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.
In considering the effect of war upon contracts, at least three different classes of cases must be considered. In one class of cases the contract in question was made before the outbreak of war, and it was a valid and lawful contract when it was made; but its continued validity or its performance is affected by the outbreak of the war, because of the fact that the parties to the contract have become alien enemies, or because the performance of such contract by the citizens of one of the belligerent powers will aid the other belligerent power in some way, or at least will involve trading with the enemy. In contracts of this sort the original validity of the contract is assumed, and the questions which are to be considered involve the effect of war upon the contract either by general rules of international law which have been adopted by our courts as a part of our general law, or by the policy of the state in which it is sought to enforce such contract as expressed by its legislation, valid executive proclamations, and the like.1
3 Brown v. Hiatts, 82 U. S. (15 Wall.) 177, 21 L. ed. 128.
4 Brown v. Hiatts, 82 U. S. (15 Wall.) 177, 21 L. ed. 128.
5 Bishop v. Jones, 28 Tex. 294.
6 The Pedro, 175 U. S. 354, 44 L. ed. 105.
7 The Buena Ventura, 175 U. S. 384, 44 L. ed. 206.
1See Sec. 2733 et seq.
On the effect of war on contracts generally, see The Effect of War on Contracts, by John M. Hall, 18 Columbia Law Review 325; The Effect of War on Contracts, by Leslie Scott, 30 Law Quarterly Review 77; Some Legal Consequences of the European War, by Geo. W. Wickersham, 24 Yale Law Journal 412, and The War and Our Patent Laws, by Wm. Macomber, 25 Yale Law Journal, 396.
The second class of cases deals with contracts which are made after the outbreak of war, and which are invalid when made, because of the relation of the parties thereto as being domiciled respectively in the different belligerent countries, or as being citizens of such countries, or which tend to aid the country which is an enemy to that in whose courts it is sought to enforce such contract. In this case, as well as in the former case, the rights of the parties are to be determined by the general rules of international law and by the policy of the state in which it is sought to enforce such contract, as expressed in its legislation and in its executive proclamations. This class of cases differs from the former class in that the state in which it is sought to enforce such contract may in many cases regard it as invalid and illegal from the beginning, so that no rights of any kind can attach thereunder.2
The third class of cases consists of those in which the contract was valid when made and in which the performance of such contract does not involve any violation of ordinary rules of war, such as trading with the enemy, but in which the performance of such contract is made either legally impossible, or practically impossible, as the case may be, by the outbreak of the war. Cases of this sort present questions of impossibility of performance, but the fact that the impossibility is due to the outbreak of the war makes cases of this sort resemble the two preceding cases as much as they resemble the cases of ordinary impossibility.3