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acts.

contracts.

notes.

ence.

contract. As regards the contracting parties, a written contract Deeds or establishes whatever it contains, except in case of fraud. But as regards third persons, they are always at liberty to attack it, even where there has been no fraud. A private contract must bear the Private signatures of the parties, but it is not necessary that the whole be in the handwriting of the party. In general the want of date is not of itself a cause of nullity. Brokers' notes must be prepared Brokers' by the brokers, and signed by the contracting parties, although when a merchant gives authority to a broker to sell, and the broker can prove such authority, the moment the purchaser accepts, the contract is perfect. Invoices are means of evidence, Invoices. where it can be proved that they have been accepted, although the simple detention of the invoice or bill of lading would not give a right to the party to conclude that the consignee has become the purchaser of the article. Correspondence is another Correspondproof, provided it be kept in a legal form. To prove a contract by correspondence it must be shown, that the person who made an offer to another did not change his mind till the latter person received the letter, and declared in answer that he accepted it, but he is not presumed to have changed his mind. Usage and circumstances alone can determine at what time the consent to an offer must be made, in order to give a right to the party to demand the execution; sometimes even the silence of a correspondent may produce an obligation. If a merchant has received a formal offer of an article, with notice that the article will not be sold till the refusal is received, or that the want of an answer will be considered as an acceptance, if he does not answer, the tribunal may find in his silence an acceptance of the proposal. Commercial books are an important source of evidence. Where there is a dispute between merchants, their Books. books, regularly kept, may be admitted as evidence in matters of trade. The greater part of commercial engagements can with difficulty be proved otherwise than by witnesses. When Parol evia written contract is required, oral evidence is not admissible, but in other cases the option of receiving such evidence rests with the judges (a).

United States. An executory contract is an agreement of more persons upon sufficient consideration to do or not to do a particular thing. The agreement is either under

two or

(a) Pardessus' Droit Commercial, Vol. i., p. 176, and following.

dence.

Essentials of a contract.

Express and implied contracts.

Contracts of lunatics.

seal or not under seal. If under seal it is denominated a specialty, and if not under seal an agreement by parol, and the latter includes equally verbal and written contracts not under seal. The agreement conveys an interest either in possession or in action. If a person sell and deliver goods to another for a price paid, the agreement is executed, and becomes complete and absolute. If the vendor agrees to sell and deliver at a future time, and for a stipulated price, and the other party agrees to accept and pay, the contract is executory, and rests in action merely. There are also express and implied contracts. The former exist when the parties contract in express words or by writing, and the latter are those contracts which the law raises or presumes by reason of some value or service rendered, and because common justice requires it. Every contract valid in law is made between parties having sufficient understanding, and age, and freedom of will, and of the exercise of it for the given case. The contracts of lunatics are generally void from the period at which the inquisition finds the lunacy to have commenced. But the inquisition is not conclusive evidence of the fact, and the party affected by the allegation of lunacy may gainsay it by proof without first traversing the inquisition. Sanity is to be presumed until the contrary be proved; and when an act is sought to be avoided on the ground of mental imbecility, the proof of the fact lies upon the person who alleges it. On the other hand, if a general mental derangement be once established or conceded, the presumption is shifted to the other side, and sanity is then to be shown. So a contract made by a person so destitute of reason as not to know the consequences of his contract, though his incompetency be produced by intoxication, is void. Imbecility of mind is not sufficient to set aside a contract, when there is not an essential perversion of the reasoning faculties, or an incapacity of understanding and acting in the ordinary affairs of life. Weakness of understanding may, however, be a material circumstance in establishing an inference of unfair practice or imposition, and it would awaken the attention of a court of justice to every unfavourable appearance in the case. Nor is a person born deaf and dumb to be deemed absolutely non compos mentis. If the contract be entered into by means of violence offered to the will,

or under the influence of undue constraint, the party may avoid it by the plea of duress; and it is then requisite to the validity of every agreement that it be the result of a bona fide exercise of the will. If a person be under an arrest for improper purposes, without a just cause, or where there is an arrest for a just cause, but without lawful authority, he may be considered as under duress. Nor will a contract be valid if obtained by misrepresentation or concealment, or be founded in mistake, as to the subject matter of the contract.

It is essential to the validity of a contract that it be founded Consideration. on a sufficient consideration. There must be something given

in exchange, something which is mutual, or something which is the inducement to the contract, and it must be a thing which is lawful and competent in value to sustain the assumption. A contract without a consideration is a nudum pactum, and not binding in law, though it may be in point of conscience. Whether the agreement be verbal or in writing, it is still a nudum pactum, and will not support an action if a consideration be wanting. The rule that a consideration is necessary to the validity of a contract, applies to all contracts and agreements not under seal, with the exception of bills of exchange and negotiable notes, after they have been negotiated and passed into the hands of an innocent indorser. The immediate parties to a bill or note, equally with parties to other contracts, are affected by the want of consideration, and it is only to third persons who come to the possession of the paper in the usual course of trade, and for a fair and valuable consideration, without notice of the original defect, that the want of a consideration cannot be alleged.

