ContractsProf Blog

Tuesday Top Ten - Contracts & Commercial Law Top SSRN Downloads for April 30, 2024

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 01 Mar 2024 - 30 Apr 2024

Rank	Paper	Downloads
1.	Online behavioural advertising, consumer empowerment and fair competition: Are the DSA transparency obligations the right answer? Elena Izyumenko, Martin Senftleben, Nynke Schutte, Edith G. Smit, Guda van Noort and Lieselotte van Velzen University of Amsterdam - Institute for Information Law (IViR), Institute for Information Law (IViR), University of Amsterdam, University of Amsterdam, University of Amsterdam, University of Amsterdam and University of Amsterdam	392
2.	Caveat Lector: Large Language Models in Legal Practice Eliza Mik The Chinese University of Hong Kong (CUHK) - Faculty of Law	303
3.	Reputation Reconsidered James Gibson University of Richmond School of Law	215
4.	Oscar Law Reid K. Weisbord and Jordan Bondurant Rutgers Law School and Rutgers School of Law, Students	142
5.	Introduction to the Law of Secured Transactions Michael Conklin Angelo State University - Business Law	126
6.	From Smart Legal Contracts to Contracts on Blockchain: An Empirical Investigation Fabio Bassan and Maddalena Rabitti Roma Tre University, Rome, Italy and Roma Tre University, Rome, Italy	124
7.	The New AI: The Legal and Ethical Implications of ChatGPT and Other Emerging Technologies (Symposium Foreword) Deborah W. Denno and Erica Valencia-Graham Fordham University School of Law and Fordham Law School	118
8.	Discussion Draft: Principles for AI in Contracting (Version 2.1) Christiane Wendehorst University of Vienna - Faculty of Law	106
9.	Financial Hardship and Complaints-Handling in the Buy-Now Pay-Later Industry: A Recent Empirical Study Lucinda O'Brien, Daniel Beratis, Ian Ramsay and Paul Ali University of Melbourne, University of Melbourne - Melbourne Law School, Melbourne Law School - University of Melbourne and University of Melbourne - Law School	93
10.	Filling the Void: How E.U. Privacy Law Spills Over to the U.S. Florencia Marotta-Wurgler and Kevin E. Davis New York University School of Law and New York University School of Law	82

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 01 Mar 2024 - 30 Apr 2024

Rank	Paper	Downloads
1.	Pay to Plead: Finding Unfairness and Abusive Practices in California Debt Collection Cases Claire Johnson Raba and Dalié Jiménez University of Illinois Chicago School of Law and University of California, Irvine School of Law	246
2.	Reputation Reconsidered James Gibson University of Richmond School of Law	215
3.	NIL Enforcement Preemption Josh Lens Recreation and Sport Management Program	106
4.	Filling the Void: How E.U. Privacy Law Spills Over to the U.S. Florencia Marotta-Wurgler and Kevin E. Davis New York University School of Law and New York University School of Law	82
5.	The Ethical Limits of Markets: Market Inalienability Kimberly D. Krawiec University of Virginia School of Law	73
6.	Reconciliation at the Border of Public and Private Law: Rethinking Contract Principles in the Context of Impact and Benefit Agreements Logan Stack Conway Baxter Wilson LLP	62
7.	Consumer Protection and the Illusory Promise of the Unconscionability Defense Benjamin C. Zipursky and Zahra Takhshid Fordham University School of Law and University of Denver Sturm College of Law	60
8.	Rights Mediation: Contracts Law and the First Amendment D. A. Jeremy Telman Oklahoma City University School of Law	59
9.	Exploring Blockchain-Based Alternative Dispute Resolution: Limitations of Traditional Methods and Prospects for Further Research Jamilya Kamalova CNRS-University of Paris 2	52
10.	Introduction for The Arbitration Conversation: Insights and Wisdom from Experts in the Field Amy J. Schmitz Ohio State University (OSU) - Michael E. Moritz College of Law	47

Once Again, the Mistaken Party Pays. This Time, I Don't Think They Should.

Last week, Emily Schmall reported in The New York Times about a Mexican man who found Cartier Earrings on sale on the company's Mexican website for 237 pesos, which is about thirteen dollars.  He knew that the earrings, described as "slender studded 18-carat rose-gold cuffs lined with diamonds," were worth far more than that, so he jumped at the offer.  He bought two pairs. Cartier noticed the mistake and corrected it, adjusting the price to 237,000 pesos. 

Cartier attempted to cancel the order. It attempted to buy off the purchaser with freebies.  He wouldn't budge.  He availed himself of Mexico's consumer protection laws and filed a complaint with the Matamoros branch of the federal consumer protection agency.  However, as one corporate attorney interviewed by the Times noted, the consumer does not win when the price quote is clearly a mistake.  But the buyer had mounted a social media campaign, and Cartier decided to save itself a prolonged legal battle and the potential attendant negative publicity.  The company filled the order, and the buyer dismissed his complaint.

I'm not happy for him.  He was not fooled by a misleading advertisement.  Cartier was not offering a lost leader.  It was an obvious mistake, and he knew it was a mistake.  These things are going to be happening more and more often as AI takes over website management.  There will be simple transcription or calculation errors, and there is no scrivener to blame.  

But scrivener's error doctrine should still apply.  Neither party really thought that the designer gold and diamond earrings were being offered for the cost of shipping and handling.  Reformation is the right result here, and if the buyer is not interested in paying what he knew to be the actual price of the earrings, then the contract should be avoided.  Jeff Lipshaw (left) shared with us a similar case of a scrivener's error being treated as a unilateral mistake back in 2022.  That case is still, shockingly, working its way through the courts and may result in an $11 million windfall for a wholly undeserving litigant.  Rule 11 sanctions for the attorney and a "don't piss on my leg and tell me that it's raining" screed from the bench seem like a better outcome.

Law Review Contracts

In Spring 2023, I was lucky enough to have one of my articles accepted for publication in a law review.  Of course, the offer was contingent on agreement to terms, but I didn't give that much thought.  Early in my career, I engaged in some negotiating with law reviews about my right to post drafts online prior to publication, but that practice is now so common that the standard contracts allow for pre-publication posting of drafts. 

However, this contract had two provisions that I found objectionable.  One was a blanket indemnification provision, which required me to pay fees and costs should the university pay a judgment or settlement in connection with any breach of the contract by me.  The other essentially rendered the agreement illusory by granting the law review the right to withdraw its offer of publication at any point in the process for any reason.  The law review must notify me of its reasons for the withdrawal, but the contract gives me no opportunity to object, so the notice provision is not helpful, beyond its value as evidence in litigation, the cost of which I would have to bear should I lose.

I surveyed colleagues about how to handle this situation.  I suspect that most professors just sign these things without much thought, as the likelihood of litigation or liability associated with legal publications is vanishingly slight.  Some law professors shared with me that they have just crossed out objectionable language and returned the documents, assuming that the law review editors will not pay much more attention to these matters than we do.  Others try to negotiate, and some told me that they had withdrawn their articles upon being told that the law review would not change its contractual terms. 

Some colleagues who have served as advisors to law reviews lamented the careless contracts that they found upon assuming the role.  They consulted with university counsel and soon contracts more protective of the universities' interests were drawn up and set in stone.  Faculty advisors were told that they contracts could not be changed; they communicated the same message to student editors, and so things remain until institutional memory fades.

