FORMATION

In addition to the stated elements, current legal systems demand that contracts have other properties. The intention of these properties is to mold contracts to the letter of the law, whether they make sense or not. Let us emphasize this again. Other properties are there not to improve the contracts, but to improve the job of judges should contracts are disputed in court. These properties are nothing more than the off-loading of menial and useless tasks to contracting people. In other words, they are there to limit rights and possibilities and to create waste. They are detrimental to contracting people.

We will now analyze those properties in order to demonstrate the inferiority of current Democratic systems when compared to Absolute Austro-Libertarian systems.  Those properties are as follows.

 

Capacity To Contract

A person must have the capacity to contract in order for the contract to be lawful. We have discussed this issue in Part 2 of this lesson and it is therefore not necessary to repeat it here.

 

Contracts Must Be Lawful

Of course! The law, any law, is all about what is not allowed. If everything would be allowed, laws would have no reason to exist. And so, contracts must not deal on goods and services that are not allowed by the law.

We have a large issue with this one. As we have said in numerous occasions, governments have privileges, not rights. As said privileges originate in people just like you and me, from our rights to be precise, it is our inalienable right to take them from the government any time we wish to do so. Therefore there is no subject that is “illegal” if we, the contracting people, decide that it is not. The need for a contract to be “legal” is a fiction. By the very fact that we, the people are sovereign, we can take this sovereign privilege away from the government any time we want. There is no need for any contract to be lawful. None whatsoever.

On a practical note, it is obvious that beyond an issue of rights versus privileges, there is the issue of limitations. By forcing a contract to be lawful, the contracting parties are subjected to arbitrary limitations. Their freedom is being limited without their voluntary agreement. This goes against everything we believe in, therefore we utterly reject this premise on theoretical as well as practical grounds.

 

The Form Of The Contract Must Be Legal

This means that for a contract to be “legal” (i.e. valid), it must contain the exact minimum elements that the laws of a given country dictate. The problem is that those requirements vary from country to country. Furthermore, those requirements may also vary from contract type to contract type. If the formalities of a contract are not present, said contract will be declared null and void by the courts.

Does this sound like an outrage to you? Allow as to rephrase this. A group of un-elected, pretty much un-removable people, get to decide what must be in a contract. If you don’t put this information in it, they will decide that you don’t have contract. They will do this against your will and there is nothing you can do about it. Sounds like something you are happy with? We didn’t think so.

Absolute Austro-Libertarian elements of a contract are only two: offer and acceptance. There are no other formal requirements. The premise is that a contract is an agreement between two sovereign people. They, and only they, are qualified to determine what goes into their contract. Period!

 

Parties Must Intent To Create A Legal Relationship

This concept is exactly the same as the one dictating that contracts must be lawful. According to laws, there are relationships that are legal (allowed) and illegal (dis-allowed). Contracts can only be legal if they describe legal relationships.

However, there is a big problem with this. As we are sovereign and not the government, this means that the government cannot dictate to us what kind of relationships we may enter into and which kind we may not.  Our rights trump their privileges every single time without exception. The government may have the legal authority to deny us our rights, but we have the right to dismiss said authority.

On a more practical note we again find the issue of limitations. As we absolutely own our bodies, we can absolutely contract with any other person. The demand to only form a “legal relationship” is contrary to this, most basic, Absolute Austro-Libertarian belief. Therefore, we reject it wholeheartedly.

 

Parties Must Consent

This term is similar to the concept of agreement with the exception that it accepts the concept of “duress” which we reject. We already explained this difference in the second part of this lesson.

 

Other Formalities

There are other formalities, which are nothing more than extra impositions. 

In some countries all contracts over a given value must be written. There is no reason for this, other than the legal justification (read excuse) to “protect” contracting people from bad contracts. In reality, it simply diminishes our freedom. 

If a person signs a contract without actually reading it, this contract is legal unless a legal defense can be mounted to dismiss it. In the current Democratic system, there are many possible defenses, which we will analyze in detail in the upcoming parts of this lesson.  However, in an Absolute Austro-Libertarian system, the only possible defense is to prove that the signatory is incapable of understanding the contents of the contract.

We have described before the concept of implied contracts. There is another type of such contract, which is called “contract implied in law”. This type is called a quasi-contract and it is defined as an obligation created by law for the sake of justice or to avoid unjust enrichment. The remedy in case of breach of such contract is the “fair market value of goods or services rendered”.

This one is truly an insult added to an injury. To begin with, there cannot be a contract “implied” in law because there is no acceptance. Laws are impositions, not offers. No offer means that acceptance is impossible. This is not a voluntary agreement, it is an order.

Because of this “tiny” flaw, they are also called quasi-contracts. This term is straight out of a con artists’ manual for creative law.  The term “quasi” means “resembling”, “seeming” or “having some, but not all the features of”. And so, the law is speaking about something that “resembles” a contract but does not have all its features. In other words, it is a non-contract contract. Only legalese can achieve such a degree of concentrated contradiction in two words!

Then we have “unjust enrichment”, which is a figment of legal imagination. As we have previously explained, an economic transaction is a purely subjective affair. What is just and what is unjust varies from person to person. It is simply impossible to determine just and unjust in an objective manner. Economists have tried for centuries and failed. Let us repeat this again: there is no such thing as “unjust enrichment”.

And lastly, we have the most stupid concept of them all. The “fair market value”. This concept assumes that somehow, magically, the judge can know what not even market participants know: what is the value of an economic transaction. As all transactions are subjective, until the very moment that a transaction is executed, all the intentions of the negotiating people are just that: intentions. It is only through the execution of the transaction that we can know what the value was. For that transaction. For the next one, it will probably change. It is impossible to figure out what a “fair market value is” because all transactions are different!!

Therefore, all “contracts implied in law” are just logical garbage, legal sewage. Plain and simple.

 

Invitation To Treat

This one is another wonderful figment of the prodigious legal imagination. Consider this example. You read an advertisement in a newspaper stating that there is a product on sale at a deeply discounted price. You go to the specified place and they refused to sell it to you at the advertised price. You sue them in court and the judge agree with them!!!

How is this possible? Because the offer was not a real offer. It was an invitation to bargain simply because the seller cannot ensure that all customers who so desire will get one.

In other words, I make an offer and the offer gets dismissed after an acceptance simply because I don’t have enough goods to sell!!!

Yes, this is yet another example of a contract non-contract.

Of course, unquestionably, this is rubbish. An offer is an offer and an acceptance an acceptance. If a person cannot deliver what was promised, this is a breach of contract, plain and simple. This is how common sense dictates it should be and it is also how Absolute Austro-Libertarians see it.

 

Third Parties

Yet another idiocy. Consider this. Three people, John, Mary and Marissa. John owes Mary a sum of money. John signs a contract with Marissa. John pays Marissa and stays in debt with Mary. It makes sense. John’s debt with Mary has nothing to do with John’s contract with Marissa. This is common sense. This is the Absolute Austro-Libertarian way. In legal terms, this is called the doctrine of privy. If Mary was concerned with her debt, she should have stipulated in the loan that she will be paid first. Plain and simple. Buyer beware.

However, in the make belief world of the Democratic judiciary, Mary magically becomes part of the contract between John and Marissa. Mary was not part of the offer or acceptance in said contract however; the judiciary says that she now is just because John owes money to her. Preposterous! Ridiculous! Contracts are affairs between contracting people and nobody else. This “injection” of a third party into a contract is totally, completely and utterly arbitrary and insulting.

Note: please see the Glossary if you are unfamiliar with certain words.

Continue to Contracts Are The Key To Coexistence - Part 4