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HodgsonBros.

vSouthAfricanRailways
1928CPD257
CapeofGoodHopeProvincialDivision
1928.April17,30.
BENJAMIN,A.J.P.

Flynote
Contract.Formation.Sale.Mistakeastoprice.
Headnote
Ifwhateveraman'srealintentionmaybe,hesoconductshimselfthatareasonablemanwouldbelievethathewas
assentingtothetermsproposedbytheotherpartyandthatotherpartyuponthatbeliefentersintothecontract
withhim,themanthusconductinghimselfwouldbeequallyboundasifheintendedtoagreetotheotherparty's
terms.
On4thMay,1927,plaintiffswrotetotheMinisterofRailwaysofferingforsaleacertainlorryatapriceof500.
Furthercorrespondencepassed,betweenthepartiesand,onJuly13theAssistantGeneralManagerinformedthe
1928CPDatPage258

plaintiffbyletterthattheRailwayStorekeeperwouldaddresshimonthematter.OnAugust8ththeplaintiffswrote
totheRailwayStorekeeperaskinghimtoletthemknowwhattheGovernmentintendedtodo.OnAugust11ththe
storekeeperrepliedasfollows:"Referringtoyourletterofthe8thIampreparedtopassanorderonyouforthe5
tonlorrythispricetoincludecertainsparesyouholdforthelorryandIshallbegladtohearifyouareagreeable
toaccepttheseterms.Onreceiptofyourreply,orderwillbepassedatonceandsentontoyou."Tothisplaintiffs
repliedthattheywerequiteagreeabletoincludethesparesandaskedforinstructionfordelivery.OnAugust16th
thestorekeepertelegraphedthathehadomittedthepriceinhisletter,andthatthepricewas300.Theplaintiffs
infurthercorrespondenceallegedthatdefendantwasboundbycontractto500,whiledefendantdeniedthatany
contracthadbeenconcluded.ItwasclearfromtheevidencethatuntilthetelegramofAugust16thnomentionof
anypriceotherthanthatof500wasmadetotheplaintiffs,butthatwhenthestorekeeperwrotetheletterof
August11thheknewnothingoftheofferof500andintendedtooffer300inaccordancewithinstructionshehad
receivedandhadomittedthepricethroughinadvertence.Inanactionfordamagesforbreachofcontract.
Held,thattheeffectoftheletterofthe11thAugust,readwiththeearliercorrespondence,wastoinducethe
plaintiffstobelievethatdefendantwaspreparedtopurchasefor500providedthespareswereincluded,andthat
whentheplaintiffsagreedintheirletterofAugust13thabindingcontractwasconcludedbetweentheparties.
CaseInformation
Actionfordamagesforbreachofcontract.
Thefactsappearfromthejudgment.
Evidencewasled.
W.H.Mars,K.C.(withhimT.G.Duncan),fortheplaintiffs:Astothequestionwhetherthepartieswereadidemasto
theprice,thetestisnotwhatthedefendantsintended,butwhattheydid.SeeSmithvHughes(L.R.6QB597)
Pieters&Co.vSalomon1911AD121atpp.130,137)Turner,Visser&Co.vMinisterofDefence1916CPD92Sterne
vTownCouncilofQueenstown(16EDC13).Astotheauthorityofthestorekeeper,see Turner,Visser&Co.vMinister
ofDefence(supra).Thecorrespondenceisconclusiveonthequestionofauthority.
H.A.Fagan,K.C.(withhimT.Dnges),forthedefendants:Thepartieswereneveradidem.TheletterofAugust11th
mentioning"thisprice"shouldhaveputplaintiffsontheirguard.SeevanRensbergvRice1914EDL217 Burrougs
andWattsLtd.vCampbell(22SC228).Inorderthatthedefendantsshouldbeheldboundbyacontracttheynever
intendedtomake,thelanguageusedmustbeclearandunequivocal.SeePotgietervNewYorkMutualLifeInsurance
Society(17SC67)MaritzvPratley(11SC345)KerronFraud(5thed.,p.507).
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TheCourtwillnotenforceacontractwhentherehasbeenmistake.SeeUmhlebivEstateUmhlebi(19E.D.C.atp.
248).
Mars,K.C.,inreply:TheCourtmustlookatallthecorrespondence.SeeRuffelvWebb1919OPD122.Astomistake,
seeHeatlievColonialGovernment(5SC353).
Cur.adv.vult.
Postea(April30th).
Judgment

