Orlandi v. Goodell

WILKINSON, Circuit Judge:

Lessees, finding no marketable coal on mining property, sought rescission of an agreement that required them to make minimum annual royalty payments and permitted them to cancel the contract by written notice to the lessor. The trial court rescinded the contract upon a jury verdict for lessees on the grounds of mutual mistake of fact with respect to the presence of marketable coal on the property. Because under West Virginia law the lease constituted a contract of hazard which allocated all business risks to lessees until proper exercise of their cancellation rights,…