CONTRACT

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CONTRACT ; an agreement or covenant between two or more persons, in which each party binds himself to do or forbear some act, and each acquires a right to what the other promises. Natural law requires that if one person accepts from another a service, he should render to him something in return, whether this be expressly agreed upon, or only implied from the nature of the undertaking. Mutual promises of future good offices also are binding, at least by the natural law, if one of the contracting parties has thereby been induced to act; for, if he does not receive the thing stipulated for, he suffers wrong. We may go further, and say, that confidence in promises is so essential to the existence of social intercourse among men, that even the bare promise of one of the parties, when given and received in earnest, that is, with the idea of its being binding, is not entirely destitute of the force of obligation. In every state, it will be necessary to retain these principles, since the idea of justice implanted in the human mind should not be violated. It is the part of legislation to provide for special cases, to establish certain forms, and to fix, according to rules founded upon experience, the effects of each promise ; also to withdraw from certain contracts their natural obligation, or to determine this in others, in which it is uncertain according to natural law. Such has been the course of the Roman law, which, by its consistency and justice in regard to contracts, has obtained, on the continent of Europe, almost universal authority. In that law, at an early period, a contract (contractus), in the proper sense of the word, was an agreement binding on both parties. It was required to be in a determinate form; and there was an equally determinate mode of impeaching if. A contract was distinguished from a simple pact or promise (pactum) ; and it was a fundamental doctrine, that a simple pact (pactum) would not entitle one to maintain a legal action, but merely to raise an objection in defence. The essential character of contracts in the stricter sense, is founded on the circumstance that such a legal relation is necessary for the most simple social intercourse, and imposes, according to its nature, certain duties. The most simple of these relations arise from a positive act, as the transfer of a thing to be returned (contractus realis), in which the object and extent of the obligation are determined by the real benefit conferred. Such a contract arises from delivering a thing, with or without pay; as, for instahce, a deposit, a mutuum, or a pawn. A determinate form of agreement, however, is not always necessary. Civil intercourse allows another kind of contracts, in which the simple consent of the parties gives obligation to agreements, so that they may constitute the ground of an action (contractus consensuales). Such, according to the Roman law, is sale, hire (as well the lending of a thing as services done for money), partnership, an accepted commission, and the contract for a fee farm rent (emphyteusis). But the same obligatory power, and this in the strictest sense, was allowed, also, to a verbal promise given in a certain solemn form, called a stipulation (contractus verbalis), as well as to a written obligation (contractus literalis, chirograpliarius). The form of a stipulation became continually more lax, approaching nearer to a simple promise, and, at last, amounted to nothing more than this, that he who wanted to bind another (stipulator) asked him, in a form of his own choosing, "Do you promise to give me such a thing?" and the other, who was to be bound, answered, " I promise it." It is obvious that, in this way, every simple promise (pactum) could be made actionable, and that the alteration, in modern times, in the law of some parts of Europe, which admits of an action upon every compact, amounts, in fact, only to this, that the form of a stipulation has become even more lax, so that there is no longer any necessity for the claimant (promissarius) to commence with his question, but the compact can as well begin with the declaration of the party under obligation (promissor). These forms of contracts are, in their essential parts, settled ; and the legal relation, together with the action arising from it, has a fixed name (contractus nominati). But other relations, also, as exchanges of things and services, service for service, gift for gift, gift for service, service for gift (do ut des, facio ut facias, do ut facias, facio ut des), gave rise to rights and obligations, but in such diversified ways, that an appropriate form of action could be framed only from the statement of each particular case (actio in factum pr&scriptis verbis); and there were, accordingly, no technical terms adapted to such variously combined relations. Hence arose the contractus innominate which were considered as real contractsso far only that the actual performance of one party entitled him to an action; and, even in this case, there was not an absolute obligation on the other party to the performance of his part of the Contract; but, in most cases, simply the duty of restoring what had been received. But the modern law creates here (though not without dispute) a perfect duty to perform the very thing promised. Finally, the Roman law attributed the effect of actionable obligations even to some partial promises and agreements (pacta); not only to those which were added as appendices to other real contracts (pacta adjccta), but also to some of a different kind. These were either declared obligatory by a formal law, or were admitted as grounds of action by the pretor (pacta legitima and pr&toria). Most of the technical designations of these are indeed new, yet the ancients had several, as, for