The Satanita [1897] AC 59 is an English contract law

English contract law

English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...

 case, which in the Court of Appeal, concerned the formation of a contract. It is notable because it stands as an example of a case which does not fit the typical pattern of offer and acceptance that English law purports to require to find agreement.

Facts

Lord Dunraven

Windham Wyndham-Quin, 4th Earl of Dunraven and Mount-Earl

Windham Thomas Wyndham-Quin, 4th Earl of Dunraven and Mount-Earl KP PC , styled Viscount Adare between 1850 and 1871, was an Irish journalist, landowner, entrepreneur, sportsman and Conservative politician. He served as Under-Secretary of State for the Colonies under Lord Salisbury from 1885 to...

 entered his yacht in a race with the defendant owner of The Satanita. Each agreed to the rules, one of which was that rulebreakers are liable for all consequential damage, displacing the statutory position that a defendant’s liability is limited. On 5 April 1894 The Satanita collided with Lord Dunraven’s yacht, The Valkyrie II in the Firth of Clyde

Firth of Clyde

The Firth of Clyde forms a large area of coastal water, sheltered from the Atlantic Ocean by the Kintyre peninsula which encloses the outer firth in Argyll and Ayrshire, Scotland. The Kilbrannan Sound is a large arm of the Firth of Clyde, separating the Kintyre Peninsula from the Isle of Arran.At...

. It killed a crewmember and sank.

Judgment

The Court of Appeal held that there was a contract for the owner of The Satanita to pay Lord Dunraven compensation. Lord Esher MR held that a contract had been formed, since “one of the conditions is, that if you do sail for one of such prizes you must enter into an obligation with the owners of the yachts who are competing, which they at the same time enter into similarly with you… If that is so, then when they do sail, and not till then, that relation is immediately formed between the yacht owners’. Lopes LJ agreed that there was a contract.
Rigby LJ said that,

House of Lords

Without analysing the issue of whether there was a contract, the House of Lords upheld the Court of Appeal's decision.