ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Thursday, February 11, 2016

Weekly Top Ten SSRN Contracts Downloads (February 11, 2016)

  Top-10-gold-logo
SSRN Top Downloads For SSRN Logo (small)
Contracts & Commercial Law eJournal

Rank Downloads Paper Title
1 515 Simplification of Privacy Disclosures: An Experimental Test
Omri Ben-Shahar and Adam S. Chilton
University of Chicago Law School and University of Chicago - Law School
2 447 Choice of Law in the American Courts in 2015: Twenty-Ninth Annual Survey
Symeon C. Symeonides
Willamette University - College of Law
3 214 Contract Law and Ukraine's $3 Billion Debt to Russia
Mark C. Weidemaier
University of North Carolina (UNC) at Chapel Hill - School of Law
4 100 The Nature of Vitiating Factors in Contract Law
Mindy Chen-Wishart
University of Oxford – Faculty of Law
5 83 More Behavioral vs. More Economic Approach: Explaining the Behavioral Divide between the US and the EU
Philipp Hacker
Humboldt University of Berlin
6 82 Apple Pay, Bitcoin, and Consumers: The ABCs of Future Public Payments Law
Mark Edwin Burge
Texas A&M University School of Law
7 78 Beyond Relational Contracts: Social Capital and Network Governance in Procurement Contracts
Lisa Bernstein
University of Chicago - Law School
8 78 From Promise to Form: How Contracting Online Changes Consumers
David A. Hoffman
Temple University - James E. Beasley School of Law
9 73 Interpreting the Rules of Insurance Contract Interpretation
Mark Geistfeld
New York University School of Law
10 71 Contract Meta-Interpretation
Shawn J. Bayern
Florida State University - College of Law

SSRN Top Downloads For SSRN Logo (small)
LSN: Contracts (Topic)

Rank Downloads Paper Title
1 515 Simplification of Privacy Disclosures: An Experimental Test
Omri Ben-Shahar and Adam S. Chilton
University of Chicago Law School and University of Chicago - Law School
2 447 Choice of Law in the American Courts in 2015: Twenty-Ninth Annual Survey
Symeon C. Symeonides
Willamette University - College of Law
3 214 Contract Law and Ukraine's $3 Billion Debt to Russia
Mark C. Weidemaier
University of North Carolina (UNC) at Chapel Hill - School of Law
4 100 The Nature of Vitiating Factors in Contract Law
Mindy Chen-Wishart
University of Oxford – Faculty of Law
5 83 Disgorgement of Profits in Canada
Lionel Smith and Jeff Berryman
McGill University, Faculty of Law, Paul-André Crépeau Centre for Private and Comparative Law and University of Windsor - Faculty of Law
6 78 Beyond Relational Contracts: Social Capital and Network Governance in Procurement Contracts
Lisa Bernstein
University of Chicago - Law School
7 78 From Promise to Form: How Contracting Online Changes Consumers
David A. Hoffman
Temple University - James E. Beasley School of Law
8 71 Contract Meta-Interpretation
Shawn J. Bayern
Florida State University - College of Law
9 70 Global Commercial Law between Unity, Pluralism, and Competition: The Case of the CISG
Gralf-Peter Calliess and Insa Buchmann
University of Bremen - Faculty of Law and Max Planck Institute for European Legal History
10 63 Contracting Out of Fiduciary Duties
Ernest Lim
University of Hong Kong - Faculty of Law

February 11, 2016 in Recent Scholarship | Permalink | Comments (0)

Emerging Payment Systems and the Primacy of Private (Contract) Law

CLS-logoIs the public commercial law of payment systems being displaced by private contract law? The short answer is "yes." Recently, I had the opportunity to write an invited post for the CLS Blue Sky Blog, Columbia Law School's Blog on Corporations and the Capital Markets, and I hope you'll indulge me a moment to share about it here.

Emerging Payment Systems and the Primacy of Private Law is a synopsis of a larger project on how the public law and Uniform Commercial Code aspects of the regulation of payments have become marginalized over the last few decades--and how the marginalization isn't necessarily a bad thing.  Contract law is presumptively a better organizing instrumentality, but there still remains a significant and robust role for public regulation. Or, as I state in part of the longer post:

Payment systems have now clearly exceeded the regulatory capacity of public legal institutions to govern them via a comprehensive code like the UCC. Public law protection of the end user, however, has proven so successful and facilitated such industry growth that complete privatization of payments law is not the best response either. Emerging payment systems should be subject to a division between private law and public law in which private law is predominant, but not exclusive.

Private contract law is best equipped to deal with both current and future developments as the primary governance mechanism for emerging systems of payment. This market-friendly primacy of private law is only assured, nonetheless, by ceding to public law specific protections for payment system end users against oppression, fraud, and mistake.

If this particular intersection of contract law and commercial law is of interest to you, read the complete post. Or, if you are a particular glutton for punishment, the draft article on which the CLS Blue Sky Blog piece is based is here

 

February 11, 2016 in Commentary, Current Affairs, E-commerce, Recent Scholarship | Permalink | Comments (0)

Wednesday, February 10, 2016

Negligence Liability Releases, Delaware Planet Fitness Edition

 Planet Fitness, Revere, Massachusetts

On the subject of, again, releases for liability for negligence, a recent Delaware case, Ketler v. PFPA, LLC, No. 319 2015, examined one in the context of a Planet Fitness gym. The plaintiff was a member at Planet Fitness and had signed a membership agreement that contained a release for liability from negligence. The plaintiff was later injured while working out at Planet Fitness when the rowing machine he was using broke. He tired to argue that the release from liability for negligence was unenforceable. The court disagreed. 

Under Delaware law, a release is enforceable if it is unambiguous, not unconscionable, and not against public policy. Here, the language of the release was straightforward and unambiguous. Furthermore, the court found the release wasn't unconscionable. It was true that the plaintiff had no opportunity to negotiate the terms of the contract but that wasn't enough on its own to find unconscionability. The court noted that the plaintiff was free to not join Planet Fitness so the release wasn't unconscionable. Finally, the release wasn't against public policy because the Delaware legislature has never spoken on the issue of releases of liability and it is the legislature that establishes public policy. So the release was enforceable and the plaintiff's claims were barred. 

February 10, 2016 in Recent Cases, Sports, Weblogs | Permalink | Comments (0)

Tuesday, February 9, 2016

Classic Case Corner: Kirksey v. Kirksey

Classic Case Corner is an occasional series of posts highlighting staples of the Contracts curriculum and resources related to them. Our motto for CCC is, "If it's new to you, then it's new... even if it's old."

Some cases owe their fame in the law school curriculum, in part, to unusual factual details--consider the hairy hand of Hawkins v. McGee as one prominent example. Today's highlight, Kirksey v. Kirksey, 8 Ala. 131 (Ala. 1845), in contrast, became famous despite, or more likely because of, its factual obscurity.

Kirksey Mock PosterIn less than 550 words, Kirksey tells the story of the widowed "Dear Sister Antillico" who was invited by her brother-in-law to abandon her home based on this promise: "If you will come down and see me, I will let you have a place to raise your family, and I have more open land than I can tend; and on the account of your situation, and that of your family, I feel like I want you and the children to do well.”  Two years later, the brother-in-law "notified ['Sister Antillico'] to remove, and put her in a house, not comfortable, in the woods, which he afterwards required her to leave." The Alabama Supreme Court reversed the trial court's verdict for the widow, holding that the brother-in-law's promise was "a mere gratuity, and that an action will not lie for its breach." The brief opinion sheds no great light on the facts beyond the few stated, and it ultimately allows for a great deal of pedagogical flexibility in discussing the doctrine of consideration or the modern availability of promissory estoppel as a substitute.

Professors William Casto (Texas Tech) and Val Ricks (South Texas) filled the information gap and dispelled the much of the surface mystery in their fantastic article, 'Dear Sister Antillico . . .': The Story of Kirksey v. Kirksey, which covers not only the historical background of the case and its litigation, but also the story of how Samuel Williston catapulted a little-known case to its current prominence.

