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Smith v Hughes

[1871] LR 6 QB 597

Case summary last updated at 02/01/2020 16:20 by the Oxbridge Notes in-house law team.

Judgement for the case Smith v Hughes

D agreed to sell “oats” to P, P assuming that the oats were old when in fact they were new, though D had done nothing to induce P’s belief. Nothing was said in negotiations or the contract on the matter. P tried to vitiate the contract on the grounds of the mistake, since the minds were not ad idem due to the mistake. CA rejected this. 

Cockburn CJ: The parties were ad idem as to the parcel of oats to be sold and price etc. The only absence of the minds being ad idem was in the case of how old the oats were. The mistaken belief of P as to age was a “motive” inducing him to buy, and not an “essential condition of the contract”. P did not make age a condition of the contract. 

Blackburn J: Unless there is a warranty as to quality, the buyer must accept the good he has contracted to buy regardless of what quality he believed it to be. Even if the vendor knew of the belief under which the purchaser was operating and knew it was an incorrect belief, the purchaser is still bound unless the vendor is being fraudulent or deceitful or induced the mistake, due to general rule of no duty of disclosure. Also, where a mass is sold by a sample, the law is the same, provided the sample represents the mass. On the agreement, the intention is to be inferred objectively: If a reasonable man would believe from A’s conduct that he agreed to B’s terms, then A is bound by them regardless of his true intention.

Hannen J: Ad Idem is crucial: if I want to buy one ship and you are selling another, but they have the same name, there is no “ad idem” and the contract is not formed. However where it is one party’s own fault that there is no ad idem (e.g. where a vendor displays the wrong sample for the good he intends to sell), he cannot use lack of “ad idem” as a defence. However if in negotiations the purchaser becomes aware that vendor gave him an incorrect sample, vendor can apply the lack of “ad idem” defence by showing that he did not intend to sell the object to which the sample related. 

McKendrick: Important point is that where vendor (V) knows that purchaser (Pu) is mistaken as to what he is buying, there is still ad idem, whereas if Pu knows that V made a mistake but failed to tell him, V can escape the bargain on the basis of mistake. This affords greater protection to sellers that consumers.

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