ArtI.S10.C1.6.3 Obligation Defined

Article I, Section 10, Clause 1:

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.

A contract is analyzable into two elements: the agreement, which comes from the parties, and the obligation, which comes from the law and makes the agreement binding on the parties. The concept of obligation is an importation from the civil law and its appearance in the Contract Clause is supposed to have been due to James Wilson, a graduate of Scottish universities and a civilian. Actually, the term as used in the Contract Clause has been rendered more or less superfluous by the doctrine that [t]he laws which exist at the time and place of the making of a contract, and where it is to be performed, enter into and form a part of it.1 Hence, the Court sometimes recognizes the term in its decisions applying the clause, and sometimes ignores it. In Sturges v. Crowninshield, 2 Chief Justice Marshall defined obligation of contract as the law that binds a party to perform his undertaking, but a little later the same year, in Dartmouth College v. Woodward, he set forth the points presented for consideration to be: 1. Is this contract protected by the constitution of the United States? 2. Is it impaired by the acts under which the defendant holds?3 The word obligation undoubtedly implies that the Constitution was intended to protect only executory contracts – i.e., contracts still awaiting performance – but this implication was rejected early on for a certain class of contracts, with immensely important result for the clause.

Footnotes

  1.  Jump to essay-1Walker v. Whitehead, 83 U.S. (16 Wall.) 314, 317 (1873); Wood v. Lovett, 313 U.S. 362, 370 (1941).
  2.  Jump to essay-217 U.S. (4 Wheat.) 122, 197 (1819); see also Curran v. Arkansas, 56 U.S. (15 How.) 304 (1853).
  3.  Jump to essay-317 U.S. (4 Wheat.) 518, 627 (1819).