person to dispose of his capital or labour as he will; but such act must not be accompanied by threats or violence; and no action will lie against a trade union for any tort alleged to have been committed by or on behalf of the trade union, although the actual tort feasor may be liable.

An agent carrying out an agreement for his principal is not an exception to the rule that a third party has no rights or obligations under a contract; for the agent is, in effect, the principal. The legal maxim is Qui facit per alium facit per se (who acts through another acts himself)-the agent really steps into the shoes of the principal for the purposes of the contract.

CONSTRUCTION OF CONTRACTS

The construction of a contract will be placed upon it by the Courts, but there are certain general rules of construction which must be observed, and these apply equally to verbal and to written contracts (a)—

(1) The construction must be reasonable, according to the intention of the parties, liberal and favourable. (2) Words must be construed in their plain ordinary and popular sense, except those that have by custom acquired a peculiar meaning from use in a certain locality or trade, or where the context shows that some other meaning was intended.

(3) Construction shall be put upon the entire instrument, so that one part may assist another.

(4) The words of a contract must be construed most strongly against the party who uses them.

(5) Unless expressly excluded, notice will be taken of commercial and local customs.

(6) A contract must be construed according to the law of the country where made, except when the parties contracted with a view to a different country.

(7) Parol evidence is not admissible to vary or contradict a written instrument, except in the case of a latent, but not of a patent, ambiguity.

In the case of a verbal contract, what was the intention of the parties as to the rights and obligations arising out of it must be gathered from the circumstances. If the contract is in writing, the rights and obligations will be as set out therein, and the terms cannot be varied by oral evidence except

.

(a) CHITTY on Contracts, pp. 94-128.

(a) In cases where terms are proved supplementary or collateral to so much of the agreement as is in writing. (b) In cases where explanation of the terms of the contract is required, i.e., in cases of latent as opposed to patent ambiguities.

(c) To introduce usages into the contract.

(d) To show fraud, duress or mistake. (b)

By latent ambiguity is meant a word or phrase which on the face of it seems perfectly clear, but which can be shown to bear a different interpretation.

The legal maxim ut res magis valeat quam pereat (it is better that the matter should be favoured than that it should perish) is of importance in connection with construction, so that the Courts lean in favour of a contract whenever possible.

The Judicature Act, 1873, provided that stipulations as to time should receive in all courts the same construction and effect as they formerly received in equity; but this provision has been held not to apply to mercantile contracts, which were always under the cognizance of the common law courts. In such contracts, therefore, the general rule is that stipulations as to time are essential conditions. It is provided, however, by Section 10 of the Sale of Goods Act, 1893, that stipulations as to time of payment shall not be deemed essential conditions unless the terms of the contract show a contrary intention clearly expressed.

FOREIGN LAW

Often a dispute arises as to what law is to govern or be applied to a particular contract; where, for instance, a contract is made in one country with a view to its being performed, wholly or partly, in another. The point that has to be considered in such circumstances is "What was the intention of the parties?" a rule, no doubt, the intention is expressed in the contract itself, so that no question arises. Failing this, however, it has to be settled by looking for the presumed intention of the parties.

As

Law governing Foreign Contracts.-Foreign Law includes all law other than English, e.g., Scotch, Irish, French, etc. In the case of Hamlyn & Co. v. Talisker Distillery (1894), a contract was made in England by parties domiciled in England and Scotland respectively, but the terms were mainly to be performed in Scotland. A dispute arose as to the law which should govern, and the House of Lords decided that the parties contemplated

(b) ANSON'S Contracts, p. 307.

that the contract should be interpreted according to English Law as it contained a clause "Should any dispute arise out of this contract the same to be settled by two members of the London Corn Exchange or their umpire in the usual way." Such wording was regarded as clearly showing the intention of the parties. Should no contrary intention appear, the general rule is that the contract will be construed according to the lex loci contractus (that is, the law of the country where the contract is made), as in the case of South African Breweries, Limited, v. King (1900), where by an agreement in writing, executed in Johannesburg, in what was then the South African Republic, and made between a company having its registered office in London but carrying on business in South Africa, and a British subject resident at Johannesburg, the latter agreed to serve the company in South Africa and provision was made for his residence in Johannesburg. The agreement was in the English language and in English form. It was held that the rights of the parties ought to be governed by the law of the South African Republic. But many material facts have to be taken into consideration besides the place where the contract is made, e.g., the place of performance has a great bearing, the residence of the parties, the form of the contract, the subject matter, and so on. The capacity to contract is governed by the law of the domicil; and as regards the proceedings to enforce the contract, the lex loci fori governs (that is, the law of the country where the action is brought). Foreign law is not judicially noticed by the English Courts, and must be proved. There are special rules applicable to contracts of affreightment, which will be considered hereinafter (c), and as to foreign Bills of Exchange.

