United Kingdom House of Lords Decisions

OPINIONS

OF THE LORDS OF APPEAL

FOR JUDGMENT IN THE CAUSE

Shogun Finance Limited (Respondents)

v.

Hudson (FC) Appellant

ON

WEDNESDAY 19 NOVEMBER 2003

The Appellate Committee comprised:

Lord Nicholls of Birkenhead

Lord Hobhouse of Woodborough

Lord Millett

Lord Phillips of Worth Matravers

Lord Walker of Gestingthorpe

HOUSE OF LORDS

OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT

IN THE CAUSE

Shogun Finance Limited (Respondents) v. Hudson (FC) (Appellant)

[2003] UKHL 62

LORD NICHOLLS OF BIRKENHEAD

My Lords,

1.   This appeal raises a difficult problem about the effect of fraudulent misrepresentation on the formation of a contract. If a crook (C) fraudulently represents to the owner of goods (O) that he is another identifiable person (X) and on that basis O parts with goods to C by way of sale, is there in law a contract between O and C? Does the answer to this question differ according to whether O and C communicated face to face, or by correspondence, or over the telephone, or by e-mail? The law on cases involving this type of fraudulent conduct, euphemistically described as cases of 'mistaken identity', is notoriously unsatisfactory. The reported decisions are few in number and they are not reconcilable. In the present case Sedley LJ said the law has tied itself into a Gordian knot. Brooke LJ said the law is in a 'sorry condition' which only Parliament or your Lordships' House can remedy: see [2002] QB 834, 847, 855.
2.   Two features are usually present when cases of this type come before the court. The first feature is that a seller of goods is concerned with the creditworthiness of the proposed buyer. The seller wants to be sure he will be paid for the goods he is handing over. Here the common law seems to have drawn a distinction between two kinds of fraudulent misrepresentation. The common law distinguished between a case (1) where a crook fraudulently asserts he is creditworthy and a case (2) where a crook fraudulently asserts he is someone else known to be creditworthy. One might suppose there is no difference of substance between these two cases. These are merely two ways a crook may assert a spurious creditworthiness. But, historically, the law seems to have been otherwise. In case (1), when the seller parts with his goods he does so pursuant to a voidable contract. This is said to be a case of mistake as to a person's attributes. In case (2), in some circumstances but not all, the seller has been held to part with his goods pursuant to a void contract, that is, no contract at all. This is said to be a case of mistake as to a person's identity.
3.   The second feature usually present in cases of this type is that the crook then sells the goods to an innocent third party. This feature explains why the distinction between a voidable and a void contract matters. Having fraudulently acquired the goods from their owner, the crook then sells them to an unsuspecting third party. The rights of this innocent third party may depend upon the nice distinction between a voidable contract and a void contract. In case (1), where the crook fraudulently misrepresents his own financial standing, the loss falls on the unfortunate owner of the goods who was tricked into parting with them to the crook. King's Norton Metal Co Ltd v Edridge, Merrett and Co Ltd (1897) 14 TLR 98 is an instance of this. There the crook ordered some brass rivet wire from a metal manufacturer. On his writing paper he represented he was in business in a big way, running a large factory and having several depots and agencies. The manufacturer, King's Norton, supplied the goods sought but was not paid. King's Norton was unable to recover the goods or their value from the third party to whom the crook subsequently sold them.
4.   This outcome is to be contrasted with case (2), where the crook asserts he is someone else. In such a case the loss sometimes, but not always, falls upon the unfortunate third party who also was a victim of the crook's trickery. The third party paid for the goods in all honesty, but he must return them to their original owner or pay their value. Thus in Cundy v Lindsay (1878) 3 App Cas 459 Cundy had to pay the linen manufacturers Lindsay & Co for the 250 dozen cambric handkerchiefs the crook acquired from Lindsay by fraudulently representing he was the respectable business firm of Blenkiron.
5.   The distinction in outcome thus drawn between these two kinds of fraudulent misrepresentation, one as to 'attributes' and the other as to 'identity', is unconvincing. It has been described as a reproach to the law. To a considerable extent the distinction has now been eroded. Cundy v Lindsay (1878) 3 App Cas 459 was decided over a century ago, and since then there have been significant developments in this area of case law. Unfortunately these developments have left the law in a state of disarray. The question before the House on this appeal is whether this distinction, so far as it remains, should still be regarded as good law.

    Fraudulent misrepresentation and intention

6.   The question before the House calls first for some analysis of the effect of fraudulent misrepresentation on a person's intention to enter into a contract. A contract of sale and purchase, like any other contract, requires agreement, a meeting of minds. The seller must intend, or appear to intend, to sell the goods, and the buyer must intend, or appear to intend, to buy the goods on the agreed terms. The presence of fraud does not negative the existence of such an intention on the part of either party. Fraud does not negative intention. A person's intention is a state of mind. Fraud does not negative a state of mind. The existence of a fraudulent misrepresentation means that a person's intention is formed on a false basis - a basis, moreover, known by the other party to be false. The effect of fraud is to negative legal rights or obligations otherwise flowing from an intention to enter into a contract. Fraud enables the victim of the fraud to decline to proceed with a contract into which, by reason of the fraudulent misrepresentation, he was induced to enter, and he has a claim for damages for any loss he may suffer. But fraud does not have the consequence of negativing the formation of a contract.
7.   Similarly with consent: as noted by Robert Goff LJ in Whittaker v Campbell [1984] QB 318, 327, in this context fraud does not 'vitiate' consent. Professor Glanville Williams rightly said that the maxim 'fraud vitiates consent' is thoroughly misleading: see 23 Canadian Bar Review (1945) 271, 291-292. Whether a person has consented to this or that is a question of fact. Fraud does not negative a fact. As with intention, so with consent, fraud negatives legal rights or obligations otherwise flowing from a person having given his consent to a particular happening. Fraud can destroy legal rights; it cannot destroy facts.
8.   This distinction, between negativing intention or consent and negativing the rights otherwise flowing from intention or consent, is important. It explains why the law treats a contract induced by fraud as voidable, not void. The necessary coincidence of intention, or consensus ad idem, may exist even where the intention and consent of the victim were induced by fraud. An intention thus induced is regarded by the law as sufficient to found a contract, even though the victim may repudiate the contract as soon as he discovers the fraud.
9.   Thus, if a person is induced to buy goods by a fraudulent misrepresentation that the goods are sound, in law a contract to buy the goods is created even though the goods are different from the goods the buyer intends to buy and even though the other party knows this. The fact that the goods are different in quality from the goods which, as the crook knows, the victim wishes to buy is not regarded by the law as meaning that no contract was made.
10.   This approach is not confined to cases of differences of quality. The law adopts the same approach where the goods offered for sale are fraudulently misrepresented to be a unique item such as the original of a specific painting by a named artist or the football shirt worn by Bobby Moore in the 1966 World Cup final match. The buyer wishes ('intends') to buy the particular original painting or the particular shirt and nothing else. The seller knows this. But the effect of the misrepresentation is that the buyer, believing the proffered goods to be as represented, agrees to buy the proffered goods. He enters into a contract on the basis of what he believes is the position. In law he contracts to buy the proffered goods even though, looking more broadly at his state of mind, he had no intention of buying anything other than the original of the particular painting or the particular football shirt. If intention is considered in this broad sense, there is no 'meeting of minds' whenever one party is persuaded by the other to enter into a contract by a material fraudulent misrepresentation made by the other. But for the purpose of deciding whether a person had the necessary intention to enter into a contract with the crook, a person's intention is considered more narrowly. It is assessed by reference to what he believed the position to be. The fact that his belief was induced by the other's fraudulent misrepresentation entitles him to repudiate the contract. His belief means there was a contract, but the fraudulent inducement of his belief means the contract is voidable.
11.   The position is similar if the owner of goods agrees to sell them to a prospective buyer on the basis of a fraudulent assertion of his financial reliability. The buyer's fraudulent statement about himself does not negative the seller's intention to sell the goods to the crook on the agreed terms. Nor does it negative the fact that, when the crook acquired the goods from the seller, he did so with the seller's consent. The fraud means only that the seller's contractual intention was formed, and his consent to hand over the goods obtained, on a fraud-induced basis. There is a contract, but it may be avoided on discovery of the fraud.

    Fraudulent misrepresentation and identity

12.   Fraudulent misrepresentations about a person's identity have to be considered against this background of legal principle. The factual postulate now under consideration, as mentioned at the outset, is that a crook (C) fraudulently misrepresents to the owner of goods (O) that he, C, is another identifiable person (X) whom O believes to be creditworthy. In reliance on this representation O agrees to sell the goods and he hands them over to C. Is this pursuant to a voidable contract between O and C? Or is there no contract between them at all? As between O and C the answer is of no moment. Either way O has ample remedies against C, assuming C has some money and can be traced. As already noted, however, the answer to these question may be of crucial importance to a third party who subsequently bought the goods in good faith from C.
13.   In cases of this type there are two innocent parties, O and the third party purchaser. Striking the right balance when one of two innocent parties must sustain a loss is seldom easy. In 1960 Devlin LJ suggested that in this type of case the loss should be divided between O and the third party in such proportion as is just in all the circumstances: see Ingram v Little [1961] 1 QB 31, 73-74. Lord Gardiner LC then referred this problem to the Law Reform Committee. In its 12th Report 'Transfer of Title to Chattels' (1966, Cmnd 2958) the committee rejected Devlin LJ's apportionment suggestion as impracticable. The committee recommended that where goods are sold under a mistake as to the buyer's identity the contract should, so far as third parties are concerned, be voidable and not void: paragraphs 9-12 and 15.
14.   Parliament did not implement this recommendation. Instead the Sale of Goods Act 1979 re-enacted the relevant law in much the same terms as the Sale of Goods Act 1893. In general, proprietary rights of an owner of goods endure against a third party who buys them in good faith from a thief. That is the effect of section 21(1). But there are statutory exceptions in some cases where the owner of goods parted with his goods consensually. The third party may acquire a good title if C, who purported to sell the goods to him, had a voidable title: section 23. Or if C had agreed to buy the goods from O and was in possession of the goods with O's consent: section 25. Additionally, section 27 of the Hire-Purchase Act 1964 made a limited exception for the protection of purchasers of motor vehicles. Section 27 of the Hire-Purchase Act 1964, as substituted by the Consumer Credit Act 1974, provides:
'(1) This section applies where a motor vehicle has been bailed … under a hire-purchase agreement, or has been agreed to be sold under a conditional sale agreement, and, before the property in the vehicle has become vested in the debtor, he disposes of the vehicle to another person.

(2) Where the disposition referred to in subsection (1) above is to a private purchaser, and he is a purchaser of the motor vehicle in good faith, without notice of the hire-purchase or conditional sale agreement … that disposition shall have effect as if the creditor's title to the vehicle has been vested in the debtor immediately before that disposition.'

    'Creditor' means the person by whom goods are bailed under a hire-purchase agreement, and 'debtor' means the person to whom a motor vehicle is bailed under such an agreement: section 29(1), (4).

    The proceedings

15.   The present case concerns this latter exception. The crucial issue is whether Norman Hudson, who bought a Mitsubishi Shogun SWB motor car from a crook who promptly disappeared, can bring himself within section 27 of the Hire-Purchase Act 1964. Mr Hudson was a private purchaser who bought the vehicle in good faith. His right to retain this vehicle depends upon whether he can establish that the crook acquired possession of the vehicle under the written hire-purchase agreement which on its face was made between the finance company, Shogun Finance Ltd, and a Mr Durlabh Patel. When signing this agreement the crook pretended to be Mr Durlabh Patel, living at an address in Leicester. As proof of his identity the crook produced Mr Patel's driving licence which he had obtained improperly. The finance company checked Mr Patel's credit rating. Finding this to be satisfactory the finance company instructed the motor dealer who had been dealing with the crook to let the crook have the car. Mr Patel knew nothing about any of these goings on.
16.   If Mr Hudson is to bring himself within section 27 of the Hire-Purchase Act 1964 he must establish that possession of the car obtained by the crook in this way was under a hire-purchase agreement made between him, the crook, and Shogun Finance. There is of course no question of an agreement between Mr. Patel and Shogun Finance. At the trial the judge, assistant recorder D E B Grant sitting in the Leicester County Court, held that Mr Hudson failed to do so. He gave judgment for Shogun Finance in the amount of £18,374.
17.   The majority of the Court of Appeal, Brooke and Dyson LJJ, agreed with the judge's decision: see [2002] QB 834. Brooke LJ said the hire-purchase agreement, if made between anyone, was made between the finance company and Mr Patel. The finance company did not make the agreement with anyone else. Dyson LJ held that section 27 of the Hire Purchase Act 1964 did not avail Mr Hudson because the crook was not the hirer named in the written hire-purchase agreement and therefore he was not the debtor under the agreement. Sedley LJ dissented. The finance company, using the dealer as its agent, had in law contracted face to face with a fraudsman in circumstances insufficient to rebut the presumption that it was with him, and not with the person he claimed to be, that the company was contracting.

    Fraudulent misrepresentation: face to face dealings

18.   I can now turn to the effect of a fraudulent misrepresentation made by a person about his identity. In cases of face to face dealings the law, as declared by the preponderance of authority, is tolerably clear. The owner of the goods believes the person in front of him is X, and in that belief he contracts with the person in front of him. The fraudulent misrepresentation by the crook C regarding his identity no more negatives O's intention to contract with C than, in my earlier example, the seller's misrepresentation about the identity of the proffered goods negatives the buyer's intention to buy the proffered goods. In each case the relevant intention is to be ascertained by looking at the position which, as a result of the misrepresentation, the other party believes to exist. On that footing there is consensus, in the relevant respect, between the parties. O believes C, the person in front of him, to be X and he deals with C in that belief. The fraud entitles O to avoid the contract, but it does not negative the formation of a contract with C.
19.   Thus in Phillips v Brooks Ltd [1919] 2 KB 243 Horridge J held that the jeweller contracted to sell the ring to the crook in the shop who represented he was Sir George Bullough. The jeweller had heard of Sir George Bullough and checked he lived at the address given. The jeweller gave evidence he had no intention of making any contract with any person other than Sir George Bullough. Horridge J rightly analysed what that meant by adopting a passage from the judgment of Morton CJ in the Massachusetts case of Edmunds v Merchants' Despatch Transportation Co 135 Mass 283, 283-284:
'The fact that the seller was induced to sell by fraud of the buyer made the sale voidable, not void. He could not have supposed that he was selling to any other person; his intention was to sell to the person present, and identified by sight and hearing; it does not defeat the sale because the buyer assumed a false name, or practised any other deceit to induce the vendor to sell.' (emphasis added)

20.   In Ingram v Little [1961] 1 QB 31, another 'face to face' case, the majority of the Court of Appeal reached the contrary conclusion. A crook responded to an advertisement for a car and fraudulently introduced himself as P G M Hutchinson living at a stated address in Caterham. The owners of the car checked in the telephone directory there was a person of that name living at that address. The crook paid for the car with a cheque made out in his assumed name. Sellers and Pearce L JJ held that the owners did not enter into a contract with the crook. Sellers LJ considered the offer made by the owners of the car was capable of acceptance only by the honest P G M Hutchinson of Caterham. Pearce LJ considered that whether a party was not contracting with the physical person to whom he uttered the offer but with another individual whom he believed to be the person physically present was a question of fact.
21.   Devlin LJ disagreed. He pointed out, at p 65:
'If Miss Ingram had been asked whether she intended to contract with the man in the room or with P G M Hutchinson, the question could have no meaning for her, since she believed them both to be one and the same. The reasonable man of the law - if he stood in Miss Ingram's shoes - could not give any better answer.'

22.   Devlin LJ suggested, at p 66, that to deal with this difficulty the law should formulate a presumption that a person is intending to contract with the person to whom he is actually addressing the words of contract. That should be the starting point. Devlin LJ stressed that the presumption could not be rebutted by piling up evidence that Miss Ingram would never have contracted with the person in front of her unless she had thought him to be P G M Hutchinson. There was everything to show that Miss Ingram would never have accepted the crook's offer if she had known the truth, but nothing to rebut 'the ordinary presumption' that she was addressing her acceptance, 'in law as well as in fact', to the person to whom she was speaking.
23.   The majority decision in Ingram v Little [1961] 1 QB 31 was doubted when the same problem came before a differently constituted Court of Appeal ten years later, in Lewis v Averay [1972] 1 QB 198. The court comprised Lord Denning MR, Phillimore and Megaw LJJ. In the Lewis case a crook represented orally to the owner of a car that he was a well known actor, Richard Greene. Lord Denning MR, characteristically, enunciated a broad proposition: mistake as to identity renders an apparent contract voidable, not void. In this type of case the third party knew nothing of what passed between the seller and the rogue and he acted with complete circumspection and in good faith. It was the seller who let the rogue have the goods and thus enabled him to commit the fraud on the third party. Phillimore LJ, at p 208, considered there was nothing to displace the prima facie presumption that the car owner was dealing with the person present in the flat, the rogue: 'this case really is on all fours with Phillips v Brooks which has been good law for over 50 years'. Megaw LJ, at p 209, based his decision on the ground that the mistake of the owner of the car went no further than a mistake as to the attributes of the rogue: it 'was simply a mistake as to the creditworthiness of the man who was there present and who described himself as Mr Green'.
24.   Sometimes in these cases the transaction is evidenced in writing. This can make no difference to the outcome. Clearly there is no magic attaching to a misrepresentation made in writing rather than by word of mouth. The presence or absence of a written record of a transaction negotiated face to face, such as an invoice or receipt made out in favour of Sir George Bullough, with or without his address, or a cheque ostensibly signed by Sir George Bullough, is neither here nor there for present purposes. Writings such as these are no more than stark contemporary confirmation that the misrepresentation was made and that the seller believed it.
25.   Similarly the contractual position between O and C must be the same if they meet face to face and the deal arranged by them is later embodied in a written agreement. This further step does not relevantly change the legal position. The written contract is expressed to be made between O and X. But C, the person with whom O was physically dealing, asserted he was X, and O believed him. So the description of C in the contract as X was a fraudulent misnomer. C used a false name and address, and the written contract is to be construed accordingly.

