Selections from Leake's Elements of the law of contracts and Finch's cases on contracts (Volume 1) online

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THE LIBRARY

OF

THE UNIVERSITY

OF CALIFORNIA

LOS ANGELES

SCHOOL OF LAW




Univ. ot California
Witlidrawn



3KLKCXIONS



LEAKE'S ELEMENTS OF THE LAW OF CONTRACTS



FINCH'S CASES ON CONTRACTS



ARRANGED AS A TEXT-BOOK FOR LAW aTUDENTS



WILLIAM A. KEEXER,

Professor of Law, and Dean' of the Faccltt of Law is Columbia Collkok.



VOLUME I.



NEW YORK;
BAKER, VOORHIS & COMPANY.

1891.



T

COPYKIGHT, 1891

By baker, VOORHIS & CO.



JURISPRUDENCE



^

">



^ TABLE OF CONTENTS.



CHAPTER I.

The Formation of Contracts.

yol. i.— page

oection I. Simple contracts arising from agreement 1

II. Contracts under seal 26

III. Contracts of record 3q

IV . The statute of frauds :

§ 1. Contracts within the statute 43

§ 2. Forms and conditions required by the statute of frauds 56
§ 3. The effect of the statute of frauds 73

CHAPTER II.
The Matter of Contracts.

Section I. The consideration 80

II. Impossible contracts 97

CHAPTER III.
Offer and Acceptance (Cases) 113

CHAPTER IV.
Form of Contract (Cases).

Section I. Contract under seal 278

II. Statute of frauds 301

CHAPTER V.
Consideration (Cases).

Section I. Description of consideration 363

II. Necessity of consideration 359

III. Adequacy of consideration 381

IV. Compromise and forbearance 400

V. Unreal consideration 423

VI. Executory consideration 461

VII. Executed consideration 47I



671 0-74



jy TABLE OF CONTENTS.

CHAPTER VI.

Pabties to Contracts.

vol. i.— page

Section I. Of parties in general 500

II. Capacity of parties 512

CHAPTEE VII.
Capacity of Parties (Cases).

Section I. Infants 533

II. Lunatic and drunken persons 553

III. Married women 567

CHAPTER VIII.

Mistake, FRArD a>'d Duress.

/Section I. Mistake 583

II. Fraud 593

in. Duress 613

CHAPTER IX.

Reality of Consent (Cases).

vol. II.— page
Section I. Mistake 617

II. Misrepresentation 655

m. Fraud 759

IV. Undue influence 793

CHAPTER X.
Illegal Contracts 816

CHAPTER XI.
UiiLAwnTL Agbeements (Cases) 846

CHAPTER XII.
Thk Pbobuse 864

CHAPTER XIII.

The Discuaroe of Contracts.

Section I. Discharge of contracts by agreement 884

II. Alteration of written instrument 898

III. Performance of contract 902

IV. Tender 914

V. Brt-ach of contract 921

VI. Accord and satisfaction 926

VII. Payment 93O



TABLE OF CONTENTS. V.

VOL. n.— PAGE

Section VIII. Release 951

IX. Merger and estoppel 958

X. Arbitration and award 965

XI. Statutes of limitation 970

Xn. Set-off 989

XIII. Bankruptcy 998

CHAPTER XIV.
Discharge of Coxtract {Cases).

Section I. By agreement 1005

II. By breach 1052

CHAPTER XV.
Damages 1089

CHAPTER XVI.
Remedies for Breach of Contract (Cases) 1119

CHAPTER XVn.

Assignment of Contracts.

Section I. Assignment by act or agreement of the parties 1146

II. Covenants annexed to estates in land 1157

III. Assignment of contracts by marriage 1169

IV. Assignment of contracts by death 1174

V. Assignment of contracts by bankruptcy 1181



TABLE OF SELECTED CASES.



