From your description, it sounds to me like you're handling this just fine. If the paladin agreed to the bargain, as you imply, he's obligated to keep it; or, at the very least, he needs a much better reason to break his word than, "I changed my mind, and I never really liked you anyway." If the paladin did not give his word, the situation changes.
The RAW back you up on this completely. You state, "The paladin has thus reneged on an agreement entered into willingly by all parties, but for what he perceives to be the greater good." This is definitionally chaotic: lawful characters "tell the truth, [and] keep their word," while chaotic ones "follow their consciences, ... [and] do what they promise if they feel like it." (PH 104) A paladin must "act with honor (not lying, not cheating ...)" (PH 44). Entering an agreement that he never meant to honor is lying. Breaking it when the other party has honored it (and, as you say, intended to stick at least to the letter of it) is cheating. Note that you have, even under the RAW, the option of letting him off with a warning: a paladin only loses his powers if he commits an evil act or "grossly" violates his code.
The real issue here, from what little you've said, doesn't look like it's about the RAW at all. We seem to have:
- One player who wants to be a gnomish Martin Luther King
- One who loses his powers if he breaks an oath
- One who attacks people with whom the others have made a deal, apparently in the belief that the party will back him up
You don't make clear whether this is a case of the gnome making a deal on behalf of the other players which they don't agree with, of the dwarf disrupting the other players' plans, or something else entirely. But you make it abundantly clear that the players have incompatible expectations for the game. If I were playing a peacemaker, I'd feel useless if the barbarian wrecked my negotiations by starting fights. If I were playing a fighter, I'd feel useless if the group spent hours negotiating and I never got to fight. I recommend that you try to solve the real problem.
Wolfwood2 said:
I'd really say it was the dwarf who reneged, not the paladin. You say the paladin "decided to help", but what were his alternatives?
Off the top of my head: use his Diplomacy to attempt to defuse the situation. Pull the barbarian out of there, but don't help him kill the kobolds. Urge the barbarian to retreat. Let the barbarian learn the lesson that, when he doesn't go along with the rest of the party, the rest of the party won't automatically go along with him.
Was he supposed to just leave his ally to fight a bunch of evil creatures alone? Was he supposed to just stand around and wave his hands while shouting, "Nothing to do with me! Kill the dwarf! The dwarf!" (Which is realistically what it would take for the kobolds to even consider not attacking him.) That option strikes me as cowardly and wrong.
False dichotomy. Toss the deliberately ridiculous line you put in his mouth, and replace it with something like, "Stop, my hot-headed friend! You break our truce unjustly!" There is nothing cowardly about refusing to fight for a dishonorable cause. And there is nothing whatsoever in his code about going along with his companions, right or wrong.
There's an old saying about two wrongs not making a right. The dwarf breaking the agreement was wrong (well, by the paladin's POV), but once the agreement is broken the paladin has to do the best he can with the situation at hand.
True, up to a point. But it is absurd to suggest that a paladin may break his word of honor with a clean conscience just because one of his allies has. The fact that the paladin remains bound to keep his word even if that becomes more painful than he expected is a reason for him not to give it lightly, not a reason for him to take it lightly.
