The Law Of Contracts Vol5| by William Herbert Page

Express Conditions

Title	The Law Of Contracts Vol5
Author	William Herbert Page
Publisher	The W. H. Anderson Company
Year	1919
Copyright	1919, The W. H. Anderson Company
Amazon	Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises

Chapter LXXVII. Express Conditions: I. NATURE AND CLASSES Sec. 2574. Definition and nature of conditions. Sec. 2575. History of law of conditions. Sec. 2576. Condition distinguished from covenant. Sec. 2577. Implied conditions, so-c...

I. Nature And Classes. Sec. 2574. Definition And Nature Of Conditions: A condition is an uncertain event upon the happening or not happening of which, as the case may be, the parties have agreed that the legal effect of part or all of the contract shall depend.1 As is th...

Sec. 2575. History Of Law Of Conditions: Long before simple contracts were recognized by the king's courts,1 and probably before the contract under seal had become established as a formal contract,2 the king's courts had been confronted with...

Sec. 2576. Condition Distinguished From Covenant: A condition, as we have seen,1 is an uncertain fact, which, as a result of the agreement of the parties, is to affect the legal effect of the contract. The condition, accordingly, in its more limited ...

Sec. 2577. Implied Conditions, So-Called: Another reason for the confusion between conditions and covenants is the fact that they shade off from the clearest and most extreme type of the condition, which contains no element of a promise, thro...

Sec. 2578. Provision Both Covenant And Condition - Condition As To Effect Of Breach: Among the causes for confusion between conditions in covenants, is the fact that the same provision of a contract may be both at once. It is possible and not uncommon for the parties to agree that one...

Sec. 2579. Construction As Between Condition And Covenant: Whether a provision is a condition or a covenant depends upon the intention of the parties as deduced from the language of the contract when read in the light of the surrounding circumstances.1 Condit...

Construction As Between Condition And Covenant. Continued: District of Columbia. Fontano v. Robbins, 22 D. C. App. 253. Illinois. Adlard v. Muldoon, 45 III. 193. New Jersey. Bond v. Newark, 19 N. J. Eq. 376. Pennsylvania. Memphis, etc., R. R. Co. v. Wilcox...

Sec. 2580. Condition Compared With Warranty: The term warranty is used in a variety of meanings. A comparison of the condition with the warranty, and a distinction between them, is therefore a comparison and a distinction of two terms, each of...

Sec. 2581. Condition Distinguished From Consideration: The confusion between condition and consideration arises in part from the popular use of a clause beginning with if to indicate indiscriminately a condition, an act which is to serve as acceptance o...

Sec. 2582. Condition Distinguished From Exception: A condition is occasionally to be distinguished from an exception. An exception is frequently used where, instead of stating the subject-matter specifically, the parties stated it in broad and general...

Sec. 2583. Specific Illustrations Of Exceptions: In policies of life insurance, provisions are frequently found to the effect that such policy shall not include liability in case the insured is executed by the authority of the law for the commission...

Sec. 2584. Condition Distinguished From Representation: The practice, whether erroneous or not, of using the term condition as applicable to present or past facts, as well as to. future facts,1 has led to a confusion between conditions and representation...

Sec. 2585. Condition Used As Equivalent To Defense Or Discharge: Another source of confusion in the use of the word condition has grown out of the fact that, unfortunately, it is sometimes used as a means of explaining the effect of facts which may prevent a contra...

Sec. 2586. Classes Of Conditions - Precedent And Subsequent: Conditions are classified with reference to their effect on the contract, as conditions precedent and conditions subsequent. A condition precedent, as the name implies, is one which must be performed ...

Sec. 2589. Construction Of Conditions In General: Since contracts are ordinarily construed so as to prevent forfeiture,1 a condition which tends to operate as a forfeiture of the rights of one of the parties to the contract will be construed strictly...

Sec. 2590. Acts Or Events Which May Operate As Conditions - Impossible And Illegal Conditions: If a condition is impossible, its effect upon the contract depends upon whether it is precedent or subsequent. If it is precedent, the contract can not, by its terms, take effect, in whole or in part,...

Sec. 2591. Present Or Past Acts Or Events: The act which the parties select as a condition may undoubtedly be an act which is to take place in the future.1 Whether it may be an act which has taken place in the past or which is taking place at ...

Sec. 2592. Conditions As Affecting Entire And Severable Contracts - General Principles: If a contract contains two or more covenants on one side, and one or more of such covenants is subject to a condition, the question frequently arises whether a breach of one of such conditions operate...

Sec. 2593. Specific Tests For Determining Entire Or Severable Character Of Contract: If two distinct and separate contracts have been made, the fact that each contains an identical condition does not render them entire; and a breach of such condition as to one contract will not affect...

II. Past, Present of Future Events As Conditions. Sec. 2594. Validity Of Contract Conditioned On Existence Of Past Or Present Fact: Whether a past or present event can be a condition in the true sense of the term,1 the validity of a contract is frequently made to turn upon the happening or not happening of such an event; and as fa...

Validity Of Contract Conditioned On Existence Of Past Or Present Fact. Continued: Whether such condition is limited to the present state of title or whether it applies to future changes, is a matter upon which there has been some difference of opinion. It has been said that such a ...

Sec. 2595. Performance Due At Future Time Or On Future Event As Condition - General Principles: There is an additional confusion in terms, which arises in cases in which there is a promise to perform at a future time, or upon the happening of a future event. Even where the promise is to perform ...

Sec. 2596. Construction As Between Condition And Covenant Fixing Reasonable Time For Performance: A provision is frequently made for performance upon the happening of some extrinsic act. While the happening of such act is occasionally made in form a condition, it is ordinarily rather a definition ...

Sec. 2597. Promise Of Performance "When Able.": Whether a promise to pay or to perform when the promisor is able, is a promise upon condition, or whether such provision as to ability is inserted merely in order to indicate what is regarded as a r...

Sec. 2598. Contract Conditioned On Future Event - In General: A contract may provide in express terms that the happening or not happening of some specified event after the contract is made, shall operate as a termination of some or all of the rights thereunder. ...

Sec. 2599. Specific Illustrations Of Conditions - Change Of Title, Possession, Location, Etc: Policies of fire insurance frequently contain provisions to the effect that change of title, ownership, and the like, shall operate as a termination of the liability of the insurer. Pull effect is giv...

Sec. 2600. Conditions Against Incumbrances: Policies of fire insurance upon personal property frequently contain provisions for terminating such policy in case the property shall be incumbered by a chattel mortgage.1 Such provisions are, howeve...

Sec. 2601. Conditions As To Additional Insurance: Insurance policies frequently contain provisions for avoiding the policy in case additional insurance is taken without the consent of the insurer, and full effect is given to such conditions.1 While s...

Sec. 2602. Conditions As To Appliances For Extinguishing Fires, Watchmen, Etc: Effect is given to conditions in a policy of fire insurance requiring the insured to maintain certain specified appliances for extinguishing fires.1 Such condition is not broken by the fact that such ...

Sec. 2603. Conditions Against Increase Of Risk: Policies of fire insurance frequently contain provisions that the policy shall be avoided by any subsequent increase of risk; and full effect is given to such a provision.1 A change in the purpose for...

Sec. 2604. Conditions Against Inflammable Articles, Etc: Policies of fire insurance frequently contain provisions that the policy shall terminate if certain specified articles, usually explosives or inflammables, are kept or used upon the premises. If such ...

Sec. 2605. Conditions Against Vacancy, Etc: Full effect is given to a condition in a policy of fire insurance to the effect that the policy shall terminate if the insured premises become vacant.1 Since a provision of this sort may be highly mat...

Sec. 2606. Conditions As To Books, Inventories, Etc: Fire insurance policies, especially those issued upon stocks of merchandise, frequently contain clauses requiring the insured to keep certain specified books, to take inventories and to keep books, in...

Sec. 2607. Writing Or Signature As Condition Precedent: The parties to a contract may frequently agree that such contract shall not take effect unless it is reduced to writing. If such agreement is one of the terms of the contract, and if the parties mean ...

III. Notice As Condition. Sec. 2609. Notice As Condition Precedent Or Subsequent: If a contract provides for notice, either by its express terms or by necessary implication, and either as a condition precedent to the duty of the party to whom notice is to be given to perform, or as...

Sec. 2610. Notice Of Loss As Condition To Right Of Action: In contracts with common carriers, a provision is frequently made for notice of injury to the property which is transported. If such provisions are fair and reasonable,1 full effect is given thereto.2...

Sec. 2611. Contents And Form Of Notice: The notice must set forth the requisite facts and where necessary must advise the adversary party of the steps which the party who gives the notice proposes to take.1 Under clauses in a building contr...

Sec. 2612. Giving Notice By Mail: If provision is made for giving notice either as a condition precedent or as a condition subsequent, such provision is regarded as analogous to the acceptance of an offer which by its terms is to rema...

IV. Valuation, Arbitration Or Appraisement As Condition. Sec. 2613. Valuation By Arbitration Or Appraisement As Condition Precedent: Provision is occasionally made for determining the amount of the consideration to be paid or for the amount of compensation to be paid under the contract by arbitration or appraisement as a condition ...

Sec. 2614. Specific Illustrations Of Provisions For Arbitration Or Appraisement: Provisions of this sort are frequently found in policies of insurance which provide that in case of loss the amount of such loss may be fixed by arbitration or appraisement. Such a provision is a cond...

Sec. 2615. Refusal Of Appraisement Or Arbitration By One Party As Affecting Rights Of Adversary Party - Contracts Of Sale: In contracts for the sale either of real property,1 or personal property,2 provisions are occasionally found for determining the price to be paid for such property by a valuation which is to be made b...

Sec. 2616. Contracts Of Insurance, Etc: In striking contrast with the way in which courts have treated cases in which provisions are found in contracts of sale for the purpose of fixing the value of property by appraisement,1 is the attitud...

V. Satisfaction of Party Or Third Person As Condition. Sec. 2617. Mental State As Condition - In General: By the terms of the contract, the mental state of one of the parties to the contract, or of a third party, may be selected as the condition upon which performance depends. The contract may provide tha...

Sec. 2618. Contract To Be Performed To Satisfaction Of Adversary Party - General Nature: A contract by which one party agrees to perform to the satisfaction of the adversary party, presents questions which, in some respects, are intermediate between the questions which arise out of perf...

Sec. 2619. Necessity Of Genuine Dissatisfaction: 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 po...

Sec. 2620. Sufficiency Of Genuine Dissatisfaction - Contracts Involving Personal Taste Or Personal Services: If the dissatisfaction is genuine, the question is presented whether this alone will prevent liability from existing, or whether the dissatisfaction must not only be genuine, but must also be caused b...

Sec. 2621. Matter Not Involving Personal Element - Theory Of Sufficiency Of Actual Dissatisfaction: If the subject-matter of the contract does not involve personal taste or feeling, or any personal element, there is a conflict of authority on the question of whether a genuine but unreasonable dissat...

Sec. 2622. Theory Of Necessity Of Reasonable Dissatisfaction: 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 pa...

Sec. 2623. Sufficiency Of Reasonable Dissatisfaction: Whether the contract is one which involves personal taste or not, a provision for performance to the satisfaction of one of the parties is not performed if a reasonable man would not have been satisfi...

Sec. 2624. Dissatisfaction As Ground For Discharge Of Contract: It is occasionally provided that a contract is to take effect and that performance is to begin, but that one of the parties reserves the right to terminate such contract if he is dissatisfied with the...

Sec. 2625. Approval Of Architect Or Engineer As Condition Precedent - Necessity: In the absence of a provision which either expressly or by necessary implication makes the approval of a third person, such as an architect, engineer, and the like, a condition precedent to recovery u...

Sec. 2626. Express Provision For Approval Of Architect Or Engineer As Condition Precedent - Validity: Examples of conditions precedent, the non-performance of which suspends the right of action until such conditions are performed, are often found in building and construction contracts. Under a provisi...

Sec. 2627. Approval Or Certificate As Express Condition: Under a specific provision therefor, the obtaining of such certificate is a condition precedent to any recovery by the contractor upon his contract unless the obtaining of such certificate is excused ...

Sec. 2629. Who Can Determine Performance As Condition Precedent: The fact that the engineer selected by the parties is in the employment of one of the parties to the contract, and is therefore possibly biased in his judgment,1 or that he is a stockholder,2 or a for...

Sec. 2630. On Whom Determination Of Performance Is Binding: On the one hand, in the absence of fraud or evident mistake, the certificate given by the architect or engineer is binding upon the contractor.1 Thus the architect's decision that certain paving was n...

Sec. 2631. Power Of Architect Or Engineer: The power of the architect or engineer to bind the employer, depends upon the power conferred upon him by such employer, either in the building contract with the contractor, or in the contract of empl...

Sec. 2632. Form Of Certificate: A written certificate is not a condition precedent unless express provision is made therefor.1 A provision that work is to be done to the satisfaction of a superintendent,2 does not require such satis...

Sec. 2633. Contents Of Certificate: A certificate which recites performance of the contract in substance is sufficient;1 and it need not follow the language of the contract which specifies the facts which must appear in such certificate...

Sec. 2634. Effect Of Certificate Or Approval: If the contract provides in express language that the certificate is not conclusive, and that it does not relieve the contractor from his liability to make good all defects, such certificate is of cou...

Sec. 2635. Approval Of Attorney As Condition Precedent: It is occasionally provided in contracts, unless the approval of the attorney of one of the parties in favor of the validity of the transaction is obtained, the transaction shall be void.1 Provisions ...

Sec. 2636. Other Illustrations Of Approval By Third Person: A contract for the transportation of a passenger may provide that he shall establish his identity to the satisfaction of some specified agent of the carrier.1 Pull effect is given to such provision, a...

VI. Condition In Power of One Party. Sec. 2637. Condition In Power Of One Party: In many cases the act which is selected as a condition is one which one of the parties has the power to perform or not at his option.1 If his performance or failure to perform such act, as the case ma...

Sec. 2638. Amount Of Compensation In Discretion Of One Party: Analogous to the cases in which performance must be made to the satisfaction of one party,1 are the contracts, such as contracts of employment in which the amount of wages is left to the decision of t...

Sec. 2639. Option To One Party To Discharge: A contract may contain an express provision that one or either party may terminate such contract at his option. Pull effect is given to such provisions, and the exercise of such option operates as a d...

Sec. 2640. Contract Of Indefinite Duration - Implied Option To Discharge At Will: If the express terms of the contract do not fix the time for its duration, if the subject-matter and the surrounding circumstances do not indicate an intention to enter into a permanent obligation or ...

Sec. 2641. Option Not Exercisable At Will: In cases in which the parties do not contemplate a permanent obligation, the nature of the subject-matter and the surrounding circumstances may show that it was not intended that either party should h...

Sec. 2642. Permanent Obligation Contemplated: The nature of the subject-matter and the surrounding circumstances may, however, show that the parties intend such contract to be a permanent obligation, or at least they intend that it shall last for...

Sec. 2643. Notice Of Exercise Of Option To Terminate: A reasonable notice of the exercise of such option must be given when the absence thereof will inflict injury upon the adversary party which the parties to the original contract did not contemplate, a...

VII Who Can Take Advantage Of Breach of Condition. Sec. 2644. Who May Take Advantage Of Breach Of Condition - Self-Executing Conditions: Whether breach of condition may be taken advantage of by one or both of the parties to the contract, depends upon the intention of the parties in inserting such condition, as inferred from the languag...

Sec. 2645. Conditions For Benefit Of One Party: In the great majority of cases, however, a condition is not made self-executing, but it is inserted for the benefit of one of the parties thereto; and the provision for such condition is so worded tha...

Sec. 2646. Condition For Benefit Of Either Party: The provision for a condition may be so worded that it is evident that the condition is inserted for the benefit of both parties; and in such case either party may take advantage of such breach.1 The ...

Sec. 2647. Construction As To Right Of Party To Take Advantage Of Breach: In construing the language by which provision is made for conditions, the courts are unwilling to construe such conditions as self-executing if possible.1 The dislike of the courts for forfeitures 2 h...

VIII. Performance And Breach. Sec. 2648. Performance And Breach Of Condition: A substantial performance of the conditions for which provision is made in a contract according to the terms thereof, is necessary.1 A substantial performance of such conditions in accordance with the...

Sec. 2649. Effect Of Breach Of Condition: If the condition is one which the law will recognize and enforce,1 full effect is given to the provisions of the contract which provide for such condition, and breach of condition operates as a discha...

Sec. 2651. Duty To Make Restitution On Breach Of Condition: Whether one who has received benefits under a real or supposed contract is obliged to make restitution to the adversary party when such contract is discharged by breach of condition, depends, in the a...

IX. Excuses And Waiver. Sec. 2652. Excuses And Waiver - General Nature: In many cases the courts succeed in avoiding the effect of breach of condition in accordance with the terms of the contract, by holding that the party who has broken such condition is excused from per...

Sec. 2653. Excuses For Not Obtaining Approval Or For Not Treating Approval As Finality - Fraudulent And Arbitrary Action: The contractor may, in some cases, excuse his failure to obtain the certificate of the architect. If he can show that the certificate was refused by the architect fraudulently, and in bad faith, he ma...

