ambiguity and confusion are peculiarly incident to the use of the term "contract." One moment the word may mean the agreement of the parties; and then, with a rapid and unexpected shift, the writer or speaker may use the term to indicate the contractual obligation created by law as a result of the agreement. Further instances of this sort of ambiguity will be noticed as the discussion proceeds.
Operative Facts Contrasted with Evidential Facts.
For the purpose of subsequent convenient reference, it seems necessary at this point to lay emphasis upon another important distinction inherent in the very nature of things. The facts important in relation to a given jural transaction may be either operative facts or evidential facts. Operative, constitutive, causal, or "dispositive" facts are those which, under the general legal rules that are applicable, suffice to change legal relations, that is, either to create a new relation, or to extinguish an old one, or to perform both of these functions simultaneously.[1] For
- ↑ Compare Waldo, C. J., in White v. Multonomah Co. (1886), 13 Ore., 317, 323: "A 'right' has been defined by Mr. Justice Holmes to be the legal consequence which attaches to certain facts. (The Common Law, 214). Every fact which forms one of the group of facts of which the right is the legal consequence appertains to the substance of the right."The present writer's choice of the term "operative" has been suggested by the following passage from Thayer, Prelim. Treat. Evid. (1898), p. 393: "Another discrimination to be observed is that between documents which constitute a contract, fact, or transaction, and those which merely certify and evidence something outside of themselves,—a something valid and operative, independent of the writing."Compare also Holland, Jurisp. (10th ed, 1906), 151: "A fact giving rise to a right has long been described as a 'title'; but no such well-worn equivalent can be found for a fact through which a right is transferred, or for one by which a right is extinguished. A new nomenclature was accordingly invented by Bentham, which is convenient for scientific use, although it has not found its way into ordinary language. He describes this whole class of facts as 'Dispositive'; distinguishing as 'Investitive' those by means of which a right comes into existence, as 'Divestitive' those through which it terminates, and as 'Translative' those through which it passes from one person to another."The word "ultimate," sometimes used in this connection, does not seem to be so pointed and useful a term as either "operative" or "constitutive."
