In Livingston and Gilchrist v. The Maryland Insurance Company, the Supreme Court of the United States was asked to decide whether a contract between two parties could be enforced when one party had not received full payment for their services. In this case, Livingston and Gilchrist had contracted with The Maryland Insurance Company to provide insurance coverage on certain vessels owned by them. However, after providing the service they were only paid half of what they were owed under the terms of their agreement. They then sued in court seeking an order that would require The Maryland Insurance Company to pay them in full according to their contract. After considering all relevant evidence presented by both sides, including testimony from witnesses who attested that it was customary practice at that time for such contracts to be fully performed before any payments were made or accepted as valid consideration; the Supreme Court ruled in favor of Livingston and Gilchrist holding that “the law will imply a promise” on behalf of those who have entered into agreements requiring performance prior to payment being rendered or accepted as valid consideration for services provided.

In Livingston and Gilchrist v. The Maryland Insurance Company, Chief Justice John Marshall delivered the dissenting opinion of the Supreme Court. He argued that a contract between two parties should be enforced according to its terms, even if one party has been misled by false representations made by another party in order to induce them into entering into it. In this case, Livingston and Gilchrist had entered into an insurance policy with The Maryland Insurance Company based on misrepresentations made by their agent about the scope of coverage provided under the policy; however, when they sought reimbursement for damages from a fire at their property which was not covered under the policy as represented to them, The Maryland Insurance Company refused payment. Despite acknowledging that there had been fraud committed against Livingston and Gilchrist in inducing them to enter into this agreement, Chief Justice Marshall maintained that since no legal action could be taken against their agent due to his death prior to litigation being initiated against him or his estate (and thus no restitution could be obtained), then enforcing this contract according to its written terms was necessary so as not deny justice altogether in such cases where fraud is involved but cannot otherwise be remedied through civil proceedings.