Perth Amboy evening news., 1920-12-17
sANCTITY OF CONTRACTS.

has Just handed down a decision competing
consignees in twenty-four sugar cases to pay
twenty-five cents a pound for sugar which they
had agreed to purchase at that price, but had
refused to accept on its arrival after the market
had slumped TO less than ten cents. The judge
held that the contract was binding and must be
lived up to regardless of the condition of the
market after the contract had been signed.
In a speech delivered before the Business
Mems Republican Club in New York recently
Vice President-elee Coolidge laid great stress
on the necessity of business men living up TO
their moral obligations. He cited wholesale
cancellations of orders during the late summer
and early fall as an example of the avoidance
of moral obligation by business men seeking
their own profit at the expense of justice to
others.
1t is a notorious fact that the primary cause
of the closing down OF a great many mills in
the textile trade and other lines as well. was
the food of cancellations Of contracts which
were received by the mills. Factories in all
parts OF the country which were running full
time with orders far in advance to be filled and
which had bought UP large quantities of raw
material in order to fill these contracts, sudden
ly found themselves without any orders at all
to speak of. A general curtailment all along
the line was the result.
But there Is another side to the story. Con-
tracts ought to be recognized as contracts, to
be sure, and the honest business man will en-
deavor to live up to his contracts regardless
OF what it may cost him. But it is only fair
that any contract drawn should equally binding
to both sides. It cannot be said that this is
always the case.
Many firms depend on a certain product as
the basis of the article they manufacture. The
maker of this certain product knows how abso-
lutely the firm buying from him depends on this
material. In many instances there are work
ing agreements between those who supply this
basic material so that it is more or less diff
cult for the firm that is in the market for a
certain product to shop around among the
trade for the best place to buy. The material
may be scarce and he has got to take 1t from
certain parties or go without.
But these certain parties insist on a contract
being made before they will furnish any OF the
necessary material. This contract is worded
in such a way that it is all one-sided. The
buyer is compelled to take the product whether
he wants 1t or not. just as Justice Cohalan has
ruled in the recent sugar cases, but there are
usually all kinds of clauses in the contract
that make it possible for the party who is to
furnish the goods to refuse to produce the ma
terial as agreed. There is a strike clause. a
bad weather" clause and numerous other
clauses. even including one which provides that
he it not bound to furnish the goods il "any
unforeseen things" happen that might prevent
him from delivering the goods.
OF course. If he wants to LAY down" on his
contract ba cap offar n or tbo o.bor 90 +baao
excuses and the man who signed up has no
redress. On the other hand, the buyer is COM
PEELED to live up to his side of the contract
whether he finds it convenient to do so or not.
There are no loop holes for him to crawl out
of. He had no alternative, however, but to sign
because otherwise he will not be able to get
his basic material at all.
1t is largely because so many OF these one
sided contracts have been forced on the bust
ness men that they do not hesitate to cancel
them when they feel like it. taking their chances
with being sued in the courts.
What is needed is an honest contract that
will be binding on both sides. If the man who
is to supply the material is going to bind the buyer
down so that he has to take the material
whether he later finds it convenient to do so or
not, then the contract should be equally bind
ing on the man who presents the contract COM
pelling him to furnish the goods in some way
or another regardless of what he may be up
against in order to comply with his agreement.
There is no doubt about the need of a re-
form in the business world regarding the moral
obligation bound up in a contract between two
parties. AS a large agency dealing in con-
tracts recently said: I'VE do not regard the
American business structure as unsound, or
business men as a rule dishonest or dishonor-
able. but it is apparent 10 every thinking per-
son that the sanctity of contracts is the cor
nerstone of business and unless we are content
TO see anarchy in the business world. this ten
dency to disregard the integrity of a contract
must be corrected"
The only way that it can be corrected, how
ever, is to make the contract so that it is equal
ly binding both ways. or equally elastic for both
contracting parties. The person insisting that
a contract be signed should not be allowed to
take unfair advantage of his customer because
he knows that the customer cannot get along
without him.
The experienced father is not deceived by
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