Getting out of Contract is a lot easier than you think if you made a mistake
when you agreed!
In 2013, Thomas Deprince, a passenger aboard a cruise ship, visited the
cruise ship’s jewelry store, which was operated by Starboard Cruise
Services, and expressed an interest in purchasing a fifteen to twenty
carat loose diamond. Starboard Cruise Services reached out to its diamond
vendor and was provided an inventory list which included a per-carat price
and net price for each diamond; it then selected two diamonds from the
inventory list and presented the information to Deprince as follows:
EC 20.64 D VVS2 GIA VG G NON selling price $235,000
EC 20.73 E VVS2 GIA EX EX FNT selling price $245,000
Starboard Cruise Services did not realize that the quoted price was
per carat and mistakenly sold the 20.64 carat loose diamond to Deprince for $235,000.
This mistake cost Starboard Cruise Services approximately $4.6 million dollars!
Shortly after the sale, Starboard Cruise Services realized that the $235,000
per carat and immediately called Deprince, explained the mistake and reversed the
charges to his credit card. Deprince then filed a lawsuit seeking to enforce
the parties’ contract.
After a series of rulings, appeals and remands, the case eventually made
its way to the Third District Court of Appeal, where it was up to the
Third District Court of Appeal to determine whether Starboard Cruise Services
was excused from performing under the contract because it committed a
unilateral mistake and
whether in order to prove unilateral mistake, Starboard Cruise Services
was required to prove that the mistake was induced by the party seeking
to benefit from the mistake.
On August 1, 2018, the Third District Court of Appeal ruled in favor of
Starboard Cruise Services finding that Starboard Cruise Services was not
required to prove that the unilateral mistake was induced by the party
seeking to benefit from the mistake. Specifically holding that a contract
may be set aside based on a unilateral mistake of fact
if the mistake was
not the result of an inexcusable lack of due care, the denial of release from
the contract would be inequitable,
and the other party to the contract has not so changed its position in reliance
on the contract that rescission would be unconscionable.