be bound by it, in the absence of knowledge or neglect of a duty, to inform himself. 10 It is, however, also said that "A party dealing in a particular market is presumed to know all customs of that market bearing upon the transaction in question." 11 Here as always the guide must be, not what one party actually knew or intended, but what he ought to have supposed the other party would understand him to intend. A Texan who comes into the Chicago grain market and transacts business there, is surely bound by the usages of the market if dealing with one who has no reason to know of his co-contractor's ignorance. 12 § 662. The province of the court and of the jury. Whether a usage exists is a question of fact, 13 though the evidence of it may be insufficient to warrant submission to the jury.14 Whether the facts are such that the parties must be assumed to have adopted the usage because of actual knowledge or duty to know, is also a question of fact.15 On the other hand, the validity of the usage and its effect, if any, upon the contract of the parties is a question of law. 16 10 Great Western Elevator Co. v. White, 118 Fed. 406, 56 C. C. A. 338; Laver v. Hotaling, 115 Cal. 613, 47 Pac. 593; Citizens' State Bank v. Chambers, 129 Ia. 414, 105 N. W. 692; Bixby v. Bruce, 69 Neb. 78, 95 N. W. 34. 11 Smith v. Bloom, 159 Ia. 592, 141 N. W. 32, 35, citing: Cothran v. Ellis, 107 Ill. 413; Bailey v. Bensley, 87 Ill. 556; Long v. Armsby Co., 43 Mo. App. 253. See also Hatch v. Douglas, 48 Conn. 116, 40 Am. Rep. 154; Soper v. Tyler, 77 Conn. 104, 106, 58 Atl. 699. 12 See supra, §§ 94, 95. 13 M'Lanahan v. Universal Ins. Co., 1 Pet. 170, 7 L. Ed. 98; Sullivan v. Jernigan, 21 Fla. 264; Chicago, etc., Co. v. Tilton, 87 Ill. 547; Currie v. Syndicate, 104 Ill. App. 165; Hichhorn v. Bradley, 117 Ia. 130, 90 N. W. 592; Fish v. Crawford Mfg. Co., 120 Mich. 500, 79 N. W. 793; Powell v. Luders, 84 Minn. 372, 87 N. W. 940; Traders Ins. Co. v. Dobbins, 114 Tenn. 227, 86 S. W. 383; Oriental Lumber Co. v. Blades Lumber Co., 103 Va. 730, 50 S. E. 270; Denny v. Williams, 5 Allen, 1. 14 Chicago, etc., R. Co. v. Lindeman, 143 Fed. 946, 75 C. C. A. 18. 15 Scott v. Brown, 29 N. Y. Misc. 320, 60 N. Y. S. 511. 16 Lauchheimer v. Jacobs, 126 Ga. 261, 55 S. E. 55; Hess v. Shurtleff, 74 N. H. 114, 65 Atl. 377; Runyan v. Central Railroad, 64 N. J. L. 67, 44 Atl. 985, 48 L. R. A. 744; Silver Valley Min. Co. v. North Carolina Smelting Co., 122 N. C. 542, 29 S. E. 940. Aid to interpretation from considering which party uses language. 672 . 673 674 Pleading in actions on conditional contracts.. § 663. Nature of conditions. 675 A condition in a promise limits the undertaking of the promisor to perform, either by confining the undertaking to the case where the condition happens, or to the case where it does not happen. It is ordinarily said that a condition must be something future and uncertain, and it is undoubtedly true that at least from the standpoint of the parties, both futurity and uncertainty are necessary elements. If to their knowledge the event has either already happened or cannot possibly happen, the promise is either absolute or nugatory from the outset. It may be said that this is true whether the parties are aware of the facts or not, and such a statement is strictly accurate. A promise to pay for a horse if he is sound, could only be regarded by an omniscient person as either no promise or as an absolute promise, according as the horse was at the time of the bargain in fact sound or unsound. But the parties to such a transaction undoubtedly look at it as involving a promise subject to a condition, because their knowledge of the horse's condition will not be complete until the future, and the common law accepts that point of view. The situation suggested of a promise qualified by the happening of an event which is neither future nor uncertain, may seem unlikely, but in fact it is of frequent occurrence in insurance law. If the matter in question though it has happened is unknown to both parties, there can be no doubt that the matter may be made a condition of a promise which will be treated in law in the same way as if it were future and uncertain. Thus a ship already lost may be insured.1 The insurer's promise though in reality absolute if the vessel has already been lost, is treated as conditional; whereas, if the vessel has not been lost and has perhaps already, unknown to the parties completed her voyage, the insurer is in reality promising nothing, but as the bargain was made on the basis of the knowledge which the parties had at the time they made their agreement, there is no failure of consideration. If the insurer's promise were in law a nullity, because in view of the condition on which it was dependent no possible liability could arise upon it, fraud of the insured would be unnecessary to establish a defence to an action for the insurance money, or to establish a right to recover it back if already paid. Lack or failure of consideration would be sufficient without fraud. In truth, however, the promise is not legally a nullity, and the transaction can be avoided by the insured only on the ground of mutual mistake or of fraud. If the parties contemplate the possibility of the situation which has arisen, their agreement is a valid contract. Even though one party knows of the fact which is stated as a condition of the promise, the contract may still be valid and treated by the law as a conditional contract. Where the insured is aware that he has already violated a condition of an insurer's promise, as where he makes a knowingly false and material representation, and the truth of the representation is a condition of the policy, there is no failure of consideration, and the premium can be retained though the breach of condition excuses the insurer from liability. If, however, the parties mistakenly assumed the existence of a fact upon which the promise of the insurer was in terms con 1 Sutherland v. Pratt, 11 M. & W. 312; Insurance Co. v. Folsom, 18 Wall. 237, 21 L. Ed. 827; Arnould, Marine Ins., § 13. 