A contract was made for 125 bales of cotton to arrive on a ship named "Peerless" from Bombay.Unbeknownst to either party to the contract,there were two ships named "Peerless," both of which were sailing from Bombay.One sailed in October and the other in December.The buyer had in mind the ship sailing in October,but the seller had in mind the ship sailing in December.Each party held his belief in good faith.When the goods failed to arrive on time,the buyer sued for breach of contract.The court found:
A)the seller was in breach and must pay damages.
B)the seller was guilty of fraud in the inducement for failing to disclose to the buyer which ship would contain the goods.
C)no contract existed due to mistake in meaning of terms.
D)two of the above, (a) and (b).

Question

Quizplus · Accepted Answer

The court would rule that there was no contract due to the mistake in the meaning of the term "Peerless." Both parties had a different understanding of which ship would contain the goods, and therefore, there was no meeting of the minds on the essential terms of the contract. Neither party acted in bad faith or committed fraud, and the court would not find the seller in breach since there was no contract to breach.

A Contract Was Made for 125 Bales of Cotton to Arrive