For literally hundreds of years, Anglo-American law has recognized that, to be legally binding, contracts must be based on the voluntary, mutual assent of the parties. In a “friend of the court” brief submitted to the U.S. Supreme Court in the constitutional challenge to the health care reform law, the Institute for Justice asserts that the law’s individual mandate—a provision that forces individuals to buy health insurance or face a hefty penalty—violates this fundamental principle of voluntary, mutual assent.
The individual mandate marks the first time in more than 220 years of the Constitution’s existence that the federal government has asserted the power to eviscerate the principle of voluntary, mutual assent. In so doing, it creates a law from which citizens cannot escape: We must purchase a qualifying health insurance policy, or face punishment. There is no choice for individuals to make—and thus no ability to avoid the mandate.
The federal government defends the individual mandate by asserting that it is an appropriate exercise of Congress’ power to “regulate commerce” under Article I, section 8 of the Constitution. It further contends that the mandate is constitutional under the Necessary and Proper Clause, which gives Congress the power to “make all Laws which shall be necessary and proper for carrying into Execution” Congress’ enumerated powers, including the power to regulate commerce.
IJ’s brief asserts that the power to regulate commerce should not be construed so broadly as to include the power to compel contractual relations among the unwilling. It points out to the Court that, for hundreds of years prior to the ratification of the Constitution (and continuing to today), the principle of voluntary, mutual assent was understood to be a necessary prerequisite to a legally binding contract. Indeed, the doctrine of mutual assent was so fundamental to contract law that virtually every major contract doctrine at the time of the Founding—such as incapacity, mistake, fraud, undue influence and, most notably, duress—was grounded in the principle that contracts not freely assented to were not binding. The Founding generation that drafted and ratified the Constitution would never have given to Congress, and in fact did not give, under the guise of the Commerce Clause, the power to force individuals to enter contracts and thereby gut the foundation upon which the entirety of contract law rests.
Equally important, IJ’s brief illustrates that granting Congress the power to eviscerate the doctrine of mutual assent cannot be a “proper” exercise of power under the Necessary and Proper Clause. Giving Congress the breathtaking power to compel contractual arrangements, under the pretext of reforming or saving the health insurance market from collapse, would endorse using the Necessary and Proper Clause as a means to expand government authority beyond those powers enumerated in the Constitution—something the Supreme Court has long condemned.
From the perspective of individual liberty, a power to compel contractual relations would have no logical stopping point. Presumably, it would include the power to compel any other sort of contractual relation, including contracts to buy or sell other goods or services, enter into lifelong union or employment relationships, or finance one’s housing in a certain manner. This massive new federal power would soon overtake the entirety of the states’ and people’s residual powers under the Tenth Amendment, creating the very Leviathan government the Founders spilled their blood to resist. As the U.S. Supreme Court unanimously recognized last summer in Bond v. United States, the purpose of the Constitution’s scheme of enumerated powers and federalism is to protect individual liberty. The principle of consent—whether in the context of contract law, property rights, First Amendment, school choice or economic liberty—is critical to individual liberty. And IJ’s amicus brief in the health care reform case is the only brief—among more than 60 briefs—that defends this essential principle.
Elizabeth Price Foley is executive director of the IJ Florida Chapter.