(a) S, an owner of a small business obtained goods on credit from John by sending an order on letter paper headed with the name of well established firm B& Co. and giving an address for delivery near to the premises of real B& Co. If S has sold the goods to C, who took them in good faith, can John recover the goods from C?

(a) A person may escape his liability under an apparently               contract by proving that he contracted under a mistake of fact, and his mistake valid was so fundamental that it affected the root of the contract. Where a party to a contract is mistaken to the identity of the other party, this will nullify the contract (Cundy v Lindsay 1878).

It is quite clear from the facts of the problem that John had no intention to sell goods to S, who obtained the goods from him under an impression that the order was from real B & Co. John intended to enter into contract with ‘B & Co. and not with S. S therefore did not obtain valid title to the goods which he later sold to C. John would succeed to recover the goods from C, who must sue S for damages.