Freedom of Contract
FREEDOM OF CONTRACT
Freedom of contract in the United States means that the law accepts and protects broad scope for private individuals and business firms to decide the uses of economic resources in seeking profits. Through the country's history, sharp controversies have centered on exercise of freedom of contract as it has affected concerns for the worth of individuals, the vitality of private markets, the natural and social environment, and the structure of practical as well as formal legal power in the society. Few other concepts touch as many dimensions of the history of American public policy and constitutional law.
The law's attention to freedom of contract has centered on fostering and sustaining the private market as a major institution of social control (ranking in importance with the law itself). Even the assessment of the interactions of freedom of contract and other values, not defined in market, has typically resulted from community reactions to the effects of market operations. Thus, to examine the place of freedom of contract in constitutional law entails examining the roles and working character of the market.
Law and public policy have historically responded to four salient characteristics of private contract activity in market, carrying both constructive and damaging aspects. These responses have provided the institutional setting within which the substantive legalconstitutional meaning of freedom of contract has emerged.
(1) Under the protection of the law of contract, private contract activity seeking profit in market energizes private will in producing and distributing goods and services. This activity promises efficiency in allocating limited resources, partly because the actors are motivated to obtain the most output for the least input, and partly because market bargaining allows flexibility in coordinating a great volume and diversity of private decisions. In the country's constitutional tradition, social and political values also favor freedom of contract. Proponents argue that individuals gain self-respect from the initiatives of will they exercise in markets, as well as courage to participate in and criticize government because their means of livelihood are not dependent on official favor. The law reflects this appraisal of positive values by presuming the legality of private contracts until a challenger demonstrates their unlawfulness, and by casting some constitutional protections around private contract activity and the property interests it produces. (See contract clause; substantive due process; taking of property; economic regulation and the constitution.) But the driving dynamic of private contract activity is the focused self-interest of the bargainers. We value this dynamic because it counters the inertia prevalent in social relationships, but it largely ignores the impact of bargains on people other than the bargainers. A factory producing to meet its contractual obligations may deposit in a handy stream industrial wastes harmful to the public's interest in pure drinking water or recreational opportunities. The law responds to this narrow focus of the market with environmental regulations, the constitutionality of which may or may not be challenged.
(2) Large-scale markets cannot operate by barter but require use of money (including money-measured credit). Law responds to this need by regulating the money supply. But the money calculus required by extended contract activity carries dangers of a bias in identifying and weighing matters of public interest. Public opinion, public policy-makers (including judges), and market-oriented pressure groups seeking to influence legislators and other public officers tend to identify interests deserving law's promotion or protection only with interests readily calculable in dollar terms. Thus, nineteenth-century common law readily gave judgment for money damages if a factory failed to deliver promised goods to a buyer but was grudging in recognizing a community right to redress for more diffuse detriments—hard to measure in dollars—caused by the factory's deposit of industrial waste in a nearby stream. Today's public policy, with the blessings of today's constitutional law, increasingly seeks to offset the bias injected by a monetized calculus of interests by legislating to protect diffuse values and establishing administrative agencies to implement them.
(3) Whether tailored to particular transactions or standardized as in such commercial instruments as promissory notes or warehouse receipts, private contracts can be multiplied to any number of dealings and varied to shifting conditions of supply and demand. Contracts and the market thus permit flexible adaptation to changes in the conditions of the economy and the parties. Public policy recognizes the value of this adaptability in the law's readiness to enforce such terms of dealing as the parties choose and in legalconstitutional doctrine protecting the play of market competition. However, when change proceeds in this manner, its increments are so small that even the parties, let alone the environing society, may not be aware that the accumulation of relatively limited incremental shifts is producing basic alterations in the social context which no one has predicted, assessed, or chosen to bring about.
(4) Private contracting parties and the markets in which they operate typically work within the distribution of wealth and income in society as they find it. Contract and property law reinforce this distribution; only in rare hard cases will courts set aside a bargain as unconscionable, and normally they will not examine the adequacy of the consideration a party accepted in return for what he promised to perform. But underlying the social utility of freedom of contract and the resource-allocations role of markets lies an assumption: that private bargainers enjoy a considerable range of practical and legal options in dealing with each other. Great inequalities of wealth may grossly distort some bargaining relations, so that freedom of contract becomes illusory and markets sharply accentuate inequalities of bargaining power. While constitutional law only rarely addresses such inequalities (see indigents; wealth distribution), it consistently validates legislation to this end. (See substantive Due Process; economic regulation; commerce clause.) Sometimes lawmakers seek to encourage private organization of countervailing power, as in the law regarding collective bargaining between management and labor. Sometimes they interpose between focused centers of private market power and diffused bodies of customers a public bargaining agency, as in the law of public utilities. Such legal interventions and their constitutional underpinnings depart from an abstract model of freedom of contract in order to promote more real freedom of bargaining.
