoosi.  Farshad's scholarship provides a useful supplement to materials we presented in last year's online symposium on contracts and Covid.  Those papers can be found here.

Farshad Ghodoosi is an assistant professor of business law at David Nazarian College of Business and Economics at California State University, Northridge. Farshad received his doctoral degree (J.S.D.) from Yale Law School.  He also received master of laws from Yale Law School and University of California, Berkeley School of Law (Berkeley Law). He is a recipient of the business law certificate from Berkeley Law. Farshad also received his PhD in International Relations from Florida International University in Miami, Florida. He obtained a bachelor of laws (LL.B) and B.A. in English Language and Literature from University of Tehran. Previously, he was an assistant professor of law and management at Earl G. Graves School of Business and Management at Morgan State University and served as a faculty fellow at Morgan’s Fintech center. Farshad has practiced as an attorney in global litigation and arbitration practices of leading elite law firms on complex and high-stake business, investment, and contractual disputes. He also acted as a consultant in a leading technology consulting firm. He also serves as an expert on issues related to contract law, international law and comparative law.

Farshad’s research agenda concerns multiple areas including contracts, business law, conflict management, and transnational law. In his research, Farshad uses mixed methods including empirical, experimental, and computational analysis of legal texts. His work has appeared or is forthcoming at leading outlets including Washington Law Review, Oregon Law Review, Nebraska Law Review, Lewis & Clark Law Review, Yale Journal of International Law, Harvard Journal of International Law Online, and Foreign Affairs. He also authored the book International Dispute Resolution and the Public Policy Exception with Routledge (2016, reprinted 2018). Farshad’s scholarship can be found at his SSRN. Farshad is also a recipient of several competitive research grants including from the Knight Foundation on legal implications of internet contract designs on consumer behavior, CIBER (Center for International Business Education) on transnational contracts and economic hardship, and Ripple’s Fintech grant on smart contracts and blockchain transactions.

This week, he will share with us a summary of his recent scholarship on Contractual Allocation of Risk in Times of Crisis.

Lin Wood and Mercer Law School

According to the New Yorker staff writer Charles Bethea on Twitter, students at Mercer Law School have been calling that institution to remove the name of Lin Wood (pictured with his BAE) from a courtroom in the school.  Apparently, Mr. Wood Zoom bombed a call organized to discuss the matter under the pseudonym Motley Crew.   Wood uploaded a recording of the call to Telegram, which is apparently where you go when you have been banned from all the social media platforms that I have heard of.  Now it is also available here.

Bethea shares students' accounts of the call.  According to the students, Mr. Wood abused the Dean, who responded graciously, shared some QAnon-supported conspiracy theories, promised to share evidence of voter fraud in the coming week, and threatened to demand the return of his $1 million donation to the school should they take down his name from the courtroom.  Wood's account is somewhat different, as he is threatening to sue the Dean for defamation.  

The potential conflict between Wood and his alma mater  touches on the law on contracts; more specifically, the law of charitable subscriptions.  Recall that in the Allegheny College case, Judge Cardozo observed:

The promisor wished to have a memorial to perpetuate her name. She imposed a condition that the "gift" should "be known as the Mary Yates Johnston Memorial Fund." The moment that the college accepted $1,000 as a payment on account, there was an assumption of a duty to do whatever acts were customary or reasonably necessary to maintain the memorial fairly and justly in the spirit of its creation.  The college could not accept the money, and hold itself free thereafter from personal responsibility to give effect to the condition.   More is involved in the receipt of such a fund than a mere acceptance of money to be held to a corporate use. The purpose of the founder would be unfairly thwarted or at least inadequately served if the college failed to communicate to the world, or in any event to applicants for the scholarship, the title of the memorial. By implication it undertook, when it accepted a portion of the "gift," that in its circulars of information and in other customary ways, when making announcement of this scholarship, it would couple with the announcement the name of the donor.

If Mr. Wood made clear that naming a courtroom for him was a condition of his $1 million gift, he may cite the great Cardozo as supporting his claim.  His ability to do so would of course turn on the nature of his agreement with Mercer, details of which have not been shared with the blog.   However, in the recording, the Dean characterizes the gift as subject to a contractual condition that the school would name a courtroom for Mr. Wood in exchange for his gift.  The Dean says that the contract contained no term of years and no "morals clause" that would enable the university to drop Mr. Wood's name from the courtroom.  The Dean's explanation of the contractual issue seems to be an attempt to help aggrieved students understand why the university was not entirely free to remove Mr. Wood's name from the courtroom.

In any case, Mercer might want to get ahead of the game and use this moment in the spotlight as a fundraising opportunity.  Whether or not it returns the money, it can still ask its alumni to donate so that it can do so if it must without incurring any extra financial stress.

Parler's Motion for a Temporary Restraining Order Against Amazon Denied

Nancy Kim posted last week about Parler's lawsuit against Amazon Web Services (AWS) for, among other things, breach of contract.  Nancy's prediction was that Parler's chance of winning on its breach of contract claim didn't look good.  Yesterday, U.S. District Court Judge Barbara Jacobs Rothstein agreed, denying Parler's motion for a temporary restraining order.

