ContractsProf Blog

SCOTUS Justices Bound by the Law of Contracts, Says Stephen L. Carter

Writing over at Bloomberg, ContractsProf Stephen L. Carter (right) argues that Justice Breyer cannot un-resign now that Justice Ketanji Brown Jackson (both below, left) has been confirmed.   The issue arises because of Justice Breyer's somewhat unusual decision to announce his retirement during the Supreme Court's term while stating that he would remain on the Court until a successor could be confirmed.  We all assume that Justice Breyer will step down once the Court completes its work in June.  But what if Justice Breyer says, "JK!"?

Professor Carter maintains that, as a matter of contracts law, it is now too late for Justice Breyer to change his mind.  He reviews some possible precedents for the current situation, but they are inconclusive, as constitutional history often is.  Along comes contracts law to the rescue.

A resignation is an offer to modify a contract of employment by terminating employment.  Once that offer is accepted, like any other contractual offer, it cannot be retracted.  The near-unanimous rule is that once a replacement has been named, the resigning employee cannot retract, and this is equally true in a case such as Justice Breyer's where the employee names some future date of resignation.

As a matter of constitutional law, federal judges cannot be removed, except by impeachment.  Nonetheless, Professor Carter maintains, a voluntary resignation is binding for a judge or justice, just as it would be for any other government employee.  This rule just makes sense, as there have been substantial costs incurred in reliance on the promise.

I'm not sure whether I find this argument convincing, even though I agree with Professor Carter that this is the way things should work.  I also agree with his assessment that the issue is unlikely to arise because Justice Breyer will undoubtedly step aside as he promised.  It would be nice to put the question to the test and have it resolved as Professor Carter suggests, if only so that I could immediately Tweet at Eric Segall, "See, the Supreme Court is a court, and it is bound by legal rules; specifically, the law of contracts!"

[Allegedly] Corrupt Government Contracts in Oklahoma

As reported here on nondoc.com, Oklahoma's Department of Tourism and Recreation has cancelled its contract with Swadley’s Foggy Bottom Kitchen, which provides food service in Oklahoma state parks “due to suspected fraudulent activity and questionable business practices.”  More specifically, in its termination letter, the Department noted that Swadley's seemed to be engaged in "highly questionable billing, invoicing, and record keeping practices."

Swadley's insists that it has done nothing wrong and that it has cooperated with state employees all along . Swadley's cause was not furthered when a 2018 video surfaced in which Swadley's founder Brent Swadley states, “I bootlegged barbecue. I wouldn’t be where I’m at today if I followed by the rules and satisfied all the permits and all the legalities and stuff out there. Sometimes you’ve just got to go out there and do it and don’t worry about it.”

Swadley's won the contract to provide food services in Oklahoma's state parks after a bid procedure in which it was the only bidder, and the reporting suggests that the terms of the contract changed significantly in Swadley's favor after it was awarded the contract.  Swadley's was allegedly paid $17 million in management fees and renovation costs, and there are suggestions that the  Department had not engaged in adequate oversight.  Swadley's was paid $1.3 million in management fees alone, a marked increase from the $0 paid to previous operators.  

In the meanwhile, the state is scrambling to provide food service and catering in its state parks.  You do not want to be around a hungry Oklahoman who can't find a barbecue joint.

Fictosexualism and Contracts

The New York Times had some fascinating reporting this weekend about "fictosexuals" in Japan.  There are people who fall in love with and even "marry" fictional characters.  I am adopting this term "fictosexual" because, according to The Times, this is how this group of people refers to themselves.  I'm not sure the term is really right.  That is, I do not know whether the relationships formed with fictional characters are about sex.  I think they are more likely about love.  Animeophiles?

The story focused on, Akihiko Kondo, a 38-year-old man who staged a marriage with Hatsune Miku (featured in the image at right), a "turquoise-haired, computer-synthesized pop singer," whose image has adorned tricked-out motorcycles and race cars.  The Times story features Mr. Kondo in multiple pictures with a life-sized doll of Hatsune Miku, as well as his apartment, in which he keeps a collection of Hatsune Miku dolls and plush toys. 

Mr. Kondo credits his love for this fictional character with pulling him out of a depression induced by bullying that he experienced at work in 2008.  He makes a strong case for the advantages of fictional beloveds: "She’s always there for him, she’ll never betray him, and he’ll never have to see her get ill or die."  

For women who become fictosexual, there are numerous appeals.  There is a community of people who love particular characters, and according to Agnès Giard, a researcher at the University of Paris Nanterre, quoted in the Times article, fictional marriages can be an empowering "way to challenge gender, matrimonial and social norms.”

Contracts make all such things possible.  In Tokyo, two districts have developed that cater to the needs of the fictosexual community.  As The Times explains

Fans can buy love letters from their crushes, reproductions of their clothes and even scents meant to evoke their presence. Hotels offer special packages, featuring spa treatments and elaborate meals, for people celebrating their favorite character’s birthday. And on social media, people post photos, art and mash notes promoting their “oshi” — a term widely used by Japanese fans to describe the objects of their affection.

In short, this is a specialized, but highly-developed market.  It illustrates a feature of contracts that attracts and repels.  Contracts law, outside of the illegality and the more nebulous realm of public policy, does not judge.  The common law of contracts eschews punitive damages because, as Judge Posner admonishes in trochaic pentameter, "Let Us Never Blame a Contract Breaker."  If people want to maximize their happiness, contracts law comes along and says, "How can I be of service?"  

Mr. Kondo invited friends and co-workers to his wedding ceremony.  All declined to attend, but 39 people, "largely strangers and online friends" showed up.  Some object that, under the Japanese constitution, marriage requires the consent of both parties, and a fictional character cannot give consent.  Mr. Kondo takes this objection seriously enough that he posted a video of his marriage proposal on Twitter.   I don't speak or read Japanese, but the Twitter translation and her body language suggest that she is content.  

While the humans who fall in love with fictional characters develop genuine emotional attachments, the Times article does not explore the one-sidedness of the relationship, aside from a passing statement of one fictosexual man, who misses "being touched."  I wonder what thoughts would come to mind if one presented fictosexuals with Auden's The More Loving One, in which he ruminates on his one-sided love of the starry heavens.  They might find that they agree with Auden's argument that on earth,

. . . indifference is the least
We have to dread from man or beast. 

And conclude that

If equal affection cannot be,
Let the more loving one be me.

The wonderful thing about the poem, and why I replay it endlessly in my head, is its undecideability.  Auden opens up a universe of thought and resolves nothing.  In that space, one can think about the possibilities and limitations of fictosexual love.

