A stipulation in consideration of one dollar is quite as effectual and valuable a consideration, as the larger sum stipulated and paid." 2 Impossible Consideration. If the consideration agreed to by one of the parties is something impossible to perform, the contract is void and unenforceable. This would be true if one of the parties agreed to do an illegal act in return for the other party's promise. He could not be required to perform it; consequently he has given nothing. Doing something that one is already obliged by law to do is not a valid consideration; for instance, a promise to pay a debt already owed would not be a good consideration for a new agreement. An agreement to pay half of a debt due in full settlement would not be any consideration for the other half which the law would still hold to be a binding debt. (See § 500.) Love and affection for one's friends and relatives do not constitute a legal consideration for a contract. One does not love them more or less on account of the agreement. There is no change in the situation of the person which would make it necessary for the law to interfere to compel the other party to keep his promise. Notes: I. Some consideration should always be mentioned in 2. the contract. It is wiser to name the true consideration, as then there can be no misunderstanding if it becomes necessary to prove the contract in court. 3. The matter of no consideration comes up again and again in legal practice, making void otherwise good agreements, and the principle should be thoroughly comprehended. Lawrence v. McCalmont, 2 Howard (U. S.) 426. REVIEW QUESTIONS 1. What are some common synonyms for the word "contract"? When does the word "contract" apply? Why is the law of contracts of wide application? 2. What is the legal definition of a contract? 3. Name and number the essential elements of a contract. What does the word "consideration" mean as an element in a contract? Give an example of a negative obligation in a contract. 4. Who are competent to make contracts? Who are not competent to make contracts? If a person not competent to make a contract signed an agreement, what would be the effect? May a person contract under any name he may assume? 5. What is the law as to a married woman's contract in the state in which you live? 3 6. What is the effect when a minor makes a contract? 7. What is the legal age of majority in your state? 8. If a minor represents himself as of age, what is the effect? If a minor bought a motorcycle, could he keep it and refuse to pay for it? Suppose he had wrecked it? 9. 10. II. 12. When may a creditor enforce a contract against a minor? What is the object of a minor's disabilities? Why is it unsafe 13. What two classes of contracts are unenforceable? What agreements about marriage are unenforceable? 14. What is the rule as to "agreements in restraint of trade"? 15. What are "wagering contracts"? 16. What is the law as to usury in your state? 17. What other agreements are illegal? 18. What does lex loci mean? Is a contract affected by the law of the place where it is made? A contract executed and delivered in California is the subject of a suit in New York. Where questions as to local statutes are given, a note should be made and the matter should be looked up later. The statutes of the state may be consulted in some public library and the answer written after the question; a legal friend may be questioned; a letter may be written to an editor who has a query department. There are forty-eight different states and in a book of general information it is not feasible to give the varying statutes of each state, but it is of advantage to the reader to look up the particular information as to his own state and write this out where it can be found when wanted. What laws govern the validity and construction of the contract? What laws govern the remedy? 19. What is the rule as to existence of the subject matter? If a sale were made of a particular horse at another place and the horse had died before the contract was made, what would be the effect? Suppose the purchaser had paid for it? 20. What terms as to payment are implied in a contract? As to delivery? 21. 22. When do the minds of the parties meet in a contract made by mail or telegraph? What is the rule as to the method of acceptance? A writes and offers goods to B, in another town, at a stated price. B receives the offer and immediately writes back to A his acceptance. The letter is deposited in the mail-box but never reaches A. A, not hearing from B, offers his goods to C, whose acceptance reaches A. B sues A for breach of contract. Has he a cause of action? Why? 23. A, on March 21, wrote B, a day's journey away, and offered B a position. He ended his letter by saying: "You will confer a favor by giving me your answer by return mail." B received the letter on March 22. B on the 23d wrote her acceptance and gave it to a boy to mail. The postmark showed that it was not mailed until the 25th. A not receiving answer offered position to another. B sued for breach of contract. Has she a cause of action? 24. What is the effect of accepting with a slight variation of terms? How long does an offer stand open? 25. Why is a written contract better than an oral contract? Why should the terms of an agreement be definite? 26. Why cannot an agreement without consideration be enforced? 27. If a man owes $100 and agrees to pay $50 in discharge of the debt, can he be made to pay the remainder? Why? 28. Without other consideration is payment of a smaller sum ever satisfaction for a debt of greater amount? CHAPTER VII HOW CONTRACTS ARE MADE $45. Classification of Contracts In this book contracts have been classified according to function, into contracts of sale, contracts of agency, etc. Certain other more arbitrary classifications of contracts, though only occasionally referred to in practice, are frequently the subject of examination questions. For this reason these classifications are explained in the present chapter. Some of the terms are logically objectionable, but those who submit themselves to examination fare better if they give the required conventional answers than if they follow the rules of logic. For example, a common question is: What are contracts of record? Part of the required answer is: Judgments and recognizances. As a matter of fact neither a judgment nor a recognizance is a contract according to the legal definition. The parties' minds do not meet, and there is no agreement. Nevertheless the text-books call these court entries "contracts of record." Another common question is: What is a simple contract? and the answer expected is: A contract not of record or under seal. In fact, the word simple means the opposite of compound, complex or intricate and in many cases the so-called simple contracts are more complex and abstruse than a contract under seal such as, for example, a quitclaim deed, than which no contract could be simpler. The seal, the witnesses, the notarial acknowledgment, the filing or recording of a contract in an office of registry are all matters intended to evidence the contract. They do not make it complex or affect its character in any way. Nevertheless, those who are preparing for examination must know how to answer questions of this sort upon occasion. Contracts, then, may be classified in regard to dignity and facility of proof as follows: (1) oral contracts, (2) written contracts not under seal or of record, (3) contracts under seal, and (4) contracts of record. All contracts not under seal or of record are called simple or parol contracts whether in writing or not. Formal contracts are contracts of record, bonds and recognizances, and contracts under seal, which include all deeds and instruments affecting land that are required to be recorded in offices of public registry. § 46. Oral Contracts A contract may be made simply by word of mouth or by words and acts. Such a contract is called an oral contract. If it becomes necessary to go into court in order to enforce it, it will be necessary to prove it by oral testimony. The parties to it will be called on to testify as to what was said and done, and if any other people were present either party may call them as witnesses. In such a case the difficulty is that the agreement has not been reduced to writing and the various parties present probably have entirely different ideas as to the meaning of what they heard. The court may decide that the testimony as to what happened is so vague and contradictory that it cannot be enforced as a contract. The prudent business man will insist that all agreements be made in writing and properly signed, in order that there may be no question as to just what obligations he has assumed or what he may properly expect from the other party to the contract. Some contracts must be in writing or the courts will refuse to enforce them. (See § 48.) |