Perfect v. McAndrew - 798 N.E.2d 470 (Ind. Ct. App. 2003)

Rule:

The doctrine of mutual mistake provides that where both parties share a common assumption about a vital fact upon which they based their bargain, and that assumption is false, the transaction may be avoided if because of the mistake a quite different exchange of values occurs from the exchange of values contemplated by the parties. It is not enough that both parties are mistaken about any fact; rather, the mistaken fact complained of must be one that is of the essence of the agreement, the sine qua non, or, as is sometimes said, the efficient cause of the agreement, and must be such that it animates and controls the conduct of the parties.

Facts:

Buyer, McAndrew and sellers, Perfects entered a contract by which the buyer was to purchase a tract of land containing 81.1 acres. A survey indicated that the property contained 96.2815 acres, and the sellers attempted to renegotiate. The buyer rejected the new proposals. The buyer filed a complaint against defendant sellers for specific performance of a contract to sell real property. The circuit court granted specific performance to the buyer. The sellers appealed. On appeal, the sellers argued that the trial court erred in finding that the parties intended an in gross sale because, inter alia, the property was discussed in terms of 81.1 acres and the parties' actions demonstrated that the sale was based upon a price per acre. The appellate court found no evidence that the estimated acreage was the controlling inducement in the contract. The evidence indicated that the parties contemplated a sale of the entire tract for a lump sum. The sellers also argued that the trial court erred in finding that there was no mutual mistake. There was no evidence that the parties were mistaken about the actual tract of land to be sold. 

Issue:

Was there a mutual mistake between the parties?

Answer:

No.

Conclusion:

The doctrine of mutual mistake provides that where both parties share a common assumption about a vital fact upon which they based their bargain, and that assumption is false, the transaction may be avoided if because of the mistake a quite different exchange of values occurs from the exchange of values contemplated by the parties. It is not enough that both parties are mistaken about any fact; rather, the mistaken fact complained of must be one that is of the essence of the agreement, the sine qua non, or as is sometimes said, the efficient cause of the agreement, and must be such that it animates and controls the conduct of the parties. There was no evidence that the parties were mistaken about the actual tract of land to be sold. In fact, Clyde testified that "there wasn't any question about which piece of property [they] were dealing for. The only question was how many acres it really was. There was also no evidence that the exact acreage was the essence of the parties' agreement. As noted above, it was not enough that McAndrew and the Perfects were mistaken about the acreage. Rather, to constitute a mutual mistake of fact, the fact complained of must be one that is of the essence of the agreement and must be such that it animates and controls the conduct of the parties. Bowling, 756 N.E.2d at 989. Based upon the evidence, it cannot be said that the acreage of the property was the essence of the agreement or controlled the conduct of the parties. Consequently, it cannot be said that the trial court's finding that no mutual mistake of fact existed here was clearly erroneous.