CHAPTER V POSSIBILITY OF PERFORMANCE § 83. Possibility at Time of Contracting.—An agreement, in order to be enforceable at law, must be possible of performance. As we are at present concerned with the formation of contracts, the possibility of performance to be considered is that which exists at the time the agreement is made. If such possibility exist then there is primâ facie a good contract. At a subsequent time events may occur that render it impossible for one or other of the parties to fulfil the obligation undertaken, and the effect of such events on the legal position of the parties requires to be examined. § 84. Kinds of Impossibility.-Three kinds of impossibility may be specified : 1. Absolute impossibility: that is to say, impossibility inherent in the nature of the act promised, as, for instance, where a man agrees with another to make water run up a hill, or undertakes to fly across the ocean. 2. Legal impossibility: that is to say, where the act promised is prohibited by law. 3. Actual impossibility: that is to say, where the act promised becomes impossible owing to circum stances. § 85. Absolute Impossibility. - If an agreement is impossible in itself, it is void, as the parties to it cannot be supposed to have entered into an absurd agreement. The question of what is or is not impossible in itself depends largely on the progress of knowledge. What is apparently impossible at one time, becomes possible at a later stage of the earth's history. tract. § 86. Legal Impossibility.-Where the performance of an agreement is legally impossible there is no valid conEvery person is supposed to know the law, and the parties to the agreement are taken to have been aware that in law it could not be carried out. For instance, if A. due to C. without professes to discharge B. from a debt having any authority from C. to do so, the discharge is void, as a valid discharge for a debt can be given only by the debtor or his agent. § 87. Actual Impossibility.—Where the act to be done is not impossible in itself, and is not prohibited by law, it may become impossible in fact, owing to particular circumstances occurring subsequently. As a general rule the agreement is valid and the party who has undertaken the performance is liable. A few examples will illustrate the principle. Where a ship was to be loaded with usual despatch, and the loading was delayed by the occurrence of a frost, the party loading was held liable for the delay. Where a builder undertook to erect a building within a certain time in accordance with plans to be furnished, and it turned out that the plans were such that the buildings could not be erected within the time prescribed, the builder was held liable. In both these cases the parties might have protected themselves by the insertion of proper stipulations in the agreement. Unexpected difficulties therefore do not serve as an excuse for nonperformance of the terms of an agreement. There are certain exceptions to the principle, but they will be referred to under the head of Performance and Discharge of Agreements (§ 102). CHAPTER VI EFFECTS OF MISTAKE, MISREPRESENTATION, OR FRAUD § 88. Reality of Consent.-A contract which on the face of it is for a legal and possible object, possesses the proper form or consideration, and is made between parties capable of contracting, may, however, have no legal effect or a limited legal effect if it appear that there was no real agreement. This may happen in three ways: (1) where there was a "mistake," the parties meaning different things; (2) where there was "misrepresentation," by one of the parties that induced the other to contract; and (3) where there was "fraud," ¿.e. an intentional misrepresentation. § 89. Mistake. -As a general rule one party to a contract is not allowed to avoid it by alleging that he made a "mistake." The word "mistake "" may, however, be used in various senses. It may mean a mistake as to expectations. A. buys goods thinking the market is going to rise, when in fact it falls. It may mean a mistake as to the utility of the article for a particular purpose, as, for instance, where a person buys a stove which he finds too small for heating purposes. Or it may mean mistake in wording the offer or the acceptance, e.g. where A. orders 100 tons when he only meant 10 tons. Other uses of the word might easily be given. We are, however, concerned with a technical use of the term to denote certain circumstances that are recognised by the courts as indicating a want of that real consent that is essential to every contract. These circumstances may be divided into five classes :— 1. Where the contract relates to a thing believed by both parties to exist when it has ceased to exist. 2. Where one party contracts with another person believing him to be a third party. 3. Where one party, not being negligent, is mistaken as to the real nature of the contract. 4. Where there is a mutual mistake as to the identity of the thing sold. 5. Where one party is mistaken as to the nature of the promise given, and such mistake is known to the other party. § 90. (1) Mistake as to the Existence of the Subject Matter. When a cargo at sea is sold, the parties not knowing whether it is afloat or not, are regarded as contracting on the supposition that the cargo is afloat. If it eventually turns out that the vessel and cargo had been wrecked and lost at the moment the contract was made, the contract is not binding, and the loss will fall on the seller and not upon the buyer. So too where a cargo of corn supposed to be on a voyage to England was sold, when in fact it had become so heated that it had already been sold at Tunis, the court held the contract void on the ground that it implied that the corn was in existence as such, and that it was capable of delivery. It would probably be more correct to classify all these cases under failure of an implied condition that the thing sold is in existence, and belongs to the vendor. It is important to remember that such an implied condition is only imported into contracts of a certain type, ¿.e. when the parties are to be taken as contemplating an existing thing belonging to the vendor. There is no rule of law to prohibit A. from selling to B. that which does not belong to A. Stock Exchange dealings take place daily in stocks and shares that do not belong to the vendor, and such dealings are valid. Non-existing property may be bought and sold if there is a possibility of its existence, and the parties are aware of its non-existence. For example, A. may sell B. a crop to be raised on a certain field. § 91. (2) Mistake as to Party.—The usual type of case in which one party contracts with another believing him to be a third party, is due as a rule to the fraud or dishonesty of the other party. A. was accustomed to buy goods from B.: an order for goods from A. directed to B. came into C.'s hands, who had bought B.'s business. C. executed the order without informing A. of the change in the proprietorship of the business. It was held that A. was not obliged to pay for the goods, as there was no contract between A. and C. If A. by imitating the signature of B. obtains goods from C., the property in the goods will not pass to A., as there is no real contract of sale between A. and C. In this case C. thinks he is contracting with B. § 92. (3) Mistake as to the Nature of the Contract.— Where a blind man or a man who cannot read has a written contract falsely read out to him, so that the contract as read is entirely different from the contract as written, and afterwards signs the contract, it will not be binding on him. Under such circumstances "the mind of the signer did not accompany the signature.” Hence where a very old man signed a bill of exchange (§ 238), being told that it was a guarantee (§ 188), and the bill was endorsed over to a party who sued him upon it, it was held that the amount could not be recovered against him. And where an illiterate man executed a deed releasing "all claims," which was represented to him as a deed releasing it was held that the deed was void. 66 arrear of rent " only, In order that the contract may be avoided in these cases, it is necessary that there should be an absence of negligence. He who signs a written document without informing himself of the contents when he is able so to do, is negligent, and will be bound by his document. § 93. (4) Mistake as to the Identity of the Thing sold.—If A. intends to sell one thing, and B. to buy another, there is an absence of that common intention that is the essence of every agreement. Cases occur where different things are described by the same name, and it is quite possible for the parties to agree upon a contract thinking they mean the same subject matter when in fact they A. purchased from B. a cargo of cotton "to arrive do not. |