Deck 5: Identity of Offeror and Offeree

Question 1

O writes to A personally to order a special blend of coffee beans. Unbeknownst to O, A has died but C duly fulfils the order. Upon learning that C and not A supplied the beans, O refuses to pay C. The beans have been ground up to make coffee powder. Advise C.

A) C can sue O for the price of the beans since there was a valid contract between both parties.
B) C can sue O for the value of the coffee powder since ownership of the beans never passed to O in the first place.
C) C cannot sue O for the price of the beans because O's offer was not addressed to him.
D) C cannot sue O for the price of the beans because the beans have been consumed.

Answer 1

C

Question 2

O and A wish to enter into a contract. However, A has lied to O about several matters. Which of the following untruths would render the contract voidable? Please select all that apply.

A) A is the heir of a millionaire.
B) A owns several luxury cars.
C) A has recently invested in some extremely profitable ventures.
D) A is married to a wealthy businesswoman.

Answer 2

A,B,C,D

Question 3

Where a rogue fraudulently obtains a car from the original owner and sells the car to a third party, in which of the following scenarios will bona fide purchase for value without notice be a defence against a claim by the original owner?

A) The original owner made a fundamental mistake of identity when purporting to sell the car to the rogue.
B) The rogue had lied to the original owner about his ability to pay for the goods in order to procure the car.
C) The original owner rescinded the contract before the rogue sold the car on to the bona fide purchaser.
D) None of the options provided is correct.

Answer 3

B

Question 4

How did the court in King's Norton Metal Co Ltd v Edridge, Merrett & Co Ltd distinguish the facts of that case from those of Cundy v Lindsay?

A) The defendant in King's Norton was a bona fide purchaser whereas the defendant in Cundy was not, having acted in bad faith.
B) The claimant in Cundy had rescinded the contract whereas the claimant in King's Norton had not.
C) In Cundy, the rogue assumed the identity of a real and existing firm known to Lindsay, but in King's Norton the rogue invented a firm to deceive the claimant with.
D) In both cases, the rogues had assumed the identities of real firms in order to contract with the original owner, but in Cundy the owner actually knew of the firm by reputation, whereas in King's Norton the owner did not.

Question 5

Shogun Finance Ltd v Hudson is a decision which cannot be reconciled with any of the earlier authorities and should be treated as a special case on account of its facts.

Question 6

R offers to buy a used bicycle from O. He gives O a name card which falsely indicates that he is a famous philanthropist. Based on the repute of that man, O agrees to accept a cheque for the bicycle, but it bounces when O attempts to cash it. The bicycle is later found in the possession of a bona fide purchaser A. What is the likely outcome should O sue A for the bicycle?

A) O will be successful since he intended to sell to the famous philanthropist and not the rogue present.
B) O will be successful since the contract between him and R was void for mistake of identity.
C) O will be unsuccessful since he only made a mistake as to the attributes of the rogue rather than his identity.
D) O will be unsuccessful since he only made a mistake as to the identity of the rogue rather than his attributes.

Question 7

The Law Reform Committee accepted Devlin LJ's proposed reform that loss be apportioned between an original owner and a subsequent bona fide purchaser.

Question 8

The Law Reform Committee proposed that all mistakes of identity should make contracts voidable not void.