Charters are written grants of rights and privileges. Magna Carta ( 1215 ) is the most famous charter in Anglo-American history. King John I in that document “granted to all freemen of our kingdom … all the underwritten liberties, to be had and held by them and their heirs, of us and our heirs forever.” Among those liberties included the royal promise that “[n]o freeman shall be taken or imprisoned, or dissesied or exiled or in any way destroyed … except by the lawful judgment of his peers or by the law of the land” ( in Graber and Gillman 2015, 59, 61 ). Many American colonies were established by charters. The Charter of Rhode Island and Providence Plantations declared that certain named persons had a right to form a government in that colony and granted all members of the colony certain rights. Corporate charters were common in the eighteenth and nineteenth centuries. Dartmouth College was created by a charter granted by King George III to Eleazar Wheelock, giving him the right to create an institution of higher learning. Many states have established charter schools, whose charters give school officials exemptions from certain state education laws.
Charters are distinct from constitutions or contracts, although they often bear a close relationship to both. Constitutions are the fundamental law of the land. Charters are exercises of power consistent with that fundamental law of the land. King John I could issue the Charter of the Forest ( 1217 ), which gave English subjects the right to gather wood in royal forests, because John had authority over that wood. Contracts consist of mutual promises. Charters may consist entirely of grants from the king. Rhode Islanders did not pay or make any promises to King Charles II in return for their charter.
Charters nevertheless often have constitutional and contractual status. Magna Carta began as a charter but by the seventeenth century was considered the best expression of the unwritten English constitution. When Edward Coke and other English parliamentary rebels of the seventeenth century, as well as Samuel Adams and other American revolutionaries of the eighteenth century, spoke of the constitutional principle of “no taxation without representation,” they justified their claim by pointing to the provision in Magna Carta that declared: “No scutage nor aid shall be imposed on our kingdom, unless by common counsel of our kingdom” ( Graber and Gillman 2015, 60 ). Unlike the other eleven colonies, Rhode Island and Connecticut did not write constitutions upon declaring independence. Instead, the royal charter establishing the colonies became the fundamental law of the land, minus all references to royal authority. In Dartmouth College v. Woodward, 17 U.S. 518 ( 1819 ), the Supreme Court of the United States held that a corporate charter was a contract and, consistent with the contracts clause in Article I, Section 10, could not be abridged.
Charters are frequently used in the United States to create and empower local governmental entities and units. The Charter of Takoma Park, Maryland, is typical. That document, which was issued by the Maryland legislature, begins by declaring the boundaries of that town and that the town is a political unit. The rest of the document describes how Takoma Park will be governed. The text creates government institutions and offices, declares how those institutions and offices will be staffed, and states what powers they will exercise. Most municipalities and counties in the United States have similar charters that outline their boundaries and establish a frame for local governance. Home-rule charters provide local governments with increased autonomy in legislating matters that affect the town and its governance.
Many private enterprises also have charters. Corporate charters, which are particularly common, enable persons to form various enterprises that enjoy limited liability. If Acme Corporation negligently starts a fire that burns down several homes, the displaced homeowners may sue the corporation for damages but, ordinarily, may not collect personal damages from stockholders or management of Acme. Among the numerous other forms of charters is a charter for a joint stock company, which enables an enterprise to issue stock (shares in the company) but does not provide stock owners with limited liability. Charters may be used for public or private ventures. Private corporations gain charters to pursue profit. A charter school may seek exemption from state seniority rules in order to provide children with a better education.
SEE ALSO Business and Governance ; Compact and Covenant ; Constitution ; Contract ; Founding ; Home Rule Charters ; Local Government ; Nonprofit Organizations ; Social Contract .
Charter of the City of Takoma Park, Montgomery County, Maryland. January 2, 2002. http://www.mdmunicipal.org/DocumentCenter/Home/View/188 .
Charter of Rhode Island and Providence Plantations. July 8, 1663. http://lonang.com/library/organic/1663-cri/ .
“Magna Carta.” In The Complete American Constitutionalism, Vol. 1, edited by Mark A. Graber and Howard Gillman, 58–63. New York: Oxford University Press, 2015.
Mark A. Graber
University of Maryland Carey School of Law