Colonel John Tayloe III built six two-story row houses facing Pennsylvania Avenue at 14th Street NW in the city of Washington, D.C., in 1816.

[5] Willard visited Washington, D.C., in October 1847 to meet with Tayloe, who subsequently leased the six buildings to him for use as a hotel.

[12][13][14] In 1863, Congress passed the National Banking Act, which authorized the federal government to issue United States Notes (paper money) rather than coins made of gold or silver.

[15] On April 15, 1864, two weeks before the lease was due to expire, Willard tendered the down payment to Tayloe in paper money.

[12] Tayloe refused to issue the mortgage and turn over the deed, claiming that the hotel was now worth much more than $22,500 and that Willard had not paid in gold (the only form of cash available in 1854) as specified in the lease.

But relief in cases of equity is a matter of discretion: "When a contract is of this character, it is the usual practice of courts of equity to enforce its specific execution upon the application of the party who has complied with its stipulations on his part or has seasonably and in good faith offered and continues ready to comply with them.

[21] The majority held that if "the contract [is] fair in its terms," discretion regarding relief may be exercised "if ... subsequent events, or even ... collateral circumstances... would work hardship or injustice to either of the parties.

"[22] "[E]stablished doctrines and settled principles of equity" should be employed to determine the relief to be imposed, and the "specific relief will be granted when it is apparent from a view of all the circumstances of the particular case that it will subserve the ends of justice, and that it will be withheld when from a like view it appears that it will produce hardship or injustice to either of the parties.

Justice Field concluded that "cash" meant gold coin, as no other form of legal tender existed in 1854.

[24] The creation of paper currency subsequent to the 1854 contract did not alleviate Willard of the requirement that the down payment be made in "cash" (e.g., gold coin), Field held.

If not, then no relief was likely: The contract had expired, and Willard had not acted in a timely fashion to secure his rights under it by submitting a cash down-payment.

The Court flatly refused to overturn the contract on grounds of equity simply because the assessed value had exceeded the anticipated rate of inflation.

No objection had been raised at any time by either party prior to agreement, and the contract was (as Field previously noted) fair.

[28] But the Court also recognized that forcing Tayloe to accept paper currency valued at one-half that of coin would also be unjust.

Tayloe argued this rendered the contract void because he had not agreed to make the brother a party to the agreement.

[34] Frustration of purpose can occur when the terms of a contract are applied literally and automatically without taking into consideration radical changes in the economic or physical environment.

[40][41] The Court was ready to take up Hepburn v. Griswold, a case it would decide in 1870 and which would hold that the issuance of U.S. Notes was unconstitutional.

[42] Within a year, however, the Supreme Court would overrule Hepburn v. Griswold, and in Knox v. Lee, 79 U.S. 457 (1871) and Parker v. Davis, 79 U.S. 457 (1871) uphold the constitutionality of the Legal Tender Act of 1862.

[46] Even so, Justice Field never addressed the main point of English common law equity, which was to protect public interests.