In the case of Capital City Light and Fuel Company v. Tallahassee in 1901, the U.S Supreme Court dealt with a dispute over a contract between a private company and a municipality. The Capital City Light and Fuel Company had entered into an agreement with the city of Tallahassee to provide gas lighting services for public streets and buildings for twenty years. However, after only ten years, the city decided to establish its own electric light plant which would directly compete with Capital City's business operations. In response, Capital City sued on grounds that this action violated their exclusive rights under their existing contract. The court ruled in favor of Tallahassee stating that municipalities have inherent powers related to public welfare including providing utilities like electricity or gas lighting services unless explicitly restricted by state law or constitution from doing so. It was also noted that any ambiguity in contracts should be resolved against granting monopolies or exclusive privileges especially when it comes to essential public services such as street lighting.

The dissenting opinion in the case of Capital City Light and Fuel Company v. Tallahassee argued that the city's decision to grant a 30-year franchise for gas works did not constitute an irrevocable contract, as claimed by the majority. The dissenters believed that such a long-term agreement was contrary to public policy because it restricted future governments' ability to adapt policies according to changing circumstances or technological advancements. They also contended that if any part of this franchise were deemed unconstitutional, then the entire contract should be voided rather than allowing selective enforcement of its provisions. Furthermore, they disagreed with the majority's interpretation of Florida law regarding municipal powers and contracts, arguing instead for a more limited view on these matters.