159 ER 375 (1864)

A seminal case on the doctrine of mutual mistake in contracts law.

The plaintiff and defendant entered into a contract whereby the former agreed to sell 125 bales of Surat cotton to the latter.  The contract specifically provided that the cotton would be arriving to Liverpool from Bombay on a ship named Peerless.  Unbeknownst to the parties at the time of the contact, however, there were two ships named Peerless arriving in Liverpool from Bombay, one departing in October and the other in December.

At the time of the contract, Defendant was under the impression that the contract was for cotton on Peerless departing in October, but Plaintiff thought it was for the December ship.

When the cotton arrived on the December Peerless, the plaintiff attempted to deliver it but the defendant repudiated the agreement claiming that the contract was for the cotton arriving on the October Peerless and not the December Peerless.

The court held that the mutual mistake prevented the meeting of the minds and, therefore, there was no enforceable contract.   After examining the contract and the evidence presented, the court determined that there was no agreement between the parties as to which Peerless would be delivering the cotton. Since there was no agreement on which ship was delivering the cotton, as stated in the contract, there could be no meeting of the minds, no agreement on the terms, and no enforceable contract.

 

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