Erik Encarnacion

Section 1981 as Contract Law

A civil rights secret hides in plain sight: a federal antidiscrimination statute, 42 U.S.C. § 1981, expresses foundational rules of contract law in the United States. Originating in the Civil Rights Act of 1866 and amended by the Civil Rights Act of 1991, Section 1981 prohibits racially discriminatory formation, performance, modification, termination, and enforcement of contracts. The statute thus forbids parties from racially discriminating in nearly every phase of every contractual relationship.

Despite Section 1981’s evident concern for contracts, comprehensive summaries of contract law—including Restatements, treatises, and casebooks—usually ignore the statute. This omission might make sense if Section 1981 does not count as contract law, a tempting view given its status as federal antidiscrimination law. But this Article argues that, for conceptual and normative reasons, Section 1981 already counts as an important part of contract law and should be recognized as such. Apart from aspiring to guarantee equal citizenship regardless of race, the statute’s importance as contract law is hard to overstate given that it governs nearly every aspect of every contract—indeed, even every attempted contract—in the United States.

These claims have theoretical and practical implications. Contract law theories must respond to the possibility that antidiscrimination rules reinforce contract law’s most basic values rather than thwarting them. Practically, editors of treatises and other comprehensive doctrinal summaries should include some nontrivial discussion of Section 1981’s origins and contemporary applications. Applying doctrines like good faith and fair dealing may require assessing whether contracts are performed without racial discrimination. And law professors should consider revising their syllabi to include Section 1981 in their courses on contract law.

Contract law needs antidiscrimination law to realize its animating values, including economic freedom and basic transactional fairness. Rather than undermining the values embodied in contract law, sound antidiscrimination laws like Section 1981 are essential to facilitate and express them. The possibility that some antidiscrimination rules form part of contract law rather than merely constraining its operation from the outside should therefore come as no surprise.

