ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Tuesday, October 18, 2016

Contract Clauses and Transactional Skills

Fundamentals of Contract Law

I'm happy to report that my new book, The Fundamentals of Contract Law and Clauses, is now available.  The book is intended to give students a working knowledge of contract law, meaning that they learn the meaning of contract clauses and how they are shaped and affected by doctrine.  It's a textbook but it's not a casebook - it's intended to be used as a supplement in a first year contracts course or a primary text in a business school or undergraduate contracts law course.  (There's a Teacher's Manual which is available to instructors adopting the book which contains discussion points and exercises). 

 It always seemed a bit strange to me to teach contracts law solely by using cases - this emphasizes how to win disputes rather than how to avoid them.  This makes sense for litigators, but transactional attorneys (which I was for a decade) have a different role.  As Mark Burge has pointed out on this blog, contracts is a good gateway to transactional skills but it's not easy to figure out how to do that seamlessly.  Hopefully, this book will be an easy way to incorporate some "transactional skills" into a first year contracts course. 

October 18, 2016 in Books, Miscellaneous, Teaching | Permalink | Comments (0)

Monday, October 17, 2016

If Albert Einstein Wins the Nobel Prize...

I was listening to the podcast No Such Thing as a Fish (highly recommended) when I learned that Einstein used his Nobel Prize money as a divorce settlement to his first wife...the only catch being that he divorced her in 1919 and won the Nobel Prize in 1921. The podcast characterized this as: "If I win the Nobel Prize, I'll give you the money." Amazing! Imagine being so confident in your Nobel Prize chances! (I guess if you are Einstein, you would be that confident.) 

I couldn't find the contract myself, although the story was verified by Time and also shows up on Wikipedia

I know I just found a new go-to hypo to use in class. 

October 17, 2016 in Celebrity Contracts, Commentary, Law Schools, Teaching, True Contracts | Permalink | Comments (2)

Friday, October 14, 2016

George Richard Lunn, Clergyman, Politician, Ice House Owner

This week, while teaching parol evidence, I taught the case of Mitchill v. Lath, which involves an oral agreement between the parties to tear down an ice house on land to the land their sales agreement was about. A student asked what the deal was with the guy who owned the land the ice house was on, and I admit I didn't know the deal, so I went and looked it up, and here's the deal: 

He was George Richard Lunn, a clergyman who was born in Iowa but settled in Schenectady, where he was elected mayor on a Socialist ticket and later served in the House of Representatives and as Lieutenant Governor of New York. I had no idea who Lunn was and thought it was interesting that he turned out to have a Wikipedia page. The Wikipedia page doesn't mention his role in Mitchill v. Lath but his Prabook entry does. 

October 14, 2016 in Famous Cases, Law Schools, Teaching, True Contracts | Permalink | Comments (0)

Month-long TV Station Outage and the Duty of Good Faith

DISH Network sells satellite television packages to viewers nationwide.  In 2014, its contracts with Turner Network Sales and FOX News Networks expired. DISH was not able to negotiate renewals with these stations for approximately one month. DISH Network also did not offer complaining subscribers any form of monetary relief for the interruptions with the result that subscribers that had selected packages including FOX and Turner TV filed a class action suit for breach of contract in spite of being able to access literally hundreds of other channels.

One of the issues on appeal before the Eighth Circuit Court of Appeals was whether DISH Network violated the duty of good faith and fair dealing by not providing those two particular channels in an uninterrupted manner.  The court found that not to be the case. Images

The contract provided a Limitation of Liability Clause which, in relation to interruptions and delays, stated that “[n]either we nor our third-party billing agents … will be liable for any interruption in any service or for any delay or failure to perform, including without limitation … DISH Network’s access to all or any portion of services….”

The covenant of good faith will “not contradict terms or conditions for which a party has bargained.”  Thus, said the court, the argument was precluded by the unambiguous terms of the agreement.  “Courts must take care to ensure that we don’t use the covenant as another means for substituting a different deal from the one the parties contemplated.” 

That makes sense.  I can’t help thinking how litigious our society can be in allowing suits such as the above to proceed that far.  Does it really matter that one cannot get a couple of TV stations out of hundreds for a month?  Is it worth burdening the court system such a matter?

On the other hand, DISH could also just have offered some sort of compensation to its customers.  Cable TV is indeed very expensive these days, so the subscribers do have a point here. 

Furthermore, Cable TV providers still refuse to unbundle services to an arguably sufficient extent.  What about those of us who really truly only want to see a few specific stations?  Why should we continually have to pay for a bunch of extra stations that we never watch?  Until such unbundling become reality, arguments such as there being many other stations to choose from are arguably somewhat irrelevant.

The case is Neil Stokes; Craig Felzien v. DISH Network, L.L.C., 2016 WL 5746329.

