In the case of Perry v. Commerce Loan Co., 1965, the U.S. Supreme Court ruled that a Georgia statute allowing confession of judgment clauses in loan contracts was unconstitutional as it violated due process rights under the Fourteenth Amendment. The plaintiff, Perry, had signed a promissory note containing such a clause to secure a loan from defendant Commerce Loan Company and later defaulted on his payments. When sued for repayment by Commerce Loan Company, Perry argued that he had not been given proper notice or opportunity to defend himself before judgment was entered against him based on this clause - an argument which found favor with the court. The ruling clarified that while states have considerable leeway in structuring their own systems of civil procedure and debt collection practices, they must still adhere to fundamental principles of fairness embodied in constitutional due process protections. This includes providing adequate notice and meaningful opportunity for individuals to present their defense before any deprivation occurs.

In the dissenting opinion for Perry v. Commerce Loan Co., Justice Harlan disagreed with the majority's decision to reverse a Georgia Supreme Court ruling that upheld a confession of judgment clause in a loan contract. He argued that this case did not present any substantial federal question and thus, should not have been reviewed by the U.S. Supreme Court in the first place. Furthermore, he contended that even if there was such a question, it would be more appropriate for Congress rather than courts to address it due to its complex nature involving economic policy considerations and state laws on lending practices. In his view, judicial intervention could potentially disrupt existing commercial relationships based on these laws without providing clear benefits or safeguards against potential abuses by lenders.