Sale contract should be rescinded on the basis of mistake

Assignment Help Financial Management

Reference no: EM13976292

Nelson died in 1996 and Newman and Franz were appointed co-personal representatives of her estate. Newman and Franz hired McKenzie-Larson to appraise the estate’s personal property in preparation for an estate sale. McKenzie-Larson told them that she did not appraise fine art, and that if she saw any, they would need to hire an additional appraiser. McKenzie-Larson did not report finding any fine art, and relying on her silence and her appraisal, Newman and Franz priced the personal property and held an estate sale. Rice responded to the newspaper advertisement for the sale and attended it. At the sale, Rice bought two oil paintings for $60. Rice had bought and sold some art, but he was no expert. He had never made more than $55 on any single piece and he had bought many that turned out to be frauds, forgeries, or the work of lesser artists. He assumed that the paintings at the estate sale were not originals, given their price and the fact that the sale was being managed by professionals. Subsequently, Rice learned that the paintings were original works of Martin Johnson Heade. Rice sold the paintings on consignment at Christie’s in New York for $1,072,000. After subtracting the buyer’s premium and the commission, Rice realized $911,780 from the sale. Newman and Franz sued Rice, claiming that the sale contract should be rescinded on the basis of mistake. Will Newman and Franz win?

Reference no: EM13976292

Questions Cloud

Inventory control with respect to supply and demand : Discuss the importance of inventory control with respect to supply and demand. What benefit can tools such as ABC analysis and just-in-time controls provide for an organization? How can an enterprise resource planning system assist a firm with improv..

Lost annual income from savings on those refunds : If 400,000 people each receive an average refund of $2,400, based on an interest rate of 4 percent, what would be the lost annual income from savings on those refunds? Assume the savings could have been invested for the entire year

Use derivatives to manage risk and change risk exposure : Should firms hedge? A number of firms practice hedging and use derivatives to manage risk and change risk exposure. Some people argue firms should stick with their core business (i.e airlines should concentrate and on operating airlines). What do you..

Provide any group life insurance : Maria has just graduated from college, is single, and has no dependents except for her dog, Albert. She has accepted a job with a starting salary of $40,000 and she has $10,000 in student loan debt. Her employer doesn't provide any group life insuran..

Sale contract should be rescinded on the basis of mistake : Nelson died in 1996 and Newman and Franz were appointed co-personal representatives of her estate. Newman and Franz hired McKenzie-Larson to appraise the estate’s personal property in preparation for an estate sale. After subtracting the buyer’s prem..

What would his tax bill be if he makes the contribution : Assume Reginald Worthington, who pays 40 percent in income taxes, plans to contribute $100,000 to not for profit Ravenswood Community Hospital. Without the contribution, his tax bill would be $500,000. What would his tax bill be if he makes the contr..

Investors face when investing in government securities : Many times students will discuss how U.S government bonds are backed by the full faith and creit of the U.S government. Generally government bonds have always been assumed to not have any risk. Therefore, even though these bonds have been thought to ..

What was its year-end debt and assets ratio : Billings worth Company had earnings per share of $4 last year and it paid a $2 dividend. Total retained earnings increased by $12 million during the year, and the book value per share at year-end was $40. Billings worth has no preferred stock, and no..

Pay for it out of a flexible spending account : If Johnathan normally has $5,000 in child-care expenses each year, how much would she save if she could pay for it out of a flexible spending account, assuming her marginal tax rate is 25 percent?

User Account

All Pages