I was re-watching the Hobbit films last weekend, and noticed in "An Unexpected Journey", there is a scene in Bag End where the Dwarves present Bilbo with a contract, outlining the many potential dangers (incineration?!) and a purse upon successful completion of the quest.

A little later in the film, the Dwarves (and Gandalf) leave the house the next morning whilst Bilbo is still asleep. Bilbo catches them up with the contract, signed on the dotted line (so to speak).

I was wondering, does this mean there's a legal system where-upon had any part of this contract been breached, there could be a legal dispute that was settled by an intermediary?

It seems strange to me that such an agreement could be made so formally between two different species, because surely the Dwarves wouldn't share the same legalities as Hobbits, even if there were a system in place for each species.

Anyone have any ideas as to what repercussions a breach of this contract would have? Or if there's any real world examples of how such an agreement plays out, when essentially it's a case of an extremely unlikely and dangerous task to take, that in reality most of the parties involved expected Bilbo to either fail and die a horrible death or run away at the first sight of danger.

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    There is mention in the books of a dispute between Bilbo and the Sackville-Baggins, but that of course would be purely Hobbit.
    – Chenmunka
    Commented Dec 9, 2015 at 15:36
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    Just because it is in the contract doesn't mean it is enforcable...
    – Yorik
    Commented Dec 9, 2015 at 15:54
  • 13
    VTC: migrate to Law.SE :) Commented Dec 9, 2015 at 19:18
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    Perhaps the contract had to be made so formally because they were different species... If they were subject to the same legal systems, perhaps a more informal, or limited contract would have sufficed - not as much room for arguing misunderstandings or assumptions. But with a long, complex contract, it would be more enforceable because he read the clauses, and signed anyway (making it a matter of his specific word, not the larger legal systems)
    – Megha
    Commented Dec 10, 2015 at 3:36
  • 2
    Obligatory mention that it's different in the book, in which there is instead a verbal agreement and a letter that Bilbo carries with him intact through all his adventures and produces it at the end, but not a signed contract. It does seem that in the books, the main thing that prevents most residents of Middle Earth from taking advantage of the relative lack of a legal system are personal notions of honor and reputation. Some characters act poorly and their reputations suffer because of it (Bill Ferny springs to mind, and the Sackville-Bagginses, to a lesser extent). Commented Dec 11, 2015 at 4:39

6 Answers 6


There does not appear to be a general method for resolving disputes between races1, suggesting a lack of universally-recognized legal system (or treaties between the systems of different races).

We see this become a problem in The Hobbit, when the Dwarves, Elves, and Men of Dale decide to resolve the ownership Smaug's Horde using the time-honoured tradition of Bigger-Army Diplomacy. Presumably the contract the Dwarves drew up with Bilbo was designed with exactly this in mind; if he agreed to the terms of the contract (which we don't know entirely what they were), then there would be no cause for him to resolve his grievances by summoning the Grand Army of the Shire.

It's not clear what would have happened if Bilbo had breached his contract.

Disclaimer: I am not a lawyer, but I have studied basic contract law

In an international dispute, parties can usually pursue action in one of three places:

  1. National courts. Jurisdiction would need to be determined, but in the absence of a common law court system that's probably not much of an issue; action could be brought to a court essentially anywhere in Middle-earth, although either a Dwarvish or Hobbit court would be the most logical.

  2. Arbitration. Bilbo and the Dwarves could decide to choose a private arbiter to resolve their dispute. In Middle-earth, where the court system is underdeveloped (at best), this is most likely what a national court solution would devolve into, though arbitration doesn't suffer from the jurisdiction problem.

    Any person in Middle-earth could arbitrate, as long as both parties accepted their authority; Gandalf would be a plausible person to do so, as would the Steward of Gondor. Someone like Elrond (mistrusted by the Dwarfs) or a Dwarf-king (probably untrusted by Bilbo, because of conflict of interest concerns) would be unlikely, but not impossible.

  3. International tribunal. This doesn't really apply here, since in the real world this only usually happens when a government is accused of violating international treaties. It's also not clear what sort of tribunal might exist in Middle-earth; the only trans-racial coalitions I can think of in Middle-earth are:

    • The Last Alliance, which is defunct by the time of The Hobbit
    • The White Council, which is super secret, substantially Elvish, and not known by outsiders to be trans-racial (since most people don't know the truth about the Wizards)
    • The Fellowship of the Ring, which doesn't exist at the time of The Hobbit

    In theory an international tribunal could be set up for this purpose, but it seems stunningly unlikely.

All of these forums suffer from a significant problem: in order for their judgements to be effective, there needs to be something preventing one party from violently protesting the judgement. Whether this is the case or not is...questionable.

The Movie

Interestingly, the contract shown in the movie is actually a real contract, and a remarkably good one. James Daily, an honest-to-goodness lawyer, analyzed the contract in a post on Wired.com, and discusses it in great detail that I won't go into.

I will, however, note two clauses relating to breach of contract.

  1. If the Dwarves breach the contract, Bilbo will be compensated with gold:

    Burglar acknowledges that monetary damages alone will be adequate compensation for a breach of this contract by the Company.

  2. The contract specifies resolution by arbitration, the arbiter to be chosen by the Dwarves and all arguments to be in the Dwarvish tongue (presumably Khuzdul):

    Disputes arising between the Contract Parties shall be heard and judged by an arbitrator of the Company’s choosing and all pleas shall be pleaded, shrewed [sic], defended, answered, debated and judged in the Dwarvish Tongue

    This is obviously a pretty foolish thing for Bilbo to have agreed to, but then Bilbo had been a bit overwhelmed (and hung up on the "evisceration" and "incineration" clauses)

1 That individual races had their own, purely internal, legal systems is unquestionable; I'm primarily interested in the question of how inter-racial disputes are resolved

  • Moved comments to chat.
    – user1027
    Commented Dec 10, 2015 at 20:17

The presence of contracts does not imply the presence of a legal system. Throughout the world and throughout history people have made formal agreements with each other based on nothing more than reputation and honor. In a society like the Shire where everyone knew either each other or each other's family a reputation as contract breaker would make life difficult for both you and your family. It just wasn't done.

