Memorandum of Law & Fact

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"[I]n the early 1720s, the libertarian English writers John Trenchard and Thomas Gordon, in their Cato’s Letters-widely influential in forming the attitudes of the American colonies-wrote as follows:

All men are born free; liberty is a gift which they receive from God himself; nor can they alienate the same by consent, though possibly they may forfeit it by crimes. No man . . . can . . . give away the lives and liberties, religion or acquired property of his posterity, who will be born as free as he himself was born, and can never be bound by his wicked and ridiculous bargain." 9

In recognition of the fact that Cato’s Letters had an important influence on the thinking of the founding generation, and also because this issue of the alienability 10 of natural rights via consent goes to the core of the title-transfer model, it’s necessary to ask two questions: (i)Can people consent to their partial or total enslavement, i.e., to the alienation of their natural rights? (ii)Can people arrange to have their "posterity" partially or totally enslaved, i.e., to alienate their posterity’s natural rights? The answer to the second question is an emphatic "No!". This memorandum addresses this issue by allowing for the existence of denizens. 11 But the first question is more difficult and is the core subject of this memorandum. — The Declaration of Independence says that such rights are unalienable Rights. But what does this mean in regards to consensual agreements and contracts? In essence, the remainder of this memorandum will be spent answering these questions about consensual alienation.

Rothbard ends Chapter 19, "Property Rights and the Theory of Contracts", with the following paragraph:

The current law of contracts is an inchoate mixture of the title-transfer and the promise-expectations approaches, with the expectations model predominating under the influence of nineteenth- and twentieth-century legal positivism and pragmatism. A libertarian, natural-rights, property-rights theory must therefore reconstitute contract law on the proper title-transfer basis. 12

Given the debased status of the American legal system, it’s difficult to argue with Rothbard’s characterization of the "law of contracts" as "inchoate". He’s saying that it’s a half-baked conglomeration of two different concepts of what a contract is. He believes that these two conceptions are competing for dominance in the arena of contract adjudication. According to Rothbard and Evers, the two conceptions are the "title-transfer" approach and the "promise-expectations" approach. Rothbard is clearly saying that he believes the promise-expectations model is dominating this competition. In the first paragraph in Chapter 19, he bemoans the fact that many "libertarians" default into believing in the promise-expectations model. He says,

Unfortunately, many libertarians, devoted to the right to make contracts, hold the contract itself to be an absolute, and therefore maintain that any voluntary contract whatever must be legally enforceable in the free society. Their error is a failure to realize that the right to contract is strictly derivable from the right of private property. 13

He’s right to bemoan the "absolute" belief in the promise-expectations model. A strictly secular conception of the right to contract may indeed be "derivable from the right of private property". But the biblical framework makes it obvious that the right to contract is much more fundamental than secular logic, alone, is able to reveal. The Rothbardian conception must remain within the larger context targeted by the framers in order to retain its validity.


Every contract, by definition, contains promises. Promises are necessary ingredients in the creation of every contract. If there are no promises, then there is no contract, because where there is no promise, there is no promise to perform; and where there is no promise to perform, no obligations are placed on any of the parties; and where there are no obligations, there are no benefits accruing to the other party by way of the obligations; and where there are no benefits, there is no consideration; and where there is no consideration, there is no incentive to enter the contract in the first place. Where there is no promise, there is no contract. Implicitly, Rothbard admits this by using the verb "agree" as a euphemism for "promise" in the illustrative cases he presents in Chapter 19. But he never admits explicitly in The Ethics of Liberty that a promise is an inevitable component of every contract. Both he and Evers choose instead to maintain an assault on the "promise-expectations" model of contracts.

Wherever a promise exists, whoever believes in the promise is expecting that it will be fulfilled. If A promises B that A will do X, why would B ever enter the contract if B did not have some reasonable expectation that A would deliver on A’s promise? Without B’s expectation, B would never enter the contract. — This line of reasoning shows that both promise and expectation are necessary, inevitable, and defining components to the creation of every contract. But the fact that Rothbard, Evers, and company appear to completely overlook this fact is not sufficient reason to dismiss their arguments with complete incredulity. This is because they have a legitimate grievance.

Williamson Evers sees the same lack of cohesion in the adjudication of contracts that Rothbard sees. He says,

Many of the problem areas in the law of contracts stem from the historical fact that the law of contracts has been fashioned out of material that does not fit together logically. Some jurists view contracts as conventions serving to secure people’s expectations. . . . On the other hand, other jurists, particularly those who base their legal theory upon the natural rights philosophical tradition, view contracts as instruments by which rights to things (both present and future alienable goods) are assigned, delineated, transferred or exchanged. 14

