Учебный год 22-23 / Binding Promises - The Late 20th-Century Reformation of Contract Law-1

49.John A. Sebert, Jr., “Punitive and Nonpecuniary Damages in Actions Based upon Contract: Toward Achieving the Objective of Full Compensation,” 33 UCLA L. Rev. 1565 (1986).

50.Id. at 1615.

51.Michelle A. Harrington, “Punitive Damages for Breach of Contract: A Core Sample from the Decisions of the Last Ten Years,” 42 Ark. L. Rev. 31, 62–77, 79, 80, 86–88 (1989).

52.Id. at 77–81.

53.Seaman’s Direct Buying Serv., Inc. v. Standard Oil Co., 686 P.2d 1158, 1167 (Cal. 1984).

54.Richard A. Posner, Economic Analysis of the Law 82–93 (2d ed. 1977); Robert L. Birmingham, “Breach of Contract, Damages Measures and Economic Efficiency,” 24 Rutgers L. Rev. 273 (1970); Charles J. Goetz & Robert E. Scott, “Liquidated Damages, Penalties and the Just Compensation Principle: Some Notes on an Enforcement Model and a Theory of Efficient Breach,” 77 Colum. L. Rev. 554 (1977); Thomas S. Ulen, “The Efficiency of Specific Performance: Toward a Unified Theory of Contract Remedies,” 83 Mich. L. Rev. 341 (1984). For a history and critique of the “theory of efficient breach,” see Ian R. Macneil, “Efficient Breach of Contract: Circles in the Sky,” 68 Va. L. Rev. 947 (1982).

55.Careau & Co. v. Security Pac. Business Credit, Inc., 272 Cal. Rptr. 387, 404–06 (Cal. Ct. App. 1990).

56.R. Kent Livesay, “Leveling the Playing Field of Insurance Agreements in Texas: Adopting Comparative Bad Faith as an Affirmative Defense Based on the Insured’s Misconduct,” 24 Tex. Tech L. Rev. 1201 (1993); Ronald S. Range, “The ‘Set Up’ Defense and the Comparative Fault Defense: New Wrinkles in Bad Faith Claims against Insurers,” 45 Wash. & Lee L. Rev. 321 (1988); Patrick E. Shipstead

&Scott S. Thomas, “Comparative and Reverse Bad Faith: Insured’s Breach of Implied Covenant of Good Faith and Fair Dealing as Affirmative Defense or Counterclaim,” 23 Tort & Ins. L.J. 215 (1987).

57.See Ryan, supra note 30, at 20.

58.Oki Am., Inc. v. Microtech Int’l, Inc., 872 F.2d 312, 315 (9th Cir. 1989) (Kozinski, J., concurring).

59.John C. McCarthy, Punitive Damages in Bad Faith Cases § 2.26 (4th ed. 1987 & Supp. 1992) (honest belief is question of fact); Keeton et al., supra note 6, at 880 (judge determines reasonable basis in malicious prosecution).

60.Tan Jay Int’l, Ltd. v. Canadian Indem. Co., 243 Cal. Rptr. 907 (Cal. Ct. App. 1988); Joseph Ryan, Jr., “The Bad Faith Blast,” 28 For the Defense 20 (Mar. 1986).

61.See, e.g., Comunale v. Traders & Gen. Ins. Co., 328 P.2d 198 (Cal. 1958); Crisci v. Security Ins. Co., 426 P.2d 173 (Cal. 1967); Gruenberg v. Aetna Ins. Co., 510 P.2d 1032 (Cal. 1973).

62.E.g., Velli v. Rutgers Casualty Ins. Co., 608 A.2d 431 (N.J. Super. Ct. App. Div. 1992); Boykin v. Parker 134 S.E.2d 531 (Ga. Ct. App. 1963).

63.Valentino v. Elliott Sav-On Gas, Inc., 247 Cal. Rptr. 483, 485 (Cal. Ct. App. 1988); Caldwell Banker Commercial Group, Inc. v. Hegge, 770 P.2d 1297, 1299 (Colo. Ct. App. 1988).