Casto and Ricks' abstract elaborates more on the treasure-trove of facts to be found in the 77-pages of their 2006 Georgetown Law Journal article:

First, its facts raise more questions than they answer. Countless Contracts teachers ask - Why did Isaac Kirksey invite his sister-in-law "Antillico" (an aberrant spelling of Angelico, we discovered) down to Talladega? Was he actually bargaining for something? How many children did Angelico bring? Did Isaac mean for the children to work on his plantation (did he bargain for their labor)? Did Isaac and Angelico have an affair (was the consideration meretricious)? Why did Isaac move to evict his sister-in-law? Was she unbearable as a neighbor? Why did she sue? What result was she seeking? What evidence was presented at trial? Did she have evidence of consideration other than her trip to Talladega? Was her lawyer incompetent? Did the law of the time support Angelico's legal position, or is the opinion's conclusion based on something other than legal authority? Did the appellate court usurp the jury's factfinding role? Why did the dissenting judge write the majority opinion? Whatever happened to Angelico and her small children? These questions serve pedagogy. Our informal poll of contract law teachers revealed a long list of objectives for which professors use Kirksey. Kirksey's ambiguities leave the professor free to take the case where she will.

Second, Kirksey is so ordinary - why is it taught at all? It announces no new doctrine. It explains no doctrine. It's author's style is not impressive, and his reputation is obscure. Today courts might reach the opposite result. Few courts have cited Kirksey, and none since 1949.

We resolve these puzzles. First, we answer all the questions raised by the facts. We were surprised by the answers and suggest that no one who has taught the case has had any idea what actually happened. Second, we explain how Kirksey gained fame. Briefly, Williston changed his mind about the case ("right" to "wrong"), and in the process talked about Kirksey so much that it became embedded in his teaching, his treatise, his mind, and his students' minds - until the case became one of contract law teaching's primary sources. Ironically, Williston's change of mind, the reason for the case's rise to fame (the second puzzle), was made possible by the case's ambiguity (the first).
 
If you wish, in Paul Harvey's phrase, to know "the rest of the story" about Kirksey, you'll be hard pressed to do better than Casto and Ricks' article.

 

 

February 9, 2016 in Famous Cases | Permalink | Comments (2)

Monday, February 8, 2016

Arbitration Provisions and Unconscionability

This case is a lesson in: Do what the judge tells you to do. 

Ruiz v. Millennium Square Residential Association, Civil Action No. 15-1014 (JDB), out of the U.S. District Court for the District of Columbia, is a fairly staid dispute over whether a condominium owner complied with the condominium association bylaws when he made changes to his unit. The bylaws contained an arbitration provision for disputes like this, which the plaintiff argued was unconscionable. 

The court didn't seem to think much of the unconscionability argument. First of all, procedurally, it was unpersuaded by the plaintiff's allegation that, because he had to accept the bylaws as they were and couldn't negotiate them, they were unconscionable. The court pointed out that this would make all condominium bylaws everywhere unconscionable, which the court termed "at odds with common sense." The court pointed out that some very powerful buyers might in fact have the ability to negotiate condominium bylaws (which would seem to me to present a different case altogether, and so not very relevant to this case at all). The court also pointed out that the plaintiff could have chosen to buy real estate elsewhere if he didn't like the bylaws at Millennium Square. 

As for substantive unconscionability, the plaintiff raised three separate problems with the arbitration structure set forth in the agreement: (1) it didn't require a written decision; (2) it didn't provide for discovery; and (3) it didn't allow the plaintiff to participate in selecting the arbitrators. The court was dismissive of the first two arguments, saying that precedent doesn't require arbitration to have those characteristics, so there was no reason to find a clause not requiring them to be unconscionable. 

The third argument is where the defendant dropped the ball in this litigation, apparently. The defendant tried to argue that the plaintiff did have a role in selecting the arbitrators under the agreement. This argument hinged on reading together two separate provisions of the agreement. The court, however, was unconvinced by this reading. The court then specifically requested that the defendant address whether the arbitration procedure would be unconscionable if the defendant's reading was wrong and the plaintiff didn't have a role. The court actually invited supplemental briefing on that issue. The defendant, however, declined to make that argument. Maybe the precedent was really bad for the defendant, but it's generally a good idea to give the court supplemental briefing when it requests it, I think. The court concluded that the defendant's behavior was a concession that the clause was unconscionable. Faced with a failure to argue by the defendant, the court concluded that the defendant's reading of the contract was wrong; plaintiff had no role in selecting the arbitrators under the agreement; and that was unconscionable because the court had been given no ability to rule otherwise. 

The court therefore severed the unconscionable arbitration procedure in the arbitration clause but upheld the rest of the clause. It requested that the parties work together to arrive at new, detailed, acceptable arbitration procedures. 

February 8, 2016 in Commentary, Recent Cases, True Contracts | Permalink | Comments (0)

Sunday, February 7, 2016

YouTube and Annoying Plaintiffs

In a case that is a sad testament to today’s apparently increasing loneliness in the Western world despite much technological progress that could have alleviated some of that, but instead only seems to have made it worse, a woman created a YouTube channel bearing the rather uncharming name “bulbheadmyass.” On it, she posted 24 music videos of her band. These videos gathered almost half a million views and many favorable comments. There was no commercial component to the videos. The woman was not trying to sell video or audio versions of the band’s music. Instead, her “sole reward was the acclaim that she received from the YouTube community and the opportunity to make new friends.” (The case is Lewis v. YouTube, H041127, California Court of Appeal Images.)

Claiming that this woman had breached the company’s Terms of Service, YouTube removed the videos from its website. The woman filed suit claiming breach of contract and seeking specific performance. She alleged that YouTube breached the contract with her when it removed her videos from the website against her will and without notice. The trial court sustained YouTube’s demurrer on the basis that the Terms of Service contained a liability limitation stating that “[i]n no event shall YouTube … be liable … for any … errors or omissions in any content.” Plaintiff had argued that the case was not one of errors or omissions in any content, but rather a deletion of content without prior notice. The appellate court, however, held that the liability limitation governed the issue and that the trial court had correctly sustained the demurrer.

YouTube did, though, agree to restore plaintiff’s video content. YouTube, of course, does not charge for featuring anyone’s videos. Rather, it makes money off the advertising it can generate because of the many hits it receives. (Its revenue is several billion dollars a year.) However, YouTube did not restore the videos to their pre-deletion status, i.e. with comments, URLs from other users who had linked to it, and view counts. (Compare this to SSRN resetting your scholarship records: you’ll lose your view count and all other tracking data should that happen). The court contrasted the case with another where the contract had set forth exactly how to grant specific performance in case of a breach (also a technology case). But in the YouTube case, said the court, “no provision in the Terms of Service can serve as the basis for the relief that [plaintiff] seeks.”

Really? Does it take all that much technological savvy by a court to simply ask YouTube to restore plaintiff’s accounts to their “as were” condition? YouTube may actually not simply have deleted the accounts altogether. If they had, they would undoubtedly have backups. Instead, various technological accounts are simply “turned off” and are thus not accessible to the general public, but they still exist. What really seems to have been at issue here was an annoying plaintiff who was unlikeable to both the court and YouTube. It seems that the court was too eager to dismiss plaintiff’s specific performance claim and chose the too-easy way out by claiming lack of technological knowledge. In 2016, it does not seem to strain the imagination too much to expect billion-dollar IT companies to have ways of doing just what plaintiff sought here. Then again: with a name such as “bulbheadmyass,” maybe it was a case of “you got what you asked for.”

February 7, 2016 in Current Affairs, E-commerce, Film, Music, True Contracts, Web/Tech | Permalink | Comments (0)

Friday, February 5, 2016

Fellowships - please share with your students and others

From our colleagues at Harvard Law School come these two job postings - please share with anyone potentially interested:

Qualcomm Postdoctoral Fellowship in Private Law and Intellectual Property

Located at Harvard Law School, the Qualcomm Fellowship is a two-year, residential postdoctoral program specifically designed to identify, cultivate, and promote promising scholars early in their careers with a primary interest in intellectual property and its connection to one or more of property, contracts, torts, commercial law, unjust enrichment, restitution, equity, and remedies. Fellows have been selected from among recent graduates, young academics, and mid-career practitioners who are committed to pursuing publishable research likely to make a significant contribution to private law scholarship.

Fellows devote their full time to scholarly activities in furtherance of their individual research agendas. In addition, fellows contribute to the intellectual life of the Project and the Harvard Law School community through mentoring students, presenting their research in and attending faculty workshops and seminars, helping to organize and participating in Center events, and blogging.