On the breach of contract claim, Judge Rothstein pretty much stuck to the Nancy Kim playbook.  Parler alleged that AWS had breached its Customer Service Agreement (CSA) with Parler by failing to accord Parler thirty days to cure any alleged breaches of the CSA.  Parler contends that it was given only a few hours' notice of breach before AWS suspended its web-hosting services.  However, the CSA clearly gives AWS the right to suspend or terminate its services for material breach of the CSA's conditions, and Parler does not dispute that it did terminate those conditions by violating AWS's Acceptable Use Policy.  AWS provided multiple examples of content posted on Parler that violated that Policy, which proscribes “'activities that are illegal, that violate the rights of others, or that may be harmful to others, our operations or reputation'” and "'content that is defamatory, obscene, abusive, invasive of privacy, or otherwise objectionable.'” 

Nancy Kim's post specifically noted Sections 4, 6, & 7 of the CSA.  Here is Judge Rothstein's conclusion on the breach of contract claim:

Parler has not denied that at the time AWS invoked its termination or suspension rights under Sections 4, 6 and 7, Parler was in violation of the Agreement and the AUP. It has therefore failed, at this stage in the proceedings, to demonstrate a likelihood of success on its breach of contract claim.

Good call, Nancy!

Texas Lieutenant Governor's Dan Patrick's Unilateral Offer

This week's Top Tens features at #5 and #4 on the two lists this article by Michael Conklin.  The article assesses the enforceability of this offer from Texas Lieutenant Government Dan Patrick (Patrick, pictured).  In short, Patrick offers a minimum of $25,000 and up to $1 million to "anyone who provides information that leads to an arrest and final conviction of voter fraud."  There seem to be no geographic limits on the offer, so anyone who discovers evidence of voter fraud anywhere in the country should be incentivized to provide that evidence to Patrick and claim the reward (following arrest and conviction of course).  

Professor Conklin's article explores the enforceability of the offer.  I have no doubt that this is an enforceable offer to enter into a unilateral contract.  As far as Professor Conklin (and I) could discover, the offer has not been withdrawn.  Unilateral offers can be withdrawn at any point before completed performance.  Patrick could try to withdraw at any point before arrest and conviction, but if that case came before me as a judge, I would construe the performance as completed upon delivery of the information that led to the eventual arrest and conviction of  the wrongdoer.  

According to Patrick, "The Democrats have no one to blame but themselves for creating suspicion of final vote totals."  Perhaps so.  But the fact that nobody anywhere in the country has taken up Patrick's offer should long ago have alleviated any such suspicion.  In fact, having gone through a personal bankruptcy in 1992, Patrick should be somewhat risk averse.  Why would he risk his own money if he thought there were a strong likelihood the widespread voter fraud affected the outcome of the 2020 Presidential election? 

Can it be that something other than concern over voter fraud motivated his press release?  Well, the press release encourages viewers to visit Patrick's website for more information.  I could find no information on the website about voter fraud, but I did find information about how to contribute to Patrick's "campaign war chest," which already contains over $19 million.

Tuesday Top Ten - Contracts & Commercial Law Downloads for January 19, 2021

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 20 Nov 2020 - 19 Jan 2021

Rank	Paper	Downloads
1.	Democratic Data: A Relational Theory For Data Governance Salome Viljoen NYU School of Law	897
2.	What Do Lawyers Contribute to Law & Economics? Robert E. Scott and George G. Triantis Columbia University - Law School and Stanford Law School	201
3.	'Lipstick on a Pig': Specific Performance Clauses in Action Theresa Arnold, Amanda Gray Dixon, Hadar Tanne, Madison Sherrill and G. Mitu Gulati McGuireWoods LLP, Duke University School of Law, Students, Duke University School of Law, Duke University School of Law, Students and Duke University School of Law	185
4.	Equity as Meta-Law Henry E. Smith Harvard Law School	152
5.	Does Voter Fraud Pay? Texas Lt. Gov. Dan Patrick’s $1 Million Voter Fraud Offer Michael Conklin Angelo State University	139
6.	Client-Intermediary Relations in the Crypto-Asset World Louise Gullifer, Henry Chong and Hin Liu University of Cambridge - Faculty of Law, affiliation not provided to SSRN and University of Oxford	125
7.	Financial Terms in License Agreements Jorge L. Contreras University of Utah - S.J. Quinney College of Law	121
8.	Introduction: The Oxford Handbook of the New Private Law Andrew S. Gold, John C. P. Goldberg, Daniel B. Kelly, Emily L. Sherwin and Henry E. Smith Brooklyn Law School, Harvard Law School, Notre Dame Law School, Cornell University - Law School and Harvard Law School	112
9.	Contractual Allocation of Risks in Times of Crises: Computational and Normative Analyses of Force Majeure Clauses Farshad Ghodoosi Nazarian School of Business & Economics, California State University, Northridge	110
10.	AI Governance in Canadian Banking: Fairness, Credit Models, and Equality Rights Virginia Torrie and Dominique Payette University of Manitoba and affiliation not provided to SSRN	104