Introduction

A civil rights secret hides in plain sight: a federal antidiscrimination statute, which has been on the books in one form or another since 1866, expresses foundational rules of contract law in the United States. This claim should be surprising. Contract law, after all, is traditionally understood to be indifferent to invidious discrimination,1 1.See Bowlin v. Lyon, 25 N.W. 766, 767–68 (Iowa 1885) (holding that a “colored man” who was denied entry into a skating rink solely because of his race was not entitled to admission given the rink’s discretion to contract with, or grant entry to, whomever it pleased); Noah D. Zatz, A Law and Political Economy Approach to Race, Gender, and Power in Contracts, in Integrating Doctrine and Diversity: Inclusion and Equity in the Law School Classroom 129, 133 (Nicole P. Dyszlewski, Raquel J. Gabriel, Suzanne Harrington-Steppen, Anna Russell & Genevieve B. Tung eds., 2021) (observing that “[i]n the classic common-law cases of refusal-to-contract, discrimination appears as purely private preference,” which courts treated on par with any other personal preference in the name of “evenhandedness”); Hila Keren, “We Insist! Freedom Now”: Does Contract Doctrine Have Anything Constitutional to Say?, 11 Mich. J. Race & L. 133, 142 (2005) [hereinafter Keren, We Insist! Freedom Now]; see alsoOrit Gan, Contract Law, Equality and the State, 72 Clev. St. L. Rev. 889, 892 (2024) (“[C]onventional wisdom holds that contract law has nothing to do with social equality.”); Deborah Zalesne, Racial Inequality in Contracting: Teaching Race as a Core Value, 3 Colum. J. Race & L. 23, 25 (2013) [hereinafter Zalesne, Racial Inequality in Contracting] (“Neoclassical contract theory embraces the idea of formal legal color blindness in assessing the validity of a contract, assuming that an individual’s race or ethnicity played no role in a contract’s formation or content.”).Show More independent of antidiscrimination law,2 2.Zatz, supra note 1, at 132–33 (describing antidiscrimination law’s “startling omission from” and “neglect within contracts curricula”); Allan H. Macurdy, Classical Nostalgia: Racism, Contract Ideology, and Formalist Legal Reasoning in Patterson v. McLean Credit Union, 18 N.Y.U. Rev. L. & Soc. Change 987, 1024–25 (1990) (asserting that, although contract law monitors valid contractual relationships through a variety of doctrines, the ostensibly “private” nature of contract law makes “[a]ntidiscrimination principles . . . seem irrelevant to the business of conducting business, and are thus of low priority”);Gan, supra note 1, at 892 (describing, without endorsing, the claim that “[c]ontract law is private law and has nothing to do with anti-discrimination law”).Show More and perhaps even antithetical to it.3 3.Richard A. Epstein, Forbidden Grounds: The Case Against Employment Discrimination Laws 3 (1992) (describing antidiscrimination law as the “antithesis of freedom of contract”); Kirsten L. McCaw, Comment, Freedom of Contract Versus the Antidiscrimination Principle: A Critical Look at the Tension Between Contractual Freedom and Antidiscrimination Provisions, 7 Seton Hall Const. L.J. 195, 202–03 (1996).Show More Concerning racial discrimination specifically, one can teach contract law, learn it, and wield it expertly without discussing or knowing much about whether or how race has shaped its current form,4 4.Dylan C. Penningroth, Race in Contract Law, 170 U. Pa. L. Rev. 1199, 1298–1300 (2022); see also Jeremiah A. Ho, Uncovering Bias: Teaching Contracts Critically, in Integrating Doctrine and Diversity: Inclusion and Equity in the Law School Classroom, supra note 1, at 121, 121–22.Show More how racial bias impacts contractual transactions,5 5.See, e.g., Patricia J. Williams, The Alchemy of Race and Rights 146–48 (1991); Meirav Furth-Matzkin, Discrimination in Contractual Performance: Theory, Evidence, and Preliminary Policy Prescriptions, 99 Wash. L. Rev. 1165, 1177–84 (2024) (summarizing evidence of selective enforcement of consumer contract terms). See generally, e.g., Ian Ayres, Pervasive Prejudice? Unconventional Evidence of Race and Gender Discrimination (2001) (arguing, with empirical support, that race and gender discrimination is not uncommon in retail markets); Shaun L. Gabbidon & George E. Higgins, Shopping While Black: Consumer Racial Profiling in America (2020) (describing the pervasiveness of racial discrimination in everyday retail transactions); Michelle R. Dunlap, Retail Racism: Shopping While Black and Brown in America (2021) (explaining that racial profiling and inequality are prevalent in “every marketplace imaginable”); Anne-Marie G. Harris, Shopping While Black: Applying 42 U.S.C. § 1981 to Cases of Consumer Racial Profiling, 23 B.C. Third World L.J. 1 (2003) (analyzing the frequency and causes of consumer racial profiling and identifying Section 1981 claims as a possible recourse for people who experience discrimination in the marketplace); Marianne Bertrand & Sendhil Mullainathan, Are Emily and Greg More Employable than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination, 94 Am. Econ. Rev. 991 (2004) (examining racial discrimination in employment contracts by demonstrating that the labor market favors individuals with “white-sounding” names over individuals with “African-American-sounding” names).Show More or how contract law has affected the distribution of wealth among racial groups.6 6.See, e.g., Zalesne, Racial Inequality in Contracting, supra note 1, at 25 (“The apparent neutrality of contract law masks the distributive effects of legal rules.”). See generally, e.g., Keeanga-Yamahtta Taylor, Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership (2019) (arguing that the public-private partnership between the real estate industry and the federal government in the late twentieth century exacerbated racial discrimination and residential segregation); Danielle Kie Hart, Contract Law & Racial Inequality: A Primer, 95 St. John’s L. Rev. 449 (2021) (arguing that, due to unequal bargaining power, contract law tends to increase material inequality in general, leading to material harm to marginalized groups). Discrimination in real estate appraisals, for example, straightforwardly impacts the wealth of Black homeowners. Jonathan Rothwell & Andre M. Perry, How Racial Bias in Appraisals Affects the Devaluation of Homes in Majority-Black Neighborhoods, Brookings Inst. (Dec. 5, 2022), https://www.brookings.edu/a‌rticles/how-racial-bias-in-appraisals-affects-the-devaluation-of-homes-in-majority-black-nei‌ghborhoods/ [https://perma.cc/A5HQ-43L8]; Heather R. Abraham, Appraisal Discrimination: Five Lessons for Litigators, 76 SMU L. Rev. 205, 215–19 (2023) (explaining some historic and modern mechanisms in the valuation process that lead to appraisal discrimination). For more on banking, see generally Mehrsa Baradaran, The Color of Money: Black Banks and the Racial Wealth Gap (2017) (explaining how the history of racial segregation in banking contributed to the racial wealth gap).Show More After all, neither doctrines nor statutes widely recognized as part of contract law refer to race or outwardly concern themselves with racial discrimination.7 7.Steven J. Burton, Racial Discrimination in Contract Performance: Patterson and a State Law Alternative, 25 Harv. C.R.-C.L. L. Rev. 431, 458–59 (1990) [hereinafter Burton, Racial Discrimination in Contract Performance]; Blake D. Morant, The Relevance of Race and Disparity in Discussions of Contract Law, 31 New Eng. L. Rev. 889, 897 (1997) (noting the existence of “contract law’s objective facade” which can obscure the role that “issues of disparity,” like racial discrimination, play in the contract process); Deborah Zalesne, The (In)Visibility of Race in Contracts: Thoughts for Teachers, ContractsProf Blog (July 8, 2020) [hereinafter Zalesne, The (In)Visibility of Race in Contracts], https://www.contractsprofblog.‌com/2020/07/deborah-zalesne-the-invisibility-of-race-in-contracts-thoughts-for-teachers/ [htt‌ps://perma.cc/TTW3-4HPL].Show More Even Williams v. Walker-Thomas Furniture Co.—a case famous for recognizing modern unconscionability doctrine and for highlighting issues about predatory market behavior in communities of color8 8.See Duncan Kennedy, The Bitter Ironies of Williams v. Walker-Thomas Furniture Co. in the First Year Law School Curriculum, 71 Buff. L. Rev. 225, 236 (2023).Show More—never mentions race explicitly.9 9.Id. at 236–37; see also Zalesne, Racial Inequality in Contracting, supra note 1, at 34; Amy H. Kastely, Out of the Whiteness: On Raced Codes and White Race Consciousness in Some Tort, Criminal, and Contract Law, 63 U. Cin. L. Rev. 269, 307 (1994). See generally Williams v. Walker-Thomas Furniture Co., 350 F.2d 445 (D.C. Cir. 1965).Show More Contract law’s formal doctrines ignore race.

