Sultan of Swat
Staff member
Assuming libertarianism means a society based on two axioms:

1) absolute self-ownership
2) absolute ownership of property

can a contract be rendered invalid if one of the parties was induced into signing it by knowing misrepresentation of material facts by the other party (ie fraud)? In fact, can the state have any power to enforce a contract? On what grounds?

The problem as I see it is that if the state were to allow prosecution one party for inducing another to enter a contract with fraudulent claims they would actually be interfering in the right of both parties to exercise self-ownership by entering into any contract they wish, and by reaping the benefits (or the harm) that results from that contract. Now, I am not talking about tricking someone into entering a contract other than the one he thinks he is entering (in such a case there is no consent), but about a person entering a contract to say, purchase a car, where the seller says the car has an engine but it in fact does not. The buyer consented to that transaction, and so even though we feel the state should allow for the victim to invalidate the contract, we cannot say the state can intervene on libertarian grounds.