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The Law Of Contracts Vol2| by William Herbert Page



Other Forms Of Contract. Parties. Construction And Interpretation

TitleThe Law Of Contracts Vol2
AuthorWilliam Herbert Page
PublisherThe W. H. Anderson Company
Year1919
Copyright1919, The W. H. Anderson Company
AmazonCommercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises
-Sec. 544. Nature Of Formal Contract
The formal contract is an obligation which owes its validity not to consideration, nor in some cases, as in contracts of record, to the agreement of the parties, but solely to the form of the transact...
-Sec. 545. Meaning Of Specialty
Whether the term specialty includes all formal contracts, or only those under seal, excluding contracts of record, is a question upon which there is a conflict of authority. The better authorities d...
-Sec. 546. Judgments Classed As Contracts Of Record
A judgment is the determination and sentence of the law, awarded and pronounced by the court.1 The code definition of a judgment is the final determination of the rights of the parties in an action....
-Sec. 547. Judgment Not Founded On Agreement
It is evident, however, that a judgment does not necessarily have anything to do with agreement. It may, it is true, be based on contract, or it may be entered by agreement; but on the other hand it m...
-Sec. 548. Judgments Held Not To Be Contracts
Accordingly, there is a decided tendency at Modern Law to exclude judgments from the class of contracts,1 The theory that a foreign judgment imposes or creates a duty or obligation is a remnant of an...
-Sec. 549. Judgments As Affected By Impairment Of Obligation Of Contract
The cases in which it now is material whether a judgment is a contract or not are generally cases involving the impairment of the obligation of contracts, the period of limitations, the rule as to nec...
-Sec. 550. Remedies Given On Judgments
It has been often said that judgments are invariably classed with contracts with reference to remedies upon them.1 There are authorities which hold that judgments for some purposes are not contract...
-Sec. 551. Judgment As Affected By Statute Of Limitations
Where the limitation of actions is concerned, no question arises as to whether a judgment is a contract if the legislature has made specific provision for judgments.1 Where no such provision is made, ...
-Sec. 552. Recognizances
A recognizance, in the correct use of the term, is an obligation of record entered into either before a court of record or before a magistrate authorized by law to take such recognizance, conditioned ...
-Sec. 553. Statute Merchant And Statute Staple
Statute merchant was an obligation of record analogous to a recognizance. The statute of Acton-Burnel,1 the first of a series of acts, passed primarily to extend English credit in that mediaeval strug...
-Sec. 554. Other Contracts Of Record
Contracts of record other those enumerated are naturally rare. They are not, however, entirely unknown. It has been held that a contract made between the parties to pending litigation in open court, a...
-Sec. 555. History Of The Seal
The use of the seal as a means of authenticating instruments is often said to be due primarily to the ignorance of our ancestors. This is not historically true. Before the Norman conquest we find that...
-Sec. 556. What Constitutes A Seal
Any statement either of what a seal was or of its legal effect is constantly complicated by the fact that the constant tendency of the law, during the last century and a half, has been to abolish tech...
-Sec. 557. Adoption Of Seal
If the impression or mark upon the paper is of such nature as to be recognized as a valid seal it need not be physically affixed or made by the obligor. He may, if he pleases, adopt as his own a seal ...
-Sec. 558. Necessity Of Seal In Contract Of Corporation
The original rule was that a corportion acts and speaks only by its common seal. . . . It is the fixing of the seal, and that only, which unites the several assents of the individuals who compose the...
-Sec. 559. Delivery Of Sealed Instrument
The question of the delivery of a sealed instrument presents many of the questions involved in the delivery of a simple written contract. A discussion of the delivery of a sealed contract will therefo...
-Sec. 560. Effect Of Seal At Early Common Law
When the seal once had come into general use and had become the means of authenticating formal instruments it at once acquired an effect and a sanctity which it is hard to overestimate or even appreci...
-Sec. 561. Effect Of Seal On Consideration At Common Law
A sealed instrument was enforceable at Common Law because of its solemnity of form. It needed no consideration, and at law want of consideration was no defense.1 So a sealed contract for the sale of r...
-Sec. 562. In Equity
If the question of the validity of a contract becomes material in equity the existence of a seal does not prevent equity from inquiring whether the instrument is supported by a valuable consideration,...
-Sec. 563. Under Modern Statutes
The Common Law effect of the seal as dispensing with the necessity of consideration has been greatly modified by statute in many states. In some states the affixing of a seal has no practical effect u...
-Sec. 564. Extrinsic Evidence In Sealed Contracts
The question of what facts and circumstances, outside of the words of a contract under seal, can be considered in connection with such words, as forming a real part of the contract, is in many respect...
-Sec. 565. Incomplete Contracts Under Seal
If a contract under seal is incomplete on its face, and some of its terms must be supplied by extrinsic evidence of the oral agreement of the parties, it is clear that such a contract cannot be said t...
-Sec. 566. Adding Party To Sealed Contract By Extrinsic Evidence
At Common Law it could not be shown by extrinsic evidence that a contract under seal was intended to bind any party other than those whom it purported to bind since all the terms of a contract under s...
-Sec. 567. Modification Of Contract Under Seal By Subsequent Agreement
The original Common Law rule required a discharge by the act of the parties to be of as high a nature as the instrument to be discharged. Applying this rule to the subject of the sealed contract, it m...
-Sec. 568. Written Contracts In General
While the growth of our law has been steadily obliterating the once important distinction between the formal and the simple contract, a new classification of simple written contracts has developed. Si...
-Sec. 569. What Materials May Be Used
While there is little authority on the point, there seems no reason why a written contract may not be made upon any material which can receive a legible impression of any kind; and there seems to be ...
-Sec. 570. Necessity Of Signature
A written contract not required to be in writing or to bo proved by writing is valid though not signed if the parties intend it to take effect without signing.1 Thus if one party signs it and the othe...
-Sec. 571. Place Of Signature
In the absence of statute specifying in what part of the contract the signature must be written, a signature may be written anywhere upon the contract.1 While the name must be written with the intenti...
-Sec. 572. Form Of Signature. - Name
In the absence of statute any visible mark upon the paper, intended by a party to be his signature thereto, is sufficient as his signature. The common and most approved form of signature is for the pa...
-Sec. 573. Mark
In the absence of some statute to the contrary, a signature by mark affixed by the party whose signature it is intended to be, is sufficient.1 Thus where a grantor signed by mark immediately below a c...
-Sec. 574. Signature By Another
If a stranger to the contract signs the name of a party to the contract in the presence of such person, and with his authority, this is a sufficient signature.1 Thus where a grantor authorized the ack...
-Sec. 575. Adoption Of Signature
In absence of statute a party to a contract may adopt a signature thereto as his own, even if made without authority.1 Thus delivery of such an instrument may be an adoption of the signature thereon.2...
-Sec. 576. Effect Of Omission Of Revenue Stamp
The act of Congress, approved June 13, 1898, to provide ways and means to meet war expenditures and for other purposes, provided that revenue stamps must be placed on certain kinds of instruments; mad...
-Sec. 577. Nature Of Delivery
The question as to the existence and nature of delivery may take two distinct forms: (1) has the instrument been delivered in any way by the obligor, so as to take effect at all; and (2) if it has bee...
-Sec. 578. Necessity Of Delivery
A written contract which is not required by law to be proved by writing, or to be in writing, is of no effect unless it is delivered, unless there is a valid oral contract between the parties, intende...
-Sec. 579. Elements Of Delivery
Delivery consists of two distinct elements: (1) A party delivering the instrument must surrender control of the same, and the other party must take either actual or constructive possession thereof.1 (...
-Sec. 580. Actual Delivery
Actual delivery exists when the written instrument comes under the control of the obligee. This usually involves a change of physical possession. While the obligor by person or agent usually delivers ...
-Sec. 581. Recording As Delivery
If a grantor causes a deed to be recorded with the actual or presumed assent of the grantee, such act amounts to a delivery.1 Thus if grantee sends a deed to grantor for execution, and asks him to hav...
-Sec. 582. Constructive Delivery
Delivery may, however, be constructive, as well as actual. If a note is made out, and placed by the maker in his safe, with the consent of the payee, simply for the purpose of safe keeping, it has bee...
-Sec. 583. Effect Of Re-Delivery
After rights have become fixed by the delivery of a written contract, the subsequent fate of the written instrument is, apart from questions of commercial paper, immaterial. Hence, the fact that the o...
-Sec. 584. Nature Of Delivery In Escrow
A written instrument is delivered in escrow when it is delivered by the obligor to a third person, to be held by such third person until some contingency occurs, or some condition is complied with, up...
-Sec. 585. Rights Of Parties When Delivery Is In Escrow
The depositary of an escrow is regarded as an agent of both obligor and obligee, and he can neither return the deed or other instrument to the former without the latter's consent, nor, save upon the...
-Sec. 586. Necessity Of Second Delivery Of Escrow
Whether the failure or omission of the depositary in escrow to deliver the instrument to the party entitled to it when the conditions of the deposit in escrow have been complied with defeats the right...
-Sec. 587. Fiction Of Relation To Original Delivery In Escrow
By a legal fiction an instrument which has been deposited in escrow may relate back upon the performance of the conditions of delivery to the time of the delivery in escrow, and for some purposes, tak...
-Sec. 588. Who Can Be Depositary In Escrow. - Obligor
The question of delivery depends in part upon the relation of the person in whose custody and possession the instrument is, to the instrument itself, or to the parties thereto. A written instrument ma...
-Sec. 589. Unauthorized Delivery By Co-Obligor
If an obligor, such as a surety, leaves an instrument to which he has affixed his name with a co-obligor to be delivered only if some other party signs it as co-obligor, and the custodian of the instr...
-Sec. 590. Agent Of Obligor
If a written instrument is delivered to one who holds as the agent of the grantor, this does not amount to delivery which will give the instrument legal effect. Thus a deed delivered to one who is age...
-Sec. 591. Agent Of Obligor Taking In Different Capacity
On the other hand, an instrument may be delivered to one who is the agent of the maker and yet he may not take in his capacity of agent. A executed a note, placed it in an envelope, sealed the envelop...
-Sec. 592. Depositary Representing Both Obligor And Obligee
A delivery of an instrument to a third person to hold free from control of the obligor, and free from the control of the obligee, until the happening of a certain event, and then to deliver such instr...
-Sec. 593. Agent Of Obligee
A delivery by the obligor to the agent of the obligee, without imposing any conditions or restrictions, is in legal effect a delivery to the obligee himself. Thus a non-negotiable note,1 or a negotiab...
-Sec. 594. Agent Of Obligee In Different Capacity
Whether the obligor can deliver to one who is the agent of the obligee and in making such delivery can impose such conditions as to make a delivery in escrow, is a question upon which there is a confl...
-Sec. 595. Obligee. - Theory That He Can Hold Simple Contract In Escrow
Whether an instrument can be delivered to the obligee, to hold until some event or contingency occurs, not appearing on its face, and then to take effect, is a question, upon which there is a great di...
-Sec. 596. Obligee. - Theory That He Cannot Hold Simple Contract In Escrow
Some authorities, however, hold that a written simple contract cannot be delivered to the obligee in escrow. In some jurisdictions, negotiable instruments are specially singled out as instruments whic...
-Sec. 597. Contracts Under Seal Delivered To Obligee In Escrow
In case of sealed contracts and other instruments under seal the weight of authority is that they can not be delivered in escrow to the obligee unless the condition of such delivery appears upon the f...
-Sec. 598. What Constitutes The Terms Of A Written Contract
In discussion of the question of what may constitute the terms of a written contract of this class we find even greater difficulty than usual in separating one topic from its context of allied topics....
-Sec. 599. Validity Of Oral Contracts Of This Class
A contract which is not within the statute of frauds or any similar statute, and which is not within the classes of contracts required by the law-merchant to be in writing, is valid though entirely or...
-Sec. 600. Words Employed Are Terms Of Contract
The words used by the parties in their written contract are of course a part thereof. Each and every one of them must be considered in arriving at the intention of the parties. It does not necessarily...
-Sec. 601. Law As Term Of Contract
It is impracticable and impossible to set forth in writing all the different stipulations and provisions which, by the operation of law, are terms of the contract. The difficulty exists, not because t...
-Sec. 602. Extrinsic Facts As Terms Of Contract
When we pass from consideration of the words of the contract to the question of what else may be regarded as a term of such contract we are met with a practical difficulty which admits of only a rathe...
-Sec. 603. Rules And By-Laws
Rules of a voluntary association are a part of a contract for membership in such association entered into between the association and a member thereof.1 The constitution and by-laws of a beneficial as...
-Sec. 604. Usages And Customs
In many kinds of business a great number of usages and customs have gradually been built up. These customs are rarely carried in express terms into contracts made with reference to such kinds of busin...
-Sec. 605. Incomplete Written Contracts
Contracts of this sort, being perfectly valid if oral, may be in part reduced to writing by the parties and left oral in part.1 Whatever the rule may be as to a contract within the provisions of the s...
-Sec. 606. Adding Party To Simple Written Contract By Extrinsic Evidence
If A signs a written contract made with B on behalf of A's principal X, and affixes his own name thereto without apt words to show that he is acting only as agent B may undoubtedly hold A on such cont...
-Sec. 607. Effect Of Knowledge Of Identity Of Principal
In many of the cases some emphasis is laid on the fact that the principal was not disclosed when the agent entered into the contract with the adversary party. The importance of this fact is 1See Sec....
-Sec. 608. Subsequent Oral Modification
The parol evidence rule by its terms applies only to prior and contemporaneous negotiations. Contracts which are in writing merely because the parties thereto chose to reduce them to writing offer no ...
-I. History Of The Statute
Sec. 609, The fourth section of the statute of frauds. In the twenty-ninth year of the reign of Charles II., Parliament passed a statute for the prevention of frauds and perjuries. This statute cover...
-Sec. 610. Special Promise Of Executor Or Administrator To Answer Damages Out Of His Own Estate
This clause of the statute does not include promises on which the executor or administrator is personally liable, even though made in consideration of property or services for the benefit of the estat...
-Sec. 611. Scope Of Clause
This clause of the statute refers to transactions in which two distinct liabilities, involving three persons, must co-exist. It assumes that C has incurred or is incurring a liability to B, and terms ...
-Sec. 612. Theory That Continued Existence Of Original Debt Is Test
The theories actually established by the adjudicated cases may be grouped under four heads. (1) Some courts hold that the test of the applicability of the statute is the continued existence of the old...
-Sec. 613. Theory That Independent Liability Of Promisor Is Test
(2) Other courts hold that if the new promise is not dependent on the payment of the pre-existing indebtedness it is not within the statute of frauds, but that if it is so dependent it is within the s...
-Sec. 614. Theory That New Consideration For Benefit Of Promisor Is Test
(3) Other courts hold that if the new promise is based on a new consideration which is a pecuniary benefit to the promisor, the new promise is not within the statute of frauds, but that otherwise it i...
-Sec. 615. Theory That New Consideration Of Any Kind Is Test
(4) Some courts hold that if A's promise rests on a new consideration, distinct from C's liability the statute does not apply, whether the consideration is a benefit to the promisor or a detriment to ...
-Sec. 616. Comparison Of Theories
It will be noticed that the same state often appears as enforcing two or more theories. There are two reasons for this: first, certain facts in one case may require the court to invoke a theory which ...
-Sec. 617. Essential Features Of This Clause. - Debt Of Third Person Must Exist
In turning from an abstract statement of the principles which determine the applicability of the statute, to a consideration of the adjudications themselves, we find that while the cases are far from ...
-Sec. 618. Effect Of Sole Liability Of Promisor
A contract whereby A agrees to pay B for property, services, and the like to be delivered to C by B, or performed for him, is valid, as the detriment to B is a consideration for C's promise.1 The liab...
-Sec. 619. Effect Of Independent Liability Of Party Receiving Benefit. If B Is To Furnish Goods To C And Is To Hold C And A Both Liable
C. 523; 34 S. E. 686; Grand Forks, etc., Co. v. Tourtelot, 7 N. D. 587; 75 N W. 901; Kesler v. Cheadle, 12 Okla. 489; 72 Pac. 367; Mackey v. Smith, 21 Or. 598; 28 Pac. 974; First National Bank v. Cott...
-Sec. 620. Promisor Must Incur Liability On Debt Of Other
To come within this clause of the statute the promise must be one to answer for, that is, to incur some liability on the debt of another. Hence, if A's promise to B is not to incur liability on C's ...
-Sec. 621. Debt Of "Another." - Promise Cannot Be Made To Original Debtor
To be included in this clause of the statute the promise must be to answer for the debt of another. A promise by A to B to pay B's debt is not a promise to pay the debt of another within the meani...
-Sec. 622. Promise To Pay One's Own Debt
If the promisor is promising merely to pay his own debt it is not a promise to pay the debt of another within the statute, even if the effect of such payment will be to discharge the debt of another...
-Sec. 623. Assumption Of Debt Of Other
A may incur an obligation to C, which he agrees with C to discharge by paying the amount due thereon to B in payment of, or as credit upon, C's debt to B. This transaction between A and C is not a nov...
-Sec. 624. Guaranty As Part Of Contract Of Assignment
If A sells to B an obligation of C which A owns, and as part of the sale A guarantees the obligation such promise is not within the statute of frauds.1 Thus, if A in payment of certain property sold t...
-Sec. 625. Promise To Pay Out Of Debtor's Funds
If A has in his hands money or property belonging to C, out of which he has authority to pay C's debt to B, and A promises to pay C's debt to B, A's promise is not within this clause of the statute.1 ...
-Sec. 626. Promise To Accept Order Or Draft
If A has in his hands money or property belonging to C, out of which he has authority to pay C's debt to B, A's promise to B to accept an order drawn by C upon such fund is not within the statute.1 So...
-Sec. 627. Del Credere Agency
If A is B's agent, and as part of the contract of employment, A agrees to be personally liable to B on all contracts made by A for B with third persons, A's promise is not within this clause of the st...
-Sec. 628. Promise To Discharge Liens
If A buys property from C which is encumbered by liens held by B, and A is not bound by his contract with C to pay off the liens but subsequently in consideration of a release of the lien1 advance to ...
-Sec. 629. Discharge Of Liability.- Novation
If A is indebted to C and C is indebted to B, a contract between the three whereby B releases C and C releases A and A agrees to pay to B the indebtedness originally owed by him to C is not infrequent...
-Sec. 630. Promise To "Answer For " Antecedent Liability
Where A promises to pay a pre-existing debt of C's to B in case C does not pay it, and C's liability to B is unaffected, A's promise is within the statute.1 Thus where the administrator of 2 Perkins...
-Sec. 631. Promise To "Answer For" Contemporaneous Liability
Where A promises to pay to B a liability of C's incurred at the time that A's promise is made, if C does not pay it, as where B furnishes C with goods,1 such as lumber2 or fodder for horses,3 or rende...
-Sec. 632. What Shows Intention To Assume Primary Liability
What form of words shows an intention to assume a primary liability for the debt in question cannot be determined in advance by arbitrary rules. Promises to see that B is paid,1 that B will get his...
