Facts: The Newfoundland government contracted with the Newfoundland Railway Co for the company to build a railway that was intended to eventually extend for a substantial distance. Among the various terms, it was agreed that the government would grant the company 25,000 acres of land on the completion of each five-mile section of railway. The project came to an unexpected end after just seven sections (35 miles) of railway had been constructed.
Issue: Was the company entitled to the 25,000 acres of land for each of the seven sections that had been completed, even though the complete railway would not now be built?
Decision: The company was entitled to the grants of land for each of the seven completed sections.
Reason: The wording of the contract made it clear that the grants of land were dependent only on the completion of each five-mile section of the railway, and not on the completion of the entire railway. As each section was completed, therefore, each grant of 25,000 acres of land became enforceable as a separate completed contract.
Note: This decision appears to be based on the concept of divisible contracts.