I have the following code using a normal data context which works great:

var dc = new myDataContext();
Contract.Assume(dc.Cars!= null);
var cars = (from c in dc.Cars
            where c.Owner = 'Jim'
            select c).ToList();

However when I convert the filter to an extension method like this:

var dc = new myDataContext();
Contract.Assume(dc.Cars!= null);
var cars = dc.Cars.WithOwner('Jim');

public static IQueryable<Car> WithOwner(IQueryable<Car> cars, string owner)
{
    Contract.Requires(cars != null);
    return cars.Where(c => c.Owner = owner);
}

I get the following warning:

warning : CodeContracts: requires unproven: source != null