OCR A2 Law - The Law of Contract - Mistake (4)

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  • Created by: Majid
  • Created on: 09-05-13 14:11

Mistake (4)

F2F cases don't apply when the contract is made by a mere intermediary. The principles of mistaken identity won't apply.CASE: "Shogun Finance v Hudson". In this case a rogue acts as Mr. Patel and visits Shogun Finance (SF) showroom producing a stolen driver's licenece (F2F). The rogue wanted the car on finance so the showroom faxes over the licence to the finance company. The finance company did a credit check and thought they were genuinely dealing with the real Mr. Patel. They approved of the credit (Not F2F). The rogue payed part cash, part cheque which bounced, but before it bounced it was sold onto the 3rd party (Hudson). HELD: The CofA decided that SF made an operative mistake thinking they were dealing with the real Mr. Patel. ... The rogue didn't gain good title ... he couldn't pass this onto Hudson and the Mistake was operative and the car had to be returned and Hudson had to bear the loss.

2. Parties in contact by Post: Similar problems have arisen where the fraud has taken place when the parties are dealingby post. (Identity must be crucial no creditworthiness).CASE: "Kings Norton v Ed Ridge". In this case a business was set up under a false name and he used impressive notepaper saying and that he had many offices and he ordered brass wire, sold it on but never paid for it. HELD: There was a contract between the two but their mistake didn't concern the identity of the customer, but his creditworthiness... Not VOID.CASE: "Cundy v Lindsay". In this case a man called Blenkarn ordered a large quantity of handkerchiefs from Wood Street and signed an order to look like Blenkiron. Blenkarn sold the goods to a 3rd party Lindsay. HELD: The contract was void for Mistake. It was an issue of Identity because it was vital to the formation of a contract.

AO2: For a contract to be classed as being void under this area via F2F or via the post, the party "mistakes" and must take 'adequate steps' to verify the identity. If not the contracts not void ... being an issue of creditworthiness.

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