A Point of Law

In 1864, two Englishmen entered into an agreement: Raffles would procure 125 bales of fine cotton from India and deliver them to Wichelhaus, who would buy them for a fixed price. They agreed that the cotton would arrive aboard the ship Peerless.

By a sublime coincidence, there were two ships named Peerless sailing from Bombay to Liverpool that year. Wichelhaus had in mind the one that set sail in October, where Raffles had intended another one in December. When his cotton arrived two months later than he’d expected, Wichelhaus refused to accept it, and Raffles sued him.

Who’s right? Raffles had delivered the cotton in good faith according to their written agreement, but Wichelhaus argued that he was entitled to his own understanding of an ambiguous term. Raffles hadn’t met that, so Wichelhaus wasn’t obligated to pay him.

In the end Wichelhaus prevailed: The court ruled that because of the overlooked ambiguity the two men had not had the same transaction in mind when they’d made their agreement — so there was no binding contract.

(Raffles v. Wichelhaus, 2 Hurl. & C. 906 [1864].)