In a true libertarian society with less state or no state many of your written contracts would not only be simplified on basic private property principles but other contractual agreements may just disseapear all together. As property transfers ownership liability goes along with it.

The responsibility then lies on the consumer to be a responsible consumer and purchase a quality good. Not to have the public bail them out when they got scammed for being negligent in researching whom the do business with.

Most of the time, none of the parties wants to break the agreement. Focusing on those problematic, relatively infrequent cases, while statists dispute people’s right to trade and relate to each other in their own terms (labor regulations, affirmative action and so on) is, in my opinion, a distraction.

Yet, Barnett does not provide a rigorous argument showing where are the exact limits of the ability to deduce concrete rules. He evidently feels that the more abstract principles can, for some reason, be established by armchair theorists. If denizens of the ivory tower can do this, why can they not deduce or establish more concrete rules by simply considering more and more contextual facts? In the
Roman law system—a somewhat decentralized legal system superior in many ways to the common law—Roman jurists (jurisconsults) helped develop the great body of Roman law by providing opinions on the best way to resolve disputes. These disputes were often purely hypothetical or imaginary cases, in which the jurists asked: “under such and such a possible or conceivable combination of circumstances, what would the law require?”25 It is conceivable that a large part or even all of the legal code existing in a given society can be “deduced” in this fashion, and then these rules applied like precedents to actual controversies as they arise. As a libertarian (and, I confess, a lawyer), I must say that I believe I would be more comfortable living under a set of concrete rules deduced by libertarian philosophers than the (perhaps more concrete) set of rules developed under the actual common law.

Still, Barnett’s argument in favor of a common-law system makes sense, even to libertarians who favor a deductive approach to rights (Hoppe 1989b, p. 131; Rothbard 1998; Kinsella 1997, pp. 607–45). Legal rules must be concrete in the sense that the rules must take into account the entire relevant factual context. Since there are an infinite number of factual situations that could exist in interactions between individuals, a process which focuses on actual cases or controversies is likely to produce the most “interesting” or useful rules.26 It probably makes little sense devoting scarce time and resources to developing legal precepts for imaginary or unrealistic scenarios. If nothing else, a common-law type system that develops and refines legal precepts as new cases arise serves as a sort of filter that selects which disputes (i.e., real, commonly-encountered ones) to devote attention to.

[26: This is analogous to Mises’s method selecting certain empirical assumptions (e.g., assuming there is money instead of barter) to develop “interesting” laws based on the fundamental axioms of praxeology, rather than irrelevant or uninteresting (though not invalid) laws.

For further discussion of the role of codes and jurists, see my Legislation and the Discovery of Law in a Free Society.

The details are not important to me; this is for the legal system to slog out.

I’m not so sure that’s the reason we want to be giving for the non-enforceability of such a clause.

I have not read your article “Inalienability and Punishment,” but since I agree with you that this clause would not be enforceable even if the person signing the contract had read and understood the contract in full, I’m therefore inclined to suspect that whatever argument you present in the aforementioned article should suffice to explain why the 50% life income clause would not be enforceable, and therefore am further inclined to see no need to make the unnecessary jump of assuming that the lack of having read a contract implies any additional unenforceability above and beyond this.

My personal opinion on the matter at this time–and perhaps this is the/an argument you present in “Inalienability and Punishment”–is this: if you do not wish to surrender 50% of your income for the rest of your life, you don’t have to; all you have to do is return whatever scarce thing(s) you bought. If no scarce thing was purchased, you need not return anything.

My current inclination is to say that if a party agrees formally to a title-transfer, then she is bound to it, regardless of whether she read it, except in those cases where she would not be bound to it even if she did read it. If I see a well-rationed argument to the contrary, I’ll then reconsider.

Cheers,
Alex Peak

Second, I see no reason why two parties couldn’t agree to a contract that is amendable according to specified procedures–assuming this is really what the parties agreed to. I’m merely saying that the existence of a clause in the fine print is not definitive proof that this was actually agreed to.

I see this as particularly so in the case of a credit card holder with a large balance. This person can be seen to be over a barrel and the alteration of the contract with the only option being to “pay up and walk” amounting to coercion.

And I see this as an abdication by the state of a fiduciary responsbility to prevent, obviate, or adjudicate fraud and coercion in private commercial transactions.

Most shrinkwrap and clickwrap EULA’s and TOS’s have provisions in them which permit the issuer to alter the terms — practically — ad lib. I can’t see this as being just in any way.

M

Contracts are generally read in the light of the “Parole Evidence Rule”, which basically states that oral matter may not amend written matter in a contract unless the written matter states that the oral matter is applicable. So oral matter could be used to clarify written matter, but not to modify it unless that possibility were spelled out in writing. And there are all sorts of issues to do with agreement by conduct as well, e.g. if a debtor started paying instalments with notes stating that was happening, and the creditor took the payments without clearly rejecting the implied instalment terms, then the creditor would have a hard time trying to get payment in full (having accepted the instalment scheme).

Unfortunately the times are changing. A recent example would be Blizzard v Glider where Blizzard was able to use their EULA and TOS to put an injunction against Glider software. If I recall correctly the basis of the argument was that Blizzard licenses their software, and that if the player breaks the TOS by using botting software (Glider) then the user would be committing copyright infringement since they are not authorized to have a copy of World of Warcraft in their computer’s RAM.

Mike Cuneo:
I’m not sure what you are asking. If you are asking for a definitive pronouncement from me, on an incomplete hypo-this is the problem I mentioned regarding armchair reasoning.

“But to me, an agreement is an agreement, as long as no force or coercion is involved of course.”

Well, yes, but the question is: what IS the agreement? My point is: you can’t just ASSUME it’s exactly equivalent to “the paper document”. That is just *evidence of* the parties’ intent.

Raja:

“So, in effect, you are saying that if I click through the terms of use agreement without reading it (or the fine print), there has been no meeting of the minds and the contract should not be enforceable? But when you sign a contract (or click the button) do you not _explicitly_ agree that you have _read and understood_ the contract? If you have, in fact, not read and understood the contract then you have defrauded the vendor. So even if the fine print does say you owe the lender 50% of your future income — which, I agree, should not be enforceable — are you not responsible for making the vendor whole on any property he transfers to you upon signing the contract? Surely you don’t disagree?”

If you are asking for a definitive pronouncement from me, on an incomplete hypo-this is the problem I mentioned regarding armchair reasoning.

So how does one extend this to non-property items such as software. How does one prevent users from violating their terms of use agreement on the technicality that they just clicked through it?

Does this line of thinking work both ways?

For example, say the vendor is fully aware that the customers just click the “I Agree…” box without reading what’s actually there. And in that text were all the terms and conditions of, say, downloading an anti-virus program. However, the company makes promises in that text that cause it to lose money, for example people find a loophole in a “free trial” that allows them to sign up over and over. Is all of this now null and void because of a mistake on the vendor’s part? Clearly not reading the T/C is a mistake, one that I make every time I click, but I feel safe knowing that the minute someone does actually click and sign away half his income, it would be all over the news and I would then have to start reading more carefully. But to me, an agreement is an agreement, as long as no force or coercion is involved of course.

I think it could be added, however, that no libertarian worth his salt ought ever to air an opinion on contracts without first having read Professor Randy E. Barnett’s most illuminating article “A Consent Theory of Contracts”, Columbia Law Review, vol. 86, no. 2 (March, 1986): 269–321, which is available on-line via http://www.randybarnett.com/pdf/consenttheory.pdf.