ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Friday, February 24, 2017

Contracts in the Corporate Setting

Friday afternoon at KCON XII included an excellent panel on corporate contract law issues, including the new Benefit Corporation business entity form and exploring the problem of data privacy.  The notes are rough and may contain scribal errors, but they hopefully provide you the flavor of the proceedings.

KCON12-Corporate Panel

From left: Michael Dorff, Pamela Edwards, and Mark Gergen (not pictured--Summer Kim (Moderator))

Michael Dorff (Southwestern): "Benefit Corporations--Assessing the Assessment: B Lab's Effort to Measure Companies' Benevolence."  Only about 3,000 Benefit Corporations ("B Corps") exist in 31 states as a relatively new form of business entity. B Corps are required to consider community interests and social benefits rather than principally profits.  What does this different structure add?  Officers include Benefit Directors and Benefit Officers and allow a special kind of derivative suit. Ultimately the force toward social benefits seems to be toothless. The B Corp only works if you believe in it.  What makes this system work is the B Lab Certification Process. Thus, the certification contract matters more than the state statute. B Lab has the BIA, "the B Impact Assessment." Assessment tools need simplicity, reliability, validity, transparency, credibility, and efficiency. It must measure what people care about or no one will pay attention to the assessment. Professor's Dorff's paper assesses the viability and value of the B Lab assessment. Companies must want to engage in this process and it has to be doable. The BIA is heavily customized for company size, industry sector, etc. and to date 72 versions of the BIA exist. Companies must score 80 out of 200 to be certified. The BIA is ultimately simple, but comparing across categories is difficult.  Questionnaire is long and complicated, which makes it hard for companies. Fault is that BIA measures virtue (good intentions) rather than actual impact. Negative behavior does not deduct from the score. Points are not readily translatable--how does helping the homeless compare against preventing pollution. BIA is a good first cut at the problem, but more needs to be done.

Pamela Edwards (CUNY): "Have Public Benefit Corporations Benefitted the Public?" B Corps are valuable as an attempt to account for constituencies other than shareholders and their profit. This has been a problem since 1919 in corporate law. Moving away from that premise is valuable in changing what the premise is of a corporation. Notably, regular corporations seek to promote their actions as beneficial. Are B Corps actually helping anyone? Too early to tell--but it may be too optimistic to expect corporations to be agents of change due to the B Corp entity form.  Agrees with Professor Dorff that comparisons of different companies are difficult to make. The greater ability to challenge a corporation's decisions beyond the standard business judgment rule is a significant feature.  Notably, that was one of the purposes of B Lab's founders who had seen his corporate vision and culture destroyed after selling his business. Business entities are able to move in and out of being in the formal B Corp form. While that flexibility can be useful, it lessens the ultimate impact of the business form.

Mark Gergen (UC-Berkeley): "Privacy, Privity, and Collective Private Ordering." U.S. privacy law is in limited silos--FTC, HIPPA, etc., unlike the more comprehensive approach in Europe and elsewhere. Can breach of contract litigation fill the gap? Probably not--courts have been very hostile to privacy claims, frequently by misstating or ignoring established contract law, such as claims for disgorgement and restitution. Just because compensatory damages are not available does not mean that breach of contract claims are note available, yet that is where the privacy decisions are heading. Google and Facebook actually aren't the problems here, not because of damages but because of market forces.  The real problem is THIRD PARTIES--data brokers, against whom you can't bring a breach of contract action because you have no privity of contract. Europe and HIPPA (as a U.S. example) require that a contract exist containing consent.  That won't work with gateway data harvesters. The real way to solve this problem is to recognize a property right in personal privacy--but that's unlikely in the current political climate. Another possible solution: data firms must give a warranty that your data won't be acquired.  If a 3rd party acquires the data, then it is liable for tortious interference with contract.  The Yelp (review for hire vs. restaurant) case illustrates the viability of a tortious interference claim. Only way to get out of liability would be for the gateway firms to get a standard license. Here, private ordering doesn't require the creation of a property right. Ultimately, the tortious interference route may be our best hope for protecting personal data privacy.

KCON12-Logo

February 24, 2017 in Conferences | Permalink

Contracts IN THE FUTURE

So far in the future, they're on Mars. 

I've been doing a ton of traveling over the past few weeks, which is why my blogging has been so sporadic. One of the things I've been doing, therefore, is listening to lots of podcasts. So many podcasts that I've run out of many of my more news- or education-oriented ones, and so I started delving into a podcast called "Penumbra," which a friend recommended. Specifically the Juno Steel series of stories. "It's about an emotionally damaged, sardonic character," she said, "that sounds like your thing." Such is my reputation. 

But yeah, totally my thing. Juno Steel is a private investigator on Mars many centuries from now. The podcast plays around with the film noir genre, complete with hard-boiled narration. But the reason why I'm rambling about it on this blog is because the first episode, Juno Steel and the Case of the Murderous Mask, happens, delightfully, to revolve around contracts. The most powerful family in Hyperion City on Mars requires everyone who is allowed in their house to sign an intensely detailed contract. One of the characters remarks that they've seen novels shorter than the contract and would need a month to read the whole thing. They end up signing the contract without reading it, mostly because they'd already had to agree to a shortened version of it before receiving the long version. And the contract, of course, required them to reveal nothing about the family in question. So apparently, in the future, the powerful will still be surrounding themselves with NDAs! (Interestingly, the "liquidated damages," should you breach the contract, appeared to be that the wealthy family would broadcast all of your secrets. Mutually assured privacy destruction, I suppose!)

Part of the plot also involves an oral agreement that isn't properly captured by the subsequent written agreement, as well as forged signatures. I don't want to spoil it, but if you're looking for something somewhat more fun than the latest cases (although what is more fun than the latest cases???), you can give it a listen and still feel like you're Thinking About the Law. 

February 24, 2017 in Commentary, Web/Tech | Permalink | Comments (0)

The Challenges of Teaching Contracts: Materials and Tricks

More KCON presentation summaries from this morning, this time from a panel on Contracts teaching. Once again, apologies in advance for any inaccuracy in the notetaking.

