covenant agreements

[liberticity]

The daily article about zoning raises some questions for me.

In entering one of these restrictive covenants, a property owner seems to no longer fully own his property. If the agreement simply states that no member will have a dog on his property, do you say that one of those members owns his land except for the right to allow dogs on the property? Can you own/not own a specific right to do a specific thing with certain property?

If so: In one of these covenants, who owns the rights to have dogs on the members’ property? How would one get that right back?

If not: Then I think it simply boils down to contracting to do/not do certain things. But can you bind yourself indefinitely in such a contract? I think this applies to Rothbard in The Ethics of Liberty (I believe that’s where I read it) when he talks about simple promises not being binding, unless a penalty for breaking such a promise is predetermined and agreed upon. Is this so? If this is the case, would a property owner entering into a covenant also be agreeing to only sell that property to someone willing to be bound by the same agreement? If a new owner breaks the covenant, does the penalty fall on the previous or the current owner? Or I suppose that question could be solved with a contract between previous and new owners. True or not? Also, what would it take to dissolve such a contract, unanimous agreement by all involved?

Does anyone have some insight on this?

[Juan]

Yeah, without getting in a legalistic discussion about contracts, I’d point out that such ‘covenants’ are an attempt at recreating a totalitarian state using allegedly voluntary means.

[Sphairon]

The answers to your questions depend on the details of the respective covenant contracts.

To give an example: neighbors John, Jack and Joe want to create a dog-free community. They set up a contract which states that no dogs should be allowed on any of the three properties, and that any of the three will be expropriated if he violates this agreement. In that case, unanimous consent by all parties would be necessary to cancel the contract. A new owner of John’s, Jack’s or Joe’s property would most likely have to abide by this regulation. If the new owner has not been informed about this detail of his new property, it would constitute fraud and the seller could be sued. If he knowingly breaks the rule, it’s his fault and he must bear responsibility.

Even if you are a hard-core libertarian, you can’t argue against this. It’s voluntary interaction. It has nothing to do with totalitarianism.

Similarly, if some people set up a club with a 50$ entry fee and the entry condition that smokers will be kicked out without refunding, is it “totalitarian” if members who violate this contract will not get their 50$ back?

[liberticity]

@Sphairon

To give an example:

From your example, am I right to conclude that you are saying any covenant is simply a contract? And expropriation may simply be a condition of violation on any particular contract? But there must be such a condition on any contract to enforce violations?

[liberticity]

@Juan

Yeah, without getting in a legalistic discussion about contracts, I’d point out that such ‘covenants’ are an attempt at recreating a totalitarian state using allegedly voluntary means.

While I guess someone might try to use covenants as a cover for something not really voluntary, I can’t see a problem necessarily in any such agreements. Or do you mean that there are problems necessarily involved?

[nirgrahamUK]

any supposed covenant is either a contract or it isnt.

if it is a proper ‘Rothbardian’ contract, ‘expropriation’ is the wrong word to use in connection. just as if i trade you a 1000$ for your car. if you receive my 1000$ as the bargain says you would, and you spend it, and yet you still possess the car that you made me the owner of when you accepted what used to be my 1000$ , then you have my car and if i take it, I have not expropriated anything. the car for money contract (is at least an example of a contract that) does not require a violations enforcement condition.

[liberticity]

@nirgrahamUK

any supposed covenant is either a contract or it isnt.

How does a non-contract covenant work?

[nirgrahamUK]

luck.

[Sphairon]

@liberticity

From your example, am I right to conclude that you are saying any covenant is simply a contract? And expropriation may simply be a condition of violation on any particular contract? But there must be such a condition on any contract to enforce violations?

Yes, that is how it’s supposed to work in a libertarian society.

[JAlanKatz]

@Sphairon

Even if you are a hard-core libertarian, you can’t argue against this. It’s voluntary interaction. It has nothing to do with totalitarianism.

Can so. Suppose you have apples, and I have oranges, and we agree to trade them at a 2-1 ratio - say, you’ll give me 4 apples and I’ll give you 2 oranges. Suppose also that you give me the apples today, and I am supposed to give you the oranges tomorrow. Instead, though, I eat all my oranges tonight (remember, I’m giving them to you tomorrow, so tonight they are still my oranges.) What should be done? It seems clear that I’ve defaulted, and I have to give you back the apples, plus some fine. If I don’t have the apples, I’ll have to pay you. I am not required to go out and buy oranges.

Yet taking away my property is equivalent to making me provide the oranges. I agreed not to have a dog. I have a dog. I’ll pay some form of penalty.

There’s a further difficulty in passing this onto the purchaser. Let me ask this - just what content does the contract convey? It seems to me that the contract carries only the content that I, the signer, will not bring dogs onto my property. It attaches to the person, not the land.

