CHAPTER IV. Local Board. 11 & 12 Vict. c. 63, s. 85. CONTRACTS. Contracts by THE LOCAL BOARD may enter into all such contracts as may be necessary for carrying the Act into execution; and every contract, the value or amount whereof exceeds £10, must be in writing, and must specify the work, materials, etc., to be done or furnished, the price to be paid, and the time or times within which the contract is to be performed, and fix and specify some pecuniary penalty to be paid in case the terms of the contract are not duly performed. In the case of a non-corporate district, it must be sealed with the seal of the Local Board by whom it is entered into, and signed by five or more members thereof (but see sect. 46 of the Sanitary Act, 1866, ante p. 2, as to the incorporation of Local Boards); and in the case of a corporate district it must be sealed with the common seal; and every contract entered into as above mentioned, and duly executed, is to be binding on the Local Board by whom it is executed, and their successors, and upon all other parties thereto, their executors, etc. The Local Board may compound with any contractor or other person in respect of any penalty incurred by reason of the non-performance of any contract entered into. whether the penalty be mentioned in the contract or in any bond or otherwise, for such sums of money or other recompense as to the Local Board may seem proper. Before contracting for the execution of any works under the provisions of the Act, the Local Board must obtain from the surveyor an estimate in writing, as well of the probable expense of executing the work in a substantial manner as of the annual expense of keeping it in repair; also a report as to the most advantageous mode of contracting, that is, whether by contracting only for the execu tion of the work, or for executing and also maintaining it in repair during a term of years or otherwise. Composition Estimates to be made before As to contracts above the The above provision, however, is only directory, and therefore the Local Board will be liable for a breach of the contract entered into for the performance of the works, though the estimate and the report from the surveyor be not obtained. (1) Before any contract of the value or amount of £100 or upwards is entered into by the Local Board, ten days' public notice value of £100. at the least must be given, expressing the nature and purpose of the proposed contract, and inviting tenders for the execution Ib. (1) Nowell v. Worcester, 9 Exch. 457, see post, p. 452. of the work. In every case the Local Board must require contract. Members of Local Boards vacate their office by entering into Contracts with contracts with the Board; see ante, p. 33; but the contract members of nevertheless remains in force. Local Boards. In a case where a paving commissioner had sent in a tender, which was accepted by his cocommissioners, and the Act imposed a penalty on any commissioner engaging in a contract, the Court refused to issue a mandamus to the commissioners commanding them to advertise for fresh tenders, since it did not appear that the contract itself was void. (1) If a contract be made for the superintendence of the execu- Generally. tion of works to be completed within a certain time, and the works, from any cause, be not completed within the specified time, no claim for any payment beyond that stipulated for can be supported; therefore, on a contract by a Local Board of Health to employ the plaintiff, an engineer, about certain works, and pay him £500 during two years, he undertaking to do his best to complete the works within that period, it was held that the Local Board were not liable for refusing to allow him to carry on the works beyond that time, even though the delay was caused by their fault or default, they paying him the whole £500. And as to extras, per Martin, B.," the Board could not bind themselves without deed; and the very mischief to be guarded against is such charges for extras." (2) It would be proper that a specification of works annexed to a contract should also be signed by the members of the Local Board; but the omission to do so would not vitiate the contract, or release the sureties of the contractor. (3) With regard to the contracts of Local Boards of Health, as well as all other corporations, it is to be observed that the rule of law is that a corporation can only bind itself by deed (see Comyn's Digest, tit. "Franchise" (F), 12, 13, and the authorities there referred to); but exceptions to this rule have been established, as in the case of corporations created for the purpose of carrying on trading speculations; where the nature of their constitution has been such as to render the drawing of bills or the making of particular kinds of contracts necessary for the purposes of the corporation. In those cases the Courts hold that they would imply in those who are, according to the provisions of the charter or Act of Parliament, carrying on the corporation concerns an authority to do those acts without which the corporation could not subsist. Sanders v. St. Neots, (4) Clark v. Cuckfield, (5) and Haigh v. North Bierley, (6) show (1) Rex v. St. Margaret's, Westminster, Paving Commissioners, I Jur. 104. (2) Rutledge v. Farnham, 2 F. & F. 406. (3) Russell v. rickett, 13 L. T. (N. S.) 280. (4) 8 Q. B. 810. (5) 21 L. J. Q. B. 349. Generally. that an action will lie although the contract be not under seal in certain cases; but a corporation would not be bound by a contract entered into by one of