  KCON12-Logo
Sean Scott (Loyola Los Angeles): "The Parol Evidence Rule--Video Presentation and Simulated Interviewing."
The Parol Evidence Rule is one of those subjects where, even in a generally Socratically-taught class, an innovative approach can be especially beneficial in getting the material across to the students. Professor Scott showed a video showing a flipped-classroom approach to teaching the PER, first describing the rule and then applying the rule to a filled-out form contract. The videos are assigned for viewing before class.  The pre-class videos get the students into depth of the issue much more quickly, raising issues of the extent to which the parties' agreement is integrated.  A second technique in the same PER unit involves bringing in an actor for a client interview where the topic turns to the initial discussions between the parties. The interview exercise drives home the application of the rule in a problematic area. Video units are subject to repeated viewing and students can listen to the material without being focused on notetaking. Video units provide variety in teaching methods. Interviewing-and-interactive learning (applying the rule) is better for long-term learning an retention.

David Epstein (Richmond): "Teaching Conditions." Conditions is one of the most difficult concepts for law students to grasp, and that seems to be true with students across the country. We won't get to answers here, but we can at least zero in on the difficulties. How can we address this area?  Some possibilities are the Contract Drafting/Tina Stark approach, which involves looking at contract documents. We may want to walk students through easily comprehended transactions--a home purchase contract and an insurance contract. Do cases really help here? If so, how much and what do they illustrate? Strict compliance? That courts disfavor conditions? That law abhors a forfeiture? Is it worth spending lots of classtime here to get across all of these concepts by a case? Problems may be much more effective. Students need to see the connection among these doctrines and rules. Where do conditions fit in relative to material breach? Where do conditions fit in connection with the excuse doctrines of impossibility and impracticability? These are related concepts where the parties do and don’t consider the circumstance. Students do not seem to benefit from extended class time spent on the question of constructive conditions.

Bob Brain (Loyola Los Angeles): "Policy, Structure, and Exercises Teaching the Parol Evidence Rule." Cases are problematic for teaching the PER because the students already know who "won" and then give up on understanding why. Another difficulty is that students have a moral rooting interest against the "liar" in a PER problem and decide that a liar-loses case is the right result for all cases. Professor Brain does not start with a case, but instead tries to explore the issue through problems that enable students to perceive the underlying tension in the PER and its exceptions.  The problems bring the students around to the legal question better than starting with a case.  Thinking transactionally, students come to realize that there are risks that arise from both allowing and not allowing parol evidence into the dispute.  Students need to realize that no matter what the rule is, sometimes the "bad guy" in the deal will win. Students have an easier time starting out with UCC 2-203 as the rule rather than the Restatement version, which is spread out over many sections.  Built the concepts on a chart, beginning with the level of integration and then evaluate the treatment of different types of terms. In sum, the approach is to illustrate policy, built the structure, and then drive home the meaning through exercises.

Carol Chomsky (Minnesota): "Rule Assembly for Misrepresentation" and "What I've Learned About Learning." (1) Misrepresentation is a difficult area to teach because the exceptions and categories are so diverse. The R2K sections better lend themselves to being taught broken out line by line--cutting the provisions apart. She gives the students only the global misrepresentation rule at first, and then students must assemble the special-case rules, even including the "and" and the "or" terms.  Students grasp what the logic is behind the Restatement rules because they assemble the rules themselves.  (2) Active learning is important--students need to interact and even move around the room. To stay engaged. Example--stand on a continuum of how much uncertainty the law should allow in enforceable contracts, and then quiz each other on why the students stand where they are standing. Spaced learning is important--revisit topics. Students actually grapple with a problem best before they know the answer. Even when students get the problems wrong, they learn better for having gone through the effort. Students need a structure--a framework in which to put the information that they learn. We should not give the students everything, but we do need to give the students something in which to assemble the material they learn. Students also need multiple opportunities to do what we test them on. Tell students why you are doing certain activities in the classroom--the "doing" exercises have a learning purpose, and students need to know. Professor Chomsky especially recommended the books Make It Stick, and Small Teaching for further reading.

Ben Templin (Thomas Jefferson): "Modern Case Method." Collectively, we've identified the problems of (1) time constraints, (2) building competency, (3) student engagement, (4) experiential learning and outcome assessment. Modern case method accounts for Bloom's taxonomy and other understanding about learning (e.g., cognitive load theory) in use of cases in legal education.  Beyond Bloom's, a focus on skills of meta-cognition skills has emerged--self evaluation and improvement.  The main benefit of Langdell's traditional case method is its ability to build inductive reasoning. Cognitive load theory is concerned with how one acquires long-term memory. Information learned must work through sensory memory, into working memory, and finally into long-term memory by a schema--structures that enable the reduction of cognitive load in taking in information. Millennial learning experience is particularly ill-suited to the traditional case method.  The modern case method intends to reduce cognitive load by establishing prior knowledge and schema. Use of pre-testing and other assessment to improve accountability.

February 24, 2017 in Conferences | Permalink | Comments (0)

Reconsidering Remedies

KCON12-Logo

Here are some notes from this morning's stimulating panel on contract remedies. Due apologies to the presenters for any notetaking errors, as those are entirely the fault of this writer. 

KCON12-Remedies Panel

Pictured from left: Dov Waisman, Moshe Gelbard, Jean Powers, and Shawn Bayern

Shawn Bayern (Florida State): "The Limitation of the Expectation Interest in Contract Law."  The justification for expectation damages frequently does not work out given real situations and goals of contracting parties.  Reliance damages are frequently the more just means to compensate the parties, particularly where the breaching party did not "intend" to contract. Expectancy is unduly harsh as compared to the moral fault of the breaching party. Courts will do reach this result sometimes, by recognizing a mistaken contract as reversible. Unilateral mistake is the least controversial situation in which to prefer reliance damages over expectancy. A second scenario is in cases of apparent agency.  A harder case for this argument is interpretive mistake--such as when the offer-and-acceptance communication is worded inartfully, causing confusion but objective contract formation occurs. Pure expectancy would disproportionately harm the breaching party as compared to the moral harm arising from breaching a promissory obligation. Where there has been little reliance, expectation does not tend to be fair.  One of the great fairness benefits of expectation damages is dealing with the price changes in rapidly moving prices, but many parties don't enter a contract for the purpose of fixing a price. They have other interests in mind, and there is less of an economic justification for the expectancy damages. The problem with any generalized rule in contract law is that it does not fit the wide variety of things that parties actually are doing when they enter into a contract.  That said, reliance seems to be the better fit for protecting the parties in more cases. Expectancy damages may just be a happy coincidence in protecting the parties as a remedy.  Better approach would be a generalized reliance remedy along with a limited disgorgement add-on. ("Reliance plus disgorgement.").  We many not need a forward-looking remedy to protect contracting parties. Contract law would benefit from tort-law like remedies, including moving reliance damages to the front of the line in contract remedies.

