Contracts - Session 08

Transcript

SFV Room 200B: All right. You’re only admit it to the school.
SFV Room 200B: a little bit of a virgin? You’re…
SFV Room 200B: Roberto Campos? Right here. Marco Kaniwowski? Here.
SFV Room 200B: Strata? Yeah.
SFV Room 200B: Joseph Dejigion? Here.
SFV Room 200B: Robert Nazarian? Yes.
Robert Nazarian: here.
SFV Room 200B: Gohan Petrosian? Here. Danny Ramirez? Here. Armin Zakarian? Yeah, Miles. Joshua Zone? You’re a professor.
SFV Room 200B: seen Abrahamian?
Lusine Abrahamian: Here.
SFV Room 200B: Surin Abrahamian?
Suren Abrahamyan: Here.
SFV Room 200B: Edwin Agile? Absolutely, absolutely.
Edwin Aghilian: Oh, beautiful, Professor.
SFV Room 200B: Daniel Armin?
danielarmin: Here.
SFV Room 200B: Jason, is easy.
SFV Room 200B: Jason Azizi?
SFV Room 200B: Armin Bashian?
Armen Bashian: Good evening, Professor.
SFV Room 200B: Franz Biambi?
frantzbiamby: Here.
SFV Room 200B: Victoria Briones.
Victoria Briones: Here.
SFV Room 200B: Giancardo Saladon Hernandez? Here.
SFV Room 200B: Fabricia Herrera?
SFV Room 200B: Poor Africa.
SFV Room 200B: Is it Fabricia de Jora Pereira?
Karia Salazar: I think she switched to the, other contracts class in the morning.
SFV Room 200B: Okay. Ana Garcia? Those modifiers.
Anna Galadzhyan: Professor.
SFV Room 200B: Sonop, Pazarian.
SFV Room 200B: Sono Ghazarian?
SFV Room 200B: Kevin Kolovati?
SFV Room 200B: Cesar Gonzalez?
SFV Room 200B: Cesar Gonzalez?
SFV Room 200B: Paul Gonzalez?
Paul Gonzalez: Here, Professor.
SFV Room 200B: Someone else? Ana Hakopian? Yeah, professor.
SFV Room 200B: It’s true.
SFV Room 200B: Karen Hernandez-Vazquez.
Karen Hernandez: Here, Professor.
SFV Room 200B: Thanks, buddy.
SFV Room 200B: proven… Hunanian?
Ruben Hunanyan: Dear Professor.
SFV Room 200B: Richard Karayan?
Rita Karaian: Here, Professor.
SFV Room 200B: Liana Caribian?
LIANNA KARIBYAN: Here.
SFV Room 200B: Precour Kasabian? Hello.
SFV Room 200B: Pardo, question.
SFV Room 200B: Madlena Koshkarian?
maddykoshkaryan: Here, Professor.
SFV Room 200B: Adrian, Kumamoto.
Adreanne Kumamoto: Here, Professor.
SFV Room 200B: Fiat Lager?
Cynthia Llauger: Here, Professor.
SFV Room 200B: Excellent.
SFV Room 200B: Whoever you are, make sure your face is on the camera. Jason McCurryon?
Jason Makaryan: I’m here, Professor.
SFV Room 200B: Sabrina Malecon?
Sabrina Malekan: do it.
SFV Room 200B: Arthur Maslumian?
Arthur Mazloumian: Here?
SFV Room 200B: Did you ever hear anything before? Arman Mirzoyan? Here, Professor.
S.Zahra Movassaghigilani: Dear Professor.
SFV Room 200B: Laura Moradian?
Laura Muradyan: here.
SFV Room 200B: Sebastian Azar? Here.
SFV Room 200B: Leonie Nazarian? Here.
SFV Room 200B: Elona Nazarian?
Elona Nazaryan: Fair.
SFV Room 200B: Armanda Odin?
Amanda Oden: here.
SFV Room 200B: Masi Oyaga?
Masie Oyaga: Here.
SFV Room 200B: Sorry. Alexander… I’m a dumbest.
Alex Poberezhskiy: I’m here.
SFV Room 200B: Thank you, sir.
SFV Room 200B: for Oresky.
SFV Room 200B: Yep. Jazz, Porzanjani.
Jasmine Pourzanjani: Pear, Professor.
SFV Room 200B: Tevana Safaria.
Sevada Safarian: Here, Professor.
SFV Room 200B: Isabel Salazar.
Isabel Salazar: Here, Professor.
SFV Room 200B: Karina… Salazar Maria.
Karia Salazar: Here.
SFV Room 200B: Suzie…
Suzy Shkhrdumyan: Good evening, Professor.
SFV Room 200B: Thank you, Sugar Dumi. Thank you. Carmen, Smith.
SFV Room 200B: Cameron Smith.
Cameron Smith: Here.
SFV Room 200B: Not Carmen. Yesenia Surya.
Yessenia Soria: Here, Professor, on Zoom.
SFV Room 200B: Yes.
SFV Room 200B: Annabella Sulahian.
Anabella Sulahian: Here, Professor.
SFV Room 200B: Clarissa, Parazas, please.
SFV Room 200B: Clarissa Terrazas.
SFV Room 200B: Daniel Toklahjian.
Daniel Toukhlandjian: Here, Professor.
SFV Room 200B: Yes, sir.
SFV Room 200B: Bosca. Here.
SFV Room 200B: Madonna is here. Wow, yes, here. That was, I think, the best pronunciation you’ve made. Thank you. I’ve been practicing all day. Anybody’s name I didn’t call.
Fatima Razavi: Hi, Professor Fatima Razavi.
SFV Room 200B: Anyone else?
Yanique Reid: You need to read, Professor.
SFV Room 200B: One more time?
Yanique Reid: Yannick Reed.
SFV Room 200B: Please spell your first and last name for me.
Yanique Reid: It’s Y-A-N-I-Q-U-E-R-E-I-D.
SFV Room 200B: Thank you, ma’am. Next?
Rami Helo: Rami Hilo?
SFV Room 200B: One more time?
Rami Helo: Rami Hilo, R-A-M-I, Rami, last name… Kilo… HG…
SFV Room 200B: One more time.
Rami Helo: -Oh.
SFV Room 200B: Spell your last name one more time, please.
SFV Room 200B: I think we have a difficult.
Rami Helo: Kilo H-E-L-O.
SFV Room 200B: Oh, there you go. Thank you.
SFV Room 200B: Next.
Juan Esparza: Perfect.
SFV Room 200B: I’ll just send that shit. The first gentleman that was going… There’s so…
Juan Esparza: Juan Esparza, J-U-A-N-E-S-P-A-R-Z-A.
SFV Room 200B: Got it. Next.
Daniel Sheck: Hi, Professor, it’s Daniel, D-A-N-I-E-L.
Daniel Sheck: Check. S-H-E-C-K.
SFV Room 200B: Thank you, sir. Anybody else?
Daniel Sheck: Thank you.
Josue Flores: Me, Professor Josue, J-O-S-U-E, last name Flores, F-L-O-R-E-S.
SFV Room 200B: Gotcha. Next Thank you, Professor.
SFV Room 200B: Oh, you’re still not in here.
SFV Room 200B: First and last name, please. E-G-I-N-E.
SFV Room 200B: B-A-B-T-I-A-N.
SFV Room 200B: Anyone else?
SFV Room 200B: Excuse me.
SFV Room 200B: Anyone else?
SFV Room 200B: Alright, do I have… Clarissa Terrasas?
SFV Room 200B: Jason, as easy.
SFV Room 200B: Ferbicia Pereira, Sona Kazarian?
SFV Room 200B: Cesar Gonzalez?
SFV Room 200B: Alright, very good.
SFV Room 200B: All right, let’s go to page, 140, please, everyone.
SFV Room 200B: We’re still on Battle of the Forms, and we’re still talking about, you know, the UCC, and we’re talking about whether or not
SFV Room 200B: Certain language can be included in the contract if there’s, you know.
SFV Room 200B: A language that appears in one set of communication, but not in the other one.
SFV Room 200B: Anyone ready to do Marvin Lumber Company?
SFV Room 200B: For a marvel numbers, sorry.
SFV Room 200B: On page 140.
Cameron Smith: I can do it, Professor, this is Cameron.
SFV Room 200B: May I please have, kevin, go ahead, Keith.
Cameron Smith: Stop it.
Cameron Smith: So this is, Marvin Lundber and Cedar Company versus PPG Industries.
Cameron Smith: Marvin, the… Marvin Lumber, the plaintiff, is a family-owned company that manufactures, among other things, millwork products, like wooden doors and windows. Ppg sells wood preservatives and coatings.
Cameron Smith: And, from around 1985 to 1988,
Cameron Smith: PPG’s, wood treatment called PILT, which is a preservative inline treatment on Marvin doors and windows, was used. And, PILT replaced the industry standard in wood preservatives.
Cameron Smith: products containing Penta. Marvin had used Penta products successfully for years, but environmental concerns arose, and they changed the active ingredient.
Cameron Smith: Ppg sent Marvin 66 acknowledgements.
Cameron Smith: of Marvin purchase orders for Pilt.
Cameron Smith: On the face of the form acknowledgement, PPG,
Cameron Smith: avers that it accepts the order with the understanding that only… the only terms and conditions to which it consents are set forth in the acknowledgement, although there is a line for authorized signature just below the statement. None of the acknowledgements is signed anywhere by anyone.
Cameron Smith: And then on the back of the acknowledgement, in fine print.
Cameron Smith: And the last item under terms and conditions is the language, in no event shall seller’s liability for damage in respect to
Cameron Smith: products sold here under, or otherwise exceed the purchase price attributable to the specific product as to which a claim is made. And on its face, the disavowal would seem to limit Marvin’s damages as PPG claims.
Cameron Smith: And basically this becomes an issue with ballot reforms. And then PPG disagrees with Mullivan, and they rely on UCC2-207, which is a clause limiting
Cameron Smith: Remedy in a reasonable manner involves no element of unreasonable surprise, and will become a part of the contract unless an objection is raised.
Cameron Smith: Sorry, that was a lot. But basically, the rule, that I put here was
Cameron Smith: 2-207, and the issue is, does limiting liability in a contract involve the sale of good… involving the sale of goods and limit damages, even in events of an unreasonable surprise? And the unreasonable surprise is,
Cameron Smith: PPG changing the chemical they were using, causing Marvin Lumber to have to, you know.
Cameron Smith: Cover and warranty a bunch of windows and doors that were deteriorating prematurely.
Cameron Smith: And 2-207 lists a clause limiting a remedy in a reasonable manner, as one will involve no elements of unreasonable surprise, and therefore will be incorporated in the contract. And, my analysis from this is after changing a chemical formulation, just basically what I said.
Cameron Smith: The defendant claimed that their contracts involved a clause that limited their liability. However, UCC does not include a provision that involves an element of green reasons surprise.
Cameron Smith: And after reviewing the case, the appeals court determined that the defendant’s claim that their contract limited their liability for the issue brought forth by the plaintiff was not enforceable due to the UCC 2-07 clause in the previous suit.
SFV Room 200B: Very, very good. So, here, the court…
SFV Room 200B: I was actually very good. The court,
SFV Room 200B: declines to follow the lead of the Seventh Circuit, holding that
SFV Room 200B: That court held that hardship is not a basis for finding that the terms are,
SFV Room 200B: Not necessarily altering a contract.
SFV Room 200B: But the court here, basically, followed comment 4… Comment 4 of 22-207,
SFV Room 200B: Specifically, that basically states an agreement… I’m going to read from it. An agreement is materially altered if an addition would result in surprise or hardship if incorporated without express awareness by the other party. So, and that is on page 142, by the way.
SFV Room 200B: So the court says, If there is surprise or hardship.
SFV Room 200B: Then economic hardship, for example, was the case here.
SFV Room 200B: The court will not impose that additional language on the opposing party unless They weren’t fully aware.
SFV Room 200B: Right?
SFV Room 200B: So, as we… as we move along, you will see how…
SFV Room 200B: One, acceptance has so many exceptions.
SFV Room 200B: And so many nuances that you as a lawyer, must know. I mean, the more difficult it gets.
SFV Room 200B: the more…
SFV Room 200B: it should tell you that the job that we do is very special. Not everybody can do it. This is not ChatGPD answer.
SFV Room 200B: Right? If you develop this tool in here, it will always remain with you.
SFV Room 200B: And as we get to shrink wraps and, you know, all that stuff, you’ll see how the law changed a bit
SFV Room 200B: in the 80s and 90s, right? Because all these cases came along, these…
SFV Room 200B: the internet phenomenon came along, and perhaps before you, some of you were born, or all of you were born.
SFV Room 200B: But I remember those days, right? It was like, dial-up. You want to check your… to see if you pass the state bar, results.
SFV Room 200B: I had to wait 5 minutes for the computer to go… I’m not kidding, I remember that night. This stupid thing would connect, and then it was like, oh, there’s a disconnect. I’d do it again. No, just cussing. Just, like, come on! I think the results came at 6.30 PM or something.
SFV Room 200B: And I’m sitting there like an idiot since 5.30, just waiting.
SFV Room 200B: finally got the result. But, I mean, those were the dialogue days. Now, if our internet is just a little bit slow.
SFV Room 200B: Excuse me.
SFV Room 200B: Hell breaks loose.
SFV Room 200B: But that’s the way it was back then. So, again, as we go through these cases.
SFV Room 200B: I would say, add little comments to your notes. Make your own notes if you haven’t done it already. You’re making a big mistake. You gotta make your own outline for every class. I don’t care what anybody tells you. Trust me.
SFV Room 200B: When I passed the first time, you gotta do the hard work, please.
SFV Room 200B: Make your own outline, add this stuff to it.
SFV Room 200B: That’s why we go through these cases, otherwise I can just come like some of the other professors and say, any questions, and then go home.
SFV Room 200B: I get paid, I just have to sit here and say any questions. Yes, ma’am? Professor, I couldn’t wait, like, it was a little confusing for me, the original was surprised.
SFV Room 200B: So, basically, it means if it’s, like, a fine print, which the print is even understood or leaves that part, it becomes a surprise for her? So, essentially, if you want to…
SFV Room 200B: If you want to make this language into a language that we can use in the final.
SFV Room 200B: or to understand it better, I would say
SFV Room 200B: your argument should be, and it doesn’t matter how you conclude. We know, for example, that arbitration clauses are always
SFV Room 200B: and a material alteration, right? Always.
SFV Room 200B: But as for any other term that is not agreed to by the other party, You ask yourself.
SFV Room 200B: Is it a material alteration? If it… in this case, the court says, if there is a surprise.
SFV Room 200B: Right? And, or, the language that I just mentioned.
SFV Room 200B: Hardship. And I said, in this case, economic hardship.
SFV Room 200B: If it results in surprise, not surprise about monumental, minuscule stuff, but big stuff, big language, like something that would actually change the terms of the contract for one party.
SFV Room 200B: Then the court would say, well, no, you should have made that very clear from the outset with the other partner.
SFV Room 200B: If not, we won’t let it in.
SFV Room 200B: Right? Not everything comes in, basically, is what the courts say. And what I’m telling you is that your job would be to argue, based on whatever facts we produce, right? You just have to argue, is this…
SFV Room 200B: one of those miniscule, you know, minimal language changes that doesn’t really affect the other party, and the fact that he says, I’m surprised, is an unreasonable surprise? Or is it a reasonable surprise? Would a reasonable person find it to be
SFV Room 200B: unconscionable. I think I mentioned once before, if you… you… if you buy, if you buy a car, and the other party basically sends a fax, says, I accept, I accept, accept, ship the goods, all the way to Switzerland.
SFV Room 200B: That’s not what you agreed to.
SFV Room 200B: Most courts… and I’m exaggerating, right? But most courts would say, wait a minute, that’s not reason.
SFV Room 200B: That is economic hardship. Do you know how much it costs to ship a car across the oceans?
SFV Room 200B: I don’t think so. We’re not going to enforce it. Even if it was between merchants.
SFV Room 200B: Right? Because it… again, or if it’s a surprise. So, and this case, not the greatest case, I have to say, but this case is tested, only because it’s one of the few that talks about, as I said, the Seventh Circuit literally said the opposite.
SFV Room 200B: That surprise is not a valid reason.
SFV Room 200B: But this court says, sure it is, and explains why. So…
SFV Room 200B: All you have to do is argue the language, right? And again, doesn’t matter how you conclude, I don’t care. Nobody does.
SFV Room 200B: Right? Unless you become the Supreme Court Justice, then we care.
SFV Room 200B: None of us are.
SFV Room 200B: But overall, if you look at the contract, and then there is a fine print, like…
SFV Room 200B: bring some changes, but it’s… it depends on the circumstances, right? If it’s part of the contract, but fine print doesn’t necessarily mean it doesn’t become part of the contract. It’s got to be a genuine surprise.
SFV Room 200B: So if it’s really a fine print, it’s still a print.
SFV Room 200B: Yes. Have you seen fine prints at the bottom of this TV screen? Yes. I got an 85-inch screen at home. I still cannot read those things. I swear to God.
SFV Room 200B: I have to pause it, and my wife says, oh my god, he’s… he’s reading the fine print again. I do, because I’m like, wait a minute, that’s a good deal, boom! Let me see what the hell it says.
SFV Room 200B: You know… 5K down. Yeah, 5K down, and then your firstborn, you know… Your firstborn! Don will give you the cop.
SFV Room 200B: Something like that, good deal. But you get, yeah, good deal. There is, in fact, a law, yes, there is, in fact, a law that is called a duty to read.
SFV Room 200B: And I believe I mentioned it briefly before. Yeah, it was the case where someone didn’t understand the language. That’s correct, and the court… right, it was Italian or something, and the court said, I don’t care.
SFV Room 200B: You have a duty to read. So the fact that you… and I did… I know I mentioned it, you’re right, because I said, for example, in California, if you’re buying a car, and your, your language is, let’s say, Spanish.
SFV Room 200B: the law says they have to produce all of the agreements in Spanish. Even though you have a duty to read.
SFV Room 200B: There’s also that duty on the part of the dealers to produce that in your language.
SFV Room 200B: not every language, obviously, but they probably screwed enough Spanish-speaking people that the legislature acted and said, that’s not right. You know, you can’t just say, trust me, sign, which is what everybody does.
SFV Room 200B: People show up in my office all the time, and they sign. Like, 99% never read what I put in front of them. And I always stop them, I mean, unless I don’t like them. I want them out of my office, I’m like, yeah, yeah, yeah, sign, get out.
SFV Room 200B: Like, this punk that I’m representing right now, he’s just… Unbelievable. He’s a doctor.
SFV Room 200B: He thinks he’s so special.
SFV Room 200B: He’s my ass.
SFV Room 200B: I kind of told him after. I said, Doctor, there’s a body part that you can examine. He said, what? I said, I’ll let you know when he comes tomorrow morning. I’m gonna let him have it. He’s an idiot. Anyway… Can I ask what he did wrong? Huh? Are we allowed to ask what he did wrong?
