An executed contract is one which is performed. A promises to sell his bicycle to B for fifty dollars ($50.00); B pays the fifty dollars ($50.00) to A and receives the bicycle. This contract is executed.
A contract may be executed as to one party and executory as to the other. If A agrees to sell and deliver his team of horses to B for five hundred dollars ($500.00) and B pays A five hundred dollars ($500.00) but A does not deliver the team to B, the contract is executed as to B and executory as to A.
12. Contracts of Infants. A person under legal age is known in law as an infant. The legal age is fixed by statute in the different states. In most states this age is twenty-one for males and eighteen for females. In some states the legal age for females is under eighteen in case of marriage.
An infant's contracts are voidable. Voidable does not mean that the contract is illegal. It is not contrary to law for an infant to make contracts. He may lawfully make them. The law will not compel him to carry them out. He may carry them out voluntarily if he chooses.
A competent party, contracting with an infant cannot avoid the contract on the general ground of the infancy of the other party to the contract. The infant, however, may avoid the contract by reason thereof.
An infant may ratify his contract after becoming of legal age. This ratification is effected by the infant's accepting benefits under the contract after attaining his majority. Ratification may also be effected by an infant after he has reached his majority by promising to carry out the contract. To have such a promise amount to a ratification the infant must make the promise with knowledge that he may avoid the contract if he chooses.
An infant is liable on his contracts for necessaries. Necessaries is a variable term, depending upon the social position of the infant. Those articles essential to the health and sometimes to the comfort of the infant are considered necessaries. Food and clothing are the most common examples. A person selling an infant necessaries, cannot recover in excess of their reasonable value regardless of the contract price, and cannot recover at all, if the infant is already supplied. Most courts hold that a party selling necessaries to an infant must determine at his peril that the infant is not supplied. Articles which would be luxuries for one infant, might be necessaries for an infant accustomed to wealth.
An infant is not entitled to his wages unless he has been emancipated. The father or guardian is entitled to the wages. Emancipation may be by written declaration to that effect, on the part of the father. It may also be implied from the refusal or failure on the part of the father to treat the infant as his child.
13. Novation and Contracts for the Benefit of Third Persons. If A owes B one hundred dollars ($100.00) and B owes C one hundred dollars ($100.00), the three parties may agree that A may pay C one hundred dollars ($100.00), discharging the indebtedness of both A and B. This contract is valid in law, and is called novation.
Much of our common or unwritten law was taken from the common law of England. The common law of England did not permit a third party, for whose benefit a contract was made, to enforce the contract. For example, if A and B enter into a contract by which A is to pay C some money, C cannot enforce the contract. This kind of a contract is commonly known as a contract for the benefit of a third person. With a few exceptions, the states of this country refuse to follow the English doctrine. The general American doctrine is that a third party may enforce a contract made for his benefit. For example, A, a furniture dealer was indebted to B for a bill of goods; C purchased A's business, and in a formal written contract, as part of the consideration, agreed to pay B the amount of A's bill. After the transfer of the business, A became insolvent and B, learning of the contract between A and C, sued C thereon and was permitted to recover. The general American doctrine will not permit two parties, making a contract for the benefit of a third, to rescind or avoid the contract after the third party has been notified of it, and has assented thereto. Of course, two parties cannot bind a third party to perform any condition of a contract without his consent. This would violate some of the fundamental principles of contracts. There would be no consent, no meeting of the minds, and sometimes no consideration.