Legal Question in Business Law in Delaware

Re: Can a seller back out of a purchase?

The law of mistake in the formation of contracts is quite complex and confusing, if not confused. Basically, you have here a unilateral mistake, i.e. the seller was unaware of the true nature of the item sold, but the buyer was aware. A leading authority (Restatement of Contracts, sections 153 and 154) would give the innocent and mistaken seller the right to rescind provided he did not assume the risk of mistake, either expressly or by implication. A court might hold that the seller, who was a dealer with supposedly superior knowledge, assumed the risk. However, the bottom line is that this matter could go either way at trial, with the judge trying to do 'the right thing' and applying the portion of case law that supports his feelings of what's right and ignoring the rest.

I believe there is a tendency in modern times to hold that the seller assumes the risk that he has failed to understand the true market value of an item he deals in and inadvertently underprices.

If, however, the buyer participated in or encouraged the seller's mistake, the court would be much more inclined to allow rescission.

This answer is based on general U.S. law and is not specific to Delaware.