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.
10 More v. Luther, 153 Mich. 206, 18 L. R. A. (N.S.) 149, 116 N. W. 986.
The opposite result as to assumption of risk was reached in Preble v. Preble, 115 Me. 26, 97 Atl. 9.
11 Crouch v. Southern Surety Co., 131 Tenn. 260, L. R. A. 1915D, 966, 174 S. W. 1116.
12 Crouch v. Southern Surety Co., 131 Tenn. 260, L. R. A. 1915D, 966, 174 S. W. 1116.
13 Wood v. School District, 80 Neb. 722, 15 L. R. A. (N.S.) 478, 115 N. W. 308.
In order to operate as an assumption of risk, the contract must provide therefor either expressly or by fair implication.15 A building contract which by fair implication imposes the risk upon the builder, is not modified by a provision in a bond given to secure performance of such contract relieving the contractor from any damage resulting from an act of God.16
Sec. 2715. Apportionment of loss by special contract If the contract contains an express provision as to the apportionment of loss in case of impossibility, full effect is given to such provision.1 A contract for supplying meals on board a steamer which was used to inspect the proposed naval review at the coronation of Edward VII, contained a provision that if the review was canceled before any liability was incurred by the caterer, no liability should attach to the adversary party. Under this contract it was held that if the review was canceled before the caterer had incurred any expense for refreshments, and had incurred only a small expense for articles such as knives, the adversary party was liable only for the expense thus incurred;2 and if he had given a check for an advance payment and such check was stopped before it was cashed, no additional liability was incurred thereby.3 Effect is given to a contract between a property owner and a builder, apportioning the loss in case of fire.4
Sec. 2716. Risk not assumed - Theory that loss lies where it falls.
If the parties to the contract have not entered into any agreement as to the assumption of a risk by either, it is held in England and in some of the states of the United States, that the loss lies where it falls.1 Where this view prevails, one who has agreed to do work upon a building or to construct an addition thereto, can not recover in quasi-contract for the value of the work which he has done up to the time at which the building was destroyed.2 Under this theory no recovery can be had for the value of property which has been transferred in consideration of a promise which has subsequently become impossible by act of the law.3 If A conveys realty to a railway company in consideration of annual passes, and subsequently the issuing of such passes is made unlawful, it has been held that A can not have rescission in equity and recover the realty thus conveyed and that damages can not be awarded to him.4 While the result which is reached under this theory is the same that would have been reached if both parties had each agreed to assume the risk of discharge by impossibility, and to make no claim for compensation in case of such discharge, the result can not be justified upon that ground, since in these cases the parties did not contemplate such discharge and made no provision therefor. The rule which denies compensation to either in such case is a rule of law and not an attempt to give effect to their intention.
14 Wood v. School District; 80 Neb. 722, 15 L. R. A. (N.S.) 478, 115 N. W. 308.
15 Milske v. Steiner Mantel Co., 103 Md. 235, 5 L. R. A. (N.S.) 1105, 63 Atl. 471.
16 Milske v. Steiner Mantel Co., 103 Md. 235, 5 L. R. A. (N.S.) 1105, 63 Atl. 471.
1 Elliott v. Crutchley  A. C. 7 [affirming, Elliott v. Crutchley (1904), 1 K, B. 565; which affirmed, Elliott v.
Crutchley (1903), 2 K. B. 476]; Savage v. Smith, 170 Cal. 472, 150 Pac. 353.
2 Elliott v. Crutchley , A. C. 7 [affirming, Elliott v. Crutchley (1904), 1 K. B. 565; which affirmed, Elliott v. Crutchley (1903), 2 K. B. 476].
3 Elliott v. Crutchley , A. C. 7 [affirming, Elliott v. Crutchley (1904), 1 K. B. 565; which affirmed, Elliott v. Crutchley (1903), 2 K. B. 476].
4 Savage v. Smith, 170 Cal. 472, 150 Pac. 353.
1 England. Appleby v. Meyers, L. R. 2 C. P. 651; Civil Service Co-operative Society v. General Steam Navigation Co. [10031, 2 K. B. 756; Blakeley v. Muller , 2 K. B. 760, note; Chandler v. Webster , 1 K. B. 493.
Alabama. Brumby v. Smith, 3 Ala. 123.
Illinois. Siegel v. Eaton & P. Co., 165 111. 550, 46 N. E. 440.
Indiana. Krause v. Board of Trustees, 162 Ind. 278, 102 Am. St. Rep. 203, 65 L. R. A. Ill, 70 N. E. 264.
Michigan. Fildew v. Besley, 42 Mich. 100, 36 Am. Rep. 433, 3 N. W. 278.
New Hampshire. Dame v. Woods, 73 N. H. 222, 70 L. R. A. 133, 60 Atl. 744.
Washington. Cowley v. Northern Pacific Ry., 68 Wash. 558, 41 L. R. A. (N.S.) 559, 123 Pac. 998.
"The plaintiff contends that he is entitled to recover the money which he has paid on the ground that there has been a total failure of considera-tion. He says that the condition on which he paid the money was that the procession should take place, and that, as it did not take place, there has been a total failure of consideration. That contention does, no doubt, raise a question of some difficulty, and one which has perplexed the courts to a considerable extent in several cases. The principle on which it has been dealt with is that which was applied in Taylor v. Caldwell (3 B. & S. 826) -namely, that, where from causes outside the volition of the parties, something which was the basis of, or essential to the fulfilment of, the contract, has become impossible, so that, from the time when the fact of thai impossibility has been ascertained, the contract can no further be performed by either party, it remains a perfectly good contract up to that point, and everything previously done in pursuance of it must be treated as rightly done, but the parties are both discharged from further performance of it. If the effect were that the contract were wiped out altogether, no doubt the result would be that money paid under it would have to be repaid as on a failure of consideration. But that is not the effect of the doctrine; it only releases the parties from further performance of the contract. Therefore the doctrine of failure of consideration does not apply. The rule adopted by the courts in such cases is, I think, to some extent an arbitrary one, the reason for its adoption being that it is really impossible in such cases to work out with any certainty what the rights of the parties in the event which has happened should be. Time has elapsed, and the position of both parties may have been more or less altered, and it is impossible to adjust or ascertain the rights of the parties with exactitude.' That being so, the law treats everything that has already been done in pursuance of the contract as validly done, but relieves the parties of further responsibility under it." Chandler v. Webster , 1 K. B. 493.
2 Krause v. Board of Trustees, 162 Ind. 278, 102 Am. St. Rep. 203, 65 L. R A, 111, 70 N. E. 264.