Page:Encyclopædia Britannica, Ninth Edition, v. 6.djvu/353

CONTRACT expressed by a phrase used in one of the earliest cases on the subject it is strictly a quid pro quo. Something, whether it be in the nature of an act or a forbearance, must move from one of the parties in order to support a promise made by the other. A mere promise by A to give something to B cannot be enforced unless there is some consideration " moving from B." Such a promise the early lawyers called a nude or naked promise in imitation of the phrase in Roman law, nudum pactum, which does not, however, mean a promise unsupported by a consideration, but a contract destitute of certain essential legal formalities. But while every contract requires a consideration, it is held that the court will not inquire into the adequacy thereof ; any consideration will do. Inadequacy of consideration, however, may be important where a contract is to be get aside on the ground of fraud. Modem English law requires no formalities to make a contract enforceable, unless in certain special cases. The ancient rule both in early English and Roman law made certain formalities essential, unless in certain special cases. The ancient rule is thus the modern exception. The exceptions to the general rule in English law are the following : 1. Contracts within the Statute of Frauds, 29 Car. II. c. 3. The fourth section of this important Act specifies certain classes of con tracts in which " no action shall be brought " unless the agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorized. Such contracts are (1) any special promise by an executor or administrator to answer damages out of his own estate ; (2) any promise to answer for the debt, default, or miscarriage of another person ; (3) any agreement made on consideration of marriage ; (4) any contract or sale of lands, tenements, or here ditaments, or any interest in or concerning them ; (5) any agree ment that is not to be performed within the space of one year from the making thereof. The 17th section enacts that no contract for the sale of any goods, wares, or merchandize for the price of 1 sterling or upwards shall be allowed to be good, except the buyer shall first accept part of the goods so sold, and actually receive the same, or shall give something in earnest to bind the bargain or in part payment ; or unless some memorandum or note in writing of the said bargain be made and signed by the parties to be charged, or their authorized agents. The difference between the two sections should be noted. Contracts under the 17th section are simply void ; contracts under the 4th are not void, but they are not en forceable. The 4th section is a law of procedure, and therefore a contract of the kind specified therein validly made in a foreign country could not be enforced in England, whereas a valid contract made abroad, which would be wholly void if made in England, under the 1 7th section, might be enforced in England. And again, money paid under an agreement made unenforceable by section 4 could not be recovered back. 2. Contracts of corporations, already alluded to. 3. Negotiable instruments, which must, of course, be in writing. 4. Other cases in which writing is required are transfer of ships, assignments of copyright, and ratification of debts barred by the Statute of Limitations. To contracts made by deed (i.e., under seal) the law attributes certain qualities which do not belong to simple contracts, i.e., contracts whether verbal or in writing without seal. The peculiar properties of a deed are thus described : " It works a merger ; it operates by way of estoppel ; it requires no consideration to support it ; it will in some cases bind the heir of the covenanter or obligor; it can only be discharged by an instrument under seal, by the judgment of a court of competent authority, or by Act of Parliament." The language of the law-books is that from the solemnity of a deed the law itself will imply the existence of a consideration, a formula designed to bring the exceptional case of deeds within the general legal theory of consideration, and by no means to be accepted as an his torical explanation. The subordinate agreements in a deed are termed covenants. The formal definition, as given in Platt on Covenants, is " an agreement between two or more persons by an instrument in writing sealed and delivered, whereby some of the parties engage, or one of them engages with the other or others of them, that some act hath or hath not been already done, or for the performance or non -performance of some specified duty." See DEED. An agreement is said to be void for impossibility when the thing contemplated is in itself impossible, as contrary to the course of nature, and when it is by construction of law impossible, e.g., to create a new manor. But when the thing is not in itself impossible, but is or becomes impossible in fact, an unconditional agreement is not thereby void. Thus a contract to load a full cargo of guano at a certain island does not become void by the fact that there is not enough guano on the island to make a full cargo. In a recent case (Thorn v. Lord Mayor of London) a con tractor, who had undertaken to build a bridge according to specifications supplied by defendant, found it impossible to execute part of the work according to specification, and it had to be executed in another way. It was held that there was no condition that the plans should be reasonably prac ticable, and the plaintiff was not allowed to recover for work executed in an impossible attempt to comply with the specifications. In another case, a contractor bound himself under penalties to finish some buildings within a certain time, with any alterations and additions required by the defendants, and no extension of time was to be allowed for such alterations, unless expressly granted by defendants. It was held that the contractor could not excuse himself for non-completion within the proper time by showing that the alterations and additions made it impossible. Besides the contracts which are void through defect of form or want of capacity in the parties, there is a large class of agreements which the law refuses to recognize on account of the character of the contemplated action. These may be reduced to three main divisions illegal contracts, when the thing to be done is forbidden by law ; immoral con tracts, when the consideration belongs to the indefinite class of things recognized as immoral ; and contracts, against public policy, i.e., certain wide and more or less IE definite principles of government. In some cases, the act of agree ment is in itself a criminal offence, for which see CONSPIRACY. An agreement to commit an offence, as to burn a house, or kill a man, or an agreement to do a civil injury to another, would be illegal. Promises made in con sideration of illicit cohabitation in the future are void as immoral ; if the consideration is illicit cohabitation in the past, it is of course no consideration, and a promise founded upon it will be void unless expressed in a deed. Of agreements which are void as being against public policy, the most important class is that of contracts in restraint of trade. The leading authority on this subject is the case of Mitchell v. Reynolds (1 /Smith s Leading Cases}. The law, it seems, is so jealous of the freedom of the trader, that it will not allow him to part with it on any considera tion. " It is the privilege of a trader in a free country, in all matters not contrary to law, to regulate his own mode of carrying it on according to his own discretion and choice. If the law has regulated or restrained his mode of doing this, the law must be obeyed. But no power short of the general law ought to restrain his free discretion." It has been suggested that the rule dates from a time when a covenant by a man not to exercise his own trade meant a covenant not to exercise any trade at all, every man being obliged to confine himself to the trade to which he had been apprenticed. At any rate, it is difficult to reconcile this protection of the individual will, carried to the point of absolutely limiting its exercise in one class of cases, with modern principles as to freedom of trade and contract. And the law itself breaks in upon its own theory by admitting that contracts which are only in partial restraint

of trade may be good. A contract not to carry on the