    Fraudulent misrepresentation: dealing by correspondence

26.   But what of the case where a fraudulent misrepresentation is made in writing but O and C do not meet each other? C writes to O saying he is X and the deal proceeds on that basis. O parts with his goods to the person with whom he is in fact dealing, namely, C, in the belief he is X.
27.   At first sight it seems counter-intuitive to speak of a contract between O and C in cases of this type. It seems counter-intuitive because on its face a contract in writing or in correspondence expressed to be made between O and X is inconsistent, agency apart, with its being a contract between O and C. But this intuitive response is not a sound guide if it leaves out of account, as all too easily it may, the vitally important underlying fraudulent misrepresentation. In his dealings with O the crook C represented he was X, and O proceeded to deal with him (C) in that belief.
28.   When this feature is kept in mind it readily becomes apparent that in principle cases of this type are no different from cases of face to face dealings. The existence of physical immediacy in one case, and the absence of it in the other, is immaterial. The physical immediacy of C in face to face cases tends to emphasise O's intention to deal with the person in front of him. With other forms of communication such as the telephone or correspondence this physical immediacy is lacking. But in each case, whatever the mode of communication, what matters is whether O agreed to sell his goods to the person with whom he was dealing, not why he did so or under what name. The latter is relevant to remedy, not to formation of a contract.
29.   In this regard mention must be made of reasoning sometimes advanced here, along the lines that the identity of the person to whom a written offer is made is a question solely of construction of the document. The offer, it is said, is made to the person identified in the document and no one else. A written offer made by O to X is not capable of acceptance by C. Hence, it is said that, whatever the position in face to face dealings, in cases of written contracts or contracts made by correspondence there can be no contract between O and C, contradicting as this would the terms of the document.
30.   The flaw in this reasoning is that it begs the crucial question: to whom was the offer made? The reasoning assumes this is a straightforward case of an offer made to the person named. Indeed the person named is X. But that is only part of the picture. O believes that X, the person to whom he is writing and to whom he addressed the offer, is one and the same person as the person with whom he is dealing. In fact he is not dealing with X. He is dealing with C. O's misapprehension in this regard, induced by C's fraud, is no different in principle from a case where C's misrepresentation is made orally in the course of the face to face meeting. The legal problem is the same in both cases. The presence or absence of writing does not constitute a principled ground of distinction.
31.   Thus, when Lindsay & Co supplied linen handkerchiefs in response to a written order they were under a misapprehension regarding the identity of the person placing the order in the same way as the jeweller in the shop was under a misapprehension regarding the identity of his customer ('I am Sir George Bullough') in Phillips v Brooks Ltd [1919] 2 KB 243. If the approach adopted in Phillips v Brooks is correct, Lindsay's misapprehension no more negatived the formation of a contract with the person placing the written order for handkerchiefs than did the like misapprehension by the jeweller in the case of Phillips v Brooks. The jeweller parted with his ring to the customer in his shop. Lindsay parted with their linen by sending it to the address supplied by the crook. On what terms? The answer must be, on the terms agreed between Lindsay and the person with whom they were dealing. That was a contract Lindsay could enforce, should they have wished, or repudiate on the grounds of fraudulent misrepresentation.
32.   In Cundy v Lindsay (1878) 3 App Cas 459 the House reached the contrary conclusion. The reasoning of all their Lordships was to the same effect. Lord Cairns LC encapsulated this reasoning, at p 465:
'Of [the crook Blenkarn] [Lindsay] knew nothing, and of him they never thought. With him they never intended to deal. Their minds never, even for an instant of time, rested upon him, and as between him and them there was no consensus of mind which could lead to any arrangement or any contract whatever.'

    Lord Hatherley and Lord Penzance left open what the position would be had the crook come into personal contact with Lindsay.

    The choice

33.   In my view this decision is not reconcilable with Phillips v Brooks Ltd [1919] 2 KB 243 or with Lewis v Averay [1972] 1 QB 198 or with the starting point 'presumption' formulated by Devlin LJ in Ingram v Little [1961] 1 QB 31. The legal principle applicable in these cases cannot sensibly differ according to whether the transaction is negotiated face to face, or by letter, or by fax, or by e-mail, or over the telephone or by video link or video telephone. Typically today a purchaser pays for goods with a credit or debit card. He produces the card in person in a shop or provides details of the card over the telephone or by e-mail or by fax. When a credit or debit card is fraudulently misused in this way the essence of the transaction is the same in each case. It does not differ from one means of communication to the next. The essence of the transaction in each case is that the owner of the goods agrees to part with his goods on the basis of a fraudulent misrepresentation made by the other regarding his identity. Since the essence of the transaction is the same in each case, the law in its response should apply the same principle in each case, irrespective of the precise mode of communication of offer and acceptance.
34.   Accordingly, if the law of contract is to be coherent and rescued from its present unsatisfactory and unprincipled state, the House has to make a choice: either to uphold the approach adopted in Cundy v Lindsay and overrule the decisions in Phillips v Brooks Ltd and Lewis v Averay, or to prefer these later decisions to Cundy v Lindsay.
35.   I consider the latter course is the right one, for a combination of reasons. It is in line with the direction in which, under the more recent decisions, the law has now been moving for some time. It accords better with basic principle regarding the effect of fraud on the formation of a contract. It seems preferable as a matter of legal policy. As between two innocent persons the loss is more appropriately borne by the person who takes the risks inherent in parting with his goods without receiving payment. This approach fits comfortably with the intention of Parliament in enacting the limited statutory exceptions to the proprietary principle of nemo dat non quod habet. Thus, by section 23 of the Sale of Goods Act 1979 Parliament protected an innocent buyer from a seller with a voidable title. The classic instance of a person with a voidable title is a person who acquired the goods by fraud: see Bramwell LJ in Babcock v Lawson (1880) 5 QBD 284, 286. Further, this course is supported by writers of the distinction of Sir Jack Beatson: see Anson's Law of Contract, 28th edition, p 332. It is consistent with the approach adopted elsewhere in the common law world, notably in the United States of America in the Uniform Commercial Code, 14th edition, section 2-403. And this course makes practical sense. In a case such as the present the owner of goods has no interest in the identity of the buyer. He is interested only in creditworthiness. It is little short of absurd that a subsequent purchaser's rights depend on the precise manner in which the crook seeks to persuade the owner of his creditworthiness and permit him to take the goods away with him. This ought not to be so. The purchaser's rights should not depend upon the precise form the crook's misrepresentation takes.
36.   Cundy v Lindsay has stood for a long time. But I see no reason to fear that adopting this conclusion will unsettle the law of contract. In practice the problems surrounding Cundy v Lindsay arise only when third parties' rights are in issue. To bring the law here into line with the law already existing in 'face to face' cases will rid the law of an anomaly. Devlin LJ's starting point presumption is a workable foundation which should apply in all cases. A person is presumed to intend to contract with the person with whom he is actually dealing, whatever be the mode of communication.
37.   Although expressed by Devlin LJ as a presumption, it is not easy to think of practical circumstances where, once in point, the presumption will be displaced. The factual postulate necessary to bring the presumption into operation is that a person (O) believes that the person with whom he is dealing is the person the latter has represented himself to be. Evidence that the other's identity was of importance to O, and evidence of the steps taken to check the other's identity, will lead nowhere if the transaction proceeds on the basis of the underlying factual postulate.

    The present case

38.   It follows that I would allow this appeal. The principles applicable to the formation of a contract of sale are equally applicable to the formation of a hire-purchase agreement. The document submitted to Shogun Finance, and signed by the crook in the name of Mr Patel, does of course refer unequivocally to Mr Patel. The document identifies him with some particularity: his full name and address, his date of birth, his driving licence number, and his employer's name and address. These details were of prime importance to Shogun Finance because they identified the person whose credit rating it had checked and approved. The company intended to contract with this person. But it is clear from the evidence that Shogun Finance, as much as the dealer in the car showroom, thought this was one and the same person as the individual in the showroom. Shogun Finance proceeded in this (fraud-induced) belief.
39.   This is manifest because Shogun Finance authorised the dealer to hand over the car to the person in the showroom, he being (as the finance company knew) the person who had signed the agreement and he being (so the finance company believed) the person whose credit rating it had checked. Shogun Finance believed he was Mr Patel, in the same way as the jeweller in Phillips v Brooks believed the customer in his shop was Sir George Bullough. In the belief that the person in the dealer's showroom was Mr Patel, Shogun Finance intended to hire the car to that person. That is what the finance company intended to do by the written hire-purchase agreement, and that is what it thought it had done. Had this not been so it would not have released the car to him. Shogun Finance was mistaken in its belief about the identity of the person in the showroom, in the same way as the jeweller was mistaken in his belief about the identity of the person in his shop. But that mistaken belief, induced by the crook's fraudulent misrepresentation, did not negative the finance company's intention to let the car on hire to the person in the showroom on the terms set out in the hire-purchase agreement. Nor could the crook assert he had no contractual intention: he signed the hire-purchase agreement, albeit using a false name and address. The alternative conclusion involves the proposition that when the dealer released the car to the crook, the dealer was guilty of converting the car and was liable to the finance company accordingly. That would be a distorted appraisal of the facts.
40.   The finance company sought to gain assistance from Hector v Lyons 58 P & CR 156, a decision binding upon the Court of Appeal. Suffice to say, that decision should not be taken as authority for the proposition that if O intends to contract with C in the belief he is X, there can be a contract between O and C if the contract is oral but not if it is reduced into writing and expressed to be made between O and X. Evidence of the fraudulent misrepresentation and of O's belief is admissible to identify who are the parties to the written contract.
41.   One further point may be noted. Some time was taken up in this case with arguments on whether the dealer was an agent for the finance company and for what purposes. This was in an endeavour to bring the case within the 'face to face' principle. The need for such singularly sterile arguments underlines the practical absurdity of a principle bounded in this way. The practical reality is that in the instant case the presence or absence of a representative of the finance company in the dealer's showroom made no difference to the course of events. Had an authorised representative of the finance company been present no doubt he would have inspected the driving licence himself and himself obtained the information needed by his company. As it was, a copy of the licence, together with the necessary information, were faxed to the finance company. I can see no sensible basis on which these different modes of communication should affect the outcome of this case. I would set aside the orders of the assistant recorder and the Court of Appeal, and dismiss this action. Mr Hudson acquired a good title to the car under section 27 of the Hire-Purchase Act 1964.

LORD HOBHOUSE OF WOODBOROUGH

My Lords,

42.   The question at issue on this appeal is: Did Mr Hudson acquire a good title to the car when he bought the car from the rogue ('R') who himself had no title? The basic principle is nemo dat quod non habet: see the Sale of Goods Act 1979 s.21(1) and Helby v Matthews [1895] AC 471 where it was held that the same rule applied to a sale by a hire-purchaser. The hire-purchaser has no title to the goods and no power to convey any title to a third party. The title to the goods and the power to transfer that title to any third party remains with the hire purchase company and with it alone. Clause 8 of the hire-purchase 'agreement' and the printed words in the form immediately below the space for the customer's signature also expressly say the same. There are common law and statutory exceptions to this rule (eg, sales in market overt or by a mercantile agent in possession of the goods with the consent of the owner).
43.   In the present case, the statutory exception relied on by Mr Hudson is that in Part III of the Hire-Purchase Act 1964 as re-enacted in the Consumer Credit Act 1974:
"  where a motor vehicle has been bailed .... under a hire-purchase agreement .... and, before the property in the vehicle has become vested in the debtor, he disposes of the vehicle to another person .... [who is] a private purchaser [who has purchased] the motor vehicle in good faith without notice of the hire-purchase .... agreement … that disposition shall have effect as if the creditor's title to the vehicle has been vested in the debtor immediately before that disposition." (s.27(1) and (2), (emphasis supplied)

    Section 29(4) adds:

"  the 'debtor' in relation to a motor vehicle which has been bailed .... under a hire-purchase agreement .... means the person who at the material time (whether the agreement has before that time been terminated or not) .... is .... the person to whom the vehicle is bailed .... under that agreement." (emphasis supplied)

44.   The relevant question is therefore one of the application of this statutory provision to the facts of this case (no more, no less). Thus the question becomes:
'Was R a debtor under the hire-purchase agreement relating to the car?'

    Mr Hudson contends that R was; the Finance Company contends that he was not. The judge and the majority of the Court of Appeal found that he was not; Sedley LJ would have held that he was.

45.   What was the 'hire-purchase' 'agreement' relied on? It was a written agreement on a standard hire-purchase printed form purporting to be signed as the "customer" by one Durlabh Patel, the person who lived at 45 Mayflower Rd, Leicester, to whom driving licence No.'PATEL506018DJ9FM' had been issued and with a date of birth 01/06/58. This was an accurate identification of the real Mr Durlabh Patel, but in no respect of R who was not the person who lived at that address, not the person to whom the driving licence had been issued and (one suspects) not a twin in age of the real Mr Patel. R forged Mr Patel's signature so as to make the signature on the hire-purchase 'agreement' appear to be the same as that on the driving licence. The parties to the written 'agreement' are Mr Patel (the "customer"), and Shogun Finance Ltd (the creditor). There is also an offer and acceptance clause:
You ["the customer named overleaf"] are offering to make a legal agreement by signing this document. We [the creditor] can reject your offer, or accept it by signing it ourselves."

If we sign this document it will become legally binding at once (even before we send you a signed copy) ....."

46.   The effect of this is that -
(i)  it re-emphasises that the customer/hirer is, and is only, the person named on the front of the document;

(ii)  it makes it clear that the agreement is the written agreement contained in the written document;

(iii)  the offer being accepted by the creditor is the offer contained in the document and that alone, that is to say, the offer of Mr Durlabh Patel of the address in Leicester and to whom the driving licence was issued;

(iv)  for a valid offer to be made, the form must have been signed by Mr Durlabh Patel; and,

(v)  most importantly of all, the question in issue becomes a question of the construction of this written document, not a question of factual investigation and evaluation.

    I will take these points in turn but the second and fifth are fundamental to them all and to the giving of the correct answer to this case.

