In the United States Cartridge Co. v. United States case of 1931, the U.S Supreme Court ruled in favor of the government, upholding a decision by The Court of Claims that denied recovery to the plaintiff for cartridges delivered under a contract with the War Department. The company had entered into an agreement with the government during World War I to supply ammunition at fixed prices but later claimed additional compensation due to increased production costs caused by changes made necessary by defects in materials supplied and specifications provided by Government inspectors. However, it was found that these changes were within reasonable expectations given wartime conditions and did not constitute alterations significant enough to warrant extra payment beyond what was stipulated in their original contract.

In the dissenting opinion for United States Cartridge Co. v. United States, it was argued that the majority's decision to allow the government to cancel a contract due to alleged fraud was incorrect. The dissenting justices believed that there were no grounds for cancellation as there was no evidence of fraudulent intent on behalf of the company when entering into or performing under this contract. They contended that any misrepresentation made by U.S Cartridge Company regarding its production costs and profit margins were not material facts influencing the government's decision to enter into a contract with them in wartime conditions, thus should not be considered fraudulent activity warranting termination of said agreement. Furthermore, they pointed out inconsistencies in how similar cases had been handled previously and criticized what they saw as an arbitrary application of law by their peers in this case.