In the case of City of San Juan v. St. John's Gas Company, Limited (1904), the U.S Supreme Court dealt with a dispute over a contract between the city of San Juan, Puerto Rico and St. John's Gas Company for street lighting services. The gas company sued when the city failed to pay for these services as per their agreement due to financial difficulties after a hurricane disaster in 1899 that devastated its economy and infrastructure. The court ruled in favor of St.John’s Gas Company stating that despite any hardships faced by San Juan, it was still obligated to fulfill its contractual obligations unless there were specific provisions within the contract allowing termination under such circumstances which wasn't present here.

In the dissenting opinion for City of San Juan v. St. John's Gas Company, Limited, it was argued that the majority had erred in their interpretation and application of Puerto Rican law. The dissenting justices believed that the local laws should be interpreted as they would have been by a court in Puerto Rico rather than applying mainland legal principles to them. They also disagreed with the majority's decision to void an entire contract because one provision was found to be illegal; instead, they felt only the offending clause should have been struck down while leaving rest of agreement intact. Furthermore, they expressed concern over potential negative impacts on foreign investment due to this ruling which could discourage companies from entering into contracts if there is a risk that these agreements might later be declared entirely null and void due to minor infractions or misunderstandings about local laws.