Sellers and their role in commercial transactions

Business Law - Sales Issues

Business LAW: SALES ISSUES

Imagine that you are at a flea market and you are looking through a table full of old books or every type. You discover what you believe to be a first edition of Mark Twains' Huckleberry Finn, although you are not certain. The price on the book is $5.00 and you gladly pay it without question. Neither you nor the seller discusses the book in any way as you purchased the book.

Afterwards, you have the book appraised by an expert antique book export, who informs you that the book is worth at least $10,000.00.In this exchange, you have provided $5.00 in consideration for an item worth circa $10,000.00 when sold in the correct market. Could the flea market bookseller properly seek to have the sale set aside due to inadequate consideration?

Not under the given factual circumstances. Absent special or extenuating circumstances, the law does not interfere in contractual transactions to protect individuals from bad business deals of their own making or for failing to exercise due diligence in their transactions. Perhaps if the buyer had been an expert in valuing rare books and he offered the seller for $5.00 for the book after noticing it on is book shelf (instead of already for sale), the court may have considered him to have had an obligation to inform the seller of the worth of the book. What is the flea market bookseller knew it was an original, but had no idea of the true worth and thought that $5.00 was a reasonable price? No. If anything, the fact that the seller knew the book was an original only weakens any argument on his part to rescind the transaction. Again, had the buyer been an expert (instead of someone who merely suspected the book's true value), who assured the seller that the book was not valuable, knowing that representation to be false, the court may have considered him to have had an obligation to inform the seller instead of profiting by virtue of his superior knowledge and his purposefully withholding that information.

Will the law consider the issue of adequacy of consideration in this instance?

No. Without some showing that the seller had specific expert knowledge of the book's value and purposely withheld that information to induce the seller to sell it for inadequate consideration, the court will not interfere in the transaction.

Generally, in order to rescind a sales contract for inadequate consideration, the transaction would have to be unconscionable at the time of its formation. Even the unconscionability would probably be insufficient in and of itself without some evidence to establish that the process or negotiations generating the transaction were patently unfair on the part of the party who benefited unconscionably.

The gross disparity between the actual value of the book and the nominal consideration paid for it would be sufficient to meet the unconscionability test under circumstances where the seller relied on misrepresentations of material fact by the buyer or where the buyer induced the seller to make the sale knowing full well that the book was a valuable original.