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Wednesday, December 21, 2005

Constitutional Contract Law

Although we spend most of our time wondering what the common law says about contracts, another aspect of contract law is ruled by Article I, Section 10 of the Constitution, "No state shall ... pass any ...Law impairing the Obligation of Contracts."

James Ely of Vanderbilt has this to say in his abstract about an upcoming article:

Ely "This essay examines the origins and early construction of the contract clause of the Constitution. It points out that the contract clause must be understood in the context of the troubled economic circumstances of post-Revolutionary America. The clause, which was little debated at the Philadelphia convention, can be traced to language in the Northwest Ordinance of 1787. This paper focuses on the contested issue of whether the framers intended the clause to cover only contracts between private parties or to extend to public contracts between states and individuals. As asserted by the Progressive historians, it has long been the dominant position among scholars that Chief Justice John Marshall expanded the meaning of the contract clause when he ruled that the provision governed private contracts. This paper disputes that conventional wisdom and argues that the clause could fairly be construed to safeguard both public and private contracts from state abridgement. It gives attention to discussion at the state ratifying conventions as well as to the views of prominent members of the constitutional convention. The paper also considers pre-Marshall court cases that examined the meaning of the contract clause and the famous 1796 opinion letter by Alexander Hamilton. Although recognizing that it is difficult to establish a collective state of mind concerning the scope of the ban against contractual impairments, the paper concludes that there was ample support for the views later endorsed by the Marshall Court concerning the reach of this provision."

Ely, James W., "Origins and Development of the Contract Clause" (November 1, 2005). Vanderbilt Public Law Research Paper No. 05-36 http://ssrn.com/abstract=839904

[Stephen Safranek]

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