LAW OF CONTRACTS.
C. C. LANGDELL,
DANE PROFESSOR OF LAW IN HARVARD UNIVERSITY.
BOSTON: LITTLE, BROWN, AND COMPANY.
Entered according to Act of Congress, in the year 1880, by
C. C. LANGDELL,
In the Office of the Librarian of Congress, at Washington. ISBN: 0-8377-0809-5
Entered according to Act of Congress, in the year 1880, by
C. C. LANGDELL,
In the Office of the Librarian of Congress, at Washington.
UNIVERSITY PRESS: JOHN WILSON AND SON, CAMBRIDGE.
PREFACE TO THE SECOND EDITION.
THE following pages were first published as a supplement to the second edition of the writer's collection of Cases on Contracts. It was for that purpose that they had been written, and there was then no thought of issuing them in a separate form. It was soon found, however, that many persons who wanted the Summary did not care for the Cases, and hence the publishers felt compelled to furnish the former separately in some shape ; and as it was not fit to be sold separately in the form in which it was first published, they decided to republish it in its present style.
It must be confessed that the title-page does not give a very correct idea of the contents of the volume. On the one hand, though called a Summary, it contains a much fuller development of the topics embraced in it than is contained in any treatise with which the writer is acquainted. On the other hand, though called a Summary of the Law of Contracts, it embraces only a part of the subject of Contracts, namely, so much of it as is covered by the Cases before referred to. While, therefore, a part of the
title leads the reader to expect less than he will find, the remainder of it leads him to expect more. Still, the writer has been unable to find a title which seemed less open to objection. As to the scope of the work, it seemed impossible to indicate its limits in a title-page. As to the term Summary, it has at least the recommendation of not leading the reader to expect too much; and it was suggested by the fact that, in its relation to the Cases to which it was designed as a supplement, the work was a Summary; that is, it was a concise statement and exposition of the doctrines involved in those cases.
The scope of the work is sufficiently indicated by the Table of Contents, but a reference to the volume of cases will render it still more clear. The cases are arranged in three chapters, entitled respectively Mutual Consent, Consideration, and Conditional Contracts. The following titles in the Summary, namely, Acceptance of Offer, Bidding at Auction, Mutual Consent, Offer, and Revocation of Offer, correspond to Chapter I. of the Cases; the title Consideration in the Summary corresponds to Chapter II. of the Cases ; the following titles in the Summary, namely, Concurrent Conditions, Conditions, Conditions Precedent, Conditions Subsequent, Demand, Dependent and Independent Covenants and Promises, Notice, and Performance of Conditions, correspond to Chapter III. of the Cases; and the two remaining titles in the Summary, namely, Debt and Unilateral and Bilateral Contracts, treat of questions
which are common to all the subjects to which the Cases relate.
Since the book as a whole was to be only a fragment, it was not thought worth while to divide it into chapters and sections, to be arranged in consecutive order, but the easier method was adopted of treating the different subjects separately and independently, and arranging them in alphabetical order. The arrangement of the subjects, therefore, indicates nothing as to the order in which they should be read, and every reader must exercise his own taste and judgment as to the order in winch he will read them, or whether he will read them in any order.
As the Summary was written for the sake of the Cases, and the two were designed to be companions, the Cases constitute the chief authority cited in the Summary. When other authorities are cited, it is for some special purpose, it being no part of the writer's object to make a collection of authorities upon the subjects discussed. For the same reason, the cases are constantly cited and discussed without any statement of them, it being always assumed that the reader has them before him, and that, if he is not already familiar with them, he will make himself so.
The present edition differs but little from the first edition, except in form. Even in the few instances in which the writer's views have undergone a change or modification since the first edition was printed, the text has generally been left as it was first Written,
and the change of view has been indicated by a note. Instances of this will be found at §§ 48, 60, 77, 94, 177. In one instance only the text has been materially changed, namely, in the last paragraph (186) of the first edition, which in the present edition has been rewritten and expanded into two paragraphs (186, 187).
CAMBRIDGE, June, 1880.
ACCEPTANCE OF OFFER.......... 1
BIDDING AT AUCTION........... 24
CONCURRENT CONDITIONS......... 26
CONDITIONS PRECEDENT.......... 37
CONDITIONS SUBSEQUENT......... 53
1. Adequacy of Consideration....... 67
2. Consideration and Motive....... 77
3. From whom the Consideration must move . . 79
4. To whom the Consideration must move ... 80
5. Mutual Consent as an Element of Consideration 82
6. Relation in Time of the Consideration to the
7. Moral Consideration......... 89
8. Consideration Void in Part....... 101
9. Mutual Promises.......... 102
10. Executed Consideration........ 112
DEPENDENT AND INDEPENDENT COVENANTS AND
PERFORMANCE OF CONDITIONS .......205
REVOCATION OF OFFER..........240
UNILATERAL AND BILATERAL CONTRACTS ... 248
TABLE OF CASES CITED.
Adams v. Lindsell 10, 14, 15, 151, 181
Alcock i'. Blofield .... 104
Alliance Bank v. Broom . . 79
Anonymous (Covvp. 128) . 48
" (cited in Dyer,
272) ... 94 " (4 Leon. 50) . 33
(2 Lil. Pr. Reg.
286) ... 150 (Palm. 160) . 66 (2 Roll. 238) . 171 (1 Sid. 31, pi. 9) 88 (Y. B. 18 Edw. IV. 18 a, pi. 23) .... 150 (Y. B. 1 Hen. VII. 5 a, pi. 8) .... 150 (Y. B. 15 Hen. VII. 10b,pl. 7) 126, 133, 140, 144
Armitage v. Insole .... 41 Atkins v. Hill .... 71, 75 Atkinson v. Settree ... 54 Atkinson v. Smith .... 115 Austin v, Jervoyse . . .23, 171 Averill v. Hedge . 14, 153, 154
Bach v. Owen.....112
Baily v. Croft.....84
Bainbridge v. Firmstone . . 64
Ball v. Peaks.....22, 174
Bankart n. Bowers . . . 39,119 Banks and Thwarts' Case . 104 Barber v. Fox .... 48, 56 Barker v. Halifax ... 92, 94 Barnard v. Simons .... 54 Barnes v. Hedley . . 68,71,76 Barton v. Shurley ... 92, 94 Batterbury v, Vyse . . 36, 171
Baxter v. Read.....94
Beany v. Turner . . 141, 144 Beaumont v. Reeve ... 78 Beecher ». Conradt . 136, 176 Behn v. Burness 28, 33, 112, 119 Beresford v. Goodrouse . . 150
Best v. Jolly......80
Bettini a. Gye.....162
Bettisworth v. Campion 119, 141 Bidwell !>. Catton .... 58 Binnington v. Wallis ... 78 Birks ». Trippet .... 104 Blackwell v. Nash . 140, 143, 144 Blandford v. Andrews. . . 171 Boone v. Eyre . . 38, 111, 112 Bornmann ». Tooke . . 164, 177 Bosden ». Thinne . . . 92,94 Boston & Maine R. R. v
Bartlett . . . 152, 178, 179 Bourne v. Mason .... 62 Boydell v. Drummond . . 73 Bradburne v. Bradburne . 80 Bradbury v. Morgan ... 4 Bradford v. Roulston ... 93 Bradford p. Williams 163,167,168 Bradley v. Toder .... 150
Bragg v. Nightingale . . 37, 116 Braunstein v. The Accidental Death Ins. Co. . . 35, 36 Bret v. J. S. and Wife . 54, 84 British and American Tel.