47.   The first point is a matter of the construction of the written document. It admits of only one conclusion. There is no mention in the document of anyone other than Mr Durlabh Patel. The language used is clear and specific, both in the substance of the identification - name and address and driving licence number and age - and in the express words of the offer and acceptance clause - "the customer named overleaf". The 'agreement' is a consumer credit agreement. It is unlike a mere retail sale where, although title may, indeed, will normally have already passed to the buyer, the seller is not obliged to part with the goods until he has been paid or is satisfied that he will be paid. Credit is only relevant to the release of the seller's lien and to his obligation to deliver, not to the basic transaction; the basic transaction is unaffected and will stand. Under a contract for the sale of goods, the contract has been made and, normally, the title to the goods has vested in the buyer before the time for payment has arrived. (Retention of title clauses are a modern development.) By contrast, in a consumer credit transaction, the identity of the customer is fundamental to the whole transaction because it is essential to the checking of the credit rating of the applicant borrower. All this precedes the making of any contract at all. No title to the goods is obtained by the hirer at any stage. If the finance company does not accept the proposer's offer, the proposer has acquired nothing. Unlike in the sale of goods, there is nothing - no status quo - which has to be undone. The observations of Devlin LJ in Ingram v Little [1961] 1 QB at p.69 are not pertinent; the approach and dicta of Denning MR in Lewis v Averay [1972] 1 QB 198 are misplaced and wrong.
48.   It has been suggested that the finance company was willing to do business with anyone, whatever their name. But this is not correct: it was only willing to do business with a person who had identified himself in the way required by the written document so as to enable it to check before it enters into any contractual or other relationship that he meets its credit requirements. Mr Durlabh Patel was such an identified person and met its credit requirements so it was willing to do business with him. If the applicant had been, say, Mr B Patel of Ealing or Mr G Patel of Edgbaston, it would not have been willing to deal with them if they could not be identified or did not meet with its credit requirements. Correctly identifying the customer making the offer is an essential precondition of the willingness of the finance company to deal with that person. The Rogue knew, or at least confidently expected, that the finance company would be prepared to deal with Mr Durlabh Patel but probably not with him, the Rogue; and he was, in any event, not willing himself to enter into any contract with the finance company. This is not a case such as that categorised by Sedley LJ ([2002] QB at 846) as the use of a "simple alias" to disguise the purchaser rather than to deceive the vendor - the situation which resembles that in King's Norton Metal v Edridge Merrett & Co (14 TLR 98). But, even then, in a credit agreement it would be useless to use a pseudonym as no actual verifiable person against whom a credit check could be run would have been disclosed and the offer would never be accepted. Mr Durlabh Patel is the sole hirer under this written agreement. No one else acquires any rights under it; no one else can become the bailee of the motor car or the 'debtor' "under the agreement". It is not in dispute that R was not Mr Durlabh Patel nor that R had no authority from Mr Patel to enter into the agreement or take possession of the motor car.
49.   Mr Hudson seeks to escape from this conclusion by saying: 'but the Rogue was the person who came into the dealer's office and negotiated a price with the dealer and signed the form in the presence of the dealer who then witnessed it.' The third and fourth points address this argument. The gist of the argument is that oral evidence may be adduced to contradict the agreement contained in a written document which is the only contract to which the finance company was a party. The agreement is a written agreement with Mr Durlabh Patel. The argument seeks to contradict this and make it an agreement with the Rogue. It is argued that other evidence is always admissible to show who the parties to an agreement are. Thus, if the contents of the document are, without more, insufficient unequivocally to identify the actual individual referred to or if the identification of the party is non-specific, evidence can be given to fill any gap. Where the person signing is also acting as the agent of another, evidence can be adduced of that fact. None of this involves the contradiction of the document: Young v Schuler 11 QBD 651, which was a case of an equivocal agency signature and it was held that evidence was admissible that the signature was also a personal signature - "evidence that he intended to sign in both capacities .... does not contradict the document and is admissible". (per Cotton LJ at p.655) But it is different where the party is, as here, specifically identified in the document: oral or other extrinsic evidence is not admissible. Further, the Rogue was no one's agent (nor did he ever purport to be). The rule that other evidence may not be adduced to contradict the provisions of a contract contained in a written document is fundamental to the mercantile law of this country; the bargain is the document; the certainty of the contract depends on it. The relevant principle is well summarised in Phipson on Evidence, paragraphs 42-11 and 42-12: "When the parties have deliberately put their agreement into writing, it is conclusively presumed between themselves and their privies that they intend the writing to form a full and final statement of their intentions, and one which should be placed beyond the reach of future controversy, bad faith or treacherous memory." (See also Bank of Australasia v Palmer [1897] AC 540, per Lord Morris at p.545.) This rule is one of the great strengths of English commercial law and is one of the main reasons for the international success of English law in preference to laxer systems which do not provide the same certainty. The case of Hector v Lyons 58 P&CR 156 is simply an application of this basic and long established principle. The father was claiming to be able to enforce a contract of sale of land. The father had conducted the negotiations. Woolf LJ said, at pp. 160-161:
"In this case there is no dispute as to who, according to the written contract, are the parties. The son was described in the contract as one of the parties. He does exist and, in so far as there was a contract at all, it was between him and the other party identified in the contract, Mrs Pamela Doris Lyons."

    Browne-Wilkinson V-C delivered to a judgment to the same effect. On p.159 he referred to the cases "entirely concerned with transactions between two individuals face to face entering into oral agreement", saying:

"In my judgment the principle there enunciated has no application to a case such as the present where there is a contract and wholly in writing. There the identity of the vendor and of the purchaser is established by the names of the parties included in the written contract."

    Mr Hudson submitted, as he had to, that this decision was wrong and should be overruled. In my opinion the Court of Appeal's decision was clearly correct and correctly reasoned in accordance with well established principles.

50.   The argument also fails on another ground. There was no consensus ad idem between the finance company and the Rogue. Leaving on one side the fact that the Rogue never had any intention himself to contract with the finance company, the hire-purchase 'agreement' to which Mr Hudson pins his argument was one purportedly made by the acceptance by the finance company, by signing the creditor's box in the form, of a written offer by Mr Durlabh Patel to enter into the hire-purchase agreement. This faces Mr Hudson with a dilemma: either the contract created by that acceptance was a contract with Mr Durlabh Patel or there was no consensus ad idem, the Rogue having no honest belief or contractual intent whatsoever and the finance company believing that it was accepting an offer by Mr Durlabh Patel. On neither alternative was there a hire-purchase agreement with the Rogue.
51.   It is as well to digress at this stage to consider the chain of contracts or alleged contracts relied upon by Mr Hudson. First, Mr Hudson relies upon a contract of sale he made with the Rogue when he agreed to buy the motor car from the Rogue. He says he got a good title to it from the Rogue under this contract notwithstanding that R had no title. In support of this statute-based contention he argues that there was another contract which he has to say was a contract of hire-purchase between the Rogue and the finance company, the supposed contract contained in the written hire-purchase agreement. There is no dispute that the finance company had bought the motor car from the dealer and was or had become the owner of the car at the time when the finance company signed the document and thereby accepted the offer (if any) in the written hire-purchase document. (That contract of purchase was never put in evidence.) The title to the car was in the finance company. The hirer/debtor under the 'agreement' was Mr Durlabh Patel not the Rogue. The Rogue only comes into the picture because he was the unidentified individual who came into the dealer's office and caused the dealer to sell the motor car to the finance company and the dealer, thereafter, to deliver it to him although he was not in fact Mr Durlabh Patel. (He, of course, came into the story again later as the person who purported to sell the car to Mr Hudson.) The dealer (as his witness signature testifies) apparently believed the Rogue when the Rogue said his name was Mr Patel and negotiated with him, face to face, the price at which the dealer would be willing to sell the car. That negotiation enabled the dealer to fill in the appropriate finance details which the 'customer' should ask for. But the Rogue never had any face to face dealings with the finance company; he dealt with it solely by submitting a written document containing an offer and acceptance clause. There is no room for the application of the 'face to face' principle between the Rogue and the finance company. Nor was the dealer the agent of the finance company to enter into any contract on behalf of the finance company. The dealer is a mere facilitator serving primarily his own interests. If there could have been any doubt or room for argument about this point, it is put beyond argument or doubt by the terms of the offer and acceptance clause in the governing document. R and the dealer are not two individuals conducting negotiations in which all the terms necessary to constitute a binding contract are agreed.
52.   As regards the delivery of the motor car by the dealer to the Rogue, it is not in dispute that, in making that delivery, the dealer was acting as the agent of the finance company. But he was acting without authority. The dealer's authority was to deliver the car to Mr Durlabh Patel, not to anyone else. That delivery did not create any bailment of the car by the finance company to the Rogue. The Rogue was a thief. Albeit by an elaborate but effective course of action, he stole the car from the possession of the dealer just as surely as if he was a thief stealing it from the forecourt. The dealer may have acted under an innocent mistake induced by the fraud the Rogue had practised on him; but it will, nevertheless, have been a tortious disposal of the motor car by the dealer. But the matter does not stop there. It would not be a delivery "under a hire-purchase agreement". This follows from the fact that there was no hire-purchase agreement (or any agreement or contract) between the finance company and the Rogue. It further follows from the fact that the only 'debtor' under the supposed agreement was Mr Durlabh Patel. It was never the Rogue and neither the finance company nor the Rogue ever intended that it should be.
53.   The final point was the fact that the purported customer's signature was not in truth that of Mr Durlabh Patel. The supposed hire-purchase agreement therefore from the outset lacked an essential ingredient and within the terms of the document was never an offer eligible for acceptance. A forged signature is neither the signature of the purported signatory nor of the forger. There may be an exception where the 'forger' had the authority of the actual party to sign on his behalf and in his name, in which case it probably would not be a forgery unless there was some dishonest intent to deceive. The same applies to using a 'mere pseudonym' or a trading name. But that is not this case.
54.   It follows that the appeal must be dismissed and the majority judgment of the Court of Appeal affirmed.
55.   But, before I leave this case, I should shortly summarise why the argument of the appellant's counsel was so mistaken. The first reason was that they approached the question as if it was simply a matter of sorting out the common law authorities relating to the sale of goods. They did not treat it as a matter of applying a statutory exception to the basic common law rule, nemo dat quod non habet. Further, they did not analyse the structure of the overall transaction and the consumer credit agreement within it. Accordingly, they misrepresented the role of the dealer, wrongly treating him as the contracting agent of the finance company which he was not. They never analysed the terms of the written document and had no regard at all to the offer and acceptance clause it contained which, if there was any contract between a 'debtor' and the finance company, governed their relationship and which expressly set out the only way in which such a contract could come into existence. They made submissions which contradicted the express written contract and were therefore contrary to principle and long established English mercantile law. They submitted that Cundy v Lindsay (1878) 3 App Cas 459 was wrongly decided and should be overruled, substituting for it a general rule which, in disregard of the document or documents which constitute the agreement (if any), makes everything depend upon a factual enquiry into extraneous facts not known to both of the parties thus depriving documentary contracts of their certainty. They sought to convert a direct documentary contract with the finance company into a face to face oral contract made through the dealer as the contracting agent of the finance company, notwithstanding that the dealer was never such an agent of the finance company. Finally they sought, having by-passed the written contract, to rely upon authorities on oral contracts for the sale of goods, made face to face and where the title to the goods had passed to the 'buyer', notwithstanding that this was a documentary consumer credit transaction not a sale and, on any view, no title had ever passed to R. In the result they have invited a review of those authorities by reference to the particular facts of each of them. They have sought to draw your Lordships into a discussion of the evidential tools, eg rebuttable presumptions of fact and the so-called face-to-face 'principle', used by judges in those cases to assist them in making factual decisions (see also the dictum of Gresson P in Fawcett v Star Car Sales [1960] NZLR at 413), notwithstanding that the present case concerns the construction of a written contract. They forget that the, presently relevant, fundamental principles of law to be applied - consensus ad idem, the correspondence of the contractual offer and the contractual acceptance, the legal significance of the use of a written contract - are clear and are not in dispute. Inevitably over the course of time there have been decisions on the facts of individual 'mistaken identity' cases which seem now to be inconsistent; the further learned, but ultimately unproductive, discussion of them will warm academic hearts. But what matters is the principles of law. They are clear and sound and need no revision. To cast doubt upon them can only be a disservice to English law. Similarly, to attempt to use this appeal to advocate, on the basis of continental legal systems which are open to cogent criticism, the abandonment of the soundly based nemo dat quod non habet rule (statutorily adopted) would be not only improper but even more damaging.

LORD MILLETT

My Lords,

56.   A makes an offer to B. B accepts it, believing that he is dealing with C. A knows of B's mistake, and may even have deliberately caused it. What is the result of the transaction? Is there a contract at all? There is obviously no contract with C, who is not a party to the transaction and knows nothing of it. But is there a contract with A? And if so is it void or merely voidable?
57.   Generations of law students have struggled with this problem. They may be forgiven for thinking that it is contrived by their tutors to test their mettle. After all, the situation seems artificial and is one which is seldom likely to arise in practice, at least in the absence of fraud. Unfortunately fraudulent impersonation is not at all uncommon today. The growth in the number of credit transactions, often entered into electronically between persons unknown to each other, has led to a surge in what has been called "theft of identity", that is the fraudulent assumption of another's identity by a customer in order to have the wrong account debited or to misdirect enquiries into his own creditworthiness. In the classic case A, fraudulently masquerading as C, buys goods on credit from B; B, having conducted appropriate checks to satisfy himself that C is worthy of credit and believing A to be C, lets A have possession of the goods; and A thereupon sells the goods to D, an unsuspecting purchaser, before disappearing without paying for them. Who is to bear the loss? That depends on whether D, who has paid for the goods, has obtained title to them, for if not then B can reclaim them. But D will have obtained title only if A was able to transfer title to him, and this turns on whether the transaction between A and B resulted in a voidable contract for the purchase of the goods by A (which B will have been unable to avoid in time) or no contract at all.
58.   The problem is sometimes mentioned in the textbooks in the section which deals with the formation of contract, where the question is whether a contract has been concluded; but it is more usually dealt with in the section which is concerned with the effect of mistake and in particular "mistaken identity", where the question is said to turn on whether A's identity is (i)"fundamental" (in which case the contract is completely void) or (ii) "material" but not "fundamental" (in which case the contract is merely voidable). In his dissenting judgment in Ingram v Little [1961] 1 QB 31 at p. 64 Devlin LJ distinguished between the two questions and observed that it was easy to fall into error if one did not begin with the first question, whether there is sufficient correlation between offer and acceptance to bring a contract into existence. But if there is, I question whether the contract should be held to be void for mistake rather than merely voidable.
59.   As I have said, the situation is seldom likely to arise in practice in the absence of fraud, and where the fraud is not directed to the identity of the offeror the contract is only voidable, not void, for the victim of deception ought to be able to elect to affirm the contract if he chooses to do so. It seems anomalous that a mistake which is induced by fraud should have a less vitiating effect than one which is not; and it is difficult to see why a mistake induced by fraud should make a contract altogether void if it is a mistake as to the offeror's identity (whatever that may mean) and not if it is a mistake as to some other attribute of his such as his creditworthiness which may be equally or more material.
60.   As Treitel observes (The Law of Contract 10th. Ed. 1999 at p. 277) it is often difficult to say precisely what mistake has been made and, even when this is clear, it is often difficult to say whether it should be classified as a mistake of identity or of attribute. As between A and B themselves, of course, it does not normally matter whether the contract is void or merely voidable; it obviously cannot be enforced by A against B's wishes in either case. The question usually assumes importance only where an innocent third party is involved, and then it is critical. Under the law as it stands at present, his title depends on whether the fraudster obtained the goods in his own name by means of a false or forged credit reference or in the name of another by means of a genuine reference relating to that other. This is indefensible. I take the view that the law should if at all possible favour a solution which protects innocent third parties by treating the contract as voidable rather than void, whether for fraud or for mistake.
61.   My Lords, I think that the time has come to follow the lead given by Lord Denning MR more than thirty years ago in Lewis v Averay [1972] 1 QB 198 CA. He roundly rejected the theory that if a party is mistaken as to the identity of the person with whom he is contracting there is no contract, or that if there is a contract it is null and void so that no property can pass under it: see pp. 206-7. He thought that the doctrine, derived from the writings of Pothier, should not be admitted as part of English law but should be "dead and buried". As he observed, it gives rise to fine distinctions which do no good to the law, and it is unjust that an innocent third party, who knows nothing of what passed between the rogue and his vendor, should have his title depend on such refinements.
62.   But it is still necessary to answer the logically anterior and more difficult question: does the transaction result in the formation of a contract between A and B? There is clearly a transaction between them, for B has let A have possession of the goods and take them away, usually with the intention that he should be free to deal with them as owner. But is the transaction contractual?
63.   It is trite law, as Devlin LJ explained in the passage immediately following that cited above, that before a contract can come into existence there must be offer and acceptance, and these must correspond. The offer must be addressed to the offeree, either as an individual or as a member of a class or of the public. The acceptance must come from one who is so addressed and must itself be addressed to the offeror. It is not possible in law for a person to accept an offer made to someone else; or to intercept an acceptance of someone else's offer and treat it as an acceptance of his own.
64.   This is usually straightforward enough, at least in the absence of fraud. As my noble and learned friend Lord Phillips of Worth Matravers observes, there is normally no difference between the identity of the person to whom the offer or acceptance is directed and the person for whom it is intended. But what if, by reason of fraud, the two are not the same? What if A, posing as C, makes an offer to B which B purports to accept? B directs his acceptance to A, but intends it for C. It does not help to substitute the question: "to whom was B's acceptance made?" This merely raises the question: "what do you mean by made?"
65.   The outcome is said to depend on B's intention objectively ascertained, and this is usually treated as if it were a straightforward question of fact to be determined on the evidence. In Ingram v Little (supra) Pearce LJ said at p. 61 that
"Each case must be decided on its own facts".

This is singularly unhelpful, since it involves asking: did B intend to contract with A believing him to be C? Or with C believing him to be A? The question is meaningless. As Devlin LJ pointed out in Ingram v Little (supra) at p. 65:

"If Miss Ingram had been asked whether she intended to contract with the man in the room or with P.G.M. Hutchinson, the question could have no meaning for her, since she believed them both to be one and the same. The reasonable man of the law - if he stood in Miss Ingram's shoes - could not give any better answer…………All that Miss Ingram or any other witness in her position can say is that she did in fact accept the offer made to her; and that, if she had not been tricked or deceived, she would not have accepted it" (emphasis added).

66.   In this situation the Courts have distinguished between transactions entered into in writing and transactions entered into orally between parties who are in the presence of each other. In the former case B's intention is ascertained by construing the description of the counterparty in the contract. This naturally identifies C, the person whose identity A has fraudulently assumed, and (provided that C actually exists) invariably leads to the conclusion that there is no counterparty and therefore no contract. In the latter case, the Courts have adopted a different approach. They have introduced a rebuttable presumption that, where parties deal with each other face to face, each of them intends to contract with the physical person to whom he addresses the words of contract. Unless the presumption is rebutted, this must lead to the conclusion that there is a contract with the impostor.
67.   I do not find this satisfactory. What evidence is sufficient to rebut the presumption? As Devlin LJ stressed, it cannot be rebutted by piling up evidence that B would never have accepted the offer if he had not thought that it had been made by C. Such evidence merely shows that the deception was material; it does not establish the identity of B's counterparty. There might perhaps be something to be said for making the presumption conclusive. This appears to have been the law at one time in the United States. In Corbin on Contracts (1960 ed.) At p. 619 it is stated that
"The Courts hold that if A appeared in person before B, impersonating C, an innocent purchaser from A gets property in the goods as against B."

But there is surely nothing to be said for resorting to a rebuttable presumption in order to resolve a question of fact which is incapable of being determined by evidence. If there is no test by which the question can be answered on the evidence, there is none by which the Court can determine whether the presumption has been rebutted.

68.   But the real objection to the present state of the law, in my view, is that the distinction between the face to face contract and other contracts is unrealistic. I leave aside the criticism of the face to face rule made by Corbin on Contracts (loc. cit.) at p. 620 that it is
"somewhat fanciful to hold that B intends to sell the goods to the physical body of A in front of him, although that body is indeed part of what we call 'identity'".

My difficulty is that I cannot see that there is any difference in principle between the two situations when it comes to identifying B's counterparty. In both cases B's acceptance is directed to the impostor but intended for the person whose identity he has assumed. Carleton Allen described the distinction as

He observed that text-book writers were divided on the subject, and that in the then most recently published treatise on Contracts the high but unhappily posthumous authority of Sir John Salmond leaned strongly against the doctrine.

69.   In Ingram v Little (supra) Devlin LJ said (at p. 66) that
"the presumption that a person is intending to contract with the person to whom he is actually addressing the words of contract seems to me to be a simple and sensible one".

I respectfully agree. But why should it be adopted only in the case of a contract entered into between persons who deal in the physical presence of each other? If the offeree's words of acceptance are taken to be addressed to the physical person standing in his presence who made the offer, what is the position where they deal with each other by telephone? Is the disembodied voice to be equated with physical presence? Is it sufficient that the parties are in the hearing of each other? Does it make a difference if the dealing is by televisual link, so that the parties are in the hearing and sight but not the presence of each other? New means of communication make the distinction untenable.

70.   But in truth the distinction was always unsound. If the offeree's words of acceptance are taken to be addressed to the physical person standing in his presence who made the offer, why is the contract entered into by correspondence different? Why is the offeree's letter of acceptance not taken to be addressed to the physical person who made the written offer which he is accepting? The offeree addresses the offeror by his assumed name in both cases. Why should this be treated as decisive in the one case and disregarded in the other? Indeed, the correlation between offer and acceptance is likely to be greater in the case of a contract entered into by correspondence, since the offeree's letter of acceptance will either be sent to the impostor at his own address or be delivered to him personally and it will almost certainly contain internal references to his offer.
71.   In my opinion there are only two principled solutions to the problem. The law must give preference, either to the person for whom the offer or acceptance is intended, or to the person to whom it is directed, and must do so in all cases as a matter of law. The difficulty is in deciding which solution should be adopted, for there is much to commend each of them.
72.   The first solution, which gives preference to the person for whom the offer or acceptance is intended, possibly accords more closely to the existing authorities, which treat the face to face transaction as an exception to the general rule, and with the decision in Cundy v Lindsay (1878) 3 App. Cas. 459, the only case on the subject which has come before the House. It also accords more closely with the parties' subjective intentions, for B intends to deal with C, especially if he has checked his creditworthiness, and not with A, of whom he has never heard; while A has no intention of being bound by contract at all. From his point of view the supposed contract is merely a pretence to enable him to get hold of goods without paying for them. He does not need a contract, for he is content with possession without title. In the days when the law distinguished between trickery and deception, he would have obtained possession by a trick rather than title by false pretences.
73.   The strongest argument in favour of this solution, I suppose, is that it could be said to be based on the parties' own assessment of what they mean by the counterparty's "identity". Ultimately this must refer to a physical person, but a physical person can only be identified by describing his or her attributes. For this purpose it is customary to refer to a person's name and address, which are usually though not always unique to one person. But names are merely identifying labels and can be assumed without any intention to deceive. A person is free to adopt whatever name suits his fancy, and may validly contract under an alias. Even if he has assumed a false name for the sole purpose of deceiving the counterparty, there is a contract so long, at least, as there is no real person of that name: see King's Norton Metal Co. Ltd. v Edridge, Merrett & Co. Ltd. (1897) 14 TLR 98.
74.   But as Treitel observes (loc. cit. p.277) a person may be identified by reference to any one of his attributes. He may be identified as "the person in the room", "the person who spoke on the telephone", "the person who appended the illegible signature", "the writer of the letter under reply", or "the person who made the offer"; but he may also be identified, and sometimes more relevantly, as "the person whose creditworthiness has been checked and found to be satisfactory". Any of these may be the means of identifying a unique person. An automated telling machine is programmed to identify a customer by a combination of a pin number and a number encrypted on the card which is inserted into the machine. In an increasingly electronic age we are accustomed to identifying ourselves by pin numbers and passwords; the need to eliminate fraud may in time cause us to identify ourselves by retinal imagery, which at least has the advantage of being a feature of the physical body. But even in the case of a credit card transaction there is an ambiguity. Is the customer to be identified as the person who produces the card? Or as the person whose card is produced? The whole point of a credit card fraud is that the goods should be supplied to the person who produces the card while the cost is debited to the account of the person whose card is produced.
75.   Given the equivocal nature of a person's "identity", there is something to be said for selecting those aspects of the offeror's identity which are material in causing the other party to accept the offer. In the present case, for example, Mr. Patel's name address and date of birth had no intrinsic relevance in themselves. The Respondent would have entered into the transaction with anyone, whatever his name and address or date of birth, so long as it was satisfied that he was worthy of credit. Mr. Patel's personal details were merely the information which enabled it to conduct inquiries into the credit of the person it assumed to be its customer. It makes commercial sense to treat a contract made in these circumstances as purporting to be made between the finance company and the subject of its inquiries rather than with the person who merely produced the information necessary to enable it to make them.
76.   Nevertheless I have come to the conclusion that it is the second solution which ought to be adopted. All the considerations which I have mentioned, and which seem to favour the first solution, when properly analysed go to the mechanics of the deception and its materiality rather than to the identity of the offeror. They ought to come into play when consideration is given to the second question, whether the contract is voidable, rather than to the first, whether there is sufficient correlation between offer and acceptance ("consensus ad idem") to bring a contract into existence. Until the fraud is exposed and it is discovered that A is not C, the existence of a contract is not in doubt. The fraud is relevant to the question whether the contract is enforceable against B rather than its existence.
77.   I regard King's Norton Metal Co. Ltd. v Edridge, Merrett & Co. Ltd. (supra) as worthy of more attention than it has usually been given. In that case, where the contract was entered into by correspondence, the rogue assumed a fictitious name in order to give a spurious impression of respectability. The Court held that there was a valid (though voidable) contract. The decisive feature was thought to be that there was no one of the assumed name. A.L. Smith LJ is reported at p. 99 as follows:
"The question was, With whom, upon this evidence, which was all one way, did the plaintiffs contract to sell the goods? Clearly with the writer of the letters. If it could have been shown that there was a separate entity called Hallam and Co [C] and another entity called Wallis [A] then the case might have come within the decision in Cundy v Lindsay. In his opinion there was a contract by the plaintiffs with the person who wrote the letters, by which the property passed to him. There was only one entity, trading it might be under an alias, and there was a contract by which the property passed to him" (emphasis added).

78.   It is unclear whether it would have made a difference if, unknown to the plaintiffs, there had been an entity called Hallam and Co; or if to the knowledge of both parties there were many such entities, as in the cases where a man used to book a hotel room for himself and a girlfriend under a common but fictitious name in order to give the impression (when such things mattered) that they were married. The case is different where the impostor assumes the name and address of a real person of substance when entering into a credit transaction. In such a case his purpose is to direct inquiries to that person's credit rather than his own. A better explanation of King's Norton Metal Co. Ltd. v Edridge, Merrett & Co. Ltd. is that the rogue merely assumed a false name and did not go further and assume another person's identity. But the distinction is a fine one which it may not always be possible to draw, and in any case depends on the nature and purpose of the deception and is accordingly relevant to its effect on the mind of the offeree and not to the correlation between offer and acceptance.
79.   The typical fraudulent credit card transaction is also illuminating. There is clearly a transaction with the impostor who produces the card and who receives cash or goods (say a cinema ticket) in exchange. If the transaction is contractual in nature (as in the case of the cinema ticket) why should the transaction be thought to be with one person and the contract with another? There is only one transaction whether the party who parts with the goods debits the right account or is deceived into debiting the wrong one. Where cash is extracted from an ATM the fraud is possible because the machine is programmed to supply the cash to the person who produces the card and to debit the account of the person whose card is produced. In the same way the staff who handled the transaction in the present case on behalf of the Respondent were instructed (programmed) to obtain the customer's personal details, run credit checks on the person whose details were produced, and authorise the dealer to deliver possession of the vehicle to the person who produced them.
80.   It is noticeable that, when recounting the facts objectively, judges often find themselves obliged to describe C as having accepted A's offer. I have already cited such passages from Ingram v Little (supra) and King's Norton Metal Co. Ltd. v Edridge, Merrett & Co. Ltd. (supra). In the former case, where the parties dealt with each other face to face, Devlin LJ has C say
"that she did in fact accept the offer made to her; and that, if she had not been tricked or deceived, she would not have accepted it".

In the latter, where the contract was entered into by correspondence, A.L. Smith LJ said that the offeree "clearly" contracted with the writer of the letters which contained the offer, that is with A.

81.   In my opinion, once one accepts that there are two questions involved: (i) did a contract come into existence at all? and (ii) if so was the contract vitiated by fraud or mistake? there is only one principled conclusion. Whatever the medium of communication, a contract comes into existence if, on an objective appraisal of the facts, there is sufficient correlation between offer and acceptance to make it possible to say that the impostor's offer has been accepted by the person to whom it was addressed. While a person cannot intercept and accept an offer made to some one else, he should normally be treated as intending to contract with the person with whom he is dealing. Provided that the offer is made to him, then whether his acceptance of the offer is obtained by deception or mistake, and whether his mistake is as to the identity of the offeror or some material attribute of his, the transaction should result in a contract, albeit one which is voidable.
82.   This rule is easy to apply and accords with principle by distinguishing between the formation of a contract as a question of fact to be determined objectively and the consequences of mistake or fraud which depend on its effect on the mind of the person affected. It avoids undesirable refinements and gives a measure of protection to innocent third parties. Of course, someone has to bear the loss where there is fraud, but it is surely fairer that the party who was actually swindled and who had an opportunity to uncover the fraud should bear the loss rather than a party who entered the picture only after the swindle had been carried out and who had none. In the present case, the Respondent could easily have exposed the fraud by writing to Mr. Patel, whose address it had been given, and asking him to confirm his intention to proceed with the proposed transaction. If it had been one for which statute required a cooling off period, it no doubt it would have done.
83.   In the Court of Appeal both Sedley LJ (who dissented) and Brooke LJ expressed disquiet at "the sorry condition" of the law. In the former's view, with which I agree, the decision in Cundy v Lindsay stands in the way of a coherent development of this branch of the law. We have the opportunity to restate the law, and cannot shirk the duty of putting it on a basis which is both just and principled, even if it means deciding that we should no longer follow a previous decision of the House.
84.   We cannot leave the law as it is. It is neither fair nor principled, and not all the authorities from which it is derived can be reconciled; some, at least, must be overruled if it is to be extricated from the present quagmire. If the law is to be rationalised and placed on a proper footing, the formulation which I have proposed has the merit of according with the recommendations made in the 12th Report of the Law Reform Committee "Transfer of Title to Chattels (1966 Cmnd. 2958) and in Anson's Law of Contract (28th. Ed.) at p. 332. It would also bring English law into line with the law both in the United States and in Germany. The law of the United States has not stood still. Section 2-403 of the Uniform Commercial Code (14th. Ed. 1995) provides by sub-section (1)
" … A person with voidable title has power to transfer a good title to a good faith purchaser for value. When goods have been delivered under a transaction of purchase the purchaser has such power even though

(a) the transferor was deceived as to the identity of the purchaser…"

    Any restriction of the rule to face to face transactions has disappeared. In the Official Comment on the section, reference is made to "the long-standing policy of civil protection of buyers from persons guilty of such trick or fraud." This seems to me to be a policy which accords with good sense and justice and one which we ought to adopt for ourselves. I agree with the view of Professor Atiyah (An Introduction to the Law of Contract (1995) at p.86) that

"…a person who hands goods over to a stranger in return for a cheque is obviously taking a major risk, and it does not seem fair that he should be able to shift the burden of this risk on to the innocent third party."

85.   Under German law, too, the innocent third party obtains a good title, though this is a consequence of the law of property rather than the law of contract. Article 932 of the German Civil Code provides that a purchaser acting in good faith acquires title where he obtains possession from a seller who has no title. The purchaser is not in good faith if he knew, or by reason of gross negligence did not know, that the goods did not belong to the seller. Thus, under German law, whether or not A obtained title from B, he is able to pass a good title to D.
86.   German law reaches this conclusion by admitting a far wider exception to the nemo dat quod non habet rule than we accept, and this enables it to dispense with the need to decide the contractual effect of mistaken identity (and the meaning of "identity" in this context) or to conduct a fruitless enquiry into the identity of the intended counterparty. Our inability to admit such an exception compels us to adopt a different analysis, but it would be unfortunate if our conclusion proved to be different. Quite apart from anything else, it would make the contemplated harmonisation of the general principles of European contract law very difficult to achieve.
87.   Where does this leave the authorities? Most of those which are concerned with face to face transactions can stand with the exception of the decision of the majority of the Court of Appeal in Ingram v Little (supra), which is inconsistent with Lewis v Averay (supra) and should be overruled. I would confirm the decision in Phillips v Brooks [1919] 2 KB 243, where Horridge J held that the shopkeeper had
"contracted to sell and deliver [the ring] to the person who came into his shop…………who obtained the sale and delivery by means of the false pretence that he was Sir George Bullough………..[The shopkeeper's] intention was to sell to the person present, and identified by sight and hearing."

    In my opinion the Judge's reasoning cannot be faulted. He distinguished between the two questions, and treated the identity of the purchaser as a question of fact to be determined objectively and without regard to the evidence that the shopkeeper had no intention of selling the goods to anyone other than Sir George Bullough.

88.   In Gordon v Street [1899] 2 QB 641 and Said v Butt [1920] 3 KB 497 the dispute was between A and B; no third party was involved. In each case it was sufficient to hold that any contract which resulted was voidable. Said v Butt is a celebrated case which merits further attention. The plaintiff wished to attend the first night of a play. He had had serious differences of opinion with the management of the theatre, and he knew that an application for a ticket in his own name would be refused. He therefore arranged for a friend to go to the theatre and buy a ticket for him without disclosing the fact. When he turned up for the performance he was refused admission. His claim for damages was dismissed. The evidence showed that a first night is a special event with characteristics of its own, and that first night tickets are only given or sold to persons whom the management selects and wishes to favour. McCardie J found that the purchaser's identity was a material element in the formation of the contract and that the failure to disclose the fact that the ticket was bought on his behalf prevented the plaintiff from asserting that he was the undisclosed principal. In my opinion that conclusion was inescapable. The case has usually been taken to be an example of a contract which is void for mistake. I do not think that it is. There can be little doubt that the friend who bought the ticket could have made use of it to gain admission himself. In my opinion the case is an example of the rule that an undisclosed principal cannot intervene where the nature of the contract shows that the contract was intended to be with the agent personally: see Collins v Associated Greyhound Racecourses Ltd. [1930] 1 Ch. 1 CA. The evidence showed that tickets for a first night are not transferable, from which it follows that they are incapable of being bought for an undisclosed principal; so that even on its own terms the contract could not be enforced by the plaintiff. Admittedly McCardie J.'s judgment did not proceed on this basis; but he did not hold there to be no contract at all even with the person who bought the ticket.
89.   Hardman v Booth (1863) 1 H & C 803 is an important case because it formed the foundation of the reasoning of the House in Cundy v Lindsay (supra). It has been taken to be an example of the same category of case and inconsistent with Phillips v Brooks (supra): see (1941) 57 LQR 228 at 241. But I do not think it is either. B called at the premises of C & Co., where he met A, whom he was fraudulently led to believe to be a partner in the firm of C & Co. A ordered goods from B and, after taking delivery, pledged them to D before becoming bankrupt. B sued D in trover. The action succeeded. The Court of Exchequer held that there was no sale to A because B did not deal with him personally. In my opinion the situation was quite different from that in the other cases under discussion. B dealt with A face to face, but he did not deal with him as principal. Even objectively he did not contract with him at all. He was not mistaken as to A's identity, but as to his authority. But there was certainly a contract of some sort between A and B, for A would be liable to B for breach of warranty of authority. Whether the case was rightly decided depends on whether there is an analogy with the case where a person contracts as agent for a non-existent principal. There the agent is held to have contracted on his own account and to be personally liable on the contract. I would leave the point open, but it makes little sense to make D's title depend on whether A falsely held himself out to be acting as agent for a principal who did not exist or for a principal who did exist but had not authorised him to contract on his behalf.
90.   The principal obstacle which has prevented the Courts from rationalising this branch of the law has been Cundy v Lindsay (supra), a decision of this House. It was concerned with a contract entered into by correspondence. A rogue named Blenkarn, posing as Blenkiron & Co, ordered goods by letter from the Respondents. They replied to the letter, accepted the order and despatched the goods to the name and address they had been given. Blenkarn then sold them to the defendants. The House held that the defendants obtained no title. The case is treated in the textbooks as an example of a contract which is void for unilateral mistake, but this was not the basis of the decision. The word "mistake" appears only once in the speeches, and then only in reference to the address of the premises to which the Respondents despatched the goods. Lord Cairns LC (at p. 456) observed that it was not a case in which a contract could be impeached for fraud, but where a contract never came into existence. There was no contract between the Respondents and the cheat Blenkarn because
"of him they knew nothing, and of him they never thought. With him they never intended to deal. Their minds never, even for an instant of time, rested upon him, and as between him and them there was no consensus of minds which could lead to any agreement or any contract whatever. As between him and them there was merely the one side to a contract, where, in order to produce a contract, two sides would be required"

Per Lord Cairns LC at p. 465-6. Lord Hatherley spoke to the same effect at p. 467:

...if there could be said to have been any sale at all, it failed for want of a purchaser."

