- •§1. Place op contract in jurisprudence. 3
- •§ 2. Obligation.
- •§2. Place of contract in jurisprudence. 5
- •§2. Place of contract in jurisprudence. 9
- •§ 2. Acceptance must he absolute, and identical ivith the terms
- •§ I. Agreement,
- •§ 3. II proposal which has not been accepted does not affect the Till accept-
- •§ 5. It proposal may lapse otherwise tJian by revocation as
- •§ 6. Proposal and Acceptance need not necessarily he written Contracts
- •§ 7. A proposal need not be made to an ascertained person,
- •§ I. Contracts of Record.
- •§ 2, Contract under Seal,
- •§ 3. Simple Contracts required to be in writing.
- •§ 4. ConsideItATiaN.
- •§ I. Political or Professional Status,
- •§ 2. Infants,
- •§ 3. Married women.
- •§ 4. Corporations.
- •§ 5. Lunatic and drunken persons.
- •§ 2. MlSbepbesentation.
- •§ 3. Fraud.
- •§ 4. Duress.
- •§ 5. UamuE Influence.
- •§ I. Nature of Illegality m Contract.
- •§ 18 Upon Stock ExchiEknge transactions is well summarised in the
- •§ 2. Effect of Illeoalitt upon Contracts in
- •§ I. Assignment by act of the parties.
- •§ 2. Assignment of contractual rights and liabilities by
- •§ I. Froof of Document,
- •§ 2. Evidence as to /act cf Agreement.
- •§ 3. Evidence as to the terms of the Contract,
- •§ I. General Rales,
- •§ 2. Rvlea 0/ Law and Equity as to Time and Penalties,
- •§ I. Waiver.
- •§ 2. Svhstituted Contract
- •§ 3. Provisions for DischcMrge,
- •§ 1. Position op pabties whebe a Contbact
- •§ 2. Forms of Discharge bt Breach.
- •§ 3. Eemedies fob breach of Contract.
- •§ 4. DiSghaboe of RiOht of AcTion abisiNa
OF THE
ENGUSH UW OF CONTRACT
BY
SIR WILLIAM R. ANSON, Bart., M.A., B.C.L.
OF THB IirirBS TBMPLB, BABBISIBB AT LAW
YIlfBBIAJr BBADBB OB BNGLISH LAW
FBLLOW OP ALL SOULS* COLLBG-B, OXBOBD
AT THE CLARENDON PRESS
1879
[All rights reserved]
PEEFACE.
This book is an attempt to draw such an outline of the
principles of the law of Contract as may be useful to students,
and, perhaps, convenient to those who are engaged in the
teaching of law. To some of those who are so engaged it
has seemed that there is need of an elementary treatise which
should deal with the subject of Contract in its entirety; and
the existence of such a need is my excuse for the production
of the present work.
The main object with which I have set out has been to
delineate the general principles which govern the contractual
relation from its beginning to its end. I have tried to show
how a contract is made, what is needed to make it binding,
what its effect is, how its terms are interpreted, and how it is
discharged and comes to an end.
In thus sketching the history of a contract, I have striven
to maintain a due proportion in my treatment of the various
parts of the subject, and to avoid entering into the detail of
the special kinds of contract. The history and antiquities
of the subject have, of necessity, been dealt with only so
far as was absolutely necessary to explain existing rules, and
I have placed in Appendices what I have to say on two
matters the treatment of which seemed to be unavoidable and
yet out of place in any part of a merely general outline.
One of these is the 'contract implied in law/ or quasi-
contract. The effect of this legal relation has been fully
explained by Hr. Leake (part i. c. i. s. 2), and it seemed to
VI PBEFACE.
be only necessary to point out the general character of the
obligation which it creates, and to sketch the liistory of the
mode in which, for the convenience of pleading, it figured
for a while in the outward form of contract.
The other subject is the special contract of Agency : this
too I regarded as a matter alien to a general discussion of
the principles of contract, but the constant recurrence of the
relation of Principal and Agent made it needful to give a
brief outline of the chief rules regarding Agency.
