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CHAPTER X.

OF THE SUBJECT-MATTER OF CONTRACTS.

CHAP. X.

On the Subject. Matter of Contracts.

Parties are allowed the fullest latitude with regard to the subject-matter of their contracts. The law, indeed, requires that there shall be nothing illegal in the consideration, or in the thing which is to be done or omitted, and will not enforce“ wagering contracts (see p. 586); but, subject to these exceptions, there is no restriction on the liberty of contracting. The contract may relate to a past, a present, or a future transaction (a); and may have reference to any description of property, right, or duty.

The special subject-matters of contract are of course very
numerous; many of them are more or less regulated by special
statutes and rules of law, as the law of carriers by the Carriers
Act, the law of loans on personal property by the Bills of Sale
Act, the law of contract by negotiable instrument by the Bills of
Exchange Act, 1882, and the law of the sale of goods by the Sale
of Goods Act, 1893. Almost all of them are specially and
elaborately treated in special text-books, and the same subject-
matter is frequently discussed in more text-books than one. In
earlier editions of this work, a selection of certain subject-
matters was made, and while these were fully dealt with, subject-
matters of perhaps equal importance were omitted altogether. In
the succeeding chapters of later and of the present editions, all
the subject-matters of contract will be more or less fully noticed
under the following heads :-
CILAP.

PAGE
XI. The Sale of Land 290 XVII. Guarantees and Indem-
XII. The Letting of Land 307

nities

447

XVIII. Marriage XIII. The Sale of Goods 335

472 XIX. Employment

481 XIV. Bailment, except for

XX. Contracts of Insurance,
Carriage

366

Mortgage and Money-lendXV. Bailment for Carriage. 385

ing, Stock Exchange and XVI. Bills of Exchange, Pro

Club Contracts, and Litemissory Notes, and

rary and Artistic Con.
Cheques.

429
tracts

520
At the head of each of these chapters is given a reference to
the text-book or text-books in which the subject matter of the
chapter is fully treated.
(a) F. N. B. 145 a ; Plowd. 308 a ; Com. Dig. Covenant (A. 1).

19

СНАР.

PAGE

.

C.C.

CHAPTER XI.

THE SALE OF LAND.

[See Williams on Vendors and Purchasers, 2 vols., 1904, especially the Introduction

to vol. 1 ; Dart's Vendors and Purchasers, 6th ed., 2 vols., 1888 ; Seaborne's
Vendors and Purchasers, 5th ed., 1901 ; Carson's Real Property Statutes, 1902;
Wolstenholme's Conveyancing Acts, 8th ed., 1899.]
PAGE

PAGE 1. Disabilities of Trustees, Agents,

(c) Part Performance

299 and others, to be Purchasers. 290 6. Action by Vendor against Pur. 2. Implied Conditions of Sale...... 290

chaser

300 3. Express Conditions of Sale...... 291 7. Action by Purchaser against (a) Compensation for Error 292

Vendor

301 (b) Non-disclosure of Title 293 (a) General Rules

301 4. Sales hy Auction 294 (b) Objections to Title

302 5. Requirement of Writing by

(c) Time Essence of Contract 304 Statute of Frauds .. 296 (d) Damages

30 1 (a) What Contracts within 296 (e) Specific Performance

306 (b) Growing Crops

298
8. Assignment of Contract

306

Sect. 1.Disabilities from purchasing of Trustees, Agents, and

Others.

Disabilities of trustees, agents, &c.

THERE are certain rules of equity which restrict persons who stand in a fiduciary relation to the vendor from making valid agreements for the purchase of property with which they are connected by reason of that relationship (a). The class of persons thus affected includes agents, arbitrators, solicitors acting for vendors, and generally trustees of all kinds.

