Handbook Of The Law Of Contracts | by Wm. L. Clark, Jr.

In preparing this work the object has been to present the general principles of the law of contract clearly and concisely, with proper explanations and illustrations, - not to make a digest. There has been no attempt to be original for the mere sake of originality. Statements of rules have been freely taken from recognized authorities. So much use has been made of Sir William Anson's and Mr. Leake's works, that acknowledgment has not always been made in the notes. A general acknowledgment is therefore made here. Where matter has been obtained from other sources it has been duly acknowledged.

Title	Handbook Of The Law Of Contracts
Author	Wm. L. Clark, Jr.
Publisher	West Publishing Company
Year	1914
Copyright	1914, West Publishing Company
Amazon	Handbook of the law of contracts

By Wm. L. Clark, Jr. author of clark's handbook of criminal law, clark's handbook of corporations, etc., etc.

Third Edition By Archibald H. Throckmorton Professor Of Law, Indiana University

Preface To The Third Edition: The object of the editor in preparing this edition of Mr. Clark's work has been to make a careful revision of both text and notes. In the text, a few changes have been made, as, for example, in the pa...

Preface To The Second Edition: In preparing the present edition the editor has had the benefit of suggestions made by many instructors who have used Mr. Clark's book in the classroom. Some new matter has been added, which has led t...

Preface To The First Edition: In preparing this work the object has been to present the general principles of the law of contract clearly and concisely, with proper explanations and illustrations, - not to make a digest. There has...

Chapter I. Definition, Nature, And Requisites of Contract In General: 1-2. Contract Defined. 3. Agreement 4. Obligation. 5. Concurrence of Agreement and Obligation. 6. Promise. 7-9. Void, Voidable, and Unenforceable Agreements. 10. Essentials of Con...

Agreement: 3. Agreement is the expression by two or more persons, either by words or by conduct, of a common intention to affect the legal relations of those persons.4 There must be a meeting of two minds in one...

Communication Of Intention: Agreement further imports that there shall be a mutual communication between the parties of their intentions to agree, for without this neither could know the state of the other's mind. The law, there...

Reference To Legal Relations: An agreement, to be recognized as such by the law, so as to constitute a contract, must be an act in the law;11 that is, it must be, on the face of the matter, capable of having legal effects; and t...

Consequences Must Affect The Parties: In order that agreement may result in obligation, so as to constitute contract, the consequences of the agreement must affect the parties themselves; otherwise the verdict of a jury, which is an agree...

Obligation: 4. Obligation is a control exercisable by definite persons over definite persons for the purpose of definite acts or forbearances reducible to a money value.14 Obligation is a legal bond or tie whe...

The Parties Must Be Definite: The parties to an obligation must be definite, both those having the right to exercise control and those bound. A man cannot be under an obligation to the entire community. His liabilities to the poli...

The Rights And Liabilities Must Be Definite: To constitute an obligation enforceable in law, the rights and liabilities given and imposed must be definite. In other words, it must relate to definite acts and forbearances. The freedom of the pers...

Agreement Broader Term Than Contract: Agreement is a broader term than contract, and includes acts in the law of two kinds besides those which we ordinarily term contracts: (1) An agreement, for instance, may not create an obligati...

Sources Of Obligation 21 - Directly From Agreement: Obligation may arise directly from agreement. Here we find that form of agreement which constitutes contract. An offer is made by one person and accepted by another, so that one consents to intend, an...

Promise: 6. A promise is the communication by a person of an intention and willingness to be bound to do or to forbear from doing something at the request or for the use of another, when, but not before, that ...

Void, Voidable, And Unenforceable Agreements: 7. A void agreement is one that is entirely destitute of legal effect. 8. A voidable contract is one that is capable of being affirmed or rejected at the option of one of the parties, but which is ...

Essentials Of Contract: Having ascertained the particular features of contract as a juristic conception, the next step is to ascertain how contracts are made. A part of the definition of contract being that it is an agreemen...

Chapter II. Offer And Acceptance: 11-13. In General. 14-15. Communication by Conduct - Implied Contracts. 16. Communication of Offer. 17. Necessity and Effect of Acceptance. 18-20. Communication of Acceptance. 21. Characte...

Forms Of Offer And Acceptance: (1) A contract may originate in the offer of a promise, and its acceptance by simple assent, but this applies only to contracts under seal, for, as will presently be seen, the law requires a considera...

Executed And Executory Consideration: It will be noticed that cases (2) and (3) differ from (4) in an important respect. In (2) and (3) the contract is formed by one party doing all he can be required to do under the contract. The contrac...

Communication By Conduct - Implied Contracts: 14. An offer or its acceptance may be made by conduct as well as by words. 15. Where the terms of a contract are shown by the acts of the parties, the contract is said to be implied. It is, however...

"Implied Contracts" - The Term Explained: Contracts implied from the conduct of the parties are implied as a matter of fact, and not as a matter of law. There is, in fact, an agreement between the parties, though it is shown by their acts, an...

Communication Of Offer: 16. An offer is made when it is communicated to the offeree. It is plain that without communication of the offer there can be no consensus, and therefore no contract. Thus, in the case of an off...

Terms Of Offer Partly Uncommumcated: If an offer contains on its face the terms of a complete contract, the acceptor will not be bound by any other terms intended to be included, unless he knew those terms, or had their existence brought...

Necessity And Effect Of Acceptance: 17. An offer before it will become a binding promise must be accepted. It is the universal rule that an offer must be accepted before it will become a binding promise, and result in a contract.30 T...

Communication Of Acceptance: 18. Where the offer contemplates the performance of or forbearance from an act as the consideration of the promise of the offeror, the performance or forbearance is an acceptance, unless the offeror e...

Offer Of Promise For Act: Whether or not communication of the acceptance is essential to the formation of a contract must depend upon the nature and terms of the offer; that is, upon whether the offeror proposes to be bound up...

Offer To Guaranty Future Advances: An apparent exception to the rule that performance of the act without notification of acceptance completes the contract is found in the cases which hold that an offer to guaranty future advances to be...

Offer Of Promise For A Promise: On the other hand, where the offer contemplates a promise as the consideration of the promise of the offeror, it is obvious that words or conduct upon the part of the offeree indicating to the former ...

Contract By Correspondence: It is now settled that the acceptance in case of contract by correspondence where an answer is invited by post is complete as soon as the letter of acceptance is dispatched.53 Where an offer is made b...

Character, Mode, Place, And Time Of Acceptance: 21. The acceptance of an offer to result in a contract must be - (a) Absolute and unconditional. (b) Identical with the terms of the offer. (c) In the mode, at the place, and within the time ...

Agreement To Make Contract: If a person proposes to sell another property, and the latter accepts subject to the terms of a contract being arranged between their solicitors, there is no agreement, for the acceptance is not fin...

Acceptance Varying From Offer: An offer to sell a specified quantity of goods cannot be made binding on the proposer by ordering a less quantity, for there is no offer to sell any quantity greater or less than that specified.72 And...

Manner, Place, And Time Of Acceptance: It is also essential that the acceptance shall be made in the manner, at the place, and within the time expressly or impliedly designated in the offer. The proposer has the right to dictate terms in r...

Revocation Of Offer: 22. Until the moment of acceptance, an offer may be revoked, and a subsequent acceptance will be inoperative, except that - EXCEPTION - Where the party making the offer has contracted under seal or fo...

Offer Under Seal: It has been said that an offer under seal may not be revoked at common law.89 This view, however, is due to a misconception of certain English cases,80 which hold that a deed or contract under seal is...

Agreement To Hold Offer Open - "Refusals" And "Options": An offer, though coupled with a promise to hold it open for acceptance for a specified time, may nevertheless be revoked or withdrawn before the time has expired, provided it is not under seal and the...

Necessity Of Communication Of Revocation: Revocation must be communicated, or at least brought to the knowledge of the offeree, to have any effect. As we have seen, an acceptance may take effect at the moment it is dispatched. A revocation, o...

Efflux Of Time: An offer may lapse and be determined by the efflux of a specified time for acceptance. If a person should offer to sell goods if the offer is accepted by a certain day, an acceptance after that time...

Rejection: The rejection or refusal of an offer by the person to whom it is made causes the offer to lapse. In order that an acceptance may be effective after a refusal, the offer must have been renewed by the p...

Death Or Insanity Of Party: The death9 or insanity10 of either party before acceptance of an offer causes the offer to lapse. An acceptance communicated to the personal representatives of the proposer after his death cannot bind...

Offers To The Public Generally: 25. An offer need not be made to an ascertained person, but no contract can arise until it has been accepted by an ascertained person. In order that an offer may result in a contract it need not be...

Acceptance And Revocation: Offers of this character cannot result in contract obligation until they are accepted by an ascertained person by performing the services. Before the services are rendered, there is merely an offer, w...

Performance Of Services In Ignorance Of Offer - Motive: Suppose that the person performing the service does not know of the offer, or does not realize all its terms, does he thereby accept the offer and acquire a right to the reward? In a leading English c...

Intention To Create Legal Relations: In order that an offer or proposal may be turned into a binding contract by acceptance, it must be made in contemplation of legal consequences. A mere statement of intention, for instance, made in the...

Intention To Create Legal Relations. Part 2: Same - Incomplete Negotiations Similar to these cases are those in which the parties are carrying on negotiations, and have not yet come to an agreement. So long as the negotiations are incomplete,...

Intention To Create Legal Relations. Part 3: Same - Delivery It is sometimes said that delivery is necessary to give effect to a written contract, and this is true where by the agreement of the parties it is not to take effect until delivered...

Offer As Capable Of Creating Legal Relations - Definiteness And Certainty: An offer or proposal must be capable of creating legal relations, or no contract can result. An agreement cannot create an obligation, or legal relations, unless it is capable of being enforced by the...

Chapter III. Classification Of Contracts - Contracts Under Seal And Contracts Of Record: 27. Classification of Contracts. 28. Contracts of Record. 29. Contracts Under Seal. 30-32. How Contracts Under Seal are Mada 33. Characteristics of Contract Under Seal. 34. Necessity fo...

Classification Of Contracts: 27. Contracts are divided into - (a) Contracts dependent for their validity upon their form alone, or strictly formal contracts. These are: (1) Contracts of record. (2) Contracts under seal. ...

Judgments: A judgment of a court of record awarding a sum of money to one of two litigants, either by way of damages or for costs, lays an obligation upon the other to pay the sum awarded. The judgment is entere...

Characteristics Of Judgment - Estoppel: The characteristics of an obligation of this nature are these: (1) Its terms, so long as it has not been regularly vacated or reversed, admit of no dispute, but are conclusively proved by a product...

Recognizance: A recognizance is an obligation of record entered into generally, but not necessarily, in a criminal case, before some court of record or magistrate duly authorized, with condition to do some particul...

