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No $4.75 Million Discount on a Diamond: Florida Court of Appeals Allows Contract Rescission for Unilateral Mistake

ContractDispute

On August 1st, 2018, the Third District Court of Appeal for the state of Florida issued an important decision in the case of Thomas DePrince v. Starboard Cruise Services. This case, which made some national headlines, involved a cruise ship passenger who was accidentally sold a diamond at a 95 percent discount.

The core legal issue at dispute in this case is what exactly constitutes a ‘unilateral mistake’ for the purposes of Florida contract law. Florida has well developed case law that states that a contract can be rescinded when a unilateral mistake occurred. However, there has been considerable confusion over what qualifies as a unilateral mistake. Here, our top-rated Miami business litigation attorneys provide an overview of the Third District Court’s ruling in this case.

Case Analysis: Thomas DePrince v. Starboard Cruise Services 

The Unilateral Mistake 

In 2013, Mr. DePrince was a passenger on a luxury cruise ship operated by a company called Starboard Cruise Services. Upon visiting a jewelry store on the ship, he expressed interest in purchasing a very large diamond. Due to the fact that the specified diamond was not on board the ship, the manager store reached out to the company’s corporate office regarding the inquiry.

Mr. DePrince was quoted a price of $230,000 – $240,000 for the diamond. The manager on board, having never dealt with this large of sale, gave this price to the customer as the total price for the purchase. What the manager did not realize was that this was the per karat price, not the total price. Mr. DePrince purchased a 20 karat diamond for this price with an American Express card. When the company recognized the mistake (realizing that the intended price was actually nearly $5 million), it quickly notified Mr. DePrince of the error and reversed the charges on his credit card. 

The Legal Dispute  

The core legal question at stake in this case was relatively straightforward: Does Florida’s general unilateral mistake doctrine required some type of action to induce the mistake to be applicable? There is no question that contract rescission is a valid remedy when a unilateral mistake occurs. However, a question does exist regarding what the party who made the mistake has to prove to be able to access this remedy.

Mr. DePrince argued that the party that made the mistake (Starboard) must prove that it was induced, in some manner, into making the error. Starboard countered that there is no such requirement under Florida law. In assessing the legal issue, the Third District Court of Appeal agreed with the defendant’s claim. Florida law does not require that a party prove that they were induced into making a unilateral mistake in order to be eligible to rescind a contract.

Speak to our South Florida Contract Dispute Lawyers Today

At Pike & Lustig, LLP, our Florida business law attorneys handle all aspects of contract law cases. Whether you need guidance drafting, reviewing, negotiating, or litigating an agreement, we can help. For immediate legal guidance, please contact us today at our West Palm Beach (561-291-8298) law office or our Miami law office (305-985-5281).

Resource:

3dca.flcourts.org/Opinions/3D16-1149.rh.pdf

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