Sect. 2.The Conditions implied in Contracts of Sale by the Vendor

and Purchaser Act, 1874, and the Conveyancing Act, 1881. In order to shorten contracts of sale, it is provided by sect. 2 of the Vendor and Purchaser Act, 1874, 37 & 38 Vict. c. 48, and by sect. 3 of the Conveyancing Act, 1881, 44 & 45 Vict. c. 41, that certain conditions, which were usually a matter of course expressed

(a) Tate v. Williamson (1866), L. R., Lewin on Trusts, tit. “Purchases by 2 Ch. 55, and the cases there cited ; Trustees ; ” Williams v. Scott, 1900 Pisani v. Attorney-Gencral for Gibraltar A. C. 499 ; Delres v. Gray, (1902) 2 Ch. (1874), L. R., 5 P. C. 516, 536; and see 606, per Byrne, J.

by the slightly varying language of “common forms” in all con- Ch. XI. s. 2. tracts of sale, should be taken to be implied in every such contract Sale of Lund

(under Conunless a contrary intention should be expressed in the contract reyancing of sale itself. These implied conditions are mainly and shortly

Act). that under a contract to assign a lease, the purchaser shall not be entitled to call for the title to the freehold (b), or leasehold reversion (c); that recitals in documents twenty years old shall be assumed to be true, and that where the vendor retains any part of an estate to which any documents of title relate he shall be entitled to retain such documents (d); also, that the purchaser of enfranchised copyhold shall not have the right to call for the title to enfranchise, that the purchaser of leasehold shall assume that the lease was duly granted, and on production of the receipt for the last payment due for rent, that all the covenants in the lease have been observed ; that the expenses of producing, inspecting, and procuring all documents and certificates not in the vendor's possession shall be borne by the purchaser requiring the same; and that on a sale of any property in lots, a purchaser of two or more lots, held wholly or partially under the same title, shall not have a right to more than one abstract of the common title, except at his own expense (e).

The Vendor and Purchaser Act, 1874, further made forty instead of sixty years the general period for the commencement of title, except as therein provided, or expressly stipulated to the contrary.

SECT. 3.-The ordinarily expressed Conditions of Sale. The ordinarily expressed conditions of sale, which have effect either in addition to or variation of the above implied conditions (f), may be divided roughly into—first, conditions relating to matters of title of conveyance by which after considering the vendor's title his advisers bar beforehand any requisitions as to any existing flaw or defect, or requisitions which would cause unusual trouble and expense; and further fix the commencement of the title to be shown by stating the document which is to be the root of the title, if such period is less than the statutory one of forty (6) V. & P. Act, 1874, s. 1.

if and so far as a contrary intention is (c) Conv. Act, 1881, s. 3, sub-s. 1. not expressed in the contract of sale, and (d) V. & P. Act, 1874, s. 1.

shall have effect subject to the terms of (e) Conv. Act, 1881, s. 3.

the contract and to the provisions therein (f) The 2nd section of the Act of contained." 1874 is “subject to any stipulation to For the Acts at length, with cases up the contrary,” and the 3rd section of the to 1894, see Chitty's Statutes, tit. “Con Act of 1881, by sub-sect. 9, “applies only veyancing and Law of Property.”

years; and secondly, the conditions as to the conduct of the sale Sale of Land itself, and the completion of the purchase, so as to guard the (Ordinarily

expressed vendor against any innocent error and protect him against a Conditionx).

captious, tardy, or insolvent purchaser, by giving a right of rescission and resale, requiring a deposit which may be forfeited, fixing time for requisitions, &c. What conditions are in each case to be inserted vary of course according to the exigencies of each, and as the sale is by private contract or public sale, subject to customs known as the “practice of conveyancers " which have grown up to have nearly the force of law (g), and subject further to the professional obligation not to employ stipulations which are unnecessary or may appear alarming to prudent purchasers. Further, trustee or quasi-trustee vendors must not employ

depreciatory” conditions, or the sale may be set aside by a dissatisfied purchaser (1).

(a) Compensation for Error.

Error or misdescription not to annul sale.

Palmer v. Johnson,

Exception.

A common condition is that any error or misdescription shall not vitiate the sale, but that such error shall be made the subject of compensation to the vendor or purchaser, as the case may be, and this condition has been held to apply, both at law and in equity, whether the error complained of was discovered before or the purchase was completed (i). But it does not apply to any case in which the error was wilful or fraudulent (k).

And it is held that even an unintentional error will vitiate the sale, notwithstanding the clause in question, where no calculation can be made as to the amount of compensation which should be allowed or paid to the purchaser (1).

And so, where the misdescription, although it does not proceed from fraud, is in a material and substantial point, and is calculated to mislead the purchaser (m), or so far affects the subject-matter of the contract, that it may reasonably be supposed that, but for such misdescription the purchaser would never have entered into the contract at all; the contract is avoided altogether, and the

Substantial misdescription.

