Proof of consent. Proposal and acceptance. It is proper to add that the common intention of the parties to an agreement is a fact, or inference of fact, which, like any other fact, has to be proved according to the general rules of evidence. When it is said, therefore, that the true intent of the parties must govern the decision of all matters of contract, this means such an intent as a court of justice can take notice of. If A., being a capable person, so bears himself towards B. that a reasonable man in B.'s place would naturally understand A. to make a promise, and B. does take A.'s words or conduct as a promise, no further question can be made about what was passing in A.'s mind. Under such circumstances, as well as in certain other more special cases, the law does not allow a party to show that his intention was not in truth such as he made or suffered it to appear. But in the common and regular course of things the consent to which the law gives effect is real as well as apparent. 2. Ways of declaring consent.-Two distinct modes of the formation of an agreement are here specified. It is possible, however, to analyse and define agreement as constituted in every case by the acceptance of a proposal. In fact this is done in the Indian Contract Act. And it is appropriate to most of the contracts which occur in daily life, buying and selling, letting and hiring, in short all transactions which involve striking a bargain. One party proposes his terms; the other accepts, rejects, or meets them with a counter-proposal: and thus they go on till there is a final refusal and breaking off, or till one of them names terms which the other can accept as they stand. The analysis is presented in a striking form by the solemn question and answer of the Roman Stipulation, where the one party asked (specifying fully the matter to be contracted for): That you will do so and so, do you covenant? and the other answered with the same operative word: I covenant (c). Yet the importance of proposal and accept (c) No doubt the formula Spondes? spondeo, originally the only binding one, was in early times supposed to have a kind of magical effect. But ance as elements of contract has been much more distinctly brought out in English jurisprudence than by writers on the modern civil law (d): and, one may add, on the whole more rationally treated. Does this analysis, however, properly apply to a case in Is the analysis which the consent of the parties is declared in a set form, univeras where they both execute a deed or sign a written agree- sally ap plicable? ment? It may be said that, although there is no proposal or acceptance in the final transaction, the terms of the document must have been settled by a process reducible to the acceptance of a proposal. But then the formal instrument has a force apart from and beyond that of the negotiation which fixed its terms. And it may well be, and sometimes is the case, that the parties intend not to be legally bound to anything until their consent is formally declared. In such a case it cannot be said that the proposal and acceptance constitute an agreement, at all events not the true and final agreement. Take the common case of a lease. There is generally an enforceable agreement, constituted by letters or memorandum, before the lease is executed. But the lease itself is (besides its effect as a transfer of property) a new contract or series of contracts. In this who is the proposer and who the acceptor? Are we to say that the lessor is the proposer because in the common course he executes the lease before the lessee executes the counterpart? Or are we to take the covenants severally, and say that in each one the party with whom it is made is the proposer, and the party bound is the acceptor? What, again, if two parties are discussing the terms of a contract and cannot agree, and a third indifferent person suggests terms which they both accept? Shall we say that he who accepts them it was necessary that the stipulator should hear the promisor's answer. Cp. Palgrave, Commonwealth of England, 2, cxxxvii, cxli. (d) Increased attention has however been paid to this topic in Ger many. See Vangerow, Pand. § 603, Promise: and bind as con tract before acceptance in English law. It is possible first thereby proposes them to the other? The terms proposal and acceptance are defined by the Indian Contract Act (e), but for natural-born speakers of English they seem hardly to need more definition than is implied in the rules which have to be subsequently given. In English authorities proposal and offer are used as synonymous terms, offer being, if anything, the more common. 3. Definition of Promise.-The definition of the Indian may exist Contract Act is that "a proposal when accepted becomes a promise." This again is apt and sufficient for the everyday or bargaining type of contract. But there are cases which it seems not to cover. Not only a promise, in the ordinary sense of the word, may be made in writing before there is any acceptance of it by the person to whom it is made, but if made by deed it is at once binding and irrevocable. Certainly this doctrine is of an archaic and technical kind, resting as it does more on the formal character of a deed than on any principle of general application; and possibly, or more than possibly, its expediency is doubtful. But it is a settled part of the law of England (f). If the analytical view of the Indian Contract (e) See Note A. (f) Xenos v. Wickham, L. R. 2 H. L. 296, 323, and authorities there cited: see at pp. 300, 309. For the reasons on the other side, see the opinion of Willes, J. at pp. 315, 316. Act is to be applied to the existing state of English jurisprudence, it can be done only by treating this class of cases as anomalous. It will not do to say that the contract is complete when the other party knows of the promise and assents; for if that were so, it could in the meantime be revoked. And if we say that acceptance is presumed in the case of an offer which is unconditional and wholly for the benefit of the party to whom it is made, we are at once in the region of fictions. It might serve a little better to say that, by an exceptional effect of the form of the transaction, the proposal is in these cases irrevocable. But this is only another way of saying that the regular analysis does not hold good. tion of able agree 4. Definition of Contract.-The term contract is here Restricconfined to agreements enforceable by law. This restric- contract tion, suggested perhaps by the Roman distinction between to enforcecontractus and pactum, is believed to have been first intro- ments. duced in English by the Indian Contract Act. It seems a manifest improvement, and free from the usual drawbacks of innovations in terminology, as it makes the legal meaning of the words more precise without any violent interference with their accustomed use. void and 5. Void Agreements.-The distinction between void and Void roidable transactions is a fundamental one, though it is agree ment; disoften obscured by carelessness of language even in modern tinction of books. An agreement or other act which is void has from voidable. the beginning no legal effect at all, save in so far as any party to it incurs penal consequences, as may happen where a special prohibitive law both makes the act void and imposes a penalty. Otherwise no person's rights, whether he be a party or a stranger, are affected. A voidable act, on the contrary, takes its full and proper legal effect unless and until it is disputed and set aside by some person entitled so to do. The definitions of the Indian Contract Act on this head are simpler in form than those given above: but certain peculiarities of English law prevent us from adopting the whole of them as they stand. Voidable contract. Consideration. It is not correct as an universal proposition in England that "an agreement not enforceable by law is said to be void," for we have agreements that cannot be sued upon, and yet are recognized by law for other purposes and have legal effect in other ways (g). 6. Voidable Contracts.-The definition here given is from the Indian Contract Act. The idea is not an easy one to express in terms free from objection. Perhaps it would be better to say that a voidable contract is an agreement such that one of the parties is entitled at his option to treat it as never having been binding on him. The Anglo-Indian definition certainly covers rather more than the ordinary use of the terms. Cases occur in English law where, by the effect of peculiar enactments, there is a contract enforceable by one party alone, and yet we should not naturally call it a voidable contract. An example is an agreement required by the Statute of Frauds to be in writing, which has been signed by one party and not by the other. Here the party who has signed is bound and the other is free. "Voidable contract" seems not exactly the appropriate name for such a state of things. And it may even be said that a contract which has been completely performed on one side is literally "enforceable by law at the option of one of the parties" only. But the definition as it stands cannot practically mislead (h). Consideration is also defined in the interpretation clause of the Indian Act. Perhaps it is to be regarded rather as a condition generally (though not always) imposed by a positive rule of English law as needful to the formation of a binding contract than as an elementary constituent of an agreement. In fact the English system of law, as distinguished from those of the Continent and even of Scot (g) See Ch. XII. below. (h) There is a similar but slighter difficulty about the use of the word void. A contract when it is fully performed ceases to have legal effect; it is discharged, but there is something harsh in saying that it becomes void, a term suggestive of inefficacy rather than of completed effect. Hence in the fifth definition I have introduced the word discharged as an alternative. |