Purchase Contract and a Mutual Mistake

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Submitted By sweyland
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Purchase Contract and a Mutual Mistake
Sheldon Weyland
Southern New Hampshire University

Purchase Contract and a Mutual Mistake
According to the prompt Josh Hartly and a salesperson negotiated an automobile purchase together. As part of the negotiations, Mr. Hartly, expressed concerns that a 3.9 liter V-6 would not be as fuel efficient as the 3.2 liter. After Mr. Hartly concluded negotiations with the salesperson, he signed a contract to purchase a car with a 3.2 liter V-6 engine. Following, the creation of the purchase agreement, it was discovered that the manufacturer had replaced both 3.2 liter and the 3.9 liter engines. Both engines were replaced by a newly designed 3.5 liter engine. However, neither Mr. Hartly nor the salesperson were aware of the change prior to entering into the purchase contract.
This short paper will begin by examining the ability of these parties to rescind the contract due to mutual mistake. Next, the ethics and application of the Uniform Commercial Code (U.C.C.) will be further explained. Following these objectives, and in review of overall context of contract law, I will determine if any winners or losers are created when a contract is rescinded based on mutual mistake of fact. Finally, I will provide my own thoughts regarding the contract created between Mr. Hartly and the salesperson.
Both Mr. Hartly and the salesperson, entered into a contract under a mutually mistaken understanding concerning on a basic assumption of fact, engine size, constituting a mutual mistake. According to the text, the contract would only be voidable by the adversely affected party, Mr. Hartly, only if the mistake has a material effect on the agreed exchange (Twomey & Jennings, 2013, p. 273). In the Browning v. Howard (1998) case the court stated, “Where parol evidence shows that both parties are mistaken about a basic assumption underlying a…...

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