In order to be eligible for the program, applicants must hold a J.D. or other graduate law degree. Applicants are required to submit a research proposal as well as a completed application by March 1, 2016. Selected fellows will gain access to a wide range of resources offered by Harvard University, including: office space, library access, a benefits package as well as an annual stipend.

Additional information can be found at: http://www.law.harvard.edu/programs/about/privatelaw/index.html.

Postdoctoral Fellowship in Private Law

Located at Harvard School of Law, the fellowship is a two-year, residential postdoctoral program specifically designed to identify, cultivate, and promote promising scholars early in their careers with a primary interest in private law. Private law embraces traditional common law subjects (property, contracts, and torts), as well as adjacent statutory areas such as intellectual property and commercial law. It also includes resurgent areas, such as unjust enrichment, restitution, equity, and remedies. Fellows have been selected from among recent graduates, young academics, and mid-career practitioners who are committed to pursuing publishable research likely to make a significant contribution to private law scholarship.

Fellows devote their full time to scholarly activities in furtherance of their individual research agendas. In addition, fellows contribute to the intellectual life of the Project and the Harvard Law School community through mentoring students, presenting their research in and attending faculty workshops and seminars, helping to organize and participating in Center events, and blogging.

In order to be eligible for the program, applicants must hold an advanced degree in law and must possess a demonstrated interest in private law and theory. Applicants are required to submit a research proposal as well as a completed application by March 1, 2016. Selected fellows will gain access to a wide range of resources offered by Harvard University, including: office space, library access, a benefits package as well as an annual stipend.

Additional information can be found at: http://www.law.harvard.edu/programs/about/privatelaw/index.html.

 

 

February 5, 2016 | Permalink

Thursday, February 4, 2016

The Pink Tax

Although some things bear little direct relation to Contracts Law, they are still worth mentioning here for their inherent news value and for potential classroom use by creative law professors. Here’s one such story:

Both British and American studies show that women pay an average of… 48% more for items targeted for women compared to those for men.  This “sexist pricing” pattern is reflected in, for example, razors costing 11% more for women than those for men, jeans allegedly 10% more (I would personally have thought more than that, but that’s another story), skin lotion around $15 for women, but similar lotion $10 for men.

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A report by the New York City Department of Consumer Affairs, released in December, found similar patterns. It compared nearly 800 products with clear male and female versions from more than 90 brands sold in New York, both online and in stores. It found that women pay more in 42% of cases.

Similarly, a bill in California calling for lawmakers to exempt tampons and sanitary pads from the state sales tax got a big endorsement in January from the board that administers the state's sales taxes. A few other states such as Utah, Virginia and New York have introduced similar bills. Even President Obama seems to subscribe to the notion that women should not have to pay tax on products they simply have to have because of Mother Nature’s demands. When asked in a recent interview if he felt it was right that tampons are taxed, he said, “I have no idea why states would tax these as luxury items. I suspect it's because men were making the laws when these were passed.” Well, not quite: states typically just tax all goods and exempt some. But states such as California don’t tax foods, for example. Time truly seems to have come to exempt some other goods.

British Labor Party MP Paula Sheriff sums up the issue well “[w]omen are paid less and are expected to spend more on products and services ... they are charged more simply for being women.” The only thing that should also be mentioned, in all fairness, is the price of clothing and shoes. I personally find those items much cheaper than men’s clothes, but I’m also not a brand-conscious person.   As long as it fits and looks good, I don’t care whether it’s called one thing or another, so my anecdote may not fit into the “pink tax” story and protests which are gaining momentum in several nations.

February 4, 2016 in Commentary, Current Affairs, In the News | Permalink | Comments (0)

Uniform Commercial Code: 2016 Legislative Agenda

ULCLogoThe Uniform Commercial Code is widely recognized as one of the great successes in the more-than-a-century-long history of drafting uniform state laws and model acts. Most parts of this joint enterprise between the American Law Institute (ALI) and Uniform Law Commission (ULC) have been adopted in all 50 states and other United States jurisdictions. Perhaps more remarkable than the UCC’s original wide adoption in the late 1960s is that the Code has been the subject major revisions over the past fifty years that themselves have gained widespread adoption, as we previously documented in some detail here.

These enactments don't just happen on their own, however, as the Uniform Law Commission targets and supports efforts to gain particular enactments in particular jurisdictions. Below is a copy of the ULC's Legislative Agenda for the Uniform Commercial Code for 2016. US Virgin IslandsOne piece of the agenda that stands out to me, as it affects a topic I've previously written about, is the plan to seek enactment of the 2008 version of Article 1's section 1-301 in the U.S. Virgin Islands.  The Virgin Islands is a noteworthy jurisdiction for being the only adopter of the 2001 rewrite of UCC Article 1 in its entirety, including its controversial (to Americans, at least) choice-of-law section that permitted parties to non-consumer UCC-governed contracts to choose governing law that had no relationship to the contract. The 2001 version of section 1-301 achieved no other enactments before being abandoned by the Commission in 2008 in favor of language tracking original-section 1-105, which required chosen contract law to bear a "reasonable relation" to a transaction.

Read on to see if there is any activity planned of interest to you or your state.

2016 LEGISLATIVE UPDATE FOR UCC ARTICLES

  • UPDATE ON UCC ARTICLE 1 (2001) [1] :  

 

    • Plans for introduction in 2016: Missouri; U.S. Virgin Islands (UCC1-301 Amendment).
    • UCC Article 1 (2001) has been adopted in 51 jurisdictions: Alabama[2], Alaska, Arizona2, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii2, Idaho2, Illinois2, Indiana2, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland2, Massachusetts, Michigan2, Minnesota, Mississippi, Montana, Nebraska2, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Ohio, Oregon, Pennsylvania, Rhode Island2, South Carolina, South Dakota, Tennessee, Texas, Utah2, Vermont, Virginia2, U.S. Virgin Islands, Washington, West Virginia, Wisconsin, Wyoming.
  • UPDATE ON UCC ARTICLE 2A (1987) (1990): 

 

    • UCC Article 2A (1987)(1990) has been adopted in 51 jurisdictions. It has not been adopted in Louisiana, Puerto Rico.
  • UPDATE ON UCC ARTICLES 3 AND 4 (1990):  

 

    • Plans for introduction in 2016: New York.
    • UCC Articles 3 and 4 (1990) have been adopted in 52 jurisdictions. They have not been adopted in: New York.
  • UPDATE ON UCC ARTICLES 3 AND 4 (2002):  

 

    • Plans for introduction in 2016: Massachusetts, Ohio.
    • UCC Articles 3 and 4 (2002) have been adopted in 12 jurisdictions: Arkansas, District of Columbia, Indiana, Kentucky, Michigan, Minnesota, Mississippi, Nevada, New Mexico, Oklahoma, South Carolina, Texas.
  • UPDATE ON UCC ARTICLE 4A (1989): 

 

    • UCC Article 4A (1989) has been adopted in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.
  • UPDATE ON UCC ARTICLE 4A AMENDMENT (2012):   

 

    •  Plans for introduction in 2016: Connecticut, Delaware, Florida, Kansas, Oklahoma, U.S. Virgin Islands, Utah.
    • UCC Article 4A Amendment (2012) has been adopted in 44 jurisdictions: Alabama, Alaska, Arizona, Arkansas, California, Colorado, District of Columbia, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Vermont, Virginia, Washington, West Virginia, Wisconsin.
  • UPDATE ON UCC ARTICLE 5 (1995): 

 

    • UCC Article 5 (1995) has been adopted in 52 jurisdictions. It has not been adopted in: Puerto Rico.
  • UPDATE ON UCC ARTICLE 6 (1989): 

 

    • UCC Article 6 (1989) has been revised in one state: California. UCC6 has been repealed in 51 jurisdictions. It has not been repealed or revised in: Maryland.
  • UPDATE ON UCC ARTICLE 7 (2003):  

 

    • Plans for introduction in 2016: Missouri, U.S. Virgin Islands.
    • UCC Article 7 (2003) has been adopted in 50 jurisdictions: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming.
  • UPDATE ON UCC ARTICLE 8 (1994): 

 

    • UCC Article 8 (1994) has been adopted in all 50 states plus the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.
  • UPDATE ON UCC ARTICLE 9 (1999): 

 

    • UCC Article 9 (1999) has been adopted in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.
  • UPDATE ON UCC ARTICLE 9 (2010): 

 

  • Plans for introduction in 2016: U.S. Virgin Islands.
  • UCC Article 9 (2010) has been adopted in 52 jurisdictions: Alabama1, Alaska2, Arizona1, Arkansas1, California3, Colorado2, Connecticut2, Delaware2, District of Columbia1, Florida1, Georgia1, Hawaii1, Idaho1, Illinois1, Indiana1, Iowa1, Kansas1, Kentucky1, Louisiana1, Maine1, Maryland1, Massachusetts1, Michigan1, Minnesota1, Mississippi1, Missouri1, Montana1, Nebraska1, Nevada1, New Hampshire2, New Jersey1, New Mexico1, New York1, North Carolina1, North Dakota1, Ohio1, Oklahoma1, Oregon2, Pennsylvania1, Puerto Rico1, Rhode Island1, South Carolina1, South Dakota1, Tennessee1, Texas1, Utah1, Vermont1, Virginia1, Washington2, West Virginia1, Wisconsin1, Wyoming2.

