Essay on "Legal Case Analyses and Application Bilateral (Mutual)"

Essay 3 pages (1060 words) Sources: 3

[EXCERPT] . . . .

Legal Case Analyses and Application

Bilateral (Mutual) Mistake -- Inkel v. Pride Chevrolet-Pontiac Inc.

In this case, the buyer relied to his substantial detriment on a mistake in calculations made by the seller with respect to the total price of the sale of a motor vehicle. Specifically, Pride miscalculated the allowable trade-in value of the used vehicle offered by Inkel toward the price of a new vehicle purchased from Pride. Subsequent to the conclusion of negotiations and payment for the vehicle, Pride demanded a substantial additional sum of money relying on a provision in its contract holding the buyer responsible for any mistake in connection with the transaction as well as on the legal doctrine that a bilateral (mutual) mistake of facts or circumstances between the parties to a contract is justification for nonperformance and rescission of the contract.

The court held that a mistake made by one party alone could not support a justification for nonperformance or rescission by the party responsible for the mistake. Moreover, the fact that the other party might have benefited from or taken advantage of the mistake was insufficient to support the contention that the mistake was mutual. The mistaken party cannot seek to rescind the contract without extraordinary circumstances such as an active role on the part of the non-mistaken party to conceal or facilitate the mistake.

This is an important concept, particularly in used car sales, because sellers could otherwise take advantage of their superior knowledge by purposely undervaluing trade-ins. If mere knowledge of the mistake by the other party were sufficient to render such mistakes "mutual" dealerships would be able to use the mileage clause in the original lease to support the mutuality of mistake theory for this purpose routinely.

Substantial Performance and Materiality of Breach -- Jacob & Youngs Inc. v. Kent

In this case, the plaintiff sought final payment for a dwelling constructed on behalf of the defendant. The defendant had refused to pay because he discovered that the plaintiff had used a different brand of piping than that specified in their contract. Through his architect-agent, the defendant had insisted that the plaintiff redo the work to replace the piping to conform to the contract. The court held that the demand was unreasonable because the difference in piping quality was nominal or negligible in the first place. Meanwhile, the costs associated with ripping apart the construction to replace the piping far exceeded the value of the difference in piping, particularly in light of the tremendous cost of the work that would entail.

This concept is important because otherwise, a party to a contract could complain, in bad-faith, anytime an immaterial fact deviated one iota from the literal content of a contract. The purpose of contractual specificity is to enable parties to reach a mutual understanding about agreements and to support good-faith claims based on breaches that are material and reasonable. Deviations from specified contractual terms are not intended to permit recoveries that grossly exaggerate the material effect of inconsequential deviations. Otherwise, parties to contracts could purposely insert highly specific clauses for the express purpose of reneging on their obligations such as by requiring the use of a particular name… READ MORE

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