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Monday, January 24, 2011

A Breach of Contract

By Douglas V. Gibbs

Imagine, if you will, a contractor hired by a home owner, with a contract to add a room to the house. In the contract, the provisions are specific. The room will be 12 by 14 feet, using a particular host of materials. And as the contractor is working on the room, he decides the home owner really needs a swimming pool, too. "Gosh," thinks the contractor, "the home owner is going to enjoy the pool, once it is built. They will grow to appreciate it, even if they protest against it in the beginning. They'll have to pay for it, of course, but they'll like it." So, the contractor begins to dig the hole for the pool as a crew also works on the room addition.

"The homeowner is going to just love this pool."

The homeowner walks in, notices the big hole being dug in the backyard, and says, "What are you doing?"

"Well," says the contractor, "I am putting in for you a swimming pool, too."

"No," replies the homeowner. "In the contract I did not give you the authority to build a swimming pool. I don't want a swimming pool."

"Oh, but you'll like it," says the contractor with a huge grin. "Don't worry, let us build it. Once we are finished building it, and you get a chance to jump into its water, you'll like it."

"But there is nothing in the contract that authorizes you to build a pool."

"No," says the contractor, "I ran it by my lawyer, and my lawyer says that actually the clause that says I am to 'perform my work in a satisfactory manner and use the materials necessary to make the customer happy' allows me to build the pool. That clause implies that I have the authority to do whatever work I deem necessary to provide for you work that is for your benefit, and I have interpreted that to mean that a swimming pool is for your benefit, therefore I am authorized to build it."

The homeowner scratches his chin for a moment, and then says, "I don't want a swimming pool, and I don't wish to have to pay for something I don't even want in the first place."

"Well," says the contractor, "I've already began digging the hole, so there is nothing you can do about it. If you wish to protest my decision to build a pool in addition to the room addition, you can take it up with my lawyer."

"How about I go talk to my lawyer."

"As per the contract, only the opinion of my lawyer matters. My lawyer has final authority over what I can and can't do based on the implied powers afforded to me per our contract. My lawyer is the final decision-maker regarding what I can and can't do, as per the contract."

What do you think the homeowner would do? How would the homeowner feel?

First of all, the contractor breached the contract by doing work he was not authorized to do. Second, the homeowner will consider the contractor to be a corrupt individual. The homeowner would not pay for the unauthorized work, and ultimately, the contractor would be fired, and the homeowner would probably refuse to pay the contractor, while also refusing to recognize the contractor's interpretation of the contract.

So, the homeowner fires the contractor, and hires a new one who says he will abide by the contract. The new contractor begins filling in the big hole in the backyard, while continuing the construction of the room addition, and then suddenly decides, "You know what? The homeowner would really appreciate a balcony."

So, the contractor, as he fills in the hole, and works on the room addition, begins adding the materials necessary to add a balcony to the room addition. The homeowner comes home and says, "Hey, I didn't ask for a balcony."

"I realize that," says the contractor, "but you will really like this balcony. I plan to use only the best materials, and understand, I only have the best intentions. This balcony will be to your benefit. You will be happy once it is built, and you realize the benefits of this balcony. And don't worry, it doesn't really cost that much money. In fact, what we did was buy less expensive materials for the room addition, and use less expensive materials for the balcony, so that the overall cost of both the room addition and the balcony is not much more than the room addition by itself with the more expensive materials. In other words, we have offset the costs with cheaper materials so that we can build you a balcony at a discount."

"But I don't want a balcony."

"Yes you do. You just don't realize you want it. Deep down, however, you know that you want one. Besides, the contract says that we are better able to determine what is to your benefit than you are."

"But I don't want cheaper materials used on my room addition, or for a balcony to be built. The contract calls for harder grade 8 bolts, quality two-by-fours, and other quality materials so that the walls don't collapse."

The contractor lets loose a charming smile, and says, "Well, it will probably hold, and you have to admit the room will still look good."

So, once again, the homeowner has hired someone willing to breach the contract, and must fire yet another contractor.

But the contractor says, "According to our lawyer, you can't fire us. You have to accept the balcony. Our lawyer says the contract, as interpreted by us, indicates we must do for you what we believe to be best for you, and our interpretation of the contract allows for a balcony to be built, and for you to still pony-up the money for the additional costs. We worked very hard to offset the cost by using less expensive materials. You would think you'd be saying 'thank you.'"

Despite the legal rantings of the contractor, the homeowner fires the contractor anyway, and then hires a new contractor. The new contractor reads the contract, states that he is willing to abide by the provisions of the contract, and indicates that he understands the homeowner's anger. The contractor promises that he can be trusted to abide by the contract, and then gets to work.

