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when a minor is employed and payment is made to him for a time and his father makes no objection, the courts will uphold this arrangement, but not when the father gives notice of objecting.
Curiously enough, the minor has insufficient understanding to contract for himself, but as agent for another he may legally agree and make or sign a contract. The law protects the minor; the principal who employs a minor as agent is capable of protecting himself. If the agency is important and needs to be defined by a writing, any contract for the agency would properly be made with his father, as the minor may not make this contract for himself.
Corporations. A corporation, which may be regarded as an artificial person, may be, and in fact often is, one of the parties to a contract. The contract must be signed in its behalf, and in its name, by one of its officers or agents, properly authorized. It is important that anyone either accepting the signature, or signing himself for the corporation, should have sufficient assurance that the authority is legally and completely exercised; any one dealing with the corporation should know that the party signing for the corporation has authority to do so.
An engineer is often an employee or agent of a corporation of some sort; his representative character is such, his dealings with the agents of others so common, that special attention will be given in later chapters to corporations, and to agency. A special chapter will deal with the relations of engineers to others.
CONSIDERATION Consideration Defined. Consideration has been defined as something done, forborne, or suffered, or promised to be done, forborne, or suffered, by the promisor, in exchange for the promise. It may be a benefit to the promisor, or it may be a detriment to the promisee which gives it the quality of consideration. It must be lawful and it must be certain. If either illegal or impossible in itself, it is insufficient. It must in general be a present or future benefit or detriment; a past, completed transaction will not serve as consideration for a present promise. This means something past or done without connection with the performance of a contract. A sum of money paid at the time of the contract or even the day before for the purpose of obtaining the promise or contract would be a valid consideration. This is sometimes called an executed consideration, rather than executory which contemplates future action. A promise to do something already required by law or by public duty, however, will not serve as consideration. Forbearance, such as an agreement for the payment of additional money, or the compromise of a disputed claim is a valid consideration for a new promise to do something or to pay something.
Valid Consideration — Seal. There must be a valid consideration. A simple promise without consideration is not enforceable at common law. An apparent exception is that a written contract under seal need not have any consideration expressed. It is said that the seal imports a consideration. A plausible reason for this exception is necessity; in the case of certain writings in the nature of contracts there is no natural reason for any actual consideration. For example, some friend of a contractor joins him in a bond for the faithful performance of the contract; this friend has nothing to gain, no consideration for his promise, but the transaction is a common and a necessary one; affixing the seal is an act of some solemnity, and the law finds that the seal cures the defect. Necessity may not have been the primary cause of this legal rule or usage, but may now be considered a fair explanation of its survival and present existence. In some States there is a statutory provision that any contract put in writing is presumed to be founded on a consideration.
Seal and Scroll. A seal is a piece of wax or adhesive paper attached to the writing. In some States a scroll (or scrawl) with the word "seal" inclosed is a lawful seal ; in many others it is not. Unless it is known that the scroll is legal, no chances should be taken, a seal should be used; half a postage stamp is a good seal in case of necessity.
Desirability of Seal. The question may arise, if a seal, does away with the necessity for consideration, why not make all contracts in this way? One answer is that contracts are often made through offer and acceptance, or in some informal way. Another answer is that in case of a suit at law a contract or document under seal requires greater completeness of evidence in some formalities and in this way is disadvantageous. Moreover, the seal does not cure all defects; it is true of sealed instruments that in some cases reliance is placed upon a consideration expressed, in other cases, upon the seal alone. In the former case, if the consideration is found to be illegal or in any way fails, the contract may be void in consequence, for failure of consideration, even though under seal. Where dependence is clearly upon the seal, the seal alone is sufficient.
Mutual Promises. Most contracts call for the furnishing of goods or labor or both, on one side, and the payment of money on the other; these contracts are in the ordinary course of business; but contracts often consist of mutual promises, in which case each promise serves as consideration for the other. Each promise must be such as to be enforceable; if a man is so keen that he has made a contract in which the other makes real promises while he makes what are in form promises but which can not be enforced, he has overreached and there is no contract. It is held that mutual promises to subscribe to some beneficial object are enforceable although the consideration does not appear.
Inadequacy of Consideration. Inadequacy of consideration does not vitiate a contract; but it may serve sometimes as evidence of fraud in procuring the contract, or of duress, or of undue influence, or mistake. The consideration need not appear adequate, but must have some value, real or theoretical.
Failure of Consideration. Failure of consideration results when from any cause the consideration, once good, becomes incapable of being done or furnished, and it renders the contract void. Bankruptcy of a contractor would release the private party or corporation which contracted with him, although action in this matter might more often be taken on the basis of a breach of contract.
Reasonable Consideration Implied. It will be understood that often, while no consideration is expressed when goods are ordered or labor is hired, the law supplies the consideration that payment will be made, the amount to be a reasonable price, commonly the market price.
Negotiable Instruments. The laws dealing with negotiable instruments (bills of exchange, notes, and checks) are peculiar, especially touching the question of consideration which in these writings need not always be expressed. A later chapter deals with this subject.
