The Law Of Contracts Vol1| by William Herbert Page

The Formation Of The Simple Contract [Excluding Parties]

Title	The Law Of Contracts Vol1
Author	William Herbert Page
Publisher	The W. H. Anderson Company
Year	1919
Copyright	1919, The W. H. Anderson Company
Amazon	Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises

Preface To The Second Edition: Great as was the bulk of authority when the first edition of this work appeared, an enormous number of cases have been decided in the fourteen years that have elapsed since that time; and, poor as the...

Preface To The First Edition: The following work began in the author's preparation of notes for use in a course on the Law of Contracts given by him in the College of Law of the Ohio State University. His investigation for that pu...

Chapter I. History Of Contract Law: Sec. 1: Factors determining development of contract. Sec. 2. Characteristics of primitive law. Sec. 3. Characteristics of contract at primitive law. Sec. 4. Evolution of contract at Roman law. Sec...

Sec. 1. Factors Determining Development Of Contract: Whether a legal institution, such as the contract, will be recognized and enforced in any given community and at any given time, and the extent to which it will be recognized and enforced, depend upon...

Sec. 2. Characteristics Of Primitive Law: No arbitrary line can be drawn between primitive law and the more highly developed systems of law. The term primitive law is frequently used to include systems which range from the customs of the lo...

Sec. 3. Characteristics Of Contract At Primitive Law: Since man in the early period of his legal development is able to comprehend the concrete better than the abstract, and since his religion and his law are undifferentiated, the early contracts are lik...

Sec. 4. Evolution Of Contract At Roman Law: The development of the Roman law furnishes an interesting illustration of the principles which applied generally to the development of contracts. The earliest contracts were the formal contracts. Cert...

Sec. 5. English Origin Of American Law Of Contract: The law of contract in the United States, except in the state of Louisiana, is based upon the English law of contract. The origin of contract at early English law can not be understood, however, as a ...

Sec. 6. Methods Of Development Of Law: No sharp line can be drawn between progressive and non-progressive societies. The most non-progressive society has made a considerable progress upward from the brute. In the most progressive societies...

Sec. 7. Anglo-Saxon Courts And Procedure: The English law of contract, like English law in general, was built upon Anglo-Saxon law as a basis; and this, in turn, was influenced profoundly by the organization, procedure, and mode of trial, of ...

Sec. 8. Contract At Anglo-Saxon Law: Anglo-Saxon law was a tribal law, a law of popular custom, rather than a law of jurists developed and interpreted by a technically trained class. All that we have left of the law itself is in the form...

Sec. 9. The Norman Period: The Norman Conquest did not result in any immediate change in Anglo-Saxon law. Feudalism was assuming the form which it finally took on in England. A strong central power was building up in spite of t...

Sec. 10. Angevin Period - The Law Of The Court: The reign of Henry II marks a great change in the development of English law. The king's court, whose law in the reign of Henry I had begun to tower above the popular customary law of the local courts...

Sec. 11. Land Law Supplementing Gaps In Contract Law: Two reasons may be suggested for the fact that the king's court succeeded in doing justice without enforcing executory contracts. In the two centuries that followed the Norman Conquest, land was the b...

Sec. 12. Contract At Law Of Local Courts And At Law-Merchant: In the history of law, including the history of the law of contracts, the law of the king's courts is of great importance to us, since it was the law which prevailed ultimately and out of which togeth...

Sec. 13. Contract At Law Of Ecclesiastical Courts: The ecclesiastical courts were ready to enforce contracts in order to prevent the promisor from committing a sin by breaking his contract, especially where he had pledged his faith.1 While it is often...

Sec. 14. Contract In Early Equity: Equity in the sense of power to do justice wherever, for any reason, justice could not be done in the ordinary course of law, may have existed at Anglo-Saxon law in the right to appeal to the king whe...

Sec. 15. Early Procedure As Affecting Contract Law: At the outset the king's courts had no procedure and no machinery for enforcing executory contracts. In their earliest procedure a specific question was submitted to an assize, which they were require...

Sec. 16. Ultimate Triumph Of Law Of King's Court: In the contest between the king's courts on the one hand and the local and manorial courts on the other, the king's courts had two great advantages. One of them was the fact that the power of the king...

Sec. 17. Jurisdictional Importance Of Writs: While the king's courts from the outset never attempted to proceed upon the broad theory that no one should be sent away from their courts without a remedy, they allowed new writs freely in their form...

Sec. 18. Debt: The action of debt was adopted by the king's courts from Anglo-Saxon law. The Anglo-Saxon oath of defense against debt has already been given. Its existence shows that the action of debt is the oldest...

Sec. 20. Covenant - The Contract Under Seal: We consider elsewhere the gradual extension of the use of the seal as a means of authenticating instruments. With the adoption by the lower strata of free men of a form which had once been characteris...

Sec. 21. The Other Formal Contracts Of The Older Law: The king's courts had found at least three classes of contract which are usually classed as formal contract, which were known to the Anglo-Saxon law or to the law-merchant, and a fourth class which wa...

Sec. 22. Relation Between Debt And Covenant After Covenant Developed As A Separate Action, The Original Common-Law Rule That Actions Could Not Be Concurrent Made Debt And Covenant Mutually Exclusive; And The Rule That The Earlier Action Could Not Be Dispossessed By The New-Comer, Made Debt And Not Covenant The Remedy For A Sealed Covenant To Pay A Definite Sum Of Money: It was not till the seventeenth century that the creditor had his choice between debt and covenant where a fixed and liquidated sum of money was due and owing under a sealed instrument,1 ...

Sec. 23. Limitation On Jurisdiction Of King's Courts Before In Consimili Casu: Since the common law could enforce a contract only by means of a writ, it follows from the foregoing facts that in the twelfth and a greater part of the thirteenth century, the king's courts recognize...

Sec. 24. The Statute In Consimili Casu: During the thirteenth century the king's courts began to arrest the natural development of the common law by refusing to allow new writs to be framed for the purpose of meeting new cases as they arose...

Sec. 25. Development Of Assumpsit: In enlarging their jurisdiction under this statute the common-law courts did not approach contract as a separate subject in its nature distinct from other rights; but they treated breaches of contract...

Development Of Assumpsit. Continued: 4 Y. B. 46, Ed. III, 19 (Trinity Term), pi. 19. 5 Y. B. 22, Liber Assisarum, pl. 41, fol. 94. 6 Y. B. 43, Ed. HI, 33, pl. 38 (Michaelmas Term). 7 Reeves (Finlason), III, 434, 435. 8 Y. B. 2 Hen. IV...

Sec. 26. Assumpsit Ultimately Separated From Trespass On The Case: The next step in the development of assumpsit was to differentiate it from the other forms of trespass on the case. This was a slow process. At one time the courts seemed inclined to take the position...

Sec. 27. Genuine Implied Contract Originally Unenforceable Directly In King's Courts: A new legal idea is usually treated in law as analogous to the earlier ideas with which the law is familiar, and as being as nearly identical with such earlier legal ideas as is possible. The king's c...

Sec. 28. Genuine Implied Contract A Legal But Unenforceable Right: Even at the time at which no action could be brought in the king's courts upon a genuine implied contract it was, nevertheless, recognized as a source of legal rights for purposes other than of bringi...

Sec. 29. Genuine Implied Contracts In Equity: Bights of this sort which appeal strongly to the ethical sense of the court were recognized and protected directly by courts of equity at an early period. While the early reports of the courts of equi...

Sec. 30. Recognition Of Genuine Implied Contracts By King's Courts: In this condition of the English law it was evident that the king's courts would have to choose between enforcing directly the rights arising out of an implied contract which they were already enforci...

Sec. 31. Development Of Quasi-Contract: At a time when assumpsit could not be maintained without proof of an express promise, it is too early to expect to find any remedy in assumpsit for obligations which are created without promise either...

Sec. 32. Contract At Modern Law: The great change in modern law affecting contract, though indirectly, has been the abolition of forms of action. In many jurisdictions forms of action have been completely abolished and the civil acti...

Sec. 33. The Period Of Codification; Up To A Comparatively Short Time Ago The Anglo-American Law Of Contract Had Been Developed By The Common-Law Courts And By The Equity Courts With Little Assistance Or Interference From The Legislature: The assistance which was given to the development of contract law by such legislation as in consimili casu was most valuable; but it was intended to affect procedure and jurisdiction primarily; and it...

Chapter II. Natube And Classes Of Contracts: Sec. 34. Theory of contract at common law. Sec. 35. Classification of contracts at common law. Sec. 36. Origin of general theory of contract. Sec. 37. General nature of obligation. Sec. 38....

Sec. 34. Theory Of Contract At Common Law: From the foregoing historical discussion of the development of the law of contract,1 it can be seen that it is impossible to formulate a statement of the theory of contract which will apply alike to t...

Sec. 35. Classification Of Contracts At Common Law: When we reach the classic period of the common law, as summed up for example by Blackstone, we find an attempt to classify rights according to their nature, but at the same time on a basis of the form...

Sec. 36. Origin Of General Theory Of Contract: No general theory of contract was developed or even attempted during the early period of the common law. The condition of the law was not suitable for generalization and Anglo-American law has always ...

Sec. 37. General Nature Of Obligation: 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 bene...

Sec. 38. Parties To Obligation: An obligation must exist between two definite parties. Both at Roman law and at common law a party to an obligation may consist of one or more persons. The number is immaterial as long as they can be ...

Sec. 39. Definite Character Of Acts Involved In Obligation: In order to amount to an obligation the legal duty must be to perform or to forebear a definite act or a number of definite acts. If one party is legally bound to do everything that the adversary part...

Sec. 40. Money Value Of Obligation: In order to amount to an obligation it is generally said that the duty must be one which is reduceable to a money value. This was the theory of the Roman law; but it seems to have arisen at a time whe...

Sec. 41. Obligation Arising Out Of Agreement As Contract: Obligations are divided into contract, quasi-contract and tort. The Roman law attempted to add a fourth class, the quasi-delict; but the rights which are grouped under this class can be distributed am...

Sec. 42. Promissory Character Of Agreement: The agreement which results in obligation and which amounts to a contract is distinguished at our law from mere intent. It would be difficult to construct a system of law in which obligation could att...

Sec. 43. Community Of Intention: The idea of agreement involves community of intention.1 If the parties know that they intend different things, no agreement is reached. What are the consequences of mistake by which the parties intend...

Sec. 44. Intent To Effect Legal Relations Of Parties Thereto: It is frequently said that in order to amount to an agreement the parties must intend to effect legal relations. For this reason social engagements are excluded from the class of agreements. Under our...

Sec. 45. Methods Of Entering Into Agreement: Agreement originates, as will be discussed in detail hereafter1 in offer and acceptance. Since a contract involves the idea of an outstanding and enforceable promise we must consider briefly the metho...

Sec. 46. Effect Of Modern Theory On Common Law Classification: The modern theory that contract is an agreement enforceable at law has disarranged common law classifications based on the form of action. However, since the common-law classification went back to the...

Sec. 47. Quasi-Contract: If we take the classic common-law classification of contracts, and strike out the contracts which are recognized at modern law as genuine contracts, we have left two classes. These are (1) the contrac...

Sec. 48. Classification And Arrangement Of Topics: The simple contract is the one in general use in the life about us; and in discussing our law as applied to life, the simple contract has become the prevailing type and the other classes of contracts ...

Chapter III. Definitions And Nomenclature: Sec. 49. Definition of contract. Sec. 50. Parol contracts. Sec. 51. Unilateral contracts. Sec. 52. Executed and executory contracts. Sec. 53. Place of executed contract in law. Sec. 54. Classes o...

Sec. 49. Definition Of Contract: A genuine contract is an agreement to which the law attaches obligation; that is, it is an agreement of such a nature that the law will give some remedy for a breach thereof. Another form of expressin...

Sec. 50. Parol Contracts: The original meaning of parol contract at law was one which was not under seal, whether oral or written; a simple contract as opposed to a specialty.1 It has been used in this sense in many of the e...

Sec. 51. Unilateral Contracts: The name unilateral has been suggested for contracts executed on one side and executory on the other, or at least for such contracts of this class as are created by performing the act required for a...

Unilateral Contracts. Continued: Oklahoma. Osborne v. White, 54 Okla. 733, 154 Pac. 653. Oregon. Hughes v. Lansing, 34 Or. 118, 75 Am. St. Rep. 574, 55 Pac. 95; Friendly v. Elwert. 57 Or. 599, 105 Pac. 404, 111 Pac. 690, 112 Pac. 10...

Sec. 52. Executed And Executory Contracts: From the standpoint of performance, contracts have been divided into two classes, the executed and the executory. An executed contract is one in which both parties have fully performed the terms of th...

Sec. 53. Place Of Executed Contract In Law: An executed contract has transferred title to property, conferred the benefit of services and the like. Whether it can properly be classed as a contract or not is questionable, since a contract is an ...

Sec. 54. Classes Of Contract As To Validity: From the standpoint of validity, contracts may be divided into the valid, the voidable Oregon. Leadbetter v. Hawley, 59 Or. 422, 117 Ac. 289 [rehearing denied, Leadbetter v. Hawley, 117 Ac. 505]. Ut...

Sec. 55. Nomenclature Of The Law: It may be added that in one sense accuracy of nomenclature is very important. Since ideas are expressed by words, misuse of words is likely to result in confusion of thought. Every legal idea should f...

Chapter IV. Contract Distinguished From Other Legal Concepts: Sec. 56. Practical importance of distinction between contract and tort. Sec. 57. Basis of distinction between contract and tort. ...

Sec. 58. Distinction Between Contract And Tort In: case of common carriers. Sec. 59. In case of telegraph companies. Sec. 60. In case of innkeepers. Sec. 61. In case of bailor and bailee. Sec. 62. In case of physician, attorney, etc. Sec. 63. In ...

Sec. 56. Practical Importance Of Distinction Between Contract And Tort: While contract is ordinarily clearly distinguishable from other legal concepts such as tort, testament and the like, there are a number of instances in which two of these ideas merge into one another ...

Sec. 58. Distinction Between Contract And Torl In Case Of Common Carriers: If the duty which the law imposes upon a common carrier and the duty which he undertakes by his contract with the shipper or passenger, cover the same subject-matter a violation of such duty may be tr...

Sec. 59. In Case Of Telegraph Companies: The liability of a telegraph company for a wrongful act which is both a violation of its public duty and a breach of its contract, may be treated as a tort liability.1 Failure to transmit and deliver ...

Sec. 60. In Case Of Innkeepers: The liability of an innkeeper to a guest originates in contract and a violation of such duty may be treated as a breach of contract.1 If a servant of the innkeeper points a revolver at the son of a gu...

Sec. 61. In Case Of Bailor And Bailee: The duty of the bailee to the bailor arises out of contract and the bailor may elect between tort and contract in case of the violation of such duty.1 The bailor may treat the liability as contract li...

Sec. 62. In Case Of Physician, Attorney, Etc: The relation between physician and patient grows out of contract; and the liability of the physician for malpractice may be regarded as a breach of contract.1 On the other hand, his negligence may be ...

Sec. 63. In Case Of Landlord And Tenant: The relation between landlord and tenant grows out of contract; and the liability of the landlord to the tenant for non-performance of a covenant to repair is a contract liability only and it can not ...

Sec. 64. Construction Contracts: If the duty of one party to construct a wall or building grows out of contract, the failure to perform such agreement is a breach of contract and not a tort,1 even if as a result of such failure to pe...

Sec. 65. In Case Of Bank And Depositor: If a bank has agreed for value to lend money, its breach of such agreement in refusing to make such loan and in requiring the promisee to remove his account from the bank, is a breach of contract and ...

Sec. 66. Statutory Duties Accessory To Contractual Relations: If, by a statute, certain duties and liabilities are imposed upon persons who voluntarily enter into contracts of certain kinds, such statutory duties and liabilities are regarded as contractual in ch...

Sec. 67. Waiver Of Tort: The distinction between contract and tort has been confused still further by the fact that in some cases of tort the injured party is permitted to bring the action of assumpsit upon such facts as if i...

Sec. 68. Contract Distinguished From Will: In their simplest forms a contract and a will bear little resemblance other than the fact that in each the law gives effect to the intention of the party who enters into such transaction. A will is a ...

Sec. 69. Contract Distinguished From Recital Of Fact: The essential feature of the contract is the promise. An instrument which purports to be the recital of certain facts is not of itself a contract,1 even if such facts tend as evidence to establish the...

Chapter V. Offer And Acceptance: Sec. 70. Agreement essential element of contract. Sec. 71. Motives or benefits as substitute for agreement. Sec. 72. Custom as substitute for agreement. Sec. 73. Actual intent or standardized inten...

Sec. 70. Agreement Essential Element Of Contract: Since a genuine contract is an agreement which results in obligation and which is enforceable at law,1 it follows that agreement is essential to the existence of every genuine contract.2 It is said th...

Sec. 71. Motives Or Benefits As Substitute For Agreement: No genuine contract can exist if the intention of the parties is that no contractual relations shall exist between them.1 The acceptance of benefits which are intended to be gratuitous, does not creat...

Sec. 72. Custom As Substitute For Agreement: In the absence of a real agreement between the parties, custom can not impose contractual liability;1 although if there is a real agreement, many terms for which the parties have made no specific prov...

Sec. 73. Actual Intent Or Standardized Intent: The statement that agreement is an essential element of a genuine contract is therefore so true that it might be treated as nothing but a restatement of a definition of contract in another form, if it...

Sec. 74. Offer And Acceptance: Agreement is usually reached by some form of offer on the one side and acceptance on the other, and thus it is often said that agreement can be reached only in this way.1 Agreement may possibly be rea...

Sec. 75. Nature Of Offer - Must Purport Creation Of Legal Liability: The offer which by acceptance can become an agreement, as the term is used in law, must possess certain qualities differentiating it from the general class of offers commonly so called. It must purpor...

Sec. 76. Promissory Character Of Offer - -Declarations Of Fact: A declaration of fact which does not fairly imply a promise can not be the basis of a contract even if the adversary party has assented 3 See Sec. 152 et seq. 4 Acceptance of the last term left open...

Promissory Character Of Offer - -Declarations Of Fact. Continued: Iowa. Chapin v. Chicago, Milwaukee & St. Paul Ry. Co., 79 la. 582, 44 N. W. 820. Massachusetts. Blanchard v. Page, 74 Mass. (8 Gray) 281. Michigan. Strong v. Grand Trunk R. Co.. 15 Mich. 206, 93 Am....

Sec. 77. Declarations Of Intention: If A declares to B that A intends to act in a certain way, such declaration of intention may be so worded as to amount to a promise by A to B to act in accordance with such declaration; or it may be s...

Sec. 78. Declarations Of Desire Or Hope: An expression of desire or hope is not of itself an offer which will become a contract upon acceptance by the adversary party.1 A statement by an owner of a building as to the time at which the owner ...

Sec. 79. Intent To Assume Liability: An offer which, upon acceptance, becomes a contract, can not be made by words or acts which do not show an intent to assume liability.1 A's act in placing his child in the custody of another does not ...

Sec. 80. Offers In Jest: An offer made in jest and known to be made in jest by the party accepting it, can not be the basis of any legal liability.1 Thus a marriage ceremony intended by both parties as a jest,2 or the giving ...

Sec. 81. Offers Under Mental Agitation: The same principles which apply to offers made in jest apply also to declarations or offers which are made under great mental excitement or anger, which are not really intended by the offeror, and whi...

Sec. 82. Simulated Or Sham Offers: Offers in outward form are often made, but the real understanding of the offeror and of the offeree is that no contract is to be entered into by such transaction. It is intended, as between certain or...

