Smith V. Hughes

Abstract

Smith v. Hughes is a venerable and often cited case which is as familiar as it is foundational to students’ understanding of Contract Law. It is frequently alluded to as the best exemplar of the Objectivity Test in practice. The case revolves around a dispute over sale of oats. An objective approach was applied where the fact that the parties were 'ad idem' and at cross purposes to the terms of the case were considered to be of the most importance, regardless of subjective considerations. The Jury spoke about the ‘Caveat Emptor’ Rule – Let the Buyer Beware wherein the element to void the contract is that the jury should not merely find that the seller is selling old oats but also that the buyer shall believe that he is buying old oats as the seller contracted to sell old oats. The consensus ad idem of parties in the contract was missing. The case draws a picture wherein it requires to accept an incoherent approach of Contract law which confidently asserts the dominance of objective test in ascertaining contracting parties’ intentions but might permit a switch to subjective approach occasionally. The author will elaborate, on the principle of objectivity approach as well as the switch to subjectivity approach which deals with the intention of parties, in the paper.