SFV Room 200B: He choked his sister almost to death. Oh, sister? Oh my god, why are you representing him? Make sure he loses. Allegedly. No, he did. He admitted to it, too.
SFV Room 200B: To who?
SFV Room 200B: To Beverley is, please.
SFV Room 200B: But, he thinks he’s special.
SFV Room 200B: So I’m gonna let him… They’ll remove his license. They might, I don’t know. I don’t think so. I think we’re gonna get him help. He needs help. He needs mental health.
SFV Room 200B: He really does. And I want to give him that, because I just think that if he marries anybody, the poor woman is going to end up dead one day. So, I want to prevent that.
SFV Room 200B: He’s wealthy, anybody would marry him. Sorry. Excuse me? She said, you need your brother’s therapy. Well, there’s a conflict of interest, as you can imagine, so I always refinance… No, no, no, he needs a psychiatrist, not a therapist. Both, a psychologist and a psychiatrist. But,
SFV Room 200B: why did I go there?
SFV Room 200B: Because you didn’t want him to read the fine print, because he’s an Adam Henry. Right. I was saying that most people… I could… thank you. I conf… see, you’re not that tired. I confront most people and say, don’t ever sign papers in a lawyer’s office and leave. Are you crazy?
SFV Room 200B: Get a copy, at least.
SFV Room 200B: You know, I have people initial every page, because I’ve heard, I’ve seen lawyers actually change the retainer later. Change page 2 is changed, page 3 has changed, and then you get screwed, and it says, this is what you signed. Sorry.
SFV Room 200B: And the court will say, yeah, well, do you have another copy? No, okay, too bad. So sad. Should have had one.
SFV Room 200B: So I tell people, read it. Read it. Don’t trust me. Read. Don’t trust anybody.
SFV Room 200B: Although, every time I buy a home, for example, or buy a car, I don’t read anything!
SFV Room 200B: It’s always true for ourselves, right? I’m sure when you become lawyers, you’ll do the same thing. You’re like, just give me the papers.
SFV Room 200B: And yes, and I told the dealership, I said, I’ll see you later.
SFV Room 200B: Which is true.
SFV Room 200B: Okay, I hope…
Karia Salazar: Is it a good idea to, add, like, for them to initial each page? Or if, like, we’re signing a retainer to initial each page, even if…
SFV Room 200B: Yes, ma’am.
Karia Salazar: not on there?
SFV Room 200B: As a matter of practice.
SFV Room 200B: If you go to court, and you enter into any deal with… in criminal court.
SFV Room 200B: There’s a paper called the Tall Waiver, I don’t know if you’ve ever seen one of those. But there’s one for felonies, one for misdemeanors, one for DUIs, one for DUI with injury, etc, etc. And what does the court do? The court makes you initial every single paragraph
SFV Room 200B: There’s literally a box in front of each paragraph. Maybe one day I’ll bring you one, and bring one in class and show you. You have to initial every single paragraph, and then the judge questions you.
SFV Room 200B: Did you initial every single one of these paragraphs? Did you initial them after you spoke to your lawyer and you understood all of your legal, constitutional rights? Yeah. Did you ask all of your questions from your lawyer before you initialed every paragraph? Yeah.
SFV Room 200B: Did you sign the page 8 of this document? Yes. Did you do it after you understood every single paragraph? Literally goes through this 10 times!
SFV Room 200B: Juan?
SFV Room 200B: Because then you cannot dispute that I didn’t understand a paragraph later, because that’s the easiest way to throw your lawyer under the bus. Five years from now, you just say, you know, the lawyer bullshitted me, he lied to me, he said, you know, just sign, don’t worry, whatever. And I did.
SFV Room 200B: So, in order for that not to happen to me.
SFV Room 200B: I do get a lot of initials. I mean, a lot. Like, it’s not just the bottom of the page, there’s probably 15, 20 initials that I get from my clients, especially about the immigration consequences because of the new laws. Criminal lawyers are in hot water, man. They get in trouble. So…
SFV Room 200B: And I make them go see an immigration lawyer right away, and if they don’t, I’ll just… I won’t represent them.
SFV Room 200B: Simple as that, because it’s just getting really bad.
SFV Room 200B: So, bottom line is protect yourself.
SFV Room 200B: And I teach my clients to protect themselves. My job is not just to represent them on that case.
SFV Room 200B: I want to make them aware of the law and how you can protect yourself better next time, right?
SFV Room 200B: So, I mean, if you care about people, then you do that.
SFV Room 200B: I happen to care still.
SFV Room 200B: Okay?
SFV Room 200B: All right.
SFV Room 200B: Diamond Fruit Growers on 150… 144, excuse me.
SFV Room 200B: Anyone? I would have to pass it. Manager, please.
SFV Room 200B: So, cracks are manufactured cooling units use steel tubing supplied by metal majacking. Each year, CRAC issued a blanket purchase order to metal mat…
SFV Room 200B: I’m just gonna say and throughout the year, submitted release purchase orders requesting shipment. Acknowledged each release order with the form that included, number one, a disclaimer of liability, for consequential damages, and number two, a limitation of
SFV Room 200B: a limitation of liability to either a refund of the purchase price or repair, replacement of defected tubing. Although Kroc once objected to these terms.
SFV Room 200B: Refused to alter them, and Crack continued purchasing and paying for tubing over a 10-year period. In 1981, Krack sold a cooling unit containing metal max
SFV Room 200B: tubing to Diamond Growers Inc, who’s the plaintiff in this case. The following year, the unit leaked, ammonia into Diamond’s warehouse.
SFV Room 200B: forcing removal of stored fruit. Investigation revealed that the leak was caused by a defect. A small hole in ‘s tubing. Diamond soot crack for damages to its fruit cracked
SFV Room 200B: in turn, filed a third-party complaint against seeking,
SFV Room 200B: Indemnification. A jury found crack liability for diamond damages, but awarded crack contribution for the 30% of the loss. Moved from judgment notwithstanding the verdict, citing its contractual disclaimer of consequential damages and limitation of liability to repair and replacement or refund. The child court denied the motion and entered judgment onto the verdict.
SFV Room 200B: appild.
SFV Room 200B: And then after the court upheld the jury verdict, concluding that could not rely its contractual disclaimers to avoid contribution, despite the limitation of liability provisions, remained partially responsible for the damages resulting from the defective tubing.
SFV Room 200B: What would happen… thank you, good job. What would happen if this was a common law question?
SFV Room 200B: What would the result be?
SFV Room 200B: hair imagery.
SFV Room 200B: Saying entries, you’re correct. The mirror image will… What would that do?
SFV Room 200B: I would mean, terms have to match. It has to be identical, though. Would the buyer lose?
SFV Room 200B: Didn’t accept it.
SFV Room 200B: Would the buyer lose if it was a mirror image rule?
SFV Room 200B: the buyer would lose. Seller’s acknowledgement form would have been a counteroffer, right?
SFV Room 200B: Right? And the buyer would have accepted it, because he accepted the goods.
SFV Room 200B: Blake?
SFV Room 200B: So, what we call Last Shot Principle.
SFV Room 200B: Last shot, meaning the buyer had the last shot to say, screw you, I don’t want it.
SFV Room 200B: But he didn’t. He accepted the case. Sort of like some of the cases that we’re going to do a little later tonight, which is by accepting
SFV Room 200B: what is it, software, holding onto it, or, you know, or in the cases that we did previously, that if you… if you retain the goods for more than a reasonable time, you’ve just accepted them, right? By silence, by conduct. You have to pay for it.
SFV Room 200B: Right? Pretty much the same thing. So, if… but you’re correct. A mirror image rule is exactly what, what would happen if this was common law. That would be the result. But… but here under the UCC2-207, the acknowledgement was a definite and seasonable, timely, right.
SFV Room 200B: Expression of acceptance.
SFV Room 200B: And, the answer to question one is yes.
SFV Room 200B: Et cetera, et cetera, as mentioned perfectly. Yeah, answer to question two is yes.
SFV Room 200B: And there was no contract on the subsection 1. Therefore, under UCC, the next step is to go to subsection 3, and that’s how you analyze.
SFV Room 200B: this case.
SFV Room 200B: I wanted to read something to you from here.
SFV Room 200B: This is the liquid test.
SFV Room 200B: Okay, Dorton, I think, is coming up next, right?
SFV Room 200B: Yeah, it’s ProCD versus Zeidenburg. Yeah. Okay, so, yeah, that’s a very, very, very important place, that ProCD. I gotta tell you.
SFV Room 200B: That case, you definitely will see in the final.
SFV Room 200B: So, you know, whatever you want to do, market, do whatever you want.
SFV Room 200B: So, when you say you’ll see it on the final, are you talking about, like, the topic discussed in it, or… A variation of these facts.
SFV Room 200B: And the resulting arguments?
SFV Room 200B: You will see in the final.
SFV Room 200B: Right, when I say… right, thank you.
SFV Room 200B: We don’t… I don’t mean we literally put proceeds in there. That would be too easy.
SFV Room 200B: But a variation of these, anytime I say something, you’ll see again.
SFV Room 200B: Because, based on experience, I just know that you’re going to see it in the bar, and if you see it in the bar, then you’ll see it for sure in the finals here. We don’t make our finals any different from the bar.
SFV Room 200B: Literally me.
SFV Room 200B: Sort of come up with the same…
SFV Room 200B: Stuff that we know they’re gonna test you on, right?
SFV Room 200B: Okay, anyone wants to do ProCity for us?
SFV Room 200B: on, page 150… So, ProCD marketed, it’s a select phone database, a detailed directory.
SFV Room 200B: at lower prices for consumers and higher prices for commercial users, enforcing this distinction through a license included inside the packaging and displayed on screen, which restricted use to non-commercial purposes for consumers. Matthew Zeldenberg purchased the consumer version.
SFV Room 200B: disregarded the license and created a company to sell the database information online through commercial customers at prices below Proceeds commercial rates.
SFV Room 200B: ProCD brought suit against Zeidenburg in federal district court for breach of contract. The District Court held that the license agreement was not enforceable on the ground that it was inside the box, rather than printed on the outside. Proceed appealed.
SFV Room 200B: And the issue was, can a shrink-wrap license be a valid part of a contract between a buyer and a seller of the goods?
SFV Room 200B: And under UCC 22-204 subsection 1,
SFV Room 200B: It said a contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties, which recognizes the existence of such a conduct.
SFV Room 200B: And the shrinkraft license included by ProCD,
SFV Room 200B: is an enforceable contract under UCC 22-204, because a contract may be formed by conduct.
SFV Room 200B: As the court noted, Section 2-606, which defines acceptance of goods, reinforces this understanding.
SFV Room 200B: A buyer accepts good under UCC 22-206 subsection 1B, when, after an opportunity to inspect, he fails to make an effective rejection.
SFV Room 200B: under…
SFV Room 200B: UCC2-602 subsection 1. Pro CD extended an opportunity to reject. The buyer should find the license terms unsatisfactory. Zeidenberg inspected the package, tried out the software, learned the license, and did not reject the goods.
SFV Room 200B: OCD conditioned acceptance on using the software after reading the license.
SFV Room 200B: Zeidenberg did so, thereby accepting the terms. By using the software for commercial purposes, in violation of the license, he breached the contract entitling Proceed to recover damages.
SFV Room 200B: Very good. How do you… how do you get around this, if you’re the consumer?
SFV Room 200B: How do you get around this?
SFV Room 200B: Read it. Well, one way is to read it, but if, let’s say, you didn’t read it… Just not do business with them. I’m sorry? You could just not do business with them at all. But how do you avoid this contract? Like, how do you avoid this? How do you get away from this?
Cameron Smith: Turn it.
SFV Room 200B: return it, okay? One way is to return it in a timely manner. But what if the box was damaged, and you didn’t see the language? You didn’t see the language that says, terms inside? I never saw that, Your Honor, because the box was destroyed when it got to my home.
SFV Room 200B: I didn’t know there was anything inside, other than the stupid CD.
SFV Room 200B: Possibly, because the court relied on that. I’m not suggesting lying, but what I’m trying to say is that if you didn’t actually receive that notice, that initial notice.
SFV Room 200B: Or it also says it pops up on your screen, please.
SFV Room 200B: Yeah, if it pops up on your screen, as we will find out with the Uber case also, your post.
SFV Room 200B: But it depends on where it pops up on your screen, right? Small ice cream. My screen was damaged. My screen was damaged. My eyes are not working. But in all seriousness.
SFV Room 200B: One thing that, as I was driving here, I told myself, one thing that I want to mention to everybody tonight, it’s that it’s all about reasonable notice.
SFV Room 200B: reasonable notice, not any notice. There is a case that you will see where the language appears several pages down the line, you know, somewhere. That’s different. The court says that’s not reasonable notice.
SFV Room 200B: But if you’re signing on to Uber services for the first time, the court clearly describes that you have to say, oh, I… I have read and accept, and so on and so forth, and therefore you’re admitting your… that you’ve read the fine print, as you call it.
SFV Room 200B: So, but, so, bottom line is, if you hide the language.
SFV Room 200B: and you try to get away with it that way, it’s not gonna work. Therefore, my retainer agreements, as an example, because I know that this may be an issue that may come up.
SFV Room 200B: My retainer agreements, Have arbitration clauses in them.
SFV Room 200B: But the language of the arbitration clause is an in a box, by itself, with borders, and the print is twice, the font size is twice that of anything else.
SFV Room 200B: Literally, it’s, like, so big.
SFV Room 200B: you can’t miss it, right? And then I make them initial the box.
SFV Room 200B: Several times, like paragraph 1, paragraph 2, paragraph 3, they understand it, they voluntarily understand, and get into this arbitration, which is completely legit. The State Bar also allows it, so that in case there’s a dispute, thank God I’ve never had a dispute in 27 years. Please don’t worry.
SFV Room 200B: But I’ve never had a dispute, but if there is.
SFV Room 200B: The language is pretty clear. We go to the State Bar, you know, dispute resolution, then we go to mediation, then we go to arbitration. You don’t get to drag me to court forever, I don’t get to drag you to court forever, right?
SFV Room 200B: So, somebody had a hand up. Yes, ma’am. Yes, sir. I was gonna ask, in regards to examples like this, where it’s like a physical license, as opposed to now in the modern day, where you see more, like, you know, on your screen, let’s say, even when you update your phone, you have to click agree before, like, you could download the software update. Yeah. As an attorney, what would you…
SFV Room 200B: Oh, see, is it harder to deal with, I guess, when it’s presented to you? Well, I can tell you, I can give you an example. If you go to the Los Angeles Superior Court’s website, and as a lawyer, you want to get into the lawyer portal, which is, by the way, finally
SFV Room 200B: Since I’m on camera. God bless whoever did it. They finally did it. Seriously. It used to suck. It was so bad that
SFV Room 200B: I was embarrassed to say this is a court website.
SFV Room 200B: But now it’s so good that I… I wish I had the printout. I’ll bring it next time. I have, like, 400 or 300 active cases. All of them are there!
SFV Room 200B: I literally logged in under my name, and all of my cases, even close cases, came in, into the, you know, and when you literally, you click on one of them, you can look at any
SFV Room 200B: document that any party may have filed. And you can follow your own case, so if a lawyer files something and doesn’t serve you, they claim they have served you, right, or the other party does something, you get an email.
SFV Room 200B: You’ll find out somebody just filed something on your case, and you didn’t get a copy.
SFV Room 200B: So, less chance of getting screwed, right?
SFV Room 200B: There was a lawyer, I don’t know if I mentioned this to you, he was a former prosecutor in Orange County.
SFV Room 200B: We had a family… there was a family dispute. I was representing the husband, he was representing the wife.
SFV Room 200B: And… That’s… this is 15 years ago or so.
SFV Room 200B: I had to drive to Orange County, I am not exaggerating, every month, go to court.
SFV Room 200B: Look, maybe more than 15 years ago, maybe 20 years ago. Look into the microfish.
SFV Room 200B: To see what he filed in the case, because he kept filing stuff and never served me with it.
SFV Room 200B: And he had a fraudulent
SFV Room 200B: somebody was in his office signing proof of services that he signed. He served me. Can you imagine the pain? I think I mentioned this in this class, no?
SFV Room 200B: So we finally, we finally get to trial.
SFV Room 200B: Right?
SFV Room 200B: We get to trial.
SFV Room 200B: And, he said, Your Honor, I’ve never seen any of these papers that Council filed here today, or last week.
SFV Room 200B: And I said, Your Honor, you can see the proof of services, right? He says, yeah, stop talking. You were served. I don’t care. There’s a proof of service. You are served.
SFV Room 200B: And then, so the judge leaves us alone in the room, we’re chatting.