64.Deborah R. Hensler, “Simple Stories, Hard Facts,” Paper presented at the American Bar Association Annual Meeting (Aug. 1992).

65.Thomas D. Rowe, Jr., “Predicting the Effects of Attorney Fee Shifting,” 47

Law & Contemp. Probs. 139, 148 (1984).

66.Id. at 155.

67.John J. Donohue III, “Opting for the British Rule, or If Posner and Shavell Can’t Remember the Coase Theorem, Who Will?,” 104 Harv. L. Rev. 1093, 1094 (1991).

68.See generally Note, “State Attorney Fee Shifting Statutes: Are We Quietly Repealing the American Rule?,” 47 Law & Contemp. Probs. 321 (1984). For a detailed analysis of this proposition in civil rights fee-shifting statutes, see Dan B. Dobbs, “Awarding Attorney Fees against Adversaries: Introducing the Problem,” 1986 Duke L.J. 435 (1986).

69.Edward A. Snyder & James W. Hughes, “The English Rule for Allocating Legal Costs: Evidence Confronts Theory,” 6 J.L. Econ. & Org. 345, 377–78 (1990), and cases cited therein.

70.Note, “State Attorney Fee Shifting Statutes,” supra note 68, at 323, 330–42.

71.Id. at 345–46.

72.See id. at 347. The publication, originally titled Federal Attorney Fee Shifting Awards Reporter, ceased publication in August 1990. During its last few years, it reported bimonthly.

73.Gregory G. Sarno, Annotation, “Recoverability of Compensatory Damages for Mental Anguish or Emotional Distress for Breach of Service Contract,” 54 A.L.R. 4th 901 (1987), lists decisions from eighteen states supporting the rule stated in the text. In addition, in Beck v. Farmers Ins. Exch., 701 P.2d 795, 798–801 (Utah 1985), a case the annotator evidently missed, the Utah Supreme Court held that although an insurer’s failure promptly to pay a reasonable first-party claim does not constitute a tort under Utah law, it is a breach of contract; the insured may recover damages for emotional distress if the breach proximately caused them and they were a reasonably foreseeable result of the insurer’s breach of contract.

74.Douglas J. Whaley, “Paying for the Agony: Recovering for Emotional Distress Damages in Contract Actions,” 26 Suffolk U. L. Rev. 935 (1992) (arguing that the traditional contract foreseeability and certainty requirements constitute sufficient standards for emotional distress awards).

75.Restatement (Second) of Contracts § 351 cmt. a (1981).

76.See supra note 52 (citing authorities for the doctrine of “efficient breach”).

77.See, e.g., Egan v. Mutual of Omaha Ins. Co., 620 P.2d 141, 146 (Cal.

1979).

78.“Developments in the Law: Class Actions,” 89 Harv. L. Rev. 1318, 1604 (1976) (entire law review issue dedicated to topic).

79.Philip Marcus, Antitrust Law and Practice § 401 (1980).

80.E.g., Cal. Civ. Code § 1916-3 (West 1935); 41 Pa. Cons. Stat. Ann. §§ 501, 502 (1974); Wis. Stat. Ann. § 138.05 (West 1981).

81.See, e.g., Pac. Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 19–20 (1991) (instructing jury to consider the character of the defendant’s wrongful conduct and the necessity of preventing similar wrong).

82.Dobbs, supra note 4, § 3.9 (evidence of a defendant’s wealth is admissible as a factor in determining the amount of the punitive damages award). See also Sandoval v. Southern Cal. Enters., 219 P.2d 928, 936 (Cal. 1950); Wetherbee v. United

Ins. Co., 71 Cal. Rptr. 764 (Cal. Ct. App. 1968), aff’d on second appeal, 95 Cal. Rptr. 678 (Cal. Ct. App. 1971) (compensatory damages of $1,050 and punitive damages of $200,000 were justified as being less than a week’s after-tax income of the defendant). The California Supreme Court used the net worth and annual profits of the defendant as a guideline for determining whether a punitive damage award was excessive in Neal v. Farmers Ins. Exch., 582 P.2d 980, 985 (Cal. 1978), and the defendant’s annual profits in Egan, 620 P.2d at 149.