The span from the 1880s through the 1920s witnessed increased resort to state and national law to correct imperfections of private contract activity in market. In this period opponents of government intervention made "freedom of contract" a code phrase for imposing constitutional and other limits on legal regulation. This emphasis has been so prominent in past policy debate that there is danger of equating the idea of freedom of contract with limitations on the use of law. In fact, law operates at least as much to promote market activity as to regulate it. A realistic assessment of the relation of constitutional law to freedom of contract must recognize the range of such promotional roles of legal processes.
By the late eighteenth century, in this country of abundant land, the law of land titles made land fully transferable and thus readily marketable—thus promoting private contract activity. By the mid-nineteenth century, common law had established a strong presumption in favor of the legality of private agreements for market dealing. By the second half of the nineteenth century, state legislatures were actively removing the common law disability of married women to make binding contracts. The married women's property acts may have responded more to the wish of the husband's creditors to acquire effective pledge of the wife's assets to secure her husband's debts than to any concern for sex equality. Still, these statutes enlarged the potential scope for contract activity in market.
Legal development, often supported by constitutional law, has consistently fostered entrepreneurial energy. Contract law legitimized and standardized a growing range of trade documents and instruments for capital investment. In three respects law especially promoted increased reach and pervasive effect of private contract activity. Though often inefficiently, law provided a money supply to facilitate increased volumes of trade. Particularly under the commerce clause of the national Constitution, Congress and the Supreme Court protected markets of sectional or national scope against intrusion of state parochial interest. (See state regulation of commerce; state taxation of commerce.) With increasing liberality lawmakers made the device of incorporation available for the general run of business, providing means for mustering and directing otherwise scattered assets. (See corporations and the constitution.)
Many individuals had only their labor to offer in market, and only their wages to spend. For them law gave other positive promotion to freedom of contract. In the nineteenth century, statutes created mechanics' liens, exempted workers' tools from creditors' execution, and abolished imprisonment for debt. In the twentieth century, legislation created administrative agencies to implement laws designed to help consumers get money's worth for their purchases. The most dramatic expansion of freedom of contract for labor was the abolition of slavery. Fulfillment of the substance of that policy through the thirteenth amendment and the supplementary provisions of the fourteenth amendment and the civil rights act of 1866 had a long and tortured history, but the general line of policy was clear. In the 1960s, civil rights legislation gave that policy additional impetus, placing the affirmative support of law behind opening markets for labor, goods, and services free of barriers raised on grounds of race, sex, or religion. (See federal protection of civil rights; employment discrimination.)
Granted that law plays positive, promotional roles in fostering markets, freedom of contract also insists that law protect a substantial area of autonomy for private contract and market activity, to allow operative room for the efficiency criteria which legitimize private contract and market functions. Threats of invasion of this zone come from both private and official power. Accordingly the autonomy that public policy provides for private contract and private markets has two dimensions, relating to private and to official action.
The law protects market autonomy against private interference not only by enforcing contractual obligations through damages or other relief against breach of contract but also by providing sanctions against interference by outsiders with the performance of those obligations. Furthermore, an elaborate body of statutory, judge-made, and administrative law offers criminal and civil sanctions against efforts to defeat market bargaining by achieving monopoly, or by fixing prices or other terms of trade, or by engaging in such predatory forms of competition as geographical price discriminations so as to limit or destroy competition. (See antitrust and the constitution.)
More controversy has surrounded the creation of legalconstitutional protections of limited autonomy for private contract activity in market as against interventions by government. Experience shows two quite different sources of concern. Some battles over legal regulation are fought on claims that one set of private interests seeks to handicap another by persuading a legislature to create barriers to free competition as when producers of dairy products obtained laws regulating the sale of oleomargarine. Other battles are fought on claims that in pursuing nonmarket objectives, such as protecting public health, lawmakers impose unreasonable costs on market-measured profitseeking—as when environmental regulations are opposed on the ground that they hamper "productivity" (meaning that they limit money-measured gains of regulated firms). Common to both types of concern is the objection that law is used in ways that interfere with economic efficiency defined according to the profit and loss calculus of the immediate bargainers in a competitive private market. "Efficiency" in this sense and freedom of contract are the same thing.
