Cundy v Lindsay (1878) 3 App Cas 459 (HL)

Facts

• A rogue, Alfred Blenkarn, fraudulently ordered handkerchiefs from Cundy, the claimant, using the name and address of the reputable firm "Blenkiron & Co."
• Blenkarn sent his orders by post, listing his address as 37 Wood Street, Cheapside, instead of Blenkiron & Co.'s address at 123 Wood Street.
• Cundy, believing he was transacting with Blenkiron & Co., sent the goods to the address provided by Blenkarn.
• Blenkarn sold the handkerchiefs to Lindsay, the defendant, who purchased them in good faith.
• Cundy, not having been paid, sought to recover the goods from Lindsay, arguing that the contract with Blenkarn was void due to a mistake regarding the other party's identity.

Issues

1. Whether a contract formed through correspondence is void when one party is mistaken as to the identity of the other, due to the fraudulent actions of a third party.
2. Whether the absence of a true consensus ad idem (meeting of the minds) prevented a valid contract from being formed between Cundy and Blenkarn.
3. Whether Lindsay, having purchased the goods in good faith, obtained valid title.
4. Whether Cundy could recover the goods from Lindsay under the tort of conversion.

Decision

• The House of Lords held that the contract between Cundy and Blenkarn was void for unilateral mistake as to identity.
• Lord Cairns LC emphasized that Cundy intended to contract solely with Blenkiron & Co., not Blenkarn; thus, there was no agreement between Cundy and the rogue.
• The absence of consensus ad idem meant no valid contract was formed and, consequently, no title passed from Cundy to Blenkarn.
• Blenkarn, lacking title, could not transfer good title to Lindsay, making Lindsay liable for conversion despite acting in good faith.

Legal Principles

• A unilateral mistake as to identity, where fundamental and induced by fraud, renders a contract void, not merely voidable.
• Consensus ad idem (a meeting of the minds) is an essential element for the formation of a valid contract; absence of this negates contractual agreement.
• In sales through correspondence, a mistaken identity may void the contract if the seller intends to contract only with a specific party.
• Where a contract is void, no legal title passes, preventing subsequent bona fide purchasers from acquiring valid ownership.
• The tort of conversion protects the true owner's rights where goods have been transferred without proper title.
• The distinction between written contracts (as in Cundy v Lindsay) and face-to-face dealings (as in Phillips v Brooks) affects whether a contract is considered void or voidable.
• Modern application recognizes the difficulty in distinguishing mistakes as to identity (void) from mistakes as to attributes (voidable) and limits the doctrine’s scope accordingly.

Conclusion

Cundy v Lindsay confirms that a contract is void for fundamental unilateral mistake as to identity in written transactions, such that a rogue cannot pass title even to good faith purchasers, underscoring the critical role of consensus ad idem in contract formation and title transfer.