Critical scholars have also taken for granted contract law’s indifference to race,10 10.ContractsProf Blog devotes several posts to the question of how to raise the topics of race and racism in first-year courses in contract law. See, e.g., Charles Calleros, Talking About Race in the Contracts Course: Interface with Civil Rights Laws, Part I—Mutual Assent, ContractsProf Blog (June 15, 2020), https://www.contractsprofblog.com/2020/06/guest-post-by-charles-calleros-talking-about-race-in-the-contracts-course-interface-with-civil-right/ [htt‌ps://perma.cc/XL9Y-HYYD]; Charles Calleros, Talking About Race in the Contracts Course: Interface with Civil Rights Laws, Part II—Consideration, ContractsProf Blog (June 16, 2020), https://www.contractsprofblog.com/2020/06/guest-post-by-charles-calleros-talking-about-ra‌ce-in-the-contracts-course-interface-with-civil-right-1/ [https://perma.cc/P39Q-CNTQ]; Zalesne, The (In)Visibility of Race in Contracts, supra note 7.Show More arguing that contract law’s formal doctrines help courts and contracting parties mask racial biases in contractual relationships11 11.See Zalesne, Racial Inequality in Contracting, supra note 1, at 25–26; Chaumtoli Huq, Integrating a Racial Capitalism Framework into First-Year Contracts: A Pathway to Anti-Capitalist Lawyering, 35 J.C.R. & Econ. Dev. 181, 195 (2022) (asserting that “neutral discussions of core contracts principles, such as the unenforceability of gratuitous promises, consideration, and reliance, obscure how law maintains racial and economic subordination”); Marissa Jackson Sow, Whiteness as Contract, 78 Wash. & Lee L. Rev. 1803, 1829 (2022).Show More and render race-based contracting decisions irrelevant to the legal analysis of contract issues,12 12.Zalesne, Racial Inequality in Contracting, supra note 1, at 25–26 (asserting that assumptions of legal reasoning in contract law doctrine conceal bias); Huq, supra note 11, at 195–97 (citing Kirksey v. Kirksey, 8 Ala. 131 (1845)) (arguing that the traditional analysis of the formal contract doctrines presented in the classic Kirkseycase conceals background “ploys of power and racial subordination”); see alsoKastely, supra note 9, at 306 (arguing that Williams v. Walker-Thomas Furniture Co., a classic unconscionability case, fails to make explicit in its unconscionability analysis that the predatory contracts at issue involved “exploitation of low-income people of color . . . enabled in part by racist barriers”).Show More at least outside of certain important but circumscribed areas of economic life like employment,13 13.See generally 42 U.S.C. §§ 2000e–2000e-17 (prohibiting various types of employment discrimination).Show More housing,14 14.See generally id. §§ 3601–3619, 3631 (prohibiting housing discrimination).Show More education,15 15.See, e.g., Brown v. Bd. of Educ., 347 U.S. 483, 492–94 (1954) (holding that the racial segregation of children in public schools is unconstitutional).Show More and commercial lending.16 16.15 U.S.C. §§ 1691–1691f (prohibiting lending discrimination).Show More Contract law’s race-free facade has also been criticized for obscuring how minorities have used contract law to exercise their agency successfully in the world.17 17.Penningroth, supra note 4, at 1211–16, 1273; Brittany Farr, Breach by Violence: The Forgotten History of Sharecropper Litigation in the Post-Slavery South, 69 UCLA L. Rev. 674, 681–82 (2022).Show More If formalists and critical race theorists share any scholarly views about contract law, foremost is their assumption that it ignores race and racial discrimination.18 18.Professor Deborah Zalesne, however, does seem to challenge the assumption that contract law ignores race and racial discrimination in Zalesne, Racial Inequality in Contracting, supra note 1, at 24–25 (“[A] complete understanding of contract disputes routinely requires an analysis of the effects of inequality, including race dynamics, on parties’ bargaining choices.”). Although Zalesne correctly observes that courts have raised the issue of inequality of bargaining power in the context of applying the unconscionability doctrine, she does not show that courts routinely appeal to underlying racial dynamics in their legal reasoning. See generally id. See also Justin Driver, Recognizing Race, 112 Colum. L. Rev. 404, 449 (2012) (arguing that applying unconscionability in the Williams v. Walker-Thomas Furniture Co. case does not require reckoning with race). For one unconscionability case that notes racial disparities without disclosing the racial identities of the litigants, see State ex rel. King v. B & B Inv. Grp., Inc., 2014-NMSC-024, ¶¶ 13–17, 329 P.3d 658, 665–66.Show More