Adams v. Lindsell 225

Agra and Masterman's Bank, In re.
Ex parte Asiatic Banking Cor-
poration 135
Alderson v. Maddison 691
Alliance Bank o. Broom 413
Anonymous, Year Book, 8 Edw.IV. 1111*
" 3 Hen. VII. 1120
" 21 Hen. VIL 1120
Attwood V. 409

Bailey v. Sweeting 356

Bainbridge v. Firmstone 383

Bannerman c White 680

Bayley v. Merrel 759

Behn v. Burness 655

Bettini v. Gye 1084

Bid well V- Catton 400

Bilborough v. Holmes 1027

Bingham v. Bingham 640

Birkmyr v. Darnell 3.U

Bolton V. Madden 384

Boone v. Eyre, cited at length 1060

Boulton V. Jones GSS

Bret V. J. S. and Wife 382

Britain v. Rossiter 348
Brooks V. Haigh 386, 392
Burke v. South Eastern Railway Co. 181

Burnard v. Haggis 549

Butler V. Butler 576

Byrne v. Van Tienhoven 226

Callisher v. Bischofifsheim 415

Carpenter o. Heriot 793

Carter v. Boehm 716

Cherry v. Heming 344

Clermont v. Tasburgh 78:3

Collen V. Wright I134

Collins V. Blantern 846

Cooke V. Oxley 201

Couturier v. Hastie 635

Cundy v. Lindsay 625

Dent V. Bennett 802

Deposit Life Assurance v. Ayscough 787
Dickinson v. Dodds 215



Dunlop i\ Higgins 231
Dunmore, Countess of, v. Alexander 244

Dutton V. Thompsoii 810

Eastwood V. Kenyon 427

Edwards v. Weeks 1005

Edwards i\ Wickwar 740

Eliason v. Henshaw 153

England v. Davidson 472

Felthouse v. Bindley 148

Fenton v. Emblers 341

Fetherston v. Hutchinson 846

Fisher v. Richardson 40O

Fitch V. Sutton 443

Flight V. Booth 734

Flight V. Reed 488

Foakes v. Beer 450

Foster ». Da wber 1011

Foster v. Mackinnon 617

Foster v. Redgrave n. 539

Fowle V. Freeman 302

Franklin v. Miller 1058

Freeman v. Cooke 706

Freeth v. Burr 1061

Frost V. Knight 1067

Glaholm v. Hays 668

Goddard v. O'Brien 441

Good V. Cheesman 445

Goss V. Lord Nugent 1015

Gray v. Gardner 1033
Great Northern Railway Co. v.

Witham 396

Hadley v. Baxendale 1123

Haigh V. Brooks 386
Harris v. Great Western Railway Co. 165

Harris v. Nickerson 118

Harris's Case 251

Harrison v. Cage 461 .

Hartley v. Ponsonby 436

Harvey v. Youn^c 759

Hebb's Case 248

Henderson v. Stevenson 156

Hoadly v. M'Laine 465



vni



TABLE OF SELECTED CASES.



Holman v. Johnson
Household Insurance Co. v. Grant
Huguenin v. Baseley, Sir S. Romil-
ly's reply "•

Hyde v. Wrench
Hylton V. Hylton

Imp. Land Co. of Marseilles, In re 2-51

546
401



849
259

807
199
796



Jennings v. Rundail
Jones V. Ashburnham



Kaye v. Dutton 479

Kibble, Ex parte 53-3

King V. Gillett 1008

Kingston v. Preston 1076

Lampleigh r. Brathwait 477

Langden v. Stokes 1005

Lavthoarp v. Bryant 305

Leask v. Scott 418

Lee V. Jones 741

Lees V. Whitcomb 463

Lilley r. Doubleday 1143

London Assurance v. Mansel 727

Loyd V. Lee 401

Matthews v. Baxter 566

Mavor v. Pyne 1054

May V. King 1006

Maj-ne's Case 1052

Medina v. Stoughton 761

Molton V. Camroux 553

Montefiori v. Montefiori 702

Morton v. Lamb 1078

Mountstephen r. Lakeman 332

Moyce o. Newington 789

National Savings Bank Association,

7/1 re 248

Nichols V. Rayiibred 461

Nugent V. Smith 1040



Offord V. Davies

Parker v. Ibbetson
Payne v. Cave
Pearce v. Brooks
Piekardr. Sears
Pillaiis V- Van Mierop
Pinnt'l's Case
Pl<'vins V. Downing
Poihlll V. Walter



202

1035
114
853
703

369

440

1022

771



Pordage v. Cole
Proof V. Hines
Pybus V. Smith

Raffles V. Wichelhaus
Ramsgate Victoria Hotel Co. v.

