In Libertopia Valid Contracts Require Exit Clauses

Yesterday I stumbled across this lovely story of a landlord putting a clause into their lease agreement that would punish renters that wrote bad reviews with a $10,000 fine. As if that wasn’t enough the lease agreement also gives the landlord the copyright to anything a renter creates involving the property (including photographs of the property and written reviews of the property):

The Social Media Addendum, published here, is a triple-whammy. First, it explicitly bans all “negative commentary and reviews on Yelp! [sic], Apartment Ratings, Facebook, or any other website or Internet-based publication or blog.” It also says any “breach” of the Social Media Addendum will result in a $10,000 fine, to be paid within ten business days. Finally, it goes ahead and assigns the renters’ copyrights to the owner—not just the copyright on the negative review, but “any and all written or photographic works regarding the Owner, the Unit, the property, or the apartments.” Snap a few shots of friends who come over for a dinner party? They’re owned by your landlord.

The article notes that the agreement would be shredded by any judge. But the more interesting part about this story was the conversation I got into with one of my libertarian friends. When I posted this story on Facebook I noted that I wouldn’t abide by an agreement such as this one. My friend stated that I shouldn’t sign it then because I was planning to violate the voluntary agreement and therefore would be committing fraud.

This brought up an interesting debate over what constitutes a voluntary agreement. Some libertarians believe any contract signed in the absence of coercion is voluntary. I don’t subscribe to that belief. Based on my view of libertarianism I believe any voluntary agreement must include an exit clause for any party that signs it. If an exit clause does not exist for all parties then the agreement ceases to be voluntary as soon as one party changes their mind. One of the reasons I don’t consider the United States military to be a voluntary organization is because people who enlist have little recourse if they later decide they want out. Without an exit clause a supposedly voluntary agreement becomes a form of, abeit limited in most cases, indentured servitude.

I say all of this with the understanding that exit clauses can have stipulations. Entering a business agreement with other parties is difficult if one of them backing out could leave you on the hook for their financial responsibilities. For example, it would certainly be valid to require a party exiting from a business agreement to pay their portion of any debt incurred. Libertarians can debate this objection of mine but my other objection, I believe, is harder to argue against from a libertarian standpoint.

As longtime readers know I don’t believe intellectual property is anything more than state created fiction. However even if we accept intellectual property is a thing copyright in this country is defined arbitrarily by uninvolved parties. Right now the length of a copyright in the United States is the life of an author plus 70 years. Work for hire copyrights are valid for 95 years after publication or 120 years after creation if it’s unpublished. But these durations are created entirely by politicians in Washington DC and can therefore be redefined without any input from creators or copyright holders. In other words the copyright claimed by the landlord, over your creation, could become indefinite with the stroke of a pen. How can one be expected to abide by an agreement that could change at anytime without their input?

It’s also worth considering if signing a knowingly invalid agreement with the express purpose of violating it is fraud. To this I would ask if you can fraud a fraudster? Clarifying further I would ask if you stole stolen property to return it to the original owner would you be a thief? In both cases I would answer in the negative. Taking stolen property with the purpose of returning it to its original owner is a method of righting a wrong. Likewise calling somebody out on their bullshit is also a method righting a wrong. If somebody is including an unenforceable clause in a contract then they should be called out. One way of calling them out is to sign the agreement, violate the clause, and demonstrate that it’s unenforceable. As an upside, since it would force the including of the clause to expend resources, this method of calling out their bullshit would raise the stakes of including invalid clauses as opposed to just telling them the clause is invalid.

In summary I would argue that the linked agreement would not only be invalid under current laws but would remain invalid under stateless Libertopia. Just because two parties signed a contract doesn’t mean it’s a valid agreement even under libertarianism.

One thought on “In Libertopia Valid Contracts Require Exit Clauses”

  1. A more common and less contentious libertarian objection to such terms of contract would be that rights are inalienable. A term limiting freedom of speech would essentially be a blank spot in the contract, a bit of graffiti or extra margin. There’s no moral stain to signing a contract with wide margins or decorative arabesques.

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