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Unformatted text preview: prevailing view is that when the parties see on another, there cannot be any mistake as to the identity of the person with whom they intend to do business. A shopkeeper may mistakenly think that the customer before him is a famous and wealthy businessman, but such a mistake is not really as to the identity of the customer. It is only a mistake as to the attributes, i.e. social status and creditworthiness, which does not render the contract void. CM20278 Regulatory Framework 9 Business 2011 - 2012
for It is only a mistake as to the attributes, i.e. social status and creditworthiness, which does not render the contract void. Therefore, such contract will normally be held to be valid because there is an intention to enter into a contract with the person in front of you. It may be void if the intention had been to only deal with a specific person. This intention can only be proved by strong evidence. CM20278 Regulatory Framework 10 Business 2011 - 2012
for In contrast, it is easier to show this if the negotiations leading up to the contract are through the post, i.e. by correspondence (Cundy v Lindsay (1878)). If the contract is made in person, it will be assumed that the parties intended to deal with the person in front of them unless there is clear evidence that this not the case. CM20278 Regulatory Framework 11 Business 2011 - 2012
for Ingram v Little (1961), the sellers of a car refused to accept a cheque from the buyer until he proved his identity. When this turned out to be false, the contract was held to be void as the sellers had only intended to contract with a particular person. Lewis v Avery (1971), the buyer of a car paid by cheque. To persuade the seller to let him take way the car before the cheque was cleared, he showed false identification papers. It was held that the seller had intended to deal with the person in front of him and the contract was valid. CM20278 Regulatory Framework 12 Business 2011 - 2012
for There is very little difference between these two cases, except that in the former case, the victim was more insistent and emphasized more on the proof of identification. In Lewis v Avery, the Court of Appeal indicated that only in exceptional cases would the contract be void. CM20278 Regulatory Framework 13 Business 2011 - 2012
for Unilateral Mistake Mistaken Signing of a Document
As a general rule, a person who signs a document is assumed to have read, understood, and agreed to its contents. However, a person may be able to or apply the doctrine 'non est factum’ (i.e. that is not my deed) if he can show that
his/her signature was induced by fraud,
the document he signed was fundamentally different from that thought to be signed, and
that he did not act negligently (Saunders v Anglia Building Society), for example, he was blind and cannot find anyone for help in the circumstance CM20278 Regulatory Framework 14 Business 2011 - 2012
for Note Where there has been a mistake in relation to contents of documents, the court may rectify the document (Aristocrat Leisure Limited v Deutsche Bank Trust Company Americas & others (2005)). This is the case where both parties really have no mistake in the negotiation by...
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- Spring '13