-Sec. 633. Application Of Foregoing Rules To Building Contracts
A common illustration of these rules is found where A owns realty, lets a contract to C for erecting a building thereon and subsequently finding that C cannot get credit from B, A agrees to pay B for ...
-Sec. 634. Contracts Of Indemnity
If A promises to indemnify B against certain liabilities, the question of the application of this clause of the statute of frauds depends on A's previous relation to such liability. If the liability i...
-Sec. 635. Contracts In Consideration Of Marriage
This clause of the statute is held not to include contracts to intermarry.1 According to some authorities it does not include contracts between two persons about to intermarry concerning their respec...
-Sec. 636. Scope Of Clause
The wording of this clause of the statute shows the legislative intention to include contracts of every sort which affect the title to realty or any interest therein. Accordingly a discussion of this ...
-Sec. 637. Duration Of Estates Included In This Clause.- Freeholds
Any estate in realty is included within the meaning of the words under discussion. Thus estates in fee1 or for life2 are, of course, included. ...
-Sec. 638. Estates For Years
An oral contract to lease realty for a term of years is within the statute if not specifically excepted therefrom.1 Hence a written contract for a lease, subsequently, before acceptance, modified over...
-Sec. 639. Possessory Rights And Land Certificates
A possessory right to realty is-an estate therein even if it may be thereafter adjudged to be inferior to the right of one claiming under paramount title. Accordingly a contract which deals with posse...
-Sec. 640. Contracts Concerning Land Of Third Person
This clause includes contracts whereby A contracts with B to cause an interest in C's realty to be conveyed to B.1 It is immaterial, under the language of the statute whether the realty which is the s...
-Sec. 641. Equitable Estates
Equitable estates in realty, as well as legal estates, are within this clause of the statute.1 Thus if A has a valid contract with 4 Lester v. White, 44 111. 464. 5 East Omaha Land Co. v. Hansen, 11...
-Sec. 642. Creation Of Mortgage Or Lien
If a debt is incurred by an owner of realty under such circumstances that it does not become a lien upon such realty by the operation of law, an oral agreement by such owner that such debt shall be a ...
-Sec. 643. Lien Created By Operation Of Law
If the lien is created by the operation of the law and not by the agreement of the parties, the statute of frauds does not, of course, apply to its creation. Thus a vendor's implied lien on realty may...
-Sec. 644. Contract For Reconveyance Of Mortgaged Realty
(2) A contract for the reconveyance of realty conveyed by an instrument which is in form a deed, but in reality a mortgage, on payment of the debt to secure which the instrument is given is not within...
-Sec. 645. Release Of Equity Of Redemption
(3) With reference to the oral release of an equity of redemption, if the realty in question is encumbered by a mortgage which shows on its face that it is a mortgage, a contract for the sale or relea...
-Sec. 646. Release Or Assignment Of Liens
However created, a lien is not an interest in land, but merely a security for payment of a debt. From this it follows that (4) a contract to release a mortgage is not within this clause of the statute...
-Sec. 647. Contract To Acquire Legal Title To Protect Existing Interest
A contract by which one party agrees to acquire the legal title by purchase at a judicial sale and to recognize and protect a preexisting equitable interest of another in such land is not within the s...
-Sec. 648. Partnership Realty
Whether a partnership can be formed by oral contract for the purpose of dealing in realty and for sharing the profits and losses out. of such dealing is a question on which there is great diversity of...
-Sec. 649. Contracts To Convey Partnership Realty
While realty bought with partnership funds is treated for some purposes as personalty, a contract to convey an interest therein is within the statute.1 However a contract to take a new partner into a ...
-Sec. 650. Mining Claims
A contract to locate mining claims and divide the profits therefrom illustrates the diversity of judicial opinion as to partnership contracts for dealing in realty; being held in some jurisdictions to...
-Sec. 651. Easements
Any interest in lands includes easements and incorporeal hereditaments. If an easement passes under a conveyance of specific realty as appurtenant thereto, no separate written contract for the enjoy...
-Sec. 652. Party Walls And Fences
Whether contracts to erect and maintain party walls and fences are contracts within the statute of frauds depends on whether they are regarded as contracts creating easements or as contracts for work ...
-Sec. 653. Contracts For Licenses
A license is an authority given to one person to do some act upon the land of the licenser, without passing any estate in such land.1 Such authority is ordinarily revocable at the will of the licenser...
-Sec. 654. Fixtures
Contracts for the sale of fixtures which are held to be part of the realty are within this clause;1 while contracts for the sale of such fixtures as are removable and are held to be personalty are not...
-Sec. 655. Trees And Crops
Growing trees, other than trees in a nursery, are held in most jurisdictions to be realty. Accordingly a contract for the sale of growing trees, as such, to be removed by the vendee is within this cla...
-Sec. 656. Contracts For Work On Realty
A contract to do work on the land of another is not within this section of the statute of frauds, even if the work consists in annexing something to the realty, as planting crops,1 erecting a barn,2 o...
-Sec. 657. What Contracts Are Within This Clause
The contract or sale referred to in this clause is one which creates or transfers an estate or interest. The first test to apply, therefore, in determining the effect of this clause of the statute u...
-Sec. 658. Contracts To Convey Or Devise Realty
This clause of the statute includes contracts which create or convey any interest in or concerning realty except such interests as may be specifically or impliedly excepted therefrom by statute. It in...
-Sec. 659. Releases
A release of an interest in realty is within the statute, whether the release attempts to pass a fee,1 or a life estate,2 or a term of years,3 or an equitable interest.4 So an agreement by an heir mer...
-Sec. 660. Reservations
An oral reservation of an interest in realty is as much within the statute as an oral contract to convey.1 Thus an oral reservation of growing trees,2 or a right of pasture,3 is within the statute. ...
-Sec. 661. Contracts To Purchase Realty
This clause of the statute includes contracts to purchase realty as well as contracts to sell it.1 It makes no difference as to the application of the statute which party to the contract is attempting...
-Sec. 662. Purchase From One, Under Contract To Sell To Another
If A buys land from X with A's own money, and takes the title in his own name, under a contract with B to convey such realty to B when B should pay to A the price of such realty, A's contract is withi...
-Sec. 663. Conveyance Under Contract To Reconvey To Grantor
If A conveys realty to B in reliance on B's oral promise to reconvey, B's promise is within this clause of the statute.1 This rule assumes that apart from the contract, the conveyance leaves no equit...
-Sec. 664. Contract To Pay Commission To Agent For Sale Of Realty
A contract to pay an agent a commission in money or other personalty for finding a purchaser for realty does not give the agent any interest in realty and is not within this clause of the statute.1 A ...
-Sec. 665. Public Extra-Judicial And Judicial Sales
A sale of realty at public auction is within the statute as long as the sale is extra-judicial.1 Thus a sale at public auction under a power of sale in a mortgage is within the statute of frauds.2 An ...
-Sec. 666. Effect Of Variation In Statute
The scope of this clause of course depends on the wording thereof in the particular statute under discussion. Accordingly, under a statute which omits the words any interest in or concerning lands, ...
-Sec. 667. Subject-Matter Included
This clause of the statute classifies contracts according to the time of performance. By the weight of authority contracts of every kind of subject-matter may be included within its terms. In some ju...
-Sec. 668. General Scope Of Clause
This clause of the statute includes contracts which by their terms cannot be performed within one year from the date on which they are made.1 Applying this rule to the adjudicated cases we find that t...
-Sec. 669. Contracts To Be Performed On One Side Within The Year
In most jurisdictions it is held that the statute has no application to a contract which is to be performed on one side within the year and on the other side not within the year.1 Some jurisdictions h...
-Sec. 670. Contracts To Last A Year From A Future Date
A contract which is to last for a year from the time that performance begins, and the performance of which is to begin at a day subsequent to the day on which it is made, is not a contract which can b...
-Sec. 671. Computation Of The Year
If any appreciable interval of time is to intervene between the making of the contract and the time of performance, no matter how slight, and the contract is by its terms not to be performed until at ...
-Sec. 672. Contracts Which Cannot Be Performed Within The Year
A contract which for its performance requires payment of money or delivery of property at intervals extending over a year from the date of making the contract is within the statute.1 Thus a promise to...
-Sec. 673. Contracts To Be Performed Within A Given Time
A contract by its terms to be performed inside of a year is clearly not within the statute.1 If the time within which performance may be made is longer than one year, the principles applied to this ...
-Sec. 674. Time Of Performance Indefinite - May Occur Within The Year
Contracts for the performance of which no time is fixed, and which from their subject-matter admit of performance within the year, are not within this clause of the statute,1 even if it is probable th...
-Sec. 675. Performance On Happening Of Uncertain Event Which May Occur Within The Year
If the contract provides for performance upon the happening of some event which may or may not take place within the year, such contract is not within the statute. Thus a contract to be performed on t...
-Sec. 676. Contracts To Be Performed During Life
Human life is uncertain and any person alive at a given time may die within a year from that time. On this principle a contract which by its terms is not to be performed for a longer period than durin...
-Sec. 677. Contract For Fixed Period Greater Than The Year, But Terminable Within The Year
If a contract, by its terms, is to continue beyond the year from the date of the making thereof, but by a further provision may be discharged or performed by the happening of some event before the end...
-Sec. 678. Performance On Happening Of Uncertain Event Which Cannot Reasonably Happen Within The Year
If the time of performance is fixed only by reference to the happening of a future event which, in the ordinary course of nature, cannot happen inside of a year, the contract is within the statute. Th...
-Sec. 679. The Seventeenth Section
The seventeenth section of the original statute of frauds provided: And bee it further enacted by the authority aforesaid that from and after the said fower and twentieth day of June noe contract for...
-Sec. 680. What Is A "Contract For Sale."
This section of the statute includes sale proper, that is, transfer of the title to personalty in consideration of a price in money.1 It also includes barter, or conveyance of the title to personalty ...
-Sec. 681. Contract For Work And Labor
If the contract is essentially one for work and labor, and the title to personalty is not to pass as a result thereof, it is not within the statute. Thus a contract for publishing an advertisement,1 o...
-Sec. 682. Contract Of Sale Distinguished From Contract For Work And Labor
It is often difficult to determine whether a contract is one for the sale of a chattel and so within the statute of frauds, or for work and labor, and so not within the statute. The courts do not agre...
-Sec. 683. Contract To Improve Realty
A contract to attach property to realty and to furnish labor for so doing is held not a contract for the sale of goods. Thus, contracts to erect a building,1 a monument,2 a bridge,3 or attaching stoki...
-Sec. 684. Meaning Of "Goods, Wares And Merchandise." - Incorporeal Personalty
Whether the term goods, wares and merchandise includes incorporeal personalty which passes by assignment or by delivery of a written evidence thereof, such as notes, drafts, checks, bonds, stocks a...
-Sec. 685. When Memorandum Must Be Made
The fourth section of the statute of frauds provides that no action shall be brought upon contracts of the classes therein enumerated unless the agreement or some note or memorandum thereof shall be i...
-Sec. 686. Undelivered Instrument As Memorandum
If A and B enter into an oral contract within the statute of frauds, and A subsequently makes and signs a written memorandum of such contract, which memorandum is not delivered but is retained by him ...
-Sec. 687. Form Of Memorandum
If the memorandum sets forth the requisite facts, and is in writing and duly signed, its form is immaterial.1 A memorandum showing all the terms of the contract is sufficient, although the parties int...
-Sec. 688. Memorandum Consisting Of Several Writings
The written contract or memorandum required by the statute does not necessarily consist of one writing alone. It may as well consist of two or more writings.1 If the offer is made in one instrument an...
-Sec. 689. Necessity And Form Of Signature
Under the statute of frauds a written contract or a note or memorandum thereof is of no validity unless it is signed by the party to be charged therewith or by some one authorized by him.1 Hence a mem...
-Sec. 690. Place Of Signature
The original statute required the contract note or memorandum to be signed. Where the statute is so worded, the name of the party may appear at any part of the instrument if placed there with the in...
-Sec. 691. By Which Party Memorandum Must Be Signed
The statute does not require the contract, note or memorandum to be signed by both parties but only by the party to be charged therewith. This is usually the defendant in an action to enforce the cont...
-Sec. 692. Authority Of Agent To Sign.- Form Of Authority
The statute allows the signature to be made by the party to be charged therewith or some other person thereunto by him lawfully authorized. Under this wording, the contract, note or memorandum may b...
-Sec. 693. Nature Of Authority
Since the statute provides for a signature by an agent lawfully authorized, a signature by one not authorized to act for another cannot, at least in the absence of ratification, bind such other.1 Th...
-Sec. 694. Ratification Of Unauthorized Agency
Whether an oral ratification of an unauthorized signature is sufficient depends, in part, upon the statutory requirements for exception to the general rule that a memorandum made after the contract is...
-Sec. 695. Form Of Signature By Agent.- Adding Party By Extrinsic Evidence
In written contracts except those which like negotiable instruments must be entirely in writing,1 it is always possible to show that a written contract signed by X was signed by him as agent for A in ...
-Sec. 696. Elements Of Memorandum In General.- Incomplete Memoranda
If the outward form of the memorandum is in compliance with law, its sufficiency then depends on its contents. By the provisions of the statute, the contract must be proved by writing. No provision is...
-Sec. 697. Memorandum Must Show Existence Of Contract
First, the memorandum must show that the parties intend thereby to enter into a contract or that they have already entered into a contract.1 Among the illustrations of a written memorandum defective ...
-Sec. 698. Memorandum Must Show Parties To Contract
Second, the memorandum must show who are the parties to the contract and their relation thereto; not only who is the promisor, but who is the promisee as well.1 Thus a memorandum which does not in so...
-Sec. 699. Subject Matter. - Realty
Third, the memorandum must set forth the subject-matter with such certainty that it can be identified without resorting to oral evidence of the intention of the parties direct as to the subject-matter...
-Subject Matter. - Realty. Continued
18 Burgon v. Cabanne, 42 Minn. 267; 44 N. W. 118. 19 Lauder v. Peoria, etc., Society, 71 111. App. 475; Lingeman v. Shirk, 15 Ind. App. 432; 43 N. E. 33. 20 Alabama Mineral Land Co. v. Jackson, 121 ...
-Sec. 700. Other Types Of Subject-Matter
While questions as to the sufficiency of the description of the subject-matter are raised most frequently in contracts for the sale of realty, they are not confined to that class. The same test applie...
-Sec. 701. Consideration
Fourth, whether the consideration must be set forth in the memorandum is a question on one branch of which there is a hopeless conflict of authority. There are really two separate questions here invol...
-Sec. 702. Price And Terms
The second question concerns the consideration when it consists of executory promises. In such cases the consideration is not only important because it makes the executory promise of the adversary par...
-Sec. 703. What Is Statement Of Consideration
In jurisdictions where the consideration must appear the question of what amounts to a statement of the consideration has often been presented for decision. If the consideration is expressly stated, t...
-Sec. 704. Memorandum Showing All Terms Sufficient
If the memorandum shows all the terms of the transaction, it is clearly sufficient if the contract is one which is definite enough to be enforced if it were not for the statute of frauds, since this s...
-Sec. 705. Methods Of Satisfying The Seventeenth Section
An important point of difference between the fourth section and the seventeenth section of the statute of frauds is this. The fourth section provides without alternative provision, that the contract o...
-Sec. 706. Part Payment
By the terms of the statute payment of part of the purchase money is sufficient.1 Payment implies that the vendor takes the thing given in payment with that understanding. Thus a tender of the purchas...
-Sec. 707. Earnest
Earnest was originally a sum of money paid by the vendee to bind the vendor to his offer; a distinct payment for the seller's forbearance to sell or deliver a thing to any one else.1 As it bound the...
-Sec. 708. Acceptance And Receipt.- Necessity Of Both
By the terms of this section of the statute, acceptance and actual receipt of part or all of the personalty sold is sufficient to make the contract enforceable, without a written memorandum or a payme...
-Sec. 709. Receipt
Receipt within the meaning of the statute is the acquisition by the vendee, and the corresponding surrender by the vendor, of the right of possession of the property sold.1 The act of the ponderous to...
-Sec. 710. Acceptance
Acceptance within the meaning of the statute consists of words or acts of the buyer sufficient to show his intention to assume exclusive dominion over the property purchased, thereby acquiring title t...
-Sec. 711. Acts Of Vendor Insufficient As Receipt And Acceptance
Acceptance and receipt must be acceptance and receipt by the purchaser. Acts of the seller alone, though in performance of the contract, cannot serve as compliance with the statute of frauds.1 If the ...
-Sec. 712. Time At Which Receipt And Acceptance, And Part Payment, Must Be Made
Receipt and acceptance need not accompany the sale. If they occur subsequently in pursuance of the sale, the statute is complied with.1 In the absence of specific statutory provision part payment may...
-Sec. 713. Complete Performance On Both Sides
The section of the statute under discussion provides that no action shall be brought whereby to charge parties to the classes of contracts therein specified. From this wording it is plain that the l...
-Sec. 714. Complete Performance On One Side, Leaving No Act Within The Statute To Be Done
If the contract requires A to do an act which is one of those named in this section of the statute of frauds, and requires B to do an act which is not one of those named in this section, complete perf...
-Sec. 715. What Constitutes Performance
The question of the applicability of the statute depends therefore in many cases on whether the contract has been performed or not. Delivery of a deed by the vendor to his own agent subject to his ord...
-Sec. 716. Complete Performance On One Side Leaving Act Within The Statute To Be Done
If, on the other hand, B, who by the terms of the contract is to do an act which is not within the statute, performs the contract fully on his part, while A, who by the terms of the contract was to pe...
-Sec. 717. Part Performance
In equity it is settled that certain acts in performance of an oral contract which without such acts would be within the statute of frauds, will withdraw such contract from the operation of the statut...
-Sec. 718. Is Part Performance A Doctrine Of Equity Alone?
The doctrine of part performance, so-called, is in most jurisdictions treated as a purely equitable doctrine. Accordingly in such jurisdictions part performance of an oral contract which is within the...
-Sec. 719. What Acts Constitute Part Performance
Since part performance is a doctrine of equity only, questions of part performance usually arise in suits for specific performance, and as in each case the ultimate question is whether specific perfor...
-Sec. 720. Part Performance As Applying To Contracts For The Sale Of Realty
The doctrine of part performance clearly applies to contracts for the sale of realty or some interest therein.1 Thus if the parties to an oral contract of partition have taken possession in severalty ...
-Sec. 721. Change Of Possession, Payment Of Consideration And Erection Of Valuable Improvements
If in reliance on the oral contract the vendee has taken possession of the realty sold,1 has paid part or all of the consideration agreed upon and has made valuable improvements upon such realty, the ...
-Sec. 722. Payment Of Purchase Price As An Essential Element Of Part Performance
That payment of part or all of the purchase price is not an essential feature of part performance is evident from the rule which applies to oral promises to make gifts of realty. If, in reliance upon ...
-Sec. 723. Change Of Possession And Payment Of Consideration
If the vendee in reliance upon an oral contract for the sale of realty enters into possession under the contract of sale and pays part or all of the purchase price, these acts constitute such part per...
-Sec. 724. Change Of Possession And Alteration In Circumstances
If the vendee takes possession of realty under an oral control for its sale and alters his position in reliance on such contract, the contract is not within the statute.1 Illustrations of the change o...