I wrote to my student editors requesting that two provisions of the contract be removed or edited.  As I feared, they responded that university counsel would not permit any changes in the contract, and they knew this because another author had requested changes, and they had been told that they could not accommodate any changes.  I wonder what became of that author's submission.

Some colleagues suggested that I might insure against this risk, so I looked into it.  The American Association of University Professors AAUP) provides limited coverage, but it does not cover all of the most likely risks attendant to publication, and the combined cost of joining AAUP and buying the insurance would exceed $500.  I next considered whether a general business liability insurance policy might do the trick and be a bit less expensive.  Nope.  Errors and omissions policies exist for publishers, but getting an insurer to write a policy for an author would be prohibitively expensive.  

At this point it occurred to me that the law review with which I was hoping to publish is housed at a university with a university press.  It follows that the university likely already has coverage that addresses precisely the risks for which it was seeking indemnification from me.  I spoke to a relative who had a long-time career as an underwriter, and he reckoned that such coverage comes pretty cheap to a university, as a rider or addition to its general commercial liability coverage.  

Armed with these surmises, I wrote to my student editors again.  It seems to me that the indemnification language in their contract is a solution in search of a problem.  I also proposed language that would allow them to terminate the agreement for cause, with notice and opportunity to cure, so as not to render their promise to publish illusory.  I asked them to share my concerns with their faculty advisor and university counsel.   Otherwise, I was going to have to withdraw my piece reluctantly.

Of course, the students are just caught in the middle.  They don't have any say in the verbiage in their form contract.  They liked my article, took the time to read it, discuss it, consider it for publication through their own internal processes.  They wanted to publish it.  The contract was an obstacle that might make all of the work that they had done thus far a waste of time.  Meanwhile, the opportunity to make offers to other authors may have passed.

The whole experience saddens me both as a contracts teacher and from an institutional perspective.  As a contracts teacher, I try to persuade my students that, because contracts facilitate mutually beneficial transactions, if they really want to make the world a better place, they should consider transactional work as a possibility.  If they do consumer contracts, they can help police one-sided transactions to strive for contractual approaches that allocate risk and reward in a socially responsible manner.  But experiences like this one remind me that one-sided contracts can sow distrust and thus prevent mutually beneficial transactions from arising, as I previously noted here.  I had hoped to work with this law review, as I have worked with dozens of others, and now that might not happen.  The benefits on both sides are largely intangible but not negligible.

From an institutional perspective, I think this problem arises because of a few bad actors – authors who malign others, treat law review editors shabbily, or fail to diligently respond to reminders about deadlines. University counsel might not think that a law review is an enterprise important enough to justify risk of exposure to liability, even if that risk is very slight.  If I were to pull my piece, it would have zero impact on the rank or reputation of the law review.  The law review would publish something else.  University counsel thus has little incentive to change the terms of a contract that it regards as protective of the university’s interests. 

But university counsel is focused on risk management, and without forceful advocacy, they will prioritize those business concerns over furtherance of the university’s educational and scholarly mission. Moreover, given the networks of law review editors, faculty advisors and university counsel, all law reviews may soon adopt similar contracts.  Untenured professors will then have no choice but to put up with contract terms that are so one-sided that they would raise serious questions of unconscionability but for the likelihood that a court will treat law professors as sophisticated parties.  Contracts Profs know that sophistication doesn't help when an entire industry adopts similar, one-sided terms.  

My university's general counsel teaches at our law school, and she's a good egg, so I sought her advice on the matter.  I expected that she would give me insights as to how this all looks from the university counsel perspective, but she was as appalled by the language in the contract as I was.  She offered to call her counterpart at the law review's institution to see if hearing from a peer might yield some results.  She thought there was a reciprocity problem. Universities need professors.  Professors need to be able to publish (often through other universities publications) without putting their financial stability at risk.  But then she thought about our university's  insurance coverage and suggested that our policy might cover me in the case of a law suit relating to my professional activities.  After researching the issue, she concluded that it was not clear that our policy would protect me, and she advised me not to sign the contract.

Even if my university's insurer could provide a solution for me as to my own exposure, there would still be the other provision, which allows the law review to withdraw its acceptance at any point for any reason.  In future submission cycles, I will begin negotiating the contractual terms before I withdraw my piece from consideration elsewhere, and my ability to find a law review with reasonable contractual terms will be an important component of my decision where to publish.  But if, as I expect, law review contracts converge on language that leaves authors exposed and unprotected, I may just conclude that the world can live without my scholarship and I can live without the risks associated with publication.

In the end, I was able to get the law review editors to appeal to their university counsel and accept some of the revised language that I offered.  It didn't give me all the protection I wanted, but it gave me enough that I did not lose any more sleep over the issue. This year, I took a break from the student publication mishegoss, and just published with my law school's Law Review, after reviewing their wholly unobjectionable terms.  Given that people are far more likely to come across my work on the web than through a publication, it seems like the reasonable choice, and working with our editors was very easy and enjoyable.  

The FTC's Rule Banning Non-Competes and the Response

The Federal Trade Commission (FTC) this week announced a new Final Rule on non-competes.  I was hoping for a short document that clearly and concisely lays out the new rule.  Instead, we got a a 570-page document that, truth be told, I will never read.  Here's the summary, which I did mange to read:

The final rule provides that it is an unfair method of competition—and therefore a violation of section 5—for persons to, among other things, enter into non-compete clauses (“non-competes”) with workers on or after the final rule’s effective date. With respect to existing non-competes—i.e., non-competes entered into before the effective date—the final rule adopts a different approach for senior executives than for other workers. For senior executives, existing non-competes can remain in force, while existing non-competes with other workers are not enforceable after the effective date.

According to the FTC's website, the new rule will "will generate over 8,500 new businesses each year, raise worker wages, lower health care costs, and boost innovation."  

Well, that sounds great.  Surely, nobody would oppose all that.

Well, nobody except Ryan, LLC, which was the first to file a federal lawsuit challenging the new rule in Ryan, LLC v. FTC.  The main argument relies on a favored weapon in the anti-regulatory arsenal, the newly minted "major questions doctrine."  The FTC lacks the authority, Ryan argues, under congressional statutes, to issue so sweeping a regulation.  In fact, Ryan argues, the FTC lacks power to regulate unfair competition.  It did not do so until 1962, and it never sought to regulate non-competes until 2022.

As to substance, Ryan argues, "Workers, firms, and the economy all benefit from reasonable non-compete agreements."  The key term here is "reasonable."  Ryan contends that courts have long assessed the reasonableness of non-compete agreements.  Regulation here is unnecessary, as the courts have already struck the right balance among competing interests. 

The causes of action are predictable.  Count I, citing the major questions doctrine, alleges that the FTC lacks authority to adopt the new rule.  Count II, citing the non-delegation doctrine, Schechter Poultry (that old chestnut!), and Justice Gorsuch's dissent in Gundy, alleges that allowing the FTC to regulate in this area would be an unconstitutional delegation of legislative powers to the executive branch.  Count III, citing the Vesting Clause thesis and the unitary executive, alleges that the FTC Act violates Article II, because its commissioners can only be terminated by the President for cause.  Count IV seeks a declaration: vacating the new rule; finding that the FTC has no authority to regulate unfair competition; that the FTC claim of authority to issue the rule violates the non-delegation doctrine; and that the structure of the FTC violates Article II.  

