Cundy v Lindsay
Encyclopedia
Cundy v Lindsay LR 3 App Cas 459 is an English contract law
case on the subject of mistake
, introducing the concept that contracts could be automatically void
for mistake to identity, where it is of crucial importance. Some lawyers argue that such a rule is at odds with subsequent cases of mistake to identity, such as Phillips v Brooks, where parties contracting face to face are merely voidable
for fraud
, protecting a third party buyer. 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.
, but purported to be 'Blenkiron & Co', with premises on 123 Wood Street. Lindsay & Co knew of a business named as 'Blenkiron & Co', and knew them to be reputable and residing on the same road. Under this guise, and the rogue's signing of his letters as 'Blenkiron & Co', Lindsay & Co sold the rogue a large order of handkerchiefs. Blenkarn then sold the goods - 250 dozen linen handkerchiefs - to an innocent third party, Cundy, whom Lindsay & Co sued for conversion
of the goods.
Mellor J and Lush J agreed.
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. They were forced to therefore return the goods.
Lord Cairns explained the mistake to identity, and the consequences:
Lord Nicholls, dissenting, stated it to be an "eroded" principle of law.
English contract law
English contract law is a body of law regulating contracts 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 across the Commonwealth , and the United States...
case on the subject of mistake
Mistake (contract law)
In contract law, a mistake is an erroneous belief, at contracting, that certain facts are true. It can be argued as a defence, and if raised successfully can lead to the agreement in question being found void ab initio or voidable, or alternatively an equitable remedy may be provided by the courts...
, introducing the concept that contracts could be automatically void
Void (law)
In law, void means of no legal effect. An action, document or transaction which is void is of no legal effect whatsoever: an absolute nullity - the law treats it as if it had never existed or happened....
for mistake to identity, where it is of crucial importance. Some lawyers argue that such a rule is at odds with subsequent cases of mistake to identity, such as Phillips v Brooks, where parties contracting face to face are merely voidable
Voidable
In law, a transaction or action which is voidable is valid, but may be annulled by one of the parties to the transaction. Voidable is usually used in distinction to void ab initio and unenforceable....
for fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
, protecting a third party buyer. 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 were manufacturers of linen handkerchiefs, amongst other things. They received correspondence from a rogue named Blenkarn. He had rented a room at 37 Wood Street, CheapsideCheapside
Cheapside is a street in the City of London that links Newgate Street with the junction of Queen Victoria Street and Mansion House Street. To the east is Mansion House, the Bank of England, and the major road junction above Bank tube station. To the west is St. Paul's Cathedral, St...
, but purported to be 'Blenkiron & Co', with premises on 123 Wood Street. Lindsay & Co knew of a business named as 'Blenkiron & Co', and knew them to be reputable and residing on the same road. Under this guise, and the rogue's signing of his letters as 'Blenkiron & Co', Lindsay & Co sold the rogue a large order of handkerchiefs. Blenkarn then sold the goods - 250 dozen linen handkerchiefs - to an innocent third party, Cundy, whom Lindsay & Co sued for conversion
Conversion (law)
Conversion is a common law tort. A conversion is a voluntary act by one person inconsistent with the ownership rights of another. It is a tort of strict liability...
of the goods.
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 LordsHouse of Lords
The House of Lords is the upper house of the Parliament of the United Kingdom. Like the House of Commons, it meets in the Palace of Westminster....
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
Title (property)
Title is a legal term for a bundle of rights in a piece of property in which a party may own either a legal interest or an equitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to a formal document that serves as evidence of ownership...
did not pass to the rogue, and could not have passed to Cundy. They were forced to therefore return the goods.
Lord Cairns explained the mistake to identity, and the consequences:
Developments
As such, 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 HudsonShogun Finance Ltd v Hudson
Shogun Finance Ltd v Hudson [2003] is an English contract law decided in the House of Lords, on the subject of mistaken identity as a basis for rescission of a contract. The case has been the subject of much criticism in failing to effectively clarify the area of mistake to identity.-Facts:A rogue...
Lord Nicholls, dissenting, stated it to be an "eroded" principle of law.