Michigan Supreme Court - 417 Mich. 17
Tags: Mutual Mistake
In the 1982 Michigan Supreme Court case Lenawee County Board of Health v. Messerly, the Lenawee County Board of Health sued land sellers William and Martha Messerly, as well as land buyers Carl and Nancy Pickles, for violating county sanitation codes. The Messerlys had sold a piece of land with a three-unit apartment building to the Pickleses for $12,000 under an "as is" clause. The Pickleses planned to use the property for rental income. However, they soon discovered that the sewage system was defective, causing raw sewage to leak from the ground.
The Board condemned the property, seeking an injunction to prevent human habitation until the problem was resolved. The Messerlys filed a cross-complaint against the Pickleses for nonpayment, while the Pickleses counterclaimed, requesting contract rescission due to a mutual mistake (both parties were mistaken about the property's fitness for human habitation and rental income).
The bench trial found no fraud or misrepresentation. However, the Court of Appeals found a cause of action under a mutual mistake to a basic, rather than collateral, element of the contract.
The matter was brought before the state Supreme Court. The judgment below was reversed and no rescission of the contract was granted because the Pickles, had accepted the risk that the property might not be suitable for human habitation.
The case involves a land contract for a property with a defective sewage system that was condemned by the health board. The court found that a land contract was entered into under a mutual mistake of fact, as the septic system was defective before the contract was executed. The court held that the mistake made by the parties went to the very substance of the agreement, affecting the character of the animal for all time and for her present and ultimate use. The court distinguishes between mistakes that affect the essence of the consideration and those that only affect its quality or value. However, this distinction is not sufficient to invalidate a contract. Often, a mistake relates to an underlying factual assumption that directly affects value but also materially affects the essence of the contractual consideration. Such a mistake cannot be labeled as collateral. The court believes that a case-by-case analysis is the best approach to determine if rescission is appropriate when a mistaken belief relates to a basic assumption of the parties that materially affects their agreed performances. Rescission is not available if a party has assumed the risk of loss in connection with the mistake. The Restatement Contracts, 2d, § 152, also provides guidance on this issue. The Michigan Supreme Court must determine if there was a mistaken belief by one or both parties to the contract and its legal significance. The Court of Appeals concluded that the parties were mistaken about the income-producing capacity of the property.
LSD+ gives you access to over 50,000 case briefs, more than anyone else. Be the first to email us the website of a case brief product that offers you more case briefs and we'll give you a free year of LSD+.
Unlimited access. Read as much content as you want during your trial with no device limitations. Cancel any time during your trial and keep access for the full 14 days.
Lawyers and judges love to use big words. And Latin, for some reason.
Highlight a legal term in LSD Briefs and get an instant, plain English definition. Try highlighting contract or specific performance. No need to search or read through a list of definitions, simply highlight the words you don’t know and our LSDefine integration will instantly give you a definition to any of over 30,000 legal terms.
DeepDive allows you to explore legal cases like never before. DeepDive offers multiple levels of case summaries, which empowers you to quickly and easily find the information you need to stay on top of readings. Easily navigate through summary levels and click on any text to get more detail, all the way down to the original legal case text.
Our proprietary state-of-the-art system can instantly brief over 6,000,000 US cases. That means we can probably brief that case that your professor assigned last night when she sent you a poorly scanned pdf and told you to read every third paragraph. Or maybe she uploaded it to Canvas and didn’t really tell you to read it, but you know you probably should. Tenure does wild things to good people.
Study groups are a great way to learn and explore a case. LSD has chat rooms for each case to let you ask questions across the community and hear what other students struggled with and how they put it all together. Learn the key points of every case from other LSD+ users and share your knowledge with LSD High Points.
Don’t settle for mistakes in briefs that have been there for 10 years and never fixed. Find an issue or something missing from a brief? Down vote and we will make improvements. All of our case brief editors graduated from from T14 law schools.