''Cundy v Lindsay'' (1877–78) LR 3 App Cas 459 is an

English contract law English contract law is the body of law that regulates legally binding agreements 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 ...

case on the subject of mistake, introducing the concept that contracts could be automatically void for mistake as to identity, where it is of crucial importance.(1877-78) LR 3 App Cas 459, page 465 Some lawyers argue that such a rule is at odds with subsequent cases of mistake as to identity, such as '' Phillips v Brooks'', 9192 KB 243 where parties contracting face to face are merely

voidable Voidable, in law, is a transaction or action that is valid but may be annulled by one of the parties to the transaction. Voidable is usually used in distinction to void ''ab initio'' (or void from the outset) and unenforceable. Definition The a ...

for

fraud In law, fraud is intent (law), intentional deception to deprive a victim of a legal right or to gain from a victim unlawfully or unfairly. Fraud can violate Civil law (common law), civil law (e.g., a fraud victim may sue the fraud perpetrato ...

, protecting a third party buyer.MacMillan, p. 372 However, the ultimate question is whether the identity of the other contracting party was crucial to the contract. The problem for the courts was essentially which of the two innocent parties should bear the loss of the goods.

Facts

Lindsay & Co sued Cundy to return handkerchiefs, after it had been defrauded by a 'rogue' that sold them onto Cundy. Lindsay & Co were manufacturers of linen handkerchiefs, amongst other things. They received correspondence from a man named Blenkarn. He had rented a room at 37 Wood Street,

Cheapside Cheapside is a street in the City of London, the historic and modern financial centre of London, England, which forms part of the A40 road, A40 London to Fishguard road. It links St Martin's Le Grand with Poultry, London, Poultry. Near its eas ...

, but purported to be 'Blenkiron & Co'.(1877-78) LR 3 App Cas 459, page 460 Lindsay & Co knew of a reputable business of this name which resided at 123 Wood Street. Believing the correspondence to be from this company, Lindsay & Co delivered to Blenkarn a large order of handkerchiefs. Blenkarn then sold the goods – 250 dozen linen handkerchiefs – to an innocent third party, Cundy. When Blenkarn failed to pay, Lindsay & Co sued Cundy for the goods.

Judgment

Divisional Court

The Divisional Court held that Lindsay could not recover the handkerchiefs from Cundy. Blackburn J, giving judgment, held the following. Mellor J and Lush J agreed.

Court of Appeal

The Court of Appeal, with Mellish LJ, Brett J and Amphlett JA overturned the Divisional Court, holding that Lindsay could recover the handkerchiefs, since the mistake about the identity of the rogue voided the contract from the start. Cundy appealed.

House of Lords

The

House of Lords The House of Lords is the upper house of the Parliament of the United Kingdom. Like the lower house, the House of Commons of the United Kingdom, House of Commons, it meets in the Palace of Westminster in London, England. One of the oldest ext ...

held that Lindsay & Co had meant to deal only with Blenkiron & Co. There could therefore have 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. He therefore had to return the goods. Lord Cairns explained the mistake as to identity, and the consequences:

Developments

The contract was held void, rather than voidable. This has introduced a distinction from cases such as '' Phillips v Brooks'', where parties dealing face to face are presumed to contract with each other. Despite still being good law, commentators, as well as the courts, have been critical of this distinction. In '' Shogun Finance Ltd v Hudson'' 003UKHL 62 Lord Nicholls, dissenting, stated it to be an "eroded" principle of law.

Notes

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References

* C MacMillan, 'Mistake as to identity clarified?' (2004) 120 Law Quarterly Review 369 English mistake case law House of Lords cases 1878 in case law 1878 in British law