E-Seminar Mistake & Mistaken Identity Notes Common Mistake Definition - Mistake as to a common assumption of fact Common mistakes take place when: · Parties are in agreement but the contract is impossible to perform. E.g subject matter never existed or no longer exists (Res extincta) . Parties are in agreement and the contract could be performed but performance would be "radically different" from what was agreed. Effect of common mistake . The contract is rendered void ab initio. · Parties must be returned to their original positions as far as possible. This will affect third parties as well. . These consequences are far-reaching. Mutual Mistake Also known as a communication mistake. Definition - Mistakes negativing agreement (ie parties appear to be in agreement, but are not). Unilateral Mistake Definition - mistake known to one party - (ie one party takes advantage of the other's mistake). Must be a mistake as to something which is part of the contract and must be sufficiently important. mistaken Identity Issues · Distinguishing between mistake as to identity and mistake as to attributes. · Contracts made at a distance (not face-to-face). . Contracts made face-to-face (inter praesentes). · Contracts made through an intermediary. · Justification of the current law and questions of fairness. General Rule . In order to be operative, the mistake must relate to the identity of the person with whom you are contracting, not his or her attributes. Case Notes Cundy v Lindsay [1878] 3 App Cas 459 Facts - The claimant received an order for sale of handkerchiefs from a person named Blenkarn, who signed in his name in a manner resembling "Blenkiron & Co."- a reputed firm located at "123, Wood Street". The purchaser further mentioned his address to be at "37, Wood Street, Cheapside", to which the claimant sent the goods. Although no payment was made by Blenkarn, he sold the goods to a third person- the defendants. Later, the claimants alleged that, as they sold the goods to Blenkarn under the mistaken assumption that they were selling it to Blenkiron & Co., there was no real consent to the contract of sale. Consequently, there was no valid transfer of title, which remained with the claimants, and accordingly, they sued the defendants for conversion of goods. Issues - The case concerned whether a mistake as to the identity of a contracting party was so fundamental so as to negate the consent of the other party, and thereby, causing the contract to be void. In other words, the question was whether there was any contract between the claimant and Blenkarn at the first place, and if not, could the third party defendants procure a valid title to the goods.
Held - It was held that, as the claimant did not intend to sell the handkerchiefs to Blenkarn but to Blenkiron & Co., there was no consent of the claimant to the contract with the former. Accordingly, as no contract was concluded between the claimant and Blenkarn so as to