It is not only for breach of express promises that a contractor is liable but of implied promises as well ; and the most serious difficulty in this matter is to determine what promises are fairly to be implied in a given contract. The principle to be adopted, however, is plain; the difficulty lies in its application. Since the governing principle in the formation of contracts is the justifiable assumption by one party of a certain intention on the part of the other, the undertaking of each promisor in a contract must include any promises which a reasonable person in the position of the promisee would be justified in understanding were included,26 union the circumstances show that the defendant intends to continue performance, not only may but must recover all damages in his action which he can ever recover. Pakas v. Hollingshead, 184 N. Y. 211, 77 N. E. 40, 3 L. R. A. (N. S.) 1042, 112 Am. St. Rep. 601. In this case the defendants agreed to sell and deliver to the plaintiff 50,000 pairs of bicycle pedals in instalments. Two thousand six hundred and eight pairs were delivered, but the defendant wrongfully failed to make further delivery. After a time, when about 19,000 pairs of pedals should have been delivered, the plaintiff brought action, seeking damages for the failure of the seller to deliver that number. The plaintiff recovered judgment in this action. Subsequently after the time within which the remainder of the pedals should have been delivered, according to the terms of the contract, the plaintiff brought action for the failure of the defendant to deliver them. The Appellate Division of the Supreme Court held that the plaintiff was debarred by his former action from further recovery, and this decision was confirmed by the Court of Appeals. Compare Gall v. Gall, 126 Wis. 300, 105 N. W. 053, 5 L. R. A. (N. S.) 603.

25See supra, Sec.Sec.90, 670, and infra, Sec. 1318. In Brodie v. Cardiff Corp., [1919] A. C. 337, 358, Lord Atkinson said: "The introduction of an implied term into the contract of the parties . . . can only be justified when the implied term is not inconsistent with some express term of the contract and where there arises from the language of the contract itself, and the circumstanoes under which it was entered into, an inference that it is absolutely necessary to introduce the term to effectuate the intention of the parties. Hanalyn v. Wood, [1891] 2 Q. B. 488." In C. M. Cecil Co. v. C. D. Wood Electric Co., 103 N. Y. Misc. 687, 170 N. Y. 8. 962, 963, the court said:

"In expressed consideration of defendant's purchase of a considerable stock of manufactured articles from plaintiff, the plaintiff agreed, not only not to sell or manufacture this article for any one else for a period of one year, but also to furnish further articles of the same kind during that period to defendant at a fixed price. Although the parties manifestly thought it unnecessary that the plaintiff should at the same time expressly agree that it would not voluntarily facilitate the making of the same articles by any other pereon, through a transfer to that person of the means of manufacture possessed by the plaintiff, or that it would maintain its ability to supply the defendant's further possible demands therefor, it is quite evident that that was the intention of the parties. It seems to me, therefore, that 'equity and justice' require that such promise be implied from the agreement. The applications of this well established principle have been so numerous, and have covered so wide a range of implications, as to make it practically impossible to cite all of them. Notable examples, however, will be found in Patterson v. Meyerhofer, 204 N. Y. 96, 97 N. E. 472; Wells v. Alexandre, 130 N. Y. 642, 29 N. . 142, 15 L. R. A. 218; Creamer v. Metropolitan Securities Co., 120 N. Y. App. Div. 422, 105 N. Y. S. 28. See also Stirling v. MahMand, 5 B. & S. 841; Ogdens, Ltd., v. Nelson, [1904] 2 K. B. 410. The rule was also recognized in Jugla Trouttet, 120 N. Y. 21, 23 N. E. 1066, but the court in that case declined to imply a promise on the part of the plaintiff to continue in business for the defendant's benefit because, as it said (120 N. Y. at pages 26 and 27, 23 N. E. at page 1067) among other reasons: 'They [plaintiffs] did not, in express terms, undertake to sell him [defendant] gloves for any specified time.' In the case at bar it will be observed that, in addition to plaintiff's promise not to supply any competitors during a specified time, it expressly agreed to supply the defendant during that period." See also Carper v. United Fuel Gas Co., 78 W. Va. 433, 89 S. E. 12, L. R. A. 1917 A. 171. 26 "The rule of law is that when the obligation of performance by one party to a contract presupposes the doing of another act by the other party prior thereto, there arises an implied obligation of the second party to do the act which the performance of the contract necessarily involves." Weeks v. Rector, etc., of Trinity Church, 56 N. Y. App. Div; 195, 197, 67 N. Y. S. 670. See also Churchward v. The Queen, 6 B. & S. 807; DuPont de Nemours Powder Co. v. Schlottman, 218 Fed. 353, 134 C. C. A. 161; Milske v. Steiner Mantel Co., 103 Md. 235, 249, 63 Atl. 471, 5 L. R. A. (N. S.) 1105, 115 Am. St. Rep. 354; Wheelock v. Zevitas, 229 Mass. 167, 118 N. E. 279; Thomas v. Hartshorne, 45 N. J. Eq. 215, 16 Atl. 916; Wigand v. Bachmann-Bechtel Brewing Co., 222 N. Y. 272, 118 N. E. 618.

