Chapter 6 End of Chapter Questions

. What is the well-established principle that allows the legal owner of goods to sue a thief or other third party in possession of those goods for their value?

A person cannot lose legal title to their goods without consent.

A person cannot pass on to another a better title to goods than he has himself.

A bona fide purchaser may only gain title when purchased from the original owner.

None of the options given is correct.

. What is the difference between a void and voidable contract?

There is no difference.

A void contract is valid contract until it is rescinded, whereas, in this context, a voidable contract is another way of saying that there is no contract at all.

A voidable contract is valid contract until it is rescinded, whereas, in this context, a void contract is another way of saying that there is no contract at all.

None of the options given is correct.

. If a contract has been 'rescinded', what has happened to the contract?

The whole transaction will be set aside and both parties restored to the position they were in before the contract was entered into.

The parties to the contract are relieved of their obligations to complete the transaction but remain in the position they are in at the time of rescission.

The whole transaction remains in place but either party is given the option of forfeiting their rights under the contract.

None of the options given is correct.

. Does the law draws a distinction between written contracts and face-to-face transactions in determining whether an owner intended to sell to the 'rogue' or the person whom the rogue was pretending to be?

Yes

No

. Callum runs a furniture store, selling high-end office furniture to international businesses. David emails an order of desks to Callum, claiming to be a new Chinese conglomerate which is setting up in London. Callum sets up an account for David, and sends the desks. David never sends the agreed payment for the desks, and sells them on to a bona fide purchaser. Can Callum claim the desks back from the bona fide purchaser?

Yes

No

. Eve is buying a new car and wishes to get rid of her old one, but only to a reputable second-hand car dealer. Fred meets Eve and tells her that he is an agent for 'FreeYourCar', a company that specialises in purchasing and selling used vehicles. Eve knows of FreeYourCar. Eve sells the car to Fred, who she later discovers is a fraudster. Fred has already sold the car on to Glenda. Can Eve claim the car back from Glenda?

Yes

No

. What policy reason did the Law Reform Committee give when rejecting Devlin LJ's suggestion in Ingram v Little that there should be apportionment of the loss suffered between the two innocent parties – the original owner (O) and the third party purchaser (BFP)?

Apportionment requires a value judgment between two parties that the courts are not equipped to make.

The BFP should always be protected since he has paid money for the goods.

There would be practical difficulties where there is more than one BFP.

None of the options given is correct.

. The Law Reform Committee recommended that where goods are sold under a mistake as to the buyer's identity, the contract should be voidable and not void (at least as far as third parties are concerned). What would the effect of this be on Cundy v Lindsay?

It would be reversed.

It would remain good law.

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