Note: Updated and revised version included as chap. 9 of Legal Foundations of a Free Society (Houston: Papinian Press, 2023).
See also Stephan Kinsella, “The Title-Transfer Theory of Contract,” Papian Press Working Paper #1 (Dec. 20, 2024), forthcoming in David Howden, ed., Palgrave Handbook of Misesian Austrian Economics (Palgrave, forthcoming 2025), which is a concise re-statement of the argument given in ch. 9 and which also includes some important additional arguments, nuances and clarifications.
***
“A Libertarian Theory of Contract: Title Transfer, Binding Promises, and Inalienability,” J. Libertarian Stud. 17, no. 2 (Spring 2003): 11-37, based on paper presented at Law and Economics panel, Austrian Scholars Conference, Auburn, Alabama (April 17, 1999).
Update: In the chapter I argue that having a right to to own or use a resource does not automatically imply the right to alienate or transfer it. Apparently Hume made a similar point. See David Owens, “Does a Promise Transfer a Right?,” in Gregory Klass, George Letsas, & Prince Saprai, eds., Philosophical Foundations of Contract Law (Oxford University Press, 2014), p. 80, 87–89, et pass, citing David Hume, A Treatise on Human Nature (L. A. Selby-Bigge ed., 1978), at 516–25. As Owens writes (p. 89):
The idea that we “own” our rights to control our performances tends to obscure Hume’s Point because, in Grotius’ words, it is “in the very nature of property” that we are able to transfer or otherwise modify our property rights by declaration. In fact Hume’s Point calls the possibility of property (so understood) into question quite as much as the possibility of promise. Why should I have both the right to decide whether or not to drive my car and the power to give that right away by declaration? How does the former right explain the latter power? Indeed how can the latter power be explained at all?
Owens also discusses how Grotius thought that “the power of transfer by declaration is invovled in the very idea of ownership.” p. 80: “Men who are masters of their own goods have by the law of nature a power of disposing of or transferring all or any part of their effects to other persons; for this is in the very nature of property.” Quoting Hugo Grotius, The Rights of War and Peace (Richard Tuck ed., 2005), at 566.
Update: See also errata for Legal Foundations of a Free Society:
Regarding ch. 9, and also “The Title-Transfer Theory of Contract”: see Williamson M. Evers, “The Law of Omissions and Neglect of Children,” J. Libertarian Stud. 2, no. 1 (1978): 1–10. He writes (p. 5): “A third legally enforceable duty has been contractual obligations. The present author, however, has maintained elsewhere that the only properly enforceable contracts are those in which transfers of property title have been agreed upon. Mere promises or induced expectations should not be legally binding; only the agreed-upon transfers of property.” This implicitly recognizes the notion, as I write in ch. 9 (217, 223), that contracts need not be viewed as binding obligations, and also the related notion that breach of contract is impossible (p. 209).
Related:
- Łukasz Dominiak & Tate Fegley, “Contract Theory, Title Transfer, and Libertarianism,” Diametros (10 Sep. 2022; doi: 10.33392/diam.180)
- KOL225 | Reflections on the Theory of Contract (PFS 2017)
- KOL197 | Tom Woods Show: The Central Rothbard Contribution I Overlooked, and Why It Matters: The Rothbard-Evers Title-Transfer Theory of Contract
- Interview of Williamson Evers on the Title-Transfer Theory of Contract (Aug. 5, 2014) (KOL146)
- Thoughts on Walter Block on Voluntary Slavery, Alienability vs. Inalienability, Property and Contract, Rothbard and Evers
(Jan. 9, 2022) - Justice and Property Rights: Rothbard on Scarcity, Property, Contracts…, Libertarian Standard (Nov. 19, 2010)
- The Problem with “Fraud”: Fraud, Threat, and Contract Breach as Types of Aggression (July 17, 2006)
- “Libertarian Legal Theory, Lecture 3: Applications I: Legal Systems, Contract, Fraud,” Mises Academy, Feb. 14, 2011 (KOL020)
- KOL338 | Human Action Podcast Ep. 308 with Jeff Deist: Rothbard on Punishment, Property, and Contract
- KOL372 | Discussing Contract Theory, Restitution, Punishment, with Matthew Sands of Nations of Sanity
- KOL285 | Disenthrall: Contracts with Stephan Kinsella
- KOL 029 | First Degree Liberty Interview: Argumentation Ethics and the Title-Transfer Theory of Contract
I have a question about the title-transfer theory of contract:
Imagine that a man writes on a contract: “I hereby transfer the titles to all the non-essential¹ property I acquire from the day X onwards to Robinson Crusoé IF he gives me $10,000 today”.
