80/ Cornell University Law Library THE GIFT OF .^r^^r:^V--...£.7^....^<'rn:^^^ Date.^':^../..^,./.?..^.. KF 801.W725'"'""'™''''"'"-"'"'^ Pr'nclples of the law of contracts / 3 1924 018 822 688 Cornell University Library The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31 92401 8822688 PRINCIPLES OF THE LAW OF CONTRACTS BY HUGH EVANDER WILLIS ST. PAUL THE KEEFE-DAVIDSON CO. 1909 Q 33 //A Copyright, 1909, BY HUGH EVANDER WILLIS I i 14 i li ^ '• • 1935 / To My Father and Mother PREFACE In this book the author has undertaken first, to codify the law of Contracts by reducing it to propo- sitions or rules of law—and, second, to make these rules of workable value to the student, teacher and practitioner, by means of an analysis thereof, an ex- planation of the reasons therefor, a statement of the exceptions thereto, and an illustration of the applica- tions arising therefrom. Throughout the book, he thinks, credit has been given to whom credit is due. For the most part, the illustrations used are the cases which have been selected by Professor Williston, and various other men, for use in Arherican law schools, and a table of cases gives ready reference to them. The principles of Quasi Contracts are so inter- woven with those of Contracts proper that any work on Contracts must treat of them, but in this book, so far as possible, they have been given independent treat- ment in a separate chapter. HUGH E. WILLIS. University of Minnesota . TABLE OF CONTENTS Page Preface v Analysis ix Chapter I. Leg-al Rights i II. Quasi Contracts 8 III. Agreement 40 IV. Reality of Agreement 5g V. Parties 80 VI. Consideration 104 VII. Legality of Object 121 VIII Formalities 143 IX. Classification 165 X. Interpretation 178 XI. Breach and Remedies 186 ". XII. Discharge . 200 Table of Cases 227 Index 237 ANALYSIS I. Legal rights in rem, § 2 A. Arising without contract, § 2 B. Arising from contract, § 2 11. Legal rights in personam, § § 3-234 A. Arising quasi ex contractu, § § 4, 8-45 (I) Obligations equitable, § S 8-37 (II) Obligations statutory, § 39 40-44 (III) Obligations customary, § § (rv) Obligations of record, § 45 B. Arising ex contractu, § § 5-7, 46-234 (I) Ancient essentials, § § 46-49 (A) In debt, § 47 (B) In covenant, § 48 (C) In assumpsit, § 49 (II) Modern essentials, § § 50-175 (A) Agreement, § § 50-68 1 OfEer, § 51-60 2 Acceptance, § § 61-68 (B) Terms definite and certain, § 69 (C) Intention to create legal relations, § 70 (D) Reality of assent, § § 71-99 1 Mistake, § § 72-77 2 Misrepresentation, § § 78-81 3 Fraud, § § 82-90 4 Duress, § § 91-94 5 Undue influence, § § 95-99 (E) Parties, § § 100-134 1 Certainty, § 101 2 Competency, § § 102-120 a. Sovereign states, § 102 b. Corporations, § 103 c. Infants, § § 104-111 d. Persons non compos mentis, § § 112-111 e. Married women, § 118 f. Aliens, § 119 g. Others, § 120 3 Privity, § § 120-130 ANALYSIS. a. Agency, § § 122-126 b. Assignment, § § 127-130 4 Number, § § 131-134 a. Joint, § 132 b. Several, § 133 c. Joint and several, § 134 (F) Consideration, § § 135-137 1 Unilateral agreements, § 136 a. Legal right given by one, § 136 b. Promise by another to give legal right, §136 2 Bilateral agreements, § 137 a. Promise of legal right by one, § 137 b. Promise of legal right by other, § § 137, 229 (C) Legality of object, § § 138-154 1 Prohibited by law, § § 138-145 a. Crimes, § 139 b. Torts, § 140 c. Professions and business unlicensed, §141 d. Work and labor on Sunday, § 142 e. Wagers, § 143 f. Lotteries, § 144 g. Usury, § 145 2 Contrary to the policy of the law, § § 138, 146-154 a. Dealings affecting the state, § § 146-147 (1) External relations, § 146 (2) Internal relations, § § 147-148 b. Dealings affecting society as a whole, § § 149-154 (1) Morals, § § 149-150 (2) Commerce, § § 151-153 (3) Public health and safety, § 154 (H) Formalities, § § 155-175 1 Formal agreements, § § 155-174 a. Requirement of seal, § § 156-159 b. Requirement of writing, § § 160-174 (1) Commercial paper, § 161 (2) Statute of frauds, § § 162-173 (3) Miscellaneous, § 174 2 Formless agreements, § 175 (III) Classification, § § 176-190 (A) As to form, § § 176-178 (B) As to performance, § 179 ANALYSIS xii (C) As to validity, § 180 (D) As to subject-matter, § § 181-190 1 Principal, § § 182-ltiy ' a. Affecting property rights, § § l83-iS7 b. Affecting personal rights, § § 188-189 2 Accessory, 5 190 (IV) Interpretation, § § 191-204 (A) Rules of evidence, § § 191-194 (B) Rules of construction, § § 195-204 (V) Breach, § § 205-208 (A) Repudiation, prevention, or failure to perform, § § 205-208 1 Before performance is due, § § 205-208 2 After part performance, § § 205-208 3 By promisor, § § 205-208 4 By promisee, § § 205-208 5 Independent promises, § 208 a. Absolute, § 208 b. Divisible, § 208 c. Subsidiary, § 208 6 Dependent promises, § 208 a. Promissory conditions