and established usage or custom, and two persons enter into any contract which does not exclude such usage or custom, and contains nothing antagonistic to it, the usage or custom will be implied to be part of their contract: so if between two persons there has been a practice in past years for interest to be paid on balances between them, a contract will continue to be implied to that effect until something is said or done to the contrary (e). Again, if a landlord gives his tenant notice to quit or else pay an advanced rent, and the tenant says nothing, but continues to hold on, his contract to pay such advanced rent will be implied; and if any deed or other instrument contains a recital or any words shewing a clear intention to do some act, a contract to do it is implied (ƒ).

facit cessare

An express contract is more certain and definite than Expressum an implied contract, which indeed can only exist in tacitum. the absence of an express contract, the maxim being Expressum facit cessare tacitum.

Again, on the third division of contracts into those Executed and executory conexecuted and those executory, it is necessary to say tracts. but little, the words almost explaining what is meant. An executed contract is one in which the act has been done, as if a contract is made for the sale and purchase of goods, and the price paid and the goods. handed over; an executory contract is one in which the act contracted for is to be done at some future time, as if a person agrees to supply another with certain goods on the arrival of a ship in which they are. Contracts may also be entirely executed or entirely executory, or in part executed and in part executory (g).

(e) See Chitty on Contracts, 59.

(f) See Knight v. Gravesend, &c., 2 H. & N. 6.

(g) As to distinctions between contracts executed and executory, see Benjamin's Sale of Personal Property, 227; Campbell on the Law of Sale of Goods, 2.

Breach of executory contract.

contract.

On an executory contract one important point may be usefully noted. In such a contract, of course, it must be apparent that, generally speaking, no action can be brought for its breach until the day arrives for its performance; but it has been decided that where a person before the day declares that he will not perform his contract, or renders himself incapable of performing it, the action may be brought immediately without waiting for the future day (h).

Consequences Where a valid contract has been entered into between flowing from the breach of a the parties, and there is a breach of it, certain consequences flow from that breach. Looking at judgments as contracts of record, if a judgment is not complied with by the party against whom it is given, there are various means pointed out by law for obtaining satisfaction of it, the chief being by execution (i). In the case of a breach of a specialty or a simple contract, an action has to be brought against the person committing the breach, and damages are awarded in such action for the breach, such damages being estimated by a jury in accordance, as far as can be, with the settled principles of what is the measure of damage, a subject which will be discussed later on in the present work (k). In some cases, also, relief may be obtained beyond mere damages, e.g. in an action for breach of a contract to deliver specific goods, a plaintiff may, under the provisions of the Mercantile Law Amendment Act, 1856 (7), obtain an order for the delivery to him of the specific goods themselves (m).

Forfeiture of right to compensation.

In some cases, also, the breach of a contract by one of the parties may cause him to forfeit his right to any compensation for what he has done before breach.

(h) Hochster v. De la Tour, 2 Ell. & Bl. 678; Frost v. Knight, L. R. 7 Ex. 111. See also post, ch. viii. pp. 221, 222.

(i) As to the different modes of enforcing a judgment, see Indermaur's Manual of Practice, 101-104.

(k) As to the Measure of Damages, see post, Part iii. ch. i.

(1) 19 & 20 Vict. c. 97, s. 2.

(m) See post, Part iii. ch. i. pp. 398, 399.

Thus if a servant hired by the month leaves or is discharged on account of his misconduct in the middle of a month, he will lose the whole month's wages (n).

construction of

The last subject to be considered in the present Rules for the chapter is that of the rules for construction of contracts, contracts. a matter of considerable importance. In the first place, it must be observed, that while the jury decide on questions of fact, it is for the Court to put the correct construction on any instrument; and, to ensure uniformity in construction as far as possible, certain rules have been framed and handed down from time to time. These rules are stated by Mr. Chitty in his work upon Contracts very fully (o), and the most important of them are as follow:

to be construed

1. Every agreement shall have a reasonable construction 1. Agreements according to the intention of the parties: e.g. if a person reasonably. borrows a horse, it will be considered a part of the agreement that he shall feed it during the time it remains in his possession. This is a great and important rule of construction, but upon it two points must be borne in mind: "first, that it is not enough for a party to make out a possible intention favourable to his view, but he must shew a reasonable certainty that the intention was such as he suggests; and, secondly, that all latitude of construction must submit to this restriction, viz, that the words and language of the instrument will bear the sense sought to be put upon them; for the Court cannot put words in a deed which are not there, or put a construction on the words of a deed directly contrary to the plain sense of them" (p).

