The best agreements leave two happy participants. Good agreements leave one or more participants feeling that they have made an honest effort at fulfilling wants or needs. But far too many agreements leave one or more participant holding the bag, unhappy about the exchange, and not knowing how to remedy it.
If a person finds, after the fact, that a contract has bound him to a thing he could not possibly have foreseen, then that person needs to learn at least two other things. Did the second party have clear foreknowledge of the pitfall, and did they intend to catch the first party in that pitfall? And could the first party, by reasonable inquiry, have learned about the pitfall, and what was their risk in encountering it? Valid contracts require a reasonable balance of information, and a reasonable expectation of good intent – a meeting of the minds.
The so-called “social contract,” more than any other leaves the individual helpless against the gang of the State, with no remedy in sight. Most of us are de facto born into a tacit compliance with whatever the State claims is the social contract. Our recognition that this is a raw deal is delayed through many years of indoctrination. When was there a meeting of the minds, and which minds participated in that meeting?
If the two parties have similar bargaining positions, and similar knowledge of both the product in the exchange, in terms of quantity and quality, and the methods of a proposed transaction, then there is a high probability that the contract will be a success (i.e. that it will never need dispute resolution by third parties). If there is not clarity at the outset there is a high probability that the contract will collapse in disagreement. And, from my point of view, there is very little chance that even an objective third party can unring the bell.
Agreements that are in accord with Natural Law allow both parties to have a high expectation of satisfaction. For example, a contract based on the expectation that every action has an equal and opposite set of reactions is likely to succeed. But a contract that attempts to repeal or modify that physical law is destined to fail. Any agreement in ignorance or neglect of natural truths has an equally high expectation of disappointment for one or both parties. For instance, a guarantee to deliver summer vegetables from a farm during its winter season is nearly an impossibility, showing a vast misapprehension of the facts by one or both of the contractors.
Another imbalance which is likely to predict failure is a contract that does not allow equal access to the management features of the contract during its execution. There are entire industries where hidden processes are deployed against the unwary – one party may hide some or all of the processing of transactions. Ponzi schemes depend on hidden processes – the process cannot stand the light of day. The mortgage bubble was largely due to such an arrangement. This type of arrangement is very similar to an intermediary arrangement which often involves more than two parties – sort of a Peter robs Paul to pay Luke who works for Matthew who pays a finders fee to Peter.
Another bomb waiting to explode is the wishful thinking contract whereby the first party asks the second party to do what the second party doesn’t have any idea of how to do. Is anybody thinking of the Affordable Care Act website? The government wished this was a no-cost implementation, but realizing the emptiness of that wish, then wished for someone who could be paid to do it. The successful contractor hoped that nobody noticed that they had never done this kind of thing before, and they wished that the government would include no non-performance penalties in the contract.
The only way individuals or collectives can enter a contract is if the contract is clear to all parties, precise as to what is being exchanged, and transparent as to how it is implemented. The best contract is a handshake. If the other party messes up, just walk away to find another individual who has what you want, and who wants what you offer. This is a manifestation of Natural Law, having nothing to do with the artificial justice system, nor the blight of artificial legislation, nor the obtuse administration and practice of artificial rule making. Lawyers and judges have constructed an ever contorting blob of impenetrable buzz, so that users are totally dependent on their arcane ministrations. I say leave them to stew in their own juices. If two reasonable people don’t know what they expect from one another, no amount of lawyering and court intervention can clarify the matter.
It’s even worse when there is interposed a mysterious, unwritten “social contract,” where the wonky collective of the State just makes up stuff as they go along. How does NSA surveillance happen under an honest contract?
So, when we can see how many truly lousy deals, suspect premises, and self-deceivers there are, hiding under cover of a presumed fair or agreeable contract, how is it that we can talk of such a fogbound creature as a “social contract,” much less any half-hearted attempt to codify such a thing in constitutions, bills of rights, legislation, legal precedents, State policies, or other doctrines?
We have no legal protection from the State for any peril when it comes down to day-to-day matters. All the legislative trimmings are those of an imperial court. All of those protected are members of the order. We still operate under a system that assumes that there is some special class of humans who can direct the lives of others. What is the foundation for such a conceit? Frédéric Bastiat asked this question 164 years ago:
“Do not the legislators and their appointed agents also belong to the human race? Or do they believe that they themselves are made of a finer clay than the rest of mankind?”
My questions will not be graced with an official response, since Bastiat’s far more eloquent queries have as yet not been answered.