Time Magazine’s “person of the year” is the “protestor.” Occupy Wall Street’s participants have generated discussion unprecedented in recent years about the role of corporations and their executives in society. The movement has influenced workers and unemployed alike around the world and has clearly shaped the political debate.
But how does a corporation really act? Doesn’t it act through its people? And do those people behave like the members of the homo economicus species acting rationally, selfishly for their greatest material advantage and without consideration about morality, ethics or other people? If so, can a corporation really have a conscience?
In her book Cultivating Conscience: How Good Laws Make Good People, Lynn Stout, a corporate and securities professor at UCLA School of Law argues that the homo economicus model does a poor job of predicting behavior within corporations. Stout takes aim at Oliver Wendell Holmes’ theory of the “bad man” (which forms the basis of homo economicus), Hobbes’ approach in Leviathan, John Stuart Mill’s theory of political economy, and those judges, law professors, regulators and policymakers who focus solely on the law and economics theory that material incentives are the only things that matter.
Citing hundreds of sociological studies that have been replicated around the world over the past fifty years, evolutionary biology, and experimental gaming theory, she concludes that people do not generally behave like the “rational maximizers” that ecomonic theory would predict. In fact other than the 1-3% of the population who are psychopaths, people are “prosocial, ” meaning that they sacrifice to follow ethical rules, or to help or avoid harming others (although interestingly in student studies, economics majors tended to be less prosocial than others).
She recommends a three-factor model for judges, regulators and legislators who want to shape human behavior:
“Unselfish prosocial behavior toward strangers, including unselfish compliance with legal and ethical rules, is triggered by social context, including especially:
(1) instructions from authority
(2) beliefs about others’ prosocial behavior; and
(3) the magnitude of the benefits to others.
Prosocial behavior declines, however, as the personal cost of acting prosocially increases.”
While she focuses on tort, contract and criminal law, her model and criticisms of the homo economicus model may be particularly helpful in the context of understanding corporate behavior. Corporations clearly influence how their people act. Professor Pamela Bucy, for example, argues that government should only be able to convict a corporation if it proves that the corporate ethos encouraged agents of the corporation to commit the criminal act. That corporate ethos results from individuals working together toward corporate goals.
Stout observes that an entire generation of business and political leaders has been taught that people only respond to material incentives, which leads to poor planning that can have devastating results by steering naturally prosocial people to toward unethical or illegal behavior. She warns against “rais[ing] the cost of conscience,” stating that “if we want people to be good, we must not tempt them to be bad.”
In her forthcoming article “Killing Conscience: The Unintended Behavioral Consequences of ‘Pay for Performance,’” she applies behavioral science to incentive based-pay. She points to the savings and loans crisis of the 80's, the recent teacher cheating scandals on standardized tests, Enron, Worldcom, the 2008 credit crisis, which stemmed in part from performance-based bonuses that tempted brokers to approve risky loans, and Bear Sterns and AIG executives who bet on risky derivatives. She disagrees with those who say that that those incentive plans were poorly designed, arguing instead that excessive reliance on even well designed ex-ante incentive plans can “snuff out” or suppress conscience and create “psycopathogenic” environments, and has done so as evidenced by “a disturbing outbreak of executive-driven corporate frauds, scandals and failures.” She further notes that the pay for performance movement has produced less than stellar improvement in the performance and profitability of most US companies.
She advocates instead for trust-based” compensation arrangements, which take into account the parties’ capacity for prosocial behavior rather than leading employees to believe that the employer rewards selfish behavior. This is especially true if that reward tempts employees to engage in fraudulent or opportunistic behavior if that is the only way to realistically achieve the performance metric.
Applying her three factor model looks like this: Does the company’s messaging tell employees that it doesn’t care about ethics? Is it rewarding other people to act in the same way? And is it signaling that there is nothing wrong with unethical behavior or that there are no victims? This theory fits in nicely with the Bucy corporate ethos paradigm described above.
Stout proposes modest, nonmaterial rewards such as greater job responsibilities, public recognition, and more reasonable cash awards based upon subjective, ex post evaluations on the employee’s performance, and cites studies indicating that most employees thrive and are more creative in environments that don’t focus on ex ante monetary incentives. She yearns for the pre 162(m) days when the tax code didn’t require corporations to tie executive pay over one million dollars to performance metrics.
Stout’s application of these behavioral science theories provide guidance that lawmakers and others may want to consider as they look at legislation to prevent or at least mitigate the next corporate scandal. She also provides food for thought for those in corporate America who want to change the dynamics and trust factors within their organizations, and by extension their employee base, shareholders and the general population.
Permalink | Agency Law| Books| Business Ethics| Business Organizations| Contracts| Corporate Governance| Corporate Law| Crime and Criminal Law| Economics| Empirical Legal Studies| Employees| Enron| Junior Scholars| Law & Economics| Law & Society| Management| Organizational Theory| Politics| Sociology| White Collar Crime | TrackBack (0) | Bookmark
I am sitting in Lubar Commons at the University of Wisconsin Law School, attending the excellent conference honoring the work of Stewart Macaulay. (If you want to access Stewart's papers, you can find them here.) I have written about Stewart's famous 1963 paper on several occasions (see, e.g., here and here), and my contribution to this symposium returns to that work, although with a slightly different focus. In the "Social Dimensions of Opportunism," I argue that contract law serves the valuable function of boundary enforcement. Rather than regulating all of the deviations and adjustments that are common in contractual relationships, an important role of contract law is to constrain extreme deviations from social norms, thus reinforcing agreements precisely in contexts where informal social sanctions are weakest.
While many of the presenters are focusing on the 1963 paper, I am enjoying the chance to become more closely acquainted with Stewart's other works. My contribution and the contribution of my co-panelist, Bob Scott, both depend significantly on Stewart's 2003 paper, The Real and the Paper Deal, which should resonate with those who write about incomplete contracts. By the way, Bob is concerned about the decline of relational scholarship in the legal academy, and he calls for a reconciliation of economically and sociologically oriented relational contract scholars. Good stuff.
Ethan Leib has written an interesting analysis of consumer contracts ("What is a Relational Theory of Consumer Form Contract?"), using Stewart's 1966 paper, Private Legislation and the Duty to Read -- Business by IBM Machine, the Law of Contracts and Credit Cards, as a springboard. And I am particularly interested in a paper by Gillian Hadfield and Iva Božović entitled "Scaffolding: Using Formal Contracts to Build Informal Relations to Support Innovation." The authors have done a rough replication of Macaulay's 1963 study, interviewing California business people rather than Wisconsin people. In this paper, the authors argue that formal contracts and contract doctrine serve as "scaffolding" for the development of the contracting relationship.
The conference is still going -- and someday these papers will appear in a conference volume -- but this has been another great production by the Wisconsin contracts group.
