that if the obligor do go from the church of St. Peter in Westminster to the church of St. Peter in Rome within three hours, that then the obligation shall be void. The condition is void and impossible and the obligation standeth good." "If a man be bound with a condition to enfeoff his wife, the condition is void and against law, because it is against the maxim in law, and yet the bond is good." 35 "When the condition of an obligation is so insensible and uncertain that the meaning cannot be known, there the condition only is void and the obligation good." 36 But the law was otherwise in regard to supervening excusable impossibility. A bail bond conditioned upon delivery of the person bailed at a certain day, was excused by death of that person.37 The reason of the distinction seems to be this: In the first class of cases the bond was but a foolish act unless construed as the equivalent of an unconditional covenant to pay the penal sum. The impossible condition could not sensibly be taken as itself amounting to a covenant. In the second class of cases, however, the court construed the instrument as amounting in effect to a covenant to perform the condition with an agreement to pay the penal sum in case of failure to do so.38 The impossibility of the condition is dealt with, therefore, in the same way as impossibility of a covenant.39 § 811. Effect of agreement in contract excluding excuses. In order to increase the certainty of their relations, parties to a contract not infrequently agree that the contract shall be performed or a condition shall be enforced according to its terms without regard to possible defences. In a building contract, for instance, it may be provided that the architect's certificate shall be final and shall not be set aside "for any reason, or for any pretense, suggestion, charge, or insinuation of fraud, collusion, or confederacy." Such an agreement has 35 Co. Lit. 206b. *Shepp. Touchst. 373. "Bacon's Abr. CONDITIONS (Q); Sparrow v. Sowgate, Wm. Jones, 29, and see infra, § 1944. Cases must be distinguished where the impossibility is merely subjective, e. g., where the condition is to be performed by a 38 See supra, §§ 670, 774. been upheld so far as to preclude a builder from asserting fraud on the part of the architect; 40 but the court intimated that such a provision would not avail against collusion or fraud of the defendant himself. It seems clear that no agreement of the parties can preclude this defence, for fraud in the inception of the agreement renders voidable the very agreement not to set up fraud, and, aside from this technical but sound argument, such an agreement would obviously be against public policy.4 41 The commonest application of the principle under discussion is in case of life insurance policies, providing that they shall be incontestable either at once, or within a certain time after issue. The law is clearly settled that if a fixed reasonable period, as one or two years, is allowed by the policy to the insurer to discover such defences to the policy as may exist, the provision is binding and effective even in spite of fraud of the insurer. 42 A short but not unreasonable statute 40 Tullis v. Jacson, [1892] 3 Ch. 441. 41 In Pearson v. Dublin, [1907] A. C. 351, in an action of deceit for furnishing defective plans, a contract was set up which contained a clause to the effect that the contractors must not rely on any representation made in the plans or elsewhere but must ascertain the facts for themselves. Lord Loreburn, L. C., said, at page 353; "It seems clear that no one can escape liability for his own fraudulent statements by inserting in a contract a clause that the other party shall not rely upon them. I will not say that a man, himself innocent, may not under any circumstances, however peculiar, guard himself by apt and express clauses from liability for the fraud of his own agents." In Industrial, etc., Trust v. Tod, 180 N. Y. 215, 73 N. E. 7, there was in suit an agreement of bondholders not to charge trustees under a reorganization agreement except for wilful default; and the trustees were by the instrument given final power to construe its mean ing. The court held this provision must be qualified by inserting "in good faith." To go beyond this was to go beyond the limits fixed by public policy. The Swiss Federal Code of