Law Commons^™

Controlling Moral Hazard In Limited Liability With The Consumer Sales Practices Act, Nathaniel Vargas Gallegos

Journal of Legislation

The few states that have passed the Model Consumer Sales Practices Act have common definitions and case law regarding the definition of a “supplier.” This definition is broad enough to include managers of companies in limited liability entities in the states that have adopted the model act. The practicality is that business principals, owners, and managers can be held personally liable for deceptive practices under the state acts. But this is not a piercing of the corporate veil or of the limited-liability company. This Article is meant to accomplish four purposes: (1) exhibit the origins of the act, (2) show …

An Introduction To Personal Growth Bets: Using Contract Law To Lose Weight And Quit Smoking, Max Raskin, Jack Millman

Notre Dame Journal on Emerging Technologies

Self-improvement is hard. Whether losing weight or quitting smoking, individuals have a difficult time honoring their commitments, especially if the only person they are disappointing is themselves. In this Article, we introduce a new legal mechanism for incentivizing personal growth. We describe this mechanism as a personal growth contract, which allows an individual to make an enforceable agreement with either a counterparty or himself with the aim of self-improvement. We propose the use of smart contracts to help execute unilateral personal growth contracts. Our conclusion is that personal growth contracts should be presumptively legal, provided they do not violate some …

A Prophylactic Approach To Compact Constitutionality, Katherine Mims Crocker

Notre Dame Law Review

From COVID-19 to climate change, immigration to health insurance, firearms control to electoral reform: state politicians have sought to address all these hot-button issues by joining forces with other states. The U.S. Constitution, however, forbids states to “enter into any Agreement or Compact” with each other “without the Consent of Congress,” a requirement that proponents of much interstate action, especially around controversial topics, would hope to circumvent.

The Supreme Court lets them do just that. By interpreting “any Agreement or Compact” so narrowly that it is difficult to see what besides otherwise unlawful coordination qualifies, the Court has essentially read …

Specific Performance: On Freedom And Commitment In Contract Law, Hanoch Dagan, Michael Heller

Notre Dame Law Review

When should specific performance be available for breach of contract? This question—at the core of contract—divides common-law and civil-law jurisdictions and it has bedeviled generations of comparativists, along with legal economists, historians, and philosophers. Yet none of these disciplines has provided a persuasive answer. This Article provides a normatively attractive and conceptually coherent account, one grounded in respect for the autonomy of the promisor’s future self. Properly understood, autonomy explains why expectation damages should be the ordinary remedy for contract breach. This same normative commitment justifies the “uniqueness exception,” where specific performance is typically awarded, and the personal services exclusion, …

Contract's Convert Meddlers, Sarah Winsberg

Notre Dame Law Review

Scholars of contract law typically examine contracts as bargains between two parties. This approach elides an additional, key function of many contracts: to shape existing relationships to the satisfaction of a third party, often one more economically powerful than either of the two bargainers. Third-party litigants, especially creditors, have historically advocated for their own interests and interpretive paradigms so strongly that they have sometimes gained priority over the actual intentions of the two bargainers.

This Article recovers the story of how a group of frequent-flier third parties—mainly creditors of small businesses—shifted the rules of contracts between partners in early America. …

The Impending Collision Of Smart Contracts And The Automatic Stay, Carter D. Wietecha

Notre Dame Law Review

This Note begins by briefly examining the nature and function of smart contracts, including how they have changed over time. Next, it evaluates the relevant language of Code provisions dealing with the automatic stay and discusses decisions treating the interaction of early generation smart contracts with the automatic stay. It concludes with a discussion of how the Supreme Court’s recent decision in City of Chicago v. Fulton has significantly changed the legal landscape for smart contracts and how the automatic stay will likely interact with smart contracts in the near future.

Contracts Without Courts Or Clans: How Business Networks Govern Exchange, Sadie Blanchard

Journal Articles

Legal scholars have long recognized the close-knit community as an alternative institution for supporting trade when contract law and trusted courts are unavailable. But recent research suggests that another option may be available: heterogeneous business networks. What’s interesting is that these networks lack features traditionally seen as essential to community-supported trade. In particular, they lack preexisting noncommercial social ties that allow reliable and trusted information to spread at low cost, make exiting the network difficult, and enable coordinated sanctioning of cheaters. As a result, some leading scholars doubt that these networks are doing the work of sustaining cooperation. This Article …

Forum Selection Clauses, Non-Signatories, And Personal Jurisdiction, John F. Coyle, Robin J. Effron

