Contracts and Libertarianism
contract A *libertarian contract is a legally enforceable agreement to exchange or transfer *legitimately owned *property titles where all parties give prior *consent, whether explicitly or implicitly. There may be something valuable physically given or title-transferred (a “valuable consideration”) in order to distinguish it from a mere *promise (nudum pactum); although this does not occur with a deed under seal (a sort of gift contract). It must be for a *lawful purpose (not to commit a *crime, for instance) and normally made between *persons who have reached the *age of majority (or special conditions might apply to protect a minor). It might be void if *fraudulent on either side, or *reasonably misunderstood, or made under *duress that is an *initiated imposition (unlike *blackmail). What counts as a valid contract will inevitably have cultural aspects, which can differ from one culture to another: what words or actions constitute a legitimate offer, what an acceptance, what it is practical for an agency to enforce, etc. Life without enforceable contracts would be less *economically efficient due to the uncertainty caused by people being able to break promises with, relative, impunity.
Some specific theoretical questions.
1) In what way are contracts libertarian? There is no initiated imposition involved in giving others an enforceable conditional right to something we legitimately possess (whether *money, a good, or service) any more than by simply giving that thing to them. In neither case is there an initiated imposition even if we later regret our decision. We do initiate an imposition if we try to take back, without permission, what was given or if we refuse to surrender what we now no longer own (although it might be in our physical possession).
2) To what are we entitled if someone breaks a contract? First, look at the contract to see. It will probably be some limited financial *restitution. In the absence of a clear statement (or some agreed system of default rules, likely chosen for their *efficiency), it will have to be what minimises the initiated imposition to both sides; which ought also to be efficient. *Specific performance of a contract would usually be libertarian if that is what the contract says, although most people would probably prefer this not to be included; hence it might be regarded as implicitly excluded unless explicitly included.
3) Is there any libertarian reason to limit the nature of enforceable contracts between *sovereign individuals? Many activities within systems of *rights, not just libertarian rights, might appear to some people to be *unfair or *exploitative. But these are hopelessly subjective criteria that will damage *liberty and *welfare if used as a standard that can override ordinary rights (although courts might use the principle of *equity as long as they do not clearly violate rights thereby). See *entail; *just price; *slavery.
4) Can one be contractually bound by the rules of someone else’s property merely by entering that property? Could someone put up a sign that those who enter without permission will be executed and then hold that someone who does enter has implicitly contracted into this (at least, as long as he read the sign or knew about it)? No, because although one can in a sense have whatever rules one likes on one’s property, only those who clearly consensually contract into them are libertarianly bound by them. If someone was intending to *trespass then he was clearly not intending to consent to any contract. This is not to say that one cannot use *coercion, including firearms, to remove someone that is imposing himself on your property. And after the event trespassers can be sued for any damage they caused, including that of the mere disutility the trespass imposes (although some *reasonable limitation likely will apply to stop unrealistic and exaggerated claims).
(This is an entry from A LIBERTARIAN DICTIONARY: Explaining a Philosophical Theory [draft currently being revised]. Asterisks indicate other entries.)