The Vulture Should Have Sued for Breach of Contract

August 8, 2017

Villains in Marvel Cinematic Universe turn to a life of crime for multiple reasons. Loki had father issues fueling his alliance with Thanos to invade Earth. Wilson Fisk wanted to make New York a better place through Federal redevelopment programs (and racketeering) after the Battle of New York. For Adrian Toomes, the City of New York breaching its cleanup contract due to the Federal Government claiming exclusive jurisdiction for the remediation of Chitauri technology in the aftermath of the Battle of New York, was his reason for becoming a murdering arms dealer. It would have made more sense to seek legal representation, because Toomes should have sued for breach of contract.

Adrian Toomes had a valid contract with the City of New York to remove the alien weaponry that was littered across Manhattan. Toomes had begun performance of his contract and incurred costs for additional vehicles to complete his contractual obligations. If not for Damage Control stopping his contractual performance, Toomes would have competed the cleanup of Chitauri wreckage across Manhattan.

The New York City – Toomes Contract was a construction contract under N.Y. Gen. Bus. Law § 756, which covers everything from demolition to excavation to improvement to land. New York City could claim that the original contract became unenforceable from the Federal Government claiming exclusive jurisdiction for the removal of alien technology. If this was a valid argument, that would not excuse either New York City or the Federal Government from having to pay Toomes for work performed.

Contracts can be unenforceable as a matter of public policy if there is 1) legislation stating the agreement is unenforceable; or 2) if public policy outweighs the enforcement of the agreement. See, generally Restat 2d of Contracts, § 178(1) (2nd 1981).

The Federal Government had a valid interest in ensuring public safety from alien weapons and technology scattered across Manhattan. Enacting legislation creating Damage Control to respond to superhuman destruction would be a valid reason for the New York City – Toomes contract to become unenforceable. However, Toomes had already begun work and spent significant funds after entering into the contract with New York City.

Adrian Toomes had valid expectation, reliance, and restitution interests for his contract with New York City. As such, Toomes is entitled to damages for the breach of contract under multiple theories.

Toomes, at a minimum, is entitled to damages of the contract price (or unpaid portion) minus the cost of completion (cost avoided by not having to complete performance). See, Restat 2d of Contracts, § 348(2)(b). Alternatively, another damages formula would be for the work that had been completed, plus for the remaining portion of the work, and the profit that would have been made from that work. Murray on Contracts, p 682, citing Kehoe v. Rutherford, 56 N.J.L. 23, 27 A. 912 (1893).

That is not the end of Toomes’ damages analysis. Toomes spent substantial funds in reliance upon the contract AND performed his contractual obligations, before Damage Control shut him down. Toomes would be entitled to consequential damages for his costs and for the work performed, to avoid the unjust enrichment of the Federal Government or New York City.

The remedy for breach of contract is NOT illegal weapons manufacturing with alien technology. Adrian Toomes should have immediately contacted a attorney to seek damages from both New York City and the Federal Government. While both prospective defendants would point to the other on who is financially responsible to Toomes, with the Federal Government claiming it is New York City, and New York City [rightly] arguing it was Federal interference that caused the breach of contract, a good plaintiff’s lawyer would sue both.

How the Magic of Contract Law Saved the World in Doctor Strange

Josh Gilliland

February 12, 2017

It is not often that Contract Law saves the world, but when it does, it is a doctor conducting the negotiations.

Doctor Stephen Strange stopped Dormammu from destroying life as we know it on Earth by bargaining with him. The key terms included Dr. Strange would end the time loop that had trapped Dormammu in exchange for the safety of Earth. As an added term, Dormammu would accept Kaecilius and his Zealots into his Dark Dimension. The goal of Kaecilius’s plan was to ultimately bring Dormammu’s timeless Dark Dimension to Earth. Would that make Kaecilius a third-party beneficiary to Doctor Strange’s bargain with Dormammu?

