Charles Fried is best known (among scholars of contract law) for his “contract as promise” thesis, while Seana Shiffrin is widely known for her influential 2007 Harvard Law Review article on the divergence between contract and promise. We too are very much interested in the morality of promising — especially the problem of “illegal agreements” — and we now wish to pose a simple question to Professors Fried and Shiffrin: why doesn’t criminal law apply to breaches of contract? That is, if breaching a contract (or breaking a promise generally) is such a terrible or immoral act, then one might expect to see some overlap between criminal law and contract law, just like we see between some crimes and some intentional torts, like fraud, assault and battery, theft (conversion), false imprisonment, etc.
Our simple question to Professors Fried and Shiffrin (and their kind) is not an exercise in idle speculation. After all, some illegal agreements — such as certain restraints of trade and other monopolistic conspiracies — might generate not only civil but also criminal liability. Here, however, our focus is not on illegal agreements like price fixing or market allocation (or drug sales). Instead, our focus is on run-of-the-mill or garden-variety breaches of contract, for which only “civil” remedies are available, such as (i) the payment of monetary compensation or, in some rare cases, (ii) the remedy of specific performance, but never the criminal sanctions of imprisonment or regulatory fines. In brief, bare breaches of contract are beyond the scope of criminal law. Why?
Image Credit: Audrey Calhoun
The old-school flag wins!
“It wasn’t about two kids in a dorm room anymore.” –Chapter 25 of The Accidental Billionaires.
In our next class, we will revisit two critical events in the founding of Facebook: (i) Eduardo Saverin’s fateful decision to freeze Facebook’s bank account in July of 2004, and (ii) Facebook’s subsequent decision to become a Delaware corporation after venture capitalist Peter Thiel made a $500,000 angel investment in the social network startup. We will also address two important business law questions relating to these critical events:
In addition, we will re-enact another crucial scene from the movie “The Social Network” — the scene in which Mark chastises Eduardo for freezing the bank account — so we will need two volunteers for this activity: one to play the role of Facebook CEO Mark Zuckerberg; the other to play the role of Facebook CFO Eduardo Saverin.
More here, via kottke. Addendum (4/26): Not April Fools: Apple’s revenues decline for the first time in 13 years. Blame Tim Cook and the pointless Apple Watch? Via The Verge, Ben Popper writes:
Apple posted a year-over-year decline in revenue today, the first time the company’s failed to grow its business in 13 years. It brought in $50.6 billion in revenue for the second quarter of 2016, and $10.5 billion in profits. That compares with $58 billion in revenue and $13.6 billion in profits during this period last year, a drop of 13 percent for the revenue. *** Apple isn’t doing badly, it is still one of the most valuable and profitable companies in the world. In India, iPhone sales were up over 50 percent compared with 2015. But it hasn’t found a new blockbuster product to pick up the slack as iPhone sales have slowed in many parts of the globe. *** The Apple Watch was the last major category of new hardware the company introduced. It quickly became a billion dollar business, but so far hasn’t shown the kind of mainstream appeal that made the iPod, MacBook, and iPhone such massive sellers. The details of Watch sales are still lumped in with “Other Products,” and that was the worst performing piece of Apple’s business this quarter.
Here is a real-time example of people “voting with their feet.” We lived in Puerto Rico from 1993 and 2009, and we can tell you that Puerto Ricans are severely overtaxed by their government, regardless of which political party is in power, and since citizens of Puerto Rico are also citizens of the United States, they are free to move to the U.S. without a passport. By the way, the full report about the decline in Puerto Rico’s population is here, via the Pew Research Center. In any case, what is the optimal level of population growth on a small Caribbean island (our home from 1993 to 2009)?
Available at Animi Causa — hat tip: Andrew Liszewski, via Gizmodo.
Hat tip: our friends at Deviant Art
Hat tip: Kyle Anderson, via Nerdist.
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