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Elementary Treatises on all the Principal Subjects of the Law



i'he special features of these books are as follows:

1. A succinct statement of leading principles in black-letter type.

2. A more extended commentary, elucidating tlie principles.

3. Notes and authorities.

Published in nguhir octavo form, and bound in buckraiii.



Wack on Bankruptcj.

Black on Cont^ii uctiou and Interpretation of Laws (2d Ed.).

Black on Constitutional Law (3d Ed.).

Black on Judicial Precedents.

Bogert on Trusts.

Burdick on Real Property.

Chapin on Torts.

Childs on Suretyship and Guaranty.

Clark on Contracts (3d Ed.>.

Clark on Criminal Law (3d Ed.j.

Clark on Criminal Procedure (2d i:d.>.

Clark on Private Corporations (3d Ed.).

Cooley on Municipal Corporations. \

Costigan on American Mining Law.

Croswell on Executors and Administi ;t tors.

Dobie on Bailments and Carriers.

Eaton on Equity Jurisprudence <2d Ed.).

Gardner on Wills (2d Ed.).

Gilmore on Partnership.

Hale on Damages (2d Ed.).

Hughes on Admiralty (2d Ed.).

Hughes on Federal Jurisdiction and Procedure (2d Ed.).

McKelvey on Evidence (3d Ed.).

Norton on Bills and Notes (4th Ed.).

Shipman on Common-Law Pleading (3d Ed).

Shipman on Equity Pleading.

Smith's Elementary Law.

Tiffany on Agency.

Tiffany on Banks and Banking.

Tiffany on Persons and Domestic Relations (3d Ed.).

Tvftany on Sales (2d Ed.).

Vance on Insurance.

Wilson on International Law.

Hornbooks on the law of other subjects will be published from
time to time.



Published and foi* sale by
WEST PUBLISHING CO., ST. PAUL, MINN.



CIL^IT— k



HANDBOOK



OF THE



.AW OF CONTRACTS



BY WM. L. CLARK, JR.

ADTHOR OF Clark's handbook of criminal law,
Clark's HAhfOBOOK of corporations, btc, btc.



THIRD EDITION
BY ARCHIBALD H. THROCKMORTON

PROFESSOR OF LAW, INDIANA UNIVERSITY



ST. PAUL

WEST PUBLISHING CO.

1914



COPYBIGHT, 18&4'
BY

WEST PUBLISHING COMPANY



Copyright, 1904

BY

WEST PUBLISHING COMPANY



COPYBIGHT, 1914
BY

WEST PUBLISHING COMPANY
(Clabk Cont.3d Ed.)






PREFACE TO THE THIRD EDITION



The object of the editor in preparing this edition of Mr. Clark's
work has been to make a careful revision of both text and notes.
In the text, a few changes have been made, as, for example, in
the passages treating of offers under seal, consideration, and re-
leases. Numerous additions have also been made, the most im-
portant of which have been for the purpose of a more adequate
treatment of subjects of recent development, such as contracts
in restraint of trade or tending to the establishment of monopoly.
The notes have been expanded, and have been increased in number
to the extent of about twenty per cent. In all, about one thousand
new cases have been cited. These consist principally of cases
^ decided since the publication of the second edition, and have been
:;^ selected, not for their cumulative effect, but because they support
^ new text, or contain statements of new principles or valuable dis-
^ft cussions of old ones. Cases the names of which are printed in
, bold type are those found in Throckmorton's Cases on Contracts,
which was prepared especially for use with this work. Appended
to the notes are citations to the sections of the Century Digest
and the Decennial Digest (Key-No.), where may be found ex-
haustive collections of cases in point. The chapter on Agency has
been omitted, as that topic is now the subject of a separate course
in practically all law schools. It has been thought wise, however,
to retain the chapter on Quasi Contracts, principally for the ben-
efit of the large number of schools which, as yet, have no separate
course in that subject.



