Evidence.

There are certain rules of evidence which to some extent guide or restrain interpretation. In particular, oral testimony is not allowed to vary the terms of an agreement reduced to writing. This is really in aid of the parties' deliberate intention, for the object of reducing terms to writing is to make them certain. There are apparent exceptions to the rule, of which the most conspicuous is the admission of evidence to show that words were used in a special meaning current in the place or trade in question. But they are reducible, it will be found, to applications (perhaps over-subtle in some cases) of the still more general principles that, before giving legal force to a document, we must know that it is really what it purports to be, and that when we do give effect to it according to its terms we must be sure of what its terms really say. The rules of evidence here spoken of are modern, and have nothing to do with the archaic rule already mentioned as to the effect of a deed.

Perform

ance.

Every contracting party is bound to perform his promise according to its terms, and in case of any doubt in the sense in which the other party would reasonably understand the promise. Where the performance on one or both sides extends over an appreciable time, continuously or by instalments, questions may arise as to the right of either party to refuse or suspend further performance on the ground of some default on the other side. Attempts to lay down hard and fast rules on such questions are now discouraged, the aim of the courts being to give effect to the true substance and intent of the contract in every case. Nor will the court hold one part of the terms deliberately agreed to more or less material than another in modern business dealings. "In the contracts of merchants time is of the essence," as the Supreme Court of the United States has said in our own day. Certain ancient rules restraining the apparent literal effect of common provisions in mortgages and other instruments were in truth controlling rules of policy. New rules of this kind can be made only by legislation. Whether the parties did or did not in fact intend the obligation of a contract to be subject to unexpressed conditions is, however, a possible and not uncommon question of interpretation. One class of cases giving rise to such questions is that in which performance becomes impossible by some external cause not due to the promisor's own fault. As to promises obviously absurd or impossible from the first, they are unenforceable only on the ground that the parties cannot have seriously meant to create a liability. For precisely the same reason, supported by the general usage and understanding of mankind, common social engagements, though they often fulfil all other requisites of a contract, have never been treated as binding in law.

In all matters of contract, as we have said, the ascertained will of the parties prevails. But this means a will both lawful and free. Hence there are limits to the Illegality. force of the general rule, fixed partly by the law

of the land, which is above individual will and interests, partly by the need of securing good faith and justice between the parties themselves against fraud or misadventure. Agreements cannot be enforced when their performance would involve an offence against the law.

only in acts commonly recognized as criminal, disloyal, or immoral, but in the breach or non- -observance of positive regulations made by the Legislature, or persons having statutory authority, for a great variety of purposes. It would be useless to give details on the subject here. Again, there are cases where an agreement may be made and performed without offending the law, but on grounds of "public policy" it is not thought right that the performance should be a matter of legal obligation, even if the ordinary conditions of an enforceable contract are satisfied. A man may bet, in private at any rate, if he likes, and pay or receive as the event may be; but for many years the winner has had no right of action against the loser. the loser. Unfortunate timidity on the part of the judges, who attempted to draw distinctions instead of saying boldly that they would not entertain actions on wagers of any kind, threw this topic into the domain of legislation; and the laudable desire of Parliament to discourage gambling, so far as might be, without attempting impossible prohibitions, has brought the law to a state of ludicrous complexity in both civil and criminal jurisdiction. But what is really important under this doctrine of public policy is the confinement of "contracts in restraint of trade" within special limits. In the Middle Ages and down to modern times there was a strong feeling-not merely an artificial legal doctrine-against monopolies and everything tending to monopoly. Agreements to keep up prices or not to compete were regarded as criminal. Gradually it was found that some kind of limited security against competition must be allowed if such transactions as the sale of a going concern with its goodwill, or the retirement of partners from a continuing firm, or the employment of confidential servants in matters involving trade secrets, were to be carried on to the satisfaction of the parties. Attempts to lay down fixed rules in these matters were made from time to time, but they were finally discredited by the decision of the House of Lords in the Maxim-Nordenfelt Company's case in 1894. Contracts "in restraint of trade" will now be held valid, provided that they are made for valuable consideration (this even if they are made by deed), and do not go beyond what can be thought reasonable for the protection of the interests concerned, and are not injurious to the public. (The Indian Contract Act, passed in 1872, has unfortunately embodied views now obsolete, and remains unamended.) All that remains of the old rules in England is the necessity of valuable consideration, whatever be the form of the contract, and a strong presumption-but not an absolute rule of law-that an unqualified agreement not to carry on a particular business is not reasonable.