So according to Evers, the "problem areas in the law of contracts" are problem areas because "promise-expectations" jurists are wrong while the "natural rights" jurists are right, and all these problems would go away if the promise-expectations jurists would follow their smarter colleagues. — Rothbard and company have a legitimate grievance against the status quo in contract law. 15 Even so, in their efforts at resolving their grievance, they have exceeded legitimate boundaries. They have a legitimate complaint against "promise-expectations" jurists because the latter do not adequately honor private property rights, i.e., natural rights. In their efforts at correcting the problem, Rothbard and Evers discard the nexus between promise/expectation and lawful contracts, and they also discard the social contract as a foundation for lawful government. From the perspective of the hermeneutical prologue, the prerequisites to ridding contract adjudication of its "inchoate" inclinations are three: (i)making a clear distinction between the promise-expectations theory of contract-formation and the promise-expectation theory of contract-enforcement; (ii)clearly defining what constitutes an unconscionable contract by determining what property is alienable and what property is not; and (iii)clearly defining the lawful jurisdictions of ecclesiastical courts so that they do not exceed or neglect such jurisdictions. 16

Sample Case

In his criticism of the promise-expectation theory of contracts, Rothbard presents the following case:

Suppose that a celebrated movie actor agrees to appear at a certain theater at a certain date. For whatever reason, he fails to appear. Should he be forced to appear at that or at some future date? Certainly not, for that would be compulsory slavery. Should he be forced, at least, to recompense the theater owners for the publicity and other expenses incurred by the theater owners in anticipation of his appearance? No again, for his agreement was a mere promise concerning his inalienable will, which he has the right to change at any time. Put another way, since the movie actor has not yet received any of the theater owners’ property, he has committed no theft against the owners (or against anyone else), and therefore he cannot be forced to pay damages. 17

He says the "movie actor agrees". This is a euphemism for the movie actor and the theater owners made promises to each other, which shows that Rothbard implicitly agrees that promises are a necessary ingredient in contract formation. Then the actor "fails to appear", meaning that the actor broke his promise. Under the current "inchoate" state of contract adjudication, the actor would probably not be "forced to appear"; although the court might force the actor "to recompense the theater owners". Under a pure promise-expectations model, the actor would be forced to appear, or at least to recompense the owners. But under Rothbard’s title-transfer model, the court would neither force the actor to appear nor force the actor to compensate the owners. This is because the actor’s "agreement was a mere promise concerning his inalienable will, which he has the right to change at any time". When Rothbard says that the presumed contract was a "mere promise", he means that the actor had not "received any of the theater owners’ property". The actor could therefore not be accused of "theft".

This case displays the basic assumptions of the title-transfer model: (i)Rothbard presumes the non-existence or irrelevance of religious ecclesiastical courts. (ii)Rothbard presumes that both promises and expectations "are only subjective states of mind, which do not involve transfer of title". (iii)Rothbard assumes that even if penalties for non-performance were written into the contract, the contract is unenforceable if there is no title transfer. (iv)Rothbard believes that any promise concerning alienable labor is unenforceable because it is a promise with respect to the "inalienable will". In other words, Rothbard assumes that the will, the human ability to choose, is inalienable, and that this inalienability extends to promises about one’s labor.

Importance of Penalties

Based on the idea that penalty should be proportional to offense, it’s certainly true that the actor should not be forced to appear. After all, how does anyone force anyone else to do anything? In the words of the godfather, by giving them an offer they can’t refuse. In other words, with threats. By giving them a choice between something bad and something absolutely horrible. Use of such force to persuade must always be measured against the original offense. The actor’s failure to appear certainly didn’t deserve threats of having his children wiped out, or his legs broken, or his home looted. In fact, in a secular jurisdiction that is concerned only with the protection of property, it’s very difficult to determine what threat is deserved. Since Rothbard mentions no penalties or remedies written into the original contract, it’s necessary to assume that there are none in the original contract. So even if there is real ex contractu damage to the owners for which the actor is responsible, the lack of pre-defined penalties for non-performance makes it difficult to conclude that the actor should be forced to appear.

Rothbard also asks, "Should he be forced . . . to recompense . . . for . . . expenses incurred . . .?". The issue again is this: How can the theater owners force the actor to recompense? If it’s assumed that they will use a secular ecclesiastical court, rather than seeking to find equity through a vigilance committee or through mafiosi, then the same question goes to the court: How, Judge, are you going to force the actor to recompense? The judge’s methods are the same as the mafiosi’s: by giving the actor an offer he can’t refuse. The only difference between the judge and the mafia is that the judge has the backing of a monolithic police force, and the judge is backed by the awesome mythology of statism. Force and myth are hardly substitutes for equity. So it’s necessary to conclude again that if there is no penalty for non-appearance written into the original contract, then in a secular jurisdiction, the actor should not be forced to recompense.

Even though there is agreement between the hermeneutical prologue and Rothbard about his conclusions, the hermeneutical prologue’s rationale for eschewing forced appearance and forced compensation are different from Rothbard’s. Rothbard says that the actor’s "agreement was a mere promise concerning his inalienable will, which he has the right to change at any time". According to this view, the human will, i.e., the human ability to choose, is so exalted that no human being can ever burden another human being’s choices. The exception to this that Rothbard and company acknowledge, is indicated by the above quote of Cato’s Letters: "All men are born free; liberty is a gift which . . . possibly they may forfeit . . . by crimes." If this criminal forfeiture of liberty is lawful, it is necessarily ex delicto. In addition to this ex delicto class of justifiably alienated wills, according to the hermeneutical prologue, it’s necessary to also acknowledge another class of exceptions that arise ex contractu, relations like these: parent-child, guardian-ward, and mentor-dependent contracts. Even if Rothbard doesn’t acknowledge these latter exceptions to his will-inalienability rule, the fact that he acknowledges the ex delicto breed of will alienation proves that the will is not inalienable in an absolute sense.