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 20 Nov 2020 - 19 Jan 2021

Rank	Paper	Downloads
1.	Democratic Data: A Relational Theory For Data Governance Salome Viljoen NYU School of Law	897
2.	'Lipstick on a Pig': Specific Performance Clauses in Action Theresa Arnold, Amanda Gray Dixon, Hadar Tanne, Madison Sherrill and G. Mitu Gulati McGuireWoods LLP, Duke University School of Law, Students, Duke University School of Law, Duke University School of Law, Students and Duke University School of Law	185
3.	Six Levels of Contract Automation: Evolution to Digitalised Smart (and Legal) Contracts Susannah Wilkinson Herbert Smith Freehills	162
4.	Does Voter Fraud Pay? Texas Lt. Gov. Dan Patrick’s $1 Million Voter Fraud Offer Michael Conklin Angelo State University	139
5.	Contractual Allocation of Risks in Times of Crises: Computational and Normative Analyses of Force Majeure Clauses Farshad Ghodoosi Nazarian School of Business & Economics, California State University, Northridge	110
6.	Mandatory Arbitration and the Boundaries of Corporate Law Asaf Raz University of Pennsylvania Law School	88
7.	Freedom to (Smart) Contract: The Myth of Code and Blockchain Governance Law Tiffany Sillanpaa New York University School of Law Law School	78
8.	Trust and Contracts: Empirical Evidence Francesco D'Acunto, Jin Xie and Jiaquan YAO Boston College, The Chinese University of Hong Kong (CUHK) and affiliation not provided to SSRN	66
9.	Justice in Transactions: A Public Basis for Justifying Contract Law? Martijn W. Hesselink European University Institute	57
10.	The Mental Element in Equitable Accessory Liability Lusina Ho The University of Hong Kong - Faculty of Law	48

More Reasonable Notice

(This post is a continuation of yesterday’s post on “Reasonable Notice”)

The second case reflecting the evolving understanding of reasonable notice is Kauders v. Uber Technologies .  The plaintiffs sued Uber in Massachusetts Superior Court alleging that three Uber drivers refused to provide one of the plaintiffs, Christopher Kauders, with a ride because he was blind and accompanied by a guide dog.  Uber sought to compel arbitration, but plaintiffs argued that they had not entered into an enforceable arbitration agreement. 

The backstory to this case is interesting.  The lower court judge initially granted Uber’s motion.  Subsequently, the arbitrator ruled in favor of Uber on all the plaintiff’s claims.  Then, the U.S. Court of Appeals for the First Circuit issued Cullinane v. Uber Tech., Inc., 893 F.3d 53, 62 (1^st Cir. 2018) which found that Uber’s registration process did not provide reasonable notice and so did not create a contract.  The judge in Kauders who granted the motion to compel arbitration allowed a motion for reconsideration after Cullinane and then reversed his earlier decision, finding that there was no enforceable contract requiring arbitration.  Uber appealed to the Massachusetts Supreme Judicial Court claiming that the lower court judge should have confirmed the arbitration award because the plaintiffs failed to challenge the award within 30 days.  The appellate court disagreed and found that the issue of arbitrability was preserved for appeal.  The court went through Uber’s registration process in detail, noting website design details such as color, location and wording at each step. It concluded that  Uber’s terms and conditions did not provide the plaintiffs with reasonable notice and that the user did not clearly manifest assent to the terms.

The court noted with some distaste Uber’s unilateral modification clause, noting that:

“Uber can amend the terms and conditions whenever it wants and without notice to the users that have already agreed to them.  In fact under the terms and conditions, the burden is on the user to frequently check to see if any changes have been made.  Yet, even if a user somehow detects a change, there is no way for the user to or contest any of the changes, as the changes are automatically binding in the user.”

The court noted that many of the provisions were “extremely favorable to Uber” including a broad limitation of liability provision.  In addition, the court noted the warranty disclaimer, a strict no-refund policy, a provision stating that Uber was not a provider of transportation (that by-now familiar and disingenuous Big Tech claim that “I’m just a little ol’ platform and not an employer/principal argument never mind my billion dollar valuation”) and a one-sided indemnification clause where the passenger indemnifies Uber from pretty much everything.  It was refreshing to finally have a court take umbrage at the extreme one-sidedness of “standard” TOS.

The court noted that it had not previously considered what standard should be used for online contract formation.  (This might sound surprising but in fact, few state courts have actually addressed this issue.  Most of the cases deciding wrap contract formation have come out of federal court as noted in footnote 20 of this article here).  The court adopted the “reasonable notice” and “reasonable manifestation of assent” test and noted that the tricky part was not which test to apply but how to apply it.  The court concluded that the notice was not reasonable and cited several reasons including that the user did not have to scroll and could register and click “done” without clicking the link to the terms and conditions.  It contrasted the registration process of drivers versus users and concluded that “a user may reasonably believe he or she is simply signing up for a service without understanding that he or she is entering into a significant contractual relationship governed by wide-ranging terms of use.”

Both of these cases are chock full of interesting comments by the court and insights into what is more likely to result in a finding of reasonable notice.  The takeaway? Reasonable notice is fact intensive, not a one-size-fits-all.  Simply because the user is asked to “click” doesn’t mean the contract will be found enforceable.  These two cases reflect part of a trend that looks at the registration process from the standpoint of the user rather than a court.  This ex ante rather than ex post approach is a more realistic and appropriate way to assess the reasonableness of notice and another sign that courts are starting to take the notion of “reasonable notice” more seriously.

Evolving Meaning of Reasonable Notice

A few weeks ago, I blogged about Hansen v. Ticketmaster, a case that IMHO did contract law wrong by taking an unrealistic approach to what constitutes unreasonable notice.  I noted that this case seemed to be on the wrong side of a trend which reallocates the burden that wrap contracts places upon the parties.  Law and econ scholars extoll the efficiency virtues of mass consumer contracts but often neglect to consider the burden that these contracts place upon consumers who are expected to read all the itty bitty terms – or the ALL CAPS terms that are only accessible by clicking on a hyperlink (or three).  As I have discussed elsewhere, recent cases have adopted a different and more encouraging approach by expecting more from the drafters in terms of better presentation of terms.  Under this trend of cases, “reasonable notice” means not only that the adherent has a duty to read, but that the drafter has a duty to draft reasonably (something that I written about many times, including here and here). 