[1] Choice of Law provision:  All enacting jurisdictions except the U.S. Virgin Islands have enacted the choice-of-law provision (Section 1-301) in the 2008 Official Text.  The USVI enactment includes the 2001 text of that section.

[2] Definition of “good faith”:  retains the good faith standard found in pre-revised UCC1.

February 4, 2016 in Current Affairs, Legislation | Permalink | Comments (0)

Weekly Top Ten SSRN Contracts Downloads (February 4, 2016)

Top Ten Logo 2

SSRN Top Downloads For SSRN Logo (small)
Contracts & Commercial Law eJournal

Rank Downloads Paper Title
1 508 Simplification of Privacy Disclosures: An Experimental Test
Omri Ben-Shahar and Adam S. Chilton
University of Chicago Law School and University of Chicago - Law School
2 426 Choice of Law in the American Courts in 2015: Twenty-Ninth Annual Survey
Symeon C. Symeonides
Willamette University - College of Law
3 94 The Nature of Vitiating Factors in Contract Law
Mindy Chen-Wishart
University of Oxford – Faculty of Law
4 80 More Behavioral vs. More Economic Approach: Explaining the Behavioral Divide between the US and the EU
Philipp Hacker
Humboldt University of Berlin
5 75 Apple Pay, Bitcoin, and Consumers: The ABCs of Future Public Payments Law
Mark Edwin Burge
Texas A&M University School of Law
6 74 Defences and the Disunity of Unjust Enrichment
Lionel Smith
McGill University, Faculty of Law, Paul-André Crépeau Centre for Private and Comparative Law
7 69 Interpreting the Rules of Insurance Contract Interpretation
Mark Geistfeld
New York University School of Law
8 66 Global Commercial Law between Unity, Pluralism, and Competition: The Case of the CISG
Gralf-Peter Calliess and Insa Buchmann
University of Bremen - Faculty of Law and Max Planck Institute for European Legal History
9 61 Contracting Out of Fiduciary Duties
Ernest Lim
University of Hong Kong - Faculty of Law
10 61 Contract Meta-Interpretation
Shawn J. Bayern
Florida State University - College of Law


SSRN Top Downloads For SSRN Logo (small)
LSN: Contracts (Topic)

Rank Downloads Paper Title
1 508 Simplification of Privacy Disclosures: An Experimental Test
Omri Ben-Shahar and Adam S. Chilton
University of Chicago Law School and University of Chicago - Law School
2 426 Choice of Law in the American Courts in 2015: Twenty-Ninth Annual Survey
Symeon C. Symeonides
Willamette University - College of Law
3 94 The Nature of Vitiating Factors in Contract Law
Mindy Chen-Wishart
University of Oxford – Faculty of Law
4 80 Disgorgement of Profits in Canada
Lionel Smith and Jeff Berryman
McGill University, Faculty of Law, Paul-André Crépeau Centre for Private and Comparative Law and University of Windsor - Faculty of Law
5 74 Defences and the Disunity of Unjust Enrichment
Lionel Smith
McGill University, Faculty of Law, Paul-André Crépeau Centre for Private and Comparative Law
6 66 Global Commercial Law between Unity, Pluralism, and Competition: The Case of the CISG
Gralf-Peter Calliess and Insa Buchmann
University of Bremen - Faculty of Law and Max Planck Institute for European Legal History
7 61 Contracting Out of Fiduciary Duties
Ernest Lim
University of Hong Kong - Faculty of Law
8 61 Contract Meta-Interpretation
Shawn J. Bayern
Florida State University - College of Law
9 56 Interpreting Statutes and Contracts: A Distinction Without a Difference?
Jacinta Dharmananda and Leon Firios
University of Western Australia - Faculty of Law and University of Western Australia - Faculty of Law
10 44 Verbrauchervertragsrecht und Rechtswahl (Consumer Contract Law and Choice of Law)
Walter Doralt and Sarah Nietner
Max Planck Institute for Comparative and International Private Law and Bucerius Law School

 

February 4, 2016 in Recent Scholarship | Permalink

Wednesday, February 3, 2016

Liability Releases for Negligence, New York Trampoline Park Edition

A recent case out of New York, Gosh v. RJMK Park LLC, No. 155024/2015 (thanks to reader Frank for the non-paywall link!), tackled the familiar issue of negligence liability release provisions, this time in the context of a trampoline park that the plaintiffs' child was injured at while playing "trampoline dodgeball." I had no idea what this was, so I looked it up. Here's a video: 

It mainly looks like something people who don't get motion-sick should play (i.e., people who are not me). 

The plaintiffs had signed an agreement with the trampoline park with a clause under which they waived all claims against the trampoline park arising out of negligence. Under New York law, such a clause is unenforceable when "a place of amusement or recreation" with an entry fee is involved as against public policy. 

However, that didn't mean the plaintiffs got everything they wanted in this case. The plaintiffs' argument was that the presence of the negligence liability release clause rendered the entire agreement with the trampoline park unenforceable, including the venue provision that required them to bring suit in Westchester County. The court disagreed: Just because that one provision was unenforceable didn't mean the entire agreement got thrown out. Rather, the court severed the negligence liability release provision as "unrelated" to the main goal of the agreement. It didn't actually clarify what the main objective of the agreement was, just dismissed the release provision as being related to "legal stuff," basically. At any rate, the agreement had contained the standard boilerplate provision stating that any illegal clause should be severed from the agreement and the rest of the agreement enforced, which also supported the court's conclusion. So venue was transferred to Westchester County. 

February 3, 2016 in Commentary, Games, Recent Cases, Sports, True Contracts | Permalink | Comments (2)

Monday, February 1, 2016

How Much Does It Cost to Have an IMAX Theater in Your Own Home?

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Okay, there's actual contract stuff to talk about in this case, but mostly I was fascinated to learn that IMAX theaters rent the movie-showing equipment from IMAX and, in 2004 at least, the cost was $41,400 in annual maintenance fees plus the greater of $75,000 or 7% of the box office receipts in annual rent. So, if you win the lottery and want an IMAX theater in your house, there's a rough idea of the kind of costs you're looking at. 

And now that we've learned that fascinating tidbit of information, what happens when you get into a fight with IMAX about whether the equipment it's leased you is capable of playing "Hollywood" movies? 

That's what happened in a recent case out of the Middle District of Pennsylvania, IMAX Corp. v. The Capital Center, Civ. No. 1:15-CV-0378. In that dispute, Capital Center alleged that it told IMAX it wanted to rent its equipment so it would be able to show "Hollywood" movies. In 2004, it entered into a fifteen-year lease of IMAX's movie-showing equipment/software/etc. Apparently around 2014, IMAX announced that it had developed new technology that rendered the equipment Capital Center had rented obsolete, interfering with Capital Center's ability to play "Hollywood" movies. (I keep putting "Hollywood" in quotation marks because it's in quotation marks in the opinion. Clearly Capital Center considered it a direct quote and an important characterization.)

In reaction to the new technology, Capital Center stopped paying rent on the old technology, apparently because it felt its equipment was now valueless. IMAX pointed out that Capital Center had therefore breached the contract and IMAX was entitled to the remainder due under the lease in liquidated damages (a clause in the contract). Capital Center gave the equipment back to IMAX, and IMAX sued to collect the money it claimed it was due under the contract. Capital Center raised in response defenses of mutual mistake and frustration of purpose. It also claimed IMAX had no right to demand the further rent amounts because Capital Center no longer had possession of the equipment. Finally, it claimed that IMAX had not properly disclaimed its warranty that the equipment was fit for a particular purpose, i.e., playing "Hollywood" movies. Unfortunately for Capital Center, none of these defenses succeeded. 

