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    Contract Principles: Uncut Gemstone

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    A geologist buys a "rock" from an inexperienced sales clerk at the Crystal and Mineral Shop for $35.00. Shortly thereafter the rock is determined by experts to be an uncut gemstone that, when cut, could be worth an estimated $1.5 million. The experienced, long-time owner of the Crystal and Mineral Shop seeks to rescind the sale. What is likely outcome? Using contract principles, explain how you reached your decision.

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    The contract will not be able to be rescinded. See, the basic rule of a contract is there must be a "bargained for exchange" and that is depicted in your question. At eye-level there are no misrepresentation (a geologist bought a rock, not a gem), fraud (they are not trying to scam the shop owner) or mistake (the gem was priced by someone in the store - most likely the manager).

    Going back to the time of purchase, there is ...

    Solution Summary

    The expert examines the contract principles for Uncut Gemstones.