How Contracts Under Seal Are Made: 30. A deed must be in writing, and must be sealed and delivered, and possibly signed. 31. It takes effect from the date of its delivery. 32. ESCROW - A deed may be delivered to a third person to...

How Contracts Under Seal Are Made. Part 2. Delivery: To render an instrument under seal a valid and binding contract, it must be delivered.24 Delivery may be effected either by actually handing the instrument to the other party himself,25 or to a strang...

How Contracts Under Seal Are Made. Part 3. Escrow: A deed may be delivered to a stranger, to be by him delivered to the other party to it on the fulfillment of certain conditions, in which case it does not take effect until the condition is fulfilled....

Deed Poll And Indenture: Formerly there was a distinction between a deed poll and an indenture. A deed poll was a deed made by one party, and having a polled or smooth-cut edge. Where a deed was made by two or more parties, a...

Exceptions: (1) Contracts in partial restraint of trade, though under seal, require consideration. 40 Leake, Cont 79. 41 Leake, Cont. 79; Powell v. Duff, 3 Camp. 181; Weeks v. Maillardet, 14 East, 508. Blan...

Estoppel By Deed: Statements made in a simple contract, though strong evidence against the parties thereto, are not absolutely conclusive against them, and may be contradicted. Statements made in a deed, however, are a...

Limitation Of Actions: A right of action arising out of a simple contract is barred by the lapse of a shorter period of time than a right of action arising out of a contract under seal. The respective periods vary somewhat ...

Gratuitous Promises: At common law, a gratuitous promise, or promise for which the promisor obtains no consideration, is binding if made under seal,51 but is absolutely void in the absence of a seal. This characteristic o...

Gratuitous Promises. Continued: Same - Statutory Changes In The Law In some of the states the common-law rules in relation to sealed instruments have been either altogether abolished or greatly modified by statute. In some states...

Necessity For Contract Under Seal: 34. A contract under seal is necessary at common law - (a) Where the promise is without consideration. (b) Formerly, corporations could only contract under seal, with some few exceptions; but wi...

At Common Law - Gratuitous Promises - Contracts With Corporations: There are two cases in which the old common law required that a contract should be made under seal, namely: (1) Where the contract was not founded on a consideration; and (2) where it was made by a co...

Chapter IV. Contracts Required To Be In Writing - Statute Of Frauds: 35-36. In General of Requirement of Writing. 37 Statute of Frauds - In General. 38. Contracts within Section 4. ...

In General Of Requirement Of Writing: 35. At common law, bills of exchange and promissory notes must be in writing. 36. By statute, writing is in some states declared necessary for the following contracts: (a) Acceptance of a bill o...

Common Law: The only requirement of form for simple contracts which can be said to exist independently of statute is in the case of negotiable bills of exchange and promissory notes. A bill of exchange is a kind ...

Statutory Requirements Of Form: The statutory requirements of form in simple contracts are mainly to be found in the statute of frauds, but before going into these we must notice some others which are not so general. At common la...

Statute Of Frauds: The famous statute of frauds and perjuries, 29 Car. II. c. 3, was enacted in England in 1677,11 and, as stated in its recital, had for its object the prevention of many fraudulent practices, which ar...

Statute Of Frauds - In General: 37. The statute does not apply to - (a) Contracts created by law. (b) Instruments created under, and deriving their obligation from, special statutes. (c) Executed contracts. 7 25 Cyc. 135...

Statute Of Frauds - In General. Part 2: Same - Contracts Within Section 4 38. The fourth section of the English statute, which has been substantially followed in most of the states, enacts that No action shall be brought, (a) Whereb...

Statute Of Frauds - In General. Part 3: Same - Promise To Answer For Debt, Default, Or Miscarriage Of Another 40. The following points should be noted: (a) The debt, default, or miscarriage must be that of another person, and, there...

Statute Of Frauds - In General. Part 3. Part 2: 30LARSON v. JENSEN, 53 Mich. 427, 19 N. W. 130, Throckmorton, Cas. Contracts, 60; Hartley v. Varner, 88 111. 561; Nelson v. Boynton, 3 Mete. (Mass.) 396, 37 Am. Dec. 148; Greene v. Burton, 59 Vt. 423,...

Statute Of Frauds - In General. Part 3. Part 3: 36 Williams v. Leker, 3 Burr. 1886; Dock v. Boyd, 93 Pa. 92; Farley v. Cleveland, 4 Cow. (N. Y.) 432, 15 Am. Dec. 387; Peck v. Goff, 18 R. I. 94, 25 Atl. 690; Woodruff v. Scaife, 83 Ala. 152, 3 South....

Promise To Indemnify: There is no subject connected with the statute of frauds that is more difficult or has given rise to greater variety of opinion than contracts of indemnity. Is a promise to indemnify or save another h...

Promise To Indemnify. Part 2: Same - Agreement In Consideration Of Marriage 41. The statute applies to any agreement made upon consideration of marriage. This clause of the statute does not apply to mutual promises to marr...

Promise To Indemnify. Part 3: Same - Contract Or Sale Of Lands, Or Any Interest In Or Concerning Them 42. The following general rules may be mentioned: (a) The contract must be for a substantial interest in land. (b) Fruc...

Crops And Other Products Of Land: Probably the chief question of interest with reference to this subject relates to the sale of crops and other products of land. A distinction exists between what are called fructus industriales, suc...

Licenses And Easements: A mere license to enter upon land and do a particular act or series of acts - as in the case of a license to enter upon land and remove property sold to the licensee - is not an interest in land, with...

Statutes Varying From The English Statute: The statute in some states varies from the English statute. In Illinois, for instance, it applies to any contract for the sale of lands, etc., or any interest in or concerning them, for a longer term...

Possibility Of Performance: If, upon a reasonable construction of the contract, it appears to have been understood by the parties that it was not to be performed within the year, it is within the statute.79 In order that an agre...

Possibility Of Performance. Continued: 82 Kent v. Kent, 62 N. Y. 560, 20 Am. Rep. 502; Heath v. Heath, 31 Wis. 223; Carr v. McCarthy, 70 Mich. 258, 38 N. W. 241; Bell v. Hewitt's Ex'rs, 24 Ind. 2S0; Harper v. Harper, 57 Ind. 547; McGregor ...

Part Performance Within A Year: Another rule, which is established in England and in most of our states, is that an agreement does not fall within the statute if that which one of the parties is to do is all to be performed within a...

Particular Contracts: According to the weight of authority, this clause of the statute applies to promises to marry which are, by their terms, to be performed after the expiration of a year.97 It has, however, been held...

Form Merely Evidentiary: The statute does not require that the contract itself be reduced to writing. A valid oral contract may exist, but if it is within the statute of frauds it may not be enforced for the want of written e...

Showing As To The Parties: The memorandum of the contract must show who are the parties to it; not only who is the promisor, but who is the promisee as well. Thus, where a person promised that he would answer for the debt of a ...

Showing As To Terms: The memorandum must contain all the material terms of the contract expressed with such certainty that it may be understood without recourse to parol evidence.24 Where a contract does not fall withi...

Showing As To Terms. Continued: Same - Price And Terms Of Payment The price is usually regarded as an essential term of a contract of sale and as such is required to be stated in the memorandum.27 This is certainly true where the...

Showing As To Subject-Matter: The writing must also show the subject-matter, at least to such an extent that it can be identified.32 Parol evidence is admitted to identify the subject-matter to which the writing refers; as, for in...

Showing As To Consideration: Not only must a consideration for the promise sought to be enforced exist, but it must, according to the rulings in England, and probably in most of the states, expressly or impliedly appear in the me...

Separate Papers: The memorandum may consist in any number of letters, telegrams, or other pieces of paper.41 The papers, however, must be connected, consistent, and complete. It is generally held that the connectio...

Signature: It is essential that the memorandum be signed by the party to be charged, or some other person by him lawfully authorized.45 As to whether it must have been signed by the party seeking to enforce it...

Signature By Agent: The memorandum may be signed by the duly authorized agent of the party to be charged.56 The agent must not be the other contracting party, but some third person, for to allow otherwise would be to ope...

Signature By Agent. Continued: Delivery The memorandum, being required merely as evidence of the contract, need not be delivered.66 Nondelivery is only material in so far as it may tend to show that no final agreement has been r...

Part Performance: At law, unless the statute so provides, part performance of an oral contract does not take it out of the operation of the statute;74 but it is otherwise in equity. Same - In Equity A court of eq...

Compelling Execution Of Writing: In some states, courts of equity, in the exercise of their jurisdiction to grant relief in case of fraud, have compelled the execution of a written contract where the party sought to be charged had ag...

The Contract As A Defense: The provision that no action shall be brought on oral contracts within the statute not only prevents suit on such a contract, 285; Baker v. Baker, 2 S. D. 261, 49 N. W. 10G4, 39 Am. St. Rep. 776;...

Waiver Of Statute: A contract not put in writing, as required by the statute of frauds, not being void, but simply unenforceable by suit, the failure of the contract to comply with the statute may be waived by the party...

Waiver Of Statute. Part 2: Same - What Are Goods, Wares, And Merchandises 55. Goods, wares, and merchandises comprehend: (a) All corporeal movable property. (b) In the United States, generally (but not in England), i...

Contracts For Work, Labor, And Materials: A difficult question has arisen where labor has to be expended on the thing sold before the contract is executed, and the property transferred, as to whether the contract is for the sale of goods with...

Goods, Wares, And Merchandises: In England the term goods, wares, and merchandises has been limited to corporeal movable property, and is held not to include shares of stock, choses in action, and other incorporeal rights and prop...

Acceptance: Acceptance, as the meaning imports, is an assent by the buyer, meant to be final, that the goods are to be taken by him under and in performance of the contract.88 If the contract is for sale of speci...

Actual Receipt: Where acceptance is shown, a very liberal construction is placed on actual receipt. Receipt implies delivery, and must be with the seller's consent, and with the intention of transferring possession t...

Actual Receipt. Part 2: Same - Earnest And Part Payment 57. EARNEST. Earnest is something of value given and received to mark the final assent of the parties to the bargain. 58. PART PAYMENT. Part payment may be made a...

Actual Receipt. Part 3: Same - Form Required 59. The rules as to the form required by section 17 are the same as in case of section 4, except that the consideration of the promise of the party to be charged need not appea...

Chapter V. Consideration: 61,62. Consideration Defined. 63,64. Necessity for Consideration, and Presumption. 65.66. Adequacy of Consideration. ...

Consideration Defined: 61. Consideration is that which moves from the promisee, or to the promisor, at the express or implied request of the latter, in return for his promise. 62. As the term is used in the law of contra...

