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.
It really includes a number of different ideas: (1) The contract may, by its terms, attempt to impose an obligation upon one party only, without imposing any obligation upon the adversary party, or requiring the performance of any act from him. There are two sub-classes of this type, which, however, merge into each other: (a) In one the promise is frankly intended to be gratuitous, (b) In the other, the contract purports to place an obligation upon each party and it requires careful analysis to show that the apparent obligation imposed upon the one is in reality non-existent. (2) The contract may, as far as its terms are concerned, impose an obligation upon each party, but by reason of some extrinsic fact, such as the want of capacity of the party who makes such promise, no enforceable obligation results. A contract is often said to be lacking in mutuality when the promise, which is the consideration for the promise upon which the action is brought, is made by one who lacks capacity to bind himself absolutely, and which is voidable at the election of the party who is attempting to enforce the contract. Illustrations of the so-called lack of mutuality of this type are the contracts of infants,12 insane persons,13 drunkards,14 and the like. (3) The contract may be valid and the parties thereto may possess full capacity, but certain rules of evidence, such as the Statute of Frauds, may make it possible for B to prove the contract against A, while A may not be able to prove the contract as against B. A contract is said to lack mutuality when the written evidence, which is prescribed by statute, is available against one of the parties to the contract, but not against the other. If, by statute, a married woman can not alienate all her land without the assent of her husband, which is manifest by his joining in the alienation in the method prescribed by law in the section on Conveyance of Land, a conveyance must, by statute, be signed by the contracting party or by his agent having written authority; a contract which is signed on behalf of the wife by her husband as her agent without written authority, imposes no liability upon the wife, and, accordingly, she can not enforce it.15 (4) In other cases, a contract is said to lack mutuality when the courts really mean that because of the special facts of the transaction, some equitable remedy, such as specific performance, which is available to one of the parties to the transaction, is not available to the other party. The contract may be such that if A had performed and B had not, A could have specific performance as against B, while if B had performed and A had not, B could not have had specific performance as against A. This is the so-called lack of mutuality of remedy. In the first class of cases, and in some cases under the second class, such as the contract of the married woman,16 the real trouble with the contract is that there is no consideration, though the absence of consideration is sometimes concealed with great care. For this reason, cases of these classes are discussed in this connection. Questions which arise under the Statute of Frauds,17 and cases which involve the unwillingness of some courts of equity to give relief on the application of a party who has performed or who tenders performance when they would not have given specific performance against him if he had refused performance,18 are discussed elsewhere. It is to be regretted, however, that a term which is as loose and inaccurate as mutuality, should be employed so frequently by the courts as a touchstone for testing the validity of contracts brought before them for adjudication. Since "mutuality" has so many different meanings, and since it is necessary, in order to avoid misunderstanding, to explain in what sense the word is used on each particular occasion, it is unfortunate that it has been used to designate a contract which lacks consideration by reason of the fact that the promise which is the alleged consideration, imposes no liability upon the party who made it. Clear thinking and accurate distinction would be promoted by abandoning the use of the term and by indicating the specific defect in each case. Probably it is, in part, the lack of a simple, clear and uniform nomenclature that has led the courts to make use of this and other similarly vague terms.
7 See Sec. 122 et seq.
8Willard v. Tayloe,75 U. S. (8 Wall.) 557, 19 L. ed. 501; Joy v. St. Louis, 138 U. S. 1, 34 L. ed. 843; Watts v. Kellar, 56 Fed. 1, 5 C. C. A. 394; Mar-thinson v. King, 150 Fed. 48, 82 C. C. A. 360; Hoogendorn v. Daniel, 178 Fed. 765, 102 C. C. A. 213; Conley Camera Co. v. Multiscope & Film Co., 216 Fed. 892.
9BaumhofT v. Oklahoma City Electric & Gas & Power Co., 14 Okla. 127, 77 Pac. 40.
10 Swindell v. First Nat. Bank, 121 Ga. 714, 49 S. E. 673; Kaplan v. Whit-worth, 116 La. 337, 40 So. 723; Holt v. Wellons, 163 N. Car. 124, 79 S. E. 450.
A so-called contract of insurance which may be terminated by the insured at any time is said to be "unilateral"; so that the discharge of such contract does not amount to a consideration. Neikirk v. Williams (W. Va.), L. R. A. 1918F, 665, 94 S. E. 947.
