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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.
A later chapter will deal with some of the provisions usually found in contracts for constructing buildings or public works, or for the erection of structures of various kinds.
STATUTE OF FRAUDS
Statute of Frauds. While most contracts are preferably in writing, partly to secure certainty of performance, partly from the standpoint of evidence, nevertheless, an oral contract is in general sufficient. In the case of certain contracts, however, it is provided by law that they or a memorandum of them must be in writing. Under an old English statute entitled “ An Act for the Prevention of Frauds and Perjuries," written evidence must be presented in order to enforce certain specified classes of contracts.
Statement of English Statute. This Act is commonly known and referred to as the “Statute of Frauds." The reading of Section 4 of the statute is as follows:
"No action shall be brought:
1. whereby to charge any executor or administrator upon any special promise to answer damages out of his own estate;
2. or whereby to charge the defendant upon any special promise to answer for the debt, default, or miscarriage (misdoing) of another person;
3. or to charge any person upon any agreement made in consideration of marriage;
4. or upon any contract or sale of lands, tenements, or hereditaments, or an interest in or concerning them;
5. or upon any agreement that is not to be performed within the space of one year from the making thereof; unless the agreement upon which such action shall be brought, or some memorandum or note thereof shall be in writing, and signed by the party to be charged therewith, or some other person thereunto by him lawfully authorized.”
This statute has been adopted or re-enacted and frequently enlarged so that it is in force in all of the States of this country in substantially this form.
It is further provided in section 17 that
“No contract for the sale of any goods, wares, or merchandise for the price of £10 sterling or upwards shall be allowed to be good, except the buyer shall accept part of the goods so sold, and actually receive the same, or give something in earnest to bind the bargain, or in part payment, or that some note or memorandum in writing of the said bargain be made and signed by the parties to be charged by such contract, or their agents thereunto lawfully authorized.”
This section also has been re-enacted and has become the law in many but by no means all of the States, and where in force, the price (instead of
£10 sterling) varies in different states from $30 to $2500; an amount not uncommon is $500.
GOODS, WARES, OR MERCHANDISE
Labor and Materials. A very troublesome question, sometimes, under this Section 17, is to determine whether a contract is for goods in completed form, or for the labor and materials that go to make them in which case writing is not necessary. An order to a manufacturer is sometimes clearly for labor and materials. The decisions in the different States show considerable divergence of view, and a later chapter on sales gives some attention to this matter.
Contracts Unenforceable. With relation to both sections of the Statute of Frauds, the proper view to take is that they do not declare the contract unlawful or void; the moral obligation is in no degree lessened by this statute; the only effect is to withdraw the aid of the courts in enforcing & contract specified by it unless made in writing; they will lend no aid to compelling its fulfilment. The statute is in the interest of morality and wise public policy, and further serves to relieve the courts of much undesirable litigation.
Obligation of Another. Under the second clause, if a purchaser is accompanied by a friend, and the friend says “if the purchaser does not pay you, I will,” the contract is unenforceable unless in writing; if the
“ deliver the article to this man and send the bill to me,” it is his own debt and not another's, and writing is not required.
Interest in Lands. The fourth provision touching interest in lands, is definitely of importance to engineers. It is sometimes difficult to determine what is an interest in land under the statute. Growing crops are “goods,” not an “interest in land.” Standing timber, however, is part of the land and a sale would require writing. A sale after cutting does not involve an interest in the land. A contract to cut timber from the land and deliver after cutting need not be in writing. A sale of the timber after cutting might require a writing in view of the price being in excess of $50; the contract to cut and deliver would clearly be a contract for labor and materials. How easy it would be, however, for a misunderstanding to occur from lack of perfect memory as to the form in which the agreement was actually made, and how important might be the question as to where the burden of proof rests; how desirable, therefore, the writing is, whether necessary or not under the Statute of Frauds.
Interest, or License, or Easement. During construction a contractor needs to use private lands for a temporary track, or for the diversion of a stream. Does the permission constitute a lease or an easement in the land and require a writing; or is it merely a license or permit which needs no
writing? A permanent diversion of the stream would doubtless require a writing; the use of a temporary construction track for a short time would not.
Not Within a Year. The fifth provision is as to contracts not to be performed within a year.
To come within this statute the agreement must be such in its terms or in its nature, that performance within the year is impossible. A contract to sell your services for a year from next Monday cannot be performed in a year. The year dates from the making the contract and not from the time of entering upon the work or the duties required by the contract.
Kind of Writing. As to the nature of the writing in these cases, it need not be a complete contract; it need not, according to the statutes in most States, have the consideration expressed. A letter, a memorandum of any sort is sufficient, if it shows the parties to the agreement (or enables them to be determined), sets forth the agreement with sufficient certainty, and is signed by the party to be charged; this satisfies the Statute. The signature need not be in full; initials will serve, or an unusual signature (even an assumed name) provided it can be established that the party wrote it, that it is his signature. Even printed initials on the back of an account book have been held to be a sufficient signature.
DISCHARGE OF CONTRACT
Discharge. A contract once made is considered to remain in force until discharged. There are several modes of terminating or discharging a contract; 1. performance, 2. breach, 3. impossibility of performance, 4. agreement or consent, 5. operation of law.
Performance. Performance is clearly the method contemplated in entering upon the contract; the simplest case is where performance is complete on both sides. In some cases one party only has performed his part, and in that case he only is discharged from further obligation. A modification of the performance, if accepted, is sufficient, and a substantial performance made in good faith will be sufficient in spite of slight and trivial imperfections, and will justify the enforcement of payment.
Completion. Whether the contract has been completed on either side is what is called a mixed question of law and fact. What any agreement means is a question of law (for the judge); what are the facts as to satisfying that agreement is for the jury; sometimes under undisputed facts a question arises as to the legal effect of these facts, and this is for the judge to decide.
Money Payment. Often a money payment by one party discharges that party; if payment is made otherwise than by cash, the question may