Excuses For Not Obtaining Approval Or For Not Treating Approval As Finality - Fraudulent And Arbitrary Action. Continued: Nebraska. Howard County v. Pesha, - Neb. -, 172 N. W. 55. Pennsylvania. Pittsburgh Terra-Cot-ta Co. v. Sharp, 190 Pa. St. 256, At Atl. 685; Thaler v. Wilhelm Greisser Construction Co., 229 Pa. St. 51...

Sec. 2654. Refusal Of Certificate For Substantial Performance, Short Of Exact Performance: In some jurisdictions it seems to be held that in case of substantial performance under a contract which provides for the certificate of the architect or engineer, the architect or engineer should iss...

Sec. 2655. Mistake On Part Of Architect Or Engineer: Since the provision in a contract which requires the certificate of the architect or engineer as a condition precedent is intended to leave the determination of the matter specified in the contract to...

Sec. 2656. Waiver Of Breach Of Condition - General Nature: The operation of the general rules which govern the validity and effect of conditions is frequently modified by the desire of the courts to apply principles of waiver and to find that the party for wh...

Waiver Of Breach Of Condition - General Nature. Continued: Waiver is therefore a consequence of certain acts or omissions. It is the abandonment or renunciation of a right, and since this abandonment or renunciation may be made in a number of ways, the use of...

Sec. 2657. Elements Of Waiver - Knowledge Of Facts: Since waiver is the voluntary renunciation of a right, the knowledge of the existence of such right is an essential element of waiver;1 and it is frequently said that unless such knowledge is shown to...

Sec. 2658. Communication Of Intent To Waive: As in the case of the offer which upon acceptance will amount to a contract,1 the uncomniunicated intention of one party to waive rights has no legal consequence, and in order to amount to waiver such...

Sec. 2659. Waiver By Acts - Condition Precedent: A condition precedent to the taking effect of a contract is said to be waived by the conduct of the party for whose benefit such condition is inserted in treating such contract as in effect, in spite ...

Sec. 2660. Waiver By Acts Misleading Adversary Or Showing Election To Retain Benefits: Conduct on the part of the party for whose benefit the condition is inserted, which induces the adversary party to believe that such condition will not be insisted upon or that its performance will be...

Sec. 2661. Repudiation Of Liability On Grounds Other Than Breach Of Condition: If it is still possible to perform a given condition, the act of the party for whose benefit such condition is inserted in repudiating liability upon some other ground operates as a waiver of such con...

Sec. 2662. Waiver By Owner Of Certificate Or Approval Of Architect As Condition: The owner may waive a provision of the contract providing for a certificate by the architect or engineer.1 Such provision may be waived by express agreement between the property owner and the contract...

Sec. 2663. Rights Of Parties Fixed - Subsequent Waiver Not Recognised: Whether the breach of a condition may be waived after such condition has been broken, and after the rights of the parties have become fixed, by reason of the fact that the contract has either been dis...

Sec. 2664. Rights Of Parties Fixed - Subsequent Waiver Recognised: In a number of jurisdictions the courts have recognized the existence of waiver, although the acts which are relied upon to show such waiver take place after the rights of the parties are fixed by los...

Sec. 2665. Form Of Waiver - Provision Of Contract Requiring Writing: The results which the courts seek to reach by invoking the doctrine of waiver could ordinarily not be attained if any specific form of waiver were required; and accordingly it is generally held that t...

Sec. 2666. Effect Of Waiver: From the nature of waiver,1 it is a final renunciation of a right, and accordingly the waiver of a breach of condition is final as to a past breach,2 and the party who has waived such breach can not a...

Chapter LXXVIII. Impossibility: I. NATURE AND CLASSES Sec. 2667. General nature of impossibility. Sec. 2668. Classes of operative impossibility. II. ORIGINAL IMPOSSIBILITY Sec. 2669. Original impossibility - Impossibility of fact...

I. Nature And Classes. Sec. 2667. General Nature Of Impossibility: The term impossibility, like so many other terms of our law, is not in its origin a technical legal term, but it is a term taken over from popular usage and employed in the law in a variety of meani...

Sec. 2668. Classes Of Operative Impossibility: Operative impossibility may be classified according to the time at which the impossibility exists, and according to the nature of the means by which performance is rendered impossible. With reference ...

II. Original Impossibility. Sec. 2609. Original Impossibility - Impossibility Of Fact - Impossibility Apparent On Face Of Contract: Original impossibility of fact is ordinarily divided into two classes, one of which includes contracts in which the impossibility is apparent on the face of the contract, at least to one who has the k...

Sec. 2670. Original Impossibility - Impossibility Of Fact - Impossibility Not Apparent On Face Of Contract: Original impossibility of fact may exist where the contract is not impossible of performance on its face, since the subject-matter of the contract is one the existence of which is possible; but where ...

Sec. 2671. Difficulty Or Expense As Original Impossibility: Difficulty or expense in performance is not regarded as original impossibility 1 any more than it is regarded as subsequent impossibility.2 A contract to pack a certain kind of fish at a given point, ...

Sec. 2672. Original Impossibility - Impossibility Of Law: A contract, the performance of which is forbidden by rules of law, or the performance of which the law will not enforce, is ordinarily an illegal or a void contract because of the nature of its subjec...

III. Subsequent Impossibility. Sec. 2673. Subsequent Impossibility - Origin Of Modern Doctrine: In an English case,1 it was said that where the law creates a duty or charge and the party is disabled to perform it, without any default in him, and has no remedy over, there the law will excuse him...

Sec. 2674. Impossibility As Affecting Obligation Not Assumed By Voluntary Agreement: If the obligation upon which the action is brought is not assumed by voluntary agreement, but it has been imposed by the law in connection with the surrounding facts and circumstances of the case, cer...

Sec. 2675. Impossibility As Affecting Liability Assumed By Voluntary Agreement - General Nature Of Impossibility: If the obligation which it is sought to enforce is one which is created by the express agreement of the promisor, it is laid down as a general rule, subject to exceptions which are considered hereafte...

Impossibility As Affecting Liability Assumed By Voluntary Agreement - General Nature Of Impossibility. Continued: 4 England. Nickoll v. Ashton [1901], 2 K. B. 126; Horlock v. Beal [1916], 1 A. C. 486; F. A. Tamplin Steamship Co. v. Anglo-Mexican Petroleum Products Co. [1916], 2 A. C. 397. United States. Reed v. ...

Sec. 2676. Classification Of Subsequent Impossibility: An attempt has been made in obiter to state the classes of acts or events which will operate as impossibility which will discharge the contract. It has been said that apart from impossibility due to t...

Sec. 2677. Assumption Of Risk As Affecting Impossibility: The terms of the contract and the surrounding circumstances may show that one or the other party had agreed to assume certain risks; and in such case the happening of the event the risk of which has b...

Sec. 2678. Express Provision As To Effect Of Impossibility In Case Of Death: If, however, the contract shows that the parties thereto contemplated the death of one of them, and provided for the effect thereof, full effect is given to such provision.1 A provision by which A app...

Sec. 2679. Impossibility As Affected By Entire Or Severable Character Of Contract: If a contract is entire, impossibility of performance of one of the material covenants operates as a discharge of the entire contract.1 A contract to furnish stenographic and clerical assistance from ...

Sec. 2680. Partial Impossibility Of Performance: In most of the cases in which impossibility of performance is relied upon as a discharge, the impossibility has gone to the entire performance of the contract.1 Cases are, however, presented in which ...

Sec. 2681. Classes Of Facts Which Constitute Impossibility - Impossibility In Contracts For Personal Services - Death - Dissolution Of Partnership: A contract whereby the promisor is to perform certain services of a personal nature, and such as can not be performed by his assignee, or his successors, is discharged by the death of either party,1 w...

Sec. 2682. Discharge Of Contract Of Agency: A contract of agency not creating a power coupled with an interest is terminated by the death of either party.1 Thus authority to sell property,2 as personalty,3 or to collect money,4 is revoked by th...

Sec. 2683. Sickness - In General: A contract for services personal in their nature which can not be performed by deputy within the meaning of the contract is discharged by such sickness on the part of the person by whom such services ...

Sec. 2684. Sickness As Affecting Contracts To Intermarry: If A and B have entered into a contract to intermarry, and subsequently without the fault of either A becomes so ill that marriage in the ordinary sense of the term would be impossible or would shorte...

Sec. 2685. Death Of Party To Contract Not For Personal Services: A contract for services which are not personal in their nature, but which may be performed by the assignee or the successors of the promisor, is not discharged by the death of either party.1 Thus, a c...

Sec. 2686. Involuntary Detention: If a contract provides for services which are personal in their nature, either with reference to the person by whom they were rendered or with reference to the person to whom they are rendered, the in...

Sec. 2687. Dissolution Of Corporation - Discharge Of Executory Contracts: The effect of the dissolution of a corporation upon its contracts and contractual rights and liabilities is a question upon which there is a conflict of authority, due to the survival of primitive the...

Sec. 2688. Dissolution Of Corporation - Breach Of Executory Contracts: In most jurisdictions it is recognized, however, that a corporation is, for many purposes at least, a legal fiction and that the real interests involved, apart from those of the state, are those of th...

Sec. 2689. Dissolution Of Corporation - Contract Between Corporation And Officer: Some jurisdictions treat the case in which the contract of employment is made between the corporation and its officer as governed by special principles, since the officer for some purposes represents ...

Sec. 2690. Dissolution Of Corporation - Special Grounds For Treating As Discharge: The peculiar nature of certain contracts may make the dissolution of a corporation which is a party thereto operate as a discharge of such contract, although such dissolution would not operate as a di...

Sec. 2691. Distinction Between Voluntary And Involuntary Dissolution: In some jurisdictions there seems to be a tendency at least to distinguish between cases of voluntary and involuntary dissolution, with reference to the effect upon each of the outstanding executory c...

Sec. 2682. Destruction Of Specific Subject-Matter As Discharge -General Nature: Under a contract which by the intent of the parties requires for its performance the continued existence of a specific subject-matter, the destruction of such subject-matter is an event not within the...

Sec. 2683. Special Classes Of Contract - Work And Labor On Building Of Another: A contract by which one party agrees to perform labor on the building of another is discharged by the destruction of such building, without the fault of either party, before such contract is performed...

Sec. 2694. Sales And Bailments: In the absence of a specific provision imposing the risk of loss on one party or the other, a contract to sell a specified chattel is discharged by the destruction of such chattel without the fault of...

Sec. 2695. Sale Of Realty - Destruction Of Building: Whether a contract to sell realty upon which a building is situated is discharged by the destruction of the building after the contract of sale is made and before it is performed by the execution and ...

Sec. 2696. Destruction Of Property Not Specific Subject-Matter Not Discharge: If the contract is not to deliver specific property, but to deliver property of a given kind and quality, which may be performed by the vendor's delivering any property of that kind and quality which ...

Sec. 2697. Impossibility By Subsequent Act Of Domestic Law - General Principles: Impossibility of performance, which is created by a subsequent valid act of domestic law, operates as a discharge of a contract.1 Subsequent legislation which impairs the obligation of a contract is o...

Sec. 2698. Specific Illustrations - Leases For Sale Of Intoxicating Liquors: If realty is leased for the exclusive purpose of using it as a place in which to sell intoxicating liquors, and such sale subsequently becomes illegal, either under local option provisions or by gener...

Sec. 2699. Contracts To Issue Passes: The state, acting through its legislative department, may, under its power to regulate and control common carriers, forbid the granting of passes, and it has power to make such legislation retroactive...

Sec. 2700. Other Illustrations: 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 advertisemen...

Sec. 2701. Impossibility By Subsequent Act Of Foreign Law: Impossibility of performance due to a change in foreign law or an act of a foreign state is said, by some courts, not to amount to a discharge, if the contract is not made in such state and is not gov...

Sec. 2702. Writ Obtained By Private Litigant As Act Of Law: If A enters into a contract with B which is valid when made, the fact that by proceedings for injunction, X prevents A from performing such contract does not, in some jurisdictions, discharge A from l...

Sec. 2703. Events Which Could Have Been Anticipated - Climatic Conditions: In a number of cases, it is suggested as a general principle, that the happening of an event which might readily have been anticipated by a reasonable man, can not be regarded as impossibility so as t...

Sec. 2704. Epidemics And Personal Danger: Whether an epidemic which renders the performance of a contract dangerous to life operates as a discharge of such contract, is a question upon which there has been a divergence of authority, even in c...

Sec. 2705. Difficulty Of Performance As Impossibility: Mere difficulty of performance is not such impossibility as operates as discharge of a contract.1 A contract to render personal services and care is not discharged by the fact that the rendition of su...

Sec. 2706. Expense Of Performance As Impossibility: The fact that performance proves to be more expensive than was anticipated does not constitute impossibility so as to avoid the contract.1 The fact that the contract has proved to be unprofitable does...

Sec. 2707. Insolvency As Discharge: Insolvency of a party to a contract does not operate as a discharge of the insolvent,1 nor of the adversary party.2 27 Moss v. Smith, 9 C. B. 94. 28 Mineral Park Land Co. v. Howard, 172 Cal. 289, L....

Sec. 2708. Impossibility Of One Of Several Methods Of Performance As Discharge: One who agrees to do a specific act which can, without violating the terms of the contract, be performed in one of two ways, is not discharged from his contract because one of the two methods of perfo...

Sec. 2709. Impossibility Of Accomplishing Purpose Of Contract: If the alleged impossibility has the characteristics which are necessary to make it operative,1 and if it is of such a sort as to prevent performance of the contract itself,2 it operates as a discharg...

Sec. 2710. Positive Contract To Do Certain Act Or Pay Damages: If a party to a contract enters into a positive and absolute undertaking to do certain things, in which, by express terms or necessary implication, he binds himself to pay damages in the event that he...

IV. Effect Of Impossibility. Sec. 2711. Effect Of Discharge By Subsequent Impossibility - Lia-Bility On Contract: Where the doctrine of subsequent impossibility is recognized, such impossibility acts as a discharge of the contract, but is by no means the same thing as a performance of it. The promisor may invoke ...

Sec. 2712. Impossibility Of Acceptance Of Unilateral Contract, Or Of Performance Of Express Condition: If the act, the performance of which is prevented by impossibility, is not one, the performance of which has been promised by one of the parties to the contract, but it is merely an act the performanc...

Sec. 2713. Recognition Of Personal Contract After Death Of Party: If the heirs or personal representatives of one of the parties to a contract which is personal in its character, treats such contract as in existence after the death of one of the parties thereto, the...

Sec. 2714. Quasi-Contractual Rights Arising On Discharge By Subsequent Impossibility - Risk Assumed By One Party: If the parties to the contract have agreed in express or implied terms that the risk of loss shall fall upon one or the other of the parties, full effect is given to such provision.1 If a contract for...

Quasi-Contractual Rights Arising On Discharge By Subsequent Impossibility - Risk Assumed By One Party. Continued: 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 Su...

Sec. 2717. Risk Not Assumed - Theory Of Mutual Restitution - Impossibility Of Fact: According to the great weight of American authority, subsequent impossibility discharges the contract so that neither party can recover against the other for breach;1 and instead of their former right...

Sec. 2718. Theory Of Mutual Restitution - Impossibility Of Law: If a contract was lawful when made, and its performance is subsequently made legally impossible by a change in legislation, recovery may be had for whatever has been parted with under such contract.1 ...

Sec. 2719. Amount Of Recovery - Theory Of Reasonable Compensation: The amount which can be recovered by one who has performed in part under a contract which is discharged by impossibility, is generally limited to the value of the property which actually passed to the...

Sec. 2720. Theory Of Recovery At Contract Rate With Deduction For Damages: A third theory as to the rights of the parties upon discharge by subsequent impossibility recognizes the right of one who has performed in part to recover for such performance; but instead of permitti...

Chapter LXXIX. War As Affecting Contract Rights: I. NATURE AND EXISTENCE OF WAR Sec. 2721. Definition, nature and classes of war. Sec. 2722. Commencement and termination of war. II. CONTRACTS MADE DURING WAR Sec. 2723. General effect of war on co...

I. Nature And Existence Of War. Sec. 2721. Definition, Nature And Classes Of War: War has been well defined to be 'that state in which a nation prosecutes its right by force.' 1 It has also been defined as a contention by force between nations.2 Other definitions of war between...

Sec. 2722. Commencement And Termination Of War: In determining the existence and kind of war in which a given state is claimed to be engaged, the courts of that state are bound by the acts of the political departments of the government upon whom th...

II. Contracts Made During War. Sec. 2723. General Effect Of War On Contracts: In considering the effect of war upon contracts, at least three different classes of cases must be considered. In one class of cases the contract in question was made before the outbreak of war, and i...

Sec. 2724. Contracts Made During War - General Principles: In determining the validity of contracts which are made during the war, a number of different factors must be considered, among them the nationality of the adversary parties to the contract, the domic...

Sec. 2725. Contracts Which Tend To Aid The Enemy: A contract which is entered into during war, by which one who owes permanent allegiance, and probably by one who owes temporary allegiance, to a country which tends to aid the enemy in prosecuting the...

