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.
An executory contract, the performance of which does not involve trading with the enemy, or assistance to the enemy during the war, or after the war, or injury to his own government, is not discharged by war.1 A contract for the sale of land which was entered into before the war, is not discharged by the fact that the vendor and the vendee are domiciled respectively in the territory of the belligerent powers.2 It has been held, however, that such contract is suspended so that a clause providing for forfeiture for nonpayment of instalments, can not be enforced.3 On the other hand, a contract of sale the performance of which will aid the enemy in time of war, or will hamper the military operations of the government of the country in whose courts it is sought to enforce such contract, will be held to be discharged by the war, rather than dissolved.4 Contracts for the sale of ores and the like, even though running over a long period of time, were accordingly held to be discharged by the outbreak of war between England and Germany.5 After the outbreak of the war between England and Germany, the United States courts refused specific performance of a contract by which the interests of an American corporation were to be transferred to a German firm which was to do business in part in London; but as a condition of such refusal, a creditor, domiciled in England, who had advanced money on the credit of the new organization, was permitted to enforce his claims as against the property which, by the contract, would have been transferred to such new organization.6
2 Reid v. Hoskins, 4 Fl. & Bl. 979; Avery v. Bowden, 5 El. & Bl. 714; Es-posito v. Bowden, 7 El. & Bl. 766; Karberg v. Blyther , 1 K. B. 495: Clapham Steamship Co. v. Naam-looze Vennootschap Handels-en Transport Mantschappij Vulcaan , 2 K. B. 639.
3 Clapham Steamship Co. v. Naam-looze Vennootschap Handels-en Trans-port-Maatschappij Vulcaan [19171, 2 K. B. 639.
1 Halsey v. Lowenfeld [19161, 2 K. B. 707. L. R. A. 1917? 644.
2 See on this question, Kershaw v. Kelsey. 100 Mass. 561, 1 Am. Rep. 142, 97 Am. Dee. 124.
3 Paradine v. Jane. Aleya 26.
4 See Sec. 2673.
1 Smith v. Becker , 2 Ch. 86; Grinnan v. Edwards, 21 W. Va. 347. A contract between two British subjects for the sale by one to the other of sugar f. o. b. at Hamburg, for export from Germany, which contains a covenant for arbitration, is not entirely discharged by the outbreak of the war, and by an embargo, placed by the German government on the export of sugar; and the parties may resort to arbitration in accordance with such covenant. Smith v. Becker , 2 Ch. 86.