Conditions. Performance of a contract by one party may be made wholly or in part conditional upon performance by another. Thus a contract by which A promises to render certain services, and X agrees to pay for them, may be so worded that X will not be called upon to pay unless A has performed the services, or, en the other hand, it may be so arranged that A will not be obliged to act unless he is. paid in advance. So if it is provided in a con tract that X is to pay for A's services only if they were completed by a, certain clay, and A does not complete his services by that time, A cannot, unless X had lost the right to insist upon the condition, recover under the contract. Ilis only ground of recov ery would be under an acceptance of the services by X, and a con sequent implied contract. Not only may such conditions be ex pressed, but they limy also be implied by the law. It is therefore necessary for a party to a contract to consider carefully whether he has done everything which he is called upon to do before he can maintain an action against the other party for the failarc of that other party to perform his obligation under the contract. When by the contract performance by the one is expressly made conditional upon performance by the other, the case is clear; if no such con ditions are expressed, the question arises whether any are implied. A court in construing a contract in this respect, as in others, will attempt to ascertain the intention of the parties, and if it appears to have been intended that tho whole or a part of performance by one party was meant to be dependent upon some portion of the performance by the other party, then effect will be given to this intention by holding performance under the contract conditional according to the intention shown. Take for instance a contract for the sale of land: one party may agree to convey the land at a certain time, and the other to pay the purchase money at the same true, without expressly saying that either act should be dependent upon the performance of the other. Yet, as the meaning is clear that the acts are in reality to lie mutually dependent, neither party is called upon to perform unless the other party is ready, able. and willing to carry out his part; and, on the other hand, neither party can Maintain an action for breach without showing himself to have been able, ready and willing to perform on his side. The practical result of these principles is that when B breaks his con tract with A, and A wishes to bold B liable for the breach, A must carefully consider whether be has done all on his part that is necessary to put B in the wrong. As questions of some nieety occur on such points, it is desirable to take advice of counsel in season to follow out any suggestions regarding such steps as it pre liminary to it snit.
If the question of the construction of a contract is involved in a litigated case, the matter is determined by the judge, not by the jury. There are many rules of construction by which the judge is guided, only some of the more general and the more im portant of which will be mentioned here. While no oral evidence to explain or supplement a written will be heard, yet the judge may consider other distinct agreements of the parties which modify the contract in question. Ile will also hear evidence as to the circumstances of the parties when the contract was made, as tending to show the meaning of expressions used. Oral evidence may also be given to show the technical, and sometimes the cus tomary, meaning of words contained in the contract. When, how- ever, a custom is relied upon to give to a word a meaning different from that generally accepted, or to add to the substance of a con tract, it must be a custom that is reasonable, certain, defined, and uniform. In most cases the custom must be shown to be known
to both parties to the contract. It is important in framing con tracts to use words in general use, and to use them in a commonly accepted sense, seeking clearness and precision, and carefully avoid ing possible ambiguities. In construing a contract, the object of the court is to ascertain the real intent of the parties at the time of signing. The judge seeks to decide what meaning the words had as used by the parties, under the given circumstances, at the given time and place. Li construing any portion, he takes the whole instrument into account, and looks for such an interpreta tion as will give effect to every part.
Assignability of Contracts. Contracts which involve per sonal services, where the element of individuality is important, cannot be assigned, and the estate of the person whose services are contracted for cannot be held to the contract. If, therefore, an architect dies, his contract for services is terminated. In general. however, a contract is assignable, and both the benefit and the burden of it pass to a man's estate. In case of bankruptcy of a contracting party, therefore, an ordinary contract passes to the assigned or trustee. It should be considered in drawing a contract whether a provision is not wanted bankruptcy, or death, of of one or either of the parties, terminate the contract.
Avoidance of Contract. A contract made l)&tween competent parties, and apparently having all the legal requisites of a good contract, may still under certain circumstances be set aside by the court. If in the formation of a contract there has been mistake, fraud, duress, or undue influence, the injured party may, by proper legal proceedings, avoid the agreement. Such mistake as may be the basis of relief must not be mere careless mistake; it is in many cases of such a nature as almost to involve misrepresentation or fraud. Duress occurs where the consent of one party is obtained by violence. Undue influence implies that the will of one person is absolutely overcome by the will of another, so that the consent of the first is not really an independent act. Perhaps the most important of the above-named grounds of avoid. ance is fraud. In case a contract has been entered into upon a material and wilfully false representation by the other party, it may be avoided. Occasion for this may arise, for instance. upon deception in the purchase of materials.
Reforming Contracts. Where a contract has been reduced to writing, but through a mistake, does not express the agreement of the parties, it may be reformed by a court so as to correspond with the real understanding. This is the more important because of the important principle that a party to a written contract is not permitted in an action founded upon that contract to show by evidence outside the writing itself, that the agreement was not what the written statement shows it to be. Ile may avoid the contract on one of the grounds stated in the preceding section, or he may show that another later contract, whether oral or written, affects it, but he may not attempt to show by oral testimony that it was something different from the written expression. If the contract was in fact different from what is shown by the writing, and if the other party will not consent to the required change, application should be made to the proper tribunal for reforinatmn. Penalties and Liquidated Damages. Tf a contract provides that upon default by one party, that party to the other a certain sum, and it appears that the payment is intended as a alty and was inserted only for the purpose of securing performance, it will not he enforced by the courts. If, on the other hand, it ap pears that the sum is named as a measure of the compensation for a breach, it is called liquidated damages, and is valid, fixing the amount to be recovered if, by reason of a breach of contract, the provision comes into effect. Provisions of this nature are often introduced into building contracts.