Protection of Contractual Rights: A Tale of Two Constitutional Provisions

Abstract

This essay contrasts two constitutional provisions that were employed during the nineteenth and early twentieth centuries to protect contractual obligations from legislative interference. It explores why the contract clause, once among the most important provisions of the Constitution, gradually eroded in the late nineteenth century and was eclipsed by the liberty of contract doctrine under the due process clause of the Fourteenth Amendment. The essay suggests that a possible explanation may be found in the growing commitment to economic liberty which stressed freedom to enter contracts and was concerned about the extent to which the public law branch of the contract clause shielded business enterprise from competition. It further points out that courts gave only modest protection to contracts under either the contract clause or the liberty of contract doctrine.

Keywords: Lochner, liberty of contract, due process, contract clause, Fourteenth Amendment