Co. v. Colson . . 6, 14, 15, 152 Brocas' Case ... 23, 140, 144 Brooks y. Ball .... 54, 66 Bussey 0. Barnett .... 183
Cadwell v. Blake ... 41, 113
Cage v. Acton.....44
Caines v. Smith. . . .171,172
Callisher u. Bischoffsheim . 57
Callonel v. Briggs 22, 24,118,142,
Campbell v. Jones . . 110, 129 Capen v. Barrows .... 186 Carpenter v. Cress well . 110,129
Carter v. Ring.....104
Case of an Hostler .... 104 Caton v. Dixon . . 140, 143, 144 Christie ». Borelly .... 107 Clarke v. Watson . . .36, 157
Clerke v. Child.....150
Clipsham v. Vertue . . . 164 Cock v. Curtoys .... 164
Coggs a. Bernard .... 101
Cole's Case ...... 150
Cole v. SHallett . . 140, 144, 164 Collins v. Gibbs .... 22, 70
Colston«. Carre .... 80
Constable v. Cloberie . 164, 177 Cook v. Wright ... 57, 76, 79 Cooke v. Oxley . 10, 11, 178, 182 Coombe v. Greene .... 41
Cort v. Ambergate, &c. Railway Co.......171
Cripps v. Golding .... 80
Crisp v. Gamel.....80
Crisp and Golding .... 80
Crow v. Rogers.....62
Crowther v. Farcer . 65, 87, 88 Cunningham v. Morrell . . 131 Cutler v. Southern .... 150
Dallman v. King .... 36 Davidson v. Gwynne . . . 164
Davis 0. Dodd.....78
Dawson v. Dyer ... 33, 38 Dearborn v. Bowman ... 78
Deeks v. Strutt.....75
Dicker v. Jackson 122,124, 145, 164, 177
Dickinson v. Dodds . 9, 178, 181 Dixon v. Adams .... 54 Docket v. Voyel .... 94 Doughty v. Neal .... 109 Dunham v. Gillis .... 186 Dunham v. Pettee . 133, 147, 158 Dunlop v. Higgins . . 14, 15, 152 Dunmore, Countess of, v. Alexander ......14, 16
Dusenbury v. Hoyt ... 72 Dutton v. Poole .... 62, 63
Eastwood v. Kenyon 71, 74, 76, 79 Eccleston v. Clipsham . . 186
Edwards v. Baugh ... 50, 88 Eliason v. llenshaw ... 17 Ellen v. Topp . . . . 41, 177
Elliott v. Blake.....42
England v. Davidson ... 54 Estrigge and Owles' Case 59, 104
Evans v. Powis.....55
Exchange Bank v. Rice . . 03
Ferry v. Williams .... 170
Field ». Dale......94
Fillieul v. Armstrong . . . 102 Fitch v. Snedaker .... 3 Fletcher v. Pynsett . . . 150
Flight v. Reed.....76
Forth v. Stanton .... 66 Fothergill v. Walton . 122, 166 Franklin v. Miller .... 128 Freeman «. Taylor 164,166, 167 Freeth v. Burr.....128
Gable v. Morse.....150
Gale «. Golsbury .... 94 George v. Harris .... 186
Gibbons 0. Prewde .... 144 Gibbs ». Southam .... 104 Giles 0. Giles ... 23, 135, 185 Glaholm 0. Hays .... 33 Glazebrook v. Woodrow. . 136 Goodisson w. Nunn . . .143, 145 Gower 0. Capper . . .81, 141 Grafton v. Eastern Counties
Grant v. Johnson .... 122
Graves v. Legg.....33
Gray v. Gardner .... 44
Haigh v. Brooks .... 54 Hall v. Cazenove .... 177
Hall v. Flocton.....55
Harris's Case . . 6, 14, 16, 17
Harris 0. Ewer.....95
Harrison v. Cage .... 82 Harrison 0. Mitford . . . 104
Hart v. Miles.....68
Hatch v. Trayes .... 50 Havelock 0. Geddes 110,128, 177 Haverleigh v. Leighton . . 160 Hawes v. Smith .... 64, 70 Havvkes v. Saunders . . 71, 75 Hayes v. Warren ... 93, 96 Hays i). Bickerstaffe . . 33, 38 Head u. Diggon .... 10, 11 Hebb's Case ... 6, 11, 14, 15 Henderson v. Stobart ... 88
Herring v. Dorell .... 54 Hesketh-0. Gray .... 157
Hill 0. Wade......104
Hoare 0. Rennie. . . 137, 164 Hodge 0. Vavisor .... 94 Holder 0. Taylor 33, 116, 140, 146 Holdipp v. Otway . 35, 171, 176 Holmes v. Twist .... 150 Holt v. Ward Clarencieux . 82 Hopkins v. Logan . . 50, 57, 93 Hotham 0. East India Co. 43,
171 Household Fire Ins. Co. 0.
How let's Case.....94
Hunlocke 0. Blacklowe . 38, 110,
129 Hunt 0. Bate......94
Hunt 0. Livermore .... 117 Hyde v. Wrench .... 18
I. Ilsley 0. Jewett.....78
Jackson v. Thornell . . . 150 Janson v. Colomore ... 94 Jennings 0. Brown .... 77 Jeremy 0. Goochman ... 94 Jonassohn v. Young . 164, 177 Jones 0. Ashburnham 56, 64, 77 Jones 0. Barkley 23,127, 133,143, 171, 173, 176 Judson 0. Bowden . 110,116,129
Kane 0. Hood.....136
Kayo v. Dutton.....93
Kelly, In the matter of . . 155
Kennedy 0. Lee..... 9
Kent 0. Pratt.....54
King 0. Atkins.....150
King v. Mill......74
King 0. Sears ... 67, 80, 97 Kingston v. Preston 23, 127, 143
Laird 0. Pirn......176
Lampleigh 0. Brathwait 92, 94, 95
Lancashire o. Killingworth . 22,
171, 174, 176
Large 0. Cheshire . 22, 171, 176
Lea 0. Exelby 23,141,142,144,
Lee 0. Muggeridge . 71, 76, 79 Littlefield 0. Shee ... 71, 78 Llewellyn v. Llewellyn . . 88 Lock 0. Wright .... 22, 117 Longridge v. Dorville . 54, 56, 88 Loring 0. City of Boston 154, 155 Lowber 0. Bangs .... 164 Lowe and Kirby .... 104
Loyd 0. Lee......56
Lynn 0. Bruce .... 88
MacAndrew v. Chappie . . 164 Mactier v. Frith 7, 8, 14, 15, 152,
153 Makin v. Watkinson . . . 150
March v. I'igott.....89
Marsden v. Moore .... 147 Marsh and Rainsford ... 94 Martin v. Mitchell .... 11
Martin w. Smith.....170
Martindale ». 'Fisher 107,141,144 Mason w. Harvey .... 33 Mattock ». Kinglake 124,145,146,
Mayne's Case . . 171, 172, 173 McCulloch v. Eagle Ins. Co. 14,
Merrit v. Rane.....142
Meyer v. Haworth .... 78 Mills v. Wyman .... 74 Milner v. Field . . 36, 157, 171 Moggridge v. Jones . . . 117 More v. Morccomb . . . 157 Morgan v. Birnie .... 36
Morgan v. Gath.....118
Morton v. Burn.....56
Morton v. Lamb 123,133,143, 145 Munro v. Butt.....165
Nash v. Armstrong ... 88 Neale v. Ratcliff . . 33, 37, 40, 70 Newson v. Smythies ... 38 Nichols v. Raynbred . . 81, 141 Northrup v. Northrup . . 23, 133
Offord f. Davies .... 4 Oldershaw v. King ... 69, 79 Oliver v. Fielden .... 33 Oliverson ». Wood ... 94, 96 Ollive v. Booker ... 28, 33
Payne v. Cave .... 11, 19 Payne v. Wilson ... 59, 77 Pearle and Edwards . . 92, 94
Pecke and Mithwolde . . 104
Peelers v. Opie 23, 125, 140,141,
144, 146, 171,174, 176
Phillips v. Clift.....109
Phillips v. Fielding . . 170,174 Pickas v. Guile .... 64, 68 Pillans v. Van Mierop . 50, 79
Poole v. Hill . . . 170, 174, 176
Pordage v. Cole 23, 140,143, 145,
Potter v. Sanders . . . . 9, 14 Poussard v. Spiers . 42, 158, 162 Powle v. Haggar .... 150
Price v. Eastou.....62
Rae v. Hackett.....41
Raffles v. Wichelhaus ... 148 Ramsgate V. H. Co. v. Golds-mid ......154, 156
Rann v. Hughes ... 50, 75, 93 Rawson v. Johnson 133, 143, 174 Raymond v. Minton . . . 109 Raynay v. Alexander . . 41, 171
Read v. Baxter.....64
Reynolds v. Pinhowe . . 54, 88 Riches and Briggs . . 64, 68, 70 Riggs f. Bullingham . . 92, 94 Ripley v. M'Clure .... 171 Ritchie v. Atkinson . 163, 177 Roberts v. Brett . 127, 13(5, 177
Roll v. Cozens.....130
Roper v. Lendon ... 33, 115 Roscorla v. Thomas ... 93 Routledge v. Grant . 10, 17, 148 Rumball v. Ball .... 104
S------v. F------14, 15, 16,151,180
Sandhill v. Jenny .... 94
Sands ». Clarke.....172
Saunders v. Johnson . . . 186 Scotson v. Pegg . . 54,64, 84 Seeger v. Duthie ... 35, 164
Selman v. King.....104
Semmes v. Hartford Ins. Co. 43 Semple v. Pink .... 59, 79 Shadforth o. Higgin ... 157
Shadwell v. Shadwell . 54, 68, 84
Shales v. Seignoret 140, 171, 174,
Shippey v. Henderson . . 72 Short v. McCarthy .... 73 Short v. Stone . . . 171, 172 Sibthorp v. Brunei 23, 145, 146 Sidenliarn and Worlington . 94 Simpson v. Crippin . 164, 167
Slater v. Stone.....37
Smart v. Chell.....88
Smith w. Algar .... 56, 80 Smith a. Monteith ... 54, 58 Smith v. Wilson .... 176 Smyth v. Holmes .... 88 Spanish Ambassador v. Gif-
Spencer v. Durant .... 186
Spiller o. Westlake ... 117
St. Albans, Duke of, v. Shore 158,
159, 169, 170
Standley v. Hemmington . 170 Staunton v. Wood .... 134 Stavers v. Curling ... 38, 164 Storer v. Gordon 23, 42, 122, 158, 166
Strangborough and Warner 81 Street v. Blay . . . 112, 119 Stubbs v. Holywell Railway
Sturlyu v. Albany . . 48, 54, 66
Tarrabochia v. Hickie . . 164 Tayloe v. Merchants' Fire
Ins, Co......14, 61, 119
Terry v. Duntze . . 34, 131, 164
Thomas v. Cadwallader 33, 108,
Thomas v. Thomas . 60, 64 Thompson v. Gillespy . . 119 Thompson v. Leach ... 2 Thompson v. Noel . . 140, 177 Thomson v. James 1, 4, 6, 11, 14,
15,16, 27,151,152,178,180, 181
Thorpe's Case . . . 141, 144
Thorpe v. Thorpe 112, 140, 141,
144, 146, 176
Thurnell v. Balbirnie . .41, 157 Tidey v. Mollett 38, 119, 157, 158
Townsend v. Hunt. . . 92,94
Traver v.------ .... 54,66
Trewinian v. Howell ... 75 Trueman v. Fenton ... 72 Tully v. Howling .... 163 Turner p. Goodwin . . 20, 142 Tweddle v. Atkinson ... 62
Valentine». Foster ... 78 Vassar ». Camp ... 14,16, 17 Victors K. Davies .... 96 Vivian v. Shipping . . . 144 Vyse v. Wakefield .... 160
Wade v. Simeon .... 58
Wallis v. Scott.....104
Ware v. Chappel . 108, 138, 144 Warlow a. Harrison ... 19 Waterhouse v. Skinner . . 174 Watson v. Turner .... 74
Way v. Sperry.....72
Wells v. Calnan . . 42,158,169 Wennall v. Adney ... 71, 76 Wheatley v. Low ... 64, 68 White v. Beeton .... 114 Wilks v. Smith . . . 124, 145 Whitehead v. Howard . . 73 Wilkinson v. Byers ... 64 Wilkinson v. OJiveira . . 54, 70 Williams v. Carwardine . . 3 Williams v. Moor .... 72 Williamson v. Clements . 54, 70 Williamson v. Losh ... 60 Winstone v. Linn .... 109 Withers v. Reynolds 128,137, 172 Worsley v. Wood ... 33, 157 Wotton v. Cooke .... 187
Young v. Ashburnham . . 92
THE LAW OF CONTRACTS.