Bloominqton, Ind., January 24, 1914. A H T






PREFACE TO THE SECOND EDITION



In preparing the present edition the editor has had the benefit
o^f suggestions made by many instructors who have used Mr.
Clark's book in the classroom. Some new matter has been added,
which has led to the condensation of portions of the original text;
and some cases formerly cited have been omitted to make room
for more recent cases, but the editor has endeavored to retain all

(V)



434886



VI PREFACE TO THE SECOND EDITION

leading cases cited by Mr. Clark. The chapters on Agency and
Quasi Contracts, although perliaps somewhat beyond the scope
of an elementary book on Contracts, have been retained with little
change, for the benefit of schools which do not make these topics
the subjects of separate courses.

The publishers have adopted the device of printing in bold type
the names of cases cited in the notes which are found in certain
of the collections of leading cases. The cases so printed are to
be found in Hopkins' Cases on Contracts, Langdell & Williston's
Cases on Contracts, Williston's Cases on Contracts, Huft'cut &
Woodruflf's American Cases on Contracts, Keener's Cases on Con-
tracts, and Keener's Cases on Quasi Contracts.

St. Paul, June 3, 1904. Francis B. TiFFan\.



PREFACE TO THE FIRST EDITION



In prijparing this work the object has been to present the gen-
eral principles of the law of contract clearly and concisely, with
proper explanations and illustrations, — not to make a digest.
There has been no attempt to be original for the mere sake of
originality. Statements of rules have been freely taken from recog-
nized authorities. So much use has been made of Sir William An-
son's and Mr. Leake's works, that acknowledgment has not always
been made in the notes. A general acknowledgment is therefore
made here. Where matter has been obtained from other sources
it has been duly acknowledged.

Nearly 10,000 cases have been cited. Every one of them has
been personally examined, and is cited because in point, — not be-
cause it has been cited by some other writer, or in some other
case, or because it is found in the digests. A few cases have been
cited for their valuable dicta, or because they collect and discuss
the cases, but in most instances the cited case will be found to
embody an actual decision directly in point. Where a number of
decisions have been cited to the same point, the leading cases and
those best illustrative of the principle involved have been cited first.

St. Paul, Minn., November 15, 1894. W. L. C, Jr.



TABLE OF CONTENTS



CHAPTER I

DEFINITION, NATURE, AND REQUISITES OF CONTRACT IN GENERAL

eectlon Page

1-2. Contract Defined 1-2

3. Agreement 3-5

4. Obligation 6-7

5. Concurrence of Agreement and Obligation 7-11

6. Promise 11-12

7-9. "Void," "Voidable," and "Unenforceable'^ Agreements 12-13

10. Essentials of Contract , 14



CHAPTER II

OFFER AND ACCEPTANCE

11-13. In General 15-17

14-15. Communication by Conduct— Implied Contracts 18-22

16. Communication of Offer 22-25

17. Necessity and Effect of Acceptance 25-26

18-20. Communication of Acceptance 27-34

21. Character, Mode, Place, and Time of Acceptance 34-39

22-23. Revocation of Offer 39—14

24. Lapse of Offer 44-46

25. Offers to the Public Generally 47-50

26. Offer as Referring to Legal Relations 50-57



CHAPTER III

CLASSIFICATION OF CONTRACTS— CONTRACTS UNDER SEAL AND
CONTRACTS OF RECORD

27. Clas.sification of Contracts 58-00

28. Contracts of Record 60-62

29. Contracts Under Seal 62-63

30-32. How Contracts Under Seal are Made 63-69

33. Characteristics of Contract Under Seal 69-74

34- Necessity for Contract Under Seal 74-75



CHAPTER IV

CONTRACTS REQUIRED TO BE IN WRITIXG— STATUTE OF FRAUDS

35-36. In General of Requirement of Writing 76-7S

37. Statute of Frauds— In (icnoral 78-80

38. Contractu within Section 4 yO

Ci^AJtK Cont.(3d Ed.) (vU)



vm



TABLE OF CONTENTS



Section Pag»