Consideration Distinguished From Motive: Motive is not the same thing with consideration. Consideration means something which is of value in the eye of the law, moving from the promisee.9 Confusion between motive and consideration has, how...

Consideration Distinguished From Motive. Continued: Same - Moral Obligation There are some cases to the effect that a mere moral obligation is sufficient consideration to support a promise,14 but it is now well settled to the contrary.15 A man may b...

Necessity For Consideration, And Presumption: 63. NECESSITY - A valuable consideration is essential to the validity of every simple contract. EXCEPTION - Want of consideration does not avoid a negotiable instrument in the hands of a bona fide ...

Gratuitous' Employment: The promise of a gratuitous service, although not enforceable as a promise, involves a liability to use ordinary care and skill in performance;26 or, as it is usually put, the promisee is not liable...

Statutory Presumption Of Consideration: In some states, statutes have been enacted declaring that all written instruments shall be presumptive evidence of a consideration, rebuttable, however, by showing that there was in fact no considerat...

Adequacy Of Consideration: 65. The validity of the contract is not dependent upon the adequacy of the consideration, provided it is something of. value in the eye of the law.38 66. In equity, inadequacy of consideration, if ...

Exception In Exchange Of Fixed Values: The doctrine that courts of law will not inquire into the adequacy of consideration is based on their inability to determine what value the parties may have attached to a thing given or promised, and ...

Reality Of Consideration: Although courts of law will not inquire into the adequacy of consideration, they will insist that it shall not be illusory or unreal. 50 SCHNELL v. NELL, 17 Ind. 29, 79 Am. Dec. 453, Throckmorton C...

Forms Of Consideration: The consideration for a promise may be an act or a forbearance, or a promise to do or forbear. When a promise is given for a promise, the contract is said to be made upon an executory consideration. T...

Voluntary Subscriptions: Voluntary subscriptions by a number of persons to promote some object in which they have a common interest - as, for instance, where a number of persons voluntarily promise to pay a certain sum each t...

Contingent And Conditional Promises - Options: In bilateral contracts - that is, where the consideration for a promise is a promise - the whole contract may be intended by the parties to be contingent, so that obligation is to arise under it only ...

Contingent And Conditional Promises - Options. Continued: Same - Forbearance To Exercise A Right 71. Forbearance or a promise to forbear from doing what one is otherwise entitled to do is a sufficient consideration. 72. Forbearance or a promise to forb...

Time Of Forbearance: Questions have been raised as to the length of time over which a forbearance to sue must extend in order to constitute a consideration. It has even been held that a promise of forbearance for an unspe...

Forbearance To Dp What One Cannot Legally Do: It is no consideration for a promise for a man to forbear or to promise to forbear from doing what he is not legally entitled to do.91 This proposition would seem to be obvious, but questions have ari...

Compromise: A common form in which a forbearance appears as the consideration for a promise is in the settlement or compromise of a disputed claim. Forbearance by a person to insist upon a demand, or to prosecute...

Compromise. Part 2: Same - Doing What One Is Bound To Do 74. IN GENERAL. Doing or promising what one is already legally bound to do is, as a rule, no consideration. Such previous obligation may arise (a) By virtue ...

Compromise. Part 3: Mutual Discharge and Substituted Agreement - Additional Compensation In the case of a contract which is wholly executory, - that is, a contract in which there is something to be done on both sides, - ...

Promise To Third Person To Perform Existing Contract: In England and Massachusetts it has been held that if a man is bound by a contract to do a particular thing, and, while it is doubtful whether he will do it, a third person promises to pay him if he w...

Part Payment In Satisfaction Of Debt: Under the rule we have been discussing, the simple payment of a smaller sum in satisfaction of a larger is not a good discharge of a debt, for it is doing no more than the debtor is already bound to d...

Part Payment In Satisfaction Of Debt. Part 2: Same - Consideration For Release Of Residue The rule that part payment of a debt does not discharge the debtor does not apply where the creditor, in addition to the part payment, receives something...

Part Payment In Satisfaction Of Debt. Part 3: Same - Unliquidated Claim The rule that payment of less than the amount claimed is no consideration for a discharge applies only when the sum due is definite and certain. The payment of less than t...

Part Payment In Satisfaction Of Debt. Part 4: Same - Accord And Satisfaction Whether the sum due is certain or uncertain, the consideration for the promise to forego the residue of the debt must be executed. It is not enough that the parties a...

Impossible Promise: The courts will also hold a consideration unreal, and therefore no consideration at all, where it is impossible upon its face. As will presently be seen, practical impossibility, unknown to the partie...

Vague Promise: Again, a consideration may be unreal because it is so vague in its terms as to be practically incapable of enforcement. In such case it may be classed with impossible considerations. Where, for instan...

Legality Of Consideration: 79. The consideration, to support a promise, must be legal; and therefore a promise to do or doing what is illegal is no consideration.60 It is well to state this rule here, as indicating a necessa...

Executed Consideration: A contract arises upon an executed consideration when one of the parties has either in the act which amounts to a proposal or to an acceptance, as the case may be, done all that he is bound to do unde...

Past Consideration: Strictly, it is a misnomer to speak of a past consideration, for it is in fact no consideration at all. A past consideration, so called, is some act or forbearance in time past by which a man has be...

Exceptions To The Rule As To Past Consideration: (1) It is generally declared a past consideration will support a subsequent promise if the consideration was given at the request of the promisor. In Lampleigh v. Braithwait the plaintiff sued for mon...

Exceptions To The Rule As To Past Consideration. Continued: (3) The third exception, or apparent exception, to the rule that a past consideration will not support a promise is a substantial and important one, and one about which there is no doubt. It is found ...

Chapter VI. Capacity Of Parties: Thus far we have been dealing with the contract itself, and those elements in its formation which are essential to give it even a prima facie validity. Communication by offer and acceptance, and form ...

Political Status - States And United States: 82. The United States and the states may enter into contracts through their authorized agents, but only in furtherance of the objects of government, and subject to the limitations of the constitution....

Political Status - States And United States. Part 2: Same - Foreign States And Sovereigns 84. Foreign sovereigns and states and their representatives may make contracts and sue thereon in our courts, but they cannot be sued unless they submit. For...

Political Status - States And United States. Part 3: Same - Pre-Existing Contracts Whether a pre-existing contract is dissolved or not by the war depends upon whether it is essentially antagonistic to the laws governing a state of war. If it is of a ...

Professional Status: 90. In England a barrister cannot sue upon a contract for compensation for his services, but this disability does not exist in the United States. In England, a barrister cannot sue for fees due him...

Infants - In General: 91. Some contracts of an infant are valid, and a few, in some jurisdictions, are absolutely void, but most of his contracts are simply voidable at his option. 92. VALID CONTRACTS - The valid contra...

The Old Doctrine As To The Effect Of An Infant's Contract: There is much confusion and conflict in the authorities as to the effect of the contracts of infants. In an early English case the doctrine was stated to be that (1) where the court could pronounce th...

Valid Contracts - Quasi Contracts: Quasi contracts, or so called contracts created by law because of a legal duty on the part of the person bound, are as binding on an infant as on an adult.41 The common law creates, as an incident to ...

Valid Contracts - Quasi Contracts. Continued: Same - Contract In Performance Of Legal Obligation Nor does the rule apply where, by his contract, an infant has only done that which he was bound by law to do and could have been compelled to do. ...

Void Contracts: As already stated, some courts still hold that contracts manifestly and without doubt prejudicial to the infant are void.55 Among the contracts which have been held void upon this ground may be mentio...

Appointment Of Agent: It is very generally laid down, even by courts which do not recognize the old doctrine as to void and voidable contracts, that an infant cannot appoint an agent or attorney, and that such appointment,...

Appointment Of Agent. Continued: Same - Liability For Necessaries 95. An infant is liable for the reasonable value of necessaries furnished him. 96. What are necessaries will depend upon the particular circumstances. The term i...

What Are Necessaries - In General: Lord Coke has said that an infant's necessaries are his necessary meat, drinke, apparel, necessary physicke, and such other necessaries, and likewise for his good teaching' or instruction, whereby he...

Must Concern His Person: The things furnished, to come within the term necessaries, must concern the person of the infant, and not his estate. An infant, therefore, is not bound by contracts for things necessary to carry on...

Money: Money, as such, is not regarded as necessary. An infant, it was said in a New York case, is not answerable for money borrowed, though expended by him for necessaries; nor for money borrowed to buy ...

Question Of Law Or Fact: Difficulty has arisen in determining the respective provinces of the court and jury in ascertaining whether things supplied to an infant were necessaries. It is frequently stated in the American cases...

Express Contract For Necessaries: The obligation of an infant to pay for necessaries being quasi contractual, he is liable without an express contract.4 The law creates an obligation on his part to pay what the necessaries are reasona...

When Disaffirmance Necessary: The rule seems to be that, where an infant acquires an interest in permanent property, to which obligations attach, or enters into a contract which involves continuous rights and duties, benefits and ...

When Ratification Is Necessary: The cases of which we have just been speaking, and which require an express disclaimer to avoid the effect of the contract, are all cases in which an interest was acquired in permanent property to whi...

When Ratification Is Necessary. Part 2. Time Of Avoidance: 102. Executory contracts, or executed contracts relating to personalty, may be avoided by an infant either before or after attaining his majority; but conveyances of land cannot be disaffirmed during ...

Writing Required By Statute: In some jurisdictions it is declared by statute that, with specified exceptions, no action shall be maintained on any contract made by an infant, unless he, or some person lawfully authorized, has rat...

Where No Statutory Requirement: In the absence of such a statutory provision, ratification may either be by an express new promise, made orally or in writing, or it may be implied from acts or declarations clearly showing an intenti...

Where No Statutory Requirement. Part 2: Same - Implied Ratification Unless a statute so requires, an express promise in terms is not necessary in order to constitute ratification of an obligation incurred during infancy. Where the decla...

Where No Statutory Requirement. Part 3: Same - What Amounts To Disaffirmance 108. A contract is disaffirmed by any conduct which is inconsistent with the existence of the contract, and shows an intention not to be bound by it. Disaffi...

Where No Statutory Requirement. Part 4: Same - Extent Of Ratification Or Disaffirmance 109. The ratification or disaffirmance must be in toto. The contract cannot be ratified or disaffirmed in part only. The disaffirmance or ratificat...

Where No Statutory Requirement. Part 4. Part 2: 62 Ante, p. 209. 63 Craighead v. Wells, 21 Mo. 409; Price v. Furman, 27 Vt. 268, 65 Am. Dec. 194. See, also, Nichols & Shepard Co. v. Snyder, 78 Minn. 502, 81 N. W. 516. See Infants, Dec. Dig....

