Sunday, June 6, 2010

Albert H. Kritzer, 1928-2010

My recent posts about the status of the CISG and CUECIC and the possible CISG implications of the McDonald's glassware recall sent me, as is almost always the case when I want to refresh my recollection of CISG text or catch up on recent cases and commentary, to the Pace Law School Institute of International Commercial Law's expansive, free, and always helpful online CISG Database.

Revisiting the site yesterday, I read the sad news that Albert H. Kritzer, the Institute's founder and godfather of the CISG Database, passed away June 1, while in Egypt to receive the 2010 Arab Conference for Commercial and Maritime Law Career Achievement Award. Pace Law School's notice, including comments from Dean Michelle Simon, is available here.

I met Al Kritzer only once, and briefly, in person, during a break in a conference at Pace Law School that his colleague Jim Fishman hosted commemorating Wood v. Lucy, Lady Duff-Gordon. However, Al and I corresponded (mostly by e-mail) and he was kind enough to introduce me (again, via e-mail) to Joseph Lookofsky (another CISG luminary) and to introduce much of the domestic and international CISG community (via the CISG Database) to my work analyzing the then-entire corpus of published U.S. CISG case law in the chapter on the CISG that I comprehensively revised and greatly expanded a few years ago for Howard O. Hunter's Modern Law of Contracts. Al subsequently invited me to contribute substantive case commentaries to the CISG Database, in which I have been largely remiss for a variety of reasons. I hope that his successor will allow me to honor Al's invitation -- and his life's work.

Saturday, June 5, 2010

Would you like some cadmium with your soft drink?

Yesterday, the Consumer Product Safety Commission (CPSC), in conjunction with fast-food giant McDonald’s®, voluntarily recalled about 12 million Shrek Forever After™ collectible drinking glasses sold or awaiting sale at McDonald’s® locations throughout the U.S. after someone in Representative Jackie Speier's (D-CA) office alerted the CPSC that the movie-character illustrations on the glasses contained cadmium, prolonged exposure to which may pose a serious long-term health risk.

Millville, NJ-based Durand Glass Manufacturing Co. (DGMC), a subsidiary of Arques, France-based Arc International, manufactured the movie-themed glasses, which another Arc International subsidiary, Millville-based Arc International North America, distributed exclusively to McDonald's. McDonald's locations nationwide sold the glasses in May and early June 2010.

McDonald's web site addresses the recall through a series of FAQs (and answers). (For the benefit of those with short attention spans, every answer to which the statement would be germane includes the statement "the CPSC has said the glassware is not toxic.") Arc International deployed a press release. Representative Speier posted a statement on her web site, which also includes a link to a Los Angeles Times article about the recall. Only DreamWorks™ appears to be mum on the subject -- so far, at least. (Perhaps the Shrek-iverse's creators didn't retain all of the product licensing-rights like George Lucas did, not so long ago and not so far away, with the original Star Wars™ trilogy or they made McDonald's pay a non-refundable lump sum to market the glassware.) Rumors of a replacement glass featuring an image of McDonald's CEO Jim Skinner that transmogrifies into a Shrek-alike when filled with any non-Coca-Cola® brand soft or sport drink appear to be completely unfounded.

All fun aside, why is a commercial law blog interested in allegedly cadmium-contaminated glassware products introduced into the stream of commerce without any warning about or disclaimer regarding the possibility that they might contain an alleged carcinogen?

If this were a tort law or products liability blog, we might opine about the inevitable class-action product liability lawsuit against some combination of McDonald's, Arc International, Arc International North America, Durand Glass Manufacturing Co., the as-yet undisclosed supplier(s) of the cadmium-contaminated paint or other ingredient Durand used to commemorate Shrek™, Fiona™, Donkey™, and Puss in Boots™ (okay, Puss is probably not trademarked, given that the character's name dates from the late Seventeenth century, but we want to minimize our exposure to IP liability because most of us teach at public universities and neither we nor our employers can afford, in the current fiscal climate, to defend any infringement claim that survives a Rule 12(b)(6) motion) on the glassware (and, perhaps, DreamWorks -- for making a movie about which McDonald's predicted sufficient interest that it undertook to procure the offending glassware for resale).

If this were a civil procedure blog we might weigh whether the terms and conditions (no doubt, conveniently located somewhere on the Internet) purportedly governing McDonald's sale of the collectible glassware unconscionably compel non-class arbitration (assuming facts not in evidence) in light of the Supreme Court's recent grant of certiorari in AT&T Mobility LLC v. Concepcion, No. 09-893 (cert. granted May 24, 2010), about which my friend and UNLV colleague Jean Sternlight and my friend and ContractsProf Blog colleague Meredith Miller have recently blogged here and here, respectively.

