Raffles v Wichelhaus (1864) 2 H & C 906

Key point

  • A contract is void where the parties are at cross purposes, meaning that they hold differing interpretations of a term that is objectively ambiguous

Facts

  • D agreed to buy cotton from C, and pursuant to the contract the cotton was to be shipped from Bombay onboard a ship named ‘The Peerless
  • D thought cotton would be on The Peerless leaving Bombay in October
  • C had in mind another ship named The Peerless that was leaving Bombay in December
  • When the cotton arrived, D refused to pay
  • C sued for breach of contract

Held (Exchequer Court)

  • Claim denied with no explanation given

Commentary

  • The key point above is the common interpretation of this case, as the actual law report did not record any judgment
  • It was once thought that the contract was void as the parties had differing subjective interpretations, but it Chitty on Contracts 10th edition it is suggested that the correct ground for the case is that the parties had differing interpretations that were as reasonable as the other’s, consistent with the general objective approach of contract law
  • This is to be distinguished from common mistake as the parties did not share the same mistake, rather they were both mistaken but had different interpretations of the same term
  • This is also not a unilateral mistake as none of the parties could be said to be ‘correct’ since the term concerned is objectively ambiguous