Contract Law Essay Example | Topics and Well Written Essays - 2000 words

Contract Law - Essay Example In some cases, it occurs that an individual fraudulently represents themselves to the other party as the owner of goods of another identifiable person. The law on the cases relating to such kind of conducts euphemistically describe them as cases of â€Å"mistaken identity†. However, such a description is often insufficient and unsatisfactory. A considerable number of judges are reported saying that the United Kingdom law is in a â€Å"sorry condition â€Å"regarding this legal aspect and that it is only the Parliament or the Lordship House that can remedy the situation.3 This paper focuses on these arguments by analyzing a case law, legal issues involved in it, and the legal issues involved in the case. Particularly, the paper will focus on Shogun Finance Ltd v Hudson [2003] UKHL 62 and the legal issues involved in the situation described by Lord Nicholls of Birkenhead. The law of contract describes a mistake as a belief erroneously created in a contract that specific facts relating to all or some parts of the contract are true whereas they are not. Usually, if such a mistake is found to exist in a contract, then that particular contract is rendered void.4 Lord Denning, in the case of Lewis v Avery held that a contract can be void if the plaintiff can prove that at the time of entering the agreement, he or she had believed that the identity of the defendant (the other party) was of critical importance because a plain belief is not adequate.5 The common law has identified only three forms of mistakes that can arise from a contract: the common mistake, the mutual mistake, and the unilateral mistake. From this identification it is clear that the mistake of identity does not exist. It is important to point out that none of the identified mistakes has adequately covered mistake of identity. This explains why there has been increasing concern regarding the description of the case by law as being unsatisfactory.6 A closer look of the case law shows that mista ken identity cases are few in number and do not occur in increasing frequency like the other types of mistakes. Nonetheless, this does not mean that mistaken identity is not a critical legal aspect in law of contract. As a matter of fact, mistaken identity cases are very crucial as they (just like other types of mistakes) amount to breach of contract if they occur and therefore it is important that it is addressed once and for all. Besides, a key objective of law is to achieve equity and justice. As such, failing to remedy the â€Å"sorry condition† of law covering mistaken identity cases will defeat the very of law as it may lead to unjust rulings.7 Often, cases of mistaken identity happen in simple contracts, that is, contracts formed without involvement of any legal formalities. Partnership agreements and sale of goods contract mostly take the dimension of simple contracts. Sales of goods are the most prone and mistaken identity cases frequently arise from sale of goods co ntract. The principle of nemo dat non quod habet forms the major interplay in the mistaken identity cases. This principle is a fundamental legal axiom that implies â€Å"no one [can] give what one does not have† and that â€Å"a person can only give as good a title as one possesses†