Contract Law & Misrepresentation Cases

This assignment delves into the complex realm of contract law, specifically focusing on cases involving misrepresentation. It examines landmark cases such as Cundy v Lindsay and Phillips v Brooks Ltd., analyzing how courts have interpreted the concept of voidable contracts due to mistaken identity and false representations. The assignment also explores the legal principle of 'Nemo dat quod non habet,' which governs the transfer of ownership in situations where a seller lacks proper title. A hypothetical scenario involving Gordon, a car seller, and a woman who misrepresented herself as the newly elected Mayor is analyzed to illustrate these legal principles.

Running head: COMMERCIAL LAW
Law of Contract and Land law
Name of the student:
Name of the university:
Author note

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Table of Contents
Answer to part A........................................................................................................................2
1. Issue:...................................................................................................................................2
Rules:......................................................................................................................................2
Application:............................................................................................................................3
Conclusion:.............................................................................................................................3
2. Issue:...................................................................................................................................3
Rules:......................................................................................................................................3
Application:............................................................................................................................4
Conclusion:.............................................................................................................................5
Answer to part B........................................................................................................................5
Issue:.......................................................................................................................................5
Rule:.......................................................................................................................................5
Application:............................................................................................................................7
Conclusion:.............................................................................................................................7
Reference:..................................................................................................................................8

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Answer to part A
1. Issue:
The primary issue of the problem is whether Ian can ask for any claim for breach
of contract against Ben or not.
Rules:
To determine the issue, it is required to come into a conclusion whether there is
any contract made in between Ben and Ian or not. The principle of contract is based on the
doctrine of offer and acceptance. A contract can be formed when an offer has been made by a
party and the same has been accepted by the other1. However, both the offer and acceptance
have certain elements that established the legality of the terms. The essentials of offer has
been prescribed in AGC (Advances) Ltd v McWhirter2, where the court has stated that the
condition of the offer should be legal and there should a specific time for accepting the offer
be mentioned.
However, the validity of the offer lapses in case of revocation or rejection. The
rejection can either made expressly or impliedly. In Byrne v Van Tienhoven3, it has been
held that an offer comes to an end immediately if the person to whom offer has been made
denied accepting it.
There are certain medium to accept an offer and postal rule is one of them. It has
been stated in Adams v Lindsell4 that if a person accepts an offer through mail or by post, it
can be regarded as valid acceptance. However, such acceptance should come into the notice
of the other person.
1 Bayern, S. (2016). Offer and Acceptance in Modern Contract Law. California Law Review, 103.
2 AGC (Advances) Ltd v McWhirter (1977) 1 BLR 9454
3 Byrne v Van Tienhoven (1880) LR 5 CPD 344
4 Adams v Lindsell (1818) 1 B & Ald 681

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Application:
In this case, Ben has made an offer to Ian to deliver lecture on Astronomy with
certain specific time period. Ian came to know about the offer on the next day and rejected
the offer as he was not available on that day. Ben found the rejection and contracted with
another professor. This leads to the termination of offer and the operation of it has been
ceased. However, Ian became free on the next day and sent a mail to Ben regarding his
acceptance. Ben was unaware of the fact. Ian stated that he had made a statement in his
previous rejection that he may let know Ben about any changes. However, in such case, new
offer should have to be made by Ben as the previous contract was rejected and ceased to be
existed. Therefore, no contract has been made in between them on the basis of previous offer.
Conclusion:
On the context of above mentioned rules, it can be stated that Ian cannot bring an
action against Ben for breach of contract.
2. Issue:
The main issue is whether Sharon can sue Ben for breach of contract or not.
Rules:
As per the law, a contract can be bind upon the parties if both the parties are giving
consent over the issue. In the legal language, the consent can be termed as meeting of mind.
This concept is based on the legal maxim of consensus ad idem. It is a basic principle of
contract law. However, it can be seen that misunderstanding takes place in certain
circumstances by the parties. The misunderstanding or mistake can be of three types such as
common mistake, unilateral mistake and mutual mistake5. It has been established in Raffles v
5 Goldberg, V. P. (2016). From British Westinghouse to the New Flamenco: Misunderstanding
Mitigation. Browser Download This Paper.

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Wichelhaus6 that in case of any common or reciprocal mistake, binding nature of the contract
will not be established and validity of the contract will be terminated. On the other hand, in
King's Norton Metal Co Ltd v Edridge Merrett Co Ltd7, the court was rightly observed that
the contract made by mistake can be voidable in nature depended on the parties. However,
aggrieved party may get certain compensation for any loss incurred by the other party on the
basis of Webster v Cecil8. It has been held in Wood v Scarth9, a contract can be valid if both
the parties have accepted the same terms and condition. If a party has done something by
mistake, the other party will be held liable for such loss.
Another principle based on the same thing is Non est factum. It applies in such
case where a contract has been made in between the parties on the basis of mistaken facts.
Certain conditions have been made under this rule:
 The claiming party should have certain physical disabilities and due to this, he has
failed to go through the conditions written in the contract;
 There should be certain mistakes occurred at the time of making the contract;
 The intention of the parties should base on mistakes.
Application:
In the present case, it has been observed that Ben had made an offer to Sharon
believing Sharon is expertise in Astronomy. Sharon had accepted the offer believing that Ben
made the approach to her as he needs an expert on Astrology. Therefore, mistakes had been
occurred by both of them and when Sharon accepted the offer, contract has been made in
between the duo. It can easily be stated that no meeting of minds has been taken place and as
6 Raffles v Wichelhaus [1864] EWHC Exch J19
7 King's Norton Metal Co Ltd v Edridge Merrett Co Ltd (1897) TLR 98
8 Webster v Cecil (1861) 30 Beav 62
9 Wood v Scarth (1858) 1 F&F 293