Sec. 83. Undisclosed Terms And Mental Reservations: The nature, effect, and meaning of the offer depend upon the meaning which an ordinarily reasonable man would attach to the words and to the outward acts of the parties, assuming that he did not know ...

Sec. 84. Information Or Invitation To Negotiate: The offer must be one which is intended of itself to create legal relations on acceptance. It must not be a communication of information as to certain facts which may interest the party to whom it is ...

Sec. 85. Illustrations Of Offers To Negotiate: The nature of the offer from this point of view is a question of construction of the terms of the offer, as explained by admissible evidence. The following examples serve to illustrate offers which ar...

Sec. 86. Illustrations Of Offers Contemplating Legal Liability: If the offer made by means of advertisements, circulars and the like shows an intent to assume legal liability thereby, such offer may on acceptance form a contract.1 In some cases the quotation of pr...

Sec. 87. Necessity Of Complete Terms: Even if an offer is intended to create legal relations, it must be so complete that its terms will enable the court, with the aid of admissible extrinsic evidence, to determine what obligation is impo...

Sec. 88. Incomplete Terms: The parties to a contract may not have contemplated completing the contract by subsequent negotiations and yet the terms may be so incomplete that the contract can not be enforced. In such cases if th...

Sec. 89. Terms To Be Settled By Future Negotiations: A clear type of the incomplete agreement is one in which certain terms are agreed on, but other terms are to be settled by future negotiations between the parties.1 An offer which leaves the amount of...

Terms To Be Settled By Future Negotiations. Continued: 14 Wallace v. Figone, 107 Mo. App. 362, 81 6. W. 492. 15 Kaplan v. Whitworth, 116 La. Ann. 337, 40 So. 723. 16 Strong & Trowbridge Co. v. Baars, 60 Fla. 253, 54 So. 92. 17 Mayer v. McCreery, 119 N....

Sec. 90. Terms To Be Settled At Election Of One Party: An offer which leaves certain matters to the subsequent determination of one of the parties and not to some subsequent agreement which is to be entered into between the two, is definite enough.1 If th...

Sec. 91. Terms Supplied By Specific Extrinsic Reference: An offer may adopt in part the terms of another instrument, and may thus be the basis of a valid contract; although, without such reference to such contract, the offer itself would have been incomplet...

Sec. 92. Terms Supplied By Implication Of Law: Omission to express certain terms in a contract does not render it indefinite or uncertain if such terms will be supplied by implication of the law. If the compensation is not fixed by the terms of th...

Sec. 93. Terms Supplied By Construction: It is not necessary, however, that the terms must all be expressly set forth in the offer. If the terms can be determined from the context, or from the extrinsic evidence admissible to explain the ter...

Sec. 94. Method For Determining Terms Omitted From Contract: If the contract, while not specifically determining the subject-matter, fixes a valid method of determining it thereafter, as in a contract for the sale of realty,1 it is certain enough. If the entire...

Sec. 95. Indefinite And Uncertain Offers: The offer must not merely be complete in terms, but the terms must be sufficiently definite to enable the court to determine whether the contract has been performed or not.1 If the court can determine...

Sec. 96. Uncertainty As To Consideration: The consideration to be paid may be left indefinite.1 An offer to allow part of the wages of an employe to be applied on a debt of his father's to his employer;2 an offer to furnish part of the mone...

Sec. 97. Uncertainty As To Subject-Matter: The quantity or the quality of the subject-matter may be left indefinite; and such uncertainty will render the contract invalid.1 A contract to furnish a certain number of articles of varying kinds an...

Sec. 98. Uncertainty As To Time: The time during which, or within which, the contract is to be performed, may be left indefinite, and such uncertainty may prevent the formation of a valid contract.1 An offer to operate a mine as lon...

Sec. 99. Requisite Degree Of Certainty: While the intention of the parties must appear from the language which they used together with the surrounding facts and circumstances, it is sufficient if such intent can be ascertained with reasonab...

Sec. 100. Context And Surrounding Facts: The context of a contract or the surrounding circumstances, or both, may give sufficient certainty to terms which, without such aid, would be indefinite and uncertain.1 The context and the surrounding...

Sec. 101. Terms Made Certain By Specific Extrinsic Reference: Reference to extrinsic instruments or other extrinsic facts may save a contract which would otherwise be uncertain.1 A defective description of the subject-matter may be aided by extrinsic reference,...

Sec. 102. Terms Made Certain By Principles Of Construction: To make a contract sufficiently definite it is not necessary that the terms be all expressly set forth in unambiguous language. A contract whose meaning can be ascertained by the ordinary rules of con...

Sec. 103. Effect Of Performance Of Indefinite Covenant: The right of the parties to a contract which contains indefinite covenants so vital and material that the entire contract can not be enforced while executory, may be affected by performance of one or ...

Sec. 104. Effect Of Waiver Of Indefinite Covenant: If all the terms of the contract have been agreed upon except one, and that term is left open for negotiations within specified limits, it is possible for one of the parties to attempt to waive his ri...

Sec. 105. Effect Of Indefinite Covenant Upon Contract: The effect upon the validity of a contract of lack of certainty and definite-ness depends upon the relation which such covenant bears to the contract. If the covenants on both sides are uncertain and ...

Sec. 106. Uncertainty In Equity And At Law: In order to be the basis of a decree of specific performance in equity, the contract must be so certain that the chancellor's decree can specify exactly what must be done in order to comply therewith....

Sec. 107. Quasi-Contractual Right Of Recovery Under Indefinite Contract: If A and B attempt to enter into a contract and such contract is unenforceable because it is vague and indefinite, either party who has paid money, furnished goods, or rendered services under such con...

Sec. 108. Form Of Offer - Express Offer: If the offer has the elements already indicated, its form is not material,1 if the contract is not one which is required to be in writing,2 or to be proved by writing.3 Accordingly, it is not error to...

Sec. 109. Offer By Acts: In the absence of statute, an offer for a simple contract may be made by any means whereby the offeror causes the offeree to believe that the offeror is making a definite promise which contains the re...

Sec. 110. Communication Of Offer - Necessity: It seems like an elementary proposition, scarcely needing demonstration, that an offer can not be accepted so as either to confer rights or to impose liabilities until it has been communicated to the ...

Sec. 111. Communication Of Offer To Third Party: Communications between principal and agent, not communicated to the third person with whom the principal contemplates making a contract, or at least not communicated with the authority of the principa...

Sec. 112. Sufficiency Of Communication - Standardized Communication: The actual knowledge of the offer on the part of the offeree is sufficient, but not always necessary. The communication which is requisite may not be an actual communication. A standardized form of co...

Sec. 113. Contracts With Common Carriers - Standardised Communication Sufficient: In contracts with common carriers the written offer frequently consists of a bill of lading, a receipt, a ticket, and the like; and this is accepted by the party to whom it is offered without his read...

Contracts With Common Carriers - Standardised Communication Sufficient. Part 2: Texas. Eddy v. Harris, 78 Tex. 661, 22 Am. St. Rep. 88, 15 S. W. 107; Houston & T. C. Ry. Co. v. Lee, 104 Tex. 82, 133 S. W. 868. See also, Tickets, by Joseph H. Beale, 1 Harvard Law Review, 17. 6 O...

Contracts With Common Carriers - Standardised Communication Sufficient. Part 3: New Hampshire. Durgin v. Express Co., 66 N. H. 277, 20 Atl. 328, 9 L. R. A. 453; Merrill v. Express Co., 62 N. H. 514. New York. Hill v. Ry., 73 N. Y. 361, 29 Am. Rep. 163. North Carolina. Phifer v....

Sec. 114. Contracts With Common Carriers - Actual Communication Requisite: In other jurisdictions the minority view is entertained and it is held that the terms of a written contract offered by a common carrier whereby it attempts to limit or avoid its common-law liability, ...

Sec. 115. Contracts With Common Carriers - Effect Of Statutory Provisions: This matter has been regulated both by Federal and state statutes. Under the present Federal statutes1 a common carrier is to publish its rates and tariffs and file them with the interstate commerce c...

Sec. 116. Necessity Of Communication Of Offer In Rewards: It is usually so clear that no rights can arise out of acts done without knowledge of or intent to accept an offer, though such acts might be an appropriate means of acceptance if intended for that pu...

Sec. 117. Termination Of Offer: After an offer has once been communicated, it may cease to exist as an offer capable of being turned into a contract by acceptance, in one of three ways: The offeror may, subject to certain qualificat...

Sec. 118. Revocation - Power To Revoke: An offer which is not an offer for value and not under seal may be withdrawn at any time before it has been accepted, and can not, after withdrawal, be accepted so as to make a binding contract.1 The ...

Sec. 119. Effect Of Simple Gratuitous Promise Not To Revoke: An offer which is not given for value or under seal may be withdrawn at any time before acceptance, even though it was originally made to remain open for a fixed time,1 or even if by its express terms...

Sec. 120. Revocation At Auctions: At an auction sale a bid may be withdrawn at any time before it is accepted.1 The party offering the property for sale may withdraw it at any time before a bid has been accepted.2 A public officer,3 s...

Sec. 121. Revocation Of Orders: If a so-called contract of sale is by its terms not to be binding upon the seller until approved by a specified officer, an action can not be maintained upon such contract unless it has been thus appr...

Sec. 122. Offer For Value - Power To Revoke: If an offer is made, and the offeror promises not to withdraw it for a specified time, and such promise not to withdraw such offer for the time specified is upon valuable consideration, the offeror ha...

Sec. 123. Value As Term Of Contract: As in the case of considerations generally, the consideration for keeping the offer open must be that contemplated by the parties.1 An option to take such part of a certain quantity as the vendee may ...

Sec. 124. Nominal Consideration For Offer: Whether a nominal consideration is sufficient to support a promise not to revoke an offer, is a question upon which there is the same difference of opinion as in the case of the question of the genera...

Sec. 125. Discharge Of Rights Under Offer For Value: A breach which would operate as a discharge of a contract1 will operate as a discharge of a contract not to revoke an offer.2 If a lease contains an option upon the property leased, and the lessee ref...

Sec. 126. Effect Of Attempt To Revoke Offer For Value: While the offeror has no right to withdraw such an offer, he not infrequently attempts to do so: and an important question arises as to the effect upon the offer of the attempted revocation. Is the at...

Sec. 127. Offer Under Seal: An offer under seal which is, by its terms, to remain open for a certain time, is irrevocable during such time, in jurisdictions in which the seal has the effect which it had at common law.1 It must b...

Sec. 128. Effect Of Attempt To Revoke Offer Tinder Seal: Whether such an offer is irrevocable or whether the revocation is to be regarded as a breach, or whether the original transaction is a contract binding on the offeror because of the seal, but conditio...

Sec. 129. Offers Made Irrevocable By Statute: Under some statutes certain types of offer are made irrevocable.1 A statute which makes bids upon public works irrevocable and which provides that a deposit shall accompany each bid, prevents a bidder...

Sec. 130. Revocation Of Offer To Be Accepted By Doing Act: An offer which is to be accepted by doing a certain act or series of acts may be revoked before any of such acts are done.1 After all the acts which are prescribed by the offer have been performed, th...

Revocation Of Offer To Be Accepted By Doing Act. Continued: See also, on this question, The Question of Time In Accepting an Offer by Performing an Act, by William S. Bansemer, 36 American Law Review, 707. 6 Elkins v. Board of Commissioners, 86 Kan. 305, 46 L...

Sec. 131. Illustrations Of Revocation Of Offer To Be Accepted By Doing Act: The following cases illustrate the attitude of the courts towards attempted revocation of an offer to be accepted by the performance of a series of acts or by a continuous act. If A subscribes to a ra...

Sec. 132. What Constitutes Revocation - Revocation By Words: No particular form of revocation is necessary. It is sufficient if the entire communication shows unequivocally to the offeree that the offeror does not regard himself as bound by his offer any longer...

Sec. 133. Revocation By Acts: An offer may be withdrawn before acceptance by acts of the offeror, inconsistent with the continued existence of the offer, and properly brought to the knowledge of the offeree.1 A common example of s...

Sec. 134. Necessity Of Communicating Revocation - Offer To Specific Individual: Revocation of an offer which has been made to some specific individual must, in the absence of statute, be communicated to the offeree before the offeree has accepted such offer, in order that such re...

Sec. 135. Offer To General Public: If an offer has been made to the general public, as by advertisement, such offer may be revoked by a similar advertisement, even if such revocation does not come to the knowledge of one who accepts su...

Sec. 136. To Whom Notice Of Revocation May Be Given: It is no more judicial legislation than any of the other common-law rules on the subject of offer and acceptance which the courts have built up without either help or hindrance of legislation. The rul...

Sec. 137. Rejection Of Offer - What Constitutes: Words or conduct, communicated properly to the offeror, which show that the offeree intends not to accept the offer amount to a rejection thereof.1 A so-called acceptance which varies materially from ...

Sec. 138. Rejection Of Offer - Effect: An offer, when once rejected, loses its legal force and can not be accepted thereafter so as to create a binding agreement,1 unless it is renewed after the rejection by the original offeror. No revoca...

Sec. 139. Lapse Of Offer By Expiration Of Time - Time Not Fixed By Offer: An offer once made is not to be regarded as open for acceptance indefinitely. Whether it remains open for any length of time and if so, for how long, depends on the following considerations: 3 Englan...

Sec. 140. Lapse Of Offer For Future Act: Where the offer is to do an act in the future, it may be accepted a reasonable time after it is made;1 and possibly within a reasonable time from the time fixed for doing such act. Thus an offer to bu...

Sec. 141. Time Fixed By Offer: (3) If a time is fixed by the terms of the offer, within which acceptance can be made, the party to whom the offer is made may accept at any time within the limit thus fixed, the offer not being withd...

Sec. 142. Construction Of Provisions Of Offer Fixing Time: If the offer is, by its terms, to be acknowledged promptly, it lapses if not acknowledged promptly.1 So a telegram received at 10 p. m. Saturday night to be answered instantly, can not be accepted o...

Sec. 143. What Is Reasonable Time For Offer: It is impossible to lay down a rule for determining what is a reasonable time in every case. Delays of twenty years,1 twelve years,2 four years,3 a year,4 3 Eagle Mill Co. v. Caven, 76 Mo. App. 458. ...

Sec. 144. Extension Of Time Of Offer: The act of the offeror in treating the offer as in force may prevent it from lapsing.1 Such conduct is said to amount to an agreement to give more time or to treat the acceptance as an acceptance in t...

Sec. 145. Acceptance Prevented By Offeror: If the offeror prevents the offeree from accepting an offer, given for value, the expiration of the time fixed by the offer may not cause the offer to lapse.1 If the offeror leaves his home or his usu...

Sec. 146. Contracts By Correspondence - Acceptance Of Offer Open For Certain Time: The rule that the mailing of an acceptance completes the contract in a proper case, is affected by the application of the doctrine that an offer lapses if not accepted within a reasonable time or with...

Sec. 147. Lapse Of Offer By Death Or Insanity Of Offeror: If the offer is not under seal and not upon a valuable consideration, the death of the offeror before acceptance, ends such offer;1 and so does his insanity.2 So a guaranty of future obligations which...

Sec. 148. Offer By Terms To Be Accepted After Death Of Offeror: An offer may be made which, by its terms, can be accepted only after the death of the offeror. It seems that such offer can not be accepted so as to create a general obligation against the estate of t...

Sec. 149. Lapse By Death Of Offenee: If the offer is not for value and is not under seal, the death of the offeree is said to cause the offer to lapse, on the ground that such offer is personal to the offeree and that his heirs can not a...

Sec. 150. Necessity Of Acceptance: Until acceptance the offer is not an agreement between the parties.1 California. Dunne v. Dunne, 66 Cal. 157, 4 Ac. 441, 1152. Connecticut. Bishop v. Howarth, 50 Conn. 455, 22 Atl. 432. Indiana. Wa...

Sec. 151. What Constitutes Acceptance - Intention To Accept: Words or conduct amount to an acceptance only if they show that the offeree means to accept,the offer.1 For this reason an uncommuni-cated offer can not be accepted.2 Silence does not amount to assent...

Sec. 152. Necessity Of Communicating Acceptance - Offer To Be Accepted By Promise: As has been said before1 offers may be divided into two general classes with reference to the method in which they must be accepted. In one class, the offer itself, either by its express terms or by f...

Sec. 153. Offer To Be Accepted By Doing Act - Effect Of Communicating Acceptance: An offer which, by its terms, requires the offeree to accept such offer by doing certain acts in performance of the contract, may be accepted by the offeree's performing such acts if such acts of the ...

Sec. 154. Necessity Of Communicating Acceptance - Offer To Be Accepted By Act: While the courts lean strongly against construing an offer as calling for acceptance by the performance of an act, and while they lean strongly in favor of construing an offer as calling for acceptanc...

Sec. 155. Specific Illustrations - Contracts Of Guaranty: If A offers to B to guarantee C's debt to B, he may so word his offer that the only acceptance necessary is B extending credit, forbearing suit, or whatever else may be the consideration of the guaran...

Sec. 156. Orders For Shipment Of Goods: The courts have reached different results in construing orders for the shipment or manufacture of goods. In many cases such order is regarded as an offer which is to be accepted by doing the act there...

Sec. 157. Subscriptions: Subscriptions as to educational and charitable objects can ordinarily be accepted only by performing the conditions stipulated in the offer; but the performance of such conditions within a proper time...

Sec. 158. Rewards: If a reward is offered for doing an act, such offer is accepted by doing such act, even if notice thereof is not given to the party who offers the reward.1 If an advertisement has been published, offe...

Sec. 159. Necessity Of Communicating Acceptance - Offer To Be Accepted By Act And Notice: Occasionally, the terms of the offer and the circumstances of the transaction show that the offeror stipulates for notice of acceptance as well as for performance. If the offeror requires communicatio...

Sec. 160. Failure To Reject Not Equivalent To Assent: An intention to accept the terms of the offer as valid is ordinarily an essential element of a valid acceptance. Communication of acceptance is necessary. For want of both of these elements failure or...

Sec. 161. Silence As Estoppel: A's conduct, of which his silence is a part, may be such as to lead B to believe that A has accepted B's offer. Under such circumstances A's silence may amount to consent. If a counter-offer as to the...

Sec. 162. Silence As Acquiescence In Account Stated: The rule that acceptance is not established by showing silence on the part of the offeree must be qualified in the case of the account stated. By the custom of merchants it was the actual understandin...

Sec. 163. Silence As Acquiescence In Variance Of Written Contract From And Contract: If A and B make a valid oral contract, and subsequently A delivers to B a written contract which varies from the terms of the oral contract, B 's omission to notify A that he does not assent to the re...

Sec. 164. Cross-Offers: From the principles that an offer must be communicated and that an acceptance must be intended as such, it follows that independent cross-offers, though identical in terms, do not amount to a contract...

Sec. 165. Effect Of Acceptance As Concluding Contract: Upon acceptance the offer becomes an agreement, enforceable if otherwise valid,1 which can not thereafter be withdrawn by the offeror.2 If an offer to furnish labor or material or both is accepted, an...

Sec. 166. Retroactive Effect Of Acceptance: Whether the contract which is made by the acceptance of an offer dates from the acceptance or whether it relates back to the date of the original offer, is a question upon which there has been some co...

Sec. 167. Acceptance Must Be Positive: The intention to accept must be expressed in positive terms.1 Thus a statement by the offeree that he would think over the matter,2 or that he would like to accept,3 or a promise to take up the matte...