This Article challenges that assumption. Race is directly relevant to contract law because a federal statute prohibiting racial discrimination in contracting, 42 U.S.C. § 1981, also expresses important rules of contract law. Section 1981 guarantees everyone the same right “to make and enforce contracts . . . as is enjoyed by white citizens” and prohibits both private and public actors from racially discriminating in “the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship.”19 19.42 U.S.C. § 1981(a)–(c).Show More This language—originating in the Civil Rights Act of 1866 and updated by the Civil Rights Act of 199120 20.Civil Rights Act of 1866, ch. 31, § 1, 14 Stat. 27, 27 (codified as amended at 42 U.S.C. §§ 1981–1982, 1988–1989); Civil Rights Act of 1991, Pub. L. No. 102-166, § 101, 105 Stat. 1071, 1071–72 (codified as amended at 42 U.S.C. § 1981).Show More—generates three reasons to treat Section 1981 as part of contract law in the United States.

The first traces back to the 1866 Act. Among other things, the Civil Rights Act of 1866 reformed the law of contract formation in the United States in response to the Black Codes adopted by Southern states after the Civil War.21 21.See infra Part I.Show More The Black Codes represented a systematic effort by Southern states to socially and economically subordinate formerly enslaved persons, including by affording legal powers to make and enforce contracts to white citizens that it denied to people of color.22 22.See infra Part I.Show More Congress rejected the Black Codes via the 1866 Act and thereby eliminated, at least as a formal matter, the two-tiered system of contractual freedoms they had established.23 23.See infra Part I.Show More Insofar as the rules defining the legal power to contract are quintessentially rules of contract law, the redefinition of that power Section 1981 inherited from the 1866 Act counts as contract law.24 24.See infra Part II.Show More

The second reason Section 1981 counts as part of contract law finds a foothold in the Civil Rights Act of 1991. In the 1991 Act, Congress explicitly prohibited racial discrimination in several distinctively contractual activities, including contract formation, performance, enforcement, modification, and termination.25 25.42 U.S.C. § 1981(b).Show More I argue that these are protective rules and thus count as part of contract law. Briefly, just like rules against fouling in basketball count as part of basketball’s rules and the Fourth Amendment exclusionary rule counts as a rule of constitutional law, Section 1981 expresses a rule that protects both the integrity of the practice of contracting (as opposed to basketball or government investigations), as well as the participants in the practice qua contracting parties (as opposed to basketball players or citizens). Because protective rules are partially constitutive of the system of rules they protect, Section 1981 counts as part of contract law and should be recognized as such.26 26.See infra Part II.Show More

These formal and conceptual considerations are reinforced, third, by substantive principles of contract law itself. More specifically, contract law’s core doctrines embody principles of fair play that cannot be easily reconciled with pernicious racial discrimination in contracting practices. Although common law courts have largely failed to recognize this point, and although they probably should, courts need not go that far: they need only recognize that Section 1981 already counts as part of contract law. Congress, after all, has already recognized the importance of antidiscrimination law in facilitating contractual fair play, and not just in some discrete economic realms such as employment or housing, but also in acts and practices of contracting as such. Common law courts should follow Congress’s lead.

Classifying Section 1981 as part of contract law is a taxonomical task. But taxonomy has far-reaching implications in this case. If Section 1981 is a foundational part of contract law, then theories of contract law that assume the power to contract confers unfettered discretion on parties to contract regardless of motive, for example, will have difficulty accounting for Section 1981.27 27.See infra Section V.A.Show More Because most comprehensive summaries of contract law fail to cite, let alone discuss, Section 1981,28 28.See infra Part IV.Show More curators of these works should discuss Section 1981’s significance or rethink why they omit the statute. Recognizing Section 1981 as part of contract law also undercuts the impulse to treat discrimination as extrinsic to doctrines such as good faith and fair dealing. Finally, if Section 1981 is an important part of contract law, then choosing not to teach it requires a justification. Although good reasons not to teach Section 1981 may exist—not every important subject can be covered in one semester—the bare fact that the statute expresses rules of antidiscrimination law cannot be one of those reasons. Section 1981 also states rules of contract law.

