Brief Fact Summary. Shortly after purchaser bought property for the purpose of generating rental income, the property was condemned as unfit for human habitation.
Synopsis of Rule of Law. Whether rescission is the proper remedy to a mutual mistake should be determined on a case-by-case basis.
The erroneous belief of one or both of the parties must relate to a fact in existence at the time the contract is executed.View Full Point of Law
Issue. Is rescission a proper remedy when a contract was formed due to mutual mistake?
Held. No, in the instant case. Judgment reversed.
Whether rescission is the proper remedy to a mutual mistake must be determined on a case-by-case basis
The court found that the mistake affected the essence of the contractual consideration, as both parties thought they were contracting to purchase and sell income-generating property.
The court also found that rescission is not proper in this case because the parties did not equally share the blame. Instead, the “as is” clause in the purchase and sale agreement shifted the risk to the purchaser.
Discussion. The court began its analysis by examining the landmark “barren cow” case, where mistake was defined as “not of the mere quality