The significance of this usually lies in the possibility of third party rights being acquired in good faith. For example, in
Cundy v Lindsay (1878), a
fraudster using the name Blenkarn posed as a retailer and induced Lindsay & Co to deliver 250 dozen linen handkerchiefs to him. Blenkarn then sold the handkerchiefs on to an innocent third party, Cundy, but Lindsay was never paid. Lindsay, claiming ownership of the handkerchiefs, sued Cundy for their return. If the contract of sale to Blenkarn was held to be
voidable for fraud, then Lindsay & Co would only have recourse against the insolvent Blenkarn. However, if (as was held) the
contract of sale was
void ab initio, then the title did not pass from Lindsay to Blenkarn in the first place, and Lindsay could claim back the handkerchiefs from Cundy as their property. Cundy was left with only a claim against the insolvent Blenkarn. In every case, third parties involved with
bad faith in void or voidable contracts not only are affected by nullity, but may also be liable for statutory damages. However, the right to avoid a voidable transaction can be lost (usually lost by delay). These are sometimes referred to as "bars to
rescission". Such considerations do not apply to matters affected by absolute nullity, or void
ab initio. ==See also==