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CHAPTER II

ESSENTIALS OF CONTRACT OF SALE

A sale being a contract must contain all the essential elements of any good contract. The elements of a good contract of sale are: First, competent parties; second, mutual assent of the parties; third, lawful consideration; and, fourth, lawful subject-matter.

COMPETENT PARTIES.

First in order of the requisites of a good contract of sale is the capacity of the parties to enter into the contract. At common law all persons were regarded as of either normal or abnormal status. Under the head of abnormal persons were included infants, insane persons, mar ried women, persons under duress and undue influence. Such persons were either entirely incompetent to enter into a contract of any kind, or had only a qualified capacity to contract. Public officers and corporations though sometimes regarded as abnormal are of limited capacity to enter into contracts, their powers depending on the statutes creating them. We shall consider in their order the contractual power of these abnormal classes with respect to valid contracts of sale.

§ 18. Infants. An infant is any person under adult age, which, in the absence of statutory provision, is twentyone years. An infant becomes of age on the day preceding his twenty-first birthday. If one was born January 1, 1890, he is competent to enter into a binding contract of sale on December 31, 1910.1 For their own protection the law limits the legal obligations of infants, with respect to their liabilities as well as to their obligations. If an infant purchases jewelry of a jeweler and gives it to a friend, the jeweler can recover neither the price nor the 1 State v. Clarke, 3 Harr. (Del.) 557.

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jewelry. Sales to or by an infant are not necessarily void, but they are voidable on his initiative, either during his infancy, or within a reasonable time after attaining his majority. An infant cannot make a binding contract except for necessaries, and then only in case he is not already being provided with them by those upon whom the law lays that duty. He may, however, ratify as an adult any contract made in infancy. Even in a contract for necessaries, the law does not hold him liable to pay an inordinate price, although an adult might be so held. If an infant contracted to pay $100 for a suit of clothes, the tailor can recover only a reasonable price, up to $100, while from an adult he could recover the entire sum.2 What is reasonable and suitable depends upon the station in life of the infant. The purchase of an automobile might be regarded as reasonable and suitable in the case of an infant with a very large income, and a wild and ludicrous extravagance in the case of an impecunious infant. If an infant sells a horse, he may, even after spending the price, demand back the horse during infancy or within a reasonable time afterwards. If the horse should die, the infant may, nevertheless, recover the price he paid to the seller. If an infant is married, his liability for family necessaries is the same as if he were of adult age, for the law casts upon a husband the support of his family, and an infant is no exception to the rule.

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This privilege of infancy is strictly personal, can be availed of only by the infant himself, and can be pleaded by him against anyone with whom he has had contractual relations. If an infant chooses to disaffirm a contract of sale, and still has the consideration of the sale in his possession, he will be obliged to restore it before he will be permitted to disaffirm the sale. In other words, the infant must, if possible, restore the condition that existed before the sale. If an infant buy a horse and after becoming of age promises to pay for it, he then becomes liable for the price. If he should sell the horse after becoming of age, that 2 Bedel v. Loomis, 11 N. H. 9. 8 Towle v. Dresser, 73 Me. 252.

would amount to a ratification and he would be liable for the price. Keeping the horse a long time after reaching maturity would have the same effect. But there can be no binding ratification during infancy.4

It is not material whether one dealing with an infant know of his infancy or not: the plea is good against everyone. Nor does it matter that the infant falsely represented himself to be of age; but the law is not everywhere the same on this subject. Fraud, moreover, is a good defense to the enforcement of a contract, whether the guilty person be an infant or an adult. An infant is liable for his torts, and wherever a representation in a sale to or by him amounts to a tortious deceit, he is in the same position as an adult as regards liability.

§ 19. Insane Persons. Persons of unsound mind were classed by the common law as idiots and lunatics, the former being regarded as permanently, the latter as temporarily, out of their minds. Idiots were wholly irresponsible for their acts, and could not enter into a valid contract of any kind.

