contracts archive spring 2011
Exam overlap instructions:
The front page of the exam will include the following instruction which did not appear on the sample exam:
Note that there is some potential for overlap in answers to these questions. Avoid substantial overlap in your answers, because, as a general rule, you will only get credit once for each piece of information you give me. If you incorporate information in one answer into the other answer, for example by writing “see above”, or “see answer to Question x” in your second answer, your grade for the second answer may suffer.
Here is the Sample Exam.
Statutes and restatement provisions for your review. Here is the list. This is intended as a guide for your review. You are not expected to memorize any of these provisions. We spent much more time on some of these provisions than on others, and it would make sense to focus more attention on the provisions we emphasized during the semester.
2-201, 2-204, 2-206
2-313, 2-314, 2-315, 2-316, 2-503, 2-508, 2-601, 2-602, 2-605, 2-606, 2-608, 2-703,2-704, 2-706, 2-708, 2-709, 2-710, 2-711, 2-712, 2-713, 2-714, 2-715, 2-716, 2-718, 2-719 ,
22, 45, 71, 72, , 77, 81, , 90, 344, 346, 347, 348, 349, 350, 351, 352, 370, 371.
week 14: Apr. 18-22 We will begin on Monday with tidying up after the Arthur Murray case. For this week we will cover to page 616, then pages 629-659 and 691-718.
The class session on Monday 25 April will be a review session. We can discuss the Sample Exam and any questions you have. I am also happy to answer questions in person or by email. I will be available in my office on the 25th from 10.30-12.30 and on the 26th-28th between 9.00 and 3.30 pm (with a gap for lunch) and have sign-up sheets (like this) so you can book appointments (you may contact Sandra Hernandez, my assistant, in person or by email (email@example.com) to sign up). I’m happy to see people in groups (my office is very messy and I could only fit about 3 people in at a time) if that suits you.
It may be that a number of people have the same or similar questions and that it would make sense to address these at the review session. If you think you may have a question like this it makes sense to tell me before the 25th so I can cover the question that morning.
April 18: Here is an example of limited warranties from HP.
WEEK 13: Apr. 11-15: I am sorry this is going up so late but I had no internet access today. But you have already read to page 574 so you have plenty of reading in the bank. On Monday I would like to quickly note the issues with respect to lack of capacity and then move on to the two duress cases.Then on Tuesday I would aim to get to page 574. Then for Thursday please read up to and including the top half of page 583 then OMITTING PAGES 584-598 please read to page 616 (ignoring the questions which require comparisons with the omitted material).
For next week I’d like you to read pages 629-659 and 691-718.
April 11: You are not required to know the material on minors for the exam. However, if you are interested in this issue, here is a note on some of the relevant Florida law on this topic (note that child labor is regulated under the Fair Labor Standards Act and state statutes (see, e.g., the Department of Labor’s page on Youth in the Workplace) such as Florida Statutes Ch. 450, Part 1).
Florida Statutes Chapter 743 contains a number of provisions which remove the disability of minors with respect to contracts. For example, minors over 16 are allowed to borrow money for educational purposes:
Fla. Stat. ch. 743.05 Removal of disabilities of minors; borrowing money for educational purposes.-For the purpose of borrowing money for their own higher educational expenses, the disability of nonage of minors is removed for all persons who have reached 16 years of age. Such minors are authorized to make and execute promissory notes, contracts, or other instruments necessary for the borrowing of money for this purpose. The promissory notes, contracts, or other instruments so made shall have the same effect as though they were the obligations of persons who were not minors. No such obligation shall be valid if the interest rate on it exceeds the prevailing interest rate for the federal Guaranteed Student Loan Program.
Fla. Stat. ch. 743.08 : The Child Performer and Athlete Protection Act provides for court approval of contracts relating to professional artistic and sports activities of minors. Under common law parents were able to enter such contracts on behalf of their children and were allowed to treat the child’s earnings as their own. But parents do not always act in their children’s best interests. The statute allows for court approval of such contracts, if the contract is in the best interests of the minor. A minor’s earnings under an approved contract belong to the minor, and the contract once approved by the court is binding on the minor. However, the statute is permissive and does not require parties to contracts for the services of child performers and athletes to obtain court approval.
