My mom, a family lawyer in Tennessee, did the littlest bit of digging, and discovered -- surprise! -- that the argument that "we have to honor these contracts" is BULLS--T.
She's asked me to share her findings with ya'll. I told her to sign up and blog it herself, but she just hates all this computer stuff.
The upshot: Yes, Mom, it's unconscionable, grossly unfair, offensive. And there's more of it where that came from.
Mark, Please do this for me. I don't know how to post on Daily Kos or anything like that, but won't rest until I know you've sent it somewhere visible. I was listening to All Things Considered yesterday and got more and more outraged on the rationale that AIG bonuses had to be paid to respect contract law in the US. There was an NYT reporter making that argument on ATC on 3-17-09. I remember a tenet of contract law from my law school days (and looked it up):
The Doctrine of Unconscionability, which has been incorporated into The Uniform Commercial Code, Section 302
- If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.
- When it is claimed or apears to the court that the contract or any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose and effect to aid the court in making the determination.
Excerpt from Notes to the Official Text of the Uniform Commercial Code:
Purpose:
This section is intended to make it possible for the courts to police explicitly against the contracts or clauses which they find to be unconscionable. . . .This section is intended to allow the court to pass directly on the unconscionablility of the contract or particular clause therein and to make a conclusion of law as to its unconscionability.THE BASIC TEST IS WHETHER, IN THE LIGHT OF THE GENERAL COMMERCIAL BACKGROUOND AND THE COMMERCIAL NEEDS OF THE PARTICULAR TRADE OR CASE, THE CLAUSES INVOLVED ARE SO ONE-SIDED AS TO BE UNCONSCIONABLE UNDER THE CIRCUMSTANCES EXISTING AT THE TIME OF THE MAKING OF THE CONTRACT . . .THE PRINCIPLE IS ONE OF THE PREVENTION OF OPPRESSION AND UNFAIR SURPRISE . . ..
The Free Dictionary (legal-online) defines unconscionabliity as:
UNUSUALLY HARSH AND SHOCKING TO THE CONSCIENCE, THAT WHICH IS SO GROSSLY UNFAIR THAT A COURT WILL PROSCRIBE IT