Where there is no reason in the nature of the contract

Fraud.

for not enforcing it, the consent of a contracting party may still not be binding on him because not given with due knowledge, or, if he is in a relation of dependence to the other party, with independent judgment. Inducing a man by deceit to enter into a contract may always be treated by the deceived party as a ground for avoiding his obligation, if he does so within a reasonable time after discovering the truth, and, in particular, before any innocent third person has acquired rights for value on the faith of the contract (see FRAUD). Coercion would be treated on principle in the same way as fraud, but such cases hardly occur in modern times. There is a kind of moral domination, however, which our courts watch with the utmost jealousy, and repress under the name of "undue influence" when it is used to obtain pecuniary advantage. Persons in a position of legal or practical authority - guardians, confidential advisers, spiritual directors, and the like-must not abuse their

to take benefits from those who depend on them or put their trust in them; but if they do, and the givers repent of their bounty, the whole burden of proof is on the takers to show that the gift was in the first instance made freely and with understanding. Large voluntary gifts or beneficial contracts, outside the limits within which natural affection and common practice justify them, are indeed not encouraged in any system of civilized law. Professional money-lenders were formerly checked by the usury laws: now that no rate of interest is in itself unlawful, courts and juries have shown a certain astuteness in applying the rules of law as to fraud and undue influence—the latter with certain special features to transactions with needy "expectant heirs" and other improvident persons which seem on the whole unconscionable. In the case of both fraud and undue influence, the person entitled to avoid a contract may, if so advised, ratify it afterwards; and ratification, if made with full knowledge and free judgment, is irrevocable. A contract made with a person deprived by unsound mind or intoxication of the capacity to form a rational judgment is on the same footing as a contract obtained by fraud, if the want of capacity is apparent to the other party.

There are many cases in which a statement made by one party to the other about a material fact will enable the other to avoid the contract if he has relied on it, and it was in fact untrue, though it may have been made at the time with honest belief in its truth. This is so wherever, according to the common course of business, it is one party's business to know the facts, and the other practically must, or reasonably may, take the facts from him. In some classes of cases even inadvertent omission to disclose any material fact is treated as a misrepresentation. Contracts of insurance are the most important; here the insurer very seldom has the means of making any effective inquiry of his own. Misdescription of real property on a sale, without fraud, may according to its importance be a matter for compensation or for setting aside the contract. Promoters of companies are under special duties as to good faith and disclosure which have been worked out at great length in the modern decisions. But company law has become so complex within the present generation that, so far from throwing much light on larger principles, it is hardly intelligible without some previous grasp of them. Sometimes it is said that misrepresentation (apart from fraud) of any material fact will serve to avoid any and every kind of contract. It is submitted that this is certainly not the law as to the sale of goods or as to the contract to marry, and therefore the alleged universal rule does not exist. But it must be remembered that parties can, if they please, and not necessarily by the express terms of the contract itself, make the validity of their contract conditional on the existence of any matter of fact whatever, including the correctness of any particular statement. If they have done this, and the fact is not so, the contract has no force; not because there has been a misrepresentation, but because the parties agreed to be bound if the fact was so and not otherwise. question of interpretation whether in a given case there was any such condition.