¹Consider as “non-essential” all property that is not require for the man’s subsistence.
Assuming that Robinson fulfilled the conditional part by giving the man $10,000, could he claim all “non-essential” property titles from the man from day X onwards? If so, wouldn’t this be a kind of voluntary slavery?
The man can still work on the market in whatever job he pleases, but all income would be redirected to Robinson.
The difference from slavery per se, I think, is that the man can choose where, how and when to work, as well as to choose to not produce anything more than what is required for his own survival. If there isn’t “non-essential” property to be alianeted from the man to Robinson, then force cannot be used to force him to work more. Still, for the man, this would be a very precarious position to be in.
This contract deals with a conditional title-transfer of alianable property that doesn’t exist yet. In some way, I believe this would be analogous to a loan with an infinite interest rate.
I wish to hear your opinion on this!
Thanks in advance for your time.
I have a question about the title-transfer theory of contract:
Imagine that a man writes on a contract: “I hereby transfer the titles to all the non-essential property I acquire from the day X onwards to Robinson Crusoé IF he gives me $10,000 today”.
¹Consider as “non-essential” all property that is not require for the man’s subsistence.
Assuming that Robinson fulfilled the conditional part by giving the man $10,000, could he claim all “non-essential” property titles from the man from day X onwards? If so, wouldn’t this be a kind of voluntary slavery?
The man can still work on the market in whatever job he pleases, but all income would be redirected to Robinson.
The difference from slavery per se, I think, is that the man can choose where, how and when to work, as well as to choose to not produce anything more than what is required for his own survival. If there isn’t “non-essential” property to be alianeted from the man to Robinson, then force cannot be used to force him to work more. Still, for the man, this would be a very precarious position to be in.
This contract deals with a conditional title-transfer of alianable property that doesn’t exist yet. In some way, I believe this would be analogous to a loan with an infinite interest rate.
I wish to hear your opinion on this!
Thanks in advance for your time.
Probably. But it could be complicated. but yes, I think so, if the contract is specific and formalized sufficiently.
Hii, Sorry I didn’t understand, do you mean that it should bé legal ?
Again not sure what you are asking. should what be legal? In the meantime I wrote a bit more on related — https://stephankinsella.com/2025/05/on-bankruptcy-in-a-free-society/
I mean If I understand well you cant alienate your body so you cant alienate future property that is necessary to survive. But for all the non-necessary things, like the OP writes about, you can alienate this ? Is the type of contract the poster wrote about legitimate ?
I don’t have time to parse this convoluted wording. Just read the previous links and if you have a single, coherent, narrow, non-loaded question, try again. But keep in mind the purpose of libertarian theorizing is not for me to sit in my armchair and field a never-ending littany of questions decisively, like a judge. It’s to examine our values and explicate our principles of justice and to investigate their nature and purpose and justifications; to try to articulate, understand, and refine these principles. Not to have a set of answers ready for any question some grad students might as late at night in their dorm rooms. See e.g. https://stephankinsella.com/2006/07/the-limits-of-armchair-theorizing-the-case-of-threats/
Thanks for your answer actually. Is it possible do delete the name on the first answer and only keep the pseudo ?
Again Thanks for your time.