Sunteți pe pagina 1din 524

Cornell University Law Library

Date

?Zrr^,

THE GIFT OF

yJU^c

/'^

/f%^

CORNELL UNIVERSITY LIBRARY

3 1924 052 854 886

PRINCIPLES

OF THB

ENGLISH LAW OF CONTRACT

AND OF

AGENCY IN ITS RELATION TO CONTRACT

ANSON

AMERICAN EDITION

HUFFQUI

Cornell University

Library

The original of tiiis book is in

tine Cornell University Library.

There are no known copyright restrictions in the United States on the use of the text.

http://www.archive.org/details/cu31924052854886

PRINCIPLES

ENGLISH LAW OF CONTRACT

AND OF

AGENCY IN ITS RELATION TO CONTRACT

SIR WILLIAM R. ANSON, Bart., D.C.L.

OF THE INNEK TEMPLE, BARRISTER-AT-LAW

WARDEN OF ALL SOULS COLLEGE, OXFORD

eietoenti) (Enslieb eaition

SECOND AMEKICAN COPYRIGHT EDITION

EDITED, WITH AMERICAN NOTES

BY

ERNEST W. HUFFCUT

DEAH OP THK CORNELL UNIVERSITT COLLEGE OF LAW

THE BANKS LAW PUBLISHINa COMPANY

23 PARK PLACE, NEW YORK

1907

COPTHIOHT 1906

By OXFORD UNIVERSITY PRESS

American Branch

NOTE TO FIRST AMERICAN EDITION

The object of this authorized American edition of Sir

William Anson's well-known treatise is to give parallel refer-

ences to selected American authorities where the American

law corresponds with the English law as stated by the author,

and to indicate clearly the points at which the American authorities either disagree wholly with the English law, or

are strongly divided among themselves. No attempt at ex-

haustive citation of authorities has been made. The simplicity

and conciseness of the author's treatment would be marred by

a large citation of cases, and the book would be to that extent

less useful to the student. If the editor's citations exceed in

amount those of the author, it is only because the American

law is the law of upwards of fifty jurisdictions, while the Eng-

lish law is the law of but one.

The abbreviation, "H. & W.," following the citation of

cases, refers to "Huffcut and Woodruff's American Cases on

Contract," a volume prepared especially to accompany Sir

William Anson's text.

Statutory changes have generally been indicated by refer-

ences to Stimson's American Statute Law, a work of great

service to American students and practitioners.

It is hoped that this edition may serve to increase the use-

fulness of a book which is already the universally acknow-

ledged model of what a student's book should be.

E. W. H.

CoBNEU Univeesitt, COLLEGE OF Law, October, 1895.

NOTE TO SECOND AMERICAN EDITION

The eleventh English edition is here given in full. The

text, however, has been arranged in numbered sections with

black-letter headings, and such portions of it as deal with

modem English statutes of local interest have been printed

in small type. At several points the American notes or addi-

tions have been carried into the text in order to afford an

opportunity for fuller treatment, but these insertions are in all cases clearly indicated. (See sections 110, 175, 284r-291,

324-329, 365-370). While the notes have been considerably

expanded in this edition, and the statutory references in- creased, an effort has been made to keep the editorial work

within a compass suitable for an elementary text.

The references to H. «& W. are to the second edition of

Huffcut and Woodruff's American Cases on Contract.

E. W. H.

Cornell Untveksitt, College of Latt, August, 1906.

PREFACE TO THE ELEVENTH EDITION

I HAVE little to say in offering the eleventh edition of this book to the public. The preface to the sixth edition, which I

leave as it was written in 1891, will explain, to any one who may be interested in the matter, the origin and purpose of the book. I have endeavored in the eleventh edition to bring

the book up to date, to introduce new authorities with the least possible enlargement of the text, to simplify passages

that seemed obscure, and to preserve the character of an ele-

mentary treatise.

I have again to thank my friend Mr.

Graham-Harrison, of All Souls College and of Lincoln's Inn,

for valuable help in the suggestion of improvements, in

advice on points of difficulty, in correction, and in revision.