Common law imposes some limits on freedom of bargainers to set terms for which they may invoke the law's support and sets the standards for determining what constitutes an enforceable contract. Generally, however, the courts presume that private bargains are valid. The principal legal battlegrounds for defending freedom of contract against official invasion lie in constitutional law. Both national and state constitutions limit legislative restrictions on the freedom of private contract.
The national and state constitutions forbid government to take private property for public use without just compensation. These guarantees primarily protect property titles rather than contracts not yet performed. However, they help safeguard private contract activity; contracts that call for performance over time are likely to require commitments of assets which bargainers will not make if they do not consider the commitments secure against government appropriation. Some uncertainty attends the definition of what public action amounts to a "taking." However, these guarantees do not require government to pay all costs incurred by those subjected to laws regulating economic affairs. Particularly, when government intervenes in a situation where some detriment will in fact occur to either of two competing private interests whether government acts or not, there is no "taking" requiring compensation when the law determines which interest must bear the burden. (See taking of property.)
The national Constitution forbids any state to make a law that impairs the obligation of contracts. This clause limits only retroactive state legislation; it does not affect state laws that operate only on future events. No comparable clause limits the Congress, and the Supreme Court applies a presumption of constitutionality to federal statutes of retroactive impact. (See retroactivity of legislation.) The contract clause has not figured in so much litigation as the constitutional guarantees of due process and equal protection of the laws. Where litigants invoke the clause, however, judges generally give it firm application in the types of situation that most directly challenge respect for outstanding private agreements in market—that is, where a retroactive state statute undertakes to readjust the terms of a contract or its legal context in order to give one party what the legislature in hindsight sees as a socially more acceptable exchange. The usual case of this kind has arisen when a legislature intervenes to relieve distressed debtors of the full measure of claims or remedies afforded their creditors. Moreover, the Supreme Court requires a state to enforce a contract between the state itself and a private party when the retroactive change has given the state an economic advantage not conferred by the original terms. On the other hand, the Supreme Court treats the contract clause more flexibly when the prime object of the challenged legislation appears to be not to alter terms of dealing between the bargaining parties but to protect public interests in a healthy social context without which private contracts have no meaning. Care for social context may include care for preserving the market itself. Thus the Supreme Court upheld a state statute that imposed a limited moratorium on foreclosing mortgages contracted before the statute was passed, where the Court was persuaded that the legislature reasonably believed the moratorium necessary not mainly to benefit mortgagors but to save the general economy from destruction by averting distress sales of land that would undermine the financial integrity of the banking and insurance systems of the state. (See home building and loan association v. blaisdell.) The Court has taken a like approach where the challenged legislation seeks to safeguard other than market interests; thus it has sustained against contract clause challenges retroactive legislation that, in the interest of public morals, abrogated an earlier statutory charter for a lottery and that, to protect public health, abrogated an earlier statutory charter for a slaughterhouse.
Another relatively specific constitutional limit on state legislation affecting freedom of contract developed under the commerce clause of the national Constitution. The core purpose of granting Congress authority to regulate interstate commerce was to use national law to protect from parochial state legislation contract activity that ranged over state lines into markets of interstate scope. Congress has used this authority notably to provide uniform national regulation of the terms on which private business provides interstate transportation and communication services. Most often, however, the commerce clause has operated to limit state interference with interstate contract activity through the United States Supreme Court. In the Court's construction, the commerce clause of its own force authorizes judges to rule invalid state legislation that discriminates against or unduly burdens interstate transactions. The Court most strictly limits state laws that in their terms or by their practical effect lay legal or economic burdens on dealings in an interstate market that they do not impose on intrastate transactions. Here the Court puts on the supporter of a challenged state statute a heavy burden of persuading the Court that some overriding local public interest warrants legislation that thus singles out interstate dealing for special regulation. But if a nondiscriminatory state statute affects interstate transactions for a nonmarket purpose, such as protecting public safety on the highways, it enjoys the benefit of a presumption of constitutionality, so that the challenger must persuade the Court that local interests are insufficient to warrant the regulation.
