U.S. Constitution - Article I, Section 10

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Article I, Section 10 of the United States Constitution plays a key role in the American system of federalism by limiting the powers of the states. Under the Article, the states are forbidden from entering into treaties with foreign nations; instead reserving that power to the President of the United States, with the approval of two-thirds of the U.S. Senate. In addition, the states are forbidden from printing or coining their own money and from granting titles of nobility.

Article I itself lays out the design, function, and powers of the Congress – the legislative branch of U.S. government – and established many elements the vital separation of powers (checks and balances) between the three branches of government. In addition, Article I describes how and when U.S. Senators and Representatives are to be elected, and the process by which Congress enacts laws.

Specifically, the three clauses of Article I, Section 10 of the Constitution do the following:

Clause 1: the Obligations of Contracts Clause

“No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.”

The Obligations of Contracts Clause, typically called simply the Contracts Clause, prohibits the states from interfering with private contracts.

While the clause might be applied to many types of common business dealings today, the framers of the Constitution intended it mainly to protect contracts providing for the payments of debts. Under the weaker Articles of Confederation, the states were allowed to enact preferential laws forgiving the debts of particular individuals.

The Contracts Clause also prohibits the states from issuing their own paper money or coins and requires the states to use only valid U.S. money – “gold and silver Coin” – to pay their debts.

In addition, the clause prohibits the states from creating bills of attainder or ex-post facto laws declaring a person or group of persons guilty of a crime and prescribing their punishment without the benefit of a trial or judicial hearing. Article I, Section 9, clause 3, of the Constitution similarly prohibits the federal government from enacting such laws.

Today, the Contract Clause applies to most contracts such as leases or vendor contracts between private citizens or business entities. In general, the states may not obstruct or alter the terms of a contract once that contract has been agreed to. However, the clause applies only to the state legislatures and does not apply to court decisions.

Clause 2: the Import-Export Clause

“No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it's [sic] inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul [sic] of the Congress.”

Further limiting the powers of the states, the Export-Imports Clause prohibits the states, without the approval of the U.S. Congress, from imposing tariffs or other taxes on imported and exported goods in excess of the costs necessary for their inspection as required by state laws. In addition, the revenue raised from all import or export tariffs or taxes must be paid to the federal government, rather than the states.

In 1869, the U.S. Supreme Court ruled that the Import-Export Clause applies only to imports and exports with foreign nations and not to imports and exports between states.

Clause 3: the Compact Clause

“No State shall, without the Consent of Congress, lay any Duty of Tonnage, keep Troops, or Ships of War in time of Peace, enter into any Agreement or Compact with another State, or with a foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will not admit of delay.”

The Compact Clause prevents the states, without the consent of Congress, from maintaining armies or navies during a time of peace. Additionally, the states may not enter into alliances with foreign nations, nor engage in war unless invaded. The clause, however, does not apply to the National Guard.

The framers of the Constitution were keenly aware that allowing military alliances between the states or between the states and foreign powers would seriously endanger the union.

While the Articles of Confederation contained similar prohibitions, the framers felt that stronger and more precise language was needed to ensure the supremacy of the federal government in foreign affairs. Considering its need for it so obvious, the delegates of the Constitutional Convention approved the Compact Clause with little debate. 

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Longley, Robert. "U.S. Constitution - Article I, Section 10." ThoughtCo, Sep. 4, 2017, thoughtco.com/constitution-article-i-section-10-3322336. Longley, Robert. (2017, September 4). U.S. Constitution - Article I, Section 10. Retrieved from https://www.thoughtco.com/constitution-article-i-section-10-3322336 Longley, Robert. "U.S. Constitution - Article I, Section 10." ThoughtCo. https://www.thoughtco.com/constitution-article-i-section-10-3322336 (accessed December 16, 2017).