Sec. 2726. Contracts Made Or To Be Performed Across The Lines Of War: A contract which is made in time of war between persons who are subjects of the respective belligerent powers or who are domiciled in the territory of the respective belligerent powers, is illegal.1 I...

Sec. 2727. Contracts With The Enemy Not In Aid Of The Enemy And Not Involving Communication Across Lines Of War: Contracts with reference to property which is situated in the country of the enemy are not invalid if they do not involve communications across the lines of war and if they are not intended to defeat ...

Sec. 2728. Special Types Of Contract: The application of the foregoing principles to the various types of contract ordinarily renders them invalid wherever they involve the formation of the contract by communications across the lines of w...

Sec. 2729. Contracts With The Enemy Under Express Or Implied Authority - Licenses: If a license to trade with the enemy by the department of the government which has authority to grant such license is granted, contracts with the enemy which are entered into under such license are va...

Sec. 2730. Ransom Of Vessels And Support Of Prisoners: Even in the absence of an express license or of circumstances, other than those of war in general, from which an implied license might be inferred, the courts have in former times been inclined to rec...

III. Effect Of War On Prior Contracts. Sec. 2731. Effect Of War On Pre-Existing Contracts - General Principles: War affects many prior valid contracts which have been entered into by the citizens of the respective belligerents, or which require for their performance commercial intercourse across the lines of wa...

Sec. 2732. Nationality Or Domicile Of Parties As Test: Whether a natural person is to be regarded as an alien enemy or not, within the meanings of the rule which forbid trading with the enemy, is to be determined by his personal domicile or his business d...

Sec. 2733. Discharge Or Suspension By War Of Prior Contracts - Contracts Which Will Aid The Enemy: If the contract is one which is affected by war, the question whether the contract is dissolved or whether its performance is merely suspended, is one which has caused much difficulty, especially when...

Sec. 2734. Contracts Which Involve Trading With The Enemy: If a contract which is entered into before the outbreak of war involves continued commercial intercourse between those who become alien enemies to one another by reason of the outbreak of the war, the...

Sec. 2735. Special Types Of Transactions - Debts - Confiscation: A debt arises out of a transaction which is performed on one side; and if such debt is owing from a citizen to an alien enemy, the transaction has been performed by the alien enemy. Debts which are du...

Special Types Of Transactions - Debts - Confiscation. Continued: Different considerations, however, apply if an insurgent government has attempted to confiscate debts due from those who are domiciled in its territory to their creditors, especially to their creditor...

Sec. 2736. Debts - Rights Of Parties In Absence Of Confiscation: If a debt owing by a subject of one of the belligerent powers to a subject of the other of the belligerent powers is not confiscated, such debt can not be paid during the war if the debtor and credito...

Sec. 2737. Interest - Payment Of Principal Forbidden: If the debtor and creditor are domiciled in the respective belligerent countries, interest upon the debt is suspended during the continuance of the war.1 The reason which is given for this rule is tha...

Sec. 2738. Interest - Effect Of Time Of Maturity With Reference To War: Whether the rule that war suspends interest is modified in any way by the date of the maturity of the obligation, is a question upon which there has been some divergence of authority. If the debt is d...

Sec. 2739. Effect Of Express Covenant To Pay Interest: It has been suggested that a distinction should be made between cases in which there is an express covenant for the payment of interest, and cases in which there is no express covenant to pay interest...

Sec. 2740. Interest - Payment Of Principal Not Forbidden: The rule that interest is suspended during war is based on the theory that the principal can not be paid lawfully. If the circumstances are such that the principal can be paid lawfully, interest will ...

Sec. 2741. Contracts For Chartering Vessels, Transportation, And The Like: The outbreak of war is ordinarily held to discharge contracts between alien enemies for transportation, chartering vessels, and the like,1 rather than to suspend such contracts temporarily. In the cas...

Sec. 2742. Leases: A lease made before the outbreak of the war to an alien enemy, is not dissolved or suspended by the war,1 and he remains liable for the rent according to his covenant in such lease. While this questio...

Sec. 2743. Contracts Of Sale: 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...

Sec. 2744. Life Insurance - Premiums Paid: If the insurer is domiciled in the territory of one of the belligerents and the insured is domiciled in the territory of the other belligerent power, the outbreak of war is said not to operate as a di...

Sec. 2746. Marine, Fire, Theft And Robbery Insurance: If a policy of marine insurance is issued, and a war subsequently breaks out during the life of such policy, between the country in which the insurer is domiciled and the country in which the insured ...

Sec. 2747. Agency - Interests Of State As Affecting Continuance: The effect of the outbreak of a war between the country of the principal and the country of the agency, upon the prior authority of the agent, depends in part upon the interest of the country in which...

Sec. 2748. Agency - Interests Of Principal, Agent And Third Parties As Affecting Continuance: If the agency is of such a nature that the exercise of authority thereunder is not prejudicial to the interests of the country in whose courts it is sought to enforce such transactions, the respective...

Agency - Interests Of Principal, Agent And Third Parties As Affecting Continuance. Continued: 5 Insurance Co. v. Davis, 95 U. S. 425, 24 L. ed. 453 The authority of an agent appointed before the war to care for the property of his principal who has become an alien enemy, is ordinarily not rev...

Sec. 2749. Partnerships: Since the continuation of a partnership involves the power of each partner to make contracts within the scope of the partnership business which will bind the other partners,1 and since the continuance...

IV. Effect Of War On Enforcement Of Prior Rights. Sec. 2750. Alien Enemy As Party To Litigation - Resident Plaintiff: As in cases which involve the validity of contracts between alien enemies and citizens of the state in whose courts it is sought to enforce the contract,1 the question of the right of an alien to main...

Alien Enemy As Party To Litigation - Resident Plaintiff. Continued: The provisions of the treaty between Prussia and the United States provided expressly that the merchants of either country residing in the other, should be allowed to remain for nine months to settle ...

Sec. 2751. Alien Enemy Resident In Enemy Country: The courts are closed in ordinary cases to an alien enemy who is resident in enemy country.1 Such a nonresident alien enemy can not commence an action as against the objection of the defendant if prop...

Sec. 2752. Continuance Or Dismissal Of Action Brought By Nonresident Alien Plaintiff: The present policy of the courts seems to be in favor of continuing an action which has been brought by an alien enemy plaintiff who is domiciled in enemy country, rather than of dismissing such actio...

Sec. 2753. Necessity Of Plea That Plaintiff Is Alien Enemy: The defense that the plaintiff is an alien enemy must be pleaded in order to induce the court to take action thereon.1 The plea that the plaintiff is an alien enemy is an odious plea,2 and it must n...

Sec. 2754. Rights Which Nonresident Enemy Plaintiff May Assert During War: There are certain exceptions to the rule that a nonresident alien enemy can not prosecute an action during the continuance of the war. These exceptions are based on the general theory that where a rig...

Sec. 2755. Nonresident Alien Enemy As Defendant: The reasons which have led the court to deny the right of a nonresident alien enemy to maintain an action as plaintiff, have no application to cases for which relief is sought by a resident subject ag...

Sec. 2756. Rendition Of Final Judgment Against Nonresident Alien Enemy Plaintiff: Whether an action which is brought against a nonresident alien enemy should be prosecuted to final judgment or not, depends to a large extent upon the nature of the issues which are involved. In many ...

Sec. 2757. Effect Of War On Statute Of Limitations And Presumption Of Payment: Since communication between persons who are domiciled respectively in the territory of the belligerent power is forbidden during the continuance of the war,1 and since the courts of each country are c...

Sec. 2758. Litigation In Courts Of Neutral: The courts of a neutral country will enforce a contract which was entered into before the outbreak of the war, between two parties who have become alien enemies to one another by reason of the outbrea...

V. Impossibility Of Performance Due To War. Sec. 2759. Impossibility Of Performance Of Domestic Contracts Due To War - General Principles: Apart from the effect of war upon the performance or enforcement of contracts between parties who have become alien enemies,1 and apart from the effect of war upon contracts the performance of which w...

Sec. 2760. Specific Types Of Impossibility - Requisitions And Governmental Preferences: Whether the requisition by the government, of property such as a vessel, discharges a prior contract which involves the use or sale of such property, is a question which some courts have endeavored to...

Sec. 2761. Governmental Order Forbidding Performance: An order of the government which forbids performance of the contract, operates as a discharge thereof, at least in actions in the courts of the government which issued such order.1 A contract for the ...

Sec. 2762. Embargo, Detention, Etc: An embargo is said not to operate necessarily as a discharge of a contract whose performance it renders legally impossible for the time being.1 An embargo the time of which is not fixed by the governm...

Sec. 2763. Probable Seizure As Prise, Contraband, Etc: If a vessel has started on a voyage before the actual or threatened outbreak of war, the fact that war has broken out or has become imminent and that the vessel may be seized as a prize, justifies the...

Sec. 2764. Increase In Risk As Affecting Employment Contracts: A contract for rendering service as seamen, which is not made in anticipation of war risks, does not oblige such seamen to undertake war risks.1 The term war risk in this sense includes not only ris...

Sec. 2765. Effect Of Enlistment On Contracts For Personal Services: A contract by which A employs B as sales agent on a commission, is discharged by B's enlisting in the military forces of the nation,1 and in the absence of specific provision to the contrary, in the c...

Sec. 2766. Difficulty Or Expense Due To War: Unforeseen difficulty or expense in the performance of a contract is not of itself impossibility of performance so as to operate as a discharge,1 although it is suggested that there may be such an inc...

VI. Effect Of War To Which State Whose Law Controls Contract Is Not Party. Sec. 2767. Effect Of Foreign War: In analogy to the rule that the courts of a state by whose law a contract is governed do not regard 5 Blackburn Bobbin Co. v. Allen [1918], 2 K. B. 467, 3 A. L. R. 11 [affirming (1018), 1 K. B. 5401....

VII. Specific Contractual Provisions With Reference To War. Sec. 2768. Effect Of Specific Contractual Provisions With Reference To War - Provisions For Suspension Or Discharge Of Contract: Whether the general rules which control the effect of war upon the performance of contracts can be modified by specific provisions in a contract with reference to the outbreak of war, is a question wh...

Sec. 2769. Insurance: If a contract of life insurance contains a provision that the policy shall be void if the insured is in active service, the insurance company is liable if the death of the insured is caused by pneumon...

Sec. 2770. Contracts For Chartering Vessels: If a contract for chartering a vessel contains an exception in case of the act of God, the king's enemies, and restraint of princes and rulers, a contract to take a cargo and carry it to a given port ...

VIII. Contracts In Violation of War Rights of Friendly Alien Nations. Sec. 2771. Contracts In Violation Of War Rights Of Friendly Nations: A contract to aid an insurrection against a friendly state is invalid.1 A contract to lend money to be used in aiding Texas in her war of independence with Mexico, before the United States had recogni...

Chapter LXXX. Performance: Sec. 2772. Definition and nature of performance. Sec. 2773. Treatment of topics involved in performance. Sec. 2774. Performance as dependent on actual benefit to adversary party, or expense to party...

Sec. 2772. Definition And Nature Of Performance: Performance of a contract consists in doing the thing which has been promised.1 While the term performance ordinarily implies affirmative action, it may also include negative action wherever the cont...

Sec. 2773. Treatment Of Topics Involved In Performance: Performance is a subject which, in comparison with its importance, is discussed but little by the courts as a separate topic. The question of the performance of a contract involves, in the first insta...

Sec. 2774. Performance As Dependent On Actual Benefit To Adversary Party, Or Expense To Party Who Performs: A party to a contract who by the terms of such contract assumes risk as to certain possible forms of loss, is bound by such assumption without regard to the actual outcome of the transaction;1 and acc...

Sec. 2775. Performance Of Building And Construction Contracts As Affected By Benefit Conferred: One who performs a building contract can recover, without reference to the actual value of the building constructed, even if it is worth much less than the contract price.1 If a building is constructe...

Sec. 2776. Contracts To Furnish And Install Machinery: A contract to furnish or to install machinery which is to be constructed in accordance with certain specifications, is held to be performed if the machinery is furnished or installed in accordance wit...

Sec. 2777. Other Contracts: One who agrees to deliver goods to a common carrier for another, performs so as to discharge himself from liability if he delivers such goods in accordance with the terms of the contract without regar...

Sec. 2778. Degree Of Performance Required - Origin Of Doctrine Of Substantial Performance: At common law in England the original rule was that strict and literal performance was necessary to enable the party who alleged performance of a precedent covenant on his part to recover against the ...

Sec. 2779. Amount Of Recovery In Case Of Substantial Performance: The theory of substantial performance is that there is performance which, on the one hand, is less than strict and literal performance,1 but which, on the other hand, is so close to strict and literal...

Amount Of Recovery In Case Of Substantial Performance. Continued: 8 Connecticut. Daly v. New Haven Hotel Co., 91 Conn. 280, 09 Alt. 853. Illinois. Keeler v. Herr, 157 III. 57, 41 N. E. 750. Kansas. MacCullough v. Hayde, 82 Kan. 734, 109 Pac. 176; Lofsted v. Bohman...

Sec. 2780. Definitions Of Substantial Performance: It is generally assumed that substantial performance is a term which represents a definite idea and which accordingly can be defined. It has been said that substantial performance exists if there h...

Sec. 2781. The Elements Of Substantial Performance - Bona Fide Attempt To Perform: Apart from the cases in which the variance between strict and literal performance and actual performance is so slight that the maxim de minimis non curat lex applies, substantial performance does no...

Sec. 2782. Elements Of Substantial Performance - Relation Of Actual Performance To Terms Of Contract: In order to amount to substantial performance, the actual performance must conform so closely to the terms of the contract that the variance therefrom is relatively immaterial and that the adversary p...

Sec. 2783. Theory And Actual Operation Of Doctrine Of Substantial Performance: The degree of compliance with the terms of the contract which is necessary to substantial performance depends in part upon the detail of performance which is provided for by such terms. The doctrine o...

Sec. 2784. Substantial Performance Of Building Contracts - General Principles: If one who has agreed to construct a building, or to do work thereon, performs the contract substantially, and makes a bona-fide effort to comply with its terms, slight defects in his work and slight ...

Sec. 2785. Substantial Performance Of Contracts For The Sale Of Realty: Contracts for the sale of realty or interests therein are frequently enforced in equity by the remedy of specific performance,1 and it is in contracts of this sort that the original rule requiring str...

Sec. 2786. Substantial Performance Of Contracts For Work, Labor, Services, Etc: A contract by A to effect a sale of B's land during the existence of an option thereon is substantially performed if A effects a valid contract for such sale, though the deeds are not executed until t...

Sec. 2787. Substantial Performance Of Contracts For Locating Business, Railroad, Etc: A contract of subscription which provides that the use of certain realty shall be given without charge, is performed substantially if one dollar a year is charged for such use which is reasonably wort...

Sec. 2788. Substantial Performance Of Contracts For Manufacture And Sale Of Goods: The doctrine of substantial performance at law is, in most jurisdictions, by no means limited to building contracts. If any contract is performed substantially, recovery can be had thereon subject to ...

Sec. 2789. Attempted Performance Less Than Substantial Performance - General Principles: If performance of the covenants of the contract, on the one side, has not been waived by the adversary party, no recovery upon a contract can be had by one who has not performed a precedent covenant, ...

Sec. 2790. Sale Of Realty: Performance less than substantial performance - Party in default seeking to enforce contract, A contract for the sale of realty or an interest therein, is not performed substantially if the performanc...

Sec. 2791. Sale Of Realty - Performance Less Than Substantial Performance - Party Not In Default Seeking To Enforce Contract: If the purchaser demands specific performance against a vendor who can perform in part only, the courts are much more ready to grant relief in spite of a material variance between the performance whic...

Sec. 2792. Contracts For Work, Labor, Services, Etc: - Performance less than substantial. A contract of employment is not performed substantially where the employe, during each month of his employment, embezzles money belonging to his employer.1 Hence, ...

Sec. 2793. Building Contracts - Specific Illustrations - Reconstruction Not Necessary - Immaterial Variance: A study of the cases in which building contracts have been held to be performed substantially shows a wide range of variance between actual performance and the performance required by the terms of the...

Sec. 2794. Building Contracts - Reconstruction Necessary - Immaterial Variance: A minor and immaterial variance may exist, which it may be impossible to remedy so as to make the building conform literally to the terms of the contract, without reconstruction, and yet it may be pro...

Sec. 2795. Building Contracts - Reconstruction Necessary - Material Variance: If the building is materially different from that contracted for, no substantial performance can be said to exist.1 In building or construction contracts a deviation from the terms of the contract whi...

Sec. 2796. Building Contracts - Material Deficiency Not Necessitating Reconstruction: The relation between the contract price and the damage due to defective or incomplete performance may be so great, according to the test suggested in some jurisdictions, as to prevent performance from...

Sec. 2797. Contracts For Sale And Manufacture Of Goods - Performance Less Than Substantial: A contract to manufacture and install a boiler of a given capacity is not performed substantially by manufacturing and installing a boiler of half of the required capacity.1 A contract requiring a shi...

