Mike is given a bottle of wine as a gift. Josh, a neighbour, sees it and recognizes it as a very rare bottle. Knowing that Mike doesn't drink, Josh offers him $300 for it, which he believes to be a fair price. Mike happily agrees. Later, when Josh is looking up the price of the bottle on eBay, he realizes that it is not a valuable bottle of wine at all. He had confused it with another vintage. Josh, who is taking a law class, wonders whether or not he could have the contract set aside. Which of the following statements is true?
A) It will automatically be set aside on the basis of the doctrine of mistake.
B) It will only be set aside if Josh's mistake rendered the contract illegal.
C) It is unlikely to be set aside unless Josh could show that it would be unfair or unjust to enforce it.
D) The contract will only be set aside if Josh's mistake was the result of willful blindness.
E) A contract can never be set aside where a mistake has been made.

Question

Quizplus · Accepted Answer

A mistake alone is not enough to set aside a contract. If the mistake was mutual, it may be possible to set aside the contract. However, in this case, it was only Josh who made the mistake. As such, the contract will only be set aside if it would be unfair or unjust to enforce it. In this case, it is unlikely that the contract will be set aside as there was no misrepresentation or fraud on Josh's part, and Mike willingly agreed to the price.

Mike Is Given a Bottle of Wine as a Gift