Dartmouth College v. Woodward

The Court held that a corporate charter is a contract protected by the Contract Clause from state impairment.

Overview

New Hampshire's legislature sought to convert private Dartmouth College into a public university after a trusteeship dispute. The old trustees sued, and Chief Justice Marshall held that the college's charter was a contract whose obligations the state could not unilaterally alter. The decision shielded private corporations from political interference, encouraging investment in chartered enterprises by assuring investors that their rights would survive changes in state politics. Dartmouth drew a lasting line between public and private institutions and helped make the business corporation a durable feature of American economic life.