Wherever, therefore, a contract cannot be carried out in the way in which it was obviously expected that it should be carried out without one party or the other performing some act not expressly promised by him, a promise to do that act must be implied.26

When a seller promises to sell a horse, and the buyer promises to pay the price on receiving the horse, he does not in terms agree to accept the horse, but he must be understood to make that promise by implication; the buyer's promise is here subject to a condition (receiving the horse) which cannot be fulfilled without his cooperation. So though a contract of employment contains no other express promise on the part of the employer than to pay a stipulated compensation, there is an implied promise to employ which is violated by a refusal to allow the employee to perform his duties as such, though there is no refusal to pay the compensation.27 The damages may or may not be nominal in such a case; but there is in any event a breach of contract. Generally on a fair construction of a contract where the liability of one party to a contract is subject to a condition, express or implied in fact, which cannot happen without his cooperation, he will be held to have given impliedly a promise of such cooperation,28 but this is not always the case. A contract by which P promises that A shall be his exclusive agent in Liverpool may contain no implication that P will continue business in Liverpool.29 Of such questions it has been said: "Precedent can throw but little light on the sound interpretation of such contracts, especially as to implying unexpressed obligations; each has its own individuality, its own background and surrounding circumstances. Words are only symbols, and at times, even in the most formal agreement, but elliptical expressions of the mutual understanding; the underlying mutual intent, sought by both parties to be clothed in the language used, must be ascertained; text, context, and extrinsic circumstances, including prior negotiations and relations, may be considered to enable the court to view that matter from the standpoint of the parties at the time of making the contract."30

27 Rubel Bronse Ac. Co. v. Vos, [1918] 1 K. B. 315, rightly criticising. Turner v. Sawdon, [1901] 2 K. B. 653.

28 See infra, Sec. 1318.

29 Rhodes v. Forwood, 1 App. Cas. 256. See also In re English Marine Ins. Co., 5 Ch. App. 737; Pellet v. Manufacturers' Ins. Co.. 104 Fed. 502, 43 C. C. A. 669; Brougham v. Paul, 138 111. App. 455; Bradlee v. Southern Coast Lumber Co., 193 Mass. 378, 79 N. E. 777; cf. Ogdens, Ltd., v. Nelson, [1905] A. C. 139, [1904] 2 K. B. 410; Macgregor 0. Union life Ins. Co., 121 Fed. 493, 57 C. C. A. 613; Lewis v. Atlas Mut.

L. Ins. Co., 61 Mo. 534; Glover 0. Henderson, 120 Mo. 367, 25 S. W. 175, 41 Am. St. Rep. 695; Horton v. Hall & Clark Mfg. Co., 94 N. Y. App. D. 404.

30 Great Lakes, etc., Co. v. Scranton Coal Co., 239 Fed. 603, 152 C. C. A. 437. In speaking of a contract in which a carrier undertook to carry coal on the Great Lakes on all its steamere going westward from Oswego the court in this case said:-

"There is no express provision that the steamers, or any of them, shall make any trips whatsoever, eastward or westward; there is no express provision that the trips, if and when