ACCEPTANCE OF OFFER.
1. According to the popular apprehension of the term, a promise is the act of the promisor alone; but in truth it requires also an act of the promisee. Before any act by the promisee, the so-called promise is in law only an offer, called by the Romans a pollicitation. It is not until it is accepted by the promisee that it becomes in law a promise.1 A promise is in this respect like a gift of property, which is commonly supposed to be the act of the donor alone, but which requires the acceptance of the donee to pass the title to the property.2
2. The acceptance of an offer, however, differs materially from the making of an offer. The former requires, it seems, a mental act only; and clearly it does not, like the making of an offer, require a communication from the person making it to the person to whom it is made. Indeed, it is well settled as to
1 Grotius, Lib. 2, c. 11, § 14; Pothier, Traitï¿½ des Obligations, Part. 1, c. 1, sect. 1, art. 1, § 2. Lord Stair, as cited in Thomson v. James, 18 Dunlop, 1, 17-18, Cas. on Contr. 125, 147, is contra.
2 Grotius, Lib. 2, c. 6, § 2.
a gift of property that no acceptance by the donee need be proved in order to complete the gift; for, as a gift is presumptively a benefit to the donee, the law will presume an acceptance of it by him in the absence of evidence to the contrary.1 And there is no reason to doubt that the same rule is applicable to a promise made as a gift, though no such question can arise in our law as to an ordinary promise not under seal, since every such promise requires a consideration to support it, and hence can never constitute a gift. As to all such promises, therefore, there must be a physical act on the part of the promisee to complete them, namely, giving or performing the consideration ; and, though the thing specified by the offerer as the consideration of his proposed promise may be given or done without accepting the offer, yet it will not in that case be given or done as the consideration (and hence will not inure as the consideration) of the proposed promise. Therefore, though the acceptance of an offer and the performance of the consideration are different things, and though the former does not imply the latter, yet the latter does necessarily imply the former ; and, as the want of either is fatal to the promise, the question whether an offer has been accepted can never in strictness become material in those cases in which a consideration is necessary; and for all practical purposes it may be said that the offer is accepted in such cases by giving or performing the consideration.
3. Thus the public offer of a reward for the discovery and conviction of the perpetrator of a crime is an offer to any person who will accept it and per-1 Thompson v. Leach, 2 Vent. 198, 203.
form the consideration ; and the performance of the specified services will be prima facie evidence of a compliance with the offer in both respects ; but it may be shown not to have been a compliance with it in either respect, e. g. by showing that the services were all performed in ignorance that the reward had been offered. In Fitch v. Snedaker1 it appeared that a part of the services were performed in ignorance that the reward had been offered, and even before it was offered, and therefore that the consideration for the reward had not been performed, i. e. not the whole of it; but the performance of the remainder of the services after the offer of the reward became known to the plaintiffs would probably have shown an acceptance of the offer, though that fact would not have been material. In Williams v. Carwardine,2 the finding of the jury showed that, though the plaintiff had fully performed the services specified in the offer, she had neither accepted the offer nor performed the consideration; and yet it was held (erroneously, semble) that she was entitled to recover.
4. As the performance of the consideration is what converts an offer into a binding promise, it follows that the promise is made in legal intendment at the moment when the performance of the consideration is completed. It also follows that up to that moment the offer may either be revoked, or be destroyed by the death of the offerer, and the offeree thus be deprived of any compensation for what he has done.3
1 38 N. Y. 248, Cas. on Contr. 118.
2 4 B. & Ad. 621, Cas. on Contr. 12.
3 Offord v. Davies, 12 C. B. N. S. 748, Cas. on Contr. 33. Bradbury v. Morgan, 1 II. £ C. 249, cited in Offord v. Davies, supra, is contra, but it must be deemed erroneous.
As this may cause great hardship and practical injustice, ingenious attempts have been made to show that the offer becomes irrevocable as soon as performance of the consideration begins;l but such a view seems to have no principle to rest upon. Besides, there may be hardship on the other side as well; for the offeree may at any stage refuse to proceed further in performing the consideration, or he may die, and then the offerer will confessedly be without remedy. The true protection for both parties is to have a binding contract made before performance begins, by means of mutual promises; and if they neglect this precaution, any hardship that they may suffer should be laid at their own doors. It may be urged that the offer is accepted (and thus converted into a promise) the moment the performance of the consideration begins; and though the promise at first is not binding for want of a consideration, yet, being a promise and not an offer, it is irrevocable; and in the event of the consideration being afterwards performed, it will become binding. Such a view, however, would be fanciful and unsound. It does not follow that an offer becomes a promise because it is accepted; it may be, and frequently is, conditional, and then it does not become a promise until the conditions are satisfied;2 and in case of offers for a consideration, the performance of the consideration is always deemed a condition. A promise must have a consideration when it is made, or it can never have one. Besides, the view in question would not even serve the purposes of sub-
1 See Offord v. Davies, supra.
2 Lord Stair, cited in Thomson v. James, 18 Dunlop, 1, 17-18, Cas. on Contr. 125, 147.
stantial justice, as it would protect the offeree, while leaving the offerer wholly unprotected.
5. The time when the performance of the consideration is completed frequently depends upon a question of law; e. g. where the consideration is the sale of personal property, the promise being to pay the price, the passing of the title to the property is what completes the performance of the consideration; and hence it is at that moment that the promise to pay the price is made in legal contemplation. In the common case, where goods are ordered from a distance, to be forwarded by the seller to the buyer, the title to the goods passes and the contract is complete the moment when the goods pass from the hands of the seller into the hands of the carrier, the latter becoming the servant of the buyer, and the buyer being bound to pay for the goods, though they should be lost during the transit. All this of course assumes that the seller acts in conformity with the express and implied terms of the order; for the order is in the nature of an offer to buy goods of a certain description on certain terms, and the sending of the goods must be both an acceptance of the offer and a performance of the consideration specified in the offer in order to form a contract.
6. Sometimes the consideration for a promise is of such a nature that the promisor will have no sure means of knowing whether or not it has been performed unless he is informed by the promisee; and this will frequently be a sufficient reason for holding the offer to contain an implied condition that notice shall be given of the performance of the consideration within a reasonable time after it is performed. Such
a condition, however, will not suspend or postpone the making of the promise until the notice is given; for that is not necessary for the protection of the offerer, and it would work an injustice to the offeree. The promise, therefore, will arise (and hence the offerer's power to revoke will cease) the moment that the consideration is performed, but the liability of the promisor will depend upon his receiving notice pursuant to the implied terms of the offer. In other words, the condition contained in the offer will be imported into the promise.1 Thus, if A offers to B to become guarantor for C to a certain amount, if B will give C credit to that amount, A will become guarantor as soon as the credit is given, but his guaranty may reasonably be held to be conditional upon his receiving notice within a reasonable time afterwards that the credit has been given. If, in such cases, the consideration of the promise consists in the transfer of property, it seems that the passing of the title to the property will be suspended until the notice is given; for otherwise, in the event of no notice being given in time, the promisor would acquire the property without paying for it. Yet when the title does pass, it will relate back to the time when the promise was made. Thus, an application for shares in a company about to be organized is an offer to purchase the specified number of shares on the terms announced in the company's prospectus. If the company accepts the offer, it passes a vote allotting the shares to the applicant. On ordinary principles, this allotment would complete the contract, the applicant thereby
1 Lord Stair, cited in Thomson v. James, 18 Dunlop, 1, 17-18, Cas. on Contr. 125, 147.
becoming owner of the shares, and the company acquiring a right to the purchase-money. But the allotment being in its nature a secret transaction, it is held that the applicant is entitled to be notified of it; and the consequence is that, while the allotment fixes the rights of both parties so that neither can withdraw without the other's consent (and hence the decision in Hebb's Casel was erroneous), yet the passing of the title to the shares and the applicant's liability for the purchase-money are suspended until the condition of giving notice is either performed or waived. When either of these events happens, the title to the shares vests in the applicant, and his liability to pay the purchase-money (previously conditional) becomes absolute. Yet the title to the shares vests by virtue of the allotment, and not by virtue of the giving or the waiving of notice of it, and hence when it vests it relates back to the time of the allotment. As to how notice of the allotment must be given, there has been much conflict of opinion; but when the question is correctly understood, there would seem to be little room for controversy. Notice has to be given because the applicant is supposed to require it; and he is supposed to require it because it is convenient and desirable, not because it is absolutely necessary, that he should have it. Therefore he cannot be supposed to require more than due diligence on the part of the company; and this requirement will be satisfied by sending a notice by mail, properly directed, especially when that is the only diligence employed by the applicant to secure his
1 L. R. 4 Eq. 9, Cas. on Contr. 42.
application's reaching the company. Harris's Case1 is decided in accordance with this view. Br. & Am. Tel. Co. v. Colson2 is contra.
