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.
Other authorities hold that a provision in a contract not involving personal taste or feeling, or any personal element, to the effect that it is to be performed to the satisfaction of the adversary party, means only that performance must be such that the adversary party, if a reasonable man, would be satisfied therewith.1 Accordingly, the fact that the adversary party is in fact not satisfied does not discharge his liability under this theory, if it is found that a reasonable man would have been satisfied with like performance. While this theory furnishes ample protection against unreasonable conduct on the part of the adversary party, it practically eliminates from the contract the provision that the contract is to be performed to the satisfaction of the adversary party, and it enables the party who has performed the contract to recover as though such words were not included therein.
Among contracts to which this principle applies are contracts to sink a well which will produce a satisfactory flow of water;2 to put in a heating apparatus in "first-class working order," to be paid for on "satisfactory completion" when "such acknowledgment has been made by the owner or work demonstrated";3 and to alter a boiler, payment to be made when the owner is "satisfied the boilers as changed are a success."4 A contract to furnish wire doors and screens and to fit them in a house, to be paid for "on satisfactory completion of the work," is performed so that the contractor may recover if he has performed so that a reasonable man would be satisfied with such performance.5 In any event, the satisfaction which is provided for relates to the method in which the contractor has performed the work, and not to the original selections made by the property owner.6 A contract to finish woodwork "in the best workmanlike manner to the entire satisfaction of the owner," is performed by doing the work in a good and workmanlike manner.7 A similar result was reached under a con-tract for laying tiles on a roof according to certain plans and specifications to the satisfaction of the owner.8 A sold pumps to B, which were to work in a satisfactory manner. This was held to mean to the satisfaction of a reasonable person, and not necessarily the city engineer, though A knew that B was to deliver such pumps to the city under his contract with it, subject to the engineer's approval.9 Similar results have been reached under a contract to furnish an evaporator,10 or graduated milk-pans,11 or a binding machine,12 or hoisting towers and equipment therefor,13 to the satisfaction of the vendee. If a machine is sold under an agreement that it is to work satisfactorily and that if it does not do so the seller is to be notified and given an opportunity to send an expert to make it work satisfactorily, the purchaser must give the machine a fair test, must give the requisite notice, and if the seller's employe does not make it work satisfactorily, he must return the machine within a reasonable time.14
24 Haney-Campbell Co. v. Creamery Association, 119 Ia. 188, 03 N. W. 297.
25 Adams, etc., Co. v. Schnader, 155 Pa. St. 394, 35 Am. St. Rep. 893, 26 Atl. 745.
26 Campbell Printing Press Co. v. Thorp, 36 Fed. 414, 1 L. R. A. 645.'
1 Alabama. Higgins Mfg. Co. v. Pearson, 146 Ala. 528, 40 So. 579.
Colorado. McCartney v. Badovinac, 62 Colo. 76, L. R. A. 1917A, 1146, 160 Pac. 100.
Illinois. Keeler v. Clifford, 165 III. 544, 46 N. E. 248.
Iowa. Ellis v. Interstate Business Men's Accident Association, 183 Ia. 1279, L. R. A. 1918F, 414, 168 N. W. 211
Massachusetts. Hawkins v. Graham, 140 Mass. 284, 14 Am. St. Rep. 422, • 21 N. E. 312; Lockwood Mfg. Co. v. Regulator Co., 183 Mass. 25, 66 N. E. 420; C. W. Hunt Co. v. Boston Elevated Ry. Co., 199 Mass. 220, 85 N. E. 446; Cashman v. Proctor, 200 Mass. 272, 86 N. E. 284.
Michigan. Hutton v. Sherrard, 183 Mich. 356, L. R. A. 1915E, 976, 150 N. W. 135.
New York. Bowery National Bank v. Mayor, etc., 63 N. Y. 336; Thompson v. Postal Life Ins. Co., 226 N. Y. 363. 123 X. E. 750.
South Dakota. Richison v. Mead, 11 S. D. 630, 80 N. W. 131.
