Law Commons^™

The Scope Of Generic Choice Of Law Clauses, Tanya J. Monestier

Journal Articles

Non-proceduralists have the perception that questions of jurisdiction or choice of law are just preliminary issues that need to be dealt with before getting to the real dispute, the things that matter. What they do not realize is that these preliminary issues are often, themselves, the real dispute. They are the lever which permits litigation to proceed or which stops a claim dead in its tracks. Thus, these procedural matters — often dismissed as technicalities — have the potential to shape the dispute in significant ways.

Take for instance, a staple of commercial and consumer contracting: the ubiquitous choice of …

Federal Courts’ Recalcitrance In Refusing To Certify State Law Covid-19 Business Interruption Insurance Issues, Christopher French

Journal Articles

Over 2,000 COVID-19 business interruption insurance cases have been filed in state and federal courts the past two years with most of the cases filed in or removed to federal courts. The cases are governed by state law. Rather than certify the novel state law issues presented in the cases to the respective state supreme courts that ultimately will determine the law applicable in the cases, each of the eight federal circuit courts to issue decisions on the merits in such cases to date has done so by making an Erie guess regarding how the controlling state supreme courts would …

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 …

"You're Fired!": The Common Law Should Respond With The Refashioned Tort Of Abusive Discharge, William R. Corbett

Journal Articles

An at will prerogative without limits could be suffered only in an anarchy, and there not for long--it certainly cannot be suffered in a society such as ours without weakening the bond of counter balancing rights and obligations that holds such societies together. Thus, while there may be a right to terminate a contract at will for no reason, or for an arbitrary or irrational reason, there can be no right to terminate such a contract for an unlawful reason or purpose that contravenes public policy. A different interpretation would encourage and sanction lawlessness, which law by its very nature …

Delaware As Deal Arbiter, Christina M. Sautter

Journal Articles

Most would agree that the Delaware courts are the leading jurists in the resolution of corporate conflicts, particularly in the Mergers & Acquisitions (M&A) context. Arguably a greater role that Delaware plays is that of a norm setter, both with respect to the expectations of management conduct in the M&A process and with respect to deal terms, particularly deal protection devices. Like in any relationship, there is a "give and take" between practitioners and Delaware. That is, practitioners are "on the front lines," often innovating with respect to new deal structures and deal terms. After some time, Delaware has the …

Covid-19 Business Interruption Insurance Losses: The Cases For And Against Coverage, Christopher French

Journal Articles

The financial consequences of the government-ordered shutdowns of businesses across America to mitigate the COVID-19 health crisis are enormous. Estimates indicate that small businesses have lost $255 to $431 billion per month and more than 44 million workers have been laid off. When businesses have requested reimbursement of their business interruption losses from their insurers under business interruption policies, their insurers have denied the claims. The insurance industry also has announced that business interruption policies do not cover pandemic losses, so they intend to fight COVID-19 claims “tooth and nail.” More than 450 lawsuits throughout the country already have been …

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 …

When Forum Selection Clauses Meet Choice Of Law Clauses, Tanya J. Monestier

Journal Articles

Many contracts that contain a forum selection clause also contain a choice of law clause. This raises the issue of whether to apply the parties’ chosen law to questions of forum selection clause interpretation, such as whether the clause is mandatory or permissive and how far the scope of the clause extends. The recent trend has been for courts to apply the law selected by the parties in their choice of law clause to govern these interpretation issues. This Article argues that the law has gone in the wrong direction and that courts should apply forum law to questions of …

Insurance Policies: The Grandparents Of Contractual Black Holes, Chris French

Journal Articles

In their recent article, The Black Hole Problem in Commercial Boilerplate, Professors Stephen Choi, Mitu Gulati, and Robert Scott identify a phenomenon found in standardized contracts they describe as “contractual black holes.” The concept of black holes comes from theoretical physics. Under the original hypothesis, the gravitational pull of a black hole is so strong that once light or information is pulled past an event horizon into a black hole, it cannot escape. In recent years, the theory has been reformulated and now the hypothesis is that some information can escape, but it is so degraded that it is virtually …

Whose Law Of Personal Jurisdiction? The Choice Of Law Problem In The Recognition Of Foreign Judgments, Tanya J. Monestier

Journal Articles

It is black-letter law that in order to recognize and enforce a foreign judgment, the rendering court must have had personal jurisdiction over the defendant. While the principle is clear, it is an open question as to whose law governs the question of personal jurisdiction: that of the rendering court or that of the recognizing court. In other words, is the foreign court’s jurisdiction over the defendant governed by foreign law (the law of F1), domestic law (the law of F2), or some combination thereof? While courts have taken a number of different approaches, it seems that many courts regard …

Sex, Videos, And Insurance: How Gawker Could Have Avoided Financial Responsibility For The $140 Million Hulk Hogan Sex Tape Verdict, Christopher French

Journal Articles

On March 18, 2016, and March 22, 2016, a jury awarded Terry Bollea (a.k.a Hulk Hogan) a total of $140 million in compensatory and punitive damages against Gawker Media for posting less than two minutes of a video of Hulk Hogan having sex with his best friend’s wife. The award was based upon a finding that Gawker intentionally had invaded Hulk Hogan’s privacy by posting the video online. The case has been receiving extensive media coverage because it is a tawdry tale involving a celebrity, betrayal, adultery, sex, and the First Amendment. The case likely will be remembered by most …

The Insurability Of Claims For Restitution, Christopher French

Journal Articles

Does and should a wrongdoer’s liability insurance cover an aggrieved party’s claim for restitution (e.g., a claim for the disgorgement of ill-gotten gains)? This article answers those questions. It does so by first answering the question of whether claims for restitution are covered under the terms of liability insurance policies. Then, after concluding that they are, it addresses the question of whether claims for restitution should be insurable as a matter of public policy and insurance law theory. There are long-standing legal and equitable principles that, on the one hand, dictate that a wrongdoer should not be allowed to benefit …

