Example. A stepfather manages the property of his infant stepchildren. As each one arrives of age the stepfather buys the property or interest, takes a conveyance, and pays an inadequate consideration. The conveyances so obtained may be set aside, since the influence of the parent or guardian is presumed to continue for some time after the child or ward reaches his majority, and the contract is made under such undue influence as is unfair.

In some cases, as parent and child, or attorney and client, the law presumes that the parent or attorney exercised undue influence. In other cases the burden is upon one who seeks to set aside a transaction to show that undue influence was in fact exerted.

HOW TO MAKE A CONTRACT

The object in drawing up a contract should be to embody the exact agreement of the parties in such a manner that no future misunderstandings as to its terms shall arise. There is a rule of law that when a contract is reduced to writing the terms of the written instrument cannot be contradicted or varied by parol evidence. While there are some exceptions to this rule, not necessary to be mentioned here, the rule is very general in its application and should be borne in mind when the contract is written and executed. A very good way is for each party to put in one-two-three order the promises he is ready to make, and for the other party to see whether these are the promises he is willing to accept. When these bilateral promises are embodied in the written instrument the whole should be carefully considered again in order to make sure that each party has given and exacted just what he intends. It is very unwise to leave anything to an outside parol agreement.

A general form of a contract is here given. The particulars may be varied according to the actual agreement.

"THIS AGREEMENT, made in duplicate this fifth day of April, one thousand nine hundred and five, by and between Alfred Black, of the city of Ithaca, in the state of New York, of the first part, and William Coles, of the same city and state, of the second part,

“WITNESSETH, that the said party of the first part, for and in consideration of the agreement hereinafter contained, to be performed by the party of the second part, agrees to and with said party to construct and finish in a good, substantial, and workmanlike manner on the lot belonging to the party of the second part, and known as No. 15 in Prospect Street in the city of Ithaca, N.Y., one frame building in accordance with the plan and specifications hereto annexed, of good, substantial materials, on or before

the fifteenth day of November next. And the party of the second part, in consideration thereof, agrees to pay to the said party of the first part for the same the sum of five thousand dollars, lawful money of the United States, as follows the sum of one thousand dollars when the foundations are completed; the sum of one thousand dollars when the frame or superstructure is inclosed; the sum of one thousand dollars when the structure is plastered; and the balance of two thousand dollars when the building is fully completed according to the plans and specifications.

"And the party of the first part further agrees that in case of his failure to complete the work by the date fixed he will pay to the party of the second part as liquidated damages, and not as a penalty, ten dollars for each and every day the full completion of his contract is delayed beyond that date.

"IN WITNESS WHEREOF, the parties to these presents have hereunto set their hands the day and year first above mentioned.

ALFRED BLACK.
WILLIAM COLES."

If the signatures are to be witnessed, add at the left, "Signed in the presence of," and have the witness write his name beneath this phrase. If there is a witness, he must be produced in court in order to prove the signatures, or his absence must be satisfactorily accounted for. If there be no witness, then other evidence, as the testimony of the other party, the proof of handwriting, etc., may be resorted to in order to prove the signature in question. Little will now be gained in most states by adding a seal. If a seal is used, the final clause should read, "In witness whereof, the parties to these presents have hereunto set their hands and seals the day and year first above written" (see sec. 23 ante as to the effect of a seal).

If the signature of a party is to be affixed by his agent, the form should be "John Doe, by Andrew Bright, his agent." The use of the word "by" is very important. The signature "John Doe, Andrew Bright, Agent," might make Bright a party (see sec. 131 post).

If some one (A. B.) is to guaranty the performance by the party of the first part above, and if the guaranty is given at the time the contract is made, there may be written below the signatures the following :

In consideration of the agreement above made by the party of the second part, I do hereby guaranty to the said party that the above-named Alfred Black will well and faithfully perform everything by the foregoing agreement on his part to be performed, at the times and in the manner above provided.

A. B."

If the guaranty is made subsequent to the contract to be guarantied, it will require a new consideration, and this should be expressed in the written guaranty; for example, "In consideration of one dollar to me paid by William Coles, the receipt whereof is hereby acknowledged, I do hereby guaranty, etc." (see sec. 88 post).

A simpler form of contract would be as follows:

“A. B. and C. D. do hereby mutually agree as follows: A. B. to (state what A. B. promises); C. D. to (state what C. D. promises).

Ithaca, N.Y., Jan. 5, 1905.

A. B.

C. D."

But the more formal phraseology is safer to use in order to make clear that the promises are mutually dependent and indivisible (see sec. 39 post).

A contract may be assigned in the following form:

"For value received, I hereby assign to E. F. the within contract. Ithaca, N.Y., June 7, 1905.

A. B."

REVIEW QUESTIONS AND PROBLEMS

SECTION 10. Define contract. Distinguish agreement from contract. Illustrate. Distinguish affirmative and negative contracts. How many parties to a contract? What is a novation? Illustrate.

Problem 1. B in a spirit of frolic and banter offers C $300 for a watch worth $15. C in the same spirit accepts, takes B's check for $300 on a bank in which he has no deposit, and delivers the watch to B. C presents the check, and when it is dishonored, brings an action against B for the $300. B sets up the above facts and offers to return the watch. Should C recover the $300 against B?