SFV Room 200B: And I go to him and said, how does it feel?
SFV Room 200B: You know what I mean? What are you saying? Yeah. Oh, he went… he told the judge that, you know, basically, I never served him. I said, Your Honor, he’s full of shit. I mean, look at the proof of service, see? Right here. He lost the case.
SFV Room 200B: And then he got this part.
SFV Room 200B: I’m not kidding, not because of me. He got this part because a lawyer in my office said, oh, so-and-so, he got this part. I’m like, are you kidding me? One of the allegations by 15, 20 lawyers, at least, was that he never served us.
SFV Room 200B: That he played this game. So I’m just telling you, one day it will come to haunt you. What happened was he left his child, apparently, in the hotel room, when I got drunk or something. Police showed up. Police showed up, and then he’s like, I’m a prosecutor.
SFV Room 200B: They’re like, we don’t give a shit. They arrested him. They arrested him, and then that led to a state bar investigation, and as soon as lawyers found out about the state bar investigation, they wrote letters to the State Bar that this guy is a crook, he’s a junk. He never got to me, I found out late.
SFV Room 200B: But yeah, and then after the fact, I wrote to the staple. I swear to God, I said, he should never be a member of the MARC, because for more than a year, look at my…
SFV Room 200B: parking receipts, I sent all of them. I had to drive all the way to Orange County, park, go to the court, go through an exercise of a couple hours of microfiche examination, because he did it to me every week!
SFV Room 200B: And I attached all those exhibits to prove it.
SFV Room 200B: Arma. So that he would never get his license. No, he was just… he’s a…
SFV Room 200B: I remember, because he was one of the few that was really, really tough.
SFV Room 200B: Anyway, point being,
SFV Room 200B: Now, when you go to the court’s website, answering somebody’s question here… I was saying, like, the digital agreements as opposed to physical. Exactly. You know what the court does? You have to actually say, I accept the terms, but you have to… it clicks… it takes you to the other screen. You have to scroll all the way down with the terms, meaning…
SFV Room 200B: You have to see it… Oh, yeah. …before you can say, I accept. Otherwise, it won’t work.
SFV Room 200B: You can never log in. You have to do that. Every time.
SFV Room 200B: So, because they know they’re dealing with lawyers, right? They’re like, okay, we have to make them read this stuff, or at least pretend, right? So it does that. Again, it’s just a matter of reasonable notice.
SFV Room 200B: Right? Reasonable notice. So, if the notice appears to be hiding somewhere, which the case will… cases will show you, then it’s not going to work, right? Pro-CD.
SFV Room 200B: an example, one way… I’m not so sure
SFV Room 200B: If the reasoning of the court is…
SFV Room 200B: perfect, and you don’t have to think that way either. I mean, I agree with the court overall.
SFV Room 200B: Because you want to get away with…
SFV Room 200B: the license is somewhere, you could have seen it, you should have seen it, you didn’t see it, you’re using it as an excuse to send the product back.
SFV Room 200B: Verizon sent me this Wi-Fi extender or whatever, I think I mentioned it. I sent this stupid thing back, because I knew there is some… something somewhere that is going to get me, which they did.
SFV Room 200B: Right? They charged you for it. Yeah, something like that. Some $150 a month or something, for the bullshit thing that doesn’t even cost $150. If you buy it… Yeah. Or lease. Yeah, those suck. Highway robbery, man. So, somebody from this class… Oh, yeah, it was Carmen.
Cameron Smith: That was me.
SFV Room 200B: Cameron? Yes. You saved me.
Cameron Smith: Did it work?
SFV Room 200B: The executive team immediately contacted me. You’re kidding.
SFV Room 200B: I’m not kidding you. Not only that, I mean, they went over and above. I mean.
Cameron Smith: They’re awesome. Their executive team is great.
SFV Room 200B: I’m sorry that I was, you know, upset. So does Cameron get an A now?
SFV Room 200B: Sorry, Cameron, I tried. But I put his name down here because he briefed the case today. So if you do, your name ends up on my book. And it’s literally a black book, see?
SFV Room 200B: So, if one day you say, Professor, I’m short, I’m this, I need help, whatever, guess what? I go see how many cases you briefed in my class.
SFV Room 200B: You didn’t know that, did you? If you didn’t brief a case in my class.
SFV Room 200B: Sorry, I have a headache, I can’t help you. I don’t care how much I like you. What do you mean? I gotta tell you, I… I… in this class, I operate by the book.
SFV Room 200B: You do your work, I help you. You don’t do the work? I don’t help you. I don’t want a stupid lawyer. I want a smart lawyer to represent me later. I’m sorry to say. I don’t want a lazy lawyer.
SFV Room 200B: I really don’t.
SFV Room 200B: Man, I’ve been practicing for 27 years, I should be retired.
SFV Room 200B: And as soon as I become lazy, money.
SFV Room 200B: As soon as I become… He loves money. No, I love half of my job, I love. The other half is all about money. Oh my god, who does, right? But I’m telling you this, honestly. The moment I become lazy, that I feel that somebody’s gonna get hurt.
SFV Room 200B: I’m going to stop practicing law.
SFV Room 200B: I will immediately start practicing law.
SFV Room 200B: Tomorrow, I have trial in Van Nuys.
SFV Room 200B: Who does this? I drove to the court, to that department today.
SFV Room 200B: Jury trial? Yes. I went to that court today, and the bailiff was like.
SFV Room 200B: Michael, you’re a day early. I’m like, I know. I wanted to look at the equipment to make sure you guys have all the equipment I need to connect my stupid laptops to. Two laptops. I looked at everything, I said, okay, I’m satisfied, I left.
SFV Room 200B: Who does that? Even he was laughing, he’s like, are you kidding me? I’m like, no, I’m not going to be embarrassed in front of my client, or in front of the judge, and say I’m not prepared.
SFV Room 200B: I want to use the equipment, I want to make sure that I can use the equipment.
SFV Room 200B: Is it criminal or civil? No, it’s a quasi-criminal, unfortunately. It’s a contempt hearing.
SFV Room 200B: So, but it’s in a civil context, but it can be a criminal if it… If the content is… It’s not against me. It’s against someone else. It’s not against my clients, against the other, the opposing party. I’m trying to…
SFV Room 200B: Make sure that it goes through.
SFV Room 200B: Right? The judge literally says, you’re crazy.
SFV Room 200B: Person.
SFV Room 200B: And, then she won’t be able to get her green card, and then she’ll be kicked out of this country, which would be fantastic.
SFV Room 200B: She’s really cuckoo. Okay, let’s move on.
SFV Room 200B: Are you giving the number to ICE?
SFV Room 200B: I’m sorry? I’m kidding, I don’t have their number. I can give you the number twice. Erase that from the… It’s okay. First, I have to get the ruling, then I’ll take care of the rest. Yes, sir? I was gonna say I could do the next for Hill. Yeah. Awesome. Gateway. Does anybody remember Gateway? I was gonna say, I don’t know what that gateway is.
Cameron Smith: I’ll do that.
SFV Room 200B: company. Gateway, at some point, was, like, IBM. They were big. Yeah, when I was, when I was, like, in my… I think I was, like, 18, 17, 18, 18, 19, I used to work for a company called Packard Bell.
SFV Room 200B: Did you ever hear of Packard Bell? Packard suddenly became, suddenly became the fourth largest
SFV Room 200B: computer, manufacturing selling company… computer company, in… in the United States, until they got caught.
SFV Room 200B: they were using used parts, and old computers, they made them into look brand new, and sold them. We didn’t know. Even we didn’t know. I was working there.
SFV Room 200B: And, I decided to… one day, I decided to…
SFV Room 200B: repair two computers at the same time on both sides of my desk. Everybody hated me, they were pissed off at me, and after two months, I became a supervisor. So, they all hated me. They’re like, you idiot, you just made it so difficult for us. Now we have to do, at the same time, two computers.
SFV Room 200B: So, anyway, but then they got caught, they shut them down. The government did. But Gateway at the time was huge, and Gateway was in legitimate business, so let’s see what Gateway is all about.
Cameron Smith: Acerbot gateway.
SFV Room 200B: I’m sorry?
Cameron Smith: Acer, the computer company that they bought Giga.
SFV Room 200B: Excellent. Thank you, I didn’t know that.
SFV Room 200B: So, for the facts of this case, I kept it very brief, but… Good. Yeah. Plaintiff ordered a computer from Gateway, as a computer company, and once he received it in the packaging, it stated that he could have rechecked the computer, their product, by sending it back within 30 calendar days.
SFV Room 200B: After those 30 days, the computer gave, Hill problems.
SFV Room 200B: And I believe there’s, like, other people involved, because they filed a RICO case against K-Waywood.
SFV Room 200B: I think when I first heard it, I was confused, but it’s not like the usual racketeering and stuff you hear, like, online and stuff, but the mass suit filed against Gateway, for this,
SFV Room 200B: considering the problems came after the 30 days, and they were, like, screwed in a sense, but I wrote here that they even… this case references the case from before the Pro-CD case, where it’s the, can a consumer be bound by the terms and conditions that were sent in the packaging? And I meant that in, like, a physical sense.
SFV Room 200B: And so when the court did reference the ProCD case, they said the consumers can be bound by the agreements that are sent within the packaging of a product, like when you first open the box and see it. So, unfortunately, they were on the bad end of the stick here, and they weren’t able to get a refund or whatever it is they wanted from this.
SFV Room 200B: Thank you. So, great job. It involves an order placed by telephone, obviously.
SFV Room 200B: For the computer, payment was paid by credit card. The box arrived, it contained important terms, or at least it appears, otherwise they wouldn’t be litigating.
SFV Room 200B: They were accepted by keeping the computer for 30 days or so.
SFV Room 200B: The court basically follows Proceeding, right? Held that the buyer had the, had to arbitrate his dispute with Gateway.
SFV Room 200B: This arbitration clause is such a…
SFV Room 200B: Blessing and a curse at the same time.
SFV Room 200B: one day when we have more time, I’ll remind me and I’ll tell you about arbitration clauses and Wells Fargo, the bank that I fought
SFV Room 200B: For more than 3 years, on behalf of Hundreds of people.
SFV Room 200B: And you’ll see how… messed up arbitration clause was interpreted at the time by Superior Court judges.
SFV Room 200B: Until the SHIT hit the fan, and the courts realized how crook was Wells Fargo.
SFV Room 200B: With their products, and the way they sold the products, and…
SFV Room 200B: The games they were playing, and this became a national news.
SFV Room 200B: And then the courts suddenly decided to shift and change from those earlier rulings, but it was too late already.
SFV Room 200B: Unfortunately.
SFV Room 200B: I have a chart here that I have created.
SFV Room 200B: I will have the… the school
SFV Room 200B: Place this in D2L for all of you.
SFV Room 200B: This chart makes the cases, Pro-CD, Gateway, and, the other Gateway, the 2000 case.
SFV Room 200B: So easy to understand. You will know exactly what the court ruled, why the court ruled that way, what law did the court use to support its ruling, and findings, the stance, the current stance, etc, etc. It’s all going to be in that chart. I will make it available, but you’ve got to read the cases.
SFV Room 200B: Right? This is… this is a cheat sheet. But the only cheat after reading this stuff. We don’t cheat before.
SFV Room 200B: Right? That’s why I didn’t send it to you last week.
SFV Room 200B: But I will send it to you this week, okay?
SFV Room 200B: Great job. Yes, sir? Oh, what’s the main, like, point of an arbitration clause? Like, why don’t they just include that in the, like, terms and, like, the contract itself? It’s in contract, in many contracts. It’s like in my retainer agreements, as I said, arbitration clause is there. What it does is
SFV Room 200B: It prevents you from going to court and having a jury. It prevents you from going to a judge.
SFV Room 200B: So… so it… a lot of times when you want to keep everything hush-hush and confidential, right? So, since you asked that question, when my client
SFV Room 200B: wanted to refinance his home. The first client that I got consumed Wells Fargo.
SFV Room 200B: When he wanted to refinance his home, he realized that his credit was shut.
SFV Room 200B: And why was he refinancing his home? He wanted to get cancer treatment. He couldn’t get cancer treatment. He later died because of cancer. And when we investigated, and I literally thought he was out of his mind, he’s bullshitting me.
SFV Room 200B: But when I investigated, I found out that Wells Fargo had… A plan in place.
SFV Room 200B: That ultimately forced its employees to open people’s accounts, and open accounts under their names without their knowledge, which ultimately ruined everybody’s credit.
SFV Room 200B: destroyed his credit, he couldn’t refinance his home, he couldn’t get money out of the house, and so I sued Wells Fargo.
SFV Room 200B: And… One of the things that they immediately came and said in court, Your Honor, there’s an arbitration clause.
SFV Room 200B: And I said, wait a second, Listen to this.
SFV Room 200B: It’s a good practice, right? This was before a judge in LA Superior Court, before he knew what was going on.
SFV Room 200B: I’m suing, saying these fake accounts are not my clients.
SFV Room 200B: They’re saying, like, that my client’s subject to arbitration clause based on his other accounts.
SFV Room 200B: But I’m not suing for those accounts. I’m not… that’s none of our concern. I’m suing for these fake accounts. If it’s a fake account, there’s no signature, therefore, there’s no arbitration clause attached to it, right? You would think that the court would say yes. The court said no.
SFV Room 200B: You have to go arbitrate. Why? Because there’s an arbitration clause, the language says.
SFV Room 200B: Anything relating to any dispute between you and Wells Fargo shall be arbitrated. Therefore, go arbitrate. Now, let me tell you, I have to tell you, and I’m on the record, but I’m going to be honest. The fact is, at the time, most courts wanted these cases out of there.
SFV Room 200B: The surest way to kick you out of the court was if there’s an arbitration clause. Get lost, go arbitrate. Bye-bye.
SFV Room 200B: I’ll come back.
SFV Room 200B: It’s binding arbitration.
SFV Room 200B: See you later. But arbitration is flawed, it’s biased. Well, that’s what… at least that’s what I argued, right? And then later on, I noticed from the other cases in San Francisco and other places.
SFV Room 200B: When the judge’s eyes…
SFV Room 200B: opened because the article was published, my client’s case was on the cover of LA Times. Oh, wow. Yeah. I thought you did an interview, right? About the… talking about the Wells Fargo situation. Yeah, if you… if you search online and put Michael Kane Wells Fargo
SFV Room 200B: you probably will see CNN stuff, and… but most important, that very first article, which I think from 2013,
SFV Room 200B: It was on the cover of… it was on the first page. Probably not. Some lawyer in San Francisco happens to read it.
SFV Room 200B: And he also had a client like that.
SFV Room 200B: So then it just blew up, because he called me, I called him, and we were like, oh my god, so we let it known, we let it known that apparently Wells Fargo is doing this
SFV Room 200B: As a matter of routine, this is not an isolated incident that, oops, we had no idea.
SFV Room 200B: it just became national news later. And of course, you remember executives were testifying before Congress. I testified before closed doors.
SFV Room 200B: And remote.
SFV Room 200B: But… It was something.
Sevada Safarian: This turned into a class action, right?
SFV Room 200B: I just want to tell you, arbitration clause peeled my client’s case. Peeled it.
SFV Room 200B: Imagine if this was before a jury of 12, and they would hear all this bullshit. Imagine what they would do to Wells Fargo. They’ll probably pay millions of dollars. But because this arbitration ends up before an arbitrator, you know, whatever.
SFV Room 200B: And… who pays these arbitrators? Me?
SFV Room 200B: or portions.
SFV Room 200B: Corporate America. Mostly corporate America.
SFV Room 200B: Are you gonna get real justice? Probably not. But you get it from a jury.
SFV Room 200B: When the jury hears what the F they did, to these people.
SFV Room 200B: I’m reading it right now. You’re reading it right now? It’s still there? But my point is, you said arbitration, so I wanted to tell you, it can be a curse, it can destroy. That’s why I have the language
SFV Room 200B: It’s literally a page in my retainer that, first, it informs the client what is an arbitration. I don’t just say, sign here. No, it says, what is an arbitration? Do you agree to this? You don’t want it? Don’t sign it.
SFV Room 200B: Right? And it’s actually better for the client, because it costs me nothing to sue people. I’ve never sued a client for money, by the way. Not in 27 years. I’m owed hundreds of thousands of dollars. I just don’t like suing people.
SFV Room 200B: Screw it. You shouldn’t do it either. It’s a bad practice. I wouldn’t do it if I were you. It’s bad practice. It makes you look bad.
SFV Room 200B: And it’s a very small worm.
SFV Room 200B: All the lawyers that are assholes like that, we know all of them. I’m not kidding. A couple of them are my close friends, and I always tell them, you’re a jerk.
