little evidence is required to show the consent of the original debtor. Where A has a claim against B, two steps are necessary to turn the claim into one of C against B. Such a substitution of creditors requires an assignment of his claim by A to C, and then C must contract with B. That contract will be, in effect, an agreement by which, in consideration of A's release, B promises to pay C.

Similarly, if A owes B and B owes C, an agreement may be made whereby A pays C. That is, C makes a contract with B never to sue him, in consideration that B assigns to C his claim against A. Then C contracts with A never to enforce the assigned claim, in consideration of A's promise to C. The result is that B drops out of the transaction entirely.

196. Form. The ancient rule of the common law required that a contract must be discharged in the same form, or in as high a form, as that in which it is made. Hence, an executory agreement under seal could not be discharged by a parol agreement, whether oral or in writing.33 This rule has been qualified. The time fixed for the performance of a sealed agreement may generally be extended by parol. Similarly, may terms be waived.34 Furthermore, the parties may fix the time of performance by parol, if the sealed contract is silent on that score. A specialty may be modified or rescinded by an executed parol contract.35 The parties having acted upon the parol agreement and altered their situation, it would be an

33 See cases collected, 9 Cyclopedia Law and Procedure, p. 596; McCreery v. Day, 119 N. Y. 1, LEADING ILLUSTRATIVE CASES.

34 Moses v. Loomis, 156 Ill. 392.

35 Cooke v. Murphy, 70 Ill. 96; Green v. Wells, 2 Cal. 584.

injustice not to give it effect. So it is held that the specialty may be discharged by a parol contract after there has been a breach.37

A simple contract, whether oral or written, may be discharged by a subsequent oral or written contract.38 The fact that the written contract provides that no modification shall be made except in writing, is immaterial, for that very provision may be changed by word of mouth, if both parties agree.

39

But where by reason of the Statute of Frauds a contract must be in writing, the new contract must also be in writing. This rule applies particularly to cases where the new agreement is substituted for the old.40

197. Provisions for discharge. The parties may have agreed by its terms that a contract may be discharged by the non-fulfillment of a certain term, or by the occurrence of some event. Thus, in a bond, A is held bound to B in a certain sum, but upon the faithful performance by A of his duties, the bond is to be void. Further illustrations are to be found in the accepted risks of a charter party, whereby the ship owner agrees with the charterer to make the voyage on the terms expressed in the contract, the act of God, fire, etc., excepted. Similarly, the bills of lading of common carriers contain numerous

36 Robinson v. Bullock, 66 Ala. 548.

41

37 McCreery v. Day, 119 N. Y. 1, LEADING ILLUSTRATIVE CASES.

38 Munroe v. Perkins, 9 Pick. 298 (Mass.).

39 Ford v. U. S., 17 Ct. Cl. 60 (U. S.); Westchester Fire Ins. Co. v. Earle, 33 Mich. 143.

40 Abell v. Munson, 18 Mich. 306; Browne, Statute of Frauds (5th ed.), p. 411.

41 Anson, Contracts (Huffcut's 2d ed.), § 343.

terms limiting their liability, and insurance companies provide that the occurrence of some event, for example, leaving the insured premises vacant, may discharge the contract.42

A bought a horse of B. The contract of sale provided that the horse was warranted to have been hunted with the Bicester hounds, and that if it did not answer to this description the buyer should be permitted to return the animal by the evening of a specified day. The horse had never been hunted with the Bicester hounds, and A returned it within the time specified. But in the meantime the horse had been injured, but through no fault of A. It was held that A need not keep the horse. "The effect of the contract," said Cleasby, B.,43 "was to vest the property in the buyer, subject to a right of rescission in a particular event, when it would vest in the seller. I think in such a case that the person who is eventually entitled to the property in the chattel ought to bear any loss arising from any depreciation in its value caused by an accident for which nobody is in fault. Here the defendant is the person in whom the property revested, and he must therefore bear the loss." Under such a contract, the vendee may refuse to receive the chattel at all, if he discovers that the terms be not fulfilled. If he receives it, he may return it upon discovering the non-fulfillment of the term; but if he has by his own fault injured the chattel, he is not entitled to return it.44

42 Moore v. Phoenix Ins. Co., 62 N. H. 240.

43 Head v. Tattersall, L. R. 7 Ex, 7, 14 (Eng.).

44 Ganson v. Madigan, 13 Wis. 67; Ray v. Thompson, 12 Cush. 281, (Mass.), LEADING ILLUSTRATIVE CASES.

A third form of contract providing for its own discharge is that wherein the agreement is determinable at the option of one of the parties upon certain terms. Such provisions are usually inserted in contracts of personal service. Thus, by the terms of the agreement the master may terminate the contract by giving a month's notice or by the payment of an extra sum, and the servant may discharge his obligations by giving a certain notice.45

The optional discharge of a contract by non-fulfillment of a term is akin to discharge for breach of contract. But the former is based on the agreement of the parties that such non-fulfillment shall be a discharge, whereas the latter is a discharge regardless of the contemplation of the parties.

Considerable difficulty is experienced in determining whether or not the examples given are conditions precedent or conditions subsequent. But the contract of the sale of the horse probably provided for a condition precedent, because the moment the vendor failed to sell a horse of the description prescribed, there was a non-fulfillment of a term. Whereas, in the case of the bond, it was not the non-fulfillment but the occurrence of the event that terminated the obligation. The event is clearly a condition subsequent.

45 Nowlan v.

Ablett, 2 C. M. & R. 54 (Eng.); Miller v. Goddard, 34 Me. 102.

198.

CHAPTER XVII.

DISCHARGE BY PERFORMANCE.

Performance.-When a contract has been fully performed by both sides and according to its terms, it is thereby discharged. Similarly, where a promise is given upon an executed consideration, performance by the promisor discharges the contract, for all has been done on both sides that could be required to be done under the contract. But where the contract is executory, that is, where one promise is given in consideration of another, performance of his promise by A does not discharge the contract, although it may discharge him from further liability. The contract is still in existence.46

It is well to distinguish between performance and discharge, in that while performance is a mode of discharge, discharge is not performance.

Furthermore, discharge by performance is to be distinguished from discharge by breach of performance. Thus, A and B by performance discharge their contract. But if A performs and B does not, B has broken the contract by failure to perform. Although as suggested, A may be excused from further performance, the contract is not necessarily discharged. A right of action arises, which is treated in a subsequent chapter.

199. Payment.-Payment is a common mode of 46 Anson, Contracts (Huffcut's 2d ed.), § 36.