In the case of The Atlantic, Gulf and Pacific Company v. Government of the Philippine Islands (1910), the U.S Supreme Court was tasked with determining whether a contract between The Atlantic, Gulf and Pacific Company (AG&P) and the government of the Philippines was valid. AG&P had been contracted to dredge Manila Harbor but failed to complete it within an agreed timeframe due to unforeseen circumstances such as typhoons, cholera outbreaks among workers, and delays in receiving necessary equipment from abroad. As a result, they were penalized by having their bond confiscated by the government for breach of contract. The company argued that these unexpected events constituted force majeure - extraordinary events or circumstances beyond human control - which should have exempted them from fulfilling contractual obligations on time without penalty. However, upon review of both parties' arguments and evidence presented before it including terms stipulated in their agreement about possible contingencies like natural disasters or disease outbreaks affecting work progress; Justice Oliver Wendell Holmes Jr., writing for majority ruled against AG&P stating that while force majeure could be invoked under certain conditions those did not apply here because they were foreseeable risks inherent in this type project located where it was.

In the dissenting opinion for The Atlantic, Gulf and Pacific Company v. Government of the Philippine Islands case in 1910, Justice Holmes argued that the majority's decision was based on an incorrect interpretation of Spanish law. He contended that under Spanish law, which was applicable at the time when contracts were made between private parties and municipalities regarding public works projects in Manila, these contracts did not automatically transfer to new sovereigns following a change in sovereignty. Therefore, he believed that after Spain ceded control over Philippines to America following the Treaty of Paris (1898), such contracts should have been renegotiated with American authorities rather than being assumed by them as per previous arrangements. Furthermore, he disagreed with majority’s view about implied obligation on part of U.S government to honor such pre-existing agreements without explicit consent or negotiation.