Contracts...kill me now

[ellewood$]

Working on this practice exam.  Granted I still have 10 days before the final, but I am completely lost.  Any help at all would be greatly appreciated.

Melanie Safka once was a highly popular singer-songwriter. It has, however, been several decades
since she has had a new hit song. Nonetheless, she has never entirely resigned herself to the “oldies”
concert circuit, and continues to write and record new material, hoping that the lightning will
strike again. In the fall of 2009, she was approached by Muzak Town about doing a recording for
them to distribute. They represented that they had developed a new distribution technique that
would guarantee her wide exposure with a possibility of large sales if her songs were well received
by the audience. Muzak Town’s representative explained to Melanie that their experience with other
performers allowed them to predict that she should sell at least 100,000 compact disks per year,
and could probably sell many more.

Melanie wanted to know more about what Muzak Town was planning to do with her music before
she signed. She learned that Muzak Town had a contract to provide music for a popular chain of
coffee shops named Galactica. Muzak Town not only provided music feeds to all Galactica shops,
but also displayed disks of the music being played in the coffee shops. Customers could purchase
the disks if they chose to do so. Some recordings thereby sold (nationally) 1,000,000 or more copies,
while other recordings sold few or none, with a wide range in between.

When Muzak Town first approached Galactica, their proposal was a novel idea, not having been
tried before. The decline of sales of recorded music had left many recording artists and recording
companies in dire economic straights, although some artists found that they could make substantial
sums by charging outrageous prices for live tours. For most artists and recording companies, however, the outlook was very bleak. Muzak Town calculate that it could manufacture the necessary
disks and sell them well below the traditional selling price for compact disks and still make a handsome profit, particularly relying on the “captive audience” nature of its new distribution channel to generate demand for the disks. It had quickly recruited several dozen artists before talking with
Melanie and had begun its operations in the Galactica shops about fourteen months before the first
discussions with Melanie. Sales of disks by other artists in fact were slower than Muzak Town had
expected, so Muzak Town, which had first set its prices at $9.95 per disk, and late cut them to
$8.95 per disk, and later still to $7.95 per disk, but only a few disks sold well. None of this was disclosed to Melanie; neither did Muzak Town disclose its plan to begin selling disks at different prices keyed to the popularity of the artists.

Melanie decided to sign with Muzik Town. Melanie agreed and signed Muzak Town’s standard
form contract and began to write and record songs for Muzak Town to distribute. Melanie invested
about $100,000 of her own money in creating masters that she delivered at frequent intervals to
Muzak Town. The key terms of the contract between Melanie and Muzak Town were:

1. The party of the first part to this contract is Muzak Town, Inc.

2. The party of the second part is Melanie Safka

3. The party of the second part will not distribute or sell songs through any other means for
a period of four (4) years. The party of the first part will have exclusive distribution and
sales rights to all songs recorded by the party of the second part for one (1) year after the
song is made available to party of the first part. After the aforesaid period of one (1) year, the party of the second part will be free to distribute a song covered by this agreement
through any means the party of the second part shall choose.

4. The party of the first part will pay to the party of the second part a fee of $2,000 per
month for the duration of this contract, payable on the first of every month. The party of
the first part additionally will pay the party of the second part a royalty of 10% of the
sales price for each compact disk of one her songs sold by party of the first part through
any outlet. Royalties shall be paid to the party of the second part on the 15th day after the
end of each quarter of the calendar year.

5. The party of the second part warrants to the party of the first part that all songs made
available by the party of the second part shall be original compositions free of any copyright
claim or other claim by any other person. Should any other person make a copyright
or other claim against the use of any songs provided by the party of the second part,
the party of the second part shall hold the party of the first part free of any damages that
might result from such claim.

6. This contract comprises the entire agreement of the parties, and other representation or
agreement between the parties is hereby declared null and void.

7. In the event that the party of the second part shall violate any term of this agreement, the
party of the second part shall pay, as liquidate damages and not as a penalty, the sum of
$100,000 per day for each violation for so long as it shall continue.

8. This contract shall enter into effect on January 1, 2010. 

The parties began to perform their responsibilities under the contract, with Muzak Town paying the promised fee of $2,000 per month on a timely basis, and remitting the royalties due on April 15.

