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Raffles v. Wichelhaus

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Raffles v. Wichelhaus, 2 H. & C. 906, 159 Eng. Rep. 373 (Ex. 1864), is an English contract law case dealing with concepts of mutual mistake and mutual assent as applied to contract formation.

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Contents

Summary of Case Facts

The plaintiff, Raffles, contracted with the defendant, Wichelhaus, to sell bales of cotton at a certain price with delivery to be made by a ship named Peerless, leaving from Bombay, to be delivered in Liverpool, England. Unbeknownst to either party, there were in fact two ships named Peerless leaving Bombay headed for Liverpool. One to depart in October and the other to depart in December. The defendant believed the contract to mean that the cotton he purchased would depart on board the Peerless in October. Unfortunately, the plaintiff believed the contract to mean that he would ship the cotton on the Peerless leaving in December. The cotton arrived in Liverpool on the December Peerless shipment but the defendant refused delivery, claiming that their contract was for cotton to be shipped on the October Peerless. The plaintiff sued defendant for breach of contract.

Issue

Did the ambiguity of the ship described in the contract delivering the cotton prevent mutual assent, or "meeting of the minds," to a large enough extent to render the contract unenforceable?

Holding and Law

Yes. Where the contract did not specify which Peerless the cotton would be shipped on was a mistake mutually made by both parties. The court was willing to look to parol evidence to preserve the agreement if possible, but upon examination of the evidence and the testimony found that there was no agreement as to which Peerless would be delivering the cotton. As there was clearly no agreement on which ship to use, as stated in the contract, there could be no meeting of the minds (no mutual assent), no agreement on the terms, and, as such, no contract.

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