Robert and Maria Cherry sought a declaratory judgment based on breach of contract or mutual mistake after discovering mold in a house that they purchased from Brian and Rebekah McCall.
A contract can be rescinded on the basis of mutual mistake.
Robert and Maria Cherry (Cherry) bought a home “as is” from Brian and Rebekah McCall (McCall). Cherry discovered that there was a walled-in room in the basement that was filled with mold and trash. Cherry sued McCall seeking a judgment for breach of contract or mutual mistake. Summary judgment was granted to McCall and Cherry appealed.
Whether a contract may be rescinded on the basis of mutual mistake?
Yes. Cherry agreed to bear the risk of mistake through the as-is clause of the contract. The judgment of the trial court is affirmed.
Mutual mistake may terminate a contract where both parties maintain a mistake of fact that affects the terms of the agreement. If a party has agreed to bear the risk of mistake, then that party cannot rescind the contract due to a mistake of fact.