United States v. Winstar Corp

In United States v. Winstar Corp., 518 U.S. 839, 116 S. Ct. 2432, 135 L. Ed. 2d 964 (1996), the Court recognized that when the government is acting as a sovereign, it is not liable for contract damages under the sovereign acts doctrine. That doctrine provides that where the government's subsequent action which breaks or modifies the contract was "merely incidental to the accomplishment of a broader governmental objective," the government action will supersede the contract. Ibid. On the other hand, if the subsequent legislation promotes the government's self-interest in avoiding its contractual obligations, then the sovereign acts doctrine may be unavailable as a defense. Ibid.