83.Dobbs, supra note 4, § 3.9; see also Richard L. Blatt et al., Punitive Damages: A State-by-State Guide to Law and Practice § 1.4 (1991).

84.Kenneth S. Abraham & John C. Jeffries, Jr., “Punitive Damages and the Rule of Law: The Role of Defendant’s Wealth,” 18 J. Legal Stud. 415, 417 n.3 (1989).

85.See supra note 80.

86.Wayne R. LaFave & Austin W. Scott, Jr., Criminal Law 568 (2d ed. 1986).

87.Gregory P. Joseph, Civil RICO: A Definitive Guide 2–3 (1992).

88.Restatement (Second) of Torts § 909 (1979), following, almost word for word, Restatement (Second) of Agency § 217C (1958). See, e.g., Egan, 620 P.2d at 147–48.

89.Michael Rustad, “In Defense of Punitive Damages in Products Liability: Testing Tort Anecdotes with Empirical Data,” 78 Iowa L. Rev. 1, 8 (1992).

90.Mark Peterson et al., Rand Corp., Punitive Damages: Empirical Findings

4–5, 27, 56 (1987). In this study, the authors surveyed attorneys who were parties to cases where punitive damages were requested and the cases were tried by juries. A “usable response” was one where the case was closed and at least one of the attorneys involved returned the survey and indicated the final payment. Between 1960 and 1984, nearly 17,000 jury trials were held in San Francisco and Cook counties. The authors sent a follow-up survey to cover the years 1979 to 1984; the statistic provided in the text is from that follow-up survey. There were sisty-eight usable responses in the follow-up survey, ten of which indicated a punitive damages award of over $500,000 initially. Nine of these awards were subsequently reduced.

91.James Fleming, Jr. & Geoffrey C. Hazard, Jr., Civil Procedure § 8.1 (1985).

92.E.g., Theodore Sedgwick, Measure of Damages § 352 (9th ed. 1912).

93.Tan Jay Int’l, Ltd. v. Canadian Indem. Co., 243 Cal. Rptr. 907 (Cal. Ct. App. 1988); Joseph Ryan, Jr., “The Bad Faith Blast,” 28 For the Defense 20 (Mar. 1986).

94.Rustad, supra note 87, at 9 n.28.

95.Rowlett v. Anheuser-Busch, Inc. 832 F.2d 194 (1st Cir. 1987) (advance

sheet).

96.Id. at 207 (official reporter).

97.See, e.g., Egan v. Mutual of Omaha Ins. Co., 620 P.2d 141, 149–56 (Clark and Richardson, JJ., concurring in part and dissenting in part).

98.Richard J. Mahoney & Stephen E. Littlejohn, “Innovation on Trial: Punitive Damages versus New Products,” 246 Science 1395, 1395–99 (Dec. 1989); Peter W. Huber, “Putting Punitive Damages into Perspective,” 20 Manhattan Inst. for Pol’y Res. (Mar. 26, 1990).

99.Linda Williams, “Perspective on the Drug Firm Merger: Creating ‘Critical Mass,’ ” L.A. Times, July 29, 1989, at D1.

Chapter 6

1.Robert Braucher & Arthur E. Sutherland, Commercial Transactions: Selected Statutes x-xi (1964 ed.); see also Ziporah B. Wiseman, “The Limits of Vision: Karl Llewellyn and the Merchant Rules,” 100 Harv. L. Rev. 465, 473–75 (1987); see generally William L. Twining, Karl Llewellyn and the Realist Movement 322–23 (1973).

