Contracts Commons^™

New Values Under Old Oil And Gas Leases: Helium, Who Owns It?, C. Douglas Kranwinkle

Michigan Law Review

It is a well known maxim among oil and gas lawyers that "a producing well always clouds a title and a dry hole cures it." A variation of that maxim might be applied to producing wells which may or may not include, as by-products of the primary mineral, other substances that are extractible and valuable. Of course, once production of by-products begins, conveyancers give special attention to these resources, but many instruments executed before such development may be phrased in general terms without specific mention of substances unimportant when the conveyance was made. Even a recent instrument may lack specificity …

Civil Procedure- Venue-Effect Of Contract Provision Fixing Venue As To Future Litigation, Robert C. Bonges

Michigan Law Review

Defendants, residents of Harris County, Texas, executed in Harris County a conditional sale contract to purchase a food freezer from plaintiff's assignor. One of the contract provisions was that any suit on the contract was to be tried in Travis County, Texas. Plaintiff subsequently brought an action on the contract in Travis County, and defendants, contrary to their agreement, requested the trial court to transfer the action to a court of proper jurisdiction in Harris County, which was the proper county for suit under the applicable venue statute. In response, plaintiff argued that, since the contract created an obligation performable …

The Conflict Of Laws: A Comparative Study, Second Edition. Volume Three. Special Obligations: Modification And Discharge Of Obligations, Ernst Rabel

Michigan Legal Studies Series

The third volume of Ernst Rabel's comparative treatise on the conflict of laws was originally published in 1950. With the continued support ofThe University of Michigan Law School and the cooperation of the Max-Planck-Institut für auslaändisches und internationals Privatrecht in Hamburg, this second edition of Volume III has been prepared. Plans for the revision of Volumes I and II were made before the death of the author on September 7, 1955, and the work was carried to completion by Dr. Ulrich Drobnig of the staff of the Institut in Hamburg. We were fortunate in obtaining the services of another well-qualified …

Compulsory Oil And Gas Unitization: Effect On Overriding Royalty Obligations- A Hypothetical Judgement Of The High Court Of Juristic Review In Peter Fox Brewing Co. V. Sohio Petroleum Co., Maurice H. Merrill

Michigan Law Review

Jus, Chief Justice. As should be well known, our practice is to sit in review of decisions presenting elements of difficulty, and concerning the propriety of which there seems reason for doubt. We have no jurisdiction to reverse, to modify, or to affirm. Our judgment must be confined to approval or to disapprobation, or to some position between these two extremes.

Notice Requirements Of Guaranty Contracts, Richard F. Dole Jr.

Michigan Law Review

The following is an attempt to verify Corbin's educated guess through the application of factual analysis. If significant facts can be isolated which produce the same result regardless of the theory applied by the court, no real conflict can be said to exist. An initial exploration of the problems involved is a prerequisite to delineating the area in which factual analysis must be used.

Reflections On The Nature Of Labor Arbitration, R. W. Fleming

Michigan Law Review

The use of arbitration as a means of settling labor-management disputes has increased steadily in the past twenty years. Recent decisions of the Supreme Court have underlined the importance of the process. The natural tendency is to compare labor arbitration with the court system as an adjudicatory process. There are, however, significant differences between the two, and this needs to be better understood.

An intelligent evaluation of the differences, and of the labor arbitration tribunal in general, can be made only after an exploration of its origin and history, and after some consideration of the kinds of cases which are …

A Radical Restatement Of The Law Of Seller's Damages: Michigan Results Compared, Robert J. Harris

Michigan Law Review

Conventional doctrine does not address itself directly to the choice among valuation techniques, although the various parochial damage formulae give some clues. Underlying this series of articles is an assumption that the doctrine makes more sense when restated in valuation terms. These articles involve an effort to restate in such terms one sector of expectation damage law-the part that governs cases in which plaintiff is a "seller."

