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By Dave Hoffman

Article Stub: Contracting into Federal Common Law

 

[I'm writing a series of posts I call article stubs - the germs of papers I'll likely never write. Here was the first, finding offerors under 2-207. Dan Markel might - or more likely might not - approve. I used to talk about these pre-draft ideas with him, and he mercifully steered me off most of them before they saw the light of day. In his honor, here's another bad idea. Feel free to tell me so.]

“There is no general federal common law.” We all know it, even though we sometimes, wrongly, qualify the statement “…in diversity cases.”  Though the decision’s constitutional roots are at best obscure, Erie teaches us that federal judges can’t create substantive rules of decision without constitutional or statutory sources. It’s an iconic case – and an ironic one, as it might be an example of the roving lawmaking that it abjures.

But what if you generally liked that set of precedents that followed Swift and preceded Erie?  What if you, as Justice Swayne once did, proudly hold that “We shall never immolate truth, justice, and the law, because a state tribunal has erected the altar and decreed the sacrifice.” What if you just wanted to empower federal judges hearing your contracts case to resort to their own intuitions – guided, no doubt, by the informed views of other federal courts.  Could you contract into a general federal common law framework? Under traditional conflicts principles, the answer is likely “no.”  See Restatement 187 cmt. f (“The forum will not, for example, apply a foreign law which has been chosen by the parties in the spirit of adventure or to provide mental exercise for the judge. Situations of this sort do not arise in practice.” ) But traditional conflicts principles needlessly discourage innovation and now motivate parties to choose  arbitration (where they can benefit ex ante by giving ex post discretion to decisionmakers.) Courts should accept a wider range of choice of law clauses, and should start by permitting parties to opt out of Erie.

Discuss.

 

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Article Stub: Finding Offerors under 2-207

[I'm planning to write a series of posts I'll call article stubs - the germs of papers I'll likely never write. Dan Markel might - or more likely might not - approve. I used to talk about these pre-draft ideas with him, and he mercifully steered me off most of them before they saw the light of day. In his honor, here's a bad idea. Feel free to tell me so.]

 

UCC 2-207, the battle-of-the-forms provision, is famously a mess.  White and Summers describe it as “an amphibious tank that was originally designed to fight in swamps, but was sent to fight in the desert.” That’d be even more accurate if you replaced “tank” with “Ford Pinto.”  Complexities about.  (Check out this fabulous flowchart produced by one of my students, which provides one path through the maze.) But even if you work  your way through the various intricacies of the provision, resolving debates about the meaning of “expressly made conditional,” and the “knock-out rule,” a deep policy problem lurks: who, exactly, is the offeror?

The question is important because, although the provision was designed to account for a flurry of forms, it clearly privileges those forms which come first-in-time, typically finding the first mover to be an offeror. Unfortunately for the second mover (which can be a nano-second slower online) the merchant offeree’s additional terms are incorporated into the contract only if they are immaterial. Most terms that you’d care to litigate about are material. Summers and White point out that avoiding first form favoritism is an important policy goal, but proceed by privileging that first form as the offer anyway.  (See the 4th edition of their Hornbook, p. 32, n.3)  We can see the importance of the choice clearly by pairing Hill (offeror is the firm) with Klocek (offeror is the consumer). But the cases stand uneasily against each other, because the key analytic move (who goes first and why) is buried — to be fair, less so in Klocek than in Hill. (I’m sweeping broadly here, and avoiding knock-out complications.)

At some level, this confusion is unavoidable – 2-207 is a badly drafted mess.  But in particular here, the problem is that although important consequences flow from making one or the other party the offeror, the Code provides no guidance in making that choice – it doesn’t even use the word offeror in the section.  Doctrine would be marginally  more clear if we made the decision as to who is the offeror explicitly a policy choice. Courts might, for example, make sellers offerors because they bear default liability burdens (warranty, nondelivery) under the UCC. Or courts could empower buyers because they typically initiate transactions, thereby spurring commerce.  Or make the choice depend on some kind of rough information-forcing default allocation.  The key realization is that 2-207 buries the lede, and that courts which simply follow the provision leave us in the dark.

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Evolving Contract Schemas

With co-authors, I’ve been working on a series of experimental papers about contract law that appear to be converging on a theme: what individuals think “contract” means has purchase in the real-world, and that contractual schema is evolving.

A schema is nothing more than a mental model – a framework – to help us organize and process information. A contract schema is the set of background assumptions that we fill in when we think about a legally operative bargain. For those of us who grew up in a largely off-line world, our contract schema involve “doing the paperwork,” “getting it in writing,” and “signing on the dotted line.” (See this article for details). Indeed although most contracts law professors make fun of the metaphor of meeting of the minds, it captures a real heuristic for a certain segment of society. That so even though form contracts have been part of modern life since the 50s, and almost none of of ever actually negotiate contracts that could end up in court. Indeed, when I started teaching in 2004, students routinely would say “she signed it, she must be bound to it,” even in cases like Specht.  Since this mental model is quite a ways from the reality of online contract, consumers may think they are in contracts when they aren’t, and visa versa.