Goldsmid
Ramsgate Victoria Hotel Co. v.

Montefiore
Rann v. Hughes
Reuss V. Picksley
Risney v. Selby
Roberts v. Watkins
Robinson v. Harman
Roscorla v. Thomas
Routledge v. Grant
Ryder v. Wombwell

Sanky v. Golding
Scotson V. Pegg
Shardlow v. Cotterell
Sidenham v. Worlington
Slim V. Croiicher
Smith V. Hughes
Smith V. Reese River Co.
Spencer v. Harding
Sturlyn v. Albany

Tarrabochia v. Hickie
Taylor v. Brewer
Taylor v. Hilary
Taylor v- Laird
Thomas v. Cook
Thomas v. Thomas
Tweddle v. Atkinson

Victors V. Davies



Ward V. Hobbs
Ware v. Chappel
Warlow V. Harrison
Watkins v. Rymill
Week V. Tibold
Welford v. Beazely
Wennall v. Adney, note to
Williams v. Carwardine
Williams v. Jordan
Winn V. Bull
Withers v. Reynolds
Wolverhampton Banking Co., Ex
parte

Xenos v. Wickham



1074
799
568

642

213

213
379
313
761
574
1121
474
207
537

567
457
324
471
709
644
778
116
381

676
195
1020
140
338
363
423

486

762

1073

121, 129

185

195

301

n. 496

113

321

196

1055



859
278



SELECTIONS ON CONTRACTS.



VOL. I.



CHAPTER I.



THE FORMATION OF CONTRACTS.

Section I. — Simple Contracts arising from Agreement.*



Agreement 1

Promise 2

Consideration ....• 3

Form of Simple Contracts by



Agreement 4

Offer and Acceptance of Term? ; ^ , ?
Contracts upon Executed Consi-
derations y. ........ 13*;



The different kinds of contract.— Contracts in the English law
are generally di\ided into three khids, distmguished by their diif erent
modes of formation, — namely, Simple Contracts, Contracts mider Seal,
and Contracts of Record. It is proposed to treat of them m the above
order, commencmg with Simple Contracts, because the rules and
principles relating to the formation of contracts of that kind are of a
less technical and more elementary character than those relating to
the other kuids of contract.

Simple contracts may be divided into two classes, according to the
sources or causes from which they arise, — namely, simple contracts
arising from agreement, and simple contracts arismg mdependently of
agreement, the latter of which classes is commonly known as contracts
implied in law (a).

Agreement. — Agreement consists in two persons being of the
same mind concerning the matter agreed upon. The state of mind or
mtention of a person, bemg impalpable to the senses, can be ascer-
tained only by means of outward expressions, as words and acts. Ac-
cordingly, the law judges of the state of mind or mtention of a per-
son by outward expressions only, and thus excludes all questions con-
cerning intentions unexpressed. It imputes to a person a state of
mind or intention corresponding to the rational and honest meanmg of
his words and actions ; and where the conduct of a person towards
another, judged by a reasonable standard, manifests an intention to



(a) Compare the terms ex contractu

and quasi ex contractu in the civil law ;

see 3 Austin's Jur 133, 223 Maine's

Ancien Law, 344, also Code Civil, 1.

Vol. I— 1 * Ch. I, Sect.



3, t. 3, " Des contrats ou des obligations
conventionnelles " and t. 4, '• Des en-
gagements qui se ferment sans conven-
tion. '
I, ?â–  !, Leake.



/!



2 CHAP. I. FORMATION OF CONTRACTS.

agree in regard to some matter, that intention is established in law as
a fact, whatever may be the real but unexpressed state of his mind on
the matter (a). Agreement further imports that there should be a
mutual communication between the parties of their intentions to agree.
Consequently the law judges of an agreement between two persons exclu-
sively from those expressions of their intentions which are communicated
between them ; and an intention not so communicated though expressed
by other means, as by communication to a third person, is immaterial
to the question of agreement (b). In judging of intention from a per-
son's words and conduct, where his acts are inconsistent with his
words, the former are in general accepted as a more reliable guide to
the mtention than the latter; and the conduct may in some cases
determine the intention even in opposition to the words, — according
to. the .malim, " non quod dictum sed quod factum est mspicitur'''' (c).
.' Agi'eement, as a juridical fact, has a varied and extensive effect in
or^ajting,, modifying, and extinguishing rights throughout all branches
of 'law J and in the law of contracts it is efficacious not only in creat-
ing simple contracts, but also in varyuig and rescinding them. Agree-
ment is also an element m the formation of contracts under seal,
though it appears therein only through certain prescribed formalities.

