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contracts archive fall 2017

Week 15: November 20 DK Arena v EB Acquisitions (Florida Supreme Court 2013) and Spring 2013 exam.

Review sessions:

Monday 27 November, 3.30 pm, Room F1-09
Tuesday 5 December, 2-3.30pm, Room F108

Week 14: November 13-17 On Monday we will start off by finishing non-compete agreements and move on to duress (CB pages 522-545). And we will think about the question of settlement agreements for sexual harassment with non-disclosure agreements I raised in class. And look at this article by Hiba Hafiz, How Legal Agreements Can Silence Victims of Workplace Sexual Assault, in The Atlantic (Oct. 18, 2017) (please note that this article is an assigned reading and I added it to the class materials page) Please also read pages 557-565 for Monday’s class (duty of good faith).

The rules relating to non-compete agreements vary. But employers do like to have their employees sign con-compete agreements. In the context of employment at will courts have been willing to see the employer’s refraining from firing the at will employee as consideration for the employee’s promises not to compete. The Wisconsin Supreme Court adopted this approach in 2015 in Runzheimer International Ltd. v. Friedlen (this ABA article refers to decisions in other state courts which have taken this approach).

For Wednesday’s class please read pages 590-607 and these cases: Kindred Nursing Centers v Clark (US Supreme Court 2017) and Selden v Airbnb (DDC Nov. 2016) (aff’d DC Cir. 2017; cert denied. Oct. 2017).

With respect to arbitration, in AT&T v Concepcion in 2011 the US Supreme Court addressed the interaction between state contract law and the federal Arbitration Act in an opinion written by Justice Scalia. The Concepcions were trying to bring a class action based on AT&T’s advertising of phones as free when the sales were subject to sales tax. Courts in California had used the doctrine of unconscionability in cases like this, recognizing that class actions could have a deterrent effect that bilateral arbitration would not have (the Discover Bank rule). Section 2 of the FAA states that arbitration agreements are “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.”

In the Supreme Court, Justice Scalia said:

When state law prohibits outright the arbitration of a particular type of claim, the analysis is straightforward: The conflicting rule is displaced by the FAA… But the inquiry becomes more complex when a doctrine normally thought to be generally applicable, such as duress or, as relevant here, unconscionability, is alleged to have been applied in a fashion that disfavors arbitration. In Perry v. Thomas ..for example, we noted that the FAA’s preemptive effect might extend even to grounds traditionally thought to exist ” ‘at law or in equity for the revocation of any contract.’… We said that a court may not “rely on the uniqueness of an agreement to arbitrate as a basis for a state-law holding that enforcement would be unconscionable, for this would enable the court to effect what … the state legislature cannot.”.. An obvious illustration of this point would be a case finding unconscionable or unenforceable as against public policy consumer arbitration agreements that fail to provide for judicially monitored discovery… Other examples are easy to imagine. The same argument might apply to a rule classifying as unconscionable arbitration agreements that fail to abide by the Federal Rules of Evidence, or that disallow an ultimate disposition by a jury (perhaps termed “a panel of twelve lay arbitrators”to help avoid preemption). Such examples are not fanciful, since the judicial hostility towards arbitration that prompted the FAA had manifested itself in “a great variety”of “devices and formulas”declaring arbitration against public policy… it is worth noting that California’s courts have been more likely to hold contracts to arbitrate unconscionable than other contracts…Although §2’s saving clause preserves generally applicable contract defenses, nothing in it suggests an intent to preserve state-law rules that stand as an obstacle to the accomplishment of the FAA’s objectives.

State contract law has some relevance to arbitration agreements, but it cannot be applied in a way that undermines the FAA.

For Thursday’s class please read these articles: Margaret Jane Radin, The Fiduciary State and Private Ordering (February 19, 2016). Paul B. Miller and Andrew S. Gold, eds., Contract, Status, and Fiduciary Law, Oxford, 2016 and Jane K. Winn, The Secession of the Successful: The Rise of Amazon as Private Global Consumer Protection Regulator, 58 Ariz. L. Rev. 193 (2016). If there is some time on Thursday we will also think about the themes of the semester (i.e. the topics that could be the focus of a policy/theory question on the final exam).

Here are the contract law themes I think we have been thinking about this semester:

1. Contract law and fairness: formal contract law and promissory estoppel; how do the cases we have studied fit with ideas of fairness: are the courts in the cases we have read trying to apply the law, or trying to do justice between the parties, or both? Is it always fair to enforce contracts, or not? Does emphasizing ideas of certainty (giving effect to contracts rather than rewriting contracts) increase fairness or not? Does the law you have been studying really give effect to freedom of contract? Should courts focus on just the case before them or on the rule the case establishes, or both? For example, should courts deciding contract cases take account of how contracting parties generally will likely behave in response to a particular decision?

2. Courts and legislatures: should courts decline to develop the law in deference to the legislature, and, if so, when? Marvin v Marvin and Hewitt v Hewitt (and Blumenthal v Brewer) illustrate different attitudes to this question. The legislative history of the Wisconsin Fair Dealership Law suggests that legislatures aren’t necessarily better at evidence gathering and negotiating than courts are. We have also seen some variation in how courts go about interpreting and applying statutes (e.g. illegality, regulation of non-competes in Wisconsin).

3. Context: Are family cases really different from contracts for the “timely delivery of a crate of oranges”(Miller v Miller, CB p. 246). Are family disputes different from commercial disputes, or not? What about employment? Are employment contract issues like commercial contracts or like family contracts?

4. Contract law and power: do the materials you have read suggests that contract law has any coherent view of how to deal with inequalities in bargaining position?

On Monday November 20 we will begin with DK Arena v EB Acquisitions (Florida Supreme Court 2013) and we will discuss the Spring 2013 exam.

I have added past exams to the course materials page, and a list of statutes (which I may revise on November 10).

Have a good weekend.

