Misrepresentation in Business Contracts: Yost v. Rieve Enterprises

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Case 31.5 Innocent Misrepresentation: In the case or Yost v. Rieve Enterprises, Inc. Rieve Enterprises engages into a contract with Mr. Yost for a lease to purchase deal. The facts of the case are that Rieve visited the Red Barn Barbecue Restaurant with the intention of purchasing. Rieve and Mr. Yost entered into a contract after Rieve conducted a visual inspection of the premises. The deal was to include a five year lease with the option to buy the land and building. Prior to the sale, the Red Barn had been cited for numerous health code violations. Mr. Yost had these all corrected and disclosed this information. Mr. Yost then warranted that “the premises will pass all inspections” to conduct business. Shortly after Rieve Enterprises …show more content…

v Consolidated Edison Company of New York, Inc., Joc Oil is suing for the right to cure. This right happens between merchants when there has been an issue with items purchased, shipped, or received incorrectly. In this case Joc Oil has contracted to purchase low-sulfur oil from one refinery and to sell that oil to Edison. The oil arrives at Edison and is offloaded into Edison’s storage facility, only to find that the oil exceeds the low-sulfur requirements set in the contract. In past transactions Joc Oil has delivered nonconforming goods, or goods that do not meet the requirements under the contract. Edison has previously allowed Joc Oil to cure by allowing them to deliver conforming goods within the contracted time frame. “A cure may be attempted if the time for performance has not expired and the seller or lessor notifies the buyer or lessee of his or her intention to make a conforming delivery within the contract time” (Cheeseman, 2013). In this case we assume that the testing by Edison that reported the goods as nonconforming is accurate. There are some questions that would need to be answered in order to fully and accurately deliver a verdict on this case. The largest question is: Joc Oil has a cure for the shipment expected to arrive within two weeks, is this within the contract timeframe? If this question is a yes then Joc Oil has the rights to cure the issue at hand. If the answer is no, then a breach of contract may be in the works. Due to the fact that Joc Oil has been allowed to cure the issue in the past, there is a pattern of behavior by Edison, to allow Joc Oil the ability to cure. This would put Joc Oil in a position where there is no breach of contract. Joc Oil in this case has the ability and rights to cure for two reasons. The first being the past history, and the second being the right to cure as guaranteed under the

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