Audio recording 2.2 transcript

So, Smith v Hughes is a really hard case, which students always find difficult, which is unsurprising because judges find it difficult too. So, perhaps it's helpful if I try and talk it through a little bit orally as well. But basically, let's say that I agree to sell you a kilo of oats, so you have a contract for the sale of oats. And in my head, I'm going to give you new oats, and in your heads, you think you're getting old oats. Now, even though we both have different ideas in our heads, there's very probably, a binding contract going on here. Because what's going on in our heads doesn't really matter. And if you're making a mistake about the oats that I'm giving to you, then more fool you in a way, caveat emptor, or buyer beware, is an important principle of English law. So, the contract is for the sale of oats and if I supply you with oats, I'm fulfilling the terms of the contract. But there is an exception. Which is what Smith v Hughes is most difficult on. Where if I know that you think I'm promising you old oats, so if I know you think it's the term of the contract that the oats are old, then we might say there isn't a meeting of the minds, there isn't consensus ad idem, if you like. Because I know we're not contracting on the same terms. So, there's no objective agreement, but I think I'm promising you oats and you think you're buying old oats, then we're not agreed, because oats and old oats aren't quite the same term. So, I think they're the best view is in effect there's no contract, because we're talking past one another. So, if I promise to sell you car A and you promise to buy car B and there's no contract, because the two are different. And I think it's the same with these oats. But, genuinely, if the contract just says oats, then I can provide any oats to fulfill the terms of the contract. And if you want a particular sort of oats, then really you should specify that in the contract. And if you don't then more fool you, if you like, caveat emptor, or buyer beware, it's on you that you didn't stipulate for old oats in the contract. But I think Smith v Hughes is the case which shows that I can’t act in entire bad faith. So, if I know that you think I'm promising you something which I'm not, I can't take advantage of your mistake. And we'll come back to bad faith, in particular, throughout the book and ideas of mistaken rectification in chapter fourteen, in particular.