Constitutional guarantees of due process and equal protection are the protections most often invoked on behalf of substantial autonomy of private contract activity in market, as against government intervention. At the threshold of any examination of this body of constitutional law stands an issue of institutional legitimacy. Anglo-American political tradition includes high regard for public policy that favors initiatives of private will in the economy. john locke gave this tradition classic expression in seventeenth-century England, asserting that the individual normally needs no official license before he may make productive use of natural resources. Locke recognized that legislation might properly care for "commonwealth" interests, and particularly that the elected legislature might exercise the power to tax for public purposes. But the legislative authority, he said, was held in "trust," permitting the legislature to act only for the public interest (foreshadowing the Supreme Court's later standard of substantive due process) and by equal laws. Of course, this English inheritance did not provide authority for judges to hold invalid legislation that infringed standards of public interest and equal protection. When judges in the United States asserted that authority—with some limited warrant in the history of adoption of the national Constitution—it was another, long step for them to conclude that the guarantee of due process of law included judicial protection of some extent of private contract autonomy. In its origins, "due process of law" meant assurance of fair procedures for applying law, not authority of courts to set limits on the substantive content of the policy legislatures might adopt. And the core historic meaning of the equal protection standard referred to application of law rather than to its substantive classifications. However, by the mid-twentieth century, some seventy-five years of Supreme Court practice had outweighed historic doubts; the live issue in the twentieth century is, rather, how the Court will use the authority it has staked out for itself. The fact that judges were able to extend their power of review beyond historic foundations attests to the strength of values which conservative opinion in the past has put on freedom of contract in market. On the other hand, the doubt which history has cast on the political legitimacy of the expanded judicial role correspondingly helps account for the limits set by the Court since the 1930s on its exercise of judicial review of economic regulations challenged as violations of due process and equal protection.
Early in the development of the doctrine of substantive due process, in Powell v. Pennsylvania (1888), the Court set sharp limits on the scope of judicial review. There a state had banned the sale of oleomargarine, for the declared goals of protecting public health and preventing fraud on consumers. The Court ruled that it would uphold the statute unless the challenger showed beyond a reasonable doubt that the legislature could not reasonably find that the act was an appropriate means to serve some public interest. Nonetheless, in some cases judges, especially state courts interpreting state constitutions, will enforce respect for some degree of autonomy of private contract activity in market. In some cases parties have successfully rebutted the strong presumption of constitutionality by showing that one set of business interests has won the law's favor simply in order to obtain a legal advantage against other socially useful competitors. Such resort to law violates the social justification of legally protected freedom of contract: the promotion of efficient allocation of limited resources through market competition. Thus, in a later case, where the challenger demonstrated that an anti-oleomargarine statute had no reasonable basis in protecting health or preventing fraud, the Wisconsin court held, in John F. Jelke Co. v. Emery (1927), that the act violated constitutional standards of due process and equal protection.
In counterpoint with the pattern of judicial self-restraint indicated by Powell v. Pennsylvania, over the span from about 1890 into the mid-1930s the Supreme Court developed three other interrelated doctrinal lines which promoted aggressive judicial protection of private contract autonomy.
First, the Court identified freedom of private contract as a key component of the "liberty" protected by the due process and equal protection clauses. The founding decision was allgeyer v. louisiana (1897). There the Court held unconstitutional a Louisiana statute forbidding performance of a contract to insure property in the state with a company not licensed to do business there. The Court ruled that in denying the parties the liberty to make the contract the statute violated limits that the due process clause put on the substantive policies which the legislature might enact into law.
Second, in the standard of substantive due process the Court found warrant for a judicial veto over legislative goals. Judicial scrutiny of these goals had two aspects. One concerned the relationship between private contract and the social context in which the contracting went on. Even in decisions most restrictive of legislative power, the Supreme Court did not deny that legislation might properly pay some regard to the impact of private contract activity on the lives and concerns of individuals or groups other than the contracting parties. However, the Court often spoke of legislative authority as the sum of a limited, closed number of categories of goals traditionally recognized as serving public interest, notably protection of health, safety, or morals. (See state police power; national police power). The indication was that a statute would violate substantive due process if its objective did not fit handily under one of these familiar designations. Conspicuous in this approach were Adair v. United States (1908), coppage v. kansas (1915), and wolff packing company v. court of industrial relations (1923). These rulings refused to recognize promotion of peace in management-labor relations as a sufficient public-interest goal to sustain statutes that outlawed employment contracts binding employees not to join a union or providing for compulsory arbitration of labor disputes.
