Update: Thanks to everyone who offered suggestions already. You all are astounding! All sections updated with advice given as of 3/3/12. Also added links at the bottom of a few sections to modified versions of the image which may (or may not) help.

Having discovered the highest resolution images yet of Bilbo holding the contract which Thorin and Co. wrote (see end of post), I’ve spent more time than I’ll admit trying to work out what it says.  You think Bilbo looks perplexed?  I might have had better luck with the Dead Sea Scrolls.  My findings are based on some visible evidence, and a whole lot of guesswork.  Even so, the truly Hobbit/Dwarf-obsessed will be interested in what I’ve been able to discern, and perhaps will continue the study on their own.

You will remember from the story that the note the dwarves left for Bilbo on the mantle (in his own note-paper) touched on only a couple of points: namely the amount of Bilbo’s share of the plundered treasure, and traveling and funereal expenses:

“Thorin and Company to Burglar Bilbo greeting! For your hospitality our sincerest thanks, and for your offer of professional assistance our grateful acceptance.  Terms: cash on delivery, up to and not exceeding one fourteenth of total profits (if any); all traveling expenses guaranteed in any event; funeral expenses to be defrayed by us or our representatives, if occasion arises and the matter is not otherwise arranged for.
“Thinking it unnecessary to disturb your esteemed repose, we have proceeded in advance to make requisite preparations, and shall await your respected person at the Green Dragon Inn, Bywater, at 11 a.m. sharp. Trusting that you will be punctual,
“We have the honour to remain
“Yours deeply
“Thorin & Co.”
(Source: Tolkien, J.R.R.  The Hobbit.  Boston: Houghton Mifflin, 2007.)

First off, one need only glance at the yard long document Bilbo is holding to know the movie dwarves are leaving nothing to chance. The length of the contract appears to be at least 10 times that of the book version (and almost every available inch is taken up with fine print!) Sadly, about half of this is out of view, or entirely illegible, but I’ve made some progress working out the tone of the contract, even if many of the lines can only be read in fragments. These dwarves are exceedingly specific in their “Conditions of Employment”, and I would say this time around, they will have Bilbo over a barrel if he tries anything with that Arkenstone (lame barrel-rider pun fully intended).

I’ve divided the contract into sections roughly based on paragraphs, labeled A thru L, which are upside-down in the image.

My attempt to sharpen the writing in Photoshop actually helped very little, and it was more a matter of zooming in and out, trying to find the magnification which gave the clearest view.  Some letters are very distinctive, namely “d”, which always contains a sharp diagonal line, and “r” which tends to arch up and over the letter following it, and can be mistaken for an “i”, while in actuality, the dot of an “i” is almost never apparent.  Knowing this, it was possible to guesstimate certain words, even if they were otherwise illegible.  As a guide, I am including full-size pictures of each section with my estimates overlaid beneath the lines.  Keep in mind that just because I’ve included a word does not mean I would stake my life on it being accurate (and in some cases, I would be surprised if it was!)  My notes are in italics.

Part A
(?) agreement or undertaking….
and witnessed below as set forth hereunder:
[very fine print]
I, the undersigned, [referred to hereinafter as Burglar] agree to travel
to the Lonely Mountain, path to be determined by Thorin Oakenshield, who
has a right to alter the course of the journey at his so choosing, without prior
notification and/or liability for accident or injury incurred.
Note: I’m not certain the word “path” is right, but couldn’t think of anything else.
Update: Thanks to Bob Miller and Elpidha for seeing “liability”.  

Part B
The aforementioned journey and subsequent extraction from the Lonely
Mountain of any and all goods, valuables, and chattels [which activities are described
collectively herein as the Adventure] shall proceed in a timely manner and with all due
care and consideration as seen fit by said Thorin Oakenshield and companions,
numbering thirteen, more or less, to wit, the Company.
[fine print]
Note: Not sure of “valuables”.  I used both views of the contract to make out the beginning of the last line.
Update: Thanks Bracken Brandybuck and Gordon Macleod for helping work out “chattels” in the second paragraph.
After much difficulty, NK concludes it is “activites” in the first line, while MikeF suggests “actions”. I lean toward the former, but perhaps we are all wrong. NK and I agree on “to wit” in the last line.