-Sec. 725. Change Of Possession And Erection Of Valuable Improvements
If the vendee, in reliance on the oral contract, has taken possession of the realty sold and has erected valuable improvements thereon the contract is not within the statute in equity.1 Thus if a rail...
-Sec. 726. Change Of Possession
Thus far the acts commonly relied on as part performance have been treated as to their effect in combination. A discussion of their effect separately still remains. If the vendee in reliance upon an o...
-Sec. 727. Elements Of Change Of Possession
Possession, in order to constitute part performance, must be taken under and by virtue of the contract and must be referable solely to such contract.1 If the vendee is in possession when the contract ...
-Sec. 728. Erection Of Valuable Improvements
If the vendee is in possession when the contract for the sale of the realty is made the subsequent construction by him of valuable improvements in reliance on such contract may amount to part performa...
-Sec. 729. Contracts Locating Boundaries
If the boundary between two adjoining owners of realty is in dispute, an oral agreement between them locating such boundary line is not within this clause of the statute,1 according to 7Geer v. Goudy...
-Sec. 730. Acts Of Part Performance Not Involving Possession Of Realty
It is often said by the courts that there can be no part performance of an oral contract for the sale of realty which will prevent the statute of frauds from applying unless possession if the realty s...
-Sec. 731. Payment Of Consideration
It has already been stated that full payment of the purchase price alone will not take the contract out of the statute.1 Still less will payment of part of the purchase price take the case out of the ...
-Sec. 732. Omission To Act, As Part Performance
Mere omission to act cannot amount to part performance.1 Thus, where a vendor who has reserved the right of taking growing timber off the land sold for a certain time, subsequently makes an oral contr...
-Sec. 733. Part Performance As Applied To Contracts Not To Be Performed Within The Year
The doctrine of part performance has been considered thus far solely with reference to contracts for an interest in realty. Whether the doctrine has any application to the other classes of contracts i...
-Sec. 734. Part Performance As Applied To Contracts In Consideration Of Marriage
A contract in consideration of marriage is not taken out of the statute, according to the weight of authority, by the marriage of the party to whom the promise is made in reliance on such promise.1 Th...
-Sec. 735. Part Performance As Applied To Contracts To Answer For The Debt Of Another
A promise to answer for the debt of another is not taken out of the statute by performance by the party to whom the promise is made.1 While some cases are explained on the theory of part performance2 ...
-Sec. 736. Evidence Of Oral Contract
If part performance is relied upon to take an oral contract out of the statute of frauds the evidence of the oral contract must be clear, unequivocal and definite.1 It is necessary to offer unequivoc...
-Sec. 737. To What Classes Of Contract The Fourth Section Of The Statute Applies
The fourth section of the statute of frauds applies to certain types of special promise, agreement and contract or sale. The courts have in some cases considered to what classes of contract this...
-Sec. 738. Whether Contract Is Void
While the courts not infrequently say that a contract within the statute of frauds and not complying with its requirements is void,1 this is simply another example of inaccuracy in the use of the word...
-Sec. 739. Whether Contract Is Voidable
Such contracts are said by many courts to be voidable.1 This term is more nearly correct than void, but it may be doubted whether it is the correct term to use, at least in many jurisdic tions a co...
-Sec. 740. Contract Unenforceable
If the statute of frauds is properly interposed as a defence to a contract which falls within its terms and does not comply with its requirements, such contract is unenforceable.1 No action at law can...
-Sec. 741. Statute Of Frauds A Rule Of Evidence
The theory of the statute of frauds that best explains the greatest number of cases is that it is essentially a rule of evidence, and has no effect of any kind upon the formation of the contract, but ...
-Sec. 742. Effect Of Consideration For Contract
Since the statute of frauds takes away no requisite of a valid contract but merely adds a requisite as to the means of proof,1 a contract on valuable consideration for the conveyance of realty,2 as in...
-Sec. 743. Extrinsic Evidence Admissible To Show Informal Memorandum Incomplete
If the memorandum is so incomplete on its face that it does not purport to be a complete contract, extrinsic evidence may be received to show if there were other terms of the contract,1 and if there w...
-Sec. 744. Extrinsic Evidence Admissible If Explanatory
The statute of frauds does not forbid the introduction of oral evidence. It merely requires a written note or memorandum of the contract. In certain cases where extrinsic evidence is admissible to exp...
-Sec. 745. Extrinsic Evidence Admissible To Identify Writing
If the signed memorandum refers to another written instrument, extrinsic evidence is admissible to identify such other instrument.1 If written contract provides for the division of land purchased of...
-Sec. 746. Admissibility Of Extrinsic Evidence For Identification
If the subject-matter1 or parties2 are identified by the contract with reasonable certainty, oral evidence is admissible to show the persons or things to which such description applies. So where certa...
-Sec. 747. Extrinsic Evidence Inadmissible To Show Collateral Contract
Parol evidence cannot be received to add a new term to a written contract within the statute of frauds, even though such term is collateral and proper thus to be proved in the case of the ordinary wr...
-Sec. 748. Oral Modification Of Contract
A contract within the statute of frauds, complying with its requirements, cannot, according to the weight of authority, be modified subsequently by an executory oral agreement so as to make a new cont...
-Sec. 749. Right Of Party Not In Default To Recover A Reasonable Compensation
While in case of a breach of a contract which falls within the statute of frauds and does not comply with its requirements, no recovery can be had for damages for breach of the executory part thereof,...
-Sec. 750. Right Of Party In Default To Recover A Reasonable Compensation
In case of a contract not affected by the statute of frauds, and not affected either by defects in offer and acceptance or by peculiarities-in the status of the parties thereto, the party who has brok...
-Sec. 751. Amount Of Recovery
This right of recovery is in the nature of quasi-contract.1 It is not an indirect means of enforcing the contract. It may be exercised even where an action on the contract has failed.2 The contract it...
-Sec. 752. Methods Of Taking Advantage Of Statute
If, in an action on a contract within the statute of frauds and not complying with its requirements, the statute of frauds is not taken advantage of in a proper manner by raising the question on the p...
-Sec. 753. Severable And Inseverable Contracts
The enforceability of a contract for the sale of chattels when affected by the statute of frauds often depends on whether it is several or inseverable. This question may arise in two ways. First, the ...
-Sec. 754. Conjunctive Promises
If A and B make an oral contract whereby A agrees to do two things, one of which is within the statute of frauds and the other of which is not, B's right to enforce such oral contract if A interposes ...
-Sec. 755. Alternative Promises
If A and B enter into an oral contract by the terms of which A agrees either to perform an act which is not within the statute of frauds or at his election to perform a different act which is within t...
-Sec. 756. Types Of Special Statutes
Local statutes have required other classes of contracts to be in writing or to be proved by writing. Thus contracts of corporations exceeding a certain amount,1 or contracts of a married woman affecti...
-Sec. 757. General Scope Of This Class
In considering the contracts which must be in writing as distinguished from those which merely must be proved by writing and which were considered in the preceding chapter,1 it must be noted that thes...
-Sec. 758. Elements Of Negotiable Contracts - Must Be In Writing
In order to be negotiable a contract must possess certain elements.1 It must be in writing. If in writing, lead-pencil is sufficient though not to be commended.2 Since a negotiable contract must pass ...
-Sec. 759. Execution
The requisites of a valid execution of a contract which by law must be in writing are in some respects like those of ordinary written contracts and in some respects quite different. A contract which i...
-Sec. 760. Definite Parties
The parties to the contract must be clearly described therein.1 Thus a promise to an alternative payee is not negotiable.2 However, if the alternative payees are united in interest so that a payment t...
-Sec. 761. Adding Party To Negotiable Instrument By Extrinsic Evidence
A contract may be signed by A with his own name, but entered into by him on behalf of his real principal X, with the adversary party B. If the contract is one which the law requires to be in writing, ...
-Sec. 762. Discharging Party To Negotiable Instrument By Extrinsic Evidence
If a party to a negotiable instrument who has signed in such a way as to assume a personal liability, attempts to show that the oral understanding of the parties was that he was signing merely as agen...
-Sec. 763. Promise Or Order
The contract must be either a promise to pay or an order commanding another to pay.1 The former is a promissory note or bond: the latter a bill of exchange or check. So a promise by A to B to accept a...
-Sec. 764. For Money Only
The contract must be one for the payment of money only. Accordingly, a promise to pay in work, as a railroad ticket,1 or in property other than money,2 even if such other property is itself negotiable...
-Sec. 765. For A Sum Certain
The promise or order must be for a sum certain. If the amount to be paid cannot be determined from the face of the contract itself, the contract is not negotiable.1 A note expressing the amount in fig...
-Sec. 766. Contract Must Be Absolute
The payment must be unconditional. If some event which may or may not happen is a condition precedent to the payment, the contract is not negotiable.1 Thus payment out of a particular fund,2 when cert...
-Sec. 767. Time Of Payment
Closely connected with the last element is the rule that a certain time of payment must be fixed. This does not mean that the exact date of payment is ascertainable from the contract itself. An instru...
-Sec. 768. Words Of Negotiability
A negotiable contract must contain words of negotiability.1 The customary words of negotiability are: or order, or or bearer, but other words showing an intent that the contract might be transferr...
-Sec. 769. Recital Of Consideration Unnecessary
It is customary for a negotiable instrument containing a recital of a consideration, as by the use of the words for value received. This, however, is not essential.1 Thus a check is 14 Weidler v. K...
-Sec. 770. Contracts Under Seal
The law of negotiable instruments is derived from the Law Merchant. The Seal is derived from the common law. Accordingly, at common law a sealed instrument could not be negotiable.1 Thus if two guaran...
-Sec. 771. Nature Of Implied Contract
As has been said before,1 the term contract as used at Common Law included all rights which could be enforced by one of the actions ex contractu. By the Common-Law classification every contract was ...
-Sec. 772. Work And Labor Done At Request
If one person performs work and labor for another of a sort for which compensation is customary, intending to charge therefor, and the person for whom the work is done either has requested expressly o...
-Sec. 773. Public Officers
Reasons of public policy make the case of the public officer an exception to the general rule that a request for the rendition of services implies a promise to pay therefor. If the law fixes a specifi...
-Sec. 774. Elements Of Implied Request
If the person for whom services of a kind usually made the subject of charge are rendered knows of their rendition, he is liable therefor though he has made no express request, in the absence of speci...
-Sec. 775. Acceptance Of Work And Labor
If the services are accepted voluntarily, a previous request is not necessary to the creation of liability.1 Thus if a litigant knows that a stenographer is taking and transcribing testimony during a ...
-Sec. 776. Acceptance Of Benefits Not Optional
This rule, however, applies only where the party for whom the services are rendered is free to take their benefit or to reject it. If the services are of such nature that he has no choice but to accep...
-Sec. 777. Services Rendered As Gratuity
If A renders services for B, and A does not intend at the time of their rendition to make any charge therefor, and B knows of such intention, A cannot subsequently, upon changing his mind, recover for...
-Services Rendered As Gratuity. Part 2
1Levy v. Gillis, 1 Penn. (Del.) 119; 39 Atl. 785; Evans v. Henry, 66 111. App. 144; Hill v. Hill, 121 Ind. 255; 23 N. E. 87; McFadden v. Ferris, 6 Ind. App. 454; 32 N. E. 107; Tank v. Rohweder, 98 la...
-Services Rendered As Gratuity. Part 3
117 N. Y. 168; 6 L. R. A. 212; 22 N. E. 931; Montgomery County v. Nyce, 161 Pa. St. 82; 28 Atl. 999; Fairbanks v. Benjamin, 50 Vt. 99. 34 Deer Isle v. Eaton, 12 Mass. 327; Charleston v. Hubbard, 9 N....
-Sec. 778. Services Between Members Of The Same Family.- General Principles
Services rendered between members of the same family form a common example of services rendered as a gratuity. Persons who live together as members of the same family, and render personal services eac...
-Sec. 779. Who Are Members Of Family.- Husband And Wife
As between husband and wife, there is not only a presumption that mutual services are gratuitous,1 but in many jurisdictions an express promise to make compensation therefor is unenforceable as agains...
-Sec. 780. Persons Related By Consanguinity
Where parents and children are living together as members of a family, services rendered by one for the other, come within this rule, and do not of themselves establish any implied contract to make co...
-Sec. 781. Persons Related By Affinity
This principle is not limited, however, to blood relationship. If a son-in-law or daughter-in-law renders services for parents-in law, while members of the same family,1 as by furnishing board and lod...
-Sec. 782. De Facto Membership Of Same Family
The principle under discussion is not limited to cases of relationship by blood or affinity, but it applies also to persons who are de facto members of the same family, even if there is no relationshi...
-Sec. 783. Limitations Of Doctrine
Some jurisdictions limit this doctrine to cases where the services rendered are purely personal in their nature, and such as would ordinarily be inspired by affection or the sense of duty.1 Thus, it h...
-Sec. 784. When Services Not Gratuitous
The rule that there is no implied agreement for a compensation for services between persons in domestic relations living together as members of a family, is merely a prima facie rule. In the absence o...
-Sec. 785. Extra Work
If A has agreed with B to perform a certain definite and specific contract for B, without giving his entire time to B's employment, A may recover for services rendered by him in ad dition to those spe...
-Extra Work. Continued
22 Donovan v. Driscoll, 116 la. 339; 90 X. W. 60. 1 Fulton County v. Gibson, 158 Ind. 471; 63 N. E. 982; Evans v. McConnell, 99 la. 326; 63 N. W. 570; 68 N. W. 790; Escott v. White, 10 Bush. (Ky.) 16...
-Sec. 786. Work And Labor Done Under A Contract Void For Mistake As To An Essential Element
If A and B attempt to make a contract, and by reason of some mistake in the formation no contract is made, A, who has performed work and labor under such supposed contract,1 may recover a reasonable c...
-Sec. 787. Work Done For One At Request Of Another
If A requests B to perform services for C, the mere fact of the request does not create an implied contract on the part of A to pay B for such services. The same rule applies to delivering goods.1 Thu...
-Sec. 788. Goods Sold And Delivered
An action for goods sold and delivered can be maintained wherever goods have been sold and delivered by one person to another under an express agreement which is incomplete in that the contract price ...
-Sec. 789. General Nature Of Right
If A receives money which belongs to B, under circumstances which give A no right thereto, but which bind A on principles of justice and fairness to repay such money to B, the Common Law allowed B to ...
-Sec. 790. Elements Of Right To Recover In This Action.- Money Or Equivalent Must Be Received
In order to support an action for money had and received, a person against whom the action is brought must be shown to have received, either money,1 or something which is taken as the equivalent of mo...
-Elements Of Right To Recover In This Action.- Money Or Equivalent Must Be Received. Continued
2 Snapp v. Stamvood, 65 Ark. 222; 45 S. W. 546; Buckeye (Township of) v. Clark, 90 Mich. 432; 51 N. W. 528; Matthewson v. Powder Works, 44 N. H. 289. 3 St. Louis, etc., Co. v. McPeters, 124 Ala. 451;...
-Sec. 791. Person Receiving Money Must Not Be Entitled In Good Conscience To Retain It
The right of one person to recover money which belongs to him, and which is paid to another person, depends not on whether the person to whom such payment was made could have compelled it by law if it...
-Sec. 792. Party From Whom Recovery Is Sought Must Be Placed In Statu Quo
In order to recover in an action for money had and received the person from whom recovery is sought must be placed in statu quo, unless he is a wrongdoer. A common illustration of this rule exists whe...
-Sec. 793. Action Does Not Enlarge Substantive Rights
In allowing an action for money had and received, the law intended to allow a simple remedy for a recognized right, and did not intend to create a right where there was none already. B had been dealin...
-Sec. 794. Classes Of Rights.- Receipt Of Money From Third Person
In determining the right of one whose money has been placed in the hands of another to recover the same, we must distinguish between two general classes of cases. In the first class, the party who rec...
-Classes Of Rights.- Receipt Of Money From Third Person. Continued
10Lanford v. Lee, 119 Ala. 248; 72 Am. St. Rep. 914: 24 So. 578. 11 Milwaukee v. Milwaukee County. 114 Wis. 374: 90 N. W. 447. 12 Corey v. Webber, 96 Mich. 357; 55 N. W. 982; Merchants', etc., Bank...
-Sec. 795. Receipt Of Money To Discharge Specific Obligation Due Another
If X is in some way liable to B, and places money in A's hands with which A is to pay B's debt, B may enforce such liability against A if A is not holding such money solely as X's agent.1 Thus, if X p...
-Sec. 796. Payment By One Not Beneficial Owner
If one person who has in his hands money of which another person is the beneficial owner, a payment by the holder of such money to a third person is not such a voluntary payment by the real owner ther...
-Sec. 797. Receipt Of Money From Real Owner.- Voluntary Payments
If A, a person of full legal capacity, pays money to B with the intent that it should become B's property, and no operative facts such as mistake, misrepresentation, fraud, non-disclosure, duress, or ...
-Sec. 798. Payments Not Voluntary
The general doctrine forbidding recovery of voluntary payments has of course no application to payments which are not voluntary. The general rule is, that if A receives money belonging to B, which is ...
-Sec. 799. Payment Under Duress And Undue Influence
The nature of duress as affecting the validity of contracts entered into by reason thereof has already been discussed.1 The nature of duress as determining the right of a party making payments to reco...
-Sec. 800. Payment Extorted By Imprisonment
The elements of duress of imprisonment are substantially the same for purposes of recovering payments as for avoiding contracts.1 Money unlawfully extorted by imprisonment, used as a means of extortio...
-Sec. 801. Payment Extorted By Wrongful Detention Of Goods
The original Common Law rules of duress did not allow a contract to be avoided if the person entering into it was induced to do so by a wrongful detention of goods.1 It was more just in allowing recov...
-Sec. 802. Payments Extorted By Threatened Wrongful Detention Of Goods
The weight of authority is that payments made to prevent a threatened wrongful seizure of personalty are made under duress and may be recovered.1 Thus, if a justice renders a void judgment, the case n...
-Sec. 803. Payment To Remove Cloud From Title To Realty
Duress of property need not always involve detention of personalty, however. If the unlawful acts of one person cast a cloud on the title of another to realty, a payment made to remove such cloud may ...
-Sec. 804. Lawful Act Not Duress
Outside of questions of abuse of legal process in seizing person or property, a lawful act does not amount to duress, although by such act a person is induced to make a payment which he is not willing...
-Sec. 805. Threat Of CIVIL Action
The principle that a lawful act does not constitute duress in the absence of special circumstances find illustration in the commencement of a civil action. The mere threat of a civil action is not dur...
-Sec. 806. Payment Compelled By Legal Process
If the property of one is seized on legal process procured by another in good faith and in pursuit of the ordinary remedy afforded by law 1 a payment made to procure the release of such property is ...
-Sec. 807. Breach Of Contract As Duress
A payment made to induce the adversary party to perform his contract is not made under duress and cannot be recovered. Thus excessive payments made to induce an irrigation company to continue to furni...
-Sec. 808. Other Forms Of Duress
Duress or legal compulsion is not invariably confined to duress of person or property although these are the common cases. Thus payment made by force of a statute afterward held unconstitutional, requ...
