Monthly Archives: December 2012

SciFi Pulse Interview

Ryan and I were interviewed for  Thanks to Nicholas Yanes for a great interview!

Arrow: “Lone Gunmen”

This episode of Arrow, entitled “Lone Gunmen”, aired back in October, but there’s some really good stuff in it. The main legal issue has to do with Oliver Queen’s little sister, Thea, getting picked up by the police for breaking into a store, while drunk, and trying on some outfits with her friends. Continue reading

The Guardianship of Bruce Wayne

This month’s Subculture for the Cultured column discusses Alfred’s guardianship of Bruce Wayne following his parents’ death.  Check it out!

Santa and Restraining Orders

Today we got a very interesting question in the comments on our classic post on Santa Claus and the law.  We decided that the question was still fair game for this year since for many people it’s technically still the Christmas season.  Heck, if you’re Russian Orthodox then Christmas is still 12 days away, and for the 14,000 adherents of the Armenian Patriarchate of Jerusalem it’s 24 days away.  But enough about non-Gregorian calendars.  Let’s talk about getting a restraining order against Santa.

Ann writes:

Could an individual get a restraining order against Santa for stalking them? He does, after all, watch people all the time (both when awake and asleep), and keeps notes on them in the form of a list determining if they are good or bad in his estimation. And what would happen if one parent in the house got the peace order, but the other was helping the kids write their letters to Santa?

Restraining orders—also called protective orders in this context—can be issued in many kinds of cases, most commonly stalking or domestic violence.  We’re assuming that Santa’s relationship with Mrs. Claus is a peaceful one, so we’ll limit the discussion to stalking.

I. Criminal Stalking

A protective order is a civil remedy, but it’s often tied to criminal behavior.  New York law defines stalking in the fourth degree this way:

A person is guilty of stalking in the fourth degree when he or she intentionally, and for no legitimate purpose, engages in a course of conduct directed at a specific person, and knows or reasonably should know that such conduct:
1. is likely to cause reasonable fear of material harm to the physical health, safety or property of such person, a member of such person’s immediate family or a third party with whom such person is acquainted; or
2. causes material harm to the mental or emotional health of such person, where such conduct consists of following, telephoning or initiating communication or contact with such person, a member of such person’s immediate family or a third party with whom such person is acquainted, and the actor was previously clearly informed to cease that conduct; or
3. is likely to cause such person to reasonably fear that his or her employment, business or career is threatened, where such conduct consists of appearing, telephoning or initiating communication or contact at such person’s place of employment or business, and the actor was previously clearly informed to cease that conduct.

We don’t think Santa’s behavior would meet this standard.  People couldn’t have a reasonable fear of material harm because Santa has an unbroken record of hundreds of years of peaceful activity.  It could be enough that he has actually caused material emotional harm to someone, except that the harm would have to be caused by contact or communication initiated by Santa.  The problem here is that Santa doesn’t initiate communication; instead people write letters to him.  Arguably he initiates indirect contact by entering people’s homes, but there’s no evidence that he enters homes where he is unwanted.  In fact, staying up late to ‘catch’ Santa is traditionally considered to cause him not to visit.  And of course visits from Santa Claus have rarely, if ever, caused someone to lose their job.

We won’t go into the details of the higher degrees of stalking, but suffice to say that if Santa doesn’t meet this standard then he wouldn’t meet the higher ones.

All is not lost for our hypothetical plaintiff, however.  As mentioned, a protective order is a civil remedy.  So what about a pure civil case with no underlying criminal behavior?

II. Civil Suits

As discussed in our prior post, Santa probably couldn’t be sued for trespass, but could he be sued for invasion of privacy?  When we say invasion of privacy what we really mean is the tort of intrusion.  The Restatement (Second) of Torts, gives three elements for intrusion: (1) an intentional intrusion, physical or otherwise, (2) upon the plaintiff’s solitude or seclusion or private affairs or concerns, (3) which would be highly offensive to a reasonable person.  See Mauri v. Smith, 324 Or. 476, 483 (1996) (applying the Restatement definition).  Santa definitely meets the first two elements: he intentionally intrudes, physically or otherwise, into a person’s private affairs or concerns.  It’s questionable whether this would be highly offensive to a reasonable person, however, since Santa’s been doing it for hundreds of years without too many complaints.

