Cundy v Lindsay

March 04, 2024
Micheal James

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In the bustling Victorian commercial landscape of 1877, a seemingly ordinary sale of handkerchiefs ignited a legal drama that continues to cast a long shadow on English contract law. Cundy v Lindsay, decided in 1878, delves into the murky waters of mistaken identity, fraudulent schemes, and the very essence of legal ownership in a world driven by contracts and commerce.

Facts of the Case

  • Lindsay & Co.: Renowned linen traders, unknowingly lured into a fraudulent contract by Blenkarn, an imposter posing as another established linen company, Blenkiron & Co.
  • Blenkarn: Orchestrated the deceit, securing a large order of handkerchiefs from Lindsay & Co. through forged correspondence.
  • Cundy: An innocent third party, purchasing the stolen handkerchiefs from Blenkarn in good faith and unaware of the fraudulent misrepresentation.

 Arguments of the Parties

  • Lindsay & Co.:
    • Claimed their contract with Blenkarn was void due to a crucial mistake as to his identity, mistaking him for Blenkiron & Co.
    • Argued that no valid contract or transfer of ownership occurred, rendering Cundy’s purchase from Blenkarn invalid.
    • Demanded the return of their stolen handkerchiefs from Cundy, regardless of his good faith purchase.
  • Cundy:
    • Maintained their purchase from Blenkarn constituted a separate, valid contract, independent of the fraud perpetrated on Lindsay & Co.
    • Argued that as a bona fide purchaser (buyer in good faith), they acquired legal title to the handkerchiefs despite Blenkarn’s lack of ownership.
    • Refused to return the handkerchiefs, citing their own good faith transaction and reliance on Blenkarn’s apparent authority.

Court’s Verdict and Reasoning

  • The Court of Appeal, in a landmark decision, sided with Lindsay & Co.
  • Lord Cairns, delivering the judgement, established the principle that a contract can be void due to a fundamental mistake concerning the identity of the contracting party.
  • In this case, Lindsay & Co.’s intention to contract with Blenkiron & Co. was crucial and not fulfilled due to Blenkarn’s impersonation. Therefore, the court ruled that no valid contract ever existed between Lindsay & Co. and Blenkarn, leaving the transfer of title and Cundy’s purchase irrelevant.
  • Lindsay & Co., as the rightful owners, were entitled to recover their handkerchiefs from Cundy despite his good faith purchase.

Analysis and Impact

  • Cundy v Lindsay stands as a significant pillar in English contract law, particularly concerning mistake in contract formation and the nemo dat quod non habet principle (no one can give what they do not have).
  • The case clarified that a mistake about a party’s identity, even if caused by third-party fraud, can be decisive in voiding a contract.
  • However, the case also recognizes the concept of bona fide purchase, aiming to protect innocent third parties who unwittingly acquire goods.
  • Cundy v Lindsay continues to influence legal discussions surrounding fraud, mistake, and good faith transactions in contract law.


Cundy v Lindsay serves as a cautionary tale for both businesses and individuals involved in commercial transactions. The case underlines the importance of careful verification of contracting parties’ identities and vigilance against potential fraud. Ultimately, Cundy v Lindsay reminds us that even in the face of good faith and innocent parties, legal ownership rests on a valid contract formation, with mistakes regarding critical elements potentially having significant consequences.

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