Courts have weighed the issue of what are the rights a third person who benefits from a contract, but is neither the promisor nor promisee. The English view was that a third-party had no enforceable rights. See, John Edward Murray, Jr, Murray on Contracts, Third Edition, Copyright 1990, citing Vandepitte v. Preferred Acc. Ins. Corp., A.C., 70 (1933), Tweedle v. Atkinson, 1. B. & S. 393 [1861]; Bourne v. Mason, 1 Ventirs 6 [1669].

The “American” view of third-party beneficiaries was first definitively explained in Lawrence v. Fox 220 N.Y. 268 (1859). As the legal sorcerer Murray explained, Holly (Party A) loaned $300 to Fox (Party B) and told Fox that Holly owned $300 to Lawrence (Party C), who Fox agreed to pay back. Murray on Contracts, page 754, citing Lawrence v. Fox. Lawrence was not paid back, sued, and ultimately recovered, based on the principle that “where one person makes a promise to another for the benefit of a third person, the third person may maintain an action to enforce that promise.” page 755.

Dr. Strange’s bargain included a term that gave Kaecilius exactly what he wanted: timelessness without death in the Dark Dimension. Legally speaking, Kaecilius was a third-party beneficiary of Strange’s contract with Dormammu. Unfortunately for Kaecilius, he should have read the warning about the spell to go to the Dark Dimension.

Would Doctor Strange Be Contractually Required to Save Doctor Doom’s Mom from Hell?

Josh Gilliland

November 5, 2016

The Doctor Strange and Doctor Doom graphic novel Triumph and Torment presented a complex legal issue: Doctor Strange owed Doctor Doom a “boon” for surviving a mystical challenge. Doctor Doom’s boon was for Doctor Strange to help Doom liberate his mother from Hell.

That…is a big favor.

A “boon” historically was “Unpaid services, rendered in kind or labor, without being fixed in amount or time, that some tenants owed to the landowner as a condition of tenancy.” See, Black’s Law Dictionary, 9^th Edition.

The Merriam-Webster dictionary defines a “boon” as “something pleasant or helpful: a benefit or advantage.”

Doctor Strange was bound to no ordinary boon, but an adhesion contract for his personal performance for a rescue mission from Hell. There are many types of contracts, but rescuing someone’s mom from the Devil takes specific performance to a new level (or low in going to Hell).

An “adhesion contract” is a type of contract that one party has no choice as to the terms and “adheres” to the agreement. The origins of these contracts are from life insurance contracts. See, Rory v. Cont’l Ins. Co., 473 Mich. 457, 478, 703 N.W.2d 23, 35-36 (2005) for a brief history. Moreover, personal performance contracts bind a specific individual, but not heirs or assignees, because there is no adequate substitute. See, Black’s Law Dictionary, 9^th Edition.

An adhesion contract is “judged by whether the party seeking to enforce the contract has used high pressure tactics or deceptive language in the contract and whether there is inequality of bargaining power between the parties.” Vuksanaj v. Quality Bldg. Serv. Corp., 2014 NY Slip Op 32175(U), ¶¶ 2-3 (Sup. Ct.), citing Morris v. Snappy Car Rental, Inc., 84 N.Y.2d 21, 30, 637 N.E.2d 253, 614 N.Y.S.2d 362 (1994)

New York courts will not order specific performance if “it will result in great hardship and injustice to one party, without any considerable gain or utility to the other, or in cases where the public interest would be prejudiced thereby.” Conger v. N.Y., W. S. & B. R. Co., 120 N.Y. 29, 32 (1890).

Doctor Strange had to “adhere” to the terms of Doctor Doom’s “boon” to rescue Doom’s mother. There does not appear to be high pressure tactics or deceptive language used by Doom at the time of the contract (while in Hell is a different story). While Doctor Strange is the Sorcerer Supreme, there arguably was no bargaining power in accepting Doom’s boon. However, Doom did not ask for Strange to grant him power to conquer the world, but merely free his mother from Mephisto’s version of Hell.