Jean Powers (South Texas): "Paying for What You Get--Restitution for Breach of Contract." The Restatement (Third) of Restitution and Unjust Enrichment (R3UR) speaks with a forked tongue and may be causing more confusion than benefit in the field of contract remedies. It tends to reject the view of "restitution for breach" based on unjust enrichment, though elsewhere (e.g., section 36) it addresses the idea of restitution for a party not in default.  Restitution tends to be the least desirable remedy in contract law, a last fallback position where nothing else is adequate. Contract law also dislikes the idea that party could get better recovery in restitution than if the contract had been performed.  Section 38 of R3UR deals entirely with contract damages, which is odd, given the subject of this restatement. The R3UR tends to add confusion to remedies questions by adding new terminology and inconsistent use of contract principles. Ultimately the principles of restitution and of contract law are not incompatible, but they have complicated the question of remedies. Section 38 may undercompensate, but section 39 (opportunistic breach) may overcompensate.  Section 39 seems to want to bring back the failed experiment with the tort of "bad faith breach of contract."

Dov Waisman (Southwestern): "The Hadley Rule and After-Arising Risks." Contract liability is narrower than tort liability based on the rule requiring foreseeability at the time of contracting (rather than the tort concept of proximate cause at the time of the tort). The rule has been justifies in many ways, including due to its fairness component in that a foreseeability standard best empowers both parties with the ability to protect themselves. The Hadley v. Baxendale rule should, however, be relaxed in the case of willful breach (intentional or recklessness in the breach). The general rationale for this modification for an after-arising risk is that the parties did not have an opportunity to protect themselves. The defendant's fairness objection is far weaker than that of the plaintiff given a circumstance that what was unforeseeable to both at the time of the initial contracting.  Extra liability would attach only if the defendant was willful in its breach and the plaintiff did not disclose the added damage risk because it had no reason to do so at the time of contracting. An example of this corrective rule is the 1992 Connecticut case of Savaroso v. Aetna--employee Savaroso was wrongfully terminated and that termination caused her greater damages because of her mental state, but her psychiatric situation was neither known nor foreseeable at the time of contracting (1982), through it was known at the time of the willful breach (1985) when Aetna wrongfully terminated Savaroso. Here, the traditional Hadley rule--and its information forcing rationale--does not work to justly compensate the parties. 

Moshe Gelbard (Netanya Academic College): Panel Moderator.

 

February 24, 2017 in Conferences | Permalink

A Great Day in L.A. for Some Contract Law...and for the Official Unofficial KCON Meme

Greetings from the Omni Los Angeles at California Plaza!  Looks like a fantastic first day for the 12th International Conference on Contracts.

KCON XII Hotel Morning

I would be remiss if I didn't post the official unofficial KCON meme:

KProf Meme

Two panels feature first this morning: Reconsidering Remedies with Shawn Bayern (Florida State), Jean Powers (South Texas), and Dov Waisman (Southwestern), moderated by Moshe Gelbard (Netanya); and Taking a Second Look with Sid DeLong (Seattle), Hila Keren (Southwestern), Meredith Miller (Touro), and Guy Rub (Ohio State), moderated by Keith Rowley (UNLV).

February 24, 2017 in Conferences | Permalink

Thursday, February 23, 2017

Casablanca Nights at KCON!

Thanks to a ContractsProf Blog exclusive news leak, we can reveal here and now the theme for Friday evening's festivities. But, since I don't feel up to the task of so monumental an announcement, let's turn it over to Bogie:

Casblanca Bogart

Or more to the point, prepare to walk into Casablanca Nights! The KCON XII organizers have already outdone themselves with an excellent contract-law focused substantive program, and we can now add an extravagantly-themed Moroccan feast to the festivities.

So, as we kickoff the Twelfth International Conference on Contracts at Southwestern Law School, prepare for some excellent quality time with kindred-spirit colleagues. As Bogart would undoubtedly say about this year's KCON:

Casablanca-quotes-beginning-friendship

I look forward to seeing colleagues and friends Friday morning.

 

February 23, 2017 in Conferences | Permalink | Comments (0)

No Deal, No Exchange of Money or Possession, No Ownership in Elvis Guitar

The National Music Museum (“NMM”), located in South Dakota, brought suit against Larry Moss and Robert Johnson asking the court to declare it the legal owner of a Martin D-35 guitar formerly owned by Elvis Presley. Images

Moss and Johnson, both interested in collectibles, have been friends for thirty-five years. In 2007, Johnson contacted Moss stating that he may be interested in acquiring three guitars previously owned by Elvis, which included the D-35. Johnson originally was going to negotiate a deal for Moss to buy all three guitars for $95,000 from a third-party seller. In 2007, a two-part contract for $120,000 was finally drafted stating that (1) Moss would pay Johnson $70,000 and take immediate possession of two of the guitars, and (2) that Johnson would deliver two remaining guitars – including the D-35 – in exchange for the remaining $50,000.

At trial, Moss testified about the 2007 interaction and said, “Well, we never had a deal. I never gave him the money. He never gave me any guitars. There was no deal.” Moss’s actions in 2007 and from 2008-2010 are consistent. Moss never asserted title of the Martin D-35 during either time period because Moss did not believe he had title to the guitar. Moss knew he would not own the Martin D-35 until Johnson delivered it and Moss paid him for it. Because delivery never occurred, Moss never acquired title to the Martin D-35.

Nonetheless, in 2013, Moss contacted a friend of Johnson's inquiring about the status of the D-35. Moss then contacted the NMM where the guitar was on display claiming that he owned the D-35. A lawsuit was filed and removed to federal court seeking declaratory judgment on who was the rightful owner of the guitar.

Under Article 2 of the Uniform Commercial Code, which is the governing law for Tennessee and South Dakota, “[u]nless otherwise explicitly agreed title passes to the buyer at the time and place at which the seller completes performance with reference to the physical delivery of the goods . . . .” Tenn. Code Ann. § 47-2-401(2) (2008); SDCL 57A-2-401(2). Here, Johnson never physically delivered the Martin D-35 to Moss. Moss never had physical possession of the Martin D-35. Because Johnson never delivered the guitar and Moss never had possession of it, Moss never acquired title to the Martin D-35. Peeps-with-guitar

Furthermore, in spite of Moss's attempt to seek specific performance under a breach of contract theory, the court did not find this persuasive because the contract specifically stated that Moss would not pay the $50,000 balance until there had been delivery of the guitar. Based on the plain text of the contract, delivery was set to be a future date. Additionally, Moss and Johnson exchanged emails for five years, but Moss never asked Johnson to deliver the guitar, nor did he claim to the owner of the guitar. As a result, the court found Johnson had the title to the D-35 guitar, and transferred it to the NMM. Thus, the NMM is the rightful owner of the guitar.