2.National Conference of Commissioners on Uniform State Laws, Report and Second Draft of the Revised Uniform Sales Act 3–6 (1941) [hereinafter Conference of Commissioners].

3.Id. at 15–17; Karl N. Llewellyn, “Across Sales on Horseback,” 52 Harv. L. Rev. 725 (1939); Karl N. Llewellyn, “The First Struggle to Unhorse Sales,” 52

Harv. L. Rev. 873 (1939).

4.James J. White & Robert S. Summers, Uniform Commercial Code § 5-1 (3d ed. 1988).

5.Conference of Commissioners, supra note 2, at 15–16, 18, 21, 24–26.

6.1 Restatement (Second) of Contracts at v (1981).

7.Compare, e.g., id. § 203 with U.C.C. § 1-205 (1983), Restatement (Second) of Contracts § 322 (1981) with U.C.C. § 2-210(2) (1983), and Restatement (Second) of Contracts § 208 (1981) with U.C.C. § 2-302 (unconscionability) (1983).

8.See, e.g., Restatement (Second) of Contracts § 89 (1981).

9.See, e.g., id. § 54.

10.Despite its title, Daniel A. Murray, “Under the Spreading Analogy of Article 2 of the Uniform Commercial Code,” 39 Fordham L. Rev. 447 (1971), does not contradict the statement in the text. White & Summers, supra note 4, § 4 n.18, lists a number of decisions using a Code provision by analogy, but none of them did this to change a common law rule.

11.National Conference of Commissioners on Uniform State Laws, Report and Second Draft of the Revised Uniform Sales Act (1941), reprinted in 1 Elizabeth S. Kelly, Uniform Commercial Code Drafts 269, 302 (1984) [hereinafter Kelly].

12.Memorandum from Karl N. Llewellyn to the Executive Committee on Scope and Program, NCC Section of Uniform Commercial Acts (circa 1940), in Twining, supra note 1, app. E, at 524–29; Karl N. Llewellyn, “On Warranty of Quality, and Society” (pt. 2), 37 Colum. L. Rev. 341, 381 (1937).

13.Karl N. Llewellyn, The Common Law Tradition: Deciding Appeals 35– 45 (1960); Karl N. Llewellyn, “The Theory of Rules” ch. 4 (circa 1939) (unpublished manuscript), reproduced in William L. Twining, The Karl Llewellyn Papers 81–96 (1968); Twining, supra note 1, at 309, 321–23; Wiseman, supra note 1, at 498–501.

14.Llewellyn, The Common Law Tradition, supra note 13, at 26.

15.E.g., U.C.C. § 2-308 (1983) (place of delivery).

16.E.g., id. § 2-305 (price).

17.Id. § 2-708.

18.Kelly, supra note 11, at 309.

19.U.C.C. § 1-102.

20.Vitauts M. Gulbis, Annotation, “Modern Status of Rule That Acceptance of

Check Purporting to be Final Settlement of Disputed Amount Constitutes Accord and Satisfaction,” 42 A.L.R. 4th 12 (1985).

21.Vitauts M. Gulbis, Annotation, “Application of U.C.C. § 1-207 to Avoid Discharge of Disputed Claim upon Qualified Acceptance of Check Tendered as Payment in Full,” 37 A.L.R. 4th 358 (1985).

22.Robert Braucher, “The Legislative History of the Uniform Commercial Code,” 58 Colum. L. Rev. 798, 800–01 (1958); Wiseman, supra note 1, at 477–78.

23.Soia Mentschikoff, “The Uniform Commercial Code: An Experiment in Democracy in Drafting,” 36 A.B.A. J. 419 (1950). The members of the advisory groups are listed on the cover of each of the drafts of the U.C.C., beginning with the draft of 1944.

