Jordan v Knafel: a troubling take on mutual mistake: the first district found in favor of Michael Jordan against his former mistress in an opinion that, while interesting, includes a troubling analysis of the mutual-mistake-of-fact doctrine. This article considers the ramifications of the ruling and suggests practice pointers

Illinois Bar Journal, June, 2009 by Joseph Siprut

Knafel also submitted a note from her obstetrician in which that doctor surmised the date of conception was November 19 or 20, 1990--a date that coincided with one of Knafel's sexual encounters with Jordan. As a result, Knafel argued, she believed in good faith that Jordan was the father of her child. (14)

The first district's analysis: fraudulent Inducement and mutual mistake

After determining that the evidence on paternity was reliable and that Jordan was not, in fact, the father of Knafel's child, the court considered what impact paternity had on me enforceability of the alleged agreement.

The court first addressed Jordan's affirmative defense of fraud in the inducement, and held that Knafel's statement to Jordan that he was the father of her child was a material and substantial factor in inducing him to act. To hold otherwise, the court held,

[W]ould render her agreement not to file a paternity claim to have been a mere pretense to extort money. If Jordan's paternity was immaterial to the parties' settlement agreement, then her claim that she had a good-faith basis for a paternity action against Jordan would be unfounded. Without a good-faith basis, they would have lacked the necessary consideration for their bargain."

The court additionally held that because Knafel represented "with certainty" at the time of contract formation that Jordan was the father of her child--and because that turned out to be false--Knafel "did not have the basis that she stated or implied for that categorical representation, thus making it fraudulent." (16)

With respect to Jordan's defense of mutual mistake of fact, the court held that even if Knafel's representation on paternity was not fraudulent and was made in good faith, her representation was still incorrect--and that the issue of paternity went to a "basic assumption on which the contract was made."" The court therefore held that Jordan was entitled to rescission of the contract.

Did Jordan bear the risk he was not the father?

The court's conclusions on the fraudulent inducement and mutual mistake of fact defenses both discount that the bargain Jordan struck included the possibility he was not the father. As the court stated, "although a general fear of public exposure of their relationship may well have been a factor when Jordan proposed the alleged settlement, it was not Jordan's only inducement." To the contrary, the court noted that Jordan's "paternity was material to the alleged settlement agreement." (18) As is explained below, however, the court's analysis conflates Jordan's actual paternity with his potential paternity.

Knafel's counterclaim alleged that Jordan agreed to the $5 million settlement after Knafel informed Jordan that she was pregnant and that he was the father. It was not until several months later, after Knafel's child was born, that paternity testing revealed Jordan was not the father.

Why did Jordan not first demand a paternity test before agreeing to the $5 million settlement? After all, since the parties did conduct a paternity test several months after the child was born, wouldn't Jordan have been better served by waiting to conclusively establish paternity before agreeing to anything?