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What Gives a Contract its validity?

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Jeremiah Dyke posted on Fri, Jul 17 2009 4:00 PM

I assume that a contract between two or more parties is merely binding law of some future action based on the current action of a signature. Yet, what gives the contract validity? What is valid about a signature, or even a name--which was forced onto you by your parents? In a free market is it simply a situation where if you break previous contracts you lose out on possible future exchanges, since individuals will know your exchange history.  

Read until you have something to write...Write until you have nothing to write...when you have nothing to write, read...read until you have something to write...Jeremiah 

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Esuric:
What if the majority finds you annoying;

This is why government is inherently corrupt. As Rothbard said, government, regardless of its form, always exists by virtue of at least a passive or apathetic assent of the majority. Government is mob rule.

or what if the murderer of your brother convinces the town that you're insane or a liar?

Hence the evolution of things like "rules of evidence", and so on, in courts of law.

Clayton -

http://voluntaryistreader.wordpress.com
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Anarchist Cain:

scineram:

Cannot exchange services in a libertarian society?

Good to know.

I think what he means to say is 'title-transfers'. Services require either barter or currency [ something I think he implied by 'property' ]

But he wants to ban exchanging services for services.

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banned replied on Sat, Jul 18 2009 3:09 PM

scineram:
But he wants to ban exchanging services for services.

I implied non-property based contracts were non-enforceable, not that they should be banned.

To your point, services are based on property. Time and effort must be exerted in performing them, so exchanging in them is an exchange of resources. Signing a document is not based on any such notion nor is making a promise that doesn't invovle such exchange.

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False. You talked about property exchange. Mutual exchange of services has nothing to do with property exchange.

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banned replied on Sun, Jul 19 2009 12:56 AM

I apologize, I didn't really address my point.

Let me be clear. Simple transferals of services based on "promise" (such as a "you scratch my back, I'll scratch yours" scenario) are not enforceable. However, exchanges in services are validly enforceable when they are backed by performance bonds. If one party fails to perform it's service, the other party would file a lawsuit against them and the court would enforce the payment agreed to in the contract.

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If you are simply asking what makes a contract valid under our existing legal system, the answer is "consideration." A unilaterial promise to do something is not binding. However, if A promises to do X, and, in exchange, B promises to do Y, then there is "consideration." This is often referred to as "quid pro quo," and it is essentially a way of saying that each party must agree to both give and get something as part of the transaction.

It is important to realize that "consideration" is not limited to exchanges of property (as someone suggested in this thread). One person may give property (e.g., money, a dog, a loaf of bread), and the other may give a service (e.g., mow the lawn, wash the windows, do the other party's taxes). Moreover, even if one party agrees to forego something to which it would otherwise be entitled, that would be enough. For example, if person A has the right to sue person B over some matter, the two parties may enter into a settlement contract whereby person A agrees to forego his right to sue B, and, in exchange, person B agrees to pay some money or take some action, etc. That would be enough for "consideration" to be present.

Again, if one person promises to do something but the the recipient of the promised benefit does not promise to give anything in return (or promise to give up something to which that person is otherwise entitled), then there is no consideration, and the promise is not a contract (and is therefore not binding).

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Bostwick replied on Sun, Jul 26 2009 11:43 PM

scineram:

Anarchist Cain:

scineram:

Cannot exchange services in a libertarian society?

Good to know.

I think what he means to say is 'title-transfers'. Services require either barter or currency [ something I think he implied by 'property' ]

But he wants to ban exchanging services for services.

Do you do anything other than misrepresent other's posts?

 

Peace

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Conza88 replied on Mon, Jul 27 2009 12:33 AM

http://mises.org/rothbard/ethics/nineteen.asp

Ron Paul is for self-government when compared to the Constitution. He's an anarcho-capitalist. Proof.
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