This post comes to us from Erin O'Hara, Professor of Law and FedEx Research Professor at Vanderbilt University Law School. The post is a follow-up to our Roundtable on Teaching Contracts. You can view all the posts in this Roundtable here.
In the Fall of 2007, I undertook to teach my Contracts course in a way that helps students to develop transactional skills. It seemed shameful that most students leave the first-year course without ever seeing an actual contract. I wanted to expose students early to the work of transactional attorneys, especially given that about one third of practicing lawyers earn their livelihood in this way.
Like the earlier contributors to this discussion, I began to think about changing the course on the margin. Maybe I could show the students some real contracts or add a negotiation or drafting exercise, but as mentioned already in this discussion, it was indeed difficult to add materials to an already crammed four-hour course. When I expressed frustration to my then dean Ed Rubin, he responded by suggesting that I needed to throw out the traditional contracts course and start over in order to make room for a modern approach to the subject. The suggestion seemed ludicrous to me at first, but once the message had time to sink in, I realized that Ed was right.
Contracts may be the only law school course that spends nearly all of the semester at the edge of the subject and almost no time at the subject’s center. Professors teach about distinctions: the difference between promise and contract, between contract and tort, between contract and property, and between enforceable and unenforceable promises. With all of these topics, the course attempts to define the boundaries of the subject matter of contract, and in the end students learn far more about what contract is not than they do about what contract is. Ed convinced me to start at the center of contract and move outward from there.
The center of contract is about negotiating and drafting an agreement and/or a change in anticipation of the fact that one day the parties (with or without the aid of a court or arbitrator) will have to determine what that contract means. The vast majority of contracts that lawyers draft do not result in formal disputes, and, when they do, the parties fight much more often about what the contract provides than they do about whether they have a contract. These are the issues that should dominate in Contracts.
These issues are difficult issues for first-year students to grapple with because most have no experience with the subject matter at hand. Stories about hairy hands and Harrier jets and promises to marry resonate with the students, but warranties and conditions and due diligence seem far more remote. Students needed context to begin to grapple with these issues, so I began to look for a simple story that could draw the students into the world of transactions and the role of the lawyer and the contract in that transaction.
Claire Hill provided me with the best possible story: a play that comprised the last chapter of James Freund’s book, Anatomy of a Merger. The play enabled the students to imagine the transactional setting and to begin to understand the role of the lawyer in that setting. The play enabled the students to better grapple with the concepts of risk assignment and conditions and warranties. It gave the students an appreciation for the importance of carefully crafting contractual language and of gently focusing the client on possible problems that can be avoided or minimized with contract language. This play, along with some supplemental materials, provided the basis for a short one-week unit introducing students to The Contracting Environment.
Unit II focused on Contract Interpretation, a subject we covered for 4-5 weeks. We focused on the distinction between promise and condition early and often in this course. I will confess that I left my first-year Contracts course not really understanding what a condition was. In contrast, my students truly understood their function by the end of the semester. We explored the difficulties that can arise with ambiguous contract language, and in the process covered the canons of construction and the use of evidence outside the writing. We then covered default rules and explored the difficulties and benefits of silence in contract drafting. Finally, we covered change and modification and the good faith obligations.
Unit III covered Breach and Remedies (including both damages and self-help provisions). Unit IV covered Contracts of Adhesion. The syllabus included a separate unit on these contracts because in the first several weeks of the course we had studied the negotiation and drafting of contracts by sophisticated commercial parties and their lawyers, and I wanted the students to focus on the important differences between the two contract settings. A final unit, about 3 weeks long, explored contracts/promises that are not enforced. We covered lack of agreement, lack of consideration, formalities, public policy, and impossibility, impracticability, and frustration of purpose in this last unit. In the end, the students were exposed to virtually all of the concepts that they need for their upper-level courses and for bar-exam study (we unfortunately did not cover third-party rights).
Throughout the course we looked at actual contract provisions. In addition, three exercises were used to force the students to apply the course concepts. In week 4 students critiqued a very basic band booking agreement (this is Nashville!), in week 7 students drafted a simple requirements agreement (after giving them a detailed factual scenario), and in week 10 they negotiated and drafted a provision covering the circumstances under which the tenant could withhold rent from the landlord in a commercial lease setting. In week 12 students were invited to attend a lunchtime panel with 5 transactional lawyers who described their practices and talked with students about the world of transactional lawyering. Some of the panelists have served as mentors to the students interested in a transactional practice. The final exam asked students to critique and propose changes to two different contracts. In one, the lawyer was representing the client who was one of the parties to a commercial transaction where the other party had produced the first draft. In the other, the student was placed in the role of new in-house counsel asked to explain to a corporate officer the significance of the provisions in her predecessor’s draft sales agreement and to comment on any provisions that might not be legally valid (many of the customers were ordinary consumers).
I expected the students to excoriate me in their evaluations at the end of the semester. Surely the students would conclude that they had been turned into guinea pigs for some strange pedagogical experiment that robbed them of the sense of comfort that accompanies their reliance on textbooks and study aids (not to mention my old Contracts exams). I was prepared for the beating because I believed in the worth of the course change. In fact, however, I received the highest teaching ratings I have ever received at Vanderbilt. Students completely understood that 21st century law practice was based much more closely on the materials to which they were exposed than they were on the cases studied in the other Contracts section. Student comments indicated that they believed that the innovation was valuable and that their professor was working extremely hard to deliver to them a better educational experience.
The students did not just appreciate the effort being made to reform the course. They actively engaged the materials in a manner that showed that they understood what could be exciting and rewarding and yet difficult about transactional legal practice. For example, a number of students raised practice-relevant ethical issues during the course of the semester, including the circumstances under which the client should be advised to disclose disadvantageous information to the other party. And several expressed interest in transactional practice because it seems like a positive sum game. Others have written about how law schools manage to turn student excitement into cynicism and depression in just one year of law school. The causes for dissatisfaction with the prospect of practicing law are many, but one surely is that litigation is at best a zero-sum game and often a negative sum game. A transactional course enables the students to envision a legal practice in which the parties that they represent can all benefit from the transaction and the lawyers’ efforts. For several of my students, this was both comforting and energizing. I didn’t intend to engage the students on ethical issues or career satisfaction, but the approach of the course did produce these consequences. Enrollment in our upper-level transactional courses has skyrocketed, and my students tell me that they feel much more comfortable in these courses than do the students who were not exposed to a transactional perspective in Contracts.
The materials assigned were terrible in the sense that they required both the students and the professor to work harder than necessary. I assigned the Farnsworth hornbook to give the students a sense of the black letter law that they would need to respond to with their contracts. Unfortunately, however, the extensive detail of the hornbook when used as primary material rather than as review material caused unnecessary stress for the students and countless hours of explanation back in my office. Those materials were supplemented with Restatement and UCC provisions as well as a few cases. (I left to the other first-year professors the task of learning to read a case to distill its legal principles and instead primarily used the cases in Contracts to show students some of the situations that can arise and the ways that courts can treat contract language in addressing those situations.) Nothing tied these materials together, so I wrote a series of unit memos to provide them with needed thematic direction.
