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17 March 2009



Now I am not a lawyer, not even close, just an IT Geek, but that clause said, "no state" not 'the state:' could this be read and understood to mean that the States, i.e. the 50 States but not the Federal government, can not put limits, but that the Federal government can but not the 50 States put in some sort of a limit? I think that neither should have a say in a contract, but let’s see where this goes. Hopefully if they do try to pass something that limits work/pay in the past, i.e. pay/bonuses from say two years ago would be struck down as not lawful under the ex-post-facto thingamabob. But I don’t know.

Guard Wife

I needed an IT geek last evening to help me figure out my computer's tantrum. :)

Let's see if I can get this right:
The Constitution is a federal document, created long before there were 50 states. The reference to State with the capital "S" is a general reference to government. The parts of the federal constitution that are binding on the states (50) are made so by the 14th Amendment. The law of contracts, made through years and years of common law (court decisions & such) are very clear when it comes to the nature of what a contract is, how it can be avoided & the consequences of breach. It is a long held understanding that there are only certain reasons a legal contract could be altered by a court.

What also bothers me are these blowhard Senators threatening to pass laws SPECIFICALLY aimed at AIG execs. That type of legislation for punishment is also enumerated as a no-no in the very same Contracts Clause of our Constitution.

The feds could have put in some sort of compensation cap in their provisions as pre-requisites for the TARP recipients. In fact, there was such a provision which Chris Dodd (who not so coincidentally received the most campaign contributions of anyone from AIG) snuck out (although he says it happened in committee) prior to TARP's passage.

NOW, though, after the fact and an entire year after these contracts were formed, it is outside the realm of contract law to allow the government to change this stuff.


Thanks for the explanation, it makes more sense now.

I hope you are not implying that Chris Dodd is corrupt, that would not be nice. :snark:

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