A Breach of Contract

Originally published at LewRockwell.com

Imagine that you have agreed with an auto dealer to purchase the luxurious Belchfire X-1 automobile, for which you agree to pay $45,000, with monthly payments to extend over a period of three years. You sign the sales agreement, and are then told to return the following day to sign the formal contract, which you do. When you arrive two days later to pick up the car, the dealer presents you with the title and keys to a much lesser model, the Klunkermobile J. When you ask the dealer to explain the switch, he points to a provision in the contract that reads: “Dealer shall be entitled to make ‘reasonable’ adjustments it considers to be ‘necessary and proper’ to further the ‘general welfare’ of the parties hereto.” He also tells you that the amount of the payments will remain the same as for the Belchfire X-1; that to provide otherwise would be to impair the obligations of the contract. You strongly object, arguing that the dealer is making a fundamental alteration of the contract. The dealer then informs you that this dispute will be reviewed by a third party – his brother-in-law – who will render a decision in the matter.

Welcome to the study of Constitutional Law!

The rationalization for the existence of political systems has, at least since the Enlightenment, depended upon the illusion of a “social contract”; that governments come into existence only through the “consent of the governed” as expressed in a written constitution. I know of no state system that ever originated by a contract among individuals. This is particularly true in America, where the detailed history of the drafting and ratification of the Constitution illustrates the present system having been coercively imposed by some upon others. If you doubt this, a reading of the history of Rhode Island will provide you with one example.

By its very nature, a contract depends upon a voluntary commitment by two or more persons to bind themselves to a clearly-expressed agreement. The common law courts have always held that agreements entered into through coercion, fraud, or any other practice that does not reflect a “meeting of the minds” of individuals are wholly unenforceable. Nor have the courts looked favorably upon transactions that purport to bind parties forever. If I should agree to work for you for $5,000 a month and, after two years of such employment, choose to go work elsewhere, no court of law – not even in Texas – would compel me to continue working for you.

The idea that contractual obligations can arise other than through voluntary undertakings has been firmly established in our culture. Statist efforts to impose duties upon others are often promoted under the myth of an “implied” contract (e.g., by driving a car, you “impliedly consent” to purchase insurance; by living in America you “impliedly consent” to be bound to obligations to which you never agreed). By this logic, if I lived in a high-crime area, it could be argued that I had “impliedly consented” to be mugged, or to be bound by the rules of the local street-corner gang. The idea that the government can force people into contractual relationships is at the heart of the current Supreme Court case dealing with “Obamacare.” The enactment of such a form of “involuntary servitude” is what leads a few thoughtful minds to question whether it violates the 13th Amendment!

Even accepting the fantasy of a “social contract” theory of the state creates more fundamental problems. The legitimacy of a contract depends upon the existence of “consideration.” This means that the party seeking enforcement must demonstrate a changing of one’s legal position to their detriment (e.g., giving up something of value, making a binding promise, foregoing a right, etc.) Statists may argue that their system satisfies this requirement – by supposedly agreeing to protect the lives and property of the citizenry, and agreeing to respect those rights of people that are spelled out in the “Bill of Rights.” The problem is that – thanks to the opinions of numerous brothers-in-law who comprise the Supreme Court – the powers given to the state have been given expansive definitions, and the rights protected by the “Bill of Rights” are given an increasingly narrow interpretation.

Thus, Congress’ exclusive authority to declare war is now exercised by presidential whim; while its power to legislate does not depend upon any proposed law having been either fully drafted or read! Fourth and Fifth Amendment “guarantees” re “searches and seizures” or “due process of law” are so routinely violated as to arouse little attention from Boobus Americanus. First Amendment rights of “speech” allow the state to confine speakers to wire cages kept distant from their intended audiences, while the right of “peaceable assembly” is no hindrance to police-state brutalities directed against peaceful protestors. With very little criticism from Boobus, one president declared his support for a dictatorship, while his successor proclaimed to the world his unilateral authority to kill anyone of his choosing – including Americans! Meanwhile, torture and the indefinite detention of people without trial continue to be accepted practices.

