Renner v. Kehl Case Brief

Arizona Supreme Court1986Docket #222458
722 P.2d 262 150 Ariz. 94 1986 Ariz. LEXIS 316 Contracts Remedies Property

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Case Brief Summary & Legal Analysis

3 min read

tl;dr: Buyers purchased land to grow a specific crop, but the necessary water was absent. The court allowed contract rescission for this mutual mistake but denied recovery of development costs, limiting the buyers’ remedy to restitution to prevent the sellers’ unjust enrichment.

Legal Significance: This case distinguishes remedies for contract rescission based on mutual mistake (restitution only) from those for fraud or breach (where consequential damages may be available). It clarifies that restitution aims to prevent unjust enrichment, not to compensate for reliance losses.

Case Facts & Court Holding

Key Facts & Case Background

The plaintiffs (Renner) purchased agricultural leases from the defendants (Kehl) for the express purpose of commercially cultivating jojoba. Both parties believed the land contained sufficient underground water to support this endeavor, which was a basic assumption underlying the contract. After making a down payment of $80,200, Renner spent approximately $229,000 on development, including drilling test wells. The wells revealed that the water supply was inadequate in both quantity and quality for commercial jojoba cultivation. Consequently, Renner abandoned the project and sued to rescind the contract on the grounds of mutual mistake of a material fact. The trial court granted rescission and ordered Kehl to return the down payment and also to reimburse Renner for the $229,000 in development costs as consequential damages. The court of appeals affirmed. The Arizona Supreme Court granted review solely on the issue of the proper measure of damages.

Court Holding & Legal Precedent

Issue: When a contract is rescinded based on a mutual mistake of fact, is the rescinding party entitled to recover consequential damages for expenses incurred in reliance on the contract?

No. A party rescinding a contract due to mutual mistake is entitled Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit i

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Legal Issue

When a contract is rescinded based on a mutual mistake of fact, is the rescinding party entitled to recover consequential damages for expenses incurred in reliance on the contract?

Conclusion

This case establishes that for contract rescission based on mutual mistake, the Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nos

Legal Rule

Absent proof of fraud or misrepresentation, a party who rescinds a contract Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis a

Legal Analysis

The Arizona Supreme Court affirmed that rescission was proper due to a Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lo

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Flash Summary

  • A contract may be rescinded for a mutual mistake of material
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in cul

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