Suppose Josh Hartly is interested in purchasing a new car and visits his local auto dealer. In the course of his negotiations, he tells the salesperson that he wants the 3.2 liter V-6 engine, and not the 3.9 liter because he has concerns regarding the fuel economy of the 3.9 liter engine. Josh signs a contract agreeing to purchase a car with the 3.2 liter V-6 engine. What neither Josh nor the salesperson knew was that the manufacturer had already stopped manufacturing both the 3.2 liter and the 3.9 liter, and was equipping the cars with a newly designed 3.5 liter engine.
What do you think about this situation? Should parties to a sales contract be able to rescind a contract because of mutual mistake of fact? Why or why not? Did either party act unethically in this case? Why or why not? What application does the UCC have here? Finally, in the overall context of contract law, are there any winners or losers when a contract is rescinded based on mutual mistake of fact? Why or why not?
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