Per Lord Hatherley at p. 467. It was not a sale to Blenkarn

"with whom the Respondents had not, and with whom they did not wish to have, any dealings whatever."

91.   As an authority on the formation of contract the decision is, with respect, unconvincing. That the Respondents did not wish or intend to have any dealings with Blenkarn is beyond dispute; but it is far from obvious that they did not actually have such a dealing even though it was only as a result of the deception practised on them. Lord Hatherley and Lord Penzance felt unable to distinguish the case from Hardman v Booth, although in my view the two cases are not comparable. Lord Cairns dwelt on the plaintiffs' subjective state of mind, which was of course affected by the fraud, and gave no attention to the question whether, approaching the case objectively, the plaintiffs had accepted Blenkarn's offer. Lord Penzance (at pp. 471-2) initiated the unfortunate distinction between cases of persons dealing in the presence of each other and other cases, without explaining why this was material, let alone decisive.
92.   The plaintiffs, indeed, "knew nothing" of the individual named "Blenkarn" and they addressed their letter of acceptance to "Blenkiron & Co". but that was because they had been deceived into believing that the offer came from Blenkiron & Co. Throughout the speeches in this House it was assumed that the plaintiffs' letter of acceptance was directed and sent, as the goods were later directed and sent, to the intended recipient (Blenkiron & Co.) but at the wrong address. If the facts of that case are viewed objectively, however, with a view to ascertaining whether there was the necessary correlation between offer and acceptance and without reference to the deception, the matter wears a very different aspect. The order was placed by Blenkarn (posing as Blenkiron & Co.) writing from his own address (which was not the address of Blenkiron & Co.) and was duly accepted by the plaintiffs in the belief that the order came from Blenkiron & Co. They replied to Blenkarn (in his assumed name as Blenkiron & Co.) at the address he had given (being his own address and not that of Blenkiron & Co.) by a letter which referred to and accepted his order; and in due course they fulfilled it.
93.   In my view the proper conclusion on these facts is that the plaintiffs contracted with Blenkarn in the mistaken belief, induced by his fraud, that they were dealing with Blenkiron & Co., and that the resulting contract was voidable for fraud. If the plaintiffs' subjective state of mind, induced by the fraud, is put on one side, there is no justification for the question-begging assumption that the plaintiffs' letter of acceptance was directed to Blenkiron & Co. and that it was the name which was right and the address which was wrong. Nor is there any justification for the suggestion that the signature was a forgery. Blenkarn, who signed the letter, did not claim that it was someone else's signature; he acknowledged and asserted that it was his own. Even those who consider that the case was rightly decided concede that the rogue could have been sued for the price of the goods (see Treitel (loc cit p. 284). But that presupposes that there was sufficient correlation between offer and acceptance to bring a contract into existence, albeit one which was void (or voidable) at the instance of the party deceived. Yet this was the very proposition which the House rejected.
94.   The case can usefully be contrasted with Boulton v Jones (1857) 2 H.& N. 564, which falls on the other side of the line and was in my opinion rightly decided. The defendant sent to the shop of one Brocklehurst a written order for goods. The order was addressed to Brocklehurst by name. Unknown to the defendant, Brocklehurst had earlier that day sold and transferred his business to Boulton. Boulton fulfilled the order and delivered the goods to the defendant without notifying him that he had taken over the business. The defendant accepted the goods and consumed them in the belief that they had been supplied by Brocklehurst. When he received Boulton's invoice he refused to pay it, claiming that he had intended to deal with Brocklehurst personally, since he had dealt with him previously and had a set-off on which he had intended to rely. The Court of Exchequer held that the defendant was not liable for the price.
95.   There was, of course, a preliminary question of construction, whether the defendant's order could be interpreted as addressed, not to Brocklehurst personally, but to the proprietor of the shop for the time being. The Court held that it could not. This point need not detain us further. Three of the four Judges decided the case on the straightforward ground that the offer was addressed to Brocklehurst and could not be accepted by Boulton. (I put on one side the judgment of Bramwell B. which, though the most frequently cited, was condemned by Professor Goodhart (op. cit. at p 233) as the least satisfactory).
96.   On this analysis, Boulton made a counter-offer which the defendant accepted in the mistaken belief that it was made by Brocklehurst. The mistake was material because of the existence of a set-off against Brocklehurst but not against Boulton; so that the contract which resulted from the counter-offer was voidable. The question then arose whether the defendant, who had received and consumed the goods, was liable on a quantum valebat. It was held that he was not, since he consumed them in the belief that he could discharge his liability to pay by set-off. We would classify the case today as an example of a claim in unjust enrichment being defeated by a change of position defence.
97.   The contractual claim arising from the defendant's order failed because, objectively speaking, there was no correlation between offer and acceptance. This is the same ground as that which was later to form the basis of the decision in Cundy v Lindsay, but the facts of the two cases are very different. In Boulton v Jones the goods were ordered from Brocklehurst but supplied and invoiced by Boulton; the acceptance did not correspond with the offer. In Cundy v Lindsay the goods were ordered by Blenkarn posing as Blenkiron & Co. and supplied and invoiced to him in that name. Outwardly the acceptance did correspond with the offer. Objectively speaking there was consensus ad idem, though this was vitiated by the fraud which produced it.
98.   The last case to which I need to refer is Hector v Lyons (1989) 58 P & CR 156. This was a very curious case. It concerned a contract for the sale and purchase of land. Mr. Hector Senior negotiated with Mrs. Lyons for the purchase of her property. They negotiated personally, at first over the telephone and then face to face. Throughout the negotiations, for a reason which was never explained, Mr. Hector acted in the name of his son, Mr. Hector Junior, who was under age. It is not clear whether the parties entered into an agreement subject to contract, but if they did it would have been signed by Mr. Hector Senior in his son's name. He instructed solicitors to act for him, again in his son's name, and in due course contracts were signed and exchanged, the two parts being in identical terms and giving Mr. Hector Junior's name as the name of the purchaser. Mr. Hector Senior signed his part of the contract in his son's name. Mrs. Lyons refused to complete and Mr. Hector Senior brought an action for specific performance. He did so in his own name. Sir Nicolas Browne-Wilkinson V.-C. dismissed the appeal.
99.   It has been suggested that the action rightly failed because there was no identity between the name of the plaintiff in the writ and that in the contract which he was claiming to enforce. But this was not the ground of decision and is without substance. The objection could readily be met if necessary by amending the writ to add after the name of the plaintiff the words "also known as…..".
100.   It might have been an understandable ground for refusing equitable relief that it was not at all clear to the Court what was going on, particularly as Mr. Hector Senior's testimony was thoroughly unsatisfactory. But that was not the basis of the decision either. The Vice-Chancellor held that there was no contract with Mr Hector Senior. The identity of the parties to a written contract was established by the names stated in the contract. The only question for the Court was to identify who they were, and this was a question of fact.
101.   So far I respectfully agree with the Vice-Chancellor. Where I part company with him is at the next step, when he affirmed the deputy judge's finding of fact that the purchaser was Mr. Hector Junior. That the name of the purchaser stated in the contract was the name of Mr. Hector Junior and not that of Mr. Hector Senior was established as a fact. But it does not at all follow that the party who contracted as purchaser in that name was Mr. Hector Junior. The evidence plainly showed that it was not. He knew nothing of the transaction, and the vendor did not deal or intend to deal with him. To adapt Lord Cairns' words (but in the converse case, for we are now talking of C, not of A) "of him she knew nothing, and of him she never thought. With him she never intended to deal."
102.   In my opinion the evidence demonstrated beyond doubt that the purchaser was in fact Mr. Hector Senior, who for some reason of his own had adopted his son's name for the purpose of entering into the contract. He was identified as the person who in fact negotiated the purchase with the vendor and agreed to pay the purchase price, who signed any agreement subject to contract which there may have been, who instructed solicitors to act on his behalf as purchaser, and who signed the purchaser's part of the contract. The vendor was neither deceived nor mistaken. She not only intended to deal but actually dealt with Mr. Hector Senior. The only fact in respect of which she was mistaken was that the name in which he contracted was not his real name but that of his son, and that was not material.
103.   My Lords, the identification of the parties to a written instrument is, as the Vice-Chancellor held, only partly a question of construction. That is the first step in the process, and it will often be enough. It would have been enough in Boulton v Jones if the Court had accepted the submission that the order was addressed to the proprietor of the shop for the time being and not to Mr. Brocklehurst personally. But once it is established that the person whose name and other personal details are stated in the contract and the person who stated them and signed the contract are not the same, the question immediately arises: which of them should be treated as the counterparty? Do the name and other details included in the contract refer to the person to whom they belong or to the impostor who included them in order to identify himself? This is not simply a question of construction. It is partly a question of fact and partly a question of law. To say, as my noble and learned friend Lord Hobhouse of Woodborough does, that it is a question of construction which admits of only one answer, with respect simply begs the question.
104.   How should the question be answered in the present case? The case is not unlike Hector v Lyons, with the important difference that in the present case the deception was material and induced the making of the contract. If there was a contract with the rogue, it was voidable for fraud.
105.   But was there such a contact at all? The contact came into being when the Respondent executed its part of the agreement. The two parts corresponded in every material particular. They made it clear that the hirer was the person named on the front of the document and who had signed the document. This appeared to be a Mr. Durlabh Patel, with an address in Leicester, whose personal details were given. But in fact it was not Mr. Durlabh Patel at all. He knew nothing of the transaction and his driving licence had been stolen. The person who identified himself as Mr. Durlabh Patel, provided Mr. Durlabh Patel's personal details, and signed the document in Mr. Durlabh Patel's name was not Mr. Durlabh Patel but an impostor.
106.   The object of the deception was to misdirect the Respondent's credit enquiries. In this it succeeded. Having satisfied itself that Mr. Durlabh Patel, whom it believed to be its customer, was worthy of credit, it accepted the offer which the impostor had made, signed its part of the agreement, and authorised the dealer to deliver possession of the car to his customer as hirer under the agreement.
107.   But who was his customer? It was not Mr. Durlabh Patel. In my opinion it was plainly the impostor. Any other conclusion would mean that the dealer parted with the vehicle to the impostor without authority and would, presumably, be liable in conversion if the vehicle proved to be irrecoverable. This is far removed from reality. The Respondent and the dealer both believed that the customer who was hiring the car and Mr. Durlabh Patel were one and the same; but the Respondent did not make that a condition of the dealer's authority to part with the car. From first to last it believed that the impostor who attended the dealer's showroom, gave his name as Mr. Durlabh Patel, and signed the agreement in that name, was indeed Mr. Durlabh Patel; in that belief it entered into a hiring agreement and authorised the dealer to deliver possession of the car to the customer who had so identified himself. In my opinion, the Respondent not only took a credit risk, but also took the risk that the customer who was hiring the car was not Mr. Durlabh Patel and that its credit enquiries had been fraudulently misdirected. I would hold that there was a hiring, and the impostor was the hirer.
108.   This conclusion involves a departure from Cundy v Lindsay, a decision of this House which has stood for more than 120 years. But its reasoning is unsound. It is vitiated by its subjective approach to the formation of contract and the necessary correlation between offer and acceptance; which may be why textbook writers treat it as an example of unilateral mistake even though this was not the basis on which it was decided. For the same reason it cannot be regarded as authoritative on the question whether a contract otherwise properly entered into is void for mistake rather than voidable. It has had an unfortunate influence on the development of the law, leading to an unprincipled distinction between face to face transactions and others and the indefensible conclusion that an innocent purchaser's position depends on the nature of the mistake of a third party or the precise mechanics of the fraud which had been perpetrated on him. In my view it should now be discarded and the law put on a simpler and more principled and defensible basis.
109.   In my opinion only the decision in Cundy v Lindsay stands in the way of a rational and coherent restatement of the law. My noble and learned friend Lord Phillips of Worth Matravers has expressed the view that the conclusion to which Lord Nicholls and I have come conflicts not only with that case but with the approach in almost all the numerous cases which he has cited. If they had preceded Cundy v Lindsay, that would be a strong reason for not adopting it. But they were merely following a decision of this House by which they were bound. Far from applying it generally, they attempted to distinguish it by carving out an unprincipled exception from it which Lord Nicholls has shown cannot be supported. While departing from Cundy v Lindsay would make obsolete the reasoning in those cases, dictated as it was by that decision, it would undermine the actual decision in very few cases. There is no long line of authority to be overruled. Indeed, only two cases need to be overruled; and neither of them can be supported even on the view that Cundy v Lindsay was rightly decided.
110.   In my opinion Cundy v Lindsay should no longer be followed and Ingram v Little and Hector v Lyons should be overruled. I would allow the appeal.

LORD PHILLIPS OF WORTH MATRAVERS

My Lords,

111.   This appeal is a variation on a theme that has bemused courts and commentators alike for over 150 years. Two individuals conduct negotiations in which all the terms necessary to constitute a binding contract are agreed. One of those individuals has, however, been masquerading as a third party. Does a binding contract result? Grappling with this problem in Fawcett v Star Car Sales Ltd [1960] NZLR 406 at 413, Gresson P remarked that 'the difficulty in deciding whether a mistake of identity prevents the formation of a concluded contract is a proper assessment of the facts rather than the ascertainment of the law'. The issues that arise in this case require the facts to be set out with some particularity.

    The facts

112.   A rogue acquired, by dishonest means, the driving licence of a Mr Durlabh Patel, who lived at 45 Mayflower Road in Leicester. Armed with this he went to the showrooms of motor dealers in Leicester called Chris Varieva Limited. There he introduced himself to the sales manager, Mr Bailey, as Mr Durlabh Patel of 45 Mayflower Road. He said that he wished to purchase a Mitsubishi Shogun motor car registration number N319 NFP, which was on display in the showroom. Mr Bailey and the rogue agreed a price of £22,250, subject to obtaining hire-purchase finance.
113.   Mr Bailey produced a copy of the claimant ('Shogun')'s standard form of hire-purchase agreement. That form was designed to cater both for hire-purchase agreements regulated by the Consumer Credit Act 1974 and non-regulated hire-purchase agreements. The proposed agreement in relation to the Shogun car fell into the latter category. The terms on the back of the form were introduced by Clause 1, which provided:
"In these terms the customer(s) named overleaf are called 'you' and the creditor 'we' or 'us'. Our address is 116 Cockfosters Road, Barnet EN4 0DY.

You are offering to make a legal agreement by signing this document. We can reject your offer, or accept it by signing it ourselves.

We may choose not to sign if there has been a change in your circumstances since you gave us or the supplier details, or for any other reason in our discretion. There will then be no agreement. We will tell the supplier if this is the case. You must then return to the supplier any goods he let you have in the expectation that we would accept your offer. You will have to compensate the supplier if you do not return the goods immediately or if you have not taken proper care of them. You should recover from the supplier any deposit or goods given in part-exchange (or their value).

If we sign this document it will become legally binding at once (even before we send you a signed copy), and you will then be regarded as having been entitled to the provision and use of the goods, and bound by the terms of this agreement, as from the date you signed. This is what you are offering by signing.

Once we have both signed, this will be a hire-purchase agreement. In it we agree to lease and (if you comply with the terms of this agreement) permit you to buy, and you agree to hire, the goods on the terms on this page and overleaf."

