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Bert Allen Toyota, Inc. v. Grasz - 909 So. 2d 763 (Miss. App. 2005)

Rule:

The remedy for unilateral mistake is rescission. However, recission on the grounds of unilateral mistake is inappropriate unless a four-part test is met. First, the mistake is of so fundamental a character that the minds of the parties are not, in fact, met. Second, there is no gross negligence on the part of the plaintiff. Third, no intervening rights accrue. Fourth, the parties may still be placed in status quo. In addition, as a general proposition, equity will not act to rescind a contract where the mistake is induced by the negligence of the party seeking rescission.

Facts:

Horst Grasz reached an agreement with Bert Allen Toyota to buy a 2003 Toyota Tacoma for $16,971, less a $1,000 rebate, plus taxes and fees. The sales manager entered these numbers into a computer, which displayed a final price of $15,017.50. If the computer had made the computations correctly, the price would have been $17,017.50. Grasz attempted to write a check for $15,017.50 immediately, but the sales manager requested only a $500 deposit because the truck would have to be specially manufactured. The sales manager manually wrote on the sales agreement, "$14,517.50 due at delivery." The truck arrived at the dealership approximately four weeks after the parties agreed to the price. At that time, the sales manager discovered the computational error, and he insisted that Grasz pay an additional $2,000 over and above the agreed-upon price in order to take delivery of the truck. Grasz refused to pay the higher price and filed a complaint in the Harrison County Chancery Court. The chancellor entered judgment in favor of Grasz, finding that the sales agreement to purchase the truck for $15,017.50 was a contract that was clear and unambiguous on all terms, including price. The chancellor granted Grasz's request for specific performance, ordering Bert Allen Toyota to supply an unused 2003 Tacoma for the price of $15,017.50. Bert Allen Toyota appealed, arguing that there was no meeting of the minds between the parties, and that assuming that there was, the mistake as to the price was one which warranted reformation or rescission of the contract.

Issue:

  1. Was there a meeting of the minds between the parties such that an enforceable contract was entered?
  2. Did the mistake in question as regards the price of the transaction warrant the reformation or rescission of the contract?

Answer:

1) Yes. 2) No.

Conclusion:

The appellate court found that Bert Allen Toyota knew the invoice price of the truck, the profit margin, the amount of the rebate, and that Grasz was a tough negotiator. According to the Court, Bert Allen Toyota also knew that computer had miscalculated sales figures in the past. Thus, the chancellor's finding that the parties had reached a meeting of the minds on the price of the truck was supported by the evidence. The appellate court also rejected Bert Allen Toyota’s argument that there was a mutual mistake for which recission was justified as, in such a marketing type of case, a customer was expected to look at the "bottom line." Further, there was no unilateral mistake because the dealer failed to use reasonable care. However, given the circumstances (an equivalent truck may have no longer been available), specific performance was not a proper remedy. A remand was required for a proper equitable remedy.

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