October 14, 2016 in Current Affairs, Recent Cases, Television | Permalink

Thursday, October 13, 2016

Weekly Top Ten SSRN Contracts Downloads (October 13, 2016)

Top-10 wStars

 

SSRN Top Downloads For SSRN Logo2
Contracts & Commercial Law eJournal

Rank Downloads Paper Title
1 362 Choice of Forum Agreements Under the Brussels I Recast and Under the Hague Convention: Coherences and Clashes
Matthias Weller
EBS Universität für Wirtschaft und Recht
2 221 Making America Worse: Jobs and Money at Trump Casinos, 1997-2010
Jonathan C. Lipson
Temple University - James E. Beasley School of Law
3 206 The Myth of Free
John M. Newman
University of Memphis - Cecil C. Humphreys School of Law
4 152 Sizing up Private Law
Andrew S. Gold and Henry E. Smith
DePaul University College of Law and Harvard Law School
5 146 Is Privacy Policy Language Irrelevant to Consumers?
Lior Strahilevitz and Matthew B. Kugler
University of Chicago Law School and Northwestern University - Pritzker School of Law
6 121 Tort Reform through the Backdoor: A Critique of Law & Apologies
Yonathan A. Arbel and Yotam Kaplan
Harvard Law School and Hebrew University of Jerusalem
7 115 Evolution or Intelligent Design? The Variation in Pari Passu Clauses
Stephen J. Choi, G. Mitu Gulati and Robert E. Scott
New York University School of Law, Duke University School of Law and Columbia University - Law School
8 111 Causa and Consideration – A Comparative Overview
Dimitar Stoyanov
New Bulgarian University, Department of Law
9 150 Discussion Draft of a Directive on Online Intermediary Platforms
Christoph Busch, Gerhard Dannemann, Hans Schulte-Nölke, Aneta Wiewiórowska-Domagalska and Fryderyk Zoll
University of Osnabrück - European Legal Studies Institute, Humboldt University of Berlin - Faculty of Law, European Legal Studies Institute Osnabrueck / Radboud University Nijmegen, Universität Osnabrück - European Legal Studies Institute and Universität Osnabruck
10 167 The Law of Smart Contracts
Max Raskin
New York University (NYU), School of Law

 

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

Rank Downloads Paper Title
1 363 Choice of Forum Agreements Under the Brussels I Recast and Under the Hague Convention: Coherences and Clashes
Matthias Weller
EBS Universität für Wirtschaft und Recht
2 214 Trophy Hunting Contracts: Unenforceable for Reasons of Public Policy
Myanna F. Dellinger
University of South Dakota Law School
3 206 The Myth of Free
John M. Newman
University of Memphis - Cecil C. Humphreys School of Law
4 167 The Law of Smart Contracts
Max Raskin
New York University (NYU), School of Law
5 115 Evolution or Intelligent Design? The Variation in Pari Passu Clauses
Stephen J. Choi, G. Mitu Gulati and Robert E. Scott
New York University School of Law, Duke University School of Law and Columbia University - Law School
6 111 Causa and Consideration – A Comparative Overview
Dimitar Stoyanov
New Bulgarian University, Department of Law
7 99 The Role of Contract: Stewart Macaulay's Lessons from Practice
Brian Bix
University of Minnesota Law School
8 90 The Reform of the French Law of Obligations: Les Jeux Sont Faits
Jan M. Smits and Caroline Calomme
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI) and Maastricht European Private Law Institute (M-EPLI)
9 84 'All the World's a Stage': The Seven Ages of Unjust Enrichment
Graham Virgo
University of Cambridge - Faculty of Law
10 96 The Expanding Circle of Contract Law
Jan M. Smits
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI)

October 13, 2016 in Recent Scholarship | Permalink | Comments (0)

Wednesday, October 12, 2016

Haunted House Waivers

 

Horror in Prater.jpg
By Jebulon - Own work, CC0, Link (This is basically as scary as I can handle.)

'Tis the season!

No, not that season--yet--although last week I was shopping and noticed that the shelves are full of Christmas merchandise already so maybe it is that season. 

But the real season is Halloween! Now I enjoy Halloween well enough but I'm not much of a haunted house person (or even a scary movie person), so I don't know much about them, and I was fascinated to learn that there are several haunted houses around the country that require attendees to sign waivers. In the words of this Cosmo article, "A 'if you're so scared that you actually die, your family won't sue us into oblivion' type of waiver." (Some haunted houses even involve electric shocks, I was told. Electric shocks!! I had no idea.)

I was able to locate a couple of these haunted house waivers online. Here's one that acknowledges risk of animal bites and contacts with poisonous plants (yikes!). Here's another one (with I have to admit a fair amount of typos) that contains a little clause down at the bottom acknowledging that you've been offered safety glasses. 

At least one article queries whether this practice is entirely legal. The article asks, "Is it okay to mentally and even physically abuse individuals if they sign a waiver? Is there a limit to what should be legally acceptable?" and notes that few people are able to complete the experience and that it frequently leaves participants bruised, cut, and apparently shivering with shock. The haunted house they're talking about in the article requires guests to go through a health check first, I guess to try to minimize the possibility that they will suffer any lasting harm--either physically or mentally--from whatever crazy thing is going on in there. While this might sound terrifying to me, it apparently just sounds like an awesome time to a bunch of people. According to this article, there's a 17,000-person waiting list to get into this haunted house. 

Another interesting thing I learned while researching this stuff (peering at the scary descriptions from between my fingers) is that apparently some of the haunted houses also make the guests sign confidentiality provisions? I guess to preserve the surprise for others. At any rate, now I've creeped myself out just looking at this stuff and I need to go watch some HGTV just to stop shuddering!

Btw, if you are a haunted house person and you're curious if one of these extreme you-would-have-to-pay-me-a-million-dollars-to-go-in-here experiences is near you, I found lists here and here. Or feel free to leave your personal favorite in the comments! Happy haunting!

October 12, 2016 in Current Affairs, In the News, True Contracts | Permalink | Comments (0)

Monday, October 10, 2016

Nobel Prize for... Contracts!

