Lewis v Avery [1971] 3 All ER 907

INTRODUCTION 

Lewis sold his automobile with a bouncing cheque after falling for a Richard Green impostor. Then the rogue sold It to Averay, who was a legitimate buyer. Lewis filed a lawsuit to recover the car, claiming that identity theft rendered his contract null and invalid. The Court of Appeal decided in Averay’s favour, giving priority to business stability. Contracts signed in person were regarded as legitimate despite the fraud, shielding gullible purchasers like Averay. Despite Lewis’s defeat, this case changed contract law by establishing a strong presumption of validity for face-to-face contracts, even in cases of misrepresentation, and by igniting discussion about victim protection and maintaining business certainty. 

FACTS OF THE CASE

1. Mr. P.H. Lewis, a postgraduate student, wanted to sell his car. He advertised it in a newspaper and received contact from a man who introduced himself as “Richard Green.” This “Green” was, in fact, a rogue imposter impersonating the famous actor of the same name.
2. The Imposter and Mr. Lewis agreed on a price of £450 for the car. The payment method was discussed, and “Green” wanted to pay by cheque. Mr. Lewis, cautious due to the large sum, requested identification before accepting the cheque. The imposter presented a pass for Pinewood Studios with his name and photograph, further enhancing the deception. 
3. Believing he was dealing with the genuine Richard Green, Mr. Lewis handed over the car in exchange for the cheque. 
4. However, the cheque bounced, and the “Green” individual disappeared. Soon after, the real Richard Green revealed the impersonation, exposing it as a fraudulent act.
5. Meanwhile, the imposter had sold the car to Mr. G.T. Averay for £200. Mr. Averay was unaware of the fraud and believed he had purchased the car legitimately.
6. Faced with a lost car and a worthless cheque, Mr. Lewis filed a lawsuit against Mr. Averay to reclaim the vehicle. 
7. He argued that the contract with the imposter was void due to a fundamental mistake as to identity.

ISSUES RAISED

1. Whether the contract between Mr. Lewis and the imposter could be considered valid despite the misrepresentation of identity. 

CONTENTIONS OF APPEALENT

1. Mr. Lewis argued that the contract with the imposter was void due to a fundamental mistake as to his identity. He believed he was dealing with the real Richard Green, not a fraudulent imposter. This mistake, he claimed, went to the root of the contract’s formation and rendered it invalid.
2. Mr. Lewis asserted that the imposter actively misrepresented his identity by using the name “Richard Green” and presenting the forged Pinewood Studios pass. He relied on this misrepresentation in good faith, entering the contract under false pretenses.
3. Mr. Lewis urged the court to return the car to him as the rightful owner. He contended that the genuine sale never occurred and the fraudulent transaction did not transfer ownership.
4. Mr. Lewis invoked the concept of operative mistake, arguing that the identity of the other party was a key factor in his decision to sell the car. The mistake on this essential element rendered the contract void ab initio (from the beginning).

CONTENTIONS OF REPONDENT

1. Mr. Averay presented himself as a bona fide purchaser who bought the car in good faith from the imposter. He was unaware of any fraud or misrepresentation at the time of purchase.
2. Mr. Averay argued that estoppel prevented Mr. Lewis from reclaiming the car. By trusting the imposter and handing over the vehicle, Mr. Lewis created the circumstances that allowed the fraud to happen. He argued that Mr. Lewis should be estopped from denying the imposter’s authority to sell the car.
3. Mr. Averay contended that he purchased the car at a fair market value (even slightly below), negating any claim of unfairness or bad faith on his part.
4. Mr. Averay acknowledged the possibility of fraud but suggested alternative remedies like compensation from the imposter instead of disrupting his possession of the car.

JUDGEMENT

The appellate court ruled in favour of the accused. No matter who was standing in front of him, the claimant was assumed to have intended to enter into a contract with them. The court did not find any evidence in the record to refute this assumption. Therefore, one of the contract’s core terms was understood to be true. The contract may be voidable only if there had been misrepresentation. 

ANALYSIS

The case established a strong presumption for the validity of contracts formed face-to-face, even if one party misrepresents their identity. This protects innocent third parties relying on the apparent transaction. The decision applies mainly to face-to-face transactions. Where negotiations occur remotely or online, courts might be more receptive to claims of mistaken identity.

CONCLUSION

In conclusion, the Court of Appeal’s judgment prioritized stability and commercial certainty by upholding the sale despite the mistaken identity. This established a strong presumption of validity for face-to-face contracts, even in the presence of misrepresentation. While protecting bona fide purchasers like Averay, the decision left some feeling that victims like Lewis deserved greater legal protection from deception. The case continues to spark debate about the balance between protecting victims and ensuring commercial certainty, especially in an evolving digital landscape where face-to-face interactions are not always the norm. The case serves as a valuable reminder of the complexities of contract formation and the importance of legal vigilance when entering into any agreement, whether online or offline. 

REFERENCES

1. https://ipsaloquitur.com/contract-law/cases/lewis-v-averay-no-1/
2. https://www.casemine.com/judgement/uk/5a8ff87960d03e7f57ec109d/amp
3. https://careerinlaw.net/uk/case-summary-lewis-v-averay-1972-1-qb-198
4. https://en-academic.com/dic.nsf/enwiki/10429389
5. https://quizlet.com/gb/690549328/misrepresentation-and-mistake-flash-cards/

This Article is written by Abraham Mutazu, law student at Lovely Professional University ; Intern at Legal Vidhiya.

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