You can't make a deal with an Indian... how true?

Factual Questions
1

First nations person, legaly binding agreement, and in Alberta (or elsewhere?) that is.

I have a rather elderly aquaintence who insists up one side and down the other that native indians in these parts are considered “wards of the state” or something to that effect, and that pretty much any contract or written agreement they sign isn’t enforcible should they decide to opt out.

Supposedly this goes back to the days when all the indians were considered essentialy children by the government, consequently had fewer rights and so forth, and the govt took more control over them (including taking away their children to raise in white families, and all the other bad stuff we hear about)… and since they are “children”, they can’t legally enter into agreements off the reserves.

And of course this notion is supposed to explain why indians seldom own much of value off the reserves and why they never seem to get very far in non-indian cultures and few people trust them - no bank would give them a loan since the indian doesn’t have to pay it back if he doesn’t want to, and there’s nothing you can do about it.

Yes, sounds pretty weak to me too, more like an UL and old-time racist reason not to trust them and to keep segregation alive. There’s also supposed to be something in there about non-indians living on their reserves. Of course you can’t buy or own indian land, but you can lease it. Due to the theory above, they can jack the rents up to whatever they want, so you can only stay on the reserve as long as you can pay what they ask… so they have ways to get rid of you at any time even if you have a 99 year lease. So the moral of the story I’m told is that “you can’t make a deal with an indian”.

This all sounds like a load to me, but I don’t know enough about laws and treaties to quote anything to the contrary. Can someone tell me more?

2

In the U.S., it’s a very complicated mess, and it sounds like your source has mixed together a lot of the components, from usufructuary rights to treaty enforcement. Here, the enforcement of business and personal contracts depends in large part on the status of the Indian party: is it a tribal government? a tribal corporation? a tribal corporation with a U.S. charter? an individual? It matters which. Some contracts are in the sole jurisdiction of the tribes, but others fall under the Bureau of Indian Affairs’ very wobbly Section 81 statute.

But in general, if an individual from the tribe has taken out a loan from a U.S. bank or lending institution, then the U.S. government has jurisdiction to enforce the loan’s terms.

3

Yeah, it’s impossible to make a deal with an Indian…I mean look. The U.S. government made dozens of agreements with them, and none of them were ever kept. So it must be pretty hard.

Not because of the Indians, though.

Never trust a woman or a government.
–Yellowbeard

4

mmmiiikkkeee, although your source’s account is a bit garbled, some of the things he’s saying about the law are correct, or were correctly until fairly recently

I don’t have the precise cites available, but up until about the 70s, under the Indian Act, status Indians living on reserves could not make a contract without the consent of the local Indian agent, a federal offical. In theory, this provision was enacted to prevent status Indians from being ripped off by unscrupulous whites, but in practice it prevented status Indians from becoming successful business people, and kept them in a state of dependency on the federal Indian agents. (Try becoming an entrepreneur/small business person if you have to get a government official to approve every single business transaction.) Those provisions were repealed in the 70s, if I remember correctly.

With respect to renting land on reserves, under the Indian Act the Crown holds the land in trust for the band, but the band council has control over the administration of the land. So you can lease land from the Band Council, but don’t have any right to stay on the land at the expiry of the lease, the same as any other lease. While the lease is in force, any increases in rentals can only occur under the terms of the lease agreement. (There was a major case that went to the Supreme Court of Canada on this issue a while ago - long-term leases of residential property on reserve property allowed the band to increase the rent, but did not give a detailed formula for valuation.)

Your source is also correct that traditionally status Indians living on reserves have had difficulty borrowing money from banks to start up small businesses. The Indian Act provisions have been part of the problem, since the way most fledgling small business people/entrepreneurs get their initial loans is by pledging their own property as collateral (e.g. - mortgage on the house, security interest in personal property). However, under the Indian Act, a status Indian living on reserve does not own the land he/she is living on - the land is owned by the Crown and administered by the Band. At most, the inidividual has a personal right to live on the land, which cannot be pledged as collateral. The Indian Act also provides that personal property located on a reserve cannot be seized by way of civil execution, so even though an individual may have a lot of personal property, he/she cannot give a valid security interest to the bank as collateral. Again, these provisions date back a century or so, and were designed to protect Indians from sharp practice and trickery by whites, but their net effect today is to hamper the ability of an individual status Indian on reserve to get credit to run a business.

Note that I’m not saying that these provisions are the only reasons status Indians have had difficulty getting credit - prejudice and discrimination have played a role too. But some banks nowadays are entering into partnership agreements with bands to try and work around the restrictions. For example, in Saskatoon, a First Nations bank opened a few years ago through an affiliation agreement with one of the major chartered banks.

I’ve had the occasional discussion with individuals who start spouting the usual sterotypes. I point out these legal restrictions and ask them how if they could run a small business if they were subject to such restrictions. There’s usually no answer.

5

A similar situation exists south of your border. In the U.S., an American Indian cannot legally convey any land which is held in trust by the United States for the use of an Indian tribe. In historical practice, oftentimes when a non-Indian “liberated” such land from a tribe s/he was allowed to keep it through legal means or otherwise.

American Indian tribes also enjoy sovereign immunity, which in many cases protects tribes from liability in damages suits. Enter into a contract with an Indian tribe without a waiver and that contract is worth about as much as… oh, say… an illegal treaty imposed by people impersonating federal agents.

6

I think it boils down to that “forked-tongue” thing.

Wait, that’s US!

Never mind.

7

Sheez, considering how the Indian tribes were treated, shouldn’t it be “You can’t make a deal with a white man”?