Sec. 2798. Other Contracts: A contract which provided for making compensation to the contractor for the transportation of his implements to a specified point, is performed substantially if the contractor finds that he can perfor...

Sec. 2799. Contracts To Be Performed In The Alternative: If one of the parties to a contract promises to do one of two or more specified things, and the contract contains no provision either in express terms or by fair implication as to which party has the ...

Sec. 2800. Covenant Prescribing Duty In Case Of Default: If a contract provides that in case of default the promisor shall take certain specified steps to remedy such default, the question frequently arises whether such provision precludes the promisee from...

Sec. 2801. Effect Of Performance: Performance by one party has three results: (1) It discharges the party who has thus performed from further liability under the contract.1 (2) Performance gives to the party who has performed, the r...

Chapter LXXXI. Payment: Sec. 2802. Nature of payment. Sec. 2803. Method of payment - In general. Sec. 2804. Delivery of money. Sec. 2805. Medium of payment in absence of specific agreement. Sec. 2806. Medium of payment -...

Sec. 2802. Nature Of Payment: In the narrower sense of the term, payment is used of the performance of contracts which by their terms are to be performed by delivering money.1 In this sense, payment in contract law is that form ...

Sec. 2803. Method Of Payment: In general If the contract pre-scribes the method of payment, such method must be followed, at least substantially, unless it is waived by the parties.1 If the contract provides for making payment of ...

Sec. 2804. Delivery Of Money: By the terms of the definition of payment,1 delivery of money is an essential element of payment; and unless there is such delivery of money or its agreed equivalent, there can be no payment.2 The fac...

Sec. 2805. Medium Of Payment In Absence Of Specific Agreement: Payment is presumed to be made in money unless an intent to the contrary is shown.1 In the absence of some specific agreement between the parties, a contract for the payment of money may be discharged...

Sec. 2806. Medium Of Payment - Specific Agreement Excluding Certain Kinds Of Money: The parties to a contract may by express agreement limit the medium of payment so as to exclude certain kinds of money which by law are legal tender.1 This is the result reached by the supreme court o...

Sec. 2807. Payment In Something Other Than Money - Effect Of Express Agreement In Advance: If the creditor has not agreed to accept something other than money in payment of an obligation which by its terms is to be performed by the payment of money, he can not be compelled to accept anythin...

Sec. 2808. Contracts Payable In Something Other Than Money - No Valuation In Money: Special questions arise under contracts to pay in goods or in labor debts which are measured at a money value. The first question is whether, under such contracts, there is a right of election to perf...

Sec. 2809. Valuation In Money As Means Of Fixing Quantity: If the consideration is estimated at a money value and provision is made for payment of such consideration in goods at an estimated value, the rights of the parties depend upon the true meaning of suc...

Sec. 2810. Valuation In Money As Giving Election As To Medium Of Payment: If the primary object of the parties is to secure the payment of a debt, the amount of which is measured by money, and the provision for payment in work or articles at a specified valuation is inserte...

Sec. 2811. Payment Of Money Debt In Something Other Than Money - Express Agreement: If something other than money is delivered by the debtor to the creditor it is possible that it may be delivered as absolute payment, or as collateral security, or as conditional payment. If there is ...

Sec. 2812. Presumption As To Effect Of Assignment Of Non-Negotiable Right: The greatest difficulty involved in this topic is to determine what presumption arises when the debtor delivers a thing of value other than money to his creditor. Upon this question there is the great...

Sec. 2813. Presumption As To Transfer Of Negotiable Instrument-Absolute Payment Not Presumed - Notes: Delivery of a promissory note,1 whether executed by the debtor,2 or by one of two or more joint debtors,3 or by a third person,4 as the executor of the debtor,5 has been held not to be prima facie abs...

Sec. 2814. Absolute Payment Not Presumed - Drafts, Cashier's Checks, Etc: Delivery of a draft,1 whether drawn by the debtor,2 or by a third person,3 is not according to the weight of authority prima facie payment of an antecedent debt. Even if the creditor marks a note and ...

Sec. 2815. Absolute Payment Not Presumed - Checks: Delivery of a check,1 either one drawn by the debtor,2 even if certified,3 or by a third person,4 is prima facie not payment. Even if a check is drawn upon the bank which accepts it in reliance upon t...

Absolute Payment Not Presumed - Checks. Continued: Kentucky. Carter v. Richardson (Ky.), 60 S. W. 397. Maryland. American Agricultural Chemical Co. v. Scrimger, 130 Md. 389, L. R. A. 1917F, 394, 100 Atl. 774 (obiter). Massachusetts. Wilkinson v. Bl...

Sec. 2816. Absolute Payment Presumed: In other jurisdictions a negotiable instrument,1 executed by the debtor or by another person,2 as at a higher rate of interest than the original indebtedness,3 has been held to be prima facie payment ...

Sec. 2817. Payment In Confederate Money Or Money Of For-Eign Country: The Confederate government maintained a de facto existence for several years and was recognized as a belligerent by foreign powers. The result of the Civil War was to end its existence as a de facto g...

Sec. 2818. Payment In Genuine But Worthless Bank-Notes: If the debtor makes payment to his creditor in genuine bank-notes which are, however, worthless, usually because of the insolvency of the bank issuing them, where neither debtor nor creditor know of t...

Sec. 2819. Payment In Counterfeit Money: Payment in counterfeit money is no payment in law and the debtor is not thereby discharged from his indebtedness though he pays it in good faith.1 The same principle applies to payment in canceled Uni...

Sec. 2820. By Whom Payment May Be Made - Payment By Debtor: Payment is usually made by a party who is primarily liable for the debt; and if such party makes or tenders payment, the creditor is bound to accept it.1 Even if the maker of a note is insolvent, and ...

Sec. 2821. Payment By Stranger To Contract: A stranger to the contract who does not act as the agent of the debtor, can not discharge the debt by paying it unless the creditor assents.1 Since this question usually arises in cases in which the c...

Sec. 2822. To Whom Payment May Be Made - Payment To Creditor: Payment, in order to have its intended legal consequences, must be made to the creditor or to his authorized agent;1 although in this case, as in others,2 the principal may be bound by estoppel for th...

Sec. 2823. Payment To Agent Of Creditor: Whether one who accepts a payment is authorized to bind the creditor by the receipt thereof, is a question which depends upon the general principles of the law of agency, including estoppel.1 If autho...

Sec. 2824. Place Of Payment: If the debtor and creditor have agreed upon the place at which payment is to be made, the debtor must make payment at such place and the creditor must receive payment at such place in the absence of s...

Sec. 2825. Time Of Payment: If a contract for the payment of money does not specify the time at which such payment is to be made, the ordinary rules of construction apply; and the contract will be construed as though it required...

Sec. 2826. Payment By Mail: In the absence of specific authority from the creditor to make payment by mail, and in the absence of a usage or custom of making payments in this manner, the debtor can not make payment by mail so as...

Sec. 2827. Effect Of Payment - Judgments: It seems to us axiomatic that payment should operate as a discharge; but the common law had great difficulty in reaching this conclusion in cases involving payment of formal obligations. Since a judg...

Sec. 2828. Effect Of Payment - Obligations Under Seal: If the original obligation was under seal, a distinction seems to have been drawn between the so-called single bonds which were unconditional obligations and the bonds which were given upon condition....

Sec. 2829. Effect Of Payment - Simple Debts: Apart from the difficulty of discharging a formal instrument by any means less formal than the instrument which it is sought to discharge, payment which is a form of performance operates as a discharg...

Chapter LXXXII. Appropriation Of Payments: Sec. 2830. Nature of appropriation of payments. Sec. 2831. Appropriation by mutual consent. Sec. 2832 Voluntary payments - Appropriation by debtor. Sec. 2833. When debtor can make appropriation. S...

Sec. 2830. Nature Of Appropriation Of Payments: The problem of the appropriation of payments, or as it is sometimes called, application of payments, or imputation of payments, arises where a debtor owes two or more distinct debts to his creditor, o...

Sec. 2831. Appropriation By Mutual Consent: If the parties have made an agreement as to the application of a payment before such payment is made, the parties are bound thereby.1 If by a provision in a mortgage, payments from a specified source ...

Sec. 2832. Voluntary Payments - Appropriation By Debtor: If the debtor makes the payment voluntarily and out of his own funds, he has the right to direct the application of such payment.1 He may direct the payment to be applied to an illegal demand in prefe...

Sec. 2833. When Debtor Can Make Appropriation: The debtor's right to make application of the payment is lost if he makes the payment voluntarily without directing the application,1 or at any rate if the creditor makes application before the debtor...

Sec. 2834. Appropriation By Creditor - Common-Law Rule - Appropriation Among Valid Debts: When the debtor loses his right to make an application of a payment, the creditor acquires such right.1 Upon the question of the extent of his right there is a conflict of authority. The common-law ru...

Sec. 2835. Appropriation To Unenforceable Or Invalid Debts: The creditor may even apply payments to debts which for some technical reason are unenforceable, but are on valuable consideration and are not tainted with illegality. Thus he may apply a payment to a...

Sec. 2836. CIVIL-Law Rule: In other states the civil-law rule, that the creditor must apply payments so as to discharge that debt which it is most for the debtor's interest to have discharged, is followed.1 ...

Sec. 2837. When Creditor Can Make Appropriation: There is a conflict of authority as to the time at which the creditor may exercise his right of appropriating payments made by the debtor. The common-law rule assumes that it is not necessary that the...

Sec. 2838. Appropriation By Law - Presumed Mutual Intention Of Parties Followed: It is only when the parties have failed to apply a payment that the law will make such application.1 If neither party is shown to have made an appropriation of a payment, the law will make such approp...

Sec. 2839. Appropriation In Order Of Maturity Of Debt: Payment will, in the absence of reasons to the contrary, be applied to the oldest debt,1 as to the note of a series which matures earliest,2 and to the earliest items of a running account.3 If the sec...

Sec. 2840. Appropriation As Between Principal And Interest: A payment upon an interest bearing debt will be applied to the interest in preference to the principal,1 and if the debtor is indebted to the creditor in several debts, each bearing interest, payment ...

Sec. 2841. Conflict Between Interests Of Debtor And Creditor - Common-Law Rule: When the interests of the debtor require one application and those of the creditor require another, we have again a conflict between the common-law rule and the civil-law rule.1 The common law rule re...

Sec. 2842. CIVIL-Law Rule: The civil-law rule requires the law to apply payments for the benefit of the debtor in accordance with his presumed intention.1 This rule naturally prevails in jurisdictions whose law is based on the ...

Sec. 2843. Interest Of Third Persons In Fund Used For Payment: Different questions arise where third persons are interested in one of two obligations, either as principal or surety. In such cases the rights of third persons must be considered and they may overrid...

Sec. 2844. Source Of Payment As Affecting Appropriation: If a payment is made from a given fund or from a given source, such payment must be applied to a debt which is a lien upon such fund or which is a liability against such source as against other debts,...

Sec. 2845. Creditor's Ignorance Or Knowledge Of Interest Of Third Person Or Source Of Fund: In some jurisdictions the general rule that payments from a fund must be applied so as to exonerate such fund, is affected by the knowledge or the ignorance of the creditor to whom such payment is mad...

Sec. 2847. Involuntary Payments: The general rules as to the application of payments have no effect in case of involuntary payments, coerced by the law. Neither debtor1 nor creditor2 can direct the application of involuntary payments...

Sec. 2848. What Amounts To Appropriation By Debtor: Payment made in pursuance of a pre-existing contract as to its application is treated in law as being so applied,1 especially if the rights of third persons are prejudiced thereby, as where, in relian...

Sec. 2849. What Amounts To Appropriation By Creditor: The creditor may make an appropriation of a payment by his intention to make such appropriation, together with some outward and visible act which makes such intention manifest.1 An act which is in its...

Sec. 2850. What Amounts To Appropriation By Act Of The Law: The appropriation which the law makes of payments not made in the course of legal proceedings is automatic and self-executing. A judgment or judicial decree may be necessary to settle any doubt as to ...

Sec. 2851. Effect Of Appropriation: An application when once made is a finality,1 and can be changed afterwards only by the consent of the parties.2 If the debtor has once made a valid appropriation of a payment, neither he3 nor the cre...

Chapter LXXXIII. Tender: I. DEFINITION AND NATURE Sec. 2852. Definition and nature of tender. Sec. 2853. Nature of obligation, performance of which may be tendered. II. TIME AND PLACE AT WHICH TENDER CAN BE MADE Sec. 2854...

I. Definition And Nature. Sec. 2852. Definition And Nature Of Tender: Tender is a proffer of performance made in due form by a party who is entitled to perform1 The elements of tender which are necessary to make a tender in due form are discussed in the following sectio...

Sec. 2853. Nature Of Obligation, Performance Of Which May Be Tendered: Whether an obligation is one the performance of which may be tendered, so as to have the legal effect of a valid tender, depends in part on the question whether tender is made when performance is due,...

II. Time And Place At Which Tender Can Be Made. Sec. 2854. Tender Before Maturity: A party to a contract can be compelled to assent to the modification of the terms thereof, without his consent; and accordingly the creditor can not be compelled to accept payment or performance befor...

Sec. 2855. Time At Which Tender May Be Made - Tender After Default At Common Law: At common law a plea of tender was said to be insufficient unless the defendant alleged that he had always been ready to perform entirely the contract on which the action was founded;1 and accordingly...

Sec. 2856. Tender After Default - Modern Rule: The practical injustice of permitting a plaintiff to prosecute an action and to recover interest and costs after the defendant has tendered the principal of a liquidated money debt, together with inte...

Sec. 2857. Tender After Action Brought - Common-Law And Statutory Rules: Even if tender may be made after default, it can not be made after action has been commenced in the absence of some statutory provision or rule of court which authorizes such tender.1 Such tender has ...

Sec. 2858. Tender After Action Brought - Under Rule Of Court: Under the practice in force in some jurisdictions, payment into court could be made, under a rule or order of court, after action was brought.1 If such payment was made by the defendant under leave of...

Sec. 2859. Place Of Making Tender: If the contract provides for the place of payment, tender may be made there even if the creditor is absent.1 If no place of payment is fixed by the contract, tender must be made to the creditor in ord...

III. Parties To Tender. Sec. 2860. By Whom Tender Can Be Made: If the creditor stands upon his rights and waives none of them, he may insist upon the debtor's strict compliance with the elements of tender. Only the debtor, or his legal representative,1 can make a...

Sec. 2861. To Whom Tender Can Be Made: Tender can be made only to the creditor,1 or to one of two or more joint creditors,2 or to the duly authorized agent, of the creditor,3 or his personal representatives.4 Tender of a debt due to a buil...

IV Elements Of Tender. Sec. 2862. What Can Be Tendered: If the contract is one for the payment of money generally, tender must be made in such money as is legal tender.1 Coin which is legal tender is not deprived of that quality by being worn as long as it...

Sec. 2863. Actual Production Of Thing Tendered - Ability To Perform: The thing which is tendered, especially if money, must be actually produced and offered to the creditor as far as is in its nature possible, unless this requirement is waived.1 What amounts to waiver ...

Sec. 2864. Tender Of Less Amount Than Due: The amount tendered must be equal to the amount of the indebtedness. Tender of less than the amount due is ineffective.1 A tender of a part of the amount due does not stop the running of interest upon...

Sec. 2865. Tender Of Greater Amount Than Due: If the debtor tenders an amount which is greater than the true amount of the indebtedness, such tender is said to be sufficient if the circumstances under which it is made indicate that the surplus ov...

Sec. 2866. Tender Of Property Other Than Money: If tender of property, other than money, is necessary, the production of the articles at the proper time and place is necessary,1 and an offer to produce them in the future is insufficient.2 If the pr...

Sec. 2867. Conditions Imposed By Party Making Tender - Conditions Already Imposed By Law: The debtor may attach a condition to the tender requiring the creditor to perform some act which he would be in any event legally bound to do without affecting the sufficiency of the tender.1 Thus he ...

Sec. 2868. Conditions Not Imposed By Law: If, however, the debtor attempts to impose any conditions not required by law,1 such as demanding that the tender be accepted as full performance,2 or that a discharge3 or a release in full4 be given,...

Sec. 2869. Demand For Surrender Of Note When Paid: There is some conflict of authority as to whether a tender of the full amount of a negotiable instrument is insufficient when coupled with a demand for the surrender thereof. The better rule is that a...

Sec. 2870. Tender In Equity: A decree in equity is flexible as distinguished from the rigidity of the judgment at common law. It can be moulded to suit the rights of the parties, and it can be conditioned, as to one party, on the...

Sec. 2871. Keeping Tender Good: After tender is duly made it must, to preserve its legal effect, be kept good;1 that is, the person making the tender must keep enough money on hand after the date of the tender to make the payment if...

V. Waiver of Tender. Sec. 2872. Waiver Of Elements Of Tender - Waiver Of Actual Production: The creditor may waive certain requisites of a valid and operative tender.1 The law does not require either of the parties to the contract to do a vain thing;2 and if the party to whom the tender is t...

