Archive for the ‘Contract Law & Beyond’ Category
The Problems and Promise with Terms of Use as the Chaperone of the Social Web
posted by Woodrow Hartzog
The New Republic recently published a piece by Jeffrey Rosen titled “The Delete Squad: Google, Twitter, Facebook, and the New Global Battle Over the Future of Free Speech.” In it, Rosen provides an interesting account of how the content policies of many major websites were developed and how influential those policies are for online expression. The New York Times has a related article about the mounting pressures for Facebook to delete offensive material.
Both articles raise important questions about the proper role of massive information intermediaries with respect to content deletion, but they also hint at a related problem: Facebook and other large websites often have vague restrictions on user behavior in their terms of use that are so expansive as to cover most aspects of interaction on the social web. In essence, these agreements allow intermediaries to serve as a chaperone on the field trip that is our electronically-mediated social experience.
June 11, 2013 at 1:09 am
Posted in: Contract Law & Beyond, Cyberlaw, Privacy
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Contract Evolution
posted by Dave Hoffman
There’s a fantastic symposium issue out of NYU this month, devoted to evolution and innovation in contract terms. There are articles by the ridiculously productive trinity of Choi/Gulati/Posner, a wild piece by Kevin Davis on Contracts as Technology, and a very cool empirical paper by Marotta-Wurgler and Taylor on evolving terms in standard form contracting online. I’m obviously biased toward empirical work on this exact topic, so I’m a sucker for this stuff. But I do think that this kind of empirical and theoretical work is where contract scholarship should be heading in the next 10-20 years. Check it out.
May 24, 2013 at 2:24 pm
Posted in: Conferences, Contract Law & Beyond, Law School (Scholarship)
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Last Call for Contracts Survey
posted by admin
Contracts teachers are asked to complete a brief online survey to help the planning and execution of a symposium Washington Law Review is preparing to host on the exciting new book, Contracts in the Real World: Stories of Popular Contracts and Why They Matter, by Lawrence A. Cunningham of George Washington University (published by Cambridge University Press in 2012).
This innovative text embraces a modern, narrative approach to contract law, exploring how cases ripped from the headlines of recent years often hinge on fundamental principles extracted from the classic cases that appear in contracts casebooks. Such an approach suggests new ways to imagine modern casebooks. In addition to an article by Prof. Cunningham, the WLR will publish in its December 2013 issue a half dozen pieces by many luminaries and notables, including:
Charles Knapp (NYU/Hastings)
Brian Bix (Minnesota)
Erik Gerding (Colorado)
Jake Linford (Florida State)
Jennifer Taub (Vermont)
To help these scholars and WLR editors with this effort, please fill out the online survey today!
April 11, 2013 at 4:00 pm
Posted in: Articles and Books, Contract Law & Beyond, Law Rev (Washington), Law School (Teaching)
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Why Is Privatized Procedure So Rare?
posted by Dave Hoffman
For some time, I’ve been mulling over how closely parties can tailor the rules of civil procedure to their own purposes. That is: can parties write enforceable contract terms which state that if they sue each other, the ordinary procedural rules won’t apply? Do such contracts exist? For example, parties might contract to be able to take 5 depositions in a case instead of the default 10. Or they might dispose of the rules of hearsay. The literature on this topic of private procedure arguably started with the Scott/Triantis piece, Anticipating Litigation in Contract Design, and has gotten new momentum from Bone, Kapeliuk/Klement, Dodge, and Drahozal/Rutledge. My contribution, freshly up on SSRN, ended up being slightly more empirical than I’d expected — though I guess this won’t surprise any of our long-time readers. In Why Is Privatized Procedure So Rare?, I try to explain why there is actually so little private procedure in places we’d expect to see it:
“Increasingly we hear that civil procedure lurks in the shadow of private law. Scholars suggest that the civil rules are mere defaults, applying if the parties fail to contract around them. When judges confront terms modifying court procedures — a trend said to be explosive — they seem all-too-willing to surrender to the inevitable logic of private and efficient private ordering.
How concerned should we be? This Article casts a wide net to find examples of private contracts governing procedure, and finds a decided absence of evidence. I search a large database of agreements entered into by public firms, and a hand-coded set of credit card contracts. In both databases, clauses that craft private procedural rules are rare. This is a surprising finding given recent claims about the prevalence of these clauses, and the economic logic which makes them so compelling.