11 See Sec. 51.
12 See ch. XLVI.
13 See ch. XLVII.
14 See ch. XLIX.
15 Wood v. Lett, 195 Ala. 601, 71 So. 177.
For questions arising under the Statute of Frauds, see ch. XLI. 16See ch. LII.
The principles which control in determining the validity of a promise as a consideration are substantially the same as those which apply to considerations in general. The promise must be such as to offer a legal right or the forbearance of a legal right to which the promisor would not otherwise have been entitled. On the one hand, it is not necessary that the contract, if in writing, be in one instrument in order to be binding on each party. The agreements may be in two separate written instruments,19 even though executed on different days,20 if in fact a part of the same transaction; or the agreement may be written on the one side and oral on the other.21 Since one consideration can support several promises,22 it is not necessary that each covenant on the one part have a corresponding obligation on the other, apportioned to that particular covenant.23 Accordingly, a contract which imposes obligations on both parties is enforceable, even if one covenant is to take effect only at the election of one party.24 Thus, where, as part of the lease, lessor agreed to give lessee sixty days' notice of an intended sale, and to give him the first opportunity to purchase, such promise is valid though lessee did not agree to buy.25 So if A buys a certain lot of logs from B, with a privilege of taking another amount at a specified price, a consideration for the contract exists.26 So a contract whereby A sold certain stock to B, guaranteed eight per cent. dividends and agreed to repurchase it at the selling price at any time within the year on B's demand, is enforceable, though B is not bound to resell.27 A covenant in a construction contract that the acceptance by the contractor of the last payment should discharge the adversary party from all liability, is binding, although there is no covenant for discharging the contractor under such circumstances.28 The fact that subsequent events discharge one covenant does not necessarily make the entire contract lacking in mutuality.29
17 See ch. XLI.
19 See ch. LXXX1X.
19 Martin v. Murphy, 120 Ind. 464, 28 N. E. 1118; Cohn v. Husson, 119 N. Y. 609, 28 N. E. 573.
20 Ahl's Appeal, 120 Pa. St. 26, 18 Atl. 471.
21Hutt v. Hickey, 67 N. H. 411, 20 Atl. 456.
22 See Sec. 525.
On the other hand, if the promise offers only what the promisor is already entitled to, there is no consideration,30 nor is a promise a consideration which imposes no obligation upon the promisor.31 Since want of mutuality is merely one form of want of consideration, third persons can not prevent the performance of a contract on the ground of want of mutuality.32
23 United States. Mississippi River Logging Co. v. Robson, 69 Fed. 773, 16 C. C. A. 400.
Arkansas. Ashley, Drew & Northern Ry. Co. v. Cunningham, 129 Ark. 346, 196 S. W. 798.
Colorado. Miller v. Weld County, 17 Colo. App. 120, 67 Pac. 347.
Illinois. Prudential Ins. Co. v. Hite, 69 111. App. 416.
Louisiana. Camden Iron Works v. Sewerage and Water Board, 141 La. 453, 75 So. 204.
Minnesota. Staples v. O'Neal, 64 Minn. 27, 65 N. W. 1083.
Ohio. Pittsburg, etc., Ry. v. Cox, 55 O. S. 497, 35 L. R. A. 507, 45 N. E. 641.
Washington. Parks v. Elmore, 59 Wash. 584, 110 Pac. 381.
Apparently contra, Taber Lumber
Co. v. O'Neal, 160 Fed. 596, 87 C. C. A. 498.
24Phelan v. Tomlin, 164 Ala. 383, 51 So. 382.
25 Mareke v. Willard, 169 111. 276, 48 N. E. 290.
» Staples v. O'Neal, 64 Minn. 27, 65 N. W. 1083.
27 Hardin v. Case, 134 Ga. 813, 68 S. E. 648.
28 Camden Iron Works v. Sewerage and Water Board, 141 La. 453, 75 So. 204.
29 Texas Co. v. International & Great Northern Ry. Co., 250 Fed. 742. (Discharge of covenant for credit by insolvency of purchaser.)
30 See Sec. 585 et seq.
31 See Sec. 569.
32 Long v. Dunlap, 87 S. Car. 8, 68 S. E. 801.