Uncategorized

Smith V Hughes (1871) LR 6 QB 597

English Contract Law Case

Court: Queen’s Bench

Case opinions: Cockburn CJ, Blackburn J, and Hannen J

 Fact:

Defendant purchased 40-50 quarters of what he thought were old oats for horse feed based on a sample he had received; the purchase was, in fact, new oats; the defendant refused to pay for the delivery of remaining order and claimant sued for breach of contract.

Issue

Could the contract be avoided as Hughes had delivered the wrong type of oats

 Held: 

The claimant’s passive acquiescence to sell the oats did not amount to a misrepresentation.

It was held that there was a binding contract between parties. An objective test revealed that a reasonable person would expect the sale of good quality oats in a similar contract since there was no express discussion of old oats.

The sample gave him the chance to inspect the oats; If a buyer has a chance to inspect goods, and purchase those goods based on his own judgment then the rule of Caveat Emptor (buyer beware) applies.

Note: 

Affirmation of the principle of buyer beware, and that contractual agreements are objectively judged. More recently the same point on objective approach was made by Lord Clark in the judgment of the Supreme Court in RTS Flexible System Ltd v Molkerei Alois Müller GmbH & Co (UK Production) [2010] UKSC 14; [2010] 1 WLR 753, [45]

Auction, Contract Law

Contract Law / Auction

Contracts that underpin an auction process…

There are four contracts in an auction sale process.

  • Contracts between individual bidders.
  • Contracts between the Auction house and each individual bidders.
  • Contracts between seller and successful bidder.
  • Contractual contract between auctioneer and the highest bidder.