Per Parke, (3) Provisions for discharge. (a) Discharge optional on nonfulfilment of a term. Head v. 7 Exch. 7. may be implied by conduct, if not expressed in words or writing.1 § 3. Provisions for discharge. A contract may contain within itself the elements of its own discharge, in the form of provisions, express or implied, for its determination under certain circumstances. These circumstances may be the non-fulfilment of a condition precedent; the occurrence of a condition subsequent; or the exercise of an option to determine the contract, reserved to one of the parties by its terms. The first of these three cases is somewhat near akin to discharge of contract by breach. But there is a difference between a non-fulfilment contemplated by the parties, the occurrence of which shall, it is agreed, make the contract determinable at the option of one, and a breach, or nonfulfilment not contemplated or provided for by the parties. Head bought a horse of Tattersall. The contract of sale contained, among others, these two terms: that the horse was warranted to have been hunted with the Bicester hounds, and that if it did not answer to its description the buyer should be at liberty to return it by the evening of a specified day. The horse did not answer to its description and had never been hunted with the Bicester hounds. It was returned by the day named, but it had in the meantime been injured, though by no fault of Head. Tattersall disputed Head's right to return it. But he was held entitled to do so. *The effect of the contract,' said Cleasby, B., 'was to vest the property in the buyer subject to a right of rescission in a [*278] 1 Collyer v. Moulton, 9 R. I. 90, H. & W. 522; Millerd v. Thorn, 56 N. Y. 402. The assent of the creditor to the substitution must be established. Ayer v. Kilner, 148 Mass. 468. The reader will again recall that it is on the ground of substituted contract that a promise to pay an additional sum for the performance of an existing contract is sometimes sustained. Ante, p. 102, note 5. particular event, when it would revest in the seller. I think in such a case that the person who is eventually entitled to the property in the chattel ought to bear any loss arising from any depreciation in its value caused by an accident for which nobody is in fault. Here the defendant is the person in whom the property revested, and he must therefore bear the loss.'1 Head v. Tattersall, 7 Exch. 14. rence of a specified In the second case the parties introduce a provision that (b) Occurthe fulfilment of a condition or the occurrence of an event shall discharge them both from further liabilities under event. the contract. of bond. risks of Such a provision is called a condition subsequent; it is Condition well illustrated by a bond, which is a promise subject to, or defeasible upon, a condition expressed in the bond. It may be further illustrated by the 'excepted risks' of Excepted a charter-party." The shipowner agrees with the char- charterterer to make the voyage on the terms expressed in the party. contract, the act of God, the Queen's enemies, restraints of princes and rulers, fire, and all and every other dangers and accidents of the seas, rivers and navigation, of whatsoever nature or kind, during the said voyage, always excepted.' The occurrence of such an excepted risk releases the shipowner from a strict performance of his contract; and if it should take place while the contract is wholly executory, and amount to a frustration of the entire enterprise, the parties are altogether discharged. Geipel chartered a vessel belonging to Smith to go to a spout, load a cargo of coals, and proceed thence to Hamburg: the contract contained the usual excepted risks. a For the form of a charter-party, see Appendix. 1 The vendee may refuse to receive the chattel at all under such a contract if he discovers that the term is not fulfilled. Ganson v. Madigan, 13 Wis. 67. If he receives it he may return it upon discovering the non-fulfilment; but if he has by his own fault injured the chattel he is not entitled to return it. Ray v. Thompson, 12 Cush. (Mass.) 281, H. & W. 534. Such a transaction may be a sale with a right to return, or a bailment with a right to purchase. Hunt v. Wyman, 100 Mass. 198; Sturm v. Boker, 150 U. S. 312. Geipel v. Smith, 404. Limitations of carrier's liability. Nugent v. 1 C. P. D. 1 C. P. D. 423. Meaning of phrase 'Act of God.' Before anything was done under it a war broke out be- [*279] Similar conditions enter into the contract made by a common carrier. Such a carrier is said to warrant or insure the safe delivery of goods entrusted to him; and by this we mean that he makes an almost unqualified promise to bring the goods safely to their destination or to indem nify the owner for their loss or injury. But his promise is defeasible upon the occurrence of certain excepted risks, -the act of God and of the Queen's enemies,' and injuries arising from defects inherent in the thing carried. This qualification is implied in every contract made with a carrier, and the occurrence