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INTRODUCTION

Law. The rules and principles, by which society compels or
restrains its members, are called Laws.

The purpose of law is to secure to every man the enjoyment of
all his rights as a member of a given community or state.

In this country and in England there are two great divisions
of the law, the written, or Statute Law, and the unwritten, or
Common Law.

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Statute Law. — Statute Law is the express, written will of
the legislature.

Common Law. The Common Law includes those princi,
ples, usages and rules of action, which do not rest for their
authority on any positive declaration of the legislature, but upon
their long continued acceptance in the daily life of a state and their
adoption in judicial decisions.

The common law is everywhere in force unless modified by
statute.

Many of the statute laws of England, passed before our sepa-
ration from that country, have become a part of our common law.

A knowledge of what the common law is can only be gained
from the reports of the decisions of the courts.

In this country each state has its own set of reports, confined,
in most of them, to the decisions of the Supreme Court. There are
also reports of the Federal, or United States, Courts.

Strictly speaking, until a custom has received the sanction of
the legislature or of the court of last appeal (or the Supreme
Court), it is not a law, however well established it may be.

Law Merchant.— That portion of the law governing mer-

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cantile transactions is called the Law Merchant. It originated in the
custom of merchants, and at present has become a recognized part
of the law both by enactment and adoption.

Property. - The rules of business law apply to the handling of Property, and property may be either Real or Personal.

Real Property, spoken of ordinarily as “real estate,” in a general sense includes lands, houses and buildings, and other objects, such as fences, trees, mines, etc., which are permanently affixed to the lands or buildings.

Personal Property includes all other kinds of property, the general distinction being that personal property may be moved about from place to place. It would also include leases, mortgages, patent rights, copyrights, promissory notes, bills of exchange, bonds, stock, bank bills, etc., which are really only certificates of rights to property or money.

All business law might properly be considered under the single title, “Contracts"; for business transactions consist almost entirely in the making and performing of contracts, in one form or another. For convenience, however, it is generally considered under a number of different subjects, the most important of which here appear in Part One.

The same principles which govern contracts generally, apply to all the other subjects. But in negotiable paper the custom of merchants has added some peculiar rules which do not apply to other contracts. And in bailments, too, a legal obligation is created from the relations of the parties, which they cannot rid themselves of altogether by any contract they may make. The laws of real property are so technical, and are the result of such a long historical development, that it is impossible in a few pages to give any useful or satisfactory idea of them. Therefore only a few of the rules in regard to the execution and recording and the effect of the different kinds of conveyances are given. .

Part Two is devoted to some special matters such as the laws relating to the collection of debts, interest, insurance, patentrights, trade-marks and copyrights. These are all matters which have been very generally the subjects of legislation. The result is to produce as many different systems of rules as there are states. These differences cannot be stated accurately and at the same time briefly, and consequently this has not been attempted except in the case of interest.

In Part Three will be found questions and exercises for school use, and some legal forms in common use in business, to serve as illustrations for those who as yet are not familiar with them.

PART ONE.

CHAPTER 1.- CONTRACTS.

What a Contract Is.- An agreement, duly entered into, by competent parties, for a legally sufficient consideration, to do or not to do some specific thing, is a Contract.

In order to constitute a binding contract there must be, therefore, (1) an agreement (2) properly made (3) by parties who are lawfully able to contract, and (4) founded on a consideration legally sufficient, (5) for some stated object.

These five essentials are taken up in order below.

Of the Agreement. - The agreement is the assent of the parties to the thing to be done. Ordinarily there are but two parties to a contract, though either one or both parties may consist of several persons. Each party must clearly express his assent before he is legally bound.

Thus, a proposal by one party must be accepted by the other within the time allowed in the proposal, or a reasonable time, if none is given ; and the proposer must know of its acceptance. He can withdraw his offer, too, before it is accepted.

The acceptance must be of the exact offer made ; and, if the offer is once rejected, it can only be accepted afterwards on a renewal of the offer by the proposer.

If assent is given under an honest mistake as to the identity of the proposer, or the existence or identity of the thing contracted for, it will not bind the party so accepting.

For example: if one bids on the wrong number at an auction, and on discovering his mistake immediately notifies the auctioneer, he need not take and pay for the article thus bidden off.

But a mistake, however honest, as to the value or quality of the thing contracted for, or its adaptability to some purpose, or as to

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some general law of the land will not avoid * a contract. Every man is presumed to know the law of his own country and state, though not of other countries, or even of other states.

Where assent is given under some illegal compulsion or straint, or under threatened violence, the contract is not binding.

Or, if it is obtained by a fraudulent representation it is not binding To be fraudulent, however, the representation must be of a material fact, made with a knowledge of its falsity, and an intention to deceive, and of such a nature as to deceive an ordinary man.

A mere statement of opinion, and generally of value, though falsely made, is not considered fraud in law. For example: if one told an expectant purchaser of a horse that it was worth $1000, when he knew it was only worth $500, this would not be a fraudulent representation.

A representation may be made by acts as well as by words ; and silence, where there is a special obligation to speak out, will avoid a contract; as, in effecting insurance, where a fact is concealed which would prevent insurance; or in a bank's securing sureties for a cashier whom they know to be dishonest; or in selling goods with secret defects.

In all cases a fraudulent representation must have succeeded in defrauding in order to invalidate a contract.

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How Contracts Are Made. — A contract may be made in writing, or orally, or even by a sign or nod. A written contract is preferable ; for, in case a suit should be brought on it in court, its written terms cannot as a rule be altered by oral evidence.

When a proposal is made by letter or telegram, the contract is generally considered closed when the letter of acceptance is mailed or the telegram of acceptance left at the proper office for transmission.

The law is not yet definitely settled whether contracts by letter are closed on the mailing of the acceptance or on its receipt. All

* An agreement, which, for any reason whatever, has lost its binding force on both parties as a contract, is then void. Contracts made by certain classes of persons who, from reasons of public policy, are allowed to choose whether they will be bound on their agreements or not, are voidable, since the person possessing this privilege may aroid or annul his contracts, otherwise binding, at his option; as will be seen later, under “Minors,” “Married Women,” etc.

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