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== Unilateral Mistake == === Mistake as to the Promise === * Smith v Hughes (1871) LR 6 QB 597 ** Facts: Hughes thought Smith's oats were old. Smith knew Hughes thought this, but had not said they were old. ** Issue: Was the contract void because of Hughes’ mistake? ** Holding: Contract was binding. ** Principle: Distinction between: *** Mistake as to a term you hope for (buyer hopes oats are old) -> No relief *** Mistake as to a term actually offered (seller promises oats are old) -> May be relief. ** Mere knowledge of the other's subjective mistake is not enough to avoid the contract. * Hartog v Colin & Shields [1939] 3 All ER 566 ** Facts: Negitiation of hare skins *** Seller offered goods at a price "per pound" by mistake **** Trade custom was "per piece" *** Buyer tried to accept. ** Holding: No contract. ** Principle: The buyer must have realised the offer contained a mistake. *** A party cannot “snap up” an offer which they know was not intended. *** The objective interpretation is tempered where one party knows the other is mistaken as to a term. === Mistake as to Identity === Distinction between written/distance contracts and face-to-face contracts. Face to face: Law presumes a person intends to contract with the person physically in front of them. Contract is voidable for fraud, not void for mistake (protects innocent third parties). Written/Documented Contracts: Where identity is crucial and reduced to writing, extrinsic evidence is not generally admissible to contradict the document. Mistake can render the contract void. * Cundy v Lindsay (1878) 3 App. Cas. 459 ** Facts: A rogue, Blenkarn, wrote from 37 Wood St, signing his name to resemble “Blenkiron & Co” *** Reputable firm at 123 Wood St. Lindsay *** Sent goods on credit to “Messrs Blenkiron & Co., 37 Wood St”. ** Issue: Was there a contract between Lindsay and the rogue Blenkarn? ** Held: No. The contract was void for mistake. ** Reasoning: Through written correspondence *** Lindsay intended to deal exclusively with the entity Blenkiron & Co. *** No consensus ad idem with Blenkarn. *** Rogue obtained no title, so could pass none to an innocent third party (Cundy). * King's Norton Metal Co. v Eldridge (1897) 14 T.L.R. 98 ** Facts: A rogue, Wallis, used the entirely fictitious name “Hallam & Co” in written correspondence. *** The plaintiffs sent goods to “Hallam & Co”. ** Held: Contract was voidable for fraud, not void. ** Reasoning: The plaintiffs intended to deal with the writer of the letters. *** There was only one entity (the rogue), albeit under an alias. Identity was not crucial. * Phillips v Brooks Ltd [1919] 2 K.B. 243 ** Facts: A rogue in a jeweller’s shop claimed to be Sir George Bullough. ** The jeweller checked a directory for the address and let him take a ring on credit. ** Issue: Was the contract void for mistake? ** Held: No. The contract was voidable for fraud. ** Reasoning: The presumption applied. The jeweller intended to deal with the person in the shop. *** Identity was not of vital importance compared to creditworthiness. * Ingram v Little [1961] 1 Q.B. 31 ** Facts: A rogue claiming to be “Mr Hutchinson” bought a car from two sisters. *** Checked a phone directory for his name and address before accepting his cheque. ** Issue: Was the contract void? ** Held: Yes. Contract void. ** Reasoning: The detailed verification steps rebutted the presumption *** Showing the sisters intended to deal only with the genuine Mr Hutchinson, not the person present. * Shogun Finance Ltd v Hudson [2003] UKHL 62 (The Modern Authority) ** Facts: Rogue went to a dealer to buy a Mitsubishi Shogun on hire purchase *** Used a stolen driving licence to complete a hire-purchase agreement in the name of Mr. Patel. *** Shogun Finance authorised the hire purchase agreement and the rogue drove away. *** Rogue then sold the car to Mr Hudson ** Issue: Was the hire-purchase agreement with the rogue void (so Hudson gets no title) *** Or voidable (so Hudson, an innocent private purchaser, is protected by statute)? *** Mr Hudson relied on section 27 of the Hire Purchase Act 1964 *** Statutory exception to the common law principle that "nemo dat quod non habet" **** (nobody can pass better title than he has) *** Non-trade buyer of a car who buys in good faith from a hirer under a hire purchase agreement becomes the owner. ** Held: VOID. *** No contract of hire purchase *** Car was not Mr Hudson's. ** Reasoning: *** Followed the principle established in Cundy v Lindsay *** A contract where identity is of key importance is void if the purchaser lies about their identity. *** Face-to-face exemption established by Phillips v Brooks Ltd did not apply *** Seller was not the dealer but the finance company. ** Exam Gold: This case cements the distinction. *** For exam problems, first ask: **** Is the contract written/formalised with a specific identity **** Or is it face-to-face/oral? Apply the presumption for face-to-face dealings.
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