A developing literature about contract innovation helps to explain this puzzle. Parties are not rationally ignorant of the possibility of privatized procedure, nor are they simply afraid that such terms are unenforceable. Rather, evolution in the market for private procedure, like innovation in contracting generally, is subject to a familiar cycle of product innovation. Further developments in this field will not be linear, uniform and progressive; they will be punctuated, particularized and contingent.”
Download it here. I’d love your comments. It’s out in the scrum, but I’m intending to continue to revise it as data continues to come in.
February 14, 2013 at 10:33 am
Posted in: Civil Procedure, Contract Law & Beyond, Empirical Analysis of Law
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Pick up the Phone!
posted by Dave Hoffman
From Redstone Federal Credit Union’s credit card agreement:
“Collection. If your Account should become past due, or otherwise in default, you will accept telephone calls from us regarding collection of your Account. You understand that the calls may be automatically dialed and a recorded message may be played. You agree that such calls shall not be “unsolicited” calls for the purpose of state or federal law.”
Translation: screening us is breach of contract!
December 20, 2012 at 9:43 am
Posted in: Contract Law & Beyond
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SCOTUS Sustains Assault on Contractual Freedom
posted by Lawrence Cunningham
The Supreme Court continues to reject freedom of contract and the power of contracting and state contract law in favor of its national policy favoring arbitration. Most recently, in a per curium opinion in Nitro-Lift v. Howard, it said Oklahoma is not allowed to apply its own contract law to evaluate the validity of classic contract terms (here covenants not to compete). Instead, due to SCOTUS takes on a federal law and the presence of an arbitration clause in the contract, arbitrators make that decision.
The Court’s opinion stresses its conception of a national policy favoring arbitration, which it has found in recent decades in a century-old statute, the Federal Arbitration Act. That emphasis on this “national policy” marks a retreat from the false pretenses that infect the Court’s precedents on the subject, which pretend to be engaged in the application of contract law.
Despite that improvement in the Court’s honesty, it remains the case that the Court’s approach to this subject diminishes traditional principles of contract laws and the value of contracts. People are held to bargains they did not make or that are recognized by contract law as illegal. But the Court insists that no court is allowed to consider these questions, thanks to its statement of national policy.
In numerous past SCOTUS cases, dissenting opinions were routinely filed exposing the flaws in the Court’s jurisprudence. The recent per curium opinion may signal capitulation, indicating that there are no longer any Justices prepared to object to these mistakes. That defeat means it is clearly time for Congress to rein the Court in. It should make it clear that state courts are responsible for developing and applying state contract law, not SCOTUS, federal courts or private arbitrators.
December 7, 2012 at 4:14 am
Posted in: Contract Law & Beyond, Courts
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CELS VII: Low Variance, High Significance
posted by Dave Hoffman
[CELS VII, held November 9-10, 2012 at Stanford, was a smashing success due in no small part to the work of chief organizer Dan Ho, as well as Dawn Chutkow (of SELS and Cornell) and Stanford's organizing committee. For previous installments in the CELS recap series, see CELS III, IV, V, and VI. For those few readers of this post who are data-skeptics and don’t want to read a play-by-play, resistance is obviously futile and you might as well give up. I hear that TV execs were at CELS scouting for a statistic geek reality show, so think of this as a taste of what’s coming.]
Survey Research isn't just for the 1%!
Unlike last year, I got to the conference early and even went to a methods panel. Skipping the intimidating “Spatial Statistics and the GIS” and the ominous “Bureau of Justice Statistics” panels, I sat in on “Internet Surveys” with Douglas Rivers, of Stanford/Hoover and YouGuv. To give you a sense of the stakes, half of the people in the room regularly use mTurk to run cheap e-surveys. The other half regularly write nasty comments in JELS reviewer forms about using mTurk. (Oddly, I’m in both categories, which would’ve created a funny weighting problem if I were asked my views.) The panel was devoted to the proposition “Internet surveys are much, much more accurate than you thought, and if you don’t believe me, check out some algebraic proof. And the election.” Two contrasting data points. First, as Rivers pointed out, all survey subjects are volunteers, and thus it’s a bit tough to distinguish internet convenience samples from some oddball scooped up by Gallup’s 9% survey response rate. Second, and less comfortingly, 10-15% of the adult population has a reading disability that makes self-administration of a survey prompt online more than a bit dicey. I say: as long as the disability isn’t biasing with respect to contract psychology or cultural cognition, let’s survey on the cheap!
