TTTBE #22: Early Answer for Patrons! (Patreon)

This question asked if a savvy art dealer could buy a priceless masterpiece (possibly even a Kandinsky!) at a yard sale for the laughably low price of $10 knowing that the painting was really worth $100,000 or more.  Specifically, the question asked for the answer pursuant to the "Restatement of Contracts," which is a handbook for lawyers that summarizes the common law.

Thomas picked answer "B," which said that the contract is valid, finders keepers, losers weepers.

The most popular other answer was "C," which said that no, the swindled party is allowed to rescind a contract under facts like these.

The correct answer is, in fact, "C."  This question tested the notion of the "unilateral mistake" in a contract.  Here, the mistake was the seller's, obviously.    The Restatement (Second) of Contracts § 153(a) (1981) provides that where one party has made a unilateral mistake, the contract can be rescinded if (1) enforcing the transaction would be grossly unfair, oppressive, or at least, would result in an unconscionably unequal exchange of values; and (2) rescission would work there is no substantial hardship on the other party.

Those two conditions are met here; the value of the transaction is grossly disproportionate, and rescinding the contract would only deprive the Kandinsky expert of an unjust windfall.  Therefore, the court very likely would not grant the defendant's motion to dismiss.

Thomas is now 11-for-21 (52.4%) and is on a two-question losing streak.

Stay tuned for another new question when Question #23 drops along with Friday's Epsiode 68!