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Contracts, how to be

SEC. 1636.

under seal, signed by an agent in his own name, does not bind his principal (Townsend vs. Hubbard, 4 Hill, 351; Townsend vs. Corning, 22 Wend., 435; Berkley vs. Hardy, 5 B. & C., 355), though a contract not under seal, signed in this manner, would bind him (Stanton vs. Camp, 4 Barb., 274; see Evans vs. Wells, 22 Wend., 324; Townsend vs. Hubbard, 4 Hill, 351). In Connecticut, this technical distinction does not exist (Magill vs. Hinsdale, 6 Conn., 464). N. Y. C. C., Sec. 800.

NOTE. The words "sealed or unsealed" are struck out, but the note to the New York section is retained, as it shows additional reasons for abolishing seals.

A contract must be so interpreted as to interpreted. give effect to the mutual intention of the parties, as it existed at the time of contracting, so far as the same is ascertainable and lawful.

Intention of parties, how ascertained.

Intention to be ascer

N. Y. C. C., Sec. 801.

SEC. 1637. For the purpose of ascertaining the inten tion of the parties to a contract, if otherwise doubtful, the rules given in this chapter are to be applied.

N. Y. C. C., Sec. 802.

SEC. 1638. The language of a contract is to govern its tained from interpretation, if the language is clear and explicit, and does not involve an absurdity.

language

Interpreta

tion of written contracts.

Writing,

when disregarded.

Effect to be given to every part

of contract.

Several con

tracts, when taken to.

gether.

N. Y. C. C., Sec. 803.

SEC. 1639. When a contract is reduced to writing, the intention of the parties is to be ascertained from the writing alone, if possible; subject, however, to the other provisions of this Title.

N. Y. C. C., Sec. 804.

SEC. 1640. When, through fraud, mistake or accident, a written contract fails to express the real intention of the parties, such intention is to be regarded, and the erroneous parts of the writing disregarded.

SEC. 1641.

N. Y. C. C., Sec.. 805.

The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the others.

N. Y. C. C., Sec. 806.

SEC. 1642. Several contracts relating to the same matters, between the same parties, and made as parts of substantially one transaction, are to be taken together.

N. Y. C. C., Sec. 807.

tion in favor

SEC. 1643. A contract must receive such an interpreta- Interpretation as will make it lawful, operative, definite, reasonable of contract. and capable of being carried into effect, if it can be done. without violating the intention of the parties.

N. Y. C. C., Sec. 808.

SEC. 1644. The words of a contract are to be understood in their ordinary and popular sense, rather than according to their strict legal meaning; unless used by the parties in a technical sense, or unless a special meaning is given to them by usage, in which case the latter must be followed.

N. Y. C. C., Sec. 809.

Words to be

understood

in usual

sense.

words.

SEC. 1645. Technical words are to be interpreted as Technical usually understood by persons in the profession or business to which they relate, unless clearly used in a differ

ent sense.

N. Y. C. C., Sec. 810.

place.

SEC. 1646. A contract is to be interpreted according to Law of the law and usage of the place where it is to be performed; or, if it does not indicate a place of performance, according to the law and usage of the place where it is made.

N. Y. C. C., Sec. 811.

SEC. 1647. A contract may be explained by reference to the circumstances under which it was made, and the i matter to which it relates.

N. Y. C. C., Sec. 812.

SEC. 1648. However broad may be the terms of a contract, it extends only to those things concerning which it appears that the parties intended to contract.

N. Y. C. C., Sec. 813.

SEC. 1649. If the terms of a promise are in any respect ambiguous or uncertain, it must be interpreted in the sense in which the promiser believed, at the time of making it, that the promisee understood it.

SEC. 1650.

N. Y. C. C., Sec. 814.

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Particular clauses of a contract are subor- Particular

dinate to its general intent.

N. Y. C. C., Sec. 815.

clause subordinate to general intent.

Contract, partly writ

ly printed.

SEC. 1651. Where a contract is partly written and ten and part. partly printed, or where part of it is written or printed under the special directions of the parties, and with at special view to their intention, and the remainder is copied from a form originally prepared without special reference to the particular parties and the particular contract in question, the written parts control the printed parts, and the parts which are purely original control those which are copied from a form. And if the two are absolutely repugnant, the latter must be so far disregarded.

Repugnancies, how reconciled.

Inconsistent words re. jected.

Words to be taken most

strongly against whom.

Reasonable stipulations,

when im

plied.

Necessary incidents implied.

N. Y. C. C., Sec. 816.

SEC. 1652. Repugnancy in a contract must be reconciled, if possible, by such an interpretation as will give some effect to the repugnant clauses, subordinate to the general intent and purpose of the whole contract.

