What is the scope of the freedom of contract clause of the US Constitution?
The freedom of contract clause of the US Constitution is found in the due process clause of the 14th Amendment. It protects individuals from governmental interference in their economic decisions and activities, allowing individuals the freedom to enter into binding contracts with other parties of their choice. In New Mexico, the scope of the freedom of contract clause is limited by both federal and state laws. For example, government regulations set the age at which an individual can legally enter into a contract, and such contracts may be declared void or unenforceable if done in violation of the law or against public policy. The scope of the freedom of contract clause also requires that both parties in a contract have the capacity to legally enter into it, so that a minor or someone not of sound mind may not be legally bound by a contract they entered into. The freedom of contract clause also covers the formation of partnerships, corporations, and other private organizations, allowing individuals to conduct business within the boundaries of the law and without governmental interference. Finally, the freedom of contract clause requires that contracts be enforced according to their terms. This means that parties to a contract must fulfill any obligations they have agreed to, and that a breach of contract by one party will give the other party the right to seek damages in a court of law.
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