Mistake Notes

Unilateral Mistake

Sowler v Potter (KB 1939)

Facts

• The defendant had been previously convicted of permitting disorderly conduct in a cafe.

• She sought to negotiate a lease of premises in the same area after changing her name.

• After negotiating the lease, the plaintiff discovered her identity and claimed that the contract was void for unilateral mistake.

Issue

• Unilateral mistake – Identity

Judgment (Tucker J)

• As the identity of the person was a vital element in the offer in this case, the mistake as to that identity rendered the contract void ab initio.

Boulton v Jones (Ex 1857)

Facts

• The defendants, used to dealing with Mr B, sent an order to him for goods.

• The plaintiffs had bought B's business and executed the order.

• The defendants claimed that the contract was void for unilateral mistake and the plaintiffs sought the price of the goods

Issue

• Unilateral Mistake – Identity

Judgment

• Pollock CB

• The question is whether the defendants intended to deal with B – they did, thus the plaintiff can not recover the price, no rights accruing to him under the contract.

• Martin B (concurring)

• Bramwell B (concurring)

• Channell B (concurring)

King's Norton Metal Company v Bridge, Merrett & Co (CA 1897)

Facts

• The plaintiffs had been asked to supply goods to a man who had fraudulently purported to be the defendants and had sold the goods to the defendants without paying the plaintiffs.

• The plaintiffs sought damages from the defendants for their taking the goods

Issue

• Unilateral Mistake – Third Party

Judgment (AL Smith LJ)

• The plaintiffs in this case had contracted with the third party and not the defendants – thus the defendants were not liable for their loss.

• Unless the contract was disaffirmed, the third party had good title to the goods.

Cundy v Lindsay (HoL 1878)

Facts

• The respondent was contacted by an Alfred Blenkarn who indicated that he wished to purchase a considerable quantity of the respondent's goods.

• He used his own address, but wrote under the name of a large respectable company which was elsewhere in the town.

• Blenkarn took the goods and supplied them to the appellants without paying the respondent.

Issue

• Unilateral Mistake – Third Party

Judgment

• Lord Cairns LC

• No contract was ever made with Blenkarn and no property in the goods ever passed to him which he could convey to the appellants.

• Thus the respondent was entitled to the value of the goods.

• Lord Hatherly (concurring)

• Lord Penzance (concurring)

• Lord Gordon (concurring)

Phillips v Brooks Ltd (KB 1919)

Facts

• The plaintiff was a jeweller who sold a ring to a man in his shop who identified himself as Sir George Bullough.

• The person then sold it to the defendants, from whom the plaintiff sought recompense.

Issue

• Unilateral Mistake – Identity – Individual present

Judgment (Horridge J)

• In this case, the seller intended to contract with the person present – the fraudulent misrepresentation was not relevant to the contract.

• Thus the person who sold to the defendants had good title.

Lake v Simmons (HoL 1927)

Facts

• A woman represented to the plaintiff that she was the wife of a certain individual and on foot of that representation the plaintiff allowed her to 'borrow' some pearls for the purposes of showing it to her husband.

• The woman disposed of them for her own benefit and when the plaintiff tried to recover on his insurance policy, the insurance company relied on a clause exempting them from liability in case of theft or dishonesty committed by any customer in respect of goods entrusted to them by the accused.

Issue

• Unilateral Mistake – Identity – Individual present

Judgment

• Viscount Haldane (concurring)

• Whether the mistake of identity nullifies the contract depends on whether the identity of the person was an element of the contract.

• This was not a case of entrusting the pearls to a customer, as the woman represented that her fictitious husband was the real customer, and her identity was essential to her being entrusted with the jewels.

• Viscount Sumner (concurring)

• If the woman had received the plaintiff's consent and then breached the conditions, the contract would have been voidable and she would be a customer – otherwise the contract was void and there was never any consent.

• On the construction of the words, the woman was never entrusted with the jewels, as the plaintiff entrusted them to someone else who was not her.

• Lord Atkinson (concurring on different grounds)

• Lord Wrenbury (concurring)

• Lord Blanesburgh (concurring – agreed with Viscount Sumner)

Ingram v Little (CA 1960)

Facts

• The plaintiffs were selling a car and an individual offered to buy it.

• They initially refused to accept a cheque, but when he represented himself to be a certain reputable businessman and accepted his cheque.

• The individual sold the car to the defendant who was sued for the return of the car or its value by the plaintiffs.

Issue

• Unilateral Mistake - Identity – Individual present

Judgment

• Sellers LJ (concurring)

• There is a difference between the cases where A believes that B is somebody else, and A believes that B is a specific individual other than B.

• In the former case, B does in fact receive an offer, whereas in the latter, only X receives an offer and B cannot accept it.

• Where a person physically present and negotiating to buy a chattel assumed the identity of an existing third person, the test to determine to whom the offer was addressed was how ought the promisee interpret the promise.

• In this case, the offer was made solely to the third person and the individual present was incapable of accepting it – hence there was no contract.

• Pearce LJ (concurring)

• The use of words can serve the same function as a physical disguise.

• Devlin LJ (dissenting)

• In cases dealing with the intentions of the parties, the law uses presumptions – in this case a fair presumption would be that an individual intends to...

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