Auld v. Norwood was a case heard by the United States Supreme Court in 1809. The dispute arose when William Auld, an administrator of the estate of John Anderson, sued James Norwood for debt repayment and damages due to nonpayment on a note given by Anderson before his death. The court found that although there were no specific laws or statutes governing this type of situation at the time, it was still necessary to enforce contracts made prior to death as they are binding upon both parties involved. Furthermore, since Norwood had accepted payment from Anderson's estate after his death without any objection or reservation regarding its validity, he could not later deny liability for such debts owed under contract law principles. As such, the court ruled in favor of Auld and ordered that Norwood pay all outstanding debts plus interest accrued during litigation proceedings until full satisfaction was achieved.

In Auld v. Norwood, the Supreme Court was asked to consider whether a contract between two parties could be enforced if it had been made in violation of an existing state law. The majority opinion held that such contracts were unenforceable and should not be recognized by the court. However, Justice Johnson delivered a dissenting opinion which argued that while it may have been illegal for the parties to enter into this particular agreement, they still had rights under common law principles of equity and fairness which should be respected by the court. He further noted that since there was no evidence of fraud or bad faith on either side, denying enforcement would amount to punishing both parties for their actions without any benefit to society as a whole. Therefore he concluded that justice required recognition of their contractual obligations despite its illegality under state law at the time it was entered into.