Deutschmann v. Standard Fur Company, Inc.
331 So. 2d 219 (1976)
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Rule of Law:
A contract may be invalidated for a unilateral error of fact that was the principal cause for making the contract, where the other party, particularly an expert, knew or should have known of the error but failed to correct the misunderstanding.
Facts:
- In November 1974, Mrs. Joyce Deutschmann ordered a custom mink coat from Standard Fur Company, Inc. for $2,000.
- Deutschmann specified that the coat must be made with furs running horizontally, using quality female continuous (not pieced together) pelts.
- She also required that the width of the furs be the same as those on a model coat she inspected at the store.
- Deutschmann paid a $400 deposit to be credited against the total price of the coat.
- The delivered coat was made with furs that were wider than the model, were pieced together using 'V-type seams', and were 'let out' by slicing and sewing them, contrary to Deutschmann's understanding of the terms.
- After an unsuccessful attempt by the furrier to alter the coat to her satisfaction, Deutschmann rejected the final product and demanded the return of her deposit.
- Standard Fur Company refused to return the $400 deposit.
Procedural Posture:
- Mrs. Joyce Deutschmann and Frank Deutschmann filed suit against Standard Fur Company, Inc. in a trial court for the return of their $400 deposit.
- The trial court entered a judgment dismissing the Deutschmanns' suit.
- The Deutschmanns, as plaintiffs-appellants, appealed the trial court's judgment to the Court of Appeal of Louisiana, Fourth Circuit.
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Issue:
Does a valid contract for a custom-made good exist when the buyer's consent is based on a unilateral error of fact concerning the product's key specifications, and the expert seller knew or should have known of the buyer's misunderstanding but failed to clarify it?
Opinions:
Majority - Gulotta, J.
No. A valid contract did not exist because there was no true consent from the buyer due to a unilateral error of fact. The court found a classic misunderstanding between the parties regarding the technical specifications of the coat. Mrs. Deutschmann understood terms like 'continuous' and 'let out' in their plain English sense, while the expert furrier, Elza Abel, understood them according to industry trade usage. Abel knew Mrs. Deutschmann wanted a coat with specific qualities that were the principal cause for her entering the agreement, yet he failed to communicate that her understanding of the terms differed significantly from the technical reality of fur coat construction. This lack of communication from the expert caused an error of fact on the part of the purchaser, which vitiated her consent and invalidated the purported agreement. Therefore, the parties must be returned to the position they were in before the purported contract was formed.
Analysis:
This decision reinforces the principle that a 'meeting of the minds' is essential for contract formation. It highlights that a unilateral mistake can invalidate a contract, particularly in transactions involving an expert and a layperson. The ruling places an affirmative duty on the expert party to clarify technical terms and ensure the layperson's understanding aligns with the product or service being provided, especially when the expert knows or should know that a specific quality is the customer's primary motivation. This precedent protects consumers from being bound by agreements they entered into based on a fundamental, uncorrected misunderstanding of technical jargon.
