Chapter I. Nature of Contract

Rights may be acquired by one person from another when the latter voluntarily surrenders them in favour of him by whom they are freely accepted. This is done by contract, which may be defined as an agreement by which one or more persons bind themselves to do, give, or forbear something in favour of one or more other persons.

Contracts are express or implied. Express contracts are entered into by word of mouth or by writing. Implied contracts are formed by the virtual or implied consent of the parties. Thus, whenever a person undertakes an office he virtually agrees to perform all the duties annexed to it by law or custom, or which the nature of it demands. These latter are also called quasi-contracts.

By a unilateral contract one only of the parties becomes subject to an obligation, as by a simple promise to do something in favour of another. A bilateral contract, such as that of sale, imposes an obligation on both parties.

A gratuitous contract confers advantage on one of the parties only, though both may incur an obligation by it. An onerous contract confers advantage on both parties. Thus, if I lend my horse to a neighbour for the day, he alone derives advantage from the contract, though I am bound not to demand the horse back until the appointed time arrives. If the contract is one of hiring, both parties derive advantage from it, and both are laid under obligations by it.

A consensual contract is formed by the mere consent of the parties, a real contract by the delivery of the object of the agreement.

A solemn or formal contract is entered into with the formalities required by law. A simple contract has no such formalities. In English law some simple contracts give no right of action unless they are in writing, or unless they have some other adjunct which serves as evidence of the contract. Thus by the Sale of Goods Act, 1893, sec. 4, “a contract for the sale of any goods of the value of ten pounds or upwards shall not be enforceable by action unless the buyer shall accept part of the goods so sold, and actually receive the same, or give something in earnest to bind the contract, or in part payment, or unless some note or memorandum in writing of the contract be made and signed by the party to be charged or his agent in that behalf.”” In these cases the law does not annul the contract if it is destitute of the legal requirements, or make it voidable; it only renders it unenforceable in the courts of law. The only formal or specialty contract in English law is the deed. A deed is a document in writing or printed on paper or parchment. It is executed or made conclusive between the parties by being signed, sealed, and delivered. The seal is often affixed to the deed beforehand, and this is executed and made operative by the party whose deed it is placing his finger on the seal and saying, ‘‘ I deliver this as my act and deed.”¹

¹ Anson, Law of Contract, p. 51.

In moral theology we have chiefly in view the natural obligation in conscience which arises from every true contract to act in accordance with the agreement entered into. That obligation is one of justice, for a contract gives a strict right in justice to the fulfilment of the agreement. We cannot, however, afford to neglect positive law, ecclesiastical and civil, especially in the matter of contracts. It is a received axiom that contracts are governed by the law of the country. So that a question for consideration arises here, whether positive laws, which require certain contracts to have a special form for their validity, bind the conscience, so that if they are informal they are null and void in conscience as they are in law.

No difficulty exists with regard to contracts which are governed by ecclesiastical law. The effect of the Tridentine law, which makes marriage null and void if not contracted in presence of the parish priest and of two witnesses, is clear from its terms. The same is true of other ecclesiastical laws which annul contracts. A difficulty arises only with regard to civil law, which does not usually explain whether defect of form in specialty contracts merely affects the legal obligation, or whether it affects also the natural obligation, making the contract null and void in conscience, so that no rights or obligations of any kind arise under it.

The civil authority can certainly make laws which would have that effect in its own department, as all admit. It is a - question of fact as to what is the effect of such voiding laws in any particular system of jurisprudence. It is a well-established opinion among English moralists that English laws which make acts void for want of legal form do not absolutely and at once annul the act, but only make it voidable.¹1 So that defect of form in deeds and testaments will not prevent them from taking effect according to the intention of him who made them. If, however, it be the interest of someone to have the informal act set aside, he may use the benefit which the law gives and set it aside, provided that there is no fraud. Modern theologians commonly hold this opinion concerning the effect of voiding laws in other modern systems of legislation.

¹ Jeremy Taylor, Ductor dubit., bk. 2, c. 1, r. 5, n. 22.

From the definition of contract it is clear that its essential elements are: (1) The consent of the parties; (2) parties who are capable of giving a valid consent; (3) the subject-matter of the agreement. These will form the subject of the three following chapters.

The law of the country concerning contracts is canonizea by Canon 1529, which is as follows: “‘ Let the same be observed in canon law in ecclesiastical matters with the same effects which the civil law in the country lays down concerning contracts both in general and in particular, whether nominate or innominate, and about payments, unless it is contrary to divine law, or it is otherwise determined by canon law.”