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 North Carolina, sovereign immunity is a legal doctrine that protects the state government, including its agencies, boards, hospitals, and universities, from being sued or held liable in court unless this immunity has been explicitly waived by statute. This immunity extends to political subdivisions such as counties, cities, and school districts. The North Carolina General Assembly has the authority to waive sovereign immunity, and such waivers must be clearly and unambiguously expressed in legislation. While the state can be held liable on contracts made for its benefit as if it were a private person, entering into a contract does not inherently waive the state's immunity from being sued; explicit legislative consent is still required. It is important to note that even if the legislature consents to a lawsuit against the state, immunity from liability may still protect the state from judgments unless the legislature has also waived this protection.