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Natural Social Contract Annotations

Contracts - Form, Validity and Necessity

The reader will only be able to understand the purpose and meaning of this annotation and its relationship to the Natural Social Contract (NSC), if s/he has first read the Introduction section of the NSC and its explanatory and elucidating annotation.

1) Agreements among individuals, including formal contracts, are a natural extension of Exchanges to mutual advantage expectation, generally for the purpose of allowing such Exchanges of Value to take place over time. This longer-range point of view shown by their use makes it clear that agreements and contracts are an indication of the advanced thinking and planning capabilities of humans compared with all other known species, none of which appear to have anything comparable to contracts or even agreements within their InterActions. Upon thinking about the concepts of agreement and contract for the NSC, I decided that it would be most conducive to optimally increasing the Lifetime Happiness of all Freemen if only formalized agreements were able to be adjudicated by the NSC. However, in formalizing the vernacular notions of agreement and contract into the definition of Valid Contract it was necessary to extend the current socially accepted definition of contract, particularly so that the NSC itself would be a Valid Contract. I also decided that the need to have Valid Contracts as much as possible avoid the subjective interpretations of courts, which is so common for contracts in current society, required their definition to be extended in several other ways from that which is understood in current society.

2) Although in the history of human civilization verbal unrecorded agreements have mostly been accepted as reasonable and binding, this practice has very often led to unresolved disputes and conflicts. The reason for this is probably not mainly because of the lack of any objective means to verify just what the mutual understanding was, although that is most likely a contributing factor, but far more likely, that there was no mutual understanding because of the inherent impossibility of one person to have intimate detailed knowledge of the exact thoughts of another person, something that to this day few people seem to fully realize. Because of this inherent impossibility, which is even greater under the complexity of life in the modern era, and because of the current relative ease of access to and operation of recording media of all kinds, I am convinced that any reasonable person who understands and practices the Theory of Social Meta-Needs will agree that the use of unrecorded agreements should not be supported by any common Social rules, mainly because if it were supported, the interpretation of the understanding of others would be at the subjective whim of any court that was charged with the job of upholding the agreement. Therefore, the NSC Requires that all Valid Contracts be recorded in one form or another in as unambiguous language as possible so that a clear and objective record of what was actually agreed is available to all.

3) Since contracts arise from mutual understandings between two or more Parties, it would seem at first that a contract is not something that can be unilaterally made without one Party even being aware of the Existence of the other, and this is true for contracts as they are understood in current society. However, in order to accommodate the Natural Social Contract, which is Executed independently by each Freeman, with no necessary immediate Connection with any other Freeman except for the Attestor, I have extended the standard definition of contract so that a Valid Contract may be Executed by only one person, as long as there exist other persons who have either Executed it before hir or are Executing it concurrently with hir. In effect, a person Executing the NSC is becoming a new Party to an already existing Valid Contract between all those who have already Executed it, but from a Connection point of view, the Execution of the Contract creates an initial set of Connection Attributes that define a Potential Connection. The Connection Process between any two Executors is not completed until such time as they become aware of one another. The NSC will be created as a Valid Contract when the very first two people sign it simultaneously (they will be Attestors for one another and will be Arbitrators as and when necessary).

4) The concepts of both Entitlement and Responsibility in the NSC are related to what is called Consideration within current societies. Here is the entry describing Consideration from Duhaime's Law Dictionary:

Under common law, there can be no binding contract without consideration, which was defined in an 1875 English decision as "some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other". Common law did not want to allow gratuitous offers, those made without anything offered in exchange (such as gifts), to be given the protection of contract law. So they added the criteria of consideration. Consideration is not required in contracts made in civil law systems and many common law states have adopted laws which remove consideration as a prerequisite of a valid contract.

I am convinced that the original common law principle clearly promotes mutual desire and inclination to adhere to agreements and thus, also appears to be necessary for any optimal application of the Theory of Social Meta-Needs. However, because Consideration generally suggests immediate monetary or other material Value transfer, I have used the more general terms Entitlement and Responsibility instead and have made the granting of Entitlements and the acceptance of Responsibilities by all Parties a Mandatory part of any Valid Contract under the NSC. The primary Entitlement gained for oneself and granted to all other Parties by Execution of the NSC itself is the Entitlement to Self-Ownership. The primary Responsibility accepted by Execution of the NSC is the Requirement for Restitution of any Freeman who the Executor Violates. Since all Stipulations are symmetrical, the Executor also gains the Entitlement of Restitution from any Freeman who Violates hir. Since a Freeman is always Entitled to refuse any Benefit, Entitlements are not Mandatory, but instead are effectively only Guidelines with respect to the Entitled Party.

