By: Jasveen Kaur
Commercial surrogacy has rapidly expanded into a multibillion-dollar industry, shaped by advances in assisted reproductive technologies and exposing critical gaps in existing legal and regulatory frameworks.[1] Assisted reproductive technologies, such as in vitro fertilization (IVF) and embryo transfer, allow intended parents to rely on gestational carriers.[2] This transforms reproduction into a service market that involves fertility clinics, legal professionals, surrogacy agencies, and international investors.[3] As these technologies expand, surrogacy increasingly becomes embedded within a global fertility economy where contracts determine how pregnancy, compensation, and parental rights are allocated.[4]
Surrogacy typically involves an agreement in which a woman agrees to carry a pregnancy for intended parents and relinquish parental rights after birth, often in exchange for compensation in commercial arrangements.[5] Modern gestational surrogacy relies on IVF to implant embryos created using the intended parents’ or donors’ genetic material into the surrogate carrier, separating genetic parenthood from the gestational role of pregnancy.[6] This technological separation has enabled surrogacy to develop into a structured market where agencies coordinate medical treatment, contract negotiation, and financial payments between intended parents and surrogate carriers.[7]
As assisted reproductive technologies become more sophisticated, fertility services have developed into a globalized industry in which intended parents shop for jurisdictions with favorable legal regimes, highlighting the absence of a harmonized regulatory framework.[8] Differences in national regulation have produced cross-border reproductive markets where clinics, agencies, and investors strategically operate in jurisdictions that permit commercial surrogacy or provide clearer pathways to legal parentage recognition.[9] These transnational arrangements illustrate how surrogacy functions not only as a medical practice but also as a global business ecosystem shaped by regulatory arbitrage and uneven legal oversight.[10]
Despite the industry’s rapid growth, the legal status of surrogacy remains inconsistent across jurisdictions, creating uncertainty for intended parents, surrogates, and legal professionals structuring these agreements.[11] Some states prohibit commercial surrogacy entirely, while others permit only altruistic arrangements or impose extensive regulatory requirements.[12] This patchwork of legal regimes requires attorneys and agencies to navigate a complex intersection of family law, contract law, and reproductive regulation, where traditional contract principles often conflict with public policy.[13]
In the United States, surrogacy regulation occurs primarily at the state level, resulting in substantial variation in the enforceability and structure of surrogacy agreements.[14] New York permits commercial gestational surrogacy and established statutory frameworks that recognize intended parents as the legal parents through pre-birth or post-birth orders issued by courts.[15] Historically, several states and the District of Columbia deemed surrogacy contracts unenforceable, while others allowed restricted arrangements.[16] The landmark case In re Baby M[17] drew national attention when the New Jersey Supreme Court held the surrogacy contract invalid in compliance with the law and the public policy of the state.[18] Although the child’s custody was granted to the biological father (intended parent) in the best interest of the child, the case was remanded regarding the birthing mother’s visitation rights.[19] Because of a lack of federal regulation, courts often rely on statutes governing birth records, adoption, reproductive options, and preexisting contract law rather than surrogacy-specific legislation.[20] More recently, New York’s Child-Parent Security Act legalized gestational surrogacy and created regulatory protections that require independent legal counsel for surrogates and mandate comprehensive agreements governing compensation, healthcare coverage, and decision-making authority during pregnancy.[21] The law also includes a Gestational Surrogates’ Bill of Rights that guarantees the surrogate’s control over medical decisions and protects access to health care throughout the pregnancy.[22]
At the same time, the expansion of commercial surrogacy has raised concerns about the health and autonomy of surrogate mothers within a rapidly growing reproductive market.[23] Surrogacy involves medical procedures such as hormonal treatments, embryo transfer, and pregnancy monitoring, all of which carry potential health risks for the surrogate carrier.[24] Critics argue that financial incentives—absent regulatory oversight—in commercial surrogacy arrangements may pressure economically vulnerable women to assume these risks, raising ethical concerns about exploitation within a market-based fertility system.[25]
The convergence of reproductive technology, global markets, and evolving legal frameworks has therefore positioned commercial surrogacy as a significant challenge for business and contract law.[26] Surrogacy agreements must allocate responsibilities for compensation, medical decision-making, and parental rights while operating across jurisdictions with different rules governing reproductive autonomy and contractual enforceability.[27] As the global fertility industry continues to expand, legal professionals and policymakers will increasingly confront questions about how contract doctrine and regulatory oversight should adapt to a reproductive marketplace that is rapidly transforming the legal and economic meaning of parenthood.[28] Ultimately, jurisdictions should adopt harmonized regulatory frameworks that integrate contract law with enforceable safeguards to protect surrogate autonomy while providing certainty for intended parents.
