Open Quantity Contracts: Beyond Good Faith

Business concerns sometimes enter into sales agreements that do not specify a particular quantity to be sold.  This might be helpful, for instance, if a manufacturer would like to secure a commitment from a supplier to meet the manufacturer’s needs, but it is not certain what the needs will be.  These business relationships do not always work out over the long term, however, and litigation often results.  In these cases, courts have struggled to establish clear, consistent standards with respect to the validity and terms of open quantity contracts.  Many of these cases turn on the application of amorphous “good faith” standards, raising concerns about unpredictability and the possibility that the courts are effectively imposing requirements on the parties that they never actually contemplated. 

Bravely seeking to bring some coherence and clarity to this difficult area of the law, Shelley Smith has a helpful new article on SSRN entitled “A New Approach to the Identification and Enforcement of Open Quantity Contracts: Reforming the Law of Exclusivity and Good Faith.”  She describes her three-part reform agenda as follows: 

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Federalism and Criminal Law

mapThis is the fourth in a series of posts reviewing last term’s criminal cases in the United States Supreme Court and previewing the new term.

Habeas corpus presents the classic federalism problem in criminal law: how can federal courts overturn flawed state-court judgments while maintaining due respect for state sovereignty and the autonomy of state criminal-justice systems?  But federalism issues can also appear in criminal cases that originate in federal court.  In its new term, the Supreme Court has at least two such cases.

First, in United States v. Johnson, the Court will consider whether a battery conviction in Florida state court counts as a violent crime for purposes of the Armed Career Criminal Act, a federal sentencing statute.   (I have posted several times about ACCA in the past year, most recently here.)  Although “battery” normally evokes images of serious violent crime, Florida law defines battery so that it includes any nonconsensual touching, regardless of risk of injury.  For that reason, the Florida Supreme Court has already ruled that battery is not a violent crime for state-law purposes.  Thus, in Johnson, the United States Supreme Court is confronted with a question of whether it should defer to state-court characterizations of state crimes for purposes of implementing a federal statute.

Second, in United States v. Weyrauch, the Court must decide whether a state official can be convicted of honest-services fraud based on a conflict of interest that did not violate state law.  (This is one of three new cases in which the Court will consider various dimensions of the federal crime of honest-services fraud.) 

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Lenity and Mandatory Minimums

This is the third in a series of posts reviewing last term’s criminal cases in the Supreme Court and previewing the new term.

Three of last term’s criminal cases dealt with mandatory minimum sentencing statutes, as do two of the new term’s.  The frequency with which these cases reach the Supreme Court underscores how ubiquitous mandatory minimums have become in federal criminal practice — a truly unfortunate state of affairs, given how clumsily these statutes are drafted and how badly they depart from sound sentencing policy.  In any event, an interesting question lurking in the background of many of these cases is whether the rule of lenity should be applied in the same manner as it would be in a case involving a conventional criminal statute.

The rule of lenity indicates that ambiguous criminal statutes should be interpreted in favor of the defendant.  As I suggested in my previous post, the Court does not seem especially consistent in its application of lenity and often adopts the government’s interpretation of statutes that strike me as clearly ambiguous (if that is not an oxymoron).  A good example from last term is United States v. Hayes, 129 S. Ct. 1079 (2009).  I agree with the conclusion of Chief Justice Roberts’s dissenting opinion: “This is a textbook case for application of the rule of lenity.”

In comparison with other criminal statutes, I have not detected any difference in the Court’s application of lenity to mandatory minimums.  Last term, though, Justice Breyer offered an interesting argument that the rule of lenity has “special force in the context of mandatory minimum provisions.” 

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