(Almost) Live Blogging From AALS Contracts Conference: I am in Montreal at the Association of American Law Schools (AALS) Mid-Year Meeting. This year the topic is Exploring the Boundaries of Contract Law. These sessions are being held at the same time as an AALS Conference on Commercial Law at the Crossroads. This morning we are welcomed by Bill Hines, the AALS President followed by an introduction by Robert Hillman of Cornell and Dan Keating of Wash U. Both are on the planning committee for the conferences.

I have never live-blogged a conference before, so I may lose interest and stop. The question is whether the readers of this blog lose interest in a conference on contract law before I lose interest in blogging about it. Because I could not access the wireless network in the meeting room, I am uploading this post from my hotel room during the break. For this reason I do not have time to correct any typos or add links.

We start with a joint session between the contracts and commercial law groups. Bob Hillman---a contracts professor--starts by saying he did not realize he was going to be addressing the commercial law group when he wrote his introduction, so he welcomes those of use who teach the first and second most interesting courses in the curriculum. I agree that contracts is a wonderful course to teach. It is chocked full of classic cases with wonderful fact patterns—pregnant cows, carbolic smoke balls, hairy hands—hard but discernable rules of law, and the challenge to theoretically understand them. It invokes important moral issues such as whether surrogacy contracts should be enforced, and whether the specific enforcement of labor contracts amount to slavery.

Now Dan Keating is doing his welcome. He mentions that the last time we had such a meeting on contracts was 15 years ago. He remembers rubbing shoulders with the greats, like E. Allan Farnsworth who, sadly, died this year. For me, Allan was not only an intellectual giant, he was a charismatic person whose absence at this conference will be missed.

The first panel is on "Modern Adhesion Contracts: Clickwrap, Browsewrap and Shrinkwrap." The panelists are Bill Whitford (Wisconsin), Clay Gillette (NYU) and Juliet Moringiello (Widener). I have known both Bill and Clay for many years, so I am particularly interested in hearing what Juliet has to say, as I have never heard her speak before. [Click show to read rest of post.]
Intellectual Property Meets Contract Law The next session is Intellectual Property (IP) Meets Contract Law. It is being chaired by Jean Braucher (Arizona). She explains that part of the issue is whether IP merely provides default rules that can be contracted around by entering into contracts. The concept of "default rules" is very basic to understanding contract law. The speakers are Peggy Radin (Stanford), Maureen O'Rourke (Interim Dean of BU), and Mark Lemley.

Peggy Radin is going first. She says she now teaches contracts after she realized that people could contract around all the meticulously negotiated intellectual property rules by such practices as clickwrap and browsewrap agreements. She asks whether contract law should be considered preempted by federal IP law. She is now insisting on the distinction between the "public" law (which sets original entitlements) and "private" law of contracts that rearranges the background property rights, in this case intellectual property rights.

Peggy has written seminal work on inalienability of rights, and she is now wondering whether the power to contract around background IP entitlements should be limited. . . . [to view the rest of this post click on show]

Contractsand Arbitration: The afternoon session is on Contracts and Arbitration. The panelists are Richard Alderman (Houston), Jean Sternlight (UNLV), and Steve Ware (Kansas).

Jean has summarized the law of arbitration for the benefit of the contracts professors. I have a section on private arbitration in my casebook, but it is rarely discussed in first year contracts classes, and I do not claim to know its nuances. The issue is whether arbitration can be mandated by a term in a contract—especially a form contract of the sort discussed in previous sessions. (Recall that I distinguish between browsewrap agreements where there is zero manifestation of assent and click-wrap agreements that you must click to agree to (probably unread) terms.)

Rick is giving an impassioned plea for the proposition that there should be no binding arbitration for consumer contracts. He contends that arbitration clauses are meant to avoid the substantive law of contracts that protect consumers as well as consumer protection laws.

He says that there is never any bargaining about arbitration clauses (generally true) and no "rational" person can say there was assent to such clauses. Here I disagree. I think it is quite realistic to consent to unread terms on the grounds that it is not worth it to the consumer to worry about such contingent clauses, while it IS worth it to the repeat players who provide the form since they have to deal with thousands of transactions. The issue for me is whether arbitration clause is so surprising that it is not within the range of terrms that could be consented to without it being brought specifically to the attention of the consumer. I think that arbitration are not so surprising that it cannot be said that a reasonable consumer runs the risk of their presence in an unread form contract.

