It implies that contracts have no obligation, except the laws that are made for enforcing them.
Lysander Spooner
The Public Record
Lysander Spooner was an American abolitionist, entrepreneur, lawyer, essayist, natural rights legal theorist, pamphleteer, political philosopher, and writer often associated with the Boston anarchist tradition.
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But this pretence, it will be seen, utterly discards the idea that contracts have any natural obligation.
They hold that, if a State law forbids any contract to be made, such a contract can then have no obligation; and that, consequently, no State law can impair an obligation that never existed.
They say this of all contracts, that are arbitrarily forbidden; although, naturally and intrinsically, they have as valid an obligation as any others that men ever enter into, or as any that courts enforce.
If this principle were acknowledged, we should have no occasion, and no use, for insolvent or bankrupt laws.
If, therefore, a debtor, at the time his debt becomes due, pays to the extent of his ability, and has been guilty of no fraud, fault, or neglect, during the time his debt had to run, he is thenceforth discharged from all legal obligation.
When the mortgaged property is exhausted, the debt is cancelled; there is no other property that the contract binds.
The only force, function, or effect of a legal contract is to convey and bind rights of property.
If the natural obligation of contracts were known, and recognized as law, we should have no need of insolvent or bankrupt laws.
All State insolvent laws, so-called, that distribute a debtor's property equally among his creditors, are laws impairing the natural obligation of his contracts.
Such a law is plainly a law impairing the natural obligation of their contracts.
For a law to say that, if they make any profits, they may put them all into their own pockets, but that, if they make a loss, they may throw it upon their creditors, is an absurdity and an outrage.