§156. Government Contracts.-Public contracts like that in above case, for reasons indicated in the opinion, form a highly complicated subject of great importance to certain classes of business. It is generally necessary to follow very closely the terms of a statute authorizing the public officials to enter into a contract. For a discussion of the public contracts of the United States see Shealey, Law of Government Contracts (1919).

E. VITIATION OF CONSENT ELEMENT.

$157. Mistake: In General.-Our system of law must be said to be unduly severe in its insistence that ignorance or mistake is no excuse for wrongdoing. Even today it is the general rule that if one intentionally interferes with the person or property of another, his ignorance or non-negligent mistake of facts, making his act illegal, is no defense to him in civil proceedings. In some jurisdictions inroads have been made on the rule in the case of certain wrongs to the person, but concerning interferences with property, whether realty or personalty, the courts are practically unanimous in imposing an absolute liability upon the defendant.1

In the following discussion attention is directed exclusively to the effect of mistake on contracts and on transfers of property, since it is in dealings of this kind that it is especially important for the business man to realize the risks of ignorance and mistake. In view of what has been said of the law's attitude in the case of torts, it will perhaps occasion no surprise to discover that our legal system is somewhat backward with regard to extending such relief as is consistent with practicability to individuals whose acts have been induced by a mistake, especially if it be a mistake of law. The practical bearing of this for the man who has no desire to experience "burnt fingers" need not be emphasized.

§158. Mistake Ordinarily Does Not Prevent Agreement.Underlying every bargain is an agreement. By agreement in a bargain, present-day law does not usually mean a true meeting

'See an article on Mistake in the Law of Torts by Professor Clarke B. Whittier, in 15 Harv. L. Rev. 335.

of the minds. The law's standpoint is, on the whole, not subjective but objective. The obligations of an agreement are measured by the promisor's intention,' the test being, what is each party reasonably entitled to expect by virtue of the words or acts of the other?

A striking illustration of this principle is afforded by those decisions which hold that an offeree's acceptance of an offer received by telegram may be valid in spite of the fact that it was erroneously transmitted to him through no fault of the offeror but solely through the fault of the telegraph company.

$159 AYER v. WESTERN UNION TELEGRAPH CO. Supreme Judicial Court of Maine, 1887. [79 Me. 493.]

[The offer as delivered to the offeree was to sell "800 M laths at 2 net cash," the word ten after 2 being omitted. This variation was not sufficiently great to prevent the offer from appearing to be correctly expressed to a reasonable man. Hence the court held that after the offer was accepted, the offeror was entitled to a remedy against the Telegraph Company for damages caused by its inaccurate transmission of the offer.]

§160. When Does Mistake Affect Agreement?-While the above case should not be regarded as embodying a rule which has received unanimous approval, it seems to be sound on principle, and it has the support of at least half of the authorities. If, in view of the position of the parties and all the surrounding circumstances, it can fairly be said that the parties expressed themselves with reference to one of the vital terms of the bargain in such a way that they have really said two different things, there is no agreement.

The situations in which the transaction is in this way rendered absolutely void as the result of a mistake are somewhat rare in occurrence. Perhaps the most common cases of this kind are certain cases in which the error relates to the identity of the other party to the bargain,-an error which is usually caused by fraudulent impersonation. Consider the effect of a mistake

'Mansfield v. Hodgdon (1888), 147 Mass. 304.

of this kind in the following two sets of facts. When a swindler obtains goods by appearing in person and pretending to be another, it has been held that the owner of the goods has manifested an intention to pass title to the swindler. On the other hand, however, when a swindler obtains the goods by writing for them and using the name of another, it has been held that the owner, although parting with the possession, has not parted with his title, and hence even an innocent purchaser could acquire no right to the goods. At first blush, these cases seem to be inconsistent with each other, but on analysis it appears that the decisions do not necessarily clash. In both cases the seller evinces a double intention when professing to transfer title, and since both of these intentions cannot be effectuated, the question arises as to which of the two is the dominant one. In the former case the swindler was identified by sight and hearing, and on this account it is not unreasonable to hold that although the seller manifested an intention to deal with the reputable party impersonated by the swindler, he also manifested an intention to deal with the man before him, and this was his dominant intention. In the latter case, however, the negotiations were entirely by correspondence, and this fact may well warrant the interpretation that, although the seller showed an intention to deal with the person who sent the offer, he also manifested an intention to transfer the property in the goods to the man of good credit and this was his dominant intention.

