Freedom of contract is the freedom of individuals and groups (such as corporations) to form contracts without government restrictions. This is opposed to government restrictions such as minimum wage, competition law, or price fixing. The freedom to contract is the underpinning of laissez-faire economics and is a cornerstone of free-market libertarianism. Through freedom of contract, individuals entail a general freedom to choose with whom to contract, whether to contract or not, and on which terms to contract.
Freedom of contract in the United States
Lochner v. New York
Main article: Lochner v. New York
In 1902 a New York baker named Joseph Lochner was fined for violating a state law limiting the number of hours his employees could work. He sued the state on the grounds that he was denied his right to "due process". Lochner claimed that he had the right to freely contract with his employees and that the state had unfairly interfered with that right.
In 1905 the Supreme Court used the due process clause in the 14th Amendment to declare unconstitutional the New York state statute imposing a limit on hours of work. Justice Peckham wrote for the majority: "Under that provision no state shall deprive any person of life, liberty, or property without due process of law. The right to purchase or to sell labor is part of the liberty protected by this amendment..."
Writing in dissent, Oliver Wendell Holmes accused the majority of basing its decision on laissez-faire ideology. He believed that they were making law based on economics rather than interpreting the constitution. Neither did he believe that "Liberty of Contract" existed or was intended in the constitution.
In his "Liberty of Contract" (1909), Roscoe Pound critiqued freedom of contract laws by laying out case after case where labor rights were struck down by State and Federal Supreme Courts. Pound argued the courts' rulings were "simply wrong" from the standpoint of common law and "even from that of a sane individualism" (482). Pound further compared the situation of labor legislation in his time to common opinion of usury and that the two were "of the same type" (484). Pound lamented that the legacy of such "academic" and "artificial" judicial rulings for liberty of contract engendered a "lost respect for the courts", but predicted a "bright" future for labor legislation (486-87).[1]
The Supreme Court applied the liberty of contract doctrine sporadically over the next three decades, but generally upheld reformist legislation as being within the states' police power. In 1937 the Court reversed its view in the case West Coast Hotel Co. v. Parrish. In that case the court upheld a Washington state law setting a minimum wage.
Contrary to what we have been taught the Constitution is not the Supreme Law of the land once a person voluntarily enters into a contract. God created man and man created a fictitious entity known as government. Then government created fictitious entities known as corporations. God has authority over man, man has authority of government and government has authority over the corporations which it creates.
Corporations are not subject to the Constitution. (But they are subject to the government which authorized their creation). When a corporation is created by a government they enter into a contract which obligates the corporation to comply with all of the government's rules and regulations. They are governed by contract or Civil Law. When we enter into a contract with a corporation we become subject to the terms of the Contract not the Constitution.
The government of the United States, as a corporation is an artificial person that has the right to contract. If we enter into contracts with that corporation, we become subject to the terms of the contract and lose the protection of the Constitution and the Bill of Rights.
The Federal government only has lawful jurisdiction over those individuals who have entered into a voluntary contract to do business with the corporate United States. Any contact can be rescinded by either party to the contract if there has been a lack of disclosure or any evidence of fraud. There mus always be a remedy in the law.
Everyone that does business with the government has a dual personality. First they are individuals with blood, bones and God given rights and secondly they are an artificially created entity created to engage in commerce. This fictitious entity is a corporation. When you enter into a contract with the government, you become the agent representing that artificial person.
The government has no authority over the real you, but they do have authority over the corporation which bears your name.
Replies