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Smith v Hughes (1871) LR 6 QB 597

Facts:

D took samples of oats. Bought the oats. Afterwards said he only bought old oats and that’s what he thought he was buying

Issue(s):

Was there anything in the facts that show that there was a promise to sell old oats? NO
Is passive acquiescence of the seller enough to void a contract?

Ratio:

If a buyer has a chance to inspect goods, and purchases those goods based on his own judgment then the rule of caveat emptor applies
**Your subjective thought does not matter

A mistake by one party known to the other party – does not matter
**Follow caveat emptor – as long as seller does not induce the buyer to buy then he is not liable
***It doesn’t affect the K- EXCEPT: if it is a mistake as to the term of the K
****But a mistake of one party as to the term the K does matter
****No meeting of the minds – bc the parties are not talking about the same terms

Analysis:

Test: Mistake as to the nature of the goods is irrelevant even if it is known by the seller but a mistake as to the terms is relevant since there is no consensus ad idem therefore there would be no K and no obligation.

We must assume that D believed them to be old oats, and that P knew of this and did nothing to bring the belief about. If D had asked if they were old or new the case would have been entirely different – or if D had done anything to show that he was not acting on his own judgement.

There was an argument that the 2 minds were not ad idem – but all that can be said is that they weren’t ad idem as to the age of the oats, but were for the sale of the oats. However – if one party intends to make a K on one set of terms, and the other intends to make it on another set of terms, if the parties are ad idem there is no K.
**Freeman v Cooke – if, whatever’s a man’s real intention may be, he conducts himself that a reasonable man would believe he was assenting to the terms proposed by the other party, and the other party enters into a K, the man thus conducting himself is bound as if he had intended to agree to the other party’s terms

It is essential to the creation of the K that both parties agree to the same thing in the same sense. If 2 persons enter into a K for a particular X, and it turns out that each of them, misled by a similarity of name, had a diff X in mind, no contract would exist (Raffles). But one party may, by his own fault, be precluded from saying that he had a diff sense is understanding the other party – as in the case of sale by sample

Holding:

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