In Wilson v. Griffiths, 811 So. 2d 709 (Fla. 5th DCA 2002) the court said:
The inherent power that Florida courts have to protect minor children and their property extends to contracts with minors or their guardians for legal services… In order to determine whether a contract for legal services will be binding on the minor, the court must determine that 1) it was reasonably necessary to employ an attorney on behalf of the minor; 2) the contract was fair and reasonable at the time it was entered into; and 3) the contract is fair in relation to the legal services actually rendered on behalf of the minor.
Apr. 11: Here is a Florida Real Property Disclosure Statement. In Johnson v. Davis, 480 So. 2d 625, 628 (Fla. 1985) the Supreme Court of Florida stated:
..we hold that where the seller of a home knows of facts materially affecting the value of the property which are not readily observable and are not known to the buyer, the seller is under a duty to disclose them to the buyer. This duty is equally applicable to all forms of real property, new and used.
WEEK 12: Apr. 4-8 On Monday I expect Dennis Lynch will be able to join us at 10 am to talk about labor arbitration. Before he does so we’ll be discussing illegal contracts. I would also like to discuss the Fullerton Lumber case on pages 511-521. For Tuesday please read to page 553 (do not spend time on the details of pages 530-531) and for Thursday to page 574.
April 6: Here is the General Bronze covenant language:
The stockholders agree that they will not at any time within fifteen years from date of transfer to General Bronze of said business… directly or indirectly engage in the manufacture or sale of architectural and ornamental bronze and/or iron work . . . within any of the several states of the United States of America, or in the territories thereof, or within the District of Columbia, except and reserving, however, the right to manufacture and sell bronze and/or iron work in the state of Nevada), nor within the Dominion of Canada or the Republic of Mexico
Apr. 4: The Grade A and B milk distinction is a distinction based on quality, as Grade B milk can only be used in manufactured dairy products. However, the higher prices for Grade A milk encouraged excess production of Grade A milk so much of the supply ended up being used in manufactured dairy products. Karpinski’s milk was seemingly eligible for Grade A treatment, but the over supply of Grade A milk meant he might not get the higher prices:
Grade A milk exceeds manufacturing grade standards. In this sense, Grade A milk used to make manufactured dairy products is of excess quality, which comes at the cost, borne by producers, of meeting the stricter standards for Grade A milk (Balagtas, Smith & Sumner
Apr 5: India’s chief economic adviser Kaushik Basu has argued paying “harassment bribes” (bribes to ensure you get something you are legally entitled to) should not be made illegal, just the receipt of bribes (the paper suggests one consequence would be that the payer would be able to recover the amount of the bribe from the payee). This would give those who pay bribes an incentive to be whistleblowers, and would thus deter the taking of bribes:
Suppose an income tax refund is held back from a taxpayer till he pays some cash to the officer. Suppose government allots subsidized land to a person but when the person goes to get her paperwork done and receive documents for this land, she is asked to pay a hefty bribe. These are all illustrations of harassment bribes. Harassment bribery is widespread in India and it plays a large role in breeding inefficiency and has a corrosive effect on civil society. The central message of this paper is that we should declare the act of giving a bribe in all such cases as legitimate activity. In other words the giver of a harassment bribe should have full immunity from any punitive action by the state.
There is a story in today’s New York Times about illegal house rentals on Miami Beach. The article states that a Judge permitted a party to go ahead at a house rented for the purpose despite a:
Miami Beach ordinance that bans using a single-family home for commercial purposes, namely holding parties where money changes hands between the homeowner and the party host. The city passed the ordinance in 2008 after too many mansions were being used as ballrooms-for-hire, jammed with indiscreet partygoers who turned up the music, parked willy-nilly and raised the hackles of the Beach’s well-to-do residents.
The article suggests that people ignore the ordinance and that it is not being enforced.