At Vanderbilt I had the luxury of being granted a semester’s research leave as my reward for my investment in the course. Without that bargain I frankly would have continued to muddle along with the traditional casebooks because the cost to my research while revising the course was significant and I needed to know that I would get that research time back somehow. My goal in the next two years is to produce the course materials necessary for others to teach Contracts from a transactional perspective without giving up substantial research time. Currently available course materials make it possible to add transactional garnish to a litigation-based course, but we can and should provide out students with more than just a garnish in the first year.
Usha and I would like to thank our guest panelists in this Roundtable on Teaching Contracts: Larry Cunningham (George Washington), Gillian Hadfield (Univ. of Southern California), and Claire Hill (Minnesota). Erin O’Hara (Vanderbilt) will be making some follow-up comments on the roundtable later in the summer.
They have provided a marvelous discussion and some wonderful insights on teaching. You can access the entire roundtable here.
This coming Thursday and Friday, June 16-17, the Conglomerate will be hosting our second Teaching Roundtable ofthe summer. We are delighted that a new cast of law professors will be discussing teaching the course in Banking Law/Financial Institutions.
One comment to the Roundtable asked for suggestions for exercises in contract interpretation, analysis, and drafting. It is a great question, because being able to pull things off the shelf makes the upfront costs of innovating in the classroom a lot lower.
Gillian already mentioned the exercises available on her web site. I already mentioned the Harvard Program on Negotiation clearinghouse for negotiation exercises. I'd be interested to hear if our panelists have other suggestions.
We wanted to keep the summer roundtables away from discussions of which case book is better. But, without endorsing any of the following, here is a very incomplete list of books and resources that offer contract simulations and exercises (this list is just based on what I have in my office; my apologies if I leave someone's book out):
- Tina Stark, Drafting Contracts: How and Why Lawyers Do What they Do;
- Sue Payne, Basic Contract Drafting Assignments;
- David Zarfes & Michael L. Bloom: Contracts: a Transactional Approach;
- Thomas R. Haggard, Contract Law from a Drafting Perspective: An Introduction to Contract Drafting for Law Students;
- Thomas R. Haggard & George W. Kuney, Legal Drafting: Process, Techniques, and Exercises;
- Scott J. Burnham, Drafting and Analyzing Contracts.
(Please note: none of these authors have asked me to recommend their books. If others have alternative suggestions, please leave them in the comments. Since case book authors take quite a bit of pride in their work, professors are understandably reluctant to offer reviews or criticisms online).
Tina Stark has also organized an exchange for transactional teaching materials on Emory's web site. I confess to not having asked for a password for this exchange yet.
Prawfsblawg had a great series of guest posts last summer on advice on teaching various courses (Things You Oughta Know if You Teach X). Jeff Lipshaw authored a great post on teaching contracts, in which he makes additional suggestions for resources.
I agree completely with Claire that a) we can do less doctrine in first year contracts and b) a key goal is to get students to not leave so much of their own experiences and pre-law way of seeing the world at the door. And she's right that the main goal is to get them thinking about what a client is trying to accomplish--and what other parties are trying to accomplish--and to use that as the framework for analysis. That's one reason I like to give students the fact scenario for their first two assignments on day one of the course. To emphasize that they want to start thinking about this problem like any person would. And because before they are clouded with doctrine, they connect with a much wider range of considerations. We are of course training them to be able to apply legal filters to sort issues in ways non-lawyers don't--but I find it really helps for them to see how their analysis of the problem shifts as they start to learn some rules. This also gives them some additional motivation in the course as they can see what they are learning. As for thinking about client goals, this is what I emphasize in the explicit teaching of judgment as a framework. Judgment for a lawyer means making choices about what to focus on, what alternative theories of the case to go with, which facts to emphasize , which to downplay--all within the context of achieving goals. Hence my students learn that it's poor judgment to focus on an issue that gets the client $50 (breach of a low-value term--however nifty the theory is or however great an application of the parol evidence rule...) when there's another strategy that secures $50,000. Or to focus on a strategy that depends on an argument that faces killer counterarguments. I really felt like I had done my job a few years ago when at least half of the final exams dealing with the fact scenario involving mortgages, refinancing pressure and a horse farm started out with a few notes by the student under the heading "What does Maggie want?" And a sizeable number then sketched 4 or 5 possible strategies/theories of her situation. I don't grade that stuff but it tells me right up front that the stuff I do grade--what issues did they identify in their outline and how well; what issue did they choose as important; how well did they execute detailed analysis of that issue--was done within a framework that gave them a running start out of the gates.
I haven't taught contracts for a few years, but I hope, when I do so again, to do something along the lines that have been discussed in this Forum. I envision refashioning the course so that it has much less doctrine, some (simple) theory, and some simulation. (I have taught advanced transactional courses along these lines, with considerable simulation and some theory.) I think contracts students don't need as much doctrine as the traditional course gives them (except for the bar-- and they can get that in the bar review.) I think law school is a terrific place to get students to intuit theory from experiences of their own ('if you were buying a car, what would you worry about, and why' to 'what sorts of things potentially benefit sellers at the expense of buyers.') Indeed, by theory, all I mean is a way to understand what parties might worry about and try to deal with in contract documents. I know this was needed when I went to law school and started practice, admittedly quite a long time ago; I am told by law firm partners that many new associates are still trying to learn by osmosis, figuring out 'what contracting parties typically do' rather than starting with 'what the parties might be trying to do.' I think it would be great to do simulations involving both subject matters that may be more familiar to students, and subject matters that seem far less familiar, like buying a company. In my experience, students sometimes take more to heart the 'we will teach you to think' 'legal reasoning is a new and different skill, one you didn't have before' mantras than is good for them. They may never have bought a business before, but stepping back and considering how it compares to things that have done can get them a certain ways, I think, and build much-needed confidence.
One thing I've seen somebody else do that I thought worked quite well: students were given the broad outlines of a deal a "client" was interested in. The "client" came to class, and the students interviewed him, asking him specifics about the deal as he envisioned it, and asking him his view about various issues they saw in what he said or what they knew of the deal.
Contracts is the least political course in the first year of law school, perhaps all of law school. I say keep it that way, and share that with students, despite how visionaries on the far left and far right may wish otherwise. I also think the course and its content should be made as clear and straightforward as possible for the students, not bogging down in every exception within the exception.
I agree that tailoring the contracts course to suit is no harder than any other professional task lawyers appointed to the job have handled. Start with getting samples of syllabi from senior colleagues, at your own school or from around the internet. Most books are packed with a combination of cases, notes, problems, drafting excecises, and so on. There are separate dedicated books chock full of drafting problems.