Insuring Floods: The Most Common And Devastating Natural Catastrophes In America, Christopher French

Journal Articles

Flooding is the most common natural catastrophe Americans face, accounting for 90% of all damage caused by natural catastrophes. Hurricanes Katrina and Sandy, for example, collectively caused over $160 billion in damage, but only approximately 10% of the Hurricane Katrina victims and 50% of the Hurricane Sandy victims had insurance to cover their flood losses. Consequently, both their homes and lives were left in ruins in the wake of the storms. Nationwide, only approximately 7% of homeowners have insurance that covers flood losses even though the risk of flooding is only increasing as coastal areas continue to be developed and …

The Role Of The Profit Imperative In Risk Management, Christopher French

Journal Articles

Risks in the world abound. Every day there is a chance that each of us could be in a car accident. Or, one of us could be the victim of a tornado, flood or earthquake. Every day someone becomes deathly ill from an insidious disease. Our properties are in constant peril—one’s house could catch fire at any time or a tree could fall on it during a storm. Any one of these events could have devastating financial consequences, and they are just a few of the many risks that impact our daily lives. One of the principal ways we manage …

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 …

Lock-Up Creep, Christina M. Sautter, Steven M. Davidoff

Journal Articles

The article discusses a reported increase in the number of merger agreement lock-ups that have occurred as of June 2013, focusing on the causes of lock-up creep and its potential impact on the takeover market. It states that lock-up creep is a phrase that is used to describe a rise in the number and type of merger agreement contractual devices that buyers and sellers negotiate in an acquisition agreement. Attorney negotiations, bidders, and various legal cases are examined.

Segmented Settlements Are Not The Answer: A Response To Professor Squire’S Article, How Collective Settlements Camouflage The Costs Of Shareholder Lawsuits, Christopher C. French

Journal Articles

In his recent article, Professor Richard Squire offers a provocative theory in which he claims the underlying claimants in shareholder litigation against corporate policyholders are overcompensated due to what he describes as “cramdown” settlements, under which insurers are forced to settle due to the “duty to contribute” that arises under multi-layered directors and officers (“D&O”) insurance programs. He also offers a novel idea regarding how this problem could be fixed by what he refers to as “segmented” settlements in which each insurer and the policyholder would be allowed to settle separately and consider only its own interests in doing so. …

The “Ensuing Loss” Clause In Insurance Policies: The Forgotten And Misunderstood Antidote To Anti-Concurrent Causation Exclusions, Chris French

Journal Articles

As a result of the 1906 earthquake and fire in San Francisco which destroyed the city, a clause known as the “ensuing loss” clause was created to address concurrent causation situations in which a loss follows both a covered peril and an excluded peril. Ensuing loss clauses appear in the exclusions section of such policies and in essence they provide that coverage for a loss caused by an excluded peril is nonetheless covered if the loss “ensues” from a covered peril. Today, ensuing loss clauses are found in “all risk” property and homeowners policies, which cover all losses except for …

Debunking The Myth That Insurance Coverage Is Not Available Or Allowed For Intentional Torts Or Damages, Christopher French

Journal Articles

Over the years, a myth has developed that insurance coverage is not available or allowed for intentional injuries or damage. This myth has two primary bases: one, the “fortuity” doctrine, which provides that insurance should only cover losses that happen by chance; and two, public policy, which allegedly disfavors allowing insurance for intentional injuries or damage. This article dispels that myth. Many types of liability insurance policies expressly cover intentional torts including trademark infringement, copyright infringement, invasion of privacy, defamation, disparagement, and improper employment practices such as discrimination. In addition, punitive damages, which typically are awarded for intentional misconduct, are …

Construction Defects: Are They “Occurrences”?, Chris French

Journal Articles

An issue in the area of insurance law that has been litigated frequently in recent years is whether construction defects are “occurrences” under Commercial General Liability (“CGL”) insurance policies. The courts have been divided in deciding the issue and in their approaches to analyzing the issue. This article addresses how the issue should be analyzed and concludes that construction defects are “occurrences”. The relevant rules of insurance policy interpretation dictate that construction defects are “occurrences”. Policy language should be interpreted in such a way as to fulfill the reasonable expectations of the policyholder when the policy is construed as a …

The “Non-Cumulation Clause”: An “Other Insurance” Clause By Another Name, Chris French

Journal Articles

How long-tail liability claims such as asbestos bodily injury claims and environmental property damage claims are allocated among multiple triggered policy years can result in the shifting of tens or hundreds of millions of dollars from one party to another. In recent years, insurers have argued that clauses commonly titled, “Prior Insurance and Non-Cumulation of Liability” (referred to herein as “Non-Cumulation Clauses”), which are found in commercial liability policies, should be applied to reduce or eliminate their coverage responsibilities for long-tail liability claims by shifting their coverage responsibilities to insurers that issued policies in earlier policy years. The insurers’ argument …

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 …

Attorney Referral, Negligence, And Vicarious Liability, Bruce Ching

Journal Articles

As a consequence of requests from clients or prospective clients, lawyers are often placed in a position of giving referrals, especially in situations of cross-specialty referrals (such as an estate planning attorney whose longtime client has become a party in a personal injury lawsuit) or cross-jurisdictional referrals (such as an attorney in Michigan who is contacted by a prospective client who must respond to a lawsuit that was filed in Ohio).

But if the lawyer who receives the referral commits malpractice in handling the case, can the lawyer who made the referral be held liable for the client's loss? This …

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 …