The unilateral mistake of one party to a contract may not be relied upon to relieve that party from its obligations under the contract where the party's own negligence and lack of prudence resulted in the mistake.
Plaintiff purchasers brought an action against defendant sellers for rescission of a contract of sale for real property on the ground of unilateral mistake in believing that a home was suitable for year-round living. The trial court entered judgment for plaintiffs, rescinded the contract, and awarded plaintiffs damages, less an amount for rent for the period of time they occupied the premises. Defendant appealed and the court affirmed. Plaintiffs cross-appealed the denial of punitive damages and the failure to determine whether an implied warranty of habitability had been breached.
Did the trial court err in finding that a unilateral mistake existed so as to allow rescission of the contract?
The doctrine of unilateral mistake was properly applied to allow rescission, that the mistake was a material part of the contract, and that its enforcement would be unconscionable. Plaintiffs exercised reasonable care in ascertaining the suitability of the home for winter living, and defendants could be put back in their prior position. Plaintiffs' claim for punitive damages was properly denied because there was no clear showing that defendants intentionally told plaintiffs that the home was suitable for year-round living. The doctrine of implied warranty of habitability was not applicable even though plaintiffs were the first purchasers who obtained the home from the builders because the house was at least nine years old and it had had a number of tenants.