Contract. The law of contract occupies a prominent place in all modern systems of jurisprudence, and different nations are in closer agreement as to its principles than in regard to any other department of law. A contract may be defined as the voluntary agreement of two or more persons, by which something is to be given or done upon the one side, for a valuable consideration, either present or future, upon the other side. English lawyers usually adject to this definition the qualification that the agreement is enforceable by law, an agreement not enforceable by law being regarded as void. Every contract requires a consideration, a quid pro quo, but as a general rule any consideration, adequate or inadequate, will be sufficient. For the making of a contract there must be a communication between the parties of their intention—i.e., in one shape or another, there must be offer and acceptance of distinct terms. An offer or proposal can be revoked at any time before it is accepted; and in strict law, silence does not give consent. When silence is taken to constitute acceptance, it must be silence under such circumstances as to amount to acquiescence. An acceptance must be unqualified, otherwise there is no contract. As the validity of a contract rests upon the consent of parties, persons legally incapable of giving consent cannot be parties to a contract. Contracts made by a person under the age of twenty-one are as a general rule voidable, unless they have been made for his benefit, or, as in England, for his 'necessaries.' And persons in a state of absolute drunkenness cannot contract, although a lesser degree of intoxication may be compatible with legal consent. Similarly, contracts made by a lunatic are voidable when it can be shown that his state was known to the other contracting party. Further, the consent given must be genuine, and a contract will be void if there is mistake or error in either of the parties with regard to any essential particular. Thus, if A sell to B a bar of brass in the belief that it is a bar of gold, and B buy in the same belief, the contract is bad by error. Misrepresentation, or innocent misstatement of fact, and fraud, or wilful misstatement of fact, will also vitiate a contract, as will force or fear or undue influence exercised to compel the consent of either of the parties. A contract may also be void by impossibility—e.g. when the thing agreed to be done is naturally impossible, as in the case of a pianoforte player who is prevented from performing his agreement by dangerous illness; or impossible by construction of law, as when a change in the law of the country supervenes upon and contradicts a private agreement. Besides these, the law refuses to recognise contracts to perform any illegal act, as to burn a house or steal a horse; and such an agreement may be in itself a crime, as conspiracy. Contracts against good morals, as, e.g., an agreement to pay the price of prostitution, are denied legal recognition and enforcement, as also are agreements against the public policy of the country where they are made. Examples are agreements in fraud of the revenue, as in smuggling transactions; or contracts in restraint of marriage, which are held to be against public policy as tending to decrease the population. Thus a contract not to marry is void.
Contracts are variously classified. The law of Scotland adopts the old division of the civil law into Nominate Contracts and Innominate Contracts. The nominate contracts are loan, commode, deposit, pledge, sale, permutation, location, society or partnership, and mandate. The law of England distinguishes between Contracts of Record and Contracts under Seal—both of which are formal, or dependent for their validity upon their form—and simple contracts, which depend for their validity upon the presence of consideration. Contracts of record are the judgments of a court; recognisances, as contracts made with the crown in its judicial capacity; and the obsolete acknowledgments of debt known as Statutes Merchant and Staple. Deeds and bonds may be taken as examples of contract under seal. Of simple contracts, some require no specialties of form; others are by law required to be in writing, as, e.g., a bill of exchange or an assignment of copyright. Contracts are distinguished into express or implied accordingly as they are based upon formal statements in words, spoken or written, or upon matter of inference and deduction either from the conduct of the parties or from the provisions of law. They are also distinguishable into executed contracts, where the transaction is completed the moment the agreement is made, as where an article is paid for and delivered over the counter, and executory contracts, where some future act is to be done after the arrangement is completed, as where an agreement is made to build a house in six months. A contract of benevolence is one made for the benefit of only one of the contracting parties. See BREACH, DAMAGES, HUSBAND AND WIFE, SALE, WARRANTY. The remedy for breach of contract is an action for a certain sum due by the defaulter or for damages, ascertained by a jury; but where the remedy of damages is inadequate or unsuitable, the courts will enforce a contract by decree for specific performance of the thing agreed to be done, or by injunction forbidding an act agreed not to be done.