The title-transfer theory of contract (TTToC) is a

legal Law is a set of rules that are created and are law enforcement, enforceable by social or governmental institutions to regulate behavior,Robertson, ''Crimes against humanity'', 90. with its precise definition a matter of longstanding debate. ...

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 tr ...

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 ...

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 U ...

Williamson Evers. 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 h ...

, 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, 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
— 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 en ...

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 Conditional (if then) may refer to: *Causal conditional, if X then Y, where X is a cause of Y *Conditional probability, the probability of an event A given that another event B has occurred *Conditional proof, in logic: a proof that asserts a co ...

, 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 ...

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 psycholog ...

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 part ...

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 som ...

. 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. 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 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.

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

Interpretation of contracts

Fraud

Implications

See also

References

External links