Sherwood v. Walker – Case Brief Summary

Summary of Sherwood v. Walker, 66 Mich. 568, 33 N.W. 919 (1887).

Facts

Sherwood (P) contracted to purchase a cow from Walker (D). Walker showed Sherwood a cow, Rose 2d of Aberlone, which he believed to be barren. Sherwood agreed to purchase the cow for $80. If the cow had been fertile it would have been worth $750 to $1000. Walker later discovered that the cow was with calf and refused to complete the transaction.

Sherwood brought suit and took possession of the cow via a writ of replevin. At trial, Walker showed that at the time of the sale both parties had believed the cow to be barren and both knew that the value of a fertile cow was much higher than that of a barren cow. The judge instructed the jury that it was immaterial whether the cow was barren. The jury returned a verdict in favor of Sherwood and Walker appealed.

Issue

  • Can a mutual mistake regarding the substance of the subject matter of a contract render a contract unenforceable?

Holding and Rule

  • Yes. A mutual mistake regarding the substance of the subject matter of a contract may render that contract unenforceable.

There is no contract if there is a difference or misapprehension as to the substance of the thing bargained for, or if the thing actually delivered or received is different in substance from the thing bargained for and intended to be sold. However, if there is merely a difference as to some quality or accident, even though the mistake may have been the actuating motive of either or both of the parties, the contract remains binding. The only difficulty in such a case is to determine if the mistake is as to the substance of the whole contract. Under prior law it has been held that when a horse is bought under the belief that he is sound, and both the buyer and seller have this honest belief, the purchaser must stand by his bargain and pay the full price unless there was a warranty.

The court held that in this case the mistake went to the whole substance of the agreement. This mistake was not about the mere quality of the cow but to its very nature, i.e. a fertile cow as opposed to a barren cow.

Disposition

Reversed and remanded with new jury instructions.

Dissent (Sherwood)

There is no pretense that the plaintiff bought the cow for beef. There is nothing indicating that he would have bought her at all only that he thought she might be made to breed. From the facts it turns out that Sherwood was more correct than the defendant as to one quality of the cow. Walker made a mistake about the quality of the cow and unless the plaintiff knew or should have known about that mistake he cannot be charged with taking advantage of the situation. The contract is valid and should be enforced.

Notes

A contractual mistake ‘is a belief that is not in accord with the facts’. See 1 Restatement Contracts, 2d, ยง 151, p 383. The erroneous belief of one or both of the parties must relate to a fact in existence at the time the contract is executed. The belief which is found to be in error may not be, in substance, a prediction regarding a future occurrence or non-occurrence.

See Konic International Corp. v. Spokane Computer Services, Inc. for a law school contracts case brief involving an issue of mutual mistake in connection with a sale of computer equipment.


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