Attorney And Client- Attorney's Rights Under Contract Of Partial Assignment-Effet Of Premature Termination Or Settlement Of Action, Charles Frederickson S.Ed

Michigan Law Review

In an action for personal injuries, defendant caused a subpoena to be served upon plaintiff requiring him to appear to give his deposition. Plaintiff wholly failed to appear, and no cause was shown for such failure. Defendant then filed a motion for dismissal of the suit pursuant to subsection (c), 215a, of the Texas Rules of Civil Procedure, and notice thereof was served upon plaintiff. Although plaintiff again made no appearance, his attorneys moved to intervene, asserting the contingent interest in the cause of action acquired by their contract with plaintiff. The trial court denied the motion for intervention and …

Labor Law-Collective Bargaining Agreements-Implied Limitation On Management's Right To Subcontract, A. Paul Victor

Michigan Law Review

During the existence of a collective bargaining agreement which included both exclusive recognition and union shop clauses but did not include a management prerogatives clause, defendant employer, without the consent of the plaintiff union, contracted out janitorial work which had previously been performed by three of its employees. Subsequently, these employees were laid off and the plaintiff's protest, though in compliance with all grievance procedures, was unsuccessful. Thereupon, the plaintiff sought declaratory judgment relief under section 301 of the Labor-Management Relations Act, alleging that the defendant had no right to subcontract work customarily performed on its premises by its employees …

The Extension Of Insurance Subrogation, Spencer L. Kimball, Don A. Davis

Michigan Law Review

When an insured loss occurs under circumstances that make a third person liable to reimburse the insured, there are various possible ways to adjust the loss among the three persons involved. One solution would permit the policyholder to recover both on the insurance and from the third person, i.e., would permit double recovery for the loss. A second solution would give the third person the benefit of the insurance by denying recovery from him. A third solution would subrogate the insurer to the policyholder's rights against the third person. Combinations of these three solutions are possible by applying sometimes …

Insurance-Rate Regulation-Construction And Effect Of Guaranty Bond Agreement, Robert L. Harmon

Michigan Law Review

Plaintiff, an insurance agents' association and several other insurance companies and associations, instituted an action attacking an order of the State Board of Insurance. The order approved a guaranty bond form, together with rates and rules, which had been submitted to ,the Board pursuant to statute by the defendant insurance company. The guaranty agreement was an arrangement whereby defendant guaranteed payment of losses under fire insurance policies of other insurers in the event the latter should be unable to pay. Although the bond form was not restricted to any specific original insurers, it was contemplated that defendant would use ,the …

Labor Law-Collective Bargaining Agreements-Sham Exception To The Parol Evidence Rule In Welfare Trust Fund Agreement, John M. Price

Michigan Law Review

Defendant, shortly after commencing a small-scale strip-mining operation, signed a standard United Mine Workers collective bargaining agreement. He claimed that before signing he informed the union representative that he could not pay the union wage scale, or the specified royalty payments to the plaintiffs, trustees of the union welfare and retirement fund, and that he signed only after being assured that the agreement was a mere formality. Defendant did not pay union wages, and sent monthly checks to the plaintiffs only in amounts he felt he could afford. Plaintiffs brought suit on the written agreement for payment of the royalties …

Restitution--Quasi-Contract--Non-Conformance With State Building Contractors Licensing Statute As Basis For Denial Of Restitution, Stefan Tucker

Michigan Law Review

Defendants, owners of an apartment building containing stores and living units, contracted with plaintiff to replace the roof of the building. Pursuant to the contract plaintiff replaced the roof, and when defendants refused to pay for the work done, plaintiff sued in the alternative for damages on the contract or for restitution on an implied contract. Defendants moved for dismissal at pre-trial, contending that plaintiff was a residential alteration contractor and as such was required by state statute to have a license in order to bring an action for the collection of compensation. On appeal from pre-trial orders dismissing the …

A General Theory For Measuring Seller's Damages For Total Breach Of Contract, Robert J. Harris

Michigan Law Review

This article is concerned with the legal rules which should govern the process of valuing what plaintiff saved by exercising his power to stop further performance upon notice of defendant's serious breach. Where plaintiff is a "buyer" (whether he buys land, services, personality, or the temporary use of some kind of property), and he was to pay the price in dollars, few difficulties arise in valuing his saved performance. But if he was a "seller" of any of those commodities, valuation is hard. Thus our inquiry is chiefly concerned with cases in which plaintiff is a "seller," not a "buyer."

Taxation-Federal Income Tax-Strike Insurance Agreements, Robert A. Butler S.Ed.

Michigan Law Review

Contracts indemnifying persons or corporations for losses and damage resulting from an interruption of business due to strikes have existed at least since the beginning of this century. The Mutual Security Company of Connecticut, for example, wrote such a policy for the Buffalo Forge on April 9, 1906. In more recent times, strike insurance agreements have been instituted in major industries, and their impact on collective bargaining has been the subject of some controversy. The purpose of this comment is to consider the federal income tax questions which arise from such arrangements. Specifically, attention is directed to the deductibility of …

Concurrent Causation In Insurance Contracts, William Conant Brewer Jr.

