The Social Contract

John Locke: "Wherever Law ends, Tyranny begins."

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PART 1: How does a contract work?

One of the most common types of contracts these days is where a person decides to pay for something and pay for it over time because it's too expensive to pay for it in one big payment. Items such as cars, houses, major appliances, and furniture are all examples of things that are purchased over time. Even credit cards, used to purchase many smaller value items, are based on the idea of a contract; the seller agrees to let you have that item right away with the promise that you agree to pay for the item over time.

But even the most carefully constructed contract can be broken. If you agree to buy a car but fail to make your payments, you will have broken the contract, and the car seller may decide to end the agreement by repossessing the car. Or, if you are extremely unhappy with the car --especially if it doesn't live up to the claims made by the seller-- you may seek to get your money back. (This might be a long and difficult process, but you could try).

In either situation, the ability of either party to a contract or agreement to seek an end to the contract if it is not fulfilled is the basic idea behind a contract. In the example above, you and the car seller freely decided to enter into the contract. Your agreement to make regular payments is the seller's guarantee that he or she will eventually get the money agreed upon, and the seller's ability to take the car back if you fail to make payments is the seller's safety net. The seller's assurances of performance and safety, and varying types of "Lemon Laws" and consumer rights are your safety net if the seller was not accurate or honest.

And that's the basic idea of a contract: Both sides have something to gain by entering the contract, both sides offer something of value to participate in the contract, and both sides have a way out if the contract does not work out.

NEXT> Then what is a SocialContract?