In the case of United States v. Northeastern Construction Company, the Supreme Court ruled in favor of the government. The dispute arose over a contract between Northeastern Construction Company and the U.S. Government for construction work on a dry dock at Pearl Harbor in Hawaii. The company claimed that it had incurred additional costs due to unforeseen difficulties during excavation and sought compensation from the government under an "equitable adjustment" clause in their contract. The court found that while there were indeed unexpected challenges faced by Northeastern during excavation, these did not constitute changes to their contractual obligations as defined by said clause - which only covered alterations directed by the contracting officer or caused by unknown physical conditions differing materially from those indicated in the contract. Therefore, since no such changes occurred according to this definition, they held that no equitable adjustment was warranted under terms of their agreement with Uncle Sam; thus ruling against any extra payment beyond what was originally agreed upon.

In the dissenting opinion for United States v. Northeastern Construction Company, Justice Holmes argued that the majority's decision to hold a contractor liable for additional costs incurred due to unforeseen difficulties during construction was unjust. He contended that it is unreasonable and unfair to expect contractors to bear all risks associated with their work, especially when those risks are not within their control or could not have been anticipated at the time of contract formation. Furthermore, he pointed out that such an approach discourages innovation and risk-taking in business by placing too heavy a burden on contractors. Instead, he suggested that liability should be determined based on whether the contractor acted reasonably under the circumstances rather than strictly adhering to contractual terms which may no longer be applicable given unexpected changes in conditions.