In Stearns v. The United States, the Supreme Court held that a contract between two parties was binding even if it had not been approved by Congress. The case involved an agreement between John Stearns and the United States government for the construction of a lighthouse in Lake Huron. Although Congress had not authorized or ratified this contract, they did appropriate funds to pay for its completion after it was made. In ruling on this case, the court found that since both parties were aware of and accepted their obligations under the agreement at issue, there was no need for Congressional approval to make it valid and enforceable. This decision established an important precedent regarding contracts entered into with governmental entities - namely that such agreements are binding without formal authorization from Congress so long as all necessary elements are present when they are formed.

In Stearns v. The United States, the Supreme Court was asked to decide whether a contract between two parties that had been made in violation of an act of Congress could be enforced by either party. Justice Swayne wrote the dissenting opinion, arguing that while it is true that contracts made in violation of law are generally void and unenforceable, there may be cases where such contracts should still be upheld. He argued that when both parties have acted in good faith and with no intention to violate any laws or regulations, then they should not suffer for their mistake if enforcing the contract would not cause any harm or prejudice to third-parties. In this case he believed enforcing the contract would do no harm as neither party intended to break any laws nor did they benefit from doing so; thus he concluded it was unjust for them both to suffer due to their honest mistake.