2 Richison v. Mead, 11 S. D. 639, 80 N. W. 131.
3 Hawkins v. Graham, 140 Mass. 284, 14 Am St. Rep. 422, 21 N. E. 312.
4 Duplex Safety Boiler Co. v. Garden, 101 N. Y. 387, 64 Am. Rep. 709, 4 N. E. 749.
5 Higgins Mfg. Co. v. Pearson, 146 Ala 528, 40 So. 579.
6 Higgins Mfg. Co. v. Pearson, 146 Ala. 528. 40 So. 579.
7 Dall v. Noble, 116 N. Y. 230, 15 Am. St. Rep. 398, 5 L. R. A. 554, 22 N. E. 406
8 McNeil v. Armstrong, 81 Fed. 943.
9 Lockwood Mfg. Co. v. Regulator Co., 183 Mass. 25, 66 N. E. 420.
10 Hartford Sorghum Mfg. Co. v. Brush, 43 Vt. 528.
11 Daggett v. Johnson, 49 Vt. 945
12 May v. Hoover, 112 Ind. 455, 14 N. E. 472.
13 C. W. Hunt Co. v. Boston Elevated Ry. Co., 199 Mass. 220, 85 N. E. 446.
14 Auto-Fedan Hay Press Co. v. Ward, 89 Kan. 218, 50 L. R. A. (N.8.) 783, 131 Pac. 595.
Under a contract to furnish a manufacturing plant "to the acceptance" of the adversary party, it is sufficient if a plant is furnished which would satisfy a reasonable man as a performance of the specifications therefor.15 The purchaser can not avoid the contract if the plant as furnished conforms to the specifications, although it is not sufficient to perform the functions which he decided it to perform.16 If the principal has reserved the power to approve of sales made by an agent, and if the agent has power to purchase such property himself, the principal can not refuse arbitrarily to approve a contract by which the agents agree to buy such property;17 and the vendor's refusal to investigate the sufficiency of the security which is offered, and to make inquiry of the vendee's banker to whom he is referred for information, amounts to an arbitrary refusal.18
A contract to furnish a good and satisfactory title to real estate is performed by furnishing a marketable title.19 Similar results have been reached under a contract to furnish a satisfactory lease.20
A contract to do a piece of work to the "entire satisfaction" of the adversary party, has been held to be performed when done in a proper manner,21 as under a contract employing an actor.22 A contract to excavate for a railroad "according to stakes set by the engineer and to his satisfaction," requires excavation only to stakes then in place and does not give the engineer the right to change stakes until the cut is completed to his satisfaction.23 So a contract to erect a wall, giving to the owner power to determine all questions as to performance, does not give him power to reject arbitrarily.24 A contract for electric lighting to meet the approval of a certain electric light company and to be a first-class job, does not make such approval a condition precedent so as to oblige the contractor to obtain such inspection and approval.25 A contract to sell hops, reserving to the vendees the right to terminate the contract if on examination they should determine that the hops to be packed would not produce the quality called for, does not give them the right to reject arbitrarily.26 Such contract, therefore, has a consideration and is mutually binding.
15 Cashman v. Proctor, 200 Mass. 272, 86 N. E. 284.
16 Cashman v. Proctor, 200 Mass. 272, 86 N. E. 284.
17 Hutton v. Sherrard, 183 Mich. 356, L. R. A. 1915E, 976, 150 N. W. 135.
18 McCartney v. Badovinac, 62 Colo. 76, L. R. A. 1917A, 1146, 160 Pac 190.
19 Moot v. Investment Association, 157 N. Y. 201, 45 L. R. A. 666, 52 N. E. 1.
See, however, Sec. 2621, notes 18 and 19.
20 Mullally v. Greenwood. 127 Mo. 138, 48 Am. St. Rep. 613, 29 S. W. 1001. 21 Sloan v. Hayden, 110 Mass. 141.
22 Smith v. Robson, 148 N. Y. 252, 42 N. E. 677.
23 Olson v. Ry., 22 Wash. 139, 60 Pa. 156.
24 Schliess v. Grand Rapids, 131 Mich. 52, 90 N. W. 700.
25 Smith v. Packard, 94 Va. 730, 27 S. E. 586.
A contract to furnish evidence to the satisfaction of one of the parties, is held to be performed if the evidence which is furnished is such as would satisfy a reasonable man.27 A contract by which a detective is employed to ascertain the person by whom a certain crime was committed, and payment is to be made when such facts are established to the satisfaction of such person who employs such detective, is performed if the detective furnishes evidence which would satisfy a reasonable man acting in a reasonable manner.28 Under a contract by which a forfeiture of an insurance policy is to be waived if the insured furnishes satisfactory evidence of his insurability, the insured performs, if his medical examination shows that his health is substantially perfect, even if the insurer is not in fact satisfied.29 Under a contract of accident insurance, which provides that no recovery can be had for an accident caused by the discharge of firearms, unless the actual character of such discharge shall be proved by the testimony of at least one person other than the insured, who was an eyewitness of the event, or unless the board of directors are satisfied that the discharge was accidental, it is sufficient if evidence of the actual character of the discharge is offered which would satisfy reasonable men acting reasonably.10 A provision for reinstating one whose policy has lapsed by failure to pay premiums or assessments, subject to the approval of the board of directors, requires reasonable action on the part of the board of directors,31 and it does not give them power to refuse to reinstate such member arbitrarily.32
26 Lilenthal v. Stearns, 121 Fed. 197.
27 McCartney v. Badovinac, 62 Colo. 76, L. R. A. 1917A, 1146, 160 Pac. 190; Ellis v. Interstate Business Men's Accident Association, 183 Ia. 1279, L. R. A. 1918F, 414, 168 N. W. 212; Thompson v. Postal Life Ins. Co., 226 N. T. 363, 123 N. E. 760.
28 McCartney v. Badovinac, 62 Colo. 76, L. R. A. 1917A, 1146, 160 Pac. 190.
29 Thompson v. Postal Life Ins. Co., 226 N. Y. 363, 123 N. E. 760.
30 England. Braunstein v. Accidental Death Ins. Co., 1 Best & S. 782.
United States. Charter Oak L. 7ns. Co. v. Rodel, 96 U. S. 232, 24 L. ed. 434.
Iowa. Ellis v. Interstate Business Men's Accident Association, 188 Ia. 1279, L. R. A. 1918F, 414, 168 N. W. 212.
Massachusetts. Noyes v. Commercial Travelers' Eastern Acci. Asso., 190 Mass. 171, 76 N. E. 665; Traiser v. Commercial Travelers* Eastern Acci. Asso., 202 Mass. 292, 88 N. E. 901.
New York. Reynolds v. Equitable Acci. Asso., 69 Hun 13.
Tennessee. Accident Ins. Co. v. Bennett, 90 Tenn. 256, 26 Am. 8t. Rep. 685, 16 S. W. 723.
Under a contract between a public corporation and a paving contractor, which contains a provision that the council shall retain from the contract price money sufficient to pay unpaid claims for labor or material if sworn statements of such claims are filed with the council, and if the council is satisfied that such claims are just and unpaid, the council, if acting in good faith, may retain such amounts.33
If a provision in a contract under which savings deposits are made, to the effect that in case of the loss or destruction of the savings bank book such deposits can not be withdrawn unless proof is made to the satisfaction of the trustees or the treasurer that such book has been lost or destroyed, is construed as giving to the trustees or the treasurer the final and uncontrolled determination of such question of fact, such provision is regarded as invalid.34