SUBJECT MATTER Lawful Acts. The agreement must be for the performance of some lawful act, or for the lawful abstaining from doing some specified act. The object of a contract must be lawful, both with reference to the Common Law and to statutory regulations. Engineers in their business have naturally nothing to do with wagers, which are unlawful; the buying or selling of stock on margins is practically a wager in cases where no stock in fact is transferred. Similarly, usury or contracting for interest on money at more than the legal rate is unlawful.
Licenses. Professional and commercial regulations often require licenses or prescribe restrictions. Doctors of medicine must be licensed; certain mechanics, gas fitters in some cities, must be licensed, and a contract with an unlicensed workman for personal services in his trade would be void. The formal surveys of mines for filing claims must be made by duly qualified Deputy United States Mineral Surveyors.
Sunday Laws. Of importance to engineers are the Sunday laws. Work on Sunday is forbidden by statute in most States. Frequently, work on Sunday seems necessary in the public interest, and works of necessity and charity may be legally done on Sunday. In a rapid transit subway the deepening of the foundations of a very high building, entered upon during the week, was continued over Sunday; continuous work seemed
necessary to secure safety, and this was in the public interest and the courts upheld it. If the work of repairing a railroad is of such character that it cannot be done on a week day without incommoding the public, it is a work of necessity. If necessarily done on Sunday to preserve life, health, or property, it is again a work of necessity. But mere convenience or economy of Sunday over week-day work will not justify it. Provision is frequently made by statute that certain other work may be done on Sunday, for example certain trains may be run, certain shops opened, papers sold.
Common Law Illegality. Under the Common Law, any contract promotive of crime, sexual immorality, or of torts is unlawful, being against public interest; the same is true of a contract in restraint of marriage. It is not important to include here all cases of common law illegality. Contracts derogatory to public justice, or limiting legal rights, or commercial freedom are of interest here. Certain agreements tending to encourage litigation are unlawful. As an example, a lawyer may not encourage litigation by taking cases on contingent fees; he cannot legally agree to prosecute a suit for one fourth part of the money secured; that seems unprofessional and is prohibited by law; this, however, is a provision of law which is easily avoided by a slight change in the form of the agreement, and is less effective than is desirable.
Contrary to Public Policy. The general attitude of the courts is not to encourage litigation, yet in some cases they refuse to allow persons to agree not to utilize the courts for the settlement of their disagreements, believing it contrary to public policy that these persons should part with their legal rights. For instance a passenger on a railroad train is entitled to safe passage, and an agreement to release the company from liability, even when made in writing, does not exempt the company from paying damages for injuries resulting from gross negligence on its part, even though the person was riding on a free pass. There is a general duty to the public involved, and the individual cannot waive this.
Restraint of Trade. An important class of contracts against public policy in limiting commercial freedom includes those tending to monopoly through combination, and those in unreasonable restraint of trade. In recent years, no question of law or public policy has been more prominent than both the work of the courts and the action of legislative bodies touching the regulation of combinations tending toward monopoly or to limit freedom of trade; statutory regulations must be looked to as well as the Common Law, and these are sure to be in a state of change for several years to come. But while statutory provisions may in many cases control, one should never lose sight of the broad Common Law point of view, the illegality of all contracts in unreasonable restraint of trade.
Withdrawal of Competition. Under the Common Law, an agreement for the complete withdrawal of competition is contrary to public policy and void. A man may not agree to discontinue the manufacture of water pipes ; he may agree to withdraw from business for a definite time or within a restricted area, provided the time or area is not too great. In some States it has been held that an entire State is too wide an exclusion, contrary to the policy of the State; the State is sovereign and “the State” covers the entire field over which the court has jurisdiction.
Suppressing Competition. An agreement to suppress competition at a public letting of work is illegal. In this way an agreement either not to bid, or to bid higher than another (whose bid is known), are alike illegal. The parties to such a transaction are liable not only to have the contract set aside, and payment under the contract refused, but to criminal prosecution as well. In the letting of engineering contracts there has often been strong suspicion of collusion and in some cases direct evidence of it, with indictment by grand jury as a result.
Innocent Parties. An agreement, unlawful in itself, may nevertheless be sometimes enforced by the party innocent of fault, if the other alone was knowing to the illegality. An agreement illegal in part may sometimes be enforced in part. Where part of the consideration is lawful and part unlawful, the lawful part may in some cases be sufficient to prevent the entire avoidance of the contract for lack of consideration.
Clearness. An important feature of any contract is that it shall describe what is to be done, or the material to be furnished, with sufficient clearness and sufficient detail to result in securing what is wanted. This is a matter of business, of good sense rather than of law; it requires an understanding of the English language and of the business in hand; it requires a properly developed imagination so as to cover the points wherein the contract would otherwise fail to secure the results desired. Any business man who knows what are the four essentials of a contract should be entirely capable of writing simple contracts in the ordinary routine of business where the amounts involved are not large.
Engineer's Initiative in Writings. In very important contracts the best method for the engineer to pursue may often be for him to write the contract and the specifications, exercising what skill and foresight he deems essential, and then submit them to a suitable legal adviser for approval or comment and modification. The man who best appreciates the subject matter is commonly the best man to make the first draft.
Importance of Evidence. It may be appropriate finally to suggest that in making a contract, oral or written, the importance of evidence should be kept in mind; the terms of the contract should take into account the means of securing evidence in case of breach of contract by the other party.