Lunch next. Good note for presenters: avoid small pieces of spinach/swiss chard if you are about to present. No one will tell you that you’ve spinach on a front tooth. Not even people who are otherwise willing to inform you that your slides are too brightly colored. Speaking of which, the next panel I attended was Civil Justice I. Christy and I presented Clusters are Amazing. We tag-teamed, with me taking 9 minutes to present 5 slides and her taking 9 minutes to present the remaining 16 or so. That was just as well: no one really wanted to know how our work might apply more broadly anyway. We got through it just fine, although I still can’t figure out an intuitive way to describe spectral clustering. What about “magic black box” isn’t working for you?
November 12, 2012 at 11:33 am
Posted in: Behavioral Law and Economics, Conferences, Contract Law & Beyond, Empirical Analysis of Law
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F-Words: Fairness and Freedom in Contract Law
posted by Jake Linford
As I read “Facing Limits,” Larry’s chapter on unenforceable bargains, I had to pause and smile at the following line:
People often think that fairness is a court’s chief concern, but that is not always true in contract cases (p. 57).
I still remember the first time someone used the word “fair” in Douglas Baird’s Contracts class. “Wait, wait,” he cried, with an impish grin. “This is Contracts! We can’t use ‘the f-word’ in here!”1 Of course, Larry also correctly recognizes the flip side of the coin. If courts are not adjudicating contracts disputes based on what is “fair,” we might think that “all contracts are enforced as made,” but as Larry points out, “that is not quite right, either” (p. 57).
Pedagogically, Contracts in the Real World is effective due to its pairings of contrasting casebook classics, juxtaposed against relevant modern disputes. In nearly every instance, Larry does an excellent job of matching pairs of cases that present both sides of the argument. I don’t mean to damn with faint praise, because I love the project overall, but I feel like Larry may have missed the boat with one pairing of cases. Read the rest of this post »
October 18, 2012 at 12:45 pm
Tags: adoption, autonomy, Baby M, contract law, ContractProf Blog, Contracts in the Real World, fairness, PrawfsBlawg, surrogacy
Posted in: Book Reviews, Contract Law & Beyond, Family Law, Symposium (Contracts Real World)
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Using Contracts in the Real World in the Classroom
posted by Miriam Cherry
Aside from the deeper theoretical questions that Prof. Cunningham raises about contract theory in Contracts in the Real World, the heart of the book is in its fun, rollicking, and thoroughly modern examples.
Every contracts professor should take a look at this book to glean ideas for real-world examples and hypotheticals. Even if your textbook is stuck in the world of itinerant homesteaders, ships using astrolabes for navigation, and delayed industrial components (shout out to Kirksey, Raffles, and Hadley v. Baxendale!), your students will appreciate the use of some fun celebrity stories to liven up the classroom discussion.
The last time that I taught Contracts, for example, I did a series of hypotheticals based on Charlie Sheen’s contractual troubles. Based on Prof. Cunningham’s materials, I was able to structure some hypotheticals based on Sheen for my unit on conditions. The students seemed to appreciate it, and in fact, I have asked a student from my class last year to share her impressions with our blog readers. It appears here.
Miriam Cherry is Professor of Law at Saint Louis University School of Law. Some of her scholarship can be found at this link on SSRN.
October 18, 2012 at 7:52 am
Posted in: Contract Law & Beyond, Law School (Scholarship), Law School (Teaching), Symposium (Contracts Real World)
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Modern Technology: A Disruptive Influence on Contract Doctrine?
posted by Miriam Cherry
In my view, modern technology has exacerbated the doctrinal tensions within contract law. Currently, clickwraps and browsewraps stretch the notion of mutual assent to its extreme, perhaps warping it in the process.
The recent literature on form contracting online has been substantial. While some of this literature sees online contracting as a natural inheritance to traditional contract law doctrine, other commentators have argued that contracting online has distorted the doctrine.
In Contracts in the Real World, Prof. Cunningham attempts to reconcile two recent cases, Specht v. Netscape and Pro-CD v. Zeidenberg, as part of his treatment of the theme of contract formation and mutual assent. As much as he tries, to me the cases still seem to be in conflict.
And if that weren’t enough, two well-known additional cases that dealt with late-arriving terms inside a computer box, Hill v. Gateway and Klocek v. Gateway, blatantly contradict each other, with contrary holdings on virtually identical facts.
In my mind, these contradictions reveal a mismatch in the doctrine and the reality on the ground. If there is no way for consumers to read or understand, or perhaps even see these clickwrap agreements, it hardly seems fair to bind consumers to them. As seen above, however, this leads to contradictory rulings.