This is a big day for contracts!  First was the launch of the JOTWELL Contracts section - and now this - the Nobel Prize for Economics was awarded to Oliver Hart (Harvard) and Bengt Holmstrom (MIT) for their work on contracts!  Their work addressed how contracts could encourage mutually beneficial behavior, and had an influence on a range of contracts types, including employment contracts.  Congratulations to both!

 

 

October 10, 2016 in Current Affairs | Permalink | Comments (0)

JOTWELL - Contracts section

Exciting news!  JOTWELL (the Journal of Things We Like - Lots!) has a new Contracts section - and it has just gone live!  David Hoffman (Temple) and I are the Section editors.  Aditi Bagchi (Fordham), Dan Barnhizer (Michigan State),  Shawn Bayern (Florida State), Omri Ben-Shahar (Chicago), Martha Ertman (Maryland),  Robert Hillman (Cornell), Hila Keren (Southwestern), Florencia Marotta-Wurgler (NYU), Eboni Nelson (South Carolina), Robert Scott (Columbia), Tess Wilkinson-Ryan (Pennsylvania) and Eyal Zamir (Hebrew University) are contributing editors so expect to see articles from them over the next few months. 

The inaugural article is by Prof. Robert Hillman of Cornell and reviews Aaron Perzanowski & Chris Jay Hoofnagle's article, What We Buy When We Buy Now, (forthcoming U. Pa. L. Rev.).  The article raises interesting issues about ownership of digital "goods" and has already sparked interest in the popular press.

Welcome to the world of contracts JOTWELL!

 

 

October 10, 2016 in Commentary, Contract Profs, Miscellaneous, Recent Scholarship, Web/Tech | Permalink | Comments (0)

Thursday, October 6, 2016

Weekly Top Ten SSRN Contracts Downloads (October 6, 2016)

Top-10 Scrolling

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

Rank Downloads Paper Title
1 354 Choice of Forum Agreements Under the Brussels I Recast and Under the Hague Convention: Coherences and Clashes
Matthias Weller
EBS Universität für Wirtschaft und Recht
2 197 The Myth of Free
John M. Newman
University of Memphis - Cecil C. Humphreys School of Law
3 161 The Puzzle of PDVSA Bond Prices
Paolo Colla, Anna Gelpern and G. Mitu Gulati
Bocconi University - Department of Finance, Georgetown University Law Center and Duke University School of Law
4 146 Sizing up Private Law
Andrew S. Gold and Henry E. Smith
DePaul University College of Law and Harvard Law School
5 134 Is Privacy Policy Language Irrelevant to Consumers?
Lior Strahilevitz and Matthew B. Kugler
University of Chicago Law School and Northwestern University - Pritzker School of Law
6 120 The Law of Smart Contracts
Max Raskin
New York University (NYU), School of Law
7 119 Discussion Draft of a Directive on Online Intermediary Platforms
Christoph Busch, Gerhard Dannemann, Hans Schulte-Nölke, Aneta Wiewiórowska-Domagalska and Fryderyk Zoll
University of Osnabrück - European Legal Studies Institute, Humboldt University of Berlin - Faculty of Law, European Legal Studies Institute Osnabrueck / Radboud University Nijmegen, Universität Osnabrück - European Legal Studies Institute and Universität Osnabruck
8 116 Tort Reform through the Backdoor: A Critique of Law & Apologies
Yonathan A. Arbel and Yotam Kaplan
Harvard Law School and Hebrew University of Jerusalem
9 110 Evolution or Intelligent Design? The Variation in Pari Passu Clauses
Stephen J. Choi, G. Mitu Gulati and Robert E. Scott
New York University School of Law, Duke University School of Law and Columbia University - Law School
10 109 Causa and Consideration – A Comparative Overview
Dimitar Stoyanov
New Bulgarian University, Department of Law

 

SSRN Top Downloads For SSRN Logo (small)
Law & Society: Private Law - Contracts eJournal

Rank Downloads Paper Title
1 354 Choice of Forum Agreements Under the Brussels I Recast and Under the Hague Convention: Coherences and Clashes
Matthias Weller
EBS Universität für Wirtschaft und Recht
2 210 Trophy Hunting Contracts: Unenforceable for Reasons of Public Policy
Myanna F. Dellinger
University of South Dakota Law School
3 197 The Myth of Free
John M. Newman
University of Memphis - Cecil C. Humphreys School of Law
4 120 The Law of Smart Contracts
Max Raskin
New York University (NYU), School of Law
5 110 Evolution or Intelligent Design? The Variation in Pari Passu Clauses
Stephen J. Choi, G. Mitu Gulati and Robert E. Scott
New York University School of Law, Duke University School of Law and Columbia University - Law School
6 109 Causa and Consideration – A Comparative Overview
Dimitar Stoyanov
New Bulgarian University, Department of Law
7 94 The Role of Contract: Stewart Macaulay's Lessons from Practice
Brian Bix
University of Minnesota Law School
8 90 The Expanding Circle of Contract Law
Jan M. Smits
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI)
9 75 Ordinary Contract Principles
Robert A. Hillman
Cornell Law School
10 62 Human Rights and English Contract Law: Parallel Worlds?
Francois du Bois
University of Leicester - School of Law

October 6, 2016 in Recent Scholarship | Permalink | Comments (0)

Wednesday, October 5, 2016

Further Adventures in Hip-Hop Contracts: Jay-Z Edition

Hip-Hop Contracts Week continues! This time with a recent ruling out of the Southern District of New York in Walker v. Carter, #1:12-cv-05384-ALC-RLE (behind paywall). 