Capital Center's mutual mistake defense centered on the "mistake" that both parties made that the equipment that was the subject of the lease would still be capable of playing "Hollywood" movies fifteen years later. However, the mutual mistake defense exists to vindicate mistakes of fact, not errors in predicting the future; this situation was the latter. There was no "fact" that IMAX thought it knew that the equipment would still be valid in fifteen years. And, in fact, the agreement itself contemplated as much, because the agreement contained a clause noting that IMAX might upgrade its equipment and setting forth the terms by which Capital Center could receive the improved equipment. Difficult for Capital Center to argue that the parties were mistaken about the future viability of the equipment in question when the agreement itself noted that the equipment in question might not be viable in the future. 

The frustration of purpose defense failed for a similar reason. Here, the purpose of the contract might have been to play "Hollywood" movies but there was no unforeseen event that occurred after the signing of the contract that frustrated that purpose. The agreement itself predicted that the equipment might not continue to be viable for the showing of "Hollywood" movies. Therefore, the continued viability of the equipment could not be said to have been a basic assumption of the contract. 

As for the argument that IMAX shouldn't be entitled to future rent payments because IMAX was in possession of the equipment, under Pennsylvania law, IMAX was entitled to choose either future rent payments or repossession of the equipment. However, IMAX didn't seek to repossess the equipment; Capital Center gave the equipment back to IMAX of its own volition. Therefore, IMAX wasn't seeking repossession, only the future rent payments: a choice it was allowed to make. 

Finally, the contract between the parties had contained a clause in which IMAX disclaimed all of the usual warranties, including suitability to a particular use, i.e., showing "Hollywood" movies. Under Pennsylvania law, such a disclaimer is valid as long as it is "conspicuous." Capital Center tried to argue that the disclaimer in question wasn't conspicuous, but it was the only clause in the seven-page Schedule B of the agreement that was in bold font, which, according to the precedent, rendered it "sufficiently conspicuous." 

February 1, 2016 in Commentary, Film, Recent Cases, True Contracts, Web/Tech | Permalink | Comments (2)

Sunday, January 31, 2016

KCON XI Schedule Published

San Antonio Riverwalk KCON2016Conference Organizer Colin Marks of St. Mary's University School of Law has published the schedule for the upcoming edition of this blog's favorite conference--the 11th International Conference on Contracts. KCON XI will be held in picturesque San Antonio on February 26-27. The deadline for booking hotel accommodations in the block at the conference rate is just one week away.

For more information on both hotel accommodations and registration, consult the conference website.  Meanwhile, take a glance at the schedule below to see the scintillating topics and company you'll be missing if you aren't yet San Antonio bound.

Friday, February 26, 2016

8 – 8:45 a.m. Breakfast and Networking

8:45 – 9 a.m. Welcome to KCON XI

9 – 10:30 a.m. Concurrent Sessions

  • Professorial Professions: Creating a Student-centered Contracts Classroom
    • Moderator: Hazel Beh, University of Hawai’i
    • Charles Calleros, Arizona State University
    • Myanna Dellinger, University of South Dakota
    • Frank G. Snyder, Texas A&M University
    • Adrian J. Walters, Chicago-Kent College of Law
  • What You Thought You Knew About Remedies in Sales Transactions May Not Be True: Highlights in Article 2 Remedies and Contracting for Limitations
    • Moderator: Wayne Barnes, Texas A&M University
    • Sidney DeLong, Seattle University, The Notice of Breach Dilemma: Conflict and Cooperation in Eastern Airlines v McDonnell Douglas
    • Nancy Kim, California Western School of Law, Teaching UCC Remedies from Concept to Clause
    • Colin Marks, St. Mary’s University School of Law, On-Line and As Is
    • Jennifer Martin, St. Thomas University

10:30 – 10:45 a.m. Break (Sponsored by West Academic)

10:45 a.m. – 12:15 p.m. Concurrent Sessions

  • Innovations in Teaching and Mentoring
    • Moderator: Robert D. Brain, Loyola Law School Los Angeles
    • Keith A. Rowley, UNLV William S. Boyd School of Law
    • Frank G. Snyder, Texas A&M University
    • Ben Templin, Thomas Jefferson School of Law, The New Pedagogy: Here’s the ball. Let’s play catch
  • Contract Law in an Administrative and Regulatory Context
    • Moderator: James W. Fox Jr., Stetson University College of Law
    • Hazel Beh, University of Hawai’i, Insurance as the AntiContract
    • David Friedman, Willamette University College of Law, Refining Advertising Regulation
    • Peter Marchetti, Texas Southern University, Thurgood Marshall School of Law, Bankruptcy “Clawback” Provisions: Congress Needs to Amend Section 546
    • Chris French, Penn State Law, The Illusion of Insurance Contracts

12:15 – 1:30 p.m. Lunch

1:30 – 3 p.m. Concurrent Sessions

  • Contract Interpretation and Construction
    • Moderator: Deborah Post, Touro Law Center
    • Gastón de los Reyes Jr., The George Washington University School of Business, Formality in the Choice Architecture of Contracting: The Case of Paradine v. Jane
    • Dan O’Gorman, Barry University, Closing the Parol-Evidence-Rule Loophole: The Consideration Exception and the Preexisting-Duty Rule
    • Frank Snyder, Texas A&M University, Consumer Preference and Majoritarian Rule – Empirical Studies in Default Tender Rules
    • Eric Zacks, Wayne State University, Standardized Contracts: Restatement (Second) of Contracts Section 211: Unfulfilled Expectations
  • Employment Contracts
    • Moderator: Bonita K. Roberts, St. Mary’s University School of Law
    • Wendy Netter Epstein, DePaul University, Contracting for Results in Health Care?
    • Allen Kamp, John Marshall Law School, Employee Wellness Programs: Fundamental Contract Issues
    • Meredith R. Miller, Touro Law Center, You’re Fired!: The Effect of Involuntary Termination on Restrictive Covenants

3 – 3:15 p.m. Break – Law Classrooms Building Foyer Area

3:15 – 4:45 p.m. Concurrent Sessions

  • The Impact of Virtual Currencies
    • Moderator: Daniel Barnhizer, Michigan State University College of Law
    • Mark Burge, Texas A&M University, Electronic Payment Systems
    • Catherine Christopher, Texas Tech University, Virtual Currency
    • Angela Walch, St. Mary’s University School of Law
  • Contract Drafting
    • Moderator: Danielle Hart, Southwestern Law School
    • Nadelle Grossman, Marquette University, Transactional Contracts and Textbook Simulation Discussion
    • Russell Korobkin, UCLA School of Law, Bargaining with the CEO: The Case for “Negotiate First, Choose Second”
    • Jane Winn, University of Washington, Framework Contracts and the New Managerial Revolution

5:30 – 9 p.m. Reception Dinner and Lifetime Achievement Award Ceremony Honoring Peter Linzer

Saturday, February 27, 2016 

8 – 9 a.m. Breakfast and Networking  

9 – 10:30 a.m. Concurrent Sessions

  • Theoretical Perspectives on Contract Law
    • Moderator: Jennifer Martin, St. Thomas University
    • Shawn Bayern, Florida State University, The Failure of Law and Economics
    • Sidney DeLong, Seattle University, Jephthah’s Daughter and Morally -Efficient Breach
    • Orit Gan, Sapir College, Peres Academic Center, The Many Faces of Contractual Consent
    • Val D. Ricks, South Texas College of Law, Contract Doctrine as Contract Theory
  • Remedies: Beyond Expectation Damages
    • Moderator: Nancy Kim, California Western School of Law
    • Yehuda Adar, Israel Law School, Pre-Contractual Disgorgement
    • Moshe Gelbard, Israel Law School, Pre-Contractual Disgorgement
    • Caprice Roberts, Savannah Law School, Supreme Disgorgement
    • Roger Halson, University of Leeds, UK, Liquidated Damages and “Penalty” Clauses in the UK: A New Approach

