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Category: Symposium (Contracts Real World)

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What’s Next for Contracts in the Real World?

Thanks to all participants for their wonderful contributions to the on-line symposium about Contracts in the Real World: Stories of Popular Contracts and Why They Matter.   (To see all posts together, click the subject matter link below this or other posts for Symposium (Contracts Real World) or select that topic from the Categories menu on the sidebar at left.)

As the reviews suggest about readers finding the stories fun and the lessons enjoyable, you may be able to guess that I found researching and writing them fun and enjoyable too.  Many of the stories were originally written, in a slightly different form, for this blog. Many of those stories generated productive comments.

I therefore must thank not only my fellow perma-bloggers here at Concurring Opinions for the opportunity to develop these ideas on this site, but also to many readers of the site for their thoughtful contributions. Double that gratitude for having allowed so much space to be devoted to the book these past several days.

Beyond contracts, several publishers and I believe that there is a series in this approach to the content and presentation of many law school subjects. That would certainly seem apt for other traditional 1L courses such as Torts, Property, Criminal Law and Civil Procedure.   Read More

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Method for Contracts in the Real World

Before wrapping up the symposium about Contracts in the Real World, this is the second of two posts on main themes drawn by the wonderful contributions.  This one concerns methodology, the book’s approach, content and organization—and what more might be done in pursuit of such a new model of pedagogy.

The approach of using contemporary examples to illuminate venerable principles and classic cases seems warmly received, for many different reasons, elaborated in many different ways by all the contributors, including two students.  It is nice to know the many different ways in which the book has spoken to readers. The value of that reach was summed up best, perhaps, by Nancy, when she stressed that retaining student attention is at least half the battle in law teaching.

I appreciated Tom’s point that reading this book does not feel like work in the way that reading many teaching books can. As Nancy, Don and Ron stated explicitly and others noted implicitly, the current teaching environment imposes new demands on teachers of contracts (really profs throughout the law school and much of the university). Finding ways to draw students in is vital. Read More

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Politics in Contracts

Before wrapping up the symposium about Contracts in the Real World, I wanted to offer two posts on main themes of the contributions–which were wonderful.

The first concerns the role of politics in contract law adjudication. It emerged as a theme from several posts, explicitly by Dave and Miriam, implicitly by Jake’s discussion of Baby M and by Nancy’s of ProCD, and more obliquely in Tom’s (and Miriam’s) reference to my notion of the “sensible center” in contract law.

Perhaps the safer way to put the point would be to say that the common law of contracts is among the least political of subjects in law. The book does recognize the potential for political factors, of course, including variation among states. And while it celebrates the impressive power of the common law of contracts to deal neutrally with change, it also notes limits.

This is most explicit in the case of Baby M and its contrast with California’s Baby Calvert. I agree with Jake, and his agreement with Dave, that these two cases illustrate the driving role that judicial worldviews, and perhaps local state outlooks, can play in the approach to a case and the outcome. Read More

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A Law Student’s Viewpoint on Contracts in the Real World

As promised, the following is contributed by my student, Umo O. Ironbar:

As a 1L student at Saint Louis University, reading the conditions materials in Professor Lawrence Cunningham’s Contracts in the Real World Stories of Popular Contracts was refreshing.

We looked at a deal that Kevin Costner went into for the creation of massive bronze bison sculptures which would be put in place in his luxury resort in South Dakota named The Dunbar (a tribute to his successful production of his 1990 movie “Dancing With Wolves). Another case we looked at was Charlie Sheen’s “play-or-pay” contract with Warner Brothers.

These cases are still so vivid in my mind because I actually knew who the parties were. Unlike other cases that could have been found in my regular contracts textbook, I did not have to wait until the notes and questions sections after the cases to know why these cases were so important or infamous, or why they made the selection into the textbook out of the hundreds of thousands of cases that have been tried. Read More

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“Unpopular” Contracts and Why They Matter

Professor Lawrence Cunningham knows the law and his audience. With Contracts in the Real World: Stories of Popular Contracts and Why They Matter, he brings contract doctrine to life.  Cunningham concisely, yet colorfully, covers how courts resolve a variety of deals gone wrong. This book is ideal to help students develop an understanding of how the law is used to sort between those bargains that will be enforced and those that will not, as well as what remedies are available when things do not go as the parties to the agreement initially planned.

Contracts in the Real World has considerable range. It starts with a wrecked wedding party, an event few experience though many may fear.  A dispute between a couple and a banquet hall venue results from a regional power outage during the reception. This fact pattern echoes the type of phone call a recent law graduate might receive from an exasperated family member punctuated with the dreaded question —  you’re a lawyer, can we get our money back?  The book provides a sensible explanation of how the wedding dilemma would resolve, and weaves together this type of personal situation with more public, celebrities’ disputes and classic contract decisions. These classic decisions are better appreciated in this fashion, when they are used to explain the outcomes of more modern disputes. For example, Sherwood v. Walker (the fertile cow – mutual mistake case) dating back to 1887 resonates when it is used to analyze a divorce settlement dispute concerning millions of dollars invested with Bernard Madoff’s Ponzi scheme.