BENJAMIN,A.J.P.:Thisisanactioninwhichtheplaintiffsclaimasumof3947s.1d.asandbywayofdamagesfor
breachofcontract.Theyallegethatdefendantpurchasedfromthemacertain5tonKarrierlorryfor500,that
defendantrepudiatedthecontractandthatbyreasonthereofplaintiffshavesufferedtheamountofdamages
claimed.Inhispleathedefendantallegedvariousgroundsofdefencebutsubstantially,asthecasewasarguedat
thehearing,thegroundofdefencetakenupwasthattherewasnoconcludedcontractbetweentheparties.The
matterturnslargelyuponthecorrespondencebetweentheparties.Negotiationswereinitiatedbyaletterdated
the4thofMay,1927,addressedbyplaintiffstotheMinisterofRailways,themorematerialportionofwhichreads
asfollows:"WebelievethatyouintendstartingaroadmotorservicebetweenFraserburgandFraserburgRoad
shortly.Forthelastcoupleofyearswehavebeendoingthemotortransportbetweenaboveplaceswitha5ton
Karrieranda1tonReolorry...Boththeselorriesareinperfectrunningorder,andopenforinspectionatanytime.
WearepreparedtoselltheselorriestotheGovernmentatgreatlyreducedprices,namelythe5tonKarrierat
500,andthe1tonReoat150..."
Tothiscameareplydatedthe9thMay,1927,statingthatthematterhadbeenreferredtotheGeneralManagerof
Railways.Thiswasfollowedbyseveraltelegramsbetweenthepartiesfixingatimeandplaceforinspectionofthe
lorry,etc.,bydefendant'sinspector,inaccordancewithwhichaninspectionwasmadebyoneAnderson.Onthe8th
ofJuneplaintiffswrotetotheGeneralManagerofRailwaysasfollows:"Withfurtherreferencetoourletterdated
4thult.andaddressedto'MinisterofRailways'reKarrierandReolorry.Wewishtonotifyyouthatwehave
disposedofourReolorry,andwouldthusbepleasedifyouwouldconsiderthematteroftakingoverthe5ton
Karrieronly."Andonthe9thJulytheywrotealetterthemorematerialpartofwhichreads:"Withfurtherreference
toourletterdated8thult.re5
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tonKarrierlorry.Wewillbegreatlyobligedifyoucouldletusknowbeforetheendofthismonth,whetherthe
Governmentintendstakingoverourlorryornot."
Onthe13thJuly,1927,theAssistantGeneralManagerwrotetheplaintiffs:"Withreferencetomyletterofthe9th
instant,relativetoyouroffertoselltotheAdministrationa5tonKarrierlorry,Ihavetosaytherailwaystorekeeper
hasbeenrequestedtoaddressyouonthesubject."Onthe27thJulytheGeneralManagerwroteplaintiffs:"With
referencetoyourlettersofthe8thultimoandthe9thinstant,reference1347and1451respectively,inregardto
thedisposalofa5tonKarrierlorry,Ihavetostatethatitisunderstoodthatyouhavebeeninformedbythe
AssistantGeneralManager,CapeTown,thattherailwaystorekeeper,SaltRiver,willcommunicatewithyouonthis
matter."
Onthe3rdofAugustplaintiffswrotetotheGeneralManagerdrawingattentiontothefactthattheyhadhadno
communicationfromtherailwaystorekeeper.Onthe8thAugusttheywrotedirecttotherailwaystorekeeperasking
himtoletthemknowwhattheGovernmentintendeddoing.Thiselicitedareplydatedthe11thAugust,uponwhich
letterthiscaseturns.Itreadsasfollows:"Referringtoyourletterofthe8thinstant,Iampreparedtopassan
orderonyouforthe'Karrier'5tonlorrythispricetoincludecertainsparesyouholdforthelorry,andIshallbe
