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.
War affects many prior valid contracts which have been entered into by the citizens of the respective belligerents, or which require for their performance commercial intercourse across the lines of war, or the performance of which will tend to aid the country which is the enemy of that in whose courts it is sought to enforce such contract.
11 Ricord v. Bettenham, 3 Burr. 1734; Cornu v. Blackburne, 2 Doug. 640.
12Miller v. The Resolution, 2 U. S. (2 Dal1.) 1, 1 L. ed. 263.
13 Anthon v. Fisher, 3 Doug. 166. See also, Anthon v. Fisher, 2 Doug.
14 Anthon v. Fisher. 3 Doug. 166. See also, Anthon v; Fisher, 2 Doug.
15 22 Geo. Ill, c. 25, Sec. 2, 3.
Subsequently English captors were forbidden to ransom foreign vessels except in cases of extreme necessity. 33 Geo. Ill, c. 66, 36.
16Antoine v. Morshead, 6 Taunt. 237; Daubuz v. Morshead, 6 Taunt. 332.
While contracts are either dissolved or suspended if they fall within these classes,1 there has been a marked lack of harmony in judicial expression as to the test or tests which are to be applied for determining what effect, if any, war has upon prior contracts. Occasionally language is used which seems to imply that war terminates all prior contracts between the citizens of the respective belligerents, but this rule is far too sweeping. The very courts which have occasionally expressed such views have enforced many such contracts, at least after the termination of the war. It has been suggested that the only contracts which will be ended by the war are those which tend to aid the enemy or which are contrary to the general policy of the government in whose courts it is sought to enforce such contract.2 It has been suggested that the test of the effect of war upon the contract is whether the contract requires commercial intercourse across the lines of war.3
It has been suggested that if the contract is to the disadvantage of the alien enemy, it is not affected by the war;4 but if this is to be construed as meaning that contracts which involve commercial intercourse across the lines of war will be enforced if disadvantageous to the alien, the principle is opposed by the great weight of authority.5 The rule which forbids dealings of a commercial character with the enemy in time of war, originated in the idea that every subject of one of the belligerent powers was at war with every subject of the other belligerent power, and that commercial intercourse involved a breach of his allegiance; while in most of these cases the same result is now justified on the ground that such commercial intercourse may be of advantage to the enemy in enabling it to carry on the war.6
1Conley v. Burson, 48 Tenn. (1 Heisk.) 145.
2 Sands v. New York Life Ins. Co., 50 N. Y. 626, 10 Am. Rep. 535.
3 Williams v. Paine, 7 D. C. App. 116.
While the result which was reached in this case was correct, the real point which was decided, that a power of attorney to convey land was not revoked as a matter of law by the fact that the donor of the power who had given such power in the District of Columbia before the outbreak of the Civil War for the purpose of conveying land in such district, had gone to the Confederacy at the outbreak of the war, and had remained there. The facts of the case, therefore, fall short of authorizing the broad rule that commercial intercourse is the sole test or even the primary test. Williams v. Paine, 169 U. S. 55, 42 L. ed. 658.
See Sec. 2747 et seq.
5 See Sec. 2734.