Gavin Howe
Rectification in contract law is a remedy that allows a court to correct written errors in a contract to reflect the true intentions of the parties involved. It is an equitable remedy, and as such, the circumstances in which it can be applied are limited. Rectification is not the same as contract interpretation, which clarifies ambiguous language. Instead, it is used to correct mistakes where the written contract does not accurately reflect the mutual agreement between the parties due to a drafting error or a mistake in expressing their intentions. The party seeking rectification must provide convincing evidence of a prior agreement and demonstrate that the written document fails to reflect this agreement due to a mistake.
| Characteristics | Values |
|---|---|
| Purpose | To correct written errors in a contract to reflect the true intentions of the parties involved |
| Applicability | Available in various circumstances with a basis in contract or the court's equitable jurisdiction |
| Requirements | There must be a prior concluded agreement with definite terms; the written document fails to reflect this agreement due to a mistake; both parties intended the agreement to be recorded accurately but made an error in its expression |
| Evidence | Must be "convincing", "clear and precise", and "leave no fair and reasonable doubt" that the written contract does not reflect the final intention of the parties |
| Jurisdiction | Common in English law and Australian law; referred to as "reformation" in the United States |
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What You'll Learn
Rectification is not the same as contract interpretation
Rectification of contract corrects written errors to reflect the parties' true intentions. It is a remedy whereby a court orders a change in a written document to reflect what it ought to have said in the first place.
However, rectification is not the same as contract interpretation. Interpretation clarifies ambiguous language, whereas rectification corrects mistakes where the contract does not reflect the actual agreement due to a drafting error. Interpretation involves construing ambiguous contractual language in light of surrounding circumstances. Rectification, on the other hand, is used only when the contract fails to record what was actually agreed upon due to a mistake in recording the terms.
Courts will not grant rectification where the language used is simply vague or open to multiple meanings—such cases fall under interpretation. Interpretation considers the subjective views of the parties, while rectification focuses on the objective view of a reasonable observer.
To achieve rectification, it is crucial to prove that the parties were in full agreement regarding the details of their contract but made a mistake in writing them down. The party seeking rectification must demonstrate convincing evidence of a prior concluded agreement with definite terms and that the written document fails to reflect this agreement due to a mistake.
In summary, rectification corrects written errors to align with the parties' original and true agreement, while interpretation clarifies ambiguous language in a contract. Rectification requires clear and convincing proof of a prior agreement, whereas interpretation considers the subjective views of the parties to understand their intentions.
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Rectification is an equitable remedy
To achieve rectification, it is necessary to prove that the parties were in full agreement with the details of their contract but wrote them up incorrectly. The party seeking rectification must demonstrate with convincing evidence that there was a prior concluded agreement with definite terms, and the written document fails to reflect this agreement due to a mistake. The burden of proof for rectification is high, and documentary evidence, such as drafts, communications, and witness testimony, is critical to satisfying this burden.
The Court of Appeal's decision in FSHC Group Holdings Ltd v GLAS Trust Corp Ltd is a welcome confirmation of the law in this area. The court focused on rectification for "common mistake", where both parties have a common intention and understanding of the contract's effect, but when executed, the contract operates differently from that intention. The court clarified that it should look at the subjective intentions of the parties, allowing for greater flexibility and avoiding potential injustice.
In some cases, the existence of a prior agreement is not necessary for rectification to be granted. It may be granted when the instrument sought to be rectified is the only agreement between the parties but does not reflect their common intention. The plaintiff must provide 'convincing proof' that the written contract does not embody the final intention of the parties.
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The burden of proof for rectification is high
Rectification in contract law is a remedy that allows a court to modify a contract to reflect the original intentions of the parties involved. It is used when a written contract does not accurately represent the agreement due to a drafting error or mutual mistake in recording the terms. The court will scrutinise evidence such as emails, drafts, communications, meeting notes, and witness testimony to determine if a binding agreement existed prior to the written document.
The burden of proof for rectification is notably high. The party seeking rectification must provide convincing evidence that meets a higher standard than the usual balance of probabilities. They must demonstrate that there was a prior concluded agreement with definite terms, and that the written document fails to reflect this agreement due to a mistake. Both parties must have intended for the agreement to be recorded accurately but were mistaken in how it was expressed.