Construction of Foreign Contracts. If a contract contains a stipulation which, while valid by the law of one country, is unenforceable here, that would be a strong presumption that the contract was intended to be construed according to the law of the country where that stipulation was valid; but it is only a presumption and may be rebutted. If the English Courts decided that the contract which contains such a stipulation, unenforceable here, should be governed by the law of the foreign country, that stipulation will, as a rule, be enforced; but it will not be so if it is opposed to some essential principle of justice or morality. If a contract made abroad is not in writing, and is enforceable according to the law of the foreign country, and if it is a contract which in this country would be required to be in writing by reason of the provisions of the Statute of Frauds, no action can be brought upon it here. The contract is good but it cannot be enforced. If a judgment is obtained in any other country (c) See post, p. 216.

against a person resident in England who has no property in that other country, an action may be brought here on the judgment and it will, as a rule, be enforced. The English Courts will refuse to entertain any jurisdiction as to a contract concerning title to land situated abroad.

ASSIGNMENT UNDER CONTRACTS

Assignment of Rights.

Equity,

At Common Law choses in action are not assignable. however, would allow an assignee to enforce his claims provided he brought his action in the name of the assignor, and would compel an assignor to allow his name to be used for this purpose.

The Judicature Act, 1873, simplified the procedure so far as the assignee was concerned by allowing him to sue in his own name, provided:

(1) That the assignment is absolute and not by way of charge

only.

(2) That it is in writing and signed by the assignor.

(3) That notice of the assignment is given in writing to the

debtor.

Assignments under this Act are called "legal assignments.' Assignments that fall short of the above requirements are still enforceable by means of the old equity procedure, and are called " equitable assignments." There is no necessity for writing or any other special form; they can be made in any way provided the intention to assign is clear.

It is possible for a second assignee who has no notice of the first assignment to gain priority by being the first to give notice to the debtor. This is the effect of the rule in Dearle v. Hall (1823). But an assignment can only be made "subject to the equities." For instance, if a debtor had a counter-claim or a set-off against the creditor and the creditor assigned his rights, the assignee will only be able to enforce so much of the claim as the original creditor could have done and must allow the counter-claim or set-off. Similarly, a defective title to anything purporting to be assigned continues to be defective.

An absolute assignment of debts by way of mortgage with a proviso for redemption is within the scope of the rule, whether made to secure a fixed or definite sum or a fluctuating balance of account; and future debts may be assigned, but not an undefined portion of future debts.

Special rules govern the assignment of rights arising out of certain choses in action, e.g., policies of insurance, shares in joint stock companies, etc., either statutory or by the articles of

association of the company concerned; and the assignment is not effectual unless these rules be observed.

A chose in action is a personal right of property which can only be enforced by action, e.g., a debt, or shares in a company, as opposed to a chose in possession, which is a thing in actual physical possession.

Assignment of Obligations.

Except with the consent of the party to whom performance is due, there can be no assignment of obligations arising out of a contract; and, even where it takes place it is really a new contract, wherein fresh parties are substituted for those originally bound. This is called Novation. There are, however, certain contracts concerning land where the liabilities "run with the land," that is, they bind the owner for the time being. But contracts involving personal confidence or ability cannot be assigned by the party who had undertaken to carry out the work; for instance, an artist could not assign his undertaking to paint a picture, for the other party has probably contracted because he wished for the work of the particular artist and, naturally, would not accept the work of another. It is possible for a sale of goods to be so personal in its nature as not to be capable of assignment. A contract cannot be assigned so as to create for either party a heavier obligation than he had contracted to undertake, although as between assignor and assignee the assignment would be good. Any action would have to be brought in the name of the assignor, who would himself have to be ready to perform the personal obligation.

But, irrespective of acts of the parties, assignment of rights and obligations may take place through the death or bankruptcy of one or both of them. In the case of death, the personal representative succeeds to the position of the deceased, acquires his rights and is answerable for his liabilities to the extent of the estate. Death puts an end to contracts for personal service, such as employment of a servant or an apprentice. In the case of bankruptcy, the trustee acquires all the rights and is responsible for the liabilities of the debtor to the extent of the assets. The distinction between Assignability and Negotiability should be clearly understood. The matter is considered hereinafter. (d)

DISCHARGE OF A CONTRACT

A contract may be discharged, or put an end to, by one of several methods, viz.,

(1) Agreement.

(2) Performance.

(d) See post, p. 93,