Legal Definitions - laesio enormis

Laesio enormis is a legal principle originating in Roman and civil law systems that addresses situations of significant financial imbalance in a contract, particularly a sale. It allows a party who has suffered an "excessive loss" to challenge or even cancel a contract if the price they received for an item was less than half its true market value. The purpose of this doctrine is to prevent gross unfairness or exploitation in transactions.

If laesio enormis is successfully invoked, the disadvantaged party can typically choose to either:

• Rescind the sale: Cancel the contract and have the item returned to them.
• Demand full value: Allow the sale to proceed, but require the other party to pay the full, fair market value of the item.

Here are some examples illustrating laesio enormis:

• Example 1: Sale of a Family Estate
  

  An elderly individual, Ms. Eleanor Vance, lives alone and decides to sell her large, historic family estate, which includes a significant amount of land. A real estate investor approaches her and offers $500,000 for the entire property. Ms. Vance, not fully aware of current market conditions or the true value of her unique estate, accepts the offer. Later, her family discovers that comparable properties in the area, especially those with historical significance and extensive acreage, are selling for $1.2 million to $1.5 million. If the true market value of Ms. Vance's estate was $1.2 million, and she received only $500,000 (which is less than half its actual value), she could potentially invoke laesio enormis. This would allow her to either rescind the sale and reclaim her property or demand that the investor pay the full market value.

• Example 2: Sale of a Rare Collectible
  

  Mr. David Kim inherits a collection of vintage comic books from his grandfather. He decides to sell them quickly and takes them to a local pawn shop, where he is offered $8,000 for the entire collection. Unbeknownst to Mr. Kim, one of the comic books is an extremely rare first edition, highly sought after by collectors, with a standalone market value of $20,000. The entire collection's true value is closer to $25,000. Since Mr. Kim received only $8,000 for items worth $25,000 (which is significantly less than half their true value), he might have grounds to argue laesio enormis. He could then seek to either cancel the sale and retrieve his collection or require the pawn shop owner to pay the fair market price for the items.