The Supreme Court narrowed the scope of the application of the contracts clause to public contracts.

Early in U.S. history, the Supreme Court determined that both public and private contracts were covered by the Constitution’s ban on the impairment of contracts. This proposition was harder to maintain for public contracts. John B. Stone’s corporation was given a Mississippi charter to operate a lottery, but the next year, Mississippi adopted a constitution banning all lotteries. The state ordered Stone to cease operating his lottery, and the Mississippi high court upheld the order. The Supreme Court unanimously held for Mississippi, distinguishing this abrogation of contract by arguing that a state’s police power controlled lotteries and that no state could contract away its police power, generally following the logic of West River Bridge Co. v. Dix[case]West River Bridge Co. v. Dix[West River Bridge Co. v. Dix] (1848). It also ruled that state charters authorizing lotteries were either licenses or privileges but not contracts. Justice Morrison R. WaiteWaite, Morrison R.;Stone v. Mississippi[Stone v. Mississippi] wrote the unanimous opinion for the Court, and Justice Ward Hunt did not participate.Contracts clause;Stone v. Mississippi[Stone v. Mississippi]

Contract, freedom of

Contracts clause

West River Bridge Co. v. Dix