-Sec. 809. Dilemma Not Duress
The mere fact that one makes a payment when in doubt as to his legal rights and afraid of imperiling them if he refuses payment does not constitute duress.1 This is merely an illustration of a mistake...
-Sec. 810. Unfair Advantage As Duress
Payments made by one who is not on terms of practical equality with the person to whom such payments are made are looked upon, not as voluntary payments but as payments made under compulsion. Where A ...
-Sec. 811. Application Of Foregoing Principles To Taxes
Payments unlawfully coerced as taxes may be recovered.1 On the other hand, if a tax is paid voluntarily its illegality is no ground for an action to recover it.2 While there is practical unanimity of ...
-Application Of Foregoing Principles To Taxes. Continued
15 Neb. 284; 18 N. W. 81; Foster v. Pierce County, 15 Neb. 48; 17 N. W. 261; State v. Commissioners, 56 O. S. 718; sub nomine, State v. Bader, 47 N. E. 564; Sowles v. Soule, 59 Vt. 131; 7 Atl. 715; Ba...
-Sec. 812. Local Assessments
Payment of illegal local assessments, made under duress, may be recovered.1 If such payment is made voluntarily it cannot be recovered.2 As in the case of taxes, the conflict of authority appears when...
-Sec. 813. License Fees
Payment of an illegal license fee made under duress may be recovered.1 A voluntary payment of an illegal license fee cannot be recovered.2 Here again under harmony in general propositions we find mark...
-Sec. 814. Recovery Of Payments Made On Judgments.- Judgment Unreversed
The question whether payments made on a judgment can be recovered depends in the first instance upon the further question whether such judgment has been reversed, set aside, and the like, or whether i...
-Sec. 815. Judgment Reversed
A different question arises where the judgment has been reversed, set aside, modified, and the like. In such cases a payment made upon such judgment can be recovered (1) if made under duress and not v...
-Judgment Reversed. Continued
5 Footman v. Stetson, 32 Me. 17; 52 Am. Dec. 634; Thatcher v. Gammon, 12 Mass. 268. 6 Williams v. Shelbourne, 102 Ky. 579; 44 S. W. 110. 7 West v. Kerby, 4 J. J. Mar. (Ky.) 55. 8 Ellis v. Kelly, 8 ...
-Sec. 816. Payment Obtained By Fraud
As has already been stated1 one who has been induced to enter into a contract by the fraud of the adversary party, has an election of remedies, one of which is to avoid the contract and recover what b...
-Sec. 817. Payment By Misrepresentation
Payment made under misrepresentation presents fewer difficulties than payment by mistake. In cases of mistake both parties are innocent, though one may be negligent. In payment by misrepresentation, t...
-Sec. 818. Payment Under Mistake Of Fact
A person who, under a mistake of material fact, makes a payment which he is not under legal liability to make, can recover the money thus paid, if the other elements necessary in an action to recover ...
-Sec. 819. Illustrations Of Mistake Of Fact
The term mistake of fact has been held in cases involving the right to recover payments to include mistakes as to the title to realty,1 the existence of a lien thereon,2 the solvency of an estate,3 ...
-Sec. 820. Mistakes In Computation
A mistake as to the amount due on a debt,1 even where the facts as to the amount of principal and payments are known, but the amount due can be ascertained only by a long arithmetical calculation,2 is...
-Sec. 821. Recovery Of Payment On Forged Instrument
Whether recovery of payment on a forged instrument can be had from one who has taken such instrument for value and in good faith is a question which arises not infrequently, and on which there is an u...
-Sec. 822. Recovery Of Payment Causing Overdraft
If a bank pays a check which overdraws a depositor's account, some authorities hold that the bank cannot recover from payee if he does not know that such check will make an overdraft. The reasons give...
-Sec. 823. No Recovery For Mistake As To Collateral Matter
In order to permit recovery of a payment, however, the mistake of fact must not be as to some collateral matter, but must affect the very existence of the liability which the payment was intended to d...
-Sec. 824. Negligence Of Party Making Payment. - Held Not To Bar Recovery
Where payment is made by one who is under no legal liability, under mistake of fact as to the existence of such liability, the weight of authority is that such payment may be recovered, even if the pa...
-Sec. 825. Negligence Held To Bar Recovery
There is, however, some authority for the proposition that one paying under mistake of fact, which he could have disknowledge he has the knowledge itself. 2 Chitty Cont. (11 Am. Ed.) 930; quoted in B...
-Sec. 826. Innocent Payee Must Be Placed In Statu Quo
If the person to whom the money is paid by mistake receives it in good faith and without knowledge of the mistake under which it is paid, he cannot be compelled to repay it unless he can be placed in ...
-Sec. 827. Mistake Need Not Be Mutual
While the mistake under which payments whose recovery are allowed are made may be mutual,1 it is not necessary to recovery that it should be mutual.2 The doctrine of mutuality of mistake applies prima...
-Sec. 828. Payment By Mistake Of Law
Money paid with full knowledge of all material facts, under mistake of law, cannot be recovered in the absence of other reasons for allowing such recovery.1 The same principles apply where there is fu...
-Sec. 829. Illustrations.- Total Failure Of Consideration
The principle that payments made under a mistake of law cannot be recovered applies to payments made by one who was under no legal liability to make them, and who receives nothing in return therefor, ...
-Sec. 830. Doctrine That Payments By Mistake Of Law May Be Recovered
In some jurisdictions recovery of money paid under a mis-take of law may be recovered where the party to whom it is paid is in no way entitled thereto.1 Thus an executor who pays a and dishonesty.11 ...
-Sec. 831. Mistake Of Law Coupled With Other Operative Facts
Other reasons may, however, enable the party who has paid money under mistake of law to recover it. Thus where the payment is obtained by B's knowing A's mistake and taking advantage of it ;1 or by ac...
-Sec. 832. Money Paid For Use Of Another. - Voluntary Payment
Money paid to the use of another cannot be recovered unless there is a promise, either express or implied, to repay it.1 If A voluntarily pays B's debt to C, with full knowledge of the facts, under no...
-Sec. 833. Exceptions To Doctrine Of Voluntary Services And Payments. - Funeral Expenses
Certain duties imposed by law are of such character as to be easily evaded contrary to the policy of the law, if the general principles forbidding recovery in cases of voluntary payments, services or ...
-Sec. 834. Liability Of Husband For Wife's Necessaries
Another class of cases illustrating this general principle exists where one who furnishes necessaries to a wife whose husband refuses or omits to supply them may recover from him.1 While this liabilit...
-Sec. 835. Liability Of Parent For Necessaries Of Minor Child
Another class of cases exists where one who supplies necessaries to a minor child whose parent refuses or omits to supply them, may recover from such parent. If the child is living with his parent, su...
-Sec. 836. Support Of Paupers
The duty of supporting paupers which rests upon public corporations and quasi-corporations is a creature of statute. In passing such statutes the legislature intended to set forth fully and completely...
-Sec. 837. Payment On Request
If A pays B's debt upon B's request, either express or implied, A may recover from B.1 Thus, where the president and gen- 3 Bristol v. New Britain, 71 Conn. 201; 41 Atl. 548; Marlborough v. Framingha...
-Sec. 838. Payment Of Another's Debt To Protect One's Interests
If A is obliged to pay B's debt in order to protect A's property interests, A's payment is not voluntary and he may recover from B.1 If the debt which B owes, and upon which B is primortgagee a party ...
-Sec. 839. Payment By Party Secondarily Liable
If A has, at B's request, incurred a liability by reason of which A is subsequently bound to pay a debt to C upon which B was primarily liable, A may recover from B for such payment although B did not...
-Sec. 840. Waiver Of Tort.- Nature And Theory Of Doctrine
At the original English Common Law, an injured person who brought suit in contract, was not allowed to show an injury which really amounted to a tort as a means of proving the allegations of his compl...
-Sec. 841. Taking Money Or Personal Property Converted Into Money
If B converts A's money to his own use, A may sue B therefor in an action for money had and received.1 This is true, even if B's conversion amounted to larceny.2 If B has converted A's chattels, other...
-Sec. 842. Taking Personal Property Not Converted Into Money. -Theory That Assumpsit Will Not Lie
If A has converted B's property to his own use, but has kept the property in his possession, and has not sold it, there is a divergence of authority upon the question of whether he can recover from A ...
-Sec. 843. Theory That Assumpsit Will Lie
Another line of authorities, greater numerically, and treating the fiction of implied contract more rationally, allow the real owner to recover from the wrongdoer, even where the wrongdoer has not sol...
-Sec. 844. Wrongful Occupancy Of Real Property
If the tort complained of consisted in adverse possession of real property, or any form of possession thereof without the consent of the true owner, the Common Law did not allow such tort to be waived...
-Sec. 845. Liability Of Trespasser In Assumpsit
One who enters upon land, not as an adverse claimant thereof but as a mere trespasser, and who severs something of value from the realty and converts it into personalty, may be held liable in assumpsi...
-Sec. 846. Assumpsit For Occupation Of Realty Under A Formal Lease
An action for use and occupation would not lie at Common Law, if the occupant was holding by a formal lease under seal.1 At Modern Law the same principle applies, where the occupant holds by a formal ...
-Sec. 847. Other Forms Of Occupancy Excluding Liability In Contract
One who is in possession under a contract by which he is to have the use of the premises in question gratuitously, cannot be held liable in an action for use and occupation.1 An action of assumpsit fo...
-Sec. 848. Torts Not Affecting Property
The right to waive tort and sue in assumpsit is limited in some jurisdictions to torts affecting property, whereby one is enriched by receiving property or its proceeds which in good conscience belong...
-Sec. 849. Abnormal Status As Affecting Contractual Capacity
In the discussion of contracts up to this point we have assumed that both parties to the contract were of normal status. Many of the propositions of contract law have no application in cases in which ...
-Sec. 850. Theory Underlying Doctrine Of Infancy
A child lacks the judgment and discretion necessary to make ordinary contracts. If his contracts were binding on him in all cases, extravagance in personal expenditures and recklessness in business ve...
-Sec. 851. The Termination Of Minority At Common Law
The Common Law fixed the age of majority at twenty-one for both males and females. Persons under that age were infants or minors.1 This rule is, of course, an arbitrary one. There is but little differ...
-Sec. 852. Effect Of Emancipation
While the emancipation of an infant from parental control gives him a property in his own earnings from that time,1 it does not relate back so as to permit him to recover for services previously rende...
-Sec. 853. Statutes Affecting Capacity Of Minors
The legislature, under most American constitutions, has full power to modify the Common Law rules of the capacity of infants as far as concerns transactions after the passage of the statute. Where spe...
-Sec. 854. Infant Married Women
The disabilities of married women are elsewhere discussed.1 6 Hindman v. O'Connor. 64 Ark. 627; 13 L. R. A. 490; 16 S. W. 1052. 7 Wilkinson v. Buster, 124 Ala. 574; 26 So. 940. 8 Doles v. Hilton. 4...
-Sec. 855. Original Rule Concerning The Effect Of An Infant's Contract
The Common Law rule as to the effect and validity of an infant's contracts was that if the court could, as a matter of law, determine that the contract was prejudicial to the infant, it was void; if b...
-Sec. 856. Present Standing Of Original Rule
Before discussing the modern rule, it must be noticed that the old rule just given is not obsolete everywhere. It still persists in obiters.1 The English courts still apply the test regularly in contr...
-Sec. 857. Modern Rule Concerning The Effect Of An Infant's Contracts
The modern rule, in force in a great majority of the different jurisdictions, also divides the contracts of infants into void, voidable and valid contracts; but the lines of distinction between the di...
-Sec. 858. Void Contracts.- Powers Of Attorney
A supplement to the original Common Law rule already given was the rule originally laid down in conveyancing that grants made by an infant which did not take effect by delivery by his hand were void.1...
-Sec. 859. Void Contracts. - Appointments Of Agents
The rule given in the preceding section that powers of attorney are held void in many jurisdictions has been applied in some jurisdictions to all appointments of agents.1 Such an appointment is said t...
-Sec. 860. Other Contracts Held Void
An infant's contract to arbitrate has been said to be absolutely void.1 While not strictly contracts, gratuitous transfers of property are in some jurisdictions held absolutely void and incapable of r...
-Sec. 861. Valid Contracts. - Marriage
The validity of certain contracts of minors depends in part on the legal effect of certain statutes,- though this effect is not always expressed in the exact wording of the statutes,- and in part upon...
-Sec. 862. Valid Contracts. - Enlistment
The statutes of the United States allow minors over sixteen to enlist in the army if the parent or guardian consents to such enlistment. This clearly recognizes the capacity of the minor to bind himse...
-Sec. 863. Valid Contracts. - Apprenticeship
Under the old theory of an infant's contracts, a reasonable contract for teaching him a trade was for his benefit;1 under the modern theory it is held to be a necessary.2 For one or the other of these...
-Sec. 864. Valid Contracts. - Performance Of Legal Duty
If a liability is imposed upon an infant by Common Law, equity or statute, a fair and reasonable contract entered into for the purpose of discharging the liability is valid.1 Thus, if an infant holds ...
-Sec. 865. Valid Contracts. - Necessaries. - Nature Of Liability
In some cases the courts have said that an infant's contract for necessaries is absolutely valid and binding;1 and in others, they have gone to the opposite extreme and held that an infant could not b...
-Sec. 866. What Are Necessaries
Whether the goods furnished to the infant may be necessaries, and whether there is any evidence tending to show that the goods were necessaries, is a question for the court to decide, and is usually t...
-Sec. 867. Examples Of Necessaries
Lord Coke said, in a rule much quoted since, an infant may bind himself to pay for his necessary meat, drink, apparel, necessary physick, and such other necessaries, and likewise for his good teachin...
-Sec. 868. Effect Of Special Circumstances
The examples given in the preceding section illustrate prima facie rules only. Special circumstances may bring within the class of necessaries, articles which ordinarily do not belong to it. Thus the ...
-Sec. 869. Effect Of Excessive Supply Of Articles
To allow a recovery against an infant, the articles furnished must not only be such as may be necessaries, but they must also be in fact necessary for the infant under the actual circumstances. Accord...
-Sec. 870. Effect Of Existence Of Parent Or Guardian
The existence of a parent or guardian complicates the liability of the infant for necessaries. If credit is extended to the parent, the infant cannot afterwards be held liable.1 If the parent or guard...
-Sec. 871. Money As A Necessary
Money expended for necessaries for an infant,1 or advanced to pay off a pre-existing debt for necessaries,2 is itself a necessary. So is money advanced for a discharge from jail.3 Money, itself, contr...
-Sec. 872. Voidable Contracts
The remaining contracts of an infant are neither valid nor void but are voidable.1 This implies that they may be disaffirmed or ratified by the infant; the methods and legal consequences of which will...
-Sec. 873. Examples Of Voidable Contracts. - Transfers Of Property
An infant's executory contract to convey realty,1 or to purchase it;2 a lease by him,3 or to him;4 and his deed passing realty,5 are all voidable. His right to avoid is not affected by the fact that a...
-Sec. 874. Contracts For Work And Labor
By the weight of authority a minor may avoid a contract of service entered into by him after performing it in whole or in part and recover the reasonable value of his services.1 Thus a minor may avoid...
-Sec. 875. Contracts Of Suretyship
Some of the cases which followed the early rule as to the validity of an infant's contracts,1 took a contract of suretyship as the clearest example of a contract prejudicial to an infant, and declared...
-Sec. 876. Compromise And Arbitration
An infant's contract in compromise of a claim due to him, whether contract,1 or tort,2 is voidable. On his avoiding such contract whatever he has received under the compromise is to be credited upon h...
-Sec. 877. Instruments Negotiable In Form
While not always clearly expressed, the early view of an infant's negotiable contracts seems to have been that if valid at all, they must be strictly negotiable and subject to no defense in the hands ...
-Sec. 878. Contracts Of Partnership
An infant's contract of partnership usually presents one of four points for adjudication: (1) can an infant empower his partners to bind him; (2) can an infant be held personally liable by the partner...
-Sec. 879. Infant As Member Of Corporation
The courts are divided as to whether an infant can be a member of a mutual or assessment corporation.1 So there is a conflict of authority as to whether an infant can be an incorporator of an ordinary...
-Sec. 880. Concealment Or Misrepresentation Of Minority
Mere omission to disclose minority does not estop the infant to avoid the contract, or give to the adversary party any right of action, either in law or equity.1 No estoppel can arise by reason of mat...
-Sec. 881. Ratification. - Who Can Ratify
The proposition that an infant's contracts in general are voidable implies that they may be ratified. This cannot be done by an infant before reaching majority as his ratification would have no greate...
-Sec. 882. Nature And Effect Of Ratification
Ratification is not the making of a new contract, but is an election by the infant between his two antagonistic rights of treating a pre-existing contract as void or valid, in favor of treating it as ...
-Sec. 883. What Constitutes Ratification
An express promise by the former infant to comply with the terms of the contract1 or his conduct in keeping realty purchased, and treating it as his own after he comes of age,2 or selling it,3 or a su...
-Sec. 884. Who Can Disaffirm
The infant may elect the other alternative and rescind the contract. This privilege is personal to himself and his representatives. The adversary party to the contract cannot avoid it.1 Thus insurance...
-Sec. 885. When Infant Can Disaffirm
An infant can disaffirm any contract during minority,1 except a contract executed by the conveyance of real estate, which can be disaffirmed only after he reaches majority.2 On reaching 14 Oliver v. ...
-Sec. 886. What Constitutes Disaffirmance
The modern rule is that no set form of disaffirmance is necessary, but that the infant's intention to disaffirm together with any conduct on his part which makes this intention clear constitutes a suf...
-Sec. 887. Partial Disaffirmance Impossible
The infant cannot, without the consent of the adversary party, affirm that part of the transaction which is advantageous to him and disaffirm the rest; but he must treat the entire transaction as a un...
-Sec. 888. Restoration Of Consideration On Disaffirmance
It is difficult to state a general rule which will in every case operate fairly between the infant who disaffirms a contract and the adversary party. It is evident, however, that if the infant is in e...
-Restoration Of Consideration On Disaffirmance. Continued
10 Clark v. Tate, 7 Mont. 171; 14 Pac. 761; Griffis v. Younger, 41 N. C. 520; 51 Am. Dec. 438. 11 Vogelsang v. Null, 67 Tex. 465; 3 S. W. 451. 12 Shroyer v. Pittinger, 31 Ind. App. 158; 67 N. E. 475...
-Sec. 889. When Restoration Of Consideration Must Be Made
Whether restoration of consideration by an infant is on the one hand a condition precedent to disaffirmance or concurrent with it, or, on the other, it is not a condition precedent, but on disaffirman...
-Sec. 890. Results Of Disaffirmance
On disaffirmance of the contract by the infant, the rights of the parties are to be determined without any reference to the provisions of the contract.1 Thus, an infant agreeing to work for necessarie...
-Sec. 891. Other Theory Of Infant's Contracts
There is another theory of the nature and effect of an infant's voidable contract, which is inconsistent with the operation of the principles already laid down, and often gives, in particular cases, t...