SFV Room 200B: I don’t trust you. I tell them I don’t trust you, because you don’t send a bill to your client until after 3 months, when you have racked up $80,000. Then you say, pay me, and the client doesn’t pay you, then you sue them. And you get paid that way. That’s just dishonest, in my opinion. Don’t do that.
SFV Room 200B: You shouldn’t practice like that.
SFV Room 200B: Then you, the sun is good. Bless you.
SFV Room 200B: All right, so I’ll send you the chart. Let’s see, where are we?
Arthur Mazloumian: Professor, real quick.
SFV Room 200B: He, somebody had a question?
Arthur Mazloumian: Yeah, in arbitration, who… who gets to choose the arbitrator?
SFV Room 200B: Well, it depends on the language. So, there are rules, okay? So the arbitration language cannot literally be one-sided. I will decide who the arbitrator is going to be, I will decide where it’s going to be, I will decide what it’s going to be. - those languages will be thrown out. So a lot of these cases now.
SFV Room 200B: Like, for example, California made arbitration for sexual harassment in workplace, Unenforceable.
SFV Room 200B: Because the guy was, like, sexually harassing, whatever, the employee, right? And they would say, you can’t sue me, you gotta go arbitrate, man.
SFV Room 200B: And they would force her into arbitration, which was, again, baloney.
SFV Room 200B: Right? Compared to a court, let the Judy hear all that stuff.
SFV Room 200B: Well, so California now finally said, nope, not in those cases.
SFV Room 200B: Right? That’s a heinous act we won’t accept. But…
SFV Room 200B: The language must be, for the most part, it has to be neutral.
SFV Room 200B: So the… usually, who decides? Usually, it says that each party can pick one, and then that… those people will pick the third guy or girl who’s going to hear the arbitration. Or you go to an arbitration place, or you go to a judge, the judge decides.
SFV Room 200B: There is… there’s mechanism for picking a, hopefully, a neutral Arbitrator.
SFV Room 200B: I went to arbitration once.
SFV Room 200B: I’ve went to… I’ve gone to arbitration hundreds of times. Well, once when I was working for a law firm.
SFV Room 200B: He’s dead now, so I can talk behind his back.
SFV Room 200B: We went to arbitration, and my boss told me
SFV Room 200B: you’re handling this thing, I’m just gonna sit in the back, And watch.
SFV Room 200B: Okay.
SFV Room 200B: He didn’t sit at that. He sat right next to me. Your boss never did anything. He went to arbitration. It was, I think, Judicate West. It’s a famous…
SFV Room 200B: place, I love that place. The arbitrator, my boss knew.
SFV Room 200B: I had no clue.
SFV Room 200B: He knew him from before.
SFV Room 200B: as I’m talking, he kicks me hard, my boss, and I get very angry. And he tells me to my ear, shut the F up, you’re finished, you’re… stop.
SFV Room 200B: Is it okay?
SFV Room 200B: So I stopped to come out, and I’m like, what the hell is wrong with you? Why did you kick me? What’s… you know, I’m doing what I’m supposed to be doing. He said, listen, he’s a friend of mine. You didn’t get that? I had lunch with him yesterday. This case is in the bag already!
SFV Room 200B: I mean, complete fraud. Complete. And I said, oh my god, no wonder you made me do this. He put, you know, he set me up.
SFV Room 200B: Right?
SFV Room 200B: Of course, two weeks from that day, the judgment comes, full judgment for us against the company I don’t want to mention.
SFV Room 200B: But you get the… so… but don’t you think that that happens on the other side? All the time?
SFV Room 200B: If an insurance company is constantly having their cases heard in front of that arbitrator, do you honestly think the arbitrator is going to hold against them every time? Of course not! They’re never going to use the guy again, or the girl, right? So he has to kind of, sort of.
SFV Room 200B: Give them a discount, at least.
SFV Room 200B: Right? But at least for the jury, you have a real shot.
SFV Room 200B: So arbitration, in many ways, sucks.
SFV Room 200B: But in many ways, it’s good because it’s cost-effective, very cost-effective, right? Instead of litigating and spending millions, thousands of dollars in court, you can do an arbitration for, like, $3,000, $4,000, $5,000, $10,000.
SFV Room 200B: Best arbitrator, retired judge, $10,000 a day. Which is what we did with Wells Fargo, incidentally. We ended up in mediation with Wells Fargo for 3 days in a row. It went all the way to 11 p.m.
SFV Room 200B: But it’s settled.
SFV Room 200B: All the way to 11pm, from 9am to 11pm, 3 days. But don’t they choose the arbitrator? No, we all chose the arbitrator, and then Judge Green, God bless him, he said, if you guys cannot decide, then I will decide.
SFV Room 200B: And so we decided, and we picked a panel.
SFV Room 200B: It cost 30 grand a day. 30,000 a day. That’s 90 grand. It was better than millions of dollars that we were going to spend in court.
SFV Room 200B: There were 12 lawyers on the other side, 6 or 7 on this side. More than 6. I mean, can you imagine how much money that was? Legal fees. Insane legal fees. So, in your opinion, do you think the arbitration clause protects the business more, or the client?
SFV Room 200B: If I have to, my personal…
SFV Room 200B: view is that it protects their company more than the client, than the consumer. Sure. Open most of these contracts. Apple computer, I don’t care what. I guarantee you’re going to see arbitration clause in there. Also, because it prevents you from finding a class action.
SFV Room 200B: So, a lot of times, they go to court and say, Your Honor, this case is subject to arbitration, and the judge says, yep.
SFV Room 200B: There’s no class action. Get over there and go arbitrate.
SFV Room 200B: Bye!
SFV Room 200B: So, it prevents arbitrary class action, which is very helpful to many companies, right? That’s one of the reasons why they said in the sexual harassment, we won’t accept, because usually when you’re harassing one, you’re probably harassing others.
SFV Room 200B: Well, you probably harassed others, and you got away with it.
SFV Room 200B: Okay. When you, like, when the plaintiff wins the arbitration, who decides, like, how much they get paid? Arbitrary. Yeah, the arbitrary decides. And I gotta tell you, it can be such a curse
SFV Room 200B: I remember there was one time I was in arbitration, and I swear to God, the arbitrator was asleep half the time. I mean, sleep like this. Testimony. You were in testimony.
SFV Room 200B: Did you pay for that arbitrator? Well, of course we paid. I don’t remember the outcome. I’m sure it wasn’t bad, otherwise I would remember. But I thought, look at this. You know what happens if you go to the judge and say, Your Honor, the arbitrator was asleep?
SFV Room 200B: The judge will say, I don’t care. It’s an arbitration. It’s an arbitration clause. Wake him up, I don’t care.
SFV Room 200B: Wow. I can’t do anything, counsel. I’ll tell you this to tell you how unfortunate it can be.
SFV Room 200B: The guy could be on drugs. You have to present your case before this moron.
SFV Room 200B: Good luck!
SFV Room 200B: That 30K goes straight to the attorney? The 30K went to the company that… half of it goes to the judge. We had… we had… not judge… we didn’t have one judge, we had three… two retired judges, and a lawyer, as we had a panel.
SFV Room 200B: It was… trust me, getting that much requires a lot of…
SFV Room 200B: man-woman power, you know, it really does.
SFV Room 200B: someone allowed to wish him luck? Yes, I went like this. I was like, you know, I was just bullshit. Even the other lawyers laughing and looking at me, like, smiling is like, oh, no, what are we gonna do? I’m like, a couple of times. Wake up, dude, come on!
SFV Room 200B: And then I said, Ivana, should we go for a stretch?
SFV Room 200B: If you’re that old, just please, please, retire. It is. Attration clauses are there for a reason.
SFV Room 200B: And the reason, as I said, one is to stop a class action for the moving fund, but more importantly.
SFV Room 200B: It is to limit… limit the damages by a lot. Litigation is extensive, and if you hand it over to a jury, if the jury doesn’t like… doesn’t like, not the law, doesn’t like what the company did, they’ll punish them.
SFV Room 200B: But a judge is much less likely to do that. The judge will go, I just have to go based on the law. What are your damages? Prove it.
SFV Room 200B: Right? I’m sure a jury would have kicked Wells Fargo’s ass when the guy ended up dead because of cancer. We couldn’t really truthfully, honestly establish that it was related, causally related, but I could certainly establish that he was trying to refinance, and he couldn’t, and his credit was shut.
SFV Room 200B: Only because of their conduct.
SFV Room 200B: Now, if you were the jury, would you… would you fight for him?
SFV Room 200B: I think any jury would. See?
SFV Room 200B: So, the arbitration clause killed that case, that was the first case. You got that G63? I would have got a G93, not 63. Is there any way to circumvent the whole arbitration, or you always have to… Unfortunately, unfortunately, that’s a very good question. What was the question? He said, is there any way you can circumvent at ease, guys?
SFV Room 200B: the, I’ll call it break in a minute. You can get around the arbitration part, yeah?
SFV Room 200B: Well, you don’t do business with that company, somebody said. But every company does an arbitration. Exactly, but how do you… I want an Apple computer, what do I… where do I go? What do I do? I don’t agree to this arbitration clause. I’m sorry, say again? If a client of yours says, I don’t agree to the… Oh, well, then I would… I would decide whether I want that client or not.
SFV Room 200B: Right? So, yeah, there are many occasions
SFV Room 200B: Where, not arbitration, usually they don’t say that, but they’re like.
SFV Room 200B: This paragraph I don’t understand, or I don’t like, I just cross it off. Does the person locally teach us you if they say, I, you know, I’ve seen many, contracts, and I feel like I’m gonna be judged as a teacher’s person.
SFV Room 200B: If I were to say, I’m not sure… No, I personally, as I said before, I like a client that reads.
SFV Room 200B: for us to understand. I really would… because I don’t do mom-and-pop stuff, I do stuff that are life-changing, for the most part, right? And I want the client to be sharp, and pay attention, ask questions.
SFV Room 200B: Why not? It’s your right to say, I don’t want the arbitration clause. Why not? So, there have been times where you’ve agreed to… Sure. In fact, there has been occasion where I can’t remember right now, but I got into contracts with some companies. There were arbitration clauses I didn’t sign.
SFV Room 200B: I didn’t initial. Oh, doctors. Doctors’ offices, they all have arbitration clause.
SFV Room 200B: And when I go to the doctors, some doctors, I… I ignore that had a graph.
SFV Room 200B: And, or sometimes, when it requires you to write something, I just write, no.
SFV Room 200B: I don’t initial, I say no, meaning I’m not agreeing to it. And if you took me as a patient, too bad for you. I said no. It’s a good idea, I’ll start doing that. Yeah, start doing it. If you have that option, you know? But no.
Karia Salazar: Have you ever crossed off any, like, arbitration clauses?
SFV Room 200B: I did it with Mercedes dealership, by the way.
SFV Room 200B: I, I wrote no.
SFV Room 200B: I didn’t agree. And what happened? And, well, when time came that, unfortunately, the car was a lemon, they couldn’t rely on the arbitration clause, although I wasn’t threatening to sue, I just said, take the stupid car back.
SFV Room 200B: I sold the car anyway. Somebody had a question on Zoom before we go on a break.
Karia Salazar: Oh, no, I just, do you cross off the arbitration clause, or you just write no next to it?
SFV Room 200B: So, no, they don’t give you the option to cross off, because it goes from one spot to the other spot for you to initial.
SFV Room 200B: Right? So all I could do was just write no.
SFV Room 200B: They can also refuse to see you as a patient, though. Yes, absolutely. Any doctor’s office working with my office? On a lean basis. On a lean basis, when they send their lien… I delete most of it.
SFV Room 200B: I’m not kidding. I learned that from my boss. He was a crow. I’m not, but… but I still delete the bullshit language, right? They’ve seen those things, right, I think. Then I print them.
SFV Room 200B: Then I sign them, then I send them back.
SFV Room 200B: And nobody to this day… oh, one doctor said no. And of course, some of these liens that are, like, two, three pages, I just tell the client, I refuse to work with this doctor to… I’m sorry. If you want to go there, I can’t be a lawyer. Of course, he fires his doctor immediately, right? Because I’m like, this language is bullshit. He wants your firstborn.
SFV Room 200B: I’m not going to give it to him. It’s reasonable to want your money, but to say, I get paid first before the lawyer gets paid? You. I’m going to collect all that money, I’m going to give it to you. Screw you.
SFV Room 200B: Right? Plus interest!
SFV Room 200B: Hmm.
SFV Room 200B: Why interest? It’s a lean idiot! You know, but they come up with this stuff that makes no sense. So I do that, I delete half of it. My last question. Like…
SFV Room 200B: Most do. I don’t… well, they may not find it to be in their best interest, I don’t know why. It’s just a matter of their lawyer’s interpretation of what is best. So sometimes, the company might think that litigation is going to be so expensive.
SFV Room 200B: You’re either going to sue them in small claims court and limit yourself to $10,000, $12,000,
SFV Room 200B: Or, if you want to go get a lawyer, no lawyer’s going to take your case because it’s too small, and so you won’t be able to sue anyway, since you can’t arbitrate, you’re totally toast.
SFV Room 200B: Right? So that’s a strategy, too. It makes sense.
SFV Room 200B: That’s how the famous hot coffee… the McDonald’s hot coffee case was settled through arbitration. Was it? Where she got that hot coffee spilled on her. It wasn’t a jury decision? No. No, no. McDonald’s, the hot coffee. She, I sued Starbucks once, and I regret to this day that I did it. Why? Why? Sharp, sharp, sharp, annoying
SFV Room 200B: a-hole lawyers working for them. The guy was… the guy literally said, now, I’m going to point to your toe on your left foot.
SFV Room 200B: How is the pain from a scale of 1 to 10 today? She’s like, I never had pain in my toe. It’s okay, ma’am, just answer the question. Now, let’s go to the second toe. Are you serious? I swear to God, I’m not joking. Until he got to the hair. There are attorneys that are… They do something to you that you want to go kill yourself. What’s the idea behind that?
SFV Room 200B: This would frustrate the hell out of you. Most lawyers, if you ask most lawyers that have sued Wells Far…
SFV Room 200B: McDonald’s. They’ll tell you, don’t do it. Yeah, don’t do it. This is a big case. If it’s not a big case.
SFV Room 200B: Wasting your time. They’re gonna kill you. With discovery, discovery, that’s before there was a deposition rule of 7 hours. Now there is a 7-hour count. Sorry, we won a recent case against them for… Yeah, we got a judgment of $50 million. What? What? What was it about? It’s the one I heard about.
SFV Room 200B: It was probably, like, Ashton Kutcher or something, famous, I don’t know. It was on the news. Who? I heard what you said. You know what you said. I was gonna say it’s the big trial lawyer, Jay Crowley. Eddie’s Eddie’s, guys.
SFV Room 200B: Yes, they are. Very different state to state, yeah.
SFV Room 200B: There is also the federal arbitration rules. There are so many rules these days.
SFV Room 200B: And California has passed so many rules regarding arbitration as well. And if you read these cases that I tell you I read weekly, you’ll see that now the courts are ruling against arbitration as soon as they find something that doesn’t make sense. Like, no, you can’t enforce. All right, 7.46, let’s go on a break until 8.01 sharp. Thank God.
Sona Kazarian: Can I ask something?
SFV Room 200B: We need to change the scenery.
SFV Room 200B: I would get it, I was like…
SFV Room 200B: So this is the longest moving one.
Sona Kazarian: Professor, can I ask something?
SFV Room 200B: Yes, ma’am, absolutely.
Sona Kazarian: I was maybe 10 minutes late, and I missed a roll. Can you.
SFV Room 200B: Positive.
Sona Kazarian: mark me present?
SFV Room 200B: You missed the roll call, is that what you need?
Sona Kazarian: Yes.
SFV Room 200B: Are you…
Sona Kazarian: I’m Sono, Kazarian.
SFV Room 200B: I’m not gonna touch most of it, just in case.
SFV Room 200B: I mean, I… How old age were you, ma’am?
Sona Kazarian: I think I joined maybe 9 minutes left? 8, 9, I’m not sure.
SFV Room 200B: Where am I?
SFV Room 200B: Okay, thank you.
Sona Kazarian: Thank you.
SFV Room 200B: How much.
SFV Room 200B: All right. 23andMe. How many times has this comedy been sued?
SFV Room 200B: Too many times. Too many times. All my DNA is out. Once they get caught, like…
SFV Room 200B: selling people’s information or something? DNA or something like that, like… Yeah, I heard about that. I don’t know who my ancestors are, because of these idiots. You keep selling your stuff, otherwise I would do it. Right?
SFV Room 200B: Every, like, I want to know which cave my grandpapa came from. I can’t trust these guys. Okay, anybody wants to tackle 23andMe on page 172 is going to be tested, guys. Just letting you know right now. Sir, please.
SFV Room 200B: May I please get your name? Yes, please. This case was decided in the U.S. District Court of San Jose in 2014.
SFV Room 200B: This case involves a class action claim against 23andMe, the defendant, in relation to a dispute over the enforceability
SFV Room 200B: of the terms of service during the purchase of a DNA test, or the personal genome service.
SFV Room 200B: The dispute here is specifically about the enforceability clause, which was found in the Terms of Service. The plaintiffs argued that 23andMe’s Terms of Service section was not adequately visible during the purchase process. In fact, customers were not required to view the Terms of Service or click
