Definition
Puts and refusals is a historical English legal term for a class of speculative financial contracts — known as time-bargains — in which parties agreed to buy or sell stock at a fixed price on a future date, with one party retaining the option to either demand delivery or refuse the transaction depending on how market prices moved. The arrangement was effectively an early form of what modern finance would recognize as an options contract, though operating without today's formal regulatory or exchange infrastructure.
The "put" element allowed the holder to sell stock to a counterparty at the agreed price regardless of market movement. The "refusal" element granted the right to decline performance if the contract proved unfavorable. Together, these rights made the contract asymmetric: one party could elect to perform or walk away based on price movement, making the instrument functionally speculative rather than a firm commitment to transfer property.
Common Confusion
Puts and refusals should not be confused with the modern standalone term "put option," though the concepts share a conceptual ancestor. A modern put option is a standardized, exchange-traded instrument governed by securities regulation; puts and refusals were informal bilateral contracts under English common law, frequently associated with stock jobbing and regarded with legal suspicion. The term also should not be conflated with puts and calls, a related but distinct historical category of speculative contracts — puts and calls involved separate option rights on both sides of a transaction, while puts and refusals described a specific combined right of demand-or-refusal held by a single party.
Why It Matters in Research
This term is largely obsolete as an operative legal concept but surfaces in historical research on English financial regulation, the law of gaming and wagering, and the antecedents of modern derivatives law.
Key navigational points for corpus researchers:
First, the statutory context matters. Puts and refusals were explicitly prohibited by the Stock Jobbing Act (7 Geo. II, c. 3, § 1), a statute that treated such contracts as void and unenforceable on public policy grounds similar to gaming statutes. That Act was later repealed by 23 & 24 Vict. c. 28, which means the enforceability of these contracts shifted across the nineteenth century. Any case or treatise citing puts and refusals must be read against which statutory regime was then in force.
Second, historical sources treat this term inconsistently with related terms. Puts and calls, time-bargains, stock jobbing, and option contracts appear in overlapping clusters in nineteenth-century English legal writing, and the boundaries between them are not always precise. Researchers following a thread on any one of these terms should expect cross-references between them and should not assume conceptual consistency across sources.
Third, the term's appearance in American sources is sparse and derivative. American legal writers who discuss puts and refusals in the nineteenth century are almost uniformly drawing on English authority, and the term did not develop independent American doctrinal content. Researchers using American corpus materials should treat any such reference as pointing back to English law rather than reflecting settled U.S. doctrine.
Fourth, the overlap with gaming law is significant. English courts frequently analyzed puts and refusals under the same framework applied to wager contracts — asking whether the parties intended actual delivery of stock or merely a cash settlement based on price difference. That analytical question (delivery versus difference) is a recurring issue in nineteenth-century financial contract cases and directly connects puts and refusals to the broader gaming and wagering law corpus.
Historical Dictionary Support
Black's Law Dictionary (both the first and second editions) offers only a compressed entry: "In English law. Time-bargains, or contracts for the sale of supposed stock on a future day." This formulation is accurate but thin. It captures the surface structure — futurity, stock, contract — without conveying the option-like asymmetry that gave these contracts their speculative character or their legal significance.
Rapalje & Lawrence provides the most useful historical entry. By citing the specific statutory authority (7 Geo. II, c. 3, § 1) and noting its repeal, Rapalje & Lawrence gives researchers the legislative coordinates necessary to situate the term historically. The cross-reference to GAMING confirms that historical dictionaries understood puts and refusals as belonging to the wagering-contract family rather than ordinary commercial contract law.
None of the three historical dictionaries address the analytical question of delivery versus difference that animated case law on these contracts, and none reflect the post-repeal period during which such contracts became enforceable. Researchers relying solely on dictionary definitions will miss the statutory trajectory that defines the term's legal life.
Jurisdictional Note
Puts and refusals as a legal category is English in origin and never achieved independent development in American or other common law jurisdictions. In the United States, functionally similar contracts were addressed under state gaming statutes and the common law of wagering, without adopting this specific terminology.