Raffles v Wichelhaus
Where an ambiguity means the parties intended different things and neither meaning is objectively preferable, there is no contract.
Facts
Raffles agreed to sell Wichelhaus 125 bales of Surat cotton, to arrive ex Peerless from Bombay. There were two ships named Peerless sailing from Bombay to Liverpool, one in October and one in December. The buyer meant the October ship, and the seller meant the December ship. When the cotton arrived on the December ship, the buyer refused to accept it, and the seller sued.
Legal principle
The court held that the buyer was not liable, accepting the argument that there was no binding contract. Because the contract referred ambiguously to a ship named Peerless, and each party meant a different ship, there was no consensus between them, and nothing in the circumstances made one meaning objectively more reasonable than the other. The case is usually explained as an example of mutual mistake, where the parties are at cross purposes and the court cannot decide on an objective basis what was agreed.
Related cases on mistake
- Associated Japanese Bank (International) Ltd v Crédit du Nord SA [1989] 1 WLR 255
- Bell v Lever Brothers Ltd [1932] AC 161
- Couturier v Hastie (1856) 5 HLC 673
- Cundy v Lindsay (1878) 3 App Cas 459
- Great Peace Shipping Ltd v Tsavliris Salvage (International) Ltd [2002] EWCA Civ 1407, [2003] QB 679
- Hartog v Colin & Shields [1939] 3 All ER 566
- Ingram v Little [1961] 1 QB 31
- Lewis v Averay [1972] 1 QB 198
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This summary is for study and revision and is not legal advice. Although our case summaries are checked for accuracy, we do not guarantee that they are free from errors or omissions. Always read the full judgment for the court's reasoning.
