Smith vs. Hughes (1871) LR 6 QB 597
The complainant, Mr. Smith, was an oats farmer and the defendant, Mr Hughes, was a race horse trainer. Mr. Smith was to bring 40 to 50 quarters of his oats to Mr. Hughes after he (thus, Mr. Smith) had shown a sample of oats to Mr. Hughes. When Mr. Smith delivered the oats to Mr. Hughes, Mr. Hughes advanced that the delivered oats were not what he had in mind, he wanted old oats but was delivered new oats. The oats delivered to Mr. Hughes were the same as the oats sample he was earlier shown, new oats.
At the trial court, Mr. Hughes sued Mr. Smith over the latter’s breach of contract. The trial court ruled in favour of Mr. Hughes and advanced that He made a mistake and if Mr. Smith knew of this, thus the fact that horses eat old oats, it was his mistake. Mr. Smith appealed against this ruling.
Whether Hughes could avoid the contract because he did not receive the old oats he expected to receive from Smith, but rather received new oats.
Hughes could not avoid the contract despite receiving new oats when he intended to buy old oats.
The court observed that since there was no express discussion of old oats, and since Mr. Hughes was shown a sample of new oats, any reasonable person would conclude that the contract is about the sale of new oats, and not old oats. The parties could thus be said to have agreed to buy and sell old oats, and this was binding.
The court applied an objective basis of determining agreement, which was the reasonable man principle. This ruling established the principle that parties to a contract can be said to be in agreement if a reasonable man, upon examination of the facts of the contract/agreement, deems that an agreement exists.