[nirgrahamUK]

well, the way sphairon worded his covenant he did not create a Rothbardian contract, so if it ‘works’ it is by luck.

and on Rothbardian Contract grounds, jAlanKatz is right that an owner who is party to the covenant (a mere promise) and yet brings a dog in does not legally owe anything to the others. though he might choose to willingly pay some compensation to remain on good terms. this would be luck.

[liberticity]

@nirgrahamUK

well, the way sphairon worded his covenant he did not create a Rothbardian contract

Is the only reason you say this because he used the term ‘expropriate’? If not, why is sphairon’s example not a Rothbardian contract? I assumed the loss of property was a condition agreed to in the contract in the example.

[Juan]

@Sphairon

To give an example: neighbors John, Jack and Joe want to create a dog-free community.

I’m pretty fed up with the collectivistic term ‘community’. And John Jack and Joe own three houses, that’s not a ‘community’. Of course, they can do whatever they please in their houses, as long as they don’t aggress against third parties - that’s ‘hard-core’ libertarianism.

Even if you are a hard-core libertarian, you can’t argue against this. It’s voluntary interaction. It has nothing to do with totalitarianism.

The idea of having a whole ‘community’ (whatever that is) abiding by arbitrary rules is philosophically totalitarian. Why do you think the state exists ?? Because there are people who want to control their neighbors but CAN’T do it using ‘covenants’.

So, even in a small town, the people who have a problem with dogs at best would be able to get a percentage of neighbors to agree to…what ? To not have dogs, given that they really DON’T like dogs to begin with ?

Why is there, for instance, a thing like the ‘war on drugs’ ? One of the reasons (maybe the most important) is that cheap puritans can’t impose their flawed ‘morals’ without monopolistic violence. Attempts at getting rid of drugs using voluntary means fail because people tend to do what they please and have the right to do so when they don’t harm others - again, libertarianism for you.

In that case, unanimous consent by all parties would be necessary to cancel the contract.

Really ? So they signed a slave contract of sorts in which no party can opt out ? I call that BS.

@liberticity

Or do you mean that there are problems necessarily involved?

See my reply above =] - I think this is an attempt to sell libertarianism to conservatives and other control freaks. It’s philosophically contradictory although some people can dream up any ‘social contract’ they wish.

[liberticity]

@JAlanKatz

Yet taking away my property is equivalent to making me provide the oranges. I agreed not to have a dog. I have a dog. I’ll pay some form of penalty.

In the apples and oranges case, there was an explicit trade in which you defaulted. In the dog agreement, you agree to not have a dog on the condition the other owners do too. Unless a specific penalty is agreed to, what is the penalty you will pay for breaking the agreement? Without an agreed penalty, I think it is as nirgrahamUK says, a mere promise and not binding.

Now, if the penalty agreed upon is loss of the property to which the agreement pertains, are you saying that a monetary penalty would replace the loss of property, like a monetary penalty replaces the apples/oranges in your example?

@JAlanKatz

Let me ask this - just what content does the contract convey? It seems to me that the contract carries only the content that I, the signer, will not bring dogs onto my property. It attaches to the person, not the land.

I don’t see a reason why the contract cannot state that the current owner must ensure that the next owner in case of sale will agree to the contract. In that way it is attached to the person.

[Sphairon]

@JAlanKatz

It seems clear that I’ve defaulted, and I have to give you back the apples, plus some fine. If I don’t have the apples, I’ll have to pay you. I am not required to go out and buy oranges.

Really? What if our mutually agreed-upon court rules that you are? I think this would be how contract violations would be dealt with in a free society, wouldn’t it?

There’s a further difficulty in passing this onto the purchaser. Let me ask this - just what content does the contract convey? It seems to me that the contract carries only the content that I, the signer, will not bring dogs onto my property. It attaches to the person, not the land.

But this person happened to own this land. I don’t see where you’re going. You were sovereign of this particular land, but gave up full sovereignty to get rid of dogs in the neighborhood. The contract community is now entitled to your space if you violate the rules you have imposed on yourself.

Thus, you are right, but it doesn’t change anything. You, being the steward of this land, have voluntarily promised to stick to the rules or get kicked out. That’s what happened.

@nirgrahamUK

owner who is party to the covenant (a mere promise)

Ah, so a contract has now become a mere promise. That changes a lot indeed.

@Juan

I’m pretty fed up with the collectivistic term ‘community’. And John Jack and Joe own three houses, that’s not a ‘community’. Of course, they can do whatever they please in their houses, as long as they don’t aggress against third parties - that’s ‘hard-core’ libertarianism.

