Example 1. A let a carriage to B at a yearly rental for five years, and agreed to keep it in repair and to paint it every year. A sold his business to C and notified B that C would be answerable for future repairs. B refused to accept C and returned the carriage. B is right. He is not bound to look to anybody except A for the repairs. But nevertheless A could delegate to C the doing of the necessary work, remaining himself personally liable for any negligence or nonperformance. If the work is artistic work, the performance of it cannot be delegated; the other party has a right to the artistic skill of the person with whom he contracted.

2. Assignment of rights. The rights one acquires under a contract may be assigned if they relate to money or property, but one cannot assign a right to some personal service. At common law the assignee must sue in the name of the assignor, but statutes now generally give the assignee the right to sue in his own name. The assignee is subject to whatever defenses might have been set up against his assignor; he gets the assignor's rights, and no more.

Examples: 2. A contracts to give B $100 for B's horse. A assigns the contract to C. Upon tender of the $100 C is entitled to the horse. So also B could assign the right to receive the money.

3. A contracts to give B his note for $100 for B's horse. A assigns the contract to C. B is not bound to take C's note, nor is he bound to deliver the horse to C unless the latter tenders A's note.

4. C agrees to work for D in D's store for $30 a month. D sells the store to E and assigns to him the contract with C for services. C is not obliged to work for E under the contract.

5. F assigns to H a contract with G by which G agreed to deliver 100 bushels of oats in exchange for F's horse. H sues G for breach in refusing to deliver the oats after receiving the horse. G sets up that F fraudulently represented the horse to be sound and claims an offset in damages. H is subject to this defense precisely as F would have been.

35. Negotiability of certain contracts. Contracts contained in written instruments that are negotiable, such as bills of exchange, promissory notes, and checks, may be transferred by negotiation from hand to hand so that each new holder may recover upon them. Moreover, the transferee, if a holder for value and without notice, is not subject to the personal defenses which might have been set up against the transferror. This incident of negotiability is a peculiar attribute of these

instruments and will be more fully discussed under the head of Negotiable Paper.

The distinction between assignability and negotiability may be thus illustrated.

I. "On demand I promise to deliver to John Doe 100 bushels of wheat at eighty cents a bushel. RICHARD ROE."

Indorsed: "For value received, I hereby assign this contract to J. S. Dale. JOHN DOE."

2. "On demand I promise to pay to the order of John Doe one hundred dollars, value received. RICHARD ROE."

Indorsed: " Pay to J. S. Dale. JOHN DOE."

The first instrument is a common law contract. It is assigned by the promisee, John Doe, to J. S. Dale. The assignee, Dale, may maintain an action against the promisor, Richard Roe, in case the latter refuses to deliver the wheat upon tender of the price. At common law Dale would have to sue in the name of the assignor, Doe, and he would be subject to whatever defenses might have been set up had Doe brought the action himself, as, for example, that there was mistake or fraud in the contract. He may now generally, under statutory provisions, sue in his own name, but he is still subject to the same defenses.

The second instrument is a negotiable promissory note. It is indorsed by the promisee, John Doe, to J. S. Dale. The indorsee, Dale, may maintain an action in his own name against the maker, Richard Roe, in case the latter fails to pay at maturity; and if he gave value and had no notice of any defense, like mistake or fraud, he will not be subject to such defense even though Doe would have been subject to it if he had retained the note and brought the action.

The rules of negotiability came into the law from the custom of merchants, and are peculiar to a class of instruments known as negotiable paper.

36. Assignment by operation of law. Where a contracting party dies, most contracts which he might have assigned during his life pass to his executor or administrator, who may sue or be sued upon them. Contracts for personal services do not survive the death of either party, and contracts requiring

long-continued operations or conduct of business by an administrator will not be deemed to survive.

So where a person becomes a bankrupt his right to enforce contract obligations passes to his trustee in bankruptcy; but the trustee would not be bound to enter upon performance inconsistent with the purpose of winding up the bankrupt's affairs.

At common law a husband upon marrying became entitled to all his wife's personal property and could enforce her claims growing out of contract. Conversely he became liable for her antenuptial debts. But these common law rules have been almost everywhere swept away by statutes giving married women the control of their own property and making them liable for their own contracts.

III. DISCHARGE OF CONTRACTS

37. Discharge by agreement including performance. An agreement to discharge a contract may be made by the parties to it after it is created, or the agreement as to a method of discharge may be contained in the contract itself.