11. Name the essentials of an enforceable contract.

12. What is the meaning of agreement. How is it determined when an agreement has been reached? Why must its terms be definite?

Problem 2. B offers to sell his horse to C for $165. C understands B to say $65, and replies, "I'll give fifty-five." B understands that C means "one fifty-five," having dropped the “ "one," as is not unusual among traders. B replies, "Sixty-five is the price." C then says, "I'll take him." Is there

a contract?

Problem 3. B agrees to give his niece C 100 acres of land if she will live with him until her marriage and act as his housekeeper. C accepts and performs her part of the agreement. B refuses to convey to her any land. Csues for breach of the contract. Is there an enforceable contract? Has C any remedy?

Problem 4. B hires C and agrees to pay him "good wages," but afterwards refuses to give him any work. C sues for damages for breach of contract. Result?

13. Name three classes of agreements. Illustrate. Point out the different classes in Example 6, sec. 10.

14. How do agreements originate? Define offer. Define acceptance. What forms do offer and acceptance take? Explain bilateral executory contract; unilateral executory contract; executed contract. Define express promise; implied promise.

1. Must the offer be communicated? To whom? When is the offer of a reward published in a newspaper communicated? When one purchases a railway ticket who makes the offer?

Problem 5. C is on a train and B's agent comes through to take orders for the delivery of baggage. C gives the agent a check for his trunk and receives a receipt containing a notice that B will not be liable in case of loss to an amount exceeding $100. C does not read the receipt or know of its contents. The baggage is lost. Is C limited to a recovery of $100? 2. How may the acceptance be communicated? Are words necessary? Must it actually reach the offeror? Is mental acceptance sufficient? When an offer is made by mail when is the acceptance complete?

Problem 6. B asked C for an estimate of the cost of fitting up an office. C made the estimate (not an offer). B then wrote C saying that if C would do the work within two weeks he might begin at once. No answer was received. The next day B countermanded the order. Meanwhile C purchased material and began to work upon it at his shop. C now sues B for breach of contract. Was there a completed contract?

Problem 7. C has supplied B with eel skins used in his business. He has sent them without a specific order and B has kept them and paid for them. C sends B a quantity on April 2. B keeps them for some months unpacked. They are then destroyed by fire. Is B liable to C for the price?

3. What is the effect of a qualified acceptance? Illustrate.

Problem 8. B offers C 2000 tons of iron rails at so much per ton. C telegraphs, "Send me 1200 tons iron rails as per offer." B telegraphs a refusal to fill the order. C then telegraphs, "Send me 2000 tons iron rails as per offer." B again refuses to fill the order. C then sues B for breach of contract. Result?

4. What control has the offeror over the offer before acceptance? Same question, when offer is made under seal and when offeree pays to have time to accept?

Problem 9. C is offering goods at auction. B bids $100 for the lot, but retracts the bid before the hammer falls. C refuses to accept the recall of the bid and knocks down the goods to B, who refuses to take them. C sues B. Was there a contract?

Problem 10. B sent a letter to C saying: "We are able to offer salt at 85 cents a barrel. Shall be pleased to receive orders." C at once ordered 2000 barrels at that price. B refused to fill the order, as salt had gone up in price. C sues B for breach of contract.

5. Suppose the offeree accepts after the offeror has revoked but before the offeree knows of the revocation?

6. How does an offer lapse? What is the effect upon an unaccepted offer of the death of the offeror or of the offeree?

15. Who is an infant? When is he of age? Which of his contracts are binding during infancy? Which are binding after he is of age? What are necessaries? What is ratification?

Problem II. B bought of C a bicycle for $50 on August 10 at 8 A.M. B's twenty-first birthday was on August II, and it was proved that he was born at 10 P.M. of that day. C sues B for the agreed price. B seeks to disaffirm the contract and pleads that it was made during infancy.

Problem 12. B, a student of eighteen years, engaged a room of C for forty weeks, at $2 a week, payable weekly. At the end of ten weeks he left the room and C was unable to secure another lodger. C sues B for $80. B pleads infancy. How much may C recover?

Problem 13. B while an infant bought jewelry (not necessary) of C. After B became of age he acknowledged the debt and said he would pay it as soon as he had the means. Is B liable to C?

Problem 14. B, an infant, buys a horse of C. After B is twenty-one he sells the horse to X. C sues B for the price of the horse.

Problem 15. C, an infant, sells Bahorse. Before C is twenty-one he brings an action to recover the horse from B. Will such an action lie during C's minority? 16. What contracts of an insane person are voidable? What are binding? Same questions as to idiots? Intoxicated persons?

17. What was the common law rule as to married women's contracts? What is a void contract? (Are an infant's contracts void?) How do statutes change the common law as to married women's contracts?

18. What contracts require a consideration? Define consideration. What instruments have presumptive consideration? What is the effect of a seal at common law?

Problem 16. C voluntarily supplied necessary articles to B's father, who was old and poor. B afterwards promised C to pay for them. C now sues B on that promise.

19. Must the consideration equal the promise in value? What is a valuable consideration? What is not?

Problem 17. B says to C, "If you will take a trip abroad, I will pay your expenses." C takes the trip, and now sues B for the expense incurred.