Tuesday Top Ten - Contracts & Commercial Law Downloads for April 26, 2022

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 25 Feb 2022 - 26 Apr 2022

Rank	Paper	Downloads
1.	The Limitations of Privacy Rights Daniel J. Solove George Washington University Law School	936
2.	Breached! Why Data Security Law Fails and How to Improve It (Chapter 1) Daniel J. Solove and Woodrow Hartzog George Washington University Law School and Northeastern University School of Law and Khoury College of Computer Sciences	524
3.	Probabilistic Settlement Finality in Proof-of-Work Blockchains: Legal Considerations Hossein Nabilou University of Amsterdam, Amsterdam Law School	460
4.	Christianity and Equity Samuel L. Bray and Paul B. Miller Notre Dame Law School and Notre Dame Law School	422
5.	An Overview of Privacy Law in 2022 Daniel J. Solove and Paul M. Schwartz George Washington University Law School and University of California, Berkeley - School of Law	377
6.	Digital Assets: A Call To Action Johan David Michels, Sharon Hartung and Christopher Millard Queen Mary University of London, School of Law - Centre for Commercial Law Studies, affiliation not provided to SSRN and Queen Mary University of London, School of Law - Centre for Commercial Law Studies	284
7.	Nonparty Interests in Contract Law Omri Ben-Shahar, David A. Hoffman and Cathy Hwang University of Chicago Law School, University of Pennsylvania Carey Law School and University of Virginia School of Law	237
8.	Where Nonprofits Incorporate and Why It Matters Peter Molk University of Florida Levin College of Law	227
9.	The Law and Macroeconomics of Custody and Asset Segregation Rules: Defining the Perimeters of Crypto-Banking Hossein Nabilou University of Amsterdam, Amsterdam Law School	206
10.	Rational Contract Design Naveen Thomas New York University School of Law	150

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 25 Feb 2022 - 26 Apr 2022

Rank	Paper	Downloads
1.	Probabilistic Settlement Finality in Proof-of-Work Blockchains: Legal Considerations Hossein Nabilou University of Amsterdam, Amsterdam Law School	460
2.	Nonparty Interests in Contract Law Omri Ben-Shahar, David A. Hoffman and Cathy Hwang University of Chicago Law School, University of Pennsylvania Carey Law School and University of Virginia School of Law	237
3.	Rational Contract Design Naveen Thomas New York University School of Law	150
4.	How to Interpret a Vending Machine: Smart Contracts and Contract Law Gregory Klass Georgetown University Law Center	143
5.	Towards a Harmonized Theory of the Law Governing the Arbitration Agreement Prof Maxi Scherer and Ole Jensen Queen Mary, University of London, Centre for Commercial Law Studies and Independent	129
6.	Current Issues in Unjust Enrichment 2022: Failure of Basis, Contractual Rights to Enrichment, Mistake of Law and Limitation Periods Charles Mitchell University College London - Faculty of Laws	127
7.	Contract Remedies for New Economy Collaborations Alan Schwartz and Simone Sepe Yale Law School and Yale Law School	119
8.	A Theory of Frustration and Its Effect Sagi Peari and Zamir Golestani The University of Western Australia and University of Western Australia Law School, Perth, Australia	103
9.	The Maze of Contemporary Contract Theory and a Way Out James Gordley and Hao Jiang Tulane University Law School and Bocconi University - Department of Law	97
10.	Rules vs. Standards in Private Ordering Tomer Stein Stetson University College of Law	84

 

Mo' Surrogacy Contracts, Mo' Problems

We have written periodically about surrogacy contracts, most recently here.  The potential problems that can arise in such contracts are innumerable, and as the regulations vary state-by-state, and as many surrogacy relationships cross state and even national lines, the potential problems multiply.

The latest issue that has grabbed attention is that of a pro-life surrogate, Melissa Cook, who was bearing three embryos when the man who was to serve as father to the children told her that he was out of money and that she should abort one.  As The Altantic reported back in 2016, Ms. Cook wanted to carry all three fetuses to term, adopt the third child, and collect her surrogacy fee.  She filed suit, alleging that California's surrogacy laws violate the U.S. Constitution's Equal Protection and Due Process clauses.  

Six years later, all legal avenues exhausted, Ms. Cook is still "consumed by anxiety" about the boys, according to The Economist.  She believes that the surrogacy broker who arranged the contract might have been unscrupulous in not properly vetting the father before allowing the agreement to be executed.   But as Katie O'Reilly pointed out in The Atlantic six years ago, citing CUNY's Elizabeth Reis, "There’s no way to legislate people’s emotional responses."  Among other things, the law can't account for how all the people involved will feel about "reductions," the practice of aborting a fetus when a surrogate becomes pregnant with twins, triplets, or more, in the interest of enhancing the likelihood that the fetuses will survive to delivery in good health.  This is a major issue because, as The Economist reports, "more than half the babies born in America to gestational surrogates are twins or triplets" 

As states struggle to regulate the surrogacy market, couples seeking surrogate mothers look abroad.  Some poorer states (Cambodia, India, Thailand) now prohibit surrogacy contracts.  Pre-war Ukraine was a surrogacy haven, with 2000-2500 children born there through surrogacy annually, according to The Guardian.  As we learned from Jeff Goldblum, "Life finds a way," especially if contracts are available to help facilitate mutually beneficial transactions.

H/T Michael Gibson

Weekend Frivolity: The OCU Law Cardozo Cup

At my old law school, we had an annual softball tournament.  The 1Ls played the 2Ls.  The winner of that game played the 3Ls.  The 3Ls cheated, and so they won and got to play the faculty/staff team.  By the time I arrived, the faculty/staff team had to be supplemented with alumni, and still we struggled.  Our best shot was to hope that the keg of beer that the SBA provided for the occasion leveled the playing field.  The winner would have their team name inscribed on the Cardozo Cup (left).  

But here at my new law school, we have started a new tradition.  For the First Annual Cardozo Cup Competition, I asked my contracts students to create an original work of art in honor of Judge Cardozo.  The winner was awarded the new cup (right) this week.  The Law School Dean stepped up to announce the winner.  The academic fellows, who have been helping my students throughout the year, brought in the trophy and handed it to the winner, who was cheered by his classmates.

It was a great competition, with entries spanning the visual and language arts. The students voted, and it was a close but uncontested election.  The winner, 1L Ethan Tourtellotte (pictured below, left), composed a poem in honor of Judge Cardozo.  Other leading contenders were 1L Blake Bush, who composed a noir short story with Judge Cardozo as the lead detective, and 1L Tom Taylor, who composed the Van Gogh inspired image featured below, right.

I am proud of my creative students and happy that they share my enthusiasm for Judge Cardozo, the William Faulkner of the U.S. common law.

 

 

 

 

 

 

 

 

VAP Position at Duquesne Law

Apply here.

Duquesne University School of Law, located in Pittsburgh, Pennsylvania, invites applications and nominations for a Visiting Assistant Professor of Law to teach during the 2022-2023 academic year. This position is a nine-month visiting position, beginning in the summer of 2022 with the possibility of one additional nine-month term. The successful candidate will be responsible for teaching three courses: one course during the fall semester and two courses the spring semester. The successful candidate will have ample time to focus on scholarship, be afforded to the Law School's library and related resources, have no administrative or faculty committee duties.

DUTIES AND RESPONSIBILITIES:

Our curricular needs include: Business Associations, Property, Contracts, Emerging Technologies, Intellectual Property, Health Law, and related elective courses. Candidates must be available to teach in-person, although the public health situation may require occasional remote and/or hyflex teaching.

