I'm also a non-parent, thank god. But I would jump to the parents' side here (except the dumb blogging about it part...) because I've dealt with a lot of irresponsible kids. I think the lesson the kid will take from it is get a job as soon as physically possible (14 in the States, or earlier with hardship proof, I think) and escape the shackles he's been placed under. This makes sense to me, and I think it's a great way to parent. In her place, I probably wouldn't have written a contract; I would have discussed this with my kid and then trusted him to follow through. Getting his signature was a needlessly dramatic move.and if the kid has that understanding of the right to privacy, that's fine.
If he doesn't he'll learn it from this, yeah? Most kids learn about privacy most directly through internet and cell phone use these days, I think.