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Amendable, Illusory, Contracts

Dave Hoffman

Dave Hoffman is the Murray Shusterman Professor of Transactional and Business Law at Temple Law School. He specializes in law and psychology, contracts, and quantitative analysis of civil procedure. He currently teaches contracts, civil procedure, corporations, and law and economics.

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3 Responses

  1. I haven’t settled on the right normative answer, but this is an ongoing debate in at least a couple other areas:

    1. Credit cards
    2. Online service providers.

    I’m publishing an article on whether the latter complies with the rule of law, at least with respect to virtual worlds: http://papers.ssrn.com/abstract=1463583

  2. Alan Rau says:

    Start small: The natural reading of the “amendability” language is that the Club can amend unilaterally for the future, after a reasonable notice period—but that it can’t retroactively affect vested rights. This is the common reading given to arbitration provisions, where “amendment” can’t affect a dispute which has already arisen, which reading saves such provisions from the charge of being “illusory” or “unilateral.” You don’t have to get into the problem of “materiality,” which may be more difficult to calibrate.

  3. Hippo says:

    I don’t see why the clubs shouldn’t keep the money. After all, the US Circuit Courts of Appeals have repeatedly ruled that similar amendment clauses in employment contracts allow employers to cancel retirees’ health benefits no matter how clear and specific the language promising them, whether or not they were bargained for, and even if they have already been relied upon!

    See, e.g.,

    http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1445583

    for a complete summary of this travesty.