Michigan Law Review

A great deal of work and thought has been devoted to concurrent causation problems in the field of torts. Less attention has been paid to the insurance cases, and no serious effort has been made to formulate the separate rules applicable to them. It is the thesis of this article that concurrent causation problems which arise under an insurance contract must be handled somewhat differently from those which arise in connection with tort litigation, and that the tendency to borrow rules of law from the larger tort field and apply them to the smaller volume of insurance cases can only …

Federal Antitrust Laws - Exclusive Dealing - Standards Of Illegality Under Section 3 Of The Clayton Act, Judd L. Bacon S. Ed.

Michigan Law Review

In a recent treatment of exclusive dealing arrangements, Tampa Elec. Co. v. Nashville Coal Co., the Supreme Court enunciates with some care the standards to be applied in judging the legality of requirements contracts under section 3 of the Clayton Act. This comment analyzes the merits and the impact of this needed clarification of a controversial area of antitrust law.

Exclusive marketing arrangements manifest themselves in various forms, and it is not uncommon to find more than one variety in a given contract. This inquiry, however, will be restricted largely to full requirements contracts, obligating a buyer to purchase …

Contacts - Subrogation - Partial Subrogation Of A Cause Of Action For Personal Injuries, Jerome M. Salle

Michigan Law Review

Plaintiff, an incorporated home for the aged, provided all essential medical care to one of its residents under the provisions of a life-care contract between it and the resident. On the basis of a contract clause which purported to subrogate plaintiff to the right of the resident to recover medical expenses caused by the negligence of third parties, plaintiff brought an action to recover certain medical expenses incurred from the party who was allegedly responsible for the injuries and death of the resident. The trial court sustained a demurrer to the complaint for failure to state a cause of action …

Past Practice And The Administration Of Collective Bargaining Agreements, Richard Mittenthal

Michigan Law Review

In a recent United States Supreme Court decision, Mr. Justice Douglas, speaking for the majority, stated that "the labor arbitrator's source of law is not confined to the express provisions of the contract, as the industrial common law-the practices of the industry and the shop-is equally a part of the collective bargaining agreement although not expressed in it." When compared to actual management-union experiences in contract administration, this dictum seems unduly broad. It may be premature as well, for no coherent "rationale of grievance arbitration" has yet been developed. If such a rationale is to be achieved, far more work …

No-Strike Clauses In The Federal Courts, Frank H. Stewart

Michigan Law Review

One consideration will support several promises. A promisor may extract more than one promise in return for his single undertaking to do - or not to do. It depends upon his bargaining power. His single undertaking may be so valuable that several promises are necessary to induce him to act, or not to act. He is privileged to hold out for the best deal. The law does not examine his motives or reduce his demands. And from this arises the common- law principle that one consideration may support several promises.

Conflict Of Laws-Law Applicable In Federal Courts-Federal Law Applied To Contractual Relations Of Admiralty Lawyer, Robert E. Thorne S.Ed.

Michigan Law Review

Plaintiff attorney was retained by a Spanish seaman to prosecute personal injury claims under the Jones Act and the general maritime law. Defendant shipping company induced the seaman to fire his lawyer and to recover instead under his Spanish employment contract. Plaintiff sued the shipping company in tort for interference with contractual relations. In a federal diversity suit, held, for plaintiff. Federal common law should be applied to determine the validity of the contract and the claim of tortious interference with it. Greenberg v. Panama Transp. Co., 185 F. Supp. 320 (D. Mass. 1960).

Sales - Privity - Disclaimer Of Implied Warranty, Richard W. Odgers

Michigan Law Review

Husband purchased a new automobile from a dealer. The contract of sale contained on its reverse side an express warranty from the manufacturer to the "original purchaser" providing for the replacement of any parts which were returned to the manufacturer and were in its judgment defective. The warranty was " ... expressly in lieu of all other warranties expressed or implied .... " The dealer warranty was substantially identical to that extended by the manufacturer; both adhered to the form prescribed by the Automobile Manufacturer's Association. Shortly after the delivery of the automobile, wife was injured in a collision caused …

Labor Law - Arbitration - Restriction Of Judicial Intervention Into The Arbitration Process, James J. White

Michigan Law Review

Respondent company laid off a number of employees as a result of its decision to contract out maintenance work formerly done in the company shop. After the grievance procedure failed to resolve petitioner union's claim that this violated the contract provision against lockouts, and the company refused the union's request for arbitration, the union sought specific performance of the promise to arbitrate contained in the collective bargaining contract. In dismissing the plea, the district court found that contracting out work was solely a function of management and therefore not arbitrable because the contract specifically excluded from arbitration "matters which are …

Sales - Implied Warranty - Privity Of Contract As A Prerequisite To Recovery From Manufacturer, John L. Peschel S. Ed.