The new contractor begins disassembling the balcony, while continuing to replace the dirt in the hole that nearly became a swimming pool, and continues the work on the room addition that the contract originally calls for.

By now, there has been so much money put into this project, with the repairs and all, that it is now beginning to break the bank. Nonetheless, the homeowner continues forward, because he really wants to build this room. He's angry at the other contractors, and he will do what he can to get the money due to him out of the fired contractors, but for the time being, the project must move forward.

This new contractor brings in 18 guys to work on this room, where only four or five were working on the room addition before.

"What's this?" asks the homeowner.

"Well," says the contractor, "you know how it is. We're not in business to make a profit, we are in business to employ people, so we are going to hire as many people as we can to work on your project. But don't worry, we will do the work exactly as you want, and in accordance to the provisions of the contract. It might be a little more expensive because of all the people, but in the long run you will get your room addition as you want it, while also being compassionate by spending extra money to ensure all of these people are off the street and working. Don't worry about the cost, it's good for society, and if it is good for the benefit of the community, you really need to do this."

"Yeah," says the homeowner, "but many of them are standing around doing nothing because there are more people than is necessary for the job. Some of these people are literally just drawing paychecks to watch everyone else work at my expense."

"But it's good for the community," says the contractor. "You can afford it. Why aren't you willing to pay your fair share to make sure everyone has money for their well-being?"

"But in the contract," points out the homeowner, "it calls for no more than the number of people necessary to accomplish the job. It also indicates that people hired above and beyond the number needed will not result in any additional charge."

"Well," says the contractor, "we interpret that provision to mean we can hire as many personnel as we deem necessary, regardless of whether or not they are actually assigned a task. Our lawyer says that our interpretation is in line with the contract, and therefore you have no legal recourse. What kind of hateful human being are you to refuse to pay for the poor additional workers?"

Here the homeowner goes again, having to fire yet another contractor for not abiding by the contract.

Why is it so difficult to find somebody that is simply willing to abide by the contract?

In this illustration, the contractor is the federal government, and the homeowner is We The People. The contract, or the U.S. Constitution, gives to the federal government a list of authorities. The federal government cannot do anything more than what the contract allows them to. If they feel they need more powers, then they must amend the contract through the amendment process, which requires the States (We The People through our State legislators) to approve the request by 3/4 ratification.

The federal government is doing more than the contract allows. The federal government is using their own judiciary to confirm its erroneous interpretation of the contract. They believe there is nothing you can do about it because the federal judiciary has determined that the contract says they can do these things, even though you know it doesn't. And if you don't like it, your only recourse, according to them, is to question what they are doing by taking your case to their courts. And as they are doing all of this work you don't want, and they are charging for it through taxation and deficit spending, and as they use all of these people that are not necessary in the federal system while giving away much of the money in entitlements, it turns out that none of what they are doing is allowed by the contract called the U.S. Constitution.

So, we ask, "What can we do?"

First of all, we can fire them. This is partially what happened last November. Second, the States, which are a more direct voice of the people than is our federal representatives, don't have to abide by the parts of federal law that is not in line with the authorities granted by the contract (U.S. Constitution). The federal government is violating the contract, and we have recourse against such a breach of contract.

In other words, Obamacare is no more authorized by the contract between the States and the federal government, than was the contractor authorized to build a swimming pool, or a balcony in the illustration above. But the Democrats say they can force their health care law on us because they believe it will make you happy, and they have interpreted parts of the Constitution to mean that they can do anything they wish as long as it, in their opinion, promotes the general welfare.

That is not what that clause means.

The clauses in the Constitution interpreted by the liberals does not mean that they can do anything that they please.

The recourse, since the government has co-opted the courts, and the courts have seized the unconstitutional power of judicial review, then is for the States to reject what the federal government is offering. Anything the federal government does that is not within its authority can be nullified by the States. Meanwhile, we need to fire the dirt balls on Capitol Hill, and replace them with representatives that are willing to abide by the contract (U.S. Constitution).

Our contract has been breached. They are using their legalism, the federal judiciary, to tell us that they can do anything they wish. But they know that the contract, as written, does not allow their big government breaches of the contract.

We don't have to take it. We don't have to put up with their seizures of power.

It seems, however, that much of America has gone into the other room while the federal government builds the swimming pool, and constructs the balcony, and are not paying attention to the unconstitutional work the federal government is performing. If the people act like they don't care, the federal government will be unconstrained, and will do whatever they want, regardless of the contract. You have to be involved, you have to be educated in what the contract says, and you have to be paying attention to what the federal government is doing. It is important to understand the contract, not based on what the government says it means, but based on what it says it means in plain language, and in line with the original intent as provided in the writings of the Founding Fathers.