On one or two points, interesting in themselves, or open
to discussion, I have dwelt at a length disproportionate
perhaps to my general plan. The somewhat slender authority
for some of the often-quoted rules relating to past considera-^
tion, the various effects of innocent misrepresentation, the
questionable validity of a bare waiver of contractual rights,
are points to which I have called the attention of the reader.
The intricate subject of the discharge of contract by breach,
and its effects, together with the kindred subject of con-
ditional and independent promises, would seem to need a
fuller analysis than it has yet received in the books on Con-
tract. Conditions are usually dealt with in connection with
the promise when made, whereas their fiill effect can only be
ascerteined when they are regarded as affecting the promise
when broken.
Another object which I have striven to attain is that of
inducing the student to refer to the cases cited in illustration
of the rules laid down, and to form for himself a clear notion
of the law as it has been expounded from the Bench. The
law of contract so far as its general principles go has been
happily free from legislative interference : it is the product
of the vigorous common sense of English Judges ; and there
can hardly be a healthier mental exercise than to watch the
J
PREFACE. vil
mode in which a judicial mind of a high order applies legal
principles to complicated groups of fact.
The student, to whom a text-book is not, as it is to the
practising barrister, a repository of cases for reference, but a
collection of rules and principles which he desires to learn,
is too apt to take these upon trust unless the cases from
which they are drawn are thrust upon his notice. For this
reason I have avoided the citation of numerous cases, I have
endeavoured to select such as form the most vivid illustrations
of the rules which I have laid down, and I have placed the
references to those which I have cited — where I thought they
would be most conspicuous — in the margin. This is my
excuse for a departure from the ordinary arrangement of
references in foot-notes.
To the able Treatise of Mr. Pollock and the exhaustive
Digest of Mr. Leake I have made frequent references, but
these do not express the extent of my obligations to those
learned authors. Their books must needs enter largely into
the composition of such a work as mine professes to be.
I have also occasionally referred the reader to works of a
more special character, and in particular to the great work
of Mr. Benjamin for all points connected with the contract of
Sale of Personalty. But for the reason which I stated above
I have avoided the accumulation of a mass of authority, and
have often run the risk of seeming to dogmatise lest a
numerous collection of references should disincline the stu-
dent to the process of verification.
W. R A.
I Bbick Coubt, The Temple.
TABLE OF CONTENTS.
PART I.
PLACE OF C0NTRAC3T IN JUBISPRUDBNCE.
PAGE
Outline of subject . i
Analysis of Agreement 2
Distinction of Contract from Agreement 3
Analysis of Obligation 4
Distinction of Duty from Obligation 6
Forms of Obligation • . 7
PAET II.
FOBMATIOX OF CONTBACT.
CHAPTER I.
Proposal and Aooeptanoe.
Agreement traceable to Question and Answer . . . .11
Forms in which Contract may originate 12
Bequirements in Proposal 14
Requirements in Acceptance 14
Proposal inoperative till accepted 15
Under what circumstances may Proposal be revoked . . • 1 7
How Proposal may lapse otherwise than by revocation . . 22
Contract may arise from Conduct 23
Proposal by Advertisement 24
Representation of Intention as distinct from Proposal . • 26
CHAPTER II.
Form and Consideration.
Form or Consideration necessary marks in a valid Contract . . 29
Historical outline of the subject . 29
Classification of EngUsh Contracts 36
X CONTENTS.
PAGE
Formal Contracts.
Gpntract of Record . * 37
Contract under Seal 39
How made 39
Its characteristics 40
When a Deed is essential to validity of a Contract . . 44
Simple Contract
Simple Contracts required to be in writing ... 46
The Statute of Frauds 47
The Fourth Section 47
Its requirements as to form , ^ .... 48
The Contracts included under it ' 53
The effect of a breach of its provisions . . . • 56
The Seventeenth Section of the Statute of Frauds . 57
Its requirements as to form 58
Nature of Contract specified ....... 58
Effect of a breach of its provisions . . . 60
Consideration.