Inconsistent holdings create the appearance of an arbitrary justice system, and these disputes, which are governed by the Uniform Commercial Code, should turn out in a uniform manner. When they do not, it only intensifies the debate about how to deal with online contracting and adhesion contracts online.
As we all continue to click our way through countless EULAs and are told that we are subject to “terms and conditions” that no reasonable consumer has had the time to read, I do not believe that it is enough to hope that antiquated laws will handle new situations.
Instead, I would suggest that we need to continue to build on the wisdom of contract law. While there is much to celebrate in the received wisdom of ancient doctrines, we must also recognize that it is the common law’s dynamism and adaptability that have led to its genius.
Miriam Cherry is Professor of Law at Saint Louis University School of Law. Some of her scholarship can be found at this link on SSRN.
October 17, 2012 at 11:30 am
Posted in: Contract Law & Beyond, Law School (Scholarship), Law School (Teaching), Symposium (Contracts Real World)
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Contracts Outside the Box
posted by Erik Gerding
Let me start out with a criticism of Larry’s book: it is too much fun. I had a hard time breaking off just a chunk of Contracts in the Real World to write about and found myself spending several hours reading one interesting vignette after another on famous and infamous contracts.
The book will make a wonderful companion text to a traditional contracts casebook. Its value is not just in its engaging account of contract stories or in giving context to chestnut cases, but in providing a very intuitive framework for understanding contract law. The traditional contracts course, perhaps by virtue of having the doctrine of consideration at its heart, can be one of the most confusing in the One-L year. Students are often left to divine the inner structure (or lack thereof) of contract law on their own, likely while cramming for finals. Sometimes the epiphany comes. For many students it does not.
Larry has a real genius for laying out the doctrinal building blocks in a very thoughtful and accessible structure. He groups cases around a rough life cycle of contracts, with chapters devoted to “Getting In: Contract Formation,” to “Facing Limits: Unenforceable Bargains,” to “Paying Up: Remedies.” The layout of the book combined with its lucid writing demystifies contracts.
The layout may at first appear to make this book an ill fit as a companion text to many case books, because many of the cases appear in Contracts in the Real World under a different doctrinal heading than in a particular case book. For example, in the case book I currently use Batsakis v. Demotsis appears in the chapter on “consideration.” Larry places this classic next to cases on unconscionability. I also teach Lucy, Lady Duff Gordon in consideration, while Larry situates it in “Performing: Duties, Modification, Good Faith.”
These differences actually demonstrate a strength of the book. Some disconnect between the organization of a primary case book and a companion text forces students to move beyond a facile understanding of contract law in terms of rigid doctrines. Seeing cases in different contexts and fitting into different doctrinal boxes can help students see that lawyering involves more than memorizing black letter rules and putting issues into the right doctrinal box. Indeed, sometimes different doctrinal boxes can apply to the same problem and lead to the same result (witness rules on past consideration and duress). At other times, the choice of the doctrinal box makes a huge difference (see those same two doctrines). Accomplished students can move from memorizing blackletter law to seeing the possibility of creative lawyering. Larry’s organization – both intuitive and surprising – will help students at both stages.
One final strength of the book is Larry’s choice to include not only court cases but many contemporary contract disputes that never reached the courtroom (such as the dispute between NBC and Conan O’Brien). This brings into the classroom a wider panorama of how lawyers encounter and shape contractual problems in practice. After all, few contracts and few lawyers find their way into a courtroom. Most disputes are resolved in the shadow of law.
I also have a wish list for Larry’s next project (from personal experience, I can tell you how invigorating it is for an author who has just finished a book to be asked “what’s next?’). One of the limitations of the traditional contracts curriculum is how rarely students read and interpret – let alone negotiate or draft – actual contracts. It would be incredibly helpful as a professor to have some of the source contracts behind these stories. Although some of these contracts are already contained in a judicial opinion (Carbolic Smoke Ball) and many will not be public (Conan’s deal with NBC), others might be available with some digging. Having real and full contracts would allow professors to meet many of the items on Professor Collins’ wish list, such as transactional perspectives and drafting exercises. Although some lawyers litigate over failed contractual relationships, many more help parties plan prospectively – including by drafting and negotiating deals. For most attorneys, contracts are not an autopsy subject, to be dissected in a court opinion, but a living thing.
Professor Cunningham’s book provides a joyful reminder of the life in contracts.