2. Agreements shall be construed liberally, e.g. the 2. Agreements

to be construed liberally.

(n) See hereon also post, ch. vi. p. 194.

(0) See Chitty on Contracts, 74-99, from which pages the following remarks on the construction of contracts are mainly gathered.

(p) Chitty on Contracts, 194.

3. Agreements

word men used in a contract may often be held to include both men and women (q).

3. Agreements shall be construed favourably; which to be construed means that such a construction shall be put that, if favourably. possible, they may be supported: thus, if on an instrument it is possible to put two constructions, one of which is contrary to law and the other not, the latter shall be adopted; and it is upon this principle that words sometimes have different meanings given to them: thus, the word "from" is primâ facie exclusive, but it always depends on the context; and the words. "on" or upon" may mean either before the act to which it relates, or simultaneously with the act done, or after the act done; and the word "to" may mean "towards" (r).

4. Words are to be understood in their ordinary meaning.

5. The con

struction shall be on the

ment.

4. Words are to be understood in their plain, ordinary, and popular sense; but if words have by any usage of trade or custom obtained a particular signification, then that meaning will generally be put upon them.

5. The construction shall be put upon the entire instrument, so that one part may assist another; and it is upon entire instru- this rule that, to further the evident intention of the parties, words used in a contract may be transposed; and again, that where there are general words following after certain particular words, they will be construed as only ejusdem generis with the particular words. This rule also has to be taken subject to the Falsa demon maxim Falsa demonstratio non nocet, the meaning of which maxim has been well stated to be," that if there

stratio non

nocet.

(2) See, as to the liberal construction of certain words in statutes 13 & 14 Vict. c. 21, s. 4, and see also the Conveyancing Act, 1881 (44 & 45 Vict. c. 41), sect. 66, which provides that "in the construction of a covenant or proviso or other provision implied in a deed, by virtue of this act, words importing the singular or plural number or the masculine gender, shall be read as also importing the plural or singular number or as extending to females, as the case may require."

(r) Chitty on Contracts, 79.

is in the former part of an instrument an adequate and sufficient description shewing with convenient certainty the subject-matter to which it was intended to apply, a subsequent erroneous addition will not vitiate that description" (s).

prevail unless

made their

reference to

6. A contract is to be construed according to the law of 6. The lex loci the country where made, except when the parties at the contractus is to time of making the contract had a view to a different the parties country. From this it follows that if a contract is contract with made anywhere out of England, and an action is another brought on it here, it will be material to give evidence country. to shew what the law of the place where it was made is as to it (t); and with regard to the last part of this rule, what is meant is, that although the lex loci contractus generally applies, yet if the parties have at the time in contemplation the performance of the contract in another country, then the law of that country will apply, e.g. if a bill of exchange is executed here but made payable abroad (u).

And notwithstanding the rule that the lex loci con- But in bringing an action tractus is to govern, yet, although a contract is made the lex loci fori abroad, as regards the proceedings to enforce it, the lex governs. loci fori (that is, the law of the country where the action is brought) governs; so that, for instance, although a contract is made abroad in a country where the period of limitation for bringing the action is different to what it is here, yet, if the action is brought here our Statutes of Limitation will bind.

7. If there are two repugnant clauses in a contract, the 7. Of two refirst is the one to be received (x).

pugnant clauses the first is to be received.

(8) Chitty on Contracts, 86.

(t) Per Lord Eldon in Smale v. Roberts, 3 Esp. 163, 164.

(u) As to which see post, pp. 158, 159.

(x) It may be noted that the contrary is the rule in the case of a will; for as a subsequent will revokes a former, so a later clause will have effect over an earlier.