Critical Legal Thinking Cases
13.5 Innocent Misrepresentation: W. F. Yost, who owned the Red Barn Barbecue Restaurant
(Red Barn), listed it for sale. Richard and Evelyn Ramano of Rieve Enterprises, Inc. (Rieve),
were interested in buying the restaurant. After visiting and conducting a visual inspection of the
premises, Rieve entered into a contract to purchase the assets and equipment of Red Barn, as
well as the five-year lease of, and option to buy, the land and the building. Prior to the sale, the
restaurant had been cited for certain health violations that Yost had corrected. In the contract of
sale, Yost warranted that “the premises will pass all inspections” to conduct the business.
Rieve took possession immediately after the sale and operated the restaurant. After two weeks,
when the Board of Health conducted a routine inspection, it cited 52 health code violations and
thereupon closed the restaurant. Rieve sued to rescind the purchase agreement. Evidence
established that Yost’s misrepresentations were innocently made. Can Rieve rescind the
contract? Yost v. Rieve Enterprises, Inc., 461 So.2d 178, Web 1984 Fla. App. Lexis 16490 (Court
of Appeals of Florida)
20.1 Cure: Joc Oil USA, Inc. (Joc Oil), contracted to purchase low-sulfur fuel oil from an Italian
oil refinery. The Italian refinery issued a certificate to Joc Oil, indicating that the sulfur content
of the oil was 0.50 percent. Joc Oil entered into a sales contract to sell the oil to Consolidated
Edison Company of New York, Inc. (Con Ed). Con Ed agreed to pay an agreed-upon price per
barrel for oil not to exceed 0.50 percent sulfur. When the ship delivering the oil arrived, it
discharged the oil into three Con Ed storage tanks. A report issued by Con Ed stated that the
sulfur content of the oil was 0.92 percent. In the past, Con Ed had permitted a delivery of
nonconforming oil to be cured by a conforming delivery. Joc Oil made an offer to cure the defect
by substituting a conforming shipment of oil that was already on a ship that was to arrive within
two weeks. Con Ed rejected Joc Oil’s offer to cure. Joc Oil sued Con Ed for damages for breach
of contract. Does Joc Oil have a right to cure the nonconforming delivery? Joc Oil USA, Inc. v.
Consolidated Edison Company of New York, Inc., 457 N.Y.S.2d 458, 443 N.E.2d 932, Web 1982
N.Y. Lexis 3846 (Court of Appeals of New York)

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