Under the contract clause, states cannot enact laws that impact rights and duties under existing contracts. The limitation on state action impairing contracts has not been given a literal application.

Solved

The Contract Clause

Question 53

Multiple Choice

The contract clause:

A) applies to the federal government.
B) allows a state to impose new prices on existing contracts.
C) prohibits the federal government from contracting with a state government.
D) limits a state's ability to impair the obligation of a contract.
E) allows a state to enact laws that impact rights under existing contracts.

Correct Answer: