In Florida, can you have a valid contract if the buyer believes he or she is buying a particular piece of property while the seller thinks he is selling another piece of property?

Posted By on June 22, 2016

Last Update: 7/18/18

According to the case law as of the date of this article, there is no contract because there was never a meeting of the minds of the parties as to the particular property being bought and sold.  In this scenario, Florida law will allow a party to rescind or cancel a contract based upon a substantial misunderstanding of the parties as to the subject matter of the contract, even if the mistake was entirely innocent on both sides and there was no fraud or misrepresentation.

See: Jones v. Walter C. Hardesty, Inc., 100 Fla. 155, 129 So. 497 (1930)

Many years ago, Eleanor K. Jones left her native country of Austria-Hungary to build a new life for herself in the United States.  She was 48 years old and could not speak English.

Mrs. Jones became a naturalized citizen, and learned to communicate a bit in English.  By the time she was 64 years old, she could understand some English, and she could read “small and simple” sentences.  She had made her home in DeLand.  Her sight was failing; in fact, she was almost blind.

However, she could still see well enough to inspect some property in order to buy it.  It was this purchase that became the subject of a lawsuit that reached all the way to the Florida Supreme Court and has remained a landmark case for almost one hundred years now.

Mrs. Jones was interested in Lot 4, Block 23, in the sub-division known as Rio Vista Sub-division. She inspected the property with the owner’s real estate agent and after her inspection, offered to buy the lot for $5,600.00.

Mrs. Jones offered $10.00 to bind the agreement (what we would now call her earnest money deposit).  She later paid $550.00 to the owners and provided a note payable, agreeing to pay them $300.00 per year until the total purchase price ($5,600.00) was paid.

After Mrs. Jones agreed to purchase the lot (while actually on it), the owner’s real estate agent came to her home in DeLand and presented written documents for her signature.  There was an agreement for the transfer of the deed and the creation of the notes.  The agent also procured the payment of the additional $500.00 of the purchase price.

Read: 5 Must-Have Prerequisites for A Valid Contract to Sell Residential Real Estate In Florida

At this time, the owner’s agent represented to Mrs. Jones that the description contained in the written contract was the description of the lot which she had inspected and agreed to purchase.  Unfortunately, the legal description was wrong.

The written documentation contained a legal description of another lot, Lot 4, Block 33 of the Rio Vista subdivision.  Mrs. Jones had never seen nor inspected this lot.  She had no intention of buying it:  she wanted to own Lot 4, Block 23.

Mrs. Jones did not know there was a problem with the legal description for around five months after she signed the documents and had paid the money to the owner’s agent.

She discovered that the lot described in the documents was practically worthless and definitely not at all suitable for her purposes.  Mrs. Jones demanded the agent return her money, and that the contract she signed be cancelled and rescinded.  He refused.

So, Mrs. Jones sued the owner’s agent, alleging the agent willfully, knowingly and intentionally made the misrepresentation of the description contained in the contract for the purpose of cheating and defrauding her. She wanted out of the contract and her money refunded.

The Florida Supreme Court agreed with Mrs. Jones.

The High Court based its ruling upon its earlier holding in Langley v. Irons Land and Development Company, 94 Fla. 1010, 114 So. R. 769, which discussed “Innocent Misrepresentation of Fact” controversies.

From that case:

“The real inquiry is not whether the party making the representation knew it to be false, but whether the other party believed it to be true and was misled by it in making the contract; and, whether the misrepresentation is made innocently or knowingly, the effect is the same. It is as conclusive a ground of relief in equity as a wilful and false assertion, for it operates as a surrise and imposition on the other party; and in such case the party must be held to his representations.

“Equity will grant relief by way of rescission or cancellation, from a contract or conveyance based upon a substantial misunderstanding of the parties as to the subject matter of the contract, though the mistake was entirely innocent on both sides and there was no fraud or misrepresentation.

“In a sale of real estate if one party believes he is buying a particular piece of property while the other thinks he is selling another piece, there is no meeting of minds so as to constitute a valid contract. Thus, for instance, if the purchaser desiring to inspect the property before completing the bargain, has a particular lot pointed out to him, which is satisfactory and which he supposes he is to acquire, but by accident or mistake he is shown the wrong lot, that is, a lot different from that which the vendor understands he is selling and which is described in the deed, it is a case in which equity may give relief on the ground of mutual mistake.”

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