39. Promise by Executor or Administrator 81

40. Promise to Answer for Debt, Default, or Miscarriage

of Another 81-89

41. Agreement in Consideration of Marriage 89-90

42. Contract or Sale of Lands 91-95

43. Agreement Not to be Performed within One Year 95-101

44-49. Form Required 101-113

50-51. Effect of Noncomplinnoe 11 t-121

52-55. Contracts within Section 17 ,....,...,..,.. 121-126

56. Acceptance and Receipt 127-130

57-58. Earnest and Part Payment 180-131

59. Form Required . . , 131-132

GO. Effect of Noncompliance 132



CHAPTER V

CONSIDERATION

61-62. Consideration Defined 133-137

63-64. Necessity for Consideration, and Presumption 137-140

65-66. Adequacy of Consideration 140-144

67. Sufficiency or Reality of Consideration 144-145

68-70. Mutual Promise? -Mutuality 145-150

71-73. Forbearance to Exercise a Right 150-156

74-76. Doing What One is Bound to Do 15(5-166

77-78, Impossible and Vague Promises 16G-168

79. Legality of Consideration 168

80. Consideration in Respect of Time— Past Consideration 109-178



CHAPTER VI



CAPACITY OF PARTIES

81. In General 178

82-83. Political Status— States and United States 178-180

84. Foreign States and Sovereigns 181

85-88. Aliens 181-183

89. Convicts 183-184

90. Professional Status 184-185

91-94. Infants— In General 185-192

95-97. Liability for Necessaries 192-199

98. Ratification and Avoidance 200-202

99-lOL Who may Avoid Contract 202-203

102-104. Time of Avoidance 204-207

105-107. What Amounts to Ratification 207-211

108. What Amounts to Disaffirmance 211-212

109. Extent of Ratification or Disaffirmance 212-213

110-111. Return of Consideration 213-217

112-114. Effect of Ratification and Disaffirmance 218-219

115-116. Torts in Connection with Contracts 220-223

117. Insane Persons— In General 223-230

118-121. Ratification and Avoidance 231-233

122-123. Drunken Persons 233-235

124. Married Women 236-240

125-128. Corporations 240-243



TABLE OF CONTENTS



IX



CHAPTER VII



REALITY OF CONSENT

Section Page

r29. In General 244-245

130-131. Mistake 245-257

132-134. Effect— Remedies 257-25S

135-138. Misrepresentation 259-271

139. Fraud 272-290

140-141. Effect— Remedies 290-297

142-144. Duress 297-305

145-146. Undue Influence 305-313



CHAPTER VIII

LEGALITY OF OBJECT

147. In General 314-315

148. Classification of Unlawful Agreements 315

149. Agreements in Violation of Positive Law 315-316

150. Breach of Rules of Common Law 316-320

151. Breach of Statute— Constitutional Law 320-321

152. Prohibition by Statute 321-324

153. Particular Agreements in Breach of Statute 324-348

154-155. Agreements Contrary to Public Policy 348-350

156. Agreements Tending to Injure the Public Service 350-362

157. Nonofficial Corruption 362-363

15S-1G0. Perversion or Obstruction of .lustice 364-369

161. Encouragement of Litigation — Champerty and Maintenance 370-376

162. Agreements of Immoral Tendency 376-377

163. Agreements Tending to Fraud and Breach of Trust 378-380

164. Agreements in Derogation of the Marriage Relation 380-384

165. Agreements in Derogation of Parental Relation 384

166-169. Agreements in Restraint of Trade 384-303

170-172. Unlawful Combinations — Monopolies, Trusts, etc 393-401

173-174. Exemption from Liability for Negligence 401-405

175. Effect of Illegality— Agreements Partly Illegal 405-110

176-177. Object Unlawful but Intention Innocent 410-412

178-180. Object Innocent but Intention Unlawful 412-418

181. Promises to Pay Money Due on Illegal Transactions 418—122

182-185. Relief of Party to Unlawful Agreement 423-432

186. Conflict of Laws— In Space 432-437

1S7. In Time 432-437



CHAPTER IX
OPERATION OP CONTRACT



188. Limits of Contractual Relation— In General 438-440

189-190. Imposing Liability on Third Persons 440-141

191-192. Conferring Rights on Third Persons 442—152

193. Assiirnment of Contracts — In General 452

194. Assigiimont of Liabilities by Act of Parties 453-454