Steve Ware is now up defending enforcing arbitration clauses. He contends that businesses who use such clauses save money and that SOME (not all) of these savings are passed along to consumers. So both sides benefit from such clauses.

He is now asking where is the source of the benefits to business. If it comes from lower awards to consumer claimants, then such clauses come at the expense of consumers. But he thinks cost savings may also result from lower process costs which is a win-win situatiion for both parties. Only lawyers who are excluded from arbitration are harmed by such clauses. So the issue is determining which is the principal source of the savings. He cites studies that suggest that lower awards in arbitration (as compared with a civil lawsuit) are traded off against higher numbers of successful claims brought in arbitration. So the situation for consumers is not uniform. More consumers may benefit from arbitration, but a few consumers may lose out by recovering less than they would in court. He says the empirical evidence is not that powerful, but this seems to be the trade-off that must be weighed, and he thinks the benefits to the price reductions that are passed along to consumers and the lower cost access to justice outweight what is given up in large jury awards. . . . [to read the rest click show]
Cognititive Psychology and Contracts: One of the reasons I came to the AALS was to hear Steve Ware and Marcus Cole speak. I have known both since they were law students. Unfortunately Marcus, who was supposed to be on this morning's panel became ill, so is not here. I had thought of skipping the first session, but my duty to you, dear VC reader, impelled me to return to (almost) liveblog the session, which is on the Implications of Limited Rationality for Contract and Commercial Law.

Reliance on cognitive psychology to understand how people make decisions has lately been fashionable among contract scholars. This panel is designed to introduce these ideas. The panelists are Danielle Kie Hard of Southwest University and Manuel Utset of Utah (and formerly of BU).

I am sitting next to Jay Feinman, one of the founders of the Critical Legal Studies movement back on the 1980s. He wrote some pioneering scholarship back then on critical approaches to contract law, the topic of the second panel of the morning.
Bob Hillman is calling for the session to begin. (I should note that I reviewed Hillman's book on contract law here). I rarely get a chance to plug my writings on contract on VC. Consider this the commercial you must sit through to get to the "free" programing.) Hillman explains that this is a joint panel with the commercial law professors who are meeting along with we contracts folks. He is identifying questions he raised about the use of psychology in an article of his. The first question is whether the psych lab tests really apply to contacting situations? Second, do they provide a good account of contracting? He seems to be trying to stretch to make up for the absence of Marcus, but I would rather just hear from the 2 remaining speakers and leave more time for discussion from the floor, which has been rather truncated in previous sessions. But that's just me. (PS: The session ended up going 5 minutes over with very little time for audience participation,)

Danielle starts right off criticizing what she calls the "freedom of contract ideal." Her complaint this morning is that "disclosure statutes" to correct bargaining imbalances and asymmetric information actually conceal the real problem with freedom of contract, which is disparity of power These statutes assume the classical conception of contract law which assumes that parties are able to make welfare enhancing choices that merit enforcement, provided they are given the relevant information. . . . [To read the rest, click on show]
Critiquing Contract Law I am late for the program on Critiquing Contract Law--again because I was uploading the last blog post in my room. Since I now know someone is reading these posts, I decided to proofread it albeit quickly.

Jay Feinman (Rutgers) is almost done with his talk. I like Jay a lot, ever since we both visited at Northwestern teaching contracts. He's a nice guy. He is both describing the Critical Legal Studies (CLS) movement and how it came under attack and went into somewhat of a decline in favor of the New Formalism and the New Conservatism. It is interesting that he attributes the decline of the political critique of law to politics. This is consistent. What is not entirely consistent is why a rational critique offered by Crits is supposed to be evaluated on its merits as an effort in reason, but its rejection cannot be based on any deficiencies in their argument. It is just politics. But I suppose proponents of every school of thought (including libertarians, of course) attribute its lack of more general acceptance to a misunderstanding of the audience rather than to weaknesses of their arguments.

Jay closes on the pessimistic note that the contributions of the other scholars are unlikely to have much influence. He says "don't shoot the messenger." I do think Jay's gloominess from the Left is a social phenomena worth noting.

