Argument: Failure of employees/execs at AIG invalidates bonus contracts

Issue Report: AIG bonuses


James P. Tuthill, a lecturer at the law school at the University of California, Berkeley. “Those Contracts Can Be Voided”. New York Times, Room for Debate. March 17, 2009 – Payment of bonuses to employees who have wrought so much destruction and havoc on us all is simply ipso facto unconscionable, and a court should reform or invalidate the contracts. Every contract has certain implied provisions and terms that are not specifically spelled out but presumed to be part of the agreement because such terms are so fundamental to a reasonable agreement between two parties. So with a payment of a bonus, it must be presumed that an implied term is the employee won’t destroy the company and shareholders for whom the employee supposedly works. If the employees’ acts have been so contrary to the interests of the shareholders, as is the case with A.I.G., then payment of the bonuses is unconscionable and the obligation can be voided.