Cutter v Powell (1795)

This is the classic statement of the entire contract rule: where a promise to pay depends on the whole of the work being done, doing part of it earns nothing. It is an eighteenth-century English decision, and you meet it in Indian labour law for one reason — as the harsh result that Indian courts refuse to import into ordinary monthly wage contracts.

In Bank of India v T.S. Kelawala (1990) the Supreme Court declined to treat a monthly wage contract as indivisible. If it were truly indivisible, it would be so for both parties, and an employee whose service ended mid-month by death, resignation or retirement would get nothing for the part-month served — the harsh consequence of Cutter v Powell, rightly criticised and later not followed. Know Cutter so you can explain what the Indian courts were rejecting.

At Kingston, Jamaica, the defendant, master of the ship Governor Parry, gave T. Cutter a note dated 31 July 1793: "Ten days after the ship 'Governor Parry,' myself master, arrives at Liverpool, I promise to pay to Mr. T. Cutter the sum of thirty guineas, provided he proceeds, continues and does his duty as second mate in the said ship from hence to the port of Liverpool."

The ship sailed on 2 August 1793 and reached Liverpool on 9 October. Cutter served as second mate from Kingston until he died on 20 September, before the ship arrived.

The usual wage of a second mate shipped by the month was four pounds a month; the voyage usually took about eight weeks. So on a time basis Cutter's work was worth about eight pounds, against the thirty guineas promised for the whole voyage.

The plaintiff, suing as his personal representative, brought assumpsit for work and labour done. The jury found for her, subject to the opinion of the Court. The Court adjourned the case to inquire into mercantile usage; it emerged that "there was no fixed settled usage one way or the other".

1. Was the note an entire contract, with completion of the voyage a condition precedent to any payment?
2. If so, could his representative still recover a proportionate sum on a quantum meruit for the service actually rendered?

For the plaintiff: as with a servant hired for a year who dies during the year, the representative should get a proportionate part of the wages. The seaman was prevented from finishing by the act of God, not by his own fault. The note was a security meant to prevent desertion and should be construed liberally; and since the event it provided for had not happened, the law could imply a promise to pay for work done.

For the defendant: where there is an express contract, the parties cannot resort to an implied one. This was an entire and indivisible contract; the mate chose the chance of a large sum for the whole voyage over a smaller, certain wage, and his representative is bound by that election.

The plaintiff recovered nothing. Judgment (postea) went to the defendant, subject to any further information on usage being placed before the Court that term — and the case was not mentioned again.

Lord Kenyon CJ treated the rule against implying a contract where an express one exists as settled: "That where the parties have come to an express contract none can be implied has prevailed so long as to be reduced to an axiom in the law." The mate had bargained for nearly four times the ordinary wage: "He stipulated to receive the larger sum if the whole duty were performed, and nothing unless the whole of that duty were performed: it was a kind of insurance." He was careful to rest his view on "the particular words of this contract and the precise facts here stated, without touching marine contracts in general".

Ashhurst J: "as it is entire, and as the defendant's promise depends on a condition precedent to be performed by the other party, the condition must be performed before the other party is entitled to receive any thing under it." The quantum meruit claim failed because "wherever there is an express contract the parties must be guided by it; and one party cannot relinquish or abide by it as it may suit his advantage." He accepted that the mate "was not indeed to blame for not doing it", but the condition was unperformed.

Grose J: the mate "was to be entitled either to thirty guineas or to nothing, for such was the contract between the parties."

Lawrence J: on the terms of the instrument alone "the plaintiff is not entitled to recover, because it is an entire contract." He distinguished the ordinary hired servant, who is taken to be hired on the general understanding "that the servant shall be entitled to his wages for the time he serves though he do not continue in the service during the whole year."

Where a promise to pay is conditional on the complete performance of a stated duty, the contract is entire: completion is a condition precedent, and part-performance — even when completion is prevented without fault, as by death — earns nothing under the contract. Nor can the party in default of completion recover on a quantum meruit, because an express contract excludes an implied one.

• Wage deduction for strikes: in answering Can an employer deduct wages for a partial strike or a few hours' absence?, use Kelawala, and cite Cutter v Powell as the rejected extreme: a monthly contract is not indivisible, or employees leaving mid-month would forfeit the whole month.
• Contract law link: Explain the doctrine of entire contracts with reference to Cutter v Powell. State the facts (thirty guineas, death on 20 September, about eight pounds on a time basis), the condition-precedent reasoning and the bar on quantum meruit.
• Say plainly that this is an English King's Bench decision of 1795, persuasive at most, and that the judges themselves confined it to the special contract before them.