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Following the letter of the law refers to the idea of keeping your actions technically legal by making sure that they follow the law. By contrast, following the spirit of the law refers to acting in ways that are consistent with what the law means, not its exact words.
One example of this difference, perhaps, can be seen in laws that can be consistent with the letter of the Constitution but not with its spirit. (Of course, saying this requires us to specify what we think the spirit of a law is and that is a subjective matter.) In the early 1960s, there were states that banned the use of contraceptives. There is nothing in the Constitution that says that people have the right to use contraceptives. Therefore, such a law follows the letter of the law. On the other hand, that sort of law seems to violate the spirit of the Constitution. The spirit of the Constitution seems to be that people should be able to do as they wish with their private lives because we have a limited government and not a totalitarian one. The Supreme Court ended up ruling that such laws violated the Constitution because they went against its spirit.
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