The constitutional text

Article I · Section 10

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No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it’s inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress.

No State shall, without the Consent of Congress, lay any Duty of Tonnage, keep Troops, or Ships of War in time of Peace, enter into any Agreement or Compact with another State, or with a foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will not admit of delay.

Source: National Constitution Center edition. Original wording is preserved; commentary explains historical and superseded provisions.

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Article I, Section 10, Clause 1h

State laws and the obligation of contracts

Current text
or Law impairing the Obligation of Contracts,

What it means

States may not pass laws impairing contractual obligations. The clause protects legal commitments against certain forms of legislative interference rather than guaranteeing that every private promise is enforceable under every circumstance.

Historical setting

Federalist 44 linked the restriction to restoring confidence in transactions after disruptive state policies. It stands alongside monetary restrictions because changing payment rules and changing contractual duties can similarly undermine expectations.

What it does

The provision is directed at state lawmaking, while Congress has a separate bankruptcy power. Its application involves the character and degree of impairment and the public authority states retain to govern.

Debate & interpretation

The enduring problem is reconciling reliable promises with legitimate regulation and emergency responses. Neither treating contracts as wholly immune from government nor treating them as revocable whenever politically convenient captures that tension adequately.

A common misreading

The Contracts Clause is not a universal prohibition on all regulation that affects a contract’s profitability or enforcement.

Think it through

When should reliance on a legal promise constrain later democratic choices about economic policy?

Follow the connection

Sources & further reading

Original Madison Center commentary. Explanations distinguish the text, historical context, and interpretive disagreements.

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