195-197. Assignment of Rights by Act of Parties 454-467



X TABLE OF CONTENTS

Section Page

198. Assignment by Operation of Law 407

199. On Transfer of Interests in Land 467-472

200. On Marriage 472-473

20L On Death 473-474

202. Joint and Several Contracts— In General 475

203-204. Joint Contracts 475-479

205-206. Several Contracts 479-480

207. Contracts both Joint and Several 480-481

208. Contribution between Joint Debtors 481-482



CHAPTER X



INTERPRETATION OF CONTRACT

209-213. Rules Relating to Evidence— In General— Parol Evidence 483^85

214-215. Proof of Document 486-487

216. Evidence as to Fact of Agreement 4S.8-490

217. Evidence as to Terms of Contract 490-501

218-220. Rules of Construction— General Rules 501-511

221. Rules as to Time 512-514

222-223. Rules as to Penalties and Liquidated Damages 515-519

224. Joint and Several Contracts 519-521



CHAPTER XI



DISCHARGE OF CONTRACT

225. In -General 522-523

226-227. By Agreement— In General 523

228-232. Waiver, Cancellation, or Rescission 52,3-526

233-234. Substituted Contract 526-531

235. Form of Discharge by New Agreement 531-534

236. Conditions Subsequent 534-538

2.37, By Performance— In General • 539-543

238. Payment 544-552

239. Tender 552-556

240-241. By Breach— In General 556-557

242. Forms of Discharge by Breach 557

243-244. Renunciation of Contract 557-562

245. Impossibility Created by Party 562-564

246. Breach by Failure of Performance 561-565

247-248. Independent Promises >56,5-574

249-253. Conditional Promises 575-590

254. By Impossibility of Performance 590-598

255. By Operation of Law 599

256. Merger 5M0-600

257. .Mteration of Written Instrument 000-606

258. Proceedings in Bankruptcy 606

259. Remedies on Breach of Contract 60^-607

260-263. Damages OOS-611

264. Specific Performance 611-614

265. Discharge of Right of Action 614

266. By the Consent of the Parties 614-617

267. By Judgment 01 7-619

268-269. By Lapse of Time 619-622



TABLE OF CONTENTS



CHAPTER XII

QUASI CONTRACT

Sertlon p^^^

270. In General 623-627

271 . Money Paid for the Use of Another ,]] G27-630

272. Money Received for the Use of Another '.,'/, 630-643

273. Recovery for Benefits Conferred 1 !*..*. ! G44-651



TABLE OF CASES CITED

(Page 653)

INDKX
(Page 735)




This volume contains
Key- Number Annotations

TKat IS to say, for every f>oint of law whicK is stated or
aiscussea in the text, and in suf){)ort of wIucK cases are
cited, tnere is added to the author's note a citation to tlie
Key-Numoer section or sections in tke Decennial Digest
or m tne K-ey-NumDcr Series, under wIucK all cases di-
rectly involving that t)oint have been digested. A similar
citation to tne Century Digest is given, cxcej)t wKere tlie
t)nncij)le involved is one on wKicK no case law existed
prior to 1897,



Claek Cont.(3d Ed.) (xli)t






HANDBOOK



OF THE



LAW OF CONTRACTS

THIRD EDITION



CHAPTER I



DEFINITION, NATURE, AND REQUISITES OF CONTRACT IN

GENERAL
1-2. Contract Defined.

3. Agreement

4. Obligation.

5. Concurrence of Agreement and Obligatloa.

6. Promise.

7-9. "Void," "Voidable," and "Unenforceable" Agreementa.
10. Essentials of Contract



CONTRACT DEFINED— BROADEST SENSE

L A contract, in its broadest sense, is an agreement whereby one
or more of the parties acquire a right, in rem or in per-
sonam, in relation to some person, thing, act, or forbear-
ance. It may be, in its inception:

(a) Executory; that is, where an obligation is assumed by one

or both parties to do or to forbear from doing some act.
The rights acquired are rights in personam.

(b) Executed; that is, where everything is done at the time of

agreement, and no obligation is assumed, as in the case
of a conveyance of land without covenants, or a sale and
immediate delivery of goods for cash and without war-
ranty.^ Executory contracts when fully performed are
also said to be executed.