instance, re, consensu, verbis, Uteris, contrahitur obligatio, &c. In this way donations, promises of dowry, promises of interest, acknowledgments of debt, &c, were made actionable. It is always implied in the idea of a contract, that the real cause of its obligation is founded on some particular rational object of the par.ty who promises (causa civilis), and that mere promises and agreements are not binding. Even stipulations, which have no ground, or an unlawful one (nullam out injustam causam), are valid, indeed, with regard to their form, but are open to the objection of intrinsic groundlessness, except when they are donations. With these views were also connected certain divisions of these legal relations, and of the actions arising from them, according to which, in some cases, the object of the obligation was strictly enforced (actiones stricti juris) ; but, in others, the liability could be settled only by the decree depending upon all the circumstances of the special action before the court (actiones bonce fidei). Other divisions refer to the relation of the parties, as, in some of them, the obligation is only on one side, as to return the thing received in lending (contractus unilaterales); and, in others, there are reciprocal obligations, as in a sale, a partnership (contractus bilaterales); or they concern the subject of the contracts, whether relating to property or to some other object. To the conditions necessary for the fonnation of a contract belongs the consent of the contracting parties. Accordingly, when this is wanting, either because the parties were not capable of taking upon themselves the obligation (as minors, madmen, prodigals), or because the contract wns founded on an error (an innocent error on the side of the party making the mistake, or one occasioned by the deceit of the other party), or when the engagement was extorted by force and fear, there can be no valid contract. To contracts may also be added conditions, which either delay or dissolve them, and also precise determinations of time, place and object (modus), which coincide, at times, with the condition. A contract must be possible and legal, else it is without force. No one can be obliged to undertake what is impossible, or decidedly immoral (causa turpis). According to the Roman law, it is a matter of dispute, whether an obligation to do something or to leave something undone gives a right to compel a specific performance, or whether it gives merely a claim to indemnification. The English and French laws have adopted the latter doctrine (toute obligation de faire ou de ne pas faire se resoud en dommages et interets). Obligations resembling express contracts arise if one person does something for another, without the knowledge and desire of the latter; so that the latter is bound to give a recompense for what has been thus beneficially done for him (obligatio quasi ex contractu). In this case, there is no consent existing, neither is it supposed, but the consent could not have been refused, or it was not necessary. Such relations, resembling express contracts, arise in cases of guardianship, between guardian and ward, by the receipt of money for a nonexisting debt by mistake, the amount of which ought to be restored; so by a beneficial performance of some business for another, without any actual commission from him, where the circumstances raise a presumption of obligation. Thus far the present article refers to the general theory of contracts, founded either upon natural justice or the principles of the civil and Roman law. A short account will now be added of the nat are and obligation of contracts by the common law; that is, by the law which regulates this subject in the jurisprudence of England and America. The original basis of the common law, as to contracts, was, without doubt, the civil or Roman law; but it has undergone some modifications in its incorporation into our jurisprudence. A contract may be defined, in the common law, to be an agreement made in one form, between parties capable of contracting, for a legal object or purpose, and upon a sufficient consideration. It must be an agreement or mutual bargain, vol Mitary, and without force or fraud; and therefore it includes an assent given bona fide. The notion of an assent includes a physical and moral power of assenting, and the deliberate and free use of this power. And this leads us to the consideration of the next point, which is, that it must be between parties capable of contracting. Upon principles of universal law, an infant, having no discretion or moral power of perception, cannot make a contract; nor can a person who is insane or mad; nor an idiot, or person laboring under such mental debility or such natural defects as prevent a just exercise of reason. The common law recognises these principles, and therefore it treats as nullities all contracts entered into by such persons ; it treats in like manner contracts made by aged and imbecile men, whose understanding has become so weak and inefficient that they are liable to imposition, and cannot act with a reasonable discretion. In respect to persons who enter into contracts in a state of intoxication, the old law, with a view to deter men from such practices, did not hold the contracts void, so that the party might set them aside at his own suit, upon the ground that no man should be allowed to stultify himself, or allege his own vice to excuse his nonperformance of a contract. But this principle, if it is now acted upon at all, is received with great modifications; and, if there be any undue advantage taken of the party's situation, he will be relieved. The common law, indeed, seems originally to have disabled a party who was insane from avoiding, after the recovery of his reason, any contract made during his insanity; partly upon the maxim that no man