But what happens when contracts widely explored in pop culture – and presented to you in your formative years – were never signed, never reduced to writing, never negotiated.  The cheerios arbitration debacle, facebook’s demystified terms, your cellphone contract, your cable company’s impossible-to-escape relationship.  What happens when every time you think “contract,” you don’t call up the mental image of a “signature on vellum” but instead “loki on steroids.”  And when companies, realizing this, increasingly pushed “no contract” plans that were actually contracts, just without penalty clauses attached.

Perhaps citizens born after 1980 will have dramatically different attitudes toward contract than those born before. If that’s true, we’ll increasingly find cohort effects in contracting behavior online, as lay intuitions about how to respond to “contract” increasingly turn on the age of the promisee. For those coming of age offline, “click to agree” calls up memories of signature, and consequently infuses bargains with personal honor; for those born digital, “click to agree” means “nothing good is about to happen to me.” Those attitudes toward contract will play out in behavior – in likelihood to breach, to shirk, and to behave opportunistically.

At some point we expect to have direct evidence worth sharing in support of this argument! For now, I thought start discussion by fast forwarding fifteen years, when many judges born in the digital age will have assumed the bench. What changes in contract doctrine follow from changes in contract’s schema? Then again, will there be any contract cases left to decide, or will they all been sucked into arbitration’s black hole?

 

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Dan Markel, My Friend

Dan Markel had many friends.  You, the reader, know that if you have been surfing any of the law professor blogosphere, which is full of tributes, notes of gratitude and sadness, and a residue of shock and disbelief.  Indeed, Dan Markel knew more legal academics - by which I mean he had more meaningful conversations and was actually friends with more people - than anyone in the country. Everyone knew him or had a story about him. Even in conversations he wasn’t a part of, at conferences he’d never attended, he was a common point of reference. He was our Kevin Bacon.

I’ve been friends with Dan since law school. He gave me comments on my first paper.  They were tough (“why are you writing a 25 page literature review that no one, including you, will care to read”) but right. And he gave me tough comments on my second paper. Again, he was right.  And my third paper. And my fourth. He didn’t stop when it become obvious that he was also giving hours of time weekly to literally dozens of other people’s work, when he was blessed with two young sons, when he built an active intellectual life at FSU, when he undertook a brutal travel schedule. He gave of himself despite writing scores of articles (and books and op-eds and drafts and more articles) of his own. His unselfishness and rigor were daunting. Where did he find the time? The energy?

But I couldn’t help but keep asking for his help, because no one gave comments like Dan Markel. He wanted to get your arguments right – and he wanted you to write the best version of yourself possible. On the Prawfs thread, I laughed to read a comment that someone can’t help but remember him asking if she had written a “puzzle paper or a problem paper.” Take heart! He thought the third option was not worth your effort. Dan never let you be lazy, and he was a celebrant when you hit a home run. Or even a double. And getting comments from Dan meant giving comments to Dan, which usually involved reading long articles with surprising payoffs, or getting an email and reading just a few pages where Dan had cited your work and wanted to be sure he’d done it justice. Dan attacked his own work like he worked on yours — unsentimentally, methodically, tirelessly, approaching greatness.

Dan reached out constantly.  As I wrote on twitter (which he hated and which he told me I was wasting my time on), in the 17th century, he’d have been Pepys.  In the 19th century, he’d have been a famous letter writer (and romantic poet!)  In the 20th century, he’d have spent most of his income on long-distance phone calls. As it was, I -and many others-got regular calls from him, resulting in a conversation on one of his long walks, or on the way to pick up his boys from day care, or just on a drive.  In each of those conversations he was open & seemingly without that part...

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Introducing Guest Blogger Brishen Rogers

I’m delighted to welcome Brishen Rogers (Temple) as a guest blogger for the next month.  Brishen teaches torts, employment discrimination, and a seminar on current issues in labor law. Prior to joining the Temple faculty, Professor Rogers was a Climenko Fellow and Lecturer on Law at Harvard Law School.

Professor Rogers’ scholarship draws on the social sciences and liberal political theory to better understand the role of law in constituting and regulating paid work relationships, with a particular focus on issues of concern to low-wage workers.  One current project explores the role of law and social norms in shaping workers’ preferences towards unionization; another explores the proper role for minimum workplace entitlements in an egalitarian liberal state.  His work has been published in the Harvard Law Review Forum, and the Berkeley Journal of Employment and Labor Law, among others.

Professor Rogers received his J.D., cum laude, from Harvard Law School and his B.A., with high distinction from the University of Virginia.  Prior to law school, he worked as a community organizer promoting living wage policies and affordable housing, and spent several years organizing workers as part of SEIU’s “Justice for Janitors” campaign.  Welcome Brishen!

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