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POSSIBLE APPLICABILITY OF THE CONSCIOUS IGNORANCE DOCTRINE PRECLUDED SUMMARY JUDGMENT IN THIS MUTUAL MISTAKE ACTION.

The First Department, over an extensive dissent, determined a question of fact precluded summary judgment in this “mutual mistake” action. Plaintiff purchased two artifacts which were supposed to be ancient. Both were subsequently deemed by experts to be modern in origin. Plaintiff sought to rescind the purchase as having been based upon mutual mistake. There was evidence, however, that plaintiff was aware the defendant had sold “fake” artifacts in the past, raising an issue of fact about the applicability of the “conscious ignorance” exception the mutual mistake doctrine:

The doctrine of mutual mistake “may not be invoked by a party to avoid the consequences of its own negligence” … . Where a party “in the exercise of ordinary care, should have known or could easily have ascertained” the relevant fact … – here, whether the items were ancient – that party is deemed to have been “[c]onscious[ly] ignoran[t]” and barred from seeking rescission … or other damages. This is true “[e]ven where a party must go beyond its own efforts in order to ascertain relevant facts (such as obtaining experts’ reports)” … .

The conscious ignorance exception applies only where a party is aware that his knowledge is limited but decides to contract anyway “in the hope that the facts accord with his wishes,” thus assuming “[t]he risk of the existence of the doubtful fact . . . as one of the elements of the bargain” … .

We agree with the dissent that both plaintiff and defendants shared the mistaken belief that the Faustina Bust and the Etruscan Warrior were “ancient.” Where we diverge is that we find that the record at this time does not support a finding that [plaintiff] did not consciously ignore his uncertainty as to a crucial fact … . Jerome M. Eisenberg, Inc. v Hall, 2017 NY Slip Op 01437, 1st Dept 2-23-17

 

CONTRACT LAW (POSSIBLE APPLICABILITY OF THE CONSCIOUS IGNORANCE DOCTRINE PRECLUDED SUMMARY JUDGMENT IN THIS MUTUAL MISTAKE ACTION)/MUTUAL MISTAKE (CONTRACT LAW, POSSIBLE APPLICABILITY OF THE CONSCIOUS IGNORANCE DOCTRINE PRECLUDED SUMMARY JUDGMENT IN THIS MUTUAL MISTAKE ACTION)/CONSCIOUS IGNORANCE DOCTRINE (CONTRACT LAW, MUTUAL MISTAKE, POSSIBLE APPLICABILITY OF THE CONSCIOUS IGNORANCE DOCTRINE PRECLUDED SUMMARY JUDGMENT IN THIS MUTUAL MISTAKE ACTION)/RESCISSION (CONTRACT LAW, MUTUAL MISTAKE, POSSIBLE APPLICABILITY OF THE CONSCIOUS IGNORANCE DOCTRINE PRECLUDED SUMMARY JUDGMENT IN THIS MUTUAL MISTAKE ACTION)

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