In the Matter of Baby M

Supreme Court of New Jersey · 2005 · Property

537 A.2d 1227 (N.J. 1988)

Updated July 23, 2026

Propertysurrogacyadoptiontermination of parental rightscustodyvisitationsurrogacy contractbaby-selling statute

Facts

William Stern and Mary Beth Whitehead entered a surrogacy contract under which Whitehead would be artificially inseminated with Stern's sperm, carry the child, surrender the child at birth, terminate her parental rights, and receive $10,000; Stern also paid the Infertility Center of New York to arrange the transaction. After the child was born, Whitehead initially turned the baby over to the Sterns but soon could not part with the child and refused to return her after receiving the baby back for a short period. Stern sued to enforce the contract, and after interim proceedings the child was placed with the Sterns during the litigation. The trial court validated the contract and enforced its basic terms, but the Supreme Court treated custody separately from contract enforcement.

Issue

Whether a paid surrogacy contract requiring a natural mother, before conception and birth, to surrender her child, terminate her parental rights, and facilitate adoption by the father's wife is valid and enforceable under New Jersey law. If not, whether termination, adoption, custody, and visitation should nevertheless be ordered on other legal grounds.

Rule

Under current New Jersey law, a surrogacy agreement is invalid and unenforceable when it uses money in connection with adoption, requires irrevocable pre-birth surrender of custody, or seeks termination of parental rights by contract. Termination of parental rights may occur only through the statutory methods and standards, not by private agreement, and in a custody dispute between natural parents the child's best interests control with the mother and father standing on equal footing.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Newark, Daniel Mercer and his wife, Leah, sign an agreement with Tessa Nolan. Tessa agrees to be inseminated with Daniel's sperm, carry the child, surrender the baby after birth so Leah can adopt, and receive $18,000 only after delivery and surrender; the contract calls the payment compensation for services.

If Tessa refuses to surrender the child after birth, which is the strongest reason a New Jersey court should decline to enforce the agreement?

Explanation. The majority treated such an arrangement as a private placement adoption for money, regardless of labels describing payment as compensation for services. A contract is invalid when money is paid in connection with adoption, especially where payment is conditioned on surrender and termination of parental rights. The biological father's status does not validate the contract, and suitability of the intended household is not the threshold issue for enforceability.