2 Hurl. & C. 906, 159 Eng. Rep. 375 · Court of Exchequer (England) · 1864
ContractsAssigned in 17 casebooks
Case brief summary
Rule
A contract is only valid if both sides agree on the same thing. If an important term is unclear and each side understood it differently, there may be no contract.
Facts
A seller agreed to sell cotton arriving on a ship called the Peerless. Two ships had that name. The buyer meant the October one, the seller meant the December one, and the buyer refused the cotton.
Procedural history
The seller sued the buyer for refusing to accept and pay for the cotton. The buyer explained the mix up about the ship, and the seller argued that defense was not legally valid.
Issue
If a contract refers to a ship by a name that actually matches two different ships, and the buyer and seller each secretly meant a different one of those ships, is there a valid contract between them?
Holding
The court ruled in favor of the buyer, holding that the buyer's defense was good and that the buyer did not have to accept or pay for the cotton.
Reasoning
Since two ships shared the same name and the contract did not clarify which one, the buyer and seller meant different ships. They never truly agreed, so no contract was formed.
Opinions
Majority (Per Curiam, by Pollock, Martin, and Pigott): Judgment for the buyer because the hidden mix up about which identically named ship was meant showed there was no real agreement between the parties.
Test yourself
Question 1 of 5
What was the ambiguous term in the contract between Raffles and Wichelhaus?
The ambiguity arose because two different ships were both named 'Peerless,' one sailing in October and one in December, and the parties meant different ships.
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On the exam
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Other issues in this opinion
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