-Sec. 892. Infant As Bankrupt
Under the United States bankruptcy act it has been held that an infant cannot be made a bankrupt,1 even as a member of a firm,2 on the ground that he might avoid his contracts at majority. The English...
-Sec. 893. Infant's Torts Arising Out Of Contract
While an infant is as a general rule liable for his torts, yet if the tort is so connected with contract that without the contract no cause of action in tort could exist, the infant cannot be held in ...
-Sec. 894. Nature Of Insanity In Contract Law
In order to affect the power of a person to bind himself by contract, it is now held that there must be such a degree of mental weakness at the time of making the contract as will materially affect hi...
-Sec. 895. Validity Of Contracts Of An Insane Person.- Before Adjudication
At early law it was laid down that a party should not disable himself1 by alleging his insanity. By this view of the law, his contracts generally were absolutely valid, unless a guardian were appoin...
-Sec. 896. Void Contracts
Of the contracts entered into before adjudication some are still said to be void. A power of attorney is the best example of a void act of a lunatic.1 While in some of these cases it does not appear w...
-Sec. 897. Valid Contracts
The valid contracts of an insane person are those whereby he agrees to do whatever the law would compel him to do. Thus the release of a ground rent inherited from an ancestor, upon the happening of t...
-Sec. 898. Voidable Contracts
The remaining contracts of an insane person are voidable in the sense that by taking proper steps the insane person or his representatives may disaffirm them. This includes ordinary executory contract...
-Sec. 899. Disaffirmance
The insane person,1 or his guardian,2 or his heirs,3 or the personal representative of a lunatic may avoid his contracts.4 But the adversary party cannot avoid them ;5 nor can a third person. Thus, wh...
-Sec. 900. Ratification
Since the contract of an insane person is voidable, it may be ratified. This may be effected by an express promise to perform the contract. Thus a conveyance may be ratified by reac-knowledging the de...
-Sec. 901. Restoration Of Consideration
The widest divergence between the voidable contracts of an infant and those of an insane person consists in the duty to restore the consideration on disaffirmance. If the contract is a fair and reason...
-Restoration Of Consideration. Continued
Md. 581; 35 Am. St. Rep. 443; 19 L. R. A. 489; 25 Atl. 667; Flach v. Gottschalk Co., 88 Md. 368; 71 Am. St. Rep. 418; 42 L. R. A. 745; 41 Atl. 908; Gibson v. Soper, 6 Gray (Mass.) 279; 66 Am. Dec. 414...
-Sec. 902. Contracts Made After Adjudication
In many, if not all, jurisdictions, the statutes provide for a proceeding to determine directly the question of the sanity or insanity of the person against whom such proceeding is instituted, and for...
-Sec. 903. Nature Of Drunkenness In Contract Law
Drunkenness in contract law is treated in almost the same way as insanity. Before adjudication as an habitual drunkard, a person cannot escape his liability on a contract on the mere ground that he wa...
-Sec. 904. Legal Effect Of Intoxication
At early Common Law it was held, or at least asserted, that a contract entered into by one who was then intoxicated was absolutely binding.1 A reaction from this early strictness resulted in holding s...
-Sec. 905. Intoxication As Affected By Unfair Conduct Of Adversary
A less degree of intoxication than that described may serve as a basis for avoiding contracts if the drunkenness was caused by the adversary party,1 or if without causing the intoxication he took an u...
-Sec. 906. Contracts For Necessaries
A drunkard even after adjudication is liable for the reasonable value of necessaries furnished to himself or his family.1 he not be responsible to an innocent party for the acts which he performs when...
-Sec. 907. Ratification And Disaffirmance
Since the contract is voidable it may be ratified by the drunken person on becoming sober.1 Ratification may be affected either by express agreement or by conduct which necessarily shows an intention ...
-Sec. 908. Restoration Of Consideration
In the absence of fraud, the drunken person must restore as a condition precedent to disaffirmance whatever he has received tinder the contract.1 This rule, however, must undoubtedly be qualified by p...
-Sec. 909. Effect Of Adjudication As Habitual Drunkard
Many jurisdictions provide for a proceeding resembling an inquisition in lunacy, by which one who is given over to constant indulgence in alcoholic stimulants whereby intoxication is produced, may be ...
-Sec. 910. Effect Of Drugs
The same principles apply to the mental effects of morphine,1 or of ana?sthetics,2 as to the use of alcohol though such effect is not technically drunkenness. Thus a release given by one who was so un...
-Sec. 911. Contracts Of Married Women At Common Law
At Common Law, subject to certain exceptions, it was well settled that an executory contract entered into by a married woman was void, and even now no contract is enforceable against her at law unless...
-Sec. 912. Exceptions To Common Law Rule
By certain local customs, as in the city of London, a married woman might contract as a sole trader if her business was in fact free from her husband's control.1 These customs were not generally adopt...
-Sec. 913. Contracts Of Married Women In Equity
By a species of judicial legislation, the Courts of Equity had by the end of the seventeenth century,1 established the doctrine that with reference to property held to the separate use of a married wo...
-Sec. 914. Extent Of Power Over Separate Estate
The questions that generally arose in determining the liability of a married woman's separate estate, may be grouped under two general classes: first, to what extent a married woman had the power to b...
-Sec. 915. Presumptive Intent To Charge Separate Estate
Upon the question of what contracts within the scope of a married woman's power do in fact bind her separate estate there is even less harmony of judicial decision. Undoubtedly the general rule is tha...
-Sec. 916. Contracts Of Married Women Under Modern Statutes
The rules of equity and Common Law upon the subject of a married woman's contracts are modified by statute in almost every jurisdiction. Within the scope of the powers conferred upon her by statute he...
-Sec. 917. Power To Contract For Benefit Of Separate Estate
(1) Some statutes create a separate estate and give a married woman power to make contracts for the benefit of such estate.1 Under such statute a married woman is liable on her contracts which fairly ...
-Sec. 918. Power To Contract As Feme Sole With Reference To Separate Estate
(2) Other statutes, not only create separate statutory estates, but give a married woman power to contract with reference thereto as if she were single.1 Under most of these statutes a 7 Investment C...
-Sec. 919. Statutes Conferring Limited Capacity
(3) The remaining statutes which confer partial capacity may be grouped under this head. By the express provisions of some a woman who is deserted by her husband may contract as if she were unmarried,...
-Sec. 920. Husband Required To Join In Contract
Some statutes require the husband to join in his wife's contract. Under such statutes a separate pledge of property by the wife is invalid ;1 as is a note signed by the wife, payable to the husband an...
-Sec. 921. Consent Of Husband Necessary
Some statutes require the consent of the husband, and in some cases his written consent, to the wife's contracts.1 Under such statutes a married woman is not bound by an oral contract for the care of ...
-Sec. 922. Contract Required To Be In Writing
Some statutes require a married woman's contracts to be in writing except in certain cases; as in Alabama, where she is a sole trader under the statute.1 Under such statutes an agent cannot be appoint...
-Sec. 923. Power As Sole Trader
Under other statutes a married woman is empowered to act as a sole trader, and as such to bind herself by contract.1 Such statutes are constitutional.2 Under such a statute a married woman may carry o...
-Sec. 924. Capacity Under Contract With Husband
Under some statutes a married woman is given power to contract by contract with her husband for the application to her property of the provisions of the separate property acts. In the absence of such ...
-Sec. 925. Power To Contract As Feme Sole Generally
(4) Other statutes confer upon a married woman the power of contracting as if she were unmarried,1 subject in some cases to limitations which will be hereafter discussed. Under some statutes her power...
-Sec. 926. Contracts Of Suretyship
At Common Law a contract of suretyship by a married woman was void, like her other contracts. Where she has a separate estate, either at equity or by statute her contracts of suretyship are valid exce...
-Contracts Of Suretyship. Continued
(Ky.), 51 S. W. 799. By this rule is possibly modified by the Act of 1894, under which she can only secure the debt of another by setting aside specific property for such debt, not incurring any perso...
-Sec. 927. Mortgage Or Conveyance Of Wife's Property To Secure Debt Of Husband
A married woman has power to mortgage her propery to secure her husband's debt if she is authorized by statute to contract as a feme sole; or if she has power by statute or in equity to deal with her ...
-Sec. 928. Contracts Between Husband And Wife
At Common Law a valid contract between husband and wife was impossible; since the wife had no power to contract generally, and further the Common Law theory of the legal unity of husband and wife made...
-Contracts Between Husband And Wife. Continued
15 Dempster Mill Mfg. Co. v. Bun-dy, 64 Kan. 444; 67 Pac. 816; 56 L. R. A. 739. 16 Lee v. Guano Co., 99 Ga. 572; 59 Am. St. Rep. 243; 27 S. E. 159. 17 Michigan, etc., Co. v. Chapin, 106 Mich. 384; 5...
-Sec. 929. Partnership Between Husband And Wife
There is a lack of harmony on the question of whether husband and wife can act as partners with each other, due in part to differences in statutory provisions and in part to differences in determining...
-Sec. 930. Agent Of Married Woman
Unless restrained by statute a married woman may appoint an agent, or an attorney in fact,1 to make any contract or conveyance which she could make herself. If the contract is one which she cannot mak...
-Sec. 931. Ratification
As a married woman's contract is void and not voidable it is incapable of ratification by any agreement or conduct after the woman acquires the power to make contracts,1 whether such power is acquired...
-Sec. 932. Restitution
If a married woman invokes coverture as a defense to an executory contract,1 or a means of recovering what she has parted with under an executed contract,2 she is liable for whatever she has received ...
-Sec. 933. Estoppel
Within the limits of her statutory capacity she may be bound by estoppel like a person of full capacity.1 Thus a deed by a married woman of lands devised to her estops her from setting up an after-acq...
-Sec. 934. Right To Avoid Executed Contracts
In some jurisdictions a married woman may acquire property, and yet may not bind herself by an executory contract. In 1 Estoppel by deed, Jones v. Hill, 70 Ark. 34; 66 S. W. 194; Sandwich, etc., Co. ...
-Sec. 935. Coverture Must Be Pleaded
To be available as a defense coverture must be pleaded.1 If such defense is not made, a judgment against on a void contract is valid.2 If under the law a married woman is liable except in certain case...
-Sec. 936. Who Can Use Coverture As A Defense
Only the married woman can take advantage of coverture as a defense.1 Thus under a statute forbidding a married woman to act as surety only she or her privies in blood representation or estate can int...
-Sec. 937. Nature And Formation Of Partnership
A partnership is a business relation between two or more persons arising out of a contract1 by which they agree to unite their property, credit, services, skill or influence in some business, so that ...
-Sec. 938. Name Of Partnership
A partnership may, in the absence of statutory provision, transact business under an arbitrary or fictitious name.1 Some statutes forbid a partnership to use a name which will deceive the general publ...
-Sec. 939. Joint Ownership
The real test of the existence of a partnership is a community of interest in the partnership business. Joint ownership1 or a 15 Fox v. Grocery Co. (Ky.), 60 S. W. 414. 16 Davidson v. Knox, 67 Cal. ...
-Sec. 940. Sharing Profits
Sharing profits and losses is so usual an attribute of a partnership that it is implied from the relationship, and there need not be an express agreement to share losses.1 An agreement to share losses...
-Sec. 941. Examples Of Partnership
A partnership is formed by a combination of two land-owners to sell the timber off their lands,1 or to sell land,2 or where one is to furnish money to manufacture an article patented by the other,3 or...
-Sec. 942. Limited Partnerships
Statutes of many states provide for limited partnerships, in which one partner is the general partner, personally liable for all the firm's debts, while the others are special partners, liable only fo...
-Sec. 943. Joint Stock Companies
A partnership may by agreement issue stock and thus resemble a corporation in outward form without losing any of the essential attributes of a partnership.1 ...
-Sec. 944. Scope Of Partnership
The scope of a partnership is primarily a question of the intention of the partners. There is no restriction on the exercise of such powers as it chooses at any time to exercise, except such prohibiti...
-Sec. 945. Liability Of Partners On Contract Within Scope Of Business
Liability to third persons on partnership contracts arises from the actual existence of the partnership in question, by express acquiescence, by ratification and by estoppel. If a partnership exists i...
-Sec. 946. Non-Trading Firms
A partner in a non-trading firm has very limited power to bind the partnership. A partner in a non-trading firm may contract for supplies,1 but he cannot otherwise contract firm debts,2 and he cannot ...
-Sec. 947. Trading Firms
A member of a trading firm may bind his firm by borrowing money on their behalf,1 especially if the partnership has acquiesced in similar loans on former occasions,2 and giving their note,3 or making ...
-Sec. 948. Express Acquiescence
A contract to which all the members of a partnership give their consent is binding upon them,1 even if outside the ordinary business of the partnership.2 Thus all the partners may agree to an assignme...
-Sec. 949. Liability Of Partners On Contract Without Scope Of Business
If a contract is made by one partner in excess of his authority and no circumstances of estoppel exist, the remaining partners are not liable upon such contract.1 If the firm consists of two partners,...
-Sec. 950. Estoppel
Although no partnership in fact exists, or although its powers have been exceeded, third persons who have been misled as to the existence or powers of the partnership and have acted in reliance on suc...
-Sec. 951. Wrongful Act Or Omission Necessary To Create Estoppel
Estoppel can exist only where there is some wrongful act or omission of the person against whom estoppel is sought to be enforced. Where the person held out as a partner does not know that he is thus ...
-Sec. 952. Reliance Necessary To Create Estoppel
In order to estop one from denying his liability as a partner, the person in whose favor the estoppel is alleged must have acted in reliance upon the facts which are claimed to create the estoppel.1 F...
-Sec. 953. Ratification
A partnership may become liable on the unauthorized contracts of its members, by ratification thereof.1 Acquiescence by all the partners in a contract, whether before or after the contract is executed...
-Sec. 954. Dissolution
A partnership when once formed may be dissolved by the agreement of the partners,1 or by the act of either, even if before the time for which the contract was to last.2 Some courts have expressed the ...
-Sec. 955. Assumption Of Debts On Change Of Firm
If a retiring partner sells his interest to his co-partners, it is an implied term of the contract that the purchasing partners assume the liabilities of the firm, and will protect the retiring partne...
-Sec. 956. Powers After Dissolution
After dissolution either partner may settle outstanding accounts,1 and may complete the performance of contracts previously entered into,2 but he cannot bind his partners on new contracts,3 and he can...
-Sec. 957. Notice Necessary On Dissolution
On dissolution personal notice should be given to those who have dealt with the firm before dissolution and know of the connection of the partner in question with such firm, if the retiring partner wi...
-Sec. 958. Powers Of Surviving Partners
On the death of a partner, the surviving partner has, under the statutes of many states, the legal title to the partnership property, with power to liquidate the firm's business.1 He cannot bind the f...
-Sec. 959. Peculiarities Of Enforcement Of Contract Between Partners
At Common Law one partner could not sue another on matters arising out of the partnership before an accounting was had between the partners,1 and while the partnership was still in existence.2 So an a...
-Sec. 960. Nature Of Agency
An agent is one appointed to transact business and to make contracts with third persons in place of and on behalf of the person appointing him, known as the principal.1 If the facts exist which in law...
-Sec. 961. Appointment Of Agent
As between principal and agent, an agent can be appointed only by a contract, which may be express,1 though informal, as by a statement by the principal that whatever the agent did went2; or implied...
-Sec. 962. Termination Of Agent's Authority
The authority of an agent to bind his principal may cease by expiration of time,1 or the accomplishment of the purpose for which he was appointed,2 or by express3 or implied revocation arising out of ...
-Sec. 963. Scope Of Agent's Authority
The extent of the agent's authority as between him and his principal is primarily a question of fact.1 The construction of the language creating the authority or the inferences admissible from the fac...
-Scope Of Agent's Authority. Continued
13 First National Bank v. Kirkby, 43 Fla. 376; 32 So. 881. 14 Kirby v. Scraper Co., 9 S. D. 623; 70 N. W. 1052. 15 Mcintosh-Huntington Co. v. Rice, 13 Colo. App. 393; 58 Pac. 358; Finance Co. v. Coa...
-Sec. 964. Liability Of Principal. - Agent Acting Within Authority
If the contract of the agent is in fact within his authority, the principal is liable thereon, without reference to any facts creating estoppel, or to the knowledge possessed by the adversary party of...
-Sec. 965. Liability Of Principal. - Estoppel
Outside of the class of public agents the actual authority conferred by a principal upon his agent is practically inaccessible to the public at large. Accordingly persons who do not know what the agen...
-Sec. 966. Acts Of Unauthorized Agent Not Estoppel
The acts which create estoppel must be those of the principal to be estopped or of some one authorized by him. The acts and declarations of the alleged agent cannot estop the principal from denying th...
-Sec. 967. Liability Of Principal. - Agent Acting Outside Of Authority
The principal is not liable for a contract made by his agent outside both his real and his apparent authority.1 The liability of the principal where the agent has exceeded his authority depends on pri...
-Sec. 968. Ratification.- Nature And Effect
In addition to liability created originally by the contract of the agent, a principal may be liable by reason of his ratification of an unauthorized contract made by one who assumes to act as his agen...
-Sec. 969. Methods Of Ratification
Ratification may be made expressly,1 even if the adversary parties have repudiated the contract,2 as by insisting on new conditions which are accepted,3 or it may be implied from the conduct of the pr...
-Sec. 970. Necessity Of Full Knowledge Of Facts
In order to bind the principal finally a ratification must be made with full knowledge of the material facts. If made without such knowledge the principal may avoid both the ratification and the origi...
-Sec. 971. Partial Ratification Impossible
The principal must affirm or disaffirm the contract as an entirety. He cannot affirm the part beneficial to himself and disaffirm the rest.1 Thus if he receives and retains property thereunder this am...
-Sec. 972. Necessity Of Acting As Agent
The doctrine of ratification in agency applies only to the contracts of one who is an agent or who claims to act as agent. A contract made by one who is not an agent and does not. claim to act as agen...
-Sec. 973. Effect Of Ratification. - Adversary Party
Whether the principal's ratification of an unauthorized act of one acting or claiming to act as his agent can make the contract enforceable as against the adversary party, is a question upon which the...
-Sec. 974. Effect Of Ratification. - Third Persons
Ratification cannot destroy intervening rights of third persons.1 Thus ratification cannot avoid an intervening chattel mortgage2 or attachment.3 So, an unauthorized assignment was made; the alleged a...
-Sec. 975. Liability Of Agent
An agent acting within the scope of his authority is not liable to third persons upon a contract made by him as agent for a principal whom he discloses, which does not by its terms purport to bind the...
-Sec. 976. Rights Of Principal On Contract
A principal may, as a rule,1 enforce by action in his own name contracts entered into for him by his agent,2 even if the identity of the principal,3 or the fact of the agency4 were not disclosed 19 T...
-Sec. 977. General Principles Of Agency Applicable To Private Corporations
The principles which control the power of an agent or officer of a corporation to bind the corporation, are in general those which are applicable to other forms of agency. The chief peculiarities of t...
-Sec. 978. Stockholders
The stockholders of a corporation represent the corporation at a regular stockholders' meeting, or, as modern authorities put it, constitute the corporation.1 Ordinarily, whatever all the stockholders...