7. It has been contended that every acceptance of an offer relates back to the time when the offer was first made, and hence that the time of making the offer is always, in legal contemplation, the time of making the contract. The doctrine of relation, as invoked by this proposition, is clearly a pure legal fiction, i. e. it has no foundation in actual facts to rest upon. It is the acceptance of the offer that makes the contract, as much as it is delivery that makes a deed. It is true that the offer is indispensable to the making of the contract, but so are writing and sealing indispensable to the making of a deed. It is not, however, a conclusive objection to a relation that it is fictitious, for the law does sometimes create such relations; but it only does so in order to promote justice, i. e. in order to prevent some injustice or some inconvenience which would otherwise arise. No such reason can be given in the case in question, certainly not in the absence of any evidence of intention that the contract should take effect at and from some other time than when it was made. But the proposition refutes itself by proving altogether too much; for, if it were true, it would follow that an offer could be accepted with effect, notwithstanding the death or insanity of the offerer, and it was actually so contended in Mactier v. Frith.3 Nay, more, it would
1 L. R. 7 Ch. App. 587, Cas. on Contr. 54. This case was followed in Household Fire Ins. Co. v. Grant, 4 Ex. D. 216.
2 L. R. 6 Excli. 108, Cas. on Contr. 45.
8 6 Wend. 103, 111-113, Cas. on Contr. 77, 82-83.
follow that an offer never could be revoked to any purpose; for the acceptance, whenever in fact made, would always, in legal contemplation, precede the revocation.
8. In all the cases put in Mactier v. Frith, as well as in most other cases, the doctrine of relation is not a mere fiction, but has a substantial foundation of fact to rest upon. Thus, in the case of the ratification of a contract or conveyance made by an agent without sufficient authority, the ratification must relate back in order to have any effect whatever; for the ratification does not and cannot make the contract or conveyance; that must be made, if at all, by the act of the agent in the name of the principal. The principal may indeed disregard the unauthorized act of the agent, and make the contract himself anew; but that is not a case of ratification, nor is there in that case any relation. So in the case of the enrolment of a deed of bargain and sale, but for the statute of enrolment the deed would be complete and operative without any such ceremony; the statute interferes and makes the deed a nullity unless enrolled; but when enrolled, it is the deed and not the enrolment that conveys the land. The enrolment, therefore, must of necessity relate back. So in the case of a parol contract rendered invalid by the Statute of Frauds, where the statute is afterwards complied with by a memorandum in writing, or some other sufficient act, it is the parol agreement that makes the contract, and therefore the making of the contract must be referred to the time when the parol agreement was made.
9. If the writer be thought to require a justification
for saying so much in opposition to a view which admits of so little being said in its favor, such. justification will be found in the fact that the view in question has not only been entertained in highly respectable quarters, but has been made the basis of actual decision. Thus, in Kennedy v. Lee,1 Lord Eldon said that when an offer is made and accepted by letter, " the acceptance must be taken as simultaneous with the offer;" and this dictum (which seems to have been a deliberate one) has often been cited as a correct statement of the law. In Potter v. Sanders,2 Wigram, V. C., seems to have assumed that the law was so, but he held that a fact necessary to raise the question had not been put in issue by the pleadings. In the very recent case of Dickinson v. Dodds,3 it was admitted by the counsel for the defendant Allan that " if there had been an acceptance " by the plaintiff, " it would have related back, in point, of date, to the offer;" and Bacon, V. C., not only declared the law to be so, but actually gave the plaintiff a priority over the defendant Allan on that ground; and though his decree was reversed on appeal, the reversal was upon a ground which did not impeach the soundness of the position above referred to.*
10. Perhaps Lord Eklon's dictum will admit of a different interpretation from the one which has been put upon it. He says " the acceptance must be taken
1 3 Her. 441, 454.
2 G Hare, 1, 8, Gas. on Contr. 15, 19.
» 2 Ch. Eiv. 463, 467, 470, Cas. on Contr. 61, 63, 66.
4 It may be remarked that there was another reason in this case, as well as in Potter v. Sanders, why the acceptance could not properly be made to relate back, namely, that it would affect the rights of a person who was not a party to the contract.
as simultaneous with the offer;" and it is true that the acceptance and the offer must co-exist, for if the offer has ceased to exist when the acceptance is made, of course there can be no contract; and as some time must always elapse between the making of an offer and the acceptance of it, the acceptance must of necessity be carried back to the time of making the offer, or else the offer must be brought forward to the time of making the acceptance, i. e. the acceptance must operate by relation, or the offer must continue; and in either way the words of Lord Eldon would be satisfied. Between these two views there ought never to have been any doubt, for the latter is obvious and rational, carries out the intention of the parties, and does not require the invention of any fiction; and yet it seems never to have occurred to the English courts that an offer might continue indefinitely until the case of Adams v. Lindselll(1818); and when the court declared in that case that " the defendants must be considered in law as making, during every instant of the time their letter was travelling, the same identical offer to the plaintiffs," the idea was a new one. When Cooke v. Oxley2 (1790) was decided by the same court, it was supposed that an offer must be accepted, if ever, at the same interview at which it was made (i. e. in legal contemplation at the same moment at which it was made), and that an acceptance at any subsequent time would be only an offer in turn, which the original offerer might accept or reject at pleasure; and that it was immaterial that the acceptance in point of time came within the very
1 1 B. & Aid. 681, Cas. on Contr. 4.
2 3 T. R. 653, Cas. on Contr. 2.
terms of the offer. And even ten years after the decision of Adams v. Lindsell, the same court decided Head v. Diggon a (1828), under the influence of the old notion. So in Routledge v. Grant2 (1828), another court was at a loss how to apply the doctrine of Adams v. Lindsell, thinking that it might involve the consequence of making an offer irrevocable during the period of its continuance. If, therefore, Lord Eldori's dictum meant what it has commonly been supposed to mean, it may be explained by the fact of his supposing (Adams v. Lindsell not having been decided till the year following) that in no other way could a contract be made by means of letters. If such was the origin of the opinion that an acceptance relates back to the time of making the offer, there need be the less hesitation in rejecting it on account of the authority by which it is supported.
11. Acceptance has hitherto been considered with reference to such offers only as contemplate unilateral contracts. When the contract is to be bilateral, though the principles are the same, the application of them is very different. It still remains true that the offer requires an acceptance and the giving of the consideration to convert it into a binding promise; but as the consideration consists of a counter-promise, so the giving of the consideration consists in making this counter-promise. It follows also that the original offer cannot become a binding promise until the counter-promise also becomes valid and binding, for until then the consideration is not given. Hence the familiar rules, that in bilateral contracts neither party
1 3 M. & R. 97, Cas. on Contr. 10.
2 4 Bing. 653, Cas. on Contr. 5.
ï¿½will be bound unless both are bound,1 and that both must become bound at the same moment of time; and these rules hold in the civil law, and in the law of Scotland, as well as in our law, for, although the former do not require a consideration to make a promise binding, yet an offer which contemplates a counter-promise is conditional upon the counter-promise being made.2
12. There are other important particulars in which a bilateral contract differs from one that is unilateral in respect to the acceptance of an offer: while in the latter the acceptance is merged and lost sight of in the performance of the consideration, in the former the giving of the consideration is merged and lost sight of in the acceptance; while in the latter the performance of the consideration necessarily implies an acceptance of the offer, in the former the acceptance of the offer necessarily implies the giving of the consideration. Therefore, a mere offer in terms and an acceptance in terms are sufficient to form a bilateral contract, but not a unilateral contract. So an acceptance in terms is a sine qua non in a bilateral contract, while in a unilateral contract an acceptance in terms may be, and commonly is, dispensed with. Again, in a unilateral contract the offer becomes a contract in consequence of what the offeree does, in a bilateral contract in consequence of what he says. The reason why an acceptance in terms is necessary, and why it
1 Payne t>. Cave, 3 T. E. 148, Cas. on Contr. 1; Cooke r. Oxley, 3 T. R. 653, Cas. on Contr. 2; Head B. Diggon, 3 M. & R. 97, Cas. on Contr. 10; Martin v. Mitchell, cited in HebVs Case, L. R. 4 Eq. 9,12, Cas. on Contr. 42, 44.
2 Thomson v. James, 18 Dunlop, 1,19, Cas. on Contr. 125,149-150.
also suffices, in a bilateral contract, is, that what is called an acceptance is in that connection also and chiefly a counter-promise.