In contracts under seal, a consideration is necessarily implied in the solemnity of the instrument, and fraud in relation to the consideration is held to be no defence at law; though fraud in respect to the execution of the specialty, and going to render it void, is a good defence. A valuable consideration is one that is either a benefit to the party promising, or some trouble or prejudice to the party to whom the promise is made.

Any damage or suspension or forbearance of a right will be sufficient to sustain a promise. A mutual promise amounts to a sufficient consideration, provided the mutual promises be concurrent in point of time, and in that case the one promise is a good

In contracts by deed consideration is implied.

What is a

sufficient con

sideration.

The consideration must be lawful.

Illegality of contract is a good defence, even on the part of the wrong-doer.

consideration for the other. But if two concurrent acts are stipulated, as delivery by the one party, and payment by the other, no action can be maintained by either without showing a performance of his part of the agreement. If the consideration be wholly past and executed before the promise be made, it is not sufficient, unless the consideration arose at the instance or request of the party promising, and that request must have been expressly made, or be necessarily implied, from the moral obligation under which the party was placed; and the consideration must have been beneficial to the one party, or onerous to the other. A subsisting legal obligation to do a thing is a sufficient consideration for a promise to do it; but it is a disputed and unsettled point, whether a moral obligation be, of itself, a sufficient consideration for a promise, except in those cases in which a prior legal obligation had once existed. Though the consideration of natural love and affection be sufficient in a deed, yet such a consideration is not sufficient to support an executory contract, and give it validity, either at law or in equity. A promise to do a thing may be merely gratuitous and not binding, yet if the person promising enters upon the execution of the business, and does it negligently or amiss, so as to produce injury to the other party, an action will lie for this misfeasance. The consideration must not only be valuable, but it must be a lawful consideration, and not repugnant to law, or sound policy, or good morals. If the contract grows immediately out of or is connected with an illegal or immoral act, a court of justice will not enforce it. But if it be unconnected with the illegal act, and founded on a new consideration, it may be enforced, although the illegal act was known to the party to whom the promise was made, and he was the contriver of the illegal act. The courts of justice will allow the objection, that the consideration of the contract was immoral or illegal, to be made even by the guilty party to the contract, for the allowance is not for the sake of the party who raises the objection, but is grounded on general principles of policy. A particeps criminis has been held to be entitled in equity, on his own application, to relief against his own contract, when the contract was illegal, or against the policy of the law, and relief became necessary to prevent injury to others. It was no objection that the plaintiff himself was a party to the illegal transaction. But

if a party who may be entitled to resist a claim on account of its illegality waives that privilege and fulfils the contract, he cannot be permitted to recover the money back, and the rule that portior est conditio defendentis will apply. If, however, the money be not paid over, but remains in its transit in the hands of the intermediate stakeholders, the law will not permit a third person, who is thus incidentally connected with the transaction, to set up the claim of illegality in the contract between the principal parties. An agent cannot shelter himself from paying over the money by such a plea, and the money advanced may be reclaimed. If any part of the consideration be malum in se, or the good and the void consideration be so mixed, or the contract so entire, that there can be no apportionment, the good part shall stand, and the rest be held void; though if the part which is good depends upon that which is bad, the whole instrument is void. The rules of construction of contracts are the same in courts Construction of contracts. of law and of equity, and whether the contract be under seal or not under seal. The mutual intention of the parties to the instrument is the great and sometimes the difficult object of inquiry, when the terms of it are not free from ambiguity. Plain unambiguous words need no interpretation, and subtlety and refinement upon terms would defeat the sense. Words are to be taken in their usual and obvious meaning, unless some good reason be assigned to show that they should be understood in a different sense; but if the intention be doubtful, it is to be sought after by a reference to the context, and to the nature of the contract. It must be a reasonable construction, and according to the subject matter and motive. The whole instrument is to be viewed and compared in all its parts, so that every part of it may be made consistent and effectual. And the meaning is to be sought also by a reference to the usages of the place or the lex loci, according to another of the maxims of interpretation in the civil law. If it be a mercantile case, and the instrument be not clear and unequivocal, the usage of trade will frequently assist in determining the precise import of particular terms, and the certain intention declared by the use of them. The law places more reliance upon written than oral testimony; and it is an inflexible rule Effect of pathat parole evidence is not admissible to supply or contradict,

role evidence.

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