Two subsequent cases reflect that trend which takes the notion of “notice” more seriously. 

The first case, C.D. v. Massage Envy Franchising, LLC, DOCKET NO. ESX-L-3263-19 (N.J. Super. Dec. 3, 2020) involved a plaintiff who alleged that a massage therapist committed assault and battery during a massage and so breached the contract between the parties which prohibited such conduct.  The defendants claimed that the plaintiff agreed to arbitration when she clicked “agree” on a check box at the bottom of an electronic consent form.  The plaintiff was presented with the form when the plaintiff arrived for the service.  The form was presented on a tablet device.  The check box was at the end of a multi-page “General Consent” form and next to the words “I agree and assent to the Terms of Use Agreement” which was a hyperlink.  Underneath the check box was a signature line where the plaintiff signed her name. 

Massage Envy argued that the claim should be submitted to arbitration and, alternatively, that the contract’s forum selection clause required the case be litigated in Arizona and not New Jersey.  The court disagreed, finding that the “General Consent” form failed to clearly direct the plaintiff to the Terms and Conditions which was where the arbitration and forum clauses lurked.

The court stated that it was not holding that clickwrap agreements as a form of contract were unenforceable; rather, it was that this particular agreement was not enforceable because of the way it was presented:

 “within a lengthy electronic document reached only by a hyperlink, which was accessible only adjacent to a signature line, which signature line followed a lengthy list of rules and disclaimers contained on an extended series of screens through which the user was required to scroll, was not under any fair analysis placed in such a way so as to give the plaintiff notice that there was more to consider in agreeing to the defendant’s member rules.”

This case reflects the trend toward placing more of the burden of wrap contracts on the party that has more control over them – the drafting business.  The court further noted that: 

“While it is undisputed that plaintiff did not read the electronic agreement reachable only by hyperlink, that is attributable, in this court's opinion, not to laziness, disinterest, or blithe indifference, but rather to an objectively confusing, nay misleading, design of the website. As a result, plaintiff's ignorance of the document's terms cannot fairly be ascribed to anything she did wrong.”

Because of the length of this post, I will blog about the second case tomorrow.

John Eastman and Chapman University Part Ways

According to this article in the L.A. Times, John Eastman, who has recently represented the President in connection with numerous lawsuits challenging election results, has agreed to resign his position as a professor of law at Chapman University.  Professor Eastman joined Rudy Giuliani at the "Save America" Rally on January 6th.  The L.A. Times reports that, at that rally, he made unsubstantiated claims of voter fraud in connection with the 2020 Presidential election.  

More than 160 faculty members called for the University to take action, but Chapman's President Daniele Struppa refused, citing the limitations of his powers as university president and the important principles of academic freedom and contractual rights.  President Struppa's statement is worth quoting at length.

I am not the Emperor of Chapman University, nor I am the Supreme Leader of Chapman University. I am the President of the university, and as such, I am bound by laws and processes that are clearly spelled out in our Faculty Manual. The Faculty Manual, despite its common name, is actually a contractually binding document that faculty, administration, and Trustees have agreed upon. This document contains the rules that determine how faculty are hired, and how they are disciplined, up to and including termination. The documents spell out cases under which such actions can be taken, and what process must be followed. The process includes a prominent role for the Faculty Personnel Committee and affords the faculty under discipline a process, and the right to grieve the decision in multiple settings. 

I do not know anything about President Struppa (pictured), but if this statement is representative of his qualities, he is a very fine university president.  I do have some concerns about wearing such a busy tie with a plaid sports jacket, but I would not question his leadership on that basis.

Happily, Chapman University and Professor Eastman were able to come to an agreement.  He voluntarily resigned, and neither party will pursue legal action against the other.  Some may think that Professor Eastman was strong-armed into forfeiting his position and some part of his academic freedom and freedom of expression.  I choose to see this episode as one in which contract law and contractual negotiation play a starring role and put in a strong showing.

Guest Post by Alan White, Systemic Racism and Teaching Contracts

Some thoughts on systemic racism and the teaching of Contracts
Alan White

The popular uprisings inspired by Black Lives Matter have prompted many law teachers to reconsider how their pedagogy could better confront systemic racism in the law and the legal academy. This is perhaps more challenging for Contracts than subjects like Criminal Procedure and Property. Here are some thoughts of a white professor on how to educate ourselves (rather than burdening our BIPOC colleagues) and to rethink our Contracts syllabus. Some critical race scholars and others who have tackled this problem are listed in this helpful bibliography. Featuring African-American protagonists in at least a few cases is an important albeit superficial step many textbooks now take, but as teachers we can do far more.

One critical approach to teaching Contracts is to reverse the usual preeminent position that libertarian values like autonomy have when we present the steps of contract identification, typically by beginning a syllabus with voluntary offers and acceptances, or the consideration doctrine of equal or unequal exchange. Instead we can ground a Contracts course in the basic definition of contract, which is state coercion; specifically, an obligation identified and enforced by courts from some social context. To me this also implies starting the class with remedies, to emphasize the point that contract law is about compelling payment of money damages, or in some cases compelling delivery of property or performance of a service. The topic of when courts do and do not grant equitable remedies (injunctions and specific performance) begins to reveal the value choices embedded in our common law. Implied contract terms is also a topic rich with latent political choices, as for example with the employee’s duty of loyalty vs. at-will employment.