Week 13: November 6-10 On Monday we will begin by thinking about the dress code issues raised by the TWA case and then move on to McIntosh v Murphy. Note that the approach in McIntosh v Murphy is not followed in Florida. In Tanenbaum v. Biscayne Osteopathic Hospital, Inc. (FL. Sup. 1966) the Court refused to apply promissory estoppel in the context of an oral agreement for employment for 5 years (“The question that emerges for resolution by us is whether or not we will adopt by judicial action the doctrine of promissory estoppel as a sort of counteraction to the legislatively created Statute of Frauds. This we decline to do.”) This approach was endorsed by the Florida Supreme Court in DK Arena v EB Acquisitions in 2013. Please also read Wagenseller for Monday’s class (to page 462). With respect to Wagenseller, please note Florida Statutes §448.102:

Prohibitions. — An employer may not take any retaliatory personnel action against an employee because the employee has: (1) Disclosed, or threatened to disclose, to any appropriate governmental agency, under oath, in writing, an activity, policy, or practice of the employer that is in violation of a law, rule, or regulation. However, this subsection does not apply unless the employee has, in writing, brought the activity, policy, or practice to the attention of a supervisor or the employer and has afforded the employer a reasonable opportunity to correct the activity, policy, or practice. (2) Provided information to, or testified before, any appropriate governmental agency, person, or entity conducting an investigation, hearing, or inquiry into an alleged violation of a law, rule, or regulation by the employer. (3) Objected to, or refused to participate in, any activity, policy, or practice of the employer which is in violation of a law, rule, or regulation.

On Wednesday we will discuss the hypo at page 462. We will not spend class time on pages 464-480. Please read to page 500 for Wednesday’s class (illegality). On Thursday I would like to cover covenants not to compete(CB pages 501-512 and Florida Statutes §542.335) and duress (CB pages 522-545). It’s likely we won’t get to or finish duress on Thursday, but when we do think about duress I would like to focus on the question of settlement agreements for sexual harassment with non-disclosure agreements I raised in class. And look at this article by Hiba Hafiz, How Legal Agreements Can Silence Victims of Workplace Sexual Assault, in The Atlantic (Oct. 18, 2017) (please note that this article is an assigned reading and I added it to the class materials page).

Have a good weekend.

(Retained from last week) Here are the Cinderella Questions I wrote last year.

November 1: Today Senator Warren published an interesting article The Supreme Court Has an Ethics Problem. The story isn’t directly relevant to the material we are studying right now, although it could be relevant to the issue of how the Supreme Court addresses the enforceability of arbitration agreements. Here’s a brief extract to consider:

Janus v. AFSCME… is a case that will determine whether public sector unions—which represent teachers, nurses, firefighters and police in states and cities across the country—can collect fees from all employees in the workplaces they represent. Justice Gorsuch is widely expected to deliver the court’s deciding vote to strip unions of this ability. A decision along these lines would seriously undercut workers’ freedom to have a real voice to speak out and fight for higher wages, better benefits and improved working conditions. …Just as the ink was drying on the court’s announcement that it would hear Janus, Justice Gorsuch was off to hobnob with some of the biggest supporters for one side of this important case—the side that wants to deny workers the freedom to build a future that doesn’t hang by a thread at the whim of a few billionaires…. The Code of Conduct for United States Judges requires judges to recuse themselves when certain potential conflicts arise, such as in cases in which the judge, the judge’s spouse or the judge’s minor children have a financial interest or in cases in which the judge has a “personal bias or prejudice” against or for any party in the case. But those rules don’t apply to Supreme Court justices. In fact, Supreme Court justices are the only federal judges who are not bound by a formal code of conduct….Federal judges are not supposed to be politicians or advocates. They are supposed to rise above the political winds of the day and demonstrate a single-minded commitment to one promise: equal justice under law. As judges of the nation’s highest court, it is time for Supreme Court justices to demonstrate that they can meet that standard.

Here’s the quote I mentioned in class on Monday relating to the issue of certainty in contract law:

We will 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. (from Jody S. Kraus and Robert E. Scott Contract Design and the Structure of Contractual Intent 84 N.Y.U.L. Rev. 1023, 1034-5 (2009))

With respect to business opportunities, please note Florida Statutes § 559.811:

559.811 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.

Week 12: October 30- November 3 On Monday we will start with Ricketts v Scothorn – please read to page 345. I do not propose to cover pages 346-363 in any detail. For Wednesday, please read to page 405 (this is a bit ambitious). For Thursday please read to page 454.

After we have covered this material you may want to think about these Cinderella Questions I wrote last year.

Have a good weekend.

November 1: Today Senator Warren published an interesting article The Supreme Court Has an Ethics Problem. The story isn’t directly relevant to the material we are studying right now, although it could be relevant to the issue of how the Supreme Court addresses the enforceability of arbitration agreements. Here’s a brief extract to consider:

Janus v. AFSCME… is a case that will determine whether public sector unions—which represent teachers, nurses, firefighters and police in states and cities across the country—can collect fees from all employees in the workplaces they represent. Justice Gorsuch is widely expected to deliver the court’s deciding vote to strip unions of this ability. A decision along these lines would seriously undercut workers’ freedom to have a real voice to speak out and fight for higher wages, better benefits and improved working conditions. …Just as the ink was drying on the court’s announcement that it would hear Janus, Justice Gorsuch was off to hobnob with some of the biggest supporters for one side of this important case—the side that wants to deny workers the freedom to build a future that doesn’t hang by a thread at the whim of a few billionaires…. The Code of Conduct for United States Judges requires judges to recuse themselves when certain potential conflicts arise, such as in cases in which the judge, the judge’s spouse or the judge’s minor children have a financial interest or in cases in which the judge has a “personal bias or prejudice” against or for any party in the case. But those rules don’t apply to Supreme Court justices. In fact, Supreme Court justices are the only federal judges who are not bound by a formal code of conduct….Federal judges are not supposed to be politicians or advocates. They are supposed to rise above the political winds of the day and demonstrate a single-minded commitment to one promise: equal justice under law. As judges of the nation’s highest court, it is time for Supreme Court justices to demonstrate that they can meet that standard.