N. Y. C. C., Sec. 817.

SEC. 1653. Words in a contract which are wholly inconsistent with its nature, or with the main intention of the parties, are to be rejected.

N. Y. C. C., Sec. 818.

SEC. 1654. In cases of uncertainty not removed by the preceding rules, the language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist. The promiser is presumed to be such party; except in a contract between a public officer or body, as such, and a private party, in which it is presumed that all uncertainty was caused by the private party.

N. Y. C. C., Sec. 819.

SEC. 1655. Stipulations which are necessary to make a contract reasonable, or conformable to usage, are im plied, in respect to matters concerning which the contract manifests no contrary intention.

N. Y. C. C., Sec. 820.

SEC. 1656. All things that in law or usage are con sidered as incidental to a contract, or as necessary to carry it into effect, are implied therefrom; unless some of them are expressly mentioned therein, when all other things of the same class are deemed to be excluded.

N. Y. C. C., Sec. 821.

SEC. 1657. If no time is specified for the performance of an act required to be performed, a reasonable time is allowed. If the act is in its nature capable of being done instantly, as for example, if it consists in the payment of money only, it must be performed immediately upon the thing to be done being exactly ascertained.

N. Y. C. C., Sec. 822.

Time of per-
contract.

formance of

when of essence.

SEC. 1658. Time is never considered as of the essence Time, of a contract, unless by its terms expressly so provided.

This provision is new. As to the present law upon the subject, see Story Eq. Jur., Sec. 776. It is involved in so much difficulty, that the Commissioners deem it wise to adopt this more stringent rule.

N. Y. C. C., Sec. 823.

and several.

SEC. 1659. Where all the parties who unite in a prom- when joint ise receive some benefit from the consideration, whether past or present, their promise is presumed to be joint and several.

N. Y. C. C., Sec. 824.

SEC. 1660. A promise, made in the singular number, Same. but executed by several persons, is presumed to be joint and several.

N. Y. C. C., Sec. 825.

SEC. 1661. An executed contract is one, the object of which is fully performed. All others are executory.

N. Y. C. C., Sec. 826.

Executed

and execu-
tory con-
tracts, what.

TITLE IV.

UNLAWFUL CONTRACTS.

SECTION 1667. What is unlawful.

1668. Certain contracts unlawful.

1669. Penalties void.

1670. Contract fixing damages, void.

1671. Exception.

1672. Restraints upon legal proceedings.

1673. Contract in restraint of trade, void.

1674. Exception in favor of sale of good will.

1675. Exception in favor of partnership arrangements.

1676. Contract in restraint of marriage, void.

1

What is unlawful.

Certain contracts un

lawful.

Penalties void.

Contract fixing dam. ages, void.

Exception.

Restraints

upon legal

SEC. 1667. That is not lawful which is

1. Contrary to an express provision of law.

2. Contrary to the policy of express law, though not expressly prohibited; or,

3. Otherwise contrary to good morals.

N. Y. C. C., Sec. 827.

SEC. 1668. All contracts which have for their object, directly or indirectly, to exempt any one from responsibility for his own fraud, or wilful injury to the person or property of another, or violation of law, whether wilful or negligent, are against the policy of the law.

N. Y. C. C., Sec. 828.

SEC. 1669. Penalties imposed by contract for any nonperformance thereof, are void. But this section does not render void such bonds or obligations, penal in form, as have heretofore been commonly used; it merely rejects and avoids the penal clauses.

SEC. 1670.

N. Y. C. C., Sec. 829.

Every contract by which the amount of damage to be paid, or other compensation to be made, for a breach of an obligation, is determined in anticipation thereof, is to that extent void, except as expressly proIvided in the next section.

N. Y. C. C., Sec. 830.

SEC. 1671. The parties to a contract may agree therein upon an amount which shall be presumed to be the amount of damage sustained by a breach thereof, when, from the nature of the case, it would be impracticable or extremely difficult to fix the actual damage.

SEC. 1672.

The use of the phrase "liquidated damages" leads frequently to an evasion of the law in respect to penalties. The Courts, not venturing to declare such contracts void, constantly discourage them. They are oppressive and uncon. scientious, except in the cases permitted above, and ought not to be allowed. The restrictions imposed by this section are, however, new (see Bagley vs. Peddie, 16 N. Y., 469 ; Lampman vs. Cochran, id., 275).

N. Y. C. C., Sec. 831.

Every stipulation or condition in a conproceedings. tract, by which any party thereto is restricted from enforcing his rights under the contract by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, is void.

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