REQUIRED QUALIFICATIONS:

Juris Doctor from an ABA-accredited law school.

PREFERRED QUALIFICATIONS:

Experience teaching in legal education.

Evidence of significant practical experience in an area of curricular need.

Alternately, the successful candidate may possess any equivalent combination of experience and training, which provides the knowledge, skills and abilities required to perform the essential job functions. This includes, but is not limited to, the following:

Commitment to the University's values of diversity, equity and inclusion, and recognition of the importance of treating each individual with dignity and respect consistent with the University's Mission. Demonstrated experience with, and understanding of, the broad diversity of the University community (students, faculty, staff and others).

Ability to establish and maintain effective working relationships with the University Community.

Ability and willingness to contribute actively to the mission of the University and to respect the Spiritan Catholic identity of Duquesne University. The mission is implemented through a commitment to academic excellence, a spirit of service, moral and spiritual values, sensitivity to world concerns, and an ecumenical campus community.

Tuesday Top Ten - Contracts & Commercial Law Downloads for April 19, 2022

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 18 Feb 2022 - 19 Apr 2022

Rank	Paper	Downloads
1.	Breached! Why Data Security Law Fails and How to Improve It (Chapter 1) Daniel J. Solove and Woodrow Hartzog George Washington University Law School and Northeastern University School of Law and Khoury College of Computer Sciences	506
2.	Probabilistic Settlement Finality in Proof-of-Work Blockchains: Legal Considerations Hossein Nabilou University of Amsterdam, Amsterdam Law School	444
3.	Christianity and Equity Samuel L. Bray and Paul B. Miller Notre Dame Law School and Notre Dame Law School	418
4.	Digital Assets: A Call To Action Johan David Michels, Sharon Hartung and Christopher Millard Queen Mary University of London, School of Law - Centre for Commercial Law Studies, affiliation not provided to SSRN and Queen Mary University of London, School of Law - Centre for Commercial Law Studies	264
5.	Nonparty Interests in Contract Law Omri Ben-Shahar, David A. Hoffman and Cathy Hwang University of Chicago Law School, University of Pennsylvania Carey Law School and University of Virginia School of Law	228
6.	The Law and Macroeconomics of Custody and Asset Segregation Rules: Defining the Perimeters of Crypto-Banking Hossein Nabilou University of Amsterdam, Amsterdam Law School	195
7.	Forced Remote Arbitration David Horton University of California, Davis - School of Law	161
8.	How to Interpret a Vending Machine: Smart Contracts and Contract Law Gregory Klass Georgetown University Law Center	140
9.	Rational Contract Design Naveen Thomas New York University School of Law	140
10.	Managerial Contracting: A Preliminary Study Lisa Bernstein and Brad Peterson University of Chicago - Law School and Mayer Brown LLP	128

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 18 Feb 2022 - 19 Apr 2022

Rank	Paper	Downloads
1.	Probabilistic Settlement Finality in Proof-of-Work Blockchains: Legal Considerations Hossein Nabilou University of Amsterdam, Amsterdam Law School	444
2.	Nonparty Interests in Contract Law Omri Ben-Shahar, David A. Hoffman and Cathy Hwang University of Chicago Law School, University of Pennsylvania Carey Law School and University of Virginia School of Law	228
3.	Forced Remote Arbitration David Horton University of California, Davis - School of Law	163
4.	How to Interpret a Vending Machine: Smart Contracts and Contract Law Gregory Klass Georgetown University Law Center	140
5.	Rational Contract Design Naveen Thomas New York University School of Law	140
6.	Managerial Contracting: A Preliminary Study Lisa Bernstein and Brad Peterson University of Chicago - Law School and Mayer Brown LLP	128
7.	Current Issues in Unjust Enrichment 2022: Failure of Basis, Contractual Rights to Enrichment, Mistake of Law and Limitation Periods Charles Mitchell University College London - Faculty of Laws	119
8.	Transatlantic Data Transfer Compliance W. Gregory Voss TBS Business School	119
9.	Towards a Harmonized Theory of the Law Governing the Arbitration Agreement Prof Maxi Scherer and Ole Jensen Queen Mary, University of London, Centre for Commercial Law Studies and Independent	118
10.	Contract Remedies for New Economy Collaborations Alan Schwartz and Simone Sepe Yale Law School and Yale Law School	111

 

The Ninth Circuit and Online Contract Formation

The law of wrap contracts continues to evolve.  Last week, the Ninth Circuit issued a ruling in a case involving the Telephone Consumer Protection Act.  In Berman v. Freedom Financial Network, a three-judge panel affirmed the district court’s order denying the defendants’ motion to compel arbitration.  The informative concurring opinion, written by an International Trade Judge sitting by designation, may prove to be an important one which provides much needed guidance regarding the law of online contract formation in California.

The plaintiffs visited two different websites, each operated by the defendant Fluent, a digital marketing company that generates leads by collecting data from its website visitors.  Fluent offers visitors gift cards and free product samples in exchange for contact information and answers to survey questions.  It then uses this information in target ad campaigns for its clients. 

Hernandez visited a website that she had previously visited and was greeted with the first image (Figure 1).  I’m not sure whether you can see the phrase “I understand and agree to the Terms & Conditions which includes mandatory arbitration and Privacy Policy" from the screenshot, but it is between the “comparatively large box displaying the zip code and the large ‘green’ continue button” in “tiny gray font” rather than in blue, “the color typically used to signify the presence of a hyperlink.”

 

The other plaintiff, Russell, visited a website from a mobile phone which is the second image (Figure 2). The notice to the terms and conditions is “sandwiched between the buttons allowing Russell to select her gender and the large green ‘continue’ button” and is in “tiny gray font” which states “I understand and agree to the Terms & Conditions which includes mandatory arbitration and Privacy Policy.” 

The plaintiffs received phone calls and text messages which they claimed violated the TCPA.  The defendants moved to compel arbitration, arguing that by clicking on the “continue” buttons, the plaintiffs had agreed to the terms and conditions, including the mandatory arbitration provision.

The district court denied the motion, finding that the content and design of the website did not conspicuously indicate to users that clicking the “continue” button meant agreeing to the terms and conditions.

The Ninth Circuit agreed, noting that there was a “spectrum” of contracts formed online with “clickwrap” agreements on one end and “so-called ‘browsewrap’ agreements” on the other.  The Ninth Circuit cited a recent California case, Sellers v. Just Answer LLC, that because “online providers have complete control over the design of their websites,” the onus is on them to put users on notice.  Significantly, the Ninth Circuit stated that the inquiry notice standard “demands conspicuousness tailored to the reasonably prudent Internet user, not to the expert user” and that the “design of the hyperlinks must put such a user on notice of their existence.”  Furthermore, the manifestation of assent must be “unambiguous” and that merely clicking on a button, viewed in the abstract, does not signify assent; the user must be “explicitly advised that the act of clicking will constitute assent” to the T & Cs.