The case is National Shrine Museum; America’s Shrine to Music v. Robert Johnson and Larry Moss.

 

February 23, 2017 in Celebrity Contracts, Current Affairs, Famous Cases, In the News, Music | Permalink | Comments (0)

Weekly Top Ten SSRN Contracts Downloads (February 23, 2017)

Top-10-thumbsup

SSRN Top Downloads For SSRN Logo2
Contracts & Commercial Law eJournal

RECENT TOP PAPERS for all papers first announced in the last 60 days
25 Dec 2016 through 23 Feb 2017

Rank Downloads Paper Title
1 771 Risk and Anxiety: A Theory of Data Breach Harms
Daniel J. Solove and Danielle Keats Citron
George Washington University Law School and University of Maryland Francis King Carey School of Law
2 309 Empirical Findings on International Arbitration: An Overview
Christopher R. Drahozal
University of Kansas School of Law
3 212 Rise of the Digital Regulator
Rory Van Loo
Boston University School of Law
4 143 Interpreting Contracts via Surveys and Experiments
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
5 127 Interpretation and Construction in Contract Law
Gregory Klass
Georgetown University Law Center
6 126 Comparative Contract Law and Development: The Missing Link?
Mariana Pargendler
Fundação Getulio Vargas Law School at São Paulo
7 123 What Brexit Means for the Interpretation and Drafting of Financial Contracts
Matthias Lehmann and Nihal Dsouza
University of Bonn and University of Bonn
8 118 Contracting Over Privacy: Introduction
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
9 104 The Deformation of Contract in the Information Society
Margaret Jane Radin
University of Michigan Law School
10 88 The Limits of Interpretation in the Law of Contract
Andrew Robertson
Melbourne Law School

 

SSRN Top Downloads For SSRN Logo2
Law & Society: Private Law - Contracts eJournal

RECENT TOP PAPERS for all papers first announced in the last 60 days
25 Dec 2016 through 23 Feb 2017

Rank Downloads Paper Title
1 212 Rise of the Digital Regulator
Rory Van Loo
Boston University School of Law
2 143 Interpreting Contracts via Surveys and Experiments
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
3 127 Interpretation and Construction in Contract Law
Gregory Klass
Georgetown University Law Center 
4 126 Comparative Contract Law and Development: The Missing Link?
Mariana Pargendler
Fundação Getulio Vargas Law School at São Paulo
5 118 Contracting Over Privacy: Introduction
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
6 107 History and Theory of Good Faith Performance in the United States
Steven J. Burton
University of Iowa - College of Law
7 104 The Deformation of Contract in the Information Society
Margaret Jane Radin
University of Michigan Law School
8 101 Failures in Law Making: The Case of Arbitration Law in India
Badrinath Srinivasan
Independent
9 88 The Limits of Interpretation in the Law of Contract
Andrew Robertson
Melbourne Law School
10 68 Contract Exposition and Formalism
Gregory Klass
Georgetown University Law Center

 

February 23, 2017 in Recent Scholarship | Permalink | Comments (0)

Wednesday, February 22, 2017

KCON XII Schedule for Saturday, February 25 (Day Two)

(Post 2 of 2)

The Twelfth International Conference on Contracts kicks off this Friday! This year's model of ContractProf Blog's favorite conference, better known as KCON, will be held at Southwestern Law School in Los Angeles, and yours truly will be blogging from the event. While I hesitate to promise true live blogging, I'm confident--having recently taught my 1Ls the concept of quasi-contractual obligations--that "quasi-live blogging" is well within the realm of possibility. I look forward to the fun and quality time with our readers and colleagues this weekend.

Below, for your reading pleasure, is the final schedule for the second day of the conference.  The first day's schedule is posted here.  Day two highlights include the keynote address, "Enhancing Moral Relationships Through Strict Liability," delivered by Seana Shiffrin, Professor of Philosophy, UCLA & Pete Kameron Professor of Law & Social Justice, UCLA Law School.

KCON12-Logo

SATURDAY, FEBRUARY 25

8:30 - 9:00 a.m. Registration and Continental Breakfast (3rd Floor Lobby)

9:00 - 10:00 a.m. Panel Session 5

Contract Law: Looking Toward Asia (BW 390)

Mindy Chen-Wishart, Oxford University

Moderator: Tan Zhong Xing, National University of Singapore

10:00 - 10:15 a.m. Break (3rd Floor Lobby)

10:15 - 11:45 a.m. Panel Session 6

Theorizing Contract Law (BW 390)

Eli Bukspan, The Interdisciplinary Center, Herzliya, Radzyner Law School "Direct Incidence of Human Rights in the Private Sphere: Contract Law as the Missing Link"

Peter Gerhart, Case Western Reserve University School of Law "Promises and Obligations"

Enrique Guerra-Pujol, University of Central Florida, College of Business Administration "Illegal/Immoral Promises"

Nathan Oman, William & Mary Law School "The Dignity of Commerce: Markets and the Moral Foundations of Contract Law"

Moderator: Carol Sanger, Columbia Law School

Empirical Approaches (BW 370)

Gaston De Los Reyes, The George Washington University School of Business "Not From Guile But From Entitlement: Lawful Opportunism Haunts the Cracks in Contracts"

Colin Marks, St. Mary’s University School of Law "Online Terms and Conditions"

Christopher Odinet, Southern University Law Center "Bitcredit"

Moderator: Michael Kelly, University of San Diego School of Law

12:00 – 1:30 p.m. Lunch and Keynote Address (Louis XVI Room, 2nd Floor)

"Enhancing Moral Relationships Through Strict Liability" Seana Shiffrin, Professor of Philosophy, UCLA & Pete Kameron Professor of Law & Social Justice, UCLA Law School

1:45 – 3:15 p.m. Panel Session 7

Contract Law Meets Reality (BW 390)

Rachel Arnow-Richman, University of Denver, Sturm College of Law "Noncompetition, Good Faith, and the Bilateral Employment Contract"

Allen Kamp, John Marshall Law School "Wellness Programs and Consent"

Thomas Joo, UC Davis School of Law "The Law in the High Castle: Breach of Contract and Alternative History"

Eric Zacks, Wayne State UniversitySchool of Law "The Statute of Limitations and Acceleration Clauses in Mortgage Foreclosure Cases"

Moderator: Keith Rowley, UNLV Boyd School of Law

Inside the UCC (BW 370)