All Souls College, April, 1906.

W. R. A.

PREFACE TO THE SIXTH EDITION

When the subject of Contract was first introduced into the School of Jurisprudence at Oxford, in the year 1877, teachers

of law had to consider the books which their pupils might

best be directed to read. Some works on the subject, of ac-

knowledged value to the practicing lawyer, were hardly suit- able for beginners, and the choice seemed to lie between the

works of Mr. Leake, Sir Frederick Pollock, and the late Mr.

Smith. Of these, Mr. Smith alone wrote expressly for students, and I had, as a student, read his book with interest and ad-

vantage. But I thought that it left room for an elementary

treatise worked out upon different lines.

Neither Sir Frederick Pollock nor Mr. Leake wrote for be-

ginners, and I feared lest the mass of statement and illus-

tration which their books contain, ordered and luminous

though it be, might tend to oppress and dishearten the stu- dent entering upon a course of reading for the School of Law, Being at that time the only public teacher of English law in the University, I had some practical acquaintance with the

sort of difficulties which beset the learner, and I endeavored

to supply the want which I have described. In working out the plan of my book I necessarily studied

the modes of treatment adopted by these two writers, and I

became aware that they are based on two totally different

principles. Mr. Leake treats the contract as a subject of litigation, from the point of view of the pleader's chambers. He seems to ask. What are the kinds of contract of which

this may be one ?

Then What have I got to prove ?

By

what defences may I be met ? Sir Frederick Pollock regards the subject ab extra; he inquires what is the nature of that

legal relation which we term contract, and how it is brought

about. He watches the parties coming to terms, tells us how the contract may be made, and by what flaws in its structure

Mr. Leake treats the subject from

it may be invalidated.

every point of view in which it can interest a litigant. Sir

Frederick Pollock wrote a treatise on the Formation of Con-

PREFACE TO THE SIXTH EDITION

Ix

tract: only in later editions has he introduced a chapter on

Performance.

To both these writers I must own myself to be under great

obligations. If I try to apportion my gratitude, I should say

that perhaps I obtained the most complete information on the

subject from Mr. Leake, but that Sir Frederick Pollock started

me on my way.

The object which I set before me was to trace the principles which govern the contractual obligation from its beginning to

its end; to show how a contract is made, what is needed to

make it binding, whom it may affect, how it is interpreted,

and how it may be discharged. I wished to do this in outline,

and in such a way as might best induce the student to refer

to cases, and to acquire the habit of going to original author-

ities instead of taking rules upon trust. So I have cited few

cases: not desiring to present to the reader all the modes in

which principles have been applied to facts, and perhaps im-

perceptibly qualified in their application, but rather to illustrate general rules by the most recent or most striking decisions.

In successive editions I have made some changes of arrange-

Since it

ment, and have tried to keep the book up to date.

first appeared, in 1879, the Legislature has been busy with

the law of contract. The law relating to Married Women's

Property, to Bankruptcy, to Bills of Exchange, to Partner- ship, to Mercantile Agency, has either been recast or thrown

for the first time into statutory form : the effects of the Judi- cature Act in the general application of equitable rules and

remedies have become gradually apparent in judicial decisions.

Thus it has been necessary to alter parts of my book from time

to time, but in this, the sixth, edition I have made many changes for the sake of greater clearness and better arrange-

ment. The whole of the chapters on Offer and Acceptance, on the Effects of Illegality, on the Discharge of Contract by Breach, and a great part of the chapters on Mistake and Fraud,

Infants and Married Women, have been rewritten, and the

rest of the book has undergone many minor alterations as

the result of a general revision.

I should add one word as to the place assigned to Agency.

It is a difficult subject to put precisely where the reader would expect to find it. It is a mode of forming the contractual

relation: it is also a form of the contract of employment.