It is a

Mistake is said to be a ground for avoiding contracts, and there are cases which it is practically convenient to group under this head. On principle they seem to be mostly reducible to failure of the acceptance to correspond with the offer, or absence of any real consideration for the promise. In such cases, whether there be fraud or not, no contract is ever formed, and therefore there is nothing which can be ratified-a distinction which may have important effects. Relief against mistake is given where

fail to express their intention correctly. Here, if the original true intention is fully proved-as to which the court is rightly cautious-the faulty document can be judicially rectified.

Disability.

By the common law an infant (i.e., a person less than twenty-one years old) was bound by contracts made for "necessaries," i.e., such commodities as a jury holds, and the court thinks they may reasonably hold, suitable and required for the person's condition; also by contracts otherwise clearly for his benefit; all other contracts he might confirm or avoid after coming of age. An extremely ill-drawn Act of 1874 absolutely deprived infants of the power of contracting loans, contracting for the supply of goods other than necessaries, and stating an account so as to bind themselves; it also disabled them from binding themselves by ratification. The liability for necessaries is now declared by legislative authority in the Sale of Goods Act, 1893. Practically, people who give credit to an infant do so at their peril, except in cases of obvious urgency.

Married women were incapable by the common law of contracting in their own names. At this day they can hold separate property and bind themselves to the extent of that property-not personally-by contract. The law before the Married Women's Property Acts (1882 and 1893, and earlier Acts now superseded and repealed) was a very peculiar creature of the Court of Chancery; the number of cases in which it is necessary to go back to it is of course decreasing year by year. But a married woman can still be restrained from anticipating the income of her separate property, and the restriction is still commonly inserted in marriage settlements.

There is a great deal of philosophical interest about the nature and capacities of corporations, but for modern practical purposes it may be said that the legal powers of British corporations are directly or indirectly determined by Acts of Parliament. For companies under the Companies Acts the controlling instrument or written constitution is the memorandum of association. Company draftsmen, taught by experience, nowadays frame this in the most comprehensive terms. Questions of either personal or corporate disability are less frequent than they were. In any case, they stand apart from the general principles which characterize our law of contract.

AUTHORITIES.-History: AMES. "The History of Assumpsit," Harvard Law Rev. ii. 1, 53. Cambridge, Mass., 1889.-POLLOCK and MAITLAND. History of English Law, 2d ed., ii. 184-239. Cambridge, 1898. Modern: POLLOCK, article "Contract" in Encyclopædia of the Laws of England, vol. iii., London, 1897, a technical summary of the modern law. Of the text-books, ANSON, English Law of Contract, is now in a ninth edition, 1899; HARRIMAN, Law of Contracts, in a second, 1901; POLLOCK, Principles of Contract, in a seventh, 1902.-O. W. HOLMES (afterwards Chief Justice of Massachusetts), The Common Law, Boston, Mass., 1881, is illuminating on contract as on other legal topics, though the present writer cannot accept all the learned judge's historical conjectures. (F. Po.)

Conveyancing is the art or science of effecting the transfer of property, or modifying interests in relation to property, by means of written documents.

History.

In early legal systems the main element in the transfer of property was the change, generally accompanied by some public ceremony, in the actual physical possession: the function of documents, where used, being merely the preservation of evidence. Thus, in Great Britain. in the feudal period, the common mode of conveying an immediate freehold was by feoffment with livery of seisin -a proceeding in which the transferee was publicly invested with the feudal possession or seisin, usually through the medium of some symbolic act performed in

the presence of witnesses upon the land itself. A deed or charter of feoffment was commonly executed at the same time by way of record, but formed no essential part of the conveyance. In the language of the old rule of the common law, the immediate freehold in corporeal hereditaments lay in livery, whereas reversions and remainders and all incorporeal hereditaments lay in grant, i.e., passed by the delivery of the deed of conveyance or grant without any further ceremony. The process by which this distinction was broken down and the present uniform system of private conveyancing by simple deed was established, constitutes a long chapter in English legal history.

