Nester v. Michigan Land & Iron Co. – Case Brief
Nester v. Michigan Land & Iron Co., 69 Mich. 290, 37 N.W. 278 (Mich. 1888).
Facts: Michigan Land & Iron (D) contracted to sell timber to Nester (P) for $27,000. Nester was dissatisfied with the quality and quantity of the timber and demanded that Michigan accept one half the contract price. Michigan refused.
P sued D and alleged that the quality and yield of the timber was poor and that both parties had been mistaken as to the nature and quality of the timber. The trial court awarded P $12,800 and D appealed, arguing that P had acted on the advice of his own agents, the mistake was unilateral, and D had made no warranty as to the quality or quantity of timber that would be produced.
Issue: Is a purchaser of goods entitled to reformation or rescission of a contract if the quality or quantity of goods produced does not meet expectations?
Holding and Rule: No. A purchaser of goods is not entitled to reformation or rescission of a contract if the quality or quantity of goods produced does not meet expectations, provided the seller has not made a warranty.
Both of the parties were experienced businessmen. There was no warranty made as to the quality of the cut timber from the tract but only an expectation based on P’s informed business judgment. D is not bound by an implied warranty that the timber rise to P’s expectations.
The court held that if P were entitled to reformation of the contract under these facts, D should be entitled to reformation in cases in which the estimated cut exceeded expectations. The court rejected this approach and held that P bore the risk that the yield and quality would not meet his expectations. Each party bore the risk that the timber produced would be of greater or lesser worth than expected.
Disposition: Reversed.