Review all these. Evaluate them with your specific situation in mind: your strengths and weaknesses as a teacher, your student's backgrounds and prospects, your school's needs and expectations for you given its standing and curriculum.
Rank them from best to worst and, then, as Ohio State's Doug Whaley once quipped, assign the second-best one and keep the best one for yourself. Assign small bits at a time and discuss everything that is assigned.
Concerning eschewing the political, each chapter in my book, Contracts in the Real World, ends with a short synthesis contending how contract doctrine occupies what I call the "sensible center" in law. Following is that from Chapter 2, entitled "Facing Limits: Unenforceable Bargains."
As a matter of policy to promote freedom of contract, courts usually enforce contracts as written, without specific review of the terms. If terms show a contract was formed, courts enforce them. Fairness is not a court’s concern in contract cases. Some deals, however, are struck on surprisingly lopsided terms, like a simultaneous exchange of different amounts of money or as the product of extortionate threats.
Courts struggle with whether to enforce bargains that appear in unconventional settings, such as parenting, or romance, where bargains are unlikely; or involve activities that are illegal, like gambling or prostitution, or unsavory, like adultery. Deals suggesting lack of true bargain or verging on illegality provoke judicial attention—and are often ruled unenforceable, sometimes by declaring they lack consideration.
Visionaries on the left and right alike object to this balanced approach. Devotees of a greater formalism rebuke any judicial second-guessing of the bargains people make. It should be irrelevant whether a trade is made of different amounts of money or for nominal consideration like $1. People should be free to strike bargains on any subjects they wish with equal dignity—whether deals about paternity, parenting, palimony, adultery or gambling.
Promoters of a greater contextualism would give judges broader license to police not only bargains signaled to be suspect by the form or amount of consideration but a wider range of terms deemed objectionable. That could include authorizing a more probing evaluation, on the grounds of public policy, of contracts not only that may be the product of extortion but about babies, among paramours or between adulterers or sisters playing slots.
These stances are problematic in opposite ways. Greater formalism has the virtue of promoting freedom of contract and increasing the security of exchanges. But expand that freedom infinitely and lose any space for social control. It is difficult to deny that there is at least some utility in some avenues of social control—almost certainly for anti-extortion laws but probably for the regulation of other activities strongly affecting the public interest.
In contrast, excessive zeal for social control constricts a desirable space for freedom of contract. By inviting judicial second-guessing of all bargains, such zealotry would destroy certainty about the security of exchanges. Reasonable people may differ about where to draw the line between freedom of contract and social control.
Contract law’s exact division may not always be clear and can be contested on any given issue. But it seems pragmatic and prudent to enable a wide scope for freedom of contract accompanied by a modicum of oversight to thwart extremes and police gray areas. That, in any event, is the best description of prevailing contract law. And these are not the only tools available to mediate between the extremes. Just because people make a valid contract does not mean it must be performed come hell or high water, as the next chapter shows.
One thing I have tried in many of my classes including Contracts is to add a small negotiation simulation component. It has been more of an experiment than a fully integrated part of the Contracts course.
My goals have been fairly modest. Among them: to expose students to a regular aspect of legal practice. (I remember in my 1L desperately looking for some other niche other than appellate advocacy.) I also want to get students to understand in a very hands-on way how contracts get made and to look at them as more than just exhibits in a lawsuit. I want to provide a corrective to my own tendency to focus too much of the classroom discussion on what lawyers in given case did wrong. As I have mentioned in posts several months ago, conducting an autopsy of cases may lead students to be too conservative in practice. Contract drafting exercises give students an appreciation for how difficult the lawyer’s craft can be.
Contract negotiation exercises add an extra dimension that may be under-emphasized in the business law curriculum generally. I have seen a lot of great exercises and simulations in various courses that involve planning and drafting for a client. There are a lot fewer that require students to engage in the even more difficult process of planning and drafting while sitting across the table from a counterparty. When do you compromise? When do you specify standards or remedies in a contract? When do you fall back on default rules or more general language? It sounds platitudinous, but the essence of contract is that it takes two to contract (unless you are drafting a unilateral contract for smoke balls). The negotiation dimension makes the discussion of any class involving private ordering a lot richer and more complex. (And I agree with Usha, the Contracts may play a special role in bringing private ordering into the first year.)
And to be honest, I add a negotiation exercise not only to give students a sense of the difficulties of contract negotiation, but also its pure fun.
In other courses, I have found good negotiation exercises and simulations in case books (some suggestions in a subsequent post) or developed them myself. In Contracts, I have generally bought some of the simpler contract negotiation exercises that are available in the large offerings of the Harvard Program on Negotiation clearinghouse.
There have been some hitches. First, the Harvard materials are largely designed for teaching negotiation skills, not necessarily for use in a doctrinal class. Many of the exercises might be made better by reworking them to add more doctrinally relevant facts. It would also be wonderful if a clearinghouse had exercises designed for use in doctrinal classes.
Second, again, the limits of class time force us all to make hard choices about our teaching objectives. My aim in Contracts and in other courses is to give a taste of negotiation, but not to replicate a Negotiations course on the cheap. It is important to focus on what I want students to get out of the exercise. This means carefully planning (but not scripting) the class in which we do the post-negotiation debriefing.
Third, it has been hard to figure out when to hold the simulation and how to integrate it into the semester. It seems a little odd to have a negotiation when we are still discussing contract formation and formation defenses. Some students tend to get tripped up trying hard not to make or accept an offer inadvertently rather than focus on the simulation. In an ideal plan for the course, I would have a negotiation exercise before we talk about parol evidence and contract interpretation to allow the negotiation pairs to take a fresh look at what they wrote before to spot potential ambiguities that might create litigation exposure.
Despite these hitches and occasional glitches, adding a negotiation dimension to Contracts (and other business law courses) has seemed rewarding for the student. Can I admit that I have fun too?
I know that many law professors are worried that there is just no feasible way to revamp a first year course (or any other course!) to better meet all the critiques of traditional teaching, at least not without jeapordizing time available for research, colleagues, sleep, etc. But the changes I have made in the first year course are absolutely NOT time consuming; indeed, I'm very sure I spend the same amount of time teaching this way as I do in any traditional course. This comes from an integrated approach to change. You can download a package of sample materials from my course at my webpage (where you can also find articles I manage to write while teaching this way). Here is the basic outline of how this works and how I manage time constraints--my own and the number of classes in a 4 hour semester course.
1. Begin by establishing a clear understanding that a first year course can't and shouldn't do everything. My only goals in this course are for students to be adept at identiyfing issues, seeing how they relate, evaluating ambiguous facts, constructing fact-rich arguments and counter-arguments, exercising judgment, making strategic choices and generating conclusions about the relative strength of different strategies to achieve client goals. I do not try to teach a lot of theory or expose students to all the materials they should be exposed to over the course of a 3 year degree.
