In the 1911 case Herndon-Carter Company v. James N. Norris, Son & Company, the U.S Supreme Court was tasked with determining whether a contract for exclusive selling rights of a product in certain territories violated antitrust laws. The Herndon-Carter Company had granted James N. Norris, Son & Co., an exclusive right to sell its patented coal-screening machines within specific regions and prohibited them from selling similar products from other manufacturers during the agreement's term. However, this arrangement was challenged as being in restraint of trade and thus contrary to public policy under federal law. The court ruled that such contracts did not inherently violate antitrust laws unless they unduly restrained competition or created monopolies beyond what is necessary to protect patent rights or goodwill associated with trademarks or business names. In this instance, it found no evidence that these conditions were met; hence it upheld the validity of their agreement.

The dissenting opinion in the case of Herndon-Carter Company v. James N. Norris, Son & Company argued that the majority's decision to uphold a contract between two parties was incorrect because it violated public policy and anti-trust laws. The dissenting justices believed that the agreement constituted an illegal restraint on trade as it effectively eliminated competition within a specific market sector by allowing one party to control prices and supply. They contended that such agreements are inherently harmful to consumers and detrimental to free-market principles, which should be protected under federal law. Furthermore, they disagreed with the majority's interpretation of certain contractual terms and conditions, arguing for a stricter reading of these provisions in line with established legal precedents relating to contracts and commercial transactions.