MAR-CHAR ENTERPRISES, INC., ETC., ET AL., APPELLANTS,
v.
CHARLIE'S THE LAKES RESTAURANT, INC., ET AL., APPELLEES
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Mar-Char Enterprises, the purchasers of a restaurant, sought rescission of the sale agreement after discovering the restaurant's liquor license was not available or transferable as the parties had assumed. The court held that the parties' mutual mistake regarding the liquor license—which was material and vital to the transaction—entitled the purchasers to rescission despite the sellers' argument that subsequent foreclosure prevented restoration of the status quo.
The trial court erred in denying rescission. A mutual mistake regarding a material and vital term of the contract—here, the availability and transferability of the liquor license—entitles the purchasers to rescission. The foreclosure of the first purchase-money mortgage does not preclude rescission because the original seller and mortgagee reacquired title, and the trial court can fashion ancillary remedies such as an accounting to address any inability to restore the exact status quo.
[1] A contract may be rescinded when the parties labor under a mutual mistake concerning a material aspect of the transaction.
[2] A mutual mistake regarding the availability and transferability of a liquor license is a material mistake sufficient to warrant rescission of a restaurant sale agreement.
Previewing 2 of 4 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“the parties to the instant sale of a restaurant labored under a mutual mistake concerning the availability and transferability of a full-scale liquor license for the premises which was material, indeed vital, to the transaction”
Establishes the factual basis for rescission—that both parties shared a fundamental misunderstanding about the liquor license that was essential to the deal.
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Join FLexlaw to unlock all legal intelligenceMar-Char Enterprises agreed to purchase a restaurant from Charlie's The Lakes Restaurant, Inc. Both parties operated under the mutual assumption that …
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PER CURIAM.
Since the record demonstrates without dispute that the parties to the instant sale of a restaurant labored under a mutual mistake concerning the availability and transferability of a full-scale liquor license for the premises which was material, indeed vital, to the transaction, we hold that the trial court erred in denying the appellant-purchasers’ prayer for rescission of the agreement. Crown Ice Machine Leasing Co. v. Sam Senter Farms, Inc., 174 So. 2d 614 (Fla.2d DCA 1965), cert. denied, 180 So. 2d 656 (Fla.1965); see, Langley v. Irons Land & Development Co., 94 Fla. 1010, 114 So. 769 (1927); 9 Fla.Jur.2d Cancellation Reformation and Rescission § 29 (1979). The judgment below is there fore reversed and the cause remanded for further proceedings consistent herewith.1
. The appellee-sellers claim that the foreclosure of a first purchase-money mortgage on the property, upon which they were the mortgagors (they took back a second purchase-money mortgage in the transaction involved in this case), precludes rescission on the theory that the status quo cannot be restored. See 9 Fla.Jur.2d Cancellation Reformation and Rescission § 34 (1979). In the light, however, of the fact that the original seller and first purchase-money mortgagee, reacquired possession and title at the foreclosure sale, and of the trial court's ability to order an accounting and fashion other ancillary remedies if necessary, we find no merit in this contention. See O’Donnell v. Novak, 183 So. 2d 884 (Fla.3d DCA 1966); Janeczek v. Embry, 330 So. 2d 837 (Fla.3d DCA 1976); Pirrello v. Poulter, 354 So. 2d 468 (Fla.3d DCA 1978); compare, Smith v. Chopman, 135 So. 2d 438 (Fla.2d DCA 1961).
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By
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Braman Dodge, Inc. v. Smith, 515 So. 2d 1053 (Fla. 3d DCA 1987)…st the equities between the parties. Rescission of a contract is an adequate remedy where the parties to the contract labor under a mutual mistake which is material to the transaction. Mar-Char Enter., Inc. v. Charlie’s The Lakes Restaurant, Inc., 451 So. 2d 930 (Fla. 3d DCA), review denied, 461 So. 2d 113 (Fla.1984); Crown Ice Machine Leasing Co. v. Sam Senter Farms, Inc., 174 So. 2d 614 (Fla. 2d DCA), cert, denied, 180 So. 2d 656 (Fla. 1965); 9 Fla.Jur.2d Cancellation Reformation and Rescission § 29 (1979…
Authorities Cited
- Langley v. Irons Land & Dev. Co., 94 Fla. 1010 (Fla. 1927)
- Crown ICE Mach. Leasing Co. v. SAM Senter Farms, Inc., 174 So. 2d 614 (Fla. 2d DCA 1965)
- Smith v. Chopman, 135 So. 2d 438 (Fla. 2d DCA 1961)
- Borden v. Sakolsky, 180 So. 2d 656 (Fla. 1965)
- Crown Ice Mach. Leasing Co. v. Sam Senter Farms, Inc., 180 So. 2d 656 (Fla. 1965)
- Janeczek v. Embry, 330 So. 2d 837 (Fla. 3d DCA 1976)
- O'Donnell v. Novak, 183 So. 2d 884 (Fla. 3d DCA 1966)
- Linnea Snyder v. Metro. Dade Cnty., 354 So. 2d 468 (Fla. 3d DCA 1978)
- Pirrello v. Poulter, 354 So. 2d 468 (Fla. 3d DCA 1978)