Having been conditioned to believe that the Constitution exists to limit the powers of the state and to guarantee your liberty, you try employing such reasoning with the car dealer. You direct his attention to another contractual provision that reads: “All rights under this agreement not reserved to the Dealer shall belong to the Buyer.” But he tells you that he is adhering to the specific terms of the contract by making “reasonable adjustments” that are “necessary and proper” to “further the general welfare of the parties.” Whatever “rights” you have are, by definition, limited by this broad grant of authority.

This is where conservatives get so confused over the inherently repressive nature of the Constitution. They tend to believe that the 10th Amendment “guarantees” to them – and/or the states – “powers not delegated to the United States.” But the federal government powers enumerated in this document are overly broad (e.g., “general welfare,” “necessary and proper,” and “reasonable”) and must be interpreted. This authority to provide the government with such powers to interpret its own powers is nowhere spelled out in the Constitution; but was usurped by the Supreme Court in the case of Marbury v. Madison.

Once the courts – or the car dealer’s brother-in-law – define the range of the parties’ respective authorities, the mutually-exclusive logic of the 10th Amendment applies: if the government or the dealer is recognized as having expansive definitions of authority, there is very little that remains inviolate for the individual. The language of the 9th Amendment is more suitable to the argument on behalf of a broader definition of liberty. This provision reads: “The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.” This catch-all language suggests that the Ninth Amendment protections are far broader than the combined “rights” of all the other amendments. A reading of judicial history reveals only a very small handful of cases ever having been decided under this section. Of course, the words in this amendment are also subject to interpretation by state officials. This fact is what conservatives fail to understand when they bleat about wanting “to get back to the Constitution.” The government has never strayed from the Constitution; these words have been in that document from the beginning. They have, however, been interpreted according to the ever-changing preferences of those in power.

As the state continues to not simply eat away at – but to gluttonously devour – the liberty its defenders still pretend it is its purpose to protect, it is timely to consider the remedies available to individuals. As one who prefers the peaceful processes of a civilized society – rather than the violent and destructive means that define the state – my thoughts return to contract theory. I must admit, at the outset, that the make-believe “social contract” foundations of the state, reveal the wholesale breach of the obligations of both parties. The failure of the state to restrain its voracious and ruinous appetites is already a matter of record, even to its defenders whose intellectual dishonesty and/or cowardice will not permit them to express the fact. But there is a concurrent obligation on the part of those subject to state rule that finds expression in words carved onto the entrance to the Nebraska state capitol building: “The Salvation of the State is Watchfulness in the Citizen.” It was the failure of most people to live up to this standard that led me to write, a few years ago, about the need to impeach the American people! The “watchfulness” of most Americans is confined to such television programs as “American Idol” or “Dancing With the Stars.”

The breaches on both sides of this alleged contract are of such enormity as would lead any competent court of law to regard any such “agreement” as a nullity; subject to enforcement by neither party. Such defenses as “frustration of purpose,” “impossibility of performance,” “unconscionability,” “unequal bargaining power,” “fraud in the inducement,” and other concepts have regularly been used by the courts to excuse further performance by the parties to a contract.

I propose that we respond to our alleged obligations to the state – duties we never agreed to in the first place – in the same manner by which we would treat our hypothetical car dealer in the marketplace: to walk away and take our business elsewhere! Whatever goods or services we desire in our lives, and which we have been conditioned to believe can only be provided by the state, can be found in the willingness of our neighbors to freely and genuinely contract with us in ways that do not depend upon predation, restraint, or violence. It is time for us to discover the peaceful and creative nature of a society grounded in a voluntary “meeting of the minds” of free men and women!

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One Response to “A Breach of Contract”

  1. Thomas-Robertt says:

    The TAX is not uniform or apportioned, un-Constitutional on the face; Robert’s could not comment on policy because the regulations are not even written yet, No doubt the Act (statutes) will run by regulations and be attached to the IRS 1040 form (the IRS income tax), and people will volunteer into the system by signing the form under penalties of perjury (viz a Direct Tax is an excise). Those at the top will lack the legal knowledge to fight and will have something to lose if they try and won't fight it, those at the lower economic area, will have something to gain and won't fight it, and those at the very top of the economic game watch the lower class crash into the middle class (lets you and him fight) thus the ignorance will prevail – BTW the 16h Amendment did not create any new taxing powers See Stanton v Baltic Mining 240 US 103 confirming Brushaber v Union Pac R 240 US 1 (both 1916) Of course how many of the people know the original taxing powers of the Federal government????

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