Obligations, Art. 100, provides that any stipulation in advance to free an obligor from the responsibility for fraud or serious fault is void. 42 Weil v. Federal Life Ins. Co., 264 Ill. 425, 106 N. E. 246; Indiana Nat. Life Ins. Co. v. McGinnis, 180 Ind. 9, 101 N. E. 289, 45 L. R. A. (N. S.) 192; Goodwin v. Provident, etc., Assurance Association, 97 Iowa, 226, 234, 66 N. W. 157, 32 L. R. A. 473, 59 Am. St. Rep. 411; Supreme Court v. Updegraff, 68 Kans. 474, 75 Pac. 477; Kansas Mutual Life Ins. Co. v. Whitehead, 123 Ky. 21, 93 S. W. 609; Reagan v. Union Mutual Life Ins. Co., 189 Mass. 555, 556, 76 N. E. 217, 2 L. R. A. (N. S.) 821, 109 Am. St. Rep. 659; Harris v. Security Life Ins. Co., 242 Mo. 304, 154 S. W. 68; Vetter v. Massachusetts Nat. Life Association, 29 N. Y. App. Div. 72, 51 N. Y. S. of limitations is thus agreed upon. But a provision that such a policy shall be incontestable from the date of issue is ineffectual so far as the defence of fraud is concerned." 43 393; Murray v. State Ins. Co., 22 R. I. 524, 48 Atl. 800, 53 L. R. A. 742; Philadelphia Life Ins. Co. v. Arnold, 97 S. C. 418, 81 S. E. 964; Clement v. New York Insurance Co., 101 Tenn. 22, 46 S. W. 561, 42 L. R. A. 247, 70 Am. St. Rep. 650. 43 Reagan v. Union Mutual Life Ins. Co., 189 Mass. 555, 76 N. E. 217, 2 L. R. A. (N. S.) 821, 109 Am. St. Rep. 659. The contrary decision of Duvall v. Mutl. Ins. Co. of Montana, 28 Ida. 356, 154 Pac. 632, is indefensible. Pordage v. Cole.. Serjeant Williams' Rules. Comment on Serjeant Williams' first two Rules.. CHAPTER XXVI NON-PERFORMANCE OF A COUNTER-PROMISE AS AN EXCUSE FOR BREACH OF PROMISE The problem suggested in this chapter is confined to bilateral contracts...... 812 Various methods of dealing with the problem.. Meaning of failure of consideration.... Differences in effect of the different theories... Under the early law mutual promises were independent. Lord Mansfield introduced the doctrine of mutual dependency. Boone v. Eyre.. 813 814 815 816 817 818 819 820 821 Comment on Serjeant Williams' Rules 3, 4, and 5.. 822 Criticism of the general theory of Serjeant Williams' Rules.. Effect of the place of performance on concurrent conditions. Intention must relate to the time of the formation of the contract.. Order of performances when one or both take time. What amounts to an offer to perform... Tender is not necessary in equity unless time is of the essence. 826 827 828 829 830 831 832 833 834 835 836 837 Promises in separate contracts.. Ignorance of the plaintiff's breach of contract when the defendant fails to perform.. Failure to perform on the part of the plaintiff owing to excusable impossibility..... 838 839 840 Part performance on one side.. 841 Substantial performance... 842 Benefit derived by the defendant from the plaintiff's part performance.. 843 844 of performance... Distinction between breach as to the time of performance and as to character 845 Meaning of time being of the essence. 846 A breach in limine as to time is fatal in contracts of sale.. 847 848 849 Time is not of the essence in contracts of service. When time is essential in performing collateral stipulations. 850 851 In equity time is not generally of the essence. . . . . 852 Time is of the essence in equity in a contract of option. 853 Time is of the essence even in equity if the property is of speculative or fluc Right temporarily to withold performance distinguished from right to refuse absolutely.... 869 Effect of part performance of a divisible contract. 870 Whether the party first in default can ever recover. Effect of stating a price for part of the performance in a contract not wholly divisible....... 871 872 A bilateral contract to form a future contract or sale.... 873 .. 874 .... 876 Prospective inability . . . . . 877 The seller's lack of title to specific property excuses the buyer.. Rules of damages provide for cancellation of mutual obligations to exchange performances... 883 An accrued right of action for breach of contract may be discharged by the plaintiff's subsequent inability to perform. . . . 884 Reviving of seller's lien upon actual or threatened failure of consideration ... Actual or threatened failure of consideration will discharge liability already accrued.... 885 886 887 Aleatory contracts... 888 When performances in bilateral contracts are in exchange for one another |