The third aspect of heightened judicial scrutiny of statutory goals was more specific. Substantive due process demanded that legislation serve what the Court regarded as the general welfare. A statute might appear to serve one of the judicially approved public-interest goals, such as protection of health. But also, it might have the purpose or likely effect of bringing about a different distribution of gains and costs among private bargainers than might result if bargainers operated simply within the frame of common law contract and property law. Between about 1890 and the mid-1930s many decisions treated the presence of a purpose or effect to alter the distribution of gains and costs among private bargainers as enough to show that a challenged statute did not meet the due process standard of serving the public interest; the redistributive character of such a statute made it "class legislation" or an effort, forbidden by constitutional law, to "take property from A and give it to B." Judges would accept statutes that protected groups commonly recognized as subject to exceptional hazards or weaknesses in bargaining power. Thus, in holden v. hardy (1898), the Supreme Court upheld a statutory limit on working hours of men mining coal underground, emphasizing the well-known special hazards of the occupation and the accepted fact that in practice the employers fixed the terms of the employment contracts. So, too, in muller v. oregon (1908), the Court sustained a working hours limit for women, to protect a class which the judges saw as peculiarly dependent. But where a statute apparently sought to offset the weak bargaining power of workers in situations not conventionally regarded as deserving law's special care, the fact that the statute would confer particular benefit on labor was taken as enough to show a lack of justifying public interest. Such was the Court's approach in lochner v. new york (1905), which held invalid a statutory limit on working hours of bakers. Of similar character was Court doctrine that confined statutory regulation of prices and services of private contractors to what judges regarded as businesses affected with a public interest—those conventionally deemed public utilities. On this basis, in tyson v. banton (1927) and in ribnik v. mcbride (1928), the Court held invalid statutes regulating resale prices of theater tickets and fees of employment agencies.
There was unreconciled tension between many of these decisions and the approach taken in Powell v. Pennsylvania. In Powell, the fact that the statutory ban on selling oleomargarine might serve both the private, competitive interest of sellers of butter and the public interest in health was held insufficient to invalidate the regulation. In Powell, the favored private interest was that of one set of businessmen, the sellers of butter. In Lochner and in Ribnik, the interest the statutes immediately protected was that of labor. So, also, in Adair, Coppage, and Wolff Packing, the interest of labor suffered when the challenged legislation was upset. The pattern suggested a definite bias of policy.
Between 1890 and the mid-1930s the Supreme Court also usually required a positive showing of a "real and substantial" relation between the legislature's goal and the means it provided to reach the goal. That the Court could conceive of other, less burdensome means of achieving the desired result was likely, as in Lochner v. New York, to be treated as a distinct and sufficient basis for invalidating the statute. The climax of both lines of doctrine—regarding challenges to the end or to the means adopted by the legislature—came in adkins v. children ' s hospital (1923), when the Supreme Court held unconstitutional legislation setting minimum wages for women workers. There a Court majority in effect repudiated the presumption of constitutionality by declaring that "Freedom of contract is … the general rule and restraint the exception; and the exercise of legislative authority to abridge it can be justified only by the existence of exceptional circumstances." As late as morehead v. new york ex rel. tipaldo (1936), a Court majority in effect reaffirmed the Adkins approach, but a new alignment of Justices repudiated that approach in west coast hotel v. parrish (1937).
The Court's readiness through some forty years after 1890 to upset legislation limiting freedom of contract had serious implications for the role of legislatures and the interests legislatures sought to advance or protect. But we should not exaggerate the impact of judicial review. One inventory counts 197 cases between 1899 and 1937 in which the Supreme Court invalidated state or federal regulations under the standard of substantive due process, but another estimate notes that between 1889 and 1918 the Court upheld some 369 challenged statutes enacted under the state police power. Other tallies emphasize the more vigorous use of the judicial veto in the later years of the forty-year span; one count finds fifty-three state police power acts held invalid between 1889 and 1918, while another shows almost 140 laws held unconstitutional between 1920 and 1930. All such inventories must be seen in a wider perspective; a great bulk of economic regulatory legislation never came under constitutional challenge in lawsuits.
