( Originally Published 1918 )
A Contract is an agreement to do a certain thing for a certain consideration within a time either stated or implied.
A Contract may be made in one of three forms:
(1) In Writing (with pen and ink or type-written).
(2) A Written Proposition in the form of a letter signed by one party and accepted in writing by the other party.
(3) By Oral Agreement in the presence of competent witnesses.
Nearly all contracts are made in writing. Oral contracts are dangerous. Most contracts must be in writing.
Anything can be made a subject of contract provided it is not criminal or immoral, or an agreement to compound a felony, or contrary to public policy.
A Contract Contrary to Public Policy is that of a man binding himself not to exercise his trade or business; but if, for a valuable consideration, he engages not to exercise his trade in a particular place, he is bound by his engagement, though he may exercise his trade elsewhere. A bond or agreement that the obligor shall never carry on or be concerned in a particular business, is void.
Wagering contracts are also generally void as against public policy, but such an agreement is not void if the prohibition is restricted to a certain territory or locality.
No contract contrary to public policy can be enforced. Money paid on such contracts cannot be recovered.
Parties Who May or May Not Make Contracts.—Until the contrary is shown, all persons entering into a contract are presumed to be competent to bind themselves by their agreement. Hence those who would resist the performance of a contract on the ground of legal incapacity must set up and prove the particular incapacity upon which they rely to avoid the contract.
Minors, insane persons, idiots, persons deprived of their reason by alcoholic or drug addictions, persons under guardianship, and persons who have been lawfully declared to be spend thrifts, are not competent to enter into contracts.
These disqualifications vary between various states, and the law of the state in which a con-tract is made should be considered. An intoxicated man or one temporarily insane is not competent to make a contract, nor could he be held to its enforcement if made. A minor may make a contract, but the other party cannot enforce it if the minor refuses to perform his part. As a minor is not competent to sue, he cannot enforce it against the other party. A contract with an incompetent is not a valid contract.
Under the common law a married woman is not a competent party to a contract; but in most of the states a married woman is empowered to enter into contract regarding her own separate property.
Though minors, insane persons, idiots, etc., are not competent to enter into contracts, they are bound for necessaries furnished them. Generally speaking, a husband is bound for necessaries furnished his wife, even if against his orders, if he fails to furnish them for her, but this rule is subject to various exceptions.
Corporations can enter into contracts, provided they keep within the limits prescribed by their charters. Anything attempted beyond those limits would be void. The law is generous in granting corporate powers, but it is jealous in seeing that in no case shall they be exceeded, nor their limitations ignored.