## Facts

- A retail coin dealer bought from a part-time coin dealer a dime purported to be a rare 1916-D (Denver-minted) dime for $500.
- The buyer closely examined the coin for 15 to 45 minutes before purchase.
- The buyer later received an offer to purchase the coin for $700, contingent on certification of authenticity.
- A numismatic certification organization determined the coin was counterfeit, including that the “D” mint mark was not genuine.
- The buyer promptly tendered return of the coin and demanded rescission and a refund; the seller refused.
- The trial court accepted that the standard elements of mutual mistake were met but denied rescission based on asserted trade custom that purchasing dealers must investigate and bear the risk if their investigation is wrong.

## Issues

1. Whether the sales contract was voidable for mutual mistake of fact where both parties believed the coin was a genuine rare 1916-D dime but it was counterfeit.
2. Whether the buyer’s inspection, sophistication, or alleged trade usage allocated the risk of the coin’s counterfeit nature to the buyer, barring rescission.

## Decision

- The Appellate Division reversed the judgment for the seller and ordered rescission.
- The court held the case was a classic mutual mistake: both parties shared a mistaken belief about an essential fact underlying the exchange.
- The court rejected the view that the buyer assumed the risk merely by inspecting the coin or by general coin-dealing practices, absent a clear allocation of risk.
- The court declined to treat the transaction as an illegal contract because both parties believed they were dealing in a genuine coin.

## Legal Principles

- A contract is voidable for mutual mistake when both parties share a mistaken belief about a basic, material fact assumed in making the contract and enforcement would materially alter the agreed exchange.
- A mistake as to authenticity or identity of the subject matter goes to the essence of the agreement and supports rescission, unlike a mere error in value.
- Negligent failure to discover the truth does not, by itself, bar rescission for mutual mistake.
- Risk of mistake is not shifted to one party by opportunity to inspect or claimed trade practice alone; risk must be allocated by agreement, conscious acceptance of limited knowledge, or a justified judicial allocation.

## Conclusion

Because both parties contracted on the shared, material assumption that the coin was a genuine 1916-D dime and there was no clear allocation of the counterfeit risk to the buyer, the contract was voidable for mutual mistake and rescission was required to restore the parties to their pre-contract positions.


Beachcomber Coins, Inc. v. Boskett, 166 N.J. Super. 442, 400 A.2d 78 (N.J. Super. Ct. App. Div. 1979)