Rocafella

source: Wikipedia

In the case, the plaintiff, Walker, sued Jay-Z and others regarding not a song but the logo for Roc-a-Fella Records. The court was dismissive of Walker's relationship to the logo right off the bat: "Plaintiff casts himself as the creative mastermind of the Logo's design, though he admits that he neither came up with the idea for the Logo nor drew any part of it." Right away you can tell that this doesn't sound like a judge who's inclined to find for the plaintiff here. 

And he doesn't. He grants defendants' motion for summary judgment, finding that there was no evidence of any written contract between the parties and so Walker's breach of contract claims could not survive. Walker had alleged that he and the defendants had entered into a contract providing for royalties to be paid over a period of ten years. Unfortunately for Walker, this contract--which couldn't possibly be performed within a year--is subject to the Statute of Frauds and required to be in writing, or at least for there to be sufficient evidence that a writing once existed. Generally, in New York this evidence has consisted of either the admission by the other party that a writing did exist at one time or the testimony of witnesses regarding the signing and content of the now-lost writing. Here, defendants denied that any writing had ever existed (which seems predictable, frankly) and Walker could produce no witnesses as to the signing of the contract, as Walker stated that no one other than the defendants and himself were there when the contract was signed.

Walker did produce two witnesses regarding the existence of the contract. However, they were insufficient. One testified that he had seen a piece of paper Walker told him was a contract but that he didn't read the contract and did not know what the contract said. The other testified in a number of ways that contradicted Walker's own testimony regarding the contract: Walker claimed to have written the contract in the same face-to-face meeting when it was signed, but the witness claimed to have seen the contract before it was signed, which couldn't have been possible if Walker's testimony was true. Walker claimed to have lost the contract in 1996, but the witness claimed to have seen it in 2000. Walker claimed the contract was written on blank paper, the witness claimed the contract was on lined paper. Et cetera. The court felt justified, given all of these impossible contradictions in the testimony, in disregarding this witness's testimony, especially since the witness also claimed to have a direct interest in the contract due to his close relationship with Walker. In fact, the court recounted that the witness had initially testified that he had never seen the contract, and only changed his testimony after being spoken to by counsel and after the statute of frauds had become an issue in the case. 

Therefore the court concluded that the statute of frauds required the contract to be in writing, there was no writing, and there was no genuine issue of material fact that there had ever been a writing, and so granted defendants' summary judgment motion. 

(He also found that Walker's copyright infringement claims were time-barred, so this was a total victory for Jay-Z and the other defendants.)

(A Reuters article about the case can be found here.)

October 5, 2016 in Celebrity Contracts, Commentary, Current Affairs, Music, Recent Cases, True Contracts | Permalink | Comments (0)

Monday, October 3, 2016

50 Cent, P.I.M.P., and Contracts Concerning Hip-Hop Songs

In 2003, 50 Cent released the song "P.I.M.P." The song was a huge top-ten hit for the hip-hop artist, achieving gold status in sales. 

The problem is that Brandon Parrott alleges that the song contains, without his prior consent, a track he wrote called "BAMBA." 

The parties had apparent discussions about this in 2003, entering into a settlement agreement under which Parrott received some royalties on "P.I.M.P." in exchange for Parrott licensing the pieces of his song that were used in "P.I.M.P." and agreeing to release all of his remaining claims. According to the defendants, the contract between the parties contained a clause in which Parrott represented "that no promise, representation, or inducement not expressed herein" was made in connection with the contract. 

The parties are back in court, though, with Parrott alleging in a pro se complaint filed in the Central District of California, Parrott v. Porter, #2:16-cv-04287-SJO-GJS (behind paywall), that that the settlement agreement is invalid because he was basically tricked into signing it "under false and fraudulent pretenses." Parrot argues that he thought the defendants acted in "Good Faith" and used "BAMBA" in "P.I.M.P." entirely accidentally. However, Parrott claims that he has now realized that the defendants knew that "P.I.M.P." contained Parrot's music and deliberately released "P.I.M.P." without attempting to contact Parrot for permission beforehand. In addition, Parrott appears to contend that there are inconsistencies with the royalty statements he's been sent under the settlement agreement that he has been unable to reconcile due to the defendants' lack of cooperation.

The defendants have now responded to the complaint with a motion to dismiss, apparently resting mainly on the fact that the settlement agreement is valid and governs the situation between the parties, under which Parrott has been collecting royalties for years. 

Where is 50 Cent in all of this? Preoccupied with his own ongoing bankruptcy proceedings. 

(Hollywood Reporter article on all this here.)

October 3, 2016 in Celebrity Contracts, Current Affairs, In the News, Music, True Contracts | Permalink | Comments (0)

Friday, September 30, 2016

Payments Law Meets Free Speech at the Supreme Court

Credit-cardsYesterday, the United States Supreme Court granted certiorari in the case of Expressions Hair Design v. Schneiderman, which could result in a significant change in the way end users perceive credit card use. The issuing banks and card networks would, for obvious reasons, prefer a system in which the costs of card usage are borne by merchants and are hidden from the card-using customers who then perceive card use as free. Since that preference has found its way into the law of several states, it has raised a First Amendment issue.