24.One commentator counted over 700 legislative amendments to the U.C.C. by 1967, almost all of which had been made in the original process of enactment, although almost half of these were to Article 9. William A. Schnader, “Short History of the Preparation and Enactment of the Uniform Commercial Code,” 22 U. Miami L. Rev. 1, 10 (1967). This may seem like a large number, but it is not. It averages only seven per state outside of Article 9, which leaves less than one for each of the remaining eight articles. A better indication of the uniformity of Article 2 is that law professors in every state routinely teach it from nationally distributed copies of the U.C.C., even though most of their students will practice within the state.

25.U.C.C. Section 2-302 reads as follows:

§2-302. Unconscionable Contract or Clause.

(1)If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.

(2)When it is claimed or appears to the court that the contact or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.

26.The leading critique of this kind was Arthur Allen Leff, “Unconscionability and the Code—the Emperor’s New Clause,” 115 U. Pa. L. Rev. 485, 537–38 (1967). See also E. Allen Farnsworth, Farnsworth on Contracts § 4.28, at 310 (2d ed. 1990) (making the same observation as in text and citing other examples from the time).

27.Farnsworth, supra note 26, § 4.28.

28.Williams v. Walker-Thomas Furniture Co., 350 F.2d 445 (D.C. Cir. 1965).

29.Id. at 449.

30.Karl N. Llewellyn, Book Review, 52 Harv. L. Rev. 700 (1939).

31.Llewellyn, The Common Law Tradition, supra note 13, at 370.

32.See, e.g., People v. Two Wheel Corp., 525 N.E.2d 692 (N.Y. 1988); Frank’s Maintenance & Eng’g v. C.A. Roberts Co., 408 N.E.2d 403, (Ill. App. Ct. 1980). See also Jonathan A. Eddy, “On the ‘Essential’ Purposes of Limited Remedies: The Metaphysics of U.C.C. Section 2–719(2),” 65 Cal. L. Rev. 28, 41–42 n.56 (1977); White & Summers, supra note 4, § 4.7, at 200.

33.Walker-Thomas, 350 F.2d at 449.

34.Jane P. Mallor, “Unconscionability in Contracts between Merchants,” 40 Sw. L.J. 1065 (1986) (results not determined by character of party); supra chapter 2, note 3 (40 percent of claims involve business consumers).

35.For example, although the Iowa Supreme Court’s first decision using reasonable explanations also rested on unconscionability, see C & J Fertilizer, Inc. v. Allied Mut. Ins. Co., 227 N.W.2d 169 (Iowa 1975), its next decision using reasonable expectations did not mention unconscionability, see Farm Bureau Mut. Ins. Co.

v.Sandbulte, 302 N.W.2d 104 (Iowa 1981), and none of its decisions using reasonable expectations have mentioned unconscionability since.

36.Farnsworth, supra note 26, § 3.13, at 229.

37.Id. § 3.21.

38.U.C.C. Section 2-207 reads as follows:

§2-207 Additional Terms in Acceptance or Confirmation.

(1)A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.

(2)The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:

(a)the offer expressly limits acceptance to the terms of the offer;

(b)they materially alter it; or

(c)notification of objection to them has already been given or is given within a reasonable time after notice of them is received.

(3)Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this Act.

39.White & Summers, supra note 4, § 1-2.

40.Daitom, Inc. v. Pennwalt Corp., 741 F.2d 1569 (10th Cir. 1984). See also Westinghouse Elec. Corp. v. Nielsons, Inc., 647 F. Supp. 896 (D. Colo. 1986); Egan Machinery Co. v. Mobil Chem. Co., 660 F. Supp. 35 (D. Conn. 1986) (following Daitom). The Daitom court cited Southern Idaho Pipe & Steel Co. v. Cal-Cut Pipe

&Supply Co., 567 P.2d 1246 (Idaho 1977), cert. denied, 434 U.S. 1056 (1977), for the approach it took. A number of courts have taken the approach, citing Southern Idaho rather than Daitom.

41.Charles L. Knapp, “Enforcing the Contract to Bargain,” 44 N.Y.U. L. Rev. 673 (1969).

42.Id. at 685.