2. Then start with the end: the final exam. My final exam reflects the above goals. It is a single 3 page fact scenario. For half of the points (50) the students are asked to create an outline of the issues--no analysis, just organization into issues and sub-issues. Then they are asked to select one issue that they judge to be important to the advice they have to give; their choise is graded out of 20 points. Then they analyze that selected issue in depth, for 30 points. I can grade 6-8 of these an hour--and could easily give 70% of the grading to a TA with a grading sheet--because the outline of issues is just ticking off issues on the list I generate before I grade (I look over the outline of about 10 exams first as well to make sure I haven't missed something the students focused on) and the judgment score for any issue they might select is also pre-determined. Then I can evaluate their legal reasoning and analysis in depth in what turns out to be a short and focused section of prose. There are two more reasons this is quick to grade. First, the structure creates consistency across papers, so I never have to go back and readjust. Second, because as you'll see, the students have answered questions exactly like this in this format during the course--with feedback, class discussion and loads of peer discussion--the students are by and large all presenting coherent answers in form and substance. The differences that emerge reflect depth of understanding, creativity and analysis, not the randomness of realizing that I don't want them to focus on every issue--just what matters, (for example.)
3. Give the students 3 fact scenarios as the basis for 4 assignments during the semester. This requires creating 2 new fact scenarios each time I teach the course--because I always use last year's exam as assignment 4. I give them scenario 1 the first day of class and use it for the first two assignments.
4. Pare back your syllabus to make room for the work both you and they will do on assignments. You can see my syllabus in the materials on my website. (Keep in mind on the syllabus that I teach the course in an every-other-week structure so my classes for a given day are double-dose.) You'll see I cover all the highlights of a regular class but I don't teach all the cases on the doctrine--so maybe only one example each of liquidated damages and specific performance. I also find a few days for some theory, but it is just to give them a taste for future years.
5. Approach the problem-solving work by having students form in the first week or so into groups of 4 (if you have an odd number, you may need a few groups of 3--they get the option of not being graded on one of the assignments although they still complete it and hand it in for feedback.) I do this in a class of, say, 80 students. That's 20 groups of 4. This is the key to success for them and you: they benefit from the deep engagement with a group in solving problems and learning how ambiguos and variable perceptions of fact and argument can be; and you benefit because instead of grading 80 x 4 memos over the semester, you grade 20 x 4. And remember that your time spent grading is the time you would have spent preparing for two regular classes (because we devote two classes to discussing the problems after they're finished), and is reducing the time you spend grading the exam.
6. The first assignment is to create an issue outline for the problem -- drawing only on the rules and cases they have studied up to the date of the assignment. This is where you discover as an instructor that students don't naturally know what is a "legal" issue and they learn to start organizing their thinking into legal categories and logical relationships between issues (sub-issues). Everybody posts their groups memos online and all are required to read every other groups outline. You give them detailed margin notes and feedback to help them learn how to think in terms of issues, talk like a lawyer and see the logic of rules. Then you hold two classes (one of my doubled-up classes) discussing the memos. Asking groups to state what they thought was a sub-issue or not. Collecting votes on the board for which issues were included. I emphasize that an "issue" is a legal question that could plausibly come out both ways--not a checklist of the 3 required elements for the formation of a contract or a catalogue of all possible defenses. So they worry about what is an "issue"--how do they know what could be "plausibly" argued? I facilitate discussion of their ideas about this in class. They start to get it. I post my commented versions of all memos online for all to read and provide a general feedback memo with discussion of troublesome issues and pointing them to good examples for specific ways to handle something.
7. The second assignment is to choose an issue (they can expand their outline to include issues based on rules covered since the last assignment) that they judge to be important to the advice the client is seeking and analyze that one in depth. They struggle like crazy to get you tell them how they're supposed to know what's important. But the way they learn is by talking in their groups. Then they just have to pick something. Then they post their memos for all to read. Then we spend a double-class discussing--collecting the issues the groups chose, getting them to tell me how strong they concluded the client's position was on the issue they chose and why. They see the exercise of judgment; they develop their own. They see (aha!) why it wasn't such a hot idea to write about that really cool misrepresentation issue--because the client wants to enforce the contract.
8. Assignments 3 and 4 require them to do all three things: Prepare an outline, choose an important issue and analyze just that issue in depth. All are commented in detail, posted, discussed in class. You can see why students tell me that they are the least stressed about my final exam because they know exactly what I'm going to ask them to do; and that's also why it's fast and easy and consistent and fair to grade.
9. NOw the question you've all been dying to ask: groups and grading. Groups remain the same during the semester--students need the sense of a repeated relationship to invest in learning how to be a good team player. Yes, there are sometimes group conflicts but real problems are very rare (maybe 1 per semester). I collect confidential 'self and peer assessment' forms from each student (deposited in an online dropbox) after each assignment--students get a chance to tell me what's going on in their groups which helps them feel less frustrated if they are, gives me a heads up for fixing any brewing problems, and generally reveals that the majority of students are delighted to discover that the group work they thought they would hate, they love. They respect the intelligence and hard work and professionalism of their colleagues. Grading: Each group member takes a turn being the "point person" for a memo. The memo is graded out of 15 points. The point person gets the score out of 15 (eg. 12) and the others in the group get a pro rate score out of 5 (eg. 4). At the end of the semester each person has 15 points for "their" memo and 15 points for work on the other memos. Then I assign 10 professionalism points at the end of the semester for contributions in class and group--based on what I can glean from group interactions and feedback. The exam is worth 60 points although I use what flexibility I have in the grading curve to increase the weight on the final if it is significantly better than the in-course grade.
10. Students gain observable mastery over the course of the semester--and I can see as I go along what they are learning and what they are struggling with; this can vary from year to year. But I can see that while they struggle to organize issues at the beginning, they are competent at the end. While they don't see what's wrong with just throwing out pro-client arguments at the beginning, they do by the end. They may present what they think are arguments but are really just assertions ("she will argue this was reasonable") at the beginning, but few do at the end. They figure out--it turns out to be very hard--that a counterargument is not just another argument the other side could make; it responds directly and in a fact-rich way to an argument presented. If A says the history of the relationship of helping each other out makes it reasonable to believe that the statement "we're on" was a manifestation of intent to be bound, then B's counterargument has to address why it's not reasonable to conclude that from the history cited (because helping each other out in the past is about friendship, not contract--for example.) And whereas they are mightily distressed early in the course at the idea they will ever figure out what it means to say that's an "issue" (ie. something a lawyer needs to consider in crafting strategy) and which of the many issues they've identified is "important" to the advice they have to give, by the end very few are including non-issues in their outlines and on a recent exam 80% got full marks for their exercise of judgment.