Tony Mauro of law.com summarizes the case as follows:

In the Expressions case, the court will be asked to decide the constitutionality of laws in 10 states that allow merchants to charge customers more for credit-card transactions—but require them to call the difference a cash “discount,” not a credit-card “surcharge.” California, Connecticut, Florida, Massachusetts, New York and Texas are among the states with similar statutes on the books.

The credit-card industry has lobbied for such laws since the 1980s, critics say, because using the word “surcharge” would discourage shoppers from using credit cards.

“A ‘surcharge’ and a ‘discount’ are just two ways of framing the same price information—like calling a glass half full instead of half empty,” Deepak Gupta of Gupta Wessler wrote in his petition challenging New York’s law. “But consumers react very differently to the two labels, perceiving a surcharge as a penalty for using a credit card.”

Expressions Hair Design posted a sign that said it would charge three percent more for paying by credit “due to the high swipe fees charged by the credit-card industry.” It and other merchants challenged the law as a violation of their First Amendment speech rights. The U.S. Court of Appeals for the Second Circuit rejected the claim, finding that the law regulates “merely prices,” not speech.

*   *   *

A coalition of large merchants including Albertsons, Rite Aid and Spirit Airlines sided with the petitioners in urging the court to take the case.

September 30, 2016 in Current Affairs, E-commerce, Recent Cases | Permalink | Comments (0)

Thursday, September 29, 2016

Weekly Top Ten SSRN Contracts Downloads (September 29, 2016)

Top-ten-books

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

Rank Downloads Paper Title
1 336 Choice of Forum Agreements Under the Brussels I Recast and Under the Hague Convention: Coherences and Clashes
Matthias Weller
EBS Universität für Wirtschaft und Recht
2 190 The Myth of Free
John M. Newman
University of Memphis - Cecil C. Humphreys School of Law
3 161 The Puzzle of PDVSA Bond Prices
Paolo Colla, Anna Gelpern and G. Mitu Gulati
Bocconi University - Department of Finance, Georgetown University Law Center and Duke University School of Law
4 142 Sizing up Private Law
Andrew S. Gold and Henry E. Smith
DePaul University College of Law and Harvard Law School
5 122 Is Privacy Policy Language Irrelevant to Consumers?
Lior Strahilevitz and Matthew B. Kugler
University of Chicago Law School and Northwestern University - Pritzker School of Law
6 114 Tort Reform through the Backdoor: A Critique of Law & Apologies
Yonathan A. Arbel and Yotam Kaplan
Harvard Law School and Hebrew University of Jerusalem
7 106 Causa and Consideration – A Comparative Overview
Dimitar Stoyanov
New Bulgarian University, Department of Law
8 104 Discussion Draft of a Directive on Online Intermediary Platforms
Christoph Busch, Gerhard Dannemann, Hans Schulte-Nölke, Aneta Wiewiórowska-Domagalska and Fryderyk Zoll
University of Osnabrück - European Legal Studies Institute, Humboldt University of Berlin - Faculty of Law, European Legal Studies Institute Osnabrueck / Radboud University Nijmegen, Universität Osnabrück - European Legal Studies Institute and Universität Osnabruck
9 95 Engineering Humans with Contracts
Brett M. Frischmann and Evan Selinger
Yeshiva University - Benjamin N. Cardozo School of Law and Rochester Institute of Technology - Department of Philosophy
10 93 Consumer Protection in the Age of Big Data
Max N. Helveston
DePaul University - College of Law

 

SSRN Top Downloads For SSRN Logo (small)
Law & Society: Private Law - Contracts eJournal

Rank Downloads Paper Title
1 336 Choice of Forum Agreements Under the Brussels I Recast and Under the Hague Convention: Coherences and Clashes
Matthias Weller
EBS Universität für Wirtschaft und Recht
2 209 Trophy Hunting Contracts: Unenforceable for Reasons of Public Policy
Myanna F. Dellinger
University of South Dakota Law School
3 190 The Myth of Free
John M. Newman
University of Memphis - Cecil C. Humphreys School of Law
4 106 Causa and Consideration – A Comparative Overview
Dimitar Stoyanov
New Bulgarian University, Department of Law
5 92 The Role of Contract: Stewart Macaulay's Lessons from Practice
Brian Bix
University of Minnesota Law School
6 87 Evolution or Intelligent Design? The Variation in Pari Passu Clauses
Stephen J. Choi, G. Mitu Gulati and Robert E. Scott
New York University School of Law, Duke University School of Law and Columbia University - Law School
7 86 Coverage Information in Insurance Law
Daniel Schwarcz
University of Minnesota Law School
8 85 The Expanding Circle of Contract Law
Jan M. Smits
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI)
9 71 Ordinary Contract Principles
Robert A. Hillman
Cornell Law School
10 56 Promissory Estoppel and the Origins of Contract Law
Eric Alden
Northern Kentucky University, Chase College of Law

September 29, 2016 in Recent Scholarship | Permalink | Comments (0)

Anti-SLAPP Motion Granted when Filing Suit in Spite of Contractual Promise Not to Do So

In 2012, Mr. Flores decided to go skydiving in California. He contracted with Skydive Monterey Bay Inc. (“Skydive”) to do so. Unfortunately, his parachute deployed prematurely, rendering him unconscious during the jump that in turn resulted in severe injuries upon landing. Flores of course sues Skydive for various torts. Skydive cross-complains alleging breach of contract based on the release that Flores had signed before the accident. This read that Flores would not “sue or make any claim of any nature whatsoever against Skydive … for personal injuries or other damages or losses sustained … as a result of my ‘parachuting activities’ even if such injures or other damages or losses sustained by me as a result of my ‘parachuting activities’ are caused by the negligence, in any degree, or other fault of Skydive….” Unknown

Flores filed a motion to strike Skydive’s cross-complaint under the California anti-SLAPP statute. This is a two-prong test that at bottom required Flores to prove that his lawsuit arose from protected activity and Skydive to prove that it had a probability of prevailing on the claim, in this case the breach of contract.

