undue influence, refuse to carry out the express agreements of the parties when it would be a gross injustice to the one party to enforce them.6o

54. Right to rescind for undue influence.-In general, the right to avoid a contract for undue influence is the same as in the case of fraud, with this exception, that while an affirmation of the contract after knowledge of fraud binds the party, in the case of undue influence he will not be bound by such affirmation unless it is clear that the influence or difficulty under which he labored is entirely removed.61

55. Rescission.-Rescission may take place when the party entitled to rescind puts an end to the contract out of court, as where the buyer of an article who has been deceived by the seller tenders back the article. Or, the rescission may occur when the party entitled to rescind sets up in his plea the facts justifying the rescission. Again, the courts may rescind the contract, as in the case of undue influence.62

The election to rescind may be made expressly or by acts evidencing an intention not to treat the contract as binding. Furthermore, a party must exercise his right to rescind within a reasonable time after he is aware of the facts. Moreover, if the party defrauded takes any benefit under the contract or does any act implying an intention to abide by the contract, he loses his right to rescind. Thus, if A, who is the defrauded party, sues on the contract, he affirms it and rescission is barred.

60 Dorrill v. Eaton, 35 Mich. 302.

61 Anson, Contracts (Huffcut's 2d ed.), § 234. 62 Harriman, Contracts (2d ed.), chap. 24.

A contract may be rescinded only where it is possible to place the parties in statu quo, that is, in their original position and with their original rights. Moreover, it must be rescinded wholly, and not in part. A party may not affirm a contract in part and repudiate it in part. The rescinding party must also restore the consideration which he has received under the contract. Thus where A has been induced by fraud to buy goods, in order to avoid the contract upon the discovery of the fraud, he must return the goods. Consequently, after consuming the goods wholly or in part the buyer may not avoid the contract. But where the thing is utterly worthless, as a forged note, the party defrauded need not return it. Another rule adopted by some modern cases is to credit that which was received, rather than to require its return. This doctrine has arisen because a strict observance of the restoration rule frequently protects the party guilty of fraud.63

63 O'Brien v. Chicago, etc., R. Co., 89 Ia. 644; Chicago, etc., R. Co. v. Lewis, 109 Ill. 120.

CHAPTER IV.

CONTRACTS UNDER SEAL.

56. History of sealed instruments.-Historically, the earliest forms of contract depended for their validity entirely upon their form. It was necessary to attach a seal to an agreement in order to make it binding. Later, through the influence and efforts of courts of equity, the doctrine of consideration arose. There were then two methods of creating a contract: one was to attach a seal, the other was to furnish a consideration.64 1.64 Through modern legislation and decisions, courts have forgotten the history of the law of contracts and now state the rule to be that every contract requires a consideration, and that a seal is sufficient because it imports a consideration. This is an incorrect statement, for seals existed before the doctrine of consideration arose. Moreover, in equity proceedings, the chancellor will not enforce a contract under seal, unless there is a consideration. This demonstrates the inconsistency of the statement that a seal imports a consideration, for if it does, then the specialty should be enforced. It is sufficient to say that in a court of common law, a seal requires no consideration.65

57. Seals.-Seals are of two kinds, public and private. Public or official seals are those used by

64 2 Pollock & Maitland, History of English Law, 184-233; Ames, History of Assumpsit, 2 Harvard Law Review 53.

65 McMillan v. Ames, 33 Minn. 257, LEADING ILLUSTRATIVE CASES.

public officers for the authentication of public documents. Private seals are those used by individuals in the execution of personal or private contracts. Any contract may be under seal, if the parties so elect; and there are some contracts which are invalid without a seal, as a deed for the conveyance of real estate. At common law there must be an impression to constitute a seal. But by statutes, a seal may be either of wax, or of ink, or a wafer. It may be in print, or it may be a scrawl. Seals are made in various ways, the most common forms being "(L.S.)”

or "(SEAL)."

One seal may do for any number of parties signing a deed, if each one adopts it as his own. Naturally, as a practical matter, it is advisable to have a separate seal for each signature.66

58. Contracts under seal and specialties.-A contract under seal, or a specialty, may be sued upon in a court of common law, regardless of the passing of a consideration. One may make a gift in writing and if he places his seal thereon he is liable in damages if he refuses to abide by his writing. It is the presence of the seal that makes a specialty enforcible at common law, and this is true regardless of the question of consideration. There are two cases under the old common law which require that contracts be under seal. The one, as indicated, is where the contract has no consideration; the second is where the contract was made by a corporation. The latter rule is generally repudiated in the United States. The old common law did not, however, require a

66 Walker, American Law, pp. 463-464; Pickens v. Rymer, 90 N. C. 282.

conveyance of land to be by deed and under seal, but this has become necessary in most jurisdictions.

68

67

At common law, the presence of a seal precluded the denial of the recitals of the contract. Statements made in a deed under seal were absolutely conclusive against the parties. Furthermore, a contract under seal, being of a higher nature, superseded a simple contract upon the same subject matter. This is the doctrine of merger. 69 Similarly, a debt due under a sealed contract was entitled to a priority out of the assets of the deceased, before debts due upon contracts not under seal. But this doctrine has been generally eliminated by statutes of distribution.70

Quite generally a right of action arising upon a simple contract is barred by the Statutes of Limitations in less time than an action arising from a contract under seal.71

59. Same subject-Deeds, bonds, records.-(1) Deeds. The term "deed" is applicable to all contracts under seal, but it is now most frequently used in a limited sense to denote an instrument for the conveyance or incumbrance of real estate. Its execution consists in its being "signed, sealed and delivered," and it is then conclusive between the parties. Its form and requisites will be fully discussed under the subject, Real Property, in a subsequent volume of this series.

Formerly there was a distinction between instru

67 See subject, REAL PROPERTY; Clark, Contracts (2d ed.), § 64. 68 2 Kent, Commentaries, p. 464; Sage v. Jones, 47 Ind. 122.

69 Banorgee v. Hovey, 5 Mass. 11.

70 Walker, American Law, p. 465.

71 See "Limitations of Actions" in state statutes.