SFV Room 200B: to accept the terms of service when purchasing the DNA kit, and instead only saw the Terms of Service via hyperlink when creating their accounts to register their DNA kits.
SFV Room 200B: Also 23andMe only offered a full refund in a 60-minute cancellation window right after the purchase, and only entitled the customers to a partial refund after the expiration of this window.
SFV Room 200B: After the FDA sent a letter, a warning letter to 23andE saying that the company violated the Food, Drake, and Cosmetic Act by selling their personal genome service, and has filed various claims, all to which 23andE filed a motion… filed a motion to compel arbitration.
SFV Room 200B: The issue was whether the arbitration clause in the terms of service was enforceable under internet-based contract formation laws, and the rule was the fact that the website’s terms of service was more hyperlinked still allows the enforceability of the contract terms if they were conspicuous.
SFV Room 200B: The analysis
SFV Room 200B: Here it is that the court reasoned that the plaintiffs accepted the terms of service when they created their accounts or registered their DNA kits, and thus the arbitration clause was enforceable. The court first discusses the relevance of click wrap and browseWrap contract laws. The court said that the purchase stage of the DNA kit resembled a browseWrap agreement.
SFV Room 200B: Which allows the user to continue using the website or its services without even knowing that such a contract exists.
SFV Room 200B: The court then said that because 23andMe’s website did not require customers to acknowledge the terms of service during purchase, this agreement provided insufficient notice to customers. However, during the account registration process, customers were able to review the terms and were required to give their assent to the terms.
SFV Room 200B: Here this resembled the click-wrap agreement, which then bound the customer to all the terms in the contract, including the arbitration clause.
SFV Room 200B: The court also shot down the plaintiff’s argument that the terms of service here resembled the shrink wrap agreement because 23D did not argue that the Terms of Service took effect when the customers failed to return the DNA kits after a certain period of time.
SFV Room 200B: their argument that the refund policy was too restrictive did not negate their affirmative dissent to the terms. Thus, the core reasoned that 23andMe’s terms of service were ineffective to buying customers who only purchased a DNA kit and did not register an account, but were effective to buying customers who did, in fact create an account in addition to purchasing DNA kit.
SFV Room 200B: Very good, very good. So what did the court say about the browse wrap in this case? Is it enforceable?
SFV Room 200B: the browser app.
SFV Room 200B: Was it enforceable?
Ruben Hunanyan: No.
SFV Room 200B: Housing. Were you agreeing to the terms, or while browsing? No. No.
SFV Room 200B: But when did you become bound by the terms?
SFV Room 200B: You click on the hyperlink to go further into the… Yeah, if you want to… if you want to turn in the kit. Yeah. Right? So the court basically says, browse wrap, no, but click wrap, yes.
SFV Room 200B: Right? All of which goes under the umbrella of acceptance. So, I’ve had, in occasion in the past, students
SFV Room 200B: send me a message. I don’t understand, well, what does this have to do with our…
SFV Room 200B: The subject of our study. Well, if you look at the top of the page, like I told you before, the agreement process.
SFV Room 200B: Digital contracts.
SFV Room 200B: This is the age of digital contracts, right? I’m referring to the 80s on, right? 80s, 90s specifically.
SFV Room 200B: And so all this stuff came. Shrink wrap, rouse rap, you know, right? And the court basically is trying to address each one, whether or not
SFV Room 200B: if you click on the terms, you’ve accepted those terms, right? And what happens as a result? But if you’re browsing, have you accepted the terms? If you’re merely browsing? Not necessarily. In other words, it comes down to, if you get confused.
SFV Room 200B: All you have to remember is reasonable notice. I told you before.
SFV Room 200B: If you can… if you get confused, or you don’t know, shit, what am I gonna say now?
SFV Room 200B: just say the argument is all about reasonable notice. If the consumer or the party that is being sued, or is suing and, for example, is being forced to arbitrate, or whatever, or one of the terms are being shoved down his throat, did he have reasonable notice?
SFV Room 200B: Did he accept in any way? By maybe keeping the goods for too long? By maybe silence? By when he had an opportunity to speak and didn’t speak?
SFV Room 200B: Right? Kept the products for too long, or… or, any of the, you know, click the… click the, terms of agreement, terms of service, agree to the terms of service, right? All of that. Very, very important. So, it would be a little hard for the court
SFV Room 200B: who forced me to go into arbitration with Mercedes-Benz if I wrote no on their arbitration clause, right? At least I have a shot.
SFV Room 200B: to say, Your Honor, they had an opportunity at that time, when I signed this thing, handed it over to him, to say, sorry, sir, we’re not going to sell you the car.
SFV Room 200B: You either say yes, we don’t want to sell you the car. Like, somebody just asked me, what happens if the client says, I think you said, if the client says, I don’t want the arbitration clause.
SFV Room 200B: I will decide whether I want to still work with this client.
SFV Room 200B: And I would cross it off. 99% of the time, I would absolutely say, I don’t care.
SFV Room 200B: You want to go to court? By all means, go to court.
SFV Room 200B: I am in court every freaking day. You think it’s better for me to go to court, or you?
SFV Room 200B: Right? Who do you think is likely to get more justice? Probably me.
SFV Room 200B: The same court you’re going to sue me, I’ve probably appeared 50 times already.
SFV Room 200B: Like, in the past 5 months.
SFV Room 200B: Right?
SFV Room 200B: I don’t think it’s a good idea to… to sue a legit lawyer in court, because the judges keep seeing you.
SFV Room 200B: They know what you’re about.
SFV Room 200B: Right? And if a client comes… thank God, it has never happened to me, but…
SFV Room 200B: But the arbitration clause,
SFV Room 200B: for the most part, is the most damaging clause, I think, in a contract to either party.
SFV Room 200B: Depending on how you look at it.
SFV Room 200B: Okay.
SFV Room 200B: So, again, under the umbrella of acceptance, the court basically says, look, if the language is there, and you have to basically click it to accept it, you’re stuck with it. Sort of like the Uber case that we’re going to do in a minute.
SFV Room 200B: Let’s go to cage… 181, Mayer vs. Uber Technologies.
SFV Room 200B: Page 181.
SFV Room 200B: So, essentially, the court here said that the plaintiff who registered for Uber on his Samsung mobile phone agreed to Uber’s terms and conditions, which included arbitration.
SFV Room 200B: The two screenshots of the Samsung phone showing the registration process are at the end of the opinion. In other words, if you go to the end of the opinion.
SFV Room 200B: UFC…
SFV Room 200B: that the two screenshots are right there on page 190. Take a look at page 190. If you haven’t looked at it already, please do.
SFV Room 200B: Right? It says right there.
SFV Room 200B: Right? And the court basically says the court vacated the order, so on and so forth, and this is basically how the court ruled on that case.
SFV Room 200B: Right? What about Amazon?
SFV Room 200B: Amazon, I think it says, Terms of Service and Privacy Policy, in caps, and it literally… it’s in yellow.
SFV Room 200B: So, hard to go by and say, I didn’t see it.
SFV Room 200B: And then you have to click, again, click wrap. By placing your order, you agree to Amazon’s privacy policy and conditions of use.
SFV Room 200B: And then, privacy… these are my notes. Privacy policy and conditions of use are in blue, indicating a hyperlink to give you access to the relevant documents.
SFV Room 200B: Right? And I, I… in my notes, I cite, a case from Amazon where the judge reversed the dismissal of a class action.
SFV Room 200B: The court basically said reasonable minds could disagree regarding the sufficiency of the notice provided by Amazon.
SFV Room 200B: So the court says it’s got to go to the jury.
SFV Room 200B: To decide whether the notice was sufficient.
SFV Room 200B: Even with a hyperlink, even with yellow, all caps, So you’ll never know.
SFV Room 200B: That’s why you get paid to duke it out.
SFV Room 200B: Right?
SFV Room 200B: That trial tomorrow. We’ll see what happens.
SFV Room 200B: It’s going to be a duking out, because another colleague of mine told me that the opposing lawyers that I have for the case tomorrow, when they show up in the hallway, they start cussing at the opposing lawyer, in front of everybody.
SFV Room 200B: Both of them. This is their MO. It’s a way to break you down.
SFV Room 200B: So I’m ready. I’m gonna start videotaping them in court, from the moment we walk in. You just to come? Even though it’s against the law to videotape in court. I’m sorry? I’m saying you just to come?
SFV Room 200B: Say again? You need us to come? No, no, no, no, no, no, trust me, no need. I’ll record. I’m so good at cussing. I’ll record on my body cam, so that way… Thank you. And then you can subpoena it. Thank you.
SFV Room 200B: I did record, two women were beating the crap out of another woman in court. In court? Yes, in court, inside the… right outside the department. And I started videotaping.
SFV Room 200B: I said, because I really thought they’re gonna kill her, you know, punching her profusely. And then I turned over the tape to one of the sheriff deputies.
SFV Room 200B: And she said, counsel, you know you’re not supposed to record in court. Oh, my God. I said, no problem, let me delete it. And she goes, no, no, no, it’s evidence. I said, now you like it. No, no, no, it’s evidence. I’m like, I’ll just delete… No, I had to do it. It was really bad.
SFV Room 200B: Horrible. Okay, page 181.
SFV Room 200B: I find that.
SFV Room 200B: Or 190? Is it 181? No, we didn’t have 191. It’s another Uber case, right? Where is that case? 190, below the screenshots. That one’s 190. Below the screenshot.
SFV Room 200B: All right. The, what is it? Auders versus Uber Technologies on 190. Anybody?
SFV Room 200B: Supreme Judicial Court of Massachusetts.
SFV Room 200B: 2021, relatively new. Anyone wants to take it, sir.
SFV Room 200B: I was surprised you haven’t raised your hand yet.
SFV Room 200B: You’re always working hard. That’s what I meant to say. So, counters the Uber Technologies, the very recent, in the Supreme Judicial Court of Massachusetts of 2021, so…
SFV Room 200B: In summary, Mr. Cowers was a blind man who had made an Uber account. He had completed all the necessary steps, but he noted that he was denied a ride on three separate occasions because, feeding a blind man, he was traveling with a guide dog.
SFV Room 200B: So, the… whoever was coming to pick him up was basically telling him, oh no, you can’t get in with your dog, this and that, whatever it is.
SFV Room 200B: So he brought suit against Uber, and for me, I wrote the issue here is whether the conditions of an app are enforceable if the user was not, properly informed, and like you mentioned many times, we’re going back to a reasonable notice.
SFV Room 200B: in a lot of these cases, and Uber ends up now ruling in his favor, stating that the agreement with Uber was not enforceable, he was not given a reasonable notice of the terms and conditions
SFV Room 200B: due to his, I guess, his blindness playing a major role in this, him being denied for his blindness and guide… and, you know, trying to access a ride with his guide dog, was wrong on Uber’s end, and that’s what made them liable, and…
SFV Room 200B: I think you’ve talked about it a lot today, but the main premise that I understood as well was a reasonable notice when it comes to signing up for applications, or whatever the case may be.
SFV Room 200B: So, this is… there’s a lot of procedure going on in this case, if you actually read it, and if you remember. First, the court rules for Uber, the trial court.
SFV Room 200B: and basically says, yeah, you accept the terms and conditions, and so on and so forth. Then a Court of Appeal decision comes out, and as soon as they arbitrate, and they… and Uber… apparently Uber did win, because they want to go back now and basically have it certified, and the court says, not so fast, and now the court rules against Uber.
SFV Room 200B: Right? I,
SFV Room 200B: a year ago, I want to say 2 years ago, I had a client who was blind come to my office. He was very, very, very legally blind. All he could see was
SFV Room 200B: something this close, and I’m not joking, like, this close. He would do this, and he was able to see something. That was it. He couldn’t see anything else. He used the…
SFV Room 200B: Walker, and… or was it Walker? No. The stick. The stick. Yeah, the guiding stick, sorry.
SFV Room 200B: None.
SFV Room 200B: It was so bad.
SFV Room 200B: And then months later, of course, he fell on the stupid sidewalks of Los Angeles and got hurt very bad.
SFV Room 200B: Very, very bad.
SFV Room 200B: But anyway, he… he… he didn’t want to sue, but he wanted to complain against Uber because…
SFV Room 200B: every time he called Uber, Uber would say.
SFV Room 200B: where are you standing? How are you dressed? He’s like.
SFV Room 200B: what color are your… is your shirt and your… I’m not joking. And he would say, sir.
SFV Room 200B: I’m blind. I don’t know what color is my shirt. I don’t know what color is my… and they’re like, we can’t pick you up, sorry. They canceled on him several times. I’m not joking. It was… I heard that, and I was like, I’m not a Sue Happy guy, but I think we should put an end to this. I’ll represent you for free.
SFV Room 200B: And so I rode to Uber, much to my surprise.
SFV Room 200B: Two Uber executives showed up in the office.
SFV Room 200B: They brought him gifts, they apologized to him profusely, they said, we fixed this, it’s never gonna happen again. All you have to do is say X, or whatever, we’re training heavy driver, whatever, to never ask this stupid question like that again. I’m like, listen, he calls the driver, he says, I’m blind!
SFV Room 200B: And the guy says, I’m sorry, I have to cancel the ride. No, you canceled the ride. He says, you canceled the ride, so you can get another ride. The driver wasn’t even going to cancel the ride, so he wasn’t able to get somebody else.
SFV Room 200B: It was really bad.
SFV Room 200B: But they, to their credit, they… it sounds like they fixed it, because then a couple of months later, when he fell.
SFV Room 200B: and he was in the hospital for several days, he told me that he doesn’t have that issue with Uber anymore. Do companies legally have a duty to have these accommodations to Uber people? Well, American with Disabilities Act has certain rules that you have to… you gotta… you better follow.
SFV Room 200B: Yeah. I mean, unless it’s grandfathered in, like, you know, some places you go and the restroom is so small, even you can’t fit.
SFV Room 200B: Right? And I’m like, how are you going to bring a wheelchair, right? Like airplanes. I always thought that was just so stupid. Like, there’s a place to change your child, but I can’t even fit my child in the toilet to begin with. How am I going to change her?
SFV Room 200B: So, yeah, the American with Disabilities Act, and of course, California and other states have their own rules as well, but yes, there are rules that they must follow. But again, my client didn’t want to sue, I didn’t want to sue, we just wanted to…
SFV Room 200B: We literally felt like it’s really bad for the blind people to… and he didn’t have a dog, he just wanted a ride.
SFV Room 200B: And they wouldn’t pick him up.
SFV Room 200B: And it wasn’t just once. And he had the text messages. He would read to his phone, text messages, telephone call, telephone call to the driver, asking, begging.
SFV Room 200B: He’s on the side of the road, they just leave him there.
SFV Room 200B: Professor, why didn’t you want it to sue them? What was the reason? I honestly thought that this is not a practice by Uber. We investigated… not me, sorry. We have a PI in our office, we had the private investigator look into it.
SFV Room 200B: 4 or 5 days later, she came with solid evidence that Uber does not discriminate. Uber follows the rules. This is probably a screw-up or two…
SFV Room 200B: So, and my client, again, my client did not want to sue.
SFV Room 200B: He said, I don’t want to take advantage of the situation at all. He’s a pianist. You should hear the guy play piano. I mean, he’s a concert pianist, and he’s legally blind since he was
SFV Room 200B: Very young. Very, very young.
SFV Room 200B: And he just didn’t want to have his name out like that.
SFV Room 200B: But I gotta say, I was very, very impressed with Uber.
SFV Room 200B: Very impressed.
SFV Room 200B: Give him lifetime. No, they didn’t, but they brought him beautiful, beautiful gifts to say sorry, and…
SFV Room 200B: you know, It was nice, you know, very nice. Okay.
SFV Room 200B: Anyone was to take Hastings on page 199, 199.
SFV Room 200B: Anyone on Zoom wants to surprise us, Blease us.
SFV Room 200B: With a boquito brief.
SFV Room 200B: Please.
SFV Room 200B: Anyone on Zoom?
SFV Room 200B: So I will just do this, and I’ll just pick someone, like that, on Zoom.
SFV Room 200B: That is, miss… Zahra.
SFV Room 200B: I just did that.
S.Zahra Movassaghigilani: Okay.
SFV Room 200B: Oh, forgive…
S.Zahra Movassaghigilani: Give me one second. Give me one second.
SFV Room 200B: Of course.
S.Zahra Movassaghigilani: Let me just put my links.
SFV Room 200B: Ready, you can just pick somebody else’s name.
S.Zahra Movassaghigilani: No, I’m just gonna try, but I’m gonna get help from someone else. Just give me a couple minutes, I bring my notes.
SFV Room 200B: Sweet.
S.Zahra Movassaghigilani: Okay.
S.Zahra Movassaghigilani: So, the case was,
