Sherwood V.Walker

Sherwood, the plaintiff, came to Walker, the defendant, to buy a cow. During the course of the negotiation and inspection of the defendant’s livestock, the defendant showed the plaintiff some cattle which he described as barren, and would not breed. As a cow incapable of breeding wasn’t of much use other than consumption as meat, it was worth much less than a cow capable of breeding. The plaintiff thus contracted for o ne of the defendant’s barren cows at a substantial discount as compared to a fertile cow. Before delivery of the cow was made to the plaintiff, the defendant discovered that it was with calf, and, consequently, worth much more than the amount for which he had contracted to sell it. The defendant refused to sell the cow to the plaintiff and the plaintiff sued defendant for performance of the contract. The defendant argued that both parties were mistaken as to the fertility of the cow and both were aware of the large discrepancy in value of a fertile versus barren cow. The court refused the motion.. Defendant appealed.

Issue

Is a contract voidable if both parties to it are mistaken as to the very substance of the contract?

Holding

Yes.

The contract may be rescinded if both parties are mutually mistaken as to the basis of the bargain. Negotiations, on both sides, were made in the belief that the cow was worth nothing more than meat. As such the consideration bargained for in the contract was inadequate as it applied to the very substance of the contract.