Sec. 168. Acceptance Must Correspond To Offer: The acceptance of an offer for a promise must, furthermore, correspond to the offer at every point, leaving nothing open for future negotiations.1 An attempted acceptance which leaves open the adjustm...

Sec. 169. Acceptance Purporting To Modify Offer: If the offer is one which by its terms is to be accepted by making a promise, an attempted acceptance which seeks to modify one or more of the terms of the offer is of no legal effect as an acceptance...

Sec. 170. Variance As To Parties: Acceptance which attempts to change the parties is insufficient.1 If A offers to sell realty to B on certain designated terms, C can not accept such offer.2 An offer by A to sell to B, which B attempt...

Sec. 171. Variance As To Form: An acceptance which attempts to vary the terms of the offer as to the form of the contract is inoperative. If A makes an offer which by its terms requires a written contract to be signed by both parti...

Sec. 172. Variance As To Title: An attempted acceptance of an offer to sell land, adding a term to the effect that the title is to be good,1 accepting an offer to sell land with the provision that an abstract of title be furnished;2...

Sec. 173. Variance As To Quantity Or Quality: An acceptance which attempts to modify the quantity offered for sale, is inoperative.1 If A offers to B to sell a certain quantity, more or less, and B strikes out the words or less and attempts t...

Sec. 174. Variance As To Price: An acceptance which attempts to modify the price,1 as by asking a rebate for damages previously caused by fire,2 does not complete the contract. An option for the purchase of certain water rights is r...

Sec. 175. Variance As To Time Or Place Of Performance: An acceptance which attempts to change the place of payment is invalid,1 as where the offer implies a payment to the vendor at his residence and the acceptance fixes the place of payment at the reside...

Sec. 176. Variance As To Other Terms: An offer to sell at auction to be accepted by paying a ten per cent. deposit when a bid is accepted, which the highest bidder attempts to accept by tendering a check of another person on a bank in whi...

Sec. 177. Reiteration Of Terms Not Variance: An acceptance may state with emphasis certain terms which are contained in the offer by construction or by implication of the law. If the terms thus insisted on in the acceptance are the same as those...

Sec. 178. Modification Requested As Favor: An acceptance may refer to new terms not as part of the contract but as favors asked of the party offering to be granted or withheld at his option. Such new terms do not, of course, invalidate the acc...

Sec. 179. Addition Of Gratuitous Promise To Acceptance: The addition of a gratuitous promise to the acceptance does not render it inoperative as an acceptance.1 If A offers to do certain work for B, B's acceptance is not rendered invalid by the fact that B...

Sec. 180. Inquiry As To Terms Not Counter-Offer: An inquiry as to whether the offeror will modify the terms of the offer is not a rejection of the offer.1 An offer of sale is not rejected by an inquiry as to whether the offeror would sell the proper...

Sec. 181. Acceptance Under Protest: If the acceptance is unconditional and unequivocal the fact that the offeree protests against the terms of the offer does not render such acceptance invalid.1 If A offers to pay a certain sum upon a d...

Sec. 182. Variance As To Minor Matter: If the variance between the offer and acceptance is on some immaterial matter, it has been said that such acceptance completes the contract, at least if the offeror makes no specific objection to such...

Sec. 183. Modifications Offered After Acceptance: After the contract is made, new terms can not be added by either party without the consent of the other.1 If after acceptance the acceptor insists on a modification of the original contract in which t...

Sec. 184. Conditional Or Modified Acceptance Treated As Rejection And Counter-Offer: A conditional or qualified acceptance of an offer does not constitute an agreement unless the condition is complied with.1 Such an acceptance is a counter-offer, which, even if it purports to be an ac...

Sec. 185. Prescribed Form Of Acceptance: The party making the offer may prescribe a mode in which acceptance must be made, if at all. Unless the party who makes the offer subsequently modifies his requirements, expressly or impliedly, he can...

Sec. 186. Waiver Of Prescribed Form Of Acceptance: The party prescribing a form of acceptance may waive such form, and accept any other method of acceptance as sufficient. Such waiver occurs where an acceptance not made in the prescribed form is commu...

Sec. 187. Methods Of Express Acceptance - Words: Where the offer does not prescribe any specific manner of acceptance any form of communicating intention to accept the offer, made to the party making the offer or to some one duly authorized to repre...

Sec. 188. Offer For Promise - Acceptance Implied From Acts: An offer is frequently made by A, which he probably intends to have accepted by B, by B's giving a promise to perform on his part, followed by such performance; while B intends to accept such offer an...

Offer For Promise - Acceptance Implied From Acts. Continued: 10 Austin v. Burge, 156 Mo. App. 286, 137 S. W. 618. 11 Austin v. Burge, 156 Mo. App. 286, 137 S. W. 618. 12 Feed W. Wolf Co. v. Monarch Refrigerating Co., 252 111. 491, 50 L. R. A. (N.S.) 808, 96 N...

Sec. 189. Offers For Act Construed As Offers For Promise: Offers to be accepted by the performance of an act are not, as a rule, favored in construction. Wherever it is possible to find that A was requiring B to promise to perform the stipulated act and that...

Sec. 190. Offer Of Promise For Act - What Constitutes Acceptance: A performance of the acts stipulated for by the offer, amount to an acceptance, if the offer is one which, by its terms, is to be accepted by the performance of an act.1 An offer to lend money if coll...

Sec. 191. Acceptance By Act Which Is Substantial But Not Literal Performance: A difficult question is presented in cases in which the performance of the acts stipulated for, falls short of literal performance. If the offer is one which is to be accepted by a promise, it is ordi...

Sec. 192. Acceptance By Act Which Is Not Substantial Performance: If an offer of a reward is made for arrest,1 or for arrest and conviction,2 such offer is not accepted by furnishing information, although such information may result ultimately in the detection, arre...

Sec. 193. Who Can Accept Offer - Offer To Definite Person: An offer is usually made to some definite person. In such case only such person can accept the offer, and acceptance by another has no legal effect.1 Thus an offer by A to B to guarantee X's debt to B...

Sec. 194. Assignment Of Offer: If A makes an offer to B, B can not assign if such offer is not for value; and B's assignee can not accept and thus establish contractual relations with A, at least if A does not know that such assign...

Sec. 195. Offer To Unascertained Person: It is possible for an offer to be made, not to any specific person, identified as the offeree when the offer is made, but to any person, then indefinite, who shall later be ascertained. Such offers ar...

Sec. 196. To Whom Notice Of Acceptance May Be Given: Notice of acceptance to the offeror himself is sufficient if he has not prescribed some other method of acceptance. Notice of acceptance may be given to one whom the offeror has permitted to act as hi...

Sec. 197. Distinction Between Offer And Contract: Since an offer is, as a rule, revocable, while a contract is not, it is of the greatest importance to distinguish between an offer and a contract. This distinction depends upon the intention of the pa...

Sec. 198. Contracts By Correspondence - Commnnication Of Offer: If the offeror and the offeree are not in personal communication, the mail and the telegraph are the practicable methods of communication; and the courts have had no hesitation in recognizing the vali...

Sec. 199. Contracts By Correspondence - Communication Of Accept-Ance: Acceptance, on the other hand, by the great weight of modern authority, is regarded as operative, if made by mail or telegraph, from the moment that its transmission begins, provided that such transmi...

Sec. 200. Contracts By Correspondence - Practical Results Of Rule - Loss Of Letter Of Acceptance In Mails: The chief classes of cases in which the question as to the time at which a letter of acceptance becomes operative, becomes important, are as follows: Where the letter of acceptance is lost, and the qu...

Sec. 201. Delay Of Acceptance In Mails: If the letter of acceptance is delayed in the mail so that the offer would have lapsed if the contract had dated from the receipt of the acceptance, such acceptance is sufficient if it was duly mailed...

Sec. 202. Revocation Of Offer After Acceptance Mailed: If offeror attempts to revoke the offer by sending a later letter or telegram, or by giving notice of revocation in some other way, and such notice reaches the offeree after the letter of acceptance h...

Sec. 203. Revocation Of Acceptance After Mailing: It would follow logically that the party who has mailed an acceptance can not revoke such acceptance by any communication which is transmitted after such acceptance, even if it is received by the offe...

Sec. 204. Lapse After Mailing Acceptance: If the party making the offer dies before the letter of acceptance is received, but after it is mailed, the offer does not lapse, since it has already been turned into an agreement by acceptance.1 The...

Sec. 206. Contracts By Correspondence - Specific Provision As To Method Of Acceptance: If the party making the offer wishes to avoid the application of these rules, he can do so by prescribing that only the receipt of the letter or telegram of acceptance shall constitute a proper accept...

Sec. 207. Contracts By Correspondence - Communication Other Than To Adversary Party: The rule that acceptance by mail dates from the time of mailing applies only to cases in which the letter of acceptance is mailed by the offeree or his authorized agent to the offeror or his authorize...

Sec. 208. When Communication By Mail Or Telegraph Is Proper - Theories: Under what circumstances the mail or telegraph is a proper means of communication so as to bind the parties at the moment that acceptance is mailed, is a question on which the courts have expressed di...

When Communication By Mail Or Telegraph Is Proper - Theories. Continued: 11 Carter v. Hibbard (Ky.), 83 S. W. 112, 26 Ky. Law Rep. 1033; Farmers' Produce Company v. Schreiner, 48 Okla. 488, L. R. A. 1916A, 1297 [sub nomine: Farmers' Produce Co. v. McAlester Storage & Commi...

Sec. 209. What Is Proper Sending By Mail Or Telegraph: What constitutes a proper sending by mail or telegraph is a question upon which there has been but little discussion. Depositing a letter in the postoffice is a sufficient mailing if the letter is pro...

Sec. 210. Contracts By Correspondence - Effect Of Receipt Of Letter Or Telegram: In any event the contract is, of course, complete on receipt of the telegram,1 or letter,2 if the offer is still open. If A's letter incloses a written contract signed by A with a request to B to sign...

Sec. 211. Contracts By Correspondence - Communication Of Revocation: If the offeror attempts by letter or by telegram to revoke an offer which is already made, such revocation is not operative until such letter or telegram has reached the offeree in the ordinary course...

Sec. 212. Contracts By Telephone: A contract which is not required to be in writing or to be proved by writing may be made by telephone.1 Wherever the question of the place where such a contract is made is material there is opportunit...

Sec. 213. Effect Of Intending To Reduce Contract To Writing: In many cases of oral offer and acceptance, the parties intend to reduce the contract to writing, but such reduction is not effected. The validity of the oral agreement in such cases depends on the in...

Effect Of Intending To Reduce Contract To Writing. Continued: 9 England. Ridgway v. Wharton, 6 H. L. Cas. 238; Winn v. Bull, L. R. 7 Ch. D. 29; Watson v. McCallum, 87 Law T. 547. United States. Couch v. McCoy, 138 Fed. 696. Alabama. Hodges v. Sublett, 91 Ala. ...

Sec. 214. Place At Which Contract Is Made: The place at which a contract is made is the place at which the offer is accepted.1 If the offer is accepted by doing an act, the place where the act is done is the place where the contract is made.2 ...

Sec. 215. Time At Which Contract Is Made: A contract is made at the time at which the offer is accepted in legal effect. If the promise is to be accepted by making a promise in return, the time at which the contract is made is the time at whi...

Chapter VI. General Nature Of Fraud, Misrepresentation, Mistake, And Non-Disclosure: Sec. 216. Introductory. Sec. 217. Definition and nature of fraud. Sec. 218. Definition and nature of misrepresentation. Sec. 219. Definition and nature of mistake. Sec. 220. Definition and nature ...

Sec. 216. Introductory: The outward form of offer and acceptance may exist while in reality there is either no agreement at all, or one which is voidable at the election of one party thereto. This state of affairs, if due to...

Sec. 217. Definition And Nature Of Fraud: The term fraud is one which is used in a variety of meanings. It is used as the name of a tort at common law; as a name for false representations which will enable the defrauded party to avoid liabi...

Sec. 218. Definition And Nature Of Misrepresentation: A misrepresentation is a false statement of a material fact made by one party to a contract to the adversary party, with intent to influence his action, which such adversary party believes and in reli...

Sec. 219. Definition And Nature Of Mistake: Mistake is a term which includes a number of distinct legal concepts, which have in common no more than this, that the party seeking relief was not aware of some fact or rule of law when he entered in...

Sec. 220. Definition And Nature Of Non-Disclosure: Pure non-disclosure, as the name implies, is the omission to disclose to the adversary party facts not known to him but known to the party so omitting to make disclosure. It differs from fraud and mis...

Sec. 221. Distinction Between Essential Elements Of The Contract And Matters Of Inducement: Each of the subjects of fraud, misrepresentation, mistake and non-disclosure must be considered, with reference to its point of contact with the contract. Each of them may (1) concern some one of the ...

Sec. 222. Effect Of Making Existence Of Fact A Term Of Contract: It may be observed before beginning a discussion of the topics of fraud, misrepresentation, mistake and non-disclosure, that if such terms are properly used they all apply to facts which are not carri...

Effect Of Making Existence Of Fact A Term Of Contract. Part 2: Washington. Baker v. Robbins, 51 Wash. 467, 99 Ac. 1. 8 A case of collateral guaranty: Busch v. Wilcox, 82 Mich. 315, 46 N. W. 940 [rehearing denied, 82 Mich. 336, 21 Am. St. Rep. 563, 47 N. W. 328]....

Effect Of Making Existence Of Fact A Term Of Contract. Part 3: Louisiana. Germier v. Ins. Co., 109 La. 341, 33 So. 361. Maine. Maine Beneficial Association v. Parks, 81 Me. 79, 10 Am. St. Rep. 240, 16 Atl. 339. Massachusetts. Cobb v. Benefit Association, 153 Ma...

Chapter VII. Fraud As To Essential Element Of Contract: Sec. 223. Representation must mislead. Sec. 224. Fraud as to identity or existence of subject-matter. Sec. 225. Fraud as to identity of adversary party. Sec. 226. Distinction between identity of pe...

Sec. 223. Representation Must Mislead: To amount to fraud which will prevent the formation of a contract the false statement as to one of the essential elements of a contract must mislead the adversary party.1 If A, who is to convey land t...

Sec. 224. Fraud As To Identity Or Existence Of Subject-Matter: Fraud as to an essential element of a contract exists where one party thereto intentionally misleads the other as to one of the elements of the contract into which they are entering. A fraudulent repr...

Sec. 225. Fraud As To Identity Of Adversary Party: A false statement as to the identity of the adversary party, where the identify of such party is material, prevents the apparent offer and acceptance from amounting to a contract.1 If the seller of ce...

Sec. 226. Distinction Between Identity Of Person And Qualities Or Characteristics: Whether a given representation involves the identity of the adversary party or whether it involves merely characteristics or qualities of such party, as for instance, his reliability, financial standi...

Sec. 227. Fraud As To Terms Of Oral Contract: A fraudulent misstatement of the terms of an oral contract may avoid the transaction if it misleads the adversary party.1 Thus X as agent for A had sold goods to B, payable on delivery. B represented ...

Sec. 228. Fraud In Execution - Existence Of Written Contract: If statement to the effect that the instrument is merely a chattel mortgage to secure an outstanding note when, in fact, it is a note and mortgage for a further additional amount;2 a fraudulent statem...

Sec. 229. Fraud In Execution - Contents Of Written Contract: The commonest form of fraud in the factum exists where an instrument in writing is drawn up and signed by one party under a false belief as to its contents, due to the fraud of the adversary party. In...

Sec. 230. Written Instrument Represented As Identical With Prior Contract: If the parties have entered into a valid oral contract and one of them induces the other to sign a written contract by representing fraudulently that the contents of the written contract are the same ...

Sec. 231. Negligence As Affecting Fraud In The Execution - Party Unable To Read Or Prevented From Reading: If the party who has been induced to execute a written contract by fraudulent representations as to its contents seeks to avoid liability thereunder, it is clear that he has never in fact assented to ...

Sec. 232. Party Reads Contract: If on the other hand the party to whom the false statement is made reads the instrument, no fraud exists,1 as he has full knowledge of all material facts.2 So if the party alleging fraud is advised of...

Sec. 233. Party Able To Read But Omits To Read - Contract Held Void: If the party defrauded could read, has a chance to read, and omits to read the instrument relying on the adversary party's statement of its contents, the instrument should on principle be treated as v...

Sec. 234. Contract Held Valid: In a number of cases, however, the courts have permitted the party who has been guilty of successful fraud to reap the reward of his iniquity on the theory that the negligence of the innocent party an...

Sec. 235. Relations Of Special Trust And Confidence: Even where false representations as to the contents of a written contract are not treated as fraud in the absence of special circumstances, a different result is reached if the parties to the contract...

Sec. 236. Rights Of Bona Fide Holder Of Negotiable Contract: If the instrument is negotiable, and is in the hands of bona fide holder, the question of negligence is held the test of liability. If the maker signed without knowing the nature of the instrument and...

Sec. 237. Effect Of Fraud Of Third Person: One who signs a written contract in ignorance of its contents, being able to read but relying on the representations of a third party, is bound thereby,1 as the doctrines of mistake apply, and not tho...

Sec. 238. Fraud In Execution As Making Contract Voidable: In the foregoing discussion it has been assumed by the great weight of authority that if fraud in the execution is operative, it prevents the existence of the contract; or as it is often stated in oth...

Sec. 239. Rescission In Equity: If A executes a contract or other written instrument in reliance upon a fraudulent statement of the adversary party as to its contents, A may treat such contract or instrument as void in an action at ...

Sec. 240. Restitution Not Condition Precedent: If A enters into a contract with B in reliance upon B's fraudulent statements as to the contents of such contract, it is not necessary that A should restore to B whatever A may have received under suc...

Sec. 241. Reformation For Fraud In Execution: While the relief generally sought in such cases is to have the contract held void, such fraud may be treated as at least equivalent to mistake and the contract may be reformed, so as to express the co...

Chapter VIII. Misrepresentation As To Essential Element Of Contract: 5 242. Misrepresentation as to an essential element of the contract. Sec. 243. What amounts to misrepresentation. Sec. 244. Misrepresentation as to contents of instrument. Sec. 245. Misrepresentati...

Sec. 242. Misrepresentation As To An Essential Element Of The Contract: Misrepresentation of an essential element of a contract, as distinguished from mistake on the one side and fraud on the other, is necessarily quite rare. Indeed in the cases decided on that topic it i...

Sec. 243. What Amounts To Misrepresentation: To render a contract invalid by reason of misrepresentation, such misrepresentation must be substantially false. A release is not avoided by a statement that the other passengers had signed such relea...

Sec. 244. Misrepresentation As To Contents Of Instrument: When the question of the effect of misrepresentation as to an essential element is presented for adjudication, it seems clear both from the authorities as well as on principle, that error as to an ess...

Sec. 245. Misrepresentation As To Identity Of Adversary Party: Misrepresentation as to the identity of the adversary party is rarely innocent, but, on analogy to fraud and mistake, it would seem to be material whenever it was found to exist. If, however, several ...

Sec. 246. Misrepresentation As To Existence Or Identity Of Subject-Matter: Misrepresentation as to the existence of the liability or property which is the subject-matter of the contract, as where A represented that a parcel of money entrusted to B to be delivered to A had no...

Sec. 247. Negligence As Affecting A Misrepresentation In The Execution: The chief difference between the effect of misrepresentation as to the contents of a written contract and the effect of mere mis. take, is that in mistake the negligence of the party misled by mistake...

Sec. 248. Negligence As Affecting Misrepresentation As To Other Essential Element: Misrepresentation implies that the party to whom the misrepresentation is made believes such misrepresentation and acts thereon.1 If a misrepresentation is made concerning an essential feature of the ...

