Don't indulge in sharp practices and try to deceive another person with whom you are contracting, because the contract may be binding on you alone. Comply with the state laws regarding licenses, if you are a physician, insurance agent, stock-broker, peddler, real estate agent, or are engaged in any vocation where a license is required, because you may later find that you have been working for nothing. Avoid gambling contracts, not only because they are discountenanced by men of business integrity, but also because they are illegal and void. Don't make verbal contracts when you could as well make written ones. There is less opportunity for dispute later. REVIEW QUESTIONS 1. Barber sued Alcott for services rendered as a physician at Alcott's request. It appeared that Barber was not licensed by the state board of health as required by statute in his state before a person could practice medicine. Can Barber recover for his services? Was there a contract? Why? 2. Gray and Hook were both applicants for the position of inspector of flour for the city of New York, a public office, the officer to be appointed by the governor of the state. Hook withdrew in favor of Gray in consideration of Gray's promise to pay him one-half the salary if appointed. Gray was appointed to the position, but refused to pay Hook anything. Can Hook recover from him? Was there a contract? Why? 3. Nunnemacher owned a single horse and wagon in which he delivered oil, which he sold at retail, in the city of Hammond. He sold his business to an oil company and agreed as a part of the contract of sale never again to sell oil in the state of Indiana. Later he sold oil in Hammond. Can the company with which he made the agreement recover from him? Why? 4. Perry invented a sand-papering machine. He sold his rights to a company and agreed for a consideration that he would never "manufacture, sell, or cause to be sold any sand-papering machines of any description.' Later he invented a different type of sand-papering machine which he offered for sale. The company sued him to make him comply with his contract with them. Could they enforce compliance? Why? 5. (a) Jones, an unlicensed liquor dealer, delivered beer to Smith, who promised to pay for it. (b) Ames sold Bates grass seed, telling him that it was clover seed, though Ames knew at the time that it was not; and Bates promised to pay for it. Neither Smith nor Bates paid in the above examples. Jones and Ames sued them, respectively. Can they recover in either case? Why? 73. In General. When two or more competent persons contract, we have seen that they thereby create rights on the part of one, and duties on the part of the other, which have not existed before. One party has a duty to do something which the other party has a right to demand; or each party may have both a right against and a duty toward the other. How can the contract be discharged and the parties freed from the obligations which they imposed upon themselves? 74. Discharge by Performance. The simplest manner in which a party to a contract can discharge his part of the obligation is to perform completely all that he agreed to do. When he has performed what he has agreed to do he is freed from further liability. He then has the right to compel the other party to perform his duties, if any, or to pay damages if he refuses to do so. Nothing short of a complete performance, in strict accordance with the terms of the contract, will operate as a discharge by performance. EXAMPLES 1. A agreed to build a barn for B for the sum of $500. A performed his work, and B gave him $500. The contractual relation was discharged by the performance of the respective agreements. McGuire vs. Neils Lumber Co. 97 Minn. 293. 2. If in the above example A had built the barn, and B refused to pay the $500, A alone would have been discharged and he could then have sued B for his part of the contract. Allen vs. Cooper, 22 Mo. 136. 75. Conditions in contracts. It was stated at the end of the preceding paragraph that every condition, which the contract imposed upon him, must be performed by a party before he will be discharged. Conditions in contracts are classified according to the period of time at which they should have been performed, into (1) precedent conditions, (2) concurrent conditions, and (3) subsequent conditions. A precedent condition is a condition, imposed by the contract, which one party must perform before the other party is under any obligation to perform his part of the contract. It may also be a condition required to be performed before any contract exists. A concurrent condition is a condition which must be performed by one party, at the same moment of time that he requires performance, by the other party, of some other condition of the same contract. Unless he performs or offers to perform the condition imposed upon him at the time he makes a demand for performance upon the other party, his demand is incomplete, and the other party is not in default as to his share. A subsequent condition is the occurrence of some fact which the parties to a contract have expressly agreed shall destroy the contract in the event that it happens. The existence of a condition subsequent is a matter of defense. It must be proved to the court by the party who seeks to show that thereby the contract was discharged. EXAMPLES Condition precedent. A subscription was made to the stock of a corporation, to be due only when two hundred thousand dollars should be subscribed and a branch office of the company had been located in New York City. The total amount was subsequently subscribed, but no branch