But let’s suppose the plaintiff was successful or that the plaintiff was able to get a preliminary injunction against Santa while the suit proceeded.  Such an injunction could include an order for Santa not to enter the plaintiff’s property or keep the plaintiff under observation.  If Santa violated the order then he could be found in contempt.

According to well-established principles of equity, a plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief. A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.

eBay Inc. v. MercExchange, LLC, 547 U.S. 388, 391 (2006).  The standard for a preliminary injunction is similar but requires that the party seeking the injunction have a substantial likelihood of success in the case.  As mentioned, we don’t think our hypothetical plaintiff has much chance of success, but let’s assume they pull it off somehow (maybe Santa fails to show up and they get a default judgment).

The first two factors are closely related.  An injury can be irreparable if retrospective relief (e.g. a payment of money damages) is inadequate and instead the injury requires ongoing, prospective relief.  In this case the plaintiff may have no monetary damages but still needs to prevent a recurrence of the injury.

The balance of the hardships could also weigh in the plaintiff’s favor.  Since Santa gives toys away for free, it’s very easy for him to give toys to one less person.  Heck, since suing Santa would probably be a one way ticket to the naughty list anyway, he probably wouldn’t have much of a complaint against an injunction, apart from the negative publicity.

The public interest is generally favored by enforcing privacy rights.  Arguably the public has an interest in policing morality (see, e.g., various stories about converting Scrooge-type characters to the Christmas spirit), but we doubt the courts would favor Santa’s “self-appointed arbiter of right and wrong” approach. So all four factors argue in favor of an injunction.

However, this four-factor analysis changes if, as Ann asks, “if one parent in the house got the peace order, but the other was helping the kids write their letters to Santa.”  In that case, where one parent (and presumably the child) wanted Santa to monitor the child’s behavior.  In that case there’s a significant hardship for Santa: if the child is good then he can’t toys to a child that wants them (and according to Santa, deserves them) .  And now the public (in the form of these third parties) has a strong, well-defined interest in allowing Santa to monitor the child’s behavior and give those gifts.  The first two factors still weigh in the plaintiff’s favor, but now they must be balanced against the other two.

III. Conclusion

Although Santa probably isn’t breaking any criminal laws, he could potentially be enjoined from monitoring someone who didn’t want to be (NB: children whose parents want Santa to keep tabs on their kid probably wouldn’t be able to bring a suit against Santa, since their parents can consent to the observation).  Of course, we doubt Santa would ever do that, which may explain why it remains a hypothetical question even in this litigious age.

Law and the Multiverse Classics – Christmas Edition

Many parts of the world will observe Christmas tomorrow.  In case you missed it two years ago—or want to check it out again—here’s our classic post on Santa Claus and the law.

Superhero Journalists Revisited

You may recall our previous post about superhero journalists Clark Kent and Peter Parker, which discussed how copyright affected them differently as an employee and an independent contractor, respectively.  Well the times they are a changin’, and Clark Kent quit his job at the Daily Planet in Superman #13 to become a blogger.  This will have more than a few legal consequences for Kent, some of which we’ll touch on today and some of which will have to wait for a future post.

I. Intellectual Property

As an individual Kent will either be working as a freelancer, selling stories to companies like the Huffington Post, or he may publish stories himself.  Regardless of which business model Kent chooses, he’ll also have to choose a form of business association (corporation, LLC, etc).  Basically, he could either choose some sort of corporation, or he could operate a sole proprietorship.  The latter is easier, but it’s also riskier (more on that later).

With regard to IP, the different kinds of business association give him some options.  For example, he could be an employee of a corporation, in which case the copyright in his works would be automatically owned by the corporation, just as they were owned by the Daily Planet when he worked there.  Or, if he wasn’t an employee then he could assign those copyrights by contract.  And if he chose not to incorporate, then he could retain ownership of the copyrights as an individual.