Robert Brain, Loyola Law School, Los Angeles "A Proposal to Eliminate UCC 2-315"

Jennifer Martin, St. Thomas University School of Law "Contracting to Address Human Rights Violations in Supply Agreements"

Daniel O’Gorman, Barry University, Dwayne O. Andreas School of Law "Contract Law’s Predominant Purpose Test and the Law/Fact Dichotomy" Moderator: Mark Wessman, Tulane University Law School

3:15 - 3:30 p.m. Break (3rd Floor Lobby)

3:30 - 5:00 p.m. Panel Session 8

Contracts in the Digital Age (BW 370)

Daniel Barnhizer, Michigan State University College of Law "Exploring the Normative Implications of Automation of Contract Law and Dispute Resolution"

Nicolas Cornell, University of Pennsylvania, Wharton School of Business "Smart Contracts and Ex Post Adjudication"

Michael Malloy, University of the Pacific, McGeorge School of Law "Contracts in a Digital Age: My Teenage Tech Advisors Rescue Dad"

Moderator: Mark Burge, Texas A&M University School of Law

Intimate Contracts, Consent & Commodification (BW 390)

Orit Gan, Sapir College, School of Law "Gett Abuse"

Nancy Kim, California Western School of Law "Consentability: Are There Limits to Consent?"

Carol Sanger, Columbia Law School "Contracting for Abortion"

Deborah Zalesne, CUNY School of Law "Choosing ‘Choice’ in the Age of Art"

Moderator: Kaiponanea Matsumura, Arizona State University, Sandra Day O’Connor College of Law

5:00 - 5:15 p.m. Closing Remarks (BW 390)

Southwestern-law-school-logo

February 22, 2017 in Conferences, Contract Profs | Permalink

KCON XII Schedule for Friday, February 24 (Day One)

(Post 1 of 2)

The Twelfth International Conference on Contracts kicks off this Friday! This year's model of ContractProf Blog's favorite conference, better known as KCON, will be held at Southwestern Law School in Los Angeles, and yours truly will be blogging from the event. While I hesitate to promise true live blogging, I'm confident--having recently taught my 1Ls the concept of quasi-contractual obligations--that "quasi-live blogging" is well within the realm of possibility. I look forward to the fun and quality time with our readers and colleagues this weekend.

Below, for your reading pleasure, is the final schedule for the first day of the conference.  Day one highlights include the presentation of the KCON Lifetime Achievement Award to Deborah Post.  You can find the Saturday schedule in a subsequent post.

KCON12-Logo

FRIDAY, FEBRUARY 24

8:15 - 8:45 a.m. Registration and Continental Breakfast (3rd Floor Lobby)

8:45 - 9:00 a.m. Welcome and Opening Remarks (BW 390) Susan Westerberg Prager Dean and CEO, Southwestern Law School

9:00 - 10:30 a.m. Panel Session 1:

Reconsidering Remedies (BW 370)

Shawn Bayern, Florida State University College of Law "The Limitations of the Expectation Interest in Contract Law"

Jean Powers, South Texas College of Law "Paying for What You Get—Restitution for Breach of Contract"

Dov Waisman, Southwestern Law School "The Hadley Rule and After-Arising Risks"

Moderator: Moshe Gelbard, The Netanya Academic College School of Law

Taking a Second Look (BW 390)

Sidney DeLong, Seattle University School of Law "The Farmer and the Cowman Should Be Friends: Coase, Cows, Corn, and Coercion"

Hila Keren, Southwestern Law School "Emotional Value and the Value of Emotions"

Meredith Miller, Touro Law Center "One Judge’s Legacy and the New York Court of Appeals: Mr. Justice Cardozo and the Law of Contracts"

Guy Rub, The Ohio State University, Moritz College of Law "Copyright Survives: The Copyright-Contract Conflict Revisited"

Moderator: Keith Rowley, UNLV Boyd School of Law

10:30 - 10:45 a.m. Break (3rd Floor Lobby)

10:45 - 12:15 p.m. Panel Session 2

Comparative & International Perspectives (BW 370)

Reza Beheshti, University of Nottingham School of Law (unfortunately banned from participating in person by Executive Order; participating via Skype) "Whether the Doctrine of ‘Adequate Assurance’ Should Be Introduced Into English Contract Law"

Charles Calleros, Arizona State University, Sandra Day O’Connor College of Law "U.S. Unconscionability and Article 1171 of the New French Civil Code: Achieving Balance in Statutory Regulation and Judicial Intervention"

Robert E. Lutz, Southwestern Law School "The Role of ‘Contracts’ in International Law: Treaties and Arbitration"

Moderator: Lauren Willis, Loyola Law School, Los Angeles

The Challenges of Teaching: Materials and Tricks (BW 390)

Carol Chomsky, University of Minnesota Law School Materials: "Casebooks and the Future of Contracts Pedagogy"

Benjamin Templin, Thomas Jefferson School of Law Materials: "The Future of Casebooks"

David Epstein, University of Richmond School of Law Tricks: "Teaching Conditions"

Sean Scott, Loyola Law School, Los Angeles Tricks: "Parol Evidence Rule"

Robert Brain, Loyola Law School, Los Angeles Tricks: "Parol Evidence Rule"

Moderator: Charles Knapp, UC Hastings College of the Law

12:30 - 1:45 p.m. Lunch and Keynote Panel (Salle Moderne, 5th Floor) "Negotiating Complex Contracts: Behind the Scenes of the La Guardia Project" Harout Dimijian (Associate), M. Elizabeth Dubeck (Partner), Denise Raytis (Partner), Eric A. S. Richards (Partner), O’Melveny & Myers, LLP

2:00 - 3:30 p.m. Panel Session 3

Application of Contract Principles in the Entertainment Industry (BW 390)

Michael Blaha, Law Offices of Michael R. Blaha "Protection of Idea Disclosures by Implied-in-Fact Contracts"

Kia Kamran, Attorney at Law "The Esoteric Nature of Music Agreements"

Robert Lind, Southwestern Law School "Contracts and the Intersection with Copyright Termination"

Moderator: Danni Hart, Southwestern Law School

Contracts in the Corporate Setting (BW 370)

Michael Dorff, Southwestern Law School "Assessing the Assessment: B Lab’s Effort to Measure Companies’ Benevolence"

Pamela Edwards, CUNY School of Law "Have Public Benefit Corporations Benefitted the Public? The Rise of PBCs in the Service of Social Justice"

Mark Gergen, UC Berkeley School of Law "Privacy, Privity, and Collective Private Ordering"