Sec. 249. Effect Of Misrepresentation As To Essential Element: While the great weight of authority, as disclosed in the foregoing sections,1 is to the effect that misrepresentation as to one of the essential elements of the contract makes it void; that is, that s...

Sec. 250. Nature Of Relief: Various remedies for innocent misrepresentation are given. In some cases specific performance has been refused.1 If the vendor innocently misrepresents to the purchaser the boundaries of the tract whi...

Chapter IX. Mistake As To An Essential Element Of The Contract: Sec. 251. Mistake as to an essential element of the contract. Sec. 252. Fact, opinion, and evidence distinguished. Sec. 253. Conscious ignorance - Mistake discovered before execution. Sec. 254. For...

Sec. 251. Mistake As To An Essential Element Of The Contract: A contract entered into because of mistake as to an essential element is void.1 While this general rule is substantially unquestioned, con- 1 England. Gordon v. Street (1899), 2 Q. B. 641 (really a c...

Sec. 252. Fact, Opinion, And Evidence Distinguished: Mistake as to a fact may operate to render the contract invalid.1 A mistake as to a matter of opinion does not avoid the contract.2 A release of damages for personal injuries which is executed under ...

Sec. 253. Conscious Ignorance - Mistake Discovered Before Execution: If A enters into a contract knowing that he has not sufficient or exact knowledge of a material fact, he can not avoid such contract on the ground of mistake because such fact turns out differently fr...

Sec. 254. Forgetfulness As Mistake: If a party to a contract has known of a material fact and has entered into such contract because he has forgotten such fact, some courts deny his right to relief on the ground of mistake.1 . Thus forg...

Sec. 255. Change Of Position: If the adversary party has changed his position in reliance upon the contract, the party who made such mistake can not avoid the transaction.1 If A, who is B's creditor, by reason of his mistake as to...

Sec. 256. Mutuality Of Mistake: It is often said that mistake' must be mutual, which seems to mean that both parties must make the same mistake, or one must make it and the other must know and take advantage of it. Like many other g...

Sec. 257. Materiality Of Mistake: Whatever the relation of the mistake to the contract, if it concerns a matter which is not material thereto, no relief is given on the ground of mistake.1 In order to render a contract void, the mista...

Sec. 258. Mistake As To Rates Fixed By Statute: If the price of certain service is fixed by law, and the parties have no power to modify such rate by contract, a contract by which a different rate is fixed is inoperative, even if it was entered int...

Sec. 259. Materiality Of Mistake As To Adversary Party: If the identity of the adversary party is not material, mistake therein does not affect the validity of the contract.1 Thus where A was ready to contract with anyone having authority to lease a certai...

Sec. 260. Mistake As To Identity Of Adversary Party: If the identity of the adversary party is material, no contract exists where one party to the contract is mistaken as to the identity of such adversary party.1 4Veasey v. Carson, 177 Mass. 117, 53 L....

Sec. 261. Mistake As To Existence Of Subject-Matter Or Consideration: If the parties to a contract enter into it under the belief that the subject-matter or consideration is in existence, and in effect condition their contract thereon, no contract exists if the subject-...

Sec. 262. Mistake Or Misunderstanding As To Identity Of Subject-Matter Or Consideration: If A makes an offer to B concerning a given subject-matter, X; and B understands that A is making an offer concerning Y, and accepts the offer concerning Y, no contract exists.1 Where A, an auctioneer...

Sec. 263. Mistake As To Area: A considerable deficiency in area has been treated as a mistake which will justify rescission, or will be a good defense against specific performance,1 as where the con- 7 Chapman v. Cole, 78 Mass. (...

Sec. 264. Ambiguous Offer: If the parties enter into a contract which is fairly susceptible of two meanings, and one of the parties places one of such meanings upon the contract while the other party places the other meaning th...

Sec. 265. Mistake In Duplicates Of Written Contract: If the only contract between the parties is one in writing, which is to be prepared in duplicate, and by mistake there is a substantial difference between the two versions of the contract which are se...

Sec. 266. Offer Using Words Not Intended: If A makes an offer to B, in which A uses words which he does not intend to use and which give to the offer a different legal operation from that which A intended, B's acceptance in ignorance of A's m...

Sec. 267. Mistake In Transmission By Telegraph: If the offeror makes an offer by telegram and his offer is transmitted incorrectly, a question arises as to whether he is bound by its acceptance in the altered form. Some courts hold that for this pu...

Sec. 268. Offer Using Words Intended, But Concerning Subject-Matter Not Intended: If the offeror makes use of the language in his offer which he intends to use, but he has in mind a subject-matter different from that which his offer indicates, relief against 7 McKee v. Western Uni...

Sec. 269. Miscalculations: In most jurisdictions, an offer which contains the words which the offeror means it to contain, but which he makes because of a mistake in computation, becomes a contract on acceptance by the offeree ...

Sec. 270. Mistake As To Contents Of Written Contract: If the contract is in writing and a party who has signed it wishes to avoid liability thereon on the ground that he did not know its contents, the question, in the absence of misrepresentation, fraud,...

Sec. 271. Negligence As Affecting Mistake In Execution: On the other hand, if he can read or is otherwise guilty of negligence in not informing himself as to the contents of the written contract, and signs or accepts it with full opportunity of informing h...

Negligence As Affecting Mistake In Execution. Continued: Pennsylvania. Pennsylvania R. R. v. Shay, 82 Pa. St. 198; Weller'e Appeal, 103 Pa. St. 594; United States Horseshoe Co. v. American Express Co., 250 Pa. St. 527, 95 Atl. 706. South Carolina. Sloan v....

Sec. 272. Excuses For Omission To Read: If the party, who is mistaken as to the contents of the instrument, can not read at all,1 or can not read the language in which the instrument is written,2 or is practically blind,3 or he can not read...

Sec. 273. Mistake As To Legal Effect: If one reads the contract, or has it read to him, and misinterprets its meaning, he is bound thereby if the contract is unambiguous and if the adversary party does not know of such mistake,1 even if p...

Sec. 274. Misunderstanding As To Terms - Oral Contract: If A makes an offer in certain terms, and B, through a misunderstanding as to A's offer, accepts terms different from those offered, it is held in many jurisdictions that no contract exists, although ...

Sec. 275. Effect Of Negligence Other Than In Execution: Some courts lay it down as a broad principle that one who enters into a contract under mistake of fact due to his own negligence, concerning which he could with reasonable diligence have learned the t...

Sec. 276. Ratification And Laches: A contract entered into under mistake as to an essential element is, properly speaking, void. At the same time courts sometimes speak of ratifying it. Strictly speaking, this is a contradiction in ter...

Sec. 277. Nature Of Relief: If mistake is operative at law it prevents the formation of a contract.1 In granting rescission on the ground of mistake, equity proceeds upon the theory that there is a contract, but that equity may...

Sec. 278. Bights Arising On Performance: Upon rescission for mistake the party who has performed in part may recover the value of his performance.1 If the parties believe that they have entered into a contract, but by reason of mistake no va...

Chapter X. Non-Disclosure As To Essential Element Of Contract: Sec. 279. Effect of non-disclosure. Sec. 280. Advantage taken of known mistake. ...

Sec. 279. Effect Of Non-Disclosure: If A is mistaken as to an essential element of a contract, and B, the adversary party, knows of such mistake and does not correct it, no contract exists.1 If the vendor believes .that his estate in ce...

Sec. 280. Advantage Taken Of Known Mistake: If the offeree knows that the terms of the offer do not express the real intention of the offeror, and the offeree seeks to take advantage of such mistake by accepting the offer, the offeree can not b...

Advantage Taken Of Known Mistake. Continued: New York. Smith v. Mackin, 4 Lans. (N. Y.) 41. Ohio. Butler v. Moses, 43 O. S. 166, 1 N. E. 316. (Where, by a clerical mis-take of a stenographer, an offer of potatoes was made at 35 instead of 55.) ...

Chapter XI. Fraud In The Inducement: I. REPRESENTATIONS 281. Fraud in the inducement - False representation. Sec. 282. Form of false representation. Sec. 283. Fraud committed by acts. Sec. 284. Active concealment. Sec. 285. Partial ...

Sec. 281. Fraud In The Inducement - False Representation: Fraud in the inducement exists where the defrauded party understands the identity of the adversary party, the consideration, the subject-matter, and the terms of the contract; and he is willing to ent...

Sec. 282. Form Of False Representations: The form in which such representation is made is immaterial.1 It may consist of actual false statements,2 of statements partly true, but so framed as to mislead,3 or of either words or conduct which p...

Sec. 283. Fraud Committed By Acts: Fraud may be committed as well by acts as by express words.1 Many of the cases illustrating this principle are also examples of active concealment.2 Any conduct intended to deceive may be fraud if the...

Sec. 284. Active Concealment: Active concealment of material facts, as distinguished from innocent non-disclosure, amounts to fraud.1 Thus fraud was held to exist where a judgment of over seven thousand dollars was bought for four...

Sec. 285. Partial Disclosure: Even where disclosure is not required, a partial disclosure in such form as to mislead the party to whom it is made constitutes fraud.1 Thus a disclosure to a vendee of stock, of the names of existing...

Sec. 286. Fraud Affecting Written Contracts: Fraud consisting of oral misrepresentations may avoid a contract in writing,1 including 3 Coles v. Kennedy, 81 Ia. 360, 25 Am. St. Rep. 503, 48 N. W. 1088. 4 Manley v. Carl. 11 Ohio C. D. 1. 5 EIle...

Sec. 287. Fraud Affecting Contracts Within The Statute Of Frauds: Even if the contract is one which by the statute of frauds must be in writing, or some note or memorandum thereof must be in writing, oral misrepresentations if containing the other requisite elements...

Sec. 288. Representations As A Credit Of Third Person - Statute Of Frauds: A false representation as to the credit, character, and the like, of a third person is not within that clause of the statute of frauds which refers to contracts to answer for the debt, default or mis...

Sec. 289. Special Statutory Provisions As To Fraudulent Representations: The legislatures of England and of many of the states of the Union have enacted statutes which prevent recovery for fraudulent representations as to the credit of another person, which are made with t...

Sec. 290. Material Fact - What Is Fact: The second question to consider in discussing the elements of fraud is what is a material fact. The false representation must be of a fact,1 as distinguished from statements, such as opinions and prom...

Material Fact - What Is Fact. Continued: 19 Oakes v. Milter, 11 Colo. App. 374, 55 Ac. 193. 20 Tracy v. Smith, 175 Cal. 161, 165 Ac. 535. 21 Coon v. Atwell, 46 N. H. 510. 22 Mitchell v. Coteman, 127 Ark. 373, 192 S. W. 231; Rumbaugh v. Se...

Sec. 291. Opinions: Many statements are made on which persons in practical life rely, on which they have no right in law to rely, since they are not statements of facts. Where a statement is merely a conclusion from fact...

Sec. 292. Fact Stated As Opinion: Express disclaimer of knowledge by the party making the representation shows that it is an expression of opinion only.1 If the owner of land does not know the location of one of the corners of such tr...

Sec. 293. Opinions Involving Material Facts: A statement which by itself might be a mere expression of opinion may be so connected with a statement of a material fact as to amount to fraud. A statement of value involving and coupled with a state...

Sec. 294. Predictions: A statement as to what will happen in the future is clearly a matter of opinion, not of fact.1 A statement that the capitol would be located near the realty which was offered for sale,2 or as to the p...

Sec. 295. Promises: A promise to do an act in the future may or may not be a contract for the breach of which damages can be recovered, but mere non-performance is not fraud.1 Thus a promise 13 Kelly v. Gould, 141 N. Y....

Promises. Continued: 62 Minn. 265, 64 N. W. 816, and Bee Jorden v. Money, 5 H. L. Cas. 185. 3 Harrington v. Rutherford, 38 Fla. 321, 21 So. 283; Haenni v. Bleisch, 146 111. 262, 34 N. E. 153. 4 Chicago, etc., Co. v. Tit...

Sec. 296. Promise Coupled With Statement Of Fact: If a material fact is misrepresented, the addition of a promise to such misrepresentation does not prevent it from being fraud, if the other elements of fraud exist.1 Thus a false statement as to pres...

Sec. 297. Breach Of Contract Amounting To Constructive Trust: If the circumstances are such as to create an implied trust, a breach of a contract to carry out such trust is often called fraud in equity.1 In such cases, however, the fraud is really the failure to...

Sec. 298. Promise Made Without Intention Of Keeping It - Promise Treated As Fraud: Where the promise is made without any intent on promisor's part to keep it, but to induce action on the part of promisee, it is held in many jurisdictions to be fraud,1 on the theory Washington. Clut...

Promise Made Without Intention Of Keeping It - Promise Treated As Fraud. Continued: West Virginia. Martin v. South Bluefield Land Co., 81 W. Va. 62, 94 S. E. 493. 2 Old Colony Trust Co. v. Traction Co., 89 Fed. 794; Langley v. Rodriguez, 122 Cal. 580, 55 Ac. 406; Nelson v. Berkner, ...

Sec. 299. Promise Not Treated As Fraud: Some courts, however, hold that a promise, even when made without the intention of keeping it and even if material, can not be fraud if the damage results solely from non-performance, as the essential...

Sec. 300. Threat Without Intention Of Keeping It: In some cases the principle that a promise may amount to fraud made without the intention of performing it has been extended to statements as to the terms on which the adversary party will enter into ...

Sec. 301. Sales On Credit - Intent Not To Pay: An application of the doctrine that a promise made without the intention of keeping it may be fraud, is found in purchases of goods on credit. If one buys goods on credit, intending not to pay for the...

Sec. 302. Acceptance Of Deposit By Insolvent Bank: The acceptance of a deposit by a banking corporation when it is insolvent is fraudulent, since such bank can not intend to repay such deposit.1 The same principle applies where money is borrowed2 by a...

Sec. 303. Absence Of Reasonable Belief In Ability To Pay: If at the time that the goods are bought vendee's circumstances are such that he has no reasonable expectation of paying for them, and he buys on credit without disclosing his circumstances, this is h...

Sec. 304. Effect Of Reasonable Belief In Ability To Pay: If the financial situation of the purchaser is such as to justify his belief that he will be able to pay for the goods, his purchase on credit is not of itself fraud, although he is, in fact, insolven...

Sec. 305. Value - Parties On Equal Footing: Ordinarily when both parties stand on equal footing and the material facts are equally accessible to both, a statement as to the value of property must be known to be a mere matter of opinion and ther...

Sec. 306. Value - Parties Not On Equal Footing: A different result may follow where the parties do not stand on an equal footing. Statements as to value, or expressions of praise and commendation, may then amount to statements of fact.1 If one who ...

Value - Parties Not On Equal Footing. Continued: Illinois. Potter v. Potter, 65 111. App. . 74. Indiana. Miller v. Buchanan, 10 Ind. App. 474, 38 N. E. 56 [affirming on rehearing 10 Ind. App. 474, 37 N. E. 187]. Iowa. Teachout v. Van Hoesen, 76 la...

Sec. 308. Materiality: To constitute fraud the representation must be material.1 What representations are material is a question of law;2 and it is usually held that these are all representations which substantially affect ...

Sec. 309. Illustrations Of Material Representations: Examples of material representations are: statements to an insurance company, which is adjusting a loss, that there are no books which show the cost of the property destroyed;1 that an insurance compa...

Illustrations Of Material Representations. Continued: 12 Severson v. Kock, 159 la. 343, 140 N. W. 220. 13 Allen v. Talbot, 170 Mich. 664, 137 N. W. 97. 14 Lancaster v. Richardson (Tex. Civ. App.), 45 S. W. 409; Carney v. Herbert, 44 W. Va. 30, 28 S. E....

Sec. 310. Illustrations Of Immaterial Representations: On the other hand, statements which can not be understood as influencing the conduct of the adversary party can not be deemed material.1-Thus a false statement as to the motive of the buyer2 or seller...

Sec. 311. Materiality Of Promise: Whether a promise is to be treated, in case of breach, as fraud or not, when material,1 if a promise concerns a matter which is not material, failure to perform such promise is not fraud.2 A misstatem...

Sec. 312. Falsity: To constitute fraud, the representation must be false when made.1 This is so obvious that the question is rarely considered specifically. Its chief importance is in cases where the representation is s...

Sec. 313. Knowledge Of Falsity: It is an essential element of fraud as distinguished from misrepresentation,1 that the party making such statement must do so knowing that it is false;2 or that he must make a positive statement as of...

Sec. 314. Statement As Of Personal Knowledge: The personal knowledge of the person who makes a statement may be a material fact. Accordingly, a false, positive statement made as of the personal knowledge of the person making it is fraud, even whe...

Sec. 315. Statement Of Facts Which It Is One's Duty To Know: Where a person makes representations as to matters which from his situation he should have known, or which it was his duty to know,1 as where officers of a corporation make statements concerning the a...

Sec. 316. Statement On Authority Disclosed: Fraud is not committed by one who innocently makes a false statement if he makes it not as of his own knowledge, but on authority which he then discloses.1 If, however, he knows the statement to be fa...

Sec. 317. Intent To Deceive: Intent to deceive is often said to be an element of actual fraud.1 If this form of statement is used, it must be noted that, though it may seem to involve an intent to do wrong, it does not necessaril...

Sec. 318. Statement Not Made To Party Deceived: Where the statement is not made directly to the person who acts thereon, a question of greater difficulty arises. As a general proposition it may be said that unless the person making the false statem...

Sec. 319. Statement Made To Deceive Public: A statement made to the public, intended to influence the action of anyone who may be deceived thereby, may amount to fraud.1 Thus fraud may be committed by issuing a statement or prospectus of the af...

Sec. 320. Statements To Commercial Agencies: Fraud may be committed by making false statements to a commercial agency for communication to those applying for information,1 or by referring others to an agency for a report, where, though such pers...

Sec. 321. Reliance On False Statement: To constitute fraud, the party alleging fraud must have believed such representations to be true, and so believing must have acted in reliance thereon.1 If, in fact, action is taken in reliance solely...

Reliance On False Statement. Part 2: Co. v. Reger, 168 Pa. St. 644, 32 Atl. 64; Bank v. Rhea County (Tenn. Ch. App.), 59 S. W. 442. Thus a representation made after a contract for a lease is made but before the lease is given is not frau...

Reliance On False Statement. Part 3: 24 Kiler v. Wohletz, 79 Kan. 716, L. R. A. 1915B, 11, 101 Ac. 474. 25 Aorora Land Co. v. Keevan, 67 Wash. 305. 121 Ac. 469. 26 Storthz v. Arnold, 74 Ark. 68, 84 S. W. 1036. 27 Simpson v. Crane, 149...

Sec. 323. Continuing Representations: If one party makes a representation on which he expects the other party to rely, the fact that the party who is deceived did not act for some time after such representation was made, does not prevent ...

Sec. 324. Effect Of Action Other Than That Intended: If the intent to deceive exists, but the action of the party deceived is different from that contemplated, fraud is, nevertheless, held to exist if the other elements thereof exist.1 Thus where the di...

Sec. 325. Necessity Of Sole Reliance On False Statement: If the false representation was material and influenced the party to whom it was made, it may constitute fraud, although the party acted as he did from several motives of which this was but one;1 as w...

Sec. 326. Duty Of Making Further Investigation: If the person to whom the false statements are made could, by such further investigation for himself as a prudent man would make, discover their falsity, he is negligent to some extent if he omits to ...

Sec. 327. Investigation Held Necessary - Comparison Of Doctrines: There are, however, many cases, some of them decided recently, in which the courts hold that where the facts are equally accessible to both parties, public policy demands that the law should require p...