One practical effect of this choice will come into play when contracts with publishers are signed.  If Kent’s company owns the copyrights (either automatically or by assignment), then the company will be the one selling the stories, which entails either assigning the copyright to the publisher or granting the publisher a license.  If Kent operates as an individual, then it’ll be Kent selling the stories directly.  Either way it’ll probably be Kent signing the contracts, since he’ll be his company’s sole employee/shareholder/member.  The difference will be whether he signs it something like “Clark Kent, Manager, KentCo LLC” or just “Clark Kent.”

So what’s the point of all of this?  Why would Kent bother setting up a company, especially if he’s going to be the only employee or if it won’t even have any employees?  The answers are, as they so often are in the law, liability and taxes.  Taxes will have to wait for a future post, but let’s take a brief look at liability.

II. Liability

As a writer working alone, Kent probably won’t have to worry too much about some of the common sources of liability for companies, such as products liability or workplace injuries.  But he will have to worry about suits for defamation, invasion of privacy, and related torts.  To a certain extent these risks can be insured against, and it’s usually part of commercial general liability insurance, but there are limits to what insurance will cover.  If Kent intentionally defames someone or (more likely) intentionally invades their privacy, then an insurer isn’t going to cover that.  This is where the liability protection of the corporate form comes in to play.

Basically, the way this works is that the plaintiff could sue Kent’s corporation or company but not Kent himself as an individual.  This means that the corporation’s assets would be vulnerable in the suit, but not Kent’s personal assets.  There are some exceptions to this general rule, however.  Sometimes a plaintiff can “pierce the corporate veil” and sue the employees or directors and officers of the corporation as individuals.  There are several reasons why this can happen, but some of the most common are when the corporation is just an “alter ego” of the individual (i.e. they aren’t really distinct entities) or when the corporation is under-capitalized (i.e it doesn’t have nearly the assets it should given the kinds of risks it undertakes).  Both of these are potential issues for a one-person corporation or LLC.  Kent will have to be careful to observe the corporate formalities, avoid commingling personal and corporate assets, and maintain adequate capital in the company.

If Kent decides not to incorporate but instead operate a sole proprietorship or even act as an individual, then he won’t have this benefit.  He could be named in the suit as an individual and his assets would all be up for grabs, subject to the limitations of bankruptcy.  Incorporation has some upfront costs and requires some effort to maintain, but it beats being on the wrong end of a million dollar damage award.

III. Conclusion

So far there haven’t been a lot of details in the comics, but it’ll be interesting to see where this part of the Superman story goes.  Clark Kent’s work at the Daily Planet has been an iconic part of the character for decades.  “Clark Kent, mild-mannered blogger” doesn’t have quite the same ring to it.

Fun Law Blogs

Every year, the American Bar Association Journal ranks the top legal blogs in America, including a category called “For Fun.”  Law and the Multiverse was included in the group for the second year.  Although “fun lawyers” might sound like an oxymoron, this year’s list includes a bunch of great blogs, and we invite you to check out the others if you haven’t seen them before.  After the nominations were announced, the 2012 “For Fun” bloggers decided to interview each other.  Here, for your amusement, is the resulting group interview.

1.  What is your blog about? 

Law and The Multiverse (by James Daily and Ryan Davidson):  Examining comic book characters and stories from a legal perspective. Or alternatively, an excuse to be huge comic book nerds while hopefully teaching people something about the law.

Lowering the Bar (by Kevin Underhill):  The human condition (which currently remains at Threat Level Orange).  Actually, I guess it’s about whatever strikes me as funny, provided I can come up with some connection to the legal system, however remote.  Also, the first letter of each post spells out an important message to future generations, crafted in a complex code of my own devising. This is its true purpose.

The Namby Pamby:  Typically it is the day to day happenings in my law practice. Sometimes I branch out and talk about my favorite sports teams or some topic of the day, but mainly it is me relaying my missteps. And attempting to make them laugh while doing so.

