Critically discuss the law governing unilateral mistake in relation to Essay

Critically discuss the law governing unilateral mistake in relation to the identity of the other contracting party - Essay Example Lindsay & Co knew of a business named as 'Blenkiron & Co', and knew them to be reputable and residing at the address represented. Under this guise, and the rogue's signing of his letters as 'Blenkiron & Co', Lindsay & Co sold the rogue a large order of handkerchiefs. Blenkarn then sold the goods - 250 dozen linen handkerchiefs - to an innocent third party, Cundy. Cundy sued Lindsay & Co for conversion of the goods. The lower court held that Lindsay could not recover the handkerchiefs from Cundy. Blackburn J,. They reasoned: â€Å"The rule of law has been thoroughly established—the cases are numerous, and I need not cite them—that where a contract is voidable on the ground of fraud, you may avoid it, so long as the goods remain in the man's hands who is guilty of the fraud, or in the hands of anybody who takes them from him with notice; but where a person has bona fide acquired an interest in the goods, you cannot, as against that person, avoid the contract. Where the g oods have come into the hands of a bona fide purchaser you cannot take them back†. The Appellate court affirmed in part and ruled that Lindsay & Co had meant to deal only with Blenkiron & Co. There could therefore had been no agreement or contract between them and the rogue. Accordingly, title did not pass to the rogue, and could not have passed to Cundy. They were forced to therefore return the goods. Where the lower court held there was a voidable contract with the rogue, the Appellate court ruled there was no contract with the defrauding party at all and therefore no third party remedy. A different result was reached in another case.iii where a similar situation occurred. Here however, the company name that the rogue used did not exist, as it did in Cundy v Lindsay. A rogue called Wallis pretended to be an imaginary firm which he called 'Hallam & Co.' and had pretentious notepaper bearing that name printed. He ordered goods from the plaintiffs by writing to them on this not epaper and they sent the goods to him. He then sold the goods to the defendant. The claim was denied. Wallis' personality could not have affected the minds of the plaintiffs - if they were willing to give credit to 'Hallam & Co.', a non-existent entity, they were willing to give it to anyone. Though there was fraud, there was no operative mistake. Therefore the contract was merely voidable for fraud, and the third party obtained good title to the goods. In Phillips v Brooks (1919] 2 KB 243) A man entered the plaintiff’s shop and asked to see some pearls and some rings. He selected pearls at the price of ?2550 and a ring at the price of ?450 He produced a cheque book and wrote out a cheque for ?3000 In signing it, he said: ‘You see who I am, I am Sir George Bullough,’ and he gave an address in St. James’s Square. The plaintiff knew that there was such a person as Sir George Bullough, and finding on reference to a directory that Sir George lived at the addre ss mentioned, he said, ‘Would you like to take the articles with you?’ to which the man replied: ‘You had better have the cheque cleared first, but I should like to take the ring as it is my wife’s birthday tomorrow,’ whereupon the plaintiff let him have the ring. The cheque was dishonoured, the person who gave it being in fact a fraudulent person named North who was subsequently convicted of obtaining the ring by false pretences. In the meantime, North, in the name of Firth, had pledged the ring with the defendants who, bona