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Grounds for Rectification Explained

Rectification is a legal remedy that allows for the correction of written instruments to reflect the true intentions of the parties involved, despite the parol evidence rule. It requires a common mistake between the parties, and unilateral mistakes typically do not qualify unless they involve fraud or specific conditions are met. The court exercises discretion in granting rectification, focusing on whether it would be inequitable to enforce a document that does not accurately represent the agreement.

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33 views2 pages

Grounds for Rectification Explained

Rectification is a legal remedy that allows for the correction of written instruments to reflect the true intentions of the parties involved, despite the parol evidence rule. It requires a common mistake between the parties, and unilateral mistakes typically do not qualify unless they involve fraud or specific conditions are met. The court exercises discretion in granting rectification, focusing on whether it would be inequitable to enforce a document that does not accurately represent the agreement.

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Shareen Shareen
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© All Rights Reserved
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Rectification

Nature of the remedy

 Rectification is an exception to the parol evidence rule


The parol evidence rule – oral evidence is inadmissible to alter a written instrument
 If an instrument doesn’t work with the intentions of the parties it may be corrected – Irish
Pensions Trusts Ltd v CRC [2005] IEHC 87
 Court won’t rectify the instrument itself rather the mistake in the instrument recording the
contract – “rectification is concerned with the defeats in the recording not the making of an
agreement” – Irish Life Assurance Co Ltd v Dublin Land Securities Ltd [1989] IR 253

Grounds for rectification

 Requires a mistake that is common to both parties with the result that the written document
doesn’t contain the true agreement concluded between them
 Written agreements will only be rectified if there as been a common mistake between the
parties – unilateral mistakes won’t lead to rectification
The exception to this is where the unilateral mistake is one of fact not law – ignorantio juris
non excusat
 Mutual mistake:
i. Not necessary to show a valid contract exists but a common intention must be
demonstrated – Monaghan County Council v Vaughan [1948] IR 306
ii. It must be shown that the parties had a common intention which wasn’t accurately
recorded in the written agreement:
a. Must be a concluded agreement antecedent to the instrument which is
sought to be rectified
b. Antecedent agreement needn’t be binding in law nor in writing
c. Complete antecedent concluded contract is not required as long as there is
prior accord on a term of a proposed agreement outwardly expressed and
communicated between the parties – Rooney & McParland Ltd v Carlin
[1981] NI 138
iii. Lack of precision in relation to alleged common intention will result in the court
refusing to grant the order – Irish Life Assurance Co Ltd v Dublin Land Securities Ltd
[1989] IR 253
iv. Where the bargain is too imprecise to constitute a contract the question of
rectification will be wholly unstable – Ferguson v Merchant Banking Ltd [1993] ILRM
136
v. Rectification can’t be ordered at the suit of a party who wasn’t privy to the
manner/circumstances – LAC Mineral Ltd v Chevron Mineral Corporation [195] 1
ILRM 161
 Unilateral mistake:
i. Where 1 party incorrectly records a term of the agreement but it’s bona fide
accepted by the other party the mistake is said to be unilateral, and no remedy of
rectification exists – the exception is in cases of fraud - Irish Life Assurance Co Ltd v
Dublin Land Securities Ltd [1989] IR 253
ii. To establish a claim for rectification for unilateral mistake the following must be
present:
1. One party wrongly believed the documents included /excluded a particular
term
2. Other party was aware of this mistake
3. Other party didn’t draw attention o said mistake
4. Mistake was calculated to benefit the other party

Thomas Bates& Sons v Wyndham (Lingerie) Ltd [1981] 1 ALL ER 1077

Proof of mistake

 The standard of proof for mutual and unilateral mistakes is that on the balance of probability
- Thomas Bates& Sons v Wyndham (Lingerie) Ltd [1981] 1 ALL ER 1077
Upheld Ire in Boliden Tara Mines Ltd v Cosgrave [2010] IESC 62

Discretionary factors

 Is a discretionary equitable remedy


 Is generally granted where it would be inequitable to bind parties to a bargain that doesn’t
reflect their agreement

Common questions

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The primary exception to the parol evidence rule in contract law is rectification. It applies when a written instrument does not reflect the true agreement between the parties due to a mutual mistake in recording, not making, the agreement . Rectification is allowed if a common mistake by both parties results in the document not containing the true agreement they concluded . A unilateral mistake does not typically lead to rectification, unless it involves fraud or the mistake was of fact, not law, and one party knowingly benefited from it .

Rectification for unilateral mistakes can be used as a remedy only in specific conditions: when one party incorrectly records a term of the agreement, the other party is aware of the mistake, does not draw attention to it, and the mistake was calculated to benefit that party . Additionally, rectification for a unilateral mistake may be considered in cases of fraud . The standard of proof for establishing a unilateral mistake is on the balance of probability .

To establish rectification based on mutual mistake, it is not necessary to show a valid contract exists, but it must be proven that both parties had a common intention not accurately recorded in the agreement . An antecedent agreement plays a critical role, as there must be a concluded agreement antecedent to the instrument sought to be rectified. This antecedent agreement, however, need not be binding in law or in writing, nor a complete contract, as long as there was prior accord on a term of a proposed agreement outwardly expressed and communicated between the parties .

Rectification is a discretionary equitable remedy and courts typically grant it when it would be inequitable to bind the parties to a bargain that does not reflect their true agreement . This implies that the court has significant latitude in deciding whether to apply rectification based on fairness considerations and the need to reflect the true intentions of the parties .

The standard of proof for mistakes in contract rectification cases is on the balance of probability . This means the party seeking rectification must prove that it is more likely than not that the mistake occurred and that the written document does not reflect the true agreement. This relatively moderate standard influences the outcome by requiring that the presenting evidence is convincing enough to meet this threshold, impacting whether the court grants rectification .

A court might refuse to grant an order for rectification, even if mutual mistake is established, if there is a lack of precision regarding the alleged common intention of the parties . Additionally, if the mutual mistake or the bargain is too imprecise to constitute a contract, the rectification becomes unstable . A court also cannot order rectification at the suit of someone not privy to the manner or circumstances of the contract .

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