In the context of Contemporary Ethics can you please help further
define the basic principles of "Social Contract Theory" and how one
could apply them to resolve or clarify a contemporary social problem
or moral issue.

Hello again stwalsh~

According to the Internet Encyclopedia of Philosophy, the social
contract theory “is the view that morality is founded solely on
uniform social agreements that serve the best interests of those who
make the agreement.” (“Social Contract,”
http://www.utm.edu/research/iep/s/soc-cont.htm ) The theory of social
contract is an outgrowth of the “natural law” theory, and, as IEP
states, “we find hints at social contract reasoning in earlier works,
most notably in Book 2 of Plato's dialog The Republic.”

Proponents of the theory say that acting unfairly toward others is, to
a degree, satisfactory to we humans--yet we also obviously recognize
that it’s not in our best interest when others act unfairly toward us.
Feeling that if we’re unfair to others, they will likely be unfair to
us, we make “contracts” (implied, written, or oral) with others,
promising to practice fairness and justice with each other.

Further, the theory holds that political structures are derived from
these individual “contracts;” individuals agree to a government (which
makes them surrender certain rights), in order to have the protection
and stability of an organized society. Sometimes this theory is also
called “contractarianism.”

How this theory is applied to everyday life depends upon who is
interpreting the theory.

“It could be thought of as a kind of rule utilitarianism,” says one
professor of Psychology and Philosophy. “We should do whatever is (or
would be) commanded by the set of rules that make us all better off. 
What it means to be well off would have to be determined some way, but
for a classical utilitarian it would be defined in terms of pleasure
(or the absence of pain).”  (Duncan Richter, Virginia Military
Institute, “Social Contract Theory,”
http://academics.vmi.edu/psy_dr/social%20contract%20theory.htm )

“Alternatively,” Richter continues, “social contract theory might be
thought of as a kind of justification of obeying the rules, whatever
they might be, rather than a theory aimed at telling us what rules
should exist…Another problem: How can social contract theory include
those who could not possibly consent to the contract (e.g. babies, the
mentally ill, the environment, etc.)?  Does morality have nothing to
do with how we treat them?”

However, one could apply the theory to a real life situation in this
way: If a person is faced with a decision about whether or not to
treat someone unfairly, applying the social contract theory would make
them turn from their desire to behave unfairly. For example, let’s say
two students hand in an assignment and they are identical; one student
has obviously copied the other student’s work. When the professor
discovers this, the student who stole another’s homework is faced with
this problem:

• Should he lie, trying to make a convincing case that the other
student is the cheat, and not him? (Thereby, saving his own behind,
but causing the other student great harm)

• Or, should he tell the truth (even though he will suffer the
consequences) so that he does not unfairly hurt another person?

If the student applies the social contract theory, he will choose the
latter course.

Keywords Used:

"Social Contract Theory"
://www.google.com/search?hl=en&lr=&ie=ISO-8859-1&q=%22Social+Contract+Theory%22&btnG=Google+Search

Thank you, your response was timely and answered my question with
exceptional detail.