Here’s the quote I mentioned in class on Monday relating to the issue of certainty in contract law:

We will 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. (from Jody S. Kraus and Robert E. Scott Contract Design and the Structure of Contractual Intent 84 N.Y.U.L. Rev. 1023, 1034-5 (2009))

With respect to business opportunities, please note Florida Statutes § 559.811:

559.811 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.

Week 11: October 23-27 On Monday we will look at the Pepsi problem and then move on to agreements between married people, people to be married and unmarried couples. Please read to page 276.

Please note that the material in the casebook on Blumenthal v Brewer at pages 272-3 has been superseded by the decision of the Illinois Supreme Court in 2016 (you are not required to read the full judgment). The Court held that the appellate court did not have the jurisdiction it claimed and could not overrule Hewitt. So Hewitt is still good law in Illinois. Here is an excerpt from the judgment – please read this: Blumenthal v Brewer) The Illinois Supreme Court this year again emphasized in Manago v Cook County (I give the link here in case you are interested and not because you are required to read the judgment) that the Court “is not tasked with evaluating and setting public policy” because that is a matter for the legislature. The Court said:

Our duty in this case is properly limited to determining the intent of the legislature based on the plain and unambiguous statutory language and construing the relevant statutes consistent with that intent.

Marriage rates in the US have declined in recent years, and people of higher socio-economic status are more likely to be married than people who are less well educated and less well off. (e.g. As U.S. marriage rate hovers at 50%, education gap in marital status widens).

If you are interested in the question of whether and when courts should make social policy you may be interested in reading this Discussion from 2008 (not required reading but interesting).

For Wednesday’s class please read to page 296 and for Thursday to page 322.

Please note for later that I do not propose to cover pages 346-363 in any detail.

Week 10: October 16-20For Monday’s class please read to page 220. We should be able to start thinking about the problems on Monday but will still be working through them on Wednesday. For Wednesday please read to page 237. We will be thinking about issues of contract formation. Read this Complaint in Trump v Maher (the case was later abandoned) and think about how good the claim expressed in the complaint was.

Here is the Pepsi ad referred to in question 2 on page 236:

For Thursday please read to page 276.

Please note that the material in the casebook on Blumenthal v Brewer at pages 272-3 has been superseded by the decision of the Illinois Supreme Court in 2016 (you are not required to read the full judgment). The Court held that the appellate court did not have the jurisdiction it claimed and could not overrule Hewitt. So Hewitt is still good law in Illinois. Here is an excerpt from the judgment – please read this: Blumenthal v Brewer) The Illinois Supreme Court this year again emphasized in Manago v Cook County (I give the link here in case you are interested and not because you are required to read the judgment) that the Court “is not tasked with evaluating and setting public policy” because that is a matter for the legislature. The Court said:

Our duty in this case is properly limited to determining the intent of the legislature based on the plain and unambiguous statutory language and construing the relevant statutes consistent with that intent.

Marriage rates in the US have declined in recent years, and people of higher socio-economic status are more likely to be married than people who are less well educated and less well off. (e.g. As U.S. marriage rate hovers at 50%, education gap in marital status widens).

Week 8: October 2-7: While you will be busy with torts this coming week, here is some contracts related material:

First, a note about expenses in reliance and expectation vs reliance damages. Security Stove and Armstrong Rubber are buyer and not seller remedy cases. A lessee/ buyer of equipment can claim reliance damages under those cases. Let’s think about buyer’s remedies under the UCC. Imagine a buyer who contracts to buy a specially manufactured vehicle for $100,000. Buyer is willing to make significant expenditures in reliance on the contract. For example the buyer might (1) build or renovate a garage to store the car (with no thought of making a profit from the car), or (2) might plan to rent out the car generally, for special events, for tv and movies etc, and might engage in expenditure to get this business off the ground (including work on the garage). The disappointed buyer might be able to cover – acquire the car from another manufacturer, in which case damages would be based on the difference between contract price and what the buyer would have to pay another manufacturer to produce the car. Depending on the circumstances specific performance might or might not be available. If the lost profits are such that the seller had reason to know of the buyer’s general or particular requirements and needs at the time of contracting (e.g. the plans to build a business around the car) and any damages can be established with reasonable certainty the lost profits can be claimed as consequential damages under UCC §2-715(2). But what about case 1, where there is no thought of profit, or case 2, where there is a hope of profit but it is not possible to establish the damages with reasonable certainty. The casebook suggests that although the UCC does not expressly provide for recovery of reliance damages an argument could be made that the expenses in anticipation of the contract could be recovered as consequential damages (again there is the issue whether the seller has reason to know of the building/renovation of the garage etc, but there isn’t the issue with respect to quantification that exists with respect to lost profits). Remedies in UCC Art 2 do not neatly track the reliance/expectation distinction we see in the Security Stove and Armstrong Rubber cases.

And, as the book points out the issue in the Armstrong Rubber case about how to think about reliance damages where the business enterprise would not be profitable is not resolved in the UCC. Note the Armstrong Rubber rule is set out in Restatement §349.

On the distinction between direct and consequential damages (important for contracts excluding liability for consequential damages) consider the example of In Re Rust-oleum Restore Marketing, Sales Practices and Products Liability Litigation (N. D. Ill. 2016). Plaintiffs claimed that a paint product was defective, and that they should be able to recover damages, for example for costs of removing the paint or replacing damaged structures. Rust-Oleum argued that they had limited liability to customers to either a refund of the original purchase price or replacement with a product of equal value (the exclusive remedy provision) and that they had specified that they would not be liable for consequential damages. The court said that the damages might be able to be characterized as direct, rather than consequential, damages:

Taking all the reasonable inferences in Plaintiffs’ favor, they have alleged factual support for a finding that the damages resulting from application of Restore to surfaces following the instructions, constitute direct damages which were bargained for as expressly embodied in Rust-Oleum’s own warranty provision. Accordingly, Plaintiffs have sufficiently alleged a factual basis supporting a finding of direct damages which precludes dismissal of their claim at this early stage.

The case was settled in 2017. The settlement agreement established a fund for payment of compensation, which included (in addition to payment of the purchase price or replacement product) provisions for compensation for costs of removal of the product in appropriate cases (depending on the seriousness, either the lower of actual cost or $2 per square foot or the lower of actual cost or $6 per square foot (where the square footage is only the area with problems)).