However, in a sharp turnabout beginning in the mid-1930s, the Court disavowed these enlargements of judicial protection for autonomy of private contract in market. In nebbia v. new york (1934) it ruled that a legislature might regulate pricing practices outside the field of traditional public utilities if legislators could reasonably find that regulation would serve a public interest. In united states v. carolene products company (1938), it ruled that no particular sanctity attached to the "liberty" or "property" interests involved in private contract activity; all regulatory legislation affecting ordinary commercial transactions enjoyed the presumption of constitutionality. Nebbia also made clear that there is no closed category of public interests to which legislatures may extend protection; even if a statute intervenes in private contract activity for a purpose not within familiar concerns with public health, safety, or morals, it is valid unless the judges determine that no reasonable legislators could find justification for it. Finally, in west coast hotel company v. parrish (1937), the Court expressly overruled the formula declared in Adkins; that a statute limits freedom of contract does not cast on its supporter a burden of justifying it; rather, the general presumption of constitutionality applies.
The Court's permissive modern doctrine leaves the autonomy of private contract activity mostly in the hands of the legislature. Given the realities of the legislative process, in two respects this outcome implies a lessening of the preferred status of the private market. Statute law tends to speak more and more for interests of the general social context, as in regulation of burdens—such as air or water pollution—which private contract activity otherwise may place on parties outside the bargaining circle. Less appealing is the practical operation of the presumption of constitutionality to allow special interest lobbies to obtain legal favors, protected by plausible arguments of action taken for a presumed public interest. But this increased scope for lobby influence seems an inescapable cost of a proper division of functions between legislatures and courts in the area of economic regulation. In a more favorable light, the presumption of constitutionality as the Supreme Court defines it means that a statute is not invalid merely because in serving some public interest it may operate concurrently to provide special gain to some private interest. This result seems appropriate. Concurrence of public and private gain from legislation is so common in this society of diverse, interweaving interests that judges would substantially abrogate the legislative function if they held that such parallel effects alone made a statute unconstitutional.
Finally, we should recall that constitutional law is by no means the whole of what determines the realities of freedom of contract. In the second half of the twentieth century several factors other than direct legal regulation work to reduce, or at least realign, the operation of the freedom of contract. One element is the growth in relative economic importance of large-scale business corporations. In a big corporate organization many decisions that once would have been made by private bargains over supply of goods and services now occur through relations of hierarchy, as boards of directors instruct managers and managers plan and instruct subordinates. Thus, much resource allocation is done through internal discipline of firms, rather than by transactions in market. This internalizing of decisions has generated new concerns about the balance of power among affected interests. Such concerns have prompted new government regulation, as in the wagner (national labor relations) act, in legislation governing corporate finance and administered by the Securities and Exchange Commission, and in the regulation of work-place safety under state and federal laws.
Statutes and administrative regulations now standardize many areas of contract dealing, sometimes providing optional standard forms, sometimes requiring adherence to forms fixed by law. Thus, large areas which are still governed by contract, in the sense that parties enter into relationships only by exchange of consents, are nonetheless areas in which individuals and firms no longer bargain out the details of their transactions. Such is the case with most contracts of insurance, contract relations between corporate stockholders and their corporations, collective bargaining contracts for the supply of labor, and lending contracts.
From the 1930s on, national monetary and fiscal policy has greatly affected the practical scope of freedom of private contract. Government's roles in providing and regulating the money supply are not neutral ones; the qualities of public monetary policy affecting rates of deflation or inflation profoundly affect the extent to which people can control their affairs by private bargains. Similarly, as government enlarges the reach of its taxing and spending powers, it enlarges or restricts practical freedom of private contract. Government-induced transfer payments—payment of interest on public debt, or payments of Social Security allowances or of unemployment compensation—shift purchasing power among groups. Government spending on goods or services for its own needs removes some proportion of material or labor from the field of private contract in market. In the late twentieth century the cumulative effects of public monetary and fiscal programs spell substantial complication of the patterns of private contract activity and public resource allocation, in comparison with the patterns that existed from the late eighteenth century to the end of the nineteenth century. Freedom of contract in the United States continues to stand for important propositions concerning the structure and working procedures of society, but the content of the idea has undergone significant change from the vision of society held by John Locke or by the Justices of the Supreme Court who spoke for strict judicial review of economic regulations between the 1890s and the middle 1930s.
James Willard Hurst
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"Freedom of Contract." Encyclopedia of the American Constitution. . Encyclopedia.com. (July 16, 2019). https://www.encyclopedia.com/politics/encyclopedias-almanacs-transcripts-and-maps/freedom-contract
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