Category: Contract

SCOTUS on Privity via ContractsProf Blog:

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| Contract, General

Supreme Court Decides Case Involving Third-Party Beneficiaries Issue

Last week, the U.S. Supreme Court issued its opinion in Astra USA v. Santa Clara County in which it unanimously overturned a decision of the Ninth Circuit Court of Appeals.  The case was brought by Santa Clara County, which operates several 340B entities, that is, public hospitals or community health organizations involved in delivering medical services to the poor.  The county claimed a right to sue for overcharges on prescription medications provided through a PPA, or Pharmaceutical Pricing Agreement entered into between drug manufacturers and a division of the Department of Health and Human Services.  Although no statute created a private right of action to sue on such PPAs, the county claimed that it could sue as a third-party beneficiary of the PPAs to which the drug manufacturers had agreed.

Justice Ginsburg, writing for the Court, determined that permitting such third-party beneficiary suits would be incompatible with the statutory design.  The 340B program and its attendant PPAs are to be administered by the Secretary of HHS and her agents.  HHS oversight would be impossible if third-parties were permitted to set themselves up as independent enforcement agencies.  This is so because the drug companies are required under the statute to provide price information to the government so that it can set price ceilings.

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Suppose the law: M. NourbeSe Philip’s The Zong!

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| Contract, The Zong

Cover of M. NourbeSe Philip's 'Zong!' via the Dartmouth UP websiteThe Zong (Gregson v Gilbert (1783) 3 Doug 232, 99 ER 629, [1783] EngR 85 (22 May 1783) (pdf)) is an infamous case. It concerned a claim against an insurer for the value of slaves thrown overboard from The Zong to allow the crew to survive a chronic lack of drinking water (it is voyage 84106 on the Trans-Atlantic Slave Trade Database). The claim succeeded at first instance, but failed on appeal before Lord Mansfield and Willis and Buller JJ. I have already blogged about Nate Oman’s review of Simon Schama’s Rough Crossings: Britain, Slaves, and the American Revolution (Harper Collins, 2007) which discussed the case, and about an episode of a television drama inspired by the case. Now Kate Sutherland brings news that poet (and recovering lawyer) M. NourbeSe Philip has published an extended poetry cycle about the case: Zong! As told to the author by Setaey Adamu Boateng (Wesleyan University Press | The Mercury Press | Google Books (2008)). The abstract describes the book as “a haunting lifeline between archive and memory, law and poetry” and continues:

In November, 1781, the captain of the slave ship Zong ordered that some 150 Africans be murdered by drowning so that the ship’s owners could collect insurance monies.

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Hadley v Baxendale in the Irish High Court

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| Contract, General

Hanrahan v Minister For Agriclture, Fisheries And Food [2010] IEHC 442 (26 November 2010)

McMahon J:

11. It is well established that a plaintiff may recover such damages for a breach of contract ‘as may fairly and reasonably be considered either arising naturally, i.e. according to the usual course of things’ or ‘such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract, as the probable result of the breach of it’. This test was set out in Hadley v Baxendale (1854) 9 Ex 341 at 354-355, and has been approved in numerous Irish decisions such as Lennon v. Talbot Ireland Ltd (Unreported, High Court, 20th December 1985), and Lee v. Rowan (Unreported, High Court, 17th November, 1981,).

12. The plaintiff is entitled to such damages as would put him as nearly as possible into the position in which he would have been had the animals been returned as agreed. In the absence of the cattle themselves, a sum of money to represent their value should be awarded. Additionally, the plaintiff claims he is entitled to profits lost and expenditure incurred because of the breach of the agreement. In the present case, these primarily relate to his loss of milk from the milking cows not returned.

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Estoppel and consideration – money for nothing?

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| Contract

ACC bank logo, via RaboBank websiteDuring the property boom, lots of banks made lots of loans to lots of property developers. Then, as the market began to tighten, many of the banks made alternative arrangements with some of their developer clients. Now that the property market has collapsed, banks are seeking to enforce the terms of loans as against developers, and the developers are relying on the alternative arrangements by way of defence. An Cumann Peile Boitheimeach Teorenta v Albion Properties Ltd & Ors [2008] IEHC 447 (07 November 2008) is one such case (see also the legal issues in Helsingor Ltd v Walsh [2010] IEHC 54 (05 March 2010)).

