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Subject Area: Political Theory
Topic: Progress

Defending Freedom of Contract - Leonard P. Liggio, Literature of Liberty, Winter 1981, vol. 4, No. 4 [1981]

Edition used:

Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.

Part of: Literature of Liberty: A Review of Contemporary Liberal Thought, 20 vols. 19781-982

About Liberty Fund:

Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.


Defending Freedom of Contract

Eric Mack

  • Tulane University

“In Defense of ‘Unbridled’ Freedom of Contract.” The American Journal of Economics and Sociology 40(January 1981):1–14. [An earlier version of this paper was presented at a symposium on Freedom of Contract, sponsored by the Institute for Humane Studies and the University of Dallas, 1978]

The doctrine of freedom of contract holds that each person should have the liberty to enter into and the right to insist on the fulfillment of any rights-respecting contract. Professor Mack expands, clarifies, and defends this general doctrine and defines it as an implication of a Lockean emphasis on natural right.

This natural rights perspective requires the rejection of all collective social good theories (for example, utilitarianism) and the rejection of objections to freedom of contract which proceed from such theories. Mack considers four specific objections to freedom of contract. Each of these objections appears to flow from an “individualistic” emphasis on freedom and rights. Each of these, however, is dismissed either for misconceiving the nature of freedom or for involving an underlying appeal to some implausible social goal theory.

The author points out that the actual historical doctrine referred to as “freedom of contract” is rather timid and narrow in comparison to a more generally consistent and bolder philosophical understanding of free contract which would ban all coercive restrictions on free market relationships. The more modest historical version of freedom of contract probably reached its high-water mark as a constitutional doctrine in Coppage v. Kansas (1915). In that case the Supreme Court struck down a Kansas statute which forbade employers from requiring that their employees agree not to join labor unions as a condition of their employment. Throughout his paper, Prof. Mack draws on the opinions offered in Coppage v. Kansas for illustration of his arguments.

Mack argues that we can establish the existence of a negative obligation not to coerce others and also the correlative right against being coerced (this involves defining an appropriate theory of private property rights). Once we demonstrate this and further show that we cannot establish the existence of pre-contractual positive rights and obligations, we then have the full and sufficient basis of affirming the general philosophical doctrine of freedom of contract. This would then empower us to defend the much narrower historical claims of freedom of contract.