In Jones v. Guaranty and Indemnity Company, the Supreme Court of the United States was asked to determine whether a contract between two parties was valid and enforceable. The plaintiff, Jones, had entered into a contract with the defendant, Guaranty and Indemnity Company, in which the defendant agreed to pay Jones a certain sum of money in exchange for Jones’s promise to pay the defendant a certain sum of money in the event of a certain contingency. The defendant argued that the contract was invalid because it was not in writing, as required by the Statute of Frauds. The Supreme Court held that the contract was valid and enforceable. The Court reasoned that the Statute of Frauds did not apply to the contract because the contract was not for the sale of goods, but rather for the payment of money. The Court further reasoned that the contract was not for the sale of goods because the defendant was not obligated to deliver any goods to the plaintiff, but rather was obligated to pay the plaintiff a certain sum of money. The Court concluded that the contract was valid and enforceable and that the defendant was obligated to pay the plaintiff the sum of money specified in the contract.

Justice Field delivered the dissenting opinion in Jones v. Guaranty and Indemnity Company, arguing that the majority had misapplied the law to reach its decision. He argued that under California law, a contract of indemnity was not binding unless it was supported by consideration; however, he noted that this requirement did not apply when an agreement for indemnification is made between two parties who are already bound by a prior contract or relationship. In this case, Justice Field argued there existed such a pre-existing relationship between Jones and Guaranty & Indemnity Co., as evidenced by their previous dealings with each other over several years. Thus, according to Justice Field's interpretation of California law at the time, no additional consideration was necessary for their agreement on indemnification to be valid and enforceable.