Definition of Consideration 61
Consideration necessary to validity of every Simple Con-
tract . .63
Consideration need not be adequate to the promise . . 63
In what Consideration may consist 65
Mutual promises . . . « i* . .66
Contingent or conditional promises . . 66
Forbearance to sue .... ... 67
Compromise of suit .68
Bailment . . 70
Consideration which has been held unreal . • 7i
]^6tive . ... 71
Impossibility and Vagueness 74
Performance or promise to perform existing legal duty . 75
Apparent exceptions, composition with creditors . 79
Promise' to perform existing contract . . . . 80.
Shadwell v. Shadwdl discussed 80
Legality of Consideration 81
Executory and executed Consideration . . . .82
Past Consideration is no Consid^tion . . . '85
First alleged exception to this rule. Consideration exe-
cuted upon request 85
The rule in Lampleigh v. Braithwait discussed . 86
CONTENTS.
XI
Second exception, revival of Fromifle .... 90
Third alleged exception, voluntary dischaige of another's
legal liability 92
Beview of cases 93
CHAPTER in.
Capacity of Parties.
1. Political or Professional Status 97
2. Infuicy. Batification at Common Law .... 98
Ratification of Infant's Contract as a£fected by Statute . 10 1
Infant's Belief Act loi
Effect of first section of In&nt's Belief Act . . 102
Of second section 103
Necessaries, what they are, and how asoertaiued .104
liability of Infant for wrong arising firom Contract . .105
Or apart firom Contract 106
3. Married Women 106
Their Contracts void as a general rule .106
Exceptions 106
4. Corporations . .111
Necessary limits to their capacity to Contract . . .111
Express limitations 113
5. Lunatics and Drunken Persons 113
Their Contracts voidable, not void 113
CHAPTER IV.
Beality of Conaent.
1. Mistake of intention as distinct from expression
as to nature of transaction . , . .
as to persons with whom the contract is made
as to subject-matter of Contract, generally in
operative
as to existence of subject-matter
as to identity of subject-matter
as to extent of promise as to subject-matter
Effect of Mistake is to avoid contract
2. Misrepresentation ; difficulty attending its discussion
Misrepresentation as distinguished from fraud
Innocent Misrepresentation is inoperative
tf
a
n
tf
it
tt
116
116
118
120
121
122
123
127
128
129
13a
Xll
CONTENTS.
4-
5-
PAOB
Unless it be a term in the contract 132
Or occur in contracts uberrimae fidei . . . •133
If a term in the contract, it is then a form of discharge . 138
Contracts ubenrimcLe fidei 139
Marine and fire insurance . • • . .140
Sale of land 141
Prospectus inviting purchase of shares . . .142
Contract of suretyship is not uberrimae fidei . . '143
In its inception, but becomes so when made . . • 144
Expressions of opinion are not representations . * 144
Nor are commendatory expressions 144
Pravd, Its essential features 145
It is a false representation 145
It is a representation of fa^ 147
Intentionally Mse, or reckless 148
Intended to be acted upon by the person injured . 151
It must actually deceive 152
Its effect, it gives rise to action ex ddido . . -153
,f it makes contract voidable . . . '154
„ limits of right to afi&rm and avoid . • •154
De^reM, its nature and effect 155
ZZne^ue /ri/Wfice, how distinct from Fraud . . •156
Circumstances under which it is presumed . . • '57
Suggested by personal influence 158
Or by the circumstances and relations of the parties . 160
Its effect; how different from that of Fraud . . .161
CHAPTER V.
Legality of Object.
I. Nature of illegality
Contra<!t8 in "breach of Statute ; effect of penalty
Wagering contracts ....
A wager defined and described .
History of legislation on the subject
Contracts in breach of rules of Common Law
Agreements to commit a crime or wrong
Contracts in breach of the policy of the law
Public policy; its general application .
