CONTRACTS, LEASES, AND GUARANTEES
The law books define a contract to be "An agreement between two or
more persons to do or not to do a certain stated thing or things,
for a consideration."
The consideration is a vital part of every contract.
There can be no binding contract without a consideration.
The other requisites of a contract are--
1. It must be possible of accomplishment.
2. It must be in accordance with law.
3. Its performance must not injure the public.
4. The parties to a contract must be competent to do the things to
which they pledge themselves.
5. A drunken or an insane man cannot make a contract.
6. All parties to a contract must be agreed.
THE CONSIDERATION
No contract can be held as binding where the consideration is not
named.
A promise, verbal or in writing, to do something for a certain
party, cannot be enforced.
A promise to do the same thing for a stipulation named is a
contract and may be enforced.
A gift is not a form of contract. Once made it cannot be legally
taken back.
WRITTEN AND VERBAL CONTRACTS
There are certain forms of contract which cannot be legally
enforced, unless they are in writing.
1. All contracts for the sale of real estate.
2. Contracts that are not to be performed for a year or more.
3. All contracts, to answer for the debt and obligations of
another, must be in writing.
If the contracting parties put but a part of their agreement in
writing the law will recognize only the written part. The whole
must be in writing, or the agreement will not hold.
Verbal contracts are not safe.
Although the law does not require even contract to be in writing,
yet, as it never declares that a contract must be verbal, it is
the part of prudence, wherever possible, to put every contract in
writing.
Owing to defects of memory even honest men may, and frequently do,
disagree as to the terms of a verbal contract.
Because the party with whom the contract is made is a close
friend, one is apt to depend on a verbal agreement, but the closer
the friend or relative, the more reason there is for an exact
written contract, if we would keep the friend.
FORMS OF CONTRACT
The law is never specific as to the form of contract that may be
used.
It is not necessary to draw up the contract with the formal
accuracy of a real estate deed.
Any one with good sense and a fair common school education can
draw up a contract that will hold.
Know what is required, then state the facts simply.
Contracts need not be sworn to or even witnessed.
KINDS OF CONTRACT
Every note, mortgage and other form of obligation is a specific
contract.
A lease is a form of contract between two people, known as
landlord and tenant, for the use of real estate for a period and
at a rental specified in the document.
A verbal lease may be made for a short period, but if for a year
or more, it must be in writing.
A lease should state when, where and to whom the rent is to be
paid.
Each party to a lease, or other form contract should have a copy.
If the premises rented should become unusable by fire or any
action of the elements the tenant is still liable for rent, unless
there is a special clause in the lease providing for such a
contingency.
A tenant cannot, without the written consent of the landlord, use
the rented premises for any other purpose than that stated in the
lease.
AS TO REPAIRS
In some states the law compels the landlord to keep the premises
in habitable repair, but this does not seem to be the rule. It
should be decided, where there is doubt, before signing the lease.
Where it is agreed that the landlord shall keep the premises in
repair, and, after due notice of the fact, he fails to do so, the
tenant may himself make the repairs and deduct the amount from the
rent.
SUBLETTING
If there is no contract to the contrary, the tenant may sublet the
whole or any part of the premises, but this does not release him
from liability for rent.
If the tenant fails to leave the property when his lease has
expired, the owner may make his demand through what is known as a
"notice to quit," which must be served on the tenant in person.
WHAT IS A GUARANTY?
A guaranty is sometimes required to insure the payment of rent.
Plainly, a guaranty is an agreement to assume, under certain
conditions, the liabilities of another.
If a man makes a contract, a lease, or a note, and his personal
resources are not deemed sufficient to secure his performance of
the things agreed to, the other may require that some one, in whom
he has more faith, shall give him a guaranty, or personal security
in writing.
The following might be used as the form for a guaranty for a
lease, contract, note or other obligation of contract:
"For value received, I hereby guarantee
the payment of the within lease (bond or
contract). George L. Roberts."
Short Hills, N. J.
October 1, 1910.
A BILL OF SALE
This is a written agreement by which one person transfers to
another his interest in certain personal property.
The law lays down no rule as to the form.
A bill of sale usually passes where the property paid for is not
immediately removed from the possession of the seller.
This form would answer in any state:
"Bridgeport, Conn., Aug. 2, 1910.
"I have this day sold to Calvin E. Platt,
of New Haven, in this state, my team of
bay horses, with their harness, one family
carriage, and a two-seated cutter.
"Thomas P. Fletcher."
Be sure, where the bill of sale includes many articles, to name
every one of them in the bill.
If paid for, whether by cash or a note, be sure to get a receipt
for the same.
OBLIGATIONS
A bond is a form of obligation.
Every enforcible bond must be in writing and under seal.
The maker of a bond by the act acknowledges a liability in the
form of a debt or a duty.
The maker of a bond is the "obligor."
The party to whom it is made is the "obligee."
The bond names the liability or indebtedness; then follows the
condition wherein it is stated the particular thing that the
obligor is to do, or not to do.
The penalty for the non-compliance with a bond is twice the amount
of the money involved.
It is often required that the bond shall be further guaranteed by
one or more sureties. These sureties may be required to certify
that they are worth a certain sum, free and clear of all
indebtedness.
Persons holding positions of financial trust, whether public or
private, may be, and most of them are, required to furnish bonds
for the faithful performance of their duties.
In the larger cities there are casualty and liability companies,
which, for a fixed or annual consideration, act as sponsors on
official and other forms of bond.
Where there are no such companies, as those just named, then
private citizens of known responsibility must be secured to go on
the bond.
In every case the amount of the bond or security is measured by
the responsibilities of the man from whom it is required.