Footnotes

1.  Jump to essay-1See Ogden v. Saunders, 25 U.S. (12 Wheat.) 213, 266–67 (1827) (If it were proper to prohibit a State legislature to pass a retrospective law, which should take from the pocket of one of its own citizens a single dollar, as a punishment for an act which was innocent at the time it was committed; how much more proper was it to prohibit laws of the same character precisely, which might deprive the citizens of other States, and foreigners, as well as citizens of the same State, of thousands, to which, by their contracts, they were justly entitled, and which they might possibly have realized but for such State interference?); see also Home Bldg. & Loan Ass’n v. Blaisdell, 290 U.S. 398, 431 (1934) (The obligations of a contract are impaired by a law which renders them invalid, or releases or extinguishes them[,] and impairment, as above noted, has been predicated on laws which without destroying contracts derogate from substantial contractual rights.) (citations omitted).
2.  Jump to essay-2U.S. Const. art. I, § 10, cl. 1. The Supreme Court has long considered contractual obligations to encompass both the express terms of an agreement and the underlying state law regarding interpreting and enforcing contracts upon which the parties relied when they made the contract. See U.S. Trust Co. v. New Jersey, 431 U.S. 1, 19–20 & n.17 (1977) (The obligations of a contract long have been regarded as including not only the express terms but also the contemporaneous state law pertaining to interpretation and enforcement.). Such underlying state law may include the law of the place in which the contract was made and the place where it will be performed. Id. Thus, the obligation of a contract refers to laws that affect its validity, construction, discharge and enforcement. Blaisdell, 290 U.S. at 429–30 (quoting Von Hoffman v. City of Quincy, 71 U.S. (4 Wall.) 535, 550 (1866)). States have long regulated the formation, interpretation, enforcement, and performance of contracts. Ogden, 25 U.S. (12 Wheat.) at 286 (But to assign to contracts, universally, a literal purport, and to exact for them a rigid literal fulfilment, could not have been the intent of the constitution. It is repelled by a hundred examples. Societies exercise a positive control as well over the inception, construction, and fulfilment of contracts, as over the form and measure of the remedy to enforce them.).
3.  Jump to essay-3U.S. Trust Co., 431 U.S. at 17. Notably, the Clause does not apply to acts of the Federal Government. Sinking-Funds Cases, 99 U.S. 700, 718–19 (1878) (acknowledging that the Federal Government is prohibited from depriving persons or corporations of property without due process of law but is not included within the constitutional prohibition which prevents States from passing laws impairing the obligation of contracts); see also Samuel R. Olken, Charles Evans Hughes and the Blaisdell Decision: A Historical Study of the Contract Clause, 72 Or. L. Rev. 513, 519 (1993) (discussing how the Contract Clause differed from the Northwest Ordinance in that it barred only state impairment of contract obligations).
4.  Jump to essay-4Blaisdell, 290 U.S. at 434–35 (observing that a state continues to possess authority to safeguard the vital interests of its people[;] . . . [t]his principle of harmonizing the constitutional prohibition with the necessary residuum of state power has had progressive recognition in the decisions of this Court); see also W.B. Worthen Co. v. Thomas, 292 U.S. 426, 433 (1934) ([L]iteralism in the construction of the contract clause . . . would make it destructive of the public interest by depriving the State of its prerogative of self-protection.).