The court found that despite the contractual clause, Flores had not “waived” his right to the protections of the anti-SLAPP provisions as Skydive argued. The court found that the “filing of a complaint is an act undertaken in furtherance of the constitutional right to petition.” The burden then shifted to Skydive to demonstrate that its breach of contract claim had “minimal merit.” Skydive did not meet that low burden because it failed to provide evidence of damages resulting from the breach (the court relied on the four familiar elements of a contract: existence, performance or excuse by plaintiff, defendant’s breach, and damages). Skydive had simply called Flores’ breach of contract “incredulous,” but did not submit “any affidavits or declarations to support the allegations of damages” such as the costs of defending against the lawsuit and the potential damages on the merits of the claim. Images

Flores can now continue his lawsuit. The case shows the high importance of not relying on self-serving statements, accusations and bare allegations in legal proceedings. This is another aspect of the law that should be obvious, but apparently is not.

The case is Gerardo Flores v. Skydive Monterey Bay, Inc., 2016 WL 4938863 (not officially published), Monterey County Super. Ct. No. M126778.

September 29, 2016 in Recent Cases, True Contracts | Permalink | Comments (0)

Wednesday, September 28, 2016

Remember, Fraudulent Inducement Requires Particularity

A recent case out of the District of Utah, HealthBanc International v. Synergy Worldwide, Case No. 2:16-cv-00135-JNP-PMW, reminds us all of this rule. Well, it definitely reminded the parties and now I'm blogging about it and reminding all of you!

This case revolves around "a recipe for a powder comprised of various grasses and other components." Apparently you can combine this powder with water to make a nutritional supplement. HealthBanc entered into a contract with Synergy whereby Synergy would distribute the powder and pay HealthBanc royalties for every bottle of powder it sold. After almost a decade of doing business together, the relationship between the two parties soured. HealthBanc sued first, and then Synergy counterclaimed, alleging that HealthBanc had led Synergy to believe that it owned intellectual property rights in the recipe for the power, which apparently turned out to be untrue. HealthBanc then moved to dismiss this fraudulent inducement claim based on lack of particularity in Synergy's pleadings. The court here grants the motion. 

Synergy's complaint just generally alleged that HealthBanc had made misrepresentations. Those general allegations are not enough for a fraudulent inducement claim. Synergy identified nothing about the misrepresentations: When did they happen? Where did they happen? Were they written? Oral? Who made them? Without any of this information, the court finds this cause of action can't survive. 

The contract between the parties did contain a clause where HealthBanc

represents and warrants that it is the sole and exclusive owner of the entire rights, title and interest, including without limitation all patent, trademark, copyright and other intellectual property rights,

and another clause where HealthBanc "represents and warrants" that it has exclusive rights to the recipe that it can provide to Synergy. But those clauses don't raise a valid fraudulent inducement claim. Synergy made no allegations about the drafting of those clauses, nor did it allege that those clauses caused it to falsely believe that HealthBanc owned IP rights in the recipe and that that false belief prompted Synergy to sign the contract. 

Likewise, Synergy failed to allege any particular way that it was harmed by the alleged misrepresentations. 

Therefore, on basically every single element Synergy made very general claims that failed to meet the particularity standards. The court does dismiss without prejudice, though, giving Synergy the opportunity to try to fix the deficiencies. Stay tuned!

*Note the first: Synergy Worldwide sounds vaguely like what a company would be called in a Marvel movie so I actually looked the company up to see what it does. It seems to be a company specializing in nutritional supplements: "Your source for ProArgi-9 Plus, the highest quality l-arginine supplement on the market, as well as Mistica acai supplement, Core Greens, and more."

*Note the second: I also looked up "greens formula," which is what the court here refers to the recipe as. Wikipedia just wants to tell me about mathematical theorems, which then sent me down the Wikipedia rabbit hole to learn about George Green, a self-taught mathematical genius who received only one year of formal schooling as a child and to this day no one really knows where or how he learned the form of calculus that his theorems advanced. 

September 28, 2016 in Commentary, Food and Drink, Recent Cases, True Contracts | Permalink | Comments (0)

Monday, September 26, 2016

Lack of Formal Executed Contract Haunts Promissory Estoppel Analysis

This recent case out of the Western District of Pennsylvania, Landan v. Wal-Mart Real Estate Business Trust, 2:12cv926 (behind paywall), is sort of a try-try-again case, although the "try again" part has as negative an outcome for the plaintiffs as the "try" part did. The plaintiffs' breach of contract claim had already failed here because the court found there was no oral agreement between the parties and the parties' signed letter of intent indicated that the parties did not wish to be bound until a final formal contract was executed (as never happened).