gladtohearifyouareagreeabletoaccepttheseterms.Onreceiptofyourreply,orderwillbepassedatonceand
sentontoyou."Tothisplaintiffsrepliedonthe13thofAugustasfollows:"Wethankyouforyoursdated11thinst.
ref.No.J.B.15/1.Wearequiteagreeabletoacceptyourtermsasregardsincludingallspareswiththe5tonlorry
'Karrier.'Pleaseletusknowwhenandwherewemustgivedelivery.Weareenclosingherewithlistofspares."
ThislastletterbearstheSouthAfricanRailwaysdatestampthe16thAugust,1927,whichItakeitwasthedateof
receiptoftheletter.Onthesamedatetherailwaystorekeepertelegraphedtoplaintiffs:"L.596.Yourletter13th
stopMyletterofeleventhomittedpriceforlorryandspareswhichAdministrationispreparedtopaynamelythree
hundredpoundswireifyouareaccepting."Thiswasfollowedbyseveraltelegramsandothercorrespondence
betweenthestorekeeperandplaintiffsinwhichtheplaintiffsontheonehandallegedthatdefendantwasbound
bycontracttopurchasefor500andthedefendantrepudiated.
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Therailwaystorekeepergaveevidenceatthetrialfordefendantandstatedthatitwashisintentiontoinsertthe
priceof300inhisletterofthe11thAugustbutowingtopressureofworkthishadbeenoverlooked.Itisclear
fromhisevidencethathewasunawareofthefactthatplaintiffshadmadetheoffertosellthelorrytodefendant
for500,heneverhavingseentheearliercorrespondence,whichhadbeendealtwithbyanotherdepartment.
Muchblamecannotthereforebeattachedtohim,butcertainlytheeffectofhisletterofthe11thAugustread
togetherwiththeearliercorrespondencewastoinducetheplaintiffstobelievethatdefendantwaspreparedto
purchasethelorryfor500providedthesparesreferredtointhatletterwereincluded.Thistheplaintiffsagreedto
intheirletterofthe13thAugustandthusinmyopinioncompletedabindingcontractbetweentheparties.Itmay
havebeenunfortunatefordefendant,buthavinginducedtheerroneousbeliefinthemindsofplaintiffs,theywere
boundthereby,whatevertheiractualintentionmayhavebeen.Theprincipletobeappliedinsuchacaseisclearly
statedbyBLACKBURN,J.,inthecaseofSmithvHughes(L.R.6Q.B.p.607)intheseterms:"Ifwhateveraman's
realintentionmaybe,hesoconductshimselfthatareasonablemanwouldbelievethathewasassentingtothe
termsproposedbytheotherparty,andthatotherpartyuponthatbeliefentersintothecontractwithhim,theman
thusconductinghimselfwouldbeequallyboundasifhehadintendedtoagreetotheotherparty'sterms."
Inmyopinionthereforedefendantwasboundbycontracttotakethelorryfor500andcommittedabreachby
refusalsotodo,inrespectofwhichtheplaintiffsareentitledtodamages.Thereisnodisputeastotheamountof
damages.Thelorrywassoldtothebestadvantagebyplaintiffsforthesumof150inconnectionwiththesale
theyincurredexpensesincludingrailagetoCapeTownamountingto447s.1d.,sothattheyhavesuffered
damagesinalltotheamountof3947s.1d.forwhichjudgmentmustbegivenintheirfavourtogetherwithcosts.
Plaintiffwillbedeclaredanecessarywitness.

Plaintiff'sAttorneys:Bisset,Hofmeyr&BoehmkeDefendant'sAttorneys:J.S.deVilliers&Son.

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