Mar 30: Contracts Prof Blog today notes a complicated employment case. The plaintiff, Abdulwahab Nattah, was offered employment as an interpreter in Kuwait by a private corporation and ended up working in Iraq for the US army. He claimed that there was a breach of:
an oral agreement with agents of L-3 Services in which he would work only in Kuwait, receive three meals a day, be given an air-conditioned apartment to live in, be kept out of war zones, and could only be fired for misconduct or a lack of work resulting from L-3 Services’ potential inability to operate as a contractor on behalf of the United States in the region
The District Court in DC applied Virginia law with respect to the contract claim:
Here, plaintiff alleges the existence of an oral agreement between the parties in which defendant L-3 Services’ agents described several terms of an agreement to which plaintiff later assented… Though the period of employment remains undefined .. the alleged for-cause nature of the relationship renders the period potentially indefinite… Nor does “the possibility of a termination of such a contract for cause within its first year of performance . . . remove it from the requirements of the statute of frauds.” .. Thus, because the agreement was not in writing and set forth an employment relationship existing in perpetuity and terminable only for cause, the contract is in violation of the Virginia statute of frauds and cannot be enforced…The alleged partial performance of the oral employment contract does not alter this conclusion. In Virginia, courts have articulated a limited partial performance exception to the statute of frauds that lies in equity rather than in law.. and occasionally apply that exception to suits seeking equitable relief.. By contrast, “[t]he doctrine of part performance is not available in Virginia in . . . actions at law for damages for breach of contract to take an oral agreement out of the statute of frauds.”.. Here, plaintiff’s remedy for the alleged breach of contract is to request compensatory damages at law, and thus the statute of frauds bars his claim.
Although not an employment case, City of Orlando v West Orange Country Club (Fl. 5th DCA 2009) illustrates a similar approach to the Statute of Frauds issue, thus, like the Nattah case, contrasting with McIntosh v Murphy. The West Orange Country Club tried to enforce rights to receive reclaimed water for no charge for 20 years. No contract was signed by the City:
Here, it is undisputed that Plaintiff seeks to enforce a contract that called for performance for more than a year, and which was not signed by or on behalf of either party which Plaintiff seeks to hold liable for performance. Therefore, the statute of frauds plainly bars enforcement of the contract. Id. With respect to the trial court’s determination that the Defendants can be held liable for performance of the contract under an estoppel theory, the law is well-settled that “[t]he doctrine of promissory estoppel cannot be used to circumvent the statute of frauds.”
After discussing whether partial performance could help the Court said:
As explained in Collier, “If Florida is to move toward enforcing oral promises intended to be performed beyond one year, or towards compensating those who enter into such agreements, it is the proper function of the Florida Legislature to announce that public policy change, not the function of a district court of appeal.”
WEEK 11: Mar. 28-Apr. 1: We will begin the week with the material we did not get to this week, starting with the TWA arbitration decision. In considering the material in pages 419-490 on Monday I would like to focus on the following:
1. The casebook raises the issue of whether it is a good idea for disputes about employment to be resolved through arbitration rather than through litigation in court. Think about what the differences are between the two contexts. Compare labor issues to the domestic situations we thought about before. What are the similarities and differences. (This is the sort of thematic question that might turn up in some version on an exam; thinking about the question involves thinking about material we already studied and some of the material which appears throughout the pages identified above).
2. Employment at will: for class please be prepared to focus on Mcintosh and Wagenseller, the issues raised by the references to Lauren Edelman’s caution noted at the foot of page 461 (important for us partly because Florida does recognise terms implied from employee manuals) and the hypothetical at pages 472-4.
Please then read to page 541 for the rest of the week (as a guide I would read to page 510 for Tuesday).
WEEK 10: Mar. 21-25: On Monday we will have a guest speaker, Adrienne Radakovic, who works for Morgan Stanley Smith Barney, LLC. Please read pages 376-426 for Tuesday and 426-490 for Thursday.
Mar 22: In Cosgrove v Bartolotta (7th Cir. 1998) Judge Posner wrote:
If there is a promise of a kind likely to induce a costly change in position by the promisee in reliance on the promise being carried out, and it does induce such a change, he can enforce the promise even though there was no contract. … Buried in our capsule summary of the law of promissory estoppel is an important qualification: the reliance that makes the promise legally enforceable must be induced by a reasonable expectation that the promise will be carried out. A promise that is vague and hedged about with conditions may nevertheless have a sufficient expected value to induce a reasonable person to invest time and effort in trying to maximize the likelihood that the promise will be carried out. But if he does so knowing that he is investing for a chance, rather than relying on a firm promise that a reasonable person would expect to be carried out, he cannot plead promissory estoppel.
