ENGINEERING LAW VOLUME I THE LAW OF CONTRACT CHAPTER I THE CONTRACT: ITS INHERENT ELEMENTS An investigation of the law of contract naturally divides itself into five parts: 1. The meaning of the term: what a contract really is. 2. The construction of the contract: the components of a valid contract. 3. The parties affected: those whom it may affect primarily or whom it may be made to affect by means of a transfer. 4. The fulfillment of the terms specified or implied: the performance of the contract. 5. The termination of the contractual liability: the discharge. What is a contract? No exact definition is attempted nor has one been found which is entirely satisfactory. All of the definitions by the acknowledged authorities, however, express the idea with sufficient exactitude to fit most cases. Thus we find a contract defined as: A deliberate engagement between competent parties upon a legal consideration to do or to abstain from doing some act. Story, Contr. §1. An agreement upon sufficient consideration to do or not to do a particular thing. 2 Bla. Com. 446; 1 Kent 449. An agreement enforceable at law, made between two or more persons, by which rights are acquired by one or both to acts or forbearances on the part of the other or others. Anson, Contr. 9. In these definitions the word agreement needs defining as well as contract; the consideration, which is essential to the validity of some classes of contracts, really forms no part of the idea; moreover, the conception of mutuality which distinguishes a contract from a promise is not made sufficiently prominent. Of the various classes of contracts the following are the most important: Executed contracts: those in which nothing remains to be done by either party, where the transaction is complete at the time the contract is made: as the sale of an article, delivery and payment being simultaneous. Executory contracts: those in which some act remains to be done: as when an agreement is made to build a bridge, house, etc., in one year from date. Contracts of record: those which are entered into by the intervention of some public authority, and are evidenced by matter of record, such as a judgment. Severable contracts: those the considerations of which may be divided or apportioned on either side, so as to correspond with the several parts of the consideration on the other side. Simple or parol contracts: all those which are not contracts of record or specialties. They constitute the lowest class of contracts. Specialties: contracts which are under seal; as bonds and deeds or writings sealed and delivered, which are given as security for the payment of a debt, and in which such debt is particularly specified. Unilateral contracts: those which call for an act, not a counterpromise, and in which the party to whom the promise is made enters upon no express agreement. Bilateral contracts: those in which both parties make promises. as, for instance: A promises to buy certain goods, when made, at a fixed price, and B promises to manufacture the goods and sell them to A at the specified price. Quasi-contracts: those in which the law imposed an obligation, where the defendant did not intend to assume one; they are founded upon the doctrine that no one shall be allowed to enrich himself unjustly at the expense of another. AGREEMENT. In a contract there are two inseparable ideas, agreement and obligation. The agreement creates the contractual obligation. We may have agreement of a certain kind in the minds of the parties, but if it does not contemplate bringing into existence a contractual obligation of one party to the other, it is not the agreement which makes a contract. Characteristics. 1. There must be the intent to contract in the minds of both parties. To illustrate: Jones says to Smith, "My house needs painting." Smith says to Jones, "I think so, too." There is perfect agreement of the two minds, but no intention to contract. Brown in speaking to Green says, "Will you dig this cellar for $50?" Green replies, "I will." Here there is both agreement and the necessary intention to form a contract. 2. There must be the communication of this intent from each party to the other. Thus a mental note, unexpressed in any way, that one party agrees to the other's proposition, will not create a binding agreement.2 Thinking assent is not sufficient. 3. There must be two or more parties. A man cannot agree with himself: there must be at least two minds. A person cannot contract with himself nor maintain an action against himself.3 4. The parties must have in mind a legal relationship as contrasted with one of a social nature.* To sum up, contract is that particular sort of agreement which contemplates the formation of an obligation between the parties. OBLIGATION. Obligation is a legal bond whereby constraint is laid upon a person or group of persons to act or forbear to act on behalf of another person or group. Anson, Contr. 6. 1 Minneapolis &c. Ry. v. Columbus Rolling Mill, 119 U. S. 149, H. & W. 74; Rupley v. Daggett, 74 Ill. 351. 2"A mental determination not indicated by speech, or put in course of indication by act to the other party, is not an acceptance which will bind the other. Nor does an act, which, in itself, is no indication of an acceptance, become such, because accompanied by an unevinced mental determination." Folger, J., in White v. Corlies, 46 N. Y. 467, H. & W. 7. 3 Eastman v. Wright, 6 Pick. (Mass.) 316. 4 Keller v. Holderman, 11 Mich. 248, H. & W. 71; McClurg v. Terry, 21 N. J. Eq. 225, H. & W. 72. |