In the case of Yuma County Water Users' Association et al. v. Schlecht et al., 1922, the Supreme Court was tasked with determining whether a contract for construction work on an irrigation project in Arizona could be enforced despite allegations that it violated state laws regarding maximum allowable interest rates. The plaintiffs argued that because part of their compensation under the contract included water rights, which they claimed were overvalued by the defendants to circumvent usury laws, the entire agreement should be voided. However, after examining both Arizona law and precedent from other jurisdictions dealing with similar issues involving public utilities and natural resources development projects, Justice McReynolds delivered a unanimous decision upholding enforcement of the contract. He reasoned that while some aspects may have been questionable or even illegal if considered separately from its overall purpose and context as part of a government-backed effort to promote settlement and agriculture in arid regions through large-scale irrigation infrastructure improvements.

In the dissenting opinion for Yuma County Water Users' Association v. Schlecht, Justice Holmes disagreed with the majority's decision to uphold a lower court ruling that allowed an irrigation company to charge landowners for water rights in perpetuity. He argued that such a contract was unreasonable and unjust because it forced landowners to pay indefinitely for something they had already purchased outright. Furthermore, he contended that this arrangement violated principles of equity by allowing the company to profit excessively at the expense of landowners who were essentially trapped into paying these fees without any means of escaping them or negotiating better terms. In his view, contracts should not be enforced if they are fundamentally unfair or exploitative in nature.