II.—The effect of the declaration that “no action shall be brought,” &c.
III.—The proviso in favour of a subscription or contribution to a prize.
I.—Contracts by way of gaming.
I.—Under this heading the following topics are of importance.
Consensus ad idem.
(1) There must be a consensus ad idem by both sides to the agreement, and that consensus must relate to an agreement, which of itself constitutes a wager. It is not sufficient that one of the parties should have it in his mind to speculate or gamble, terms which are used metaphorically and are inclined to be misleading: it is essential that the other party should be privy to and assist in the intent to wager. It is of great importance to bear this in mind in dealings on the Stock Exchange, where a purchaser may simply buy for the purpose of selling again, receiving the difference in price in case of a rise. The vendor is probably entirely ignorant of the purchaser’s ultimate intentions. If this is so the contract cannot be in the nature of a wager, as is dearly laid down in Marten v. Gibbons[[95]] and Thacker v. Hardy.[[96]]
One must win, the other must lose.
(2.) It is essential to a wager-contract that “one party should win and another should lose upon a future uncertain event.... Some transactions, however, on which the parties may win or lose upon a future uncertain event, are not within 8 & 9 Vict., c. 109; for instance, the sale of next year’s apple crop, in which the parties may be losers or winners, but the essential element of a wager-contract is wanting.”[[97]]
It is probable that the Lord Justice did not mean this to be an exhaustive definition of a wager, as it seems to omit one important requisite, viz., mutuality. |Mutuality necessary.| If a man promises to give his wife a new ball dress if the gold mine pays a 10 per cent. dividend for the current half-year, this would scarcely be a wager, as the wife would not stand to lose anything. That this is the ordinary understanding on the subject is clear from the fact that by the “Rules of Betting” it is no bet unless there is a possibility for each to lose as well as to win. Under the old law, when wagers were enforceable, one party could not have sued the other unless the other would have been able to sue him. In Blaxton v. Pye[[98]] the plaintiff laid odds of 14 to 8 against a horse to the defendant. By the then law no greater sum than £10 could be recovered on a wager, so that the defendant could not have sued the plaintiff if the horse had won. The horse lost, but held that the plaintiff could not recover the £8 on the ground of want of mutuality.[[99]]
(3.) It is, however, clear that not every contract which contains the element of mutual promises to pay is a wager. A builder agrees with an owner of land to build a house by a certain date, he to be paid £1,000 on completion; in default, he to pay £100 by way of penalty. This would not seem to be a wager. On the other hand, if A promises to pay B £100 if the house be finished by the time fixed, and B promises to pay £100 if it is not, both A and B being independent of the building contract, this would appear to be a wager. It is submitted that the true test is that in a wager the sole elements of the contract must be made up of the reciprocal promises to pay on the happening of given alternative contingencies.[[100]] A promises to pay B on the happening of contingency x, B promises to pay A on the happening of contingency y; y, of course, may be negative, such as the non-happening of x. The difference between the two is illustrated by an ordinary bet on a horse race. A backs a horse with B; B is popularly said to “lay against” the horse, i.e., to back the negative contingency of the horse not winning. As a matter of fact, “the layer” backs “the field.”[[101]] Each event or contingency must, of course, be uncertain, or, at all events, unknown to the parties, that is, it represents a chance, and where the chances are agreed to be uneven the inequality is represented by odds. It must not, however, be supposed that a wager necessarily embodies the backing of conflicting opinions; the parties back their respective chances or contingencies, not their opinions on them, e.g., a man backs a horse for a race at a long price: if the horse goes to a much shorter price, he will very likely hedge by backing the field against him, though feeling certain that he will win. (See Appendix C.)