In the face of the failure of their breach of contract claim, the plaintiffs turn here to promissory estoppel. But the lack of a final formal contract haunts the promissory estoppel analysis, too. The court finds the plaintiffs were unable to explain what promises had been made to them and characterizes the plaintiffs' stance as "unclear, inconsistent, constantly shifting, and ultimately unavailing." Given the confusion about the statements at issue, the court concludes that any reliance on such vague statements on the plaintiffs' part was unreasonable. A lot of the courts' characterization of the statements and the reasonableness, though, seem to revolve around the fact that the parties never reached a final formal contract: It would be hard for the plaintiffs to allege definite promises, the court says, because the parties were negotiating and hadn't entered into a formal deal yet; maybe Wal-Mart did make some statements but, the court says, in the context of the ongoing negotiations it would have been unreasonable for the plaintiffs to rely on those statements. 

Granted, there seem to definitely be issues with the plaintiffs' promissory estoppel claim here. The court points out that the plaintiffs themselves behaved sometimes as if they did not understand Wal-Mart to be making any promises to them, apparently negotiating with other parties over the same piece of land because of their skepticism about the Wal-Mart deal going through. And there was the letter of intent between the parties that did seem to make it less reasonable that the plaintiffs would rely on indefinite negotiating statements that hadn't been reduced to writing the way others of the statements had been. But it also seems like, once the court decided that the letter of intent wasn't binding because it contemplated a subsequent agreement, the plaintiffs' promissory estoppel claim was likewise doomed. Without a formal executed agreement, there was nothing for the plaintiffs to do to save their claim. 

September 26, 2016 in Commentary, Recent Cases, True Contracts | Permalink | Comments (0)

Friday, September 23, 2016

Scholarship Spotlight: Is Privacy Policy Language Irrelevant to Consumers? (Lior Strahilevitz - Chicago & Matthew B. Kugler - Northwestern)

Privacy PolcyAuthors' Abstract:      

Consumers almost never read privacy policies, but if they did read such policies closely how would they interpret them? This article reports the results of two experiments in which census-weighted samples of more than a thousand Americans read short excerpts from Facebook, Yahoo, and Google’s privacy policies concerning the use of facial recognition software and automated content analysis on emails. The question of what consumers have consented to under these policies has been central in recent high-stakes class action lawsuits. Experimental subjects were randomly assigned to read language from either the current policies, which explicitly describe Facebook, Yahoo, and Google’s controversial practices, or language from policies that were adjudicated to be insufficient to notify consumers about the companies’ practices. Despite evidence that many experimental subjects read these privacy policy excerpts closely, subjects who saw the explicit policy language and those who saw the ambiguous/vague policy language did not differ in their assessment of whether their assent to that language would allow Facebook, Yahoo, and Google to engage in the practices at issue. More surprisingly still, even though consumers rated both Facebook’s use of facial recognition software and Google and Yahoo’s use of automated content analysis as highly intrusive, they generally regarded their assent to even vague privacy policy language as allowing the companies to engage in those practices. Also, only a little more than a third of the participants expressed a willingness to pay any money to avoid automated content analysis of their emails. A replication study that included strong measures of participant attention confirmed the results from the first experiment and suggests that those reading the policies more carefully were not more likely to draw distinctions between them.

Our study shows that courts and laypeople can understand the same privacy policy language quite differently. Taken together, these results provide important evidence for the propositions that (1) social norms and user experiences with technological applications, not privacy policies, will drive users’ understanding of the nature of their bargain with firms, that (2) this is the case even when users read those policies reasonably carefully, that (3) most users of email and social networking sites believe that Facebook, Yahoo, and Google are authorized to engage in controversial and invasive practices implicating user privacy, and that (4) there is presently little reason to expect the development of a robust market for premium privacy-protective email and social networking applications in the United States.
 

 

September 23, 2016 in Recent Scholarship | Permalink | Comments (1)

Thursday, September 22, 2016

Weekly Top Ten SSRN Contracts Downloads (September 22, 2016)

Top-10-gold-logo

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

Rank Downloads Paper Title
1 328 Choice of Forum Agreements Under the Brussels I Recast and Under the Hague Convention: Coherences and Clashes
Matthias Weller
EBS Universität für Wirtschaft und Recht
2 174 The Myth of Free
John M. Newman
University of Memphis - Cecil C. Humphreys School of Law
3 161 The Puzzle of PDVSA Bond Prices
Paolo Colla, Anna Gelpern and G. Mitu Gulati
Bocconi University - Department of Finance, Georgetown University Law Center and Duke University School of Law
4 139 Sizing up Private Law
Andrew S. Gold and Henry E. Smith
DePaul University College of Law and Harvard Law School
5 102 Causa and Consideration – A Comparative Overview
Dimitar Stoyanov
New Bulgarian University, Department of Law
6 100 Discussion Draft of a Directive on Online Intermediary Platforms
Christoph Busch, Gerhard Dannemann, Hans Schulte-Nölke, Aneta Wiewiórowska-Domagalska and Fryderyk Zoll
University of Osnabrück - European Legal Studies Institute, Humboldt University of Berlin - Faculty of Law, European Legal Studies Institute Osnabrueck / Radboud University Nijmegen, Universität Osnabrück - European Legal Studies Institute and Universität Osnabruck
7 86 Coverage Information in Insurance Law
Daniel Schwarcz
University of Minnesota Law School
8 86 Consumer Protection in the Age of Big Data
Max N. Helveston
DePaul University - College of Law
9 104 Tort Reform through the Backdoor: A Critique of Law & Apologies
Yonathan A. Arbel and Yotam Kaplan
Harvard Law School and Hebrew University of Jerusalem
10 91 Is Privacy Policy Language Irrelevant to Consumers?
Lior Strahilevitz and Matthew B. Kugler
University of Chicago Law School and Northwestern University - Pritzker School of Law