With that preview in mind, this Article is structured as follows. Part I gives a brief history of Section 1981 and discusses the controversies that surrounded its meaning, at least until Congress altered the statute via the Civil Rights Act of 1991. Chief among these controversies was whether it applied only to state action or whether Section 1981 also prohibited private discrimination. Although other interpretive controversies remain, both the U.S. Supreme Court and Congress have settled the question by extending the statute to private contracting practices. The Civil Rights Act of 1991 also clarified that Section 1981 bars racial discrimination in the formation, performance, modification, termination, and enforcement of every contract by public and private actors.

Part II turns to the main argument: Section 1981 already is, and should be understood to be, a part of contract law in the United States. Section II.A explains that the Civil Rights Act of 1866 reconstituted the law of contract formation in response to the Black Codes adopted by Southern states after the Civil War. Because the laws of contract formation are quintessentially part of contract law, the Civil Rights Act of 1866 inescapably became part of contract law in the United States. Section II.A further argues that the nature of Section 1981’s antidiscrimination rules suffices to show that it is part of contract law. Because Section 1981 protects participants in the practice of contracting as such, Section 1981 thereby generates rules of contract law. Section II.B takes a substantive and normative turn, arguing that Section 1981’s rule against racial discrimination should be recognized as an expression of contract law’s most basic principles rather than as a deviation from them. That is, because contract law’s doctrines already disfavor contractual unreasonableness in contracting, courts and commentators should likewise recognize that contract law disfavors invidious racial discrimination in contracting because it is also contractually unreasonable.29 29.See infra Section III.B.Show More

Part III argues that Section 1981’s antidiscrimination rule not only counts as part of contract law, but also counts as an important part of it. Section III.A reemphasizes Section 1981’s historical significance, as well as its formal importance given that it applies to all contracts (i.e., it has universal breadth) and regulates significant stages of any given contractual relationship (i.e., it has profound depth). Section III.B argues, in the alternative, that the very same reasons to treat Section 1981 as important justify revising our comprehensive summaries of contract law regardless of whether it counts as contract law.

Part IV shows that despite its status as contract law, despite applying to nearly every phase of every contractual relationship, and despite its importance, Section 1981 has been almost wholly ignored by leading repositories of contract law in the United States, including Restatements, casebooks, and major contract law treatises. Some of these omissions are not surprising. The Restatement (Second) of Contracts, for example, emphasizes the common law and was finalized by the American Law Institute in 1979—shortly after the U.S. Supreme Court recognized in Runyon v. McCrary that the statute applies to private contracting practices.30 30.See infra Part I; Runyon v. McCrary, 427 U.S. 160, 168 (1976); Restatement (Second) of Conts. (Am. L. Inst. 1981).Show More Still, seventy-four percent of contract law casebooks—which often stray beyond the common law and are frequently updated—do not cite the statute.31 31.See infra Section IV.B.Show More Many of those that do largely fail to discuss the statute’s history or contemporary applications.32 32.See infra Section IV.B.Show More

Finally, Part V addresses why taxonomy matters. Section V.A shows that Section 1981’s antidiscrimination rule has important implications for contract law theorists. Understanding Section 1981’s antidiscrimination mandate as part of contract law challenges libertarian and libertarian-adjacent views that treat the freedom to choose one’s contracting partners as sacrosanct, while favoring justice-oriented theories that treat equality and fairness as central to the domain. Understanding the statute as generating contract law also raises practical issues concerning how we maintain and impart knowledge about contract law’s content. Section V.B discusses these issues, arguing, first, that the comprehensive doctrinal summaries of contract law discussed in Part IV should be revised to reflect Section 1981’s rules against racial discrimination, and second, that law professors who teach contract law should consider incorporating a discussion of Section 1981 into their curriculum. Although this second recommendation is offered more tentatively,33 33.See infra Section V.B.Show More there is little reason to justify excluding Section 1981 from the legal community’s comprehensive doctrinal summaries of contract law—e.g., our casebooks, treatises, and Restatements—if Section 1981 indeed counts as an important part of contract law in the United States. Finally, Section V.B briefly discusses how understanding Section 1981 as part of contract law should impact how courts apply doctrines like unconscionability, the duty of good faith and fair dealing, and voidness as a matter of public policy. Once racial discrimination is understood as part of contract law’s purview, evaluating racial discrimination as relevant to doctrinal analysis elsewhere seems less far-fetched.