Where No Statutory Requirement. Part 4. Part 3: 150 Mo. 606, 51 S. W. 1040, 73 Am. St. Rep. 464; MacGreal v. Taylor, 167 U. S. OSS, 17 Sup. Ct 961, 42 L. Ed. 326; Bullock v. Sprowls, 93 Tex. 188. 54 S. W. 661, 47 L. R. A. 326. 77 Am. St Rep. 849; W...

Where No Statutory Requirement. Part 5: Same - Effect Of Ratification And Disaffirmance 112. Ratification renders the contract absolutely binding ab initio. 113. Disaffirmance renders the contract absolutely void ab initio, and the ri...

Disaffirmance: So disaffirmance of a contract relates back to the date of the contract, and renders it void on both sides ab initio;80 and it follows that the rights of the parties must be determined as if there nev...

Disaffirmance. Continued: Same - Torts In Connection With Contracts 115. Though an infant is liable for his torts, a breach of contract cannot be treated as a tort, so as to make him liable. The tort must be separate and in...

Insane Persons - In General: 117. As a rule, a contract entered into by an insane person, or person non compos mentis, is voidable at his option; but the rule is subject to exceptions, as follows: 4 EXCEPTIONS - (a) The follow...

Effect Of Contracts: Thus far we have spoken of the contracts of a person non compos mentis as being voidable only, and as a rule they are so; but, as in the case of infants, some of his contracts as valid, and some of th...

Effect Of Contracts. Continued: Same - Void And Voidable It has been held by some courts that the deed of an insane person,24 or a power of attorney or other appointment of an agent,25 is absolutely void. In most jurisdictions, h...

Inquisition And Adjudication Of Lunacy: In most jurisdictions it is held - in some, however, by reason of express statutory provisions - that if a person has been judicially determined to be insane, and placed under guardianship, the decree...

Ignorance And Good Faith Of The Other Party: In some states it is held that the contract of an insane person may be avoided by him, though it is fair and reasonable, and though it was entered into by the other party in perfect good faith, and in...

Ignorance And Good Faith Of The Other Party. Continued: Same - Ratification And Avoidance 118. The voidable contract of a person non compos mentis may be ratified or avoided by himself when sane, or by his guardian during insanity, or by his representat...

Return Of Consideration On Avoidance: In those jurisdictions where an insane person's contract is voidable, whether it is executed or not, and whether or not the other party acted in good faith and in ignorance of his infirmity, a person ...

Avoidance As Against Third Persons: The fact that third persons have acquired an interest under the contract of a person non compos mentis, in good faith, for value, and without notice of his infirmity, cannot defeat his right to avoid ...

Drunken Persons: 122. A contract made by a person while he is so drunk as to be incapable of understanding its nature and effect is voidable at his option, except that - EXCEPTIONS - He is liable on contracts creat...

Married Women: 124. At common law, as a rule, a married woman, during coverture, is incapable of contracting, and can incur no contractual obligation. EXCEPTIONS AT COMMON LAW - (a) If the husband is civilly dead...

Exceptions - At Common Law: At common law a married woman may acquire contractual rights by reason of personal services rendered by her, or by reason of the assignment or execution to her of a chose in action, such as a bond or ...

Exceptions - At Common Law. Part 2: Same - In Equity In equity a married woman may have property settled upon her to her separate use, in which case she may dispose of it in the same manner as if she were a feme sole. In the exercise...

Corporations: 125. A corporation, by reason of its artificial nature, can only contract through a duly-authorized agent. 126. Formerly, with certain exceptions, it could only contract under its corporate seal; b...

Mode Of Contracting - Seal: It was formerly the rule, subject to some exceptions, that a corporation could manifest its intention and act only by the use of its corporate seal;88 but this doctrine is no longer recognized in this...

What Contracts Are Authorized: The power of a corporation to enter into contracts is limited, in respect of the matter of the contract, by the charter or act of incorporation; and by other statutes binding upon it. Being a creature...

Ultra Vires Contracts: A contract made by a corporation ultra vires - that is, beyond the powers of the corporation executing it - is in many jurisdictions held to be void, so that no action can be brought upon it.98 In acc...

Chapter VII. Reality Of Consent: 129. In General. 130-131. Mistake. 132-134. Effect - Remedies. 135-138. Misrepresentati...

Mistake: 130. Mistake is where the parties did not mean the same thing, or where one or both, while meaning the same thing, formed untrue conclusions as to the subject-matter of the agreement. 131. Mistake ...

Mistake As To The Nature Of The Transaction - Written Instrument: There are cases in which a contract is void because of a mistake as to the nature of the transaction. Such cases arise in the execution of written instruments, and must arise almost of necessity from ...

Mistake As To The Person With Whom The Contract Is Made: A mistake as to the person with whom the contract is made may avoid it; as, for instance, where a contract is made with one person under a belief that it is being made with another. Where a man intend...

Mistake As To Subject-Matter Of Contract: If a man knows the nature of the transaction, and the party with whom he is entering into legal relations, it is, for the most part, his own fault if the subject-matter of the contract - the thing con...

Mistake As To Subject-Matter Of Contract. Part 2: Same - Mistake As To Identity Of Subject-Matter An agreement may be void where there is a mistake as to the identity of the subject-matter; as, for instance, where the contract is in reference to a...

Mistake As To Price: A mistake by one party in the statement of the price, which mistake is not known to the other, does not affect the validity of the contract formed by the acceptance of the offer as made.40 Of cours...

Mistake Of Law: As a rule, ignorance or mistake of law, by reason of which the parties do not understand the legal effect of their contract, does not avoid it, unless there is some fraud, or unless there is a relatio...

Mistake Of Law. Continued: Same - Effect - Remedies 132. EFFECT. Mistake, where it has any effect, renders a contract void. 133. REMEDIES AT LAW. At common law the contract may be repudiated if it is executory, or, if exe...

Misrepresentation: 135. Misrepresentation is an innocent misstatement or nondisclosure of facts. It must be distinguished from (a) Fraud, which is a false representation (or nondisclosure under such circumstances tha...

What Amounts To A Representation: A representation is an affirmation by words or conduct of a matter of fact by way of inducement to the making of a contract. In speaking of representations in entering into contracts of insurance, Mr....

Misrepresentation Distinguished From Fraud: Misrepresentation, as the term is here used, must be distinguished from fraud, with which we are to deal presently. Misrepresentation means an innocent misstatement or nondisclosure of facts, whil...

Misrepresentation Distinguished From Conditions And Warranties: It may be stated as a rule, subject to exception in case of certain contracts to be hereafter noticed, that innocent misrepresentation or nondisclosure of fact does not affect the validity of consent....

Misrepresentation Distinguished From Conditions And Warranties. Continued: Same - Various Senses Of The Terms And Their Effect It will be observed 62 that in the opinion above quoted condition is used in two senses - as meaning a statement that a thing is, and a promise...

Conclusion As To Effect Of Misrepresentation: From what has been shown, we may state the rule as to misrepresentations in this way: Whenever the validity of a contract is called in question, or the liabilities of the parties are said to be affect...

Excepted Contracts Affected By Mere Misrepresentation: To the general rule that misrepresentations not amounting to fraud, and not forming a term of the contract, do not affect its validity, there are exceptions in case of certain special contracts someti...

Excepted Contracts Affected By Mere Misrepresentation. Part 2: Same - Contracts For The Sale Of Land It is said by Sir William Anson that contracts for the sale of land are uberrimæ fidei, and therefore within the exception to the rule that innocent misreprese...

Excepted Contracts Affected By Mere Misrepresentation. Part 3: Same - Contracts To Purchase Shares In Companies Another exception is in the case of contracts with the promoters of a corporation for the purchase of shares. It is said in an English case: Those ...

Excepted Contracts Affected By Mere Misrepresentation. Part 4: Same - Contracts Of Suretyship The contract of suretyship has sometimes been treated as being within this excepted class of contracts, but as regards the formation of the contract it is not really ...

Effect In Equity: This rule as to the effect of misrepresentations is not adhered to in courts of equity. A false statement made by one of the parties to the other has been held sufficient ground for refusing specific ...

Fraud: 139. Fraud is a false representation of a material fact, or nondisclosure of a material fact under such circumstances that it amounts to a false representation, made with knowledge of its falsity, or ...

Fraud Is A False Representation: Subject to exceptions to be presently explained, a mere nondisclosure of fact, without more, is not fraud, whatever the intention may be. There must be some active attempt to deceive, either by a stat...

Fraud Is A False Representation. Continued: Most exceptions to the rule that nondisclosure is not fraud lie in the distinction between mere silence where there is no duty to speak, and concealment of facts which are peculiarly within the knowle...

Mistake As To Nature Of Promise Known To Other Party: A mistake on the part of one of the parties to a contract, as a misunderstanding in respect to the nature or qualities of the subject-matter, or a mistake in fixing or. expressing the terms, not induc...

Character Of Representations - Opinion Or Expectation: To constitute fraud, the representation must be of a past or existing fact. What has been said in treating of misrepresentation is equally applicable here. A mere expression of opinion, belief, or exp...

Character Of Representations - Opinion Or Expectation. Part 2: Same - Statement Of Intention, Expectation, Or Promises A representation of fact is a statement that a thing was or is, and does not, therefore, include expressions of intention or expectation, or ...

Character Of Representations - Opinion Or Expectation. Part 3: Same - Materiality Not only must the representation be of a fact, but it must be of a material fact. A false representation of an immaterial fact, whatever may have been the intention, has no effec...

Right To Rely On Statements: In order that a person may be entitled to rescind or maintain an action for deceit, the representations must have been of such a character, and must have been made under such circumstances, that he ha...

Right To Rely On Statements. Continued: Same - Credulity And Negligence Of Party Defrauded It would seem upon principle that a person cannot avoid the effect of his fraudulent misrepresentation on the ground of the credulity of the injur...

Knowledge Of Falsity - Recklessness: A representation is fraudulent if it is made with knowledge of its falsity or without belief in its truth. The mere absence of belief is enough, and hence, if a man makes a misrepresentation in reckle...

Intention: The representation must have been made with the intention that it should be acted upon by the injured party.46 Another statement of this rule is that the representation must be made as part of the sam...

Intention. Continued: Same - Dishonesty Of Motive If a person makes a representation which was fraudulent as has been above explained, it is immaterial that he may not have been actuated by any dishonest motive. If a ma...

Representation Must Deceive: A false representation, to constitute fraud, must actually deceive; that is, it must be relied on by the other party, and must induce him to act to his prejudice. If it is not believed, or the party d...

Injury Must Result: It is essential, in order to sustain an action of deceit, or to give a party the right to avoid a contract on the ground of fraud, that he shall have been prejudiced or injured by the fraud.60 Where, ...