    The form had a box for insertion of 'Customer Details'. Into this was entered the name and address of Mr Durlabh Patel together with the number of his driving licence. The rogue signed the form 'D.J. Patel' with a signature which matched that on the stolen driving licence, which he produced.

114.   Mr Bailey telephoned Shogun's sales support centre and relayed to one of the clerks there the details which the rogue had provided, and then faxed to them a copy of Mr Patel's driving licence and the draft agreement. Shogun made a computer search to check Mr Patel's name and address against the electoral register, then to check whether any county court judgments or bankruptcy orders were registered against him, then to check his credit rating with one or more credit reference agencies. In the space of about five minutes they learned how long Mr Patel had lived at his address, where he worked and how long he had worked there, his bank account number and how long he had held the account, his date of birth and his driving licence number. They also learned that he had no adverse credit references.
115.   Shogun compared the signatures on the driving licence and the draft agreement and concluded that they matched. They then phoned the dealer and told him that the proposal was accepted. The form was signed on behalf of Shogun, but it is not clear precisely when this was done. The rogue paid the dealer a deposit of 10% of the purchase price, partly in cash and partly by cheque. It is not recorded whether this purported to be Mr Patel's cheque, but it seems likely that this was the case. In any event the cheque was in due course dishonoured. The dealer handed over the vehicle to the rogue, with complete documentation.
116.   The rogue then sold the vehicle to the defendant, Mr Hudson, for £17,000. Mr Hudson bought the vehicle for himself, and not as a dealer. He bought it in good faith. The rogue has vanished without trace. Shogun contend that the vehicle has at all times been their property and claim its return, or its value in lieu. Mr Hudson claims that the rogue passed a good title to him, by reason of the provisions of the Hire- Purchase Act 1964.

    The Hire-Purchase Act 1964

117.   It is a fundamental principle of the English law of sale of goods that a vendor cannot convey to a purchaser a better title to a chattel than that which he enjoys himself. There are however exceptions to this rule. One arises under section 27 of the Hire-Purchase Act 1964, as amended, which provides, so far as material:
"(1)  This section applies where a motor vehicle has been bailed or (in Scotland) hired under a hire-purchase agreement, or has been agreed to be sold under a conditional sale agreement, and, before the property in the vehicle has become vested in the debtor, he disposes of the vehicle to another person.

(2)  Where the disposition referred to in subsection (1) above is to a private purchaser, and he is a purchaser of the motor vehicle in good faith without notice of the hire-purchase or conditional sale agreement (the 'relevant agreement'), that disposition shall have effect as if the creditor's title to the vehicle has been vested in the debtor immediately before that disposition."

118.   Section 29(4) defines the debtor as, for present purposes, the person to whom the vehicle is bailed.
119.   The critical issue in this case is whether a hire-purchase agreement was ever concluded between Shogun and the rogue. If an agreement was concluded, then the rogue was the 'debtor' under section 27 of the 1964 Act and passed good title in the vehicle to Mr Hudson. If no agreement was concluded, then the rogue stole the vehicle by deception and passed no title to Mr Hudson.

    'What's in a name?'

120.   This area of the law has developed because of confusion about names and it may be helpful at the outset to reflect on the nature of a name. Words in a language have one or more ordinary meaning, which will be known to anyone who speaks that language. Names are not those kind of words. A name is a word, or a series of words, that is used to identify a specific individual. It can be described as a label. Whenever a name is used, extrinsic evidence, or additional information, will be required in order to identify the specific individual that the user of the name intends to identify by the name - the person to whom he intends to attach the label. Almost all individuals have two or more names which they use to identify themselves and where a name is mentioned in a particular context, or a particular milieu, those who hear it may have the additional information that they need to identify to whom the speaker is referring.
121.   Where a name appears in a written document, the document itself may contain additional information which will enable the reader to identify the individual to whom the writer intended to refer when he wrote the name.
122.   Where a person introduces himself by name to someone, his intention will normally be to tell that person the name that he uses to identify himself. This may also assist that other person to identify him in the future. If a person introduces himself by a false name, that may be because he does not wish to be identified in the future. If a person introduces himself by the name of somebody else, that may be because he wishes the person to whom he introduces himself to believe that he is that other person.

    Formation of contract

123.   A contract is normally concluded when an offer made by one party ('the offeror') is accepted by the party to whom the offer has been made ('the offeree'). Normally the contract is only concluded when the acceptance is communicated by the offeree to the offeror. A contract will not be concluded unless the parties are agreed as to its material terms. There must be 'consensus ad idem'. Whether the parties have reached agreement on the terms is not determined by evidence of the subjective intention of each party. It is, in large measure, determined by making an objective appraisal of the exchanges between the parties. If an offeree understands an offer in accordance with its natural meaning and accepts it, the offeror cannot be heard to say that he intended the words of his offer to have a different meaning. The contract stands according to the natural meaning of the words used. There is one important exception to this principle. If the offeree knows that the offeror does not intend the terms of the offer to be those that the natural meaning of the words would suggest, he cannot, by purporting to accept the offer, bind the offeror to a contract - Hartog v Colin and Shields [1939] 3 All ER 566; Smith v Hughes (1871) LR 6 QB 597. Thus the task of ascertaining whether the parties have reached agreement as to the terms of a contract can involve quite a complex amalgam of the objective and the subjective and involve the application of a principle that bears close comparison with the doctrine of estoppel. Normally, however, the task involves no more than an objective analysis of the words used by the parties. The object of the exercise is to determine what each party intended, or must be deemed to have intended.
124.   The task of ascertaining whether the parties have reached agreement as to the terms of a contract largely overlaps with the task of ascertaining what it is that the parties have agreed. The approach is the same. It requires the construction of the words used by the parties in order to deduce the intention of the parties - see Chitty on Contracts , 28th Ed Volume 1, paragraphs 12-042,3 and the cases there cited. This is true, whether the contract is oral or in writing. The words used fall to be construed having regard to the relevant background facts and extrinsic evidence may be admitted to explain or interpret the words used. Equally, extrinsic evidence may be necessary to identify the subject matter of the contract to which the words refer.
125.   Just as the parties must be shown to have agreed on the terms of the contract, so they must also be shown to have agreed the one with the other. If A makes an offer to B, but C purports to accept it, there will be no contract. Equally, if A makes an offer to B and B addresses his acceptance to C there will be no contract. Where there is an issue as to whether two persons have reached an agreement, the one with the other, the courts have tended to adopt the same approach to resolving that issue as they adopt when considering whether there has been agreement as to the terms of the contract. The court asks the question whether each intended, or must be deemed to have intended, to contract with the other. That approach gives rise to a problem where one person is mistaken as to the identity of the person with whom he is dealing, as the cases demonstrate. I propose at this point to consider those cases.

    The decided cases

126.   In Boulton v Jones (1857) 27 LJ Ex 117 the owner of a shop named Brockenhurst sold his stock-in-trade and assigned his business to the plaintiff. The same day the plaintiff received an order in writing, addressed to Brockenhurst, from the defendant. The defendant had had previous dealings with Brockenhurst and proposed to set off against the price a debt owed by Brockenhurst. The plaintiff supplied the goods and the defendant consumed them. When the plaintiff sent an invoice the defendant denied that he had concluded any contract with him. The Court ruled that there was no contract. Pollock CB said:
"Now the rule of law is clear, that if you propose to make a contract with A, then B cannot substitute himself for A without your consent and to your disadvantage, securing to himself all the benefit of the contract."

    Martin B agreed, without the qualification 'to your disadvantage':

"Where the facts prove that the defendant never meant to contract with A alone, B can never force a contract upon him; he has dealt with A, and a contract with no one else can be set up against him."

    Bramwell B explained his reasons in this way:

"I do not lay it down that because a contract was made in one person's name another person cannot sue upon it, except in cases of agency. But when any one makes a contract in which the personality, so to speak, of the particular party contracted with is important, for any reason, whether because it is to write a book or paint a picture, or do any work of personal skill, or whether because there is a set-off due from that party, no one else is at liberty to step in and maintain that he is the party contracted with, that he has written the book or painted the picture, or supplied the goods; and that he is entitled to sue, although, had the party really contracted with sued, the defendant would have had the benefit of his personal skill, or of a set-off due from him."

    Channell B also seemed to consider that it was material that the defendant had a set-off:

"The plaintiff is clearly not in a situation to sustain this action, for there was no contract between himself and the defendant. The case is not one of principal and agent; it was a contract made with B, who had transactions with the defendant and owed him money, and upon which A seeks to sue."

127.   This early case does not demonstrate the full application of the principles that I have set out in relation to formation of contract, although the result accords with them. The focus was, however, on the intention of the defendant.
128.   In Hardman v Booth (1863) 1 H & C 803 a fraud was perpetrated by one Edward Gandell who, it seems, carried on business in two capacities: (1) as clerk of a well known firm, Gandell & Co, of which his father was sole proprietor. There he had neither authority to contract nor was held out as having such authority. (2) He had formed a partnership with a man called Todd, which carried on business as Gandell & Todd. He purported to conclude a contract to purchase cloth from the plaintiffs, holding himself out as a member of Gandell & Co. The first instalment of the cloth was delivered to the premises of Gandell & Co and the second instalment was collected by Edward Gandell in a cart owned by Gandell & Co. Edward Gandell took the cloth to the defendant and purported to pledge it to secure a loan to Gandell & Todd. The issue was whether in these circumstances any contract was concluded between the plaintiffs and Gandell & Todd, under which the property in the cloth passed to them. The court held that no contract had been concluded.
129.   Once again the Court attached critical importance to the intention of the vendors. Pollock C.B. summarised the position as follows at p.806:
"… in this case I think it clear that there was no contract. Mr Hawkins contended that there was a contract personally with Edward Gandell, the individual with whom the conversations took place. It is true that the words were uttered by and to him, but the plaintiffs supposed that they were dealing with Gandell & Co., the packers, to whom they sent the goods; the fact being that Edward Gandell was not a member of that firm and had no authority to act as their agent. Therefore at no period of time were there two consenting minds to the same agreement."

130.   Martin B emphasised that he had no doubt that the plaintiffs believed 'that they were dealing with Gandell & Co'. Channell B remarked 'I do not think there was a sale to Gandell and Todd ….for it is evident that the plaintiffs believed that they were dealing with Gandell & Co'. Wilde B's judgment was to similar effect. Thus the Court proceeded on the simple premise that there could not be a contract between A and B if A did not intend to contract with B. The courts had not at this time begun to apply an objective test to the question of whether an agreement had been concluded between the parties.
131.   In Cundy v Lindsay (1878) 3 App Cas 459 a dispute about title to goods reached the House of Lords. A rogue called Blenkarn had a room at 37 Wood Street, Cheapside. A well-known firm called W Blenkiron & Son carried on business at 123 Wood Street. Blenkarn placed written orders for goods from 37 Wood Street with the plaintiffs. He signed the orders in such a way that the signature appeared to be Blenkiron & Co. The plaintiffs, who knew of Blenkiron & Son, though not the number at which they carried on business in Wood Street, accepted the orders and despatched goods addressed to 'Messrs Blenkiron & Co, 37 Wood Street, Cheapside.' Blenkarn sold some of these goods to the defendants, against whom the plaintiffs claimed in conversion.
132.   The House held that no contract had been concluded with Blenkarn and that, accordingly, the property in the goods had remained vested in the plaintiffs. Lord Cairns remarked at p.465 that the plaintiffs and Blenkarn never came into contact personally and that everything that was done was done by writing. The problem was the conclusion to be derived from the writing, as applied to the facts of the case. He held that Blenkarn had deliberately led the plaintiffs to believe that they were contracting with Blenkiron & Co, an existing firm. He asked:
"… how is it possible to imagine that in that state of things any contract could have arisen between the Respondents and Blenkarn, the dishonest man? Of him they knew nothing, and of him they never thought. With him they never intended to deal. Their minds never, even for an instant of time, rested upon him, and as between him and them there was no consensus of mind which could lead to any agreement or any contract whatever."

    Lord Hatherly said at p.469:

"…from beginning to end the Respondents believed they were dealing with Blenkiron & Co., they made out their invoices to Blenkiron & Co., they supposed they sold to Blenkiron & Co., they never sold in any way to Alfred Blenkarn; and therefore Alfred Blenkarn cannot, by so obtaining the goods, have by possibility made a good title to a purchaser, as against the owners of the goods, who had never in any shape or way parted with the property nor with anything more than the possession of it."

    Lord Penzance said at p.471:

"In the present case Alfred Blenkarn pretended that he was, and acted as if he was, Blenkiron & Co. with whom alone the vendors meant to deal. No contract was ever intended with him, and the contract which was intended failed for want of another party to it."

133.   Here, once again, the focus was on the intention of the offeree. In deciding that his intention was to contract with Blenkiron & Co, the House had regard to the fact that the order was apparently signed 'Blenkiron & Co' and to the fact that the plaintiffs knew of a firm of that name and intended to deal with that firm. Thus extrinsic evidence was admitted in addition to the wording of the order in order to ascertain the intention of the plaintiffs.
134.   In King's Norton Metal Company Ltd v Edridge, Merrett & Company Ltd (1897) 14 TLR 98 a rogue named Wallis had notepaper printed in the name of Hallam & Co and, pretending to be carrying on business in that name, ordered a ton of brass rivet wire from the plaintiff manufacturers. The plaintiffs delivered the wire on credit and Wallis promptly sold it to the defendants. The Court of Appeal held that a contract had been concluded between the plaintiffs and Wallis, under which property in the goods had passed. The short report records the reasoning of A.L. Smith LJ as follows:
"The question was, With whom, upon this evidence, which was all one way, did the plaintiffs contract to sell the goods? Clearly with the writer of the letters. If it could have been shown that there was a separate entity called Hallam and Co. and another entity called Wallis then the case might have come within the decision in Cundy v Lindsay. In his opinion there was a contract by the plaintiffs with the person who wrote the letters, by which the property passed to him. There was only one entity, trading it might be under an alias, and there was a contract by which the property passed to him."

135.   This case demonstrates that, if a person describes himself by a false name in contractual dealings, this will not, of itself, prevent the conclusion of a contract by a person who deals with him in that name. A.L. Smith LJ did not refer to 'intention' in his reported judgment. The result is, however, consistent with the approach to which I have referred in relation to formation of contract. The plaintiffs intended to deal with whoever was using the name of Hallam & Co. Extrinsic evidence was needed to identify who that was but, once Wallis was identified as the user of that name, the party with whom the plaintiffs had contracted was established. They could not demonstrate that their acceptance of the offer was intended for anyone other than Wallis.
136.   Phillips v Brooks Ltd [1919] 2 KB 243 is the first case that involved a face-to-face transaction. A rogue called North entered the plaintiff's jewellery shop. He selected some pearls and a ring and wrote out a cheque for the total price of £3,000. He stated that he was Sir George Bullough and gave an address in St James' Square. The plaintiff, who knew of the existence of Sir George Bullough, referred to a directory and found that Sir George did, indeed, live at that address. He then permitted North to take away the ring before the cheque was cleared. Horridge J held that a contract was concluded between the plaintiff and North. At the outset of his judgment he set out his conclusion:
"I have carefully considered the evidence of the plaintiff, and have come to the conclusion that, although he believed the person to whom he was handing the ring was Sir George Bullough, he in fact contracted to sell and deliver it to the person who came into his shop, and who was not Sir George Bullough, but a man of the name of North, who obtained the sale and delivery by means of the false pretence that he was Sir George Bullough. It is quite true the plaintiff in re-examination said he had no intention of making any contract with any other person than Sir George Bullough; but I think I have myself to decide what is the proper inference to draw where a verbal contact is made and an article delivered to an individual describing himself as somebody else."

137.   In reaching his conclusion, Horridge J applied the reasoning in an American decision - Edmunds v Merchants' Despatch Transportation Co (1883) 135 Mass. 283 at p.284:
"The following expressions used in the judgment of Morton CJ seem to me to fit the facts in this case: 'The minds of the parties met and agreed upon all the terms of the sale, the thing sold, the price and time of payment, the person selling and the person buying. The fact that the seller was induced to sell by fraud of the buyer made the sale voidable, but not void. He could not have supposed that he was selling to any other person; his intention was to sell to the person present, and identified by sight and hearing; it does not defeat the sale because the buyer assumed a false name or practised any other deceit to induce the vendor to sell.'"