According to the hermeneutical prologue, the human will is merely the power to choose, nothing more, nothing less. To exalt it into something more is merely to enter into idol construction, and to thereby remove the argument from the legitimate arena of argumentation about the freedom of the will, to a religious arena in which the will must be worshipped, and therefore cannot be the object of legitimate argumentation. It’s necessary to acknowledge that Rothbardian libertarianism suffers this flaw, even while it’s also necessary to acknowledge the Rothbardian contribution to secular contract adjudication.

Regarding ex delicto alienation of the will, if A damages B’s primary property, then A’s liberty is forfeit proportional to the damage to B’s primary property. Such damage to primary property generally demands an action ex delicto and not an action ex contractu. Evidence shows that Rothbard and Evers agree that such a public or private delict deserves retribution or recompense or some penalty or remedy ex delicto. 18 But damages that arise ex contractu arise by way of non-performance of contractual obligations. Damages that happen in any way other than through a contract are damages that may give rise to an action ex delicto (assuming human culpability), but not to an action ex contractu. Clearly Rothbard is not acknowledging that an action ex contractu is justified in this case. The damage in this contract between the actor and the theater-owners, brought on by the possibility that the theater owners spent a lot of money for advertising and preparing for the event, according to Rothbard, is simply part of the risk of doing business. The issue that is crucial to Rothbard is that the actor "committed no theft against the owners". "Theft" is crucial to the title-transfer model. As indicated above, the first paragraph of Chapter 19 says, "[T]he only enforceable contracts . . . should be those where the failure of one party to abide by the contract implies the theft of property from the other." To Rothbard and company, since "the actor has not received any of the theater owners’ property", the actor could not possibly have stolen anything from the theater owners. Therefore the contract is unenforceable. Or so the analysis goes thus far.

If the owners lost a lot of money via the actor’s non-appearance, it’s obvious that they are damaged by way of the actor’s non-performance. The damage is obviously ex contractu. Theft is usually assumed to be a crime, and therefore assumed to give rise to actions ex delicto. But the kind of theft that Rothbard is talking about in his theory of contracts is theft that happens by way of non-performance. His use of the word, "theft" is essentially a hyperbolic reference to transfer of title, ownership, possession, etc., in violation of a contract’s performance requirements. He says that even if the owners were damaged by the actor’s non-performance, there was never any transfer of title, ownership, possession, etc., and therefore no grounds for executing contractual penalties against the actor, even if such penalties were written into the original contract. Under such circumstances, Rothbard claims the contract is unenforceable.

From the perspective of the hermeneutical prologue, it’s true that this contract is unenforceable. But from the same perspective, it’s necessary to be suspicious of Rothbard’s claim that there is no theft, and it’s also necessary to be suspicious of his analysis of this case on other grounds. In the agreement between the actor and the theater owners, when the two parties made promises to each other, it’s possible that they surrendered property interests to one-another. The actor may have given the theater owners an interest in his labor as an actor. Likewise, the theater-owners may have given the actor an interest in their land and labor as sponsors of the event. When the actor failed to show, and the theater owners wanted compensation and therefore took the case to a secular ecclesiastical court, and the theater owners submitted their copy of the contract to the court as exhibit A, then the three issues to the court were these: (i)Does the contract give the court in personam jurisdiction over the parties to the contract? (ii)Does the court have subject-matter jurisdiction over the contract? (iii)Does the court have geographical jurisdiction over the contract? If the court determined that it probably had jurisdiction on all three counts, it would proceed to hear evidence. The core issue the court would then need to decide is to what degree the contract is enforceable. Is the contract unenforceable because it’s unconscionable? In this case, there’s nothing unconscionable about this contract. On the other hand, is the contract unenforceable because it offers no remedies or penalties for non-performance on either side? Rothbard mentions no remedies or penalties written into the contract, so it’s necessary to assume that none exists. So the court finds itself needing to create remedies and penalties for these parties who neglected to insert such remedies and penalties into the original contract. Is the court obligated to modify the contract by creating such terms out of nothing?

If parties to a secular contract fail to write penalties into their contract, then the court should consider something essential about human law. A moral proscription that is not accompanied by a prescribed penalty does not suffice as human law. If the court wants to avoid putting itself into the position of being a perpetrator of a delict against one of the litigants, then it’s important for the court to assume that the parties did not intend for the contract to be enforced as positive law, because human law by definition demands the existence of human-executed penalties. If the parties did not intend for the terms of the contract to be positive law, then it would be gross presumption for the court to find otherwise. If the parties intend for it to be positive law, then they should provide evidence of that intent by showing the penalties in the original contract.