S.Zahra Movassaghigilani: Just give me one second. The case was, for Washington Courts of Appeal in 2020, and, the…
S.Zahra Movassaghigilani: Unicorn, and, so…
S.Zahra Movassaghigilani: the LTD, the defendants, conducted an online sale of digital tokens that could be used to play, and, watch sports on the website that they had. And so they created a website for customers to register for tokens, sales, and purchase, and,
S.Zahra Movassaghigilani: The website, had, like, several pages and required, like, users to put their information, address, and so on.
S.Zahra Movassaghigilani: And there was a checkbox at the, end that would say, like, I read the statements, I agree with the privacy policy, and, the terms of services, and however, there was nothing, like, indicating,
S.Zahra Movassaghigilani: that was, like, a hyperlink or anything to click on. And, so clicking on the hyperlink was not a necessary, like, prerequisite, for clicking the checkbox, basically. So they could click the checkbox before, like, reading the service terms.
S.Zahra Movassaghigilani: And, so what happened here is that,
S.Zahra Movassaghigilani: There was also an arbitration clause that would say, if you do not agree to the terms, do not purchase tokens.
S.Zahra Movassaghigilani: And so what happened, the plaintiff, John Hasting.
S.Zahra Movassaghigilani: Accessed, the website, created an account.
S.Zahra Movassaghigilani: And then, got tokens, and the next year, he filed a class action against Unicern, saying that, they have violated the federal security laws.
S.Zahra Movassaghigilani: And, so they moved… the defendant moved to compel arbitration, saying that they had the arbitration clause in the terms of sale, but then Hastings said that they never agreed to the arbitration clause.
S.Zahra Movassaghigilani: And so that’s where, things escalated, and the court found that,
S.Zahra Movassaghigilani: a reasonable internet user would not have understood, the word terms of services, that they need to click on the hyperlink. And, and also that, the terms of services should have been, like,
S.Zahra Movassaghigilani: Clear to the user.
S.Zahra Movassaghigilani: And… So, let me just go from my notes.
S.Zahra Movassaghigilani: Yeah, so that’s how much I’ve briefed the case, maybe I need some…
SFV Room 200B: Thank you.
SFV Room 200B: Thank you.
SFV Room 200B: So whether the online arbitration clause was enforceable against
SFV Room 200B: Hastings was a matter of, again, reasonable notice.
SFV Room 200B: And what does the court say?
SFV Room 200B: The court looks to see if you had actual or constructive notice. What is a constructive notice?
SFV Room 200B: Newer should have known?
SFV Room 200B: Yeah, known or should have known. If I wanted to give a definition, it’s basically a notice that the law imputes
SFV Room 200B: To a person or entity, even if they did not have actual knowledge.
SFV Room 200B: Because the information was publicly available, or could have been reasonably discovered through ordinary care.
SFV Room 200B: Again.
SFV Room 200B: Constructive notice is when the information is available publicly, or you could ascertain that information through ordinary care.
SFV Room 200B: Such as?
SFV Room 200B: Real estate deeds, when you record a deed.
SFV Room 200B: What are you trying to do? Why do you record a deed?
SFV Room 200B: Aren’t you giving notice to anybody that may want to buy or sell that property? Hey, there is a deed.
SFV Room 200B: Why do you record the lien?
SFV Room 200B: You record a lien to give notice to the world there is a lien on this property.
SFV Room 200B: That’s constructive notice. They didn’t send you the lien.
SFV Room 200B: You didn’t read the lien because they gave it to you or made it available to you, no. They just filed it. You are under constructive notice, shoulda known.
SFV Room 200B: You should have checked.
SFV Room 200B: So, here, the court basically says, well, let’s take a look, whether it’s actual notice or constructive notice. If it’s conspicuous, if it’s hidden, if it’s, you know, you’re trying to hide a ball, we’re not going to enforce it.
SFV Room 200B: Got it? Again, all goes back to reasonable notice. Now, what is reasonable notice? Sometimes it may just merely be you’re aware that there are rules and policies with regarding
SFV Room 200B: Regarding purchasing a good, but you actively ignore it. You decide not to read it.
SFV Room 200B: And the court might say, well, you were on constructive notice.
SFV Room 200B: You knew or you shouldn’t know.
SFV Room 200B: Why didn’t you check?
SFV Room 200B: Oh, you were ignorant? Okay, the doors of justice are closed to you.
SFV Room 200B: Because you can’t ignore the law. Like, I think the lady said in the back.
SFV Room 200B: You have a duty to read.
SFV Room 200B: Same thing. You have a duty to investigate.
SFV Room 200B: Right?
SFV Room 200B: I remember when my mom was alive.
SFV Room 200B: we were watching TV, and she saw this guy in a suit, and he was working as a
SFV Room 200B: Legal assistant. Not even a… not even a paralegal.
SFV Room 200B: for a lawyer. And she says, she looks at me, she goes, see, I hope one day you become a lawyer like him. And I said, wait a second, he’s not a lawyer!
SFV Room 200B: He’s just in a suit, what are you talking about? And I never forget that.
SFV Room 200B: Are you supposed to check? And so I… when every time I’m on the radio, not every time, but most of the time, I tell people, if you want to hire a lawyer, make sure they’re actually lawyers, because there’s a lot of felons out there, I’m not kidding. They’ll take your money to do your immigration stuff, or whatever, and bye-bye, they’re gone.
SFV Room 200B: Make sure, double check, triple check, make sure they’re lawyers
SFV Room 200B: Before you give them your cases! There’s a lady who’s been caught, like, two or three times. See, there you go.
SFV Room 200B: I have reported people, and the police doesn’t arrest them.
SFV Room 200B: I’ve reported it!
SFV Room 200B: And the state bar says, oh, we only enforce rules against lawyers. I’m like, what the are you talking about? Are you kidding me? So then what are… You’re supposed to be getting those people that are real crooks.
SFV Room 200B: But that’s how it is.
SFV Room 200B: So, are they under constructive notice to check the lawyer’s license? I don’t think so. They’re just being screwed, right?
SFV Room 200B: As for… they’re being scammed.
SFV Room 200B: All the time. All the time.
SFV Room 200B: Okay.
SFV Room 200B: So, the rule here, basically, as was indicated, for browser app and hyper-wrap agreements, enforceability depends on whether the user had actual constructed notice of the terms.
SFV Room 200B: And manifested ascent.
SFV Room 200B: Okay? So that’s the rule that I got from that case. All right, I’m going to stop with case law here. We’re going to go back now to answer some of the questions in some of the chapters.
SFV Room 200B: So, next time we will stop on… start on option contracts, okay, on page 207.
SFV Room 200B: So let’s go back and… through some of the… let me find the ones that I wanted to cover.
SFV Room 200B: And then I’ll let you know.
SFV Room 200B: Where’d you go?
SFV Room 200B: Check the page.
SFV Room 200B: Do we need to ask?
SFV Room 200B: pays almost automatically.
SFV Room 200B: Funny.
SFV Room 200B: Alright, page 151. Everyone?
SFV Room 200B: New edition? 151.
SFV Room 200B: of… yeah, I only referenced the new edition.
SFV Room 200B: I’m sure they’ll come up with new ones. Jake card money. Forgive me, sorry, not 151, it’s actually page…
SFV Room 200B: 150, problem 1.
SFV Room 200B: I will read from…
SFV Room 200B: A offers to sell B, Blackacre, for $5,000. The offer to be open for 30 days.
SFV Room 200B: Okay?
SFV Room 200B: A says, B replies immediately, I will pay $4,800.
SFV Room 200B: A refuses, B accepts within 30 days. Is there a contract?
SFV Room 200B: Anyone?
Cynthia Llauger: No.
Adreanne Kumamoto: Why not? And why yes?
Cynthia Llauger: The counter offer at this point.
SFV Room 200B: Okay, the counter does what? I’m sorry, say again?
Cynthia Llauger: It killed the original offer.
SFV Room 200B: The counteroffer killed the original offer. There you go. And now, this is because the counteroffer acts as an implied rejection.
SFV Room 200B: implied rejection, sir. Question regarding the exam. When it says, he accepts, is that just them accepting the original factual? It’s an ineffective acceptance.
SFV Room 200B: Right? So his acceptance is meaningless because the offer is dead. Yes. Remember when I said dead means dead for eternity, unless you revive it.
SFV Room 200B: Let’s see an example, if it’s not there, and when it just says accepts, it’s in a question-like format, that’s them always accepting the original amount, correct?
SFV Room 200B: if they accept… Like, if it simply says he accepts the $5,000. He’s saying, okay, $5,000, right? He replies, cannot.
S.Zahra Movassaghigilani: Professor, I have a question on this.
SFV Room 200B: Yes.
S.Zahra Movassaghigilani: So when A rejects… so basically, when A rejects, like, he’s, like, countering the offer again and saying, like, the $5,000, and when B accepts, he’s basically, like, accepting the $5,000 offer.
SFV Room 200B: I’m sorry, what are you talking about?
S.Zahra Movassaghigilani: So…
SFV Room 200B: That’s a new scenario?
S.Zahra Movassaghigilani: No, no, no. So here it says that B replies immediately, say, I pay you $4,800, and A refuses, right? So A refused the counteroffer. So when he refuses the counteroffer, he’s giving, like, the counter of the counteroffer, which is, like, the original offer.
S.Zahra Movassaghigilani: And then B is accepting, like, the original offer here.
SFV Room 200B: He is attempting to accept the original offer, which is already dead. The moment the counteroffer is in play, the original offer is no longer valid.
Adreanne Kumamoto: Okay, go sit down.
SFV Room 200B: Okay? Okay. Okay, there we go. All right. I’m just getting you to sit down, Professor Kate. Okay, so, B. B replies immediately. I’ll pay $4,800.
SFV Room 200B: A replies, cannot reduce price. D accepts within 30 days. Is there a contract? No contract. Oh, sorry. Go ahead. My apologies. No contract because, again, it says…
SFV Room 200B: You won’t… wait, sorry, it says, cannot reduce the price, and since A hasn’t… A says, I’m not… we’re not reducing the price, they provided another counter for it. I would assume that when A replies saying, cannot reduce price, he kind of…
SFV Room 200B: brings the contract back to play. Revives the offer? Absolutely. So I would say yes, there’s an offer. Absolutely. There’s a case called Livingston v. Evans, 1925 case, that’s how the court ruled. The court said, these counteroffer terminates the offer.
SFV Room 200B: As in A. But… well, that’s not what the court said, but that part.
SFV Room 200B: the terminus counteroffer. But A’s response cannot reduce the price, the court says, expresses a continued willingness to sell to B at $5,000 price, and therefore, A
SFV Room 200B: And therefore, it revives A’s offer. So A revived its own offer, then it was accepted, the court ruled in that manner. Yes. In both examples, can’t you take these statements as mere proposals in the negotiation? Like, that’s what I was kind of thinking. No, it’s UCC. Because I will tell you, that’s a very good question. That’s actually a very good question.
SFV Room 200B: It’s different to say, I will pay $4,800,
SFV Room 200B: as opposed to making a mere inquiry. Remember I talked about mere inquiry? I didn’t make that word up. Those are buzzwords you have to use in the file. So, to your argument, I would say, if B had said.
SFV Room 200B: They would not say, I’ll pay $4,800. They would say, Would you take 4800?
SFV Room 200B: You’re not chilling the offer. You’re merely inquiring.
SFV Room 200B: You understand? Yeah.
SFV Room 200B: I’ll give you an example. I was in, I was in a dealership this weekend.
SFV Room 200B: That’s…
SFV Room 200B: You spend more time at the dealership than me. Are you at all these dealers. Hey, listen, I have a wife, you don’t need to remind me, she does it five times a day. Okay? So she didn’t come to the pumpkin patch patch, the pumpkin patch to go to the dealer, I said, some things are very important, other things are just important.
SFV Room 200B: I had to do the thing that was scary for me. But all jokes aside, let me tell you.
SFV Room 200B: An example, so that maybe, maybe we can learn a thing or two.
SFV Room 200B: So we’re there, and I see that the car that is there is one of 467 made in the country.
SFV Room 200B: Very important. It’s only… only 467 of them were made, one of them was in the showroom. What car is it? G-Class. Mercedes. But it’s the… it’s a 1980s version. It’s so unique. You seen them? It’s insane. It’s… it’s to die for.
SFV Room 200B: I mean, my brother says, where do you park it? I said, in the bedroom. In the bedroom. Anyway, so I’m there, and I say, I want this car. And he goes, I’m sorry, sir, this is $100,000 over a sticker. $100,000.
SFV Room 200B: I said, okay, I don’t want this car. And he’s… he goes back and forth, we get to 20,000 over sticker.
SFV Room 200B: Same car? Same car. How do you go from 100 to 100? I don’t know, ask them. I… I don’t know. I said, no, no, no, no, finally got 20,000 orders. So he goes.
SFV Room 200B: If I sell it to you for $20,000 over sticker, just like this, Would you say yes?
SFV Room 200B: I said, would you consider selling it at sticker?
SFV Room 200B: Wow.
SFV Room 200B: I didn’t kill his orphan.
SFV Room 200B: Because I thought that was still within reason.
SFV Room 200B: Until my brother said, are you insane?
SFV Room 200B: paying this much money for a car. You know, let’s get out of here.
SFV Room 200B: But… point being, I didn’t kill his offer, because I still wanted to… I saw other people wanted the car. He said, no.
SFV Room 200B: But today, he offered it to me at $5,000 over sticker. Wow. And I said, too late.
SFV Room 200B: you refused my… yeah, because I offered him $10,000 over a sticker, he didn’t give it to me.
SFV Room 200B: And I said, too late.
SFV Room 200B: you kill the offer. So if this was in the final.
SFV Room 200B: He just made a new offer to me.
SFV Room 200B: Even though it’s $5,000 less than what I had offered.
SFV Room 200B: He’s not accepting my number. He’s giving me a better number, but it’s still… it’s a counteroffer. Do you understand? He killed my offer.
SFV Room 200B: All right. Got it? You gonna take it? No, I didn’t take it.
SFV Room 200B: Honestly, I was insulted. Because I was there for 4 hours, I wanted to buy the car right there and then.
SFV Room 200B: But if I get insulted, I don’t give a damn what kind of car it is. I’m out of there. I was insulted, so I said, bye.
Ruben Hunanyan: Pastor, quick question.
SFV Room 200B: That’s a.
Ruben Hunanyan: In that fact pattern, so if he said, will you take $5,000 over sticker, that would be a mere inquiry, correct?
SFV Room 200B: Yeah, I would say that it really depends on the language, but if you’re not… if the language is literally you’re inquiring about, are there any other possibilities, is what you’re saying, right? You’re basically saying.
SFV Room 200B: Would you consider…
SFV Room 200B: adding a tow package to the car. You’re not killing the offer, you’re just… you’re inquiring, right? Can I do this? Can I do that? Like, I also said, with the extended warranty, it’s a $200,000 car. So I was like, listen, I want the 10-year full warranty, I don’t care how much it is.
SFV Room 200B: I want 10 years of no headache. I want to come to you guys, you guys fix the car.
SFV Room 200B: Whatever it’s cost, just add it onto this thing. That’s what I want. And so that was one of my things that they… they…
SFV Room 200B: So, can there be… can it be said that there is some level of subjectivity that the other person kind of distinguishes whether you’re… That’s a very good question. What do we… how do we gauge… how do we gauge the language? Yeah. How do we gauge the language? Well, what… Objective theory of contracts.
SFV Room 200B: What would a reasonable person in the shoes of me, or him.
SFV Room 200B: interpret. Incidentally, the manager of the store was a student of mine for about 6 months, about 9 or 10 years ago. He sat in the back of the class.
SFV Room 200B: And he saw me, and he says, oh my god, you know, we sold the car to his wife 2 years ago.
SFV Room 200B: And I want you guys to take care of it.
SFV Room 200B: So, even he came out, and he was like, you know, let me make a deal. I said, listen, I’ve already heard enough. That’s…
SFV Room 200B: Thank you, but no thank you.
SFV Room 200B: So, in, objectively looking at, how they wanted to make a deal, it was either their price or nothing, which…
SFV Room 200B: Turned out to be a bad idea. They could have sold the car to me, because I was, you know, when you’re there, you’re there. Once you leave, you’re cold. You don’t… you don’t want to do it anymore, right? Another… another reason why I never pressure a client to sign with me.
SFV Room 200B: No.
SFV Room 200B: I mean, even when the business is slow and it’s SHIT, I never do… I tell the client, take your time, you decide what you… unless it’s a criminal case and they are, you know, they have court in a day or so, I’m like, you sign now or get somebody else. I’m not doing it.
SFV Room 200B: You need to sign my papers. Simple as that. Unless you’re in jail.
SFV Room 200B: Then you don’t need to sign anything.
SFV Room 200B: Right? That protects you, protects me. It knows the contract tells you the… the… how much you’re engaging me for what I’m going to do for you, and etc, etc, and… and I’m protected, you’re protected.
SFV Room 200B: Your obligations are clear, my obligations are clear.
SFV Room 200B: Right?
SFV Room 200B: So, a mere inquiry never kills the offer. This is tested heavily on the MBEs. On the bar? On the bar. In the MBEs. Heavily on, you know, multiple choice questions.
SFV Room 200B: Right? That’s why I’m going through this exercise, so that we get a little more of these, but you have to do a lot of… I think it was,
SFV Room 200B: Was it Madonna was telling us, I think, on break, you said, or before class, you said, AD questions? That’s very smart.