Cynthia von Doom has a claim as a third-party beneficiary to Doctor Doom’s “boon” with Doctor Strange. The late Cynthia could prove that the contract to rescue her from Hell was made for her benefit, thus she was a third-party beneficiary. Rosenheck v. Calcam Assocs., 649 N.Y.S.2d 247, 249 (App. Div. 1996). Many states allow contracts made expressly for the benefit of a third person can be enforced by that party. See, Cal. Civ. Code § 1559. However, since Cynthia was in Hell, she would have significant challenges finding legal representation to bring an action. Moreover, it is unlikely Hell has any courts would follow lex loci contractus in applying the laws of New York to the Doom-Strange boon.

The specific performance of literally going to Hell to rescue Doom’s mother sets a high bar for hardship. Saving someone’s soul from the Devil is beyond any court of equity in granting specific performance.

Doctor Doom’s “boon” for Doctor Strange has many issues with being unenforceable, because the nature of the personal performance requires going to Hell, to the unknown of being able to rescue Cynthia von Doom’s soul, and whether Doctor Strange is violating the Logan Act for working with Doctor Doom, or whether the United States has any export control licensing on magical spells to governments hostile to the United States.

Contract issues aside, Triumph and Torment is one Hell of a good story.

Termination of Streamers’ Employment Raises Contract Questions

Roger Quiles

June 27, 2015

Following the recent League of Legends East Coast Convention, eight streamers were fired from the popular group of live-streamers known as Team2G. For those unaware, live-streamers are individuals who stream themselves playing video games online for profit through services like Twitch.tv. The terminated streamers had allegedly violated their contracts by failing to attend the entirety of the convention and for “excessive partying.” However, many of the circumstances surrounding the streamers’ termination are unclear. Allegedly, the streamers had never signed an employment contract and were only informed that such a contract existed upon termination, when the team manager stated that she had signed the contracts on their behalf. If true, such actions raise questions as to whether the terminations were appropriate and whether valid contracts actually exist.

Most states treat employment as “at will,” meaning that an employer can terminate an employee at any time and for almost any reason. The employer cannot terminate the employment of an employee on the basis of membership to a protected class, like race, sex, national origin or age. However, the terms of an employment contract can specify the circumstances by which an employee may be terminated. Should such language exist in an employment agreement, then any deviation from the specified circumstances would be improper. Although the manager for Team2G cited contractual violations as a reason for termination, the very existence of an employment contract, and its terms, could be questioned.

The streamers allege that they have never seen, much less signed, an employment agreement with Team2G and that they were only verbally instructed as to how many hours they were required to stream per month. In order for a valid contract to exist, there must be an offer, consideration, acceptance, and mutual assent to the contract’s terms. Such a discussion about hours of work may lead to a valid oral contract, assuming that consideration was also discussed. Performance of the verbal obligations would further exemplify the existence of said verbal contract. Yet, the streamers were allegedly informed that written employment agreements did exist and that they were signed by the manager on their behalf.

If Team2G’s manager did sign the streamers’ contracts on their behalf, then it is likely that no valid written employment agreement actually exists. Concerning the written contract, the offer would be the opportunity to work for Team2G and the consideration would be the stated payment for the streamer’s services. Normally, acceptance and mutual assent are exemplified by signing a contract after reading and understanding the contract’s terms. Assuming that the manager signed the contracts on behalf of the streamers without their explicit consent, and the streamers had no knowledge of the existence of the contract or its terms, it likely cannot be argued that the streamers accepted the contract and assented to its terms. Due to those defects, it would be difficult to uphold the alleged written contract as valid. Therefore, the oral contract between the streamers and Team2G would likely govern. As the oral contract does not contain restrictions on termination other than that provided by Federal and State law, Team2G would likely be able to legally terminate the streamers’ contracts.

Unfortunately, the Team2G situation is not atypical. Many individuals in the gaming industry work as players, streamers, and content creators without valid, written contracts. The lack of contracts, and knowledge of one’s legal rights pertaining to oral contracts, has allowed professional gamers to be taken advantage of by scrupulous business owners. In the Team2G situation, a written contract may have offered the streamers some protection by defining the scenarios where they may be terminated. Despite its sizeable industry, professional gaming is still in its infancy and has yet to embrace the legal standards that other industries take for granted. Until professional gaming adopts the basic legal standard of utilizing contracts for employment agreements, and ensures that said contracts are legal, professional gamers will continue to be taken advantage of.

