Easterbrook is a former Chicago law professor. Not fun to argue in front of.
Telephone books are in the public domain, and the Supreme Court said that translating them to a digital format was not enough to establish copyright. Zeidenberg was cautious not to use the ProCD search engine-- only the database.
The district court said that the contract was complete when the purchase took place (offer, acceptance, consideration). Easterbrook says the little disclaimer on the box means that the other terms (EULA) are included in the contract.
How many things can you find wrong with this opinion, as a matter of technical contract law. How about UCC §2-204(1) "...in any manner sufficient to show agreement." Note that "agreement" is defined in §1-201(3): it is the bargain of the parties "in fact." If a consumer fails to read and understand the tiny provision on the box, is that person negligent?
Note that many of his examples are suspicious as well: the airline ticket he describes was regulated by the Civil Aeronautics Board.
MacNiel's article suggests that of course people don't know what contracts they're bound by, but it's OK to treat them as though they might be. Nobody knows all the WI statutes, for example. We can't regulate, if doing so destroys the consumer function.
At the time the plaintiffs make their purchase, they don't know most of the terms of the agreement. The person taking the order doesn't mention the arbitration agreement...
"Customers as a group are better off..." Easterbrook the socialist? "Competent adults are bound by such documents, read or unread."
So, if nobody says anything, wouldn't a reasonable person think the deal is closed when they pay for the thing? Wouldn't you think you had a contract then? See UCC §2-207: acceptance: a written confirmation operates as an acceptance, even if it states additional terms. The additional terms are considered "proposals" for amending the contract. They become part of the contract if you're a merchant, and the terms materially alter the contract.
Doesn't this go a step beyond ProCD's efforts to do away with choice? Does anybody know they're stuck with arbitration if they don't return the computer within 30 days? What about terms incorporated by reference (i.e., arbitration will take place under the rules of ________)? Whatever happened to the objective theory of contracts?
Corporations know that consumers are not reading these things, and they do not give a damn. This may actually be the best result substantively: it makes things quicker or cheaper, even if individuals get screwed from time to time. It is efficient to treat people as if they made a contract. After all, you are deemed to know all provisions of the state law where you live.
Trial court finds for the defendant. Supreme court reverses, but it's a 5-4 decision, and very contentious.
Reasonable expectations and the sanctity of dickered terms (you can't eviscerate them).
So here we've got a non-layperson's definition of burglary.
So this is quite different from Obde.
The dissent says basically, "if people don't read these things, you can't fault the drafter." And this came quite close to a different outcome.
Note that the insurance company is trying to come up with a bright-line test for an inside job. But really, they just make it so that skilled burglars create claims they won't pay.
Restatement §211 is a bit of law reform, trying to get unconscionable clauses (or surprise ones, anyhow) out of contracts. It's a bit of a compromise: the Wall Street lawyers at ALI don't like it, but the academics sort of do. AZ has adopted §211, but many others do not.
Good lawyering: what are "the premises" here? Tire tracks on the dirt road? This is the Portia approach: first try to get out of the clause, but next try to construe things to your advantage.
The buyer would argue that the seller failed to deliver the thing promised. The seller would argue that there are two inconsistent warranties, so we need to look to §2-317 to harmonize them. Is the "dominent" intention to build a machine according to the plans, or to build a machine capable of performing the task in question? Seller and buyer will have different views.
If it's a tie, it's just a mutual mistake case, and nobody is at fault.
So if fitness for a purpose were the issue here, what is the "trade" in machines that can't do what they're intended to?
If we've got a design defect, and not a parts defect, does a disclaimer of all warranties other than parts/repair work? It seems to conflict with the express warranty, so probably not.
Basically, just walk through the method outlined above: it helps you be thorough.
Trial court says the disclaimers on the form contract say the buyer has no rights to these remedies. The supreme court says the disclaimer is not effective. The disclaimer of merchantability must use the magic word and be conspicuous. There degree of conspicuosity here was insufficient (this a question of law that the court can decide without deference to the trial court, not a question of fact for the jury, say the supremes).
The construction of the form was improper: many layers of carbons were bound together for signing, and so the disclaimer (on the back) could not be seen by the buyer. There was a warranty, therefore of fitness for a particular purpose.
The roadmap above works in reverse: when a disclaimer fails, you're back to having a warranty.
But then the seller says, "hey, we're just the middleman here-- your beef is with Caterpilar." But this strategy fails if the warranty is fitness for a particular purpose (Caterpilar didn't select this model, the dealer did). So if the problem is just that they picked the wrong engine out of the pool of available models, the onus is on the merchant, not the fabricator to deliver what's promised.
Again, we ask, "what is the trade?" Is it the diesel engine trade, or the fishing boat trade? The court comes down on the fishing boat side (i.e., in favor of the buyer).
You and I are negotiating a contract. It goes on for weeks, and at some points we'll draft a clause (40) and realize that it contradicts another clause (2). So we keep going back and adjusting. Many drafts are exchanged, some notes are made on the back of napkins. Memories get fuzzy in some areas. Finally, we think we have a deal. I say, I'll make a clean draft-- you look it over, and if you like it, we'll both sign.
I give you my draft. You look it over. We maybe tweak a couple of commas, then we sign and start performing. Trouble comes, disputes arise, and one of us wants to revert to an initialed clause from the negotiation. You can't do that: the new contract is the integration of previous drafts, and the parties agreed to the final writing.
But here things go astray... how do we know that this writing was final? We orally agreed on X, and that got left out. Or we agreed that X was so, except in some circumstances. Did the parties intend the writing to be the final expression of their agreement? IF they did, then it's final. If they didn't tell us this, though, we can go one of two ways: Williston and Corbin.
Williston is the formalist: if it looks, waddles, and quacks like a contract, it is complete. The judge is to determine whether the parties would naturally assume that the writing is the total agreement. The "icehouse case:" a couple buys a house in upstate NY. The woman hates the icehouse, wants it gone. The ice guy says he'll get it removed when the season is over and the ice house is empty. Under Williston's parole evidence rule, the fact that the contract doesn't mention ice houses means the ice house guy probably isn't obligated to get rid of it.
Corbin is into substantive justice. They were great friends, by the way. Corbin's rule (AKA the CA rule) is based on credibility, not admissability. The court has the power to find that the oral promise is admissable. The court should look and see if the language would support the matter in question (i.e., is it a possible construction of the language, or is this the sort of thing that wouldn't have been put in writing in the first place because it was too tangential?). What does WI do? CHAOS, apparently.
Does a salesperson's wild overpromise constitute a warranty? The parole evidence rule guards against trumped up cases of warranty.
So. Wilson v. Marquette Electronics. A diagnostic instrument underperforms, and the seller can't find the form contract limiting warranty. Filing error. So they try to assert that the owner's manual is a complete description of the product, and so it overrules whatever the salesperson may have promised.
So, can we make the owner's manual the contract? Well this is over $500, so we have a statute of frauds issue: contracts have to be in writing. Is the logo on the owner's manual enough of a "signature" to count? Also, these goods have been accepted and paid for, so that means that any oral contract has been accepted.
Statute of frauds: it has to be in writing. Parole Evidence: can we go back to the oral agreement?
Troubles: where's the disclaimer of merchantability, etc.? Not enough here to trigger the parole evidence rule.
Fraud is an exception to parole evidence rule. How do you prove clearly and convincingly, however, that an oral agreement was fraudulent? Harder than it looks. :)