The

The land of a feudal owner was subject to the risk of forfeiture for treason, and to military and other burdens. The common law did not allow him to dispose of it by will. By the law of mortmain religious houses were prohibited from acquiring it. desire to escape from these burdens and limitations gave rise to the practice of making feoffments to the use of, or upon trust for, persons other than those to whom the seisin or legal possession was delivered. The common law recognized only the legal tenant; but the cestui que use or beneficial owner gradually secured for his wishes and directions concerning the profits of the land the strong protection of the chancellors as exercising the equitable jurisdiction of the king. The resulting loss to the Crown and the great lords of the feudal dues and privileges, coupled with the public disadvantages arising from ownership of land which, in an increasing degree, was merely nominal, brought about the passing in the year 1535 of the famous Statute of Uses, the object of which was to destroy altogether the system of uses and equitable estates It enacted, in substance, that whoever should have a use or trust in any hereditaments should be deemed to have the legal seisin, estate, and possession for the same interest that he had in the use; in other words, that he should become in effect the feudal tenant without actual delivery of possession to him by the actual feoffee to uses or trustee. In its result the statute was a fiasco. It was solemnly decided that the Act transferred the legal possession to the use once only, and that in the case of a conveyance to A to the use of B to the use of or upon trust for C, it gave the legal cstate to B, and left C with an interest in the position of the use before the statute. Thus was completed the foundation of the modern system of trusts fastened upon legal estates and protected by the equitable doctrines and practice of the judicature. But the statute not only failed to abolish uses: it also opened the way to the evasion of the public ceremony of " "livery of seisin," and the avoidance of all notoriety in conveyances. Other ways, besides an actual feoffment to uses, of creating a use had been in vogue before the statute. If A bargained with B, in writing or not, for the sale of land, and B paid the price, but A remained in legal possession, the Court of Chancery enforced the use or equitable interest in favour of B. The effect of a "bargain and sale" (as such a transaction was called) after the statute was to give B the legal interest without any "livery of seisin." This fresh danger was met in the very year of the statute itself by an enactment that a bargain and sale of an estate of inheritance or freehold should be made by deed publicly enrolled. But the Statute of Enrolments was in terms limited to estates of freehold. It was allowed that a bargain and sale for a term, say, of one year, must transfer the seisin to the bargainee without enrolment. And since what remained in the bargainor was merely a reversion which "lay in grant," it was an easy matter to release this by deed the day after. By this ingenious device was the publicity of feoffment or enrolment avoided, and the lease and release, as the process was called, remained the usual mode of conveying a freehold in possession down to the 19th century.

It was not until 1845 that the modern system of transfer by a single deed was finally established. By the Real Property Act of that year it was enacted that all corporeal hereditaments should, as regards the immediate freehold, be deemed to lie in grant as well as in livery. Since this Act the ancient modes of conveyance, though not abolished by it, have in practice become obsolete. Traces of the old learning connected with them remain, however, embedded in the modern conveyance. Many a purchase-deed recites that the vendor is seised in fee-simple of the property. It is the practice, moreover, to convey not only "to" but also "to the use of " a purchaser. For before the Statute of Uses, a conveyance made without any consideration or declaration of uses was deemed to be made to the use of the party conveying. In view of the operation of the

statute upon the legal estate in such circumstances, it is usual in all conveyances, whether for value or not, to declare a use in favour of the party to whom the grant is made.

In its popular usage the word "conveyance" signifies the document employed to carry out a purchase of land. But the term "conveyancing" is of much wider import, and comprises the preparation and completion of all kinds of legal instruments. A well-known branch of the conveyancer's business is the investigation of title-an important function in the case of purchases or mortgages of real estate. With personal estate (other than leasehold) he has perhaps not so much concern. Chattels are usually transferred by delivery, and stocks or shares by means of printed instruments which can be bought at a law-stationer's. The common settlements and wills, however, deal wholly or mainly with personal property; and an interest in settled personalty is frequently the subject of a mortgage. Of late years, also, there has been an enormous increase in the volume of conveyancing business in connexion with limited joint-stock companies.

