STS Transport v. Volvo White case brief

 STS Transport v. Volvo White; (7^th Cir., 1985); CB 625; Notes 36

Mistake leading to rescission of K

• Facts: K for trading in trucks for 8 new ones. P discovers miscalculations made by D and refuses to perform K. P turns in trucks for trade in. Rest of deal not completed.
• Holding: No recovery. K not enforceable for unilateral mistake b/c of the big material difference in price and b/c mistake was latent. However, where mistake blatant, K cannot be rescinded b/c both parties should have noticed it.
• Rule: Court applies three prong test to allow rescission of K for unilateral mistake: (1) mistake must relate to material feature of K; (2) mistake occurs despite reasonable care; (3) other party must be placed in position occupied before K made.