This is where the hermeneutical prologue is in agreement with Rothbard. It’s possible that Rothbard may be wrong in saying that there is no "theft". In fact, it’s possible that the actor has stolen (in Rothbard’s hyperbolic sense) the theater owners’ interest in his labor, an interest that he offered to the owners at the initiation of the contract. If the court could reliably put a monetary value on the property interest that the actor gave, then perhaps the court could resolve the dispute in the owners’ favor by giving the actor an offer he could not refuse, namely, compensate the owners or else. But given that this is a secular ecclesiastical court, and given that the property interest that the actor gave is difficult to monetize, it would be more appropriate for the court to treat the case like this: "If you, Actor, and you, Owners, care so little about your property that you enter contracts that have no penalties or remedies for non-performance, then you can suffer the consequences. I, the judge, recognize that this is a conscionable contract, but I am offered insufficient evidence to render a conscionable decision. I find this contract outside my limited subject-matter jurisdiction because you have offered insufficient evidence that you were serious about transferring title to your respective property interests. I therefore lack evidence for conscionable enforcement."

Even though Rothbard believes that there is no transfer of property while the hermeneutical prologue does not hold that, the property interest is so difficult to define in rigorous monetary terms that it would be imprudent for the judge to demand that the actor compensate the theater owners. Because of insufficient evidence, such a demand would probably create a delict perpetrated by the court. The same is true if the court forced the actor to appear. It’s therefore necessary to agree with Rothbard’s final solution to this case. But Rothbard and the hermeneutical prologue reach this conclusion by a different means. The theater owners should have gotten a performance bond, or they should have written penalties and remedies into the contract with sufficient specificity to allow lawful enforcement.

Summary of this case: Since this is a secular contract, and since there is no evidence to the contrary, it’s necessary to conclude that the actor’s agreement with the theater owner was unenforceable. The actor’s will is probably inalienable in law, but whether it’s inalienable in fact is a different issue. His labor is not inalienable because labor is necessarily alienable in a free market because such alienation is inherent in earning wages. But the actor’s promise of future labor may be inalienable, but perhaps it’s not. Even though the actor may have surrendered a property interest in his labor to the theater owners, there is insufficient evidence to enforce the contract in any way. The court essentially lacks subject-matter jurisdiction.

Title-Transfer & Promise

Proof of contractually prescribed penalty is important. Proof of property transfer is also important. Pertinent to both of these points is this quote by Evers of Lysander Spooner:

A man may make as many naked promises to pay money, as he pleases, and they are of no obligation in law. On the other hand, if a man have received value from another, with the understanding that it is not a gift, or that an equivalent is to be paid for it, the debt is obligatory – that is, the obligation to deliver the equivalent is binding -whether there be any formal promise to pay or not. 19

If possession or title has been clearly transferred, and it’s clear that such transfer is not a gift, then the default status of the transfer is that it’s a debt that must be repaid, or a bailment that the bailee must return to the bailor. The default obligatory remedy/penalty is repayment or redelivery of the entrusted property. So under such circumstances, the penalty need not be spelled out in black and white. This is because the purpose of a secular ecclesiastical court is to resolve cases equitably (meaning with minimal damage to just claims to property), and doing so in such cases doesn’t require the penalty to be spelled out, because it’s obvious. But of course the transfer of property in the actor-owners case was not obvious.

Because of different priorities in secular versus religious ecclesiastical courts, they inevitably have different default remedies and penalties. As evident in the actor-owners case, secular ecclesiastical courts that follow the property-interest model might presume that property interest does not automatically transfer the instant a promise regarding such property is made. This allowance has to be made because the primary function of a secular social compact is to protect primary and secondary property rights, where protection of such rights is a function of the global covenant. This means that the primary function of a secular ecclesiastical court is to resolve contract disputes with minimal damage to just claims to such primary and secondary property.

In a religious social compact, the presumption of the religious ecclesiastical court may be that property interest transfers simultaneously with the making of the promises. If such an assumption is not made, the promises that create the religious social compact may carry no weight. For example, suppose a new member joins a religious community, and at the time of joining enters into a contract with the rest of the community. The new member promises to abide by the community’s moral code, which he knows includes a high regard for sexual purity. He knows that this religious social compact has not established any explicit penalties specifically for fornication. But he also knows that the maximum penalty for non-delictual violation of the moral code is expulsion from the community and forfeiture of land in the community that’s owned by the violator. He also knows at the time of joining that violations of the moral code are tried by the religious social compact’s ecclesiastical court, which consists of a board of elders. After promising to abide by the moral code, this new member fornicates with his sheep while, unbeknownst to him, his neighbor watches. He goes before the board of elders and the case is treated as a non-performance claim under a bilateral contract, the plaintiff being the people of this religious community and the defendant being this new member. The court finds in favor of the plaintiff and determines that the penalty is the maximum under their social compact.

This case begs the question: Under the title-transfer model, how could this community ever enforce their moral code when the title-transfer model requires more than a mere promise, and requires instead an actual transfer of title? The most obvious answer to this question is that the new member would transfer absolute title to his land to the religious community at the same time he promises to abide by the community’s moral code. The most obvious objection to this arrangement is that it sounds a lot like Jim Jones/Jonestown-style communism – people handing over everything they own to the proletariat’s dictator for the sake of participating in the community.