Supreme Court Haiku Reporter (by Keith Jaasma): I take the most important legal issues of the day and completely trivialize them through bad poetry.

Allison Leotta:  I recap and reality-check Law & Order: SVU for what the show gets right and wrong, from my perspective as a former sex-crimes prosecutor.

ZombieLaw (by Joshua Warren): blogs about “zombies” in law and politics (from a cognitive linguistic perspective).


2.  What drew you to writing your blog?  (The big money, right?)

Lowering the Bar: I don’t think I was drawn so much as compelled.

Allison Leotta: Blogging about TV shows’ errors is way more constructive than throwing slippers at the TV.  Also, when my first novel, Law of Attraction, was published, Simon & Schuster told me I “needed a platform.”

S.Ct. Haiku: I had written several law review articles of 40 pages or more and was excited that 300 people downloaded them in a year.  So I thought “what’s the fewest number of words I could write and still call it writing.” Haiku!

Law and the Multiverse:  James started it on a lark after the idea was suggested by a friend over dinner.  Ryan came on board after James posted it to

Namby Pamby:  I started writing during my first year of law school eight years ago as a time waster and as an attempt to make people laugh. I still try to uphold these founding principles in my posts.

ZombieLaw:  I was in an academic group studying “creativity” as regards occupy wall street and #anonymous. Zombies sort of grew out of that.


3.  The ABA says you are “Fun.” And yet you are a lawyer.  Explain.

Law and The Multiverse: We make the law fun by heavily diluting it with comic books and pop culture.  It’s like how gin (kind of gross) and tonic water (definitely gross) combine to make delicious gin & tonic.

ZombieLaw:  Irony.

Allison Leotta:  Airbrushing.

Lowering the Bar: I think I wrote last year that I was proud of the honor despite the contention that being called the “most fun legal blog” was sort of like saying Moe was the smartest Stooge. I guess I would stand by that with the understanding that, just like the other Stooges were smarter than they looked on film (probably), lawyers are actually more “fun” than pop culture would suggest. Or at least there are a lot more lawyers who are in fact fun than non-lawyers might expect.

Namby Pamby:  The law is a lot of fun because of the crazy people that make up the practice. Judges, court personnel, clients, opposing counsel and coworkers all provide great fodder. I try not to take whatever I am doing too seriously, it’s not like I am doctor or something important.

S.Ct. Haiku: Even the ABA makes mistakes.


4.  What subject has sparked the most comments on your blog?

S.Ct. Haiku: The healthcare and immigration cases.  That, and people wondering why I don’t tell more fart jokes.

Law and The Multiverse: We once suggested that Peter Parker (aka Spider-Man) was committing fraud by selling pictures of himself as Spider-Man to a newspaper without telling the paper that he was both the photographer and the subject.  People were not happy about it.  It got about 50% more comments than the next highest post.

ZombieLaw: Putin’s zombie gun is pretty popular.

Allison Leotta: Whether men or women commit more sex crimes.  I did a (very scientific) analysis, and found that on SVU roughly 1/3 of the crimes are committed by women – while in real life, only a tiny fraction of sex offenders are female.  Whenever I mention this, someone posts an article about a female perp, and it sparks a big debate.

Namby Pamby:  Usually the things that I write about that are “funny” but things that I don’t find hysterical. It’s the weirdest thing when I find something to be the best I have ever written and I get no comments or twitter mentions but when I feel like I am forcing a post to try and find the funny, people think it is the greatest thing in the world. I try and stay non-partisan and non-controversial, however I did publish an endorsement for president and that got a lot of comments.

Lowering the Bar:  Well, I don’t have comments enabled, but I get lots of email. I’d guess that the most popular topic for emails has been my analyses of the important legal questions surrounding attempts to drive unusual things while intoxicated.


5.  Are there any topics you won’t write about?  If so, write about them here.

Allison Leotta:  Nothing is off-limits. Sodomy, pedophilia, necrophilia, bestiality, amputation fetishes, and vodka tampons have all been featured on SVU episodes, and thus they have all been discussed on my blog.  Thank God my husband understands what I do – otherwise, he might faint if he looked at my Google search history.