October 16, 2012 at 10:06 pm
Posted in: Contract Law & Beyond, Symposium (Contracts Real World)
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Contracts in the Real World – At Last, a Book for Modern Minds
posted by Ronald K.L. Collins
In a world where contract law, as typically taught, has one foot in the quicksand of the past, Lawrence Cunningham’s Contracts in the Real World is a most welcome and liberating alternative. Just consider the domain of what is commonly offered up:
* sales of “Blackacre” circa the 18th and 19th centuries,
* sailing ships destined for Liverpool circa 1864,
* carloads of Mason green fruit jars circa 1899,
* a promise to pay ₤100 to anyone who contracted the flu after using a “Carbolic Smoke Ball,” circa late 19th century,
* a 12-word “contract of sale” penned on the back of a “counter check,” circa early 1950s,
* a material breach case about a dispute over the brand of pipe (Reading or Cohoes) to be used in the construction of a home (circa early 1920s),
* representations made in 1959 in connection with a grocery “chain” begun in 1922 (by 2010 the “chain” was down to a lone store in Green Bay, Wisc.),
* promises re an option to buy a ranch, circa 1960s, and
* a 1965 contract involving the 78 year-old actress Shirley MacLaine (co-star of the 1960 movie The Apartment).
One need not be wed to Henry Ford’s maxim that “history is bunk” to appreciate that much of what is presented in contracts casebooks is past tense, past perfect, and past its time. While such an approach to teaching contracts may be a boon to slothful professors averse to updating their class notes, it does little to prepare today’s law students for the challenges facing them in the 2012 marketplace of digital deals.
Given the yester-world of many contracts casebooks, it is refreshing to have a book that brings modernity onto the stage of legal education. While Professor Cunningham pays due deference to the canonical cases (e.g., Lawrence v. Fox, N.Y., 1859), he does so in ways that reveal their contemporary relevance (e.g., as in how that precedent applied to a 2005 Wal-Mart dispute). Moreover, what is so stimulating about his book is that Cunningham highlights the law relevant to current business dealings of everyone from Bernard Madoff and Donald Trump to Lady Gaga and Paris Hilton, and 50 Cent, too. There is even a case involving a dispute over the rights to the HBO TV series The Sopranos.
Likewise, Cunningham both identifies and understands the real-world contexts of modern contract law involving everything from electronic transactions and confidentiality of information, to agreements re season tickets subscriptions for sports events, to entertainment contracts, to Amazon’s provider contracts, to any variety of contemporary non-disclosure agreements, et cetera.
In all of these ways and many others, Contracts in the Real World stands alone as a work that ushers the law of contracts into our times.
At the risk of sounding unduly laudatory, this book was a joy to read. Both stylistically and substantively, it is a work of admirable achievement without a real rival. When one offers such acclaim, there is a corresponding obligation to justify it. Hence, permit me to explain my evaluation, at least in summary fashion. Read the rest of this post »
October 16, 2012 at 1:20 pm
Posted in: Contract Law & Beyond, Law School (Scholarship), Law School (Teaching), Symposium (Contracts Real World)
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Dichotomies in Contract Theory and Doctrine
posted by Miriam Cherry
In this blog post, I would like to examine some of the dichotomies in contract theory and doctrine that are noted in Professor Cunningham’s Contracts in the Real World. Some would claim that contract law is revolutionary; others would argue that it is reactionary. Compared to the status relationships of the Middle Ages, in which economic power was primarily determined through feudal or family relationships, contract and market relations promised a more egalitarian alternative.
In the classic text Ancient Law, Sir Henry Maine described the radical transformation from a feudal society governed by custom and hierarchy to one transformed by the industrial revolution, in which socio-economic mobility was not only possible, but which was expected. On the other hand, many today would argue that contract acts as a reactionary force, for enforcing bargains strictly as written could result in reinforcing the power imbalances that already exist in society.
Contracts in the Real World notes these dichotomies and strikes a middle ground between them. Prof. Cunningham characterizes the schism in contract law as a dispute between formalists and realists. This schism, he posits, applies even to foundational matters, such as the question of whether a contract has been formed. Prof. Cunningham notes that extreme formalists would champion a return to the days of the seal and enforce only those deals that meet the strict definitions of offer, acceptance, and consideration.
Realists, on the other hand, favor scrutinizing the context of every bargain, accepting the most informal of deals and even enforcing promises to make gifts as contracts. Thus the dichotomy between formalists and realists turns into a debate over the extent of government or court involvement in private ordering.
Throughout the book, Prof. Cunningham walks a tightrope between these positions, often making reference to contract law’s “sensible center,” and noting that with many common problems, the rules that have evolved over the years make a good deal of sense. In essence, he makes a case for the status quo, eschewing reform in either the direction of more government interference in contract, or government withdrawal from contract.