And, with respect to the issue of a cost to the promisee:
Cosgrove was a professional rendering professional services. And, if nothing else, the pledge put Cosgrove at risk, since he would have been bound-by the very doctrine of promissory estoppel that he invokes-had Bartolotta relied, and since, as the subsequent course of events proved, Bartolotta was likely to enforce the pledge only if he couldn’t get better terms elsewhere, which would be a sign that the venture might be riskier than it had appeared to be originally.
In Gordian Ndubizu v Drexel University et al (E.D. Penn. 2011) the court faced a claim by an accounting professor that he had been promised he would be appointed to an endowed chair, and that he suffered detrimental reliance on the promise. The court found that rejecting other opportunities of employment that would be available to the promisee could constitute detrimental reliance, but that working harder could not:
any action taken in reliance on a promise must be detrimental before a plaintiff can prevail on a promissory estoppel claim. Under the facts at hand, any increase in work was not to Plaintiff’s detriment. Plaintiff has stated that he published articles and engaged in scholarly activities at a voracious pace,.. increased his production, writing a steady stream of top-flight articles .. intensified, concentrated his entire life on generating high-powered research in top-tier journals .. did extraordinarily more work than he had ever done or will ever do .. and worked extraordinary long overtime with no immediate remuneration .. However, any detriment caused by these actions is not apparent. Rather, Plaintiff has introduced evidence revealing the extent to which he benefited from his efforts and publications; numerous professors congratulated him on his accomplishments and commented on his increased prestige.
In Florida the sale and lease of business opportunities are regulated by statute (the statute does not apply to franchises regulated under the FTC’s business opportunity rule.). The statute requires (§ 559.803) that the offeror of a business opportunity make disclosures to propsective purchasers which include the following language:
The State of Florida has not reviewed and does not approve, recommend, endorse, or sponsor any business opportunity. The information contained in this disclosure has not been verified by the state. If you have any questions about this investment, see an attorney before you sign a contract or agreement.
FL. Stats. § 559.811 provides:
Contracts to be in writing; form; provisions.—
(1) Every business opportunity contract shall be in writing, and a copy shall be given to the purchaser at least 3 working days before signing the contract.
(2) Every contract for a business opportunity shall include the following:
(a) The terms and conditions of payment, including the total financial obligation of the purchaser to the seller.
(b) A full and detailed description of the acts or services that the business opportunity seller undertakes to perform for the purchaser.
(c) The seller’s principal business address and the name and address of its agent in the state authorized to receive service of process.
(d) The approximate delivery date of products, equipment, or supplies which the business opportunity seller is to deliver to the purchaser.
Does the requirement of writing exclude promissory estoppel?
There will be a social event for section D on March 22 from 6-8pm at Calamari Restaurant 3540 Main Highway Miami, FL 33133.
WEEK 9: Mar 14-18 Spring Break. Have a good break.
Mar. 10: Here is the complaint in Charlie Sheen’s breach of contract claim against Warner Brothers and others.
WEEK 8: Mar. 7-11On Monday we will finish Hamer v Sidway, then look at the problem on page 304 and read up to page 325. For Tuesday please read to page 355 and for Thursday to page 376.
Mar. 6: Here are a couple of sample questions: Sample Questions 1
May 7: In Devecmon v Shaw (Court of Appeals of Maryland, 1888) a nephew claimed the cost of a European trip against his uncle’s estate. The court said:
It might very well be, and probably was the case, that the plaintiff would not have taken a trip to Europe at his own expense. But whether this be so or not, the testimony would have tended to show that the plaintiff incurred expense at the instance and request of the deceased, and upon an express promise by him that he would repay the money spent. It was a burden incurred at the request of the other party, and was certainly a sufficient consideration for a promise to pay. Great injury might be done by inducing persons to make expenditures beyond their means, on express promise of repayment, if the law were otherwise. It is an entirely different case from a promise to make another a present; or render him a gratuitous service. It is nothing to the purpose, that the plaintiff was benefited by the expenditure of his own money. He was induced by this promise to spend it in this way, instead of some other mode. If it is not fulfilled, the expenditure will have been procured by a false pretence.