Promise. — In an agreement as the source of a legal contract, the
matter agreed upon must import that the one party shall be bound to the
other in some act or performance, which the latter shall have a legal
right to enforce. The signification of an intention to do some act, or
observe some particular course of conduct, made by the one party to
the other, and accepted by him, for the purpose of creating a right to
its accomplishment is called a 2'>romise (d). The parties to a promis'e-^
are respectively called the pj^oim'ser and 2>^omisee, which expressions ^
also serve to designate the parties to a contract founded on an agree- '
ment containing a promise. When an action is brought upon such a
contract the promisee and promiser appear respectively in the posi-
tions of the plaintiff and the defendant and are commonly referred to
in those characters.

Promissory expressions reserving an option as to their performance
do not constitute a promise, and are not sufficient to create a contract.
Thus, where an employer engages a servant upon the terms of paymg

(rt) Corn'iHh v. Ahinqton, 4 H. & N. Browne v. ITare, 3 H. «fe N. 484, 495;

54Si; 'JS L. J. I':x. 202; Alexander v. 27 L, J. Ex. 372, 376.

Wormnn, (ill. & N. 100, 112; 30 L. J. (c) Co. Lit. 3Ga; Croft v. Lumley G

Ex. 19H, 202; Van Toll v. Sonth-J'Jast- H. L. C. 672, 722; 27 li. J. Q. B. 321,

em liy. Co., 12 C. B. N. S. 7o; 31 L. J. 337; In re Steer, 3 H. & N. 594; 28 L.

C. P. 241 ; Polhill V. Walter, 3 B. & Ad. J. Ex. 22.

114; Pickard v. .Seer>f, 6 A. «k E. 469; (d) 1 Austin's Jur. 279; Maine's An-

Frn-mnn v. Cooke, 2 Ex. 654. ciont Law, 323; Pothier, Obi, §§ 3, 4;

V>) .Sr;e CVjx v. Troy, 5 B. & Aid. 474; Code Civil, § llOL
Jleinekey v. Eurlc, b E. & B. 410;



SECT. I. SIMPLE CONTRACTS ARISING FROM AGREEMENT. 3

the servant such remuneration as the employer shall please, the
employer is not bound in law to pay anything («). A person, in
answer to a suitor for his daughter, wrote, « I shall allow her the
interest on £2000, whether she remams single or marries ; if the lat-
ter, I may bmd myself to do it, and pay the principal at my death to
her and her heirs." This was construed not to import an intention to
give a binduig promise, and consequently was held not to create a con-
tract (b). Upon the principle that expressions not intended to be bind-
ing do not constitute a promise, it is held that commendatory expres-
sions concerning the quality of goods made upon a negotiation for sale,
without intendmg to warrant the quality, do not create a contract of
warranty; — according to the maxim of the civil law, simplex com-
mendatio non ohligat (c).

Consideration.— It is further necessary in the English law that an
agreement, m order to create a legal contract, should include in the
matter agreed upon, besides a promise, what is called a consideration
for the promise. The consideration may be described generally as
some matter agreed upon as a return or equivalent for the promise
made, showing that the promise is not made gratuitously. A gratuitous
promise, or one agreed upon without any consideration for it, imless
made with ceutain formalities to be noticed presently, is void of legal
effect {d).

The object of requirmg a consideration for a promise, as a condition
of creatmg a legal contract by agreement, seems to be to secure a test
that the parties have the intention of makmg a binding engagement,
and are not using promissory expressions without any serious inten-
tion of engaging themselves to a contract. The fact of bargaining and
giving an equivalent for the promise serves to show that the parties
act with deliberation, and in the expectation that the transaction shall
be bmding.