10:30 – 10:45 a.m. Break

10:45 a.m. – 12:15 p.m. Concurrent Sessions

  • Contract Law and Neoliberalism
    • Moderator: Dov Waisman, Southwestern Law School
    • Danielle Hart, Southwestern Law School, Contract Law & Ideology
    • Creola Johnson, The Ohio State Univesity Moritz College of Law, Contractual Duplicity: Creditors Force Consumers into Arbitration While Exploiting the Criminal Justice System to Arrests Consumers Who Cannot Pay
    • Hila Keren, Southwestern Law School, Scalia on Contracts: The Dissemination of Neoliberal Logic
    • Matthew Titolo, West Virginia, Neoliberalism’s Fine Print
  • E-Commerce
    • Moderator: Colin P. Marks, St. Mary’s University School of Law
    • Daniel Barnhizer, Michigan State University College of Law, Contracts and Automation: Exploring the Normativity of Codability
    • Stacy-Ann Elvy, New York Law School, The Internet of Things (IOT) and Bargaining Disparity
    • Max N. Helveston, DePaul University, Regulating the Digital Marketplace

12:15 – 1:30 p.m. Lunch 

1:30 – 3 p.m. Concurrent Sessions

  • Consumer Financial Protection Bureau (CFPB), Consumer Contracts, and Arbitration
    • Moderator: Peter Linzer, University of Houston
    • Richard Frankel, Drexel University
    • Ramona Lampley, St. Mary’s University School of Law
    • Jean Sternlight, University of Nevada, Las Vegas
  • International Perspectives on Contract Law
    • Moderator: Val D. Ricks, South Texas College of Law
    • Mateja Durovic, City University of Hong Kong, EU Consumer Contract Law – Does it Really Protect Consumers?
    • Dr. Shivprasad Swaminathan, Global Law School, Delhi, India, Consideration and Induced Reliance
    • Qi Gao, Beihang University School of Law, Consumer Protection under Chinese Contract Law

3 p.m. – 3:15 p.m. Break

3:15 p.m. – 4:45 p.m. Concurrent Sessions

  • International on Contract Law
    • Moderator: Mark Burge, Texas A&M University
    • Pablo Lerner, Israel Law School, Constructive Trusts in Israeli Land Contracts – Contract as Key
    • Dr. Lachmi Singh-Rodrigues, University of West of England, Avoidance of the Contract and the Seller’s Right to Cure Under the CISG
    • Yashveer Singh Yadav, Hidayatullah National Law University, India (LL.B. Honors, 2016), International Trade: Contract Necessities Including Incoterms
  • Public Policy Considerations in Contract Law
    • Moderator: David A. Grenardo, St. Mary’s Univ. School of Law
    • Wayne Barnes, Texas A&M University, Arrested Development: Rethinking the Age of Majority in the 21st Century
    • Myanna Dellinger, University of South Dakota, Contracts to Kill Endangered Species: Public Policy Arguments
    • Joan MacLeod Heminway, The University of Tennessee College of Law, The LLC Operating Agreement and its Relation to Contract

5 p.m. – 7 p.m. Closing Reception

 

 

January 31, 2016 in Conferences | Permalink | Comments (0)

On Artificial Intelligence and Contract Law

SmartcontractsIan Kerr of the University of Ottawa's Centre for Law, Technology and society has an interesting post from last September on a topic of that has been of occasional discussion on this blog, and which I came across only recently.  In "The Arrival of Artificial Intelligence and 'The Death of Contract,'" Kerr outlines some of the foreseeable challenges facing today's students of contract law due to disruptive technology:

On the market today are a number of AI products that carry out contract review and analysis. Kira, an AI system used to review and analyze more than US$100 billion worth of corporate transactions (millions of pages), is said to reduce contract review times by up to 60%. Likewise, a Canadian product called Beagle (“We sniff out the fine print so you don’t have to”) is faster than any human, reading at .05 seconds per page. It reads your contract in seconds and understands who the parties are, their responsibilities, their liabilities, how to get out of it and more. These are amazing products that improve accuracy and eliminate a lot of the “grunt work” in commercial transactions.

But hey—my Contracts students are no dummies. They can do the math. Crunch the numbers and you have a lot of articling students and legal associates otherwise paid to carry out due diligence who now have their hands in their pockets and are looking for stuff to do in order to meet their daily billables. What will they do instead?

In some ways, such concerns are just teardrops in an ocean full of so-called smart contracts that are barely visible in the murky depths of tomorrow. Their DRM-driven protocols are likely to facilitate, verify, and enforce the negotiation and performance of contracts. In some cases, smart contracts will obviate the need for legal drafting altogether—because you don’t actually need legal documents to enforce these kinds of contracts. They are self-executing; computer code ensures their enforcement.

Kerr's concludes that smart contracts and their technological relatives are no more the death of contract than what Grant Gilmore pronounced, but that the change is worrisome, including to our relational understanding of contract doctrine and its practice:

I suspect we will face some significant changes and I am not sure that it’s all good. Self-executing contracts, like the DRM-systems upon which they are built, are specifically designed to promote the wholesale replacement of relational aspects of contract such as trust, promise, consent and enforcement. As such, they do injury to traditional contract theory and practice. While I have no doubt that an AI-infused legal landscape can to some extent accommodate these losses by creating functional equivalents where historical concepts no longer make sense (just as e-commerce has been quite successful in finding functional equivalents for the hand-written signature, etc.), I do worry that some innovations in AI-contracting could well have a negative effect on human contracting behavior and relationships.

The entire post is worth a read for anyone interested in the impact of technology on contracts.

January 31, 2016 in Commentary, Contract Profs, E-commerce, Web/Tech | Permalink | Comments (0)

Mobile Carriers Give up Two-year Contracts

Mobile carriers seem to have grown tired of, effectively, being in the loan business funding people’s new phones. American consumers were used to this model, which was a way for phone companies to hide the large price of a new phone into a monthly bill.

More recently, consumers want to change their phones more often than every two plus years, so many prefer paying up front for their phones to be able to change plans whenever they want to instead of having to wait out a long-term contract (or risk sanctions if breaching it).

All the major carriers – T-Mobile, Verizon, Spring and now AT&T – have now shifted away from two-year contracts. The question now is whether consumers will truly choose to pay for their phones in full at the point of purchase or, as has been mentioned, opt for installment plans that lets them upgrade more often than before remains to be seen. Given the price of phones, but also the seemingly insatiable need by many for new technology, installment contracts may be the likely end result. If so, it will be interesting to see how carriers will avoid tying people into long-term contracts, which has proved to be undesirable, but at the same time trying to do, at bottom, some of that via “installment contracts.”

January 31, 2016 in Current Affairs, E-commerce, In the News, Web/Tech | Permalink

Friday, January 29, 2016

Confusing Contracts Language as Litigation Strategy?

The class action lawsuit against Uber for allegedly misclassifying its drivers as “independent contractors” instead of regular “employees” is growing in scope and importance. (O’Connor v. Uber Technologies Inc., 13-cv-03826, Northern District of California). It now covers more than 100,000 drivers. If Uber loses, the case could mean the end of the so far highly lucrative business ride share model that is currently valued at a whopping $60 b worldwide. http://www.bloomberg.com/news/articles/2015-12-18/uber-faulted-by-judge-for-confusing-drivers-with-new-contract

A recent contractual twist developed as follows: Judge Chen had previously found certain contractual language between Uber and its drivers to be unconscionable and unenforceable. Uber claims it tried to fix those issues in a new set of contracts prohibiting its drivers from “participating in or recovering relief under any current or future class action lawsuits against the company.”  (Link behind a sign-in request). The drivers were, instead, required to resolve potential conflicts via arbitration.  The new contract did, however, purport to give drivers 30 days to opt out of the arbitration provision.

Judge Edward Chen stated about this contractual language that “it is likely, frankly, to engender confusion.” The potential for confusion stems from the fact that numerous drivers have, obviously, already joined the class action lawsuit just as many still may want to do so. Hundreds of drivers are said to have called the plaintiffs’ lawyer, Shannon Liss-Riordan, to find out whether they have to opt out of the new contract to join the lawsuit. Ms. Liss-Riordan called the updated contract an attempt to “trick her clients into relinquishing their rights to participate in the class action.”

Uber, however, claimed that it was just trying to fix previous problematic contractual language and that it would “not apply the new arbitration provisions to any drivers covered by the class action.” The contractual language, though, does not say so.

