Constitutional Law II

Contract Clause

The Contract Clause covers all kinds of contracts. There does not have to be a debt.

Ogden said the government cannot impair previously made contracts, but it can set the terms of contracts for the future.

  • Marshall dissented in believing in an inherent right to contract which could not be limited by the government, even if it only affected future contracts.
  • In Lochner, this was justified under the Due Process Clause of the Fourteenth Amendment however, not the Contract Clause.

After the New Deal, the Supreme Court changed its mind and said that past contracts could be changed by the government if done to address general social or economic problems, but even this was tested under minimal scrutiny.

In 2018, the Court allowed past contracts to be altered even without addressing a general social or economic problem.

So basically, the Contract Clause has been judicially written out of Constitution.