How does Innocent Misrepresentation differs from Mistake?
Scriven Brothers & Co. v Hindley (1913) (quoted below) illustrates my bewilderment. Defendant made a false statement of fact, acted upon by Plaintiff, pre-contractually that definitely induced the P to contract. So isn't it obvious D made an innocent misrepresentation to P?
Thus why did the first 2 textbooks below discuss it in solely the chapter on mistake, not (again) in misrepresentation? The third textbook discusses it in solely Ch 2 on Offer and Acceptance, and never again, not even Mistake!
Poole, Shaw-Mellors. Contract Law Concentrate (4 ed 2019). p 38.
FACTS: The Ds mistakenly bid for bales of tow believing they were hemp. At the auction the Ds had examined a sample, which happened to be hemp, and thought that all the bales were hemp because they all had the same shipping mark. This was accepted as a reasonable interpretation but so too was the auctioneer’s belief that the bales being sold were tow.
HELD: There was no contract and the Ds did not have to pay for the tow.
However, in Tamplin v James (1880) the purchaser mistakenly believed the lot of property being sold included some garden but had failed to check the plan which indicated that no garden was included. The purchaser was at fault and could not avoid the contract by citing his mistake.
Anson's Law of Contract (2016 30 ed). p 275. Note the 31st ed will be published in Apr 2020.
Similarly, if A makes to B an offer which is ambiguous in its terms, or is rendered ambiguous by the circumstances surrounding it, and B accepts the offer in a different sense from that in which it is meant, then unless an objective construction requires otherwise, B may effectively maintain that there is no binding contract. In Scriven Bros & Co v Hindley & Co:37
S instructed an auctioneer to sell certain bales of hemp and tow. These bore the same shipping mark and were described in the auction catalogue as so many bales in different lots with no indication of the difference in their contents. H’s manager examined samples of the hemp before the sale intending to bid for the hemp alone. At the auction, the tow was put up for sale, and H’s buyer, believing it to be hemp, made a bid which was a reasonable one if it had been intended for hemp, but an excessive one for tow. This bid was accepted by the auctioneer, who did not realize the buyer’s mistake, but merely thought the bid an extravagant one for tow. S sought to enforce the contract by suing for the price.
It was clear that offer and acceptance did not coincide. S intended to sell tow; H’s buyer, misled by the auction catalogue, intended to buy hemp. The Court held that there was nothing in H’s conduct which would estop it from pleading that the parties were not in agreement as to the subject- matter of the sale— or, to put it in the language of the objective test set out by Blackburn J in Smith v Hughes,38 H had not so conducted itself that a reasonable man would believe that it was assenting to S’s terms. Accordingly, no contract had come into existence, and H was not liable.
O'Sullivan & Hilliard's The Law of Contract (2018 8 ed). p. 16.
2.17 In Scriven v Hindley (1913), the claimant was selling bales of hemp and bales of tow at auction. However, he did not make clear which lot was the hemp and which lot was the tow. The defendant, thinking he was bidding for the lot that contained the hemp, actually bid for the tow. It was held that there was no contract for the sale of the tow, because the defendant’s apparent intent (to bid for the tow) had been caused by the claimant’s carelessness in not making it clear which lot was which. Therefore, because the objective principle did not apply, the court looked at the parties’ actual intention. The defendant’s intention (to buy the hemp) did not coincide with the claimant’s intention (to sell the defendant the tow) so there was no contract.