I really like teaching this course this way--it's very engaging for both professor and student; and you really can see the impact of your teaching and adjust it to produce a better result as you go along. I now could not possibly teach a course in which I had no systematic way to see during the semester what the students are 'getting' and what they are missing. Try this out for one assignment in your course: you will be amazed (distressed?) to find out what you thought they were learning while you were talking about efficient breach and the minority rule in Minnesota.
This post comes to us Claire Hill from the University of Minnesota:
I want to echo the others’ thanks for organizing this roundtable. One thing I’ve found that holds students back is a ‘failure of the imagination’ that they don’t recognize as such. I find that students, hearing about a fact pattern- a hypo or a case- may see the situation through the lens of the party they most identify with, without realizing that they are doing so. They appraise rules and the application thereof from “their own” perspective. Students who have no or limited “real world” experience – students who have, for instance, not had extensive work experience, and have gone to law school right after college-typically seem to cast themselves as employees, buyers, and tenants. They may resist at will employment or be ready to find exceptions; they may be quick to imply the existence of a warranty when a buyer has received flawed goods or services or view sellers as having a very expansive default (and sometimes unwaiveable, or at least very difficult to waive) duty to disclose; they may interpret quite restrictively landlords’ ability to get rid of tenants who have done damage, haven’t paid on time, or have held wild late-night parties, etc.
In my experience, this tendency can, at least in the short term, be fairly easily surmounted, simply by pointing it out. Students’ initial identifications may be supplanted as they become lawyers, both because of their own experiences and because of the types of clients they may have. Moreover, being asked to ‘represent one’s client’ in a classroom exercise would be helpful as well to this end. But the ‘supplanting’ may simply substitute one perspective for another: this issue isn’t just about canonical perspectives – it’s about implicit and subconscious identifications more generally, which is relevant for students not just in their capacity as future lawyers, but also as future policymakers, judges, etc. I think that a useful complement may be express discussion of the issue, with regular reminders as it arises.
I’m very curious to know what others think – do you think this is an issue for students? If so, what ways have you found to deal with it?
I won’t pretend to have the teaching credentials of our panelist, so I will stick to a role as moderator. In response to Gillian’s provocative posts, I have seen that same worrying phenomenon in upper level courses: students struggling when asked to apply legal analysis in a sustained manner to provide advice for a client in complex scenarios. I’ve seen it in problem solving exercises in Business Associations, in semester long simulations such as Business Planning (if any of my current students in that course happen to read this: please don’t fret – this is not a reflection on your performance or your soon-to-be-released grades), and even in the one semester in which I taught in New Mexico’s Business and Tax Clinic.
Let me suggest that there may be at least two variations on this problem. In the first variation, students who are very good at extracting legal rules from cases struggle when asked to apply legal rules to give advice to clients to plan their affairs prospectively. These students do well spotting issues in the context of an existing litigation or threats of future litigation. But when asked what a client should do to mitigate risk or advise a client on a transaction, they sometimes become uncomfortable moving beyond a recitation of legal rules.
In the second variation, students (often those with work experience before entering law school) are very comfortable switching to planning mode. However, many resist working through the details of legal analysis. Here a common problem is looking at simulations primarily from a business perspective and leaving the nitty gritty legal analysis to others.
In either variation, students struggle with the ambiguities inherent in legal analysis.
I write this to fault neither students nor first-year teachers. Often the problem may lie in the way I ask the questions and structure the simulations. But generally, I’ve treated Gillian’s challenge – to get students engaged in sustained application of legal reasoning to complex and ambiguous fact patterns – as something I can address in advanced classes. But her provocative post makes me uncomfortable with that judgment and wonder what I could be doing in the first year Contracts course. Are we wasting a valuable opportunity in the first year? Is the first year conditioning students to treat law as too mechanistic? Do we suffer too much from what a colleague of mine has called the syndrome of treating each class as “three cases and a cloud of dust”?
I’ll let others weigh in, but let me highlight a few overarching challenges and constraints that we all must face in teaching Contracts.
First, time is extremely scarce. As Usha noted in her post, one has to make tough choices of how to use the 40 or so class meetings in a semester most effectively. My initial list of questions should not be taken as an indication that we should do more of everything (and turn the amps up to 11).
Second, although I think that the concern with doctrinal “coverage” can be overblown, it can be difficult in upper level classes if students have not been exposed to things like liquidated damages or specific performance.
Third, as my introductory post hinted, part of my concern is that the first year courses may largely duplicate each other in terms of basics of legal analysis, as well as teaching methods and objectives. More coordination might be in order to ensure that students are not taught the same basic “stuff” (let’s say the role of trial courts versus appeals courts and standards of review) in five different classes, while ensuring that students get some reinforcement and that valuable lessons don’t slip through the cracks. (To give an example based on a party conversation from last night: how many 2Ls and 3Ls are clear on the basic differences between a statute and a regulation?) I write about the need for coordination with trepidation, as I personally dread sitting through long meetings about pedagogy.
Fourth, professors’ own time is scarce. It is time-consuming to develop one’s own teaching materials and there are strong disincentives to doing so even if you already have tenure. So following up on one of the questions in the comments to our roundtable, I wanted to ask Gillian and our panelists:
Are there particular simulations or collections of simulations you would recommend? (I’ll do a separate post on this later).
Fifth, assuming you agree with Gillian’s approach, is the solution a wholesale revision of the first year course or more incremental change?
Sixth, after reading Gillian’s posts, I am wondering how the evaluation and grading works. How do you balance giving the kinds of hands-on feedback that is necessary to hone the type of judgment that she describes with the demands of teaching a large class?
I am sure some of our readers are still slogging through spring grading. On the one hand, we all take a lot of time to grade exams in a fair and thorough manner. But is anyone else left with the sinking feeling that, for all our work on exams, students may not be getting the message on how to improve and grow as lawyers? How do you handle evaluation?
Seventh, first-time Contracts teachers face a greater challenge. She or he will be getting lots of advice on things to add to a course, but, again, there is not room for everything (I learned this the hard way). Innovation can be risky and the first time classroom not particularly forgiving. What advice would our panelists give to the rookie teacher? What should be the focus in her or his first Contracts class?
From the mutual-admiration-but department, I likewise applaud Gillian's perspicacious assessment of the need to teach the basics before we add spins and his appeal to the vibrant problems he describes that sound like excellent teaching devices. In reply to his second post today, however, it reminds me of how the conversation Erik has invited, and that we are having, has been going on in pretty much the same way and involving pretty much the same range of issues, since about the time of C.C. Langdell in the late nineteenth century.
That is certainly the case for basic questions such as the role of stories, transactions, and problems in the contracts course, as well as the distinction Gillian's second post raises between a course about contracts and a course involving the practice of contract analysis. Drawing on a forthcoming chapter I've written for a book Ed Rubin has edited on the future of the law school course book, in reverse order, then:
1. Knowledge or Skills? For more than a century, law teachers have debated whether the purpose of legal education is the delivery of knowledge (the transfer of information) or the development of ability (specifically analytical reasoning). Since Langdell, along with his creation of the casebook, ensconced the law school in a graduate level university program, law teachers have also debated whether legal education is professional training or academic exploration.
