The plaintiff commenced a Small Claims Court action seeking recovery of funds advanced under an agreement whereby the defendant undertook to source and manufacture commercial waffle machines in China.
The plaintiff paid over $50,000 but never received a viable prototype or manufactured units in accordance with the contractual specifications.
The court found the defendant’s explanations for the missing prototype and lack of documentation unsatisfactory and preferred the evidence of the plaintiff’s witness.
Applying the doctrine of total failure of consideration, the court held the plaintiff received no benefit under the agreement and was entitled to rescind and recover the advance payments within the Small Claims Court monetary limit.
Judgment was granted for $25,000 plus prejudgment and postjudgment interest and costs.