 After exploring the scope and limits of state coercion in enforcing obligations, in a second step students may consider (following Legal Realists like Robert Hale) whether the obligations being enforced themselves arise from a spectrum of voluntariness and coercion. If we want to situate the role of contract law in this spectrum of coercion, we can teach formation and enforceability doctrines using contracts that are not the archetype of arms-length negotiation by parties of “roughly equal bargaining power,” but instead arise in employment, consumer, and housing relationships, as well as in business-to-business transactions. Another strategy to highlight the problem of coercion in private contracting is to begin the contract formation subjects with defining acceptance and the reality or fiction of consent, rather than starting with defining “offer.”  Teachers could prominently contrast adhesion contracts with the idealized archetype of negotiated deals. We could follow this with cases describing physical duress, economic duress, and undue influence.

Through the lens of both state and private coercion, it becomes much easier to ground the law of contracts in the U.S. history of slavery and racism. For example, the dichotomy between contract formation and enforceability defenses (a false dichotomy for some critics) can be illustrated with discussion of the black codes as a contract-based means for perpetuating slavery after emancipation. When a freed slave is faced with the voluntary choice of working for a former master for next to nothing (as sharecroppers often were) or being imprisoned for vagrancy, we have the clearest case of contractual coercion. Cases arising under 42 USC Section 1981 (the Reconstruction act guaranteeing the right of former slaves to freely contract) are also excellent vehicles to present and critique various definitions of contract.

 The habit of using unconscionability cases such as Williams v Walker-Thomas Furniture or implied terms cases such as Javins v. First National Realty (warranty of habitability in residential leases) as vehicles to raise issues of racism also needs to be approached with care. Muriel Morisey Spence wrote an excellent article on this (3 Temple Political and Civil Rights Law Review 89 (1993)). It becomes too easy to conflate, even unwittingly, economic oppression with victimhood and lack of agency on the part of the black actors in these cases. Context is vital. The story of Ms. Williams for example, should include not only the unfair practices of Walker-Thomas Furniture, but the housing segregation and redlining that produced contractual offerings like rent-to-own appliance contracts and contracts for deed as poor substitutes for sales arrangements offered to whites. The story of Ms. Javins includes the tenant organizing and rent strike that led DC legal services program to take on a litigation campaign to establish the habitability principle.

More broadly when we select humorous but decontextualized or antiquated cases like Hamer v. Sidway, Lucy v. Zehmer, and Leonard v. Pepsi, we subtly normalize the stories of white men as paradigmatic, and reinforce the invisibility of women and BIPOC. These cases can readily be replaced with cases whose dramatis personae reflect the identities and struggles of diverse Americans. As we also consider assembling free or low-cost learning materials, essential for promoting law school access, we have the occasion to say goodbye to these old chestnuts. I would love to hear from fellow Contracts teachers who are reconstructing syllabi and reading materials along these and other lines.

Tuesday Top Ten - Contracts & Commercial Law Downloads for January 12, 2021

The Tuesday Top Ten returns from its holiday hiatus to welcome you to 2021 (such as it is, so far). Let's get down to business and see what is percolating in the world of contract and commercial law scholarship!

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 13 Nov 2020 - 12 Jan 2021

Rank	Paper	Downloads
1.	Democratic Data: A Relational Theory For Data Governance Salome Viljoen NYU School of Law	846
2.	What Do Lawyers Contribute to Law & Economics? Robert E. Scott and George G. Triantis Columbia University - Law School and Stanford Law School	193
3.	'Lipstick on a Pig': Specific Performance Clauses in Action Theresa Arnold, Amanda Gray Dixon, Hadar Tanne, Madison Sherrill and G. Mitu Gulati McGuireWoods LLP, Duke University School of Law, Students, Duke University School of Law, Duke University School of Law, Students and Duke University School of Law	173
4.	Equity as Meta-Law Henry E. Smith Harvard Law School	140
5.	Client-Intermediary Relations in the Crypto-Asset World Louise Gullifer, Henry Chong and Hin Liu University of Cambridge - Faculty of Law, affiliation not provided to SSRN and University of Oxford	122
6.	Financial Terms in License Agreements Jorge L. Contreras University of Utah - S.J. Quinney College of Law	113
7.	Introduction: The Oxford Handbook of the New Private Law Andrew S. Gold, John C. P. Goldberg, Daniel B. Kelly, Emily L. Sherwin and Henry E. Smith Brooklyn Law School, Harvard Law School, Notre Dame Law School, Cornell University - Law School and Harvard Law School	106
8.	AI Governance in Canadian Banking: Fairness, Credit Models, and Equality Rights Virginia Torrie and Dominique Payette University of Manitoba and affiliation not provided to SSRN	98
9.	Contractual Allocation of Risks in Times of Crises: Computational and Normative Analyses of Force Majeure Clauses Farshad Ghodoosi Nazarian School of Business & Economics, California State University, Northridge	89
10.	Economic Challenges for the Law of Contract Alan Schwartz and Simone M. Sepe Yale Law School and University of Arizona - James E. Rogers College of Law	73

