Business Law

Topics: Contract, Contractual term, Sale of Goods Act 1979 Pages: 8 (2691 words) Published: March 2, 2013
Contract law is come from a Latin phrase, which is pacta sunt servanda (pacts must be kept). Everyday, all of us make contracts. It can be a written contract if required, for example when buying a car. On the other hand, the most common of contracts can be and are made orally, like buying from the mini market. A contract intends to make a legal agreement between two or more people or businesses (called parties) that sets forth what the parties will or will not do. Thus, The law recognizes breach of the contract and remedies can be provided.

In contracts, mistakes can be found. In the case of finding any mistake, the contract will be voidable and can be sit aside. This essay will carry on the clarification of the unilateral mistake at law, the legal principles relating to mistaken identity and will show up the three cases of Phillips v Brooks, Ingram v Little and Lewis v Avery and how the first two cases could not be reconciled. On the other hand, the analysis of how the apparent conflict between these two cases was resolved by the decision in (Lewis v Avery) will be discused.

Mistakes at law can affect the validity of a contract. The effect of a mistake on the validity of a contract depends on the nature and type of the mistake made. The general rule of the law of mistake is that when the parties have made a mistake. One of the mistakes type at law is the unilateral mistake, it occurs when only one party makes a mistake. The other party to a contract is either aware of that mistake or is deemed to be aware of that mistake.

Mistake as to identity is considered the most common type of unilateral mistake. Mistakes as to identity are generally implemented by fraud in that one of the parties is claiming to be someone else and he is not. Thus, the law considers this situation is overlap with misrepresentation. Any claim based in mistake is more favorable to one based in misrepresentation as the affect of a finding of mistake is that the contract is void as oppose to voidable. This is important where a rogue has obtained goods and sold them on to a third party. If the contract is void the rogue will never be able to receive title to goods and will not be able as well to pass title when selling the goods. However, if the contract is voidable the contract exists and title passes. If the goods are sold before the innocent party rescinds the contract, the purchaser obtains good title to the goods. In determining whether a contract will be held void for mistake the courts draw a distinction between contracts made inter absents (at a distance) and contracts made inter presents (face to face transactions).

In Inter absents, the parties are not physically present when the contract is made, e.g. where the contract is made via dealings through the telephone, post or over the internet, in this situation, the courts will only make a finding of mistake if the claimant can show an identifiable person or business with whom they intended to deal with. This is highlighted in Cundy v Lindsay. Here, A rogue named Blenkarn ordered goods via letter from Lindsay & Co. He asked them to send the goods to "Blenkarn & Co, 37 Wood Street, Cheapside" and signed the letter under "Blenkiron & Co" name. A respectable company known as Blenkiron & Sons which has business at 123 Wood Street was well known to Lindsay who did not investigate their address but brought the goods to "Blenkiron & Co, 37 Wood Street, Cheapside." Blenkarn was convicted of obtaining goods by false right, but before that he had sold some of the goods to Cundy and Cundy re-sold them all to different persons before the fraud was discovered. It was held that as Lindsay & Co didn not know about Blenkarn and intended to deal only with Blenkiron & Sons, and there was any common intention that could lead to any contract between the parties, and therefore, the property in the goods remained in Lindsay and Cundy had no title to...
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