The question now before us is the effect of a misrepresentation which leads to, but is not a part of, the contract.  Suppose that the contract is in writing, but does not contain it, does such a previous misrepresentation authorize rescission in any case? and if so, does it in any case except where it goes to the height of fraud?  The promisor might say, It does not matter to me whether you knew that your representation was false or not; the only thing I am concerned with is its truth.  If it is untrue, I suffer equally whether you knew it to be so or not.  But it has been shown, in an earlier Lecture, that the law does not go on the principle that a man is answerable for all the consequences of all his acts.  An act is indifferent in itself.  It receives its character from the concomitant facts known to the actor at the time.  If a man states a thing reasonably believing that he is speaking from knowledge, it is contrary to the analogies of the law to throw the peril of the truth upon him unless he agrees to assume that peril, and he did not do so in the case supposed, as the representation was not made part of the contract.

It is very different when there is fraud.  Fraud may as well lead to the making of a contract by a statement outside the contract as by one contained in it.  But the law would hold the contract not less conditional on good faith in one case than in the other.

To illustrate, we may take a somewhat extreme case.  A says to B, I have not opened these barrels myself, but they contain No. 1 mackerel:  I paid so much for them to so and so, naming a well-known dealer.  Afterwards A writes B, I will sell the barrels which you saw, and their [324] contents, for so much; and B accepts.  The barrels turn out to contain salt.  I suppose the contract would be binding if the statements touching the contents were honest, and voidable if they were fraudulent.

Fraudulent representations outside a contract can never, it would seem, go to anything except the motives for making it.  If outside the contract, they cannot often affect its interpretation.  A promise in certain words has a definite meaning, which the promisor is presumed to understand.  If A says to B, I promise you to buy this barrel and its contents, his words designate a person and thing identified by the senses, and they signify nothing more.  There is no repugnancy, and if that person is ready to deliver that thing, the purchaser cannot say that any term in the contract itself is not complied with.  He may have been fraudulently induced to believe that B was another B, and that the barrel contained mackerel; but however much his belief on those points may have affected his willingness to make the promise, it would be somewhat extravagant to give his words a different meaning on that account.  “You” means the person before the speaker, whatever his name, and “contents” applies to salt, as well as to mackerel.

It is no doubt only by reason of a condition construed into the contract that fraud is a ground of rescission.  Parties could agree, if they chose, that a contract should be binding without regard to truth or falsehood outside of it on either part.