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 13 Nov 2020 - 12 Jan 2021

Rank	Paper	Downloads
1.	Democratic Data: A Relational Theory For Data Governance Salome Viljoen NYU School of Law	846
2.	'Lipstick on a Pig': Specific Performance Clauses in Action Theresa Arnold, Amanda Gray Dixon, Hadar Tanne, Madison Sherrill and G. Mitu Gulati McGuireWoods LLP, Duke University School of Law, Students, Duke University School of Law, Duke University School of Law, Students and Duke University School of Law	173
3.	Six Levels of Contract Automation: Evolution to Digitalised Smart (and Legal) Contracts Susannah Wilkinson Herbert Smith Freehills	145
4.	Contractual Allocation of Risks in Times of Crises: Computational and Normative Analyses of Force Majeure Clauses Farshad Ghodoosi Nazarian School of Business & Economics, California State University, Northridge	89
5.	Freedom to (Smart) Contract: The Myth of Code and Blockchain Governance Law Tiffany Sillanpaa New York University School of Law	72
6.	Mandatory Arbitration and the Boundaries of Corporate Law Asaf Raz University of Pennsylvania Law School	71
7.	Introduction to The Right of Redress Andrew S. Gold Brooklyn Law School	62
8.	Justice in Transactions: A Public Basis for Justifying Contract Law? Martijn W. Hesselink European University Institute	51
9.	The Mental Element in Equitable Accessory Liability Lusina Ho The University of Hong Kong - Faculty of Law	46
10.	Algorithmic Contracts and the Equitable Doctrine of Undue Influence: Adapting Old Rules to a New Legal Landscape Marco Rizzi and Natalie Skead The University of Western Australia Law School and The University of Western Australia Law School	45

 

In Memoriam: Peter Linzer

Today we mourn the loss of Peter Linzer.   Peter was a giant within our field, an active participant in conversations about contracts law and law reform, and a contributor to this blog, e.g. here and here.

The following was shared with the Contracts Listserv.  It was written by one of Peter's students, Patricia A. Bell

Obituary of Peter S. Linzer (1939-2020) 

Legal scholar and law professor Peter S. Linzer succumbed to his long and courageous battle with cancer in the waning days of 2020.  His keen powers of observation, analysis, and languages informed a lifetime of scholarship, commentary, and teaching. He is survived by a wife, a son, and a grandson.  

Precisely slicing and dicing complicated issues that arise from the human condition (contractual agreements and the failures thereof, the civil rights of peoples to freely think, act, and communicate in the public and private spheres without harming the vulnerable among us, and a constant reassessment of “norms”), Peter Linzer was a recognized legal giant. From his status as an informed oenophile to his curiosity almost about all things and level of knowledge about so many, Linzer was also the modern equivalent of a Renaissance Man.  

An only child and precocious from his youth, Linzer grew up in a tall New York City apartment building filled with intelligentsia. His mother once told him “you are the second smartest boy in our building” and she expected him to live up to that high standard. He more than did so and loved telling the story.  Linzer adopted the same blunt approach in his direct communications with colleagues, students, and the press. Many successful lawyers around the world remember the eye-opening commentary received in Linzer’s classes. In a discussion about restitution, Linzer informed one student that “I could substitute the word “banana” for every other word that you just said, and it would make as much sense.” His students honed their substantive legal knowledge, and their legal practice and writing skills in his classrooms, getting their money’s worth and more. A former student reports that “when I think about how much Peter taught me on so many topics, it takes my breath away, and I am filled with gratitude.” Comments from his colleagues on the University of Houston Law Center website demonstrate more of the fondness and regard held for Peter Linzer. 

Peter Linzer enjoyed being part of lively organizations in urban centers and was a loyal member of his carefully chosen communities.  He was a quintessential New Yorker, despite his subsequent decades of work in other major cities. Throughout his lifetime, he kept and wore his academic cap and gown from undergraduate and law school graduations at Cornell and Columbia. After a 1960s career in “the City” at Cahill Gordon and in corporate law and finance for the City of New York, Peter Linzer became Professor Linzer and taught thousands of students at the University of Cincinnati, the University of Detroit, and a long career at the University of Houston Law Center. He enjoyed an active membership in the American Law Institute where he was an Editorial Reviser of the Restatement Second of Contracts, as well as a consultant on five other significant ALI restatements of law.  His powerful public positions on ethics, consumer protection, election law, and clear jury charges will continue to shape the practice of law throughout the United States long after his passing.  Despite Linzer’s long association with New York City and Houston, Texas, he was anything but a regional lawyer.  

Linzer knew and enjoyed the value of having a mentor and being a mentor.  He honored those who mentored him, including the late Arthur Corbin. He never abandoned those he mentored, serving as a lifelong advisor and colleague who always made himself available to discuss new and old ideas and provide reality checks for emerging best practices. He taught young lawyers the value of dialogue and the imperative of staying up to date on law and practice. His praise was effusive, both in and out of the earshot of its subjects. Linzer supervised law students, interdisciplinary students, and recently mentored and supervised a PhD student in Constitutional studies.  

During his decades of association with the University of Houston, Peter Linzer supported its radio station, KUHF, including donations, constant listening and sharing, and providing quick and incisive on-air comments on events and issues.  In that yet another practical way, Linzer supported the communities that he joined.  

In his personal life, Peter Linzer loved to travel and read, as well as enjoy and applaud the performing arts. He was a fan of British TV and classic novels.  He was generous to a fault and adored a good joke, even at his own expense. A lifelong Democrat, Linzer actively participated in public life, viewing it as his duty and his honor.  Linzer’s communication and language skills were legendary, and he worked to keep those skills up to date until the last weeks of his life. He will be sorely missed by many who now celebrate his life and mourn his loss. 

