Mutual Mistake Doctrine in Tennessee Not Applicable when Contract Allocates Risk of Mistake to Party Seeking Rescission of Contract

A recent Tennessee Court of Appeals decision, Gibbs v. Gilleland, 2016 WL 792418 (Tenn. Ct. App. 2016) dealt with a situation where both the buyer and seller were not aware that the lot sold in the real estate transaction was not appropriate for the construction of a house.  The Tennessee Court of Appeals found that a mutual mistake existed because both parties to the contract were unaware that the fundamental reason for the purchase, to build a house, was faulty.  A “mistake” in the contract exists under Tennessee law when “a person acting on erroneous conviction of law or fact, executes an instrument he or she would not have executed but for the erroneous conviction” citing Pugh’s Lawn Landscape Co. Inc. v. Jaycon, Dev. Corp., 320 S.W.3d 252, 261 (Tenn. 2010).  The Court noted that in order for relief to be granted on the basis of a mutual mistake, the mistake must have been: (1) mutual or fraudulent; (2) material to the transaction; (3) not due to the complainant’s negligence; and (4) the complainant must show injury.” citing Robinson v. Brooks, 577 S.W.2d 207, 209 (Tenn. Ct. App. 1978). 

In this Gibbs case at issue, the court found there was a mutual mistake that met the requirements for relief to be granted under Tennessee law.  However, the key issue in this case is whether the mutual mistake is enforceable when the contract actually provides an allocation of risk for mistake.  This is basically a provision in the contract that shifts the risk to one party for any mistakes.  The Court found that “rescission of a contract on the basis of mutual mistake is not available when the contract at issue allocates that risk of mistakes the party seeking rescission.” citing Atkins v. Kirkpatrick, 823 S.W.2d 547, 553 (Tenn. Ct. App. 1991).  Within the contract in this case under subsection 7 it provided that “Closing of this sale constitutes acceptance of Property in its condition as of the time of closing, unless otherwise noted in writing.”  The Court of Appeals found that this specific language “unambiguously shifts the risk of fault concerning the condition of the property to Buyers at closing.” Gibbs at 9.  As a result, the Court found that the buyers were not entitled to rescind the contract under the mutual mistake theory. 

Plaintiff in Tennessee Slip and Fall Case Must Identify Object that Caused Fall

A recent Tennessee Court of Appeals decision, Hilda Willis v. McDonalds Restaurants of Tennessee, Inc., No. E2015-00615-COA-R3-CV, 2015 WL 9426271 (Tenn. Ct. App. 2015), involved a slip and fall at a McDonald’s in Tennessee and it provided an interesting issue.  In this case the plaintiff was maneuvering around the area where drinks were served at a McDonald’s.  As she left that area she saw a french fry on the bottom corner of the surface next to the service counter.  She stepped over the french fry and claimed that there was a sharp object that she felt through her shoe.  She believes this is what caused her to fall.  When she fell she dropped her drinks therefore there was ice everywhere.  Because of this, there was no ability to actually identify the piece of ice or other object that allegedly caused her to fall. 

The Plaintiff’s cause of action was dismissed on a motion for summary judgment at the trial court level.  On appeal, the plaintiff argued that this granting of summary judgment was improper because there were multiple dangerous conditions in the area including a slippery floor littered with debris, the French fry, the absence of a mat at the drinks station and slippery tile flooring.  Additionally, plaintiff claims that she slipped on a hard object which may have been ice but could not be positively identified because ice was everywhere after the incident.  The appellate court, found that “the fatal flaw in this action is that plaintiffs cannot identify the hard object that actually caused the fall; therefore they cannot establish that defendant caused the dangerous condition or that defendant had actual or constructive notice that the condition existed long enough to be discovered by proper diligence.” Willis at 4.

The Court went on to note that the defendant may in fact be responsible for numerous dangerous conditions throughout the restaurant.  However, it is the plaintiff’s responsibility in a premises liability case to identify and prove the dangerous condition that actually caused the fall.  In this particular case the plaintiff simply could not identify the actual condition that was responsible and without additional evidence concerning the identity object the appellate court affirmed summary judgment.

This case shows how difficult slip and fall premises liability cases can be in Tennessee.  The plaintiff must affirmatively identify the dangerous condition that caused the fall.  Obviously, this can be done in some circumstances, but in a case like this where there are many possible causes of the fall, the plaintiff’s failure to identify the object is fatal to plaintiff’s case.