Contract Law

Topics: Contract, Common law, Arbitration Pages: 8 (2681 words) Published: May 12, 2012
Business Law Assignment;
Mistake in contract law, is a factual misunderstanding that may lead to a failure of a meeting of the minds. Unilateral mistake is mean that is only one party is mistaken, but the other party knows, or ought reasonably to be aware of the mistake. Contract may be void or voidable. Void is a contract that is no legal effect. While, voidable is an agreement that may be affirmed or rejected at the option of one of the party. The reason why Lord Denning took the view that these two cases could not be reconciled and how the apparent conflict between these two cases was resolved by the decision in Lewis v Averay was explain.

The first case under unilateral mistake is Boulton v Jones(1857). In this case, the contract does not have legal effect, void. Unlike few other cases under unilateral mistake, that was no rogue involved in Boulton v Jones(1857). In Boulton v Jones, the defendant, Jones had sent an order to Brocklehurst for order some pipe hose. Brocklehurst had owed Jones money when dealing with Jones at the time. However, Brocklehurst had just sold his business to his foreman, Boulton. Boultion receive that order and sent the goods to Jones and sent an invoice to Jones after he had used the pipe hose. Jones refused to pay and resisted a claim for payment by the foreman, ‘set-off’ against Brocklehurst. The court held that Jones is intended to deal with the Brocklehurst and not Boulton. The plaintiffs knew this but still take the order from Jones. Therefore, that is no contract because the defendant does not have the intended to deal with the plaintiffs. So, the defendant, Jones won.

The second case is Cundy v Lindsay(1878). In the case, a rogue named Blenkarn pretend a well know respectable firm called Blenkiron & Co who carried on business at 124 Wood Street. The rogue rented a room at the further down the road there and sent an order for handkerchiefs to Lindsay. The rogue signed his name to look like Blenkiron & Co. Lindsay sent the goods for Blenkiron & Co and Blenkarn received the good without paying. After that, the rogue sold almost all the handkerchiefs to Cundy. So, after Lindsay checked out, he sued Cundy to get back the handkerchiefs. Lord Cairns said that the plaintiffs knew nothing about the rogue and between the plaintiffs and Blenkarn there was no consensus of mind. So that cannot lead to any contract or agreement. The House of Lords held that, in this case, there was no contract between Lindsay and the rogue, Blenkiron. This is because Lindsay was intended to deal with Blenkiron and Co, a well-known business firm, not with Blenkarn. Therefore, the contract was void since they had made a mistake as to identity.

The third case is King’s Norton Metal Co v. Edridge Merrett & Co Ltd (1897). In the case, the final conclusion is opposite compare with Cundy v Lindsay. The rogue named Wallis use the note paper bearing the name ‘Hallam & Co’ to order the wire from the plaintiffs. ‘Hallam & Co’ was only a cloak for Wallis. The rogue sold the wire to the defendant without paying to the plaintiffs. The plaintiffs sued the defendant and wanted to claim back the goods from the defendant. AL Smith LJ said that the plaintiff is clearly intended to deal with the writer of the letter, Wallis. This is because that is no other firm named ‘Hallam & Co’ that the plaintiffs could have thought they were dealing with. The House of Lords held that the plaintiffs were intended to deal with the rogue so there is a contract between the plaintiffs and Wallis. There was a mistake of attributes in this case and voidable.

Phillips v Brooks (1919) is also one of the cases under unilateral mistake. This is one of the face-to-face cases. A rogue named North entered a jewellery shop. He chose a pearl necklace and a ring. total is £2700 but he took out his cheque-book and wrote out a cheque for £3000. He said that he is George Bullough when he was signed the cheque and gave...
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