Midterm: Here is my Contracts Midterm 2017. If you would like to try answering this as a midterm exam (i.e. as a timed exercise (1 hour) and on a closed book basis) or with your materials to hand and not under time constraints I would be happy to give you feedback on written answers. This is not mandatory, but in the past students have found the feedback to be useful. Try to keep your answers to about 3 pages in length. Ideally I’d like to have your answers by around October 16th but I may not post a memo on the question until a few days later than that.

If you email me your answers in word format I can add comments to your document using track changes. Please tell me whether you answered the questions under exam conditions or not.

Here’s the Fall 2011 Midterm and a Memo on the Fall 2011 Contracts Midterm

September 27: here’s a diagram of issues relating to damages I hope you may find helpful: Damages Diagram

Week 9: October 9-13 Classes on Monday and Wednesday will be from 3.30-5.20pm. Class on Thursday will be 3.30-4.50pm.

For Monday please read to page 180. For Wednesday to page 202 (I do not usually spend much time on De Leon v Aldrete, but Peevyhouse does take up time). For Thursday please read to page 220. We probably won’t get to the questions on Thursday but please think about them in case we do.

Here is a link to the discussion of Hawkins v McGee in The Paper Chase:

Week 7: September 25-29: Classes this week will finish at 4.50pm. We will begin by finishing up discussion of liquidated damages, including the Liquidated Damages Question.

Invalidating a liquidated damages clause is an example of rewriting contracts, something we will be thinking about from time to time during the course. Eliminating a provision of a contract such as a liquidated damages clause involves changing the terms of the deal the parties reach. You might be interested to learn that boilerplate terms (terms in a written contract that are generally not specifically negotiated) often include severability provisions. For example, the Uber Terms of Use include a severability provision within the arbitration agreement and in addition this general language:

If any provision of these Terms is held to be invalid or unenforceable, such provision shall be struck and the remaining provisions shall be enforced to the fullest extent under law.

Is such a provision an invitation to courts to rewrite contracts?

On Monday we will also discuss Hadley v Baxendale (I understand that those of you who are taking Elements are discussing this case now in that class also) (please read to page 125 in case we can get through Hadley quickly). With respect to consequential damages please note this language from the Uber US Terms of Use:

LIMITATION OF LIABILITY.
UBER SHALL NOT BE LIABLE FOR INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE, OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS, LOST DATA, PERSONAL INJURY, OR PROPERTY DAMAGE RELATED TO, IN CONNECTION WITH, OR OTHERWISE RESULTING FROM ANY USE OF THE SERVICES, REGARDLESS OF THE NEGLIGENCE (EITHER ACTIVE, AFFIRMATIVE, SOLE, OR CONCURRENT) OF UBER, EVEN IF UBER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
UBER SHALL NOT BE LIABLE FOR ANY DAMAGES, LIABILITY OR LOSSES ARISING OUT OF: (i) YOUR USE OF OR RELIANCE ON THE SERVICES OR YOUR INABILITY TO ACCESS OR USE THE SERVICES; OR (ii) ANY TRANSACTION OR RELATIONSHIP BETWEEN YOU AND ANY THIRD PARTY PROVIDER, EVEN IF UBER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. UBER SHALL NOT BE LIABLE FOR DELAY OR FAILURE IN PERFORMANCE RESULTING FROM CAUSES BEYOND UBER’S REASONABLE CONTROL. YOU ACKNOWLEDGE THAT THIRD PARTY PROVIDERS PROVIDING TRANSPORTATION SERVICES REQUESTED THROUGH SOME REQUEST PRODUCTS MAY OFFER RIDESHARING OR PEER-TO-PEER TRANSPORTATION SERVICES AND MAY NOT BE PROFESSIONALLY LICENSED OR PERMITTED.

From the aftermath of Chung (note 1 on page 123) we learn that you don’t generally get non-economic damages for breach of contract. And see Restatement §353. But David A. Hoffman and Alexander S. Radus, Instructing Juries on Noneconomic Contract Damages. 81 Fordham L. Rev. 1221 (2012) examined pattern jury instructions and the reactions of lay people to these instructions to discover how they might impact juries’ findings with respect to damages. They write:

The conventional story of noneconomic contract damages is too simple. In that story, almost no contract cases will end with an award of noneconomic damages….We accept that in most jurisdictions, judges will deny most forms of noneconomic damages, if the right motion is presented at the right moment in the life of the case. But litigations that result in considered appellate opinions are not just rare: they are exceptional. Most cases settle in the shadow of an expected jury verdict. And those expected jury verdicts relate to pattern instructions. As we have demonstrated, contract pattern instructions are significantly less restrictive of noneconomic losses than the treatises would have led us to believe. Controlled testing found that almost no experimental subjects awarded the promisee’s bare economic expectation. Rather, they usually awarded more when provided with information about emotional losses

We have so far thought of damages being awarded to reflect the non-breaching party’s expectation interest. But we are going to see that contract damages can also be based on reliance, or can be designed for restitution. See Restatement §344 which defines these different conceptions of damages. We will begin with reliance, so for Wednesday please read to page 155. I am going to ask you to read to page 165 for Thursday, but it is possible we won’t in fact get that far.

I promised you all a new hypo which I plan to write over the weekend. Have a good weekend!

September 27: here’s a diagram of issues relating to damages I hope you may find helpful: Damages Diagram

Here is a link to the audiorecording of class on Wednesday September 20.
Here is a link to the audiorecording of class on Thursday September 21

Hurricane Irma class make-up information. During the week beginning October 2 (originally designated as Fall Break) I understand that Prof. Sevel will be holding torts classes at the times and place we normally have contracts. Contracts make-up times will be on Mondays and Wednesdays from 4.50pm to 5.20pm beginning Monday October 9. Our last class will be on Monday November 20 although I generally schedule a review session before the exam. This would usually take place on December 4 or 5 as your contracts exam is scheduled for December 6.

