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the ordinary course of life, which are agreements in the wide sense of the term, but are intended merely as arrangements of a social or friendly nature, and are in no way intended to bind the parties legally. For instance, as already stated, an accepted invitation to dinner could not reasonably be regarded as a contract. extravagant offer, made in jest or not intended to be taken seriously, would not usually be binding. It is possible that cases may occur somewhat near the borderline, and if so, it is a question of fact in each case as to whether a legal contract was or was not intended (9).

Incidentally here may be mentioned the necessity of distinguishing between mere information furnished in response to a request, and an acceptance of a definite offer. In the former case there is of course no contract (r).

Sub-section (1).- Consideration or Seal. For

any contract to be enforceable at law, it is essential either that it should be made under seal, or else that it should be made for valuable consideration.

By a contract under seal is meant one which is embodied in a deed, i.e., a document in writing or print upon paper or parchment, “ signed, sealed, and delivered” by the party against whom it is sought to be enforced (s).

As a matter of fact, it is extremely doubtful whether in ordinary cases (i.e., apart from statutory requirement) the signing of a deed is essential to its validity ; but it is almost invariably done in practice, and is useful, as it raises a presumption that the sealing and delivery were regularly and effectually carried out (t).

A deed may be of two kinds, i.e., (1) an indenture which is made between two or more parties, and (2) a deed poll,

(9) E.g., Carlill v. Carbolic Smoke Ball Co., [1893] 1 Q. B. 236 ; Week v. Tibold (1606), Roll. Abr. 6.

(r) Harrey v. Facey, [1893] A.C. 552.

(*) Co. Litt. 35 b, 171 b.

(6) Hall v. Bainbridge (1848), 12 Q. B. 699.

which is made by one party only, although, of course, where it embodies a promise, it must be either expressly or tacitly accepted, however informally, by the person in whose favour it is made, in order to be legally effective (u). The distinction, however, has now no practical importance.

If a deed is delivered subject to a condition precedent, it is called an escrow, and is, in law, regarded only as an inchoate instrument until the specified condition is fulfilled (c).

It follows from what has been already stated, that a promise by deed is enforceable, although it is purely voluntary and unaccompanied by any benefit to the promisor. Hence a promise to make a gift of anything must be under seal ; for instance, it has been held that a promise not by deed to subscribe to a charitable or philanthropic object is unenforceable (y).

There are various other special cases in which, by common law or statute, a contract must be under seal. But these are irrespective of the question of consideration, and are, therefore, more appropriately dealt with hereafter (-).

Every contract not under seal must be based upon " valuable consideration." Expressed in simple terms, this means that in order that a party to it may be legally bound, he must have got some quid pro quo for his own promise. “ Valuable consideration " has been more elaborately defined by judicial decision as consisting in

some right, interest, profit, or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered, or undertaken by the other” (a).

The following points with regard to consideration will serve briefly te explain its legal position. (a) It may not (o) Cf. Xenoxv. Wickham (1866,

(1778), 7 T. R. 350 ; Cochrane v. L. R. 2 H. L. 296.

Moore (1890), 25 Q. B. D. 57. (x) Co. Litt. 36 a; London Free. (z) Sub-section (5), post, p. 65. hold, etr. Co. v. Suffield, [1896] (a) Currie v. Misa (1875), L. R.

10 Ex. 153 ; 1 App. Ca. 554. (y) Creed v. Henderson (1885), 33 W. R. 819; Runn v. Hughes

2 Ch. 608.

only consist of something actually given or paid or done for the benefit of the promisor, but also of some "forbearance, detriment, loss, or responsibility” incurred by the other party. For instance, the following have been held to be sufficient considerations to support a promise : marriage, or a promise to marry the promisor (b); forbearance to sue on, or compromise of, a doubtful claim ; labour or trouble undertaken ; anything done at the request or invitation of the promisor and in reliance on the promise, even though it may not apparently benefit the promisor in the least (C). Indeed, instances might be multiplied indefinitely ; but these must suffice for present purposes. (b) Consideration need not be adequate. Provided it is real and legally appreciable, it is recognised by law, however slight its apparent value may be. The old case of Thornborou v. Whitacre (d) is an amusing illustration of this point. But if consideration is grossly inadequate, the fact may, in some cases, be strong evidence of fraud, particularly where the surrounding circumstances are suspicious. It is not sufficient consideration for a person to promise another to do what he is already legally bound to do. In effect, this is no consideration at all. For instance, if A. owes B. 1001., and B. subsequently promises to take 501. in full satisfaction of the debt, or to take 501. down and the rest by future monthly instalments, the promise is not binding (e). If, however, the smaller sum is agreed to be paid at an earlier date, or at a different place than originally agreed, the promise will be binding. So, also, if something is accepted of less value, but of a different nature than that owed, there would be sufficient consideration ; for instance, if B, in the above case agreed

(b) Synge v. Synge, [1894)1 Q. B. 466.