Unfortunately, sales of Melanie’s songs were few, only about 400 disks having been sold in the
first quarter. Sales by other performers were also few. Muzak Town, while negotiating its contract
with Galactica, had presented projections of sales that demonstrated an income stream in excess of
$1,000,000 per month nationally to Galactica. Galactica therefore made space in its coffee shops
for displays of the disks on sale, eliminating from one to three tables in each shop, depending on its
size. This meant an estimated loss of $500,000 per month in its national income from beverage
sales. The actual income generated nationally by the disk sales for Galactica was around $60,000
per month. Disappointed with the outcome of its contract with Muzak Town, Galactica, cancelled
its contract with Muzak Town on April 20, 2010. Muzak Town then notified Melanie and other performers that it was cancelling its contract with them, and would remit to them any remaining royalties still due for sales.

The contract between Muzak Town, Inc. and Galactica, Inc. reads, in relevant part:

1. Muzak Town, Inc. shall have the exclusive right to provide recorded music for playing in
Galactica shops. Muzak Town, Inc. shall also make available to Galactica shops compact
disks of such recorded music for sale in Galactica shops. Muzak Town shall have the exclusive
right to select the music to be played and displayed and shall also have the exclusive
right to determine the price at which the music disks shall be sold.

2. Galactica, Inc. shall provide suitable sound systems in their shops for the playing of the
recorded music provided by Muzak Town, Inc., and also shall provide suitable spaces in
the shops for the display and sale of compact disks of the music provided by Muzak
Town, Inc. Galactica, Inc. also will not allow any other person to display or sell music
disks in any of its shops.

3. Galactica, Inc. shall pay to Muzak Town, Inc., the sum of $75,000 per shop per month,
payable on the 10th day of each month for the recorded music played in each shop. Galactica,
Inc. shall also account to Muzak Town, Inc. for the proceeds of any and all sales of
compact disks provided by Muzak Town, Inc., less a fee of 20% of the sales price of any
disk sold by Muzak Town in a Galactica shop. The fee shall be retained by Galactica, Inc.
as compensation for its services in displaying and selling the music disks.

4. This contract shall enter into force on September 1, 2008, and shall continue for the period
of five years from that date.

5. Muzak Town, Inc. warrants to Galactica, Inc. that all record music and disks provided to
Galactica, Inc. shall be free of any copyright claim or other claim by any other person.
Should any other person make a copyright or other claim against the use of any music under
this contract, Muzak Town, Inc. shall hold Galactica, Inc. free of any damages that
might result from such claim.

6. This contract comprises the entire agreement of the parties, and other representation or
agreement between the parties is hereby declared null and void.

I
What rights, if any, does Melanie Safka have against any party? If she has rights, what remedy
would she be entitled to, if any? Remember to consider any possible defenses any party might have
as well as the legal bases for any claims on behalf of Melanie.

II
What rights, if any, does Muzak Town have against any party? If it has rights, what remedy would
it be entitled to, if any? Remember to consider any possible defenses any party might have as well
as the legal bases for any claims on behalf of Muzak Town.

III
What rights, if any, does Galactica have against any party? If it has rights, what remedy would it be
entitled to, if any? Remember to consider any possble defenses any party might have as well as the
legal bases for any claims on behalf of Galactica.

xo - Overwhelmed 1L trying to study for Crim Pro exam Friday, Contracts shortly thereafter.   This hypo makes me want to die, and my outline can't teach me to issue spot. FML.  Thanks.

[legend]

Well first thing is all 1L's are overwhelmed and everyone misses issues. My first year I got the model answer in contracts, which I would never have believed and I missed 2 issues. I was freaking out just like you and I ended up with the best grade and I was far from confident 10 days before the final. Remember your never going to get everything right on a law school exam just the way it is even the Valedictorian at Harvard missed issues on their 1L exams. Everyone 1L is freaked out or at least should be and it is just part of the experience. You will look back on this day and realize how simple it all was when your out practicing. Have fun on the exams as well and just relax.

Here are some ideas that might help. First I assume you read the model answer to the question if not you should. Second is just try going through different exams and just issue spotting you don't  need to do a full essay or anything, but just work on issue spotting. Another thing that really helped me out was CALI lessons I imagine they still have those my school gave them to me for free. http://www.cali.org/lesson it lets you write essays and short answers to get the concepts down. I know there are other things out there as well, but that helped me however what works for you may be entirely different.

