Snow Crystals Inc.,a leading construction company,has constructed a skate park on government land after signing a leasing agreement with the state government.A few years later,the state authority sanctioned the Nightingale Bridge Company to build a bridge that would use the land where the skate park is already constructed.The proprietors of Snow Crystals claim that the state authority has violated the leasing agreement.Which of the following is most likely to be applied in this case between Snow Crystals Inc.and the state government?

Question

Quizplus · Accepted Answer

In this case between Snow Crystals Inc. and the state government, the contract clause is most likely to be applied. 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. In this case, the state authority had impaired an existing contract with Snow Crystals Inc. by entering into a new contract with the Nightingale Bridge Company.