Sounds crazy right?  Not to these folks.

I mean, should the courts strike down an entire agency because they don't like one rule, for which the agency provided a 570-page explanation?  Needless to say, if an agency got out over its skis, Congress could yank it back by issuing its own clarifying instructions.  But in our world, apparently, the power to do so is vested not through Article I, and not through Article II, but through Article III.  We the people, in order to form a perfect juristocracy . . . 

Cardozo Cup 2024 Entrants and Winner

Below are the seven student artists who participated in the 2023-2024 Cardozo Cup competition at OCU Law.  The challenge is to create an original work of art celebrating Judge Cardozo (in contracts, we are exclusively interested in New York Court of Appeals Judge Cardozo, rather than in the later Justice Cardozo).  

And here is the winner, J Badillo, pictured with his contracts professor and visiting dignitary Oklahoma City Mayor and OCU Law School Dean David Holt.  

Lest anybody think I chose the winner because it implies that I am Judge Cardozo's ward and sidekick, I note that the winner was selected through anonymous student voting tallied by Judge Cardozo's ward and sidekick.

Tuesday Top Ten - Contracts & Commercial Law Top SSRN Downloads for April 23, 2024

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 23 Feb 2024 - 23 Apr 2024

Rank	Paper	Downloads
1.	Online behavioural advertising, consumer empowerment and fair competition: Are the DSA transparency obligations the right answer? Elena Izyumenko, Martin Senftleben, Nynke Schutte, Edith G. Smit, Guda van Noort and Lieselotte van Velzen University of Amsterdam - Institute for Information Law (IViR), Institute for Information Law (IViR), University of Amsterdam, University of Amsterdam, University of Amsterdam, University of Amsterdam and University of Amsterdam	371
2.	Caveat Lector: Large Language Models in Legal Practice Eliza Mik The Chinese University of Hong Kong (CUHK) - Faculty of Law	280
3.	Reputation Reconsidered James Gibson University of Richmond School of Law	214
4.	Oscar Law Reid K. Weisbord and Jordan Bondurant Rutgers Law School and Rutgers School of Law, Students	142
5.	COVID-19 Risk Factors and Boilerplate Disclosure Stephen J. Choi, Mitu Gulati, Xuan Liu and Adam C. Pritchard New York University School of Law, University of Virginia School of Law, New York University School of Law and University of Michigan Law School	127
6.	Introduction to the Law of Secured Transactions Michael Conklin Angelo State University - Business Law	124
7.	From Smart Legal Contracts to Contracts on Blockchain: An Empirical Investigation Fabio Bassan and Maddalena Rabitti Roma Tre University, Rome, Italy and Roma Tre University, Rome, Italy	118
8.	Discussion Draft: Principles for AI in Contracting (Version 2.1) Christiane Wendehorst University of Vienna - Faculty of Law	99
9.	The New AI: The Legal and Ethical Implications of ChatGPT and Other Emerging Technologies (Symposium Foreword) Deborah W. Denno and Erica Valencia-Graham Fordham University School of Law and Fordham Law School	98
10.	Financial Hardship and Complaints-Handling in the Buy-Now Pay-Later Industry: A Recent Empirical Study Lucinda O'Brien, Daniel Beratis, Ian Ramsay and Paul Ali University of Melbourne, University of Melbourne - Melbourne Law School, Melbourne Law School - University of Melbourne and University of Melbourne - Law School	90

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 23 Feb 2024 - 23 Apr 2024

Rank	Paper	Downloads
1.	Pay to Plead: Finding Unfairness and Abusive Practices in California Debt Collection Cases Claire Johnson Raba and Dalié Jiménez University of Illinois Chicago School of Law and University of California, Irvine School of Law	224
2.	Reputation Reconsidered James Gibson University of Richmond School of Law	214
3.	Classical Liberalism and Corporate Law Robert T. Miller University of Iowa College of Law	167
4.	NIL Enforcement Preemption Josh Lens Recreation and Sport Management Program	103
5.	Filling the Void: How E.U. Privacy Law Spills Over to the U.S. Florencia Marotta-Wurgler and Kevin E. Davis New York University School of Law and New York University School of Law	59
6.	Rights Mediation: Contracts Law and the First Amendment D. A. Jeremy Telman Oklahoma City University School of Law	59
7.	Reconciliation at the Border of Public and Private Law: Rethinking Contract Principles in the Context of Impact and Benefit Agreements Logan Stack Conway Baxter Wilson LLP	57
8.	The Ethical Limits of Markets: Market Inalienability Kimberly D. Krawiec University of Virginia School of Law	53
9.	Empirical Study: Tax-related Measures in Investor-State Arbitration Danielle Morris, Yarik Kryvoi, Sam Winter-Barker and Tunc Savas WilmerHale LLC, The British Institute of International and Comparative Law (BIICL), WilmerHale LLC and WilmerHale LLC	53
10.	Consumer Protection and the Illusory Promise of the Unconscionability Defense Benjamin C. Zipursky and Zahra Takhshid Fordham University School of Law and University of Denver Sturm College of Law	52

Entries in the Third Annual Cardozo Cup Competition

This is the third year that I have asked my OCU law contracts students to create works of art commemorating Judge Cardozo.  The winner gets their name inscribed on the Cardozo Cup.  The first winner was Ethan Toutellotte, who wrote a rap in honor of Cardozo, and is now all grown up and ready to graduate.  Last year, Eric Davis wowed us with two paintings of Judge Cardozo, winning out ahead of a fiercely competitive field.

This year has brought seven new entries, pictured below.  My photography cannot do justice to these wonderful creations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contracts: Law in Action, Fifth Edition Is Available for Adoption!

Fans of the “law in action” tradition will be happy to learn that the authors of the contracts casebook bearing that name—Contracts: Law in Action—are on course to publish a new 5th edition for adoption fall 2024.  This edition is a significant update that consolidates what had been a two-volume casebook into a single volume that can be used for a 3, 4 or 5 credit course.  While the casebook maintains its unique emphasis on remedies and the UCC as exceptionally important teaching tools, the volume also includes important materials on interpretation, performance and breach, which carry on the book’s unique “law in action” tradition.  The authors have also added materials on COVID (and contract in crisis, generally); updated problems to provide more experiential and transactional opportunities; added some very recent material on the use of AI in contract interpretation; and supplemented and/or updated the backgrounds to some key cases, including to provoke thought and conversation on the role of race, gender, socioeconomic status, etc., in contract law. An updated Teachers Manual, which will include sample examples with answer keys, will also be available.

Reach out to Prof. Wendy Epstein ([email protected]) (pictured) with any questions or to request a review copy.

NBC "Drops" Ronna McDaniel as a Paid Contributor

We recently discussed Elon Musk's decision to "cancel" contract with Don Lemon.  Now, we have news of NBC "dropping" Ronna McDaniel.  How does dropping accord with contract obligations?

Image by Gage Skidmore from Peoria, AZ, United States of America, CC BY-SA 2.0, via Wikimedia Commons

Ms. McDaniel was recently ousted as the Chair of the Republican National Committee (RNC).  She was replaced by Lara Trump. Trump, huh? I wonder if she's related to . . . .  Nah. Must be a coincidence. After all, Donald Trump placed Ms. McDaniel at the head of the RNC after she led his 2016 campaign in Michigan. He wouldn't turn on one of his most loyal supporters, someone who placed allegiance to Mr. Trump ahead of support for her Uncle, Mitt Romney, would he? Hey, Mike Pence, he wouldn't turn on one of his most important supporters would he?

Oh. Well, Lara Trump has little to fear. She's already married to Eric. How much worse can things get?

Almost immediately, NBC hired Ms. McDaniel to be an on-air commentator on political affairs.  Reports indicated she would be paid an annual salary of $300,000 to provide her insights. As Michael M. Grynbaum reported in The New York Times, NBC treated the decision to hire Ms. McDaniel as a coup: "It couldn’t be a more important moment to have a voice like Ronna’s on the team," as Ms. McDaniel could provide "an insider’s perspective on national politics and the future of the Republican Party.”

Ms. McDaniel debuted on NBC with some critical words for some members of her party, taking the bold position that one should not support people who violently attack Capitol police officers. Wow, that's strong leadership. When asked why she did not speak out against the violence of the January 6th protestors previously, Ms. McDaniel explained, that sometimes "When you're the RNC Chair, you kind of take one for the whole team." That little clip pretty much encapsulates how the GOP lost sight of who the "team" is. The party serves the country, you numbskull; not the other way around.  She should have "taken one for the team" by standing up to voices within her own party that support political violence in the naked pursuit of power at all costs.

Voices within NBC felt the same way I do. They demanded that NBC back out of the deal, and the NBC executives, showing little more spine than she did, capitulated. They have "dropped" her. In my world, "dropped" means that they are breaching their contract with her. She may have no damages, given that some other media institution may pick her up, but I don't think audiences on Fox, OAN, or Newsmax want to hear from her either. Do I hear CNN? 

If she can't find comparable work, NBC might have to pay her not to appear. I can't imagine that there is an audience out there clambering to hear from her. Nor is there any lack of conservative voices on NBC.  They have Marc Short, Mike Pence's former chief-of-staff, and Brendan Buck, an aid to Paul Ryan and John Boehner. Yeah, I know.  RINOs.

Ms. McDaniel would have had something unique to contribute to NBC news if she would have stuck to her MAGA guns.  It might be valuable for NBC to have a contributor who could honestly explain why the 2020 election was stolen and that the actions of the January 6th protestors were justified.  The challenge is to find such a person who can make those claims in a way that would be credible to non-believers. The problem is that mainstream Republicans act like they believe that the election was stolen or at least they refuse to contradict their party leader on that subject, but they have turned up no evidence of a stolen election that has survived ordinary scrutiny.  Ms. McDaniel's debut and farewell performance on NBC tells a damning story: when you get paid to lie, you lie, even if those lies have devastating consequences for our democracy. Ms. McDaniel likely has many good qualities and no doubt strives to be a good person. Yet, she has devoted her life to politics, and in that realm she simply does not know right from wrong. She is not alone.

Joseph A. Wulfsohn of FoxNews reports that Ms. McDaniel had a two-year contract with NBC for $600,000.  She is now seeking a $600,000 buyout.  

National Consumer Law Center Presents: 75 Ways to Avoid Arbitration

We learned from that great legal authority,Paul Simon that there are fifty ways to leave your lover.

You know what's even better than that? Getting out of binding arbitration (if you are a consumer who would rather be in court, that is).  And now, the National Consumer Law Center has collected seventy-five ways to challenge an arbitration agreement.  It's not as catchy as Paul Simon's tune, but it seems more practical than "Make a new plan, Stan."

Hat tip to John Wladis!

Tuesday Top Ten - Contracts & Commercial Law Top SSRN Downloads for April 16, 2024

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 16 Feb 2024 - 16 Apr 2024

Rank	Paper	Downloads
1.	Online behavioural advertising, consumer empowerment and fair competition: Are the DSA transparency obligations the right answer? Elena Izyumenko, Martin Senftleben, Nynke Schutte, Edith G. Smit, Guda van Noort and Lieselotte van Velzen University of Amsterdam - Institute for Information Law (IViR), Institute for Information Law (IViR), University of Amsterdam, University of Amsterdam, University of Amsterdam, University of Amsterdam and University of Amsterdam	361
2.	Caveat Lector: Large Language Models in Legal Practice Eliza Mik The Chinese University of Hong Kong (CUHK) - Faculty of Law	233
3.	Reputation Reconsidered James Gibson University of Richmond School of Law Date Posted: 07 Feb 2024 Last Revised: 07 Feb 2024	213
4.	Income Pools for Superstar Markets Timothy Chan, Ningyuan Chen and Craig Fernandes University of Toronto, Mechanical and Industrial Engineering Department, University of Toronto - Rotman School of Management and University of Toronto, Mechanical and Industrial Engineering Department	136
5.	Oscar Law Reid K. Weisbord and Jordan Bondurant Rutgers Law School and Rutgers School of Law, Students	130
6.	Introduction to the Law of Secured Transactions Michael Conklin Angelo State University - Business Law	123
7.	From Smart Legal Contracts to Contracts on Blockchain: An Empirical Investigation Fabio Bassan and Maddalena Rabitti Roma Tre University, Rome, Italy and Roma Tre University, Rome, Italy	116
8.	COVID-19 Risk Factors and Boilerplate Disclosure Stephen J. Choi, Mitu Gulati, Xuan Liu and Adam C. Pritchard New York University School of Law, University of Virginia School of Law, New York University School of Law and University of Michigan Law School	116
9.	Financial Hardship and Complaints-Handling in the Buy-Now Pay-Later Industry: A Recent Empirical Study Lucinda O'Brien, Daniel Beratis, Ian Ramsay and Paul Ali University of Melbourne, University of Melbourne - Melbourne Law School, Melbourne Law School - University of Melbourne and University of Melbourne - Law School	85
10.	A Dataset on the Contents of 100 Terms of Service of Online Platforms, Analyzed and Evaluated Under the EU Consumer Law Przemysław Pałka, Radosław Pałosz, Andrzej Porębski and Katarzyna Wiśniewska Jagiellonian University in Krakow - Faculty of Law and Administration, Jagiellonian University in Krakow, Jagiellonian University and Jagiellonian University in Krakow	76

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 16 Feb 2024 - 16 Apr 2024

Rank	Paper	Downloads
1.	Reputation Reconsidered James Gibson University of Richmond School of Law	213
2.	Wearable AI, Bystander Notice, and the Question of Privacy Frictions Zahra Takhshid University of Denver Sturm College of Law	197
3.	Classical Liberalism and Corporate Law Robert T. Miller University of Iowa College of Law	165
4.	NIL Enforcement Preemption Josh Lens Recreation and Sport Management Program	101
5.	High-Status Versus Low-Status Stakeholders H. Justin Pace Western Carolina University - College of Business	63
6.	Filling the Void: How E.U. Privacy Law Spills Over to the U.S. Florencia Marotta-Wurgler and Kevin E. Davis New York University School of Law and New York University School of Law	58
7.	Rights Mediation: Contracts Law and the First Amendment D. A. Jeremy Telman Oklahoma City University School of Law	57
8.	Reconciliation at the Border of Public and Private Law: Rethinking Contract Principles in the Context of Impact and Benefit Agreements Logan Stack Conway Baxter Wilson LLP	53
9.	Empirical Study: Tax-related Measures in Investor-State Arbitration Danielle Morris, Yarik Kryvoi, Sam Winter-Barker and Tunc Savas WilmerHale LLC, The British Institute of International and Comparative Law (BIICL), WilmerHale LLC and WilmerHale LLC	49
10.	Introduction for The Arbitration Conversation: Insights and Wisdom from Experts in the Field Amy J. Schmitz Ohio State University (OSU) - Michael E. Moritz College of Law	43

Another Case Where Mistake Doctrine Doesn't Help

Not the brooch at issue

Jenny Gross reports in The New York Times about an English art historian who bought a silver brooch at an arts fair thirty-six years ago for the equivalent of $35.  Recently, the woman discovered via a YouTube video that the brooch was a Victorian-era collectible designed by William Burges and valued at around $12,000.