138.   Phillips v Brooks well illustrates the conundrum that the application of the test of intention raises when terms are negotiated between two persons who are face to face. It arises where the two persons, A and B, are not known to each other and where A gives a name which is not his own. If B is unaware of the existence of a third person who bears that name, there will be no problem. B will clearly intend to contract with A, treating the name given by A simply as the label by which A identifies himself. Equally A will know that B intends to contract with him. The problem arises where B is aware of a third person, C, who bears the name falsely adopted by A. In that situation it is B's intention to contract both with A and with C, for he does not distinguish between the two. No sensible answer can be given to the question: does B intend to contract with A or C? Nor can any sensible answer be given to the question: does A believe that B intends to contract with him or with C?
139.   Horridge J. solved the conundrum by drawing an 'inference' that the plaintiff intended to contract with the rogue, who was present, and not with the individual whose identity the rogue had assumed.
140.   Lake v Simmons [1927] AC 487 involved a claim by a jeweller on a policy of insurance. A fraudulent woman named Ellison induced him, in face-to-face dealings, to part with possession of two necklaces by false pretences. She pretended that she was the wife of a local gentleman called Van der Borgh, with whom she was living, and that he wanted a necklace on approval as he was contemplating giving it to her. She further pretended that a Commander Digby, who was engaged to her sister, wanted the other necklace on approval. There was no such man. Miss Ellison disposed of the necklaces. The issue was whether the underwriters were exempted from liability under an exclusion in respect of "loss by theft or dishonesty committed by … any customer in respect of goods entrusted to" the customer. The House held that they were not. Viscount Haldane, when considering whether the goods were 'entrusted' to Miss Ellison, applied the test of whether the face-to-face dealings between her and the jeweller were capable of giving rise to a contract. He held that they were not because of the mistake as to her identity:
"The latter was entirely deceived as to the identity of the person with whom he was transacting. It was only on the footing and in the belief that she was Mrs.Van der Borgh that he was willing to deal with her at all. In circumstances such as these, I think that there was no such consensus ad idem as, for example, Lord Cairns, in his judgment in Cundy v. Lindsay (1878) 3 App. Cas. 459, declared to be requisite for the constitution of a contract. No doubt physically the woman entered the shop and pretended to bargain in a particular capacity, but only on the footing of being a different person from what she really was. There was never any contract which could afterwards become voidable by reason of a false representation made in obtaining it, because there was no contract at all, nothing excepting the result of a trick practised on the jeweller."

141.   Viscount Haldane was applying a test of intention, but in a manner which differs from that adopted by Horridge J. Although he purported to distinguish rather than overrule Phillips v Brooks, I find his approach to be inconsistent with that decision. Devlin LJ, in Ingram v Little [1961] 1 QB 31, carefully analysed the speeches in Lake v Simmons, and concluded that no other member of the House adopted Viscount Haldane's approach. I agree with that conclusion. The speeches of the other members of the House do not bear on the issue before us.
142.   In Ingram v Little a rogue, in the course of negotiating to buy a car from three ladies, the plaintiffs, who were reluctant to take his cheque, stated that his name was P.G.M. Hutchinson and gave an address in Caterham. One of the vendors went to the local post office and ascertained from the telephone directory that there was indeed a Mr P.G.M. Hutchinson, who lived at that address. The ladies parted with possession of the car in exchange for a worthless cheque. The rogue sold the car to the defendant. The situation was similar to that in Phillips v Brooks, and all members of the Court of Appeal referred to that case. Sellers LJ doubted whether it was correctly decided. He said at p.51:
"It is not an authority to establish that where an offer or acceptance is addressed to a person (although under a mistake as to his identity) who is present in person, then it must in all circumstances be treated as if actually addressed to him."

143.   Earlier, at p.50, he said:
"Where two parties are negotiating together and there is no question of one or the other purporting to act as agent for another, and an agreement is reached, the normal and obvious conclusion would no doubt be that they are the contracting parties. A contrary finding would not be justified unless very clear evidence demanded it."

    Relevant factors that might displace the presumption that the parties face to face were the contracting parties were whether the party impersonated was known to the other party and the importance attached to the identity of that person. The question in each case should be solved by asking the question "how ought the promisee to have interpreted the promise?" Sellers LJ accepted the judge's conclusion that, on the facts of the case, the rogue knew that the offer was not made to him as he was, but only to an existing person whom he represented himself to be. The offer was one which was capable of being accepted only by the honest P.G.M. Hutchinson and not by the rogue.

144.   Pearce LJ gave a judgment to similar effect. At p.57 he said that it was clear that, though difficult, it was not impossible to rebut the prima facie presumption that the offer could be accepted by the person to whom it was physically addressed. Each case had to be decided on its own facts. He observed that:
"the nature of the proposed contract must have a strong bearing on the question of whether the intention of the offeror (as understood by his offeree) was to make his offer to some other particular identity rather than to the physical person to whom it was orally offered".

    He concluded that the judge was entitled to find that the identity of Mr Hutchinson was significant and that it was with him that the vendors intended to deal.

145.   Devlin LJ gave a powerful dissenting judgment. He held that there were two questions: (1) was a contract properly formed? If so, (2) was it void for mistake?
146.   As to form, he said that there could be no doubt that this had to be settled by inquiring with whom Miss Ingram intended to contract. That was a mixed question of fact and law. There was a presumption that a person intended to contract with the person to whom he was addressing the words of the contract. That presumption was not conclusive, at least where the party addressed purported to be acting as an agent. The presumption could not, however, be rebutted simply by showing that Miss Ingram would not have contracted with the rogue unless she had thought that he was Mr Hutchinson. There was nothing to rebut the presumption that she was addressing her acceptance to the rogue, in law as well as in fact. There was offer and acceptance in form. Turning to the question of mistake, Devlin LJ held that there could be no question of the mistake as to identity rendering the contract void, for the identity of the purchaser was immaterial, although his creditworthiness was not.
147.   All three members of the court adopted the approach of identifying the intention of Miss Ingram. The difference between them was as to the manner of application of that approach where an agreement was negotiated face to face. The majority considered that a sensible answer could be given to the question 'with whom did Miss Ingram intend to contract?' as a question of fact. Devlin LJ considered that this question could only be answered by the application of a legal presumption, which would not be rebutted where the only reason for interest in the identity of the contracting party was concern that the contracting party should be creditworthy.
148.   Ten years later a case of very similar facts was before the Court of Appeal. In Lewis v Averay [1972] 1 QB 198 the plaintiff advertised his car for sale in a newspaper. A rogue telephoned and asked to see it. He arrived and told the plaintiff and his fiancée that he was Richard Green and led them to believe that he was a well-known film actor of that name, who was playing the role of Robin Hood in a television series. A sale was agreed and the rogue wrote out a cheque for the purchase price. The plaintiff demurred at letting the rogue take the car before his cheque was cleared, whereupon the rogue produced a pass of admission to Pinewood Studios, with an official stamp on it, the name Richard A Green and the rogue's photograph. On sight of this, the plaintiff permitted the rogue to take the car and the documents that related to it. The cheque bounced and the rogue sold the car to the defendant, pretending at this point that he had the plaintiff's name. The Court of Appeal held that a valid contract had been concluded between the plaintiff and the rogue and that good title had passed to the defendant.
149.   Giving the leading judgment, Lord Denning MR commented that it was impossible to distinguish between Phillips v Brooks and Ingram v Little on the facts. He held that Phillips v Brooks was to be preferred. He said, at p.207:
"When two parties have come to a contract - or rather what appears, on the face of it, to be a contract - the fact that one party is mistaken as to the identity of the other does not mean that there is no contract, or that the contract is a nullity and void from the beginning. It only means that the contract is voidable, that is, liable to be set aside at the instance of the mistaken person, so long as he does so before third parties have in good faith acquired rights under it.

….
In this case Mr Lewis made a contract of sale with the very man, the rogue, who came to the flat. I say that he 'made a contract' because in this regard we do not look into his intentions, or into his mind to know what he was thinking or into the mind of the rogue. We look to the outward appearances. On the face of the dealing, Mr Lewis made a contract under which he sold the car to the rogue, delivered the car and the logbook to him, and took a cheque in return. The contract is evidenced by the receipts which were signed. It was, of course, induced by fraud. The rogue made false representations as to his identity. But it was still a contract, though voidable for fraud. It was a contract under which this property passed to the rogue, and in due course passed from the rogue to Mr Averay, before the contract was avoided"

150.   Phillimore LJ agreed, though in a manner which paid due respect to the doctrine of precedent. He referred to the fact that Ingram v Little was a case of 'very special and unusual facts' and held that there was nothing that could displace the prima facie presumption that the plaintiff was dealing with the rogue. The case was on all fours with Phillips v Brooks, which had been good law for fifty years.
151.   Megaw LJ concurred, observing that he found it difficult to understand the basis, either in logic or in practical considerations, of the test laid down in Ingram v Little.
152.   Lord Denning MR did not apply the approach of attempting to identify the intention of the plaintiff. He proceeded on the simple basis that, to all outward appearances, the plaintiff entered into an agreement with the rogue, with whom he was dealing. Both he and Phillimore LJ considered that the case was on all fours with Phillips v Brooks, which had been rightly decided.
153.   The difficulty in applying a test of intention to the identification of the parties to a contract arises, so it seems to me, only where the parties conduct their dealings in some form of inter-personal contact, and where one purports to have the identity of a third party. There the innocent party will have in mind, when considering with whom he is contracting, both the person with whom he is in contact and the third party whom he imagines that person to be.
154.   The same problem will not normally arise where the dealings are carried out exclusively in writing. The process of construction of the written instruments, making appropriate use of extrinsic evidence, will normally enable the court to reach a firm conclusion as to the person with whom a party intends to contract. This was the position in Boulton v Jones, Cundy v Lindsay and King's Norton Metal Company v Edridge, Merrett & Company Ltd. There is a substantial body of authority that demonstrates that the identity of a party to a contract in writing falls to be determined by a process of construction of the putative contract itself. I shall refer to some examples.
155.   In Young v Schuler (1883) 11 QBD 651 the issue was whether Schuler had signed an agreement simply under a power of attorney on behalf of one of the named parties or, additionally, on his own behalf as a guarantor. As to this, Sir William Brett MR observed at pp.654 - 655:
"But the questions whether a person has signed his name at the foot of a document, and if so, for what purpose, are questions of evidence, and any evidence on the subject which does not contradict the document is admissible…. This evidence does not contradict anything on the face of the document, and is, in my opinion, plainly admissible." (The emphasis is mine.)

    Cotton LJ gave a judgment to like effect and Bowen LJ agreed.

156.   In Newborne v Sensolid (Great Britain) Ltd [1954] 1 QB 45 an apparent contract in writing provided for the sale of goods by a company described as Leopold Newborne (London) Ltd. The document was subscribed by the name of the company with Mr Leopold Newborne's signature under it. At the time in question Leopold Newborne (London) Ltd did not exist, for it had not then been incorporated. Mr Newborne attempted to enforce the contract as one to which he was party. He failed on the ground that this was inconsistent with the description of the party in the contract. Lord Goddard CJ observed at p.51:
"In my opinion, unfortunate though it may be, as the company was not in existence when the contract was signed there never was a contract, and Mr Newborne cannot come forward and say: 'Well, it was my contract.' The fact is, he made a contract for a company which did not exist."

157.   Morris LJ agreed, observing that the contract purported to be a contract with the company and that it was not relevant that, as was the case, it was a matter of indifference to the purchasers whether they contracted with the company, or with Mr Newborne personally.
158.   Where contracts were subject to the Statute of Frauds the required memorandum in writing had to identify the parties to the contract and a person could not intervene to claim that he was the true party to the contract when this was not consistent with the terms of the memorandum: Lovesy v Palmer [1916] 2 Ch 233; Basma v Weekes [1950] AC 441.
159.   In the field of agency, an undisclosed principal will not be permitted to claim to be party to a contract if this is contrary to the terms of the contract itself. Thus the provision in the standard form B contract of the London Metal Exchange "this contract is made between ourselves and yourselves as principals, we alone being liable to you for its performance" is effective to preclude any contention that the parties named in the contract are contracting as agents for others - JH Rayner Ltd v Dept of Trade [1990] 2 AC 418 at p. 516.
160.   In the field of shipping law a question sometimes arises as to who is the party to a contract of carriage and this is determined as a question of construction - see Homburg Houtimport BV v Agrosin Ltd [2003] UKHL 12; [2003] 2 WLR 711 and Internaut Shipping GMBH v Fercometal SARL [2003] EWCA Civ 812 for recent examples.
161.   The effect of these authorities is that a person carrying on negotiations in writing can, by describing as one of the parties to the putative agreement an individual who is unequivocally identifiable from that description, preclude any finding that the party to the putative agreement is other than the person so described. The process of construction will lead inexorably to the conclusion that the person with whom the other party intended to contract was the person thus described.
162.   That the identification of the parties to a written contract involves construing the contract was the basis of the decision in Hector v Lyons (1988) 58 P & CR 156. The majority of the Court of Appeal in the present case considered that this decision weighed conclusively in favour of Shogun. Hector v Lyons involved a claim for specific performance of a contract to buy a house. The appellant rejoiced in the name Martin Aloysius Handel Hector. He had a son, aged less than 18, more modestly christened Martin Aloysius Hector. The father negotiated the purchase of the house face-to-face with the Respondent, who at all times understood that she was contracting with the father. The father instructed solicitors to draw up the formal contract for exchange. For reasons not apparent he led them to understand that the purchaser was to be his son, and they described the purchaser in the contract as 'Martin Aloysius Hector', understanding that they were thereby identifying the son. The father signed the purchaser's copy of the contract with a signature that differed from his normal signature. What was behind all of this is not clear to me nor was it, I suspect, to the trial judge, who found that the father gave a lot of false evidence.
163.   The father sought to enforce the contract on the footing that he was the purchaser. The respondent argued that he was not a party to the written contract; the purchaser under that contract was the son. The trial judge found in her favour. The basis upon which he did so was that the solicitors handed over the purchaser's part of the contract as being the document of the son and the signature that it bore purported to be that of the son.
164.   In the Court of Appeal counsel for the appellant argued that the contract had been concluded between the appellant and the respondent, relying on the line of cases ending with Lewis v Averay. The Vice-Chancellor dismissed this argument at pp.158-9:
"In the case of a face to face sale, where the sale is over a counter or between two individuals, the law is well established that the mere fact that the vendor V is under the misapprehension as to the identity of the person in front of him does not operate so as to render the contract void for mistake, it being a mere unilateral mistake as to a quality of the purchaser; only in cases where the identity of the purchaser is of direct and important materiality in inducing the vendor to enter into the contract is a mistake of the kind capable of avoiding the contract.

With one exception those cases are entirely concerned with transactions between two individuals face to face entering into oral agreement. In my judgement the principle there enunciated has no application to a case such as the present where there is a contract wholly in writing. There the identity of the vendor and the purchaser is established by the names of the parties included in the written contract. Once those names are there in the contract, the only question for the court is to identify who they are.

In the present case the deputy judge has found as a fact that the party named in the written contract was Mr Hector junior. It follows, in my judgement, that in the absence of rectification, which has not been claimed, or Mr Cogley's alternative argument based on agency the only person who can enforce that contract is the party to it, namely Mr Hector junior. He has never at any stage sought to do so. It is for these purposes in my judgement irrelevant whom Mrs Lyons thought she was contracting with: she is entitled to say "I entered into a contract with the person named in the contract, and nobody else." As the learned deputy judge pointed out, if Mrs Lyons had sought to enforce the contract against Mr Hector senior, the position might have been different, in that Mr Hector senior might have estopped himself by his conduct from denying that he was the person named in the contract. But that is quite a different case."

165.   In concurring with the Vice-Chancellor, Woolf LJ said this:
"Parties to the contract are normally to be ascertained from the document or documents containing the contract. There can be limited circumstances where it is possible to allow oral evidence to be given in relation to a written contract, but those circumstances are recognised as being exceptional and should, in my view, be strictly confined.

…
In this case there is no dispute as to who, according to the written contract, are the parties. The son was described in the contract as one of the parties. He does exist and, insofar as there was a contract at all, it was between him and the other party identified in the contract, Mrs Pamela Doris Lyons"

166.   Given the premise that, as a matter of construction, the purchaser described in the contract was the son, the conclusion of the Court of Appeal is readily understandable. I do, however, have difficulty in understanding the basis on which the trial judge concluded that the purchaser described in the contract was the son rather than the father. The father had carried out the negotiations, he had signed the agreement, albeit not with his customary signature, and he bore the forenames and the surname of the purchaser, as described in the contract. The trial judge's finding does not, however, appear to have been challenged in the Court of Appeal. While the facts of this decision are not easy to follow, it supports the proposition that the identity of the parties to a contract in writing fall to be determined by a process of construction of the contract.