43.Lon L. Fuller & Melvin A. Eisenberg, Basic Contract Law 491–526 (5th ed. 1990). See also W. E. Shipley, Annotation, “Validity and Enforceability of Contract which Expressly Leaves Open for Future Agreement or Negotiation the Terms of Payment for Property,” 68 A.L.R. 2d 1221 (1959); Daniel E. Feld, Annotation, “Validity and Enforceability of Provision for Renewal of Lease at Rental to Be Fixed by

Subsequent Agreement of Parties,” 58 A.L.R. 3d 500 (1974); Farnsworth, supra note 26, § 3.29.

44.“Permanent Editorial Board for the Uniform Commercial Code,” PEB Study Group for the Uniform Commercial Code Article 2: Preliminary Report (1990). The proposals for amendment are based on the ideas of Professor John E. Murray, Jr. See John E. Murray, Jr., “A Proposed Revision of Section 2-207 of the UCC,” 6 J.L. & Com. 337 (1986). See also John E. Murray, Jr., “The Chaos of the ‘Battle of the Forms’: Solutions,” 39 Vand. L. Rev. 1307 (1986).

45.U.C.C. Section 2-316 reads as follows:

§2-316. Exclusion or Modification of Warranties.

[T]o exclude or modify the implied warranty of merchantability or any part of it the language must mention merchantability and . . . be conspicuous, and to exclude or modify any implied warranty of fitness the exclusion must be by a writing and conspicuous.

Although Section 2-316 also allows sellers to make disclaimers in other ways, the courts have generally read the clear-and-conspicuous requirement into all of them. White & Summers, supra note 4, §12-5; Charles L. Knapp & Nathan M. Crystal,

Problems in Contract Law: Cases and Materials 1147 (3d ed. 1993). 46. U.C.C. Section 2-719 states:

§2-719. Contractual Modification or Limitation of Remedy.

. . . .

(2)Where circumstances cause an exclusive or limited remedy to fail of its essential purpose, remedy may be had as provided in this Act.

(3)Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not.

47.White & Summers, supra note 4, § 12-5.

48.Id. §§ 12-8 to 12-12.

49.Id. § 12-12.

50.White & Summers, supra note 4, § 12-5.

51.Melody Home Mfg. Co. v. Barnes, 741 S.W.2d 349 (Tex. 1987). See discussion supra chapter 4, “Services Generally.”

52.Cate v. Dover Corp., 790 S.W.2d 559 (Tex. 1990).

53.See discussion supra chapter 4, “Services Generally.”

54.U.C.C. § 2-316(2) explicitly permits a seller to disclaim an implied warranty of fitness for a particular purpose, and of course, the courts have generally followed the section in this respect. White & Summers, supra note 4, §§ 12-5 & 12-6.

Chapter 7

1.C & J Fertilizer, Inc. v. Allied Mut. Ins. Co., 227 N.W.2d 169 (Iowa 1975).

2.Comunale v. Traders and Gen. Ins. Co., 328 P.2d 198 (Cal. 1958).

3.W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 92 (5th ed. 1984).

4.See discussion supra chapter 4, “Analysis.”

5.Farm Bureau Mut. Ins. Co. v. Sandbulte, 302 N.W.2d 104 (Iowa 1981).

6.Daitom, Inc. v. Pennwalt Corp., 741 F.2d 1569 (10th Cir. 1984). See also discussion supra chapter 3.

7.Lochner v. New York, 198 U.S. 45, 53 (1905).

8.Cate v. Dover Corp., 790 S.W.2d 559 (Tex. 1990).

9.Melody Home Mfg. Co. v. Barnes, 741 S.W.2d 349, 351 (Tex. 1987).

10.Keeton et al., supra note 3, at 679–81.

11.Seaman’s Direct Buying Serv., Inc. v. Standard Oil Co., 686 P.2d 1158 (Cal.

1984).

12.Hibschman Pontiac, Inc. v. Batchelor, 362 N.E.2d 845 (Ind. 1977).