Gratuitous promises. — Gratuitous promises, which are excluded
by this rule from becoming contracts by mere agreement, are not
altogether prohibited by English law. They may be made legally
binding by using proper formalities, prescribed with the same view of
securing deliberation and certainty, as will be seen in treating of con-
tracts under seal, to which the doctrine of consideration does not

{a) Taylor v. Brewer, 1 M. & S. 290; Morehouse v. Calvin, 15 Beav. 341.

Boherts v. Smith, 4 H. & N. 315; 28 L. (c) Chandelor v. Lopus, Cro. Jac. 2;

J. Ex. 164; and see Bryant v. Flight, 5 1 Smith's L. C. 5tli edit. 160; and see

M. & W. 114; Parker v. Ibbetson, 4 C. Ormrod v. Ruth, 14 M. & W. 651; as to

B. N. S. 346; 27 L. J. C. P. 236. fraudulent representations see post,

(b) Randall v. Morgan, 12 Yes. 67; Chap. VHI, Sect. II, "Fraud."

and see similar examples in Maunsell v. (d) Plowden, 308; Pillans v. Mierop,

Wliite, 4 H. L. C. 1039; Money v. Jor- 3 Bvirr. 1^70.

den, 15 Beav. 372; 5 H. L. C. 185; ^



4 CHAP. I. FORMATION OF CONTRACTS.

apply. In the case of Pillcms v. Mierop {a) the question was raised
whether mere writing was a sufl&cient solemnity to create a valid con-
tract without a consideration, and was decided in the negative.

Executed and executory consideration. — The consideration of a
promise may be executed or executory. An executed consideration is
some act performed or some value given at the time of making the
promise and in return for the promise then made. An executory
consideration is a promise to do or give something in return for the
promise then made. The contract with an executory consideration con-
sists of a promise given for a promise, and comprises two promises.
— the one promise forming the consideration for the other, and con-
versely. With respect to such contracts it is only necessary at present
to observe, that either promise may be regarded for the time being
as the consideration for the other (J).

An agreement satisfymg the above-mentioned conditions, that is to
say, containing a promise made by the one party for a valid considera-
tion and agreed to by the other party, creates a contract by force of
the mere agreement without other formality. The contract so created
is a simple contract.

Form of simple contracts by agreement. — A simple contract is
not required by law to be made in any particular form or with any
particular solemnities, except in a few instances to be noticed presently
where writing and signature are required ; but it is left open to proof
by any facts which are admissible and sufficient to establish the agree-
ment according to the general rules of evidence and procedure. Hence
the words and acts of the parties, which are the evidences of their
agreement, constitute in general the only form in which the contract
created by the agreement appears. Some distinctions and observa-
tions, however, of a general character have been made respecting the
formation of agreements, which require here to be noticed.

Express and implied contracts.— Simple contracts created by
agreement are sometimes distinguished, according to the manner in
which the agreement is formed, as express and implied. The only
difference between an express and implied agreement is in the mode
of substantiating it. An express agreement is proved by express
words, written or spoken, stating an actual agreement \ an implied

(a) 3 Burr. 1670. himself to the other, as in a loan of
(6) Contracts of these two kinds are money; in the latter each of the con-
respectively distinguished in the civil tracting parties binds himself to the
law by the names unilateral and bilat- other, as in the contract of sale. Po-
eral or synallagmatic. In the former tliior, Obi. par. 9; Code Civil, § 1102,
only one of the contracting parties binds 1103; 1 Austin's Jur. 297.



SECT. I. SIMPLE CONTRACTS ARISING FROM AGREEMENT. 5

agreement is proved by circumstantial evidence showing that the
parties intended to contract (a). Agreements may also be of a mixed
character in respect of the mode of making them, that is to say, partly
expressed in words and partly implied from acts and circumstances.
No distinction, except in the natui-e of the proof, arises from agree-
ments being express or impUed.

It is necessary here to notice that the term implied in law is used
to denote the class of simple contracts raised by law from facts and
circumstances mdependent of agreement, and in which an agreement
or promise, if implied at all, is an implication of law only, and has no
existence in fact {b). In the above passages the term « implied " is
used to describe an agreement wliich has an actual existence in fact, but
which appears from circumstantial evidence and not in express terms.

