Hudson Canal Co. v. Pennsylvania Coal Co. was a case heard by the United States Supreme Court in 1869. The case involved a dispute between the Hudson Canal Company and the Pennsylvania Coal Company over the right to use a canal in Pennsylvania. The Hudson Canal Company had been granted a charter by the state of Pennsylvania to construct and operate a canal in the state. The Pennsylvania Coal Company had also been granted a charter to construct and operate a railroad in the same area. The Pennsylvania Coal Company argued that they had the right to use the canal for their railroad, while the Hudson Canal Company argued that they had exclusive rights to the canal. The Supreme Court ultimately sided with the Hudson Canal Company, ruling that the Pennsylvania Coal Company did not have the right to use the canal. The Court held that the charter granted to the Hudson Canal Company gave them exclusive rights to the canal, and that the Pennsylvania Coal Company had no right to use it. The Court also held that the Pennsylvania Coal Company had not obtained the necessary permission from the state of Pennsylvania to use the canal. This ruling established the principle that a company granted a charter by a state has exclusive rights to the property granted in the charter, and that other companies must obtain permission from the state before using the property.

In the case of Hudson Canal Co. v. Pennsylvania Coal Co., the Supreme Court was tasked with determining whether or not a contract between two parties, which included an agreement to pay damages for any breach of its terms, could be enforced by a third party who had no involvement in creating it. The majority opinion held that such contracts were enforceable and that the plaintiff should receive damages from the defendant as agreed upon in their contract. However, Justice Field dissented from this decision on several grounds: he argued that allowing third-party enforcement would create uncertainty about how much liability each contracting party has; he also noted that there is no precedent for such enforcement and thus it should not be allowed; finally, he argued that enforcing these types of contracts would lead to unfairness since one side may have more bargaining power than another when negotiating them. Ultimately, his dissenting opinion did not prevail and the majority's ruling stood - third-party enforcement of contractual agreements is permissible under law.