The title-transfer theory of contract (TTToC) is a
legal
Law is a set of rules that are created and are enforceable by social or governmental institutions to regulate behavior,Robertson, ''Crimes against humanity'', 90. with its precise definition a matter of longstanding debate. It has been vario ...
interpretation of
contract
A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tran ...
s developed by
economist
An economist is a professional and practitioner in the social sciences, social science discipline of economics.
The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this ...
Murray Rothbard
Murray Newton Rothbard (; March 2, 1926 – January 7, 1995) was an American economist of the Austrian School, economic historian, political theorist, and activist. Rothbard was a central figure in the 20th-century American libertarian m ...
and
jurist
A jurist is a person with expert knowledge of law; someone who analyses and comments on law. This person is usually a specialist legal scholar, mostly (but not always) with a formal qualification in law and often a legal practitioner. In the Uni ...
Williamson Evers
Williamson M. "Bill" Evers (born October 18, 1948) is an American libertarian activist and education researcher. In 1988, he became a resident scholar at Stanford University's Hoover Institution first as a national fellow, then as a visiting sch ...
. The theory interprets all contractual obligations in terms of
property rights
The right to property, or the right to own property (cf. ownership) is often classified as a human right for natural persons regarding their possessions. A general recognition of a right to private property is found more rarely and is typically ...
,
viewing a contract as a bundle of
title
A title is one or more words used before or after a person's name, in certain contexts. It may signify either generation, an official position, or a professional or academic qualification. In some languages, titles may be inserted between the f ...
transfers. According to
Randy Barnett
Randy Evan Barnett (born February 5, 1952) is an American legal scholar. He serves as the Patrick Hotung Professor of Constitutional Law at Georgetown University, where he teaches constitutional law and contracts, and is the director of the Georg ...
, the TTToC stands in opposition to most mainstream contract theories which view contractual obligations as the result of a binding promise.
[Some Problems with Contract as Promise](_blank)
— Randy E. Barnett Proponents of the approach often claim it is superior on grounds of both consistency and ethical considerations. The TTToC is often supported by
libertarian
Libertarianism (from french: libertaire, "libertarian"; from la, libertas, "freedom") is a political philosophy that upholds liberty as a core value. Libertarians seek to maximize autonomy and political freedom, and minimize the state's e ...
s.
Interpretation of contracts
The TTToC considers a contract to be a transfer of property titles between parties to the contract. Title transfers can be
conditional, implying a title transfer is to take effect only if a specified condition is met, as well as future oriented implying a title transfer is to take effect at a specified future point in time. For example, in a
loan
In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that d ...
contract the lender transfers title to the principal to the borrower, and the borrower transfers to the lender a future title to the amount of the principal plus the interest. When the loan matures the transfer of title from borrower to lender takes effect, and the lender is entitled to obtain the money, which now belongs to him. It is important to mention the lender is entitled to obtain the money only when that money exists and is in the possession of the borrower. Another example is a
service provision contract in which the
service consumer transfers a future title of money to a service provider ''on the condition'' that a certain act of service is performed. If the service is not provided the condition of the transfer is not met and the conditional title transfer of money does not take effect. Contracts can be agreed upon either by explicit verbal agreement (as is the case with formal written contracts) or by
implicit
Implicit may refer to:
Mathematics
* Implicit function
* Implicit function theorem
* Implicit curve
* Implicit surface
* Implicit differential equation
Other uses
* Implicit assumption, in logic
* Implicit-association test, in social psychology
...
representation of agreement (as is the case when a restaurant order is placed by a passerby).
Fraud
Under the TTToC
breach of contract
Breach of contract is a legal cause of action and a type of civil wrong, in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party ...
is only what can be interpreted as an act of
theft
Theft is the act of taking another person's property or services without that person's permission or consent with the intent to deprive the rightful owner of it. The word ''theft'' is also used as a synonym or informal shorthand term for some ...
.
For example, if a specified condition for a conditional title transfer from party A to party B is not met, yet party B still captures possession of the property they are not entitled to, they have committed theft, whether the possession was taken by force, or
by false representation of fact creating the impression the transfer conditions has been met.
If a service provider has failed to perform an act of service, he has not committed theft. In such cases provisions should be made in advance for the non-breaching party to be entitled to compensation, in the condition of a failure to provide the agreed upon service.
Implications
Since the TTToC is based on property rights, it is compatible with the
non-aggression principle
The non-aggression principle (NAP), also called the non-aggression axiom, is a concept in which aggression, defined as initiating or threatening any forceful interference (violating or breaching conduct) against either an individual, their propert ...
. According to the proponents of the theory, the TTToC ensures ownership of every owned good is well defined at any point in time. Contracts regarding unalienable property titles are not binding. Some argue that since
ownership of one's body is unalienable,
voluntary slavery
Voluntary slavery, in theory, is the condition of slavery entered into at a point of voluntary consent. It is distinguished from involuntary slavery where an individual is forced to a period of servitude usually as punishment for a crime.
Origi ...
contracts are not binding under the TTToC.
Promises that are not made with the intention of being legally binding are also non-enforceable under the TTToC.
See also
*
Freedom of contract
Freedom of contract is the process in which individuals and groups form contracts without government restrictions. This is opposed to government regulations such as minimum-wage laws, competition laws, economic sanctions, restrictions on pri ...
*
Bundle of rights
The bundle of rights is a metaphor to explain the complexities of property ownership. Law school professors of introductory property law courses frequently use this conceptualization to describe "full" property ownership as a partition of vari ...
*
Pacta sunt servanda
''Pacta sunt servanda'', Latin for "agreements must be kept", is a brocard and a fundamental principle of law. According to Hans Wehberg, a professor of international law, "few rules for the ordering of Society have such a deep moral and religi ...
References
External links
*
* {{Citation
, last =Kinsella
, first =Stephan
, author-link = Stephan Kinsella
, year =2010
, title =Justice and Property Rights: Rothbard on Scarcity, Property, Contracts…
, url =http://www.libertarianstandard.com/2010/11/19/justice-and-property-rights-rothbard-on-scarcity-property-contracts/
, periodical =The Libertarian Standard
Contract law
Libertarian theory
Theories of law
Classical liberalism
Anarcho-capitalism
Economic ideologies