Erik Encarnacion’s Section 1981 as Contract Law presents a striking claim: 42 U.S.C. § 1981, a statute primarily understood as a piece of federal antidiscrimination law, is, in fact, a foundational component of contract law in the United States. Section 1981, originally part of the Civil Rights Act of 1866 and later amended in 1991, prohibits racial discrimination in the making, performance, modification, termination, and enforcement of contracts. Encarnacion argues that this provision does not merely sit adjacent to contract law as a regulatory constraint; rather, it is an intrinsic part of contract law itself. This conceptual reframing has significant implications for legal theory, doctrinal teaching, and the broader understanding of how contract law operates on the ground, and I recommend the paper to you.
Encarnacion’s thesis rests on two primary claims. First, he makes a conceptual argument that Section 1981 should be recognized as part of contract law because it directly governs the formation, enforcement, and modification of contracts. He traces its origins to the Civil Rights Act of 1866, which sought to dismantle the Black Codes—state laws that restricted the contractual and economic freedoms of newly freed Black Americans. These laws imposed additional formal requirements on Black contract formation, often nullifying their economic agency. The 1866 Act, therefore, was as much a reconstitution of contract law as it was a civil rights measure.
The second argument is normative: recognizing Section 1981 as part of contract law aligns with a certain vision of contract law’s fundamental values, including economic freedom, autonomy, and fairness. Encarnacion contends that the principle of good faith and fair dealing, a debated staple of contract doctrine, implicitly supports a non-discriminatory marketplace. If contract law seeks to ensure fair and efficient transactions, then racial discrimination—which distorts bargaining power and restricts market participation—is contractually unreasonable. Thus, treating Section 1981 as a mere external constraint on contract law rather than an integral part of it misconstrues the relationship between contract law and racial justice.
Encarnacion’s reconceptualization carries significant theoretical consequences. If “contract law” includes Section 1981, then contract law theorists should work harder to make their accounts fit in the country’s history of racial discrimination. This recognition challenges prevailing formalist approaches, which treat contract law as neutral and race-blind. However, it also supports the work of recent writers who seek to surface the story of race in private law and provides a way to make the story of private law more congruent with that of the civil rights movement.
On a practical level, Encarnacion highlights the omission of Section 1981 from major contract law casebooks, the Restatements of Contracts, and leading treatises. (By way of full disclosure, his account mentions my casebook, which now includes a 1981 case in the consideration section but does not otherwise center the statute in the book.) This exclusion, he argues, is a mistake. Law professors teaching contracts should integrate Section 1981 into their syllabi, both to accurately represent the law and to provide students with a fuller understanding of contract law’s social and economic impact. Additionally, judicial applications of doctrines like good faith and fair dealing should be informed by Section 1981, ensuring that contractual relationships operate free of racial discrimination.
Encarnacion’s article arrives at a time when legal scholars are reexamining the intersections of private law and civil rights. Contract law has long been regarded as a residual domain of private ordering, free to largely ignore discrimination since it’s taken care of by statutory law. Encarnacion disrupts this view by trying to fit the statute back into the doctrinal course. One of the major conceptual challenges facing contract teachers and scholars today is this boundary: what counts as “contract” and what as other – the blurred lines between our subject and consumer law, employment law, antitrust law, and privacy law, for instance, are constantly challenging. Encarnacion suggests in some ways the choice is false as doctrine itself is influenced by 1981, both directly and indirectly. It would be a mistake to think of “contract” as unconnected to those developments.
Encarnacion thus ultimately calls for a fundamental shift in how contract law is taught, theorized, and applied. He argues that legal scholarship should acknowledge that racial discrimination is not merely an external wrong that contract law sometimes intersects with—it is a problem that contract law itself has historically addressed and which it continues to engage with. As such, Section 1981 as Contract Law challenges deeply entrenched assumptions about the boundaries of contract law and civil rights law. This article is an essential read for anyone interested in the intersection of contract law and racial justice, which should be all of us.
