ContractsProf Blog

Editor: Jeremy Telman
Oklahoma City University
School of Law

Wednesday, April 13, 2022

Aristotelian Categories and the Contracts Doctrine of Mistake

Aristotle_Altemps_Inv8575I have been thinking about Aristotle more than usual, and more than I care to do, because I have fallen down a rabbit hole, Peter Adamson's delightful podcast, History of Philosophy Without Any Gaps.  It was great fun, and then we got to Aristotle.  Now, it's sometimes fun, but also a bit of a slog.  I'm not sure if I'm going to make it to the Renaissance.  I may bolt and try my hand at Indian or African philosophy.

To be clear, I don't much care for Aristotle.  Not one bit.  As a result, I know and understand very little of Aristotle's philosophy but, as the Supreme Court once said of pornography, I know it when I see it.  

And I always see it when I teach mistake, because the old chestnuts, Sherwood v. Walker and Wood v. Boynton, seem to me to be based on Aristotelian distinctions between accidental (value) and essential qualities.  But both seem to me to get the analysis exactly wrong.  I am happy to have discovered that I am not alone in remarking on the Aristotelian nature of the inquiry.  Robert Birmingham did so in a philosophical reflection in the form of an essay in 1987.  In a 1999 article, Nascent Modernity in the Case of Sherwood v. Walker -- An Intertextual Proposition (35 Willamette L. Rev. 315), Alani Golanski expressed my view precisely.  These courts engaged in Aristotelian terminology but got the analysis completely wrong.  

[T]he Sherwood court misused the Aristotelian vocabulary. In those terms, it was precisely the “substance” of the thing for which Sherwood and Walker had bargained about which there was no mistake. In other words, as understood by Aristotle, examples of substance are “man,” “horse,” or “cow.” The parties in Sherwood knew they were dickering over a cow and therefore fully appreciated the Aristotelian substance of the thing.
. . . In Aristotle's scheme, an accident may or may not belong to a given thing. For example, a horse may be “awake” or “asleep.” “Likewise also whiteness; for there is nothing to prevent the same thing being at one time white and at another not white.” More to the point, a cow may be at one time “barren” and at another “fertile.”
And so, when I think about Sherwood and Boynton, I find them wrongly decided in their own Aristotelian terms every time.  Sherwood was about a cow, and the "cowness" of Rose 2d of Aberlone was never at issue.  There was no mistake as to the essence of the consideration and so, by the reasoning of that court, recourse to mistake doctrine should have been unavailing.  On the other hand, a topaz and a diamond are different things, and so the mistake in Boynton went to the essence of the matter, not to its accidental qualities.  The Eagle Diamond should have been returned to the finder.
 
I love these cases, but hate both their reasoning and their results.  Perhaps I could live in an Aristotelian world if those courts would apply that reasoning correctly.  But I prefer to live in the world of the Restatement, in which liability in these cases tends to come down to the question of who bore the risk of the mistake.
 

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Comments

I have always assumed that this classical pair of cases was selected for inclusion in the canon precisely because they were both wrongly decided. i used to teach that casebook editors paired them in order to dissuade students from reasoning on the basis of essence and accident and to liberate them o engage in decisions based on pure positivism: the court will assign the risk of mistake where it will for its own reasons. i think that the Sherwood majority opinion shows that judges should not bandy with philosophy and perhaps that law professors should not either, at least without the constraints of a disciplinary lash from someone who knows what they are talking about.

Posted by: Sidney DeLong | Apr 13, 2022 10:36:16 PM

Is the world better off if judges and law professors bandy with economics instead of philosophy?

Posted by: Jeremy Telman | Apr 14, 2022 10:17:39 AM

Oddly enough, I agree that Sherwood v. Walker was wrong because both parties had full information and thus (necessarily in my view) Wood v. Boynton was correct.

But I don’t see that analysis as Aristotelian, but simply as practical reality. To us modern academics, a cow is a cow, and a breeding bow is just a cow that has an extra features, like an SUV that comes with added GPS navigation or leather seats. But to a farmer, a breeding cow is “capital equipment” that produces new goods, while infertile cattle are existing inventory to be sold. A breeding cow is to an infertile cow as a Toyota plant is to a RAM4 pickup. They are very different things.

I don’t think the essential distinction makes a difference, chiefly the thing to be exchanged was clearly known to both parties, and it doesn’t matter what it “really” was in some other sense.

Really enjoying your posts lately, Jeremy!

Posted by: Frank Snyder | Apr 14, 2022 12:45:40 PM

Nothing lifts my spirits like hearing that the Founding Editor is enjoying the Blog!!

Can you say more about why you think Wood v. Boynton is correct? Are we just setting aside questions of allocation of risk of mistake? You say that in Sherwood both parties had full information. I'm not sure what that means. Do you mean both parties were equally capable of discovering that Rose was fertile? Are you saying that in Wood neither had full information? And that is why seller should lose? In short, I don't follow.

Posted by: Jeremy Telman | Apr 15, 2022 6:52:27 AM

Oh, you’ve taken this well beyond what we used to do, Jeremy. I enjoy it every day. Give my kudos to your students, too—they’re doing a terrific job.

I’m not a fan of mutual mistake. Where two parties are negotiating a particular, easily identifiable thing, what’s happening in their minds seems to me irrelevant. In Wood, the “thing” was more valuable than either knew. That means one of them was going to get a windfall. A seller always takes the risk that the thing is worth more than he sells it for, a buyer always takes the risk that it’s worth less (e.g., Tom Brady’s football). Absent a warranty, (à la Brady), or a knowing false statement by a party, I see no reason to reallocate the risk. Suppose Wood had sold it to X, who sold it to Y, who sold it to Z, who a year later took it to a jeweler and discovered it was a diamond, who ought to get the excess value? Wood?

I was very unclear in what I said about Sherwood. It was Walker’s cow. No one knew more about her than he did. In 1887 no one could tell whether a cow was with calf until much later in the gestation period. Walker sold her for what he thought was a fair price. That she turned out to be fertile made her much more valuable, so one of them was going to get a windfall. Since the buyer takes the risk that the cow will be worth less than what he paid, the buyer should get the windfall.

Posted by: Frank Snyder | Apr 16, 2022 10:56:46 AM