August 23, 2008

First Class

Posted by Gordon Smith

What do you do in the first class of the year?

My first class session is on Monday, and I have assigned pages 1-7 of the casebook. This allows me to introduce the law of agency and to deal with one of the most interesting issues in that field: formation.

Our vehicle for exploring that issue is a new case entitled U.S. v. Cyberheat, decided by a federal district court in Arizona. We chose this case in part because we thought that the students would be able to relate to the facts. Who hasn't received spam?

We also like the idea that the case involves agency law embedded in a federal regulatory scheme. We see this again later in the chapter with Castillo v. Case Farms of Ohio, Inc. Cases like these subtly convey the message that this body of law is hugely important.

A third reason we like the case is that it involves the "outward-looking consequences" of agency relationships. In other words, this case positions the putative agency relationship between Cyberheat and its affiliates as a counterpoint to regular people who just want to read their email without spam. Many of the students who enroll in the basic business associations course are brand new to business, but most have had a year of law school and understand the threat of liability. The fact that liability here is dependent on agency law gives the topic some salience.

All of that is directed at conveying the importance of agency law, but one of my main goals on the first day of the course is to introduce some of the big themes of the course. Arguably the most important theme -- one that too often is left unexpressed -- is that we are dealing with "business associations." Though we often treat these associations as people, our task it to open that black box and peer inside. What goes on inside an association? How does that affect the association's interactions with others?

Finally, I want my course to have a transactional spin, so on the first day of class I am going to ask the teams of students to represent Cyberheat. Based on what you have read in the case, could you modify the affiliate agreement to be more certain that you would avoid a finding of agency?

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