Deborah Waire Post (Tauro) opens with a PowerPoint slide with David Rosenberg's in class statement dismissing the contribution to torts of critical race theory and feminism. It gets a laugh. Her talk is about "critical outsider theory." The project is to construct alternative paradigms of the rules. . . . [to read the rest click show]
Contract Across the Curriculum: At lunch Dick Speidel (Northwestern) gave a tribute to the late Allan Farnsworth that asked, would an aspiring jobs candidate who said that he wanted to emulate Allan's career be hired? Good question. Speidel characterizes Farnsworth's approach as "Law and Law." At the end of his talk, he asks the audience to candidly answer the question for their own school and, if the honest answer is "no" this is a failing of American legal education. The heart of his talk is a remarkably accurate, though brief, overview of the intellectual developments in contract law scholarship during Farnsworth's long career, from legal realism, to law and economics, to critical legal studies to rights theories (he includes my approach of "manifested intention to create legal relations" in the latter category). Afterwards I commend him for his accuracy. I could not find fault with any of his story. Neither could Jay Feinman or Chuck Knapp with whom I spoke immediately afterwards.

The last session of the day is called "Contract Across the Curriculum." Speakers are Margaret Friedlander Brinig (Iowa), Einer Elhague (Harvard) and Jody Freedman (UCLA). Turn out is much lower than "Critiquing Contract Law" before lunch--people may be sight-seeing--so I have a much better seat.

Einer is first up. He says he is trying to finish two books this summer. One on contract default rules and the other on statutory default rules. Both books are based on the distinction between "preference eliciting" default rules and "preference estimating" default rules.

In contracts, he says, we normally want default rules that efficiently achieve the preference of the parties. This does not extend to statutory default rules which are not solely meant to serve efficiency grounds, and you cannot identify the group that is the "parties" to the statute. The public are not true parties within the legislative process. Nor are legislators who must take into account their constituents', not merely their own preferences. So how does this affect the difference between default rules in contract and default rules in statutory interpretation? [to read the rest click on show]

The Richness of Contract Theory: I have now fixed the link to my review of Bob Hillman's book, The Richness of Contract Law (not that anyone complained). The review is called, The Richness of Contract Theory, and here is the abstract:
In his book, "The Richness of Contract Law," Robert Hillman criticizes "highly abstract" or "unifying" contract law theories that, he says, fail to reflect adequately the complexities of existing contract law. In his review, "The Richness of Contract Theory," Randy Barnett takes issue with this claim and identifies the generational dispute between legal "realists," whose approach is shared by Professor Hillman, and legal "theorists" of whom Hillman is critical. Professor Barnett's thesis is that the very purpose of modern legal theories is to simplify a complex reality so as to better understand, cope with, and reform legal doctrine. Barnett then discusses Hillman's recent important empirical research on promissory estoppel. Hillman's findings represent a partial corrective to the previous consensus against a "reliance theory" of promissory estoppel insofar as they establish that reliance is a necessary element of promissory estoppel. However, his data also support the Willistonian conception of promissory estoppel by showing that a promise is also required. Ironically, Hillman is, Barnett claims, insufficiently sensitive to the complexity of the cases he surveys and the need to distinguish "reasonable" or "justified" from "unreasonable" or "unjustified" reliance. A more sophisticated analysis of these cases is provided by Professor Sidney DeLong who also is, not coincidentally, more receptive than Hillman to the richness of modern contract theory. While supporting Hillman's finding concerning the requirement of reliance, DeLong also notices courts frequently distinguishing "performance" from "enforcement" reliance. Enforcement reliance is reliance accompanied by a manifested intention by the promisor to be legally bound, or what Barnett has previously called consent.

Update:My apologies. I had not realized that there was only an abstract on SSRN, rather than the entire article. The final published version can be found on my website here. Sorry for any inconvenience.

Comment on Contracts Conference: I did not receive very much feedback on my live blogging of the AALS conferences on contract law. So I decided, as an experiment, to open comments on this post so readers have a single place where they can react to the previous posts on all six panels (which are chained to this post). Did you find such blogging to be worthwhile? (Negative opinions on this are welcome, if civil.) Do you have any reactions to the topics of the various panels? Etc.