Notre Dame Law Review

Who is bound by a forum selection clause? At first glance, the answer to this question may seem obvious. It is black letter law that a person cannot be bound to an agreement without her consent. In recent years, however, courts have not followed this rule with respect to forum selection clauses. Instead, they routinely enforce these clauses against individuals who never signed the contract containing the clause. Courts justify this practice on the grounds that it promotes litigation efficiency by bringing all of the litigants together in the chosen forum. There are, however, problems with enforcing forum selection clauses …

Property Rights In Children, Barry E. Adler, Alexis A. Alvarez

Notre Dame Law Review

In 1978, Dr. Elisabeth Landes and then-Professor, later-Judge Richard Posner, published The Economics of the Baby Shortage. The article openly discussed how economic analysis can address the allocation of babies available for adoption. The ideas expressed in the article were widely denounced as an inhumane commodification of children, something tolerable only in the twisted minds of academic authors. Despite the backlash, an odd thing happened in the more than four decades since Landes and Posner wrote on this topic: their ideas began to take hold. Today, almost all states in the United States permit, in some form, the contractual …

Conscience And Justice In Equity: Comments On Equity: Conscience Goes To Market, Paul B. Miller

Journal Articles

This short essay introduces and engages several philosophical questions raised by Irit Samet’s Equity: Conscience Goes to Market. Amongst other things, it addresses questions going to: the proper scope of equity; the relationship between equity’s remedial and supplemental functions; whether, and if so, to what extent equity promotes compliance with moral obligations; what, if any, moral aims animate equitable intervention; and whether, and if so, how, equity is distinctively concerned with matters of conscience and “particular” justice. All the while, I express appreciation for Samet’s project while raising some doubts about her views on how law and equity divide labor …

The Current Predatory Nature Of Land Contracts And How To Implement Reforms, Stacy Purcell

Notre Dame Law Review

Because land contracts are frequently inequitable, advocates and legislators have called for enhanced regulation. This Note examines the imbalance of power between sellers and buyers during the formation of land contracts, the ways the law has attempted to lessen the inequality, and how to implement potential reforms. Part II discusses the history of land contracts and their recent resurgence since the 2008 housing crash. Part III explains that while current land contracts are often predatory, land contracts could potentially be a useful way for low-income individuals to become homeowners. Part IV outlines proposed national and state reforms. Part V makes …

The Legality Of Class Action Waivers In Employment Contracts, Benjamin M. Redgrave

Notre Dame Law Review

This Note attempts to bring clarity to the questionable legality of class action waivers in employment contracts by examining the two competing statutes at issue—the National Labor Relations Act (NLRA) and the Federal Arbitration Act (FAA)—the Supreme Court’s cases on the issue, and the arguments for and against such waivers advanced by the Second, Fifth, Seventh, Eighth, and Ninth Circuits, which have all directly addressed the question. After providing an overview of these two statutes, the agency that administers the NLRA, and the evolution of the Supreme Court’s jurisprudence on the topic, this Note discusses the Supreme Court’s most recent …

Incorporating Legal Claims, Maya Steinitz

Notre Dame Law Review

Recent years have seen an explosion of interest in commercial litigation funding. Whereas the judicial, legislative, and scholarly treatment of litigation finance has regarded litigation finance first and foremost as a form of champerty and sought to regulate it through rules of legal professional responsibility (hereinafter, the “legal ethics paradigm”), this Article suggests that the problems created by litigation finance are all facets of the classic problems created by “the separation of ownership and control” that have been a focus of business law since the advent of the corporate form. Therefore, an “incorporation paradigm,” offered here, is more appropriate. “Incorporating …

Compliance With Most Favored Customer Clauses: Giving Meaning To Ambiguous Terms While Avoiding False Claims Act Allegations, Mitchell S. Ettinger, James C. Altman

Notre Dame Law Review Reflection

Federal and state contracting authorities more frequently are including Most Favored Customer (MFC) clauses in contracts for procurement of privately manufactured products. These clauses seek to ensure that the contracting authority (typically a federal or state agency) receives at least as favorable pricing as other customers making similar purchases. For example, the government agency may request that the contractor warrant that the prices it charges under the contract will be as favorable as those offered to other parties purchasing similar products of similar quantity under similar terms and conditions. In theory, the request to be treated equally to others making …

Online Terms Of Service: A Shield For First Amendment Scrutiny Of Government Action, Jacquelyn E. Fradette

Notre Dame Law Review

Part I of this Note will canvas popular opinions and perceptions about First Amendment rights on the Internet using examples of public outcry over recent instances of speech limitation. It will also discuss the state action doctrine generally and how the presence of this doctrine most likely renders certain popular public constitutional intuitions about the First Amendment erroneous.

