[2] In 1769, King George III of Great Britain granted a charter to Dartmouth College that spelled out the purpose of the school, set up the structure to govern it, and gave it land.

In 1816, over 30 years after the conclusion of the American Revolution, the New Hampshire legislature altered Dartmouth's charter in order to reinstate the College's deposed president, place the ability to appoint positions in the hands of the governor, add new members to the board of trustees, and create a state-controlled board of visitors with veto power over trustee decisions.

[3] The decision, handed down on February 2, 1819, ruled in favor of the college and invalidated the act of the New Hampshire Legislature, which in turn allowed Dartmouth to continue as a private institution and take back its buildings, seal, and charter.

Marshall's opinion emphasized that the term "contract" referred to transactions involving individual property rights, not to "the political relations between the government and its citizens.

After the Dartmouth decision, many states wanted more control, so they passed laws or constitutional amendments giving themselves the general right to alter or revoke at will, which the courts found to be a valid reservation.

[8][9][10] The traditional view is that this case is one of the most important Supreme Court rulings, strengthening the Contracts Clause and limiting the power of the States to interfere with private charters, including those of commercial enterprises.