‘Is Contract Law Ready for the Internet of Things?’

Stacy-Ann Elvy, Contracting in the Age of the Internet of Things: Article 2 of the UCC and Beyond, 44 Hofstra Law Review 839 (2016). When Amazon announced that it was expanding its Dash Button Program, its stock went up 2.3%. Amazon’s Dash button refers to a wi-fi enabled device that can be attached to a cupboard or refrigerator and allows a customer to order a specific item, such as more laundry detergent, simply by pressing the button. While some wondered whether consumers really needed this, others wondered whether the law was ready for this. As recent events reveal (such as the tragedy of Tesla’s self-driving automobile accident), technology is raising legal questions more quickly than lawmakers can anticipate or respond to them … (more)

[Nancy Kim, JOTWELL, 5 December]

Call for Papers: Modern Studies in the Law of Trusts and Wealth Management, 27-28 July 2017, Singapore

We, Richard Nolan, Tang Hang Wu and Kelvin Low, would like to invite proposals for papers for a conference to be held in Singapore from 27-28 July 2017.

The Centre for Cross-Border Commercial Law in Asia, Singapore Management University, York Law School and the Singapore Academy of Law will convene the second conference in the ‘Modern Studies in the Law of Trusts and Wealth Management’ series from 27-28 July 2017 in Singapore. The website of the first conference may be found here.

The theme of the conference is ‘The Use and Abuse of Trusts and Other Wealth Management Devices’. The theme of the conference focuses on current developments and challenges facing trust law, and those who study or practise it, in the present political climate. The conveners of the conference plan to produce a published volume from the papers presented at this conference. Selected papers from the last conference will soon be published by Cambridge University Press. Scholars working in the fields of trust law and wealth management are invited to submit proposals addressing the conference theme. The conveners are keen to hear a diversity of voices on the topic and would welcome scholars from beyond the Commonwealth, women scholars and young scholars in the field.

We are in the process of confirming the keynote and various speakers. Thus far, the confirmed speakers include Alastair Hudson (Exeter), Paul Davies (Oxford) David Pollard (Trust Law International/Freshfields), James Lee (KCL), Jamie Glister (Sydney), Lou Jianbo (Peking), Lusina Ho (HKU), Simon Douglas (Oxford), Simone Degeling (UNSW), Thomas Gallanis (Iowa) and Warren Barr (Liverpool).

Presenters from the general call for papers will be expected to meet their own travel costs and to pay the conference registration fee of S$500 (excluding Goods and Services Tax of 7%). Unfortunately, the conference organisers do not have any funding to help meet cost of travel or the registration fee.

If you would like to offer a paper, please submit a working title and an abstract (of no more than 1500 words) by 31 January 2017 by email to all of three of us: Richard Nolan (richard.nolan@york.ac.uk), Tang Hang Wu (hwtang@smu.edu.sg) and Kelvin Low (kelvinlow@smu.edu.sg).

Ariel Porat, ‘Remedies’

This chapter emphasizes the common denominators of the remedies available to the victim in torts and contracts. Some remedies which are more typical of either contracts or torts are also discussed. The topics covered by the chapter are liability rules vs property rules, specific performance vs damages, the foreseeability requirement, tort liability for pure economic losses and non-pecuniary losses, caps on consequential damages, damages for bodily injury and lost income, liquidated damages, probabilistic recoveries and offsetting risks.

Porat, Ariel, Remedies (December 1, 2016). Forthcoming, Handbook of Law and Economics (Francesco Parisi ed, Oxford University Press, 2017).

Sean Thomas, ‘Security interests in intellectual property: proposals for reform’

This paper considers some of the difficulties arising from how English law conceptualises certain types of security interests over IPRs, and the problems arising from dual registration systems. This analysis is informed by a critical comparison of the current English doctrine, alongside the US system and the proposals from UNCITRAL. It is argued that attempts to regulate a world of integrated goods (whereby goods and software are inextricably interconnected), through unintegrated regimes of legal governance of security interests over goods and IPRs, is unsustainable. It will thus be argued that reform of security interest law generally (to bring about a functional system of security) and a single register for security interests whether over goods or IPRs is necessary. Specific recommendations to deal with problems concerning purchase money security interests, and third-party purchasers, are put forward.

Sean Thomas, Security interests in intellectual property: proposals for reform, Legal Studies Early View. First published: 4 December 2016, DOI: 10.1111/lest.12135.

Daniel Barnhizer, ‘Contracts and Automation: Exploring the Normativity of Automation in the Context of US Contract Law and EU Consumer Protection Directives’

Given a choice between two systems of contract rules, a court or legislature may have a normative obligation to adopt the rule that is more susceptible to coding and automation. This paper explores the ramifications of that normative proposition through the lens of multiple contract doctrines that traditionally involve ‘messy’ judgments or multiple interacting judgments regarding which human beings are – arguably – capable of making finely nuanced analyses. Using the common law doctrine of unconscionability and Polish Civil Code Article 385 on unfair terms in consumer contracts, this paper explores the differences between contract rules that require human analysis versus those that can be applied with strong reliability by automated processes. Finally, the paper analyzes some of the potential pitfalls of this normative proposition in light of technological, economic, and moral/ethical concerns.

Barnhizer, Daniel D, Contracts and Automation: Exploring the Normativity of Automation in the Context of US Contract Law and EU Consumer Protection Directives (November 30, 2016).

