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.
If a contract by which A agrees to collect accounts for B, contemplates the use of A's system of obtaining judgments against the debtors, and advertising such judgments for sale by public advertisement, such contract is entire, and it is discharged by a subsequent statute which renders such advertisement illegal.1 A contract between an employe of a railway and such railway, by which the employe is to contribute to a relief fund out of which he may at his election receive compensation for injury, in which case he agrees to release his claim for injuries, is rendered invalid by the subsequent enactment of the Federal Employers' Liability Act.2 A contract to transport natural gas from Indiana to Chicago, Illinois, to perform which a pressure of three hundred and twenty-five pounds to the square inch is necessary, is discharged by subsequent valid police regulations of Indiana, forbidding gas to be transported at a pressure greater than three hundred pounds.3 A contract to construct a railroad on a given route is discharged by a subsequent valid amendment to its charter, the right to make which is reserved by statute altering the location of the road.4 A contract entered into by a corporation is discharged by the appointment of a receiver of the corporation, and an injunction against its further transaction of business,5 at least where the adversary party elects to treat such facts as discharging him from liability. Where A agrees with B to turn over to a bank certain notes and accounts received from B in satisfaction of a debt due to the bank from B, and the bank has refused to accept them, but subsequently consents, A is excused from complying with such demand by the appointment of a receiver under order of the court for such notes and accounts.6 A contract between two street railway companies, that neither will reduce fares below the amount authorized by statute of a certain date, is discharged when the legislature reduces the fare.7 The appointment of a receiver of a corporation, together with an injunction restraining the corporation from collecting and paying out money, does not discharge a contract by the corporation with its general manager prior to the forfeiture of the charter of the corporation.8 A contract whereby A agrees with a school district to remove a schoolhouse is excused where the school district and its agent are enjoined from prosecuting the work, and the injunction is not dissolved soon enough to enable the contractor to resume the work under the contract.9
6 Campbell v. Gullo, 142 La. 1082, L. R. A. 1918D. 251, 78 So. 124.
1 American Mercantile Exchange v. Blunt. 102 Me. 128, 120 Am. St. Rep. 463. 10 L. R. A. (N.S.) 414, 66 Atl. 212.
2 Baltimore & O. R. Co. v. Miller, 183 Ind. 323, 107 N. E. 545.
3 Jamieson v. Oil Co., 128 Ind. 655; 12 L. R. A. 652, 28 N. E. 76.
4 Macon, etc., R. R. v. Gibson, 85 Ga. 1, 21 Am. St. Rep. 135, 11 S. E. 442.
5 Malcomson v. Wappoo Mills, 88 Fed. 680. See Sec. 2687 et seq.
6 Howell v. Hough. 46 Kan. 152, 20 Pac. 436.
The order of a public official, if within his legal powers, may operate as a discharge of a contract between other persons. A contract between A and B, whereby A is to clear off standing timber on a specified highway, is discharged by an order of the county commissioners who propose to change the line of the remaining part of the road.10 No liability exists where a steamboat leaves before schedule time, but the government inspector has refused to allow more persons to go on board because it has already all that its license permits it to carry.11 After a contract of insurance was entered into the statutes required a more substantial and expensive structure than that existing. The building insured was thereafter destroyed by fire. The liability of the insurance company under the policy was held not to be limited to the cost of replacing the structure described in the survey.12 A contract to convey realty by "a good and clear title free from all encumbrances," was held not to be discharged by the city's taking part of the realty contracted for to widen a street after the contract and before the conveyance.13 A contract of a surety on a bond for the appearance of the accused is not, after his default, discharged by the act of the governor in pardoning him.14 An express stipulation against liability for non-performance if the contractor was "lawfully restrained," relieves a canal company for liability for failure to deliver water where the canal was filled in by the county supervisors.15 If the law stops performance for a limited time, this operates as a temporary suspension of the contract, but not as a discharge.16 If a judgment can be rendered for instalments of rent already due and to come due in the future, under a lease of a building for the purpose of prostitution, a subsequent statute rendering such use of such premises illegal, prevents recovery of such future instalments.17
7 Buffalo, etc., R. R. v. R. R., Ill N. Y. 132, 2 L. R. A. 384, 19 N. E. 63.
8 Rosenbnum v. Credit System Co., 61 N. J. L. 543, 40 Atl. 501.
For the effect of the appointment of a receiver, see Sec. 2702.
9 Burkhardt v. School Township, 9 S. D. 315, 69 N. W. 16.
10 Burns v Koochiching, 68 Minn. 239, 71 N. W. 26.
11 Hughson v. Steamboat Co., 181 Mass. 325, 58 L. R. A. 432, 64 N. E. 74.
12 Pennsylvania Co. v. Philadelphia Contributionship, 201 Pa. St. 497, 57 L. R. A. 510, 51 Atl. 351.
13 Kares v. Covell, 180 Mass. 206, 91 Am. St. Rep. 271, 62 N. E. 244. (The vendee is not obliged to accept the realty at the contract price. He may either rescind the sale for the breach or recoup damages.)
14 Dale v. Commonwealth, 101 Ky. 612, 38 L. R. A. 808, 42 S. W. 93.