13. But how is it, the reader may ask, that a mere offer on one side and an acceptance of it on the other can create a promise on each side ? that what purports to be but one offer and one acceptance is in effect two offers and two acceptances ? It is because everything except the original offer and the acceptance of it is implied. Thus, it generally appears from the nature and terms of an offer whether it requires a counteroffer, and, if it does, what the terms of such counteroffer must be; and therefore nothing need be said in the offer upon either of those points. Nor is it ever necessary for an offerer to say that he will accept a counter-offer, if made; for if his offer requires a counter-offer, it is necessarily implied that he will accept the latter. So the acceptance of an offer which requires a counter-offer need say nothing about the latter; for the acceptance necessarily implies the making of the counter-offer, as the former would be idle and nugatory without the latter, and the terms of the latter, having been fixed by the original offer, do not need to be repeated. Then, the counter-offer being thus made by implication,- no further act of acceptance of it is necessary, for, the original offerer having by implication declared his intention to accept it, he is conclusively presumed to remain in that state of mind so long as his offer continues; and hence the counter-offer, by a conclusive presumption of law, is accepted the moment it is made.1 The same principle
i Grotius, Lib. 2, c. 11, § 11
is familiar in transfers of property; for, while the acceptance of the transferee is necessary for the passing of the title, yet it may be, and frequently is, given in advance by soliciting the transfer.1
14. It has been seen that the acceptance of the original offer, in the case of a bilateral contract, must be expressed, i. e. must be made by words or signs; and that the reason for this is, that the acceptance contains a counter-offer. Moreover, the reason why the counter-offer makes it necessary that the acceptance should be expressed is, that communication to the offeree is of the essence of every offer. The acceptance, therefore, must be communicated to the original offerer, and until such communication the contract is not made.2 When the parties are together and contract orally, no question can often arise as to communication; but when they are at a distance from each other and contract by letter, such a question frequently arises. The principle, however, is the same in both cases. In contracts inter prcesentes the words or signs must be both heard or seen and understood;3 in contracts inter absentes the letter must be received and read.4 Upon this latter point, however, there has been much difference of opinion, and it has been supposed to be pretty well settled in England and this country that the contract is complete the moment the letter of acceptance is mailed.
1 Grotius, Lib. 2, c. 6, § 2.
2Per Lord Curriebill, in Thomson v. James, 18 Dunlop, 1, 19, Cas. on Contr. 125, 149-150.
3 S. v. F., Cas. on Contr. 156,162. The original of this case will be found in Merlin, Repertoire de Jurisprudence, Tit. Vente, 1, Art. III. No. XI., Ms.
* S. v. F., Cas. on Contr. 156, 159-160.
Most of the authority on the subject, however, consists of dicta, and these dicta may be explained by the fact that the nature of the question has been misunderstood. Of actual decision there is indeed very little. Of all the cases contained in the writer's collection of Cases on Contracts, the point in question seems to have been decided in only three, one of them (and the earliest) a Massachusetts case (McCulloch v. The Eagle Ins. Co.1), another a New York case (Vassar v. Camp 2), and the third a Scotch case (Thomson v. James3). All the other cases turned upon some other question. Thus, in Adams v. Lindsell.4 it was erroneously supposed that the offer had been revoked between the mailing and the receipt of the letter of acceptance (181), and hence that the case depended upon the time when the acceptance became complete. The only real question, however, was whether the acceptance came too late, the letter containing the offer having miscarried. In Potter v. Sanders,6 the contract with Potter was entitled to priority in any view, since the Statute of Frauds was not satisfied as to the contract with Coates until April 27; and though the latter contract might relate back to the oral agreement as between the parties to it, it could not so relate as to a third person. In Dunlop v. Higgins,6 the only question was whether the offer was accepted in time; and it was held that it was, whether the acceptance became complete on the
1 1 Pick. 278, Cas. on Contr. 72.
2 1 Kern. 441, Cas. on Contr. 110.
8 18 Dunlop, 1, Cas. on Contr. 125. * IB. & Aid. 681, Cas. on Contr. 4. 6 6 Hare, 1, Cas. on Contr. 15. 6 1 H. L. Cas. 381, Cas. on Contr. 21.
mailing or on the receipt of the letter of acceptance.1 In Hebb's Case,2 in Br. and Am. Tel. Co. v. Colson,3 and in Harris's Case,4 the contract was unilateral (6), and hence those cases are not in point. In McCulloch v. Eagle Ins. Co.5 the question was actually involved, and the decision was in favor of the view here contended for. In Mactier v. Frith,6 the offer was to sell to Mactier an undivided half-interest in a cargo of brandy already in his possession. As soon, therefore, as Mactier accepted the brandy on the terms offered, the title passed, and he became indebted for the price.7 No actual promise by him was necessary. It was not even necessary that he should write a letter of acceptance, still less that it should reach Frith. In Averill v. Hedge,8 the only question confessedly was whether the letter of acceptance was mailed in time. In Tayloe v. Merchants' Fire Ins. Co.9 the defendant's offer contemplated a unilateral contract (117), and this offer was accepted and the consideration paid the moment when the plaintiff sent his check for the premium. It was the same as if money had been sent. It is true that the plaintiff became liable to the defendant on his check, but that liability arose when the check was delivered, i. e. when the letter containing it was mailed. Vassar v. Camp10
1 See Cas. on Contr. 47-49, 52, 53, 59-60.
2 L. R. 4 Eq. 9, Cas. on Contr. 42.
» L. R. 6 Exch. 108, Cas. on Contr. 45.
* L. R. 7 Ch. App. 587, Cas. on Contr. 54.
60 Wend. 103, Cas. on Contr. 77.
' See tit. DEBT.
8 12 Conn. 424, Cas. on Contr. 90.
9 9 How. 390, Cas. on Contr. 106.
must be admitted to be in point, but the effect of the decision was not such as to recommend it. Indeed, it is doubtful if it can stand in any view that can be taken of it; for, assuming that the contract was complete the moment the plaintiff's letter of acceptance was mailed, there is much ground for holding that the defendants' liability was conditional upon their receiving prompt notice of the acceptance of their offer.1 This view may be fairly rested upon a necessary implication, though it is much aided by expressions in the defendants' offer. It also detracts from the authority of Vassar v. Camp, that the court regarded the question as already conclusively settled by Mactier v. Frith. Dunmore v. Alexander2 is opposed to Vassar v. Camp, so far as it goes, but the point was not involved. Thomson v. James 3 agrees with Vassar v. Camp, but the reasoning by which the decision is supported is at least neutralized by the dissenting opinion of Lord Curriehill. The case of S. v. F.4 contains a powerful argument by Merlin in support of the view adopted by McCulloch v. The Eagle Ins. Co., but the point was not decided.
15. It remains to notice the principal arguments which have been advanced in support of the view that the contract is complete the moment the letter of acceptance is mailed. 1. It is said that, if the contract is not made until the letter of acceptance comes to the knowledge of the offerer, it can never be made.5 This proposition assumes that, if the contract cannot
1 See tit. NOTICE.
2 9 Shaw & Dunlop, 190, Cas. on Contr. 121.
3Supra. 4 Supra, p. 15, n. (3).
6 Adams v. Linflsell, 1 B. & Aid. 681, Cas. on Contr. 4, 5; Mactier o. Frith, 6 Wend. 103, 110-118, Cas. on Contr. 77, 85-86.
be made until the acceptance comes to the knowledge of the offerer, it must be because this knowledge of the offerer is one of the necessary elements of a contract. If the argument be stated in the form of a syllogism, it will stand thus: If the contract must become known to the offerer the moment it is made, it must equally become known to the offeree the moment it is made; but a contract inter absentee cannot become known to both parties at the same moment, and so not at the moment it is made; ergo it need not become known to the offerer the moment it is made. The fault of this syllogism is in the major premise, which is untrue. The reason why the contract must become known to the offerer the moment it is made is an accidental one; namely, because the contract is made the moment the counteroffer is made, and the counter-offer is made the moment the letter of acceptance comes to the knowledge of the original offerer. In other words, the letter of acceptance must come to the knowledge of the offerer for the same reason that the letter containing the original offer must come to the knowledge of the offeree. 2. It is. said that an offer made through the mail impliedly authorizes an answer to be sent through the same channel; and therefore, when the offeree has mailed a letter of acceptance, he has done everything which the offer requires him to do.1 It is true that he has done everything required of him as to the mode of communicating his counter-offer; but the offer also requires by a necessary implication that a counter-offer shall be made, and this cannot be done without communication. If, therefore, the offer should
1 Dunlop v. Higgins, 1 H. L. Cas. 381, Cas. on Contr. 21, 30-32.
expressly declare that the contract should be complete immediately upon mailing a letter of acceptance, such a declaration would be wholly inoperative. 8. It is said that the offerer, by sending his offer by mail, makes the postoffice his servant or messenger to receive and return an answer, and therefore that the mailing of an answer is a delivery of it to the offerer. It is unnecessary to question the correctness of this proposition,1 for it may be fully admitted, without at all advancing the argument in support of which it is adduced. Even if the offerer should send his offer by his own servant, and the latter should bring back a letter of acceptance, though the delivery of the letter of acceptance to the servant would be a delivery to his master, and so vest the property in the letter in the master, it would not complete the contract.2 If, indeed, the offerer should send his offer by a messenger, and should authorize the latter to receive a verbal acceptance as the offerer's agent, the case would be different; for the communication of the acceptance to the agent would be a communication of it to the principal, and the knowledge of the agent would be the knowledge of the principal.3 4. It has been claimed that the purposes of substantial justice, and the interests of contracting parties as understood by themselves, will be best served by holding that the contract is complete the moment the letter of acceptance is mailed; and cases have been put to show that the contrary view would produce not only unjust but
