In the case of A. J. Phillips Company v. Grand Trunk Western Railway Co, 1914, the Supreme Court had to decide whether a railway company was liable for damages caused by a fire that started from sparks emitted by one of its locomotives. The plaintiff, A.J Phillips Company claimed that their lumber yard was set on fire due to these sparks and sought compensation for their losses from the defendant, Grand Trunk Western Railway Co. The court ruled in favor of the railway company stating that they were not responsible for unforeseeable accidents unless it could be proven they were negligent or failed to use proper care and skill in operating their trains which wasn't established here. It further stated that railroads are not insurers against accidental fires originating from passing locomotives but only bound to exercise reasonable care under all circumstances.

The dissenting opinion in the case of A. J. Phillips Company v. Grand Trunk Western Railway Co, 1914 argued that the majority's decision was incorrect because it failed to consider that a contract between two parties should not be invalidated due to an error made by one party alone. The dissenting justices believed that if a mistake is made by one party and this mistake is known by the other party, then there may be grounds for rescission or reformation of the contract; however, they contended that no such knowledge existed in this particular case on part of Grand Trunk Western Railway Co regarding A.J Phillips Company’s misunderstanding about freight rates when entering into their agreement. Therefore, they felt it was unjust to penalize Grand Trunk Western Railway Co for fulfilling its contractual obligations as agreed upon initially.