Thread: Contract Law Under Fire.
#1 Contract Law Under Fire.03-31-2009, 10:03 AMContracts Now Seen as Being Rewritable
By MARY WILLIAMS WALSH and JONATHAN GLATER
Published: March 30, 2009
Contracts everywhere are under assault.
The depth of the recession and the use of taxpayer dollars to bail out companies have made it politically acceptable for overseers to tinker with employment agreements.
So federal and local governments are looking for ways to pare payouts, endangering the promises made before the financial storm to people like Wall Street traders, automobile workers and garbage collectors.
“We run roughshod over some contracts and not over others,” said David A. Skeel, a law professor at the University of Pennsylvania, about economic downturns. “Right now, employment contracts seem to be the type of contract that is viewed as eminently rewritable.”
The Treasury Department is seeking broad powers to seize troubled companies and rewrite contracts like the ones promising bonuses at the American International Group. Some A.I.G. employees, meanwhile, have been pressured by officials into repaying their bonuses to the giant insurance company rescued by the government.
Across the country, Vallejo, Calif., just got permission in bankruptcy court to tear up its contracts with firefighters and other workers. In Stockton, the city manager is studying whether to follow Vallejo’s lead.
In Michigan, Gov. Jennifer M. Granholm just ordered the city of Pontiac put under emergency financial management, after it failed, among other things, to rein in the cost of police, fire and trash collection services.
And President Obama’s auto task force, after replacing the top management at General Motors, is looking for ways to overhaul the contracts that G.M. and Chrysler have signed with unionized workers.
This month, the town of Vallejo demonstrated not only that it was possible for a city to tear up its union contracts in bankruptcy, but that it was even easier for a city to do so than for a company. The precedent may matter.
03-31-2009, 05:12 PM
Hoped for or not, it is what happens when the feds take over. :eek:"If every poor man is to come here and start requesting money for all his children, the applicants will never be satisfied and the nation's finances will collapse." Emperor Tiberius: Tacitus:Annals
03-31-2009, 06:03 PM
Nobody seems to care about this. This is the ultimate challenge for any government. Even a homeless, penniless, illiterate individual still has power of his or her effort. This is the first and last "thing" we own as functional human beings. :mad:
04-08-2009, 10:02 AM
- Join Date
- Apr 2009
The basis of all business is the contract, which is nothing more than a paper that specifies mutual agreement to exchange "something of value" for another thing "of value". It is the paper representation of one man's word to another.
In an economy such as ours, much legal attention is paid to Contract Law and the ramifications thereof. It really is the basis of all business exchange.
If the Government takes it upon itself to vacate certain contracts, particularly when the Constitution enjoins the Government from interfering in contracts, we ARE in trouble.
Some of us might well remind the Government that the Constitution is also a "contract" entered into by "we, the people" on one hand and the elected Government on the other. That contract allows the right of the Government to rule and the people to control that Government through their elected repesentatives.
I wonder what would happen if THAT contract would be vacated? (On the other hand, it could be said that it already has been vacated, in many ways.)
Last edited by Last Samurai; 04-08-2009 at 10:08 AM.
04-08-2009, 11:42 AM
I believe in Christianity as I believe that the sun has risen: not only because I see it, but because by it I see everything else.C. S. Lewis
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