Mar 8: In a recent article Jody S. Kraus and Robert E. Scott argue:
that equitable reasoning undermines efficient design not only when courts apply equitable doctrines directly, but also when courts use equitable reasoning to guide their application of formal doctrine to the facts of contract disputes. The most profound effect of equity on American contract law, therefore, is its gravitational influence on the judicial application of formal doctrine in contract disputes.
Contract Design and the Structure of Contractual Intent 84 N.Y.U.L. Rev. 1023, 1034-5 (2009)
Mar 9: Here is another sample essay question (I will update the questions document on the materials page to reflect additional examples):
The Casebook includes a section on “Contracts in the Family Setting”. Would the results in the cases be any different if the courts were required to give effect to agreements among family members to the extent necessary to avoid injustice ?
Feb 27: On premarital agreements see, e.g., Florida Statutes § 61.079 (7) ENFORCEMENT.—
(a) A premarital agreement is not enforceable in an action proceeding under the Florida Family Law Rules of Procedure if the party against whom enforcement is sought proves that:
1.The party did not execute the agreement voluntarily;
2.The agreement was the product of fraud, duress, coercion, or overreaching; or
3. The agreement was unconscionable when it was executed and, before execution of the agreement, that party: a. Was not provided a fair and reasonable disclosure of the property or financial obligations of the other party; b. Did not voluntarily and expressly waive, in writing, any right to disclosure of the property or financial obligations of the other party beyond the disclosure provided; and c. Did not have, or reasonably could not have had, an adequate knowledge of the property or financial obligations of the other party.
(b) If a provision of a premarital agreement modifies or eliminates spousal support and that modification or elimination causes one party to the agreement to be eligible for support under a program of public assistance at the time of separation or marital dissolution, a court, notwithstanding the terms of the agreement, may require the other party to provide support to the extent necessary to avoid that eligibility.
(c)An issue of unconscionability of a premarital agreement shall be decided by the court as a matter of law.
WEEK 7: Feb 28- Mar 4 On Monday we will begin with question 2 on page 244 of the Casebook and begin the family cases. Please read to page 281 for Monday, 309 for Tuesday, and 345 for Thursday.
Have a good weekend.
WEEK 6: Feb 21-25 We will begin the week with Peevyhouse v Garland Coal and Mining and the other two cases before the review problems on pages 224-8. I think we’re likely to be still dealing with the problems on Tuesday. However, for Tuesday please also read to page 245 – in class we will focus on the problems on pages 243-5. For Thursday please read to page 281.
WEEK 5: Feb 14-18 We will begin next week with tidying up some loose ends on the two cases on damages for lost profits in new businesses. I don’t propose to discuss pages 133-9 in class as such, though you should have read them. And, in particular, note the excerpt from Macaulay which discusses the idea that business people may well avoid difficult issues to avoid argument. This raises some questions about how we should think about the agreements they reach. Anyway, we will move on to thinking about reliance on Monday. Please read to page 156 for Monday, 183 for Tuesday, and 224 for Thursday. We may not get as far as this, but we have accelerated a bit recently. After we go through this material we will look at the review problems on pages 224-228. We won’t get to these next week.
Have a good weekend.
Feb. 9: Sample liquidated damages provision from Showbiz Pizza Time Inc. Franchise Agreement:
14.2 Liquidated Damages Franchisee acknowledges that its uncured breach of any of the terms of this Agreement will materially and adversely affect Franchisor and that the quantum of such damages may not be easily ascertainable. Accordingly, Franchisee agrees that, as liquidated damages for the non-performance of its obligations under this Agreement, in addition to any other remedy available to Franchisor, Franchisee shall pay to Franchisor US$— initially and US$— per month per violation for so long as each such violation remains uncured; provided, however, that this provision will only be operative upon material breaches of this Agreement which are in Franchisee’s or Franchisee’s Principals’ control.
Here are provisions from the Radisson Franchise Agreement:
Article 5.2 — Royalty Fee: During Agreement Years 1 and 2, Licensee will pay Radisson a Royalty Fee equal to the greater of 3.75% of daily Gross Room Revenues or $ 150,000 Minimum Royalty Fee per Agreement Year.
