Chapter 6 Self-test questions

. If A makes an offer specifically to B, who may accept that offer?

Anyone who sees the offer.

B only.

B or a third party.

All of the above.

. What is usually the effect of a mistake by A as to B's identity?

B may accept A's offer, and the contract is completely valid.

B may accept A's offer, but the contract is voidable.

B may not accept A's offer, so any 'contract' between them is void.

None of the above

. What is the effect of a mistake by A as to B's attributes, where B fraudulently misrepresents himself to be someone else?

B may accept A's offer, and the contract is completely valid.

B may accept A's offer, but the contract is voidable.

B may not accept A's offer because the contract is void.

B may not accept A's offer because it is not a written contract.

. What is meant by the term 'bona fide purchaser' (a 'BFP'), in relation to the passing of property?

A fraudulent party who dishonestly acquires property from its legal owner.

A fraudulent party who purchases property with knowledge of another party's claim to the property.

An innocent party who receives, gratuitously, property, without notice of any other party's claim to the property.

An innocent party who purchases property without notice of any other party's claim to the property.

. In circumstances where O sells his goods to R due to R's fraudulent misrepresentation, and R then sells the goods onto a BFP, when will O be able to recover the goods from the BFP?

Always, because O retains title.

Never, because title has passed to the BFP.

Only where the contract between O and R is voidable and had already been rescinded before R sold the goods to the BFP.

Only where the contract between O and R is voidable and has not been rescinded.

. Why is a bona fide purchaser ('BFP') sometimes known as 'Equity's Darling'?

Because the BFP has paid for property, rather than receiving it gratuitously.

Because good faith is a desirable characteristic for purchasers.

Because a BFP is able to take title to purchased property free from equitable claims.

Because a BFP loses legal rights, but retains equitable rights, to purchased property.

. According to the House of Lords in Cundy v Lindsay, why did Lindsay's claim to recover the property succeed?

Because Lindsay made a mistake as to the identity of the offeree, meaning that their agreement was void.

Because Lindsay made a mistake as to the identity of the offeree, meaning that their agreement was voidable.

Because Lindsay made a mistake as to the attributes of the offeree, meaning that their agreement was void.

Because Lindsay made a mistake as to the attributes of the offeree, meaning that their agreement was voidable.

. Why was the result of King's Norton Metal Co Ltd v Edridge, Merrett & Co Ltd different to Cundy v Lindsay?

King's Norton was a case about mistake as to identity; the mistake in Cundy was about attributes.

In King's Norton, the rogue created a fictional firm, which did not relate to an existing firm. The offeror therefore intended to deal with the writer of the letter.

In Cundy the fictional firm did not relate to an existing firm, whereas in King's Norton the fictional firm did relate to an existing firm.

In King's Norton the offeror did not intend to contract with anyone.

. Why was the bona fide purchaser ('BFP') in Shogun Finance Ltd v Hudson liable in the tort of conversion to the finance company (O)?

Because the agreement between O and R was voidable, meaning that title could not pass to the BFP.

Because the BFP acted in bad faith when taking title from R.

Because although O intended to deal with R, R did not pass good title to the BFP.

Because O had intended to deal with DP, rather than R. So, R did not acquire good title to pass to the BFP.

. Did the jeweller's claim against the pawnbroker for the ring in Phillips v Brooks Ltd succeed? Why?

Yes: the original contract between the jeweller and the rogue was void.

Yes: although the pawnbroker was a bona fide purchaser, he did not acquire title to the ring.

No: the pawnbroker was a bona fide purchaser, and acquired title to the ring.

No: although the jeweller intended to sell the ring to Sir George Bullough, this did not matter once the pawnbroker had physical possession of the ring.

. On what basis does the majority in Ingram v Little diverge from Phillips v Brooks Ltd?

There was a mistake as to identity of the rogue in Ingram; the mistake in Phillips was one of the rogue's attributes.

There was a mistake as to the rogue's attributes in Ingram; the mistake in Phillips was one of identity.

There was a presumption in Ingram that the sellers intended to deal with the person in front of them; this was not the case in Phillips.

The majority judgment in Ingram is no different to Phillips: both courts reached the same result.

. In which of the following circumstances may the presumption that a person intends to deal with the party present before them be rebutted?

The rogue dishonestly claims to be a famous actor.

The rogue dishonestly claims to be very wealthy.

The rogue dishonestly claims to act as an agent for another party.

None of the above.

. In which of the following circumstances may a bona fide purchaser ('BFP') be able to invoke the doctrine of estoppel?

O has represented to the BFP that the rogue is the owner of the goods, and O knows that the BFP will act on that statement.

O has represented to the BFP that the rogue is not the owner of the goods, and O knows that the BFP will act on that statement.

O has represented to the BFP that the rogue is the owner of the goods, and O does not know that the BFP will act on that statement.

O has represented to the BFP that the rogue is not the owner of the goods, and O does not know that the BFP will act on that statement.

. In Henderson v Williams, which of the parties did the court decide held title to the sugar at the end of the case?

Grey & Co, the original owners of the sugar.

Fletcher, the rogue.

Robinson, the customer of Grey & Co.

Henderson, the bona fide purchaser.

. Why was estoppel inoperative in Cundy v Lindsay?

There rogue did not act in bad faith.

Lindsay did not 'hold out' the rogue to be the owner of the goods.

Lindsay 'held out' the rogue to be the owner of the goods.

The claimant failed to plead estoppel.

. What did Devlin LJ in Ingram v Little suggest as a reform to the law in such cases?

To make the bona fide purchaser strictly liable, irrespective of whether the contract between the offeror and the rogue was void or voidable.

To make the offeror strictly liable, irrespective of whether the contract between the offeror and the rogue was void or voidable.

To allow an apportionment between the rogue and the bona fide purchaser.

To allow an apportionment between the owner and the bona fide purchaser.

. Why did the minority in Shogun Finance think that a mistake of identity should only ever render a contract voidable, rather than void?

Voidable contracts allow the bona fide purchaser to affirm the agreement.

The current law means that O is better protected if he can establish his own mistake as to identity than if he relies on the fraud of R.

Voidable contracts will provide greater security of receipt for O.

Void contracts create unfairness between O and the bona fide purchaser.

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