office was opened in New York City. The court declared that both these conditions must have been performed before the corporation had discharged its obligation and betore it could collect from the subscribers. Brewer's Fire Insurance Company vs. Burger, 10 Hun. (N. Y.) 56. Condition concurrent. Smith agreed in writing to convey 100 acres of land to Fuller, in consideration of Fuller's promise to pay him $6000.00 therefor. The payment of the money and the transfer of the land are conditions concurrent and neither party can compel performance by the other, or sue for damages, without showing that (1) he had performed his condition concurrent, or (2) that he had offered to perform it and his offer (called a tender of performance) had been refused. Fuller vs. Hubbard, 6 Cowen (N. Y.) 13. Condition subsequent. If A sells a cow to B as a Jersey cow for $100 and agrees that B may return the cow if she is not a Jersey, the fact that the cow is not a Jersey is a condition subsequent, which entitles B to return the cow, receive his money, and be discharged under the contract. 76. Substantial Performance of Conditions. Nothing less than a complete performance of all the conditions of a contract, with strict adherence to their terms, will operate as such a discharge of one party as to entitle him to compel performance by the other party. A court of equity will sometimes, in cases of great hardship, allow a party who has substantially performed his part to recover the value of his partial performance, and discharge him under the contract. An exception to this rigid rule of the law courts exists in contracts to do complicated and expensive things, in cases in which the deviation from the expressed conditions may be slight. EXAMPLES 1. Brown, a tailor, agreed to make a suit of clothes for Foster to his entire satisfaction. Foster was not pleased with the suit and refused it. Brown sued for the price, and proved that the clothes were well made, barring a slight defect, which could have been easily remedied. The court refused to allow him to recover, however, as he had not performed his condition, which was to satisfy Foster. Brown vs. Foster, 113 Mass. 136. 2. In the United States the substantial performance of a building contract, if the deviation was made in good faith, permits recovery. In such a contract, slight omissions or defects are likely to occur through some excusable oversight, inadvertence, or mistake, in spite of the most honest and intelligent efforts to perform in every particular. "To hold that the builder could not, in such a case, recover on his contract, would be too rigid a rule to apply to the practical affairs of life." Leeds vs. Little, 42 Minn. 414. The entire contract price of a building was $2500, and damage by defective construction, together with the amount necessary to repair the defects, amounted in value to $876. The court said this did not constitute a substantial performance within the above rule. Ketchum vs. Herrington, 45 N. Y. S. R. 59. 77. Time of Performing Conditions. The conditions in contracts must be performed within a reasonable time, if the contract itself specifies no date for performance. On the other hand, if the parties specify in their contract a date for its performance, time is said "to be made part of the essence of the contract,” and the condition must be performed on that date, in order to entitle a party to be discharged thereby. What constitutes a reasonable time, when no date is specified, depends on the nature of the contract and all the circumstances of the case. Similarly, express provisions as to time are construed by the courts in the same way as persons of ordinary intelligence would construe them. Fractions of days are not noticed by the courts, unless the parties specify that they should be. If the date of performance is placed on Sunday, the parties are allowed until Monday. EXAMPLE Shinn contracted to sell a farm to Roberts, who agreed to buy it for $117 an acre. The contract was in writing and stated that the deed to the farm should be delivered at a specific bank on March 20 at ten A. M., when Roberts was to pay his money. Roberts was at the bank ready to pay at the hour named, but Shinn did not appear until five o'clock, when he offered the deed to Roberts, who refused to take it. Shinn then resold the farm for $99 an acre and sued Roberts for the difference as the damages which he claimed Roberts had caused him. The court declared that Shinn could not recover his loss from Roberts because he had not performed the condition imposed upon him as to the time required. Shinn vs. Roberts, 20 N. J. L. 435. Note that the above contract was a contract to sell, not a sale. 78. Payment. Payment may be in money, or in the delivery of property or rights, according to the contract of the parties. Tender. A tender is an offer to pay. A penalty for nonpayment may be avoided by an actual transfer of the thing to be paid or by a tender of payment. EXAMPLE Hayden contracted to sell and deliver to Demets 50,000 pounds of copper of a specified quality, to be paid for in thirty days. Copper of the specified quality and weight was unloaded on Demets' platform, but he refused to accept it. Hayden took the copper to his warehouse, and notified Demets that he would hold it subject to his order. At the end of thirty days he sued Demets for the agreed price and the court allowed him to recover. Hayden vs. Demets, 53 N. Y. 431. Payment and tender are matters of defense. The party who claims to have paid or to have tendered payment must prove this in court. To prove that a tender has been properly made, a |