In Terhune v. Phillips, the Supreme Court of the United States was asked to decide whether a contract between two parties was valid. The contract in question was between a landowner, Terhune, and a tenant, Phillips. Phillips had agreed to pay Terhune a certain amount of money for the use of the land. However, Phillips had failed to make the payments as agreed. Terhune then brought a suit against Phillips to recover the money. The Supreme Court held that the contract was valid and enforceable. The Court noted that the contract was clear and unambiguous, and that the parties had agreed to the terms of the contract. The Court also noted that the contract was supported by consideration, meaning that both parties had given something of value in exchange for the agreement. The Court also held that the contract was not voidable due to any lack of capacity on the part of either party. The Court noted that both parties were of sound mind and had the capacity to enter into a contract. The Court ultimately held that Terhune was entitled to recover the money that Phillips had agreed to pay. The Court noted that Phillips had failed to fulfill his obligations under the contract, and that Terhune was entitled to recover the money that Phillips had agreed to pay.

Justice Field delivered the dissenting opinion in Terhune v. Phillips, arguing that the majority's decision was wrongfully decided and should be reversed. He argued that a contract between two parties is binding upon them both, regardless of whether or not it has been reduced to writing. In this case, he believed there was sufficient evidence to prove an oral agreement had been made between the two parties regarding a lease for land owned by Terhune and rented out by Phillips. The fact that no written document existed did not mean there wasn't an enforceable contract; rather, it meant only that additional proof would have to be provided in order to establish its existence and terms. Justice Field concluded his dissent with a reminder of how important contracts are in society: they provide stability and predictability for all involved parties so long as they are enforced according to their terms.