(e) Shadırell v. Shadwell (1860), 9 C. B. (N.s.) 159 ; Bainbridge v. Firm done (1838), 8 A. & E. 743.

(d) (1706), 2 Ld. Raym. 1164.

(e) Cumber v. Wane (1719), 1 Strange, 426 ; Foakes v. Beer (1884), L. R. 9 App. Ca. 605 ; Underwood v. Underwood, [1894] P. 204.


to accept in lieu of the 1001.

a horse or a canary or tomtit” (as JESSEL, M.R., once facetiously observed (1)), or a negotiable instrument (such as a cheque) for a smaller sum (9). (c) The consideration must not be illegal or immoral (1). (d) The consideration must not be something already past. For instance, if A., having already sold B. a horse, afterwards warrants the horse to be sound, B. cannot sue on the warranty, because the past sale was no sufficient consideration for it (i).

But where one person does something at another's request, and subsequently the latter promises something in consideration of the act done, this is said to be binding (k). So where B. has voluntarily done (and à fortiori where he has done under legal compulsion) what A. was legally bound to do, and A, subsequently, in consideration of such act, promises something, the promise is, perhaps, binding (1). And an express promise to pay a debt, the right of action in respect of which is barred under the Statutes of Limitation by lapse of time, is binding, if duly evidenced by writing.

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Sub-section (5).-Special Requirements as to Form, etc.

Stamping.As a general rule, no contract made in writing can be put if evidence in an action, unless it is duly stamped in accordance with the requirements of the revenue laws (m). The want of a stamp does not, however, usually invalidate a contract; and an unstamped agreement may be put in evidence on payment of the unpaid duty, and a further sum by way of a penalty.


(f) Couldery v. Bartrum (1881), 19 Ch. D. 394, p. 399.

(9) Goddard v. O'Brien (1882), 9 Q. B. D. 37.

(h) Pearre v. Brooks (1866), L. R. 1 Ex. 213.

(i) Roscorla v. Thomas (1842), 3 Q. B. D. 234.

(k) Lampleigh Brathicait (1616), Hob. 105.

(1) Wing v. Mill (1817), 1 B. & Ald. 104.

(m) The Stamp Act, 1891, ss. 22, 23, and 59, and the Schedule to the Act.

Seal.—Some contracts, quite apart from the question of whether or not they are made for valuable consideration, must be made by deed under seal. By the common law corporations aggregate must contract under seal, except in the following cases, i.e., (1) where the contract relates to matters of trifling importance, daily occurrence, or urgent necessity (n)) where the contract is by a trading corporation in the ordinary course of its business (o); (3) in certain cases of contracts by registered joint stock companies (p); and (4) in specifically enforceable contracts which have been partly performed (9).

There are also a number of contracts or assurances of a contractual nature required by statute to be by deed. The chief instances are the following: sales of shares under the Companies Clauses Act, 1815 ; leases of land for more than three

years under the Statute of Frauds and the Real Property Act, 1845 ; sales of sculpture with copyright under the Sculpture Copyright Act, 1814.

Writing.–Simple contracts for valuable consideration are not required to be in writing by the common law ; but there are many cases in which writing is required by special statutes. The following are the chief instances : (1) bills of exchange and promissory notes, by the Bills of Exchange Act, 1882 ; (2) assignments of any debt or legal chose in action by the Judicature Act, 1873, s. 25 (r) ; (3) transfers of shares in a registered company by the Companies Acts, 1862 to 1900 ; (4) acknowledgments of debts and liabilities barred by the Statutes of Limitation ; (5) assignments of copyright by the Copyright Acts; (6) agreements between masters and seamen by the Merchant Shipping Act, 1894 ; (7) contracts of marine insurance by the Stamp Act, 1891 ; (8) special contracts

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(n) Clarke v. Cuckfield Union (1832), 21 L. J. Q. B. 349.

(0) South of Ireland Colliery Co. v. Waddle (1869), L. R. 4 C. P. 617.

(p) Companies Act, 1867, s. 37.

(9) Mayor of Orford v. Crow, [1893] 3 Ch. 535.

(r) See p. 175, post.


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