5.  Jump to essay-5See Blaisdell, 290 U.S. at 428 ([T]he prohibition is not an absolute one and is not to be read with literal exactness like a mathematical formula.); U.S. Trust Co., 431 U.S. at 17 ([T]he Contract Clause does not prohibit the States from repealing or amending statutes generally, or from enacting legislation with retroactive effects.); El Paso v. Simmons, 379 U.S. 497, 506–09 (1965) ([I]t is not every modification of a contractual promise that impairs the obligation of contract under federal law . . . . The State has the ‘sovereign right . . . to protect the . . . general welfare of its people . . . . Once we are in this domain of the reserve power of a State we must respect the wide discretion on the part of the legislature in determining what is and what is not necessary.’) (quoting E. N.Y. Sav. Bank v. Hahn, 326 U.S. 230, 232–33 (1945)); Trs. of Dartmouth Coll. v. Woodward, 17 U.S. (4 Wheat.) 518, 628–30 (1819) (Taken in its broad unlimited sense, the [Contract Clause] would be an unprofitable and vexatious interference with the internal concerns of a State . . . . [T]he framers of the constitution could never have intended to insert in that instrument a provision so unnecessary, so mischievous, and so repugnant to its general spirit.). Notably, other constitutional provisions may limit a state’s power to enact retroactive legislation that, for example, imposes a punishment (e.g., a bill of attainder or ex post facto law). See U.S. Trust Co., 431 U.S. at 17 n.13. For example, the Contract Clause generally does not prevent a state from altering laws governing state offices or civil institutions, or from enacting laws on the subject of divorce. Trs. of Dartmouth Coll., 17 U.S. (4 Wheat.) at 627–30 (That the framers of the constitution did not intend to retrain the States in the regulation of their civil institutions, adopted for internal government, and that the instrument they have given us, is not to be so construed, may be admitted. The provision of the constitution never has been understood to embrace other contracts, than those which respect property, or some object of value, and confer rights which may be asserted in a court of justice. It never has been understood to restrict the general right of the legislature to legislate on the subject of divorces.). The Court has cautioned, however, that the clause should not be interpreted to imply that parties may contract to obtain immunity from state regulation. U.S. Trust Co., 431 U.S. at 22 (The States must possess broad power to adopt general regulatory measures without being concerned that private contracts will be impaired, or even destroyed, as a result. Otherwise, one would be able to obtain immunity from state regulation by making private contractual arrangements.); see also Hudson Cnty. Water Co. v. McCarter, 209 U.S. 349, 357 (1908) (One whose rights, such as they are, are subject to state restriction, cannot remove them from the power of the State by making a contract about them.).
6.  Jump to essay-6U.S. Trust Co., 431 U.S. at 22 (Legislation adjusting the rights and responsibilities of contracting parties must be upon reasonable conditions and of a character appropriate to the public purpose justifying its adoption.). A court’s evaluation of the reasonableness of state legislation that affects private contract rights may include consideration of the background circumstances that motivated the state law’s adoption and the measure’s duration, among other factors. See Blaisdell, 290 U.S. at 444–47. Courts accord legislatures some deference in determining necessity and reasonableness of such legislation. U.S. Trust Co., 431 U.S. at 22–23.
7.  Jump to essay-7See Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 241 (1978) (characterizing the Contract Clause as perhaps the strongest single constitutional check on state legislation during our early years as a Nation); U.S. Trust Co., 431 U.S. at 15 (Over the last century, however, the Fourteenth Amendment has assumed a far larger place in constitutional adjudication concerning the States [than the Contract Clause].). As noted in McDonald v. Chicago, 561 U.S. 742 (2010), during the 1960s, the Court shed any reluctance to hold that rights guaranteed by the Bill of Rights met the requirements for protection under the Due Process Clause. The Court eventually incorporated almost all of the provisions of the Bill of Rights. Only a handful of the Bill of Rights protections remain unincorporated. Id. at 764–65; see e.g., Duncan v. Louisiana, 391 U.S. 145, 161–62 (1968) (holding that the Fourteenth Amendment’s Due Process Clause incorporates the Sixth Amendment right to trial by jury and makes it applicable to the states). For a discussion of the limitations that the Due Process Clause imposes on states with respect to retroactive deprivations of a life, liberty, or property interest, see . In addition, the Dormant Commerce Clause doctrine, although not specifically directed at protecting contract rights, limits state power by restraining state authority to regulate interstate commerce. For more, see ArtI.S8.C3.7.1 Overview of Dormant Commerce Clause.
8.  Jump to essay-8Cf. Trs. of Dartmouth Coll., 17 U.S. (4 Wheat.) at 628–30 (That anterior to the formation of the constitution, a course of legislation had prevailed in many, if not in all, of the States, which weakened the confidence of man in man, and embarrassed all transactions between individuals, by dispensing with a faithful performance of engagements.); Sturges v. Crowninshield, 17 U.S. (4 Wheat.) 122, 199, 203 (1819) ([T]he prevailing evil of the times, which produced this clause in the constitution, was the practice of emitting paper money, of making property which was useless to the creditor a discharge of his debt, and of changing the time of payment by authorizing distant instalments.).
