Commercial Law Commons^™

Surprises In The Skies: Resolving The Circuit Split On How Courts Should Determine Whether An "Accident" Is "Unexpected Or Unusual" Under The Montreal Convention, Ashley Tang

Washington Law Review

Article 17 of both the Montreal Convention and its predecessor, the Warsaw Convention, imposes liability onto air carriers for certain injuries and damages from “accidents” incurred by passengers during international air carriage. However, neither Convention defines the term “accident.” While the United States Supreme Court opined that, for the purposes of Article 17, an air carrier’s liability “arises only if a passenger’s injury is caused by an unexpected or unusual event or happening that is external to the passenger,” it did not explain what standards lower courts should employ to discern whether an event is “unexpected or unusual.” In 2004, …

Hostile Restructurings, Diane L. Dick

Washington Law Review

The conventional wisdom holds that out-of-court loan restructurings are mostly consensual and collaborative. But this is no longer accurate. Highly aggressive, nonconsensual restructuring transactions—what I call “hostile restructurings”—are becoming a common feature of the capital markets. Relying on hypertechnical interpretations of loan agreements, one increasingly popular hostile restructuring method involves issuing new debt that enjoys higher priority than the existing debt; another involves transferring the most valuable collateral away from existing lenders to secure new borrowing.

These transactions are distinguishable from normal out-of-court restructurings by their use of coercive tactics to overcome not only the traditional minority lender holdout problem, …

The Federal Option: Delaware As A De Facto Agency, Omari Scott Simmons

Washington Law Review

Despite over 200 years of deliberation and debate, the United States has not adopted a federal corporate chartering law. Instead, Delaware is the “Federal Option” for corporate law and adjudication. The contemporary federal corporate chartering debate is, in part, a referendum on its role. Although the federal government has regulated other aspects of interstate commerce and has the power to charter corporations and preempt Delaware pursuant to its Commerce Clause power, it has not done so. Despite the rich and robust scholarly discussion of Delaware’s jurisdictional dominance, its role as a de facto national regulator remains underdeveloped. This Article addresses …

Commercializing Cannabis: Confronting The Challenges And Uncertainty Of Trademark And Trade Secret Protection For Cannabis-Related Businesses, John Mixon

Washington Journal of Law, Technology & Arts

Over the last couple of decades, society has become more accepting of recreational cannabis and an ever-growing number of states have passed pro-cannabis legislation. With this change, the cannabis industry has, to some extent, exploded into a booming enterprise in states that have legalized marijuana. Nonetheless, cannabis' status as a Schedule I banned substance under the Controlled Substances Act of 1970 remains unchanged. As a result, businesses in the cannabis industry face the unique challenge of having to toe the line between "legally" operating under state law and violating federal law, which trumps state law. One particular situation in which …

Market Segmentation Vs. Subsidization: Clean Energy Credits And The Commerce Clause's Economic Wisdom, Felix Mormann

Washington Law Review

The dormant Commerce Clause has long been a thorn in the side of state policymakers. The latest battleground for the clash between federal courts and state legislatures is energy policy. In the absence of a decisive federal policy response to climate change, nearly thirty states have created a new type of securities—clean energy credits—to promote low-carbon renewable and nuclear power. As more and more of these programs come under attack for alleged violations of the dormant Commerce Clause, this Article explores the constitutional constraints on clean energy credit policies. Careful analysis of recent and ongoing litigation reveals the need for …

Head In The Clouds, Head In The Sand: Federal Failure To Update Guidance On Computer Transaction In An International Context, Logan S. Weaver

Washington Law Review

The United States has two different rationales for taxing income of non-U.S. persons and entities. First, the income may be “sourced” to the United States, as defined in the Internal Revenue Code. Alternatively, the income may be effectively connected to a trade or business within the United States that provides income to the non-U.S. person or entity. The sourcing rules for income of non-U.S. persons and entities depend heavily on the nature of the underlying transaction and the geographical location where certain key elements of the transaction take place. So long as the non-U.S. person or entity avoids activities that …

The Dormant Commerce Clause "Effect": How The Difficulty In Reconciling Exxon And Hunt Has Led To A Circuit Split For Challenges To Laws Affecting National Chains, Valerie Walker

Washington Law Review

The onslaught of chains such as Wal-Mart and Starbucks has driven some state and local lawmakers to craft regulations prohibiting these types of national chains. In response, several national chains have challenged the constitutionality of such regulations, claiming that they amount to economic protectionism. The dormant Commerce Clause (DCC) doctrine prohibits states from engaging in protectionism directed at commerce from other states. Courts use a two-tiered analysis when considering these types of challenges. The tier-level analysis is important because regulations rarely survive the first tier’s elevated scrutiny. The first tier applies when a state law directly discriminates against interstate commerce, …

