The Corner

Regulatory Policy

We Need to Revive the Contracts Clause

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In this Law & Liberty essay, Professor John McGinnis of Northwestern Law School, argues that the eviction moratoria are unconstitutional. Under the Constitution, the states are forbidden to enact laws that “impair the obligation of contracts.” McGinnis rightly says that if a moratorium allowing renters to avoid paying amounts they have contractually agreed to pay doesn’t violate that clause, it’s hard to think what would.

The problem here goes back to the New Deal, when the Supreme Court in 1934 upheld a Minnesota law that similarly interfered with rental housing contracts in Homeowners Association v. Blasidell. That was one of those terrible decisions that tore apart the Constitution because a majority on the Court thought that government had to have new power because of the Depression. It was a bad decision then and it sets a bad precedent.

In an ideal world, the current Court would overrule Blaisdell and revive the Contracts Clause. In an even more ideal world, we’d amend the Constitution so that the federal government is also forbidden to interfere with existing contracts, or to mandate that contracts must be written to suit the sensibilities of politicians.

George Leef is the the director of editorial content at the James G. Martin Center for Academic Renewal.

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