In the 1919 case McCay Engineering Company v. United States, the Supreme Court ruled in favor of the U.S. government over a contract dispute with McCay Engineering Company. The engineering firm had entered into an agreement to manufacture artillery shells for World War I but failed to deliver them on time due to labor strikes and other unforeseen issues. As a result, they were charged penalties as per their contract's terms which they contested arguing that these delays were beyond their control and constituted "acts of God". However, the court held that such circumstances did not absolve them from fulfilling their contractual obligations or exempt them from penalty charges since there was no clause in their agreement allowing for exceptions under extraordinary conditions.

In the dissenting opinion for MCCAY ENGINEERING COMPANY v. UNITED STATES, 1919, it was argued that the government should not be allowed to benefit from a contract if they were aware of its illegality at inception. The dissenting justices believed that even though McCay Engineering Company had entered into an illegal agreement with a federal officer who did not have authority to make such contracts on behalf of the United States, this did not absolve the government from responsibility since it knowingly accepted and benefited from services rendered under said contract. They contended that allowing such actions would set a dangerous precedent where governmental entities could exploit their power by accepting benefits without bearing any contractual obligations or liabilities in return. Therefore, they disagreed with majority's decision which denied McCay Engineering Company compensation for work performed under an unauthorized but beneficially executed contract.