[1] See Carolin Schurr, The Baby Business Booms: Economic Geographies of Assisted Reproduction, 12 Geography Compass, May 31, 2018, at 1, 2, https://compass.onlinelibrary.wiley.com/doi/10.1111/gec3.12395 [https://doi.org/10.1111/gec3.12395]; Lynn-nore Chittom & Geraldine Wagner, Surrogacy: Overview, EBSCO (2024), https://www.ebsco.com/research-starters/technology/surrogacy-overview [https://perma.cc/STB4-TTFT].
[2] Frieda Klotz, The Science of Surrogacy, Thrust Into a Global Spotlight, Undark (Feb. 5, 2026), https://undark.org/2026/02/05/science-of-surrogacy/ [https://perma.cc/KDR4-5T8T].
[3] Klotz, supra note 2; Kirsty Horsey, The Future of Surrogacy: A Review of Current Global Trends and National Landscapes, 48 Reprod. BioMed. Online, May 2024, at 1, 2, https://www.sciencedirect.com/science/article/pii/S1472648323008635 [https://perma.cc/RCX3-MR7P].
[4] Schurr, supra note 1, at 4; Chittom & Wagner, supra note 1; Katherine Long, Ben Foldy & Lingling Wei, The Chinese Billionaires Having Dozens of U.S.-Born Babies via Surrogate, Wall St. J. (Dec. 13, 2025 at 21:00 ET), https://www.wsj.com/us-news/chinese-billionaires-surrogacy-pregnancy-7fdfc0c3 [https://perma.cc/GB6L-ADY2] (describing that some Chinese Billionaires commissioned “dozens, or even hundreds, of U.S.-born babies” via surrogacy).
[5] Chittom & Wagner, supra note 1.
[6] Chittom & Wagner, supra note 1; Klotz, supra note 2; P.M. v. T.B., 907 N.W.2d 522, 525 (Iowa 2018) (ruling the surrogacy contract enforceable by using genetic testing to establish paternity and gave the child’s legal and physical custody to the biological father); In re Baby M, 109 N.J. 396, 411 (1988) (granting the child’s custody to the biological father).
[7] Schurr, supra note 1, at 4; Horsey, supra note 3, at 2, 6.
[8] Schurr, supra note 1, at 5 (stating that not only parents consider different locations based on cost, but also based on taxes and states’ control of the medical services).
[9] Horsey, supra note 3, at 5–7.
[10] Schurr, supra note 1, at 5; Horsey, supra note 3, at 6.
[11] Chittom & Wagner, supra note 1; Horsey, supra note 3, at 8.
[12] See Horsey, supra note 3, at 9; P.M. v. T.B., 907 N.W.2d 522, 531–32 (Iowa 2018) (noting that some states prohibit all surrogacy, while others restrict specific types of surrogacies or permits surrogacy subject to regulation).
[13] See Chittom & Wagner, supra note 1; Horsey, supra note 3; In re Baby M, 109 N.J. 396, at 411 (1988) (invalidating the surrogacy contract because it was in conflict with the public policy).
[14] Chittom & Wagner, supra note 1.
[15] See The New York State Child‑Parent Security Act: Gestational Surrogacy, N.Y. State Dep’t of Health (May 2025), https://www.health.ny.gov/community/pregnancy/surrogacy/ [https://perma.cc/4677-86X7].
[16] Chittom & Wagner, supra note 1.
[17] In re Baby M, 109 N.J. 396 (1988).
[18] Id. at 411.
[19] Id.
[20] Chittom & Wagner, supra note 1; see also P.M. v. T.B., 907 N.W.2d 522, 531, 533 (Iowa 2018) (noting the lack of legislative action regarding gestational surrogacy agreements).
[21] See The New York State Child‑Parent Security Act: Gestational Surrogacy, supra note 15.
[22] Gestational Surrogates’ Bill of Rights, N.Y. State Dep’t of Health (June 2023), https://www.health.ny.gov/community/pregnancy/surrogacy/surrogate_bill_of_rights.htm [https://perma.cc/Q68F-NXLR].
[23] Ferrukh Faruqui, Opinion: Putting a Pause on the Practice of Surrogacy, Undark (Oct. 20, 2025), https://undark.org/2025/10/20/opinion-surrogacy-health-risks/ [https://perma.cc/J7ZR-CYLR].
[24] Id.
[25] Klotz, supra note 2.
[26] Schurr, supra note 1; Horsey, supra note 3, at 8, 11.
[27] Chittom & Wagner, supra note 1; Horsey, supra note 3, at 5–7, 12.
[28] Schurr, supra note 1.
