In the case of Continental Life Insurance Company v. Chamberlain, the Supreme Court of the United States was asked to decide whether an insurance company could be held liable for a breach of contract when the insured failed to pay premiums. The case involved a policy issued by Continental Life Insurance Company to the Chamberlain family. The policy provided for the payment of a death benefit to the family in the event of the death of the insured. The Chamberlains failed to pay the premiums due on the policy, and Continental Life Insurance Company refused to pay the death benefit. The Supreme Court held that Continental Life Insurance Company was not liable for the breach of contract. The Court reasoned that the policy was a contract of adhesion, meaning that the terms of the policy were not negotiated between the parties and the insured had no choice but to accept the terms of the policy. The Court also noted that the policy contained a provision that stated that the policy would be void if the premiums were not paid. Therefore, the Court held that Continental Life Insurance Company was not liable for the breach of contract.

In the dissenting opinion of Continental Life Insurance Company v. Chamberlain, Justice McReynolds argued that the majority's decision was wrongfully based on a misinterpretation of the contract between both parties. He believed that there were two separate contracts in this case: one for insurance and another to pay premiums. The majority had failed to consider these two distinct agreements when making their ruling, which he felt led them astray from what should have been an obvious conclusion - namely, that Chamberlain was not liable for any unpaid premiums due under his policy with Continental Life Insurance Company since they had already agreed upon a settlement amount prior to him signing it. Furthermore, Justice McReynolds noted how such an interpretation would be unfair as it would allow insurers like Continental Life Insurance Company to take advantage of unsuspecting customers by forcing them into settlements without fully understanding all terms involved in said agreement.