Article 17.4 — Liquidated Damages: If Radisson terminates this Agreement for Licensee’s fault, the actual damages that Radisson would suffer for the loss of prospective fees and other amounts payable to Radisson under Article 5 would be difficult if not impossible to ascertain. . . . [Liquidated damages] is calculated as the lesser of two times the amount payable to Radisson under Section 5.2 for the immediately preceding 12 months, or the number of months remaining until the commencement date of a Termination Window provided herein or expiration of the Term, whichever is sooner, times the average monthly Royalty Fees payable to Radisson under Section 5.2 for the immediately preceding 12 months….
The Radisson provision was found to be a valid liquidated damages provision in Radisson Hotels v. Majestic Towers, Inc., 488 F. Supp. 2d 953 (2007) and Radisson Hotels v. Kaanam, LLC 2011 U.S. Dist. LEXIS 3208 (2011)
WEEK 4: Feb 7-11 Here is my plan: Monday pp 89-112 (we won’t get to page 112 on Monday but I’d like to start discussing Lake River v Carborundum on Monday); Tuesday please read to page 123; Thursday to page 139.
Feb. 6: The conventional view that specific performance is a common remedy in civil law jurisdictions may not be completely accurate. One study found that specific performance was rare in Denmark, Germany and France and in contracts to which the CISG applies. The authors applied the term specific performance to cases where the sanction for non-performance was greater than the amount of damages for the cost of non-performance. For example, in Denmark, where a judge orders specific performance by one party who does not comply with the order, the other party has the right to bring a private criminal suit. In practice such suits do not happen. In the one recent case the authors found the plaintiff lost. They wrote:
We argue that for specific performance to be an attractive remedy to the conforming party, a costly system of enforcement must be set in place, which authorities have been reluctant to do. The costs have been regarded as out of proportion to the gain of applying specific performance rather than damages. Our main argument is that as a consequence of less than fully rigorous and effective enforcement, specific performance has (when available) become an unattractive remedy for plaintiffs.
(Henrik Lando & Caspar Rose, The Enforcement of Specific Performance in Civil Law Countries, 24 International Review of Law and Economics 473-487 (2004))
WEEK 3: Jan 31-Feb 4: I’m hesitant to make predictions about how much we will cover next week as my prediction for this week was so inaccurate. However, for Monday please read pages 51-77, for Tuesday pages 77-100 and for Thursday pages 100-119.
In thinking about UCC §2-706 on Thursday we saw that the seller is subject to the requirement to “give the buyer reasonable notification” of his intention to resell via a private sale (§ 2-706(3)) and with respect to a public resale there is an obligation to “give reasonable notice of the time and place” (§ 2-706(4)(b)). Please read UCC § 1-202 which deals with notice and knowledge, especially § 1-202(d): a person gives a notification “by taking such steps as may be reasonably required to inform the other person in ordinary course, whether or not the other person comes to know of it” and (e): a person receives a notice or notification when it comes to their attention or “it is duly delivered in a form reasonable under the circumstances at the place of business through which the contract was made or at another location held out by that person as the place for receipt of such communications”.
The last hypothetical we looked at involved a resale arguably not in compliance with § 2-706, and the question was whether the seller should be able to recover damages based on market price, which would allow for higher recovery than if the seller’s damages would be fixed by reference to the resale price. In Coast Trading Company v Cudahy Company (9th Cir. 1979) the Court said:
..as noted in White and Summers’ treatise, the plaintiff-seller should not be allowed to obtain a greater amount in Section 2-708 damages than the seller actually lost..
Have a good weekend.
Jan. 30: ContractsProfBlog has this great story:
Ohio Congressman and former presidential candidate Dennis Kucinich bit into a sandwich wrap containing an olive pit and now he is suing a congressional cafeteria for $150,000. He claims negligence and breach of the implied warranty of merchantability.