Whether this is an example of deliberate strong-arming or intimidating the drivers into not joining the lawsuit or simply unusually poor contract drafting may never be known. Judge Chen did, however, order Uber to stop communicating with drivers covered by the class action suit and barred the company from imposing the new contract on those drivers.

The saga continues with trial set for June 30.

Meanwhile, Lyft settled a very similar lawsuit by its drivers in the amount of $12 million. Under that settlement, Lyft will still be able to classify its drivers “independent contractors.”

January 29, 2016 in E-commerce, Famous Cases, In the News, Labor Contracts, Web/Tech | Permalink | Comments (0)

Thursday, January 28, 2016

Weekly Top Ten SSRN Contracts Downloads (January 28, 2016)

Top Ten Logo 1

SSRN Top Downloads For SSRN Logo (small)
Contracts & Commercial Law eJournal

Rank Downloads Paper Title
1 468 Simplification of Privacy Disclosures: An Experimental Test
Omri Ben-Shahar and Adam S. Chilton
University of Chicago Law School and University of Chicago - Law School
2 405 Choice of Law in the American Courts in 2015: Twenty-Ninth Annual Survey
Symeon C. Symeonides
Willamette University - College of Law
3 94 The Doctrine of Illegality: A Private Law Hydra
James Goudkamp
University of Oxford - Faculty of Law
4 78 More Behavioral vs. More Economic Approach: Explaining the Behavioral Divide between the US and the EU
Philipp Hacker
Humboldt University of Berlin
5 75 Personal Data Processing for Behavioural Targeting: Which Legal Basis?
Frederik J. Zuiderveen Borgesius
University of Amsterdam - IViR Institute for Information Law (IViR)
6 71 The Nature of Vitiating Factors in Contract Law
Mindy Chen-Wishart
University of Oxford – Faculty of Law
7 70 Defences and the Disunity of Unjust Enrichment
Lionel Smith
McGill University, Faculty of Law, Paul-André Crépeau Centre for Private and Comparative Law
8 68 Interpreting the Rules of Insurance Contract Interpretation
Mark Geistfeld
New York University School of Law 
9 68 Apple Pay, Bitcoin, and Consumers: The ABCs of Future Public Payments Law
Mark Edwin Burge
Texas A&M University School of Law
10 59 Contracting Out of Fiduciary Duties
Ernest Lim
University of Hong Kong - Faculty of Law

SSRN Top Downloads For
LSN: Contracts (Topic)

Rank Downloads Paper Title
1 468 Simplification of Privacy Disclosures: An Experimental Test
Omri Ben-Shahar and Adam S. Chilton
University of Chicago Law School and University of Chicago - Law School
2 405 Choice of Law in the American Courts in 2015: Twenty-Ninth Annual Survey
Symeon C. Symeonides
Willamette University - College of Law
3 71 The Nature of Vitiating Factors in Contract Law
Mindy Chen-Wishart
University of Oxford – Faculty of Law
4 70 Defences and the Disunity of Unjust Enrichment
Lionel Smith
McGill University, Faculty of Law, Paul-André Crépeau Centre for Private and Comparative Law
5 59 Contracting Out of Fiduciary Duties
Ernest Lim
University of Hong Kong - Faculty of Law
6 54 Global Commercial Law between Unity, Pluralism, and Competition: The Case of the CISG
Gralf-Peter Calliess and Insa Buchmann
University of Bremen - Faculty of Law and Max Planck Institute for European Legal History
7 50 Interpreting Statutes and Contracts: A Distinction Without a Difference?
Jacinta Dharmananda and Leon Firios
University of Western Australia - Faculty of Law and University of Western Australia - Faculty of Law
8 48 Contract Meta-Interpretation
Shawn J. Bayern
Florida State University - College of Law
9 35 Beyond Relational Contracts: Social Capital and Network Governance in Procurement Contracts
Lisa Bernstein
University of Chicago Law School
10 34 Financial Hardship: Insights from a Survey of Financial Counsellors
Paul Ali, Evgenia Bourova and Ian Ramsay
University of Melbourne - Law School, University of Melbourne - Law School and University of Melbourne - Law School

 

January 28, 2016 in Recent Scholarship | Permalink

Wednesday, January 27, 2016

Uniform Commercial Code Adoptions: Here's the Current Scorecard

ULCLogoPerhaps the greatest and most unintended misnomer in the field of commercial law is that the Uniform Commercial Code is called the Uniform Commercial Code. A more accurate name might have been the As-Uniform-as-Possible-Given-that-States-Are-Going-to-Do-Their-Thing Commercial Code. (That name admittedly doesn't roll off the tongue nearly as well as "UCC."). The picture is further complicated by the fact that the official code has itself been amended many times over the last several decades. 

For those of us who are interested in the status of UCC adoptions, however, our friends at the Uniform Law Commission (or NCCUSL, if you prefer the old-school name) have produced a handy one-stop scorecard showing which jurisdictions have adopted which revisions of the UCC. The scorecard is dated December 1, 2015, but I'm told on good authority by my colleague and ULC guru Bill Henning that it remains current today. Use the knowledge below to amaze and impress your commercial law friends around the water cooler--or else to drive your non-commercial law friends away from the water cooler.

On a technical note, you might need a wide screen (i.e., not a smartphone) to view the table in its proper format.

 

UCC SCORECARD

 50+ State Survey of Adoptions of Revised Official Text of the UCC

STATES

UCC

UCC11

(2001)

UCC2A

(1990)

UCC3/4

(1990)

UCC3/4

(2002)

UCC4A

(1989)

UCC5

(1995)

UCC6

(1989)

UCC7

(2003)

UCC8

(1994)

UCC9

(1998)

UCC9

(2010)

Alabama

1965

20042

1992

1995

 

19923

1997

1996

2004

1996

2001

2014 A

Alaska

1962

2009

1993

1993

 

19933

1999

1993

2009

1996

2000

2013 B

Arizona

1967

20062

1992

1993

 

19913

1996

2004

2006

1995

1999

2014 A

Arkansas

1961

2005

1993

1991

2005

19913

1997

1991

2007

1995

2001

2013 A

California

1963

2006

1991

1992

 

19903

1996

Rev 90

2006

1996

1999

2013C

Colorado

1965

2006

1991

1994

 

19903

1996

1991

2006

1996

2001

2012 B

Connecticut

1959

2005

2002

1991

 

1990

1996

1993

2004

1997

2001

2011 B

Delaware

1966

2004

1992

1995

 

1992

1998

1996

2004

1997

2000

2013 B

DC

1964

2013

1992

1994

2013

19923

1997

2015

2013

1997

2000

2013 A

Florida

1965

2007

1990

1992

 

1991

1999

1993

2010

1998

2001

2012 A

Georgia

1962

2015

1993

1996

 

19923

2002

2015

2010

1998

2001

2013 A

Hawaii

1965

20042

1991

1991

 

19913

1996

1998

2004

1997

2000

2012 A

Idaho

1967

20042

1993

1993

 

19913

1996

1993

2004

1995

2001

2012 A

Illinois

1961

20082

1991

1991

 

19903

1996

1991

2008

1995

2000

2012 A

Indiana

1963

20072

1991

1993

2009

19913

1996

2007

2007

1995

2000

2011 A

Iowa

1965

2007

1994

1994

 

19923

1996

1994

2007

1997

2000

2012 A

Kansas

1965

2007

1991

1991

 

1990

1996

1992

2007

1996

2000

2012 A

Kentucky

1958

2006

1990

1996

2006

19923

2000

1992

2012

1996

2000

2012 A

Louisiana

1974

2006

 

1992

 

19903

1999

1991

2009

1995

2001

2012 A

Maine

1963

2009

1992

1993

 

19923

1997

1992

2009

1997

2000

2013 A

Maryland

1963

20122

1994

1996

 

19913

1997

 

2004

1996

1999

2012 A

Mass.