Week 6: September 18-22 We will meet for class again on Wednesday September 20. We will begin with any questions you have about the Worldcom case (Michael Jordan). I previously invited you to note this comment of Reuben Hasson on Lord Denning (cf. Note 5 on page 84 of the Casebook):

The attempts made over the years to thrust greatness on Lord Denning fail. From 1970 until his retirement in 1982, I do not think he deserved even to be called a good judge.

The casebook describes Denning as one of the most famous judges of his day. Hasson’s comment is useful for us as it invites us to think about what makes a judge a good judge or even a great judge. It surely isn’t just about fame, but something else. A good judge might be someone whose opinions are respected and followed many years after they are given. Might there be other characteristics that would make a judge a good judge?

Anyway, please read to page 95 for Wednesday and to page 108 for Thursday.

Here is a note on liquidated damages:
In construction contracts a clause may specify an amount to be paid per day where completion of construction is delayed. In Boone Coleman Construction, inc. v. Village of Piketon in 2016 the Ohio Supreme Court wrote:

the benefits of liquidated-damages provisions in building and construction contracts are well documented…. The provisions create firm expectations and allow the parties to allocate damages caused by delays in completing construction.. The ability to agree about damages is particularly important in public-works-construction contracts because “[i]t is uniquely difficult to calculate damages to the general public interest caused by a contractor’s breach of its agreement to provide public improvements.”

The Court noted that cases suggest that a per diem amount seems more like liquidated damages than a lump sum (which might look like a penalty).

In franchise agreements it is common to have a liquidated damages provision for payment of some multiple of the franchsie fees. For example in La Quinta Corp. v. Heartland Props. LLC (6th Cir. 2010) the clause stated:

[i]f the inn ceases to be operated under the system for any reason … Licensee shall pay [Baymont] within 30 days following the effectiveness of such event, as “liquidated damages” (to compensate [Baymont] for lost revenues in an amount difficult to ascertain, and not as a penalty) an amount equal to 100% of the aggregate recurring fees which accrued with respect to inn operations during the immediately preceding 36 full calendar months.

The Court stated that the thirty-six-month formula, based on recurring fees that actually accrued, was at the time of contracting not an arbitrary calculation, but a “reasonable forecast” of the damages Baymont would sustain in the event of Heartland’s breach. The formula was based on common business practices and the parties’ recent historical performance under the license agreement, resulting in ascertainable losses in the event of breach.

In Days Inn Worldwide, Inc. V. Yamuma Kunj LLC (District of New Jersey, 2015) the Court refused to enforce a provision for 8 years of recurring fees:

Calling a figure “actual damages” does not make it so…I find that the $199,808.15 sum claimed by DIX is grossly disproportionate to the actual damages resulting from Yamuna’s breach. DIW has not established that Recurring Fees would have been similar for the next eight years. DIW has not established that it made any efforts to, for example, find a replacement licensee, or otherwise mitigate its projected “actual damages.”… To enforce Section 4 for the unexpired eight years of a fifteen year agreement would be excessive. It amounts to a license for DIW to sit on its hands and extract its full measure of profit from a failed business…. DIW’s calculation is excessive for another reason. In accelerating eight years of future payments, Days Inn does not discount them to present value. And on top of that, it actually seeks interest, running from November 2, 2011, on future payments, which, but for the default, would not have even come due until years in the future. That does not line up with any reasonable expectation of profit that DIW may have had when it entered into the agreement.

Consider this approach to the liquidated damages issue by the Utah Supreme Court in Commercial Real Estate v Comcast of Utah 285 P. 3d 1193 (2012):

We now hold that liquidated damages clauses should be reviewed in the same manner as other contractual provisions. “Persons dealing at arm’s length are entitled to contract on their own terms without the intervention of the courts for the purpose of relieving one side or the other from the effects of a bad bargain.”… “It is not our prerogative to step in and renegotiate the contract of the parties.” … Instead, unless enforcement of a liquidated damages clause would be unconscionable, “we should recognize and honor the right of persons to contract freely and to make real and genuine mistakes when the dealings are at arms’ length.”… liquidated damages clauses are not subject to any form of heightened judicial scrutiny. Instead, courts should begin with the longstanding presumption that liquidated damages clauses are enforceable… A party may challenge the enforceability of a liquidated damages clause only by pursuing one of the general contractual remedies, such as mistake, fraud, duress, or unconscionability.

Here is a Liquidated Damages Question. Please think about this and we will discuss it after Lake River.

Next Monday we will move on to Hadley v Baxendale. And, with respect to consequential damages please note this language from the Uber US Terms of Use:

LIMITATION OF LIABILITY.
UBER SHALL NOT BE LIABLE FOR INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE, OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS, LOST DATA, PERSONAL INJURY, OR PROPERTY DAMAGE RELATED TO, IN CONNECTION WITH, OR OTHERWISE RESULTING FROM ANY USE OF THE SERVICES, REGARDLESS OF THE NEGLIGENCE (EITHER ACTIVE, AFFIRMATIVE, SOLE, OR CONCURRENT) OF UBER, EVEN IF UBER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
UBER SHALL NOT BE LIABLE FOR ANY DAMAGES, LIABILITY OR LOSSES ARISING OUT OF: (i) YOUR USE OF OR RELIANCE ON THE SERVICES OR YOUR INABILITY TO ACCESS OR USE THE SERVICES; OR (ii) ANY TRANSACTION OR RELATIONSHIP BETWEEN YOU AND ANY THIRD PARTY PROVIDER, EVEN IF UBER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. UBER SHALL NOT BE LIABLE FOR DELAY OR FAILURE IN PERFORMANCE RESULTING FROM CAUSES BEYOND UBER’S REASONABLE CONTROL. YOU ACKNOWLEDGE THAT THIRD PARTY PROVIDERS PROVIDING TRANSPORTATION SERVICES REQUESTED THROUGH SOME REQUEST PRODUCTS MAY OFFER RIDESHARING OR PEER-TO-PEER TRANSPORTATION SERVICES AND MAY NOT BE PROFESSIONALLY LICENSED OR PERMITTED.

