Smith v. Ayer is a United States Supreme Court case that was decided in 1879. The case involved a dispute between two parties over a contract for the sale of a steamboat. The plaintiff, Smith, was the owner of the steamboat and had entered into a contract with the defendant, Ayer, to sell the boat. Smith alleged that Ayer had breached the contract by failing to pay the agreed-upon price. The Supreme Court held that Ayer had breached the contract and was liable for damages. The Court found that Ayer had failed to pay the agreed-upon price and had not provided any evidence that he had a valid reason for not doing so. The Court also held that Smith was entitled to damages for the breach of contract. The Court's decision in Smith v. Ayer established that a party who breaches a contract is liable for damages. The Court also established that a party who breaches a contract must provide evidence of a valid reason for not fulfilling the contract in order to avoid liability. This case is still cited today as an important precedent in contract law.

Justice Field delivered the dissenting opinion in Smith v. Ayer, arguing that the majority's decision was incorrect and should be reversed. He argued that a contract between two parties is binding on both of them, regardless of whether one party has received any benefit from it or not. In this case, he noted that Smith had entered into an agreement with Ayer to provide him with certain services for which he would receive compensation; thus, even though Ayer did not actually receive any benefit from those services due to his own negligence in failing to make use of them properly, Smith was still entitled to payment under the terms of their contract. Furthermore, Justice Field argued that if such contracts were allowed to be voided simply because one party failed to take advantage of its benefits then no contractual obligations could ever truly be enforced since all agreements are subject at least some degree of risk as far as performance is concerned.