Similarly, for a leader of Dwarves, or an aspiring leader, reputation is critical. Were Thorin to sign a pledge on a life-or-death matter in front of his kin and Gandalf and then break it, how willing would those kin be to follow him into battle? How willing would Gandalf be to help him in the future?

Now there might be little recourse for the Dwarves to hold Bilbo to the contract other than the fact that there were 13 Dwarves and only one Bilbo. They might sully his name but Shire-folk might pay little attention to the opinions of Dwarves. On the other hand, if Thorin returned to Dwarf territory and Bilbo were to pursue justice with Dain II Ironfoot or some other king, that king might look at the contract and force Thorin to honor it. Or if Thorin became king he might choose to honor it. In both cases the answer would be "Let it not be said that Dwarves do not honor their promises." After all, they have to do business with other races around them.

Why the contract instead of just a verbal "ok I'll do it" agreement? First, even societies with little government, whether they be pre-modern or playground, have formal ceremonies for making serious contracts versus simple loose talk. It might be "cross your heart and hope to die", "spit on your hands and shake" or in ancient pre-monarchy Israel the exchange of a sandal (see the book of Ruth). Second, if you want to appeal to a king or sully reputation it helps to have proof. Thirdly, a written record prevents issues with people disagreeing about what was in the original contract. Memories can be wrong and trust may be ruined despite both parties honestly believing their own memory to be the correct one. Finally if there is a dispute about the original intentions the written contract serves as the authority on what was agreed to.

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    Exactly my thoughts - and for the last paragraph, I'd add two things: On the one hand, it is often a good idea to agree on how to handle certain disputes before the disputes occur, because when the disputes occur, the involved parties might not be ready for compromise or agreement any more (or even "forget" certain parts of the agreement). On the other hand, the resulting list of dispute resolutions was rather lengthy, so writing it down may have been preferrable to memorizing everything. Commented Dec 10, 2015 at 20:24
  • @O. R. Mapper Thanks, I added a bit more based in part on your comment.
    – Readin
    Commented Dec 11, 2015 at 4:49

Note: This is from the Lord of the Rings book, not the Hobbit film.

In the Shire, there were the Shiriffs, who seem fill the role of local law enforcement agency, although I doubt they'd be responsible for interpreting and enforcing contracts:

... they were in practice more haywards than policemen, more concerned with the straying of beasts than of people.

(From the Prologue, Of the Ordering of the Shire.)

The Shire had the Mayor of Michel Delving, the Thain, and a few other officials (a Postmaster and the First Shirriff), but

... the Shire at this time had hardly any 'government'. Families for the most part managed their own affairs.

(Also from the Prologue).

There is a reference, in Chapter 1, A Long-Expected Party, of Bilbo's will, which may imply that there were, at least, lawyers to write such things and judges to interpret them:

He [Otho Sackville-Baggins] read the will carefully and snorted. It was, unfortunately, very clear and correct (according to the legal customs of hobbits, which demand among other things seven signatures of witnesses in red ink).

As to how a contract between hobbits and dwarves would be interpreted is still anybody's guess!


There is the briefest reference to law in The Silmarillion. Eöl, pursuing his wife Aredhel and son Maeglin, encounters Celegorm and Curufin, sons of Fëanor and princes of the Noldor. Following a brief exchange Celegorm advises Eöl to abandon his pursuit but does not try to stop him, saying: "by our law I may not kill you at this time ...".

By implication there were some laws, although the events here would have occurred millenia before the events of LoTR and the Hobbit.

Now that I think about it, there was a possible breach of contract later in The Silmarillion regarding a necklace produced by Dwarven artisans for the King Thingol; perhaps payment hadn't been explicitly agreed, but the Dwarves demanded a payment Thingol that angered him so much that he expelled the Dwarves, refusing to pay them at all. Repercussions: war, followed by reprisals. I'm omitting considerable detail here, and I think in other writings Tolkien gave different versions of the story, but it may suggest a difference in interpretation of contract law by both parties, or the chapter may be a cautionary tale showing the dangers of operating without explicit contracts.

  • Well as for the dwarves versus Thingol: by getting involved with the Silmaril he set himself up to doom. As for different versions - well the first five volumes of HoMe are if I am thinking right about the First Age but either way yes Tolkien had different versions of The Silmarillion; it was only the last one that he never finished - that we have CT to thank for for editing and publishing.
    – Pryftan
    Commented May 28, 2018 at 2:36

I's clear from 'Lord of the Rings' what hobbits had a legal system, though it's hidden by the rural and agricultural feel that Tolkien uses. For example, there are wills, and auctions, and clearly there were legal entanglements there.


there has been trade between different societies and different cultures since long before the rise of Civilization. Even in ancient times there was a lot of contract law preccident and preccident for settling disputes between merchants from different cultures.

So it would be realistic to assume that there MIGHT POSSIBLY be an obvious way to handle any disputes between Bilbo and the Dwarves which might arise. of course civilization in Eriador and Wilderland had been broken down a lot in the last few millennia so it is possible that there was no remaining way to settle any disputes.

The Dwarves would retain a capacity to settle contract disputes with outsiders more than any other group in Middle-earth, while the Hobbits of the Shire should have been used to Dwarves traveling though the Shire and buying supplies, etc., for centuries and should have had ways to handle contract disputes with Dwarves.

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