About: Compact theory

In United States constitutional theory, compact theory is an interpretation of the Constitution which holds that the United States was formed through a compact agreed upon by all the states, and that the federal government is thus a creation of the states. Consequently, under the theory states are the final arbiters over whether the federal government has overstepped the limits of its authority as set forth in the compact. Compact theory contrasts with contract theory, which holds that the United States was formed with the consent of the people—rather than the consent of the states—and thus the federal government has supreme jurisdiction over the states.