I learn via the very helpful new blog Stare Decisis Hibernia – a blog concerned with recent decisions of the Irish Superior Courts – that another such case has recently been decided by the High Court. ACC Bank plc v Kelly [2011] IEHC 7 (10 January 2011) turned largely on its facts, and Clarke J held that there was no binding agreement in place or clear understanding between the parties that the bank would not call in the loan. The defendants had argued that the alternative arrangement could be relied upon on the basis of an estoppel or enforced as a contract supported by consideration, but, in the course of holding that those claims failed on the facts, Clarke J made some important observations about when forbearance to sue constitutes good consideration (the underlined words are his emphasis):

7.9 So far as the case in promissory estoppel is concerned, I have already indicated that I am not satisfied that any concluded arrangement (even if it be short of a contract) had been come to between the parties such as could have grounded a case in promissory estoppel.

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Is a lost First worth £5m?

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| Academic Freedom, Academic judgment, Andrew Croskery, Contract, Grading and Marking, Litigation, Universities

University of Bradford Faculty of Engineering and Informatics buildingAfter Andrew Croskery comes Tony Chinedu Wogu. According to the Daily Telegraph and The Register, Tony Chinedu Wogu has failed in his bid to sue the University of Bradford for £5m compensation, alleging that a 2:2 and not a First in Computing Science was the result of discrimination and breach of contract. Judge Andrew Collender QC struck out his case, saying academics had a much better understanding of the quality of a student’s work than lawyers did. As Treacy J had done in Croskery, Collender QC pointed out that Mr Wogu could seek judicial review of the university’s decision to award him a 2:2, but only after he had exhausted his internal appeals. Moreover, he reasserted the principle of judicial deference to matters of purely academic judgment (as opposed to breaches of procedure):

This court has the most limited of powers to interfere in such a decision. This court has not the power or expertise to simply examine or to determine the proper degree grade to which the claimant would have been entitled from the University of Bradford. That is a decision particularly within the scope of an academic institution. It would not be for this court to apply its judgment as to the degree level reached and substitute that for the university’s … and the defendants’ application to strike out is successful.

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MCD pursues Prince for €2.2m through US court – The Irish Times – Mon, Feb 14, 2011

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| Contract, General

MCD PROMOTER Denis Desmond is pursuing Prince through the American courts to recover €2.2 million in damages which have not been paid.

Documents filed in the Central District of the Los Angeles Superior Court are seeking recognition of the High Court judgment given last year against Prince.

If judgment is granted, Mr Desmond will be able to target Prince’s assets, including his home, if he does not pay.

via irishtimes.com

I’ve discussed the background to this claim here.

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The Volokh Conspiracy » True Grit and the Law

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| Contract, General, Law and movies

True Grit and the Law

Ilya Somin • January 14, 2011 10:30 am

Various legal bloggers have commented on the surprising number of legal issues addressed in the recent Coen Brothers’ movie True Grit. There are contract issues, evidence issues, and federalism problems, among others. The protagonist, Mattie Ross, succeeds in large part because of her extensive legal knowledge. As a property professor, I was happy to see that she knows what a writ of replevin is, and uses the threat of getting one to good advantage.

True Grit also includes some interesting law and economics concepts about incentives.

via volokh.com
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Bad bank has four remedies for ‘clawback’ – Irish, Business – Independent.ie

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| Contract, General

By Dearbhail McDonald Legal Editor

Friday January 14 2011

THE National Asset Management Agency has four legal ways to overturn property transfers — including transfers by developers to spouses, children and other third parties — that it believes were aimed at defrauding current or future creditors. …

If a developer is bankrupt, transfers in the two years leading up to the bankruptcy can be set aside. Transfers in the previous five years can also be set aside in a bankruptcy unless a developer can prove that he was solvent at the time he transferred or gifted the asset.

If property was transferred before 2009, NAMA can use the 1634 Conveyancing Act Ireland which allows property conveyances and other transactions to be declared void if they are made for the purpose of delaying, hindering or defrauding creditors. If property was transferred after December 1, 2009, the 2009 Land and Conveyancing Reform Act allows for transfers to be set aside if there was an intention to defraud a creditor.

Finally, the NAMA Act itself contains a miscellaneous provision that gives the toxic loans agency powers to void transfers effected by debtors and those who provided loan guarantees, including personal guarantees.

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via independent.ie
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