Those classed as lunatics were such as had lucid intervals. Formerly they were not regarded as having contractual capacity, because held not capable of giving assent. Therefore, their contracts were held void; but the more modern view is that a lunatic's contracts are voidable only. A lunatic during a lucid interval may ratify and thereby make absolutely binding a contract of sale previously entered into. His affirmation may arise by implication of law, as where during an extended lucid interval, though knowing the full details of a contract previously entered into, he takes no steps to disaffirm the sale.

A mentally deranged person is, nevertheless, liable for contracts for the purchase of necessaries, as he needs such things just as much as if he were normal.

Where the contract of sale of a lunatic has been executed on both sides, and no advantage has been taken of him, and where there was at the time of the contract no knowl4 Chandler v. Simmons, 97 Mass. 508.

edge of his lunacy by the other party, if the contract is not oppressive, it will not be set aside, unless the parties can be restored to their original positions. A lunatic may avoid his contract where it is sought to hold him on it, although he is not able to restore the consideration moving to him for it. Where the contract is sought to be enforced against the normal party, the contract may be held binding although the abnormal party is unable to restore the consideration.

§ 20. Drunkards. Akin to lunatics and insane persons are drunkards, so far as legal capacity is concerned. A sale by or to a man in such a condition of intoxication as precludes his knowing what he is doing, is voidable, if not void, as mutual assent under such circumstances is impossible; but such a sale may be ratified by the drunken buyer or seller when sober. He is, however, liable on contracts for necessaries. The Sales Act provides that "where necessaries are sold and delivered to an infant, or to a person who by reason of mental incapacity or drunkenness is incompetent to contract, he must pay a reasonable price therefor;" but the necessaries must be such as are suitable to the condition of the person and to his actual requirements at the time of delivery.

§ 21. Married Women. Under the common law a married woman was regarded as having no separate legal existence apart from her husband's and, hence, she had no legal capacity to enter into contracts of sale binding upon her. On marriage her personal property became her husband's. Therefore, she was unable to make a valid sale of any goods she might have owned before marriage as she had not title thereto. In like manner, if personal property was bequeathed or given to her, or earned by her, title passed to her husband. Today, however, the right of a married woman to enter into contracts is recognized in every enlightened country and in every State in the Union, so that with the exception of a few jurisdictions her legal capacity is the same as that of any other adult person.

5 Uniform Sales Act, § 2.

§ 22. Persons under Duress and Undue Influence. A person is not competent to enter into a contract of sale, whose will is unlawfully controlled by another. If A is compelled at the point of a revolver, or by confinement without chance of escape, to sell his watch to B, he can rescind the sale on the ground of duress.

Undue influence differs from duress in not involving any threat or violence against the person. It consists in taking advantage of some confidential or fiduciary relation to obtain an unconscionable bargain from a person of inferior knowledge and experience or mental capacity. Undue influence may occur in the relation of lawyer and client, doctor and patient, guardian and ward, trustee and beneficiary.

ASSENT OF THE PARTIES

§ 23. Assent Must Be Mutual. A valid contract of sale or to sell requires mutual assent of both parties to it. The assent may be either expressed, as by words or writing, or may be implied by the acts of the parties. On boards of trade, a nod, a gesture, or even silence, may supply the necessary element of assent. In all cases, the assent must be mutual, coexistent, and unconditional, and it must be communicated by each party to the other, or at least something must be done that satisfies the condition of assent. An offer by mail of a merchant in Chicago to sell a carload of grain to a merchant in New York may be accepted by the mailing of a letter by the New York merchant. This would be sufficient expression of assent even though the letter never reached the Chicago merchant. The assent must be, however, without conditions. No term in the offer. can be changed by the offeree without the subsequent assent thereto of the offeror. If A offers to sell B a horse on thirty days' time, for $100, and B replies that he will take the horse and pay for him in thirty-five days, there is no contract because of no mutual assent. In an old Euglish case, defendant offered to sell a cargo of "good" barley. • Hutchinson v. Bowker, 5 M. & W. 535.

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