1 But see Thomson v. James, 18 Dunlop, 1, 20-22, Cas. on Contr. 125, 152-155, per Lord Curriehill.
2 S. v. F., Cas. on Contr. 156, 158-159, 1G2.
8 See Hebb's Case, L. R. 4 Eq. 9, 12, Cas. on Contr. 42, 44.
absurd results.1 The true answer to this argument is, that it is irrelevant; but, assuming it to be relevant, it may be turned against those who use it without losing any of its strength.2 The only cases of real hardship are where there is a miscarriage of the letter of acceptance, and in those cases a hardship to one of the parties is inevitable. Adopting one view, the hardship consists in making one liable on a contract which he is ignorant of having made; adopting the other view, it consists in depriving one of the benefit of a contract which he supposes he has made. Between these two evils the choice would seem to be clear: the former is positive, the latter merely negative; the former imposes a liability to which no limit can be placed, the latter leaves everything in statu quo.3As to making provision for the contingency of the miscarriage of a letter, this is easy for the person who sends it, while it is practically impossible for the person to whom it is sent.4
16. Assuming it to be established that a letter of acceptance, in case of a bilateral contract, contains by implication a counter-offer, it follows that it is subject to revocation until the counter-offer is accepted, i. e. until the letter of acceptance reaches the original offerer.5 And if a letter of revocation reaches the
1 See Harris's Case, L. R. 7 Ch. App. 587, 594, Cas. on Contr. 54, 58-59, per Hellish, L. J.
2 See Br. & Am. Tel. Co. v. Colson, L. R. 6 Exch. 108, 112, 118, Cas. on Contr. 45, 47, 51.
3 See Vassar v. Camp, 1 Kern. 441, Cas. on Contr. 110, and compare § 14.
* See Br. & Am. Tel. Co. v. Colson, L. R. 6 Exch. 108, 118, Cas. on Contr. 45, 51, per Bramwell, B.
6 But see Thomson v. James, 18 Dunlop, 1, 13, Cas. on Contr. 125, 140, per Lord President, contra.
original offerer at the same moment as the letter of acceptance, as there can be no presumption that the latter is read first, the former will render the latter inoperative.1 So if a letter of acceptance be followed by another letter, not revoking but modifying the first, and the two be delivered to the original offerer at the same moment, the former will take effect only as modified by the latter; and hence, if the latter does not conform to the original offer, there will be no contract.2
17. An offer can only be accepted in the terms in which it is made. An acceptance, therefore, which modifies the offer in any particular, will go for nothing.8 Otherwise a contract might be made without the assent of both parties to its terms. Thus, where an offer was made in writing to purchase a lease, possession to be given on the 25th of July, and the offeree answered in writing that he accepted the offer, and would give possession on the 1st of August, there was held to be no contract, though it appeared that the change of date was entirely unintentional.4 An acceptance must conform to the offer also in respect to the time and manner in which it is given or made. Therefore, if an offer requires the acceptance to be by letter sent to a particular place, a letter of acceptance sent to another place will be of no avail.5
18. As offers are made only with a view to their
1 Dunmore v. Alexander, 9 Shaw & Uunlop, 190, Gas. on Coatr. 121; S. i--. F., Cas. on Contr. 156.
2 S. v. F., supra.
s See Harris's Case, L. R. 7 Ch. App. 587, 593, Cas. on Contr. 54, 57-58; Vassar v. Camp, 1 Kern. 441, 445, Cas. on Contr. 110, 113. 4 Routledgc y. Grant, 4 Bing. 653, Cas. on Contr. 5. 6 Eliason v. Henshaw, 4 Wheat. 225, Cas. on Contr. 70.
being accepted, when an offer is rejected it is at an end; and an acceptance of it afterwards can only operate as a new counter-offer, which the original offerer may either accept or reject.1 And if an offeree in terms neither accepts nor rejects the offer, but makes a different offer in turn, this will be deemed a constructive rejection of the original offer.2
See tits. MUTUAL CONSENT; OFFEK; REVOCATION OF OFFER.
1 Cas. on Contr. 15, n. 1.
2 Hyde v. Wrench, 3 Beav. 334, Cas. on Contr. 13.
BIDDING AT AUCTION.
19. It was decided in Payne v. Cave lthat a bid at an auction is in the nature of an offer, which is accepted by knocking down the hammer; and perhaps it is too late to question the correctness of the decision. On principle, however, it is open to much doubt. The true view seems rather to be, that the seller makes the offer when the article is put up, namely, to sell it to the highest bidder; and that, when a bid is made, there is an actual sale, subject to the condition that no one else shall bid higher. This view was urged by the plaintiff's counsel. If the bidder can retract at any time before the hammer falls, so also can the seller; and hence a bid will secure no right to the bidder, whether there is any higher bid or not. The article may be withdrawn, if the bidding is not satisfactory, though it were put up with the express announcement that it should be sold to the highest bidder.2 That the decision in Payne v. Cave has not been acquiesced in by sellers at auction appears frorn the frequent attempts that have been made
1 3 T. R. 148, Cas. on Contr. 1.
2 Compare Warlow v. Harrison, 1 El. & El. 295, 309.
to render bids irrevocable by a provision to that effect inserted in the conditions of sale.1 That such attempts are unavailing is no argument in favor of Payne v. Cave, but rather the contrary.
* Dart on Vendors (5th ed.), 124.
20. A concurrent condition must consist of some act to be done by the covenantee or promisee, which can be done at the same moment that the covenant or promise is performed. Such conditions are found for the most part in bilateral contracts, and the act which constitutes the condition of one of the covenants or promises is commonly the subject of tho counter-covenant or counter-promise; but a concurrent condition may consist of an act which the covenantee or promisee is under no obligation to perform, and hence such a condition may be contained in a unilateral contract. Indeed, in the earliest reported case in which a condition was held to be concurrent, the contract was unilateral.1 The distinctions between express conditions, conditions implied by law, and conditions implied in fact (32), are as applicable to concurrent conditions as to conditions precedent, though much the greater number of concurrent conditions are implied by law, and are therefore contained in bilateral contracts. Concurrent conditions of this latter class are fully considered under another title.2
1 Turner v. Goodwin, Fortescue, 145, cited in Cas. on Contr. 904.
2 See tit. DEPENDENT AND INDEPENDENT COVENANTS AND PKOMISES.
21. Whether an express condition be concurrent or precedent will seldom depend upon the language in which it is expressed, as such language is generally as applicable to one as to the other. It will depend first and chiefly upon whether the act which constitutes the condition is capable of being performed concurrently with the covenant or promise to which it is annexed. If it is not, the condition must be precedent. If it is, the condition will be concurrent, if it has the other necessary qualities of concurrent conditions (133); otherwise it will be precedent.
22. In a unilateral contract, the only act which is likely to be the subject of a concurrent condition is the act which constitutes the consideration of the covenant or promise, and that cannot be the condition of a promise, as a promise cannot exist until the consideration is performed. Therefore, in Collins v. Gibbs,1 and in Ball v. Peake,2 the declaration stated no promise, but only an offer. A covenant, however, may be conditional upon the performance of the consideration, and such a condition will generally be concurrent: e. g. in Large v. Cheshire,3 and in Lancashire v. Killingvrorth.4 Moreover, if a covenant be given before the consideration for it is performed, and if there be no covenant to perform the consideration, the only way of securing its performance is by making the covenant expressly conditional on its performance. In such a case, therefore, the court will be astute to find an express condition. Thus, in Lock v. Wright,5
1 2 Burr. 899, Cas. on Contr. 462.
2 1 Sid. 13, Cas. on Contr. 791.
8 1 Vent. 147, Cas. on Contr. 'OS.
« 1 La. Raym. 686, 12 Mod. 529, Cas. on Contr. 796.
5 1 Stra. 569, Cas. on Contr. 456.
the defendant's covenant to pay for the stock was held to be expressly conditional upon the transfer of the stock, though it was difficult to find such a condition in the covenant; and if it had appeared that there was a covenant by the plaintiff to transfer the stock, the court would not have held that the transfer of it was an express condition of the defendant's covenant to pay for it. There is, indeed, reason to suspect that the plaintiff had covenanted to transfer the stock by a separate deed, and, if so, each deed constituted a separate unilateral contract, and each was independent of the other, unless expressly conditional upon the performance of the other.1
23. In a bilateral contract, if the covenant or promise on one side be expressly conditional upon the performance of the covenant or promise on the other side, the condition will be concurrent if the same act would constitute a concurrent condition by implication in the absence of any express condition; otherwise it will be precedent. Therefore, in Brocas' Case,2 in Lea v. Exelby,3 in Pordage v. Cole,4 and in Sibthorp v. Brunei,5 the conditions were all concurrent, whether express or implied, because there would have been mutual and concurrent conditions in each case by implication, in the absence of any express condition. So in Giles v. Giles,6 the execution and delivery of the release by the plaintiff was a concurrent condition of the defendant's promise to pay the 200/f., the former being the consideration of the
1 Compare Callonel !-ï¿½. Briggs, 1 Salk. 112, Cas. on Contr. 722.
2 3 Leon. 219, Cas. on Contr. 442.
8 Cro. Eliz. 888, Cas. on Contr. 789.
4 1 Wms. Sauml. 319, Cas. on Contr. 625.
5 3 Exch. 820, Cas. on Contr. 079.
