In the 1893 U.S. Supreme Court case Lazarus v. Phelps, the court addressed a dispute over an unpaid debt related to a cotton sale in Louisiana during the Civil War era. The plaintiff, Lazarus, argued that he was owed money from Phelps for cotton sold and delivered prior to the war's end but never paid for due to Confederate currency becoming worthless after their defeat. However, Phelps contended that he had already settled his debts under Confederate law at that time by paying with Confederate notes which were legal tender then. The Supreme Court ruled in favor of Phelps stating that although it recognized such transactions as valid contracts under normal circumstances; however, because this contract was made during wartime and involved payment with devalued currency of a rebellious entity not recognized by U.S., it could not be enforced according to standard peacetime laws or principles of equity. This ruling established precedent regarding contractual obligations entered into under unusual conditions like civil unrest or war where normal legal standards may not apply.

The dissenting opinion in the Lazarus v. Phelps case argued that the majority's decision was incorrect because it failed to consider the full implications of its ruling on property rights and contracts. The dissenting justices believed that by allowing a third party, who had no initial involvement or claim in an original contract, to come forth and demand payment from another party involved in said contract, would set a dangerous precedent for future cases involving contractual disputes. They felt this could potentially undermine established principles of fairness and equity within contractual law. Furthermore, they contended that such a ruling might encourage fraudulent claims by parties seeking unjust enrichment at others' expense. Therefore, they disagreed with the majority's interpretation of existing laws governing contracts and property rights.