Covers Chapter, 3, Formation of Informal Contracts, from Section 27, Auctions, Sales Without Reserve to Section 74, Time When and Place Where a Contract Is Made

Committee of Washington State Bar Association on Annotations to the Restatement of the Law by the American Law Institute,

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UW Law Digital Commons (University of Washington)

The American Law Institute\u27s Restatement of the Law of Contracts with Annotations to the Washington Decisions

Covers from Chapter 4, Formation of Formal Contracts, Section 95, Requirements for Sealed Contract to Chapter 5, Duties and Rights Where More Persons Than One Are Promisos or Promisees of the Same Performance, Section 116, Joint Indorsers

Washington Law Review Volume 8 Number 2 10-1-1933 The American Law Institute's Restatement of the Law of Contracts with Annotations to the Washington Decisions Committee of Washington State Bar Association on Annotations to the Restatement of the Law by the American Law Institute Follow this and additional works at: https://digitalcommons.law.uw.edu/wlr  Part of the Contracts Commons Recommended Citation Committee of Washington State Bar Association on Annotations to the Restatement of the Law by the American Law Institute, The American Law Institute's Restatement of the Law of Contracts with Annotations to the Washington Decisions, 8 Wash. L. Rev. 70 (1933). Available at: https://digitalcommons.law.uw.edu/wlr/vol8/iss2/3 This Article is brought to you for free and open access by the Law Reviews and Journals at UW Law Digital Commons. It has been accepted for inclusion in Washington Law Review by an authorized editor of UW Law Digital Commons. For more information, please contact cnyberg@uw.edu. The American Law Institute's Restatement of theLaw of Contracts with Annotations tothe Washington Decisions*Chapter 4FORMATION OF FORMAL CONTRACTS**Contracts Under SealSection 95. REQUIREMENTS FOR SEALED CONTRACT.The requirements of the law for the formation of a contractunder seal are(a) A sealed written promise and delivery, either uncon-ditionally or in escrow, of the document containingit; and if the delivery is in escrow, the happening ofthe condition on which delivery is made;(b) A promisor and a promisee each of whom has legalcapacity to act as such in the proposed sealed con-tract; and each of whom is so named or describedin the document as to be capable of identificationwhen it is delivered,(c) Acceptance by the promisee or grantee in the casestated in Section 105;(d) That the transaction, though satisfying the previousrequirements, must not be void by statute or byspecial rules of the common lawCommenta. The explanation of these requirements is given in Sections 96-110. The word "written" and the word "writing" not only mthe present section, but throughout the Restatement include print-ing and others means of impressing characters on paper or other sub-stance. The non-existence of one or more of the requisites statedin the section does not preclude the formation of an informal con-tract if the requisites for such a contract exist.b. A contract under seal is almost invariably signed, but such acontract is possible without signature.ANNOTATIONSection 95. The common law affect of seals is varied in Washington bystatute.The use of private seals upon all deeds, mortgages, leases, bonds, andother instruments, and contracts in writing, including deeds from a hus-band to his wife and from a wife to her husband for their respective com-munity right, title, interest or estate in all or any portion of their com-munity real property is hereby abolished, and the addition of a privateseal to any such instrument or contract in writing hereafter made shallnot affect its validity or legality in any respect. L. '23, Chap. 23, Sec. 1.Appd. Feb. 23, 1923. Rem. Comp. Stat. (1933), Sec. 10556.All deeds, mortgages, leases, bonds, and other instruments and con-tracts in writing, including deeds from a husband to his wife and froma wife to her husband for their respective community right, title, interestor estate in all or any portion of their community real property whichhave heretofore been executed without the use of a private seal are, not-withstanding, hereby declared to be legal and valid. L. '23, Chap. 23, Sec.*The absence of annotations to particular sections of the Restatementindicates that no Washington decisions have been found on the principletherein stated.