Just remember to relax above all else it will never be perfect and just study your but off. It is completely normal to feel overwhelmed it is something every 1L goes through. After it is done you will feel a lot better and by the time your a 3L taking your last final you won't believe that you were every freaking out. I'm hopeful that you will do fine and that is a long question, but certainly doable don't get intimidated and more importantly have confidence in yourself.

Good Luck!

[sollicitus]

It takes awhile to get used to law school, but contracts and torts is easy once you know how to think like a law student. Trust me, if not then Equities, Remedies, Secured Transactions, Property, and all those other fun classes will ,feel like that times ten.

As with anything, fundementals are the hardest to learn. After that it just keeps building on itself. It's natural to feel a bit set back at first. Just stick with it and you will be fine.

 Above all else remember this........ thank Heaven for the curve.   

[cerealkiller]

Above all else remember this........ thank Heaven for the curve.   

The curve isn't so kind if one finds himself at the bottom of the heap.

[sollicitus]

Above all else remember this........ thank Heaven for the curve.   

The curve isn't so kind if one finds himself at the bottom of the heap.

Anyone who fails on the curve would fail anyways just much worse.

In law school the curve makes it easier not harder. Here is why and how.

In most real life scenarios a 70% would be a C at most (if not a D) but on a curve it tends to be closer to an A.
In that scenario someone could get below a 50% and still pass. Without the curve you'd be long past F.

More importantly the curve shows where the class is as a whole. If you can't keep up with the heard you shouldn't be in the herd. It has to be culled from time to time. It's natural and healthy.

[Morten Lund]

In most real life scenarios a 70% would be a C at most

Grumpy partner rejoinder:

In real life, 100% is an A;  99% and below is an F.

[sollicitus]

In most real life scenarios a 70% would be a C at most

Grumpy partner rejoinder:

In real life, 100% is an A;  99% and below is an F.

works good for company pep speaches, along with the flashy power points and free dounuts.
If it were true lawyers wouldn't brag about how great they did at their plea bargins and settlements. In the legal world going to pergatory if soften a "win" since you avoided hell.

[Morten Lund]

I suspect we may be thinking of different things. 

A contract/settlement/verdict is hardly ever a perfect result/outcome for either party - almost by definition - but work product is a different matter entirely.  In terms of the quality of a contract/memo/client advise/whatever, 100% is no pep-talk fluff.  It is very much daily reality in large swaths of practice.  Anything less will quickly lead to vanishing clients.

I don't get to provide "pretty-good" documents to my clients.  Quality is binary.

[sollicitus]

I suspect we may be thinking of different things. 

A contract/settlement/verdict is hardly ever a perfect result/outcome for either party - almost by definition - but work product is a different matter entirely.  In terms of the quality of a contract/memo/client advise/whatever, 100% is no pep-talk fluff.  It is very much daily reality in large swaths of practice.  Anything less will quickly lead to vanishing clients.

I don't get to provide "pretty-good" documents to my clients.  Quality is binary.

quality vs result. I get what you mean.
I agree too. Do the best you can, and if handed a commode then polish the turds the best you can and do it on the fancy copier paper with double spaced legalieze and fancy font.

I get that part, I also agree that we can't always get 100% of what we'd prefer for the client despite the best quality we can provide. That is the curve of life comes in. How does the average attorney do compared to what you just did. That is how the relative concept of quality comes in as far the clients perspective on it.

That being said, yes anything than 100% of your personal best is just a waste of your time and your client. I agree with that much.

[Duncanjp]

In most real life scenarios a 70% would be a C at most

Grumpy partner rejoinder:

In real life, 100% is an A;  99% and below is an F.

works good for company pep speaches, along with the flashy power points and free dounuts.
If it were true lawyers wouldn't brag about how great they did at their plea bargins and settlements. In the legal world going to pergatory if soften a "win" since you avoided hell.

Your intended points do manage to crash through, Sollicitus. But in all sincerity, proper grammar and spelling are fundamental to being an effective communicator in the legal field. Yes, this is an informal thread. But if you are a law student, you should be cultivating the habit of identifying and correcting the errors that riddle sentences like the ones above before you post them. Otherwise, how do you expect to establish credibility as an attorney?