In Lewis Teese and Lewis Teese, Jr. v. C. P. Huntingdon and Mark Hopkins, the Supreme Court of California heard a case involving two parties who had entered into an agreement to purchase land in San Francisco from the defendants for $20,000 with payment due within one year of signing the contract. The plaintiffs paid part of the amount but failed to pay off their debt before it was due and were sued by the defendants for breach of contract when they refused to make further payments on time or at all without any legal justification given for their refusal to do so. The court found that there was no valid reason provided by either party as to why they should not be held liable under this contract and thus ruled in favor of the defendants, ordering them both jointly and severally liable for damages caused by their failure to fulfill its terms according to law.

In Lewis Teese and Lewis Teese, Jr. v. C.P Huntingdon and Mark Hopkins, the Supreme Court was asked to decide whether a contract between two parties could be enforced when it had been made without consideration or mutuality of obligation. The majority opinion held that such contracts were unenforceable because they lacked consideration and mutuality of obligation; however, Justice Nelson dissented from this decision on the grounds that there should have been an exception for cases in which one party had already performed their part of the agreement before learning that no consideration existed for it. He argued that if one party has already fulfilled their obligations under an agreement then justice requires them to receive something in return even if there is no legal basis for enforcing the contract as written due to lack of consideration or mutuality of obligation. As such, he believed this case should have been decided differently so as not to leave either party with nothing after having acted upon what they thought was a valid contract at its inception