Moderator: Summer Kim, UC Irvine School of Law

3:30 - 3:45 p.m. Break (3rd Floor Lobby)

3:45 - 5:15 p.m. Panel Session 4

The Contracting Process: Behavioral & Experimental Perspectives (BW 390)

Eyal Zamir, Hebrew University of Jerusalem, Faculty of Law "Marketing Techniques, Pricing Methods, and the Law of Consumer Contracts"

Russell Korobkin, UCLA School of Law "Bargaining with the CEO: The Case for ‘Negotiate First, Choose Second’"

Tess Wilkinson-Ryan, University of Pennsylvania Law School "The Perverse Consequences of Disclosing Standard Terms"

Dave Hoffman, University of Pennsylvania Law School "From Promise to Form: How Contracting Online Changes Consumers"

Moderator: Deborah Post, Touro Law Center

5:15 - 5:25 p.m. Short Break (3rd Floor Lobby)

5:25 - 5:55 p.m. The Legacy of Deborah Post: Lifetime Achievement Award Recipient (BW 390)

Meredith Miller, Touro Law Center Deborah Zalesne, CUNY School of Law Moderator: Danni Hart, Southwestern Law School

6:00 - 6:30 p.m. Reception

6:30 - 9:00 p.m. Dinner, Lifetime Achievement Award, Live Music (Louis XVI Room, 2nd Floor)

Southwestern-law-school-logo

 

February 22, 2017 in Conferences, Contract Profs | Permalink | Comments (0)

Sunday, February 19, 2017

The Contracts Case that No Judge Wants to Hear

In McNair v. Superior Court (6 Cal.App.5th 1227 (Cal. App. 2016), a college football coach brought suit against National Collegiate Athletic Association (“NCAA”) for, among other issues, interference with and breach of contract. That’s hardly unusual. What is unusual is the fact that the case has so far been assigned to … eight judges in five years!

In 2011, for example, NCAA moved t Maricopa-County-Judges
strike McNair’s complaint under the California anti-SLAPP statute. The trial court denied that motion. The NCAA appealed. The appellate court affirmed in “large part, but reversed a small portion.” The NCAA then filed a second peremptory challenge to the trial judge who had denied the anti-SLAPP motion. Without even giving McNair a chance to file an opposition but with full knowledge that an opposition was, in fact, forthcoming, the trial judge disqualified himself. McNair petitioned for a write of mandate contending that the trial court erred as a matter of law and asking the appellate court to issue a write directing the court to vacate its order accepting the postappeal peremptory challenge.

The appellate court this time pointed out that under California law, peremptory challenges to judges may only be filed following a “final judgment.” Cal. Civ. Proc. Code § 170.6(a)(2). A denial of an anti-SLAPP motion is not a final judgment, said the court. NCAA argued that McNair’s writ petition should be denied because, among other things, McNair had not suffered prejudice. However, the court found that McNair had indeed been prejudiced by the trial court’s “abrupt decision” to accept the NCAA’s peremptory challenge before he could oppose it. The court granted McNair’s petition. The case was thus sent back to … the same judge who didn’t want it. Not very reassuring to any of the parties or the general public’s faith in a fair legal system, I am sure. Neither is the fact that our system allows for so many judges in the same case in one single case. Too much and too little… this case definitely seems to be one of too much.

February 19, 2017 in Contract Profs, Sports | Permalink | Comments (0)

Thursday, February 16, 2017

Weekly Top Ten SSRN Contracts Downloads (February 16, 2017)

Top-10 Scrolling

SSRN Top Downloads For SSRN Logo2
Contracts & Commercial Law eJournal

Rank Downloads Paper Title
1 751 Risk and Anxiety: A Theory of Data Breach Harms
Daniel J. Solove and Danielle Keats Citron
George Washington University Law School and University of Maryland Francis King Carey School of Law
2 304 Empirical Findings on International Arbitration: An Overview
Christopher R. Drahozal
University of Kansas School of Law
3 193 Rise of the Digital Regulator
Rory Van Loo
Boston University School of Law
4 163 Introduction to Contract, Status, and Fiduciary Law
Paul B. Miller and Andrew S. Gold
McGill University Faculty of Law and DePaul University College of Law
5 131 Interpreting Contracts via Surveys and Experiments
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
6 120 The New Sharing Economy: The Role of Property, Tort and Contract Law for Managing the Airbnb Model
Chad G. Marzen, Darren A. Prum and Robert J. Aalberts
Florida State University, Florida State University and University of Nevada, Las Vegas
7 117 Comparative Contract Law and Development: The Missing Link?
Mariana Pargendler
Fundação Getulio Vargas Law School at São Paulo
8 113 Contracting Over Privacy: Introduction
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
9 105 Calling on the CFPB for Help: Telling Stories and Consumer Protection
Pamela Foohey
Indiana University Maurer School of Law
10 102 What Brexit Means for the Interpretation and Drafting of Financial Contracts
Matthias Lehmann and Nihal Dsouza
University of Bonn and University of Bonn

 

SSRN Top Downloads For SSRN Logo2
Law & Society: Private Law - Contracts eJournal

Rank Downloads Paper Title
1 193 Rise of the Digital Regulator
Rory Van Loo
Boston University School of Law
2 163 Introduction to Contract, Status, and Fiduciary Law
Paul B. Miller and Andrew S. Gold
McGill University Faculty of Law and DePaul University College of Law
3 131 Interpreting Contracts via Surveys and Experiments
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
4 117 Comparative Contract Law and Development: The Missing Link?
Mariana Pargendler
Fundação Getulio Vargas Law School at São Paulo
5 113 Contracting Over Privacy: Introduction
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
6 103 History and Theory of Good Faith Performance in the United States
Steven J. Burton
University of Iowa - College of Law
7 100 Failures in Law Making: The Case of Arbitration Law in India
Badrinath Srinivasan
Independent
8 84 The Limits of Interpretation in the Law of Contract
Andrew Robertson
Melbourne Law School
9 82 The Hague Choice of Law Principles, CISG and PICC: A Hard Look at a Choice of Soft Law
Brooke Adele Marshall
Max Planck Institute for Comparative and International Private Law
10 71 The Deformation of Contract in the Information Society
Margaret Jane Radin
University of Michigan Law School

February 16, 2017 in Recent Scholarship | Permalink | Comments (0)

Sunday, February 12, 2017

The University of the Cumberlands Fights Its Former President over Consideration

 University of the Cumberlands Welcome Sign

A recent case out of the Eastern District of Kentucky, Taylor v. University of the Cumberlands, Civil No: 6:16-cv-109-GFVT (behind paywall), has lots of causes of action, including an interesting dispute over whether an agreement between the university and its former President and Chancellor was supported by consideration. 