As noted above, scholars have long worried that contract law’s apparent indifference to race masks how our current commercial realities have been shaped by slavery and Jim Crow. That same indifference also obscures how racial bias continues to harm communities of color seeking to navigate modern markets. By the same token, if contract law does not take race into account formally, discussing race fruitfully while learning about and teaching contract law will remain an uphill battle because the conversation will seem forced. But reconceiving Section 1981 as a foundational part of contract law not only presents a more accurate picture of contract law in the United States, but it also connects our understandings of past racial injustices to present ones, as well as highlights the interface between “traditional” doctrines of contract law and those injustices. Recognizing Section 1981 as a foundational part of contract law will not eliminate racial biases or frictions in the market or undo persistently unequal bargaining power and wealth, which trace to this country’s sordid history of Black subordination.34 34.See generally Carliss Chatman, 1981, 82 Wash. & Lee L. Rev. (forthcoming 2025), https:/‌/papers.ssrn.com/sol3/papers.cfm?abstract_id=4998718 [https://perma.cc/M8ZD-3TKN].Show More But it may help lawyers better appreciate the ubiquity of the problem, as well as give them a more complete view of contract law’s content and a richer understanding of its ideals.

  1.  See Bowlin v. Lyon, 25 N.W. 766, 767–68 (Iowa 1885) (holding that a “colored man” who was denied entry into a skating rink solely because of his race was not entitled to admission given the rink’s discretion to contract with, or grant entry to, whomever it pleased); Noah D. Zatz, A Law and Political Economy Approach to Race, Gender, and Power in Contracts, in Integrating Doctrine and Diversity: Inclusion and Equity in the Law School Classroom 129, 133 (Nicole P. Dyszlewski, Raquel J. Gabriel, Suzanne Harrington-Steppen, Anna Russell & Genevieve B. Tung eds., 2021) (observing that “[i]n the classic common-law cases of refusal-to-contract, discrimination appears as purely private preference,” which courts treated on par with any other personal preference in the name of “evenhandedness”); Hila Keren, “We Insist! Freedom Now”: Does Contract Doctrine Have Anything Constitutional to Say?, 11 Mich. J. Race & L. 133, 142 (2005) [hereinafter Keren, We Insist! Freedom Now]; see also Orit Gan, Contract Law, Equality and the State, 72 Clev. St. L. Rev. 889, 892 (2024) (“[C]onventional wisdom holds that contract law has nothing to do with social equality.”); Deborah Zalesne, Racial Inequality in Contracting: Teaching Race as a Core Value, 3 Colum. J. Race & L. 23, 25 (2013) [hereinafter Zalesne, Racial Inequality in Contracting] (“Neoclassical contract theory embraces the idea of formal legal color blindness in assessing the validity of a contract, assuming that an individual’s race or ethnicity played no role in a contract’s formation or content.”). ↑
  2.  Zatz, supra note 1, at 132–33 (describing antidiscrimination law’s “startling omission from” and “neglect within contracts curricula”); Allan H. Macurdy, Classical Nostalgia: Racism, Contract Ideology, and Formalist Legal Reasoning in Patterson v. McLean Credit Union, 18 N.Y.U. Rev. L. & Soc. Change 987, 1024–25 (1990) (asserting that, although contract law monitors valid contractual relationships through a variety of doctrines, the ostensibly “private” nature of contract law makes “[a]ntidiscrimination principles . . . seem irrelevant to the business of conducting business, and are thus of low priority”); Gan, supra note 1, at 892 (describing, without endorsing, the claim that “[c]ontract law is private law and has nothing to do with anti-discrimination law”). ↑
  3.  Richard A. Epstein, Forbidden Grounds: The Case Against Employment Discrimination Laws 3 (1992) (describing antidiscrimination law as the “antithesis of freedom of contract”); Kirsten L. McCaw, Comment, Freedom of Contract Versus the Antidiscrimination Principle: A Critical Look at the Tension Between Contractual Freedom and Antidiscrimination Provisions, 7 Seton Hall Const. L.J. 195, 202–03 (1996). ↑
  4.  Dylan C. Penningroth, Race in Contract Law, 170 U. Pa. L. Rev. 1199, 1298–1300 (2022); see also Jeremiah A. Ho, Uncovering Bias: Teaching Contracts Critically, in Integrating Doctrine and Diversity: Inclusion and Equity in the Law School Classroom, supra note 1, at 121, 121–22. ↑