Lowering the Bar:  I would avoid making fun of clients, although, strangely, none of my firm’s clients have ever done anything for which they could be mocked or even criticized.  I have written two posts about a woman beating a man with his own prosthetic leg, but I’d avoid a similar story if it were the other way around.  I think everything else is basically fair game.

Namby Pamby:  I try and be safe for all audiences . There are times when I want to clobber someone or sometopic over the head, but that’s not the focus of my blog. When I get inspired (read: pissed off enough) to write something in this arena, I typically submit it to Constitutional Daily and get it published that way. Or I just yell about a lot at home (my fiancée loves this…not.)

ZombieLaw: I do try to stay on topic, but “zombies” are everywhere and law/politics touches everything so pretty much all topics are fair game.  Some recent big zombie stories that I know I have intentionally ignored are the zombie stripper calendar, the walking dead infographic and also I mostly ignored the HALO military training until Senator Coburn reported on it.

S.Ct. Haiku: I try not to focus on the death penalty part of death penalty cases.  Instead I focus on exciting issues like jurisdiction and waiver.

Law and The Multiverse: We really shy away from real-world legal issues and stick to fiction.  We don’t want to say “this guy who dresses up like a superhero and tries to fight crime is probably breaking the law himself” and then get slapped with a defamation suit.  Nor do we want to weigh in on the IP disputes between comic book publishers, writers, and artists.  No matter what side you take you lose; either the publishers hate you or the writers, artists, and fans do.

6.  In a cage match, who would win: Antonin Scalia or Elena Kagan, and why?

Lowering the Bar: Scalia, because if he got in trouble he could just tag his team member, Clarence “Silent Thunder” Thomas, who would be lurking quietly unnoticed in a corner of the cage waiting for just such an opportunity.

ZombieLaw: While surely they both have tiger blood, neither is winning.  It would be one hell of a cock fight but both birds would end up dead with no clear victory.  It’d be like two schizophrenics arguing about who ate the last donut (there’s a hole in this joke).

Law and The Multiverse: Scalia has the height advantage (5’7″ to 5’3″, according to IMDB of all places), and we’re going to guess he has the weight advantage as well. Scalia is a Sicilian who grew up in New Jersey. Kagan grew up on the Upper West Side. We don’t want to stereotype, but let’s face it: Scalia is going to fight dirty. On the other hand, Kagan is 24 years younger.  We’ll call it a draw.

Namby Pamby:  Scalia. He’d drop a verbal tonguelashing and then a vicious cross to knock her out. Besides, her comely appearance doesn’t give the impression of an experienced pugilist.

Allison Leotta: To paraphrase from The Princess Bride, “Never get involved in a land war in Asia or go against a Sicilian when death is on the line.”

S.Ct. Haiku: Scalia.  He appears to have a lower center of gravity.


7.  Where do you find the time to do this?

S.Ct. Haiku: Between the cushions of my sofa.

ZombieLaw: I don’t. I was never here. The zombie did it.

Lowering the Bar: Actually, since I became a partner I’ve been able to force associates to write all my posts for me, so that’s no problem. One of them is actually writing these answers right now. Well, one is dictating, one is typing, and one is giving me a pedicure.

Allison Leotta: While my kids are sleeping (like many working moms).

Namby Pamby:  Usually when I am venting about something that happened at the office. Instead of having a meltdown, I typically just work on a post instead. [Note: No clients have been billed in the making of my jokes]

Law and The Multiverse: James’s day job is in academia.  Ryan may or may not have a time machine.


8.  Now that you’ve hit the big time as a blogger, do you still practice law?  Are you any good at it?

S.Ct. Haiku: I’m confident that I’m America’s Finest Lawyer With A Blog Written Almost Entirely In Haiku.TM

Law and The Multiverse: We’ve been very lucky with a book deal and some other arrangements, but not quite “quit your day job” lucky.  Our clients tell us we’re good lawyers, but like all celebrities we have very fragile egos, so they may just be protecting us.