Part II will provide an overview of how courts have taken an expansive and protective view of private ordering between online parties. It will discuss how courts have developed a robust freedom to contract jurisprudence in the Internet context. Because courts essentially …

Weathering Wal-Mart, Joseph A. Seiner

Notre Dame Law Review

In Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2531 (2011), the Supreme Court held that a proposed class of over a million women that had alleged pay and promotion discrimination against the nation’s largest retailer could not be certified. According to the Court, the plaintiffs had failed to establish a common thread in the case sufficient to tie their claims together. The academic response to Wal-Mart was immediate and harsh: the decision will serve as the death knell for mass employment litigation, undermining the workplace protections provided by Title VII of the Civil Rights Act of 1964 (Title VII). …

Private Law In The Gaps, Jeffrey A. Pojanowski

Journal Articles

Private law subjects like tort, contract, and property are traditionally taken to be at the core of the common law tradition, yet statutes increasingly intersect with these bodies of doctrine. This Article draws on recent work in private law theory and statutory interpretation to consider afresh what courts should do with private law in statutory gaps. In particular, it focuses on statutes touching on tort law, a field at the leading edge of private law theory. This Article's analysis unsettles some conventional wisdom about the intersection of private law and statutes. Many leading tort scholars and jurists embrace a regulatory …

At The Brink Of Free Agency: Creating The Foundation For The Messersmith-Mcnally Decision - 1968-1975, Edmund P. Edmonds

Journal Articles

"One of the most dramatic periods in baseball’s long history of labor relations occurred from 1968 through 1975. The Major League Baseball Players Association negotiated baseball’s first Basic Agreement in 1968 without the benefit of any leverage that could alter most of Organized Baseball’s long practices that controlled the players’ mobility and wages. In 1975, however, the union won an arbitration panel hearing that determined that pitchers Dave McNally and Andy Messersmith were free agents after playing one full season under the renewed option year of their contracts and filing a grievance under the newly adopted arbitration process. This stunning …

Are All Contracts Alike?, Margaret F. Brinig

Journal Articles

This Article compares two sets of contracts that are structurally and contextually similar. They originate in two quite different fields, however: the commercial arena and the family. The contracts come from two separate empirical investigations. The first investigation studied 131 telecommunication interconnection agreements made between SBC Communications, Inc. ("SBC") and various local phone companies in Michigan beginning in 1998. The second investigation involved 141 divorce cases granted in 1998 in Johnson County, Iowa, all of which involved children, and 130 of which involved contracts, or "stipulations" as they are called locally. Though each empirical project has been described separately elsewhere, …

Comment: On Contractual Defaults And Experimental Law And Economics, Avishalom Tor

Journal Articles

It is possible that contract default rules, whose relevance is contingent upon parties' agreement to contract, differ from other default states. Parties therefore might not perceive contingent contractual defaults as relevant reference points. Ironically, however, Sloof, Oosterbeek and Sonnemans' (SOS) "default contract" applied inevitably whenever proposed and whenever Respondents rejected a non-default proposal, bearing greater resemblance to a legal right than to a contractual default. Thus, the contingency of typical contractual defaults cannot account for the No Bias Finding. Other aspects of the SOS experimental design, on the other hand, may explain the No Bias Finding.

Penalty Defaults In Family Law: The Case Of Child Custody, Margaret F. Brinig

Journal Articles

This paper considers whether an amendment to state divorce laws that strengthens its joint custody preference operates as a traditional default rule, specifying what most divorcing couples would choose or as a penalty default rule the parties will attempt to contract around.

While the Oregon statutes that frame our discussion here, like most state laws, do not state an explicit preference for joint custody, shared custody is certainly encouraged by Section 107.179, which refers cases in which the parties cannot agree on joint custody to mediation and by Section 107.105, which requires the court to consider awarding custody jointly. In …

Unhappy Contracts: The Case Of Divorce Settlements, Margaret F. Brinig

Journal Articles

This paper examines a particular type of contracts that is, sadly, increasingly frequent: the agreements produced by divorcing couples. They are unhappy contracts, agreements produced as a necessary part of exit from what is now suboptimal marriage. They are virtually required by many states and are, in theory at least, closely monitored by courts since, when children are involved, they will be incorporated into court orders.What parties to unhappy contracts do is attempt to minimize losses, rather than maximize gain. How are contracts structured that will do this, and how does a difference in the size or power of the …

Promises, Trust, And Contract Law, Anthony J. Bellia

Journal Articles

The need for individuals to be able to trust that promises will be performed is central to justifying a law that renders certain promises enforceable. This Article argues that the legal enforcement of certain promises to meet this need does not necessarily diminish the personal relationships of trust in which such promises are made, as has been argued. Rather, this Article argues, the making and performance of legally enforceable promises can assist individuals in building relationships of trust, as it assists them in the pursuit of myriad goods.

