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People Agree to Form a State In short, the social contract theory argues that the state arose out of a voluntary act of free people. It holds that the state exists only to serve the will of the people, that they are the sole source of political power, and that they are free to give or to withhold that power as they choose from the government. The theory may seem somewhat far-fetched today. The great concepts that this theory promoted, however- -popular sovereignty. limited government, and individual rights were immensely important to the shaping of the American governmental system. The Declaration of Independence justified its revolution through the social contract theory, arguing that King George Ill and his ministers had violated the contract. Thomas Jefferson called the document "pure Locke." In the Declaration of Independence, Jefferson also included justification based on the "laws of nature and nature's God," meaning that the colonists right to have an equal voice in their government was given by nature and could not be taken away by the king.