Category: Contract Law & Beyond

1

The Contractual Freedom to Prohibit Football

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This buzzworthy newstory about celebrity pre-nups has a few examples of bizarre clauses that couples have agreed to before marriage:

• “Limiting the wife’s weight to 120 pounds or she must relinquish $100,000 of her separate property.”

• “Requiring a husband to pay $10,000 each time he is rude to his wife’s parents.”

• “Mandatory sexual positions”, “No mother-in-law sleepovers.” “Only one football game per Sunday.”

Attorneys quoted in the article suggest that all such provision are

“legal unless you’re dealing with custody of children or child support.” This might be right, but since these agreements are almost never evaluated in written opinions (the parties usually hired retired judges to ensure privacy) I’m not sure whether I’d be so definite. Of course it isn’t my area of law, but I usually teach my contract class that there are limits – public policy and otherwise – to what you can contract to, even in the pre-nup context. The one that really gets me here, of course, is “one football game per Sunday.” What kind of judge would enforce that kind of tyranny?

(Hat Tip: Huffington).

15

The Power of Shopping

shopping.jpgWith the holidays upon us, I figured that now would be a good time to do a post on shopping and its importance for contract theory. As everyone who survived a first year contracts course can tell you, one of the central problems for contract law is what has been variously labeled as boilerplate, contracts of adhesion, and fine print. What we are talking about here are all of those contracts that one is offered on a take-it or leave-it basis that no one ever reads. In true late-New-Deal-lets-find-a- new-frontier-for-saying-o h-my-heck- the-corporations- are- taking-over-the-world-FDR-come-and- save-us fashion Friedrich Kessler wrote an influential article (“Contracts of Adhesion — Some Thoughts About Freedom of Contract,” 43 Colum. L. Rev. 629 (1942)) arguing that boiler plate represented a form of private law making that corporations imposed on helpless consumers. Such private law making, he argued, was illegitimate in a democratic society, where law making ought to be democratically accountable (or at the very least accountable to the FTC). Shopping, however, leaves me somewhat doubtful about Kessler’s claim.

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2

Senator Specter on Terrell Owens

My state’s senior senator, Arlen Specter, who has lots on his plate, held a news conference this morning:

[He said that] it was “vindictive and inappropriate” for the league and the Eagles to forbid [their] all-pro wide receiver [Terrell Owens] from playing and prevent other teams from talking to him.

“It’s a restraint of trade for them to do that, and the thought crosses my mind, it might be a violation of antitrust laws,” Specter said, though some other legal experts disagreed.

“I am madder than hell at what he has done in ruining the Eagles’ season,” the Pennsylvania Republican said. “I think he’s in flagrant breach of his contract and I believe the Eagles would be within their rights in not paying him another dime or perhaps even suing him for damages.”

But Specter said, “I do not believe, personally, that it is appropriate to punish him (by forcing him to sit out the rest of the season). He’s not committed a crime, he’s committed a breach of contract. And what they’re doing against him is vindictive.”

There are several statements here that are interestingly wrong. One worth thinking about is the idea that the Eagles are punishing Owens by enforcing the contract’s “conduct detrimental” clause. On one level this can’t be right – the Eagles are paying their employee for not working, hardly an onerous result. But theory notwithstanding, reading the arbitrator’s decision, it sort of feels like punishment. Doesn’t it?

1

If only France could file for Chapter 11

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The Economist has a nice article on the Delphi bankruptcy. For those who don’t follow such things, Delphi is the largest car parts manufacturer in the country and it has just gone into Chapter 11. In doing so, it has availed itself of a process that would do much to help France out of its current economic malaise. Delphi in up against pension obligations entered into with union negotiators long ago. It thus has essentially the same problem as France — back in the day it promised more than it could realistically deliver. The difference is that ultimately Chapter 11 gives Delphi a way of rewriting its contracts in an orderly fashion. France has no such luxury.

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