CHAPTER XXVII. Rectification of contract on ground of common mistake. Actual concluded contract must be shown. THE RECTIFICATION OF CONTRACTS. It has long been an established rule of equity, that where a contract has by reason of a mistake common (a) to the contracting parties been drawn up to an effect militating against the intentions of both, the Court will rectify the contract so as to carry out such intentions (b). It is essential that the extent of the rectification should be clearly ascertained and defined by evidence contemporaneous with or anterior to the contract (c). The mistake may be proved by oral, in the proved absence of written evidence (d), and the burden of proof is on the party seeking rectification (e). It is necessary for a plaintiff to show that there was an actually concluded contract, which is inaccurately represented to be the instrument purporting to be made in pursuance of it (ƒ). "Courts of equity do not rectify contracts; they may and do rectify instruments purporting to have been made in pursuance of the terms of Mackenzie v. contracts." Therefore, in Mackenzie v. Coulson, James, V.-C., Coulson. Mistake must be of fact. Cancellation where mistake of one party only. declined to rectify a policy of marine insurance (by inserting the words "free from particular average" in lieu of the words "average recoverable as customary"), so as to make it accord with "a thing called a slip which was a piece of paper on which something was written, pending a negotiation for the effecting of a policy of insurance" (g). As a general rule, the mistake must be one of fact not law (h), or of construction of the contract sought to be rectified (i), but this rule does not apply to a mistake as to title or private right (k). Where the mistake is that of one party only, the remedy, if grantable, is cancellation, not rectification; but the convenient (a) Fowler v. Fowler (1859), 4 De G. & J. 250; Duke of Sutherland v. Heathcote, [1892] 1 Ch. at p. 486, C. A. (b) See Cooper v. Phibbs (1867), L. R., 2 H. L. 149; as to disentailing deed enrolled under the Fines and Recoveries Act, see Hall-Dare v. Hall-Dare (1885), 31 Ch. D. 251, C. A. (c) Bradford (Earl) v. Romney (Earl) (1862), 30 Beav. 431. (d) Lackersteen v. Lackersteen (1860), 30 L. J., Ch. 5. (e) Tucker v. Bennett (1887), 38 Ch. D. 1, C. A. (f) See Seton on Decrees, Vol. II., Pt. 1, p. 1342, citing M'Kenzie v. Coneson, infra; Bentley v. Mackay (1862), 31 L. J., Ch. 697, 709, App. (g) Mackenzie v. Coulson (1869), L. R., 8 Eq. 368. (h) Midland G. W. Rail. Co. v. Johnson (1858), 6 H. L. C. 798. (i) Id. (k) Cooper v. Phibbs (1867), L. R., 2 H. L. 149. Contracts. Cancellation course may be adopted in such a case of decreeing cancellation with CH. XXVII. an option to the defendant to accept rectification instead. This Rectification of course was taken by Bacon, V.-C., in Paget v. Marshall (1), in which the defendant by mistake had offered and demised to the with option of defendant, four floors of three houses, whereas he had intended to rectification. reserve for his own use the first floor of one of the houses. It had previously been taken in a case where it was laid down that the rule that a mistake must be mutual to enable the Court to rectify, is subject to the exception that the Court will interfere where one party being at the time cognisant of the fact of the error, seeks to take advantage of it. This was in Garrard v. Franckel (m). There the defendant agreed to take from the plaintiff a lease of a house at the rent of 230l., and in the lease drawn up in pursuance of the agreement, the rent was stated to be 130l. Lord Romilly, M. R., considered that the error was the plaintiff's, but that the defendant must have perceived it, and held that though the plaintiff was not entitled to have the lease reformed, the lessee ought to have the option of taking the reformed lease or of rejecting it. Paget v. The reader has been already referred (ante, p. 129) to a series Corrections of of cases in which the Courts of common law have corrected clerical clerical errors. errors; and also (ante, p. 157) to cases in which parol evidence has been admitted to explain latent ambiguities. The Court has rectified a bill of exchange (n), a transfer of shares Other inwrongly numbered (0), a bill of quantities (p), and very frequently stances of marriage settlements (q). be restored Rectification will be refused if the parties cannot be restored to Parties must the same position which they occupied prior to the contract sought to former