We must be willing to fire the people in government that are not willing to follow the provisions of the contract, and reject the unconstitutional work they offer.

-- Political Pistachio Conservative News and Commentary

Temecula (Southern California) Constitution Class


Graham said...

Nice rant. The scenario actually sucked me in because of my profession, but the post got too long to read and was far to clearly a bad analogy.

The Constitution is not a contract; it is a governing document. There are no parties to the Constitution, and therefore there can be no breach.

There can be violations and remedies, but keep in mind that this argument is always made by both parties, regardless of whether the issue is a contract or the Constitution, elsewise there would be no debate and all situations would be amicably resolved.

Just as a good contract attorney would keep in mind all the circumstances elucidated in the initial drafting and signing of the contract, so do people need to keep in mind the circumstances of the Constitution's construction and the purpose of it when executing. There are very few instances of purely unconstitutional action, and everyone should keep that in mind prior to judging the actions of ANYONE in our government based solely on Constitutional grounds.

Douglas V. Gibbs said...

Actually, Graham, you are in error. The Constitution is a social contract between the States and the federal government. The parties are the people, the States, and the federal government. The States are the parties who created and hired the federal government to protect and preserve the union. The federal government has breached that contract by acting outside the authorities granted. There are many unconstitutional actions, and it is the States' responsibility to judge, and act.

kris said...


You are comparing apples and oranges. Constitutions are not contracts - see above.

The "social contract" to which you refer, comes from Rousseau. It is not a constitution or form of government. It is a political theory which, in its essence is, in return for self-help and anarchy, we the people hand over some of those rights to the government. Otherwise, I'd have to stand watch over my home 24/7.

Your contract analogy also fizzles out with its reference to what happens where breach of contract occurs. For example, there are "void" and "voidable" contracts - contracts where damages are adequate and where they are not.

The analogy is not accurate.

Douglas V. Gibbs said...

Actually, the social contract does not come from Rousseau. He spoke of it, and defined it as he saw fit, but the first modern explanation or discussion of the social contract came from Thomas Hobbes. John Locke also discussed the theory. Rousseau was a counterfeiter. As a contract between the States and the federal government, the U.S. Government is expected to abide by the contract, and when it doesn't the States have the authority to act. For a basic explanation, without going into the deep legal complexities, the analogy is fine.

kris said...

Hobbes, Locke & Rousseau all discussed this political theory - which was always about the source of political power (the People) That theory cannot be accurately described as a "contract".

Contracts don't typically fail simply because there has been a breach of terms.

But that is what you're looking for - a technical breach to absolve you from any obligation to the Federal Government.

That is not how contract law operates - and that certainly is not how the Federal Constitution operates.

When any of my students conflate contracts and constitutions, I invite them to take a contract law class to learn what it's about.

Herewith your written invitation.

Douglas V. Gibbs said...

You are right that normally a constitution is not a contract, it is simply a governing document. America, however, is very different. The States, as sovereign entities, used the Constitution as a contract with the federal government it was creating. And if you break it down, the Constitution has all of the elements of a contract.

The idea of a "social contract" was developed by a number of political philosophers, including the ones we have already discussed. The idea of a social contract is that if there was no government and no law, everyone would constantly be fighting with everyone else. People could steal your things or kill you and there would be no one to stop them. Every person would be constantly fighting with every other person.

Therefore, a social contract would need to be put together to put an end to all that. The social contract, or in the case of the U.S., the Founding documents, involved getting people together to agree to a certain set of rules that they would live by. They agreed to live under these rules because it was better than living without any rules. This is one aspect of the "social contract" we have been discussing.

The social contract is entered into for the purpose of making our life better. In the case of America, the way to do this was to protect and preserve the union. By creating a federal government, however, the Founders saw that the federal government had the potential of becoming tyrannical, so the contract was designed to protect our rights and property from the federal government.

If government does not abide by the limitations placed in the Constitution, it is breaking the contract with the people, and we the people have to correct the system, or get rid of it and create a new government that will protect our rights.

Thomas Jefferson spelled out this very idea in the opening of the Declaration of Independence. The rest of the document was an explanation of how the British government failed to live up to its responsibilities, thus justifying creation of a new government.

James Madison, my favorite founding father, also used the "social contract" idea as well. The Constitution he drafted is basically a set of rules that we the people agree to live by. The people agreed to the rules and choose the leaders who would make the rules. In this way, the Constitution is a social contract.