In the case of United States Fidelity and Guaranty Company v. United States for the Benefit of Bartlett (1913), a dispute arose over a contract between C.H. Nichols, a contractor, and William P. Bartlett, his subcontractor. The main issue was whether or not Nichols had fulfilled his contractual obligations to Bartlett regarding payment for work done on federal buildings in Washington D.C., which were supervised by Superintendent Woods under authority from Secretary Hitchcock. Nichols had provided bonds through United States Fidelity and Guaranty Company as security against any potential default on payments due to Bartlett's services. When disputes emerged about these payments, both parties sought resolution through litigation. The Supreme Court ruled that since there was no evidence showing that either Woods or Hitchcock acted outside their official capacities when supervising the construction project; therefore they could not be held personally liable for any alleged breach of contract by Nichols towards Bartlett. Furthermore, it was determined that because U.S.F.&G Co.'s bond only covered defaults directly caused by Nichol’s failure to pay money owed under the terms specified within their agreement with him - it did not extend coverage to include additional costs incurred due to delays or other indirect consequences resulting from such non-payment issues.

In the dissenting opinion for United States Fidelity and Guaranty Company v. United States for the Benefit of Bartlett, Justice Holmes disagreed with the majority's interpretation of a bond contract between a construction company and its surety. He argued that when interpreting contracts, courts should consider what reasonable people would understand from their terms rather than relying on technical legal definitions or principles. In this case, he believed that any reasonable person reading the bond contract would conclude it was intended to cover all work done under the main construction contract - not just specific items listed in an attached schedule as interpreted by majority justices. Therefore, he concluded that U.S Fidelity & Guaranty Co., as surety, should be liable for unpaid bills incurred by Bartlett related to additional works beyond those specifically mentioned in schedule.