What if Macaulay is fired for no cause, and gets a job working Saturday afternoons @ a law firm? That isn't mitigating damages if he could have had both jobs. (But for the breach, could he have had this?) Mitigating means reducing the damages by occupying the time that you otherwise would have devoted to the breached contract.
Bloomers were a kind of pants named after Amanda Bloomer: nice trivia.
Everyone in Maclaine Parker v. Fox agrees on the rules. They disagree on application. Employer must prove the amount the aggrieved employee earned or could have earned by substantially similar work. If the work is significantly different, it doesn't count. But either way, the burden of proof is on the employer, and if the offered second job is the right kind, we'll treat you as if you took it (i.e., you get damages only).
Sullivan dissent:
Summary Judgment; trust your procedure professor more than Macaulay. There's also demurrer: we admit all the facts but we say "so what" -- there's a failure to show a cause of action. In Summary Judgment, the statement of the cause of action is OK, but there's no triable issue. You can have summary judgment against either party (i.e., against the defense-- OK, even if you prove all that stuff, there's no defense here). If there is contradictory testimony, or if the judge believes one side but not the other, there should be summary judgment.
We have been federalizing crime at a scary rate. Contracts cases worth suing about are generally involving large-ish corporations, which are in Delaware, and bingo you are in federal courts again (diversity jurisdiction). In FL, for example, you can't get a contracts case on the docket because too many drug cases are in the way (criminal cases go to the front of the line... justice delayed is, etc...). So to clear the backlog, we are seeing more summary judgments.
So we need to decide what is the significance of "filming in Australia" or having "screenplay approval" in the contact of determining damages. [US News and World Report rankings: comes down to which schools have the most money] Unreasonable moves can't be required to mitigate damages (but most case law on this is pre-automobile, so "unreasonable" isn't well-defined at the moment).
Maclaine Parker regularly traveled to Tokyo to see her husband (Parker). So filming on location shouldn't be awfully unreasonable. But is it Syndey, or the outback? We don't know for sure.
"Comparable," by definition, implies "not identical." So there will always be degrees of difference. How much alike does "reasonably comparable" need to be? Basically, comparable means "not the same thing," but how different is different, and what differences matter?
Does the difference in the character of the movies constitute a difference with respect to damages? Should trials deal with questions about literary merit? How far do we want to get into the question of her choice about what kind of movies she wants to be in? Well, there are some films we wouldn't expect her to make (radically offensive ones, for example). So somewhere there's a line where it becomes "different."
Experts contend that if you lose director and screenplay approval, you are no longer a "bankable star."
[Maclaine made Two Mules for Sister Sarah, a western. Said not to be so very good.]
So how much like other cases is this one? It's a basis for making arguments. You know the rule, but that doesn't tell you how your case will come out. Comparable, again: not the same, and you need to make an argument about how much the same it is or not.
Next, since contracts are supposed to be voluntary, to what degree is it reasonable to deny a person the choice of whether or not to take substitute employment?
Tell me which side I'm on, and I'll tell you my arguments. This is why people love lawyers so much.
Also, in some sense, what's really at stake here is power: can artists assert themselves vs studios? There were several contemporary cases (incl. Debbie Reynolds, et al.).
Then they did well, a few years later. At the end of the season, it's very popular. Now the same thing happens, but the stadium was full to capacity: no additional ticket sales would have happened, because the stadium was full.
Moral: resale really is a mitigation of damages. "Are they where they would have been, had the contract been performed?" Is the new buyer a substitute, or are you a lost volume seller?
So the buyer backs out because of health reasons. Not a good exception for the contract: you take the risk of your own health, generally, unless you've made some other provision. So Neri's sickness should be his own problem, not the boat dealer's. Remember, in this chapter, we always assume we have a breached contract-- later on it won't be so clear.
Anyway, the dealer is eventually able to sell it to another buyer, and the court finds that it was for the same amount. Why does the buyer sue for such a small amount of money? The retail boat association would back this as a test case, but what on earth was Neri thinking? Does not compute: even if you win, you lose.
The buyer claims the seller has no losses. The trial court agrees. An appellate opinion is basically:
So here's what the case is about: did the trial court err on
Note: if you don't object @ trial, then you can't raise the issue on appeal. It's a tough strategy point. You can have a right (i.e., to object), but there's a cost to exercising it-- annoying the jury.
No real proof was offered that Retail Marine had an inexhaustible supply of boats. But that's not really the idea: all you really need in order to lose a sale is to have been able to say one more. If anyone says "learned" or "with due respect" they mean the opposite.
So could we make an argument (end of model year, sluggish supply, slow seller) that Retail Marine would not have made another sale? Or would they have been able to make the second sale if there had not been a boat on hand?
Standard Price Goods (NRA: national recovery act). Codes of industry conduct (price fixing): this is the price $GOODS will be sold for. Pretty much the only remnant here is the automotive Blue Book (in order to prevent price competition via over-allowances on trade-ins). In Schechter, which we'll see in Con Law, the NRA gets declared unconstitutional. Standard Price Goods: no negotiation over the price.
