CONTRACT.- III.VOID AND VOIDABLE.
THE elements of fact necessary to call a contract into existence, and the legal consequences of a contract when formed, have been discussed.It remains to consider successively the cases in which a contract is said to be void, and those in which it is said to be voidable,--in which, that is, a contract fails to be made when it seems to have been, or, having been made, can be rescinded by one side or the other, and treated as if it had never been.Itake up the former class of cases first.
When a contract fails to be made, although the usual forms have been gone through with, the ground of failure is commonly said to be mistake, misrepresentation, or fraud.But I shall try to show that these are merely dramatic circumstances, and that the true ground is the absence of one or more of the primary elements, which have been shown, or are seen at once, to be necessary to the existence of a contract.
If a man goes through the form of making a contract with Athrough B as A's agent, and B is not in fact the agent of A, there is no contract, because there is only one party.The promise offered to A has not been accepted by him, and no consideration has moved from him.In such a case, although there is generally mistake on one side and fraud on the other, it is very clear that no special doctrine need be resorted to, because the primary elements of a contract explained in the last Lecture are not yet present.
Take next a different case.The defendant agreed to buy, and the plaintiff agreed to sell, a cargo of cotton, "to arrive ex Peerless from Bombay." There were two such vessels sailing from Bombay, one in October, the other in December.The plaintiff meant the latter, the defendant the former.It was held that the defendant was not bound to accept the cotton. It is commonly said that such a contract is void, because of mutual mistake as to the subject- matter, and because therefore the parties did not consent to the same thing.But this way of putting it seems to me misleading.The law has nothing to do with the actual state of the parties' minds.In contract, as elsewhere, it must go by externals, and judge parties by their conduct.If there had been but one "Peerless," and the defendant had said "Peerless" by mistake, meaning "Peri," he would have been bound.The true ground of the decision was not that each party meant a different thing from the other, as is implied by the explanation which has been mentioned, but that each said a different thing.The plaintiff offered one thing, the defendant expressed his assent to another.
A proper name, when used in business or in pleading, means one individual thing, and no other, as every one knows, and therefore one to whom such a name is used must find out at his peril what the object designated is.If there are no circumstances which make the use deceptive on either side, each is entitled to insist on the meaning favorable to him for the word as used by him, and neither is entitled to insist on that meaning for the word as used by the other.So far from mistake having been the ground of decision, as mistake, its only bearing, as it seems to me, was to establish that neither party knew that he was understood by the other to use the word "Peerless "in the sense which the latter gave to it.In that event there would perhaps have been a binding contract, because, if a man uses a word to which he knows the other party attaches, and understands him to attach, a certain meaning, he may be held to that meaning, and not be allowed to give it any other. Next, suppose a case in which the offer and acceptance do not differ, and in which both parties have used the same words in the same sense.Suppose that A agreed to buy, and B agreed to sell, "these barrels of mackerel," and that the barrels in question turn out to contain salt.There is mutual mistake as to the contents of the barrels, and no fraud on either side.I suppose the contract would be void. It is commonly said that the failure of the contract in such a case is due to the fact of a difference in kind between the actual subject-matter and that to which the intention of the parties was directed.It is perhaps more instructive to say that the terms of the supposed contract, although seemingly consistent, were contradictory, in matters that went to the root of the bargain.For, by one of the essential terms, the subject-matter of the agreement was the contents of certain barrels, and nothing else, and, by another equally important, it was mackerel, and nothing else; while, as a matter of fact, it could not be both, because the contents of the barrels were salt.As neither term could be left out without forcing on the parties a contract which they did not make, it follows that Acannot be required to accept, nor B to deliver either these barrels of salt, or other barrels of mackerel; and without omitting one term, the promise is meaningless.
If there had been fraud on the seller's part, or if he had known what the barrels really contained, the buyer might have had a right to insist on delivery of the inferior article.Fraud would perhaps have made the contract valid at his option.Because, when a man qualifies sensible words with others which he knows, on secret grounds, are insensible when so applied, he may fairly be taken to authorize his promisee to insist on the possible part of his promise being performed, if the promisee is willing to forego the rest.