The defendants objected that the textual notice explicitly referenced mandatory arbitration but the court stated: 

“This argument is unavailing, as it fails to appreciate the key issue in this appeal.  The question before us is not whether Hernandez and Russell may have been aware of the mandatory arbitration provision in particular, but rather whether they can be deemed to have manifested assent to any of the terms and conditions in the first place.  Because the textual notice was not conspicuous and did not explicitly inform Hernandez and Russell that by clicking on the ‘continue’ button they would be bound by the terms and conditions, the presence of the words ‘which includes mandatory arbitration’ in the notice is of no relevance to the outcome of this appeal.”

While the majority declined to decide whether New York or California law governed because the law dictated the same outcome, Judge Baker found it important to decide the choice-of-law issue and concluded that California law applied.  Judge Baker, the International Trade Judge, concurring in the decision, stated that under California law ‘sign-in wrap’ agreements “tempt fate.”

Judge Baker noted that the California Supreme Court had yet to decide the issue of online contract formation, and relied upon two appellate court cases, Long v. Provide Commerce, 200 Cal. Rptr. 3d 117 (Ct. App. 2016) and Sellers v. Just Answer, 289 Cal. Rptr. 3d 1 (Ct. App. 2021). 

Judge Baker carefully analyzed these two cases and concluded that, “pending further word from the California appellate courts, browsewrap agreements are unenforceable per se:  sign-in wrap agreements are in a gray zone; and clickwrap and scrollwrap agreements are presumptively enforceable.”  In the “gray zone” of sign-in wraps, enforceability requires “conspicuous textual notice that completing a transaction or registration signifies consent to the site’s terms and conditions.” Conspicuousness depends upon several factors including “transactional context, the notice’s size relative to other text on the site, the notice’s proximity to the relevant button or box the user must click to complete the transaction or register for the service, and whether the notice’s hyperlinks are readily identifiable.  A court must consider “all these factors together.”

Judge Baker then painstakingly examined the design of the notice and concluded that it was “insufficiently conspicuous.”  Furthermore, even if notice is conspicuous, the user must manifest “unambiguous” assent” which, in this case, required that the notices “expressly advise users that clicking ‘Continue’ signifies assent” to the arbitration provisions and the other terms and conditions.  Thus, even if notice is conspicuous, the notice is not binding as a contract unless there is an “express warning” that a given action manifests assent to terms and the user takes that specified action. 

My Final Post on the Tom Brady Football

Thanks to one of my students, I just learned that the sale of Tom Brady's "final touchdown football" has been voided.  

If you've been following this blog's coverage of the issue, the arguments of Jeffrey Lichtman, the attorney for the anonymous buyer,  may sound familiar to you.  The blog is not cited, but our digital fingerprints are all over this W.  Lelands had to avoid the sale because their description of the football became inaccurate.  As UPI reported,

"At the time, it was an honest description," Lichtman said. "Had they described it as his last one, as of now, there would have been little recourse. But the way they described it, it was definitive.

Clearly, our legal reasoning carried the day.  It is also possible that, given all the publicity surrounding the ill-fated auction, demand for the football has only increased.  The ball was returned to the consignor, and it will now be subject to a private sale, with "multiple parties" expressing interest in the ball.

Given this outcome, perhaps we should create an NFT of this final post* on the Tom Brady football.  In honor of the event it commemorates, bids should start at $518,000.

H/T to OCU 1L Chad Smith!

* NOT A WARRANTY.  WE MAY COME OUT OF OUR SELF-IMPOSED TOM BRADY FOOTBALL RETIREMENT AT ANY TIME

New Scholarship on Frustration and COVID

COVID has caused a great deal of frustration globally.  It has also frustrated contractual performance. 

Over on SSRN, Sagi Peari and Zamir Golestani have posted A Theory of Frustration and Its Effects

Here is the abstract:

One of the key legal questions that COVID-19 has raised relates to the status of the traditional contractual doctrine of frustration. The pandemic and the ongoing lockdowns across the globe have made it difficult for many contracts to perform. At the same time, there is a deep doctrinal and conceptual confusion with respect to the very essentials of this doctrine and its remedy - i.e., what happens after an adjudicative tribunal declares that a given contract has been frustrated. The paper offers a unified conceptual account of the frustration doctrine and claims that both the doctrine and its remedy crystallize a single unifying idea.

Aristotelian Categories and the Contracts Doctrine of Mistake

I have been thinking about Aristotle more than usual, and more than I care to do, because I have fallen down a rabbit hole, Peter Adamson's delightful podcast, History of Philosophy Without Any Gaps.  It was great fun, and then we got to Aristotle.  Now, it's sometimes fun, but also a bit of a slog.  I'm not sure if I'm going to make it to the Renaissance.  I may bolt and try my hand at Indian or African philosophy.

To be clear, I don't much care for Aristotle.  Not one bit.  As a result, I know and understand very little of Aristotle's philosophy but, as the Supreme Court once said of pornography, I know it when I see it.  

And I always see it when I teach mistake, because the old chestnuts, Sherwood v. Walker and Wood v. Boynton, seem to me to be based on Aristotelian distinctions between accidental (value) and essential qualities.  But both seem to me to get the analysis exactly wrong.  I am happy to have discovered that I am not alone in remarking on the Aristotelian nature of the inquiry.  Robert Birmingham did so in a philosophical reflection in the form of an essay in 1987.  In a 1999 article, Nascent Modernity in the Case of Sherwood v. Walker -- An Intertextual Proposition (35 Willamette L. Rev. 315), Alani Golanski expressed my view precisely.  These courts engaged in Aristotelian terminology but got the analysis completely wrong.  

[T]he Sherwood court misused the Aristotelian vocabulary. In those terms, it was precisely the “substance” of the thing for which Sherwood and Walker had bargained about which there was no mistake. In other words, as understood by Aristotle, examples of substance are “man,” “horse,” or “cow.” The parties in Sherwood knew they were dickering over a cow and therefore fully appreciated the Aristotelian substance of the thing.

. . . In Aristotle's scheme, an accident may or may not belong to a given thing. For example, a horse may be “awake” or “asleep.” “Likewise also whiteness; for there is nothing to prevent the same thing being at one time white and at another not white.” More to the point, a cow may be at one time “barren” and at another “fertile.”

And so, when I think about Sherwood and Boynton, I find them wrongly decided in their own Aristotelian terms every time.  Sherwood was about a cow, and the "cowness" of Rose 2d of Aberlone was never at issue.  There was no mistake as to the essence of the consideration and so, by the reasoning of that court, recourse to mistake doctrine should have been unavailing.  On the other hand, a topaz and a diamond are different things, and so the mistake in Boynton went to the essence of the matter, not to its accidental qualities.  The Eagle Diamond should have been returned to the finder.

 

I love these cases, but hate both their reasoning and their results.  Perhaps I could live in an Aristotelian world if those courts would apply that reasoning correctly.  But I prefer to live in the world of the Restatement, in which liability in these cases tends to come down to the question of who bore the risk of the mistake.

