ContractsProf Blog

Editor: D. A. Jeremy Telman
Valparaiso Univ. Law School

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Wednesday, April 15, 2015

SLOs and Why I Hide the Ball (and Why You Don't Have To)

TeachingThe ABA, and I hear, I other accreditation bodies are now looking for faculty members to identify student learning objectives and student learning outcomes (SLOs) on a class-by-class, hour-by-hour basis.  I have been told that there are model syllabi circulating that include such learning objectives and learning outcomes, and that they are 12-14 pages long. 
 
I have Googled the subject and everything the literature I have seen on student learning outcomes and objectives strikes me as thoughtful, sophisticated, and completely misguided as to the nature and purposes of legal education.  Sophisticated schools like Stanford and the University of Connecticut circulate complex documents with graphs and charts and tables about how to draft the perfect SLOs.   These documents are clearly oriented towards undergraduate education.
 
The model syllabi (and PowerPoints) that Hastings Law provides on the subject provide about as much information about SLOs as I typically include in a course description.  But I don't put that course description in my syllabus because it is more usefully placed in our Bulletin, which students look at when they are deciding what course to take.  I could cut and paste the same information into a syllabus, but students will not read it if it is on the syllabus, and I will just waste paper in distributing it.  What really amazes me about the model syllabi that Hastings supplies is that they lack the things that I think make a syllabus valuable: daily schedules of assigned readings, assignments due and topics to be discussed on a given day (which is my preferred version of SLOs).
 
ScholarYou are not a great educator because you announce student learning objectives and student learning outcomes or because you use the words formative and summative assessments to refer to periodic quizzes, homework assignments and a final exam or because you use the word intentional as an adjective usually preceded by "more" when intention is not really a matter of degrees.  All of that jargon just demonstrates that you have drunk the Kool-Aid and not that your students can pass the bar and function as lawyers.
 
Students already cannot be relied on to read my 3-5 page syllabus.  They certainly would not read a 12-14 page syllabus, so adding SLOs to my syllabus just wastes effort and trees.  But that is not my main objection to SLOs.  My main learning objective is to teach law students how to figure out on their own what lessons they are supposed to be deriving from reading cases, statutes, treaties, regulations, deposition testimony or a news story, etc..  Telling students the SLOs undermines my pedagogy.
 
And hiding the ball is part of the pedagogy.  Unless they are dealing with corporate counsel, my students' clients will not come into their offices and say, "I have a contract dispute and I need you to research how these three jurisdictions (the only three that could possibly matter) will deal with different terms under UCC § 2-207."  Even if corporate counsel did say that, a good lawyer will usually have to look over the entire transaction and see if there are additional issues worth looking at.  But the usual situation is that your client tells you a version of the facts and you have to find the legal issues in a fluid situation in which you discover through the use of your legal skills that your client did not tell you the full story.  The process of dealing with that world has to begin in law school, and it will not begin well if I tell my students  at the beginning of every hour what skills or doctrine they are supposed to develop in the next 50 minutes.  
 
Fellow educators: Perhaps you disagree with me.  Perhaps you had terrible experiences as a law student with professors who never told you what you were supposed to be accomplishing in a course, and you would never teach the way you were taught.  To you I say, fine.  If you have found a way to teach that enables you to transmit the material to your students, and your students emerge enriched and empowered, keep doing what you are doing.  My way would not work for you, and your way might not work for me.  But legal education will not be enriched if we replace one system in which everybody teaches the same way (the myth of the Socratic drone faculty) with another system in which everybody teaches law school as if it were college (or high school).
 
 

April 15, 2015 in Commentary, Teaching | Permalink | Comments (7) | TrackBack (0)

Tuesday, April 14, 2015

Why Is the Legal Academy Incapable of Standing Up for Itself?

ScholarI love my job.  It is not high-paying, given the alternatives for people with my credentials.  And I work very long hours.  I work long hours on weekdays, and I work on most weekends as though they were weekdays.  I take work with me when I go on vacation.  There is rarely a day when I do not work, vacation days included. 

Being a law professor has its perks.  I have job security.  I get to write about topics that interest me, and I get to share a learning experience with students who are motivated and, if I'm doing my job right, excited about the subject matter.  I am part of an institution that I have a role in shaping and part of a community in which my expertise and commitment is valued.  

But there are numerous forces that resent the legal academy and do all they can to make the working conditions of legal academics outside of the top tier look more like teaching high school.  It is not that legal education ought to be impervious to outside criticism, but the solutions that I am seeing to the problems of legal education tend to be driven by anecdote rather than data and by educational models that are not appropriate for legal education.  

My own students, with whom I am happy to say I have very good relationships, sometimes complain to me about how "the law school" or the "career planning center" or "the administration" doesn't do enough to get them jobs, or only cares about the Law Review students, etc.  Their experience of my institution does not accord with my own, and since I was an administrator for a couple of years, I have intimate knowledge of the workings of every department in my law school.

