CHARLES FRIED: It sad, in effect, that you, the buyer and the seller,

thought you had a deal.

It looked like a deal, but it turned out that you didn't have a deal.
It looked as if your minds had met, but they had not.
Because the date of sailing, something you hadn't thought about,
the particular ship involved had been left open.
So what looked like a perfectly clear and complete deal, was not.
So far as we know, Wichelhaus hadn't asked Raffles, back in February, hey,
where's my cotton?
Not a peep.
Needless to say in February, the price of cotton
was also below the contracted price of seventeen and a quarter pennies.
And whether you or I believe it, apparently the court
believed that Wichelhaus really had thought
that his cotton was on the October Peerless.
Or at least the court didn't feel in a position to question that fact,
and the seller, Raffles, was surely telling the truth.
He didn't own two ships, Peerless.
He didn't have any deal with the earlier ship,
and that's why he hadn't said anything when, in February, the earlier October
Peerless arrived in Liverpool.
Although I may have my doubts about Wichelhaus,
you might say that they are both equally innocent.
It was an accident, and nobody was at fault.
The accident was that there were two ships, Peerless,
and neither party had thought about it.
Now remember what happens when there's a storm at sea,
and goods are thrown overboard to lighten the ship, like Jonah, remember?
Everybody shares the loss.
Should that apply here?
Well that's an unusual rule.
You might say Raffles and Wichelhaus are equally innocent.
Somebody's going to lose quite a bit of money.
They are in this together, and they should share the loss.
That's not unreasonable, but it's not how the law works.
It doesn't just make up rules dividing losses.
There were a lot of people connected, indirectly, to the deal.
Maybe Raffles' son was counting on the deal, so dad would pay for his wedding.
Should he get some compensation too?
No, that's not how things work.
Here was the purported deal.
It looked like a deal, but it turned out it wasn't a deal.
It wasn't anybody's fault, and therefore, the whole thing is off.
No contract.
It looked like a contract, but it wasn't a contract.
So that's one kind of mistake, a mutual mistake.
It is one of the potential problems we'll cover in this unit.
Raffles and Wichelhaus made the mistake of thinking
they were contracting about the same thing, about cotton from the same ship,
and they were wrong.
Somebody got hurt, but it wasn't anybody's fault.
And as the saying goes, the loss lay where it fell,
and it fell right on Raffles.