A seller of a plot of land with a house without a finalization certificate moved, after the sale, a rockery which was, as it turned out, outside the plot. The purchaser terminated the agreement due to misrepresentation as to the size of the plot but the seller argued not to have known that the rockery was outside the plot.
The Court held that a mistake that is the result of misrepresentation enables termination of the agreement even if the mistake is not fundamental and may result in compensation. In lack of misrepresentation termination requires a fundamental mistake without which the party would not have entered into the contract and if the counterparty knew, or should have known, of the mistake the mistaking party can cancel the agreement. In lack of knowledge only a Court can terminate the agreement and the mistaking party may be obligated to compensate the other party.
In this case the mistake was of both parties and was not fundamental but because the mistake was caused by the incorrect placement of the rockery by the seller it is a misrepresentation even if there was no explicit representation in the agreement and even if the mistake was in good faith, and the purchaser could have terminated the agreement. Notwithstanding this, the Court did not award compensation because the issue was marginal to the agreement.