Here's what I see.  I see faculty and staff members who are dedicated -- if not obsessed -- with the institution for which they work.  When we get together outside of the law school for social gatherings, we don't talk about sports or movies or the latest legal issues in our fields or before the Supreme Court.  We talk about our students' prospects, about our curriculum and about legal education.  My law school is a group of people dedicated to the success of our students.  We are constantly experimenting to try to find ways teach students more effectively and to better prepare them for the practice of law.  In our experimentation, we take wrong steps, but we monitor those steps and strive to correct them.  The institution is filled with imperfections because the institution consists of people, and people have their limitations and faults.

In response to the crisis in legal education, my law school has dramatically increased faculty and staff work loads in order to deliver a revised curriculum, devised ways to reduce student debt loads, and greatly increased the resources and opportunities available for students.  In my conversations with faculty members from other law schools, I find that while my law school has innovated in unique ways, most law schools are struggling with the same issues and redoubling efforts to meet student needs in new ways.  

Law schools are being squeezed.  The ABA is creating new standards that will limit the flexibility that educators need to create the best possible learning environments in their classrooms.  The legal profession is pressuring law schools to prepare students to practice when those students increasingly arrive at law school without the skills that they will need to succeed as attorneys.  Such students need more time, not less, to master doctrine and legal skills, but the profession pushes us to focus on experiential learning, the most complex and expensive form of education, before students have the requisite skills to do so successfully, and at a time of dwindling resources when law schools cannot afford to keep the teaching staff they already have.  And students arrive expecting us to hand them jobs when it simply has never been the case that a J.D. guaranteed every student the job of her dreams at the age of 25.

And how do legal academics respond to these attacks that come at them from every direction?  With some rare exceptions, we respond with self-flagellation.  This is the first of a series of posts in which I plan to defend my profession.  Outside perspectives are welcome, but the truth is that we know our own business better than anyone, and we ought to be full-throated in defending those parts of our educational model that work for our students.  

Future posts will defend legal pedagogy, including hiding the ball, legal scholarship, and the wisdom of investing in legal education.  Stay tuned.

April 14, 2015 in Teaching | Permalink | Comments (0) | TrackBack (0)

Weekly Top Tens from the Social Science Research Network

SSRNSSRN Top Downloads For Contracts & Commercial Law eJournal
RECENT TOP PAPERS 

Rank

DownloadsPaper Title
1 434 Contrived Threats v. Uncontrived Warnings: A General Solution to the Puzzles of Contractual Duress, Unconstitutional Conditions, and Blackmail 
Einer Elhauge 
Harvard Law School 
2 355 Hello Barbie: First They Will Monitor You, Then They Will Discriminate Against You. Perfectly. 
Irina D. Manta and David S. Olson 
Hofstra University - Maurice A. Deane School of Law and Boston College Law School 
3 239 The Choice-of-Law Revolution Fifty Years after Currie: An End and a Beginning 
Symeon C. Symeonides 
Willamette University - College of Law 
4 173 Contract as Empowerment 
Robin Bradley Kar 
University of Illinois College of Law 
5 163 The Aesthetics of Contract Theory 
Efi Zemach and Omri Ben-Zvi 
Hebrew University of Jerusalem - Faculty of Law and Hebrew University of Jerusalem - Faculty of Law 
6 121 The Future of Contract Law in Europe 
Jan M. Smits 
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI) 
7 113 Loyalty Rebates after Intel: Time for the European Court of Justice to Overrule Hoffman-La Roche 
Damien Geradin 
George Mason University School of LawTilburg University - Tilburg Law and Economics Center (TILEC) 
8 108 Insider Trading in Commodities Markets 
Andrew Verstein 
Wake Forest University School of Law 
9 96 Judicial Deregulation of Consumer Markets 
Max N. Helveston 
DePaul University - College of Law 
10 95 A Fuller Understanding of Contractual Commitment 
Zev J. Eigen and David A. Hoffman 
Northwestern University School of Law and Temple University - James E. Beasley School of Law 

SSRN Top Downloads For LSN: Contracts (Topic) 
RECENT TOP PAPERS 

 

RankDownloadsPaper Title
1 434 Contrived Threats v. Uncontrived Warnings: A General Solution to the Puzzles of Contractual Duress, Unconstitutional Conditions, and Blackmail 
Einer Elhauge 
Harvard Law School 
2 239 The Choice-of-Law Revolution Fifty Years after Currie: An End and a Beginning 
Symeon C. Symeonides 
Willamette University - College of Law 
3 173 Contract as Empowerment 
Robin Bradley Kar 
University of Illinois College of Law 
4 163 The Aesthetics of Contract Theory 
Efi Zemach and Omri Ben-Zvi 
Hebrew University of Jerusalem - Faculty of Law and Hebrew University of Jerusalem - Faculty of Law 
5 123 When Faith Falls Short: Bankruptcy Decisions of Churches 
Pamela Foohey 
Indiana University Maurer School of Law 
6 121 The Future of Contract Law in Europe 
Jan M. Smits 
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI) 
7 96 Judicial Deregulation of Consumer Markets 
Max N. Helveston 
DePaul University - College of Law 
8 95 A Fuller Understanding of Contractual Commitment 
Zev J. Eigen and David A. Hoffman 
Northwestern University School of Law and Temple University - James E. Beasley School of Law 
9 86 Antitrust Arbitration and Merger Approval 
Mark A. Lemley and Christopher R. Leslie 
Stanford Law School and University of California, Irvine School of Law 
10 82 Manufactured Consent: The Problem of Arbitration Clauses in Corporate Charters and Bylaws 
Ann M Lipton 
Duke University School of Law 