If this were a consumer law blog, we might wring our hands or cluck our tongues at yet another clear example of Corporate America's crass exploitation of our children and squeeze-the-last-penny sellers who outsource production of low-priced, lower-cost consumer goods to Third World outposts like ... New Jersey. (Just kidding, Jay.)

But, again, what's the commercial law angle on collectible glassware manufactured for and sold to McDonald's for resale to McDonald's retail customers?

It should go without saying that the most interesting legal issues arising out of this scenario involve (1) what express and implied UCC Article 2 warranties each seller in the chain from DGMC (or DGMC's ingredient supplier) to McDonald's made to anyone who purchased or used the glassware; (2) to what extent, if any, each seller in that chain may have disclaimed some or all of its warranty liability, limited the remedies available to the buyer, user, or other person affected by the glassware's use, or both; (3) whether one or more warranty-making sellers breached one or more warranties to one or more buyer, user, or other person affected by the glassware's use; and (4) what remedies Article 2 affords any person to whom any seller is liable for breach of warranty.

For those wanting to add some international spice to the mix, the CBC reports here that the recall has spread to include all Canadian McDonald's restaurants. Information from the Associated Press and Reuters, reported here, indicates that recalling the glassware sent to Canadian McDonald's restaurants raises the total number of recalled glasses to 13.4 million. Both the U.S. and Canada are parties to the U.N. Convention on Contracts for the International Sale of Goods (CISG). To the extent that the Canadian McDonald's restaurants purchased their Shrek Forever After™ collectible glassware from New Jersey-based DGMC or New Jersey-based Arc International North America, that transaction constituted a sale of specially-manufactured goods (CISG art. 3(1)), purchased for resale, rather than personal, family, or household use (CISG art. 2(a)), by a buyer located in one CISG "contracting state" from a seller located in a different "contracting state" (CISG art. 1(1)(a)). Therefore, unless the Canadian McDonald's buyers and New Jersey-based DGMC or New Jersey-based Arc International North America effectively opted out of the CISG (CISG art. 6), any breach of warranty claim the Canadian buyers might have (CISG art. 35), the extent to which any U.S. seller disclaimed any warranty or limited its liability for breaching any warranty (CISG arts. 6 & 35), and the available remedies (CISG arts. 45-52 & 74-78), will be matters for the CISG to resolve.

Thursday, June 3, 2010

Meanwhile, on the UNCITRAL Front

Having recently updated you on the status of the various official UCC revisions and amendments (nothing new to report on that front, by the way), I thought it would be worthwhile to take UNCITRAL's pulse and see how the U.N. Conventions on Contracts for the International Sale of Goods (CISG) and on the Use of Electronic Communications in International Contracting (CUECIC) are faring.

Both strike me as profoundly relevant to anyone teaching Contracts, Sales (or a UCC survey course that includes sales), International Sales (or an International Commercial Transactions survey course), or -- at least in the CUECIC's case -- an Electronic Commerce course. The CUECIC's fortunes might also shed some light on the likelihood that the ALI Principles of the Law of Software Contracts will influence contracting practices, contracting disputes, and the evolution of contract law outside the U.S.


The U.N. first approved the CISG 30 years ago, and it had gathered the requisite ten ratifications and accessions to take effect ("enter into force" to use the U.N.'s terminology) on January 1, 1988. As of June 1, 2010, when Albania's accession entered into force, the CISG was in effect in 74 countries, including Australia, Canada, China, France, Germany, Italy, Japan, Mexico, the Russian Federation and ten of the other fourteen former Soviet republics, Singapore, and South Korea. Great Britain and most of OPEC's member-states are notable non-signatories.


The U.N. General Assembly adopted the CUECIC in November 2005. Despite the International Chamber of Commerce's endorsement, only 18 countries have signed the convention, and none has acceded to, accepted, approved, ratified, or succeeded to it. Consequently, it is not yet in effect anywhere. Moreover, nearly 2-1/2 years have passed since Honduras became the most recent signatory in January 2008. The United States and most of its major trading partners -- excluding China, the Russian Federation, Singapore, and South Korea -- have not signed the CUECIC.

Tuesday, June 1, 2010

FED Introduces Credit Card Agreement Tool

After a relative lull in payment card regulation news over the past few months, cards are back front and center. The big news, of course, is that the financial reform bill passed by the Senate would limit debit card interchange rates and provide merchants more flexibility in steering customers toward various means of payment. More on that as the final legislation takes shape.
Today, I wanted to highlight the FED's credit card agreement tool. A little publicized provision of the Credit Card Holders Bill of Rights required the FED to establish a website providing ready access to the credit card agreements of major issuers. In theory, such a tool would permit inexpensive comparison shopping. In reality, the website is of limited utility to consumers. The agreements are long and complex, making comparison shopping difficult for everyone and probably impossible for non-lawyers. In addition, very small card issuers are not included.
Still, the tool may be of use to consumer groups who could review the offerings and make recommendations to consumers in language that would be easier to understand.