Implicit Contract: An Objectivist Pipedream

implicit contract

To begin I need to make an important note. I’m not talking about implicit contract theory in the economic sense (as that particular theory was sound at its implementation until it was replaced with the search and matching theory to answer perceived market imperfections). I’m referring to the concept being used in a moral or ethical sense. In the social and ethical sense, there are those that believe that the formation of contracts between individuals can be implicit. There are a few major issues with that.

To start we need to tackle the notion of a contract being implicit at all. A contract by definition is an explicit agreement between two parties with the terms of the relationship spelled out in detail. By contrast, something being implicit implies that it is understood without those details. How can a contract, which is defined as being explicit by design, be an implicit thing in any form? The simple answer is that it can’t without either misusing the word implicit or contract. Another issue with this type of contract is the weak measure of what creates it. Someone supporting an implicit contract may say that lying in bed naked with someone is a sign of giving implicit consent to sexual activities. The argument would be that by voluntarily taking the action of lying in bed naked with someone you’ve signaled your consent to sex and willing entered an implicit contract based on the actions you have taken. What if I just trust them and it’s hot out? Maybe I’m not interested in sex but am just generally more comfortable undressed. This core aspect of an implicit contract falls apart with the simple question of “Who decides which actions mean what?”

Humans aren’t psychic. The idea that we can claim entrance into a contract based solely on our subjective interpretations of the actions that others have taken is false to a degree that shouldn’t require this affirmation of its falsity. One could lay out an example of a generally agreed upon arrangement in a society, but even that is limited by the different norms that people are raised on. Further still is the further implications of where lines get drawn.

One could consider it an implicit contract as per the objectivist’s definition of it when a customer enters a shop and brings an item to a counter that they’ve agreed to pay for it. Unfortunately for the objectivist, it isn’t that simple. If we are to call this arrangement a form of contract what happens when the customer (as often happens in retail) sees the price of an item they picked up, decides it’s not worth the cost and wants it put back? If we are going as far as to claim this simple arrangement is a form of contract then would the customer be held to paying for the item? If the interpretation is that a business owner allows the general public onto their private property because they will do business is a person in violation of this implied contract if they only window shop? As I stated before, there is no supreme arbiter that decides what the meaning of actions are that could hold the people involved to the standards of a contractual obligation. Simply because one believes that it works a certain way doesn’t make it a form of law, nor does it prove this faulty concept.

You can read more from Killian Hobbs on Think Liberty here.


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