  5.  See, e.g., Patricia J. Williams, The Alchemy of Race and Rights 146–48 (1991); Meirav Furth-Matzkin, Discrimination in Contractual Performance: Theory, Evidence, and Preliminary Policy Prescriptions, 99 Wash. L. Rev. 1165, 1177–84 (2024) (summarizing evidence of selective enforcement of consumer contract terms). See generally, e.g., Ian Ayres, Pervasive Prejudice? Unconventional Evidence of Race and Gender Discrimination (2001) (arguing, with empirical support, that race and gender discrimination is not uncommon in retail markets); Shaun L. Gabbidon & George E. Higgins, Shopping While Black: Consumer Racial Profiling in America (2020) (describing the pervasiveness of racial discrimination in everyday retail transactions); Michelle R. Dunlap, Retail Racism: Shopping While Black and Brown in America (2021) (explaining that racial profiling and inequality are prevalent in “every marketplace imaginable”); Anne-Marie G. Harris, Shopping While Black: Applying 42 U.S.C. § 1981 to Cases of Consumer Racial Profiling, 23 B.C. Third World L.J. 1 (2003) (analyzing the frequency and causes of consumer racial profiling and identifying Section 1981 claims as a possible recourse for people who experience discrimination in the marketplace); Marianne Bertrand & Sendhil Mullainathan, Are Emily and Greg More Employable than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination, 94 Am. Econ. Rev. 991 (2004) (examining racial discrimination in employment contracts by demonstrating that the labor market favors individuals with “white-sounding” names over individuals with “African-American-sounding” names). ↑
  6.  See, e.g., Zalesne, Racial Inequality in Contracting, supra note 1, at 25 (“The apparent neutrality of contract law masks the distributive effects of legal rules.”). See generally, e.g., Keeanga-Yamahtta Taylor, Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership (2019) (arguing that the public-private partnership between the real estate industry and the federal government in the late twentieth century exacerbated racial discrimination and residential segregation); Danielle Kie Hart, Contract Law & Racial Inequality: A Primer, 95 St. John’s L. Rev. 449 (2021) (arguing that, due to unequal bargaining power, contract law tends to increase material inequality in general, leading to material harm to marginalized groups). Discrimination in real estate appraisals, for example, straightforwardly impacts the wealth of Black homeowners. Jonathan Rothwell & Andre M. Perry, How Racial Bias in Appraisals Affects the Devaluation of Homes in Majority-Black Neighborhoods, Brookings Inst. (Dec. 5, 2022), https://www.brookings.edu/a‌rticles/how-racial-bias-in-appraisals-affects-the-devaluation-of-homes-in-majority-black-nei‌ghborhoods/ [https://perma.cc/A5HQ-43L8]; Heather R. Abraham, Appraisal Discrimination: Five Lessons for Litigators, 76 SMU L. Rev. 205, 215–19 (2023) (explaining some historic and modern mechanisms in the valuation process that lead to appraisal discrimination). For more on banking, see generally Mehrsa Baradaran, The Color of Money: Black Banks and the Racial Wealth Gap (2017) (explaining how the history of racial segregation in banking contributed to the racial wealth gap). ↑
  7.  Steven J. Burton, Racial Discrimination in Contract Performance: Patterson and a State Law Alternative, 25 Harv. C.R.-C.L. L. Rev. 431, 458–59 (1990) [hereinafter Burton, Racial Discrimination in Contract Performance]; Blake D. Morant, The Relevance of Race and Disparity in Discussions of Contract Law, 31 New Eng. L. Rev. 889, 897 (1997) (noting the existence of “contract law’s objective facade” which can obscure the role that “issues of disparity,” like racial discrimination, play in the contract process); Deborah Zalesne, The (In)Visibility of Race in Contracts: Thoughts for Teachers, ContractsProf Blog (July 8, 2020) [hereinafter Zalesne, The (In)Visibility of Race in Contracts], https://www.contractsprofblog.‌com/2020/07/deborah-zalesne-the-invisibility-of-race-in-contracts-thoughts-for-teachers/ [htt‌ps://perma.cc/TTW3-4HPL]. ↑
  8.  See Duncan Kennedy, The Bitter Ironies of Williams v. Walker-Thomas Furniture Co. in the First Year Law School Curriculum, 71 Buff. L. Rev. 225, 236 (2023). ↑
  9.  Id. at 236–37; see also Zalesne, Racial Inequality in Contracting, supra note 1, at 34; Amy H. Kastely, Out of the Whiteness: On Raced Codes and White Race Consciousness in Some Tort, Criminal, and Contract Law, 63 U. Cin. L. Rev. 269, 307 (1994). See generally Williams v. Walker-Thomas Furniture Co., 350 F.2d 445 (D.C. Cir. 1965). ↑