(9) See per Lord Eldon, L.C., in Howard v. Ducane (1823), 1 Tur. & R. 81, at PP. 86, 87, cited in Comper v. Emery (1844), 10 Sim. 609 ; 1 Ph. 391, App.

(h) See Lewin on Trusts, Ch. XVIII., “Trustees for Sale," where also the personal liability of a trustee vendor to his cestui que trust is considered.

(i) Bosv. Helsham (1866), L. R., 2 Ex. 72 ; Re Turner and Skelton (1879), 13 Ch. D. 130 ; followed in Palmer v. Johnson (1884), 13 Q. B. D. 351, C. A., where the Court dissented from Malins,

V.-C.'s decisions per contra in Manson v. Thacker (1878), 7 Ch. D. 620, 624, and also in Allen v. Richardson (1879), i3 ib. 524.

(k) Duke of Norfolk v. Worthy (1808), 1 Camp. 337 ; 10 R. R. 749; Robinson v. Musgrore (1838), 2 Moo. & Rob. 92.

(1) White v. Cuddon (1842), 8 C. & E. 766, 792 ; Brooke (Lord) v. Rounthwaite (1816), 5 Hare, 298.

m) See Dimmock v. Hallett (1866), L. R., 2 Ch. 21, and Terry and White, In re (1886), 32 Ch. D. at p. 28, C. A.

for error

purchaser is not bound to resort to his claim for compensation (n),

CH, XI, s. 3. for the condition only applies to small errors (o). Nor, as it Sale of Lund

(Ordinarily seems, does it make any difference in such a case, that the mis- expressed

Conditions). description would be obvious on an inspection of the premises (p).

And where the agreement was, to sell an unexpired term of Compensation eight years ; and it appeared that, at the date of the agreement, contd. the unexpired term was only seven years and seven months; Lord Ellenborough said (9) :—“The parties cannot be supposed to have meant that there was the exact term of eight years unexpired, neither more nor less by a single day. The agreement must therefore receive a reasonable construction; and it seems not unreasonable, that the period mentioned in the agreement should be calculated from the last preceding day when the rent was payable, and including therefore the current half-year. Any fraud or material misdescription, though unintentional, would vacate the agreement; but the defendant might have had substantially what he agreed to purchase."

But a condition thus worded as to misdescription of property Non-applicawill not apply to a misdescription of title, but only applies to the tion to title. material land (1).

(b) Non-disclosure of Vendor's Title. It may now be taken as a settled rule, that although there be a Effect of con.

dition that condition that the title of the vendor is not to be shown, or that a title of vendor certain fact is not to be required to be shown ; if it be discovered is not to be

shown. aliunde that the vendor's title is bad, or that the statement of the fact is erroneous, the purchaser may take advantage of the error, and is not bound by any misleading condition (s). Therefore a condition that, “if the purchaser shall make any objection or requisition in respect of the title, which the vendor shall be unwilling, on the ground of expense or otherwise, to comply with, the vendor may annul the sale”-does not apply to a case where the vendor has not any title at all (t). And the vendor

(n) Flight v. Booth (1834), 1 Scott, 190, 202 ; and see Dykcs v. Blake (1838), 6 Scott, 320, 346 ; Durham (Earl of ) v. Legard (1865), 34 Beav. 611, where the estate, advertised as 21,750 acres, turned out only to contain 11,814 acres ; In re Fawcett and Holmes (1889), 42 Ch. D. 150, C. A.; Puckett and Smith's Contract, In re, [1902] 2 Ch. 258.

(6) Whittemore v. IVhittemore (1869), 8 Eq. 603 ; observed upon in Terry and While, In re (1886), 32 (h. D. 14, C. A.

(P) See Dykes v. Blake (1838), 6 Scott, 320, and observations in that case, on the contrary opinion expressed by Parke, B.,

in Wright v. Wilson (1832), 1 Moo. &
Rob. 207.

(9) Belworth v. Hassell (1815), 4 Camp.
140 ; 16 R. R. 761.

(r) Beyfus and Masters' Contrrut, In re (1888), 39 Ch. D. 110, C. A. ; Debenham v. Sawbridge, [1901] 2 Ch. 98, per Byrne, J.

(s) Marsh v. Earl Granville (1883), 24 Ch. D. 11, C. A. ; Nottingham Brick and Tile Co. v. Butler (1886), 16 Q. B. D. 778, C. A.

(1) Bouman v. Hyland (1878), 8 Ch. D. 588.

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