While the decision itself, granting in part and denying in part the university's motion to dismiss, is behind a paywall, the dispute has been reported and described in the press. Dr. Taylor served as the President of the university for 35 years. He alleged that the school had agreed to pay him and his wife almost $400,000 annually after his retirement until they were both dead. The school disputed the validity of that agreement. The Taylors then brought several claims against the university, including breach of contract. 

On the motion to dismiss, the main contract argument involved consideration. The university argued that the contract was given in recognition of the Taylors' successful fundraising efforts and service to the school, which had already occurred. This, the university contended, meant it was past consideration and rendered the agreement unenforceable. 

The court acknowledged that the agreement discussed the Taylors' past behavior. However, the court also identified five current promises the Taylors made under the agreement: to continue to serve as president until he decided to retire; to accept the role of Chancellor until he decided to retire; to serve as an Ambassador of the university; to serve the university in any capacity requested; and to continue to fundraise for the university. Therefore, there was consideration. 

The university then argued that the agreement had no definite end date, which would mean it was terminable at will. However, the court noted that that rule applies to contracts that would otherwise run forever. In such a circumstance, the right to terminate at will can be considered appropriate. In this case, the contract would terminate once both of the Taylors were dead. No one knew when that date would be, but presumably the Taylors will not live forever and therefore the contract will not run forever. Therefore, the contract was not terminable at will, and the Taylors lived to fight another day on their breach of contract claim (although the court noted that there were significant disputes surrounding the execution of the agreement and its proper interpretation). 

February 12, 2017 in In the News, Labor Contracts, Recent Cases, Teaching, True Contracts | Permalink | Comments (0)

Thursday, February 9, 2017

Weekly Top Ten SSRN Contracts Downloads (February 9, 2017)

Top10-Electric


SSRN Top Downloads For SSRN Logo2
Contracts & Commercial Law eJournal

Rank Downloads Paper Title
1 739 Risk and Anxiety: A Theory of Data Breach Harms
Daniel J. Solove and Danielle Keats Citron
George Washington University Law School and University of Maryland Francis King Carey School of Law
2 296 Empirical Findings on International Arbitration: An Overview
Christopher R. Drahozal
University of Kansas School of Law
3 169 Rise of the Digital Regulator
Rory Van Loo
Boston University School of Law
4 157 Introduction to Contract, Status, and Fiduciary Law
Paul B. Miller and Andrew S. Gold
McGill University Faculty of Law and DePaul University College of Law
5 110 The New Sharing Economy: The Role of Property, Tort and Contract Law for Managing the Airbnb Model
Chad G. Marzen, Darren A. Prum and Robert J. Aalberts
Florida State University, Florida State University and University of Nevada, Las Vegas
6 108 Comparative Contract Law and Development: The Missing Link?
Mariana Pargendler
Fundação Getulio Vargas Law School at São Paulo
7 97 Calling on the CFPB for Help: Telling Stories and Consumer Protection
Pamela Foohey
Indiana University Maurer School of Law
8 92 Interpreting Contracts via Surveys and Experiments
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
9 91 Contracting Over Privacy: Introduction
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
10 87 Behavioral Law & Economics Goes to Court: The Fundamental Flaws in the Behavioral Law & Economics Arguments Against No-Surcharge Laws
Todd J. Zywicki, Geoffrey A. Manne and Kristian Stout
George Mason University - Antonin Scalia Law School, Faculty, International Center for Law & Economics (ICLE) and International Center for Law and Economics

 

SSRN Top Downloads For SSRN Logo2
Law & Society: Private Law - Contracts eJournal

Rank Downloads Paper Title
1 169 Rise of the Digital Regulator
Rory Van Loo
Boston University School of Law
2 157 Introduction to Contract, Status, and Fiduciary Law
Paul B. Miller and Andrew S. Gold
McGill University Faculty of Law and DePaul University College of Law
3 108 Comparative Contract Law and Development: The Missing Link?
Mariana Pargendler
Fundação Getulio Vargas Law School at São Paulo
4 99 History and Theory of Good Faith Performance in the United States
Steven J. Burton
University of Iowa - College of Law
5 99 Failures in Law Making: The Case of Arbitration Law in India
Badrinath Srinivasan
Independent
6 92 Interpreting Contracts via Surveys and Experiments
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
7 91 Contracting Over Privacy: Introduction
Omri Ben-Shahar and Lior Strahilevitz
University of Chicago Law School and University of Chicago Law School
8 79 The Limits of Interpretation in the Law of Contract
Andrew Robertson
Melbourne Law School
9 77 The Hague Choice of Law Principles, CISG and PICC: A Hard Look at a Choice of Soft Law
Brooke Adele Marshall
Max Planck Institute for Comparative and International Private Law
10 66 Unbundling Efficient Breach: An Experiment
Maria Bigoni, Stefania Bortolotti, Francesco Parisi and Ariel Porat
University of Bologna - Department of Economics, University of Cologne - Faculty of Management, Economics and Social Sciences, University of Minnesota - Law School and Tel Aviv University

 

February 9, 2017 in Recent Scholarship | Permalink

Tuesday, February 7, 2017

Wrongful Termination of Law Professors

Our colleagues at The Faculty Lounge wrote an interesting blog post about the alleged wrongful termination of half of Charlotte Law School's faculty after the recent demise of that particular school.  See the article here.

 

February 7, 2017 | Permalink

Monday, February 6, 2017

Federal Law Bans Gag Clauses

We’ve written about non-disparagement or “gag” clauses in wrap contracts on this blog in the past.  These clauses prohibit consumers from writing negative reviews about a company and typically impose a penalty or fee if the consumer does so.  California already has a law which prohibits them and now there’s a federal law.  The Consumer Review Fairness Act (CRFA) prohibits gag clauses and intellectual property transfer clauses in consumer form contracts.  (The prohibition on IP transfers is intended to prevent companies from using the DMCA takedown provisions to get posted content removed).  “Form contract” is defined as a contract with standardized terms “imposed on an individual without a meaningful opportunity for such individual to negotiate the standardized terms.”  Form contract does not include an employment or independent contractor contract.  The CRFA permits state attorney generals to bring a civil action on behalf of state residents.  The Federal Trade Commission may also institute action or intervene in a pending action.    

The law goes into effect for on March 14, 2017.

February 6, 2017 in Current Affairs, Legislation, Web/Tech | Permalink | Comments (0)

Sunday, February 5, 2017

A Holiday Decoration Lawsuit!

