Smith v Hughes

Smith v Hughes (1871) LR 6 QB 597 is an English contract law case. In it, Blackburn J set out his classic statement of the objective interpretation of people's conduct (acceptance by conduct) when entering into a contract. Rejecting that one should merely look to what people subjectively intended, he said,
"If, whatever a man's real intention may be, he so conducts himself that a reasonable man would believe that he was assenting to the terms proposed by the other party, and that other party upon that belief enters into the contract with him, the man thus conducting himself would be equally bound as if he had intended to agree to the other party's terms."
The case stands for the narrow proposition that in a commercial sale by sample (following sample) where the goods conform to the sample shown, the court will mindful of the principle of caveat emptor look more to objective than subjective consensus ad idem. Its wider proposition, not directly relevant to the facts of the case, and later substantially reduced, was that a consumer buying an item, such as "a horse", without a representation or warranty (any seller's statement or special term as to its condition) making his own assessment which "turns out unsound" cannot avoid, that is seek to obtain a refund on, the contract — see for example the largely consolidatory Consumer Rights Act 2015. 
Facts.
Mr Hughes was a racehorse trainer. Mr Smith, who was a farmer, brought him a sample of his oats, of which Hughes then ordered forty to fifty quarters at a fixed price. Sixteen quarters were sent to start with. But when they arrived, Hughes said they were not the oats he thought they would be. He had wanted old oats (which are the only ones racehorses can eat), and he was getting new oats (also known as green oats). In fact, Smith's sample was of green oats. Hughes refused to pay and Smith sued for damages for breach of contract, for the amount of oats delivered and still to be delivered. Later questions were put in this civil matter to jury (a procedure today largely abolished).
The jury convened locally at a County Court of Surrey, at Epsom. They initially found for Mr Hughes that there was a mistake on his part. They were directed by the judge that if Mr Hughes was under a mistake about the oats (thinking they were old when they were green oats) and Mr Smith had known it, they should find in Mr Hughes' favour. They therefore did so. Mr Smith appealed.
Judgment.
The Court of the Queen's Bench found that the jury had been misdirected and ordered a retrial. Leaning in Mr Smith's favour, they held that the question was not merely whether the parties were at "consensus ad idem"(meeting of the minds), but what they had communicated by their conduct and words to one another. Mr Smith was held to be under no duty to inform Mr Hughes of his possible mistake about the kind of oats, reaffirming the old idea of "caveat emptor" (buyer beware). A unilateral mistake is therefore in principle no ground for rescission of a contract. Cockburn CJ gave the first judgment.
Then, Blackburn J, who came to be known as one of the great 19th century judges, agreeing, gave his decision on the issue.
Hannen J delivered a concurring judgment.