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Part C
Burglar holds harmless and without blame in perpetuity the Company
and its successors for…………………………….or……………………………….
Note: Plenty more, but too dark to read.
Update: MikeF, Bracken Brandybuck, and NK make a great argument for “in perpetuity” on the first line.  I’ve also added words to the second line.

Part C – Bonus section
Funeral expenses to be defrayed by us or our representatives
if occasion arises, and the matter is not otherwise arranged for.
[fine print]
Note: The first two words look like “funeral expenses” to me, but the rest is just a shot in the dark that it is the same wording as in the book.  The paragraph appears to have the correct number of words, and I feel like I can just see the word “otherwise”.
Update: Having done some tweaking to the image, I’m now confident the “Funeral expenses” section is accurate.  One of the words in the middle of the undeciphered part also looks like “expenses”.  Might that be the “traveling expenses” line?
Click here to see a modified version of the image.

Part D
Burglar shall choose………………………………………
……………………………………………………Company’s
………………….successful……..of……………………….
[bend in page]
squatter in said home shall not necessarily earn any additional monetary or fiscal
reward, but will definitely guarantee Burglar (if he survives) and Burglar’s family
the undying gratitude and promise of service (?) (?) and forever of the
Company and its successors.
[two lines very fine print]
[one line fine print]
Note: It made little sense at first, but I really couldn’t see any other word besides “squatter” (which is not a term we often use in the US).  I’m going to laugh if they are referring to the dragon as a squatter, although that is exactly what he is.  Talk about downplaying the matter!
Update: Thanks to Jennifer K. Cosham for working out “additional” in the first line after the page bend.
Some have suggested “in perpetuity” in the second to last line, but I’m not sure I see it yet.  Will get back to you.

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Part E
Eviction or elimination of any undesirable guardian of Company’s
property, goods, or premises or holdings, shall take priority over the recovery of
said property, goods, premises or holdings, should such guardian be encountered.
Elimination shall take priority over eviction in any and all cases.
[two lines fine print]
Note: It appears they are referring to the dragon here.
Update: Thanks to Jennifer K. Cosham, Elpidha, and Darkglasses for all seeing “guardian” in the first line.  It made little sense at first, until you add “undesirable”.  This makes me wonder if they use euphemisms for the dragon throughout the whole contract, perhaps so as not to freak Bilbo out right away??
MDW added “premises”, and I decided that “holdings” fit pretty well.  Also added “priority” to the last line.  MikeF and I feel we can see guardian again later in the paragraph, so I’m going with that.
Click here to see a modified version of the image.

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Part F
Burglar hereby accepts……………………………
…………………………………………………………….
…………………………………………………………….
[three lines fine print]
Note: Maybe you will have better luck with this section!

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Part G
Meals provided (or not) at the sole discretion of the Director,
with due respect for availability, season, or any special dietary
requirements not disclosed at the outset.
[three lines very fine print]
[two lines fine print]
Note: This part should not be that hard to read, but it was baffling me all the same.
Update: Thanks to Gratiana Lovelace, Bracken Brandybuck, and Haddock (on TORn) for adding to this paragraph, and helping me realize that it was all about food!  “Means” changed to “Meals”.  So very appropriate for hobbits (and food-loving dwarves)!
Bracken Brandybuck also added “availability”, and “season”.

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Part H
The Principles agreeing to this contract, namely the Company, [as
represented by Thorin Oakenshield] and the Burglar, and known collectively
henceforth as the Parties, shall signify their agreement to all clauses
contained herein [the Conditions of Employment] by signing or making their
marks in the spaces provided for so doing, and affixing seals if applicable.
The Witnesses to this Contract……………………….whose (?) marks or seals
…………………………..and before their understanding and endorsed
agreement to all that is contained herein.
[three lines fine print]
Note: If “Principles” is actually used here, it is spelled incorrectly in this context.
Update: Thanks to Darkglasses and MWDomeier for working on this part.  I now believe “represented” is the word following “as” in the second line, though “designated” is also a strong contender. MikeF added “whose” to line 6, and after closer inspection I changed “in this Contract” to “to the Contract”.  MikeF suggested “imprints” after “whose” on the sixth line, but I feel like it starts with an “s”.  I added “and before” to the seventh line. MikeF sees “Witnesses to this” on the sixth line.

