Cite as: 518 U. S. 839 (1996)
Opinion of Souter, J.
other, less remarkable possibility actually found by both courts that construed these contracts: that the Government agreed to do something that did not implicate its sovereign powers at all, that is, to indemnify its contracting partners against financial losses arising from regulatory change. We accordingly hold that the Federal Circuit correctly refused to apply the unmistakability doctrine here. See 64 F. 3d, at 1548. There being no need for an unmistakably clear "second promise" not to change the capital requirements, it is sufficient that the Government undertook an obligation that it subsequently found itself unable to perform. This conclusion does not, of course, foreclose the assertion of a defense that the contracts were ultra vires or that the Government's obligation should be discharged under the common-law doctrine of impossibility, see infra, at 888-891, 904-910, but nothing in the nature of the contracts themselves raises a bar to respondents' claims for breach.32
32 Justice Scalia offers his own theory of unmistakability, see post, at 919-922, which would apply in a wide range of cases and so create some tension with the general principle that the Government is ordinarily treated just like a private party in its contractual dealings, see, e. g., Perry v. United States, 294 U. S., at 352, but which would be satisfied by an inference of fact and therefore offer a only a low barrier to litigation of constitutional issues if a party should, in fact, prove a governmental promise not to change the law. Justice Scalia seeks to minimize the latter concern by quoting Holmes's pronouncement on damages as the exclusive remedy at law for breach of contract, see post, at 919-920, but this ignores the availability of specific performance in a nontrivial number of cases, see, e. g., Restatement (Second) of Contracts §§ 357-359, including the Contract Clause cases in which the unmistakability doctrine itself originated. See, e. g., Carter v. Greenhow, 114 U. S. 317, 322 (1885) (stating that "the only right secured" by the Contract Clause is "to have a judicial determination, declaring the nullity of the attempt to impair [the contract's] obligation"); Note, Takings Law and the Contract Clause: A Takings Law Approach to Legislative Modifications of Public Contracts, 36 Stan. L. Rev. 1447, 1462 (1984) (suggesting that "analysis under the contract clause is limited to declaring the statute unconstitutional. The provision does not authorize the courts to award damages in lieu of requiring the state to adhere to the original terms of the contract"); cf. C. Fried, Contract as Promise 117-
887
Page: Index Previous 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 NextLast modified: October 4, 2007