The title-transfer model may work fine in a secular ecclesiastical court. But it is deeply flawed in a religious ecclesiastical court. Here’s a reasonable solution to this problem: Secular ecclesiastical courts exist to resolve contract disputes with minimal damage to just claims to property, under the global covenant’s definition of property. Because of this, the presumption in secular ecclesiastical courts must be that property interests are transferred only when it’s clear and obvious that they are transferred. In contrast to this, religious ecclesiastical courts exist primarily to enforce the religious community’s moral code on parties to the religious social compact. The parties are people who by definition have promised to abide by such moral code. Because of this totally different orientation under the religious social compact, the presumption in religious ecclesiastical courts must be that property interests transfer simultaneously with promises, and are limited by the substance of the promise. — In the case of this fornicator, the property interest that he would transfer to the religious community at the time of his initial promise would look like this: "The land that I’m hereby purchasing in this community will remain mine as long as I choose to remain a member in good standing of this community, and as long as I do not violate this community’s moral code so extremely that I am expelled from the community. I acknowledge that under the latter condition, I forfeit all claim to ownership of the land, and the land will be sold to other members of the community."

Clearly promises must carry radically different weight under religious versus secular social compacts.

Focusing again on secular contracts: The contract between the actor and the theater owners was secular, meaning that by default under such contract, non-performance disputes are meant to be settled in a secular ecclesiastical court. Furthermore, under the property-interest model, when the actor and the theater owners signed their contract, each party may have given property interests to the other party in exchange for the other’s property interest. More specifically, the actor may have given the owners an interest in his labor as an actor. Likewise, the owners may have given the actor an interest in their land and labor. When the actor didn’t show up to perform, and the owners filed suit against him in a secular court to recover damages caused by the actor’s non-performance, the court was presented with a problem: Does the court recognize the exchange of property interests or not? As shown above, the focus of a secular court must be on executing justice without perpetrating delicts in the process. This means that the contract’s lack of articulated penalties tends to void the presumed exchange of property interests. The fact that it may be difficult to measure such property interests in pecuniary terms also tends to void the presumption of that exchange. There is at least one more important factor that tends to make the contract unenforceable in a secular court: As Rothbard puts it, "a man can alienate his labor service, but he cannot sell the capitalized future value of that service". 20 In effect, the actor is presuming to sell the capitalized future value of his service to the theater owners. According to Rothbard, the actor cannot do this because the actor would be thereby alienating his will. This is an act of selling oneself into slavery. According to Cato’s Letters, one cannot alienate the liberty that God gives to every human, even by consent. But when taken to its rational limits, this belief would make marriage contracts unenforceable, along with all religious social compacts. That’s why it’s necessary to make a radical distinction between secular social compacts and religious social compacts, and between secular ecclesiastical courts and religious ecclesiastical courts. For the sake of keeping secular courts from perpetrating delicts, it’s necessary to make this further concession to Rothbard’s view. Within secular courts, it must be true that "a man can alienate his labor service, but he cannot sell the capitalized future value of that service". In the same way that a secular court cannot enter into adjudication of a case in which there is no tangible issue to be adjudicated, in which there is therefore no cause of action, it should not attempt to adjudicate a case in which the issues and alleged damages are too murky for a reliable judgment. Any secular court that ventures to pass judgment in such a case is a court cavalier about perpetrating delicts against litigants.

In contrast to both the property-interest model arising out of the hermeneutical prologue, and Rothbard’s title-transfer model, jurists who only recognize the promise-expectation concept of contract enforcement will vacillate based on sentiments between assuming that title-transfer accompanies promise, as in a religious social compact, and that title-transfer does not accompany promise, as in a secular social compact. They may see that the actor made a promise to the owners, that the owners’ expectations were not met, and that the actor therefore needed to compensate the owners. Or perhaps the actor will put on such a convincing show in court that the court will be swayed to be partial to the actor. Either way, a case like this is extremely error-prone. It becomes fiat equity. Such courts are breeding grounds for bribery and corruption. By assuming jurisdiction where there is none, such jurists expand the power of the state beyond its lawful boundaries. That’s why it’s necessary to agree with the following quotes, at least so long as they are assumed to be limited to secular courts:

Rothbard: "mere promises or expectations cannot be enforceable, but only contracts that transfer property titles". 21 — Although it may seem a bit cosmetic, it’s important to translate this into language compatible with the hermeneutical prologue. So the proper expression here would be, . . . only contracts that transfer titles [to property interests].

Rothbard: "For the important question is always at stake: has title to alienable property been transferred, or has a mere promise been granted?" 22

Evers: "Why should the law enforce promises? Keeping one’s promises may well be part of leading a good, morally correct life. But being considerate toward one’s spouse is also morally excellent yet it is not a concern of the police. Keeping promises may enhance one’s reputation. But that should be incentive enough to keep promises normally, without judicial involvement. If law enforcement is to take on the task of enhancing people’s reputations, irrespective of their wishes, let this task be argued for directly. Many aspects of social life may well be facilitated, as Pound argues, by stability and predictability. But the marketplace can meet consumer demand in these areas. In some cases, insurance schemes may be used to pool risks. In other cases, performance bonds may be used to make erratic conduct costly. Both these marketplace remedies require only a legal approach treating contracts as transfers of title. Thus, despite Pound’s eloquence, it is not immediately clear that courts and law enforcement agencies should hold people to their promises per se." 23

