Beachcomber Coins, Inc. v. Boskett
166 M.J. Super. 442, 400 A.2d 78 (N.J. Super A.D. 1979)
- Beachcomber bought a rare coin from a guy named Boskett for $500, but soon after found that the coin was a counterfeit.
- Beachcomber sued for rescission.
- The term rescission means that he wanted the sale declared void and his money returned.
- Beachcomber argued that there had been a mutual mistake.
- Bosckett argued that he didn’t realize that the coin was a fake either, so why should he bear the cost any more than Beachcomber?
- The Trial Court found for Boskett.
- The Trial Court found that it was customary for the buyer to make his own assessment of the genuineness of the article and to assume the risk if that investigation is faulty.
- Basically, it’s buyer beware. It is the buyer’s responsibility to determine if an item is worth the purchase price.
- The Appellate Court reversed.
- The Appellate Court found that a contract can be rescinded if there is a mutual mistake of an “essential fact.”
- The Court found that just because Beachcomber didn’t realize it was fake when they bought it, that doesn’t preclude rescinding the deal and putting everyone back to the status quo.
- In general, if both parties know that there some doubt about something and they still form a contract, the contract is not void just because things don’t turn out the way the parties want them to. “The risk of the existence of the doubtful fact is then assumed as one of the elements of the bargain.”
- However, this case didn’t involve conscious uncertainty. Both parties thought they knew the value of the coin, they never considered that there was a chance they could be wrong.
- It would be a different matter if one party knew that the coin might be counterfeit and the other one did not. In this case, both parties testified that they thought the coin was genuine.
- Compare to the similar case of Sherwood v. Walker (33 N.W. 919 (1887)), which involved a cow everyone thought was barren. The difference in that case was that the parties could never be 100% sure the cow couldn’t get pregnant, so there was an element of conscious uncertainty. Both parties were taking a risk that they could be wrong and (theoretically) factored that risk into their bargaining.
- In this case, both parties were 100% sure the coin was real, so they did not factor the risk it could be fake into their bargaining.