From the first of these points of view it might form part of a

X

PREFACE TO THE SIXTH EDITION

chapter on Offer and Acceptance, regarding the agent as a

mode of communication; or it might form part of a chapter

on the Capacity of Parties, regarding representation as an

extension of contractual capacity; or, again, it might form part of a chapter on the Operation of Contract, regarding agency as a means whereby two persons may make a contract binding on a third.

But upon the whole I think it is best to try and make the

student understand that the agent represents his principal

in virtue of a special contract existing between them, the

contract of employment. There is a disadvantage, no doubt, in introducing into a treatise on the general principles of contract a chapter dealing with one of the special sorts of

contract, but I believe that the student will find less difficulty

in this part of the law if he is required to understand that the

agent acquires rights and incurs liabihties for his principal,

not in virtue of any occult theory of representation, but be-

cause he is employed for the purpose, by a contract which the

law recognizes.

I should not close this preface without an expression of

thanks to the friends who from time to time in the last ten

years have helped me with suggestions or corrections of this

book. To his Honor Judge Chalmers, to Sir Frederick Pollock,

and in especial to the Vinerian Professor, Mr. Dicey, I owe much in the way of friendly communication on points of

novelty or difficulty. Nor should a teacher of law be unmind-

ful of his debt to the student.

The process of explaining a

proposition of law to a mind unfamihar with legal ideas

necessitates a self-scrutiny which is apt to lead to a sad self-

conviction of ignorance or confusion of thought; and the diffi-

culties of the learner will often present in a new light what had

become a commonplace to the teacher. Therefore I would not

seem ungrateful to the law students of Trinity College, past

and present, whom I have tried, and sometimes not in vain, to interest in the law of contract.

I hope that the present edition of this book may be a little

shorter than the previous one. I strongly desire to keep it

within such limits as is proper to a statement of elementary

principles, with illustrations enough to explain the rules laid

down, and, as I hope, to induce the student to consult author-

ities for himself.

All Sotjls College, January, 1891.

W. R. A.

TABLE OF CONTENTS

PART I

PLACE OF CONTRACT IN JURISPRUDENCE

Outline of subject

Nature of contract: agreement and obligation

1. Analysis of agreement

Requisites of agreement Distinguished from contract

Characteristics of contract 2. Analysis of obligation Characteristics of obligation

Distinguished from duty

Sources or forms of obligation

3. Definition of contract

»s>

1

1

2

2

4

5

6

6

7

8

10

PART II

FORMATION OF CONTRACT

Elements necessary to a valid contract

Procedural matters

Terminology: void, voidable, unenforcible

CHAPTER I

Offer and Acceptance

1. Contract springs from acceptance of offer

12

12

15

19

Agreement traceable to question and answer .

.

.

.19

Forms of offer and acceptance

20

Unilateral and bilateral contracts

21

Executed and executory contracts

22

2. Offer and acceptance may be made by words or conduct

.

.

22

Tacit contract by conduct

22

Difference between express and implied contracts

.

.

. 22n

Inferences deducible from conduct

23

3. Offer must be communicated

24

Ignorance of offered promise

24

Ignorance of offered act

26

Ignorance of offered terms

26

xii

TABLE OF CONTENTS

4. Acceptance must be communicated or manifested .

.

.

.29

5. Acceptance manifested in manner prescribed by offer

.

.

.30

Modes of acceptance

30

Acceptance by doing an act

Acceptance by post or telegraph

31

Acceptance by making a promise

 

32

33

36

Place of acceptance Can acceptance be revoked?

37

6 Offer may lapse or be revoked

38

Lapse of offer: forms of

38

Revocation of offer

40

Valid before acceptance

40

Useless after acceptance

41

Offer under seal irrevocable

42

Must revocation be communicated?

44

Cook V. OxUy

45

Dichinson v. Dodd

46

Problems in revocation

47

7. Offer must contemplate legal relations

48

8. Acceptance must be absolute and correspond to offer

.

.