The Laws Of Asian International Business Transactions, Gilles Cuniberti

Washington International Law Journal

The purpose of this article is to assess the preferences of parties to Asian international business transactions when they choose the law governing their contracts. To that end, I conducted an empirical analysis of unpublished data of the four main arbitral institutions active in Asia (outside Mainland China) for the years 2011 and 2012. I found that three laws dominate the Asian market for international contracts: English law, U.S. law, and, to a lesser extent, Singapore law. This article makes three contributions. First, it documents the regional variations in parties’ preferences: the laws which are successful in Asia are different …

Can Law Students Disrupt The Market For High-Priced Textbooks?, Jane K. Winn

Articles

The Center for Computer-Assisted Legal Instruction (CALI) is a non-profit organization whose mission is to advance legal education through technological innovation and collaboration. With its eLangdell Press project, CALI publishes American law school textbooks in open access, royalty-free form, offering faculty authors compensation equivalent to what most law school textbook authors would earn in royalties from a traditional full-price publisher.

I am writing a new sales textbook and “agreements supplement” based on contemporary business practice that I will publish in open access form with CALI’s eLangdell Press. Relatively few other American legal academics publish in open access form, however, suggesting …

Finding Safe Harbor: Navigating Washington's New Unfair Competition Law, Daniel Shickich

Washington Journal of Law, Technology & Arts

Under a new law, manufacturers and retailers that sell products in Washington State could face stiff penalties if their products are made using stolen or misappropriated information technology (“stolen IT”). In 2011 the Washington Legislature passed Substitute House Bill 1495, creating a new cause of action that allows private plaintiffs or the state attorney general to seek injunctive relief and damages against manufacturers that use stolen IT in their business operations. The law also creates an additional claim for actual damages of up to $250,000 against third parties who contract with violating manufacturers and sell the products in Washington. Using …

Defining "Breach Of The Peace" In Self-Help Repossessions, Ryan Mcrobert

Washington Law Review

Since Roman times, creditors have invoked the limited extrajudicial remedy of self-help repossession. Pre-colonial English laws also allowed for a limited repossession remedy outside of the courts, provided the creditor accomplished the repossession without a “breach of the peace.” The Uniform Commercial Code (UCC) has allowed for the self-help remedy since the 1950s, making it available for any secured party in the event of contractual default so long as there was no breach of the peace. The drafters of the UCC, however, failed to define what constituted a “breach of the peace,” choosing to allow the courts to flesh out …

Jacobsen Revisited: Conditions, Covenants And The Future Of Open-Source Software Licenses, Yamini Menon

Washington Journal of Law, Technology & Arts

Open-source software licensing has become mainstream in the field of software development. Nowhere is this more evident than in the 2008 Federal Circuit decision Jacobsen v. Katzer, where the court first interpreted the terms of an open-source software license. The Jacobsen decision offers an important first step in how to interpret the terms of an open-source license, though it does not address how to interpret licenses other than the Artistic License. This Article explores how Jacobsen’s reasoning can be used to interpret the terms of other open-source licenses, particularly the GPL v.2, GPL v.3, Apache License v.2, BSD …

Electronic Chattel Paper: Invitation Accepted, Jane K. Winn

Articles

In 1999, Revised U.C.C. Article 9 governing secured lending was updated to permit the creation of "electronic chattel paper" ("ECP"). Traditional chattel paper is used widely in some sectors of the US economy to finance equipment purchases in part because a chattel paper financers who perfects by taking possession can achieve priority over a pre-existing secured lender who perfected by filing. Revised U.C.C. § 9-105 defined a new form of "control" over ECP that would be treated as equivalent to possession of traditional chattel paper, permitting chattel paper financers to retain their superpriority status with electronic documents.

Because chattel paper …

Tipping The Scale To Bring A Balanced Approach: Evidence Disclosure In Chinese International Arbitration, Bryant Yuan Fu Yang, Diane Chen Dai

Washington International Law Journal

Due to the ever-increasing trade between China and the rest of the world, commercial disputes have risen dramatically. Many foreign companies choose to resolve these disputes through arbitration to circumvent the Chinese courts and to retain more autonomy and control. Arbitration itself can also be a problem because rules and laws differ, depending on the jurisdiction and the institution involved. Under China’s civil law tradition, arbitrators are restricted in their ability to force parties to disclose evidence that may be detrimental to their case. Additionally, arbitrators have no authority to obtain evidence from uncooperative third parties. This Article seeks to …

Can China Promote Electronic Commerce Through Law Reform? Some Preliminary Case Study Evidence, Jane K. Winn, Song Yuping

Articles

The government of the People’s Republic of China (P.R.C.) has announced its intention to make China a global leader in innovation by 2020. Many Chinese business leaders share this goal. The primary focus of this national strategy is to transform China into an exporter of high-technology products based on Chinese designs rather than merely a low cost, high volume manufacturer of products based on technology developed in other countries.