"Due credit for proceeds of resale." This could easily be read as wiping out the Lost Volume Seller notion. So we can argue that this is not "due" (with "due" meaning "appropriate"), perhaps because there was no "Resale." The thing is that we could just as easily have sold two boats simultaneously. Essentially we're selling "any boat of this model," not "this particular serial number." In new products, any of the type will fulfill the contract. Not so with used, of course.
So, would Olsen have waited to get that boat, if it had to be ordered, or did he want THAT SPECIFIC ONE sitting on the lot right there? Was the fact of the Neri boat being there (and not generic), a factor in the sale? So what about auto dealers, pretty much all of whom maintain a well-stocked lot for people to come and look at. Can you prove that but for the breach there would have been an additional sale? Various courts demand various degrees of rigor.
Net profit on a sale is one thing, but what about overhead? How much of your overhead is allocated to each sale? When one sale is lost, all other sales must therefore bear a larger share of the overhead. Again, different courts want different degrees of rigor.
Next: other ways of dealing-- specific performance, etc.
| Seller's costs so far: | $12,000 |
| Remaining to be invested: | $6,000 |
| Current salvage value: | $2,000 |
| Contract price: | $22,000 |
| Prospective profit: | $4,000 |
Specific performance makes the aggrieved party satisfied, but it doesn't get the lawyer paid. Again: we have rights, but it costs money to assert them. Law is tailor-made stuff, so it's very expensive, and that influences what happens.
So we can suspect that the "no specific performance" rules are protecting the interests of the breaching party. But why would we want to do that? Are we too tender to bad guys? Or is a breacher of a promise not necessarily a bad guy? These are big questions for the course. Or maybe in a capitalist society, it makes sense to allow people to buy their way out of trouble. Also, there's bankruptcy.
Idologically, orders to perform and coercion make us nervy (remind us of slavery, etc.). Free will, etc.
Interests: plaintiffs, defendants, society, and the legal system. So sometimes it's not feasible (e.g., in long-term complex relationships) to enforce performance. Performance in terms of, say, conveying a deal to land would be relatively simple and easy. Can you order a soprano to sing? Can you enforce that it will be good? So supervision would be a mess. Note that courts have run school systems, and the Alabama prison and mental health systems, and some railroads. Generally they appoint a receiver to handle the matter. So there are questions: what can the courts do? and what is it worth their doing?
In the California Rexall case, the court decided it wasn't going to run either Rexall or the Ma & Pa drug store. So there would be no specific performance, and all they could get is damages. So what are the damages? The profit that would have been earned. OK, over what period? Not only that, but the burden of proof is on Ma & Pa to prove damages. Can they get an expert to show what they'll be? Do they want to gamble with the expert's fees?
Same with the Chrysler dealership case. Note that these are pre-UCC cases. Are they still good law? Hard to say.
Efficient Breach (Law and Economics people love stuff that's counterintuitive). We can have situations in which it is at least as good (at least nobody is worse off, and somebody is better off) as performance would have been. In actuality, it is pretty hard to be certain about the specifics.
So why would the buyer pay seller the full contract damages in an efficient breach case? Seller could get them anyway, but would have to sue. So that would cost money, and interest on the would-be sale money would be lost, and we'd have to take a lot of expensive depositions... so as a buyer I deduct a theory of these expenses from my offer to the seller. It'll be way less. So efficient breach does not necessarily work out so hot for everyone (basically, it's not necessarily "efficient").
So what is really going on? Maybe mystification. Power is power, but we're going to go through the court system. Rexall didn't have much power when they started out, but now they are big and strong, and they can push the little guy around. So we say "common law doctine" or whatever, and that makes it more palatable. They had trial by battle back then, too, by the way. The major corporation can appoint a champion to fight the battle. Maybe the US is about making sure the powerful come out ahead. Perhaps not, but it never hurts to be able to hire expensive lawyers.
Why ever have specific performance? "If the legal remedy is inadequate." But this is almost never really the case. There are some things you can't get on the market, though: unique or irreplaceable stuff. So even if damages are awarded, you can't go buy a substitute. This is sometimes said of real estate (because plots of land are said to be unique), but nowadays McMansions call this theory into question. Lots of old "family bible" cases.
So how unique is unique? Do we require literal uniqueness? See §2-709. Defines when "legal remedy is inadequate" for buyers. For sellers, we try to push the seller to re-sell stuff, and then pay the difference.
Replevin: you are supposed to pay me for some good that I have given you. You don't pay. Replevin is the old term for "give me that thing back." It is for specific identified items/goods.
§2-716: the "in other proper circumstances" clause gives flexibility as to when specific performance is applied. In some states, official comments are part of the law, but even where they're not (mostly), they are often found persuasive. So Comment 2 says this is a new concept, and replaces the old ideas-- we are going to have more specific performance.
Requirements Contract: you will sell us as many as we need (supplier sells with buyer the risk of how many units get sold). For example, we want one windshield for each car we build. We'll buy them from you.
Output Contract: we will buy however many you make (or some fixed fraction thereof). Like a canner who contracts for all the beans a farmer grows in a given season.
