Luddites Unite – Artificial Intelligence Will Replace Us

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We’ve been thinking about artificial intelligence applications and how they might change, even transform, the way we do our business. Then, we heard an interesting story on public radio. It was about a Southern California manufacturer of sex dolls who was introducing models incorporating artificial intelligence. For reasons quite obvious, the story didn’t get very deep into the details, but we learned that these new models were designed to figure out what their owners wanted and to respond appropriately.

We thought this application to be quite amazing in that here was a business way ahead of our own. Artificial intelligence is being used to read medical images with better results than even experienced radiologists achieve. It is being used to screen job applicants, much, much faster than humans doing so and with more satisfactory outcomes. Artificial intelligence is at the heart of visual recognition, allowing machines to replace people in manufacturing operations. It is used to write newspaper articles, such as those reporting sporting events. The list could go on and on. But, what it won’t include is negotiating agreements such as leases. That is, not yet.

Agreements such as leases are not zero-sum games. Though the parties exchange things of equal value, one needs to ask, “Value to whom?” Basically, when someone gets an item of value to them worth, say, $100, the other person may be giving up something worth only $60 to them. Someone may have two widgets and only need one. The duplicate widget isn’t very valuable to that person. A second person may need a widget and have two gizmos, but only need one. In each case, one widget or gizmo has a utility value of $100, but a duplicate one has a utility value of $60. Thus, if the parties trade widget for gizmo, each gives up $60 of value and gets $100 of value in return. That trade creates $200 of value out of $120 of value – a good deal for each trader. [Read more…]

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Again: Say What You Mean; Mean What You Say!

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It’s been a while since we used these words: “Say What You Mean; Mean What You Say!” Well, we’re back (and, no, this isn’t going to be a dinosaur’s story.) Today, we report on an unremarkable, unpublished January 22, 2018 Order out of a United States District Court in Illinois. That’s what brings us back to those words.

Before we reveal exactly what we saw in that Order, we’ll start with a simple thought: How many times have you seen the following formulation?

If Grantor begins such repair work or to performs such obligations, but fails to promptly and diligently prosecute the same to completion within thirty (30) days of so beginning, … [Ed. – Note the underlined words]

Well, that drives us crazy. Obviously, the parties meant “within thirty (30) days after.” Yes, “after” is obvious in our example, but every time you encounter this formulation, think about whether, in the case in front of you, you really meant to say that the action could happen within the 30 days BEFORE. [Read more…]

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Pie-Eyed Romanticism And Negotiating Agreements

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Do you believe in levitation? Can a table really rise on its own, without trickery? Is it possible? Yes. Is it probable? No.

A table, regardless of the material used to construct it, is a collection of atoms, arranged in molecules, etc. Briefly stated, atoms vibrate. They vibrate in all directions. No single atom has enough energy to move the table, and the directions in which the countless atoms in a table vibrate cancel each other out but for a proportionately very small number without enough oomph to move anything. Basically, their movement is random. But, it is possible that at any one moment, all of those atoms or at least a meaningful number will be moving upward at the same time and the table will lift off the ground. Possible, but not probable. Ruminations suggests that no reader stay up all night watching a table to see it rise on its own. [Read more…]

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Waiving Non-Waiver Provisions By Waiving Such Provisions (Again)

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We’ve written about the legal concept of “waiver” too many times to warrant furnishing any links to earlier blog postings. To sum it up succinctly, we’ll start with an example of a pretty familiar provision found in most agreements such as leases and mortgages (to keep us within the real property family). It reads as follows:

All waivers must be in writing and signed by the waiving party. A party’s failure to enforce any provisions of this [lease] will not be a waiver and will not estop that party from enforcing that provision or any other provision of this [lease] in the future.

If an English-speaking visitor arrived from outer space and, after completing its abduction of one or more of the world’s inhabitants, read this, it would think there could be no waiver if it were not given in writing. It would be wrong. Likewise, native-born earthlings should always have some doubt as to whether to rely solely on the ability to read. Context (and established law) matter.

Generally speaking, at least under United States jurisprudence, the Texas Supreme Court, in a clarifying (for Texas) May 12, 2017 decision, wrote the following: [Read more…]

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How Can I Get Out Of My Oral Agreement?

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It’s not true that oral contracts aren’t worth the paper they’re printed on. In fact, for all but some small classes of agreements, oral ones are no different than ones printed on the finest of rag papers. Certainly, they are more difficult to prove their very existence, let alone their detailed provisions. That’s a good reason they should be memorialized in a written version. We’ve written, “memorialized” because, in many cases that’s the real function the writing performs. The parties will have already agreed to the terms of their intended transaction. At that stage, they have a contract – a binding agreement. Writing it down doesn’t make it any more “official,” just a lot easier to follow and a lot easier to explain the “deal” to others, attorneys included.

So as not to mislead some readers, we aren’t dismissing the “Statute of Frauds,” something most (perhaps all) states adopted based on a 1677 English law with the self-explanatory name: “An Act for the Prevention of Frauds and Perjuries.” While various states have different lists of what kind of agreements need to be in writing lest one party or the other be able to disavow their agreement just because it was oral (and for no other disabling reason), traditionally most agreements involving conveyances of real property fall or fell (depending on where the property is located) under these statutes. [Read more…]

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Whose Deal Is It Anyway – Ours Or Our Client’s?

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In a perfect world, wouldn’t everyone’s lease or other agreement comments on behalf of the same party be identical (grammar and spelling aside)? Shouldn’t everyone working on behalf of a tenant, landlord, borrower, lender or the like know exactly what her or his “client” wants to see in the agreement? We suppose so, but a perfect world is still pretty far away. And, it isn’t a lack of knowledge (perfect knowledge?) that would result in different agreements for the same client and circumstances if negotiation were done by different people. There are a lot of factors. One factor is that for a lot of good reasons that sound much like “time and money” each negotiator would have her or his own impression as to what that particular client wants or needs. Another is that, for many parts of an agreement, it doesn’t matter – “six of one; a half dozen of another. But, the one that stands out to Ruminations is that those doing the negotiating will actually be substituting their own judgment for that of the party they represent. [Read more…]

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Landlords, Beware The Naked Assignment

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It’s been a while since we’ve pointed out that, using the words employed by a California court in 2001, “[a] lease of real property is both a conveyance of an estate in land (a leasehold) and a contract. It gives rise to two sets of rights and obligations – those arising by virtue of the transfer of an estate in land to the tenant (privity of estate), and those existing by virtue of the parties’ express agreements in the lease (privity of contract).”

Should anyone care? Yes. And, here’s an example that should concern some landlords and benefit some tenants. It deals with a lease assignment.

We’ll lift the words used by two other California courts to explain two different paths by which an assignee takes on liability as the “tenant.” The first is from 1983 and the second from 1937: [Read more…]

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Is There A Limit To Waiving A Non-Waiver Clause?

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When we first wrote about the loophole in non-waiver clauses that recognizes parties can orally agree to waive such clauses even one that explicitly say that there can be no oral waivers, we got some notes expressing incredulity. After the reality set in, the notes started asking whether there were any limits to this “loophole.” We at Ruminations didn’t know how to answer until we came across a May 12, 2017 decision from the Texas Supreme Court in a case where one of the parties has this name: Boo Nathanial Bradberry. The decision can be seen by clicking: HERE. It ruled there was a limit and its reasoning makes pretty good sense. [Read more…]

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