In my view, it is both sides of the two dichotomies in different measures. To find the optimal mix, one must appreciate the vast difference between law school and law practice. Even within the most practice-oriented clinic, students remain students and lawyers are the lawyers. But there is also an intimate connection between law school and practice; even in the most theoretical and abstract seminar, students are becoming lawyers. In addition, it seems clear that in both these educational settings, as well as others, the students are acquiring both knowledge and skills.
2. Problems. To those only casually acquainted with the history of the case method, contemporary enthusiasm for teaching problems may seem like a novel pedagogic strategy. But problems have a long and distinguished presence in law teaching dating back nearly a century. In 1922, the prescient Contracts teacher Henry Ballantine stressed the importance of using problems rather than or in addition to cases. They are needed to position law students in the place practice will put them, he wrote, as a “lawyer and investigator . . . seeking the solution.” Ballantine added: “Our case-books and case method of instruction still have undeveloped possibilities.”
In a similar spirit, Lon Fuller, father of the contemporary course book, stressed skills training in his 1947 Contracts book. It featured problems throughout to train students in lawyering skills. In two chapters towards the end of the book the exercises intensified, focusing on the dynamic context of conditions, and devoting “attention to problems of draftsmanship” and “problems of counseling and negotiation which may arise when a condition has not been fulfilled or when the other party has defaulted.” Conditions, after all, is the ultimate place in the first-year where law is actively trying to get parties to work together and avoid litigation, to protect the exchange and breach and preserve the fruits of bargain and promote the institution of contract.
The Fuller book was innovative in its time, and these features that made a “stimulating contribution” to “training in lawyers’ skills” show how truly modern it is. In 1975, two generations later and two generations ago, Charles Knapp’s course book contributed similarly valuable materials to build lawyering skills. As described by Karl Klare, Knapp’s “doctrinal exposition is organized around a series of skillfully drafted hypotheticals, posing difficult counseling issues.” After expressing enthusiastic approval of this approach, Klare opined: “the problem-solving and counseling emphasis is further confirmation of the coming demise of the casebook method of instruction.”
That prediction overlooked how the problem method and the casebook are not antithetical but complements—true at least since Fuller’s 1947 book. The Knapp book remains such a complementary combination of cases, materials and problems, through its 2006 sixth edition.
3. Transactions. Many are amazed that standard Contracts courses in American law schools do not necessarily involve presenting an actual contract to the class, although fragments may appear via the cases. Of course, many casebooks do present contracts and many teachers supply them separately. Drafting exercises even occur. But an interest in the more extensive use of transactional materials has emerged in the past generation, building to a widespread movement today.
To be sure, this is also not exactly something new under the sun, as it was pioneered by William O. Douglas as early as the 1930s. Many books today lend themselves to a pedagogic approach that stresses the lawyer as counselor, adviser, and deal coordinator, rather than merely as litigator. There are practical limits, however, as one of Erik's introductory questions suggestss: the need to spend time covering nuts and bolts topics as well as the sheer matter of volume.
Materials required for rigorous instruction in contract drafting, as well as negotiation and counseling, may span hundreds of pages for a single transaction—many multiples of the pages required to present a judicial opinion, with its appended notes and questions. Even short documents, such as an interest rate swap, or those of moderate length, such as a residential lease, are difficult to walk anyone through. I like Usha's contribution today, which involves allocating a week or so to particular commiment to this dimension.
4. Stories. Story-telling has become an increasingly popular pedagogic strategy throughout the curriculum in recent years. Evidence includes the Stories series edited by Paul Caron and the expanding interest in legal archeology. Again, this is often seen as more novel than it is. Harold Shepherd in 1948 celebrated Fuller’s notes providing additional facts about cases by quipping that the first year is not too soon to let students know that appellate opinions do not provide the full story of a case.
Still, story-telling appeals strongly to some scholars and teachers today, particularly those interested in literary, multi-cultural or outsider approaches to law. That is epitomized in Contracts by the Kastely/Post/Ota casebook, in which literary excerpts woven throughout the material illuminate the context. Their book is imbued with a humanism that more traditional casebooks eschew. This trait is worthy to provide examples of excellent, persuasive, writing to students, regrettably rare in judicial opinions historically afflicted by legalese.
* * * * *
The upshot? There are many ways to teach contracts, and there are many different valid answers to the questions Erik posed--questions and answers that have been asked and given for a century and, if all goes well, for centuries to come. For me, I like a thick combination: stories, problems, deals, and cases, organized to show the wonderfully rich, dynamic and world of contracts, a field that does play a special role in the first-year, as the self-help goals of the doctrine of conditions underscores.
I really like Lawrence's post about the stories in his book that he uses to show students how contract issues are relevant to current events (unlike the dusty cases in the casebook) and for showing contracts in different postures, not just litigation. This looks like a great resource for a first year class.
But let me also tie back to the point in my first post: the problem in our first year contracts courses is not primarily student's appreciation for the role of contract in modern society--that would be a problem for a course ABOUT contract law. While giving students those modern examples will be a great motivator and energizer for the classroom, the real problem is giving students engaged opportunities to PRACTICE DOING contractual analysis. The team-based problems I give students in my course (they work with three different fact scenarios during the semester in four assignments--the first two double up on the same fact scenario) just give fictional accounts of contract problems--like any old contracts exam--and that also gets students engaged with how contracts play out in familiar settings. The problems I've used involve things like:
1. A recent college grad with a new software idea who meets up for lunch with his college roommate who is now very wealthy. Roomate says "sure, I'm happy to invest", budding entrepreneur heads out and spends money, and then roommate is nowhere to be found. (This is a problem I give students on the first day of class--its' the basis for the first two assignments which roll out over the next month.)
2. An art school student (see the picture?) who has helped out his middle-aged children's fiction writer neighbor for years with work around the house is asked by the neighbor to watch the house and take care in particular with some tasks related to her recent book and illustrations. Artwork and misunderstandings about whether there's any deal to pay him for some work he does that saves her from the default of her regular illustrator while she's out of town and unreachable follow. (Also a begining of semester problem.)
3. Family in the yogurt business, with a father who is obsessive about organic standards and a recent college grad daughter who is now an executive. Discussions with president of organic milk supplier, contract reached to go above and beyond the national standards, father becomes suspicious about organic compliance, objects to conduct he believes falls short of the standard he contracted for but which clearly exceeds national standards, wants out of the deal. Students are given short contracts (eg. the 1 pager from the consulting case I worked on on which this case was loosely based), excerpts from organic foods regulations, and asked to advise about what to do.