Those darn collectivists with their clubs, associations and lodges.

Gladly, we agree that our three blokes can do whatever they want with their houses. Such as, pooling their houses to avoid the presence of dogs. That may be an irrational choice, but liberty is all about choices, right?

Why do you think the state exists ?? Because there are people who want to control their neighbors but CAN’T do it using ‘covenants’.

In this case, all participating members agreed. So I don’t see the problem.

Really ? So they signed a slave contract of sorts in which no party can opt out ? I call that BS.

You can, but not without giving up what you promised as a penalty payment. See my example with the 50$ smoker’s fee. That’s a valid contract, too, isn’t it? And I don’t think that the size of one’s lost property changes anything about the legitimacy of such a penalty clause.

[nirgrahamUK]

no. to show that it is a rothbardian contract you must say what property titles were transferred as part of the contract. and sphairon described a gentlemans agreement with a promise to pay a fine for breaking a mere-promise, the promise to pay the fine for breach of the mere promise is nothing more than a further mere promise. I am not against people promising things to each other, but this is different from contracting with each other.. he did not describe a proper contract.

[nirgrahamUK]

if i want my neighbour and i to contract with each other as a voluntary solution to us both not having dogs on our two properties. then I say to my neighbour. here is 100$ it is yours under condition that for the next year you have no dog on your property.
he takes the dollars and keeps dogs away.
now if he brings a dog, he must return the dollars. he could perform the same contract with me with the roles reversed.

if this is truly what was meant when sphairon said, they contract with each other to not have dogs on their properties or else pay a penalty for non-performance. then it turns out he had a contract in mind. otherwise he did not.

[JAlanKatz]

@liberticity

In the apples and oranges case, there was an explicit trade in which you defaulted. In the dog agreement, you agree to not have a dog on the condition the other owners do too. Unless a specific penalty is agreed to, what is the penalty you will pay for breaking the agreement? Without an agreed penalty, I think it is as nirgrahamUK says, a mere promise and not binding.

Now, if the penalty agreed upon is loss of the property to which the agreement pertains, are you saying that a monetary penalty would replace the loss of property, like a monetary penalty replaces the apples/oranges in your example?

Correct. In the apples and oranges case (I made it with those two fruits, by the way, so that no one could object by saying that the two cases were apples and oranges) there was a time-based transfer of property. Here we have a conditional transfer of property, but the same considerations would apply.

@liberticity

I don’t see a reason why the contract cannot state that the current owner must ensure that the next owner in case of sale will agree to the contract. In that way it is attached to the person.

What if I default and sell my land without getting such an agreement? Who should the penalty apply to - me or the new owner?

[JAlanKatz]

@Sphairon

Really? What if our mutually agreed-upon court rules that you are? I think this would be how contract violations would be dealt with in a free society, wouldn’t it?

There is more to libertarianism than the simple notion of “agree to a court.” Already in Rothbard there were explicit contracts that should not be enforced. What does this mean? It seems to me to mean that there are more and less correct ways for that court to act. The idea of judicial competition shouldn’t be seen, I think, as an end in itself, but rather a means to getting the courts to do things properly. It’s not just license for judges to do whatever they want.

Nonetheless, the Rothbardian answer is that if our mutually agreed-upon court rules in a way that I consider plainly unjust (or just absurd) there are mechanisms for appeal in place if I complain to my security firm.

@Sphairon

But this person happened to own this land. I don’t see where you’re going. You were sovereign of this particular land, but gave up full sovereignty to get rid of dogs in the neighborhood. The contract community is now entitled to your space if you violate the rules you have imposed on yourself.

Thus, you are right, but it doesn’t change anything. You, being the steward of this land, have voluntarily promised to stick to the rules or get kicked out. That’s what happened.

I was addressing how it passes on to the new purchaser. It doesn’t flow automatically in the nature of a deed restriction. I am the one who agreed to the no-dogs clause, and I can’t pass that onto the purchaser unless we explicitly agree to it as a term of sale.

[liberticity]

OK, I see what you’re saying now. But consider the following:

Person A and Person B are neighbors. They want to guarantee a two-house dog-free zone (forgive the non-practicality, just trying to keep it simple). Two cases:

1. They agree to not have dogs on their respective properties over the next year, and to pay a penalty of $100 to the other owner in case of violation.

2. They agree to the same deal, only they say that they each pay each other $100 now to agree to not have dogs over the next year. If either one breaks this, he must pay the other his $100 ‘back’.

The result considering compliance to the agreement/penalty is exactly the same. However, in the case of non-compliance, 1. is not enforceable, but 2. is? Does it matter whether or not they actually physically give each other $100 in case 2. to begin with?