Arranging transportation of a sold vehicle on behalf of an out-of-state buyer can change the jurisdiction in which “physical delivery” is said to have taken place.  
 -  Photo by  Robert Couse-Baker  via Flickr

Arranging transportation of a sold vehicle on behalf of an out-of-state buyer can change the jurisdiction in which “physical delivery” is said to have taken place.

Photo by Robert Couse-Baker via Flickr

Every law student experienced that one professor who terrified the living you-know-what out of his or her students. The terror usually occurred in the first year of law school with the entering class, the so-called “1Ls.”

My tormentor was Doctor Walter H.E. Jaeger, a professor at the Georgetown University Law Center, where I had enrolled in 1969 to have my brains professionally scrambled so that I would “think like a lawyer.”

My wife has a story about “thinking like a lawyer.” She says, “Ask a lawyer a perfectly simple question, such as ‘What color is that house over there?’, and you will get an answer such as ‘Well …’ followed by a pause, because lawyers bill by the minute, and then, ‘It appears, at the moment, to be some shade of white, at least on this side.’” Detailed and precise, but to a fault.

But I digress. Dr. Jaeger had earned bachelor’s, master’s, and doctoral degrees in law and other subjects at Georgetown. He also earned a doctorate at the Sorbonne in Paris. He joined the Georgetown faculty in 1934 and remained on it until 1978, when he was named a professor emeritus. From 1957 to 1970, he was the editor of the 23-volume “Williston on Contracts,” the bible on the subject of contracts, and the author of three other books, one each in the fields of labor law, international law and contracts.

Over the years, he was a visiting professor at the University of Frankfurt in Germany, the University of Southern California, the University of Chicago, the University of New Mexico, and the John Marshall Law School, and during my first year at Georgetown Law, we got an unexpected two-week break when he was called away by the Supreme Court of India to provide expert advice on some arcane issues of Indian contract law. In short, Dr. Jaeger was the real deal.

Georgetown 1Ls who were lucky ended up taking the course in contracts from Richard Allen Gordon. “RAGs,” as the students called him, was certainly a contracts scholar, but he was an amiable, easygoing fellow who worked his students hard but who didn’t give any of them heart attacks.

Dr. Jaeger was a whole ’nother ball game.

He was tall, gray, formal-looking, imperious and suffered fools badly. He terrified us.

The best way to describe his classroom presence would be to have you check out the 1973 movie “The Paper Chase,” in which John Houseman, a British-American actor and producer, rendered an Academy Award-winning role portraying Prof. Charles W. Kingsfield, a role he reprised in a 1978 TV series adaptation.

Prof. Kingsfield was a commanding presence at the raised lectern facing his quivering 1L charges. He was a master of the Socratic method, thundering at a student to recite the facts of a case, withering in his critique of the hapless student’s always-failing attempts, then challenging other students to correct the mistakes of their classmate.

As each new victim stood in response to Kingsfield’s summons, the professor would demand an explanation of why the first student’s attempt was wrong, or hurl a hypothetical question based on the original facts of the case, but changing one or two of the details.

I can tell you from personal experience that Prof. Kingsfield didn’t have a thing on Dr. Jaeger. On several occasions during that first year-long contracts class, I was the good doctor’s original target, called on to recite some ancient English court’s opinion on contract law, and was his frequent follow-up target, called on to explain to the rest of the class why a classmate’s efforts fell short.

In posing the follow-up questions, Dr. Jaeger might say, “All right, Mr. Hudson, what’s wrong with Mr. Smith’s analysis?” When I’d bumble my way through the answer, he’d say, “Very well, but let’s change one little fact and see if it affects your analysis.” And he’d throw out one fact from the original case and substitute another. With 125 other 1Ls looking on, I’d have to determine on the fly whether the changed fact required a different conclusion.

Lawyers call this “Thinking on your feet.” We 1Ls called it torture, one step back from, say, waterboarding or fingernail-pulling.

“But Tom,” you ask. “Why this trip down memory lane? Isn’t this supposed to be an article that will help dealers understand legal stuff relevant to their businesses?”

Here’s why. Sometimes changing that one little fact, or perhaps two little facts in the description of a legal problem can lead down different roads to diametrically different results.

Here’s what I mean:

Example No. 1: Your dealership advertises cars for sale on its website. A buyer can make an offer to buy a car by phone or online. If the buyer is an out-of-state buyer, your dealership may send the deal documents to the buyer by overnight delivery. The deal documents will likely state that the law of the dealership’s state will apply to the transaction. Once the documents are signed, your dealership might contract with a delivery company that will drop the car in the buyer’s driveway and hand over the keys.

Example No. 2: The facts are the same as Example 1, except that the dealership requires that the buyer contract with the delivery company, with the delivery company then acting as the buyer’s agent, picking up the car from the dealership’s lot.

The legal question? Which state’s laws will govern the transactions? Does the location of the physical delivery of the vehicle that is the subject of the contract of sale compel the determination of which state’s law applies?

If the dealership wants the law of its state to apply, it will probably want a court to conclude that the vehicle’s delivery at the dealership is one of the factors governing the question of which state’s law applies. Delivery at the dealership is, as the lawyers say, “a good fact.”

Dealership lawyers will push their dealership clients to adopt policies and procedures that include as many “good facts” as possible — the more good facts, the more difficult it is for the buyer’s lawyer to attack the transaction.

So when your lawyer gives you that compliance checklist for online sales transactions, resist the temptation to omit one or two of the items or change a procedure without letting checking with the lawyer first. You can never tell when that one changed fact will result in a changed answer.

Thomas B. Hudson Esq. was a founding partner of Hudson Cook LLP and is now of counsel in the firm’s Maryland office. He is the CEO of LLC and is a frequent speaker and writer on a variety of consumer credit topics. Contact him at [email protected] Single print publication rights to Auto Dealer Today. HC No. 4851-2627-5973