- •§1. Place op contract in jurisprudence. 3
- •§ 2. Obligation.
- •§2. Place of contract in jurisprudence. 5
- •§2. Place of contract in jurisprudence. 9
- •§ 2. Acceptance must he absolute, and identical ivith the terms
- •§ I. Agreement,
- •§ 3. II proposal which has not been accepted does not affect the Till accept-
- •§ 5. It proposal may lapse otherwise tJian by revocation as
- •§ 6. Proposal and Acceptance need not necessarily he written Contracts
- •§ 7. A proposal need not be made to an ascertained person,
- •§ I. Contracts of Record.
- •§ 2, Contract under Seal,
- •§ 3. Simple Contracts required to be in writing.
- •§ 4. ConsideItATiaN.
- •§ I. Political or Professional Status,
- •§ 2. Infants,
- •§ 3. Married women.
- •§ 4. Corporations.
- •§ 5. Lunatic and drunken persons.
- •§ 2. MlSbepbesentation.
- •§ 3. Fraud.
- •§ 4. Duress.
- •§ 5. UamuE Influence.
- •§ I. Nature of Illegality m Contract.
- •§ 18 Upon Stock ExchiEknge transactions is well summarised in the
- •§ 2. Effect of Illeoalitt upon Contracts in
- •§ I. Assignment by act of the parties.
- •§ 2. Assignment of contractual rights and liabilities by
- •§ I. Froof of Document,
- •§ 2. Evidence as to /act cf Agreement.
- •§ 3. Evidence as to the terms of the Contract,
- •§ I. General Rales,
- •§ 2. Rvlea 0/ Law and Equity as to Time and Penalties,
- •§ I. Waiver.
- •§ 2. Svhstituted Contract
- •§ 3. Provisions for DischcMrge,
- •§ 1. Position op pabties whebe a Contbact
- •§ 2. Forms of Discharge bt Breach.
- •§ 3. Eemedies fob breach of Contract.
- •§ 4. DiSghaboe of RiOht of AcTion abisiNa
§2. Place of contract in jurisprudence. 9
land with covenants annexed, a sale of a chattel with a war-
ranty, in which contractual ohligations arise incidentally to
the main purposes of the transaction. Where the contrac-
tual obligation can be easily severed from the bulk of the
rights and duties created by the Agreement it is possible to
regard it as a part of our subject : the warranty or the
covenants may be so dealt with. But in the other cases the
obligation is so involved in the mass of rights and duties
created, and bo entirely incidental to the rest of the trans-
action, that it is better to exclude it from the present dis-
cussion.
lO
FOBMATION OF CONTRACT.
Part II.
PAET IL
THE FORMATION OF CONTRACT.
Elements
necessary
to a valid
contract.
Results of
their ab-
sence.
Having ascertained the particular features of contract as
a juristic conception, the next step is to ascertain how con-
tracts are made. A part of the definition of contract is that
it is an agreement enforceable at law : it follows therefore
that we must try to analyze the elements of a conti*act such
as the law of England will hold to be binding between the
parties to it.
These elements appear to consist : —
1. In a distinct communication by the parties to one
another of their intention ; in other words, in Proposal and
Acceptance.
2. In the possession of one or other of those marks which
the law requires in order that an agreement may affect the
legal relations of the parties. These marks are Form, and
Consideration.
3. In the Capacity of the parties to make a valid contract.
4. In the Genuineness of the consent expressed in Pro-
posal and Acceptance.
5. In the Legality of the objects which the contract
proposes to effect.
Where all these elements co-exist, a valid Contract is the
result : where any one of them is absent, the agreement is in
some cases merely unenforceable, in some voidable at the
option of one of the parties, in some absolutely void.
Chap. I. PBOPOSAL AND ACCEPTANCE. II
CHAPTER L
Proposal and Acceptance*
Every expression of a common intention arrived at by Agreement
two or more parties is ultimately reducible to question and ^a^e in^i^^o-
answer. In speculative matters this would take the form, posal and
^ , acceptance.
' Do you think so and so f * I do/ In practical matters and
for the purpose of creating obligations it may be represented
as, ' Will you do so and so ]' ' I will' If A and X agree that
A. shall purchase from X a property worth £50,000, we can
trace the process to a moment at which X says to A, * Will
you give me £50,000 for my property?' and A replies, *I
will/ If A takes a sixpenny book from X*s book-stall the
process may be represented thus. X in displaying his
wares says in act though not in word, 'Will you buy my
goods at my price ]* and A, taking the book with X's cogni-
zance, virtually says * I will/ And so the law is laid down
by Blackstone : * If I take up wares from a tradesman comm. bk. 2.
without any agreement of price, the law concludes that I
contracted to pay their real value/
In order to create a voluntary obligation there must be a
promise binding the person subject to the obligation ; and in
order to give a binding force to the promise the obligation
must come within the sphere of Agreement. There must be
an acceptance of the promise by the person to whom it is
made, so that by their mutual consent the one is bound to
the other. A Contract then springs from the offer of a
promise and its acceptance. Let us now see what forms this
process may assume.