.50

Refusal and counter offer

51

Mere statement of price

51

New terms in acceptance

52

Questions of construction

53

9. Offer not made to ascertained person

54

Offer made to all the world

54

Offer of reward

55

Invitations to treat

56

CHAPTER II

Form and Consideration

Historical Introduction

60

History of formal contract

60

History of informal contract

61

History of remedies

62

History of consideration

64

Classification of contracts in English law

65

Formal Contract.

1. Contracts of record

66

2. Contracts under seal

69

How made

69

Characteristics

71

Statutory changes

73n

When seal essential

76

Simple Contract.

All simple contracts require consideration

.

.

.

.78

Simple contracts required to be in writing

.

.

.

.78

.

TABLE OF CONTENTS

Statute of Frauds.

1. Provisions of Fourth Section Nature' of contracts specified

Requirements of form

Effect of non-compliance

2. Provisions of Seventeenth Section

Nature of contract specified

xiii

»ao»

80

81

87

92

95

96

 

Requirements of form

99

Effect of non-compliance

99

Consideration.

 
 

Definition

100

1.

Necessity of: exceptions

100

2. Need not be adequate, but must be real

 

102

 

First test of reality: a detriment

105

Motive to be distinguished

105

Must consideration move from promisee 7 .

 

.

.

106

Second test of reality: ascertainable value

.

.

.

108

Impossible, uncertain or vague promises .

.

.

108

Forbearance to sue and compromise of suit

.

.

109

Gratuitous undertakings

Ill

Third test of reality: more than discharge of existing obligation

113

Performance of public duty

114

Promise to perform existing contract

.

.

.114

Performance of existing contract

.

.

.

.116

Payment of smaller sum in satisfaction of larger 116

Composition with creditors

.

.

.

Mutual subscriptions to a charity

.

.

.

Promise to perform contract with third person .

.

3. Must be legal

4. Must not be past

Executory and executed consideration General rule: Past consideration is no consideration

.

Exceptions apparent and real

Consideration moved by previous request .

 

.

Voluntary discharge of another's liabilities

.

Revival of obligation barred by rule of law

.

.

Additional security by debtor

CHAPTER III

Capacity of Parties

1. Political or professional status

2. Infancy: void, voidable, and binding contracts

Ratification of voidable contracts: common law and statute

Liability for necessaries Liability for torts originating in contract

-

3. Corporations

.

.

.

Lunatics and drunken persons 5. Married women

4.

Contracts void at common law: exceptions .

,

.

.119

120

121

124

124

124

126

127

.127

.130

133

136n

137

139

140

148

150

151

154

156

.156

sir

TABLE OF CONTENTS

Separate estate in equity

Separate estate by statute

English statutory changes American statutory changes

FAoa

157

158

159

160

CHAPTER IV

Reality of Consent

1. Mistake.

Non-operative mistake Operative mistake

As to nature or existence of contract As to identity of contracting party . As to identity of subject matter As to existence of subject matter As to intention known to other party Effect of mistake

2. Misrepresentation. General considerations and distinctions

Distinguished from fraud Distinguished from terms

Effects of misrepresentation generally

Effects of non-disclosure in contracts uftemTrecB^ffidei Remedies for misrepresentation No action for damages: exceptions

Estoppel

.

.

162

164

165

168

170

171

172

178

179

180

183

188

195

201

201

202

3. Fraud.

Essential features A false representation Of a material fact

204

205

207

209

Made intentionally or recklessly

With intent that it be acted upon by the injured party 214

Which actually deceives

216

Effects of fraud

216

Remedies ex delicto

216

Remedies ex contractu

216

4. Duress.

Its nature and effect

219

5. Undue Influence.

How distinguished from fraud: definition

220

When presumed

222

Inequality of parties

222

Special relation of parties

223

When to be proved

224

TABLE OF CONTENTS

CHAPTER V

Legality of Object

PAGE

1. Nature of illegality

 

227

(i)

Contracts illegal by statute

227

General rules of construction

227

Sunday statutes

229

Wagering contracts

229

Definition

230

History: common law and statute

232

On rise and fall of prices

236

Insurance

 

238

(ii) Contracts illegal at common law

240

Agreements to conmxit crime or civil wrong

.

