Mistakes as to Identity

Question 1

Define mistaken identity?

Answer 1

Mistaken Identity – a wrongdoer practices a deception cleverly designed to deceive an innocent person into parting with their goods. Once the wrongdoer obtains possession of the goods he generally sells the goods on to a innocent third party.
o They are a species of unilateral mistake and are void ab initio.

Question 2

Shogun Finance Ltd v Hudson, 2003
(Test for Mistake as to Identity)

Answer 2

Test to establish a mistake as to identity: (4 things to prove)
1) A intended to contract with a specific person (B).
○ The common example of this is someone giving you credit (a cheque) that is made out from a specific person and then it bounces.
○ Example of this not being the case: a shopkeeper at a store impersonally accepts a cheque from a stranger to buy a bottle of milk.
2) A must show that the rogue (B) knew that A was mistaken as to his identity.
○ B presenting himself with fake ID essentially implies that A was tricked and B knew it.
3) At the time of the contract between A and B is made, A needs to show that the identity of the person they contracted with was of crucial importance to the nature of this deal.
○ Identity of B is of crucial importance when credit is in play.
4) The mistaken party (A) must have taken reasonable steps to verify the identity of B.
- If A is able to prove these four things, then A has made a mistake as to identity, the contract between A and B is rendered void ab initio and void at common law. A can then sue C to get their property back.
- If A is unable to prove these four things, then the contract between A and B remains valid, and C gets to keep the property.