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himself that a reasonable man would believe that he was assenting to the terms proposed by the other party, and that other party, upon that belief, enters into the contract with him, the man thus conducting himself would be equally bound as if he had intended to agree to the other party's terms.

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Mistake as to the subject matter of a contract. This mistake occurs in three cases: (1) Mistake as to the existence of the subject matter; (2) Mistake as to the identity of the subject matter; and (3) Mistake as to the nature and essential qualities of the subject matter.

(1) If the agreement is in respect to a thing which, unknown to both parties, does not exist when the contract is made, this goes to the very root of the matter and avoids the contract. This rule is further based on the ground that the existence of the subject matter is an essential element of a contract. In Couturier v. Hasties there was a sale of a cargo of corn which was supposed by the parties at the date of the sale to be in voyage from Salonica to England. The corn had been, as a matter of fact, unloaded and sold prior to the date of the agreement because it had heated and was about to spoil. The contract of sale was held to be void, because the intention of the parties was that there was something to be sold, and something to be purchased at the time, when in fact the object contemplated had ceased to exist.88

88 Blackburn, J., in Smith v. Hughes, L. R. 6 Q. B. 597 (Eng.). See Anson, Contracts (Huffeut's 2d ed.), §§ 186-190.

87 5 H. L. C. 673 (Eng.).

88 See Gibson v. Pelkie, 37 Mich. 380; Brick Co. v. Pond, 38 Ohio St. 65.

(2) A mistake as to the identity of the subject matter may avoid an agreement. Thus, A agreed to buy a cargo which was to arrive via the ship "Peerless" from Bombay. But later it developed that there were two ships of that name, but sailing at different dates. The buyer meant one, and the seller had in mind the other. It was held that there was no contract, for there was no meeting of the minds.

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(3) Where the mistake occurs as to the nature and essential qualities of the subject matter, the fact that the subject matter of the contract possessed, or failed to possess, qualities which the parties both believed or did not believe it to possess, is immaterial. That is to say, the motives which induced the assent do not affect the validity of assent when once given. Where A sold to a jeweler, B, an uncut stone for one dollar, both being ignorant of the nature of the stone, and it turned out to be a diamond worth $1,000, it was nevertheless a binding contract."

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But the law will not allow one party to accept a promise which he knows the other party understands in a different sense from that in which he understands it. If the mistake or misunderstanding is so known, the contract is voidable. In the case of Smith v. Hughes, the defendant was sued for refusing to accept oats which he had bought of the plaintiff. His defense was that he intended and had agreed to buy old oats; whereas the oats delivered were new. The court held that it was not enough to excuse the

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89 Raffles v. Wichelhaus, 2 H. & C. 906 (Eng.); Kyle v. Kavanagh, 103 Mass. 356, LEADING ILLUSTRATIVE CASES.

90 Wood v. Boynton, 64 Wis. 265.

91 L. R. 6 Q. B. 597 (Eng.).

defendant that the plaintiff knew that the defendant intended and thought he was buying old oats, but to avoid the sale, the plaintiff must have known that the defendant thought he was being promised old oats. It was said that if the plaintiff knew that the defendant was contracting on the assumption of getting old oats, "he is deprived of the right to insist that the defendant shall be bound by that which was the apparent, and not the real bargain." 92

The question is not what the parties thought, but what they said and did. A sells to X, and X believes that he is buying "this bar of gold," "this barrel of oysters," "this case of champagne." The bar turns out to be brass, the barrel to contain oatmeal, and the case to contain sherry wine. The parties are honestly mistaken as to the subject matter of the contract, but their mistake has nothing to do with their respective rights. These depend on the answer to the question: Did A sell to X a bar of metal or a bar of gold; a case of wine or a case of champagne; a barrel of provisions or a barrel of oysters? A contract for a bar of gold is not performed by the delivery of a bar of brass. A contract for a bar of metal leaves each party to take his chance as to the quality of the thing contracted to be sold, but this again would not be performed by the delivery of a bar of wood painted to look like metal. Such a failure to deliver the article sold, or the delivering of one of a different character, is not mistake of intention, but merely failure of consideration:-failure to perform the

92 Anson, Contracts (Huffcut's 2d ed.), §§ 132-134; Shelton & Co. v. Ellis, 70 Ga. 297, LEADING ILLUSTRATIVE CASES.

terms of the contract. The contract exists, but is broken; but where there is mistake of intention, there is no contract created.

Mistake as to the identity of parties. Such a mistake arises where A contracts with B, believing him to be C. Here, whether the mistake arises through B's false representation that he is C, or whether B merely accepts A's offer which was meant for C, there is no agreement. When a person intends to contract with another he cannot be compelled to accept a third person as the other party to the contract. "Every one has a right to select and determine with whom he will contract, and cannot have another person thrust upon him without his consent."93

If A has no definite person in mind, as where he makes a general offer in the case of a reward, this question does not arise. Nor does it apply to the case of a contract with an agent of an undisclosed principal, because of the principles of the law of principal and agent.

39. Mistake of one party only.-A mistake of one party only, not known to the other, is generally no ground for avoiding the contract. The test is to determine whether or not the mistake is as to the substance of the whole consideration, and going to the very root of the matter, and not only to some point, although material, which does not affect the substance of the whole consideration. If the mistake is as to the former, then there is in reality a failure of consideration, which is a defense to the contract. If it is the latter, the contract is valid. Unless there 93 Arkansas Valley Smelting Co. v. Belden Mining Co., 127 U. S. 387.

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is a mutual mistake, or the presence of undue influence or fraud, there is usually little or no ground for avoiding the contract for mistake.

In Brown v. Levy," A made an offer to B to erect a building for a certain amount. B accepted the offer, and although A had made a mistake in adding up the items of his estimates to the extent of ten thousand dollars, it being no fault of B, the contract was held to be binding.

40. Mistake in motive. Similarly, a mistake in the motive or inducement which led A to enter into the contract is no ground for avoiding the agreement. If he leases a tract of land under the mistaken belief that there is a vein of coal in it, he is nevertheless bound by the lease, although later he finds no such coal.95 If one orders a greater quantity of an article than he requires, although the mistake was reasonable and justifiable, this is no ground to compel the vendor to give up his rights under the contract.9

Shrewd business transactions are not restricted by the courts, unless there are elements of fraud or misrepresentation. Where A purchases land from B at $25 per acre, knowing that valuable minerals have been found on adjoining farms, B cannot complain of the bargain. B's mistake, if there is one, is not sufficient to avoid the contract. Whether or not A owes B a duty to disclose such facts is another question to be considered later under the topic of misrepresentation.

94 69 S. W. 255.

95 Jeffreys v. Fairs, 4 Ch. D. 448 (Eng.).

96 J. A. Coates & Sons v. Buck, 93 Wis. 128.

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