1. Coercion Contracts – Prof. Merges March 8, 2011

2. Where are we? 1.¢ 2.Formation – Offer/acceptance 3.“Policing” (Defenses; invalidation)  Capacity  Equity, Duress  Fraud  Unconscionability 4.Remedies

3. Alaska PackersAss’n v. Domenico

10. Facts Procedural History

11. Alaska Packers What is admiralty? –What is a libelant?

12. Consideration issue What was the consideration for the K signed by the individual seamen?

13. Alaska Packers Sailors

14. The modification

15. Alaska Packers Sailors K1: SF Contract Work hard, do what the boss says $50 plus piece rate

16. Alaska Packers Sailors K2: Alaska Contract Work hard, do what the boss says $100 plus piece rate

17. Alaska Packers Sailors K2: Alaska Contract Work hard, do what the boss says $100 plus piece rate Is there anything new or extra coming from the sailors?

18. What were the circumstances of the renegotiation? Where did it take place? What were the bargaining positions of the parties?

19. Quick review: Transaction Cost Economics

20. Oliver Williamson, Markets and Hierarchies (1975); The Economic Institutions of Capitalism (1985)

21. Oliver Williamson, UC Berkeley

22. “Asset Specificity” When “sunk cost” investments lock one party into a contract, make it difficult to recoup investment if the other party does not perform

23. Paul Jaskow: “Markets for Power”

25. “Objective” price escalation clauses; long-term contracts “Take or pay” clauses

27. A Property Rights Example Private parcels

28. Could the sailors ever win? Mid. P. 328 See 2000 Utah L Rev 185 “A Fish Story”

29. Schwartzreich, p. 332 Novation: rescission and then re- contracting Disfavored: see why?

30. § 89. Modification Of Executory Contract A promise modifying a duty under a contract not fully performed on either side is binding (a) if the modification is fair and equitable in view of circumstances not anticipated by the parties when the contract was made; or (b) to the extent provided by statute; or (c) to the extent that justice requires enforcement in view of material change of position in reliance on the promise.

31. Watson and Son v. Carrig

38. Facts Procedural History

39. Was the hardrock foreseeable? Stretching rescission For good or ill?