Limitations To Right To Rescind: As a rule, the defrauded party must elect to rescind within a reasonable time after discovering the fraud,74 or, what amounts to the same thing, after he could have discovered it by the use of due di...

Return Of Consideration - Placing In Statu Quo: The contract must be rescinded in toto; it cannot be rescinded in part and affirmed in part.83 As a rule, therefore, it is a condition precedent to the right to rescind a contract on the ground of fra...

Return Of Consideration - Placing In Statu Quo. Continued: Same - As Against Third Persons It follows from the principle that the contract is voidable, and not void, that, when innocent third persons have for value acquired^ rights under the contract, thei...

Duress: 142. Duress is actual or threatened violence or imprisonment, by reason of which a person is forced to enter into a contract. To affect the contract, however, (a) It must have been against or of th...

Duress Per Minas: Duress per minas, as defined at common law, is where a person is forced to enter into a contract (a) from fear of loss of life; (b) from fear of loss of limb; (c) from fear of mayhem; (d) from fear of...

Duress Of Imprisonment: Imprisonmrnt--is--any restraint of a person's liberty, whether it be in prison or elsewhere. Any unlawful imprisonment, whatever may be the ground of illegality, constitutes duress, and avoids a contr...

Duress Of Goods: Under the stricter rule which formerly prevailed, a promise was not given under duress if made in consideration of the release of goods from unlawful destruction or detention, and there is modern auth...

Against Whom: As a rul a contract entered into in order to relieve a third person is not voidable on the ground of duress.27 It should be noted, however, that a simple contract, the consideration for which is the d...

Against Whom. Continued: By Whom The duress, to be available as a defense, must have been inflicted or threatened by the other party to the contract, or by some one acting with his connivance.81 A person entering into a co...

Undue Influence: 145. Undue influence is a species of fraud. It may be said generally to consist - (a) In the use by one in whom confidence is reposed by another, or who holds a real or apparent authority over him,...

The Presumption From Circumstances: When it is said that equity presumes prima facie the exercise of undue influence from the circumstances, we mean that, when certain circumstances are shown to have existed, the court will, from that a...

Relationship Of Parties - Parental And Quasi Parental Relation: One class of circumstances which will raise the presumption that undue influence was used in procuring another to enter into a contract is where the party benefited stood in some such relation to him ...

Relationship Of Parties - Parental And Quasi Parental Relation. Part 2: Same - Fiduciary Relations Persons standing in a fiduciary relation occupy a relation of confidence, and are within this equitable rule. A contract between a trustee and his cestui que trust,48 or ...

Relationship Of Parties - Parental And Quasi Parental Relation. Part 3: Same - Continuance Of Presumption The presumption of undue influence from the parental or quasi parental relation does not cease as soon as the child becomes of age and is emancipated in law. His j...

Mental Weakness: Mere weakness of intellect, not so great as to render the person non compos mentis, will not of itself affect the validity of a contract.59 If, however, the other party has taken advantage of such wea...

Mental Weakness. Continued: Effect The rules respecting the right to rescind contracts entered into under undue influence follow, so far as equity is concerned, the rules which apply to fraud,68 but with one noticeable qualif...

Chapter VIII. Legality of Object: 147. In General. 14S. Classification of Unlawful Agreements. 149. Agreements in Violation of Positive Law. ...

Classification Of Unlawful Agreements: 148. For convenience in treatment, unlawful agreements may be classified, according to their matter or object, as (a) Agreements in violation of positive law; and (b) Agreements contrary to publ...

Agreements In Violation Of Positive Law: 149. Any agreement which involves the doing of an act which is positively forbidden by law, or, what amounts to the same thing, the omission to do an act which is positively enjoined by law, is illega...

Agreements Involving The Commission Of Crime: The simplest instance of an agreement contrary to positive law is an agreement to commit a crime or indictable offense. Every agreement to commit a crime or indictable offense, either as the final obj...

Agreement To Commit CIVIL Wrong: An agreement will generally be illegal if it contemplates a civil wrong to a third person, though the wrong may not be an indictable offense, and though the agreement may not amount to the crime of co...

Agreement To Commit CIVIL Wrong. Part 2: Same - Fraud In Connection With Sales At Auction Where property is put up for sale at public auction, any agreement between the auctioneer or person having control of the sale and third persons by ...

Agreement To Commit CIVIL Wrong. Part 3: Same - Publication Of Libel Since it is a civil wrong to publish a libelous book or article, even when it does not constitute a crime, an agreement contemplating such a publication is illegal. No a...

Agreement To Commit CIVIL Wrong. Part 4: Same - Illegality Distinguished From Fraud Fraud is a civil wrong, and an agreement to commit a fraud is an agreement to do an illegal act; but fraud as a civil wrong must be kept apart from fraud ...

Prohibition - Effect Of Penalty: A statute may render an agreement illegal by express prohibition or by imposing a penalty without an express prohibition. Where the statute expressly provides that a violation thereof shall constitute...

Doing Indirectly What Cannot Be Done Directly: What the law forbids to be done directly cannot be made lawful by doing it indirectly.28 Where a bank, for instance, which was itself prohibited from entering into a particular transaction, procured i...

Regulating Trade, Profession, Or Business: There are numerous statutes in all of the states, enacted for the purpose of protecting the public in dealing with certain classes of traders or professional men, and with certain articles of commerce...

Regulating Trade, Profession, Or Business. Continued: Same - Traffic In Intoxicating Liquors 41 Where a statute in terms prohibits the sale of intoxicating liquors, a contract of sale is of course invalid. Some difficulty has arisen where the statute ...

Contracts In Breach Of Sunday Laws: The common law does not prohibit the making of contracts on Sunday, and, in the absence of statutory prohibition, such contracts are as valid as if made on any other day.45 In most states, however, st...

Contracts In Breach Of Sunday Laws. Part 2: Same - Works Of Necessity Or Charity In all of the states the statutes expressly except from the prohibition works of necessity or charity, but as to what constitutes a work of necessity or charity...

Contracts In Breach Of Sunday Laws. Part 3: Same - Incomplete Transaetions The fact that negotiations are carried on, and the terms of a contract agreed upon, on Sunday, where the contract is not really made until a week day, does not render...

Usury: At common law a man could contract for and recover any amount of interest for a loan of money that the borrower might be willing to give; but, to protect persons in necessity against unconscionable ex...

Usury. Part 2: Same - Loan Of Money In the first place, there must be a lending and borrowing of money. If it is so understood by the parties, no shifting or contrivance for the purpose of disguising the real nat...

Usury. Part 3: Same - Principal Absolutely Repayable A loan being essential to usury, the contract must contemplate the absolute repayment of the principal. Thus, where a loan is made, to be returned at a fixed d...

Usury. Part 4: Same - Unlawful Intent There must be an intention to charge and pay the illegal rate.95 Ignorance of the law will not protect a party from the penalties of usury where it is committed; but where th...

Usury. Part 5: Same - Effect Of National Banking Act By the national banking act, national banks are authorized to exact interest at the rate permitted to individuals or to state banks of issue in the state in wh...

Wagers And Gambling Transactions: A wager has been defined as a contract conditional upon an event in which the parties have no interest except that which they create by the wager;3 but this attempts to limit the term to contracts n...

Wagers And Gambling Transactions. Part 2: Same - Offer Of Premium Or Reward Neither under the common law nor under the statutes against gaming, betting, and wagers is the bona fide offer of premiums or purses on horse races or other legiti...

Wagers And Gambling Transactions. Part 3: Same - Futures An agreement for the sale of stocks, grain, or any other commodity is a gambling contract where the parties do not intend an actual delivery, but agree that at the time fixed for del...

Lotteries: In England, and in most, if not all, of our states, lotteries are now prohibited by statute. A lottery has been defined as a scheme for the distribution of property by chance, among persons who hav...

Agreements Contrary To Public Policy: 154. Any agreement which is contrary to the policy of the law, or public policy, because of its mischievous nature or tendency, is illegal and void, though the acts contemplated may not be expressly p...

Agreements Contrary To Public Policy. Continued: Same - Agreements Tending To Injure The Public Service 156. Among the agreements which are illegal as tending to injure the public service may be mentioned - (a) Agreements for the sale of, or othe...

Traffic In Public Offices: As stated by Greenhood,39 therefore, any contract to appoint one to public office,40 or involving the sale of a public41 or quasi pub- 38 Benson v. Bawden, 149 Mich. 5S4, 113 N. W. 20, 13 L. R. A....

Agreements Affecting The Compensation Of Public Officers: As we have seen, a promise to pay a public officer for performing duties which he is required by law to perform without such compensation, or to pay him more than the fees fixed by law, is void for la...

Assignment Of Salary Or Pension By Officer: The rule also applies to the assignment of their salaries by public officers. One of the reasons given by an English judge was that it is fit that the public servants should retain the means of a dec...

Lobbying Contracts: What are known as lobbying contracts also fall within this class of illegal agreements. Any agreement to render services in procuring legislative action, either by congress or by a state legislature...

Corruption Of Public Officers: Any contract, says Greenhood,64 contemplating the use of secret influence with public officers,65 or calculated to induce the use of such influence,66 is void, especially when one of the parties is...

Agreements By Public Or Quasi Public Corporations: As falling within this class of illegal contracts may also be mentioned agreements by public or quasi public corporations which interfere with their duties to the public.73 Railroad companies and othe...

Agreements Affecting The Government, Etc: There are many agreements which, though not tending to injure the public service, injuriously affect the government itself in some other way, and which are therefore illegal, as contrary to public pol...

Agreements Affecting The Government, Etc. Continued: Same - Agreements Tending To Pervert Or Obstruct Public Justice 158. Any agreement which tends to pervert or obstruct public justice is contrary to public policy, and void. 159. COMPOUNDING CRIM...

Compounding Crime: The most obvious example of agreements tending to obstruct public justice are agreements to stifle criminal prosecutions. You shall not make a trade of a felony. If you are aware that a crime has bee...

Reference To Arbitration: Agreements to refer matters in dispute to arbitration are sometimes regarded as attempts to oust the jurisdiction of the courts, and to that extent will not be enforced.2* The most common illus cond...

Reference To Arbitration. Continued: Same - Encouragement Of Litigation - Champerty And Maintenance 161. In most states an agreement amounting to maintenance or champerty is considered contrary to public policy because of its tendency...

Maintenance: A contract is illegal and void on the ground of maintenance where a stranger to a cause of action agrees to sustain the expense of prosecuting or defending it.42 Illustrations of maintenance are wh...

Champerty: Champerty, or the maintenance of a suit for a share of the proceeds, avoids an agreement made in contemplation of it.51 A frequent instance of champerty is where an attorney agrees to conduct litigati...

Champerty. Part 2: Same - Agreements Tending To Fraud And Breach Of Trust 163. Any agreement which has a direct tendency to induce a person to commit a fraud upon the rights of others, or a breach of trust and confid...