precedent, § 208 b. Promissory conditions concurrent, § 208 (VI) Remedies, § § 209-216 (A) Ancient, § 209 (B) Modern, § § 210-216 1 Extra judicial, § 210 2 Judicial, § § 211-216 a. Reformation, § 211 b. Rescission, § 212 c. Injunction, § 213 d. Specific performance, § 214 e. Damages, § § 215-216 (VII) Discharge, § § 217-234 (A) Of antecedent rights of contracts, § § 217-226 1 By operation of original contract, § 218 2 By performance, § § 219-221 3 By nev? contract, § § 222-223 4 By cancellation and surrender, § 224 5 By alteration, § 225 6 By breach, § 226 (B) Of remedial rights for breaches of contracrs § § 227-234 1 By act of parties, § § ^28-230 a. Release, § 228 ANALYSIS. b. Accord and satisfaction, § 229 c. Arbitration and award, § 230 By act of law, § § J31-234 a. Judgment, § 231 b. Bankruptcy, § 232 c. Stautute of Umitat)ons. § 233 d. Change in law, § 234 LAW OF CONTRACTS CHAPTER I. LEGAL RIGHTS. I. Legal rishts in rem, § 2 A. Arising without contract, § 2 B. Arising from contract, § 2 II. Legal rights in personam, § § 3-7 A. Arising quasi ex contractu, § 4 B. Arising ex contractu, § § 5-7 Agreement, § 6 Obligation, § 7 § 1. A legal right is the conduct which one person is en- titled, by state political authority, to require from another, or others. Human law embraces the rules of conduct obtaining among classes of human beings and enforced by human dis- pleasure, but positive law includes only those rules of human conduct enforced by state political authority. The first rights of man were those rules of conduct which were en- forced by might. Later the power of public opinion en- forced certain rights. But rights could be called legal only when the power of the state was obtained to enforce them. The right of a person to another's conduct is an antecedent right; his right to the power of the state to enforce it, a remedial right. The first arises prior and independently of any violation thereof; the second at the time of the violation of the antecedent right. The antecedent right is a legal Will. Cont.—1. ; 2 LEGAL RIGHTS. § 2 right when accompanied and re-enforced by a remedial right. So far as the law defines antecedent rights and provides remedial rights for their enforcement, it is called substantive law; so far as it specifies the ways in which it will enforce remedial rights, adjective law, or procedure. The subject- matter, that is, the subject or matter presented for consid- eration by positive law, then, is legal rights; and, as con- tracts is a branch of positive law, it follows that the subject- matter of contracts is legal rights. Therefore, a study of the law of contracts should start with this fundamental con- ception.' § 2. Legal rights may require forbearance by all the world, in which case they are known as legal rights in rem. Rights in rem are created either by executed con- tracts or without any contract. As to the persons bound to refrain, they are legal duties. Rights in rem are such as require others to forbear from doing some act. They exist in the abstract. They are negative in character and are antecedent to any wrong. Of such rights are life, liberty, family and property. Histor- ically, these are the most primitive rights of men. They may be either public or private. Public rights are those which the state asserts to itself, and violations thereof are crimes, punishable by actions in the name of the state. Private rights are those which by contract or without con- tract reside in natural or artificial persons in their private capacity. Violations of private rights in rem result in torts which are redressed by civil actions ex delicto ; for, though these rights may be created by executed contracts, as an executed contract is one all of whose terms have been com- pletely performed, as soon as the contract is executed, it has spent its force and is no longer enforcible at law as a contract.' ' Pollock on Contracts, 1 ; 2 ^ Holland on Jurisprudence, 173 Kent's Com. 1; Holland on Juris- Anson, Law and Custom of the prudence, 56; Clark, Austin's Ju- Constitution, 2. rlsprudence, 134; Holland on Juris, prudence, 34. § 3 LEGAL RIGHTS IN REM. 3 ILLUSTRATIONS. (1) A finds a roll of bank bills, which has been lost, and A does not linow and has uo means of finding out to whom it belongs. B takes the roll of bills away from A, and appropriates it to his own use. A may sue B in conversion (tort action) and recover the value of the roll, as A has acquired, by occupancy, a right of possession in the goods against all the world, except the true owner.' (2) In the above illustration, the state may also indict B (but not A) for larceny (criminal action) and punish him by fine or imprisonment, as it has a right against all its citizens not to have any of them commit the crime.* (3) A gives B a horse and B takes it into his possession.