Sec. 328. Right To Rely Where Means Of Knowledge Not Equal: Even the courts which adhere most rigidly to the rule that if the means of knowledge are equal, the party deceived is bound to use such means, recognize a class of cases which they refuse to define ex...

Sec. 329. Bight To Rely Where Parties Are In Confidential Relations: Where the parties are not on an equality, as where there are relations of trust and confidence,1 or where trust and confidence are actually reposed, although no technical relations of trust and confid...

Sec. 330. Effect Of Independent Investigation: If the person to whom the false statements are made does not rely on them, but investigates for himself and acts in reliance on his own knowledge, no fraud exists if the falsity of such representation...

Sec. 331. Effect Of Partial And Unsuccessful Investigation: If a partial investigation is made which from its nature can not and does not disclose the falsity of the statements made, and the original statement is relied on, as not being contradicted by such in...

Sec. 332. Effect Of Investigation Defeated By Fraud: If the party who makes the false representations prevents such investigation as would disclose the falsity of such statements by means of further deceit, a partial examination, or a total omission to ...

Sec. 333. Damage A Necessary Element Of Fraud: To constitute fraud the party deceived must act in reliance upon such false representations to his damage.1 Illustrations of action which does not result in damage and in which case therefore fraud do...

Sec. 334. Fraud In Contract Invalid In Any Event: If the contract entered into is unenforceable in any event, as where it is illegal,1 neither party can complain because he was induced to enter into it by fraud. So fraudulently inducing a conveyance ...

Sec. 335. Meaning Of "Damage" In Contract Law: The cases already given are for the most part actions at law for deceit. It seems clear on principle that one who wishes to recover damages must show damages. Whether the same rule applies where resci...

Sec. 336. By Whom False Representation Can Be Made: To constitute fraud, the false representation must be made by the party held liable therefor or his agent. A false statement made by a third person can not be treated as the fraud of a party to the co...

Sec. 337. Fraud Of Agent Acting For His Principal If The Party Making The Fraudulent Representations Is The Agent Of The Party Benefited Thereby,1 Or The Agent Of Both Parties,2 Or If A Party Ratifies The Contract Induced By Such Fraudulent Representations, Of One Acting As His Agent Without Authority,3 Or Knowingly Aids In The Commission Of The Fraud,4 Or Refers The Party Defrauded To The Person Making The False Statement For Information,5 He Is Liable As Though He Had Made The Representation In Person: The principal: may be liable for fraud though the agent is innocent, as where he authorizes the agent to make a statement but suppresses information which results in a false statement by the agent, co...

Sec. 338. Advantage Taken Of False Statement By Other Who Is Not Agent: If the party to a transaction takes advantage of a fraudulent statement made by a third person, knowing of such fraud, such transaction may be avoided, although no relation of agency exists.1 If X has...

Sec. 339. Election Of Remedies For Fraud: Fraud in the inducement affects the validity of the offer and acceptance which form the contract. It is also a tort. The injured party has a choice of the following remedies: (1) an action of deceit i...

Sec. 340. Action Of Deceit: The action of deceit lies against the person who makes the fraudulent representations.1 This action is entirely distinct from any rights connected with contract. It may be brought against one who is g...

Sec. 341. Effect On Contract Of Fraud In The Inducement: As affecting the validity of the contract, fraud in the inducement renders the contract voidable, not void.1 Such contract may be avoided by the defrauded party if he so wishes,2 but until it is avoid...

Sec. 342. Informal Rescission At Law - Recovery Of Value Of Performance: If a simple contract has been performed in whole or in part, the defrauded party may rescind informally and sue to recover what he has parted with under the contract or the value thereof.1 Where fraud...

Sec. 343. Defense To Executory Contract: If a simple contract is executory as to the liability of the defrauded party, he may avoid liability thereunder, and interpose the defense of fraud in an action brought against him on the contract at ...

Sec. 344. Compromise Or Release Obtained By Fraud: A compromise may be avoided for fraud.1 If a contract of compromise is not under seal, it may be avoided at law for fraud in the inducement without resorting to equity for rescission, and an action ma...

Sec. 345. Formal Rescission In Equity: Formal decrees of rescission and cancellation may be obtained in equity in cases where no plain, adequate and complete relief can be had at law.1 While the courts agree in this abstract statement of p...

Sec. 346. Rescission Of Contract Under Seal For Fraud In The Inducement - Common Law And Equity: A contract under seal was enforceable at common law by reason of the form of the transaction without any regard to the consideration therefor or to the inducement under which the obligor entered into ...

Sec. 347. Rescission Of Contract Under Seal For Fraud In The Inducement - Statutory Provisions: Under many codes of civil procedure it is now provided that equitable defenses may be interposed in actions at law. Under such statutes the defense of fraud may be interposed in an action at law on a ...

Sec. 348. Rescission In Equity Of Instrument Conveying Title To Realty: If the defrauded party has conveyed title to land by reason of fraud as to a collateral matter, he can not in most jurisdictions recover such land by an action at law, such as ejectment.1 His remedy, ...

Sec. 349. Rescission In Equity Of Negotiable Instrument: If the defrauded party has been induced to give a negotiable instrument by fraudulent representations as to collateral facts, he is not obliged to resort to equity, but he may wait until an action at ...

Sec. 350. Rescission In Equity Of Simple, Non-Negotiable Instrument: If the transaction into which the defrauded party has been induced to enter does not result in the transfer of title, or in the delivery of the sealed instrument, or in the delivery of the negotiable ...

Sec. 351. Evidence Of Fraud In Suit For Rescission: Rescission will not be granted in equity for fraud unless the evidence of such fraud is clear.1 In some cases the court has required a higher degree of proof,2 and in some cases the burden upon the pa...

Sec. 352. Duty To Place Adversary Party In Statu Quo: In order to rescind, whether informally or by formal decree in equity, the party who commits the fraud must be placed in statu quo by the party seeking relief.1 If a party who has been induced to ente...

Duty To Place Adversary Party In Statu Quo. Continued: The rule which requires that the guilty party should be placed in statu quo is equitable, and not technical.20 If the party who is guilty of the fraud is insolvent, the party who is defrauded is not ...

Sec. 353. Partial Rescission Impossible: A partial rescission of an entire contract can not be had. The contract must be valid or void in toto. This rule applies to informal rescission at law, or repudiation of liability under the contract.1...

Partial Rescission Impossible. Continued: 97 la. 719, 59 Am. St. Rep. 434, 66 N. W. 1059; Dorr v. Alford, 111 la. 278, 82 N. W. 789; Seeley v. Seeley -Howe-Le Van Co., 128 la. 294, 103 N. W. 961; Richards v. School Township, 132 la. 612, 109 ...

Sec. 355. What Amounts To Ratification - Operative Acts: Acts which never take effect, as signing and acknowledging a deed of assignment of partnership property, but withdrawing assent before delivery,1 or acts done under duress, as giving a purchase-money ...

Sec. 356. Knowledge Of Facts: In order that there may be ratification, the party who is defrauded must act with full knowledge of the facts.1 If A has obtained insurance by misrepresenting his age, and by misrepresentation as to t...

Sec. 357. Unequivocal Acts: The conduct which is relied upon as ratification must be conduct which shows unequivocally that the defrauded party intends to be bound by the contract which he was induced to enter into by fraud.1 If...

Sec. 358. Fair Opportunity To Avoid: If the fraud is not discovered until performance has begun, and if performance has progressed so far that it is not practicable to repudiate the contract, the continuance of performance with knowledge...

Sec. 359. Effect Of Ratification: If the defrauded party elects to ratify the contract, he can not rescind thereafter.1 Ratification prevents subsequent rescission, but on principle it should not waive the right of action for damages...

Sec. 360. Laches: Delay for an unreasonable time after the discovery of the fraud, may, without positive acts of ratification, amount to a waiver of the right to rescind.1 Thus, in equity, delay for such lengths of tim...

Sec. 361. Equitable Relief Refused To Party Equally Guilty: If the parties to a transaction have each tried to defraud the other, equity will not give relief to the less successful party, but will leave him to his rights at law.1 This principle applies where t...

Chaptee XII Misrepresentation In The Inducement: I. ELEMENTS Sec. 362. Elements of misrepresentation - Statement of fact. Sec. 363. Distinction between opinions and statements of fact. Sec. 364. Falsity. Sec. 365. Representation as to material ...

Sec. 362. Elements Of Misrepresentation - Statement Of Fact: The elements of innocent misrepresentation are substantially the same as those of fraud except that the party who makes such false statement is acting in good faith.1 The theory entertained in some ju...

Sec. 363. Distinction Between Opinions And Statements Of Fact: Statements which purport in part to be matters of opinion may involve statements of fact, and in such a case they are treated as misrepresentations.1 An estimate which is said to be approximate only m...

Sec. 364. Falsity: To constitute misrepresentation the statement must be false. If substantially true, there is no misrepresentation.1 Thus where an insured represented that he had not been rejected by any life insuranc...

Sec. 365. Representation As To Material Fact: Wherever misrepresentation is operative, misrepresentation as to a material fact invalidates the contract. In insurance contracts a misrepresentation, even in good faith, of a material fact,1 such as ...

Sec. 366. Representation As To Immaterial Fact: On the other hand, misrepresentation as to an immaterial fact has no legal effect.1 13 Goff v. Mutual Life Ins. Co., 131 La. 98, 59 So. 28. See Sec. 222. 14 Williams v. St. Louis Life Ins. Co., 189 ...

Sec. 367. Representation Must Mislead: The party to whom the misrepresentation is made must believe such statement to be true, and must act in reliance on such belief. If the person to whom the representation is made is informed of the fac...

Sec. 368. Damage: The proposition that damage is a necessary element of misrepresentation means nothing more than this: that the party seeking relief must, by reason of the misrepresentation, 11 Mt. Hope Nurseries Co....

Sec. 369. Illustrations Of Innocent Misrepresentation At Modern Law: An innocent misrepresentation as to the amount of timber on realty conveyed;1 or as to the extent of physical injuries;2 or that certain barrels leaked even when properly glued inside;3 or as to the e...

Sec. 370. By Whom Misrepresentation May Be Made: To be operative a misrepresentation must be made by the party against whom relief is sought, or by some one acting on his behalf or to whom he made such representations for the purpose of having them ...

Sec. 371. Original Common-Law Rule - Damages: At common law, as uninfluenced by equity, the original rule seems to have been that misrepresentation which did not affect the formation of the contract and was not made a term thereof had no effect o...

Sec. 372. Original Common-Law Rule - Informal Rescission At Law: The original common-law rule was that an innocent misrepresentation was no ground for repudiating liability on an executory contract nor for informally rescinding a contract during performance or afte...

Sec. 373. Special Types Of Contract - Insurance: Even where the rule that innocent misrepresentation does not avoid a contract was most rigidly adhered to at common law, there were two great classes of exceptions thereto: one class of contracts bein...

Sec. 374. Suretyship: There is a conflict of authority upon the question whether an innocent misrepresentation by an obligee to a surety avoids a contract of suretyship which is induced by such misrepresentation. In some j...

Sec. 375. The Rule In Equity: In equity the weight of authority is that one who is induced to enter into a contract by misrepresentation of a material fact may avoid liability on such contract, and in a proper case may have rescis...

Sec. 376. Effect Of Equity On The Common-Law Rule: The combined effect of the equity rule allowing rescission for a material misrepresentation, and the authority of the common-law courts which treat misrepresentation as fraud, is gradually establishin...

Sec. 377. Theories Upon Which Relief Is Granted: In many of these cases the court bases its result on the theory of innocent misrepresentation.1 At common law the misrepresentation of a material false, though innocent, misrepresentations respecting...

Sec. 378. Ratification And Waiver: If the person to whom a misrepresentation as to a collateral fact is made subsequently learns the truth- and with full knowledge of the facts elects not to rescind, he thereby waives his right to resc...

Chapter XIII. Mistake In The Inducement: 1370. Mistake as to identity distinguished from mistake as to quality. {380. Mistake as to duration of estate. {381. Distinction between identity and quality in releases. { 382. Mistake as to ...

Sec. 379. Mistake As To Identity Distinguished From Mistake As To Quality: If mistake as to identity of subject-matter prevents the contract from coming into existence, while mistake as to quality or characteristic is not operative, the distinction between these two classes ...

Sec. 380. Mistake As To Duration Of Estate: Equity will give rescission for a mutual mistake of the parties to a deed concerning the extent of grantor's undivided interest in the land conveyed,1 or for a mistake as to the extent of an estate in...

Sec. 381. Distinction Between Identity And Quality In Releases: A release made in ignorance of the existence of a claim is void as to such claim.1 A mistake of the parties as to the actual extent of injuries, or a misrepresentation by the agent of the party who ha...

Sec. 382. Mistake As To Quality Or Characteristic Of Adversary Party: A mistake as to a quality or characteristic of the adversary party can not be treated as a mistake as to identity, so as to render the contract invalid.1 A mistake as to the race or nationality of the...

Sec. 383. Offer Made Under Mistake As To Quality Or Characteristic: The general rules on the subject of this class of mistake are subject to the following qualifications: Every sane person is held to intend the legal consequences of his voluntary acts. Accordingly, if...

Sec. 384. Effect Of Mistake On Inducement: Mistake in the inducement exists, as we have seen,1 when one party enters into a contract with full knowledge of the existence and identity of the essential elements thereof, namely, the adversary par...

Effect Of Mistake On Inducement. Continued: 15 McManus v. Fortescue [1907], 2 K. B. 1. 16 Stewart v. Ticonic National Bank, 104 Me. 578, 72 Atl. 741. 17 Marx v. Kilby Locomotive & Machine Works, 162 Ala. 295, 136 Am. St. Rep. 24, 50 So. 136. ...

Chapter XIV. Non-Disclosure In The Inducement: Sec. 385. Non-disclosure not operative in absence of special circumstances. Sec. 386. Theory that full disclosure is necessary. Sec. 387. Special duty to disclose facts. Sec. 388. Insurance. Sec. ...

Sec. 385. Non-Disclosure Not Operative In Absence Of Special Circumstances: According to the weight of authority the mere omission by one party to disclose facts material to the contract, which are known to him and not to the adversary party does not, in the absence of specia...

Sec. 386. Theory That Full Disclosure Is Necessary: In some jurisdictions it is said to be the duty of a party to a contract to correct any material mistake made by the other and known to him.1 Good faith, bona fides, should be as much an essential pa...

Sec. 387. Special Duty To Disclose Facts: It is often said that wherever there is a duty to disclose the material facts, non-disclosure constitutes fraud. This proposition is eminently safe, but not very helpful, unless we know what circumsta...

Sec. 388. Insurance: In England insurance contracts are held to be avoided if the insured does not make a full disclosure to the insurer of all material facts known to the insured. This principle applies in England to mar...

Sec. 389. Suretyship: To what extent a contract of suretyship is uberrima fidei with reference to non-disclosure is a question upon which there is a conflict of authority. Some courts hold that when a contract of suretyshi...

Sec. 390. Non-Disclosure Coupled With Fraud: The rule that nondisclosure is not fraud is not a technical one. If the concealment is coupled with a false representation, fraud exists, even if the concealment was really the operative factor in the...

Sec. 391. Duty To Disclose Subsequent Change Of Fact: If one has made statements, which were true when made, and a material change takes place,1 as a change for the worse in financial condition,2 or impairment in value of a trade-mark,3 or a change in th...

Sec. 392. Effect Of The Doctrine Of Implied Warranties - Personalty: The rule that disclosure is not necessary except in special cases is modified greatly in its practical operation by the doctrine of implied warranties. In contracts of sale the vendor is, in the absen...

Effect Of The Doctrine Of Implied Warranties - Personalty. Part 2: Illinois. Wiedeman v. Keller, 171 111. 93, 49 N. E. 210 [reversing 58 111. App. 382]. Kansas. Parks v. C. C. Yost Pie Co., 93 Kan. 334, L. R. A. 1915C, 179, 144 Pac. 202. New York. Race v. Krum, 222...

Effect Of The Doctrine Of Implied Warranties - Personalty. Part 3: 18Lunsford v. Malsby, 101 Ga. 39, 28 S. E. 496. 19Delaware. Love v. Mfg. Co., 3 Penn. (Del.) 152, 50 Atl. 536. Iowa. Myer v. Wheeler, 65 la. 390, 21 N. W. 692. Massachusetts. Gascoigne v. Cary Bric...

Sec. 393. Implied Warranties - Realty: It is an implied term of an executory contract for the sale of realty that the title is good.1 Arkansas. Yellow Jacket Mining Co. v. Tegarden, 104 Ark. 573, 149 S. W. 518. Massachusetts. Morley v. C...

Chapter XV. Fraud, Misrepresentation, Mistake And Non-Disclosure As To Matter Of Law: Sec. 394. Fraudulent misrepresentation of domestic law. Sec. 305. Fiduciary relations - Representation, of law. Sec. 396. Representations involving law and fact. Sec. 307. Representations of foreig...

Sec. 394. Fraudulent Misrepresentation Of Domestic Law: False statements as to the existence or effect of a rule of domestic law, applicable to and affecting the rights of the parties, do not constitute fraud at law; nor in equity in many jurisdictions.1 T...

Sec. 395. Fiduciary Relations - Representation Of Law: If the parties are in fiduciary relations in which actual trust and confidence is reposed,1 such as attorney and client,2 step-mother and step-son,3 or persons about to inter-marry,4 so that one of th...

Sec. 396. Representations Involving Law And Fact: If the material facts are not known to the party to whom the false representations of law are made, a statement may be in such form as to involve not only law, but fact as well, and may accordingly be...

Sec. 397. Representations Of Foreign Law: The foregoing propositions apply to representations of domestic law only. In fraud, as generally, foreign law is treated as a fact, and a misstatement thereof may be fraud,1 as where one is induced th...

Sec. 398. Distinction Between Foreign Law And Domestic Law: By foreign law in this sense is meant law that is foreign to the law of the domicile of the party who makes such mistake or to whom a misrepresentation of law has been made.1 The law of the domicil...

Sec. 399. Innocent Misrepresentation Of Law: The general rule is that no relief can be given for innocent misrepresentation of law.1 Thus when A sold to B certain municipal bonds, representing that they were valid, the material facts being known...

Sec. 400. Mistake Of Law: A mistake of law happens when a party having full knowledge of the facts, comes to an erroneous conclusion as to their legal effect.1 Whether relief of any sort should be given for a mistake of law...

Mistake Of Law. Part 2: 12Naylor v. Winch 1 Sim & Stu. 555. If a Party, acting in ignorance of a plain and settled principle of Law, is induced to give up a portion of his indisputable Property to another under the name of...

Mistake Of Law. Part 3: Under some statutory provisions, relief may be given in equity against an honest mistake of law as to the effect of the instrument on the part of both contracting parties if such mistake operates as a...

Mistake Of Law. Part 4: 1 England. Cooper v. Phibbs, L. R. 2 H. L. 149; Bingham v. Bingham, 1 Ves. Sr. 12(5; Cocking v. Pratt, 1 Ves. Sr. 400; Townshend v. Stangroom, 6 Ves. Jr. 328; Broughton v. Hutt, 3 DeG. & J. 501; Pusey...

Sec. 402. Mistake Of Law Causing Gratuitous Promise: There are, however, some exceptions to the general rule, on which the authorities are in substantial accord. If A is not in fact liable at all to B, a promise to pay made under mistake as to his liabi...

Sec. 404. Mistake As To Foreign Law: A mistake as to a rule of foreign law is always treated as a mistake of fact.1 The question of what law is to be treated as foreign and what as domestic has been considered in connection with misrepre...

