Chapter III. On the Obligation of Contract

I say. Any contract duly entered into gives rise to an obligation in the forum of conscience, at least on the part of one of the contracting parties; because in a contract some right is granted to one or to each party, and to every right its own obligation corresponds. But this obligation is to be extended not only to that which is expressed by the pact, but to all the consequences which equity, law, or usage demands according to the nature of the agreement. The reason is that contracting parties are judged to act with good faith, and therefore to wish not only that which is expressly included in the stipulation, but also that which is accustomed to arise from it. Hence the intention of the contracting parties must be carefully investigated, if it can be clearly and expressly established. But if it remains obscure and ambiguous, it can be explained both from the matter of the agreement, and from the usage of places, and from the character of the persons.

You Will Resolve. - 1st. A contract rescindable by positive law contains a true obligation, although this is not absolute but conditioned, namely if nullity is not invoked. Moreover, all admit that a human legislator can place a condition of this sort upon certain contracts for the good of peace and for avoiding the danger of fraud.

2nd. Nevertheless, the opinion is probable of those who hold that contracts entered into without the formalities prescribed by law for their validity are valid in conscience; because by natural law the consent alone of the parties suffices for inducing obligation, and human law does not take away a natural obligation between persons otherwise capable, although it denies a civil action. - Cf. Molina, disp. 82. - St. Alphonsus, n. 711.

3rd. The obligation of him who is going to make a judicial cession of goods must be understood according to the custom and positive laws which permit him to retain some goods. But among us these are more or fewer according to the diversity of States and of the condition of domestic life. Cf. Vogler, n. 542. - Gousset, n. 772. - Wells, Every Man, etc., p. 288 and following.

4th. "They sin who rashly contract when no probable hope shines upon them that they will be equal to paying; for it is not licit to make trial of things or to seek gain with the damage of others."

5th. "They sin who, having used various arts, induce creditors to remit part of the debt, lest they lose the whole or lest payment be deferred longer or lest they be entangled in lawsuits; but those who, because of anticipated payment, obtain remission of a part from creditors driven by no necessity but freely consenting, can be excused, since custom thus provides and convenience is worth very much in the common estimation."

6th. "A wife is a participant in another's sin who, by the indulgence of her husband, makes excessive expenses in buying clothes or in another way. Children also sin against justice who, fully conscious that their father is not equal to paying, squander money given to them."

7th. "Whenever someone knows himself unequal to paying, and does not hope that by doing business he can increase his estate, he is held to abandon business, after handing over his goods for payment of debt; for it is licit for no one to conduct business with another's damage. But merchants are often excused, upon whom for the most part some hope shines." - Thus Kenrick, tract. 10, nn. 205 and 206.

8th. They also sin who undertake a journey by railway cars without procuring tickets for the journey for themselves, or without handing over tickets already procured to the official. They receive from the company a utility estimated by a price, which nevertheless they do not pay, and therefore they violate the contract and are held to restitution. We judge the same concerning persons of a determined class, to whom individually under certain conditions the privilege of traveling at a much diminished price is granted by the railway company, but who, contrary to the very condition of the contract, lend their special and privileged tickets to any other persons whatever, so that these may also use the privilege. The railway company granted me a personal privilege, but did not grant me the faculty of communicating that privilege to another. This case of a special privilege granted must altogether be distinguished from the case of a ticket which is valid for a double journey. This second ticket is truly not a special privilege, but, bought by me, passes into my absolute dominion, so that I may use it or give it to another that he may use it, or so that I myself may use one journey, and a returning friend may use it.

The obligation of contracts ceases: 1st, by payment, or by performance of any owed thing, or also by the execution of the promised or otherwise owed object; 2nd, by novation, or substitution of a new debt for the old debt, which is thus extinguished; 3rd, by condonation, or an act by which the creditor remits the debt to his debtor from full liberty. For whoever can yield concerning his own right in all those things which do not pertain to the public good, provided he was not incapable of contracting; 4th, by compensation, or fictive and reciprocal payment, which has place when persons are debtors toward one another in turn; 5th, by confusion, which has place when the obligation of the debtor and the right of the creditor are joined together in the same person, for example, if the creditor becomes heir of his debtor, or the debtor of his creditor, or the same person becomes heir of creditor and debtor at the same time; 6th, by destruction or loss of the thing owed, which sometimes frees the debtor from obligation, as in merely gratuitous contracts, and sometimes in others, where fault of the debtor does not occur. . . . But sometimes it does not free him, for example, if it happened by fault of the debtor, or he was in culpable delay, etc.; 7th, by rescission or rescindability, which has place when a contract consisting of essential conditions is dissoluble because of some defects. That contract is valid until it is rescinded.