The BUSKLAW March Newsletter: So a Man Walks into a Yard Sale and...

 

(not the real bowl, but can you tell the difference?)

Buys a porcelain floral bowl for 35 bucks. As CNN reported here, the man then decides to have the bowl appraised, suspecting that it might be worth something. Turns out, the bowl was commissioned by China's imperial court during the 15th Century and is worth up to $500,000 when Sotheby's auctions it off this month. 

You are the seller's attorney, what do you do (besides getting your fee upfront, you'll see why). You check the well-established case law on what constitutes a unilateral mistake of fact. Based on the known facts of this case, you have bad news for your client.  

Here, the seller mistakenly underpriced the bowl, a unilateral mistake. Generally, courts are reluctant to void a contract when only one party is mistaken. But you forge ahead anyway and sue the buyer (before the auction) to rescind - or set aside - the contract. You tell the court that your client will gladly return the $35 purchase price in exchange for the bowl. How can that not be fair? 

The judge frowns at you. Fair or not, she knows who should win unilateral mistake cases. But the court decides to take the matter further. So she asks the buyer if he happens to be an antique collector. 

Scenario 1 (apparently the case here): Buyer says, "no," he just likes to frequent yard and garage sales for "good deals." Whatever strikes his fancy for a few bucks. Not knowing the difference between a porcelain bowl from the Ming Dynasty and a porcelain bowl from Wal-Mart, he decided to spend a pittance, hoping that his purchase would pay-off. He lucked out. So the judge dismisses the case, your seller/client goes home, cursing that "the law is an ass."

Scenario 2 (alternate reality): Buyer says, after repeated questioning about his antique-collecting background, "kind of." The judge says, "don't waste my time, what do you mean by that?" The buyer says that he's an antique collector and occasional dealer for fun and profit. And while he doesn't know much about Ming Dynasty porcelain bowls, he thought that he couldn't go wrong for a measly $35 purchase. You sense what the judge is thinking (making a mental note to contribute to her next campaign for re-election to the bench) and are quick to run with this approach. "Your Honor, this not a typical yard sale bargain-hunter but rather an antique collector who likely knew that this bowl was undervalued. The deal should be set aside. We'll refund the $35 purchase price, and he can give us back the bowl." The court rules in your favor, your client gets the bowl, and you decide too late that you didn't charge your client near enough for the excellent result. And now the buyer goes home, mumbling that "the law is an ass." 

Consider this. Where contract law stops, the application of The Golden Rule should begin: "treat others as you want to be treated." The contracting parties in this unilateral mistake case should act in accordance with The Golden Rule. They can agree to have Sotheby's auction off the bowl, deduct the commission from the proceeds, and split the windfall equally.

Let the law be an ass, it matters not if the parties involved behave as they should.    

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