SFV Room 200B: Everybody should be doing that. Well, enough. Because you have enough to get you engaged, right? Everybody should be doing MD. Don’t wait for the professor to feed it to you.
SFV Room 200B: You can feed yourself. We’re adults.
SFV Room 200B: Right?
SFV Room 200B: So, I strongly recommend you to… maybe it’s a little early, but still, it’s better than not doing it.
SFV Room 200B: Because then you get to know all the nuances, you make less mistake.
SFV Room 200B: For sure, you make less mistakes. And it becomes repetitive.
SFV Room 200B: Absolutely! There’s no question about it.
SFV Room 200B: Yeah. Somebody had a question. No, I was just gonna say, I think the next one literally is a mirror in the Google we were just going through. Okay, well, let… oh, really? Okay, C. B says, won’t you take $4,800? A refuses. B accepts within 30 days. Is there a contract?
SFV Room 200B: Yes, ma’am. To answer that, I think that is a mere inquiry, because he’s just asking about a reduced price, and he simply lets him know that the answer is no, and then he goes and accepts it. So, is there a contrary? Yes. Yeah.
Adreanne Kumamoto: Yes.
SFV Room 200B: Because, as I wrote here in my notes, there is a counter inquiry which does not terminate the offer.
SFV Room 200B: There is no implied rejection.
SFV Room 200B: Right?
SFV Room 200B: And therefore, there’s a contract.
SFV Room 200B: D. You’re right, it’s similar to, you know, what I was going through.
SFV Room 200B: B says, I’m keeping your offer under advisement.
SFV Room 200B: But if you wish to close the deal now, I’ll give you $4,800.
SFV Room 200B: A refuses. B accepts within 30 days. Is there a contract?
Adreanne Kumamoto: Yes.
SFV Room 200B: Okay, why?
Adreanne Kumamoto: Well, because B accepted, and when… so, whenever B says he’ll pay $4,800, and he replies he cannot reduce the price, and later accepts it.
Adreanne Kumamoto: then he was re… his offer maintained, or he was reaffirming it. Thus, B later accepts the $5,000?
SFV Room 200B: Definitely. Which makes it a valid acceptance, in my opinion.
SFV Room 200B: Okay. So the rule is, with regards to this one.
SFV Room 200B: that a counteroffer acts as a rejection. We know that, right? Unless the offeror or the offeree manifests a counterintention.
SFV Room 200B: Like, a different intention.
SFV Room 200B: Here, such a contrary intention is found in the words, That basically said.
SFV Room 200B: I’ll keep your offer under advisement. In other words, he’s saying, I’m not rejecting your offer. It’s under advisement, but would you take this?
SFV Room 200B: Right? Anytime you see that, that says, no problem, you’re offered, great.
SFV Room 200B: I’ll consider it.
SFV Room 200B: But, would you do this? I did a lot of that on Sunday.
SFV Room 200B: Not that I care, you know, how I speak, but I wanted to make sure that if they wanted to stick the card sheet, you know, into my state.
SFV Room 200B: I speak carefully, yes. Is that an example of a mere inquiry?
Adreanne Kumamoto: Yes.
SFV Room 200B: the situation with, on Steve? You mean this, that this is all considered? Yes.
SFV Room 200B: You could say it’s a mere inquiry, sure. I think it sounds like the offer remains intact, because he says, I’ll take this under advisement, but
SFV Room 200B: he’s also technically making a counter, because he says, would you take this much? Are you willing to consider? No. He says, would you take this much? So, I would say it’s a counter, but that’s why I wrote in my notes, and I read it to you.
SFV Room 200B: His intention was contrary to just making a counteroffer.
SFV Room 200B: he was making a counteroffer, but he was not rejecting the original offer. Does that make sense? Yeah.
SFV Room 200B: So, again, that’s why we’re going through this exercise. Yes? Professor, kind of to backtrack to B and C, just to look at the different language, like, when I see all pay $4,800, it’s clearly a separate offer. He’s not inquiring about anything else. But when I look at C and it says, won’t you take $4,800?
SFV Room 200B: I don’t… I still don’t see, like, that much of a difference to, like, immediately differentiate it in my head and be like, this is an inquiry, this is a counteroff. Well, then it would be upon you to make that argument for us, right, in the final.
SFV Room 200B: So, I would say the language, I pay $4,800, is a little different from, won’t you take $4,800? In other words, would you consider
SFV Room 200B: 4,800. He’s not saying, I’m gonna pay $4,800.
SFV Room 200B: Right? Like I said, on Sunday… thank God I brought that example up, it makes sense. When they said $100,000 over a sticker, I said, I’ll pay not… I won’t pay a penny over a sticker.
SFV Room 200B: I won’t pay a penny over a sticker means what? Your offer is dead, right? Dead. Almost if they make a new offer. I didn’t say, would you consider $10,000 over a sticker? I said, I won’t pay a penny over a sticker, which is exactly what I said today. Well, I mean, Sunday I went $5,000, or I would have $10,000 over a sticker, but…
SFV Room 200B: But you get my point. It was different. If I would have said, okay, $100,000 over a sticker, would you consider
SFV Room 200B: Would you take $5,000 over a sticker? That would be different. I’m not saying I won’t pay your money. Would you consider giving it to me for my price? I get it now. You see the difference? Yeah, yeah.
Ruben Hunanyan: Professor?
SFV Room 200B: Sir, one moment on Zoom, go ahead. I don’t know if this is wrong, but,
SFV Room 200B: for, like, A and B, where they outright say, like, I’ll pay instead of the question. Isn’t that the conclusory, like, kind of statement that takes them more to the side of a counteroffer as opposed to a mere inquiry? It’s really the… it’s a matter of interpreting the language as a reasonable person would do in the shoes of the opposing party.
SFV Room 200B: So, how would the opposing party see the language, I’ll pay $4,800.
SFV Room 200B: Especially in my language, I won’t pay a penny more than the sticker. So how would a reasonable, prudent, like, car salesman say that? Yeah, how would a reasonable, prudent person interpret that? As opposed to me saying.
SFV Room 200B: Okay, would you consider 20,000 over?
SFV Room 200B: I thought, okay, to your number, but would you consider 20?
SFV Room 200B: Right? A useful way to remember that, if it’s an inquiry, is if it’s a question. Yeah, it’s not just… look… I know it’s probably too broad. Yeah, yeah, it’s a little too broad, because it could be in the form of a question, but still killing the office. Yeah, I was just thinking that.
SFV Room 200B: It’s like you’re putting a pause asking something, but it… It’s literally, it’s literally language that doesn’t…
SFV Room 200B: Reject the offer, But proposes a… another possibility.
SFV Room 200B: A separate possibility. Not a counter.
SFV Room 200B: Doesn’t kill the offer, but presents a separate opportunity or possibility. On Zoom, somebody had a question.
Ruben Hunanyan: Professor, could you please restate the rule for number… for D?
SFV Room 200B: Oh, what I read was that this is a counteroffer here that is a counteroffer, I’ll give you $4,800, but it does not operate as a rejection because of the words, I am keeping your offer under advice.
SFV Room 200B: So, it’s not a rejection, and I said the rule that… it wasn’t really a rule, but what I wrote is that the rule is that the counteroffer acts as a rejection unless the offeror or the offeree manifests a contrary intention. Here, the contrary intention is found in the words
SFV Room 200B: I am keeping your offer under advisement.
SFV Room 200B: He could have easily said, oh, forget that, no way.
SFV Room 200B: I’ll give you $4,800. Obviously, kill the offer.
SFV Room 200B: But he said that, he said, I’m keeping it under advisement, meaning I reserve the right.
SFV Room 200B: to reject it, accept it, do whatever I want with it later.
SFV Room 200B: What would you take this?
SFV Room 200B: So is there a contract in there? Yes, yes, ma’am, yes, yes. On the D, yes.
SFV Room 200B: So let’s talk about a grumbling ascent, which is nevertheless a possible ascent. Let’s look at E.
SFV Room 200B: B replies immediately, I accept.
SFV Room 200B: But, I still insist that you are driving a hard bargain.
SFV Room 200B: Is that a contract? Yes. Yes. Yes. Why? Because… just because you say you don’t like their price doesn’t mean you didn’t accept it.
SFV Room 200B: Why do we call that, Mary Image?
SFV Room 200B: I’m sorry, is it the mirror image? No. No. What do we call these type of acceptances? I just kind of said it. Crumbling acceptance? Yes!
SFV Room 200B: It’s literally under the law called the grumbling acceptance, when you argue and you huff and puff, but you accept, nevertheless.
SFV Room 200B: Right? Honey, would you marry me?
SFV Room 200B: Oh, god damn it, I… yes! You know what I mean? Didn’t happen to me, I said, yes! No, I’m kidding. It’s the same thing with the car, right? Yeah, with the car. If you don’t like the price, but you said something. Grammeling acceptance is that you are expressing dissatisfaction, but nevertheless, you’re… you’re accepted.
SFV Room 200B: The language is clear. Here, the language says…
SFV Room 200B: I accept, but you’re driving a hard bargain, so what?
SFV Room 200B: You accepted.
SFV Room 200B: And so, under the law, it is an acceptance, and it’s called a grumbling assent, or acceptance.
SFV Room 200B: Like, you’re just huffing and puffing, but you’re still accepted.
SFV Room 200B: Okay?
SFV Room 200B: Okay.
SFV Room 200B: Very good. So let’s do Problem 2.
SFV Room 200B: A makes a written offer to B, to sell him Blackacre.
SFV Room 200B: He replies, I accept your offer if you can convey me a good title. Is there a contract? Yes. Who said yes? Ma’am. Because that’s something…
SFV Room 200B: I already explose the title is drawn up…
SFV Room 200B: transfer, because it’s, I don’t know if you buy, real estate, I know it’s automatically transferred. Very good, very good. I think what you’re saying
SFV Room 200B: Is that providing a good title, or a valid title, right.
SFV Room 200B: is implicit in these type of offers, yes? That’s exactly correct. The court said, and this is a case I had then… not the case name, I think it’s…
SFV Room 200B: I had the case name, but I don’t see it right now. The court basically said, this does not violate the mirror image rule.
SFV Room 200B: Because providing a good title is implicit in making that offer. If you want to sell you a property, you can’t sell it with a shitty title.
SFV Room 200B: It’s gotta be a good title.
SFV Room 200B: So marketable type, but usually grand deed. So, therefore, there’s… it’s not a violation of mirror image rule. Yes, sir.
SFV Room 200B: That… the wording, if you can convey me a good title, you mean conventional. The court said that is absolutely an acceptance. It’s not conditional or whatever. No, it doesn’t violate anything. Again, because providing a good title comes with an offer like that. You offer to sell.
SFV Room 200B: There’s got to be a good title, right? So the court says, why is there a violation? There’s no violation. Like, find, I guess, like, implied things like this that we needed, like, non-paper mask conditions, and rather, like.
SFV Room 200B: you look at the language, well, again, that’s why we’re going through this exercise, right? So, if I say…
SFV Room 200B: I’ll buy the car, Right? If you can give me a good title with it.
SFV Room 200B: That if is not at all a condition.
SFV Room 200B: Because it’s implicit. You’re supposed to do that. Like, I’ll be given. It’s a given. But if I say, I’ll buy the card, but if you put a tow package on it, it’s not supposed to come with the card. I’m asking for something new. That’s a counteroffer. That’s a counteroffer.
SFV Room 200B: Right? I’m adding something to the… the terms of the… the terms of the off.
SFV Room 200B: Does that make sense?
SFV Room 200B: There’s it. So then some would argue that some things are necessary, and some wouldn’t be, like… Some things are implicit. It naturally comes with… I need a spare tire for this car, but some cars don’t come… you know, what if it gets gray like that? Well, that’s where we all come from, right? We make the argument.
SFV Room 200B: The car that was advertised as as-is?
SFV Room 200B: Didn’t have a spare tire, you asked for a spare tire, did you now change or add to the terms of the original offer? And did you now kill the original offer? That’s the question.
SFV Room 200B: That’s what they pay us for, seriously.
SFV Room 200B: Does the order of the language mean anything? Like, if he initially said the title changed, Then I’ll accept.
SFV Room 200B: I wouldn’t think that that would change anything as long as it’s implicit. It’s supposed to come with the original offer, so the court basically… and again, there was a case law, I just don’t have the case name. I think it was, like, Something Industries or something. The name of the case. I’m sorry, yeah.
SFV Room 200B: Yeah, it’s selling the house, and it’s a counteroffer. Yeah, there was… yeah, and that… I know that was a case law that I read, that that’s how I found the answer. I mean, I searched for these things.
SFV Room 200B: And, but I don’t have it. It was something Industries, I know, which basically said that. Okay.
SFV Room 200B: Problem number 3.
SFV Room 200B: What time is it? After negotiations, the State Department of Transportation, DOT,
SFV Room 200B: offered to renew Express Industries’ expired lease for the use of a state-owned, here for 4 years period for $3,500,000. Ouch.
SFV Room 200B: The offeree’s president, signified acceptance of the offer by signing and returning it.
SFV Room 200B: An environmental group, HRC, had been a party to the negotiations.
SFV Room 200B: The offeree’s cover letter returning the offer stated that certain parts of the deal are still under discussion with HRC, and when Mr. McGowan
SFV Room 200B: Of that group returns from vacation.
SFV Room 200B: We can resolve an outstanding issue.
SFV Room 200B: The exclusion of 70,000 square feet of the truck yard from the lease.
SFV Room 200B: Upon receipt of the letter and signed offer, the Department of Transportation received an offer of $4,500,000 from another party, and proceeded to accept the higher offer.
SFV Room 200B: Express Industries sues the state for breach of contract. What results?
SFV Room 200B: It all has to do with a cover letter. What did the cover letter do? Do you recall that case where the lawyer sent his letter with the acceptance of a purchase of a real estate, that we want the furniture, and the court said, -
SFV Room 200B: And I said, he better have good malpractice insurance. Remember that case? Yeah. Kind of sort of similar, right? Who had a hand in?
Adreanne Kumamoto: this case.
SFV Room 200B: Yes, sir.
SFV Room 200B: I think… well, I mean, you asked what did the…
SFV Room 200B: By the way, this is Express Industries, the one that I was telling you about. You asked, like, what was Express Industries… I forgot what you said, but I think I was gonna answer. That they, they were going to accept it, but they said, the certain parts of the deal are still under discussion with HRC until that person comes back from vacation regarding that.
SFV Room 200B: remainder, like, part of the lot that has been excluded, and I think… I’ll…
SFV Room 200B: I don’t know if it necessarily, like, kills the deal, because to me, it seems like they’re just putting something, like, on pause.
SFV Room 200B: Like, we’re gonna hold off on it for consideration.
SFV Room 200B: Much like the previous example, he said, yeah, except, but, like, let’s sit on it until this guy comes back. So, was Express Industries able to enforce?
SFV Room 200B: the contract for $3.5 million, or not? What do you think? I… He signed it. I know, he signed it. Based on my reasoning, I was…
Adreanne Kumamoto: Since it’s still under discussion.
SFV Room 200B: Okay, so…
Adreanne Kumamoto: There’s no binding contract until HRC term is resolved, right? Because even though they signed the contract, the offer made it clear that the deal was not
Adreanne Kumamoto: It was… it was incomplete.
Adreanne Kumamoto: So, in my opinion, there is no contract.
SFV Room 200B: Okay. Somebody else on Zoom was speaking.
S.Zahra Movassaghigilani: I would say… I would say, I would say there’s no contract… there is a contract, because they’re not saying that acceptance is conditional. They’re saying, like, we’re, like, you know, we are, like, considering, but it doesn’t say that…
S.Zahra Movassaghigilani: To me, that’s… there is still, like, an off… there is an ex… there’s a contract between them, so they can, like, sue the other party for giving it to the other one for $4 million and above.
SFV Room 200B: Okay. I also think there’s breach. I think that they agreed on the major and essential terms, and they’ll figure out the rest later.
SFV Room 200B: What about that? What about that? Where did you get all that lawyer-like language from? Michael Tate himself. Which comes from the book. Remember the book? The book told us…
SFV Room 200B: An agreement on the essential terms
SFV Room 200B: is a freaking agreement, right? Yeah.
SFV Room 200B: So, what did the court say? It’s not such an easy answer, because initially, the court
SFV Room 200B: and the appellate Division of the court found for Express Industries.
SFV Room 200B: But the Court of Appeal reversed.
SFV Room 200B: Believe it or not.
SFV Room 200B: The Court of Appeal did not answer the question whether the coded language constituted the counteroffer.
SFV Room 200B: Instead, it seized on other facts, so… but the court… the court held that the agreement, in any way, was too indefinite. So, I would agree with that, and the original court and the appellate division did agree with that language, that there was enough there.
SFV Room 200B: But the Court of Appeal basically said it’s… the whole thing has a… the entire language, including the cover letter, makes it too indefinite. In other words, it’s not clear what the hell this HRC or whatever is going to do, the guy coming from vacation. I can’t believe one person from the environmental…