of the risks exonerates him from liability for loss thereby incurred. The Act of God' is a phrase which needs explanation. Its meaning is to some extent defined in Nugent v. Smith. The defendant, a common carrier by sea, received from the plaintiff a mare to be carried from London to Aberdeen. In the course of the voyage the ship met with rough weather, and the mare, being much frightened and struggling violently, suffered injuries of which she died. 1C. P. D. 19. No negligence was proved against the defendant. Per Brett, It was held in the Common Pleas that to constitute the 'Act of God' a loss must arise from such a direct and violent and sudden and irresistible act of nature' as could 1 Graves v. The Calvin S. Edwards, 50 Fed. Rep. 477; Brauer v. Campania Navigacion La Flecha, 66 Fed. Rep. 776; The Edwin I. Morrison, 153 U. S. 199. not be foreseen, or if foreseen prevented; and the carrier was held liable on the ground that the weather, though rough, was not so violent and unusual as to amount to an act of God thus defined, nor was the struggling of the mare of itself enough to show that she was injured from her own inherent vice. The Court of Appeals reversed this decision. The carrier is discharged if he show that the loss could by no Per Mellish, L.J., p. 441. reasonable precaution under the circumstances have been prevented. This exception from the general liability of the carrier of goods is a known and understood term in every [*280] contract which he makes. The discharge hence arising must be distinguished from discharge arising from a subsequent impossibility of performance not expressly provided against in the terms of the contract. this we shall deal hereafter.1 With Part v., ch. iv. optional notice. Nowlan v. Thirdly, a continuing contract may contain a provision (c) Discharge making it determinable at the option of one of the parties upon certain terms. Such a provision exists in the with ordinary contract of domestic service; the servant can terminate the contract by a month's notice, the master Ablett, by a month's notice or the payment of a month's wages. 54. And similar terms may be incorporated with other contracts between employer and employed, either expressly or by the Parker v. usage of a trade.2 1 Railroad Co. v. Reeves, 10 Wall. (U. S.) 176. Provisions are usually inserted in insurance policies that in case of the increase of the risk by any act of the insured, as by leaving the property unoccupied, the policy shall be discharged. Moore v. Phœnix Ins. Co., 62 N. H. 240, H. & W. 531; Kyte v. Commonwealth Union Ins. Co., 149 Mass. 116. Insolvency of a buyer gives a seller an option to terminate a contract for sale on credit. Rappleye v. Racine Seeder Co., 79 Iowa, 220. 2 No such provision attaches to contracts of service in this country. But the principle is applicable to various states of fact. Such are contracts that a party shall be satisfied.' Ray v. Thompson, supra; 2 C. M. &. R. Ibbetson, Form of discharge by agreement. (1) In case of contract Effect of parol contract at variance with deed. As regards the form needed for the expression of an agreement which purports to discharge an existing contract, there is a general rule. A contract must be discharged in the same form as that in which it is made. A contract under seal can only be discharged by agreement expressed under seal: a parol contract may be discharged by parol. Parties to a deed can only discharge their obligations under seal. by deed; but they may make a parol contract which creates obligations separate from the deed; substantially at variance with the deed: giving a right of action to which the deed furnishes no answer. M and X entered into a contract under seal, by which M let to X certain rooms for a certain time at a rent to be ascertained in a certain way. M died, and A, his administrator, agreed with X by parol, that in consideration of £70 to be paid by X and to be taken as a reasonable rent, neither party should be called upon to perform his part under the deed. X failed to make the payment agreed upon, and A sued him upon the parol contract. It was urged on behalf of X that this was an attempt to vary a deed by a parol contract, the performance of which, being no discharge of the deed, would leave X liable to his previous obligation. But the *court held that the parol contract created a new and distinct obligation; that a performance of this contract would furnish an equitable answer to an action brought upon the deed; and that therefore A was entitled to sue upon it.1 Nash v. Per Willes, J., p. 262. (2) In case of parol [*281] A parol or simple contract, whether it be in writing Adams &c. Works v. Schnader, 155 Pa. St. 394, H. & W. 549. Or that a third party shall be satisfied. Geiger v. Western Maryland R., 41 Md. 4. 1 A parol contract which operates as a discharge of a specialty is effective if acted upon. Munroe v. Perkins, 9 Pick. (Mass.) 298; McCreery v. Day, 119 N. Y. 1, H. & W. 524; McKenzie v. Harrison, 120 N. Y. 260; Canal Co. v. Ray, 101 U. S. 522; Herzog v. Sawyer, 61 Md. 344. |