Snow Crystals Inc., a leading skate park construction company, had constructed a skate park with a charter in the state of Alaska. A few years later, when the state authority sanctioned the Nightingale Bridge Company to build a bridge that would use the land where the skate park was already constructed, the proprietors of Snow Crystals claimed that the state authority had broken its agreement with Snow Crystals, and thus the contract had been violated. The owners claimed that the charter had implied exclusive rights to Snow Crystals Inc. Which of the following should be applied to enable Snow Crystals Inc. avail justice?

Question

Quizplus · Accepted Answer

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. Here, the state authority had impaired an existing contract with Snow Crystals Inc. by entering into a new contract with the Nightingale Bridge Company.