6 9 Q. B. 164, Cas. on Contr. 744.
latter. In Storer v. Gordon,1 the delivery of the outward cargo would have been a condition precedent to the payment of the freight on it, had not the plaintiff had a lien on the cargo by virtue of which he was entitled to retain it until the freight was paid; but the latter fact made the condition concurrent. On the other hand, in Peeters v. Opie,2 the condition of the defendant's promise was necessarily precedent, whether express or implied, as the plaintiff's promise was incapable of being performed at the same moment as the defendant's. So in Giles v. Giles,3 the performance of the plaintiff's promises respecting the tenancy could not be a concurrent condition of the defendant's promise to pay the 200L, as the former was not the consideration for the latter; and therefore it was necessarily a condition precedent. So in Jones v. Barkley,4 the delivery of the assignment and release, and in Northrup v. Northrup,5 the payment of the rent, could not be concurrent conditions for the reason stated in § 133, and therefore they were precedent. In Austin v. Jervoyse,6 it seems that the condition was rightly held to be precedent.7
24 It must not be inferred from what has been said that there can never be express concurrent conditions in a bilateral contract except where the law would imply them; for mutual promises contained in
1 3 JI. & S. 308, Cas. on Contr. 639.
2 2 Wms. Saund. 350, Cas. on Contr. 792.
« Dougl. 084, Cas. on Contr. 901. 6 6 Cow. 290, Cas. on Contr. 721.
6 llohart, 09, 77, Cas. on Contr. 790.
7 Compare Kingston (;. Preston, cited in Jones v. Barkley, Dougl. 684, 689, Cas. on Contr. 901, 905.
separate writings constitute a bilateral contract in ï¿½which no conditions will be implied, and yet each promise may be expressly conditional upon the concurrent performance of the other. Callonel v. Briggs1 is an example of this.
25. Concurrent conditions implied in fact do not often occur in practice, or, rather, questions do not often arise upon them. Such conditions always exist, however, where mutual covenants or promises are in their nature dependent on each other, i. e. where neither can be performed unless the other is performed at the same moment, e. g. mutual promises to marry. There are many mutual covenants and promises which are necessarily dependent on each other to a certain extent, but not to the full extent that they are dependent by implication of law. Thus, in the case of mutual promises to buy and sell, one party cannot buy unless the other will sell, and conversely; and, therefore, the buying and selling are necessarily dependent acts. But the payment of the price is not necessarily dependent upon the delivery or transfer of the property, nor conversely; and, therefore, these latter acts are dependent only by implication of law. It may be added that there is but little resemblance between concurrent conditions implied in fact, and those which are implied by law, and therefore what is elsewhere (133) said of the latter has little application to the former.
See tits. CONDITIONS; CONDITIONS PRECEDENT; CONDITIONS SUBSEQUENT; DEPENDENT AND INDEPENDENT COVENANTS AND PROMISES; PEKFOKMANCE or CONDITIONS.
l 1 Salk. 112, Cas. on Contr. 722.
26. A covenant or promise is conditional when its performance depends upon a future and uncertain event. The futurity and uncertainty of the event have reference to the time when the covenant or promise is made. If the event has then ceased to be future and uncertain, though not to the knowledge of the covenantor or promisor, it will not constitute a condition. Nor is it sufficient that the event be future, unless it be also uncertain; and the uncertainty must not be merely as to the time when the event will happen, but as to whether it will ever happen. It is sufficient, however, that the event is uncertain, for then it must necessarily be future also. It may be an event over which neither of the parties has any control, or it may be one within the control of the covenantee or promisee, e. g. where it consists in his doing or not doing a certain act. It may also consist of an act to be done or not to be done by the covenantor or promisor, e. ff. where one covenants or promises to do a specific thing, and in the event of his not doing it to pay $1,000; but it cannot depend upon the mere will and pleasure of the covenantor or promisor, for such an event would destroy the covenant or promise instead of making it conditional. Thus,
if A promise B to buy the latter's horse at such a price if he likes him after a week's trial, the promise will be void unless it can be interpreted as a promise, for example, to buy the horse unless a week's trial shall bring to light some fault in him of which the buyer was ignorant when he made the promise.1
27. A covenant or promise cannot be conditional unless it first exist; it is only the performance of it that the condition renders uncertain. An event, therefore, which must happen before a covenant or promise is made, does not make the covenant or promise conditional. If the event happens, the covenant or promise is absolute; if it does not happen, no covenant or promise is made. In such cases the condition is made when the offer is made, and the condition is annexed to the offer, and becomes a part of it; but before the covenant or promise is made, the event lias ceased to be uncertain, and hence the condition lias ceased to exist. In short, it is the offer, and not the covenant or promise, that is conditional. The consideration of every unilateral promise is necessarily a condition of this nature until it is given or performed, while the consideration of a unilateral covenant may be a condition of the covenant or of the offer, according to the intention of the covenantor.2
28. When the making of a covenant or promise depends upon whether a certain event has already happened, there is no condition of any kind. If the event has happened, the covenant or promise is abso-
1 Pothier, Traitï¿½ des Obligations, Part 2, c. 3, art. 1, § 2.
2 See Lord Stair, cited in Thomson v. James, 18 Dunlop, 1, 17-18, Cas. on Contr. 125, 147.
lute from the beginning; if the event has not happened, there is no covenant or promise at all. Thus, in Ollive v. Booker,1 the court having decided that the defendant's promise to take the vessel depended upon her "having sailed three weeks ago," and that event not having happened, it necessarily followed that the defendant had made no promise. So in Behn v. Burness,2 the statement that the vessel was " now in the port of Amsterdam " being untrue, it followed from the decision of the court that the defendant had made no promise.3 If the question had arisen, in either of these cases, whether the plaintiff was bound, it would have presented some difficulty. The presumption that, in a bilateral contract, neither party intends to be bound unless the other is also bound (11) would seem to have been effectually rebutted by the terms of the charter-party; but it would have been more difficult to answer the objection (the charter-party not having been under seal in either case) that the plaintiff's promise was without consideration (89).
29. As the event which is to render a covenant or promise conditional must not happen before the covenant or promise is made, so it must not happen after it is performed; for the effect of the condition must be to render the performance uncertain, whereas an event happening after performance cannot affect the covenant or promise in any manner. Conditions cannot therefore be divided into classes with reference to their relation in point of time either to the making
1 1 Exch. 416, Gas. on Contr. 501.
2 1 Best & S. 877, 3 Best & S. 761, Cas. on Contr. 656. 8 See tit. NOTICE.
or to the performance of the covenant or promise; nor can they, with reference to the nature of the event, for any uncertain event which is to happen, if at all, between the making of the covenant or promise and its performance (or concurrently with the latter at latest) may constitute a condition of any kind. In truth, the division of conditions into conditions precedent, concurrent conditions, and conditions subsequent, is designed to mark the relation in point of time between the event which constitutes the condition and the obligation of the covenant or promise. What that relation is in any given case depends upon when the obligation of the covenant or promise is to arise, and that depends upon the intention of the covenantor or promisor. Thus, if the covenant or promise is not designed to impose any obligation or confer any right until the event happens, the condition is said to be precedent, i. e. it precedes the obligation in time. So, if the covenant or promise is designed to impose an obligation and confer a right from the moment when it is made, and so before the event happens, the condition is said to be subsequent, i. e. subsequent in time to the obligation. Finally, if the covenant or promise is designed to impose an obligation and confer a right at the moment when the event happens, the condition is said to be concurrent, i. e. concurrent in time with the obligation. In this last case the event which constitutes the condition always consists of some act to be done by the covenantee or promisee, and the object of having the obligation arise at the very moment when the event happens (rather than afterwards) is to enable the covenantee or promisee to insist upon performance of the covenant or promise at the same
moment that he performs the condition; and it is this right of the covenantee or promisee that constitutes the chief difference between conditions precedent and concurrent conditions. Hence the idea has naturally arisen that the relation in time between the performance of the covenant or promise and the performance of the condition is the cause, instead of the consequence, of the condition's being concurrent.
30. Between conditions precedent and conditions subsequent the differences are important and radical. In case of a condition precedent, as the obligation to perform the covenant or promise does not arise until the event happens, of course until then there can be no breach of the obligation, and hence no action can be brought; and when an action is brought, it is a necessary part of the plaintiff's case to allege and prove that the event has happened. In the case of a condition subsequent, on the other hand, as the obligation to perform the covenant or promise arises the moment that the latter is made, a breach of the obligation has no connection with the happening of the event, and may take place either before or after the event happens. When an action is brought, therefore, the plaintiff can make out his case without any reference to the condition; and if in truth the event has happened, and the defendant is in consequence not bound to perform his covenant or promise, the burden lies upon him to allege and prove that fact. A condition subsequent, therefore, is always a defence, and an affirmative one. While the performance of the covenant or promise depends upon the happening of the event in both cases, it depends upon it in a different sense in the one case from what it does in the other:
in case of a condition precedent, the covenant or promise is not to be performed unless the event happens; while, in the case of a condition subsequent, it is not to be performed if it happens. A condition precedent is an element in the creation of an obligation; a condition subsequent is one of the means by which an obligation is extinguished.
31. When it is said that, in the case of a condition subsequent, the obligation to perform arises immediately upon the making of the covenant or promise, it must not be inferred that peformance is necessarily to take place immediately. An obligation may exist now to do a thing at a future time, and it may or may not be certain when that time will arrive, provided it be certain that it will arrive some time; and yet the performance of that obligation may be liable to be defeated by a condition subsequent. It is possible, therefore, for an obligation to be extinguished by a condition subsequent before the time for performing the obligation arrives, and hence before any right of action accrues. Yet if an action be brought after the time for performance arrives, the plaintiff will be able to state and prove facts which will entitle him to recover, unless the defendant sets up and proves his defence arising from the condition subsequent.