Week 5: September 11-15 I hope you’re all in a safe place for the hurricane. When classes resume we will begin with the material I assigned for week 4 (i.e. to page 108).

Here is a note on liquidated damages:
In construction contracts a clause may specify an amount to be paid per day where completion of construction is delayed. In Boone Coleman Construction, inc. v. Village of Piketon in 2016 the Ohio Supreme Court wrote:

the benefits of liquidated-damages provisions in building and construction contracts are well documented…. The provisions create firm expectations and allow the parties to allocate damages caused by delays in completing construction.. The ability to agree about damages is particularly important in public-works-construction contracts because “[i]t is uniquely difficult to calculate damages to the general public interest caused by a contractor’s breach of its agreement to provide public improvements.”

The Court noted that cases suggest that a per diem amount seems more like liquidated damages than a lump sum (which might look like a penalty).

In franchise agreements it is common to have a liquidated damages provision for payment of some multiple of the franchsie fees. For example in La Quinta Corp. v. Heartland Props. LLC (6th Cir. 2010) the clause stated:

[i]f the inn ceases to be operated under the system for any reason … Licensee shall pay [Baymont] within 30 days following the effectiveness of such event, as “liquidated damages” (to compensate [Baymont] for lost revenues in an amount difficult to ascertain, and not as a penalty) an amount equal to 100% of the aggregate recurring fees which accrued with respect to inn operations during the immediately preceding 36 full calendar months.

The Court stated that the thirty-six-month formula, based on recurring fees that actually accrued, was at the time of contracting not an arbitrary calculation, but a “reasonable forecast” of the damages Baymont would sustain in the event of Heartland’s breach. The formula was based on common business practices and the parties’ recent historical performance under the license agreement, resulting in ascertainable losses in the event of breach.

In Days Inn Worldwide, Inc. V. Yamuma Kunj LLC (District of New Jersey, 2015) the Court refused to enforce a provision for 8 years of recurring fees:

Calling a figure “actual damages” does not make it so…I find that the $199,808.15 sum claimed by DIX is grossly disproportionate to the actual damages resulting from Yamuna’s breach. DIW has not established that Recurring Fees would have been similar for the next eight years. DIW has not established that it made any efforts to, for example, find a replacement licensee, or otherwise mitigate its projected “actual damages.”… To enforce Section 4 for the unexpired eight years of a fifteen year agreement would be excessive. It amounts to a license for DIW to sit on its hands and extract its full measure of profit from a failed business…. DIW’s calculation is excessive for another reason. In accelerating eight years of future payments, Days Inn does not discount them to present value. And on top of that, it actually seeks interest, running from November 2, 2011, on future payments, which, but for the default, would not have even come due until years in the future. That does not line up with any reasonable expectation of profit that DIW may have had when it entered into the agreement.

Consider this approach to the liquidated damages issue by the Utah Supreme Court in Commercial Real Estate v Comcast of Utah 285 P. 3d 1193 (2012):

We now hold that liquidated damages clauses should be reviewed in the same manner as other contractual provisions. “Persons dealing at arm’s length are entitled to contract on their own terms without the intervention of the courts for the purpose of relieving one side or the other from the effects of a bad bargain.”… “It is not our prerogative to step in and renegotiate the contract of the parties.” … Instead, unless enforcement of a liquidated damages clause would be unconscionable, “we should recognize and honor the right of persons to contract freely and to make real and genuine mistakes when the dealings are at arms’ length.”… liquidated damages clauses are not subject to any form of heightened judicial scrutiny. Instead, courts should begin with the longstanding presumption that liquidated damages clauses are enforceable… A party may challenge the enforceability of a liquidated damages clause only by pursuing one of the general contractual remedies, such as mistake, fraud, duress, or unconscionability.

Here is a Liquidated Damages Question. Please think about this and we will discuss it after Lake River.

For the third class, whenever that will be please read to page 115.

With respect to consequential damages please note this language from the Uber US Terms of Use:

LIMITATION OF LIABILITY.
UBER SHALL NOT BE LIABLE FOR INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, PUNITIVE, OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS, LOST DATA, PERSONAL INJURY, OR PROPERTY DAMAGE RELATED TO, IN CONNECTION WITH, OR OTHERWISE RESULTING FROM ANY USE OF THE SERVICES, REGARDLESS OF THE NEGLIGENCE (EITHER ACTIVE, AFFIRMATIVE, SOLE, OR CONCURRENT) OF UBER, EVEN IF UBER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
UBER SHALL NOT BE LIABLE FOR ANY DAMAGES, LIABILITY OR LOSSES ARISING OUT OF: (i) YOUR USE OF OR RELIANCE ON THE SERVICES OR YOUR INABILITY TO ACCESS OR USE THE SERVICES; OR (ii) ANY TRANSACTION OR RELATIONSHIP BETWEEN YOU AND ANY THIRD PARTY PROVIDER, EVEN IF UBER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. UBER SHALL NOT BE LIABLE FOR DELAY OR FAILURE IN PERFORMANCE RESULTING FROM CAUSES BEYOND UBER’S REASONABLE CONTROL. YOU ACKNOWLEDGE THAT THIRD PARTY PROVIDERS PROVIDING TRANSPORTATION SERVICES REQUESTED THROUGH SOME REQUEST PRODUCTS MAY OFFER RIDESHARING OR PEER-TO-PEER TRANSPORTATION SERVICES AND MAY NOT BE PROFESSIONALLY LICENSED OR PERMITTED.

Take Care.

Week 4: September 4-8 Monday is Labor Day so we don’t have class. I hope you enjoy the weekend. Here is a Note on Neri.

With respect to question 4 on page 47, here are examples of two different approaches to the issue raised in the question:
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..

In contrast, in Peace River Seed Co-op. v Proseeds Mktg. (Oregon Supreme Court 2014), the court said that the plaintiff was entitled to recover its market price damages, even if those damages exceeded plaintiff’s resale price damages.

I said I would provide links to questions I wrote at this stage of the course in the past:

2015: September 7-11 hypo (Memo on the September 7-11 Hypo)

2016: Labor Day Hypo (Memo on the September hypo)

I’d recommend not looking at the memos until after you have thought about how you would answer the questions. If you have questions please see me in office hours next week or make an appointment to meet with me.