McMichael and Viscusi, ‘The Punitive Damages Calculus: The Differential Incidence of State Punitive Damages Reforms’

State punitive damages reforms have altered how courts award punitive damages. We model the decision to award punitive damages as a two-step process involving the decision to award any punitive damages and the decision of what amount to award. For the Civil Justice Survey of State Courts samples of trial court verdicts, punitive damages caps reduce the amount of damages awarded but do not affect whether they are initially awarded. In contrast, the effect of punitive damages reforms on blockbuster punitive damages awards of at least $100 million is to reduce the incidence of these awards, but not their amount.

McMichael, Benjamin J and Viscusi, W Kip, The Punitive Damages Calculus: The Differential Incidence of State Punitive Damages Reforms (November 30, 2016). Vanderbilt Public Law Research Paper No 16-52; Vanderbilt Law and Economics Research Paper No 16-27.

Bigoni, Bortolotti, Parisi and Porat, ‘Unbundling Efficient Breach: An Experiment’

Current law and economics scholarship analyzes efficient breach cases monolithically. The standard analysis holds that breach is efficient when performance of a contract generates a negative total surplus for the parties. However, by simplistically grouping efficient breach cases as of a single kind, the prior literature overlooks that gain-seeking breaches might be different from loss-avoiding breaches. To capture these different motives, we designed a novel game called Contract-Breach Game where we exogenously varied the reasons for the breach — pursuing a gain or avoiding a loss — under a specific performance remedy. Results from an incentivized laboratory experiment indicate that the motives behind the breach induce sizable differences in behavior; subjects are less willing to renegotiate when facing gain-seeking than loss-avoiding breaches, and the compensation premium obtained by the promisee is higher. Our analysis suggests that inequality aversion is an important driver of our results; indeed, inequality-averse subjects accept low offers more often in cases of loss-avoiding breaches than gain-seeking breaches. These results give us insight into the preferences and expectations of ordinary people in a case of a breach.

Bigoni, Maria and Bortolotti, Stefania and Parisi, Francesco and Porat, Ariel, Unbundling Efficient Breach: An Experiment (December 1, 2016). Forthcoming, Journal of Empirical Legal Studies (2017); University of Chicago Coase-Sandor Institute for Law and Economics Research Paper No 785.

T Leigh Anenson, ‘Equitable Defenses in the Age of Statutes’

The Supreme Court’s pending decision in SGA Hygiene Products Aktiebolag v First Quality Baby Products, LLC, is the most recent in a series of cases struggling with the same issue: What is the scope and content of equitable defenses in federal statutes? This Article analyzes the integration of equitable defenses in statutory law for the first time. Concentrating on Supreme Court cases, it examines these doctrines across several statutory subjects. It identifies a pattern in the decisional history of equitable defenses in order to assist in building a body of cases along principled lines. The Article also reveals that while the Court tends to accept equitable defenses according to their tradition, it likewise limits them in light of legislative objectives. An expansive attitude of inclusion corresponds with a more restrictive view of their application. What is more, the Court is supplying their substance and scope from a combination of state and federal law. In this regard, the Court is adjudicating equitable defenses to generate a general common law. The Article additionally outlines the Court’s developing supervisory role vis-a-vis the lower courts. It further explores the challenges of continuity and change in incorporating these private law principles into public law to provide direction for the future. Overall, the Article suggests a way of looking at equitable defenses to better appreciate their place in the regulatory state.

Anenson, T Leigh, Equitable Defenses in the Age of Statutes (November 6, 2016).

‘Yael Lifshitz on Rethinking Original Ownership’

Yael Lifshitz has posted Rethinking Original Ownership, forthcoming in the University of Toronto Law Journal. This work is related to Yael’s doctoral dissertation in New York University’s JSD Program. Here is the abstract:

At the genesis of property, an initial allocation of entitlements takes place. Existing property scholarship identifies two main rules for assigning original ownership – ‘first possession’ and ‘accession’ – and positions them one against another. This article challenges the conventional binary division and the dominance of either first possession or accession as ‘pure’ allocation principles, arguing instead that the ownership of new resources is often allocated through hybrid mechanisms that combine the two rules. This article offers an analysis of hybrid rules and their utility through a novel and contemporary case study of the ongoing allocation of property in wind energy.

[Jerrold Long, PropertyProf Blog, 1 December]

Ryan Abbott, ‘Allocating Liability for Computer-Generated Torts’

Artificial intelligence is part of our daily lives. Whether working as taxi drivers, financial analysts, or police, computers are taking over a growing number of tasks once performed by people. As this occurs, computers will also cause the injuries inevitably associated with these activities. Accidents happen, and now computer-generated accidents happen. The recent fatality caused by Tesla’s autonomous driving software is just one example in a long series of ‘computer-generated tort’s.

Yet hysteria over such injuries is misplaced. In fact, computers are, or at least have the potential to be, substantially safer than people. Self-driving cars will cause accidents, but they will cause fewer accidents than human drivers. Because automation will result in substantial safety benefits, tort law should encourage its adoption as a means of accident prevention.

Under current legal frameworks, manufacturers of computer tortfeasors are likely strictly responsible for their harms. This article argues that where a manufacturer can show that an autonomous computer is safer than a reasonable person, the manufacturer should be liable in negligence rather than strict liability. This would essentially treat a computer tortfeasor as a person rather than a product. It would create a powerful incentive to automate when it would reduce accidents, and it would continue to reward manufactures for improving safety.

In fact, principles of harm avoidance suggest that once computers become safer than people that human tortfeasors should no longer be judged against the standard of the hypothetical reasonable person that has been employed for hundreds of years. Rather, individuals should be compared to computers. To appropriate the immortal words of Justice Holmes, we are all ‘hasty and awkward’ by comparison.

Abbott, Ryan, Allocating Liability for Computer-Generated Torts (November 29, 2016).