Contracts in writing. — Simple contracts arismg from agreement
are frequently expressed in writing, and are in some instances required
by law to be expressed in writing. They do not on that account con-
stitute a distinct kind of contract, but are subject to the same rules of
law as other simple contracts. The fact of their bemg written, how-
ever, renders them subject also to the rules of evidence relatuig to
written documents ; and the discussion of those rules in their bearing
upon written contracts as a class, including therem other contracts
besides simple contracts, is of sufficient importance to require treat-
ment in a separate space.

Offer and acceptance of terms. — An agreement must necessarily
be made in the form, or what is equivalent to the form, of an offer of
the matter or terms of the agreement on the one side, and an assent
to or acceptance of those terms on the other side, as in the following
examples : — At a sale by auction each bidding is an offer of a price for
the article put up for sale ; and these biddings may be successively
made until one is accepted by the fall of the hammer, when the agree-
ment is complete (c) . The sending an order for goods to a merchant
or tradesman is in effect an offer to purchase ; and the sending the
goods is an acceptance of the offer, and creates a contract of sale {d).
The publication of an advertisement offering a reward for mformation
respecting a loss or a crime is an offer to any person who is able to
give the information asked ; and the acceptance of it by giving such
mformation creates a vaUd contract (e) . The tune tables published

(a) See Marzetti v. Williams, 1 B. & (c) Payne v. Cave, 3 T. R. 148.

Ad. 415, 423, 428; and see 1 Austin's (d) See Harvey v. Johnston, 6 C. B.

Jun 356, 377; Maine's Ancient Law, 295, 304; and see Levy v. Green, 8 E. &
344. B. 575, cited post, p. 8.

(6) See ante, p. L (e) Williams v. Carwardine, 4 B. &

Ad. 621.



ij



6 CHAP. I. FORMATION OF CONTRACTS.

by a railway company are a promise that the trains will run as adver-
tised, offered to all persons who apply in a regular manner to be carried
by them (a).

A correspondence between two parties by letter may contain an
agreement which will produce a contract as bincUng as if drawn up in
articles and signed by the parties as such ; but there must be found
in the correspondence a proposal of terms, met by such final accept-
ance as imports a consent of both parties. The same construction
must be put upon a letter, or a series of letters, that would be applied
to the case of a formal instrument, the only difference between them
being, that a letter or a correspondence is generally more loose and in-
accurate in respect of terms, and creates a greater difficulty in arriv-
ing at a precise conclusion (b).

Offer unaccepted, — An offer unaccepted, or, what amounts to the
same thing, of which the acceptance is not communicated to the party
making it, does not constitute an agreement (c). The defendant sent
to the plamtiif a letter off ermg to guarantee to the plaintiff the. debt
of a third party, and the plaintiff, though he gave credit to the third
I party on the faith of such guarantee, did not communicate his accept-
I ance of it to the defendant ; it was held that there was no contract,
and that the plaintiff could not maintain an action upon the letter (d).
A person wrote a letter to another offering to purchase of him a horse,
and statmg that if he received no answer he should assume that his
offer was accepted, to which letter no answer was returned ; it was
held that the letter unanswered did not constitute an agreement, and
that a person in making an offer has no right to put upon another the
burden of notifying his refusal by letter or otherwise (e).

The contract arising from an agreement dates from the acceptance,
and not from the offer of the terms. Accordingly, under a contract
of sale passing the property in the goods sold, the title of the purchaser'
dates, not from his offer to purchase, but from the acceptance of the
offer ; and therefore he cannot sue for a conversion of the goods com-
mitted before the acceptance though after the offer (/).

Tariance between the terms offered and accepted,— Where

there is a variance between the terms offered and the terms accepted
there is no agreement, or consensus ad idem^ without which there can

(a) Denton v. Great Northern Ry. (d) M'lver v. Richardson, 1 M. & S.

Co., 5 E. & B. 8G0; 25 L. J. Q. B. 134. 557; ilozley v. Tinkler, 1 C. M. & R.

(h) Kennedy v. Lee, 3 Mer. 441, 451; 692.

and see Thomas v. lilackman, 1 Coll. (e) Felthouse v. Bindley, 11 C. B. N.

301; The Jiofj Lead Mininy Co. v. Mon- S. 869; 31 L. J. C. P. 204.

tayue, 10 C. B. N. S. 481, 491; 30 L. J. (/) Felthouse v. Bin dley, supra ; and