Output and requirements contracts are good examples of when specific performance might make sense (i.e., "peculiarly available supply:" contracting to buy all our widgets from the widgetry next door saves us transport costs).
Copylease: not much precedential value, but still interesting. Applying California law makes it fun. CA has passed the UCC, but it has this prior law (Rexall, and Chrysler). So if those still work, we shouldn't do specific performance in a long-term relationship. So does the statute overturn prior cases? Possible, but not necessarily.
So how unique is Memorex toner? Or is this another proper circumstance? Not if Long Beach Drug is still alive. Official Comment 1 (sentence 2) to §2-718 is interestingly unhelpful.
On one hand, on the other hand. A constant theme. Pres. Truman is said to have asked for a one-armed economist. :) We need to understand both sides of the argument, or we will fail. So presume that there is a persuasive argument on the other side, and work it out. The bad way to go to law school is to have a passionate view on a matter and focus on justifying it. Interesting story from his law clerk days: the devil may have a good case... we may be killing our sense of justice, and making ourselves cynical, but we need to be armed for this kind of conflict. Often you need to use good judgment and proceed even when the law is not settled. Nobody pays big bux to get answers to questions that could just be looked up. When there are answers, you damn well better know them; when there are not, you better know what the other side will be up with. A lot of life has squishy rules. Or local rules.
Note that this is a service: put the product in bags and then distribute the bags. This is sort of an output contract (we will bag however much you send us). But they've got up-front investment.
Lake River sues as "liquidated damages," but Carborundum feels wronged too. So everybody wins, and everybody appeals.
Lien: a property right that a creditor has to hold onto a piece of property and, if needed, resell it if the payment isn't made. Most common lien is the garage lien: you can't take your car home without paying.
Posner declines to extend the law of liens.
"Stipulated damages" is a verbal nicety to cover bad "liquidated damages" clauses. You have a stipulated damages clause. Then you apply some tests to decide if it's a liquidated damages clause (OK) or a penalty clause (bad). But even if the clause is bad, you can still get damages.
Before Erie v. Tompkins there was a federal "version" of the common law that got applied. This was a sort of idealized (Swift v. Tyson) thing: judges could just discern the law. This means that we got some forum shopping-- people would look for judges that would discern some stuff. Erie doctrine tries to minimize this by applying the law of the state that would have had it, rather than letting people try to shoehorn things into a specific favorable court.
So what is the test? A Liq. Dam. clause is defined in IL statutes (since it's IL law that matters here). It needs to be a good-faith guess at what the damages could be. Liquidating damages is good, coercing performance is bad. It also has to be necessary: something that you couldn't empirically know damages. If you can know what the damages will be, there's no need for a clause (i.e., the law of damages is a default liquidatated damages rule).
So how far is contract law like regulation vs just enforcement of what you want to do? Both parties voluntarily entered into this contract. Consumer protection law involves choices made in unconscionable conditions (duress, fraud, etc.). So there is some regulation. I.e.: no punitive damages. We imagine some sort of Golden Age when there was no regulation, but actually there was even more regulation in ancient times. See Thomas Aquinas, e.g., on the just price. Or English ecclesiastical courts. Or Bentham's tracts against usury laws (and the usury laws themselves).
When in doubt, in IL, it's a penalty. That's stricter than other places, but there it is.
And this is a penalty, because it doesn't take into account the variable cost of running the bagging plant (i.e., the earlier the contract is breached, the less Lake River has had to spend on running the bagging plant). Since there was no attempt to take this into account, this constitutes a penalty.
But this raises a new question: how do we draft a valid liquidated damages clause for this customer? You need some way of tracking the likely costs, apparently. Some sort of elaborate formula. So after this decision, the next guy making a contract will probably be intimidated. So a good-faith effort might work, but we don't find out until later.
The take-or-pay clause (gas contracts) is problematic for Posner's line of reasoning. MG&E doesn't know in advance how much gas it will need to buy from the pipeline supplier, but the pipeline supplier wants to get paid anyhow. Essentially, you are buying a RIGHT to a certain amount of gas, whether or not you take it. Gas company says "we are not taking the risk of how cold it's going to be in Madison; MG&E needs to." So Posner's reasoning is that when the fixed costs of the infrastructure overwhelm the cost of the goods in question, then it's OK to structure payment this way.
So now we need to think about play-or-pay, which is related. You buy the right to some services. In CA, there's the concept of an "alternative contract" which is an agreement for one of two things. So, in Maclaine Parker v Fox, she gets paid, and Fox can either have her act or not have her act. Also the Pastorini contract (second-string QB). You buy the right to a person's services, whether you choose to use it or not. Is this really different from the penalty clause?
A couple of things have happened to give employees much more bargaining power: the collapse of the studio system, for example. "Option" contracts were great for unknowns with no bargaining power, but once you're a star, they blow. So there were some nice big cases that the studios lost, and that helped, at least for bankable starts. Same thing with sports agents and unions-- used to not be that way.
So basically you can't have penalty clauses except if you're a famous actor, athlete, or gas company.