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51. Would the heir be likely to prevail in an action to rescind the contract?
An heir hired an appraiser to appraise various items of personal property that she had inherited, including an original oil painting. The appraiser told the heir that he had no expertise in appraising art and recommended that she hire an art appraiser to value the painting. The heir, doubting that the painting was valuable, declined to follow the appraiser's advice and decided to sell the painting at a yard sale. She set the price at $100, assuming that this price reflected the painting's approximate value. A neighbor, who knew nothing about art, purchased the painting from the heir at the asking price. The neighbor and the heir later discovered that the painting was worth over $900,000.
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B is incorrect. Rescission is available only when the non-mistaken party knows or should have known about the unilateral mistake. Here, the neighbor knew nothing about art and therefore could not have known about the value. It was the heir who bore the risk of mistake, as she treated her limited knowledge as sufficient. Mutual mistake is not a defense when the party who is mistaken bore the risk of that mistake.
C is incorrect. If the mistake was unilateral, the mistaken party will not be able to rescind unless the non-mistaken party had reason to know of the mistake, and the effect of the mistake makes the enforcement of the contract unconscionable. Here, the neighbor had no reason to know of the mistake. Therefore, whether the effect of the contract is unconscionable is not relevant.
D is incorrect. A contract is voidable by mutual mistake only if the adversely affected party did not bear the risk of a mistake. Although it is true that the parties were mutually mistaken, it was the heir who bore the risk of mistake.