Title 9 — Contracts and Obligations

In this title, unless the context or subject matter otherwise requires: 1. A contract is an agreement to do or not to do a certain thing. 2. An obligation is a legal duty by which a person is bound to do or not to do a certain thing.

It is essential to the existence of a contract that there should be: 1. Parties capable of contracting; 2. The consent of the parties; 3. A lawful object; and 4. Sufficient cause or consideration.

An executed contract is one, the object of which is performed fully. All other contracts are executory.

A promise is presumed to be joint and several when: 1. All the parties thereto receive some benefit from the consideration, whether past or present; 2. It is made in the singular number but executed by several persons.

An obligation arises from: 1. The contract of the parties; or 2. The operation of law. An obligation arising from operation of law may be enforced in the manner provided by law or by civil action or proceeding.

An obligation imposed upon several persons, or a right created in favor of several persons, may be: 1. Joint; 2. Several; or 3. Joint and several.

An obligation imposed upon several persons, or a right created in favor of several persons, is presumed to be joint and not several, except in the special cases mentioned in chapter 9-07. This presumption in the case of a right can be overcome only by express words to the contrar…

A party to a joint obligation or to a joint and several obligation who satisfies more than that party's share of the claim against all obligors may require a proportionate contribution from all the parties joined with that party.

An obligation is conditional when the rights or duties of any party thereto depend upon the occurrence of an uncertain event.

Conditions may be precedent, concurrent, or subsequent.

A condition precedent is a condition which is to be performed before some right dependent thereon accrues or some act dependent thereon is performed.

Conditions concurrent are those which are mutually dependent and are to be performed at the same time.

A condition subsequent is a condition referring to a future event, upon the happening of which the obligation becomes no longer binding upon the other party if that party chooses to apply that condition.

A condition in a contract, the fulfillment of which is impossible or unlawful within the meaning of chapter 9-04 or which is repugnant to the nature of the interest created by the contract, is void.

A condition involving a forfeiture must be interpreted strictly against the party for whose benefit it is created.

Before any party to an obligation can require another party to perform any act under it, that party shall fulfill all conditions precedent thereto imposed upon that party and must be able, and shall offer, to fulfill all conditions concurrent so imposed upon that party on the lik…

If an obligation requires the performance of one of two acts in the alternative, the party required to perform has the right of selection, unless it is provided otherwise by the terms of the obligation.

If the party having the right of selection between alternative acts does not give notice of that party's selection to the other party within the time, if any, fixed by the obligation for that purpose, or, if none is fixed, before the time at which the obligation ought to be perfo…

The party having the right of selection between alternative acts shall select one of them in its entirety and cannot select part of one and part of another without the consent of the other party.

If one of the alternative acts required by an obligation is such as the law will not enforce, or if it becomes unlawful or impossible of performance, the obligation is to be interpreted as though the other stood alone.

1. The marketing, selling, offering for sale, issuing, making, providing, or proposing to make and the administering of a property service contract or vehicle theft protection product warranty is not subject to the provisions of title 26.1. 2. A property service contract is a con…

Redesignated as section 17-04-01 under S.L. 2007, ch. 204, § 5.

All persons are capable of contracting except minors and persons of unsound mind.

Minors and persons of unsound mind have only such capacity as is specified in statutes relating to such persons.

It is essential to the validity of the contract, not only that the parties should exist, but that it should be possible to identify them.

A contract made expressly for the benefit of a third person may be enforced by that person at any time before the parties thereto rescind it.

The consent of the parties to a contract must be: 1. Free; 2. Mutual; and 3. Communicated by each to the other.

A consent which is not free is not absolutely void, but may be rescinded by the parties in the manner prescribed by chapter 9-09.

An apparent consent is not real or free when obtained through: 1. Duress; 2. Menace; 3. Fraud; 4. Undue influence; or 5. Mistake.

Consent is deemed to have been obtained through duress, menace, fraud, undue influence, or mistake only when it would not have been given except for one or more of them.

Duress consists in: 1. Unlawful confinement of the person of a party to a contract, of the husband or wife of such party, or of an ancestor, descendant, or adopted child of such party, husband, or wife; 2. Unlawful detention of the property of any such person; or 3. Confinement o…

Menace consists in a threat: 1. Of unlawful confinement of the person of a party to a contract, of the husband or wife of such party, or of an ancestor, descendant, or adopted child of such party, husband, or wife, or of confinement of such person, lawful in form but fraudulently…

Fraud is either actual or constructive.

Actual fraud within the meaning of this title consists in any of the following acts committed by a party to the contract, or with the party's connivance, with intent to deceive another party thereto or to induce the other party to enter into the contract: 1. The suggestion as a f…

Constructive fraud consists: 1. In any breach of duty which, without an actually fraudulent intent, gains an advantage to the person in fault or anyone claiming under that person, by misleading another to the other's prejudice or to the prejudice of anyone claiming under the othe…

Actual fraud is always a question of fact.

Undue influence consists: 1. In the use, by one in whom a confidence is reposed by another or who holds a real or apparent authority over that person, of such confidence or authority for the purpose of obtaining an unfair advantage over that person; 2. In taking an unfair advanta…

Mistake may be either of fact or of law.

Mistake of fact is a mistake not caused by the neglect of a legal duty on the part of the person making the mistake and consisting in: 1. An unconscious ignorance or forgetfulness of a fact, past or present, material to the contract; or 2. Belief in the present existence of a thi…

Mistake of law constitutes a mistake within the meaning of this title only when it arises from: 1. A misapprehension of the law by all parties, all supposing that they knew and understood it and all making substantially the same mistake as to the law; or 2. A misapprehension of t…

Mistake of foreign laws is a mistake of fact.

Consent is not mutual unless the parties all agree upon the same thing in the same sense. In certain cases defined in chapter 9-07, they are to be deemed so to agree without regard to the fact.

Consent can be communicated with effect only by some act or omission of the party contracting by which the party intends to communicate it, or which necessarily tends to such communication.

If a proposal prescribes any conditions concerning the communication of its acceptance, the proposer is not bound unless they are conformed to. In other cases any reasonable and usual mode may be adopted.

Consent is deemed to be communicated fully between the parties as soon as the party accepting a proposal has put that party's acceptance in the course of transmission to the proposer in conformity to section 9-03-18.

Performance of the conditions of a proposal, or the acceptance of the consideration offered with a proposal, is an acceptance of the proposal.

Except as provided by section 41-02-14, an acceptance must be absolute and unqualified, or must include in itself an acceptance of that character which the proposer can separate from the rest and which will conclude the person accepting. A qualified acceptance is a new proposal.

A proposal may be revoked at any time before its acceptance is communicated to the proposer, but not afterwards, except as provided by section 41-02-12.

A proposal is revoked: 1. By the communication of notice of revocation by the proposer to the other party in the manner prescribed by sections 9-03-17 and 9-03-19 before the latter's acceptance has been communicated to the former; 2. By the lapse of the time prescribed in such pr…

A contract which is voidable solely for want of due consent may be ratified by a subsequent consent.