As such stories go, this is not all that thrilling. We need some more zeroes. Sitll, it just gives us another opportunity to hammer home the point that, under modern contracts law, if you are mistaken about the value of something you sell, you likely bare the risk of your mistake. In this case, although I do not number among the cognoscenti of Victorian jewelry, I would say, unless you have a boat in need of an anchor, you are better off without this particular ornament.  Give me an Eagle Diamond or Rose of Aberlone any day.

Nancy Kim, on SCOTUS, the Federal Arbitration Act, and Wonder Bread

The blog covered this case after oral argument.  Now that the case has been decided, Nancy Kim (left) reports on the outcome.

The U.S. Supreme Court weighed in on a matter today involving some yummy things* – baked goods, contracts and arbitration (okay maybe the last one not so much).  In Bissonnette v. LePage Bakeries Park Street, the petitioners were franchisees and distributors for Flowers Foods, a multi-billion-dollar producer and marketer of baked goods that I’ve never even heard of but that owns brands that I eat regularly, including my favorite, Dave’s Bread (which I just had for breakfast).  It also makes the suspiciously delicious Wonder Bread which is almost the exact opposite of Dave’s Bread.  Anyway, Bissonnette and Wojnarowski signed Distributor Agreements that gave them rights to certain territories to pick up these delicious “bread and buns” and distribute them to various outlets.  They spent at least forty hours delivering these delectable treats and engaged in other activities promoting these products.  The Distributor Agreements incorporated an Arbitration Agreement that required that “any claim, dispute, and/or controversy” be arbitrated under the Federal Arbitration Act.

In 2019, they sued claiming that Flowers had unlawfully deducted from their wages, failed to pay them overtime, and engaged in other types of ungenerous activities.  SCOTUS noted that the FAA provides that arbitration agreements are “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.”  There is a notable exception:  “nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”  (9 USC §1)  Bissonnette and Wojnarowski argued that they fell into this exception.  The District Court dismissed the case and compelled arbitration, finding that Bissonnette and Wojnarowski were required to arbitrate because their jobs were “much broader in scope” and so they were not just transportation workers.  The Second Circuit affirmed but on the grounds that the FAA exemption was only for transportation workers, and they were “in the bakery industry.”

SCOTUS noted a split between the Second Circuit and the First Circuit and resolved the conflict by finding that the Second Circuit erred; there was no requirement that a transportation worker work for a company in the transportation industry in order to be exempt under §1 of the FAA. 

*With apologies to the gluten-free and the hungry.

Richard Frankel on the Corporate Response to Mass Arbitration

We have touched on this topic a few times before. We noted a challenge in the Seventh Circuit to mass arbitration here, and we provided Roku’s terms of service, which provide an illustration of the new practice of “batch arbitration.”  Richard Frankel (right) has undertaken the first large empirical study, as far as I know, of the corporate response to mass arbitration. Batch arbitration is just one of the tools in the new corporate arsenal. The article, Fighting Mass Arbitration: An Empirical Study of the Corporate Response to Mass Arbitration and Its Implications for the Federal Arbitration Act is available on SSRN here.

Professor Frankel looks at 82 arbitration clauses that corporations have introduced in response to mass arbitration. The new clauses introduce three innovations. First, over 80% of the clauses require pre-dispute mediation before a customer can bring an arbitration action, and failure to mediate may lead to dismissal of the arbitration claims.  Second, about 40% of the corporations in Professor Frankel’s data set are experimenting with variations on batch arbitration, in which a few claims are selected for arbitration.  The outcomes in those cases creates a baseline. The corporation then settles the remaining suits through mediation and only pays arbitration fees for a handful of cases.  Finally, corporations are seeking out arbitral bodies that charge low fees.

Image by DALL-E

Professor Frankel makes two very important points with respect to these corporate responses to  mass arbitration.  First, unsurprisingly, the effect of these new corporate measures is to suppress claims and make the arbitration process more procedurally complex and time consuming.  Second, Professor Frankel contends that the new forms of arbitration that corporations have made part of their terms of service are not covered under the Federal Arbitration Act (FAA).  That means that states can regulate in this area to prevent corporations from using new forms of arbitration to suppress claims. Indeed, Professor Frankel argues, the rise of mass arbitration illustrates that the FAA is ill-suited to address the claims affecting large groups of people. 

The Article traces the development of the FAA from "sleepy law" (7) to the primary mechanism that has allowed corporations to evade liability through class action bans, "even where such provisions impede injured parties from pursuing claims." (13) Plaintiffs' attorneys responded with mass arbitrations, a subject that we have covered, most recently, here.  That background sets the stage for Professor Frankel's empirical study of the corporate response.

Guess what! Nearly 90% of corporations in the study still use mandatory arbitration provisions.  The most popular response to mass arbitration, employed by 80% of corporations with mandatory arbitration provisions, has been to require some sort of pre-arbitration procedures, some of which toll the statute of limitations, some of which don't.  About 40% of the corporations have introduced batch arbitration requirement.  Batch arbitration can be combined with a bellwether approach, in which a few representative claims are heard and then become the basis for negotiations of a global settlement.  National Arbitration and Mediation and ADR Services are favored arbitration providers among the companies that do impose batch arbitration requirements on their customers or employees. Excerpt from a retreat for partners and associates who came up with these plans captured on video below.

The study includes lots of nuance and particularized evaluation of the techniques involved, explaining the processes and advantages to corporations of the various mechanisms adopted.

The next section of the Article weighs the effects of corporate responses to mass arbitration on access to justice.  Professor Frankel summarizes the effects of pre-arbitration exhaustion requirements as follows:

While pre-arbitration exhaustion carries the appeal of helping to resolve a dispute through informal mediation and thus avoiding the need to go through arbitration, it also leads to delay and erects additional hurdles for plaintiffs seeking to vindicate their rights. (36)

The new pre-arbitration mediation requirements differ from earlier versions of the same mechanism in that it appears that their primary goal "is simply to make it harder for claimants to file suit." (37). Moreover, "some pre-arbitration requirements seem to have no clear purpose other than to make mass arbitration more difficult or to lay traps for claimants."  Third, despite corporations' descriptions of pre-arbitration mediations as "informal," they sometimes impose onerous production burdens on claimants beyond what a court might require. (39) Finally, the pre-arbitration requirements provides corporations with a ready defense, as they can allege that claimants failed to exhaust alternatives to arbitration or litigation. (40-43)

The main effect of batching is delay, and at least two courts have cited that delay in striking batching requirements as unconscionable. (44) Batching and bellwether approaches reveal the duplicity of the class-action waiver strategy. Corporations attacked class arbitration on the ground that arbitral bodies are ill-suited to handle mass claims. Now they seek to force claimants to adjudicate their claims in batches, but on terms that the corporations control. (46-47). That same duplicity underlies corporate approaches to fees. Corporations defended class-action waivers by claiming that individual arbitrations were still convenient for claimants, as the corporations paid the fees. Then came mass arbitration, and it because clear that the corporations always assumed that class-action waivers would deter claims, because mass arbitration revealed that corporations did not anticipate paying fees for all of claimants who availed themselves of the arbitration mechanism.  In response to mass arbitration, corporations sought to defer paying fees through new mechanisms, batching and bellwether strategies that are designed to make most of the claims, and their attendant fees, disappear. (48-49)

In the final substantive section of the paper, Professor Frankel argues that many of the responses to mass arbitration fall outside of the FAA, mostly because they do not further the FAA's aim of speedy dispute resolution. That does not render them unlawful, but it does eliminate the preemption doctrine that has prevented states from regulating arbitration clauses that do fall within the FAA. Professor Frankel explains why both pre-arbitration mediation requirements and batching are not the sort of proceedings covered by the FAA. (50-55).

