This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
A contract in which one party agrees to perform his part to the "satisfaction " of the adversary party presents important questions as to what constitutes satisfaction. Such contracts are enforceable according to the intent of the parties,1 though from their nature some doubt has been expressed whether they could properly be called contracts.2 The difficulty lies in determining what is the real intention of the parties to such a contract. The authorities are unanimous that to prevent liability after reasonably substantial performance, the dissatisfaction of the party for whom the work is done must be genuine and bona fide.3 If the dissatisfaction is genuine, the question is presented whether this alone will prevent liability from existing, or whether the dissatisfaction must not only be genuine, but must also be caused by such omissions or defects as would cause a reasonable man to be dissatisfied. This depends in part upon the nature of the contract. If the subject-matter of the contract involves personal taste or feeling, dissatisfaction, if genuine, prevents liability from existing, even if a reasonable man under similar circumstances would have been satisfied.4 Thus an artist who agreed to paint for A a portrait of A and his wife, which he agreed should be "satisfactory " to A cannot recover if A is not satisfied, no matter how good the picture is.5 The same result has been reached under a contract to make a portrait of a deceased child from a photograph, to the satisfaction of the father,6 or to make a plaster bust of a deceased husband to the satisfaction of the widow.7 Thus a contract for furnishing roofing tile of a rare and peculiar color,8 or for making a suit of clothes9 to the satisfaction of the adversary party is not performed unless he is satisfied. So a contract for personal services as long as they are "satisfactory " to the employer may be terminated by him at any time when he is dissatisfied in good faith, and the justice of such dissatisfaction cannot be inquired into.10 Thus in case of actual dissatisfaction, whether justified or not, an employer may terminate a contract of employment as chef,11 furrier,12 or manager of a business.13 Thus a county may discharge a superintendent of bridge work who is employed as long as his work is satisfactory to the county commissioners, where they are dissatisfied with him for advising them to accept exorbitant bids for bridge material in which he was interested, even if such advice was not within the terms of his employment, where the superintendent and the board both treated it as part of his work.14 Even under such a contract a discharge of the employee for any reason other than genuine dissatisfaction is a breach of the contract. Thus one who is employed as brakeman permanently as long as his services are satisfactory in consideration of his release of damages for personal injury, can recover where he is discharged because brakemen were no longer to be employed where he was working.15 Dissatisfaction such as justifies termination of the contract may exist before performance has begun,16 as it may be caused by the delay of the adversary party in commencing performance.17 An analogous line of cases is found in contracts of employment in which the amount of wages is left to the decision of the employer. In such cases the employer, if acting in good faith, is the sole judge,18 and his decision is conclusive if he fixes the compensation below what the court would hold to be a reasonable amount.19 Thus under a contract to render services as attorney for such a fee as the client "is able to pay and thinks reasonable," the client's decision is conclusive.20 A contract to increase the salary of an employe if at any time the amount of increased business or the character of the employe's work fairly justifies a change of mind on the part of the employer as to the amount to be paid, makes the employer the sole judge as to such facts.21 If the subject-matter of the contract does not involve personal taste and feeling, there is a conflict of authority on the question of whether a genuine but unreasonable dissatisfaction will prevent liability from existing under the contract. Some authorities hold that even in cases of this class a genuine dissatisfaction will prevent the party dissatisfied from being liable upon the contract, even if a reasonable man would have been satisfied.22 Examples of contracts in which this principle has been applied are, a contract to make brick " to the satisfaction " of the vendee's superintendent,23 a contract to tow lumber,24 to sew cotton bales ;25 and a contract to put in a heating apparatus to the vendee's satisfaction, the contract providing that it should give entire satisfaction, and that if it proved "unsatisfactory after a thorough and reasonable trial, we will remove it at our own expense."26 Similar results have been reached under a contract to furnish a printing press,27 a patent elevator,28 a harvesting machine,29 a binding machine,30 or an organ 31 which is to operate to the satisfaction of the vendee. So one who is to make a book-case to the satisfaction of another cannot recover without showing that such other was in fact satisfied. It is not enough to show that he ought to have been satisfied.32 If a machine is sold to work in a "satisfactory " manner, this means that its operation must be satisfactory as the vendee operates it, even though a person of ordinary skill could operate it properly and other persons in the vendee's business would be satisfied.33 Thus a test of a heater for a residence is sufficient if made under the supervision of ordinary servants. The fact that a skilled engineer and a plumber can make it work in a satisfactory manner does not show performance.34 If the machine operates reasonably well but not to the satisfaction of the vendee, he may avoid the contract, but he cannot keep the machine and recoup damages.35 So a provision for paying the physician of a railroad company, "subject to the approval" of certain officers of the railroad makes their approval a condition precedent to recovery.36 Other authorities hold that a contract to do work not involving personal taste or feeling to the satisfaction of the adversary party means that the work must be so done that the adversary party, if a reasonable man, would be satisfied therewith.37 Among contracts to which this principle applies are contracts to sink a well which will produce a satisfactory flow of water;38 to put in a heating apparatus in " first-class working order" to be paid for on "satisfactory completion" when "such acknowledgment has been made by the owner or work demonstrated;" 39 and to alter a boiler, payment to be made when the owner is "satisfied the boilers as changed are a success."40 A contract to finish wood-work " in the best workmanlike manner to the entire satisfaction of the owner " is performed by doing the work in a good and workmanlike manner.41 A similar result was reached under a contract for laying tiles on a roof according to certain plans and specifications to the satisfaction of the owner.42 A sold pumps to B which were to work in a satisfactory manner. This was held to mean to the satisfaction of a reasonable person, and not necessarily the city engineer, though A knew that B was to deliver such pumps to the city under his contract with it, subject to the engineer's approval.43 Similar results have been reached under a contract to furnish an evaporator,44 or graduated milk-pans,45 or a binding machine40 to work to the satisfaction of the vendee. So a contract to furnish a good and satisfactory title to real estate47 or to furnish a " first-class " title to be passed upon by vendee's attorney48 are each satisfied by a good marketable title. A different view seems to be entertained in some states; and the dissatisfaction of the attorney, acting in good faith, discharges the contract.49 Similar results have been reached under a contract to furnish a satisfactory lease.50 A contract to do a piece of work to the "entire satisfaction" of the adversary party, has been held to be performed when done in a proper manner,51 as under a contract employing an actor.52 A contract to excavate for a railroad "according to stakes set by the engineer and to his satisfaction" requires excavation only to stakes then in place and does not give the engineer the right to change stakes until the cut is completed to his satisfaction.53 So a contract to erect a wall, giving to the owner power to determine all questions as to performance, does not give him power to reject arbitrarily.54 A contract for electric lighting to meet the approval of a certain electric light company and to be a first-class job, does not make such approval a condition precedent so as to oblige the contractor to obtain such inspection and approval.55 A contract to sell hops, reserving to the vendees the right to terminate the contract if on examination they should determine that the hops to be packed would not produce the quality called for, does not give them the right to reject arbitrarily.56 Such contract, therefore, has a consideration and is mutually binding.