The older kids have been playing with the concept of contracts, which has often involved attempts to trick the other into signing something. Like the time when Anna (6y) couldn't read yet and Lily (8y) prepared an unfavorable contract and "read" it to her by making up something with much more acceptable terms. We talked about how a contract requires both people to understand the agreement but it seems not to have stuck.

Yesterday the kids started exploring various forms of contract fraud. Anna wrote a very one-sided attempt at a contract, and didn't consider Lily's unwillingness to sign it to be an issue:

I Lily Wise will let Anna have whatever she wants from me

That's Anna forging Lily's signature. I explained that if you write someone else's signature it doesn't count, but it turns out this wasn't the right level of explanation. Lily got Anna to sign a blank piece of paper (an "I want your autograph" should have been very suspicious given the earlier contract shenanigans) and then pasted it onto a contract:

I Anna will do whatever Lily and Nora want

We talked about how that's also fraud, but they weren't very interested in my explanation.

I also wanted to get into how in addition to lacking mutual assent these contracts lacked mutual compensation and were probably substantively unconscionable, but they went off to play something else so I explained it to Nora (1y).

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I remember as a kid, about 12, loaning my less-mathematically-astute younger brother $4, at 10% interest per day, compounded daily. I remember gloating about how much money he was going to owe me. I was going to be RICH, mwuahh hah hah!!

My Mom told that loan sharking was illegal, and my Dad told me that contracts with minors were not enforceable. My brother I think borrowed some money from one of his friends (on much more favorable terms), paid me back with one day's interest, and never borrowed money from me again.

[-]lc40

I did this too to a schoolyard kid, except he repaid me the next day, so it was kind of deflating.

In my household, my older daughter (7y) will sometimes try to make deals with my younger son (3y). Once she got him to agree to trade a small piece of candy for giving away one of his favorite Christmas presents. We told her that he doesn't understand that these kinds of deals are "for keeps" - and that any deal she makes with him needs to be approved by us. But yeah, kids this age are crafty!

My kids were making agreements and bets and when trying to get them enforced learned that it helps to have it written down or having a witness. One of my sons, when 12, made a contract with me to have the right and responsibility to shovel snow for compensation for one winter season. 

That's how children learn what a contract is and get an intuitive understanding of where the edges are. Though I haven't heard it done among 6-year-olds.

These posts are so very wholesome and I enjoy them thoroughly. 

[-]lc44

Your children are adorable (and smart!!!)

A lot of people seem to think that signatures are magic. Would you agree with that description of your children? It would be interesting if you could figure out where this idea came from, either spontaneous generation or transmission.

A lot of people seem to think that money/property/guilt are magic. Or, for that matter, more physical processes like electricity, GPS or refrigeration.

The first thing to do is to distinguish human things from inhuman things. Physical things really are run by rigid laws. Social things like contracts, money, property, and a guilty verdict are caused by humans and this should make it obvious that they don't have rigid behavior. (The feeling of guilt is yet a third category.)

I agree that social and physical things are different (I mean, I indicated so). But please explain how guilt is different.