Prof. Cunningham suggests that current law strikes the proper balance between two rather extreme positions. The book extols the earthy pragmatism of old precedents and wise judges, and suggests that these doctrines will ultimately win out and reach a balance. In my next blog post, I will question whether this assertion holds true in the context of technological change.
Miriam Cherry is Professor of Law at Saint Louis University School of Law. Some of her scholarship can be found at this link on SSRN.
October 16, 2012 at 10:16 am
Posted in: Contract Law & Beyond, Law School (Scholarship), Law School (Teaching), Symposium (Contracts Real World)
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Contracts in the Real World and Contracts in Law School
posted by Tom Lin
Thank you to our hosts at Concurring Opinions for inviting me to participate in this online book symposium. It is a pleasure for me to discuss Larry Cunningham’s engaging new book on contracts.
The title of Larry’s new book is Contracts in the Real World. Intentionally or not, the title suggests that there may exist another realm for contracts other than the real world, a realm that is perhaps more theoretical and not completely real. The alternate universe that most readily comes to mind is law school. Contracts in the real world exist in partial contrast to contracts in law school.
Contracts in the real world bind parties and counterparties to one another. Contracts in law school bind students to casebooks and laptops. Contracts in the real world frequently revolve around compensation, obligations, and duties. Contracts in law school frequently revolve around precedents, arguments, and defenses. Contracts in the real world are about contracts. Contracts in law school are about cases about contracts. Needless to say more, there exists a meaningful and significant gulf between contracts in the real world and contracts in law school.
Larry’s book serves a bridge across this gulf. Through wide-ranging popular stories about the prominent and the pedestrian crafted in accessible language yet not devoid of legal doctrine, the book connects contracts in law school with contracts in the real world. Law school concepts like offer, acceptance, mitigation, and assignment are illuminated by real world stories of popular contracts involving Pepsi ads, Dateline NBC, Redskins tickets, and Haagen-Dazs ice cream.
The conceptual meditations of contract scholars like Cardozo, Corbin, and Williston are expressed and explained in contract controversies involving well-known figures such as Michael Jordan, Maya Angelou, and Lady Gaga, and through common experiences like purchasing lottery tickets, signing mobile phone agreements, and buying football tickets online. Given the accessible language and popular stories, it is easy for the reader to be lulled into forgetting that they are reading and learning about the law, much in the same way that Tom Sawyer lulled his friends into whitewashing a fence by making it seem more like a treat than a chore.
October 16, 2012 at 8:00 am
Posted in: Contract Law & Beyond, Law School (Scholarship), Law School (Teaching), Symposium (Contracts Real World)
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Prosecutors, Gambling and Dead Horses
posted by Lawrence Cunningham
Should federal prosecutors who settled a tax fraud case with the New York Racing Association back in 2003 (amended in 2005) be kicking themselves? Besides commitments typical of criminal settlement agreements (called deferred prosecution agreements), to improve internal control and governance, this one required the NYRA to continue its best efforts to install gambling machines at the track. It finally did so last year and the results have included the deaths of 21 horses during the winter meet.
Gambling is a controversial topic and New York State politicians had in 2003 just begun a push to expand the kinds of gambling that are legal in the state, starting with video gaming machines at horse racetracks. Why federal prosecutors settling a criminal tax suit should have anything to say about the NYRA’s role in advancing this agenda is not clear. Prosecutors did not explain their reasoning when signing the DPA.
In any event, the NYRA worked earnestly to move its gambling program along amid growing political and legal controversy in the state over gambling. It finally prevailed, opening a gambling emporium at the Aqueduct track in Queens in October 2011. In the ensuing season, an astonishingly high number of horses — 21 — died while racing.
In March, Governor Andrew Cuomo formed a task force to investigate and in May took state control over the track from the NYRA. The task force released its report last week identifying numerous causes for the deaths and prescribing extensive reforms of the NYRA and Aqueduct operations. Among the culprits: casino funding was allocated to massively increase awards to owners of winning horses in lower-level claiming races. Read the rest of this post »
October 2, 2012 at 6:09 am
Posted in: Contract Law & Beyond, Corruption, Criminal Law, Criminal Procedure, Culture, Current Events
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Lochner Boo Boo: Free Self-Exploitation?
posted by Frank Pasquale
American legal history has featured many battles over “freedom of contract,” often interpreted as the “right” of workers to sell their labor at any price, under any terms. Given the recent resurgence of extreme freedom of contract views, I thought this reflection on the reality TV show “Here Comes Honey Boo Boo” might interest readers:
Americans, it turns out, can’t get enough of Honey Boo Boo, mom June, and the rest of the clan . . . some of whom come with nicknames that seem straight out of a quaint novel about those colorful southerners, like Sugar Bear. That Here Comes Honey Boo Boo trafficked in and showcased the grossest of gross stereotypes about lower middle class southern white folk was deemed inconsequential. The family, led by matriarch June, was in on the joke. How could the family be exploited if they actively wanted to be exploited?
