be fulfilled in a sense to which the mind of the promisor did $ 850. Proceeding thereupon to apply this rule to the oats case under consideration, he continued: "If, therefore, in the present case, the plaintiff knew that the defendant, in dealing with him for oats, did so on the assumption that the plaintiff was contracting to sell him old oats, he was aware that the defendant apprehended the contract in a different sense to that in which he meant it, and he is thereby deprived of the right to insist that the defendant shall be bound by that which was only the apparent and not the real bargain.". § 851. Further as to mistake of quality.- Sir Frederick Pollock, in his work on Contracts,' states the question now under consideration in this way: "Suppose A and B are the contracting parties; and let us denote by X a fact or state of facts materially connected with the subject-matter of the contract, which is supposed by A to exist, but which in truth does not exist, and is known by B not to exist. Then we have to ask these questions: "1. Does A intend to contract only on the supposition that X exists? which may be put in another way, thus: If A's attention were called to the possibility of his belief in the existence of X being erroneous, would he require the contract to be made conditional on the existence of X? "2. If so, does B know that A supposes X to exist? "3. If B knows this, does he also know that A intends to contract only on that supposition? $852. "If the answer to any one of these questions is in the negative," he continues, "it seems there is no binding contract. But it is to be observed that a negative answer to the second question will generally require strong evidence to establish it, and that, if this question be answered in the affirmative, an affirmative answer to the third question will often follow by an almost irresistible inference. . . . If the quesPollock on Contracts (2d Eng. ed.), *429. tions above stated be all answered in the affirmative, either by positive proof or by probable and uncontradicted presumption from the circumstances, then it may be considered either that the case becomes one of fraud, or at least that the party who knew the true state of the facts, and also knew the other party's intention to contract only with reference to a supposed different state of facts, is precluded from denying that he understood the contract in the same sense as that other, namely, as conditional on the existence of the supposed state of facts." § 853. Same rule applies in equity. The rule of the last section applies also in equity. Thus where, in preparing a lease, the lessor by mistake inserted a less sum as rent than that previously agreed upon, and the lessee signed and accepted the lease with knowledge, as the court found, that the lessor was laboring under the mistaken idea that the true amount was inserted, it was held that the lessor was not bound.' Said Sir John Romilly, M. R.: "It was certainly not a mistake committed by her [the lessee], and thereupon it is argued that there must be an end of the case, for that, to enable this court to interfere to rectify a mistake, the mistake must be mutual. But though, as a general rule, this is correct, it does not apply to every case. The court will, I apprehend, interfere in cases of mistake, where one party to the transaction, being at the time cognizant of the fact of the error, seeks to take advantage of it." § 854. Effect of the mistake.- The effect of the mistake, where it has any effect at all, is to avoid the contract, at the option of the mistaken party, for he may abide by it if he so elects. If he seeks to repudiate it, he has at law two remedies. If it be executory, he may refuse performance upon the ground of the mistake; if it be executed, he may, upon putting the other party in statu quo- a subject to be considered in a following chapter,2— have restitution of what he has parted with. 1 Garrard v. Frankel (1862), 30 Beav. 445. 2 See post, § 914. 3 See Kelly v. Solari (1841), 9 M. & W. 54. In equity he may resist specific performance, or may proceed to have the contract set aside.1 1In Webster v. Cecil (1861), 30 Beav. 62, specific performance of a contract for the sale of land was refused where the vendor, by mistake in addition, had inserted a smaller 706 price than he intended, of which the other party must have been aware, and the vendor promptly repudiated the agreement upon discovering the mistake. § 855. What meant by misrepresentation.-The term "misrepresentation" is used in a variety of senses. To the popular, and to some extent to the legal, mind, it seems necessary to convey the idea of fraud, and, as will be seen in the following chapter, many misrepresentations are fraudulent, but all are not necessarily so. A misrepresentation is an untrue representation, and an untrue representation may be made in perfect innocence of a fraudulent intent, and with a firm belief at the time that the representation is true. To make a representation known to be untrue may be fraud though it was made in good faith; and to make a representation as true when the maker does not know whether it is true or not may be fraud; but the case now to be considered is that in which a person, who has no intention to deceive, makes a representation which he then believes to be true but which subsequently proves to be 1 untrue. 856. How misrepresentation to be distinguished from fraud. "The practical test of fraud as opposed to misrepresentation," says Sir W. R. Anson in his work on Contract, "is 1 See post, § 874 et seq. 2 See post, 874-876. 3 3 Anson on Contract (7th ed.), 143. that one does, and the other does not, give rise to an action ex delicto. Fraud is a wrong and may be treated as such, besides being a vitiating element in contract. Misrepresentation may invalidate a contract, but will not give rise to an action ex delicto, the action of deceit.1 Knowledge that a statement is false may not be inconsistent with honesty of motive in making it; on the other hand, there may be no clear knowledge that the statement made is false, but a dishonest, or at any rate self-seeking, motive for wishing that it should be believed by the party to whom it is made." 2 1 Mr. Anson here quotes from the opinion of Cotton, L. J., in Arkwright v. Newbold, 17 Ch. D. 320, as follows: "It must be borne in mind that in an action for setting aside a contract which has been obtained by misrepresentation the plaintiff may succeed, though the misrepresentation was innocent; but in an action of deceit the representation to found the action must not be innocent, that is to say, it must be made either with a knowledge of its being false or with a reckless disregard as to whether it is or is not true." 2 Mr. Anson here quotes from Tindal, C. J., in Foster v. Charles, 7 Bing. 107: "It is fraud in law if a party make representations which he knows to be false and injury ensues, although the motives from which the representations proceeded may not have been bad." And continues: "In Polhill v. Walter, 3 B. & A. 114, Walter accepted a bill of exchange drawn on another person; he represented himself to have authority from that other to accept the bill, honestly believing that the acceptance would be sanctioned, and the bill paid by the person for whom he professed to act. The bill was dis honored at maturity, and an indorsee, who had given value for the bill on the strength of Walter's representation, brought against him an action of deceit. He was held liable, and Lord Tenterden, in giving judgment, said: 'If the defendant, when he wrote the acceptance, and thereby, in substance, represented that he had authority from the drawee to make it, knew that he had no such authority (and upon the evidence there can be no doubt that he did), the representation was untrue to his knowl edge, and we think that an action will lie against him for the damage sustained in consequence.' It will be observed that in this case there was a representation of facts known to be false; that the knowledge of the untruth of the statement was the ground of the decision; it is, therefore, clearly distinguishable from a class of cases in which it has been held, after some conflict of judicial opinion, that a false representation believed to be true by the party making it will not give rise to the action of deceit," citing Derry v. Peek, 14 App. Cas. 337. "Representations made for an honest purpose, and with fair reason |