its servants on its behalf without evidence of its having given express authority to its servant to enter into the contract; (1) and per Martin, B., in Walker v. Great Western Railway Company; (2) when Cox v. Midland Counties Railway Company (3) was decided, it was generally supposed that a company, except in some very few cases of daily recurrence, could only contract under seal, but there has been much more freedom in this respect accorded to companies since the time of that decision. Persons dealing with corporations should always bear in mind that they are essentially different from an ordinary partnership of individuals for all purposes of contracts, and espe cially in evidence against them on legal trials; and should insist upon all contracts with them being by deed, under the seal of the corporation, or otherwise executed in the manner prescribed by the Act of Parliament regulating the corporation. There is no safety or security for any one dealing with such a body on any other footing. The same observation applies in respect of any variation or alteration in a contract which has been made, and it should further be borne in mind that the secretary or other officer of the corporation has of himself no independent authority to bind the corporation by letters or documents signed by him. Generally speaking, corporations are as much bound by their contracts as individuals, where the seal is affixed in a manner binding on them; and where a corporation is created by Act of Parliament for particular purposes, with special powers, their contract will bind them, unless it appears, by the express provisions of the statute creating the corporation, or by neces sary and reasonable inference from its enactments, that the contract was ultrà vires, or that the legislature meant that such a contract should not be made. (4) Contracts must be under seal to bind the Local Boards, for the power of the Local Board to enter into contracts so as to bind the rates is entirely the creature of the statute, and the statute having prescribed a mode by which these contracts are to be made, is part of the power given. The Local Board has no power to bind the rates unless by contracts entered into by the mode pointed out by the Act, therefore a contract exceeding the value of £10 for the performance of works and for carrying into execution the Public Health Act, 1848, made with a Local Board of Health of a non-corporate district is not valid, so as to enable the contractor to enforce it against the Board, unless it be sealed with the seal of the Board and signed (1) Cox v. Midland Counties Rail- (3) 3 Exch. 268. (4) Bateman v. Ashton-under · Lyne, 3 H. & N. 323; 27 L. J. Exch. 458. by five or more members thereof, and comply in other respects Generally. with the requirements of section 85; (1) for that section is not merely directory, but creates a condition which must be complied with. In the case where it was so held, a suit in equity was afterwards brought to obtain a specific performance of the contract between the plaintiff and the Local Board of Health, but it was held by Wood, V.C., that a Local Board of Health had no power to enter into a contract which can bind the rates of the particular district unless such contract is made, and the engagements therein contained are entered into, in the mode prescribed by the Act; and also that a Court of Equity equally with a Court of Law has jurisdiction to adjudicate upon the validity of such a contract. (2) It has also been held that a municipal corporation cannot enter into a contract to pay a sum of money out of the corporate funds for the making of improvements within the borough except under the common seal; and for such a purpose the Public Health Act clearly makes a contract under seal necessary. (3) The case of Lamprell v. The Guardians of the Billericay Union (4) has also an important bearing upon contracts entered into with Local Boards for the execution of works. In that case a contract had been entered into by a builder with the guardians of the union to build a union workhouse for a certain sum to the satisfaction of the architects, and it was agreed that all extra works authorized by the architects in writing should be paid for in addition to the principal sum. The builder having executed certain extra works suggested by the architects from time to time, without an authority in writing, it was held that he could not recover under the deed for such extra works, although they were from time to time examined and approved by the architects. It was held in the same case that although the deed provided for payment on account during the progress of the works, the plaintiff could not set off money so paid against the money due for the extra works; for a corporate body, having no power to contract except under seal, cannot impliedly assent to extra works being done, a corporation being incapable of making a new contract by parol. Respecting contracts by corporations which are ultrà vires of the contracting parties, Cranworth, L.C. (in Shrewsbury and Birmingham Railway Company v. London and North Western Railway Company and others), (5) said, "When the legislature constitutes a corporation it gives to that body prima facie an absolute right of contracting. But this prima facie right does not exist in any case where the contract is one which, from the (1) Frend v. Dennett, 4 Jur. (N. S.) 897; 27 L. J. C. P. 314. (2) Frend v. Dennett, 5 L. T. (N. S.) 73. (3) Ludlow v. Charlton, 6 Mee & (4) 18 L. J. Exch. 282; 12 L. T. |