Parler's Lawsuit Against Amazon

Parler, the social media platform of choice for the alt-right, is suing Amazon for - among other things - breach of contract.  It claims that Amazon failed to give it thirty days' notice of termination.  I took a quick glance at AWS's Customer Agreement and the termination clause states the following:

7.2 Termination.

(a) Termination for Convenience. You may terminate this Agreement for any reason by providing us notice and closing your account for all Services for which we provide an account closing mechanism. We may terminate this Agreement for any reason by providing you at least 30 days’ advance notice.

(b) Termination for Cause.

(i) By Either Party. Either party may terminate this Agreement for cause if the other party is in material breach of this Agreement and the material breach remains uncured for a period of 30 days from receipt of notice by the other party. No later than the Termination Date, you will close your account.

(ii) By Us. We may also terminate this Agreement immediately upon notice to you (A) for cause if we have the right to suspend under Section 6, (B) if our relationship with a third-party partner who provides software or other technology we use to provide the Service Offerings expires, terminates or requires us to change the way we provide the software or other technology as part of the Services, or (C) in order to comply with the law or requests of governmental entities.

If the agreement I found is the same as what Parler signed, it seems that Amazon would be able to argue termination for cause under 7(b)(ii)(A) and  (C). 

Section 7(b)(ii)(A) references Section 6 which provides:

6. Temporary Suspension.

6.1 Generally. We may suspend your or any End User’s right to access or use any portion or all of the Service Offerings immediately upon notice to you if we determine:

(a) your or an End User’s use of the Service Offerings (i) poses a security risk to the Service Offerings or any third party, (ii) could adversely impact our systems, the Service Offerings or the systems or Content of any other AWS customer, (iii) could subject us, our affiliates, or any third party to liability, or (iv) could be fraudulent;

(b) you are, or any End User is, in breach of this Agreement

I think Amazon could very well argue that Parler's services did all of (a) and (b).  Regarding 6.1 (b), Amazon's Customer Agreement states

4.2 Your Content. You will ensure that Your Content and your and End Users’ use of Your Content or the Service Offerings will not violate any of the Policies or any applicable law. You are solely responsible for the development, content, operation, maintenance, and use of Your Content.

Inciting violence would be a violation of applicable law, IMHO. 

Finally, there is the limitation of liability clause:

11. Limitations of Liability.

WE AND OUR AFFILIATES AND LICENSORS WILL NOT BE LIABLE TO YOU FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES (INCLUDING DAMAGES FOR LOSS OF PROFITS, REVENUES, CUSTOMERS, OPPORTUNITIES, GOODWILL, USE, OR DATA), EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. FURTHER, NEITHER WE NOR ANY OF OUR AFFILIATES OR LICENSORS WILL BE RESPONSIBLE FOR ANY COMPENSATION, REIMBURSEMENT, OR DAMAGES ARISING IN CONNECTION WITH: (A) YOUR INABILITY TO USE THE SERVICES, INCLUDING AS A RESULT OF ANY (I) TERMINATION OR SUSPENSION OF THIS AGREEMENT OR YOUR USE OF OR ACCESS TO THE SERVICE OFFERINGS, (emphasis added) (II) OUR DISCONTINUATION OF ANY OR ALL OF THE SERVICE OFFERINGS, OR, (III) WITHOUT LIMITING ANY OBLIGATIONS UNDER THE SERVICE LEVEL AGREEMENTS, ANY UNANTICIPATED OR UNSCHEDULED DOWNTIME OF ALL OR A PORTION OF THE SERVICES FOR ANY REASON; (B) THE COST OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES; (C) ANY INVESTMENTS, EXPENDITURES, OR COMMITMENTS BY YOU IN CONNECTION WITH THIS AGREEMENT OR YOUR USE OF OR ACCESS TO THE SERVICE OFFERINGS; OR (D) ANY UNAUTHORIZED ACCESS TO, ALTERATION OF, OR THE DELETION, DESTRUCTION, DAMAGE, LOSS OR FAILURE TO STORE ANY OF YOUR CONTENT OR OTHER DATA. IN ANY CASE, EXCEPT FOR PAYMENT OBLIGATIONS UNDER SECTION 9.2, OUR AND OUR AFFILIATES’ AND LICENSORS’ AGGREGATE LIABILITY UNDER THIS AGREEMENT WILL NOT EXCEED THE AMOUNT YOU ACTUALLY PAY US UNDER THIS AGREEMENT FOR THE SERVICE THAT GAVE RISE TO THE CLAIM DURING THE 12 MONTHS BEFORE THE LIABILITY AROSE. THE LIMITATIONS IN THIS SECTION 11 APPLY ONLY TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW.

So, the breach of contract claim is not looking too good in my view.  And I'm happy to finally write a blog post with TOS as the hero of the story....

 

 

In Memorian: John (Andy) Spanogle

Professor Emeritus Dee Pridgen has posted a tribute on the Consumer Law & Policy Blog.  We reproduce it here:

Dee Pridgen's Tribute to Andy Spanogle

Tribute to Andy Spanogle, 1934-2020.

By Dee Pridgen, Professor Emeritus, University of Wyoming College of Law

I was very saddened to learn the news that my dear friend, and coauthor, Andy (John A.) Spanogle, had passed away in December of last year.  He was a towering figure in the law, especially in the fields of consumer law and international business transactions. 

