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.
The difficulties which arise in dealing with provisions of this sort are to a large extent questions of construction. Since the courts prefer to construe a contract so as to give it legal effect if possible,1 they prefer to construe such a provision if possible, so as to require actual bona fide dissatisfaction on the part of the adversary party as a condition precedent to his evading liability thereunder.2 Even in contracts which are personal in their nature, or which involve matters of personal or artistic taste, this principle has been applied, and the party to whose satisfaction performance is to be made, can not evade liability by alleging that he is dissatisfied if it can be shown that in fact he is satisfied.3. Under a contract for personal services, the termination of such contract for any other reason than genuine dissatisfaction, is breach, and not discharge by condition.4 Thus one who is employed as brakeman permanently, as long as his services are satisfactory in consideration of his release of damages for personal injury, can recover where he is discharged because brakemen were no longer to be employed where he was working.5 It has been said, however, that in cases involving personal taste, the person to whose satisfaction the contract is to be performed is "the only person who had a right to decide this question";6 but in this case it was, on the one hand, doubtful whether the transaction amounted to a contract,7 and, on the other hand, it appeared that the party who was dissatisfied with the picture of his deceased daughter, was acting in good faith, although he was unable clearly to indicate in what respect it was a poor likeness.8
"Such considerations, however, do not constitute the underlying reason for upholding the contract. That reason is well stated in Delaware & H. C Co. v. Pennsylvania C. Co., 50 N. Y. 258, as follows:
"'When the parties stand upon an equal footing, and intelligently and deliberately, in making their executory contracts, provide for an amicable adjustment of any difference that may arise, either by arbitration or otherwise, it is not easy to assign at this day any good reason why the contract should not stand and the parties made to abide by it, and the judgment of the tribunal of their choice.'
"Whether this is a wise or provident contract is entirely beside the question. That is something with which courts are not concerned. There is no doubt that parties may contract in such cases to submit such differences to an umpire or arbiter and agree that his decision shall be final. The validity of that agreement is not dependent upon the relation which the arbiter bears to the parties. They may agree to partial as well as impartial arbiters if they see fit to do so. Courts have no reason to interfere with the rights of parties to voluntarily contract in the one case that they do not have in the other. We therefore hold that this provision of the contract is valid and operates to confer upon the commissioners the same powers that are conferred upon architects by similar provisions in building contracts." Keachie v. Starkweather Drainage District, 168 Wis. 298, 170 N. W. 236.
1 See Sec. 2050.
2 United States. Silsby Mfg. Co. v. Chico, 24 Fed 893; Campbell Printing Press Co. v. Thorp, 36 Fed. 414, 1 L. R. A. 645.
Alabama. Electric Lighting Co. v. Elder, 115 Ala. 138, 21 So. 983; Worth-ington v. Gwin, 119 Ala. 44, 43 L. R. A. 382, 24 So. 730; Jones v. Lanier, -Ala. -, 73 So. 535.
Colorado. McCartney v. Badovinac, 62 Colo. 76, L. R. A. 1917A, 1146, 160 Pac. 190.
Georgia. Mackenzie v. Minis, 132 Ga. 323, 23 L. R. A. (N.S.) 1003, 63 S. E. 900.
Iowa. Hay v. Hassett, 174 Ia. 601, 156 Ia 734.
Montana. Waite v. Shoemaker, 50 Mont. 264, 146 Pac. 736.
New Jersey. Williams v. Hirshhorn, 91 N. J. L. 419, 103 Atl. 23.
Oregon. Paulson v. Weeks, 80 Or. 468, 157 Pac. 590.
Pennsylvania. Singerly v. Thayer, 108 Pa. 291, 56 Am. Rep. 207, 2 Atl. 230; Adams, etc., Works v. Schnader, 155 Pa. St. 394, 35 Am. St. Rep. 893, 26 Atl. 745.
In contracts which are not personal in their nature, or which do not involve matters of personal or artistic taste, there is no doubt that genuine dissatisfaction is necessary;9 but whether such contracts are to be so construed that a genuine dissatisfaction on the part of the adversary party is sufficient to enable him to avoid liability, or whether such provision is merely equivalent to a covenant for full and complete performance, is a question upon which there is a conflict of authority.10