delay, and the creditor grants it, but before the fortnight expires he issues a writ. The debtor cannot legally complain. If he sets up as a defence the promise by the creditor to give further time, the answer will be that as the debtor was legally bound to pay at once, he gave nothing in return for the promise to wait, and therefore the promise of the creditor was not binding. On the other hand, if the debtor had given something for the extra time, then there would have been a valid contract.

(c) The consideration must not be so vague that it would be impossible for a court to enforce it.

(d) The consideration must be lawful.

A.

The promise to do an unlawful act will not be a good consideration. And if any part of the consideration is illegal, it generally renders the whole transaction illegal (§ 75). (e) The consideration must not be a past benefit. This rule may be best explained by an illustration. purchased a horse from B. At a subsequent time A. inquired if the horse was sound, and B. thereupon gave A. a warranty of soundness. In other words, B. entered into a contract with A. to the effect that he warranted the soundness of the horse. Such a warranty was not binding, inasmuch as A. gave B. nothing-no consideration for it. Had the warranty been given at the time of the sale it would have been binding as part of the transaction.

§ 72. Waiver of Exemption from Liability.—A debtor, as we have seen, is not bound to pay a debt after six years have expired. The debtor may, however, waive his right, and if he promises to pay the debt after the six years have expired, he will be bound by his promise. Some writers think this promise is to be regarded as based on a consideration already received.

§ 73. Proof of Consideration. The plaintiff who is trying to enforce a simple contract must show that he gave some consideration to the defendant in respect of the defendant's promise. The holder of a bill of exchange is not bound by this rule. If he is suing another party on the bill, the burden of showing that no consideration was given lies on the defendant.

D

CHAPTER IV

THE LEGALITY OF THE AGREEMENT

The
In

§ 74. Introductory.—We have seen that an agreement, to be enforced as a contract, must not be unlawful. question then arises, What agreements are unlawful? answering this question no attempt will be made to enumerate all the various kinds of unlawful agreements, as it will be sufficient for the purposes of this work if attention be directed to the leading unlawful agreements relating to trade.

§ 75. Where the Object is Unlawful.-An agreement for an unlawful purpose is void. An unlawful purpose is one that is prohibited by law. It is unlawful, for instance, to sell goods to be shipped in a prohibited trade, or to sell beer to be retailed without a license. In all such cases the seller, if not voluntarily paid for the goods, cannot recover the price. Upon the same principle money lent for an illegal purpose cannot be recovered.

§ 76. Where an Insurer has no Interest in the Policy. -An insurance of a ship where the insurer has no interest in the ship is void. The object of this rule is to prevent insurances being entered into by way of wager.

The same principle is applied to life and fire insurance. A man may insure his own life, but he cannot insure the life of another unless he has an "interest" in such life at the time of effecting the insurance; and only a person who has an interest in property can insure it against loss by fire (§ 164).

§ 77. Where Goods are sold on Sunday.—By a statute

passed in the reign of King Charles II., tradesmen are prohibited under a penalty from exercising any business on Sunday. An action cannot be brought upon an agreement made in violation of the statute, and hence where a horsedealer bought a horse with a warranty on Sunday, he could not sue for breach of warranty (§ 147). In order that the statute may apply, the agreement must be one made in the course of the ordinary business of the tradesman. If, however, goods be sold on Sunday, and both parties carry out the agreement, the property in the goods will pass to the buyer.

§ 78. Where Goods are sold by Improper Weights or Measures.-By the Weights and Measures Act of 1878 all agreements for work or goods agreed for by weight or measure are, in the absence of any agreement to the contrary, to be regarded as made with reference to the imperial weights and measures, and if not so made, they are to be void. But the weights and measures of the metric system may be used in agreements.

§ 79. Where certain Goods are not sold in accordance with Law.-Dead game killed in this country can be sold only during a certain time of the year by licensed dealers.

Intoxicating liquors can be sold only in licensed premises. The retailer of spirituous liquors is prohibited from taking any pledge for the payment of the price, and as a rule the retailer of all kinds of intoxicants is unable to sue for the price.

Coal must be sold by the weight, and a weight ticket be delivered to the buyer with any quantity over two hundredweight; otherwise a penalty is incurred, and the seller cannot recover the price. Bread, except fancy bread, must also be sold by weight if the purchaser so desire.

§ 80. Where the Agreement is in restraint of Trade. -As a general principle a trader is entitled to carry on a lawful business at his own discretion and in his own way, and any agreement to the contrary is void. Hence where a number of manufacturers agreed to regulate the wages and hours of work of their employees, and to manage their

establishments in accordance with the views of the majority, it was held that this agreement, being in restraint of trade in so far as it deprived each one from controlling his own business, was not enforceable.

It is, however, not unlawful for a number of trades to agree to share the trade between them in such a way as to prevent competition, at least so long as there are no unreasonable restraints placed upon the parties.

The law permits agreements to be entered into that appear to be in a partial restraint of trade, on the ground that ultimately trade will be benefited. The chief agreements of this kind relate to the sale of a business.

After the sale of the goodwill of a business the seller, in the absence of any contract to the contrary, is free to carry on a similar trade, and to solicit his former customers in the usual way of business. In order to prevent the seller taking this course, it is usual to insert in the document by which the sale is effected a stipulation or contract restraining the seller from trading within such limits as regards place and time as are reasonably necessary for the protection of the business the buyer has acquired.

A restraint unlimited as regards space is generally held to be unreasonable. For example, a covenant by a brewer not to carry on the business of a brewer elsewhere was held unreasonable. On the other hand, covenants by a milkman not to set up in business within five miles for two years, and of a butcher not to carry on the same trade within five miles, were held reasonable. The custom of the trade is an important element in determining what is reasonable.

A restraint reasonably limited as to space may, in some cases, be unlimited as to time, inasmuch as this may be necessary to secure him the full enjoyment of that which he has bought. Hence the seller may agree not to carry on a similar business during his life.

The agreement must be founded on a valuable consideration, but the amount of the consideration is immaterial.

Similar principles are applied to agreements by which a retiring partner binds himself not to compete with the firm,

or by which a servant or agent undertakes not to compete with his employer after the period of employment has ended.

§ 81. Where the Agreement is a Fraud on Creditors. —All agreements made for the purpose of defrauding third parties are void. If therefore a debtor who is insolvent enters into an arrangement with his creditors that they will accept part payment of all debts due in full discharge of such debts, he is not allowed to favour one creditor at the expense of the others. A creditor who stipulates with the debtor for a preference in favour of himself cannot enforce such agreement.

§ 82. When the Agreement is in Fraud of the Bankrupt Laws. Any agreement on the part of the creditors of a bankrupt, or of the bankrupt himself, tending to interfere with the just application of the bankrupt law is illegal and void. An agreement by a creditor not to oppose the bankrupt's discharge, or an agreement interfering with the equal distribution of the assets, is void. So too is an agreement buying the vote of a creditor in the interests of the bankrupt.