This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Contract, both in its origin and its analysis, is a form of obligation. The Roman theory of obligation was that it consisted in a legal relation by which the promisor was bound to perform for the benefit of the promisee. It was a legal bond between promisor and promisee, or between debtor and creditor, as they were frequently called by a nomenclature which did not distinguish between promises to pay money and promises to do or forebear other things; and by this bond the obligor was constrained to act or to forebear to act, in accordance with the nature of the obligation on behalf of the promisee.1 This theory of the nature of obligation has been assumed by the common law. Its correctness has, however, been challenged. It has been contended that the real essence of obligation is the power of the promisee to invoke the action of the state to compel the promisor to perform either affirmatively or negatively. Under this theory as applied to contract law, there is a duty before breach, but no obligation; and if the contract is performed in accordance with its terms, obligation never arises. Does breach make a fundamental difference in the nature of the right of the promisee; Undoubtedly under ordinary circumstances the promisee can not invoke the action of the state until breach. Does a statute which allows the promisee to attach the promisor's property before the maturity of the obligation in case the promisor attempts to remove his property so as to place it beyond the reach of his creditors make a fundamental change in the relations between the promisor and the promisee; Is contract fundamentally different in jurisdictions which recognize the doctrine of breach by anticipation from contract in jurisdictions which do not recognize such doctrine!
1 The essence of the developed right in personam consists in the fact that one person (creditor) is entitled to demand performance from another person (debtor) because the latter is bound for such performance to the former by reason of some special cause. An excellent definition of obligation is the juris vinculum quo necessitate adstringimur alicuius sol-vendae rei secundum nostrae civitatis jura. It is the simile of the condition of being tied up, that is conspicuous in this definition, as well as in the word obligatio itself": Czyhlarz, Manual of the Institutes of Roman Law, Sec. 74.
The remedial right which arises on breach is determined by the available remedies which can be had in that jurisdiction. At common law the remedy was an action for money. If the promise was to pay money this right was the same as the original duty except as to time and interest, where interest is allowed as damages. In equity the remedy frequently is to compel the promisor to perform, either affirmatively or negatively. Is the obligation of the contract one thing at common law and another thing in equity! In most cases these questions lead to the same practical result at our law, whichever way they may be answered. In one case they may lead to widely different results. The legislature may change the remedy for a contract after the contract is made and possibly after it is broken. If an adequate remedy is left, does this change impair the obligation of the contract! Under the provision of the Constitution of the United States, which prevents a state from passing a law impairing the obligation of contracts, the question of the nature of the obligation may become a practical legal question instead of remaining an academic problem. While the general theory of obligation should not be warped by the forms that Roman law and English law have assumed, it should not, on the other hand, be hampered by the limitations of barbaric society.
Under the theory of law which is entertained by modern analytical jurists, law is a rule which is enforced by the state in some way. This definition denies the existence of law in a great many primitive nations where rules exist, sometimes in great detail, but where the power of the state is lacking; or possibly in using the term "law" it presupposes the law of civilized society. It also leaves out a great many of the standards set up by the law of every civilized state. These, however, may possibly be explained as being carried over into the positive rules. If the state seeks to enforce an obligation, it must enforce it against the person of the obligor, against his property generally, or against certain specific property. If the right can be enforced against the person of the obligor, or against his property generally, the right may be an obligation if it possesses the other necessary elements. If no personal liability exists and if the right can be enforced only out of specific property, it is often classified as a property right rather than as an obligation. From the nature of the case transactions of this sort are rare; but occasionally so-called contracts are found in which one party agrees to look to some specific property or fund for satisfaction and by which the adversary party does not incur any personal liability either as against his person or as against his property generally.
The obligation is a duty which one of the parties thereto owes to the other. It is not a right which the owner thereof may assert as against the entire world. Bights of the latter type are classed as property rights and not as obligations. At the same time the obligee may, in many jurisdictions, have a property right in the obligation as against the world at large; and he may have a right of action against any one who unlawfully prevents the adversary party from performing such obligation.
A duty which if it existed alone would amount to an obligation may be a mere incident to a wider duty. Under some systems of classification a duty of this sort is classed with obligations, but it is regarded as accessory to the principal duty so that it is not classed as a contract, unless the principal duty itself is contractual. Other systems of classification take this incidental duty out of the class of obligations entirely, if the principal duty was not itself an obligation. The general tendency of both Roman law and common law probably is to include more and more of these duties under the class of obligations, but to exclude them from the class of contracts if the primary duty is not itself contractual.