Namby Pamby:  Yes, I do. I don’t know if I am any good at it. There are so many ups and downs in the practice that I just savor the wins when they come and try to forget the losses as soon as they occur. Besides, I don’t do advertising on my blog to generate revenue and I don’t write for other sites on a pay per post basis any longer. I write for me first and foremost. It’s a creative outlet that I can funnel frustration, inappropriate humor and those “I should have said this” moments.  But if someone wants to start paying me big bucks for writing something, I am definitely listening. (And yes, I’d love to write a book someday)

Allison Leotta: I resigned from the U.S. Attorney’s Office in D.C. last June.  Now I just write thrillers … about practicing law.

Lowering the Bar:  Personally I think I’m pretty good at the writing part of it. Whether I “still practice law” depends on who you ask.

ZombieLaw: Yes and yes.  Mostly criminal defense but also other unique individual representation.


9. If you could meet one lawyer, living or dead, and clean his or her bathroom, who would it be?

Law and The Multiverse: Justice Kagan seems like she keeps a tidy house.

ZombieLaw: When you say “clean his or her bathroom,” is that a euphemism?  If not, it should be.  Either way, I guess I would clean Justice Cardozo’s bathroom and try to see how much of that consideration he found before breakfast had come out before lunch.

Lowering the Bar:  Young Abraham Lincoln, because I could then argue that he did not in fact have an actual “bathroom,” just an outhouse, and I therefore had no obligation to clean it. Take that, Lincoln! Clean your own outhouse! You haven’t done jack yet!  Or Old Abraham Lincoln, who by that time had become a saint and therefore very unlikely to generate any waste products.

Allison Leotta:  Sure, Abraham Lincoln — or, better yet, Daniel Day-Lewis playing Abraham Lincoln.

S.Ct. Haiku: I will not be tricked into cleaning anyone else’s bathroom, thank you very much.

Namby Pamby: Jackie Chiles. I don’t really have a good reason, but I figure a fictional lawyer is usually a safe bet.


10. Do you have any advice for people who are thinking about leaving their day jobs and going into writing?

Lowering the Bar: They should all immediately do it, thus opening up more legal jobs for others who will then have an income sufficient to buy all the books we will be cranking out. Everybody wins.

S.Ct. Haiku: If you make ten times as much as I do writing, you’ll have zero dollars.

ZombieLaw: If you were able to get a day job then you should probably try to keep it.  Of course you feel like a zombie… but the cure for zombie condition is not quitting your job – it’s laughter, a pinch of salt and puppies.

Prime-Time Crime:   Keep your day job for now; publishing is an unpredictable place these days. Write first thing in the morning, when you’re fresh.  Write without inhibitions, even if you think the prose is terrible at first.  You can’t be a perfectionist about your first draft.  A lot of writing is editing – let yourself put the words out there so you have something to edit later.

Namby Pamby: Do this only if you are truly committed to it. I find that when I have to force myself to write (like if for a deadline, I get blocked and unfunny). I do this as a diversion and for self-entertainment. I am not sure if I could handle having to put food on the table and pay the mortgage solely by spewing witticisms.

Law and The Multiverse:  Get the money up front.

The Hobbit Contract, Part 3

Our first two posts about the contract in The Hobbit movie brought us through some boilerplate and into the substance of the contract, namely some of Bilbo’s obligations and the nature of the Adventure.  From a legal standpoint we’ve discussed integration clauses, amendments, severability clauses, consideration, defined terms, contract interpretation, and liability waivers.  And we’ve still only begun!

I. More Waivers

The next section is yet another waiver

Burglar holds harmless and without blame in perpetuity the Company and its successors for any notoriety, incarceration, or proceedings brought against, in regard to or as a result of the adventure or any activities related thereto.

Also includes slander, libel, loss of face or of social standing in country of Burglar’s origin.

Remedies shall similarly not be sought for any unlooked-for misfortune befalling Burglar’s home during his absence.