Jan 31: In a recent article (A Theory of Self-help Remedies in Contract, 89 B.U.L. Rev. 1397 (2009)), Mark Gergen writes (at page 1403):
The interest in remedial simplicity explains why the law tolerates waste and windfall in this situation. There is reason to believe that MacLaine genuinely preferred the role in Bloomer Girl to the role in Big Country, Big Man. To protect MacLaine from a loss in performing the less desired role, while avoiding waste, the law might require her to take the role in the Western while giving her damages for her loss. This the law does not do. Had MacLaine taken the role, she would have been denied damages for her artistic, political, or reputational loss, as any estimate of the loss would be speculative. The only way MacLaine could avoid suffering an uncompensated loss was to do what she did, which was to reject the role in Big Country, Big Man and get a judgment for the contract price.
WEEK 2: Jan 24-28: We jumped a bit suddenly into the analysis of the application of the UCC to sale of goods transactions when we started to discuss wills on Thursday. But we will need to get at this issue more deliberately. So we will start on Monday with the hypotheticals on CB pp. 46-48 (and be sure to read the cited UCC provisions). Do you think UCC § 1-103 might help us to answer any of these questions? And note the reference to Judge Posner’s comments on page 38. Please also read pages 48-50 and look at the questions on page 50.
For Tuesday please read up to page 77, and for Thursday to page 89.
I have moved the material that was previously on this page to the contracts archive 2011 page (which is also accessible from the link on the right side of the page).
FIRST CLASS ASSIGNMENT
1. Read this Physician-Patient Arbitration Agreement. Imagine that you have had a long relationship with this doctor, and that on visiting the doctor’s office you are presented with this document and told that the doctor will only see you if you sign the document. You are also told that the doctor would prefer you initial the part of the document that states “Effective as of the date of first medical services”. Would you sign the document? Would you also initial the provision for retrospective effect? Would it make a difference whether you were at the office for an urgent issue or for a regular checkup? Does the long relationship make a difference here?
2. Read this Sample Patient Contract for Using Opioid Pain Medication in Chronic Pain. Why would a doctor give such a contract to a patient? Do you think such an agreement is likely to achieve its objectives?
3. Look at this Learning Contract Maker. Is the learning contract this program would generate the same sort of contract as the ones you read before? How is it similar or different? Do you think it would be a good idea to adopt learning contracts for this class?
4. Read CB pages 1-29.
Jan 16, 2011: By close of business (for the avoidance of doubt, this is 5.00pm eastern time) on Friday Jan 21, please send an email (subject line: Bradley Contracts Class) to my assistant, Sandra Hernandez (firstname.lastname@example.org) with two facts you would like me to know about you.
Jan. 19, 2011: In Woebse v Health Care and Retirement Corporation of America in 2008 the 2nd. DCA invalidated an arbitration agreement because it was both procedurally and substantively unfair:
Ms. Wright has demonstrated that there was procedural unconscionability in relation to the signing of the arbitration agreement. During the five-minute meeting which took place between Ms. Wright and Ms. Tomei, there was no attempt to inform Ms. Wright of the existence of the arbitration agreement, much less to explain the document to her and the rights she would be waiving on behalf of her father.
In Bland this court reviewed the identical arbitration agreement as is involved in the present case. However, in that case the arbitration agreement was “worded clearly, conspicuously and separate from other [admissions] documents.” .. In the present case, the arbitration agreement was included as pages thirty-three through thirty-seven of the thirty-seven page sequentially numbered document. Ms. Wright was not given the opportunity to read the thirty-seven page document prior to signing but was merely directed where to sign. Additionally, because Ms. Wright was never provided with a copy of the agreement, she did not have a chance to review the agreement at any time after this five-minute encounter.
With regard to another determinative factor-equal bargaining power-it did not exist. Ms. Wright was never informed that she was not required to sign the arbitration agreement in order for her extremely ill, incapacitated father to be allowed to remain at the facility. In her deposition Ms. Wright testified that she was told by Ms. Tomei that “they were admission papers that were required to be signed for [her father's] continued stay.”…
…chapter 400 was designed to protect the rights of nursing home residents and .. the law provides an award of punitive damages for gross or flagrant conduct or conscious indifference to these rights. We … hold that this arbitration agreement would not vindicate a nursing home resident’s statutory rights in any manner because it specifically deprives the resident of those rights. In the present case, the trial court erred when it applied the law to the facts and determined that the arbitration agreement was not substantively unconscionable.