All these propositions are illustrated by Smith v Hughes9 [this footnote states: '(1871) LR 6 QB 597.). The claimant sued the defendant on a contract for the sale of a specific parcel of oats. The defendant said that he had contracted for old oats. However, the claimant provided oats which were new and useless to the defendant. The defendant consequently refused to pay the contract price. The verdict reached by a jury was in favour of the defendant. The case is somewhat unsatisfactory and difficult because there were unresolved questions of fact, so it is necessary to consider the case on three hypotheses.
(a) The word 'old' was used in the discussion leading to the oral contract of sale. If this was the case, then the jury's verdict was right because it was a contract for the sale of old oats. The seller could not perform it by delivering new oats.
(b) The word 'old' was not used but the seller knew that the buyer believed that the oats were in fact old. If that was the case, the verdict was wrong. So long as he did nothing to induce or encourage it,10 the law allowed the seller to take advantage of the buyer's mis take of fact. 'Ihe passive acquiescence of the seller in the self-deception of the buyer,' said Cockburn CJ, did not 'entitle the latter to avoid the contract'. The question was not 'what a man of scrupulous morality or nice honour would do under such circum- stances'. Ihis would be a practical application of the important principle of English law known by the Latin words caveat emptor—roughly translated as 'buyer beware' or 'let the buyer look out for himself'.
(c) The word 'old' was not used but the seller knew that the buyer believed that the seller was contracting that the oats were old. In that case, the verdict was right.
The difference between (b) and (c) is that in (c) the seller knows that the buyer is making a mistake as to the terms of the contract, not merely a mistake as to fact or motive. The seller cannot then enforce the contract in a sense different from that which he knew the buyer intended at the time of contracting.
I understand the difference between (b) and (c) per the last paragraph above, but how is (b) realistic? If a competent buyer needs some feature of a product, then why would a buyer fail to write this feature as a term in contract, much less declare or divulge it to the seller even once in their communication? In this case, why would Hughes keep private his need for old oats?