Champerty. Part 3: Same - Agreements In Derogation Of The Marriage Relation 164. As a general rule, any agreement which restrains the freedom of parties to marry, or the freedom of choice in marrying, or impairs the ...

Champerty. Part 4: To obtain a divorce by collusion is not only an evasion of justice, but is contrary to public policy, as being in derogation of the marriage relation; and any agreement, therefore, between husband and...

Parental Relation: A contract by a father for relinquishment of the right to the custody of his child is void as against public policy.8 The trust is personal to the father, and he has no right to dispose of the child t...

Restraint Unlimited As To Space: As we have already stated, it was for a long time thought, both in England and with us, that a contract in restraint of trade was void on its face if the restraint was unlimited as to space, and there...

Restraint Unlimited As To Time: It has been said without qualification that, if the restraint is reasonably limited as to space, the fact that it is unlimited as to time will not render the agreement void; that, for instance, an agr...

Sale Of Secret Process: A person engaged in manufacturing an article by a secret process may sell the business and secret, and make a valid promise not to divulge the secret to any one else, nor to engage himself at any time...

Agreement To Assign Future Patents: A general assignment, or agreement to assign, all inventions thereafter made by a party, is not only contrary to public policy, but is void under the patent laws of the United States.34 But a contract...

Agreement To Assign Future Patents. Continued: 39 Pocahontas Coke Co. v. Powhatan Coal & Coke Co., 60 W. Va. 508, 56 S. E. 264, 10 L. R. A. (N. S.) 268, 116 Am. St. Rep. 901, 9 Ann. Cas. 667; Charleston Natural Gas Co. v. Kanawha Natural Gas, Ligh...

Monopolies Under Patents: The rule against contracts in restraint of trade and monopolies does not apply to contracts in reference to the production and sale of a patented article. It is the purpose of a patent to give the inv...

Combinations Between Laborers, Mechanics, And Other Workmen: If dealers cannot combine to stifle competition and control the price of a commodity, it may seem reasonable to suppose that workmen cannot combine to control the price of their labor. Authority for d...

Combinations Between Employers: In England a contract between employers for the purpose of protecting their interests against combinations of workmen, by which they agree to regulate wages and hours of work, or wholly or partially t...

Combinations Between Employers. Part 2. Exemption From Liability For Negligence: Same - Exemption From Liability For Negligence 173. As a general rule, a party may make a valid contract for exemption from liability for his own negligence or that of his servants. 174. EXCEPTI...

Combinations Between Employers. Part 3: 71 Fed. 136; Maine v. Railroad Co., 109 Iowa, 260, 70 N. W. 630, 80 N. W. 315; Pittsburg, C, C. & St. L. Ry. Co. v. Cox, 55 Ohio, 497, 45 N. E. 641, 35 L. R. A. 507; Eckman v. Railroad Co., 169 I11. 3...

Effect Of Illegality: We come now to the second branch of the subject of illegality in contract - its effect upon the validity of a contract. The effect of illegality upon the validity of contracts in which it appears vari...

Effect Of Illegality. Part 2: Same - Indivisible Agreements If a promise to do several acts is indivisible, and is in part illegal, if cannot be enforced as to that part which is legal, but the whole agreement is void.83 This r...

Effect Of Illegality. Part 3: Same - Divisible Agreements Where an agreement consists of several promises based upon several considerations, the fact that one or more of the considerations is illegal will not avoid all the prom...

Effect Of Illegality. Part 4: Same - Object Unlawful But Intention Innocent 176. Where the direct object is illegal, the agreement is void, though the parties did not know of the illegality, since ignorance of law is no excuse....

Mistake Of Fact: Though mistake of law does not excuse, it is otherwise in case of mistake of fact. A father, for instance, may recover for services performed by his minor son, in unlawfully selling intoxicating liqu...

The English Rule: In England it is held that, where the direct object of a contract is innocent in itself, but one of the parties has in contemplation an unlawful purpose, the contract is void if both parties knew of t...

The Rule In America: There is some conflict in this country on this point, but the cases, on the whole, are consistent with the rule that the mere knowledge on the part of one party to a contract that the other contemplat...

The Rule In America. Continued: Same - Loan According to the weight of authority, if a person lends money to another for the express purpose of enabling the borrower to use it to accomplish an illegal object, the transaction is i...

Unlawful Intention On One Side Only: Where one of the parties intends a contract, innocent in itself, to further an illegal purpose, and the other enters into the contract in ignorance of his intention, the innocent party is entitled to ...

Unlawful Intention On One Side Only. Part 2: Negotiable Instruments In the case of negotiable instruments we have to consider not only the effect of the illegality as between the original parties, but the effect upon subsequent holders of the...

Unlawful Intention On One Side Only. Part 3: Same - Relief Of Party To Unlawful Agreement 182. In no case can an action be maintained to enforce an illegal agreement. 183. Where an agreement has been executed in whole or in part by the pay...

Locus PœNitentice: Although there is some difference of opinion on the subject, it is safe to say that in some cases of illegal agreements, at least, if they are not mala in se, but merely mala prohibita, a locus pÅ“...

Par Delictum: If the party asking to be relieved from the effect of an illegal agreement was induced to enter into the agreement by means of fraud, he is not always regarded as being in pari delicto with the other ...

Recovery Upon Quantum Meruit: Where money is paid, goods are sold, or services rendered, under a contract merely void, but not illegal, an implied assumpsit lies for the money paid, or for the value of the goods sold or services r...

Recovery Upon Quantum Meruit. Continued: 1042, 26 L. R. A. (N. S.) 774, 20 Ann. Cas. 614 (containing full discussion of rules). See Contracts;' Dec. Dig. (Key-No.) 2, 101; Cent. Dig. 2, 41, 145, 455-460; Sales, ...

Change Of Law: An agreement which is illegal and void at the time of its inception cannot be rendered valid by subsequent legislation;77 nor, on the other hand, can a change of the law render invalid a contract whic...

Chapter IX. Operation Of Contract: 18S. Limits of Contractual Relation - In General. 189-190. Imposing Liability on Third Persons. 191-192. Conferring R...

Limits Of Contractual Relation - In General: 188. As a rule, a contract does not impose liabilities nor confer rights on a person who is not a party to it. EXCEPTIONS - (a) There are apparent exceptions to this rule: (1) Where one person ...

Apparent Exceptions To The Rule - Agency: Although one person cannot, as a rule, by contract with another, impose liabilities, nor confer rights, on a third person not a party to the contract, one person may represent another, as being employ...

Contract May Impose Duty On Third Parties: Though a contract cannot impose the burdens of an obligation upon one who was not a party to it, it may impose a duty upon persons extraneous to the obligation not to interfere maliciously with its du...

Contract May Impose Duty On Third Parties. Continued: Same - Conferring Rights On Third Persons 191. As a rule, a contract cannot confer rights on a person who is not a part ' to it. 192. EXCEPTIONS - (a) The rule is subject to apparent exceptions ...

Promise For Benefit Of Third Person - The English Doctrine: If two persons should make a contract in which one promises to do something for a third person, all three might be willing that such third person should have all the rights of an actual contracting pa...

Promise For Benefit Of Third Person - The English Doctrine. Part 2: Same - Massachusetts Doctrine The English doctrine on this subject is also recognized by the Massachusetts court, and by the courts of some of the other states.20 The general rule of law, it was ...

Promise For Benefit Of Third Person - The English Doctrine. Part 3: Same - The New York Doctrine In New York, and in most of the other states, the courts have refused to recognize the doctrine that a person for whose benefit a promise is made cannot sue the promiso...

Promise For Benefit Of Third Person - The English Doctrine. Part 4: Same - Contracts Under Seal In some of the states it is held that the doctrine allowing suit on a contract by a third person for whose benefit it is made applies as well to covenants or promises un...

Assignment Of Contracts - In General: 193. Under some circumstances, a person not a party to a contract may take the place of one of the parties. This substitution is called assignment of the contract. It may be either (a) By the ...

Assignment Of Contracts - In General. Continued: Exceptions To The Rule The exceptions to this rule are apparent rather than real. A person may assign the liabilities imposed upon him by a contract which he has made if the other party to the cont...

At Common Law: At common law, apart from the customs of the law merchant, the rights or benefits arising out of a contract, or, as it is generally termed, a chose in action, cannot be assigned so as to entitle the a...

Rule In Equity: Equity permits the assignment of certain contracts subject to certain conditions. As a rule, however, the assignee of a chose in action must seek his remedy at law, by an action in the name of his ass...

Rule In Equity. Part 2: Same - Partial Assignment A debtor has a right to pay his debt as a whole, and cannot without his consent be subjected to separate actions by different persons. A creditor, therefore, cannot, at la...

Rule In Equity. Part 3: Same - Form Of Assignment No particular form for an assignment is necessary, unless it is required by statute., In the absence of a statute an equitable assignment may be made without any deed or w...

Rule In Equity. Part 4: Same - Notice Of Assignment The assignment is complete as between the assignor and the assignee, or those standing in their shoes and representing them, without any notice to the debtor or person l...

Rule In Equity. Part 5: Same - Title Of Assignee A person cannot acquire title to a chose in action from one who has himself no title to it. And if a man takes an assignment of a chose in action, he takes his chance as to...

Rule In Equity. Part 6: Same - Priority Between Assignees It is held in England that equitable titles have priority according to the priority of notice; 84 that the successive assignees of an obligation rank as to thei...

Under Statutes: In most of the states, statutes have been enacted changing the common-law rules in relation to assignments of choses in action. These statutes vary somewhat, so that it would be impracticable to attem...

Under Statutes. Continued: Same - Assignment By Operation Of Law 198. Rules of law operate to transfer rights and liabilities arising out of a contract, under certain circumstances and to a certain extent, in the following c...

Covenants Affecting Leasehold Interests: At common law, covenants affecting leasehold interests are said to run with the land, and not with the reversion; that is to say, they pass upon an assignment of the lease, but not upon an assignmen...

Covenants Affecting Freehold Interests: At common law, covenants entered into with the owner of land - that is to say, promises under seal made to the owner of land, and for his benefit - pass to his assignees, provided, as in other cases, ...

Covenants Affecting Freehold Interests. Part 2: Same - In Equity Courts of equity, however, have established a class of exceptions to the above rule. They have been mainly confined to covenants in the case of land sold for building purposes, tho...

Covenants Affecting Freehold Interests. Part 3: Same - Assignment Of Contractual Obligation By Marriage 200. At common law, upon a woman's marriage the right to reduce her choses in action into possession is transferred to her husband, and he be...

