Proprietors of the Charles River Bridge v. the Proprietors of the Warren Bridge

In the past, the Court had usually defined the Contract Clause broadly, defending the interests of corporations. In Charles River Bridge, however, the Court ruled that a state charter did not grant a company any implicit rights; the exact terms of the contract had to be stated. In a larger sense, the Court also recognized that at times a state's power to promote the public welfare outweighed the rights of a corporation.

Article I, section 10 of the Constitution says, in part, that no state shall pass any law "impairing the obligations of contracts." Although perhaps not one of the best-known constitutional passages among most Americans, the Contract Clause entered into more Supreme Court decisions during the nineteenth century than any other part of the Constitution.

Economic arrangements bound by contract and then altered or revoked by the states frequently found their way to the High Court. During the tenure of Chief Justice Marshall, the Court tended to side with the interest of corporations over the states. Marshall defined the Contract Clause broadly, and he wrote a series of important decisions reflecting that interpretation. In Fletcher v. Peck (1810), Marshall ruled a state could not revoke a land grant--even if there was fraud involved. Later, Marshall said a charter given to a corporation was the same as a contract and received protection under the Contract Clause, so the state of New Hampshire could not alter a charter granted to Dartmouth College (Dartmouth College v. Woodward [1819]).

By 1837, however, Chief Justice Marshall had passed away, and a new man held his position. Roger Taney had been appointed by Andrew Jackson in 1835, and he shared some of Jackson's Democratic politics, including an affinity for states' rights. In one of the first decisions written by Taney, he showed the Court would now take a different approach to the Contract Clause and the economic assumptions that guided Marshall's interpretation of it.