Article I, Section 13 of the Missouri Constitution’s Bill of Rights reads in part, “That no…law impairing the obligations of contracts….can be enacted.” Pretty simple stuff – no Philadelphia lawyer needed here.
Yet this most fundamental right of contract, the very foundation of America’s free enterprise system, is once again under attack in our state Capitol.
Under the thin veil of achieving some public protection policy goal, the marketing arm of the alcohol distributors’ associations crafted several bills effectively modifying the terms of existing contracts between alcohol producers and distributors. These bills are making their way through the 2013 legislative process.
Senate Bill 365, sponsored by Senator Parson of Bolivar, and House Bill 759, sponsored by Representative Jones of California, seek to make alcohol distribution agreements more difficult to terminate by making them subject to franchise statutes.
Adding insult to injury Senate Bill 412, sponsored by Senator Kehoe of Jefferson City, seeks to prevent beer producers from distributing their own products or those of other producers by making it illegal for producers to own any interest in any distributorship. This proposed state intervention goes beyond “impairing the obligations of contracts” to benefit a few favored interests, namely beer distributors. This is naked protectionism, pure and simple, shameful intervention in the free market, devoid of any conceivable public interest.
These bills, if enacted, would increase prices in the marketplace, inhibit or eliminate new start-up producers and distributors, reduce the number of the jobs they would create, as well as limit consumer choice in the market place.
When suppliers are effectively prevented from terminating distribution contracts, possible innovation, efficiency, and better choice are not the only things that suffer – our liberty – our freedom and sacred right to contract suffer. The freedom to contract at the heart of this issue is the very thing that our founders protected under our Missouri Bill of Rights. It’s as basic as our freedom of speech and our freedom to bear arms.
Statutes that ignore this right are a corruption of the legal system. There is a significant correlation between legal and illegal corruption. One need only think of the baleful consequences of Amendment XVIII to the U.S. Constitution, Prohibition.
The Missouri General Assembly should decisively REJECT these corruptions of our legal and free enterprise system.