from his obligation to perform or was in respect of a subsidiary promise which only entitles the other party to claim compensation in damages are discussed in the subsequent chapters relating to the time and mode of performance of

contract.

In order that the promise of one party may be construed as dependent upon performance of the other party, the two obligations or promises must be connected or spring from the same contract, or, if resulting from distinct agreements, must be intended by the parties to be correlative. Thus if I sell you in the first place so many bushels of wheat and then you sell me so many bales of cotton, you cannot refuse delivery of the cotton merely on the ground that I have not delivered to you the wheat. But if the two agreements are so related as to constitute in effect but one, if, for instance, your agreement to sell cotton was intended by us to effect a compromise between its price and that of the wheat which I sell, or to be in the nature of an exchange of the two articles with or without something to boot, then my failure to perform my contract to deliver the wheat releases you from your obligation to deliver the cotton.1

§ 154. Promissory Conditions. When one party to a contract represents that certain things exist or that a certain event has taken place or will take place, or when he promises to do certain things, and the promise of the other party is based upon the truth of that statement, or the performance of that promise, then the liability of the latter party is said, in English and American law, to be conditional. In such case, the contract of the first party is absolute and unconditional, but the second party's promise is said to be

3 Gas Light Co. v. Colladay, 25 Md. 1.

4 Cf. Giorgi (op. cit.), iv, n. 201. In an action by A. against B. for breach of his contract, he cannot set off A.'s failure to perform another distinct contract between them, because generally under our statutes a claim for unliquidated damages cannot be pleaded on a set-off. Nor is such a defense available by way of recoupment, since it does not grow out of the same transaction. It might be that equity would restrain execution by A. on his judgment until B.'s action for breach of the other contract was tried.

dependent or conditional, and he may elect, either to rescind the whole contract upon a breach or may treat it as still in force in spite of the breach. If he chooses the latter alternative, the condition sinks to a warranty for which he may only recover damages without being released from his own promise.

The statements or promises in such cases are really terms of the contract relating to the time or mode of performance. They are in effect warranties or representations, vital or essential in their character, a breach of which affords to the other party a right either to rescind the contract or to use for damages according to the general principles governing the non-performance of contracts. The circumstance that they have been called conditions has resulted in much confusion in the terminology of the subject, and has created an obstacle to a scientific classification. In the civil law such representations or promises are never treated as conditions. In regard, therefore, to these promissory conditions the two chief requisites of true conditions properly so called, are lacking, namely, the futurity and the uncertainty of the event upon which the agreement is based. In a true condition, neither party is bound or both are bound accordingly as that event happens or not. There is no promise or warranty that the event will or will not occur. In this promissory condition, one party is always bound while the other. may elect to abide by the contract, or to sue for damages as in the case of any breach of contract.

Thus in Davison v. Von Lingen,1 there was a statement in a charter party that the vessel "is now sailed or about to sail from Benizaf with cargo for Philadelphia." This was held to be a condition precedent and a substantive part of the contract. Since the vessel was not fully loaded at the date of the charter party and did not sail until a week afterwards, the charterer was held to be entitled to repudiate the contract, and also to recover recover as damages the difference.

1 113 U. S. 49.

between the contract price of that vessel and the cost of another.

In Behn v. Burness, a charter party stated that plaintiff's ship "is now in the port of Amsterdam"; and it was agreed that the vessel should go thence to an English port and load a cargo. The ship did not arrive at Amtserdam until some days after the date of the contract, and upon its arrival at an English port, the defendant, the charterer, refused to load. In an action by the shipowner to recover damages as for a breach of contract, it was held that the plaintiff was not entitled to recover.

This particular result was undoubtedly correct, and may be explained upon either one of two theories, both of which are tenable. If, according to the true construction of the contract, the charterer's agreement was to hire a ship which was then in the port of Amsterdam, and the shipowner undertook to warrant or promise that the ship was then in that port, upon a breach of that warranty or representation the charterer would be entitled to reject the ship when it arrived, just as he would have the right to reject merchandise tendered after the time stipulated for delivery, and the other party, the shipowner, would be liable in damages for his failure to supply that which he had undertaken to do, namely, a ship which he had represented to be, on a certain day, in the port of Amsterdam.