5) It would be a problem for any Society if agreements for Violational purposes were generally valid and upholdable. At the same time however, any Freeman must be Entitled to assign any of hir Entitlements to an Agent, one of which is Excusable Breach of the NSC under certain limited circumstances. In addition, while a Freeman is Entitled to not be Intentionally Violated (in the sense that s/he can both seek Restitution and lay Charges of Breach of the NSC if s/he is), s/he also must be Entitled to Permit Actions and Events involving only hirself which would otherwise be Violations and Breaches of the NSC. Under the Freeman Society created by the NSC, this thorny problem is resolved by declaring that Valid Contracts may not contain Breaches of the NSC except if they are perpetrated against a Party to the Contract which Permits them. The prohibition of such UnPermitted Breaching Actions is actually somewhat stronger than would be implied by this definitional statement, since if any Freeman were to Execute such a Requirement (as a Contractually obligated Actual Violator) then s/he would be providing prima facie evidence of hir Intention to Violate and would be subject to Revocation of hir Freeman Status. One additional effect of this part of the definition relating to non-Breach is that no Responsibility of a Valid Contract may Require any Party to Breach that Contract (the particular Contract in which it is included), since any agreement that contained such a clause would be self-contradictory as well as immediately grounds for a Charge of Breach of the NSC.

6) While, within current legal systems, contracts are not required to contain Termination Clauses, I am convinced that any reasonable Freeman applying the Theory of Social Meta-Needs will want some method of termination for any Contract that s/he Executes or else a de facto kind of enslavement is the result. Therefore, Termination Clauses have also been specified as a Required part of any Valid Contract. The exact nature of the appropriate Termination Clauses will depend greatly on the nature of the Valid Contract and must be left for the Parties to Decide. Since the nature of such Termination Clauses is not specified in any manner, the Requirement for their inclusion is actually very weak. This Requirement certainly does not imply that a Party to a Valid Contract who is Responsible for delivery of some product or service as an obligation of having received some Benefit from another Party (who is consequently Entitled to the product or service) to the Contract should be Entitled to simply walk away from hir Responsibility without full Restitution. In fact, there will normally be Termination Penalties Required of a Party who seeks premature Termination of a Contract, which Termination Penalties are payable to the other Parties.

7) When a Contract is being setup is the time when the Parties are generally most agreeable and will best be able to Decide how disputes (including Termination) should be settled. Since each Contract is unique both with respect to its Stipulations and its Parties, the method of dispute settlement cannot be part of the common Social rules (except for the Settlement of Disputes regarding the Responsibilities and Entitlements of the NSC itself) and must instead become Stipulations within the Contract itself (as they are for the NSC). This is the purpose of the Term, Termination, Breach and Arbitration Clauses of a Contract. Not only will the Arbitration arrangement need to be for the Duration of the Contract, but the method by which Arbitration decisions are made also needs to be specified in the Contract. Since once in dispute the Parties will not likely be able to agree on an Arbitrator, I am convinced that any reasonable implementation of the Theory of Social Meta-Needs will define a Valid Contract as only one which has an Arbitrator appointed at the time it is initiated. In addition, any reasonable Arbitrator will also seek to ensure that each of the Parties and s/he have the exact same understanding of the meaning of the Contract terms including the Entitlements and Responsibilities of each Party, and the Termination Clauses before the Contract is Executed. If such reasonable practices are adhered to, then there will be far fewer wrangling disputes between Freemen and far greater Social stability and Benefit for all Freemen. In this manner, most Contract disputes will be resolved without the necessity of a Trial. In fact, if the Arbitration Clauses are well done, the ruling of the Arbitrator could in most cases be effectively binding, since a non-obeying Party could otherwise be Charged with Breach of the NSC because any such Party would be Intending to Breach a Valid Contract. Only in the case where the Arbitrator himself is Charged with a Violation of the Arbitration Clause might a Trial be necessary. In these ways it should be clear that the NSC is the ultimate means and last resort of Arbitration of a Valid Contract and Settlement of any Dispute between its Parties, because once Arbitration has failed, all disagreements have become Alleged Violations. The Arbitrator could also generally serve as Attestor to the Execution of the Contract.

8) The purpose of Guidelines is to help facilitate the InterAction of the Parties and help the purposes of the Contract to be Performed by its Parties as efficiently as possible. However, an agreement can still be a Valid Contract without containing Guidelines - ie they are not a Requirement of a Valid Contract.

9) The Whereas section of any Valid Contract identifies the Parties to the Contract and describes their relevant background and motives for entering into the Contract. Except for the identification of Parties, a Freeman is not Required to include a Whereas section in an agreement for it to be a Valid Contract, but it is nevertheless useful to do so. It should be noted that the NSC includes a Whereas section.