should be permitted to stultify himself, and partly upon the supposed danger, in admitting such defences, of overturning deliberate and solemn contracts. But his legal representatives, after his death, were always allowed to avoid them; and when he has a guardian appointed, the guardian may avoid his contracts in a proper suit; so that the doctrine, if it now exists (and it has been much questioned), is more a matter of form than of substance. The general inclination, in American courts, has been to allow the party himself to show that the contract was void by reason of insanity, &c. In respect to who shall be deemed infants or minors, the laws of every civilized country have provided a certain age, at which persons shall be deemed capable of all sorts of contracts, and for ail purposes sui juris. The time differs in VOL. in. 43 different countries, and different times are assigned for different acts. By the common law, all persons are infants until twentyone years of age, and then are considered as of full age for all purposes whatsoever. By the same law, the ages of males and females are different for different purposes. A male at fourteen is at years of discretion, and may consent or disagree to marriage, may choose his guardian, and, if his discretion is actually proved, he may make a testament of his personal estate, though not of his lands; at seventeen, he may be an executor. A female may, at seven years, be betrothed hi marriage; at nine, is entitled to dower; at twelve, may consent or agree to marriage; at fourteen, may choose a guardian; at seventeen, may be an executrix; and at twK,rdyone, is of full age for all purposes. Both males and females are capable of making contracts for necessaries during their minority ; but, in general, other f/ontracts do not bind them, unless manifestly for their benefit; and, though contracts made with them cannot be avoided by the other side, the infants themselves, when they arrive at age, may ratify them; for, as to them, they are generally voidable, and not void. A contract, too, must be for some legal object or purpose ; that is, for something which the law allows to be done or omitted; for it is a general principle, that all contracts which are prohibited by law, whether they involve moral turpitude, or are merely prohibited by positive law, are void and incapable of binding the parties. A contract, too, must have a sufficient consideration to support it. Considerations are either valuable in themselves, or good. A good consideration is such as flows from blood or natural affection between near relations, such as parent and child. In respect to such considerations, it may be said, that they are, as between the parties, generally sufficient to support an executed contract; that is, a contract which has completed its operation by a transfer of the thing, such as a gift or grant, or assignment and delivery of a thing. But where the rights of third persons, such as creditors, intervene, such gifts, or grants, or assignments, are not always valid, as against them. For a man must be just before he is generous. But in respect to good con^ siderations, if the contract is not executed, but is a mere chose in action, such as a promise to pay money, or to deliver goods, or to give a thing, sueh a contract has no legal obligation, and cannot be enforced in a suit, in a court of law. It is generally deemed a voluntary* promise or naked pact. A valuable consideration is one arising from, or on account of, money or goods received, or services done, or other contracts of reciprocal benefit, or marriage, or a loss or injury, or forbearance of right. In all such cases, if a promise is made on any of these or the like accounts, it is binding in law. If A promises to pay ten dollars to B for goods sold to A, or money borrowed, &c, it is a binding contract. So if A promises to pay B a debt due from C, if B will forbear, for a certain time, to sue C, it is a binding contract. So, if A has done an injury to B's lands or goods, and promises to indemnify him, it is a good contract. In all these cases, there is a mutuality of interest or considerationa quid pro quo. But a mere moral obligation creates no contract; as if A promises to give a pauper his clothes, or to supply him with necessaries. But though, in general, a contract is not binding, unless made upon a valuable consideration, there are certain forms in the common law, as there are in the civil law, by which a party may bind himself without such consideration. If, therefore, A enter into a written contract, under his seal, with B, to pay him a sum of money, or do any other act, there the common law considers the deed of such high solemnity, that it will hold it binding. It deems it as importing a valuable consideration, or rather will not suffer the contrary to be proved, and acts upon the solemnity of the instrument as, of itself, of paramount obligation. There are certain contracts which the common law requires to be done in a particular mode to give them validity, and therefore another requisite is, that the contract must be in due form. There are certain things, which can be conveyed or transferred only by some written instrument or deed, such as incorporeal hereditaments, as rights of ways, easements, &c.; and, generally speaking, lands can now be granted only by deed. There are, also, many cases specially provided for by statutes, in which contracts are not binding, unless reduced to writing, and signed by the party or his agent. Among these are contracts for the debts of another, contracts respecting lands, and contracts respecting goods beyond a certain value. Indeed, many of the regulations, here referred to as part of the common law, are, in the different states of the American union, variously modified by the local jurisprudence, and, principally, by statutes.