 

Tuesday Top Ten - Contracts & Commercial Law Downloads for April 12, 2022

 

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 11 Feb 2022 - 12 Apr 2022

Rank	Paper	Downloads
1.	Breached! Why Data Security Law Fails and How to Improve It (Chapter 1) Daniel J. Solove and Woodrow Hartzog George Washington University Law School and Northeastern University School of Law and Khoury College of Computer Sciences	488
2.	Christianity and Equity Samuel L. Bray and Paul B. Miller Notre Dame Law School and Notre Dame Law School	410
3.	Digital Assets: A Call To Action Johan David Michels, Sharon Hartung and Christopher Millard Queen Mary University of London, School of Law - Centre for Commercial Law Studies, affiliation not provided to SSRN and Queen Mary University of London, School of Law - Centre for Commercial Law Studies	225
4.	Nonparty Interests in Contract Law Omri Ben-Shahar, David A. Hoffman and Cathy Hwang University of Chicago Law School, University of Pennsylvania Carey Law School and University of Virginia School of Law	222
5.	Forced Remote Arbitration David Horton University of California, Davis - School of Law	151
6.	The Law and Macroeconomics of Custody and Asset Segregation Rules: Defining the Perimeters of Crypto-Banking Hossein Nabilou University of Amsterdam, Amsterdam Law School	143
7.	How to Interpret a Vending Machine: Smart Contracts and Contract Law Gregory Klass Georgetown University Law Center	134
8.	Managerial Contracting: A Preliminary Study Lisa Bernstein and Brad Peterson University of Chicago - Law School and Mayer Brown LLP	124
9.	Rational Contract Design Naveen Thomas New York University School of Law	118
10.	Current Issues in Unjust Enrichment 2022: Failure of Basis, Contractual Rights to Enrichment, Mistake of Law and Limitation Periods Charles Mitchell University College London - Faculty of Laws	117

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 11 Feb 2022 - 12 Apr 2022

Rank	Paper	Downloads
1.	Nonparty Interests in Contract Law Omri Ben-Shahar, David A. Hoffman and Cathy Hwang University of Chicago Law School, University of Pennsylvania Carey Law School and University of Virginia School of Law	222
2.	Forced Remote Arbitration David Horton University of California, Davis - School of Law	151
3.	How to Interpret a Vending Machine: Smart Contracts and Contract Law Gregory Klass Georgetown University Law Center	134
4.	Managerial Contracting: A Preliminary Study Lisa Bernstein and Brad Peterson University of Chicago - Law School and Mayer Brown LLP	124
5.	Rational Contract Design Naveen Thomas New York University School of Law	118
6.	Current Issues in Unjust Enrichment 2022: Failure of Basis, Contractual Rights to Enrichment, Mistake of Law and Limitation Periods Charles Mitchell University College London - Faculty of Laws	117
7.	Towards a Harmonized Theory of the Law Governing the Arbitration Agreement Prof Maxi Scherer and Ole Jensen Queen Mary, University of London, Centre for Commercial Law Studies and Independent	114
8.	Contract Remedies for New Economy Collaborations Alan Schwartz and Simone Sepe Yale Law School and Yale Law School	111
9.	Transatlantic Data Transfer Compliance W. Gregory Voss TBS Business School	108
10.	A Fall Between Two Stools: The Supreme Court Confines Lawful Act Duress Harry Sanderson and Henry Cooney Brasenose College Oxford and The University of Western Australia	10

Why Take Attendance? Part II

In yesterday's post, I introduced the topic of why I take attendance.  I began with a caveat, which boils down to, I might feel differently if I taught at a different kind of school.

Today, I offer three responses to what I call the libertarian and the anti-authoritarian/Foucaultian arguments against taking attendance.

The first and least satisfying (but also not as dumb as it seems) is that I take attendance because the ABA requires me to do so.  The second and third turn on what I think is an unfair and implausible imputation regarding the motivations of faculty members who take attendance.   That is, people seem to think that law professors who take attendance do so in order to assert control over or discipline students.  I don't know why other professors take attendance, but control and discipline are not my primary motivators.

The ABA requires that law schools have an attendance policy (Standard 308a).  That Standard is very vague, but most law schools (in my experience) adopt a requirement that faculty must take attendance and must require that students attend 75% or 80% of class sessions.  Also in my experience, skills and experiential learning courses are, for understandable reasons, less forgiving about absences.  I have no idea why the ABA has its policy, but I know that, as a result of the ABA's policy, there is a person at every law school with a title like "Dean of Students" or "Assistant Dean for Student Affairs," and that person spends a lot of their time tracking down students and trying to figure out why they aren't coming to class.  I make that person's job a lot easier when I take attendance and shoot an e-mail to the appropriate administrator saying, "So and so has missed two classes and didn't turn in their last assignment.  Do you know what's up with them?"  Such calls can lead to early interventions that help the student and thus help the administrator as well.  The worst that can happen is that a student got pestered.  I'll take that risk.  

One libertarian perspective argues that our students are paying us for a service, and they are free to make as much or as little use of the service for which they are paying as they choose.  The analogy offered was a gym membership.  One's gym does not have an attendance policy.  Well, what if they did?  Actually, my gym offers a discount if you use it more.  I like the model.  Our students learn of the attendance policy during orientation if not sooner.  Even libertarian students can constrain their wills through private legislation.

But ultimately I just reject the notion that my relationship with my students is akin to that of a service-provider.  I am building a life-long relationship with my students, or at least I hope to.  I keep in touch with some of my law school professors.  I have in recent years reached out to two of my college professors.  Both remembered me (from the 1980s!).  Both were glad to hear from me, but they shaped my sensibilities and my life journey in ways that I can barely articulate much less adequately acknowledge.  I can't say that about any of the people with whom I have interacted in the many gyms in which I have engaged in ritualistic forms of exercise. 

Moreover, I owe duties as an educator to constituencies other than my students.  Law schools fail.  I've seen it happen.  That's something I never want to experience again.  Even if I weren't committed to my students' success for their sake, I would be committed to it for the sake of my institution.  I also owe more attenuated but still significant duties to the legal profession, to my students' future clients, to my law school's alumni and supporters, and to the parents and others who are supporting students financially and through their encouragement.  My students and I are not ships passing in the night, or at least I hope that we are not.  The cash nexus does not define our relationship.  It's hard for me to imagine that any conscientious law professor would think that it does.

Finally, often students are not paying their own way or they at least have help.  They have scholarship money or, if they attend a state institution, part of their tuition might be underwritten by tax dollars.  Early in my teaching career, I had a good friend who taught at a community college in South Carolina.  Tuition was almost nothing.  One of her feckless students tried to make the "I'm paying for this education and so . . .  " argument.  She responded, "Actually, my tax dollars are paying for your education, and right now, I'm not getting my money's worth."  Nothing about that conversations was right, but I still admire her to this day for that snappy comeback.  

To the Foucaultian/anti-authoritarians, I concede that in taking attendance and having an attendance policy that can -- in rare cases -- penalize students for poor attendance, I am engaged in policing and social control of my students in a very broad sense.  But my relationship to my students is not that of the police to potential lawbreakers, nor is it that of the watchful state to its law-abiding citizens who are law-abiding in part because their conduct is shaped by their constant awareness that they are being or could be under surveillance at any time.  My relationship to my students is also not that of a parent to a child. 

