Raffles v Wichelhaus

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Raffles v Wichelhaus
Court Court of Exchequer
Citation 2 Hurl. & C. 906
159 Eng. Rep. 375
Date decided January 20, 1864

Facts

  • In the early 1860s, the Union had cut off shipments of cotton from the South to the textile mills in Britain
    • As a result, 100,000s of textile workers in Britain had become un-employed
  • Wichelhaus = defendant = British cotton broker purchasing cotton from production sites other than the Confederate States of America
  • Raffles = plaintiff = cotton producer in Bombay, India
  • Raffles signed a contract to sell 125 bales of cotton originating in India to Wichelhaus
  • Raffles offered to sell a certain amount of cotton to Wichelhaus (Defendant). The cotton would be brought from India on a ship called the Peerless.
  • There were apparently 2 ships with that name, & the Defendant and the Plaintiff were each thinking about different ones.
    • Peerless1: One was supposed to leave from Bombay in October, and
    • Peerless2: the other was supposed to leave in December.
    • (We are using Peerless1 & Peerless 2 here for our case clarity. Both ships, again, were simply named Peerless.)
  • Peerless1 (October) didn't deliver any cotton to Wichelhaus.
  • When the cotton arrived in England aboard Peerless2 (in December), the Defendant (Wichelhaus) refused to pay.
    • The ship that Wichelhaus was expecting to bring him the cotton had left India in October (Peerless1).
  • Wichelhaus didn't want to purchase the cotton in December price of the price hike between October & December!

Procedural History

  • Raffles sued Wichelhaus in the British court of the exchequer.
  • Raffles announced that he had supply the correct amount & grade of cotton from Bombay to Liverpool aboard Peerless.
  • Raffles complained that Wichelhauss had breached the contract by refusing to accept & pay for the cotton.

Issues

Can parol evidence be offered to establish the meaning of a latent ambiguity in what otherwise appears to be an un-ambiguous contract?

Should the contract be enforced?

Arguments

  • Raffles (the cotton seller) argued that the contract didn't specify a shipping date or arrival date.
  • Raffles didn't want parol evidence
  • Wichelhaus argued that the contract assumed that there was only 1 relevant vessel named Peerless

Holding

Wichelhaus's parol evidence (oral extrinsic evidence) is admissible.

The contract is not enforceable.

Judgment

Judgment for the Defendant (Wichelhaus)

Reasons

  • Each person was agreeing to a different thing.
  • The intent of every party was not what the other party thought.
  • There was no meeting of the minds.

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