13.U.C.C. § 1-102, Official Comment 1. See discussion supra chapter 6, “The Reasons for Creating Article 2.”

14.Southern Pac. Co. v. Jensen, 244 U.S. 205, 222 (1916) (Holmes, J., dissent-

ing).

15.Erie R.R. v. Tompkins, 304 U.S. 64 (1938).

16.I did not want to interrupt the argument in the text in order to point out still another instance of bad lawmaking in the section. “Exclusive” is either arbitrary or redundant. If a writing is the complete expression of the parties’ agreement, it must also be the only expression of it, unless the drafters’ intention was to exclude from the operation of the parol evidence rule writings that the parties’ had partially duplicated in other writings, and there is no apparent reason for such an exclusion.

17.It would unduly prolong the argument in the text to try to describe the exceptions, but they might include the provisions that deal just with property law and the Statute of Frauds provisions. The latter have been embodied in statutes since the English Parliament enacted An Act for Prevention of Frauds and Perjuries in 1677.

18.Erie R.R., supra note 15.

19.David A. Rice, “Lessons about the Realities of Contract for U.C.C. Article 2 Revision and a Future Software Contract Statute,” 2 Rutgers Comp. & Tech. L.J. 499 (1992).

20.Aetna Life Ins. Co. v. Lavoie, 475 U.S. 813 (1986); Bankers Life & Casualty Co. v. Crenshaw, 486 U.S. 71 (1988); Browning-Ferris Indus., Inc. v. Kelco Disposal, Inc. 492 U.S. 257 (1989); Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1 (1991); TXO Prod. Corp. v. Alliance Resources Corp., 113 S. Ct. 2711 (1993); Honda Motor Co., Ltd. v. Olberg, 62 Law Week 4627 (1994). For a well-reasoned analysis of these decisions and some of the issues they raise, see Timothy S. Lykowski, “Tightening the Constitutional Noose around Punitive Damages Challenges: TXO, What It Means, and Suggestions That Address Remaining Concerns,” 68 So. Cal. L. Rev. 203 (1994).

21.TXO Prod. Corp. v. Alliance Resources Corp., 113 S. Ct. 2711 (1993).

22.Honda Motor Co., Ltd. v. Oberg, supra note 20.

23.28 U.S.C. 1332(c)(1) (“For the purposes of this section . . . a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business, except that in any direct action against the insurer of a policy or contract of liability insurance, whether incorporated or unincorporated, to which action the insured is not joined as a partydefendant, such insurer shall be deemed a citizen of the State of which the insured

is a citizen, as well as of any State by which the insurer has been incorporated and of the state where it has its principal place of business”).

24.Charles Alan Wright, Law of Federal Courts § 107 (4th ed. 1983).

25.Many state legislatures have enacted statutes restricting punitive damages, but they do not seem to have been motivated by the U.S. Supreme Court’s decisions. See Michael Rustad, “In Defense of Punitive Damages in Products Liability: Testing Tort Anecdotes with Empirical Data,” 78 Iowa L. Rev. 1, 6–9 (1992).

26.The U.S. district court and court of appeals used the U.S. Supreme Court decisions on punitive damages to review the state law of Arkansas in Robertson Oil Co. v. Phillips Petroleum Co., 61 Law Week 2344 (8th Cir. 1994) (en banc), but they found it constitutional and thus did not decline to follow it.

27.Stephen G. Breyer & Richard B. Stewart, Administrative Law and Regulatory Policy: Problems, Text, and Cases 708–814 (3d ed. 1992).

28.Walters v. National Assoc. of Radiation Survivors, 473 U.S. 305 (1985).

29.National Assoc. of Radiation Survivors v. Derwinski, 994 F.2d 583 (9th Cir. 1992), cert. denied sub nom. National Assoc. of Radiation Survivors v. Brown, 114 S. Ct. 734 (1993).

30.John A. Appleman, Insurance Law and Practice § 8885 (Supp. 1994).