Professor Frankel discusses various legislative interventions that could strike down pre-arbitration mediation requirements as well as batching or bellwether schemes. (55-58) More radically, he suggests that batch arbitration exposes the doctrinal error at the heart of the SCOTUS rulings, culminating in Concepcion and Italian Colors, that treated class action waivers as enforceable under the FAA.  "[T]he Supreme Court’s notion of what makes a proceeding an arbitration under the FAA—that it is speedy, bilateral and procedurally simple—cannot be squared with mass harm." (59)

So, to sum up. The corporate response to mass arbitration reveals corporate ingenuity in seeking to throw up barriers to the vindication of contractual rights.  At the same time, it reveals their duplicity, claiming to leave open paths to justice that they have intentionally foreclosed.  The Supreme Court has indulged this duplicity, as Justice Kagan put it, "admirably flaunted rather than camouflaged" in opinions that made clear that the FAA, as interpreted by the Court, encourages the adoption of class-action waivers as a means of escaping accountability for contractual and statutory violations. The response to mass arbitration makes that duplicity impossible to ignore and opens a path, both to renewed state regulation of arbitration clauses and to the reconsideration of the Court's precedents that now, more clearly than ever, stand between claimants and the opportunity to vindicate their rights.

The Court's conservative majority is stuck between two fitting statements of its ethos.  As Justice Kagan noted, it wants to tell claimants "too darn bad."  But you guys are legends!  Don't follow precedents that have proved themselves unworkable!  Which brings us to our second statement about the ethos of the Roberts Court's super-majority.

You can buy the t-shirt here.

Congratulations to Professor Frankel!  It's not just a law review article; it's a legislative agenda and a litigation strategy!

Contracts Adjacent News: University of Oklahoma Position in Commercial Law

University of Oklahoma College of Law Seeking Visiting Faculty Spring 2025

University of Oklahoma College of Law is pleased to announce that it is currently seeking applicants for visiting professor position(s) for Spring 2025 of the upcoming academic year. The law school has a number of curricular needs, but is especially interested in candidates specializing in bankruptcy, secured transactions, consumer law and finance, and payment systems.

Visiting faculty are responsible for teaching and assessing law students in their courses. There are no required scholarship or service obligations, although opportunities for both will be available if desired. A candidate must have a J.D. degree from an ABA accredited law school, demonstrated expertise in the area of law covered by their course package, and a commitment to teaching excellence. The visiting faculty member will need to be in residence in Norman or be willing to commute to Norman to teach classes and hold office hours a minimum of 3 days a week.

Founded in 1909, the University of Oklahoma College of Law is Oklahoma's only public law school and was ranked 51st best law school in the nation by U.S. News Report in 2023. OU Law is the academic home of more than 800 students enrolled in Juris Doctor, Master of Laws, Master of Legal Studies, Paralegal Studies and various dual-degree programs. With small sections and class sizes, OU Law encourages a strong sense of community, accomplished faculty who boast international expertise, and a state-of-the-art facility featuring study rooms, court rooms and classrooms equipped with the latest technology.

Norman is a vibrant college town with walkable, tree-lined streets and plenty to see and do. Campus Corner is an historic four-block area exploding with shops, services, and restaurants. Annual events and festivals bring together residents and visitors by the thousands, such as the Norman Medieval Fair, Norman Music Festival, Jazz in June, and the Summer Breeze Concert Series. The city is home to more than 50 parks and recreational areas, including various sports complexes, pools, and a range of museums and theatres.

To apply, please send a copy of your CV and a list of three references to Melissa Mortazavi, Associate Dean for Academic Affairs, [email protected]. 

Sportsball: Clemson Sues the ACC over $140 Million Exit Fee

The nerve! Clemson University (Clemson) has filed a complaint against the Atlantic Coast Conference (the ACC) because the ACC claims ownership of media rights over home games at member institutions and because the ACC claims entitlement to a $140 million payment should members leave the conference. The audacity! And all this just because Clemson arguably agreed to those terms when it joined the ACC. The impudence!

How can a public educational institution fulfill its mission if saddled with this onerous financial burden?  Or, as Clemson puts it, "Each of these erroneous assertions separately hinders Clemson's ability to meaningfully explore its options regarding conference membership, to negotiate alternative revenue-sharing proposals among ACC members, and to obtain full value for its future media rights." Yeah! Basic science, medical research, training future educators, social workers, professionals, and others who can serve South Carolina and the region. You can do a lot of worthwhile things with $140 million.

And this really is all about money. The complaint details an alleged "revenue gap." The SEC and the Big Ten entered into more lucrative contracts with media companies than did the ACC.  As a result, universities in those leagues get a media share that can be as much as $20 million higher than what Clemson gets through the ACC.

As to the media rights, that is a matter of differing interpretations of this contractual language.  Clemson points out that it granted the ACC only those media rights "necessary for the Conference to perform the contractual obligations of the Conference expressly set forth" in separate agreements between the ACC and ESPN.  Those obligations apply only to members, Clemson alleges, not to former members. I think we'd need to see the language of those other agreements to know whether this is a plausible construction of Clemson's obligations. Alas, the parts of the complaint relating to ESPN have been redacted, apparently into response to ESPN's hissy fit when the details of the ACC's arrangement with ESPN were disclosed in a similar case involving Florida State University, as Chapel Fowler and Ted Clifford explain in The State.

As to the $140 million, the ACC characterizes the amount as "liquidated damages," while Clemson says it is -- you guessed it! -- an unenforceable penalty, and an unconscionable one at that. Much of the complaint is dedicated to showing that the withdrawal fee is too high. It is pegged at three times the ACC's annual operating budget, and that operating budget has grown tremendously in the last decade. But if Clemson's media rights are valued at somewhere north of $40 million/year and the ACC is claiming entitlement to those rights through 2036, $140 million hardly seems disproportionate.  Clemson has an argument for why the ACC is not harmed, but much of it is redacted.

Clemson says the that withdrawal fee arose through a "purported" 2012 Amendment to its rules. The complaint does not clarify in what sense this amendment was merely "purported." Seems hard to imagine that Clemson did not somehow agree to this amendment, and it may even have profited from it when other universities withdrew. Clemson's complaint seeks declaratory judgment under a South Carolina statute. Is that an equitable remedy despite being codified? Unclean Tiger paws?

