EA RN EST. The payment of a sum of money or delivery of a thing or token, upon the making of a contract for the sale of goods, to bind the bargain, the delivery and acceptance of which marks the final and conclusive assent of both parties to the con tract.
The payment of a part of the price of goods sold, or the delivery of part of such goods, for the pur pose of binding the contract. Howe v. Hayward, 108 Masa. 64, 11 Am. Rep. 306.
It has been stated in a general way that the effect of earnest is to bind the goods sold ; and, upon their being paid for without default, the buyer is entitled to them ; hut, notwithstanding the earnest, the money must be paid upon taking away the goods, because no other time for payment is ap pointed; earnest only binds the bargain, and gives the buyer a right to demand, but a demand without payment of the money is void ; after earnest given, the vendor cannot sell the goods to another without a default In the vendee, and therefore if the latter does not come and pay, and take the goods, the vendor ought to go and request him, and then, if he does not come, pay for the goods, and take them away in convenient time, the agreement is dissolv ed, and the vendor Is at liberty to sell them to any other person ; 2 Bla. Com. 447 ; 2 Kent, Corn. 495; 2 H. Bla. 316 ; 3 Camph. 426 ; Neil v. Cheves, 1 Bailey (S. C.) 637.
There is great difference of opinion as to the exact definition of this word. It had a signification at common law sufficiently well understood to warrant its use in the statute of frauds of 29 Car. II. § which makes parol sales of goods, etc., void unless there is a delivery, or the buyer "give something In earnest to bind the bargain, or In part payment" The Roman law included two kinds of earnest, one being a contract prior to that of sale and In dependent of it, which was practically the payment of a sum of money for what we should now call an option to purchase, to be forfeited by the purchaser if he did not buy, while, if the other party was un willing to sell, he must return the earnest and pay an equal amount as a forfeit. The other kind of earnest was that afterwards found In the common law and might be a thing, usually a ring, which either party, generally the buyer, gave to the other as a token. It is important in reading the civil law on this topic to bear in mind these two classes. Benj. Sales § 195. Justinian changed the law on this
subject by providing that either party might re scind the sale by forfeiting the amount of the ear nest money ; Inst. i. 3. 23. 1. At least the text appears to be susceptible of no other meaning, but Pothier maintains that, after earnest, neither party could avoid the obligation ; in this he is not fol lowed by the later civilians. The same controversy has arisen upon a similar provision of the French code. The conclusion above stated is that of Ben jamin, who cites the authorities; Sales, §§ 198-200. In Scotland the word arses is used for earnest, and is usually applied to a small sum given to a servant on hiring, as earnest that the wage will be paid.
The word earnest "has been supposed to flow from a Phoenician source, through the ibbag(G)v of the Greeks, the arra or arrha of the Latin, and the arrhes of the French. . . . The general rule ap pears to have been that expressed in the Institutes III. 23: 'Is qui recusat adimplere contractum, at quidem est emptor, perdit quod dedit : si vero van ditor, duplunt restituere compellitur, licet super ar ris nihil expressum est.' Furthermore, the earnest did not lose that character, because the same thing might also avail as part payment: 'Datur autem arrha vet simpliciter (says Vinnius, on Inst. III. 24) ut sit argumentum duntaxat et probatio erniptionis contractce, veluti si annulus detur ; vel ut simul postea cedat in partem pretii, data aorta pecunia.' From the Roman law, the principles relating to the earnest appear to have passed to the earlier juris prudence of England: 'Item cum arrarum nomine (says Bracton ii. 27) aliquid datum fuerit ante tra ditionem, at emptorem emptionis pcenituerit, et a contractu resilire voluerit, perdat quod dedit : si astern venditorem, quod arrarum nomine recepenit, emptori restituat duplicatum.' Though the liability of the vendor to return to the purchaser twice the amount of the deposit has long since departed from our law, the passage in question seems an authority for the proposition that the earnest is lost by the party who fails to perform the contract. That ear nest and part payment are two distinct things is apparent from the ' 17th section of the statute of frauds, where they are treated as separate acts, each of which is sufficient to give validity to a paroi contract." Fry, L. J., in 53 L. J. Ch. 1056, 1061.