See tits. CONCURRENT CONDITIONS: CONDITIONS PRECEDENT; CONDITIONS SUBSEQUENT; DEPENDENT AND INDEPENDENT COVENANTS AND PROMISES; PERFORMANCE OF CONDITIONS.
32. Of the three classes into which conditions are divided, conditions subsequent seldom occur, and concurrent conditions are only a modified form of conditions precedent. The latter, therefore, constitute the typical class of conditions, and when the term " condition " is used without qualification, a condition precedent is supposed to be meant. Any uncertain event, which is capable of being a condition of any kind, may be a condition precedent, but generally the event consists of some act to be done by the covenantee or promisee. This act may be one which the covenantee or promisee is under no obligation to perform, as is always the case where there is only one unilateral contract between the parties; or it may be one which he binds himself to perform, as is commonly the case when the condition is contained in a bilateral contract. When there are two mutual covenants or promises, each of which is absolute in terms, and each of which is capable of being performed without the other, and yet one of them is subject to the condition of the other's being performed first, the condition is necessarily implied, there being no evidence of any actual intention to make the covenant or promise conditional. All other conditions are
founded upon the actual intention of the covenantor or promisor in each case, and they must, therefore, be contained in the covenant or promise to which they are respectively annexed. A condition, however, may be contained in a covenant or promise in two ways: it may be expressed in direct terms; or the covenant or promise may be of such a nature, or may be so worded, that it cannot be performed until something has been done by the covenantee or promisee. In the former case the condition is express; in the latter, it is neither express in the same sense as in the former, nor implied in the same sense as in the case first stated. All conditions, however, which are not expressed in terms may be properly said to be implied: when the implication is not founded upon anything contained in the covenant or promise, the condition is implied by law; when the implication is founded upon something contained in the covenant or promise, the condition is implied in fact. According to a distinction which seems to be well founded,1 conditions implied by law are based upon the construction of the covenant or promise, while conditions implied in fact are based upon its interpretation. Conditions implied by law have been fully considered under another title.2 It only remains, therefore, to consider the other two classes of conditions precedent.
33. When one of the parties to a contract wishes to secure the performance of some act by the other part}', or the happening of some event supposed to be in the power of the other party, he may accomplish his object in either of two ways; namely, by requir-
1 Lieber, Hermeneutics, c. 1, § 8, c. 3, § 2, cc. 4, 5.
2 See tit. DEPENDENT AND INDEPENDENT COVENANTS AND PROMISES.
ing from the other party a covenant or promise to do the act, or that the event shall happen, or by making his own covenant or promise expressly conditional upon the performance of the act or the happening of the event. If he adopts the former, he will refuse to covenant or promise at all unless the other party also covenants or promises at the same time; if he adopts the latter, he will refuse to make any covenant or promise except a conditional one, and unless the other party will accept the covenant or promise with the condition annexed to it, there will be no contract. When attention is called to it, the distinction seems very obvious between a promise by A to B to do a certain thing, and a promise by B to A on condition that A shall do the same thing; but it is a distinction which is very apt to be overlooked. When parties are making a contract, their attention is likely to be occupied with the things to be done by one party or the other, rather than with the security that each is to have for performance by the other; and the distinction between a covenant or promise to do a thing, and a condition that it shall be done, has to do with the latter exclusively. It is not uncommon, therefore, for contracts, especially those made without professional assistance, to contain a clause requiring a certain thing to be done by one of the parties, without indicating at all how the other is to compel its performance, i. e. without indicating whether the clause is intended to be a covenant or promise, or a condition. For example, if the subject of a contract be a certain voyage to be made by a certain vessel, and it be stated that the vessel shall sail (i. e. begin the voyage) on or before a certain day, it will be clear that the party
who is to navigate and control the vessel is the one who is to see that she sails by the day named; but what penalty he is to suffer in the event of her not so sailing, namely, whether he is to become liable in damages for a breach of contract, or to lose all rights under the contract against the other party by a breach of condition, will not appear with any certainty from the mere words, as they are consistent with either view. Fortunately, however, there is another clew to the true interpretation of such a clause. If it is the language of the party alone who is to do the act, it can only be a covenant or promise; if it is the language of the other party alone, it can only be a condition. The rule, therefore, that language is to be so construed, ut res mayis valeat quam pereat, will be decisive. Moreover, the words of such a clause will have, in fact, a different meaning, according to the party who uses them. If they are used in a contract by the party who is to do the act, they plainly import that he binds himself to do it; while, if they are used by the party for whose benefit the act is to be done, they fairly mean that he will require it to be done, i. e. that his own obligation shall be conditional upon its being done. How then shall it be ascertained to whom the language of such a clause is to be imputed ? If the contract be clearly unilateral (e. ff. a policy of insurance), of course the answer to this question admits of no doubt. In such a contract only one party speaks, and that is the covenantor or promisor. Any clause, therefore, in a policy of insurance, requiring any act to be done by the insured, will be a condition of the covenant or promise of insurance, though its language may more naturally import a covenant or promise by
the insured.1 This seems to be the true reason why the clauses in marine policies of insurance commonly called warranties have always been held to be conditions. But if the contract be bilateral, the question does not admit of so unqualified an answer, as any clause which the contract contains may be the language of either party. It seems, however, that a clause in a bilateral contract which simply states that a certain thing shall be done, or that a certain event shall happen, or has happened, must be taken prima facie to be the language of the party who is to do the act, or within whose knowledge or power the event is supposed to be. Such a clause clearly cannot be imputed to the other party, unless there is some special reason for so doing. It seems, therefore, that a clause which would be a warranty in a marine policy of insurance will prima facie be a stipulation by the ship-owner in a charter-party; e. g. in Glaholm v. Hays,2 Ollive v. Booker,3 Oliver v. Fielden,4 and Behn v. Burness.6 This view may be adopted without impeaching any of the foregoing cases, for the clause upon which the question arose in each of them, assuming it to be a stipulation on the part of the plaintiff, also constituted an implied condition of the covenant or promise sued on.6 It seems that a bought note or a sold note, although in strictness a part of a bilateral contract (118), is to be
1 Worsley t>. Wood, 6 T. E. 710, Cas. on Contr. 472; Mason i>. Harvey, 8 Exch. 819, Cas. on Contr. 630; Roper v. Lendon, 1 El. & El. 825, Cas. on Contr. 546.
2 2 M. & Gr. 257, Cas. on Contr. 492. 8 1 Exch. 416, Cas. on Contr. 501.
* 4 Exch. 135, Cas. on Contr. 505.
5 1 Best & S. 877, 3 Best & S, 751, Cas. on Contr. 556.
6 Compare Grafton v. Eastern Counties Railway Co., 8 Exch. 699, Cas. on Contr. 527.
treated as a unilateral contract for the purposes of the present question. In other words, a bought note is the language of the buyer alone, as a sold note is the language of the seller alone; and, therefore, if a bought note requires anything to be done by the seller, or if a sold note requires anything to be done by the buyer, the doing of it will be an express condition.1 In Graves v. Legg 2 it is not expressly stated that the contract declared on was contained in a bought note, but it may safely be assumed that it was, and therefore the clause upon which the question arose constituted an express condition. It may be added, that, in a bilateral contract, the same clause may be to some extent the language of both parties, and so be both a stipulation and an express condition; but it seems that that can only be where the clause contains some word or words importing a condition, and some other word or words importing a stipulation, e. g. in Holder v. Taylor,3 where the word " provided " made an express condition, and the word " agreed " made a stipulation; but it seems that such a construction was not admissible in either of the cases previously cited (the words importing a stipulation only), nor in either of the following cases, the words importing a condition only: Thomas v. Cadwallader; 4 Neale v. Ratcliff;5 Anon.;6 Hays v. Bickerstaffe;7 Dawson v. Dyer.8
1 Per Tindal, C. J., in Glaholra v. Hays, 2 M. & Gr. 257, Gas. on Contr. 492, 495.
2 !l Exch. 709, Gas. on Contr. 532.
3 1 Kol. Abr. 518, Gas. on Contr. 620.
4 Willes, 490, Gas. on Contr. 458.
5 15 Q. B. 916, Gas. on Contr. 510.
6 4 Leon. 50, Cas. on Contr. 443. ' 2 Mod. 34, Gas. on Contr. 030.
8 5 B. & Ad. 584, Cas. on Contr. 055.
34. When a bilateral contract consists on one side in doing (fadendo), and on the other in giving (dando) in payment, and the payment is to be made in instalments, a difference is to be observed between making the instalments payable at fixed dates, and making them payable respectively when certain portions of the other side of the contract have been performed; for in the former case the payments will be subject to no condition unless a condition can be implied, while in the latter case they are subject to an express condition. In all building contracts, therefore, and other similar contracts, in which payment is agreed to be made in instalments as the work progresses, each payment is subject to an express condition; e. g. in Terry v. Duntze,1 where the words " as soon as " plainly made an express condition. Hence the reasoning of Buller, J., even if it had been correct with reference to implied conditions, had no tendency to establish the conclusion at which he arrived, namely, that the plaintiffs were " entitled to their action for the money without averring performance."
35. In Holdipp v. Otway 2 the words " as soon as " made the settling of the bills of costs, as therein provided for, a condition precedent to the defendant's obligation to pay. So in Seeger