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Part I
Confidentiality is of utmost importance and must be strictly
maintained at all times. During the course of his employment with the Company,
Burglar will hear, see, learn, apprehend, comprehend, and in short, gain knowledge
of particular facts, ideas, plans, strategies, theories, geography, cartography,
iconography, (?), tactics and/or policies, whether actual, tangible, conceptual,
historical or fanciful. Burglar understands and agrees to maintain this knowledge
in utmost secrecy and confidentiality and to neither divulge nor make known
said knowledge by any means, including but not limited to speech, writing
demonstration, re-enactment, mime, or storage and retrieval within means
or apparatus currently known or unknown, or as yet unthought of.
[one line fine print]
Note: This paragraph remains one of the most interesting in terms of understanding the dwarves as a race.  It is little mentioned in “The Hobbit”, but is elsewhere explained how very few outsiders were allowed to know secrets of dwarven culture, and rarely were any given opportunity to learn their language.  It will be interesting if they plan to focus more on this in the film.  For more information on the history of Tolkien’s dwarven races, and their secretive nature, check out Middle-earth.xenite.org, and the essay Them Dwarves, Them Dwarves, Part Two.
Update: Thanks to Jennifer K. Cosham for adding the word “fanciful” (I had a feeling that was it, but wanted a second opinion) and ”apparatus” to the last line.
NK suggests cartography, and Bracken Brandybuck enlightens us with “apprehend”, and also casts a vote for “cartography”, while MikeF gives us “mime” and “unknown”. Yes I know, “MIME??” The dwarves are really thorough in making sure their secrets are maintained, though they neglected to include sculptural arts, and interpretive dance as possible methods of communication.  Woe to them!    I’ve also added “tactics”, “iconography”, and “actual” to the paragraph.  Looking at it again, “tactics” might be something like “articles” or might be attached to the word before.  Not sure.
Click here to see a modified version of the image.

Part J
Early termination of this Contract shall (?) (?) early termination
fee to be determined by Thorin and Company at their sole and absolute
discretion. All clauses contained herein shall survive such termination and
remain enforceable in all countries whether existent now or in the future,
throughout the known world.
[three lines fine print]
Note: Even in Middle-earth you have to watch out for those hidden fees!
Update: Smaug the Squatter (luv the name!) suggested “results in” for the first line, but though sense it makes, I can’t see it yet.  I’m thinking something like “require an”, but there appears to be an “r” right in the middle of the first word, and no “q”.

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Part K
Disputes arising between the Contract Parties shall be heard…
[page bends]
Note: Not much to say about this one.

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Part L
This agreement constitutes the entire agreement between the parties, and replaces
and supersedes all prior understandings and agreements whether written or oral, with
respect to the subject matter described and set forth herein.

Except as is set forth in the key provisions, Burglar [page bends]
permit or allow any distribution of the recovered goods of any kind whatsoever(?) without the
Company’s written permission, which may be granted [or not] at the Company’s sole discretion.
Note: That word in the center that I can’t read is driving me nuts.
Update: Thank goodness!  Elwing helped me keep my sanity by explaining that it is actually “provisions” in the second paragraph.  And thanks to David for adding “between” to the first line.
I really am stunned at that MDW managed to fill in four lines on the right side of this image.  I can’t see anything that contradicts these suggestions, although neither can I make out “of any kind whatsoever”, so I’m leaving it in italics.
Click here to see a modified version of the image.

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Were I a professor of ancient dwarf history, I would likely lose my tenure after presenting this fragmentary mess to my colleagues, but it is as good as I can manage, and I must cease efforts before my eyes begin to bleed onto the keyboard.

I hope that at some point we will be given the full text of this prop.  If you are not worn out after reading this (you are still reading, right?) then perhaps you will take a stab at filling in the blanks (or proposing alternatives to what I have presented) by downloading the images I used (and yes I’ve been holding out on you, they are larger than the ones in my gallery).

Bilbo and the Contract – image 1
Bilbo and the Contract – image 2

Feel free to share these results (such as they are), though if you do post it elsewhere, please link back to this page so others can share their reactions with me, and possibly help discover further secrets.