1957

2013

1996

1998

 

19913

1997

1996

2013

1996

2001

2013 A

Michigan

1962

20122

1992

1993

2014

19923

1998

1998

2012

1998

2000

2012 A

Minnesota

1965

2004

1991

1992

2003

19903

1997

1991

2004

1995

2000

2011 A

Mississippi

1966

2010

1994

1992

2010

19913

1996

1994

2006

1996

2001

2013 A

Missouri

1963

 

1992

1992

 

19923

1997

2004

 

1997

2001

2013 A

Montana

1963

2005

1991

1991

 

19913

1997

1991

2005

1997

1999

2013 A

Nebraska

1963

20052

1991

1991

 

19913

1996

1991

2005

1995

1999

2011 A

STATES

UCC

UCC1

(2001)

UCC2A

(1990)

UCC3/4

(1990)

UCC3/4

(2002)

UCC4A

(1989)

UCC5

(1995)

UCC6

(1989)

UCC7

(2003)

UCC8

(1994)

UCC9

(1998)

UCC9

(2010)

Nevada

1965

2005

1991

1993

2005

19913

1997

1991

2005

1997

1999

2011 A

NH

1959

2006

1993

1993

 

19933

1998

1993

2006

1998

2001

2012 B

NJ

1961

2013

1994

1995

 

19943

1997

1994

2013

1997

2001

2013 A

NM

1961

2005

1992

1992

2009

19923

1997

1992

2005

1996

2001

2013 A

New York

1962

2015

1994

   

19903

2000

2001

2015

1997

2001

2015 A

NC

1965

2006

1993

1995

 

19933

1999

2004

2006

1997

2001

2012 A

ND

1965

2007

1991

1991

 

19913

1997

1993

2005

1997

2001

2011 A

Ohio

1961

2011

1992

1994

 

19913

1997

1996

2011

1997

2001

2012 A

Oklahoma

1961

2005

1991

1991

2009

1990

1996

1997

2005

1995

2000

2015 A

Oregon

1961

2009

1989

1993

 

19913

1997

1991

2009

1995

2001

2012 B

Penn.

1953

2008

1992

1992

 

1992 3

2001

1992

2008

1996

2001

2013 A

PR

                   

2012

2012 A

RI

1961

20072

1991

2000

 

19913

2000

2001

2006

2000

2000

2011 A

SC

1966

2014

2001

2008

2008

19963

2001

2001

2014

2001

2000

2013 A

SD

1966

2008

1989

1994

 

19913

1998

1993

2009

1998

2000

2012 A

Tenn.

1963

2008

1993

1997

 

19913

1998

1998

2008

1997

2000

2012 A

Texas

1965

2003

1993

1995

2005

19933

1999

1993

2005

1995

1999

2011 A

USVI

1967

2002

2001

2000

 

2001

2000

2002

 

2002

2002

 

Utah

1965

20072

1993

1993

 

1990

1997

1996

2006

1996

2000

2013 A

Vermont

1966

2007

1994

1994

 

19943

1999

1994

2015

1996

2000

2014 A

Virginia

1964

20032

1991

1992

 

19903

1997

2011

2004

1996

2000

2012 A

Wash.

1965

2012

1993

1993

 

19913

1997

1993

2012

1995

2000

2011 A

WV

1963

2006

1996

1993

 

19903

1996

1992

2006

1995

2000

2012 A

Wisconsin

1963

2010

1992

1996

 

19923

2005

2009

2010

1998

2001

2012 A

Wyoming

1961

2015

1991

1991

 

1991

1997

1991

2015

1996

2001

2013B

TOTAL

53

51

51

52

12

53

52

52

50

53

53

52

(Last updated 12-1-15)

 

1 Choice of Law Provision: All enacting jurisdictions except the U.S. Virgin Islands have enacted the choice-of-law provision (Section 1-301) in the 2008 Official Text. The USVI enactment includes the 2001 text of that section.

2 Definition of “good faith”: retains the good faith standard found in pre-revised UCC1.

3 Adopted the 2012 Amendment to UCC Article 4A.

A Adopted Alternative A of 9-503.

B Adopted Alternative B of 9-503.

C Adopted non-uniform safe harbor in 9-503.

January 27, 2016 in Current Affairs, Legislation | Permalink | Comments (0)

Binding Arbitration Clauses, Educational Training Materials Edition

No, it's not legal-education-related, but rather real-estate-education-related. Which, according to the plaintiff, didn't actually teach her what it promised to teach her. So she sued. The defendant, however, noted that she'd signed a contract with an arbitration clause and so they shouldn't be in court. And the court agreed, in Kane v. Yancy, CIVIL ACTION NO. H-15-1861 (behind paywall), a recent case out of the Southern District of Texas. 

Arbitration clauses are, of course, generally looked upon favorably by courts. In this case, there was no dispute that the contract contained an arbitration clause and that the plaintiff signed the contract. Rather, the plaintiff argued that the arbitration clause was unconscionable. The plaintiff claimed the arbitration clause was on the back of the piece of paper that she signed and she never saw it. She further claimed that the arbitration clause required each party to bear their own costs and attorneys' fees, which made the cost of arbitration unconscionably prohibitive for her.

All of the plaintiff's arguments failed. Texas precedent indicated that the question of whether the costs and attorneys' fees portion of the arbitration clause was enforceable was a question for the arbitrator to decide, not the court. At any rate, the court didn't feel that the fees were so exorbitant as to cause concern. 

In addition, the court didn't really care about her allegation that she had never seen the arbitration clause because the plaintiff's signature was under a statement indicating that she had read everything on the back of the piece of paper she signed. As we all know, on virtually a daily basis we attest that we've read terms and conditions that we have maybe only barely glanced at, if that. Clearly, that's what the plaintiff in this case did, too. This court didn't care from a legal unconscionability standpoint. 

The plaintiff made a couple of other interesting arguments. She tried to argue that, by answering her complaint in court, the defendant had waived its right to arbitration. The court, unsurprisingly, didn't buy it. She also tried to argue that the defendant's breach of the contract excused her from being bound by the arbitration clause. The court, however, noted that the defendant's alleged breach of the contract had nothing to do with the arbitration clause itself, and thus that clause was not excused by the defendant's alleged conduct. 

The defendant actually moved for sanctions but the court said that the plaintiff's actions weren't frivolous or intended to harass. So the plaintiff may have lost everything else, but at least she didn't get sanctioned. Hashtag-finding-a-silver-lining. 

January 27, 2016 in Recent Cases, Teaching, True Contracts | Permalink | Comments (0)

Monday, January 25, 2016

Is a Dollar Movie in This Day and Age Still Feasible?

Cinemaaustralia

The average price for a movie ticket in the United States is apparently $8.61. A recent case out of Ohio, Capital City Community Urban Development v. Columbus City, Case No. 13CVH-01-833 (behind a paywall), dealt with the question of whether a dollar movie is still feasible when most movies cost more than $8.00. 

The contractual provision at issue was: "The Buyer agrees to provide Saturday movies for children once the theater is operational, and for as long as feasible. The cost is to be $1.00 or less for a double feature." (So, in fact, it was fifty cents a movie.) The clause actually wasn't that old (from what I could discern from the facts, it seems to have only been written in 2002), so it wasn't as if the dollar price was intended to be profitable, which both parties acknowledged. However, the issue was that the defendant had sought donations to offset the cost of the features and been unsuccessful. That meant that the theater would suffer a loss of $100,000 a year to fulfill the contractual provision, which would have been a substantial hardship to the theater. Moreover, the double feature wasn't very popular in the community. In a theater with a capacity of 400, it usually only attracted a few dozen patrons. 

The parties fought over whether the definition of feasibility included a consideration of the economics of the issue. There was some precedent that feasibility required looking at the finances of the situation. Also, compellingly in the court's view, feasibility had to take into account the finances or else it had no meaning. The argument that "feasible" meant "capable of being done" without looking to the finances meant that it would be "feasible" basically as long as the theater was open, i.e., as long as the theater had a projection. That would mean that it would be "feasible" until the theater closed down entirely. If that was the meaning of the word "feasible," there was really no reason to have that specification in the contract: it would have just been a clause in effect until the theater closed. 

This all makes sense to me, especially considering that there didn't seem to be much public interest in having the double feature continue. However, what's really striking to me about this opinion is the statement that "Columbus never showed a Saturday children's movie." So apparently Columbus's argument was really that it was never feasible to have the double feature. This meant Columbus agreed to a provision in the contract that it apparently never intended to comply with? That's not a wrinkle that gets introduced in this case--in fact, the line that no double feature had ever been shown is basically a throwaway line--but I found it to be the most striking detail. 

January 25, 2016 in Commentary, Film, Recent Cases, True Contracts | Permalink | Comments (0)