cedent to his right to recover the freight (a). If no time is mentioned for the performance of a contract the presumption is that it shall be performed within a reasonable time; and if the performance has taken place after an unreasonable delay, the other party will be released from his liability on the contract (b).

But whatever be the condition precedent, or however fixed the time of performance, if either party has waived his right to the fulfilment of it, the condition is at an end, and it is understood as if it had never been inserted in the contract at all (c).

Hindrance

to fulfilment

SECTION V.

PERFORMANCE OF CONTRACTS.

When the performance of a contract has been prevented by by the party. the party with whom such contract was entered, he is precluded from enforcing the fulfilment of the same. So when one party has refused to perform, or has rendered himself incapable of performing his part of the contract, he puts it in the power of the other party either to sue for a breach of it, or to treat the contract as rescinded or abandoned (d).

Impossibility of perform

ance no excuse.

Contract to be fulfilled

in a reasonable time.

Impossibility of performance by the act of God, or by circumstances over which the party had no control, is no excuse for the non-fulfilment of a voluntary contract, and will not release the party from the obligation of the same. Thus where a contract is made to deliver grain or to load a vessel at a foreign port, the party is not relieved from his obligation by the fact that a prohibition of exports, issued by the foreign Government since the contract was made, prevents the fulfilment of the contract, inasmuch as the casualty or accident might have been provided against by the contract (e).

When no time for the performance is specified, the law implies that it shall be done within a reasonable time. But when the time is appointed, it is frequently of the very essence of the

(a) Constable v. Cloberie, Palm. 397; Bornmann v. Tooke, 1 Camp. 377.

(b) Clipsham v. Vertue, 5 Q. B. 265. (c) Alexander v. Gardener, 1 Sc. 640; Wing v. Harvey, 23 L. J. Ch.

(d) Peters v. Opie, 2 Saund. 350; Collins v. Price, 5 Bing. 132; De Bernardy v. Harding, 8 Exch. 822.

(e) Sjoerds v. Luscombe, 16 East, 201.

contract, so as to give an immediate right of action for the enforcement of the same. Although the party may perform Must be performed in a the contract in the manner most convenient to himself, the con- substantial tract must be performed in a substantial and bonâ fide manner, in accordance with the true meaning of the parties.

manner.

When one of the parties fails to perform the contract, the General damages. other may claim compensation in either general or special damages. General damages are those which are the direct result of the breach of contract, and special damages are those which result from acts done in connection with the contract, but which are not the necessary result of the breach of contract. Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be either such as may fairly and reasonably be considered as arising naturally, according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it (a).

In some cases where compensation in damages is manifestly Specific insufficient, the Court of Equity and in some cases the Common performance. Law Courts also will compel specific performance, as for example

in case of agreements for the formation of a partnership (b), or for the sale of the goodwill of a trade (c), and of contracts to insure against loss by fire (d).

SECTION VI.

CONSTRUCTION OF CONTRACTS.

of contracts.

An express contract is construed according to its sense and Construction meaning, as collected in the first place from the terms used in it, which terms are themselves to be understood in their plain, ordinary, and popular sense, unless they have generally in respect to the subject matter, as by the known usage of the trade, or the like, acquired a peculiar sense distinct from the

(a) Hadley v. Baxendale, 23 L. J. Exch. 179,

(b) England v. Curling, 8 Beav.

129.

(e) Bryson v. Whitehead, 1 Sim. & Stu. 74.

(d) Story, Equity Jurisp. sec. 722; Addison on Contracts, p. 1165.

Construction of words.

popular sense of the same words, or unless the context evidently points out that they must in the particular instance, and in order to effectuate the immediate intention of the parties to that contract, be understood in some other special and peculiar sense (a). If a word has acquired a particular meaning in a certain trade that meaning will be applied to it in construing a written contract respecting that trade, but that the word has acquired that particular meaning must be distinctly proved, and parol evidence is admissible to that effect (b).

Contract decided by the law of the place where it is made.

the rule.

SECTION VII.

PRIVATE INTERNATIONAL LAW ON CONTRACTS.

The validity of a contract is to be decided by the law of the place where it is made. If valid there, it is by the general law of nations held valid everywhere by the tacit or implied consent of the parties (c). With this exception, however, that any Exceptions to fraudulent evasion of the laws of the country or of the rights and duties of its subjects (d), and any contracts against public morals, or against religion or against public rights (e), and contracts opposed by the national policy or national institutions, are null and void, even although they may be valid by the law of the place where they are made. Moreover, it is an established principle that no nation will regard or enforce the revenue laws of any other countries (f). All the formalities and proofs for the authentication of the contract which are required by the lex loci are indispensable to its validity everywhere else. So where the forms of a public instrument are regulated by the laws of a country they must be strictly followed, to entitle it to be held valid elsewhere (g).

Formalities and proofs regulated by the lex loci.

(a) Robertson v. French, 4 East, 135; Mallan v. May, 13 M. & W. 511.