    The result in the present case

167.   I have had the advantage of reading in draft the opinions of my noble and learned friends who have sat with me on this appeal. Lord Hobhouse of Woodborough and Lord Walker of Gestingthorpe have concluded that, as the contract was a written document, the identity of the hirer falls to be ascertained by construing that document. Adopting that approach, the hirer was, or more accurately purported to be, Mr Patel. As he had not authorised the conclusion of the contract, it was void.
168.   Lord Nicholls of Birkenhead and Lord Millett have adopted a different approach. They point out the illogicality of applying a special approach to face-to-face dealings. What of dealings on the telephone, or by videolink? There also it could be said that each of the parties to the dealings is seeking to make a contract with the other party to the dealings. And this can even be said when the dealings are conducted by correspondence. If A writes to B making an offer and B writes back responding to that offer, B is intending to contract with the person who made that offer. If a contract is concluded in face-to-face dealings, notwithstanding that one party is masquerading as a third party, why should the result be different when the dealings are by letter?
169.   Lord Nicholls of Birkenhead and Lord Millett propose an elegant solution to this illogicality. Where two individuals deal with each other, by whatever medium, and agree terms of a contract, then a contract will be concluded between them, notwithstanding that one has deceived the other into thinking that he has the identity of a third party. In such a situation the contract will be voidable but not void. While they accept that this approach cannot be reconciled with Cundy v Lindsay, they conclude that Cundy v Lindsay was wrongly decided and should no longer be followed.
170.   While I was strongly attracted to this solution, I have found myself unable to adopt it. Cundy v Lindsay exemplifies the application by English law of the same approach to identifying the parties as is applied to identifying the terms of the contract. In essence this focuses on deducing the intention of the parties from their words and conduct. Where there is some form of personal contact between individuals who are conducting negotiations, this approach gives rise to problems. In such a situation I would favour the application of a strong presumption that each intends to contract with the other, with whom he is dealing. Where, however, the dealings are exclusively conducted in writing, there is no scope or need for such a presumption. This can be illustrated by a slight adaption of the facts of the present case. Assume that the rogue had himself filled in the application form and sent it and a photocopy of Mr Patel's driving licence to Shogun. Assume further that he had been authorised to do so by Mr Patel. There can be no doubt that a contract would have been concluded between Shogun and Mr Patel. Mr Patel would have intended to contract with Shogun; Shogun would have intended to contract with Mr Patel; and this would have been demonstrated by the application form.
171.   Assume now that the rogue had wrongly understood that he had been requested by Mr Patel to fill in and submit the application form on his behalf, but in fact had no authority to do so. In this situation, according to established principles of the law of agency, an apparent contract would have been concluded between Shogun and Mr Patel but, being concluded without the latter's authority, it would be a nullity. Shogun might have a claim against the rogue for breach of warranty of authority, but could not have demonstrated that a contract had been concluded with the rogue.
172.   Turning to the true position - that the rogue knew he had no authority to conclude a contract in the name of Mr Patel, but fraudulently wished to induce Shogun to believe that they were entering into such a contract - I do not see by what legal principle this change in the mental attitude of the rogue could result in a binding contract being concluded with him.
173.   The position is not, of course, as simple as that. Negotiations between the rogue and Shogun were not conducted exclusively by written correspondence. They were conducted with the aid of the dealer and the use of fax and telephone communications. Acceptance of the offer was conveyed by telephone via the dealer - and this might have been capable of concluding a contract, notwithstanding that Clause 1 of the standard terms provided for acceptance by signature - see the discussion in Chitty on Contracts 28th Ed. Vol 1 at paragraph 2-062. Sedley LJ considered that the dealings were analogous to face-to-face dealings and that the dealer was, in effect, the face of Shogun Finance Ltd. He considered that the face-to-face presumption should be applied.
174.   The majority of the Court of Appeal considered that Hector v Lyons required them to determine the identity of the parties to the putative contract as a simple question of construction. On that basis they concluded that the putative hirer was Mr Patel and that, as the apparent contract was concluded without his authority, it was a nullity.
175.   Dyson LJ considered what the result would have been had the negotiations been treated as face-to-face. He concluded that the presumption would have been displaced by the importance that Shogun attached to the identity of the person with whom they were contracting.
176.   My Lords, I started this opinion by quoting Gresson P's remark that the difficulty in a case such as this is a proper assessment of the facts rather than an assessment of the law. I have not found the assessment of the law easy, but nor is the application of the law to the facts. Shogun's representatives were aware of the presence of the prospective hirer in the dealer's showrooms in Leicester. To an extent the dealings were inter-personal through the medium of the dealer. Should one treat them as comparable to face-to-face dealings and conclude that there was a presumption that Shogun intended to contract with the man with whom they were dealing? Should one treat the written agreement as no more than peripheral to the dealings and conclude that it does not override that presumption? I have concluded that the answer to these questions is 'no'.
177.   Shogun had, on the evidence, set up a formal system under which contracts would be concluded in writing on a standard form. This form was designed to cater for both regulated and non-regulated hire purchase agreements. In order to be suitable for the former it had to comply with the requirements of the Consumer Credit (Agreements) Regulations 1983. Schedule 1 to these regulations, under the heading 'Parties to the agreement', requires the agreement to set out 'The name and a postal address of the creditor' and 'The name and a postal address of the debtor'. The agreement with which this appeal is concerned was not a regulated agreement, for the purchase price of the vehicle exceeded what was, at the time, the maximum to which the relevant provisions of the Consumer Credit Act 1974 applied. I do not see, however, that the approach to the identification of the parties to the putative agreement can turn on whether or not the agreement was subject to the regulations. Shogun put in place a system for concluding contracts that required both regulated and unregulated agreements to be entered into in writing in a form which provided essential information, including the identity of the parties to the agreement.
178.   These considerations lead me to conclude that the correct approach in the present case is to treat the agreement as one concluded in writing and to approach the identification of the parties to that agreement as turning upon its construction. The particulars given in the agreement are only capable of applying to Mr Patel. It was the intention of the rogue that they should identify Mr Patel as the hirer. The hirer was so identified by Shogun. Before deciding to enter into the agreement they checked that Mr Patel existed and that he was worthy of credit. On that basis they decided to contract with him and with no-one else. Mr Patel was the hirer under the agreement. As the agreement was concluded without his authority, it was a nullity. The rogue took no title under it and was in no position to convey any title to Mr Hudson.
179.   For these reasons I would dismiss this appeal.

LORD WALKER OF GESTINGTHORPE

My Lords,

180.   I have had the advantage of reading in draft the opinion of my noble and learned friend Lord Hobhouse of Woodborough. I agree with him that this appeal should be dismissed for the reasons given in his opinion. But because of the interest of this appeal, and the differing views among your Lordships, I wish to add some observations of my own. I begin with two general points.
181.   A recurring theme in the authorities, starting with the very first sentence of the speech of Lord Cairns LC in Cundy v Lindsay (1878) 3 App Cas 459, 463, is the Court's difficulty in deciding which of two innocent parties should bear the loss caused by the fraud of a third person (who may be beyond the reach of the law). Typically one innocent party is a seller who has parted with goods to a rogue, without obtaining payment in cash, and the other innocent party has bought the same goods from the rogue for cash. But although the Court recognises both as innocent there is sometimes an inclination to regard the eventual buyer from the rogue as the more deserving of sympathy. Thus Lord Denning MR said in Lewis v Averay [1972] 1 QB 198, 207,
"As I listened to the argument in this case, I felt it wrong that an innocent purchaser (who knew nothing of what passed between the seller and the rogue) should have his title depend on such refinements. After all, he has acted with complete circumspection and in entire good faith: whereas it was the seller who let the rogue have the goods and thus enabled him to commit the fraud".

182.   In that case both of the innocent parties were young men and both might be thought to have been over-trusting. By contrast in Phillips v Brooks Ltd [1919] 2 KB 243, the seller was an Oxford Street jeweller, and the ultimate holder was a pawnbroker, both of whom were presumably experienced in their trades. In other cases one or other of the innocent parties may appear to have a stronger claim on the Court's sympathy. But your Lordships have to lay down a general rule to cover the generality of cases, and it would not be right to make any general assumption as to one innocent party being more deserving than the other. That is especially true in this case which is concerned, not with a sale but with a hire-purchase transaction, and in which the issue to be decided is (as Lord Hobhouse has pointed out) ultimately a question of statutory construction.
183.   The other general point is that (in agreement, I think, with all your Lordships) I regard the issue in this appeal as essentially a problem about offer and acceptance; and in determining whether or not a contract has been formed by offer and acceptance, the Court adopts an objective approach, and does not enquire into what either party actually intended, but into the effect, objectively assessed, of what they said or wrote. As it has been put in a much-cited passage from Gloag on Contract,
"The judicial task is not to discover the actual intentions of each party; it is to decide what each was reasonably entitled to conclude from the attitude of the other".

    (For one of the most recent citations see OT Africa Line Ltd v Vickers Plc [1996] 1 LLR 700, 702). This point is neither original nor controversial but it is worth making because in the leading case of Cundy v Lindsay (which had at first instance been tried with a jury) their Lordships' speeches placed little or no weight on the need for an objective approach. There was no need for them to do so, since (as the Lord Chancellor said at p 464) "The whole history of the whole transaction lies upon paper".

184.   The objective nature of the enquiry tends to narrow, perhaps close to vanishing-point, the difference (mentioned in the speeches of my noble and learned friends Lord Millett and Lord Phillips of Worth Matravers) between the person for whom the offer or acceptance is intended and the person to whom it is directed. I venture to suggest that the right question to ask, whether the parties to an alleged contract have been negotiating face to face or at a distance, is to whom the offer is made (or to whom acceptance of an offer is made; but I shall for the sake of simplicity assume that, as in this case, the rogue is the offeror). Posed in that way, the question may be no easier to answer, but it does avoid the sort of pointless speculation which Devlin LJ exposed in Ingram v Little [1961] 1 QB 31, 65:
"If Miss Ingram had been asked whether she intended to contract with the man in the room or with P G M Hutchinson, the question could have no meaning for her, since she believed them both to be one and the same. The reasonable man of the law—if he stood in Miss Ingram's shoes—could not give any better answer".

185.   The principle to be applied in the case of face to face negotiations has sometimes been treated as an exception, but to my mind it is the best starting-point, as it exemplifies the simplest form of oral contract. The principle was first spelled out in England in Phillips v Brooks Ltd, following the Chief Justice of Massachusetts in Edmunds v Merchants' Despatch Transportation Company (1883) 135 Mass 283,
"The fact that the seller was induced to sell by fraud of the buyer made the sale voidable, but not void. He could not have supposed that he was selling to any other person; his intention was to sell to the person present, and identified by sight and hearing; it does not defeat the sale because the buyer assumed a false name, or practised any other deceit to induce the vendor to sell".

    The only case out of line with the principle is Ingram v Little. The reasoning in Devlin LJ's powerful dissenting judgment is in my view unanswerable. I consider that Ingram v Little was wrongly decided.

186.   My noble and learned friends Lord Nicholls of Birkenhead and Lord Millett accept the face to face principle but consider that it should not be limited to situations where the parties have negotiated face to face. Lord Millett also takes the view that the principle should not be regarded as a mere presumption, but as a rule of law (subject, as I understand it, to an exception in cases of agency, such as Hardman v Booth (1863) 1 H & C 803, which may be the best explanation of the difficult case of Lake v Simmons [1927] AC 487: see Sir Jack Beatson's 28th (2002) edition of Anson's Law of Contract pages 330-1, which contain an illuminating discussion).
187.   If the principle is no more than a presumption, it is a strong presumption, and exceptions to it would be rare (in Ingram v Little Devlin LJ himself, at p 67, was content to leave this point open). I would hesitate to state it as an inflexible rule (apart from cases of agency) because the notion of one individual impersonating another covers a wide range of factual situations (broadly corresponding to the wide range of meaning conveyed by saying that one person knows, or knows of, another). At one end of the spectrum is the confidence trickster who falsely but convincingly asserts that he is a baronet (or a barrister, or a brain surgeon) in order to inspire confidence and obtain credit. Then there are cases like Phillips v Brooks Ltd and Ingram v Little, where the rogue falsely gives the name and address of a real person whose existence the other party can and does check (but whom the other party does not actually know by sight, or the deception would fail). The most audacious form of impersonation would be where a rogue (such as the Tichborne claimant was held to be) attempts, face to face, to deceive a member of the family of which he claims to be part, or someone else personally acquainted with the individual whom the rogue is impersonating. Impersonation of that sort must be very rare indeed, and probably limited to deception of those whose senses are impaired (as Isaac was when, according to Chapter 27 of Genesis, Jacob successfully impersonated his elder twin brother Esau). I would not exclude the possibility that impersonation of that sort might be outside the presumption. Your Lordships were shown the decision of the Court of Appeals of New York in Morgan Munitions Supply Company v Studebaker Corporation (1919) 123 NE 146, where one brother impersonated his more distinguished brother in order to obtain a contract of employment; but it appears (so far as can be discerned from the report) that the contract was in writing, and that neither brother was personally known to the employer.
188.   I return to the question, which is of central importance to this appeal, whether (as Lord Nicholls and Lord Millett propose) the face to face principle should be applied much more generally. It may be that it should apply to an oral contract alleged to have been made on the telephone, where the parties are identified by hearing, although not by sight. An alleged oral contract made by telephone might be a case where the presumption applied, but was rebuttable. But to extend the principle to cases where the only contract was by written communication sent by post or by e-mail would be going far beyond identification by sight and hearing. Where there is an alleged contract reached by correspondence, offer and acceptance must be found, if they are to be found at all, in the terms of the documents. Devlin LJ put it simply and clearly in Ingram v Little at page 64:
"The classic case of Cundy v Lindsay was one in which the acceptance was not addressed to the offeror. The offer, as in the instant case, was addressed to a person who held himself out as willing to do business. But the offer was made by Blenkarn and the acceptance addressed to Blenkiron. The fact that there was a real Blenkiron, whom Blenkarn was pretending to be, showed that it was not a case of falsa demonstratio non nocet".

    There was in that case the appearance of a complete contract only because the rogue, Blenkarn, had forged the signature of Blenkiron & Co. (Lord Cairns said at p 465 "just in the same way as if he had forged the signature"; but the facts as set out in the report appear to amount to nothing less than forgery.) The documentary evidence provided no ground for concluding that the manufacturer (Lindsay & Co.) intended to contract with anyone other than Blenkiron & Co. as addressee of the manufacturer's acceptance.

189.   King's Norton Metal Company Ltd. v Edridge, Merrett & Co Ltd (1897) 14 TLR 98 went the other way because there was no ground for concluding that the manufacturer's offer was made to anyone other than Wallis, trading as Hallam & Co. Wallis, trading as Hallam & Co., had previously placed at least one order with the manufacturer, and had paid with a cheque drawn by "Hallam & Co.". The judge at first instance described the case as a long firm fraud. So in that case there was no question of the manufacturer being deceived into thinking he was dealing with someone else. The deceit was as to the standing and credit- worthiness of Wallis, who had embellished his writing paper with deceptive material.
190.   In Cundy v Lindsay Blenkiron & Co., the firm whose name was misappropriated by the rogue, was described by the Lord Chancellor as "a well known and solvent house". The implication is that Lindsay & Co, the manufacturer, would have known of its existence, although that was not a question explicitly put to the jury. What if Lindsay & Co. had never heard of Blenkiron & Co? One answer to that question is that the sequence of events would probably have been different, since Lindsay & Co. would have been put on enquiry as to what to make of the rogue's deceptive signature, and would probably have acted more cautiously before despatching such a large quantity of goods. There would have been more room for argument about who was the real addressee of the manufacturer's offer. The Latin maxim referred to by Devlin LJ in Ingram v Little means in its full form that misdescription is not fatal when the real subject-matter is common ground. These last words are important. Whether the real subject is common ground depends on all the circumstances, and the old textbooks are full of illustrations, some going one way and some the other (see for instance Jarman on Wills, 8th edition (1951) volume 2, pages 1246 ff). The modern approach to construction of documents is much less regimented by detailed rules, but the essential issue remains the same.
191.   However, the present appeal is, as my noble and learned friend Lord Hobhouse has demonstrated, easier to resolve. Shogun Finance had no doubt never heard of the real Mr Patel before the day on which the written contract was signed by the rogue, forging Mr Patel's signature. But by the time it accepted the written offer it had, by efficient information technology, confirmed that Mr Patel existed and had learned a good deal of relevant information about him, including his creditworthiness. The form of contract made quite clear that Shogun Finance's intention was to accept an offer made by the real Mr Patel, and no one else. The appellant's attempt to analyse the matter as a face to face contract (effected through the agency of the car salesman) was accepted by Sedley LJ but in my view it must fail, for the reasons stated by Lord Hobhouse. The appellant relied on the decision of this House in Branwhite v Worcester Works Finance Ltd [1969] 1 AC 552, but in my view it is against him: see especially the remarks of Lord Upjohn at page 578.
192.   In the course of argument some time was spent on the decision of the Court of Appeal in Hector v Lyons (1988) 58 P & CR 156. In that case a man was negotiating to buy a house and had discussions, both on the telephone and face to face, with the seller. He then instructed solicitors to act on the basis that his son (who was under full age and shared three of his father's four names) was to be the purchaser of the house, and the solicitors apparently agreed to proceed on that basis. The father signed the contract, although not with his normal signature. The Court of Appeal upheld the deputy judge's refusal of the father's claim for specific performance. That result can readily be supported, if only on the "clean hands" principle. But the reasoning in the case is difficult, very largely because the facts are not only unusual but also obscure. The father gave evidence most of which was rejected as false, and the solicitors instructed by the father did not give evidence. But I am of the clear opinion that the decision does not assist the appellant in this case. So far as material, it confirms that the principle as to face to face negotiations does not apply to a written contract identifying the parties (as was requisite in a contract for the sale of land both before and after the coming into force of the Law of Property (Miscellaneous Provisions) Act 1989).
193.   For these reasons, and for the fuller reasons given by Lord Hobhouse, I would dismiss this appeal.