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per the rules of consensus ad idem, it can be stated that the terms of the contract could not
bind the parties to the contract.
It has also been observed in this case that at the time of delivering the lecture, Ben
came to know that Sharon is not a professor on Astronomy but Astrology and refused to pay
a single penny to her. Though mistake has been made by both the parties, still Sharon cannot
take the plea of Non est factum as she has no physical disability and she can verify the
conditions of the contract as well as the intention of Ben.
Conclusion:
Ben can defend himself on the basis of Non est factum and Sharon could not
succeed in her claim as she has enough opportunities to verify the objective of the contract.
Answer to part B
Issue:
The major issue in this case is to determine the strength of claim made by Cheng
and Gordon and to decide who has a better claim for the car.
Rule:
The present case is based on fraudulent misrepresentation. Misrepresentation is a
part of the contract law and damage can be claimed by the affected party depending on the
velocity of the situation and depth of the damage10. A case can be termed as fraudulent
misrepresentation is the following facts have been met:
 There must be a representation;
 The base of the representation should be false;
 The representation need to be made recklessly;
10 Layman, M. (2016). MISTAKE, FRAUD, AND WASTE: MASS INEFFICIENCIES IN SMALL BUSINESS
PROGRAMS THAT ALLOW SELF-CERTIFICATION. Public Contract Law Journal, 46(1), 167

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 The representation should be made to defraud others;
 The other party should have to rely on the represented facts;
 The other party has to suffer damage due to such misrepresentation.
There is another misrepresentation called negligent misrepresentation and it will
also be imposed on this case. According to this principle, one party is required to be failed to
ensure the accuracy of the representation. However, the general rule is that the contract is not
materially affected by such misrepresentation and therefore, the question of legal action does
not in general be cropped up.
Except this, the rule of Nemo dat quod non habet is applicable in this case and
according to this rule, the bonafide purchaser can retain his goods legally. In Henderson &
Co vs WIlliams11, it has been held that property could not be recovered from a bonafide
purchaser.
According to section 27 of the Victoria Goods Act 1958, a person who is not a
owner of a product and sold the product to other, the buyer will not get any extra title over the
goods or product compare to that of seller. However, it has been observed under section 29 of
the said Act that if the seller of such goods has voidable interest, then buyer will acquire a
good title over the goods.
In case of Cundy v Lindsay12, it has been held that a contract will automatically be
terminated if the same is based on mistaken identity. In Phillips v Brooks Ltd.13, it has been
observed that a person had falsely represented him and bought jewels from the shop by
giving bounced cheque. The contract between the two becomes voidable in nature. Later he
sold the ornaments to another party and the jewel shop authority had sued the third party to
11 Henderson & Co vs WIlliams (1895) 1 QB 521
12 Cundy v Lindsay [1878] 3 App Cas 458 HL
13 Phillips v Brooks Ltd. [1919] 2 KB 243

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whom the ornaments were sold. It has been held by the court that the jewel shop could not
claim the ornaments from the third party as contract was made in between the shop and the
misrepresented person. No contract was made in between the shop and the third party and
therefore, the shop authority could not claim any damage from him.
Application:
In this case, it has been observed that a contract had been made in between Gordon
and a woman who had misrepresented her identity by introducing her as the newly elected
Mayor. Based on the identity, Gordon sold a car to her without taking the whole amount.
Gordon came to know later that the woman was not the actual Mayor and the contract made
in between Gordon and the woman become voidable.
Later, Gordon had noticed an advertisement of the same car and claimed the car
from the third party. Cheng (third party) told that he had purchased the car by paying proper
cash and further, no contract was made in between Gordon and Cheng. Therefore, the title of
the car is bestowed on Cheng as right of Gordon on the car was withheld after making the
contract with the woman.
Conclusion:
The claim of Cheng is much stronger than the claim of Gordon.

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Reference:
AGC (Advances) Ltd v McWhirter (1977) 1 BLR 9454
Bayern, S. (2016). Offer and Acceptance in Modern Contract Law. California Law
Review, 103.
Byrne v Van Tienhoven (1880) LR 5 CPD 344
Cundy v Lindsay (1878) 3 App Cas 459
Goldberg, V. P. (2016). From British Westinghouse to the New Flamenco: Misunderstanding
Mitigation. Browser Download This Paper.
King's Norton Metal Co Ltd v Edridge Merrett Co Ltd (1897) TLR 98
Layman, M. (2016). MISTAKE, FRAUD, AND WASTE: MASS INEFFICIENCIES IN
SMALL BUSINESS PROGRAMS THAT ALLOW SELF-CERTIFICATION. Public
Contract Law Journal, 46(1), 167.
Phillips v Brooks [1919] 2 KB 243
Webster v Cecil (1861) 30 Beav 62
Wood v Scarth (1858) 1 F&F 293

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