The

In the preparation of legal documents the practitioner is much assisted by the use of precedents. These are outlines or models of instruments of all kinds, exhibiting in accepted legal phraseology their usual form and contents with additions and variations adapted to particular circumstances. Collections of them have been in use from early times, certainly since printing became common. modern precedent is, upon the whole, concise and businesslike. The prolixity which formerly characterized most legal documents has largely disappeared, mainly through the operation of recent statutes which enable many clauses previously inserted at great length to be, in some cases, e.g., covenants for title, incorporated by the use of a few prescribed words, and in others safely omitted altogether. The Solicitors' Remuneration Act, 1881, has also assisted the process of curtailment, for there is now little or no connexion between the length of a deed and the cost of its preparation. So long as the draftsman adheres to recognized legal phraseology and to the well-settled methods of carrying out legal operations, there is no reason why modern instruments should not be made as terse and businesslike as possible.

Contracts

It is not usual for land to be sold without a formal agreement in writing being entered into. This precaution is due, partly to the Statute of Frauds (§ 4), which renders a contract for the sale of land for sale. unenforceable by action "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," and partly to the fact that there are few titles which can with prudence be exposed to all the requisitions that a purchaser under an 66 "open contract" is entitled by law to make. Such a purchaser may, for example, require a forty years' title (Vendor and Purchaser Act, 1874). Under an open contract a vendor is presumed to be selling the fee-simple in possession, free from any incumbrance, or liability, or restriction as to user or otherwise; and if he cannot deduce a title of the statutory length, or procure an incumbrance or restriction to be removed, the purchaser may repudiate the contract. The preparation of an agreement for sale involves accordingly an examination of the vendor's title, and the exercise of skill and judgment in deciding how the vendor may be protected against trouble and expense without prejudice to the sale. Upon a sale by auction the agreement is made up of (1) the particulars, which describe the property; (2) the conditions of sale, which state the terms upon which it is offered; and

(3) the memorandum or formal contract at the foot of the conditions, which incorporates by reference the particulars and conditions, names or sufficiently refers to the vendor, and is signed by the purchaser after the sale. The object of the agreement, whether the sale is by private contract or by auction, is to define accurately what is sold, to provide for the length of title and the evidence in support of or in connexion with the title which is to be required except so far as it is intended that the general law shall regulate the rights of the parties, and to fix the times at which the principal steps in the transaction are to be taken. It is also usual to provide for the payment of interest at a prescribed rate upon the purchase money if the completion shall be delayed beyond the day fixed for any cause other than the vendor's wilful default, and also that the vendor shall be at liberty to rescind the contract without paying costs or compensation if the purchaser insists upon any requisition or objection which the vendor is unable or, upon the ground of expense or other reasonable ground, is unwilling to comply with or remove. Upon a sale by auction it is the rule to require a deposit to be paid by way of security to the vendor against default on the part of the purchaser.

Abstract of title.

The signature of the agreement is followed by the delivery to the purchaser or his solicitor of the abstract of title, which is an epitome of the various instruments and events under and in consequence of which the vendor derives his title. A purchaser is entitled to an abstract at the vendor's expense unless otherwise stipulated. It begins with the instrument fixed by the contract for the commencement of the title, or, if there has been no agreement upon the subject, with an instrument of such character and date as is prescribed by the law in the absence of stipulation between the parties. From its commencement as so determined the abstract, if properly prepared, shows the history of the title down to the sale; every instrument, marriage, birth, death, or other fact or event constituting a link in the chain of title, being sufficiently set forth in its proper order. The next step is the verification of the abstract on the purchaser's behalf by a comparison of it with the originals of the deeds, the probates of the wills, and office copies of the instruments of record through which the title is traced. The vendor is bound to produce the original documents, except such as are of record or have been lost or destroyed, but, unless otherwise stipulated, the expense of producing those which are not in his possession falls upon the purchaser (C. A., 1881). After being thus verified, the abstract is perused by the purchaser's advisers with the object of seeing whether a title to the property sold is deduced according to the contract, and what evidence, information, or objection, in respect of matters appearing or arising upon the abstract, ought to be called for or taken. For this purpose it is necessary to consider the legal effect of the abstracted instruments, whether they have been properly completed, whether incumbrances, adverse interests, defects, liabilities in respect of duties, or any other burdens or restrictions disclosed by the abstract, have been already got rid of or satisfied, or remain to be dealt with before the completion of the sale. The result of the consideration of these matters is embodied in "requisitions Requisiupon title," which are delivered to the vendor's tions. solicitors within a time usually fixed for the purpose by the contract. In making or insisting upon requisitions regard is had, among other things, to any special conditions in the contract dealing with points as to which evidence or objection might otherwise have been required or taken, and to a variety of provisions contained in the V. and P. Act, 1874, and the Conveyancing Act, 1881, which apply, except so far as otherwise agreed,

