Skip to comments.The Supreme Court Will Soon Decide: Uphold The Contract Clause Or Let It Die?
Posted on 03/13/2018 10:25:57 AM PDT by reaganaut1
In the first century or so of our national existence, one of the Constitutions provisions that was most often at issue was the Contract Clause. But following New Deal era decisions that eviscerated it, hardly any cases have since centered on it. The clause has been so forgotten that few Americans even know its there, in Article I, Section 10, reading, No state shall pass any law impairing the obligation of contracts.
The Constitutions drafters had good reason to include that language, meant to assure people that contracts would be inviolate. During the years under the Articles of Confederation, the states frequently undermined the confidence in contracts by enacting debt relief laws and revoking business charters. The first state law to be declared invalid by a federal court was a Rhode Island statute that let a politically connected state businessman out of his debts. Unless contracts were reliable, the Founders knew, the new nations commercial development would itself be impaired.
American courts took the Contract Clause very seriously until the New Deal. Professor James W. Elys recent book The Contract Clause: A Constitutional History (which I reviewed here) recounts the way the Marshall Court esteemed the clause and how it held up quite well (although with some erosion) during the Progressive era.
Then came the Great Depression.
Just as the Court turned its back on other cornerstones of limited government and the rule of law during that era, so did it jettison the once-formidable Contract Clause. In a 1934 decision, Home Building & Loan Association v. Blaisdell, Chief Justice Hughes decided that during the emergency of the Depression, the Court had to allow legislatures to impose a moratorium on mortgage foreclosures.
(Excerpt) Read more at forbes.com ...
This is a lot of inside-baseball stuff to me. I don’t see contracts being nullified outside the bankruptcy process, which is as it should be. If you want to get excited about something, how about we start enforcing the Enumerated Powers clause?
The refusal to honor the contract clause is one of the main reasons for the litigation explosion in the United States.
People are not allowed to sign binding contracts, for example to insure they will not sue.
This is third world stuff the U.S. has been doing.
But, if will take a lot of education to keep people from signing a contract with a lot of fine print, based on the hard sell of a salesman.
Look at the insanity people get into with Time-Shares.
Forbes is a business-oriented publication, so I could see this topic being of supreme importance to their readers.
It says the states can’t invalidate contracts. The federal, national government decided they could? Is that what happened?
The glaring, obvious, turd-in-the-punchbowl at the time example was the repudiation of gold-clause contracts in real estate leases, reneging on government gold bonds, the nationalization and/or outlawing posession of monetary gold.
The government actually criminalized a basic element of the periodic table. But, they investigated themselves, and found no wrongdoing.
The Supreme Court is obligated to protect and defend reasonable interpretations of the Constitution.
And if the states dont like what the Constitution says then they can appropriately amend the Constitution.
Note that many constitutional amendments were inspired by a Supreme Court ruling.
Obama nullified the General Motors contract with me to pay off loans in the form of corporate bonds that were part of my retirement portfolio
That was not white of him
I am not sure they can overturn the status quo now. For one thing, a lot of the financial market would collapse as people sue to enforce “nullified” contracts.
It needs to be applied to premarital contracts.
Contract law. Part of the actual, supreme law of the land.
SCOTUS has _no_ authority to amend USConstitution, at all.
Either SCOTUS finds USConstitution to be supreme over all politics, policy and unlawful law,
or SCOTUS is an enemy of USConstitution.
USConstitution, defend it, or you are an enemy of it.
We The People can lawfully, amend it using provisions, therein. Mere congressional _law_ or policy do not amend it.
The Contracts Clause is essential to the survival of free markets. When parties can go to court and demand that the court modify valid contracts because one party changed his mind, or the government, on its own motion decides to rewrite private contracts, we take a quantum leap toward tyranny.
obama and the GM/UAW bailout/bankruptcy
The interjection of the government, via FEMA, is precisely what the revolting Dodd-Frank law implemented. There is no constitutional authority for the government to interject themselves into the contractual agreement between a lending institution and a homeowner. However, Dodd-Frank directed that this be done, and lenders had to implement it.
My home was devastated by flood, for which I had private flood insurance. That is a contractual agreement. I have a contract with a lender, called a mortgage, also a contractual document. The government interjected themselves directly into both of these private contracts. Following the flood, the proceeds from the insurance I paid for were held, citing Dodd-Frank, and I had to submit voluminous documentation to have even one dollar released to me for restoration.
This administration was to get congress to repeal Dodd-Frank. I have written my congressman and my senators. Crickets.
Dodd-Frank is still law.
Agreed, along with the 10th amendment.
Constitution, Article 1 Section 10:
“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.”
Sounds like we should still be using gold and silver backed currency and not this fiat crap.
I don’t recall Article 1 Section 10 being repealed.
The Supreme Court upheld Obamacare - which is a violation of ths Contract Clause.
No state can make anything but gold and silver legal tender; Congress can. No state can impair the obligation of contracts; Congress can (otherwise, all federal bankruptcy law would be unconstitutional).
And today, we have ads blaring out that they have info “the credit card companies don’t want you to know - you don’t have to pay off your debts....”
“I dont see contracts being nullified outside the bankruptcy process, which is as it should be.”
No? Say I want to contract you to work for me at a rate of $1 per hour, and for some reason you are amenable and agree to the contract. How about then?
How about when family court judges decide to void prenuptial contracts about division of assets because the judge decides on a whim that the contract is “unfair”?
Or how about when a court decides that companies whose employment contracts limited health benefits to spouse and children must now extend those to homosexual partners?
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