Does the ObamaCare individual mandate make contracts unenforceable?

I must admit that until I heard this argument from the Institute for Justice, I never considered the implications of ObamaCare requiring individuals to sign contracts for insurance coverage.  In any other context, signing a contract under threat of force constitutes duress, which negates the contract under centuries-old legal standards.  What happens when government applies the threat of force, through fines and presumably an eventual jail sentence for non-compliance?  IJ has filed an amicus brief to the Supreme Court asking this very question, and constitutional law professor Elizabeth Price Foley explains that the individual mandate violates the principle of mutual assent:

Constitutional law professor Elizabeth Price Foley, who is the executive director of the Institute’s Florida Chapter and who co-authored IJ’s brief, said, “The individual mandate violates a cardinal rule of contract law—to be enforceable, all agreements must be voluntary. The Framers understood this, and would never have given the federal government the power to force individuals into lifelong contracts of insurance. The Court should not allow the government to exercise this unprecedented and dangerous power.”

As IJ’s brief shows, the principle of mutual assent, under which both parties must consent for a contract to be valid, is a fundamental principle of contract law that was well understood during the Founding era and is still a cornerstone of contract law today. Indeed, contracts entered under duress have long been held to be invalid. Yet the mandate forces individuals to enter into contracts of insurance that would never be valid under this longstanding principle. (For a copy of IJ’s brief, visit:

If the U.S. Supreme Court fails to strike down the individual mandate, there will be nothing to stop Congress from forcing people into other contracts against their will—employment contracts or union membership, for example. If we still have a constitutional republic in which the federal government’s powers are limited, then the Court should strike down this law.

The Institute for Justice’s brief is the only amicus brief filed with the Court that examines this case in the context of the history of contract law. The brief illustrates how the Supreme Court has recognized the principle of consent in commercial relations in its Commerce Clause and Tenth Amendment cases, and it explains why the U.S. Supreme Court has a key role in acting as a check against this unconstitutional power grab by the federal government.

Bart Hinkle at the Richmond Times-Dispatch extends the background on the amicus claim:

From Hugo Grotius in the 17th century through William Story in the 19th and up to the present, legal doctrine has held that contracts are not valid unless they are entered into by mutual assent. If one party signs a contract as the result of fraud or under duress, it cannot be valid. But if Congress compels people to buy insurance policies — not as a precondition of exercising a privilege such as driving, but as a consequence of having been born — then, the institute argues, this would undermine centuries of contract law.

Supporters of the Affordable Care Act are apt to say overturning it would amount to judicial activism — that the judiciary ought to defer to the political branches. But the institute’s Clark Neily and Dick Carpenter show in their September study, “Government Unchecked,” that the courts have been, if anything, too deferential. They find that during the past half-century the Supreme Court has struck down only 103 out of the 15,817 laws passed by Congress, and less than one-twentieth of 1 percent of the more than 1 million state laws passed during the same period. In any given year, the Supremes will strike down only three out of every 5,000 laws enacted around the country.

Foley’s point in the video is well taken.  If the individual mandate passes muster because duress does not apply when the federal government applies it, then the courts will have given carte blanche to tyranny.  Where does that power end?  Buying cars certainly implicates interstate commerce; will the government have the power to force us to sign purchase contracts for Chevy Volts?  What would be the difference between that and health insurance?  Thanks to the bailouts, the government has an enduring stake in GM, and at some point in time every person needs transportation, even if they are perfectly satisfied with riding a bike or hailing a cab now.

Here’s an even more interesting question.  If coercion negates these contracts, as it should, then the insurance company won’t be under any obligation to pay for your health care, either.  After all, ObamaCare forces them to accept all applicants now, regardless of pre-existing conditions, so they too are under duress.  Americans might be buying a lot of vaporware in 2014 if a later court decides to stay on the side of centuries of precedent.

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