-Sec. 979. Directors
The board of directors, acting at lawful meetings, is the chief agency for directing and controlling the business of the corporation.1 The acts of such board at a lawful meeting bind the corporation t...
-Sec. 980. President
The original view of the position of the president was that he was merely the presiding officer of the board of directors. As such, he would not have any greater power to bind the corporation by his i...
-Sec. 981. Vice President
The vice president as such has no implied authority to bind the corporation if the president is capable of acting.1 In cases of the absence of the president, or his incapacity to act, the vice preside...
-Sec. 982. Secretary, Treasurer And Cashier
The secretary of a corporation has in the absence of special authority, no general power by virtue of his office, to bind the corporation.1 The treasurer of a corporation has ordinarily authority to r...
-Sec. 983. General Manager
The general manager of a corporation has power to bind the corporation by such contracts as are an appropriate means of carrying on the ordinary business of the corporation.1 Thus the manager of a new...
-Sec. 984. Ratification
A contract made by an agent of a corporation in excess of his authority, may be ratified by some higher agent who has authority to make such a contract.1 Thus the stockholders of a corporation at a la...
-Sec. 985. What Amounts To Ratification
An express approval of a contract, and an adoption of it, is of course a ratification. Acquiescence in the contract with full knowledge of the facts, amounts to ratification if the adversary party is ...
-Sec. 986. Effect Of Ratification
On ratification the contract is as binding upon the corporation as if it had been originally within the scope of the agent's authority.1 However, the corporation cannot, by ratification of an unauthor...
-Sec. 987. Agents Of Public Corporations
Contracts entered into on behalf of the government or a public corporation by some one who claims to act as an officer or agent thereof presents some marked points of contrast to ordinary contracts of...
-Sec. 988. Trustee Cannot Bind Beneficiary Personally
A trustee is one in whom is vested the legal title to property, the equitable interest in which belongs to another.1 A trustee has as such no power to bind a cestui que trust personally.2 Thus a cestu...
-Sec. 989. Power To Bind Trust Estate
A trustee has no power to bind the estate by his contracts, if such power is not given to him by the instrument creating the trust.1 So a trustee cannot bind the estate by a judgment 1 A trustee may...
-Sec. 990. Personal Liability Of Trustee
Unless a trustee clearly provides against it, he is personally liable on contracts made by him as trustee,1 even if he refers son, 7 B. Mon. (Ky.) 693; Hines v. Potts, 56 Miss. 346; New v. Nicoll, 73 ...
-Sec. 991. Liability Of Estate For Benefits Received
While a trustee cannot create debts against the trust, the creditors can subject the rents and profits of the trust estate to their claims as far as their loans were advantageous to such trust estate,...
-Sec. 992. General Want Of Power To Bind Estate
Executors and administrators are officers of the court appointed for the purpose of settling decedent's estates. In the absence of statutory provision or of authority given by will they have, in gener...
-Sec. 993. Statutory Power To Bind Estate
While some courts use language which seems to admit of a considerably greater power of executors to bind the estate than the preceding authorities recognize,1 the cases where the contract of the execu...
-Sec. 994. Power Created By Will To Bind Estate
Second, the will may confer power to bind the estate by contract;1 as to borrow money to carry on business.2 Power to carry on a plantation,3 to keep an estate together,4 to manage a mine,5 or to rais...
-Sec. 995. Personal Liability Of Executors
Executors are liable personally upon contracts which they attempt to make in their official capacity when they cannot bind the estate, unless they specifically contract against a personal liability.1 ...
-Sec. 996. Liability Of Estate For Benefits Received
The rule that an executor cannot bind the estate by his contract is intended for the protection of the estate. It is not intended to operate as a confiscation of anything of value which the estate may...
-Sec. 997. Contracts Of Guardians
Guardians are officers of the court for the purpose of managing the estates of persons who are in law considered incapable of managing their own property. In the absence of statutory authority they ha...
-Sec. 998. Contracts Under Order Of Court
A receiver is an officer of the court, especially appointed, to whom is committed the control and management of property which is in the custody of the law. As he is not the agent of either party he c...
-Sec. 999. Power To Displace Prior Liens.- Receiver Of Private Corporation
Where the receiver is authorized by the court to make contracts and to charge them upon the trust fund, the question is often presented: Can debts incurred by a receiver under order of the court displ...
-Sec. 1000. Receiver Of Quasi-Public Corporation
The receiver of a quasi-public corporation may, if acting under order of a court having jurisdiction, incur debts in order to carry on the business, which debts may be given priority over prior liens....
-Sec. 1001. Contracts Not Under Order Of Court
A receiver is personally liable upon his contracts made in his official capacity unless he makes them under order of the court appointing him; or by virtue of statutory authority; or unless there is i...
-Sec. 1002. Contracts Of Promoters Not Binding On Corporation
There cannot be a valid contract without two parties thereto. Accordingly, a contract made by the promoters of a corporation before the corporation is created cannot bind the corporation.1 So a contra...
-Sec. 1003. Effect Of Acceptance By Corporation
An attempted contract made on behalf of a corporation to be formed subsequently, by a promoter thereof, may be treated as at least equivalent to a continuing offer, and if not revoked by the adversary...
-Sec. 1004. Personal Liability Of Promoters
Promoters are liable personally upon their contracts,1 and this liability is said in some cases to be in the nature of partnership liability.2 The promoters are not relieved of liability on their cont...
-Sec. 1005. Contracts Of Voluntary Associations
A voluntary association consists of a number of natural persons, united together without being incorporated, for some purpose other than carrying on a profession or business, or making profits.1 It us...
-Sec. 1006. Contracts Of The United States
The United States is a government of limited powers, possessing only such as are expressly or impliedly conferred upon it by the Constitution of the United States. It has full power to contract when s...
-Sec. 1007. Contracts Of A State Of The Union
Each of the states of the Union is a government possessing general and unlimited powers, except such as are expressly or impliedly denied to it by the Constitution of the United States. Within the sph...
-Sec. 1008. Nature And Classes Of Public Corporations
A public corporation is a corporation formed by the state for purposes of local government and administration.1 Public corporations are divided into municipal corporations and the organizations of les...
-Sec. 1009. Notice Of Powers Of Public Corporations
All persons dealing with a public corporation are bound to take notice of the statutes creating it and conferring power upon it, and the mandatory statutes which prescribe the manner in which it may e...
-Sec. 1010. Power Of Public Corporations To Make Contracts
Where there is no specific statutory provision it is usually said that a public corporation has an implied power to make contracts necessary to enable it to exercise the powers and perform the duties ...
-Sec. 1011. Effect Of Statute On Power To Contract
The powers of public corporations are now provided for in most states by statute. Where such statutes are drawn with such detail that it is evidently the intention of the legislature to make complete ...
-Sec. 1012. Effect Of Statute On Power To Make Implied Contracts
A public corporation may incur liability on implied contract if it could make an express contract of the same nature, and if the statute does not prescribe the exclusive method of making such contract...
-Sec. 1013. Construction Of Statutory Powers
Power given by statute, either expressly or impliedly, carries with it power to make contracts necessary and proper to carry such power into execution.1 Thus power to provide for supplying water and l...
-Sec. 1014. Examples Of Valid Contracts
Since the power of a public corporation to bind itself by contract depends upon the nature and extent of the powers conferred upon it by statute, no general absolute rules can be laid down as to the c...
-Sec. 1015. Employment Of Attorney
Where there is statutory provision therefor a public corporation may retain a special counsel.1 This has been recognized as an implied power where the interests of the corporation were affected in ano...
-Sec. 1016. Contracts To Be Performed During Long Period
Unless specifically restrained by statute a public corporation may make a contract which by its terms is to last for a long period of time. Contracts for water and lighting are the common examples of ...
-Sec. 1017. Power To Borrow Money
The numerical weight of authority holds that municipal corporations have implied power to borrow money when necessary for the purpose of their creation.1 A minority strong in logic if not in numbers h...
-Sec. 1018. Power To Issue Negotiable Instruments
Closely connected with the foregoing question is that of the implied power of a public corporation to issue negotiable instruments as evidences of a lawful debt. There is a divergence of authority as ...
-Sec. 1019. Statutory Restriction On Power To Borrow
Statutory provisions as to the power of a public corporation to borrow money and the methods by which it may borrow are at present in most states very full and ample.1 As has been indicated in the pre...
-Sec. 1020. Construction Of Statutory Provisions
Power to refund a debt includes power to issue negotiable bonds therefor,1 though in such case the corporation cannot issue bonds in excess of such debt.2 Power to issue bonds is power to issue nego...
-Sec. 1021. Statutory Prohibition Against Incurring Debt
The extravagance of American municipalities has led to various attempts on the part of legislatures to prevent or restrict future indebtedness. Contracts in violation of such statutes are invalid.1 A ...
-Sec. 1022. Necessity Of Appropriation
One group of statutes intended to prevent municipalities from incurring indebtedness, seeks to restrict expenditure to income. Different statutes of this group seek to attain this result in different ...
-Sec. 1023. Necessity Of Levying Tax To Meet Obligation
Other statutes provide that, either in air cases or where the debt has reached a certain amount, no contract is valid unless a means is provided by taxation for paying principal and interest.1 It is g...
-Sec. 1024. Liabilities Forbidden In Excess Of Current Income
Other statutes of this group forbid contracts incurring liability which cannot be paid out of taxes for that fiscal year.1 Under a statute of this class the fact that interest on the debt incurred, an...
-Sec. 1025. Necessity Of Certificate Showing Sufficient Funds
Other statutes avoid contracts unless the proper officer, such as the auditor, certifies that there is a sufficient fund on hand unappropriated to discharge the liability.1 Thus a contract employing a...
-Sec. 1026. Limitation On Amount Of Indebtedness
Statutes of a second group have for their purpose prohibiting debts of a public corporation in excess of a certain limit, which is either a fixed sum or a percentage on the valuation of the taxable pr...
-Sec. 1027. Claims Subject To Limitation
The general view taken of such statutory provisions is that they apply to all forms of indebtedness, no matter how incurred or what is received therefor. Thus such limitation applies to debts incurred...
-Sec. 1028. Claims Not Subject To Limitation
A constitutional or statutory limitation of indebtedness does not apply to contracts which do not create a personal liability against the public corporation. Thus such a limitation does not apply to a...
-Sec. 1029. Claims Payable Out Of Assessments
If the parties who enter into a contract with a public corporation are required, either by statute or by the terms of their contract, to look solely to local assessments for their compensation, they c...
-Sec. 1030. Refunding Bonds
Bonds issued after the limit has been exceeded, for the purin the hands of the city the funds necessary to enable it to pay its obligations.Reilly v. Albany, 112 N. Y. 30, 42; 19 N. E. 508. 6 Vicker...
-Sec. 1031. Method Of Valuing Property
The value of property as fixed by the assessing bodies and not its real value must be used to determine whether the limit is exceeded.1 This has been held to be the last assessed value before the bond...
-Sec. 1032. Method Of Ascertaining Debt
The method of ascertaining indebtedness in such cases is important. The principal and unpaid interest due on all outstanding debts on the day that the amount of the new debt is fixed must be ascertain...
-Sec. 1033. Amounts To Become Due Under Installment Contracts
A contract lasting for a considerable time calling for the performance of services to the corporation and payment therefor in installments as such services are rendered is, by the weight of authority,...
-Sec. 1034. Validity Of Debt Which Causes Excess Over Limit
When bonds are issued for a debt which, when added to the pre-existing valid debts, exceeds the limit, some authorities hold that the bonds are invalid in toto,1 while others hold that they are good f...
-Sec. 1035. Popular Vote On Incurring Debt
Many statutes require a popular vote as a pre-requisite to incurring certain kinds of debts,1 as to exceed the limit of 15 Defiance v. Defiance, 23 Ohio C. C. 96. 16 Danville v. Water Co., 180 111. ...
-Sec. 1036. Form Of Resolution
The question to be voted on is usually submitted by ordinance or resolution. The resolution or ordinance must show the purpose for which the debt is to be incurred.1 Describing the debt to be bonded a...
-Sec. 1037. Formalities Of Election. - Voting On Several Propositions
The formalities necessary to a valid election depend so entirely on the details of local statutes that no general statement of them is practicable. In the absence of statute, more than one proposition...
-Sec. 1038. Notice Of Election
Notice is necessary only if required by statute.1 Notice of the indebtedness to be voted on is often necessary by statute. An election is void if legal notice is not given substantially in the form an...
-Sec. 1039. Number Of Votes Necessary
The number of votes which must be cast for the proposition for indebtedness in order to carry it depends on statute and is usually either a majority or two thirds. Where a general statute provided tha...
-Sec. 1040. Method Of Holding Election
Statutes usually provide with considerable detail the method of holding the election. Registration of voters at such election may be required.1 In such case bona fide holders are not bound to go back ...
-Sec. 1041. Petition Of Voters
Under other statutes there must be a petition signed by a majority of the qualified voters to authorize certain contracts.1 6 Wilkins v. Waynesboro, 116 Ga. 359; 42 S. E. 767. 7 McKnight v. Senoia, ...
-Sec. 1042. Examples Of Ultra Vires Contracts In General
A public corporation has no implied authority to make contracts which are not necessary to carry out the governmental purposes for which it was formed. Thus power to buy land for its use and benefit i...
-Sec. 1043. Contracts For Speculation
A public corporation cannot by contract assume liabilities of private corporations or individuals, even to induce such action on their part as will benefit the individuals who comprise the public body...
-Sec. 1044. Loan Of Credit
Credit cannot be loaned directly or indirectly without express authority.1 Thus a contract for issuing interest-bearing warrants to the contractor on the execution of the contract to enable him to rai...
-Sec. 1045. Form Necessary In Contracts Of Public Corporations
Under many statutes contracts of public corporations must be made in accordance with certain specified formalities. Under some statutes they must be in writing,1 in which case oral contracts are inval...
-Sec. 1046. Advertisement Of Public Contracts
Statutes often require advertisement for bids in public contracts exceeding a certain amount and of certain classes. Contracts of these classes entered into without complying with these formalities ar...
-Sec. 1047. Specifications
Statutes often require plans and specifications of the work to be done to be prepared before contracts are let therefor. The object of this is usually to enable competing contractors to know exactly w...
-Sec. 1048. Letting Public Contract To Lowest Bidder
A public contract need not be let to the lowest bidder unless the statute requires it.1 The statutes often require the contract to be let, after advertising, to the lowest, the lowest and best, ...
-Sec. 1049. Exercise Of Discretion By Public Officers
Where the statute requires the contract to be let to the lowest and best bidder, a discretion is vested in the officials who let the contract to determine who is the best.1 Such statutes are inten...
-Sec. 1050. Requirements Restricting Competition. - Monopolies
Where bids must be let to the lowest responsible bidder the city may, if public interest requires it, specify articles covered by patents so that competition is practically impossible.1 The view of th...
-Sec. 1051. Restricting Competition In Labor
Provisions which restrict free competition of labor violate the spirit of the statute requiring bids to be let to the lowest bidder. A resolution of a municipality to exclude from competition all pers...
-Sec. 1052. Requiring Repair Of Streets
Under authority to construct streets it is generally held that a city cannot require the contractor to agree to keep the streets in repair for a certain period of time.1 Several reasons exist for this...
-Sec. 1053. Effect Of Ultra Vires Contracts. - Executory Contracts
The effect and consequences of an ultra vires contract must next be considered. We must first consider the contract which is invalid only because it is ultra vires - that is, while beyond the power of...
-Sec. 1054. Performance By Public Corporation
If the public corporation has performed the contract on its side, the adversary party cannot retain the benefits and plead ultra vires. The objection that the contract was originally ultra vires has b...
-Sec. 1055. Performance By Adversary Party. - Liability On Contract
Performance by the adversary party usually gives something of value to the corporation as the result of such performance, but it leaves the ultra vires part of the contract executory. Accordingly even...
-Sec. 1056. Performance By Adversary Party. - Liability In Quasi-Contract
If performance by the adversary party gives something of value to the public corporation, suitable for the purposes for which it was formed, it is, according to the weight of authority, bound to pay a...
-Sec. 1057. Performance By Both Parties
If an ultra vires contract is performed completely by both parties, no objection can thereafter be raised on the ground of its original invalidity. So a statute authorizing a county to recover money p...
-Sec. 1058. Effect Of Divisible Or Indivisible Contract
If the contract is divisible in its nature and part only is ultra vires, the valid part of the contract is enforceable.1 Thus a contract with a water company is enforceable as to payment for water and...
-Sec. 1059. Contracts In Violation Of Statutory Provisions
If a contract is entered into by a public corporation in violation of some specific statute, the effect of such contract depends on the intent of the legislature in enacting such statute. If the proce...
-Sec. 1060. Illustrations Of Particular Statutes
Different statutes of the same general class differ in their phraseology. Courts differ, further, in their views of the intent of the legislature in enacting such statutes. There is accordingly a hope...
-Sec. 1061. Estoppel
Since all are bound to know the powers of a public corporation and the formalities necessary to valid contracts1 there can ordinarily be no question of estoppel to deny the validity of an ultra vires ...
-Sec. 1062. Estoppel By Recitals
The common form of estoppel in contracts of public corporations is found in cases of negotiable instruments in the hands of bona fide holders, where such instruments contain recitals of fact which, if...
-Sec. 1063. Ratification
If a contract is invalid because it is outside of the power of the public corporation, or not in compliance with a mandatory requirement of the law as to its form, ratification is impossible.1 Thus th...
-Sec. 1064. Curative Legislation
The legislature may ratify and validate any obligation of a public corporation which it had power to authorize in advance.1 Thus debts in excess of the statutory limit may be made valid by subsequent ...
-Sec. 1065. Nature And Definition Of Private Corporation
A private corporation is in fact a number of natural persons acting together for certain purposes under a definite organization and endowed by law with certain attributes different from those of a par...
-Sec. 1066. The Charter Of The Corporation
The charter of the corporation measures the powers which it may exercise lawfully.1 This charter is given by the state and accepted by the corporation. Under the old system of incorporation a corporat...
-Sec. 1067. Scope And Construction Of Corporate Charters
The original rule for determining the powers of a corporation was that the charter must be construed strictly against the corporation,1 and this is still repeated by some courts.2 It is still in force...
-Sec. 1068. Implied Powers
If power is either expressly given or expressly denied to a corporation by its charter, the only question open for discussion is the meaning of the express terms of the charter. But where a corporatio...
-Sec. 1069. Borrowing Money
A corporation has an implied power to borrow money for corporate purposes,1 and to give its notes for its debts,2 to pledge its bonds for its indebtedness,3 and to secure its debts by mortgage.4 Thus ...
-Sec. 1070. Borrowing In Excess Of Limitation Of Indebtedness
If a corporation borrows money in excess of its limitation of indebtedness,the weight of authority is that the corporation is liable therefor,1 at least to the extent of benefits received in the trans...
-Sec. 1071. Accommodation Paper
A corporation has no power to issue accommodation paper.1 Hence a corporation cannot guarantee commercial paper executed by another.2 So a corporate note, signed for the corporation by its president, ...
-Sec. 1072. Suretyship
A contract of suretyship in no way beneficial to the corporation is ultra vires.1 The courts are divided as to the power of a corporation to enter into contracts of guaranty as an incidental means of ...
