In the case of James B. Peck et al., Appellants, v. John Sanderson, Libellant, the Supreme Court was asked to decide whether a contract between two parties should be enforced when it had been made without consideration and with an understanding that no legal action would be taken if one party failed to fulfill its obligations under the agreement. The court held that such contracts are not enforceable because they lack consideration and do not meet the requirements for a valid contract under common law principles. Furthermore, even though there was an understanding between both parties that no legal action would be taken in case of non-performance by either side, this did not constitute sufficient consideration or form a binding agreement as required by law. Therefore, the court concluded that neither party could recover damages from each other based on their verbal agreement alone since it lacked any legally binding force or effect.

In the case of James B. Peck et al., Appellants, v. John Sanderson, Libellant, the Supreme Court was asked to decide whether a contract between two parties could be enforced when it had been made without consideration and in violation of a statute. The majority opinion held that such contracts were not enforceable because they violated public policy; however Justice McLean dissented from this ruling on the grounds that there was no evidence to suggest that enforcing such contracts would be against public policy or contrary to any law or statute. He argued that if both parties agreed upon an arrangement then it should be upheld as valid regardless of its lack of consideration and statutory violations since these issues did not affect either party's rights under the agreement itself. Furthermore he noted that even though one party may have received some benefit from entering into an illegal contract, this alone should not render it invalid since neither side had acted with malicious intent nor caused harm to anyone else by doing so.