Contracts are risk-allocation devices. Is there anything more to say here?

Breach of K Claim for Denial of Tenure Can Proceed Against Harvard University

Benjamin Edelman, who taught at Harvard Business School for eleven years, is suing Harvard University for wrongful denial of tenure. He has set up a website explaining his reasons for suing and tracking the progress of his case. His complaint is here.  He alleges breach of contract, breach of the duty of good faith and fair dealing, and promissory estoppel. 

It seems that there were no obstacles to Mr. Edelman's tenure that related directly to his teaching and scholarship. Rather, Mr. Edelman ran into trouble based on his extracurricular activities, concerns about his undisclosed consulting activities, and some anonymous complaints. In one notorious episode, Mr. Edelman launched a campaign against a local Chinese restaurant that charged prices higher than those it advertised online. Apparently, the University objected to Mr. Edelman's zeal in remonstrating over a $4 overcharge, and Mr. Edelman apologized for his conduct.

Hypothetically, one can imagine that a university might not want to grant tenure to someone whose abrasive conduct might reflect poorly on the institution or who is routinely disrespectful of students or staff (making no assumptions as to the nature of the anonymous complaints in Mr. Edelman's case). Mr. Edelman seems to have been a Wunderkind, and the dispute is not about either his credentials (pure Harvard) or his professional performance. Still, nobody should be compelled to receive a life sentence to have a jerk as a colleague. Of course, these processes are opaque, so it is understandable that Mr. Edelman is miffed, and of course, the rest of us are left to guess about what motivated Harvard's decision.  People can be nice geniuses. I've worked with many people who combined extraordinary intelligence and drive with outsized humility and humanitas.

However, Mr. Edelman alleged procedural irregularities aplenty. Harvard moved to dismiss.

Last month, the Massachusetts Superior Court denied Harvard's motion to dismiss. The opinion references both Harvard Business School's Policies and Procedures with Respect to Faculty Appointments and Promotions ("Tenure Policy") and the Principles and Procedures for Responding to Matters of Faculty Conduct ("P&P"). However, it seems that Mr. Edelman's claims arise under the P&P alone. Disappointingly for this Blog, Harvard did not contest whether the P&P constituted a contract for the purposes of its motion to dismiss. With that impediment removed, the court had no difficulty concluding that Mr. Edelman's factual allegations sufficed to state claims on all three of his causes of action.

Tuesday Top Ten - Contracts & Commercial Law Top SSRN Downloads for April 9, 2024

Breaking News! Our benevolent and munificent King-of-the-Blog, Jeremy Telman, has made an appearance at #10 on the "Private Law: Contracts" Top Ten list for his article on contract law and the First Amendment. This article is literally (in its figurative sense) the Reese's Peanut Butter Cup of legal scholarship: two great tastes that taste great together. And we need not quibble over whether you put First Amendment in my contracts or you put contracts in my First Amendment! If you have not downloaded Rights Mediation: Contracts Law and the First Amendment then you are missing out on the XL-size version of the sort of quality material that Jeremy regularly brings to this space, and you ought to rectify that oversight right now.

With that public service announcement complete, let's check out the rest of the charts. 

Top Downloads For:

Contracts & Commercial Law eJournal

Recent Top Papers (60 days)

As of: 09 Feb 2024 - 09 Apr 2024

Rank	Paper	Downloads
1.	Online behavioural advertising, consumer empowerment and fair competition: Are the DSA transparency obligations the right answer? Elena Izyumenko, Martin Senftleben, Nynke Schutte, Edith G. Smit, Guda van Noort and Lieselotte van Velzen University of Amsterdam - Institute for Information Law (IViR), Institute for Information Law (IViR), University of Amsterdam, University of Amsterdam, University of Amsterdam, University of Amsterdam and University of Amsterdam	346
2.	Consequential Damages: Alien Vomit or Intelligent Design? Tara Chowdhury, Faith Chudkowski, Amanda Gray Dixon, Rishabh Sharma, Madison Sherrill, Hadar Tanne, Stephen J. Choi and Mitu Gulati University of Virginia - School of Law, University of Virginia - School of Law, The Becket Fund for Religious Liberty, University of Virginia (UVA) School of Law, Hunton Andrews Kurth LLP, Freshfields Bruckhaus Deringer - Freshfields Bruckhaus Deringer LLP, New York University School of Law and University of Virginia School of Law	288
3.	The Smart Contracts Trilemma Bahadir Köksal and Roee Sarel University of Hamburg - Institute of Law and Economics and Institute of Law and Economics, University of Hamburg	217
4.	Reputation Reconsidered James Gibson University of Richmond School of Law	209
5.	Caveat Lector: Large Language Models in Legal Practice Eliza Mik The Chinese University of Hong Kong (CUHK) - Faculty of Law	186
6.	Income Pools for Superstar Markets Timothy Chan, Ningyuan Chen and Craig Fernandes University of Toronto, Mechanical and Industrial Engineering Department, University of Toronto - Rotman School of Management and University of Toronto, Mechanical and Industrial Engineering Department	133
7.	Oscar Law Reid K. Weisbord and Jordan Bondurant Rutgers Law School and Rutgers School of Law, Students	127
8.	From Smart Legal Contracts to Contracts on Blockchain: An Empirical Investigation Fabio Bassan and Maddalena Rabitti Roma Tre University, Rome, Italy and Roma Tre University, Rome, Italy	116
9.	COVID-19 Risk Factors and Boilerplate Disclosure Stephen J. Choi, Mitu Gulati, Xuan Liu and Adam C. Pritchard New York University School of Law, University of Virginia School of Law, New York University School of Law and University of Michigan Law School	111
10.	The Supreme Court 'Pulled a Brodie': Swift and Erie in a Commercial Law Perspective Todd J. Zywicki George Mason University - Antonin Scalia Law School	106

 

Top Downloads For:

Law & Society: Private Law - Contracts eJournal

Recent Top Papers (60 days)

As of: 09 Feb 2024 - 09 Apr 2024

Rank	Paper	Downloads
1.	Consequential Damages: Alien Vomit or Intelligent Design? Tara Chowdhury, Faith Chudkowski, Amanda Gray Dixon, Rishabh Sharma, Madison Sherrill, Hadar Tanne, Stephen J. Choi and Mitu Gulati University of Virginia - School of Law, University of Virginia - School of Law, The Becket Fund for Religious Liberty, University of Virginia (UVA) School of Law, Hunton Andrews Kurth LLP, Freshfields Bruckhaus Deringer - Freshfields Bruckhaus Deringer LLP, New York University School of Law and University of Virginia School of Law	288
2.	The Smart Contracts Trilemma Bahadir Köksal and Roee Sarel University of Hamburg - Institute of Law and Economics and Institute of Law and Economics, University of Hamburg	217
3.	Reputation Reconsidered James Gibson University of Richmond School of Law	209
4.	Wearable AI, Bystander Notice, and the Question of Privacy Frictions Zahra Takhshid University of Denver Sturm College of Law	192
5.	Classical Liberalism and Corporate Law Robert T. Miller University of Iowa College of Law	158
6.	Emergency Arbitration in India: a Need for Legislation Implementation Nandini Kabra Independent	117
7.	NIL Enforcement Preemption Josh Lens Recreation and Sport Management Program	101
8.	A Framework for Effective Smart Contracting Ioana Vasiu and Lucian Vasiu Babes-Bolyai University - Faculty of Law and Independent	80
9.	High-Status Versus Low-Status Stakeholders H. Justin Pace Western Carolina University - College of Business	59
10.	Rights Mediation: Contracts Law and the First Amendment D. A. Jeremy Telman Oklahoma City University School of Law	53

New (to me) Contracts Podcast!