Evers: "It is not promising which is essential, Spooner noted, but rather the transfer of title to an alienable good. Such a title-transfer model for the law of contracts is an alternative to the expectations-oriented approach. Both the title-transfer model and the promised expectations model are more logically defensible and consistent than the present mixed content of the law of contracts." 24

Evers: "People cannot really have a property right to their expectations, which are mere subjective mental states. Neither should the law attempt to give them any such rights." 25

Here’s another of Rothbard’s illustrative cases where Rothbard and the hermeneutical prologue reach similar conclusions, but for different reasons:

Suppose that A promises to marry B; B proceeds to make wedding plans, incurring costs of preparing for the wedding. At the last minute, A changes his or her mind, thereby violating this alleged "contract." . . . Logically, the strict believer in the "promise" theory of contracts would have to reason as follows: A voluntarily promised B that he or she would marry the other, this set up the expectation of marriage in the other’s mind; therefore this contract must be enforced. A must be forced to marry B. 26

Rothbard is setting up a strawman here, because virtually no one in the secular arena in modern America would really conclude that "A must be forced to marry B". Rothbard admits that he’s setting up a strawman in the next paragraph:

As far as we know, no one has pushed the promise theory this far. Compulsory marriage is such a clear and evident form of involuntary slavery that no theorist, let alone any libertarian, has pushed the logic to this point. Clearly, liberty and compulsory slavery are totally incompatible, indeed are diametric opposites. But why not, if all promises must be enforceable contracts? 27

It’s safe to say that most legal scholars (especially these days) do not claim that "all promises must be enforceable contracts". Most rather claim that where promises exist and where there is real consideration, whatever that is, a contract exists. — On its face, it may appear that the sensible thing to do is to have the party that reneges reimburse the other party for at least half of the offended party’s expenses. But this runs into the same guesswork as in the actor-owners case. It’s better for a secular court to avoid running the high risk of turning the court into a perpetrator of delicts, thereby making the court no better than an agent of organized crime. If people in the secular arena want their contracts enforced in secular courts, then they need to explicitly indicate when property-interest titles transfer and what penalties and remedies run with such transfers, and they need to avoid attempting to sell capitalized future value of labor service. Secular courts, whose subject-matter jurisdiction is limited to physical property, have no business trying to read the minds of their litigants.


The old "breach of promise" suit forced the violator of his promise to pay damages to the promisee, to pay the expenses undergone because of the expectations incurred. But while this does not go as far as compulsory slavery, it is equally invalid. For there can be no property in someone’s promises or expectations; these are only subjective states of mind, which do not involve transfer of title, and therefore do not involve implicit theft. They therefore should not be enforceable, and, in recent years, "breach of promise" suits, at least, have ceased to be upheld by the courts. The important point is that while enforcement of damages is scarcely as horrendous to the libertarian as compulsory enforcement of the promised service, it stems from the same invalid principle. 28

It’s necessary to agree that in a secular "breach of promise" suit, "enforcement of damages is scarcely as horrendous . . . as enforcement of the promised service". It’s necessary to also agree that where no interest in property accompanies the promise, "enforcement of damages" and "enforcement of promised service" stem "from the same invalid principle", the invalid principle being that a promise with no transfer of property deserves enforcement. Such a promise deserves enforcement in neither secular ecclesiastical courts nor religious ecclesiastical courts. But as indicated above, the presumption in a religious court is prone to be towards property interest transferring with promise, while it is the opposite in a secular court. So it’s necessary to agree that in a secular court, both promise and expectation are merely subjective mental states. But in a religious court, expectations are merely subjective mental states but promises are presumed to be more than mere mental states, because property interests are presumed to transfer with promises in such religious courts.

In a secular court, a promise is purely and only an expression of intent. It is merely a subjective mental state because intent is merely a subjective mental state. In a religious court, a promise is more than merely an expression of intent, and more than merely a subjective mental state. In all courts, an expectation is merely a subjective mental state. Mental states are necessary prerequisites to the formation of any contract, but mere subjective states of mind are absolutely inadequate to reliable contract-enforcement.

On top of these points of agreement with the title-transfer model, the hermeneutical prologue must add the following: If the agreement to be married involved an explicit agreement regarding wedding expenses and preparations, then the agreement involved a real property interest in such land-and-labor. But that doesn’t make the contract enforceable in a secular court. If the contract contains explicit penalties and remedies for non-performance, then the contract is much more likely to be enforceable.

Property interests are no more subjective states of mind than encumbrances on real property. The encumbrance is a genuine property interest belonging to the encumbering party.

It’s a good thing that "‘breach of promise’ suits . . . have ceased to be upheld by the courts". Breach of promise in a secular court is a moral issue, and largely in agreement with Rothbard, it’s necessary to claim that moral issues that do not involve physical property should not be enforced in secular courts. However, if the contract involves transfer of a genuine property interest, i.e., interest in an economically valuable entity, then this definitely falls within the lawful purview of a secular ecclesiastical court.

