In Ransom v. Williams, the Supreme Court of the United States held that a state could not constitutionally pass laws which would interfere with or impair contracts made in another state. The case arose from an action brought by John Ransom against William Williams for breach of contract. In 1857, Ransom had entered into a contract with Williams to purchase certain real estate located in New York State and agreed to pay $2,000 for it. However, before he was able to make payment on the property, New York passed a law prohibiting any person from purchasing land without first obtaining permission from its legislature or governor; this effectively prevented him from completing his purchase as required under their agreement. As such, he sued Williams for breach of contract and sought damages for his loss due to non-performance by defendant's failure to comply with their contractual obligations despite being unable to do so legally because of the new law enacted by New York State government officials. The court found that while states have broad powers over matters within their own borders they cannot pass laws which will interfere with or impair contracts made in other states; thus ruling in favor of plaintiff and awarding him damages accordingly

In Ransom v. Williams, the Supreme Court was asked to decide whether a state court had jurisdiction over an action brought by a citizen of one state against another in which the defendant resided in a third state. The majority opinion held that it did not have such jurisdiction and reversed the judgment of the lower court. Justice Field dissented from this decision, arguing that under Article III Section 2 of the Constitution, Congress has given federal courts exclusive original jurisdiction over cases between citizens of different states regardless of where they reside or are domiciled at any particular time. He further argued that since no act had been passed by Congress granting concurrent jurisdiction to state courts for such cases, then there could be no other conclusion than that only federal courts may hear them. In his view, allowing otherwise would lead to confusion and uncertainty as each party might choose their own forum depending on its perceived advantages rather than having uniformity across all jurisdictions with respect to these matters.