Texas v. Hardenberg was a landmark United States Supreme Court case that established the principle of sovereign immunity. The case involved a dispute between the state of Texas and a private citizen, Hardenberg, over a contract dispute. Hardenberg had contracted with the state of Texas to build a bridge, but the state refused to pay him for his work. Hardenberg sued the state in a Texas court, but the state argued that it was immune from suit because it was a sovereign entity. The Supreme Court agreed with the state, ruling that the state of Texas was immune from suit and could not be sued in its own courts. The Court held that the state of Texas was a sovereign entity and could not be sued without its consent. This ruling established the principle of sovereign immunity, which has been applied to many other cases since then. The ruling also established the principle that states cannot be sued in their own courts without their consent. This ruling has been cited in numerous cases since then and has been a cornerstone of American law.

In the case of Texas v. Hardenberg, the Supreme Court was asked to decide whether a contract between two parties that provided for payment in Confederate currency was valid and enforceable under state law. The majority opinion held that such contracts were invalid because they violated public policy by attempting to revive an illegal currency. However, Justice Field dissented from this opinion on the grounds that it would be unjust to allow one party to benefit from their own breach of contract while punishing another who had acted in good faith and relied upon its terms when entering into it. He argued that if a court found a contract void due to illegality or unenforceability, then both parties should suffer equally; otherwise, there is no incentive for either side not to break their agreements whenever doing so might be more beneficial than honoring them.