 

April 14, 2015 in Recent Scholarship | Permalink | TrackBack (0)

Monday, April 13, 2015

Rejecting a Rejection Letter

A few weeks ago, 17-year old Siobhan O’Dell became known online for her bold and unusual rejection of Duke University’s rejection of her college application.  She wrote:

"Thank you for your rejection letter of March 26, 2015.  After careful consideration, I regret to inform you that I am unable to accept your refusal to offer me admission into the Fall 2015 freshman class at Duke.  This year I have been fortunate enough to receive rejection letters from the best and brightest universities in the country.  With a pool of letters so diverse and accomplished I was unable to accept reject letters I would have been able to only several years ago."

Alas, applying for college does not work like that.  Accordingly, Duke’s response was simply that Ms. O’Dell’s only option is to appeal the decision, but that her chances of a reversal are not good: “If you choose to appeal, we welcome your request, but I do not wish to raise unreasonable expectations on your part," the university representative writes.

Nice try, though!  It sounds like Ms. O’Dell would do well in a Contracts Law class.

April 13, 2015 in Current Affairs, In the News | Permalink | Comments (0) | TrackBack (0)

Three Arbitration Decisions from March

1st_Circuit_sealOn March 20, 2015, in First State Ins. v. National Casualty Co.the First Circuit affirmed a District Court's refusal to vacate an arbitral remedy that the party seeking vacation claimed was "plucked out of thin air" and not derived from any term in the contract at issue.    When reviewing an arbitral award, the only question is whether the arbiter was even arguably construing the agreements.  Here, the First Circuit found that the arbiter unquestionably was doing so.  Moreover, the contracts at issue directed the arbiter to consider each agreement as "an honorable engagement rather than merely a legal obligation" and relieved the arbiters "of all judicial formalities and may abstain from following the strict rules of law."  This provision permitted arbiters to grant equitable remedies, which is precisely what they did.  Justice Souter sat on the panel and joined in Judge Selya's opinion for the unanimous panel.

8th Circuit SealOn March 25, 2015, the Eight Circuit decided Torres v. Simpatico, Inc.  The issue in that case was that a number of franchisees claimed that an arbitration provision in a franchise agreement was unconscionable because the individual arbitration processes were prohibitively expensive.  The Eighth Circuit affirmed the District Court's finding that plaintiffs had not met their burden of establishing that the arbitration costs would be prohibitively high for any particular plaintiff.  The court also rejected plaintiffs claim that non-signatories to the arbitration agreement could not seek to compel arbitration.  In this case, the non-signatories were third-party beneficiaries entitled to invoke the arbitration provision.  

6th-Circuit-Court-SealOn March 27, 2015, the Sixth Circuit decided Shy v. Navistar Int'l, Corp.  That case involved claims that Navistar was improperly classifying aspects of its business activities and structuring its business so as to evade its profit-sharing obligations under an agreement relating to a consent decree in a litigation relating to Navistar employee retirement benefits.  The Sixth Circuit affirmed the District Court's finding that the claims were subject to an arbitration provision in the parties' agreement.  However, it reversed the District Court's finding that Navistar's conduct amounted to a waiver of its right to compel arbitration.  The case was remanded with instructions to compel arbitration.  Judge Clay dissented, finding both that the parties had not contemplated arbitrating claims of this scope that that Navistar had waived its right to arbitration "by engaging in an unmistakable campaign of avoidance and delay both before and after the SBC intervened to enforce the settlement agreement in the instant litigation." 

April 13, 2015 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Wednesday, April 8, 2015

New in Print

Tuesday, April 7, 2015

Weekly Top Tens from the Social Science Research Network

SSRNSSRN Top Downloads For Contracts & Commercial Law eJournal
RECENT TOP PAPERS 

RankDownloadsPaper Title
1 376 Contrived Threats v. Uncontrived Warnings: A General Solution to the Puzzles of Contractual Duress, Unconstitutional Conditions, and Blackmail 
Einer Elhauge 
Harvard Law School 
2 345 Hello Barbie: First They Will Monitor You, Then They Will Discriminate Against You. Perfectly. 
Irina D. Manta and David S. Olson 
Hofstra University - Maurice A. Deane School of Law and Boston College Law School 
3 236 The Choice-of-Law Revolution Fifty Years after Currie: An End and a Beginning 
Symeon C. Symeonides 
Willamette University - College of Law 
4 172 Contract as Empowerment 
Robin Bradley Kar 
University of Illinois College of Law 
5 160 Fiduciary Relationships: Ensuring the Loyal Exercise of Judgement on Behalf of Another 
Lionel Smith 
McGill University - Faculty of Law - Paul-André Crépeau Centre for Private and Comparative Law 
6 156 The Aesthetics of Contract Theory 
Efi Zemach and Omri Ben-Zvi 
Hebrew University of Jerusalem - Faculty of Law and Hebrew University of Jerusalem - Faculty of Law 
7 126 Reasonable Investor(s) 
Tom C. W. Lin 
Temple University - James E. Beasley School of Law 
8 114 The Future of Contract Law in Europe 
Jan M. Smits 
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI) 
9 106 Insider Trading in Commodities Markets 
Andrew Verstein 
Wake Forest University School of Law 