Chapter XVI. Constructive Fraud: I. NATURE Sec. 405. Nature of constructive fraud. II. RELATIONS UNDER WHICH CONSTRUCTIVE FRAUD MAY EXIST Sec. 406. Constructive fraud limited to relations of trust and confidence. Sec. 407. Non-di...

Sec. 405. Nature Of Constructive Fraud: It is difficult to frame a definition of constructive fraud which will at once be accurate and include all that the legal concept embraces. The rules of constructive fraud have been developed by court...

Sec. 406. Constructive Fraud Limited To Relations Of Trust And Confidence: The definition of constructive fraud here given includes a special relation between the parties to the contract as an essential element. Probably constructive fraud in the accurate sense of the term d...

Sec. 407. Non-Disclosure In General As Constructive Fraud: The difference between actual and constructive fraud can be seen best by considering the elements of actual fraud and observing which of them are non-essential in constructive fraud. Thus an active mi...

Sec. 408. Principal And Agent: The elements of constructive fraud may best be understood from a discussion of their applications to the particular relations existing between the parties. An agent who makes a contract on his princip...

Sec. 409. Attorney And Client: An attorney in dealing with his client must make a full and fair disclosure of all material facts.1 If the transaction is advantageous for the attorney, he has the burden of showing that full disclosu...

Sec. 410. Directors And Officers Of Private Corporations - Transactions With Corporations: Directors occupy a relation of trust and confidence towards the corporation,1 and their position, as well as 27 Stieglitz v. Settle, 175 Cal. 131, 165 Pac. 436. 28Ah Foe v. Bennett, 35 Or. 231, 58 P...

Directors And Officers Of Private Corporations - Transactions With Corporations. Continued: Massachusetts. Union Pacific Ry. v. Credit Mobilier, 135 Mass. 367. Michigan. Reynick v. Allington & Curtis Mfg. Co., 179 Mich. 630, 146 N. W. 252. Minnesota. Minnesota Loan & Trust Co. v. Peteler C...

Sec. 411. Transactions With Stockholders: The relation of trust and confidence between officers or directors on the one hand, and stockholders on the other, exists only with reference to the management and control of the corporation.1 Thus if...

Sec. 412. Officers Of Public Corporations - Transactions With Corporations: In the absence of statute the validity of a contract between a municipality or other public corporation and an officer thereof depends first on whether such officer is avowedly contracting in his own ...

Sec. 413. Special Statutory Provisions: In many states the question as to the effect of a contract between a public corporation and one of its officers is settled by statute making a contract with a public or quasi-public corporation unlawf...

Sec. 414. Contract Between Public Corporation And Private Corporation Of Which Public Officer Is Stockholder: By some statutes, a corporation the stockholders of which are city officials can not contract with such city.1 A statute which forbids a public officer to have any interest in a public contract, or wh...

Sec. 415. Contract Between Chief Contractor And Public Officer: Whether a transaction between a public contractor and one who is a public officer is within the scope of statutes which forbid a public officer to have an interest in a public contract, is a question ...

Sec. 416. Contracts Between Corporations Having Common Officers: While a contract requires two parties, the theory of the separate existence of a corporation distinct from its members and officers makes it possible for a valid contract to be made between two corpor...

Sec. 417. Promoters Of Corporations: Promoters of corporations stand in a relation of trust and confidence to the corporation and to the stockholders thereof.1 If promoters wish to sell their property to the corporation promoted by them,...

Sec. 418. Partners: Partners occupy a relation of especial trust and confidence towards each other with reference to partnership matters.1 In dealing with each other with reference to partnership matters, each must make ...

Sec. 419. Co-Owners: Limitations of some sort, are imposed upon the power of a co-tenant to acquire an interest, adverse to that of the remaining co-tenants so as to exclude them from the property in which their interests...

Co-Owners. Continued: In some jurisdictions the rule only forbids a co-tenant to acquire an outstanding adverse title or encumbrance for his own benefit; and the adverse title or encumbrance seems to be regarded as one whi...

Sec. 420. Guardian And Ward: A guardian occupies relations of trust and confidence towards his ward.1 During the continuance of the guardianship contracts between guardian and ward are voidable at the ward's election because of h...

Sec. 421. Trustees: A trustee can not, without the consent of the beneficiaries, or the court, acquire an interest in the trust property. If he attempts to do so without disclosing his identity and obtaining their consen...

Sec. 422. Executors And Administrators: An executor or administrator who buys property of the estate at his own sale, without the consent of the persons beneficially interested therein and without disclosing his identity to them, is guilty ...

Sec. 423. Husband And Wife: Husband and wife occupy mutual relations of trust and confidence.1 Neither of them can make a secret profit or gain a separate advantage out of transactions between them without the consent of the oth...

Sec. 424. Persons Under Contract To Inter-Marry: Persons under contract to inter-marry stand in confidential relations to each other.1 Transactions between them will be scrutinized closely.2 They must ordinarily make full disclosure to each other of...

Sec. 425. Parent And Child: The relation of parent and child is one of trust and confidence. Transactions between parents and children but slightly past the age of majority are sharply scrutinized by the courts.1 Such contract, ...

Sec. 427. Debtor And Creditor: No relations of trust and confidence exist between debtor and creditor as such. Hence omission by a debtor whose debt was payable when a specified claim is collected, to disclose the fact that such cl...

Sec. 428. Actual Trust And Confidence: It is not necessary, however, that any technical relations of trust should exist to make concealment operate as fraud. If confidence is in fact known to both parties to be reposed,1 as where one is th...

Sec. 429. Opinions: Matters of opinion can not be the basis of false statements in actual fraud. Between persons occupying relations of trust and confidence, a false statement as to matters of opinion may constitute cons...

Sec. 430. Price: In some jurisdictions a statement of the price paid for an article is held not to be such a statement of fact as can amount to actual fraud. Between persons in confidential relations a false statement...

Sec. 431. Value: A statement as to value, as distinguished from price, is very generally held to be a mere expression of opinion. As between persons in confidential relations, however, an expression of opinion as to v...

Sec. 432. False Statement Of Law: A statement as to a matter of law is ordinarily not such a statement of fact as amounts to actual fraud. Between persons in confidential relations, however, a false statement as to a matter of law may...

Sec. 433. Mistake Or Fraud In The Execution: In some jurisdictions a person who signs a written instrument in ignorance of its contents, but with an opportunity to read it and without reasonable excuse for omitting to read it, can not avoid the ...

Sec. 434. Breach Of Contract: A breach of contract is ordinarily not fraud.1 Between persons in confidential relations, if the contract is one of the means whereby the particular confidence is obtained and the breach the means whe...

Sec. 435. Remedies: Equity will relieve against constructive fraud.1 It will hold the party who obtained an unfair advantage by means of such fraud as trustee for the party of whom advantage was taken.2 The defense of c...

Chapter XVII. Undue Influence: I. DEFINITION AND NATURE Sec. 436. Definition of undue influence. Sec. 437. Nature of undue influence. Sec. 438. Classes of undue influence. II. ELEMENTS Sec. 439. Some influence must exist. Sec. 4...

Sec. 436. Definition Of Undue Influence: Undue influence is such influence as overpowers the will of the party upon whom such influence is exerted, and substitutes therefor the will of the party who exerts such influence.1 In discussing undu...

Sec. 437. Nature Of Undue Influence: It has become the established doctrine, according to the weight of authority at modern law, that the test for duress is not whether a courageous man, or even a man of ordinary firmness, would have bee...

Sec. 438. Classes Of Undue Influence: Undue influence may be presumed where the evidence shows that the parties to the transaction occupied certain confidential relations.1 Other facts may strengthen this presumption, or, existing in comb...

Sec. 439. Some Influence Must Exist: To constitute undue influence, there must be influence of some sort exerted upon the person who seeks relief.1 In the absence of influence exerted by another, undue influence can not be said to exist....

Sec. 441. Relation Of Undue Influence To Duress: Undue influence has been said to consist of compulsion insufficient to constitute technical duress,1 The same idea, differently expressed, is that duress is but the extreme of undue influence.,2 Und...

Sec. 442. Relation Of Undue Influence To Fraud: Undue influence has, on the other hand, been classed as a species of fraud.1 So it has been said to be not fraud, but like fraud.2 The type of fraud referred to is, of course, constructive fraud and...

Sec. 443. Undue Influence A Question Of Fact: Whether undue influence exists in a particular case is a question of fact.1 Accordingly, many cases exist in which similar facts as to the compulsion used, the situation of the parties and the like, p...

Sec. 444. Burden Of Proof: If the parties to a transaction do not occupy relations of trust and confidence, there is no presumption of undue influence;1 and the burden of proof rests upon the party who claims existence of undue...

Sec. 445. By Whom Undue Influence May Be Exerted: In most of the cases arising under undue influence the influence is exerted by the party who receives the benefit of the transaction. It is not necessary, however, that a personal advantage should be ...

Sec. 446. Presumptions Of Undue Influence: Undue influence is said, in most jurisdictions, to be presumed in transactions between persons in confidential relations whereby an advantage is gained by the person who holds the dominating situation...

Sec. 447. Illustrations Of Confidential Relations - Parent And Child: A transaction between parent and child, resulting in a benefit to the parent, creates a presumption of undue influence.1 The Supreme Court of the United States has held, contrary to the weight of auth...

Sec. 448. Ancestor And Heir: Somewhat similar principles apply to conveyances to apparent heirs. Thus a conveyance to a nephew or niece will raise a presumption of undue influence on the part of the nephew or niece, if such trans...

Sec. 449. Other Relationships By Blood: Relationship by blood does not, of itself, raise a presumption of undue influence.1 The fact that the parties to a transaction are brothers does not of itself raise a presumption of undue influence.2 ...

Sec. 450. Guardian And Ward: A presumption of undue influence arises in transactions between guardian and ward, even after the ward has attained legal caPac.ity, if such transactions result in benefit to the guardian;1 and this p...

Sec. 451. Husband And Wife: In most jurisdictions, a transaction between a husband and wife which results in a benefit to the husband, creates a presumption of undue influence.1 In other jurisdictions, however, it has been said ...

Sec. 453. Principal And Agent: A transaction between principal and agent, if advantageous to the agent, will be scrutinized closely.1 It is said., however, that no presumption of influence arises in a case of a transaction with one...

Sec. 454. Attorney And Client: A transaction between attorney and client, resulting in a benefit to the attorney, creates a presumption of undue influence.1 A conveyance by an ignorant and uneducated client to her attorney passing ...

Sec. 455. Physician And Patient: A transaction between physician and patient resulting in benefit to the physician creates a presumption of undue influence.1 It will be scrutinized carefully.2 The burden is upon the physician to show...

Sec. 456. Religious Advisers: A transaction between a religious adviser and a member of his parish or congregation advantageous to such adviser is generally held to be presumptively due to undue influence.1 A transaction between a...

Sec. 457. Actual Confidence Without Technical Relation: Trust and confidence may in fact exist though the parties occupy no technical relations to each other.1 One partner may, in fact, repose actual trust and confidence in the other.2 Between persons in s...

Sec. 458. Other Relations: No presumption of undue influence arises where a relation of trust and confidence had once existed between the parties, but such relation had been dissolved for a considerable period of time.1 A conve...

Sec. 459. Confidential Relationship And Weakness Of Mind: The question of undue influence between persons in confidential relations is rarely settled by the bare presumption arising out of such relations. Additional facts either strengthen or rebut the presu...

Sec. 460. Confidential Relationship And Misrepresentation: In addition to a confidential relationship between the parties, the further fact of a misstatement, even if not amounting to technical fraud, or the additional fact of circumstances of oppression, not...

Sec. 461. Confidential Relationship And Non-Disclosure: In addition to the foregoing facts, the further fact that the party holding the dominating position in the confidential relation has failed to make disclosure of the material facts, still further stre...

Sec. 462. Weakness Of Mind: One who is weak mentally and physically may be more subject to undue influence than one who is strong and well.1 If the party seeking relief is weak mentally, the transaction of which he complains wil...

Sec. 463. Weakness Of Mind And Misrepresentation: Weakness of mind, together with misstatement, even if not amounting to technical fraud,1 such as a representation by a third person acting in collusion with the grantee that her brother would buy the ...

Sec. 464. Misrepresentation Of Law And Actual Influence: A misrepresentation of law is not ordinarily treated as technical fraud.1 6 Kelly v. Chicago, R. I. & P. Ry. Co., 138 la. 273, 114 N. W. 536. 7 Sprinkle v. Wellborn, 140 N. Car. 163, 52 S. E. 666; B...

Sec. 465. Inadequacy Of Consideration: What amounts to inadequacy of consideration, and what is the effect of inadequacy of consideration, when it is found to exist, are questions which are discussed in connection with the topic of conside...

Sec. 466. Inadequacy Of Consideration In Combination With Other Facts: Inadequacy of consideration is therefore, except in its most extreme forms, merely a circumstance among others to be used in determining whether fraud or undue influence exists.1 Among the facts which...

Sec. 467. Confidential Relationship And Inadequacy Of Consideration: In transactions between persons in confidential relations, where an advantage is taken by the person holding the dominating situation, the fact of inadequacy of consideration, even in the absence of a...

Sec. 468. Inadequacy Of Consideration And Circumstances Of Oppression: Inadequacy of consideration may be found in connection with circumstances of oppression which do not amount to technical duress; and the combination may justify a finding of undue influence.1 Thus a t...

Sec. 469. Inadequacy Of Consideration And Unfair Dealing: Inadequacy of consideration, together with circumstances of unfair dealing not amounting to technical fraud, may establish undue influence.1 A deed executed by an aged and illiterate couple who were c...

Sec. 470. Inadequacy Of Consideration And Weakness Of Mind: Inadequacy of consideration may be found in connection with weakness of mind and the combination of facts may be such as to sustain a finding of undue influence,1 even though he is not absolutely lack...

Sec. 471. Confidential Relationship, Weakness Of Mind And Inade Quacy Of Consideration: If, in addition to confidential relations and weakness of mind on the part of the party reposing trust and conv. Harris, 15S U. S. 326, 331, 39 L. ed. 1003. Alabama. Louisville & N. R. Co. v. Huffstu...

Sec. 472. Confidential Relationship, Weakness Of Mind, Inadequacy Of Consideration And Circumstances Of Oppression: In a transaction between persons in a confidential relation, where the party seeking relief is physically and mentally weak, and the consideration is inadequate, the addition of circumstances of oppre...

Sec. 473. Inadequacy Of Consideration, Weakness Of Mind And Non-Disclosure: Inadequacy of consideration, when taken in connection with weakness of mind on the part of the person who receives the inadequate consideration, and misleading statements by the adversary party, or om...

Sec. 474. Nature, Scope And Effect Of Such Contracts: Expectant heirs, remainder-men and reversioners were looked upon by the English courts of equity as being in a state of chronic distress.1 The actual existence of financial embarrassment was not neces...

Sec. 475. What Constitutes Inadequacy Of Consideration In Contracts With Expectant Heirs: Inadequacy of consideration has a peculiar and special meaning in this connection. Though at one time it was held that the value of the reversionary interest was to be determined for the purposes of a...

Sec. 476. Effect Of Knowledge Or Consent Of Ancestor: One complicating principle remains for notice. While the interests of remainder-men and reversioners can not be affected by the life-tenant, and are therefore not within the principle to be referred t...

Sec. 477. Effect Of Undue Influence: The person subjected to undue influence, or his legal representative, may avoid the transaction and recover what he has parted with.1 Thus a guardian2 Trull v. Eastman, 44 Mass. (3 Met.) 121, 37 Am. ...

Sec. 478. Terms On Which Transaction May Be Avoided: A contract or conveyance induced by undue influence is voidable, and not void.1 Accordingly, if the party of whom advantage is taken wishes to avoid the transaction, he must return what he has receive...

Sec. 479. Action For Damages: Ordinarily the only remedy in a case of contract or conveyance made by undue influence is a rescission, either informally at law, or formally in equity. An action for damages will not lie.1 If, howeve...

Sec. 480. Ratification: The person subjected to undue influence may, if he chooses, after such influence is removed, ratify the transaction and make it as valid as it would have been if there had been no undue influence.1 Co...

Chapter XVIII. Duress: I. NATURE Sec. 481. Nature and classes of duress. Sec. 482. Standard for determining existence of duress. II. ACTS AND THREATS AMOUNTING TO DURESS Sec. 483. Forms of duress - Violence. Sec. 484. ...

Sec. 481. Nature And Classes Of Duress: The definitions of duress and the statements of its general nature may be grouped under two general classes, although there are a number of such definitions 770 and statements intermediate between the...

Sec. 482. Standard For Determining Existence Of Duress: The original common-law rule was that there could be no duress unless the threats or violence were of such sort as to overcome the mind of a courageous man.1 It ignored the effect of the acts upon the...

Sec. 483. Forms Of Duress - Violence: Actual violence may undoubtedly constitute duress.1 Thus where a husband compelled his wife to sign articles of separation by knocking her down and kicking her, such articles were decreed void.2 So wh...

Sec. 484. Imprisonment: Unlawful imprisonment may undoubtedly amount to duress,1 as where a father is arrested on an illegal warrant charging him with kidnapping his own minor child, and is thereby coerced into signing a rel...

Sec. 485. Duress Of Property: The original English rule was that neither seizure nor destruction of property, actual or threatened, could be treated as duress for the purpose of avoiding a contract thereby induced.1 Thus duress co...

Sec. 486. Threats As Duress - Original Rule: The original common-law rule seems to have been that duress per minas could exist only when the threat was of loss of life, limb or liberty.1 This was part of the old theory that duress was to be test...

Sec. 487. Threats Of Violence: Threats of violence may constitute duress,1 as threats of violence by a mob,2 or fear of bodily harm and abandonment by a husband.3 But a threat of a woman to kill one in a distant state is not duress...

Sec. 488. Threats Of Criminal Prosecution And Imprisonment: By the weight of modern authority, threats of criminal prosecution for an act which has already been committed, may constitute duress if such threatened criminal prosecution will result eventually in ...

Sec. 489. Effect Of Legality Of Threatened Arrest: On the question of whether to constitute duress the threatened imprisonment must be unlawful, the courts differ. If the threatened imprisonment is unlawful, duress exists.1 A threat by one partner to ...

Sec. 490. Threat Of CIVIL Action: A threat of enforcing a bona fide claim by a civil action is not duress, so as to avoid a contract for the payment or compromise of such claim.1 One party's threatening to bring a civil action agains...

Sec. 491. Breach Of Contract: Breach of contract is usually not duress.1 Fear that the adversary party will not perform an existing contract is not duress.2 Thus refusal to perform a contract for delivering ice unless a higher rat...

Sec. 492. Advantage Taken Of Necessities: Taking advantage of a creditor's financial necessities, if not caused by the debtor otherwise than by withholding payment of the debt in question, and thereby compelling him to make some concession to...

Sec. 493. Refusal To Furnish Support: A refusal to furnish support to one whom the party thus refusing is legally bound to support, may amount to duress.1 The threat of a husband to refuse to support his wife may amount to duress.2 A thre...

Sec. 494. Other Threats As Duress: Threats or conduct which do not involve violence, imprisonment, and the like, can not usually constitute duress. If the conduct apprehended will cause merely vexation and annoyance,1 as a threat to co...

Sec. 496. Conduct Not Inducing Action Not Duress: Conduct which might amount to duress if the mind of the person against whom it is directed were affected thereby is not duress if it does not affect the mind of such person. Thus threats which might a...

