In United States constitutional theory, compact theory is a rejected[1] interpretation of the Constitution which asserts 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.[2] 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. Compact theory has never been upheld by the courts.
Compact theory featured heavily in arguments by southern political leaders in the run up to the American Civil War that states had a right to nullify federal law and to secede from the union. It also featured in southern arguments opposing desegregation after the 1954 Supreme Court decision in Brown v. Board of Education.[3] The theory also entered into the Mexico–United States border crisis of the early 2020s.