PART IV. THE INTERPRETATION OF CONTRACT. tation of contract. AFTER considering the elements necessary to the forma Interpretion of a contract, and the operation of a contract as regards those who are primarily interested under it, and those to whom interests in it may be assigned, it seems that the next point to be treated is the mode in which a contract is dealt with when it comes before the courts in litigation. In considering the interpretation of contract In what we require to know how its terms are proved; how far, when proved to exist in writing, they can be modified by evidence extrinsic to that which is written; what rules are adopted for construing the meaning of the terms when fully before the court. The subject then divides itself into rules relating to evidence and rules relating to construction. Under the first head we have to consider the sources to which we may go for the purpose of ascertaining the expression by the parties of their common intention. Under the second we have to consider the rules which exist for construing that intention from expressions ascertained to have been used. 313 the subject consists. Rules relating (1) to evi dence and (2) to con struction. Provinces of court and jury. See p. 128. Why oral contracts need not be discussed. CHAPTER I. Rules relating to Evidence. IF a dispute should arise as to the terms of a contract made by word of mouth, it is necessary in the first instance to ascertain what was said, and the circumstances under which the supposed contract was formed. These would be questions of fact to be determined by a jury. When a jury has found, as a matter of fact, what the parties said, and that they intended to enter into a contract, it is for the court to say whether what they have said amounts to a contract, and, if so, what its effect may be. When a man is proved to have made a contract by word of mouth upon certain terms, he cannot be heard to allege that he did not mean what he said. The same rule applies to contracts made in writing. When men have put into writing any part of their contract they cannot alter by parol evidence that which they have written. When they have put into writing the whole of their contract they cannot add to or vary it by parol evidence. Contracts wholly oral may, as regards this part of my subject, be dismissed at once. For the proof of a contract made by word of mouth is a part of the general law of evidence; the question whether what was proved to have been said amounts to a valid contract must be answered by reference to the formation of contract: the interpretation of such a contract when proved to have been made may be dealt with presently under the head of rules of construction. [*257] matters of inquiry. *All that we are concerned with here is to ascer- Three tain the circumstances under which extrinsic oral evidence is admissible in relation to written contracts and contracts under seal. Such evidence is of three kinds : (1) Evidence as to the fact that there is a document 1. Proof of purporting to be a contract, or part of a contract. existence of docu ment; 2. Of fact ment; (2) Evidence that the professed contract is in truth what it professes to be. It may lack some element neces- of agreesary to the formation of contract, or be subject to some parol condition upon which its existence as a contract depends. These (3) Evidence as to the terms of the contract. may be incomplete, and may need to be supplemented by parol proof of the existence of other terms; or they may be ambiguous and then may be in like manner explained; or they may be affected by a usage the nature of which has to be proved. We thus are obliged to consider (1) evidence as to the existence of a document; 3. Of terms of contract. between simple We must note that a difference, suggested some time Difference back, between contracts under seal and simple contracts, formal is illustrated by the rules of evidence respecting them. and A contract under seal derives its validity from the form in contract. which it finds expression: therefore if the instrument is p. 52. proved the contract is proved, unless it can be shown to have been executed under circumstances which preclude the formation of a contract, or to have been delivered under conditions which have remained unfulfilled, so that the deed is no more than an escrow. But a written contract not under seal is not the contract itself, but only evidence, the record of the contract.' Even where statutory requirements for writing exist, as under 29 Car. II. c. 3. § 4, the writing is no more than evidentiary of a previous or contemporaneous agreement. In the first the instru ment is the contract, Wake v. Harrop, H. & N. 775. In the second the writing is only evi dence of the contract. Wake v. 6 H. & N. (1) Proof of document. Proof of contract under seal. 17 & 18 Vict. [*258] A written offer containing all the terms of the contract It is always possible therefore that a simple contract may have to be sought for in the words and acts, as well as in the writing of the contracting parties. But in so far as they have reduced their meaning to writing, they cannot adduce evidence in contradiction or alteration of it. They put on paper what is to bind them, and so make the written document conclusive evidence between them.' § 1. Proof of document. A contract under seal is proved by evidence of the sealing and delivery. Formerly it was necessary to call one of the attesting witnesses where a contract under seal was attested, but the Common Law Procedure Act, 1854, enc. 125. § 26. acted that this should no longer be required save in those exceptional cases in which attestation is necessary to the validity of the deed. A warrant of attorney and a cognovit afford instances of instruments to which attestation is thus necessary.1 ante, p. 50. Of simple contract. In proving a simple contract parol evidence is always necessary to show that the party sued is the party making the contract and is bound by it." And oral evidence must. a As a matter of practice, written contracts are commonly admitted by the parties, either upon the pleadings, or upon notice being given by one party to the other to admit such a document. Such admissions are regulated by the Judicature Act, 1875, Order xxxii. Or one party may call upon the other to produce certain documents, and upon his failing to do so, and upon proof having been given of the notice to produce, the party calling for production may give secondary evidence of the contents of the document. 1 This is now regulated largely by statute. Even in the absence of statutes some States allow the document to be proved without mentary where of course supplement the writing where the writing only Suppleconstitutes a part of the contract. For instance: AB in oral eviOxford writes to X in London, 'I will give £50 for your dence horse; if you accept send it by next train to Oxford. contract (Signed) AB.' To prove the conclusion of the contract it written *would be necessary to prove the despatch of the only in [*259] horse. And so if A puts the terms of an agreement into a written offer which X accepts by word of mouth; or if, where no writing is necessary, he puts a part of the terms into writing and arranges the rest by parol with X, oral evidence must be given in both these cases to show that the contract was concluded upon those terms by the accept Harris v. ance of X. part, Rickett, 4 H. & N. 1. or where connexion of parts do from docu ments. So too where a contract consists of several documents which need oral evidence to show their connexion, such evidence may be given to connect them. This rule needs not appear some qualification as regards contracts of which the Statute of Frauds requires a written memorandum. The documents must in such a case contain a reference, in one or both, to the other, in order to admit parol evidence to explain the reference and so to connect them.2 Long v. Millar, 456. Edwards v. Aberavron In contracts which are outside the statute evidence would seem to be admissible to connect documents without any such internal reference. 'I see no reason,' says Brett, J.,why parol evidence should not be admitted to show Mutual what documents were intended by the parties to form an QB.D. alleged contract of insurance.' There are circumstances, such as the loss or inaccessibility of the written contract, in which parol evidence of the testimony of attesting witnesses where the attestation is not necessary to the operative effect of the instrument. Sanborn v. Cole, 63 Vt. 590. But some cases adhere strictly to the common law rule. Story v. Lovett, 1 E. D. Smith (N. Y. C. P.), 153, H. & W. 500. 1 Colby v. Dearborn, 59 N. H. 326, H. & W. 501; Wilson v. Tucker, 10 R. I. 578. 2 Coe v. Tough, 116 N. Y. 273; O'Donnell v. Leeman, 43 Me. 158, H. & W. 100. Insurance Society. 1 587. |