Waiver Of Actual Production. Continued: Tennessee. Rogers v. Tindall, 99 Tenn. 356, 42 S. W. 86. Washington. Griesemer v. Mutual Life Ins. Co., 10 Wash. 202, 38 Pac. 1031; Weinberg v. Naher, 51 Wash. 591, 22 L. R. A. (N.S.) 956, 99 Pac. 73...

Sec. 2873. Refusal On Specific Ground: Refusal of tender based on a specific ground of objection,1 such as the insufficiency of the amount tendered,2 or on the ground that the contract has already been discharged by an alleged breach,3 ope...

VI. Effect Of Tender. Sec. 2874. Effect Of Sufficient Tender: When tender is made the creditor has a reasonable time in which to decide whether he will accept it or not,1 unless he rejects the tender without taking such reasonable time. 10 Union Mutual Life Ins...

Sec. 2875. Effect Of Insufficient Tender: If a tender is insufficient as lacking the requisite elements of a valid tender,1 and if the creditor has not waived such defects,2 such tender has no legal effect.3 If a tender is refused on the grou...

Sec. 2876. Tender Conclusive As To Debtor's Liability: Tender followed by payment into court establishes the debtor's liability to that amount.1 In the absence of statute, the payment into court by the defendant is not an admission of the existence of pla...

Sec. 2877. Effect Of Tender On Collateral Security: Since performance can not be tendered before maturity, tender of a debt before the day for payment does not discharge the lien of a mortgage which is given to secure such debt.1 Tender of the amount o...

Chapter LXXXIV. Breach: I. NATURE AND METHOD OF TREATMENT OF TOPIC Sec. 2878. Nature of breach. Sec. 2879. Treatment of topic of breach. Sec. 2880. Nature of default. II. METHOD OF BREAKING CONTRACT A. Renunciation befor...

Breach. Continued: Sec. 2962. Intention of parties. Sec. 2963. Nature of performance as affecting relation of covenants. Sec. 2964. Specific illustrations of concurrent covenants - Contracts for the sale of realty. S...

I. Nature And Method of Treatment of Topic. Sec. 2878. Nature Of Breach: In discussing breach and its effects and consequences, and in attempting to define it, as is occasionally done, the courts ordinarily assume that the idea is one which is so thoroughly understood that...

Sec. 2879. Treatment Of Topic Of Breach: In discussing the topic of breach a strict adherence to logical arrangement would require a consideration of the facts which amounted to breach, followed by a consideration of the effect of breach. As...

Sec. 2880. Nature Of Default: In this connection, at the risk of repetition, it may be noted that the term party who is not in default is used as a convenient method of indicating the party who has not committed such a default a...

II. Method Of Breaking Contract. A. Renunciation Before Performance. Sec. 2881. Classes Of Breach As To Manner Of Breaking Contract: Breach of contract may be made in either of two ways: (1) One party to the contract may by word or act indicate that the contract is no longer binding upon him, and the adversary party may elect to tr...

Sec. 2882. Renunciation Before Performance Is Due As Excuse For Not Tendering Performance - General Principles: While a contract is still executory on both sides, the renunciation of it by one of the parties thereto before the time for performance has arrived has, or may have, important legal consequences. What...

Sec. 2883. Specific Illustrations: Renunciation of a contract to sell land excuses tender of the purchase price and demand for the deed.1 If A has entered into a contract to make a lease to B, and B has agreed to pay rent and furnish a...

Sec. 2884. Effect Of Election Not To Tender Performance On Right To Recover Compensation At Contract Rate Or To Have Specific Performance: If, however, the party who is not in default wishes to recover the compensation named in the contract as if he had performed in full, and if the action is brought in a jurisdiction in which the party ...

Sec. 2885. Renunciation - Theory Of Right Of Action At Law Before Performance Is Due: Whether renunciation of a contract by one party before performance is due by the terms thereof can be treated by the adversary party as a breach so as to enable the adversary party to bring an action ...

Sec. 2886. Renunciation - Theory Of Suit In Equity Before Performance Is Due: Whether on renunciation by the party in default the party who is not in default may have a decree of specific performance before the time fixed by the contract for performance is a question upon which...

Sec. 2887. Specific Illustrations Of Principle Of Breach By Renunciation - Contracts For Personal Services: The principle that renunciation before performance is due is such a breach that the party who is not in default may maintain an action thereon at once is applied in cases of contracts for personal ser...

Sec. 2888. Contracts To Intermarry: The principle is also applied to a promise of marriage which is repudiated by one of the parties before the time which has been agreed upon for performance arrives; and the adversary party may bring a...

Sec. 2889. Contracts For Sale Of Personalty: The doctrine of breach by renunciation in advance is not, however, limited to cases of these sorts, but it is applied generally to all classes of contracts1 without regard to their subject-matter, exc...

Sec. 2890. Other Contracts: While at one time this principle was rarely applied except in contracts for personal services, promises of marriage, and contracts for the sale of personalty, the courts have not confined the applicat...

Sec. 2891. Renunciation In Advance Of Obligation For The Payment Of Money Only: A contract which has been performed in full on one side, and in which the executory covenant on the other is one for the payment of money only at a future time, is usually said not to be within the do...

Renunciation In Advance Of Obligation For The Payment Of Money Only. Continued: To a less degree, justification may be found for the obiter which lays down the rule that the negotiable instrument is an exception to the general principle of renunciation in advance. The negotiable ...

Sec. 2892. Renunciation - Theory Of No Right Of Action Before Performance Is Due: In a few jurisdictions it is said that renunciation before performance is due does not amount to breach, but that if such renunciation is not withdrawn when performance is due breach exists.1 The doct...

Sec. 2893. Renunciation - Right Of Election Of Party Not In Default: In jurisdictions where renunciation before performance is due is held to be ground for treating the contract as discharged, and for bringing an action thereon at once, it amounts to breach and dischar...

Sec. 2894. When Election To Treat Renunciation As Breach Must Be Made: Some courts bold that this election to treat such renunciation as a breach must be made promptly if at all,1 or at least in a reasonable time.2 On the other hand, the party not in default has been all...

Sec. 2895. What Amounts To Election To Treat Renunciation As Breach: In order to elect to treat the contract as discharged by renunciation in advance, the party who is not in default must indicate his intention to accept such renunciation as a discharge by some outward...

Sec. 2896. Effect Of Election To Treat Contract As In Force - General Principles: If the party who is not in default elects to treat the contract as still in force in spite of the renunciation by the adversary party, he may do so as long as such conduct on his part does not aggrava...

Sec. 2897. Effect Of Election To Treat Contract As In Force As To Right To Maintain Action: By electing to treat the contract as in effect, the party not in default loses his right to maintain an action for such breach before the time fixed by the contract has arrived,1 at least if the party...

Sec. 2898. Election To Treat Contract As In Force As Affecting Damages - Theory That Damages Can Not Be Increased: The right of election on the part of the party who is not in default to treat the contract as in force, exists, in many jurisdictions, only so far as it is consistent with the rule that the party not ...

Sec. 2899. Theory That Damages May Be Increased: In some cases, however, the party who is not in default has been permitted to continue performance and to recover the contract price.1 One who has agreed to manufacture and to deliver goods,2 or to co...

Sec. 2900. Effect Of Election To Treat Renunciation As Discharge: If the party not in default elects to treat renunciation as a discharge, he is excused from further performance,1 and he may, in most jurisdictions, maintain an action at once, without waiting for the...

Sec. 2901. What Constitutes Renunciation: Formal renunciation not essential it is not necessary that a party who attempts to repudiate a contract should do so in any set or definite form to perform it, or to recognize it as a valid obligation...

Sec. 2902. Renunciation Must Be Clear And Unequivocal: To operate as a breach by renunciation, however, the party who renounces the contract must do so by a distinct, unequivocal and absolute refusal to perform the contract or to recognize it as binding u...

Sec. 2903. Dispute As To Meaning Of Contract: A dispute as to the meaning of the contract has been held not to amount to a renunciation thereof,1 at least if such dispute is left for subsequent adjustment.2 If one party demands as performance mor...

Sec. 2904. Request Or Demand For Modification As Breach: As has already been stated, a prior valid contract can not be abrogated or modified by an alleged new contract unless both parties assent thereto.1 An attempt to get a favorable modification of a con...

Sec. 2905. Renunciation As To Present Or Future Time: To amount to renuuciation the declaration of the party renouncing must refer to the present time, and must show that he does not look upon it as binding him. His statement while performing in good fai...

Sec. 2906. Renunciation Of Part Of Contract: It is sometimes said that renunciation can not be regarded as a breach unless it is renunciation of the entire contract, or of the entire performance which is due under the contract.1 This statement o...

Sec. 2907. Damages In Case Of Breach By Renunciation: If a contract is broken by renunciation before performance is due, the adversary party may recover damages occasioned by such breach, but he can not, without performance, recover upon the contract as ...

B. Renunciation When Performance Is Due. Sec. 2908. Renunciation When Performance Is Due - General Principles: If a party to a contract repudiates the contract, or refuses to perform it when the time for performance on his part has arrived, or while the adversary party is performing the contract on his part, s...

Sec. 2909. What Amounts To Renunciation: Conduct relied upon as renunciation must be unequivocal.1 Conduct induced by the belief that the adversary party has himself abandoned the contract can not be treated as renunciation.2 Renunciation do...

Sec. 2910. Effect Of Renunciation: Renunciation when performance is due amounts to breach, with all the consequences thereof.1 The party in default can not, after renunciation during performance, which has been treated by the adversary...

Sec. 2911. Specific Examples Of Renunciation: If the purchaser of land under an executory contract refuses to accept the debt or to pay for the land, such refusal excuses the vendor from tendering performance.1 Under a contract to repurchase cert...

C. Voluntary Inability To Perform. Sec. 2912. Voluntary Inability To Perform - General Principles: If one of the parties to a contract acts voluntarily in such a manner as to make it impossible for him to perform the contract, such conduct on his part amounts to breach of such contract.1 This is so...

Sec. 2913. What Amounts To Voluntary Inability To Perform - -General Principles: The act of the party who makes performance on his own part impossible must be such as makes performance absolutely impossible and not merely improbable.1 At the same time it is generally held that a p...

Sec. 2914. Specific Illustrations: If A agrees to mine coal on B's land, paying a specified royalty to B on the amount mined, such royalty not to be less than a specified minimum sum annually, A impliedly agrees to do nothing to incapa...

Sec. 2915. Voluntary Inability Affecting Part Of Contract: In most of the cases the act which makes performance impossible on the part of the party who performs such act, affects all the covenants on his part to be performed, and operates as a total breach.1 ...

Sec. 2916. Voluntary Inability - Effect On Liability Of Party In Default: The party who has made performance impossible can not discharge himself thereby from liability under the contract.1 One who agrees to buy all the ice necessary for his business can not discharge his o...

Sec. 2917. Voluntary Inability - Effect On Rights And Liabilities Of Adversary Party: In case of voluntary inability to perform, the adversary party who is not in default may treat such act as discharging him from further liability under the contract.1 A agreed to pay to B seventy-five...

D. Prevention Of Performance By Adversary Party. Sec. 2918. Prevention Of Performance By Adversary Party - General Principles: One of the parties to the contract may so act that he makes it actually impossible for the adversary party to perform, or so that he delays performance on the part of the adversary party before the ti...

Sec. 2919. What Amounts To Prevention Of Performance By Adversary Party: Actual violence, threats of imprisonment, and the like, which constitute duress, excuse performance which is prevented thereby.1 In order to amount to a prevention of performance by the adversary par...

Sec. 2920. Specific Illustrations - Prevention Of Test, Measurement, Etc: If the party who makes complete performance impossible has received the substance of that for which he contracted, and if his act makes literal performance impossible, the adversary party may recover ...

Sec. 2921. Building Contracts: A common illustration of the doctrine that one who makes performance by the other impossible, or delays it, thereby discharges the contract, or excuses delay, is found in building contracts. If the ow...

Sec. 2922. Party Who Prevents Performance Not Discharged From Liability: If one party to a contract makes it impossible for the other party to perform the contract or delays the performance of it, the party who thus makes performance impossible on the part of the other, ca...

Sec. 2923. Party Who Prevents Performance Liable In Damages: The party who has prevented the adversary party from performing has himself committed a breach for which he is liable in damages.1 He can not set up the failure of the adversary party to perform, as a...

Sec. 2924. Party Whose Performance Is Prevented Discharged From Further Performance: The party who is prevented by the act of the adversary party from performing the contract further may treat such conduct as a discharge of the contract.1 The delay of the government in approving plans...

Sec. 2925. Party Whose Performance Is Prevented Discharged From Liability For Damages: The party who makes performance impossible can not recover damages from the adversary party for not performing.1 No recovery for damages can be had for delay in delivering a chattel sold if the delay ...

E. Non-Performance. Sec. 2926. Non-Performance As Breach: In the types of breach thus far discussed, the party who breaks the contract has manifested his intention by word or deed to disregard the obligation of the contract, and no longer to recognize it as ...

Sec. 2927. Breach Need Not Be Wilful: The existence and the fact of breach are not, in any way, dependent upon the intention or wish of the party in default to break the contract, or upon the amount of care and faith used by the party who...

Sec. 2928. Specific Illustrations Of Breach - Contract For Sale Of Realty: A contract for the sale of realty is broken by the failure or inability of the vendor to furnish title, or at least a marketable title, to the realty which he has covenanted to convey, at the time fix...

Sec. 2929. Contract For Sale Of Personalty: A contract for the sale of personalty is broken by failure on the part of the seller to deliver such goods in substantial compliance with the terms of the contract.1 Material delay in the time of deli...

Sec. 2930. Breach Of Contract For Work, Labor, And Personal Services: A contract for work and labor is broken by the act of the employe in quitting his employment without legal excuse;1 or by his incompetency;2 or by his wilful disobedience to the lawful orders of his e...

Sec. 2931. Contracts For Services Other Than Personal: A contract requiring a manufacturer to furnish an experienced and successful sales agent to a dealer to whom he sells his goods, is not broken by the fact that the agent.whom he recommends is in fact ...

Sec. 2932. Contract Not To Compete: A contract not to compete in business, if valid, is broken by engaging in such business at such place,1 or by his manufacturing the medical preparation in which he has agreed not to compete, under ano...

Sec. 2933. Building And Construction Contracts: A building contract is broken on the part of the contractor by his failure to construct the building or other structure in accordance with the terms of the contract.1 What constitutes performance,2 an...

Sec. 2934. Breach Of Contract For Transportation: A contract for transportation is broken on the part of the carrier by failure to deliver at the time agreed upon, if the contract fixes the time at which delivery is to be made.1 If the contract does ...

Sec. 2935. Breach Of Contract To Make A Will: A contract to make a will can not be broken by non-performance until the death of the testator,1 since the testator has the whole of his life in which to perform. As in the case of other contracts,2 h...

Sec. 2936. Breach Of Other Contracts: A contract to furnish support is broken by the failure to furnish such support,1 or by treating the party who is to receive such support, with such harshness that he is unwilling to remain at the hous...

F. Involuntary Inability To Perform. Sec. 2937. Inability To Perform Executory Covenant As Breach: If it can be shown that the adversary party to an executory contract is not able to perform on his part, and that he will necessarily be unable to perform when the time for performance arrives, such f...

Sec. 2938. Bankruptcy As Breach: The bankruptcy of a party to an executory contract is said to operate as a breach of such contract.1 This has been explained on the theory that a party to an executory contract impliedly agrees that h...

Sec. 2939. Dissolution Of Corporation As Breach: In many jurisdictions the dissolution of a corporation is held to operate as a breach of the executory contracts of the corporation,1 except in case of certain special forms of contracts2 or under spe...

Sec. 2940. Belief In Future Inability Or Breach As Discharge: The fact that A has reasonable cause to believe, and does believe, that B will be unable to perform his part of the contract, does not of itself discharge A from performing his part.1 The fact that it...

III. Relation Of Covenants To One Another. A. General Principles. Sec. 2941. Relation Of Covenants To One Another - Classification: Whether breach discharges the adversary party from further performance, depends upon the relation, or want of relation, between the covenants entered into and broken by the party who breaks the contra...

Sec. 2942. Nomenclature: While the courts generally employ the names independent,' precedent and concurrent covenants, especially in recent cases, the use of these terms is by no means uniform, and, especially in the ear...

Sec. 2943. Confusion In Nomenclature Due To Resemblance In Legal Effect: The practical difference between the various classes of covenants when considered with reference to their relation to one another consists in the extent to which it is necessary for one of the parties...

Sec. 2944. Construction Of Covenants - Original Rule - Sealed Contracts: The question of the relation of the covenants of a contract to one another was first presented at common law in the case of contracts under seal, and it was held that such covenants were prima facie i...

Sec. 2945. Original Rule - Simple Contracts: When the simple contract was recognized by the king's courts, the rules which applied to sealed contracts were,.in many cases, carried over to simple contracts by way of analogy; and among them the ru...

Sec. 2946. Evasion Of Original Rule - Modern Rule: The actual operation of this rule, and possibly the fact that the courts were beginning to feel that justice could better be done by treating the covenants as dependent and by forcing the jury to conf...