Less common is the case in which a mistake as to price is expressed in such a way that it operates to prevent the making of an agreement.

'Edmunds v. Merchants' etc. Trans. Co. (1883), 135 Mass. 283. The sale is of course voidable as against the defrauder or any person who is not an innocent purchaser.

'Cundy v. Lindsay (1878), 3 A. C. 459.

'Rupley v. Dagget (1874), 74 Ill. 351 is such a case.

Turner v. Webster (1880), 24 Kan. 38, is a case in which a contract of service was void because of a variation between the offer and the acceptance of it with regard to the element of compensation; inasmuch, however, as the plaintiff had rendered service in reliance upon the supposed contract the court required the party receiving the benefit of the services to pay "a just and reasonable price therefor." This result was reached, of course, by applying the principles of quasi contract.

Further illustrative material is to be found in those cases in which the parties have used ambiguous language in describing the subject-matter of their agreement.

§161

RAFFLES v. WICHELHAUS.

Exchequer, 1864. [2 Hurl. and Colt. 906.]

[Plaintiff sued for breach of alleged contract to buy cotton to arrive ex "Peerless" from Bombay. The defendant understood the agreement to refer to a ship "Peerless" which sailed from Bombay in October, whereas the plaintiff understood the agreement to refer to a different ship "Peerless" which sailed from Bombay in December. It was held that there was no contract.]

$162. Reasonable Construction of Words Used.-The same principle is applicable even in those cases in which the offeror uses language which is obviously ambiguous. Thus, for example, an offeree cannot insist on his own construction of an offer which was made by a cipher despatch ambiguous on its face.1

Mistake as to the very nature of the transaction also has occasionally such an effect upon the act of the mistaken party that it justifies his assertion that there was a failure on his part to express assent to the transaction. This may be true even though he attached his signature to a writing, provided he was not negligent and acted on the assumption that the writing was of a different character. Generally, of course, the inducing cause of such a mistake is a fraudulent representation of some kind by the other party, but what makes the transaction a nullity from the start so that even innocent third persons can acquire no rights under it, is neither the fraud nor the mistake as such, but the fact that no reasonable person present at the time of the transaction would have supposed that the defendant had expressed assent to an agreement of the kind it is now sought to charge him with.

§163.

FOSTER v. MacKINNON.

Common Pleas, 1869. [L. R. 4 C. P. 704.]

[The payee of a bill of exchange secured the defendant's indorsement of it by keeping the face of the bill out of sight and

Falck v. Williams (1900), A. C. 176.

telling the defendant that he was signing a guarantee. The court held that the instrument was a nullity even in the hands of a bona fide purchaser.]

BYLES, J.: It is invalid not merely on the ground of fraud, where fraud exists, but on the ground that the mind of the signer did not accompany the signature.

$164. Negligence in Making Agreement.-The great majority of the decided cases are in accord with this decision. The reason assigned by Mr. Justice Byles indicates perhaps that the court had not consciously as yet rejected the meeting-of-theminds theory of agreement, but the correctness of the decision does not depend on this reasoning. The decision applies only to those situations in which the signer of an instrument did not know even the purport of the transaction, and the doctrine is limited to those cases in which the defendant acted with due care. If he was guilty of negligence in failing to ascertain the contents of the document, he will be precluded from denying its validity as against a purchaser for value without notice. It would seem that ordinarily he should be deemed negligent if he signed in reliance solely upon the representation of the fraudulent party.1

§165. Equitable Relief Against Mistake.-In the great majority of cases mistake does not operate to prevent the making of a bargain which is binding at law. Generally speaking, whatever relief is available to a mistaken party must be sought on grounds which are purely equitable in their essence.

The broadest statement of all, and one which should not be forgotten, is that a person is bound to take into account every circumstance having a bearing upon the bargain before expressing his assent to it, simply because his act is one which may affect important interests of the other party. For this reason,

For one sort of case in which a jury is apt to find that under the circumstances such a signer was not negligent, see Lewis v. Clay (1898), L. J. Q. B. 224. Such is the situation in the usual case of a compromise or settlement between parties when the agreement is made with a full knowledge of the doubtful elements involved therein. It is a very different case when the compromise or settlement was expressly based by the parties upon a material fact regarding which both were mistaken. See, for example, Wheadon v. Olds (1838), 20

Wend. (N. Y.) 174.