And yet it is also not true that my relationship to my students bears none of the characteristics of the police to the criminal, the state to its citizens, or the parent to a child.  My students are mostly still emerging adults, which means that they are a little less boundedly rational than I am.  I want what is best for them.  I have views about what is best for them.  I also respect their autonomy.  They will make their own decisions, but I will contribute to the environment in which they make those decisions in (at least) one small way -- by encouraging them to come to class.  

To my colleagues at other law schools who say that they will not police their students, I would like to know how you avoid doing so and still perform your role as a law professor.  The minimal policing I do by taking attendance is nothing compared with the policing I do by grading them.   I suspect that my non-attendance-taking colleagues also grade their students and thus serve as the guardians of the path into the profession.  There is no shame in it. Not every admitted student will become a lawyer.  Perhaps others want to throw open the profession to all comers.  I don't have to have a view on that subject.  The bar exam exists, and it will keep some students out.  Performance in first-year contracts is a pretty robust predictor of likely success on the bar.  I happily provide to students, whom I recognize as independent agents, a useful datapoint to consider as they make choices about re-enrollment.

But returning to my earlier point, neither my attendance policy nor my custom of giving students grades exist to punish students.  Both are structures to help guide them along a path that they have chosen.  Faculty members who do not take attendance miss an opportunity to check in with students as they proceed along that path, and their failure to take attendance creates more work for those who do.  It is not uncommon that when I e-mail a dean of students or student affairs coordinator, my report is the first they have heard of the student's absence.  When a student who hears nothing from a professor when they miss multiple class sessions, does that silence communicate respect for students' autonomy or indifference?  

It is no doubt true that some students regard themselves as adults who resent calls from the law school when they are dealing with some crisis.  "Professor so-and-so doesn't even take attendance," I have heard them gripe.  I will not disparage a colleague in front of a student.  "I'm sure Professor so-and-so has their reasons."  And that is truly what I believe.  I draw no conclusions about my colleagues' motivations for doing what they do, nor do I assume that my colleagues who do not take attendance care any less about their students than I care about mine. 

But I do want those colleagues to know this: by far the more frequent response I get from the missing students with whom I check in is gratitude.  They are fine.  They don't need anything.  They just had something they had to deal with, and they are grateful to me for checking in and asking, as I usually do, whether there is anything they need to stay on top of the class material.  And then, every once in a while, my intervention with a student in crisis helps them get over that crisis and re-commit to their professional path.  Or perhaps they were always committed, but they were having a personal crisis and they just needed to know that somebody at the law school cared enough to reach out.  

Law students are under an incredible amount of stress.  COVID has not helped.  I don't know how we can know how students whom we do not see are doing if we don't have some means of catching warning signs.

So yes, I take attendance.  Yes, it's a bit paternalistic.  But the alternative seems to me much worse.

Why Take Attendance? Part I

I have recently been struck by some views expressed on Twitter on the subject of law professors who take attendance in class.  These views are passionate, which, given that it is Twitter, may go without saying, but I was nonetheless surprised that people, both law faculty members and law students, are passionately opposed to a practice that I consider a rather ordinary and humdrum part of my job.  Let me just say this up front.  I take attendance because I care about my students and I want them -- every one of them -- to succeed.  

Some of them could succeed without attending regularly.  Most could not, or at least, for most of my students, it would be a big problem if they skipped two weeks of class.  They would be behind, and law school posing the challenges that it does, they would have a hard time catching up.  I can't have one attendance policy for top students and another for the rest.  Moreover, if I didn't take attendance and reach out to student who miss a week of class, students might mistake solicitude for their autonomy for indifference.  I would rather that they resent my meddling than that they grow discouraged and think that their professors and the law school don't care about their well-being.

The objections seem to come from two sources, one libertarian, and the other anti-authoritarian or perhaps Foucaultian.  The libertarian perspective is that law students are adults with agency  who are paying for their education and should be permitted to make their own decisions about their lives.  It is not for us, as law professors to make judgments about the quality of those decisions.  The anti-authoritarian perspective is that we, as faculty members, should not "police" our students.  The Foucaultian perspective, I surmise, links taking attendance with Foucault's critique the modern panopticon state that conducts various forms of surveillance as a means of social control.

I have a caveat here and three responses (in tomorrow's post).   First, the caveat.  I write as someone who teaches (and, other than some brief visiting positions, has always taught) at an unranked law school.  I might develop a different practice if I taught at a more highly-ranked law school.  The student who sat next to me in Civ. Pro. disappeared during our second week discussing the Erie doctrine.  I thought he had dropped out, but I ran into him at a year-end event.  He told me he had just had enough, and more sympathetic I could not be.  He shrugged, "She gave me a B-, and I guess that's fair enough."  I do not doubt for a moment that the gifted person in question is off somewhere living his best life.  In short, I would feel differently about taking attendance if I were confident that my students could miss class and still reach the professional goals that they enrolled in law school to achieve.  

But the bar passage rate in my state on the February bar was 47%.  In Kentucky it was 45%, and in Illinois, it was 43%.  In Tennessee and Wisconsin, it was 41%.   My students need to focus on their studies in order to pass the bar.  My having an attendance policy is not the key to them passing the bar, but if neither I nor any of my colleagues had attendance policies, a lot more of our students would prioritize other things in their lives over coming to class.  And more of them would fail the bar.  They might at that point, regret some of their choices, but by then it would be too late to do anything about it.  Given their investments, both in terms of time and money, I will do everything in my power, even if doing so is a bit paternalistic, to nudge them in directions that the evidence suggests will be in their long-term self interest.

In almost all cases, students who miss a lot of classes will do poorly in my class, and since I teach mostly bar cases, that also means they will be in danger of failing the bar.  At a certain point, I will impose penalties on them for missing classes.  If they are strong students, those penalties are light enough so that I inflict no real harm.  No employer will fail to hire them solely because they got a B+ instead of an A- in Contracts.  But I can't think of an instance in which one of my students has missed enough classes to be penalized and still earned a high grade.  If they are not strong students, the fact that they got a D instead of a C- in Contracts sends an unmistakable message.  Something has to change or they are wasting their time and money undertaking a challenging degree to which they are not devoting adequate time.

The Tweeter who started it all said that they understand that students have more important things going on in their lives that prevents them from coming to class.  I agree.  Sometimes they have work for other classes that is more important, or at least more in need of urgent attention, than attendance in my class.  That's why I allow a certain number of absences and why I never require that students explain their absences.  They are welcome to share with me their reasons for their absences if they wish, but that's just because I care about what is going on in their lives, not because it affects how I treat their absences. 

Law school is professional training.  One aspect of that training is learning how to juggle all of the different things going on in your life, allocating appropriate attention to each.  By providing a clear attendance policy, I enable students to make decisions about how to use their time, knowing all of the consequences.  For almost all of my students, it is never an issue.  They know they need to be in class.  I hope that they enjoy time spent in class or at least know that they are getting something out of time spent in class.  Another aspect of professional training is that the world of work may not embrace the notion of excused absences.  If you miss a filing deadline, the court, agency, potential contracting partner etc. may not extend it.  It really doesn't matter how good your reason was.  My daughter was recently shocked to learn that she would not be considered for a position that she likely would have gotten had she managed to get her application in on time instead of one day late.  I am not shocked, and I wish I had done more to prepare my daughter for that foreseeable consequence of delay.