This paper will examine the implications for this strategy with regard to the use of computerized management information systems by Chinese businesses, and its relationship to recent law reform efforts intended …

Congressional Power To Regulate Noncommercial Activity Overseas: Interstate Commerce Clause Precedent Indicates Constitutional Limitations On Foreign Commerce Clause Authority, Jeff Christensen

Washington Law Review

Although the U.S. Supreme Court has not yet ruled any statutes criminalizing the conduct of Americans overseas unconstitutional under the Foreign Commerce Clause, three U.S. Courts of Appeals decisions use the concept of enumerated powers—important in U.S. Supreme Court decisions that invalidate statutes grounded in the Interstate Commerce Clause—to suggest limitations on Congress's Foreign Commerce Clause power. In two decisions, the U.S. Courts of Appeals for the Fifth and Ninth Circuits employed the U.S. Supreme Court's Interstate Commerce Clause framework when analyzing statutes under the Foreign Commerce Clause. In so doing, these courts suggest that Foreign Commerce Clause power is …

Diverging Perspectives On Electronic Contracting In The U.S. And Eu, Jane K. Winn, Brian H. Bix

Articles

The focus of this Article is the interrelated set of issues that have arisen, on one hand, from Internet transactions regarding the downloading of free or purchased software, as well as other Internet sales, and on the other hand, the distinctive transactional problems that modern business practices have created under the rubric of "shrink-wrap" or "terms in the box"—a late presentation of terms associated with the sale of computers or the licensing of software (with the terms included in the packaging, rather than presented to the user ahead of time)—but not necessarily confined to those transactions.

Such transactions raise novel …

The Fact Act Of 2003: Securing Personal Information In An Age Of Identity Theft, Terrance J. Keenan

Washington Journal of Law, Technology & Arts

The Fair and Accurate Credit Transactions Act of 2003 (“FACT Act”) makes incremental progress toward its goal of improving the protection of consumers and businesses in an age of increasingly sophisticated scams and cons. Congress enacted the FACT Act in order to further address the problems of identity theft, improve resolution of disputes over consumer credit information, enhance accuracy of consumer credit records, further regulate use of credit information, and broaden consumer access to credit information. The FACT Act imposes new business practices on companies that handle personal consumer information by requiring them to share with consumers information about data …

Contracting Spyware By Contract, Jane K. Winn

Articles

The question of what constitutes "spyware" is controversial because many programs that are adware in the eyes of their distributors may be perceived as spyware in the eyes of the end user. Many of these programs are loaded on the computers of end users after the end user has agreed to the terms of a license presented in a click-through interface.

This paper analyzes whether it might be possible to reduce the volume of unwanted software loaded on end users' computers by applying contract law doctrine more strictly. Unwanted programs are often bundled with programs that the end user wants, …

Digital Age Standard Form Contracts Under Austalian Law: "Wrap" Agreements, Exclusive Jurisdiction, And Binding Arbitration Clauses, John Adams

Washington International Law Journal

Despite the widespread use of end user agreements ("EULAs") within international e-commerce, their enforceability under Australian law has yet to be adjudicated. Legislative reform and judicial clarification of contract standards may be required for Australian courts to validate the methods of standard form contracting used in the digital age. While existing Anglo-Australian nules regarding contract formation may be adequate to enforce EULAs, the doctrine of privity presents an unnecessary and outdated barrier to the enforcement. Accordingly, the Australian legislature should abolish the doctrine of privity. In addition, Australian courts must clarify what type of notice is required for onerous contractual …

Oops! The Legal Consequences Of And Solutions To Online Pricing Errors, Benjamin Groebner

Washington Journal of Law, Technology & Arts

How can businesses conducting sales over the Internet protect themselves from the inevitability of pricing errors? Unlike the brick and mortar retailers’ ability to catch a pricing error quickly, thousands of orders can be placed with online retailers before they detect the problem. When pricing errors do occur and contracts are formed, merchants are forced to choose between absorbing the resulting financial loss as an investment in goodwill or trying to invalidate the contracts under the doctrine of unilateral mistake. To avoid binding contracts with customers at erroneous prices, online retailers should employ protective methods of contract formation that help …

Venture Capital Contracting Under The Korean Commercial Code: Adopting U.S. Techniques In South Korean Transactions, Eugene Kim

Washington International Law Journal

Because U.S. venture capital contracting techniques are well developed and highly effective, the appeal of adopting such techniques in venture capital transactions outside the United States is enormous to globally minded investors and legal practitioners. South Korea has yet to develop venture capital contracting practices as extensive as those found in the United States. In response to its burgeoning venture capital industry, however, South Korea will likely continue to adopt U.S. venture capital techniques in transactions governed by Korean corporate law. Such transactions can benefit the South Korean venture capital industry, leading to more profitable investments and financially successful companies …