Michigan Law Review

Plaintiff sustained injuries in the course of his employment when a defective abrasive wheel, while being used in its intended manner, exploded in his face. The abrasive wheel was purchased by plaintiff's employer directly from the manufacturer. Plaintiff sought recovery from the manufacturer on two grounds: negligence in the manufacture of the abrasive wheel and breach of implied warranty for fitness of purpose. The negligence issue was submitted to the jury, which returned a verdict adverse to the plaintiff. The manufacturer's demurrer to the cause of action based upon implied warranty was sustained by the trial court. On appeal from …

Contracts-Frustration Of Purpose, T. Ward Chapman S.Ed.

Michigan Law Review

The purpose of this comment is to discuss the doctrine in terms of its treatment by American courts. Attention will be given to the limitations which the courts have placed upon the doctrine, the degree to which they accept the doctrine thus limited, the rationales urged for the doctrine's acceptance or rejection, and the forms in which relief is given in frustration situations.

Real Property - Liens - Husband's Contract For Improvements On Land Owned Jointly With Wife, Judd L. Bacon S.Ed.

Michigan Law Review

A husband alone contracted for the construction of a house on property owned jointly with his wife. The wife inspected the progress of the work, took part in directing it, and later occupied the house. In an equity proceeding by the contractor to establish and enforce a mechanic's and materialman's lien on the premises for the balance due under the contract, the trial court rendered a decree for the contractor. On appeal, held, reversed. Since there was no showing that the husband contracted as an agent of the wife, and the evidence does not support a finding that she …

Conflict Of Laws - Release In A Tort Action - Effect Of Lex Loci Delicti And Contractus, Stanley A. Williams

Michigan Law Review

Plaintiff, defendant, and a third party were involved in a three-car collision in Virginia. Plaintiff settled an action against the third party's estate by executing a release, entered into in New York, in which plaintiff reserved any claims which he might have against the defendant. He then sued defendant, a resident of Pennsylvania, in a federal district court in Pennsylvania. The lower court, applying Virginia law to determine the effect of a release of one joint tortfeasor, dismissed plaintiff's action. On appeal, held, affirmed. The law of the place of the tort governs the effect of a release, not …

Stockholder Votes Motivated By Adverse Interest: The Attack And The Defense, Earl Sneed

Michigan Law Review

It is the purpose of this article to study stockholder votes motivated by adverse interest from the standpoint of the attack and the defense. First, the remedies available to the complaining minority are examined. Then follows a study of the indicia of adverse interest in specific shareholder actions. Knowledge of the nature and import of these indicia should enable the careful lawyer to avoid or defeat the charge that unconscionable adverse interest vitiated the result of a stockholder vote.

Labor Law - Arbitration - Determination Of The Question Of Arbitrability Under Section 301(A) Of Labor-Manabement Relations Act, Cecil R. Mellin

Michigan Law Review

Plaintiff- union brought an action under section 301 (a) of the Labor-Management Relations Act to compel arbitration of a grievance over the subcontracting of work by defendant-employer. The collective bargaining agreement provided that questions as to the proper interpretation or application of any of the provisions of the agreement would be submitted to arbitration and that all matters involving exclusively managerial functions were excluded from arbitration. The trial court held the grievance not arbitrable. On appeal, held, reversed. An implied covenant of good faith and fair dealings and the fact that some private arbitrators have held that the conventional …

Taxation - Federal Income Tax - Contract Right Income To Cash Method Taxpayer Who Refused Cash Offer, Eldon Olson

Michigan Law Review

During 1951 petitioner, a cash method taxpayer, executed a mineral lease. As part of the consideration petitioner was to receive an unconditional bonus or advance royalty of fixed amount. The lessee was ready, able and willing to pay the entire amount on execution, but at petitioner's request the contract provided for a small payment on execution with one-half the balance due on January 5th of each of the next two years. About one month before each due date the contract rights were discounted at a bank of which petitioner was a director. The lessee remained ready, able and willing to …