Soon I will provide a new question (with no memo) and invite you to send me a short written answer if you would like feedback.

Next Wednesday I will pick up where we left off. Note this comment of Reuben Hasson on Lord Denning (cf. Note 5 on page 84 of the Casebook):

The attempts made over the years to thrust greatness on Lord Denning fail. From 1970 until his retirement in 1982, I do not think he deserved even to be called a good judge.”

Please read to page 95 for Wednesday and to page 108 for Thursday.

Week 3: August 28-September 1 On Monday we will finish discussion of the hypos on page 47 and the one I posted to the blog. Some of the questions you have about the operation of the UCC Art. 2 remedies are questions it makes sense to think about a bit later on (e.g. the question of what may be claimed as incidental damages). So we will cover the issues directly raised by the hypos in class and then move on to Parker v Twentieth Century Fox. If you have other questions arising out of these hypos that you would like to discuss now I would be happy to do that in person after class or in office hours or by email.

With respect to Parker I wrote before: Notice that the actor in this case is Shirley MacLaine. Parker is her husband’s family name.

The authors of the Casebook we are using spend a lot of time explaining their perspective on contract law. Here is another take on why the perspective a casebook adopts matters. It is from Mary Joe Frug, Re-Reading Contracts: A Feminist Analysis of a Contracts Casebook, 34 Am. U. L. Rev 1065 (1984-5) at p. 1069:

I do not believe that a casebook is simply a neutral reflection of what students need to know to practice law, to pass the bar, to think like lawyers, or to become law teachers. I maintain that, even within the constraints of professional necessity,’ editors have a wide range of choice in their case selections, their comments, their notes, their problems, and their questions, and the choices they make are not inevitable. The choices could be different and, indeed, choices about content do differ among casebooks within particular subject areas. I also believe that a casebook is a powerful document. The editorial choices within a casebook determine how many readers think about the law of a doctrinal area, about lawyering in that field, about clients, and about legal reasoning… Because a casebook has such power, and because its contents are subject to editorial choice, analyzing the biases of a particular casebook could challenge the effect of the casebook on its readers.

In the article, Frug critiques the treatment of the Parker case in the casebook she is discussing (not the one we are using) because it does not encourage the reader to think about the issues the authors of our casebook raise with respect to Shirley Maclaine’s likely preference for the Bloomer Girl project. At p. 1125 of the article, Frug writes:

Understanding MacLaine as a powerful actress whose feminist politics are respected by the California Supreme Court could also stimulate readers to draw connections between social contexts and legal decisions, between the experiences of parties in a case and the experiences of readers themselves.

You may be interested in this list of Fierce Female Roles in Westerns.

In 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.

After Parker we will move on to Neri, so please read to page 74 for Wednesday’s class. In thinking about Neri you should focus on the interaction of UCC §2-718 and §2-708. Please read the provisions very carefully. It’s a more complicated interaction than you may expect (and this is where we can think in more detail about incidental damages and overhead). Think about how the court calculates the dollar number for damages. Would there be a different calculation that would make sense given the drafting of the relevant UCC provisions?

For Thursday please read to page 85.

The week after next we will only have 2 classes because of Labor Day. If you want to read ahead I would expect to cover Copylease and Lake River and perhaps also have some discussion of Hadley v Baxendale. I also plan to be giving you by Friday September 1 an example of a hypothetical that puts together a number of the issues we have focused on so far.

August 21: You may be interested in this post on the Technology & Marketing Law Blog on the 2nd Circuit decision in Meyer v Uber.

Week 2: August 21-25: I moved the material that was previously on this page to the archive page.

Here is a link to the Second Circuit’s Judgement in Meyer v Uber & Kalanick (Meyer v Uber pdf)(HTML), published on August 17th. As I said on Thursday, the Court uses the Specht v Netscape test (reasonably conspicuous notice of the existence of the terms and unambiguous manifestation of assent to the terms) to reach a different result from the result in the District Court. The Court says:

…when considering the perspective of a reasonable smartphone user, we need not presume that the user has never before encountered an app or entered into a contract using a smartphone. Moreover, a reasonably prudent smartphone user knows that text that is highlighted in blue and underlined is hyperlinked to another webpage where additional information will be found… Turning to the interface at issue in this case, we conclude that the design of the screen and language used render the notice provided reasonable as a matter of California law.

The Court notes that the link to the terms and conditions was spatially coupled with the mechanism for assent, the register button, and that it was temporally coupled in that the customer saw it at the same time. The Court said:

We think that a reasonably prudent smartphone user would understand that the terms were connected to the creation of a user account. That the terms of service were available only by hyperlink does not preclude a determination of reasonable notice.

The location of the arbitration agreement within the terms was not a barrier to reasonable notice, and, with respect to assent, it was not express but the Court was “convinced that it was unambiguous in light of the objectively reasonable notice of the terms.” A reasonable user would know that by clicking the register button he was agreeing to the terms even though he didn’t click on the hyperlink. The Court also said:

The transactional context of the parties’ dealings reinforces our conclusion. Meyer located and downloaded the Uber App, signed up for an account, and entered his credit card information with the intention of entering into a forward – looking relationship with Uber. The registration process clearly contemplated some sort of continuing relationship between the putative user and Uber, one that would require some terms and conditions, and the payment screen provided clear notice that there were terms that governed that relationship.

On Monday we will run through the loan examples at the end of the introduction document. Then we will move on to the material I originally assigned for last Thursday: Please read pages 1-29 of the Casebook. I will comment on this section briefly in class, but we will not go over these pages in detail in class at this point…. please read pages 31-44. When the Casebook refers to provisions of UCC Article 2 (e.g. at the top of page 43) or to the Restatement you should look at the relevant provisions (by look at I mean read carefully). Be prepared to discuss the questions on pages 43-44.

Please also read pages 45-47 (and focus on the hypothetical on page 47).

Here are two different approaches to the issue raised in the question:
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..

