[USFRIENDINVICTORIA]

If you consider the municipality to be a corporation (which it is), and the residents to be shareholders; the red light company seems to have a case. They had a contract with the municipal corporation. The municipality broke the contract. What difference does it make whether the Council (or Board of Directors) made the decision to break the contract; or whether the voters (shareholders) made the decision?

If government entities can't be trusted to honour contracts; won't that weaken contract laws in general? Won't contractors be wary of entering into government contracts — unless they build in some additional premium, for risk of contract violation?

[ex 98C MI Dude]

As I understand it, the original contract had a severance clause. After the vote, the city council signed a new contract without the clause a mere 3 days prior to the new law going into effect.

The voters had spoken, and the council at that point lacked the legal authority to sign such a contract. The new contract should be voided.

[RushingWater]

If government entities can't be trusted to honour contracts

Surely there's some language in the agreement about enforcing legal rights which the city no longer has . . .

[a fool in paradise]

Mayor Bill White voided the contracts on those who had rented out the George R. Brown convention center when he hijacked it to shelter Katina refugees from New Orleans.

Bill White looked in the camera and said “I DARE anyone to sue me over this decision”.

The city of Houston will do whatever it damn well pleases.

[SeeSharp]

If you consider the municipality to be a corporation (which it is)

Some of the flaws in your metaphor are:

1) Shareholders are not responsible for the debts of the corporations they invest in.

2) Citizens under a government do not get to decide whether to join or not.

3) All governments claim sovereign immunity and private corporations know that when they contract with them.

Governments are not a private businesses and do not behave like private businesses.

[RobRoy]

I actually agree with you. The way I see it, it is like the city signed a two year lease on a building, and two months later the voters choose to tell the government they cannot occupy the building. It means the gov. still has to make lease payments for two years on an empty building.

That would mean I suspect the government must honor the contract and keep the cameras up and continue to pay until the contract expires, but the government will not use the cameras.

OTOH, maybe it can be ruled that the contract is not enforceable. I don’t know the nuances.

An interesting side note: In some states you can ignore red light camera tickets regardless of the threatening letters because a) you did not agree to the ticket so they cannot ding your credit record for not paying, and b) they carry no government weight. That is, they don’t go against your driving record and they will not be used to hold up any future licensing. I am having a devil of a time finding out exactly which states those are, however.

[ExTxMarine]

Won't contractors be wary of entering into government contracts — unless they build in some additional premium, for risk of contract violation?

The City of Houston was not working in good confidence of the voters, so they entered into a contract against the will of the people. Let me explain:

The original contract with ATS and Houston stated that if the voters voted to end the contract, it would be gone without issue - the contract would be void. The City of Houston tried HARD to keep this off the ballot. When the City of Houston realized that the voters were going to get a chance to vote on this issue, they signed a NEW contract WITHOUT the void clause - just to setup this court fight.

Therefore, the Board of Directors were not acting in good faith and PURPOSEFULLY thwarted the will of the shareholders and these types of contracts have been ruled invalid - as this one should be!