Chapter 9-10: Contracts
That obligation to perform a contract is founded on the reasonable expectation from a promise.
- This differs considerably from a mere declaration of intention.
- If I say that I want to do something for you but I do not do it, I am not guilty of a breach of promise.
- A promise is a declaration that you want the promisee to depend on you to perform it.
- A promise produces an obligation.
- Its breach is an injury.
A breach of contract is naturally the slightest of all injuries because we naturally depend more on what we have than what others have.A man robbed of £5 thinks himself much more injured than if he had lost £5 by a contract.
This was caused by:
- Accordingly in rude ages, all crimes are slightly punished, except those that disturb the public peace.
- Society is far advanced before a contract can sustain action or its breach can be redressed.
- the little importance of contracts in those times, and
- the uncertainty of language.
The first contracts that sustained action were those:
- where the damage done was very great.
- where there the person surely intended to the contract to be fulfilled.
Accordingly among the ancients, promises entered into with great solemnity first sustained action.
- No stipulation could be made unless the contractors were personally present.
- No promissory note in writing was binding.
- No promises by the Roman law sustained action without a stipulation.
By the English law, a consideration or cause for the promise was at first necessary to make it obligatory.
- It was thought contrary to good manners to insist on a promise.
- If a man promised a certain sum to his daughter, there is a consideration.
- Therefore, he was obliged to perform it.
- But if he promised it with any other man’s daughter, it was sine causa.
- Unless she was a relation, he could not sustain action.
- If I made you a promise, it did not sustain action
- But if I again promised not to forget my former promise:
- the latter promise was obligatory, and
- the former was the consideration that made it so.
By the civil law, the first promises that sustained action were those entered into in presence of a court.
- With a court, there could be no doubt of the intention.
- Accordingly, recognizance of every promise was taken before some court.
- A recognizance is when a debtor comes before a court with the creditor, and acknowledges that he owes him a certain sum;
- A copy of this acknowledgment was given to the creditor.
- Another copy is given to the clerk.
- Whenever the creditor showed his copy, if it was found to correspond to the other copy, he could pursue for his money.
- Afterwards, a recognizance before the magistrate of a staple town served the purpose
The next contracts that sustained action were the contractus reales.
- These were entered into by the delivery of a thing to be returned itself, in species, or in value.
- These are of four kinds:
- It is when I lend anything to be returned in value, as money.
- This soon sustained action.
- The mutuum does not infer interest, and in a bond, unless the interest be specified, it will carry none.
- when the thing itself is to be restored, like a borrowed horse.
- when a thing is committed to another’s care but not to his use.
- It is a security for debt.
All these sustained action before the four consensual contracts:
- Buying and selling,
- If the contract is not fulfilled, you lose your earnest money.
- Letting and hiring
- This once comprehended leases, day’s wages, building, and almost everything with regard to society.
- If a small price be paid for borrowing something, it becomes letting and hiring.
- Partnership, and
- If this was performed gratuitously, it could not at first sustain any action.
- But if a reward was given, it was nearly the same with the commodatum.
The Roman law also had a pactum nudum.
Contracts deprive men of that liberty.
- This is a bare promise without any consideration.
- It created an exception or defence against the pursuer's action.
Originally, no contracts were sued before any court but the ecclesiastic.
- A very small defence would set them free.
This was imitated by the civil law.
- But they came gradually to civil courts.
- The canon law judged from principles of honour and virtue.
- It obliged men to perform even those promises that were made gratuitously.
In general, the law gave only action for damages until the court of chancery was introduced.
- By English law, if a promise is clearly proven, he who promises must perform it.
- It is the natural idea of a court to redress injuries.
- Accordingly if a person refused to perform his contract, he was only obliged to pay the loss which the other had sustained.
- But the court of chancery forced the person to a performance of the agreement.
The present and ancient state of contracts are most different.
At present, almost anything will make a contract obligatory.
- Execrations and the most solemn ceremonies were sufficient to secure the performance of a contract.
- Ceremonies to impress the mind were invented:
- drinking blood mixed with water,
- bleeding one another,
- promising before the altar,
- breaking a straw, etc.
There are some questions concerning contracts much agitated by lawyers, especially one when the coin becomes debased
When the government alters the coin, it is to answer some urgent necessity.
- If I borrow £100 when the coin is 4 oz. the pound, and it is debased to 2 oz., should I pay £100 of the new coin or £200?
- In 1705, the crown of France had a demand for 10 million.
- But it could raise only 5 million.
- They cried up the coin and paid the ten with five.
- As the government allows private persons to pay with the new coin, the injury is not great.
- The coin's debasement cheapens all commodities and provisions for some time, since all are paid in the new coin.
- Therefore, the uses of money may be served by the new as well as the old coin.
Chapter 10: Quasi-Contract
A quasi-contract is founded on the duty of restitution.
- If you find a watch, you should give it back by the right of property, because a man does not lose property with possession.
- But if you and I balance accounts, and you pay me but you afterwards find that you did not owe that sum, how will you claim it?
- You cannot ask for it because you alienated that sum.
- You cannot claim it by contract, for there never was one made between us.
- But I am a gainer by your loss.
- Therefore restitution is due.
- In the same way, if a man was called away by a sudden order of the state without leaving an attorney to manage a lawsuit that he had going on, and a friend undertakes this office without commission, as the defence is necessary, and the undertaking it prudent, restitution of his expenses are due.
- On the same principle were founded the Roman law'sactiones contrariae.
- If you lent me a horse which had cost me extraordinary expenses, by the contract commodate, you could redemand your horse in the same [state] in which you lent him.
- But I could claim my extraordinary expenses by an actio contraria.
- The same principle takes place in many other cases.
- If a person borrows money and gets three of his acquaintances sureties for him, jointly and severally, and if he turns bankrupt, the creditor pursues the ablest surety, who has a claim by the duty of restitution on the other two for their thirds.
- The Scotch law carries this still farther.
- If a bankrupt had two estates, and two creditors A and B.
- A has a security on both estates, B has security only on the best.
- A has a liberty of drawing his money from either estate he pleases, and draws from that on which B has his security.
- As Bin this case is cut out, the law obliges Ato give up his security on the other estate to B.
- The same was the case in the Roman law with regard to tutory.
Next: Chapter 11