**Continued from last issue.WASHINGTON LAW REVIEW2. Appd. Feb. 23, 1923. Rem. Comp. Stat. (1933) Sec. 10557.Notwithstanding that a broker's unauthorized contract to sell realestate does not disclose the name of his principal and is under seal, itmay be ratified by the principal in view of Rem. & Bal. Code, Sec. 8751abolishing the use of private seals, McLeod v. Eshema , 66 W 683, 120P. 528 (1912).Section 96. DEFINITION OF A SEAL.A seal is a piece of wax, a wafer or other substance,affixed to the paper or other material on which a promise,release or conveyance is written, or a scroll or sign, howevermade, on such paper or other material, or an impressionmade thereon; provided that by a recital or by the appear-ance of the document an intention of the promisor, releasoror grantor is manifested that the substance, scroll, sign orimpression shall be a seal.Commenta. The definition of a seal m the section is based partly on thecommon law and partly on statutes that have been enacted m mostStates where seals are still m use.b. Under the section the question whether a seal is upon a docu-ment is to be determined from the document itself. Evidence ofextrinsic circumstances is not admissible to prove or disprove this.Such circumstances may, however, be shown to aid the determina-tion of the questions whether a promisor affixed or adopted a seal(see Section 98) and whether the document has been delivered (seeSection 102).Section 97. WHMN A PROMISE IS SEALED.A written promise is sealed if the promisor affixes or im-presses a seal on the document or adopts a seal alreadythereon.Section 98. WHAT AMOUNTS TO ADOPTION OF A SEAL.(1) A promisor who delivers a written promise to whicha seal has been previously affixed or impressed withapparent reference to his signature, thereby adoptsthe seal.(2) A promisor who delivers a written promise to whicha seal has been previously affixed or impressed withapparent reference to the signature of another partyto the document is presumed to have adopted theseal unless extrinsic circumstances show a contraryintention.Commenta. Under the rule stated m Subsection (1) extrinsic evidence isnot admissible, under the rule stated m Subsection (2) such evi-dence is admissible.Section 99. ADOPTION OF THE SAME SEAL BY SEvEiI= PARTIES.Any number of parties to the same instrument may adoptone seal.Section 100. REcITAL OF SEALING OR Duvmy.A recital of the sealing or of the delivery of a writtenpromise is not essential to its validity as a sealed contract.Commenta. A recital may be of importance to show that a dash or scrollWASHINGTON LAW REVIEWafter a signature is a seal (see Section 96) , but the recital is notan independent requirement, so that if a wafer or other objectattached to a written promise is evidently a seal, a sealed contractis formed though there is no recital.Section 101. SATLED PROMISE DELIVERED UNCONDITIONALLY ORIN ESCROWA promise under seal may be delivered by the promisorunconditionally, in which case there is a present contractunder seal, or may be delivered in escrow, in which casethere is no present contract under seal. Delivery may bemade either unconditionally or in escrow to the promiseeor to any other person.Commenta. The section by its terms is applicable to the power of a prom-isor to subject himself to a duty It does not enable a promisorby inserting in a document not only his own promise, but whatpurports to be a promise by the promisee, to subject the latter to aduty by delivering the document to a third person. If, however, apromisor attempts this, his own promise is likewise ineffectiveuntil the promisee by accepting the document assents to assume thethe stated duty (see Sections 105-107)Section 102. WHAT A OUNTS TO UNCONDITIONAL DELiVERY.A promise under seal is delivered unconditionally whenthe promisor puts it out of his possession with the apparentintent to create immediately a contract under seal, unlessthe promisee then knows that the promisor has not suchactual intent.Section 103. WHAT AMOUNTS To DELIvERY IN ESCROW AND ITSEFFECT.(1) A promise under seal is delivered in escrow by thepromisor when he puts it out of his possession with-out reserving a power of revocation, and with the ex-pressed intent that the promise shall become a con-tract under seal upon the happening in the futureof some condition not expressed in the document,and shall not become a contract under seal until thattime. This condition must be something other thanthe promisor's future mental desire or intention.(2) On the happening of such a condition as is stated inSubsection (1) the promise becomes a contract un-der seal. Until the time has elapsed for the hap-pening of the condition that was fixed by the prom-isor when he delivered the document, or, if he thenfixed no time, until a reasonable time has elapsedfor the happening of the condition, the promisor hasno power to annual the delivery Thereafter he hasa right to reclaim the document, if the condition hasnot happened.Commenta. Delivery in escrow is to be distinguished from delivery to holdas agent for the promisor.LAW OF CONTRACTSSection 104. ACCEPTANCE OR DISCLAIMER BY THE PROMISEE OFuNILATERAL SEATED CONTRACT.(1) Acceptance by the promisee in the case of a promiseunder seal is not essential to the formation of a uni-lateral contract, nor is knowledge of the existence ofthe promise; but a promisee who has not acceptedsuch a promise may, within a reasonable time afterlearning of its existence and terms, render it moper-ative from the beginning by disclaimer.