In contrast, in Peace River Seed Co-op. v Proseeds Mktg. (Oregon Supreme Court 2014), the court said that the plaintiff was entitled to recover its market price damages, even if those damages exceeded plaintiff’s resale price damages.

Also think about this hypothetical:

Alpha, a painter, contracts to sell a painting to Beta for $10,000. The painting is to be delivered to Beta on September 30th and Alpha has hired Deltaco, a firm which specializes in fine art deliveries, to carry out the delivery for $500 (the terms of the delivery contract allow Alpha to cancel delivery on 48 hours’ notice). On September 20th Beta calls Alpha and says that the client who had been intending to buy the painting from Beta had changed her mind because she was getting divorced. Beta did not have any other clients who would be interested in buying Alpha’s painting and therefore did not want Alpha to deliver the painting. Alpha cancels the delivery contract. On September 22nd Gamma offers to pay Alpha $9,500 for the painting. If Alpha accepts Gamma’s offer what damages can Alpha obtain from Beta?

It is likely that discussing the hypotheticals will take us through most if not all of Wednesday’s class as well as Monday’s, but please read to page 61 for Wednesday in case we are able to begin thinking about Parker v Twentieth Century Fox. Whether or not we begin discussing this case on Wednesday we will be spending Thursday’s class on this case.

Notice that the actor in this case is Shirley MacLaine. Parker is her husband’s family name.

The authors of the Casebook we are using spend a lot of time explaining their perspective on contract law. Here is another take on why the perspective a casebook adopts matters. It is from Mary Joe Frug, Re-Reading Contracts: A Feminist Analysis of a Contracts Casebook, 34 Am. U. L. Rev 1065 (1984-5) at p. 1069:

I do not believe that a casebook is simply a neutral reflection of what students need to know to practice law, to pass the bar, to think like lawyers, or to become law teachers. I maintain that, even within the constraints of professional necessity,’ editors have a wide range of choice in their case selections, their comments, their notes, their problems, and their questions, and the choices they make are not inevitable. The choices could be different and, indeed, choices about content do differ among casebooks within particular subject areas. I also believe that a casebook is a powerful document. The editorial choices within a casebook determine how many readers think about the law of a doctrinal area, about lawyering in that field, about clients, and about legal reasoning… Because a casebook has such power, and because its contents are subject to editorial choice, analyzing the biases of a particular casebook could challenge the effect of the casebook on its readers.

In the article, Frug critiques the treatment of the Parker case in the casebook she is discussing (not the one we are using) because it does not encourage the reader to think about the issues the authors of our casebook raise with respect to Shirley Maclaine’s likely preference for the Bloomer Girl project. At p. 1125 of the article, Frug writes:

Understanding MacLaine as a powerful actress whose feminist politics are respected by the California Supreme Court could also stimulate readers to draw connections between social contexts and legal decisions, between the experiences of parties in a case and the experiences of readers themselves.

You may be interested in this list of Fierce Female Roles in Westerns.

In 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.

Have a good weekend!

August 21: You may be interested in this post on the Technology & Marketing Law Blog on the 2nd Circuit decision in Meyer v Uber.

August 1, 2017: Assignment for the first class on Monday 14 August:
Read the Introduction to Contracts and Uber US Terms of Use

We will need at least 2 classes to cover this material. The basic plan for the semester is to read and discuss the casebook in the casebook order. Sometimes I will provide additional materials or questions on this blog, and I will also use the blog to provide guidance on how quickly we are likely to cover the material.

Here are the Class Policies. Please read this document before the first class.

I will also be asking you to send me some information about yourselves. I have a new assistant who will begin work on August 7th, and I will post instructions on how to send your information after she begins work.

Added August 10th.

Week 1: August 14-18
By close of business (for the avoidance of doubt, this is 5.00pm eastern time) on Monday August 14 please send an email (subject line: Bradley Contracts Class) to my assistant, Caridad Dalama, at cxd748@law.miami.edu describing two facts you would like me to know about you.

In class on Monday we will begin to work with the materials I assigned above:
Introduction to Contracts and Uber US Terms of Use (and here’s a link to a pdf version of Uber US Terms of Use 2017) (I found it difficult to print the online version).

First, please focus on footnote 4 on page 2 of the Introduction. We won’t be spending much time on fraud during this semester, but I’d like to begin by thinking a bit about this legal test. If you want to sue someone for fraud you need to establish all of these elements.

After discussing fraud for a bit we will discuss the Uber case. One thing to look for when you read the judgment is the legal test the judge applies in this case.

[August 12: A couple of people have told me that they could not access the article in note 16 of the Introduction. I am sorry about this. You could try instead looking at this article on the same topic from the Chicago Tribune.]

On Wednesday we will carry on working through the Introduction and we will also focus on the Uber Terms of Use. Note that these terms are dated March 2017 after the decision in the case.

Before class on Thursday please read pages 1-29 of the Casebook. I will comment on this section briefly in class, but we will not go over these pages in detail in class at this point. For class on Thursday please read pages 31-44. When the Casebook refers to provisions of UCC Article 2 (e.g. at the top of page 43) or to the Restatement you should look at the relevant provisions (by look at I mean read carefully). Be prepared to discuss the questions on pages 43-44.

Please also read pages 45-47. Also think about this hypothetical:

Alpha, a painter, contracts to sell a painting to Beta for $10,000. The painting is to be delivered to Beta on September 30th and Alpha has hired Deltaco, a firm which specializes in fine art deliveries, to carry out the delivery for $500 (the terms of the delivery contract allow Alpha to cancel delivery on 48 hours’ notice). On September 20th Beta calls Alpha and says that the client who had been intending to buy the painting from Beta had changed her mind because she was getting divorced. Beta did not have any other clients who would be interested in buying Alpha’s painting and therefore did not want Alpha to deliver the painting. Alpha cancels the delivery contract. On September 22nd Gamma offers to pay Alpha $9,500 for the painting. If Alpha accepts Gamma’s offer what damages can Alpha obtain from Beta?

Added August 15th: 3 Fraud Hypos (we discussed the first of these on Monday, I do not propose to discuss the others in class).