SSRN Top Downloads For LSN: Contracts (Topic)
RECENT TOP PAPERS 

RankDownloadsPaper Title
1 376 Contrived Threats v. Uncontrived Warnings: A General Solution to the Puzzles of Contractual Duress, Unconstitutional Conditions, and Blackmail 
Einer Elhauge 
Harvard Law School 
2 236 The Choice-of-Law Revolution Fifty Years after Currie: An End and a Beginning 
Symeon C. Symeonides 
Willamette University - College of Law 
3 172 Contract as Empowerment 
Robin Bradley Kar 
University of Illinois College of Law 
4 156 The Aesthetics of Contract Theory 
Efi Zemach and Omri Ben-Zvi 
Hebrew University of Jerusalem - Faculty of Law and Hebrew University of Jerusalem - Faculty of Law 
5 120 When Faith Falls Short: Bankruptcy Decisions of Churches 
Pamela Foohey 
Indiana University Maurer School of Law 
6 114 The Future of Contract Law in Europe 
Jan M. Smits 
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI) 
Date posted to database: 17 Feb 2015 
Last Revised: 18 Feb 2015
7 93 A Fuller Understanding of Contractual Commitment 
Zev J. Eigen and David A. Hoffman 
Northwestern University School of Law and Temple University - James E. Beasley School of Law 
8 87 Judicial Deregulation of Consumer Markets 
Max N. Helveston 
DePaul University - College of Law 
Date posted to database: 27 Mar 2015 
Last Revised: 27 Mar 2015
9 85 Liberalism's Fine Print: Boilerplate's Allusion to Human Nature 
Kenneth K. Ching 
Regent University - School of Law 
10 74 Manufactured Consent: The Problem of Arbitration Clauses in Corporate Charters and Bylaws 
Ann M Lipton 
Duke University School of Law 

 

April 7, 2015 in Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Monday, April 6, 2015

Law Professors Sue Law School for Breach of Contract

We saw this report over on the Faculty Lounge.  This is fallout from the proposed merger of Hamline University School of Law and the William Mitchell College of Law (William Mitchell).  Two William Mitchell faculty members are claiming that the merger, which will necessitate the elimination of two tenured faculty lines, is a a breach of contract.  

William Mitchell
The Complaint alleges that law schools must comply with ABA Standard 405(b) by maintaining policies for academic freedom and tenure.  William Mitchell has a faculty handbook that incorporates the AAUP's 1940 Statement on Academic Freedom, which regards tenure as indispensable to such freedom.  Under William Mitchell's Tenure Code, tenured professors may only be dismissed for adequate cause or in cases of "bona fide financial exigency."  

In February, when the merger of the two law schools was proposed, William Mitchell announced that is was considering amendments to its Tenure Code to permit termination of tenure based on a merger.  Plaintiffs allege that William Mitchell now intends to amend its Tenure Code to permit termination of tenure even if the merger does not go through, to permit termination of tenure without cause and without declaring the existence of a financial exigency.  

Plaintiffs seek a judgment declaring that the proposed amendment to William Mitchell's Tenure Code would constitute a breach of contract.

April 6, 2015 in In the News, Recent Cases | Permalink | Comments (0) | TrackBack (0)

Friday, April 3, 2015

Playing Fair Down Under

In New Zealand, a ban on unfair terms in consumer contracts has taken effect and will, according to the Commerce Commission, will be enforced starting immediately.   The regulation forms part of the 2013 Fair Trading Act.  Australia introduced a similar ban in 2010.

The Consumer Organization “Consumer NZ” has launched its “Play Fair” campaign to increase awareness of the new law and related consumer issues.   According to Consumer NZ, companies had been given plenty of notice of the upcoming ban and thus to review their contracts in order to remove unfair terms, but had to a large extent failed to do so.

The Act will apply to standard-form consumer contracts often used by electricity retailers, gyms, TV service providers and many others.

But what makes a term “unfair”?  The Act defines a term as unfair if it would “would cause a significant imbalance between the rights of the company and the consumer, is not reasonably necessary to protect the legitimate interests of the company, [or] would cause detriment, whether financial or otherwise, to the consumer if it were to be applied or relied on.”   The Act contains a list of terms that courts are likely to regard as unfair.  This covers terms that would allow a company to unilaterally vary the terms of the contract, renew or terminate it, penalize consumers for breaching or terminating the contract, vary the price without giving consumers the right to terminate the contract, or vary the characteristics of the goods or services to be supplied.  

After intense lobbying by the insurance industry, that industry was exempted from the ban.

Even though this Act is a consumer protection device, only the New Zealand Commerce Commission can, for now, enforce it.  The contemplated fine for violations is $600,000.