Roger Quiles is an attorney from New York City with a practice focusing in business, entertainment, and eSports law. A die-hard gamer since Super Mario Bros., Roger now represents professional gamers, tournament producers, and the businesses that serve them. Up, up, down, down, left, right, left right, B, A, Start.

(Photo used under creative commons from Eurritimia)

Blizzard Bans Bots: 100,000 Accounts Suspended for Violating Terms of Use in WoW

Roger Quiles

May 18, 2015

Blizzard Entertainment, creator of World of Warcraft (“WoW”), banned over 100,000 accounts for violations of the game’s Terms of Use. These accounts were engaged in “botting,” which is the practice of using third party programs to automate gameplay. Although botting had always been present in WoW, and similar such games, it had become a substantial issue of late. Bots were reportedly being used for repetitive, mundane tasks and also to farm player vs. player “honor points” in order to purchase better equipment. The botting problem was so prevalent in farming “honor points” that player vs. player arenas were reportedly filled with these bots, making the game very frustrating for actual players attempting to gain “honor points” legitimately. Fortunately, Blizzard has confronted botting before, and has established protective measures in its Terms of Use agreement.

WoW’s Terms of Use specifically states “You agree that you will not, under any circumstances: (A) use cheats, automation software (bots), hacks, mods or any other unauthorized third-party software designed to modify the World of Warcraft experience.” Additionally, Blizzard expressly reserved the right to ban accounts for any reason. However, the Terms of Use states that “most account suspensions, terminations and/or deletions are the result of violations of the Terms of Use.” Such clear language in the Terms of Use easily grants Blizzard the authority to take action as necessary when players are found to be botting. Although it is safe to assume that most gamers do not read the Terms of Use for the games they play, it is well known within the WoW community, and gaming community at large, that the use of bots could result in an account ban.

Blizzard has long opposed botting, and has even taken legal action against companies that make botting software used in its games. In 2006, MDY Industries LLC, the creator of a WoW botting software, sought a declaratory judgment against Blizzard that it did not infringe on Blizzard’s copyrights (2008 U.S. Dist. Lexis 53988). However, Blizzard asserted counterclaims under the Digital Millenium Copyright Act and tortious interference with contract. Although Blizzard’s counterclaims were successful at the district court level, the Ninth Circuit reversed. Ultimately, after five years of litigation, the case was settled in favor of Blizzard.

Blizzard recently attempted to sue the creator of Honorbuddy, a popular third party botting software, in Germany. However, Blizzard was unsuccessful in this case, and withdrew its application for an injunction earlier this month. Honorbuddy had prided itself on being undetectable by Blizzard. However, it is thought that the very recent failure in Court against Honorbuddy was the motivation behind finding a method of detecting the botting software, and the subsequent, massive ban of many Honorbuddy users. With the ban of a substantial number of its users and narrowly escaping litigation, the creator of Honorbuddy has effectively shut down the application for the time being.

Apparently, Blizzard’s mighty ban hammer may be enough to stem the tide of botting villainy. Although 100,000 accounts is a substantial number to ban by any means, WoW maintains a subscriber base of 7.1 million people. Banned accounts will be able to access the WoW servers in six months, so the countless hours that players have put in to creating their characters will not all be for naught. Hopefully these players have learned that violations of WoW’s Terms of Use will result in punishment, and not seek to gain a competitive advantage through any illicit means.

Roger Quiles is an attorney from New York City with a practice focusing in business, entertainment, and eSports law. A die-hard gamer since Super Mario Bros., Roger now represents professional gamers, tournament producers, and the businesses that serve them. Up, up, down, down, left, right, left right, B, A, Start.

Does Lance Hunter Have a Valid Employment Contract with Director Coulson?

Josh Gilliland

April 1, 2015

Cocktail napkin on wood — Paper bar towel coaster

Agent Lance Hunter signed a cocktail napkin and gave it to Director Phil Coulson as acceptance of Coulson’s offer to join SHIELD. Does Hunter have a valid employment contract with Director Coulson’s SHIELD?

