Early Icelandic jurisdiction had very few methods of punishment for its criminals. Not only were there no prisons, but there was also no person with the power to do something like inflict the death penalty. The main options of punishment were either fines or outlawry.
Outlawry was the exclusion of the criminal from society and the protection of its laws. Other people were also forbidden to help the outlaws in any way. There were two kinds of outlawry; ‘lesser outlawry’ which lasted for three years, and ‘full outlawry’, which continued until the outlaw had killed three other outlaws, which does not seem likely. Full outlawry essentially meant banishment from Iceland altogether, or death for the outlaw, seeing as they were not only struggling to survive alone, but also usually being hunted down for revenge in most cases.
It was actually fairly common for an outlaw to still be helped by their family and friends, seeing as it was not easy to prevent them from doing so. Other than family and friends, it was often one of the local chieftains (goðar) who would protect them in return for them essentially becoming a slave, or being used to kill off their enemies.
The type of life an outlaw would have led attracted the attention of later saga writers. Sagas such as Grettis Saga and Gisla Saga, unlike other sagas, focussed on one character, and in this case they were outlaws. They portrayed the outlaw protagonists as somewhat heroic, but also not entirely likeable. However eventually the reader is encouraged to sympathise with them. In these sagas, the majority of the narrative is about the hero’s life as an outlaw, giving us some insight into how their lives could have been. However, it is important to bear in mind that these Sagas have the tendency to exaggerate some dramatic and tragic aspects of outlawry. For example, the fact that an outlaw is highly likely to die sooner rather than later, leads these stories to make this a focus point, and there seems to be a requirement for there to be an avenging party hunting the hero to kill them, creating a dramatic build-up of action and tension. This type of situation may have only really occurred in extreme cases, because an outlaw would probably be more likely to die from causes related to their isolation, rather than killed for revenge, especially considering that they may have been impossible to catch in many cases, if they had travelled far enough, or even to another country.
The overall point that should be taken from looking at outlaws in the sagas, is that, although they may give us insight into how the life of an outlaw could have been, it might not give us a complete picture. It would not have made for a particularly interesting story if the protagonist was a completely unlikable criminal, who perhaps murdered and raped people, was made an outlaw and struggled to survive before freezing or starving to death alone. This would probably have happened to many outlaws, but this does not make the sagas entirely unreliable. They can still be highly valuable sources for information, as long as you know to keep in mind, that they are primarily stories.