Steinmeyer v. Schroeppel
80 N.E. 564, 226 Ill. 9 (1907)
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Rule of Law:
A unilateral mistake in calculating a contract price is not grounds for equitable rescission where the mistake is due to the party's own negligence or lack of ordinary care and does not relate to the subject matter of the contract.
Facts:
- Appellee, a building contractor, submitted a list of thirty-four lumber items to Appellants, a lumber business, to request a price quote.
- Appellants' book-keeper wrote the correct price next to each item on the list.
- One of the Appellants then added the column of prices but made a mathematical error, calculating the total as $1446 instead of the correct sum of $1867.
- Appellants formally offered to sell the itemized lumber to Appellee for the mistaken price of $1446.
- Appellee had received other bids for the same lumber for around $1890.
- On June 16, 1905, Appellee accepted the $1446 offer, and both parties signed a memorandum confirming the agreement.
- Later that evening, one of the Appellants discovered the $421 calculation error.
- The next morning, Appellants notified Appellee of the mistake, stated the correct price was $1867, and refused to perform the contract at the agreed-upon price.
Procedural Posture:
- Appellee sued Appellants in a court of law for breach of contract.
- Appellants filed a bill in a court of equity to enjoin the lawsuit and to have the contract canceled on the grounds of mistake.
- The two suits were consolidated and tried in the circuit court (trial court), which found for Appellants and entered a decree canceling the contract.
- Appellee, as appellant, appealed the decision to the Appellate Court for the Fourth District.
- The Appellate Court reversed the circuit court's decree and remanded with instructions to dismiss Appellants' bill.
- Appellants, as the losing party in the intermediate appellate court, were granted a certificate of importance to appeal to the Supreme Court of Illinois.
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Issue:
Does a unilateral mistake in calculating the final price of a contract, resulting from the mistaken party's own lack of ordinary care, justify the equitable remedy of cancellation?
Opinions:
Majority - Mr. Justice Cartwright
No. A unilateral mistake resulting from a party's own negligence does not justify the cancellation of a contract. For a court of equity to grant relief, a mistake must be material to the substance of the contract and not be the result of a lack of the care and diligence exercised by a person of reasonable prudence. Here, the mistake was a simple error in addition, which demonstrates a want of ordinary care. The mistake did not relate to the subject matter, identity, or amount of the goods being sold; the contract was for a specific list of lumber for an agreed price. To allow cancellation for such a miscalculation would undermine the stability of all contracts, as parties could then seek to undo agreements based on errors in calculating costs or profit margins.
Analysis:
This decision reinforces the principle of contract stability by limiting the availability of rescission for unilateral mistakes. It establishes that the risk of clerical or mathematical errors made during contract formation falls on the party who made the error, especially when it results from that party's own negligence. The ruling distinguishes between mistakes in a party's internal calculations or business judgment (which are not grounds for relief) and mistakes concerning the fundamental substance of the agreement itself (which may be). This precedent makes it more difficult for parties to escape contractual obligations by claiming they made a careless error in their pricing.
