In the Northern Lumber Company v. O'Brien case of 1906, the U.S Supreme Court ruled in favor of Northern Lumber Company. The dispute arose when a tract of land was sold to O’Brien by an individual who had obtained it from the state under swamp-land laws but failed to disclose that he had already contracted its sale to another party (Northern Lumber). When O’Brien attempted to take possession, Northern Lumber sued for breach of contract and won at both trial court and Minnesota Supreme Court levels. On appeal, the U.S Supreme Court upheld these decisions on grounds that although federal law did not explicitly provide for such contracts made before patent issuance, it also didn’t prohibit them; thus they were valid if allowed by state law which was indeed permissible under Minnesota statutes.

The dissenting opinion in the Northern Lumber Company v. O'Brien 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 dissent believed that by allowing a contract for timberland purchase to be voided due to an error in land description, despite both parties acting in good faith, would set a dangerous precedent. It could potentially undermine confidence in contractual agreements and disrupt commerce as any minor mistake could lead to nullification of contracts. Furthermore, they contended that if there is mutual mistake about something which goes into the substance or consideration of a contract, then such mistake does not make it voidable at law unless one party has been misled or defrauded by another; neither condition being present here.