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A jeweler who erroneously sold an item for less than its value could not rescind the sale, because the buyer had no knowledge of the item’s actual value, the Pennsylvania Superior Court has ruled in a memorandum opinion. The decision in Morton Reiff v. Nelis affirms a Philadelphia Common Pleas Court’s order granting summary judgment to the defendants. According to the trial court opinion, Center City, Pa., jewelers D’Antonio & Klein sold a pair of diamond earrings put on consignment at its Center City jewelry store. Morton Reiff had consigned the earrings to the jewelry store. Robert Nelis then purchased the earrings for $3,200. After Reiff learned of the sale, he filed a complaint for equitable rescission and unjust enrichment against Nelis, claiming that D’Antonio & Klein underlisted the price of the earrings. The underlisting, Reiff said, was the result of a mistake of an employee who listed the earrings for $3,200, when they should have been listed at $13,200. Prior to appeal, the jewelry store assigned its rights and remedies that it might have had against Nelis to Reiff. On appeal, Reiff argued that the trial court judge abused his discretion in granting Nelis the summary judgment motion. Reiff claimed that Nelis knew that a mistake had been made in the sale of the earrings for $3,200. Reiff argued that because Nelis, at his deposition, stated that after he saw the diamond earrings and asked for their sale price, then left the store, continued shopping and returned two hours later to purchase the earrings, Nelis realized that there was a mistake in pricing and that the jewelers were not aware of this mistake. The court strongly disagreed. “There is no … evidence otherwise showing that the Nelises knew the earrings were being undersold. Appellant is claiming the Nelises were aware that the earrings were ‘seriously undervalued’ merely because they shopped at other stores. There is no merit to this argument,” the court said. Basing his second argument on the principle of mutual mistake, Reiff said that the earrings’ sale to Nelis should be rescinded because both the jewelers and Nelis were mistaken about the value and cost of the earrings. Again, the Superior Court disagreed, stating that pricing errors generally cannot be the basis of an action for rescission. “Contracting parties are normally bound by their agreements, irrespective or whether the agreements embodied reasonable or good bargains,” the court said. “The certified record shows no indication that the allegedly mistaken wholesale value of the diamonds was an element of negotiations between the parties.” The court also said that D’Antonio & Klein, as a jewelry merchant, should bear the risk of the deals it negotiates. In affirming the common pleas court decision, the Superior Court stated: “Through the actions of the jewelry store in its capacity as a retailer which undertook negotiations prior to the sale and performed an appraisal, the retailer who sells a product realizing his lack of knowledge as to value must bear the risk of a bad deal.” Judges Stephen A. McEwen Jr., William F. Cercone and Phyllis W. Beck sat on the panel for the case.

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