"Money Can't Buy Me Love": A Contrast Between Damages In Family Law And Contract, Margaret F. Brinig

Journal Articles

As my contribution to this symposium in David's honor, I submit the law and economics section of the damages chapter of our joint enterprise, Understanding Contracts. Because of David's failing health, my own involvement with the publisher never reached contract stage. The chapter concludes with a problem that illustrates some of the intricacies of mixing family law and contract. David and I grappled for some time with the answer to the problem, coming at it from our different points of view. On one occasion, David, with a twinkle, told me there was only one place where I was "absolutely wrong." …

The Influence Of Marvin V. Marvin On Housework During Marriage, Margaret F. Brinig

Journal Articles

When Michelle Marvin was forced to leave the home she shared with what today we would call her partner, Lee Marvin, she had a number of problems. The first ones, of course, were legal: she had no marriage with Lee and no written contract that could distinguish their relationship from "mere cohabitation." Nor had she contributed directly to his career or other assets. What she alleged was his express promise to "take care of her" (for some time period that was not altogether clear) and, less obviously, a promise implied by all she had done with and for him during …

Contracting With Electronic Agents, Anthony J. Bellia

Journal Articles

Established contract doctrine provides no clear answer to the question whether exchanges arranged by the interaction of electronic agents are enforceable. This Article explores whether the law should enforce exchanges arranged by the interaction of electronic agents. It examine how normative theories of contractual obligation inform the issue, with an eye toward the strengths and weaknesses of each theory. The theories that most strongly support the enforcement of exchanges arranged by electronic agents, this Article explains, are those that ground contractual obligation in protecting the ability of individuals to pursue their reasonable objectives through reliable arrangements.

Covenant And Contract, Steven Nock, Margaret F. Brinig

Journal Articles

In this article we ask, "What distinguishes a covenant from a mere contract, and what role does this distinction play for natural law?" Both of us have thought substantially about covenant over the past several years. The concept of covenant comes to us originally from religious sources, so we have paid explicit attention to what the Bible and organized religion have to say about covenant. We have also drawn from our own disciplines of law, economics, and sociology as they explain or draw from the initial concepts.

Covenant is a concept that takes us beyond contract. Indeed, the idea that …

An Independent Contractor Speaks His Mind: Can He Lose His Government Contract? An Analysis Of Heiser V. Umbehr, Barbara J. Fick

Journal Articles

This article previews the Supreme Court case Heiser v. Umbehr, 515 U.S. 1172 (1995). The author expected the Court to consider whether, and to what extent, a governmental unit can take into account an independent contractor's poltical speech in making decisions regarding the award or termination of government contracts.

A Maternalistic Approach To Surrogacy: Comment On Richard Epstein's Surrogacy: The Case For Full Contractual Enforcement, Margaret F. Brinig

Journal Articles

Many of the other participants in this Symposium have written extensively about surrogacy. Not only have they contributed to the debate, in some instances they have framed it. In some respects, therefore, I merely thank all of them and chime in. Unlike my fellow panelists, however, I do not think surrogacy merits an enthusiastic, positive response.

In this Comment, I propose to restate objections to specifically enforceable surrogacy contracts from a family-law perspective as well as from the philosophical or psychological roots of family law. I will then reexamine the problems of surrogacy from a contractarian, law-and-economics perspective, showing how …

Doctrinal Synergies And Liberal Dilemmas: The Case Of The Yellow-Dog Contract, Barry Cushman

Journal Articles

The three decades spanning the years 1908 to 1937 saw a remarkable transformation of the Supreme Court's jurisprudence concerning the rights of workers to organize. In 1908, the Court held that a federal law prohibiting employers from discharging an employee because of his membership in a labor union violated the liberty of contract secured to the employer by the Fifth Amendment. In 1915, the Court similarly declared a state statute prohibiting the use of "yellow-dog" contracts unconstitutional. In 1937, by contrast, the Court upheld provisions of the Wagner Act prohibiting both discharges for union membership and the use of yellow-dog …