The smaller text is written in the margin or otherwise in smaller writing.  There’s a lot of that kind of writing in the margins that we’ll be referring to as we go through the contract.  For the most part the size of the print doesn’t matter, but there are some contract terms, such as warranty disclaimers, that must be printed conspicuously, which usually means large print or all caps.  UCC §§ 2-316(2),  1-201(b)(10).  At common law we suspect the rules were even looser.

This set of waivers is not particularly objectionable.  As discussed in the prior post, the actual scope of the waiver may not be as broad as the language suggests.  For example, if the Dwarves intentionally burned down Bag End, this waiver would not prevent Bilbo from suing them for the damage.

It may bear mentioning that the slander waiver only protects the Company.  Bilbo could still sue the actual slanderer, of course.  Traditionally this has been easier to do in England than the United States.  At common law, for example, truth was no defense to criminal libel (also known as seditious libel).  Garrison v. Louisiana, 379 U.S. 64, 67-68 (1964).

II. Payment

Now we come to some terms of the contract actually described in the book:

Cash on delivery, up to and not exceeding one fourteenth of the total profit [if any]. Not including any of the gross paid to other parties in lieu of royalties or help and provisions given or loaned.

All traveling expenses guaranteed in any event. But refer to attached and appended conditions, clauses and riders regarding any Return Journey. ‘Traveling expenses’ shall be understood to mean basic fare as seen fit by the Company. ‘Luxury’ catering or accomodation over and above this standard shall be enjoyed only at Burglar’s considerable [but justifiable] expense.

Funeral expenses to be defrayed by us or our representatives if occasion arises and the matter is not otherwise arranged for. Basic funeral to ‘commoner’ or peasant standard is allowed for only. Lavish ceremonies and jewelled (sic) or gilded coffins not provided. Plain pine box is the normal standard. Transport of any remains, in whole or in part, back to the country of Burglar’s origin is not included.

Most of these clauses are fairly straightforward.  In terms of the plot, the more important clause is the one regarding profits.  Already we see part of the definition: it excludes royalties paid to others and anything given or loaned to Bilbo counts against it.  In the margins we see some more relevant terms:

Burglar acknowledges and agrees that each item of the Company’s valuables, goods, money or merchandise which he recovers from the Lonely Mountain [the ‘Recovered Goods’] during the term of his engagement with the Company, shall remain the Property of the Company at all times, and in all respects, without limitation.

Furthermore, the company shall retain any and all Recovered Goods until such a time as a full and final reckoning can be made, from which the Total Profits can then be established.  Then, and only then, will the Burglar’s fourteenth share be calculated and decided.

So Bilbo can’t just pick up some treasure that he likes and decide that it’s part of (or the entirety of) his share.  Instead, as provided by yet another clause, he will be paid in gold or its equivalent, in correct weight or of good quality, respectively.  So Bilbo really can’t lay claim to any particular article of treasure.  Indeed, the Dwarves could conceivably purchase gold from somewhere else and pay him with that.  He’s not entitled to any part of the treasure itself as such.

III. Spoilers and Conclusion

In this section we’ll discuss how these contract terms could affect the plot.  The book has been out for about eighty years, but nonetheless, spoiler alert:

Continue reading

Jefferson Exchange Interview

Ryan and I were interviewed on Jefferson Exchange on Jefferson Public Radio.  If you missed the show you can listen online here.  Thanks to host Geoffrey Riley for a great interview!

The Hobbit Contract, Part 2

In the first part of our analysis of the contract in The Hobbit movie, we discussed several of its more standard clauses, including the entire agreement clauses and severability clause.  Today we’re going to get into the substance of the contract.

I. The Adventure and Consideration

Two clauses describe Bilbo’s primary obligations:

I, the undersigned, [referred to hereinafter as Burglar,] agree to travel to the Lonely Mountain, path to be determined by Thorin Oakenshield, who has a right to alter the course of the journey at his so choosing, without prior notification and/or liability for accident or injury incurred.

The aforementioned journey and subsequent extraction from the Lonely Mountain of any and all goods, valuables and chattels [which activities are described collectively herein as the Adventure] shall proceed in a timely manner and with all due care and consideration as seen fit by said Thorin Oakenshield and companions, numbering thirteen more or less, to wit, the Company.