YES, with some creative lawyering.

Silicon Valley has been the home of deals written on cocktail napkins for decades. In fact, the earliest California case where parties first put a deal on a napkin, which was a signed contract by the next morning, was in 1953 for purchasing 800 head of cattle. H. Moffat Co. v. Rosasco (1953) 119 Cal.App.2d 432, 436 [260 P.2d 126].

In Hunter’s case, Director Coulson made a verbal offer for Hunter to join SHIELD. Hunter was abducted by Mack and Mockingbird and taken to the SHIELD Helicarrier Elliott before he could accept Coulson’s offer. After escaping and finding Director Coulson, Hunter simply signed the cocktail napkin and stated he was accepting the job offer.

There are several significant problems with Hunter having a valid employment contract. First, the cocktail napkin only has his signature. It does not contain the scope of employment, job duties, pay, vacation time, medical coverage, date of signature, or anything required terms for there to be a valid contract.

These defects are fatal to any contact. However, if Hunter had been given a written contract prior to his abduction that contained the required terms, a valid contract might be possible if the napkin is considered a separate signature page to a written contract. This would require the napkin being attached to a written employment agreement once Coulson can recapture his office or print a new contract.

Another option is to view Hunter’s signature as a manifestation of his intent to accept Coulson’s offer. The terms of the contract would need to be fully defined over drinks with umbrellas and codified in a final written agreement.

Any oral terms discussed between Coulson and Hunter not included in a final written agreement could be excluded under the Parole Evidence Rule, which states that any prior oral agreements cannot contradict a final written agreement. Cal Code Civ Proc § 1856(a).

There is a very strong argument that Hunter has an implied in fact contract. Such a contract is one where the existence and terms are manifested by conduct. Cal Civ Code § 1621.

Hunter’s conduct has demonstrated he is working for SHIELD since being abducted to the Elliott, demonstrating he accepted Director Coulson’s offer. Hunter’s conduct demonstrating an agreement to work for SHIELD include:

1) Hunter resisted the interrogation by Commander Robert Gonzales and the “Hufflepuff” leaders;

2) Hunter fought to escape Elliott;

3) Hunter found Director Coulson after getting to shore; and

4) Hunter immediately signed a cocktail napkin for Coulson after ordering a drink.

All of these actions demonstrate Hunter accepted Coulson’s original offer.

There is also the reality that Director Coulson’s SHIELD is an illegal operation, thus the contract would be void. However, assuming there are Presidential Pardons or Congressional Amnesty Acts in the near future, Hunter can consider himself employed by Director Coulson’s SHIELD. That, or they just formed a terrorist conspiracy.

Bases Loaded: Baseball Patents and Player Contracts in the 19th Century

Josh Gilliland

March 31, 2015

Baseball. There is something magical about watching a game. The crack of a bat hitting a ball; the tactics for the defense; and the fact the game is both a team and individual sport simultaneously. Hard not to love it.

I have great childhood memories of playing catch with my grandfather as a boy. I still have the glove from those evenings we would throw the ball around after he got home from work.

My grandfather played baseball in his youth in Iowa. Even in his 90s, he still has a good arm to the delight of dogs that play fetch. Back in 2005 he demonstrated he was still the “natural” at a Giants and Rockies game where he caught a foul ball launched into the upper deck bare handed. A hush fell over AT&T Park for all of those who witnessed the 84 year old’s “play” on the Jumbotron.

They even sent a camera crew up to get footage of him holding the baseball.

I also love the law. I was curious about what the cases from the 19^th Century involving America’s favorite pastime. There are many contract and a few patent cases.

Patenting the Double Herring-Bone Stitch

The first up to bat is a case from 1884 over an action for a failed injunction over the reissue of a patent for the leather covers of baseballs in Mahn v. Harwood.

We need baseballs in order to play baseball. On May 21, 1872, John Osgood was issued a patent relating to “base-balls and other similar articles.” Mahn v. Harwood (1884) 112 U.S. 354, 355. Osgood assigned his rights to Louis H. Mahn, who was reissued the patent on April 11, 1876. Id.