In tomorrow's post, I take on the libertarian and anti-authoritarian/Foucaultian perspectives.

Two Views of the Bridge to Nowhere

I taught Rockingham County v. Luten Bridge last week.  Barack Richman provides the full story of the case here.  It's a great law story.  For readers unfamiliar with the case, the county contracted with Luten Bridge for the construction of a bridge.  After a change in the make-up of the county's governing body, the county cancelled the contract.  Luten Bridge built the bridge anyway, notwithstanding the fact that the county also decided not to build the road that was supposed to lead to the bridge.

Contracts Profs Nate Oman and John Patrick Hunt provide the following images of the bridge:

Here is the conclusion of Professor Richman's article, for those of you who want to know why the bridge to nowhere is still standing:

Tuesday Top Ten - Contracts & Commercial Law Downloads for April 5, 2022

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 04 Feb 2022 - 05 Apr 2022

Rank	Paper	Downloads
1.	Assembly-Line Plaintiffs Daniel Wilf-Townsend University of Chicago Law School	833
2.	The Cryptic Case of the CryptoPunks Licenses: The Mystery Over the Licenses for CryptoPunks NFTs Edward Lee Chicago-Kent College of Law - Illinois Institute of Technology	748
3.	Breached! Why Data Security Law Fails and How to Improve It (Chapter 1) Daniel J. Solove and Woodrow Hartzog George Washington University Law School and Northeastern University School of Law and Khoury College of Computer Sciences	462
4.	Christianity and Equity Samuel L. Bray and Paul B. Miller Notre Dame Law School and Notre Dame Law School	402
5.	K is for Contract―Why is it, Though? Hanjo Hamann Max Planck Institute for Research on Collective Goods	362
6.	Other Judges' Cases Melissa B. Jacoby University of North Carolina School of Law	353
7.	Choice of Law in the American Courts in 2021: Thirty-Fifth Annual Survey John F. Coyle, William S. Dodge and Aaron D. Simowitz University of North Carolina School of Law, University of California, Davis - School of Law and Willamette University College of Law	298
8.	Nonparty Interests in Contract Law Omri Ben-Shahar, David A. Hoffman and Cathy Hwang University of Chicago Law School, University of Pennsylvania Carey Law School and University of Virginia School of Law	212
9.	Digital Assets: A Call To Action Johan David Michels, Sharon Hartung and Christopher Millard Queen Mary University of London, School of Law - Centre for Commercial Law Studies, affiliation not provided to SSRN and Queen Mary University of London, School of Law - Centre for Commercial Law Studies	208
10.	Varieties of AI Explanations under the Law. From the GDPR to the AIA, and Beyond Philipp Hacker and Jan-Hendrik Passoth European University Viadrina Frankfurt (Oder) - European New School of Digital Studies and European University Viadrina Frankfurt (Oder) - European New School of Digital Studies	188

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 04 Feb 2022 - 05 Apr 2022

Rank	Paper	Downloads
1.	Assembly-Line Plaintiffs Daniel Wilf-Townsend University of Chicago Law School	833
2.	K is for Contract―Why is it, Though? Hanjo Hamann Max Planck Institute for Research on Collective Goods	362
3.	Nonparty Interests in Contract Law Omri Ben-Shahar, David A. Hoffman and Cathy Hwang University of Chicago Law School, University of Pennsylvania Carey Law School and University of Virginia School of Law	212
4.	Forced Remote Arbitration David Horton University of California, Davis - School of Law	142
5.	How to Interpret a Vending Machine: Smart Contracts and Contract Law Gregory Klass Georgetown University Law Center	125
6.	Managerial Contracting: A Preliminary Study Lisa Bernstein and Brad Peterson University of Chicago - Law School and Mayer Brown LLP	117
7.	Current Issues in Unjust Enrichment 2022: Failure of Basis, Contractual Rights to Enrichment, Mistake of Law and Limitation Periods Charles Mitchell University College London - Faculty of Laws	112
8.	Contract Remedies for New Economy Collaborations Alan Schwartz and Simone Sepe Yale Law School and Yale Law School	107
9.	Rational Contract Design Naveen Thomas New York University School of Law	104
10.	Transatlantic Data Transfer Compliance W. Gregory Voss TBS Business School	102

Teaching Assistants: More Victor Goldberg on Excuse

This is the ninth in a series of posts on Victor Goldberg's work.  Today's post is about Chapters 12 and 13 of his book, Rethinking Contract Law and Contract Design (RCL).  Links to related posts follow this one.

Here Professor Goldberg once again plays the contrarian.  In Chapter 12, he defends the rule form Chandler v. Webster in which courts more or less leave parties where the courts find them when contractual obligations are excused due to impracticability or frustration of purpose.  That rule has been superseded in both English and U.S. law, but Professor Goldberg argues that sophisticated parties, given the option, prefer the Chandler rule (RCL, 155-57).

During World War II, English courts overturned Chandler in Fibrosa, by allowing for restitution of deposits paid before the event excusing contractual performance, and Parliament followed with the Law Reform (Frustrated Contracts) Act of 1943, which also allowed for seller to recover reliance damages.  Only two cases governed by that Act were litigated in the 60 years following its adoption.  Professor Goldberg surmises that the lack of litigation results from parties' election to contract around the defaults that the Act established (RCL, 160-64).  And then those two cases were not well handled, according to Professor Goldberg.  From his perspective there are two main problems with the approach under the Act.  First, the approach gives trial courts broad discretion to determine what reliance damages are "just."  Second, the resulting damages are not what the parties would have agreed to ex ante.  In fact, and this problem has little to do with the Act, courts ignore the parties' attempts to allocate risks through force majeure clauses (RCL, 164-72).

The American approach is unconstrained by legislation.  Rather, under the Restatement approach, in cases in which structures under construction are destroyed and the destruction is not caused by either party, American courts allow for recovery in restitution based on the value of the performance prior to destruction.  They do not allow for recovery of materials not "wrought in" to the structure (RCL, 173-76).  Professor Goldberg finds very few cases litigated under the Restatement approach and also finds that construction contracts do not address the problem.  But there is a simple reason.  Insurance contracts specifically contract around the Restatement approach and adopt the rule from Chandler v. Webster (RCL 176-78).

Chapter 13 is about anticipatory repudiation and requests of assurances.  The UCC handles this problem nicely in § 2-609.  The Restatement imitates those provisions in what Professor Goldberg describes as a "[P]Restatement," given that the common law had hitherto recognized so right to request assurances. In NorCon v. Niagara Mohawk, New York's Court of Appeals adopted a truncated version of the Restatement approach, for reasons that made no sense as a matter of law and that were ill-suited to the facts of that case.   If we are going to extend UCC doctrine to the common-law context, we ought to start with simple situations rather than the complex litigation at issue in Niagara Mohawk.  Sophisticated parties can work out their own rules in case one party suspects that the other might breach (RCL, 180-83).