Sec. 2947. Sergeant Williams' Tests For Determining Nature Of Covenants: As the modern classification of contracts was first laid down by Lord Mansfield in Kingston v. Preston,1 the modern doctrines for ascertaining the nature of any given covenant are based on a note by S...

Sergeant Williams' Tests For Determining Nature Of Covenants. Continued: In order, therefore, to discover that intention, and thereby to learn, with some degree of certainty, when performance is necessary to be averred in the declaration and when not, it may not be improp...

Sec. 2948. Intention Of Parties Paramount: While the courts now assume that covenants are dependent rather than independent, and concurrent on the one hand rather than precedent and subsequent on the other, this rule, like the other rules of m...

Intention Of Parties Paramount. Continued: Connecticut. Scovill v. McMahon, 62 Conn. 378, 21 L. R. A. 58, 36 Am. St Rep. 350, 26 AtL 479. Massachusetts. Sohier v. Trinity Church, 109 Mass. 1. Rhode Island. Greene v. O'Connor 18 R. I. 56, 19...

Sec. 2949. Relation Of Covenants As Depending On Nature Of Performance: The relation of the covenants depends in part on the question whether performance on the one side or the other requires only the doing of some continuous act, as for example the payment of money, or w...

Sec. 2950. Effect Of Partial Performance Or Delay On Relation Of Covenants: A question upon some phases of which there is a marked conflict of authority is whether a covenant is to be construed as independent or dependent according to its relation to the remaining covenants w...

B. Precedent And Subsequent Covenants. Sec. 2951. Precedent And Subsequent Covenants - Definition And Classification: The term precedent covenant implies, as a correlative, a subsequent covenant/' A precedent covenant is one which, by the terms of the contract, is to be performed before the corresponding covenan...

Sec. 2952. Specific Types Of Precedent Covenants - Contracts For The Sale Of Land: While, at modern law, the covenants in a contract for the sale of realty which provide on the one hand for the conveyance, and on the other for payment of the purchase price, are regarded as concurren...

Sec. 2953. Contracts For The Sale Of Personalty: While, in the absence of any specific agreement to the contrary, covenants for the sale and transfer of the possession of goods, on the one hand, and covenants for the payment therefor on the other, a...

Sec. 2954. Covenants For Giving Security: If extension of credit is not intended, a provision for giving bond or other security is precedent to the right of the party who is to give such bond or security, to enforce the contract against the a...

Sec. 2955. Railway Aid Contracts: Railway aid contracts, which were far more common in the past than they are today, afforded a number of illustrations of precedent covenants, although from the wording of many of these contracts the p...

Sec. 2956. Contracts With Carriers: Under a contract by which a carrier agrees to transport passengers, the duty of the passenger to pay his fare is frequently precedent to the duty of the carrier to begin performance of his duty to tra...

Sec. 2957. Contracts For Work, Labor, Services, Etc: In the absence of a provision in a contract of employment which, in express terms, or by fair implication, requires the employer to pay before the employe has performed the contract on his part, perfo...

Sec. 2958. Building And Construction Contracts: In a contract for the construction of a building, covenants on the part of the owner which, either by their express terms, or from the nature of the respective covenants, must be performed before the ...

Sec. 2959. Other Classes Of Contracts: A covenant by A to support B, and B's covenant to give his notes in consideration thereof, form dependent covenants; and B's covenant to give his notes is precedent to A's covenant to furnish such sup...

Sec. 2960. Performance Of Precedent And Subsequent Covenants: No recovery can be had upon a contract by a party who has not performed or tendered performance of precedent covenants on his part to be performed against the adversary party who is in default for per...

C. Concurrent Covenants. Sec. 2961. Concurrent Covenants - Definition And Nature: Concurrent covenants are those which, by the terms of the contract, are each to be performed at the same time by each of the parties who are respectively bound to perform each.1 The practical effect o...

Sec. 2962. Intention Of Parties: As in the case of other covenants,1 whatever may have been the original common-law rule,2 the intention of the parties must be considered primarily in determining whether a covenant is concurrent or n...

Sec. 2963. Nature Of Performance As Affecting Relation Of Covenants: If, from its nature, performance is or may be instantaneous on each side, as in the case of a sale of realty which is to be conveyed by one deed, and for which the purchaser is to make a single paymen...

Sec. 2964. Specific Illustrations Of Concurrent Covenants - Contracts For The Sale Of Realty: Under a contract for the sale of realty in which no specific provision is made as to the order of time at which the deed is to be delivered and payment made, these acts are concurrent.1 If the vendor ...

Sec. 2965. Contracts For The Sale Of Personalty: Under a contract for the sale of personalty, in which no specific provision is made as to the order in time of payment and delivery, these acts are concurrent.1 If the seller fails to deliver the good...

Sec. 2966. Other Contracts: While a carrier may require prepayment of freight before he transports the goods,1 he may transport the goods without requiring a payment of freight; and in such a case his duty to deliver the goods i...

Sec. 2967. Concurrent Covenants - Method Of Putting Adversary Party In Default - Duty To Perform In Advance: If the covenants are concurrent, one party can not be required to perform while the other party has not yet performed and is not able and willing to perform.1 The purchaser can not be compelled to pay...

Sec. 2968. Concurrent Covenants - Necessity Of Formal Tender: Language is occasionally used which seems to imply that a formal tender is necessary.1 A formal tender, however, while frequently the most satisfactory method of putting the adversary party in default...

Sec. 2969. Concurrent Covenants - Sufficiency Of Readiness And Willingness To Perform And Demand For Performance: If one of the parties is able, ready and willing to perform, gives notice to the other of that fact and demands performance, this is sufficient to put the other in default if performance is refused.1 ...

Sec. 2970. Concurrent Covenants - Necessity Of Readiness And Willingness To Perform And Demand For Performance: Either party must be ready and willing to perform and must give notice thereof to the adversary party, to put such adversary party in default.1 To put the one party in default the other must either te...

D. Independent Covenants. Sec. 2971. Independent Covenants - Definition And Nature: A covenant is said to be independent if the performance of such covenant by the party who is bound thereby is not related in any way to the duty of the adversary party to perform the covenants which, ...

Sec. 2973. Covenants To Be Performed At Different And Unrelated Times - Specific Illustrations: Covenants by which an irrigation company agrees to furnish water continuously for a given period, and a land owner agrees to pay therefor in annual payments, have been held to be independent on the th...

Sec. 2974. Covenant Which Forms Part Of Consideration: A covenant by one party which does not form the entire consideration for the covenants to be performed by the adversary party, but which forms only a part of such consideration, is held to be an indep...

Covenant Which Forms Part Of Consideration. Part 2: The distinction is very clear, where mutual covenants go to the whole of the consideration on both sides, they are mutual conditions, the one precedent to the other. But where they go only to a part,...

Covenant Which Forms Part Of Consideration. Part 3: 7 Emigrant Company v. Adams County, 100 U. S. 61, 25 L. ed. 563. 8 Havre De Grace Real Estate & Power Co. v. Havre De Grace, 102 Md. 33, 61 Atl. 662. 9 Benham v. Columbia Canal Co., 74 Wash. 110, 13...

Sec. 2975. Absolute Promises: A covenant may be independent because it is intended by the parties as an absolute promise; that is, each party may accept the promise of the adversary party rather than the performance thereof, not m...

Sec. 2976. Effect Of Failure To Perform Independent Covenant: From the nature of the independent covenant,1 the essential characteristic of which is that the parties intend that the performance thereof shall not depend upon the performance of the covenant of the...

IV Relation Of Covenants As To Purpose of Contract. A. Failure Of Consideration. Sec. 2977. Failure Of Consideration - General Nature: If A, a party to a contract which is executory on his side, does not receive what he was promised by B in consideration for his promise, the question is frequently presented whether A can use such fac...

Sec. 2978. Failure Of Consideration Imports Breach: The term failure of consideration imports that the party to whom the consideration moved has not received under the contract what it was agreed that he should receive.1 If he receives exactly what h...

Sec. 2979. Failure Of Consideration - Speculative Bargains: If A makes a speculative bargain by which he intends to take the risk of gain or loss, the fact that such speculation results unfavorably to A and that he does not gain the advantages which he had hop...

Sec. 2980. Total Failure: In other cases of failure of consideration, the question which is primarily presented is one of the effect of non-performance of precedent, concurrent, or subsequent covenants. Prom the standpoint of ...

Sec. 2981. Breach Of Covenant Not A Vital Term Of Contract: It is not the breach of every covenant of a contract that may operate as a discharge of the adversary party. To have this effect the covenant broken must be a vital term of the contract, breach of whi...

Sec. 2982. Partial Failure - Full Compensation In Damages: Partial failure of consideration in cases in which compensation for breach can be made by awarding damages to the injured party, is analogous to breach of an independent covenant which is independent ...

Sec. 2983. Specific Illustrations: If A sells certain timber to B at a certain price, and as part of such contract A agrees to log such timber at a certain price, and B pays the consideration agreed upon, A can not treat B's delay in p...

Sec. 2984. Partial Failure Of Consideration - Inability To Make Restitution: If the party who has performed in part can not be placed in statu quo, the adversary party can not treat the contract as discharged because of partial failure of consideration.1 Under contract whereb...

Sec. 2985. Partial Failure Of Consideration As Partial Defense: In some states a partial failure of consideration may be used as a partial defense in an action on the contract, even if the consideration is not apportioned and the damages are unliquidated.1 Thus in...

Sec. 2986. Partial Failure - Vital Term: If compensation for a partial failure of consideration will not give full protection to the interests of the party who is not in default, and if the part of the consideration which has failed is a vit...

Partial Failure - Vital Term. Continued: Wash. 1, 80 Pac. 202; Dishman v. Huetter, 41 Wash. 626, 84 Pac. 590; Ihrke v. Continental Life Ins. & Investment Co., 91 Wash. 342, L. R. A. 1916F, 430, 157 Pac. 866. West Virginia. Chandler v. Frenc...

Sec. 2987. Failure Of Consideration For Executed Conveyance Of Realty - General Principles: If the vendor has performed a contract for the sale or conveyance of realty by executing and delivering a deed therefor, failure of consideration on the part of the purchaser does not discharge the tr...

Sec. 2988. Conveyance In Consideration Of Contract To Furnish Support: A conveyance in consideration of a contract to support the grantor is thought by many courts to differ materially from the ordinary contract for the conveyance of realty, which has already been discus...

Sec. 2989. Total Failure Of Title - Executory Contract To Convey Realty: If a contract for the sale of realty is executory on both sides, total failure of title is failure of consideration for which the purchaser may avoid the contract.1 In case of total failure of title, ...

Sec. 2990. Partial Failure Of Title: Executory contract to convey realty. The effect of failure of title to a part of the realty which the vendor has agreed to convey to the purchaser, upon the remaining covenants of such contract, depen...

Sec. 2991. Failure Of Title - Executed Conveyance Of Realty: Upon the question whether a failure of title to realty which has been conveyed to the promisor is such a failure of consideration as to discharge a promise in consideration thereof, there is a diverge...

Sec. 2992. Failure Of Consideration In Sales Of Personalty: If the chattel which is sold is in the possession of the seller, there is an implied warranty that the seller has title thereto, unless there is some agreement to the contrary. Total failure of title ...

Sec. 2993. Failure Of Consideration In Assignment Of Invention Or Patent: Whether the invalidity of a patent amounts to failure of consideration is a question on which there is a conflict of authority. The English courts hold that it does not amount to failure of considerat...

B. Entire And Severable Contracts. Sec. 2994. Entire And Severable Contracts - Nature And Definition: If a contract is made up of two or more covenants on each side, the effect of a breach of one of such covenants upon the right of the adversary party to treat the whole contract as discharged depends ...

Sec. 2995. Entire And Severable Contracts - Importance Of Distinction-Oases Not Involving Breach: The question of the entire or severable character of a contract arises for several different reasons,1 and, to some extent, the view which the court takes as to the character of the contract depends i...

Sec. 2996. Entire And Severable Contracts - Importance Of Distinction - Cases Involving Breach: If a contract which is made up of two or more covenants on each side has been broken as to one of such covenants only, the question of the effect of such breach upon the remaining covenants of such co...

Sec. 2997. General Principles Of Construction Applicable: As in other questions of construction,1 the intention of the parties as to the entire or severable character of the contract must be determined by construing the contract as a whole;2 the surrounding ...

Sec. 2998. Construction As Affected By Purpose For Which Distinction Is Made: The rules of construction are applied differently, however, in the different classes of cases in which the question whether the contract is entire or severable may arise. If this question arises in co...

Sec. 2999. Inference Arising From Use Of One Or More Instruments: If the covenants are contained in different instruments, the courts incline to treat them as severable.1 Whether the contract in question is found in one instrument, or in two or more different instru...

Sec. 3000. Construction As Affected By Nature Of Subject-Matter: In determining whether a contract is entire or severable, the question is whether or not the parties intended to separate the different covenants into distinct contracts; and not whether the subject-m...

Sec. 3001. Effect Of Inconsistent Provisions: The greatest difficulty in determining the intention of the parties is found in cases in which certain provisions of the contract, such as the subject-matter and the like, tend to show that the contra...

Sec. 3002. Apportionment Of Consideration - Contract Presumed To Be Severable: While the question of the apportionment of the consideration has not the importance in determining the entire or severable character of contracts for the purpose of performance that it has in determin...

Sec. 3003. Apportionment Of Consideration - Contract Shown To Be Entire: While the presence or absence of apportionment of consideration is of great importance in determining whether the contract is entire or severable, as far as questions of performance are concerned, it...

Sec. 3004. Non-Apportionment Of Consideration - Contract Presumed To Be Entire: It is, as has been said before,1 possible for one consideration to support two or more covenants.2 The fact that the parties have not apportioned the consideration between the different covenants is o...

Sec. 3005. Non-Apportionment Of Consideration - Contract Shown To Be Severable: Even if the consideration is not apportioned, the contract when taken as a whole may show that the parties did not intend that the contract should be entire.1 If the risk under a policy of insurance i...

Sec. 3006. Consideration Apportioned In Part, And Not Apportioned In Part: If the consideration is in part apportioned and in part entire, the contract is entire.1 A contract which recites a consideration of one dollar, and which provides that A shall acquire certain interes...

Sec. 3007. Breach Of Employment Contracts: The question of the entirety of a contract of employment is presented in determining whether a separate action can be brought for each breach. An employe who is wrongfully discharged, has a choice of ...

C. Instalment Contracts. Sec. 3008. Instalment Contracts - General Nature: Contracts are often made which require delivery, or payment, or both, in instalments. Whether such contracts are entire and whether a breach as to one instalment is a discharge as to the remaining ins...

Sec. 3009. Purpose Of Parties In Entering Into Instalment Contracts: Whether the contract is one for the sale of goods to be delivered in instalments, or whether it is a contract for work and labor, or for the construction of some improvement, the party for whose benef...

Sec. 3010. History Of English Theory Of Instalment Contracts: The views of many of the American courts on the question of the effect of a breach as to one instalment of an instalment contract, have been greatly affected by the different theories which have been ...

Sec. 3011. Failure Of Buyer To Pay Instalment Due - Theory That Contract Is Discharged: If A and B enter into a contract by which A agrees to sell personal property to B, and B agrees to pay therefor in instalments, many authorities hold that a material and substantial default on the par...

Sec. 3012. Failure Of Buyer To Pay Instalment Due - Theory That Contract Is Not Discharged: In a number of cases it is held that a mere default in payment of an instalment, even though material, if not coupled with facts showing an intent on the part of the party in default to renounce his l...

Sec. 3013. Renunciation Or Abandonment By Purchaser As Discharge: in some cases the courts justify the result which they have reached, in holding that substantial failure to pay one instalment operates as a discharge of the entire contract, by treating default in pa...

Sec. 3014. Refusal Of Buyer To Accept Instalment: If the buyer refuses to accept an instalment which is tendered to him, such refusal suggests a renunciation or repudiation of liability under the contract on his part, to a much greater degree than fa...

Sec. 3015. Theory That Nonpayment Prevents Performance By Adversary Party: In other cases default in making payment is treated as a discharge on the theory that the party in default has made performance impossible on the part of the adversary party, by withholding payments.1...

Sec. 3016. Other Effects Of Non-Payment By Buyer: If the vendor instead of treating nonpayment of one instalment as a discharge, sues to recover such instalment, the contract is so far severable that he may recover any instalment due without waiting ...

Sec. 3017. Failure Of Seller To Deliver Instalment: In cases in which the seller is in substantial default for failure to deliver one or more of the instalments due under an instalment contract, it is held in a number of jurisdictions that the buyer ma...

Sec. 3018. Effect Of Uniform Sales Act: The Uniform Sales Act contains a provision as to the effect of default in the performance of an instalment contract on the part of either the buyer or the seller. Where there is a contract to sell go...

Sec. 3019. Delivery Or Tender Of Defective Instalment: If the seller delivers the amount agreed upon for each instalment as it comes due, and the buyer accepts such articles, the fact that the goods delivered in certain instalments are not up to the stand...

Sec. 3020. Contracts For Work And Labor - Default By Employe: The difficulties which have troubled many courts in dealing with contracts for the sale of goods have seemed to vanish when these courts have turned from a consideration of contracts of sale to a cons...