In the USA, there are, of course, various statutory and common law protections against unfair terms such as those contained in the UCC as well as fraud protections.  However, the deterrence effect of these does not seem effective in relation to at least some industries.  Alternatively, perhaps the protections are not broad enough, sufficiently well-known, or sufficiently easy to enforce.  Or perhaps people just give up and deal with other companies, or pay what they are asked to do by the companies. 

I personally just spent no less than two hours chatting online with a major health care provider over their sudden allegation that a certain doctor I had used was “not in network” (with me thus allegedly owing a few thousand dollars to the insurance company) despite that particular provider being listed on the provider’s own website as “in network” and the doctor having confirmed this.  Eventually and after numerous contractual and factual arguments, I was able to persuade provider that I was right.  But how many others in my situation would simply give up and cave in to, as was the case, the provider’s repeated bootstrapping arguments that “their ultimate price was fair”?

Only two days later, I heard from a moving company that had agreed to move a car for me for $500 (and confirmed this twice) that the “price is actually $600.”  When I told them no, it is not, they repeated their allegation that “we did not have a contract.”  After telling them a few things about contract formation and modification principles and after declining listening to their attempted, time-consuming warnings about using other companies that were “scam artists,” I am now looking for a new contract another vendor.

Despite whatever legal protections we may officially have in this country against consumer fraud, it is still rampant.  New Zealand’s government enforcement system is interesting, but time will tell if they have more success preventing consumer fraud than we do here.

April 3, 2015 in Commentary, Current Affairs, Legislation, True Contracts | Permalink | Comments (0) | TrackBack (0)

Thursday, April 2, 2015

August Wilson's Two Trains Running and R.2d Section 228

HamI just saw the Goodman Theater's production of August Wilson's Two Train's Running.  It is a great play, and this is a first-rate production in every way.  One character, Hambone, is a reification of contracts injustice.  Hambone painted a fence for an offstage character, Lutz.  Lutz promised to pay Hambone a chicken for his work and a ham if Hambone did an especially good job.  Lutz paid Hambone a chicken.  This occurred nine years prior to the action in the play.  Hambone's lines in the play consist almost entirely of "Give me my ham!" and "He gonna give me my ham!"  At one point, another character teaches him some additional slogans like "Black is beautiful," but Hambone is never too far from his mantra, as the aggrieved non-breaching party.

Although the play never references R.2d § 228, we are clearly in the realm of conditions of satisfaction.  Hambone's entitlement to the ham should have been determined on an objective basis.  All of the characters in the play seem agreed that, were such a standard applied, a finder of fact would certainly award Hambone a ham.  But Hambone is Black, poor, and ill-equipped for a legal battle.  Lutz is white and so powerful that he is able to define Hambone's character without ever suffering the indignity of appearing on stage. 

Does Hambone ever get his ham?  I don't want to give away too much so I will just say, yes and no.

April 2, 2015 in Commentary, Miscellaneous | Permalink | Comments (0) | TrackBack (0)

Wednesday, April 1, 2015

Mike Pence and Lambda Legal Reach Agreement

PenceIndiana Governor Mike Pence (pictured) is in a tough spot.  As reported here, Indiana is facing protests, threats of boycotts and possible losses of business opportunities as a result of its version of the state Religious Freedom Restoration Act.  As illustrated in the Indy Star here, Indiana's law makes it easier for individuals and business entities to rely on the statute as a defense to allegations of discriminatory treatment.  Even Pence's predecessor, Mitch Daniels, in his current capacity as a university president, has distanced himself from the law.  

Pence is in a tough spot because he signed the law to show his conservative bona fides, perhaps because he has aspirations to national executive office.  But he may have overreached, as the backlash against the new law may hurt his chances to appeal to a national electorate.  Pence's position is made more difficult by the fact that he now wants the Indiana legislature to "clarify" the law so that it doesn't look like it was designed to discriminate.  But the Indiana legislators may well have exactly the clarity they wanted, and they do not share Pence's national aspirations. 

Lambda Legal is among the many organizations that have objected to the law as a license to discriminate against LGBT groups, especially in the context of same-sex marriages.  Now Lambba is offering Pence a way out. In a draft contract that the parties have shared with this blog (and only with this blog as far as we know), Pence and Lambda have agreed that Pence will hire LGBT applicants for at least 30% of staff associated with his current position as Governor of Indiana and as part of his election staff leadership for all political campaigns through 2020.  "I may lead a red state," Pence told our correspondent, "but I expect to be flying the rainbow flag over the White House in a few years."  A Lambda spokesperson said that details of the agreement are still being negotiated but that "all us us are Lambda are looking forward to a faaabulous Inaugural Ball."

Clearly this a win-win.

April 1, 2015 in Government Contracting, In the News | Permalink | Comments (0) | TrackBack (0)

New in Print

Tuesday, March 31, 2015

Physicist Publishes Autobiography, Defying the Department of Energy: A Contracts Take

Building the H-BombMy friend Ken Ford is enjoying his fifteen minutes of fame, courtesy of the Department of Energy (D0E), which is displeased with his memoir, Building the H-Bomb: A Personal History.  According to this report in the New York Times, DoE officials told Dr. Ford to make cuts to his book that would have eliminated 10% of the text.  DoE personnel flagged 60 separate passages in the book for editing.

