§ 17. Shares. The proportion of capital subscribed by a member of a company is divided into shares. The allotment of shares in reply to an application constitutes a contract between the company and the member that the latter will contribute the amount of the shares when called upon so to do in accordance with the agreed conditions. A shareholder can never call upon the company to pay him out the amount he contributed. He remains a shareholder until he procures some one else to take his place. A share can always be transferred subject to the company's regulations. The shareholders' names are registered, and usually each shareholder is entitled to a certificate stating the number of shares he holds (§ 11).

§ 18. Stock. The term "stock" is applied to denote either the amount of capital contributed to a company or the amount advanced to a government. Stock differs from shares in that (1) it is always fully paid, and (2) it can be transferred in fractional parts. Sometimes a company, when its shares are fully paid up, converts them into stock for convenience of transfer.

A portion of the national debt is called the funded debt, and the holder of stock in the funds has a right to a perpetual annuity, subject to the right of the State to redeem such annuity by the payment of a stipulated sum. For instance, £100 3 per cent stock is the right to receive a perpetual annuity of £3 per annum, subject to the right of the Government to redeem such annuity by the payment of £100.

The public funds consist of several kinds of stock, the nature and legal incidents of each kind being fixed by the Act of Parliament creating it. The most important stock is known as consols.

Stock in the public funds is transferred by signature of the books at the Bank of England. The owner may attend personally to authorise the transfer, or he may appoint an agent for the purpose, by writing under his hand and seal attested by two witnesses. In some cases stock may be represented by certificates payable to bearer, and then the stock can be transferred by delivery of the certificate.

§ 19. Debenture.-The word "debenture" is used in various senses, but as a rule it signifies a document under seal of a company given to secure the repayment of money advanced to the company, such repayment being usually secured by a charge on the whole or part of the property of the company. A debenture may, however, be issued without any such charge. The debenture holder looks to the property charged as the security for his money, and generally stipulates that he will be entitled to certain remedies in case the money is not repaid when due.

§ 20. Debenture Stock. A company is sometimes authorised to issue debenture stock. Such stock is a charge on the undertaking of the company prior to all shares or stock, and the interest has priority over all dividends. Holders of this stock cannot require payment of the principal money paid up upon it. The stock gives, in fact, a perpetual annuity. The holder is a creditor and not a member of the company.

§ 21. Copyright.-Copyright is the exclusive right of multiplying copies of an original work or composition. Under the Copyright Acts, copyright in books, pamphlets, sheet music, maps, charts, and plans lasts for forty-two years, or during the lifetime of the author, and seven years after his death, whichever period is the longer. The copyright of an article in a review belongs to the author, unless the owner of the review has bought the copyright. An action cannot be maintained for the infringement of copyright unless the copyright has been registered.

§ 22. Designs.-Any new or original design applicable to any article of manufacture or to any substance, whether it relate to the pattern, the shape, or the ornament thereof, may be registered at the proper office. By such registration copyright is acquired in the design for five years from the date of registration. A design will not be registered where it has been previously published in the United Kingdom. The design has to be registered for a particular class of goods.

§ 23. Patents. A patent is the exclusive right of making, using, or vending a new invention for a period of fourteen years. The right is conferred by letters patent,

granted under seal by the Crown, but during the period between the acceptance of an application at the patent office and the formal grant, the applicant is protected to the extent that he may use and publish the patent. The applicant has to lodge a general description of the patent when he sends in his application; subsequently he has to lodge a detailed description called the complete specification. The Crown in making the grant does not take upon itself to say whether the invention is new or not. A patentee is therefore liable to find his patent invalid, because some one has previously patented or published the subject matter. A record of all patents is kept at the patent office, and this record can always be searched. The time for which a patent is granted may be extended by the Judicial Committee of the Privy Council where the patentee has not received adequate remuneration.

§ 24. Trademarks and Goodwill.—A trademark is a mark applied to goods in order to denote their make or quality, or to indicate the firm who exported or manufactured them. By registering a trademark the right to its exclusive user is acquired. A trademark may consist of a name printed in a distinctive manner, the signature of the applicant, or any distinctive device, mark, brand, heading, label, ticket, or fancy word or words not in common use. A trademark can only be assigned along with the goodwill of a business.

A goodwill is nothing more than the expectation that the old customers of a firm will continue their dealings after the business has been transferred to a new firm. The purchaser of a goodwill usually stipulates for his protection that the vendor will not carry on the same business in the neighbourhood. The extent to which such stipulations are valid will be considered in a subsequent chapter (§ 80).

§ 25. Authorities.-The treatises on Personal Property by Mr. Williams and by Mr. Goodeve contain a concise account of the various forms of moveable property, as well as chapters on companies. Reference may be also made to Mr. J. W. Smith's Compendium of Mercantile Law on the subject matter of this and the following chapters.

PART II

CONTRACTS

CHAPTER I'

THE FORMATION OF CONTRACTS

§ 26. Definition of a Contract.—A contract is an agreement enforceable by law.

This definition of a contract does not profess to enumerate all the elements that are required to constitute a contract. It merely embodies two of the more important characteristics of every contract, viz. (1) that a contract is an agreement, and (2) that it is an agreement that the law will enforce. It is therefore necessary to examine the nature of an agreement, and to enumerate the various elements an agreement must possess, in order to be regarded as a contract.

§ 27. What is an Agreement.-An agreement is an offer or proposal by one person made to and accepted by another person relating to some act to be done or not to be done by one of such persons towards the other.

An agreement therefore implies (a) two persons at least, (b) an offer, and (c) an acceptance.

Two parties at least are required to every agreement, since it is the result of a common intention expressed by two or more minds. Either party may be a natural person, e.g. a man or a woman, or an artificial person, e.g. a corpora

tion. The limitations that the law has imposed on the capacity of natural or artificial persons of entering into contracts will be considered later on.

§ 28. Offer and Acceptance. Every agreement, no matter of how complicated a nature, may be resolved into (1) an offer on one side, and (2) an acceptance on the other. The simplest type of case is where A. says to B., "Will you buy 1000 yards of cloth at 6d. per yard?" and B. replies, "Yes." A more complicated case is where a long correspondence takes place between buyer and seller, eventually resulting in goods being sold. But all the stipulations and conditions contained in the letters can be thrown into the form of an offer and an acceptance. An offer may also be made by advertisement, as, for example, where a reward is offered to any person who will restore lost property; the restoration of the property amounts to an acceptance. The time-tables of a railway company form an offer to carry any person, subject to the terms and conditions stated; the purchase of a ticket amounts to an acceptance. A bid at an auction is an offer; the fall of the hammer an acceptance of the highest bid. Many other simple forms of offer and acceptance have been introduced by the custom of trade.

§ 29. Intention to invite Offers.-In some cases it is difficult to say whether there is an offer or merely an intimation that offers are or will be invited. For instance :

A. advertises that he has goods to sell at a certain price. B. goes to his shop and says I will take the goods at the advertised price. Is B.'s statement to be regarded as an acceptance of an offer made by A., or is it to be taken merely as an offer by B. which A. is entitled to refuse? The answer depends in this as in other cases entirely on what was the real intention of the party in advertising, such intention to be collected from the nature of the transaction.

It has been held that the advertisement of a sale by auction does not amount to such a definite offer to sell the goods that there is a contract with those who attend the sale to the effect that the goods will be sold. The courts