to be rectified; but this rule will not be applied so strictly as to position. include an exact restoration (r). barred by After money has been paid under a judgment founded on the Rectification construction of an agreement, an action to rectify the agreement on payment of the ground that such construction was contrary to the intention of money under all parties is barred (s). judgment. It may frequently happen in the course of a protracted negotia- Effect of tion over a series of clauses, that one of them, put forward by one without attenpassing over party, may be technically assented to by the other without any con- tion one of sideration whatever, but the single fact of there being no discussion many clauses. on a particular point will not justify the Court in saying that a (1) Paget v. Marshall (1884), 28 Ch. D. 255. (m) Garrard v. Franckel (1862), 30 Beav. 445. (n) Druiff v. Lord Parker (1868), L. R., 5 Eq. 131. (0) Ind's case (1872), L. R., 7 Ch. 485. (p) Neill v. Midland Rail. Co. (1869), 17 W. R. 871. (q) See Bold v. Hutchinson (1855), 5 D. M. & G. 568; Seton on Decrees, Vol. II., Pt. 1, p. 1233. (r) Beauchamp (Earl) v. Winn (1873), L. R., 6 H. L. 223. (s) Caird v. Moss (1886), 33 Ch. D. 22, C. A. CH. XXVII. mistake committed on one side must be taken to be mutual (t), Rectification of and in these cases the real mistake is that of the party who neglected to give consideration to the particular clause. Contracts. Voluntary deed. Purchaser. Procedure: action must be in Chancery Division. Jurisdiction of County Court. A voluntary deed cannot be rectified except with the consent of the donor (u). A deed will not be rectified as against a purchaser (r). Actions for rectification are by s. 34, sub-s. 3 of the Judicature Act, 1873, assigned to the Chancery Division of the High Court; but the other Divisions have jurisdiction under s. 24 of that Act to rectify contracts incidentally, as where a defendant claims rectification by counter-claim (y). The Court can both rectify and decree specific performance in one and the same action (2). By s. 67 of the County Courts Act, 1888, 51 & 52 Vict. c. 43, a County Court may exercise all the powers of the High Court in actions for the reforming of any agreement for the sale, purchase, or lease of any property where in the case of a sale or purchase, the purchase money, or in the case of a lease the value of the property shall not exceed 500l., and also in actions for relief against mistake in which the damage sustained or the estate or fund in respect of which relief is sought, shall not exceed in amount or value 500l. (t) Thompson v. Whitmore (1860), 1 J. & H. at p. 276. (u) Phillipson v. Kerry (1863), 32 Beav. 628. (x) Seton on Decrees, Vol. II., Pt. 1, at p. 1342, citing Garrard v. Franckel (1862), 30 Beav. 445. (y) See Mostyn v. West Mostyn, &c., Co. (1876), 1 C. P. D. 145; Storey v. Waddle (1879), 4 Q. B. D. 289. (z) Olley v. Fisher (1886), 34 Ch. D. 367. INDEX. **All the chapters have paged tables of contents prefixed to them. ABSTRACT OF TITLE, contract to deliver, not performed by handing deeds to purchaser, 330. death by, executor's remedy in case of, 442. liability of carriers of passengers for, 439. no excuse for loss of or injury to goods, in the case of carriers, 409. perishing of goods sold by, effect of, 365. performance of contract not excused by occurrence of, 614. when an excuse for delay, in the case of carriers, 410. ACCOUNT STATED, 93 et seq. acknowledgment of must be unqualified, 95, 96. admission of a debt certain, what sufficient, to support claim upon,[91. Statute of Limitations, when barred by, 692. ACKNOWLEDGMENT, of debt, &c., does not require an agreement stamp, 168. what sufficient to take a case out of the Statute of Limitations, 686. ADMISSION, effect of, in simple contracts, as an estoppel, 7. of correctness of account does not require a stamp, 153, 155. ADULTERY of wife, effect of, as to husband's liability on her contracts, 236, 243. AFFREIGHTMENT, CONTRACT OF, by what law questions arising under, are to be determined, 125. AGENT, 252-277. acknowledgment by, to bar Statute of Limitations, 691. in writing, signed by authorized agent, 691. when required to be by deed or writing, 254. authority of, construction of, 258, 261. delegation of not ordinarily allowed, 264. given to several must be exercised by all, 264. misrepresentation of, agent's liability for, 274. to pledge, at common law, 255. under Factors Acts, 266. when resident abroad, 276. to sell on credit, 263. to take payment by cheque, 264. |