This demand (and the DoE made clear that it was making demands not requests) came as a surprise to Dr. Ford, who had submitted the book for DoE review expecting the process to be a mere formality.  In Dr. Ford's view, the book contains no secrets, as the information that he included in his book relating to the history of the hydrogen bomb either had been previously disclosed or was released to him through FOIA requests.  The DoE sees things differently, but the agency is unlikely to respond to the publication of Dr. Ford's book, in large part because any action it takes would only draw attention to the information whose disclosure it regards as improper.  

The Times articles covers the story well and provides some examples of material that the DoE regards as classified but Dr. Ford regards as public.  We would like to focus on a couple of contractual issues.  First, the Times references Ken's alleged contractual obligation arising from a non-disclosure agreement he signed in the 50s.  Dr. Ford does not recall what that agreement said, but he provided this blog with a copy of a similar agreement dated from September 2014.  The DoE asked Dr. Ford to sign this new non-disclosure agreement  in connection with its review of his manuscript.   That document provides the government with multiple remedies should Dr. Ford reveal any classified information, including:

  • termination of security clearances and government employment;
  • recovery of royalties and other benefits that might result from any sort of disclosure of classified information; and 
  • criminal prosecution under Titles 18 and 50 of the U.S. Code and the Intelligence Identities Protection Act of 1982.

Given this non-disclosure agreement, one would expect that Dr. Ford's publisher would be reluctant to publish the book, fearing that it too might become a target of government scrutiny.  In order to protect his publisher against liability, Dr. Ford agreed to amend his publication agreement to expand the usual indemnification clause.  The additional language in the contract provides that Dr. Ford will indemnify his publisher "against any suit, demand, claim or recovery, finally sustained, by reason of . . . any material whose dissemination is judged by the United States Government to have violated the Author's obligations regarding the handling of sensitive information."  

Steven Aftergood provides further information on the Federation of American Science Secrecy blog here.  

Dr. Ford provides an overview of the story that his book tells, as well as links to about a score of documents, eight of which are annotated with Dr. Ford's comments, on George Washington University's National Security Archives.

March 31, 2015 in Books, Government Contracting, In the News, Science | Permalink | Comments (0) | TrackBack (0)

Weekly Top Tens from the Social Science Research Network

SSRN Top Downloads For Contracts & Commercial Law eJournal
RECENT TOP PAPERS

RankDownloadsPaper Title
1 371 Contrived Threats v. Uncontrived Warnings: A General Solution to the Puzzles of Contractual Duress, Unconstitutional Conditions, and Blackmail 
Einer Elhauge 
Harvard Law School 
2 329 Hello Barbie: First They Will Monitor You, Then They Will Discriminate Against You. Perfectly. 
Irina D. Manta and David S. Olson 
Hofstra University - Maurice A. Deane School of Law and Boston College Law School 
3 229 The Choice-of-Law Revolution Fifty Years after Currie: An End and a Beginning 
Symeon C. Symeonides 
Willamette University - College of Law 
4 165 Contract as Empowerment 
Robin Bradley Kar 
University of Illinois College of Law 
5 157 Fiduciary Relationships: Ensuring the Loyal Exercise of Judgement on Behalf of Another 
Lionel Smith 
McGill University - Faculty of Law - Paul-André Crépeau Centre for Private and Comparative Law 
6 148 The Aesthetics of Contract Theory 
Efi Zemach and Omri Ben-Zvi 
Hebrew University of Jerusalem - Faculty of Law and Hebrew University of Jerusalem - Faculty of Law 
7 115 Second-Liens and the Leverage Option 
Adam J. Levitin and Susan M. Wachter 
Georgetown University Law Center and University of Pennsylvania - Wharton School, Department of Real Estate 
8 112 The Future of Contract Law in Europe 
Jan M. Smits 
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI) 
9 101 Insider Trading in Commodities Markets 
Andrew Verstein 
Wake Forest University School of Law 
10 87 A Fuller Understanding of Contractual Commitment 
Zev J. Eigen and David A. Hoffman 
Northwestern University School of Law and Temple University - James E. Beasley School of Law

SSRN Top Downloads For LSN: Contracts (Topic)
RECENT TOP PAPERS 

RankDownloadsPaper Title
1 371 Contrived Threats v. Uncontrived Warnings: A General Solution to the Puzzles of Contractual Duress, Unconstitutional Conditions, and Blackmail 
Einer Elhauge 
Harvard Law School 
2 229 The Choice-of-Law Revolution Fifty Years after Currie: An End and a Beginning 
Symeon C. Symeonides 
Willamette University - College of Law 
3 165 Contract as Empowerment 
Robin Bradley Kar 
University of Illinois College of Law 
4 148 The Aesthetics of Contract Theory 
Efi Zemach and Omri Ben-Zvi 
Hebrew University of Jerusalem - Faculty of Law and Hebrew University of Jerusalem - Faculty of Law 
5 117 When Faith Falls Short: Bankruptcy Decisions of Churches 
Pamela Foohey 
Indiana University Maurer School of Law 
6 112 The Future of Contract Law in Europe 
Jan M. Smits 
Maastricht University Faculty of Law - Maastricht European Private Law Institute (M-EPLI) 
7 87 A Fuller Understanding of Contractual Commitment 
Zev J. Eigen and David A. Hoffman 
Northwestern University School of Law and Temple University - James E. Beasley School of Law 
8 85 Procedural Fairness by the Corporation 
Kish Parella 
Washington and Lee University - School of Law 
9 84 Liberalism's Fine Print: Boilerplate's Allusion to Human Nature 
Kenneth K. Ching 
Regent University - School of Law 
10 67 Manufactured Consent: The Problem of Arbitration Clauses in Corporate Charters and Bylaws 
Ann M Lipton 
Duke University School of Law 

