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The 125th anniversary of the Interstate Commerce Act invites reflection on what it has contributed to our understanding of public regulation. Perhaps the most important and enduring idea associated with the Act is what we may call the administered contract. At common law, transportation services, like other goods and services, were governed by ordinary contracts between customer and carrier. Building on innovations in English and state railroad legislation, the Interstate Commerce Act developed a different form of contracting. Contracts for transportation services became public acts, understood to have the openness, generality, and binding force of public law. This concept of the administered contract soon spread to other public transportation and utility services. It remains a feature today of what we loosely call public utility law. Ironically, rail transportation, where it all began, has reverted to ordinary contracting. This aspect of the history of the Interstate Commerce Act – the rise and fall of the administered contract – tells us much about why the Interstate Commerce Act, despite all its flaws, was so widely emulated. It also sheds important light on the appropriate domain of private and public law in the provision of services to customers.


Contracts | Law

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Contracts Commons