Contract Law Cases - Smith v Hughes
Smith v Hughes Was Causing A Loat of Trouble.
Brief of the Case
Mr.Smith entered a contract with Mr Hughes promising to deliver a large quantity of his oats.
However, upon receiving the first batch of oats, Mr. Hughes realised that the oats he ordered were useless because they were green and not the old oats he needed to feed his racehorses.
Hughes then sued for breach of contract but the court's ruling was that Smith was innocent due to the following facts.
The Facts of the Smith Case
- Smith had given a sample of his green oats to Hughes who approved of them and then agreed to purchase a large quantity more.
- Smith never said that the oats were not green or that they were old enough for racehorses to eat and it was not part of the written contract that Smith would be selling old oats and not green ones instead.
- The judges ruled that even if Smith had known that Hughes was mistaken about the oats he was under no legal obligation to help him. So even if it is deemed an unethical thing to do, Smith's silence about the oats was not illegal.
"In this case I agree that on the sale of a specific article, unless there be a warranty making it part of the bargain that it possesses some particular quality, the purchaser must take the article he has bought though it does not possess that quality. And I agree that even if the vendor was aware that the purchaser thought that the article possessed that quality, and would not have entered into the contract unless he had so thought, still the purchaser is bound, unless the vendor was guilty of some fraud or deceit upon him, and that a mere abstinence from disabusing the purchaser of that impression is not fraud or deceit; for, whatever may be the case in a court of morals, there is no legal obligation on the vendor to inform the purchaser that he is under a mistake, not induced by the act of the vendor."
Law Lessons to Take Away
- Before you agree to buying a particular item you should directly question the vendor whether or not that item has the qualities you are looking for.
- Furthermore, for the qualities that are absolutely necessary in order to give the item any value at all to you (like the oats being suitable for racehorses to eat) you should make it part of the contract that the item is indeed of that quality.
- Without listing the quality in your contract you are at risk of buying something that is not what you want.
- It is important to remember that the vendor is not under any legal obligation to help you so do not count on him to tell you important details that you don't ask him about.
Summary of Smith v Hughes
In the end the judges all ruled that this was not simply about 'a meeting of the minds' or 'consensus ad idem' but about the conduct of the vendor - he didn't deceive anyone and therefore was not guilty of anything, at least in the eyes of the law.
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