On the other hand, if the contract should be construed as meaning that the parties contracted upon the understanding or assumption that the ship was then in the port of Amsterdam, and that the owner did not intend to be liable if the ship had then ceased to exist or was not in that port, that assumption, while not strictly speaking a technical condition, because it did not relate to a future event, was yet in the nature of a condition, and the contract, therefore, was void because that essential fact, upon which it was based, did not exist. Consequently, neither party was bound, just as neither would be bound in the case of a contract to sell a

23 Best v. Smith, 751 S. C.; 32 L. J. Q. B. 204.

horse, "now on my farm at Oak Grove," if at that time the horse was dead.3

It seems to me that this is the true construction of the contract in Behn v. Burness, and that it was void since it was based on the assumption that a certain thing existed when in fact it did not exist, and that neither party was bound. Now, the Court, while practically deciding the case upon one of these theories, used language appropriate to the other; and, while ruling that the statement in the charter party, that the ship was then in the port of Amsterdam was a condition, yet gave to that condition or statement all the effect of an express promise or warranty, and held that the charterer had the option of either considering himself discharged, or of enforcing the charter party, thus leaving the shipowner bound as upon a promise from the time the contract was made, and the charterer free from all liability. In the course of the judgment, it was said:

"With respect to statements in a contract descriptive of the subject-matter of it, or of some material incident thereof, the true doctrine established by principle as well as authority, appears to be, generally speaking, that if such descriptive statement was intended to be a substantive part of the contract, it is to be regarded as a warranty that is to say, a condition, on the failure or non-performance of which the other party may, if he is so minded, repudiate the contract in toto, and so be relieved from performing his part of it, provided it has not been partially executed in his favor. If, indeed, he has received the whole or any substantial part of the consideration for the promise on his part, the warranty loses the character of a condition, or, to speak perhaps more properly, ceases to be available as a condition, and becomes a warranty in the narrower sense of the word, viz, a stipu

3 This particular instance of a ship's being in port is mentioned in Dig. 28, 7, 10, as not creating a real conditional contract, since it relates to a present or past event. Cum nulla sit conditio, quae in praeteritum confertur vel quae in praesens, veluti, ‘si rex Parthorum rivit,' 'si naris in portu stat.'

lation by way of agreement for the breach of which a compensation must be sought in damages."4

§ 155. Promises Treated as Conditions. Such a promissory condition may be waived. In Bentsen v. Taylor Sons & Co., a charter party dated March 29th described the ship as "now sailed or about to sail from a pitch pine port to the" United Kingdom, and provided that after discharging the homeward cargo, the ship should proceed to Quebec and load a cargo for the charterers. Both parties knew at the date of the charter party that the ship was then or had been

4 It may be that one reason why the English courts call such a representation a condition rather than a warranty is that in English law a buyer is not entitled to reject goods tendered on account of a breach of warranty, but must claim damages. But in American law he has this right. In Davison v. Von Lingen, 113 U. S. 49, such a representation as to the place of a ship is called a condition or warranty. Sir W. Anson (Contracts, 10th ed., p. 321) cites Behn v. Burness in support of his statement that "a condititon may assume the form, either of a statement or a promise." Again he says, p. 324 : "One cause of the confusion which overhangs the use of the term warranty arises from the rule that a condition may change its character in the course of the performance of a contract; a condition the breach of which would have effected a discharge if treated so at once by the promisee ceases to be a condition if he goes on with the contract and takes a benefit under it. It is then called a warranty." This aspect of a condition is pointed out in Behn v. Burness. Again, on p. 161: "The question for the court was whether the words now in the port of Amsterdam amounted to a condition the breach of which entitled Burness to repudiate the contract, or whether they only gave him a right, after carrying out the contract. to sue for such damages as he had sustained."

Now as I have endeavored to show in the text, the statement in this case should be treated exclusively either as a condition or as a warranty or promise. If a condition, then neither party was boundthe contract was void the day it was made although the parties would not be aware of that until afterwards. If a warranty or promise, then Burness could either have repudiated or accepted and sued for damages. It is confusing to call it a condition and then give to it the effect of a warranty or promise. If Behn had refused to tender the ship when he discovered that it was not in the port of Amsterdam at the date of the charter party, could Burness have maintained an action for damages for failure of the condition?

1 [1893] 2 Q. B. 274.