1 The propriety of callins sucla an agreement a •outract has been ques-
tioned. Post, p. 8, note 19.

Cl-ABK CoNT.r^il) r.D.) 1



DEFINITION, NATURE, AND REQUISITES OF CONTRACT (Ch. 1



SAME— PROPER SENSE

2. A contract in its narrower, and more proper, sense is an execu-
tory contract. It is the result of the concurrence of agree-
ment and obligation, and may be defined as an agreement
enforceable at law, made between two or more persons,
by which rights are acquired by one or more to acts or
forbearances on the part of the other or others.*

It has been said that "a contract becomes executed when all is
done that its terms require to be performed. Until that situation
is attained the contract is executory." * When we speak of con-
tracts we generally mean executory contracts, and it is of this kind
of contract principally that this work is to treat. A contract in
this sense results from the combination of the two ideas of "agree-
ment" and "obligation." It is that form of agreement, or meeting
of minds, which directly contemplates and creates an obligation;
and the contractual obligation is that form of obligation which
springs directly from agreement. It is necessary, therefore, to un-
derstand clearly what is meant by the terms "agreement" and "ob-
ligation," and how they may or may not concur so as to create a
contract.



2 The following are some of the definitions given In the booljs:

"An agreement enfoi'ceable at law, made between two or more persons, by
which rights are acquired by one or more to acts or forbearances on the part
of the other or others." Anson, Cont. (Sth Ed.) 9.

"Every agreement and promise enforceable by law is a contract" Pol.
Cont. 1.

"An agreement, upon sufficient consideration, to do or not to do a particu-
lar thing." Bl. Comm. 442 ; 2 Kent, Comm. 449.

"An agreement between two or more parties for the doing or the not doing
of some particular thing." 1 Pars, Cont. 6.

"A contract or agreement not under seal may be defined to be an engage-
ment entered into between two or more persons, wherebj', in consideration
of something done or to be done by the party or parties on one side, the
party or parties on the other promise to do or omit to do some act" Chit
Cont 7.

"A contract is a promise from one or more persons to another or others,
either made in fact or created by law, to do or refrain from some lawful
thing; being also under the seal of the promisor, or being reduced to a judi-
cial record, or being accompanied by a valid consideration, or being executed
and not being in a form forbidden or declared inadequate by law." Bish.
Cont § 22. See "Contracts," Dec. Dig. (Key-No.) § i; Cent. Dig. § 1.

3 Leadbetter v. Hawley, 59 Or. 422, 117 Pac. 2S9, 505. See ''Contracts,"
Dec. Dig. {Key-No.) § 6; Cent. Dig. § S.



§ 3) AGREEMENT



AGREEMENT

3. Agreement is the expression by two or more persons, either by
words or by conduct, of a common intention to affect the
legal relations of those persons.* There must be a meet-
ing of two minds in one and the same intention.

From the very nature of agreement the first essential is the con-
sent of the parties. There must be a meeting of two minds in one
and the same intention. In the absence of this element there can
be no agreement, and, therefore, no contract.

Ttvo Parties Necessary

It is manifest that at least two parties are necessary. There
may be more than two, but there cannot be less. It is therefore
impossible for a man to make an agreement or contract with him-
self."^

Distinct Common Intention

It is also essential that there be a distinct intention, and an in-
tention which is common to both parties ; or, as it is sometimes
expressed, the parties must assent to the same thing in the same
sense.* If there is doubt or difference, there is no meeting of
minds, and hence no agreement. If a person, when asked whether
he will do a certain thing, says, "Very possibly," there is doubt,
and no agreement is reached; ^ and if he says he will do something
else, there is a difference, and therefore no agreement.

4 See Anson, Cont. (4th Ed.) 3. "(1) An agreement is an act In the law,
whereby two or more persons declare their consent as to any act or thing to
be done or forborne by some or one of those persons for the use of the others
or other of them. (2) Such declaration may consist of (a) the concurrence
of the parties in a spoken or written form of words as expressing their com-
mon intention, or (h) a proposal made by some or one of them, and accepted
by the others or other of them." Pol. Cont. 1.