The holiday season feels like it happened so long ago, but, if you make yourself think way back to that distant era of our history, you may recall that suddenly spotlights that broadcast dancing snowflakes or other festive decorations onto houses were everywhere. 

Now they're in court, too. A case recently removed to the District of New Jersey, Closeout Surplus & Salvage CSS, Inc. v. Sears Outlet, LLC, Docket No. 2:17-cv-00104-KSH-CLW (behind paywall), involves the "Glow Bright" version of these lights. Here's a video of Glow Bright laser light show, to refresh your recollection and also maybe revive a little holiday spirit. 

The plaintiff, Closeout, alleged that it had an exclusive right to sell the Glow Bright with tripod and remote and began selling and advertising the product online. The plaintiff alleges that Sears, the defendant, appropriated the plaintiff's advertising and began advertising that it, too, was selling the Glow Bright with tripod and remote. However, the plaintiff alleges that only it had the right, via contract, to sell the Glow Bright with tripod and remote. It appears from the allegations that Sears was only selling the Glow Bright alone but, in appropriating plaintiff's advertisements, it looked to consumers like Sears was selling the Glow Bright with the tripod and remote.  

The plaintiff has therefore sued Sears for tortious interference with contractual relationship and/or prospective economic benefits and unfair trade practices and unfair competition. The suit was just removed to federal court at the beginning of January and Sears has not yet answered the complaint, but I'll keep an eye on it to give you the latest updates in holiday decoration law. 

February 5, 2017 in Film Clips, Recent Cases, True Contracts, Web/Tech | Permalink | Comments (0)

Saturday, February 4, 2017

Providing "Retirement Benefits" Isn't the Same as Providing Health Insurance Coverage

A recent case out of New York, Wilson v. New York State Thruway Authority, 931-16, deals with the collective bargaining agreement between the New York State Thruway Authority and its retirees over whether the Thruway Authority was contractually bound to provide health insurance coverage to the retirees at no cost. The retirees had enjoyed free health insurance until April 1, 2016, when the Thruway Authority required them to start paying six percent of their premiums. The retirees wanted to introduce evidence that the parties understood that the Thruway Authority was going to pay all of their health insurance premiums, pursuant to the collective bargaining agreement. 

The problem was that the contract between the parties contained no such obligation and the court found that the contract was unambiguous on its face. All that the contract stated was that the Thruway Authority should provide "retirement benefits" made available by New York statutes the contract went on to enumerate. None of those statutes contained provisions requiring the Thruway Authority to provide health insurance coverage. In fact, health care benefits were governed by different New York statutes, not the ones enumerated, and New York state courts had long pointed out that "retirement benefits" and "health care benefits" were two different things governed by two different statutes under New York law. Given that, the court concluded that "retirement benefits" was an unambiguous term of art that the parties knew the definition of, given their particular citation of New York statutes to define it. The court refused to allow extrinsic evidence in the face of this lack of ambiguity. If the retirees had wished the Thruway Authority to pay for their health insurance premiums, they should have included an express provision saying that in the collective bargaining agreement, as many other collective bargaining agreements construed under New York law had done. 

This decision is fairly straightforward as a matter of the law: finding that the term was unambiguous (and indeed basically defined within the document through the statutory citations) and so therefore extrinsic evidence was unnecessary to decide the breach of contract action (the court here concluded that, with no obligation to pay the health insurance premiums, the Thruway Authority had not breached the contract). However, it is a legal dispute that we might see more and more of, as deals with retirees are reevaluated and altered in an age of shrinking budgets. 

February 4, 2017 in Commentary, Government Contracting, Labor Contracts, Legislation, Recent Cases, True Contracts | Permalink | Comments (0)

Friday, February 3, 2017

No Class Actions For Investment Fraud Claims in the Eighth Circuit

In Holtz v. JPMorgan Chase Bank (the “Bank”), Judge Easterbook recently held that litigants may pursue state law contracts or fiduciary duty claims in an individualized manner, but not in the form of class action law suits under the Securities Litigation Uniform Standards Act of 1998 (“the Litigation Act,” 15 U.S.C. § 78bb (F)).

In the case, the plaintiffs alleged that the Bank gave its employees incentives to place clients’ money on the Bank’s own mutual funds, even when those funds have higher fees or lower returns than competing funds sponsored by third parties. The Bank allegedly failed to inform the clients of this conflict of interest or lied about it. Plaintiffs also argued that banks have fiduciary duty that they simply cannot contract out of under state contract law. J. Easterbrook recognizes that contract claims survive federal statutory pre-emption standards. Here, the Litigation Act is on point. However, to plead misrepresentations or omissions under the Act, the contract claims must not be “material.” (An omission is “material” when a reasonable investor would deem it significant to an investment decision.) In other words, the gravamen of litigation under the Act must, it seems, be statutory, and not purely contractual, issues. If the contractual issues are material, they must be litigated in the form of state law claims.

Per Easterbrook, “there are plenty of ways to bring wrongdoers to account – but a class action that springs from lies or material omissions in connection with federally regulated securities is not among them … If [the plaintiff] wants to pursue a contract or fiduciary-duty claim under state law, she has only to proceed in the usual way: one litigant against another.”

Another win in the “war” against class actions, it seems.

February 3, 2017 in Contract Profs, Current Affairs, Miscellaneous, True Contracts | Permalink | Comments (0)

Consent to Face Scanning

In a recent case, the video game publisher 2K recently won the right to collect and store gamers biometric data (in this case, face scans) indefinitely.  The face scanning technology is used in at least two of its NBA series games to allow gamers to create "personalized virtual basketball players". 

Plaintiffs agreed to allow them to do so when they agreed to the company’s terms and conditions.  The plaintiffs didn’t dispute that they had agreed to the terms or that they had consented to having their faces scanned; their objection was that they did not know that the scans would be stored “indefinitely” and that 2K could share the biometric data.  The court ruled that there was no harm under the Illinois Biometric Information Privacy Act.  The focus was not on contractual assent to the terms and conditions.  But this made me wonder, given how unobtrusive most terms and conditions are, and how easy it is to "manifest assent," shouldn't there be more stringent assent requirements when it comes to consent with respect to certain terms (such as the permanent storage and sharing of biometric data)?  Isn't it time we moved past the notion of blanket assent?

As more companies move toward biometric data for a wide range of reasons, we’re likely to see more problems with too-easy consent and wrap contracts.

February 3, 2017 in Commentary, Current Affairs, Miscellaneous, Web/Tech | Permalink | Comments (0)