 

 

 

March 31, 2015 in Recent Scholarship | Permalink | TrackBack (0)

Monday, March 30, 2015

On a Lighter Note: Valet Service Companies Needing to Take Crash Course on Contracts

Earlier this month, Los Angeles-area media reported a somewhat humorous of a valet service that gave away a relatively expensive new car to a random guy claiming that he had "lost the [valet] ticket."  Yup, the valet service actually just gave the car to the man who was sporting an Ohio state tattoo.  (Of course, this story is not funny for the frustrated car owner).

But wait, the story gets weirder than that (it is, after all, LA, where we worry a lot about our cars...): the valet service sent the responsible employee home and referred the customer to his insurance company.  Initial reports indicated that the insurance company did not want to pay for this loss as no theft had occurred... as is always the case, however, the media did not follow up on the end of this story, to the best of my knowledge.

Another valet contract that you must read and that was shared today on the AALS listserv for Contract Professors reminded me of this story.  Hat tip to Professor Davis!

Contract

Valet companies may have to brush up on their contract writing skills soon...

March 30, 2015 in Commentary, Contract Profs, Current Affairs, Famous Cases, In the News, True Contracts | Permalink | Comments (0) | TrackBack (0)

Eric Goldman on Consumer Review Bans

Eric GoldmanWriting for Forbes.com, Santa Clara Law Prof Eric Goldman (pictured) reports on a recent SDNY case, Galland v. Johnston The case is similar to others about which we have blogged recently.  Plaintiffs rent out their apartment in Paris through a website.  The rental agreement associated with the property provides that defendants would “not to use blogs or websites for complaints, anonymously or not."  Notwithstanding this clause, defendants posted reviews of the apartment that were not entirely positive.  In one case, plaintiffs offered a defendant $300 to remove a three-star review from a website.  The defendant refused and complained to the website.  Plaintiff then sued defendants for, among other things, breach of contract, extortion and defamation.

The magistrate judge dismissed all of the claims except the breach of contract claim.  Plaintiffs objected to this disposition.  Defendants did not, which may be a good reason why the District Court let the breach of contract claim stand while upholding the Magistrate's dismissal of the remaining claims.  Indeed, the District Court's opinion did not address the breach of contract claim.  

Professor Goldman expresses surprise that the Magistrate allowed the breach of contract claim to stand.  Other New York courts have found that contracts clauses that prohibit customer reviews are a deceptive business violate New York's consumer protection laws.  Professor Goldman also points out that they violate public policy regardless of New York law.

March 30, 2015 in In the News, Recent Cases, True Contracts | Permalink | Comments (0) | TrackBack (0)

Thursday, March 26, 2015

Water Contracts and Adequate Assurances (to Continue Business as Usual)

Some weeks ago, I blogged here about water rights and shortages in drought-ridden California.  Of course, California is not the only state where contractual water rights interface with development and public health concerns. 

In Ohio, shale driller Gulfport Energy recently filed suit against the town of Barnesville for rights to extract water for Gulfport’s fracking operations.  Gulfport had a contract with Barnesville entitling it to draw water from a local reservoir at one cent per gallon.  Under the contract, Gulfport would be able to draw the water unless the village determined that such action would endanger public health.  Water rights were subsequently also issued to another driller.  In the fall of 2014, the village told Gulfport to stop drawing water from the reservoir because of too low water levels.  Gulfport’s suit now asks for adequate assurances of performance of the water contract to ensure that it can continue its fracking operations. 

Whether that is a good idea is another story.  From a short-term perspective: yes, we need energy preferably domestically sourced to avoid international supply interruptions and the geopolitical problems that are associated with importing energy raw materials.  But fracking and fossil fuel production in general are associated with other severe problems including heavy water usage in the case of fracking.  Such water, the argument goes, is better used for other things such as farming and household consumption. 

Business as usual for fracking companies may not be the best idea seen from a societal point of view.  Contracts rights are only a small part of this much bigger problem.  However, time seems to have come for governments to incorporate escape clauses not only for “public health concerns” into water contracts, but also for drought concerns.  This is not always done, as the above case shows, but such a relatively easy step could help solve at least some contractual disputes.  In times of increasing temperatures and decreasing rainfall in some areas, such contract drafting may well make sense.