and of which the following are the most important: (1) Recitals, statements, and descriptions of facts, matters, and parties contained in instruments twenty years old at the date of the contract are, unless proved inaccurate, to be taken as sufficient evidence of the truth of such facts, matters, and descriptions; (2) a purchaser cannot require the production of, or make any requisition or objection in respect of, any document dated before the commencement of the title, (3) the cost of obtaining evidence and information not in the vendor's possession must be borne by the purchaser. The possibility of the rescission clause now commonly found in contracts for the sale of real estate being exercised in order to avoid compliance with an onerous requisition, is also an important factor in the situation. The requisitions are in due course replied to, and further requisitions may arise out of the answers. A summary method of obtaining a judicial determination of questions connected with the contract, but not affecting its validity, is provided by the V. and P. Act, 1874. Before completion it is usual for the purchaser to cause searches to be made in various official registers for matters required to be entered therein, such as judgments, land charges, and pending actions, which may affect the vendor's title to sell, or amount to an incumbrance upon the property.

Convey

ances.

When the title has been approved, or so soon as it appears reasonably certain that it will be accepted, the draft conveyance is prepared and submitted to the vendor. This is commonly done by and at the expense of the purchaser, who is entitled to determine the form of the conveyance, provided that the vendor is not thereby prejudiced, or put to additional expense. The common mode of conveying a freehold is now, as already mentioned, by ordinary deed, called in this case an indenture, from the old practice, where a deed was made between two or more parties, of writing copies upon the same parchment and then dividing it by an indented or toothed line. Indenting is, however, not necessary, and in modern practice is disused. A deed derives its efficacy from its being sealed and delivered. It is still a matter of doubt whether signing is essential. It is not necessary that its execution should be attested except in special circumstances, as, e.g., where made under a power requiring the instrument exercising it to be attested. But in practice conveyances are not only sealed, but also signed, and attested by one or two witnesses. The details of a conveyance in any particular case depend upon the subject-matter and terms of the sale, and the state of the title as appearing by the abstract. The framework, however, of an ordinary purchase-deed consists of (1) the date and parties, (2) the recitals, (3) the testatum or witnessingpart, containing the statement of the consideration for the sale, the words incorporating covenants for title, and the operative words, (4) the parcels or description of the property, (5) the habendum, showing the estate or interest to be taken by the purchaser, and (6) any provisos or covenants that may be required. A few words will illustrate the object and effect of these component parts.

(1) The parties are the persons from whom the property, or some estate or interest in or in relation to it, is to pass to the purchaser, or whose concurrence is rendered necessary by the state of the title in order to give the purchaser the full benefit of his contract and to complete it according to law. It is often necessary that other persons besides the actual vendor should join in the conveyance, e.g., a mortgagee who is to be paid off and convey his estate, a trustee of an outstanding legal estate, a person entitled to some charge or restriction who is to release it, or trustees who are to receive the purchase-money where a limited owner is selling under a power (e.g., a tenant for life