It’s necessary to further amend Rothbard’s position like this: "The theory of contract enforcement should have had nothing to do with ‘compensation’; its purpose should always be to enforce property rights, and to guard against the implicit theft of breaking contracts which transfer title to [property interests in] alienable property. Defense of property[-interest] titles and only such defense-is the business of enforcement agencies." 29 This statement is valid to the extent that such "enforcement agencies" are secular.

Property-Interest Model

It’s important to remember that regarding contracts, the hermeneutical prologue’s agreement with Rothbard extends only to secular ecclesiastical courts. Religious ecclesiastical courts have subject-matter jurisdiction over far more than mere physical property. Such physical property is within the scope of the global covenant, and is therefore potential subject matter of lawful action within secular courts, and secular courts are limited to such subject matter.

It must be assumed that when people voluntarily commit themselves to living in community with a group of people, where the purpose of the community is to honor and abide by a morality and set of doctrines that is alien to the secular community, they do so because they believe that they have greater freedom in such community and under such morality than they have elsewhere. Therefore, what may appear to be bondage to an outsider may in fact be freedom to an insider. If there is no contract between the insider and the outsider, then the outsider has no business imposing legal sanctions against the insider unless the insider arguably perpetrated delicts that are clearly and obviously violations of the global mandate against delicts. Then and only then can secular authorities cross the jurisdictional boundaries of that religious social compact in order to exercise lawful police powers over perpetrators of delicts within such religious community.

Even though the hermeneutical prologue and this memorandum don’t claim that Bible-based human law is anywhere close to perfect or complete, they do claim that this property-interest model of contracts is a non-negotiable starting point for contract adjudication in the same way that the property-interest model of secondary property is a non-negotiable starting point for understanding secondary property in general. 30 Even with such certainty it’s necessary to admit that evaluating damage in monetary terms can be difficult, and when a court finds such evaluation too difficult, prudence demands treating the case as outside the court’s lawful subject matter. Physically verifiable damage to physical property is a prerequisite to resolution of any broken contract in the secular arena, and Rothbard’s "theft" is certainly a form of damage. Even so, people have a right to bind themselves into contracts that have terms that specifically govern morality and commonly held doctrinal beliefs, as long as they don’t expect a secular court to enforce those terms.

The property-interest model of contracts is applicable to all contracts. In the case of religious social compacts that are concerned largely with the maintenance of a particular moral code, any violation of that moral code by a party to the social compact would naturally go into their ecclesiastical court, on the grounds that everyone in the religious social compact has a contractual property interest in every other party’s behavior. The religious ecclesiastical court would naturally have original jurisdiction. But on some rare occasions it might be possible for a case based on a moral violation that is not overtly delictual to be appealed into a secular ecclesiastical court. The question then becomes: How could the religious social compact ever prove to a secular ecclesiastical court that the religious social compact has a property interest in non-delictual behavior? The religious social compact might prove this in a secular court by showing that they live under a living restrictive covenant, and that the offending party has violated the restrictive covenant, and that by doing so, the offending party has damaged the value of the community’s property in the eyes of said community. Whether the offending party’s behavior is right or wrong would never be an issue in the secular court, only whether he did what the community says he did, and whether that’s a violation of their restrictive covenant. Hard-core advocates of the title-transfer model may argue against this on the grounds that the promises that contribute to the formation of a restrictive covenant cannot alienate the will, the capacity to make unencumbered choices, by making promises about future behavior. Under such circumstances, they would be arguing that such promises about future behavior alienate the will, and cannot be enforced in secular courts. As long as secular courts are dominated by secular humanism and inchoate legal theories, as they are these days, it would be perilous for a religious social compact to grant jurisdiction to a secular ecclesiastical appellate court unless it is certain that the law and the facts are on its side. On the other hand, even if these inchoate legal theories didn’t exist, and even if all the secular ecclesiastical courts were dominated by the title-transfer theory, it would likely be fruitless for a religious social compact to appeal such a case into a secular ecclesiastical court.

Any claim by Murray Rothbard and company that such religious contracts are inherently unenforceable because each party grants property interest in future behavior to every other party, is inherently imposition of the secular religion onto people who have opted to live primarily under a religious social compact. Rothbard’s theory of contracts certainly has legitimate value in the secular arena, in that it demands clear transfer of title before a contract is enforceable. But people who want to live among people who share their morals and worldview have a right to segregate themselves from secular humanists and others who have no regard for their moral code. The distinction between the secular and the religious is inherently dependent upon jurisdiction, more specifically, upon the combination of geographical, personal, and subject-matter jurisdictions.

So this property-interest model holds in both secular ecclesiastical courts and religious ecclesiastical courts. But the latter courts use definitions of property that are custom designed by their social compact. Religious jural courts would have the same definition of property as exists everywhere under the global covenant. If a dispute in a religious ecclesiastical court is somehow appealed into a secular ecclesiastical court, then one should expect that secular court to apply secular principles to resolve the contract dispute.

Conclusion: The "promise-expectations" theory may be fine as a theory of contract formation and definition, but it is absolutely inadequate as a basis for contract enforcement. The title-transfer model offers more equitable contract enforcement in the secular arena. The property-interest model is more likely to satisfy the contract-enforcement needs of both secular and religious social compacts. This is because, to a large extent, the property-interest model is the title-transfer model in secular jurisdictions, and is the promise-expectations model in religious jurisdictions.