2 Parsons v. Lane, 97 Minn. 98, 106 N. W. 485; and see infra, §§ 754 et seq. ditioned, or if though the insured was aware of the facts yet his conduct was not intentionally fraudulent, there is failure of consideration; the premium has not been earned and if paid may be recovered. In exact pleading also whether the defendant should deny the existence of a contract, or admit the contract and deny the breach of it, will depend on whether the law accepts the point of view of the parties and treats a matter unknown to the parties though it has already happened as capable of being a condition.4 § 664. Purpose of conditions. It is more advantageous for a promisee to have an absolute promise than a conditional one. The terms of the promise apart from any conditions qualifying it are for the promisee's benefit. The conditions are inserted for the promisor's protection. If the promisor desires to receive some performance from the promisee in return for his own, he may attempt to secure his object either by requiring a counter promise of such performance, or by qualifying his own promise by making it conditional on the desired performance being previously or concurrently given by the promisee. The fullest protection for the promisor will be obtained if he unites these two methods, requiring a counter promise and also making his own promise conditional on the performance of that counter promise. § 665. Distinction between promises and conditions. The distinction between a promise or covenant on the one hand, and a condition on the other, both in their legal effect and in their wording, is obvious and familiar. Breach of promise subjects the promisor to liability in damages, but does not necessarily excuse performance on the other side. Breach of condition prevents the party failing to perform from acquiring a right, or deprives him of one, but subjects him to no 'Parsons v. Lane, 97 Minn. 98, 106 N. W. 485; and see infra, §§ 754 et seq. In Harran v. Klaus, 79 Wis. 383, 48 N. W. 479, the defendant promised to buy certain notes from the plaintiff if the plaintiff had paid $75 for them as he asserted. The court called the transaction a "conditional" agreement and discusses the matter in a way equally applicable to a promise dependent on a fortuitous and uncertain event. See supra, § 119. liability. Words appropriate to promise and to condition make this distinction, which is clear in the legal effect produced, also clear as a matter of English construction. The minds of parties who enter into contracts, however, is more often addressed to what one party or the other is to do than to the consequences of the failure of doing it. When a contract reads "It is agreed, or "it is provided," or "it is stipulated," or "it is understood" that A shall do a certain act, or simply that the act shall be done it is not perfectly clear whether A promises to do the act in question, or whether he will acquire a right against the other party only by doing that act. Argument is possible that the words mean both these things. As matter of construction, it seems better to favor bilateral contracts than unilateral, and in bilateral contracts better, where the meaning of the agreement is doubtful, to construe words as involving a promise by the party who is expected to do the act in question than as words of condition. Such a construction protects both parties to the transaction, and also does not involve the consequences that a slight failure to perform wholly destroys all rights under the contract. The law recognizes the propriety of this rule of construction.5 The illustrations given above are enough to indicate that it is not always easy to distinguish whether a promise or a condition is intended, and the desire of courts to give substantial justice in the particular cases before them has sometimes introduced difficulty where as matter of language none would exist. Especially words appropriate for condition have not been given their natural meaning where the consequence would lead to injustice, and a violation of the probable intent of the parties. The difference between conditions and promises is so radical in its consequences that there is no excuse for a nomenclature which fails to recognize the distinction. In the Lucy v. Davis, 163 Cal. 611, 126 Pac. 490; San Diego Const. Co. v. Mannix, 175 Cal. 548, 166 Pac. 325; Graves v. Deterling, 120 N. Y. 447, 455, 24 N. E. 655. See also Carper v. United Fuel Gas Co., 78 W. Va. 433, 89 S. E. 12, L. R. A. 1917 A. 171. See for example: Boone v. Eyre, 1 H. Bl. 273 n.; Terry v. Duntze, 2 H. |