Boris Ignachkov Legal Principles and Key Points
- In the case of Scriven Bros v Hindley [1913] 3 K.B. 564, it was held that when there is a mistake to a contract due to the fault of the non-mistaken party, there is no ‘meeting of the minds’ required to create an enforceable contract. Both parties are at fault, but the non-mistaken party’s conduct/negligence contributed to the fault of the mistaken party.
Facts of the Case
- C employed an auctioneer to sell a large quantity of Russian hemp and tow. The goods were kept at the docks and samples were on view in showrooms.
- The auctioneer’s catalogue identified the shipping marks and the lots where the goods were kept but did not distinguish between the hemp lots and the tow lots.
- Markers on the gangway floor did distinguish them, but these were not immediately and easily visible.
- Witnesses on both sides said that in their experience Russian hemp and Russian tow were never landed from the same ship under the same shipping marks.
- When D realised that they had bought tow, D refused to pay and C sued them for the full price they had bid.
- C argued that the mistake was only a mistake as to the value of the goods, not one as to the subject-matter of the contract.
Issues
- Was there a contract, or was it void for mistake on behalf of both C (intending to sell tow) and D (intending to buy hemp)?
Held by the King’s Bench Division
- Finding for D, that there was no contract between the parties. C failed to make the two samples sufficiently clear. D had not bought a catalogue beforehand or inspected the samples thoroughly before bidding.
- Both parties were at fault, but D’s negligence had contributed to C’s mistakes during the auction. There was no meeting of the minds as to the subject-matter for sale. As such, a binding contract could not be formed.
A.T. Lawrence J
- The jury found that hemp and tow are different commodities in commerce. The second and third findings of the jury show that the parties were never of one mind as to the subject-matter of the proposed sale.
- C can recover only if they can show that D were estopped from relying upon the jury’s finding. C argued that D were estopped because D failed to prove that the auctioneer knew at the time that D was bidding for hemp and not for tow.
- This does not represent negligence on D’s behalf; it assumes that the purchaser has a duty towards the seller to examine goods he does not wish to buy, and to correct any latent defect there may be in the sellers’ catalogue.
- Russian hemp was never before known to be consigned or sold with the same shipping marks as Russian tow from the same cargo. It was natural for the person inspecting the marked goods and being shown samples of hemp to suppose that the bales represented commodity hemp.
- “To rely upon a purchaser’s discovering chalk marks upon the floor of the showroom seems to me unreasonable as demanding an amount of care upon the part of the buyer which the vendor had no right to exact. A buyer when he examinee a sample does so for his own benefit and not in the discharge of any duty to the seller; the use of the word ‘negligence’ in such a connection is entirely misplaced, it should be reserved for cases of want of due care where some duty is owed by one person to another. No evidence was tendered of the existence of any such duty upon the part of buyers of hemp. In so far as there was any evidence upon the point it was given by a buyer called as a witness for C who said he had marked the word ‘tow’ on his catalogue when at the showrooms ‘for his own protection.’ I ought probably to have refused to leave the 7th question to the jury; but neither my complaisance nor their answer can create a duty. In my view it is clear that the finding of the jury prevents C from being able to insist upon a contract by estoppel. Such a contract cannot arise when the person seeking to enforce it has by their own negligence or by that of those for whom he is responsible caused, or contributed to cause, the mistake” [569].