The 1877 Agreement, also known as the Act of February 28, 1877 (19 stat. 254), was the most controversial contract on Black Hills land claims. The contract officially took the land of Sioux and permanently established Indian reserves. Section 1 of the Act amends the reserve limits set by the Fort Laramie Treaty of 1868, while Section 2 allows the U.S. government to create routes for settlers to travel when crossing the territory.  In addition, section 7 stipulates that only thoroughbred Indians on the reserve are admitted to the agreements and benefit from this law as well as previous treaties.  Controversies surrounding this law state that the government purchased the land upon booking, but there is no valid record of this transaction.  On June 13, 1979, the United States Court of Claims ruled by a majority of 5-2 that the 1877 law that confiscated the Black Hills from the Sioux constituted a violation of the Fifth Amendment.  Under the Fort Laramie Treaty of 1868, the United States committed that the Great Sioux Reservation, including the Black Hills, would be separated „for the absolute and uninterrupted use and occupation“ of the Sioux Nation (Sioux) and that no contract to transfer part of the reserve would be valid to the Sioux unless they were executed and signed by at least three-quarters of the adult male population. The treaty also reserved the right to hunt for sioux in some untapped areas.
In 1876, an „agreement“ was presented to the Sioux by a special commission, but it was signed by only 10% of the adult Sioux male population, provided that the Sioux renounce their rights over the Black Hills and drive them to unseeded areas in exchange for food rations for as long as they were needed. In 1877, Congress passed a law (The 1877 Act) that implemented this „agreement,“ thus ensuring the Treaty of Fort Laramie. In the years that followed, the Sioux considered the 1877 Act a violation of that treaty, but Congress did not adopt a mechanism to advance their claims against the United States until 1920, when a special law was passed. Under the Act, the Sioux filed a complaint with the Court of Claims, claiming that the government had taken the Black Hills without fair compensation, which was contrary to the Fifth Amendment. In 1942, the Court of Claims dismissed this complaint, which found that the 1920 Act did not allow it to consider whether the compensation awarded to the Sioux in the 1877 Act constituted a reasonable price for the Black Hills and that the Sioux`s complaint was a moral assertion that was not protected by the fair compensation clause. Following the passage of the Indian Claims Commission Act in 1946, the Sioux again filed their application with the Indian Claims Commission, which stated that the 1877 Act had given effect to a decision for which the Sioux were entitled to fair compensation and that the 1942 Court of Claims decision did not have the effect of preventing the right to a legally binding claim. As part of the appeal proceedings, the Court of Claims upheld the Commission`s view that a lack of fair and honourable business on the part of the government has been demonstrated, since the Sioux are entitled to at least $17.5 million in interest-free sleep as damages under the Indian Claims Commission Act for abandoned land and gold , perceived by transgressive prospectors prior to the passage of the 1877 Act. However, the Tribunal also found that the merits of the Sioux claim had been reached in its 1942 decision and that such a claim was therefore excluded by force of law. The Tribunal found that it was only if the acquisition of Black Hills was an unconstitutional recipe that the Sioux would be entitled to interest.
In 1978, Congress passed a 1978 Law that provided for a de novo audit of the merits of the Indian Claims Commission by the Court of Claims Commission, which stated that the 1877 Act had the effect of redeeming the Black Hills without regard for the force of things, and authorized the Court of Claims to provide new evidence in the case.