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

Conclusion

In sum, the court did not expressly consider whether the concept of "conscious ignorance" applied to the agreement Jordan allegedly struck with Knafel. It is possible that the court at least implicitly rejected the application of that doctrine, based on the theory that any agreement not based on actual paternity would be inherently extortionate, and thus unenforceable.

Under this approach, the court could have granted rescission even if Jordan expressly acknowledged that he was entering into the agreement consciously ignorant of his actual paternity. But if that is the basis for the court's ruling, it was not made clear. Moreover, such a rule (if it is a rule) has consequences for the enforceability of confidentiality agreements generally.

Because the court implied--but did not expressly rule--that the confidentiality provision would be extortionate if divorced from actual paternity, practitioners should consider the implications of including a confidentiality provision as one aspect of an underlying agreement. If confidentiality is important, practitioners should determine whether the confidentiality provision could be enforced as a stand-alone agreement if the validity of the underlying agreement is challenged.

In addition, by ignoring the possibility of conscious ignorance, the court arguably expanded the reach of the mutual-mistake-of-fact defense. When representing a party to a transaction in which conscious ignorance is a bargained-for aspect of the deal, practitioners should document that to the extent possible. (28)

This would have been good practice even before the Jordan case, but it is especially important now. Doing so will also help defend against fraudulent inducement claims.

(1.) Jordan v Knafel (Jordan 1), 378 Ill App 3d 219, 880 NE2d 1061 (1st D 2007). Knafel's petition for leave to appeal to the Illinois Supreme Court was subsequently denied. 2271112d 582,888 NE2d 1184 (2008).

(2.) Jordan I at 222, 880 NE2d at 1063.

(3.) Id. Jordan raised several additional defenses, but because those defenses were not the subject of the first district's opinion, this article will not discuss them.

(4.) Id.

(5.) Id at 224, 880 NE2d at 1065.

(6.) Id.

(7.) By the time the litigation ensued, Jordan had come out of retirement to compete for the Washington Wizards. Knafel's counterclaim thus included a count for "anticipatory" breach. Id.

(8.) Id.

(9.) Jordan v Knafel (Jordan II), 355 III App 3d 534, 542, 823 NE2d 1113, 1121 (1st D 2005).

(10.) Jordan 1 at 225, 880 NE2d at 1066.

(11.) Id.

(12.) Id.

(13.) ld at 226, 880 NE2d at 1066.

(14.) Id. Knafel also challenged the reliability of the paternity tests and sought to compel additional discovery from Jordan, but the appellate court rejected those arguments. Id at 226-228, 235, 880 NE2d at 1067-68.

(15.) Id at 230, 880 NE2d at 1070.

(16.) Id at 232, 880 NE2d at 1071.

(17.) Id at 234, 880 NE2d at 1073.

(18.) Id at 229, 880 NE2d at 1069.

(19.) Id at 234, 880 NE2d at 1073, quoting Restatement (Second) of Contracts $152, at 385 (1981).