Strawman, try again. 

http://en.wikipedia.org/wiki/Ethics is not for the intellectual? 

A discussion on what is ethics may be intellectual.  
This topic is not a topic discussing what is ethics, this is a topic asking "is this or is this not."

• Applied ethics draws upon ethical theory in order to ask what a person is obligated to do in some very specific situation, or within some particular domain of action (such as business)

Don't say I'm using a strawman if you think I'm misunderstanding it.

From what I can tell, Rothbard says that a contract is cancelled as soon as one party chooses not to follow it.

From that, if the other guy gets my goat (I think that's sexual innuendo) and doesn't trade me his contractual obligation, then all he is liable for is his civil infraction of possessing something that belongs to me without my consent. Thereby, to rectify, he must give me it back.

Is that right? In my opinion, that is akin to saying contracts don't mean anything more than a simple plan to do something. At least if I'm interpreting it correctly.

I'll make this simple, actually.  The key word here is "justification." 

The icelandic thing was replicating state functions on an ad hoc basis, though. This is viable for a society with a very small population like medieval Iceland, but one still notes that there is a higher legitimacy to which people must submit themselves for the enforcement of individual rights, albeit through a purely voluntary structure.

Modern society, meanwhile, demands a state in order to enforce the rights of individuals. Any interaction between humans needs some form of legal structure with enforcement capability (a state-like entity) in order to enforce the rights of individuals without having to revert to tribalism.

I thought you intentionally misrepresented the argument. Your revised statement, is fully accurate. I personally find theft more unethical and legally binding than somebody not following through with a promise. Usually theft is dealt with in criminal courts and not civil courts.  

"that is akin to saying contracts don't mean anything more than a simple plan to do something."

THE RIGHT OF PROPERTY implies the right to make contracts about that property: to give it away or to exchange titles of ownership for the property of another person. Unfortunately, many libertarians, devoted to the right to make contracts, hold the contract itself to be an absolute, and therefore maintain that any voluntary contract whatever must be legally enforceable in the free society. Their error is a failure to realize that the right to contract is strictly derivable from the right of private property, and therefore that the only enforceable contracts (i.e., those backed by the sanction of legal coercion) should be those where the failure of one party to abide by the contract implies thetheft of property from the other party. In short, a contract should only be enforceable when the failure to fulfill it is an implicit theft of property. But this can only be true if we hold that validly enforceable contracts only exist where title to property has already been transferred, and therefore where the failure to abide by the contract means that the other party’s property is retained by the delinquent party, without the consent of the former (implicit theft). Hence, this proper libertarian theory of enforceable contracts has been termed the “title-transfer” theory of contracts.

This means that, just because I declare I will do something, does not mean I am bound to enact my claim. Until the agreed transaction occurs, the contract is not fullfilled, but it doesn't need to be fullfilled. If one party fullfills the contract, and the other does not, then that is theft and is punisheable through legal action. Otherwise, contracts are not enforceable. If they were, indentured servitude and voluntary slavery would make sense, which they do not, because ownership of one's body cannot be transferred, by nature. 

Anarchy isn't the absence of law or government. If participation is 100% voluntary, then the entity is not a state. States are by definition forceful. In Iceland one mustn't submit oneself to the will of the Godor, but if one does not his own Godor will not protect him from rightful retributative force. It was entirely voluntary. 

This is how it worked: You harmed me, pay retribution. (I have a right to use force to make you pay, because you used force against me.)  If you answer no, then I must consider whether or not I can force you (practically.) If I am not able to force you, then I'd have the Godor or my family or somebody else reach a settlement or force you. You would then have your Godor or family pay retribution, or reach a settlememant. If they choose not to, then the other Godor will force you to pay. If you can't pay, or choose not to pay, you can work off your payment. If you choose not to do that, then your family/Godor will pay, but not associate with you anymore and everybody else will know of your reputation. You will be voluntarily banned from that portion of society. Because that is a risk which most people aren't willing to accept, there is a motivation to play by the rules. Godor were not forced onto people. People could've lived without them, but many people chose to pledge to them or to sell their retribution rights to them (which is profitable for the Godor.) 

Now let's look at a modern setting. There is no reason why private companies can't sell protection just as the Godor had. If you can't pay, then they'll buy the protection rights off you, and seek the rewards. This is generally called dispute-resolution. You make the claim that a society needs a centralized system when the population grows, but can you support this with evidence or deductive logic? 

http://en.wikipedia.org/wiki/State_(polity)

The most commonly used definition is Max Weber's,which describes the state as a compulsory political organization with a centralized government that maintains a monopoly of the legitimate use of force within a certain territory.

Ethics is used to justify decisions. So the key word is indeed "justification", which theory of ethics enables one to create a state? For example, one can argue on a utilitarian basis that the existence of the state benefits more people than there would otherwise be without a state. That is an normative claim, yes, but still falls within normative ethics, and if we speak of a specific situation it would fall within Applied ethics.