SSRN Top Downloads For SSRN Logo (small)
Law & Society: Private Law - Contracts eJournal

Rank Downloads Paper Title
1 328 Choice of Forum Agreements Under the Brussels I Recast and Under the Hague Convention: Coherences and Clashes
Matthias Weller
EBS Universität für Wirtschaft und Recht
2 206 Trophy Hunting Contracts: Unenforceable for Reasons of Public Policy
Myanna F. Dellinger
University of South Dakota Law School
3 174 The Myth of Free
John M. Newman
University of Memphis - Cecil C. Humphreys School of Law
4 102 Causa and Consideration – A Comparative Overview
Dimitar Stoyanov
New Bulgarian University, Department of Law
5 90 The Role of Contract: Stewart Macaulay's Lessons from Practice
Brian Bix
University of Minnesota Law School
6 86 Coverage Information in Insurance Law
Daniel Schwarcz
University of Minnesota Law School
7 82 The Expanding Circle of Contract Law
Jan M. Smits
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI)
8 79 Evolution or Intelligent Design? The Variation in Pari Passu Clauses
Stephen J. Choi, G. Mitu Gulati and Robert E. Scott
New York University School of Law, Duke University School of Law and Columbia University - Law School
9 62 Ordinary Contract Principles
Robert A. Hillman
Cornell Law School
10 55 The Enforceability of Escalation Clauses Providing for Negotiations in Good Faith Under English Law
Oliver Krauss
Latham & Watkins

September 22, 2016 in Recent Scholarship | Permalink | Comments (0)

Wednesday, September 21, 2016

Your Apartment May Have a Leak, But You Still Have to Prove Damages

We are just about to start discussing damages in my Contracts class, so this recent case out of the District Court for the District of Columbia, Parham v. Cih Properties, Inc., Case No. 14-cv-1613 (GMH) (behind paywall), caught my eye. And then I realized that, wait a second, these are the same parties from one of my very first cases I ever blogged! Small world! They're still fighting with each other!

And the plaintiff is still looking for a real win, because even though she wins here, she only wins nominal damages of $1.00. 

The plaintiff alleged that water leaked into her apartment and damaged a number of items, including a mink coat, a cape with mink tassels, five designer bags, a leather trench coat, two suede suits, snakeskin boots, a box of ivory china, and various other clothes, accessories, and glassware. The court agreed with the plaintiff that the leak had occurred and found that the defendant landlord had breached the warranty of habitability. However, the court found that the plaintiff had failed to provide the court with any reasonable basis on which to base a damages award. The court noted that the plaintiff asserted the loss of a number of unique, designer items that required some sort of expert testimony (not provided) to settle the value. The court further noted that, even for the non-unique items, the plaintiff's testimony as to their value was the only piece of evidence she provided. She had no receipts, appraisals, or even surveys of prices of comparable items, and the court found her personal estimates unpersuasive because she was "an easily confused witness" whose estimated values of the items (if she provided them) were inconsistent and sometimes appeared to be "conjur[ed] out of thin air." Even plaintiff's counsel said in court, "I don't think we really proved damages."

The court agreed with this assessment, finding that the plaintiff provided no reasonable basis for the court to determine damages. The court did,  however, agree that she was entitled to nominal damages, given that the landlord had breached the warranty, and so awarded her $1.00. 

September 21, 2016 in Recent Cases, Teaching, True Contracts | Permalink | Comments (0)

Tuesday, September 20, 2016

Epipen and Potentially Anti-competitive Clauses

New York Attorney General Eric Schneiderman has launched an investigation into whether now-notorious EpiPen manufacturer Mylan inserted potentially anticompetitive terms into its EpiPen sales contracts with numerous local school systems. Unknown-1

EpiPens are carried by those of us who have severe allergies to, for example, bee stings. The active ingredient will help prevent anaphylactic shocks that can quickly result in death. In 2007, a two-pack of EpiPens sold for $57. Today, the price is $600. The company touts various coupons, school purchase programs and the like, but in my experience, at least the coupons are mere puffery unless you are very lucky to fit into a tiny category of users that I have not been able to take the time to identify.

ImagesHowever, there is finally hope for some real competition in this field: Minneapolis doctor Douglas McMahon has created an EpiPen alternative that he is trying to market. This doctor claims that Mylan and companies like it have lost sigh of patient needs and are catering to investors. In his opinion, that is the true reason for the skyrocketing prices. Well said.

The doctor is even resorting to something as unusual as a fundraising website to raise money for the required FDA testing and other steps.

Another contractual issue seems to be why customers have to buy at least two Epipens at a time. The active ingredient only lasts for one year. Those of use who carry EpiPens hope never to have to use them, but if we will, it is extremely unlikely that we will have to do so twice in a year! But alas, in the United States at least, you have to buy this product in a two-pack (EpiPens are sold individually in countries such as Canada and the UK). It may be a regulatory and not a pure contractual issue, but if the company truly sticks to its current story that it is on the up-and-up in all respects in this context, they should at least enable people to offer to buy only what they need, which in many cases would be only one EpiPen at a time.

Hat tip to Professor Carol Chomsky of the University of Minnesota School of Law for the information on the Minnesota doctor.

September 20, 2016 in Commentary, Current Affairs, In the News, Miscellaneous, Science, True Contracts | Permalink | Comments (0)