(b) Taylor v. Briggs, 2 C. & P. 525; Myers v. Sarl, 30 L. J. Q. B. 9; Simpson v. Margitson, 11 Q. B. 23.

(c) 2 Kent Comm. pp. 457, 458; Cammell and others v. Sewell and others, 29 L. J. Exch. 350.

(d) Brook v. Brook, 3 Small & Giffard, Rep. 481. See Phillimore, International, Vol. 4, Comity; Biggs

v. Lawrence, 3 T. R. 454; Waymell v. Reed, 5 T. R. 599.

(e) Smith v. Stokesbury, 1 W. Bl. 204; Story on Conflict of Law, sec. 259.

(f) De Weitz v. Hendrichs, 9 Moore, 586; Thompson v. Powles, 2 Sim. 194; Pattison v. Mills, 1 Dow & Clarke, 342; Madrazo v. Willes, 3 B. & Ald. 353. (g) Story's Conflict of Law, ss. 259 to 261.

Thus,

and interpretation regu lated by the lex loci.

The law of the place of the contract will govern the nature, Obligation the obligation, and the interpretation of the contract. whether a contract be a personal or a real obligation, and whether it be conditional or absolute, these are points belonging to the nature of the contract, and are dependent upon the law and custom of the place of the contract, whenever there are no express terms in the contract itself which otherwise control them (a). Where, however, the tribunals of a foreign country misinterpret the law of the country where the contract is made, such decision will not be held obligatory upon the courts of the latter country (b). Contracts made between foreigners, or be- Contracts tween foreigners and natives, are governed by the law of the foreigners place where they are made, and are to be executed (c).

between

and between foreigners and natives regulated by the lex loci.

FOREIGN LAWS ON CONTRACTS.

a contract.

France.-Four conditions are essential for the validity of an Essentials of agreement :-1st, the consent of the parties; 2nd, their capacity to contract; 3rd, a certain object forming the subject matter of the contract; and 4th, a lawful consideration. A contract being the mutual agreement of two or more persons, can only exist by the concurrence of their will. There is no valid consent if it has The consent. been given by error, or if it has been extorted by violence, surprise, or fraud. An error may exist either upon the subject matter of the contract, or in the person with whom the contract is made, or in the kind of negotiation, or in the essential motive of the engagement. An error upon the thing which forms the subject matter will avoid the contract only where it has happened upon the substance itself, and not upon its external qualities. An error upon the quality of the thing does not in general avoid a consent. Violence exercised against the party contracting an nullity. obligation is a cause of nullity. No one can be constrained to enter into a contract. There is violence when the act is of a nature to make an impression on a reasonable person, and to inspire in him the fear of exposing his person or his property to considerable and immediate danger. A contract cannot be opposed on account of violence, if, after violence has ceased, such contract

(a) Story's Conflict of Law, s. 263. (b) Novelli v. Rossi, 2 B. & Ad. 757; Castrique v. Imri, 29 L. J. C. P. 321.

(c) Smith v. Meade, 3 Connect. Am. Rep. 253; Story on Conflict of Law, s. 279.

Error, vio

lence, and fraud, are

causes of its

Fraud.

has been approved of by the party. Fraud is a cause of nullity of an agreement, when the means practised by one of the parties are such that it is evident that, but for these, the other party would not have contracted. Fraud is not presumed: it must be proved. Good faith, which does not permit that one person shall enrich himself at the expense of the other, and which commands equality in contracts, enjoins that one party shall not make the other believe facts contrary to truth, in order to induce him to come to a decision which he would not have otherwise come to. Neither does it allow him to conceal anything with reference to the bargain important to the other party to know, if the knowledge of it would have prevented the conclusion of the bargain. But these rules belong to the forum of conscience; there are many moral delinquencies which the legislators have not been able to prevent or repress by the action of the tribunals. Unless, therefore, the nature of the contract prescribes to one of the parties to make known to the other all that is useful to know, an agreement is void only in cases where there has been a false representation, or where advantage has been taken by one party of the error of the other. Every contract must have reference to something certain and specific; and it must be made for a lawful article. Commercial transactions cannot take place upon things prohibited as injurious to society or contrary to law, as upon smuggled goods, patented articles, &c. There must, moreover, be a Consideration. consideration for every transaction. In commerce every contract is based upon mutual interest, and the consideration consists in an appreciable equivalent. The existence of a consideration is not sufficient, it must be a valid one, and it will not be valid if the promised equivalent is of infinitely less value than the object of the obligation. Nevertheless, a great inequality between the thing promised and the equivalent given for it would only indicate the existence of some mistake, or give suspicion of fraud, of which it belongs to the tribunals to take cognizance.

The subject

matter must be lawful.

Evidence of contracts.

Commercial contracts may be proved by public deed, by private contracts, by brokers' notes duly signed, by accepted invoices, by correspondence, by commercial accounts, and by oral testimony where the tribunals will admit it, and where the law does not exclude it either expressly or by implication. Writing is not indispensable to prove what has been agreed by two parties, unless the law exacts it; yet it is the surest means to establish a