I. Waiver or rescission. When a bilateral contract has been concluded and is a binding agreement, the parties to it, by a new agreement, may contract to discharge it. The consideration is the mutual release of A by B and of B by A from any further liability under it. If the contract has been performed by A but not by B, A may release B, but there must be some consideration for the release or it must be under seal.

Examples: 1. A agrees to sell and B to buy A's book for $1. A and B then mutually agree to release each other. A's promise to release B is the consideration for B's promise to release A, and vice versa.

2. A has delivered the book to B, and B now owes A $1. A promises B not to claim the dollar, that is, releases B from liability. The promise is not enforceable; there is no consideration for it. B gives A fifty cents and A releases B from the balance. Still there is no consideration; a smaller sum is not consideration for a larger. B gives A a ten-cent pencil in consideration of A's promise to release him; the promise is enforceable and B is no longer liable to A. A gives B a release under seal; it is

enforceable and B is released. A release under seal might be as follows: "For value received, I hereby release and discharge B.B. from all claims for the unpaid portion of the purchase price of X book. Witness my hand and seal this seventh day of February, 1905. A.A. [Seal]."

2. Substituted contract. The parties may by agreement substitute a new contract for an existing one.

Example 3. A agrees to dig a well for B for $50. A complains that he will lose money owing to the presence of rock which had not been contemplated. It is agreed that A shall dig the well and that B shall pay him $75. This may be treated as a substituted contract and thus escape the difficulties mentioned in sec. 19, Ex. 4, ante.

3. Provisions for discharge. The contract itself may contain certain provisions looking to a discharge under specified contingencies, as, for example, an agreement that either party may terminate it upon thirty days' notice. Insurance contracts or policies provide for a discharge in case of increase of risk, as in case the property remains vacant and unoccupied for more than ten days, and the like.

4. Discharge by performance. If in accordance with the terms of the contract either party performs what he has promised to perform, he is discharged. If both perform, the contract is discharged or executed. Tender is an attempted performance; if it is accepted, it discharges the one making it; if it is refused, it discharges him unless his contract is for the payment of money, in which case he is still liable on his debt but may plead the tender against a claim for interest or the costs of an action. A tender of money to be technically good must be of the exact amount due and in legal-tender money.

Legal-tender money in payment of private debts consists of any gold coin, silver dollars, United States notes ("greenbacks"), and United States Treasury notes, to any amount; fractional silver coins to the amount of ten dollars; nickel and copper coins to the amount of twenty-five cents. Gold and silver certificates and national bank notes are not legal-tender money, but are ordinarily received in payment of debts without objection.

A tender of a check or note of a debtor need not be accepted in place of money. If it is accepted, it is (in most states) regarded as merely a conditional payment unless otherwise expressly stipulated. If the check or note is not paid, the creditor can either sue upon it or, by returning it, sue upon the original claim for which it was given. But if the creditor takes

the note of some third person, which is the property of the debtor, it is regarded presumptively as payment, just as if he had taken a horse or other corporeal chattel owned by the debtor.

Before a party to a contract can be said to have performed he must have fully and exactly done what he promised. But in contracts for building or executing work with many specifications and details a deviation that is slight and not willful may be overlooked on the doctrine of substantial performance. The contractor, while he may recover upon such substantial performance, must deduct from his recovery the amount the other party is damaged by the deviation. A deviation which is more than slight or trivial, or which is willful, will defeat a recovery because it is not regarded as performance, and the contractor is not therefore discharged from his obligation.

Example 4. A agrees to build a house for B for $11,700. He has fully completed it according to specifications, except that there are some slight defects in the plastering. This is substantial performance and A may recover the contract price less an offset for the defect, which was in this case held to be $200. But if the deviation was willful or excessive, A could not recover. One court says: "It may be harsh doctrine to hold that a man who has built a house shall have no pay for it, but the fault is with the one who voluntarily violates his contract."

If one agrees to perform to the satisfaction of another, and the matter is one of personal taste, he cannot recover until the other is satisfied. But if it is a matter which is not one of mere personal taste, and the work would be lost if it were not accepted, the other must be satisfied when he ought reasonably to be satisfied.

Examples: 5. A agrees to paint the picture of B's wife to B's satisfaction. B is not pleased with it. He is not obliged to take it. A has not performed his contract.

6. A agrees to put in boilers in B's factory to B's satisfaction. A puts in the boilers. B is not satisfied. But if a reasonable man would say B should be satisfied, A has fulfilled his contract and B is liable.

38. Discharge by impossibility of performance. A contract may be discharged by an impossibility existing at the time it is made. In only the excepted cases will subsequent impossibility discharge a contract.