refuse to interfere at all. The parties are simply left as they are, to straighten the matter out as best they can.

Notes:

1. A contract to do anything unlawful cannot be enforced.

2. No money paid on such a contract can be recovered. 3. No services so rendered can be made the basis of a suit.

$40. The Law of Place

The law which governs a contract is the law of the place where it was made. If it is to be performed elsewhere, the parties may, if they wish, expressly state that it is made in conformity with the law of the state where it is to be performed, provided they do not do so in an attempt to evade the law of the state where it was made. A contract made in good faith to be performed elsewhere need not comply with the law of the state where it was made if there is a conflict between the two laws, but the fact that it is to be governed by the law of a state other than that in which it was made must always be expressly stated in the contract. § 38.)

§41. The Subject Matter Must Exist

(See also

There must be some subject matter in existence to contract about. If the contract were to add a wing to a house and the house were burned down at the time of the agreement without the knowledge of the contracting parties, there would be no contract. If, however, the contract was about something that has been lost or destroyed but that might be replaced, such as a contract for the sale of grain, the contract is valid and the party who agreed to deliver the grain must procure it elsewhere. (See also § 88.)

§ 42. Agreement of the Parties

It is essential that the parties to a contract agree on the terms; or, in legal phraseology, that "their minds meet." This agreement results usually from an offer made by one party which is accepted by the other. The offer or proposal may be oral or written, and the acceptance may be oral or written. The simplest form of contract is an offer to sell goods at a specified price and an acceptance of the goods at that price. If this offer is made by letter and the acceptance is made by letter, the two letters taken together constitute a complete contract of sale. Some other points might be mentioned, but these the law will supply. When nothing is said as to terms, the law implies cash. When nothing is said about delivery, the law implies that the buyer will be entitled to delivery when he pays the price. (See Chapter XVI.)

Acceptance by Mail or Telegraph. If the party making the offer requests an answer by mail or telegraph, the postoffice or the telegraph company becomes his agent to receive the acceptance, and the agreement becomes effective the moment a properly stamped and addressed letter of acceptance is deposited in the mail-box (even though the letter does not reach its destination) or the moment a prepaid telegram (unless the other party had directed that it be sent "collect") with the proper address, is given to the telegraph company to

be sent.

The point is important because the person making the offer has a right to withdraw it if he informs the other party of his change of decision before the other party has accepted, i.e., has put a letter in the mail or has sent a telegram of acceptance. In other words, a contract may be complete before the acceptance is actually received, and it is then too late to withdraw the offer.

If a party makes an offer by mail or telegraph, he is regarded as having requested a reply by the same means

unless he expressly asks for a reply in some other way; so that if the party receiving the offer replies in the same way, his acceptance becomes effective from the moment he mails it or gives it to the telegraph company to send. If, on the contrary, he replies in some other way, there is no agreement until the answer actually reaches the other party. In this last case, if the first party sends a letter withdrawing the offer and this letter arrives at its destination before the letter of acceptance reaches the first party, there is no agreement. Manner of Acceptance. The offer must be accepted in accordance with its terms. To accept an offer in any terms other than those in which it was made amounts to a refusal. The first party may decide to accept the new terms, in which case there will be a new and different agreement, but he has the privilege of rejecting the proposed contract entirely. If the offer was made to one person only, another could not accept it; if made for a limited time, it must be accepted within that time. Advertisements offering a reward for the return of lost articles are made to the public in general and the offer may be accepted by anyone who finds the goods. An offer cannot be accepted, however, after the party who made it dies or becomes insane, and it must in any case be accepted within a reasonable time; people cannot be held to offers made long ago and forgotten, or after the circumstances which led to the offers have changed. What constitutes a reasonable time will depend on the circumstances. The party who makes the offer may set a time limit for its acceptance, after the expiration of which the offer is no longer open for acceptance. It is always prudent to accept a desirable offer promptly.

Options. In negotiations an option or refusal may be given, good for a certain time. Unless something has been paid for an option, it may be revoked at any time because it is an agreement without consideration. An option so given

is a contingent offer and may be accepted at any time before withdrawal or expiration of time.

§ 43. Oral Agreement

In many cases of contract the parties agree upon the terms orally by discussion, proposal and counter-proposal, suggestion and objection, until they think that they have arrived at substantial agreement. At this stage the contract should be reduced to writing. When this is attempted it will usually develop that each party has understood the discussion. differently and a renewed discussion results. Finally, when the written agreement is agreed to by both, it is signed; and then it supersedes all understandings and binds the parties.

In most cases an oral contract is as good as a written one except that it is harder to prove. After a discussion of terms each party has a different impression of the conclusions reached. Certain parts deemed favorable by one party are most strongly impressed upon his memory, while other parts not so agreeable are not so well remembered, and after a year or so two men can honestly go into court and swear to absolutely contradictory accounts of the same transaction. Here the great advantage of the written agreement becomes apparent. That which is written changes not; and the law will not allow oral evidence to be introduced to contradict that which the parties have agreed to in writing. If, meanwhile, one of the parties has died, the written contract is yet more essential for proof. Hence, in business, one should never entrust to memory anything that can possibly be put into writing. (See §§ 46, 47.)

Notes:

I.

In most disputes over contracts, the trouble arises because part or all of the contract is not written. 2. On this account the exchange of letters makes for certainty in contracts.

$44. Consideration

A promise to do something or to give something is not a contract, since a mere promise cannot be enforced by law. There must be a consideration for the promise; the consideration being something done, given, or promised by the other party.

One party's promise is a good consideration for the promise of another party. If A agrees to pay B for a certain service and B agrees to perform such service, a valid contract has been created and A must fulfil his promise when B has fulfilled his. Or if A promises to pay B for goods delivered to C, when B has made delivery A must pay him.

Mutual Promises as Consideration. If a person makes a promise in return for another person's promise, the law will require him to make good his promise when the first party has fulfilled his. In other words, mutual promises are consideration for each other. An example may be found in an ordinary real estate contract wherein one party promises to sell and the other party promises to buy. The consideration. for an enforceable contract may be very small compared with the value of what is agreed to by the other party; it may be inadequate or even insignificant.

For instance, a man might offer to give his son $1,000 if he would refrain from smoking until he was twenty-one. It would seem that the son gives very little in return for the money, but he is giving up the right to smoke-and the contract will be enforced. In this case, the consideration for the $1,000 is the surrender of a privilege.

It is very common to mention the sum of $1 in contracts where the parties do not wish the real amount of the consideration to be known. In most cases one dollar named will be held a sufficient consideration. "A valuable consideration, however small or nominal, if given or stipulated for in good faith, in the absence of fraud, is sufficient to support an action.