Sec. 497. Absence Of Threats: If the only duress claimed to exist is duress of threats, the fact that no threats were in fact made shows that no duress exists,1 even though the party executing the instrument did so because of fact...

Sec. 498. By Whom Duress May Be Committed: Where a contract is induced by duress, the question of the relation of the party guilty of duress to the contract thus induced is often decisive of the rights of the party subjected to such duress. (1...

Sec. 499. Relation Of Party Subjected To Duress To Party Against Whom Violence Or Threats Are Directed: Where the promisor himself is subjected to duress of imprisonment,1 or to threats which can cause duress,2 such as threats of violence3 or of imprisonment,4 15Bryant v. Levy, 52 La. Ann. 1649, 28 So....

Sec. 500. To Whom Threats May Be Made: A threat causing duress may as well be made to A to be communicated to B,1 as be communicated to B in person. It will be equally operative as duress affecting B. It is said, however, that if a threat ...

Sec. 501. Who Can Take Advantage Of Duress: The party to the contract who enters into it by reason of duress may take advantage of such duress to avoid liability under the contract,1 and, after his death, his heirs may have their ancestor's con...

Sec. 502. Effect Of Duress Of Principal On Liability Of Surety: Whether duress exercised against the principal gives the surety an opportunity of avoiding the contract is a question upon which there is some conflict of authority. The view held by a majority of the...

Sec. 503. Effect Of Duress In The Execution: Duress, like fraud, misrepresentation, mistake, and non-disclosure, may affect the execution or the inducement. Duress in the execution is rare. It exists where the party subjected thereto is coerced ...

Sec. 504. Effect Of Duress In The Inducement: Duress in the inducement exists where the party subjected to the duress knows the terms of the contract into which he is entering and intends such contract to take effect, but such intention is caused...

Sec. 506. Bights Of Bona Flde Purchasers: If duress in the execution exists, even a negotiable contract in the hands of bona fide holders is void.1 If duress in the inducement exists, a contract made thereunder is voidable only. It follows th...

Sec. 507. Ratification: On the other hand, the person subjected to duress may see fit to ratify the transaction, and may do so after having become competent to contract.1 Thus a deed given under duress may be ratified, as by...

Sec. 508. Method Of Taking Advantage Of Duress: The defense of duress must be made by specific allegations setting up the facts which amount to duress. A general denial is not sufficient.1 The burden of proof is upon the party who claims the existe...

Chapter XIX. Consideration: i. history of doctrine of consideration Sec. 509. History of the doctrine of consideration - Debt and covenant. Sec. 510. Assumpsit. Sec. 511. The problem of the instrument at law-merchant. Sec. 5...

Sec. 561. Subscriptions - Promises Of Other Subscribers, Officers, Etc Sec. 562: Subscriptions - Promise to apply proceeds. Sec. 563. Change of status. VI. APPARENT AND ILLUSORY CONSIDERATIONS Sec. 564. Apparent considerations which are non-existent. Sec. 565. The doctrine of m...

Sec. 509. History Of The Doctrine Of Consideration - Debt And Covenant: The doctrine of consideration is in its present form and extent a late arrival in the law administered in England by the king's courts. The reason for this, like so much history of English law, is to ...

Sec. 510. Assumpsit: The English law, therefore, had always assumed the existence of consideration except in the sole case at an intermediate period of the formal contract under seal. This does not mean that the term was ...

Sec. 511. The Problem Of The Instrument At Law-Merchant: It is hard to build up an affirmative proposition from negative precedents. Was a consideration essential to every simple executory contract, or were there some types of such contract enforceable with...

Sec. 512. Consideration Eventually Held Necessary: The doubts which were raised by these obiter and by Blackstone's statement were soon laid. It was decided in a case in which the question was squarely raised, that consideration was necessary in all e...

Sec. 513. Consideration, Offer And Acceptance, And Subject-Matter: Every contract is formed by offer and acceptance.1 Every offer for a simple contract must impose some consideration as well as include some promise, or the acceptance of the offer will not form a cont...

Sec. 514. Definition Of Consideration: A definition of valuable consideration which has been quoted frequently and with approval by English and American courts is as follows: A valuable consideration in the sense of the law may consist ei...

Definition Of Consideration. Continued: A consideration is a cause, or meritorious occasion, requiring a mutual recompense, in fact or in law.7 Tlie consideration of a promise is the thing given or done by the promisee in exchange for t...

Sec. 516. Good And Valuable Consideration - Nature Of Good Consideration: The word consideration is used to denote two different ideas. The valuable consideration, which is, for practical purposes, the consideration in the law of contracts, will be discussed later.1 The g...

Sec. 517. Sufficiency Of Good Consideration In Trusts And Conveyances: A good consideration was sufficient in equity to support a covenant to stand seised to uses.1 It operated as a rebuttal of the presumption of a resulting trust wherever a presumption of a resulting tr...

Sec. 518. Sufficiency Of Good Consideration For Executory Contract - Consideration Held Sufficient: It has been said in obiter in some cases that a good consideration was sufficient to support an executory promise.1 Some of these cases support this statement. A voluntary obligation by a father to hi...

Sec. 519. Good Consideration Held Insufficient: In the law of contract, a good consideration, as distinguished from a valuable consideration, is inoperative, and is insufficient to support a promise.1 6 Berry v. Graddy, 58 Ky. (1 Met.) 553. 7 Arn...

Sec. 520. Good Consideration In Equity: The theory that a good consideration has such force in equity that an executory promise based thereon may be enforced in equity was once very generally expressed, and relics of it still linger. Where ...

Sec. 521. Statutory Provisions: Under some statutes natural love and affection are made a sufficient consideration. This result has been reached under a statute providing that natural duty and affection shall be a consideration.1...

Sec. 522. Consideration Must Be That Contemplated By Offer And Acceptance: In discussing all the types of consideration, it must be kept in mind that consideration is an essential element of a contract, and not something foreign to it and outside of it; that the consideratio...

Sec. 523. Consideration Distinguished From Condition Of Gift: In determining whether consideration exists or not, the necessary conditions which are involved in the acceptance of a gratuitous promise must be distinguished from the acts, forbearances or promises ...

Sec. 524. Act In Reliance On Promise As Consideration: While, as a general rule, the consideration must be that which is stipulated for by the terms of the contract, and while the voluntary performance, by the promisee, of an act, which is not agreed upon...

Sec. 525. Consideration Supporting Several Promises: While a consideration is a necessary element of every contract, it is not necessary that each separate promise or covenant should have a distinct consideration. If there is but one consideration offer...

Consideration Supporting Several Promises. Part 2: 5 Bald Eagle, etc., Ry. Co. v. Ry. Co., 171 Pa. St. 284, 50 Am. St. Rep. S07, 29 L. R. A. 423, 33 Atl. 239. 6 Standard Underground Cable Co. v. Electric Co., 76 Fed. 422, 22 C. C. A. 258; McGaughey v...

Consideration Supporting Several Promises. Part 3: 24 United States. Bowen v. Bank, 87 Fed. 430; Dunlap v. Hopkins, 95 Fed. 231, 37 C. C. A. 52. Alabama. McDonald v. Wood, 118 Ala. 589, 24 So. 86. California. Lompoc Valley Bank v. Stephenson, 156 Ca...

Sec. 526. Consideration And Motive: While consideration is the legal motive for a promise, a motive for a promise may exist and yet not amount to a consideration.1 Thus a desire to protect a 45Wooten v. S. R. Biggs Drug Co., 169 N. Car...

Sec. 527. To Whom And From Whom Consideration Must Move-Classification Of Transactions: It will be noticed that in the definition already given, a consideration is spoken of as a benefit to the promisor, or a detriment to the promisee. The alternative is used regularly in this definition...

Sec. 528. Consideration Moving From Promisee To Promisor: In case where A makes a promise to B, the consideration may (a) consist of a legal right which B gives up to A, and which A acquires from B. This is the most usual and natural form of consideration an...

Sec. 529. Consideration Moving From Promisee, But Not To Promisor: The consideration may consist (b) of a legal right which B gives up often to some third person, X, and of which A does not receive the benefit. Such consideration is sufficient.1 A discharge of a debt...

Sec. 530. Consideration Moving To Promisor, But Not From Promisee - English Theory: In case 2, the consideration may consist of a legal right which A acquires from a third person, X, and which B does not give up to A. Whether a consideration moving from X can support a promise by A t...

Consideration Moving To Promisor, But Not From Promisee - English Theory. Continued: 12Disborne v. Denobie, 1 Roll abr. action sur case, (2) Qui avera 1'action pl. 5, pp. 30, 31; Fleming v. Bank [1900], A. C. 577; Bailey v. Croft, 4 Taunt. 611; Seaman v. Price, 2 Bing. 437; West Yorks...

Sec. 531. Consideration Moving To Promisor, But Not From Promisee - American Theory: In the United States the cases have been practically harmonious, and whatever discussion has arisen has been due to text-writers and to legal essayists.1 The courts have, often without discussion, ass...

Consideration Moving To Promisor, But Not From Promisee - American Theory. Part 2: 6 Brown v. Jennett, 130 la. 311, 5 L. R. A. (N.S.) 725, 106 N. W. 747. (B's release of A may also be regarded here as the consideration.) 7 Schumacher v. Dolan, 154 la. 207, 134 N. W. 624. 8 Stearns...

Consideration Moving To Promisor, But Not From Promisee. Part 3: Some of the little authority there is for the proposition that a stranger to the consideration can not sue is found in cases where A makes a promise to B, who furnishes the consideration, which promis...

Sec. 532. Consideration Moving From Two Or More - Promise To One: If A makes a promise to B, the fact that the consideration moves from B and X does not render such contract invalid.1 A sale of a partnership by B and X to A, is consideration for A's promise to pay t...

Sec. 533. Consideration Moving From One Of Two Or More Promisees: Contracts in which the consideration is furnished to the promisor by one of the adversary parties, and the promise is made for the sole benefit of the other, do not appear to be common. An example of ...

Sec. 534. Consideration Moving From Promisee To One Of Two Or More Promisors: Since B's giving up a right to a third person would be a consideration, B's giving up a right to one of two promisors is a consideration for the promise of both. So where A, a physician, entered into ...

Sec. 535. Consideration Neither From Promisee Nor To Promisor: In a number of groups of cases promises have been enforced although the consideration did not move from the promisee and it did not move to the promisor. In accommodation paper no consideration moves ...

Sec. 536. Consideration Moving From Promisor To Promisee: Occasionally the transaction, as viewed by the court, is one in which the promisor agrees to confer two or more independent benefits upon the promisee. The transaction really consists of two gratuitou...

Sec. 537. Gratuitous Executory Promises: According to the formal statements of law as laid down by the courts, it is well settled that a simple executory promise which is not supported by a valuable consideration is unenforceable as between ...

Gratuitous Executory Promises. Part 2: Oregon. Dodson v. Dodson, 26 Or. 349, 37 Pac. 542. Pennsylvania. Crawford's Appeal, 61 Pa. St. 52, 100 Am. Dec. 609; Martin's Estate, 131 Pa. St. 638, 18 Atl. 987; Cleaver v. Lenhart, 182 Pa. St. 285...

Gratuitous Executory Promises. Part 3: 35Beland v. Brewing Association, 157 Mo. 593, 58 S. W. 1. 36 Wilkinson v. Oliveira, 1 Bing. (N. C.) 490; Fearnley v. Fearnley, 44 Colo, Consideration in the common-law meaning is unknown to the civi...

Gratuitous Executory Promises. Part 4: 49 See Sec. 435. 50 See Sec. 276. 51 See Sec. 276. 52 See ch. XLVI. 53 See ch. XLVII. 54 See ch. XLIX. 55See ch. LXXXIV. 56See ch. LXXVII. 57 See ch. LXXXV. 50Sigerson v. Matthews, 61 U. S. (20 How....

Sec. 538. Gratuitous Bailment: The discussion of contractual liability in case of a gratuitous bailment, and the consequent necessity of a consideration in such cases, is complicated by the fact that liability in bailment is not ne...

Sec. 539. Gratuitous Agency: If one promises to act as agent for another without consideration for such promise, no contract exists, and the promisor may refuse to perform without incurring any legal liability,1 even if the promi...

Sec. 540. Executed Contracts: If a contract is fully performed on both sides and each has received what he agreed to take, the question of consideration becomes immaterial. While it is sometimes said that an executed contract need...

Sec. 541. Consideration Unnecessary By Statute: The rule requiring consideration in executory contracts is a rule of common law and equity, which are both subordinate to statute law. If the legislature sees fit to provide a means at law of enforcin...

Sec. 542. Conveyance Of Rights In Realty: A transfer of property rights in realty is a valuable consideration.1 Even a conveyance of the mere legal title is a consideration. Thus a conveyance of property to be held in trust is a consideration...

Sec. 543. Transfer Of Rights In Personalty: A transfer of personal property or any interest therein is a sufficient consideration,1 even though such property is sold subject to mortgage.2 The transfer of stock in a corporation;3 or corporate bo...

Sec. 544. Change Of Form Of Obligation: A change in the form of a debt is held by some courts to be a consideration for a promise based upon such change. Thus the giving of a note for a debt which was not before evidenced by a negotiable in...

Sec. 545. Work And Labor And Support: Performing work and labor which the party performing was not otherwise bound to do, forms a consideration for a promise made in return for such work and labor.1 Examples of such considerations are agr...

Sec. 546. Forbearance Of Legal Rights - Release Of Debts And Contracts: A forbearance of any legal right may be a consideration.1 4 Barley v. Buell, 70 Cal. 335, 11 Pac. 632. Additional work is a consideration for a promise to pay an invalid assessment. Bernstein v. Dow...

Sec. 547. Release Of Claims Not Arising In Contract: A release of a claim not originating on contract is a consideration.1 A release by A of a claim for goods stolen by B and used in C's business without C's knowledge of the theft,2 or a release of a cl...

Sec. 548. Release Of Liens: The release of a lien,1 such as a mortgage,2 or a vendor's lien,3 or a mechanic's lien,4 or a judgment lien,5 or a levy,6 or a lien on chattels,7 a chattel mortgage, defective but not void,8 or a pled...

Sec. 549. Extension Of Time: A promise to extend for a definite time the payment of a debt due the promisor,1 or for a reasonable time,2 or since if no time is mentioned, a reasonable time is intended;3 a promise to extend paym...

Sec. 550. Forbearance To Sue: Forbearance to bring an action upon a claim which is asserted in good faith is sufficient consideration for a promise to induce such forbearance.1 Forbearance to bring a proceeding in bastardy or an ...

Sec. 551. Dismissal Of Action: Dismissal of an action instituted in good faith is a valuable consideration;1 as discontinuance of attachment proceedings,2 or a suit contesting a will,3 or the dismissal of a prosecution for removing...

Sec. 552. Waiver Of Rights To Legal Process And Procedure: A waiver of rights concerning procedure, mode of trial and remedies given by law to parties litigant,1 such as a promise to submit a cause to the court without summons or jury;2 or to waive a jury;3 o...

Sec. 554. Bights In Decedent's Estate: A waiver of rights in a decedent's estate is a valuable consideration:1 such as, an agreement between the heirs or next of kin for an amicable settlement of the estate;2 or to waive a claim for advanc...

Sec. 555. Waiver Of Other Rights Arising Out Of Contract: A waiver of a right to rescind a contract,1 as for fraud,2 or for breach by the adversary party,3 or for inability of the adversary party to perform;4 a waiver of a right to recoup for failure of titl...

Sec. 556. Waiver Of Other Rights Concerning Property: A waiver of exemptions;1 the waiver by an indorser of his right to demand and notice;2 a waiver of a right to declare dividends and an agreement to apply the surplus to making certain improvements;3 t...

Sec. 557. Waiver Of Rights Not Involving Property: The examples of benefits or detriments thus far given have been rights involving property directly or indirectly. Consideration, however, is not necessarily limited to rights of this kind. Any forbear...

Sec. 558. Incurring Obligations: If a person not otherwise liable assumes obligations so that they become enforceable against him personally or against his property, such assumption is consideration for a promise made therefor.1 Secu...

Sec. 559. Subscriptions - Necessity Of Consideration: A promise to donate money as a subscription to some purpose of public utility is a gratuitous promise, unenforceable unless some consideration therefor exists.1 Some intimation has been made in obiter...

Sec. 560. Subscriptions - Incurring Obligations: The necessary consideration to render a subscription enforceable is usually found in the assumption by the promisee of new liabilities in reliance upon the promise, such liabilities being of a kind co...

Sec. 561. Subscriptions - Promises Of Other Subscribers, Officers, Etc: Consideration for subscriptions is sometimes sought in the mutual promises of the subscribers. By the great weight of authority, the promise of a subscriber is sufficient consideration for the promise...

Sec. 562. Subscriptions - Promise To Apply Proceeds: Consideration is also sought in the obligation of the donee to use the donation for the purpose specified.1 But this obligation does not attach until the donation is paid in, and is nothing more than ...

Sec. 563. Change Of Status: Change of status as far as the same can be changed by agreement is a valuable consideration. Thus marriage1 is a valuable consideration; as for a marriage settlement,2 even by a third party,3 or for a...

Sec. 564. Apparent Considerations Which Are Non-Existent: While the parties to a contract may make such terms and select such consideration as they choose, the consideration selected must be the forbearance or acquisition of some legal right. If they select ...

Sec. 565. The Doctrine Of Mutuality: The courts keep reiterating, in various forms of expression, that promises, in order to be enforceable, must be mutual.1 In other words, promises, in order to amount to a consideration, must each impo...

The Doctrine Of Mutuality. Continued: 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 re...

Sec. 566. Mutual Promises: If the promisor is willing to accept a promise in return for his promise, and does not insist on the performance of the act or forbearance stipulated for, such promise is as lawful a consideration as ...

Mutual Promises. Continued: 11 Cohen v. Grimes, 18 Tex. Civ. App. 327, 45 S. W. 210. 12Taylor v. Williams, 120 Ind. 414, 22 N. E. 118; Rodman v. Robinson, 134 N. Car. 503, 65 L. R. A. 682, 47 S. E. 19. 13 Backus v. Spaulding, ...

Sec. 567. Unenforceable Promise As Consideration: In many cases the alleged consideration for a new promise consists in the discharge of a contract or of an-alleged contract which for some rea-. son was either not enforceable originally or which was ...

Sec. 568. Lack Of Mutuality - Gratuitous Promises: The first class of contracts which are said to be wanting in mutuality, is, as we have seen,1 the contract in which, by the very terms of the agreement, no legal right is to be conferred upon the prom...

Sec. 569. Promise Imposing No Liability As Consideration: Where the parties assume to make a contract in which a promise is the consideration for a promise, and the alleged contract is so worded that one of the promises does not impose any legal duty upon th...

Sec. 570. Consideration Payable Only Out Of Proceeds Of Transaction: Whether a consideration exists in cases in which the promisor agrees to transfer property and the like to the promisee, and the promisee, without incurring any personal obligation, agrees to pay for s...

Sec. 571. Options: An option is said to be a unilateral agreement binding upon the party who executes it from the date of its execution, and it becomes a contract inter partes when exercised according to its terms;1 a...

Sec. 572. Contract Terminable At Option Of One Party: If a contract between A and B is one in which the consideration is a promise on each side, a provision in the contract that A may terminate liability at his own uncontrolled discretion and without his...

Sec. 573. Effect Of Substantial Interval Between Notice And Termination Of Contract: If, however, A must give notice for a substantial period of time before ending his liability under the contract, and such liability is to last until the end of time for which the notice is given, A's ...

