Cundy v Lindsay [1878]
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Cundy v Lindsay [1877–78] LR 3 App Cas 459 is a notable English contract law case that revolves around the theme of mistake, specifically introducing the concept that contracts could be automatically voided if a mistake as to identity is of crucial importance. This case has sparked debates among legal experts regarding its alignment with subsequent cases, particularly Phillips v Brooks [1919], which suggests that contracts involving face-to-face interactions are merely voidable for fraud rather than automatically void.
Lindsay & Co initiated legal action against Cundy to reclaim handkerchiefs after being defrauded by a rogue who sold the goods to Cundy. Lindsay & Co, a manufacturer of linen handkerchiefs, had received correspondence from a person claiming to be Blenkiron & Co, leading them to believe it was a reputable business. Consequently, they delivered a large order of handkerchiefs to the fraudster. The central issue for the court was determining which innocent party should bear the loss of the goods.
The Divisional Court initially ruled in favour of Cundy, asserting that Lindsay could not recover the handkerchiefs. However, the Court of Appeal, with Mellish LJ, Brett J, and Amphlett JA, overturned this decision, holding that the mistake about the identity of the rogue rendered the contract void from the outset. The House of Lords affirmed this decision, emphasising that Lindsay & Co had intended to deal exclusively with Blenkiron & Co, and there was no agreement or contract with the rogue.
Lord Cairns, in explaining the mistake as to identity, highlighted the absence of a consensus of mind between Lindsay & Co and the dishonest man. The contract was deemed void, and Cundy had to return the goods.
The case's significance lies in its assertion that the contract was void, not voidable, introducing a distinction from other cases. However, this distinction has faced criticism from legal commentators and the courts. In subsequent developments, including Shogun Finance Ltd v Hudson [2003], Lord Nicholls expressed dissent, labelling the principle as eroded.
The distinction drawn between fraudulent misrepresentation regarding attributes and identity has been deemed unconvincing and a reproach to the law. Despite being over a century old, Cundy v Lindsay's impact persists, prompting questions about whether the remaining distinction should still be regarded as good law in the evolving landscape of contract law.
Lindsay & Co initiated legal action against Cundy to reclaim handkerchiefs after being defrauded by a rogue who sold the goods to Cundy. Lindsay & Co, a manufacturer of linen handkerchiefs, had received correspondence from a person claiming to be Blenkiron & Co, leading them to believe it was a reputable business. Consequently, they delivered a large order of handkerchiefs to the fraudster. The central issue for the court was determining which innocent party should bear the loss of the goods.
The Divisional Court initially ruled in favour of Cundy, asserting that Lindsay could not recover the handkerchiefs. However, the Court of Appeal, with Mellish LJ, Brett J, and Amphlett JA, overturned this decision, holding that the mistake about the identity of the rogue rendered the contract void from the outset. The House of Lords affirmed this decision, emphasising that Lindsay & Co had intended to deal exclusively with Blenkiron & Co, and there was no agreement or contract with the rogue.
Lord Cairns, in explaining the mistake as to identity, highlighted the absence of a consensus of mind between Lindsay & Co and the dishonest man. The contract was deemed void, and Cundy had to return the goods.
The case's significance lies in its assertion that the contract was void, not voidable, introducing a distinction from other cases. However, this distinction has faced criticism from legal commentators and the courts. In subsequent developments, including Shogun Finance Ltd v Hudson [2003], Lord Nicholls expressed dissent, labelling the principle as eroded.
The distinction drawn between fraudulent misrepresentation regarding attributes and identity has been deemed unconvincing and a reproach to the law. Despite being over a century old, Cundy v Lindsay's impact persists, prompting questions about whether the remaining distinction should still be regarded as good law in the evolving landscape of contract law.