Thanks to Mitu Gulati (right) for introducing me to Unpacking Contract Law, a UK-based, contracts-law podcast sponsored by Newcastle Law School.  I dipped in to episode 22, which is about one of our favorite old chestnuts of contract law and lore, Hadley v. Baxandale.  Three scholars, Timothy Dodsworth (Newcastle), Maggie Hemsworth (Exeter), and Séverine Saintier (Cardiff) dig right in.  American listeners be warned: over on the other side of the pond, they talk about "Hadley and Baxandale" instead of Hadley v. Baxandale.  I've heard they also drive on the wrong side of the street.

It is lovely to hear a UK-case discussed by actual UK legal scholars, who are able to give the case a concreteness that we Yanks tend to overlook.  Listen to the episode and you can learn, e.g., what caused the delay in delivery that sparked the lawsuit.  There is much interesting conversation about the role of comparative law in the opinion and a discussion of why our friends (they call us "American cousins"!) over in the UK have given up on juries when it comes to determining damages.  

Professor Hemsworth discusses a standard divide in the holding of Hadley into "two limbs," one relating to imputed foresight/knowledge, which was the focus of the case, and one to actual foresight; that is, special knowledge of facts.   Professor Hemsworth notes that the court found no evidence in Hadley that the defendant was actually aware that the mill was shut down, and so the second limb was not an option in that case. 

Professor Hemsworth then discusses some scholarship from "one of our favorite American cousins" in which the notions of contractual exclusions and Hadley's limb 2.  The America cousin is unnamed, but I suspect that all roads lead to Mitu, as we know that he and his co-authors have been doing work on precisely this issue. In such cases, the thing excluded is variously described as "consequential," or "special" or "unusual" damages, but the language is confusing and seems unrelated to anything that might fall within Hadley's limb 1.  And yet, by the Hunpty-Dumpty logic of case law, in which words mean whatever you want them to mean, courts accept the conflation.

Australian courts recognize, Professor Hemsworth notes, that "the poms have got it wrong."  But I don't think it's just the poms.  Mitu's work suggests that American transactions similarly conflate exclusions of damages with consequential losses in ways that seem doctrinally confused.  I don't think Mitu's work has yet turned up evidence of confusion in American courts, but only because it seems that these exclusions do not lead to litigation.

We await the arrival of a bold court that can achieve the reverse solution to the Humpty Dumpty conundrum.  Rather than putting the pieces together again, they need to be disaggregated.

Elon Musk "Cancels" a Contract

Image by DALL-E

Dear Reader, I apologize.  I seem to have let a week go by without reporting on some batshit-crazy thing that Elon Musk did. This would be excusable, if Mr. Musk could go a week without doing some batshit-crazy thing. Alas, he cannot.

Some details of the story are a bit murky, but it seems pretty clear from the parties' statements and conduct that Mr. Musk and Don Lemon entered into an agreement.  The agreement seems to have been that Mr. Lemon would have an interview show on Mr. Musk's social media platform, Twitter, which he calls X.  None of the terms of the agreement are public, but presumably, there is money involved, as Mr. Lemon referenced the "financial terms of the agreement" in the story linked to below.

Mr. Lemon attempted to launch the project with an extended interview with Mr. Musk. Apparently, the two men had different ideas about what was supposed to happen during that interview. Parts of it got very testy. Mr. Lemon challenged Mr. Musk, asking him whether he had any responsibility to engage in content moderation of hate speech on his platform and posed questions about Mr. Musk's drug use and whether there could be national security concerns associated with that drug use. Sometimes, Mr. Musk refused to answer, saying that he didn't have to answer questions from reporters. True enough. Sometimes, he gave self-serving answers that certainly did nothing to quell concerns that a man who controls vital national security infrastructure uses prescription drugs recreationally and not just as a public service. You can see the interview here:

Martha McHardy, writing for The Independent, reports that the deal was "axed" just hours after the interview was completed.  Let the lawyerspeak begin.  According to Twitter, "L]ike any enterprise, we reserve the right to make decisions about our business partnerships, and after careful consideration, X decided not to enter into a commercial partnership with the show."  

That's all fine, except that the platform announced that it would be hosting Mr. Lemon's show in January.  When Mr. Musk "axed" the deal, he did so by texting Mr. Lemon's agent, saying "the contract is canceled."  So while the lawyers for "X" are saying "not-X," X's owner is saying X.

In my language, people who "cancel" a contract without cause pay damages, but only if those damages can be proven with reasonable certainty. In this case, there appears to be no signed writing evidencing the terms of the deal. That's okay; there doesn't need to be a signed writing here.  The issue will be whether what Mr. Lemon calls "the financial terms of the agreement" are specified in sufficient detail to support an award of damages.  It seems from the interview that the two men had never previously met.  Presumably, there is a paper trail here.

Some of these clips are actually revelatory of more than just Mr. Musk's prickliness. He sometimes gives serious, seemingly earnest, seemingly truthful, although brief, answers to Mr. Lemon's questions.

A couple of notes. For much of the interview, Mr. Musk's affect is pretty normal.  He engages with Mr. Lemon in a fairly direct, straightforward way. Sometimes, when he doesn't want to answer a question and also doesn't want to refuse to answer the question, there are long pauses, and his eyes dart back and forth and you can almost hear him pondering, "What can I get away with saying here that will not get me into trouble and will also not be a bald falsehood?"  It's not a terrible thing for a thoughtful person to do, especially if the valuation of several companies turns on the answer.

One part of the interview that struck me as really odd was the question of whether CNN is a liberal media organization.  Mr. Musk insisted that "everybody thinks of" CNN as a left-wing media organization, and he implied that Mr. Lemon, having worked for CNN, is also part of the woke mob, or something akin to that. I don't watch cable news, even though I am now over sixty, and I think I have to turn in my AARP card if I'm not addicted by 65. I operate on the perhaps outmoded assumption that the three major cable news organizations had staked out their claims to the American right (Fox), left (MSNBC), and center (CNN). Now I believe there are two smaller companies to the right of Fox.  If CNN is now considered leftist, it may be evidence of the impact of the Trump presidency on the American political spectrum.

In any case, in the interview, Mr. Lemon posits, and Mr. Musk affirms, that Mr. Musk wanted Mr. Lemon's show to stream on Twitter because Mr. Musk wants his website to be a place where one can find content across the entire political spectrum. But then, according to Derrick Bryson Taylor writing in The New York Times, Mr. Musk explained that he was "canceling" his contract with Mr. Lemon, Mr. Musk complained that Mr. Lemon's approach "lacked originality" and was just "CNN on social media." There seems to be some tension between what Mr. Musk said in the interview and what Mr. Musk said in dissing the interview. Even if Mr. Musk wants to characterize his decision to cancel the contract as commercial rather than political, he should have made that determination before committing to have the show stream on his website. Did he really think the Don Lemon show on Twitter would be nothing like CNN Tonight with Don Lemon?

That kind of magical thinking is not how we will get to Mars.