Smith v Hughes (1871) LR 6 QB 597
Smith v Hughes (1871) LR 6 QB 597
1. Case Facts
Parties:
Smith: Seller
Hughes: Buyer
Hughes, a racehorse trainer, wanted to buy some old oats.
Smith showed Hughes some oats from a stack and Hughes agreed to buy them.
However, Hughes thought he was buying new oats, suitable for horse feed.
Smith knew that Hughes believed the oats to be new but did not correct him or state otherwise.
After the sale, Hughes realized the oats were old and refused to pay.
Smith sued Hughes for the price of the oats.
2. Legal Issue
Whether there was a valid contract between Smith and Hughes.
Specifically, whether Hughes' mistaken belief about the quality (old vs new oats) affected the formation of the contract.
Whether Smith’s silence about the oats being old constituted misrepresentation.
3. Judgment
The court held in favor of Smith (the seller).
It was held that there was no misrepresentation by Smith.
Hughes’ mistake was about the quality of the oats, but Smith did not actively mislead him.
The court ruled that mere silence does not amount to misrepresentation.
The contract was valid and enforceable.
4. Legal Principles Established
a) Objective Theory of Contract
The case reinforced the objective test for contract formation.
What matters is the outward expression of assent, not the hidden or subjective intention of the parties.
If a reasonable person would understand there was an offer and acceptance, the contract is valid, regardless of undisclosed mistakes.
b) No Duty to Disclose
Generally, a party is not under a legal obligation to disclose information or correct the other party's mistaken assumptions unless there is fraud, misrepresentation, or fiduciary relationship.
Silence is not misrepresentation.
c) Mistake as to Quality
A unilateral mistake about the quality of goods does not invalidate a contract if the mistake is not induced by misrepresentation.
The buyer takes the risk of his own assumption.
5. Significance of the Case
Smith v Hughes is a leading authority on mutual assent and mistake in contract law.
It clarifies that contracts are judged by objective manifestations rather than subjective intent.
The case highlights limits on relief for unilateral mistakes.
It underscores the principle that one party cannot avoid a contract simply because they were mistaken, unless the other party misled them.
6. Related Case Law
a) Hartog v. Colin & Shields (1939)
Here, a mistake in price was held to void the contract because the seller knew the buyer was mistaken.
Different from Smith v Hughes because there was knowledge of the mistake and active exploitation.
b) Raffles v Wichelhaus (1864)
Case involving mutual mistake where parties were referring to different ships.
The contract was void due to no consensus ad idem (no meeting of minds).
c) Bannerman v. White (1861)
Statements about quality made during negotiations can amount to representations.
Different from Smith v Hughes where the seller was silent.
7. Summary
| Aspect | Explanation |
|---|---|
| Mistake | Unilateral mistake about quality does not void contract |
| Silence | Mere silence does not amount to misrepresentation |
| Contract formation | Based on objective outward expressions, not subjective intent |
| Seller’s duty to disclose | No duty unless fraud or misrepresentation |
| Outcome | Contract was valid; buyer must pay |
8. Conclusion
Smith v Hughes (1871) is a cornerstone case in contract law illustrating that:
Contracts are based on what parties say and do rather than what they secretly think.
A buyer cannot avoid a contract due to their own mistaken belief unless the seller actively misled them.
The case protects parties who act honestly without fraud in commercial transactions.
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