Oral testimony may be allowed in certain cases, however, as, for example, to explain abbreviations, ambiguous words or phrases; to identify the subject matter of the contract and the parties to it; to show surrounding circumstances, usage or custom, a condi tion precedent, fraud or illegality, delivery, a mistake of expression and a subsequent oral agreement. Thus witnesses have been allowed to prove that by lo cal custom "a thousand" of rabbits was 1,200 (i.e., ten long hundreds of six score each) ; to define "year" in a theatrical contract to pay a weekly salary for three years, as meaning only the part of the year during which the theatre was open; to identify the wool de scribed as "your wool," in a contract to buy wool. To admit evidence of this kind is not to contradict the writing, but to get something auxiliary to the writ ing—supplying, as was stated in an English case, "the mercantile dictionary in which you are to find the mercantile meaning of the words which are used." This is necessary in order to assist the court in its en deavor to give effect to the intention of the parties.
4. Rules of the courts are called upon to interpret a contract, they endeavor, as we have, said, to discover the intention of the parties, and will proceed by means of certain rules of con struction. When, for example, the terms of a con tract are capable of more than one meaning, there is thrown upon the courts the task of construction, or of determining which meaning is to be preferred. The following are the general rules of construction: (a) Words are to be given their plain and ordinary meaning, unless the or surrounding circum stances show an intention to use them in a peculiar sense.
(b) In determining the intention of the parties, the agreement is to be construed as a whole ; in other words, particular terms are to be construed in the sense which is most consistent with the general in tention. The meaning must be collected from what is expressed in the contract, and not from a mere con jecture of some intention which the parties may have had in their minds and which they might have ex pressed had they been better advised.
(c) That construction should obtain which will best carry out the intention of the parties.
There are certain subsidiary rules, as, for example: (d) In the case of a contention, as between printed and written words, the written will govern.
(e) Words are to be construed more strictly against the party using them.
(f) Where words or clauses are repugnant to one another, those which are in conflict with the manifest intention of the parties should be rejected as sur plusage.
(g) Where a contract is ambiguous and one inter pretation renders it valid and another invalid, the former will govern.
(h) Where one interpretation renders the contract reasonable and another unreasonable, the former will govern.
(i) Subsequent acts of the parties, not contrary to rules of law or the express terms of the contract, are entitled to strong consideration.
( j) Obvious errors of grammar are subject to cor rection.
(k) Words of general meaning are subject to re striction by words of a more specific character.
5. Surrounding circumstances given consideration. —The intention of the parties may be obscure. The court will then be entitled to look at the surrounding circumstances. There is a tendency in the more recent decisions, especially in England, to pay greater attention to all admissible indications of what the intention of the parties actually was, and to ex amine the conduct of the parties themselves as an in dication of their own construction and of the contract.
6. Matters implied by law.—Many contracts carry with them certain unexpressed obligations attached to them by law. Thus a man may sell another horse, and tho he does not warrant it sound, the law imports that warranty into the contract. On the other hand, he may sell the horse and stipulate that the sale is made 'without warranty. In mercantile contracts there is a presumption that time is an essential condi tion, where time is specified; but even where time is not specified, or is not so specified as to be of the essence of the contract, performance within a reasonable time can be required, and notice may be given that the con tract will be rescinded unless performance is made.
If a person contracts to do a certain thing at or be fore a specified time, and fails to do so, the contract becomes voidable in whole or in part, as the case may be, at the option of the person in whose favor it is to be performed, provided that it was the intention of the parties that time should be of the essence of the contract. If time was not the essence of the contract, then the general rule is that the contract is not void able by the failure to do it at or within the time specified ; and the person in whose favor the contract is made may obtain damages for the loss he has in curred by the delay in performance.
7. Liquidated damages.—The parties to a contract may stipulate that a certain sum shall be paid for dam ages in case of breach of execution of the contract, in which case such sum and no other, either greater or less, will be allowed to the creditor for such damages. This clause, at least under the French law, is fre quently called a penal clause, or clause penale. The Civil Code of Quebec has rejected the doctrine laid down by some of the older French writers to the effect that the amount payable under such a clause might be reduced by the court as being excessive where it was shown that it was larger than the damage actually suffered. Under the English law, penal provisions inserted in instruments to secure the payment of money or the performance of contracts will not be literally enforced if the substantial performance of that which was really contemplated can otherwise be secured.
8. Joint and several may be one or more persons on each side of a contract. Their lia bilities or rights may be joint or joint and several. For example, if there are three joint and several cred itors of a debtor, each of them may singly exact per formance of the whole obligation, and thereupon give a discharge in full to the debtor. If the creditors are merely joint, and not joint and several, then only one action can be brought against the debtor, and in this they all should join. There is a joint and several ob ligation on the part of co-debtors when they are all obliged to the same thing in such a manner that each of them singly may be compelled to the performance of the whole obligation, and that the performance by one discharges the others toward the creditor.
An obligation is not presumed to be joint and sev eral; it must be expressly declared as such. That is the general rule. A joint and several obligation may arise of right by virtue of some provision of law and in commercial transactions joint and several liability is the rule rather than the exception. In a partner ship, for example, the partners are jointly and sev erally liable; and in some jurisdictions the obligation arising from the common offence or quasi-offence of two or more persons is joint and several.