March 26, 2015 in Commentary, Current Affairs, Food and Drink, Government Contracting, True Contracts | Permalink | TrackBack (0)

Where Congress Won't Act, Private Ordering Fills a Gap

ThermometerToday's New York Times reports that Microsoft will require the companies with which it partners, its contractors and vendors who employ more than 50 workers, to provide their employees who do work for Microsoft with 15 days of annual paid sick leave and vacation time.  Microsoft expects that it will have to increase its pay to these partners to help them with the added expense of the policy.  

As the Times points out, it is a very American approach to the protection of workers' rights.   Congress will not act and only a few state legislatures have done so.  Microsoft, like other large technology companies, can afford to provide decent wages and benefits to its workers.  However, companies increasingly prefer to contract work out to small companies that do not treat their workers nearly as well.  

The Times notes that the gap is not only between skilled computer programmers and unskilled or semi-skilled janitors or groundskeepers but also between whites and African Americans and Latinos.  While the latter, traditionally-underrepresented minorities account for our 3-4% of tech workers, they account for 75% of janitorial and maintenance workers.  Eschewing Google's and Facebook's approaches of replacing contract workers with its own employees, entitled to company benefits, Microsoft has explained its move in a manner also consistent with the great American tradition of enlightened self interest.  Microsoft general counsel explained that: 1) happy workers are more productive; and 2) sick workers who come to work can infect others.  

This move can have a big impact, especially if other major companies follow Microsoft's lead, but I'm not sure that the effects will all be good for workers.  If a contractor has some workers that work for Microsoft and some that don't, the Microsoft jobs suddenly become highly sought-after.  A company may try to stay below the 50-employee threshold to avoid the private regulation.  Or it may divide Microsoft work among its staff (in the interests of internal morale), which might dilute the effects of the regulation.  If you do only 20% of your work for Microsoft, do you only qualify for three days of vacation/sick leave?  It may take a few years (and a few contracts disputes) to work out the kinks.

March 26, 2015 in Commentary, In the News, True Contracts | Permalink | Comments (0) | TrackBack (0)

Fifth Circuit Reverses District Court's Order Vacating Arbitral Award

5th CircuitBNSF Railway Company (BNSF) and Alstom Transportation, Inc. (Alstom) had a Maintenance Agreement that included an arbitration clause.  BNSF notified Alstom that it was eliminating locomotives from its active fleet, which triggered a clause in the Maintenance Agreement that required discussions so that an economic adjustment could be made in Alstom's favor.  BNSF then terminated the Agreement before any such discussions took place.  

BNSF sought declaratory relief in a District Court, but the District Court granted Alstom's motion to compel arbitration.  The Arbitration Panel (Panel) found that BNSF's termination of the contract violated the contractual duty of good faith and fair dealing and awarded Alstom damages.  When Alstom sought to enforce the award in the District Court, BNSF moved to vacate.  The District Court granted the motion to vacate,  finding that the Panel had not applied Illinois law correctly.

In BNSF Railway Co. v. Alstom Trans., Inc., the Fifth Circuit vacated the District Court's order and remanded with instruction to reinstate the arbitral award.  The Fifth Circuit noted that the Supreme Court has instructed that district courts’ review of arbitrators’ awards under § 10(a)(4) is limited to the “sole question . . . [of] whether the arbitrator (even arguably) interpreted the parties’ contract.” Oxford Health, 133 S. Ct. at 2068.  After a brief review of the interpretive options, the Fifth Circuit concluded that "BNSF fails to show that the Panel could not have been interpreting the Agreement when it concluded that Illinois law imposes a limitation on the right to terminate 'without cause' based on the covenant of good faith and fair dealing."   The Panel also interpreted the Agreement in determining damages.  For the purposes of judicial review, it does not matter whether the interpretation was right or wrong.

March 26, 2015 in Recent Cases | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 25, 2015

New in Print

Pile of BooksAdi Ayal & Uri Benoliel, Revitalizing the Case for Good Cause Statutes: The Role of Review Sites, 19 Stan. J.L. Bus. & Fin. 331 (2014)

Aditi Bagchi, The Political Economy of Regulating Contract, 62 Am. J. Comp. L. 687-738 (2014). 

Aditi Bagchi, Parallel Contract, 75 U. Pitt. L. Rev. 139 (2013)

Natalie M. Banta, Inherit the Cloud: The Role of Private Contracts in Distributing or Deleting Digital Assets at Death, 83 Fordham L. Rev. 799 (2014).

John F. Coyle & Joseph M. Green, Contractual Innovation in Venture Capital, 66 Hastings L.J. 133 (2014)

Christopher R. Drahozal & Erin O'Hara O'Connor, Unbundling Procedure: Carve-outs from Arbitration Clauses, 66 Fla. L. Rev. 1945 (2014)

Robert W. Emerson, Assessing Awuah v. Coverall North America, Inc.: The Franchisee as a Dependent Contractor, 19 Stan. J.L. Bus. & Fin. 203 (2014)

Sanne Jansen, Price Reduction under the CISG: A 21st Century Perspective, 32 J.L. & Com. 325 (2014)

Sarath Sanga, Choice of Law: An Empirical Analysis, 11 J. Empirical Legal Stud. 894 (2014)

March 25, 2015 in Recent Scholarship | Permalink | TrackBack (0)