Ah... thanks for posting this, Ashcroft, I mostly missed this thread. Sorry!
(it's becoming harder to hide that I'm a blonde... hmpf, fair-haired iRL)
Anyway, like you so well pointed out, there are two separate issues here. One is that most work in CN will be outsourced, either to NFS/CDS citizens, or to third parties. We need to establish a contract with them that not only deals with payment issues, but transfer of licenses on the use of the content created. So both things are actually needed.
The Confederation of Democratic Simulators is not a "natural person or a registered company" etc, but that will always be the case, isn't it? All we can ever claim to be is that the CDS is the name of the virtual goverment of a territory in Second Life, over which its jurisdiction is held. This means that the contracts/deeds/assignments are only valid under the CDS's jurisdiction (and eventually any other entity that recognises the CDS's jurisdiction — at this moment, none whatsoever).
So, the CDS is truly a virtual entity, a virtual state, and its existence as a legal persona is only valid in relationship to the CDS itself. This is not unlike a contract signed, by, say, the Principality of Sealand or any other unrecognised micronation. Anyone might argue that, since the Principality is not recognised formally by any country, all contracts signed between the Principality and outsourced companies are void, by definition, since there is no legal persona that can ackowledge the existence of the Principality (one could, indeed, argue that the self-styled Prince of Sealand is, in fact, a subject of HMQ Elisabeth II, and thus he would be able to sign contracts in his personal name instead, which would be enforceable under British law. In practice, that would defeat the whole point of claiming that Sealand is a sovereign state 
).
Note that I like the "Definitions" bit and agree that they should be included in every contract signed by the CDS with any contractor.
I fail to understand why you feel that the CDS should *not* have contracts with the people they're going to, uh, "contract" the building job. Somehow, you seem to be doing a 180º turn by minimising the whole purpose of the CDS legal system Of course the CDS will sign a contract with prospective builders and texturisers, and naturally those contracts will be valid nder the CDS's jurisdictions.
There is no need to confuse the issue by stating that the contracts won't be valid in any real world court. That is not their intended purpose at all If people would require a valid, real world contract, valid in a real court, under, say, the jurisdiction of Namibia, well, we would have to write it differently.
Right now, people in SL work under no contract at all, or, in some limited cases, under a notarised contract signed at the Nota Bene device. But they have no jurisdiction to refer to The CDS, however, has — it has its own jurisdiction
