The defendant had sold a car, taking as payment a cheque which was dishonoured; the plaintiffs later bought the car in good faith.
Held: The defendant was entitled to return of the car, even though the original purchaser had disappeared, and could not be notified. In these circumstances, communication to the police was sufficient. If it was impossible to communicate with the representor then then the representee rescinds by taking all necessary and reasonable steps to make it known that the contract is cancelled.
Sellers LJ said: ‘In such exceptional circumstances, it does not seem to me appropriate to hold that a party so acting can claim any right to have a decision to rescind communicated to him before the contract is terminated. (The other party) has to establish clearly and unequivocally that he terminates the contract and is no longer to be bound by it. If he cannot communicate his decision he may still satisfy a judge or jury that he had made a final and irrevocable decision and ended the contract.’ and ‘If one party by absconding deliberately puts it out of the power of the other to communicate his intention to rescind which he knows the other will almost certainly want to do, I do not think he can any longer insist on his right to be made aware of the election to determine the contract. In these circumstances communication is a useless formality. I think that the law must allow the innocent party to exercise his right of rescission otherwise than by communication or repossession. To hold otherwise would be to allow a fraudulent contracting party by his very fraud to prevent the innocent party from exercising his undoubted right. I would hold that in circumstances such as these the innocent party may evince his intention to disaffirm the contract by overt means falling short of communication or repossession.’
References: [1963] EWCA Civ 4, [1964] 1 All ER 290, [1965] 1 QB 525, [1964] 2 WLR 600
Links: Bailii
Judges: Sellers, Upjohn, Davies LJJ
Jurisdiction: England and Wales
This case cites:
- Cited – Reese River Silver Mining Co Ltd v Smith HL 1869 ((1869) LR 4 HL 64)
Rescission for misrepresentation is always the act of the party (representee) himself.
The fact that a person’s name continues to remain on a company’s register as member does not mean that it should have done so under the provisions of the . . - Cited – Scarf v Jardine HL 13-Jun-1882 ([1882] 7 AC 345, [1882] UKLawRpAC 17, )
If there has been a conclusive election by the plaintiffs to adopt the liability of one of two persons, alternatively liable, they cannot afterwards make the other liable. The two claims are mutually exclusive or impossible in law. To establish an . . - Cited – Longman v Hill 1891 ((1891) 7 Times Law Reports 639)
The question whether an election to rescind a contract has been validly exercised is always one of fact. . . - Cited – Financings Ltd v Stimson CA 17-Jul-1962 (, [1962] EWCA Civ 1, [1962] 3 All ER 386, [1962] 1 WLR 1184)
A purchaser signed a hire purchase agreement for a motor vehicle in early March 1961. A clause in the agreement provided that when the form was signed by the purchaser it would become binding ‘upon acceptance by signature’ of an officer of the . . - Cited – Campbell Discount Ltd v Gall 1961 ([1961] 2 All ER 104, [1961] 1 QBD 431)
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These lists may be incomplete.
Last Update: 22 September 2020; Ref: scu.262807