Sec. 3021. Contracts For Work And Labor-Default By Employer: If the employer fails to make payments in accordance with the terms of the contract, a substantial default on his part is such a breach that the adversary party is justified in treating the contract a...

Sec. 3022. Building And Construction Contracts: A building or construction contract is ordinarily, from its nature, an entire contract, even though provision is made for paying therefor in instalments as the work progresses.1 If the contract gives ...

V. Effect Of Breach. A. Election. Sec. 3023. Effect Of Breach: Until breach no cause of action arises on a contract.1 Upon breach a cause of action arises in favor of the party who is not in default, and against the party in default.2 Whatever effect the refusal ...

V. Effect Of Breach. A. Election. Sec. 3023. Effect Of Breach. Part 2: Missouri. Wayland v. Western Life Indemnity Co., 166 Mo. App. 221, 148 S. W. 626. New York. Shaw v. Republic Life Ins. Co., 69 N. Y. 286. Virginia. Clemmitt v. New York Life Ins. Co., 76 Va. 355. 4...

V. Effect Of Breach. A. Election. Sec. 3023. Effect Of Breach. Part 3: 12Long v Conklin. 75 111 32; New Oileans v Wardens. 11 La Ann 244 See obiter in Rowland Lumber Co. v. Ross, 100 Va. 275, 40 S. E. 022. 13 See Sec. 500. 14 See Sec. 589 I5 See ch XCV. It is true t...

Sec. 3025. Bight Of Election In Case Of Breach: Even if the breach is of such a type that it may operate as a discharge of the contract.1 it does not have this effect automatically, at least as long as damages are not increased by failure to treat ...

Sec. 3026. What Amounts To Election In Case Of Breach: Election to treat breach as a discharge of the contract consists in words or conduct which show unequivocally that the party who has such right of election intends to treat the contract as discharged....

Sec. 3027. Meaning Of "Rescission" For Breach: In some cases the election to treat the contract as discharged is spoken of as rescission;1 or it is said that the contract is canceled,2 or terminated.3 In other jurisdictions the term rescission s...

Sec. 3028. Duty To Elect In Case Of Breach: On the happening of a breach which may amount to a discharge, the party who is not in default must elect between treating the contract as discharged and treating the contract as still in effect, so th...

Sec. 3029. Notice Of Election To Treat Breach As Discharge: The party who elects to take advantage of breach on the part of the adversary party as a discharge of the contract is bound to give proper notice of his election to treat the contract as discharged, u...

Sec. 3030. Effect Of Election - Election To Treat Contract As Discharged: When the election is made with full knowledge of the facts, it is final;1 and the election of one of these rights operates as a waiver of the other alternative and inconsistent right.2 The election of...

Sec. 3031. Putting Party In Default By Act Of Adversary Party: The Roman law idea of mora, which was unjustified and inexcusable delay in performance of an obligation, has been carried over into the Louisiana Civil Code;1 and it is necessary to put the promisor i...

Sec. 3032. Election Of Party Not In Default Can Not Increase Damages: A breach which goes to the entire performance may relieve the party in default from further liability under the contract except to pay damages occasioned by such breach.1 This is not, however, on the ...

Sec. 3033. Election Which Increases Damages-Recovery Of Con-Tract Price Allowed In Spite Of Renunciation: The party who renounces a contract can not compel the party who is not in default to treat such renunciation as a discharge of the contract if the latter does not wish so to do.1 In case of breach of ...

Sec. 3034. Election Which Increases Damages - Contract For Sale Of Goods: In some jurisdictions one who has entered into an executory contract for the sale of personalty may continue performance in spite of the renunciation of the contract by the purchaser, and he may recov...

Sec. 3035. Election Which Increases Damages - Contract For Manufacture Of Goods: In some jurisdictions contracts for the manufacture of goods for the special needs of a customer, and not for the general market, are treated differently from executory contracts for the sale of goods...

Sec. 3036. Illustrations Of Election Which Increases Damages: If the purchaser of realty under an executory contract renounces the contract, the vendor can not recover the purchase price in an action at law, but he is restricted to his right of action for damage...

B. Waiver Of Breach As Ground Of Discharge. Sec. 3037. Waiver Of Breach As Ground Of Discharge - Nature Of Waiver: The effect of breach, both as a ground for treating the contract as discharged, and as giving rise to a right of action for damages, is modified by the doctrine of waiver, so called. As has already be...

Sec. 3038. Waiver As Election: Since election is the choice between two inconsistent rights, waiver is a necessary correlative of election, although it does not seem to be limited to cases of election. Since election exists where t...

Sec. 3039. Delay As Waiver: The party who is not in default has, ordinarily, a reasonable time in which to determine whether he will treat the breach as a discharage or not;1 and accordingly his delay in treating the contract as...

Sec. 3040. Elements Of Waiver - Inducing Action In Reliance On Waiver - Necessity And Effect: If the adversary party acts in reliance upon such waiver and alters his position so that he will be prejudiced if the party who is not in default is allowed to alter his position and to treat the cont...

Sec. 3041. Knowledge Of Breach Essential: In order that the promisee may be held to waive a breach of the contract, he must know of the fact which constitutes such breach.1 The knowledge which is required is more than mere suspicion.2 The con...

Sec. 3042. Intention To Waive Breach Essential: To operate as a waiver the conduct of the party who is not in default must be such as to show affirmatively his intention to treat the contract as still in effect.1 This intention may either actually ...

Sec. 3043. Conduct Of Party Not In Default As Waiver: The conduct of the party not in default, which is in accordance with his rights under the terms thereof, does not amount to a waiver of any of the terms of such contract which are inserted for his ben...

Sec. 3044. Waiver Of Prior Breach As Waiver Of Entire Covenant: A waiver of one breach does not amount to a waiver of other and subsequent breaches.1 Where a contract is payable in instalments, waiver of a breach by delay in paying earlier instalments is not a wai...

Sec. 3045. Free Choice Of Party Not In Default Essential: If the conduct of the party who is not in default, in accepting benefits under the contract, is relied upon as waiver of breach thereof, such acceptance can not be regarded as amounting to a waiver un...

Sec. 3046. Express Approval Of Performance Tendered: Express acquiescence in performance as tendered, thereby inducing the adversary party to believe that such performance is accepted as complete performance, amounts to a waiver.1 If the owner of a buil...

Sec. 3047. Acceptance Of Defective Performance As Waiver-General Principles: If the promisee with full knowledge of the facts voluntarily accepts less than full performance of the contract, the promisee thereby waives such breach of contract as a ground of discharge.1 The effe...

Sec. 3048. Acceptance Of Defective Performance Of Contracts For Work And Labor, Or Construction Contracts: If an agent or employe has been guilty of conduct for which he could be discharged, the act of the employer in continuing to accept his services, with knowledge of the facts, operates as a waiver of s...

Sec. 3049. Acceptance Of Defective Performance Of Contract For Sale Of Realty: The right to avoid a contract for the sale of realty,1 as for the vendor's failure to furnish an abstract of title,2 or because of a defect in the title,3 or because a building on the property extends...

Sec. 3050. Acceptance Of Property Delivered As Performance - Intended As Waiver: If the promisee, with the knowledge of the breach, voluntarily retains property delivered to him in performance of the contract, which property it is possible for him to return to the promisor, such r...

Sec. 3051. Acceptance Of Property Not Intended As Waiver: Acceptance, in this sense, includes the physical act of taking possession of the goods and also the intention of retaining them.1 Since intention to waive breach is an essential element of waiver, the...

Sec. 3052. Waiver Of Provisions As To Time Of Performance - General Principles: If the promisor has made default in performance with respect to the time thereof, and the promisee subsequently permits him or induces him to continue performance,1 or accepts performance thereafter,2...

Sec. 3053. Waiver Of Provisions As To Time Of Performance - Specific Illustrations: Permitting a contractor to complete a building contract, or a construction contract, after the time fixed by such contract for performance, waives the right to treat such default as discharge.1 If one...

Sec. 3055. When Performance Is Due After Waiver Of Provisions As To Time: A waiver of a provision fixing the time for performance does not confer upon the adversary party the right to fix the time for performance at his election.1 Under a subsequent agreement to extend the ...

Sec. 3056. Waiver Of Provisions As To Payment: Acceptance of methods of payment other than those provided for by the contract waives the covenants of such contract with regard to such payment.1 An agreement to accept a draft unconditionally is wai...

Sec. 3057. Arbitrary Refusal, Or Assignment Of Ground As Waiver Of Breach Caused Thereby: If one of the parties to a contract has refused to perform under any circumstances, or if he has refused to perform and he has alleged a specific ground as the reason for such refusal, the question is...

Sec. 3058. Arbitrary Refusal, Or Assignment Of Ground, Held Not To Be Waiver Of Breach Not Caused Thereby: Whether the fact that the party who refuses performance assigns a specific ground as a reason therefor, should prevent him from relying upon some other ground where the other ground on which he seeks ...

Sec. 3059. Arbitrary Refusal, Or Assignment Of Ground, Held To Bo Waiver Of Breach Not Caused Thereby: In other jurisdictions, however, language is used which seems to indicate that the courts held that the fact that the party who refuses to perform bases his refusal upon some specific ground, such as ...

Sec. 3060. Effect Of Election To Treat As In Force: Election on the part of the party who is not in default, to treat the contract as in effect, operates as a waiver of his right to treat it as discharged for the same breach.1 A party who has elected t...

Sec. 3061. Waiver As To Third Persons: Waiver by one of the parties to the contract is conclusive as to third parties, at least as to those who claim under the party who has waived his right to take advantage of breach.1 A contract by a st...

C. Waiver of Breach As Right Of Action For Damages. Sec. 3062. Waiver Of Damages By New Contract: While the general principles of waiver, so-called, apply to waiver of breach as the basis of a right of action to recover damages, as well as to waiver of breach as a ground for treating the contract ...

Sec. 3063. Waiver Of Damages By Acceptance Of Performance Different In Kind: If one of the parties to a contract tenders performance which is substantially different in kind, and not merely in degree, from the performance which is required by the contract, and the adversary pa...

Sec. 3064. Waiver Of Damages By Estoppel: If the party who is not in default has led the other party to believe that he will not insist upon performance in strict compliance with the terms of the contract,1 or if he has requested performance ...

Sec. 3065. Knowledge Of Breach Necessary: Whether the discharge of a right of action for damages is explained on the theory of a new contract, or on the theory of estoppel, or whether it is explained as a waiver without reference to the reaso...

Sec. 3066. Acceptance Of Performance Defective In Quality Held Not To Waive Damages: If the thing which is tendered in performance is not of a substantially different character from that which is prescribed by the terms of the contract, but there is a substantial deficiency in quantit...

Acceptance Of Performance Defective In Quality Held Not To Waive Damages. Continued: After one of the parties has broken the contract, the subsequent acts of the party who is not in default should not affect his right of action to recover damages, unless such subsequent transaction is...

Sec. 3067. Acceptance Of Performance Defective In Quantity Held Not To Waive Damages: If the defect in performance is a defect in the quantity of the performance, the acceptance of such performance by the party who is not in default is not a waiver of his right to recover damages for s...

Sec. 3068. Acceptance Under Practical Compulsion: The justice of the rule that acceptance after breach, even though a waiver of the right to treat such breach as discharge,1 is not a waiver of a right of action for damages, is especially clear in cas...

Sec. 3069. Waiver Of Damages Treated As Question Of Fact: In a number of cases in which the party who is not in default has elected to continue performance, the courts have said that such conduct on his part was not, as a matter of law, a waiver of his right...

Sec. 3070. Theory That Gratuitous Waiver Of Breach As Discharge Is Waiver Of Damages: In a number of jurisdictions, the courts have held that if the party who is not in default has intended to renounce his right of action for damages, and if he has made such intention clear, either by ...

Theory That Gratuitous Waiver Of Breach As Discharge Is Waiver Of Damages. Continued: 4 Smith v. Wall, 12 Colo. 363, 21 Pac. 42; United Iron Works . Rathskeller Co., 94 Wash. 67, L. R. A. 1017C, 445, 161 Pac. 1197. 5 Smith v. Wall, 12 Colo. 363, 21 Pac. 42. 1 England. Chanter ...

Sec. 3071. Gratuitous Waiver Of Right Of Action: The question of the effect of a renunciation of damages which have arisen out of a breach of a contract, without release under seal, or an accord and satisfaction, or other valuable consideration, and...

Chapter LXXXV. Alteration: I. NATURE Sec. 3072. Nature of alteration. Sec. 3073. Alteration distinguished from modification before execution - As to parties assenting thereto Sec. 3074. As to parties who do not assent thereto...

I. Nature. Sec. 3072. Nature Of Alteration: Alteration, as the term is generally used in contract law, is a change in the language of a written instrument after the execution thereof, which is made intentionally by one of the parties thereto wi...

Sec. 3073. Alteration Distinguished From Modification Before Execution-As To Parties Assenting Thereto: A written instrument has no legal effect until execution, and therefore, until it is executed, its language may be changed at the pleasure of the party drafting it, subject, of course, to the qualific...

Sec. 3074. As To Parties Who Do Not Assent Thereto: Alteration before final delivery is not binding on parties to the altered instrument who did not consent to such alteration, if the alteration affects their rights in any substantial way.1 If the date...

Sec. 3075. Alteration Distinguished From Modification After Execution By Mutual Consent - As To Parties Assenting Thereto: A change in the language of a written instrument after execution with the assent of all the parties thereto, operates as a discharge of the original contract and the substitution of a new contract the...

Sec. 3076. As To Non-Assenting Parties: The rule that a modification in the contract or instrument which is made with the assent of the parties thereto, does not operate as an alteration, is limited to the parties who actually assent. If a ...

Sec. 3077. Alteration Distinguished From Spoliation: A Change which is made in the language of a written instrument by one who is not a party thereto and who does not act under the authority of a party thereto, is technically a spoliation,1 and not an a...

II. Parties To Alteration. Sec. 3078. Party By Whom Alteration May Be Committed - Agent: Since the distinction between alteration and spoliation turns on the relation to the contract borne by the party who makes the change in the instrument, it is in this connection all important to deter...

Sec. 3079. Depository: A change in the language of a written contract, made by one in whose custody a contract is placed, but who is not the agent of either party, is a spoliation.1 If a public bond is placed in the custody...

Sec. 3080. Who Can Take Advantage Of Alteration As Discharge: Only the party who is apparently liable on the contract, as altered, can complain of the alteration.1 The party who makes the alteration can not treat the contract as discharged if the adversary party...

III. Method Of Making Alteration. Sec. 3081. Method Of Making Alteration - Cancellation And Erasure: While the manner in which a written instrument is altered may be of practical importance as indicating the intention of the party who made the alteration, or as giving notice to the subsequent holders...

Sec. 3082. Filling Blank As Alteration: In the absence of statute, the rule has always been that one who executed an instrument, leaving blanks therein to be filled in later, and who delivered it to one who was to deliver it in turn to the ...

Sec. 3083. Filling Blanks - Effect Of Negotiable Instruments Law: This rule has been modified in some respects as to negotiable instruments by the Negotiable Instruments Law, which provides: Where the instrument is wanting in any material particular, the person in ...

Sec. 3084. What Constitutes A Blank - Negligence Of Promisor: The term blank, as used with reference to the effect of filling in blanks, is used in two senses, which need not be distinguished in some jurisdictions, since the legal effect is the same in each ca...

Sec. 3085. Change In Memoranda On Instrument: A Question sometimes presented for adjudication is whether an alteration of a memorandum in writing on the same piece of paper as the written contract, but not in the body thereof, is a material alter...

Sec. 3086. Addition Of Memoranda: A memorandum made upon the same piece of paper as a written contract, but not, in legal effect, a part thereof, is not a material alteration,1 such as a pencil memorandum which on its face does not pu...

Sec. 3087. Detachment Of Memoranda And Mutilation Of Instrument: The alteration of a written instrument by detaching memoranda which form a material part of the original contract, or by mutilating the instrument so as to remove material provisions, is a material al...

Sec. 3088. Retracing Words Of Original Instrument: The act of the holder of an instrument in retracing words therein which have become defaced or illegible, does not amount to an alteration,1 since such retracing is not done with the intention to alte...

IV Intent To Make Alteration. Sec. 3089. Correction Of Mistake -Theory That Correction Is Not Alteration: To constitute alteration the contract must be so changed physically as to express an intention different from the real agreement of the parties.1 The effect of alteration of a contract containing mis...

Sec. 3090. Defective Attempt To Correct Mistake: This principle has been extended to cases where the party sought in good faith to modify the instrument so as to conform to the intention of the parties, but for some reason failed in his alteration t...

Sec. 3091. Theory That Correction Of Mistake Is Alteration: In some jurisdictions, however, it is held that a mistake in expression can not be corrected by the action of one party alone, and that such a correction is an alteration, avoiding the contract if oth...

Sec. 3092. Unintentional Change Not Alteration: To constitute an alteration the change in the language of the written instrument must have been made intentionally. If not intentional, it is not an alteration.1 Placing internal revenue stamps on the...