What makes the book particularly compelling, is that mixed in with relatable fact patterns and entertaining battles are significant matters of policy. Contracts in the Real World  accomplishes this, for example, when it covers some very unpopular contracts. These include the infamous agreements under which American International Group (AIG) paid out $165 million in cash bonuses to roughly 400 employees. According to the New York Times, among those who received more than $1 million a piece were 73 employees of the AIGFP business unit. This was the same business unit that helped enable the housing bubble and related Financial Crisis of 2008 by providing credit protection (selling credit default swaps) on high-risk mortgage-linked securities. The AIG bonuses were announced in 2009, just months after the US government paid $85 billion for a nearly 80% ownership stake in AIG. This was a part of the $182 billion government commitment to rescue the giant insurance firm when it approached insolvency due, in large part, to its inability to make payments to counterparties on its credit default swaps. Read More

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F-Words: Fairness and Freedom in Contract Law

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!”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 More

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Is Contract Law Really Pragmatic?

I’ll begin by joining the others who’ve written in already to praise Larry’s excellent Contracts in the Real World.  It is highly accessible, entertaining, and offers a ream of examples to make concrete some abstract and hard doctrinal problems. Larry has the gift of making complex problems seem simple – much more valuable and rare than the common academic approach of transforming hard questions into other hard questions! This would be an ideal present to a pre-law student, or even to an anxious 1L who wants a book that will connect the cases they are reading, like Lucy, Baby M, or Peevyhouse, to problems that their peers are chatting about on Facebook.

Larry’s typical approach is to introduce a salient modern contract dispute, and then show how the problem it raises was anticipated or resolved in a famous contract case or cases.  Larry often states that contract “law” steers a path between extremes, finding a pragmatic solution. This approach has the virtue of illustrating the immediate utility of precedent for guiding the resolution of current disputes, and comforts those who might believe that courts are always political actors in (caricatured) Bush v. Gore or Roberts/Health Care Cases sense. It has the vice of de-emphasizing state-by-state differences in how contract law works, as well as the dynamic effects of judicial decisions on future contracts. But I think that for its intended audience, these vices can be easily swallowed.

I wanted to offer one question to provoke discussion: is it actually true that politics is as removed from contract law as Larry’s narrative appears to suggest, and how would we know?  The contracts law professor listserve is full of laments about judges turn away from Traynor & his perceived progressive contract doctrines – and I certainly know of colleagues who teach that there are “liberal” and “conservative” versions of the parol evidence rule, for instance. But what does this actually mean, and how does it connect with the scholarship on judicial politics generally?  As it turns out, this question has been understudied, probably because political scientists have yet to find a way carefully operationalize what a “liberal” or a “conservative” outcome in a contracts case would be, and thus to usefully regress case outcomes against a judge’s political priors.  Many authors (Sunstein et al. 2004; Christy Boyd and I, 2010) have found ideological effects outside of the typical con law regime (particularly in “business law” areas).  But I’m  aware of a few empirical papers analyzing the political valence of how contract doctrine comes to be. (Snyder et al. n.d.)  Some have suggested that contract law is a particularly hard area to study because selection effects loom so large. I would also note that most contract law “work” occurs at the state court level, where ideological measures are either explicit or very obscure.

If we found good measures, my own hypothesis would be that a particular judge’s worldview matters a great deal to how he or she resolves contract disputes – with priors about how much a person should be responsible for their own choices, and their perspective on market discipline, shaping how they understand the facts and thus apply the law.   Contract cases are powerfully controlled by judges – probably more so than in other areas of private law. Contract doctrine would reflect these individual choices, and we’d thus be left not withone  “pragmatic” contract law, but rather many competing strands. I’d thus close by urging readers of Larry’s book to think a bit about the cases not picked out and illuminated in the narrative – where the judges are less wise and more human.

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Using Contracts in the Real World in the Classroom

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.

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Contracts and “Contracting”

Like all the reviewers so far, I am a big fan of Larry’s book.  My interest in his approach comes partly from his way of bringing the subject alive, but more (and the book varies in the extent to which it does this deliberately) because it moves readers toward situating themselves in the time and place at which the bargain was struck and events play themselves out.  Erik Gerding makes this point, too, and I want to elaborate on it.  A case like Wood v. Lucy Lady Duff Gordon asks why the deal was expressed as it was, and thus what was the deal, really?  There is a good bit of writing in law and economics that tries to theorize about deal-making, and Victor Goldberg, among others, have done some very rich work on Lucy, among other cases.  I desperately want to engage my contracts students with these ideas, but find it hard to do without devoting more time than my 4 credits in a semster allows.  “Contracts in the Real World” gives the students a base for many of these intuitions (especially the chapter on interpretation and parol evidence), and I hope that it will at least stimulate their interest in thinking more about contract doctine in this way.  What I hope for most is that Larry or some reader will follow up on this volume with another dealing more explicitly with the “what were they trying to do?” and “was this a good way to do it?” questions.  I’m familiar with a couple of efforts in this direction, but so far they don’t work for me.  The person who pulls off that book in a rich, sophisticated but engaging way will earn my undying gratitude.  For now, however, I’m happy enough that Larry has given contracts students and teachers not only a great introduction to the human workings of contract law, but also some valuable impressions of the work-a-day world out of which some very interesting deals were conceived.

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Modern Technology: A Disruptive Influence on Contract Doctrine?

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.