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.
Provision is occasionally made for determining the amount of the consideration to be paid or for the amount of compensation to be paid under the contract by arbitration or appraisement as a condition precedent to the right of one or both of the parties to demand further performance. If such provisions do not amount to covenants for renouncing in advance the right of one or both of the parties to seek redress at law,1 they are valid; and full effect is given thereto in accordance with the provisions of the contract.2 Whether such provisions amount to a renunciation in advance of the right of one or both of the parties to invoke redress at law, is discussed elsewhere.3 The effect of the conduct of one of the parties in refusing to appoint the necessary arbitrators or appraisers, is a question which frequently arises in connection with such conditions, and it is discussed subsequently. Under a contract for submitting disputes as to value to arbitration or appraisement, such submission is a condition precedent to recovery.4
This question was raised, but not decided, in Badger v. Glens Falls Ins. Co, 49 Wis 389, 5 N W. 845, as the delay, if any, was waived.
6 See Sec. 2103 et seq. 7 See Sec. 2112
8 Banco de Sonora v. Bankers' Mutual Casualty Co, 124 Ia. 576, 104 Am. St Rep 367, 100 N W. 532.
9 Hoban v Hudson, 120 Minn. 335, L R A 1010B, 1114, 152 N. W. 723.
1 See Sec. 710 et seq.
2 England. Spurrier v. La Cloche , A C. 440.
United States. Hamilton v. Liverpool, London & Globe Ins. Co., 136 U. 8. 242. 31 L ed. 410.
Alabama. Headley v. Aetna Ins. Co., - Ala. -, 80 So 466
California. Old Saucelito Land and Dry Dock Co. v. Commercial Union Assurance Co., 66 Cal. 253, 5 Pac. 232; Adams v. South British and National Fire and Marine Ins. Companies, 70 Cal. 108, 11 Pac. 627; Carroll v. Girard Fire Ins. Co., 72 Cal. 207, 13 Pac. 863.
Georgia. Southern Mutual Ins. Co. v. Turnley, 100 Ga. 206, 27 S. E. 975.
Iowa. Zalesky v. The Home Ins. Co., 102 Ia. 613, 71 N. W. 566.
Maine. Perry v. Cobb, 88 Me. 435, 49 L. R. A. 380, 34 Atl. 278.
Maryland. Caledonian Ins. Co. v. Traub, 83 Md. 524, 35 Atl. 13.
Massachusetts. Hutchinson v. Liverpool and London and Globe Ins. Co., 153 Mass. 143, 10 L. R. A. 558, 26 N. E. 430; Lamson Consolidated Store Service, etc., Co. v. Prudential Fire Ins. Co., 171 Mass. 433, 50 N. E. 043; Second Society of Universalists v. Royal Ins. Co., 221 Mass. 518, 109 N. E. 384.
In some jurisdictions the determination of a third party or of arbitrators may be made prima facie valid by the agreement of the parties, but it can not be made final and conclusive.5 Where this view prevails, the construction of a contract made by an engineer,6 or his estimates,7 may be made correct prima facie but not conclusively. Under a contract of guaranty insurance, the employe may agree that a voucher showing a payment by the insurance company to his employer shall be prima facie evidence of such payment; but a provision to the effect that such voucher is conclusive is inoperative.8 A provision in a contract of guaranty insurance, to the effect that the receipts which the creditor gave to the guaranty company on account of the principal debtor, shall be regarded as conclusive evidence of the liability of such principal debtor, and of the amount of such liability, except in case of fraud, is valid,9 although a provision that such receipt should be conclusive even as against the defense of fraud is invalid.10
Michigan. Chippewa Lumber Co. v. Phenix Ins. Co., 80 Mich. 116, 44 N. W. 1055.
Minnesota. Gasser v. Sun Fire Office, 42 Minn. 315, 44 N. W. 252; Mos-ness v. German-American Ins. Co., 50 Minn. 341, 52 N. W. 032.
Hew Jersey. Wolff v. Liverpool and London and Globe Ins. Co., 50 N. J. L. 453, 14 Atl. 561.
North Carolina. Pioneer Mfg. Co. v. Phoenix Assurance Co., 106 N. Car. 28, 10 S. E. 1057.
North Dakota. Leu v. Commercial Mut. Fire Ins. Co., 15 N. D. 360, 107 N. W. 59.
Ohio. Phoenix Insurance Co. v. Car-nahan, 63 O. S. 258, 58 N. E. 805; Graham v. Ins. Co., 75 O. S. 374, 79 N. E. 930.
Texas. Scottish Union and National Ins. Co. v. Clancy, 71 Tex. 5, 8 S. W. 630.
Wisconsin. Chapman v. Rockford Ins. Co., 89 Wis. 572, 28 L. R. A. 405, 62 N. W. 422; Montgomery v. American Central Ins. Co., 108 Wis. 146, 84 N. W. 175.
Contra, German-American Insurance Co. v. Etherton, 25 Neb. 505, 41 N. W. 406; Hartford Fire Insurance Co. v. Hon, 66 Neb. 555, 103 Am. St. Rep. 725, 60 L. R. A. 436, 92 N. W. 746.
Contra, by statute, Insurance Co. v. Kempner, 132 Ark. 215, 200 S. W. 986.
3 See Sec. 719 et seq.
4 England. Scott v. Avery, 5 H. L. Cas. 811.
United States. Hamilton v. Liverpool, London & Globe Ins. Co., 136 U.
S. 242, 34 L. ed. 419; Mundy v. Louisville & N. Ry., 67 Fed. 633, 14 C. C. A. 583; Conners v. United States, 130 Fed. 609.
Connecticut. Hall v. Norwalk Fire Ins. Co., 57 Conn. 105, 17 Atl. 356.
New Jersey. Wolff v. Liverpool and London and Globe Ins. Co., 50 N. J. L. 453, 14 Atl. 561.
New York. Delaware & Hudson Canal Co. v. Pennsylvania Coal Co., 60 N. Y. 250.
North Dakota. Leu v. Commercial Mutual Fire Insurance Co., 15 N. D. 360, 107 N. W. 59.
Ohio. Mansfield and Sandusky City, etc., Ry. v. Veeder, 17 Ohio 385; Phoenix Insurance Co. v. Carnahan, 63 O. S. 258, 58 N. E. 805; Graham v. Ins. Co., 75 O. S. 374, 79 N. E. 930.
Pennsylvania. Faunce v. Burke, 16 Pa St. 469, 55 Am. Dec. 519.
California. Holmes v. Richet, 56 Gal. 307, 38 Am. Rep. 54.
Michigan. Weggener v. Greenstine, 114 Mich. 310, 72 N. W. 170.
Nebraska. Schrandt v. Young, 62 Neb. 254, 86 N. W. 1085; Hartford Fire Ins. Co. v. Hon, 66 Neb. 555, 103 Am. St. Rep. 725, 60 L. R. A. 436, 92 N. W. 746.
Oregon. Ball v. Doud, 26 Or. 14, 37 Pac. 70.
Pennsylvania. Needy v. German-American Ins. Co., 197 Pa. St. 460, 47 Atl. 739.
West Virginia. Baer's Sons Grocer Co. v. Fruit Packing Co., 42 W. Va. 359. 26 S. E. 191.