12
FORMATION OF CONTRACT.
Part II.
How pro-
posal and
acceptance
must be
made in
order to
form a
contract.
Illustra-
tions.
See on this
point Xenos t.
Wickham,
L. R. a H. L.
296.
Townson v.
Tickell, 3 B
& A. 37,
The simple and obvious form just described is applicable in
English law only to such contracts as are made under seal.
For in English law no promise, which is not under seal,
is binding unless the promisor obtains some benefit in return
for his promise, and this benefit is called ** Consideration.'
Bearing this necessity in mind, we may say that proposal
may assume two forms, the offer of a promise, and the offer
of an act. Acceptance may assume three forms, simple
assent, the giving of a promise, or the doing of an act.
And thus a contract may originate in one of four ways.
1. In the offer of a promise and its acceptance by simple
assent : which in English law applies only to contracts
under seal.
2. In the offer of an act for a promise, as if a man offers
services which when accepted bind the acceptor to reward
him for them.
3. In the offer of a promise for an act, as when a man
offers a reward for the doing of a certain thing,, which being
done he is bound to make good his promise to the doer.
4. In the offer of a promise for a promise, in which case
when the offer is accepted hy the giving of the promise, a
contract arises consisting in outstanding obligations on both
sides.
Some simple illustrations will explain these forms of pro-
posal and acceptance.
1. A promises X under seal that he will do a certain act
or pay a certain sum. When X has assented to the proposal
both are bound, and there is a contract. Till he has assented
there is an offer, which, as will be noted presently, is irre-
vocable so far as A is concerned, owing to the particular form
in which it was made, but which cannot bind X until he has
assented to it. For a man cannot be forced to accept a
benefit.
2. A man gets into a public omnibus at one end of Oxford
Street and is carried to the other. The presence of the
Chap. I. PROPOSAL AND ACCEPTANCE. 1 3
omnilraB is a constant offer by its proprietors of snch services
npon certain terms ; they offer an act for a promise ; and
the man who accepts these services promises bj his acceptance
to pay the fare at the end of the jonmey.
3. A man who loses his dog offers by advertisement a
reward of £^ to any one who will bring the dog safe home ;
he offers a promise for an act; and when X brings the
dog safe home the act is done and the promise becomes
binding.
4. A offers X to pay him a certain snm of money on
a fatnre day if X will promise to perform certain services
for him before that day. When X makes the promise asked
for, he accepts the promise offered, and both parties are
bound, the one to do the work, the other to allow him to
do it and to make the payment.
It will be observed that cases 2 and 3 differ from 4 in DiiFerence
an important respect. In 2 and 3 the contract is formed contracts
by one party to it doin&r all that he can be required to do on executed
J r J o ^ T. ^ and execu-
under the contract. It is performance on one side which tory con-
makes obligatory the promise of the other ; the outstanding
obligation is all on one side. In 4 each party is bound to
some act or forbearance which, at the time of entering into
the contract, is future : there is an outstanding obligation
on each side.
Where the benefit, in return for which the promise is
given, is done contemporaneously with the promise ac-
quiring a binding force; where it is the doing of the act
which concludes the contract, then the act so done is called
an executed or present consideration for the promise. Where
a promise is given for a promise, each forming the considera-
tion for the other, such a consideration is said to be executory
or fature.
We may now lay down briefly the rules which govern
Proposal and Acceptance, or the communication of the com-
mon intention to create an obligation.
14
FOBMATION OF CONTRACT.
Part II.
Rule I.
Proposal
must be in-
tended to
affect legal
relations.
Roll. Abr. p. 6.
Guthing V.
Lynn, 2 B &
Ad. 932.
Taylor v.
Brewer, i M.
& S. 890.
§ I. The proposal must he intended to affect^ and capable
of affecting, legal relations,
A proposal to be made biuding by acceptance, must be
made in contemplation of legal consequences ; a mere state-
ment of intention made in the course of conversation will
not constitute a binding promise, though it be acted upon by
the party to whom it was made. Thus in the case of
Week V. Tibold, the defendant told the plaintiff that he would
give j£ioo to him who married his daughter with his con-
sent. Plaintiff married defendant's daughter with his con-
sent, and afterwards claimed the fulfilment of the promise
and brought an action upon it. It was held not to be
reasonable that a man 'should be bound by general words
spoken to excite suitors.*^
And a proposal must be capable of affecting legal relations,
that is to say it must not be so indefinite or illusory as
to make it hard to say what it was that was promised.
Thus where A bought a horse from X and promised that
* if the horse was lucky to him he would give £$ more or the
buying of another horse,*^ it was held that such a promise
was too loose and vague to be considered in a court of
law.
And so where A agreed with X to do certain services
for such remuneration as should be deemed right, it was held
that there was no promise on the part of X which was
sufficiently definite to be capable of enforcement. ' It seems
to me,' said one of the judges, * to be merely an engagement
of honour.*