Interesting Article- Whatever Happened to the Contract Clause?

October 9th, 2009

SSRN-Whatever Happened to the Contract Clause? by James Ely (h/t Legal Theory Blog)

I ask myself this question all the time. The abstract:

This paper examines the decline of the contract clause in constitutional jurisprudence. Although the contract clause occupied a key and much-litigated place in constitutional law during the nineteenth century, the Supreme Court never read the clause with literal exactness. Over time the Court began to limit the reach of the contract clause in a number of ways. It early distinguished between contractual rights and the remedy available to enforce such rights. States retained some room to modify enforcement procedures. Thereafter the Court insisted upon strictly construing legislative grants and recognized an inalienable police power to protect the health, safety, and morals of the public. Moreover, the Supreme Court upheld rent control laws and mortgage moratorium measures as valid legislative responses to emergency conditions which trumpted contracts between individuals. In short, the Supreme Court recognized so many exceptions to the contract clause as to virtually read it out of the Constitution. The advent of New Deal constitutionalism in the late 1930s, which downplayed economic rights and affirmed broad regulatory authority, completed the effective destruction of the contract clause. Despite some fleeting interest in revitalizing the clause, and a few decisions enforcing contract clauses in state constitutions, this once-powerful provision remains at the fringe of modern constitutional law. The paper contends that the decline of the contract clause likely reflects a diminished faith in contractual bargaining and competitive markets.

If there is a Constitution in Exile, along with the Commerce Clause, the Public Use Clause, the Privileges or Immunities Clause, the 10th Amendment, most of the 2nd Amendment, the Contracts Clause sure as hell as a vaunted spot in this lofty crowd.

I am thrilled to see a serious scholar writing on the contracts clause. What Berman did for the Public Use Clause, Home Building and Loan Association v. Blaisdell did for the Contracts Clause. It sapped it of any meaning. Although there have been some cases bringing the Contracts Clause to the forefront, for the most part it has been ignored and trampled on.