In the case of Energy Reserves Group, Inc. v. Kansas Power & Light Co., 1982, the U.S Supreme Court was asked to determine if a state law could alter contractual obligations in response to an energy crisis without violating the Contract Clause of the Constitution. The dispute arose when Energy Reserves Group (ERG), a natural gas producer, sought to increase prices for its long-term contract with Kansas Power and Light Company (KP&L) following new federal regulations that raised ceiling prices on natural gas contracts. KP&L refused this price hike arguing it violated their existing contract terms; ERG countered by invoking a clause within their agreement allowing for price adjustments due to regulatory changes. The court ruled in favor of ERG stating that while states cannot interfere with private contracts lightly, they can do so under certain conditions such as addressing significant societal issues like an energy crisis or economic emergency. It held that Kansas' Natural Gas Price Protection Act did not violate the Contract Clause because it served legitimate public purpose and was based upon reasonable conditions.

In the dissenting opinion for ENERGY RESERVES GROUP, INC. v. KANSAS POWER & LIGHT CO., Justice Stevens argued that the majority's decision was a departure from traditional contract law principles and an unwarranted intrusion into private contractual relationships by the judiciary. He contended that parties should be free to negotiate their own terms without interference from courts unless there is clear evidence of unconscionability or public policy violations. The justice also criticized the majority's reliance on federal energy policy as justification for its ruling, asserting it was not relevant to interpreting state contract law and created unnecessary confusion in this area of jurisprudence.