4. Owner of a horse farm which boards and trains horses has an existing mortgage which she worked out with her long-time local banker years ago which ostensibly includes rights to be in default in exceptional circumstances up to six months; she has taken advantage of this with no trouble a number of times over the years. The local bank gets a sharp new banker when the old one retires who is anticipating the sub-prime mortgage collapes and who is determined to clean up bad mortgages. Owner is in default, thinks she can just take advantage of grace period, tough new banker brings her in, shows her (as it turns out, fake) newsletter predicting large increase in mortgage rates that will kill the ability of owner to pay once her ARM starts to float in a few months, and says "sign here to sell off half your farm and horses and refinance or we foreclose tomorrow." Spiteful sale of horses at unreasonable prices, some sold for meat, etc., ensues. Students get excerpted language from contracts, glossary of finance terms. [This problem is used at the end of the course; as is my usual practice, it is the problem from the previous year's final exam.]
5. Other problems involve two women who run an outdoor adventure outfitting business with unclear partnership/employment relationship, a contract between a mega-firm and a small software developer with suggestions that price is negotiated on basis of expectation that key personnel will be made available who are not, another unclear partnership arrangement to set up a new concept for a wine tasting retail outlet, and one based on the novel Snow Falling on Cedars (contract with Japanese residents of Washington State just before WWII for use of land for strawberry farm; payments in default due to internment.)
Students really get engaged with these problems --and voice the observation that because they are engaged--they really want to figure out what to do for these clients--they are motivated to really dig into what all these legal rules and concepts they are studying in the 'dusty' cases mean here and now.
Experienced teachers know that drawing on current events stimulates student interest, yet our contracts course does not make this easy. To make it easier, my latest book, Contracts in the Real World: Stories of Popular Contracts and Why They Matter, tells 45 stories intended to bring this subject alive for a modern audience.
I love old contracts cases as much as the next professor, and judging by their regular appearance in all standard casebooks, we profs love them quite a bit. But students hate them and have a hard time appreciating how cases like the following are relevant to their lives:* the sale of a silk mercer’s business circa 1773 England
* payments for itinerant farming circa 1834 New England
* a delayed rail transport for a mill’s crank shaft circa 1854 England
* musty gambling loans circa 1859 Buffalo
* the destruction by fire of a London theater circa 1863
* sailing ships lacking radio call letters plying for Liverpool circa 1864
* mistakes about bovine reproductive attributes circa 1887
* ₤100 rewards to those catching the flu despite using screwball medicine circa 1893 England
* damages for delay delivering marble for a mausoleum circa 1885
* salmon fishermen using nets off Alaska circa 1902
* an exclusive marketing license for fashions circa 1917
* experimental skin grafting surgery on a young boy’s hand circa 1929
* a bridge to nowhere circa 1929
This list could be doubled or tripled in length, but you get the idea. Students are not often stimulated by such musty, dusty tales, most of which were chosen for our classroom lessons by people like C.C. Langdell, Sam Williston, or Arthur Corbin—all born in the 19th century and dead for generations!
Freshen it up, I say, and I’ve developed a systematic effort to do so—not eliminating these relics, which do remain valuable, but showing starkly, fully, and entertainingly, how they relate precisely to today’s world. This brings modernity into the contracts texts and classroom. How about these:
* poet Maya Angelou’s Hallmark greeting card contract (formation in exclusive license deal)
* a lawyer’s boasts on “Dateline NBC” (offers)
* whether corporate internet privacy policies are contracts (mutual assent)
* effects of construction surprises in demolition of building damaged on 9/11 (duress/pre-existing duty rule)
* Kevin Costner’s pending fight about sculptures for his Dunbar ranch (conditions)
*Donald Trump’s effort to delay loan repayments due to financial crisis (impossibility)
* Bernie Madoff’s Ponzi scheme’s effect on divorce settlements (mutual mistake)
* Sandra Bullock’s recent fight over construction of her Texas mansion (restitution)
* fan breaches of Washington Redskins season ticket contracts (damages)
* Paris Hilton’s recent dispute about hair product endorsement deal (consequential damages)
* whether cell phone service early termination fees are valid (liquidated damages)
* Wal-Mart’s recent defense against employees of foreign suppliers (third-party beneficiaries)
These stories, mostly culled from the recent news, all pivot on the dusty/musty cases, but are much more interesting, accessible and relevant to students. Also appearing in the collection of 45 stories are those involving the following additional characters or topics:
* novelist Clive Cussler (good faith)
* rapper 50 Cent (palimony contract)
* child actor from “Malcolm in the Middle” (infancy doctrine)
* AIG’s employee bonuses (excuses)
* Citigroup’s naming of the N.Y. Mets baseball field (termination)
* the rapper Eminem (interpretation concerning digital music)
* Golden Globes (parol evidence rule concerning telecast rights)
* ownership of the L.A. Dodgers (scrivener’s error)
* pop superrstar Lady Gaga (accord and satisfaction)
* Charlie Sheen / Warner Brothers (conditions, performance, waiver)
* “The Sopranos” (novel ideas and restitution)
* Rod Stewart (restitution after cessation)
* Conan O’Brien / “The Tonight Show” (various)
Four stories in the book will be more familiar to veteran contracts teachers, as they already appear in several leadings books:
* MLK and BU (bargain or gift, reliance)
* Pepsi and the Harriet jet (offers, jests)
* Michael Jordan paternity case (formation, consideration, fraud)
* Michael Jordan product endorsement case (lost volume seller)
* Baby M
My narrative reflects and develops an understanding of how today’s contract law bears on today’s problems—showing how yesterday’s contract law and yesterday’s problems recur in new guises. These stories identify the real world, contemporary social and business settings where ancient problems recur.
These stories are about context, argument, possibilities, limits, alternatives, and deal with things people generally know about today—personalities, electronic transactions, internet exchange, cell phones—and dwell less on the archaic materials necessary to break through the ancient cases (transport and milling at the dawn of the industrial revolution, 19th century navigation technology).
Many of my stories did not result in litigation or judicial opinions. This enables teachers to stress how most contracts are not litigated. It facilitates engaging skills of negotiation and problem-solving and the “transactional” perspective. It’s easy to find the actual contract underlying many of these deals too, for those wishing to walk through such things. My stories are stories, just like judicial opinions are, enabling those with a literary bent to challenge my telling or at least stress the influence of the viewpoints I adopt.
Students like and get all this. Pedagogy is much more effective. And it is much more fun. Of course, all of us have known that current events help learning and are more enjoyable. But it takes a lot of time to incorporate them into a teaching program in a systemic way.
My book is an effort to do that. Notably, I began writing most of the stories as blog posts that I’d use in daily teaching. Now harnessed to the doctrinal terrain and linked to seminal cases, the book brings this course to life like no other device I’ve seen in 20 years of teaching this stuff. To be published by Cambridge University Press in early 2012, I’m excited about this and I hope my fellow teachers of contracts will be too!