Raffles v Wichelhaus
Citations:  EWHC Exch J19; (1864) 2 Hurlstone and Coltman 906; (1864) 159 ER 375.
The parties agreed that the claimant would sell the defendant cotton. The agreement stipulated that the cotton would arrive on the ship known as the ‘Peerless’. The identity of the ship was important to this kind of agreement, because any contract would be terminated if that ship was lost at sea. In fact, there were two ships called the Peerless. The defendant thought that they had agreed on the first ship, which sailed in October. The claimant thought they had agreed on the second ship, which sailed in December.
The claimant was not in a position to make the October shipping. They therefore delivered the cotton by the Peerless sailing in December. The defendant rejected the shipment and refused to pay.
- Was there an agreement, and if so, which ship did it refer to?
The Court held for the defendant. It was impossible to objectively ascertain which ship was meant. Since the identity of the ship was a key contract term, there had been no agreement. The defendant was therefore not obliged to pay.
This Case is Authority For…
Where a key term of the contract is completely ambiguous, the contract will be void for mutual mistake and lack of consensus ad idem (meeting of minds).