Statutory Changes In The Law: In England and in all of our states the common law in this re-, spect has been very greatly changed by statute. In some states it has been virtually abolished and in these states the marriage of a wom...

Joint And Several Contracts: 202. A contract in which there are two or more parties on either or both sides may be - (a) Joint; (b) Several; or (c) Joint and several. Where several persons enter into a contract on ...

Joint Promisors: If several persons make a joint promise, each is liable to the promisee for the whole debt or liability, notwithstanding the fact that they are both liable.13 Neither is bound by himself, but each is ...

Joint Promisors. Continued: Same - Survivorship Upon the death of one of several joint promisors, the liability devolves upon the survivors. The personal representative of the deceased promisor cannot be sued jointly with the...

Joint Promisees: Where the contract is joint on the part of the promisees, all must join in suing upon it.29 Even a disclaimer by one, if without the assent of the promisor, will not entitle the others to sue alone.30...

Joint Promisees. Part 2: Same - Release A payment of the debt to one of several joint promisees is a discharge of the debt. So, also, one of the promisees, without the others joining, may give a valid release of the debt, ...

Joint Promisees. Part 3: Survivorship The doctrine of survivorship applicable to joint contracts does not apply to several contracts.38 Same - Contracts Both Joint And Several 207. Where a contract in respect of the ...

Chapter X. Interpretation Of Contract: 209-213. Rules Relating to Evidence - In General - Parol Evidence. 214-215. Proof of Document 216. Evidence as to Fact of Agreement. 217. Evidence as to Terms of Contract. 218-220. Rules of ...

Difference Between Formal And Simple Contracts: Before taking up these questions as to the admissibility of evidence it will be well to note the difference between contracts under seal and simple contracts in writing, as illustrated by the rules of...

Simple Contracts: In proving a simple contract, whether in writing or not parol evidence is always necessary to show that the party sued is the party who made the contract and is bound by it. In no other way could this...

Simple Contracts. Continued: Same - Evidence As To Terms Of Contract18 217. Parol evidence as to the terms of a contract which appears to be complete in writing is inadmissible, except (a) To prove terms which are supplemen...

Proof Of Supplementary Or Collateral Terms: If the parties to a contract have not put all its terms in writing, parol evidence of the supplementary terms is admissible, not to vary, but to complete, the written contract.23 Thus, where a written...

Explanation Of Terms: Parol evidence is also admissible, where it is necessary in order to explain the terms of a written contract. Explanation of terms may merely amount to evidence of the identity of the parties to the c...

Evidence Of Custom And Usage: Evidence of the custom or usage of a trade, or of a particular locality, is admissible, though it may add a term to a contract, or may attach a special, and sometimes unnatural, meaning to one of the ...

Evidence Of Custom And Usage. Part 2: Same - Requisites Of Custom Or Usage In order that a custom or usage may affect a contract, either by adding or explaining terms, it must meet certain requirements. See Customs and Usages, Dec...

Evidence Of Custom And Usage. Part 3: In Equity In the application of equitable remedies, the granting or refusal of specific performance, the reformation of documents, or their rescission and cancellation, extrinsic evidence is much m...

Evidence Of Custom And Usage. Part 4: Rules Of Construction Thus far we have dealt with the admissibility of evidence in relation to contracts in writing. We now come to deal with the rules of construction which govern the interpretati...

Evidence Of Custom And Usage. Part 5: 71 Ante, p. 495. 72 Ante, p. 495; Findley's Ex'rs v. Findley, 11 Grat. (Va.) 434; Ellmaker v. Ellmaker, 4 Watts (Pa.) 89; Maryland Coal Co. v. Railroad Co., 41 Md. (2, 3) The cardinal or fundame...

Subsidiary Rules: As subsidiary to the cardinal rule of ascertaining and giving effect to the intention of the parties, there are a number of subsidiary rules which are applied by the courts in the construction of cont...

Subsidiary Rules. Continued: (5) Language must be interpreted in the sense in which the promisor knew, or had reason to know, the promisee understood it. 91 (6) The courts will construe words most strongly against the party ...

Terms Implied - Unexpressed Intention: Certain terms, though unexpressed, are imported into the contract by law without proof that they were intended by the parties. Unless a contrary intention was expressed, the law conclusively presumes ...

Terms Implied - Unexpressed Intention. Continued: N. W. 409; Chapman & Dewey Land Co. v. Wilson, 91 Ark. 30, 120 S. W. 391. See Anson, Cont (8th Ed.) 269. See Contracts, Dec. Dig. (Key-No.) 211; 9 McLean v. Windham Light & Lumber Co., 85 ...

Terms Implied - Unexpressed Intention. Part 2. Rules As To Penalties And Liquidated Damages: Same - Rules As To Penalties And Liquidated Damages 222. If the parties fix upon a certain sum to be paid on breach of the contract, (a) It may be recovered if it was really fixed upon as liquid...

Terms Implied - Unexpressed Intention. Part 3: Lincoln v. Granite Co., 56 Ark. 405, 19 S. W. 1056; De Graff v. Wickhain, 89 Iowa, 720, 52 N. W. 503, 57 N. W. 420; Fruin v. Railway Co., 89 Mo. 397, 14 S. W. 557; Texas & St. L. Ry. Co. v. Rust (C. C...

Terms Implied - Unexpressed Intention. Part 4. Joint And Several Contracts: Same - Joint And Several Contracts 224. Whether or not a contract with several persons on either or both sides is to be construed as joint or several depends upon the intention of the parties as ma...

Joint And Several Liabilities: In all written contracts, the language used is the primary guide to the meaning; but it is not always conclusive. The language is sometimes ambiguous, and often not exclusive of an intention to contra...

Joint And Several Rights: With respect to the rights of several persons under such contracts, the rule of construction has been thus stated:35 A contract will be construed to be joint or several, according to the interests of...

Chapter XI. Discharge Of Contract: Discharge Of Contract 225. In General. 226-227. By Agreement - In General. 228-232. Waiver...

Discharge Of Contract By Agreement: 226. A contract may be discharged by an agreement to that effect between the parties. This may be - (a) By waiver, cancellation, or rescission. (b) By a substituted contract. (c) By the ...

Discharge Of Contract By Agreement. Part 2: Same - Substituted Contract 233. A contract may be discharged by the substitution of a new contract,16 and this results - (a) Where a new contract is expressly substituted for the old one. (b...

Discharge Of Contract By Agreement. Part 3: 20 Thornhill v. Neats, 8 C. B. (N. S.) 831. And see Cornish v. Suydam, 99 Ala. 620, 13 South. 118; Stewart v. Keteltas, 36 N. Y. 3S8; Underwood v. Wolf, 131 111. 425, 23 N. E. 59S, 19 Am. St. Rep. 40;...

Discharge Of Contract By Agreement. Part 4. Form Of Discharge By New Agreement: Same - Form Of Discharge By New Agreement 235. The general rule is that a contract must be discharged in the same form as that in which it was made. Therefore: (a) A contract under seal can only...

Discharge Of Contract By Agreement. Part 5. Provisions For Discharge Contained In The Contract - Conditions Subsequent: Same - Provisions For Discharge Contained In The Contract - Conditions Subsequent 236. A contract may contain within itself express or implied provisions for its determination under certain circums...

Discharge On Nonfulfillment Of Term: In the first of these three cases - that in which the nonfulfillment of a specified term of the contract gives to one of the parties the option of treating the contract as discharged - we seem to be a...

Occurrence Of Specified Event: The parties may introduce into the terms of their contract a provision that the fulfillment of a condition, or the occurrence of an event, shall discharge them both from further liabilities under the ...

Discharge Optional With Notice: Again, a continuing contract may contain a provision making it determinable at the option of one of the parties, upon certain terms.57 Whether, for instance, a contract of employment provides that it ...

Discharge Of Contract By Performance: 237. A contract is discharged by performance - (a) Where a promise has been given upon an executed consideration, and is performed by the promisor. (b) Where one promise has been given in ...

Substantial Performance: At common law, a strict and literal performance in accordance with the terms of the contract is, as a rule, required.64 In equity, on the other hand, contracts not capable of literal performance will ...

Performance To Satisfaction Of Promisor: Where it is a term of the contract that the performance shall be satisfactory to the other party, it is a question of interpretation whether his obligation is conditional upon actual satisfaction or r...

Time Of Performance: Where no time for performance is fixed by the contract, a reasonable time is implied.83 Where a time is specified, the question arises whether it is of the essence of the contract or not. This questio...

Effect Of Failure Of Performance: If there is a failure of performance, partial or total, then the contract is broken. Whether the breach amounts to a discharge is a question which we shall hereafter discuss.87 82 Wood Reaping & Mo...

Payment By Negotiable Or Nonnegotiable Instrument: A negotiable instrument may be given for a sum due, either liquidated or unliquidated. It is in effect a substitution of a new agreement for the old one, but it does not necessarily discharge the old ...

Application Of Payments: Where a person owes several debts to another, or owes on an account consisting of several different items, and makes a part payment, the question arises as to which debt is discharged. As a rule, the ...

Application Of Payments. Part 2: 9 Jackson v. Burke, 1 Dill. 311, Fed. Cas. No. 7,133; Ayer v. Hawkins, 19 Vt. 26: Williams v. Griffith, 5 Mees. & W. 300; Waugh v. Cope, 6 Mees. & W. 824; Murphy v. Webber, 61 Me. 478; Pond v. William...

Application Of Payments. Part 3. Tender: Same - Tender 239. Tender is an offer or attempt to perform, and may be either - (a) An offer to do something promised, in which case the offer, and its refusal by the promisee, discharge the pr...

Application Of Payments. Part 4: 29 Noyes v. Wyekoff, 114 N. Y. 204, 21 N. E. 158; Abshire v. Corey, 113 Ind. 484, 15 N. E. 685; People's Sav. Bank v. Borough of Norwalk, 56 Conn. 547, 16 Atl. 257; Tillou v. Britton. 9 N. J. Law, 120...

Discharge Of Contract By Breach - In General: 240. Breach of contract is where a party thereto breaks through the obligation which it imposes. 241. The effect of a breach of contract is that - (a) It always gives the party injured a right ...

Forms Of Discharge By Breach: 242. A contract may be broken in any one of three ways: (a) A party may renounce his liabilities under it. (b) He may by his own act make it impossible for him to fulfill his liabilities under ...

Before Performance Is Due: The parties to a contract which is wholly executory have a right to something more than a performance of the contract when the time for performance arrives. They have a right to the maintenance of the...

In The Course Of Performance: It may also happen that, in the course of performance of a contract, one of the parties may, by word or act, deliberately and avowedly refuse performance on his part. In such a case the other party is...

In The Course Of Performance. Continued: Same - Impossibility Created By Party 245. If a party to a contract, either before the time for performance or in the course of performance, makes performance, or further performance, by him imposs...

