Colby v. Reed was a United States Supreme Court case that dealt with the issue of whether a party could be held liable for a breach of contract when the contract was not in writing. The case involved a dispute between two parties, Colby and Reed, over a contract for the sale of a horse. Colby had agreed to purchase the horse from Reed for $100, but Reed refused to deliver the horse after Colby had paid him the money. The Supreme Court held that Colby could recover the money he had paid to Reed, even though the contract was not in writing. The Court reasoned that the parties had agreed to the terms of the contract, and that the agreement was binding even though it was not in writing. The Court also noted that the parties had acted in reliance on the agreement, and that it would be unjust to allow Reed to keep the money without delivering the horse. The Court's decision in Colby v. Reed established that a contract does not need to be in writing in order to be enforceable. This decision has been cited in numerous subsequent cases, and it remains an important precedent in contract law.

In Colby v. Reed, the Supreme Court was tasked with determining whether a contract between two parties should be enforced even though it had been made in violation of state law. The majority opinion held that the contract could not be enforced because it violated public policy and was therefore voidable at the option of either party to the agreement. Justice Field dissented from this decision, arguing that contracts are generally enforceable unless they violate some fundamental principle or involve an illegal purpose; he argued that since there was no evidence of such violations here, then enforcement should have been allowed. He further noted that if courts were to refuse enforcement simply based on technicalities like those present in this case, then many valid agreements would go unenforced and people's rights would suffer as a result.