September 27, 2012 at 11:03 am
Posted in: Constitutional Law, Consumer Protection Law, Contract Law & Beyond
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The Unenforceability of Contracts to Abort
posted by Dave Hoffman
TMZ has a scoop. (Yes, I read TMZ. Every day.) Tagg Romney (son of Mitt) and his wife Jen entered into a surrogacy contract which contained a clause purporting to require the surrogate to abort on demand given a particular set of contingencies:
We’ve learned Tagg and his wife Jen, along with the surrogate and her husband, signed a Gestational Carrier Agreement dated July 28, 2011. Paragraph 13 of the agreement reads as follows:
“If in the opinion of the treating physician or her independent obstetrician there is potential physical harm to the surrogate, the decision to abort or not abort is to be made by the surrogate . . . In the event the child is determined to be physiologically, genetically or chromosomally abnormal, the decision to abort or not to abort is to be made by the intended parents. In such a case the surrogate agrees to abort, or not to abort, in accordance with the intended parents’ decision . . . Any decision to abort because of potential harm to the child, or to reduce the number of fetuses, is to be made by the intended parents.”
It is a common error to think that contract terms are specifically enforceable as written. I believe that there is literally not one judge in the country who would require a surrogate to abort on demand against her wishes notwithstanding this clause. In part, this results from the law’s traditional reluctance to enforce specific performance of personal services contracts. Here, that’s coupled with the constitutional interests in bodily integrity that the Baby M court discussed. Thus, while TMZ translates the agreement as “Tagg and his wife, Jen, had the right to abort the fetuses if they felt they would not be healthy,” the better line would be “Tagg and his wife, Jen, have an exit right which they can exercise if the surrogate fails to abort.”
That is, failure to abort on demand would be a material breach by the surrogate, relieving the Romneys from their duty to pay. Whether it would additionally then lead the Romneys to be able to sue – for costs incurred, probably – is unclear to me, as I think some judges would find an abort-on-demand clause against public policy.
September 21, 2012 at 7:50 am
Posted in: Contract Law & Beyond
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Welcome Contracts Students!
posted by Lawrence Cunningham
As new 1Ls begin to immerse themselves in the wonderful world of law, we welcomed them here on this blog recently with an overview of the first-year curriculum that has been in place for ages. It concluded with a particular reference to the course on Contracts, about which I’ve recently published a new book connecting its classic cases and doctrines to contemporary contract disputes in popular culture and covered in the media.
From that book, Contracts in the Real World: Stories of Popular Contracts and Why They Matter, the following continues to provide a gateway into that field by introducing two legends whose venerable work on the subject continues to define the boundaries of recognized debate on most of the issues. The legends are Samuel Williston and Arthur Corbin.
In 1920, Williston, a Harvard professor, published a monumental treatise on the entire law of contracts, and updated it until his death in 1963. In 1950, Arthur Corbin, a professor at Yale, promulgated an equally magisterial and comprehensive treatise, based on earlier writings throughout his career.
These works—still kept up-to-date by successor editors—influenced generations of lawyers and judges addressing contract disputes. Williston’s philosophy dovetailed with that of the eminent jurist, Oliver Wendell Holmes, Jr., and Corbin’s resonated with that of the esteemed judge, Benjamin N. Cardozo.
Williston epitomized a formalist approach to law and reflected what some call the “classical” school of contract. It looks to whether parties in a transaction were giving and getting something, emphasizing a concept called “consideration” as the signal of an enforceable contract. This school of thought held unenforceable not only promises to make gifts or attend dinner but promises merely inducing another party to take some action.
In this view, the remedy for breach of a bargain is to pay the injured party money to put them in the same economic position they would have enjoyed had the other performed. This classical conception of contract law dominated well into the twentieth century, and remains a force today.