Breach By Failure Of Performance: 246. Whether or not failure of one party to perform the contract in whole or in part operates as a discharge of the other, or merely gives him a right of action for the breach, depends upon the ...

Absolute Promises: If a person makes a promise to another in consideration of a promise by the latter to him, and has not in express terms, or upon a reasonable construction of the contract, made the performance of his ...

Promises The Performance Of Which Is Divisible: Contracts frequently occur in which the promise of one or both parties admits of a more or less complete performance, and the damage sustained by an incomplete performance or partial breach of which m...

Promises The Performance Of Which Is Divisible. Part 2: Same - Delivery By Installments Where there is a contract for the sale of goods deliverable in installments, which are to be paid for on delivery, and the seller makes defective delivery in respect...

Promises The Performance Of Which Is Divisible. Part 3: Same - Repudiation Of Contract The courts are agreed that if a default in one item of a continuous contract of this nature is accompanied with an announcement of intention not to perform the contra...

Subsidiary Promises: The breach committed by one of the parties may be a breach of a term of the contract only, and of a term which the parties have not, upon a reasonable construction of the contract, regarded as vital t...

Conditional Promises: 249. Where a promise is subject to a condition, that condition must, as regards its relation to the promise in time, be either - (a) Subsequent, (b) Concurrent, or (c) Precedent. 250. In ...

Breach Of Concurrent Condition: Concurrent conditions seem, in point of fact, to be conditions precedent, for the simultaneous performance of his promise by each party must needs be impossible except in contemplation of law. What is...

Breach Of Concurrent Condition. Part 2: Same - Vital Conditions In the cases last considered, neither the nonfulfillment of the condition nor an action brought before fulfillment will discharge the promisor. The condition merely suspends...

Breach Of Concurrent Condition. Part 3: Same - Executory Contract Of Sale In every executory contract of sale, where the goods are sold by description, there is an implied condition, often miscalled an implied warranty,22 that the goods ...

Breach Of Concurrent Condition. Part 4: Same - Executed Contract Of Sale Where the buyer has accepted the goods, it is held in England and in many jurisdictions in this country that he cannot afterwards reject them.80 By accepting he wai...

Waiver And Acquiescence In Breach Of Condition: A condition precedent may, in the course of the performance of the contract, change its character, and in effect cease to be a condition. Acquiescence in its breach may in effect turn it into a mere w...

Failure Of Consideration: Strictly speaking, there can be no such thing as a failure of consideration. Either the promisor receives the consideration he bargained for, or he does not. If he does not receive the consideration,...

Failure Of Consideration. Continued: Same - Subsequent Failure Of Executed Consideration If the promisor receives a consideration for his promise, the fact that it subsequently diminishes in value, or becomes worthless, does not relea...

Discharge By Impossibility Of Performance: 254. Impossibility of performance arising subsequent to the formation of a contract does not discharge the promisor, even though he was not in fault, except - EXCEPTIONS - (a) Where the ...

Discharge By Impossibility Of Performance. Part 2: Exceptions To The Rule The exceptions to the rule must be distinguished from the cases in which the act of God is said to excuse from nonperformance of a contract. There are, as we have seen, certa...

Discharge By Impossibility Of Performance. Part 3: Same - Destruction Of The Subject-Matter Where the continued existence of a specific thing is essential to the performance of the contract, its destruction from no fault of either party operates as...

Discharge By Impossibility Of Performance. Part 4: Same - Incapacity For Personal Services A contract which has for its object the rendering of personal services is discharged by the death or incapacitating illness of the promisor.80 In an action f...

Discharge By Impossibility Of Performance. Part 5: Same - Where Conditions Essential To Performance Do Not Exist A fourth exception recognized in some cases is that performance of a contract will be excused where conditions essential to performance...

Discharge By Operation Of Law: 255. There are rules of law which, operating upon certain sets of circumstances, will bring about the discharge of a contract; as in case of (a) Merger. (b) Alteration of a written instrument. ...

Discharge By Operation Of Law. Part 2: Same - Alteration Of A Written Instrument 257. If a deed or contract in writing is altered by addition or erasure, it is discharged, provided the alteration is made - (a) In a material part, so ...

Discharge By Operation Of Law. Part 3: 376, 97 Am. Dec. 105. See Alteration of Instruments, Dec. Dig. (Key-No.) 5; Cent. Dig. 18-29. 13 O. N. Bull Remedy Co. v. Clark, 109 Minn. 396, 124 N. W. 20, 32 L. R. A. (N. ...

Intent: The alteration, to effect a discharge, must be intentional. An alteration by accident or mistake, occurring under such circumstances as to negative the idea of intention, will not invalidate the docum...

Consent: If the alteration is with the consent of the party claiming a discharge, or if it is afterwards ratified by him, there is no discharge.31 It follows that where there are several promisors or obligors,...

Loss Of Instrument: The loss of an instrument only affects the rights of the parties in so far as it occasions a difficulty of proof, except* that, in case of the loss of a negotiable instrument, the holder, if he loses ...

Remedies On Breach Of Contract: 259. Where a contract is broken by one of the parties, the other party acquires, or may acquire, three distinct rights: (a) He may be discharged from further performance. (b) If he has done ...

Remote And Proximate: The rule just stated is subject to the limitation that only such damages can be recovered as can be deemed to have been in the contemplation of the parties. The breach of a contract may result in loss...

Vindictive, Punitive, Or Exemplary Damages: Damages in an action .for breach of contract are by way of compensation for the loss sustained by the breach, and never by way of punishment; and the plaintiff, therefore, cannot recover more than his...

Difficulties In Assessment - Speculative Damages: The mere fact that the ascertainment of the damages is difficult cannot deprive him of his right to whatever damages he has suffered as the natural consequence of the breach; the difficulty, when it a...

Adequate Remedy At Law: A suit for specific performance will not lie if there is an adequate remedy at law. It will only lie where the loss cannot be compensated in damages.51 This rule is well illustrated by the different a...

Inability Of Court To Supervise And Insure Performance: A court of equity will not decree specific performance where the matter of the contract is such that it cannot supervise or insure its execution.55 This rule is illustrated by the refusal of courts of...

Specific Performance Discretionary: The enforcement of specific performance is discretionary with the court, and the court must be satisfied not only that there was a valid contract, but that its enforcement would be equitable and just....

Release: At common law, a release was a gratuitous waiver by a person of a right of action accruing to him from a breach of contract or other obligation. No consideration was required, but it was necessary tha...

Accord And Satisfaction: An accord and satisfaction is an agreement, which need not be under seal, the effect of which is to discharge the right of action possessed by one of the parties against the other. In order to have th...

Accord And Satisfaction. Part 2: Same - Discharge By Judgment 267. The right of a party to sue for breach of contract is discharged by the final judgment of a court of competent jurisdiction either in his favor or against him. In ...

Accord And Satisfaction. Part 3: Same - Lapse Of Time 268. Lapse of time may affect the remedy of the parties to a contract, but, in the absence of statutory provision, it cannot affect their rights. 269. In all the states ther...

Disabilities And Exceptions: Though, as a rule, the statute begins to run as soon as the cause of action accrues, and continues to run until the bar is complete, there are certain circumstances which suspend its operation. It is ...

Acknowledgment And New Promise: Ordinarily the statute of limitations is held merely to bar the remedy, but not to extinguish the right, and therefore the right son v. Martz, 8 Watts (Pa.) 374, 34 Am. Dec. 474. See Equity, Dec. Di...

Chapter XII. Quasi Contract: 270. In General. 271. Money Paid for the Use of Another. 272. Money Received for the Use of Another. 273. Recovery for Benefits Conferred. In General 270. Ordinarily, a person can only ...

Money Paid For The Use Of Another: 271. Wherever one person requests or allows another to assume such a position that the latter may be compelled by law to discharge the former's legal liabilities, the law imports a request and ...

Money Received For The Use Of Another: 272. Wherever one person has money to which, in equity and good conscience, another is entitled, the law creates a promise by the former to pay it to the latter, and the obligation may be enforced by ...

Money Received For The Use Of Another. Part 2: Same - Debts Arising From Tort - Waiver Of Tort A frequent illustration of a quasi contractual obligation of this kind arises where a person obtains another's money by wrongful or fraudulent means....

Money Received For The Use Of Another. Part 3: Same - Money Obtained By Fraud Or Duress Where a person has obtained money from another under an agreement which the latter has the right to avoid on the ground of fraud, duress, or undue influence...

Money Received For The Use Of Another. Part 4: Same - Voluntary Payment If a mere claim is made upon a person without any legal proceeding, and he pays it with full knowledge of all the circumstances of the claim, and without any compulsion or ...

Money Received For The Use Of Another. Part 5: Same - Liability Of Third Persons If money wrongfully obtained has passed into the hands of a third person, the law will create a similar promise by him, unless he was a bona fide purchaser or reci...

Money Received For The Use Of Another. Part 6: Same - Money Paid Under A Mistake Of Fact An important class of cases in which an action will lie as for money received by the defendant for the use of the plaintiff is where money is paid under a ...

Money Received For The Use Of Another. Part 7: Same - Money Paid Under A Mistake Of Law The rule was established in England by Lord Ellenborough in the case of Bilbie v. Lumley.88 that money paid with a full knowledge of matters of fact, but un...

Money Received For The Use Of Another. Part 8: Same - Money Paid Under Unenforceable Contract Money paid under an agreement unenforceable because of the statute of frauds may be recovered upon the default of the defendant in the performance of ...

Money Received For The Use Of Another. Part 9: Same - Money Paid Under Ultra Vires Contract A contract made by a corporation beyond the scope of its corporate powers is said to be ultra vires, and is void, but not illegal.7 It is very generally...

Recovery For Benefits Conferred: 273. Under certain circumstances, where one person has conferred upon another benefits in the way of property, services, etc., and cannot show a promise in fact by the latter to pay for them, the law ...

Recovery For Benefits Conferred. Part 2: Same - Forcing Benefit Upon Another Neither a liability ex contractu nor a liability quasi ex contractu can be imposed upon a person otherwise than by his act or consent. One man cannot force a ben...

Recovery For Benefits Conferred. Part 3: Same - Part Performance Of Contract As we have seen in treating of discharge of contract by breach, a party to a contract is not discharged from liability to perform by the failure of the other par...

Recovery For Benefits Conferred. Part 4: Same - Retaining Benefits Where benefits are conferred by one person on another under such circumstances as to raise no promise in fact or in law to pay for them, he may nevertheless become liable ...

Recovery For Benefits Conferred. Part 5: Same - Part Performance Of Unenforceable Or Void Agreement Where an agreement is not illegal, but merely void, or unenforceable, and one of the parties refuses to perform his promise after performa...

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