-Sec. 1073. Lending Money
A corporation has usually an implied power to lend money where this is an appropriate means of carrying on its business.1 20 Rhorer v. Middlesboro, etc., Co., 103 Ky. 146; 44 S. W. 448. 21Marbury v....
-Sec. 1074. Power To Acquire Real Property
A corporation may acquire and hold realty which is proper for the exercise of its corporate powers.1 It cannot acquire land for purposes not connected with the purposes of its creation.2 Thus a compan...
-Sec. 1075. Power To Acquire Personal Property
The power of a corporation to acquire personal property suitable for its business,1 such as supplies of material for manufacturing,2 or means of transportation for its materials and product,3 is so mu...
-Sec. 1076. Power To Purchase Its Own Stock
Whether a corporation can buy its own stock is another disputed point. The greater number of cases hold that it may except when it is insolvent and such purchases would defraud creditors.1 In some of ...
-Sec. 1077. Power To Purchase Stock In Other Corporation
It is usually held that a corporation has no implied power to buy and hold stock in another corporation ;1 as where the incorporation laws gave no authority to a manufacturing corporation to purchase ...
-Sec. 1078. Partnership Contracts
A corporation cannot enter into a partnership, since this places in the hands of others than the corporation's agents power to incur obligation due from the corporation,1 though it may be co-owner wit...
-Sec. 1079. Power To Dispose Of Corporate Property
The power of a corporation to dispose of its property may be considered under three general heads. First, its power to dispose of such property as does not interfere with the continuance of its corpor...
-Sec. 1080. Examples Of Powers Of Particular Corporations
A corporation formed to encourage immigration may advertise;1 a railroad may establish a relief fund for its employees, to insure them against accidents and relieve itself from liability therefor;2 ...
-Sec. 1081. Contracts Collateral To Corporate Business
A corporation may make valid contracts in a business, collateral to that for which it was incorporated, if such business is a reasonably proper method for carrying on the principal business. A corpora...
-Sec. 1082. The Origin Of The Doctrine Of Ultra Vires
When it is once ascertained that a given contract is in excess of corporate power, only the first step has been taken to determine its legal effect. As with contracts of infants and insane persons, ri...
-Sec. 1083. Preliminary Considerations
All persons dealing with a corporation must take notice of its charter,1 and of statutory limitations on its corporate of the contract,8 and it is no defense to an action on the contract that it was u...
-Sec. 1084. What Ultra Vires Includes
Ultra vires contracts are, strictly speaking, only those which are defective solely because they are beyond the power of the corporation.1 Where the legislature has forbidden a corporation to engage i...
-Sec. 1085. The Reasons Underlying The Doctrine Of Ultra Vires
The doctrine of ultra vires by which a contract made by a corporation beyond the scope of its corporate powers is unlawful and void, and will not support an action, rests as this court has often reco...
-Sec. 1086. Who Can Take Advantage Of Ultra Vires
To have the question of the validity of ultra vires contracts raised at all, there must be some one in a position to raise such question. The first point in any proceeding to determine the validity of...
-Sec. 1087. Executory Contracts
If a contract is executory on both sides, it is subject to the defense of ultra vires by the corporation.1 If the doctrine of ultra vires has any force at all, it applies to cases like this where the ...
-Sec. 1088. Contracts Performed By One Party.- Performance By The Corporation
If a contract is fully performed by the corporation, so that whatever was to be done in excess of corporate power has been done, the corporation can recover on the contract and the adversary party can...
-Sec. 1089. Performance By Adversary Party.- Liability On Contract
If the adversary party to the contract has performed his part thereof and by such performance the corporation has received something of value, some liability exists,1 though the courts are divided as ...
-Sec. 1090. Liability Independent Of Contract
Other jurisdictions, led by the Supreme Court of the United States, hold that no liability exists on the contract, since it is a contract exectuory as to the unauthorized act; but that an action in qu...
-Sec. 1091. Partial Performance By One Party
If one party to an ultra vires contract has performed it in part, the executory part of such contract may nevertheless be avoided.1 An ultra vires lease made by one railroad to another, on which rent ...
-Sec. 1092. Performance Not Conferring Benefit On Corporation
Where performance does not pass anything of value to the corporation, performance by the adversary party does not impose any liability on the corporation. This is the case where the corporation has is...
-Sec. 1093. Contracts Fully Performed
If a contract has been fully performed on both sides, neither party can take advantage of the fact that it was ultra vires.1 The right of attacking transaction ultra vires, but fully executed, belongs...
-Sec. 1094. Estoppel
The fact that an ultra vires contract, which is so often said to be void, does in many jurisdictions give rise to liability on the contract, has caused many authorities to explain this apparent anomal...
-Sec. 1095. Ratification
In the strict sense of the term, a contract which is ultra vires is not susceptible of ratification.1 If it is in excess of the power of the corporation, there is, obviously, no power capable of ratif...
-Sec. 1096. Laches
Where the ultra vires contract is one which a dissenting stockholder or the corporation might at the outset have avoided, delay in proceeding to avoid it will bar whatever right originally existed.1 T...
-Sec. 1097. "Modern Doctrine" Of Ultra Vires
The proposition has been advanced in a number of recent cases, that only the state can take advantage of the fact that a contract is ultra vires, by a direct attack in quo warranto to oust the corpora...
-Sec. 1098. De Facto Private Corporations
A de facto corporation is one whose members are in fact exercising and enjoying the franchise of being a corporation, but whose members may be ousted of their right to exercise corporate power, in an ...
-Sec. 1099. Estoppel To Deny Corporate Existence
Persons who deal with a corporation, or with an organization purporting to be a corporation, as if it were a corporation, are estopped to deny that it is a corporation,1 such as stockholders,2 or a ju...
-Sec. 1100. Contracts Of De Facto Corporation.- Corporate Liability
A de facto corporation is as liable on its contracts as a corporation de jure. It cannot deny its own corporate existence in order to evade liability.1 Its mortgage of its property is valid.2 On the o...
-Sec. 1101. Partnership Liability
There is a lack of harmony in the judicial utterances upon this question, however. In many cases a defective corporation, which has contracted as a corporation, has been treated as a partnership when ...
-Sec. 1102. De Facto Public Corporations
Contracts of a de facto public corporation are as valid as those of a corporation de jure,1 though the corporation is dissolved by a decree of court as including more territory than it should.2 So whe...
-Sec. 1103. Nature Of Construction
If a question of construction becomes material, this necessarily implies that the contract is in every respect valid and enforceable, at least under one of the constructions contended for. Questions a...
-Sec. 1104. Intention Deduced Primarily From Words Employed
The primary object of construction in contract law is to discover the intention of the parties.1 This intention in express contracts is, in the first instance, embodied in the words which the parties ...
-Sec. 1105. Ordinary Meaning Of Word Prima Facie Correct
The ordinary meaning of a word is prima facie that employed,1 and will be used in construction unless the context,2 or admissible evidence shows that another meaning was intended, even if it may not b...
-Sec. 1106. Context And Subject-Matter Control Meaning Of Word
The context and subject-matter may affect the meaning to be given to the words of a contract,1 especially if in connection with the subject-matter the ordinary meaning of the term would give an absurd...
-Sec. 1107. Technical Meaning
Words of technical meaning will be given that meaning,1 unless the context shows that the ordinary meaning was intended.2 Thus horse-power in a contract for the sale of water power has been held to ...
-Sec. 1108. Meaning Of Word Controlled By Usage
Usages,1 such as those of a trade,2 may be resorted to to show the special meanings of words. Thus evidence of local usage as to the meaning of cord in a sale of cedar posts, or of a trade usage as ...
-Sec. 1109. Cipher
If a contract consists in part or all of cipher, extrinsic evidence is admissible to show the meaning of the terms written in cipher contracts by telegraph.1 Thus the meaning of Buy three May, may ...
-Sec. 1110. Abbreviations
If abbreviations are used in a written contract, extrinsic evidence is admissible to show that they have a meaning in the trade or business to which the subject of the contract relates which is genera...
-Sec. 1111. Intention Of Parties Direct As Affecting Meaning Of Term
If the parties have used words which have an ordinary meaning free from ambiguity, and no technical meaning is shown, extrinsic evidence is inadmissible to show that the parties used such terms in a s...
-Sec. 1112. Contract Construed As A Whole
Since the object of construction is to ascertain the intention of the parties, the contract must be considered as an entirety. The problem is not what the separate parts of the contract mean, but what...
-Sec. 1113. General Paramount Intent Controls Special Intent
The contract being construed as a whole, it follows that one part of it may affect the construction of a different part.1 An illustration of this is found where the contract as a whole shows a given i...
-Sec. 1114. Every Part Of Contract Given Effect If Practicable
The parties have inserted each provision in the contract, and accordingly, if possible, a contract should be so construed as to give effect to each provision inserted therein.1 Thus a clause in a buil...
-Sec. 1115. Incorporation Of Writing By Reference
Since a contract must be construed as a whole, effect must be given to writings incorporated in the contract by reference.1 Thus the agent of an insurance company agreed to issue a standard policy. Su...
-Sec. 1116. Different Writings Construed Together
To have two or more writings construed together it is not necessary that one of them should refer to the other in express terms. If two or more writings are executed at the same time, between the same...
-Sec. 1117. Law Part Of Contract
The law in force when a contract is made is a part of such contract as fully as if its provisions had been incorporated into such contract.1 Thus a contract between heirs with reference to property de...
-Sec. 1118. Covenant Implied From Writing Equivalent To Written Promise
Since a contract is to be construed as a whole, terms which can be inferred from a consideration of the entire instrument are as much a part of the contract as if expressly set forth therein.1 Thus a ...
-Sec. 1119. Written And Printed Provisions
If the contract is written in part and printed in part, as where it has been filled in upon a printed form, the parties usually pay much more attention to the written parts than to the printed parts. ...
-Sec. 1120. Contract To Be Upheld By Construction If Possible
As between two constructions, each reasonable, one of which will make the contract enforceable, and the other of which will make it unenforceable, that construction which makes the contract enforceabl...
-Sec. 1121. Contract Construed To Be Fair And Reasonable
As between two constructions, each probable, one of which makes the contract fair and reasonable and the other of which makes it unfair and unreasonable, the former should always be preferred.1 Thus a...
-Sec. 1122. The Rule Contra Proferentem
If terms of a contract appear on their face to be inserted for the benefit of one of the parties, he will be considered as having inserted such terms and as having chosen the language thereof. Any amb...
-Sec. 1123. Surrounding Circumstances
The parties to a contract choose words to express their intention in view of all the surrounding circumstances. It is practically impossible to state these facts in the contract, and is rarely if ever...
-Sec. 1124. Grammatical Accuracy And Punctuation
Grammatical accuracy is preferred and presumed. However, a construction fair, reasonable and consistent, but involving grammatical inaccuracy, will not yield to a construction more accurately grammati...
-Sec. 1126. Practical Construction By Parties
If a contract is ambiguous in meaning, the practical construction put upon it by the parties thereto is of great weight, even though the contract is in writing,1 and, ordinarily, is controlling.2 Thus...
-Sec. 1127. Ambiguous Contract
If a promise is so ambiguous as to be susceptible of more than one interpretation and the promisor knows which of these possible meanings the promisee attaches to the promise, that meaning will be ado...
-Sec. 1128. First Clause Governs
A rule sometimes laid down, though rarely observed, is that in case of conflict between two clauses that first in place is to control.1 This rule has little to recommend, as a contract is entered upon...
-Sec. 1129. Function Of Court And Jury In Construction
The construction of a contract is a question for the court if the terms of the contract and the extrinsic facts which may affect construction are free from dispute.1 This rule applies 3 Lull v. Bank,...
-Sec. 1130. Construction Cannot Extend To Reformation
Under cover of construction a court cannot reform a written contract to make it express the real intention of the parties, which by mistake is not expressed in the words thereof.1 Thus a clause fixing...
-Sec. 1131. Nature Of Liability Of Two Or More Promisors
If two or more persons constitute one party to a contract, the question as to the nature of their rights and liabilities presents itself. If two or more persons are promisors in a contract, their liab...
-Sec. 1132. Intention Controls.- Words Importing Joint Liability
Whether the liability of the promisors is joint, or several, or joint and several, depends upon the intention of the parties as ascertained from the contract by the ordinary rules of construe tion. Pr...
-Sec. 1133. Words Importing Several Liability
Language which shows an intention on the part of each promisor to assume only a part of the entire liability imports a several contract.1 Thus such language as we promise each to pay a certain propo...
-Sec. 1134. Words Importing Joint And Several Liability
If the language used shows an intention to assume a liability, either joint or several in its nature, at the option of the promisee, this imports a joint and several obligation.1 Thus the use of such ...
-Sec. 1135. Liability Of Sole Promisor
While the intention of the parties is paramount in determining the nature of the liability of two or more promisors, it is impossible, no matter how clear the intention of the parties, to impose a joi...
-Sec. 1136. Effect Of Joint Liability.- Parties To Actions
The adjective law is so closely connected with the substantive law that a statement of the effect of these different types of contract is in outward form almost exclusively a matter of procedure, thou...
-Sec. 1137. Death Of Joint Promisor
The death of a joint promisor discharges his estate and leaves the survivors liable for the entire amount of the debt.1 In equity relief against the estate of the deceased promisor could be given if t...
-Sec. 1138. Judgment Against One Joint Promisor
A judgment rendered against one joint promisor in an action in which the remaining joint promisors could have been made parties is a bar to a subsequent action against such other joint promisors.1 So ...
-Sec. 1139. Release Of One Joint Promisor
A technical release under seal, given to one joint promisor, will inure to the benefit of all,1 unless the promisee expressly reserves his right to proceed against the remaining promisors. This rule ...
-Sec. 1140. Effect Of Several Contract
If the promisors are severally liable, the promisee must sue each for his proportion of the indebtedness. He cannot join two or more several promisors in an action upon the contract if they object the...
-Sec. 1141. Effect Of Joint And Several Contract
If the promisors are jointly and severally liable upon their promise, the promisee may at his option sue all within the jurisdiction of the court jointly, or he may sue each of them separately.1 The p...
-Sec. 1142. Rights Of Joint Or Several Promisees
If two or more persons are promisees in a contract their rights arising thereunder may be either joint or several. Whether their rights are joint or several depends upon the nature of their interest a...
-Sec. 1143. Effect Of Joint Interest.- Promisees Must Join In Action
The joint promisees must all, if living, join in the action.1 Even the name of a joint promisee who does not, in fact, wish to sue must be included2 if he is indemnified against liability for costs. S...
-Sec. 1144. Death Of Joint Promisee
At Common Law on the death of a joint promisee his interest passed to the surviving promisees.1 Equity would compel the survivors to account to the personal representative of the deceased co-promisee ...
-Sec. 1145. Release By Joint Promisee
At law a release given by a joint promisee discharged the debt as to all the promisees.1 Thus a release given by one partner binds his co-partners.2 It has been held that a release by one of two or mo...
-Sec. 1146. Effect Of Several Interest
Several promisees must each maintain bis own action; and cannot join in a common action.1 On the death of one of two or more several promisees, bis rights pass to bis legal representatives and not to ...
-Sec. 1147. Form Of Signature Not Creating Personal Liability
The nature of the liability created by signing a written instrument is a question of construction. The general rule undoubtedly is that the entire contract must be taken into consideration and from th...
-Sec. 1148. Signature By One Person With Addition Of Personal Description
If the form of a signature is A, agent, or some equivalent expression, the word as being omitted before agent, the weight of authority is that in the absence of statute A incurs 5 Long v. Colbu...
-Sec. 1149. Signature By Two Or More Persons With Addition Of Personal Description
If two or more persons sign, and the question of the existence of personal liability is presented, there is as much of a conflict as where one only signs, but the states are divided on different lines...
-Sec. 1150. Signature By Names Of Principal And Agent
If the note is signed by the name of the principal, with the name of the agent subscribed below that of the principal, without the use of the word by to show agency, a question is presented on which...
-Sec. 1151. Body Of Instrument Indicating Nature Of Liability
The wording of the clause in which the promise is made must be considered in determining the nature of the liability imposed. A note beginning We, the trustees of Musconetcong Grange, No. 114, known ...
-Sec. 1152. Liability Assumed By Public Officers
An important difference between contracts of public agents and contracts of private agents is in the construction of liability intended to be assumed. We have seen that in contracts of private agents ...
-Sec. 1153. Construction Of Terms Concerning Time Of Performance
The intention of the parties controls in questions of time of performance. Accordingly it is dangerous to attempt to lay down arbitrary rules for ascertaining such intention. A few illustrations of th...
-Sec. 1154. Reasonable Time Intended If Time Not Fixed
If no time for performance is fixed by the contract, the implication is that a reasonable time for performance is intended.1 6 Houston, etc., Ry. v. Keller, 90 Tex. 214; 37 S. W. 1062. 7 Te Poel v. ...
-Sec. 1155. Reasonable Time.- Whether Question Of Law Or Fact
What is a reasonable time for performance is a question of fact to be determined as a fact, in view of the circumstances of the case.1 Accordingly if an action is brought on an agreement to accept a c...
-Sec. 1156. Time Fixed By Extrinsic Act
The time of performance may be fixed with reference to the doing of some specified act.1 This is usually held to be a provision inserted to fix the time of performance, but not to make the doing of su...
-Sec. 1157. Performance Not Due Till End Of Stipulated Time
If a certain time is fixed within which performance may be made, the party owing performance has the entire time thus fixed, within which to perform. Thus under an option to be exercised within a cert...
-Sec. 1158. Premature Tender
If the contract fixes a certain time for performance, the party from whom performance is due has no right to perform before that time. Hence, premature tender is ineffectual.1 It does not discharge a ...
-Sec. 1159. Time Of Essence Of Contract.- Meaning Of Term
The statement that time is of the essence of a contract, means that the provision fixing the time of performance is looked upon as a vital term of the contract, the breach of which may operate as a di...
-Sec. 1160. Time Of Essence At Law
At law the general rule is that time is of the essence of the contract unless a contrary intent appears from the face of the contract.1 A contract for the sale of chattels, especially those of fluctua...
-Sec. 1161. Time Not Of Essence In Equity
In equity, on the other hand, the general rule may be said to be that time is not of the essence of the contract.1 It must affirmatively appear that the parties regarded time or place as an essential...
-Sec. 1162. Express Provision Making Time Of Essence
If there is an express provision making time of the essence of the contract, full effect must be given to it.1 Thus a provision and express condition that in case of failure of the vendee to perform, ...
-Sec. 1163. Nature Of Property Contracted For
The nature of the property concerning which the contract is made may show that time was of the essence of the contract. 5 Tate v. Development Co., 37 Fla. 439; 53 Am. St. Rep. 251; 20 So. 542; Barnar...
-Sec. 1164. Time Of Subsidiary Provision Not Of Essence
Time is not regarded as of the essence of a contract where it concerns a provision a breach of which does not constitute a total failure of consideration.1 Thus where the two upper stories were leased...
-Sec. 1165. Time Of Essence In Subscriptions
Contracts of subscription, whereby the promisor agrees to pay money if a certain work is completed by a specified time, such as a subscription to aid a railway;1 or an agreement to grant a right of wa...
