Howard flags a fascinating contract law case handed down by the Sixth Circuit today. The question, in simplified form: If a 99-year lease signed in 1912 specifies that the lease payments are $35,000 per year, payable "in gold coin of the United States," can the lessor almost 100 years later demand that the payment be $35,000 in gold coinage rather than just $35,000?

  For 90 years, the lessor only demanded payment of the dollars themselves, essentially ignoring the "gold coin" provision. And from 1933 to the 1970s, the "gold coin" clause was unenforceable under federal law thanks to U.S. monetary policy. But in 2006, a new company bought the property and began demanding the value of gold coins that on their face are worth $35,000. Does the language of the contract entitle the company to the value of the gold coins rather than just $35,000? In a very interesting opinion, Judge Sutton concludes that it does. Seems pretty persuasive to me, although I don't know much about the topic.

  UPDATE: My colleague Donald Clarke chimes in via the comment thread:

The entire case here is just about whether the assignment of the lease to the current lessee in 1982 constituted a novation, an issue because of previous federal legislation about contracts containing such clauses. It's not about the value owed at all, an issue that is sent back to the District Court to resolve.

I appreciate the correction.