All contracts require some consideration from all parties to the contract.  Consideration, in the contract sense, means a bargained-for performance or promise.  Restatement (Second) of Contracts § 71(1).  Basically, this is something of value given or promised as part of the agreement.  This can be anything that the parties agree is valuable; the classic example is a single peppercorn.  Whitney v. Stearns, 16 Me. 394, 397 (1839).

Here, Bilbo is promising to go with the Company to the Lonely Mountain and performing various services there, including extracting the treasure, plus a few more services we’ll get to later.  In turn, as we shall see, the Company promises to pay Bilbo one fourteenth of the profits, plus a few other obligations.  Thus we have “a promise for a promise,” otherwise known as a bilateral contract.

II. Defined Terms and Illegal Contracts

There are some other details to notice in these clauses.  One is the use of defined terms (e.g. “referred to hereinafter as Burglar”).  The parties to a contract may define terms however they wish, even in ways that contradict the definition used in statutes or regulations.  Restatement (Second) of Contracts § 201(1) and comment c.

The objective of interpretation in the general law of contracts is to carry out the understanding of the parties rather than to impose obligations on them contrary to their understanding: “the courts do not make a contract for the parties.” Ordinarily, therefore, the mutual understanding of the parties prevails even where the contractual term has been defined differently by statute or administrative regulation.

Id. comment c.  This is important in this case because of the use of the defined term “Burglar.”  As some commenters on the last post noted, contracts to do something illegal are ordinarily unenforceable (e.g. collecting on an illegal gambling debt).  But here what matters is not that the parties used the word ‘burglar’ but rather what sort of meaning they assigned to that defined term.  As we shall see, the contract doesn’t require Bilbo to do anything illegal (or at least not obviously illegal), and so the contract will probably not fail for use of a questionable term.

III. Contract Interpretation and the Limits of Liability Waivers

These two clauses also pose something of a contradiction.  On the one hand we see the first of many liability waivers: “[Thorin has] a right to alter the course of the journey at his so choosing, without prior notification and/or liability for accident or injury incurred.”  But on the other hand we see this explicit obligation of care: “[the Adventure] shall proceed in a timely manner and with all due care and consideration.”

Ordinarily “due care and consideration” signifies taking on liability for negligence, so this conflicts with the earlier liability waiver.  Perhaps the two can be reconciled by the phrase “as seen fit by said Thorin Oakenshield and companions.”  Thorin and Co. could always claim that the amount of care and consideration they saw fit was extremely minimal, though that runs the risk of making the clause meaningless, which courts usually don’t like to do.  “As a general proposition, whenever possible, the law favors reconciliation of clauses within a contract which appear contradictory.”  City of Columbia v. Paul N. Howard Co., 707 F.2d 338, 340 (8th Cir. 1983).  Taken together with the numerous other waivers and disclaimers, I think a court would probably conclude that Thorin & Co. were not taking on any particular duty of care.  “A writing is interpreted as a whole.”  Restatement (Second) of Contracts § 202(2).

Waivers or disclaimers of liability are an important part of many contracts.  These can include waivers of a product warranty (seen all the time in software license agreements) and waivers for liability due to negligence (often required before doing something dangerous like skydiving).  But there are limits to liability waivers.  While a party to a contract can ordinarily waive liability for negligence (although not in every jurisdiction), one cannot waive liability for gross negligence, recklessness, or intentional misconduct.  So the numerous (and sweeping!) waivers and disclaimers may not be as effective as they appear at first glance.

IV. Conclusion

We aren’t quite done with the substance of the contract, but before we get there we have some more boilerplate to cover.  There is a lot of standard language in this contract, and this is similar to real-world contracts, particularly form contracts, which tend to have a lot of standardized language surrounding a handful of fill-in-the-blanks.  So far the Dwarves haven’t committed any unsalvageable drafting errors or done anything that might jeopardize the validity of the contract.  We’ll see if that keeps up!