113. A, the grantee of a deed of trust, assigns it to B. B gets only an equitable interest which is not enforcible at common law.

114. A assigns to B a right of action against C for damages to A caused by the negligence of C's agents in performing a contract between A and C. B cannot enforce the right of action at common law. This common-law rule is applicable not only to a right to receive or recover a debt, or money, or damages for breach of contract, but also to a right to damages resulting from a tort growing out of a contract.

115. A offers B $150 for his horse. B accepts the offer. A assigns his right to the horse, upon tender of the purchase price, to C; and B assigns his right to the purchase price to D. Upon tender of the $150 to D, C is entitled to the horse.

116. A, an artist, contracts to paint B's portrait. A assigns the contract to C, an artist whose ability is equal to that of A; B is not bound by this assignment.

117. A contracts with B to deliver to him 300 bushels of corn in exchange for his horse. B fraudulently represents the horse sound. A assigns the contract to C, to whom B delivers the horse. C, however, claims an offset in damages owing to B's fraudulent representation. C is entitled to have his claim allowed. The assignee stands in the shoes of the assignor. Rights of the assignor growing out of the contract accrue to the assignee. And, on the other hand, the assignee takes subject to all defenses which might have prevailed against the assignor.

125. Modes of discharging a contract.-There are five modes of discharging a contract: (1) Agreement; (2) Performance; (3) Breach; (4) Impossibility of performance, and (5) Operation of Law.

126. Discharge by agreement. The parties to a contract may discharge it by mutual agreement. This agreement may be contained in the contract itself, or be entered into by the parties after the contract is made.

In the former case it provides for the discharge of the contract upon the happening of one or more conditions subsequent. Insurance policies, for example, usually provide for a discharge where the risk is subsequently increased.

Where the agreement is entered into after the contract is made it may consist simply in a rescission, or a waiver of the original contract, or in the substitution of a new contract for the old one. If one of the parties has performed his part, a promise by him to discharge the other party from his obligation must be supported by a valuable consideration, unless the promise is under seal. In those cases where the original contract is under seal the agreement to rescind it must be under seal. By the weight of authority in this country, however, a parol contract to rescind will be upheld, provided it has been acted upon to such an extent that it would be inequitable to enforce the original contract.

127. Substituted agreements: novation. Where a new party is introduced in the substituted agreement to take the place of one of the original parties the substituted agreement is called a novation. The creation of new rights and liabilities and the extinction of the old ones form the consideration of each party for the new contract.

Where the statute of frauds requires that the original contract be in writing the substituted agreement must be in writing, although there are decisions, however, which hold the contrary. Ordinarily, a simple contract can be rescinded by an oral agreement.

A contract may contain within itself a provision for its discharge. This provision may consist of the fail

1 Noble v. Ward, L. R. 2 Exch. 135.

2 Cummings v. Arnold, 3 Metc. (Mass.) 486, 37 Am. Dec. 155.

ure to perform a condition precedent, of the happening of a condition subsequent, or of an option given to one or both of the parties.

EXAMPLES

118. A offers to sell his horse to B for $200 and B accepts the offer. Subsequently they mutually agree to release each other. The original contract is discharged. A's promise to release B is the consideration for B's promise to release A, and vice versa.

119. A agrees to mow B's lawn for which B agrees to pay A $1. After the services are performed A informs B that he need not pay him anything. B is not released from his obligation. A's offer to release him is not supported by a valuable

consideration.

120. A agrees to build a house for B for which B agrees to pay him $4,000. The agreement contains a provision that the house is to be completed within six months and that in case of default A is to pay B $100 a month for overtime. Subsequently A and B agree on material modifications of the plans in consequence of which the house is not complete within the time originally agreed upon. A is not liable for the delay. The subsequent agreement releases him.

121. A agrees to work for B for one year at $50 per month. The contract provides that either party may terminate it by giving the other party one month's notice. This provision is Ivalid and enforcible.

122. A and B enter into a contract under seal by the terms of which A rents to B a certain house for a definite term at a stated rental. Subsequently A dies; and his administrator, C, orally agrees with B, that, in consideration of $100 to be paid by B to C, forthwith, B's obligation to pay a stated rental as set forth in the lease is thereby discharged. The subsequent oral agreement is valid and discharges B from his obligation to pay the rental stated in the lease.

123. A purchases a case of shoes of B to be delivered in

one week. At the end of the week A requests B to postpone the delivery of the shoes for a week longer and B accedes to A's request. At the end of the second week A refuses to accept the shoes owing to the fact that the price has very materially decreased since giving the order. A is bound to accept the shoes and pay the price agreed upon. The distinction between a voluntary forbearance to deliver at the request of another and a substitution of one agreement for another has always been recognized by the courts. When one of the parties requests to have performance of his contract postponed he assumes the risk of loss accruing from fluctuations in price.

128. Discharge by performance.-One mode of discharging a contract is by performance. In the case of a bilateral contract wholly executory in character, performance by both parties is essential. Performance by one of them discharges his obligation but not the contract. But where a promise is given for an executed consideration, performance by the promisor discharges the contract.

129. Sufficiency of the performance. The sufficiency of the performance to constitute a discharge depends upon the construction of the contract. At common law a strict compliance with the terms is, as a rule, essential. But where one of the parties has performed substantially his part, and the omissions or deviations have not been willful, he may recover the contract price, less the amount of damages which the other party has sustained on account of the omissions or deviations. The courts hold, however, that the omissions or deviations "must be slight or susceptible of remedy, so that an allowance out of the contract price will give the other party substantially what he contracted for." 1

1 Elliott v. Caldwell, 43 Minn. 357, 45 N. W. R. 845.

130. Satisfaction of the other party.-Many courts hold that when a contract contains a provision that it shall be performed to the satisfaction of the other party, the interpretation of this provision depends upon the nature of the subject-matter. If this involves the personal taste or judgment of the promisor he is the sole judge. Many courts apply the same rule to general contracts containing this provision.1 However, these courts require, that the promisor act in good faith. Other decisions hold that performance is sufficient if it is satisfactory to the mind of a reasonable man.2

131. Time of performance.—When a contract states no time within which it is to be performed a reasonable period is implied. But when the time is specified, and it is of the essence of the contract, such specification is construed strictly. Performance on a later date is not binding on the other party unless he has waived the breach.

Words concerning time are construed according to their ordinary meaning. Thus, the word month is construed as a calendar month, and the word year as twelve calendar months. In computing time the law does not recognize a fraction of a day. When the day of performance falls on Sunday that day is excluded and performance is due on Monday.

132. Payment: Accord and satisfaction.-A common mode of discharging a contract is by payment of a certain sum of money to the promisee, or by the delivery to him of a negotiable instrument conferring upon him the right to receive a certain sum of money.

When payment of an obligation is made in counter

1 Adams Radiator & Boiler Works v. Schnader, 155 Pa. St. 394, 26 Atl. R. 745, 35 Am. St. Rep. 893.

2 Keeler v. Clifford, 165 Ill. 544, 46 N. E. R. 248.