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In this case, a seller has mistakenly offered a ...

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In this case, a seller has mistakenly offered a collectible, one-of-a-kind art object for sale for $1000. The buyer accepts, a contract is formed, when the seller realizes the error and, right after the sale, apologizes to the buyer and says item is not for sale. The buyer's payment is immediately returned and no goods are exchanged, however, the buyer insists that the contract remains binding and threatens legal action to recover damages for "the actual value" of the object, whatever that means. The object is from the seller's personal collection and was never intended for sale. There are no receipts or written provenance to indicate worth, if any. But assuming the buyer presses the case, what can they hope to recover? How can plaintiff ascertain "actual" value to claim specific damages beyond the sales price, when they never held possession or title? Can an honest mistake void a contract? What is this seller's liability, and/or remedy? Please advise.
Submitted: 6 years ago.
Category: Business Law
Expert:  Law Girl replied 6 years ago.

DearCustomer

Thank you for your question.

Unfortunately, an honest mistake one party's end does not void a contract. However, if both parties are mistaken to where there can be no meeting of the minds, then the contract is void for lacking consent.

The buyer may be able to initiate a legal action for specific performance (requiring a party to a contract to perform the terms of the contract when he has refused to fulfill his obligations). Specific performance is usually only awarded if the buyer cannot get a substitute good or it will be very difficult to do so. This is seen in a case like the present, where the item is a one-of-a-kind such as a piece of art.

Please let me know if you have any other questions, or require clarification of this matter. Otherwise please hit "ACCEPT", so I may receive credit for my response. Tips and feedback are also appreciated.

Good Luck!

-KAT

Customer: replied 6 years ago.
Reply to Law Girl's Post: Sorry, I had misstated one key point. The object is not from the seller's personal collection, but from the personal collection of a third party who does not wish to sell it. In other words, the seller had no right to sell the item in the first place. In this case, would the contract be considered null and void? Is the burden of proving title up to the buyer, or the seller? Again, there is no written title.
Expert:  Law Girl replied 6 years ago.

If the "seller" had no authority to enter into the contract, then the buyer may actually have a cause of action for misrepresentation. In which case, the buyer maybe able to sue for any damages that resulted from the misrepresentation. It is hard to know what those damages would be, for example, if the buyer missed out on an opportunity to obtain a similar piece for a reasonable, then that could be the measure of damages. The measure of damages will be very factually specific.

Ultimately the burden of proving title will be left up to the seller (who will be using it as a defense) in a contract dispute or the buyer in a misrepresentation dispute.

Depending on the sellers representations, trying to sell a piece of art that does not belong to you, may also constitute fraud. In which case, the buyer may be able to sue for damages and punitive damages.

 

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