Report of Contract of Agency

717 Words3 Pages
Topic: Law of agency

Summary of Facts:

Company Star Boat employed Tom as the manager for marketing and sales department. Being an agent for Star Boat, Tom frequently concluded contracts with a number of suppliers for acquiring certain parts to manufacture boats. Smooth Sailing was one of the suppliers. Tom resigned from Star Boat in July 2012 upon being offered a better position in Star Ferry. However, he acquired 4,000 parts from Smooth Sailing in August and manager of Smooth Sailing did not notice that in the contract Tom indicated his signature as “manager, Star Ferry” and thought they were dealing with Star Boat as usual. When Smooth Sailing later notified Star Boat to make payment, Star Boat wanted to ratify the contract.
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L & Co dispatched the goods on credit to Blenkarn, who resold 250 dozen to Cundy. Blenkarn did not pay for the goods. L & Co sued Cundy to recover the handkerchiefs. It was held that the contract between L & Co and Blenkarn was void for unilateral mistake. L & Co intended to deal with Blenkiron & Co, not Blenkarn. Cundy was liable to return the handkerchiefs to L & Co because no right of ownership had passed to him.

Lewis v. Avery (1971)
Lewis sold his car to a man who claimed to be Richard Greene, a popular star. The man paid by cheque, providing a film studio pass as a proof of his identity. He sold the car to Avery. The cheque had been taken from a stolen cheque book and was later dishonoured. Lewis sued Avery to recover his car. It was held that this contract cannot be voided as the plaintiff cannot show the importance of identity. The mistaken belief to the credibility of act is not sufficient.


Comparing the legal issue between Cundy v. Lindsay (1876) and our case, both cases have the unilateral mistake. Cundy v. Lindsay can be voided because the identity was vital for them to form a contract.

For the second case Lewis v. Avery (1971) compare with our case, both are also have the unilateral mistake. But the case Lewis v. Avery cannot be voided as it cannot show the importance
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