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.
Where such compensation cannot be made, the effect of partial failure as discharge depends in part upon whether it goes to a vital term of the contract or not. If the failure of consideration affects a vital part of the contract, it operates as a discharge of the entire contract, including subsidiary provisions.1 A contract whereby a city leases its waterworks to A, who has to operate it and keep the machinery in order, is discharged if A becomes habitually intoxicated and ruins the machinery. The city may rescind such contract, although it contains no forfeiture clause.2 An agreement whereby a wife relinquishes all her rights in her husband's property, in consideration of her having the care and custody of her minor sou, is discharged where her husband in his lifetime took such sou from her by stealth, detained him during the husband's life, and sued his wife for a divorce, praying for the custody of such son. The wife can, therefore, assert her rights in her husband's estate upon his death.3 An electric light company made a contract with the citizens of a city to move their plant there, and to make an invoice with a guaranty that the invoice would show three hundred thousand dollars surplus above liabilities. In consideration of this, the Light Plant was to receive certain land and a bonus. The bonus was paid, and with it the company erected buildings upon the land, but the invoice was never made. This was held to be such failure of consideration as to entitle the parties who had paid the bonus to recover it.4 A owned a patent for a method of transferring wheat from one car to another and weighing it. He made a contract with a railroad company, whereby he was to erect his scales at a given point and transfer grain for the company, and they were to pay him therefor one half of the saving over the old system. After performance of the contract had begun, A gave information as to the weight of the corn to other parties, to the injury of the railroad. This was held to be sufficient breach to justify the railroad in treating the contract as discharged.5 A contract to sell a hotel, furniture and fixtures at a certain appraisement, the party refusing to accept the appraisement to forfeit a certain deposit, is discharged if the vendor prevents the vendee from being present at or taking any part in such appraisement.
2 Ft. Wayne Electric Light Co. v. Miller, 131 Ind. 499; 14 L. R. A. 804; 30 N. E. 23.
3 Rioux v. Brick Co.. 72 Vt. 148; 47 Atl. 406.
4 Miillreed v. Thumb. 119 Mich. 578; 78 N. W. 658.
5 Withers v. Green. 9 How. (U. S.) 213.
6 Withers v. Greene. 9 How. (U. S.) 213.
7 Thornton v. Wynn. 12 Wheat. (U. S.) 183.
1 Kauffman v. Raeder. 108 Fed. 171; 54 L. R. A. 247; 47 C. C. A. 278: Parker v. Bond, 121 Ala. 529; 25 So. 898.
2 Mahon v. Columbus, 58 Miss. 310; 38 Am. Rep. 327.
3 Bodwell v. Bodwell, 66 Vt. 101; 38 All. 870.
4Ft. Wayne, etc.. Co. v. Miller,
131 Ind. 400; 14 L. R. A. 804; 30 N. E. 23.
5 Lake Shore, etc.. R. R. v. Rich-ards. 152 111. 50; 30 L. R. A. 33; 38 N. E. 773.
The vendee may therefore recover the amount deposited.6 A' note and mortgage given in consideration of money to B, loaned thereafter, may be canceled upon repayment of the amount actually loaned, where the lender refuses to advance the entire amount agreed upon.7