Sec. 574. Contract Terminable On Event Other Than Will Of Party: If the contract by its terms reserves to one of the parties the right to terminate it for some specified cause or upon the happening of some certain event and not at his arbitrary discretion, such pro...

Sec. 575. Contract To Be Performed At Option Of Adversary Party - Equivalent To Offer: A class of cases in which it is difficult to tell whether the promise imposes any liability upon the adversary party or not, or as is frequently said, whether mutuality exists or not, are cases in whi...

Sec. 576. Equivalent To Preliminary Negotiation: In some jurisdictions, however, an agreement which is to be performed at the option of one of the parties thereto, has been regarded not as an offer, but merely as an expression of willingness to nego...

Sec. 577. Performance Mandatory - Details In Discretion Of One Party: If the contract imposes some definite obligation upon each party, it has consideration, even though some discretion as to quantity, time, etc., may be given to one party.1 A contract between A and B, ...

Sec. 578. Performance At Option Of One Party - Independent Consideration: If there is an independent consideration for A's promise to furnish goods or services at a certain fixed price,1 or if A's promise is under seal,2 he can not revoke such promise. So a promise by A to ...

Sec. 579. Contract To Deal With Adversary Party Exclusively - Promise Held Without Consideration: In contracts in which A agrees to furnish to B all the goods that B may use in his business or that he may need or require, B, by a fair construction of the contract, agrees not to buy such goods from...

Sec. 580. Contract To Deal With Adversary Party Exclusively - Contract Held To Be Upon Consideration: The great weight of authority is to the effect that B's promise to buy of A and of no one else, is a consideration for A's promise to furnish whatever goods B may need or use in his business, and that...

Sec. 581. Contract To Supply "Wants" Or "Requirements" Of Adversary Party: A promise by which A agrees to supply to B all the goods which B may want in a certain business during a certain period of time, is susceptible of two meanings: It may be used in accordance with its...

Sec. 582. Offer To Be Accepted By Act - Performance As Supplying Mutuality: The terms of the offer may be such that the offer can be accepted only by doing some specified act; and it may not even require that notice of doing such act be communicated to the offeror.1 In subscr...

Sec. 583. Contract Construed As Imposing Mutuality Of Obligation: The dislike of the courts for contracts in which the offer is to be accepted by the performance of an act, and their decided preference for contracts in which a promise is given for a promise,1 manife...

Sec. 584. Contract Requiring Test: A contract otherwise binding does not lack mutuality because performance is to satisfy a test by the purchaser to determine if it is suitable for his purpose, according to some external standard.1 The...

Sec. 585. Performance Of Duty Imposed By Law: If A makes a promise to B in consideration of B's doing or promising to do what he is already bound to do, the question of the sufficiency of such act or promise of B as a consideration is presented. ...

Sec. 586. Performance Of Legal Duty Resting On Public Officer: A promise by a public officer to perform a duty imposed upon him by law, or his performance of such legal duty, can not, in either case, amount to a consideration.1 An officer, whose legal duty it is ...

Sec. 587. Performance Of Legal Duty Arising Out Of Domestic Relations: Certain duties are imposed by law upon parties who occupy special relationships towards each other, such as husband and wife, or parent and child, and the performance of such duties is not a considera...

Sec. 589. Performance Of Pre-Existing Contract Between The Same Parties - Held Not To Constitute Consideration: The alleged consideration in a contract between A and B may be the act of B in performing the contract which B has already entered into, or in promising to perform such contract; and the act which B p...

Performance Of Pre-Existing Contract Between The Same Parties - Held Not To Constitute Consideration. Continued: Contra, Nine v. Starr, 8 Or. 49. 3 Illinois Central R. Co. v. Waterloo, C. F. & N. Ry. Co., - la. - , 164 N. W. 208 [opinion modified on petition for rehearing, Illinois Cent. R. Co. v. Waterloo, C. ...

Sec. 590. Held To Constitute Consideration: The courts are not, however, in accord upon this question, elementary as it might seem. In some jurisdictions, A's promise to B to perform a prior valid contract between A and B, is said to be suffici...

Sec. 591. Unforeseen Difficulties In Performance Held To Constitute Consideration: In a number of jurisdictions, a compromise view has been suggested; and it has been said that while ordinarily performance of an existing contract between the parties to the new contract is no conside...

Sec. 592. Presence Of Additional Consideration: In some of the cases which are usually cited in support of the rule that performance by B of a prior contract between A and B is consideration for 7 John King Co. v. Louisville & N. R. Co., 131 Ky. 4...

Sec. 593. Performance Of Pre-Existing Contract With Third Person Held Not To Be Consideration: The promise on consideration of performing a pre-existing contract may be made by a third person, who was not a party to the original contract. If the act which B performs or promises to perform is on...

Sec. 594. Performance Of Contract With Third Person Held To Be Consideration: In some jurisdictions, however, it has been said that B's promise to perform his contract with X, may be a con-sideration for A's promise to B.1 It has been suggested that such promise might be a cons...

Performance Of Contract With Third Person Held To Be Consideration. Continued: 1 Scotson v. Pegg, 6 Hurl. & N. 295; Shadwell v. Shadwell, 9 C. B. N. S. 159; Abbott v. Doane, 163 Mass. 433, 47 Am. St. Rep. 465, 34 L. R. A. 33, 40 N. E. 197. 2 The following cases are generally ci...

Sec. 595. Payment Of All Or Part Of Liquidated Undisputed Debt, Due As Consideration For New Promise: If the contract between A and B is one by the terms of which B is to pay a certain sum of money to A, there is much greater unanimity of opinion among the different jurisdictions than there is in cont...

Sec. 596. Payment Of Part Of Liquidated Debt In Satisfaction Of Entire Debt: The question of payment of part of a debt that is due, as consideration for a new promise, has been confused with its effect as discharge of the entire debt. The early cases regarded payment of part o...

Payment Of Part Of Liquidated Debt In Satisfaction Of Entire Debt. Continued: Maryland. Chicora Fertilizer Co. v. Dunan, 91 Md. 144, 50 L. R. A. 401, 46 Atl. 347; Prudential Ins. Co. v. Cotting-ham, 103 Md. 319, 63 Atl. 359. Massachusetts. Gilson v. Nesson, 198 Mass. 598, 17 L...

Sec. 597. Payment In Manner Different From Original Contract: The questions of the effect of such payment as a discharge of the debt, and of such payment as consideration for a new promise, are usually discussed together, as though the two questions were the sam...

Sec. 598. Additional Consideration - Change In Time Or Place: A promise to pay money, not otherwise due and owing, is a consideration,1 as a promise to advance capital to a firm;2 or a promise by principal to pay guarantor a certain percentage of profits;3 or a ...

Sec. 599. Change As To Person Or Security: Payment to a different person from the creditor,1 as an undertaking to pay promisor's attorney;2 or if additional security is given;3 or if the debt is paid in part by some one other than the debtor,4...

Sec. 600. Change In Medium Of Payment - Payment By Check: If the debt is paid in something other than that stipulated for in the contract, but accepted in lieu thereof, such change in medium of payment amounts to a consideration.1 The check of the debtor is...

Sec. 601. Cancellation Or Surrender Of Negotiable Instrument: At the law-merchant, a negotiable instrument embodied the debt in a way in which the ordinary written contract did not. Accordingly, even in the absence of statute, it was held that if the holder of a...

Sec. 602. Payment Of Principal As Bar To Right To Recover Interest: If the debt is one which bears interest, and the principal of the debt is paid under an agreement on the part of the creditor to forego his claim for interest, a question is presented which is in some...

Sec. 603. Gift Or Sale Of Debt By Creditor To Debtor: In some cases, the courts have attempted to uphold an agreement by the creditor to accept payment of part of a liquidated debt in full satisfaction of the entire debt, on the theory that such transact...

Sec. 604. Written Receipt In Full: A receipt is a recital of a fact and not a contractual provision; and, accordingly, the parol evidence rule which forbids the introduction of extrinsic evidence of prior or contemporaneous agreements ...

Sec. 605. Payment Of Interest Due: Payment of interest already due is no consideration for a promise to extend the time of payment, since the creditor is already entitled thereto.1 Prompt and regular payment of interest by a debtor in ...

Sec. 606. Covenant To Pay Interest As Consideration For Extension: If the creditor and debtor agree upon an extension of the debt for a fixed time at a specified rate of interest, and such agreement does not reserve to the debtor the right to pay such debt whenever h...

Sec. 607. Change In Time Of Paying Interest: A change in the time of paying interest which gives the creditor some legal right not before possessed by him, is a consideration for a promise to extend the time of payment.1 A promise to pay interes...

Sec. 608. Payment Of Usurious Interest: Whether payment of usurious interest or a promise to pay usurious interest is a consideration for a promise to extend the time for the payment of a debt, is a question upon which there is a general ha...

Sec. 609. Performance Of Joint Liability: If two or more persons are jointly liable on a debt, a release of one of them by the obligee is a waiver of a legal right. Since the obligee could, if necessary or convenient, enforce payment of the e...

Sec. 610. Reciprocal Release Of Contractual Rights: If a contract is existing between two parties, under which each party has rights and liabilities unperformed, a modification of such contract is supported by a sufficient consideration in the mutual w...

Sec. 611. Performance With Modification: If the new promise is to do something further than the promisor had already agreed to do, such promise is a consideration for a reciprocal promise. Thus where A was bound not to allow others to use hi...

Sec. 612. Compromise Of Disputed Claim - What Constitutes Dispute: The general rule that the legal right which is acquired by the promisor or which is forborne by the promisee, must be a genuine right in order to amount to a valuable consideration, must be qualified ...

Sec. 613. Dispute As To Fact Or Law: The dispute between the parties may be a dispute as to fact, or a dispute as to the law applicable to the conceded facts;1 or it may be a dispute which involves both law and facts.2 In each of these c...

Sec. 614. Sufficiency Of Genuine Dispute: If there is a bona fide dispute between the parties as to the existence or amount of the claim, it is frequently said that the compromise of such claim by mutual agreement is supported by sufficient c...

Sec. 615. Necessity Of Valid Claim: In some cases language is used which seems to indicate that the good faith of the party who asserts the claim is to be regarded as immaterial, and without attaching much importance, even to the existe...

Sec. 616. Necessity Of Good Faith: If there is no genuine dispute between the parties and if the claim which is asserted by one of the parties is known by him to be groundless, the renunciation by such party of such claim is not a cons...

Sec. 617. Reasonable Ground For Claim Held Unnecessary: If the claim is asserted by one who is acting in good faith the question of the sufficiency of such good faith alone or the necessity of some elements of apparent merit in the claim is occasionally ra...

Sec. 618. Reasonable Ground For Claim Held Necessary: In other jurisdictions, however, language has been used which seems to indicate that the good faith of the party is not the sole test, but that in order to make the compromise valid, there must be an ...

Sec. 619. Necessity Of Mutual Concessions: The dispute may involve the existence of a claim, the amount of which is liquidated, or it may involve the amount due upon an unliquidated claim whose existence is conceded, or it may involve a claim ...

Sec. 620. Absence Of Reasonable Ground Equivalent To Absence Of Good Faith: In some cases, the want of a reasonable ground of belief in the claim which is asserted seems to be regarded as equivalent to an absence of good faith, and it is said that if the claim, the waiver of ...

Sec. 621. Effect Of Pendency Of Action: It has been suggested that a distinction should be made between cases in which there is an action pending and one in which there is no action pending; and that if an action is pending, the good faith ...

Sec. 622. Specific Examples Of Compromises: As illustrations of valid compromises, the compromise of personal damage suits;1 compromise of a claim by a husband for alienation of affections and 13 See Sec. 589 et seq. 14 See Sec. 643. 1 Burle...

Sec. 623. Attitude Of Courts Toward Compromises: Compromises are favored in law probably more than any other class of contracts.1 A striking instance of this favoritism is the determination of the courts to find a consideration in the forbearance of...

Sec. 624. History Of Doctrine Of Past Consideration: At one stage of the development of the law of contract the king's courts required an express promise as a basis of the action of assumpsit. No recovery could be had on a genuine implied contract, even...

Sec. 625. Past Consideration- Nature And Effect: At modern law the term past consideration means that a right has been acquired or forborne, under circumstances that either never created any legal liability, to pay therefor, or if there was a lega...

Sec. 626. Illustrations Of Past Consideration: After a lease has been executed,1 or a debt has been created,2 a promise by a third person to guarantee such lease or debt is not supported by the original consideration; nor is a promise to assume su...

Illustrations Of Past Consideration. Continued: New Jersey. Dale v. See, 51 N. J. L. 378, 14 Am. St. Rep. 688, 5 L. R. A. 583, 18 Atl. 306. New York. Bostwick v. Ry., 45 N. Y. 712; Guillaume v. General Transportation Co., 100 N. Y. 491, 3 N. E. 48...

Sec. 627. Past Services: Past services, when rendered under such circumstances as to create no legal liability, are not a consideration for a subsequent promise.1 Illustrations of such services are those rendered by father to...

Sec. 628. Past Consideration Held Sufficient: It is still said in some jurisdictions that a past consideration which, though without request, moved directly from the plaintiff to defendant and inured directly to defendant's benefit, was binding a...

Sec. 629. Past Transaction Resulting In Liability: If a past transaction has created legal liability, whether contractual, quasi-contractual or tortious, and whether recognized by law or by equity, a subsequent promise by the party who is subject to s...

Sec. 630. Previous Request: Many of the earlier English cases use language which seems to indicate that the courts believed that any act done in compliance with a previous request of the adversary party was sufficient considerat...

Sec. 631. Promise To Perform Prior Duty And To Perform In Excess Thereof: If such promise is to perform the legal duty and something more, no consideration for the additional promise exists. If receipt of assets of a decedent's estate is the sole consideration for a promise...

Sec. 632. Moral Obligation - Prior Legal Liability: It has been said in many cases, in what on examination prove to be for the most part obiter that a moral obligation is such consideration as will support a subsequent express promise based thereon.1 T...

Sec. 633. Moral Obligation - No Legal Liability - Held To Be Consideration: Some states still adhere in form to the old English doctrine of moral obligation.1 A promise by a wife to her dying husband, to pay a claim against him which may not have been enforceable, is said to ...

Sec. 634. Moral Obligation - No Legal Liability - Held No Consideration: Outside of cases in which there was once a legal liability, though voidable, or subject to some positive defense, the doctrine of moral obligation is generally repudiated.1 Thus an attempted contract ...

Sec. 635. Adequacy Of Consideration - At Law - Value Not Fixed In Money: There is a very strong tendency in the common law to permit persons who are competent to make contracts to fix upon such terms of the contract as they may agree mutually, as long as such terms are not...

Adequacy Of Consideration - At Law - Value Not Fixed In Money. Continued: Maryland. Ziehm v. Frank Steil Brewing Co., 131 Md. 582, 102 Atl. 1005. Massachusetts. Nash v. Lull, 102 Mass. 60, 3 Am. Dec. 435. Michigan. Davis v. Phillips, 85 Mich. 198, 48 N. W. 513; Valley Cit...

Sec. 636. Inadequacy Rendering Contract Unconscionable At Law: The unconscionable contract has already been discussed from the standpoint of constructive fraud and undue influence in equity.1 It may be noted here that the same doctrine has been applied by some co...

Sec. 637. Adequacy Of Consideration In Equity: Whether equity will regard inadequacy of consideration as ground for treating a contract as invalid for the purpose either of granting or of denying its own special remedy in the absence of other grou...

Sec. 638. General Effect Of Inadequacy Of Consideration In Equity: Inadequacy of consideration is not, by itself, ground for granting equitable relief as by rescission or cancellation.1 If there is no undue influence or fraud, a party may exact whatever consideration...

Sec. 639. What Constitutes Inadequacy Of Consideration: Whether a consideration is adequate or not depends very largely on the circumstances of each particular case. No arbitrary rule as to the percentage of the actual value that must be paid to constitute...

Sec. 640. Adequacy As Of Date Of Transaction: Whether a consideration is inadequate or not, depends upon the facts as they exist at the time of the transaction, and not upon the facts as they develop thereafter.1 A conveyance of all the grantor's...

Sec. 641. Unconscionable Contracts In Equity - Nature: The discussion of the facts which, in combination with inadequacy of con-sideration, avoid a contract has carried us well into the subject of the unconscionable contract. An unconscionable contract is...

Unconscionable Contracts In Equity - Nature. Continued: 14 Marks v. Gates, 154 Fed. 481, 83 C. C. A. 321. 15Butler v. Duncan, 47 Mich. 94, 41 Am. Rep. 711, 10 N. W. 123; Hough v. Hunt, 2 Ohio 495, 15 Am. Dec. 569. 16 Stotesbury v. Huber, 237 Fed. 413. 1...

Sec. 642. Unconscionable Contracts In Equity - Effect: Equity will not enforce an unconscionable contract.1 Specific performance will be refused.2 Affirmative relief against an unconscionable contract will be given only if the inadequacy is gross.3 The th...

Sec. 643. Adequacy Of Consideration Whose Value Is Fixed By Law In Money: If the promise is to pay money or to do something, the value of which is fixed by law in money, and the consideration is the payment of money or the doing of something which is fixed by law at a value...

Sec. 644. Nominal Consideration - Nature: A nominal consideration is usually a small sum of money, such as a cent or a dollar, payment of which is frequently recited in a contract as a mere form.1 The fact that the consideration is small does...

Sec. 645. Nominal Consideration Held Sufficient: Whether a nominal consideration is sufficient, is a question upon which there is a divergence of authority, especially in obiter. In some jurisdictions a nominal consideration is said to be sufficien...

Sec. 646. Nominal Consideration Held Insufficient: In other jurisdictions a nominal consideration is insufficient.1 A contract which recites a consideration of $1 and other good and valuable considerations in hand paid as consideration for a promise...

XL. Recital Of Consideration. Sec. 647. Conclusive Effect Of Recital Of Consideration - Simple Executory Contracts: Whether the recital of a consideration in a written contract is conclusive, or whether the fact as to the existence and sufficiency of the consideration may be shown, is a question upon which there is...

Sec. 648. Sealed Contracts: In some of the cases in which it is said that extrinsic evidence is inadmissible to contradict the recital of a valuable consideration in a contract so as to render it inoperative in law, the contract...

Sec. 649. Deeds: In many of the cases which are cited to show that the recital of a valuable consideration is conclusive, are cases of deeds, not contracts. If the instrument is a conveyance, and not a contract, the r...

Sec. 650. Presumption Of Consideration - Contract Under Seal: It is frequently said that a seal raises a presumption of consideration.1 This statement, however, as is shown elsewhere,2 is based upon a misunderstanding of the common-law effect of the seal and upo...

Sec. 651. Presumption Of Consideration - Negotiable Contract: At common law negotiable contracts are said to import a consideration; that is, in the absence of evidence on the point it will be presumed that there was a sufficient consideration, and it is for the...

Sec. 653. Statutory Provisions: By statute, in some jurisdictions, written contracts as a class import a consideration.1 Under such a statute a consideration will be presumed, in the absence of evidence to the contrary, even if the ...

Sec. 654. Presumption Of Consideration - Oral Contract: An o: promise does not import a consideration;1 and if the existence an oral contract is denied, the party must establish every which is essential to the existence of such contract, including consider...

Sec. 655. Conclusive Or Prima Facie Character Of Presumption: If the written contract recites a consideration, the question whether such recital of a consideration is conclusive or whether it may be rebutted by showing that there was in fact no consideration, is...

Sec. 656. Present Standing Of The Doctrine Of Consideration: If we judge by numerical authority, the doctrine of consideration is now thoroughly entrenched in our law. It has been sharply criticized by legal essayists as being indefinite in its application and ...

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