V. Materiality of Alterations. Sec. 3093. Classes Of Alterations - Material Alterations: Alterations are to be classified upon two different bases: they may as to their effect upon the instrument be material or immaterial; and as to the purpose with which they are made they may be fraudul...

Sec. 3094. What Constitute Material Alterations - Change In Parties: A change in the parties to the instrument is generally a material alteration.1 A change in the name of the promisor is a material alteration.2 Thus adding & Co. to the maker's signature is a materia...

Sec. 3095. Addition Of New Party: The addition of the name of a joint promisor or maker is generally held to be such a material alteration as to discharge the parties who have not assented thereto.1 While it is not necessary to prove ...

Sec. 3096. Addition Of Surety As Affecting Primary Debtor: Whether the addition of a surety or co-obligor without the consent of the principal avoids the contract as to him is a question upon which the courts have divided. The weight of authority is that such...

Sec. 3097. Addition Or Mutilation Of Seal: The fundamental classification of contracts at common law was into formal contracts, which included the contracts under seal and simple contracts. The addition or the mutilation of a seal has always b...

Sec. 3098. Change In Attesting Witnesses: Adding the names of attesting witnesses, where such addition may in any way change the legal effect of the instrument,1 as where execution may be proved by such witness or by proof of his signature if...

Sec. 3099. Change In Date: Changes in the date of the instrument,1 either antedating2 or postdating3 it; or a change in the period of maturity, making maturity come earlier4 or later5 than that fixed by the original contract; c...

Sec. 3100. Change In Subject-Matter: A change in the amount of the instrument,1 either increasing the amount of the note,2 or decreasing it,3 changing a recital in a note that it was given for the purchase price of buildings on lot one...

Sec. 3101. Change In Rate Of Interest: A change in the rate of interest,1 increasing2 or diminishing3 the rate; or inserting the rate or interest which had been left blank, if the rate inserted is different from the legal rate;4 or adding ...

Sec. 3102. Change In Negotiability: Any modification of the terms of a written instrument which affects its negotiability, amounts to a material alteration.1 The most common form of alteration of this sort is the alteration which change...

Sec. 3103. Change In Place Of Performance: A change as to the place of performance,1 such as the addition of a specific place of performance to an instrument which had contained no such provision,2 or such as making a note payable at a certain...

Sec. 3104. Other Changes In Written Contracts: Other changes in written contracts which modify the legal effect thereof may he material alterations. Thus a waiver of exemptions written over a blank indorsement,1 adding protest waived to an indor...

Sec. 3105. Immaterial Alterations - Body Of Instrument And Memoranda: An immaterial alteration is one which does not change the legal effect of the written instrument.1 The fact that the party who made such alteration intended to alter the legal effect of the instrument...

Sec. 3106. Alteration Of Marginal Figures: Since marginal figures are no part of a note1 an alteration in such marginal figures,2 as changing them from one thousand, five hundred dollars to one thousand dollars,3 or from six hundred dollars to...

VI. Presumptions, Inferences, Etc. Sec. 3107. Questions Of Law And Fact: The existence of alteration, if apparent on the face of the instrument, seems to have been determined by the court at one time. Subsequently such questions were left to the jury.1 At modern law, wheth...

Sec. 3108. Presumption As To Date Of Alteration: Interlineations and erasures are suspicious, and it is well to explain them, if possible. Alteration is often criminal and always wrongful, and ought not to be presumed without some evidence. What pre...

Sec. 3109. Presumption As To Whether Alteration Is Fraudulent: If the alteration is material, the question next presented is whether it is presumed to be fraudulent or not. A material alteration, made after execution, and not clearly beneficial to the obligor, is...

VII. Effect Of Alteration And Spoliation. Sec. 3110. Effect Of Material Alteration On Liability On Contract: Non-negotiable instrument. In order to prevent tampering with written instruments,1 the courts have laid down the rule that a material alteration avoids the written contract.2 1 Croswell v. Labree, 8...

Sec. 3111. Negotiable Instruments Before The Negotiable Instruments Law: In the absence of statute, a negotiable instrument which has been altered materially is unenforceable, even in the hands of a bona fide holder without notice who takes for value and before maturity.1 ...

Sec. 3112. Negotiable Instruments Under The Negotiable Instruments Law: The Negotiable Instruments Law provides: Where a negotiable instrument is materially altered without the assent of all parties liable thereon, it is avoided, except as against a party who has himself...

Sec. 3113. Bight Of Recovery Upon Original Consideration-Innocent Material Alteration: In cases of material alteration, where the written contract is discharged, the question then arises as to whether recovery can be had in quasi-contract on the original consideration for which the inst...

Sec. 3114. Fraudulent Material Alteration: If the alteration is made fraudulently no recovery can be had upon the original consideration;1 and the result of such fraudulent alteration is therefore to leave the innocent party in possession of t...

Sec. 3115. Effect Of Alteration Of Collateral Instrument: Whether the alteration of one contract affects another contract or instrument in some way connected with the former instrument is a question sometimes presented for consideration. A material alteratio...

Sec. 3116. Effect Of Immaterial Alteration On Liability On Contract: In a resolution in an early English case,1 the court said that a deed was avoided by any alteration, even of immaterial words. This rule has been recognized in some early cases in the United States,2 ...

Sec. 3117. Ratification Of Alteration: The party who did not make the alteration may, if he choose, ratify it.1 This principle has been applied to negotiable instruments such as promissory notes2 and to leases.3 If the party against whom l...

Sec. 3118. Effect Of Subsequent Restoration Of Contract To Original Form: Assuming the correctness of the rule that a material alteration operates as a discharge of the contract, it should follow that if a material alteration has once been made and if the written contract h...

Sec. 3119. Effect Of Spoliation - Theory That Spoliation Operates As Discharge: The effect of spoliation was first presented to the English courts in cases involving contracts under seal which were enforceable because of their outward form.1 The theory that it was the outward for...

Sec. 3120. Effect Of Spoliation - Theory That Spoliation Is Without Legal Effect: The English courts seem to have receded from their original rule1 so far that spoliation of a sealed instrument by one who is not a party thereto is regarded as having no legal effect,2 at least if th...

VIII. Modification of Contract As Affecting Non-Assenting Parties. Sec. 3121. Modification Of Contract Discharging Surety - General Principles: The effect of a material modification of a contract agreed upon between the two adversary principals thereto without the consent of the sureties of one of such principles, is in some respects analogou...

Sec. 3122. Effect Of Discharge Of Surety On Liability Of Remaining Sureties: Whether the discharge of a surety operates as a discharge of the remaining sureties who have not assented thereto, is a question upon which there has been a divergence between law and equity, and in ...

Sec. 3123. Extension Of Time As Discharge Of Surety Under Negotiable Instruments Law: In jurisdictions in which the Negotiable Instruments Law is in force, the construction which the courts have placed upon the statute has revolutionized the effect of an extension of time upon the liab...

Chapter LXXXVI. Bankruptcy: Sec. 3124. Nature of bankruptcy. Sec. 3126. English bankrupt acte. Sec. 3126. Federal bankrupt acts. Sec. 3127. State bankrupt acta - Validity and general effect. Sec. 3128. Effect of state bankru...

Sec. 3124. Nature Of Bankruptcy: Blackstone defines bankruptcy as the act of becoming a bankrupt; and he defines a bankrupt as a trader who secretes himself or does certain other acts tending to defraud his creditors.1 Bankruptcy ...

Sec. 3125. English Bankrupt Acts: Neither common law nor equity, as such, had bankruptcy jurisdiction, and neither of them had any general principles of bankrupt law. The contest for jurisdiction among the king's courts and the determ...

Sec. 3126. Federal Bankrupt Acts: The Constitution of the United States1 gives to Congress the power to establish uniform laws on the subject of bankruptcies throughout the United States. Under this grant of power Congress has enact...

Sec. 3127. State Bankrupt Acts - Validity And General Effect: Various state bankrupt laws have been enacted which provide for granting discharges to debtors who comply with the provisions thereof.1 A state of the union has power to enact laws of this sort;2 and ...

Sec. 3128. Effect Of State Bankrupt Acts As Against Non-Resident Creditors: The discharges granted by a state bankrupt court can have no extraterritorial effect.1 Hence a creditor domiciled outside of the state which grants such discharge, who does not participate in the proc...

Sec. 3129. Effect As Against Prior Obligations: An additional disadvantage of state insolvent laws is found in the fact that discharges under state bankrupt acts can not affect debts which were contracted before the passage of the state act,1 even ...

Sec. 3130. Effect Of Passage Of Federal Bankrupt Act: State bankrupt and insolvent laws are suspended by the passage of a federal bankrupt act,1 as far as the federal bankrupt law covers the same ground as the state laws. Proceedings under a state law ar...

Sec. 3131. Statutory Provisions Concerning Discharge: The effect of a discharge in bankruptcy upon pre-existing contract liabilities depends, of course, upon the provisions which the legislature has seen fit to enact. The bankrupt law of 1898 provides i...

Sec. 3132. Provable Debts - Nature: Under the provisions of the bankrupt act, with reference to discharge,1 the debt in question, to be affected by a discharge in bankruptcy, must be: (1) a debt provable in bankruptcy; and (2) not withi...

Sec. 3133. What Are Provable Debts - Claims Arising On Contract: The term provable debts includes all liabilities which arise on contract if the amount thereof is fixed at the time of the proceedings in bankruptcy, or if the amount thereof can be liquidated.1 The...

Sec. 3134. Claims Arising On Quasi - Contract: The term contract express or implied, in section 63 of the present Federal Bankruptcy Act,1 has been held to include not only genuine contracts, but also obligations of a quasi-contractual characte...

Sec. 3135. Judgments: A judgment which has been rendered before proceedings in bankruptcy are begun, is a fixed liability as evidenced by a judgment * * * absolutely owing at the time of the filing of the petition; and a...

Sec. 3136. Claims In Nature Of Tort Not Reduced To Judgment: A claim in tort or in the nature of tort, which has not been reduced to judgment and is not liquidated is not a fixed liability nor does it arise on contract; and therefore it is not a provable debt a...

Sec. 3137. When Debt Must Exist: To constitute a provable debt, the debt in question must have been in existence when the proceedings in bankruptcy were instituted. A debt which comes into existence after a petition in bankruptcy is ...

Sec. 313s. Liability For Contribution And Exoneration: If a bankrupt receives a discharge, this is not, as will be seen,1 a bar which can be invoked by those who are liable with him, whether primarily or secondarily. If such persons are compelled to pay s...

Sec. 3139. Continuing Contracts: If a contract has been entered into between the parties, but no liability of any sort has accrued under it up to the time of the institution of the proceedings in bankruptcy, such contract is not a fi...

Sec. 3140. Contingent Liabilities: While it is often said that a provable debt can not be contingent or uncertain,1 and that it must be fixed,2 the question whether a contingent liability is barred by a discharge in bankruptcy really d...

Sec. 3141. Liability To Support Wife And Children: The liability of one for the support of his wife and children is not a debt and is certainly not a provable debt.1 Accordingly, the weight of authority, including the supreme court of the United State...

Sec. 3142. Statutory Exceptions To Effect Of Discharge - Provable Character Of Claim: Certain claims of provable debts are specifically excepted by the bankrupt act from the operation of a discharge in bankruptcy. The fact that such an exception to the operation of the discharge is spe...

Sec. 3143. Judgments For Wilful And Malicious Injuries To Person Or Property - Nature Of Malice: The bankrupt act of 1898 excepts from the operation of the discharge judgments in actions for wilful and malicious injury to the person or property of another.1 The term wilful in the statute means ...

Sec. 3144. Wilful And Malicious Injury To Person: Within the meaning of this section, a judgment for death by wrongful act, which was caused by operating an automobile at a high rate of speed and attempting to pass another automobile in violation of ...

Sec. 3145. Wilful And Malicious Injury To Property: A judgment for wilful and malicious injury to property is not barred by a discharge in bankruptcy under the provisions of this section.1 An intentional conversion of property may amount to a wilful an...

Sec. 3146. Judgments For Fraud: The bankrupt act of 1898 excepts from the operation of the discharge judgments in actions for fraud or obtaining property by false pretenses or false representations.1 The practical difficulty which a...

Sec. 3147. Debt Created By Fraud Not In Fiduciary Capacity: The act of 1898 made provision in section 17, clause 2, excepting judgments in action for fraud from the operation of a discharge; and in clause 4, excepting debts which were created by the bankrupt...

Sec. 3148. General Nature Of Fraud: The nature of fraud whether the basis of a judgment, as under the act of 1898, or whether a claim not in judgment, as under other bankrupt acts, must next be considered. The term fraud means positiv...

Sec. 3149. Liability For Obtaining Property By False Pretenses Or False Representations: Since the amendment of 1903 omits the general term fraud and covers liabilities for obtaining property by false pretenses or false representations, obtaining services by false pretenses or represe...

Sec. 3150. Proof Of Claim For Fraud: The fact that the fraud is not of such a nature that it will prevent the granting of a discharge to the bankrupt, does not show the absence of fraud conclusively; and it is possible that the discharge...

Sec. 3151. Debts Created In Fiduciary Capacity - Technical Trust Relations: The bankrupt act of 1898 excepts from the operation of the discharge provable debts created by the fraud, embezzlement, misappropriation or defalcation of the debtor while acting as an officer or in a...

Sec. 3152. Debts Created In Fiduciary Capacity - Non-Technical Trust Relations: This clause of the bankrupt act does not include implied trusts, nor does it include cases involving an actual breach of trust and confidence between persons who are not in technical fiduciary relatio...

Sec. 3153. Debts Omitted From Schedule: The earlier federal bankrupt laws contained no provision concerning the omission of debts from the schedule. It was accordingly held that, under the clause of the statute providing that the discharge ...

Sec. 3154. Defective Description As Omission: The fact that the schedule of debts uses the initial of the creditor, instead of his Christian name,1 or that it refers to the debt as an open account, instead of referring to it as a judgment in whic...

Sec. 3155. Debts Due To United States And State: Under the bankrupt act of 1867, a discharge barred all debts, with certain exceptions. It was held that this statute did not include debts due to the United States, even if such debts were not expre...

Sec. 3156. General Effect Of Discharge: By the express provisions of section 17 of the bankrupt act of 1898,1 a discharge in bankruptcy releases a bankrupt from all of his provable debts except those which are specifically excepted by statu...

Sec. 3157. Domestic And Foreign Discharges: A discharge given under the act of 1898 is valid throughout the United States.1 A discharge in bankruptcy which is granted by a court of the United States, is a bar in an action brought in a court of ...

Sec. 3158. Discharge As Affecting Liens: Discharge in bankruptcy is generally said to be merely a bar to an action upon the debts of the bankrupt affected thereby, in which it is sought to enforce a personal liability. It does not amount to ...

Sec. 3159. Effect On Liability Of Co-Debtor: The bankrupt act of 1898 provides: The liability of a person who is co-debtor with, or guarantor or in any manner a surety for a bankrupt shall not be altered by the discharge of such bankrupt.1 Thi...

Sec. 3160. Surety On Bond Conditioned On Judgment Against Principal: If, however, the surety is held on a bond whereby he is liable only in case judgment is rendered against his principal, strong reasons exist for holding that the surety is not liable if the principal ...

Sec. 3161. Partnership And Individual Debts: A bankrupt may be discharged from his liability to the creditors of a partnership of which he is a member by a discharge given in bankruptcy proceedings affecting himself alone if due notice is given ...

Sec. 3162. Who Can Take Advantage Of Discharge In Bankruptcy: A discharge in bankruptcy merely gives to the debtor an affirmative defense which he may waive, or of which he may avail himself at his election. The bankrupt himself may, of course, use his discharge...

Sec. 3163. Other Forms Of Secondary Liability: Discharge of a corporation in bankruptcy does not release the directors from liability for corporate debts,1 nor does it relieve stockholders from such liability.2 ...

Sec. 3164. Necessity And Method Of Pleading Discharge: If the bankrupt elects to avail himself of his discharge as a defense, he must plead his discharge in the action against him on the claim to which he seeks to interpose his discharge as a defense.1 If...

Sec. 3165. Burden Of Proof: The bankrupt act provides: A certified copy of an order * * granting or setting aside a discharge, not revoked, shall be evidence of the jurisdiction of the court, the regularity of the proce...

Sec. 3166. New Promise As Waiving Discharge: While it is occasionally said that a discharge in bankruptcy discharges the debt,1 this statement is made to explain the rule that a debt which is barred by a discharge in bankruptcy is not revived by...

Sec. 3167. Elements Of New Promise: An unaccepted offer is not such a new promise as will render the former debt enforceable.1 A promise by the debtor to the creditor to pay a debt barred by bankruptcy if he were given time is unenforce...

Sec. 3168. Nature Of Liability Created By New Promise: Whether the new promise creates a new liability supported by the original liability as a consideration, or whether the new promise merely waives the bar of the discharge and leaves the original liabil...

Sec. 3169. Part Payment: Since a new promise to pay a debt barred by bankruptcy must, to be enforceable against the debtor, be clear and unequivocal, a part payment of a debt is not of itself sufficient to waive the bar of ba...

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