One or two more illustrations will be useful.  A promises to deliver, and B promises to accept and pay for, certain goods at a certain time and place.  When the time comes, neither party is on hand.  Neither would be liable to an action, and, according to what has been said, each has done all that he promised to do in the event which has happened, to wit, nothing.  It might be objected that, if A has done all that he is bound to do, he ought to be able to sue B, since performance or readiness to perform was all that was necessary to give him that right, and conversely the same might be said of B. On the other hand, considering either B or A as defendant, the same facts would be a complete defence.  The puzzle is largely one of words.

A and B have, it is true, each performed all that they promised to do at the present stage, because they each only promised to act in the event of the other being ready and willing to act at the same time.  But the readiness and willingness, although not necessary to the performance of either promise, and therefore not a duty, was necessary in order to present a case to which the promise of action on the other side would apply.  Hence, although A and B have each performed their own promise, they have not performed the condition to their right of demanding more from the other side.  The performance of that condition is purely optional until one side has brought it within the [322] scope of the other’s undertaking by performing it himself.  But it is performance in the latter sense, that is, the satisfying of all conditions, as well as the keeping of his own promises, which is necessary to give A or B a right of action.

Conditions may be created by the very words of a contract.  Of such cases there is nothing to be said, for parties may agree to what they choose.  But they may also be held to arise by construction, where no provision is made in terms for rescinding or avoiding the contract in any case.  The nature of the conditions which the law thus reads in needs explanation.  It may be said, in a general way, that they are directed to the existence of the manifest grounds for making the bargain on the side of the rescinding party, or the accomplishment of its manifest objects.  But that is not enough.  Generally speaking, the disappointment must be caused by the wrong-doing of the person on the other side; and the most obvious cases of such wrong-doing are fraud and misrepresentation, or failure to perform his own part of the contract.

Fraud and misrepresentation thus need to be considered once more in this connection.  I take the latter first.  In dealing with it the first question which arises is whether the representation is, or is not, part of the contract.  If the contract is in writing and the representation is set out on the face of the paper, it may be material or immaterial, but the effect of its untruth will be determined on much the same principles as govern the failure to perform a promise on the same side.  If the contract is made by word of mouth, there may be a large latitude in connecting words of representation with later words of promise; but when they are determined to be a part of the contract [323], the same principles apply as if the whole were in writing.