As Professor Goldberg shows in detail, the parties in Niagara Mohawk were operating in an environment in which regulation constrained their ability to contract as they might have wished (RCL, 184-94).  They very well understood the risks that they assumed in that environment and allocated risks accordingly (RCL, 196-200).  Ultimately, the parties settled their dispute, and it is unclear whether the terms of their settlement were influenced in any way by the Court of Appeals' recognition of the right to demand assurances.  Based on the final settlement, Professor Goldberg suspects the effect of that opinion was modest (RCL 201-02).

Two additional points seem worth mentioning here.  First, one might think that Professor Goldberg's focus on sophisticated parties undermines his arguments here.  After all, sophisticated parties can contract around default rules, so what those rules are shouldn't matter much.  It would be interesting to consider whether the default rules better suit unsophisticated parties that lack the resources to contract around them.  Professor Goldberg offers no insights on this subject, but it is hard to see why the sophistication of the parties would change the analysis.  In any case, we also then run into another one of Professor Goldberg's themes in his work.  Courts resist parties' attempts to contract around default rules.  That theme arises repeatedly in these cases, in which courts ignore the parties' allocation of risk and impose default rules rather than deferring to the intentions of the parties.  They do so, Professor Goldberg argues, in the interests of "justice," but if justice departs so markedly from the parties' intentions, perhaps we should reconsider our notions of justice (RCL, 179).

A post on Chapter 11 (an Auseinandersetzung with Mel Eisenberg) is here.

A post on Chapters 8-10 (consequential damages) is here.

A post on Chapter 7 (liquidated damages) is here.

A post on Chapters 5 & 6 (speculative damages) is here.

A post on Chapter 4 (lost-volume damages) is here.

A post on Chapter 3 (timing for assessing damages) is here.

A post on Chapter 2 (the flexibility/reliance trade-off) is here.

The introductory post is here.

Airbnb Host Spying on You? Tell it to the Arbitrator!

It’s April and many of us are looking forward to spring break or, further ahead, to summer where we might go on vacation and rent out a nice Airbnb someplace like Florida. Just in time to ruin what may be the best part of vacation – the anticipation – is this case involving a spying Florida condo owner and an unsuspecting Texas couple.   Since it’s behind a Bloomberg paywall, and some of you may not have subscriptions, here’s a brief summary of the disheartening facts.

The Texas couple decided to vacation in Longboat Key, Florida, renting a condominium unit through Airbnb.  The unit was owned by Wayne Natt who, the couple alleges, secretly recorded their entire three-day stay in the unit!  This included their “private and intimate interactions.”  After they somehow learned about the recording, they sued both Natt and Airbnb.

Their claims against Natt are obvious (intrusion, loss of consortium, being a %@)#( jerk!!, etc.)  Against Airbnb, they claimed that the company should have warned them that these types of privacy invasions have happened at other properties and that it should have ensured that this property did not have any electronic recording devices.  Readers of this blog can predict what happened next – Airbnb filed a motion to compel arbitration.  Yes, that old story.  It argued that pursuant to their Terms of Service, which the couple had agreed to by clicking, the couple had agreed to have an arbitrator decide the issue. 

The trial court had granted Airbnb’s request to allow the arbitrator to decide venue, but the intermediate court reversed, stating that the reference to arbitration rules was not “clear and unmistakable.”  The Florida Supreme Court last week quashed the intermediate court’s ruling and reinstated the lower court’s decision finding that the arbitration agreement “clearly and unmistakably evidences the parties’ intent to empower an arbitrator, rather than a court, to resolve questions of arbitrability.”

In so ruling, they focused on this language in the TOS:

The arbitration will be administered by the American Arbitration Association ("AAA") in accordance with the Commercial Arbitration Rules and the Supplementary Procedures for Consumer Related Disputes (the "AAA Rules") then in effect, except as modified by this "Dispute Resolution" section. (The AAA Rules are available at www.adr.org/arb_med or by calling the AAA at 1-800-778-7879.) The Federal Arbitration Act will govern the interpretation and enforcement of this section

Rule 7 of the AAA Rule states that the arbitrator has the power to rule on the arbitrability of any claim and on the arbitrator’s own jurisdiction.  Because Rule 7 was incorporated by reference, it became part of the TOS.

So the next time you plan your Airbnb vacation, especially if it’s in Florida, don’t forget to give it a full sweep for hidden cameras because apparently, spying hosts are not that unusual (and who wants to end up in arbitration?)  Or maybe next time, just check into a good old-fashioned hotel.

US News Announces that Ratings Will Henceforth Be Based on Twitter Followers

U.S. News and World Report (USNWR), an unranked online news magazine, is best known in these parts for its rankings of law schools.  Vital life decisions are made based on USNWR's mysterious calculations.  Students decide which law school to attend, faculty members decide which job offers to take or determine where to place their articles based on USNWR's rankings.  It thus comes as no surprise that law school deans take USNWR rankings into account in their strategic decisions, and academics bemoan the fact that their self-worth is tied up with the mysterious process that fuels the rankings. 

USNWR's rankings editor, Algo Rhythm, rocked the world of the legal academy, when he announced that starting next year, the reputational component of rankings will be based on the number of followers faculty members have on their Twitter feeds. 

This blog reached out to the popular Twitter personality Lawprofblawg (left), to ask if they would be revealing their true identity, now that their school's USNWR ranking could benefit from it, to which Lawprofblawg responded, "You are LITERALLY the only person who still does not know who I am!" 

We also reached out to USNWR for an explanation of this unexpected change. Mr. Rhythm responded:

It's too easy to game our system by having friends at other law schools fill out our surveys in a way that skews the results.  In addition, other unranked, online journals were making fun of us for relying on paper ballots distributed through snail mail. 

Twitter followers are a much better measure of scholarly impact.  For one thing, following someone is a real commitment.  You have to click a button or something.  It's not like citing to someone's law review article -- those citations could be added by research assistants or law review editors.  But also, high numbers of Twitter followers indicates an ability to reach beyond the academy and say things that ordinary people are interested in hearing.  If you can't revolutionize constitutional theory in 280 characters, you're just another blowhard.

Celebrated sh*tposter, Scott Shapiro (right), asked what impact USNWR's new approach would have his institution's ranking, affected disinterest.  "I don't know why people are so obsessed with the fact that I have 73,900 Twitter followers (but who's counting?).  I also have a podcast, you know, and Brian Leiter is not the only legal philosopher who blogs."  

Eric Segall, when asked to comment responded in "what may be my last TikTok ever" by noting that TikTok is the wave of the future and USNWR should really be taking note of TikTok followers rather than Twitter followers.  "Twitter is to TikTok what blogs are to Twitter, no offense," he noted, adding, "And the U.S. Supreme Court is not a court."

We have it on good information that Blog Emperor and law dean Paul Caron is pressuring USNWR to take blogging into account as well.  Until that happy day, my dean has asked that I remind readers that you can follow us on Twitter.