5. United States notes, except for duties on imports, and interest on public debts.
Silver certificates, bank notes and private checks are not legal tender.
32. Discharge of Contract by Subsequent Agreement. Contracts may be terminated by another contract, made after the contract in question has been entered into. For example, A promises to construct, within one year, a house according to certain plans, for B. B promises to pay A five thousand dollars ($5,000.00), upon completion of the house. A completes the excavation of the cellar and B fails in business, and desires not to have the house constructed. He offers A five hundred dollars ($500.00), for the work already done, and to release him from his obligation. A accepts B's proposition. The original contract has been terminated by the subsequent one.
33. Warranty and Remedies for Breach of Warranty. A warranty is a contract collateral to the principal contract, by which a party to a contract specifically covenants certain things. Warranties apply especially to sales of personal property. (See warranty under Sales of Personal Property.) A promises to build a house for B and warrants the paint to stand untarnished and uncracked for one year. The covenant on A's part relating to the paint is a warranty.
Breach of warranty ordinarily does not entitle the other party to rescind the contract. That is, it does not permit him to refuse to carry out his part of the contract, but entitles him to bring an action for damages, for its breach.
34. Recission and Discharge of Contracts by Breach. If a party fails or refuses to carry out a provision of a contract, he is said to have committed a breach of contract. When one party to a contract commits a breach, the other party may accept the breach and sue for damages, or he may refuse to accept the breach and wait until the time for complete performance arrives, and then, if the other party has not performed, sue for damages.
When a party to a contract commits a breach, and notifies the other party of his refusal further to carry out the contract, the other party cannot increase the defaulting party's damages by continuing performance thereafter. For example, A contracts with B to have a fence finished and erected around A's house. After B has half of the fence manufactured and erected, A refuses to go on with the contract. B cannot increase the damages by manufacturing and erecting the balance of the fence. The reason for this is that it would not benefit B at all, but would merely injure A. B is entitled to recover his profit for the entire job, when A breaks the contract. He could recover no more by manufacturing and erecting the balance of the fence.
The law does not recognize trivial things. A party cannot claim breach of contract for failure of the opposite party to a contract, to perform an unimportant thing. The law recognizes substantial performance as actual performance. This does not mean that a party cannot put such terms in a contract as he chooses, but means that, in the absence of any provisions of the contract to the contrary, a party is not presumed by law to contract for trivial things. Time of performance is an illustration of this principle. A contracts with B for the building of a house. B promises to complete it in one year. If completed in one year and a day, there is a substantial performance, unless the contract expressly shows that the precise day of performance was regarded as important.
Where contracts provide for separate performances, a failure or refusal to fulfil one performance will not always amount to a refusal or failure to perform the balance. A agrees to ship B five thousand barrels of cement, in car load lots of one hundred and fifty barrels each to be shipped each week. B receives and refuses to pay for the first car. This may not amount to a breach of the entire contract, so as to justify A in refusing to ship the balance. The tendency of American courts, however, is to treat this as as one contract; that is to treat the promises as dependent, and not independent.