Agreements tending to injure public service
164
164
165
166
168
172
173
174
174
175
CONTENTS.
Xlll
*t
n
99
ff
Agreements tending to pervert the course of justice
tending to encourage litigation
contrary to good morals
in restraint of marriage
' in restraint of trade
2. Effect of illegality ....
Where the contract is divisible .
Where the contract is indivisible
Where direct object is unlawful but intention innocent
Where direct object is innocent but intention unlawful
Where the unlawful intention is on one side only
Securities given for money due on illegal transactions
Distinction between illegal and void contracts .
Effect of parties not being in pari delicto .
Effect of locus poeniterUiae while the contract is
executory
PAOB
176
177
178
179
179
180
181
i8a
182
183
186
186
187
189
191
PAKT III.
THE OPERATION OP CONTRACT.
CHAPTER I.
The Iiiniits of the Contractual Obligation.
A contract only affects the legal relations of the parties to it
Agency and Trust no real exceptions to this rule
1. Contract cannot impose an obligation on a third party
Can it impose a duty t Lumley v, Oye discussed
2. Contract cannot confer rights on a third party
Though expressed so to do by the contracting parties
195
196
197
198
199
199
CHAPTER n.
The Assignment of Contract.
I. Assignment by act of the parties ...... 204
Liabilities cannot be assigned 204
Bights may be assigned at Common Law only by sub-
stituted agreement in case of debt 206
Or by custom of merchants » . 206
Rights may be assigned in Equity 208
XIV CONTENTS.
FAGB
But notice must be given to persons liable .... 20S
And the assignment ' is subject to equities ' . . . . 209
Bights may be assignecl by Statute in certain cases . .211
Negotiability, its characteristics 212
Illustrated by bills of exchange and promissory notes .213
Illustrated by bills of lading 216
2. Assignment by operation of law . . . . .217
Obligations assigned on transfer of interests in land . .218
In the case of leasehold interests 218
In the case of freehold interests 218
Obligations of wife assigned by marriage . .221
Obligations assigned by death 222
Obligations assigned by bankruptcy or liquidation . . .223
PART IV.
THE INTBBPRETATION OF CONTEACT.
CHAPTER I.
Bules relating to Evidence.
Provinces of Court and Jury 226
Difference in proof of fonnal and simple contract . . .227
I. Proof of document purporting to be a contract . .228
2. 'Evidence as to fact of agreement 230
3. Evidence as to terms of contract 233
Collateral promise 234
Explanation of terms 235
Usage' 237
Equitable rules as to rectification and avoidance . '239
CHAPTER n.
Bules relating to Construction.
G-eneral rules . , 241
Rules as to Time and Penalties 242
CONTENTS. XV
PART V.
DISGHABGE OF CONTRACT.
FAOB
Modes in which it may take place 246
CHAPTER I.
Discharge of Contract by Agreement.
1. Waiver as a mode of discharge 247
Only applicable to executory contracts 248
And to bills of exchange and promissory notes • . « 2i^9
2. Substituted contract :
How different from postponement of rights .... 250
Substituted terms 251
Substituted parties 252
3. Provisions for discharge 253
(i) Promise subject to right of rescission in a certain event . 253
(2) Conditions subsequent 244
Excepted risks . 254
ActofGrod 255
(3) Provisions making contract determinable at option . . 256
Form of discharge by agreement 257
In case of contract under seal 257
In case of jJoroZ contract 258
CHAPTER n.
Discharge of Oontraot by Performance.
Performance when a complete discharge 261
Payment as a discharge 262
Tender as a discharge 264
CHAPTER ni.
Discharge of Contract by Breach.
Breach of Contract always give a right of action, not always a
discharge 266
I. Position of party discharged by Breach 267
He is exonerated from further performance .... 267
May sue as upon a contract arising from conduct . . 268
Even if his performance be only partial — ^a quantum meruit . 269
XVI CONTENTS.