9.  Jump to essay-9Blaisdell, 290 U.S. at 427–28.
10.  Jump to essay-10The Federalist No. 44 (James Madison).
11.  Jump to essay-11The Federalist No. 7 (Alexander Hamilton) (Laws in violation of private contracts, as they amount to aggressions on the rights of those States whose citizens are injured by them, may be considered as another probable source of hostility [among the states].).
12.  Jump to essay-12See, e.g., Trs. of Dartmouth Coll., 17 U.S. (4 Wheat.) at 627, 654 (striking down as unconstitutional a state law that interfered with a private corporate charter established under state law); Sturges, 17 U.S. (4 Wheat.) at 208 (holding a bankruptcy law that allowed insolvent debtors to obtain the discharge of their debts by surrendering their property violated the Contract Clause); Fletcher v. Peck, 10 U.S. (6 Cranch) 87, 127, 135–39 (1810) (interpreting the Contract Clause to prohibit a state from breaching its own contracts by rescinding a land grant); see also James W. Ely, Jr., The Contract Clause: A Constitutional History 1 (2016) (Under the leadership of John Marshall, the Supreme Court construed the provision expansively, and it rapidly became the primary vehicle for federal judicial review of state legislation before the adoption of the Fourteenth Amendment. Indeed, the contract clause was one of the most litigated provisions of the Constitution throughout the nineteenth century . . . .).
13.  Jump to essay-13Fletcher, 10 U.S. (6 Cranch) at 137.
14.  Jump to essay-14See Trs. of Dartmouth Coll., 17 U.S. (4 Wheat.) at 644, 652–54. As the Court noted in Blaisdell, the Clause has been held not to encompass a marriage contract as it pertains to divorce laws, a judgment rendered upon a contract, or a state’s waiver of sovereign immunity in general legislation. Blaisdell, 290 U.S. at 429 n.8.
15.  Jump to essay-15See, e.g., W. River Bridge Co. v. Dix, 47 U.S. (6 How.) 507, 535–36 (1848) (upholding a state’s authority to use the power of eminent domain to take a company’s toll bridge franchise in order to construct a public highway as not violative of the Contract Clause).
16.  Jump to essay-16Ely, supra note 12, at 1 (Over time . . . courts carved out several malleable exceptions to the constitutional protection of contracts . . . thereby weakening the protection of the contract clause and enhancing state regulatory authority.).
17.  Jump to essay-17290 U.S. 398 (1934).
18.  Jump to essay-18Id. at 444–48.
19.  Jump to essay-19Id. at 415–16, 424. The law prevented the mortgagee from obtaining possession during that time. Id. This right ran contrary to existing contracts, which granted the lender the right to foreclose. Id. at 424–25.
20.  Jump to essay-20Allied Structural Steel Co v. Spannaus, 438 U.S. 234, 241 (1978) (quoting Manigault v. Springs, 199 U.S. 473, 480 (1905)).
21.  Jump to essay-21See, e.g., Keystone Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470, 474–78, 502, 506 (1987) (upholding a Pennsylvania safety and environmental law—which prohibited mining that would damage existing structures, such as public buildings and homes, by eliminating underground support—against a Contract Clause challenge where the challengers argued the law nullified the surface owner’s contractual waiver of liability for damage to the surface estate from coal mining); Exxon Corp. v. Eagerton, 462 U.S. 176, 178–79, 196 (1983) (upholding an Alabama law that increased the severance tax on oil and gas extracted from wells located in the state—which the state imposed on producers at the time of severance and which exempted the owners of royalty interests but forbid producers from passing the tax increase on to purchasers or consumers—against a Contract Clause challenge alleging the law impaired the obligations of oil and gas producers’ contracts with royalty owners and consumers).
22.  Jump to essay-22Spannaus, 438 U.S. at 242, 250 (If the Contract Clause is to retain any meaning at all, . . . it must be understood to impose some limits upon the power of a State to abridge existing contractual relationships, even in the exercise of its otherwise legitimate police power.).
23.  Jump to essay-23U.S. Trust Co. v. New Jersey, 431 U.S. 1, 26, 32 (1977) (If a State could reduce its financial obligations [by breaching a legislative covenant to protect private bondholders] whenever it wanted to spend the money for what it regarded as an important public purpose, the Contract Clause would provide no protection at all.).
24.  Jump to essay-24Spannaus, 438 U.S. at 247–50.