A different case may be suggested from any yet considered.  Instead of a repugnancy between offer and assent which prevents an agreement, or between the terms of an agreement which makes it insensible on its fact, there may be a like repugnancy between a term of the contract and a previous representation of fact which is not expressly made a part of the contract.  The representation may have been the chief inducement and very foundation of the bargain.  It may be more important than any of the expressed terms, and yet the contract may have [314] been reduced to writing in words which cannot fairly be construed to include it.  A vendor may have stated that barrels filled with salt contain mackerel, but the contract may be only for the barrels and their contents.  An applicant for insurance may have misstated facts essential to the risk, yet the policy may simply insure a certain building or a certain life.  It may be asked whether these contracts are not void also.

There might conceivably be cases in which, taking into account the nature of the contract, the words used could be said to embody the representation as a term by construction.  For instance, it might be said that the true and well-understood purport of a contract of insurance is not, as the words seem to say, to take the risk of any loss by fire or perils of the sea, however great the risk may be, but to take a risk of a certain magnitude, and no other, which risk has been calculated mathematically from the statements of the party insured.  The extent of the risk taken is not specified in the policy, because the old forms and established usage are otherwise, but the meaning is perfectly understood.

If this reasoning were adopted, there would be an equal repugnancy in the terms of the contract, whether the nature of the risk were written in the policy or fixed by previous description.  But, subject to possible exceptions of this kind, it would seem that a contract would be made, and that the most that could be claimed would be a right to rescind.  Where parties having power to bind themselves do acts and use words which are fit to create an obligation, I take it that an obligation arises.  If there is a mistake as to a fact not mentioned in the contract, it goes only to the motives for making the contract.  But a [315] contract is not prevented from being made by the mere fact that one party would not have made it if he had known the truth.  In what cases a mistake affecting motives is a ground for avoidance, does not concern this discussion, because the subject now under consideration is when a contract is made, and the question of avoiding or rescinding it presupposes that it has been made.

I think that it may now be assumed that, when fraud, misrepresentation, or mistake is said to make a contract void, there is no new principle which comes in to set aside an otherwise perfect obligation, but that in every such case there is wanting one or more of the first elements which were explained in the foregoing Lecture.  Either there is no second party, or the two parties say different things, or essential terms seemingly consistent are really inconsistent as used.