The U.S. Supreme Court case Vicksburg v. Vicksburg Waterworks Company in 1906 revolved around a contract dispute between the city of Vicksburg, Mississippi and the water company that served it. The city had entered into a contract with the water company granting it exclusive rights to supply water for 50 years, but later sought to construct its own plant before this period ended. The court ruled in favor of the water company, stating that while municipalities have broad powers to provide public services, they cannot break contracts without due process of law under the Fourteenth Amendment. Therefore, unless there was evidence proving fraud or collusion when making such contracts or if these agreements were found unreasonable or oppressive by courts after thorough investigation - none of which applied here - cities could not simply disregard them at will.

In the dissenting opinion for Vicksburg v. Vicksburg Waterworks Company, Justice Harlan argued that the majority's decision violated principles of contract law and due process. He contended that when a city grants a franchise to a company to provide public services, it forms an inviolable contract which cannot be unilaterally altered or revoked without compensation. In this case, he believed that the City of Vicksburg had entered into such an agreement with the waterworks company and was now attempting to violate its terms by constructing its own competing water system before the expiration of their 30-year agreement. This action would significantly devalue or even destroy the business value of Waterworks' property rights in providing exclusive service within city limits as per their original contract. Therefore, according to Justice Harlan's interpretation, this amounted not only to breach of contract but also unconstitutional deprivation of property without due process under Fourteenth Amendment protections.