PAGE
2. Forms of Discharge by Breach 270
Benundation before performance is due . . . .271
Impossibility created by one party before performance is due 273
Benunciation in the course of performance . . . •274
Impossibility created by one party in the course of per-
formance 279
Failure of performance, when a discharge . . . •277
Independent promises of three kinds . . . . •277
(i) Absolute promises 278
(2) Promises admitting of more or less complete per-
formance 281
(3) Subsidiary promises 284
Conditional promises— nature of conditions . . . .286
Suspensory conditions 287
Conditions which detennine discharge 288
(i) Concurrent conditions 289
(2) Virtual failure of consideration 290
(3) Conditions precedent 294
How distinguished from Warranty 295
Acquiescence in breach of a condition turns it into a War-
ranty ex post facto 297
But not if the breach be of an essential term .... 299
3. Remedies for Breach 300
Damages, rules governing their application . . . .301
Specific performance, when decreed 304
By what Courts administered 305
4. Discbarge of Bight of Action arising from Breach . . . 306
By consent of parties. Beleaae 306
By consent of parties. Accord and Satisfaction . . . 307
By judgment 307
By lapse of time 308
Bevival of barred right of action . . . . . .310
CHAPTEB IV.
Disoliarge of Contract by Impossibility of Ferformanoe.
Phases of Impossibility of Performance 312
Difficulties presented by CKjford ». Watts 313
Subsequent Impossibility as a rule is no discharge . . .314
Unless it be created by law of England . . . . .315
§1. Place op contract in jurisprudence. 3
of English law we may take it, as a test of this reference to.
I^al relations, that the intention of the parties must have
to do with * something which is of some value in the eyes of
the law,' something which can be assessed at a money value.
5. The consequences of Agreement must affect the parties
themselves. Otherwise the verdict of a jury or the decision
of a Court sitting in banc would answer the foregoing re-
quisites of agreement.
Agreement then is the expression by twa or more persons
of a common intention to affect the legal relations of those
persons.
But this would clearly include much more than Contract. Agreement
a wider
Under the definition of Agreement at which we have arrived term than
would fall— ^°^^^^'-
(i) Agreements which pass property from one of two par-
ties to another simultaneously with the expression of their
common consent. Such are conveyances, and gifts, where as to «jifts,
the agreement of the parties operates at once as a transfer ^^^^ ^
of rights in rem, and leaves no obligation subsisting between
them.
(2) Agreements which effect a change of status immedi-
ately upon the expression of the consent of the parties,
such as Marriage, which, when consent is expressed before
a competent authority, alters at once the legal relations of
the parties in many ways,
(3) Agreements which, though intended to affect legal re-
lations, are nevertheless not enforceable at law. Such would
be a gratuitous promise to transfer property.
It would seem then that Agreements the effect of which
is immediate in creating rights in rem, or in effecting a change
of status, are not such as we ordinarily term Contracts. Nor,
again, are Agreements to be called Contracts which, though
intended to affect legal relations, fail to do so, because they
do not fulfil some requirements of the positive law of the
country in which they are made.
B 2
4 INTBOPUCTION. Part I.
Agreement being a term of wider meaning than Contract,
we have to ascertain the characteristic of Contract as distin-
guished from other forms of Agreement.
A promise We are always in the habit of considering that an essential
sm essentisil
feature in a feature of a contract is a promise by one party to another,
contract. ^^ |jy ^^^ parties to one another, to do or to forbear from
Jurisprudence, doiug somo Specified acts. Austin in fact speaks of a con-
tract as a promise, meaning thereby an accepted promtee, as
distinguished from that which he caHs a pollicitation, an
unaccepted promise, or offer.
A promise which a man is legally bound to perform creates
an obligation or right in personam against him in favour of
the party to whom the promise is made. It follows there-
fore that we should consider the nature of Obligation and
try to distinguish the contractual from other forms of Obli-
gation.