5 Thus a promise made by a person in his individual capacity to himself
as executor is void. See GORHAM'S ADM'R v. MEACHAM'S ADM'R, 63
Vt 231, 22 Atl. 572, 13 L. R. A. 676, Throckmorton Cas. Contracts, 3, in
which it is said, per Tyler, J.: "Until the concurrence of the two minds,
there Is no contract." Another reason why a man cannot enter into a con-
tract with himself is because he cannot be under a legal obligation to him-
self. I'ost. T). G. Bee '•Vu)ttracts," Dec. Dip. {Key-No.) 88 11-13; Cent. Dig.

IS \2^Q.

« American Can Co. v. Agricultural Ins. Co. of Watertown, N. Y., 12 Cal.
App. 133, 106 Pac. 720; Luckey v. St Louis & S. F. R. Co., 133 Mo. App.
5S9, 113 S. W. 703. Bee "Contracts^' Dec. Dig. (Kcp-No.) § 14; Cent. Dig. § 48.

7 "I think I might purchase your horse at $2(XJ, the price you ask me," does
not constitute an acceptanc-e of an offer to sell tbe horse at $200. Stagg
V. Compton, 81 Ind. 171. Hee "Contracts," Dec. Dig. (Key-^io.) % 14; Cent.
Dig. 8 J,S.



4 • DEFINITION, NATURE, AND REQUISITES OF CONTRACT (Ch. 1

Communication of Intention

Agreement further imports that there shall be a mutual com-
munication between the parties of their intentions to agree, for
without this neither could know the state of the other's mind.
The law, therefore, judges of an agreement between two persons
exclusively from those expressions of their intentions which are
communicated between them.' Mere uncommunicated intention,
though common to both parties, cannot constitute agreement. If
a person asks another if he will do something, and the latter makes
no reply, there is no agreement, even though he may intend to do
it. A secret acceptance of a proposal cannot constitute agreement;
nor, it is said, can agreement result where the intention of a party
is communicated, not to the other party, but to a third person,"
So, the fact that a party has changed his mind after making an
offer and does not really intend to contract is of no significance
if he does not communicate his change of intention to the other
party before acceptance. And if one party has reasonably led the
other to believe that he is making an offer the other may, by ac-
ceptance, convert such apparent offer into a contract although in
fact no offer was intended. In like manner if a person to whom an
offer has been submitted makes such statement or does such act
with respect thereto as would lead an ordinarily prudent person,
acting in good faith, to believe that the proposition had been ac-
cepted, and the proposer accordingly acts upon that assumption,
a contract results, notwithstanding secret intentions of the offeree
not to accept.^" As we shall see, communication may be by con-
duct as well as by words.

Reference to Legal Relations

An agreement, to be recognized as such by the law, so as to con-
stitute a contract, must be "an act in the law ;" ^^ that is, it must

8 Rodgers, McCabe & Co. v. Bell, 156 N. C. 378, 72 S. E. 817 [cit. Clark on
Contracts, pp. 2. 3]. See "Contracts," Dec. Dig. (Key-No.) § 22; Cent. Dig.
§§ 82-92.

9 Leake, Cont. 8. Intention may be communicated to the agent of a party,
but this is equivalent to communication to the party himself. "In the case
in hand," it was said, "the plaintiff determined to accept. But a mental de-
termination not indicated by speech, or put in course of indication by act
to the other party, is not an acceptance which will bind the other. Nor does
an act which in itself is no indication of an acceptance become such because
accompanied by an unevinced mental determination." WHITE v. CORLIES,
46 N. Y. 467, Throckmorton Cas. Contracts, 1. See "Contracts,^'' Dec. Dig.
{Key-No.) § 22; Cent. Dig. §§ 82-d2.

loNorthrup v. Colter, 150 Mo. App. 639, 131 S. W. 364. See "Contracts,"
Dec. Dig. (Key-No.) § 16; Cent. Dig. §§ 49-56, 71-92.
11 Pol. Cont. 2.



§ 3) AGREEMENT ,5

be, on the face of the matter, capable of having legal effects ; and
therefore, the intention of the parties must refer to legal relations,
so that the courts, which can only deal with legal relations, may
take cog nizan ce of it. It must have reference to the assumption
of legal rights and duties, as opposed to engagements of a social
character and engagements of honor. If a person agrees to sell



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