  10.  ContractsProf Blog devotes several posts to the question of how to raise the topics of race and racism in first-year courses in contract law. See, e.g., Charles Calleros, Talking About Race in the Contracts Course: Interface with Civil Rights Laws, Part I—Mutual Assent, ContractsProf Blog (June 15, 2020), https://www.contractsprofblog.com/2020/06/guest-post-by-charles-calleros-talking-about-race-in-the-contracts-course-interface-with-civil-right/ [htt‌ps://perma.cc/XL9Y-HYYD]; Charles Calleros, Talking About Race in the Contracts Course: Interface with Civil Rights Laws, Part II—Consideration, ContractsProf Blog (June 16, 2020), https://www.contractsprofblog.com/2020/06/guest-post-by-charles-calleros-talking-about-ra‌ce-in-the-contracts-course-interface-with-civil-right-1/ [https://perma.cc/P39Q-CNTQ]; Zalesne, The (In)Visibility of Race in Contracts, supra note 7. ↑
  11.  See Zalesne, Racial Inequality in Contracting, supra note 1, at 25–26; Chaumtoli Huq, Integrating a Racial Capitalism Framework into First-Year Contracts: A Pathway to Anti-Capitalist Lawyering, 35 J.C.R. & Econ. Dev. 181, 195 (2022) (asserting that “neutral discussions of core contracts principles, such as the unenforceability of gratuitous promises, consideration, and reliance, obscure how law maintains racial and economic subordination”); Marissa Jackson Sow, Whiteness as Contract, 78 Wash. & Lee L. Rev. 1803, 1829 (2022). ↑
  12.  Zalesne, Racial Inequality in Contracting, supra note 1, at 25–26 (asserting that assumptions of legal reasoning in contract law doctrine conceal bias); Huq, supra note 11, at 195–97 (citing Kirksey v. Kirksey, 8 Ala. 131 (1845)) (arguing that the traditional analysis of the formal contract doctrines presented in the classic Kirksey case conceals background “ploys of power and racial subordination”); see also Kastely, supra note 9, at 306 (arguing that Williams v. Walker-Thomas Furniture Co., a classic unconscionability case, fails to make explicit in its unconscionability analysis that the predatory contracts at issue involved “exploitation of low-income people of color . . . enabled in part by racist barriers”). ↑
  13.  See generally 42 U.S.C. §§ 2000e–2000e-17 (prohibiting various types of employment discrimination). ↑
  14.  See generally id. §§ 3601–3619, 3631 (prohibiting housing discrimination). ↑
  15.  See, e.g., Brown v. Bd. of Educ., 347 U.S. 483, 492–94 (1954) (holding that the racial segregation of children in public schools is unconstitutional). ↑
  16.  15 U.S.C. §§ 1691–1691f (prohibiting lending discrimination). ↑
  17.  Penningroth, supra note 4, at 1211–16, 1273; Brittany Farr, Breach by Violence: The Forgotten History of Sharecropper Litigation in the Post-Slavery South, 69 UCLA L. Rev. 674, 681–82 (2022). ↑
  18.  Professor Deborah Zalesne, however, does seem to challenge the assumption that contract law ignores race and racial discrimination in Zalesne, Racial Inequality in Contracting, supra note 1, at 24–25 (“[A] complete understanding of contract disputes routinely requires an analysis of the effects of inequality, including race dynamics, on parties’ bargaining choices.”). Although Zalesne correctly observes that courts have raised the issue of inequality of bargaining power in the context of applying the unconscionability doctrine, she does not show that courts routinely appeal to underlying racial dynamics in their legal reasoning. See generally id. See also Justin Driver, Recognizing Race, 112 Colum. L. Rev. 404, 449 (2012) (arguing that applying unconscionability in the Williams v. Walker-Thomas Furniture Co. case does not require reckoning with race). For one unconscionability case that notes racial disparities without disclosing the racial identities of the litigants, see State ex rel. King v. B & B Inv. Grp., Inc., 2014-NMSC-024, ¶¶ 13–17, 329 P.3d 658, 665–66. ↑
  19.  42 U.S.C. § 1981(a)–(c). ↑
  20.  Civil Rights Act of 1866, ch. 31, § 1, 14 Stat. 27, 27 (codified as amended at 42 U.S.C. §§ 1981–1982, 1988–1989); Civil Rights Act of 1991, Pub. L. No. 102-166, § 101, 105 Stat. 1071, 1071–72 (codified as amended at 42 U.S.C. § 1981). ↑
  21.  See infra Part I. ↑
  22.  See infra Part I. ↑
  23.  See infra Part I. ↑
  24.  See infra Part II. ↑
  25.  42 U.S.C. § 1981(b). ↑
  26.  See infra Part II. ↑
  27.  See infra Section V.A. ↑
  28.  See infra Part IV. ↑
  29.  See infra Section III.B. ↑
  30.  See infra Part I; Runyon v. McCrary, 427 U.S. 160, 168 (1976); Restatement (Second) of Conts. (Am. L. Inst. 1981). ↑
  31.  See infra Section IV.B. ↑
  32.  See infra Section IV.B. ↑
  33.  See infra Section V.B. ↑

  34.  See generally Carliss Chatman, 1981, 82 Wash. & Lee L. Rev. (forthcoming 2025), https:/‌/papers.ssrn.com/sol3/papers.cfm?abstract_id=4998718 [https://perma.cc/M8ZD-3TKN]. ↑

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