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opinion American government to the tune of $170 billion. President Barack Obama said the employment contracts in ques- tion should be torn up. "This isn't just a matter of dollars and cents," the presi- dent said. "It's about our fundamental values." The battle lines were quickly drawn following Obama's angry comment. Andrew Ross Sorkin, mergers and acquisitions columnist for the New York Times, wrote that Wall Street types agreed with the president that fundamental values had to be respected, "but from their point of view, the 'fundamen- tal value' in question here is the sanctity of con- tract." Professor Lawrence Cunningham of George Washington University Law School opined in the same newspaper, "moral outrage and public rebuke do not provide legal grounds for backing out of a contract." But Cunningham, appar- ently a stealth anti-contract operative, then went on to list all the perfectly acceptable legal reasons for repudiating the terms of an agreement. "Our legal and business system," he wrote, "rec- ognizes plenty of valid excuses from contractual duty and even justification for breaching." These excuses include aggressive and creative interpretation of the contract itself, misconduct or fraud by the other side, the effect of unforeseeable or uncontrollable cir- cumstances (so-called force majeure), and the possibility of a fraudulent con- veyance. And, as any practising lawyer knows, often just the allegation of these things roils the waters enough to make an inconvenient contract go away, par- ticularly if you're Goliath to somebody else's David. Bankruptcy protection is the ultimate contract buster for a company in trouble. In Canada, this protection is general- ly obtained by filing under the federal Companies' Creditors Arrangement Act. Such a filing produces a court order giv- ing the company pretty much blanket ntitled-1 1 immunity, for a time, from its creditors, which includes suppliers and employees. Major companies — for instance, Nortel and AbitibiBowater — have filed for CCAA protection, and others are expect- ed to do so soon. When this happens, folks, tear up those contracts you were relying on! Now they're just words on a piece of paper, signifying nothing. And so, the old-fashioned view that, as an ethical matter, lawyers should not advise clients to break contracts, and shouldn't figure out good ways for them to ignore commitments presumed binding, is just that — an old-fashioned view, no longer relevant, out of tune with the times. Now, a contract may or may not be respected and performed by the parties — it all depends. That's the correct legal advice. This is another example of morally neutral lawyering, the belief that lawyers are there to serve clients and it's not their business to pro- tect society or promote particular val- ues at a client's expense. (I have recently argued in this column that a lawyer's moral neutrality, desirable as it may be in some ways, doesn't mean that he is free to subvert the values of his society, or be blind to its best interests. Even law society rules make this clear. Not every- one agrees.) Back to those pontificating law pro- fessors. I think the time has come for them to rejig the basic law of contract course, taught everywhere in first year. Students should now be told that a contract is just one tentative way of organizing your affairs. You may think you have enforceable private law rights, but don't count on it; they can disappear as do the snows of winter (except a lot faster). And, if you're on the other side, don't worry too much about obligations that have become burdensome; there are plenty of ways out. As for lawyers? We're here to help. Philip Slayton has been dean of a law school and senior partner of a major Canadian law firm. Visit him online at philipslayton.com FROM COAST TO COAST BASICS is the largest 100% Canadian Office Products Buying organization and is more than ready to serve Canadian Businesses with all their Office Product needs from Coast to Coast. NATIONAL ACCOUNT PROGRAM • Next Day Delivery to MAJOR City Centres across Canada • Consistent Product Offering with a National Catalogue • Highly Competitive and Consistent Pricing • Quality Basics Branded Products • Save Shipping Costs with Local Distribution Western Canada Contact: Brennan Thomson brennan.thomson@supremebasics.com For more information contact Central Canada Contact: John Trevisan john_trevisan@dyedurham.ca A ST TO A NATIONAL CO 0 % CANAD EACH 100% CANADIAN OWNED AND OPERATED A NETWORK OF DEALERS I Quebec/Atlantic Canada Contact: Peter Lai plai@crites-riddell.com www. C ANADIAN Law ye rmag.com JUNE 2009 25 4/14/09 8:21:17 AM S T 1 0 O A N AND JUST AROND THE CORNER C