13.2 Unilateral Mistake

The County of Contra Costa, California, held a tax sale in which it offered for sale a vacant piece of property located in the city of El Cerrito. Richard J. Schultz, a carpenter, saw the notice of the pending tax sale and was interested in purchasing the lot to build a house. Prior to attending the tax sale, Schultz visited and measured the parcel, examined the neighborhood and found the houses there to be very nice, and had a title search done that turned up no liens or judgments against the property. Schultz did not, however, check with the city zoning department regarding the zoning of the property.

Schultz attended the tax sale and, after spirited bidding, won with a bid of $ 9,100 and received a deed to the property. Within one week of the purchase, Schultz discovered that the citys zoning laws prevented building a residence on the lot. In essence, the lot was worthless. Schultz sued to rescind the contract.

Can the contract be rescinded?