(2) Acceptance or disclaimer is irrevocable.Section 105.ACCEPTANCE BY THE PROMISEE OF A BILATERALSEALED CONTRACT.Acceptance by the promisee or grantee in the case of asealed promissory writing or conveyance which purports tocontain a return promise by him is essential to create anycontractual obligation.Commenta. In order to subject the promisee or grantee to a duty hemust express assent thereto, and unless he makes the promie statedin the writing, promises in his favor are equally inoperative, sinceit is not contemplated that one promise shall be made without theother.b. The case of a grantee is included in the Section and in Sec-tions 106, 107 though the subject of this Restatement does not in-elude conveyances, because a deed of conveyance by A to B maycontain as one of its provisions a promise by B. It is the effectof such a provision that is stated in these Sections.Section 106. WHAT AMOUNTS TO ACCEPTANCE OF INSTRUMENT.Acceptance in the case of a sealed promissory writing orconveyance consists of a manifestation of assent to the de-livery thereof, made to the promisor or grantor or to a per-son to whom the document has been delivered in escrow.Such manifestation must comply with any requirement im-posed by the promisor or grantor. It may be made eitherbefore or after delivery If made before delivery it is re-vocable until the moment of delivery.Section 107 CREATION OF INFORMAL CONTRACT BY ACCEPTANCEBY PROMISEE.One who accepts but does not sign or seal a sealed docu-ment which contains not only a conveyance or a promiseto him or for his benefit, but also words expressing a prom-ise by him thereby makes the promise expressed in the doc-ument, but the promise so made by him is not under seal,and whether it is binding depends upon the rules governinginformal contracts.Section 108. REQ'JIREMENT OF NmrNG OR DESCRIBING PROM-ISOR AND PROMISEE.A promise under seal is not operative as a contract underseal unless both the promisor and the promisee are namedor so described therein as to be capable of identificationwhen the writing is delivered.WASHINGTON LAW REVIEWCommenta. It is a requirement of a sealed contract that all facts esentialto a determination of all the terms of the contract appear in thedocument. Attempts to make a contract under seal, which are in-effectual as such for failure to observe this principle, may, how-ever, create an informal contract, if the requirements of such acontract exist.Section 109. ENFORCEMENT OF A SEALED CONTRACT BY PROM-ISEE WHO DOES NOT SIGN OR SEAL IT.The promisee of a promise under seal is not precludedfrom enforcing it as a sealed contract because he has notsigned or sealed the document, unless his doing so was acondition of the delivery, whether the document does or doesnot contain also a promise by him.Commenta. Other circumstances (as indicated by Sections 105, 107) thanthe fact that the promisee has not signed or sealed the documentmay prevent the promisee from acquiring a right, but the failure tosign or seal does not itself have this effect, unless a condition soproviding is imposed when the document is delivered.Section 110. SEALED CONTRACT WITHOUT CONSIDERATION.It is not essential in order to make a promise under sealoperative as a sealed contract that consideration be givenfor the promise.ANNOTATIONA contract under seal still imports consideration, notwithstanding L.'88, Chap. 97, Sec. 1, abolishing private seals, Considine v. Gallagher 31W 669, 72 P 469 (1903) Alunro v. National Surety Uo., 47 W 488, 92 P280 (1907) Golle v. State Bank, 52 W 437, 100 P 984 (1909) But lackof consideration may be shown as a matter of defense, the presumption ofconsideration being rebuttable, Gates v. Herr 102 W 131, 172 P 912(1918).Chapter 5DUTIES AND RIGHTS WHERE MORE PERSONS THANONE ARE PROMISORS OR PROMISEES OF THESAME PERFORMANCESection 111. JOINT, SEVERAL OR JOINT AND SEVERAL PROMISORSOR PROMISEES.(1) Two or more parties to a contract who promise to thesame promisee that the same performance shall begiven, thereby bind themselves(a) jointly, or(b) severally, or(c) jointly and severally,according to the rules stated in Sections 112-127(2) Two or more parties to a contract who are promisedby the same promisor that the same performanceshall be given, thereby acquire(a) a joint right, or(b) several rights, or(c) joint and several rights,according to the rules stated in Sections 128-132.LAW OF CONTRACTSCommenta. It is possible for several persons to contract to render as manydistinct performances. In such a case each promisor not only be-comes subject to a duty different from that of the other prom-isors, but the performance for which he brads himself is differentfrom the performance for which the other promisors bid them-selves. Each of such contractual duties is subject to the samerules that would be applicable if none of the other duties existed.It is also possible for several promisors to undertake severally thata single performance shall take place. In such a case though thereare several duties, only one performance is due. Reference to thelatter class of several duties is necessary in connection with therules governing joint promses, because it is possible that a numberof persons not only promise