This high burden of proof is intentional, as courts are traditionally concerned about opening the floodgates to rectification claims, which could undermine the certainty and utility of written agreements. The standard of "convincing proof" is applied to ensure that rectification is only granted in appropriate circumstances and when no other options are available.
The party seeking rectification must be able to show that there was a common continuing intention prior to the making of the deficient document, and that this intention remained unchanged when the document was signed. They must also prove that, by mistake, they signed a document that did not accurately reflect their mutual intention.
The burden of proof in rectification cases has been the subject of some debate, with some critics arguing that a standard higher than the ordinary civil burden of proof is unnecessary. However, the prevailing view is that the high burden is necessary to promote the reliability of written agreements and prevent marginal cases from diluting the demanding preconditions for rectification.
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Rectification is available in various circumstances
Rectification is a remedy that allows a court to correct written errors in a contract to reflect the true intentions of the parties involved. It is an equitable remedy, and therefore the circumstances in which it can be applied are limited. Rectification is not the same as contract interpretation, which clarifies ambiguous language. Instead, it corrects mistakes where the contract does not reflect the actual agreement due to a drafting error.
Another circumstance in which rectification may be available is when there is no prior contract, but the parties shared a common intention that was not accurately recorded in the document. In such cases, it would be considered unconscionable and contrary to good faith for a party to take advantage of the mistake. The court will consider the subjective intentions of the parties to determine if rectification is appropriate, providing greater flexibility and avoiding potential injustice.
It is important to note that the burden of proof for rectification is high, and the court will scrutinize evidence such as emails, term sheets, and meeting notes to determine if a binding agreement existed before the written document. The court is not interested in what the parties might have intended under different circumstances but rather whether a genuine consensus existed and was misrecorded. Rectification does not rewrite deals but instead corrects documentation errors where the agreement was misrepresented in writing.
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Rectification does not rewrite deals
Rectification of contract corrects written errors to reflect the parties' true intentions. It is a remedy whereby a court orders a change in a written document to reflect what it ought to have said in the first place. However, it is important to note that rectification does not rewrite deals. Instead, it corrects documentation errors where a deal was clearly made but misrepresented in writing.
In contract law, rectification takes place when a court demands a modification to a contract so that it states what it should have stated originally. This involves changing the original wording with updated text to reflect the parties' intended agreement. The courts are not interested in what the parties might have intended under different circumstances. Rather, they focus on whether a genuine consensus existed and was misrecorded.
To achieve rectification, it is necessary to prove that the parties were in full agreement regarding the details of their contract but made a mistake in writing them down. The burden of proof for rectification is high, requiring convincing evidence of a prior concluded agreement with definite terms and the intention to accurately record this agreement. The court will scrutinize evidence such as drafts, communications, and witness testimony to determine if a binding agreement predated the written document.
It is important to distinguish rectification from interpretation. Interpretation clarifies ambiguous language, whereas rectification addresses situations where a contract does not reflect the actual agreement due to a drafting error. Rectification does not assist parties who did not include certain phrases because they did not fully consider the subject of the contract. It is not a means to rewrite contracts or include extra terms on behalf of parties who have not given them sufficient thought.
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Frequently asked questions
Rectification is a remedy in contract law, allowing a court to correct written errors in a contract to reflect the true intentions of the parties involved.
Contract interpretation clarifies ambiguous language, whereas rectification corrects mistakes where the contract does not reflect the actual agreement due to a drafting error.
The burden of proof for rectification is high. The party seeking rectification must provide clear and
No, courts will not rectify a contract just because one party believes the deal turned out to be unfavourable. There must be a mutual agreement that was recorded incorrectly.
In the Canadian case of Bercovici v Palmer (1966), a lawyer's error extended a conveyance of real property to include a cottage. The trial judge did not believe that the inclusion was intended, but the appeal court added that the conduct subsequent to the contract should be considered. Rectification was granted as the parties had a common intention to give effect to an antecedent agreement, which was not reflected in the written contract due to a common mistake.
