Sovereign immunity (also known as governmental immunity) in American law was derived from the British common law doctrine that the King could do no wrong—and thus could not be sued. Sovereign immunity varies from state to state, but typically applies to state governments as well as the federal government.

But federal and state governments (generally the U.S. Congress and state legislatures) have the ability to waive their sovereign immunity. Waivers of sovereign immunity are usually included in state and federal statutes, and interpreted and applied by state and federal courts in court opinions.

For example, sovereign immunity protects the state and its various provisions of state government—including agencies, boards, hospitals, and universities—from liability and from suit—unless the immunity has been waived. Similarly, sovereign immunity protects political subdivisions—including counties, cities, and school districts—from liability and from suit—unless the immunity has been waived.

Thus, sovereign immunity encompasses two principles: (1) immunity from suit and (2) immunity from liability. Immunity from suit bars a suit against the state or other governmental entity unless the Legislature expressly gives consent. Immunity from liability protects the state or other governmental entity from judgments even if the Legislature has expressly given consent to sue.

In some states, when a governmental entity contracts, it is liable on contracts made for its benefit as if it were a private person. Consequently, when a governmental entity contracts with private citizens it waives immunity from liability. But the governmental entity does not waive immunity from suit simply by contracting with a private person. Legislative consent to sue is still necessary.

A party may establish legislative consent by referencing a statute or a resolution granting express legislative permission. Legislative consent to sue the state or other governmental entity must be expressed in clear and unambiguous language.

In Colorado, sovereign immunity generally protects the state government, its agencies, and political subdivisions from being sued or held liable in lawsuits, unless this immunity has been explicitly waived by statute. The Colorado Governmental Immunity Act (CGIA) is the primary state law that addresses the circumstances under which the state, its agencies, and its political subdivisions may be sued. The CGIA provides specific instances where immunity is waived, such as in cases of motor vehicle accidents caused by public employees, certain injuries resulting from dangerous conditions of public buildings, and injuries caused by the operation of public utilities, among others. However, even when immunity is waived, there are limitations on the amount of damages that can be recovered and notice requirements that must be met. It's important to note that entering into a contract with a private party does not automatically waive the state's immunity from suit; legislative consent is still required. The CGIA requires that any consent to sue the state or its entities must be expressed in clear and unambiguous terms.