What does the Contract Clause prohibit?

What does the Contract Clause prohibit?

• A. Retroactively impairing contractual rights
• B. Denying due process to individuals
• C. Imposing taxes on private commerce
• D. Establishing a national church

Answer: (A)

The Contract Clause bars states from retroactively impairing the obligation of contracts. In other words, once a contract exists, a state may not pass laws after the fact that weaken, alter, or void that contractual obligation. This protection aims to preserve the expectations and terms agreed upon in contracts against sudden state changes. Context helps: this clause sits in Article I, Section 10, and originally targeted state laws rather than federal actions. It doesn’t address due process (which is about fair procedures), taxation on private commerce (that falls under the Commerce and Taxing powers), or establishment of a national church (addressed by the Establishment Clause).

The Contract Clause bars states from retroactively impairing the obligation of contracts. In other words, once a contract exists, a state may not pass laws after the fact that weaken, alter, or void that contractual obligation. This protection aims to preserve the expectations and terms agreed upon in contracts against sudden state changes.

Context helps: this clause sits in Article I, Section 10, and originally targeted state laws rather than federal actions. It doesn’t address due process (which is about fair procedures), taxation on private commerce (that falls under the Commerce and Taxing powers), or establishment of a national church (addressed by the Establishment Clause).