jointly that a specified performanceshall take place, but may also each of them severally make a prom-ise identical in terms with the joint promise.ANNOTATIoNSubsection (1) (a). Where a complaint in an action for breach of con-tract alleged that the contract was entered into by one of the defendants,acting for himself and his co-defendants, and all of the defendants filed ajoint answer containing a general denial only, all were bound jointly uponproof of the contract as alleged, Carlisle Packing Co. v. Deming, 62 W 455,114 P. 172 (1911).Section 112. WnnmN Two OR MORE PROiSORS OF THE SAMEPERFORmAN E ARiE BouND Joiw LY.Except as qualified by Sections 115, 116, where two ormore parties to a contract promise the same performanceto the same promisee they incur only a joint duty unless thecontrary is stated, or unless the terms of the promise or theextrinsic circumstances indicate an intention on their partto be bound severally, or jointly and severally The factthat one promisor is under a duty to the other to performthe promise or that one promisee has received all or thegreater portion of the consideration does not prevent theirduty from being joint.ANNOTATIoNLanders v. Foster, 34 W 674, 76 P. 274 (1904) held that parties whohave jointly entered into a contract for the purchase of an interest in apatent cannot escape liability therein because the interest purchased was,by their authority, conveyed to one of their number instead of to all.Section 113. W ENm Two OR MORE PROmisoRs ARE SivFRALBou-D.Where two or more parties to a contract promise separateperformances, to be rendered respectively by each of them,or where each of them makes only a separate promise thatthe same performance shall be rendered, each is severallybound for the performance which he promises and is notbound jointly with any of the others.Commenta. The words "A and B severally promise C $100" or similarwords contain a possible ambiguity Each of them may promise thato shall receive separate sums of $100, or each of them may promisethat C shall receive one sum of $100. In both cases A and B areseverally bound to the extent of $100, but in the latter case pay-WASHINGTON LAW REVIEWment of one sum of $100 will extinguish the obligation of both toC. It is a question of interpretation which meamng is to beattached to the words of a given contract.b. In this Chapter it is to be assumed m the absence of wordsindicating the contrary that where several promises are referredto, promises of the same performance not merely similar perform-ances are intended.ANNOTATIONHudnall v. Penntngton &- Co., 136 W 155, 239 P 2 (1925), held that amarketing plan by which growers pool their products for sale through theagency of a corporation is not a joint venture making each member respon-sible to the corporation for its dealings with other members where thecorporation obligated itself to furnish each grower with a complete item-ized statement of his account.Section 114. Two OR MORE PROMISORS MAKING SEPARATEPROMISES AND ALSO A JOINT PROMISE.Where two or more parties to a contract promise thesame performance to the same promisee in such words asapart from other promises made by them would bind themjointly, and in the same contract promise separately thatthis performance shall be rendered, they are jointly and sev-erally bound.ANNOTATIONPartners who each sign a contract personally are severally as well asjointly liable therein, Barbo v. Norris, 138 W 627, 245 P 414 (1926).Section 115. A PROMISE IN THE FIRST PERSON SINGULARSIGNED BY SEVERAL PERSONS.Where a promise in a written contract is expressed in thefirst person singular, but the contract is signed by severalpersons, they are jointly and severally bound in the absenceof express words in the instrument to the contraryANNOTATIONThe Washington statute is in accord with this section.Remington's Comp. Stat., Sec. 3408 (7) provides: "Where an instru-ment containing the words 'I promise to pay' is signed by two or morepersons, they are deemed to be jointly and severally liable therein."Section 116. JOINT INDORSERS.Joint payees or joint indorsees of a negotiable instrumentwho indorse the same are jointly and severally bound inthe absence of express words in the instrument to the con-traryCommenta. This rule, which is an exception to the general rule of Section112, is established by Section 68 of the Negotiable Instruments LawThe statute is in force throughout the United States.ANNOTATIONThe Washington statute is identical with this section."Joint payees or joint indorsees who indorse are deemed to indorsejointly and severally" Rem. Comp. Stat., Section 3459.'*The annotations to this Chapter were prepared in memorandumform by the late Professor Harvey Lantz of the University of Wash-ington Law School. His notes were arranged for publication by DeanHarold Shepherd and Warren Shattuck.

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The American Law Institute\u27s Restatement of the Law of Contracts with Annotations to the Washington Decisions

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