Corbin took a realist approach to law and offered a more pragmatic conception of contract. Though agreeing with Williston on many points, Corbin recognized, as courts increasingly did in the twentieth century, a wider range of circumstances that create contractual obligations. Williston’s bargain model of consideration remained, but loosened so that even some promises to make gifts could be enforced, so long as there was an identifiable return, like naming a college endowment. It recognized reliance on a promise as a basis of contractual liability, in a novel doctrine commonly called “promissory estoppel.”
Compensation for disappointed expectations remains the primary measure of remedy. But recognizing promissory estoppel gave equal dignity to measuring remedies by out-of-pocket costs incurred relying on a promise.
These twentieth century developments that Corbin captured, and helped to shape, reflected broader social developments as well, moving law’s orientation from a formalist to a realist conception. For example, classical contract’s relative strictness, limiting the scope of contractual obligation, was accompanied by an equivalent strictness of enforcement: if a contract was hard to get into, it was also hard to get out of. People could be bound to contracts that were made based on mutually mistaken assumptions or even where performance became impossible.
But as the ambit of contractual obligation expanded, so did grounds for excusing it, like mutual mistake about the terms of a trade, or impossibility of performance, such as a power outage in a rented banquet hall. Similarly, classical contract law venerated written records, limiting the scope of obligation to what was plainly meant within a document’s four corners. Corbin and his realist descendants were more willing to consider evidence supplementing these written expressions. Read the rest of this post »
August 24, 2012 at 10:29 am
Posted in: Contract Law & Beyond, Law School, Teaching
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Crowdsourcing the Interpretation of Terms of Service Agreements
posted by Frank Pasquale
This is an interesting project:
“I have read and agree to the Terms” is the biggest lie on the web. We aim to fix that. We are a user rights initiative to rate and label website terms & privacy policies, from very good Class A to very bad Class E.
ToS;DR is a young project started in June 2012. The data is subject to important changes. This is your opportunity to help us fix the “biggest lie on the web”: join us if you have information to contribute related to specific terms or if you have a comment!
ToS;DR aims at creating a transparent and peer-reviewed process to rate and analyse Terms of Service and Privacy Policies in order to create a rating from Class A to Class E. We need more legal expertise, please also join the working-group. We also need people to contribute source code. Everything is JavaScript and JSON. The data is freely available (CC-BY-SA) and ready to be used for other tools, like browser extensions.
I think aspects of this could succeed, and others will not. I will be following it closely. Hey, if Intex can work, why not this? [Via Jane Hu]
August 19, 2012 at 3:39 pm
Posted in: Contract Law & Beyond, Technology
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Welcoming All 1Ls Across America!
posted by Lawrence Cunningham
Welcome all first-year law students to the wonderful world of law! I teach Contracts at George Washington University (though I’m visiting at Fordham University this fall). My students find it useful to begin our journey into that subject–which many find can be difficult–with a step back to look at the shape of the first-year law school curriculum.
It has not changed much in a century and does not vary widely among law schools today, from Cooley to Columbia. I also try to be sure to connect the topics and examples appearing in today’s casesbooks (which have also not changed much over time and do not vary from school to school) to current topics in the news. Students at other schools can share in these stories by obtaining a copy of my book, a fun supplement to the Contracts course, Contracts in the Real World: Stories of Popular Contracts and Why They Matter.
Some thoughts about the shape of today’s 1L curriculum appear in the beginning of the book, including the following excerpt. I summarize this for my students on our first day of class to give a sense of why today’s curriculum looks as it does and where contract law fits within it.
The curriculum dates to a legendary figure of nearly a century and a half ago. In the 1870s, C. C. Langdell, as Dean of Harvard Law School, designed a simple way to organize the vast field of law still used to this day. He thought that underlying law’s complexity were a handful of basic ideas. Examining leading cases organized around these ideas would reveal law’s elements and rhythms.
Common law actions, meaning those courts resolve one by one, were of greatest interest to Langdell and dominate many 1L courses, including Contracts. In the United States, following English traditions, common law is developed by state courts as disputes arise. Originally referring to law “common” to all citizens, today this system yields some variation among states, but general principles tend to prevail. Though the common law evolves as society and the economy change, judges draw on precedents when evaluating new cases—under the principle of stare decisis.
Langdell organized the welter of cases on numerous topics according to basic questions: how, what, and why. The question of how isolates the procedures private parties follow when resolving disputes using civil litigation. This is the practice of the lawsuit, arranged into the sub-field of study called civil procedure. Read the rest of this post »
August 19, 2012 at 4:51 am
Posted in: Contract Law & Beyond, Law School, Law School (Teaching), Law Student Discussions, Teaching
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