All contracts may be put into three classes, and each of these will be briefly explained. First, sealed and unsealed contracts. What do we mean by a contract that is sealed? It is one to which the person who signs it adds, after his name, a seal. But what is a seal? It may consist of sealing-wax, stamped in a peculiar manner, or a wafer made of sealing-wax, or a paper wafer. In the olden times when people could hunt and fight but were not able to write their names, they put a seal at the end of a contract made by them; in other words, the seal supplied the place of a name. Each person's seal differed from the seal of every other. It had its origin really in the ignorance of the people. As they were unable to write their names these distinct signs or marks, called seals, were put on instead of their signatures.
With the changes brought by time the form of this device or seal, required by law, is much simpler than it was centuries ago. Indeed, in every State persons use the letters "L. S.," with brackets around them, instead of a seal. They mean "the place of a seal," and are just as good in every way as any kind of seal that might be used. Here are two of the forms of seals in most common use:
Any contract that has a seal after the name of the signer is a sealed contract, and every other is called an unsealed, oral, or verbal contract. If a contract was written and a seal was added after the signer's name, and there was another exactly like it in form, but without a seal, this would be called an unsealed or verbal contract, and in law would differ in some important respects from the other. This is true in every State except California, where the difference between sealed and unsealed contracts is no longer known.
The second class of contracts are called express and implied contracts. By an express contract is meant one that is made either in writing or in words. But the reader may ask, Are not all contracts of this kind? By no means. Many contracts exist between people which have not been put into words. Suppose A should ask B for employment and it should be given to him, but no word should pass between them about the price to be paid. The law would imply that B must pay him whatever his work was reasonably worth. If A should come at the end of the week for his pay and B should say to him: "I never made any bargain with you concerning the price, and I am unwilling to pay you anything," A could, if he understood the law, say to B: "You told me to work, and the law implies that you must pay me whatever my work is worth." How much would the law give him for his work? Just what the employer was paying other men for the same kind of work.
Another class of contracts are called executed and executory. An executed contract is one that is finished, done, completed. If I should go into a store and ask the price of a book and say to the salesman, "I will take it," and give him the money, and take the book with me, this would be an executed contract. An executory contract is one that is to be completed. Suppose the salesman did not have the book and I should say to him, "Please get it for me and I will come in next week and pay you for it," this would be an executory contract; and it would remain so until I came in and got the book, as I had promised to do, and paid the price.
These are the three most general classes of contracts made by persons in daily life. Almost all persons make contracts of each kind during their lives. Sealed contracts are not as common as unsealed ones, yet they are frequently made. Every deed for the sale of land or lease for the use of it is a sealed contract.
II. THE PARTIES TO A CONTRACT
To every contract there must be two or more persons or parties. When Robinson Crusoe was on his island all alone, eating breadfruit and entertaining himself by throwing stones at the monkeys, he perhaps had a good time, but he could not make any contracts. But as soon as Friday came along they could make contracts, trade, and cheat each other as much as they pleased. A contract, therefore, is one of the incidents of society. A person sailing in a balloon alone could not make a contract, but if two were in the basket they might amuse themselves by swapping jack-knives or neckties, and these exchanges would be completed or executed contracts and would possess, as we shall soon see, every element of a contract.
Again, persons must be able, or competent, to make contracts. What kind of ability or competency must a person have? Not every person can make a contract, even though he may wish to do so. A minor, or person less than twenty-one years of age, though he may be very wise and weigh perhaps two hundred and fifty pounds, can make very few contracts which the law regards as binding. In fact, the only contracts that a minor can make for which he is bound are for necessaries—clothing, food, and shelter. Nor can he make contracts even for these things in unlimited quantities. A minor could not go into a store and buy six overcoats and bind himself to pay for them. The storekeeper must have common sense in selling to him and keep within a reasonable limit. In one of the well-known cases a minor bought a dozen pairs of trousers, half a dozen hats, as many canes, besides a large supply of other things, and, refusing afterward to pay the bill, the merchant sued him, and the jury decided that he must pay. The case, however, was appealed to a higher court, which took a different view of his liability. The judge who wrote the opinion for the court said that the merchant must have known that the minor could not make any personal use of so many trousers, canes, and hats, and ought not to have sold him so many. In short, the court thought that the merchant himself was a young minor in intelligence and ought to have known better than to sell such a bill to a person under age.