SFV Room 200B: whatever, can have this much influence. Who the hell are you? Screw you.
SFV Room 200B: But nevertheless, apparently he did. And the court, the court of appeal said it was too indefinite.
SFV Room 200B: Do we all know what that means? Opposite of what he said. It wasn’t certain enough. The court said that…
SFV Room 200B: The court said the essential terms were agreed on, but the entire agreement as a whole, it was just too indefinite. We don’t know exactly what the hell we’re supposed to be doing here. Too vague. Right? Too vague. Very good. How do we enforce this? We don’t know. So, reverse.
SFV Room 200B: didn’t hold for,
SFV Room 200B: Express Industries. Yes, sir? What he said, the express terms, is, was that common law or UCC, where the gap fillers comes in and… Oh, he wasn’t talking about UCC or common law. We’re talking about the new trend in which the courts will enforce a contract
SFV Room 200B: Where the essential terms are there. Oh, essential. Trivial terms, nobody cares for.
SFV Room 200B: Right? Like, you buy my house, but we don’t specifically indicate what time you’re supposed to pick up the keys. Right? We said we’re going to decide on that. We never did. You honestly think a judge is going to say, no, no, no, you can’t buy the house, because you never said what time you’re going to pick up the keys.
SFV Room 200B: It’s not an essential term. So, the current trend is that the court will say, just turn over the goddamn keys.
SFV Room 200B: There’s a contract, yes. The only thing that kind of makes me think about the other side and this not being a contract is, like, what are major and essential terms? Like, they say 70,000 square feet of the truck yard.
SFV Room 200B: you would think that’s a lot, and pretty essential, and major. But if it’s a cube law, then it may not be. Well, I would suspect, and I haven’t recently read that decision, but I would suspect that the court thought
SFV Room 200B: It’s unenforceable because a third party is supposed to make a decision. Not these two guys. Somebody else was, or is supposed to make a decision, too late, because that guy obviously didn’t make a decision. They sold to somebody else. It’s over.
SFV Room 200B: So, now what do we do with it? And the court basically says, hey, it’s too vague, we don’t want to deal with this. And I think I’ve mentioned this before, if I haven’t, I’ll tell you.
SFV Room 200B: The courts can only provide a remedy If they can find… what?
SFV Room 200B: Reach?
SFV Room 200B: Breach. What was breach?
SFV Room 200B: What constitutes preach?
SFV Room 200B: Do you have offer? You have to have a valid contract
SFV Room 200B: to begin with, right, to the essential terms to find out if somebody had committed a breach to provide a remedy. Here, the court says the essential terms, we don’t know.
SFV Room 200B: too vague. How am I gonna offer a remedy to sky the… whatever industries.
SFV Room 200B: I can. We can. I mean, that’s the Court of Appeal, right?
SFV Room 200B: We won’t.
SFV Room 200B: Too vague. You should have been careful.
SFV Room 200B: For the language.
SFV Room 200B: Right?
SFV Room 200B: Okay.
SFV Room 200B: And it wouldn’t even be, implied at all if I raised that contract either. Well, if they were seeking
SFV Room 200B: damages for, reliance damages, for example, sure. They could say, yeah, we made a promise, we relied on the promise, we got screwed over here. We lost this much money, but that wasn’t the case. They literally wanted everything under the contract, and the court was like, I can’t enforce the contract itself.
SFV Room 200B: Can you ask for equitable remedies? Sure! I can ask for equitable remedies. Absolutely.
SFV Room 200B: You know?
SFV Room 200B: many times, as a matter of practice, and I know when I talk about
SFV Room 200B: personal business experiences, you may think It’s a waste of time.
SFV Room 200B: But, trust me, when you start practicing, one day you may say.
SFV Room 200B: It wasn’t actually a complete waste of time when he was talking about his cases, of cases. It’s a matter of learning, right? It’s something I didn’t know, I learned over the years, and if it comes to my mind, I share with you. So hopefully you won’t make the same mistake.
SFV Room 200B: And, you mentioned something right now that brought this into my mind.
SFV Room 200B: What was your question? Very good. I will tell you, anytime I sue for breach of contract.
SFV Room 200B: I almost always find causes of actions for a promise unfulfilled.
SFV Room 200B: Always. In other words, I’m always asking for remedies, not under contract law, but under Court of Equity, just in case the case goes to SHIT.
SFV Room 200B: Right?
SFV Room 200B: Cover yourself.
SFV Room 200B: So, I make that a practice. Now, I don’t make up stuff, but I look into it very deeply to make sure I don’t just say, oh, breach of contract, let’s sue.
SFV Room 200B: No. Somebody sued my client for breach of contract, recently.
SFV Room 200B: Very recent.
SFV Room 200B: And I looked at the contract, I’m like, crap, there is a real clear breach.
SFV Room 200B: So I countersued for moonlighting and everything else that he did that I know he did, and then on top of that, as one of my defenses, I raised…
SFV Room 200B: What we’re gonna learn later on.
SFV Room 200B: What do you think I said?
SFV Room 200B: Economic duress.
SFV Room 200B: Because I can prove that he created the duress.
SFV Room 200B: And my client was forced to enter into this new contract to save whatever she had.
SFV Room 200B: You see what I mean? My client was talking about… I’m like, not relevant. All that is relevant is if I can show economic duress, I can undo the contract, and I don’t even have to wait for a jury.
SFV Room 200B: That comes with, I swear to God, 20 years of doing this bullshit.
SFV Room 200B: Otherwise, you may not see it. I don’t see some things.
SFV Room 200B: There is a portal between lawyers, criminal lawyers, that I’m a member of. We ask… I see lawyers after 35 years of experience ask questions.
SFV Room 200B: I swear to God, even the most basic questions.
SFV Room 200B: They don’t feel shy.
SFV Room 200B: In the beginning, my wife was like, are you comfortable asking this question, for example, because she’s a lawyer.
SFV Room 200B: I’m like, I’m very comfortable.
SFV Room 200B: I want to save my client. I have no pro… I don’t feel bad. I don’t feel little at all. I ask any ques… I don’t care what it is.
SFV Room 200B: Stupid question, I’ll ask it.
SFV Room 200B: If it means that I’m gonna save a life, or save his future, or whatever, I’m gonna do it. I’ll ask the question, sure.
SFV Room 200B: Absolutely. Now she does the same.
SFV Room 200B: Gladly. Happily.
SFV Room 200B: So… It takes…
SFV Room 200B: It takes challenging your ego. Some of us have egos, right? You really have to put that aside for the best interest of your practice, your license, your client, your livelihood, screw ego. Just ask.
SFV Room 200B: You have no idea how many emails I get on a monthly basis from all… from students, from the past.
SFV Room 200B: Hey, Professor, can I ask you to run something by you? I’m like, call me. Absolutely. Call.
SFV Room 200B: Here’s what’s going on, what do I do? Okay, do this, do that, I don’t know. I send them to another lawyer.
SFV Room 200B: How do you fit all that into your schedule? I try my best.
SFV Room 200B: it’s not easy, but I try my best, because
SFV Room 200B: Somebody helped me when I needed help.
SFV Room 200B: So, you know what I mean? So, I returned the favor.
SFV Room 200B: Cameron helped me with something that was bugging the hell out of me.
SFV Room 200B: That was… that was amazing. He could have remained silent, what is… it’s not his problem.
SFV Room 200B: It was my problem.
SFV Room 200B: So, if I can do the same, why not?
SFV Room 200B: If you can do something for somebody, why not? Isn’t that a noble profession to know that you literally, short of being a doctor, you can save a life?
SFV Room 200B: You can.
SFV Room 200B: Did you have a question?
SFV Room 200B: Yeah, no.
SFV Room 200B: I… there’s a client right now that I’m representing. Yes, he has mental issues, major mental issues. He’s actually incompetent at this time. Wow. He has 7 prior convictions, all drug use. All because he was never diagnosed and treated properly, in my opinion.
SFV Room 200B: And he’s about to be deported.
SFV Room 200B: to another country, I don’t want to mention the name of the country, but,
SFV Room 200B: And the family cannot afford.
SFV Room 200B: To pay a lawyer to undo all of these convictions.
SFV Room 200B: I came up with some stupid figure, like, nobody would do. And I said, I’ll do it for this much. Because I really believe, after I looked at his psychological record and all that, I was convinced that he’s… he needs help.
SFV Room 200B: he shouldn’t be deported, because in that country, apparently, there’s no medicine, or there’s no healthcare, sorry, there’s no free healthcare, there’s no family member, he’s gonna be screwed. Literally, I’m saving his life.
SFV Room 200B: I think that’s a noble profession, so whoever asked me why would you do that, I said, money, jokingly? It’s not all that. It’s absolutely not.
SFV Room 200B: Trust me, it gives you so much joy to know that you, single-handedly, can save a life.
SFV Room 200B: It’s beautiful.
SFV Room 200B: I think.
SFV Room 200B: That reminds me of the story Mark Garagos had when he first started, when, it was in Glendale, where the Glendale PD pulled over this Armenian kid, and there was a gun in the car, and he didn’t know that the…
SFV Room 200B: It’s a crazy story. He didn’t know that there was a gun in the car, it wasn’t his gun, and no jury, no one believed it. And every time… anytime there’s a gun in your car, it’s almost a guarantee that you’re done. It’s a guarantee, like, you’re in prison.
SFV Room 200B: Well, somehow, someway, when I read his book, he was able to prove that the gun actually did not belong to him, and he did it completely for free, because he truly believed in his heart. The lawyer did it for free? Yeah, Mark Garagos did it completely for free. Yeah, yeah, yeah, it was Mark… yeah, yeah. Good for him. It was when he first started, so he was saying… Yeah, I don’t suppose that the two brothers are paying him an arm and a leg.
SFV Room 200B: I don’t think so. I think he believes in their… this is time for them to get out, the Menendez brothers. Oh, yeah. I suspect he’s not getting millions of dollars. Yeah.
SFV Room 200B: And I hear that his daughter is an amazing lawyer.
SFV Room 200B: Tenny? Tenny. Tenny? Tenny? Yeah. Doesn’t she represent, my brother told me that… Diddy… she’s Diddy’s, one of Diddy’s. Yeah, P. Diddy’s, yeah. My brother told me a story where he was… he was testifying in a court where she was one of the lawyers.
SFV Room 200B: And my brother told me, I was so impressed, I didn’t even know her name, I wanted to know who she is. And then he saw her picture on the newspaper, and said, oh, no, I remember her! And he came and told… he said, she was so impressive.
SFV Room 200B: And she was on the other side.
SFV Room 200B: She didn’t decide that he was testifying.
SFV Room 200B: And he was very impressed by it. He really is impressed. He doesn’t want to tell me that he’s impressed by any lawyer.
SFV Room 200B: He thinks he’s, you know, he’s God Himself, and we’re just whatever.
SFV Room 200B: But, but yeah, it’s a noble profession. She works in New York. She’s licensed in New York. That is correct, yes, we did see that. Yeah, if I recall correctly, the case that he did, he testified in, was in D.C. federal court.
SFV Room 200B: And she was one of the lawyers for the other side in that DC Circuit federal court. That’s what I… District Court, sorry. Federal District Court in D.C. Okay.
SFV Room 200B: Problem number 4. A makes an offer for the sale of goods to B. Now we’re dealing with goods. And B accepts, but adds.
SFV Room 200B: Prompt acknowledgement must be made of receipt of this letter. Is that a contract? If so, what are its terms?
Ruben Hunanyan: Professor, could I answer this one?
SFV Room 200B: Yes, please do.
Ruben Hunanyan: So I would say no contract exists, because a reasonable person would interpret prompt acknowledgement must be made as a condition for the acceptance.
SFV Room 200B: Okay, so you’re saying… Prompt acknowledgement basically kills the offer, is that what you’re saying?
Ruben Hunanyan: More specifically, that the prompt acknowledgement must be made.
SFV Room 200B: Okay. So, are you saying there’s a contract or not?
Ruben Hunanyan: No contract, because the acceptance was conditional.
SFV Room 200B: Okay. Anybody else? Anybody else wants to opine on this?
Anabella Sulahian: I can answer.
SFV Room 200B: Please, ma’am.
Anabella Sulahian: I think there is a contract, and it’s unilateral.
Anabella Sulahian: I think, because it’s performance-based, I think, dependent, maybe? Does that… Correct for that one.
SFV Room 200B: My first inquiry is whether there is a contract. You’re saying there is a contract.
Anabella Sulahian: I…
SFV Room 200B: What about the language,
SFV Room 200B: From acknowledgement, you know, so on and so forth, what about that? What is the effect of that language on this contract that you said?
Anabella Sulahian: I feel like that’s, like, accepting already. Like, acknowledging, maybe? Is accepting, maybe?
SFV Room 200B: Well, isn’t he adding a term to… No contract. …the, the offer itself by saying, prompt acknowledgement?
SFV Room 200B: There’s no question.
Adreanne Kumamoto: Can I say something?
SFV Room 200B: I was maybe gonna argue that,
SFV Room 200B: It’s not really changing much about the offer.
SFV Room 200B: Nothing in the offer is being changed other than the other party has to basically say, I acknowledge your offer.
SFV Room 200B: So, in this scenario, neither party’s a merchant.
SFV Room 200B: So his additional term is nearly a, sword.
SFV Room 200B: Your proposal? Your proposal.
Adreanne Kumamoto: Professor, may I add something?
SFV Room 200B: Oh, it’s true.
SFV Room 200B: On Zoom.
SFV Room 200B: on Zoom?
Adreanne Kumamoto: Yes.
SFV Room 200B: Somebody spoke on Zoom.
Adreanne Kumamoto: Yes.
Adreanne Kumamoto: Can you… No.
Adreanne Kumamoto: So, under UCC 2-07, when he says a definite acceptance is valid.
Adreanne Kumamoto: Even if it adds non-material terms, so unless it’s expressly conditional. So I would say that there is a contract form, because there’s original offer plus additional acknowledgement.
SFV Room 200B: Okay, so let me read for the sake of time, because it’s 919, and I want to let you go before you kill me outside.
SFV Room 200B: This is… these are my notes, and I’m reading from my notes. This case is similar to a case called Poel versus Brunswick.
SFV Room 200B: It’s a New York case.
SFV Room 200B: Pre-UCC cases held that prompt acknowledgement amounted to a qualification or condition, so that this would qualify as a counteroffer.
SFV Room 200B: Pre-UCC? Oh, pre-UCC.
SFV Room 200B: post-UCC would be in agreement with… is it Ms. Adreen?
SFV Room 200B: Yeah, Jan. Yeah. Post-UCC agrees with you, and basically says, under the UCC, it would appear that the language promo acknowledgement
SFV Room 200B: does not expressly condition the acceptance on the assent to the offeror, and so there would be a contract under UCC 22-2071.
SFV Room 200B: But it’s a language where this acceptance is not effective.
SFV Room 200B: Unless buyer agrees to promptly acknowledge receipt of the letter, the result would be different.
SFV Room 200B: Do you understand? If you read 2-207, that’s exactly what it says. So if he says, unless you agree to this, there’s no deal, there is no deal.
SFV Room 200B: But he didn’t say that.
SFV Room 200B: Right?
SFV Room 200B: he’s basically, and I also agree with you, that it doesn’t really change a whole lot, right? But prominent does not expressly condition the acceptance on the assent to the offer of war,
SFV Room 200B: And so it would be… it is a… Contract under 2-071.
SFV Room 200B: Okay? If both parties were merchants, I, I, just let me finish this. If both parties were merchants.
SFV Room 200B: The issue is whether it… the issue would be whether it naturally alters the contract. If it does not, and becomes part of the contract, there would be a breach
SFV Room 200B: by failure to give notice, but surely an immaterial breach with only nominal damages. In other words, just because you didn’t give
SFV Room 200B: notice of the acknowledgement, timely, yeah, it’s a breach, but what do you get? Peanuts. Nominal damages, which in court we say a dollar.
SFV Room 200B: Right? Like, a lot of people sometimes say, I want to sue him! I’m like, what for? He scared me! I’m like, okay, you get $1. I’ll pay you right now. You know? He didn’t pull the gun on you, he scared… what do you mean, scared you? Like, he cut me off. Oh, so?
SFV Room 200B: I get… I get cut off all day, you know, and I do that… I didn’t do that.
SFV Room 200B: Okay, any questions before I let you go? Professor… That 922 is hated by some staff. Scenario for number 4.
SFV Room 200B: Is he not obligated to follow his acknowledgement? They’re not merchants, so because they’re not merchants, no! That still is a question.
Ruben Hunanyan: Yes, sir. Yes, sir. Yeah, so I argued earlier that the words must be made, made it a conditional, but you’re saying it needs to be not that vague, it needs to be more specific, like, like the acceptance, like, relies on this specific thing?
SFV Room 200B: I’m not sure if I followed, what you just said, but here the court basically says.
SFV Room 200B: on acknowledgement is under-207 doesn’t feel the opportunity, okay? Because you’re basically merely saying you need to respond back, and it’s not necessary, because you’ve already accepted it.
SFV Room 200B: And they’re on merchants, so that’s basically how the portions.
Ruben Hunanyan: Thank you.
SFV Room 200B: My, my very…

Main

Outlines

Class Notes

Class Transcripts

Session 08

Contracts - Session 08

Transcript

Main

Outlines

Class Notes

Class Transcripts

​Contracts - Session 08

​Transcript

Contracts - Session 08

Transcript