In Townsend et al. v. Greeley, the Supreme Court of the United States ruled that a contract between two parties was valid and enforceable even if it had been made without consideration. The case involved a dispute over an agreement between William H. Townsend and Horace Greeley concerning land in New York City owned by Townsend but leased to Greeley for ninety-nine years at an annual rent of $1,000 per year with no other consideration given or received from either party. The court held that although there was no exchange of money or any other form of consideration when the contract was formed, it still constituted a binding agreement because both parties intended to be bound by its terms and conditions upon signing it; thus making them legally obligated to fulfill their respective obligations under the contract's terms regardless of whether they had exchanged anything else besides their signatures on paper as evidence thereof.

In Townsend et al. v. Greeley, the Supreme Court was asked to decide whether a contract between two parties could be enforced when it had been made in violation of an existing state law prohibiting such contracts. The majority opinion held that the contract was not enforceable because it violated public policy and thus should not be recognized by courts of law. However, Justice Field dissented from this decision on the grounds that while he agreed with the majority's conclusion regarding public policy considerations, he felt that there were other legal principles at play which should have been taken into account before reaching their decision. Specifically, Field argued that since both parties had entered into a valid agreement without any knowledge or intent to violate state laws and since they had acted in good faith throughout their dealings with each other, then they ought to be allowed to benefit from their bargain regardless of its illegality under state statutes. He further contended that allowing them to do so would serve as an incentive for people who enter into similar agreements in future cases where no fraud or deceit is involved; therefore upholding rather than disregarding these types of contracts would ultimately promote justice and fairness within society more generally