In the case of Capitol Transportation Company v. Cambria Steel Company, 1918, the U.S Supreme Court was tasked with determining whether a contract for transportation services could be enforced despite its violation of federal law. The Capitol Transportation Company had entered into an agreement to transport iron ore for Cambria Steel at a rate below that established by the Interstate Commerce Commission (ICC). When Cambria refused to pay additional charges levied by Capitol in accordance with ICC rates, Capitol sued for breach of contract. However, because their initial agreement violated federal regulations set forth by the ICC Act which prohibited preferential treatment and discriminatory practices in freight rates, it was deemed unenforceable. Thusly ruled Justice Day on behalf of unanimous court; he stated that contracts made in violation of public policy or statutory prohibition cannot be upheld as they are inherently illegal and void from inception.

The dissenting opinion in the case of Capitol Transportation Company v. Cambria Steel Company argued that the majority's decision to hold the transportation company liable for damages was incorrect. The dissent contended that it was not fair or reasonable to expect a carrier to be responsible for unforeseen and uncontrollable circumstances, such as extreme weather conditions, which caused damage during transport. They believed this ruling would place an undue burden on carriers who could not possibly predict or prevent all potential hazards during transit. Furthermore, they disagreed with the interpretation of "act of God" used by the majority and felt it should only apply when there is absolutely no human intervention involved in causing harm - something they did not believe applied in this particular case.