Lau) of Contracts.— Almost every con ceivable human relation or right may be subject matter of a contract, though contracts contra vening public policy would be absolutely void, and not merely voidable for their illegality. A person could not scll himself into slavery, nor make an enforcible agreement to commit a crime; to do an act forbidden by statute, nor to do a civil wrong. The compounding of, or an agreement not to prosecute, a felony, or to procure legislation by corruption, to promote litigation (champerty), etc., would not be con tracts; but would he crimes. But an agreement would not be illegal even though the thing agreed to be done should be unwise, unreasonable or absurd. The essentials of a contract are (1) two or more parties, for a man cannot make a contract with himself, and an agreement be tween two departments of the same corporation would be a nullity; (2) there must be a common intention, which must have been communicated from one party to the other; (3) what is agreed to must be possible and legal; (4) the agreement must have been expressed in some manner, or must be inferable from the acts of the parties; (5) the agreement must either be evidenced by a solemn formality — the sealing and acicnowledgment of a bond or a deed; or there must be some fact which affords a motive for the making of it —in the language of the lawyers, °a consideration moving.° All agree ments spring from an offer and its acceptance. The acceptance must be unconditional, for, if it is conditional, the acceptance is, in effect, a new offer; the minds of the parties have not met and there has been no agreement. Acceptance must be contemporaneous with the offer, or the latter may be withdrawn at any time before it has been accepted. A bid at an auction, for instance, has been held not to bind the bidder until the hammer has fallen. A party making an offer by mail, however, cannot withdraw the same after the party of the other part has sent his acceptance by post; though an offer by mail may be countermanded by telegraph or phone ,before it has been assented to. An offer made in an instrument under seal cannot be revoked even though not immediately accepted by the party to whom the tender is made. The con sensus of the parties must .be real. Absence of consent not merely avoids an agreement but renders it a nullity. There is no real consent when one of the two parties does not mean the same thing as the other, or when an unavoid able mistake has been made— as where the object of an agreement does not exist, or where an agreement is made to buy a cargo Ito arrive ex Peerless? there being two ships of that name, one of which was intended by the buyer and the other by the seller. Fraudulent misrepresenta tion, of course, invalidates consent of the defrauded party and vitiates the agreement. Mere exaggerations of a vendor crying his wares are not necessarily fraudulent; repre sentations are fraudulent in law only when made recklessly, with knowledge of their falsity or without belief in their truth. To invalidate consent it must have been materially induced by the misrepresentations. Only where the utmost good faith is required, as where one party stands in a fiduciary relation to another, may even the innocent misrepresentation or non-disclosure of facts invalidate an agreement ab initio. When the consent of a party is ob tained by undue influence no contract has been made. Threats of injury to or the withholding of property, when made by a person in a posi tion to dictate, constitute undue influence— as, where a banker refuses to honor the check of a customer unless the latter accedes to a false or fraudulent claim; or a water company refuses service unless a promise is made to which it has no right. Consent is nugatory, of course, when given under duress, meaning a threat of bodily harm to the promisor or the restraint of his liberty. The matter agreed upon must be possible of performance as well as legal. An agreement to jump over the moon would not be a contract; but a promise to build an aeroplane that could cross the Atlantic in four days would be, the performance of the promise being, con ceivably, possible. A physical impossibility is not necessary; a practical impossibility is sufficient to avoid an agreement — for instance, to recover a ring known to be lying at the bottom of the sea. An agree ment which imports to have a legal effect un known to the law is void. An agreement may be expressed either in writing or orally, or onc may be inferred frOm a course of conduct. The latter is called an ((implied contract.° The intention of the parties must have been com municated from one to the other. In an old case of the time of Edward IV it was said by the court in reference to an unexpressed accept ance, ((your having it in your own mind is noth ing, for it is trite law that the thought of a man is not triable, for even the devil himself does not know what the thought of a man is.° In a developed system of laws it is not necessary that the offer and acceptance be made by the parties face to face. They may be communi cated by post or by telegraph or telephone, by messenger or other go-between. A contract made by mail need not be contained in its entirety in one letter and the answer thereto; it may be the outcome of a long correspondence and tnay be made partly in writing and partly by word of mouth. A contract, unless it be a (irspecialty,° need not follow any prescribed form, and it may be made through agents. Contracts are sometimes said to be ((implied in law.° The term is not happily chosen, for an examination of the cases shows that obligations by legal implication do not spring from contracts at all. For instance, when one receives money which should have been sent to another he is under obligation to turn it over to the person legally entitled thereto. To say that he is under an implied contract to pay is illogical, however,— for, where is the contract? After all the re quirements above. enumerated have been satis fied, something is still necessary to the making of a legal contract. Either some legally pre scribed formality must be observed, as in the case of a sealed instrument; or, in respect to contracts not under seal, there must be a con sideration. A parole promise, for which no