Problem: the patents descriptions and drawings were identical. The only reason Mahn sought a reissue of the patent was to enlarge the claims of invention. Mahn, at * 357.

The Court stated that it was contrary to law to reissue of a patent for the purpose of enlarging claims, especially after a four-year gap, and not even by the inventor. Mahn, at * 360-361. As such, the Court held the reissue of the patent was void, and dismissed the claims against the alleged infringer. Mahn, at * 363-364.

What is very interesting is the original patent describing the process how a baseball is made:

1. A ball exterior, composed of two crimped hemispherical covers, A and B, having their respective seams x and y break joints, substantially as set forth.

2. In combination with a ball whose exterior is composed of two hemispherical covers A and B, with their respective seams x and y breaking joints, I claim the double herring-bone stitch formed of two threads, in the manner herein set forth.

Mahn, at * 365.

Pitching a Preliminary Injunction on Negative Rights

Next up, a baseball club that tried to get an injunction against a baseball player from playing ball for the entire season of 1890 with any club but the plaintiff.

The New York Base-Ball Club and John M. Ward had a contract for Ward to play baseball for the 1889 season. The contract included a provision to “reserve” Ward for the 1890 season. Metropolitan Exhibition Co. v. Ward (Sup.Ct. 1890) 9 N.Y.S. 779, 779. The case turned on the definition of the word “reserve.”

The relevant contract provision stated:

It is further understood and agreed that the said party of the first part shall have the right ‘to reserve’ said party of the second part for the next season ensuing, the term mentioned in paragraph 2 herein provided; and said right and privilege is hereby accorded the said party of the first part, upon the following conditions, which are to be taken and construed as conditions precedent to the exercise of such extraordinary right or privilege, namely: First. That the said party of the second part shall not be reserved at a salary less than that mentioned in the 20th paragraph herein, except by consent of the party of the second part. Second. That the said party of the second part, if he be reserved by the said party of the first part for the next ensuing season, shall be one of not more than fourteen players then under contract.”

Metropolitan Exhibition Co., at *781-782.

The Court did NOT enjoin the Defendant from playing baseball in 1890. The contract only had a reserve clause; this did not include required contractual terms such as payment. The Court explained the issue of seeking an injunction for undefined contractual rights:

As before said, this is a suit in equity wherein the court has no power to enforce the affirmative covenant claimed to exist, which would compel the defendant to play ball with plaintiff; but the court is asked, in effect, to decree the specific performance of a negative covenant, claimed to have been made by the defendant that he should not play ball with others.

Metropolitan Exhibition Co., at *781.

The Court denied the Plaintiff’s preliminary injunction, because it effectively would have been a final verdict for the Plaintiffs. The Court instead ordered a trial to determine the rights between the parties before the start of baseball season.

Who’s On First?

The final case up to bat is from 1885 and concerned the 1883 baseball season. A player sued his employer for breach of contract and recovered damages of $431.12. Oberbeck v. Sportsman’s Park & Club Asso. (1885) 17 Mo.App. 310, 311. The Defendant appealed.

The parties contracted for the Plaintiff’s services to play baseball in 1883 for $785 to be paid semi-monthly. The Defendant effectively fired the Plaintiff in June of that baseball season by prohibiting him from playing. The breach of contract suit followed. Oberbeck, at *311-312.

The original contract between the parties contained terms of payment and performance. The Defendants claimed that the first contracted needed to be approved by American Association of Base Ball Clubs, which never approved the contract. The Defendants produced a second contract that contained a clause the Defendant could terminate the Plaintiff at anytime. The Plaintiff claimed he nevered signed the second contract. Oberbeck, at *312.

The jury found for the Plaintiff. The Defendant’s appeal was rejected and the judgment affirmed. The evidence was on the side of the Plaintiff and the appellate held he was “safe” on appeal.

Take Me Out to the Ballgame

Baseball is a field of dreams. It is a game of strategy, supreme concentration, and some interesting off the field lawsuits. There is adventure in going to the games or watching it from the comfort from home. In the end, I just really loved playing catch with my grandfather.

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