Business Law 13th Edition by Frank Cross, Kenneth Clarkson, Roger LeRoy Miller

Exercise 12

BACKGROUND AND FACTS L H Construction Company was a general contractor involved in the renovation of the Thomas Edison historic site in West Orange, New Jersey, for the National Park Service. L H contracted with Circle Redmont, Inc., which is based in Melbourne, Florida, to make a cast-iron staircase and a glass flooring system. Redmont's original proposal was to "engineer, fabricate, and install" the staircase and flooring system.
During negotiations, however, installation and its costs were cut from the deal. In the final agreement, payment was due on "Supervision of Installation" instead of "Completion of Installation." Nevertheless, the final agreement stated that Redmont would "engineer, fabricate, and install." Later, Redmont claimed that this was a mistake. L H insisted that installation was included. L H filed a suit in a Florida state court against Redmont. The court found that the word install in the phrase "engineer, fabricate, and install" was the result of a mutual mistake. L H appealed.
IN THE LANGUAGE OF THE COURT
PER CURIAM. [By the Whole Court]
* * * * A mistake is mutual when the parties agree to one thing and then, due to either a scrivener's error [an error made by the person copying the document] or inadvertence [carelessness], express something different in the written instrument. [Emphasis added.] Clearly, the final contract between L H and Redmont was ambiguous. While the final * * * proposal stated that Redmont was to "engineer, fabricate and install" the staircase and flooring system, [the agreement also] states that the final $40,000 progress payment was "Due upon Supervision of Installation." The trial court allowed the parties to present some parol evidence to establish the parties' true intent and subsequently found the contract contained a mutual mistake as to whether Redmont was to install, or merely supervise, the installation of the product. This was an issue that could have been decided for or against either party and we cannot say the trial court's findings of fact were unsupported by competent, substantial evidence. Although the face of the contract clearly reflected a duty to install, Redmont's witnesses' testimony supported the trial court's finding that it was the express understanding between Redmont and L H that Redmont would only supervise, and not provide complete installation of the staircase and flooring system.
Redmont's witnesses testified that L H knew that installation was being deleted as a means of saving money for L H. Redmont's installation supervisor testified that the final * * * proposal was specifically worked up to schedule the progress payments toward the end of the job pursuant to L H's president's request, and that L H had decided that it wanted only installation supervision, and the contract price reflected installation supervision, not complete installation. Redmont's [chief financial officer] further testified that L H was aware that Redmont was not going to install the product "because L H's president had asked us to take the installation out to save money." Moreover, Redmont's president testified that he spoke directly with L H's president regarding Redmont's supervision of installation and it was decided that Redmont would only provide installation supervision. * * * Redmont's president also reiterated [repeated] that he had direct conversations with L H's president where he said, "Fred, how can we save me some money here and what can we do." The weight to be given to the testimony turned on the witnesses' credibility, a matter exclusively within the trial court's province.
DECISION AND REMEDY A state intermediate appellate court upheld the lower court's finding that the use of the word install in the parties' agreement was a mutual mistake. The appellate court reversed the lower court's final judgment in Redmont's favor on other grounds, however.
WHAT IF THE FACTS WERE DIFFERENT? Suppose that Redmont had intentionally misled L H to believe that installation was included in the price. Would the court's decision on the mutual mistake issue have been different? Discuss.
THE ECONOMIC DIMENSION The parties performed as agreed, with Redmont working on schedule and L H making timely payments, until the issue of installation arose. Assuming that no further disputes arose, what might be the appropriate remedy?