consideration has passed or is to pass, is a nudum pactum, and is unrecognized by the law. No action can be founded on the same. A pecuniary consideration, however, is not neces sary to support a parole contract Any benefit to the party promising or any loss or detriment to the promisee would be a sufficient considera tion. The benefit need not flow from promisee to promisor; this or the detriment or loss suffered by the promisee may be to the advan tage of a third party and would still be regarded a good consideration. A promise to do or to forbear doing something would be a good con sideration just as would be the deed or the forbearance itself. An offer to perform per sonal services and acceptance of the offer with a promise to pay for the services would make a mutual contract. The confidence reposed in one who undertakes a service may be a suffi cient consideration. Thus, one who W23 en trusted with the removal of wine casks from one place to another, though without pay, was held to have violated a contract when he per formed the task so negligently that damage resulted. On the other hand, the consideration must have some real value. Marriage has been held by our gallant judges to be the most valuable of all considerations; it will give legal support to the most extravagant ante-nuptial promises. The contract of mamage is of any and all classes; it may be ceremonial and formal or merely parole; it is an executed contract in so far as it has resulted in the creation of the marital relation and the legal rights of each of the parties in the property of the other, and it is executory with respect to the obligation of the husband to protect, support and maintain, and of the wife to love, cherish and obey according to the ritual. Contracts bo give are usually en forcible only in certain rigidly defined cases; in England such contracts must be entered into by deed. Gifts and other contracts, the per formance whereof is one-sided, are called unilateral.
Contracts may be considered as principal and accessory. Principal contracts may be subdi vided, according to their objects, into classes as follows : (1) Alienatory, which Includes, besides gifts, all agreements of barter and sale and conveyances of land; (2) permissive use, includ ing loans and lettings for hire; (3) marriage; (4) service, a very large and most important class, including care-taldng by depositories, warehousemen, etc., doing work on material, transportation, professional and domestic serv ice, agency and partnership; (5) negative service, somewhat grudgingly recognized by law as interfering with freedom, and including contracts to withhold competition and other restraints of trade; (6) aleatory, which class includes bets and stakes, not enforced under modern legal systems; lotteries, tabooed in this and some other countries; wager contracts or stock jobbing—but it includes also annuities, bottomry, marine insurance and all other kinds of insurance. Accessory contracts are those like (1) suretyship; (2) indemnity; (3) pledge; (4) warranty; (5) ratification— which create rights intended to be merely auxiliary to other rights. A contract of suretyship must be in writing according to the Statute of Frauds. Contracts are discharged: (1) By mutual agreement ; (2) by performance; (3) by mer ger in, or substitution of, another agreement, also called novation; (4) by operation of law, i.e., prescription, statutes of limitation or be cause of the disability or legal incapacity (through infancy, lunacy, coverture, etc.) of one or more of the contracting parties. The right of action on a contract is assignable but the assignment must be in writing. Generally speaking, simple contracts as opposed to Ispecialties)) may be entirely informal, and need not be written down, either in whole or in part. The English 'Statute of Frauds) passed <'for the prevention of many fraudulent practices, which are commonly endeavored to be upheld by perjury and subornation of perjury, ren ders void any contract for the sale of goods for the price of #10 and upwards, unless there be a part delivery of the goods, or part payment of the price, or some note or memorandum in writ ing of the bargain made and signed by the parties or their agents. The same statute, though it does not avoid the contract, allows no action to be brought on it until it 'has been written down and signed: When it makes an executor personally liable; or guarantees the debt of another; or creates a liability in con sideration of marriage; or relates to an interest in land; or is not to be performed within a year. Another later English statute requires that the reacknowledgment of a debt that has been barred by the statutes of limitation must also be written and signed. The provisions of the 'Statute of Frauds) have been adopted with variations in most of the States of the Union. A written memorandum signed by the parties or their agents is generally required in the cases following: (1) Contracts by their terms not to be per formed within a year from the making thereof. (2) A promise to answer for the debt, default or miscarriage of another person. (3) Con tracts made in consideration of marriage, except mutual promises to marry. (4) Promise of an executor, or administrator, to pay debts of de ceased out of his own property. (5) Contracts for the creation of any interest or estate in land, with the exception of leases for a short term, generally one year. (6) Contracts for the sale of goods above a certain value, unless a portion of the price is paid or part of the goods deliv ered. The required value of the goods sold varies in different States from $30 to $200. In a number of the States no such provision exists. (7) In many of the States declarations or con veyances of trust estates. (8) In many States representations as to the character, credit or responsibility of another person.
Partial performance of the contract is gen erally held to dispense with the necessity for a writing.