What did John Marshall rule in Fletcher v. Peck about the Yazoo Rescinding Act?

• A. Constitutional
• B. Remanded
• C. Unconstitutional
• D. Overturned by Congress

Answer: (C)

The main idea being tested is how the Contract Clause protects rights created by contracts from state actions that would impair them. In Fletcher v. Peck, John Marshall faced Georgia’s Yazoo land deals, where the state had granted vast tracts of land through actions later followed by a rescinding act meant to void those sales. Marshall concluded that once a contract has been formed and its terms have begun to operate, the state cannot retroactively undo those obligations with a new law. The Yazoo Rescinding Act attempted to erase the rights created by the original grants, which would impair the obligations of contract, so it was unconstitutional. This decision is a landmark example of the Supreme Court limiting state power to nullify contractual rights and establishing an early assertion of judicial review over state legislation in line with protecting contract rights.