Compact theory of government: states voluntarily entered into an agreement with the national government in signing the constitution. Both sides must follow the rules established in the constitution. Nullification: the power of the states to declare unconstitutional laws void. The power of Nullification is NECESSARY, because otherwise: --The federal governmet will take too much power --In response, states will want to leave the Union So nullification is a necessary ‘relief valve’ for the tensions of federalism. Or put another way, it’s like a check on the national government by the states.