This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
The clause of the Constitution protecting the obligation of contracts from impairment does not apply to contracts made after the passage of the law affecting them.1 Other provisions of the Constitution, however, limit the power of the legislature over contracts thereafter made. The right to contract is secured by constitutional provisions protecting property2 and liberty.3 The legislature has nevertheless an undoubted and wide range of power in making future contracts illegal or void. Illustrations of specific statutes which are held valid have already been discussed in connection with illegal and void contracts. In the present chapter we will pass by those already discussed and consider other forms of statutes about which there has been a greater variance of judicial opinion.
The very nature of the power of the legislature to control and prohibit future contracts is in dispute. This power is at least as wide as the police power, and has been assumed to be the same thing.4 The difficulty of giving an exact legal definition of the police power has been noted frequently.5 With the exact nature of the police power in doubt, and with a further doubt as to whether the power of the legislature to prohibit future contracts is any wider than the police power, it follows that it is practically impossible to lay down in advance rules which will determine whether the legislature possesses this power in reference to specific types of contract. A discussion of the validity of specific statutes, to be next undertaken, will show a conflict of authority upon the questions of the validity of the particular types of statutes - a conflict which increases the difficulty of laying down abstract rules even beyond that arising from the nature of the subject.
1 See Sec. 1759, 1760.
2 In re Preston, 63 0. S. 428; 81 Am. St. Rep. 642; 59 N. E. 101; Palmer & Crawford v. Tingle, 55 0. S. 423; 45 N. E. 313. "The right to acquire and possess property necessarily includes the right to contract." Leep v. Ry., 58 Ark. 407, 415; 41 Am. St. Rep. 109; 23 L. R. A. 264; 25 S. W. 75; quoted in Dug-ger v. Ins. Co., 95 Tenn. 245, 252; 28 L. R. A. 796; 32 S. W. 5.
3 Allgeyer v. Louisiana, 165 U. S. 578; Leep v. Ry., 58 Ark. 407; 41 Am. St. Rep. 109; 23 L. R. A. 264; 25 S. W. 75; Gillespie v. People, 188 111. 176; 80 Am. St. Hep. 176; 52 L. R. A. 283; 58 N. E. 1007; State v. Loomis, 115 Mo. 307; 21 L. R. A. 789; 22 S. W. 350.
4 State v. Dalton, 22 R. I. 77; 84 Am. St. Rep. 818; 48 L. R. A. 775; 46 Atl. 234.