Our paths first crossed in the late 1980’s, when Andy and his coauthor Ralph Rohner (who just left us last summer) asked me to join them on the second edition of their pioneering casebook, Consumer Law:  Cases and Materials.  The casebook was the first of its kind in a then nascent field.  In the preface to that first edition in 1979, Andy and Ralph relayed their rather apt and prophetic assumptions behind the text:

• Consumer protection statutes and caselaw doctrines are pervasive within the legal structure.
• They are growing.
• They are not likely to disappear, but are more likely to increase.
• Even though they concern widely disparate subject-matter, there are likely to be common doctrinal and practical threads running through them, and it is our job to try to discover those threads.

Consumer law was a thread that ran through Andy’s own professional life.  He was an advocate for the core federal consumer credit laws passed by Congress in the 1970’s, including the $50 limit on consumer liability for unauthorized use of credit cards which we still benefit from today.  He remained involved in and was a valued contributor to the 2^nd, 3^rd and 4^th editions of the Consumer Law casebook.  He also generously supported the National Consumer Law Center, especially in the founding of the Spanogle Institute for Consumer Advocacy, which opened in Washington, D.C. in 2017.

In addition to his influential work in the field of consumer law, Andy coauthored groundbreaking casebooks, treatises and articles in International Business Transactions and International Sales Law.  While teaching law at several different law schools, most recently at George Washington University in Washington, D.C., he also traveled the world as a consultant and teacher.  I know he loved teaching because he continued to serve in the law school classroom as a part-time faculty member for years after he “retired.”  His many students appreciated him very much.

Andy was sharp, witty and had an unforgettable deep-voiced laugh which he employed to good effect on many occasions.  He also sang at his church and in community groups, a talent that I wish I had been able to witness myself. 

Although separated by our geographic locations, Andy remained a good mentor, colleague, and friend to me over the years.  He will not be forgotten.

Jeff Sovern also posted a brief note on the Consumer Law & Policy Blog, linking to an obituary for John "Andy" Spanogle, a contracts and consumer law pioneer who passed last month.  We join the contracts and consumer law community in mourning his passage.

Weekend Frivolity: Flash Fiction

On Losing My Wife to a Younger Man

 

At the beginning of the pandemic, my wife took up with a younger man. As is often the case, she met him through her sister who, innocently, I suppose, thought my wife would enjoy the New York Times’ Spelling Bee puzzle. So it was that my wife transferred her affections to Sam Ezersky.

 

“Oooh,” she exclaimed one morning, while taking a break from solving Sam Ezersky’s puzzle to read an article about Sam Ezersky, “he’s only 24!” I pretended not to know who she was talking about. “And I think he’s Jewish,” she continued, twisting the knife.

 

“What’s his name?” I lied. She told me. “Could be Polish,” I speculated. She was too engrossed in her article about Sam Ezersky to engage.

 

Months passed. We settled into our shelter-in-place routine. My wife’s routine was to spend some time every morning in her favorite chair, attended to by one or more cats, and to gather up the precious baubles that Sam had left for her. Making it to “genius” was her daily goal, but her sister had progressed and now aspired to the occasional Queen Bee. Thus my wife came to spend more and more time each day with Sam in the hopes of finding the last morsel of booty that he had hidden behind some unpropitious consonants or in the plain sight of an ungainly compound consisting of two familiar words.

 

I decided to join her, and she, at first reluctantly, accepted my assistance in exploring the depths of her new beloved. I would study the puzzle for hours before she woke up and then, when she was stumped on the pangram, I would glance over her shoulder and offer “would ‘uncommonly’ work”? She would wriggle with glee, embrace me and say encouragingly, “I never would have found that!”

 

And so we settled into jointly probing Sam’s consciousness. We work independently on the puzzle and then, when we are both exhausted from the effort, we combine words. We have become familiar with Sam’s quirks. He seems to like Mexican and Indian foods, and we have learned his preferred spellings of Yiddish words. He takes “boho” and “loco” but insists that “yoyo” is hyphenated and therefore out of bounds. He can be latitudinous about spelling, taking both “yech” and “yecch,” but sometimes his selection criteria completely baffle us. We forgive him when the last puzzle piece clicks into place. We share an appreciative smile and shrug, “Dunno.” Some days, it is enough if Sam’s puzzle considers us a “genius;” other days, we conclude that we are within reach of Queen Bee and redouble our efforts.

 

After a few months, I noticed that my wife sometimes gets angry at Sam. “I hate it when he puts an “i” in the middle,” she remarked one morning, quite bitterly. I clucked my tongue and agreed. More recently, it seems Sam can do nothing right by her. She hates it when there are too few words, when there are too many vowels, when there is a “k” without a “c” or a “g” without an “h.” One night as we were falling asleep, after a white-knuckled struggle to make it to “genius,” my wife practically hissed, “Would it kill him to give us an ‘s’?”

 

These days, I’m feeling pretty good about having Sam in our lives. Working on Spelling Bee is one or our common projects. We both have independent careers, and hers involves a lot of confidential information. Much of her work consists of interactions and experiences that she cannot tell me about, and my life as a professor is fulfilling for me but not exactly action-packed during COVID, since I don’t interact with my colleagues very often. Neither professional ethics nor rectitude would stop me from blabbing, but these days, I just don’t have any gossip to share with her.

 

On good days, Sam is a pal. We have the satisfaction of completing a project. We feel good about ourselves when we make it to genius and great about ourselves when we hit Queen Bee. Along the way, we can share a chuckle over our pal’s foibles. “Ratatat” again! On bad days, my wife despairs. “I think I’m going to take a break from this puzzle for a while,” she threatens.

 

Don’t worry, Sam. I’ve got your back.