.

.

240

 

Agreements against public policy

241

Affecting interstate relations

242

Injuring public service

243

Perverting course of justice

244

Abusing legal process

246

Against good morals

248

Affecting freedom or security of marriage

.

.

.

248

In restraint of trade

249

2. Effect of illegality

 

253

(i)

When the contract is divisible

253

(ii)

When the contract is indivisible

254

(iii)

Comparative effect of avoidance and illegality

.

.

.

255

(iv) The intention of the parties

 

259

(v) Securities for money due on illegal contract

.

.

.

260

Securities under seal

 

261

 

Negotiable instruments

262

(vi) ReUef from illegal contract

 

264

 

General rule

264

Exceptions: parties not in pari delicto

.

.

.

265

Exceptions: contract executory

266

The locits poenifenticE

266

Money in hand of stockholder

268

(vii) Contracts lawful where made but unlawful by lex fori

.

269

 

PART III

THE OPERATION OF CONTRACT

 

CHAPTER I

The Limits of the Contractual Obligation

 

General rule as to privity of contract

 

273

Exceptions: agency and trust

273

1. Third party incurring liabilities

274

No contractual obligation

274

But non-contractual duty

275

xvi

TABLE OF CONTENTS

2. Third party acquiring rights

Promise for benefit of third party

Doctrine in equity

Special doctrines of agency

FAas

277

277

279

281

 

American doctrine

 

282

 

CHAPTER II

 

The Assignment of Contract

1. Assignment by act of the parties

 

289

 

Liabilities cannot be assigned

289

Assignment of rights

 

290

At common law

290

In equity: notice; title By statute

.

.

292

296

By the law merchant: negotiability

298

2.

Assignment by operation of law

 

307

By transfer of interest in land

307

In case of leasehold interests

307

In case of freehold interests

309

By marriage

311

By death

311

By bankruptcy

 

312

 

CHAPTER III

 

Joint Contracts. Joint and Several Contracts

Classification of joint contracts

 

314

Joint promisors

.

315

Joint and several promisors

 

316

Joint promisees

 

317

Joint or several promisees

 

317

PART lY

 

THE INTERPRETATION OF CONTRACT

 

CHAPTER I

 

Bules relating to Evidence

Province of court and jury

320

Difference in proof of formal and simple contracts

321

1. Proof of document purporting to be contract

322

2.

Evidence as to fact of agreement

 

323

3.

Evidence as to terms of contract

325

Supplementary or collateral terms

325

Explanation of terms

 

326

Proof of usage

328

Extrinsic evidence in equity

329

TABLE OF CONTENTS

CHAPTER II

Rules relating to Construction

1 . General rules

2. Rules a!3 to time and penalties

PAGE

332

333

PART Y

DISCHARGE OF CONTRACT

CHAPTER I

Discharge of Contract by Agreement

1. Waiver .

2. Substituted contract

3. Provisions for discharge Discharge optional on non-fulfillment of term

.

.

.

.

.

Discharge on condition subsequent

Discharge optional on notice

4. Form necessary for discharge

CHAPTER II

.

.

.

.

'.

335

340

342

342

343

345

346

Discharge of Contract by Performance

When performance discharges .

Payment as a mode of discharge Tender as a mode of discharge .

Substantial performance .

Performance to satisfaction of other party

348

348

350

352

353

CHAPTER III

Discharge of Contract by Breach

Breach gives right of action, but not always discharge 1 Position of party discharged by breach

Exonerated from further performance

May sue in indebitatus assumpsit . May sue for breach of contract

356

357

357

357

358n

2.

Forms of discharge by breach

360

Discharge before performance due .

360

Renunciation before performance due

360

Impossibility created before performance due

363

Discharge in course of performance .

363

Renunciation during performance

363

xviii

TABLE OF CONTENTS

Breach by failure of performance

Conditional and independent promises

365

36.5

 

Problems involved

367

Absolute promises and concurrent conditions .

.

368

Divisible and indivisible promises

370

Vital and non-vital