Russian Draft Law On Special Economic Zones—A Step Forward, But Not Far Enough, Valentin A. Povarchuk

Washington International Law Journal

The situation in the Russian Far East epitomizes the acute need for economic reform and development in Russia. The region boasts an enormous wealth of metals, oil, gas, coal, timber, and marine resources, but has long suffered from excessive dependence on the central government's administration and its accompanying historical neglect. Taking a cue from China's successful use of special economic zones as a means to encourage economic reform, some Russian policy-makers have proposed special economic zones as a means to encourage development. Russia's early laws establishing special economic zones, however, did not produce self-sustaining results due to a lack of …

Forum-Selection Clauses In Consumer Clickwrap And Browsewrap Agreements And The "Reasonably Communicated" Test, Kaustuv M. Das

Washington Law Review

Although forum-selection clauses in clickwrap and browsewrap agreements have been addressed in only a limited number of decisions, they are likely to become increasingly relevant with the growth of e-commerce. Courts that have enforced forum-selection clauses in click-wrap and browsewrap agreements have often done so without determining whether the consumer received notice of the clause. When courts have addressed notice, they have not used any uniform standard for determining adequacy of notice. Forum-selection clauses in dlickwrap and browsewrap agreements further the policies underlying the Supreme Court's decisions in MIS Bremen v. Zapata Off-Shore Co. and Carnival Cruise Lines, Inc. v. …

China's Direct Marketing Ban: A Case Study Of China's Response To Capital-Based Social Networks, Michele A. Wong

Washington International Law Journal

China's State Administration for Industry and Commerce issued a circular on April 18, 1998 banning all forms of multi-level direct marketing, citing concerns with social stability and economic order. While the direct marketing ban was ultimately implemented in such a way as to allow those who engaged in network marketing to transition to retail sales, alleviating some of the violence of the protest to the ban, opposition to the ban has continued both domestically and abroad. Direct marketing organizations create tight-knit, extensive networks of individuals with similar economic interests. By assembling around a common economic interest, the group may also …

Social Networks And Electronic Commerce In China, Jane K. Winn

Articles

Communication technologies that make up the emerging global information infrastructure have the power to regulate online behavior. Social networks in Chinese society have survived the growth of formal legal institutions and liberalization of China's economy, but it is not clear whether they can survive the regulatory pressures created by global information technology networks.

The spread of electronic commerce technologies in China may strengthen legal institutions and open local markets to international competition, but is likely to be resisted by all the same interests that resist those changes in other contexts. The Chinese response to the spread of electronic commerce might …

Emerging Issues In Electronic Contracting, Technical Standards And Law Reform, Jane K. Winn

Articles

The explosive growth of electronic commerce transactions in recent years has added fuel to efforts to harmonize international commercial law. Organizations such as the International Institute for the Unification of Private Law (UNIDROIT), the United Nations Commission on International Trade Law (UNCITRAL) and the Hague Conference on Private International Law are all participating in an emerging global debate concerning the changes that should be made to the form or substance of international commercial law to accommodate innovation in the technology of international trade.

Many of the important legal issues raised by cross-border electronic commerce in the 1970s and 1980s have …

International Judicial Practice And The Written Form Requirement For International Arbitration Agreements, Jing Wang

Washington International Law Journal

The requirement that international commercial arbitration agreements must be made in writing is well accepted in most countries and has become a uniform practice in international commercial arbitration law. This is due in large part to the widespread acceptance of the Convention on Recognition and Enforcement of Foreign Arbitral Awards ("New York Convention"). Article II (1) provides that "each Contracting State shall recognize an agreement in writing." The term "agreement in writing" is defined in Article 11 (2) of the Convention as "an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an …

The Emperor's New Clothes: The Shocking Truth About Digital Signatures And Internet Commerce, Jane K. Winn

Articles

This Article critiques a specific set of assumptions about specific application of digital signature technology: that contracts will be formed over the Internet among parties with no prior relationships through reliance on digital signature certificates issued by trusted third parties to establish the identity of the parties. This application for digital signature technology was once seen as both its most ambitious and most promising application because, for parties with no prior knowledge of each other, there is not yet a reliable system of online identities in Internet commerce.

Parties with an ongoing commercial relationship can absorb the cost of offline …

The Rule Of Law And Commercial Litigation In Myanmar, Alec Christie

Washington International Law Journal

After nearly thirty years of self imposed isolation, Myanmar has reemerged as a significant potential destination for foreign investment. One of the key attractions of Myanmar as a destination for foreign investment is its legal system and historical commitment to the rule of law. With ASEAN membership and increasing levels of foreign investment in Myanmar, use of its legal system by foreign investors and their counsel has grown. The aim of this article is to outline, for both investors and legal professionals in other countries throughout the region, Myanmar's legal system and its practical operation in the area of commercial …