## Facts

- The dispute arose from a contract for the sale of Surat cotton between Mr. Raffles (claimant) and Mr. Wichelhaus (defendant).
- The contract stated that the cotton was "to arrive ex Peerless from Bombay."
- There were two ships named "Peerless" departing from Bombay—one in October, the other in December.
- Mr. Wichelhaus intended delivery on the October Peerless; Mr. Raffles referred to the December Peerless.
- Cotton arrived on the December vessel, but Mr. Wichelhaus refused delivery and payment, citing late arrival.
- Mr. Raffles sued for breach of contract over non-acceptance.

## Issues

1. Whether a valid contract existed given the parties’ differing interpretations of "ex Peerless" due to the existence of two ships with that name.
2. Whether the ambiguity created a mutual mistake precluding consensus ad idem and thus prevented contract formation.

## Decision

- The court found for Mr. Wichelhaus, denying Mr. Raffles' claim.
- It ruled that the ambiguity of the term "Peerless" prevented a meeting of minds.
- The contract was held void due to absence of consensus ad idem; no binding agreement was formed.

## Legal Principles

- Mutual mistake arises where both parties are mistaken, but about different aspects of a term, not a shared basic fact.
- Consensus ad idem (meeting of the minds) is essential; if objectively ambiguous, there is no valid contract.
- The objective test in contract interpretation looks to whether a reasonable person could determine a single, clear meaning of the term.
- Raffles v Wichelhaus is distinct from cases of common mistake (where both share a factual error) and unilateral mistake (where only one party is mistaken and the other is or should be aware).
- Ambiguity within contractual terms can render a contract void if the terms cannot be interpreted consistently.

## Conclusion

Raffles v Wichelhaus is a leading case on mutual mistake and objective ambiguity, confirming that where no consensus ad idem exists due to unclear contractual terms, no enforceable contract is formed. The decision highlights the necessity of clarity and precision in contract drafting to avoid disputes and failed agreements.


Raffles v Wichelhaus (1864) 2 H & C 906