Contract law is the basis for a civilized society!

By Dan Clements 03/16/2009

Wikipedia tells us “A contract is an exchange of promises between two or more parties to do, or refrain from doing, an act which is enforceable in a court of law. It is a binding legal agreement. [1] That is to say, a contract is an exchange of promises for the breach of which the law will provide a remedy.”
How are a contract and the law that enforces it the basis for a civilized society? Using the Wikipedia definition of a contract, we exchange promises with each other, groups, or business. When we fail to live up to those contracts there are only two remedies that we can use. One remedy is we enforce the contract through force that we employ ourselves, or we can go to court and use the force of law and it’s penalties to enforce the contract. If we enforce the contract ourselves, two things happen, 1; the outcome is not guaranteed, and 2; the society doesn’t benefit from the outcome by making the outcome common law that would apply to the society as a whole.
Contracts can come in two main forms, verbal and written. Verbal contracts can be enforced by law, but the burden of proof can sometimes come down to a he said, she said situation unless there are witness to the verbal contract. Written contacts are more binding and easier to prove what both parties promised to do. Sometimes wording in written contracts make a huge impact on the performance of the contract. That’s why written contracts should be carefully worded not to only follow the letter of the promises in the contract, but also the spirit of the promises in entering the contracts.
Let me be real clear here, if you are entering a contract with the idea that if things go wrong with my performance of the contract, I can just go and get an attorney and get out of that contract, you are not acting in good faith from the start of the contract process! Now I realize that sometimes life happens, and sometimes unforeseen things happen that neither we nor anybody could foresee or control. When the aforementioned happens, we should go to the person in who we have entered the contract with and see if the contract can be reworked or relief can be had. But it should always start with the parties that are involved, and then if a satisfactory outcome can not be reach, then and only then should the matter come before the law for adjudication.
These principles can’t be applied to the current economic crisis because people on both sides of the contract process were not acting in good faith and could foresee the outcome of their choices, but refused to live in reality!
What is happening today is too many people make promises with the intent that if things go bad; they are going to break their promise and walk away from their obligations found in the contract that they entered. People who do this are not acting as good moral agents, and when this happens, society breaks down and everything comes to a screeching halt!
Politicians enter into a contract with those they govern. Publicly traded companies have a fiduciary contract with their share holders, not only to make them money, but to be good stewards of their investments. Marriage is a contract, and a lot of folks don’t live up to their obligations in the marriage. People enter into real-estate and mortgage contracts with certain expectations. The borrower says they have sufficient means and ability to service a mortgage, and the lender has the stability to be able to lend the money to the borrower. You name the contract, and both parties are expected to live up the agreements stated in the contract.
I’m a New Testament Christian and I have a verbal contract with God, which is sealed in the blood of Jesus through baptism. God has made promises to me in his word, and has expectations of me in order to receive his promises. If I fail to live up to my end of the contract with God, I should have no expectations of God delivering on his promises to me.
James Madison said in Federalist papers #51 “If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.” Men are not angels and that is why we need contracts and the Law in order for our society to exist. If men and women could be trusted to keep their word, then verbal contracts would be all sufficient. However since we are not angels and people break their promises; we need to hold each other accountable before the law and each other!


Dan Clements is a member of the Constitution Party and the host of BACK TO BASIC a Christian/political internet talk show. You can listen to Dan live from 10am-12 noon EST. M-F at www.blogtalkradio.com/dan-clements and www.constitutionalwarrior.com
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