What is the scope of the contracts clause of the US Constitution?
The Contracts Clause of the US Constitution is part of the Fifth Amendment which states that ‘no state shall pass any law impairing the obligation of contracts’. This clause helps to protect the sanctity of contracts between two parties, ensuring that a contract made between them is enforced both by the state and by the federal government. The scope of the Contracts Clause is broad in that it applies to any contract made between two or more parties, including businesses, individuals, and organizations. This clause has been used to affirm the rights of individuals and businesses to enter into contracts, as well as to challenge government intrusions into those contracts. Its purpose is to ensure that if a valid contract is made between two parties, then it will be enforced regardless of changes in state and federal laws. As such, it is a critical component in the regulation of contracts in Arizona and the rest of the United States. The Courts have interpreted the scope of the Contracts Clause to include “all contracts, whether express or implied”, meaning that even contracts that are not in writing, such as verbal agreements, are still protected. This also includes contracts that are made between the state and its citizens, such as within state-run services. As such, the scope of the Contracts Clause is quite broad and serves an important purpose in regulating contracts in the US.
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