-Sec. 1166. Time Of Essence In Options
The contract has thus far been considered in determining whether time is of the essence or not. When we turn from contracts to options, we find that both at law and equity an option which is in the na...
-Sec. 1167. Nature Of Penalty And Liquidated Damages
A contract for a penalty is an agreement to pay a stipulated sum in case of default, intended to coerce performance, to punish default, or to secure payment of the actual damages.1 A contract for liqu...
-Sec. 1168. Alternative Contracts
An alternative contract is one which gives to one of the parties the choice of doing one of two or more different acts as performance of the contract.1 If one of the alternatives is the payment of mon...
-Sec. 1169. History Of Penalty In Contract Law
At Common Law, a contract to pay a specified sum of money upon the happening of a certain event, was enforced according to its terms. The fact that the sum of money designated was agreed upon to punis...
-Sec. 1170. Legal Effect Of Each Compared. - Penalty
The importance of the distinction between liquidated damages and penalty, consists in the effect which the courts give to the two kinds of stipulation. At Modern Law a contract for a penalty is unenfo...
-Sec. 1171. Liquidated Damages
If a stipulation is one for liquidated damages, the amount contracted for may be recovered.1 Proof of actual damage is unnecessary.2 There must, however, be at least more than nominal damages.3 Furthe...
-Sec. 1172. Effect Of Name Employed
The use of the term penalty, or liquidated damages, is not conclusive.1 On the one hand a provision for liquidated damages may appear from the context of the contract to be really a provision f...
-Sec. 1173. Intention Of Parties Controls
The intention of the parties is said to be paramount and controlling.1 This means, however, not what they have agreed to call it, nor even what they may in good faith think it is; for this involves th...
-Sec. 1174. "Artificial Rules" For Determining Question
To lay down a general test, or set of tests, for determining whether a stipulation is for a penalty or liquidated damages, is even more difficult than the general attempt to lay down an arbitrary rule...
-Sec. 1175. Difficulty Of Proving Actual Damages
One test which has been suggested is whether it is easy or difficult to prove the actual damages. Where this test is recognized it is held that if the actual damages can be proved with reasonable cert...
-Sec. 1176. Relation Of Stipulated Amount To Actual Damage
Another test which has been suggested is, whether the amount stipulated for is greatly in excess of the actual damages or not. Where this test is applied, it is held that if the amount stipulated for ...
-Sec. 1177. One Penalty For Breaches Of Different Covenants
Another test which has met with general favor is the following: If provision is made for breach of several different covenants of a contract, and a gross sum is fixed which is to be paid in case of th...
-Sec. 1178. Breach Of Single Covenant
If the amount fixed is to be paid in case of breach of a single covenant, it is, if fair and reasonable, to be treated prima facie as a covenant for liquidated damages.1 Where payment is conditioned ...
-Sec. 1179. Forfeiture Of Deposits And Part Payments
Agreements are frequently made that one or both parties to a contract shall deposit a certain sum of money which is to be the property of the other if the contract is not performed. Such agreements ar...
-Sec. 1180. Default In Payment Of Money.- Larger Sum Due
If the default which is to make a specified sum due and payable is itself the non-payment of a smaller sum of money, the question whether the contract is for a penalty or for liquidated damages depend...
-Sec. 1181. Increase In Rate Of Interest
A contract that if default is made in paying a debt when due the debt shall bear a higher rate of interest after maturity than it did before, is not a stipulation for a penalty if the higher rate does...
-Sec. 1182. Other Provisions
A provision that default in payment of one installment of interest will make the whole debt due and payable is held in some jurisdictions to be a penalty,1 though by the great weight of authority such...
-Sec. 1183. Application Of General Principles. - Building Contracts
Provisions in a building contract, that the contractor shall pay a certain sum per day if the building is not completed by the time agreed upon, are generally held to be for liquidated damages if reas...
-Sec. 1184. Sale Of Personalty
In a contract for the sale of personal property, a provision for the payment of a reasonable sum in case of breach, has been held to be liquidated damages.1 A provision for paying a reasonable sum per...
-Sec. 1185. Sale Of Good-Will. - Reasonable Restraint Of Trade
Contracts for the sale of good will, which contain a covenant in reasonable restraint of trade, often provide for the amount of damage to be paid in case of the breach of such covenant. Such damages a...
-Sec. 1186. Sale Of Realty
Under a contract for the sale of realty, a provision for the payment of a certain sum in case of breach, is held in some jurisdictions to be a provision for liquidated damages.1 Thus an agreement wher...
-Sec. 1187. Lease Of Realty Or Personalty
An agreement to pay a certain sum of money in case of the violation of a covenant of a lease is held to be a provision for liquidated damages if apportioned to the separate covenants, and not unreason...
-Sec. 1188. Contracts For Royalties
Provisions fixing the amount of royalty to be paid for the use of another's mine, patent, and the like, are usually held not to be penalties. A provision in a mining contract for the payment of a mini...
-Sec. 1189. Accurate Statement Of Rule
If the parties to a contract have reduced it to writing, they must intend such writing to be the repository of their common intention. It merges all prior and contemporaneous negotiations.1 Accordingl...
-Sec. 1190. Place Of Rule In Law
The question of the application of the rule is generally raised by objection to the admission of oral evidence to show the intention of the parties. The parol evidence rule was in its origin applied t...
-Sec. 1191. Written Contract Merges Prior Negotiations
In an action on a written contract, complete in itself, the validity of which is conceded, the parties are not permitted to show that their prior or contemporaneous oral agreements were not all reduce...
-Sec. 1192. Evidence Inadmissible To Contradict Written Contract
Extrinsic evidense is inadmissible to contradict the intention of the parties as expressed in a written contract by showing a prior or contemporaneous oral agreement contrary to the written agreement....
-Evidence Inadmissible To Contradict Written Contract. Continued
18 Stowell v. Ins. Co., 163 N. Y. 29S; 57 N. E. 480. 19 Hopkins v. Ry., 29 Kan. 544. 1 Housekeeper Publishing Co. v. Swift, 97 Fed. 290; 38 C. C. A. 187; Smith v. Bank, 89 Fed. 832; 32 C. C. A. 368;...
-Sec. 1193. Evidence Of Intention Direct Inadmissible
Extrinsic evidence is inadmissible in an action on a written contract, to show the understanding of the meaning and effect of such contract entertained by one or both the parties thereto when the cont...
-Sec. 1194. Evidence Of Intention Direct Inadmissible To Vary Written Contract
Extrinsic evidence of prior or contemporaneous oral agreements between parties is inadmissible to vary the terms of the written contract which they have entered into;1 and this is true of prior writte...
-Sec. 1195. Legal Effect Of Contract Cannot Be Contradicted
The rule that prior or contemporaneous negotiations can not be used to contradict, add to, or otherwise vary, a written contract applies not merely to the letter of the written contract, but also to i...
-Sec. 1196. Limitations Of The Rule
From the statement of the parol evidence rule, it evidently can apply only under a combination of different facts. The rule applies, (1) where there is a complete written contract; (2) in an action be...
-Sec. 1197. Incomplete Contracts
The parol evidence rule has but a limited application to contracts and memoranda which are incomplete on their face. Extrinsic evidence is admissible to show the other terms of such a contract as far ...
-Sec. 1198. What Contracts Are Incomplete
In order that a written contract may be treated as incomplete so as to make extrinsic evidence of other terms admissible, it must show upon its face that it is incomplete.1 A written contract is assum...
-Sec. 1199. Purpose Of Instrument
If the instrument does not show on its face what its purpose was, extrinsic evidence is admissible to show what that purpose was, if such evidence does not contradict the terms of the contract.1 Thus ...
-Sec. 1201. Recital Of Facts.- Receipts
A receipt, if free from contractual terms, is a mere recital of the fact of the payment of money or delivery of property. The parol evidence rule does not apply to such receipts, and they may be contr...
-Sec. 1202. Receipts And Releases Containing Contractual Terms
An instrument which is in part a receipt may also contain contractual terms. In such case, while the part of it which is a receipt may be contradicted by extrinsic evidence, the contractual terms are ...
-Sec. 1203. Consideration Recited As Fact
If the consideration is not recited in the written contract, or if recited appears only as a recital of fact and not as a contractual term, extrinsic evidence is admissible to show what the real consi...
-Sec. 1204. Oral Contract As Inducement
The principle that the consideration may be shown has been extended to cases where an oral contract has been proved as a consideration for the written contract, or as the courts sometimes put it, as a...
-Sec. 1205. Consideration As Contractual Term
If the consideration appears in the written contract as a contractual term thereof, an oral agreement whereby an additional or other consideration is provided for violates the parol evidence rule and ...
-Sec. 1206. Rule Does Not Apply To Strangers To Contract
The parol evidence rule applies only between the parties to the contract and those claiming under them, and is limited to actions upon the contract.1 A stranger to the instrument may 7McFarland v. Mc...
-Sec. 1207. Parol Evidence Rule Does Not Apply Where Existence Or Validity Of Contract Is In Issue
The parol evidence rule presupposes an action based on a valid contract, and between the parties thereto or those claimmoney of the estate in a bank, taking a certificate of deposit, was not allowed t...
-Sec. 1208. Facts Of Execution
The so-called parol evidence rule has no application where the issue is whether or not the contract sued upon was entered into, and the evidence offered was for the purpose of showing that no contract...
-Sec. 1209. Extrinsic Evidence To Annex Condition Precedent
If the party against whom relief is sought on a written contract concedes that the contract was placed in the possession of the adversary party, but claims that it was taken with the understanding tha...
-Sec. 1210. Extrinsic Evidence To Annex Condition Subsequent
If the party against whom relief is sought concedes that the contract has taken effect, but seeks to add a condition thereto by extrinsic evidence, he is seeking to add to a written contract by extrin...
-Sec. 1211. Want Of Consideration, Mistake And Fraud
Even if the written instrument has been delivered, either party has the right to show any facts which prevent the writing from constituting a valid contract. If this were not so, a written contract wo...
-Sec. 1212. Illegality
Illegal contracts are unenforceable not because of any desire On the part of the courts to aid either party thereto, but because public interests require that they be not enforced. If the parties ther...
-Sec. 1213. Non-Compliance With The Statute Of Frauds
If the contract is within the statute of frauds, extrinsic evidence is admissible to show that other terms than those reduced to writing have in fact been agreed upon, and thus to show that the memora...
-Sec. 1214. Breach And Performance
Performance and breach of a contract are questions which necessarily arise after the contract has been entered into. Accordingly, the parol evidence rule does not prevent a party to a contract from sh...
-Sec. 1215. Secondary Evidence
The parol evidence rule does not prevent the introduction of secondary evidence to prove the contents of a lost instrument in writing.1 Oral evidence is admissible to contradict such secondary evidenc...
-Sec. 1216. Identification Of Parties
If the written contract shows that some particular parties were intended, but does not show with sufficient accuracy who such parties are, extrinsic evidence is admissible to identify such parties,1 a...
-Sec. 1217. Identification Of Subject-Matter
If the written contract is ambiguous in indicating the subject-matter of the contract, extrinsic evidence is admissible to identify it.1 Thus extrinsic evidence is admissible to show 9 Haskell v. Tuk...
-Sec. 1218. Identification Cannot Be Made Means Of Contradiction
Under a claim of identifying subject-matter, the parties to a contract cannot show by extrinsic evidence that they intended to contract for other and different property from that described in their co...
-Sec. 1219. Collateral Consistent Contracts
The rule that a written contract merges all prior and contemporaneous oral negotiations, applies only to such oral negotiations as concern the subject-matter embraced in the written contract.1 Accordi...
-Sec. 1220. What Contracts Are Collateral
To enforce the oral contract, even if not inconsistent, it must be collateral to the written contract and not merely a term thereof. The difficulty lies in the application of this rule. Under cover of...
-Sec. 1221. Examples Of Contracts Held Not To Be Collateral
Illustrations of oral contracts offered in evidence as collateral to a written contract, but held unenforceable as being really terms of the written contract are by no means uncommon. 5Angell v. Duke...
-Sec. 1222. Collateral Inconsistent Contracts
If the collateral contract is inconsistent with the written contract, it cannot be enforced even if it is really collateral, and hence otherwise enforceable.1 Thus an oral contract, collateral to a wr...
-Sec. 1223. Method Of Performance
It is sometimes said in very general language that extrinsic evidence is always admissible to show contemporaneous oral agreements as to the method of performing a written contract as long as the evid...
-Sec. 1224. Agreement As To Performance Contradicting Written Contract
An oral contemporaneous contract which changes the time of performance from that fixed by a complete written contract, cannot be enforced.1 Thus an oral contract contemporaneous with the execution of ...
-Sec. 1225. Warranties
A complete written contract cannot be added to by showing a prior or contemporaneous oral warranty.1 Thus, where there was an express warranty that an engine is made of good material, an oral warranty...
-Sec. 1226. Surety
A surety who signs as a joint-maker may show his relation to the instrument in an action thereon between himself and the payee.1 Showing such relationship does not contradict the instrument on which a...
-Sec. 1227. Drawer
The drawer of a bill of exchange is not protected by a contemporaneous oral agreement with the payee, exonerating him from liability if the drawee does not honor the draft.1 But where the original dra...
-Sec. 1228. Indorsement.- Regular Indorsement Held To Be Complete Contract
Whether a contract of indorsement can be varied by contemporaneous parol agreement depends on whether it is looked upon as a complete contract. A regular indorsement, that is, an indorsement by one in...
-Sec. 1229. Regular Indorsement Held To Be Incomplete
In other jurisdictions a regular indorsement is treated as an incomplete contract, or as some courts express it, only evidence that some contract has been entered into. Where such view obtains extrins...
-Sec. 1230. Indorsement Without Recourse
An indorsement without recourse has been held not to be a complete contract.1 Hence, an oral contract relieving the indorser for liability even for forgery is enforceable.2 In other jurisdictions an i...
-Sec. 1231. Irregular Indorsers
An irregular indorsement, that is an indorsement by one not in the chain of title, may be explained by parol in many jurisdictions.1 Thus such indorser may be shown to be a joint-maker,2 or the real d...
-Sec. 1232. Purpose Of Indorsement
As in the case of other assignments of title, the purpose for which the indorsement is given may be shown as long as the legal effect of the indorsement is not contradicted.1 Thus an indorsement in bl...
-Sec. 1233. Contract Signed By Agent.- Evidence To Relieve Agent From Liability
If a written contract with B, executed by A on behalf of X, is signed by A in such form as to bind him personally, the question of the right of the parties to the contract to show that A was the agent...
-Sec. 1234. Addition Of Word "Agent" Held Not To Make Contract Ambiguous
If a contract is signed by A, with the addition to his signature of the word agent or some other word importing agency, but the language of the contract is such as to bind A personally, A is held pe...
-Sec. 1235. Addition Of Word "Agent" Held To Make Contract Ambiguous
In other jurisdictions the addition of agent or some similar word to the signature is held to make it ambiguous whether personal liability is intended or not, and to make extrinsic evidence of the i...
-Sec. 1236. Extrinsic Evidence To Enable Principal To Sue
If the real principal X wishes to sue upon the contract, the parol evidence rule does not prevent him from showing that A was his agent and that X is the real party adversary to B.1 The fact that the ...
-Sec. 1237. Relation Of Reformation To The Parol Evidence Rule
From the preceding discussion of the parol evidence rule,1 it appears that at law, and in most cases in equity, the real agreement between the parties, if differing in terms from the written contract,...
-Sec. 1238. Mutuality Of Mistake In Reformation
Reformation is given either (a) when the mistake is mutual or (b) when there is mistake on the one side and fraud or unfair dealing on the other. By mutual mistake is meant that the parties must have ...
-Sec. 1239. Mistake On One Side - Inequitable Conduct On The Other
Where A is entering into a contract under mistake and the circumstances are such that if B, too, were mistaken, reformation would be given on A's application, a still clearer case for reformation exis...
-Sec. 1240. Mistake In Expression.- Mistake As To Words Used
The typical form of mistake in expression is found where the parties have agreed orally upon the terms of a contract, have then attempted to express these terms in writing and have, through inadverten...
-Sec. 1241. Mistake As To Legal Effect Of Words Used
A form of mistake, which involves different principles from the form already discussed, exists where the parties to a written contract know the very words which they insert in the contract, but do not...
-Sec. 1242. Intentional Omission Of Term From Written Contract
If the parties purposely omitted a part of their oral agreement from their written contract, no mistake exists except possibly in their belief that they can prove the oral contract and enforce it as w...
-Sec. 1243. Controlling Effect Of Paramount Intent
In reformation as in construction,1 the question is sometimes presented as to the effect of a contract containing inconsistent provisions, where the predominant general intent is apparently contradict...
-Sec. 1244. Illustrations Of Mistake In Expression.- Property Conveyed
Among the many forms of mistake in expression of the type referred to the following are given as illustrations: Where the parties have agreed for the sale, lease or mortgage of a specific tract of re...
-Sec. 1245. Mistake As To Grantee
Where by mistake an estate which by agreement should have passed to A alone is conveyed to A and B,1 or one which should have passed to A and B is conveyed to A alone,2 or where property was to be set...
-Sec. 1246. Mistake As To Estate
If by mistake words are omitted or inserted creating a greater1 or less2 estate than that agreed upon, reformation may be given. So where words creating a fee,3 such as and their heirs forever,4 are...
-Sec. 1247. Mistake As To Effect Of Signature
If A, not meaning to bind himself personally, signs the contract in such a way as to bind himself, the question of his right to reformation depends on substantially the same principles as those govern...
-Sec. 1248. Other Examples Of Mistake
A mistake in the date,1 in the rate of interest,2 or in the amount on which interest is to be computed,3 or the mistaken addition4 or omission5 of a clause whereby the grantee assumes a mortgage; the ...
-Sec. 1249. What Instruments May Be Reformed
Reformation will not be given when the instrument as reformed would not be operative.1 So a bond given to settle a balance due on mutual accounts, which had been kept so loosely that it was impractica...
-Sec. 1250. Reformation Of Mistake Which May Be Corrected By Con Struction
Whether a contract may be reformed for mistake in expression when such mistake is apparent from the entire contract and may be corrected by construction,1 is a question upon which the authorities are ...
-Sec. 1251. Who May Have Reformation
Only a party who is prejudiced by the mistake can maintain a suit for reformation.1 Thus a married woman who joins in her husband's deed to release dower, cannot have the deed reformed to correct a co...
-Sec. 1252. Effect Of Rights Of Third Parties On Reformation
If intervening rights of bona fide purchasers for value will be prejudiced by reformation it will not be allowed.1 Rights of third persons acquired with actual2 or constructive3 notice of the mistake,...
-Sec. 1253. Reformation Not Granted For Mistake In The Inducement
Where the parties have through mistake as to some collateral fact, entered into a valid contract, the terms of which are reduced correctly to writing, equity cannot reform such contract so as to expre...
-Sec. 1254. Evidence Necessary For Reformation
The so-called parol evidence rule has no application in actions to reform a written contract,1 and extrinsic evidence is always admissible. The amount of evidence necessary to entitle the party seekin...









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