Phillips v Brooks Ltd
Encyclopedia
Phillips v Daniel Ltd [1919] 2 KB 243 is an English contract law
case concerning misrepresentation
. It held that a person is deemed to contract with the person in front of them, and that if a third party's rights intervene, rescission
for misrepresentation will be precluded.
Note that there are conflicting reports, showing that Mr North only identified himself after the ring was sold, as Viscount Haldane said in Lake v Simmons, but others say that North identified himself straight away.
had established that contracts could be automatically void for mistake to identity. Where this is the case, title
does not pass to the fraudulent buyer, and the third party loses out in the entirety. This principle is different where parties contract face to face; Horridge J stated:
This outcome can be explained by putting it as such: Mr Phillips hoped he was contracting with Sir George Bullough, but in reality he agreed to contract with whoever came into his shop, taking a risk that he was not who he said he was. This had the effect of merely making the contract voidable for fraud, meaning that title passed to the rogue, and subsequently to the third party buyer:
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 concerning misrepresentation
Misrepresentation in English law
Misrepresentation in English law is an area of English contract law, which allows a person to escape a contractual obligation or claim compensation for losses. If one person can show that she entered an agreement because of another person's false assurances, then the other person will be unable to...
. It held that a person is deemed to contract with the person in front of them, and that if a third party's rights intervene, rescission
Rescission
In contract law, rescission has been defined as the unmaking of a contract between parties. Rescission is the unwinding of a transaction. This is done to bring the parties, as far as possible, back to the position in which they were before they entered into a contract .-In court:Rescission is an...
for misrepresentation will be precluded.
Facts
On 15 April 1918, a man named Mr North entered Phillip’s jewellery shop and said “I am Sir George Bullough”. He wrote a dud cheque for £3000 to ‘pay’ for some pearls and a ring. He said he lived in St James Square. Mr Phillips checked the phone directory, and found there was someone there by that name. Mr Phillips asked if he’d like to take the jewellery with him. Mr North said he would leave the pearls but take the ring ‘for his wife’s birthday tomorrow’. Mr North pledged the ring to Brooks Ltd for £350. The cheque was dishonoured. Mr Phillips sued Brooks Ltd to get the ring back.Note that there are conflicting reports, showing that Mr North only identified himself after the ring was sold, as Viscount Haldane said in Lake v Simmons, but others say that North identified himself straight away.
Judgment
The earlier judgement of Cundy v LindsayCundy v Lindsay
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...
had established that contracts could be automatically void for mistake to identity. Where this is the case, 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...
does not pass to the fraudulent buyer, and the third party loses out in the entirety. This principle is different where parties contract face to face; Horridge J stated:
This outcome can be explained by putting it as such: Mr Phillips hoped he was contracting with Sir George Bullough, but in reality he agreed to contract with whoever came into his shop, taking a risk that he was not who he said he was. This had the effect of merely making the contract voidable for fraud, meaning that title passed to the rogue, and subsequently to the third party buyer:
See also
- English contract lawEnglish contract lawEnglish 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...
- Misrepresentation in English lawMisrepresentation in English lawMisrepresentation in English law is an area of English contract law, which allows a person to escape a contractual obligation or claim compensation for losses. If one person can show that she entered an agreement because of another person's false assurances, then the other person will be unable to...
- Mistakes in English law
- Nemo dat quod non habetNemo dat quod non habetNemo dat quod non habet, literally meaning "no one [can] give what he does not have" is a legal rule, sometimes called the nemo dat rule, that states that the purchase of a possession from someone who has no ownership right to it also denies the purchaser any ownership title...
- Cundy v LindsayCundy v LindsayCundy 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...
- Ingram v Little
- Shogun Finance Ltd v HudsonShogun Finance Ltd v HudsonShogun 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...