9 Taken from endnote #17 of The Ethics of Liberty, Chapter 19, "Property Rights and the Theory of Contracts". — URL: http://​​rothbard/​ethics/​ethics.asp.

10 It’s necessary to use a customized definition of alienate. This is because the legal definition pertains primarily to real property, and also because it pertains especially to transfer of property from one person to another. In keeping with the Latin etymology of the word — which is concerned more about estrangement and less about whatever entity receives the estranged object, or how it is estranged — this memorandum defines alienation as the loss or estrangement of any kind of primary or secondary property, regardless of how or to whom it is estranged. This memorandum distinguishes conventional alienate from the memorandum’s concept of alienate typographically.

11 See Porter, TIAJ, Article I ยง 8 cl 4 / denizen. — URL: ../../../​Books/​TIAJ/​html/​0_TIAJ/​0_2_1_3_Art_I_Sec_8_Cl_4.htm​#Denizen.

12 The Ethics of Liberty, Chapter 19, "Property Rights and the Theory of Contracts". — URL: http://​​rothbard/​ethics/​ethics.asp.

13 The Ethics of Liberty, Chapter 19, "Property Rights and the Theory of Contracts". — URL: http://​​rothbard/​ethics/​ethics.asp.

14 "Toward a Reformulation of the Law of Contracts", Journal of Libertarian Studies, Vol. 1, No. 1. pp. 3-13. — URL: http://​​journals/​jls/​1_1/1_1_2.pdf.

15 Even though Rothbard and Evers were writing in the 70s and 80s, the law has not become less "inchoate" since then, but has instead proceeded to become more "inchoate". It’s therefore reasonable to continue speaking of these circumstances in the present tense.

16 Because ecclesiastical courts are a function of the hermeneutical prologue’s jurisprudential framework, this implies the acceptance of the hermeneutical prologue’s social compact theory of government.

17 The Ethics of Liberty, Chapter 19, "Property Rights and the Theory of Contracts". — URL: http://​​rothbard/​ethics/​ethics.asp.

18 This is clear because they both believe in "the duty of non-aggression" (Examples: Evers, "Social Contract: A Critique", last paragraph; and Rothbard, The Ethics of Liberty, Chapters 14 and 30.). Such a duty carries with it a right to defend oneself, one’s property, and other persons or properties against aggression. What Rothbard and company mean by "aggression" is essentially the same as what the hermeneutical prologue means by delict. — The section below, "Lawful Social Contracts", addresses the fact that they believe this "duty" exists outside any contractual nexus.

19 This is a quote of Lysander Spooner, Poverty: Its Illegal Causes (in Vol 5 of Charles Shively, ed., The Collected Works of Lysander Spooner, Weston, Mass: M S Press, 1971). The quote appears in "Toward a Reformulation of the Law of Contracts", Journal of Libertarian Studies, Vol. 1, No. 1. pp. 3-13. — URL: http://​​journals/​jls/​1_1/1_1_2.pdf.

20 The Ethics of Liberty, Chapter 7, "Interpersonal Relations: Voluntary Exchange". — URL: http://​​rothbard/​ethics/​ethics.asp.

21 The Ethics of Liberty, Chapter 19, "Property Rights and the Theory of Contracts". — URL: http://​​rothbard/​ethics/​ethics.asp.

22 The Ethics of Liberty, Chapter 19, "Property Rights and the Theory of Contracts". — URL: http://​​rothbard/​ethics/​ethics.asp.

23 "Toward a Reformulation of the Law of Contracts", Journal of Libertarian Studies, Vol. 1, No. 1. pp. 3-13. — URL: http://​​journals/​jls/​1_1/1_1_2.pdf.

24 "Toward a Reformulation of the Law of Contracts", Journal of Libertarian Studies, Vol. 1, No. 1. pp. 3-13. — URL: http://​​journals/​jls/​1_1/1_1_2.pdf.

25 "Toward a Reformulation of the Law of Contracts", Journal of Libertarian Studies, Vol. 1, No. 1. pp. 3-13. — URL: http://​​journals/​jls/​1_1/1_1_2.pdf.

26 The Ethics of Liberty, Chapter 19, "Property Rights and the Theory of Contracts". — URL: http://​​rothbard/​ethics/​ethics.asp.

27 The Ethics of Liberty, Chapter 19, "Property Rights and the Theory of Contracts". — URL: http://​​rothbard/​ethics/​ethics.asp.

28 The Ethics of Liberty, Chapter 19, "Property Rights and the Theory of Contracts". — URL: http://​​rothbard/​ethics/​ethics.asp.

29 The Ethics of Liberty, Chapter 19, "Property Rights and the Theory of Contracts". — URL: http://​​rothbard/​ethics/​ethics.asp.

30 Regarding the property-interest model of secondary property, see URL: ../../../​Books/​TIAJ/​html/​0_TIAJ/​0_A_2_Am_V_(​Free_Market).htm​#PropertyInterestModel.

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